Single Audit Requirement and CARES Act Funding

Kentucky cities and counties received over $300 million from the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. To receive funds authorized under the CARES Act, applicants were required to adhere to the Uniform Guidance requirements of the federal Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).[1] This act requires non-federal entities that expend $750,000 or more in total federal funds during a fiscal year to have an audit performed in accordance with the Uniform Guidance (Single Audit). The single audit covers all federal award expenditures and is required for each fiscal year in which a recipient meets the aforementioned expenditure threshold. Factors that trigger the single audit requirement are:

• Expenditure of federal funds from all federal awards; 
• Combine to total $750,000 or more; and 
• Expenditures occur in a city’s fiscal year, as opposed to the federal fiscal year.[2]

Expenditure of CARES Act funds alone will not trigger the single audit requirement for most Kentucky cities. However, the expenditure of CARES Act funds combined with federal funds from other programs[3] might. The infusion of federal relief and stimulus monies increases the likelihood that cities with populations as low as 5,000 could meet the expenditure threshold that triggers the single audit requirement as early as the fiscal year ending 2021. It is imperative for cities that receive federal funds through multiple program awards to carefully track the total amount of expenditures in a fiscal year to determine if your city meets the $750,000 threshold.

Single audits are submitted to the federal Office of Management and Budget through the Federal Audit Clearinghouse. Normally, single audits are due nine months after the close of a recipient’s fiscal year. However, the Office of Management and Budget extended this deadline for the fiscal year ending 2020.[4] Entities that have normal due dates from March 30, 2021, through June 30, 2021, may delay the completion and submission of the Single Audit Reporting Package, as required under Subpart F of 2 CFR § 200.501 - Audit Requirements, up to six (6) months beyond the normal due date. Those with normal due dates from July 31, 2021, through September 30, 2021, will have an extension up to three (3) months beyond the normal due date.

Federal requirements for single audits contain many of the same elements as state audits, but it is important for cities to retain an auditor with experience conducting audits under the Uniform Guidance to ensure full compliance.

[1] 31 U.S.C. 7501-7507, 2 C.F.R. part 200, subpart F

[2] 2 C.F.R.200.501 (a-b)

[3] E.g., FEMA, American Recovery Act, HUD, Transportation, etc.< style="font-size:11px;">

[4] 2 C.F.R. Part 200, Appendix XI, Compliance Supplement; and 2 C.F.R. Part 200, Appendix XI,

Compliance Supplement Addendum