While most of the rules governing things like allowable costs, cash management and reporting did not change substantively, there is much more emphasis on a grantee’s internal control policies and procedures. For instance, Federal grant recipients will be required to have written policies and procedures, at a minimum, over:
- Determining allowable costs
- Cash management
- Procurement *
- Sub-recipient monitoring
- Travel reimbursement
While many governments rely on compliance with State laws (i.e. Massachusetts MGL Chapter 30B) to evidence compliance with Federal requirements, simply referencing the State law will no longer suffice; the local entity must have its own procurement policy that addresses all the criteria outlined in the “claw” above.
- The Single Audit threshold (total Federal expenses that trigger the Single Audit requirement) will increase from $500,000 to $750,000
- Criteria for determining what are called A and B programs will increase greatly
- High versus low risk program determination have been modified
- The percentage coverage (percent of Federal expenses that must be audited) have decreased All of these changes will most likely result in your auditor having to test fewer Federal grants in order to comply with the Single Audit Act beginning with your calendar year 2015 / fiscal year June 30, 2016 audits.