1. Uniform Guidance & Best Management Practices on Spending Grant Funds IFAS Infrastructure REC Retreat April 8, 2015

2. Introductions Stephanie Gray Director, Division of Sponsored Programs 352/273-4062 slgray@ufl.edu Tiffany Schmidt Interim Assistant Vice President, Contracts & Grants 352/273-3101 tcasi@ufl.edu

3. Background Effective December 26, 2014 2 CFR 200, UG, Omni-Circular Replaces – A-21 Cost Principles (section E) – A-110 Uniform Administrative Requirements (section C&D) – A-133 Audits (section F) Rules to the Agencies that then implement through their own policy statements…

4. Major topic areas Internal Controls Budgeting Cost Principles Compensation –personal services (Effort Reporting) Cost Sharing Subrecipient Monitoring Prior Approvals Reporting & Closeout Fixed Amount Awards Procurement

5. Internal Controls New emphasis on “internal controls” - Less emphasis on prescriptive processes Internal Control Integrated Framework “A process consisting of ongoing tasks and activities—a means to an end, not an end in itself…effected by people—not merely about policy and procedure manuals, systems, and forms, but about people and the actions they take at every level of an organization to affect internal control” Goals: Effectiveness and efficiency of operations Reliability of reporting for internal and external use Compliance with applicable laws and regulations

6. Internal Controls 1.Control Environment 1.integrity and ethical values of the organization 2.process for attracting, developing, and retaining competent individuals 3.rigor around performance measures, incentives, and rewards 2.Risk Assessment 3.Control Activities 1.policies and procedures 2.performed at all levels of the entity…such as authorizations and approvals, verifications, reconciliations, and business performance reviews 3.segregation of duties 4.Information and Communication 1.obtains or generates and uses relevant and quality information 2.the continual, iterative process of providing, sharing, and obtaining information 3.information is disseminated throughout the organization, flowing up, down, and across. “It enables personnel to receive a clear message from senior management that control responsibilities must be taken seriously.” 5.Monitoring Activities

7. Budgeting 200.302(b)(5) Financial Management “Comparison of expenditures with budget amounts.” UF will now enter the budgets into PeopleSoft with a categorical budget exactly as awarded by the Sponsor.

8. Cost Principles Generally the same “Identification with the Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect”. The function a person is performing or the USE of an item determines whether that charge should be a direct charge or normally indirect.

9. Cost Principles Clerical & Administrative personnel costs 200.413(c) Still normally indirect. To be direct charged, they must be: integral, specifically identified, explicitly budgeted or prior approved, and not recovered as F&A. The major project requirement is removed. CAS forms have been updated. Computers 200.453(c) “charging as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award.” Allocability is the issue so requires CAS approval UF will use the budget justification heavily in review. Conferences 200.432 “a meeting, retreat, seminar, symposium, workshop or event whose primary purpose is the dissemination of technical information beyond the non-Federal entity and is necessary and reasonable for successful performance under the Federal award.” Costs associated with intra-campus meetings are unallowable.

10. Cost Principles Publication charges 200.461 May charge if incurred after period of performance but before closeout Participant Support 200.456 “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.” Clear that they are NOT UF employees All participant support costs are now excluded from the indirect cost (F&A) base for all sponsors (not just NSF) If not budgeted, requires prior approval Will require a separate UF project

11. Effort Reporting Substantially NO CHANGES. See UF Effort Procedures and Directives.UF Effort Procedures and Directives 1.System that supports the distribution of the employee's salary among specific activities 2.Includes processes to review after-the-fact charges made to a Federal awards 3.Is incorporated into our official records 4.Reasonably reflects 100% of ALL compensation No one wants to go first to figure out what system will meet audit standards. Expect slower changes in the process over the longer term.

12. Effort Reporting (h)(i) “[D]eveloping and maintaining protocols (human, animals, etc.), managing substances/ chemicals, managing and securing project-specific data, coordinating research subjects…” are allowable activities to be paid directly from the grant. If are paid on CAS exempt codes, must route CAS request. Clearly indicate that they are performing these duties, allowable under 200.430. If they are in non-CAS payroll codes, you can directly charge them to the project. (h)(iv) Extra Service Pay – paying for “consultants” within UF is allowable only if: (ii) consistent written definition of work covered by IBS which is specific enough to determine conclusively when work beyond that level has occurred (iii) paid at IBS rate (v) total salaries charged including extra service pay are subject to certification (vii) (B) “Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term;” Any fluctuations in effort longer than 1-2 months must have the pay distribution adjusted.

13. Cost Sharing Voluntary committed cost sharing only includes items: – “specifically pledged on a voluntary basis in the proposal budget or the Federal award” – It does not include references to narratives, current & pending or other sections of the proposal – Is not expected and cannot be used as factor during merit review of proposal Unrecovered indirect costs can only be included as cost sharing with prior agency approval. Some level of committed faculty effort is still expected to be included in the F&A base (Memo 01-06). The 1% minimum requirement for faculty on all sponsored projects is still in place.

14. Subrecipient Monitoring 200.331 (b) UF must determine risk in working with each subrecipients – If there is risk we are required to implement tools to mitigate this risk for the government. – To assess risk, UF implemented a form to request data from any subrecipient without a single audit. No subaward will be issued without it. In budgeting on federal subawards, UF must honor subrecipient’s F&A rate or provide them 10% MTDC. – UF will NOT be making any changes when we are subrecipients of funds from the federal government to Florida state agencies. Fixed amount subawards (200.332) require prior written approval. – Some agencies in their implementations have started to waive prior approval only if budgeted and awarded. – Amount must be under simplified acquisition threshold (currently $150,000) FAQ: “acceptable to have more than one fixed amount subaward with the same subrecipient …each… distinct statement of work and be priced for the work and deliverables… prior approval …is required for each.”

15. Prior Approvals Prior approval is required for: – change in scope – change in key personnel (disengagement for more than 3 mos or 25% reduction in effort) – transfer of funds budgeted for participant support costs – any subaward not included in original budget – fixed amount subaward – change in cost sharing – use of unrecovered F&A to meet cost sharing – charging salaries of clerical & administrative personnel – inclusion of cost items that require prior approval (200.407) Prior approvals that are automatically WAIVED for competitive R&D awards are: – 90 day prespending authority – First time no cost extension – Carryforward of unexpended funds Agency may restrict rebudgeting when it exceeds 10%. Have to look at each sponsor’s rules as they implement their policy statements.

16. Reporting & Closeout 90 days

17. Fixed Amount Awards Pricing and negotiation uses cost principles as a guide. – The review of costs is up front. – Once price is agreed upon, there is no review of costs incurred. – To support pricing, UF will require categorical budget and personnel detail (SF424) – CAS will not be enforced and rebudgeting will be at level 3 Significant changes (such as in PI or scope) require prior approval. UF will enter commitments and hold to the 25% tolerance. Payment made on meeting specific requirements of the award. Accountability based on performance. At close of project, must certify the activity was completed or the level of effort was expended. Does not apply to clinical trials or per sample rates New

18. Procurement – Delayed to 7/1/2016 TitleChanges or items of interest 200.318: General procurement standards (b) Maintain oversight of contractors (c) Written standards of conflict of interest & organizational conflict of interest (d) Limit acquisition of unnecessary or duplicative items (e) enter into inter-entity agreements where appropriate for procurement or use of common or shared goods & services (f) encourage use of federal surplus (i) “records will include…rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." (j)(2) For time & materials, “assert a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.” 200.320: Methods of procurement to be followed Outlines 5 prescriptive procedures: (a)Micro-purchase (new, <$3000, without solicit competitive quotations as long as we believe reasonable) (b)small purchase ($3-150K) “price or rate quotations must be secured from an adequate number of qualified sources” (c)sealed bids (for construction) (d)competitive proposals (e)noncompetitive proposals (sole source but research impact not currently one justification) 200.323 Contract cost and price (b)Cost price analysis & negotiate profit as separate element of price.

19. Questions? http://research.ufl.edu/faculty-and- staff/initiatives/uniform-guidance-implementation.html http://generalcounsel.ufl.edu/regulations-and-policies/ Stephanie GrayTiffany Schmidt 352/273-4062352/273-3101 slgray@ufl.edutcasi@ufl.edu