2 Increase in Federal Grants Activity The Catalog of Federal Domestic Assistance lists over 2,000 Federal grant programs$600B$200B$91B$24B$7B
3 Council On Financial Assistance Reform Priorities Guidance Targets Risk & Minimizes BurdenStandardized Business Processes & DataWell Trained WorkforceStrong Program Oversight:Audit ResolutionBetter Outcomes for GrantsEvidenceSpending TransparencyShared ServicesFinancial Management
4 Guidance Reform History Nov. 2009: Executive Order: Reduce Improper PaymentsFeb 2011: Presidential Memo: Reduce Administrative BurdenFeb 2012: Advance Notice of Proposed Guidance (public comments)Feb 2013: Notice of Proposed Guidance (public comments)Dec 2013: Final Uniform Guidance
5 Guidance Reform Implementation December 2013: Uniform Guidance PublishedJanuary-April 2014: Training Webcasts, Publish 2014 Single Audit Compliance SupplementJune 2014: Agencies Submit Draft Rules to OMB, Continued Outreach on ImplementationDecember 2014: Final Guidance Effective, Begin collecting metrics, gathering case studiesFall 2014: Metrics, Additional FAQs and Webcast
6 Eliminating Duplicative and Conflicting Guidance ReceivedAwardsA-102 & A-89A-87A-133 &A-50Subawards to universitiesA-110A-21Subawards to nonprofitsA-122Then:INSERT YOURSTATE OR AGENCY HERENow: All OMB guidance streamlined in 2 CFR 200.
7 2 CFR 200 -Basic Layout 6 Subparts A through F Subpart A, 200.XX – Acronyms & DefinitionsSubpart B, 200.1XX – GeneralSubpart C, 200.2XX – Pre Award (Federal agencies)Subpart D, 200.3XX – Post Award (Recipients)Subpart E, 200.4XX – Cost PrinciplesSubpart F, 200.5XX – Audit11 Appendices - I through XI
8 Sec. 200.XX, Acronyms & Definitions 200.1 through , Definitions99 separate sections and indexesApplicable to all requirements (administrative, cost and audit) and all types of granteesUse of “should” and “must”Should = best practices or recommended approachMust = required
9 Sec. 200. 1XX, General 200.101, Applicability 200.110 Effective Date New table for applicability by types of awardT&C flow down to subrecipientsEffective DateAgency implementation effective 12/26/14Apply to awards and award increments issued after 12/26/14Apply to audits for FY beginning after 12/26/14 , Conflict of interest - NEWFederal agencies must establish COI policiesGrantees must disclose in writing any potential COI
10 Sec. 200.2XX, Pre-Award- Federal , Grant agreementsFixed amount awards are allowed - NEW, Notice of funding opportunities - NEW, Merit review of proposals – NewMust have a merit review processProcess must be transparent in funding opportunities, Review of risk of applicantsMust have framework for evaluating risksMay consider financial stability, performance history, audit reports
11 Sec. 200.3XX, Post- Award- Grantees , Performance Management –Use standard forms (e.g., RPPR for research awards)Must relate financial data to performanceFeds are to provide clear performance goals, indicators and milestones, Internal ControlsShould follow GAO’s Green Book and COSO standards, Period of performanceNo-cost extension may be allowed – agency’s option
12 Sec. 200.3XX, Post- Award- Grantees , EquipmentProperty standards (States versus other grantees), SuppliesComputing devices (<$5K) are included as “supplies” - NEW, Procurement Standards – NEW for universities and Non ProfitsModeled after A-102: State uses own policies, Others uses procurement standards in sectionsThe Procurement “Bear Claw”
13 Procurement “Claw” (Sections 200.317-326) 3.SealedBids4.CompetitiveProposalsSmall Purchases5.SoleSourceGeneral Standards:A. Documented PoliciesB. NecessaryC. Full & Open CompetitionD. Conflict of InterestE. Documentationi. Cost & Price Analysisii. Vendor Selection1.Micro-Purchases
14 Procurement “Claw” (Section 200.320) 3.SealedBids4.CompetitiveProposals2.SmallPurchases5.SoleSource• > $150K• Construction projects• Price is a major ---factor• > $150K• Fixed price or cost ---reimbursement• RFP withevaluation methods1.MicroPurchases• Up to $150K• Rate quotations• No cost or price analysis• Unique• Public emergency• Authorized by agency(or PTE)• No competition• $3K• No quotations• Equitable distributions
15 Sec. 200.3XX, Post-Award- Grantees , Requirements for pass-through entities – NEWIncludes audit responsibilities (formerly in A-133)Pass-through entities responsibilities:Provide subaward informationProvide indirect cost ratePerform risk assessment for subrecipent monitoringVerify compliance to audit requirementsReport in accordance to FFATA
16 Sec XX, Cost principles, Prior Written Approval – 22 items of cost, Direct costsParagraph (c) - Administrative SW can be direct costs - NEW, Indirect (F&A) CostsMust accept approved negotiated rates, exceptAllowed by Federal statute or regulationApproved by agency head or delegate, OMB notified of deviations10% of MTDC de minimis IDCFirst timers and new grantees onlyCan be used indefinitelyOne time four-year extension of current approved rate (final and pre-determined rates only)
17 Sec XX, Cost principles, Compensation – personal services – New LanguageRemoved A-21 examplesInternal controls are KEY(i) – 9 standards for documenting personnelE.g., supported by system of IC, budget estimates may be usedSubstitute systems are allowed (430 (i) (5))Blended and braided funds allowed, with Fed approval (430 (i) (7))Use of institutional base salary for IHE
18 Sec. 200.4XX, Cost principles 200.431, Compensation – Fringe Benefits Family friendly leave - NEW, ConferencesCosts are appropriate, necessary and minimized to the Federal awardAllow costs for finding local dependent care, Idle Facilities and CapacityNecessary due to fluctuations in workload, e.g., shared services arrangements
19 Sec. 200.4XX, Cost principles 200.449, Interest Section (b)(2), allow financing costs associated with patents and computer software – effective January 1, 2016, Materials and SuppliesSection (c) – may be charged as direct costsInclude computing devices (defined in )
20 Sec. 200.5XX, Audit Requirements The final guidance right-sizes the footprint of oversight and Single Audit requirements to strengthen oversight and focus audits where there is greatest risk of waste, fraud, and abuse of taxpayer dollars.It improves transparency and accountability by making single audit reports available to the public online, and encourages Federal agencies to take a more cooperative approach to audit resolution in order to more conclusively resolve underlying weaknesses in internal controls.
21 Sec. 200.5XX, Audit Requirements Revisions Focus Audit On RiskIncreases audit threshold.Strengthens risk-based approach to determine Major Programs.Provides for greater transparency of audit results.Strengthens agency use of the single audit process.Provides for public outreach to focus Compliance Supplement on requirements of highest risk.
22 Sec. 200.5XX, Audit Requirements Basic Structure of Single Audit Process UnchangedAudit threshold ( ).Subrecipient vs. Contractor ( (f) & ).Biennial ( ) & Program-specific ( ) audits.Non-Federal entity selects auditor ( ).Auditee prepares financial statements & SEFA( ).Audit follow-up & corrective action( & ).9 month due date (set in law) ( (a)).Reporting to Federal Audit Clearinghouse ( ).Major programs determined based on risk ( ).Compliance Supplement overall format (Appendix XI).
23 Appendix XI- Compliance Supplement Supplement is published as separate process so the final changes are not included in the Guidance.Future changes will be based on available evidence of past audit findings & potential impact of non-compliance.Further public outreach will be conducted prior to making structural changes to Supplement format.2014 Supplement previews the implementation of changes.Changes will not be effective until the 2015 Supplement.
24 For More Information Visit: CFO.gov/COFAREngage With COFARSend Questions To:omb.eop.govThank you!