View
215
Download
3
Category
Tags:
Preview:
Citation preview
The Uniform Grant Guidance: Background, Financial Management and Allowability
Changes
Presented by: Leigh Manasevit, Esq.
lmanasevit@bruman.com Brustein & Manasevit, PLLC
Fall Forum 2014
Reasons for the Change?
1. Simplicity2. Consistency3. Obama Executive Order on Regulatory
Review– Increase Efficiency– Strengthen Oversight
Brustein & Manasevit, PLLC 2
Who crafted the changes?
• “COFAR”–Council on Financial Assistance Reform,
and –Key Stakeholders
• www.cfo.gov/cofar
Brustein & Manasevit, PLLC 3
Who is covered?
• All “nonfederal entities” expending federal awards
Brustein & Manasevit, PLLC 4
What is included?
• A-102: Administrative Rules - State/Local – Part 80 – EDGAR
• A-110: Administrative Rules - Postsecondary and Nonprofits– Part 74 – EDGAR
• A-87: Cost Rules - State/Local• A-21: Cost Rules - Postsecondary• A-122: Cost Rules - Nonprofits• A-133: Audit Rules
Brustein & Manasevit, PLLC 5
Brustein & Manasevit, PLLC 6
Key Dates:Key Dates
February 1, 2013 Notice of Proposed Rulemaking
December 26, 2013 Published Rule in Federal Registerhttp://www.gpo.gov/fdsys/pkg/FR-2013-12-26/pdf/2013-30465.pdf
June 26, 2014 Draft Regulations Due to OMB
August 29, 2014 COFAR Releases FAQs
December 26, 2014 Final Regulations Published
Date of Applicability of Revised Rules
Guidance applies to all new awards and incremental funding made on or after 12/26/2014
OMB stated on 12/20/13 All additions after December 26, 2014
? ? ? Brustein & Manasevit, PLLC 7
COFAR Updates – FAQs - August 29, 2014
• Applies to new federal awards if a federal awarding agency considers its incremental funding actions to be opportunities to change terms and conditions of previously made awards.
• Federal awarding agencies may apply the Uniform Guidance to the entire Federal awards that is uncommitted or unobligated as of the Federal award date or first increment after 12/26/14.
Brustein & Manasevit, PLLC 8
COFAR Updates – FAQs - August 29, 2014 (cont.)
• What about subawards?– The effective date is the same as the effective date of the
Federal award from which the subaward is made. • Does not matter when the subaward is made – but the
original Federal award from the Federal awarding agency.
• There Is a Procurement “Grace Period” of 1 year.
Brustein & Manasevit, PLLC 9
Inconsistency Between Program Statute and Guidance
If federal program statute differs from Uniform Grant Guidance, then statute/regulation governs.
Brustein & Manasevit, PLLC 10
A Significant Change
• Shift from focus on compliance to focus on PERFORMANCE!!!
Brustein & Manasevit, PLLC 11
Performance
• Auditors (A-133 + Federal OIG) and Monitors (Federal and State Pass-Through) must look more to “outcomes” than to “process”
Brustein & Manasevit, PLLC 12
Most Significant Change ???
The Uniform Grant Guidance has a MAJOR emphasis on “strengthening accountability” by improving policies that protect against waste, fraud and abuse
Brustein & Manasevit, PLLC
13
New: Required Certifications 200.415
Brustein & Manasevit, PLLC
14
• NEW: Official authorized to legally bind the non-federal entity must certify on annual and final fiscal reports or vouchers requesting payment:– “By signing this report, I certify to the best of my
knowledge and belief that the report is true, complete and accurate and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the federal award. I am aware that any false, fictitious, or fraudulent information or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims, or otherwise.”
STRUCTURE OF UNIFORM GRANT GUIDANCE (P. 78608)
2 CFR Part 200
Brustein & Manasevit, PLLC 15
Uniform Grant Guidance Sections (p. 78608)
• Subpart A – Definitions• Subpart B – General Provisions• Subpart C – Pre Award Requirements• Subpart D – Post Award Requirements• Subpart E – Cost Principles• Subpart F – Audit Requirements
Brustein & Manasevit, PLLC 16
Key Definitions (Examples)
• Cognizant Agency for Audit 200.18 (78611)• Cognizant Agency for Indirect 200.19 (78611)• Cooperative Audit Resolution 200.25 (78612)• Improper Payment 200.53 (78614)• Internal Control Over Compliance 200.62 (78615)• Major Program 200.65 (78615)• Modified Total Direct Cost 200.68 (78615)• Non-Federal Entity 200.69 (78615)
Brustein & Manasevit, PLLC 17
FINANCIAL MANAGEMENT CHANGES
200.302(b)1.(NEW) Identification of Awards 2.Financial Reporting3.Accounting Records (Source Docs)4.Internal Control5.Budget Control6.(NEW) Written Cash Management Procedures 7.(NEW) Written Allowability Procedures
Brustein & Manasevit, PLLC 18
Identification of Awards (New)
• All federal “awards” received and expended• The name of the federal “program”• Identification of award– CFDA Title and Number– Federal Award I.D. #– Fiscal Year of Award– Federal Agency– Pass-Through (If S/A)
Brustein & Manasevit, PLLC 19
Financial Reporting
New shift to OMB approved performance metrics
Brustein & Manasevit, PLLC 20
Financial Reporting (cont.)
Accurate, current, complete disclosure of financial results of each award(Old) in accord with the financial reporting reqs of the grant(New) in accord with 200.327 and 200.328
200.327 – Federal awarding agency can only collect OMB approved data elements, no less than annually, no more than quarterly
200.328 – Non-federal entity must submit performance reports at intervals required by federal agency or pass-through. Annual performance reports due 90 days after reporting
period; Quarterly performance reports due 30 days after reporting period
Brustein & Manasevit, PLLC 21
Financial Reporting (cont.)
Performance Metrics:1. Compare actual accomplishments to
objectives (quantify to extent possible)2. Reasons goals were not met if appropriate3. Additional pertinent information (e.g.,
analysis and explanation of cost overruns, high unit costs)
Brustein & Manasevit, PLLC 22
Financial Reporting (cont.)
• OMB Allows ED to waive “performance metrics” not required.
• How will ED reconcile performance metrics with accountability/performance indicators of ESEA, IDEA, CTE, AEFLA
Brustein & Manasevit, PLLC 23
Accounting Records (Source Documentation)
Combines current requirements:•Source Documentation Must Be Kept On:
1. Federal Awards2. Authorizations3. Obligations4. Unobligated balances5. Assets6. Expenditures7. Income8. Interest (New) (Eliminated liabilities)
Brustein & Manasevit, PLLC 24
Internal Controls
Essentially same as current requirements: Effective control over and accountability for:
1. All funds2. Property3. Other assets
Must adequately safeguard all assetsUse assets solely for authorized purpose
Brustein & Manasevit, PLLC 25
Internal Controls (cont.)
• Cross reference 200.303 (New)• Internal Controls must ensure compliance with
federal statutes, regs, terms of the award• Entities must:– Evaluate and monitor compliance;– Take prompt action when instances of
noncompliance are identified; and – Safeguard protected personally identifiable
information (PII)
Brustein & Manasevit, PLLC 26
Budget Control
• Same as current rules• Comparison of expenditures with budget amounts for each
award
Brustein & Manasevit, PLLC 27
Written Cash Management Procedures (New)
• Written Procedures to implement the requirements of 200.305
Brustein & Manasevit, PLLC 28
Written Cash Management Procedures (cont.)
For states, payments are governed by Treasury – State CMIA agreements 31 CFR Part 205
No Change
For all other non-federal entities, payments methods must minimize time elapsing between draw from G-5 and disbursement (not obligation)
Brustein & Manasevit, PLLC 29
Written Cash Management Procedures (cont.)
Written procedures must describe whether non-federal entity uses:1) Advance Payments (preferred) • Limited to minimum amounts needed to meet immediate
cash needs 2) Reimbursement• Pass-through must make payment within 30 calendar days
after receipt of the billing3) Working Capital Advance• The pass-through determines that the non-federal entity
lacks sufficient working capital Allows advance payment to cover estimated disbursement needs for initial period
Brustein & Manasevit, PLLC 30
Written Cash Management Procedures (cont.)
• Advances must be maintained in insured accounts• Pass-through cannot require separate depository
accounts• Accounts must be interest bearing unless:
1. Aggregate federal awards under $120,0002. Account not expected to earn in excess of $500 per year3. Bank require minimum balance so high, that such
account not feasible
Brustein & Manasevit, PLLC 31
Written Cash Management Procedures (cont.)
• Interest earned must be remitted annually to HHS
• Interest amounts up to $500 may be retained by non-federal entity for administrative purposes– Currently $250 for IHEs and NonProfits and $100 for State and
local governments
Brustein & Manasevit, PLLC 32
Written Allowability Procedures (New)
• Written procedures for determining allowability of costs in accord with Subpart E – Cost Principles (see p. 78639 – 78662)
Brustein & Manasevit, PLLC 33
Factors Affecting Allowability of Costs 200.403
Brustein & Manasevit, PLLC
34
All Costs Must Be:1. Necessary, Reasonable and Allocable2. Conform with federal law & grant terms3. Consistent with state and local policies 4. Consistently treated5. In accordance with GAAP6. Not included as match7. Net of applicable credits (moved to 200.406)8. Adequately documented
Applicable Credits 200.406
Brustein & Manasevit, PLLC
35
• Those receipts or reduction-of-expenditure type transaction that offset or reduce expense items – must be credited to the Federal award as either cost reduction or cash refund, as appropriate.– Examples: purchase discounts, rebates or allowances, recoveries
or indemnities on losses, insurance refunds or rebates, adjustments of overpayments
Profit 200.400(g)
Brustein & Manasevit, PLLC
36
• Non-federal entities may not earn or keep any profit resulting from federal financial assistance, unless expressly authorized by the terms and conditions of the federal award.
Prior Written Approval 200.407
Brustein & Manasevit, PLLC
37
• NEW: In order to avoid subsequent disallowance:– Non-federal entity may seek prior written approval of
cognizant agency (for indirect cost rate) or Federal awarding agency in advance of the incurrence of special or unusual costs
Program Income 200.307
Brustein & Manasevit, PLLC
38
• Non-Federal entities are encouraged to earn income to defray program costs where appropriate. – Costs of generating program income may only be deducted if:
• Authorized by federal regulations or the federal award; • Costs are incidental and not charged to the federal award.
– Property from the sale of real property or equipment is not program income – apply post award property rules.
• NEW: Program Income Must Be Deducted from Total Allowable Costs– With prior approval may dd to Federal Award.
Direct v. Indirect Costs 200.413
Brustein & Manasevit, PLLC
39
• NEW: Salaries of administrative and clerical staff should be treated as “indirect” unless all of following are met:1. Such services are integral to the activity2. Individuals can be specifically identified with the activity3. Such costs are explicitly included in the budget4. Costs not also recovered as indirect
Contract vs. Grant 200.330
• No change from the current requirement. • Entities must clearly determine what is a
subgrant and what is a contract.– Note the difference!!
Brustein & Manasevit, PLLC 40
Selected Items of Cost
The Uniform Grant Guidance has 55 specific items of cost!
200.420
Brustein & Manasevit, PLLC 41
Selected Items of Cost Examples
Brustein & Manasevit, PLLC
42
• Advertising/PR 200.421 (Clarified) ◦ Allowable for programmatic purposes including:
◦ Recruitment◦ Procurement of goods◦ Disposal of materials◦ Program outreach◦ Public relations (in limited circumstances)
Alcohol 200.423Not allowable
Selected Items of Cost (cont.)
Brustein & Manasevit, PLLC
43
• Collections of Improper Payments 200.428 (New)– The costs incurred by the non-
Federal entity to recover improper payments are allowable as either direct or indirect costs, as appropriate.
Selected Items of Cost (cont.)
Brustein & Manasevit, PLLC
44
• Entertainment Costs 200.438 (Clarified)– Cost of entertainment are unallowable
• Amusement, Diversion, Social Activities
– Except where costs might otherwise be considered programmatic and are authorized or have prior written approval of the federal awarding agency.
• Fines, Penalties, Damages and other Settlements 200.441– If related to violation, alleged violation or failure to comply with Federal,
state, tribal, local or foreign law and regulations then unallowable. – Except with prior written approval of federal awarding agency.
Selected Items of Cost (cont.)
Brustein & Manasevit, PLLC
45
• Travel Costs 200.474 (Changed)• Prior rule: allowable with certain restrictions
– Travel costs may be charged on actual, per diem, or mileage basis
– Travel charges must be consistent with entity’s written travel reimbursement policies
– Grantee must retain documentation that participation of individual in conference is necessary for the project
– Travel costs must be reasonable and consistent with written travel policy/or follow GSA 48 CFR 31.205-46(a)
Disclaimer
This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances.
Brustein & Manasevit, PLLC 46
Recommended