Required information The Single Audit Act Read the case and answer the questions

Question

Required information The Single Audit Act Read the case and answer the questions that follow Congress passed the Single Audit Act to help improve the way federal financial assistance programs that are granted are managed. CONCEPT REVIEWw The Single Audit Act provides a statuatory requirement to test compliance with laws and regulations and internal controls over all federal program compliance requirements. Read the case content and answer the questions that follow BACKGROUND The Single Audit Act provides a mechanism for improving the management of federal financial assistance programs by mandating that federal fund recipients follow compliance requirements and that monies are spent in accordance with program regulations and laws. The Single Audit Act applies to states, local governments, and nonprofit organizations that expend $500,000 or, more within a fiscal year in federal financial assistance. Audits performed under the financial statements. Single Audit Act are more extensive than audits of an organization's Free Trees, Inc. is a nonprofit organization that focuses on planting trees in open areas. For many years, it operated with a budget of approximately $600,000, almost all from private donations. Under various federal stimulus programs in 2010, Free Trees received three different grants. One came directly from the EPA (a federal program) for $410,000; a second came from the USDA (also a federal program) for $72,000, a third came to Free Trees as the subrecipient for $20,000 from the State of Illinols, which acted as a pass- through entity. All funds received were expended

Explanation / Answer

1. Is free trees required to have a Single Audit = Yes

2. Why? In this Case all above funds of $410,000 , $72,000 and $20,000 are considered from federal government and whch sums $502,000 that exceeds minimum Threshold of Single Audit Act.

3. If $20,000 was from independent contractor then it will not be counted towards minimum compliance limit of $500,000. So the Single Audit Act compliance would not be required, as it not reached limit (410+72=$482k).

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