North Carolina
Department of Agriculture & Consumer Services
New Uniform Guidance
2 CFR 200 and Indirect Costs
January 2015
Grants & Contracts Office
Training
Presented by Kathryn Caler, M.L.S., Grants Administrator
What is the new Uniform Guidance?
• The result of an effort lead by the Council On Financial Assistance
Reform (COFAR) to streamline and eliminate duplicative guidance on
federal grants.
• All Office of Management and Budget (OMB) guidance is now streamlined
in 2 CFR Part 200.
COFAR Priorities
•
•
•
•
Strengthen program oversight
Target risk and minimize burden on grantees
Standardize business processes and data
Well trained workforce
History
• There were two executive orders from the President.
• Reduce improper payments
• Reduce administrative burden
•
•
•
•
COFAR was established.
One year period for public comment.
Final uniform guidance date December 2013 for federal agencies.
Uniform guidance became effective for new grants and federal grantees December
2014.
2 CFR 200 - eCFR
Code of Federal Regulations
Seven major parts of the 2 CFR Part 200
•
•
•
•
•
•
•
Acronyms and definitions – Subpart A
General provisions – Subpart B
Pre-federal award requirements and contents of federal awards – Subpart C
Post federal award requirements – Subpart D
Cost principles – Subpart E
Audit Requirements– Subpart F
Appendices
Acronyms and definitions – Subpart A
•
•
•
•
Federal grant dictionary
32 pages of definitions
Helpful if unsure of meaning of terminology or acronyms
For example:
• What is the “Federal award date”
• What is a “Grant agreement”
• What is the “period of performance”
Acronyms and definitions – Subpart A
• Federal award date means the date when the Federal award is signed by the
authorized official of the Federal awarding agency.
• Grant agreement means a legal instrument of financial assistance between a
Federal awarding agency or pass-through entity and a non-Federal entity that,
consistent with 31 U.S.C. 6302, 6304
• Period of performance means the time during which the non-Federal entity may
incur new obligations to carry out the work authorized under the Federal
award.
Acronyms and definitions – Subpart A
• §200.94 Supplies.
• Supplies means all tangible personal property other than those described in
§200.33 Equipment. A computing device is a supply if the acquisition cost is
less than the lesser of the capitalization level established by the non-Federal
entity for financial statement purposes or $5,000, regardless of the length of
its useful life. See also §200.20 Computing devices and 200.33 Equipment.
• Use NCAS code for Equipment due to fixed asset inventory for computers.
Subpart B – General Provisions
• This section of 8 pages broadly discusses the purpose, applicability,
exceptions, authorities, supersession, effect on other issuances, agency
implementation, OMB responsibilities, inquiries, review date, effective date,
English language, conflict of interest and mandatory disclosures.
Subpart B – General Provisions
Subpart B – General Provisions
• §200.101 Applicability.
• (a) General applicability to Federal agencies. The requirements established in this
part apply to Federal agencies that make Federal awards to non-Federal
entities. These requirements are applicable to all costs related to Federal
awards.
• If you’re not sure if this applies to you, check with your grantor and ask.
• For food commodities, Subpart E - the cost principles do not apply.
Subpart B – General Provisions
• 200.104 Supersession
• Supersedes the following OMB guidance documents and regulations under Title 2 of the
CFR
• A-21 Cost principles for educational institutions
• A-87 Cost principles for state, local and Indian tribal governments
• A-89 Federal domestic assistance program information
• A-102 Grant awards and cooperative agreements with State and local governments
• A-110 Cost principles for non-profit organizations
• A-133 Audits of States, local governments and nonprofit organizations
• Those sections of A-50 related to auditors performed under Subpart F – Audit requirements
Subpart B – General Provisions
• 200.110 Effective /applicability date
• Awards or amendments implemented by federal agencies after December 26,
2014
• New funding as of January 1, 2015
• Increases with changes in terms and conditions after January 1, 2015
• Audit requirements for fiscal years beginning on or after December 26, 2014.
Subpart C – Pre-Federal Award Requirements
and Contents of Federal Awards
• Subpart C, 9 pages, explains what the federal agency is required to do when
posting an opportunity, performing merit reviews of applications, risk
reviews, what are the standard application requirements, specific conditions
which may be required when a grantee fails to comply with terms and
conditions of a grant, certifications required, pre-award costs, and what
information must be in any federal award such as the recipient name and
DUNS number, total award and approved match or cost share, etc.
200.204 & 205 Federal awarding agency review
merit of proposals and risk posed by applicants
• NEW Merit review of proposals for cooperative agreements or competitive grants
• A risk evaluation will be completed prior to any federal award
• May include evaluation of these factors:
• Financial stability
• Quality of management systems
• History of performance
• Reports and findings from audits
200.207 Specific conditions
• May include:
• Reimbursement payment rather than advance payment
• Withholding authority to proceed to next phase, until receipt of evidence of acceptable
performance
•
•
•
•
Requiring additional, more detailed financial reports
Requiring additional project monitoring
Requiring technical assistance training
Requiring additional prior approvals
Subpart D - Post federal award requirements
Standards for financial and program
management
• Thirty two page section with important information for agencies with passthrough grants or subawards
• Conformance may involve changes in business practices for both the agency
and divisions
• Emphasis on monitoring and accountability
Subpart D—POST FEDERAL AWARD
REQUIREMENTS
•
•
•
•
•
•
•
•
•
Standards for Financial and Program Management
Property Standards
Procurement Standards
Performance and Financial Monitoring and Reporting
Subrecipient Monitoring and Management
Record Retention and Access
Remedies for Noncompliance
Post Close Out Adjustments and Continuing Responsibilities
Collection of Amounts Due
Subpart D -200.302 Financial management
• Each State must expend and account for their federal award in accordance with state
laws and its accounting system must:
• Identify receipts and expenditures, including the CFDA title and #, FAIN and year, name of
federal agency and pass-through entity, if any
• Disclose accurate, current and complete disclosure of financial results
• Adequately maintain the source and application of funds and be supported by source
documentation
• Demonstrate adequate control over and accountability of all funds, property and other assets
including comparison of budget to expenditures and have written procedures to implement
requirements of payment, as well as allowability of costs.
Subpart D 200.308 Revision of budget and
program plans
• Recipients are required to report deviations from budget or project scope or
objective and request prior approval for
• Change in scope or objective
• Change in key personnel specified in application
• Disengagement from the project for more than 3 months, or a 25% reduction in time
devoted to the project, etc.
Subpart D 200.308 Revision of budget and
program plans
• Federal awarding agencies are authorized to initiate a one-time extension of
the period of performance by up to 12 months. For one-time extensions,
the recipient must notify the Federal awarding agency in writing with the
supporting reasons and revised period of performance at least 10 calendar
days before the end of the period of performance specified in the Federal
award.
Subpart D -200.328 Monitoring and reporting
program performance
• Strengthen program oversight
• The non-federal entity is responsible for oversight of the operations of the
federal award supported activities. The non-federal entity must monitor its
activities under federal awards to assure compliance with applicable federal
requirements and performance expectations are being achieved. Monitoring
by the non-federal entity must cover each program, function or activity.
Subpart D
Procurement Standards §200.317 -326
• Modeled after A-102: State must follow the same policies and procedures it
uses for procurements from its non-Federal funds; Others uses procurement
standards in sections 200.317 -326.
• COFAR FAQ .110-6 creates a grace period for implementation of the
Procurement Standards. For an institution’s FY16, it will have the option to
use Circular A-110 or the UG. An institution must document whether it is in
compliance with A-110 or UG, and meet documented standard. With FY17,
everyone must comply with UG.
NCDA&CS Monitoring efforts
• eCivis Grant Management - potential new system under review
• Use of WebGT system to grant applications and other documentation to
provide for centralized access and monitoring
• Development of grant expenditure reports which will compare budget to
actual expenditures over the life cycle of the grant for all federal grants
NCDA&CS Monitoring efforts
•
•
•
•
•
•
Federal grant expenditure report captures:
Life cycle budget
Life cycle expenditures
Required information, i.e. year of award, CFDA#, FAIN, grantor, etc.
Developed with OSC and available to any State agency
In accordance with §200.302
NCDA&CS Monitoring efforts
• Change in cost center and FRCC (placeholder for grant year) for each federal
grant to uniquely identify federal grants
•
•
•
•
Budgeting of indirect cost and expenditures of indirect cost in NCAS
Department’s NEW grant compliance auditor
Grant policy library and online training
Standardized grant processes and procedures
NCDA&CS changes implemented
• All of pass-through requirements have been incorporated into the new federal grant
contract for subawards
• Transition to new contract changes starts as of January 1st, 2015
• For all subawards with source of funds awarded prior to January 1st, 2015, the
standard policy of no indirect cost allowable will continue
• Subawards awarded after January 1, 2015 will be identified in database as to whether
they belong to new Uniform Guidance or prior guidance for auditing purposes.
.
Subpart D -200.331 Requirements for passthrough entities NEW Contract Changes
•
•
•
•
•
•
•
•
•
•
This grant is a subaward of a federal grant.
Federal Award Identification Number:
Federal Award Date (date signed by federal authorizing official):
Total Amount of Federal Award to NCDA&CS:
Name of Federal Awarding Agency:
CFDA Number and Program Name:
Indirect Cost Rate for Federal Award:
Agency Name, Awarding Official and Contact Info:
Subrecipient Name (must match DUNS name):
Subrecipient DUNS:
Subpart D -200.331 Requirements for passthrough entities NEW Contract Changes
• Subaward Period of Performance: Start Date
End Date
• Amount of Federal Funds Obligated by this Action:
• Total Amount of Federal Funds Obligated to Subrecipient: (will need to ask in application, prior years funding)
• Subaward Project Title:
• Award is R&D: Yes/No
• All Requirements: See scope of work, Attachment __and federal statutes, regulations and terms and conditions,
Attachment __.
• Additional Requirements: Required financial and performance reports (See Contract Section ____)
• Subrecipient Indirect Cost Rate (or 10% de minimis):
Subpart D -200.331 Requirements for passthrough entities NEW Contract Changes
• Access to Subrecipient’s Records and Financial Statements: See Contract General Terms and Conditions
• Terms and Conditions of Closeout of Subaward: See Code of Federal Regulations Title 2, Subtitle A,
Chapter II §200.343-5 Closeout, adjustments, continuing responsibilities and collection of amounts due
• Risk Evaluation Complete: Yes/No
• Specific Conditions, if any: (could be additional reporting, etc.)
• Subrecipient’s Cumulative Federal awards > $750,000: Yes/No
• Audit verified?
Subpart D -200.331 Requirements for passthrough entities NEW
• NEW risk assessment and monitoring for each subrecipient will be tracked in
the Grant Database and identified on the tracking form
• Each Division that distributes State or federal funds through subawards will
develop a risk assessment and monitoring plan per Department policy,
NCDA&CS Monitoring Grant Programs and federal requirement.
Divisions must develop a risk assessment and
monitoring plan for federal subawards
• Risk assessments may include the following factors:
• (1) The subrecipient's prior experience with the same or similar subawards;
• (2) The results of previous audits including whether or not the subrecipient receives a
Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent
to which the same or similar subaward has been audited as a major program;
• (3) Whether the subrecipient has new personnel or new or substantially changed
systems; and
• (4) The extent and results of Federal awarding agency monitoring (e.g., if the
subrecipient also receives Federal awards directly from a Federal awarding agency).
Divisions must develop a risk assessment and
monitoring plan for all federal subawards
• Monitoring must include:
•
•
•
•
Review of financial and programmatic reports
Follow up and ensuring that subrecipient takes timely action
Issuing a management decision for audit findings pertaining to federal award
Verification that every subrecipient is audited as required by subpart F when
subrecipient’s federal funding meets or exceeds $750,000 in expenditures
• Consider any adjustments due to audits, reviews or other monitoring
• Consider taking enforcement action against any noncompliance
Documentation of risk assessment and
monitoring
• Risk assessment starts with the application review and evaluation
• Monitoring begins with review of the returned contract, continues
throughout the life of the grant and ends with the final report
• Keep additional documentation, i.e. site visits, desk reviews, financial audits,
program audits, correspondence, etc. with the grant file.
YOU MUST DOCUMENT YOUR MONITORING EFFORTS!
Subpart D -200.333
Retention requirements for records
• Financial records, supporting documents, statistical records and all other
non-Federal entity records pertinent to a federal award must be retained for a
period of three years from the date of final expenditure report
Subpart D -200.335
Methods for collection, transmission and
storage of information
• In accordance with the May 2013 Executive Order of Making Open and
Machine Readable the New Default for Government information, the federal
awarding agency and the non-federal entity should, whenever practicable,
collect, transmit, and store federal award related information in open and
machine readable formats rather than in closed formats or on paper.
• NCDA&CS record retention schedule. The Grants and Contracts Office is
working with IT to update and revise the current schedule in conformance
with the 2013 Executive Order. For now, keep paper and electronic copies…
Indirect Costs
1) Agency grants
2) Grants to subrecipients
3) Cost allocation plan – request for waiver
Indirect Costs Agency Grants
• Indirect cost is kept by the Department for expenses related to
administrative and facilities overhead, like:
• HR expenses
• Payroll expenses
• Building and maintenance expenses
• Accounting, oversight and fiscal management expenses at the Department level
• NOT program expenses
Indirect Costs Agency Grants
Definition
• Indirect (F&A) costs means those costs incurred for a common or joint
purpose benefitting more than one cost objective and not readily assignable
to the cost objectives specifically benefitted, without effort disproportionate
to the results achieved.
Indirect Costs Agency Grants
• Cost allocation plan, annual negotiated rate
• Currently, 13% (or 28% for Forestry and Soil and Water) on personnel
expenses of all federal grants
or
• And for certain grants, limited to no more than 10% of the total grant. The
indirect cost rate is still applied to personnel expense, but limited to 10% of
total grant.
Get clear about Indirect Costs
• Federal grants SHOULD ALWAYS have budget for indirect cost, unless
there is no salary expense.
Get clear about Indirect Costs
• If you submit a grant application without Indirect Costs …
• Indirect Costs will be taken out of your grant anyway when federal funds are
received (if there is salary expense).
• This means you will have less program dollars than you planned for.
• So start now and plan ahead for indirect costs. Make sure your budget
includes indirect costs, as appropriate.
Indirect cost and subrecipients
• Federal guidelines have changed
• Non-federal entity (NCDA&CS) must allow indirect costs for subrecipients
• Approved cost allocation plan (must submit a copy of the plan to NCDA&CS) rate
Or
• At 10% de minimus rate (ten percent of the total subaward)
Or
• A negotiated rate between the subrecipient and NCDA&CS
Indirect cost and subrecipients
• Subrecipients may decline F & A reimbursement, but pass through entities
may not coerce them to accept a rate lower than that to which they are
entitled.
Indirect cost and subrecipients
• Notices of funding opportunities should include policies related to indirect
cost rate reimbursement, matching or cost share.
• Outreach activities should include discussion, as appropriate, of these
policies, especially prior to posting a notice of funding opportunity.
Indirect cost and subrecipients
• Program directors/managers will need to take into account less funds to
accomplish program objectives, since grantees will be allowed to use funds
for administrative costs, in addition to program costs in their overall budget.
• Relates to the objective to reduce administrative burden on
grantees/subrecipients.
Indirect Cost and Cost Allocation Plans
• NEW §200.414 Indirect (F&A) costs. (g) Any non-Federal entity that has
a federally negotiated indirect cost rate may apply for a one-time extension
of a current negotiated indirect cost rates for a period of up to four years.
This extension will be subject to the review and approval of the cognizant
agency for indirect costs. If an extension is granted the non-Federal entity
may not request a rate review until the extension period ends. At the end of
the 4-year extension, the non-Federal entity must re-apply to negotiate a rate.
Subpart E – Cost Principles
About 54 pages long
(Must = Requirement)
• Discusses allowability of costs
• Must be necessary and reasonable
• Must conform to any limitations or exclusions in these cost principles or
federal award
• Must be consistent
Subpart E – Cost Principles
• Discusses allowability of costs… (Must = Requirement)
• Must not be both direct and indirect
• Must conform to GAAP (Generally Accepted Accounting Principles)
• Cannot be used as match for another federal grant
• Must be adequately documented
Subpart F – Audit Requirements
• Twenty two pages long
• NEW Changes the audit threshold to $750,000 in federal funds expenditures
in FY
• NEW Changes major program threshold to $750,000
• New Single Audit requirements applicable to entities starting with fiscal year
beginning January 1, 2015 or later and ending December 31, 2015, or later
Subpart F – Audit Requirements
• The final guidance right-sizes the footprint of oversight and Single Audit
requirements to strengthen oversight and focus audits where there is greatest
risk of waste, fraud, and abuse of taxpayer dollars.
• It improves transparency and accountability by making single audit reports
available to the public online, and encourages Federal agencies to take a more
cooperative approach to audit resolution in order to more conclusively
resolve underlying weaknesses in internal controls.
Subpart F – Audit Requirements
Basic Structure of Single Audit Process Unchanged
•
•
•
•
•
•
•
•
•
•
Audit threshold (200.501).
•Subrecipient vs. Contractor (200.501(f) & 200.330).
•Biennial (200.504) & Program-specific (200.507) audits.
•Non-Federal entity selects auditor (200.509).
•Auditee prepares financial statements & SEFA(200.510).
•Audit follow-up & corrective action(200.511 & 200.521).
•9 month due date (set in law) (200.512(a)).
•Reporting to Federal Audit Clearinghouse (200.512).
•Major programs determined based on risk (200.518).
•Compliance Supplement overall format (Appendix XI).
Subpart F – Audit Requirements
Audit Threshold Change
• Increases audit threshold from $500,000 to $750,000.
• •Maintains oversight over 99.7% of the dollars currently subject Single Audit
and reduces audit burden for approximately 5,000 entities.
• •Increase of $250,000 is in line with previous threshold increase in 2003.
Subpart F – Audit Requirements
Single Audit Report Submission
• 200.512 Report Submission requires publication of Single Audit Reports
online with safeguards for protected personally identifiable information and
an exception for Indian tribes in order to reduce the administrative burden
on non-Federal entities associated with transmitting these reports to all
interested parties.
FAC Repository of Record for Reporting
Packages (200.36 & 200.512(b))
• Federal agencies, pass-through entities, and others obtain copies by accessing
Federal Audit Clearinghouse (FAC) website.
• Subrecipient only required to submit report to FAC and no longer required
to submit to pass-through entity.
• •Pass-through entity no longer required to retain copy of subrecipient report
as available on the Web.
Subpart F – Audit Requirements
Major Program Determination Type A/B Threshold
• Programs are grouped based on dollars. Type A programs are those above the
threshold.
• Type B are those below the threshold.
• •Type A/B threshold is a sliding scale with minimum. Minimum increases from
$300,000 to $750,000.
• Threshold presented in table to be more easily understood.
• •Audit threshold and Type A/B minimum threshold will be the same at $750,000.
Appendices I through XI
•
•
•
•
47 pages
Provides more details and specifics
Other required contract provisions
More information about Indirect Costs and Rate Determinations for IHEs,
nonprofits and State governments
Uniform Guidance
2 CFR 200 - eCFR
Code of Federal Regulations
In order to understand the rules, you
have to read them.
Remember use of “should” and
“must”
Should = best practices or
recommended approach
Must = required
Resources
•
•
•
Electronic Code of Federal Regulations (ECFR) http://www.ecfr.gov/cgi-bin/text-idx?node=2:1.1.2.2.1
•
Administrative Requirements Comparison Chart – 2 CFR Part 215, Circular A-102, and Final Uniform Guidance Subchapters A-E
http://www.whitehouse.gov/sites/default/files/omb/fedreg/2013/uniform_guidance_administrative_requirements_text_compar
ison.pdf
•
•
Grant Reform, the New Uniform Guidance Explained: Everything You Need to Know From Now On:
•
•
Webinar: http://www.screencast.com/t/5k2LZKgkm
Frequently Asked Questions https://cfo.gov/wp-content/uploads/2014/08/2014-08-29-Frequently-Asked-Questions.pdf
Implementation and Readiness Guide for the OMB Uniform Guidance, Prepared by the Council on Governmental Relations
(COGR) http://www.research.uky.edu/UG/COGR_Readiness_UG_Dec12_2014.pdf
The below webinar and accompanying PowerPoint provide an overview of the new guidance (aka “Supercircular”) that every federal grant
recipient must know as of December 26, 2014.
PowerPoint: http://grants.maryland.gov/Conference2014/OMB%20Uniform%20Guidance%20Training.pdf
Resources
• Additional Resources:
• The Maryland Governor’s Grants Office administers a website that offers federal grants information and training. Below
are webinars from that website your agency may find helpful.
• A Federal Grants Primer:
http://grants.maryland.gov/Webinars/FedGrantsPrimer/lib/playback.html
• The Grants.gov Process for Federal Grants:
http://grants.maryland.gov/Webinars/grants_gov/lib/playback.html
• Best Practices for Grants Management: http://grants.maryland.gov/Webinars/BESTPRACTICES/lib/playback.html
Resources
• Properly Prepare for a Grants Audit:
http://grants.maryland.gov/Webinars/PrepareForAudits/lib/playback.html
• Federal Funds Information for States Presentation:
http://grants.maryland.gov/Webinars/FFIS/lib/playback.html
• Additionally, the Congressional Research Service (CRS) published the below report which is an overview of the federal
grants administration process. CRS is a bipartisan agency that provides policy and legal analysis to committees and
Members of both the US House and Senate.
• Federal Grants-in-Aid Administration: A Primer:
http://fas.org/sgp/crs/misc/R42769.pdf
Q&A
Questions? Please email kathryn.caler@ncagr.gov or ask your federal grant contact.
This presentation will be available soon for distribution as a narrated PowerPoint for
State employees.