The Single Audit Act of 1984 | Governmental Course | CPA Exam BAR

In this video, I discuss Single Audit of 1984.
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The Single Audit Act of 1984 is a United States federal law that was enacted to standardize the way audits are conducted for states, local governments, and non-profit organizations receiving federal financial assistance. Prior to the Single Audit Act, these entities were subject to multiple audits by different federal agencies, which was often redundant and inefficient.

Key points about the Single Audit Act of 1984 include:

Purpose: The act was designed to improve financial management and ensure sound use of federal funds by requiring a single, comprehensive audit that would satisfy all federal agencies.

Scope: The Single Audit Act applies to non-federal entities that expend $750,000 or more in federal funds in a year (this threshold was raised from the original amount specified in the 1984 Act due to amendments over the years, most notably by the Single Audit Act Amendments of 1996 and the Uniform Guidance implemented in 2014).

Audit Requirements: The single audit includes both financial statements and the federal awards received and expended by the entity. It focuses on the entity's internal controls and compliance with the terms and conditions of the federal awards.

Oversight: The Office of Management and Budget (OMB) is responsible for overseeing the implementation of the Single Audit Act and has issued various circulars detailing the standards for audits, known as the OMB Circular A-133, which has since been superseded by the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, located at 2 CFR Part 200.

Impact: The Single Audit Act has been beneficial in reducing the audit burden on entities receiving federal funds, improving federal oversight, and enhancing the accountability of entities in the management and use of those funds.

The Act has been amended and updated over time, most notably by the Single Audit Act Amendments of 1996 and the introduction of the Uniform Guidance by the OMB in 2013, which further streamlined and clarified audit requirements for federal awards, effective December 26, 2014. These updates have continued to refine the audit process and ensure that federal funds are used efficiently and effectively.





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