Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards Presented by: Belinda Rinker, JD Senior policy analyst Office of Head Start belinda.rinker@acf.hhs.gov

New Fiscal Regulations OMB Uniform Guidance - Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards 2 CFR 200 Department of Health and Human Services Implementing Regulations 45 CFR Part 75 Office of Head Start

The Uniform Guidance The Super Circular The Omni Principles

Objectives of the Uniform Guidance Focusing on performance over compliance for accountability Limiting allowable costs to make best use of federal resources Strengthening oversight Targeting waste, fraud, and abuse Eliminating duplicative and conflicting guidance It is important to note that the regulations focus on performance as opposed to compliance. In substance, the Uniform Guidance tells us that funds must be both properly spent and used wisely in a way that accomplishes their intended purpose. Office of Head Start

Who is covered? Non-Federal Entities (NFE) (recipients and sub recipients) that expend at least $750,000 in federal funds during the fiscal year: State governments Local governments Indian tribes Institutions of higher education Nonprofit organizations Agencies may apply the requirements to for- profit entities. HHS/ACF/OHS has not done so to date. It is important to note that the regulations focus on performance as opposed to compliance. In substance, the Uniform Guidance tells us that funds must be both properly spent and used wisely in a way that accomplishes their intended purpose. Office of Head Start

Current regulations provide detailed guidance specific to entity type. New regulations provide less detail and more grantee options. Previous regulations had a lot of detailed information about how to comply. Like different speed limits for day, night, trucks, school zones, flashing lights for hazards. New regulations are much less prescriptive and aim toward reasonableness. Will work well for otherwise high functioning grantees, but others may end up in the fiscal ditch. What is different?

Eliminates Duplicative and Conflicting Regulations 2 CFR 200 Replaces 45 CFR Part 75 Replaces Audit Circulars for: Awards received A-102 & A-89 A-87 A-133 & A-50 Subawards to universities A-110 A-21 Subawards to nonprofits Cost Principles 2 CFR 215 2 CFR 220 2 CFR 225 2 CFR 230 HHS Grants Administration Requirements 45 CFR Part 74 45 CFR Part 92 This slide shows the many regulations that are superseded by the new Uniform Guidance. Eliminates Duplicative and Conflicting Regulations

Guidance to assist grantees in planning for implementation Guidance to assist grantees in planning for implementation. Click here to access the IM on ECLKC. The OHS has provided resources for awardees to assist in implementing the new Uniform Guidance. You can access them on the Early Childhood Knowledge and Learning Center (ECLKC). See Information Memorandum 14-07… ACF-IM-HS-14-07 Issued December 17, 2014

Presenters: Ann Linehan, OHS Terry Ramsey, HHS Belinda Rinker, OHS Jim Belanger, Danya Click here to access Webinar and Q & A on ECLKC. And the Webinar and Q & A also found on ECLKC. Originally presented on February 10, 2015

Additional Resources Uniform Administrative Requirements, Cost Principles, and Audit Requirements 2 CFR Part 200 Frequently Asked Questions for New Uniform Guidance at 2 CFR 200 (COFAR/OMB) Council on Financial Assistance Reform (COFAR) website Link to the HHS implementing regulations 45 CFR Part 75 (full explanation) and regulations only American Institute of Certified Public Accountants (AICPA) Government Accounting Quality Center (GACQ) website A thorough understanding of the reasons for change is critical for thoughtful implementation. It is important to take the time to fully understand the background and context of the Uniform Guidance, which will help in implementing necessary changes in your program. Office of Head Start

Uniform Guidance on ECLKC http://eclkc.ohs.acf.hhs.gov/hslc/standards/ug- resources 1. Get familiar with the definitions in the Uniform Guidance, which are all grouped in Section 75.2. Cost allocation is especially important and cost allocation plans and proposals under the Uniform Guidance require certification by the agency. Indirect costs are broken down by agency types and included in appendices to the Uniform Guidance. The de minimis rate, available only to agency’s that have never had a negotiated indirect cost rate, is new to the Uniform Guidance. Procurement language and thresholds have changed, and Part 75 allows a year for transition to full compliance for procurement policies and procedures. Don’t forget the individual items of cost, several of which have changed in the Uniform Guidance. Look carefully at the contract provisions required in Appendix II of Part 75. Office of Head Start

Current Fiscal Policies and Procedures Planning for Change No Change Working well for the organization and no efficiency gained or high cost associated with making changes. May Change Working for the organization, but change is likely to increase efficiency or effectiveness or both. Must Change Is not compliant with the Uniform Guidance and Part 75. Current Fiscal Policies and Procedures Consider a three level approach. Initially address any areas of your fiscal policies and procedures that are not compliant with the Uniform Guidance. The consider where you may have greater flexibility in the Uniform Guidance and changes that may make your fiscal operations more efficient and effective. In the third category, don’t rush to change what remains compliant and works well for your organization. Office of Head Start

Look Closely At: Definitions Cost Allocation Indirect Costs Compensation (personal services & fringe benefits) Indirect Costs Negotiated indirect cost rate De minimis rate of 10% In the cost allocation plan Procurement Less than $3,000 (micro-purchases) $3,000 - $149,999 (small purchases) $150,000 or more Individual items of cost Contract provisions 1. Get familiar with the definitions in the Uniform Guidance, which are all grouped in Section 75.2. Cost allocation is especially important and cost allocation plans and proposals under the Uniform Guidance require certification by the agency. Indirect costs are broken down by agency types and included in appendices to the Uniform Guidance. The de minimis rate, available only to agency’s that have never had a negotiated indirect cost rate, is new to the Uniform Guidance. Procurement language and thresholds have changed, and Part 75 allows a year for transition to full compliance for procurement policies and procedures. Don’t forget the individual items of cost, several of which have changed in the Uniform Guidance. Look carefully at the contract provisions required in Appendix II of Part 75. Office of Head Start

Critical Questions Are you aware of the new Uniform Guidance? Have you determined when you must comply with the Uniform Guidance for each award? Have you compared the Uniform Guidance requirements to your existing fiscal policies and procedures? Were necessary changes in fiscal policies and procedures made? Has implementation of changes begun, including training for impacted staff? Were the revised fiscal policies and procedures approved by the Governing Body and Policy Council? It is important to note that the regulations focus on performance as opposed to compliance. In substance, the Uniform Guidance tells us that funds must be both properly spent and used wisely in a way that accomplishes their intended purpose. Office of Head Start

Questions and Comments The OHS has provided resources for awardees to assist in implementing the new Uniform Guidance. You can access them on the Early Childhood Knowledge and Learning Center (ECLKC). See Information Memorandum 14-07…