Appendix V

List of Changes for the 1999 Compliance Supplement

This Appendix provides a list of changes from the OMB Circular A-133 Compliance Supplement issued in May 1998 to this 1999 Supplement.

Part 1 - Background, Purpose, and Applicability

• Updated for the effective date of this Supplement.
• Removed reference to the 1990 and 1991 compliance supplements which had been previously superseded.

• Removed reference to separate Department of Housing and Urban Development (HUD) Supplement for Housing Authorities. The programs in the HUD supplement have been either added to this Supplement or are covered by Part 7, "Guidance for Auditing Programs Not Included in this Supplement."

• Added description of a new appendix titled "Advisory to Federal Grantees on Responsibility to Address the Year 2000 Issue - Appendix VI."

• Updated section, "How to Obtain Additional Guidance," to reflect current information.

   

Part 2 - Matrix of Compliance Requirements

• Updated for new programs and changes to existing programs.

• B. Allowable Costs/Cost Principles - Added in the compliance requirements, audit objectives, and suggested audit procedures provisions for testing large research facilities construction costs consistent with revisions to OMB Circular A-21. Under suggested audit procedures added advice concerning the auditor consulting with the auditee on the most efficient alternative to audit indirect cost rate proposals. Under "Comparison Among OMB Cost Principles Circulars" added changes to Exhibits 1 and 2 - to reflect revision to OMB Circular A-122.
• C. Cash Management - Amended description of funding methods to recognize that the Treasury-State Agreement may provide for funds to be requested more than 3 days in advance. Added Internet reference to the U.S. Treasury, Financial Management Service's Cash Management Improvement Act home page. Added suggested audit procedures covering States' determination of large programs covered by the Treasury-State Agreement and determination of clearance patterns. Added suggested audit procedure to test that program income was disbursed before additional Federal funds were requested. Revised the grouping of the suggested audit procedures to: States; States and Other Recipients; and Other Recipients and Subrecipients.
• D. Davis-Bacon Act - Added Internet reference to the U.S. Department of Labor, Employment Standards Administration's Davis-Bacon Act home page.
• J. Program Income - Added additional paragraph references to A-102 Common Rule and OMB Circular A-110.
• L. Reporting - Revised the address of OMB's Internet home page. Deleted reference to OMB's FAX information line which is no longer available.
• M. Subrecipient Monitoring - Added to suggested audit procedures examples of award information (e.g., CFDA title and number, award name, name of Federal agency).
• N. Special Tests and Provisions - Added clarification concerning the auditor's responsibility to test for compliance with the Year 2000 problem in computer systems.

Part 4 - Agency Program Requirements

• Added the following new programs:

• CFDA 10.551 and 10.561 - Under "II. Program Procedures" moved first paragraph to end of section under new heading "Source of Governing Requirements." Updated description of program for Electronic Benefit Transfer (EBT) related information. Clarified Federal offices oversight responsibilities. Updated Food Stamp error rates. Updated "G.1 Matching" to describe reduction in Federal share due to TANF recoveries. Clarified that private in-kind contributions are not countable toward the matching. Added language to "I. Procurement" to clarify that contracts for EBT systems require FNS review regardless of cost. Clarified in "L. Reporting" that the FNS-46 must separately identify benefit amounts issued under each type of issuance system operated. Clarified that line 15 in the FNS 209 represents all payments in coupons or EBT. Under "N.1 ADP Systems" moved part of the "Note" from under the caption to the first paragraph under "Suggested Audit Procedures." Updated "N.2 EBT Reconciliation" for changes in proces.
• CFDA 10.553, 10.555, 10.556, 10.559 - Under "II. Program Procedures," moved first paragraph to end of section under new heading "Source of Governing Requirements." Updated and clarified program procedures. Added a new special test and provision, "N.3 School Food Accounts." Deleted "IV. Other Information" which was transitional guidance from the 1997 to the 1998 Compliance Supplements.
• CFDA 10.557 - Under "II. Program Procedures" moved first paragraph to end of section under new heading "Source of Governing Requirements." Updated and clarified program procedures. Updated "A. Activities Allowed or Unallowed," "E. Eligibility," and "H. Period of Availability of Funds" for revised requirements.
• CFDA 10.558 - Under "II. Program Procedures" moved first paragraph to end of section under new heading "Source of Governing Requirements." Updated "Program Procedures" to recognize after-school at risk programs and other changes added by the William F. Goodling Child Nutrition Reauthorization Act of 1998 (P.L. 105-336). Revised compliance requirements to include requirements related to after-school at risk programs in "A.1 Activities Allowed or Unallowed, Reimbursement for Meals," "E.1 Eligibility for Individuals", and "E.3 Eligibility for Subrecipients." Deleted "IV. Other Information" which was transitional guidance from the 1997 to the 1998 Compliance Supplements.
• CFDA 10.568 and 10.569 - Under "I. Program Objectives" moved end of first paragraph to end of "II. Program Procedures" under new heading "Source of Governing Requirements." Clarified "II. Program Procedures." Changed EFOs (Emergency Feeding Organizations) to ERAs (Eligible Recipient Organizations). In "A. Activities Allowed or Unallowed," clarified that a State or ERA can use administrative funds for certain activities related to distributing non-USDA food and corrected a regulatory reference. Clarified in "E.3 Eligibility of Subrecipients" that ERAs can enter into agreements with other ERAs. In "G.1 Matching" deleted a reference to a requirement that the State's distribution plan address how the matching requirement will be met. Revised "L.1 Financial Reporting" to correct applicability of SF-270, to correct the title of form FCS-667 and to delete a reference to State-imposed reporting requirements. Deleted report in "L.3 Special Reporting" which is no longer applicable.
• CFDA 14.182, 14.855, 14.856, and 14.857 - Split the Section 8 Cluster into two clusters, a Section 8 Project-Based cluster (CFDA 14.182, 14.195, and 14.856) and a Section 8 Tenant-Based cluster (14.855 and 14.857). A program previously included with no CFDA number, Section 8 Moderate Rehabilitation Program for Single Room Occupancy Dwellings for Homeless Individuals, was deleted from the cluster and this Supplement. Substantial revisions were made to the Supplement sections for these programs due to including guidance for audits of Public and Indian Housing Authorities and the cluster change.
• CFDA 14.218 - Deleted reference to activities included on reports but not action plans in "II. Program Procedures." Clarified item 6. in "A. Activities Allowed or Unallowed" that action plans can be amended. Added explanation of when income is not considered "program income" in "J. Program Income." Revised "L.1 Financial Reporting" for performance reporting under the new Integrated Disbursement and Information System.
• CFDA 14.231 - Clarified in "N.1 Maintenance As Homeless Shelter" that the 3 year requirement applies to buildings used for rehabilitation and renovation and that the 10 year requirement applies when the federally funded rehabilitation or renovation was "major."
• CFDA 14.238 - Deleted two sections of Annual Progress Report that auditor is no longer required to test in "L.1 Financial Reporting." Revised suggested audit procedures for "N.1 Rent Reasonableness."
• CFDA 20.106 - Updated legal reference in "F. Equipment and Real Property Management." Under "L.1 Financial Reporting" added two new reports. Revised "N.1 Revenue Diversion" for new policies and procedures concerning the generation and use of airport revenue. Added "IV. Other Information" related to audit requirements under the Federal Aviation Reauthorization Act of 1996.
• CFDA 20.205 - Revised "II. Program Procedures" to reflect changes in policies and procedures. In "A. Activities Allowed or Unallowed," revised original requirement 1 and deleted prior original requirements 3, 7, 8, and 10. Added "F. Equipment and Real Property Management." In "G.1 Matching," added language to clarify that third-party donations of services by local governments cannot count towards the non-Federal share of the project. Added new paragraphs "G.1.d" and "G.1.e." Deleted "G.3 Earmarking" requirement. Clarified the allowable use of program income in "J. Program Income." Deleted report in "L.1. Financial Reporting." Clarified compliance requirement in "N.4 Project Extensions." Deleted suggested audit procedure "c." in "N.5 Sample Program." Clarified compliance requirement in "N.7 Project Approvals."
• CFDA 20.500 and 20.507 - Revised the compliance requirement in "F. Equipment and Real Property Management."
• CFDA 66.458 - Changed referenced title of program to Clean Water State Revolving Fund (CWSRF) and changed Part 2, "Matrix of Compliance Requirements" to show "I. Procurement and Suspension and Debarment" and "K. Real Property Acquisition and Relocation Assistance" as applicable. Added discussion in "II. Program Procedures" on the allowability of transferring funds to CFDA 66.468. Corrected CFR reference in "H. Period of Availability of Funds." Revised compliance requirement in "L.3 Special Reporting" to delete reference to binding commitments. Added suggested audit procedure to "N.2 Binding Commitments." Added "IV. Other Information" related to loans to subrecipients.
• CFDA 83.516 - Deleted this program which was removed from the CFDA effective October 1, 1997. It was split into two separate CFDA numbers: CFDA 83.543, Individual and Family Grants; and CFDA 83.544, Public Assistance Grants, which are included in this Supplement.
• CFDA 84.000 - Revised for addition of 2 new programs, Vocational Education - State Basic Grant Program (Vocational Education) (84.048) and Special Education - Grants for Infants and Families with Disabilities (IDEA, Part C) (84.181). Added language to "I. Program Objectives" and "II. Program Procedures" to recognize that additional information on these topics can be found in the individual program sections. Moved discussion of "School-Wide Programs" to recognize that such programs can affect both ESEA and non-ESEA programs. Under "A. Activities Allowed or Unallowed," revised "A.1. Consolidation of Administrative Funds" to clarify the expenditure of such funds are allowable if they are allowable under any of the contributing programs. Also revised "A.4 School-Wide Programs" to reflect that it applies to Vocational Education (84.048). Under "B. Allowable Costs/Cost Principles," revised "B.1. Alternative Fiscal and Administrative Requirements" to clarify that if a State adopts its own cost principles, they must be consistent with A-87; and "B.2 Indirect Costs" to clarify the restricted indirect cost rate guidance and add that it is applicable to Adult Education (84.002), IDEA (84.027 and 84.173),Vocational Education (84.048), and IDEA, Part C (84.181). Revised "H. Period of Availability of Funds" to: (1) reflect that it applies to Vocational Education (84.048) and IDEA, Part C (84.181); (2) show separately restriction for Title 1 (84.010); (3) add additional restriction for SDFSC (84.186) and exception to basic requirement for Vocational Education (84.048); and (4) add appropriate statutory references. Revised "L.1 Financial Reporting" to correct and update its applicability and to reflect implementation of new Grants Administration and Payment System (GAPS). Revised "N.1. Participation of Private School Children to indicate that how these provisions are implemented by the individual auditee will determine whether it is a "general cross-cutting provision." Added Vocational Education (84.048) to programs for which "N.2 Schoolwide Programs" is applicable. Added Vocational Education (84.048) to programs for which "IV. Other Information C. Schoolwide Programs" is applicable. Corrected reference in "N.3 Comparability" compliance requirement.
• CFDA 84.002 - Revised "II. Program Procedures" to recognize that this program was reauthorized in 1998 under a new statute. Added reference to ED cross-cutting section in "B. Allowable Costs/Cost Principles" to reflect that the restricted indirect cost rate described in that section is applicable to this program. Revised "L.1 Financial Reporting" to reflect implementation of new Grants Administration and Payment System (GAPS).
• CFDA 84.011 - Updated "L.3 Special Reporting" to reflect that the special report was replaced by a new report.
• CFDA 84.027 and 84.173 - Added reference to ED cross-cutting section in "B. Allowable Costs/Cost Principles" to reflect that the restricted indirect cost rate described in that section is applicable to this program.
• CFDA 84.032 - Updated "II. Program Procedures" for changes to law and added a new paragraph "Source of Governing Requirements." Updated and corrected reference in "A. Activities Allowed and Unallowed." Revised "L.3 Special Reports" to: (1) delete the ED 704 report; (2) clarify that in NSLDS "outstanding principal" is a key item for all loans, not just those in default status; and (3) revise references to special tests and provisions. Added regulatory citation to "N.1 Current Records." Deleted prior "N.2 Transition Support." Renumbered remaining special tests and provisions. (The following changes are referenced to the new numbers.) Revised "N.2 Federal Reinsurance Rate" to clarify and update for changes in the law. Revised "N.5" to reflect the "Default Aversion Assistance" provisions which replaced the prior "Pre-Claims and Supplemental Pre-Claims Assistance" in the HEA. Revised suggested audit procedures, accordingly. Updated "N.8. Federal Share of Borrower Payments" for changes in the HEA. Clarified statutory citation in "N.9 Assignment of Defaulted Loans to ED." Revised compliance requirements, audit objectives and suggested audit procedures for "N.10 Federal Student Loan Reserve Fund and Agency Operating Fund" to reflect changes in the HEA. Revised compliance requirements, audit objectives and suggested audit procedures for "N.11 Investments - Federal Student Loan Reserve Fund (Reserve Fund)" to reflect changes in the HEA.
• CFDA 84.126 - Updated statutory references in "E.1 Eligibility of Individuals" and "H. Period of Availability of Federal Funds." Deleted outdated and necessary provision in "J. Program Income." Revised "L.1 Financial Reporting" to reflect implementation of new Grants Administration and Payment System (GAPS). Deleted report (RSA-113, Quarterly Cumulative Caseload Report) in "L.2 Performance Reporting."
• School-to-Work (page 84.278) - Revised "L.1 Financial Reporting" to reflect implementation of new Grants Administration and Payment System (GAPS).
• CFDA 84.281 - Added reference to ED cross-cutting section in "G.3 Earmarking" related to use of unneeded program funds.
• CFDA 84.288 - Deleted reference to ED cross-cutting section in "C. Cash Management" which was in error.
• CFDA 93.044 - Corrected error in "G.2.1 Level of Effort."
• CFDA 93.558 - Updated "II. Program Procedures" to delete transitional information. Clarified eligibility requirement in "E.1 Eligibility of Individuals." "Revised G.2.1 Level of Effort - Maintenance of Effort" and "G.3 Eligibility" to provide additional explanation of the requirement. Deleted transitional information from "L.3 Special Reporting." Revised "N.2 Income Eligibility and Verification System" to provide more detailed information on the compliance requirement and to exclude Federal tax return information. Added section for transfers into TANF in "IV. Other Information."
• CFDA 93.914 - Clarified requirement in "H. Period of Availability of Federal Funds."
• CFDA 94.006 - Revised "E.1 Eligibility for Individuals" to add the living allowances for the 1999-2000 period.
• CFDA 94.011 and 94.016 - Revised "E.1 Eligibility for Individuals" to add a Federal Register reference for the latest published income eligibility levels.
• CFDA 96.001 and 96.006 - Clarified that this program as included in the 1998 Compliance Supplement was actually a cluster consisting of CFDAs 96.001 - Social Security-Disability Insurance and 96.006 - Supplemental Security Income. Clarified "I. Program Objectives" and "II. Program Procedures." Added language to clarify "A. Activities Allowed or Unallowed." Added language to "B. Allowable Costs Cost Principles" to (1) clarify that POMS applies to both programs in the cluster, (2) clarify that indirect costs should charged at an approved rate, and (3) provide further explanation of requirements pertaining to non-SSA work. Revised "L.1 Financial Reporting" to reflect changes in the applicability of standard reports and to add a new report.
• Revised program names where necessary to be consistent with the Catalog of Federal Domestic Assistance (CFDA).

   

Part 5 - Clusters of Programs

• Added the following new program to the Student Financial Assistance Cluster:

93.925 - Scholarships for Health Professions Students From Disadvantaged

      Backgrounds (SDS)       5-3-1

 

• Student Financial Assistance Cluster - Revised "Part II Program Procedures" to reflect enactment of the Higher Education Amendments of 1998 (P.L. 105-244) and the Health Professions Partnership Act of 1998 (P.L. 105-392). Added a new program to the cluster, CFDA 93.925, which will replace CFDA 93.820, as a result of P.L. 105-392. Corrected a regulatory reference in "A. Activities Allowed or Unallowed" for the HPSL and NSL programs. Corrected a regulatory reference in "C. Cash Management." Revised "E. Eligibility" to (1) reflect changes in the law pertaining to the HPSL, NSL, HEAL, EFNS, FPL, FFEL and FDL programs, and (2) correct regulatory citations. Updated "G. Matching" to delete reference to the ELO program under the FPL program and update the FWS requirements for changes in the law. Added a description of the requirement for "J. Program Income" for the FPL program. Revised "L.1 Financial Reporting" to reflect implementation of new Grants Administration and Payment System (GAPS). Revised "L.3 Special Reporting" to update example in "L.3.a" and add a new "L.3.b FPL and Grant Overpayment Reporting to the National Student Loan Data System (NSLDS)." Corrected regulatory reference in "N.1 Separate Funds." Revised "N.3 Disbursements to Students" to clarify and update for changes in requirements. Revised "N.4 Refunds" to clarify and update for changes in requirements and add regulatory citations. Updated "N.5 Student Status Changes" for changes in requirements. Updated "N.6 Student Loan Repayments" for changes in requirements for HPSL and NSL programs. Revised "N.7 Federal Work Study Agreements" to delete compliance requirements that are not covered by the audit objective and suggested audit procedures. Added a new special test and provision titled "N.8 Borrower Data Transmission and Reconciliation."
• Updated list of other clusters for programs included in this Supplement.

Part 6 - Internal Control

• In the "Introduction," added characteristic pertaining to the establishment of an audit committee or equivalent for entities with governing boards to Control Environment," "Control Activities," and "Monitoring."
• In "I. Procurement and Suspension and Debarment," under "Information and Communication" added control characteristic that procurement staff are provided a current "List of Parties Excluded from Federal Procurement or Nonprocurement Programs."

Part 7 - Guidance for Auditing Programs Not Included in This Compliance Supplement

• Removed reference to separate HUD audit guide for audits of Public and Indian Housing Authorities from "Steps for Identifying Compliance Requirements."
• Under "L. Reporting," added information concerning the Paperwork Reduction Act.

Appendix I - Federal Programs Excluded From the A-102 Common Rule

• Revised "Differences pertaining to financial reporting" to reflect inclusion of Child Support Enforcement--Title IV-D (CFDA 93.563) and Foster Care--Title IV-E (CFDA 93.658) in this Supplement.

Appendix II - Federal Agency Codification of Certain Governmentwide Grant Requirements

• Updated for Department of Commerce's adoption of OMB Circular A-110.

Appendix III - Federal Agency Contacts for A-133 Audits

• Updated Federal agency contacts.

Appendix IV - Internal Reference Tables

• Updated tables for changes in the Supplement.

Appendix V - List of Changes for the 1999 Compliance Supplement

• Updated this Appendix to provide a list of changes from the OMB Circular A-133 Compliance Supplement issued in May 1998 to this 1999 Supplement.

Appendix VI -Advisory to Federal Grantees on Responsibility to Address the Year 2000 Issue

• Added this Appendix to provide copy of March 19, 1998, advisory from OMB to Federal agencies which is referenced in Part 3, "N. Special Tests and Provisions."