Uniform Guidance for Grants

1. Uniform Guidance for Grants Neither Uniform nor Guidance

2. Previous Grant Guidance • Separate regulations for different purposes and types of recipients • Institutions of Higher Education were subject to three separate OMB (Office of Management and Budget) circulars • Administrative Requirements (A-110) • Cost Principles (A-21) • Audits (A-133)

3. New Grant Guidance • Combines eight federal circulars into a single document to be used government-wide for managing financial assistance awards (grants and cooperative agreements)

4. Background of reform • 11/23/09 Executive Order 13520 on Reducing Improper Payments • 2/28/11 Presidential Memorandum on Administrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments • Better target financial risks and better direct resources to achieve evidence-based outcomes

5. Reform process • Council on Financial Assistance Reform (COFAR) established October 2011 • Interagency group of Executive Branch officials to coordinate financial assistance reform • Represents major funding agencies • Final guidance published in Federal Register 12/26/13 • Interim final rule published 12/19/14

6. Results • Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Final Rule • Super Circular / Omni Circular • OMB A-81 • Uniform Guidance (UG) • 2 CFR 200 (Code of Federal Regulations) • Each agency’s implementation

7. Effective Dates • New awards issued after December 26, 2014 subject to UG terms and conditions • Funding increments and modifications may also be subject to UG if the awarding agency considers this an opportunity to change award terms and conditions

8. Effective Dates • Audit requirements effective for fiscal years beginning after December 26, 2014 • Kent State FY 2016 (July 1, 2015 - June 30, 2016) • Implementation of procurement standards may be delayed one full fiscal year • Kent State FY 2017 (July 1, 2016 – June 30, 2017)

9. Does it apply? • During this time of transition watch award documents carefully for any changes • Sponsored Programs will be noting the applicability of Uniform Guidance terms on the fund request and/or spending plan for awards as they become effective

10. Uniform? • UG is intended to be a substantially uniform approach to federal funding administration. • Agencies may implement waivers or variances through their individual policies and procedures. • Exceptions throughout guidance for different types of recipients. • Imperative to pay attention to the terms of a specific award and the related guidance offered by the funding agency.

11. Agency-Specific Regulations • 12/19/14 Joint Interim Final Rule implements UG for all Federal award-making agencies (240 pages) • Incorporates UG into each agency’s regulations -- separate CFR reference • Includes OMB-approved exceptions for agencies • NSF implementation through policy

12. Guidance? • Guidance to federal agencies in their implementing regulations • Codified in Code of Federal Regulations at 2 CFR 200 and separately in each agency’s implementing regulations • Not optional

13. Guidance? • Language does allow for suggestions beyond regulations • Must indicates requirements • Should indicates best practices or recommended approaches

14. Pyramid of requirements Uniform Guidance

15. Outline of Uniform Guidance • Subpart A: Definitions • Subpart B: General Provisions • Subpart C: Pre-Award • Subpart D: Post Award • Subpart E: Cost Principles • Subpart F: Audit Requirements • Appendices I - XI

16. Significant Changes • Cost Sharing or Matching • Procurement • Subawards • Selected Items of Cost • Prior Approvals and Expanded Authorities

17. Cost Sharing or Matching • Voluntary committed cost sharing is not expected and cannot be used as a factor during the merit review of proposals • Criteria for considering voluntary cost sharing must be explicitly described in the notice of funding opportunity • Prior approval of agency must be given to use unrecovered indirect costs as part of cost sharing or matching

18. Procurement • Taken primarily from A-102 for State and Local Governments • Includes significant changes for Institutions of Higher Education • Grace period of one full fiscal year for implementation • Required by July 1, 2016 • Kent State will revised policies and procedures

19. Procurement Methods • Micro-purchase: ≤$3,000 • Small purchase: >$3,000 ≤$150,000 • Price or rate quotations must be obtained from an adequate number of qualified sources • Sealed bid: >$150,000 • Competitive proposal: >$150,000 • Noncompetitive proposal • Approval for sole source through Procurement

20. Procurement documentation • Must maintain records sufficient to detail the history of each procurement • Rationale for method • Selection of contract type • Contractor selection or rejection • Basis for contract price

21. Subrecipient vs. Contractor • Determination on case-by-case basis depending upon role in project • Subrecipient: purpose of carrying out portion of award; creates assistance relationship • Contractor: purpose of obtaining goods and services for non-Federal entity’s use in project • Substance of relationship more important than the form of agreement • Kent State checklist to determine

22. Pass-through Entity Requirements • Prime recipient is pass-through entity • Clearly identify each subaward with specific information about the prime award • Use subrecipient’s federally recognized indirect cost rate • 10% de minimus indirect cost rate for entities who have never had a negotiated rate • unless program statute limits

23. Pass-through Entity Requirements • Evaluate subrecipient’s risk of noncompliance • Determine appropriate monitoring • Kent State risk assessment • Monitor subrecipient activities • Review financial and programmatic reports • PI sign-off on invoices before payment • Verify and follow-up on annual audits • Additional steps when high risk

24. Cost Principles • Basic Considerations still the same • Allowable • Reasonable • Allocable • May seek prior written approval of awarding agency in advance of incurrence of special or unusual costs to avoid subsequent disallowance

25. Indirect (F&A) Costs • Negotiated rates must be accepted by all Federal awarding agencies • May use different rate for a class of awards only when one of the following • Required by Federal statute or regulation • Approved by agency head based on documented process • Pass-through entities must follow with subrecipient’s negotiated rate

26. Personal Services (personnel) • Reasonable for services rendered • Conform to written policy of non-Federal entity and consistently applied to all activities regardless of funding source • Standards for documentation less prescriptive • Effort Certification meets requirements • Cost share salaries must also be documented

27. Administrative/Clerical Salary • Generally indirect cost and should not be directly charged • May be directly charged if all criteria met: • Integral to project or activity • Involved individual(s) can be specifically identified with the project or activity • Explicitly included in approved budget or have prior written approval of awarding agency

28. Computing devices < $2,500 • May be directly charged if all criteria met • Essential and allocable to the project • Project does not have reasonable access to other devices or equipment that can achieve same purpose (not convenience/preference) • Items > $2,500 are considered equipment and follow equipment rules for direct charging • Include in proposed budget with justification or request through rebudget

29. Participant Support Costs • Allowable with agency prior approval • Not routinely included on research projects but may if an education or outreach component is included • Excluded from indirect costs • Agency approval needed before rebudgeting to another category

30. Visa Costs • Not previously addressed directly • Short-term travel visa costs allowable if all criteria met • Critical and necessary to project • Allowable by agency • Consistent with Kent State policies/practices • Different from long-term immigration visas

31. Prior Approvals • Expanded authorities were incorporated into research terms & conditions • Waiver of some prior approvals • Rebudgeting • Initial no cost extension • Pre-award costs • Not reflected in UG

32. Prior Approvals • Research terms & conditions working group updating to incorporate UG • No completion date at this time • Some prior approvals are waived in agency specific regulations but less comprehensive at this point

33. Kent State Implementation • Look for information provided on spending plan including applicability of UG • Include as much detail as possible in proposal budget and justification for agency approval • Indirect Cost Charge Exception Form • Institutional Prior Approval Form (IPAF) to request rebudget or other changes

34. Resources • COFAR https://cfo.gov/cofar • 2CFR200 http://www.ecfr.gov/cgi-bin/text-idx?SID=6530c2e6fcaebd23e97969e4cff841fb&node=pt2.1.200&rgn=div5 • OMB Circulars http://www.whitehouse.gov/omb/circulars

35. Questions? • Lori Burchard • lburchar@kent.edu • 330-672-7946 • Sponsored Programs • 330-672-2070 • Grants Accounting