Compliance Corner and Uniform Guidance Update

MRAM December 2014

Ted MordhorstDirector for Post Award Financial ComplianceResearch Accounting & Analysis

Audit News

NSF:University AuditsQuestioned costs:

1. Senior Personnel salaries exceeding two months

Ted MordhorstDirector for Post Award Financial ComplianceResearch Accounting & Analysis

Audit News

NSF:University AuditsQuestioned costs:

2. Charges near the end of the award

Ted MordhorstDirector for Post Award Financial ComplianceResearch Accounting & Analysis

Audit News

NSF:University AuditsQuestioned costs:

3. inadequate documentation support for other costs, Travel, Visas

Ted MordhorstDirector for Post Award Financial ComplianceResearch Accounting & Analysis

Uniform Guidance: Effective December 26, 2014MRAM December 2014

Applicability of the Uniform Guidance

All new and renewal funding received on or after 12/26/14 is subject to the UG (and the revised GIMS)

Federal Sponsors may “pull in” existing funding on a project under the UG, when providing supplemental funding to the project:

Via terms and conditions; By blanket agency policy.

If Federal Sponsor is “silent” on this issue, UW will treat the entire BN as under the UG if supplemented with funding received on or after 12/26/14.

Uniform Guidance

Comparing the treatment of certain costs under current regulation (A-21) vs. the Uniform Guidance (2 CFR 200)(UG)

Items not previously mentioned in A-21

Uniform Guidance

Comparing the treatment of:

Administrative and Clerical Costs

Computing devices

under current regulation (A-21) vs. the Uniform Guidance (2 CFR 200)(UG)

Administrative & Clerical Costs Now A-21

Criteria for direct charging of Administrative and Clerical costs under OMB Circular A-21 Funding received prior to 12/26/14

Major project or activity

The project requires an extensive amount of admin or clerical support.

Significantly greater than the routine level of such services normally provided by departments.

Administrative Costs Under UG Criteria for direct charging of Administrative & Clerical

costs under UG effective for new funding received on or after 12-26-14.

Services are integral to a project or activity;

Individuals specifically identified with the project or activity;

Explicitly included in the budget or have the prior written approval.

Not included in F&A rate.

A21 & UGAdministrative Costs

Primary difference between A-21 and UG

UG removes the “Major Project or Activity” and extensive effort criteria

Under UG, If the cost can be justified as “integral” to the project and the sponsor approves, it is allowable.

Care should be taken to ensure that the actual activity corresponds to what is justified.

Computing Devices NowA21

Computing devices Desktops and peripherals, Laptops, Tablets, etc. Funding received prior to 12/26/14

Automated Data Processing (ADP)equipment is identified as General Purpose Equipment (requires approval)

Equipment = useful life of 1 year + and cost of $2K+

Computing Devices UG Computing devices

Desktops and peripherals, Laptops, Tablets, etc.

Cost below $2K treat as a supply item.

Essential and allocable to the award.

Use is not limited to the award.

($2K & over = General Purpose Equipment)

Computing Devices UGDefinition of equipment remains the same. $2K+ and useful life of 1yr+

Cost of the item including shipping, taxes, etc.

Expense under 05-40 or 41

Computing Devices < $2KPrimary difference in treatment (UG).

UG clarifies treatment as supplies.

UG requires a careful balance between allocability and use.

Computing Devices < $2KPrimary difference in treatment (A-21).

A-21 treated as General purpose Equipment regardless of cost.

A-21 generally considered use limited to the award charged or allocate across all benefiting awards.

Requires prior sponsor approval.

Computing Devices UGAllocable to the award. The primary purpose for the purchase is

that the device is necessary to achieve the objectives.

Similar to equipment provisions if excess capacity exists it may be used for other activities. Award activity takes precedence

Computing Devices UGComputing devices costing $2K and above. Classified as General Purpose

Equipment.

Requires prior sponsor approval.

May be used for other activities but preference MUST be given to other federal awards.

New Costs in the UG Participant Support Costs

Applicable to awards with training component or conference

Exempt from F&A Sub-budget used to identify

Requires sponsor approval

May not be rebudgeted without sponsor approval.

New Costs Visa costs (subset of recruitment costs)

Short Term Visa Costs are allowable Critical and Necessary Normally paid regardless of funding source Directly allocable to the award

Not long term (immigration) visa costs.

New Costs Value Added Tax (VAT)

Legally required to pay in-country

Should make every reasonable effort to obtain exemption if available.

GIM 2: Acceptance of Sponsored Program Awards and Fiscal Compliance on Sponsored Program Accounts

Reiterates the authority of OSP to accept sponsored funding.

States the authority of OSP and GCA to oversee central fiscal processes, systems, and policies related to sponsored programs.

Emphasizes internal controls by central offices and by PIs at the project level.*

Pulls in IC/procedural information into the Procedures/Guidance section from other GIMS and will allow us to “retire” outdated GIMS (i.e. GIM 6, GIM 14, GIM 18, GIM 26)

*Guide for PIs/Departments on Internal Control measures in development.

GIM 13: FACILITIES AND ADMINISTRATIVE (F&A) RATES

GIM 13 policy: Sponsored programs must include full negotiated rate unless one of the exceptions listed in GIM 13 applies or a waiver is approved.

UG requires that agencies accept the negotiated rate of non-federal entities (grantees) unless - -

The agency documents the F&A rate cap in the Funding Opportunity Announcement (FOA) and agency notified OMB of the intent to cap the F&A rate.

As a result of UG requirement, OSP does not intend to approve F&A waiver requests on Federally funded/Federal flow-through programs. Agency must comply with UG.

GIM 21: Cost Share on Sponsored Programs Cost-share allowed when:

It is a mandatory requirement of sponsor. Federally sponsored and included in the FOA is

criteria agency will use during merit review to consider cost-share commitment.

Non-Federally sponsored, to extent permitted and necessary due to the competitive nature of the program.

Waived F&A cannot be used as cost-share on a sponsored program without prior sponsor approval.

GIM 23: Sponsored Program Costing policy All costing principles remain unchanged: Direct versus

indirect; all costs must be necessary, reasonable, allocable and provided consistent treatment.

Prior approvals are required for certain costs (see list in UG, summarized on GCA website), including:

Admin/clerical costs Participant support costs

GIM now recognizes that costs normally recovered under F&A may be directly charged to non-Federally sponsored programs if permitted by the sponsor’s policies or otherwise approved by the sponsor.

GIM 39: Closeout of Sponsored Programs Broadened to apply to all sponsored program closeout activity:

OSP will continue to use reports generated from SPAERC to send our notifications to campus: Will continue to be a report of Federally funded programs GIM 39 will apply to any severely delinquent sponsored

program, no matter the sponsor, if OSP made aware of the delinquency.

GCA will continue to send Notice of Expiration

All expenditures must be liquidated by 90 days past the end date of the sponsored program:

This will require heightened vigilance around getting invoices submitted/received in a timely manner.

New GIM: Subrecipient Monitoring

UG requires monitoring of subrecipients: Risk assessment/evaluation Decision making on inclusion of specific

terms and conditions in subaward Monitoring on-going subrecipient activity:

Performance goals achieved In compliance with subaward terms (e.g.

timeframe, scope of work, budget) In compliance with regulations (e.g. costing

policy, SFI, animal use, humans subject activity)

Subrecipient Monitoring, continued GIM includes minimum monitoring steps required at the project level,

e.g.:

o Receipt of regular progress reportso Approval/rejection of subrecipient’s invoice based on criteriao Tracking of cumulative totals of subaward invoiceso Delegation of authority relevant to approval of subrecipient

materials is documented

GIM includes central processes implemented to assess and monitor at the central level (e.g. OSP):

o Use of a risk assessment toolo Issuance of a management decision, when necessaryo Initial and annual certifications required of subrecipient o Imposition of conditions in subaward, such as increased frequency

of reportingo Withholding approval of a BPO in the ARIBA system.

Subrecipient Monitoring, continued Additional monitoring steps may be

imposed, depending on risk assessment.

GIM gives OSP authority to require a documented subrecipient monitoring plan signed by the PI prior to issuance of the subaward.

Additional tools, resources being developed and a class on Subrecipient Monitoring is being revised and updated.

QUESTIONS?

THE END