1. 2 CFR Part 200 “Uniform Guidance”: Changes in UTHSC Policy and Procedures

2. What is the Uniform Guidance?
2 CFR 200
A-87
A-89
A-110
A-21
A-133
A-102
A-50
A-122
Uniform Guidance (UG) is a combined, simplified, version of 8 circulars that became effective 12/26/14.
This new Uniform Guidance contains the rules concerning how we administer, account for and audit federal grant & contract funds (sponsored projects).
Melanie - OMB Circular A-110 (Administrative Requirements for Higher Ed, Hospitals and Non-Profits), A-21 (University Cost Principles) & A-133 (Audits)
This is a major reform of how the federal government provides assistance awards (e.g., grants and cooperative agreements) with the goal of increasing accountability and transparency while reducing the administrative burden on non-federal entities receiving federal awards.

3. Which sponsors are following Uniform Guidance?
The new guidance will be used by all Federal agencies issuing sponsored funding (grants and contracts) to non-Federal entities.
Melanie?

4. Reasons for Uniform Guidance
Streamlining the federal government’s guidance on Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
Supporting the larger federal effort to more effectively focus federal resources on improving performance and outcomes while ensuring the financial integrity of taxpayer dollars.
Melanie?
UG went into effect on Dec 26, 2014,It was applied to new awards or additional funding to existing awards made after this date. For existing federal awards received prior to Dec. 26, 2014, UT has adhere to the stated terms and conditions of the award.
Uniform Guidance provides the “destination” – the bottom-line of institutional compliance for federal awards. The individual sponsor agencies will provide the policies and instructions – the “how”.
Uniform Guidance does not mean Uniform Procedures. Must still rely on federal agencies to provide specifics on award administration.
As Federal agencies implement policy changes, UT standards of practice and administration of sponsored programs, contracting and procurement, auditing, and finance has been or will be added or revised in order to maintain compliance with UG.
OSPA, Departments, PIs, and research administrators will need to be aware of agency-specific award policies as well as award terms and conditions to be fully compliant on Federal awards.

5. Charging Administrative, Clerical and Programmatic Salary Costs
Allowable only if those personnel are “INTEGRAL/Essential” to a project or activity and if the costs are included in the proposal or have prior written approval of the agency
“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 project’s statement of work. How the Administrative or Clerical personnel are directly supporting the project must be detailed in the proposal personnel or budget justification.
UG - § (c) Direct costs.
Brenda
Note: generally, overtime pay should not be charged to a federal award.
A budget justification must be included in the proposal/narrative that explains how these services are integral to the projects.

6. Computing Devices (Under $5,000 Unit Cost)
Allowable for devices (includes “peripherals” for printing, transmitting, and receiving or storing electronic information) that are essential and allocable, but not solely dedicated, to the performance of the Federal award.
Devices are necessary to acquire, store, analyze, process, and publish data and other information electronically.
Project has no reasonable access to other devices/equipment for the same purpose.
Devices may not be purchased for preference or convenience.
Note: Items over $5K = equipment
§ (c) Materials and supplies costs
Brenda

7. Computer Devices (Under $5,000 Unit Cost)
PIs/departments should include a statement in the budget justification section of the proposal (for proposals that include a justification). The justification should:
Provide the rationale for considering the computing device to be essential and allocable to the project.
Identify whether it is solely dedicated or not.
If a computing device was not identified in the budget (as in the case of modular budgets), before it is charged to the restricted account, it must be justified to and approved by SPA.
Purchasing restrictions within the last 6 months of the award
** If Sponsor prohibits inclusion of a computing device, it cannot be included**
Brenda We must have a justification statement to document why the purchase is considered “essential”. What contribution it is providing to the project? Is there any access to other devices or equipment that can achieve the same purpose?

8. Spending at the End of the Award **More Scrutiny**
No more than $5K in materials/supplies remaining at the end of the grant (§ Supplies)
Gerri
Implies closer scrutiny on overall spending in the last few months of the award – may need closer financial monitoring

9. Unused Supplies
SPA must receive confirmation from the PI/Department for the existence of unused supplies exceeding $5,000 in total aggregate value.
The new internal Residual Supply Inventory form must be completed by the department at the end of every budget period. The PI must certify the supply usage and submit the form to the SPA Office.
If the residual supplies are to be used on a continuing award or other federally sponsored activities, the first-in/first-out inventory method should be used.
In either case, we must compensate the Federal government for its share.
Gerri

11. Visa Costs §200.463 (d) Recruiting costs
Generally Allowable Costs (no change in UG)
Visa application fees for a researcher being recruited, who is considered to be “critical and necessary for the conduct of the project.”
Short-term visa costs were anticipated in the proposal and sufficiently justified.
Costs not anticipated and sufficiently justified within the proposal (The PI will be required to justify the costs upon receipt of the award and obtain agency approval to be considered an allowable charge.)
Visa costs can be clearly identified as directly connected to work performed on a Federal award
Brenda If a visiting scholar’s work is critical and necessary for the conduct of the project, short-term visa costs may be allowable as direct costs. The impact-short-term visas are issued for specific period and purpose.

12. Visa Costs Unallowable recruitment costs
The following fees may NOT be charged to a Federal award:
Expedited or premium processing fees
Renewal application fees
Application fees for changes in visa type
Dependent application/processing fees
Brenda

13. Modular Budgets
Modular budgets do not include a budget justification, but do include personnel and equipment justifications.
If charges that require prior agency approval are included in a modular budget, they will need to be addressed by requesting agency approval at “just in time” or, via SPA, after receipt of the award.
Debbie

14. F&A Costs §200.414 Indirect (F&A) costs.
Federal agencies must accept an applicant’s negotiated indirect cost rate unless an exception is required by statute or regulation or is approved by a federal awarding agency head or delegate based on publicly documented justification.
Pass-through entities must accept a subrecipient’s negotiated indirect cost rate unless the federal agency requires an exception.
Any non-Federal entity that has never received a negotiated indirect cost rate may elect to charge a de minimus rate of 10% of modified total direct costs (MTDC).
Melanie

15. Subrecipient Monitoring and Management
§ Subrecipient and contractor determinations.
Pass-through entities (PTEs) determine which type of agreement is appropriate:
A subaward is issued to a subrecipient for the purpose of carrying out a portion of a Federal award.
A contract is issued to a contractor for the purpose of obtaining goods and services.
What the document is called does not matter; the activity is the basis for determining which requirements are applicable.
See new UT Determination Guide for Agreements with External Entities/Individuals cdn.com/wp-content/uploads/2015/01/Exhibit-01-UG-detrmination- chart-for-sub-vs-vendor docx
Debbie

16. Subrecipient Monitoring
The UG places increased emphasis on risk analysis prior to issuing a subaward.
The PI/Department and GRA will review all subawards for potential risks. Refer to the Subaward responsibilities matrix and Exhibit to FI0230, Uniform Guidance – Required Subrecipient Risk Assessment by Pass-Through Entities.
At the proposal stage, PIs/Departments will:
Identify the subrecipient
Obtain documents from Subrecipient (SOW, budget, etc.)
Review SOW and budget for feasibility, appropriateness, and reasonableness
Upon award, prepare an NCJ
Prior to issuing a subaward, pre-award office will:
Obtain Subrecipient’s previous audit results
Review SOW and budget for feasibility, appropriateness and reasonableness;
Conduct a risk assessment
Check the Excluded Parties List
Ensure that an NCJ has been approved
Debbie

17. Subrecipient Monitoring and Management
The UG requires that certain information must be identified to subrecipients at time of award and put in the subaward (and when changes are made to the subaward).
UTHSC has revised forms for subawards that incorporate all of the required elements.
For a complete list of required elements, please see
Exhibit 3 to FI0230, Uniform Guidance – Required
Elements for Subawards
Debbie

18. Subrecipient Monitoring and Management
When monitoring subrecipients, the pass-through entity MUST:
Review financial and performance reports required by the pass- through entity.
Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected 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.
Debbie

19. Subrecipient Invoicing Procedures and Requirements
Invoices are to be reviewed for accuracy by the PI and department.
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,
Determine if there are any unallowable charges.
Brenda
Subrecipient Monitoring
Ensure PIs understand their award could be at risk if they sign an invoice authorizing payment of funds to a subrecipient without first thoughtfully evaluating the subrecipient’s progress.
Inform PIs that if the university issues a management decision to a subrecipient as a result of an audit, monitoring by the university must include review of financial and programmatic reports submitted to UT.
(§ ) UG requires payment of subrecipient invoices, associated with cost reimbursable subawards, to be paid within 30 days of receipt of invoice UNLESS the pass-through entity reasonably believes the request to be improper. Therefore,
Prompt review and approval of subrecipient invoices by the PI is essential.
Concerns regarding performance must be immediately reported to SPA.
All invoices should be submitted directly to the SPA Office by subrecipients.

20. Subrecipient Closeout Monitoring
Subrecipient closeout involves all aspects of the grantee’s effort: scientific, fiscal, and administrative.
The PI/Business Manager should review the subaward to determine that all deliverables have been received and all invoices have been paid.
The final invoice must be mark “FINAL” and will not be paid until all requirements are met.
Brenda An integral component of subrecipient monitoring is close-out of the subaward. This is the point at which final determination is made as to whether they have fulfilled all of their responsibilities. The Departments are responsible for collecting and retaining progress and final performance reports from all subrecipients as part of our monitoring process. As a subrecipient, we must diligently follow the primary award recipient’s financial and administrative requirements to maintain a reputation of compliance and cooperation. Submitting timely reports is part of demonstrating our compliance.

21. Subrecipient Closeout Monitoring
Required certifications:
The PI should certify that he/she is satisfied with the Subrecipient’s progress to date and that, to the best of his/her knowledge, the costs included on the invoice are reasonable and appropriate for the work performed.
Subrecipient must certify that all expenditures have been reported and that all necessary performance goals have been reached and all activities funded by the subaward were carried out for authorized purposes.
Brenda What PI need to know: Notify Pis of requirement to certify financial and programmatic performance when approving subrecipient invoice or other document. Remind Pis that in monitoring subrecipient performance, if the PI detects a deficiency, the PI should contact SPA as soon as possible to discuss enforcement options provided by the subaward agreement.

22. Prior Written Sponsor Approval*
Is required for:
Administrative, Clerical and Programmatic salaries (§ (c)),
Revision of budget and program plans (§ ),
Fixed amount subawards (§ )
Equipment and other capital expenditures(§ )
Memberships, subscriptions and professional activities costs (§ ),
Pre-award costs greater than 90 days (§ )
*Work with Sponsored Projects Accounting for prior approval of items not included in budget submitted with proposal.
Brenda

23. Sponsored Project Closeout
All financial, performance and other reports required by the terms and conditions of the federal award are due 90 calendar days after the end date of the period of performance. (NIH requires 3 closeout reports: Financial, Progress, and Inventions; SPA takes care of FSR; PI, Progress and Invention; ORA, invention.)
All obligations must be liquidated no later than 90 calendar days after the end of the period of performance.
Any real and personal property acquired with federal funds or received from the Federal Government must be accounted for at the end of the award.
NIH allows 120 days for closeout, but UTHSC requires final expenditures from departments within 60 days.
Brenda/Debbie?

24. Closeout
All reports are due “no later than 90 calendar days after the end date of the period of performance.”
No change in federal requirements, but agencies are becoming more stringent
Why?
New Sub-Accounting
No cash draws on awards after 90 days, except in exceptional cases; as approved by the agency
Applies to all reports - PIs get ready
Focus on more timely Financial Reviews
Brenda

25. Consequences of Late Closeout
Non-Reimbursement of expenditures
Risk of losing current and future funding
Withholding future awards
Loss of Letters of Credit (LOC) Privilege
Agencies under LOC: NIH/DHHS, NSF, DOE, Department of Education, etc.
Departments will be liable for expenditures incurred after the 90-day close-out period.
Brenda

26. Changes in UT Policies
Major Uniform Guidance Changes to UT Fiscal Policy are summarized here: .
Debbie

27. UT Fiscal Policies – new or revised
FI0205 – Sponsored Projects (formerly named Sponsored Grants and Contracts) (revised)
FI0206 – Sponsored Projects – Distinguishing Direct vs. Indirect Costs (new)
FI207 – Sponsored Projects – Salary Policy (new)
FI0208 – Sponsored Projects - Federal Salary Rate Limitation (new)
FI0210 – Sponsored Projects – Cost Sharing (revised)
FI0215 – Sponsored Projects – Effort Certification (revised)
Debbie/Brenda

28. New and Revised Policies (cont’d)
FI0220 – Sponsored Projects - Cost Transfers – revised
FI0225 – Sponsored Projects – Code of Business Ethics – revised
FI0230 – Sponsored Projects – Subaward Origination and Subrecipient Monitoring (formerly named Subrecipient Monitoring)
FI0235 – Sponsored Projects – Program Income –revised /
FI0405 – Purchasing – General Policies – revision deferred
Debbie/Brenda

29. New Tools
PI Quick Guide to Exceptions
Examples of Direct vs. F&A
Unallowable Costs for Federal and Federal Flow-through Funded Grants and Contracts
Debbie/Brenda

30. More tools
Major Uniform Guidance Changes to UT Fiscal Policy .
Determination Guide for Agreements with External Entities/Individuals
Debbie/Brenda

31. More tools
Uniform Guidance – Required Subrecipient Risk Assessment by Pass-Through Entities
Subaward Responsibilities Matrix
Uniform Guidance Required Elements for Subawards
Debbie/Brenda

32. More tools
UT Optional Requirements for High Risk Subrecipients
Debbie

33. New Forms
New FDP Subaward Forms (to be posted to the web, along with instructions)
Subrecipient Commitment Form /uthsc-subrecipient-form.pdf
Residual Supply Inventory Form project-accounting/residual-supplies-inventory-form.pdf
Debbie/Brenda

34. Changes in terms
“Pass-Through Entity (PTE)” is the new term for “prime recipient”
“Subrecipient” is the new term for “subcontractor” or “subawardee”
“Pre-award Office” is Office of Grants and Research Agreements (formerly Research Administration)
“Post-award Office” is Sponsored Projects Accounting
Debbie/Brenda

35. Take Home Points Watch supplies balance closely toward end of year
Monitor Awards and Subawards closely
Reconcile accounts monthly
Monitor more closely during end of period of performance
Understand Terms and Conditions of the Award
Refer to New and Revised Policies
Refer to New Forms and Tools
Brenda