Question

Pertain to entities receiving federal funds?

Answer 1

All agencies / organizations receiving Federal funding are subject to the same audit standards, including community-based and religious groups. Such audits are designed only to investigate the Federally-funded aspects of the activities of an agency and are not intended to find unrelated issues. The audits are needed to ensure that Federal dollars have been adequately spent on reasonable costs. Therefore, maintaining accurate records of all transactions made with Federal funds is extremely important for grant recipients.

Although most entities are not audited by the government itself, the Federal government has the right to audit any system that receives public money at any time. For example, organizations that invest less than $300,000 a year in federal funds are normally only asked to perform a "self-audit." For larger grants those above $300,000 a year an audit is requested from a private, independent, external legal or accounting firm.