1. (404) 874-0555 WWW.WPG-INC.COM

2. The Wesley Peachtree Group, CPAs Presented by Keith X. Terrell, CPA, Cr.FA, FCPA, CGMA

3. Introduction The Wesley Peachtree Group, CPAs: Largest minority-owned firm in the southeast Specialize in higher education Audit more HBCUs than any other CPA firm T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

4. Takeaways This presentation should help you: Improve Uniform Guidance (“UG”) audit readiness Interpret UG audit compliance requirements Understand testing performed for each compliance area. Understand Time and Effort reporting T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

5. Agenda 1.Explain UG compliance requirements 2.Discuss what to expect during the audit 3.Walk through time and effort reporting 4.Answer questions T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

6. Understanding Uniform Guidance Compliance Requirements (1 of 2) A - Activities Allowed or Unallowed B - Allowable Costs/Cost Principles C - Cash Management D - Reserved (was Davis-Bacon Act) E - Eligibility F - Equipment and Real Property Management G - Matching, Level of Effort, Earmarking T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

7. Understanding Uniform Guidance Compliance Requirements (2 of 2) H - Period of Performance I - Procurement and Suspension and Debarment J - Program Income K - Reserved (was Acquisition and Relocation – not addressed in this session) L - Reporting M - Sub-recipient Monitoring N - Special Tests and Provisions T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

8. A - Activities Allowed or Unallowed The requirements for activities allowed or unallowed are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. (We select a sample of expenses and verify compliance after reading the grant agreement.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

9. B - Allowable Costs/Cost Principles The three superseded cost principles (OMB Circular A ‑ 87, OMB Circular A-21 and OMB Circular A-122) were replaced with 2 CFR 200 Subpart E, Sections 400 through 475. Check Federal awarding agency regulations, and the terms and conditions of the award. (We select a sample of expenses and verify compliance after reading the grant agreement.) Indirect costs are derived from negotiated rate, extended rate (one-time extension up to four years) or 10% De Minimis rate. (not applicable to Title III) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

10. C - Cash Management Only draw down amounts needed to meet your immediate cash needs. (We trace drawdowns from G5 system to the bank to verify date of receipt.) Drawdowns should be supported by incurred expenses. (We test a sample of drawdowns and verify they were expended within three days and supported by GL transactions.) Interest earned in excess of $500 on advanced Federal funds should be returned to the Federal government. (Verify that advanced funds are not held for the purpose of interest earnings.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

11. D - RESERVED The Davis-Bacon Act was moved to Special Tests and Provision. T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

12. E - Eligibility Eligibility requirements are generally defined by program legislation, Federal awarding agency regulations, and the terms and conditions of the award. (Sample selection is made and eligibility criteria is tested for each.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

13. F - Equipment and Real Property Management Equipment means tangible personal property having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes or $5,000 (2 CFR section 200.33). Property records must be maintained. (We verify that all purchases are logged by amount, description, location and useful life.) Inventory must be taken once every two years. (We examine inventory sheets to ensure it is maintained.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

14. G – Matching, Level of Effort, Earmarking The requirements for matching, level of effort and earmarking are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. (After identifying testing attributes for each upon reading the grant, a sample is selected for testing.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

15. H - Period of Performance Spend money within the original funding period (We determine the date expense was incurred to ensure it’s within the performance period.); or Request a no-cost extension to allow additional time to spend the funds without any additional funding. (If expense was incurred outside of the performance period, we verify if a no-cost extension was obtained.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

16. I - Procurement and Suspension and Debarment (1 of 2) Procurement- Micro-purchases if for less than $3,000 ($2,000 for construction) Small Purchases < $150,000 Simplified Acquisition Threshold (SAT) Seal Bids Proposals Sole Source (We ensure that one of the above methods was used to procure goods and services. Documentation should clearly indicate which method was used.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

17. I - Procurement and Suspension and Debarment (2 of 2) Suspension and Debarment- Non-Federal entities are prohibited from contracting with or making sub-awards under covered transactions (non-procured contracts for goods and services expected to equal or exceed $25,000) to parties that are suspended or debarred. This verification may be accomplished by checking the Excluded Parties List System (EPLS) maintained by GSA and available at: www.sam.gov/portal/public/SAM/ (We examine processes to determine if they are sufficient. We may test a few as a follow-up.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

18. J – Program Income Program income may be used in any of the following three methods: Deduction - Program income is deducted from total allowable costs in order to determine the net allowable costs, rather than to increase the funds committed to the project. Addition - With prior approval, program income may be added to the Federal award by the Federal agency and the non-Federal entity. Cost Sharing or Matching - With prior approval, program income may be used to meet the cost sharing or matching requirement of the Federal award. (We test to ensure that one of the three methods was used.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

19. L - Reporting Non-Federal entities are required to submit financial, performance and special reports, when applicable, during the grant period. (We test for reasonable accuracy and timely filing. Evidence needed to support timely filing.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

20. M – Sub-recipient Monitoring Sub-recipient monitoring has increased its oversight under the new guidance. Evaluate risk factors of the entity Impose specific sub-award conditions Monitor activities Ensure Uniform Guidance audits are being performed Consider adjustments based on audit results, on-site reviews or other monitoring Consider enforcement actions against non-compliant sub- recipients (We examine processes to determine if they are sufficient. We do not monitor compliance directly with the sub-recipient, but ensure it is done by you consistently.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

21. N – Special Test and Provision The requirements for special test and provision are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. (After identifying testing attributes for each upon reading the grant, a sample is selected for testing.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

22. TIME AND EFFORT REPORTING (1 of 3) Covered under 2 CFR 200.430. Emphasis placed on strong internal controls. (Provide a copy for review.) Reporting form must capture 100% of employee’s work activity. (Sample will be selected for testing.) Salary allocation cannot be based on budget amounts but rather based on record of work actually performed. (After- the-fact review required. Salary allocations will be examined.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

23. TIME AND EFFORT REPORTING (2 of 3) Non-exempt employees must list activity by day. Should encompass both federally assisted and all other activities compensated by the Institution. Must comply with the established policies and procedures of the Institution. (Consistently applied for everyone.) T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

24. TIME AND EFFORT REPORTING (3 of 3) Extra Service Pay (ESP) for faculty during the academic year. Institutional Base Salary (IBS) policy must be clearly defined by the Institution to determine when work beyond that point has occurred. Duties beyond IBS must be clearly delineated in the appointment letter. ESP policy must apply to all faculty members and not just those working on Federal awards. ESP must be approved by Federal awarding agency and should be arranged at times that do not interfere with regular duties. T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

25. Conclusion Any Questions? T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation

26. (404) 874-0555 WPG-INC.COM T HE W ESLEY P EACHTREE G ROUP, CPAs Helping to Build Stronger Institutions for the Next Generation