2022 Compliance Supplement for Single Audits
On May 12, 2022, the OMB (United States Office of Management and Budget) issued the 2022 Compliance Supplement for Single Audits. So, what exactly does that mean?
This supplement includes all the COVID-19 related grant revenues, which covers the billions of dollars distributed from various programs such as CSLFRF, Provider Relief, Coronavirus Relief, and many others. This is by far the largest number of federal programs issued in history! Since these programs have affected many various organizations for the first time, we highly encourage all organizations to review this supplement in detail so you don’t miss any compliance requirements that will be reviewed during your Single Audit.
The OMB has automatically identified all COVID related funding to be “high risk”, which means it will be highly likely your COVID funded program will be tested as part of your Single Audit. The official guidance for the 2022 Compliance Supplement can be found here.
Alternative to Single Audits: Supplemental Technical Update
Because this might be the first time an agency received enough federal funds to qualify for a Single Audit the OMB has issued a Supplemental Technical Update in April 2022, which provides an alternative to the Single Audit for some specific agencies.
This alternative allows for certain recipients to engage in a compliance examination engagement instead of a Single Audit. Some key eligible requirements include, revenues received from the CSLFRF program and expended $750,00 or more during the fiscal year, which meet both criteria below:
- The agency’s total CSLFRF allocation received was directly from Treasury OR as a non-entitlement unit of local government is below the $10 million revenue loss standard allowance; AND
- Other Federal expenditures not from CSLFRF allocation in 1. Above are less than $750,000 during the agency’s fiscal year.
Some benefits of engaging in the alternative compliance examination engagement would be the narrow scope compliance requirements. They would be more focused on the ‘Activities Allowed’ or ‘Unallowed/Allowable Costs’ and ‘Cost Principles’, rather than the other five or more compliance requirements. In addition, the financial statements timing would not apply as it does with the Single Audit, so you don’t need to worry about finalizing the financial statement before or with the examination report. It is not required. This alternative would provide an examination opinion on compliance.
If you feel like this might be an option for your agency, we encourage you to reach out to your auditors to discuss this under the technical bulletin found here.