Omni Circular changes in full effect by January 2015


Other federal statutes have been instituted with similar goals in mind, but the Omni Circular is unique in the changes it imposed regarding administrative requirements.

The office of Management and Budget is attempting to make good on its vow to streamline guidance for costs principles, audits and administrative requirements associated with federal awards. In that interest, the OMB issued an update designed to enhance the focus of federal resources "while ensuring the financial integrity of taxpayer dollars in partnership with non-federal stakeholders."

Those seeking federal grants now operate in an environment that features considerably more risk, both in the pre- and post-award stages. In essence, granting agencies face more pressure to verify the value of their assistance programs, both in terms of quantifiable results and the processes by which they adhere to federal budget and management priorities. These priorities are laid out by the OMB's Omni Circular, which aims to increase competition for grant funds while keeping all parties accountable.

Clarity and consolidation
Other federal statutes have been instituted with similar goals in mind, but the Omni Circular is unique in the changes it imposed regarding administrative requirements. Officially phased in Dec. 26, 2013, the Omni Circular allowed federal agencies six months to implement the regulations. Its terms also impact principles for costs and the manner in which audits of organizations receiving federal awards proceed. Meanwhile, colleges, universities and nonprofits, as well as state and local governments, were granted a full year to implement adjustments based on the new policies and procedures. Therefore, unless otherwise specified by a separate statute, all terms of the Omni Circular are applicable for all entities as of Dec. 26, 2014.

Among the changes pertaining to audits are the following:

  • Increased threshold for an A-133 audit
  • Increased Type A threshold
  • Fewer requirements for expenditure tests
  • Increased threshold for reporting questioned costs 

The hope is that in the long run, these changes will minimize the burden for non-federal entities applying for federal money, with risk, waste, fraud and abuse all theoretically reduced, as well. It should also be noted that the Omni Circular guidelines override requirements contained in previous circulars and the single-act follow-up. And according to the Federal Register, there's a potential for cost principles pertaining to hospitals and the Department of Health and Human Services to be incorporated into the Omni Circular terms as part of the long-term initiative for consolidating the now-outdated citations.

For more information on how the changes could affect a given organization, contact a LaPorte nonprofit industry group professional. 

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