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DRATT Research Compliance Series

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Presentation on theme: "DRATT Research Compliance Series"— Presentation transcript:

1 DRATT Research Compliance Series

2 2 CFR PART 215 – Course Overview
Section A – Introduction to 2 CFR Part 215 Section B – Pre-Award Requirements Section C – Post-Award Requirements Section D – After-the-Award Requirements Section E – Additional Resources

3 SECTION A – Introduction to 2 CFR Part 215
Questions to Answer: Why did OMB develop Uniform Administrative Requirements? What are the Uniform Administrative Requirements and to whom do they apply? What are some recent developments concerning the administrative requirements?

4 Why did OMB develop Uniform Administrative Requirements?
During the 1960’s the federal government initiated many new grant programs Federal agencies were acting independently in administering their grant programs and guidelines Standardization, consistency, and efficiency of federal grant programs was sought Intergovernmental Cooperation Act of 1968 1976 – OMB issues A-110

5 What are the Uniform Administrative Requirements and to whom do they apply?
OMB Circular A-102 – for State and Local Governments, Indian Tribal Governments OMB Circular A-110 (2 CFR Part 215) A-102 and A-110 apply to all federal agencies, federal grant recipients and subaward organizations Federal agencies can only apply more restrictive requirements after approval from OMB Federal agencies can impose sanctions on recipient organizations that do not comply with the applicable administrative requirements

6 What are some recent developments concerning the Administrative Requirements?
Title Change – 2 CFR 215 2 CFR 215 will soon include agency specific variations and exceptions Standard Reporting Forms: Federal Financial Report Performance Progress Report Research Performance Progress Report Real Property Report Tangible Personal Property Report Summary Report of Inventions Standard Research Terms and Conditions

7 SECTION B: Pre-Award Requirements
Questions to Answer: What is the Federal Grant and Cooperative Agreement Act? What forms should be used for applying for Federal Assistance? What is E.O ? What are “special award conditions”?

8 What is the Federal Grant and Cooperative Agreement Act?
Passed into law in 1977 Establishes government-wide criteria for determining the appropriate legal instrument for funding extramural activity Defines uses for: Grants – to accomplish a public purpose Cooperative Agreements – for substantial agency involvement Contracts – primary purpose is acquisition of services for direct benefit of Fed

9 What forms should be used when applying for federal assistance?
A – “Federal awarding agencies shall comply with the applicable report clearance requirements of 5 CFR part 1320, ‘Controlling Paperwork Burdens on the Public,’ in place of or as a supplement to the Standard Form 424 (SF-424) series” B – “Applicants shall use the SF-424 series or those forms and instructions prescribed by the Federal Awarding Agency” Most application packages use the SF-424 series

10 What is E.O ? Executive Order “Intergovernmental Review of Federal Programs” Issued to foster federalism by relying on State and local processes for the coordination and review of proposed Federal financial assistance Applicants are required to indicate on the SF 424 whether the program falls under E.O SPOC for Maryland: Linda C. Janey, J.D. Director, Maryland State Clearinghouse for Intergovernmental Assistance Please contact OSP for questions on whether or not a project falls under E.O

11 What are “special award conditions”?
– “If an applicant or recipient: has a history of poor performance, is not financially stable, has a management system that does not meet the standards prescribed in this part, has not conformed to the terms and conditions of a previous award, or is not otherwise responsible, Federal awarding agencies may impose additional requirements as needed…” Federal awarding agencies are required to notify the applicant in writing as to the nature of any additional requirements, and these requirements must dissolve after problematic conditions have been met

12 Section C: Post-Award Requirements
Questions to Answer: What are the Financial and Program Management Standards? What are the Property Standards? What are the Procurement Standards? What are the Reporting and Record-Keeping Standards? What are the Termination and Enforcement Standards?

13 What are the Financial and Program Management Standards?
Purpose: “Sections through prescribe standards for financial management systems, methods for making payments and rules for: satisfying cost sharing and matching requirements, accounting for program income, budget revision approvals, making audits, determining allowability of cost, and establishing fund availability.”

14 What are the Financial and Program Management Standards? (cont’d)
Financial Management Systems: A – “Federal awarding agencies shall require recipients to relate financial data to performance data and develop unit cost information whenever practical” B – Recipients’ financial management system should provide for the following: Accurate disclosures of financial results and records in accordance with applicable reporting reqs. Effective control over and accountability of funds, property, and other assets Comparison of outlays with budget amounts for each award Written procedures to minimize time between transfer of funds from US Treasury Written procedures for determining reasonableness, allocability, and allowability of costs, in accordance with Federal Cost Principles

15 What are the Financial and Program Management Standards? (cont’d)
Payment: (A) Procedures should minimize time before transfer of funds from U.S. Treasury E.(1) – When reimbursement method is used, the Federal awarding agency shall make payment within 30 days after receipt of the billing H – Agency shall not withhold payment for proper charges during the award period unless: Recipient has failed to comply with project objectives, the terms and conditions of the award, or Federal Reporting Requirements The recipient or subrecipient is delinquent in a debt to U.S. as defined in OMB Circular A-129

16 What are the Financial and Program Management Standards? (cont’d)
Cost Sharing: (A) Cost-sharing contributions shall be accepted only when the costs are: (1) verifiable from the recipients’ records (2) not included as contributions for any other federally-assisted project (3) necessary and reasonable for completion of project (4) allowable under the applicable Cost Principles (5) not paid by Fed under another award (6) provided for in the approved budget (B) Unrecovered indirect costs may be included as part of cost-sharing or matching only with prior approval of Agency (C),(D), (E), (F),(G), (H) – how to delineate value of various contributions Revision of Budget and Program Plans: (B) Recipients are required to report deviations from budget and program plans, and request prior approvals for: Changes in scope, objective, or key personnel (and/or effort, >25%), direct to indirect costs, training allowances, subcontracting, etc.

17 What are the Financial and Program Management Standards? (cont’d)
Allowable Costs – Recipient needs to follow applicable cost principles UMBC – must follow OMB Circular A-21 (a.k.a. 2 CFR 220) “Cost Principles for Educational Institutions” Period of Availability of Funds “Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency”

18 What are the property standards?
Purpose of property standards To set forth uniform standards governing management and disposition of property furnished by the Federal Government whose costs was charged to a project support by a Federal award Insurance coverage Recipient needs to provide at least equivalent coverage for federal property as it would its own Real Property Federal awarding agencies shall prescribe requirements that include the following: Title to property to remain with recipient Recipient shall obtain written approval for its use on other projects Disposition instructions

19 What are the property standards? (cont’d)
Equipment (A) title to equipment shall vest in recipient (B) if used by outside orgs., fee must be at least the minimum charged in private industry (C) when use for equipment expires, the equipment is to be used on other federally sponsored projects, first by other projects supported from same funding agency (E) “When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment…” (F.1) Equipment records should include (among other information): Description Serial number Source Acquisition date Location and condition Unit acquisition cost Disposition data

20 What are the property standards? (cont’d)
Supplies and other expendable property (A) title to supplies vest in recipient, if leftover supplies exceed $5K and can not be used on other projects (federal and non-federal), then recipient must reimburse the Fed. Intangible Property (A) “The recipient may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under an award. The Federal awarding agency (ies) reserve a royalty-free, nonexclusive and irrevocable right to reproduce, publish or otherwise use the work for Federal purposes, and to authorize others to do so.” (B), (C), (D), (E) – patent rights, FOIA responsibilities, etc. for Agency and recipient

21 What are the procurement standards?
Procurement Procedures (A) Recipients shall establish written procurement procedures (A.3.I-VI) Recipient solicitations for goods and services should include (among others): Clear description of the technical requirements for the material, product or service to be procured Requirements for the bidder and evaluation criteria Preference for “green” products and services (B) Recipient shall make efforts to utilize small business, minority-owned firms, and women’s business enterprises whenever possible (C) Recipient shall determine which procuring instrument to use (fixed-price contracts, cost-reimbursable contracts, purchase orders) in the best interest of the program (D) Procurements should only be made with responsible contractors who possess the ability to perform, have a good history, and have technical/financial resources (E) Circumstances when consultation with Federal awarding agency should be sought regarding the procurement

22 What are the procurement standards? (cont’d)
Cost and Price Analysis – “Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action.” Price analysis – comparison of price quotations, market price, etc. Cost analysis – is the “review and evaluation of each element of cost to determine reasonableness, allocability, and allowability Procurement Records – Procurement records should include: (A) Basis for contractor selection (B) Justification for lack of competition when competitive bids are not obtained (C) Basis for award cost or price Contract Administration – “A system for contract administration shall be maintained to ensure contractor conformance with the terms, conditions and specifications of the contract to ensure adequate and timely follow up of all purchases”

23 What are the Reporting and Record-Keeping Standards?
– Purpose of Reports and Records “Sections set forth the procedures for monitoring and reporting on the recipient’s financial and program performance and the necessary standard reporting forms. They also set forth record retention requirements”

24 What are the Reporting and Record-Keeping Standards? (cont’d)
Monitoring and Reporting Program Performance Recipients are responsible for managing and reporting all activity supported by the award (including subawards) (A) “Federal Agency shall prescribe the frequency with which the performance reports shall be submitted. Except as provided in (F), performance reports shall not be required more frequently than quarterly, or less frequently than annually.” Annual reports should be due within 90 days after the grant year Quarterly/semi-annual reports shall be due within 30 days after reporting period Final performance reports are due 90 days after termination date of award

25 What are the Reporting and Record-Keeping Standards? (cont’d)
(D) – Performance reports should include the following: A comparison of actual accomplishments with program objectives for that period Reasons why established goals were unmet, if necessary Other information as necessary, including explanations for cost overruns, etc (F) – Recipients shall notify the Awarding Agency of any developments that significantly impact/impair the program activities (G) – “Federal awarding agencies may make site visits, as needed.”

26 What are the Reporting and Record-Keeping Standards? (cont’d)
215.52(A) Financial Reporting – “The following forms or such other forms as may be approved by OMB are authorized for obtaining financial information from recipients” A.(1) – SF-269 or SF-269A, Financial Status Report (FSR) Federal agency shall require recipients to use SF-269 or SF-269A for all nonconstruction programs However, agencies have the option of not requiring SF-269/SF-269A, if the SF-270, Request for Advance or Reimbursement, or SF-272, Report of Federal Cash Transactions, is used and provides adequate information Federal Agency will determine whether the report shall be on a cash or accrual basis FSR should not be required more frequently than quarterly or less frequently than annually FSR’s should be due within 30 days after reporting period, Final FSR’s within 90 days of award termination

27 What are the Reporting and Record-Keeping Standards? (cont’d)
A.(2) – SF-272 Report of Federal Cash Transactions Used when funds are advanced to recipients in order to monitor cash advancements Forecasts of expenditures may be required SF-272 are due within 15 days following the end of each quarter. Recipients receiving more than $1million/year need to submit report monthly

28 What are the Reporting and Record-Keeping Standards? (cont’d)
Retention and access requirements for records B – “Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report” Exceptions: If any litigation,claim, or audit is in process Records for real property and equipment need to be retained for three years after final disposition If/when records are transferred to Awarding agency, the three year requirement is no longer applicable E “The Federal Awarding Agency, the Inspector General, Comptroller General of the United States, or any of their duly authorized representatives, have the right of timely and unrestricted access to any books, documents, papers, or other records of recipients that are pertinent to the awards, in order to make audits, examinations, excerpts, transcripts and copies of such documents.” Access to personnel also included

29 What are the Reporting and Record-Keeping Standards? (cont’d)
F – No Federal Agency can impose restrictions on recipients that limit public access to the records pertinent to an award GG – Indirect cost rate proposals, cost allocation plans, etc. (1) Records submitted as apart of IDC calculation, cost allocation plans, etc. must be retained for three years after that submission date (2) If records are not submitted as apart of IDC calculation, cost allocation plans, etc., then records should be retained for three years after end of the fiscal year of that proposal

30 What are the Termination and Enforcement Standards?
(A) Awards may be terminated if: The recipient materially fails to comply with the terms and conditions of the award Both the Federal Agency and Recipient agree to terminate , and to the termination conditions “By the recipient upon sending to the Federal awarding agency written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated.”

31 What are the Termination and Enforcement Standards? (cont’d)
A. – Remedies for Noncompliance: Federal agencies are able to withhold cash payments pending problem resolution Disallow costs associated with noncompliance “Wholly or partly suspend or terminate the current award.” Withhold further awards for the project/program B. – Hearings and appeals Awarding agency shall provide opportunity for recipient to appeal any disciplinary action taken by Agency C. – Costs incurred during a suspension or after termination of an award are not allowable unless written into termination/suspension conditions

32 Section D: After-the-Award Requirements
Question to Answer: What are the standards for closeout procedures?

33 What are the standards for closeout procedures?
215.71(A) – “Recipients shall submit, within 90 calendar days after the date of completion of the award, all financial, performance, and other reports as required by the terms and conditions of the award. The Federal awarding agency may approve extensions when requested by the recipient.” 215.71(B) – “Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion…” (C), (D), (E), (F), – Fed shall make prompt payments to recipient, recipient shall promptly refund unobligated balances (OMB Circular A-129), if authorized by award terms/conditions Agency shall make adjustments for Federal Share, real/personal property to be accounted for

34 What are the Termination and Enforcement Standards? (cont’d)
Subsequent adjustments and continuing responsibilities. (A) “The closeout of an award does not affect any of the following.” (1) Right of the Federal awarding agency to disallow costs or recover funds on basis of later audit review (2) continued obligation of the recipient to return funds due as a result of corrections, audit, etc. (3) “Audit Requirements in ” (4) Property management requirements (5) Record retention requirements Collection of Amounts Due

35 Section E: Additional Resources
2 CFR 215 “Uniform Administrative Requirements for Grants and Cooperative Agreements for Institutions of Higher Education, Hospitals, and other Non-Profit Organizations” (formerly OMB Circular A-110) available at: OMB Circular A-21 “Cost Principles for Educational Institutions” available at: Standard Forms for reporting available at: - Grant and Contract Accounting - UMBC Office of Technology Development All Federal Agency/Grantor websites

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