The Single Audit is misunderstood by many Tribal Governments.
The Single Audit provides an opinion on compliance for each major Federal program and reports on the Tribe’s internal controls.
However, it does NOT express an opinion on the effectiveness of the Tribe’s internal controls.
In addition, the Single Audit’s primary focus is Federally funded programs. Often, the Tribe’s General Fund is NOT tested.
Why are these statements important?
First, weak or non-existing internal controls lead to Single Audit findings. Tribes are then left with determining what changes are needed for the controls to be more effective. Many times, this is like shooting in the dark, hoping to hit something.
Second, the Tribe’s General Fund is usually a considerable part of the Government’s annual operating budget but is NOT audited. This means Tribally generated funds are NOT being tested against an accounting standard, which results in reduced financial oversight.
This article does a nice job explaining the Single Audit.
TribalCFO has a wealth of experience addressing internal controls as well as stabilizing the General Fund.
https://cpahalltalk.com/single-audit-applicability-objectives/