The US Treasury (UST) recently granted some audit relief to certain entities, technically effective with the 2021 fiscal year audit for North Carolina local governments (those that have not yet submitted their Single Audits for 2021). This change will presumably stay in effect through the 2027 fiscal year (or until all of your ARPA funds have been expended, whichever comes first) for NC but, of course, UST could make another change during that time.
The document from UST can be found here – start on page 9 with “Requirements for an Alternative Compliance Examination Engagement for Recipients That Would Otherwise be Required to Undergo a Single Audit or Program-Specific Audit as a Result of Receiving SLFRF Awards”.
To summarize the alternative compliance examination requirement, it applies only to entities that have or will receive no more than $10 million in total of ARPA funds directly awarded by the Treasurer as either a direct beneficiary or as an NEU (Federal funds received from State agencies, other than NCPRO as the distributer of funds directly provided by the UST, are not included here.) If your direct UST grant and only your UST grant expenditures push you into the federal single audit category – i.e. you have federal single audit expenditures that meet or exceed $750,000 only because you spent your direct ARPA funds – you may opt to have a Compliance Examination Engagement.
The specifics on what that engagement entails can be found in the Alternative Compliance Examination Engagement section on page 10. To summarize:
- no Schedule of Federal and State Awards is required
- the practitioner is required to obtain an understanding of relevant portions of internal control over compliance sufficient to plan the engagement and to assess control risk for compliance with specified requirements
- testing of compliance requirements is required
- practitioner will issue a single compliance opinion similar to the one required under 2 CFR Part 200, Subpart F
Units may still choose to have a full-blown single audit in lieu of this alternate approach.
Look for more information on this option as it becomes available. If you have any questions, please contact us at email@example.com.