Impact of the
Uniform
Guidance on
Institutional
Policies and
Procedures
Leading Excellence in Research
Costing Practices
Conference October 13 - 15, 2015
Session Highlights
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Insights on internal controls - a key component of the
Uniform Guidance (UG)
Internal Controls – What Are They Really?
Background & the Committee of Sponsoring
Organizations (COSO) – the Treadway Commission
 Examples of Procedures/Internal Controls in Key
Areas (e.g., Direct Charging, Personal Compensation
- Effort Certification, Subrecipient Monitoring and so
forth)
Key policies and procedures impacted by the emphasis
of internal controls in the Uniform Guidance
 Assess the strength of current institutional internal
controls and conclude where enhancements are
necessary
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Background – Why All
the Buzz?
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The Uniform Guidance increased emphasis on Internal
Controls:
2 CFR Part 200 – 200.303(a) non-Federal entities MUST:
 Establish/maintain effective internal control over Federal
awards
 These controls should be in compliance with the federal
“Standards for Internal Control” from the Committee of
Sponsoring Organizations (COSO)
 Numerous times that ‘internal controls’ are referenced in
the Uniform Guidance
Therefore, perhaps a best practice is to incorporate internal
controls into University Policies and/or Procedures
 Must be Specific and verifiable --- Not just “Lip Service”
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The Uniform Guidance
and Internal Controls
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The COSO Standards
 Background
 In 1992 COSO changed the way that auditors look at
internal controls based upon several significant audit
failures that occurred in the 1980’s,
 Internal control is broadly defined as a process effected
by an entity’s management and other personnel,
designed to provide reasonable assurance regarding
effectiveness and efficiency of operations, reliability of
financial representation and compliance with laws and
regulations, overall safeguarding of assets
 Internal controls not only applies to institutions with higher
education, but state, federal and corporate sectors as
well,
 It is predicted that substantial audits will be performed for
internal controls in all areas with your institution.
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COSO “Framework” (Summarized)
 Major Components
1. The control environment which includes the integrity,
ethical values and competence of an institution and its
people
2. Risk assessment
3. Control activities
4. Information and communications that encompasses the
methods for the identification, capture and
communication of pertinent information in a timeframe
that enables people to carry out their responsibilities
5. Monitoring
 All of the above combine to form an integrated system
with controls, all five components must be present and
functioning.
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Types of Internal Controls
Directive
Designed to provide guidance to the
entity over the business processes – helps
to set the tone
Preventive
Designed to keep errors or irregularities
from occurring in the first place
Detective
Designed to identify errors or irregularities
Corrective
Designed to fix errors or irregularities
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Internal Controls and Procurement Property
 Equipment
purchases are made in
accordance with purchasing guidelines,
properly authorized, and recorded
 Proper equipment object codes are used for
equipment with a per unit cost of $5,000 or
more and with a useful life of more than
three or more years
 All University equipment have an asset tag
 Utilize an annual departmental inventory
report is completed and returned to Property
Control by the due date
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Internal Controls and Direct
Charging to Sponsored Awards
 Pre-Award
systemic control for budgeting
only Allowable costs
 Inclusion of proper explanations in grant
Budget Narratives
 Review of all direct charged Clerical &
Administrative salaries to grants
 Periodic review/approval of posted
transactions by responsible/authorized
personnel (departmental/central)
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Internal Controls and Personal
Compensation/Effort Certification
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Periodic reports of payroll / cost sharing for review &
approval by faculty and departments
Ensuring all researchers certify effort on each project
and submission on a timely basis with proper
approvals, including corrections
Reviewing salary adjustments to ensure adjustments
are timely as well as appropriately reflected and
referenced on the effort cards
Procedures to ensure salary for all faculty over the NIH
salary cap is adjusted accurately
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Internal Controls and Cost Transfers
 For
transfers AFTER effort certification, proper
review/approval BEFORE posting (e.g., PI,
Dept Head, Dept Admin)
 SPA office review of ALL transfers processed
AFTER Effort Certification (e.g., filing of revised
effort statements)
 Processes/commitments to prevent future
occurrences of late posting transfers
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Internal Controls and Sub-recipient
Monitoring
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Review financial and programmatic reports. Ensure
that all required reports are completed accurately
and in a timely manner.
Follow up on deficiencies. Confirm that subrecipients
are taking timely and appropriate action on any
deficiencies detected through audits, onsite reviews
and other means.
System of Approval. Verify satisfactory performance
prior to university payment.
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Some Specific Topics
and Uniform Guidance
Impacts
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Compensation – Personal Services
 200.430
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Policy – mention all items in UG – sabbatical,
IBS, extra service, incidental, etc.
Standards of documentation – map
processes to make sure current environment
meets these requirements
Monitoring Controls
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Direct Costs
 200.413
– Administrative Costs
 Computing devices
 Visa costs
 Participant support
 Exchange rates
 Others of concern at your institution
Monitoring Controls
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Subrecipient Monitoring
 200.92
Subawards
 200.93 Subrecipient
 200.330 Subrecipient monitoring &
contractor determination
 200.331 Requirements for pass-through
entities
Monitoring Controls
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Other Uniform Guidance
Impacts/Considerations
 Procurement
– if grace period runs out
and we have to implement
 Dependent Care Costs – institutional
decision so that consistent – consider
costs to institution, how to implement
 Fixed price agreements
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Mitigating Risk
 Policies
 Education
 Procedures
 Buy
 Monitoring
 System
Controls
 Peer Reviews
in
 Roles &
Responsibilities
 Self Assessment
Tools
Your Institutional Challenges
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Presenters
 Steve
Bradley, Director
Maximus
 Kevin McHugh, Managing Director
Navigant
 Trudy Riley, Associate Deputy Provost,
University of Delaware, CRA, CPRA
 Sharon Brooks, Deputy Director – OSP
Duke University, CIA, CRA, CFRA
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