OMB Releases 2016 Compliance Supplement

The Office of Management and Budget (OMB) released the 2016 Compliance Supplement (2016 Supplement), effective for audits of federal awards for fiscal years beginning after June 30, 2015. Although last year yielded significant changes for federal award recipients undergoing single audits and audit firms implementing the Uniform Guidance for the first time, there are a few key additions and revisions in the 2016 Supplement that warrant attention. Getting in front of these changes and determining their impact to your organization or audit should ensure a smoother audit for both sides. The more significant changes are as follows:

  1. Uniform Guidance (2 CFR part 200)/Circular A-133: Since the Uniform Guidance went into effect for fiscal years beginning on or after December 26,2014, the 2016 Supplement removed many references to Circulars that no longer apply.
  2. Should vs. Must: Further revisions were made in the 2016 Supplement, as appropriate, to ensure the terms “should” and “must” are used consistently. The distinction has large implications. Per Part 1 of the 2016 Supplement, “the word ‘must,’ when used in conjunction with auditor responsibilities, means that the auditor is required to do what the statement indicates. Use of the term ‘should,’ when addressing auditor responsibilities, indicates a recommended action or approach.”
  3. Internal Controls: Part 6 was added back to the 2016 Supplement, and incorporates the 2013 updates to the COSO framework and the 2014 updates to the Green Book.
  4. Form SF-SAC and Single Audit Submissions: The data collection form has been modified to conform to the Uniform Guidance and is now required to be submitted to the Federal Audit Clearinghouse (FAC) through the Internet Data Entry System. Additional changes are highlighted in Appendix V – List of Changes for the 2016 Compliance Supplement.
Amy Knell
Amy Knell | Manager