Audits are an intimidating but very natural part of owning any business or entity that receives more than $750,000 in federal grants or awards. These audits involve an assessment of financial statements and an audit of the Schedule of Expenditures of Federal Awards (SEFA). It’s during this audit that testing is performed in accordance with the Office of Management and Budget’s (OMB) compliance requirements.
There are 12 requirements that are generally tested for in each program, although not all of them are applicable to every grant. As mentioned, these audits can be intimidating and stressful for any entity requiring one—that’s why we at Atherton & Associates, LLP want to help.
Receiving a Single Audit
The Director of the OMB has the authority to develop audit policies that comply with the Single Audit Act. There is where the Uniform Guidance regulation stems from—one of the more recent OMB regulations that detail uniform cost principles and audit requirements that track the aforementioned rewards to non-federal entities.
What’s Allowed with Uniform Grant Guidance?
There are rules when it comes to determining what is allowed to be charged to a grant. Grants are distributed to entities for a myriad of purposes and are distributed by many agencies including the U.S. Department of Agriculture (USDA), the U.S. Department of Education (ED), the U.S. Department of Health and Human Services (HHS) and so much more. But grant-funded activities must align with the agencies from which the grant was received—you can’t use a USDA grant to fund a cafe, for example.
But then how do you know what is allowable for the grant? Thankfully, each grant should come with a grant agreement. Normally the proposal for a grant is filled out with the knowledge of what the grant will be used for before it’s received.
Although, as anyone in charge of a project knows, scope creep is inevitable—and occasionally, a change in scope can mean infringing on activities that are not allowed by the grant. Before spending, it’s always wise to check with the granting agency.
When it comes to the audits themselves, Atherton & Associates, LLP has extensive experience in conducting single audits in accordance with the Uniform Grant Guidance regulation. For more information about the specifics of grant audits, contact Atherton & Associates, LLP.