Are you getting ready for the new OMB administrative requirements?

Posted on 04.23.14

Are you getting ready for the new OMB administrative requirements?

Author: Matthew O. McDonald, CPA, CFE | Partner | Not-for-Profit Industry Team

In December 2013, the Office of Management and Budget (OMB) released final guidance on administrative requirements, cost principles, and audit requirements for federal awards. This new guidance supersedes and combines eight existing OMB Circulars into one document. Most nonprofit organizations that receive financial awards from the federal government (either directly or indirectly) have been subject to these requirements through one these circulars. The goal of these new regulations include improving clarity and accessibility, lessening administrative burdens for federal award recipients, and reducing the risk of waste, fraud, and abuse.

The major policy improvements achieved in the new Uniform Guidance include –

  • Eliminating duplicative and conflicting guidance.
  • Enhancing accountability for federal funds.
  • Encouraging efficient use of IT.
  • More consistent treatment of costs.
  • Targeting audit requirements on risk of waste, fraud, and abuse.

The guidance also changes guidance related to the performance and applicability of Single Audits. The requirement threshold for a Single Audit has been raised from $500,000 to $750,000. Should an entity still need a Single Audit, the thresholds and risk assessment process has been significantly changed as well as the requirements on findings reporting.

With the combination of so many different circulars, award recipients need to be aware of changes that may impact their entities. Logical first steps in assessing any changes and impact on your entity should include:

  • Pay close attention to and familiarize yourself with the definitions in Subpart A of the guidance.
  • Pay close attention to recipient administrative requirements, especially the new procurement requirements.
  • Review your written policies to assess adequacy with new requirements. These policies should include financial management, payment, procurement, compensation, relocation costs, and travel costs.

Federal agencies are in the process of submitting implementing regulations for these changes. As a result, you should expect more changes. However, it is still important to start addressing your systems and policies to ensure compliance with these new regulations. The effective date for this guidance is expected to be for years beginning on or after January 1, 2015.

Questions? Contact your Keiter representative or information@keitercpa.com | 804.747.0000

 

Source: https://federalregister.gov/a/2013-30465

The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

Posted by: Matthew O. McDonald, CPA/CFF, CFE

Matt has over 20 years in public accounting providing audit, tax, consulting services, and financial forensic investigations for a variety of businesses, including multi-state privately held businesses and companies with single location operations. Areas of specialization include the multi-family housing industry, real estate, construction, not-for-profit organizations, retail, and manufacturing clients. Read more of Matt’s accounting insights on our blog.

Was this article helpful?

Fill out my online form.