Financial Management Risk Reduction Act
This act increases federal oversight of single audits submitted by certain recipients of federal awards (i.e., federal financial assistance, including grants, and federal cost reimbursement contracts). A single audit is conducted by an independent auditor and includes the financial statements and federal awards of a non-federal entity.
Specifically, the act requires the Office of Management and Budget (OMB) to designate one or more federal agencies to conduct a government-wide analysis of single audit quality. Such government-wide analysis must be completed within three years of enactment and every six years thereafter.
OMB must develop a strategy, and the General Services Administration must develop analytic tools, to identify risks to federal award funds using Federal Audit Clearinghouse data.
Within four years of enactment, the Government Accountability Office must evaluate several related topics, including (1) the effectiveness of such strategy and analytic tools, and (2) reporting burdens for auditors and audited entities.