Harsh Words for the Single Audit

April 25, 2012 | By Jerry Ashworth | Post a Comment

The Office of Management and Budget Circular A-133 single audit took a beating Tuesday during a session during the National Grants Management Association’s annual training conference in which federal representatives asked attendees their reactions to the potential changes in OMB’s recent notice of proposed guidance.

One respondant said that the single audit “does nothing for us” as a tool to assess her organization’s subrecipients, deeming the single audit as “labor-intensive accounting paperwork.” She found that her organization’s own monitoring and documentation reviews were more effective for evaluating its subrecipients. Ouch!

Another respondent said that her organization had received a single audit and an Office of Inspector General audit and concluded that the single audit was too broad and failed to identify questioned costs as well as the OIG audit did. Another respondent said that Circular A-133 audits were “redundant and expensive,” and that her local policies keep her entity in compliance with grants requirements. Even more bruises!

The single audit did have some supporters though, with one respondent calling it a “security blanket” to determine if its subrecipients were compliant, while another said that the single audit can show if a subrecipient has the capability to handle a grant. However, another respondent said the single audit’s quality can really depend on the auditor. “I’ve had many junior auditors even ask me if an item of expense is allowable,” he said. Ugh!

This is telling. The grantee community pretty much is saying the process is broken and needs fixing. Regardless of whether or not OMB raises the single audit threshold level to $1 million as proposed, it appears there are even deeper problems with single audits that must be addressed to make them viable. And all this goes without mentioning the audit sampling report a few years back that found that more than half of all single audits were of poor quality or limited reliability.

Keep your eyes peeled on the next moves by OMB as they make changes under the proposed reforms. I know we will!

What changes would you like to see made to the Circular A-133 single audit process? We’d like to know.  

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