A-21, A-110, A-133
OMB
 The federal Office of Management and Budget (OMB)
has issued circulars that define the principles and
standards for sponsored projects funded by federal
agencies.
OMB circulars A-21, A-110, and A-133 provide
instructions for handling federal funds.
WHAT IS OMB A-21?
 This section outlines the principles and policies that must
be followed regarding the accounting principles,
arrangements, and exemptions for any training or work
produced under the contract as agreed upon by the Federal
Government.
 A-21 defines the cost principles applicable to grants and
contracts at educational institutions
 Cost Accounting Standards (CAS)
 Direct vs. Indirect (F&A) Costs
 Allowable vs. Unallowable Costs
 Effort Reporting
CAS
 Cost Accounting Standards
 Consistency in estimating, accumulating, and reporting
costs
 Consistency in allocating costs incurred for the same
purpose
 Accounting for unallowable costs
 Cost accounting period (fiscal year)
DIRECT COSTS
 Direct Costs are costs must be:
 Allowable, Allocable Reasonable, Consistent
 Direct Costs can be directly associated with a particular
sponsored project, an instructional activity, or any other
institutional activity.
 Examples of Direct Costs:
 Salaries, wages, and fringe benefits
 Supplies
 Services
 Travel
 Equipment
INDIRECT COSTS
 Indirect Costs are often referred to as facilities and
administrative costs (F&A) or overhead. HCC has
an approved indirect rate of 39%.
Allowable Costs
 Allowable Costs
 Must be reasonable
 Must be allocable
 Must be treated consistently
 Must conform to any limitation or exclusion
 “Prudent person” test
Allowable and Unallowable Costs
 Section J specifies which costs are allowable and
unallowable as both direct and indirect costs
 Examples of Allowable Costs
 Equipment, Professional Services,
Transportation
 Examples of Unallowable Costs
 Alcohol, Entertainment, Lobbying, Marketing
 Anything outside the scope of these costs is typically
not allowed unless it falls under one of the specifically
mentioned exceptions within the circular.
Time and Effort
 Time and Effort Reporting
 The purpose of an effort reporting system is to provide
a reasonable basis for distributing salary charges
among direct and indirect activities
 HCC uses an after-the-fact effort reporting system
WHAT IS OMB A-110
 A-110 sets forth standards for uniform administrative
requirements for grants and agreements among
federal agencies in the administration of grants to and
agreements with institutions of higher education.
Cost Sharing
 Cost Sharing must be more than a token amount (e.g.
more than 1% of project costs)
 Cost Sharing represents institutional commitment to
the project
 Mandatory Cost Sharing is required by the sponsor as
a condition of making the award
 Voluntary Cost Sharing is not required by the sponsor
but may become legally binding as a commitment
reflected in the proposed budget
 Committed (e.g. over salary cap)
 Uncommitted
Cost Sharing
 Acceptable Cost Sharing must be:
 Verifiable and documented in recipient records
 Not included as matching for any other federal
projects, nor paid from other federal awards
 Necessary and reasonable
 Allowable under applicable cost principles
 Appropriate to all OMB Circular A-110
provisions
Program Income
 Program Income applies to funds earned during a
project period
 Program Income includes
 Registration fees for a training or conference
award
 Products or materials purchased on an award
and sold after research has been conducted
 Sale of information produced or acquired under
the award
Program Income
 Program Income may be:
 Added to funds committed to the project
 Deducted from total project allowable costs
 Applied to non-federal share of project costs
 Recipient has no obligation to the Federal Government
for funds earned after the project period unless the
agency’s regulations or terms and conditions provide
otherwise
Program Income
 Program Income may be:
 Added to funds committed to the project
 Deducted from total project allowable costs
 Applied to non-federal share of project costs
 Recipient has no obligation to the Federal Government
for funds earned after the project period unless the
agency’s regulations or terms and conditions provide
otherwise
Property Control
 Management of property should:
• Conduct a physical inventory every two
years
•Safeguard against damage, loss, and theft
•Provide adequate maintenance
•Maintain insurance
•Sell competitively at highest return, when
authorized
Reports & Records
 A-110 sets forth procedures for monitoring and
reporting financial and program performance and the
required reporting forms, including requirements for
record retention
Retention of Records
 Financial records, supporting documents, statistical
records and all other records must be retained for
three years from the date of final report, except when:
 Litigation requires retention until matters have
been resolved
 Records are transferred to the agency, in which
case retention requirements end
 Other record retention requirements apply
The PI and Grants Accounting
 Award recipients are responsible for managing and
monitoring each project, program, function and
activity supported by the award
 Award recipients are responsible for ensuring that subrecipients have also met all audit requirements
Technical Reports
 Technical reports must be completed not more than
quarterly and not less than annually
 Reports must contain:
 Comparison of actual accomplishments with set
goals for the period
 If applicable, reasons that goals were not met
 Explanation for any cost over-runs or high unit
costs
Close Out the Grants
 Close-Out Requirements
 All reports submitted within 90 days
 All obligations liquidated within 90 days
 Prompt payment by awarding agency
 Recipient refund of unobligated cash advances
 Accounting for real and personal property
 Agency right to recover disallowances
SUMMARY OF OMB A-133
 A-133 sets forth standards for consistency in audits of
organizations spending federal awards.
 A-133 defines the requirements of an audit and
explains the responsibilities of the institution, the
agency and the auditor.
 A sample of Federal awards and their direct cost
transactions is selected and examined to determine if
expenditures and procedures were appropriate
 A-133 requires an annual external audit of all non-federal
entities expending $500,000 or more annually in Federal
funds
Websites
 A-21
 http://www.whitehouse.gov/omb/circulars_a021_2004
 A-110
 http://www.whitehouse.gov/omb/circulars_a110/
 A-133
 http://www.whitehouse.gov/omb/circulars/a133_compliance_supplem
ent_2010
 http://www.myflorida.com/audgen/pages/subjects/ea_other.htm
 The federal audit reports for the entire state of Florida are rolled up
into one report that fulfills the A-133 requirement. This report is copied
and sent to the feds as needed.
Questions?