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Becky Musselman
Director, Office of Sponsored Programs Administration
[email protected] 515-294-7723
Neena Bentley
Manager, Sponsored Programs Accounting
[email protected] 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.