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 paymentsNovember 2009 – Executive Order 13520Improved agency accountabilityIncreased transparencyJuly 2010 – Improper Payments Elimination and Recovery Act (IPERA)Put into law specific thresholds for identifying high-risk programsStrengthened corrective action plansExpanded payment recapture auditsEstablished annual OIG compliance reviewsJanuary 2013 – Improper Payments Elimination & Recovery Improvement Act (IPERIA)Codified EO requirementsImproved agency estimation and recovery of improper paymentsReinforced and accelerated the Administration’s “Do Not Pay” efforts
4 A-123 Appendix C UpdateVision: transform improper payment compliance framework to create a more unified, comprehensive, and less burdensome set of requirements for agencies and OIGsIPERIA required OMB to issue new guidance—we approached it as an opportunity to overhaul Appendix C of OMB Circular A-123Process: as we drafted the new Appendix C, we had to consider the following:The three statutes and the Executive OrderPrevious 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 13520Consolidates and streamlines reporting requirements for agencies and OIGsAgencies can incorporate most of their reporting into AFR or PAROIGs for agencies with high-priority programs are no longer required to issue separate reports under EO and IPERA—one report will sufficeProvides a more detailed categorization of improper paymentsAdds an internal control framework for addressing improper paymentsProvides 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 usefulNew guidance establishes new categories for reporting improper paymentsProvides more granularity on estimates, leading to:More effective corrective actions at the program levelMore focused strategies for reducing improper payments at the government-wide levelBetter communication about the nature of improper payments
8 Corrective ActionsWe are conducting an analysis to identify program-specific corrective actions with the highest return-on-investment or potential for substantially reducing improper paymentsQuestions 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 ?
10 DATA Act GoalsExpand 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 USASpending.gov 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 USASpending.gov by holding federal agencies accountable for the completeness and accuracy of the data submitted.Additional expenditures information on USAspendingSec 3 requires the Secretary of the Treasury, in consultation with the Director of the Office of Management and Budget (OMB), to post on the USAspending.gov 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 standardsREQUIREMENTS.—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 computer3readable 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 AppropriationApportionmentAllotment(Allocation)CommitmentObligationPaymentReceipts/FinancingAward360 Spending Life CycleDATA ActFFATA (USAspending.gov)
12 Governance and Implementation Structure Executive Steering Committee – OMB and TreasuryInter-Agency Advisory Committee – OMB, Treasury, andRepresentatives from: CFOC, BOAC, ACE, COFAR, CAOC, CIOC, PIC, OSTP, GSA, CIGIELeadTreasury(Data Transparency PMO)OMBDesign and ImplementData Exchange StandardsBlueprint/roadmap between data elementsData Definition StandardsPilot to Reduce Admin BurdenData AnalyticsSupportSenior Accountable Officials from each of the 24 CFO Act agenciesConsultIndustryNon-Federal stakeholdersFederal Lines of Business
13 DATA Act Requirements FFATA Sec. 3 “Full disclosure of federal funds”
14 DATA Act Implementation Approach Data-centricAvoid massive system changes, rather focus on managing dataIncrementalRelease data as it becomes availableReuseMaximize and leverage use of existing processes and investmentsCollaborativeFeedback drives improvementsIterative/AgileConduct many small scale pilots
15 Launch improved USAspending (March) DATA Act MilestonesAgencies 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 RequirementsOMB Guidance to agencies to reduce reporting burden (August)DATA Act Enacted(May)First IG report (Nov.)20142015201620172018Agencies 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 initiativesHow 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 Guidance2 CFR 200
18 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† April 2013
19 Guidance Reform History 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, Baseline Metrics Collected, Case Studies of Best Practices PublishedFall 2014: Metrics, Additional FAQs and Webcast
20 Eliminating Duplicative and Conflicting Guidance AwardsReceivedA-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.
23 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 - FederalSubpart D, 200.3XX – Post Award – RecipientsSubpart E, 200.4XX – Cost PrinciplesSubpart F, 200.5XX – Audit11 Appendices - I through XI
24 Top Ten Impact Changes 200.1 through 99 Standard Definitions , Review of risk of applicantsMust have framework for evaluating risksShould 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 CostsMust accept approved negotiated rates (some exceptions)10% of MTDC de minimis IDCOne time four-year extension of current approved rate (final and pre-determined rates only), Compensation – Personal Services200.5XX, Single AuditsHigher 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.SealedBids4.CompetitiveProposalsSmall Purchases5.SoleSourceGeneral Standards:A. Documented PoliciesB. NecessaryC. Full & Open CompetitionD. Conflict of InterestE. Documentationi. Cost & Price Analysisii. Vendor Selection1.Micro-Purchases
28 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
30 Agency Implementation Adopted by 28 Federal awarding agencies on December 19, 2014Agency implementation regulations available in 2 CFREffective for awards issued on or after December 26, 2014
31 Interim Final Rule Comments Joint interim final rule comments were due February 17, 2015OMB is in the process of reviewing comments in coordination with Federal awarding agencies
32 MetricsOMB Memorandum M requests non-Federal stakeholder feedback on the overall impact on burden and waste, fraud, and abuseThe Council on Financial Assistance Reform (COFAR) and OMB is currently accepting feedback on the COFAR website
33 Resources The COFAR website is available at: https://cfo.gov/cofar/ Includes:FAQsWebcastsCrosswalk to agency exceptions and additions
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