There are changes coming to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. One of the largest changes is to streamline requirements from about 8 different OMB Circulars into one large OMB Circular. This new guidance supersedes the prior OMB Circulars and became effective December 26, 2013. This change is allowing the government to be more efficient, effective and transparent.
9 Impacts of A-133 Updates
The major reforms in the new guidance include:
- Eliminating duplicative and conflicting guidance;
- Focusing on performance over compliance for accountability;
- Encouraging efficient use of information technology and shared services;
- Providing for consistent and transparent treatment of costs;
- Limiting allowable costs to make best use of Federal resources;
- Setting standard business processes using date definitions;
- Encouraging non-Federal entities to have family-friendly policies;
- Strengthening oversight; and
- Targeting audit requirements on risk of waste, fraud, and abuse.
As part of the reforms, the single audit and Type A threshold increases to$750,000 for audits of fiscal years beginning on or after December 26, 2014. In addition, 20% of total federal awards expended will need to be tested for those non-Federal entities that qualify as a low risk auditee and others will need 40% tested.
Some of the new guidance that should be addressed by management includes procurement, allocating indirect costs, time and effort reporting, subrecipient monitoring, and internal control. These new requirements will need to be implemented for all new federal awards made after December 26, 2014.
We encourage all organizations who receive Federal funding to work with their funding sources to determine the exact nature of how this will impart the organization. Contact a Barnes Dennig professional with further questions.