Single Audit Act:

Single Audit Quality Has Improved but Some Implementation Problems Remain

AFMD-89-72: Published: Jul 27, 1989. Publicly Released: Aug 29, 1989.

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David L. Clark, Jr
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Pursuant to a congressional request, GAO reviewed the Office of Management and Budget's (OMB) implementation of the Single Audit Act, focusing on the: (1) quality of single audits by determining their compliance with generally accepted government auditing standards; and (2) usefulness of single audits to report recipients.

GAO found that: (1) certified public accountants (CPA) complied with auditing standards in 35 of the 40 audits reviewed because their audits showed sufficient evidence of studies and evaluations of internal controls and compliance testing; (2) five CPA firms had problems relating to either internal controls, compliance testing, or reporting significant enough to warrant referral to the appropriate state boards of accounting; (3) federal inspectors general did not provide consistent oversight, and the degree of monitoring over audit quality varied; and (4) although most report recipients had concerns about the usefulness of single audits, most of the reports included findings and covered the majority of federal funds provided, but did not always identify the programs tested for compliance or the extent of testing.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: OMB included an expanded definition of "general oversight" in its questions and answers booklet, which is an attachment to OMB Circular A-128. In addition, the expanded definition will be incorporated into OMB Circular A-128 when it is revised.

    Recommendation: The Director, OMB, should establish and define responsibilities for agencies that provide general oversight.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: OMB issued revised single audit guidance calling for auditors to identify major programs tested for compliance with laws and regulations. Auditors are not required to test nonmajor programs.

    Recommendation: The Director, OMB, should amend OMB Circular A-128 to require auditors to identify in single audits those programs tested for compliance with laws and regulations and to differentiate among those tested as major or nonmajor programs and those tested in connection with the audit of the general purpose financial statements.

    Agency Affected: Executive Office of the President: Office of Management and Budget


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