Financial Management Program Top Ten Things to Know About New Federal Grant Compliance Presented by: Tracy Arner, CPA 1

Learning Outcome At the end of this session, the participant will be able to discuss: 1.New name for uniform grant guidance 2.Where to find guidance 3.Effective dates 4.Single audit threshold 5.UGG Sections 6.Significant definitions 7.Select compliance responsibilities 8.Tracking your award 9.Internal control guidelines 10.Purchasing guidelines 2

1. New Name Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200

2. Where to Find New Guidance –Free online access to official information from all three branches of federal government –U.S. Government Publishing Office, Federal Digital System 4

Daily Federal Register – publishes amendments to federal agency rules or regulations Where to Find New Guidance

Online version of CFR – –Updated daily for changes published in the Federal Register –Can search online by title and part –Only the printed version is official –When researching a section of the e-CFR, verify results against official version at as well as Federal Register amendmentswww.fdsys.gov –Administrative Committee of the Federal Register (ACFR) is working to grant the e-CFR official status 6 2. Where to Find New Guidance

3. Effective Dates AUDIT Fiscal years beginning after 12/26/2014 § (b) Early Implementation NOT allowed FY 2015 Audits possibly test grants –Subject to both old & new requirements

3. Effective Dates ADMINISTRATIVE REQUIREMENTS Effective for awards after 12/26/14 § (Previously- A-102 and A-110) –Those matters common to grants in general, such as financial management, kinds and frequency of reports, and retention of records. –Distinguished from programmatic requirements, which concern matters that can be treated only on a program-by-program or grant-by-grant basis, such as kinds of activities that can be supported by grants under a particular program

4. Single Audit Threshold Increased from $500,000 to $750,000 § (a)

5. UGG Sections

Subpart C Federal agency or Pass-Through Entity (PTE) must decide on the appropriate instrument for the Federal award § –Grant agreement –Contract –Cooperative agreement –Fixed amount award 6. Definitions

Form of agreements Grant Agreement § (a) To enter a relationship To transfer anything of value to the non- Federal entity To carry out a public purpose Not to acquire property or services for the Federal awarding agency or pass-through entity's direct benefit or use 6. Definitions - Subpart A

6. Definitions – Subpart A Form of agreements Contract § Legal instrument by which a non-federal entity purchases property or services needed to carry out a project or program under a federal award Cooperative agreement § (b) –Provides for substantial involvement between the Federal awarding agency or pass-through entity and the non-Federal entity in carrying out the activity contemplated by the Federal award

Form of agreements Fixed Amount Award § Type of grant agreement under which a federal awarding agency or pass-through entity provides a specific level of support without regard to actual costs incurred under the federal award Accountability is based on performance and results 6. Definitions – Subpart A

Form of agreements Subaward § An award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity Does not include payments to a contract or beneficiary of a federal program 6. Definitions – Subpart A

Entity Contractor § Entity that receives a contract as defined in § replaces term vendor Non-Federal Entity § State, local government, Indian tribe, institution of higher education, or non-profit organization that carries out a federal award as a recipient or subrecipient 6. Definitions Subpart A

Entity Pass-through entity § Non-federal entity that provides a subaward to a subrecipient to carry out part of a Federal program 6. Definitions Subpart A

Entity Subrecipient § Non-federal entity that receives a subaward from a pass-through entity to carry out part of a federal program but does not include an individual that is a beneficiary of the program 6. Definitions Subpart A

7. Your Compliance Responsibilities § (b)(1) Terms and conditions flow down to subawards to sub-recipients –Unless specified otherwise –Federal agencies prohibited from imposing additional or inconsistent requirements (with some limited exceptions outlined in § & ) When approved by OMB Required by Federal statutes, regulations, or Exec order

7. Your Compliance Responsibilities Review form of your agreement for the following requirements –Reporting –Compliance –Eligibility

7. Your Compliance Responsibilities Payment – § (b) Largely the same as previously in A-102 Grants and Cooperative Agreements with State and Local Governments Payment method must minimize time between receipt of federal funds and their disbursement NFE payment must be in advance provided NFE maintains written procedures that minimize time elapsing between transfer of funds and disbursement

7. Your Compliance Responsibilities Payment – § § (b)(3)Reimbursement is preferred method if requirement for advances cannot be met (there are some exceptions (see (b)(4)) Minimum amount needed for actual cash disbursements NFE must make timely payment to contractors

7. Your Compliance Responsibilities Compliance Supplement (CS) Appendix XI to Title 2 CFR Part 200

7. Your Compliance Responsibilities

Audit for federal grants >=$750,000 Qualified auditor Single Audit Report –Compliance –Internal Control –Schedule of Expenditures of Federal Awards (SEFA) –File at Federal Audit Clearinghouse 7. Your Compliance Responsibilities

8. Properly Tracking Your Award Financial Management System – § (b) 1. Identification in its accounts of all federal awards received and expended –Federal program name –Federal agency –CFDA number and title –Federal award identification number and award year –Name of the federal agency –Pass-through entity, if any (PTE)

8. Properly Tracking Your Award Financial Management System – § (b) 2. Accurate, current, and complete disclosure of –Financial results of each federal award or program 3. Identify the source and application of funds –Supported by adequate documentation 4. Effective control over and accountability for –All funds, property, and other assets

8. Properly Tracking Your Award Financial Management System – § (b) 5. Comparison of expenditures to budget for each award 6. Written procedures to implement the requirements for –Cash management –Determining allowability of costs in accordance with cost principles

8. Properly Tracking Your Award § (d) Property records must be maintained that include Description Serial number or other identification number Source of funding –Including Federal Award Identification Number (FAIN) Who holds title

8. Properly Tracking Your Award § (d) Property records must be maintained that include Acquisition date Cost of the property % of federal participation in project costs Location, use, and condition Disposition data including –Date of disposal –Sales price

8. Properly Tracking Your Award Equipment – § (d)(2) –Physical inventory at least every 2 years –Controls to prevent loss, damage, or theft –Adequate maintenance –Sale for highest return

9. Implementing Internal Controls § NFE must establish and maintain effective internal control over federal award –Provides reasonable assurance that NFE is managing the award in compliance with federal statutes, regulations, and terms and conditions –Internal controls should (recommended practice) be in compliance with guidance in either Green Book or COSO

10. Follow Purchasing Guidelines Subpart D – Post Federal Award Requirements Micro-purchases < $3,000 – § (a) - NEW –No need for quotations –Equitable distribution among qualified vendors Small purchases >$3,000 and < $ 150,000 – § (b) – Had been $100,000 – Circular A (d)(1) –$150,000 is current Simplified Acquisition Threshold. Will be indexed for inflation – UGG Subpart A – Definitions § –Simple & informal methods –Quotations must be obtained from adequate number of qualified sources 34

Subpart D – Post Federal Award Requirements Sealed bids (formal advertising) > $150,000 – § (c) –Preferred for construction projects –Must be advertised –A firm, fixed price contract is awarded to lowest responsible bidder and can be made principally on basis of price –May reject all bids for valid reason Continued on next slide Follow Purchasing Guidelines

Subpart D – Post Federal Award Requirements Sealed bids (formal advertising) > $150,000 § (c) –Watch for CONFLICT with state law effective 7/1/2014 OCGA for Counties & for municipalities Increased threshold before which road contracts must have bids From $20,000 to $200,000 Which is higher than Federal requirement. If federal funds are involved, Federal requirement overrules State requirement Watch for contracts between $150,000 & $200,000 with no bids Follow Purchasing Guidelines

Competitive proposals > $150,000 – § (d) –When conditions are not appropriate for the use of sealed bids –More than one source available –Usually used for fixed fee or cost reimbursement –Must be advertised –Need a written method of evaluation and selection –Go to an adequate number of vendors –Award must go to “most advantageous” proposal Follow Purchasing Guidelines Subpart D – Post Federal Award Requirements

Noncompetitive purchases – § (f) May be used when one or more of the following circumstances apply –Sole source –Emergency –Written request made AND approved by federal entity –Competition is determined to be inadequate Follow Purchasing Guidelines Subpart D – Post Federal Award Requirements

Other Training Federal Grants Compliance Update –March 8, 2016, Lawrenceville, GA –$179

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