Single Audits - formerly "A-133" - generally follow the same cost accounting guidelines as federal contract awards that are governed by the FAR. OMB Circular A-122 "Cost Principles for Non-Profit Organizations" covers project cost accounting topics familiar to most government contractors such as the recovery of direct costs, indirect costs, allocation of costs and the allowability of costs.
While a traditional grant does not include a profit component, a common misconception is that only not-for-profit organizations are subject to a Single audit, when in fact any entity - including for profit government contractors - with $750,000 or greater in awarded federally-funded grants during a fiscal year is subject to such an audit. These audits are most often performed by independent public accounting firms for a significant fee and only occasionally by DCAA, and the focus is not only on the application of costs to federal grants, but also on an organizations' compliance with laws and regulations and the recipient's internal controls. Let's suppose your organization has been awarded a federal research grant in excess of $750,000 and therefore the grant is subject to audit scrutiny as to how the money is ultimately spent. As the funds are expended in pursuit of the grant's intended objective, you must account for every dime of the drawdown much as you would with a cost reimbursable contract. This can be a challenge if you are not equipped with a cost accounting system that can easily identify labor and other direct costs expended in relation to the funded amount, and then automatically allocate a pro-rata proportion of your total indirect costs to the grant. Whether your organization receives grants or contracts, SYMPAQ is structured to capture direct costs and allocate indirect costs by project and report on how those costs are expended against the overall budget ceiling.
