Enhancing Single Audit Quality: Insights from the National Single Audit Sampling Project
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The National Single Audit Sampling Project, presented by Dave Yuhas and Donna Denker, aimed to evaluate the quality of single audits performed in 2002/2003. Covering 208 audits from a total of 38,000, the report revealed significant deficiencies in over one-third of the reviewed audits, particularly among entities receiving less than $50 million in Federal Awards. Recommendations for improvement, including revising audit standards and increasing auditor training, emphasize the importance of choosing qualified auditors to ensure compliance and accountability in public spending.
Enhancing Single Audit Quality: Insights from the National Single Audit Sampling Project
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Presentation Transcript
THE AUDITOR’S AUDIT Presented by Dave Yuhas Donna Denker and Associates
NATIONAL SINGLE AUDIT SAMPLING PROJECT • Project conducted under sponsorship of : • President’s Council on Integrity and Efficiency • Executive Council on Integrity and Efficiency • Three State Auditors • Not all that important. Just interesting to see how many organizations had to be created and involved to get this project completed. • Report issued in June 2007
OBJECTIVE • The Project was performed to: • Determine single audit quality • Provide baseline for monitoring ongoing quality • Recommend needed changes to the process or the Single Audit Act
POPULATION/SAMPLE • Study covered 208 audits out of a total 38,000 single audits performed in 2002/2003 -- 005%. • Breakdown of 208 – The 2 buckets • 96 were from 852 entities expending Federal Awards greater than $50 million. • 112 were from 37,000 entities expending Federal Awards less than $50 million. • Which bucket does your entity fall into?? • 97% audits conducted were on entities receiving less than $50 million -- 37,000 of the 38,000.
OVERALL RESULTS • 115 of 208 acceptable – 48.6% • 115 represented 92.9% of total Federal Awards • Bucket #1 audits for the most part • 30 had significant deficiencies – 16% • 30 represented 2.3% of total Federal Awards • 63 were unacceptable – 35.5% WOW!! • 63 represented 4.8% of total Federal Awards
BUCKET #1 • Total of 96 audits • 61 (63.5%) were acceptable • 12 (12.5%) had significant deficiencies • 23 (24%) were unacceptable • What is this telling us? • Who performs these audits?
BUCKET #2 • Total of 112 audits • 54 (48.2%) were acceptable • 18 (16.1%) had significant deficiencies • 40 (35.7%) were unacceptable • More than half unacceptable! • What would your audit be classified as? • What is more important quality/cost?
DEFICIENCIES Not documenting the understanding of internal controls over compliance requirements -- 56.5% Not documenting the testing of internal controls of at least some compliance requirements – 61% Not documenting compliance testing of at least some compliance requirements – 59.6%
EFFECT/RECOMMENDATIONS • Revised and improved single audit standards, criteria and guidance. • Improve standards/guidance • Suite of 8 plus more! • Established minimum requirements for training on performing single audits • More CPE both as pre-requisite and ongoing. • Review and enhance processes to address unacceptable audits • Possible application of suspension and debarment process • In the end • More procedures = more time • More time = increased audit costs
MESSAGE • Choose your auditor carefully! • RFP should include: • Details • Deadlines • Time • Staff experience • Peer review • References • What is impact on entity if audit is determined to be unacceptable?
