1. EDGAR 201 Steven A. Spillan, Esq. sspillan@bruman.com
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2. Agenda Administrative Rules Allowable Costs Audit Requirements
Equipment/inventory management
Procurement
Allowable Costs
Audit Requirements
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3. Equipment/Inventory Management
Supplies
Disposition of “unused” supplies
Useful life of computing devices?
Equipment and other capital expenditures
Prior approval needed.
Materials and supplies costs, including computing devices
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4. Procurement States – follow their own rules! 200.317
Plus compliance with procurement of recovered materials,
Plus compliance with standard contract provisions,
Everyone else – follow through
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5. OMB Memo: M-18-18
Allows grantees to use increased procurement thresholds, aligned with National Defense Authorization Act, pending official changes to the Federal Acquisition Regulations and UGG:
Micro-purchase threshold: $10,000
Simplified acquisition threshold: $250,000
Effective June 20, 2018
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6. Methods of Procurement. 200.320
Micro-purchases ($0 – $10,000)
Small purchase procedures ($10, – $250,000)
Competitive sealed bids (> $250,000)
Competitive proposals (> $250,000)
Noncompetitive proposals
**Keep in mind, procurement procedures must reflect applicable state and local rules, including rules that have lower thresholds! 2 CFR (a)
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7. Micro-purchases of equipment?
Supplies
Computing Devices
FAR definition:
‘Supplies’ means all property except land or interest in land. It includes (but is not limited to) public works, buildings, and facilities; ships, floating equipment, and vessels of every character, type, and description, together with parts and accessories; aircraft and aircraft parts, accessories, and equipment; machine tools; and the alteration or installation of any of the foregoing.
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8. Applying procurement thresholds
Do the requirements for competition in the methods of procurement apply to each individual item I purchase, or may I apply them to broader procurement decisions in order to leverage strategic sourcing agreements, shared services arrangements, or other practices that result in more efficient use of the funds?
Yes, the requirements for competition apply to broader procurement decisions. Section General Procurement Standards paragraphs (d) and (e) explicitly encourage non-Federal entities to build into their procurement policies practices that consolidate procurements where appropriate to make most efficient use of Federal funds.
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9. Applying procurement thresholds, FAQs
What if individual schools have budget authority and can make purchases, is the threshold applied to each school or across the district?
What if the purchase order includes some items that will be paid with nonfederal funds, are those excluded from determining the threshold?
What if the original purchase did not exceed a threshold, but mid-year the grantee wants to expand the contract /purchase additional goods or services with the same vendor, what procurement method is used then?
What if the purchased services are from another local agency (e.g., regional service center, county office, intermediate district, etc.), do procurement procedures apply?
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10. Procurement – Profit negotiations
Contract cost and price
Profit levels must be negotiated separately for all purchases exceeding $250k and for all noncompetitive contracts!
Profit negotiations for sole source contracts under $250k?
OMB: No, only for purchases above simplified acquisition threshold.
ED: Yes, requirement applies to procurement of contracts in excess of threshold “or where there was no price competition.”
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11. Cost principles
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13. Allowable Costs: Direct and Indirect
Direct costs
(c) Direct charging admin and clerical staff
Indirect
Don’t forget, restricted indirect rates apply to most education grants. EDGAR
Adjustments of ICRs containing unallowable costs
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14. Allowable Costs – Basic factors
Basic factors of allowability
Reasonable costs (includes necessary)
Allocable costs
Single project, allowable under multiple funding sources:
“Any reasonable documented basis.”
OMB Circular Guidance, C-10: “Business decision” on allocation.
EDGAR
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15. Allowable Costs – Basic factors (cont.)
Policy guide
Prior written approval
Limitation on allowance of costs (e.g., admin caps)
Cost allocation plans
Interagency service
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16. Selected Items of Cost 55 Selected Items of Cost Allowable
E.g., collection of improper payments ( ); training and education costs ( )
Allowable with special conditions
E.g., only as an indirect charge (leave payout, ; advisory councils, ); only with necessary documentation (compensation – personal services, )
Allowable with prior approval
E.g., equipment and capital expenditures ( ); entertainment ( ); participant support costs ( )
Unallowable
E.g., alcohol ( ); bad debts ( )
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17. Selected Items of Cost (cont.)
Audit services
Conferences
Compensation, fringe benefits
Participant support costs
Proposal costs
ED: not “general management”
Travel costs
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18. Compensation – Personal Services 200.430
(i) Standards for Documentation of Personnel Expenses
Supported by system of internal controls
Incorporated into official records
Reasonably reflect total activity
Encompass both federally assisted and all other activities on an integrated basis
Comply with established accounting policies
Support distribution among specific activities or cost objectives
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19. Compensation – Personal Services 200.430
(i) Standards for Documentation of Personnel Expenses (cont.)
Budget estimates alone do not qualify as support, but may be used for interim accounting purposes, provided that:
Establishes reasonable estimates of actual work
Significant changes are identified and entered into the records timely
Internal controls include after-the-fact review of interim charges based on budget; adjustments made to ensure final amount charged is accurate, allowable and properly allocated
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20. Compensation – Personal Services 200.430
(i) Standards for Documentation of Personnel Expenses (cont.)
May distribute effort using percentages
Still need payroll records
If meet the standards, no supporting docs needed
If don’t meet standards, need “personnel activity reports”
Options for substitute systems and other alternative proposals, with required approvals
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21. Compensation – Personal Services 200.430 FAQs
Must de minimis, unrelated activity be reflected in T&E documentation? No
Do you have examples of more flexible systems? AEFFA Flexibility Request
Available at to-Dept-of-Education-June-2016-Final.pdf
What should we do if an employee is not working according to budget?
Two options: (1) Program Fix (change the employee’s workload); or (2) Fiscal Fix (change the employee’s budgeted salary).
Note: It is important to include both program and fiscal staff in the decision!
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22. Is this allowable?

23. 1. Advertisement/Public Relations
Can I use 21st CCLC funds to pay for canvas bags for students with the school logo on them?
Yes No
It Depends
Assuming it is for allowable purposes… yes
General advertising is not allowable.
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24. 2. Travel
If traveling using Federal funds, the federal government rates apply, even if the grantee has its own written travel policy.
True
False
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25. 3. Policies and Procedures
May a district use 21st CCLC funds only to develop Time and Effort policy and procedures that will be followed by all federal programs?
Yes No
It Depends
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26. 4. Field Trip
Can I use 21st CCLC funds to take students to a cow farm in Mexico to study agriculture?
Yes No
It Depends
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27. 5. Tutoring
Can a school use 21st CCLC funds to provide after school tutoring for all students?
Yes No
It Depends
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28. 6. Teacher Appreciation
Can a school use 21st CCLC funds to take its teachers on a boat cruise as a team building event to thank them for all their hard work?
Yes No
It Depends
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29. 7. Superintendent Salary
Can a district direct charge a portion of the superintendent’s salary to 21st CCLC for auxiliary time spent as 21st CCLC Director?
Yes No
It Depends
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30. Audit requirements
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31. Pass-through Oversight 200.331
Identify subaward information
Evaluate subrecipient risk of noncompliance
Consider specific conditions to mitigate risk
Monitor activities (financial and performance monitoring)
Includes review of single audits; issuance of management decision
Verify single audits are completed
Consider whether audits/monitoring requires additional action
Enforcement action against noncompliant subrecipients
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32. Audit Requirements – Other highlights
Audit required if expend $750k or more in aggregate (a)
Auditee responsibilities
Corrective action plan (c)
Cooperative audit resolution (c);
Audit findings reported
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33. Brustein & Manasevit, PLLC © 2018. All rights reserved.

34. Legal Disclaimer
This presentation is intended solely to provide general information and does not constitute legal advice or a legal service.  This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct.  Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC.  You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances.
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