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Amending the Single Audit Act

Recently, the federal government has been studying possible amendments to the Single Audit Act of 1984. The purpose of these amendments would be to make Single Audits more efficient and effective. The GFOA continues to be a strong supporter of the Single Audit Concept. Accordingly, the GFOA stands ready to support any proposal that would improve the efficiency and effectiveness of audits of federal financial assistance at the state and local level.

The GFOA supports the following specific proposals that are currently under consideration by the federal government:

  1. The GFOA strongly supports the recommendation to raise significantly the dollar thresholds at which Single Audits become mandatory;
  2. The GFOA supports the recommendation to allow auditors more flexibility in selecting individual federal financial assistance programs for testing (i.e., based on risk rather than on size alone);
  3. The GFOA supports the recommendation to require that the Compliance Supplement for Audits of State and Local Governments be updated on a more timely basis;
  4. The GFOA supports the recommendation to build a Single Audit database that could be useful in identifying emerging problems and trends; and
  5. The GFOA supports the recommendation that the President's Council on Integrity and Efficiency work with federal program managers to help the latter make more effective use of Single Audit information.


The GFOA wishes to voice its concerns, however, regarding certain other specific proposals under consideration:

  1. The GFOA strongly objects to shortening the period for submitting Single Audit reports. There is no sound reason for requiring state and local governments to incur substantial additional costs to make Single Audit reports available even earlier when federal agencies have yet to make timely use of the Single Audit reports now being prepared under existing deadlines;
  2. The GFOA objects to requiring that auditors formally assess certain management representations regarding the implementation of internal controls. Internal controls are already tested as part of the audit of the financial statements. Additional testing of internal controls would lead to higher audit fees with no demonstrated practical benefit to either federal agencies or state and local governments; and
  3. The GFOA objects to requiring summaries of auditor's reports. The best way to improve reporting on the Single Audit is to reduce and simplify the number and content of the existing auditor's reports, not to add yet another layer of auditor reporting.
  4. The GFOA strongly objects to any federal effort that would have the effect of introducing the federal government into the audit procurement process, either directly or indirectly.


The GFOA also believes that both the federal government and state and local governments are best served when high quality auditors perform Single Audits. To encourage audits by high quality auditors, it is essential that the audit control review process be fair. For example, in accordance with generally accepted government auditing standards, reviews of audits should focus on systemic weaknesses rather than on isolated instances of noncompliance. In addition, auditors should be provided with the opportunity to appeal the results of quality control reviews to someone other than the Inspectors General (e.g., the Office of Management and Budget), whenever there is a disagreement regarding facts or the exercise of auditor judgment. Also, the GFOA believes that federal reviews of audit quality should be limited to matters of direct concern to the federal government. For example, it is not appropriate for federal reviewers to question the professional judgment of management or the auditors regarding the format and content of the audited financial statements.

The GFOA applauds and supports recent federal efforts to improve the efficiency and the effectiveness of Single Audits. At the same time, the GFOA wishes to reiterate the importance that must be placed on auditor judgment if audits of federal financial assistance are to be truly effective. The GFOA will not support any proposal that has the practical effect of preempting auditor judgment in the conduct of Single Audits.

Adopted: June 7, 1994