Preparing for a FedRAMP Audit

For Cloud Service Providers (CSPs), selling their products to federal agencies, such as the Department of Defense, can open significant revenue streams. Only FedRAMP authorized Cloud Service Offerings (CSOs) can be listed on the FedRAMP Marketplace. Meaning that before CSPs can tap into this lucrative market, they must first secure FedRAMP Authorization for their products. To secure authorization, CSPs must undergo a FedRAMP audit conducted by an approved Third-Party Assessment Organization (3PAO). Before getting to that point, there are a lot of necessary steps in preparing for a FedRAMP audit.

This article will break down what actions organizations must take on the journey to achieve FedRAMP Authorization.

Identify the Right FedRAMP Impact Level

FedRAMP has three impact levels, Low, Moderate, and High, that establish the security baseline your organization must meet. Each level maps to different federal use cases and security expectations.

The Low Impact Level is designed for cloud systems where the loss of confidentiality, integrity, or availability would have limited adverse effects on government operations or assets. Low Impact Level CSOs do not process Controlled Unclassified Information (CUI). Examples include:

• Public-facing websites with non-sensitive data
• Collaboration tools with publicly releasable information
• Low-risk SaaS offerings that handle minimal PII or mission data

The Low Impact Level has the fewest security controls (125).

The Moderate Impact Level is intended for cloud systems where a security breach would have a serious adverse effect on agency operations, assets, or individuals. The Moderate level is the most widely used. Examples include:

• Systems processing CUI
• HR and financial platforms
• Common IT services used across federal agencies
• SaaS offerings used in government environments

The Moderate Impact Level includes 325 security controls.

The High Impact Level is for cloud systems where a cyber incident would have severe or catastrophic adverse effects on agency operations, assets, or individuals. Examples include:

• Law enforcement, emergency services, or healthcare systems
• Mission-critical systems supporting national security functions
• Systems processing highly sensitive CUI or agency-sensitive operational data
• Environments requiring the strongest confidentiality, integrity, and availability controls

The High level includes 421 controls.

Secure a FedRAMP Agency Sponsor

Organizations cannot secure FedRAMP Authorization on their own; they need a federal agency to serve as their sponsor. The sponsor is typically an agency that wants to use the CSO and advocates for the CSP throughout the authorization process. Sponsors can also help organizations with designing security controls, documentation, risk assessments, and other required tasks.

CSPs should first approach agencies that have shown interest in their offerings about sponsorship. Providers need to be able to demonstrate they are serious about FedRAMP Authorization by providing a high-level system description, security posture details, their FedRAMP readiness strategies, and other information that builds confidence in their compliance capabilities.

Select an Approved 3PAO

FedRAMP requires CSPs to undergo a formal assessment by an accredited 3PAO. Only 3PAOs on the official FedRAMP-approved list may perform this audit. There cannot be any affiliation between the 3PAO and CSP.

When vetting 3PAOs, look for an organization with experience assessing products similar to your offerings.

Understand the Requirements and Conduct a Gap Assessment

FedRAMP is largely based on NIST 800-53. It does include additional parameters to account for the unique elements of cloud computing. Cloud-based controls that are unique to FedRAMP include:

• Auditing cloud-centric events such as hypervisor changes and administrative API calls
• The adoption of CIS Benchmarks or comparable hardening guidelines
• Scanning of virtualization layers and cloud APIs
• Penetration testing tailored to multi-tenant architectures
• CSPs must document shared responsibility with cloud providers, including inherited controls

Organizations must understand the security control requirements for their impact level, which are available here:

• Low Impact Level
• Moderate Impact Level
• High Impact Level

Organizations should conduct a gap assessment to identify where their existing security program falls short of the requirements in their impact level. The assessment forms the foundation of your FedRAMP roadmap by providing clarity on:

• Missing or insufficient security controls relative to FedRAMP baselines
• Required technology investments
• Operational process improvements
• Documentation and policy updates
• Audit readiness and timeline projections

After the gap assessment, complete a Plan of Actions and Milestones (POA&M), which is a required document to track and manage the remediation of security gaps. POA&Ms contain a detailed description of each weakness, the responsible party, resources needed, and remediation completion dates.

Implement Security Controls

Now that you’ve identified the gaps that are preventing your organization from achieving FedRAMP compliance, it’s time to get to work fixing them. The design and implementation of FedRAMP security controls will require significant resources and time. Actions organizations can take to improve the efficiency of this step include:

• Establish clear ownership for each control
• Dedicate the necessary resources to implement controls, policies, and procedures
• Develop governance mechanisms such as steering committees, KPIs, and program reviews
• Invest in logging, monitoring, encryption, and automation tools
• Establish evidence collection processes that align with your audit needs

Build an Audit-Ready SSP

A System Security Plan (SSP) is the foundational document that explains exactly how a CSP implements the security controls required for its FedRAMP impact level. It functions as both a blueprint and an assurance mechanism by detailing:

• System architecture
• Data flows
• Boundary definitions
• Inherited controls
• Implemented technical and administrative safeguards
• Continuous monitoring activities
• User roles
• Compliance responsibilities

Because FedRAMP is a combination of NIST 800-53 and enhanced cloud-specific controls, the SSP must show not just that controls are in place, but how they work in the context of a cloud environment. During a FedRAMP audit, the SSP is the primary document reviewed by the 3PAO and the FedRAMP Program Management Office (PMO), making accuracy and completeness essential.

Achieving FedRAMP Authorization can be a heavy lift. CompliancePoint can make it easier. We have a team of cybersecurity professionals who are experienced with NIST 800-53 and FedRAMP. They can walk you through every step of your FedRAMP audit preparation, saving you time and money, while reducing your stress levels. Reach out to us at connect@compliance.com to learn more about our services.