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December
9, 2003 -- The
Office of Management and Budget (OMB) has revised Circular
A-133, “Audits of States, Local Governments, and
Non-Profit Organizations.” Effective for fiscal years ending after December 31, 2003,
the annual A-133 audit threshold will be increased from
$300,000 to $500,000.
Organizations
that receive Federal funds, either directly or though a
pass-through agency, will be subject to the A-133 audit
requirements if they spend $500,000 or more in Federal funds
during the year. Even
if an organization’s expenditures of Federal funds falls
below the threshold, the Federal government retains the
authority to audit or investigate any organization that is
suspected of using the Federal funds improperly.
The
OMB reported the following statistics regarding this change
in the June 27, 2003 Federal Register (Vol. 68, No. 124):
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Almost 6,000 entities will be relieved of the
A-133 audit requirements.
§
Less than one half of one percent of total
Federal awards will be exempted.
The
OMB determined the benefits of relieving the administrative
burden of almost 6,000 entities outweighed the increased
risk to the Federal agencies that award the grants.
Under the Single Audit Act Amendments of 1996, the
OMB Director may review and increase the threshold on a
biennial basis.
In
response to criticism of the increased risk to the Federal
agencies, the OMB reminded the agencies that the audit is
only one way to monitor grantees.
OMB suggested that the agencies should be
communicating the CFDA (Catalog of Federal Domestic
Assistance) number. With
the CFDA number, the grantee can more easily identify the
compliance requirements it must meet.
At http://www.cfda.gov,
the grantee may enter the CFDA number to get up-to-date
guidance related to agency contact information and
compliance requirements.
The OMB also suggested that the Federal agencies take
advantage of its authority to review financial and program
records throughout the year using site visits or agreed-upon
procedures engagements for certain compliance requirements.
The
revised circular is available electronically at http://www.omb.gov.
Go to the “Grants Management” page and then to the
“Circulars” page.
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