Understanding the A-133 Audit

Issued by the Office of Management and Budget (OMB), Circular A-133 outlined audit requirements for nonprofit organizations, state and local governments, and educational institutions that received federal funding. Entities that expended $500,000 or more in federal funds within a fiscal year were required to undergo an A-133 audit.

The purpose of the audit was to:

• Verify compliance with federal grant regulations.
• Assess financial statements and internal controls.
• Identify any misuse or mismanagement of federal funds.

Transition to Uniform Guidance

In December 2014, the OMB replaced Circular A-133 with the Uniform Guidance (2 CFR Part 200) to streamline federal grant management and compliance. The new framework introduced key changes:

• The audit threshold increased from $500,000 to $750,000, meaning only entities expending $750,000 or more in federal funds are now required to undergo a Single Audit.
• More emphasis was placed on risk-based audits, reducing the burden on lower-risk entities.
• Standardized administrative, cost, and audit requirements for all federal awards.

Current Single Audit Requirements

Under the Uniform Guidance, organizations meeting the $750,000 expenditure threshold must:

1. Engage an independent auditor to conduct the audit.
2. Prepare a Schedule of Expenditures of Federal Awards (SEFA) to document all federal fund usage.
3. Submit the audit report to the Federal Audit Clearinghouse (FAC) within nine months of the fiscal year-end or within 30 days of receiving the final audit report.
   
    

Conclusion

The A-133 audit framework played a crucial role in ensuring grant compliance but has been fully integrated into the Uniform Guidance. Entities that receive federal funding should follow the current Single Audit requirements to maintain compliance and avoid penalties.