On July 14, the Office of Management and Budget (OMB) released its 2015 compliance supplement, which is applicable for audits of fiscal years beginning after June 30, 2014.
It contains a number of changes that affect states, local governments, Indian tribal governments, and not-for-profit organizations that receive federal funding or grants. In addition, the title of the compliance supplement was changed to remove reference to OMB Circular A-133 and reflect OMB’s new Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (often referred to as the uniform guidance).
The full list of changes for 2015 is available in Appendix V of the compliance supplement. Let’s take a brief look at a few of those with the greatest impact.
Several compliance requirements for various programs were added, deleted, or corrected to be consistent with Part 4, Agency Program Requirements, and Part 5, Clusters of Programs. Two compliance requirements also were removed from the supplement. Columns D (Davis-Bacon Act) and K (real property acquisition and relocation assistance) were removed and are now shown as “reserved.”
The introduction of Part 3 was revised to address awards made before December 26, 2014, and new awards or certain funding increments made on or after that date. It also explains the structure of Part 3 for the 2015 compliance supplement.
Because some awards may have been made prior to the implementation date of the uniform guidance, Part 3 of the compliance supplement has been divided into two parts: one for awards made prior to December 26, 2014 (Part 3.1), and the other for awards made subsequent to that date and subject to the uniform guidance (Part 3.2).
In Parts 3.1 and 3.2, the title of Section H, Period of Availability of Federal Funds, has been changed to Period of Performance. Part 3.1 notes that prior years’ audit findings will refer to this as Period of Availability of Federal Funds.
In Part 3.1:
As noted above, Part 3.2 was added to reflect changes resulting from issuance of the uniform guidance. Part 3.2 also includes enhanced coverage of cost reimbursement contracts awarded under the Federal Acquisition Regulation.
In addition to OMB’s regular annual additions, deletions, and modifications to individual programs—which could be very significant to the programs themselves—the following are some overall changes made in Part 4:
As with Part 4, references were added or changed as a result of the issuance of the uniform guidance. In addition, several updates and modifications were made to the compliance requirements for the clusters Student Financial Assistance and Research and Development. For example, the Indirect Cost Limitation Special Test and Provision was deleted from the Research and Development cluster because it no longer applies.
The Other Clusters section of Part 5 was also updated to remove clusters based on the deletion of American Recovery and Reinvestment Act of 2009 (ARRA) programs, update a program name, and add a program to a cluster.
The content was removed from Part 6. Instead, OMB included a statement concerning internal control and OMB’s intent to revise Part 6 for the 2016 compliance supplement based on changes to internal control requirements.
This part was updated to reflect issuance of the uniform guidance, to remove compliance requirements related to the Davis-Bacon Act and real-property acquisition and relocation assistance, and remove subaward reporting under the Federal Funding Accountability and Transparency Act.
This appendix includes updated information on responsible single audit offices and officials and program contacts.
In addition to the full list of changes for 2015 in Appendix V of the 2015 compliance supplement, Appendix VII contains very important highlights for recipients of federal awards and their auditors. Especially this year, Appendix VII contains helpful information in this year of transition to the uniform guidance. For example:
For questions about how OMB’s 2015 compliance supplement could affect your organization, contact your Moss Adams professional. You can also visit our uniform guidance topic page for additional articles and resources related to OMB’s new guidance for federal awards.