GRANTS FINANCE & ADMINISTRATION SERVICES Cost Allocation Services U.S. Department of Health & Human Services Presenters Darryl Mayes, Deputy Director, Cost Allocation Services Michael Leonard, College & University National Specialist, Cost Allocation Services NATIONAL ASSOCIATION OF COLLEGE COST ACCOUNTANTS October 5, 2017

SECRETARY ASSISTANT SECRETARY FOR FINANCIAL RESOURCES (ASFR) ASSISTANT SECRETARY FOR ADMINISTRATION (ASA) PROGRAM SUPPORT CENTER (PSC) SHARED SERVICES PRviDER

PROGRAM SUPPORT CENTER PSC RLO FMP FOH GFAS CAS

OTHER - FEDERAL SHARED SERVICES PSC is one of ten Federal Shared Service Providers providing services to U.S. agencies. NACCA - BETHESDA Oct 5, 2017 3

Real Estate, Logistics & Operations Financial Management & Procurement Occupational Health Real Estate, Logistics & Operations Procurement Management Accounting Services Cost Allocation Services Financial Reporting Payment Management Services Acquisition Management Enterprise Support Facilities Management Warehouse and Logistics Real Property Management Freedom of Information Act Mail & Publishing Transportation Customer Care Behavioral Health Clinical Health Environmental, Health and Safety Wellness and Health Promotion NACCA - BETHESDA Oct 5, 2017 4

DIRECTOR: GARY KOTOUCH COST ALLOCATION SERVICES Director: Arif “Mak” Karim 214-767-3600 --- (Dallas, TX) Arif.Karim@psc.hhs.gov Deputy Director: Darryl Mayes 301-492-4852 --- (Bethesda, MD) Darryl.Mayes@psc.hhs.gov GRANTS, FINANCE AND ADMINISTRATION SERVICES DIRECTOR: GARY KOTOUCH NACCA - BETHESDA Oct 5, 2017 6

BRANCH CHIEFS STATE, LOCAL & COLLEGES & UNIVERSITIES TRIBAL GOVERNMENTS NON-PROFITS AND HOSPITALS Michael Stack Matthew Dito Patrick Smith New York/Dallas Dallas San Francisco 212-264-0944 214-767-3764 415-437-7834 Michael.Stack@psc.hhs.gov Matthew.Dito@psc.hhs.gov Patrick.Smith@psc.hhs.gov Naomi Tamashiro Louis Martillotti Steven Zuraf Bethesda/San Francisco New York Bethesda / Dallas 415-437-7822 212-264-0918 301-492-4858 Naomi.Tamashiro@psc.hhs.gov Louis.Martillotti@psc.hhs.gov Steven.Zuraf@psc.hhs.gov NACCA - BETHESDA Oct 5, 2017 13

Mission Statement Cost Allocation Services (CAS) is committed to providing the highest level of indirect cost rate and cost allocation plan negotiation services to Federal Departments and Agencies where HHS is designated by OMB as the cognizant Federal Agency. We will be the Agency of choice for providing technical guidance and assistance regarding the development of indirect cost rates and cost allocation plans. Our professional staff is recognized for their technical knowledge and professional expertise. Although CAS represents the Federal Government during negotiations and has a fiduciary responsibility to protect the public funds, we will be fair, reasonable and equitable when communicating and negotiating with the grantee community. NACCA - BETHESDA Oct 5, 2017 12

CAS NEGOTIATES AND ISSUES RATE AGREEMENTS SWCAPS PACAPS STATE DEPARTMENTAL IDC RATES F/A RATES IDC RATES FOR NP’S PATIENT CARE RATES FOR HOSPITALS FB RATES APPROVE CASB’s DISCLOSURE STATEMENTS DS-1 AND DS-2 NEGOTIATE RATES FOR NON-HHS ENTITIES HUD/DOT/DHS/FEMA/USDA ETC NACCA - BETHESDA Oct 5, 2017 15

OMB – UNIFORM GUIDANCE – HIGHLIGHTS F&A RATE EXTENSIONS AND REQUIRED DOCUMENTATION APPENDIX III, A.1.a.(3) – SALARIES ABOVE HHS/NIH STATUTORY LIMITATION – INCLUSION IN MTDC BASE HOSPITAL COST PRINCIPLES 45 CFR PART 75 – ARE NOT PART OF 2 CFR 200 UG OLD HOSPITAL COST PRINCIPLES WERE MOVED TO 45 CFR PART 75 APPEND IX – NO CHANGES WERE MADE – INTEREST IS UNALLOWABLE, WAIVER REQUEST. NACCA - BETHESDA Oct 5, 2017 16

INDIRECT COST POOL As defined in the Uniform Guidance (UG) §200.56, indirect costs include (but not limited to) costs such as: Operations and Maintenance Rent Depreciation Interest Library General & Administrative Student Services These costs cannot be readily attributed to a specific program or grant award because they are shared across all programs. NACCA - BETHESDA Oct 5, 2017 22

Frequently Asked Questions Updated: July 2017 Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards -- At 2 CFR 200 24 New and 4 Revised FAQS NACCA - BETHESDA Oct 5, 2017 17

Frequently Asked Questions 200.33-1 Capitalization Level for Software Updated: July 2017 200.33-1 Capitalization Level for Software Maximum capitalization level of $5,000 applies to software purchased with initial hardware. NACCA - BETHESDA Oct 5, 2017 18

Frequently Asked Questions 200.33-1 Capitalization Level for Software Updated: July 2017 200.33-1 Capitalization Level for Software It does not include internally developed software projects which are to be capitalized in accordance with GAAP for financial statement purposes. (PANEL Q) NACCA - BETHESDA Oct 5, 2017 19

45 CFR PART 75 - SIGNIFICANT CHANGE/S § 75.414 (f) Any non-Federal entity, except States, Local governments and Indian Tribes, that have never received a negotiated indirect cost rate may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) indefinitely. (f) Any non-Federal entity that has a current federally negotiated indirect cost rate may apply for a one-time extension of the rates in that agreement for a period of up to four years. Requires Cognizant agency approval Adequate Documentation May not request a rate review until extension ends NACCA - BETHESDA Oct 15, 2017 23

FAQ - Appendix III – 3: Salaries above the HHS/NIH Statutory Limitation – Inclusion in MTDC Base* Appendix III, A. 1.a.(3) states: “Only mandatory cost sharing or cost sharing specifically committed in the project budget must be included in the organized research base for computing the indirect (F&A) cost rate or reflected in any allocation of indirect costs. Salary costs above statutory limits are not considered cost sharing.” > Policy has not changed in this area. Salary costs above the NIH salary limitation are not cost sharing amounts. These costs are unallowable costs. Unallowable costs must be included in the appropriate MTDC cost base. Therefore the salary in excess of the NIH salary limitation must be included in the appropriate base for the F&A rate calculation according to where the individual effort was performed. These costs may not be considered voluntary uncommitted cost sharing and eliminated from the base. NACCA - BETHESDA Oct 15, 2017 24

How to Plan for a Better Negotiation Submit F&A Proposals timely and in accordance with the proposal checklist. Research our website for any updates -Best Practices Manual and FAQs. Submit your proposal via email rather than mailing it to ensure that it gets uploaded into our eFlow system for assignment. Contact your Field Office if you have any questions regarding your F&A Proposal or if there are any significant changes in operations outside of your DS-2. NACCA SAN ANTONIO Oct 8th, 2015

Submit to: CAS-SF@psc.hhs.gov CAS-Dallas@psc.hhs.gov EFLOW - ELECTRONIC SUBMISSION OF F&A AND FB PROPOSALS Submit to: CAS-SF@psc.hhs.gov CAS-Dallas@psc.hhs.gov CAS-Bethesda@psc.hhs.gov CAS-NY@psc.hhs.gov 35MB email limit, may have to send Financial Statements and the F&A Proposal separately if you reach the limit. NACCA - BETHESDA Oct 5, 2017 14

Questions ??? NACCA - BETHESDA Oct 15, 2017 25