Question

Under the Single Audit Act of 1984, governments and non-for-profit organizations that expend $50 million in federal awards are assigned agencies, while those organizations receiving less are expected to use agencies. What is the purpose of the Single Audit Act of 1984?

1) To ensure that governments and non-for-profit organizations are using federal awards appropriately
2) To assign agencies to governments and non-for-profit organizations that expend $50 million in federal awards
3) To provide guidance to organizations receiving less than $50 million in federal awards
4) To regulate the use of agencies by governments and non-for-profit organizations

Answer 1

The Single Audit Act of 1984 aims to ensure that governments and non-profit organizations use federal awards as intended, with proper oversight and auditing by the U.S. Government Accountability Office (GAO) to maintain transparency and accountability.

Step-by-step explanation:

The Single Audit Act of 1984 was enacted to ensure that governments and non-profit organizations are using federal awards appropriately by monitoring and auditing their financial statements and federal awards. This responsibility often falls to the U.S. Government Accountability Office (GAO), which serves as a congressional watchdog. The GAO investigates how the federal government spends taxpayer dollars and helps maintain transparency and accountability in government agencies and non-profit entities that receive federal funds.

The Act aids in regulating the financial management of organizations that receive substantial federal funds. For organizations expending over a certain threshold, the Single Audit Act mandates a single, comprehensive audit that focuses on an entity's financial statements and federal awards. This audit provides assurance to the government and the public that the funds are being used as intended and in compliance with laws and regulations. This level of oversight is critical considering that government agencies receive tax dollars and are not subjected to market pressures, necessitating an alternate form of accountability.

Organizations that do not meet the financial threshold outlined in the Act are expected to follow guidance to ensure similar compliance with federal award usage, though they may not be subjected to as rigorous an auditing process. This guidance helps to regulate the use of federal awards by these smaller entities, ensuring they too meet the objectives set by the federal government and adhere to its policies.