Nonprofit and Single Audit — Lounev Advisory Services LLC

Federal and state awards · Government Auditing Standards · Uniform Guidance

Financial statement audits, reviews, compilations, and preparation engagements for nonprofit organizations — workforce development, community and economic development, education, faith-based, social service, and internationally focused organizations.

Single Audits under the Uniform Guidance

Schedule of expenditures of federal awards — testing and reconciliation to the accounting records, and assistance with its preparation subject to management oversight and auditor-independence requirements
Major-program determination under the risk-based approach, including low-risk auditee status and the Type A threshold
Compliance testing over the requirements that are direct and material to each major program
Activities allowed, allowable costs and cost principles, indirect cost rates and the de minimis election
Eligibility, tested through participant files where the program requires it
Period-of-performance and liquidation-period testing
Procurement, suspension and debarment; reporting; program income and matching
Subrecipient monitoring, contractor determinations, and procurement compliance, as applicable
Internal control over compliance
Findings and questioned costs, presented in enough detail to prepare a corrective action plan
Completion and signature of the auditor’s portions of the Data Collection Form (SF-SAC), and coordination of its submission — the auditee submits the form and the reporting package

Under the 2024 revision of the Uniform Guidance, the Single Audit threshold is $1,000,000 in federal awards expended, applicable to fiscal years beginning on or after October 1, 2024. The minimum Type A threshold is also $1,000,000; above that level of total federal awards expended, Type A classification follows the graduated table in 2 CFR 200.518(b)(1). A Type B program is simply one not classified as Type A. For a growing organization this changes which programs are audited as major, and it is worth confirming before the year closes rather than after.

Reporting to the Federal Audit Clearinghouse

The reporting package and the Data Collection Form are submitted by the auditee — that responsibility cannot be transferred to the auditor. What can be done, and is done here, is to complete and sign the auditor’s portions of the form and coordinate the submission so it is not the thing that slips: under 2 CFR 200.512(a), the package is due the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Smaller firms often hand the whole submission to the client and treat the signed report as the end of the engagement. It is not the end of the engagement here.

Government Auditing Standards

Yellow Book reporting on internal control over financial reporting and on compliance with laws, regulations, contracts, and grant agreements. Federal and state grant compliance, including expenditure-allowability determinations and reconciliation of grant reports to the accounting records.

Nonprofit accounting under ASC 958

Net asset classification and donor restrictions
Contributions and conditional contributions; refundable advances and deferred contract revenue
In-kind contribution valuation methodologies — services, facilities, and other nonfinancial assets
Functional expense reporting and allocation
Liquidity and availability disclosures
Related-party transactions, including affiliated organizations
Going-concern evaluation
Form 990 coordination

How the engagement runs

Planning begins with an entrance conference and a documented risk assessment, followed by walkthroughs of each significant transaction cycle. Anything that appears likely to become a finding, a questioned cost, a material weakness, or an audit adjustment is raised with management in writing when it is identified — not held until the draft reports are issued. That gives management time to produce supporting evidence or begin corrective action while the audit is still in progress. Matters that meet the reporting criteria are reported as required.

Status reports are issued at the close of each segment of the work plan and whenever a significant schedule risk arises, so the engagement’s position is never something you have to ask for.

Who performs the work

Every hour of fieldwork is performed by a licensed CPA; no audit procedures are delegated to staff auditors or CPA candidates. Boards, finance committees, and program staff deal directly with the CPA doing the work, with no layer of junior personnel in between. The continuing professional education required under Government Auditing Standards — including the hours in government-auditing subject matter — is completed and documented.

Where the firm is lean on headcount it makes up for it in technology: modern, cloud-based audit software and data analytics carry the testing and documentation work, so CPA time goes to judgment and communication instead of paperwork.