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Recent Changes Published in

Part 200 Uniform Guidance

-- Cost Principles

Steve Bradley,

Director

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Agenda

– New Structure (“Roadmap”)• Highlighting relevant F&A and Cost Principle sections

– Costing Principles• Including eliminations of prior A-21 sections• MAXIMUS Impact Assessment

– Resources

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Structure (cont.)

– Subpart E – Cost Principles (A-21, A-87, A-122)

• General Provisions § 200.400 to 401

• Basic Considerations (Cost Allowability, Applicable credits)

§ 200.402 to 411

• Direct and F&A Costs (including required Certifications)

§ 200.412 to 415

• State, Local & Indian Govt § 200.416 to 417

• Special Considerations for Institutions of Higher Education

§ 200.418 to 419

• General Provisions for Selected Items of Cost (Prior A-21, section J)

§ 200.420 to 200.475

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Structure (cont.)

– Subpart F – Audit Requirements (A-133)

– Appendices (combination of all 8 Circulars)• I – Notices of Funding• II – Contract Provisions• III -- F&A for Educational Institutions (A-21)• IV – Indirect for Non-Profits (A-122)• V – State/Local Cost Allocation Plans (A-87)• VI – Public Assistance (A-87)• VII – State/Local Indirect Cost Plans (A-87)• VIII – Non-Profit Exemption from Cost Principles (A-21)• IX – Hospitals (TBD)• X – Audit Data Collection (A-133)• XI – Single Audit Compliance Supplement (A-133)

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OMB Changes – Combine Circulars

• Consolidate A-87, A-21 and A-122 Cost Principles

• Create a common accounting standards for all grant recipients

IMPACT

--Probably add more confusion than clarity

--Universities are much different than Non-profits and State/Local Govt’s

--Document littered with “exceptions” (e.g., A-21 26% Admin cap )

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OMB Changes – Flat Rate

• For F&A costs, use a flat rate instead of current negotiated rate system – NOT in new guidance

IMPACT

GREAT!

•Flat / “tiered” rate idea was not well received and has been dropped

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OMB Changes – UCA (App. III B.4.c)

• Maximum 1.3 Utility Cost Adjustment with “Utilities” allocations based on “Effective square footage”

• ESF is actual SF times “Relative Energy Utilization Index (REUI)• REUI is currently 2X• OMB will adjust factor “no

more often than annually nor less often than every 5 years”

• Allows metering at a Sub-Building level????

IMPACT

GREAT (for some)!

Increase burden (for others)!

•Perhaps a Double-Edged Sword?

•Schools will now have to develop data for their Utilities pools

•“Separate Proposal”

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OMB Changes – Eliminate Required Study

• Eliminate requirement for institutions to conduct studies for cost reasonableness for Large Research Facilities

• prior A-21, F2

IMPACT

--GREAT!

--Reduce administrative burden

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OMB Changes – Eliminate Mandated F&A Usage

• Eliminate requirement that certain institutions must use F&A recoveries associated with depreciation to acquire or renovate research buildings or equipment

• prior A-21, J14h

• Currently applies to 99 schools

IMPACT

--GREAT!

--Reduce administrative burden

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OMB Changes – Eliminate Required Analysis

• Eliminate requirement that schools perform a Lease Purchase Analysis to justify External Bond Interest

• prior A-21, J26

• now Subpart E, 200.449

IMPACT

--GREAT!

--Reduce administrative burden

--But, Retained “25% Equity Contribution” rule

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OMB Changes – DS-2 (Subpart E, 200.419)

• Disclosure Statements (DS-2) & Compliance under the Cost Accounting Standards Board (CASB), retained (prior A-21, C14)

• Threshold raised from $25M to $50M

• Added: University proposed change must be submitted to DCA/ONR 6 months in advance

IMPACT

--Reduce administrative burden?

Change in effect next FY unless hear from DCA/ONR

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OMB Changes – 10% Rate for First-timers

• Addition of 10% de-minimus indirect cost rate (modified total direct cost basis) for entities that do not currently have a negotiated rate

• Subpart E, 200.414

IMPACT

GREAT!

--May reduce the need for university staff to review indirect proposals from these type sub awardees / subcontractors

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OMB Changes – Cost Sharing

• Affirm that Voluntary Committed Cost Sharing is NOT expected & is NOT to be used as a factor in review of applications

• Subpart D, 200.306

• Only mandatory cost sharing and cost sharing specifically committed in the project budget must be included in the organized research base

IMPACT

GREAT!

--Probably reduce administrative burden and/or Organized Research “base”

--VUCS clarification still in effect

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OMB Changes – Direct Charging of Admin.

• Salaries of administrative staff may be direct charged to federal grants where ALL of the following are met:• Services are integral to the

project • Individuals can be specifically

identified to the project • Explicitly included in the

budget or have prior written approval

• AND, are not recovered as indirect costs

• Subchapter E, 200.413

IMPACT

DOUBLE-EDGED SWORD!

--May reduce confusion

--But may increase the Organized Research MTDC base and, in turn, lower proposed rates

--As offset, F&A rates would be applied to these new direct costs, increasing F&A Dollar Recoveries

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OMB Changes – Rate for All Agencies

• Require Federal agencies to accept negotiated indirect (F&A) cost rates, unless an exception is required by statute or regulation; and, Federal agency must notify OMB of any approved deviations

• Subpart E, 200.414

• IMPACT

• Regrettably, not much change• Except, OMB will now have central repository of these

• For example, USDA, 8% Training grants, etc., will probably stay at reduced F&A rates

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OMB Changes – Effort Certification

• Remove the “Examples of Acceptable Methods for Effort Certification for Payroll Distribution”

• Emphasis on “Internal Controls” and “Performance”

• prior A-21, section J10

• Subpart E, 200.430

IMPACT

•Reduces Effort Certification burden•Allows “flexibility in how universities can meet standards”•“Final guidance does not require current PAR’s/similar documentation”•Also, FDP doing their own “Project Certification” Demo, including reviews by OIG’s

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OMB Changes – Rate Extension

• All Non-Federal entities may apply for a one-time extension of current F&A rates for up to four years, subject to cognizant agency approval

• Subpart E, 200.414

•IMPACT

•May be appropriate for some universities

•For others, may reduce F&A dollar Recoveries (e.g., if major new research buildings, if now eligible for UCA, or substantial decrease in base re: end of ARRA grants)

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OMB Changes – Computing Devices

• Addition of new language which allows “Computing devices” and associated support costs to be treated as allowable and allocable direct costs

• Subpart E, 200.453

IMPACT

DOUBLE-EDGED SWORD!

•May reduce confusion

•But may increase the Organized Research MTDC base and, in turn, lower proposed rates

•As offset, F&A rates would be applied to these new direct costs, increasing F&A Dollar Recoveries

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OMB Changes – MTDC (App. III C.2)

• App. III C.2. references section 200.68 where participant support costs, defined in 200.75, are listed as an exclusion to MTDC

• Other items may only be excluded when necessary to avoid a serious inequity in distribution of indirect costs, and with the approval of the cognizant agency

IMPACT

-- Perhaps increase burden to identify new exclusion

-- Possibly deter agencies adding unfair base exclusions (e.g. genomic arrays)

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OMB Changes – Library Expenses (App. III B.8)

• The professional employee category can include post-doctorate fellows and graduate students

• The other users category can be based on a reasonable factor as determined by institutional records to account for all other users of library facilities

IMPACT

--GREAT!

--Support standard practice allocation to postdocs and grad students

--Reduce administrative burden

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OMB Changes – Dual Role of Students

• Kept language stating “ … the dual role of students as both trainees and employees contributing to the completion of Federal awards for research must be recognized in the application of these principles.”

• Subpart E, 200.400(f)

IMPACT

--GREAT!

--May have reduced F&A rates if omitted

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Unresolved Issues

• When will revised DCA Best Practices Manual be published?

• UCA for FY14 base year F&A rate proposals?

• Definition of “monitored research laboratory space” re: UCA

• Format for “separate calculation proposal” for UCA

• Does “one time” extension mean once in the life of the rate or once in the life of the institution

• Send questions to COFAR cofar@omb.eop.gov

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Resources

http://www.maximus.com/our-services/education/higher-education/omb-uniform-guidance

• Federal Register article: Web | PDF• 2 CFR Part 200: eCFR - Code of Federal Regulations• The OMB website includes many helpful links:

• OMB Policy Statements: Uniform Grant Guidance• Crosswalk from Existing Guidance to Final Guidance• Crosswalk from Final Guidance to Existing Guidance• Cost Principles Comparison Chart • Audit Requirements Comparison Chart • Definitions Comparison Chart• Administrative Requirements Comparison Chart• COFAR

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