Single Audit Act of 1984
PL 98-502 (S.1510), enacted 10/19/1984

PUBLIC LAW 98-502—OCT. 19, 1984 
98 STAT. 2327 
Public Law 98-502 
98th Congress 
An Act 
To establish uniform audit requirements for State and local governments receiving 
Oct. 19, 1984 
Federal financial assistance. 
[S. 1510] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
Single Audit Act 
of 1984. 
SHORT TITLE; P U R P O S E 
SECTION 1. (a) This Act may be cited as the "Single Audit Act of 
31 use 7501 
1984". 
note. 
(b) It is the purpose of this Act— 
(1) to improve the financial management of State and local 
governments with respect to Federal 
financial 
assistance 
programs; 
(2) to establish uniform requirements for audits of Federal 
financial assistance provided to State and local governments; 
(3) to promote the efficient and effective use of audit 
• 
resources; and 
(4) to ensure that Federal departments and agencies, to the 
' 
maximum extent practicable, rely upon and use audit work 
done pursuant to chapter 75 of title 31, United States Code (as 
^' 
added by this Act). 
A M E N D M E N T TO TITLE 31, UNITED STATES CODE 
SEC. 2. (a) Subtitle V of title 31, United States Code, is amended by 
adding at the end thereof the following new chapter: 
"CHAPTER 75—REQUIREMENTS FOR SINGLE 
AUDITS 
"Sec. 
"7501. Definitions. 
"7502. Audit requirements; exemptions. 
"7503. Relation to other audit requirements. 
"7504. Cognizant agency responsibilities. 
"7505. Regulations. 
"7506. Monitoring responsibilities of the Comptroller General. 
"7507. Effective date; report. 
"§ 7501. Definitions 
3i use 7501. 
"As used in this chapter, the term— 
"(1) 'cognizant agency' means a Federal agency which is 
assigned by the Director with the responsibility for implement-
ing the requirements of this chapter with respect to a particular 
State or local government. 
"(2) 'Comptroller General' means the Comptroller General of 
the United States. 
"(3) 'Director' means the Director of the Office of Manage-
ment and Budget. 
98 STAT. 2328 
PUBLIC LAW 98-502—OCT. 19, 1984 
"(4) 'Federal financial assistance' means assistance provided 
by a Federal agency in the form of grants, contracts, loans, loan 
guarantees, property, cooperative agreements, interest subsi-
dies, insurance, or direct appropriations, but does not include 
direct Federal cash assistance to individuals. 
"(5) 'Federal agency' has the same meaning as the term 
'agency' in section 551(1) of title 5, United States Code. 
"(6) 'generally accepted accounting principles' has the mean-
ing specified in the generally accepted government auditing 
standards. 
"(7) 'generally accepted government auditing standards* 
means the standards for audit of governmental organizations, 
programs, activities, and functions, issued by the Comptroller 
General. 
"(8) 'independent auditor' means— 
"(A) an external State or local government auditor who 
meets the independence standards included in generally 
accepted government auditing standards, or 
"(B) a public accountant who meets such independence 
standards. 
"(9) 'internal controls' means the plan of organization and 
methods and procedures adopted by management to ensure 
that— 
"(A) resource use is consistent with laws, regulations, and 
policies; 
"(B) resources are safeguarded against waste, loss, and 
misuse; and 
"(C) reliable data are obtained, maintained, and fairly 
disclosed in reports. 
"(10) 'Indian tribe' means any Indian tribe, band, nation, or 
other organized group or community, including any Alaskan 
Native village or regional or village corporation (£is defined in, 
or established under, the Alaskan Native Claims Settlement 
Act) that is recognized by the United States as eligible for the 
special programs and services provided by the United States to 
Indians because of their status as Indians. 
"(11) 'local government' means any unit of local government 
within a State, including a county, borough, municipality, city, 
town, township, parish, local public authority, special district, 
school district, intrastate district, council of governments, and 
any other instrumentality of local government. 
"(12) 'major Federal assistance program' means any program 
for which total expenditures of Federal financial assistance by 
the State or local government during the applicable year 
exceed— 
"(A) $20,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$7,000,000,000; 
"(B) $19,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$6,000,000,000 but are less than or equal to $7,000,000,000; 
"(C) $16,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$5,000,000,000 but are less than or equal to $6,000,000,000; 
"(D) $13,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$4,000,000,000 but are less than or equal to $5,000,000,000; 
PUBLIC LAW 98-502—OCT. 19, 1984 
98 STAT. 2329 
"(E) $10,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$3,000,000,000 but are less than or equal to $4,000,000,000; 
"(F) $7,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$2,000,000,000 but are less than or equal to $3,000,000,000; 
"(G) $4,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$1,000,000,000 but are less than or equal to $2,000,000,000; 
"(H) $3,000,000 in the case of a State or local government 
for which such total expenditures for all programs exceed 
$100,000,000 but are less than or equal to $1,000,000,000; 
and 
"(I) the larger of (i) $300,000, or (ii) 3 percent of such total 
expenditures for all programs, in the case of a State or local 
government for which such total expenditures for all pro-
grams exceed $100,000 but are less than or equal to 
$100,000,000. 
"(13) 'public accountants' means those individuals who meet 
the qualification standards included in generally accepted gov-
ernment auditing standards for personnel performing govern-
ment audits. 
"(14) 'State' means any State of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, the Virgin 
Islands, Guam, American Samoa, the Commonwealth of the 
Northern Mariana Islands, and the Trust Territory of the 
Pacific Islands, any instrumentality thereof, any multi-State, 
regional, or interstate entity which has governmental functions, 
and any Indian tribe. 
"(15) 'subrecipient' means any person or government depart-
ment, agency, or establishment that receives Federal financial 
assistance through a State or local government, but does not 
include an individual that receives such assistance. 
"§ 7502. Audit requirements; exemptions 
3i use 7502. 
"(a)(lXA) Each State and local government which receives a total 
amount of Federal financial assistance equal to or in excess of 
$100,000 in any fiscal year of such government shall have an audit 
made for such fiscal year in accordance with the requirements of 
this chapter and the requirements of the regulations prescribed 
pursuant to section 7505 of this title. 
"(B) Each State and local government that receives a total amount 
of Federal financial assistance which is equal to or in excess of 
$25,000 but less than $100,000 in any fiscal year of such government 
shall— 
"(i) have an audit made for such fiscal year in accordance 
with the requirements of this chapter and the requirements of 
the regulations prescribed pursuant to section 7505 of this title; 
or 
"(ii) comply with any applicable requirements concerning 
financial or financial and compliance audits contained in Fed-
eral statutes and regulations governing programs under which 
such 
Federal 
financial 
assistance 
is provided 
to 
that 
government. 
"(C) Each State and local government that receives a total amount 
of Federal financial assistance which is less than $25,000 in any 
98 STAT. 2330 
PUBLIC LAW 98-502—OCT. 19, 1984 
fiscal year of such government shall be exempt for such fiscal year 
from compliance with— 
"(i) the audit requirements of this chapter; and 
"(ii) any applicable requirements concerning financial or 
financial and compliance audits contained in Federal statutes 
and regulations governing programs under which such Federal 
financial assistance is provided to that government. 
The provisions of clause (ii) of this subparagraph do not exempt a 
State or local government from compliance with any provision of a 
Federal statute or regulation that requires such government to 
maintain records concerning Federal financial assistance provided 
to such government or that permits a Federal agency or the Comp-
troller General access to such records. 
"(2) For purposes of this section, a State or local government shall 
be considered to receive Federal financial assistance whether such 
assistance is received directly from a Federal agency or indirectly 
through another State or local government. 
"(bXD Except as provided in paragraphs (2) and (3), audits con-
ducted pursuant to this chapter shall be conducted annually. 
"(2) If a State or local government is required— 
"(A) by constitution or statute, as in effect on the date of 
enactment of this chapter, or 
"(B) by administrative rules, regulations, guidelines, stand-
ards, or policies, as in effect on such date, 
to conduct its audits less frequently than annually, the cognizant 
agency for such government shall, upon request of such government, 
permit the government to conduct its audits pursuant to this chap-
ter biennially, except as provided in paragraph (3). Such audits shall 
cover both years within the biennial period. 
"(3) Any State or local government that is permitted, under clause 
(B) of paragraph (2), to conduct its audits pursuant to this chapter 
biennially by reason of the requirements of a rule, regulation, 
guideline, standard, or policy, shall, for any of its fiscal years 
beginning after December 31, 1986, conduct such audits annually 
unless such State or local government codifies a requirement for 
biennial audits in its constitution or statutes by January 1, 1987. 
Audits conducted biennially under the provisions of this paragraph 
shall cover both years within the biennial period. 
"(c) Each audit conducted pursuant to subsection (a) shall be 
conducted by an independent auditor in accordance with generally 
accepted government auditing standards, except that, for the pur-
poses of this chapter, such standards shall not be construed to 
require economy and efficiency audits, program results audits, or 
program evaluations. 
"(d)(1) Each audit conducted pursuant to subsection (a) for any 
fiscal year shall cover the entire State or local government's oper-
ations except that, at the option of such government— 
"(A) such audit may, except as provided in paragraph (5), 
cover only each department, agency, or establishment which 
received, expended, or otherwise administered Federal financial 
assistance during such fiscal year; and 
"(B) such audit may exclude public hospitals and public col-
leges and universities. 
"(2) Each such audit shall encompass the entirety of the financial 
operations of such government or of such department, agency, or 
establishment, whichever is applicable, and shall determine and 
report whether— 
"»-- v.-«:*~<..^^,. ..,...,... , . . „ . . . 
PUBLIC LAW 98-502—OCT. 19, 1984 
98 STAT. 2331 
"(A)(i) the financial statements of the government, depart-
ment, agency, or establishment present fairly its financial posi-
tion and the results of its financial operations in accordance 
with generally accepted accounting principles; and 
"(ii) the government, department, agency, or establishment 
has complied with laws and regulations that may have a 
material effect upon the financial statements; 
"(B) the government, department, agency, or establishment 
has internal control systems to provide reasonable assurance 
that it is managing Federal financial assistance programs in 
compliance with applicable laws and regulations; and 
"(C) the government, department, agency, or establishment 
has complied with laws and regulations that may have a 
material effect upon each major Federal assistance program. 
In complying with the requirements of subparagraph (C), the inde-
pendent auditor shall select and test a representative number of 
transactions from each major Federal assistance program. 
"(3) Transactions selected from Federal assistance programs, 
other than major Federal assistance programs, pursuant to the 
requirements of paragraphs (2)(A) and (2)(B) shall be tested for 
compliance with Federal laws and regulations that apply to such 
transactions. Any noncompliance found in such transactions by the 
independent auditor in making determinations required by this 
paragraph shall be reported. 
"(4) The number of transactions selected and tested under para- 
' 
' ' --''' 
graphs (2) and (3), the selection and testing of such transactions, and 
the determinations required by such paragraphs shall be based on 
the professional judgment of the independent auditor. 
"(5) Each State or local government which, in any fiscal year of 
such government, receives directly from the Department of the 
Treasury a total of $25,000 or more under chapter 67 of this title 
31 USC 6701 et 
(relating to general revenue sharing) and which is required to ^^Q-
conduct an audit pursuant to this chapter for such fiscal year shall 
not have the option provided by paragraph dXA) for such fiscal 
year. 
"(6) A series of audits of individual departments, agencies, and 
establishments for the same fiscal year may be considered to be an 
audit for the purpose of this chapter. 
"(e)(1) Each State and local government subject to the audit 
requirements of this chapter, which receives Federal 
financial 
assistance and provides $25,000 or more of such assistance in any 
fiscal year to a subrecipient, shall— 
"(A) if the subrecipient conducts an audit in accordance with 
the requirements of this chapter, review such audit and ensure 
that prompt and appropriate corrective action is taken on 
instances of material noncompliance with applicable laws and 
regulations with respect to Federal financial assistance pro-
vided to the subrecipient by the State or local government; or 
"(B) if the subrecipient does not conduct an audit in accord-
ance with the requirements of this chapter— 
"(i) determine whether the expenditures of Federal finan-
cial assistance provided to the subrecipient by the State or 
local government are in accordance with applicable laws 
and regulations; and 
"(ii) ensure that prompt and appropriate corrective action 
is taken on instances of material noncompliance with appli-
cable laws and regulations with respect to Federal financial 
98 STAT. 2332 
PUBLIC LAW 98-502—OCT. 19, 1984 
assistance provided to the subrecipient by the State or local 
government. 
"(2) Each such State and local government shall require each 
subrecipient of Federal assistance through such government to 
permit, as a condition of receiving funds from such assistance, the 
independent auditor of the State or local government to have such 
access to the subrecipient's records and financial statements as 
may be necessary for the State or local government to comply with 
this chapter. 
Report. 
"(f) The report made on any audit conducted pursuant to this 
section shall, within thirty days after completion of such report, be 
transmitted to the appropriate Federal officials and made available 
by the State or local government for public inspection. 
(g) If an audit conducted pursuant to this section finds any 
material noncompliance with applicable laws and regulations by, or 
material weakness in the internal controls of, the State or local 
government with respect to the matters described in subsection 
(d)(2), the State or local government shall submit to appropriate 
Federal officials a plan for corrective action to eliminate such 
material noncompliance or weakness or a statement describing the 
reasons that corrective action is not necessary. Such plan shall be 
consistent with the audit resolution standard promulgated by the 
Comptroller General (as part of the standards for internal controls 
31 use 3512. 
in the Federal Government) pursuant to section 3512(b) of this title. 
31 use 7503. 
"§ 7503. Relation to other audit requirements 
"(a) An audit conducted in accordance with this chapter shall be 
in lieu of any financial or financial and compliance audit of an 
individual Federal assistance program which a State or local govern-
ment is required to conduct under any other Federal law or regula-
tion. To the extend that such audit provides a Federal agency with 
the information it requires to carry out its responsibilities under 
Federal law or regulation, a Federal agency shall rely upon and use 
that information and plan and conduct its own audits accordingly in 
order to avoid a duplication of effort. 
"(b) Notwithstanding subsection (a), a Federal agency shall con-
duct any additional audits which are necessary to carry out its 
responsibilities under Federal law or regulation. The provisions of 
this chapter do not authorize any State or local government (or 
subrecipient thereof) to constrain, in any manner, such agency from 
carrying out such additional audits. 
"(c) The provisions of this chapter do not limit the authority of 
Federal agencies to conduct, or enter into contracts for the conduct 
of, audits and evaluations of Federal financial assistance programs, 
nor limit the authority of any Federal agency Inspector General or 
other Federal audit official. 
"(d) Subsection (a) shall apply to a State or local government 
which conducts an audit in accordance with this chapter even 
though it is not required by section 7502(a) to conduct such audit. 
"(e) A Federal agency that performs or contracts for audits in 
addition to the audits conducted by recipients pursuant to this 
chapter shall, consistent with other applicable law, arrange for 
funding the cost of such additional audits. Such additional audits 
include economy and efficiency audits, program results audits, and 
program evaluations. 
PUBLIC LAW 98-502—OCT. 19, 1984 
98 STAT. 2333 
"§ 7504. Cognizant agency responsibilities 
31 use 7504. 
"(a) The Director shall designate cognizant agencies for audits 
conducted pursuant to this chapter. 
"(b) A cognizant agency shall— 
"(1) ensure that audits are made in a timely manner and in 
accordance with the requirements of this chapter; 
"(2) ensure that the audit reports and corrective action plans 
made pursuant to section 7502 of this title are transmitted to 
the appropriate Federal officials; and 
"(3XA) coordinate, to the extent practicable, audits done by or 
under contract with Federal agencies that are in addition to the 
audits conducted pursuant to this chapter; and (B) ensure that 
such additional audits build upon the audits conducted pursu-
ant to this chapter. 
"§ 7505. Regulations 
3i use 7505. 
"(a) The Director, after consultation with the Comptroller General 
and appropriate Federal, State, and local government officials, shall 
prescribe policies, procedures, and guidelines to implement this 
chapter. Each Federal agency shall promulgate such amendments to 
its regulations as may be necessary to conform such regulations to 
the requirements of this chapter and of such policies, procedures, 
and guidelines. 
"Ot)Xl) The policies, procedures, and guidelines prescribed pursu-
ant to subsection (a) shall include criteria for determining the 
appropriate charges to progreuns of Federal financial assistance for 
the cost of audits. Such criteria shall prohibit a State or local 
government which is required to conduct an audit pursuant to this 
chapter from charging to any such program (A) the cost of any 
financial or financial and compliance audit which is not conducted 
in accordance with this chapter, and (B) more than a reasonably 
proportionate share of the cost of any such audit that is conducted 
in accordance with this chapter. 
"(2) The criteria prescribed pursuant to paragraph (1) shall not, in 
the absence of documentation demonstrating a higher actual cost, 
permit (A) the ratio of (i) the total charges by a government to 
Federal financial assistance programs for the cost of audits per-
formed pursuant to this chapter, to (ii) the total cost of such audits, 
to exceed (B) the ratio of (i) total Federal financial assistance 
expended by such government during the applicable fiscal year or 
years, to (ii) such government's total expenditures during such fiscal 
year or years. 
"(c) Such policies, procedures, and guidelines shall include such 
provisions as may be necessary to ensure that small business con-
cerns and business concerns owned and controlled by socially and 
economically disadvantaged individuals will have the opportunity to 
participate in the performance of contracts awarded to fulfill the 
audit requirements of this chapter. 
"§ 7506. Monitoring responsibilities of the Comptroller General 
3i use 7506. 
"The Comptroller General shall review provisions requiring finan-
cial or financial and compliance audits of recipients of Federal 
assistance that are contained in bills and resolutions reported by the 
committees of the Senate and the House of Representatives. If the 
Comptroller General determines that a bill or resolution contains 
provisions that are inconsistent with the requirements of this chap-
98 STAT. 2334 
PUBLIC LAW 98-502—OCT. 19, 1984 
31 u s e 7507. 
Tennessee 
Valley 
Authority. 
31 u s e 7501 
note. 
ter, the Comptroller General shall, at the earliest practicable date, 
notify in writing— 
"(1) the committee that reported such bill or resolution; and 
"(2)(A) the Committee on Governmental Affairs of the Senate 
(in the case of a bill or resolution reported by a committee of the 
Senate); or 
"(B) the Committee on Government Operations of the House 
of Representatives (in the case of a bill or resolution reported by 
a committee of the House of Representatives). 
"§ 7507. Effective date; report 
"(a) This chapter shall apply to any State or local government 
with respect to any of its fiscal years which begin after December 31, 
1984. 
"(b) The Director, on or before May 1, 1987, and annually thereaf-
ter, shall submit to each House of Congress a report on operations 
under this chapter. Each such report shall specifically identify each 
Federal agency or State or local government which is failing to 
comply with this chapter.". 
(b) The provisions of this Act shall not diminish or otherwise 
affect the authority of the Tennessee Valley Authority to conduct its 
own audits of any matter involving funds disbursed by the Tennes-
see Valley Authority. 
(c) The table of chapters for subtitle V of title 31, United States 
Code, is amended by inserting after the item relating to chapter 73 
the following new item: 
"75. Requirements for Single Audits 
7501". 
Approved October 19, 1984. 
LEGISLATIVE HISTORY—S. 1510 (H.R. 4821): 
HOUSE REPORT No. 98-708 accompanying H.R. 4821 (Comm. on Government 
Operations). 
SENATE REPORT No. 98-234 (Oomm. on Governmental Affairs). 
CONGRESSIONAL REGORD: 
Vol. 129 (1983): Nov. 2, considered and passed Senate. 
Vol. 130 (1984): May 15, H.R. 4821 considered and passed House; S. 1510, 
amended, passed in lieu. 
Oct. 3, Senate concurred in House amendments with amend-
ments. 
Oct. 4, House concurred in Senate amendments.