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pdfPREPARATION GUIDE
FOR THE
2024 COMPLIANCE SUPPLEMENT
FOR AUDITS UNDER THE SINGLE AUDIT ACT
(2 CFR PART 200, SUBPART F)
July 2023
2024 Compliance Supplement Preparation Guide
July 2023
Table of Contents
OVERVIEW .................................................................................................................................................................2
WHAT IS THE PURPOSE OF THE COMPLIANCE SUPPLEMENT? ......................................................................................2
WHAT IS THE PURPOSE OF THE PREPARATION GUIDE? ...............................................................................................2
RESPONSIBILITIES ..................................................................................................................................................2
INTRODUCTION ..........................................................................................................................................................2
FEDERAL AGENCIES ...................................................................................................................................................3
OMB’S OFFICE OF FEDERAL FINANCIAL MANAGEMENT............................................................................................3
CORE TEAM ...............................................................................................................................................................3
GUIDELINES FOR PROGRAM SUPPLEMENTS .................................................................................................3
GENERAL ...................................................................................................................................................................3
REQUIRED DOCUMENTATION .....................................................................................................................................4
GUIDELINES FOR DRAFTING, SIGNIFICANTLY CHANGING, OR UPDATING A PROGRAM
SUPPLEMENT ............................................................................................................................................................5
ADDING A PROGRAM TO THE SUPPLEMENT ................................................................................................................5
DEVELOPING SPECIFIC SECTIONS OF THE PROGRAM SUPPLEMENT .............................................................................6
COMPREHENSIVE REVIEW OF EXISTING PROGRAMS ...................................................................................................9
REQUIRED DOCUMENTATION FOR PROGRAM SUPPLEMENTS ................................................................................... 10
MEANS OF PROVIDING REQUIRED INFORMATION TO OMB ...................................................................................... 11
THE AUDITOR REVIEW DRAFT .................................................................................................................................. 11
OMB CLEARANCE AND PUBLICATION...................................................................................................................... 12
APPENDICES & ATTACHMENTS ........................................................................................................................ 12
APPENDIX I.
HOW THE SUPPLEMENT IS ORGANIZED ........................................................................... 13
APPENDIX II. TIMETABLE FOR REVIEW DRAFT: 2024 SUPPLEMENT................................................. 14
APPENDIX III. PROGRAM SUPPLEMENT FORMAT TEMPLATE............................................................... 15
APPENDIX IV. COMPLIANCE SUPPLEMENT CORE TEAM MEMBERS .................................................. 22
ATTACHMENT 1. CHECKLIST #1 Added Program Supplement Submissions ..................................................... 23
ATTACHMENT 2. CHECKLIST #2 Comprehensive Review of Existing Programs …………………………….30
ATTACHEMENT 3. Compliance Supplement Part 4 L. Reporting - Performance Reporting Guidance
and Template .........................………………………………………………………………33
ATTCHEMENT 4. Questions and Answers for Auditing Performance Reporting …………………………………..38
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Overview
WHAT IS THE PURPOSE OF THE COMPLIANCE SUPPLEMENT?
The Compliance Supplement (Supplement), which is Appendix XI to 2 CFR part 200, identifies
those compliance requirements to be considered as part of an audit under the Single Audit Act
Amendments of 1996 that are most likely to cause improper payments, fraud, waste, or abuse or
to generate audit findings for which the Federal awarding agency will take sanctions. The
Supplement does not identify all compliance requirements for all audits under the Single Audit
Act.
For each program/cluster included in the Supplement, the Supplement describes (in Part 4 or 5)
the Federal program’s/cluster’s objectives and procedures, includes a matrix of compliance
requirements, provides statutory and regulatory compliance requirements relevant to the audit,
and includes audit objectives and suggested audit procedures for determining compliance with
those requirements. The Supplement does not create compliance requirements.
Use of the Supplement is mandatory. Auditors must consider the Supplement and the referenced
laws, regulations, and Office of Management and Budget (OMB) guidance (as codified by
Federal agencies in agency regulations) in planning and conducting the audit, including
determining the compliance requirements that could have a direct and material effect on the
programs included therein. For single audits, the Supplement replaces agency audit guides and
other documents specifying audit requirements for individual Federal programs. The Supplement
also lists—for program-specific audits—the audit guides that agencies have developed.
WHAT IS THE PURPOSE OF THE PREPARATION GUIDE?
The Supplement is revised annually by, among other things, updating or deleting programs in the
prior year’s Supplement, and, as appropriate, including additional programs. The 2024 Compliance
Supplement will be applicable to audits for auditee fiscal years beginning on or after July 1,
2023. To ensure that the Supplement provides up-to-date, legally accurate, clear, and consistent
information to auditors, this guide provides information to assist Federal agencies in preparing,
updating, or reviewing a program/cluster submission for the Supplement.
Responsibilities
INTRODUCTION
The annual revision of the Supplement is the product of a collaborative effort between OMB and
Federal agency officials, working through an interagency team--the Compliance Supplement
Core Team (Core Team). Specific descriptions of their respective responsibilities follow.
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FEDERAL AGENCIES
Subpart F of 2 CFR part 200 requires Federal agencies to annually inform OMB of any updates
to programs included in the Supplement, identify the need to add programs, and under
200.513(c)(4) ensure that the Supplement focuses on compliance requirements most likely to
cause improper payments, fraud, waste, or abuse or to generate audit findings for which the
Federal awarding agency will impose sanctions. Each agency is required by 2 CFR section
200.513(c)(6) to have a key management single audit liaison, whose responsibilities include,
among other things, ensuring that the agency provides annual updates of the Supplement to
OMB (2 CFR section 200.513(c)(6)(vii)).
CORE TEAM
The Core Team includes individuals from Federal grant-making agencies, OMB, and a
representative from the Federal Audit Clearinghouse (FAC). Members typically come from
Federal grants policy offices, offices of the Chief Financial Officer (CFO), audit resolution
offices, or Offices of Inspector General (OIG). A list of the current Core Team appears in
Appendix IV of this guide and also appears in Appendix IX of the Supplement. Members are
responsible for monitoring and coordinating the drafting and updating of program supplements
for their agency’s programs in a timely manner. In addition, the Core member or KMAL is to
ensure the program supplements adhere to the guidelines presented in this guide.
OMB’S OFFICE OF FEDERAL FINANCIAL MANAGEMENT
OMB’s Office of Federal Financial Management (OFFM) has overall policy responsibility for
the guidance in 2 CFR part 200, Subparts A through E, the audit requirements in 2 CFR part 200,
Subpart F, and the Supplement. OFFM is responsible for coordinating and monitoring the review of
the Federal agency draft by the audit community, and ensuring that auditor comments are addressed
by the Federal agency.
Guidelines for Program Supplements
GENERAL
To ensure the integrity of the information contained in the Supplement, input and dialogue is
essential throughout the process. As a result, significantly changing, updating, or drafting a
program supplement for inclusion in the Supplement is an iterative process between the Federal
agency and OMB. OMB may require changes to the draft submissions.
This guide includes information about the required content of program supplements and formatting
requirements to ensure consistency, completeness, and timeliness of the Supplement across all
agencies. Checklists provided as attachments to this guide provide a step-by-step roadmap to
assist in preparing or updating program supplements.
Appendix II of this guide includes a schedule for completion of the 2024 Supplement.
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REQUIRED DOCUMENTATION
To be considered timely and complete, each submission to OMB for the 2024 Supplement
must include the following, as described in subsequent sections of this guide:
The program supplement in the prescribed format (see the 2023 Compliance Supplement
at https://www.whitehouse.gov/omb/office-federal-financial-management or Appendix III of
this guide, Program Supplement Format Template).
As shown in the Supplement and the Format Template in Appendix III of this guide, the
program supplement must be prepared or updated in Word; use Times New Roman 12
point; and use boldface, italics, numbering, and upper and lower case and indentation as
indicated.
All changes must be shown in revision mode (“track changes”). The starting document is
the 2023 Compliance Supplement Template.
The program supplement must not use underlining, automated paragraph
numbering, footnotes, smart quotes, or other special codes.
A completed copy of the applicable checklist for each program - Checklist #1, “Added Program
Supplement Submission,” for an added program and Checklist #2, Comprehensive Review of
Existing Programs,” for all programs in the 2023 Supplement. If no updating is necessary, the
agency must submit a consolidated list of programs with no changes and a completed Checklist
#2 for each program.
An explanation of changes for programs as compared to the 2023 Supplement if the reason for
the change is not readily apparent (e.g., correction of an error).
Copies of statutes and regulations cited in the program supplement for added programs or that
are the basis for changes in a program supplement’s language from that in the 2023
Supplement. Website locations for the cited statutes and regulations may be provided in place
of copies if the citations are specific enough for OMB to locate the cited material. Please be
sure to provide links that are accessible to the public (not agency internal links).
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Guidelines for Drafting or Updating a Program Supplement
ADDING A PROGRAM TO THE SUPPLEMENT
When proposing to add a new program to the Part 4 of the Compliance Supplement, the agency
will need to provide OMB the following:
•
The name and Assistance Listing number of the program (consistent with the schedule in
Appendix II).
•
Total amount funded for the program.
•
Total number of recipients to be awarded funds.
•
Total funding (on average) to individual recipients and any limit of funding amount to an
individual recipient.
•
Type of entities being funded (i.e., Tribal, State, or independent non-profit entities), and
information about whether the funding will be used by the recipient or mainly passed
through to subrecipients.
After this information is received, OMB will schedule a pre-determination meeting with the agency
and the compliance supplement review team. OMB, will determine if the program is (or may be) a
“major program” at enough non-federal entities to warrant inclusion in the Supplement. OMB uses
the criteria in 2 CFR section 200.518, as applied to the information in the FAC database, as the
basis for making this determination in consultation with the agency and Compliance Supplement
Review Team.
Following agreement on adding a program, the agency should draft the program information using
the template found in Appendix III in this guide and submit it to OMB (consistent with the
schedule in Appendix II). The information must be accompanied by Checklist #1 and statutes,
regulations, and other supporting documentation as specified in the checklist.
Please complete all internal agency clearances and approvals before forwarding the draft to
OMB. To ensure deadlines are met, internal reviews may proceed concurrently with OMB’s review of
the document if no substantive changes are expected during the internal review.
Checklist #1 includes detailed, step-by-step instructions for drafting the text for the Supplement
and requires information for the matrix in Part 2 of the Supplement. The matrix identifies which of
the 12 types of compliance requirements are going to be the focus of the Single Audit. See Part 3,
“Compliance Requirements,” of the Supplement for reference of the audit objectives and suggested
audit procedures for each requirement and Checklist #1, Part C (Matrix Checklist) attachment to this
guide for a detailed explanation of the compliance requirements. Reminder – only six requirements
may be selected as a “Y,” with requirements A and B counting as one; fewer than six
requirements are acceptable.
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DEVELOPING SPECIFIC SECTIONS OF THE PROGRAM SUPPLEMENT
July 2023
In addition to the formatting requirements in Appendix III to this guide, the following content
must be included in updates.
SUPPLEMENT SECTION I. Program Objectives
The description of program objectives and procedures should provide an overview of how
the program works and its key features.
Include in Section I, “Program Objectives,” an overview of the program; do not simply state
program laws and regulations. Include information needed to understand and audit the
program at the recipient and/or subrecipient level. This section should not include
compliance requirements.
Examples of information to include: eligible recipients and beneficiaries; application
requirements; whether funds are received directly from the Federal agency or from a passthrough entity; nature of the activities funded; and third parties that might be involved in the
program. Descriptions of the internal processes the Federal agency uses to administer the
program should be avoided unless that information is important to auditors’ understanding of
the compliance requirements to be tested.
SUPPLEMENT SECTION II: Program Procedure
Include in Section II, “Program Procedures,” a subsection titled “Source of Governing
Requirements” to provide the statutory and regulatory authority for the program and its
compliance requirements.
If there is pertinent information available on an agency website or in an agency publication
that will assist the auditor in understanding the program, also include in “Program Procedures”
a subsection titled “Availability of Other Program Information.” In that subsection, provide a
name and description of and publications and valid URLs for website(s).
SUPPLEMENT SECTION III: COMPLIANCE REQUIREMENTS
Cite compliance requirements unique to the program that have been selected for audit.
Agency regulations adopting or implementing the OMB guidance in 2 CFR part 200 are not
unique to the program, and, should be cited only to indicate that they are not applicable or if
they contain an OMB-approved class exception that applies to a specific program.
Identify only those key compliance requirements that could have a direct and material
effect on the program. The following five types of compliance requirements-Activities Allowed or Unallowed; Eligibility; Matching, Level of Effort, Earmarking;
Reporting; and Special Tests and Provisions must have requirement information that is
unique to the program.
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For the other seven requirements, the descriptions of the compliance requirements in Part 3,
“Compliance Requirements,” of the Supplement should be adequate unless the program has
unique provisions in addition to the general administrative requirements. When updating a
compliance requirement, review the audit objectives and suggested audit procedures in
Part 3 to ensure that they provide appropriate guidance for the requirement; if not, provide
information the auditors will need for testing.
Unless no financial reporting is required (i.e., if reporting is marked as “N” in the matrix
of compliance requirements), under “Financial Reporting,” each program supplement
must address the standard, government-wide reports for grants and cooperative
agreements by designation of “Applicable” or “Not Applicable.” It is not necessary to list
OMB control numbers for the standard financial reports (SF-425, SF-270, and SF-271). The
SF-270 must be marked “Not Applicable” unless it is used for all awards under a program
(whether using the advance or reimbursement payment method) rather than only for recipients
designated high-risk that are subject to payment by reimbursement. This section must
indicate if an agency has any agency-specific financial reports (with current PRA number)
that may be used in lieu of, or in addition to, the standard reports.
For “Performance Reporting” and “Special Reporting,” include only those specific
reporting requirements that the auditor should be testing. Real property and tangible personal
property reports can be added to the Special Reporting Sub-Section if the reports are material
to the program. See Attachments 3 and 4.
For “Special Reporting for Federal Funding Accountability and Transparency,” include only
instructions that are different from the general reporting requirements in Part 3.L.
For purposes of the Supplement, the designation “Not Applicable” in relation to
“Performance Reporting” and “Special Reporting” means that the auditor is not
expected to audit anything in these categories. It does not mean that the program has no
performance or special reporting requirements. This section is not intended to
communicate to recipients their reporting requirements.
No reporting requirement will be included in these subsections unless (1) it has a valid
Paperwork Reduction Act (PRA) clearance number as March 31, 2024 (which must be listed
with the first reference to a report); (2) it can be audited (which means it cannot be a narrative
report); and (3) the key data elements (key line items) to be audited are identified. Reports that
are listed by name only without identification of key line items will not be included in the
Supplement.
If a report is submitted electronically and it is not practical to provide a copy of the report,
include information on how the auditor is to access the report for testing, and provide a link
of the input screens and a list of the data elements the auditor should test. Also provide the
website address, if applicable, indicating where the reporting form/format and instructions
may be found.
To check whether reports have valid PRA numbers, check OMB’s Office of Information and
Regulatory Affairs (OIRA) website (Information and Regulatory Affairs | OMB | The White
House), which includes an on-line listing of all current control numbers.
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Include only compliance requirements supported by current laws and regulations.
All requirements included in III, “Compliance Requirements,” must be supported by a
reference to a specific provision in a current law or regulation unless the requirements are
included only in a notice of funding opportunity that and applicable to all recipients. This
section may include references to agency documents, such as policy notices, memoranda, or
handbooks only if they serve to clarify a statutory or regulatory compliance requirement. They
may not serve as the source of a compliance requirement unless they have been approved by
OMB under its regulatory clearance process. If such documents have not been approved by
OMB previously and are to be referenced in the compliance requirements section of the
Supplement, they should be submitted to OMB for approval under Executive Order 12866;
otherwise, such documents must be listed under “Availability of Other Information.”
Ensure that citations for laws and regulations are accurate.
To obtain the most current citations for regulations, use the Electronic Code of Federal
Regulations (e-CFR) site at https://www.ecfr.gov.
Refer to the United States Code (USC) rather than the public law (Pub. L.) citation or the
name of the authorizing statute unless a USC citation is unavailable. Public law citations must
include the full public law number plus the detailed reference (e.g., the statute citation
including the applicable page number(s)). Consult with the agency or program Office of
General Counsel (OGC), as necessary, concerning legal citations. See Checklist #1, item
10—for examples of how to cite legal authorities in program supplements.
Appropriately describe pass-through entity and subrecipient considerations.
Program operation and compliance requirements may be different at the pass-through entity
and subrecipient levels. Clearly identify the applicable entity (i.e., pass-through entity or
subrecipient).
Include audit objectives and suggested audit procedures for special tests and provisions.
Consult the agency OIG to determine these suggested audit procedures. For the other types of
requirements, the audit objectives and suggested audit procedures are included in Part 3,
“Compliance Requirements,” of the Supplement.
SUPPLEMENT SECTION IV: OTHER INFORMATION
Include in IV, “Other Information,” additional audit guidance, such as determining Federal
awards expended, Type A/Type B programs (as described in 2 CFR sections 200.518(b) and
200.520(b)), amounts to be reported on the Schedule of Expenditures of Federal Awards,
whether loans have continuing compliance requirements as described 2 CFR section
200.502(d), and changes in Assistance Listing numbers and effective date or other types of
transitions that may affect the audit. Audit Requirements, Audit Objectives and Suggested
Audit Procedures are not to be included within this section.
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COMPREHENSIVE REVIEW OF EXISTING PROGRAMS
July 2023
Review each program in the 2023 Supplement to determine whether changes are required.
(Checklist #2) includes a detailed list of the steps in the review and updating process. Use the
template document provided by OMB as the starting point for the updating process. Do not use a
prior version of the file or save it in any format that does not preserve the document’s
formatting. Converting a PDF to Word does not preserve the formatting (although it may
appear to do so).
As noted above, under 200.513(c)(4) agencies are required to ensure that the Supplement
focuses on compliance requirements most likely to cause improper payments, fraud, waste,
or abuse or to generate audit findings for which the Federal awarding agency will impose
sanctions. Programs not included in the Supplement Part 4 are still subject to the Single Audit
Act and follow Part 7 of the Supplement.
If there are no changes, the responsible individual may simply complete and “sign” the cover
page of Checklist #2 and provide it to the agency point of contact for retention.
Changes (additions and/or deletions) must be made in MS Word with “track changes” turned
on and keeping the same file name with your initials added to end of the file name. Program
information that does not adhere to the “track changes” requirement will be returned to the
agency.
Updates should reflect changes in statutes, regulations, program emphasis, and updated websites.
Editorial changes should focus on correcting grammatical and/or technical errors. Do not make
stylistic changes.
If not given an earlier deadline by OMB, the updated program information must be provided to
OMB by e-mail on or before September 29, 2023 and must be accompanied by the following:
A completed Checklist #2 and
Relevant back-up documentation, whether in a word-processing format, PDF, or scanned, or a
listing of the information with a link to websites where the information is available and
readily identifiable.
An e-mail from the designated agency point of contact that lists unchanged programs, their
Assistance Listing numbers, and the program point of contact or the completed checklist and
supporting materials (for program supplements with changes), signed by the designated KMAL
and/or Core contact(s), will indicate that the agency went through the process of determining what
changes are needed, if any, for that program.
In addition, OMB is requesting that agency cross-cutting sections and information be reviewed
and updated in areas affecting the entire Supplement.
For the 2024 Supplement, OMB is requesting that agencies:
Review any examples or references to program changes that include dates prior to 2023 or
COVID-19 funding and either delete or update them. If a reference to a prior date must
remain, indicate in the comments field the rationale for the continued need.
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Review FAC (or other internal agency system) data for major programs and audit findings to
determine which programs should remain in Part 4 and which programs may need to be
added.
Review referenced hyperlinks to ensure they are direct and specific to the requirements being
tested.
Ensure that the Matrix includes at most six (or seven if A and B are selected) of the 12
compliance requirements that may be material to the program. Note that fewer than six
requirements may be selected.
Ensure language within requirements do not duplicate language found in Part 3, that the
requirement being referenced is in the correct compliance type per Part 3, and requirements
are appropriately labeled as applicable to pass-through or subrecipient entity.
Review Section III.L.2 and 3, “Reporting – Performance Reporting” and “Reporting - Special
Reporting,” respectively, to ensure that any reports that are included specifically indicate:
Title of Report and PRA number.
Link to the Report and its instructions.
The critical line items/key data elements for auditor review. If the auditor is
expected to review the entire report, then state that all lines items are considered
critical, e.g., “Key line items include all sections, line items, and data elements in
the report.”. Identified Key Line Items must be objective and quantifiable.
To make the Supplement fully 508 compliant, OMB may identify the need for certain changes in
the formatting of the documents, e.g., numbering undesignated paragraphs. If so, OMB will
make the change and notify the agency.
REQUIRED DOCUMENTATION FOR PROGRAM SUPPLEMENTS
The following documentation must accompany the draft program supplement for added or
significantly changed programs.
An explanation of all changes. The basis for requested changes may be explained using the
“comment” feature of Word in the draft Supplement or in a separate document. All
substantive changes, including technical corrections, must be supported with legal
references or other appropriate support. If the cited statute or regulations are available on
an agency website, include a hyperlink to the website. A copy of the relevant section of the
USC or CFR should be provided with the proposed changes to the program supplement if
the information is not available using the hyperlink to the agency website; highlight or list
the pertinent statutory or regulatory sections. Any material other than the program
information and the checklist (e.g., separate explanation of changes, copy of statute) should
clearly indicate the Assistance Listing number to which it applies and cross-reference the
section of the Supplement it supports.
Changes to compliance requirements that are not accompanied by valid references or
adequate explanation will not be included in the Supplement. If new reporting requirements
are proposed, the OMB control number should be supplied and the critical line items/key
data elements to be audited should be identified. Reporting requirements will not be
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included in the Supplement unless (1) they have current, valid PRA control numbers as of
March 31, 2024, and (2) critical line items/key data elements for audit are identified.
Documentation of all cited references (for added or significantly changed programs).
Provide the most current version of the USC, CFR, or other applicable document. Agencies
are encouraged to maintain current copies of the laws and regulations applicable to the
programs in the Supplement on the agency’s or program’s home page and to include a hyperlink
to the page in the Supplement.
Copies of actual award agreements (for added programs). The examples submitted should
be typical of the program. When a program has more than one typical award agreement, a copy
of each should be provided.
Upon request, for any program with a new reporting requirement, copies of reports that the
auditor is required to test (with any data protected under the Freedom of Information Act or
containing personally identifiable information redacted). Reports provided should be typical
for the program.
Copies of any other documents that would help explain the operation of the program (for
added or significantly changed programs). Examples include handbooks, manuals, policy
statements, or other reports that the agency produces and that explain how the program works
and a discussion of any regular monitoring procedures that the Federal government performs
on recipients/awards.
MEANS OF PROVIDING REQUIRED INFORMATION TO OMB
The following must be provided by the designated agency point of contact to OMB by e- mail by
the specified due date (see Appendix II of this guide): completed program information, whether
new or changed; the applicable checklist or consolidated e-mail for unchanged programs; and all
supporting documentation.
THE AUDITOR REVIEW DRAFT
A draft of new or changed program information, other parts of the Supplement with changes, and
a listing of all planned changes is reviewed by with State auditors, the American Institute of
Certified Public Accountants, Federal agencies, and others.
Upon return of the Auditor Review draft with comments, which will be transmitted by OMB to the
agency Core, agencies should carefully review and address all comments. For review comments
for which the agency is not making the suggested change, a comment of “no change” and the
reason for no change should be included. After this time, agencies may make changes only to
address the following:
Inaccuracies in the draft.
Program changes (e.g., laws, regulations, or reports) occurring after the draft was prepared that
are or will be effective for the audit period covered by the 2024 Supplement.
Concerns and/or corrections from reviewers.
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Follow-up on any PRA numbers for which OMB approval is pending.
The purpose of this review is to ensure that the final version is correct, complete, and
current; it is not to add requirements that were not included in the submitted draft.
Each agency will be asked to confirm to OMB by e-mail that the draft coverage applicable to his or
her agency is accurate or, if not, provide changes. Any changes or corrections must be supported by
an explanation of why they are needed and, if applicable, a copy of any legal reference (with the key
section highlighted). If changes are required, OMB will provide a revised draft to the agency’s
designated point of contact and he or she will be asked to review and confirm its accuracy. In practice,
there may be several iterations; however, the agency will be provided a copy of the final draft as it
will appear in the Supplement and will be asked to concur.
OMB CLEARANCE AND PUBLICATION
Once all changes have been finalized, the final review copy of the 2024 Compliance Supplement
is submitted for OMB clearance and publication on the OMB website as individual PDF
documents and a combined PDF document.
Appendices & Attachments
I.
How the Supplement is Organized
II.
Timetable for Review Draft: 2024 Supplement
III. Program Supplement Template
IV. Compliance Supplement Core Team Members
Attachments
Attachment 1 - Checklist #1—Added Program Supplement Submissions
A. Document Collection
B. Drafting the Program Supplement
C. Matrix Checklist
Attachment 2 - Checklist #2—Comprehensive Review of Existing Programs
Attachment 3 - Compliance Supplement Part 4 L. Reporting - Performance Reporting
Guidance and Template
Attachment 4 - Questions and Answers for Auditing Performance Reporting
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Appendix I. How the Supplement is Organized
Part 1
Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Appendix I
Appendix II
Appendix III
Appendix IV
Appendix V
Appendix VI
Appendix VII
Appendix VIII
Appendix IX
Provides the background, purpose, and applicability of the Supplement.
Identifies the F ederal programs and compliance requirements addressed by the
Supplement and associates the programs with the applicable compliance requirements.
Lists and describes the 12 types of compliance requirements and the related audit
objectives and suggested audit procedures.
Discusses program objectives, program procedures, and compliance requirements that
are specific to programs/clusters other than the Research and Development (R&D) and
Student Financial Assistance (SFA) clusters.
Discusses the R&D and SFA clusters, which involve multiple agencies, and lists the
clusters of programs included in Part 4, as well as other clusters. A cluster is a grouping
of closely related programs that has similar compliance requirements.
Addresses the objectives, principles, and components of internal control based on the
“Standards for Internal Control in the Federal Government,” (“Green Book”), issued by
the Government Accountability Office, and the “Internal Control Integrated
Framework” (revised 2013), issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
Provides guidance for auditing of programs not included in the Supplement.
Lists programs excluded from portions of the requirements of the “Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards” (2 CFR part 200).
Provides regulatory citations for Federal agencies’ codification of the OMB guidance at
2 CFR part 200 and the non-procurement suspension and debarment guidance at 2 CFR
part 180.
Identifies Federal agency contacts for information about Federal programs, agency-level
management liaisons, and the audit requirements of 2 CFR part 200, Subpart F.
Provides a listing of programs in Parts 4 and 5 that include IV, “Other Information.”
Provides a list of changes to the prior year’s Supplement.
Lists program-specific audit guides.
Lists advisories related to the audit under 2 CFR part 200, Subpart F
Provides guidance on audits of state electronic benefits transfer (EBT) service providers
(service organizations) regarding the issuance, redemption, and settlement of benefits
under the Supplemental Nutrition Assistance Program (Assistance Listing 10.551) in
accordance with the American Institute of Certified Public Accountants (AICPA)
Statement on Standards for Attestation Engagements (AT) Section 801, Reporting on
Controls at a Service Organization.
Lists the Compliance Supplement Core Team members responsible for the production
of the Supplement.
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Appendix II. Timetable for Review Draft: 2024 Supplement
July - All high priority programs will be notified and receive their working documents for
edits from OMB. Agencies should start requesting meetings with audit community on
specific programs.
July 27 - OMB Formal 2024 CS Kick-off
August 1-4 – Agencies notify OMB of programs with potential changes and possible new
programs.
August 4-8 – OMB sends working documents to agencies.
August 7-25 – Agencies meet with audit community on new and major programs.
August 21-31 – All new and existing program drafts with major changes due to OMB
from Agency.
September 1-15 – All new and major change drafts due to auditor.
September 29 – All program drafts with minor changes due to OMB.
October 6 – All documents out for auditor review.
October 20-31 – Auditor review complete and received by OMB
November 15 – Post-auditor review documents sent to agencies and OMB meets with select
programs.
December 1– Agency review of auditor comments complete and sent to OMB for
review/approval.
January 19 – OMB and auditor review of agency response completed. Agencies on notice for
final edits.
February 2 – OMB review completed.
February 28 – Documents ready to go to final
March – OMB clearance
May – Final Supplement published.
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2024 Compliance Supplement Preparation Guide
Appendix III.
July 2023
Program Supplement Format Template
Sample submission for Part 4 program supplement: If a compliance requirement would have a
direct and material effect on a program, it must be shown as a “Y” in the matrix of compliance
requirements. The associated compliance requirement heading must be included in the program
supplement if there is a unique requirement that must be described for the auditor. If a compliance
heading is not included, it does not affect the alphabetic indicator of the compliance requirements
that are included, e.g., “Eligibility,” if included, always is preceded by an “E.”
DEPARTMENT OF XYZ
ASSISTANCE LISTING 99.997 PROGRAM 1 [Cite the Assistance Listing number and name
for each program listed.]
ASSISTANCE LISTING 99.998 PROGRAM 2 [If cluster]
ASSISTANCE LISTING 99.999 PROGRAM 3 [If cluster]
I.
PROGRAM OBJECTIVES
[This should be a short paragraph without subheadings describing program objectives.]
II.
PROGRAM PROCEDURES
[This can be a short paragraph without subheadings; however, if subheadings are required, they
must be designated as indicated.]
A. Bold Title (If needed)
1. Italic Subtitle (If needed)
[Text describing program procedures.]
2. Italic Subtitle (If needed)
[Text describing program procedures.]
Source of Governing Requirements
[Include specific references to the applicable laws in the United States Code (USC) (Public Law,
if not codified) and applicable specific regulations in the Code of Federal Regulations (CFR)
relative to program compliance that is indicated in the Matrix Section III].
Availability of Other Program Information
[Include specific references to websites relative to the program compliance that is indicated for
testing in the Matrix Section III].
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2024 Compliance Supplement Preparation Guide
July 2023
E
F
G
H
I
J
L
M
N
Equipment and
Real Property
Management
Matching,
Level of Effort,
Earmarking
Period
Of
Performance
Procurement and
Suspension and
Debarment
Program
Income
Reporting
Subrecipient
Monitoring
Special
Tests and
Provisions
Cash
Management
C
Allowable
Costs/Cost
Principles
B
Activities
Allowed or
Unallowed
A
Eligibility
III.
COMPLIANCE REQUIREMENTS
In developing the audit procedures to test compliance with the requirements for this Federal
program, the auditor must determine, from the following summary (also included in Part 2,
“Matrix of Compliance Requirements”), which of the 12 types of compliance requirements have
been identified as subject to the audit (noted with a “Y” in the summary matrix below), and then
determine which of the compliance requirements that are subject to the audit are likely to have a
direct and material effect on the Federal program at the auditee. For each such compliance
requirement subject to the audit, the auditor must use Part 3 (which includes generic details about
each compliance requirement other than Special Tests and Provisions) and this program
supplement (which includes any program-specific requirements) to perform the audit. When a
compliance requirement is shown in the summary below as “N,” it has been identified as not
being subject to the audit. Auditors are not expected to test requirements that have been noted
with an “N.” See the Safe Harbor Status discussion in Part 1 for additional information.
See Part 2 for the full titles of the compliance requirements.
[Each cell in the above table must include a “Y” or an “N.” Up to six requirements may be
marked with “Y” if neither A nor B is selected. Requirements A and B count as one, which
means that a total of seven requirements may be selected if both A and B are selected. Note that
six is a maximum; fewer than six may be selected.]
A.
Activities Allowed or Unallowed
[All requirements must be supported by a reference to a current law or regulation.]
1.
Italicized title line for area – A title is optional, but should be provided if it
summarizes the text. Text to describe this requirement must be included when
it is marked with a “Y” in the Part 2 matrix (e.g., 42 USC 604(b)(1)).
[A text paragraph instead of listing the details may be more appropriate for this
section.]
a.
Detail about/description of activity.
(1)
Additional detail or “bullets.”
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2024 Compliance Supplement Preparation Guide
(2)
b.
2.
Additional detail or “bullets.”
July 2023
Detail about/description of activity.
(1)
Additional detail or “bullets.”
(2)
Additional detail or “bullets.”
Italicized title line for area – A title is optional. A description and reference to
the compliance requirement are required. In some cases, a title line may be
helpful to describe the text (e.g., 34 CFR section 654(a)).
[A text paragraph instead of listing the details may be more appropriate for this
section.]
a.
b.
B.
Detail about/description of activity.
(1)
Additional detail or “bullets.”
(2)
Additional detail or “bullets.”
Detail about/description of activity.
(1)
Additional detail or “bullets.”
(2)
Additional detail or “bullets.”
Allowable Costs/Cost Principles
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no title line or text will be included.]
C.
Cash Management
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no title line or text will be included.]
E.
Eligibility
[If any one of these components is applicable, then all three components must be listed
with notation for any that are “Not Applicable.” If none are applicable, then this heading
should not be included in the program supplement.]
[Text describing at least one of these components must be included when the “Eligibility”
requirement is marked with a “Y.”]
1.
Eligibility for Individuals
[Describe or insert “Not Applicable.”]
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2024 Compliance Supplement Preparation Guide
2.
Eligibility for Group of Individuals or Area of Service Delivery
July 2023
[Describe or insert “Not Applicable.”]
3.
Eligibility for Subrecipients
[Describe or insert “Not Applicable.”]
F.
Equipment and Real Property Management
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no title line or text will be included.]
G.
Matching, Level of Effort, Earmarking
[If any one of the three components is “Applicable,” then all three components must be
listed with notation for any that are “Not Applicable.” Text describing at least one of
these types of compliance requirements must be included when the “Matching, Level of
Effort, Earmarking” requirement is marked with a “Y”.]
1.
Matching
[Describe or insert “Not Applicable.”]
2.
Level of Effort
[Describe under the applicable subheading or, if neither of the requirements in
the subheadings is applicable, insert “Not Applicable” here. When either
maintenance of effort or level-of-effort is applicable, list both 2.1 and 2.2.
Describe both requirements if both are applicable; if only one of the two is
applicable, describe the requirement under the applicable subheading and mark
the other as “Not Applicable.”]
2.1
Level of Effort – Maintenance of Effort
[Describe or insert “Not Applicable.”]
2.2
Level of Effort – Supplement Not Supplant
[Describe or insert “Not Applicable.”]
3.
Earmarking
[Describe or insert “Not Applicable.”]
H.
Period of Performance
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no title line or text will be included.]
Page 18
2024 Compliance Supplement Preparation Guide
I.
Procurement and Suspension and Debarment
July 2023
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no title line or text will be included.]
J.
Program Income
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no title line or text will be included.]
L.
Reporting
[Normally a program will have some reporting requirements requiring auditor review. If a
program has no such requirements for an auditor to review, this section should not be
included and the compliance matrix should be marked “N” for “Reporting.” In all other
cases, i.e., if there is a “Y” in the compliance matrix, the following subheadings must be
used and completed as indicated.]
1.
Financial Reporting
[When financial reporting is applicable, the standard financial reports will be
listed as a. through c. with an indication of whether they are “Applicable” or “Not
Applicable.” The current PRA number must be listed for all reports except for the
three standard forms.]
a.
SF-270, Request for Advance or Reimbursement - Include as “Applicable”
only if all awards under the program are required to use this form to
request payment. Otherwise, mark as “Not Applicable.”
b.
SF-271, Outlay Report and Request for Reimbursement for Construction
Program -
c.
SF-425, Federal Financial Report -
d.
XYZ-99, Quarterly Statement of Expenditures for Program (OMB No.
9999-999) – [Text must describe the report.]
Key Line Items - The following line items contain critical information:
2.
1.
Line 1 Title of line [if appropriate–text as necessary to describe
line.]
2.
Line 99 Title of line [if appropriate–text as necessary to describe
line.]
Performance Reporting
[Include the report information and key line items that are objective and
quantifiable below or insert “Not Applicable.”]
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2024 Compliance Supplement Preparation Guide
July 2023
[Report Title: XYZ-98, Form Requesting Information
OMB PRA Number: OMB No. 9999-999
Report Authority: XCFR234 and award terms and conditions section XU
Reporting period/submission date/s: Report submitted by the xxth of the XYZ.
Link to report and report instructions: https:\\\WXYreportform.gov]
Key Line Items - The following line items contain critical information:
3.
1.
Line 1 Title of line [if appropriate–text as necessary to describe line.]
2.
Line 99 Title of line [if appropriate–text as necessary to describe line.]
Special Reporting
[Include the report information and key line items that are objective and
quantifiable below or insert “Not Applicable.”]
[Report Title: XYZ-98, Form Requesting Information
OMB PRA Number: OMB No. 9999-999
Report Authority: XCFR234 and award terms and conditions section XU.
Reporting period/submission date/s: Report submitted by the xxth of the XYZ.
Link to report and report instructions: https:\\\WXYreportform.gov]
Key Line Items - The following line items contain critical information:
4.
M.
1.
Line 1 Title of line [if appropriate–text as necessary to describe line.]
2.
Line 99 Title of line [if appropriate–text as necessary to describe line.]
Special Reporting for Federal Funding Accountability and Transparency Act
See Part 3.L for audit guidance or insert “Not Applicable.”
Subrecipient Monitoring
[Text must be provided if there is information related to this requirement that is in
addition to the Supplement’s Part 3 guidance. Normally this will not be necessary, in
which case no text will be included.]
N.
Special Tests and Provisions
[For each item under this heading, include a numbered title with subheadings as indicated.
Even if only one entry, include a number in front of the title.]
1.
Title of Special Test
Compliance Requirements [Text describing this requirement must be included when this
requirement is marked with a “Y.” It cannot be a requirement that would fall under a
requirement in the Matrix that the agency marked with “N.”]
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2024 Compliance Supplement Preparation Guide
July 2023
Audit Objectives [Text describing audit objectives in the format of “Determine whether
(1) objective, (2) objective, and (3) objective.”]
Suggested Audit Procedures
a.
b.
[Text must be included that describes the procedure(s), which must support
achieving audit objective(s).]
(1)
[Text describing procedure in greater detail if needed.]
(2)
[Text describing procedure in greater detail (if needed).
Text describing procedure.
[Include as many lettered procedures as needed.]
IV.
OTHER INFORMATION
[Include additional guidance related to the audit, such as determining Federal awards expended,
Type A/Type B programs; amounts to be reported on the Schedule of Expenditures of Federal
Awards; and whether loans have continuing compliance requirements as described in 2 CFR
section 200.502(d). Do not include compliance requirements for testing in this section.]
Page 21
2024 Compliance Supplement Preparation Guide
Appendix IV.
July 2023
Compliance Supplement Core Team Members *
*As of 07/28/23
LIST – BY AGENCY
Cindy Galyen
Beth Flowers
Seane Weekes
John Geisen
Dexter Brereton
Joel Gonzalez
Leticia Adu
Michael Pellegrino
Shannon Steinbauer
Jeff Haley
Latonya Torrence
Carole Clay
Morgan Aronson
Siporah Jackson
Pamela Lynch
Kevin Cone
Kysha Holliday
Sheela Kailasanath
Steve Sigler
David Gilliland
Connie Cox Bodner
Antanese Crank
Christopher Eck
Laura M. H. Davis
Nicki Jacobs
Rochelle Ray
Mitzi Mayer
Lisa Newton
Kate Pesin
Trae Sommer
Steve Tashjian
Kimberly Butler
Corporation for National and Community Service
Denali Commission
Department of Agriculture
Department of Commerce
Department of Education
Department of Energy
Department of Health and Human Services
Department of Homeland Security
Department of Housing and Urban Development
Department of Justice
Department of Labor
Department of State
Department of the Interior
Department of the Treasury
Department of Transportation
Department of Veterans Affairs
Environmental Protection Agency
Federal Communications Commission
Gulf Coast Ecosystem Restoration Council
Gulf Coast Ecosystem Restoration Council
Institute for Museum and Library Sciences
National Aeronautics and Space Administration
National Archives and Records Administration
National Endowment for the Humanities
National Endowment for the Humanities
National Science Foundation
Office of Management and Budget
Office of National Drug Control Policy
Social Security Administration
Social Security Administration
US Agency for International Development
US Small Business Administration
Page 22
Agency:
AL Number:
AL Title:
Checklist #1
Added Program Supplement Submissions
A. DOCUMENT COLLECTION
Before drafting the program supplement, it is essential to first gather the documents listed below. Copies of all
or website link to these documents must be provided to OMB with the draft program supplement.
No.
Document
1.
Copies or link for the most current, applicable portion of the
U.S. Code (USC).
Copies or link of the most current, applicable sections of the
Code of Federal Regulations (CFR).
Any recent Federal Register (FR) notices.
Copy or link of the program section from the Assistance Listing
(AL) (formerly called Catalog of Federal Domestic Assistance
(CFDA)) SAM.gov | Home.
A copy of an actual award agreement(s) that is typical for the
program.
Actual reports to the Federal Government (from a recipient)
that the auditor is required to test. If the report is electronically
submitted, include a copy of the input screens and procedures
for the auditor to use to determine what was submitted to the
Federal agency. (See Attachment 3 for more information.)
Include copies/links for any other documents that would help
the auditor understand the operation of the program, such as
handbooks, manuals, policy statements, or other reports that the
agency produces that explain how the program works. A
discussion of any regular monitoring procedures that the
Federal government performs on recipients also would be
useful.
A copy of this checklist, including the matrix checklist
(Part C page 5.).
2.
3.
4.
5.
6.
7.
8.
Provide hyperlink(s) or indicate
attachment name(s)
1 of 7
Agency:
AL Number:
AL Title:
Checklist # 1
Added Program Supplement Submissions
B. DRAFTING THE SUPPLEMENT
Preparation of the program supplement is an iterative process. The submitted draft is not the
"final” version. These procedures will minimize the need for revisions. You should review the
format and style of the Supplement (2023 Compliance Supplement Preparation Guide or the
Supplement on OMB’s Financial Management homepage (Office of Federal Financial
Management | The White House).
No.
Suggested Procedure
Done By
Date
1.
2.
3.
4.
5.
6.
Ask (1) program officials, (2) OIG personnel, and (3) audit resolution
officials if any specific program problems have been documented.
Identify up to six (or seven if choosing A and B) of the 12 types of
compliance requirements apply to the program and mark them on
the matrix checklist (Part C on page 5). You may select fewer than
six.
Draft I, “Program Objectives” and II, “Program Procedures.” These
should give an overview of the program and should not repeat the
text of program laws or regulations. Provide only essential
information needed to audit the program.
Include in II, “Program Procedures,” a subsection titled “Source of
Governing Requirements” that provides the statutory and/or
regulatory authority for the program and its compliance
requirements. If there is pertinent information available on an agency
website or in an agency publication that will assist the auditor in
understanding the program related to the compliance requirements
selected for testing, reference it in the subsection “Availability of
Other Program Information.”
Draft III, “Compliance Requirements.” Identify only key compliance
requirements that could have a direct and material effect on the
program. Five types of compliance requirements (Activities Allowed
or Unallowed; Eligibility; Matching, Level of Effort, Earmarking;
Reporting; and Special Tests and Provisions), when applicable, will
have requirements unique to the program. For the other seven types
of compliance requirements, the descriptions of the compliance
requirements in Part 3, “Compliance Requirements,” should
generally be adequate unless the program has unique provisions.
Review the audit objectives and suggested audit procedures in Part 3
of the Supplement to ensure that they provide appropriate audit
coverage for the program.
Appropriately describe pass-through entity and subrecipient
considerations for each compliance requirement selected. Program
operations and compliance requirements may differ at the passthrough entity and subrecipient levels. Clearly identify the applicable
entity (i.e., pass-through entity or subrecipient) to which a
requirement applies.
2 of 7
Agency:
AL Number:
AL Title:
Checklist # 1
Added Program Supplement Submissions
No.
Suggested Procedure
7.
Ensure that any item listed in “Special Tests and Provisions” is
properly identified, and does not duplicate one of the other 11
compliance requirements.
Include audit objectives and suggested audit procedures for any
requirement appropriately classified under “Special Tests and
Provisions,” after consultation with the agency OIG.
Verify that each compliance requirement listed has an accurate
and current reference to either the USC or CFR (or Federal
Register).
Requirements in general agency documents (such as handbooks,
manuals, policy statements, etc.) are not acceptable citations.
However, if a requirement is stated only in a notice of funding
opportunity, that document may be cited. Avoid public law citations
whenever possible, i.e., the codified version of the statute should be
used if available. If you use a public law citation, include, the Stat.
reference, including page number (e.g., 114 Stat. 414).
8.
9.
10.
Done By
Date
Check the form of statutory and regulatory references.
Examples:
7 USC 1722(e)
31 USC 6501 et seq.
Section 242(a)(8)(D) of Pub. L. No. 106-224, 114 Stat. 414, June 20,
2000
22 CFR section 211.5
22 CFR sections 211.2(s) and 211.3(c)
7 CFR sections 1499.7(f) and (g)
45 CFR sections 2520 through 2550
22 CFR part 211
24 CFR parts 5, 901, and 990
March 17, 2011, Federal Register (76 FR 14637), State Medicaid
Fraud Control Units; Data Mining
Tennessee v. Dole 749 F.2d 331 (6th Cir. 1984)
57 Comp. Gen. 577 (1978)
If reference is made to a statute and a regulation, the statute should be
listed first followed by a semicolon and the regulation:
(42 USC 1786(f)(23); 7 CFR section 246.7(c)(1))
3 of 7
Agency:
AL Number:
AL Title:
Checklist # 1
Added Program Supplement Submissions
No.
Suggested Procedure
11.
Indicate whether any of the standard financial reports apply.
12.
Indicate the key data elements the auditor should test for reports
unique to the program.
Verify that the reports are listed in the proper format. Example:
FNS-46, SNAP Issuance Reconciliation Report (OMB No. 05840080).
Verify that all reports have valid OMB Paperwork Reduction Act
(PRA) control numbers. To check whether reports have valid
numbers, consult the website of OMB’s Office of Information and
Regulatory Affairs (OIRA), which includes an on-line listing of all
current OMB control numbers, at Information Collection Review
13.
14.
Done By
Date
(reginfo.gov)
15.
16.
17.
18.
19.
20.
If listed reports do not have valid OMB control numbers or if current
approvals have expired or will expire within the next three months,
ensure that your agency submits the required documentation to obtain
or extend the number under the PRA.
Determine whether the program supplement should include IV,
“Other Information.” This section is appropriate for information not
reflected in individual compliance requirements, e.g., a change in the
AL number during the audit period, Type A/Type B programs, or
how the Schedule of Expenditures of Federal Awards should be
prepared. This section should not include compliance requirements,
audit objectives, or suggested audit procedures.
Confirm that any Internet sites referenced or hyperlinked are accurate
and operational and describe what can be found at the site. Links
should not be for general information; instead, they should be specific
to the requirements included for testing.
Ensure that abbreviations or acronyms are spelled out in their
entirety the first time used.
Ensure that program number(s) and title(s) match the Assistance
Listing (AL) SAM.gov | Home. Do not use popular names in the
program title.
Provide the draft program supplement, this checklist (with the matrix
checklist), and required documentation to the agency point of contact
for submission to OMB.
4 of 7
Agency:
AL Number:
AL Title:
Checklist # 1
Added Program Supplement Submissions
C. MATRIX CHECKLIST
Indicate which of the 12 types of compliance requirements are applicable to this program. Select only
six (or seven if A and B are selected). Note that fewer than six may be selected. More information
about these requirements may be found in Part 3 of the Compliance Supplement (Office of Federal
Financial Management | The White House).
=
=
TYPE OF COMPLIANCE REQUIREMENT
Yes
No
A. Activities Allowed or Unallowed
=
=
The activities allowed or unallowed are unique to each program and are found in the
No
laws, regulations, and the provisions of grant agreements, cooperative agreements, Yes
or contracts. This type of compliance requirement specifies the activities that can
and cannot be funded under a specific program. This almost always applies.
(Note: A requirement that costs cannot exceed a certain limit amount is not
considered “allowed/unallowed cost requirement;” rather that is tested under
Earmarking. See below)
B. Allowable Costs/Cost Principles
=
=
2 CFR part 200, in Subpart E and related appendices, prescribes the cost
Yes
No
accounting policies associated with the administration of Federal awards by
educational institutions, non-profit organizations, States, local governments, and
Tribal governments. This almost always applies because most programs have
charges for various types of costs under cost-type awards and subawards.
However, if a program only involves benefits to eligible recipients, with no
administrative costs, costs for routine goods or services (including salaries and
overhead), or consists only of fixed amount awards, then allowable costs may not
apply.
C. Cash Management
=
=
The requirements for cash management are contained in 2 CFR section 200.305,
No
Treasury regulations at 31 CFR part 205, Federal awarding agency regulations, and Yes
the terms and conditions of the Federal award. Cash management almost always
applies to Federal awards.
E. Eligibility
=
=
This requirement specifies the criteria for determining the individuals, groups of
Yes
No
individuals, or subrecipients that can participate in the program and the amounts
for which they qualify. Eligibility applies to most programs that provide benefits
to individuals or groups of individuals and may apply to eligibility for subawards.
F. Equipment and Real Property Management
This requirement refers to rules governing vesting of title to equipment or real
property acquired by a non-federal entity under a Federal award and use and
disposition of that property. These requirements apply to programs under which
recipients can acquire equipment or real property.
= =
Yes
No
5 of 7
Agency:
AL Number:
AL Title:
Checklist # 1
Added Program Supplement Submissions
TYPE OF COMPLIANCE REQUIREMENT
=
Yes
G. Matching, Level of Effort, Earmarking
This requirement is unique to individual programs. None, one, or more of these
requirements may apply: (1) matching or cost sharing includes requirements to
provide contributions (usually non-federal) of a specified amount or percentage to
match or share in the costs of Federal awards; (2) level of effort includes
requirements specifying that (a) a certain level of service is to be provided from
period to period, (b) a certain level of expenditures from non-federal or Federal
sources for specified activities is to be maintained from period to period, or
(c) Federal funds may be used to supplement but not supplant non-federal funding
of services; (3) earmarking includes requirements that specify the minimum
and/or maximum amount or percentage of the program’s funding that
must/may be used for specified activities, including funds provided to
subrecipients.
H. Period of Performance
This requirement refers to the period during which a non-federal entity may use the
Federal funds. This almost always applies.
I. Procurement and Suspension and Debarment
All non-federal entities must follow applicable Federal laws and the agency
implementation of 2 CFR sections 200.317 through 200.327 when awarding
contracts under grants or cooperative agreements. Non-federal entities are
prohibited from contracting with or making subawards under covered transactions
to parties that are suspended or debarred, as provided in 2 CFR part 180. Under
Federal procurement contracts, non-federal entities must follow the requirements
of the Federal Acquisition Regulation.
J. Program Income
This requirement pertains to program income as defined in 2 CFR section 200.1 and
discussed in 2 CFR section 200.307.
L. Reporting
This requirement refers to financial, performance, subaward reporting (FFATA) or
other program-unique reporting (performance and special reporting) required of a
non-federal entity. Performance reporting review is recommended but must
include key line items to focus auditor review. Reporting almost always applies.
All reports included must have valid OMB control numbers under the PRA. If a
program has a reporting requirement, but does not require that the auditor test it,
the program supplement would show that category; e.g., performance reporting, as
“Not Applicable.”
= =
Yes
=
No
No
= =
Yes
No
= =
Yes
No
= =
Yes
No
= =
Yes
No
6 of 7
Agency:
AL Number:
AL Title:
Checklist # 1
Added Program Supplement Submissions
TYPE OF COMPLIANCE REQUIREMENT
=
Yes
M. Subrecipient Monitoring
This refers to the requirement that a pass-through entity perform various activities
as specified in 2 CFR section 200.332. These include activities such as reviewing
reports submitted by the subrecipient, reviewing financial and programmatic
records, and performing site visits to observe operations, arranging for agreedupon procedures engagements for certain aspects of subrecipient activities (such
as eligibility determinations), reviewing the subrecipient’s single audit or
program-specific audit results, and evaluating audit findings and the
subrecipient’s corrective action plan. This applies when awards are passed
through to a subrecipient. If the entity is not a pass-through entity, this
requirement does not apply.
N. Special Tests and Provisions
This requirement refers to specific requirements that are unique to each program
and are found in the laws, regulations, and the provisions of contract or grant
agreements pertaining to the program, and do not fall within one of the above
requirements. For example, if wage rate requirements apply to a program and the
program wants audit coverage, the statutory requirements must be included in this
section with a reference to AL 20.001, which is a cross-cutting section on wage
rate requirements.
= =
Yes
=
No
No
= =
Yes
No
7 of 7
COVER PAGE
Checklist #2
Comprehensive Review of Existing Programs
Agency:
Assistance Listing (formerly CFDA) Number:
Assistance Listing (formerly CFDA) Title:
Are there any changes to the Compliance Supplement for this program?
No If you check “No,” notify the point of contact within your agency that the program has no changes
and send only the completed cover page to that individual, who will compile a list of unchanged
programs for submission to OMB.
Yes If you check “Yes,” you must complete and sign this cover page and provide the following
information to the agency point of contact by the date specified by that individual for submission
to OMB:
a. The signed cover page and completed checklist.
b. Copy of program supplement write-up that clearly shows the change(s) – with track
changes on. Please use the Word version of the 2023 Compliance Supplement document
as the starting point.
• Explanation of changes: provide the reason for each change and effective date of
the change, e.g., change in law or regulation, new reporting requirement,
correction of error in current program supplement write-up (explaining what is
incorrect), incorrect grammar or spelling as a comment within the Word
document.
•
Documentation to support the change, e.g., if the change is in a reporting
requirement, provide a copy of report; if the change is in a law or regulation, give
the citation and highlight the text of the specific citation that supports the change.
Delete. If the program is being deleted from the Compliance Supplement, please complete and sign
this cover page and provide a brief explanation and supporting documentation/reference(s)
below.
Explanation:
Contact information for individual that reviewed the supplement for submission to OMB.
KMAL Name:
Core Name: _________________________________
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Checklist #2
Comprehensive Review of Existing Programs
Agency:
AL Number:
AL Title:
IN GENERAL
(1) This checklist is required for any program for which changes are proposed, including
reconsideration of inclusion of compliance requirements in the program supplement/Part 2
matrix.
(2) Limit editorial changes to a minimum. If clarifying language is needed, please provide a brief
explanation of why the change is needed.
(3) Any substantive, non-editorial changes, including corrections must be accompanied by a copy
of the relevant law or regulation and an explanation of the change within the supplement.
(4) Clearly identify the changes to the proposed program supplement and highlight the affected
section of the law or regulation so that each change may be easily verified.
No.
1.
2.
Suggested Procedure
Identify any programs that may require a change in the program
supplement, including deletion of a program from the
Supplement.
a. Ask program officials if the program has changed (e.g., due
to changes to laws, regulations, or agency policies and
procedures; new or discontinued reports; or Assistance Listing
(AL - formerly CFDA) number changes).
b. Ask (1) program officials, (2) the OIG, and (3) audit
resolution officials if any new program problems have been
documented.
c. Review governing laws and regulations for changes.
Consult with OGC as necessary.
d. Identify any pending legislative, regulatory, or other
changes that should be considered in the follow-up review.
Read the agency information contained in the program
supplement and determine whether the information is accurate,
current, and necessary.
a. Verify all references to laws and regulations. Ensure they are
in the CS standard format (see Checklist #1, No 10).
b. Verify information in II, “Program Procedures,” under
subsection “Source of Governing Requirements.” Add this
subsection if it does not exist.
Done by
Date
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No.
3.
4
5
6.
Suggested Procedure
c. Verify information in II, “Program Procedures,” under
subsection “Availability of Other Program Information.”
Consider adding this subsection if it does not exist.”
d. Test all website addresses for accuracy.
e. Verify that any numbers, percentages, dates, references, etc.
are current (e.g., information in program procedures, eligibility
criteria, matching percentages, and Internet addresses).
f. Verify that the OMB control/PRA numbers for any reports
listed are correct and current. Any PRA numbers that will
expire within three months must be renewed prior to the
issuance of the Supplement. Check OMB’s OIRA website
(Information Collection Review (reginfo.gov)) for a listing
of all current control numbers.
g. Verify that the Assistance Listing (AL) number and name
agree with the AL that is available at SAM.gov | Home.
Done by
Date
h. Consider whether any compliance requirements could no
longer have a material effect on the program.
i. Review any information in IV, “Other Information,” for
continued applicability to audits for periods beginning on or
after July 1, 2023.
j. Review for any technical errors.
Review the table of compliance requirements in the May 2023
program supplement (also shown in Part 2, “Matrix of
Compliance Requirements,” in the 2023 Supplement) to ensure
that the applicability of each of the 12 types of compliance
requirements is correctly indicated. Note – only six types may
be chosen if A and B are not selected; seven may be chosen if
A and B are chosen. Note: fewer than six may be selected. If
you are making any changes to your requirement types,
you must include a justification. Please send a notification
of your intent to the proper channels in your agency.
For Performance Reporting under Compliance Requirement L,
include the key lines items in the report for auditor review.
Depending on agency procedures, provide any recommended
changes to the program supplement to the agency point of
contact. This should be done in a manner to clearly show the
recommended changes to the document (using revision mode).
a. Include a brief explanation of the reasons for changes.
b. Include copies or links for documents supporting the
change (e.g., laws, regulations, or revised report).
Depending on agency procedures, provide a completed copy of
this checklist (and documentation) to the agency point of
contact.
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Attachment 3
Compliance Supplement Part 4 L. Reporting
Performance Reporting Guidance and Template
Purpose: To help agencies draft the Performance Reporting section within Part 4 of the
Supplement and to provide agencies a Part 4 L. 2. template. These resources can also be used for
Special Reporting sections within the Supplement. Please review Part 3. L. of the Supplement to
understand the objectives and procedures the auditors will use to test the report.
Background:
When a Federal awarding agency determines that L. Reporting is subject to audit and lists a
Performance report within Part 4.L.2. the agency must identify “Key Line Items” within the report.
If the Federal awarding agency does not identify any Key Line Items, the auditor is only required
to test compliance that the non-federal entity filed the report on time. In these cases, approval by
OMB is required for the report to be included in the Supplement.
Each Key Line Item identified by the Federal awarding agency must be quantifiable and capable
of evaluation against objective criteria. “Quantifiable” means that the item can be expressed as a
measurable number. “Objective” means the item can be evaluated against specified criteria. If
the auditor determines that a Key Line Item identified in Parts 4 or 5 is not quantifiable or not
able to be evaluated against objective criteria (e.g., narratives, forward-looking information,
information that would require verification at the program beneficiary level), the auditor is not
required to perform testing of the item. If none of the Key Line Items are quantifiable or capable
of evaluation against objective criteria, auditors are only required to test that the report was
submitted in a timely manner and no other procedures are required.
For identified Key Line Items that are quantifiable and capable of evaluation, the auditor must
obtain sufficient appropriate audit evidence for the following two audit objectives listed within
Part 3. L. Reporting:
1. Obtain an understanding of internal control, assess risk, and test internal control as required
by 2 CFR section 200.514(c).
2. Determine whether required reports for Federal awards include all activity of the
reporting period, are supported by applicable accounting or performance records, and are
fairly presented in accordance with governing requirements.
Audit Objective (1) above requires that if the auditor is not able to achieve a low control risk
related to the design, implementation, and operational effectiveness over the Performance Report
identified by the Federal awarding agency, then the auditor must report an audit finding.
Audit Objective (2) above, which relates to compliance, assumes that the non-federal entity will
have support for each Key Line Item(s) and that the support will be available to the auditor to test
at the time of the audit. The auditor will test the reporting of the performance data, and then it will
be up to the Federal government and public to use this data to evaluate the performance of the
non-federal entity, the program, or both.
Under 2 CFR 200.513(c)(4) the supplement is to focus the auditor on requirements most likely to
cause improper payments, fraud, waste, or abuse, or to generate audit findings for which the Federal
awarding agency will take sanctions. Reports and Key Line Items should be chosen based on this 2
CFR provision.
Template and Questions for Federal Awarding Agencies:
For each Performance Report listed by a Federal Awarding Agency in the Supplement, you must
include the following:
[Report Title: XYZ-98, Form Requesting Information] The Title of the
Performance Report is needed for the auditor to request a copy of the report and
any supporting documentation from the non-federal entity.
[OMB PRA Number: OMB No. 9999-999] The PRA Number is needed to ensure
that the non-federal entity has a legal requirement to submit the report to the
Government.
[Authoritative Requirement for Report: X CFR XYZ requires the report to be
submitted to awarding agency.] The location of authoritative requirement for the
non-federal entity to complete and submit the Performance Report is needed for
auditors to include with any audit finding.)
[Reporting period/submission date/s: Report is to be submitted quarterly by the
XYZth.] The Reporting Cycle (monthly, quarterly, yearly, grant close-out, etc.) is
needed to help auditors plan the audit and test timely submission.
[Link to report and report instructions: https:\\\XWYreportform.gov] Links will
help aid auditors in ensuring that the non-federal entity has provided them a valid
copy of the report it submitted to the Government and is used for definitions of
report elements.
Key Line Items - The following line items contain critical information:
1.
Line 1 Title of line [if appropriate–text as necessary to describe line.]
2.
Line 99 Title of line [if appropriate–text as necessary to describe line.]
This template should also be used for Special Reports an agency wants to include in the
Compliance Supplement.
Key Line Items: The chart below is an example of a tool the agency may use to help determine
whether or not a report line item should be considered for inclusion. For any key line item included
in the Supplement, the agency should be prepared to provide this information in detail.
Key Line
Item
1
2
3
4
Quantifiable Objective Criteria How Key Line Item Agency
for Evaluating Key Line Item is Used by Agency Tolerance for Key
Line Item Errors
•
The Title of the Key Line Item(s) is required in the Supplement for the auditor to assess
the non-federal entity’s controls to ensure the Key Line Item(s) is presented in accordance
with requirements and to obtain the non-federal entity’s support for the Key Line Item(s)
•
A detailed description of the line item and/or the quantifiable and objective criteria for
evaluating the Key Line Item(s) may be needed in the Supplement to complete testing and
reach a conclusion on each Key Line Item(s).
•
A description of how the Federal awarding agency uses the Key Line Item(s) to evaluate
the performance of the non-federal entity may be needed in the Supplement to determine if
any misstatements, including omissions, are material.
•
If known or determined by the Federal awarding agency, the agency’s tolerance/sensitivity
for misstatement, including omissions, from this Key Line Item(s) may be needed to
determine if any misstatements, including omissions, are material.
Remember that the Compliance Supplement contains guidance in Part 3 that auditors are
required to follow when testing reporting by non-federal entities. Therefore, Federal awarding
agencies should not to include compliance requirements, audit objectives, or suggested audit
procedures for auditing reporting. Additionally, Federal agencies should not include
information about sampling because the Compliance Supplement already includes, as part of
Other Audit Advisories, a reminder for auditors on the standards they must follow when
sampling.
Questionnaire to be completed by agency and submitted to OMB for newly added reports:
Questions that should be Answered “Yes” before Including a Performance Report or
Special Report in the Compliance Supplement:
Questions for the Federal Awarding Agency and OMB to consider when Federal Awarding
evaluating if a Performance Report and its Key Line Items should be
Agency Response
included or remain in the Compliance Supplement:
(Yes or No)
Is there a requirement for the non-federal entity to prepare and submit the
Performance Report to the Federal awarding agency?
Is there a requirement or expectation that has been communicated to the
non-federal entity for it to retain support for each Key Line Item(s)?
Is information from each reporting cycle (being audited) retrievable by
the non-federal entity? ( Note that reports submitted to the Federal agency
may be overridden by a subsequent report submission and therefore not
available publicly.)
Is an audit test necessary for the Federal awarding agency to verify the
accuracy of the Key Line Items? (Note that Key Line Items should not be
tested if the information can be verified by the agency in the normal
course of administering the program.)
Is the Performance Report and its Key Line Items essential for evaluating
the effectiveness of the non-federal entity, the program, or both?
Has the Federal awarding agency provided the non-federal entity with
clear and precise instructions of the governing requirements for
supporting each of the Key Line Items?
If there are errors in the Key Line Item(s), including omissions, reported
in an audit finding, will the Federal awarding agency implement
sanctions?
Given the clarity of the governing requirements, including the
instructions, will different auditors testing the same report come to the
same conclusion?
Is it worth taxpayers’ money to have all the identified Key Line Item(s)
subject to internal control and compliance testing by an independent
auditor? (Note that if other effective alternatives are within the agency
for achieving the desired level of assurance, the Key Line Item should
not be included.)
Is the number of Key Line Items identified reasonable and cost effective?
A “No” response to any of the questions above may indicate that the Performance Report, Key
Line Items, or both should not be included in the Compliance Supplement.
Attachment 4
Questions and Answers for Auditing Performance Reporting
What does “quantifiable and capable of evaluation against objective criteria” mean?
Quantifiable means able to be expressed or measured as a quantity or numbered amount. If a
Key Line Item cannot be quantified, it does not allow the auditor to reach a conclusion (i.e.,
conclude “yes” or “no”) regarding whether management’s information in the Key Line Item is
supported by applicable performance records. For example, consider two items in a performance
report related to the height of the Washington Monument with the first item not being auditable
and the second being audited as a Key Line Item. The first line item describes the monument as
a “grand” and the second line-item states that it is “554 feet 7 11/23 inches tall.” An independent
auditor would not be able to conclude whether there are performance records supporting the
monument being described as “grand.” Additionally, “grand” cannot be audited because it is not
defined with objective criteria; “grand” is subjective and open to interpretation. As a result, one
auditor may compare the Washington Monument to other monuments around the world and
conclude it is not grand and another auditor may compare it to other monuments within D.C. and
conclude that it is grand.
As for the height in feet and inches, it is a measured quality and, therefore, quantifiable.
However, the auditor would not use the length of their own “feet” to evaluate management’s
measurement, but would use feet and inches as defined by the National Institute of Standards and
Technology (NIST) because NIST provides an objective criterion to evaluate against. If feet and
inches were not clearly defined by an entity other than the auditor or the auditee, it would not be
considered “objective” and would, therefore, preclude the auditor from testing the height.
In the example above, would the auditor remeasure the height of the Washington
Monument?
Not necessarily. The auditor would first be required to gain an understanding of management’s
critical controls for reporting the height of the Washington Monument. If the design of
management’s internal controls for reporting the height of the Washington Monument does not
appear to be reasonable, the auditor would be required to report an audit finding and could elect
to measure the monument or perform other procedures to test the accuracy of the reported height.
However, if management’s internal controls appear reasonable for reporting the height of the
Washington Monument, the auditor would review evidence that management’s critical control was
applied to the measurement and reporting of the height and would review management’s
supporting records for the reported measurement to evaluate if the measurement and reporting
were done in accordance with governing requirements.
Would an auditor be able to conclude on the future height of the Washington Monument?
No. It is believed the Washington Monument is sinking into the soil and, therefore, its height
measured from ground-level to the top is declining. Even if the monument were sinking
consistently at a set rate for the last 100 years, the auditor would not be able to audit
management’s prediction/expectation on the future rate of sinking because the future is unknown
and is subject to change.
| File Type | application/pdf |
| File Title | PREPARATION GUIDE |
| Author | LMI-Lynda Blair |
| File Modified | 2023-07-28 |
| File Created | 2023-07-28 |