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Focus on Public Sector: 2019 OMB Compliance Supplement Update

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Applies to Public Sector, Not-For-Profit, Colleges and Universities
July 24, 2019

Applies to Public Sector, Not-For-Profit, Colleges and Universities

On July 1, 2019, the Office of Management and Budget (OMB) announced the release of the 2019 OMB Compliance Supplement. The supplement contains the policies and procedures required to be followed by federal, state and local entities in regards to expending federal funding and the procedures required to be performed by auditors when conducting the single audit over these federal programs. The 2019 supplement is a single stand-alone document that replaces both the 2018 and 2017 supplements.

The 2019 supplement contains several significant changes to agency requirements as a result of the mandate that each agency limit the number of requirements identified as being subject to the compliance audit to six (previously the requirements subject to audit could have been as high as 12). Organizations administering grant funds should be aware that they are still required to comply with all 12 compliance requirements. The change simply means that not all 12 requirements will be tested as part of the single audit.

The regulations included in the 2019 supplement are effective for years ending June 30, 2019 or later unless otherwise specified within the supplement. A summary of a majority of the key changes from the previous supplements are listed in appendix V, Lists of Changes for the 2019 Compliance Supplement.

One of the most notable changes is in part 2 - Matrix of Compliance Requirements, as it was updated to incorporate significant compliance requirement reductions as a result of the mandate mentioned above. All programs contained in part 2 should be reviewed for compliance requirement changes when planning and preparing for audits using the 2019 supplement.

As a result of the changes to part 2, a number of programs added, removed or revised requirements in part 4 – Agency Program Requirements.

Part 5 – Clusters of Programs had extensive changes for clusters in 2019 including but not limited to the student financial assistance cluster. Key changes for the student financial assistance cluster include:
  • A new special test and provision titled “Gramm-Leach-Bliley Act-Student Information Security” which relates to the protection of student financial aid information was added to part 5.
  • A new special test and provision titled “excess cash” which relates to minimizing the time elapsed between the drawdown and disbursement of federal funding was added to part 5.
  • Special test and provisions titled separate funds, FWS agreements, zone alternative, consortium agreements and Perkins Loan liquidation were removed.

Extensive changes were made to part 6 – Internal Control to now include appendices that contain illustrations of entity-wide internal controls over federal awards, as well as illustrations of internal controls specific to each type of compliance requirement. This part of the supplement is a great tool for developing internal control documentation for federal grants.

Additional changes were noted in appendix III – Federal Agency Single Audit, Key Management Liaison, and Program Contacts to update contact information for program contacts and other key single audit offices and officials.

Lastly, as it relates to timely submissions of the single audit reporting package to the Federal Audit Clearinghouse (FAC), appendix VII includes a clarification that the “FAC Accepted Date” should be compared to the nine month due date to determine if the due date was met. Appendix VII includes many other audit advisories such as this.

The remaining appendices and part 7 – Guidance for Auditing Programs Not Included in This Compliance Supplement are unchanged or had minimal changes in the 2019 supplement.

Organizations that receive and expend federal funding should familiarize themselves with the provisions of the 2019 supplement in order to ensure they are adhering to all associated federal regulations and to prepare for the single audit.

For more information, please visit the Federal Register Notice announcing the release of the 2019 compliance supplement or see the full 2019 compliance supplement.


Readers should not act upon information presented without individual professional consultation.

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.


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