OMB Issues 2014 A-133 Compliance Supplement With Numerous Changes

May 19, 2014 | By Jerry Ashworth | Post a Comment

OMB-SealWell, well, we only had to run one snail this year. The Office of Management and Budget today issued on its website the 2014 Circular A-133 Compliance Supplement. OMB didn’t meet its April target deadline, but issuing it 19 days into May is a definite improvement over years past.

This year’s supplement is chock full of discussion points. Taking a quick scan, it looks like OMB added five programs, deleted 17 program (mostly American Recovery and Reinvestment Act programs) and modified the title for nine programs. Several clusters also were changed with the removal of the Recovery Act programs.

However, one of the most anticipated sections is at the end of Appendix VII, in which OMB provides a preview of Compliance Supplement revisions for 2015 in light of the uniform grant guidance. When it issued the guidance in December 2013, OMB said that it opted not to reduce the number of compliance requirements in the supplement as proposed in the notice of proposed rulemaking OMB issued last year. Therefore, it maintained the current 14 compliance requirements until further review.

OMB has now determined it is time for that further review on that topic, as well as three others. OMB has begun working with the single audit community “to explore ways to ensure that the supplement focuses the auditor on testing the compliance requirements most likely to cause improper payments, waste, fraud or abuse or generate audit findings for which the federal awarding agency will apply sanctions.”

It has four main areas of focus in which it wants to determine:

  • how audit objectives and suggested audit procedures in Part 3, and compliance requirements in Parts 4 and 5, may be revised to relieve audit burden and focus on the areas of greatest risk to federal awards;
  • whether the types of compliance requirements that require the auditor to test beyond the normal financial system (e.g., performance reporting, special reporting, and certain special tests and provisions) can be reduced where the associated risk and benefits of such tests are minimal;
  • updates to Part 3 for changes under the uniform guidance, such as Subpart D — Post Federal Award Requirements, and Subpart E — Cost Principles; and
  • updates to Part 6, Internal Control, to be consistent with the GAO’s “Green Book” revisions and the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this outreach, OMB will prepare by Aug. 30 a revised Part 3 draft for a preliminary vetting in addition to the normal supplement annual internal vetting of changes in December 2014 for the 2015 supplement.

Although these discussion are essentially inside baseball as OMB works with the audit community, the results could have a huge effect on next year’s supplement. It will be interesting to see how this processes emerges.

Stay tuned to Thompson’s grants publications as we will provide more information and full details on all the changes in the 2014 Circular A-133 Compliance Supplement (note: this will be final year it is known as the Circular A-133 Compliance Supplement). It’s the end of an era, and the beginning of a new one.


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