The Single Audit Act: How Compliant are Nonprofit Organizations?

33 Pages Posted: 3 Feb 2003

See all articles by Elizabeth K. Keating

Elizabeth K. Keating

Harvard University - John F. Kennedy School of Government

Mary Fischer

University of Texas at Tyler - College of Business & Technology

Teresa P. Gordon

University of Idaho

Janet S. Greenlee

University of Dayton - School of Business Administration

Date Written: March 2003

Abstract

Audits are an important legal accountability tool used by resource providers (donors, grantors, and others) to assure that resources are spent by nonprofit organizations in accordance with the resource provider's intentions. This paper reports on audits that are required by the government of the United States for organizations receiving large amounts of federal financial assistance. Since 1990, nonprofits receiving substantial federal funds are required to undergo this rigorous and expensive form of federal oversight. We report on 11,841 nonprofit entities that underwent such audits, and the 3,592 audit firms that conducted them, from 1997 to 1999. Overall, compliance with federal regulations appears to be high. Our study indicates that smaller nonprofits, those that are new to government grants, and those with prior audit findings have a significantly higher rate of adverse audit findings. Perhaps for cost or other reasons, these nonprofits are being audited by less experienced auditors. Current federal funding does not provide any additional funds for Single Audit Act compliance. One policy implication of our work might be to provide federal funding specifically for Single Audit Act compliance to these nonprofits.

Keywords: Nonprofit Sector

Suggested Citation

Keating, Elizabeth K. and Fischer, Mary and Gordon, Teresa P. and Greenlee, Janet S., The Single Audit Act: How Compliant are Nonprofit Organizations? (March 2003). Available at SSRN: https://ssrn.com/abstract=372263 or http://dx.doi.org/10.2139/ssrn.372263

Elizabeth K. Keating (Contact Author)

Harvard University - John F. Kennedy School of Government ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-9856 (Phone)
617-495-8963 (Fax)

Mary Fischer

University of Texas at Tyler - College of Business & Technology ( email )

3900 University Boulevard
Tyler, TX 75701
United States
903-566-7433 (Phone)
903-566-7211 (Fax)

Teresa P. Gordon

University of Idaho ( email )

College of Business & Economics
P O Box 443161
Moscow, ID 83944-3161
United States
208-885-8960 (Phone)
208-885-6296 (Fax)

Janet S. Greenlee

University of Dayton - School of Business Administration ( email )

Dayton, OH 45469
United States
937-229-4790 (Phone)
937-229-3301 (Fax)

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