SUBTLE AND NOT-SO-SUBTLE UNIFORM GUIDANCE CONTENT - THAT WILL ROCK YOUR GRANT WORLD - Grants ...
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SUBTLE AND
NOT-SO-SUBTLE
UNIFORM GUIDANCE
CONTENT
THAT WILL ROCK YOUR GRANT WORLD
FEBRUARY 25, 2019 / 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 new and changed requirements in UGG
warrant overhauling our 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.
Your attendance here is already
a sign of stronger internal controls!
© 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 over
the years – they are just clarified, interpreted differently,
or treated more consistently
• Influence of published audit reports
• Agency guidance
• Updates to UGG, agency policies, and program
guidelines
Caution: Today’s interpretation may change tomorrow –
when making compliance decisions, consider following
the most restrictive rule/interpretation to reduce risk.
© Thompson Grants, a division of CBIS | 4Compliance Challenges
◆ Rarely are there absolute answers – “it depends” on
organizational policies and procedures as well as the
individual situation in question.
◆ To be “audit ready,” organizations need to be able to
justify (and document in writing) the decisions they
have made in terms of interpreting the regs.
◆ Organizations need to have the collective knowledge to
understand what the regs say (and what they don’t say)
in order to make compliant decisions.
Are your policies and procedures set up to seek out and
leverage your organization’s collective knowledge?
© 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 12/26/14.
• If your organization took advantage of the previous
procurement implementation waiver that was
allowed, that waiver period is over - UGG procurement
standards are now fully in effect!
◆Supersedes previous OMB-based guidance/rules/regs
on pre-award, post-award, closeout, and audit (e.g.,
OMB Circulars A-133, A-21, A-110).
© 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 subaward 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 Circulars A-102, A-110)
◆ Subpart E – 200.400 – 200.475 - Cost Principles (replaced
OMB Circulars 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)
See Section 314 of the Federal Grants Management Handout
© Thompson Grants, a division of CBIS | 8Subpart A –
Acronyms and Definitions
◆ 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…comparable terms are still
commonly used, such as:
• Grantee/Subgrantee;
• Prime Recipient/Lower-tier Recipient;
• Vendor.
Using the official terms increases consistency,
which minimizes the risk of misinterpretation!
© 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 administrative
responsibilities as the Federal awarding agency does when
overseeing grants and making subawards.
◆ 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 about UGG 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 | 12Clarification: 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 | 13NFE/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 being consistent in your
use of terms and not issuing “contracts” to subrecipients!
© Thompson Grants, a division of CBIS | 14New 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
UGG acknowledgement of technological advances finally
brought the Federal grants process into the 21st Century!
© Thompson Grants, a division of CBIS | 15Indirect 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 | 16Internal 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
See Section 316 of the Federal Grants Management Handbook
© Thompson Grants, a division of CBIS | 17Internal Controls
◆ 200.79 Personally Identifiable Information (PII)
• New in UGG - Requires protection of nonpublic
information about individuals, determined on a case-
by-case basis
How does your organization define PII? What processes does
your organization follow when securing the personal
information of employees or clients? Is the process in writing? Is
it applied consistently? Does everybody know the process?
© Thompson Grants, a division of CBIS | 18Subpart B –
General Provisions
◆ 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.
The record retention window for some older grants (subject
to compliance with the old OMB circulars) may still be in
effect – who monitors this at your organization?
See Section 317 of the Federal Grants Management Handbook
© Thompson Grants, a division of CBIS | 19Subpart B –
General Provisions
◆ 200.109 Review date
• UGG will be reviewed (and potentially modified) at
least every 5 years!
◆ 200.112 Conflict of interest (see also 200.318 &
200.319)
• NFEs must have a written conflict of interest policy.
Some modifications/clarifications have already been made to
UGG; until a revised version is issued, check the UGG FAQs for
updated information (the latest update was issued in July 2017:
https://cfo.gov/wp-content/uploads/2017/08/July2017-
UniformGuidanceFrequentlyAskedQuestions.pdf.
© Thompson Grants, a division of CBIS | 20Exposing the Ugly Stuff
◆ 200.113 Mandatory disclosure (also see 200.328)
• 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 Award
Management).
https://www.sam.gov/portal/SAM/##11
What is “timely”?
© Thompson Grants, a division of CBIS | 21Subpart C – Pre-Award
◆ 200.203 Notices of funding opportunities
• (b) 60 calendar day turn-around...?
◆ 200.207 Specific conditions (formerly called “Special
Conditions”)
• Based on risk - different from “general terms and
conditions” (200.210(b))
◆ 200.210 Information contained in a Federal award
• (d) New in UGG - Federal Award Performance Goals
© Thompson Grants, a division of CBIS | 22Pre-Award Evaluation of Risk
◆ 200.205 Federal Awarding Agency Review of Risk
Posed by Applicants
• Before an NFE is awarded a grant, a risk review of
the organization is conducted by the awarding
agency.
• Typically conducted by the Grants division, not the
program office.
Remember: The NFE has the same responsibilities as the Federal
awarding agency when dealing with Subawardees. NFE/PTEs
should use 200.205 as a guide to conducting an evaluation of risk
for any subrecipients, however a PTE risk review is not required to
occur prior to issuing a subaward based on the July 2017 UGG FAQ.
© Thompson Grants, a division of CBIS | 23Subpart D – Post-Award
◆ 200.303 Internal controls
• Elaborates on definition of internal controls 200.61.
◆ 200.305 Payment
• New in UGG – advance payments must be deposited
in an insured account.
◆ 200.307 Program income
• New in UGG - Addition method is automatic for IHEs.
© Thompson Grants, a division of CBIS | 24Subpart D – Post-Award
◆ 200.308 Revision of budget and program plans
• New in UGG - Deleted previous indirect cost to direct cost
pre-approval requirement.
• New in UGG - Changed language – not just “absence,” but
“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 | 25Equipment 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 | 26New 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.
See Tab 440 of the Federal Grants Management Handbook
© Thompson Grants, a division of CBIS | 27New 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.
Economical purchase? Responsible contractor?
© Thompson Grants, a division of CBIS | 28Procurement 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 | 29Procurement 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 | 30Methods of Procurement
◆ 200.320
• Micro-purchases (orig max threshold: $3,000; NEW OMB Memo M-18-18
approved a $10,000 threshold by granting an exception to UGG for FY2018
effective 06/20/18 until UGG is revised to incorporate this change) – no
quotes required, but documenting comparison pricing is recommended in
order to justify reasonableness/allowability of the expense
• Small purchases – (up to the Simplified Acquisition Threshold; NEW OMB
Memo M-18-18 approved a $250,000 SAT threshold by granting an
exception to UGG for FY2018 effective 06/20/18 until UGG is revised to
incorporate this change) - quotes required
• Sealed bids (>$250,000 SAT) - award to the lowest price responsive bidder
• Competitive proposals (> $250,000 SAT) - price is one of several factors
• Noncompetitive proposals - justified sole source based on organizational
policy
Organizational procurement policies may be more restrictive, but not less
© Thompson Grants, a division of CBIS | 31New 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)
[$250,000], 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.
Cost analysis = Examining cost data for comparison
Price analysis = Deciding if the price is fair and reasonable
© Thompson Grants, a division of CBIS | 32Other 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.
Should = Recommended Best Practice -
put it in writing to minimize risk
© Thompson Grants, a division of CBIS | 33Other Administrative Issues
◆ 200.335 Methods for collection, transmission and
storage of information
• New in UGG – Federal grant recordkeeping is
officially in the electronic age!
◆ 200.339 Termination
• Federal awarding agencies must share terminations
via SAM (System for Award Management) – the “ugly
stuff” is now visible and accessible by all agencies!
© Thompson Grants, a division of CBIS | 34New 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 | 35Closeout
◆ 200.343 Closeout (impacts NFEs and NFE/PTEs)
• 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).
See Section 466 of the Federal Grants Management Handbook
© Thompson Grants, a division of CBIS | 36Subpart E – Cost Principles
◆ 200.414– Facilities and Administration (F&A)
• (f) New in UGG - 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 | 37Payroll Certification
(Time and Effort, PAR)
◆ 200.430 (i) Compensation – Personal Services –
Standards for Documentation of Personnel Expenses
◆ Big changes - Tight internal controls required, but no
more signatures or specified time frames!
◆ 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 | 38Payroll 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 | 39Dependent Care
◆ 200.432 Conferences
• New in UGG – providing local dependent care for
attendees
◆ 200.474 Travel costs
• (c) (1) New in UGG – temporary dependent care costs
for NFE employees attending grant-related
conferences
• Must be consistent with NFE policy.
© Thompson Grants, a division of CBIS | 40Subpart F - Audits
◆ 200.519 Criteria for Federal program risk
• How auditors identify risk.
• Helpful to know to ensure NFE 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 | 41Appendices
I – NOFO – Notice of Funding Opportunity contents
II – Contract Provisions – for NFE contracts made under Federal awards
III – IDC for IHEs – Higher education application process for an indirect
cost rate
IV – IDC for NPOs – Nonprofit application process for an indirect cost
rate
V – State/Local Cost Allocation – Identifying and assigning central
service costs
VI – Public Assistance Cost Allocation – separate requirements for grant
programs administered by state public assistance agencies
VII – IDC for State/Local/Indian Tribes – State & local govt and Indian
Tribe application process for an indirect cost rate
© Thompson Grants, a division of CBIS | 42Appendices
VIII – NPOs Exempted from Subpart E – List of nonprofits that do not
have to follow UGG Subpart E
IX – Hospital Cost Principles – Equivalent of UGG Subpart E for hospitals
(definition 200.52)
X – Data Collection Form – for audit reports
https://harvester.census.gov/facweb/default.aspx/
XI – Compliance Supplement – issued annually – link in UGG does not
work - 2019 version available at: https://www.whitehouse.gov/wp-
content/uploads/2018/05/2018-Compliance-Supplement.pdf
XII – Award Term and Condition for Recipient Integrity and Performance
Matters – System for Award Management (SAM) reporting required for
NFEs with active grants totaling >$10 million
© Thompson Grants, a division of CBIS | 43You can also read
