Single Audit Act of 1984 with Amendments

• Author: Mary Fischer
• Pages: 668-670

Page 668

The U.S. Congress adopted the Single Audit Act (SAA; Public Law 98-502) in 1984 to establish entity-wide audit requirements for state and local governments and Indian tribal governments receiving federal financial assistance. The assistance may include grants, contracts, loans, loan guarantees, property, cooperative agreements, interest subsidies, insurance, and direct appropriations from a number of federal agencies. Audits performed under the SAA are intended to satisfy all federal agencies providing assistance to the entity. Before the SAA, federal agencies had the authority to require an audit of each federally funded program or activity. Thus, audit overlaps and organizational inefficiencies existed as there was no coordination among the federal agencies.

GOAL, OBJECTIVES, AND ADMINISTRATION

The goal of the SAA is that one audit can provide both a basis for an opinion on the recipient entity's financial statement and a basis for determining whether federal financial assistance program resources are being managed and controlled appropriately and used in accordance with legal and contractual requirements.

Also included in the SAA objectives are to:

Establish uniform audit requirements for federally funded financial assistance programs provided to state and local governments and Indian tribal governments

Promote the efficient and effective use of audit resources

Establish uniform requirements for audits of federal funds provided to state and local governments

Ensure that federal departments and agencies reply upon and use audit work performed pursuant to the SAA to the maximum extent practicable

The director of the U.S. Office of Management and Budget (OMB) is responsible for dictating policies, procedures, and guidelines to carry out the SAA. These policies, procedures, and guidelines were initially contained in OMB Circular A-128, Audits of State and Local Governments (1984). Circular A-128 required (1) an audit of the state or local government's (entity's) general-purpose or basic financial statements made in accordance with generally accepted government auditing standards covering financial and compliance audits, and (2) tests of internal accounting and other control systems to provide reasonable assurance that the entity was managing federally assisted programs in compliance with applicable laws...