OUR THOUGHTS ON:

Proposed OMB Circular A-133 Changes

Not-for-Profit

By Theodore Pettko

The Office of Management and Budget (OMB) is proposing broad reforms to compliance audits under OMB Circular A-133, Audit of State, Local Government and Non-Profit Organizations. Some of the proposed highlights:

  • Single-audit requirement threshold increased from $500,000/year to $750,000/year in federal expenditures.
  • Entities with less than $750,000/year in federal expenditures would be required to make records available for review or audit by appropriate officials.
  • Determination of which federal programs will be audited is suggested for change.
  • The number of types of compliance requirement to be tested in a single audit is suggested to be reduced from 14 to 6. The six would be:
    • Activities allowed or unallowed, and allowable costs/costs principles
    • Cash management
    • Eligibility
    • Reporting
    • Sub-recipient monitoring
    • Special tests and provisions
  • More detail is suggested to be reported in auditor findings.
  • Questioned costs threshold for reporting will be increased from $10,000 to $25,000.
  • Eight existing OMB Circulars will be combined into one document.

The OMB is seeking comments to the proposed changes by May 2, 2013.

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