UNIFORM GUIDANCE: RESULTS AND BEST PRACTICES Drag Picture and Send to Back Brian Mosier, CPA, CGFM AGA Great Lakes Region - RVP October 26, 2016 www.agacgfm.org

Drag Picture and Send to Back What is an RVP?

GOVERNANCE www.agacgfm.org/leadership Daily operations led by a Chief Executive Officer located at the national office in Alexandria, Va. Strategic guidance by a National President who chairs the National Executive Committee and Board of Directors Ann M. Ebberts, MS, PMP AGA Chief Executive Officer aebberts@agacgfm.org Douglas A. Glenn, CPA 2016–2017 AGA National President dglenn@agacgfm.org

Ways to Get Involved in AGA Serve on local chapter committee Serve as a local chapter officer Serve as a regional officer Join a National Board or Committee Local - http://www.greatercolumbusaga.org/ Regional/National - https://www.agacgfm.org/Membership/Connect/Awards-Recognition/Call-for-Nominations.aspx

Drag Picture and Send to Back Uniform Guidance

Goals of the Uniform Guidance Make compliance requirements and other federal award components uniform across all recipient types Improve performance outcomes Reduce unnecessary administrative burden

How have we done? Uniform Guidance was effective December 26, 2014 Audit requirement effective for years ending after December 26, 2015 Council on Financial Assistance Reform (COFAR) established to: Provide recommendations to Office of Management and Budget Share best practices with departments and agencies Engage relevant stakeholders

Audit Metrics Established by COFAR Number of Single Audit Reports Number of Major Programs Selected for Audits (**) Number of Modified Opinions for Major Programs Selected for Audits (**) Number of Audit Findings of Material Weaknesses in Internal Controls for Major Programs Selected for Audits (**) Number of Repeat Findings for Higher Risk Major Programs (**) Number of Audit Objectives in Compliance Supplement (**) – Information not readily available at the time of this presentation

Audit Metrics Established by COFAR

Audit Metrics Established by COFAR

Administrative Metrics Established by COFAR Number of OMB Approved Information Collections for Grants and Cooperative Agreements Number of New Awards Issued Number of New Fixed Amount Awards Issued Number of Agency Exceptions by CFDA to Federally Negotiated Indirect Cost Rates Number of Indirect Cost Rate Agreements Issued by Cognizant Agencies Number of Extensions of Indirect Cost Rate Agreements Issued

Administrative Metrics Established by COFAR

Administrative Metrics Established by COFAR

Administrative Metrics Established by COFAR

Best Practices in Implementing Uniform Guidance Merit Review and Risk Assessment Subaward Determination Subrecipient Monitoring Fixed Amount Awards Personnel Services Indirect Cost Rates Single Audit and CAROI

Pool of Grant Applicants Merit Review and Risk Assessment High Risk Frequent monitoring and guidance Specific Conditions Moderate Risk Some monitoring and guidance Possible specific conditions Low Risk Limited/Focused monitoring Communicate best practices Pool of Grant Applicants

Merit Review and Risk Assessment 2 CFR 200.204 – Federal Awarding Agency Review of Merit Proposals Federal Awarding Agencies must identify recipients that determine those most likely to achieve outcomes Grant Recipients should implement processes to track and report positive outcomes

Merit Review and Risk Assessment 2 CFR 200.205 – Federal Awarding Agency Review of Risk Posed by Applicants Federal Awarding Agencies must have a framework in place for evaluating risks posed by applicants to evaluate: Financial stability Quality of management systems History of performance Reports and findings from audits Applicant’s ability to effectively implement requirements Grant Recipients need to be prepared to discuss all of the above

Merit Review and Risk Assessment 2 CFR 200.207 – Specific Conditions Based on risks, Federal Awarding Agency (and pass-through) may impose specific conditions Requiring reimbursement payments vs. advance payments Frequent performance monitoring Enhanced reporting (performance and financial) Requiring technical or management assistance Establishing additional prior approvals

Merit Review and Risk Assessment Success Stories Ideas

Subaward Determination

Subaward Determination 2 CFR 200.330 – Subrecipient and contractor determinations Federal Awarding Agencies should make checklists available to recipients https://www.agacgfm.org/Intergovernmental/Free-Online-Products-for-Financial-Managers.aspx Grant recipients should make a determination for each agreement that involves federal award dollars

Subaward Determination Success Stories Ideas

Subrecipient Monitoring 2 CFR 200.331 – Requirements for pass-through entities Pass-through entities must: Issue subawards with required data elements Evaluate subrecipient’s risk of noncompliance Consider imposing specific subaward conditions Monitor the activities of the subrecipient Tailor monitoring activities to the risks identified Verify each subrecipient has Single Audit, if applicable Consider audit results

Negotiate Award Amount Establish Payment Milestones Fixed Amount Awards Negotiate Award Amount Establish Payment Milestones Pay for Performance

Fixed Amount Awards 2 CFR 200.201 – Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts Federal Awarding Agencies should treat these as a grant agreement Allowable cost/activity compliance would be “N/A” All other compliance requirements could still be applicable Federal Awarding Agencies should use fixed amount awards as a way to ensure performance is achieved

Fixed Amount Awards Success Stories Ideas

Personnel Services 2 CFR 200.430 – Compensation – personal services Significant changes with Uniform Guidance Changes relate to methods with tracking costs, not the types of costs allowed Changed from prescriptive compliance requirements to a framework

OMB Circular A-87 (old guidance) Personnel Services OMB Circular A-87 (old guidance) Employees working on one program or cost objective can complete periodic certifications Everyone else must complete personnel activity reports Personnel activity reports must be signed by employee and conform to other standards

Uniform Guidance – Standards for Documentation Personnel Services Uniform Guidance – Standards for Documentation Be supported by a system of internal control Reasonably reflect total activity of employee Comply with the established accounting policies and procedures

Personnel Services Considerations of implementing a new process of tracking and allocating personnel costs Only change from personnel activity reports if it adds efficiency Ensure the new process meets the Standards of Documentation of Personnel Expenses When evaluating new processes implemented by recipients, be aware of significant changes in allocations

Personnel Services Success Stories Ideas

Indirect Cost Rates 2 CFR 200.414 – Indirect (F&A) costs Specific requirements for Institutions of Higher Education, Not-for-profit Organizations, and State and Local Governments included in Appendixes Cost allocation plans are still allowed, negotiated indirect cost rates are not required

Indirect Cost Rates Federal agency with the largest dollar value of Federal awards is the cognizant agency for indirect costs Process for approval has no significant changes Any non-Federal entity that has never received a negotiated indirect cost rate may elect to charge a de minimis rate of 10% of modified total direct costs. Any non-Federal entity that has a negotiated indirect cost rate may apply for a one-time extension of the rates for a period of up to four years. Negotiations only need to occur once every five years

Indirect Cost Rates Success Stories Ideas

Single Audit and CAROI AGA CAROI Playbook 2 CFR 200.25 2 CFR 200.26

Single Audit and CAROI Cooperative Audit Resolution and Oversight Initiative (CAROI) Section 200.25 – Cooperative Audit Resolution Section 200.26 – Corrective Action Section 200.513 - Responsibilities

Single Audit and CAROI Federal Awarding Agencies must perform the following: Follow-up on audit findings to ensure the recipient takes appropriate and timely corrective action Use cooperative audit resolution mechanisms to improve federal program outcomes Provide OMB with the name of a key management single audit liaison who must promote the federal awarding agency’s use of cooperative audit resolution mechanisms

Single Audit and CAROI

Single Audit and CAROI More information on CAROI and the CAROI Playbook can be found at: https://www.agacgfm.org/Intergovernmental/Free-Online-Products-for-Financial-Managers.aspx Implementation of continuous audit resolution is required, but should not be treated as only a compliance requirement. Being a champion of this process will help agencies improve the audit resolution process and improve program performance.

THANK YOU! Brian Mosier bmosier@cshco.com