By: Ariana Young, CPA
The Office of Management and Budget released the 2016 Compliance Supplement on August 1, 2016. As expected, there were a few changes made in this latest version, but the changes were not very substantial in general. A complete list of the changes can be found in Appendix V of the 2016 Compliance Supplement. A summary of the most significant changes is as follows:
- Globally, all parts of the supplement have been reviewed and updated for use of the words “should” and “must,” both for consistency in usage and clarity of intent.
- Part 2 – Matrix of Compliance Requirements was changed throughout to use “N” in lieu of a shaded cell if a program normally does not have activity subject to this type of compliance requirement or if the compliance requirement generally would not have a direct and material effect on the program.
- Part 3 – Compliance Requirements contains an update to Part 3.2 I “Procurement and Suspension and Debarment” that reflects the updated FAQ on the grace period for procurement. Additionally, a link was added to the FAR location where the current micro-purchase and simplified acquisition thresholds may be found. As of October 1, 2015, the micro-purchase threshold is $3,500, while the SAT remains at $150,000.
- Part 6 – Internal Control was updated to be consistent with the guidance contained in “Standards for Internal Control in the Federal Government” (also known as the Green Book) and the Committee of Sponsoring Organizations of the Treadway Commission (COSO) “Internal Control Integrated Framework.”
- Appendix II – Federal Agency Codification of Government-wide Requirements and Guidance for Grants and Cooperative Agreements was updated to include the dates of federal agencies’ issuance of final rules or regulatory actions to implement the OMB Uniform Guidance.
- Appendix VII – Other Audit Advisories contains guidance on the effect of the Uniform Guidance on Major Program Determination as well as updated information on the filing of the data collection form with the Federal Audit Clearinghouse (FAC) including extensions for non-availability of the FAC website and submission of the revised form for audits completed pursuant to the Uniform Guidance subpart F.
As the Uniform Guidance and other federal grants management requirements continue to evolve, recipients (including pass-through entities) and sub-recipients of federal awards should annually review the Compliance Supplement guidance thoroughly to make sure they understand what compliance areas may be audited during their next Single Audit. Furthermore, organizations receiving federal awards should read Part 6 – Internal Control in the 2016 Compliance Supplement because OMB has now clarified that although strict compliance with the COSO framework or the Green Book is not required under the Uniform Guidance, it is being formally recommended, as a best practice, that organizations evaluate their internal controls using the COSO framework and the Green Book. The COSO framework in particular is currently used by most auditors to evaluate internal controls and as such, it serves as an excellent resource for any organization seeking to improve or enhance its internal control structure.
For additional information about the 2016 compliance supplement, or if you have questions or concerns about the Uniform Guidance, please contact us for assistance.
Ariana Young, CPA, Senior Audit Manager
ayoung@tatetryon.com
The post OMB Releases 2016 Compliance Supplement appeared first on Tate and Tryon.