1. OMB’s “Super Circular”: What Community Development Professionals Need to Know National Community Development Association Presented by Bob Lloyd January 21, 2016 1

2. The Current Federal Fund Accountability Atmosphere “Government by Horror Story” --- Budgetary Pressures (Sequester) --- Single Audits—Quality Concerns --- Federal Audits (OIG’s, CPA’s Under Contract) --- Qui Tam Lawsuits --- Congressional Oversight OMB Grants Management Reform 2

3. The OMB Grant Reform Process “Trial Balloons” 2/28/12 Draft Guidance 2/1/13 Final Guidance 12/26/13 (2 CFR 200) Agency Draft Rules to OMB 6/26/14 COFAR FAQ’s (Periodically in 2014) Revised Guidance and Agency Implementation (12/19/14) (HUD 2 CFR 2400) Effective Date of Uniform Guidance (12/26/14) Single Audit Requirements Transition (NFE FY’s Beginning After 12/26/14 3

4. Transition to New Policies Applicable to New Awards and New Obligations Issued After 12/26/14 Variations Among Federal Agencies for Awards Issued Prior to 12/26/14 Supersession of Previous Grants Management Regulations 12/26/14 Subaward Considerations Audit Considerations When in Doubt…. 4

5. Your Document Stack 2 CFR 200 and 2 CFR 2400 (1/1/15) (www.access.gpo.gov) or (www.ecfr.gov)www.access.gpo.govwww.ecfr.gov Frequently Asked Questions (www.cofar.gov)www.cofar.gov Federal Awardee Performance and Integrity Information System (Federal Register, 7/22/15) (www.access.gpo.gov) and (www.ecfr.gov)www.access.gpo.govwww.ecfr.gov 5

6. The “Big Deals”– Significant Policy Changes Pre-award Risk Assessment Internal Controls --- Documentation of Personnel Expenses (PKA Time and Effort Reporting) Cost Principles --- Indirect Cost Recognition Procurement of Goods and Services Subrecipient Management and Monitoring Reporting Audit 6

7. Pre-award Risk Assessment By Federal Agencies (2 CFR 200.205) --- Financial stability --- Management systems and personnel --- Performance history --- Audit history --- Federal data bases (e.g., EPLS) By Pass-through Entities (2 CFR 200.331(b)) --- All that…plus extent of other oversight 7

8. Internal Controls “Establish and maintain effective internal control that provides reasonable assurance” of compliance with laws, regulations and award terms Sources of internal control guidance --- GAO “Green Book”—Standards for Internal Control in the Federal Government --- COSO—Internal Control—Integrated Framework AND --- OMB—Part 6, Compliance Supplement for Single Audits 8

9. Internal Control Specifics Compliance Self monitoring and evaluation Corrective action Protection of personally identifiable information Bonding System standards Documentation of personnel expenses 9

10. Documentation of Personnel Expenses “Time and effort reporting” Key features --- After the fact determination --- Full disclosure of all effort Internal control design features --- Timely completion --- Credible signatures Substitute systems permitted 10

11. Cost Principles 2 CFR 200, Subpart E (200.400-475) Basic policies General tests of allowability (200.403) Indirect cost recovery basics and “cross-walks” to the Appendices “Selected” items of cost ‘Failure to mention…” 11

12. Indirect Cost Recognition By federal agencies (2 CFR 200.414(c)) --- Limited exceptions By pass-through entities (2 CFR 200.331(a)(4)) --- Accept federally negotiated NICRA --- Negotiate a rate with subrecipient ----- How widespread? --- Allow de minimis rate (10% of MTDC) 12

13. Key Changes—Selected Items of Cost Effort reporting Conferences Depreciation Equipment vs. materials and supplies Proposal costs Rental costs Training and education Travel 13

14. Subaward vs. Contract Distinction reaffirmed (2 CFR 200.330) --- The term “vendor” is gone --- Guidance from Circular A-133, __.210 has migrated to 2 CFR 200.330 --- Key concept: assistance vs. procurement --- Case-by-case determination must be made by pass-through entity 14

15. Procurement of Goods and Services Policies for States Policies for Everyone Else --- Possible 2 Year Grace Period for IHE’s and NPO’s Required Features --- Standards of Conduct --- Acquisition Planning --- Recipient Responsibility --- Competition --- Solicitation --- Acceptable Methods --- Cost or Price Analysis --- Source Evaluation and Selection --- Contract Award and Clauses (2 CFR 200 Appendix II) --- Contract Administration --- Procurement Records 15

16. Subrecipient Management and Monitoring Case-by-Case Determination (2 CFR 200.330) Risk Assessment (2 CFR 200. 331(b)) Subaward Agreement (Data Elements and Features—2 CFR 200.331(a) Subrecipient Monitoring (2 C FR 200.331(d) --- Mandatory Steps --- Discretionary Steps 16

17. Reporting Mandatory disclosures (2 CFR 200.112-113) Financial reporting (2 CFR 200.327) FFATA subaward reporting (2 CFR 170) Performance reporting (2 CFR 200.328) --- Extraordinary events Close-out reporting (2 CFR 200.343) Reporting on real property (2 CFR 200.329) Audit reporting package (2 CFR 200.512) 17

18. Audit Say a long good-bye to OMB Circular A-133 Say hello to Subpart F of 2 CFR 200 Key changes --- Dollar expenditure trigger --- Audit procurement --- Determination of major programs --- Reporting of audit findings ----- Attributes ----- Nomenclature --- Criteria for low-risk auditee 18

19. Getting with the Program Train up employees Review and revise, as necessary, policies and procedures --- Financial management --- Procurement --- Property management --- Subaward management --- Records retention and access --- Reporting --- Human resources Recognize that regulatory changes create audit vulnerabilities Be prepared for funding agencies and auditors who don’t yet know the new rules Use the “lingo” in the new rules in your policies and conversations 19

20. Presenter Contact Information Bob Lloyd Consultant on Public Management and Government Relations Telephones: (864) 235-8680 (202) 775-0066 Fax: (864) 235-1465 E-mail: consultlloyd@aol.comconsultlloyd@aol.com On the web: www.federalfundmanagement.com 20