On August 18, 2020, the Office of Management and Budget (OMB) released the 2020 OMB Single Audit Compliance Supplement (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 a single audit. The 2020 Supplement is unique in that the OMB is releasing the Supplement in two releases. This first release of the supplement primarily contains updates that were developed by the OMB prior to the pandemic.

Subsequent to the onset of the pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act funded at least 20 new, significant federal programs in response to the pandemic. The four largest programs funded by the CARES Act are as follows:

The OMB has stated that an addendum to the Supplement will be released sometime in the Fall of 2020 to address the largest new federal programs established by the CARES Act. The addendum is commonly referred to as the second release. A full list of programs expected to be addressed in the second release can be found here.

The guidance included in the 2020 Supplement is effective for years ending June 30, 2020 or later unless otherwise specified within the Supplement. A summary of a majority of the key changes from previous Supplements is presented in Appendix V, Lists of Changes for the 2020 Compliance Supplement.

While the first release of the Supplement does not address audit requirements for programs established by the CARES Act, it does contain changes to some agency specific Supplements in Part 4, revisions to the clusters list in Part 5, and a robust Appendix VII, Other Audit Advisories, that includes a new section on COVID-19 implications for single audits. Hundreds of existing federal programs received additional funding under the CARES Act.

Appendix VII is not a new appendix but is relevant for 2020 audits because it contains general COVID-19 single audit guidance. The following are the most important COVID-19 topics in the advisory appendix:

• When COVID-19 funds are subawarded from an existing program, the information furnished to subrecipients should distinguish the subawards of incremental COVID-19 funds from non-COVID-19 subawards under the existing program
• The SEFA must identify COVID-19 funds on a line separate from non-COVID-19 funds by using “COVID-19” as a prefix to the program name
• Clarification that there is no extension for single audit submissions to the federal clearinghouse for fiscal years ending after December 31, 2019

Part 5, Clusters of Programs, made changes to clusters including but not limited to the Student Financial Assistance Cluster in 2020. Key changes were made to the Head Start and Child Care Disaster Relief Clusters and the Temporary Assistance for Needy Families (TANF) Cluster was deleted. The second release is not expected to add any new clusters of programs to this first release.

The remaining parts and appendices had minimal changes in the 2020 Supplement.

Organizations that receive and expend federal funding should familiarize themselves with the provisions of the 2020 Supplement in order to ensure they are adhering to all associated federal regulations and to prepare for the single audit. Organizations that received significant federal funding under a major CARES Act program should be prepared to delay single audits until the second release of the 2020 Supplement. RubinBrown will hold a webinar when the second release of the 2020 Supplement is published later this Fall.

Click here to access the full 2020 Compliance Supplement.

 

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