Subpart A – Acronyms & Definitions Central service cost allocation plan Compliance Supplement Appendix XI to Part not updated Program Income - Tuition is usually excluded, but Fees are not Subrecipients – $25,000 or more

Subpart B – C – General Provisions-Pre Federal Award (a)Effective date December 26,2014, Audit Standards effective December 26, 2013, with audits beginning on or after Mandatory disclosures – violations of Federal criminal law, fraud, bribery, or gratuity violations (2 CFR Part 180 and 31 U.S.C. 3321)

Subpart D – Post Federal Award (b) Executive compensation, 2 CFR Part 25 Central Contractor Registration, 2 CFR Part 170 Reporting Subaward and Executive Compensation the federal awarding agency must require the recipient to relate financial data to performance accomplishments, must provide cost effective practices Financial management – (a) state laws and procedures & sufficient to permit program-specific tracing of funds, (b) record retention, Request for transfer of records, Methods for collection, transmission, storage, access to records, public access to records, (2) accrual reporting based on analysis of documentation on hand, Payment – reimbursement method – or written procedures that minimize the time elapsing Cost Sharing or matching (b)(1) verifiable, (2) not included as contributions for any other federal award, (3) necessary & reasonable for program objectives, (4) allowable subpart E, (5) not paid by federal gov under other award, (6)provided for in approved budget, (c) unrecovered indirect cost, (d) value of contributions contribution & donations, (e) volunteer services – valued at similar work, regular pay & benefits, Program Income - (3) may be used to meet cost sharing or matching Budget and program revisions – must be related to performance for program evaluation, (b) prior approvals (1) Change in Scope or the objective, even if no budget revision, (2) key person specified, (3) disengagement from the project for more than 3 months, or 25% reduction in time by PI, (4) cost that require prior approval, (5) transfer of funds for participant support cost, (6) unless awarded, the subawarding, transferring or contracting out of any work, (7) changes in cost-sharing or matching Equipment (1) Use for authorized purposes, (2) not encumber the without approval, (3) Use and dispose of property (b) dispose of equipment in accordance with state laws and procedures, (c) Use (1)for which it was acquired as long as needed,(i) activities of another federal award, same agency (ii) federal awards other agency, (2) use by other non-federal program user fees should be considered, (3)must not use equipment for a charge that is less than a private company would charge, (4) replacement can use proceeds from sale toward new equipment, (d) Management requirements – procedures for managing equipment from purchase and disposition, (1) Description of property, serial number, source of funding, who holds title, acquisition date, cost of the property, % of federal participation, location, use and condition, disposition data, date and sale price, (2) Physical inventory against list at least every 2 years, (3) control system to prevent loss, damage, (4) maintenance procedures to keep in good condition, (5) sale procedures,

Procurement Standards Procurements by states – must follow the same policies and procedures for non-federal, comply with Recovered Materials, Contract provisions, through General procurement standards including subrecipients of state – General procurement standards (a)Must use own documented procurement procedures (provided conform to federal standards), (b)Oversight of contractors, (c)(1) written standards of conduct covering conflicts of interest and performance of it employees engaged in selection, award and administration of contracts,(c)(2) Parent, affiliate organization, (d)avoid acquisition of unnecessary or duplicative items, (e) encouraged to enter into state and local intergovernmental agreements for use of common or shared goods & services (f) use federal excess and surplus property, (g) value engineering clauses in contracts for construction projects, (h)responsible contractors, (i) maintain records sufficient to detail the history of procurement (rational, selection type, basis of contract price), (j) may use time and material contracts only when no other applies (see detail), (k) responsible for the settlement of all contractual and administrative issues – Competition (a) all transactions must provided full and open competition, (b) prohibits the use of statutorily or administratively imposed state or local geographical preferences, (c) must have written procedures for procurement transactions (1) clear and accurate description of what is being procured, (2) identify all requirements, (d) prequalified lists of persons, firms, or products are current and included qualified sources – Methods of procurement to be followed (a) micro-purchases, aggregate does not exceed $3,000, maybe awarded without soliciting competitive quotations, (b) small purchase procedures, do not cost more than the Simplified Acquisition Threshold ($150,000), price or rate quotes must be obtained from as adequate number of qualified sources, (c) Sealed bids (see detail), (d) Procurement by competitive proposals (see detail), (f) procurement by noncompetitive proposals (see details) – Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms. See details – Procurement of recovered materials – 6002 Solid Waste Disposal Act, see details – Contract cost and price (a)Must perform cost or price analysis with every procurement in excess of the SAT, including contract modifications, (b) must negotiate profit as a separate element of the price, (c) costs or prices bases on estimated cost for contracts under Federal awards, (d) the cost plus a percentage of cost and percentage of construction cost method of contracting must not be used

Procurement Standards con’t Federal awarding agency or pass-through entity review (a) technical specification on proposed procurements must be made available, (b) pre-procurement review, procurement documents (see details), (c) exempt from review if procurement system comply with standard of this part, – Bonding requirements (see details) – Contract provisions – contracts must contain Appendix II to “Part 200-Contract Provisions for non-federal Entity Contracts under Federal Awards”. Micro-purchases under $3,000, Simplified Acquisition threshold $150,000.

Subrecipients and contractor determinations determinations – pass through entity must make a case by case determination whether each agreement cast the party receiving the funds in a role of subrecipient or contractor (a) Subrecipients – a subaward for the purpose of carrying out a portion of an award (200.92) (1) who is eligible to receive what federal assistance, (2)performance is measured in relation to objectives, (3)responsibility for programmatic decisions, (4) adherence to program requirements, (5)carry out a program for a public purpose (b) Contractors – obtaining goods or services (G&S) for own use (200.22), (1) provides the G&S within normal business, (2) Provides similar G&S, (3)operates in a competitive environment, (4) provide G&S that are ancillary to the operations of the federal program, (5) not subject to compliance requirements of the federal program requirements of a pass-through entities – must (a) ensure every subaward is clearly identified to subrecipient as a subaward, (1) federal award identification, (i) subrecipient name, (ii) DUNS #, (iii) federal award identification #, (iv) award date, (v) period of performance start & end, (vi) amount of federal funds to this action, (vii) total amount obligated to subrecipient, (viii) total amount of award, (ix) project description, (x) name of awarding agency, pass-through entity & contact information, (xi) CFDA # and name, (xii) is it R & D, (xiii) indirect cost rate for the award or de minimis rate, (2)all requirements imposed, (3) additional requirements in order to meet own requirements (financial/performance reporting), (4) indirect cost rate approved or as defined ( ), (5) requirement to have access to records for audits, (6)closeout of the subaward, (b) MONITOR THE ACTIVITIES, financial, programmatic reports, (f) VERIFY that audited (subpart F), (h)enforcement action against noncompliance ( )

Subpart E -COST PRICIPLES: “FACTORS AFFECTING ALLOWABILITY OF COSTS” All Costs Must Be: (a) Necessary, reasonable, and allocable (b) Conform with Federal Laws & Grant Terms (c) Consistent with State and local policies (d) Consistently treated as other cost (e) In accordance with GAAP (f) Not included as a match/cost sharing ( ) (g) Adequately documented ( ) Net of applicable credits ( )

NEW: DIRECT V INDIRECT COST Salaries of administrative and clerical staff should be treated as “indirect” unless all of following are met: 1.Such services are integral to the activity 2.Individuals can be specifically identified with the activity 3.Such costs are explicitly included in the budget 4.Costs not also recovered as indirect

COMPENSATION 1.Reasonable – consistent with federal & non-federal 2.Follows an appointment with written policies 3.Is determined and supported with “Standards of Documentation of Personnel Expenses”( (i)) 4.Comply to compensation ceilings – 10 U.S.C (e)(1)(P), 41 U.S.C and 4304 (a)(16) 5.( (h) Institutions of higher education (IHE’s) 1.Special conditions (i) Allowable activities, (ii) Incidental activities 2.Salary basis – in no event will the charges to Federal awards exceed the proportionate share of the IBS (annual compensation paid by an IHE for an individual’s appointment) for that period. 3.Faculty Contract –sets the rates for faculty work

Time & Effort – Standards for Documentation of Personnel Expenses: (i) 1 Charges for salaries and wages must be based on records that reflect the work PERFORMED (i) system of internal control, reasonable assurance the charges are accurate (ii) incorporated into the official records (iii) reflect the TOTAL ACTIVITY for which the employee is compensated (iv) both federally and all other activities compensated (v) comply with accounting policies and practices(see incidental work) (vii)Support the distribution of the employee’s salary or wages among specific activities or cost objectives (viii) budget estimates alone do not qualify as support (A) system for establishing the estimates produces reasonable approximations (B) changes in work activity are identified and entered into the records in a timely manner, (C) processes to review after-the fact interim charges (ix) Because practices vary as to the activity constituting a full workload, records may reflect categories of activities expressed as a percentage of distribution of total activities. (x)It is recognized that intermingled, a precise assessment not always feasible (2)(i)(1)records that meet (i)(1) of this section will not be required to provide additional support or documentation other that referenced in (i)(3) of this section (3)charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day (4) cost sharing or matching requirements on federal awards must be supported in the same manner as salaries and wages claimed for reimbursement.

Time and Effort – Incidental activities (h)(1)(ii) Incidental activities for which supplemental compensation is allowable under written institutional policy (at a rate not to exceed institutional base salary) need not be included in the records described in paragraph (h)(9) of this section to directly charge payments of incidental activities, such activities must either be specifically provided for in the federal award budget or received prior written approval by the federal awarding agency.