GAQC Alert No. 298 

GAQC Alert
2016 Compliance Supplement Available for Comment
December 22, 2015
GAQC Alert #298
In This Alert
How to Comment on the Proposed Supplement Revisions
Summary of Proposed 2016 Supplement Revisions
Timing, Effective Date, and GAQC Web Events
Archived Event Now Available
A no-CPE archive of the GAQC Web event, Now is the Time for Auditors to Get Ready for the Uniform Guidance Audit Requirements, is now available. This event will also be rebroadcast during 2016 if you prefer to get CPE for viewing it.
Don’t Forget Your Firm Questionnaire!
The required 2015 GAQC Compliance Questionnaire is due on January 25, 2016! Have questions? Send an e-mail to
Final Rebroadcast of Required Webcast
The 2015 GAQC Annual Update Webcast will be rebroadcast on Thursday, January 21, 2016. Register now. You can also access a no-CPE archived version of the Webcast to meet your membership requirement or email to request a CD-ROM.
Additional Resources
GAQC Alerts

Archived GAQC Web Events

Audit Practice Aids and Tools

HUD Information
Dear Center Members
The U. S. Office of Management and Budget (OMB) has provided the Governmental Audit Quality Center (GAQC) a draft of the 2 CFR PART 200, Appendix XI, 2016 Compliance Supplement (the Supplement) for review and comment. This review is important because the Supplement identifies the compliance requirements that the federal government expects to be considered as part of a single audit, as well as related auditor guidance. While the draft 2016 Supplement does not contain as many major updates as last year’s edition, there continue to be changes relating to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance). After reading this GAQC Alert, you will be aware of the following:
  An opportunity to review and provide feedback on the proposed revisions to the 2016 Supplement. Your feedback will need to be received by GAQC staff on or before Friday, January 22, 2016 (see instructions for providing feedback below);
  The nature of the proposed revisions to the Supplement; and
  The expected timing of the 2016 Supplement, its effective date, and several upcoming Uniform Guidance-related GAQC Web events.
How to Comment on the Proposed Supplement Revisions
Every year the GAQC provides its members an opportunity to review and comment on proposed revisions to the Supplement. To assist in this endeavor, the GAQC has developed a table that summarizes the proposed changes for your review. If your firm or state audit organization (SAO) has specific experience with any of the programs or sections described in this summary of changes and an interest providing feedback, please send an e-mail to Be sure to indicate the section or Catalog of Federal Domestic Assistance (CFDA) number(s) you are interested in providing feedback on and we will send those programs or sections directly to you.

There is a relatively short timeframe for the GAQC to provide comments back to OMB, especially in light of the upcoming holidays. To ensure we meet the OMB comment deadline, your feedback must be sent to by Friday, January 22, 2016. Keep in mind that any documents you receive are draft and should not be used for any purpose other than to provide feedback.

It has been our experience that it is better to closely review the proposed changes before they become final to avoid any practice problems. Thanks in advance for your consideration of this request.
Summary of Proposed 2016 Supplement Revisions
The GAQC staff has reviewed the draft Appendix V, List of Changes for the 2016 Compliance Supplement, and scanned through the parts of the draft Supplement received from OMB. Based on this review it appears that there are 2 new Housing and Urban Development (HUD) programs being clustered with two existing HUD programs, 5 deleted programs, and approximately 39 programs with more than minor changes. A summary of the more significant changes are included below. Keep in mind that this summary is based on the proposed draft revisions and could change based on the feedback OMB receives. Refer to the summary of changes for more detail.
  Part 2, Matrix of Compliance Requirements, is updated to add and remove programs to make it consistent with the Table of Contents and Part 4, Agency Program Requirements. Additionally, compliance requirements are added or deleted from several programs based on changes in Part 4.
  Part 3, Compliance Requirements, updates all references to the Council on Financial Assistance Reform (COFAR) Frequently Asked Questions (FAQs) to refer to the most recent version issued in September 2015. Further, the table that summarizes the applicability of the subparts of the Uniform Guidance to different types of federal awards has been modified.
  Part 3.1, which is applicable for testing federal awards before December 26, 2014, revises all references to the audit requirements under OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, to the audit requirements under subpart F of the Uniform Guidance. Other explanatory material is also provided for provisions affected by the change of location of the audit-related requirements. Among the other changes in this part, section B, “Allowable Costs/Cost Principles,” adds notes concerning the possible effect of the change to 2 CFR part 200 on indirect cost/F&A rates. Section I, “Procurement and Suspension and Debarment,” includes updated references to the System for Award Management’s Exclusions and the simplified acquisition threshold.
  Part 3.2, which is applicable for testing federal awards made on or after December 26, 2014, corrects or clarifies language in B, “Allowable Costs/Cost Principles.” Section I, “Procurement and Suspension and Debarment,” is modified to remove Federal Acquisition Regulation citations that apply to federal agencies rather than contractors, and updates the grace period for procurement to be consistent with the latest version of the COFAR FAQs. Finally, in L, “Reporting,” language is added concerning the Department of Health and Human Services’ transition from pooled payment to award-by-award payment requests.
  Part 4 adds and deletes programs and make necessary changes to a number of existing programs due to regulatory or other changes. Several program deletions and changes are made in Part 4 and the Other Clusters section of Part 5 Clusters of Programs, relating to the completion of American Recovery and Reinvestment Act of 2009 (ARRA) funded activities, among other changes.
  Part 5 makes updates to the Student Financial Assistance and Research and Development clusters. It also updates a program name and adds new clusters.
  Part 6, Internal Control, is still missing from the Supplement. OMB states that changes are pending.
  Appendix VI, Program-Specific Audit Guides, removes the previous reference to the Department of Energy for audits of for-profit recipients and states that such audit guidance is now included at 2 CFR section 910.501-528.
  Appendix VII, Other Audit Advisories, updates the low-risk auditee section coverage of extensions based on the non-availability of the Federal Audit Clearinghouse during part of calendar year 2015. It also removes ARRA coverage based on limited continued availability of ARRA funding and removes the discussion on large loan and loan guarantee programs on Type A program determination as that topic is now covered directly by subpart F of the Uniform Guidance.
  Various standard annual updates are also made to various other Appendices to the Supplement.
Timing, Effective Date, and GAQC Web Events
OMB has not provided a specific date or timeframe for issuance of a final 2016 Supplement. We will update you via future GAQC Alerts as OMB makes progress on finalizing the 2016 Supplement. Once the final 2016 Supplement is released, the effective date will be for audits of fiscal years beginning after June 30, 2015, and it will supersede the 2015 Supplement.

The GAQC will host the following Web events relevant to an audit performed under the Uniform Guidance between now and summer 2016.
  Preparing for a Single Audit: An Auditee Perspective, to be held on Thursday, January 14, 2016, from 1:00 PM - 3:00 PM (Eastern Time). See GAQC Alert #297 for registration information.
  Internal Control: COSO, the Green Book, and More, to be held on Thursday, February 4, 2016, from 1:00 PM - 3:00 PM (Eastern Time). Hold the date on your calendar.
  GAQC 2016 Annual Update Webcast, to be held on Tuesday, April 19, 2016, from 1:00 PM - 3:00 PM (Eastern Time). Hold the date on your calendar.
  The 2016 OMB Compliance Supplement and Single Audit Update, is scheduled for Thursday, June 9, 2016, from 1:00 PM - 3:00 PM (Eastern Time). Hold the date on your calendar.
Look for future GAQC Alerts with registration information on the above events and/or registration reminders as each date gets closer.


AICPA Governmental Audit Quality Center
Stay Informed

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