By: Margaret Karren
After much talk during 2012, there is hope for reform of A-133 audits. The proposed changes will increase the efficiency and eliminate unnecessary requirements.
OMB Proposed Guidance
On January 31, 2013, the U.S. Office of Management and Budget (OMB) issued for a 90 day comment period, titled “Proposed OMB Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards”. The guidance purposes broad revisions to OMB Circular A-133 including:
- A proposed increase of the threshold for a single audit from $500,000 to $750,000 in federal expenditures
- A proposed increase in the minimum threshold for the type A/B program determination from $300,000 to $500,000
- The criteria for Type A programs to qualify as high-risk would be revised such that for a Type A program to be designated as high-risk it must have in the most recent period:
- Failed to receive an unqualified opinion;
- Had a material weakness in internal control; or
- Had questioned costs exceeding five percent of the program’s expenditures
- The proposed guidance would reduce the number of high-risk Type B programs that must be tested as major programs from at least one-half to at least one-fourth of the number of low-risk Type A programs. Additionally, small Type B programs would be considered those that are a flat 25% of the Type A/B program threshold
- The percentage of coverage required in a single audit is proposed to be reduced from the current 50% (normal) and 25% (low-risk auditees) to 40% and 20%
- They are also proposing that the number of types of compliance requirements be reduced from the current 14 types of compliance requirements to six types
- The questioned cost threshold for reporting will be increased from $10,000 to $25,000
For the complete proposed guidance, go to the following website: https://www.federalregister.gov/articles/2013/02/01/2013-02113/reform-of-federal-policies
We will keep you advised of this proposed guidance on future blogs.