Circular A

Circular A refers to a series of official guidance documents issued by the U.S. Office of Management and Budget (OMB) that provide policies and procedures for federal agencies and recipients of federal funds. These circulars establish rules for areas such as cost principles, administrative requirements, and audit standards for organizations that receive federal financial assistance, including state and local governments, non-profits, and educational institutions.

The most widely known is OMB Circular A-133, which set audit requirements for organizations receiving federal grants, but this and others have now been consolidated under the “Uniform Guidance” (2 CFR Part 200).

Key Facts

• Issued by the Office of Management and Budget (OMB): Circulars are used to standardize financial and administrative practices across federal programs.
• Examples of Major Circulars:
  
  • Circular A-21: Cost principles for educational institutions
  • Circular A-87: Cost principles for state and local governments
  • Circular A-122: Cost principles for non-profits
  • Circular A-110: Uniform administrative requirements for grants
  • Circular A-133: Audit requirements for federal funds recipients
• Replaced by Uniform Guidance: In December 2014, most of these circulars were merged into the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200).
• Uniform Guidance = Simplification: The consolidation of Circular A documents under one set of regulations was intended to reduce duplicative and conflicting rules, making federal grants more accessible and accountable.
• Applies to Grant Recipients: Especially relevant for universities, nonprofits, tribal governments, and municipalities receiving federal funding.
• Defines Allowable Costs: These documents help determine which expenses are eligible for reimbursement, how to manage indirect costs, and how to document expenditures.

1. What is Circular A?

Circular A refers to official policy documents issued by the OMB that provide guidance on financial management and accountability for organizations receiving federal funds.

2. Is Circular A still used today?

Most Circular A documents (like A-21, A-87, and A-133) were superseded by the Uniform Guidance (2 CFR Part 200) in 2014. However, the concepts and content still apply - just in a modernized format.

3. Who needs to follow Circular A or Uniform Guidance rules?

Entities such as universities, state and local governments, tribal nations, and nonprofit organizations that receive federal grants must comply.

4. What did Circular A-133 require?

It required annual audits for organizations that spent $500,000 or more in federal awards, later raised to $750,000 under the Uniform Guidance.

5. How does Uniform Guidance benefit grant recipients?

It provides a clear, unified set of rules to manage federal funds, improving efficiency, accountability, and transparency while reducing the administrative burden.