2 Keys to Understanding the OMB’s 2018 Compliance Supplement for Single Audits– July 01, 2018

Posted by Sean Kilcher, CPA

The 2018 OMB Compliance Supplement has arrived and, as always, is important for auditors of nonprofit organizations receiving federal funding. Rather than issuing a whole new supplement this year, the new version “simply” includes any sections that were modified from the 2017 version.
 
As a result, the 2018 Supplement is referred to as the “skinny” supplement — a welcome sight with “only” 250 pages versus the 1600-plus-page 2017 Supplement. However, certain nuances to the new Supplement can be tricky, especially since it will need to be used in conjunction with the 2017 Supplement. Below are the two keys that can help you more easily navigate the most important changes.

1. Know Where to Look First

Appendix V identifies all changes at a high level as well as specific programmatic changes by the CFDA number, so it’s easily searchable for any applicable grants. Appendix V provides a great roadmap to get started. 

2. Use the Table of Contents

The TOC not only breaks out the document into parts one through seven, with a few exceptions, but it shows when, and when not, to use the 2017 Supplement.

Here are the changes you can expect to find in each part:
 
Part 1.  This supersedes Part 1 of the 2017 Supplement and outlines the effective date (fiscal years beginning after June 30, 2017).
Part 2.  This part is NOT included in the 2018 Supplement. For new or revised programs, use the matrices included in Parts 4 and 5. For programs not included in these matrices, use Part 2 of the 2017 Supplement.
Part 3.  Only one section was updated in Part 3 (Section 3.2.I “Procurement and Suspension and Debarment”). This is a hot issue for many not-for-profits. Use the 2017 Supplement for the remainder of Part 3.
 
>> Read more on the updated procurement standards in What NFPs Need to Know About the New Procurement Standards Effective in 2018.
 
Part 4.  This outlines programs with changes. Again, if a program is included here, use this Supplement. If not, use Part 2 of the 2017 Supplement.
Part 5.  This outlines updates to clusters, which were very minimal.
Parts 6 & 7.  These parts were not updated and therefore are NOT included in the 2018 Supplement. Use the 2017 supplement.
 
Access the full 2018 OMB Compliance Supplement for further reference.
 
Please contact a member of your service team, or contact Sean Kilcher at skilcher@cohencpa.com or Marie Brilmyer at mbrilymer@cohencpa.com for further discussion.
 

Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.