OMB Update
Mark Reger, Deputy Controller
Gilbert Tran, Policy Analyst
March 11, 2015
Topics
• Improper Payments
• Transparency – Data Act Implementation
• Uniform Guidance for Grants
2
Improper Payments - Brief History
•
November 2002 – Improper Payments Information Act (IPIA)
− Created basic framework for identifying and reporting improper payments
•
November 2009 – Executive Order 13520
− Improved agency accountability
− Increased transparency
•
July 2010 – Improper Payments Elimination and Recovery Act (IPERA)
− Put into law specific thresholds for identifying high-risk programs
− Strengthened corrective action plans
− Expanded payment recapture audits
− Established annual OIG compliance reviews
•
January 2013 – Improper Payments Elimination & Recovery Improvement Act
(IPERIA)
− Codified EO 13520 requirements
− Improved agency estimation and recovery of improper payments
− Reinforced and accelerated the Administration’s “Do Not Pay” efforts
3
A-123 Appendix C Update
•
•
Vision: transform improper payment compliance framework to create a more unified,
comprehensive, and less burdensome set of requirements for agencies and OIGs
•
IPERIA required OMB to issue new guidance—we approached it as an opportunity to
overhaul Appendix C of OMB Circular A-123
Process: as we drafted the
new Appendix C, we had
to consider the following:
– The three statutes
and the Executive
Order
– Previous Appendix C
version (M-11-16)
– Input from agencies,
OIGs, GAO, and
OMB
4
New Appendix C Highlights
•
The updated guidance reconciles IPERIA requirements that are identical to
requirements from EO 13520
•
Consolidates and streamlines reporting requirements for agencies and OIGs
– Agencies can incorporate most of their reporting into AFR or PAR
– OIGs for agencies with high-priority programs are no longer required to issue
separate reports under EO 13520 and IPERA—one report will suffice
•
Provides a more detailed categorization of improper payments
•
Adds an internal control framework for addressing improper payments
•
Provides guidance to agencies—as required by IPERIA—to strengthen the
statistical validity of estimates and include payments to Federal employees in
the definition of improper payments, among other things
5
New Improper Payment Categories
•
•
•
Previously only three
categories; not very useful
New guidance establishes
new categories for
reporting improper
payments
Provides more granularity
on estimates, leading to:
– More effective
corrective actions at the
program level
– More focused strategies
for reducing improper
payments at the
government-wide level
– Better communication
about the nature of
improper payments
Type of Improper Payment
Reason for Improper Payment
Overpayments
Underpayments
Program Design or Structural Issue
1
Inability to Authenticate Eligibility
2
Death Data
3
Financial Data
4
5
Failure to Verify: Excluded Party Data
Administrative
or Process
Error Made by:
Prisoner Data
6
Other Eligibility Data (explain)
7
Federal Agency
8
State or Local Agency
9
Other Party (e.g., participating
lender, health care provider, or
any other organization
administering Federal dollars)
10
Medical Necessity
11
Insufficient Documentation to Determine
12
Other Reason (explain)
13
A
B
6
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Corrective Actions
•
We are conducting an analysis to identify program-specific
corrective actions with the highest return-on-investment or potential
for substantially reducing improper payments
•
Questions we are interested in:
– Which current corrective actions are the most effective in reducing
improper payments in your programs?
– Could you list one or two things that your programs are not already
doing (but could realistically do) that would lead to a significant
decrease in improper payments?
– What, if any, are the barriers preventing your agency from taking these
actions, and what would it take to overcome those barriers?
– If you implemented these actions, by how much could the improper
payment rate go down for your programs?
– How has your agency advanced data analytics and improved
technology to prevent and reduce improper payments ?
8
DATA Act Implementation
Update
9
DATA Act Goals
• Expand the Federal Funding Accountability and Transparency Act of 2006 by
disclosing direct federal agency expenditures and linking federal contract, loan, and
grant spending information to programs of federal agencies to enable taxpayers and
policy makers to track federal spending more effectively.
• Provide consistent, reliable, and searchable government-wide spending data that is
displayed accurately for taxpayers and policy makers on the USASpending.gov
website.
• Analyze federal spending data to proactively prevent waste, fraud, abuse, and
improper payments.
• Simplify reporting for entities receiving federal funds by streamlining reporting
requirements and reducing compliance costs while improving transparency.
• Improve the quality of data submitted to USASpending.gov by holding federal
agencies accountable for the completeness and accuracy of the data submitted.
10
DATA Act in Context of Spending Life Cycle
Receipts/
Financing
Appropriation
Payment
Apportionment
Obligation
Allotment
(Allocation)
360 Spending Life Cycle
Award
DATA Act
Commitment
FFATA
(USAspending.gov)
11
11
Governance and Implementation Structure
Executive Steering Committee – OMB and Treasury
Inter-Agency Advisory Committee – OMB, Treasury, and
Representatives from: CFOC, BOAC, ACE, COFAR, CAOC, CIOC, PIC, OSTP, GSA, CIGIE
Lead
Design and
Implement
Support
Consult
OMB
Treasury
Data Definition Standards
(Data Transparency
PMO)
Treasury
Blueprint/roadmap
between data elements
Treasury
Data Exchange Standards
OMB
OMB
Pilot to Reduce Admin
Burden
Treasury
Data Analytics
Industry
Senior
Accountable
Officials from
each of the 24
CFO Act agencies
Non-Federal
stakeholders
Federal Lines of
Business
12
12
DATA Act Requirements
FFATA Sec. 3 “Full disclosure of federal funds”
13
DATA Act Implementation Approach
Data-centric
• Avoid massive system changes, rather focus on managing data
Incremental
• Release data as it becomes available
Reuse
• Maximize and leverage use of existing processes and
investments
Collaborative
• Feedback drives improvements
Iterative/Agile
• Conduct many small scale pilots
14
DATA Act Milestones
• Issue guidance to
DATA Act Requirements agencies on data
standards and conduct
pilot (May)
DATA Act
•
Establish pilot to
Enacted
standardize financial
(May)
reporting (May)
2014
• Agencies implement
June 2013 OMB memo
on data quality (Q1)
• USAspending
transitioned to Treasury
(Feb.)
2015
Launch
improved
USAspending
(March)
2016
First IG
report
(Nov.)
• Agencies report
information in
accordance with the
standards. Information
published on public
website (May)
• Report on results of
reporting pilot (August)
2017
OMB Guidance to
agencies to reduce
reporting burden
(August)
2018
USAspending short-term
improvements
15
15
Federal Spending Transparency at the
State Level
• States have been making great strides and
launching robust transparency initiatives
• How do you use this data to manage?
• How can we complement and support your work
on transparency with our efforts?
We welcome continued feedback and partnership.
Check out our GitHub page:
http://fedspendingtransparency.github.io/
16
♫ Are You Ready for This ?
The New Uniform Guidance
2 CFR 200
Guidance Reform History
Feb 2012:
Advance
Notice of
Proposed
Guidance
(public
comments)
Nov. 2009:
Executive
Order:
Reduce
Improper
Payments
Feb 2011:
Presidential
Memo:
Reduce
Administrative
Burden
† April 2013
Dec 2013:
Final
Uniform
Guidance
Feb 2013:
Notice of
Proposed
Guidance
(public
comments)
18
Guidance Reform History
June 2014:
Agencies Submit
Draft Rules to
OMB, Continued
Outreach on
Implementation
December
2013:
Uniform
Guidance
Published
January-April
2014: Training
Webcasts, Publish
2014 Single Audit
Compliance
Supplement
December 2014:
Final Guidance
Effective, Baseline
Metrics Collected,
Case Studies of
Best Practices
Published
Fall 2014: Metrics,
Additional FAQs and
Webcast
19
Eliminating Duplicative and Conflicting Guidance
Then:
Awards
Received
INSERT YOUR
STATE OR
AGENCY
HERE
• A-102 & A-89
• A-87
• A-133 &A-50
Subawards
to
universities
Subawards
to
nonprofits
• A-110
• A-21
• A-110
• A-122
Now: All OMB guidance streamlined in 2 CFR 200.
20
21
22
2 CFR 200 -Basic Layout
• 6 Subparts A through F
–
–
–
–
–
–
Subpart A, 200.XX – Acronyms & Definitions
Subpart B, 200.1XX – General
Subpart C, 200.2XX – Pre Award - Federal
Subpart D, 200.3XX – Post Award – Recipients
Subpart E, 200.4XX – Cost Principles
Subpart F, 200.5XX – Audit
• 11 Appendices - I through XI
23
Top Ten Impact Changes
• 200.1 through 99 Standard Definitions
• 200.205, Review of risk of applicants
– Must have framework for evaluating risks
– Should consider financial stability, performance
history, audit reports
• 200.314, Supplies (computing devices)
• 200.320, Procurement Standards
• 200.407, Prior Written Approval (22 items)
24
Top Ten Impact Changes
• 200.407, Prior Written Approval (22 items)
• 200.413, Direct Costs
• 200.414, Indirect Costs
– Must accept approved negotiated rates (some exceptions)
– 10% of MTDC de minimis IDC
– One time four-year extension of current approved rate (final and
pre-determined rates only)
• 200.430, Compensation – Personal Services
• 200.5XX, Single Audits
– Higher Threshold (200.501)
– Better Transparency (200.512)
– More Focus on Risk (200.518)
25
“Should” and “Must”
Shall is Out – Yes, Shout it Out
But Should is In
May will be back
So will April and June
Orange is the new Black
Must is the new Shall
26
Procurement “Claw” (Sections 200.317-326)
3.
Sealed
Bids
2.
Small
Purchases
1.
MicroPurchases
4.
Competitive
Proposals
5.
Sole
Source
General Standards:
A. Documented Policies
B. Necessary
C. Full & Open Competition
D. Conflict of Interest
E. Documentation
i. Cost & Price Analysis
ii. Vendor Selection
27
Procurement “Claw” (Section 200.320)
2.
Small
Purchases
1.
Micro
Purchases
3.
Sealed
Bids
• > $150K
• Construction -----projects
• Price is a major
---factor
• Up to $150K
• Rate quotations
• No cost or price
--analysis
• $3K
• No quotations
4.
Competitive
Proposals
• > $150K
• Fixed price or cost
---reimbursement
• RFP with
evaluation methods
5.
Sole
Source
• Unique
• Public emergency
• Authorized by agency
(or PTE)
• No competition
• Equitable distributions
28
29
Agency Implementation
• Adopted by 28 Federal awarding agencies on
December 19, 2014
• Agency implementation regulations available
in 2 CFR
• Effective for awards issued on or after
December 26, 2014
30
Interim Final Rule Comments
• Joint interim final rule comments were due
February 17, 2015
• OMB is in the process of reviewing comments
in coordination with Federal awarding
agencies
31
Metrics
• OMB Memorandum M-14-17 requests nonFederal stakeholder feedback on the overall
impact on burden and waste, fraud, and abuse
• The Council on Financial Assistance Reform
(COFAR) and OMB is currently accepting
feedback on the COFAR website
32
Resources
• The COFAR website is available at:
https://cfo.gov/cofar/
• Includes:
– FAQs
– Webcasts
– Crosswalk to agency exceptions and additions
33