Don’t Be So Quick To Delete §__.320(e)

April 12, 2013 | By Jerry Ashworth | Post a Comment

1197499_stop_1Sometimes you don’t really realize how much you miss something until it’s gone. What’s worse is missing something because you weren’t even aware that that particular thing would soon be gone. At least with this blog post, you won’t fall victim to the latter.

Grants stakeholders should be aware by now that the Office of Management and Budget in February issued proposed grants reform guidance, and is accepting comments on it until June 2. Certain key provisions in the proposal, such as combining all the grants circulars into one “supercircular,” raising the Circular A-133 single audit threshold to $750,000 and reducing the single audit compliance requirements from 14 to 7, have garnered most of the discussion.

However, there are other changes that are coming to the surface that really can have a big effect on grants oversight. For example, OMB Circular A-133, §__.320(e), Additional submission by subrecipients, currently states that auditees that are also subrecipients shall submit to each pass-through entity one copy of the reporting package for each pass-through entity when the schedule of findings and questioned costs disclosed audit findings relating to federal awards that the pass-through entity provided or the summary schedule of prior audit findings reported the status of any audit findings relating to federal awards that the pass-through entity provided. Section __.320 goes on to say that instead of submitting the reporting package to a pass-through entity, when a subrecipient is not required to submit a reporting package to a pass-through entity pursuant to paragraph (e)(1) of the section, the subrecipient shall provide written notification to the pass-through entity that: an audit of the subrecipient was conducted in accordance with this part (including the period covered by the audit and the name, amount, and CFDA number of the federal award(s) provided by the pass-through entity); the schedule of findings and questioned costs disclosed no audit findings relating to the federal award(s) that the pass-through entity provided; and, the summary schedule of prior audit findings did not report on the status of any audit findings relating to the federal award(s) that the pass-through entity provided. A subrecipient may submit a copy of the reporting package described in paragraph (c) of this section to a pass-through entity to comply with this notification requirement.

In essence, the subrecipient would be submitting its reports to the pass-through entity so that the pass-through could monitor the subrecipient progress. A worthy goal.

However, that would all change under the proposed revision, which would essentially delete §__.320(e) altogether. Under §__.712(d), Submission to clearinghouse, in the proposal, all auditees shall electronically submit to the Federal Audit Clearinghouse the data collection form described in paragraph (b) of this section and the reporting package described in paragraph (c) of this section. Ergo, subrecipients can submit their single audit reports straight to the FAC and not to the pass-through.

We have certain concerns about this provision. Where are the controls? By sending reports to the pass-through, the prime can establish a course of corrective action for the subrecipient. Now it won’t have that direct link. This may prove less burdensome for pass-through agencies, but I’m not so sure it won’t ensure proper oversight. Who’s to say subrecipients know how to submit reports correctly and will provide the proper information? I compare it to giving kids greater responsibilities without any oversight from their
parents. A slippery slope if you ask me.

Maybe I’ll be proven wrong but I’m not sure I like this provision in the proposal. If you have similar concerns, now is the time to comment. Please take the time to get familiar with all the provisions of the proposal, not just the main ones, and let OMB know your concerns.

How do you feel about this provision? We’d love to get your response.

LinkedInShare

Post a Comment

Your email is never shared. Required fields are marked *

*
*