On August 12, 2021, the Office of Management and Budget (OMB) released the 2021 version of the Compliance Supplement to be used in the completion of audits performed in accordance with the Uniform Guidance for nonprofit organizations and governmental entities. The 2021 supplement supersedes the previous compliance supplement (dated August 2020) and its addendum (dated December 2020) and is effective for audits of fiscal years beginning after June 30, 2020.
2021 Compliance Supplement Changes
The 2021 supplement identified several changes from previous versions of the supplement. A summary of key changes include:
- Changed the terminology of the federal awarding agency number from Catalog of Federal Domestic Assistance (CFDA) to Assistance Listing (AL).
- Appendix IV of the supplement identifies several programs identified as higher risk related to COVID-19 funding. A higher risk determination from the OMB could impact the major program determination performed by the auditor to determine the entity’s federal programs to test.
- Key requirements for the Provider Relief Fund (PRF) including clarified guidance on reporting of PRF funds on the schedule of expenditure of federal awards (SEFA) and reporting requirements.
- Federal awarding agencies continued to stress the emphasis of the reporting identified as a compliance requirement subject to audit. The 2021 supplement identifies 57 programs with reporting marked as a compliance requirement subject to audit versus only 29 programs in the 2020 supplement. The Federal Funding Accountability and Transparency Act (FFATA) regulations were originally included in the 2020 addendum and have been fully incorporated into the reporting section of the 2021 supplement.
- Numerous changes to agency program requirements are noted in Part 4 of the supplement. This section, along with Appendix V should be reviewed for changes to specific federal programs.
Two additional addendum releases are expected later this fall to provide additional guidance related to certain programs, including (but not limited to) the Coronavirus State and Local Fiscal Recovery Funds, Education Stabilization Fund, Capital Projects Fund, Homeowner Assistance Fund, and the Local Assistance and Tribal Consistency Fund.
A full version of the 2021 compliance supplement can be located on the OMB’s website.
If you have any questions regarding the 2021 Compliance Supplement and how it may impact your organization, please contact Jim Shellenberger, Partner, at firstname.lastname@example.org or Jackie Winchell, Senior Manager, at email@example.com.