OIG Audits

The Single Audit Act and OMB Circular A-133

The Single Audit Act of 1984 established requirements for audits of States, local governments, and Indian tribal governments that administer Federal financial assistance programs. In 1996, the Single Audit Act was amended to extend its statutory reach to non-profit organizations. Pursuant to the Single Audit Act, OMB has issued rules and guidelines advising grantees, auditors, and grantor agencies of their responsibilities in connection with annual financial and compliance audits. Those rules and guidelines are found in OMB Circular A-133, which applies to Institutions of Higher Education; Non-Profit Organizations; and States, Local Governments, and Indian Tribal Governments, which will be applicable for grants received before December 26, 2014, and the Supercircular, applicable for grants received on December 26, 2014 and beyond.

Types of Audits

Audits by the Offices of Inspectors General (OIG) audits examine an organization’s records and activities to ensure that finances are in order and that programs are being conducted according to the agreement and federal law. If the OIG determines an audit is necessary, it must establish the type of audit to be performed and the audit’s scope. There are financial audits and performance audits.

Financial audits examine whether a grantee’s fiscal records are properly presented.
Performance audits, on the other hand, focus on integrity, compliance, and effectiveness; in other words, they determine whether a program is meeting its set goals.

Each Audit Goes Through a Series of Steps:

Notification Letter – The OIG usually notifies the auditee of the audit in advance, but it is not required to do so.
Survey – During this phase, the auditor familiarizes him or herself with the operations of the auditee.
Developing the Audit Program – This is essentially the agenda for the audit. A plan is drawn up stating what work will be done, and who will do it, attempting to ensure that all bases are covered.
Entrance Conference – This is a forum in which the auditee is made aware of the Audit Program and has the opportunity to ask questions.
Fieldwork – This is when the audit work actually takes place.
Exit Conference – During this phase, a draft copy of the audit report is circulated and the findings are discussed with the auditees. The descriptions of the reporting phases necessary for an audit are found in the OIG Reports section.