What 2022 OMB Changes Mean for Your Non-Profit Audit | Barnes Dennig

OMB Changes – and What They Mean for Your Next Non-Profit Audit

Published on by Rachael Cruse, Kara Wysinski, in Assurance, Not-for-Profit

OMB Changes – and What They Mean for Your Next Non-Profit Audit

The Office of Management and Budget (OMB)’s new 2022 Compliance Supplement means changes for your next non-profit audit, if Federal programs and funding are involved. And unlike previous years, The OMB doesn’t expect to issue a future amendment to the supplement – so that means both auditees and auditors can plan more proactively for this work.

The supplement is effective for audits of years beginning after June 30, 2021.

Key Points in the 2022 OMB Supplement

The COVID-19 pandemic has established Federal programs and funding – and some of that funding is designated as “higher risk” in the compliance supplement.  Appendix IV of the supplement summarizes those programs that continue to carry the “higher risk” designation in 2022, as well as those that are new to this risk designation or that have been removed from the “higher risk” designation.

A great example is Health and Human Services funding under the Provider Relief Fund (Assistance Listing 93.498) continues to be designated as “higher risk,” whereas Treasury funding under Coronavirus Relief Fund (Assistance Listing 21.019) has been removed from the list.

There are some additions as well: Treasury funding under Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing 21.027) is new in 2022.

“High Risk” Isn’t an Automatic for Compliance Auditing

Keep in mind that funding from a “high risk” program does not automatically mean it will be subject to compliance auditing.

Clusters of Federal programs evaluated collectively for compliance audit purposes have also been adjusted.  These changes are summarized in Part 5 of the supplement.  For example, the Child and Nutrition Cluster has added the Fresh Fruit and Vegetable Program (Assistance Listing 10.582).  Ensuring the proper clustering of programs when evaluating Federal programs will assist with compliance in both auditing and reporting.

Finally, Appendix VII summarizes various other information, definitions, and resources applicable to auditees and auditors involved with compliance audits and reporting.  Make sure to familiarize yourself with this section of the supplement, including the upcoming change in the provider of the Federal Audit Clearinghouse to the General Services Administration (GSA), where single audits will be submitted beginning October 1, 2022.

We Can Help

If you have a question about how the 2022 OMB supplement may affect your audit, contact us to set up a free consultation with one of our dedicated non-profit accounting pros. We’re here to help.


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