The Wait for the 2021 Compliance Supplement Continues

Currently, the Washington region is overwhelmed by hordes of ear-shattering cicadas, and it may not be until the end of June before the din of their daily mating calls will finally end. Perhaps we could’ve used this opportunity to feature the 17-year cicada with this post, but that’s simply not our tradition.

Long-time readers to Thompson’s Grant blog are aware that we have introduced our friend, the snail, pretty much every year around this time to highlight the Office of Management and Budget’s (OMB) slowness in publishing the annual Compliance Supplement. This year is no exception.

We recently attended the American Institute of Certified Public Accountants’ (AICPA) virtual Not-for-Profit Industry conference, and heard from speakers representing AICPA’s Governmental Audit Quality Center, who said that they had received word from OMB earlier this year that the 2021 Compliance Supplement would be released in late May. Now they understand from OMB that the document will not be issued until late June. If history is any indication, it may be even later than that, as last year’s main Compliance Supplement was not issued until August 2020.

Not only that, this year’s supplement is expected to be followed by an addendum to be released later in the year to address COVID-19 emergency relief programs under the American Rescue Plan Act (ARPA) (Pub. L. 117-2). This is a similar approach to the one OMB took last year when it released an addendum to the 2020 supplement in December 2020 to provide audit guidance for programs issued under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. 116-136); Paycheck Protection Program Flexibility Act of 2020 (Pub. L. 116-142); Families First Coronavirus Response Act (Pub. L. 116-127); and the Coronavirus Preparedness and Response Supplemental Appropriations Act (Pub. L. 116-123).

OMB and federal agencies have a huge challenge on their collective plate with this year’s Compliance Supplement. Not only will the document provide guidance related to numerous new programs under ARPA (along with Year 2 guidance for CARES Act programs), it also must address new requirements stemming from OMB’s revision of the uniform guidance in August 2020. Auditors must ensure that they read the document thoroughly to ensure that they are correctly testing compliance of major programs and are completing information correctly on the Schedule of Expenditure of Federal Awards, which may require a high level of professional judgement in some cases.

As we generally say every year, let’s hope the 2021 Compliance Supplement will be published soon, so that this will be the last and only time we have to present our snail friend (although you must admit, snails are a lot quieter than cicadas!).

Join us for our following Thompson Grants event:
Virtual Workshop: Internal Controls - What They Are and How to Ensure Compliance | June 30, 2021
Federal Grants Forum for Institutions of Higher Education | July 21 - 22, 2021