Jan 25, 2017
Ann M. Cole CPA
With the implementation of the audit requirements under the Uniform Administrative requirements, Cost Principles and Audit Requirements for Federal Awards (2 CFR 200)(“UG”) the major program thresholds have changed from the previous guidance in OMB Circular A-133 (“OMB-A-133”). Formerly, the lowest level threshold for a major program in OMB A-133 was $300,000 for a type A level program but the UG raised that level to $750,000. The UG has also updated the criteria chart to include more levels of thresholds for type A programs. The former chart in OMB A-133 had three levels of thresholds where the UG has six. This chart assists the auditor in determining the starting point for major program determination.
To begin, the auditor will obtain a schedule of expenditures of federal awards (“SEFA”) from the client. After checking that all federal award program expenditures are included on the SEFA, the auditor then compares total federal awards expended (the SEFA’s bottom line) to the chart shown above. If the total awards expended are less than or equal to $25 million, the lowest threshold of $750,000 would apply. If the total awards expended were between an excess of $100 million and $1 billion, the type A threshold would be $3 million.
This chart is not only useful to an auditor but could be a tool for the auditee (client) as well. Once the client has prepared their SEFA, they can refer to the chart to determine their type A threshold. This is useful information to the client so they are able to make an estimate of the programs their auditor would be interested in speaking with them about and assist the auditee in getting ready for the auditor’s visit. The auditee would be able to communicate with various divisions or departments who may administer the federal award and let them know to have their grant and expenditure documentation available instead of filing it away or otherwise archiving the information.