Tuesday, October 9, 2007

SAS Update - Caporicci & Larson - San Diego, Orange County, Oakland, and Sacramento

In May of 2006 the Office of Management and Budget issued a new revised supplement for OMB A-133. This revised supplement had several changes made to grant program narratives on the program requirements, which resulted in other parts of the compliance supplement also being changed. The changes range from minor verbiage changes to specific changes in program requirements as a result of Hurricane Katrina. A brief over view of the changes can be seen in Appendix V of the 2006 Compliance Supplement.

The major Program requirement changes were in the following parts of the supplement:

Part 3 - Compliance Requirements
Part 4 - Agency Program Requirements
Part 5 Clusters of Programs

The significant change made in Part 3 was in Section D, which was the creation of a disaster waiver for Davis Bacon requirements as a result of Hurricane Katrina. On September 8, 2005, the President of the United States issued a proclamation suspending the Davis-Bacon Act for the payment of Davis-Bacon wages in areas affected by Hurricane Katrina. The waiver was rescinded as of November 8, 2005.

For further information and guidance on the disaster waiver refer to Appendix VI of the 2006 Compliance Supplement.

Another notable change made in Part 3 was in Section I (Procurement, Suspension and Disbarment). This section has been changed to clearly state the compliance requirements pertaining to procurements as it applies to the implementation of OMB Circular A-102 Common Rule and OMB Circular A-110, which was effective November 26, 2003.

Local governments and Indian tribal governments which are not sub-recipients of States will use their own procurement procedures provided that these procedures conform to applicable Federal law and regulations as well as the standards identified in A-102 Common Rule.

Institutions of higher education, hospitals, and other non-profit organizations shall use the procurement procedures that conform to applicable Federal law and regulations and the standards identified in OMB Circular A-110.

This section has also added procedures and references for identifying contractors who have been suspended and/or disbarred from participating in Federal award programs. This verification may be accomplished by checking the Excluded Parties List System (EPLS), which is maintained by the General Services Administration (GSA). For further information on EPLS refer to Part 3 Section I of the 2006 Compliance Supplement.

PART 4 This part of the 2006 Compliance Supplement mainly summarizes program requirements for various grants. These requirements are summarized and then organized and presented in the order of Federal agency and then CFDA number. The changes made to these programs range from basic verbiage changes to significant compliance requirement changes. The Following is a list of the Federal Agencies that have made changes to their grant programs:

Department of Agriculture (CFDA# 10.XXX)
Department of Commerce (CFDA# 11.XXX)
Department of Defense (CFDA# 12.XXX)
Department of Housing and Urban Development (CFDA# 14.XXX)
Department of Labor (CFDA# 17.XXX)
Department of Transportation (CFDA# 20.XXX)
Department of the Treasury (CFDA# 21.XXX)
National Foundation of the Arts and Humanities (CFDA# 45.XXX)
Department of Energy (CFDA# 81.XXX)
Department of Education (CFDA# 84.XXX)
Department of Health and Human Services (CFDA# 93.XXX)
Department of Homeland Security (CFDA# 97.XXX)
United States Agency for International Development (CFDA# 98.XXX)

If you have any grant award from any of these agencies you should review the list of grant programs listed in Appendix V of the 2006 Compliance Supplement to determine if any of the changes will affect the grants which have been awarded to you.

As a result of the changes made in Part 3 and 4 of the Compliance Supplement the list of grant clusters were changed.

As a result of the changes made in Part 3 and 4 of the Compliance Supplement the various exhibits, reference sources and explanatory information contained in the Appendices were changed.

Traditionally the Office of Management and Budget has reviewed OMB A-133 Compliance Supplement on an annual basis to assure that the information contained is as current as possible to assist in evaluating program compliance on federal award programs. These revisions are normally made available on their web site in May of each year. Therefore it is advisable to become familiar with the web site and monitor it for updates and other pertinent information pertaining to the Single Audit Act.

Brian Kelly is a Senior Auditor with Caporicci & Larson, a California-based CPA firm specializing in government compliance auditing. Their website can be found at http://www.c-lcpa.com/