Time for Federal Single Audit Modernization

In the United States, the Single Audit is an annual standard audit that any entity that receives over $750,000 in federal funds, federal grants, or federal awards for its operations must comply with. The single audit was established by an act of congress, the Single Audit Act of 1984.  The objective of this single audit is to make sure taxpayer money provided to states, cities, universities, not-for-profit organizations, Indian Tribes, and others which receive federal assistance is properly spent.

These single audits are typically performed by an independent certified public accountant (CPA). Each single audit report, which is a financial statement, is submitted to the Federal Audit Clearinghouse along with information which supports the single audit report.

When I was with Price Waterhouse as an auditor I performed single audits.  Each year the U.S. Federal Government provides around $400 billion to these non-federal agencies. It seems like the funding level to require an audit has dropped down to either $500,000 or maybe $300,000.

While the single audit idea is very good, the GREAT Act, which is already the law in the United States, proposes modernizing the single audit.  Today, audit working papers and reports are electronic proxies for paper document oriented and not queryable by machine-based processes. But what if the reports and the supporting accounting and audit working papers were semantic spreadsheets which were interpretable by machine based processes.

Imagine an SEC EDGAR-type repository that was interpretable by machine based processes but also readable by humans; the information repository is queryable by bureaucrats, the voters, and the media. A big queryable knowledge graph of information.

The government has a bunch of information about us; seems only fair that we voters have information about how the government is spending our money.  Also, this audit process should be efficient and effective. Modern accountancy techniques should be adopted.

XBRL US explains the single audit in this blog post, Single Audit, data standards, and the Great Act.


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