Organizations that receive $750,000 or more in federal or pass-through funding in a single year must obtain a single audit. Single audits are specialized assessments that look beyond financial issues and include evaluation of grant-specific and as well as general federal compliance requirements.
“It’s important to select an auditor who is well-qualified for the job,” said Henry Flood, senior advisor for grant administration for The Grantsmanship Center in Los Angeles, Calif. “You want someone with solid experience who understands both nonprofit finances and federal requirements.”
Auditors are retained through competitive negotiation. You cannot select an auditor on a non-competitive basis. Most audit engagements can be accomplished through your procedures for small purchases, and in that situation, you must select an auditing firm from two or more qualified sources. But for audit engagements that exceed the small purchase threshold of $150,000, the full requirements of competitive negotiation procedures (2 CFR 200.320 (d) (1) to (4)) come into play.
Here’s an overview of the steps you’ll need to take to retain an auditor.
* For audits expected to cost less than $50,000, develop a one- to five-page request for quotes. Develop a more detailed RFQ for audits that may cost $150,000 or more.
* Record receipt of proposals, including late proposals since they will be eliminated from competition.
* Develop a proposal evaluation form and appoint an evaluation panel.
* Contact the state Board of Accountancy and perform a disciplinary check on each prospective firm.
* Evaluate the proposals and schedule oral interviews with the top three firms.
* Negotiate with the top-rated firm, announce the winning firm, and thank all firms for their participation.
Following the right steps will result in a more qualified auditor and will ensure that you remain in compliance with federal regulations. © Copyright 2016 The Grantsmanship Center.