Companion Guide to Video September 2015

www.fhwa.dot.gov/federal-aidessentials

If your agency expends more than $750,000 in 

Federal funds in any given fiscal year, you will 

need to conduct an annual single audit. If your 

agency has never taken part in a single audit, you 

will want to become familiar with the process and 

its requirements. 

A single audit is an audit that’s arranged by a 

recipient of Federal funds. The audit itself is 

undertaken by an independent auditor and results 

in a audit report. A single audit provides 

reasonable assurance that grant funds are being 

spent properly and the recipient is in compliance 

with Federal requirements.

Let's look at the scope of a single 

audit and your agency's 

responsibilities for assembling an 

audit package.

When your agency contracts for the services of an 

experienced and qualified auditor, typically a 

certified public accountant, a single audit is 

initiated. Your auditor will use risk-assessment 

principles to select the programs for audit and then 

follow the guidelines established in the Single Audit 

Compliance Supplement. This Federal government 

publication tells your auditor what to look at when 

auditing Federal Highway Administration programs.

Your auditor uses these guidelines to confirm that 

your agency’s financial reports are fairly presented 

and that any prior audit findings have been 

resolved. 

Your auditor will also review the adequacy of your 

agency’s internal controls that safeguard assets 

and ensure compliance with Federal laws and 

regulations. For example, your auditor could look 

for risks due to a lack of segregation of duties and 

verify that an employee initiating a purchase 

requisition does not also have the authority to 

approve it.

Finance

Administrative Requirements

Single Audit

The process and requirements of a single audit, which gives 

assurances that Federal grant funds are properly spent
Federal-aid Essentials for Local Public Agencies

When participating in a Federal-aid highway 

project for the first time, your agency may face 

new and unfamiliar requirements. For example, 

Federal-aid recipients may be required to use 

prevailing-wage rates when contracting for 

construction services, as required by the DavisBacon Act. Or recipients may need to demonstrate 

they have treated owners fairly and consistently

when making real property acquisitions, as 

required by the Uniform Act. A qualified auditor is 

able to verify your agency’s compliance with these 

and other Federal laws and regulations. 

The single audit concludes with the Auditor’s 

Report, which addresses the reliability of the 

financial data, adequacy of internal controls, and 

compliance with Federal regulations. 

Within 30 days after receiving the audit report or 9 

months after the end of your fiscal year, whichever 

comes first, your agency must provide a single 

audit package to the Federal Audit Clearinghouse. 

Typically, a copy is also sent to the State 

department of transportation, or State DOT.

In addition to the Auditor’s Report, the audit 

package includes:

• Financial statements

• Schedule of Federal Expenditures

• Results of prior audits

• Corrective actions your agency plans to 

take as a result of the Auditor’s Report

The State DOT will complete its review of your 

package within six months. If it concurs with the 

auditor’s findings, the DOT will outline its 

expectations, including repayment of any 

disallowed costs, adjustment of financial 

statements, or other necessary corrective actions. 

The single audit benefits all stakeholders of your 

Federal-aid transportation project. For instance:

• If your State DOT gave Federal funds to 

your agency, it will have confidence that 

the project will be audited at some point. 

• The Federal agency that awarded the 

project receives assurance that its funds 

were spent as intended and in accordance 

with laws and regulations. 

• And your agency receives the benefit of 

knowing its internal controls are successful 

in preventing waste, fraud and abuse. 

For more information on the single 

audit and other audits that your 

agency may be subject to, consult 2 

CFR 200 and contact your State 

DOT.
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number

DTFH61-11-D-00024 by 

the Federal Highway 

Administration, U.S. 

Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies 

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This companion resource 

is the script content for 

the video production of 

the same name. 

Web Resources

• Link to the Audit regulations 2CFR200 Subpart F- (Section 500)

http://www.ecfr.gov/cgi-bin/textidx?SID=db585c390ca99952e57f621139c9461c&mc=true&node=sp2.

1.200.f&rgn=div6

• Federal Audit Clearinghouse Web site provides audit information to 

Federal agencies and the public

http://harvester.census.gov/sac/

• Description of free FHWA Web-based training course on single audits 

required by 2CFR200 Subpart F- Audits (NHI course #154049)

http://www.nhi.fhwa.dot.gov/training/course_search.aspx?tab=1&k

ey=151049&course_no=151049&typ=3&res=1

• Regulations applicable to 2CFR200 Subpart E- Cost Principles 

(Section 400)

http://www.ecfr.gov/cgibin/retrieveECFR?gp=&SID=a007ce2441103f7500cd18e14119dc33&

mc=true&n=pt2.1.200&r=PART&ty=HTML#sp2.1.200.e

• Regulations pertaining to uniform administrative requirements for 

grants and cooperative agreements to State and local governments 

2CFR200 Subparts A-D (Sections 100 - 400)

http://www.ecfr.gov/cgi-bin/textidx?SID=92f6d84323140c5a78ce38233c232210&mc=true&node=pt2.

1.200&rgn=div5

• OMB compliance supplement identifies important guidance for 

audits required by the Single Audit Act and included outlined in 

2CFR200 Subpart F and OMB Circular 133

https://www.whitehouse.gov/omb/circulars_default