The U.S. Office of Management and Budget issued the 2023 Compliance Supplement (the Supplement) with two important changes affecting recipients of federal awards, which is effective for entities with fiscal years ending June 30, 2023, and thereafter. These changes reflect changes made in Uniform Guidance (2CFR Section 200.)

Cash Management Compliance Requirement

The first change is in the cash management compliance requirement for entities funded under the reimbursement method. Previously, entities were required to pay for their expenditures prior to requesting reimbursement. The Supplement clarified the auditor’s responsibility to now just ascertain if the expenditures were incurred prior to the date of the reimbursement request. (2 CFR section 200.305(b)(3))

This is a significant change as entities are no longer required to use their own money to pay for expenditures and then wait to be reimbursed.

Procurement Compliance Requirement

The procurement requirements have been amended to address a new requirement related to the Build America Buy America Act (BABA) for Infrastructure projects only.

A non-federal entity must comply with the BABA requirements to the extent that the non-federal entity has been informed of these requirements, such as through the award terms and conditions. Several federal agencies, in consultation with OMB, issued waivers as an exception from or waiver of the Made in America laws. See the following agency listing of waivers.

Proposed Revisions to the Single Audit Threshold

The Federal Office of Management and Budget unveiled proposed changes to the Uniform Guidance requirements over federal awards programs that will be published for comment in the Federal Register soon.

One of the more significant proposed changes is to increase the dollar amount of the threshold of federal expenditures for when a Single Audit under Uniform Guidance is required. The proposal is to increase the threshold from $750,000 to $1 million of expenditures during a recipient organization’s financial reporting year. This will reduce the number of Single Audits that will be required to be performed.

Also included in the 473 pages that describe the proposed revisions is to increase the threshold from $5,000 to $10,000 for determining items that are considered to be equipment. Many of the other proposed changes reflect changes in statutory requirements, provide clarifications and provide an overall update to the Uniform Guidance requirements.

CBIZ is closely monitoring these changes. For further details or to consult a financial services professional, please connect with us.

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