On Jan. 16, 2025, the U.S. Department of the Treasury opened its 2025 funding for the Community Development Financial Institutions (CDFI) Program. As you navigate through the application process, remember if your financial institution is awarded funds, it may require a single audit. 

Understanding a Single Audit

A single audit is an audit of the financial statements and of the expenditures of federal awards. Single audits are conducted in accordance with generally accepted auditing standards, generally accepted government auditing standards (GAGAS) issued by the Comptroller General of the United States, and the requirements of the Uniform Guidance.

Organizations expending federal awards must meet the specific regulations outlined by the Office of Management and Budget (OMB). The audit must be performed by an independent auditor, like those at Doeren Mayhew, and the final reporting package must be submitted within 30 days after your institution receives the audit report, or nine months from your fiscal year-end.

In the past, single audits were required if an entity expended $750,000 or more in federal awards within their fiscal year. However, that threshold has been increased to $1 million, effective for fiscal periods beginning on or after Oct. 1, 2024. 

How to Prepare for Your Next Audit

To ensure a smooth and compliant single audit, there are some actions your institution should consider taking, such as: 

• Gather and summarize all federal grant information.
• Prepare your financial statements in accordance with generally accepted accounting principles (GAAP).
• Prepare a detailed draft of the schedule of expenditures of federal awards (SEFA). A complete and accurate SEFA is key to a quality and thorough audit.
• Ensure policies are up to date, in place and comply with the federal awards.
• Provide the auditor access to information needed to perform the audit, such as personnel files, accounting records, federal grant awards, etc.
• Review prior single audit findings to determine if findings were resolved.
• Prepare the Schedule of Prior Audit Findings.
• Assess and update your internal controls over federal program compliance regularly to evaluate their effectiveness. Internal controls should be established to evaluate and monitor compliance with federal statutes, regulations, and the specific terms and conditions of each award. 

Here to Guide the Way

Find an audit partner with the experience and skills you can trust. Doeren Mayhew’s dedicated Financial Institutions Group has the industry expertise and deep understanding of single audits requirements for CDFIs to help pave the way for a next smooth audit. Contact us today to learn more about how we can help.