Home

Quick Links

Legal & Sitemap

navigation
Home > Trends & Insights > OMB Issues Comprehensive Grant Reform, New Single Audit Rules

Article

 

Thursday, April 3, 2014

OMB Issues Comprehensive Grant Reform, New Single Audit Rules


The Office of Management and Budget (OMB) finalized and released comprehensive new federal grant reform guidelines on December 26, 2013. Known as the "Super Circular" or “Omni Circular," the new rules are intended to consolidate guidance on administrative requirements, cost principles and audit requirements for federal awards. These changes are currently effective for federal agencies and will become effective for grant recipients as of December 26, 2014, and for 2015 single audits (year-end December 31, 2015) and after.

The grant reform can be summarized into three main categories:

  • Administrative requirements: The changes to the administrative requirements are intended to minimize the time spent complying with unnecessarily burdensome administrative requirements and re-focus efforts towards achieving program results and performance outcomes, while also strengthening accountability.
  • Cost principles: The reforms to the cost principles include several changes related to the treatment of direct and indirect costs, including changes to compensation, interest costs, conference expenses and the management of indirect cost rates. Federal grant recipients should understand these changes.
  • Audit requirements: The most significant change to the audit requirements is an increase in the single audit threshold. The Super Circular raises the single audit (previously also known as the A-133 audit) threshold from $500,000 to $750,000 in federal expenditures. This will provide audit relief and reductions in administrative costs for nearly 5,000 organizations nationwide, while still maintaining coverage for over 99% of federal grant award dollars. Non-federal entities who expend less than $750,000 in federal funds must have records available upon request for review upon request by the federal funding agency or pass through entity.

Other important aspects of the OMB’s comprehensive federal grant reform guidelines include:

  • Focus on performance: Changes focus on performance over compliance to provide accountability for Federal funds.
  • Technology: The reform encourages the efficient and effective use of technology and states a preference towards electronic record retention of Federal award-related information.
  • Audit findings : Auditors will be required to report their findings in greater detail. The types of findings have not changed, but the threshold for reporting findings has been increased from $10,000 to $25,000.
  • Transparency: Grantees for whom a single audit is required will be obligated to publish their reports online.

  • Major program determination: The Super Circular modifies methods for identifying and assessing risk for Type A and Type B programs.

According to a blog post from Beth Cobert, OMB's Deputy Director for Management, combining the previous eight Federal regulations into one, comprehensive requirement, “the government can better administer the $600 billion awarded annually for grants and other types of financial assistance by decreasing administrative burden for recipients and reducing the risk of waste, fraud and abuse."

The Super Circular modifications are a key component of a widespread federal effort to focus resources on improving performance and outcomes. They are designed to encourage collaboration, facilitate the development of innovative program models and emphasize evaluation.

Find the complete text of the new guidance at the Federal Register.


COMMENTS

comments powered by Disqus