What Nonprofits Need to Know About the 2022 OMB Compliance Supplement
The Office of Management & Budget (OMB) issues the OMB Compliance Supplement on an annual basis. The supplement is used to test the Single Audit compliance for entities that have fiscal year-ends of June 30, 2022, and thereafter. You can view the 2022 supplement here.
Recently, many nonprofit organizations have received federal financial assistance as a result of the COVID-19 pandemic. This could make them subject to a Single Audit for the first time. The OMB Compliance Supplement provides guidance for those who want to understand the rules their auditing team must follow.
The Supplement consists of seven parts and nine appendices:
- Part 1 – Background, Purpose, and Applicability. This part contains general Single Audit information.
- Part 2 – Matrix of Compliance Requirements. Part 2 identifies which of the 12 types of compliance requirements are subject to audit for the federal programs included in this supplement.
- Part 3 – Compliance Requirements. Part 3 includes the generic program objectives and audit procedures pertaining to the 12 types of compliance requirements.
- Part 4 – Agency Program Requirements. Part 4 contains the federal agency’s specific program objectives and procedures and assistance listing number. This section includes the compliance requirements specific to the individual program for Activities Allowed or Unallowed; Eligibility; Matching; Level of Effort; Earmarking; Reporting; and Special Tests and Provisions.
- Part 5 – Clusters of Programs. Part 5 identifies those programs to be considered clusters of federal programs.
- Part 6 – Internal Control. Part 6 describes characteristics of internal control relating to each of the five components of internal control.
- Part 7 – Guidance for Auditing Programs Not Included in This Compliance Supplement. Part 7 states that for those programs not covered in the Supplement, the auditor must use the 12 types of compliance requirements described in Part 3.
Key Changes to Part 4, “Agency Program Requirements”
Part 4 of the supplement, “Agency Program Requirements” had several new programs added this year, with approximately 50 having significant changes to the program objectives and audit procedures.
New Programs Added for 2022 Include:
- 888 – Lead-Based Paint Capital Fund Program and Housing-Related Hazards Capital Fund
- 023 – Emergency Rental Assistance Program (ERA)
- 026 – Homeowner Assistance Fund Program
- 029 – Coronavirus Capital Projects Fund
- 009 – Emergency Connectivity Fund Program
- 075 – Shuttered Venue Operators Grant (SVOG)
- 671 – Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services
Higher Risk Programs
Additionally, the Supplement identified a list of programs with COVID-19 funding that are considered “higher risk” for audits. This includes:
|Agency||Assistance Listing Number|
|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|
|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.
Contact D+L for Guidance on Single Audits
For nearly 50 years, Dugan + Lopatka has partnered with nonprofit organizations to navigate every step of the financial journey. At D+L, our CPAs and consultants are always on the cutting edge of changes in the nonprofit sector. We understand the challenges you face—the special accounting, auditing, and reporting requirements of your organization—and we use our deep expertise to deliver exceptional service tailored to your needs.