What are the Changes in the Uniform Administrative, Cost Principles and Audit Requirements and How Might This Impact Your Organization ? Deirdre M. Joseph City of Tampa If you don’t like something change it; if you can’t change it, change the way you think about it.~ Mary Engelbreit

Who, What, When, Why? Reduce Paperwork Reduce Waste, Fraud, Abuse Standardization 2009 – Executive Order to Reduce Improper Payments 2011 Presidential Memo on Administrative Flexibility, Lower Costs 2011 COFAR established to coordinate improvements Flexibility

Who, What, When, Why? A21 A50 A87 A122 A133 A110 A89 A102

Who, What, When, Why? Federal Agencies Recipient and Sub-Recipient Non-Federal Agencies * States, Local Governments, Indian Tribes Institutions of Higher Learning Auditors

Who, What, When, Why? December 26, 2014

Subpart A: Acronyms and Definitions Subpart B (100): General C (200): Pre-Award D (300): Post-Award E (400): Cost Principles F (500): Audit Appendices Where Do I Find It?

Crosswalk

Categorize, Cross-Reference & Consult Procurement ~ Documentation ~ Inventory ~ Allowability Legal ~ Human Resources ~ Internal Audit ~ Purchasing ~ Finance

Focus Now Performance over Compliance – Pre-Award Review – Clear milestones identified in agreements Strengthened Accountability – Earlier communication of audit findings

Terminology Must -vs- Should (Required) (Best Practice)

Audit Threshold NEW! Single Audit Threshold = $750,000 Old = $500,000 New = $750,000

Get All Departments Engaged Insurance & Indemnification “ Deletes policy requirement that Federal government will participate in actual losses of a self-insurance fund that are in excess of reserves.” Suggestion: Involve Legal, Risk Management and Purchasing

: Collection of Standardized Information on Applications Grant Intake Information Form Grant Title:____ Granting Agency:____ Description_________ Contract#: _____ CFDA#:_______ Pass Through Entity:______ Federal Funding: $________ Period of Performance: State Funding: $________ Start Date:_____ End Date:______ Local Match: $________ Grant Type:  Cost Reimbursement City’s Match: $________  Fixed Fee Total Funding: $________  Unit of Service  Advance Financial Reporting Schedule: _______ Progress Reporting ______ Requires Trust Fund/Interest Bearing Account?  Yes  No Indirect Cost:  Yes  No. If Yes, document rate used__________.

Notice of Funding Opportunities (A) Notices must remain open for at least 30 days! (B) Standardizes information to be provided in Summary Federal Awarding Agency Name/Funding Opportunity Title/ Announcement Type (initial or modification) Funding Opportunity Number Catalog of Federal Financial Assistance (CFDA) Numbers Key Dates (due dates for applications or submissions and intent) (C) Full Text of Funding Summary – Summary Information

: Specific Conditions Applicants or Recipients who have a history of ‘failure to comply” with general or specific terms and conditions or failure to meet expect performance goals Result – Awarding agency may impose additional specific award conditions Example: Requiring payments as reimbursements rather than advance payments

Fixed Amount Awards NEW! Allow for ‘Fixed Amount’ awards Awards rely more on Performance than Compliance Payments are based on specific requirements such as performance, milestone and results

Grant Agreements New! Subpart D- Post Federal Award Requirements Requires inclusion of performance goals in award’s terms and conditions, as a programmatic requirements.

Performance Measurement Federal Agencies MUST include performance goals aligned with program goals in notice Entities Must relate financial data to performance accomplishment Goal = Response $100K purchase of Interoperable Communications 1 st quarter 30% of our State can now Respond +

Cost Sharing or Match CLARIFICATION! Voluntary committed cost sharing is not expected and cannot be used as a factor during the merit review of applications or proposals. CONSIDER Criteria for Cost Share/Match: Verifiable in records Not included in any other Federal award Necessary and reasonable to accomplish program Not paid by Federal Government Allowable in Subpart E

Procurement States may use their own written procurement policies and procedures Open Competition Ensure Most Economical Purchase Conflict of Interest Mandatory Disclosures Must perform cost analysis on all non- competitive contracts All contracts must include required clauses

Review of Risk of Applicants An evaluation framework must be in place (e.g. Do Not Pay) Where necessary, specific conditions must be imposed to mitigate potential risk

Record Retention Clarification – Files must be maintained for 3 years from the date of FINAL Expenditure Report

Family Friendly Policies Encouraged NEW! Cost of identifying locally available child care resource is allowable. NEW! Allows temporary dependent care cost that meet specified standards for travel NEW! Allows family leave as a fringe benefit TIP: Review existing policies with Human Resources

Pass Through Entity Requirements Sub Awards must be clearly identified Risk Evaluation of sub-recipient’s Verify compliance to audit requirements May impose specific sub-award conditions – Withhold cash – Disallow cost – Terminate (or temporary suspend) award – Suspension and Debarment

Indirect Cost Rates Must accept approved negotiated rate Pass-through entities must provide an indirect cost rate for sub-awards If no Negotiated Rate; then 10% rate in effect

Merit Review Proposal – New! Must have a merit review process

Equipment The State can follow their own equipment standards NEW! Computing Devices with a value of $5,000 or less will be considered supplies

(continued) CLARIFICATION on SHARED USE. Allowed if such use will not ‘interfere” 1 st – Projects supported by federal agency 2 nd – Projects funded by other federal agencies 3 rd - Use for non-federally funded programs Equipment

Methods of Collection Transmission & Storage of Information Clarification! Electronic, open, machine readable information is preferable to paper (with appropriate internal controls to safeguard alteration of records) Can substitute electronic versions for original paper provided certain conditions

Required Certifications NEW! Must certify on annual and fiscal reports or vouchers requesting payment: “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete and accurate and expenditures, disbursements and cash receipts are for the purpose and objectives set forth in the terms and conditions of the federal award. I am aware that any false, fictitious or fraudulent information or the omission of any material fact, may subject me to criminal civil or administrative penalties for fraud, false statements, false claims or otherwise”

Payments Interest Earned on Federal Funds paid annually (rather than promptly) Interest Bearing account increased to $500 for administrative purposes

Termination Can Terminate Award – Non compliance – For Cause – With Consent

Direct Cost Clarifies the circumstances where Administrative Support cost may be treated as direct cost

Compensation & Payroll High standards of internal control over salaries and wages

Allowable -vs- Non-Allowable Cost NEW: Advertising and Public Relations are allowable exceptions to the otherwise unallowable cost Proposal Cost are allowable SUGGESTION: Develop a checklist of Allowable and Unallowable Cost for each grant file

Internal Controls Must safeguard and protect personally identifiable or sensitive information Source Documents for Best Practices: 1. The Green Book 2. “Internal Control Framework” by COSO 3. Appendix XI, Compliance Supplement

Mandatory Disclosure : Awarding Agency MUST establish Conflict of Interest policy and Non- Federal entity MUST disclose any potential Conflicts of Interest : MUST disclose in a timely manner and in writing ALL violations of criminal law involving fraud, bribery or gratuity violations

Appendix II: Contract Provisions NEW! All contracts must contain provision covering the guidance, statues and regulations provided in this appendix (11 areas) * Legal remedies when contractors violate or breach * Termination for cause or convenience * EEO * Rights to Inventors Made under Contract * Byrd Anti-Lobbying Amendment

Contract Administration Must maintain oversight to ensure contractors perform in accordance with terms, conditions and specifications of the contract

Prior Approval Required for the following circumstances: Change in principal investigator, project leader, partner or scope of effort Unrecovered indirect cost Additions to program income or use of program income to meet cost sharing or match Changes in project scope/objective, key person specified in award (non-construction award) Transfer of participant support cost to other expense categories Transfer or subcontract of work under the award

Auditor Selection Peer Review is now a factor in selecting an auditor Suggestion: Add requirement to upcoming RFPs Request periodic Peer Review results

Single Audit : MUST publish Single Audit Reports online at the Federal Audit Clearinghouse Suggestion(s): Establish procedures/metrics Timely Single Audit submission Coordinated Audit Follow-Up (e.g. using SF- SAC categories to track findings)

Single Audit Report Auditor and auditees MUST ensure report do not include any Protected Personally Identifiable Information (PPII) MUST sign statement that reports don’t include PPII and authorization to make reports publically available on a website.

Audit Resolution months to resolve findings Federal Agency will appoint a Senior Accountable Official for oversight of Single Audit

Audit Findings MUST identify audit findings as repeat (from prior audit) with reference to the audit finding number Suggestion: Internally track audit findings

Close Out Clarification: Final reports due 90 days from end of period of performance Close Out period extended to one year

If nothing ever changes, there’d be no butterflies ~ Author Unknown (813)