Director, Office of Sponsored ... - Iowa State University...• OMB published final guidance in...

Becky Musselman

Director, Office of Sponsored Programs Administration

rjmusse@iastate.edu 515-294-7723

Neena Bentley

Manager, Sponsored Programs Accounting

nbentley@iastate.edu 515-294-5279

• Uniform Guidance requirements for Grants and

Cooperative Agreements

(2 CFR 200)

• Contractor Code of Business Ethics and

Conduct

(FAR 52.203-13)

• ISU’s implementation of these requirements

• ISU’s policy and procedural changes due to

these regulations

Just kidding……….

May 17, 2016

• OMB published final guidance in Federal

Register (2 CFR 200) on December 26, 2013

• Titled: “Uniform Administrative Requirements,

Cost Principles, and Audit Requirements for

Federal Awards”

• Single largest regulatory change for Federal

research administration in the last 50 years

• Applies to non-Federal entities (NFEs), which

includes institutions of higher education (IHEs)

• Combined eight OMB Circulars into one set of

regulatory guidance

• Effective for new awards and incremental

funding issued on or after December 26, 2014

• Procurement – two full fiscal years grace period

• ISU must be compliant by July 1, 2017

• Audits – effective with first fiscal year after

effective date

• FY16 for ISU

• In general, UG provides the maximum

requirements that Federal agencies can impose

(minimum standards for awardees)

• Increased focus on Internal Controls

• Subpart A – Acronyms and Definitions

• Subpart B – General Provisions

• Subpart C – Pre-Federal Award

Requirements & Contents of Federal Awards

• Subpart D – Post Federal Award

Requirements

• Subpart E – Cost Principles

• Subpart F – Audit Requirements

• Appendices I – XI (III for F&A)

• Each Federal agency has issued agency-

specific regulations to implement the UG

• NSF has released their final version (PAPPG)

• Uncertainties still exist

• Understanding agency-specific regulations

• UG Research Terms & Conditions

• Technical Corrections not codified

• Federal Agency OIG Interpretations

• AOS Single Audit Interpretations

• Committee of administrators formed in June 2014

to review and assess UG

• ISU established seven work groups:

• Conflict of Interest

• Pre-award

• Post-award and Property

• Purchasing

• Costing

• Effort Reporting

• Subaward and Subrecipient Monitoring

• Multi-department membership of each work

group

• Determined impact of UG on existing ISU

policies, guidelines and practices

• Recommended changes to ISU policies,

guidelines and practices for their respective

areas

• Presented draft work group summary and

proposed recommendations to Steering

Committee in October 2014 and December 2014

• Reviewed, updated and consolidated work group

summaries

• Presented information to ISU Senior

Administrators in February 2015

• Submitted 44 recommendation areas to ISU

Senior Administrators for consideration

2 CFR 200.112Federal awarding agency must

establish conflict of interest

policies for Federal awards

Change:Potential Conflict of Interest

Must Be Disclosed in Writing to

Federal Agency

Action Items:• Update ISU COIC Policy

and COIC Procedures,

Applications and Guidance

document

• Added PI attestation to

OSPA’s Subrecipient

Request Form

• COI Administrator to notify

Federal agency or pass-

through entity per Federal

agency guidelines

2 CFR 200.113Must report all violations of

Federal criminal law involving

fraud, bribery or gratuity

violations affecting the award

or proposal

Change:Mandatory Disclosures of

Violations to Federal Agency

Action Items:• Updated procedures for

mandatory reporting of

violations of Federal

criminal law involving fraud,

bribery, or gratuity violations

• Updated Reporting

Responsibility - Violations

Policy to reference Federal

awards, not only contracts

2 CFR 200.201Use of Agreements

Change:Fixed Amount Awards must

have entity certify completion

Fixed Amount Awards cannot

be used in programs requiring

cost share or match

Action Items:• Created procedure for

issuing certification of

completion for fixed price

awards

• Created procedure for

obtaining certification of

completion for fixed price

awards from subrecipients

2 CFR 200.331Special Conditions

Change:Perform risk assessment of

subrecipient to determine if

additional award conditions

should be imposed for High

Risk subrecipients

Action Items:• Impose additional award

conditions for subrecipients

deemed to be high risk

2 CFR 200.302(b)(1)Financial Management

Change:More Detailed Requirements

for Identification of Federal

Awards

Action Items:• Created custom data fields

in award system for FAIN

and Award Year

• Used existing field in award

system for Execution Date

2 CFR 200.303(c)Internal Controls

Change:Increased Emphasis on

Internal Controls

Action Items:• Must provide reasonable

assurance for compliance

• Perform and document

assessment of ISU internal

control environment

2 CFR 200.303(e)Internal Controls

Change:Must take reasonable

measures to protect personally

identifiable and sensitive

information

Action Items:• Safeguard personally

identifiable and sensitive

information

• Finalized and implemented

ITS Data Classification

Policy, ITS Data

Classification Standards

and Guidance, and ITS

Minimum Security

Standards

2 CFR 308(c)(5)Revision of Budget and

Program Plans

Change:Prior Approval Needed for

Transfer of Participant Support

Costs (PSC) to Other Budget

Categories

Action Items:• Updated ISU Sponsored

Programs Costing Policy

• Drafted and implemented

ISU PSC Guidelines (per

2014 NSF Virtual Site Visit

finding)

2 CFR 200.313 Equipment

Change:Equipment Title Clarifications

– Conditional Title & Trade-Ins

Action Items:• Created new owner type in

Inventory System for items

with conditional title and

implemented mass change

• Created new owner type in

Inventory System for

equipment with Federal

interest from trade-ins

• Revised Purchasing and

Accounting procedures for

equipment trade-ins

• Increase training efforts on

equipment requirements

2 CFR 200.318(b)General Procurement

Standards

Change:Must Maintain Oversight to

Ensure Contractor

Performance

Action Items:• Developed contract close-

out checklist

• Developed process to

identify procurement

transactions on Federal-

sourced accounts

2 CFR 200.318(f)General Procurement

Standards

Change:Encouraged to Use Federal

Excess and Surplus Property

Action Items:• Added procedures for

Federal-sourced

procurement

• Added to checklist in

Purchasing Procedures

2 CFR 200.318(i)General Procurement

Standards

Change:Must Document Rationale for

Procurement Method,

Selection of Contract Type,

Contractor Selection or

Rejection, and Basis for Price

Action Items:• Added to procedures for

Federal-sourced

procurement

• Added to checklist in

Purchasing Procedures

2 CFR 200.319(a)Competition

Change:Must Exclude Contractors that

Develop or Draft

Specifications, Requirements,

or Statements of Work from

Competition

Action Items:• Developed and included a

certification statement in bid

documents

• Added to procedures for

Federal-sourced

procurement

• Added to checklist in

Purchasing Procedures

2 CFR 200.319(b)Competition

Change:State or Local Geographical

Preferences Must Not Be

Imposed

Action Items:• Added requirement to

Purchasing Procedures for

Federal-sourced

procurement

2 CFR 200.320(a)Methods of Procurement

Change:Micro-purchase Definition

• Less than $3,000

Small Purchase Definition

• $3,000 to $150,000

• Require price quotations

from an adequate

number of sources

Action Items:• Develop and maintain two

procurement processes: Federal

and non-Federal

• Prohibit departmental P-card

transactions >= $3,000 on

Federal-sourced accounts

• Consider lock-out for account

changes on POs

• Prohibit transfer of P-card and

other procurement transactions >=

$3,000 to Federal-sourced

accounts from non-Federal-

sourced accounts

2 CFR 200.320(d)(1)Methods of Procurement

Change:RFP – Must Identify All

Evaluation Factors and Their

Relative Importance

Action Items:• Develop and maintain two

procurement processes:

Federal and non-Federal

• Revise procedures to

include ranking of

evaluation criteria for

Federal-sourced competitive

solicitations

2 CFR 200.320(d)(3)Methods of Procurement

Change:Must Have Written Method for

Conducting Technical

Evaluations of Proposals and

Selection Process

Action Items:• Develop written proposal

evaluation and selection

process procedures

2 CFR 200.323(a)Contract Cost and Price

Change:Must Perform a Cost and Price

Analysis on Every Procurement

Action > $150,000

Action Items:• Develop and maintain two

procurement processes:

Federal and non-Federal

• Revise procedures for

Federal-sourced

procurement > $150,000 to

require independent

estimates

2 CFR 200.403 (a)Factors Affecting Allowability of

Costs

Change:Costs must "be necessary and

reasonable for the performance

of the award”

Action Items:• Updated Allowability and

Appropriateness Guidelines

and training materials

2 CFR 200.407Prior Written Approval

Change:May seek prior written approval

for unusual costs

Action Items:• To avoid disallowance,

contact Federal agencies in

advance of the incurrence of

unusual costs

2 CFR 200.413(c)Direct Charging of

Administrative or Clerical

Services

Change:Direct charging may be

appropriate under certain

conditions• Services are integral to the project

• Staff can be identified with the project

• Costs are included in the budget or

have prior written approval

• Costs are not also recovered as IDC

Action Items:• Revised ISU Sponsored

Programs Costing Policy

• ISU Requires .15 FTE effort

to be deemed integral

2 CFR 200.414(f)De Minimis IDC Rate

Change:Establishment of De Minimis

IDC Rate

Action Items:• Use 10% IDC rate for

subrecipients who have

never received a negotiated

IDC rate

2 CFR 200.415(a)Certification and Personal

Liability

Change:Fiscal Reports and Payment

Requests Must Include

Certification by Authorized

Official

Action Items:• SVPBF Delegated Authority

to Sponsored Program

Accountants

• Update ISU Reporting

Responsibility – Violations

Policy for additional

language

2 CFR 200.432Conferences

Change:Conference hosts/sponsors

must exercise discretion and

judgement so that costs are

managed in a manner that

minimizes costs to the Federal

award

Action Items:• Revise ISU CP&M

procedures for conferences

funded from Federal

sources

• Increase training efforts on

conference costs

2 CFR 200.440Exchange Rates

Change:Cost increases for fluctuations

in exchange rates are

allowable, subject to the

availability of funding

Action Items:• Review exchange rate

fluctuations prior to end of

award

• Request additional funding

from Federal agency if

warranted

2 CFR 200.453Computing Devices

Change:• Computing devices are

considered a supply item

• Computing devices can be

direct charged when used

for project purposes (do not

need to be solely dedicated)

Action Items:• Charge computers and

computing devices to

sponsored projects using

estimated usage and

proportional benefit rule,

similar to costing of other

materials and supplies

2 CFR 200.456Participant Support Costs

(PSC)

Change:• PSC definition

• Can’t charge IDC on PSC

Action Items:• Provided training on new

PSC requirements

• Create separate project

account for PSC

2 CFR 200.474Travel and Dependent Care

Costs

Change:• Costs above and beyond

regular dependent care that

directly results from travel to

conferences is allowable

• Must be documented in

institution’s travel policy for

all entity travel (all funding

sources)

Action Items:• Determined University-wide

policy was not desired

• Institutional policy was not

developed given existing

resources

2 CFR 200.430Compensation – Personal Services

Change:• Higher standards for internal

controls

• Less prescriptive requirements

• Requires institutional policies

and procedures consistently

applied to Federal and non-

Federal activities

• Documentation must exist to

accurately reflect work

performed

Action Items:• Review existing Effort

Reporting and other policies

and processes to ensure

compliance with UG

• Maintain current Effort

Reporting System until other

type systems have withstood

OIG audits

2 CFR 200.430Compensation – Personal Services

Change:• Cost share must be

documented in same manner

as direct charges

• “Certification” and “Effort”

language not used

• NSF: If not in approved

budget(s), ISU can internally

approve rebudget of senior

personnel salary for more than

two months per year

Action Items:• Review existing Effort

Reporting and other policies

and processes to ensure

compliance with UG

• Create internal approval

process for rebudget requests

to charge more than two

months of salary per year on

NSF awards for senior

personnel

2 CFR 200.431Compensation – Fringe Benefits

Change:• Allowable provided fringe

benefits are reasonable,

required by law, entity-

employee agreement, or

established policy

• Requires written institutional

policies

Action Items:• ISU is changing from a cash

basis for recovery of benefits to

a pooled fringe benefit rate so

that fringe benefits are

consistently applied to awards

and terminal sick leave payouts

are not paid from unrestricted

sources (vacation payouts

were not included in fringe rate)

• This change requires

substantial reprogramming

2 CFR 200.330Subrecipient and Contractor

Determinations

Change:• Requires determination of

the type of role

• Descriptive characteristics

are outlined for subrecipient

and contractor

Action Items:• Developed guidelines for

the determination of

subrecipient or

contractor/consultant

2 CFR 200.331Requirements for Pass-

Through Entities

Change:Subaward - Mandatory Data

Elements

Action Items:• Added missing data

elements to subcontract

(non-FDP) template

• Added fields for missing

data elements to KC

Subaward module

2 CFR 200.331Requirements for Pass-

Through Entities

Change:Requires Risk Evaluation of

Subrecipients

Action Items:• Updated OSPA

Subrecipient Request Form

• Created new Subrecipient

Questionnaire for risk

evaluation purposes

• Perform and document risk

evaluation of subrecipients

2 CFR 200.331Requirements for Pass-

Through Entities

Change:Subrecipient Monitoring

• Requirements

• Monitoring Tools

• Adjustments to

Subrecipient’s Records

• Remedies for

Noncompliance

Action Items:• Updated SPA Subrecipient

Monitoring Brochure to

indicate requirements,

suggested monitoring tools,

and when adjustments or

other actions are warranted

• Email PIs a link to the SPA

Brochure with the fully

executed subrecipient

agreement

2 CFR 200.332Fixed Amount Subawards

Change:Fixed amount subawards may

be used up to the Simplified

Acquisition ($150K) with prior

written approval of the Federal

agency

Action Items:• Define process for

identifying fixed price

subawards at proposal

stage

• Obtain post-award sponsor

approval for fixed price

subawards prior to

issuance, if prior approval

has not been waived

Uncertainty still exists

• Numerous agency-specific regulations

• UG Research Terms & Conditions not issued

• Technical Corrections not codified

• Federal Agency OIG Interpretations

• AOS/Auditor Single Audit Interpretations

May 17, 2016

• FAR requirement is unique to Federal sponsors issuing

Federal contracts

• Required when a Federal contract:

• Value expected to be > $5.5 million; and

• Performance period > = 120 days

• For indefinite delivery/indefinite quantity contracts, some

sponsors are requiring compliance even when individual

orders do not meet the criteria (e.g., FHWA)

• Implemented by inclusion of the FAR clause in the Federal

contract - FAR 52.203-13, Contractor Code of Business Ethics

and Conduct (Oct 2015)

• In competitive scenarios, clause will be stated as a

requirement in the Request for Proposals (RFP), and then

included in the subsequent Federal contract agreement

• In the Federal contract agreement, clause will normally be

found in the FAR clauses section

• Mandatory flow-down requirement for subcontracts meeting

same criteria

• ISU could see this included in a subcontract from another

entity

Specifically:

• Must have a written code of

business ethics and conduct

• Must institute employee

ethics and compliance

training program

• Make a copy of code

available to each employee

engaged in performance of

the contract

Generally:

• Exercise due diligence in

preventing and detecting

criminal conduct

• Promote culture that

encourages ethical conduct

and legal compliance

• Make timely disclosures of

violations and

overpayments

ISU SVP for Business and Finance named the office

responsible for program implementation, oversight and

compliance

Policy and program document at:

http://www.policy.iastate.edu/policy/business/conduct

Mandatory training for affected employees

Program document distributed to affected employees

ISU Compliance and Ethics Hotline at:

http://www.policy.iastate.edu/ethics-hotline

Hotline posters must be displayed in work areas

(FAR 52.203-14)

Affected employees must be aware of the requirements and available resources.

Above all, employees must be vigilant in identifying and reporting improper

conduct on Federal contracts.