The U.S. Department of the Treasury recently provided guidance for the Single Audit or Program-Specific Audit for local governments that received American Rescue Plan Funds and spend $750,000 in federal funds (including ARP funds) in a single year. Treasury has authorized the use of an alternative compliance examination engagement for ARP recipients that would otherwise not be required to undergo the Single Audit except for the ARP expenses.
ARP recipients that spend $750,000 or more of federal funds in a fiscal year and meet both criteria listed below have the option to follow the alternative compliance examination engagement:
- The recipient’s total ARP award was received through Pennsylvania as a non-entitlement unit of local government and is at or below $10 million; and
- Other federal award funds the recipient spent (not including its ARP award funds) are less than $750,000 for the calendar year.
Auditors using this alternative approach are to follow the standard within the AICPA’s Professional Standards and AT-C section 315 Compliance Attestation. This engagement, which results in an opinion on compliance with eligible use spending options, is intended to reduce the burden of a full single audit.