Download - OMB Circulars
OMB CIRCULA
RSNCURA FRA 2013
Pam WhitlockW Scott Erwin
EVERYTHING WE ARE ABOUT TO SAY…….
Will Change
Soon
OK…..
Well, not everything…. But a LOT will….
REWRITE OF THE CIRCULARS Directed by the President Executive Orders delivered January and
July, 2011 OMB created task force of major funding
agencies Initial draft for comment in early 2012 Final draft issued Feb, 2013
More to come
SO….
Here is where we are now….
THE BASIC TRIO A-21 Costs A-110 Systems A-133 Audit
Note: This guidance is directed at the Federal Agencies from OMB. The agencies in turn must require most recipients receiving funding to adhere to these restrictions.
A-21COST PRINCIPLES
Guidance on expenditures
Not all inclusive – a guide Allowable and unallowable
THE MOST REQUESTED FROM FACULTY
Alcoholic beveragesCommunication CostsCompensation for personal servicesEmployee morale, health and welfareMeals and EntertainmentMaterial and supplyMemberships, subscriptions, professional
activitiesProposal costsPublication and printing costs
PRUDENT PERSON TESTTHREE QUESTIONS
Reasonable?
Allowable? Allocable?
AND EVEN MORE IMPORTANT… Can you look yourself in the eye and say it’s necessary and related
Does it pass the “SMELL TEST” What happens if it is on the front page of the newspaper or headlines the local news?Anyone remember Muffin-Gate?
A-110ADMINISTRATIVE What we need to manage Pre-award guidance to agencies
Award instrumentsForms permissible“Eligible” recipients – debarment…Special award conditionsCerts and reps – annual basis encouragement
A-110 ADMINISTRATIVE Post-Award Requirements
Financial /Program Management standards Payment methods Cost sharing guidance Program Income Sponsor approvals Single Audit Period of availability of $$ Property/equipment standards vs supplies Procurement standards Reports and records Termination Closeout (After the Award)
FINANCIAL MANAGEMENTAccurate, current and complete
disclosure of financial resultsSource documents Identify source and application of
fundsControl over and accountability for
fundsWritten procedures – cash
managementWritten procedures – reasonable,
allocable, allowable
CASH MANAGEMENT Minimize time between transfer from
federal government and expenditure Paid in advance – institutional policy
and qualify Reimbursement if not – delinquent,
inadequate systems and procedures Advances in insured accounts if
possible Interest bearing accounts Must pay back interest >$250/year
COST SHARING/MATCHING Verifiable Not included in commitment to
another project Are necessary and reasonable for this
project Allowable under appropriate cost
principles Not federal funds Identified in the budget Valuation Current fair market value
PROGRAM INCOME Additive or Deductive Used to finance the non-Federal
share of the project If not specified, then deductive
EXCEPT RESEARCH Must be used during life of
project No obligation after end of project No obligation from royalties
BUDGETS Prior approval for
Change of scope Change in key personnel Absence >3 months/25%
decrease – PI Need for additional
funding Transfer of F&A/DC IF
REQUIRED BY SPONSOR Inclusion of costs that A-
21 requires approval Training allowances to
other categories New subagreement No other approvals
allowed unless approved by OMB
May be Waived – Expanded Authorities90 day pre-award
spendingOne time NCX
>12 monthsCarryforward of $For research
automatically waived unless specifically in award
PROPERTY Insurance – equal to
what institution does Real property Federally-owned Other
Title to recipient Use fee must be market
rate When no longer needed
That project Same agency Other federal agency Other users
Life of project That project Others – if doesn’t
interfere Same agency Other federal
agencies If federally owned,
need agency approval Program income May use as trade-in
PROPERTY MANAGEMENT Description Serial number, model number, etc Source of funding, including award # Title Acquisition date Information to calculate federal % Location Unit acquisition cost Ultimate disposal data Federally owned identified Physical inventory 2 years Control system to safeguard Adequate Maintenance Title to supplies – university < $5000 worth
REPORTS AND RECORDS Monitor subawards Performance reports – no more than quarterly or less frequent than annual
Annual 90 days after grant year Quarterly/semi annual – 30 days after reporting period
Final 90 days after termination
REPORT CONTENTS Comparison of actual/planned Reasons why established goals not met
Other info: analysis – cost overruns
No more than original and 2, if hard copy
Agencies may make site visits
TYPES 424 – Proposal related
425 – Financial ReportCombines 269, 269A, 270, 272, others
RECORD RETENTION Three years from date of submission
of final expenditure report unlessLitigation, claim, or audit is started prior
to thatReal property and equipment – 3 years
after dispositionRecords transferred to federal agency IG, CG, agency – access at any timePublic access mostlyIf you HAVE the records, they can be
audited
TERMINATION AND ENFORCEMENT Feds for cause Mutual agreement Recipient for convenience but feds
can decide if partial that what’s left won’t accomplish the grant purposes and they can terminate in entirety
Must be provided in any subagreements
CLOSEOUT Ninety days
Liquidate all obligationsRefund any balancesAccount for real and personal property
Fiscal and programmatic reports
CONTINUING RESPONSIBILITIES Right of feds to disallow costs and recover funds on later audit
Obligation to return any funds due as a result of late refunds, corrections, or other transactions
Audit requirements Property management requirements
Records retention
A-133AUDITS Non-federal entities that expend
>$500,000 in a year of federal awards
Can elect under certain circumstances to have programmatic audit
Less than $500K no audit but records must be available for review or audit
State or local – biennially Non-profit – some Can now access
http://harvester.census.gov/sac/to monitor subs
SUB RECIPIENT MONITORING Audit findings Compliance with flowed T&C’s
Access to records Fiscal reports Programmatic reports
INCREASED RISK Current/prior experience Subrecipients Technology Prior audit findings Oversight exercised by agencies/prime
Phase of a program in life cycle
CRITERIA FOR A LOW-RISK AUDITEE Single audits were performed
annually Auditor’s opinions on financials
were unqualified No deficiencies in internal controls
noted None of the federal programs had
audit findings from either internal controls or non-compliance
NOW TO THE GOOD STUFF….
Changes to the
Circulars
NEW CIRCULAR CHANGES (102-110) 1. Creating a consolidated, uniform set of
administrative requirements 2. Requiring pre-award consideration of each
proposal’s merit and each applicant’s financial risk
3. Requiring agencies to provide 90-day notice of funding opportunities
4. Providing a standard format for announcements of funding opportunities
5. Reiterating that information collections are subject to Paperwork Reduction Act approval
6. Additional Suggestions for Administrative Requirements
NEW CIRCULAR CHANGES (21, 87, 122)
1. Consolidating the cost principles into a single document, with limited variations by type of entity
2. For indirect (‘‘facilities and administrative’’ or f&a) costs, using flat rates instead of negotiated rates
3. Exploring alternatives to time-and effort reporting requirements for salaries and wages section
4. Revisions to reimbursements for utility costs to institutions of higher education
NEW CIRCULAR CHANGES (21, 87, 122) 5. Charging directly allocable administrative
support as a direct cost. 6. Including the costs of certain computing
devices as allowable direct cost supplies. 7. Clarifying the threshold for an allowable
maximum residual inventory of unused supplies.
8. Eliminating requirements to conduct studies of cost reasonableness for large research facilities.
9. Eliminating restrictions on use of indirect costs recovered for depreciation or use allowances.
NEW CIRCULAR CHANGES (21, 87, 122) 10. Eliminating requirements to conduct a lease-
purchase analysis for interest costs and to provide notice before relocating federally-sponsored activities from a debt-financed facility.
11. Eliminate requirements that printed ‘‘help-wanted’’ advertising comply with particular specifications.
12. Allowing for the budgeting for contingency funds for certain awards.
13. Strengthening requirements for all recipients to document cost accounting practices and provide necessary paperwork to auditors while eliminating cost accounting standards and requirement for institutions of higher education to file a disclosure statement.
NEW CIRCULAR CHANGES (21, 87, 122) 14. Allowing for excess or idle capacity for
certain facilities, in anticipation of usage increases.
15. Allowing costs for efforts to collect improper payment recoveries.
16. Specifying that gains and/or losses due to speculative financing arrangements are unallowable.
17. Providing non-profit organizations an example of the certificate of indirect costs.
NEW CIRCULAR CHANGES (21, 87, 122)
18. Providing non-profit organizations with an example of indirect cost proposal documentation requirements.
19. Additional ideas for cost principles
NEW CIRCULAR CHANGES (133) 1. Concentrating audit resolution and oversight
resources on higher dollar, higher risk awards. 2. Streamlining the types of compliance
requirements in the Circular A–133 Compliance Supplement
3. Strengthening the guidance on audit follow-up for Federal awarding
4. Reducing burden on pass-through entities and subrecipients by ensuring across-agency coordination.
5. Reducing burdens on pass-through entities and subrecipients from audit follow-up.
6. Additional ideas for audit requirements
NEW CIRCULAR CHANGES One additional idea for reform
suggested by many in the Federal agency and audit community was to reduce the amount of time for audit submission from the current nine months down to three months or six months. OMB supports this idea, but notes that it will require changes to legislation to accomplish.
NEW CIRCULAR CHANGES For more information:
http://www.regulations.gov/#!docketDetail;D=OMB-2013-0001
QUESTIONS
THANK YOU!
Pam Whitlock, Director Emeritus, UNC Wilmington
W Scott Erwin, Director, Texas State University-San Marcos