For many nonprofit organizations financial reporting requires an audit in accordance with the Uniform Guidance (formerly OMB Circular A-133) audit, otherwise known as a single audit. Organizations that expend more than $750,000 in federal awards during a fiscal year are subject to single audit requirements.
An audit under the Uniform Guidance is an audit consisting of two main parts: an audit of the basic financial statements and an audit of the organization’s major Federal award programs.
When Davis & Hodgdon performs financial audits that include a “single audit”, they must also follow Generally Accepted Government Auditing Standards (GAGAS) commonly referred to as the “Yellow Book” standards.
In addition to financial audits, the Yellow Book standards cover Performance Audits, which evaluate the performance of a program or project against defined objectives, such as objectives for efficiency and effectiveness.
The audit of the major Federal programs includes:
- Gaining an understanding of and testing the internal controls
- A compliance audit governing laws and regulations and the provisions of contracts and grants of the Federal award programs
- Auditor’s opinion on whether the auditee complied with laws, regulations and the provisions of contracts or grants that have a direct and material effect on each of its major programs
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