The purposes of the Single Audit Act are to promote sound financial management, including effective internal controls, with respect to federal awards administered by nonfederal entities; promote the efficient and effective use of audit resources; and ensure that federal departments and agencies, to the maximum extent practicable, rely upon and use single audit work. For the audit period of this report, the Single Audit Act, as implemented by OMB Circular No. A-133, requires nonfederal entities that expend $500,000 or more in federal awards in a fiscal year to have either a single audit or program-specific audit conducted. Federal awards include grants, loans, loan guarantees, property, cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, other assistance, and federal cost-reimbursement contracts. A single audit is an audit of both the entity’s financial statements and expenditures of federal awards. The Single Audit Act mandates that federal agencies assume oversight responsibility for the funds that they award to nonfederal entities. OMB Circular No. A-133 requires that federal awarding agencies ensure that award recipients complete and submit single audit reports within the earlier of 30 days after the receipt of the auditor’s report or 9 months of the award recipient’s fiscal year-end, unless a longer period for audit is agreed to in advance by the cognizant or oversight agency for audit. Moreover, OMB Circular No. A-133 directs federal agencies to take appropriate action using sanctions in cases where an award recipient is unable or unwilling to have an audit conducted in accordance with the circular’s requirements. The sanctions may include withholding a percentage of federal awards until the audit is completed satisfactorily, withholding or disallowing overhead costs, suspending federal awards until the audit is conducted, or terminating the federal award. OMB Circular No. A-133 also requires each award recipient to submit an audit reporting package to the FAC for distribution to each federal agency responsible for programs for which the audit report identifies a single audit finding and for archival purposes. The reporting package is to include (1) the award recipient’s financial statements and schedule of expenditures of federal awards; (2) a summary schedule of prior audit findings, including the status of all single audit findings included in the prior audit’s schedule of findings and questioned costs for federal awards; (3) the auditor’s report (including an opinion on the award recipient’s financial statements and schedule of expenditures of federal awards, reports on internal control and compliance with laws, regulations, and provisions of contracts or grant agreements, and a schedule of findings and questioned costs); and (4) a corrective action plan. In addition, OMB Circular No. A-133 requires federal awarding agencies to review award recipients’ plans to correct single audit report findings and issue a written management decision on those plans within 6 months of receipt of the single audit report for each single audit finding. A management decision entails the federal awarding agency or pass- through entity evaluating the single audit report findings and the award recipient’s corrective action plan and issuing a written decision on whether the federal awarding agency is satisfied with the corrective action plan and, if not, what corrective action is necessary. Federal award recipients are required to submit their single audit reporting packages to the FAC within the shorter of 30 days after receipt of the single audit report from the auditor or nine months after the end of the award recipient’s fiscal year. Federal awarding agencies are to ensure that each award recipient submits its single audit reporting package to the FAC in accordance with these requirements. Under the time frames provided by the Single Audit Act and OMB Circular No. A- 133, it may take up to 15 months for the award recipient to initiate corrective action for single audit findings. For example, if the auditor’s single audit report identifies a single audit finding for an entity that has a June 30, 2013 fiscal year-end, the award recipient must submit the single audit report along with its corrective action plan to the FAC, at the latest, within 9 months of the fiscal year-end or no later than March 31, 2014. The federal awarding agency would then have 6 months or until September 30, 2014, from receipt of the single audit report to communicate a written management decision to the award recipient, and the award recipient is to initiate corrective action. Issuance of a timely management decision is critical because OMB Circular No. A-133 allows award recipients to consider a single audit finding as no longer valid and to take no further action if all the following have occurred: a management decision was not issued, 2 years have passed since the audit report that contained the single audit finding was submitted to the FAC, and the federal agency or pass-through entity is not currently following up with the award recipient on the single audit finding. In some cases, action to correct the single audit finding is not started until the award recipient receives the management decision. As a result, it may take up to 15 months after the end of the fiscal year in which the single audit finding was initially identified before corrective action has begun. Award recipients report their progress in a schedule of prior single audit findings where the status of the single audit finding is reported as either corrected (closed), partially corrected, or not corrected (open). The auditor then reviews this schedule and includes it in the next single audit report. When the awarding agency delays issuing a management decision to the award recipient, initiation of corrective action may also be delayed. As a result, the single audit finding may remain open. Figure 1 provides an illustrative timeline for single audit reports with single audit findings. In December 2013, OMB issued the Uniform Guidance to supersede and streamline existing requirements for federal awards. The Uniform Guidance required federal agencies to update their regulations and policies for federal awards. Portions of the Uniform Guidance are aimed at strengthening federal agency oversight of single audits. The Uniform Guidance required that federal agencies implement the policies and procedures applicable to federal awards by issuing a regulation to be effective by December 26, 2014, unless different provisions are required by statute or approved by OMB. On December 19, 2014, OMB and all federal award-making agencies issued a joint interim final rule to implement the Uniform Guidance, fulfilling the requirement contained in the Uniform Guidance. We previously reported that all federal grant- awarding agencies issued regulations implementing this guidance. Both selected subagencies in Agriculture and HHS and a selected subagency in Transportation (the Federal Transit Administration) did not effectively design policies and procedures to reasonably assure that award recipients submitted their single audit reports within the time frames required by OMB Circular No. A-133. In addition, both selected subagencies in Education and HUD and the other selected subagency in Transportation (the Federal Highway Administration) effectively designed policies and procedures to reflect that requirement. OMB Circular No. A- 133 requires that federal awarding agencies ensure that award recipients submit single audit reports within the shorter of 30 days after receipt of the report from the auditor or 9 months of the award recipient’s fiscal year-end unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Standards for Internal Control in the Federal Government provides the overall framework for establishing and maintaining internal control and states that control activities should be effective and efficient in accomplishing the agency’s control objectives. The standards further state that management should clearly document internal control in a manner that allows the documentation to be readily available for examination. The five components of internal control are as follows: Control Environment: Management and employees should establish and maintain an environment throughout the organization that sets a positive and supportive attitude toward internal control and conscientious management. Risk Assessment: Internal control should provide for an assessment of the risks the agency faces from both external and internal sources. Control Activities: Internal control activities help ensure that management’s directives are carried out. The control activities should be effective and efficient in accomplishing the agency’s control objectives. Information and Communications: Information should be recorded and communicated to management and others within the entity who need it and in a form and within a time frame that enables them to carry out their internal control and other responsibilities. Monitoring: Internal control monitoring should assess the quality of performance over time and ensure that the findings of audits and other reviews are promptly resolved. To implement the internal control standards, each agency and subagency is to develop detailed policies and procedures (control activities) to execute its responsibilities under OMB Circular No. A-133. Without effectively designed policies and procedures for determining whether single audit reports have been submitted timely by award recipients, agencies are hampered in their ability to take timely and effective action to reasonably assure that award recipients correct all single audit findings. Effective federal agency oversight would help to reasonably assure effective program operations and minimize improper payments. We identified four key steps relating to the design of single audit policies and procedures that would assist federal awarding agencies in fulfilling their responsibilities under OMB Circular No. A-133 for reasonably assuring that award recipients submit single audit reports timely. To that end, designing policies, procedures, and mechanisms that include the following steps would help provide reasonable assurance that agencies can fulfill these responsibilities: identify award recipients that should have submitted single audit reports, verify that the award recipients submitted single audit reports, determine whether the single audit reports were submitted within the required time frames, and take action to obtain the single audit reports when award recipients did not submit the reports within the required time frames. Figure 2 provides an overview of our assessment of the selected subagencies’ design of policies and procedures relating to the award recipients’ timeliness of single audit report submission for fiscal year 2013. Agriculture’s two selected subagencies, Food and Nutrition Service (FNS) and Rural Development (RD), did not effectively design policies and procedures to reasonably assure that award recipients submitted their single audit reports timely.