Compliance Corner and Uniform Guidance Update MRAM December 2014 Ted Mordhorst Director for Post Award Financial Compliance Research Accounting & Analysis

Audit News NSF: University Audits Questioned costs: 1. Senior Personnel salaries exceeding two months Ted Mordhorst Director for Post Award Financial Compliance Research Accounting & Analysis

Audit News NSF: University Audits Questioned costs: 2. Charges near the end of the award Ted Mordhorst Director for Post Award Financial Compliance Research Accounting & Analysis

Audit News NSF: University Audits Questioned costs: 3. inadequate documentation support for other costs, Travel, Visas Ted Mordhorst Director for Post Award Financial Compliance Research Accounting & Analysis

Uniform Guidance: Effective December 26, 2014 MRAM December 2014

Applicability of the Uniform Guidance  All new and renewal funding received on or after 12/26/14 is subject to the UG (and the revised GIMS)  Federal Sponsors may “pull in” existing funding on a project under the UG, when providing supplemental funding to the project:  Via terms and conditions;  By blanket agency policy.  If Federal Sponsor is “silent” on this issue, UW will treat the entire BN as under the UG if supplemented with funding received on or after 12/26/14.

Uniform Guidance Comparing the treatment of certain costs under current regulation (A-21) vs. the Uniform Guidance (2 CFR 200)(UG) Items not previously mentioned in A-21

Uniform Guidance Comparing the treatment of: Administrative and Clerical Costs Computing devices under current regulation (A-21) vs. the Uniform Guidance (2 CFR 200)(UG)

Administrative & Clerical Costs Now A-21  Criteria for direct charging of Administrative and Clerical costs under OMB Circular A-21  Funding received prior to 12/26/14  Major project or activity  The project requires an extensive amount of admin or clerical support.  Significantly greater than the routine level of such services normally provided by departments.

Administrative Costs Under UG  Criteria for direct charging of Administrative & Clerical costs under UG effective for new funding received on or after  Services are integral to a project or activity;  Individuals specifically identified with the project or activity;  Explicitly included in the budget or have the prior written approval.  Not included in F&A rate.

A21 & UG Administrative Costs Primary difference between A-21 and UG  UG removes the “Major Project or Activity” and extensive effort criteria  Under UG, If the cost can be justified as “integral” to the project and the sponsor approves, it is allowable.  Care should be taken to ensure that the actual activity corresponds to what is justified.

Computing Devices Now A21  Computing devices  Desktops and peripherals, Laptops, Tablets, etc.  Funding received prior to 12/26/14  Automated Data Processing (ADP)equipment is identified as General Purpose Equipment (requires approval)  Equipment = useful life of 1 year + and cost of $2K+

Computing Devices UG  Computing devices  Desktops and peripherals, Laptops, Tablets, etc.  Cost below $2K treat as a supply item.  Essential and allocable to the award.  Use is not limited to the award. ($2K & over = General Purpose Equipment)

Computing Devices UG Definition of equipment remains the same.  $2K+ and useful life of 1yr+  Cost of the item including shipping, taxes, etc. Expense under or 41

Computing Devices < $2K Primary difference in treatment (UG).  UG clarifies treatment as supplies.  UG requires a careful balance between allocability and use.

Computing Devices < $2K Primary difference in treatment (A-21).  A-21 treated as General purpose Equipment regardless of cost.  A-21 generally considered use limited to the award charged or allocate across all benefiting awards.  Requires prior sponsor approval.

Computing Devices UG Allocable to the award.  The primary purpose for the purchase is that the device is necessary to achieve the objectives.  Similar to equipment provisions if excess capacity exists it may be used for other activities.  Award activity takes precedence

Computing Devices UG Computing devices costing $2K and above.  Classified as General Purpose Equipment.  Requires prior sponsor approval.  May be used for other activities but preference MUST be given to other federal awards.

New Costs in the UG  Participant Support Costs  Applicable to awards with training component or conference  Exempt from F&A  Sub-budget used to identify  Requires sponsor approval  May not be rebudgeted without sponsor approval.

New Costs  Visa costs (subset of recruitment costs)  Short Term Visa Costs are allowable  Critical and Necessary  Normally paid regardless of funding source  Directly allocable to the award  Not long term (immigration) visa costs.

New Costs  Value Added Tax (VAT)  Legally required to pay in-country  Should make every reasonable effort to obtain exemption if available.

GIM 2: Acceptance of Sponsored Program Awards and Fiscal Compliance on Sponsored Program Accounts  Reiterates the authority of OSP to accept sponsored funding.  States the authority of OSP and GCA to oversee central fiscal processes, systems, and policies related to sponsored programs.  Emphasizes internal controls by central offices and by PIs at the project level.*  Pulls in IC/procedural information into the Procedures/Guidance section from other GIMS and will allow us to “retire” outdated GIMS (i.e. GIM 6, GIM 14, GIM 18, GIM 26) *Guide for PIs/Departments on Internal Control measures in development.

GIM 13: FACILITIES AND ADMINISTRATIVE (F&A) RATES  GIM 13 policy: Sponsored programs must include full negotiated rate unless one of the exceptions listed in GIM 13 applies or a waiver is approved.  UG requires that agencies accept the negotiated rate of non-federal entities (grantees) unless - -  The agency documents the F&A rate cap in the Funding Opportunity Announcement (FOA) and agency notified OMB of the intent to cap the F&A rate.  As a result of UG requirement, OSP does not intend to approve F&A waiver requests on Federally funded/Federal flow-through programs. Agency must comply with UG.

GIM 21: Cost Share on Sponsored Programs  Cost-share allowed when:  It is a mandatory requirement of sponsor.  Federally sponsored and included in the FOA is criteria agency will use during merit review to consider cost-share commitment.  Non-Federally sponsored, to extent permitted and necessary due to the competitive nature of the program.  Waived F&A cannot be used as cost- share on a sponsored program without prior sponsor approval.

GIM 23: Sponsored Program Costing policy  All costing principles remain unchanged: Direct versus indirect; all costs must be necessary, reasonable, allocable and provided consistent treatment.  Prior approvals are required for certain costs (see list in UG, summarized on GCA website), including:  Admin/clerical costs  Participant support costs  GIM now recognizes that costs normally recovered under F&A may be directly charged to non-Federally sponsored programs if permitted by the sponsor’s policies or otherwise approved by the sponsor.

GIM 39: Closeout of Sponsored Programs  Broadened to apply to all sponsored program closeout activity:  OSP will continue to use reports generated from SPAERC to send our notifications to campus:  Will continue to be a report of Federally funded programs  GIM 39 will apply to any severely delinquent sponsored program, no matter the sponsor, if OSP made aware of the delinquency.  GCA will continue to send Notice of Expiration  All expenditures must be liquidated by 90 days past the end date of the sponsored program:  This will require heightened vigilance around getting invoices submitted/received in a timely manner.

New GIM: Subrecipient Monitoring  UG requires monitoring of subrecipients:  Risk assessment/evaluation  Decision making on inclusion of specific terms and conditions in subaward  Monitoring on-going subrecipient activity:  Performance goals achieved  In compliance with subaward terms (e.g. timeframe, scope of work, budget)  In compliance with regulations (e.g. costing policy, SFI, animal use, humans subject activity)

Subrecipient Monitoring, continued  GIM includes minimum monitoring steps required at the project level, e.g.: o Receipt of regular progress reports o Approval/rejection of subrecipient’s invoice based on criteria o Tracking of cumulative totals of subaward invoices o Delegation of authority relevant to approval of subrecipient materials is documented  GIM includes central processes implemented to assess and monitor at the central level (e.g. OSP): o Use of a risk assessment tool o Issuance of a management decision, when necessary o Initial and annual certifications required of subrecipient o Imposition of conditions in subaward, such as increased frequency of reporting o Withholding approval of a BPO in the ARIBA system.

Subrecipient Monitoring, continued  Additional monitoring steps may be imposed, depending on risk assessment.  GIM gives OSP authority to require a documented subrecipient monitoring plan signed by the PI prior to issuance of the subaward. Additional tools, resources being developed and a class on Subrecipient Monitoring is being revised and updated.

QUESTIONS? THE END