|Dear Center Members:
|On May 12, 2022, the U.S. Office of Management and Budget (OMB) released the 2022 OMB Compliance Supplement (Supplement). After reading this GAQC Alert you will be aware of the following:
- The effective date and how to access the 2022 Supplement;
- Key changes and updates made in the 2022 Supplement, including those related to the ongoing implications of the COVID-19 pandemic on single audits and the continued identification of certain programs as "higher risk;"
- OMB plans for future Addendums to the 2022 Supplement; and
- How to learn more, including registration information for an upcoming GAQC Web event on the 2022 Supplement to be held on June 9, 2022.
|Effective Date and Access
The 2022 Supplement is effective for audits of fiscal years beginning after June 30, 2021. It is available on the OMB Web site as one large PDF file. As a public service, the GAQC is currently working to post it on the GAQC Web site by individual section, along with GAQC pointers and observations. We will send a follow-up GAQC Alert when it is available.
Key Changes and Updates
Auditors should refer to Appendix V, List of Changes for the 2022 Compliance Supplement, to get a high-level overview of the detailed changes made. Appendix V identifies specific programmatic changes by Assistance Listing number and should be one of the first things you review. The following describes some of the key changes and updates that you should be aware of:
Part 2, Matrix of Compliance Requirements. Applicable requirements for several programs have been modified this year. Where there have been changes, Part 2 states that it identifies those requirements in the matrix in bold and yellow highlighting. The 6-requirement mandate and its related rules and exceptions continue for 2022. In addition, new programs previously added in Addendums 1 and 2 to the 2021 Supplement have been identified with one and two asterisks, respectively.
Programmatic Changes. There are several program additions and deletions in Part 4, as well as many programs with significant changes. New program sections added this year are as follows:
Note that SVOG has been in existence for well over a year now, but this is the first year that it was included in the Supplement. As a result, a note was added at the top of this program section emphasizing there is nothing to preclude an auditor from using this 2022 Supplement section as a resource when developing the audit approach in a single audit subject to the 2021 Supplement (in conjunction with the use of Part 7 of the Supplement). However, it goes on to state there is also no requirement or expectation that auditors refer to or use this 2022 Supplement section for auditing this program for periods subject to the 2021 Supplement.
- 14.888 - Lead-Based Paint Capital Fund Program and Housing-Related Hazards Capital Fund
- 21.023 - Emergency Rental Assistance Program (ERA)
- 21.026 - Homeowner Assistance Fund Program
- 21.029 - Coronavirus Capital Projects Fund
- 32.009 - Emergency Connectivity Fund Program
- 59.075 - Shuttered Venue Operators Grant (SVOG)
- 93.671 - Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services
Key Changes in Certain Programs. The following describe certain programmatic changes in several programs:
Part 5, Student Financial Assistance Cluster. This program has several changes, clarifications, and updates for 2022 to reflect regulatory changes and other updates. These changes relate primarily to various Special Tests and Provisions such as Disbursements to or on Behalf of Students, Return of Title IV Funds, Enrollment Reporting, Program Eligibility, and Distance Education.
- Education Stabilization Fund (ESF). ESF is once again identified as a higher risk program and continues to be broken down into two sections covering the various ESF subprograms. The following new subprograms were added/moved to the ESF program section:
- Section 1 added the American Rescue Plan - Emergency Assistance to Non-Public Schools (ARP EANS) Program (84.425V).
- Section 2 added The Higher Education Emergency Relief Fund (HEERF) Supplemental Support Under American Rescue Plan (SSARP) Program (84.425T).
Regulatory changes and other updates have also been made throughout the ESF section. Section 2 also has identified the Cash Management type of compliance requirement as subject to audit for the first time.
- The Institutional Resilience and Expanded Postsecondary Opportunity (HEERF IREPO) (84.425P) was moved to Section 2, whereas it was included in the listing of programs not included in either sections 1 or 2 in the prior year.
- Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). This program is identified as a higher risk program and updates were made to revise the section for the CSLFRF Final Rule. Among other updates, the section includes the changes announced in the recent Technical Update to the 2021 Supplement which introduced an alternative compliance examination engagement for certain recipients. See GAQC Alert #439 for more information on this Technical Update.
- SVOG. As noted earlier, the 2022 Supplement includes a new section for the SVOG program. This Supplement section states that it is to be used for audits of non-federal entities with SVOG funding. However, for-profit entities and their auditors should be aware that the Small Business Administration will soon be issuing separate audit requirements and guidance for audits of for-profit entities with SVOG funding which will be posted upon completion at: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/shuttered-venue-operators-grant/manage-your-svog-grant. Watch for future GAQC Alerts with updates on the for-profit SVOG developments.
- Provider Relief Fund. The formal title of this program was revised to "Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution" (referred to herein as PRF) and it continues to be identified as a higher risk program. It also adds information and requirements for funding provided to this program from the ARP Act. The "Other Information" section of the program removes the previous Special Tests and Provisions requirement (as per the recently issued Technical Update – see GAQC Alert #439) and clarifies the amount of PRF expenditures and lost revenue to be reported on the schedule of expenditures of federal awards and the timing of when such expenditures and lost revenue are to be reported for Period 5 PRF payments.
- Many other programs were updated related to COVID-19 funding and to reflect provisions from the ARP Act.
Part 5, Other Clusters. There were several changes made to the Other Clusters listing this year, including the following:
Appendix IV, Internal Reference Tables. This section of the 2022 Supplement identifies higher risk programs and has been updated to include a complete list of programs with the higher risk designation. The list includes all programs identified in the 2021 Supplement as higher risk except for the Coronavirus Relief Fund program, which has been removed from the list. Additionally, rather than referring auditors to a separate list to identify programs established by the ARP Act that are higher risk (which was the approach taken in the 2021 Supplement), OMB now just lists the specific ARP programs that are higher risk in this Appendix. The Appendix also explains the meaning of the higher risk designation in a similar manner to the 2021 Supplement which is critical for auditors to understand as it has major program determination implications. Finally, the section now identifies which of the higher risk programs are 100% COVID-19 funding which is an important distinction in determining whether a higher risk program should be audited in the current year.
- The Child Nutrition Cluster was updated to include the Fresh Fruit and Vegetable Program (FFVP) (10.582) and to remove the Child Nutrition Discretionary Grants Limited Availability program (10.579).
- Local Veterans' Employment Representative (LVER) Program (17.804) was removed from the Employment Service Cluster.
- The following programs, noted by Assistance Listing, were removed from the Highway Safety Cluster: 20.601, 20.602, 20.609, 20.610, 20.612, and 20.613.
Appendix VII – Other Audit Advisories. Most of the content of this Appendix is the same or very similar to the prior year. Change areas include the following:
- Identification of Compliance Requirements COVID-19-Related Awards. The guidance in this section has been scaled back primarily because the previous content was no longer relevant as federal agencies have now had sufficient time to make sure the compliance areas they select as subject to audit align with their regulations, frequently asked questions, and other agency guidance.
- Alternative Compliance Examination Engagement for Eligible CSLFRF Recipients. The Appendix emphasizes that the use of an alternative compliance examination in accordance with Government Auditing Standards (and the AICPA attestation standards) is authorized for certain eligible CLSFRF recipients in addition to the general options of single audit or program-specific audit. The alternative examination option was added with the goal to reduce the burden on the eligible CSLFRF recipients and their auditors.
- Federal Audit Clearinghouse Transition from Census to the General Services Administration. The Appendix includes information on the upcoming Federal Audit Clearinghouse (FAC) transition from Census to the General Services Administration (GSA). It explains that the Census FAC will accept single audits for fiscal years in 2021 and that GSA will begin accepting fiscal year 2022 submissions on October 1, 2022. Guidance is also included for how the single audit submission deadline is to be addressed for fiscal year 2022 audits that are completed prior to the new GSA portal being available.
The OMB has told the GAQC that there will not be an Addendum to the 2022 Supplement. Instead, any new programs that are established as a result of the Infrastructure Investment and Jobs Act will be included in the 2023 Supplement.
How to Learn More
The GAQC team will continue to analyze the new Supplement over the coming weeks and communicate any developments. Further, a GAQC Web event, 2022 Compliance Supplement and Single Audit Update, will be held on June 9, 2022, from 1:00 PM – 3:00 PM (Eastern Time). See GAQC Alert #440 for more about this event. We strongly recommend you and your staff view this event to help you more fully understand the changes made in the 2022 Supplement. The following includes registration information:
GAQC Member Registration with CPE (fee). Access the member CPE registration page.
GAQC Member Registration with no-CPE (free). Access the member no-CPE registration page.
Public Registration with CPE (fee) (to share with your clients if they are interested in learning what will be important to auditors). Access the public CPE registration page.
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AICPA Governmental Audit Quality Center
|In This Alert
|SLG Audit Planning Event
|It is not too late to register for the next live GAQC Web event, 2022 State and Local Government Audit Planning Considerations, to be held on Thursday, May 19, 2022, from 1:00 PM – 3:00 PM (Eastern Time). Read GAQC Alert #440 for registration information.
We welcome any suggestions or questions - please send them by e-mail at GAQC@aicpa.org.
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