Single audit relief provided to certain governments with Treasury COVID-19 funding

By Neil Amato

Relief from single audit requirements has been granted for some small governments that are not accustomed to such audits but would have needed them because of unprecedented government funding in the wake of the COVID-19 pandemic.

The U.S. Department of Treasury, the Office of Management and Budget (OMB), the AICPA Governmental Audit Quality Center (GAQC), and the National Association of State Auditors, Comptrollers, and Treasurers have collaborated to develop an alternative that would be less burdensome than a full single audit or a program-specific audit, according to a recent GAQC alert.

More than 30,000 entities — primarily state, local, and tribal governments — have received funding as part of Treasury's $350 billion Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program. Recipients that spend $750,000 or more in such aid in a given year are normally subject to a single audit. However, many CSLFRF funding recipients are very small local governments that may previously have had little to no experience with single audits.

Now, recipients who meet both of the criteria below have the option to follow the alternative CSLFRF compliance examination engagement:

  • The recipient's total CSLFRF award received directly from Treasury or received (through states) as a non-entitlement unit of local government is at or below $10 million; and
  • The recipient expended less than $750,000 in other federal awards in the recipient's fiscal year.

The alternative engagement, which is required to be performed under the AICPA's attestation standards and Government Auditing Standards, will focus on two narrowly scoped compliance requirements related to Activities Allowed and Unallowed, and Allowable Cost/Cost Principles.

The GAQC has begun developing additional guidance for practitioners performing these engagements. The guidance will be included in a GAQC Practice Aid that will assist practitioners in understanding the AICPA attestation standards and those standards' requirements, along with highlighting important performance considerations and illustrative reporting.

The GAQC will have a webcast covering the CSLFRF program, including the alternative engagement, on April 21 from 1–3 p.m. ET.

The GAQC alert also addressed:

  • The removal of the special test and provision that was subject to audit for the Provider Relief Fund program in the 2021 OMB Compliance Supplement. The removed requirement is related to Out-of-Network Patient Out-of-Pocket Expenses.
  • An independence rules comparison tool recently issued by the AICPA Professional Ethics team. The tool offers an overview of the various independence requirements, detailed comparisons of the conceptual framework approach and nonattest/nonaudit services topics, and comparison tables with references to the independence interpretations in the AICPA Code of Professional Conduct and specific references to requirements in Government Auditing Standards, or the Yellow Book.

— To comment on this article or to suggest an idea for another article, contact Neil Amato at

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