How to Respond to Single Audit Findings

All that time preparing for the audit and it’s finally over. What a relief! But there were some internal control or compliance deficiencies that were identified during the Single Audit and now management needs to prepare a corrective action plan (CAP) to address the findings as required under the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards.

The CAP must include the reference number assigned to each finding by the auditor as reported in the current year audit, as well as the names of the person(s) responsible for the corrective action, the corrective action planned and the anticipated completion date. If management does not agree with the finding or believes that corrective action is not needed, then an explanation and the specific reasons must be provided in the CAP. However, the response should be consistent with the response provided to findings in the Single Audit report. The CAP should be submitted to each Federal Awarding Agency to which the audit finding pertained because the Federal Awarding Agency is responsible for follow up and monitoring of the corrective action proposed by the auditee.

An auditee subject to a Single Audit must prepare a CAP even though they have responded to an audit finding and their response is included in the audit report.

Some easy steps to organize a corrective action plan are outlined below:

  1. Since the findings may be internal control, or compliance related, or applicable to a major program, and may also contain questioned costs, key management should meet with program personnel, if necessary, to discuss how the programs are affected by the findings.
  2. Management should identify which individual(s) will be responsible for a) determining what the corrective action will be; b) implementing the corrective action; and c) monitoring the corrective action on each finding, and discuss the details of the finding with each individual involved in this process.
  3. Management’s CAP should consider the auditor’s recommendation as well as the content of the finding, and management should include their response to the finding as it was included in the audit report.
  4. Management should request additional information from the auditor, if clarity is needed, as the recommendation contained in the report may be in abbreviated form.
  5. Management and the individuals responsible for resolution of the finding should determine the exact steps needed to prevent reoccurrence and an expected date of completion of the implementation of the CAP.
  6. Coordinated efforts among departments to implement planned corrective action may be necessary.
  7. Complete the CAP and submit to the respective Federal Awarding Agency along with your Single Audit, or upon request from your funding source. The CAP can be in any format as long as it contains all the required information.
  8. Monitor the progress on the corrective action since that information will be needed in the subsequent year to respond to the auditor as well as the Federal Awarding Agency once they have issued their management decision in response to your planned corrective action.

Remember, your auditor is always available to discuss any recommendations and suggestions related to your implementation of a CAP.

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