Grants Blog

Posts Tagged ‘Audit’

Ok, I’ll be honest. I haven’t looked at it yet, so I can’t comment on what’s included. But it’s finally here so I wanted to let everyone know ASAP.

OMB just released the 2012 A-133 Compliance Supplement.

It can be found here:

http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2012

Enjoy!

And keep checking the blog. I’ll be posting items of interest when I come across them.

Just a quick note: OMB is extending the deadline for submitting comments on its “Advanced Notice of Proposed Rulemaking” relating to the grants management requirements overhaul. The new comment deadline is April 30.

To read the original February 29 Federal Register notice describing OMB’s ideas for reforming grants management, click here.

As promised, OMB has set out a list of recommendations about ways to improve grants management — and now is your chance to comment. The notice appeared on OMB’s website earlier today, but the official version will not be published in the Federal Register until next Tuesday.

This “Advanced Notice of Proposed Guidance” briefly outlines the reform ideas OMB is considering, which could reshape the entire landscape of federal grants management.
OMB is targeting all aspects of grants management: audit, cost principles, and uniform administrative requirements. At this point, OMB is simply asking for feedback on these rather broad ideas. Using that feedback, it will then develop a detailed proposal that will be published in the Federal Register for further comment.

But now is the time to let your voice be heard. You have 30 days to comment on the ideas. To read the OMB announcement and to find out how to comment, click on the link below or watch the Tuesday Federal Register.

http://www.whitehouse.gov/sites/default/files/omb/financial/fr-notice-grant-reform-2012.pdf

The Office of Management and Budget is working on a draft “omnibus circular” that would consolidate and revise the current uniform administrative requirements, cost principles, and audit circulars.

While details are sketchy, the new circular could represent a significant change for grants management. For example, OMB may raise the single audit threshold, consolidate the current cost principles into one set, and set standards for merit-based reviews of grant applications.

OMB officials say a Federal Register notice inviting comments on the proposal will be published before the end of February. You will have 60 days to comment, and then OMB will review all of the input before issuing a second notice. If all goes according to OMB’s schedule, the new circular could be in effect by early fall. However, for those of us in the grants management community, we know this is an ambitious goal. Nonetheless, I wanted to give everyone a heads-up about the coming notice so you can be prepared to submit comments.

Keep watching this blog for more information. In addition, our annual Federal Grants Update seminar will cover this proposal in detail once it is published.

We’ve just posted information about our annual Federal Grants Update course to the Management Concepts web site. This one-day seminar is a great way to keep track of the latest developments in grants management and to learn about pending changes that may impact your day-to-day grants work.

This year we’ll be discussing OMB’s plans for consolidating and revising the grants management circulars, new grants oversight boards, A-133 audits, suspension and debarment, and much more.

Classes start the first week in April and run throughout the summer in cities around the country. We can also bring the course to your location. Visit the web page here for additional information about the topics that will be covered, locations and dates, and registration information. And if you have any other questions, feel free to contact me.

There has been a lot of talk in Congress about grants accountability, but mostly in the realm of post-award administration. Now comes a bill that addresses those topics before an award is made. HR 3433, the s-called GRANT Act, would call for some rather dramatic shifts in the way discretionary grants are awarded.

For example, federal agencies would have to establish and publish merit-based selection criteria. And before an award is made, agencies would have to evaluate whether the applicant is capable of properly managing federal awards and successfully completing the project. This seems fairly noncontroversial to me and aligns with current OMB circulars and administrative requirements.

But the legislation would make all of the preaward information available to the public — everything from the applicant’s proposal to the award notice and the final award decision and applicant rankings.

Further, agencies would post each recipient’s final report on a public website, along with any other information that could be useful to “future researchers or the public.”

As for A-133 single audits, the proposed legislation would require OMB to report on how the process could be made more useful and efficient, something OMB has been working on for years.

This legislation, which you can read here, is just now beginning to make its way through Congress, but I thought some of the above points are very interesting and show lawmakers’ continued interest in grants. Do you see anything else in the bill that you find interesting?

December Update: It is now final. In mid-December, GAO released the final version of the Yellow Book. Click on the link below to access the standards, as well as a summary of the major changes.

GAO just released a new version of the Yellow Book that “contains the intended content for the final 2011 Revision of Government Auditing Standards. GAO plans to formally issue the 2011 Revision Government Auditing Standards later this year after the AICPA has completed its clarity revisions.”

In the 2011 revision, GAO is establishing a “conceptual framework” for making independence determinations based on each situation’s unique facts and circumstances. Auditors would identify potential risks to independence, evaluate the significance of those threats, and apply safeguards to eliminate the risks if necessary. Rather than issuing a specific list of prohibited activities, GAO offers examples of threats to independence, for example an audit organization having undue dependence on income from a particular entity or a member of the audit team entering into employment negotiations with an audited entity.

 The independence section also identifies specific nonaudit services that would impair auditor independence in the government environment. These include, for example, preparing accounting records or financial statements.

 Grants management officials may also find the new Yellow Book’s appendix helpful not only in preparing for or conducting an aduit, but also in improving overall organizational operations. As part of their responsibilities, auditors review the organization’s internal controls. In the Yellow Book, GAO provides more than a dozen indicators of internal control problems that can serve as an alert for grants management officials. GAO also offers examples of activities that could indicate fraud or abuse in government-funded programs and activities.

The Yellow Book is only available online at www.gao.gov/yellowbook.

Yesterday, a House subcommittee held hearings on “Improving Oversight and Accountability in Federal Grant Programs.” Officials from OMB, GAO, federal agencies, and the private sector all testified. And while (in my opinion) there was not a lot of new information or new ideas, the fact that Congress is now paying more attention to grants management is a fairly significant development.

So here is a link to the subcommittee’s website, where you can find testimony and watch a recorded version of the hearing.

I’m curious to see what action Congress, agencies, or the administration actually take. What do you think? Will we see concrete steps toward improved effectiveness and use of single audits? Will there be changes in the preaward process? Will regulations be amended? Take a look at the testimony and let me know what you think.

I’ve been looking at the recently released 2011 A-133 Compliance Supplement and found several items of interest (at least to me) that I thought I would pass along. 

OMB added a a new element to the core compliance requirements to alert auditors and program officials as to whether the reporting requirements of the Transparency Act apply to a particular program. The compliance supplement also explains that, at the current time, “this reporting at the program level may be “Not Applicable” for several different reasons: (1) there are no subawards under the program; (2) the program is exempt from this requirement because it is ARRA-funded; or (3) the program is other than a grant or cooperative agreement program. In the latter case, this designation may change once additional types of financial assistance are made subject to the Transparency Act’s reporting requirements.”

Also, when determining compliance with Recovery Act reporting requirements, auditors are only required to test for compliance with basic information such as the CFDA number and financial information such as expenditures. While the number of jobs created or retained is a required data element for Recovery Act reporting, OMB specifically says that the auditor is not required to test this data.

Feel free to post to our blog with anything else you may find of interest in the new Compliance Supplement.

Finally, the Office of Management and Budget has released the 2011 Circular A-133 audit guidance document.

As usual, new programs have been added, other programs have been deleted, and individual program descriptions have been updated. In addition, OMB has added guidance and references relating to Transparency Act reporting, and clarified reporting requirements and auditors’ responsibilities relating to Recovery Act funding.

Watch this blog for additional information in the future. In the meantime, go here to view or download the Compliance Supplement.

Enjoy!