Audits
of Institutions of Higher Education
and Other Non-Profit Institutions
AGENCY:
Office of Management and Budget
ACTION:
Final Revision of OMB Circular A-133, "Audits of Institutions of
Higher Education and Other Non-Profit Institutions"
SUMMARY:
This revision of Office of Management and Budget (OMB) Circular A-133
establishes a uniform system of auditing for institutions of higher
education and other non-profit organizations. One of the more significant
revisions is that the threshold for when an entity is required to
have an audit is raised from $25,000 to $300,000. This will significantly
reduce audit costs for many small non-profit organizations. Other
significant changes are: additional guidance for program-specific
audits (§___.235), audit findings (§___.510), and audit
findings follow-up (§___.315); a report submission due date which
is shortened from 13 to 9 months and a report submission process that
includes a certification form and streamlined filing requirements
(§___.320); and, a new risk-based approach for major program
determination (§___.520).
DATES:
The standards set forth in §___.400 of the Attachment to this
Circular, which apply directly to Federal agencies, shall be effective
July 1, 1996, and shall apply to audits of fiscal years ending on
or after June 30, 1997. The standards set forth in this Circular
that Federal agencies are to apply to non-profit organizations shall
be adopted by Federal agencies in codified regulations not later
than November 30, 1996, so that they will apply to audits of fiscal
years ending on or after June 30, 1997, with the exception that
§___.305(b) of the Attachment applies to audits of fiscal years
ending on or after June 30, 1999.
ADDRESSES:
A copy of the Circular may be obtained from the OMB fax information
line, 202-395-9068, document number 1133; OMB home page on the internet
which is currently located at /OMB; or by writing or calling the
Office of Administration, Publications Office, room 2200, New Executive
Office Building, Washington, DC 20503, telephone (202) 395-7332.
FOR
FURTHER INFORMATION CONTACT: Recipients should contact their
cognizant or oversight agency for audit, or Federal awarding agency,
as may be appropriate in the circumstances. Subrecipients should
contact their pass-through entity. Federal agencies should contact
Sheila O. Conley, Office of Management and Budget, Office of Federal
Financial Management, Financial Standards and Reporting Branch,
telephone (202) 395-3993, fax (202) 395-4915.
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SUPPLEMENTARY
INFORMATION
A.
Background
The Office
of Management and Budget (OMB) received approximately 150 letters
providing approximately 1600 individual comments in response to the
Federal Register proposal of March 17, 1995 (60 FR 14594-14606). Letters
came from Federal agencies (including Offices of Inspectors General),
State governments (including State auditors), certified public accountants
(CPAs), internal auditors, non-profit organizations (including colleges
and universities), professional organizations, and others. All comments
were considered in developing this final revision.
Section
B presents a summary of the major public comments grouped by subject
and a response to each comment. Other changes were made to increase
clarity and readability.
B.
Public Comments and Responses
Common
Rule Format
Comment:
Several commenters suggested that the implementation of the Circular
be done using the "common rule" format so that all affected Federal
agencies could codify the provisions of the Circular without change
and prior to the effective date.
Response:
Circular A-133 was reformatted to facilitate codification by Federal
agencies.
Uniform
Audit Requirements
Comment:
In the preamble of the proposed revision, OMB stated a plan to seek
modifications to the Single Audit Act of 1984 (31 U.S.C. Chapter 75)
and OMB Circular No. A-128, "Audits of State and Local Governments,"
such that one law and one circular could cover both State and local
governments and non-profit organizations. Commenters strongly supported
this change.
Responses:
Even though Circular A-133 does not apply to State and local governments,
provisions were made to easily adapt Circular A-133 to include State
and local governments if the Single Audit Act is amended. For example,
changes were made to the risk-based approach to determine major
programs for circumstances that most likely will only occur in large
State-wide single audits.
Increased
Threshold for Audit
Comment:
Commenters overwhelmingly supported raising the threshold for audit,
with the majority supporting the proposed threshold of $300,000. A
common statement in favor of this change was that it would reduce
audit costs, while still providing adequate audit coverage of Federal
programs.
Response:
This final revision raises the audit threshold to $300,000. Pass-through
entities should make appropriate changes in their agreements with
subrecipients to reflect that Circular A-133 no longer requires
an audit for entities expending less than the $300,000 threshold.
Also, pass-through entities will need to consider this change, review
their overall subrecipient monitoring process, and decide what,
if any, additional monitoring procedures may be necessary to ensure
subrecipient compliance for the subrecipients not required to have
a Circular A-133 audit. It is expected these monitoring procedures
could be more targeted and less costly than the full Circular A-133
audit.
Special
Provision for Certain Small Subrecipients
Comment:
Most commenters opposed the provision to allow Federal agencies to
require pass-through entities to arrange for audits of subrecipients
receiving less than the $300,000. A reason often cited was that this
provision defeats the purpose of raising the audit threshold.
Response:
This provision was included in the proposed revision to provide
audit coverage of Federal programs, such as the Job Training Partnership
Act (JTPA) programs, which are structured such that substantial
service delivery and expenditure of Federal funds are made by subrecipients
that expend less than $300,000 in Federal awards.
The
provision has not been added to the Circular. However, it is important
to note that both the pass-through entity and the pass-through entity's
auditor have responsibilities for these funds even when an audit
of the subrecipient is not required. The pass-through entity is
still responsible to monitor the activities of the subrecipient
and ensure that Federal awards are only used for authorized purposes.
Additional monitoring procedures may be necessary when a material
amount of program funds is passed through to subrecipients which
are not audited.
The
pass-through entity's auditor is responsible for performing sufficient
tests to support an opinion on compliance for each major program.
When subrecipients which are not audited expend a material amount
of funds from a major program, the auditor will need to consider
obtaining compliance assurances by reviewing the pass-through entity's
records and monitoring procedures, performing additional procedures
to determine compliance, such as testing the subrecipient's records,
or a combination of procedures. In addition, the pass-through entity's
auditor is responsible for determining whether the pass-through
entity's system for monitoring subrecipients is adequate and whether
subrecipient noncompliance necessitates adjustment of the pass-through
entity's records.
Consideration
of Triennial Audit
Comment:
In the preamble of the proposed revision, OMB stated it was considering
a triennial audit approach and requested comments on its feasibility.
Commenters from non-profit organizations supported a triennial audit
approach. Reasons cited were relief of audit burden and a reduction
in the number of audits required to be reviewed as part of subrecipient
monitoring.
However,
Federal agency commenters were opposed to a triennial audit approach
and cited problems, such as it would alert the non-profit organization
in advance of which years should be audited, significantly complicate
the risk-based approach for selecting major programs (e.g., under
the risk-based approach a large program is only required to be audited
once every three years and with triennial audits this could be once
in every nine years), and result in only limited cost savings (e.g.,
under the triennial audit approach a financial statement audit and
testing of internal control would still be required).
Response:
The triennial audit approach was not added to the Circular. However,
the Circular does provide significant audit relief to non-profit
organizations by raising the audit threshold from $25,000 to $300,000,
allowing a risk-based approach to selecting major programs, and
streamlining the report distribution process by use of a certification
form. The risk-based approach will permit low-risk non-profit organizations
to reduce the percentage of Federal expenditures required to be
covered as major programs. The certification form, as discussed
later in this supplementary information, will simplify the pass-through
entity's review of subrecipient reports which have no audit findings.
Risk-Based
Approach to Determine Major Programs
Comment:
Except for comments from CPAs, the commenters supported the risk-based
approach as presented. CPA commenters opposed the risk-based approach
and cited as reasons that it was inappropriate for the auditor to
determine major programs, there could be problems in submitting a
proposal to conduct a Circular A-133 audit when it is not known in
advance which programs will be audited, and there would possibly be
cost increases for the auditor to perform risk assessments. While
State auditor commenters supported the risk-based approach, those
from the larger States cited implementation problems in performing
risk assessments on a large number of Type B programs.
Response:
The auditor is best suited to determine major programs for reasons,
such as independence and the understanding of risk to Federal programs
obtained as part of the audit. Therefore, the proposal has been
adopted, with no changes made to the requirement for the auditor
to determine major programs. However, in recognition of the concerns
expressed relative to larger audits, Appendix 1 (§___.520),
Major Program Determination, was modified as follows:
Step
1 (§___.520(b)(1)) was modified to provide a sliding scale
in determining Type A programs. This change only affects auditees
with Federal expenditures over $100 million.
Step
2 (§___.520(c)(2)) was modified to permit a Federal agency,
with OMB approval, to designate that a low-risk Type A program could
not be considered low-risk. This designation could be for reasons,
such as to help the Federal agency comply with Section 405 of the
Government Management Reform Act (P.L. 103-356).
Step
3 (§___.520(d)(2)) was modified to add a sliding scale which
defines relatively small Federal programs in terms of a percentage
of total Federal expenditures. This benefits very large audits by
reducing the number of Type B programs for which the auditor must
perform risk assessments. The decrease in the total amount of Federal
expenditures subject to audit will be relatively small because of
the wide difference in size between the largest and smallest Federal
programs.
Step
4 (§___.520(e)) was modified to only require one-half of the
high-risk Type B programs to be audited as major and provide a limit
that the number of these Type B programs audited as major need not
exceed the number of low-risk Type A programs.
However,
should the auditor choose not to exclude a low-risk Type A program,
this would not affect the limit. The limit is on the number of low-risk
Type A programs, not the number excluded. Also, even though larger
dollar Type A programs may be excluded as low-risk, they may still
need to be audited to meet the 50 percent rule.
To
mitigate any implementation problems with the risk-based approach,
the provision for deviation from use of risk criteria provided in
§___.520(i) applies to the first year this Circular is applicable
and permits auditors to defer implementation of the risk-based approach
for one year.
Implementation
of the Risk-Based Approach
to Determining Major Programs
Comment:
A commenter inquired whether a Type A program may be considered low-risk
when it was audited as a major program in accordance with the prior
Circular A-133, issued March 8, 1990, and otherwise met the criteria
in Appendix 1, step 2 to be classified as low-risk.
Response:
The reference in Appendix 1, step 2 (§___.520(c)(1)) to the
two most recent audit periods means audit periods in which the audit
was performed either under the prior Circular A-133 or this revision.
Therefore, a Type A program which meets the Appendix 1, step 2 (§___.520(c)(1))
criteria for low-risk based on the results of an audit performed
in accordance with the prior Circular A-133 may be considered low-risk.
Similarly, the reference in the criteria for a low-risk auditee
in Appendix 3 (§___.530) to the preceding two years applies
to audits performed either under the prior Circular A-133 or this
revision.
Request
for a Program to be Audited
as a Major Program
Comment:
Several commenters expressed concern that the provision for a Federal
agency or pass-through entity to request a program to be audited as
a major program would significantly increase the work required for
single audits and requested that it be removed. A few commenters also
expressed concern that these programs would not count towards meeting
the 50 percent rule.
Response:
This provision has been adopted; however, a change was made to allow
programs audited as major under this process to count towards meeting
the 50 percent rule. This process does not significantly change
the authority Federal agencies and pass-through entities now have
to perform additional audits as long as they pay for them. The addition
is that these audits may be incorporated within the framework of
the single audit and thereby eliminate duplicative audit planning
and reporting. Since the Federal agency or pass-through entity must
still pay the full incremental audit cost, OMB does not expect a
significant increase in major programs from this provision.
It
should be pointed out that any Type A program selected to be audited
under this provision must be low-risk. If it were not low-risk,
it would have been audited as a major program under the risk-based
approach. Therefore, this provision will not reduce the number of
high-risk Type B programs audited as major.
Required
Level of Internal Control Testing
Comment:
All CPA commenters and over half of the State auditor commenters opposed
the proposed requirement for the auditor to plan the testing of internal
control over Federal programs to achieve a low assessed level of control
risk. Concerns included that it increases the amount of audit work,
limits auditor's judgment, and is arbitrary. By contrast, one commenter
stated support for the proposed requirement because it would force
the auditor to look at internal control over Federal programs and
to note reportable conditions when internal control is not adequate.
Response:
The proposal has been adopted, with no changes. Some commenters
appeared to understand this provision to mean that, when control
exceptions are found, the auditor is required to continue testing
until a low level of risk is achieved. This is not the case. The
auditor is not required to expand testing to try to achieve a low
level of risk. The auditor is only required to plan the audit for
a low level of assessed risk and report the results of this testing.
It
has been a longstanding Federal policy that the recipient of Federal
funds is required to establish internal control systems to provide
reasonable assurance that it is managing Federal funds in compliance
with applicable laws and regulations. Also, the Single Audit Act
(31 U.S.C. Chapter 75) requires the auditor to test internal control
over Federal funds subject to that Act. Therefore, it is reasonable
to require the auditor to plan the audit consistent with the level
of internal control the recipient of Federal funds is required to
maintain. Also, the Circular permits the auditor to not test internal
controls which are inadequate and instead disclose a reportable
condition or material weakness and perform additional tests of compliance
as necessary in the auditor's judgment.
Schedule
of Expenditures of Federal Awards
Comment:
Most commenters supported the level of detail included in the proposal
for the schedule of expenditures of Federal awards. One commenter
suggested that it would be beneficial for pass-through entities to
identify in the schedule the amount passed-through to subrecipients.
This disclosure would tell program managers the amount of program
expenditures that was subject to audit at the pass-through entity
level.
Response:
A provision has been added to encourage, but not require, pass-through
entities to disclose in the schedule the total amount provided to
subrecipients from each Type A program and from each Type B program
which is audited as a major program. In most cases this information
should be readily available and would improve the usefulness of
the schedule.
Attestation
on Internal Control and Compliance
Comment:
The preamble to the proposed revision requested comments as to whether
a requirement should be added for the audits to include a management
assertion and auditor attestation for internal control or compliance.
The majority of commenters were opposed to this change because it
would impose additional requirements on entity management and increase
audit cost.
Response:
In light of the concerns raised, this proposed revision has not
been added to the Circular.
Criteria
for Reporting Questioned Costs
Comment:
Commenters' views on the proposed $10,000 threshold for reporting
known or likely questioned costs varied from describing it as too
high, too low, or just right. Commenters expressed concern that the
concept of likely questioned costs needed further clarification.
Response:
OMB believes that the $10,000 threshold for reporting questioned
costs provides the appropriate balance between reporting all questioned
costs and only reporting large questioned costs. Also, audit findings
which do not result in questioned costs but are material to the
types of compliance requirements or an audit objective in the compliance
supplements will still be reported as reportable conditions under
§___.510(a)(1) or material noncompliance under §___.510(a)(2).
Generally
accepted auditing standards require the auditor to project the amount
of known questioned costs identified in the sample to the items
in the major program and to consider the best estimate of total
questioned costs (both known and likely) in determining an opinion
on compliance. The Circular does not require the auditor to report
an exact amount or statistical projection of likely questioned costs,
but rather to include an audit finding when the auditor's extrapolation
of these likely questioned costs is greater than $10,000.
Since
the requirement for the auditor to consider likely questioned costs
is not new, and since likely questioned costs which are greater
than $10,000 may be significant to a Federal program, OMB believes
they should be included in audit findings. In reporting likely questioned
costs, it is important that the auditor follows the requirements
of §___.510(b) and provides appropriate information for judging
the prevalence and consequences of the audit finding.
Requirement
to Follow up on Prior Audit Findings
Comment:
One commenter expressed concern that the requirement for the summary
schedule of prior audit findings to include audit findings from before
the prior year may result in many old audit findings being reported
year after year.
Response:
As a practical matter, unless an audit finding is repeated in a
subsequent year, there is limited value in continuing to follow
up on an audit finding when the Federal agency or pass-through entity
chooses to take no action. Therefore, a provision has been added
stating that a valid reason for considering an audit finding as
not warranting further action is that: (a) two years have passed
since the audit report was filed with the central clearinghouse
designated by OMB, (b) the Federal agency or pass-through entity
is not currently following up on the audit finding, and (c) a management
decision was not issued.
Also,
for the first year the entity is audited under this Circular, the
prior year report may not have included the equivalent of a summary
schedule of prior audit findings. In these cases, the auditee may
exercise judgment and only include, to the extent practical, audit
findings before the prior year.
Corrective
Action Plan
Comment:
Some college and university commenters expressed concern that the
requirement to list the name of the contact person responsible for
corrective action precluded a non-profit organization from naming
one person responsible for all audit findings.
Response:
The proposal has been adopted, with no changes. Some commenters
appeared to misunderstand this provision. It is important that a
non-profit organization name a contact person or persons to be responsible
for corrective action. However, contrary to the commenters' understanding,
the non-profit organization has discretion to determine whether
one person should be responsible for all or a group of audit findings
or whether a separate person should be responsible for each audit
finding.
Pass-Through
Entity's Responsibility
for Subrecipient Audit
Comment:
A few commenters expressed concern that, unless the pass-through entity
gave the subrecipient $300,000, it would be difficult to determine
whether the subrecipient was required to have an audit under the Circular.
Specifically, the commenters asked for guidance on how the pass-through
entity could determine if the subrecipient received other Federal
awards which cumulatively added up to the $300,000 threshold for audit.
Response:
This provision has been adopted, with no changes. There was no intention
that this provision require the pass-through entity to perform extensive
verification procedures to determine the total Federal expenditures
of a subrecipient. OMB expects that, in many cases, the pass-through
entity will have knowledge of the subrecipient sufficient to estimate
the subrecipient's total Federal expenditures. Another technique
would be for the pass-through entity to clearly explain the audit
requirements to the subrecipient and then ask the subrecipient the
amount of its total Federal expenditures.
Audit
Cognizance
Comment:
Some college and university commenters expressed concern that the
cognizant agency determination was not consistent with the proposed
revision to OMB Circular A-21, "Cost Principles for Educational Institutions"
(60 FR 7105; February 6, 1995), and could result in an entity having
one cognizant agency for audit purposes and another for indirect cost
rate negotiation.
Response:
The responsibilities for audit cognizance and indirect cost negotiation
are different and, therefore, the same Federal agency does not need
to be cognizant for both. The name for the cognizant agency has
been changed to the cognizant agency for audit to clearly distinguish
it from the cognizant agency for indirect cost rate negotiation.
Provision
for Small and Minority Audit Firms
Comment:
One commenter expressed concern that the provision for small and minority
audit firms was proposed for deletion.
Response:
As explained in the preamble to the proposed revision, this provision
was proposed to be deleted because the requirements related to small
and minority audit firms are more fully covered in §___.44(b)(4)
of OMB Circular A-110, "Uniform Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations" (58 FR 62992; November 29, 1993). There was no intention
to change or diminish the requirements for using small and minority
audit firms. To ensure that these requirements continue to receive
consideration, a provision has been added to the auditor selection
paragraph that, whenever possible in procuring audit services, non-profit
organizations shall make positive efforts to utilize small businesses,
minority-owned firms, and women's business enterprises, as stated
in OMB Circular A-110.
Restriction
on Auditor also Preparing
Indirect Cost Proposal
Comment:
The preamble to the proposed revision requested comments on whether
the auditor should also be permitted to prepare the indirect cost
proposal (including similar documents, such as the cost allocation
plan, or the disclosure statement required by OMB Circular A-21).
All Federal agency commenters and most State auditor commenters cited
at least an appearance of lack of independence when the same auditor
both performed the audit and prepared the indirect cost proposal.
One Federal agency commenter stated, "In preparing the indirect cost
proposal, the auditor is an advocate for the client before the Federal
Government. We believe it stretches the bounds of standards for the
auditor to be considered independent to audit this same indirect cost
proposal for the purpose of providing assurances to the Federal Government."
In contrast, CPAs and non-profit organizations did not see an independence
problem and stated there were significant efficiency advantages for
the same firm to both perform the audit and prepare the indirect cost
proposal.
Response:
A provision (§___.305(b)) has been added to preclude the same
auditor from preparing the indirect cost proposal or cost allocation
plan when indirect costs exceeded $1 million in the prior year.
This threshold was chosen to limit this restriction to a relatively
small number of entities, while still protecting the Federal interest.
The prior year was chosen because non-profit organizations often
engage the auditor before the end of the year and at this time it
may be unknown whether the current year's indirect costs will exceed
the $1 million threshold. Based on available data, OMB estimates
that entities with indirect costs exceeding $1 million cumulatively
receive approximately 90 percent of the total indirect costs charged
by non-profit organizations.
This
restriction applies to the base year from which financial data is
used to compute the rates even though the audit of the base year
financial statements is often completed before the indirect cost
proposal or cost allocation plan is prepared. The base year was
included to enhance the appearance of independence to the Federal
agencies which rely upon the auditor's testing of information used
in both the calculation and application of indirect cost rates.
The
disclosure statements required by OMB Circular A-21 have been excluded
from this restriction because the disclosure statement is new, many
of the statements will be submitted before the effective date of
this Circular A-133 revision, and the disclosure statements are
expected to have a long life. Under these circumstances, it does
not seem appropriate public policy to restrict auditors who prepared
the original disclosure statements from performing the audit for
a long period of time. Therefore, the disclosure statements required
by OMB Circular A-21 have been excluded from this restriction on
auditor selection. OMB will monitor these disclosure statements
and may revisit this issue again at a later date.
The
implementation date for this provision is delayed two years until
audits of fiscal years ending on or after June 30, 1999, to minimize
any effect this provision could have on existing contracts for audit
services. For example, an auditor that prepared an indirect cost
proposal or cost allocation which is used as the basis for charging
indirect costs in the fiscal year ending June 30, 1999, is not permitted
to perform the 1999 audit.
Report
Due Date
Comment:
Most State auditor and college and university commenters expressed
opposition to shortening the due date for reports from 13 to 9 months.
However, most State manager and non-profit organization commenters
supported the change. The view appeared to be that those receiving
and relying on the reports and those currently completing the audit
in 9 months liked the change. By contrast, it appears that those who
were not currently completing the audit in 9 months opposed the change.
Response:
This proposal has been adopted, with a change. The provision retains
the requirement in the Circular that, when the audit is completed
earlier than the due date, the reporting package must be submitted
within 30 days of audit report issuance.
Certification
Comment:
Comments were mixed on the certification form. Most State auditor
and CPA commenters opposed the certification form, citing it as an
increased burden on them to prepare and duplicative of information
in the audit reports. Most college and university commenters supported
the use of the certification form as a method of reducing the volume
of paper in single audits.
On
a related issue, some State auditor and CPA commenters cited a possible
logistical problem that the auditor would not be able to complete
the audit report until the certification form was prepared (because
the auditor must read the certification form and report as an audit
finding material inconsistencies with the audit) and the certification
form could not be prepared until the audit is completed.
Response:
The requirements for the auditor to read the certification form
and report as an audit finding any material inconsistencies has
not been adopted. As a preventive control to ensure proper distribution
of audit reports, a requirement (§___.500(f)) has been added
for the auditor to identify to the auditee those Federal awarding
agencies and pass-through entities which are required to receive
a copy of the reporting package. Also, a requirement (§___.505(b))
was added for the schedule of findings and questioned costs prepared
by the auditor to include a summary of the auditor's results. This
summary will facilitate preparation of the certification form by
the auditee.
Management
Letter
Comment:
Most commenters expressed concern that routinely including management
letters as part of a public filing of the auditor's reports could
reduce the effectiveness of management letters.
Response:
OMB agrees that it is not necessary to routinely include auditor's
management letters as part of the report submission. Therefore,
this provision has not been adopted. However, because management
letters may contain information relevant to the needs of Federal
agencies and pass-through entities to monitor Federal awards, a
provision has been added that Federal agencies and pass-through
entities can request a copy of management letters.
Coordinated
Audit Approach
Comment:
A few commenters expressed concern that the term coordinated audit
approach was not used in the proposed revision and whether the removal
of this term precluded Federal auditors from participating in audits
required by this Circular.
Response:
The proposed revision does not prohibit the participation of Federal
auditors in audits required by the Circular, a concept referred
to as the coordinated audit approach. This term was not included
in the proposed revision because the definition of auditor clearly
includes Federal audit organizations and further reference to the
term coordinated audit approach was not considered necessary. A
provision (§___.305(c)) has been added to clarify that Federal
auditors may perform all or part of the work required under the
Circular if they fully comply with the requirements of the Circular.
GOCOs
and FFRDCs
Comment:
A few Federal agency and non-profit organization commenters expressed
concern that the proposed revision did not specifically address Federal
Government owned, contractor-operated facilities (GOCOs) or Federally
Funded Research and Development Centers (FFRDCs).
Response:
A provision has been added to the definition of the term Federal
award that contracts to operate GOCOs are excluded from the requirements
of this Circular. Also, paragraph §___.200(e) has been added
to allow management of an auditee that owns or operates a FFRDC
to elect to treat the FFRDC as a separate entity for purposes of
this Circular. If the FFRDC is treated as a separate entity, the
determination of cognizant agency for audit would be based upon
this separate entity.
Questions
and Answers on OMB Circular A-133
Comment:
In May 1992, the Standards Subcommittee of the President's Council
on Integrity and Efficiency (PCIE) issued PCIE Position Statement
No. 6, titled "Questions and Answers on OMB Circular A-133" (A-133
Q&A). A commenter inquired whether this document could be used as
guidance in performing audits under the revised Circular A-133.
Response:
Since this revision makes significant changes in OMB Circular A-133,
the May 1992 A-133 Q&A should not be used as a primary source of
guidance for audits performed under this revision. However, many
items in the A-133 Q&A were incorporated in this revision and the
A-133 Q&A may be a useful historical reference of the single audit
process. If there are significant questions concerning the revised
Circular A-133, OMB will consider issuing a revised A-133 Q&A.
Compliance
Supplements
Comment:
Some CPA and State auditor commenters expressed concern that Federal
agencies should keep the compliance supplements current.
Response:
OMB recognizes the need for updated compliance supplements and is
working with Federal agencies and the PCIE to complete this task.
OMB's current plans are to issue a revised compliance supplement
by the end of 1996.
Public
Information Collection
The revision
includes an information collection requirement for reports from auditors
concerning their audit findings to auditees (§___.235(b)(4),
§___.505, and §___.510) and reports from auditees to the
Federal Government concerning these report (§___.235(c) and §___.320).
OMB requested comments on the proposed information collection described
in the Circular in a April 1, 1996 Federal Register notice (61 FR
14338) in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. Chapter 35 et seq). The proposed information collection requirement
will not be effective until another notice is published in the Federal
Register. The subsequent notice will provide the effective date and
the OMB control number.
Alice
M. Rivlin
Director
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