American Rescue Plan Act (ARPA) and the Single Audit

What is a Single Audit?

A single audit is an audit of an entity that spends $750,000 or more in federal funding, typically grants and awards, to ensure that the funds are being spent properly and that the entity is complying with laws and regulations.

How ARPA Affects Single Audits

With the signing of the ARPA during 2021, the likelihood of your entity needing a single audit is even more probable than when the CARES Act became law back in March 2020. ARPA provided funding for existing programs and also created new programs such as the $350 billion Coronavirus State and Local Fiscal Recovery Fund (CSLFR). These funds will be provided in two payments which increases the likelihood of your entity needing a Single Audit over the course of multiple years.

The Catalog of Federal Domestic Assistance (CFDA) number assigned to the CSLFR program is 21.027 and any funds received under this program should be reported on the Schedule of Expenditures of Federal Awards (SEFA) with this CFDA number.

What You Can Do to Prepare

One key aspect of a single audit for the CSLFR will include a test of internal controls and compliance to ensure that funds are being used for eligible uses. Documenting your written procedures and gathering any supporting documentation such as invoices or payroll documents will assist the auditor in those tests of internal controls and compliance. Another good way to prepare is to review all program requirements that the U.S. Treasury set forth in their Interim Final Rule and their Compliance and Reporting Guide as these requirements will form the basis for the compliance testing in a single audit.

The second aspect of a single audit for the CSLFR regards equipment and real property. As one eligible use of CSFLR funds regards water, sewer, and broadband projects, your entity should comply with any legal requirements which are already required including receiving any forms IC-134 or receiving a verification that the contractor is considered a responsible contractor for any contracts over $50,000. Also required is that any contractors or subcontractors on eligible projects are not suspended or debarred.

One final requirement will be verifying that the annual Project and Expenditure Report was submitted by October 31. The first report will cover the period from the award date until September 30, 2021 and is due by October 31, 2021. The next report will cover the period from October 1, 2021 until September 30, 2022 and is due on October 31, 2022. The Project and Expenditure Report will be an annual report until the final report covering the period of October 1, 2026 through December 31, 2026 is submitted on March 31, 2027.

How We Can Help

Whether you are preparing for your first single audit, have had single audits for years, or if you need advice on any other matter, CDS has experienced professionals and trusted advisors who can assist you with:

  • Conducting single audits and preparation of the SEFA
  • Navigating compliance requirements under Uniform Guidance
  • Developing internal controls
  • Assistance in preparation of the Project and Expenditures Report
We’re here to help

Visit with one of our audit experts to discuss your situation.