The coronavirus has added several challenges for those performing single audits for clients with the primary challenge being how to deliver a quality audit to the client in a timely manner. 

In December 2020 the Office of Management and Budget (OMB) released the newest addendum to the Compliance Supplement and this addendum addressed how to test some of the federal agency programs that were federally funded as part of the pandemic relief packages offered to organizations.  These pandemic-related programs increased the number of organizations requiring a single audit and put pressure on the auditors to be as efficient as possible.  Even with this addendum, there were still many unanswered questions on how to test for compliance with these new programs.

One of the biggest challenges facing auditors is the volume of clients needing single audits because of the federal funding received.  Single audits are required for organizations expending $750,000 or more in federal funds in a year.  This level of expenditure is quite high, however, pandemic-related economic relief pushed many organizations over the expenditure threshold and therefore requiring more organizations to need single audits.  For some clients, the number of programs to be tested will have increased.  For other clients, they may be subject to the single audit requirement for the first time.  There is likely to be a learning curve for those organizations that are not familiar with the compliance audit process.  

Another challenge for auditors is completing all of their clients’ needed single audits in a timely manner.  Because the addendum was released so late in 2020, many auditors had to delay their audit planning.  Because of this delay, the number of clients needing single audits within a shorter amount of time increased.  Those clients with year-end dates before the end of 2020 had to delay part of their audits until the addendum was released.  The quick turnaround necessary for these audits requires auditors to be steadfast in the quality of their audit work, even while facing quick turnarounds.  There is increased pressure on the audit teams to act fast and make decisions quickly, which increases the potential for lower quality single audits.  Also, as mentioned above, 2020 was the first year that some organizations needed a single audit, and this lack of experience with the compliance audit process on the part of the client will definitely slow down the completion of the audit.

A third challenge facing those professionals performing single audits is how to get answers to their many questions about the pandemic relief programs.  Because the OMB raced to put the addendum together, many of the testing procedures are not detailed out in the addendum; instead, the addendum references the website for the federal agency administering the program.  This method requires auditors to spend a lot of their time researching the programs on various federal agency websites as well as making some judgment calls on what information is important.  Again the auditors face the challenge of performing a quality audit while going through detailed information from many sources all while being as efficient as possible.