1. OMB Circulars and Beyond Nancy Duncan, Award Analysis Supervisor Sponsored Projects Administration

2. Audience This course is intended for “department administrative staff”—including department administrators, division managers, department fiscal managers, department effort coordinators, etc.

3. Introduction The federal Office of Management and Budget (OMB) has issued a number of circulars to define the principles and standards for sponsored projects funded by federal agencies All three of these Circulars are instructions directed to the agencies but they must still be followed by recipient institutions

4. Introduction This session will examine the three circulars most significant to sponsored projects at OHSU:  A-21  A-110 (2 CFR Part 215)  A-133 The Code of Federal Regulations (CFR) spells out each agency’s implementation of these circulars

5. Introduction A-21 defines the cost principles applicable to grants and contracts at educational institutions A-110 sets forth standards for consistency among federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals, and other non-profits A-133 sets forth standards for consistency in audits of organizations spending federal awards

6. Introduction Sponsored Projects Administration (SPA) website provides a link to the complete text of each OMB Circular: http://www.ohsu.edu/research/rda/spa/fed eral.shtml http://www.ohsu.edu/research/rda/spa/fed eral.shtml

7. A-21 Topics Cost Accounting Standards (CAS) Direct vs. Indirect (F&A) Costs Allowable vs. Unallowable Costs Effort Reporting

8. A-21 Topics Cost Accounting Standards  Consistency in estimating, accumulating, and reporting costs  Consistency in allocating costs incurred for the same purpose  Accounting for unallowable costs  Cost accounting period (fiscal year)

9. A-21 Topics Direct Costs are costs that can be directly associated with a particular sponsored project, an instructional activity, or any other institutional activity Examples of Direct Costs:  Principal Investigator salary  Lab supplies  Scientific equipment

10. A-21 Topics Indirect (Facilities & Administrative) Costs are costs that are incurred for common or joint objectives and cannot be specifically identified with a particular sponsored project, instructional activity, or other institutional activity Examples of Indirect Costs:  Libraries  Maintenance  Research Administration

11. A-21 Topics Allowable Costs  Must be reasonable  Must be allocable  Must be treated consistently  Must conform to any limitation or exclusion “Prudent person” test

12. A-21 Topics Section J specifies which costs are allowable and unallowable as both direct and indirect costs Examples of Allowable Costs  Equipment, Professional Services, Transportation Examples of Unallowable Costs  Alcohol, Entertainment, Lobbying, Marketing

13. A-21 Topics Unallowable Costs Case Study

14. A-21 Topics Time and Effort Reporting The purpose of an effort reporting system is to provide a reasonable basis for distributing salary charges among direct and indirect activities OHSU uses a semi-annual, after-the-fact effort reporting system

15. A-21 Topics Effort Reporting Case Study

16. A-110 Overview 2 CFR Part 215 (formerly OMB Circular A- 110) Uniform Administrative Requirements for Grants & Agreements “This circular sets forth standards for obtaining consistency and uniformity among Federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals, and other non-profit organizations.”

17. A-110 Topics Financial Management Systems Cost Sharing Program Income Reports and Records Termination and Enforcement Close-Out Procedures

18. A-110 Topics OHSU is accountable to sponsoring agencies and must demonstrate that appropriate financial management systems are in place A-110 requires institutions receiving federal assistance to maintain “[e]ffective control over and accountability for all funds, property and other assets... and assure they are used solely for authorized purposes.” (Subpart C.21.b.3)

19. A-110 Topics Cost Sharing is the portion of project costs not borne by the Federal Government Cost Sharing can include:  Cash (from recipient)  Academic year effort (from recipient)  Third party In-Kind Contributions (from outside the recipient organization)

20. A-110 Topics Cost Sharing must be more than a token amount (ie, typically more than 1% of project costs) Cost Sharing represents institutional commitment to the project

21. A-110 Topics Mandatory Cost Sharing is required by the sponsor as a condition of making the award Voluntary Cost Sharing is not required by the sponsor but may become legally binding as a commitment reflected in the proposed budget  Committed (eg, over salary cap)  Uncommitted (not tracked by OHSU)

22. A-110 Topics Acceptable Cost Sharing must be:  Verifiable and documented in recipient records  Not included as matching for any other federal projects, nor paid from other federal awards  Necessary and reasonable  Allowable under applicable cost principles  Appropriate to all OMB Circular A-110 provisions

23. A-110 Topics Cost Sharing Case Study

24. A-110 Topics Program Income applies to funds earned during a project period Program Income includes  Registration fees for a training or conference award  Products or materials purchased on an award and sold after research has been conducted  Sale of information produced or acquired under the award

25. A-110 Topics Program Income may be:  Added to funds committed to the project  Deducted from total project allowable costs  Applied to non-federal share of project costs Recipient has no obligation to the Federal Government for funds earned after the project period unless the agency’s regulations or terms and conditions provide otherwise

26. A-110 Topics Program Income Case Study

27. A-110 Topics Property Management applies to property purchased under Federal awards, such as land, structures, equipment Exempt property is that on which the title vests with the recipient upon acquisition with no further obligations Property management also applies to supplies

28. A-110 Topics Property Management systems must:  Conduct a physical inventory every two years  Safeguard against damage, loss, and theft  Provide adequate maintenance  Maintain insurance  Sell competitively at highest return, when authorized

29. A-110 Topics Reports & Records: A-110 sets forth procedures for monitoring and reporting financial and program performance and the required reporting forms, including requirements for record retention

30. A-110 Topics Award recipients are responsible for managing and monitoring each project, program, function and activity supported by the award Award recipients are responsible for ensuring that sub-recipients have also met all audit requirements

31. A-110 Topics Technical reports must be completed not more than quarterly and not less than annually Reports must contain:  Comparison of actual accomplishments with set goals for the period  If applicable, reasons that goals were not met  Explanation for any cost over-runs or high unit costs

32. A-110 Topics Award recipients must notify the awarding agency whenever events occur that have a significant impact on the project or program, or when problems, delays or adverse conditions materially impair the ability to attain program objectives.

33. A-110 Topics Financial Status Report (FSR) is required on any federally sponsored project SPA submits financial reports to sponsors SPA Senior Financial Analyst sends copies of reports to departments for review (eg, End Date Memo, etc)

34. A-110 Topics Financial records, supporting documents, statistical records and all other records must be retained for three years from the date of final report, except when:  Litigation requires retention until matters have been resolved  Records are transferred to the agency, in which case retention requirements end  Other record retention requirements apply

35. A-110 Topics With agency approval, copies can be substituted for original records Electronically imaged records may be substituted for original records provided the institution establishes appropriate procedures

36. A-110 Topics Access to records is allowed to the agency, the inspector general and the comptroller general Agencies may not limit public access to the recipient’s records without justification

37. A-110 Topics Records Retention Case Study

38. A-110 Topics Types of Award Termination:  By the awarding agency  By the awarding agency with recipient consent  By the recipient Types of Enforcement:  Remedies for non-compliance  Hearings and appeals  Suspension and termination  Debarment

39. A-110 Topics Close-Out Requirements  All reports submitted within 90 days  All obligations liquidated within 90 days  Prompt payment by awarding agency  Recipient refund of unobligated cash advances  Accounting for real and personal property  Agency right to recover disallowances

40. A-133 Overview Effective July 1, 1992 (revised June 24, 1997), A-133 “sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of … non-profit organizations expending Federal awards” A-133 requires an annual external audit of all non-federal entities expending $500,000 or more annually in Federal funds

41. A-133 Overview A-133 defines the requirements of an audit and explains the responsibilities of the institution, the agency and the auditor A sample of Federal awards and their direct cost transactions is selected and examined to determine if expenditures and procedures were appropriate

42. A-133 Topics At OHSU, departments become involved in annual A-133 audits when SPA requires information on source documentation

43. A-133 Topics Audit Case Study

44. Summary This course has examined OMB circulars A-21, A-110, and A-133 Understanding these federal circulars will help ensure proper stewardship of federal funds

45. For More Information Come to other Post-award Education Program courses Visit the Sponsored Projects Administration website: http://www.ohsu.edu/research/rda/spa/ http://www.ohsu.edu/research/rda/spa/ Contact SPA with questions or concerns about these and other award management issues

46. OMB Circulars Questions?