Federal Awards Accountability

Each year, California receives billions of federal funds for numerous programs. As a condition of receiving these federal funds, the state must annually have an independent audit of California's financial statements as well as an independent audit of California's compliance with federal regulations for the programs the federal government provides funding for. The State Auditor plays a critical role in oversight for the federal funds received each year. State statutes mandate that the California State Auditor annually conduct—in accordance government and industry auditing standards—California's Single Audit, which is a combination of an audit of California's financial statement and the state's compliance with federal program requirements. Further, this comprehensive annual audit fulfills the provisions of the federal Single Audit Act of 1984 and the Single Audit Act Amendments of 1996.

From July 1, 2011 through June 30, 2012, California expended $74.3 billion in federal funds through 400 programs or program clusters—including $35 billion for health and human services programs and $16.9 billion for workforce and unemployment programs. The state auditor contracted with KPMG LLP (KPMG) to perform California's Single Audit of fiscal year 2011-12. KPMG audited 34 major federal programs or program clusters totaling $71.3 billion, which represents 96 percent of the total amount California expended.

The American Recovery and Reinvestment Act of 2009 (Recovery Act), also known as the federal stimulus, accounts for a decreasing portion of current federal funding. Further, the U.S. Congress, with the enactment of the Consolidated Appropriations Act, 2014, ended the reporting requirement for recipients of Recovery Act awards effective January 2014. For these reasons, we do not anticipate reporting on the Recovery Act here in the future.