SPEAR WORKSHOP PRESENTED BY: ANGIE ROWE & CATHI BASS U NIFORM G UIDANCE : ADMINISTRATIVE R EQUIREMENTS, C OST P RINCIPLES AND AUDIT R EQUIREMENTS

Topics  Definition of Uniform Guidance  Basic Layout  Provide new and/or updated information for  Administrative Requirements (formerly A-110)  Cost Principles (formerly A-21)  Audit Requirements (formerly A-133) 2

What is the Uniform Guidance?  Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards - 2 CFR 200  It is the Office of Management and Budget’s (OMB) consolidation of their circulars for costing, administration and audit of Federal awards  It replaces 8 circulars and applies to universities, state and local governments, nonprofits, native tribes  It was issued on December 26, 2013  It was effective on December 26,

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 4

Subpart A – Acronyms & Definitions §  § Acronyms  § Definitions  Use of “should” and “must”  Should = best practices/recommended  Must = required 5

§ Modified Total Direct Cost  Modified Total Direct Cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and subawards up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award).  MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs. 6

§ Pass-through entity  Pass-through entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program. 7

§ Participant support costs  Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects. 8

Subpart B – General Provisions § § Purpose  This part establishes uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities  Federal awarding agencies must not impose additional or inconsistent requirements 9

§ Applicability  NEW table for applicability by types of award  T&C flow down to subrecipients  Subparts C-D are not applicable to  Cost-reimbursement contracts and subcontracts awarded under the Federal Acquisition Regulations (FAR)  Fixed price contracts and subcontracts awarded under the FAR whenever cost analysis is performed  The FAR serves as the administrative requirements 10

§ Effective Date  Agency implementation effective 12/26/14  Applies to awards issued after 12/26/14  COFAR FAQs and specify that funding increments on existing awards, issued post 12/26/14, may be subject to the UG at the agency’s discretion; if the amendment is subject to the UG, it will be issued with modified terms and conditions  Applies to audits for FY beginning after 12/26/14 11

§ Conflict of interest  NEW! Applies to procurement activities  Federal agencies must establish COI policies  NSF and NIH already meet the new standard;  no changes  EPA’s COI is problematic for IHEs  Grantees must disclose in writing any potential COI according to the agency’s requirements 12

Subpart C – Pre-Federal Award Requirements § –  § , Grant agreements  Fixed amount awards are allowed -NEW  § /203, Notice of funding opportunities – NEW  Provides standards for information needed in each funding opportunity  Agencies must generally post opportunities at least 60 calendar days prior to due date, but… No less than 30 calendar days 13

§ Agency review of risk posed by applicants  Must have framework for evaluating risks  Review may include:  financial stability;  quality of management systems and ability to meet the management standards prescribed;  performance history;  audit findings and reports; and/or  ability to implement statutory, regulatory, or other requirements 14

§ Information contained in a Federal award  General Federal Award Information  No more DUNS # - replaced by Unique Entity Identifier  Unique Federal Award Identification Number (FAIN)  Indication if award is R&D  Indirect cost rate  General Terms & Conditions  May be incorporated by reference  Specific Terms & Conditions, if applicable  Federal Award Performance Goals  Any other information required by the Federal agency 15

Subpart D – Post Federal Award Requirements §  Grantee Requirements – (former A-110 requirements)  Ensure FSU’s compliance at award level  Ensure SRA procedures incorporate rules regarding  Rebudgeting  Prior approvals  Ensure compliance in areas outside of SRA  Financial reporting Purchasing – Procurement standards (delayed implementation until fiscal year ending in 2017 )  Controller’s Office – Financial and Property standards  Human Resources – Personnel standards 16

Post Federal Award Requirements  § , Performance Management –  Use standard forms (e.g., RPPR for research awards)  Must relate financial data to performance  Feds are to provide clear performance goals, indicators and milestones  § , Internal Controls  Should follow GAO’s Green Book and COSO standards 17

§ Revision of budget and program plans Agency approval is required for the following:  Change in the scope or objectives of project  Change in a key person specified in application  Disengagement of Project Director or PI from the project for more than 3 months or a 25% reduction in time devoted to project  Transfer of funds budgeted for Participant Support costs to other categories of expense  Transferring out of any work under a federal award (unless specified in application)  Changes in the approved cost-sharing 18

§ Revision of budget and program plans The federal agency may waive approvals for the following:  Incur 90 days pre-award costs  Initiate a one-time extension of the period of performance by up to 12 months (some conditions apply)  Carry forward unobligated balances to subsequent periods of performance 19

§ Revision of budget and program plans (4) For Federal awards that support research, unless the Federal awarding agency provides otherwise in the Federal award or in the Federal awarding agency’s regulations, the prior approval requirements described in paragraph (d) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (d)(2) applies: (i) The terms and conditions of the Federal award prohibit the extension. (ii) The extension requires additional Federal funds. (iii) The extension involves any change in the approved objectives or scope of the project. 20

Post Federal Award Requirements  § Equipment  Property standards (States versus other grantees)  § Supplies  Computing devices (<$5K) are included as “supplies”- NEW  § Procurement Standards –NEW for universities and Non Profits (delayed implementation until fiscal year ending in 2017)  Modeled after A-102: State uses own policies  Others uses procurement standards in sections §

Subrecipient Monitoring & Management  More prescriptive requirements  Perform a risk assessment of the subrecipient  List of required elements in the subaward terms  Establish a monitoring plan for the subrecipient  Financial review  Programmatic review  Must use subrecipient’s negotiated F&A rate, negotiate with subrecipient, or provide a 10% “de minimis” rate  Possibility of delays in issuing subawards 22

§ Subrecipient and contractor determinations  The pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor.  The agency may supply and require recipients to comply with additional guidance to support these determinations 23

Subrecipients A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. Characteristics of a subrecipient: (1) Determines who is eligible to receive what Federal assistance; (2) Has its performance measured in relation to whether objectives of a Federal program were met; (3) Has responsibility for programmatic decision making; (4) Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and (5) In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing statute. 24

Contractors A contract is for the purpose of obtaining goods and services for the non-Federal entity's own use and creates a procurement relationship with the contractor. Characteristics of a contractor: (1) Provides the goods and services within normal business operations; (2) Provides similar goods or services to many different purchasers; (3) Normally operates in a competitive environment; (4) Provides goods or services that are ancillary to the operation of the Federal program; and (5) Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons. 25

§ Requirements for pass-through entities  Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, looking at:  The subrecipient’s prior experience with the same or similar subawards  The results of previous audits  Whether the subrecipient has new personnel or new/changed systems  The extent and results of Federal awarding agency monitoring 26

§ Requirements for pass-through entities  Monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes, and that subaward performance goals are achieved.  Monitoring must include: 1) Reviewing financial and performance reports 2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies detected through audits, on-site reviews, and other means 27

Subrecipient Monitoring  Depending upon the assessed risk posed by the subrecipient, the following monitoring tools may be used to ensure proper accountability and compliance: 1) Providing subrecipients with training and technical assistance on program-related matters; and 2) Performing on-site reviews of the subrecipient's program operations 28

§ Closeout  No stated change for recipient  All reports due “no later than 90 calendar days after the end date of the period of performance”  New emphasis on progress reports  New circumstances  NSF and NIH have issued in their policy and procedures that grantees must submit final financial disbursements no later than 120 days after the grant ends. FSU will still require the reporting to be done within 90 days. 29

Overview of Cost Principles: Subpart E §200.4XX  For any cost to be allowable under a federal award, it must: 1) Be necessary and reasonable for the performance of the award and allocable thereto; 2) Conform to any limitations or exclusions set forth in applicable regulations or in the award itself; 3) Be consistent with policies and procedures that apply uniformly to both federally-financed and other FSU activities; and 4) Be accorded consistent treatment. 30

§ Direct and Indirect Costs  , Direct Costs - Direct costs are those costs that can be identified specifically with a particular Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.  The salaries of administrative & clerical staff should normally be treated as indirect costs. Direct charging of these costs may be appropriate only if all of the following conditions are met. 1) Administrative or clerical services are integral* to a project or activity 2) Individuals involved can be specifically identified with the projects or activity 3) Such cost are explicitly included in the budget or have the prior written approval of the Federal awarding agency *Integral is defined as essential to the project’s goals and objectives, rather than necessary for the overall operation of the institution. 31

Direct and Indirect Costs  , Indirect Costs – are also known as Facilities and Administration (F&A) costs  FSU indirect cost rate is varied  On campus – 52%  Off campus – 26%  Mag Lab – 70% 32

§ General Provisions for Selected Items of Cost  Considerations for selected items of cost  Advertising and public relations – Recruitment of Personnel allowable  Advisory Councils – unallowable  Alcoholic Beverages - unallowable  Alumni activities – unallowable  Commencement and convocation costs - unallowable 33

§ General Provisions for Selected Items of Cost  , Compensation –personal services  Internal controls are KEY  (i) –9 standards for documenting personnel  Salaries and wages must be based on records that accurately reflect the work performed  Records must be supported by a system of internal controls  UG has strengthened the documentation requirement for institutional policy. They should/must be:  Available and easily accessible  Be up to date and consistent  Document internal controls and roles/responsibilities for all parties  Address specific payroll/compensation issues  Be supported by monitoring to confirm compliance 34

§ General Provisions for Selected Items of Cost  , Compensation –Fringe Benefits  , Conferences  Allowable Costs are: rental of facilities, speakers’ fees, costs of meals and refreshments (specifically approved in award budget), local transportation  Entertainment Costs – unallowable  Equipment and other capital expenditures – special purpose equipment are allowable as direct cost 35

§ Materials & Supplies; Computing Devices  Computing devices costing less than $5,000 that are essential and allocable may be direct charged  They may be charged 100% (in rare circumstances) to an award or may be allocated to several awards  While no prior agency approval is required, computing devices should be itemized in the proposal budget  If the computing device is not in the budget, an IT Approval Form will have to be submitted (DSR form 20)  In addition, the project must not have reasonable access to other devices or equipment that can achieve the same purpose  Devices may not be purchased for reasons of convenience or preference 36

§ / Participant Support Costs Participant support costs are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to, or on behalf of, participants or trainees (but not employees) in connection with conferences or training projects.  These costs must now be accepted by agencies as allowable costs, but still require prior agency approval.  These costs are excluded when calculating the Modified Total Direct Costs (MTDC) to determine the overall project’s F&A costs. 37

§ Publication & Printing Costs  Publication costs for electronic and print media, including distribution, promotion, and general handling are allowable  Costs of publication or sharing of research results that are incurred outside the period of award performance are allowable and may be charged before project closeout, even if the project has ended  These costs should be included in the budget 38

§ Visas, Short-term  Short-term visas (as opposed to longer-term immigration visas) are issued for a specific period and purpose, and therefore can be clearly identified as directly connected to recruitment of personnel for a federal award  These costs may be directly charged to a federal award, if they are critical and necessary for the completion of the project 39

General Provisions for Selected Items of Cost  Student Activity costs – Unallowable  Training and education costs – Allowable  Transportation costs – Allowable  Travel costs – Allowable  Temporary dependent care costs above and beyond regular dependent care that directly results form travel to conferences is allowable provided that:  The costs are consistent with the non-federal entity's documented travel policy for all entity travel.  FSU’s travel policy doesn’t include dependent care therefore it is unallowable on Federal grants. 40

Subpart F - Audit Requirements §200.5XX  Strengthens oversight and focuses audits on areas of greatest risk of waste, fraud, and abuse of taxpayer dollars  It improves transparency and accountability by making audit reports available to the public online, and  Encourages Federal agencies to take a more cooperative approach to audit resolution 41

Subpart F - Audit Requirements §200.5XX Basic Structure of Single Audit Process Unchanged  Audit 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) 42

Recent Federal Audit –National Science Foundation  Audit occurred Sep 2014 – Sep 2015  $166 million costs were audited during the audit period of April 1, 2010 through March 31, 2013  $568,130 in questioned costs (.3% of total audited)  $444,966 - personnel charges  $96,702 – equipment, material and maintenance charges  $14,090 – computer and parking charges  $8,862 – travel and supplies  $3,510 – expenditures near award expiration date FSU is currently in the audit resolution phase with NSF

NSF Audit Questions  Please explain why this purchase was necessary for and how it benefited the award.  Why was this transfer necessary and how did it benefit the award?  Please provide the reason for the transfer and why it was necessary so late in the award.  What was the budget amount and the remaining balance at the time of the transfer? Was there a cost overrun on the award transferred to or from? 44

NSF Audit Questions  Please explain why this equipment was not included in the NSF proposal budget.  How did this equipment purchase benefit the award?  Was this equipment used exclusively on this NSF award?  If allocated, please provide the allocation methodology and a list of the other projects in the allocation? 45

NSF Audit Questions  Please explain why this travel was not included in the NSF proposal budget.  Why was this travel necessary for the award?  If allocated, please provide the allocation methodology and a list of the other projects in the allocation?  How did this travel benefit the award given the limited time remaining on the award? 46

QUESTIONS 47