In October 2023, the General Services Administration launched the new Federal Audit Clearinghouse. All single audit submissions must now be submitted using the new system beginning October 1, 2023. As a reminder, organizations that expend more than $750,000 of federally sourced funds during a fiscal year are required to have an audit performed under Uniform Guidance and to complete a submission regarding their federal awards to the Federal Audit Clearinghouse.
Reasons for the New System
The Federal Audit Clearinghouse is a system that federal grantees and grantors must use to submit and review audit data and resolve audit findings. There are over 40,000 such audits carried out every year. It is a highly visible system used by agency customers and tens of thousands of public users. The goal of the new system is to establish an infrastructure that can be continually upgraded, automate processes that will save auditors and recipients time and money, seamlessly integrate with other relevant systems, and ensure that the data submitted is easily accessible. The new platform is designed so that enhancements and modifications can be easily and frequently performed as needed.
Changes Under the New System
Those familiar with the process for submitting audits will find that the new system is user-friendly, if a bit quirky, initially. The new platform takes some time to familiarize yourself with. The login requirements have changed and will ensure more security for the system and participants. All organizations are now required to have a Unique Entity ID (UEI) to submit an audit.
As auditors, we have found that the process for reviewing data entered into the system before submitting our certification has had to change. Reviewing the data in the system is not as easy as it used to be, primarily due to familiarizing yourself with the new system. We’d recommend that all organizations give themselves extra time and start the submission process early to ensure that no time deadlines are missed due to the necessity of learning a new system. Thankfully, historical FAC records can continue to be found in the old system.
Due to the change in systems, some concessions have been granted to auditors and auditees during the transition to the new system. Under current rules, an audit must be submitted to the Federal Audit Clearinghouse within 30 days after the receipt of the auditor’s report or risk being determined a “high-risk auditee.” This requirement is currently waived for auditees that have fiscal years ending between January 1, 2023, and September 30, 2023, as long as they are submitted within 9 months of the fiscal period end date. This will allow auditees extra time to get their submissions into the new system without any consequences for delays incurred.
The new system is in place, and organizations and auditors should be sure to give themselves plenty of time to familiarize themselves with the new interface. Ultimately, the new system promises to be an excellent platform to maintain a secure and frequently updated resource for the users of the Federal Audit Clearinghouse.
Connect with Windes today if you need assistance with an audit or complying with the new Federal Clearinghouse requirements.
This article was written by Windes Nonprofit Practice Leader Mike Barloewen.