By: Margaret Karren

After much talk during 2012, there is hope for reform of A-133 audits. The proposed changes will increase the efficiency and eliminate unnecessary requirements.

OMB Proposed Guidance On January 31, 2013, the U.S. Office of Management and Budget (OMB) issued for a 90 day comment period, titled “Proposed OMB Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards”. The guidance purposes broad revisions to OMB Circular A-133 including:

  • A proposed increase of the threshold for a single audit from $500,000 to $750,000 in federal expenditures
  • A proposed increase in the minimum threshold for the type A/B program determination from $300,000 to $500,000
  • The criteria for Type A programs to qualify as high-risk would be revised such that for a Type A program to be designated as high-risk it must have in the most recent period:
    1. Failed to receive an unqualified opinion;
    2. Had a material weakness in internal control; or
    3. Had questioned costs exceeding five percent of the program’s expenditures
  • The proposed guidance would reduce the number of high-risk Type B programs that must be tested as major programs from at least one-half to at least one-fourth of the number of low-risk Type A programs. Additionally, small Type B programs would be considered those that are a flat 25% of the Type A/B program threshold
  • The percentage of coverage required in a single audit is proposed to be reduced from the current 50% (normal) and 25% (low-risk auditees) to 40% and 20%
  • They are also proposing that the number of types of compliance requirements be reduced from the current 14 types of compliance requirements to six types
  • The questioned cost threshold for reporting will be increased from $10,000 to $25,000

For the complete proposed guidance, go to the following website: https://www.federalregister.gov/articles/2013/02/01/2013-02113/reform-of-federal-policies We will keep you advised of this proposed guidance on future blogs.

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Founded in 1953, Green Hasson Janks is a Los Angeles-based accounting firm that specializes in nonprofit, food and beverage, entertainment and media and health and wellness companies. Recipient of the Los Angeles Chamber of Commerce 2018 Employee Champion For Life Work Harmony Award and named a…Learn More