Alternative Compliance Examination Engagements

Elizabeth Thyer, CPA, Partner

Coronavirus State and Local Fiscal Recovery Funds were awarded to municipalities in March 2021 to be used for responding to the public health emergency or to its negative economic impact, to provide premium pay to essential workers, to replace lost revenues and to make necessary investments in water, sewer or broadband infrastructure. When these funds are expended, the amount expended during each fiscal year is included in the determination of whether or not a single audit is required for that fiscal year. Entities may meet the requirements for having an alternative compliance examination engagement performed instead of a full single audit if the entity spent $750,000 or more in federal awards during the fiscal year and meet both of the following criteria: 1) the total SLFRF award received is at or below $10 million AND 2) other federal awards expended (not including SLFRF award funds) are less than $750,000 during the fiscal year. Entities who meet the requirements for an alternative compliance examination engagement may still elect to have a single audit.

The alternative compliance examination engagement is a separate engagement and one compliance opinion is issued along with a schedule of findings and responses. This report may be issued at the same time or different time as the financial statement report. The alternative compliance examination engagement report is due nine months after the fiscal year end and a data collection form is required to be submitted to the Federal Audit Clearinghouse upon completion.