INSIGHTS & IDEAS

All audits are not equal

 

On June 22, 2007 a group of federal agencies led by the Office of Management and Budget issued a report on the general quality of single audits of organizations that receive federal grants in excess of $500,000 (yellow book audits).  Based on this report, an estimated 52.2% of audits of agencies that expended between $500,000 and $50 million in federal awards were unacceptable.  The lack of supporting documentation was rated as the most prevalent of the deficiencies, including not documenting the understanding of internal controls over compliance requirements, not documenting testing internal controls, and not documenting compliance testing. 

 

It is imperative that board members of community service organizations focus on an auditing firm’s peer review, continuing professional education, experience, and the carrying of adequate professional liability insurance coverage in their selection of an auditing firm. 



<< Back to Insights & Ideas