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Articles From Lumsden McCormick

OMB Issues the 2022 Compliance Supplement

Written by Tammy Ricciardella, CPA. This BDO publication is available through our affiliation with the BDO Alliance USA. Lumsden McCormick has been a member of the BDO Alliance USA since 2009.

The Supplement is issued to assist auditors by providing a source of information related to various federal programs and assist with the identification of compliance requirements.However, auditees, both for-profit and nonprofit, should be familiar with the content included in the Supplement as it relates to their federal funding.The Supplement includes information related to the Provider Relief Fund, Coronavirus Relief Fund (CRF), Education Stabilization Fund (ESF), Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) and the Shuttered Venue Operators Grant (SVOG), among many others.

The changes to the 2022 Supplement are significant due to the continued impact of federal funding in response to COVID-19.Some highlights are as follows.


It is important to review the matrix to determine the programs included in the Supplement and the compliance requirements that have been identified by the federal agencies as subject to audit.Although auditees need to ensure they comply with all requirements of their agreements from the federal agencies and pass-through entities, the Supplement is helpful to see which compliance areas could be subjected to audit for their major programs.


There are several program additions and deletions in Part 4, as well as many programs with significant changes.New program sections added in the 2022 Supplement are as follows:

  • 14.888 – Lead-Based Paint Capital Fund Program and Housing-Related Hazards Capital Fund
  • 21.023 – Emergency Rental Assistance Program (ERA)
  • 21.026 – Homeowner Assistance Fund Program
  • 21.029 – Coronavirus Capital Projects Fund
  • 32.009 – Emergency Connectivity Fund Program
  • 59.075 – Shuttered Venue Operators Grant (SVOG)
  • 93.671 – Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services

Many programs were updated as a result of COVID-19 funding and to reflect provisions from the American Rescue Plan (ARP) Act.Some of the larger programs and their key changes are summarized below.

Education Stabilization Fund (ESF)

ESF has again been designated as higher risk and continues to be broken down into two sections that cover the various ESF subprograms.Regulatory changes and other updates have been made throughout the ESF section.Section 2 of ESF has identified the Cash Management type of compliance requirement as subject to audit for the first time.The following new programs were added or moved to the ESF program section noted below:

  • Section 1 added the American Rescue Plan – Emergency Assistance Non-Public Schools (ARP EANS) Program (84.425V).
  • Section 2 added The Higher Education Emergency Relief Fund (HEERF) Supplemental Support Under American Rescue Plan (SSARP) Program (84.425T).
  • The Institutional Resilience and Expanded Postsecondary Opportunity (HEERF IREPO) (84.425P) was moved to Section 2.In the prior year it was not included in the listing of programs in either Sections 1 or 2.

Coronavirus State and Local Fiscal Recovery Funds (CSLFRF)

This program is identified as a higher risk program and updates were made to revise the section for the CSLFRF Final Rule.There were several updates, including the changes announced in the recent Technical Update to the 2021 Supplement which introduced an alternative compliance examination engagement for certain recipients.(See the “Other Items to Note” section on page 18 for more details.)

SVOG As noted previously, the 2022 Supplement includes this program in Part 4 for the first time.Part 4 states that it is only to be used for audits of non-federal entities with SVOG funding.

However, the Small Business Administration (SBA) has stated that it will soon be issuing separate audit requirements and guidance for audits of for-profit entities with SVOG funding.Once issued, this guidance will be posted upon completion on the SBA website.

Provider Relief Fund

The formal title of this program was revised to “Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution” but is still referred to as PRF.PRF continues to be identified as a higher risk program.It also adds information and requirements for funding provided to this program from the American Rescue Plan (ARP) Act.The “Other Information” section of the program removes the previous Special Tests and Provisions compliance requirement from the audit requirements.This section clarifies the amount of PRF expenditures and lost revenue to be reported on the schedule of expenditures of federal awards (SEFA) and the timing of when such expenditures and lost revenue are to be reported for Period 5 PRF payments.


Student Financial Assistance

This program has several changes, clarifications and updates for 2022 to reflect regulatory changes and other updates.These changes relate primarily to various Special Tests and Provisions such as Disbursements to or on Behalf of Students, Return of Title IV Funds, Enrollment Reporting, Program Eligibility and Distance Education.

Other Clusters

There were several changes made to the “Other Clusters” listing, including the following:

  • The Child Nutrition Cluster was updated to include the Fresh Fruit and Vegetable Program (FFVP) (10.582) and removed the Child Nutrition Discretionary Grants Limited Availability program (10.579)
  • Local Veterans’ Employment Representative (LVER) Program (17.804) was removed from the Employment Service Cluster
  • Highway Safety Cluster was modified to remove the following programs: 20.601, 20.602, 20.609, 20.610, 20.612 and 20.613


This section of the 2022 Supplement that identifies the higher risk programs has been updated to include a complete list of programs with the higher risk designation.The list includes all programs identified in the 2021 Supplement as higher risk except for the Coronavirus Relief Fund program which has been removed from the list.OMB lists the specific ARP programs that are higher risk in this Appendix.

The designation of these programs as “higher risk” in the Supplement may result in additional programs being identified as major programs by your auditors in the single audit.Auditees should be aware of this effect and be prepared for this reality.This will mean that additional documentation and support may be required by the auditee.

See excerpt from Appendix IV of higher risk programs below.


Assistance Listing Number (formerly CFDA)




Education Stabilization Fund



Emergency Connectivity Fund Program



Testing for the Uninsured



Provider Relief Fund



Medicaid Cluster



Airport Improvement Program



Federal Transit Cluster

Transportation **


National Railroad Passenger Corporation



Emergency Rental Assistance



Coronavirus State and Local Fiscal Recovery Funds

*These programs were created by one of the laws cited at the beginning of Appendix IV of the Supplement and are thus considered 100% COVID-19 funding.
**These programs were existing programs that received additional funding from one of more of the laws cited at the beginning of Appendix IV of the Supplement.


Appendix V lists the changes to the programs that were made in the Supplement.All those with federal funding should read this section.


All those with federal funding should read this section.A majority of the content in this Appendix is the same or very similar to the prior year.The areas that changed include the following:

Alternative Compliance Examination Engagement for Eligible CSLFRF Recipients

Appendix VII emphasizes that the use of an alternative compliance examination in accordance with Government Auditing Standards (and the AICPA attestation standards) is authorized for certain eligible CSLFRF recipients in addition to general options of single audit or program-specific audit.

Federal Audit Clearinghouse Transition from Census to the General Services Administration

Appendix VII includes information on the upcoming Federal Audit Clearinghouse (FAC) transition from Census to the General Services Administration (GSA).It explains that the Census FAC will accept single audits for fiscal years 2021 and earlier and that GSA will begin accepting submissions for single audits with a fiscal period ending in 2022 on Oct.1, 2022.Therefore, single audits with a fiscal period ending in 2022 cannot be submitted prior to that date.If it is not possible to meet the 30-day due date due to the timing of the opening of the GSA FAC for submission, the audits will not be considered late if they are submitted within nine months after the end of the audit period.Appendix VII contains an example of this scenario for additional information.


The OMB has communicated that there will not be an Addendum to the 2022 Supplement.Instead, OMB has noted that any new programs that are established as a result of the Infrastructure Investment and Jobs Act will be included in the 2023 Supplement.

OMB Issues the 2022 Compliance Supplement

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Sara has extensive experience serving governmental entities in the areas of internal and external auditing, single audits, taxation, information returns, and financial reporting. As the leader of our governmental services group, Sara is responsible for reviewing all governmental financial statements and assists with the management and delivery of services by facilitating risk assessment and client expectations for our larger governmental clients. She maintains and exceeds the continuing professional education requirements of Government Auditing Standards. In addition to the services she provides to local governments, Sara performs audits and related financial services for commercial businesses and nonprofit organizations.


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