The Single Audit Concept

The concept of a single audit as it is currently administered by the Office of Management and Budget (OMB) is still in the early development stages and poses a number of problems that need to be resolved. However, if these problems are solved, and the concept is accepted and implemented by the entire audit community, it will help close the gap in audit coverage, because it will emphasize a review of the internal controls of the entity being audited rather than a detailed audit of each grant. The single audit approach will provide an improved audit base for performing additional selective audits to satisfy specific user needs. GAO plans to undertake a study to develop a meaningful database to obtain information regarding the total number of single audits performed in comparison with prior audit coverage, their cost, who is doing the audits, the nature of the entity, and the problems being encountered. Both OMB and GAO have cooperated to provide early leadership in the development and implementation phases of the single audit, and GAO is continuing other efforts which support the single audit concept and monitor its progress. The development and implementation of a single audit policy is complex because it requires the cooperation and participation of many organizations. It is essential to avoid unrealistic expectations as to what the single audit will accomplish. The audit community is still in the early phases of single audit concept implementation, and the overall framework and guidance is currently being tested. Relatively few single audits have been performed to date, and those that have been done have not been analyzed sufficiently to establish a clear indication of cost savings or other benefits to be realized. GAO is convinced that it will be more cost effective than the grant-by-grant auditing approach. However, GAO believes that single audit legislation would be premature at this time because a number of substantial policy mechanisms need additional testing.