Finding Text
Single Audit Process Criteria – Title 2 U.S. Code of Federal Regulations (CFR) §200.501 requires a non-Federal entity that expends $1,000,000 or more in Federal awards during its fiscal year to obtain a Single Audit or program-specific audit conducted in accordance with Uniform Guidance. Condition – The Utility expended in excess of $1,000,000 in Federal awards during the year ended December 31, 2025. However, the Utility was not aware the expenditures triggered Single Audit requirements and had not arranged for a Uniform Guidance audit to be performed. Cause – The Utility did not have procedures in place to monitor Federal expenditures and evaluate whether Federal audit requirements were applicable. Effect – The Utility’s internal controls over compliance with Federal grant requirements were inadequate, increasing the risk of noncompliance with Uniform Guidance audit requirements. Recommendation – We recommend the Utility establish procedures to track Federal expenditures throughout the year and evaluate whether expenditures trigger Single Audit requirements under Uniform Guidance. This evaluation should be completed and communicated to the auditors prior to the commencement of audit fieldwork. Response and Corrective Action Planned – The Utility will work to establish formal procedures for tracking Federal expenditures and determining whether those expenditures trigger additional audit requirements. Conclusion – Response accepted.