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Proposed Revisions to OMB Circular A-133

We provided an update last year on proposed revisions to OMB Circular A-133 and how this would affect your audits. Since then, new proposed revisions have been released that are different than the ones previously issued. During the first quarter of 2013, the U.S Office of Management and Budget (OMB) issued proposed guidance that includes significant revisions to OMB Circular A-133, Audits of State, Local Government and Non-Profit Organizations. The proposed guidance is the first major re-write of the Circular A-133 in over 10 years. A few of the major changes proposed are:

  • Single audit threshold for audit increased from $500,000 to $750,000.
  • Type A/B major program determination increased from $300,000 to $500,000.
  • Percentage of coverage required for normal and low risk auditees decreased from 50% and 25%, respectively, to 40% and 20%, respectively.Number of types of compliance requirements reduced from 14 to 6. The 6 requirements would be:

  – Activities allowed or unallowed, allowable costs/costs principles, matching, and period of availability (combined),

– Cash management,

– Eligibility,

– Reporting,

– Sub-recipient monitoring, and

– Special tests and provisions.

  • Questioned cost threshold for reporting increased from $10,000 to $25,000.
  • More detail will be required to be reported in auditor findings.
  • The 8 existing OMB Circulars would be streamlined into one document called Subchapter G.
  • There are also changes in the risk assessment process that the auditor applies to selecting type A/B programs as major programs for testing.

The proposed revisions are designed to increase both the efficiency and effectiveness of federal programs. The changes are expected to reduce the audit burden on many non-profit agencies that receive between $500,000 and $750,000 of federal funding, and also increase the chance of auditors selecting high risk type B programs for single audit testing procedures.The proposed guidance titled, Proposed OMB Uniform Guidance: Cost Principles,Audit and Administrative Requirements for Federal Awards, can be found at: