For nonprofits or NGOs that receive federal awards, recent changes to A-133 audit rules take effect later this year. Previously, organizations receiving federal awards exceeding $500,000 included a mandate that the recipient undergoes an A-133 audit. Going forward, that threshold has been raised to $750,000 for audits of fiscal years beginning on or after December 26, 2014, and requires that a single or program-specific audit be conducted.
An audit has one primary requirement – provide evidence that the recipient has complied with award requirements and the federal dollars have been utilized as intended. For organizations that wait until the end of the year to create or accumulate records in support of their compliance efforts, preparing for the audit can be a nightmare.
To make preparation simpler, we recommend the following:
- Take a proactive approach.
- Apply a strong combination of formalized policy and procedure guidelines.
- Rely on a solid software toolset for help in streamlining business processes.
- Keep detailed documentation.
By taking this advice, we feel organizations can minimize the effort gathering evidence for the auditor and spend their time focusing on their mission.
Dealing with the federal government is complicated enough. Award recipients needn’t be in a position where the cost of compliance exceeds the value of the reward. With the right software, staying compliant doesn’t have to mean increasingly complicated business processes. When used properly, it can streamline the process by helping centralize information, safeguard assets, ensure appropriate approvals and adequate documentation for expenditures, and automate reporting even in the funder’s required format.
To read a complete whitepaper on audit complications and streamlining compliance with audit rules, check out our whitepaper online.