Circular Letter 15-08-OMB supersedes Circular Letter 04-04-OMB and contains the following:
- Increased the single audit expenditure threshold and is applicable for all recipients expending federal funds or state funds of $750,000 or more during any fiscal year period beginning on or after December 26, 2014, which for most entities would be for fiscal years ending on or after December 31, 2015.
- Contains definition and language changes that are consistent with the federal Super Circular.
- Adds a section outlining State Cognizant Department Responsibilities.
- Requires an audit in accordance with Government Auditing Standards (Yellow Book) or a program-specific audit for recipients who expend less than $750,000 in federal or state financial assistance, but expends $100,000 or more in state and/or federal financial assistance.
- Requires single audit reports to include a supplementary schedule of the entity’s state financial assistance, titled Schedule of Expenditures of State Financial Assistance and must contain the following items:
- state grantor department
- program title/name
- award number or account number
- award period
- fiscal year grant expenditures and total grant expenditures to date.
Unless otherwise noted in the grant agreement, audit reports are due nine months after the end of the audit period.
The Definitions contained in Circular Letter 15-08-OMB are as follows:
Recipient – any unit of local government, not-for-profit organization or for-profit organization that receives from a state agency any federal grants, state grants or state aid funds to carry out or administer a program.
Contractor (Vendor) – any entity that receives any federal grant, state grant or state aid funds to provide the state with goods or services and does not carry out or administer a program. Circular Letter 15-08-OMB is not applicable for contractors.
Recipient Individual – a person that is a beneficiary of a program who may receive funds, rebates, services or other similar benefits based upon program eligibility or other similar criteria. Circular Letter 15-08-OMB is not applicable for recipient individuals.
Grant – an award or financial assistance provided by a state agency to a recipient for the recipient to carry out part of a program (state funded or federal pass-through funded) that is administered by the state awarding agency.
State Cognizant Department –department or agency that has been assigned audit oversight responsibility for a recipient to ensure the timely receipt of a quality audit report from the entity that complies with federal and state requirements.
Department Single Audit Contact – an individual assigned by the state department to act as a liaison with OMB concerning federal and state audit requirements.
State aid – consists of the following:
- Monies paid by the state to a local government or a non-government agency for assistance calculated according to a formula; assistance to aid local governments in carrying out their responsibilities; grants-in-aid to non-governmental agencies for functions carried out on behalf of a local government and payments specifically designated by law as state aid.
- Expenses incurred by a state department or agency on behalf of a local government.
In order to determine if state aid funds should be tested under Circular Letter 15-08-OMB, the award notices or agreements should be reviewed to see if they make reference to single audit requirements. Recipients can also check the State Grant Compliance Supplement to see if the award received is included in the Supplement. If guidance is not available in the award notice or agreement or the Compliance Supplement, the recipient should contact the state agency that provided the funding or the agency’s assigned single audit contact.
The state cognizant department is responsible for the following items:
- Timely performance of desk reviews of single audit reports and issuance of a management decision on audit findings within six months after receipt of the audit report
- Requesting corrective action plans from recipients where necessary and ensure audit exceptions are resolved
- Confirmation of independent audit organization external quality control reviews
- Communication of the results of the audit desk reviews and quality control reviews to OMB
- Period reviews and updates of the department’s section of the State Grant Compliance Supplement
