The Uniform Guidance Cost Sharing Training Presented to Faculty and Staff November 27, 2018 November 27, 2018

Agenda and Outcomes Agenda Introductions Background on the Uniform Guidance Cost Sharing Processes Roles and Responsibilities Key Takeaways Resources Outcome: After this training we expect that you should have an understanding of the Uniform Guidance and the changes to the regulations for cost sharing (also know as matching); you should know your responsibilities, and know where to find answers to any questions that may arise.

1. Background on The Uniform Guidance

Uniform Guidance Training Series Day One, Part One 11/10/2014 Background on Uniform Guidance Overview of Changes The Uniform Guidance includes a combination of: Current Language from Existing Circulars Revised Language of Existing Circulars New Language The final guidance which went into effect December 26, 2014 superseded requirements from: OMB Circulars A-21, A-87, A-110, and A-122 (which have been placed in 2 C.F.R. Parts 220, 225, 215, and 230), Circulars A-89, A-102, and A-133 The guidance in Circular A-50 on Single Audit Act follow-up What Changed? Combined 8 Circulars into 1 Adjusted and revised the language and added new language Granted greater flexibility to the recipient Placed greater emphasis on institutional policies and internal controls What Remained the Same? In many respects the guidance remains unchanged However, just the change itself will result in increased scrutiny because of the renewed awareness and focus

Uniform Guidance Training Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact EFFECTIVE DATES – EXISTING AWARDS & GUIDANCE Existing Awards Once the Uniform Guidance goes into effect for non-Federal entities, it will apply to Federal awards or funding increments after that date. It will not retroactively change the terms and conditions. Entities will likely make changes to their own policies and procedures that will impact their existing/older awards. Non-Federal entities wishing to implement entity-wide system changes to comply with the Uniform Guidance after the effective date of December 26, 2014 will not be penalized for doing so. TCNJ has adopted policies and procedures that impact existing awards. Pre-Existing Guidance The terms and conditions for Federal awards (i.e. 2 CFR 220, 225, and 230) always govern. The Uniform Guidance is now in effect, Federal agencies need to ensure the continued availability of access to the terms and conditions of Federal awards made prior to the Uniform Guidance becoming effective.

Uniform Guidance Traing Series Day One, Part One Overview of Uniform Guidance & Institutional Impact 11/10/2014 Post-award requirements - Cost sharing Establishes positive cost sharing policy, which limits when cost sharing can be required as well as eliminates voluntary cost share as a factor during the review of an application. Final OMB Uniform Guidance Institutional Impact and Implications Cost sharing can only be required when clearly defined in the funding opportunity notice. Voluntary committed cost sharing should not be used as a factor in the review of applications. Voluntary committed cost sharing is prohibited for Federal project proposals except where otherwise required by statute. Federally required institutional cost share will be limited. Institutions will have additional regulations-based support to discourage voluntary cost share commitments.

2. Cost Sharing

Administrative Requirements Cost Sharing Definition: The portion of project costs not borne by the sponsor. These costs are either born by the organization or potentially a third party. Can be direct costs or indirect costs (with agency approval) Must be necessary and reasonable Must meet criteria for allowable project costs, as outlined in the award notice, and must adhere to the Uniform Guidance cost principles (see Allowable Costs training at http://academicgrants.tcnj.edu/ug-training/) Not reimbursed by the sponsor and, therefore, must be supported by internal or external funds Total Project Costs Sponsor Paid Shared Recipient Org. Cost Share Third Party Cost Share

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Cost Share Types Mandatory Cost Sharing Required by sponsor as a condition of receiving the award Quantified in the proposal stage of the award Voluntary Committed Cost Sharing Not formally required by sponsor but proposed by the organization in addition to any awarded funds Cost sharing that is documented and quantified in the proposal This form of cost share may also be listed in the Award Notice Uncommitted Cost Sharing Represents additional effort or costs expended on the project that was not required by the sponsor Actual effort was more than the required cost share amount on the award or purchase cost more than budgeted cost share These additional costs must be funded by the cost share source or another approved source Both mandatory and voluntary committed cost sharing must be internally tracked and documented. TCNJ does not allow voluntary cost sharing.

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Cost Share Types Matching Requirement A type of cost sharing, where the organization will match the financial value of the sponsor’s grant to help fund that specific project Third-Party Contribution Costs that are borne by an external organization (i.e. individuals at another organization volunteer their time to support the project, or when another organization provides a grant to be used as cost share for a sponsored project Third party must state in writing that their contribution is cost share

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Requirements Organizational costs can be used to meet cost sharing requirements when they are: Verifiable to internal records (i.e. TCNJ chartfields and supporting documents) Not included as contributions for any other sponsored project Are necessary and reasonable for accomplishment of project or program objectives Allowable under cost principles, e.g. consistent treatment, allowability, allocability, reasonableness Are not paid by the Federal government under another sponsored project Provided for in the approved budget when required by awarding agency Conform to other provisions of the Uniform Guidance

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Requirements Sponsored project costs are not allowed to meet cost sharing commitments when they are: Volunteer/uncompensated faculty time Costs in support of organized research Sponsored project or sponsored project pass-through funds Incurred outside project dates Unallowable costs

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Cost Share tracking Cost share tracking requires the coordinated efforts of several award management teams and related processes throughout the grant lifecycle. Identification Approvals Pre-Award Management Post-Award Validation Reporting Closeout

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Requirements Organizations should have the following cost sharing materials in place: An organization-wide cost sharing policy Step-by-step documentation procedures Internal forms & sample documentation Electronic tracking of commitments Training

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Cost share tracking Strong organizational cost sharing controls include aspects from policies, procedures and additional forms of support: Policy Procedures Additional Support Organizational position on cost sharing Required internal approvals Required documentation and monitoring of third- party cost sharing Criteria for cost sharing Disallowed cost sharing within the organization Guidance on seeking agency approval Procedures for tracking and monitoring Description of forms for completion Role expectations Definitions of terms within organizational setting FAQs for application Contact information

Uniform Guidance Training Series Day 2 11/11/2014 Cost Sharing Uniform Guidance Impact Other cost sharing guidance new to Uniform Guidance includes: Depreciation on donated assets is permitted in accordance with 200.436 as long as the donated property is not counted towards cost sharing requirement (i.e. you can use either the donated property or depreciation as cost share). Depreciation on donated assets Clarified that “indirect costs on cost sharing or matching may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.” Indirect costs on cost sharing A fixed amount award cannot be used in programs which require mandatory cost sharing or match. Limitation on fixed amount awards Organizations will receive a consistent set of information for each Federal award they receive. Includes Total Approved Cost Sharing or Matching, where applicable. Consistent info in awards

3. Processes

Processes Examples of Cost Sharing requirements identified in a RFP: Principal Investigator (or other support personnel) identifies requirement for mandatory cost sharing or need to include voluntary cost share in sponsored award proposal. Examples of Cost Sharing requirements identified in a RFP: Award recipients must provide non-Federal matching funds at the rate of one non-Federal dollar. Up to one-half of the non-Federal match funds may be in the form of in-kind contributions but at least 50% of match must be in cash. All Mercer County History Grants require a cash match from the applying organization. GOS (General Operating Support) grants require a full cash match (1:1) from the applicant; no in-kind match is applicable for this award…. The cash match can come from any source except for funds from any division/department or other funding entity of the State of New Jersey.

Processes Cost Sharing Principal Investigator (or other support personnel) enters the amount and source of cost share in eGrants for approval by Office of Academic Grants and Sponsored Research (OAGSR) and the Dean. The source of cost share is entered in the Source of Funding box in eGrants when building the budget.

Processes Cost Sharing Dean or other institutional official committing funds to cover cost share commitments approves the proposal commitment. OAGSR reviews the cost share budget for accuracy and obtains written documentation of third-party cost share and approval from the Provost for all voluntary cost sharing before submitting proposal for funding. Example of third-party documentation:

Processes Cost Sharing If proposal is funded by sponsor, the PI, OAGSR and the Office of the Treasurer review the cost sharing requirements in the contract. Example:

Processes Cost Sharing The Office of the Treasurer sets up the cost share companion project budget to track cost share expenses accurately, and the Office of the Treasurer transfers funds from the identified funding source to the cost share companion budget. Principal Investigator (or other support personnel) conducts grant work and charges cost share expenses to appropriate cost share budget and verifies cost shared salary during regular effort verification process (see Compensation and Effort Verification training at http://academicgrants.tcnj.edu/ug-training/). The Office of the Treasurer, with the assistance of the Principal Investigator and project administrative support staff, reports cost share as required by the sponsor. Example report with cost share:

4. Roles and Responsibilities Please spend a couple minutes writing down the various people that have a role in this process and what you think their responsibilities are. We will come back as a group and discuss these together.

Roles and Responsibilities Principal Investigator Is Responsible for: Identifying cost sharing commitments, securing the appropriate institutional approvals for proposed cost sharing commitments, and making sure the cost sharing commitments are fulfilled during the course of the project. Ensuring all charges for cost share are properly accounted for in the established companion budget. Considering the administrative requirements and responsibilities inherent in the proposed cost sharing commitment and weigh the cost effectiveness and the expected benefits of the cost sharing. Providing written certification of in-kind matching support on a sponsored project. Directly charging cost sharing expenses to the companion project to ease in the reconciliation and reporting process.

Roles and Responsibilities Project Administrative Support Staff are Responsible for: Assisting Principal Investigator with identifying cost share commitments. Assisting Principal Investigator completing the approval forms to secure the institutional approvals required to include cost sharing in proposals. Assisting the PI in management of cost sharing by directly charging the companion project to ease in the reconciliation and reporting process.

Roles and Responsibilities Dean/Leadership Committing Cost Share are Responsible for: Reviewing eGrants cost sharing proposals and approving funding for all institutional cost share commitments. Provost/Dean Is Responsible for: Reviewing and approving all voluntary cost share commitments. Considering the significance of the cost share support to the overall mission of the institution and department when approving mandatory institutional cost share. Office of Academic Grants and Sponsored Research (OAGSR) is Responsible for: Consulting with the Office of the Treasurer on appropriateness and allowability of cost sharing commitments prior to proposal submission.

Roles and Responsibilities Office of The Treasurer is Responsible for: Establishing the cost share budget to track all cost shared expenses in the institutional financial system. The cost share budget shall have a unique Project ID (using the format Cxxxx, where “xxxx” corresponds to the sponsor-funded Project ID). Transferring funds from the pre-approved source(s) of funds to the Companion Project. Distributing effort verification forms to the Departments to confirm cost shared labor costs. Reporting cost sharing based upon expenditures reflected in cost share companion budget and supporting documentation provided by the PI and other department administration.

5. Key Takeaways

Key Takeaways Cost sharing The Uniform Guidance has taken productive steps to reducing the burden of cost sharing. Regardless, it is important that an organization maintains strong controls for managing Cost sharing is the cost of sponsored projects not directly funded by the awarding agency. Cost sharing can be done with direct costs or indirect costs (indirect requires prior approval). It must meet criteria for allowable project costs as outlined in the award notice and Uniform Guidance. Mandatory cost sharing is required by the sponsor. Committed cost sharing is documented and quantified in the proposal. Uncommitted cost sharing is not required by the sponsor. Matching requirements require organizations to match a financial value of the sponsor’s. The Uniform Guidance establishes that voluntary committed cost share is not expected and cannot be used in merit review

Compliance Focus: Cost Sharing Monitoring compliance With this federal guidance, ensure organizational policies minimize voluntary cost share c c Determine and document roles, responsibilities and processes for cost share commitment monitoring and verification - Central versus local responsibility - Eliminate over cost sharing or duplicate cost sharing c c Enhance organizational processes for tracking cost share commitments and cost share charges with technology and tools - Companion accounts - GL-based reports c c

6. Resources

Resources Where to get Help Reference updated policies and procedures on the OAGSR website (http://academicgrants.tcnj.edu/) Sign up for or view trainings (http://academicgrants.tcnj.edu/ug-training/) Review the Uniform Guidance Language (http://www.ecfr.gov/cgi-bin/text- idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl) Ask your colleagues Contact OAGSR Green Hall, Room 202 P) 609.771.3255 E) grants@tcnj.edu Contact the Office of the Treasurer Green Hall, Room 207 P) 609.771.2186

7. Appendix

Introduction to the Uniform Guidance Uniform Guidance Training Series Day One, Part One Introduction to the Uniform Guidance 11/10/2014 Organization - Subparts Acronyms and Definitions Subpart A General Provisions Subpart B Pre-Federal Award Requirements and Contents of Federal Awards Subpart C Post Federal Award Requirements Subpart D Cost Principles Subpart E Audit Requirements Subpart F

Introduction to the Uniform Guidance Uniform Guidance Training Series Day One, Part One Introduction to the Uniform Guidance 11/10/2014 Organization - Appendix to Part 200 Full Text of Notice of Funding Opportunity Appendix I Contract Provisions for Non-Federal Entity Contracts Under Federal Awards Appendix II Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) Appendix III Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations Appendix IV State/Local Government and Indian Tribe-Wide Central Service Cost Allocation (Transfer) Plans Appendix V Public Assistance Cost Allocation (Transfer) Plans Appendix VI States and Local Government and Indian Tribe Indirect Cost Proposals Appendix VII Nonprofit Organizations Exempted From Subpart E— Cost Principles of Part 200 Appendix VIII Hospital Cost Principles Appendix IX Data Collection Form (Form SF–SAC) Appendix X Compliance Supplement Appendix XI

Uniform Guidance Traing Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact Cost principles - direct costs Guidelines promote the clarification as well as standardization of the direct cost allowability across institutions. Final OMB Uniform Guidance Institutional Impact and Implications Further clarifications made in allocability and allowability of certain direct costs. A single common cost principles circular creates common accounting standards for all grant recipients, regardless of institutional type.

Uniform Guidance Traing Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact Cost principles - Administrative support Institutions can charge directly allocable administrative support as a direct cost. Final OMB Uniform Guidance Institutional Impact and Implications In order for clerical costs to be allowable as a direct charge, the Federal awarding agency’s prior approval is required. Additional language was added to allow for this approval after the initial budget approval in order to allow for flexibility in implementation. Institutions may charge administrative and clerical salaries, as well as other items of cost, directly to a Federal award when it is appropriate, allocable and meets the conditions outlined in the Federal guidance. The burden for justifying direct costs as allocable to an award remains with the institution.

Uniform Guidance Traing Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact Cost principles - Computing devices This change includes the cost of certain computing devices as allowable direct cost supplies. Final OMB Uniform Guidance Institutional Impact and Implications Computing devices are subject to the less burdensome administrative requirements of supplies (as opposed to equipment). The acquisition cost must be less than the lesser of the capitalization level established by the non- Federal entity for financial statement purposes or $5,000, regardless of the length of its useful life. Computing devices not considered a depreciable asset by an institution’s capitalization policy may be charged and treated as supplies. The burden of obtaining prior approval for such purchases is reduced. However, institutions must follow the same practices for determining and documenting allocability (direct versus indirect use) when charging computing devices to sponsored awards.

Uniform Guidance Traing Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact POST-award requirements - subcontract monitoring The prime awardee sets requirements and leads subcontract monitoring. Final OMB Uniform Guidance Institutional Impact and Implications Subrecipient monitoring tools currently in the Compliance Supplement are integrated. Pass-through entities must honor either a negotiated or minimum 10% of MTDC indirect cost rate for sub-recipients. Subrecipient monitoring via the review of performance and financial reports is limited to what the pass-through entity has deemed necessary to meet their own requirements under the Federal award. Only when findings pertain to Federal award funds provided to the subrecipient by the pass- through entity does the pass-through entity have to follow up, ensure corrective action, and issue management decisions on weaknesses. 10% MTDC minimum rate facilitates collaboration with subrecipients. Prime awardee institutions decide what is necessary for monitoring subrecipients, including the review of financial and programmatic reports, in order to meet their own obligations under Federal awards. Only when findings pertain to federal funds provided to sub-recipients, must the pass- through entity manage corrective actions.

Uniform Guidance Traing Series Day One, Part One Overview of Uniform Guidance & Institutional Impact 11/10/2014 Post-award requirements – subcontract / vendor clarification Provides clarification between subrecipient and vendors and assigns responsibility for determination to mitigate disagreements with sponsor classification. Final OMB Uniform Guidance Institutional Impact and Implications The agreement characteristics necessary to determine subrecipients vs. vendors on Federal awards are clarified. Responsibility for making this determination is assigned to the pass-through entity. Clarification should help mitigate agency retrospective disagreement of determination.

Uniform Guidance Traing Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact Cost principles - Time & Effort (T&E) As long as institutions comply with general principles of T&E, they can apply unique practices of maintenance, which will lessen the administrative burden. Final OMB Uniform Guidance Institutional Impact and Implications Non-Federal entities are required to maintain high standards for internal controls over salaries and wages but are provided additional flexibility on how to implement processes to meet those standards. Reporting requirements are consolidated across entities and specific methodologies for IHEs are eliminated. Different allowable and unallowable compensation activities are defined and include special considerations for different types of non- Federal entities. The general principles of time and effort still apply, but all institution types have the ability to implement independent practices for verifying payroll as long as they follow the Federal guidelines. The complex language and example methods have been eliminated.

Uniform Guidance Training Series Day One, Part One 11/10/2014 Overview of Uniform Guidance & Institutional Impact Cost principles - procurement Institutions will have additional procurement standards such as required competition and equipment screening requirements. Final OMB Uniform Guidance Institutional Impact and Implications Procurement method requirements are outlined. The threshold for small purchase procedures is raised to $150,000 to be consistent with the simplified acquisition threshold in the Federal Acquisition Regulation (FAR). Non-Federal entities are required to avoid duplicative purchases and encouraged to enter into agreements for shared goods and services. All A-110 language on procurement is replaced by A-102 section .36. Minor clarification to language requires non- Federal entities to maintain “oversight” rather than a “system” that ensures contractor performance. The cost or price analysis threshold, set in accordance with the simplified acquisition threshold, will streamline institutional procurement processes. However, other actions will require additional administration in procurement areas, such as inter-entity agreements for shared services. Institutional P-Card policies, especially for purchases over $3,000 may be in conflict with Federal requirements. TCNJ will continue to follow its existing procurement policies which comply with the new Federal requirements.