In December 2014, the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, referred to as “Uniform Guidance,” became effective. The Uniform Guidance combines and supersedes several OMB Circulars, such as A-21, A-87, A-110, A-122, A-89, A-102, and A-133, into one guide, 2 CFR 200.
Uniform Guidance became effective for all federal awards made on or after December 26, 2014. The purpose of this new Uniform Guidance is to offer a streamlined set of guidance that reduces redundancies and confusion and clarifies requirements to improve the overall management and reporting of these federal rules. Key provisions included changes and clarification to procurement, subrecipient monitoring and indirect costs.
So, what does this mean from an audit prospective? 2 CFR 200 Part F describes an organization’s responsibilities for managing federal awards and an auditor’s responsibility with respect to the scope of the audit.
Here is a quick reference guide summarizing audit requirement changes for federal awards and further discussion on what each requirement refers to:
The single audit threshold refers to the level of federal expenditures that would trigger an audit under Uniform Guidance. As a result of the increased threshold, some smaller organizations may no longer require a single audit.
As part of the auditor’s risk-based audit approach, a sample of federal programs will be selected as major program(s) utilizing the updated thresholds shown above and various risk assessment procedures. The major program(s) audited are required to cover either 20% or 40% of total federal expenditures, depending on the assessed risk. This is less than the audit requirements under A-133, and therefore, some organizations may see a decrease in the number of major programs audited. See the OMB’s Compliance Supplement for more detailed discussions on compliance procedures.
Stay tuned to our website over the next several weeks for more articles as we highlight some of the changes in the Uniform Guidance. If you have any questions on the above material, please contact your Schneider Downs team members, and we will be happy to assist your organization in meeting these new requirements.