Nonprofit Alert: New FAQs on Uniform Guidance for Federal AwardsBy John D'Amico | August 28, 2017
Since the Uniform Guidance was issued in 2014, The Council on Financial Assistance Reform (“COFAR”) has developed – and continuously maintained – a compendium of Frequently Asked Questions (“FAQs”) around the Guidance and its regulations. In July 2017, COFAR issued its latest set of updates.
The July 2017 compendium contains 24 new FAQs and revisions to 4 previously issued FAQs. These FAQs are used as references on the Uniform Guidance by both auditors and auditees for added background and clarification. While the COFAR has since been disbanded, its FAQs continue to exist as an authoritative resource.
The FAQs provide valuable context and guidance on a number of topics affecting nonprofit financial reporting – among them indirect costs, vendor vs. contractor clarification, equipment and conditional title, the new procurement requirements and the documentation of personnel costs.
Some notable clarifications in the July 2017 FAQs include:
- It is the auditee’s responsibility to prepare the Summary Schedule of Prior Audit Findings and Corrective Action Plan. The Auditor should NOT prepare them. In addition, the Corrective Action Plan must now be on the Auditee’s letterhead.
- If an organization has expenditures in a Federal program – and that program is part of a cluster – it will have to be labeled as a cluster on the Schedule of Expenditures of Federal Awards (“SEFA”) even if there are expenditures in only one program within the cluster. This means that for every federal program on your SEFA, the auditee would have to verify whether it is or isn’t part of a cluster. This can be accomplished by utilizing both Part 2 and 5 of the Compliance Supplement.
The July 2017 FAQs can be accessed on the Chief Financial Officers Council website, here.
The 2017 Compliance Supplement
Additionally, the final 2017 Compliance Supplement has just been finalized and issued by the Office of Management and Budget (“OMB”). The supplement will be used as a resource by auditors when planning for and performing all Single Audits with June 30, 2017 year-ends and thereafter. Auditees should also utilize this document to familiarize themselves with what their auditors will be testing for, better prepare for their audit and avoid any surprises. The 2017 Compliance Supplement can be accessed here.
About John D'Amico
John D'Amico, CPA, is a Director with the Professional Standards Group at Marks Paneth LLP and provides quality control services to the firm's Nonprofit, Government & Healthcare Group. He specializes in quality reviews of nonprofit organizations' audits and is part of a team that reviews all attest engagements, provides consultation on accounting and attestation matters, tests and monitors the firm's quality review policies and procedures. He also develops and delivers training material related to accounting... READ MORE +