The OMB Compliance Supplement (the Supplement) is issued annually by the Office of Management and Budget; the latest one was issued on May 11, 2022 (with an April 2022 date). It is used to test Single Audit compliance for entities that have fiscal year-ends of June 30, 2022, and thereafter.
Every year, OMB updates the Compliance Supplement for new and deleted federal programs and makes changes to existing programs as requested by other federal agencies. The supplement can be accessed here.
Annually, there are always changes to the Part 2 Matrix of Compliance Requirements as each federal agency can dictate what compliance requirements will be subject to audit. These changes for 2022 are highlighted in yellow in the actual section. A few years ago, it was mandated that only six of the 12 requirements be subject to audit, with Activities Allowed and Allowable Costs considered one requirement. That mandate, with its related rules and regulations, is still in effect.
In Part 4 this year, several new programs were added to the Supplement. Approximately 50 have significant changes to program objectives and related suggested audit procedures. The programs previously included in the 2021 addenda are also included in Part 4. The new programs that were added for 2022 are:
- 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
Higher Risk Programs
Following is a complete list of programs with COVID-19 funding that have been identified as “higher risk” for audits subject to the 2022 Compliance Supplement.
|Agency ||Assistance Listing Number ||Title |
|Education* ||84.425 ||Education Stabilization Fund |
|FCC* ||32.009 ||Emergency Connectivity Fund Program |
|HHS* ||93.461 ||Testing for the Uninsured |
|HHS* ||93.498 ||Provider Relief Fund |
|HHS** ||93.778/93.777/93.775 ||Medicaid Cluster |
|Transportation** ||20.106 ||Airport Improvement Program |
|Transportation** ||20.500/20.507/20.525/20.526 ||Federal Transit Cluster |
|Transportation** ||20.315 ||National Railroad Passenger Corporation |
|Treasury* ||21.023 ||Emergency Rental Assistance |
|Treasury* ||21.027 ||Coronavirus State and Local Fiscal |
| ||Recovery Funds |
* Programs created by one of the COVID-19 Acts and thus considered 100% COVID-19 funding.
** Existing programs that received additional funding from one or more of the COVID-19 Acts.
A “higher risk” designation often results in a program or other cluster being audited. However, an auditor is not precluded from determining that a higher risk program or other cluster qualifies as low risk. Your tax and audit advisor can help you determine if you qualify.
Key Changes to Some Significant Programs
Shuttered Venue Operators Grant (SVOG)
Although the SVOG program was in existence for more than a year, it is now included in this Supplement for the first time. Auditors will only need to use this guidance in Part 4 for audits of organizations that have year-ends for June 30, 2022, and thereafter. However, an auditor may use it as a resource when developing the audit approach for organizations that are subject to a Single Audit under the 2021 compliance supplement, i.e., an organization with a fiscal year-end prior to June 30, 2022.
Provider Relief Fund
The recently renamed Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution continues to be designated as a higher risk program. PRF provides relief funds to eligible providers of health care services and support for healthcare-related expenses or lost revenues attributable to the coronavirus. ARP Rural Distribution addresses the disproportionate impact that COVID-19 has had on rural communities and rural health care providers. Revisions were made to this program to reflect the ARP Act, and the Special Test that was in the 2021 Supplement is no longer subject to audit in the 2022 supplement.
Education Stabilization Fund (ESF)
The Education Stabilization Fund continues to be broken down into 23 subprograms. Each subprogram has its own funding and compliance requirements, including a section focusing on elementary and secondary education and now the Emergency Assistance to Non-Public Schools Program, 84.425.
Section 2 is primarily for higher education and contains ten subprograms. Section 2 is now the Institutional Resilience and Expanded Postsecondary Opportunity, 84.425P.
Four subprograms are neither section 1 nor 2. For these four subprograms, auditors must utilize the guidance in Part 7 of the Compliance Supplement, “Guidance for Auditing Programs Not Included in this Compliance Supplement.”
Student Financial Assistance Cluster
This program continues to have significant changes over the past several years. The changes for the 2022 Compliance Supplement are primarily in the various Special Tests.
Several changes were made to the Other Clusters listing in the 2022 Compliance Supplement, including the Child Nutrition Cluster, Employment Service Cluster, and Highway Safety Cluster.
Coronavirus State and Local Fiscal Recovery Funds (CSLFRF)
This is a $350 billion U.S. Treasury program that was first included in Addendum 1 to the 2021 Supplement and is now in the 2022 Compliance Supplement. Therefore, it is imperative to use the correct Supplement as various changes were made for this program in the 2022 Compliance Supplement.
This program has resulted in numerous small entities having a Single Audit for the first time. Therefore, an alternative to a full Single Audit or program-specific audit was explicitly developed for this program.
The alternative engagement is a compliance examination that is performed per the AICPA Statements on Standards for Attestation Engagements (i.e., AT-C section 315, Compliance Attestation) and Government Auditing Standards. The engagement will focus on two narrowly scoped compliance requirements related to Activities Allowed and Unallowed and Allowable Cost/Cost Principles.
This alternative is only available to certain eligible recipients:
CSLFRF recipients that expend $750,000 or more in federal awards during the recipient’s fiscal year and who meet both criteria listed below have the option to follow the alternative CSLFRF compliance examination engagement:
- The recipient’s total CSLFRF award received directly from Treasury or received (through states) as a non-entitlement unit of local government is at or below $10 million; and
- Other federal award funds the recipient expended (not including their CSLFRF award funds) are less than $750,000 during the recipient’s fiscal year.
If Single Audits are new to you or if you want to know more about how recipients of federal awards can utilize the Compliance Supplement to prepare for an upcoming Single Audit, see “How to Find Out If You Are Subject to a Single Audit”. If you would like to consult with a professional about this topic, please contact us.
Published on June 20, 2022