There is an immense increase in Single Audits in 2020, and that’s because Tribal Government expenditures were larger in 2020 than ever in modern history. This is because the Federal Government distributed incredible amounts of funds to Tribal Governments within the Coronavirus Relief Fund (“CRF”). These funds were designed to be used to mitigate the negative effects that the global pandemic had on the Tribal Members of Tribal Governments.
These funds put many Tribal Governments in a scenario that they have never been before, they are required to receive a Single Audit to test their compliance with the use of the CRF amounts. A Single Audit, previously known as the OMB Circular A-133 audit, is an organization-wide financial statement and federal awards’ audit of a non-federal entity that expends $750,000 or more in federal funds in one year.
It is without a doubt that the funds distributed from the Federal Government were an enormous assistance for Tribal Governments nationwide; however, don’t let the Single Audit surprise you.
The best way to prepare is to first create a separate fund within your general ledger for the amounts received and distributed on behalf of the CRF. The expenditures should be closely monitored to ensure the compliance with both your purchasing internal controls and the vague literature describing what these funds can be used for. Document and ensure approval of any changes to your purchasing process as a response to the global pandemic. This can include bidding processes, approval hierarchy, or emergency assistance. You don’t want to make changes to your internal controls without the appropriate approval. Don’t get caught surprised when your financial audit includes a single audit for the first time. Consult with your legal team and accounting team to be prepared and proactive for your audit.