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Mark Reger, Deputy Controller Gilbert Tran, Policy Analyst

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1 Mark Reger, Deputy Controller Gilbert Tran, Policy Analyst
OMB Update Mark Reger, Deputy Controller Gilbert Tran, Policy Analyst March 11, 2015

2 Topics Improper Payments Transparency – Data Act Implementation
Uniform Guidance for Grants 

3 Improper Payments - Brief History
November 2002 – Improper Payments Information Act (IPIA) Created basic framework for identifying and reporting improper payments November 2009 – Executive Order 13520 Improved agency accountability Increased transparency July 2010 – Improper Payments Elimination and Recovery Act (IPERA) Put into law specific thresholds for identifying high-risk programs Strengthened corrective action plans Expanded payment recapture audits Established annual OIG compliance reviews January 2013 – Improper Payments Elimination & Recovery Improvement Act (IPERIA) Codified EO requirements Improved agency estimation and recovery of improper payments Reinforced and accelerated the Administration’s “Do Not Pay” efforts

4 A-123 Appendix C Update Vision: transform improper payment compliance framework to create a more unified, comprehensive, and less burdensome set of requirements for agencies and OIGs IPERIA required OMB to issue new guidance—we approached it as an opportunity to overhaul Appendix C of OMB Circular A-123 Process: as we drafted the new Appendix C, we had to consider the following: The three statutes and the Executive Order Previous Appendix C version (M-11-16) Input from agencies, OIGs, GAO, and OMB

5 New Appendix C Highlights
The updated guidance reconciles IPERIA requirements that are identical to requirements from EO 13520 Consolidates and streamlines reporting requirements for agencies and OIGs Agencies can incorporate most of their reporting into AFR or PAR OIGs for agencies with high-priority programs are no longer required to issue separate reports under EO and IPERA—one report will suffice Provides a more detailed categorization of improper payments Adds an internal control framework for addressing improper payments Provides guidance to agencies—as required by IPERIA—to strengthen the statistical validity of estimates and include payments to Federal employees in the definition of improper payments, among other things

6 New Improper Payment Categories
Previously only three categories; not very useful New guidance establishes new categories for reporting improper payments Provides more granularity on estimates, leading to: More effective corrective actions at the program level More focused strategies for reducing improper payments at the government-wide level Better communication about the nature of improper payments


8 Corrective Actions We are conducting an analysis to identify program-specific corrective actions with the highest return-on-investment or potential for substantially reducing improper payments Questions we are interested in: Which current corrective actions are the most effective in reducing improper payments in your programs? Could you list one or two things that your programs are not already doing (but could realistically do) that would lead to a significant decrease in improper payments? What, if any, are the barriers preventing your agency from taking these actions, and what would it take to overcome those barriers? If you implemented these actions, by how much could the improper payment rate go down for your programs? How has your agency advanced data analytics and improved technology to prevent and reduce improper payments ?

9 DATA Act Implementation Update

10 DATA Act Goals Expand the Federal Funding Accountability and Transparency Act of 2006 by disclosing direct federal agency expenditures and linking federal contract, loan, and grant spending information to programs of federal agencies to enable taxpayers and policy makers to track federal spending more effectively. Provide consistent, reliable, and searchable government-wide spending data that is displayed accurately for taxpayers and policy makers on the website. Analyze federal spending data to proactively prevent waste, fraud, abuse, and improper payments. Simplify reporting for entities receiving federal funds by streamlining reporting requirements and reducing compliance costs while improving transparency. Improve the quality of data submitted to by holding federal agencies accountable for the completeness and accuracy of the data submitted. Additional expenditures information on USAspending Sec 3 requires the Secretary of the Treasury, in consultation with the Director of the Office of Management and Budget (OMB), to post on the website the following information for funds made available to or expended by a Federal agency: (1) for each appropriations account – the budget authority appropriated, the amount obligated, the unobligated balances, and any other budgetary resources; (2) the amounts obligated and outlayed for each program activity; (3) the amounts obligated and outlayed for each object class; and (4) for each program activity, the amounts obligated and outlayed by object class. Treasury has three years after the date of enactment of the DATA Act to first post this information and is then required to post information on a quarterly basis, and, where practicable, on a monthly basis. Financial data standards REQUIREMENTS.—The data standards established shall: 1) incorporate widely accepted common data elements, such as those developed and maintained by— (A) an international voluntary consensus standards body; (B) Federal agencies with authority over contracting and financial assistance; and (C) accounting standards organizations; (2) incorporate a widely accepted, nonproprietary, searchable, platform-independent computer3 readable format; (3) include unique identifiers for Federal awards and entities receiving Federal awards that can be consistently applied Government-wide; (4) be consistent with and implement applicable accounting principles; (5) be capable of being continually upgraded as necessary; (6) produce consistent and comparable data, including across program activities; and (7) establish a standard method of conveying the reporting period, reporting entity, unit of measure, and other associated attributes.

11 DATA Act in Context of Spending Life Cycle
Appropriation Apportionment Allotment (Allocation) Commitment Obligation Payment Receipts/ Financing Award 360 Spending Life Cycle DATA Act FFATA (

12 Governance and Implementation Structure
Executive Steering Committee – OMB and Treasury Inter-Agency Advisory Committee – OMB, Treasury, and Representatives from: CFOC, BOAC, ACE, COFAR, CAOC, CIOC, PIC, OSTP, GSA, CIGIE Lead Treasury (Data Transparency PMO) OMB Design and Implement Data Exchange Standards Blueprint/roadmap between data elements Data Definition Standards Pilot to Reduce Admin Burden Data Analytics Support Senior Accountable Officials from each of the 24 CFO Act agencies Consult Industry Non-Federal stakeholders Federal Lines of Business

13 DATA Act Requirements FFATA Sec. 3 “Full disclosure of federal funds”

14 DATA Act Implementation Approach
Data-centric Avoid massive system changes, rather focus on managing data Incremental Release data as it becomes available Reuse Maximize and leverage use of existing processes and investments Collaborative Feedback drives improvements Iterative/Agile Conduct many small scale pilots

15 Launch improved USAspending (March)
DATA Act Milestones Agencies report information in accordance with the standards. Information published on public website (May) Report on results of reporting pilot (August) Issue guidance to agencies on data standards and conduct pilot (May) Establish pilot to standardize financial reporting (May) DATA Act Requirements OMB Guidance to agencies to reduce reporting burden (August) DATA Act Enacted (May) First IG report (Nov.) 2014 2015 2016 2017 2018 Agencies implement June 2013 OMB memo on data quality (Q1) USAspending transitioned to Treasury (Feb.) Launch improved USAspending (March) USAspending short-term improvements

16 Federal Spending Transparency at the State Level
States have been making great strides and launching robust transparency initiatives How do you use this data to manage? How can we complement and support your work on transparency with our efforts? We welcome continued feedback and partnership. Check out our GitHub page:

17 The New Uniform Guidance
♫ Are You Ready for This ? The New Uniform Guidance 2 CFR 200

18 Guidance Reform History
Nov. 2009: Executive Order: Reduce Improper Payments Feb 2011: Presidential Memo: Reduce Administrative Burden Feb 2012: Advance Notice of Proposed Guidance (public comments) Feb 2013: Notice of Proposed Guidance (public comments) Dec 2013: Final Uniform Guidance † April 2013

19 Guidance Reform History
December 2013: Uniform Guidance Published January-April 2014: Training Webcasts, Publish 2014 Single Audit Compliance Supplement June 2014: Agencies Submit Draft Rules to OMB, Continued Outreach on Implementation December 2014: Final Guidance Effective, Baseline Metrics Collected, Case Studies of Best Practices Published Fall 2014: Metrics, Additional FAQs and Webcast

20 Eliminating Duplicative and Conflicting Guidance
Awards Received A-102 & A-89 A-87 A-133 &A-50 Subawards to universities A-110 A-21 Subawards to nonprofits A-122 Then: INSERT YOUR STATE OR AGENCY HERE Now: All OMB guidance streamlined in 2 CFR 200.



23 2 CFR 200 -Basic Layout 6 Subparts A through F
Subpart A, 200.XX – Acronyms & Definitions Subpart B, 200.1XX – General Subpart C, 200.2XX – Pre Award - Federal Subpart D, 200.3XX – Post Award – Recipients Subpart E, 200.4XX – Cost Principles Subpart F, 200.5XX – Audit 11 Appendices - I through XI

24 Top Ten Impact Changes 200.1 through 99 Standard Definitions
, Review of risk of applicants Must have framework for evaluating risks Should consider financial stability, performance history, audit reports , Supplies (computing devices) , Procurement Standards , Prior Written Approval (22 items)

25 Top Ten Impact Changes 200.407, Prior Written Approval (22 items)
, Direct Costs , Indirect Costs Must accept approved negotiated rates (some exceptions) 10% of MTDC de minimis IDC One time four-year extension of current approved rate (final and pre-determined rates only) , Compensation – Personal Services 200.5XX, Single Audits Higher Threshold ( ) Better Transparency ( ) More Focus on Risk ( )

26 “Should” and “Must” Shall is Out – Yes, Shout it Out But Should is In May will be back So will April and June Orange is the new Black Must is the new Shall

27 Procurement “Claw” (Sections 200.317-326)
3. Sealed Bids 4. Competitive Proposals Small Purchases 5. Sole Source General Standards: A. Documented Policies B. Necessary C. Full & Open Competition D. Conflict of Interest E. Documentation i. Cost & Price Analysis ii. Vendor Selection 1. Micro-Purchases

28 Procurement “Claw” (Section 200.320)
3. Sealed Bids 4. Competitive Proposals 2. Small Purchases 5. Sole Source • > $150K • Construction projects • Price is a major ---factor • > $150K • Fixed price or cost ---reimbursement • RFP with evaluation methods 1. Micro Purchases • 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

29 OK, so what’s next?!

30 Agency Implementation
Adopted by 28 Federal awarding agencies on December 19, 2014 Agency implementation regulations available in 2 CFR Effective for awards issued on or after December 26, 2014

31 Interim Final Rule Comments
Joint interim final rule comments were due February 17, 2015 OMB is in the process of reviewing comments in coordination with Federal awarding agencies

32 Metrics OMB Memorandum M requests non-Federal stakeholder feedback on the overall impact on burden and waste, fraud, and abuse The Council on Financial Assistance Reform (COFAR) and OMB is currently accepting feedback on the COFAR website

33 Resources The COFAR website is available at:
Includes: FAQs Webcasts Crosswalk to agency exceptions and additions

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