Academic journal article The Journal of Government Financial Management

Leveraging Technology: Creating an Interactive Single Audit Database

Academic journal article The Journal of Government Financial Management

Leveraging Technology: Creating an Interactive Single Audit Database

Article excerpt

The federal government doles out more than half a trillion dollars annually in federal assistance, usually in the form of grants. With this money comes strings, and as a condition of receiving this assistance, recipients must demonstrate fiscal responsibility and compliance with any provisions tied to the assistance.

The single audit process outlined in the U.S. Office of Management and Budget Circular A-133 is the mechanism the federal government uses to gain assurance that recipients and pass-through recipients are responsible stewards of federal funds. In fact, the A-133 process has created close to half a million audit reports and data collection forms over the last 15 years. Unfortunately, the utility of all this information is hampered to large extent by the inability to link between the electronic data collection form and the auditor's reports, which are transmitted in Portable Document Format, commonly known as PDF files.

One possible solution is to link the data collection form and auditor's report using a technology such as extensible business reporting language, or XBRL, to tag the report so that digital links could be developed between the reports and the form.

This article provides a snapshot of the results of a recent AGA research effort. The full report, Creating an Interactive Single Audit Database, No. 24 in the AGA CPAG Research Series, is available online at

Research often leads one down a serendipitous path, and this AGA-sponsored research effort was no exception. In this case, attempts to develop a taxonomy based on XBRL standards were frustrated on several levels, but there was an "ah ha!" moment that led to an alternative approach and technology, which enabled the team to digitally link the data collection form and the auditor's report.

The Single Audit Process

The single audit process is an audit or examination that the federal government requires of nonfederal entities receiving $500,000 or more of federal financial assistance. A single audit is divided into two areas: the financial component is akin to a financial audit of a nonfederal entity, which includes the audit of the financial statements and accompanying notes; the compliance component covers the recipient's activities with respect to the entity's internal controls, federal assistance usage, operations and compliance with laws and regulations.

The A-133 Compliance Supplement, which provides guidance for the second part of the single audit, is an extensive guide used in auditing federal assistance and federal grant programs. It is an important tool for the auditor and serves to identify 14 standard compliance requirements that recipients must follow when receiving and using federal assistance.

After a single audit is complete, the recipient sends a data collection form and a reporting package to the Federal Audit Clearinghouse (FAC). The data collection form, Form SFSAC, provides a summary of the single audit performed, including a list of the federal programs audited, and a summary of any audit findings reported by the auditor. The reporting package includes the complete set of statements and auditor's reports.

Both the data collection form and the reporting package are submitted to the FAC and responsible federal agencies no more than 30 days after the auditor submits reports, or nine months after the final day of the audit period, whichever comes first.

The FAC is housed in the U.S. Department of Commerce's Bureau of the Census. It disseminates audit information to federal agencies, maintains a database of completed audits, and follows up with awardees who have not reported. Almost 40,000 annual audit reports are received, and the number of reports may grow as American Recovery and Reinvestment Act funding pushes more recipients over the $500,000 reporting threshold.

So Where Does XBRL Fit In?

XBRL tags electronic data with an identification code that stays with the data as it moves. …

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