In late January, the U.S. Office of Management and Budget (OMB) issued a proposal for comment that would result in sweeping revisions to rules for auditing federal expenditures by states, local governments, and not-for-profit organizations, as well as a number of other key grant reforms. The audits affected by the proposal are often referred to as single audits or Circular A-133 audits. The recent OMB proposals are a follow-up to a 2012 OMB Advance Notice on the same topic areas and are the next step in the OMB's federal grants improvement initiative. A number of AICPA comments on the Advance Notice were addressed in the recent updated OMB proposal.
There are several documents that walk through the OMB proposed changes. The main document, Proposed OMB Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards, recommends revisions to OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations (Circular A-133). There is also a Federal Register notice with additional information titled, Reform of Federal Policies Relating to Grants and Cooperative Agreements; Cost Principles and Administrative Requirements (Including Single Audit Act), and several related documents on a special section of the OMB Web site.
A summary of the proposed revisions is described in detail in GAQC Alert #211, issued by the American Institute of CPAs’ (AICPA) Governmental Audit Quality Center (GAQC), which has been left open to the public. Among the recommendations are changes in how auditors will select which federal programs to audit and a proposed increase of the threshold for a Circular A-133 audit from $500,000 to $750,000 in federal expenditures.
The GAQC is coordinating the AICPA response on the OMB proposal. The OMB recently extended the deadline for comments to June 2, 2013. If you have comments regarding the proposal that you believe would be helpful to the GAQC as it develops its comment letter, please send them to GAQC@aicpa.org no later than Friday, April 26, 2013.