PART_NN1 1_CRD –_PUN BACKGROUND_NN1 ,_PUN PURPOSE_NN1 ,_PUN AND_CJC APPLICABILITY_NN1 
BACKGROUND_NN1 
The_AT0 Single_AJ0 Audit_NN1 Act_NN1 of_PRF 1984_CRD established_AJ0 requirements_NN2 for_PRP audits_NN2 of_PRF states_NN2 ,_PUN local_AJ0 governments_NN2 ,_PUN and_CJC Indian_AJ0 tribal_AJ0 governments_NN2 that_CJT administer_VVB federal_AJ0 financial_AJ0 assistance_NN1 programs_NN2 ._SENT In_PRP 1985_CRD ,_PUN the_AT0 Office_NN1 of_PRF Management_NN1 and_CJC Budget_NN1 (_PUL OMB_NP0 )_PUR issued_VVD OMB_NP0 Circular_NP0 A-128_NP0 ,_PUN "_PUQ Audits_NN2 of_PRF State_NN1 and_CJC Local_AJ0 Governments_NN2 ,_PUN "_PUQ to_TO0 provide_VVI implementing_VVG guidance_NN1 ._SENT In_PRP 1990_CRD OMB_NP0 administratively_AV0 extended_VVD the_AT0 single_AJ0 audit_NN1 process_NN1 to_PRP non-profit_AJ0 organizations_NN2 by_PRP issuing_VVG OMB_NN1 Circular_NN1 A-133_NN1 ,_PUN "_PUQ Audits_NN2 of_PRF Institutions_NN2 of_PRF Higher_AJC Education_NN1 and_CJC Other_AJ0 Non-Profit_AJ0 Organizations_NN2 ._SENT "_PUQ On_PRP July_NP0 5_CRD ,_PUN 1996_CRD ,_PUN the_AT0 president_NN1 signed_VVD the_AT0 Single_AJ0 Audit_NN1 Act_NN1 Amendments_NN2 of_PRF 1996_CRD (_PUL 31_CRD USC_NP0 Chapter_NN1 75_CRD )_PUR ._SENT The_AT0 1996_CRD Amendments_NN2 extended_VVD the_AT0 statutory_AJ0 audit_NN1 requirement_NN1 to_PRP non-profit_AJ0 organizations_NN2 and_CJC substantially_AV0 revised_AJ0 various_AJ0 provisions_NN2 of_PRF the_AT0 1984_CRD Act_NN1 ._SENT 
On_PRP June_NP0 30_CRD ,_PUN 1997_CRD ,_PUN OMB_NP0 issued_VVD revisions_NN2 to_PRP OMB_NP0 Circular_NP0 A-133_NP0 (_PUL 62_CRD FR_NN0 35278_CRD )_PUR to_TO0 implement_VVI the_AT0 1996_CRD Amendments_NN2 ,_PUN extend_VVB the_AT0 circular_NN1 's_POS coverage_NN1 to_PRP states_NN2 ,_PUN local_AJ0 governments_NN2 ,_PUN and_CJC Indian_AJ0 tribal_AJ0 governments_NN2 ,_PUN and_CJC rescind_VVB OMB_NN1 Circular_NN1 A-128_CRD ._SENT The_AT0 1996_CRD Amendments_NN2 required_VVD the_AT0 Director_NN1 ,_PUN OMB_NP0 ,_PUN to_TO0 periodically_AV0 review_VVI the_AT0 audit_NN1 threshold_NN1 ._SENT On_PRP June_NP0 27_CRD ,_PUN 2003_CRD ,_PUN OMB_NP0 amended_VVD OMB_NP0 Circular_NP0 A-133_NP0 (_PUL 68_CRD FR_NN0 38401_CRD )_PUR to_TO0 increase_VVI the_AT0 audit_NN1 threshold_NN1 to_PRP an_AT0 aggregate_AJ0 expenditure_NN1 of_PRF $_NN0 500_CRD ,_PUN 000_CRD in_PRP federal_AJ0 funds_NN2 and_CJC to_TO0 make_VVI changes_NN2 in_PRP the_AT0 thresholds_NN2 for_PRP cognizant_NN1 and_CJC oversight_NN1 agencies_NN2 ._SENT Those_DT0 changes_NN2 took_VVD effect_NN1 for_PRP fiscal_AJ0 years_NN2 ending_VVG after_PRP December_NP0 31_CRD ,_PUN 2003._CRD OMB_NP0 further_AV0 amended_VVD the_AT0 circular_NN1 on_PRP June_NP0 26_CRD ,_PUN 2007_CRD (_PUL 72_CRD FR_NN0 35080_CRD )_PUR ,_PUN to_PRP (_PUL 1_CRD )_PUR update_VVB internal_AJ0 control_NN1 terminology_NN1 and_CJC related_AJ0 definitions_NN2 and_CJC (_PUL 2_CRD )_PUR simplify_VVB the_AT0 auditee_NN1 reporting_NN1 package_NN1 submission_NN1 requirement_NN1 ._SENT 
On_PRP December_NP0 26_CRD ,_PUN 2013_CRD ,_PUN OMB_NP0 Circular_NN1 A-133_NN1 was_VBD superseded_VVN by_PRP the_AT0 issuance_NN1 of_PRF 2_CRD CFR_NP0 Part_NN1 200_CRD ,_PUN Subpart_NP0 F_NP0 ._SENT Among_PRP other_AJ0 things_NN2 ,_PUN those_DT0 changes_NN2 increased_VVD the_AT0 audit_NN1 threshold_NN1 to_PRP $_NN0 750_CRD ,_PUN 000_CRD for_PRP auditee_NN1 fiscal_AJ0 years_NN2 beginning_VVG on_PRP or_CJC after_PRP December_NP0 26_CRD ,_PUN 2014_CRD and_CJC made_VVD changes_NN2 to_PRP the_AT0 major_AJ0 program_NN1 determination_NN1 process_NN1 ._SENT 
The_AT0 Compliance_NN1 Supplement_NN1 (_PUL Supplement_NN1 )_PUR is_VBZ based_VVN on_PRP the_AT0 requirements_NN2 of_PRF the_AT0 1996_CRD Amendments_NN2 and_CJC 2_CRD CFR_NP0 Part_NN1 200_CRD ,_PUN Subpart_NN1 F_ZZ0 ,_PUN which_DTQ provide_VVB for_PRP the_AT0 issuance_NN1 of_PRF a_AT0 compliance_NN1 supplement_NN1 to_TO0 assist_VVI auditors_NN2 in_PRP performing_VVG the_AT0 required_AJ0 audits_NN2 ._SENT 
The_AT0 Supplement_NN1 is_VBZ a_AT0 document_NN1 that_CJT identifies_VVZ existing_AJ0 ,_PUN important_AJ0 compliance_NN1 requirements_NN2 that_CJT the_AT0 federal_AJ0 government_NN1 expects_VVZ to_TO0 be_VBI considered_VVN as_PRP part_NN1 of_PRF an_AT0 audit_NN1 required_VVN by_PRP the_AT0 1996_CRD Amendments_NN2 to_PRP the_AT0 Single_AJ0 Audit_NN1 Act_NN1 ._SENT Without_PRP the_AT0 Supplement_NN1 ,_PUN auditors_NN2 would_VM0 need_VVI to_TO0 research_VVI many_DT0 laws_NN2 and_CJC regulations_NN2 for_PRP each_DT0 program_NN1 under_PRP audit_NN1 to_TO0 determine_VVI which_DTQ compliance_NN1 requirements_NN2 are_VBB important_AJ0 to_PRP the_AT0 federal_AJ0 government_NN1 and_CJC could_VM0 have_VHI both_DT0 a_AT0 direct_AJ0 and_CJC material_AJ0 effect_NN1 on_PRP a_AT0 program_NN1 ._SENT Providing_VVG the_AT0 Supplement_NN1 is_VBZ a_AT0 more_AV0 efficient_AJ0 and_CJC cost-effective_AJ0 approach_NN1 to_PRP performing_VVG this_DT0 research_NN1 ._SENT For_PRP the_AT0 programs_NN2 contained_VVD herein_AV0 ,_PUN the_AT0 Supplement_NN1 provides_VVZ a_AT0 source_NN1 of_PRF information_NN1 for_PRP auditors_NN2 to_TO0 understand_VVI the_AT0 federal_AJ0 program_NN1 's_POS objectives_NN2 ,_PUN procedures_NN2 ,_PUN and_CJC compliance_NN1 requirements_NN2 subject_AJ0 to_PRP the_AT0 audit_NN1 as_CJS well_AV0 as_CJS audit_NN1 objectives_NN2 and_CJC suggested_VVD audit_NN1 procedures_NN2 for_PRP determining_VVG compliance_NN1 with_PRP these_DT0 requirements_NN2 ._SENT 
The_AT0 2_CRD CFR_NP0 Part_NN1 200_CRD ,_PUN Subpart_NN1 F_ZZ0 ,_PUN provides_VVZ that_CJT federal_AJ0 agencies_NN2 are_VBB responsible_AJ0 for_PRP annually_AV0 informing_VVG OMB_NN1 of_PRF any_DT0 updates_NN2 needed_VVN to_PRP the_AT0 Supplement_NN1 and_CJC working_VVG with_PRP OMB_NN1 to_TO0 ensure_VVI that_CJT the_AT0 Supplement_NN1 focuses_VVZ the_AT0 auditor_NN1 to_TO0 test_VVI the_AT0 compliance_NN1 requirements_NN2 most_AV0 likely_AJ0 to_TO0 cause_VVI improper_AJ0 payments_NN2 ,_PUN fraud_NN1 ,_PUN waste_NN1 ,_PUN abuse_NN1 ,_PUN or_CJC generate_VVB audit_NN1 findings_NN2 for_PRP which_DTQ the_AT0 federal_AJ0 awarding_NN1 agency_NN1 will_VM0 take_VVI sanctions_NN2 ._SENT This_DT0 responsibility_NN1 includes_VVZ ensuring_VVG that_CJT program_NN1 objectives_NN2 ,_PUN procedures_NN2 ,_PUN and_CJC the_AT0 compliance_NN1 requirements_NN2 that_CJT are_VBB to_TO0 be_VBI subject_AJ0 to_PRP the_AT0 audit_NN1 (_PUL including_PRP statutory_AJ0 and_CJC regulatory_AJ0 citations_NN2 )_PUR are_VBB submitted_VVN to_PRP OMB_NN1 for_PRP inclusion_NN1 in_PRP the_AT0 Supplement_NN1 ;_PUN it_PNP also_AV0 ensures_VVZ that_CJT agencies_NN2 keep_VVB this_DT0 information_NN1 current_AJ0 ._SENT 
Performance_NN1 Focus_NN1 for_PRP Grants_NN2 
Federal_AJ0 awarding_NN1 agencies_NN2 are_VBB encouraged_VVN to_TO0 continue_VVI to_TO0 shift_VVI their_DPS focus_NN1 in_PRP grants_NN2 management_NN1 from_PRP one_PNI heavy_AJ0 on_PRP compliance_NN1 to_PRP a_AT0 balanced_AJ0 approach_NN1 that_CJT includes_VVZ establishing_VVG measurable_AJ0 program_NN1 and_CJC project_NN1 goals_NN2 and_CJC analyzing_VVG data_NN0 to_TO0 improve_VVI results_NN2 ._SENT To_PRP that_DT0 end_NN1 ,_PUN starting_VVG in_PRP 2019_CRD and_CJC continuing_VVG in_PRP 2021_CRD ,_PUN the_AT0 Compliance_NN1 Supplement_NN1 reduced_VVD the_AT0 areas_NN2 for_PRP compliance_NN1 reviews_NN2 from_PRP a_AT0 maximum_NN1 of_PRF 12_CRD to_PRP a_AT0 maximum_NN1 of_PRF six_CRD (_PUL A_ZZ0 and_CJC B_ZZ0 compliance_NN1 areas_NN2 are_VBB counted_VVN as_PRP one_CRD )_PUR ._SENT This_DT0 reduction_NN1 focused_VVD the_AT0 agencies_NN2 and_CJC the_AT0 auditors_NN2 on_PRP the_AT0 areas_NN2 that_CJT are_VBB most_AV0 important_AJ0 for_PRP federal_AJ0 awarding_AJ0 agencies_NN2 to_TO0 manage_VVI programs_NN2 more_AV0 efficiently_AV0 ._SENT 
In_PRP addition_NN1 ,_PUN under_PRP Part_NN1 3_CRD L_ZZ0 ,_PUN Reporting_VVG ,_PUN agencies_NN2 continued_VVD to_TO0 add_VVI the_AT0 review_NN1 requirement_NN1 for_PRP Performance_NN1 reporting_NN1 for_PRP 57_CRD programs_NN2 (_PUL versus_PRP 29_CRD in_PRP the_AT0 2020_CRD Compliance_NN1 Supplement_NN1 )_PUR ._SENT This_DT0 review_NN1 requirement_NN1 provides_VVZ federal_AJ0 awarding_AJ0 agencies_NN2 with_PRP another_DT0 tool_NN1 to_TO0 ascertain_VVI that_CJT recipients_NN2 comply_VVB with_PRP program_NN1 performance_NN1 goal_NN1 reporting_NN1 requirements_NN2 ._SENT OMB_NP0 intends_VVZ to_TO0 work_VVI with_PRP federal_AJ0 awarding_AJ0 agencies_NN2 to_TO0 identify_VVI performance_NN1 reporting_VVG requirements_NN2 for_PRP more_DT0 federal_AJ0 programs_NN2 to_TO0 be_VBI added_VVN to_PRP future_AJ0 Supplements_NN2 ._SENT 
Furthermore_AV0 ,_PUN in_PRP 2020_CRD ,_PUN OMB_NN1 and_CJC federal_AJ0 awarding_NN1 agencies_NN2 identified_VVN fourteen_CRD new_AJ0 COVID-19-_AJ0 related_AJ0 programs_NN2 and_CJC issued_VVD an_AT0 addendum_NN1 to_PRP the_AT0 2020_CRD Compliance_NN1 Supplement_NN1 on_PRP December_NP0 31_CRD ,_PUN 2020_CRD ,_PUN to_TO0 provide_VVI audit_NN1 guidance_NN1 on_PRP these_DT0 new_AJ0 programs_NN2 ._SENT The_AT0 addendum_NN1 also_AV0 requires_VVZ universal_AJ0 review_NN1 of_PRF the_AT0 requirement_NN1 for_PRP recipients_NN2 to_TO0 report_VVI subawards_NN2 in_PRP the_AT0 Federal_AJ0 Funding_NN1 Accountability_NN1 and_CJC Transparency_NN1 Act_NN1 (_PUL FFATA_NP0 )_PUR for_PRP all_DT0 programs_NN2 for_PRP audit_NN1 year_NN1 ending_VVG after_PRP 09_CRD /_PUN 30_CRD /_PUN 20._CRD 
Parts_NN2 4_CRD and_CJC 5_CRD of_PRF the_AT0 Supplement_NN1 provide_VVB a_AT0 stand-alone_AJ0 section_NN1 for_PRP each_DT0 program_NN1 /_PUN cluster_NN1 included_VVN in_PRP the_AT0 Supplement_NN1 ,_PUN which_DTQ contains_VVZ program_NN1 objectives_NN2 ,_PUN program_NN1 procedures_NN2 ,_PUN and_CJC compliance_NN1 requirements_NN2 (_PUL including_PRP any_DT0 Performance_NN1 Reporting_VVG requirements_NN2 noted_VVN in_PRP Part_NN1 III_CRD ,_PUN section_NN1 L_ZZ0 )_PUR ._SENT For_PRP some_DT0 programs_NN2 ,_PUN a_AT0 separate_AJ0 section_NN1 (_PUL IV_CRD ,_PUN "_PUQ Other_AJ0 Information_NN1 "_PUQ )_PUR also_AV0 is_VBZ included_VVN to_TO0 communicate_VVI additional_AJ0 information_NN1 concerning_PRP the_AT0 program_NN1 ._SENT For_PRP example_NN1 ,_PUN when_CJS a_AT0 program_NN1 allows_VVZ funds_NN2 to_TO0 be_VBI transferred_VVN to_PRP another_DT0 program_NN1 ,_PUN the_AT0 "_PUQ Other_AJ0 Information_NN1 "_PUQ section_NN1 provides_VVZ guidance_NN1 on_PRP how_AVQ those_DT0 funds_NN2 are_VBB to_TO0 be_VBI treated_VVN on_PRP the_AT0 Schedule_NN1 of_PRF Expenditures_NN2 of_PRF Federal_AJ0 Awards_NN2 and_CJC in_PRP major_AJ0 program_NN1 determinations_NN2 ._SENT See_VVB Appendix_NN1 IV_CRD to_PRP the_AT0 Supplement_NN1 for_PRP a_AT0 list_NN1 of_PRF programs_NN2 that_CJT contain_VVB this_DT0 section_NN1 ._SENT 
The_AT0 Supplement_NN1 also_AV0 provides_VVZ guidance_NN1 to_TO0 assist_VVI auditors_NN2 in_PRP determining_VVG compliance_NN1 requirements_NN2 relevant_AJ0 to_PRP the_AT0 audit_NN1 ,_PUN audit_NN1 objectives_NN2 ,_PUN and_CJC suggested_VVD audit_NN1 procedures_NN2 for_PRP programs_NN2 not_XX0 included_VVN herein_AV0 ._SENT For_PRP single_AJ0 audits_NN2 ,_PUN the_AT0 Supplement_NN1 replaces_VVZ agency_NN1 audit_NN1 guides_NN2 and_CJC other_AJ0 audit_NN1 requirement_NN1 documents_NN2 for_PRP individual_AJ0 federal_AJ0 programs_NN2 ._SENT 
Throughout_PRP the_AT0 Supplement_NN1 ,_PUN the_AT0 word_NN1 "_PUQ must_VM0 ,_PUN "_PUQ when_CJS used_VVN in_PRP conjunction_NN1 with_PRP auditor_NN1 responsibilities_NN2 ,_PUN means_VVZ that_CJT the_AT0 auditor_NN1 is_VBZ required_VVN to_TO0 do_VDI what_DTQ the_AT0 statement_NN1 indicates_VVZ ._SENT Use_NN1 of_PRF the_AT0 term_NN1 "_PUQ should_VM0 "_PUQ when_CJS addressing_VVG auditor_NN1 responsibilities_NN2 indicates_VVZ a_AT0 recommended_AJ0 action_NN1 or_CJC approach_NN1 ._SENT See_VVB Part_NN1 3_CRD of_PRF the_AT0 Supplement_NN1 for_PRP use_NN1 of_PRF terminology_NN1 in_PRP that_DT0 part_NN1 ,_PUN which_DTQ addresses_VVZ compliance_NN1 requirements_NN2 for_PRP auditees_NN2 as_CJS well_AV0 as_CJS auditor_NN1 responsibilities_NN2 ._SENT 
PURPOSE_NN1 AND_CJC APPLICABILITY_NN1 (_PUL Part_NN1 1_CRD )_PUR 
Purpose_NN1 
This_DT0 2021_CRD Supplement_NN1 is_VBZ effective_AJ0 for_PRP audits_NN2 of_PRF fiscal_AJ0 years_NN2 beginning_VVG after_PRP June_NP0 30_CRD ,_PUN 2020_CRD and_CJC supersedes_VVZ the_AT0 2020_CRD Compliance_NN1 Supplement_NN1 (_PUL dated_VVN August_NP0 2020_CRD )_PUR and_CJC its_DPS Addendum_NN1 (_PUL dated_VVN December_NP0 2020_CRD )_PUR ._SENT 
This_DT0 2021_CRD Compliance_NN1 Supplement_NN1 adds_VVZ ,_PUN deletes_VVZ ,_PUN and_CJC modifies_VVZ prior_AJ0 Supplement_NN1 sections_NN2 as_CJS usual_AJ0 ._SENT Further_AV0 ,_PUN it_PNP continues_VVZ the_AT0 OMB_NN1 mandate_NN1 adopted_VVN in_PRP the_AT0 2019_CRD Compliance_NN1 Supplement_NN1 requiring_VVG that_CJT each_DT0 federal_AJ0 agency_NN1 limit_NN1 the_AT0 number_NN1 of_PRF compliance_NN1 requirements_NN2 subject_AJ0 to_PRP the_AT0 audit_NN1 to_PRP six_CRD ,_PUN with_PRP the_AT0 exception_NN1 of_PRF the_AT0 Research_NN1 and_CJC Development_NN1 cluster_NN1 ,_PUN which_DTQ has_VHZ been_VBN permitted_VVN to_TO0 identify_VVI seven_CRD compliance_NN1 requirements_NN2 as_PRP subject_NN1 to_PRP the_AT0 audit_NN1 ._SENT For_PRP this_DT0 purpose_NN1 ,_PUN the_AT0 requirements_NN2 relating_VVG to_PRP A_ZZ0 ._SENT Activities_NN2 Allowed_VVN and_CJC Unallowed_AJ0 and_CJC B_ZZ0 ._SENT Allowable_AJ0 Costs_NN2 and_CJC Cost_NN1 Principles_NN2 are_VBB treated_VVN as_PRP one_CRD requirement_NN1 ._SENT The_AT0 Part_NN1 2_CRD matrix_NN1 and_CJC the_AT0 related_AJ0 program_NN1 sections_NN2 in_PRP parts_NN2 4_CRD and_CJC 5_CRD reflect_VVB this_DT0 OMB_NN1 mandate_NN1 ._SENT Additionally_AV0 ,_PUN this_DT0 six-requirement_AJ0 mandate_NN1 does_VDZ not_XX0 apply_VVI to_PRP programs_NN2 not_XX0 included_VVN in_PRP this_DT0 Supplement_NN1 ._SENT 
The_AT0 2_CRD CFR_NP0 Part_NN1 200_CRD ,_PUN Subpart_NN1 F_ZZ0 ,_PUN describes_VVZ the_AT0 nonfederal_AJ0 entity_NN1 's_POS responsibilities_NN2 for_PRP managing_AJ0 federal_AJ0 assistance_NN1 programs_NN2 (_PUL 2_CRD CFR_NP0 section_NN1 200.508_CRD )_PUR and_CJC the_AT0 auditor_NN1 's_POS responsibility_NN1 with_PRP respect_NN1 to_PRP the_AT0 scope_NN1 of_PRF the_AT0 audit_NN1 (_PUL 2_CRD CFR_NP0 section_NN1 200.514_CRD )_PUR ._SENT Auditors_NN2 are_VBB required_VVN to_TO0 follow_VVI both_DT0 the_AT0 provisions_NN2 of_PRF 2_CRD CFR_NP0 Part_NN1 200_CRD ,_PUN Subpart_NN1 F_ZZ0 ,_PUN and_CJC this_DT0 Supplement_NN1 ._SENT 
Applicability_NN1 
General_AJ0 
Auditors_NN2 must_VM0 consider_VVI the_AT0 Supplement_NN1 and_CJC the_AT0 referenced_AJ0 laws_NN2 ,_PUN regulations_NN2 ,_PUN and_CJC OMB_NN1 Circulars_NN2 /_PUN Uniform_AJ0 Guidance_NN1 (_PUL whether_CJS codified_VVN by_PRP federal_AJ0 agencies_NN2 in_PRP agency_NN1 regulations_NN2 or_CJC adopted_VVN or_CJC implemented_VVN by_PRP other_AJ0 means_NN0 )_PUR in_PRP determining_VVG the_AT0 compliance_NN1 requirements_NN2 subject_AJ0 to_PRP the_AT0 audit_NN1 that_CJT could_VM0 have_VHI both_DT0 a_AT0 direct_AJ0 and_CJC material_AJ0 effect_NN1 on_PRP the_AT0 programs_NN2 included_VVD herein_AV0 ._SENT The_AT0 use_NN1 of_PRF the_AT0 Supplement_NN1 is_VBZ mandatory_AJ0 ._SENT Accordingly_AV0 ,_PUN adherence_NN1 to_PRP the_AT0 Supplement_NN1 satisfies_VVZ the_AT0 requirements_NN2 of_PRF 2_CRD CFR_NP0 Part_NN1 200_CRD ,_PUN Subpart_NP0 F_NP0 ._SENT For_PRP program-specific_AJ0 audits_NN2 performed_VVN in_PRP accordance_NN1 with_PRP a_AT0 federal_AJ0 agency_NN1 's_POS program-specific_AJ0 audit_NN1 guide_NN1 ,_PUN the_AT0 auditor_NN1 must_VM0 follow_VVI such_DT0 program-specific_AJ0 audit_NN1 guide_NN1 ._SENT Finally_AV0 ,_PUN for_PRP major_AJ0 programs_NN2 not_XX0 included_VVN in_PRP the_AT0 Supplement_NN1 ,_PUN the_AT0 auditor_NN1 must_VM0 follow_VVI the_AT0 guidance_NN1 in_PRP Part_NN1 7_CRD and_CJC use_VVB the_AT0 types_NN2 of_PRF compliance_NN1 requirements_NN2 in_PRP Part_NN1 3_CRD to_TO0 identify_VVI the_AT0 applicable_AJ0 compliance_NN1 requirements_NN2 that_CJT could_VM0 have_VHI both_DT0 a_AT0 direct_AJ0 and_CJC material_AJ0 effect_NN1 on_PRP the_AT0 program_NN1 ._SENT 
Update_NN1 of_PRF Requirements_NN2 
The_AT0 2_CRD CFR_NP0 section_NN1 200.513_CRD (_PUL c_ZZ0 )_PUR (_PUL 4_CRD )_PUR provides_VVZ that_CJT federal_AJ0 agencies_NN2 are_VBB responsible_AJ0 for_PRP annually_AV0 informing_VVG OMB_NN1 of_PRF any_DT0 needed_VVN updates_NN2 to_PRP the_AT0 Supplement_NN1 ._SENT However_AV0 ,_PUN auditors_NN2 must_VM0 recognize_VVI that_CJT laws_NN2 and_CJC regulations_NN2 change_VVB periodically_AV0 and_CJC that_CJT delays_NN2 will_VM0 occur_VVI between_PRP such_DT0 changes_NN2 and_CJC revisions_NN2 to_PRP the_AT0 Supplement_NN1 ._SENT Moreover_AV0 ,_PUN auditors_NN2 must_VM0 recognize_VVI that_CJT there_EX0 may_VM0 be_VBI provisions_NN2 of_PRF grant_NN1 agreements_NN2 and_CJC contracts_NN2 that_CJT are_VBB not_XX0 specified_VVN in_PRP law_NN1 or_CJC regulation_NN1 and_CJC ,_PUN therefore_AV0 ,_PUN the_AT0 specifics_NN2 of_PRF such_DT0 are_VBB not_XX0 included_VVN in_PRP the_AT0 Supplement_NN1 ._SENT For_PRP example_NN1 ,_PUN the_AT0 grant_NN1 agreement_NN1 may_VM0 specify_VVI a_AT0 certain_AJ0 matching_AJ0 percentage_NN1 or_CJC set_VVD a_AT0 priority_NN1 for_PRP how_AVQ funds_NN2 can_VM0 be_VBI spent_VVN (_PUL e.g._AV0 ,_PUN a_AT0 requirement_NN1 not_XX0 to_TO0 fund_VVI certain_AJ0 size_NN1 projects_NN2 )_PUR ._SENT Another_DT0 example_NN1 is_VBZ a_AT0 federal_AJ0 agency_NN1 imposing_VVG additional_AJ0 requirements_NN2 on_PRP a_AT0 recipient_NN1 (_PUL see_VVB 2_CRD CFR_NN1 section_NN1 200.208_CRD regarding_PRP use_NN1 of_PRF specific_AJ0 award_NN1 conditions_NN2 )_PUR ._SENT 
Accordingly_AV0 ,_PUN the_AT0 auditor_NN1 should_VM0 perform_VVI reasonable_AJ0 procedures_NN2 to_TO0 ensure_VVI that_CJT compliance_NN1 requirements_NN2 identified_VVN as_PRP subject_NN1 to_PRP the_AT0 audit_NN1 are_VBB current_AJ0 and_CJC to_TO0 also_AV0 determine_VVI whether_CJS there_EX0 are_VBB any_DT0 additional_AJ0 provisions_NN2 of_PRF federal_AJ0 awards_NN2 relevant_AJ0 to_PRP the_AT0 compliance_NN1 requirements_NN2 subject_AJ0 to_PRP the_AT0 audit_NN1 that_CJT should_VM0 be_VBI covered_VVN by_PRP an_AT0 audit_NN1 under_PRP the_AT0 1996_CRD Amendments_NN2 ._SENT Reasonable_AJ0 procedures_NN2 would_VM0 be_VBI an_AT0 inquiry_NN1 of_PRF nonfederal_AJ0 entity_NN1 management_NN1 and_CJC a_AT0 reviewal_NN1 of_PRF the_AT0 federal_AJ0 awards_NN2 for_PRP programs_NN2 selected_VVN for_PRP testing_NN1 (_PUL i.e._AV0 ,_PUN major_AJ0 programs_NN2 )_PUR ._SENT 
For_PRP example_NN1 ,_PUN if_CJS a_AT0 program_NN1 entry_NN1 in_PRP the_AT0 Part_NN1 2_CRD matrix_NN1 indicates_VVZ that_CJT Procurement_NN1 and_CJC Suspension_NN1 and_CJC Debarment_NN1 compliance_NN1 requirement_NN1 is_VBZ subject_AJ0 to_PRP the_AT0 audit_NN1 ,_PUN then_AV0 the_AT0 auditor_NN1 should_VM0 follow_VVI the_AT0 guidance_NN1 in_PRP the_AT0 previous_AJ0 paragraph_NN1 and_CJC perform_VVB the_AT0 reasonable_AJ0 procedures_NN2 described_VVD therein_AV0 ._SENT However_AV0 ,_PUN if_CJS a_AT0 program_NN1 entry_NN1 in_PRP the_AT0 Part_NN1 2_CRD matrix_NN1 indicates_VVZ that_CJT Procurement_NN1 and_CJC Suspension_NN1 and_CJC Debarment_NN1 compliance_NN1 requirement_NN1 is_VBZ not_XX0 subject_AJ0 to_PRP the_AT0 audit_NN1 ,_PUN then_AV0 the_AT0 procedures_NN2 described_VVN in_PRP the_AT0 previous_AJ0 paragraph_NN1 would_VM0 not_XX0 be_VBI required_VVN by_PRP the_AT0 auditor_NN1 ._SENT 
Similarly_AV0 ,_PUN as_CJS it_PNP relates_VVZ to_PRP provisions_NN2 of_PRF grant_NN1 agreements_NN2 and_CJC contracts_NN2 ,_PUN if_CJS a_AT0 program_NN1 entry_NN1 in_PRP the_AT0 Part_NN1 2_CRD matrix_NN1 indicates_VVZ that_CJT the_AT0 Activities_NN2 Allowed_VVN and_CJC Unallowed_AJ0 compliance_NN1 requirement_NN1 is_VBZ subject_AJ0 to_PRP the_AT0 audit_NN1 and_CJC that_CJT the_AT0 grant_NN1 agreement_NN1 for_PRP that_DT0 program_NN1 sets_VVZ a_AT0 priority_NN1 for_PRP how_AVQ funds_NN2 can_VM0 be_VBI spent_VVN (_PUL e.g._AV0 ,_PUN a_AT0 requirement_NN1 to_TO0 not_XX0 fund_VVI certain_AJ0 size_NN1 projects_NN2 )_PUR ,_PUN then_AV0 the_AT0 auditor_NN1 would_VM0 be_VBI expected_VVN to_TO0 consider_VVI the_AT0 grant_NN1 agreement_NN1 provisions_NN2 ._SENT However_AV0 ,_PUN if_CJS a_AT0 program_NN1 entry_NN1 in_PRP the_AT0 Part_NN1 2_CRD matrix_NN1 indicates_VVZ that_CJT the_AT0 Matching_NN1 ,_PUN Level_NN1 of_PRF Effort_NN1 ,_PUN Earmarking_NP0 compliance_NN1 requirement_NN1 is_VBZ not_XX0 subject_AJ0 to_PRP the_AT0 audit_NN1 and_CJC that_CJT the_AT0 grant_NN1 agreement_NN1 for_PRP that_DT0 program_NN1 specifies_VVZ a_AT0 certain_AJ0 matching_AJ0 percentage_NN1 requirement_NN1 for_PRP the_AT0 same_DT0 program_NN1 ,_PUN then_AV0 the_AT0 auditor_NN1 is_VBZ not_XX0 expected_VVN to_TO0 consider_VVI the_AT0 grant_NN1 agreement_NN1 provisions_NN2 related_VVN to_PRP matching_VVG in_PRP the_AT0 audit_NN1 ._SENT 
Safe_AJ0 Harbor_NN1 Status_NN1 
Because_CJS the_AT0 suggested_AJ0 audit_NN1 procedures_NN2 were_VBD written_VVN to_TO0 be_VBI able_AJ0 to_TO0 apply_VVI to_PRP many_DT0 different_AJ0 programs_NN2 administered_VVN by_PRP many_DT0 different_AJ0 entities_NN2 ,_PUN they_PNP are_VBB necessarily_AV0 general_AJ0 in_PRP nature_NN1 ._SENT Auditor_NN1 judgment_NN1 is_VBZ necessary_AJ0 to_TO0 determine_VVI whether_CJS the_AT0 suggested_AJ0 audit_NN1 procedures_NN2 are_VBB sufficient_AJ0 to_TO0 achieve_VVI the_AT0 stated_AJ0 audit_NN1 objectives_NN2 or_CJC whether_CJS alternative_AJ0 audit_NN1 procedures_NN2 are_VBB needed_VVN ._SENT Therefore_AV0 ,_PUN the_AT0 auditor_NN1 cannot_NN1 consider_VVB the_AT0 Supplement_NN1 to_TO0 be_VBI a_AT0 "_PUQ safe_AJ0 harbor_VVB "_PUQ for_PRP identifying_VVG the_AT0 audit_NN1 procedures_NN2 to_TO0 apply_VVI in_PRP a_AT0 particular_AJ0 engagement_NN1 ._SENT 
The_AT0 matrices_NN2 included_VVN throughout_PRP the_AT0 Supplement_NN1 indicate_VVB with_PRP a_AT0 "_PUQ Y_ZZ0 "_PUQ which_DTQ types_NN2 of_PRF compliance_NN1 requirements_NN2 are_VBB subject_AJ0 to_PRP the_AT0 audit_NN1 ._SENT The_AT0 auditor_NN1 can_VM0 consider_VVI the_AT0 Supplement_NN1 a_AT0 "_PUQ safe_AJ0 harbor_VVB "_PUQ for_PRP identification_NN1 of_PRF those_DT0 compliance_NN1 requirements_NN2 for_PRP the_AT0 programs_NN2 included_VVD herein_AV0 if_CJS ,_PUN as_CJS discussed_VVN above_AV0 ,_PUN the_AT0 auditor_NN1 (_PUL 1_CRD )_PUR performs_VVZ reasonable_AJ0 procedures_NN2 to_TO0 ensure_VVI that_CJT the_AT0 requirements_NN2 subject_NN1 to_PRP the_AT0 audit_NN1 in_PRP the_AT0 Supplement_NN1 are_VBB current_AJ0 and_CJC to_TO0 determine_VVI whether_CJS there_EX0 are_VBB any_DT0 additional_AJ0 provisions_NN2 of_PRF federal_AJ0 awards_NN2 relevant_AJ0 to_PRP the_AT0 compliance_NN1 requirements_NN2 subject_AJ0 to_PRP the_AT0 audit_NN1 that_CJT should_VM0 be_VBI covered_VVN by_PRP an_AT0 audit_NN1 under_PRP the_AT0 1996_CRD Amendments_NN2 ,_PUN and_CJC (_PUL 2_CRD )_PUR updates_VVZ or_CJC augments_VVZ the_AT0 requirements_NN2 contained_VVN in_PRP the_AT0 Supplement_NN1 ,_PUN as_CJS appropriate_AJ0 ._SENT 
For_PRP compliance_NN1 audit_NN1 purposes_NN2 ,_PUN an_AT0 "_PUQ N_ZZ0 "_PUQ in_PRP a_AT0 program_NN1 matrix_NN1 indicates_VVZ that_CJT a_AT0 type_NN1 of_PRF compliance_NN1 requirement_NN1 is_VBZ not_XX0 subject_AJ0 to_PRP the_AT0 audit_NN1 ._SENT 
