Times Are Definitely “a-Changin’” for Grants, Audits
Like Bob Dylan once sang, “Times they are a-changin'” (yes, we know, this is an archaic reference for today’s generation). Still, when you consider the state of key federal government guidance and standards related to financial assistance and audits, there’s definitely truth to this song. Here's a rundown of what's on the agenda for 2023.
First of all, the Office of Management and Budget (OMB) is continuing with its plan to revise grant-related guidance within Title 2, including the uniform guidance (2 C.F.R. Part 200), by the end of the year. We’re expecting proposed changes to come forth in the August/September timeframe, and OMB aims to finalize these changes by the end of the year. The revisions are not meant to be wholescale chances to current guidance, but to provide more clarity to applicants and recipients. OMB stressed that it is “working to rewrite it in plain English,” noting that in many cases, the guidance details what applicants, recipients and auditors cannot do, but it is not as clear as to what they can do. If the revisions are finalized by the end of the year, the updated version would be effective for awards issued on or after its effective date.
OMB seems to have taken this “plain English” effort to heart when it released the 2023 Compliance Supplement on Monday. This is particularly evident in Part 1 of the supplement, in which OMB discusses its background, purpose and applicability. For years, OMB has provided static language describing the supplement’s history and purpose, but this year, it went through this section and shortened and clarified the language, along with deleting historical information that is no longer useful. For example, OMB deleted an entire paragraph in this year’s supplement that was included in the 2022 supplement discussing June 1997 revisions to the former OMB Circular A-133 to implement the 1996 Single Audit Act amendments, as well as other Circular A-133 amendments in 2003 and 2007. As a result, Part 1 in this year’s version is 10 pages, a whole page shorter than the Part 1 discussion in the 2022 supplement.
Auditing standards also are undergoing changes this year. The Government Accountability Office (GAO) earlier this year issued revisions to the Government Auditing Standards (GAGAS), also known as the “Yellow Book,” and accepted public comments on an exposure draft of the changes through April. The changes aim to mirror other international auditing standards by establishing a quality management process for responsible auditing that incorporates a “risk-based,” rather than a “policies-based” approach. The proposed revisions would make amendments only to chapter 5, which would be retitled “Quality Management and Peer Review,” and chapter 6, “Standards for Financial Audits.” The proposed standard emphasizes the responsibility of an audit organization’s leadership to proactively manage quality on its engagements, and requires a risk-based approach to design, implement and operate a system of quality management. GAO is currently evaluating the comments received on the exposure draft before making the revised standards final.
Also in the works are changes to GAO’s Standards for Internal Control in the Federal Government, also known as the “Green Book.” As part of the revision process, GAO will host a meeting on June 14 with the Comptroller General’s Advisory Council on Standards for Internal Control in the Federal Government to discuss the revisions and provide input and recommendations.
In our experience, we’ve never seen the uniform guidance, Compliance Supplement, Yellow Book and Green Book all undergoing revisions at the same time. Now is definitely a prime time to trust in Thompson Grants to keep you updated on all the latest, because things surely are a-changin’.
Join us for our following Thompson Grants events:
Federal Grants Forum | June 28-30, 2023 | Portland, Maine
Thompson Grants Workshop: Indirect Costs | July 25, 2023 | Virtual Event
