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Planning an audit in SMART Single Audit

Complete an engagement

When creating and completing a Single Audit engagement you'll need to enter the federal awards, determine if the entity is a low-risk auditee, identify major programs, and review and modify compliance programs.

Add federal awards to an engagement

You can enter Federal Award information at either the Program level or the Individual Grant level. Awards you add will automatically be in the Identify Major Programs section. To view Federal Awards you've added go to View, then Federal Awards Summary.
To add an award:
  1. From the
    Insert
    menu, select
    Add Federal Award
    .
  2. Select a government program from the drop-down list in the Program Details section of the Add or Modify Federal Award window. Based on your selection, some fields will populate automatically.
    • Select
      Create New
       from the drop-down list to add an entry to this listing.
    • Select
      Update CFDA List
       to check for Updated CFDA list to include new programs added to the CFDA website.
    note
    The drop-down list contains more than 2,000 U.S. Government programs that are available on the Internet and are updated periodically. Only about 250 of these programs are specifically addressed in the OMB Compliance Supplement. The rest use a generic program from the Compliance Supplement for government programs that are not specifically addressed in the Compliance Supplement, with instructions on how you should tailor them.
  3. Select a date for the last year this program was audited as a Major Program. Leave blank if never or unknown.
  4. Mark the checkboxes corresponding to the applicable
    Administrative Requirements and Cost Principles
    .
  5. Mark the
    Loan or Loan Guarantee Program
     checkbox, if applicable.
  6. Mark the
    Research and Development Award
     checkbox, if applicable.
  7. Mark the
    The entity is a pass-through entity for this program
    checkbox, if applicable.
    1. Once you make this selection, you can also add the
      Amount passed-through to Subrecipients
      .
  8. Enter the
    Percentage used to calculate Program Materiality
    . The default value is set to five percent; if required you can change and enter the applicable value.
  9. Select
    Next
    .
  10. In the Award Information section, select one of the following:
    • Program
    • Individual grants within this program
  11. Select either
    Direct
     or
    Indirect
     from the drop down menu and complete the monetary fields, including
    Award Amount
    . Select
    Add Row
     to enter awards from multiple pass-through entities.
  12. Select
    Finish
    .
The criteria for mandating a single audit are total awards expended equaling or exceeding $750,000.

Determine if an entity is a low-risk auditee

Determining if in entity is a low-risk auditee makes them eligible for a lower threshold for testing compared to Major Programs. Major programs are federal programs that, in the aggregate, cover 40% of total federal awards expended. Low-risk auditees' only cover 20% of total federal awards expended, possibly identifying fewer major programs.
According to Office of Management and Budget, this determination is necessary for preparing a summary of the auditor's results and for answering this question on the Data Collection Form.
  1. Add a Federal Award to the engagement.
  2. From the Federal Award Summary, select
    Major Program Determination
     from the dropdown, then
    Determine Low-risk auditee
    .
  3. Answer each question on the screen Yes or No.
  4. Continue to answer every question on the screen until one of the following appear:
    1. The entity is a low-risk auditee.
    2. The entity is NOT a low-risk auditee.
  5. After the determination has been made select
    Next
     to identify major programs.

Identify Major Programs

When completing a Single Audit engagement you will need to identify major programs which involves assessing risk then assessing major program coverage.
After entering federal awards and determining if the entity was a low-risk auditee you can identify major programs.
  1. From the View menu, select
    Federal Award Summary
    .
  2. Select
    Major Program Determination
     from the dropdown, then
    Identify Major Programs
    .
  3. Select
    Assess
     to perform a risk assessment for each Type A program.
  4. Answer all of the questions that appear, you can can select comment to explain answers if needed.
    If the program is considered Low-risk you'll see
    Low
     next to
    Assess
    , otherwise it will say
    Not Low
    .
  5. Select
    Assess
     to perform a risk assessment for each Type B program.
  6. Answer all of the questions that appear, you can can select comment to explain answers if needed.
    If the program is considered High-risk you'll see
    High
     next to
    Assess
    , otherwise it will say
    Not High
    .
  7. Select
    Assess Major Program Coverage
    .
  8. If a Federal Agency requests that a program be audited as a major program and you have not designated it as major, you may mark in the Major Program column to designate it as a major program.
  9. You may be required to select additional programs to reach the minimum coverage.
  10. Select
    Next
     to review and modify compliance programs.

Review and Modify Compliance Programs

After you enter Federal Awards, determined a programs risk level, and identified major programs, you'll need to review and modify compliance programs.
  1. From the Federal Award Summary, select
    Major Program Determination
    , then
    Review and Modify Compliance Programs
    .
  2. Under Compliance Requirements, Federal Award programs that are included in the Compliance Supplement will be preselected.
  3. Mark/unmark any of the programs you want to include/remove from the Compliance Requirements.
  4. To reset all of the selections to default, select
    Reset
    .
  5. To edit the suggested audit procedures, select the +/- for each category.
  6. Select
    Next
    .
After reviewing and modifying the compliance programs, you'll advance to the next compliance program to review. When each of the compliance programs have been reviewed, the Single Audit engagement has been completed.