Owing to a small federal grant from the Department of Housing and Urban Development

(HUD) to the Town of Stillman, Nadine Gordimer, CPA has performed grant audits for the town in each of the past five years. The town has received no other federal financial assistance. However, in 1999, the town applied for and received an additional one-year HUD grant for the minimum amount subjecting Stillman to the requirements of the Single Audit Act and OMB Circular A-133, "Audits of States, Local Governments, and Non-profit Organizations." The grant funds were received and disbursed for lowincome housing refurbishing in 1999. Not having performed a single audit previously, Gordimer seeks your advice.

Required:

1. Does the HUD grant to the Town of Stillman represent a major program or a nonmajor program under the Single Audit Act?

2. Explain the town's reporting responsibilities under the Single Audit Act.