Reducing Red-Tape to Improve Outcomes The Council on Financial Assistance Reform Initiatives March 12, 2014

2 Increase in Federal Grants Activity $7B $24B $91B $200B $600B The Catalog of Federal Domestic Assistance lists over 2,000 Federal grant programs

3 Guidance Reform History Nov. 2009: Executive Order: Reduce Improper Payments Feb 2011: Presidential Memo: Reduce Administrative Burden Feb 2012: Advance Notice of Proposed Guidance (public comments) Feb 2013: Notice of Proposed Guidance (public comments) Dec 2013: Final Uniform Guidance

4 Diverse Range of Stakeholders Engaged Type of Institution RepresentedExamples State GovernmentsNASACT NASCIO NonprofitsNational Council of Nonprofits AuditorsAICPA CIGIE Indian TribesNAFOA GAO Grants ProfessionalsAGA NGMA UniversitiesCOGR AAU APLU

5 “OMB Simplifies Government-wide Grant Guidance” “A Whole New World: OMB Publishes New Grants Reform Guidance” December 2013: Final Uniform Guidance

6 Challenge & Impact Challenge Under Previous GuidanceImpact of New Uniform Guidance 1. Eight Overlapping Sets of Compliance Requirements Eliminates Duplicative and Conflicting Guidance 2. High Levels of Administrative BurdenPerformance and Internal Controls Over Compliance for Accountability 3. Hundreds of Forms with Non-Standard Data Definitions Provides Framework for Standard Business Processes & Data Definitions 4. Outdated Guidance Does Not Account for Modern Electronic Work Environment Promotes Efficient Use of IT and Shared Services 5. Inconsistent and Non-Transparent Treatment of Costs Requires Consistent and Transparent Treatment of Costs 6. Lack of Support for Policies with Work-Life Balance Encourages Non-Federal Entities to Have Family-Friendly Policies 7. Audit Findings Repeated Each Year = Waste Stronger Oversight & Target Audits on Risk of Waste, Fraud, and Abuse 8. Lack of Accountability for Effectively Correcting Financial Integrity Weaknesses Increased Accountability for Effective Resolution of Weaknesses

7 Eliminating Duplicative and Conflicting Guidance Awards Received A-102 & A-89 A-87 A-133 &A-50 Subawards to universities A-110 A-21 Subawards to nonprofits A-110 A-122 INSERT YOUR STATE OR AGENCY HERE Now: All OMB guidance streamlined in 2 CFR 200. Then:

8 Performance Over Compliance for Accountability Emphasis on strong internal controls and reduction in specific compliance requirements – Example: Specific examples of justification for salaries and wages eliminated for more flexibility in implementing a strong system of internal controls Alignment with M encouraging innovative program design based on evidence Performance measurement aimed at developing lessons learned Fixed amount awards aimed at performance milestones

9 Consistent and Transparent Treatment of Costs Voluntary Committed Cost Sharing is not expected under research awards Pass-through entities must provide an indirect cost rate for subawards Standards for treating admin costs as direct High bar for circumstances where agencies may deviate from Federally negotiated rates Option to extend rate for up to 4 years De minimis rate of 10% of MTDC for entities without a Federally negotiated rate

10 Standard Business Processes & Data Definitions Sets framework for standardizing data definitions in all grants-related forms governmentwide Standardizes format for notices of funding opportunities w/60 days to apply Standardizes Information to be provided in all Federal Awards and Subawards Highlights areas where specific agency approval is needed

11 Family-Friendly Policies Where consistent with non-Federal entity policy: – Allows costs of conference hosts to identify locally available child care – Allows temporary dependent care costs that meet specified standards for travel – Allows family leave as a fringe benefit

12 Stronger Oversight Requires mandatory disclosures for conflict of interest and criminal violations Requires pre-award review of merit of proposal and risk of applicant Federal agencies may assign specific conditions for awards based on risk Strong focus on internal controls

13 Targeting Waste, Fraud, and Abuse Single Audit Threshold raised from $500,000 to $750,000 – reducing burden for 5,000 entities while maintaining coverage for 99% of current dollars covered. Publication of single audit reports online with safeguards for PII and optional exception for Indian tribes Senior Accountable Official to implement metrics and encourage cooperative resolution Strong requirement to rely on existing audits first

14 Stakeholder Reactions Significant interest in training webcast held January 27, 2014 & future outreach – Over 5,000 registrations for mailing list – Recorded version will be available at CFO.gov/COFAR General recognition of significance of reform Interest in resources to assist in smooth implementation

15 Guidance Metrics Metrics to gauge impact of guidance on reducing the risks of non-compliance and unnecessary administrative burden Possible General Metrics: Number of OMB Approved Exceptions Number of fixed amount awards issued Number of IDC rate extensions approved by Cognizant Officials

16 Guidance Metrics Possible Audit Metrics: # of major programs before and after guidance effective % of timely submissions of single audits # of repeat findings # of ‘unclean’ opinions for major programs # of material audit findings in single audits

17 Council On Financial Assistance Reform Priorities Guidance Targets Risk & Minimizes Burden Standardized Business Processes & Data Well Trained Workforce Strong Program Oversight: Audit Resolution Better Outcomes for Grants Evidence Spending Transparency Shared Services Financial Management

18 Framework for 2014 COFAR Activities All deliverables will be strategically aligned to support effective implementation of guidance reform with minimum resource burden to Federal agencies and non-Federal entities.

19 Strong Program Oversight: Audit Resolution 19 Over 4,000 audited programs failed to receive clean opinions in 2011 (3% of total audited programs) No existing guidance holds agencies and recipients accountable for effectively correcting financial integrity weaknesses Challenge September 2013: High risk programs and recipients identified November 2013: CAROI pilot results presented to COFAR principals Accomplishments

20 Strong Program Oversight: Audit Resolution 20 December 2013: Document best practices on CAROI to contribute to resource repository February 2014: Complete framework for 2014 Compliance Supplement (w/preview of guidance implementation) March 2014: Compile and publish Federal agencies’ audit resolution policies March 2014: Finalize Single Audit Metrics April 2014: Publish 2014 Compliance Supplement June 2014: FAC to deliver available standard and ad hoc reports and analytical tools Short Term Deliverables July 2014: Reconvene to plan management decision letter pilot December 2014: Publish proposal to revise Data Collection Form and SEFA Long Term Deliverables

21 Workforce Development Lack of consistent standards for qualifying people to perform the grants management function No government-wide core training requirement for people performing the grants management function Challenge December 2013: Competencies established December 2013: Resource repository built, available for use, and in testing phase Accomplishments

22 Workforce Development March 2014: Knowledge-Sharing Resource Center available for sharing ideas and best practices August 2014: Publish Grants Management 101 Course Short Term Deliverables October 2014: Reconvene to discuss long-term vision and possible industry-wide credentialing framework Long Term Deliverables

23 Federal Grants Workforce Training Grants Workforce Grants 101 Course Uniform Guidance Knowledge- Sharing

24 Grants Data Standardization Over 700 distinct grant related forms approved in OMB database No current process to vet and validate existing data elements nor to create and validate new data elements Multiple stakeholders must be engaged to fully explore grants data standards and chart a successful path forward Non-standard data definitions compromise quality of publicly reported financial data Challenges September 2013: Preliminary analysis of 1100 data elements September 2013: Contract awarded to support further analysis of data elements and development of governance framework December 2013: 99 standard definitions in final guidance Accomplishments

25 Grants Data Standardization Over 700 distinct grant related forms approved in OMB database No current process to vet and validate existing data elements nor to create and validate new data elements Multiple stakeholders must be engaged to fully explore grants data standards and chart a successful path forward Non-standard data definitions compromise quality of publicly reported financial data Challenges September 2013: Preliminary analysis of 1100 data elements September 2013: Contract awarded to support further analysis of data elements and development of governance framework December 2013: 99 standard definitions in final guidance Accomplishments

26 Grants Data Standardization December 2013: Grants data standardization proposed vision, project outline, and governance framework March 2014: HHS to brief COFAR on grants data standards records repository functional requirements Short Term Deliverables June 2014: Brief COFAR on proof of concept for grants data standards July 2014: Reconvene to plan additional long term deliverables based on HHS and Treasury short term deliverables. Long Term Deliverables

27 Federal Spending Transparency Quality : Improving data integrity Completeness: Expanding the focus to include obligations and expenditures Functionality: Providing a one-stop location for all Federal spending Utility: Linking spending information to program activity

28 December 2013: Final Guidance Published January-April 2014: Training Webcasts, Single Audit & Other Metrics, Publish 2014 Single Audit Compliance Supplement June 2014: Agencies Submit Draft Rules to OMB, Continued Outreach on Implementation December 2014: Final Guidance Effective, Baseline Metrics Collected, Case Studies of Best Practices Published The Road Ahead: Implementing Grants Reform

29 Engage With COFAR For More Information Visit: CFO.gov/COFAR Send Questions To: omb.eop.gov Thank you!