If your organization accepted Federal funding in the past year, you may be required to perform an annual audit. There are different kinds of audits.
The main types are:
- Single Audits
- Single Audits are required for organizations that expend at least $750,000 in Federal funds in a fiscal year.
- Yellow Book Audits
- Any type of company (public/private, for-profit, governmental, nonprofit, etc.) in any industry could be subject to the Yellow Book Requirements if the funding agency requests the audit, or if local, state, or federal regulations require the audit based on the level of funding spent (or received) by the entity.
What is a Yellow Book Audit?
A Yellow Book Audit is an audit that provides an opinion of the financial statement of an organization. It also examines the internal controls and processes an organization has set up to ensure they are compliant with the requirements attached to their funding, as well as other generally accepted accounting principles (GAAP). When an audit is performed under the Yellow Book standards, the audit will be conducted under both Generally Accepted Governmental Auditing Standards (GAGAS) and General Accepted Auditing Standards (GAAS)
The name “Yellow Book” refers to the actual yellow book of standards and guidance for auditors and audit organizations that outlines what makes a good audit report, the professional qualification for auditors, and audit quality guidelines. Almost all audits requited by the Federal Government adhere to Yellow Book standards.
Yellow Book Audits may also be called Generally Accepted Government Auditing Standards (GAGAS) audits, as the GAGAS are what makes up the Yellow Book standards.
Who Needs a Yellow Book Audit?
Any type of company (public/private, for-profit, governmental, nonprofit, etc.) in any industry could be subject to the Yellow Book Requirements if the funding agency requests the audit, or if local, state, or federal regulations require the audit based on the level of funding spent (or received) by the entity. It is your responsibility to track which funds your organization spends and where so you know if you are required to perform a Yellow Book Audit.
If you fail to perform a Yellow Book audit and are required to, you may lose grants.
Selecting an Auditor for a Yellow Book Audit?
If you are required to perform a Yellow Book Audit, it’s important to hire an auditor who works in accordance with the GAGAS and completes at least 24 hours of continuing education that directly relates to government auditing, the government environment, or the specific environment in which your organization operates.
Corrigan Krause has a team focused on both Yellow Book and Single Audits. These specially-trained auditors completed the necessary education and continue to add to their years of experience across many different industries. Email info@corrigankrause.com for more information, or to become a client.
It is your responsibility to vet your auditor to ensure you are audited properly so you can maintain your funding.
