1. UGG - EDGAR …Taking another look … Model Policies & Procedures
AAFC Fall Conference 2016
UGG - EDGAR …Taking another look …
Model Policies & Procedures
Kimberly Glass, Springdale & Anita Farver, LRSD

2. Share how you have used the information that was provided at the AAFC FALL 2015 Conference

3. The Administrator’s Handbook on EDGAR
AAFC Federal Grant Technical Manual
Addendum to Manual
Hmmm

4. AGENDA Federal Grant Technical Manual Addendum UGG/EDGAR Addendum
A: Determining Allocability of Costs
B: Procurement Standards
C: Documentation of Personnel Expenses (Time & Effort)
D: Record Keeping
UGG/EDGAR

5. ADDENDUM SECTION A: Determining Allocability of Costs

6. (I.) WRITTEN ALLOWABILITY PROCEDURES 200.403
NEW: Written procedures for determining allocability of costs in accordance with Subpart E – Cost Principles
Procedures can not simply restate the Uniform Guidance Subpart E
Should explain the process used throughout the grant development and budget process
Once complete, should be used as a training tool and guide for employees

7. “Factors Affecting Allocability of Costs” § 200.403
All Costs Must Be:
Necessary, Reasonable and Allocable
Conform with federal law & grant terms
Consistent with state and local policies
Consistently treated
In accordance with GAAP
Not included as match
Net of applicable credits (moved to § )
Adequately documented 7

8. DIRECT V. INDIRECT COSTS 200.412-200.414
Indirect Cost must be classified within two broad categories: “Facilities” and “Administration”
Facilities is defined as depreciation on buildings, equipment and capital improvement….pg 147
Administration is defined as general administration and general expenses such as the director’s office, personnel and all other types of expenditures not listed specifically under on of the subcategories of “Facilities”. 8

9. DIRECT V. INDIRECT COSTS 200.412-200.414
NEW: Salaries of administrative and clerical staff should be treated as “indirect” unless all of following are met:
Such services are integral to the activity
Individuals can be specifically identified with the activity
Such costs are explicitly included in the budget
Costs not also recovered as indirect
Cost incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs. ( allocable costs)
*The salaries of administrative and clerical staff should normally be treated as indirect costs. Direct charging of these cost may be appropriate only if all the conditions are met as detailed in UGG CFR beginning at (c) (1) on page 146.

10. ADDENDUM SECTION B: PROCUREMENT STANDARDS

11. Procurement Standards
NEW: All nonfederal entities must have documented procurement procedures which reflect applicable Federal, State, and local laws and regulations. § (a)
Open competition
Conflict of Interest
Solicitation
Cost/Price Analysis
Vendor Selection
Required Contract Provisions
Contract Administration
Protest Procedures
State, Local and Tribal Governments:
States may use their own procurement policies and procedures to procure equipment.
Still provides flexibility for States; all other nonfederal entities follow policies and procedures under Section 11

12. Examples that would restrict competition:
Awards that would create organizational conflicts of interest. (2 CFP (a)(5)
Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance of other relevant requirements of the procurement. (2 CFP (a)(6)
Any arbitrary action in the procurement process. (2 CFP (a)(7)
Federal Register Vol. 80, No 211 dated Monday, November 2, “brand name”

13. CONFLICT OF INTEREST
If the non-federal entity has a parent, affiliate, or subsidiary organization that is not a state or local government the entity must also maintain written standards of conduct covering organization conflicts of interest! (b)(2)
NEW: All non federal entities must establish conflict of interest policies, and disclose in writing any potential conflict to federal awarding agency in accordance with applicable Federal awarding agency policy

14. Conflict of Interest Policy
Include:
Definition
Chain for reporting potential conflicts
Alternate if reporting to employee involved in potential conflict
Definitions and examples of nominal items
Sanctions
Signed certification that employee received and understands conflicts policy
Training on policy

15. Procurement: Helpful Questions to Ask
What is your conflict of interest policy?
What are State and/or agency-specific requirements that must be followed?
Approval for contracts?
Service contracts vs. Contracts for goods?
Contract thresholds and process for entering into contracts within each threshold amount?
Evidence that entity meets sole-sourcing exception?
What clauses and/or certifications must be in each contract?
How do you ensure that the terms of the contract are met? 15

16. ADDENDUM SECTION C: Personnel Expenses Time & Effort
Documentation of Personnel Expenses
ADDENDUM SECTION C: Personnel Expenses Time & Effort 16

17. OMB CIRCULARS TIME AND EFFORT RULE
New Name: Time Distribution Records “Standards for Documentation of Personnel Expenses”
If federal funds are used for salaries, then time distribution records are required.
How staff demonstrate allocability
Paid in whole or in part with federal funds (i)(1)
Used to meet a match/cost share requirement (i)(4)
COST OBJECTIVES What is a cost objective? (slightly changed)
Program, function, activity, award, organizational subdivision, contract, or work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc.

18. TIME & EFFORT (Old A-87 RULE)
Semi-Annual Certifications
Personnel Activity Report (PAR)
If an employee works on a single cost objective:
After the fact
Account for the total activity
Signed by employee or supervisor
Every six months (at least twice a year)
If an employee works on multiple cost objectives:
After the fact
Account for total activity
Signed by employee
Prepared at least monthly and coincide with one or more pay periods

19. “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200
“STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” (8)(i) – (viii)
Must be supported by a system of internal controls which provides reasonable assurance charges are accurate, allowable and properly allocated
Be incorporated into official records
Reasonably reflect total activity for which employee is compensated
NEW: Percentages may be used for distribution of total activities
Not to exceed 100%
Encompass all activities (federal and non-federal)
Comply with established accounting polices and practices
Support distribution among specific activities or cost objectives
Budget estimates alone do not qualify as support for charges to Federal awards (i)(1)(viii)
Grantees encouraged to adopt “substitute systems” if approved by cognizant agency for indirect cost (i)(5)
Acceptable to allocate sampled employees’ supervisors, clerical and support staffs, based on results of sampled employees
NEW: If records meet the standards: the non-federal entity will NOT be required to provide additional support or documentation for the work performed ( (i)(2))
BUT, if “records” of grantee do not meet new standards, ED may require PARs ( (i)(8))
PARs are not defined!!

20. ADDENDUM SECTION D: Record Keeping
RECORDS AND REVIEWS
ADDENDUM SECTION D: Record Keeping
CFR ,
Statute of Limitations
3-5 years
State Policy
Agency Policy

21. Record Keeping Procurement Documentation
Documentation must be maintained for each step in the procurement process to sufficiently detail the history of the procurement. This documentation includes, but is not limited to, the rationale for the methods of procurement, independent estimates, cost/price analysis, solicitations, ids, proposals, justifications, profits, bidder list, approvals, contracts, etc. ( )(i)

22. Record Keeping Procurement Documentation
At a minimum, all procurement records must be retained for three year after final disposition of the item procured. If any litigation, audit, or claim is initiated involving the item procured during the three-year retention period, the procurement records must be retained until resolution of all issues and final action is taken or until the end of the three-year retention period; whichever is later.
For example, the retention period for procurement documentation on a five-year lease starts at the end of the lease, not from the date the lease was procured. (CFR )

23. Record Keeping
Methods for collection, transmission and storage of information CFR
NEW: When original records are electronic and cannot be altered, there is no need to create and retain paper copies.
When original records are paper, electronic versions may be substituted through the use of duplication or other forms of electronic media provided they:
Are subject to periodic quality control reviews,
Provide reasonable safeguards against alteration; and
Remain readable.