Uniform Guidance: Everything You Need to Know Meredith Perry, Office of Research and Sponsored Programs

Outline 1.What is Uniform Guidance 2.Administrative, Clerical, and Programmatic Salary Costs 3.Computing Devices 4.Participant Support Costs 5.Visa Costs 6.Unused Supplies 7.Cost Sharing 8.Travel 9.Procurement 10.Subawards and Subrecipient Monitoring 11.Sponsor Project Closeout 12.Prior Written Approval 13.New or Updated Fiscal Policies

What is Uniform Guidance? OMB has issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, known as Uniform Guidance. This new uniform guidance covers the rules concerning how we administer, account for and audit federal grant and contract funds (sponsored projects) pdf Federal Register Vol. 78 No. 248 Thursday December 26, pdf

Reasons for Uniform Guidance Streamlining the Federal government's guidance on Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards. These modifications are a key component of a larger Federal effort to more effectively focus Federal resources on improving performance and outcomes while ensuring the financial integrity of taxpayer dollars.

What Previous Circulars Does Uniform Guidance Replace? OMB Circular A-110 (Administrative Requirements for Higher Ed, Hospitals and Non-Profits) ** OMB Circular A-21 (University cost principles) ** OMB Circular A-133 (Audits) ** OMB Circular A-87 (State, Local and Indian Tribal Gov. cost principles) OMB Circular A-122 (Not for profit cost principles) OMB Circular A-89 (Catalog of Federal Domestic Assistance CFDA) OMB Circular A-102 (Grants and Cooperative Agreements with State and Local Government) OMB CircularA-50 (Audit follow up) ** Circulars that UT(Universities) followed

Federal Timeline December 26, 2013 – OMB issued the final rule of the Uniform Guidance. June 26, 2014 – Due date for federal agencies to submit proposed implementation plans to OMB to allow for review and public comment. December 26, 2014 Uniform Guidance went into effect. It applies to new awards or additional funding to existing awards made after this date. For existing federal awards received prior to December 26, 2014, UTC will adhere to the stated terms and conditions of the award. NSF released its Proposal & Award Policies & Procedures Guide which incorporated Uniform Guidance. NASA implemented the Uniform Guidance via regulation (2 CFR 1800) and in its Grants and Cooperative Agreements Manual. March 31, 2015 – NIH issued its Grants Policy Statement which incorporated Uniform Guidance, effective for all grants and cooperative agreements with budget periods beginning December 26, 2014 or later, and awards receiving supplemental funds on or after that date. October 9, 2015 – EPA issued a final rule implementing the Uniform Guidance. October 14, 2015 – NSF, on behalf of the Research Business Model Interagency Working Group which represents a group of federal research agencies, requested public comment on updated research terms and conditions to address and implement the Uniform Guidance.

Charging Administrative, Clerical and Programmatic Salary Costs UG (c) Rules governing “major project or activity” exceptions have been dropped and replaced by the following criteria, ALL of which must be met: Administrative or clerical services are integral to a project or activity; Individuals involved can be specifically identified with the project or activity; Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency; and The costs are not also recovered as F & A (indirect) costs. If all requirements are met, add a new justification statement to proposals to facilitate the required agency approval. NOTE: Generally, overtime pay should not be charged to a Federal award.

Charging Administrative, Clerical and Programmatic Salary Costs Integral “Integral/Essential is defined as being absolutely necessary for the completion of the statement of work. Administrative or Clerical personnel are integral/essential to a project if they are directly supporting the projects statement of work. How the Administrative or Clerical personnel are directly supporting the project must be detailed in the proposal budget and budget justification.” As defined in UT fiscal policy FI0206

Charging Administrative, Clerical and Programmatic Salary Costs Integral Further, the Guidance clarifies that direct charged administrative or clerical services must be integral to a project or activity - as opposed to necessary to the overall operation of the institution and assignable in part to sponsored projects. For example, the clarification in the Uniform Guidance highlights that salary for an administrative assistant completing financial reconciliations should not be divided and charged directly to all sponsored awards under a PI or department. Although financial reconciliations are necessary to the overall execution of the project, this is true of all sponsored and non-sponsored activities and these types of services cannot be considered “integral” to the project’s goals and objectives. As defined in UT fiscal policy FI0206

Charging Administrative, Clerical and Programmatic Salary Costs (cont.) Justification Statement example: “High volume and the tight timeline of the project mandate more extensive monitoring than the services routinely provided by the department. The program assistant is needed to oversee the subrecipients’ activities, including working with appropriate university parties to perform risk assessment and subrecipient monitoring, ensuring timely delivery and review of invoices, acquiring progress reports and ensuring their review, resolving mid-project issues, monitoring compliance approvals, ensuring timely payments, and handling subaward modifications. We are therefore requesting agency approval for a [List position title here] as an administrative cost allowed under 2 CFR ”

Computing Devices (Under $5,000 Unit Cost) UG Computing devices under $5,000/unit may be direct charged under the following circumstances: The machines are essential and allocable to the project, They are necessary to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information The project does not have reasonable access to other devices or equipment that can achieve the same purpose, devices may not be purchased for reasons of convenience or preference. Items costing more than $5,000 per unit are considered equipment and follow federal equipment rules.

Participant Support Costs UG , , Participant support costs are not routinely allowed on research projects but can be charged with agency approval and the project includes: An education or outreach component and the agency approves such costs. Participant support costs may include: Stipends or subsistence allowances, Travel allowances, Registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects. These costs should be explicitly listed in the approved proposal budget OR prior approval must be obtained from the funding agency before expenditures are made, In most cases, UTC F&A is calculated on a salary & wages basis, which is not affected by participant support costs. However, for sponsored programs that require UTC to use a modified-total direct costs (MTDC) F&A rate, these costs must be excluded when calculating the project’s F&A costs.

Visa Costs UG (d) Since short-term visas are issued for a specific period of time and purpose, they can be direct charged to a Federal award if: They can be clearly identified as directly connected to work performed on a Federal award, They are critical and necessary to the project and are allowable by the agency. These visas allow employees and students to engage in field research or attend meetings in foreign locations, or allow foreign visitors to visit the University in support of the project. Long-term visa costs, such as those that enable employment at the University (for example “J” and “H1B” visas) are not allowable as direct charges. NOTE: this includes any “premium” processing fees.

Unused Supplies UG Supplies Title to supplies will vest in the non-Federal entity upon acquisition. If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal government for its share. The amount of compensation must be computed in the same manner as for equipment.

Cost Sharing UG & Voluntary committed cost sharing may not be used as a factor during the merit review of applications or proposals, and should not be included. Mandatory cost share must be specified in the notice of funding opportunity. Voluntary committed cost sharing is NOT expected. Sponsor policies and guidelines should be carefully considered when submitting a proposal containing “voluntary committed cost share”.

Travel UG Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the non-Federal entity. All travel should be justified in the sponsor approved proposal budget and justification – OR – prior sponsor approval must be obtained before incurring travel costs. example: purpose of travel, destination, # of days, # of travelers, name of traveler, cost per travel and basis for estimating the costs. In addition, if these costs are charged directly to the Federal award, documentation must justify that: (1) Participation of the individual is necessary to the Federal award; and (2) The costs are reasonable and consistent with non-Federal entity’s established travel policy.

Procurement UG Standard thresholds will trigger additional purchase documentation and requirements (MORE to come)***, Grace period for complying with the Uniform Guidance Procurement Standards is December 26, 2015, Single Audit Compliance Supplement will instruct auditors to review procurement policies and procedures based on the documented standard. ***Currently, the Federal purchasing thresholds do not meet UT’s for ensuring a competitive bidding process so there are anticipated changes in this arena.

Subrecipient Monitoring and Management UG Section explains the roles of subrecipients and contractors so that the non-Federal entity can determine the relationship and the applicable requirements. A non-Federal entity provides a subaward to a subrecipient for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship between the non- Federal entity and the subrecipient. A non-Federal entity provides a contract to a contractor for the purpose of obtaining goods and services for the non- Federal entity’s own use and creates a procurement relationship between the non- Federal entity and the contractor. What the document is called does not matter; the relationship is the basis for determining which requirements are applicable.

Subrecipient Monitoring and Management (cont’d) , Requirements for pass-through entities, includes audit responsibilities that were in A-133. The pass-through entity must: Put specific information in the subaward, including F & A cost rate Do a risk assessment to determine appropriate subrecipient monitoring AND must monitor subrecipients Consider if specific subaward conditions are needed Verify subrecipients have audits in accordance with Subpart F Make any necessary adjustment to the pass-through entity’s records based on reviews and audits of subrecipients Consider actions to address subrecipient noncompliance

Subrecipient Monitoring and Management (cont’d) The following information must be identified to the subrecipient at time of award and put in the subaward (and when changes are made to the subaward) ( (a)): Federal award identification, e.g., DUNS number F & A cost rate for the Federal Award (including if the de minimus rate is charge per ) F & A costs Requirements imposed by the pass-through entity Requirement to provide access to records for audit

Required Subrecipients Monitoring Procedures When monitoring of subrecipients, the pass-through entity must ( (d)): Review all reports required by the pass-through entity Follow-up to ensure subrecipient takes appropriate action on all deficiencies pertaining to the subaward from the pass-through entity identified through audits, on-site reviews, and other means When needed, issue a management decision for audit findings pertaining to subawards made by the pass- through entity

Subrecipients Invoicing Procedures and Requirements Invoices are to be reviewed for accuracy: Ensure financial compliance with UG cost principles and award budget. Ensure payment of subaward within 30 days of receipt of invoice if the invoice is accurate and the scope of work for that period has been completed Determine if expenditures billed are reflective of technical report If any amount is determined to be unallowable, deduct from total before forwarding invoice for payment

Subrecipients Invoicing Procedures and Requirements(cont.) Notify Subrecipient of differences to be paid Ensure final subaward invoice is received per contractual terms in order to be paid timely and reimburse by federal award

Sponsor Project Closeout UG UG sets FIRM deadline of 90 days to final report and bill (or draw funds) at the end of the stated period(NOA) for federal agencies If UTC is the subrecipient of federal funds, the reporting/ billing deadline may be shorter – e.g. 60, 45, 30 days (check your award agreement for determination) Accuracy is a necessity on “Schedule of Final Charges” form Expenditures that are not reported in a timely manner will become the department’s responsibility Be prompt in requesting a No Cost Time Extension, if needed

Prior Written Sponsor Approval UG “ Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or nonallocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement.” After the award has been issued, UT must seek agency approval for the “new costs.” Therefore, no new or additional costs can be initiated until after agency approval is received.

Prior Written Sponsor Approval Is required for: Administrative, Clerical and Programmatic salaries (§ (c)) Cost sharing or matching(§ ) Revision of budget and program plans(§ ) Fixed amount subawards (§ ) Equipment and other capital expenditures (§ )

Prior Written Sponsor Approval (cont.) Is required for(cont.): Memberships, subscriptions and professional activities costs (§ ) Participant support costs (§ ) Pre-award costs (§ ) Travel costs (§ )

New or Updated Fiscal Policy FI0205 Sponsored Grants and Contracts (updated) FI0206 Sponsored Projects-Distinguishing Direct vs Indirect Costs (new) FI0207 Sponsored Projects-Salary Policy (new) FI0208 Sponsored Projects-Federal Salary Limitation (new) FI0210 Sponsored Projects-Cost Sharing (updated) FI0215 Sponsored Projects-Effort Certification (updated) FI0220 Sponsored Projects-Cost Transfers (updated) FI0225 Sponsored Projects- Code of Business Ethics (updated ) FI0230 Sponsored Projects- Subaward Origination and Subrecipient Monitoring (updated) FI0235 Sponsored Projects-Program Income(updated) All fiscal policies can be found at:

References and Support Documents Uniform Guidance: pdfhttp:// pdf UT Fiscal Policies: ttp://policy.tennessee.edu/fiscal_policy/ ttp://policy.tennessee.edu/fiscal_policy/ UTC Uniform Guidance Website: programs/proposal-budget-development/uniformguidance.php programs/proposal-budget-development/uniformguidance.php Federal-Wide Research Terms & Conditions: Documents found in Fiscal Policy FI0206: UT PI Quick Guide Examples of Direct vs F & A Cost Unallowable costs for Federal and Federal flow through UT Justification Statement Examples Documents found in Fiscal Policy FI0230: Determination Guide for Agreements with External Entities/Individuals Required Subrecipient Risk Assessment by Pass-Through Entities Uniform Guidance Required Information UT Optional Requirements for High Risk Subrecipients

Contact Information Office of Research and Sponsored Programs Meredith Perry, Director Angie Johnson, Assistant Director Office of Business & Financial Affairs Virginia Moore, Assistant Director Eve Cartee, Staff Accountant of Accounting