Feb 12, 2016
Ann M. Cole CPA
If your organization is a recipient of federal grant funds, whether they are received directly from a federal agency through a federal government program, or through a pass-through entity such as the State of Oklahoma, it is necessary to review your federal expenditures to determine if you will need a Single Audit as defined in OMB Circular A-133. The organization will be required to have a single audit if it has expended $500,000 or more in federal funds during the organization’s fiscal year. The first step in making this determination is to review your expenditures and identify which expenditures have been made from federal grant programs.
For example, let’s say that the organization has received a grant for agricultural market and economic research and a grant for producing biodiesel. Under the first grant, funds expended total $350,000 and under the second biodiesel grant, funds expended totaled $250,000. The agriculture market and economic research grant was received through the State Department of Agriculture and the biodiesel grant came directly from the United States Department of Agriculture. Although the economic research grant came through a state agency, the funds were under a federal program and those funds will count toward the total amount expended in federal program funds. Adding the two grants together, the total is $600,000, which is greater than the $500,000 threshold amount and a Single Audit will be required.
However, federal regulations and audit requirements for Single Audits are getting ready to change.
Organizations must be aware that for years ending on or after December 31, 2015, the threshold for determining the requirement for a single audit has increased. Under the new federal guidelines, an organization that expends $750,000 or more in federal program funds will be required to have a Single Audit. Referring to the example above, if the organization’s year end is December 31, 2015, they will not be required to obtain a single audit because the $600,000 in federal program expenditures is less than the $750,000 threshold.
Arledge & Associates, P.C. is experienced with government and not-for-profit organizations who receive federal funds. If you need assistance to determine your requirements, please contact our office, we will be happy to assist you with your compliance.