AN EMPIRICAL STUDY OF THE IMPROVEMENT IN FINANCIAL MANAGEMENT PRACTICES OF STATE AND LOCAL GOVERNMENTS IN RESPONSE TO THE SINGLE AUDIT ACT

The Single Audit Act (SAA) of 1984 was one of the most important pieces of legislation affecting government auditing ever to be enacted. Two of the four stated goals of the SAA were to (1) improve the financial management of state and local governments with respect to federal financial assistance programs, and (2) promote the efficient and effective use of audit resources. The purpose of this research was to determine the extent to which these two goals have been achieved, with an emphasis on the first goal.; Data were collected using a mail questionnaire which was sent to all state governments and a random sample of county governments, municipalities and townships. The survey instrument was designed to determine how important the SAA was in initiating financial management practices/procedures in each of the four government types. A total of thirty-one practices/procedures in five categories of financial management were included in Part II of the instrument.; Research results showed that the SAA has been moderately important in initiating financial management practices/procedures in state and local governments. The SAA had the greatest impact in initiating practices/procedures that are directly related to federal programs, and was most important in initiating practices/procedures in county governments. The results also showed that duplication of audit effort continues to be a problem in federal program audits despite the SAA.; This study contributes to the accounting literature in that it addresses the issue of whether the SAA has achieved its first stated goal. The study is timely in that it was completed at a time when there is a great deal of interest in the SAA. The President's Council on Integrity and Efficiency (PCIE) recently completed a study dealing with the SAA and the U.S. General Accounting Office (GAO) is in the process of completing their own study. The results of this study, along with the results of the PCIE and GAO studies, will provide information that can be used to evaluate the SAA and determine what changes, if any, need to be made.