Office of Management and Budget Circular A-133

Office of Management and Budget Circular A-133
Title	Office of Management and Budget Circular A-133
Issued by	Office of Management and Budget
First issued	1997
Superseded by	Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (2014)
Subject	Audits of States, Local Governments, and Non-Profit Organizations

Office of Management and Budget Circular A-133 was a federal audit guidance document that established requirements for audits of entities receiving federal awards, linking audit practice to accountability frameworks used across the United States. It guided financial oversight and compliance monitoring and intersected with many statutes, standards, and institutions to shape audit expectations for recipients of federal funds. The Circular influenced audit methodology, reporting, and enforcement across municipal, state, and nonprofit sectors.

Background and Purpose

Circular A-133 emerged from executive and legislative attention to financial stewardship and oversight during the late 20th century, reflecting priorities in the Office of Management and Budget, Congress of the United States, Government Accountability Office, Department of the Treasury, and executive orders. It sought to harmonize audit requirements articulated in statutes such as the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 with professional standards issued by bodies including the American Institute of Certified Public Accountants, the General Accounting Office, and the Federal Accounting Standards Advisory Board. The Circular linked federal financial assistance policy to implementation practice in jurisdictions including the State of California, City of New York, Commonwealth of Pennsylvania, and numerous United States territories and tribal governments. It aligned accountability expectations with public interest concerns voiced in hearings before the House Committee on Oversight and Reform, the Senate Committee on Homeland Security and Governmental Affairs, and oversight by inspector general offices across agencies such as the Department of Health and Human Services, Department of Education, and Department of Housing and Urban Development.

Applicability and Scope

Circular A-133 applied to non-federal entities including state governments of the United States, local government in the United States, federally recognized Indian tribes, institutions such as Harvard University, University of California, Berkeley, Massachusetts Institute of Technology, and nonprofit organizations like the American Red Cross and United Way. It covered awards from federal agencies including the National Institutes of Health, National Science Foundation, Department of Agriculture, Department of Defense, and Environmental Protection Agency. The Circular specified thresholds and exclusions that referenced statutes and programs administered by agencies such as the Small Business Administration, Federal Emergency Management Agency, and Social Security Administration, affecting grantees and contractors in sectors represented by entities like Habitat for Humanity International and Smithsonian Institution.

Audit Requirements and Standards

Circular A-133 required audits to follow professional standards from bodies such as the American Institute of Certified Public Accountants and the Government Accountability Office Yellow Book, and to address compliance requirements associated with federal programs like the Medicaid program, Head Start Program, Supplemental Nutrition Assistance Program, and Federal Transit Administration grants. Audit thresholds for single audits and reporting requirements referenced statutes including the Single Audit Act of 1984 and guidance from the Office of Management and Budget and Office of Inspector General networks. The Circular mandated testing of internal controls and compliance areas reflected in regulations administered by the Department of Labor, Department of Commerce, Department of Veterans Affairs, and Department of Energy.

Single Audit Process and Components

The Single Audit under Circular A-133 comprised financial statement audits, schedule of expenditures of federal awards, compliance testing, internal control assessments, and reporting packages used by pass-through entities and federal cognizant agencies such as the Department of Health and Human Services and Department of Education. Key components included risk-based selection of major programs, materiality determination, and findings and questioned costs reporting, which engaged standards from the Government Accountability Office, the American Institute of Certified Public Accountants, and reporting protocols used by agencies like the National Endowment for the Arts, Federal Highway Administration, and Centers for Medicare & Medicaid Services. The Single Audit process interfaced with systems and registries such as the System for Award Management and compliance frameworks used by entities including the National Aeronautics and Space Administration and U.S. Agency for International Development.

Responsibilities of Auditees and Auditors

Auditees—states, counties such as Los Angeles County, municipalities such as the City of Chicago, universities like Stanford University, and nonprofits such as The Salvation Army—were required to prepare financial statements, maintain adequate internal controls, and submit audit reports in formats compatible with federal agencies including the Department of Transportation and Department of Justice. Independent auditors and audit firms—including national firms with histories auditing federal programs and regional firms certified under state boards like the California Board of Accountancy and New York State Board of Public Accountancy—were required to follow professional standards from the American Institute of Certified Public Accountants and the Public Company Accounting Oversight Board where applicable, and to communicate findings to pass-through entities and federal oversight offices such as various Office of Inspector General offices.

Implementation, Compliance, and Enforcement

Implementation of Circular A-133 was overseen through cognizant and oversight agencies including the Department of Health and Human Services and Department of Education, with enforcement actions informed by inspector general investigations, administrative remedies, and debarment processes managed by the General Services Administration and Department of Justice. Compliance mechanisms intersected with federal funding decisions, audit resolution processes, and legislative oversight by committees such as the House Committee on Appropriations and the Senate Committee on Finance. In 2014, the Circular’s requirements were largely consolidated under the Uniform Guidance issued by the Office of Management and Budget, reflecting policy evolution influenced by stakeholders including state associations such as the National Association of State Auditors, Comptrollers and Treasurers and auditors represented by the American Institute of Certified Public Accountants.

Category:United States federal audits