Have you heard?
The Federal government is considering major changes in the regulations governing grants and cooperatives agreements to streamline and simplify the guidance.
If implemented as written, the new regulations would streamline 8 sets of OMB Circulars for Federal grant management into one document.
We all love simpler, right?
This summer, the comment period on the proposed regulations finished up after an extended comment period.
Now we are just waiting for the other shoe to drop.
Wondering how will the changes to the A-133 Audit Requirements affect you?
There are three main changes to the audit requirements being proposed:
Change #1: Higher Single-Audit Threshold
One of the first changes being contemplated is to raise the single-audit threshold from $500,000 to $750,000.
The goal of this change is to reduce the administrative burdens on smaller governmental entities as wells as non-profits organizations.
For grantees receiving less than $750,000 in federal funds, the requirements would still make the organization or governmental unit need to make available records for multiple federal bodies such as the federal agency, any pass-through entities and the U.S. government Accountability Office (GAO) as needed.
Change #2: Shrinking Compliance Areas
One of the other proposed changes is to reduce the number of compliance areas that auditors need to test in the normal course of conducting the A-133 audit.
The number of compliance areas would drop from 14 to these 6 areas:
• Activities that are allowed or unallowed, and allowable costs/costs principles compliance
• Cash management-including payment management
• Eligibility for program funds
• Subrecipient monitoring
• Special tests and provisions.
Change #3: A Little Higher Threshold, A Lot More Reporting
Even though the number of compliance areas would shrink, the proposed regulations would increase the required reporting by auditors.
The little bit of good news is that the questioned costs threshold for audit findings would increase from $10,000 to $25,000.
Stay Tuned for Developments
We’ll keep you posted about the implementation date and other changes as they become available.
The upcoming budget debate in Congress could derail even the best-laid-plans for the “Proposed OMB Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards”
Sometimes even “simplification” can be complicated.
Lucy Morgan CPA, MBA
CEO, Compliance Warrior
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