New Uniform Guidance
2 CFR 200
“Super Circular”
MALPH
Governmental Accounting for Local
Public Health
September 12, 2014
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Presented By:
Deb Hallenbeck
MDCH Office of Audit
517-241-7598
hallenbeckd@michigan.gov
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Outline
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Process
Intent
Applicability
Effective Dates
Final Product/Layout
Changes / Items Worth Mentioning
2 CFR 200: Uniform Administrative Requirements,
Cost Principles and Audit Requirements for Federal
Awards
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AKA “Super Circular”
AKA “Omni Circular”
Not a Circular
Federal Regulation
Located at:
Federal Register: http://www.gpo.gov/fdsys/pkg/FR-2013-12-26/pdf/2013-30465.pdf
Electronic CFR: http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl
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Process
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Presidential Executive Order (2009) and Memorandum (2011)
Create a more streamlined and accountable structure to
coordinate financial assistance
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COFAR created (2011)
Improve delivery, mgt, coordination, accountability of Federal grants
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OMB issued Advance Notice on Potential Reforms
2/28/2012
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OMB issued Draft Proposal
2/1/2013
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OMB published New Uniform Guidance (Final)
12/26/2013 (Federal Agencies to submit implementing regs by 6/26/14)
Intent
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Consolidate 8 existing Circulars
- Administrative Requirements (A-102, A-110, A-89)
- Cost Principles (A-21, A-87, A-122)
- Audit Requirements (A-133, A-50)
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Eliminate duplicative and conflicting
provisions
Clarify where policies are uniform
Highlight differences that exist among entities
Modify some existing requirements
Applicability / Who Impacted
Federal Agencies
Non-Federal Entities (defined 200.69)
States, local governments, Indian tribes,
institutions of higher ed, and non-profits
Receive Federal Awards
Recipient or Subrecipient
Their Auditors
Limited Exceptions are at 200.101-.102
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Effective Dates (200.110)
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Grant Administration
12/26/2014
- New grants 1/1/2015 and after
- If both old and new awards, may change entity-wide policies (e.g. procurement
and payroll) to comply with new requirements – not penalized for doing so
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Single Audits
Fiscal Years BEGINNING on or after
12/26/2014
- Fiscal Year 1/1/15 – 12/31/15
- May not early implement
Final Product / Layout
(By Subpart)
A.
B.
C.
D.
E.
F.
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Acronyms and Definitions
General Provisions
Pre-Federal Award Requirements and
Contents of Federal Awards
Post Federal Award Requirements
Cost Principles
Audit Requirements
Final Product / Layout
(By Appendix)
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III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
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Notice of Funding Opportunity
Contract Provisions
Indirect – Higher Eds
Indirect – Non-Profits
State/Local Central Service Cost Allocation
Public Assistance Cost Allocation Plans
State/Local/Indian – Indirect Cost Proposals
Non Profits Exempt from Cost Principles
Hospital Cost Principles
Data Collection Form
Compliance Supplement
Changes / Items Worth Mentioning
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Financial Management System
[200.302(b)]
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Identification of all Federal awards
Current, accurate, complete financial results
Records that identify source and use of funds
Effective control over and accountability for assets
Comparison of expenditures to budgets
Written procedures on payments (200.305)
Written procedures for determining allowability
of costs (Subpart E)
New Section on Internal Controls
(200.303)
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Establish and maintain effective internal control over
the Federal award that provides reasonable
assurance that the non-Federal entity is managing
the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of
the Federal award. (References guidance by Comptroller
General and COSO)
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Evaluate and monitor compliance
Take prompt action when non-compliance identified
Safeguard protected personally identifiable info
Property
[200.311(real) & .313(equipment)]
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Title to property purchased with Federal
funds rests with non-Federal entity
Must be insured
Property Records (200.313(d)(1))
Physical inventory every 2 years
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Disposition – Request instructions
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1. Retain & compensate Federal Agency
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2. Sell & compensate Federal Agency
3. Transfer title to Federal Agency or
designated 3rd party
New Procurement Standards
(200.318-.326)
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Use documented procurement procedures
Maintain oversight
Written standards of conduct - No conflicts of
interest
Most economical purchase option
Maintain records on history of procurement
Must conduct in a manner providing full and
open competition
Methods (Next slide)
Procurement Methods
(200.320)
Must use one of the following methods:
1. Micro (aggregate < $3,000)
No soliciting competitive quotations
2. Small (< $150,000)
Price quotes required from “adequate”
number of qualified sources
3. Sealed bids/competitive proposals (> $150,000)
Cost/price analysis required
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(Noncompetitive Proposals permitted in certain circumstances)
Monitoring & Reporting Performance
(200.328)
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Must monitor activities to assure performance
expectations met
Must submit performance reports – intervals as
required by Feds or pass-through entity
“OMB-approved government-wide standard
information collections”…reports to contain:
Compare actual accomplishments to objectives
Reasons goals not met
Additional pertinent information (e.g. cost overruns)
Subrecipient vs. Contractor (old term – Vendor)
Subrecipient (Subaward)
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Carrying out a
program/portion of a
Federal award
Programmatic decision
making
(200.330 for determinations)
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Contractor (Contract)
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Providing goods or
services that are ancillary
to the operation of the
Federal program
Provides similar goods or
services to many different
purchasers
Subaward Identified as Such and
Include Required Information(200.331a)
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Subrecipient Name/DUNS number
Federal Award Identification Number (FAIN)
Award date/period of performance
Award amount
CFDA number/name
Federal awarding agency
Project description
General and Specific Terms and Conditions
Access to records
Approved Federally recognized indirect cost rate; or a negotiated
rate or a de minimis indirect cost rate of 10% of MTDC (200.414)
New Section on Subrecipient Monitoring
(200.331b)
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Evaluate subrecipient risk
Experience
Results of audits
New personnel
Results of Federal agency monitoring
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Consider imposing specific conditions on
subrecipients based on risk
Monitor subrecipient activities in response to
identified risks
Remedies for Noncompliance
(200.338)
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May impose additional conditions (200.207)
Withhold cash payments
Disallow costs not in compliance
Suspend/terminate award
Initiate suspension and debarment
proceedings
Withhold further Federal awards
Cost Principles – Subpart E
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Total Cost = Direct + Allocable Indirect – Applicable Credits
Basic Guidelines remain unchanged from OMB
Circular A-87 (200.403)
“Prior Approval” – can ask for prior approval for
special or unusual costs. Some items specifically
require prior approval. (200.407)
Selected Items of Cost – 50+ items included
Apply to both direct and indirect costs
If not mentioned, doesn’t mean it’s not allowed.
Apply general principles of allowability.
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Federal Award Provisions Govern/Rule
Direct Cost Allocation Principles
[200.405(d)]
If a cost benefits two or more projects or
activities in proportions that can be determined
without undue effort or cost, the cost should be
allocated to the projects based on the
proportional benefit.
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Indirect Cost Rate Proposals and
Cost Allocation Plans (200.414)
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Must accept negotiated rate if there is one
Develop and submit indirect cost rate proposal and
cost allocation plan as specified in:
Appendix V – State/Local Government and Indian TribeWide Central Service Cost Allocation Plans
Appendix VII – States and Local Government Indian Tribe
Indirect Cost Proposals
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Any non-Federal entity that has never received a
negotiated indirect cost rate (except for those w/
>$35 million in direct Federal) may elect to charge a
de minimis rate of 10% MTDC. [200.414(f)]
Time and Effort Reporting Documentation Standards [200.430(i)]
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Broad principles rather than specific examples –
“records that accurately reflect the work performed”
and internal control providing reasonable assurance
(accuracy, allowability, properly allocated)
Key principles remain: after-the-fact, full disclosure,
timely completion, budget estimates for interim and
adjust to actual
Substitute systems (random moment sampling, time
studies, case counts) require approval by the
cognizant agency for indirect cost. [200.430(i)(5)]
Conferences (200.432), Employee
Welfare (200.437), Relocations (200.464)
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Language strengthened to appropriately limit
allowable costs
Exercise discretion and judgment (conferences)
“In accordance with documented policies” and
dropped references to recreational activities and
other specific items (employee welfare)
Relocate existing employee and new hire – subject
to limitations
Depreciation
(200.436)
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Cost of fixed assets allocated to periods
benefitting from use
Use Allowance – no longer permitted
Intellectual Property
(200.448)
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Patent and copyright costs – allowed if
required by the Federal award
Royalties and other costs for use of
patents and copyrights – allowed if
necessary for performance of award, and no
license currently in existence, and not
purchased from a related party
Travel
(200.474)
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Documentation must justify that participation
of the individual is necessary to the Federal
award, and the costs are reasonable and
comply with the agency travel policy.
Temporary dependent care costs – if direct
result of travel, consistent with entity-wide
Travel Policy, and temporary during travel
Appendix V - State/Local Government and Indian
Tribe-Wide Central Service Cost Allocation Plans
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Assigns centralized County costs
(accounting, HR, purchasing, computers,
motor pool, administration) to benefitted
activities (Health Department).
Allocated or billed
Major local government (>$100 million direct)
submit plan annually to cognizant agency
All other locals – develop and maintain plan
for audit
Appendix VII – States and Local Government Indian
Tribe Indirect Cost Proposals
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Indirect costs – costs incurred for common purpose benefitting more
than one cost objective – can’t be readily assigned without effort
disproportionate to the results achieved.
Includes indirect of Health Department and County central services
distributed through the central service CAP.
Types of rates defined:
Final Rate – based on past actual costs / not subject to adjustment
Fixed Rate – based on estimate / difference from actual carried fwd
Predetermined Rate – based on estimate / not subject to adjustment
Provisional Rate – temporary pending establishment of “Final Rate”
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Methods explained (simplified, multiple allocation base, special)
Documentation and submission requirements
>$35 million direct – submit to cognizant agency for indirect
All others – retain for audit
Single Audits – Subpart F
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Make Single Audit Reports available on-line
Raises threshold from $500,000 to $750,000
(still covers 99% of funds currently covered and
eliminates the requirement for about 5,000 entities)
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Raises threshold for an auditor to report
questioned costs from $10,000 to $25,000
Major Program determination changes
Management decision issued within 6
months of acceptance of audit report by FAC
Online Resources
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www.cfo.gov/wp-content/uploads/2013/01/2-C.F.R.-200-FAQs-2-12-2014.pdf
www.cfo.gov/cofar
www.whitehouse.gov/omb/grants (select grant reform)
www.whitehouse.gov/omb/financial_default/
(OMB Office of Federal Financial Management)
Questions
Deb Hallenbeck
517-241-7598
hallenbeckd@michigan.gov
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