Uniform Guidance for Grants Neither Uniform nor Guidance

Uniform Guidance for Grants Neither Uniform nor Guidance

Previous Grant Guidance • Separate regulations for different purposes and types of recipients • Institutions of Higher Education were subject to three separate OMB (Office of Management and Budget) circulars – Administrative Requirements (A-110) – Cost Principles (A-21) – Audits (A-133)

New Grant Guidance • Combines eight federal circulars into a single document to be used governmentwide for managing financial assistance awards (grants and cooperative agreements)

Background of reform • 11/23/09 Executive Order 13520 on Reducing Improper Payments • 2/28/11 Presidential Memorandum on Administrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments • Better target financial risks and better direct resources to achieve evidencebased outcomes

Reform process • Council on Financial Assistance Reform (COFAR) established October 2011 – Interagency group of Executive Branch officials to coordinate financial assistance reform – Represents major funding agencies • Final guidance published in Federal Register 12/26/13 • Interim final rule published 12/19/14

Results • Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Final Rule – Super Circular / Omni Circular – OMB A-81 – Uniform Guidance (UG) – 2 CFR 200 (Code of Federal Regulations) • Each agency’s implementation

Effective Dates • New awards issued after December 26, 2014 subject to UG terms and conditions • Funding increments and modifications may also be subject to UG if the awarding agency considers this an opportunity to change award terms and conditions

Effective Dates • Audit requirements effective for fiscal years beginning after December 26, 2014 – Kent State FY 2016 (July 1, 2015 - June 30, 2016) • Implementation of procurement standards may be delayed one full fiscal year – Kent State FY 2017 (July 1, 2016 – June 30, 2017)

Does it apply? • During this time of transition watch award documents carefully for any changes • Sponsored Programs will be noting the applicability of Uniform Guidance terms on the fund request and/or spending plan for awards as they become effective

Uniform? • UG is intended to be a substantially uniform approach to federal funding administration. • Agencies may implement waivers or variances through their individual policies and procedures. • Exceptions throughout guidance for different types of recipients. • Imperative to pay attention to the terms of a specific award and the related guidance offered by the funding agency.

Agency-Specific Regulations • 12/19/14 Joint Interim Final Rule implements UG for all Federal awardmaking agencies (240 pages) • Incorporates UG into each agency’s regulations -- separate CFR reference • Includes OMB-approved exceptions for agencies • NSF implementation through policy

Guidance? • Guidance to federal agencies in their implementing regulations • Codified in Code of Federal Regulations at 2 CFR 200 and separately in each agency’s implementing regulations • Not optional

Guidance? • Language does allow for suggestions beyond regulations – Must indicates requirements – Should indicates best practices or recommended approaches

Pyramid of requirements Uniform Guidance

Outline of Uniform Guidance • • Subpart A: Definitions Subpart B: General Provisions Subpart C: Pre-Award Subpart D: Post Award Subpart E: Cost Principles Subpart F: Audit Requirements Appendices I - XI

Significant Changes • • • Cost Sharing or Matching Procurement Subawards Selected Items of Cost Prior Approvals and Expanded Authorities

Cost Sharing or Matching • Voluntary committed cost sharing is not expected and cannot be used as a factor during the merit review of proposals • Criteria for considering voluntary cost sharing must be explicitly described in the notice of funding opportunity • Prior approval of agency must be given to use unrecovered indirect costs as part of cost sharing or matching

Procurement • Taken primarily from A-102 for State and Local Governments • Includes significant changes for Institutions of Higher Education • Grace period of one full fiscal year for implementation – Required by July 1, 2016 – Kent State will revised policies and procedures

Procurement Methods • Micro-purchase: ≤$3, 000 • Small purchase: >$3, 000 ≤$150, 000 – Price or rate quotations must be obtained from an adequate number of qualified sources • Sealed bid: >$150, 000 • Competitive proposal: >$150, 000 • Noncompetitive proposal – Approval for sole source through Procurement

Procurement documentation • Must maintain records sufficient to detail the history of each procurement – Rationale for method – Selection of contract type – Contractor selection or rejection – Basis for contract price

Subrecipient vs. Contractor • Determination on case-by-case basis depending upon role in project – Subrecipient: purpose of carrying out portion of award; creates assistance relationship – Contractor: purpose of obtaining goods and services for non-Federal entity’s use in project • Substance of relationship more important than the form of agreement • Kent State checklist to determine

Pass-through Entity Requirements • Prime recipient is pass-through entity • Clearly identify each subaward with specific information about the prime award • Use subrecipient’s federally recognized indirect cost rate – 10% de minimus indirect cost rate for entities who have never had a negotiated rate – unless program statute limits

Pass-through Entity Requirements • Evaluate subrecipient’s risk of noncompliance – Determine appropriate monitoring – Kent State risk assessment • Monitor subrecipient activities – Review financial and programmatic reports – PI sign-off on invoices before payment – Verify and follow-up on annual audits – Additional steps when high risk

Cost Principles • Basic Considerations still the same – Allowable – Reasonable – Allocable • May seek prior written approval of awarding agency in advance of incurrence of special or unusual costs to avoid subsequent disallowance

Indirect (F&A) Costs • Negotiated rates must be accepted by all Federal awarding agencies • May use different rate for a class of awards only when one of the following – Required by Federal statute or regulation – Approved by agency head based on documented process • Pass-through entities must follow with subrecipient’s negotiated rate

Personal Services (personnel) • Reasonable for services rendered • Conform to written policy of non-Federal entity and consistently applied to all activities regardless of funding source • Standards for documentation less prescriptive – Effort Certification meets requirements – Cost share salaries must also be documented

Administrative/Clerical Salary • Generally indirect cost and should not be directly charged • May be directly charged if all criteria met: – Integral to project or activity – Involved individual(s) can be specifically identified with the project or activity – Explicitly included in approved budget or have prior written approval of awarding agency

Computing devices < $2, 500 • May be directly charged if all criteria met – Essential and allocable to the project – Project does not have reasonable access to other devices or equipment that can achieve same purpose (not convenience/preference) – Items > $2, 500 are considered equipment and follow equipment rules for direct charging • Include in proposed budget with justification or request through rebudget

Participant Support Costs • Allowable with agency prior approval • Not routinely included on research projects but may if an education or outreach component is included • Excluded from indirect costs • Agency approval needed before rebudgeting to another category

Visa Costs • Not previously addressed directly • Short-term travel visa costs allowable if all criteria met – Critical and necessary to project – Allowable by agency – Consistent with Kent State policies/practices • Different from long-term immigration visas

Prior Approvals • Expanded authorities were incorporated into research terms & conditions – Waiver of some prior approvals – Rebudgeting – Initial no cost extension – Pre-award costs • Not reflected in UG

Prior Approvals • Research terms & conditions working group updating to incorporate UG • No completion date at this time • Some prior approvals are waived in agency specific regulations but less comprehensive at this point

Kent State Implementation • Look for information provided on spending plan including applicability of UG • Include as much detail as possible in proposal budget and justification for agency approval • Indirect Cost Charge Exception Form • Institutional Prior Approval Form (IPAF) to request rebudget or other changes

Resources • COFAR https: //cfo. gov/cofar • 2 CFR 200 http: //www. ecfr. gov/cgi-bin/textidx? SID=6530 c 2 e 6 fcaebd 23 e 97969 e 4 cff 8 41 fb&node=pt 2. 1. 200&rgn=div 5 • OMB Circulars http: //www. whitehouse. gov/omb/circulars

Questions? • Lori Burchard – lburchar@kent. edu – 330 -672 -7946 • Sponsored Programs – 330 -672 -2070 • Grants Accounting