It is important that money given to education be spent appropriately and lawfully for the specific educational purpose for which it was given. To ensure that, state and federal laws require that school districts and other organizations receiving public education funds have their finances looked at every year by a certified public accountant (CPA).
A written report of this examination must be prepared and submitted by the CPA firm to the district, the state, and the federal government. It is the Department of Education's responsibility, through the Audit Oversight process, to make sure that those yearly examinations are performed and to follow up with the district on any issues noted by the CPA firm in their report.
Grantee Audit Requirements
Federal law requires that agencies that expend a designated amount of federal financial assistance complete a Single Audit. A Single Audit is an audit, which conforms to the laws and regulations of the federal Single Audit Act of 1984 and OMB Circular A133, as amended. The Single Audit is actually two audits combined, but performed at the same time. One audit is of the organization’s total financial activities regardless of source. The second audit, accompanying the financial audit, is a separate compliance audit of the organization's expenditures of federal financial assistance funds.
The Single Audit Act applies to state and local governments, non-profits, and higher education institutions that expend sufficient federal financial assistance to meet the minimum audit threshold.
Specifics of the applicable laws and regulations are detailed below:
Federal Financial Assistance is defined as assistance provided by the federal government in the form of grants, contracts, loans or cooperative agreements. It includes awards received directly from federal agencies or indirectly through units of state or local government. It does not include Medicare/Medicaid or contracted Child Care payments through the state or federal governments.
Currently, the total of federal financial assistance expenditures from all sources combined must be at or above $500,000.
Organizations that expend at least $500,000, but expend it all from one program may elect to audit only that program. However, they may do so only if the program’s regulations do not require an organization wide audit. Alternatively, they may audit their entire organization, even if only a program audit is required. If they are funded from more than one federal source and expenditures from all sources total more than $500,000, they must do a Single Audit of their entire organization.
Organizations that expend less than $500,000 of federal funds from all sources are not required to have a Single Audit. They may, however, be subject to audit requirements specific to the program (s) from which they receive funds.
The RIDE Audit Oversight Office requires that organizations that meet the above criteria submit their Single Audit reports to this Office within nine months after the end of the organization’s fiscal year. Failure to submit Single Audit reports on a timely basis could jeopardize the organization’s funding.
If you have any questions regarding the Single Audit Act, please contact Crystal Martin, Senior Finance Officer for Financial Compliance at 222-8482. You may also email her at the address listed below.
Crystal Martin, Senior Finance Officer