Office of Management and Budget, OMB Circular A-133 is an organization-wide audit of an entity that expends $750,000 or more of Federal assistance received for its operations.
The A-133 Compliance Supplement is a guide created by the OMB and used in auditing federal assistance and federal grant programs, as well as their respective recipients.
Any firm that undergoes the single audit must comply with all of the compliance audit requirements. This is a summary of a series of directives from the federal laws and regulations.
The Compliance Audit Requirements are as follows:
Activities allowed or un-allowed
This compliance requires each program to operate for a specific purpose, and that funds provided for the program will benefit the purpose.
Allowable costs/cost principles
This requirement provides the basis and principles recipients must adhere to when spending federal funds. Adequate and relevant accounting documentation is mandatory to fulfill this compliance.
This section covers the actual management, or handling, of funds pertaining to a federal program. It covers reimbursement of funds and advances of funds.
This act ensures compliance with the US labor act. It promotes fair remuneration of workers, contractors, and subcontractors.
It ensures that only eligible entities and individuals benefit from federal assistance programs.
Equipment and real property management
This section established directives on how a recipient should manage equipment and real property of a federal program.
Matching, level of effort, earmarking
This section contains the duties, responsibilities, and rights that the recipients fulfill. Failure to meet these requirements may result in either limitation of future funds or termination of assistance.
Period of availability of federal funds
Individual federal grants are awarded for a specified time, usually one year.
Procurement and suspension and debarment
This section covers compliance of laws and regulations when obtaining a good or services from a vendor, supplier, or provider.A-133 compliance supplement is mandatory.
The income is deducted, added to the current budget or used to meet other requirements.
Real property acquisition and relocation assistance
This section covers compliance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA).
All recipients must submit OMB circular A-133 reports to the federal government for accounting purposes.
Every member is responsible to monitor the federal assistance activities of that sub-recipient, as well as assure that they follow the compliance audit requirements.
Special tests and provision
This section covers unique compliance dictated by laws, regulations and contract agreements.
The OMB provides detailed explanations, discussions, and guidance about them in the OMB A-133 Compliance Supplement. The OMB circular A-133 ensures compliance with the Federal Audit requirements.