SUBTLE AND NOT-SO-SUBTLE UGG CONTENT - THAT WILL ROCK YOUR GRANT WORLD FEBRUARY 7,2018/ SESSION 1 - Grants Compliance Expert
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SUBTLE AND
NOT-SO-SUBTLE
UGG CONTENT
THAT WILL ROCK YOUR GRANT WORLD
FEBRUARY 7,2018/ SESSION 1
P R E S E N T E D BY E L I Z A B E T H G O M B A S H
© Thompson Grants, a division of CBIS | 1Learning Objectives
Understand major similarities and differences between
the Uniform Grant Guidance and previous regulations.
Take a guided walk through UGG to learn recurring
themes and key areas that are currently attracting a lot
of attention from grantees and auditors.
Understand subtle and not-so-subtle changes in grant
regulations that are likely to impact operational
management.
Open your copy of UGG, and get your
highlighters, pens, and post-it flags ready!
© Thompson Grants, a division of CBIS | 2A Show of Hands - Between
Us…?
I have been working with Federal grants less than 5
years.
I believe that UGG contains enough new and changed
requirements that organizations need to overhaul their
previous/existing practices in order to be compliant.
My organization’s accounting and administrative
records are audit-ready today.
My organization’s programmatic performance records
are audit-ready today.
© Thompson Grants, a division of CBIS | 3Compliance Challenges
Never as clear as you want them to be
• Regulatory jargon
• Multiple info sources
Interpretations continuously evolve
• Most of the “rules” haven’t changed significantly –
they are just interpreted differently
• Influence of published audit reports
• Agency guidance
• Updates to UGG, agency policies, and program
guidelines
Caution: Today’s interpretation may
change tomorrow – consider following the
most restrictive rule/interpretation.
© Thompson Grants, a division of CBIS | 4Compliance Challenges
Rarely are there absolute answers – “it depends” on
institutional policies and procedures as well as the
individual situation in question.
Institutions need to be able to justify (and document in
writing) the decisions they have made in terms of
interpreting the regs.
Institutions need to have the knowledge to understand
what the regs say (and what they don’t say) to make
compliant decisions.
© Thompson Grants, a division of CBIS | 5What You Should Already
Know About UGG 2 CFR 200
Issued 12/26/13; in effect at the start of the first
organizational fiscal year following 12/16/14.
• Exception: IHE procurement waiver through
06/30/18 with conditions.
Supersedes previous OMB-based guidance/rules/regs
on pre-award, post-award, closeout, and audit.
© Thompson Grants, a division of CBIS | 6Recurring Themes in UGG
Consistency of terminology and regulations impacting
state and local governments, institutions of higher
education, nonprofits, and Indian tribes.
Increased emphasis on improving performance, in
addition to financial and administrative compliance
(ensuring integrity).
Increased decision-making and task responsibility
placed on grant recipients.
More “must,” less “shall.”
© Thompson Grants, a division of CBIS | 7Come, Take a Brisk Walk
With Me…
Subpart A – 200.0 – 200.99 - Acronyms and Definitions
Subpart B – 200.100 – 200.113 - General Provisions
Subpart C – 200.200 – 200.213 - Pre-Federal Award
Requirements and Contents of Federal Awards
Subpart D – 200.300 – 200.345 - Post Federal Award
Requirements (replaced OMB Circular A-102, A-110)
Subpart E – 200.400 – 200.475 - Cost Principles (replaced
OMB Circular A-21, A-87, A-122). Note: Cost Principles for
Hospitals are addressed in UGG Appendix IX
Subpart F – 200.500 – 200.520 - Audit Requirements
(replaced OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations)
© Thompson Grants, a division of CBIS | 8Subpart A
200.69 Non-Federal Entity (NFE) – A state, local
government, Indian tribe, institution of higher
education (IHE), or nonprofit organization that carries
out a Federal award as a recipient or subrecipient.
200.74 Pass-Through Entity (PTE) – An NFE that
provides a subaward to a subrecipient to carry out part
of a Federal program.
Why are these terms important?
© Thompson Grants, a division of CBIS | 9More Responsibilities Placed
on NFEs and PTEs
In essence, there are now only three broad categories
of entities involved in Federal grants:
• Federal awarding agency;
• NFE; and
• Contractor.
But old habits die hard…you need to understand
comparable terms still commonly used, such as:
• Grantee/Subgrantee;
• Prime Recipient/Lower-tier Recipient;
• Vendor.
Does your organization understand the importance
of officially using updated UGG terminology? Using
the correct terms minimizes risk!
© Thompson Grants, a division of CBIS | 10More Responsibilities Placed
on NFEs and PTEs
Throughout UGG there is language directing NFEs to act as
the Federal awarding agency would. All NFEs must be
prepared to assume the same pre-award and post-award
administrative responsibilities as the Federal awarding
agency does when awarding and overseeing grants.
If you are a PTE, you are an NFE, as is any Subrecipient.
NFEs must follow all grant rules and regs. UGG does not
apply to Contractors unless the NFE incorporates specific
language into the agreement instrument.
© Thompson Grants, a division of CBIS | 11Speaking of Contractors…
200.22 Contract – A legal instrument by which an NFE
purchases property or services needed to carry out the
project or program under a Federal award.
200.23 Contractor – An entity that receives a contract
as defined in 200.22 Contract.
The term “Vendor” does not exist in UGG.
© Thompson Grants, a division of CBIS | 12Can an Employee also be a
Contractor/Consultant?
Generally, no.
However, look at terminology carefully: Subpart E –
200.430 (h)(3) Intra-Institution of Higher Education
Consulting allows:
• “consultation across departmental lines.”
• “work performed by the faculty member in addition to his or
her regular responsibilities.”
If compensation for the intra-institutional “consultation” work is
included in the Employee’s W-2 form, then the individual should
be classified as an Employee, not a Consultant/ Contractor.
© Thompson Grants, a division of CBIS | 13Clarification: Grants vs.
Contracts
200.51 Grant Agreement – A legal instrument of
financial assistance between a Federal awarding
agency or PTE and an NFE that is used to enter into a
relationship the principal purpose of which is to
transfer anything of value from the Federal awarding
agency or PTE to the NFE to carry out a public purpose
authorized by a law of the US, and not to acquire
property or services for the Federal awarding agency or
PTE’s direct benefit or use.
Emphasizes the difference in purpose
between a grant and a contract.
© Thompson Grants, a division of CBIS | 14NFE and PTE Subawards
200.92 Subaward – An award provided by a PTE to a
subrecipient for the subrecipient to carry out part of a
Federal award received by the PTE. It does not include
payments to a contractor or payments to an individual
that is a beneficiary of a Federal program. A subaward
may be provided through any form of legal agreement,
including an agreement that the PTE considers a
contract.
Clarifies the difference between a subrecipient and
a contractor, no matter what the organization calls
the agreement instrument. Avoid risk by not issuing
“contracts” to subrecipients!
© Thompson Grants, a division of CBIS | 15A New Option
200.45 Fixed Amount Award – A type of grant
agreement under which the Federal awarding agency
or PTE provides a specific level of support without
regard to actual costs incurred under the Federal
award. This type of Federal award reduces some of the
administrative burden and record-keeping
requirements for both the NFE and Federal awarding
agency or PTE. Accountability is based primarily on
performance and results.
Most organizations are familiar
with fixed amount contracts, but
fixed amount awards are new.
© Thompson Grants, a division of CBIS | 16New Distinctions Impacting
Supplies/Equipment
Classify your purchases properly based on definitions
• 200.20 Computing devices
• 200.33 Equipment
• 200.48 General purpose equipment
• 200.58 Information technology systems
• 200.89 Special purpose equipment
• 200.94 Supplies
© Thompson Grants, a division of CBIS | 17Indirect Costs
200.56 Indirect (facilities & administrative - F&A) costs
(“overhead”)
• UGG Appendix III addresses indirect cost for
institutions of higher education (IHE).
• UGG Appendix IV addresses indirect costs for
nonprofit organizations (NPO, or sometimes NGO).
• UGG Appendix VI addresses indirect costs for
state/local government and Indian tribes.
© Thompson Grants, a division of CBIS | 18Internal Controls
200.61 Internal controls - provide reasonable
assurance regarding the achievement of objectives in
the following categories:
• Effectiveness and efficiency of operations
• Reliability of reporting for internal and external use
• Compliance with applicable laws and regulations
200.62 Internal control over compliance requirements
for Federal awards
• The “backbone” of UGG expectations
© Thompson Grants, a division of CBIS | 19Internal Controls
200.79 Personally Identifiable Information (PII)
• New - Requires protection of nonpublic information
about individuals, determined on a case-by-case
basis
© Thompson Grants, a division of CBIS | 20Subpart B
200.104 Supersession
• Any new or continuing award issued after UGG should
follow UGG; pre-UGG awards should have followed
the old OMB circulars.
200.105 Effect on other issuances
• Other than requirements based on statute (law), old
requirements are no longer applicable.
200.109 Review date
• UGG will be reviewed (and potentially modified) at
least every 5 years!
© Thompson Grants, a division of CBIS | 21Subpart B
200.112 Conflict of interest
• NFEs must have a written conflict of interest policy.
200.113 Mandatory disclosure
• NFEs must disclose, in a timely manner, in writing, to the
Federal awarding agency or PTE all fraud, bribery, or gratuity
violations potentially affecting the Federal award.
• Any award with terms and conditions that include reporting
integrity and performance (UGG Appendix XII) must report
certain civil, criminal, or administrative proceeding in SAM
(System for Awards Management).
What is “timely”?
© Thompson Grants, a division of CBIS | 22Subpart C
200.201 (b) Fixed Amount Awards
200.203 Notices of funding opportunities
• (b) 60 calendar day turn-around?
200.207 Specific conditions
• Based on risk - different from “general terms and
conditions” (200.210(b))
200.210 Information contained in a Federal award
• (d) Federal Award Performance Goals
© Thompson Grants, a division of CBIS | 23Pre-Award Evaluation of Risk
200.205 Federal Awarding Agency Review of Risk
Posed by Applicants
• Before NFE is awarded a grant, a risk review of the
organization is conducted by the awarding agency.
Remember: The NFE has the same responsibilities as the
Federal awarding agency when dealing with Subawardees.
NFEs should use this section as a guide to conducting a
pre-award evaluation of risk for any subrecipients.
© Thompson Grants, a division of CBIS | 24Subpart D
200.303 Internal controls
• Elaborates on 200.61.
200.305 Payment
• New – advance payments must be deposited in an
insured account.
200.307 Program income
• Addition method is automatic for IHEs.
© Thompson Grants, a division of CBIS | 25Subpart D
200.308 Revision of budget and program plans
• Deleted previous indirect cost to direct cost pre-approval
requirement.
• Changed language from “absence” to “disengagement”
for over 3 months (or 25% reduction in time devoted to
the project) by Project Director/Principal Investigator.
200.313 Equipment
• Title normally vests with the NFE (subject to conditions),
but the Federal awarding agency may elect to make the
title itself conditional.
© Thompson Grants, a division of CBIS | 26Equipment Inventory Control
Not new, but a common risk.
200.313 Equipment – (d) Management requirements –
Procedures for managing equipment, whether acquired
in whole or in part under a Federal award, must meet
requirements until disposition:
• Property records – description, serial or other ID number,
funding source (including FAIN), title holder, acquisition date,
cost, % of Federal participation, location, use and condition,
and disposition data.
• Physical inventory at least every two years.
© Thompson Grants, a division of CBIS | 27New Procurement Standards
200.318 General Procurement Standards
• NFE must follow its own procurement policies
• NFE must maintain oversight to ensure that contractors
perform in accordance with the terms, conditions, and
specifications of their contracts.
• NFE must maintain written standard of conduct,
including conflict of interest policy.
• NFE must neither solicit nor accept gratuities, favors, or
anything of monetary value from Contractors/
subcontractors.
To be audit-ready, the NFE should have a written
policy/procedure that defines monetary value.
© Thompson Grants, a division of CBIS | 28New Procurement Standards
200.318 (continued)
• NFE must avoid acquisition of unnecessary or
duplicative items – focus on “economical
purchases.”
• NFE must award contracts only to responsible
contractors possessing the ability to perform
successfully. Considerations: contractor integrity,
compliance, record of past performance, financial
and technical resources.
Challenge: What written guidance should an
NFE have in place to define an “economical
purchase” or a “responsible” contractor?
© Thompson Grants, a division of CBIS | 29Procurement Competition
200.319 - All procurement transactions must be
conducted in a manner providing full and open
competition. Situations include but are not limited to:
• Unreasonable qualification requirements.
• Requiring unnecessary experience and excessive
bonding.
• Noncompetitive pricing practices.
• Noncompetitive contracts to consultants that are on
retainer contracts.
© Thompson Grants, a division of CBIS | 30Procurement Competition
200.319 (continued):
• Organizational conflicts of interest.
• “Brand name” instead of allowing “an equal”
product.
• Any arbitrary action in the procurement process.
NFE must have written procedures for procurement
transactions.
© Thompson Grants, a division of CBIS | 31Methods of Procurement
200.320
• Micro-purchases
• Small purchases
• Sealed bids
• Competitive proposals
• Noncompetitive proposals
© Thompson Grants, a division of CBIS | 32Methods of Procurement – the
“Bear Claw” - UGG Attachment 1
© Thompson Grants, a division of CBIS | 33New Procurement Standards
200.323 Contract Cost and Price
• NFE must perform a cost or price analysis in
connection with every procurement action in excess
of the Simplified Acquisition Threshold (200.88)
[currently $150,000], including contract
modifications.
200.324 Federal Awarding Agency or PTE Review
• NFE must make available (upon request) technical
specs, RFPs, invitations for bids, or independent
cost estimates on proposed procurements.
© Thompson Grants, a division of CBIS | 34Other Administrative Issues
200.328 Monitoring and reporting program
performance
• (d) NFE must report to Federal awarding agency or
PTE any “significant” problems or favorable
developments “as soon as” they become known.
200.330 Subrecipient and contractor determinations
• NFE should have a written process for making and
documenting determinations, with templates for
appropriate agreement instruments.
© Thompson Grants, a division of CBIS | 35Other Administrative Issues
200.332 Fixed amount subawards
• Not the same as fixed amount contracts.
200.335 Methods for collection, transmission and
storage of information
• New – Federal grants are officially in the electronic
age!
200.339 Termination
• Federal awarding agencies must share terminations
via SAM – grant implications across agencies!
© Thompson Grants, a division of CBIS | 36New Details on Subrecipient
Monitoring
200.331(d-h) Requirements for PTEs - NFE must
conduct Subrecipient monitoring that includes:
• Review of financial & performance reports
• Follow up on deficiencies (e.g., corrective action)
• Issue management decisions
• Provide training
• Consider results of audits and reviews
• Consider taking enforcement action
NFE must have a written policy on Subrecipient
monitoring.
© Thompson Grants, a division of CBIS | 37Closeout
200.343 Closeout
• Liquidate all obligations, submit all final financial and
programmatic reports no later than 90 calendar days after the
end date of the period of performance.
• Prompt payments for allowable reimbursable costs.
• Promptly refund any balances of unobligated cash paid in
advance.
• Complete all closeout actions no later than one year after
receipt and acceptance of all required final reports (increased
pressure based on the GONE Act).
© Thompson Grants, a division of CBIS | 38Subpart E
200.430 Compensation – personal services
• Tight internal controls required, but not signatures!
200.432 Conferences
• New – providing local dependent care for attendees
200.474 Travel costs
• (c) (1) New – temporary dependent care costs for
conference attendees
• Must be consistent with NFE policy.
© Thompson Grants, a division of CBIS | 39Indirect Costs
200.414– Facilities and Administration (F&A)
• (f) Never received a negotiated indirect cost rate?
NFEs may use a 10% de minimus rate of modified
total direct costs (i.e., base excludes equipment,
capital expenditures, charges for patient care,
rental costs, tuition remission, scholarships and
fellowships, participant support costs, and the
portion of each subaward in excess of $25,000).
© Thompson Grants, a division of CBIS | 40Payroll Certification
(Time and Effort, PAR)
200.430 (i) Compensation – Personal Services –
Standards for Documentation of Personnel Expenses
NFEs must maintain written documentation that
accurately reflects the work performed by grant-funded
employees.
NFEs must establish a compliant payroll certification
process and follow it consistently.
© Thompson Grants, a division of CBIS | 41Payroll Certification
200.430 (i) Compensation – Personal Services –
Standards for Documentation of Personnel Expenses
(continued)
Payroll certification includes:
• Support by a system of internal controls.
• Incorporation into official NFE records.
• Reasonable reflection of the total activity for which the
employee is compensated by the NFE, not exceeding 100%.
• Compliance with established NFE accounting policies and
practices.
© Thompson Grants, a division of CBIS | 42Subpart F
200.519 Criteria for Federal program risk
• How auditors identify risk.
• Helpful for NFE to know to ensure audit readiness,
and when developing written procedures to assess
risk of subrecipients (200.205), and to monitor
subrecipients (200.331).
© Thompson Grants, a division of CBIS | 43Appendices
I – NOFO
II – Contract Provisions
III – IDC for IHEs
IV – IDC for NPOs
V – State/Local Cost Allocation
VI – Public Assistance Cost Allocation
VII – IDC for State/Local/Indian Tribes
VIII – NPOs Exempted from Subpart E
IX – Hospital Cost Principles
X – Data Collection Form
XI – Compliance Supplement
XII – Award Term and Condition for Recipient Integrity and Performance Matters
© Thompson Grants, a division of CBIS | 44Scenario
UGG does not require quotes or cost analyses on Micro
Purchases or Small Purchases.
All grant expenses are required to be allowable
(reasonable, allocable, necessary).
The Project Director of a grant wants to purchase a
piece of special purpose equipment that costs $750.
Questions:
• What information do you need to know to determine which
budget category to allocate this purchase to?
• Which budget category does this expense belong to?
• What written procurement procedure should be in place to
document that the purchase is reasonable, allocable, and
necessary?
© Thompson Grants, a division of CBIS | 45You can also read
