Navigating the OMB Super Circular

Transcription

2014 RPIC Region II
Finance, Human Resources & Management
Convention
September 24 – 26, 2014 | Mahwah, NJ | Sheraton Mahwah Hotel
Navigating the OMB
Super Circular
Thursday, September 25, 2014
10:15 am – 2:00 pm
Presented by:
Janet S. Johnson, CPA, CMA, Senior Manager
NONPROFIT AND GOVERNMENT PRACTICE
www.wipfli.com/ngp | 888.876.4992
Reproduction or use of any training materials in this manual, except within a participant’s agency
without express written permission is prohibited by copyright law. © Wipfli LLP
Trainer: Janet S. Johnson, CPA, CMA, Senior Manager
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Outcomes
• Understand the new regulations:
– Similarities and differences from the current
regulations
• Your next steps:
– What must change for your organization?
– Who needs to be involved?
– How will you document changes, train staff &
implement?
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Agenda
• History
• Overview of 2 CFR Part 200
• Subparts A – Acronyms & Definitions,
• Subpart B – General Provisions
• Subpart C – Pre-Federal Award Requirements
and Contents of Federal Awards
• Subpart D – Post Award Requirements
• Subpart E – Cost Principles
• Subpart F – Audit Requirements
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2 CFR Part 200
New Regulations will replace:
•
Administrative Requirements – A-110 for institutions of
higher education, hospitals and nonprofit organizations; and
the Common Rule (A-102) for units of government
•
Cost Principles – A-21 for educational institutions, A-87 for
units of government, and A-122 for nonprofit organizations
•
Single Audit Requirements – A-133 and A-50
•
A-89, Data Collection Requirements
•
Pending further review – cost principles for hospitals, 45 CFR
Part 74 Appendix E
“The new guidance will streamline the language from
8 existing OMB circulars into 1 document”
Super Circular!
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Major Policy Reforms
Reducing Administrative Burden and Waste, Fraud, and
Abuse:
1. Eliminating Duplicative and Conflicting Guidance
2. Focusing on Performance over Compliance for
Accountability
3. Encouraging Efficient Use of Information Technology
and Shared Services
4. Providing For Consistent and Transparent Treatment of
Costs
5. Limiting Allowable Costs to Make Best Use of Federal
Resources
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Major Policy Reforms
Reducing Administrative Burden and Waste, Fraud, and
Abuse: (cont.)
6. Setting Standard Business Processes Using Data
Definitions
7. Encouraging Non-Federal Entities to Have FamilyFriendly Policies
8. Strengthening Oversight
9. Targeting Audit Requirements on Risk of Waste, Fraud,
and Abuse
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Table of Contents
Subpart A (200.000) – Acronyms and Definitions
Subpart B (200.100) – General Provisions
Subpart C (200.200) – Pre-Federal Awards
Requirements and Contents of
Federal Awards
Subpart D (200.300) – Post Federal Award Regulations
Subpart E (200.400) – Cost Principles
Subpart F (200.500) – Audit Requirements
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Subpart A. Acronyms and Definitions
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Subpart A. Acronyms & Definitions
§200.1 – 99 Definitions
99 Definitions – Combines definitions from all prior
circulars. Examples:
• §200.20 Computing devices
• §200.22 & 23 Contract and Contractor
• §200.61 Internal controls
• §200.67 Micro-purchase
• §200.79 Personally Identifiable Information
• §200.82 Protected PII
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Subpart B. General Provisions
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§200.100 Purpose
• Uniform administrative requirements, cost
principles and audit requirements
• Federal awarding agencies must not impose
additional or inconsistent requirements
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§200.101 Applicability
(b)(1) Non-Federal entities must comply with
requirements regardless of whether the entity is
a recipient or subrecipient…
Note: “Must” means “required”. “Should” means
“recommended” or “best practice”. Both terms are
used in the Circular
from OMB webinar, January 27, 2014
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§200.105 Effect on other issuances
All administrative requirements, program manuals,
handbooks and other non-regulatory materials
must be superseded upon implementation of this
Part
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§200.109 Review Date
OMB will review this part at least every 5 years
after 12/26/2013
§200.110 Effective Date
Federal awarding agencies must implement
effective 12/26/2014
Audit requirements effective for fiscal years
beginning after 12/26/2014
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NEW§200.113 Mandatory Disclosures
Non-Federal entities must disclose, in a timely
manner, in writing to the awarding agency or
pass-through entity all violations of Federal
criminal law involving fraud, bribery or gratuity
violations.
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Janet’s Top 10 Changes
1. Cost allocation options
2. PARs
3. Procurement
4. Computers as supplies
5. Recognition of electronic media
6. Audit threshold changes
7. Family friendly policies
8. Internal controls focus in admin requirements
9. Fund raising to support program
10. No employee morale
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Quiz – Introduction to 2 CFR Part 200
Select True or False for each of the following:
True
False
1. The terms “contractor” and “subrecipient” mean the same
thing.
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2. Proceeds from sale of equipment of less than $5,000 are
unrestricted income.
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3. Grantees can keep no more than $250 in interest earned.
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4. Recipients must have written procedures to minimize
the time between receipt of federal funds and cashing of
checks.
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5.Prior approval is required to use an asset as a trade-in.
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Quiz – Introduction to 2 CFR Part 200
Select True or False for each of the following:
True
False
6. In these regulations, when the word “should” is used it
means you are required to comply with the guidance.
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7. A recipient is not required to get bids or quotes for a micropurchase.
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8. Recipients have 90 days to take action when instances of
noncompliance are identified in audit findings.
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9. Indirect cost not reimbursed (unrecovered) by a federal award can
be used as in-kind.
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10. The Federal awarding agency may, at its option, restrict the
transfer of funds among direct cost categories for Federal awards
that exceed the SAT and the cumulative amount of such transfers
exceeds or is expected to exceed 10% of the total budget.
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Subpart C. Pre-Federal Award Requirements and
Contents of Federal Awards
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Subpart C. Pre-Federal Award
§200.205 Federal awarding agency review
of risk posed by applicants
(c) Federal awarding agency review of risk
posed by applicants
(1) Financial stability
(2) Quality of management systems
(3) History of performance
(4) Reports and findings from audits
(5) Ability to effectively implement requirements
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Subpart D. Post-Federal Award Requirements
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§200.301 Performance measurement
• Relate financial data to performance
accomplishments
• Provide cost information to demonstrate cost
effective practices
• Awarding agency to provide clear performance
goals, indicators and milestones
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§200.302 Financial Management
(b) Financial management system must:
(1) Identify funds received and expended
(2) Disclose accurate, current and complete financial
results
(3) Identify source and application of funds
(4) Provide effective controls and accountability for funds,
property and other assets
(5) Compare budget to actual results
(6) Provide for written procedures for payment requirements
(7) Provide for written procedures for determining allowability
of costs
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§200.303 Internal controls (new section)
Non-Federal entity must:
(a) Establish internal controls comply with COSO
Committee of Sponsoring Organizations of the Treadway
Commission (COSO)
(b) Comply with federal statutes, regulations, and terms
and conditions
(c) Evaluate and monitor compliance
(d) Take prompt action for noncompliance
(e) Take reasonable measures to safeguard PII
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§200.305 Payment
(b) (1) Minimize the time between transfer of
funds and disbursement
(a) Advance payments limited to the
minimum amount needed and timed with
actual, immediate cash requirements
Time and amount of advances must be as
close as administratively feasible to actual
disbursements
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§200.305 Payment (cont.)
(b) (5) Must disburse funds available from program income,
rebates, refunds, contract settlements, audit recoveries,
and interest earned on such funds before requesting
additional cash payments
(7) Banks
(i) Federal and pass-through agencies must not require
separate depository accounts
(ii) Insured accounts are required for advance
payments
(8) Interest-bearing accounts are required for advance
payments
(9) NEW Can keep up to $500 in interest. Return excess to
PMS
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§200.306 Cost sharing or matching
(b)
(1) Verifiable from records
(2) Not match for other Federal awards
(3) Necessary and reasonable
(4) Allowable under cost principles
(5) Not Federal funds unless allowed by statute
(6) In the approved budget
(7) Confirm to other provisions as applicable
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§200.306 Cost sharing or matching (cont.)
(c) Unrecovered indirect may be included as cost sharing or
matching
(d) Value in accordance with cost principles
(e) Volunteer services
–
Integral and necessary
–
Rates for similar work in the organization or labor market
–
Fringe benefits can be included in the rate calculation
(f) Employer provided services – rate of pay plus paid fringe
benefits
(g) Donated supplies – reasonable, fair market value
(h) Equipment and buildings – independent appraisal for space
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§200.306 Cost sharing or matching (cont.)
(i) Value of donated property:
(1) Must use an independent certified appraiser to
value donated land and buildings
(3) Must use an independent appraiser to value
donated space
(j) Fair market value of goods and services must
be documented by the same methods used
internally
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§200.308 Revision of budget or program
plans
(a) Project budget must relate to performance
(e) The Federal agency may, at its option, restrict transfer
of funds among direct cost categories for
cumulative transfers exceeding 10% for grants
exceed the Simplified Acquisition Threshold
§200.309 Period of performance
Charge to the award only allowable costs incurred during
the period of performance
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§200.313 Equipment
(a) Conditional title vests in the non-Federal entity
(c) Use:
(1) Use in program as long as needed
–
Prior approval to encumber
–
When not needed, use in the following priorities:
(i) Other projects funded by the same Federal agency
(ii) Projects funded by other Federal agencies
(2) User fees may be charged if equipment is used by other programs
(3) Cannot be used to provide services for less than private companies
charge
(4) NEW Use as trade-in without prior approval
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§200.313 Equipment (cont.)
(e) Disposition
(1) NEW FMV $5,000 or less, prior approval not needed to
dispose of and no further obligation to the awarding
agency
(2) FMV greater than $5,000, must ask for instructions.
•
No response in 120 days, may keep or sell but must pay
awarding agency its share of proceeds of FMV
•
Non-Federal entity may keep $500 of proceeds
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§200.314 Supplies
(a) NEW Supplies includes computing devices
costing less than $5,000
• Residual value greater than $5,000 at completion of
project, use in other Federal programs; or
compensate awarding agency and use for other
purposes
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§200.318 General procurement standards
(a) Must use own documented procurement
procedures which reflect applicable laws and
regulations
(c) (1) Must maintain written standards of conduct
covering conflicts of interest
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(2) NEW If the non-Federal entity has a parent, affiliate, or
subsidiary organization that is not a state, local
government, or Indian tribe, must also maintain written
standards of conduct covering organizational conflicts of
interest.
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(d) Avoid purchasing unnecessary or duplicative
items. Lease vs. purchase analysis where
appropriate
(e) Encouraged to enter into state and local
intergovernmental or inter-entity agreements
NEW for nonprofits
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§200.318 General procurement standards (cont.)
(f) Encouraged to use Federal excess and surplus
property NEW for nonprofits
(g) Encouraged to use value engineering in
construction projects. (Analysis of each contract
item to ensure overall lower cost) NEW for
nonprofits
(h) Award contracts to responsible contractors.
Consider integrity, compliance with public policy,
records of past performance and financial and
technical resources
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§200.318 General procurement standards (cont.)
(i) Maintain records with rationale for the method of
procurement, selection of contract type,
contractor selection and basis for price
(j) NEW May use time and materials contract in
some situations
(k) Non-federal entity is responsible for settlement of
all contractual and administrative issue
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§200.319 Competition
(a) Full and open competition
(b) NEW No geographic preferences unless
mandated by statute
(c) Must have written procedures; name brands used
only as a description
(d) NEW Pre-qualified vendors: Must ensure lists are
current and include enough qualified sources to
ensure competition.
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§200.320 Methods of procurement to be
followed
(a) NEW Micro-purchase:
• Aggregate dollar amount per purchase < $3,000
($2,000 if subject to the Davis-Bacon Act)
• Distribute equitably among qualified suppliers
• May be awarded without competitive quotes
(b) Small purchase procedures:
• Up to $150,000 (Simplified Acquisition Threshold)
• Relatively simple and informal
• Competition is required from adequate number of
qualified sources.
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Greater than $150,000 (SAT), use sealed bids or
competitive proposals
(c) Sealed bids:
(1) Required conditions:
(i) Complete, adequate and realistic specifications
(ii) Two or more responsible bidders
(iii) Selection can be made principally on price
(2) Requirements:
(i)
Bids publicly advertised
(ii) Bids include all information needed for proper response
(iii) Bids publicly opened
(iv) Firm fixed price contract awarded
(v) Bids may be rejected if there is a sound documented reason
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followed
(d) Competitive proposals: Used when conditions not
appropriate for sealed bids. Requirements:
(1) Bids publicly advertised
(2) Bids solicited from adequate number of qualified
sources
(3) Written method for conducting technical evaluations
and for selected contractors
(4) Contract awarded to proposer most advantageous to
the program, with price and other factors considered
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followed
(f) Noncompetitive proposals. Solicitation from only 1
source (sole source). Use in following
circumstances:
(1) Item is available only from a single source;
(2) Emergency will not permit a delay resulting from a
competitive solicitation;
(3) Federal awarding or pass-through agency expressly
authorizes noncompetitive proposal in response to a
written request; or
(4) After solicitation, competition is determined inadequate
(only 1 proposer)
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§200.321 Contracting with small and minority
businesses, women’s business enterprises, and
labor surplus area firms (NEW). (A labor surplus area
is designated by the Dept. of Labor.)
(a) Non-federal entities must take all necessary
affirmative steps to assure minority businesses,
women’s business enterprises and labor surplus
area firms are used when possible
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§200.323 Contract cost and price
(a) NEW For procurements over the Simplified Acquisition
Threshold, must perform a cost or price analysis before
receiving bids or proposals.
(b) NEW Must negotiate profit as a separate element of the
price for each contract in which there is no price
competition and in all cases where cost analysis is
performed.
(c) The cost plus a percentage of cost and percentage of
construction cost methods of contracting must not be used.
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2 CFR part 200 Appendix II
Appendix II. CONTRACT PROVISIONS
A. Administrative, contractual or legal remedies where contractors violate
contract terms (all contracts in excess of $150,000) NEW
B. Termination for cause and convenience (contracts in excess of $10,000) NEW
C. Equal Employment Opportunity
D. Davis-Bacon Act when required by Federal program legislation (construction in
excess of $2,000)
E. Contract Work Hours and Safety Standards Act (construction in excess of
$100,000; or others involving mechanics or laborers in excess of $2,500)
F. Rights to Inventions Made Under a Contract or Agreement
G. Clean Air Act and Federal Water Pollution Control Act (contracts and
subgrants in excess of $150,000)
H. Mandatory standards relating to energy efficiency NEW
I.
Debarment and Suspension
Check vendors at www.sam.gov, System for Award Management, click on
“Search Records”
J. Anti-Lobbying (contractors in excess of $100,000)
K. Procurement of recovered materials (units of government)
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Performance and Financial Monitoring and Reporting
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§200.328 Monitoring and reporting
program performance (cont.)
(d) The non-Federal entity must inform the Federal
awarding agency or pass-through entity as soon
as the following types of conditions become
known:
(1) Problems, delays, or adverse conditions which will
materially impair the ability to meet the objective of the
Federal award.
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§200.328 Monitoring and reporting
program performance (cont.)
(2) Favorable developments which enable meeting time
schedules and objectives sooner or at less cost than
anticipated or producing more or different beneficial
results than originally planned.
(e) The Federal awarding agency may make site
visits as warranted by program needs.
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NEW§200.329 Reporting on real property
The Federal awarding agency or pass-through entity must
require a non-Federal entity to submit reports at least annually
on the status of real property in which the Federal government
retains an interest, unless the Federal interest in the real
property extends 15 years or longer.
In those instances where the Federal interest attached is for a
period of 15 years or more, the Federal awarding agency or
pass-through entity, at its option, may require the non-Federal
entity to report at various multi-year frequencies.
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§200.331 Requirements for pass-through entities
(a) List of required information for every subaward, including:
1. Federal Award Identification (13 items required to be disclosed)
2. All requirements, regulations and terms and conditions of the
award
3. Any additional requirements imposed by the pass-thru entity
4. NEW An approved federally recognized indirect cost rate
negotiated between the subrecipient and the Federal
government or, if no such rate exists, either a rate negotiated
between the pass-through entity and the subrecipient , or a de
minimis indirect cost rate of 10% of MTDC.
5. Must allow access to records
6. Terms and conditions of closeout
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NEW§200.335 Methods for collection,
transmission and storage of information
Should collect, transmit and store award-related information in
open and machine-readable formats rather than paper
No need to print electronic records
Can scan paper records if there are quality controls, the
electronic records can’t be changed and are readable
§200.336 Access to records
(c) Awarding and pass-through have access to records as long
as they exist
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§200.343 Closeout
(a) Submit no later than 90 calendar days after the end of
the period of performance, all financial, performance
and other reports required. Extensions may be
approved
(b) Liquidate all obligations no later than 90 calendar days
after the end of the period of performance. May be
extended
(g) NEW Awarding agency should complete all closeout
actions no later than 1 year after receipt and
acceptance of all final reports
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§200.344 Post-Closeout adjustments and continuing
responsibilities.
(a) The closeout of a Federal award does not affect any of the
following.
(1) The right of the Federal awarding agency or pass-through entity to
disallow costs and recover funds on the basis of a later audit or
other review. Awarding agency must make any cost disallowance
determination and notify within the record retention period. NEW
(2) The obligation of the non-Federal entity to return any funds due as a
result of later refunds, corrections, or other transactions including
final indirect cost rate adjustments.
(3) Audit requirements
(4) Property management and disposition requirements
(5) Records retention
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Subpart E. Cost Principles – General Provisions
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§200.400 Policy Guide
The non-Federal entity:
(a) Is responsible for efficient and effective administration
(b) Is responsible for complying with agreements,
objectives and terms and conditions
(c) Is responsible for its form of organization and
management techniques
(d) Has operations consistent with cost principles
(e) Applies accounting on a consistent basis
(g) May not earn or keep profit unless expressly authorized
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§200.403 Factors affecting allowability of costs
(a) Be necessary and reasonable
(b) Conform to limitations
(c) Be consistent with other organization activities
(d) Be treated consistently
(e) Be determined in accordance with generally accepted
accounting principles, as appropriate
(f) Not be included as cost or match in any other
federally funded program (current or prior)
(g) Be adequately documented
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NEW§200.407 Prior Written Approval
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 cost. The absence of prior written approval on any element
of cost will not, in itself, affect the reasonableness or
allocability of that element, unless prior approval is specifically
required
(a) – (v) list of sections in 2 CFR Part 200 requiring
prior approval
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§200.411 Adjustment of previously negotiated
indirect (F&A) cost rates containing unallowable
costs
If a negotiated indirect cost rate is determined to contain
unallowable costs:
•
The Federal government will require repayment
including interest (NEW) of the unallowable costs
charged to a past period.
•
For rates that are to be used currently or in the future
unallowable costs will be removed and rates adjusted.
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Subpart E. Cost Principles – Direct and Indirect
§200.413 Direct Costs
(a) Direct costs are those that can be easily and
accurately assigned to a specific award
(c) NEW Salaries of administrative and clerical staff
should normally be treated as indirect. Direct
charge only if all of the following are met:
(1) Integral to the project,
(2) Specifically identified with the project,
(3) Explicitly included in the budget or have prior written
approval and,
(4) Not recovered as indirect.
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§200.414 Indirect Costs (cont.)
(f) NEW Any non-Federal entity that has never
negotiated an IDCR may elect to charge a de
minimis rate of 10% of modified total direct costs
(MTDC) which may be used indefinitely.
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§200.414 Indirect Costs (cont.)
(g) NEW Any non-Federal entity that has a federally
negotiated indirect cost rate may apply for a onetime extension of the current negotiated indirect
cost rate for a period of up to 4 years.
• Must be approved by a cost negotiator
• If approved, may not request a rate review until
the extension ends
• At end of extension, must apply for a new rate
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Selected Items of Cost Quiz
Unallowable
Prior
Approval
Allowable
1. Flowers for a hospitalized employee
2. Audit services for an organization that
expended $600,000 in federal funds
3. Annual membership dues in the National
Head Start Association
4. 2% per year use allowance on a fullydepreciated building
5. Cost of fund raising to purchase books for the
Head Start program
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Selected Items of Cost Quiz
Unallowable
Prior
Approval
Allowable
6. Hiring a consultant to prepare a proposal for a
new federal grant
7. Alteration of facilities for a specific federal
award
8. Home office workspace for an employee who
lives 50 miles from your office
9. Child care for an employee who travels to
attend a conference required for her position
10. Cost of maintaining the vacant home of a
relocated employee for up to 1 year
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Subpart E. Cost Principles – Selected Items of Cost
§200.425 Audit services
•
•
•
Audits in accordance with Single Audit Act are
allowable
Audit costs are unallowable if the entity doesn’t
meet the Single Audit threshold of $750,0000
(NEW)
Pass-through entity may charge an award for
the cost of agreed-upon procedures to monitor
subrecipients who are exempt from Single Audit
Act
– Limited in scope to activities allowed or unallowed,
allowable costs, eligibility and reporting
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NEW§ 200.428 Collections of improper
payments
Costs to recover improper payments are allowable as
direct or indirect, as appropriate
Amounts collected must be used in accordance with
cash management standards (used before Federal
funds)
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§200.430 Compensation – personal services
(a)Compensation includes all remuneration paid
currently or accrued and may not be limited to
salaries and wages. Allowable if:
(1) Reasonable for the services rendered
(2) Adheres to entity’s written policies
(3) Is supported by documentation based on these
principles
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§200.430 Compensation – personal services (cont.)
(b) Must be reasonable – consistent with that paid for similar
work, or comparable to that paid for similar work in
the community
(d) Allowable compensation for certain employees is subject
to a ceiling in accordance with statute
(f) Incentive pay for cost reduction, efficient performance,
suggestion awards, etc. allowable if an agreement was
in place before the work was performed
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(i) NEW Standards for Documentation of Personnel
Services
(1) Records accurately reflect work performed
(i)
Supported by a system of internal controls that assures
charges are accurate, allowable and properly allocated
(ii) Part of official records of the entity
(iii) Reflect total activity
(iv) Include Federal and non-Federal activities
(v) Comply with accounting policies
(vii) Support distribution to two or more activities or cost
objectives
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Services
(1) Records accurately reflect work performed (cont.)
(vii) Budget estimates alone cannot be used as support for
charges but may be used for interim accounting
purposes
(A) Must be reasonable approximations
(B) Significant changes must be entered in a timely
manner
(C) Internal control system includes review of after-thefact charges and adjustments made so the final
amount charged is accurate, allowable and properly
allocated
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Services (cont.)
(2) If records meet these standards, no additional
documentation required
(3) Must comply with Dept. of Labor requirements for nonexempt
(4) Salaries and wages of employees used for in-kind must
meet same requirements
(6) Cognizant agencies encouraged to approve alternative
methods based on outcomes
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Services (cont.)
(7) Approved blended funding – may use a performancebased measure. Must be approved by all funding sources
–
Examples of performance-based measures: child or
client counts
(8) Entities who cannot meet these standards may be
required by the Federal government to maintain
personnel activity reports (PARs)
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“While many non-Federal entities may still find that existing
procedures in place such as personal activity reports and similar
documentation are the best method for them to meet the internal
control requirements, this final guidance does not specifically
require them.
The focus in this final guidance on overall internal controls mitigates
the risk that a non-Federal entity or their auditor will focus solely on
prescribed procedures such as reports, certifications, or certification
time periods which alone may be ineffective in assuring full
accountability.”
from Comments to the Regulations
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§200.431 Compensation – fringe benefits
(a) Allowable if reasonable and required by law or
entity policy
(b) (3) Leave accounting methods:
(i) Cash basis – recognize when taken and paid
–
Payments for unused leave when an employee
terminates are allowable as indirect costs in the year
of payment
(ii) Accrual basis – allowable costs are the lesser of the
amount accrued or the amount funded
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§200.431 Compensation – fringe benefits
(cont.)
(e) (3) Actual claims paid to or on behalf of employees or
former employees for workers' compensation,
unemployment compensation, severance pay, and
similar employee benefits (e.g., post-retirement
health benefits), are allowable in the year of
payment provided that the entity follows a
consistent costing policy and they are allocated
as indirect costs.
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NEW §200.432 Conferences
Definition: meeting, retreat, seminar, symposium,
workshop or event to disseminate technical information
beyond the non-Federal entity
Allowable costs (appropriate, reasonable and necessary)
paid by the host:
•
•
•
•
•
Facility
Speaker fees
Meals and refreshments
Local transportation
Cost of identifying but not providing dependent care
resources
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38
NEW§200.433 Contingency provisions
(b) May be budgeted for foreseeable events
(construction cost, IT systems)
(c) Payments to contingency reserves are
unallowable (cannot draw funds unless you have
incurred an actual expense for an event you have
budgeted)
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§ 200.435 Defense and prosecution of
criminal and civil proceedings, claims,
appeals and patent infringements (cont.)
In general, allowability of legal fees in defense of
criminal, civil or administrative proceedings depends on
the result
•
Fees are allowable:
– With a result of a favorable outcome
– If approved in a settlement with the federal government
– Condition of the award
Otherwise unallowable, including appealing a federal agency
decision
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39
§200.436 Depreciation
(d)(4) NEW No depreciation allowed on assets that
have outlived their useful lives
•
No use allowance
•
NEW If use allowance was taken on an asset not fully
depreciated, you may convert to depreciation but total
of both depreciation and use allowance may not exceed
cost of the asset
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§200.437 Employee health and welfare costs
(a)Costs in accordance with documented policies for
improvement of working conditions, employeremployee relations, health and performance are
allowable
•
NEW Costs for improvement of morale specifically
excluded
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§ 200.438 Entertainment Costs
Costs of entertainment are unallowable, except:
When entertainment has a programmatic purpose
and is authorized either in the approved budget* or
with prior written approval
* Note this is one of the few places in these regulations where
an approved budget provides approval.
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§ 200.439 Equipment and other capital
expenditures
(b) Costs of equipment, buildings and land are
allowable with prior written approval
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41
§ 200.442 Fund raising and investment
management costs
(a) Costs of fund raising including financial
campaigns, solicitation of gifts, etc., are
unallowable.
NEW Fund raising costs for the purposes of
meeting federal program objectives are allowable
with prior written approval.
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NEW§ 200.460 Proposal costs
Proposal costs are the costs of preparing bids,
proposals, or applications on potential Federal and nonFederal awards or projects.
Costs incurred in the current year of both successful
and unsuccessful proposals normally should be
treated as indirect (F&A) costs and allocated
currently to all activities.
No proposal costs of past accounting periods will be
allocable to the current period.
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42
§ 200.465 Rental costs of real property and
equipment (cont.)
(5) Rental costs under capital leases are allowable only up
to the amount that would be allowed had the nonFederal entity purchased the property on the date the
lease agreement was executed. GAAP must be used to
determine whether a lease is a capital lease.
(6) The rental of any property owned by any individuals or
entities affiliated with the non-Federal entity for
purposes such as home office workspace is
unallowable. (NEW)
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§ 200.471 Termination costs
(a) Costs of items usable in other work not allowable
(d) Rental costs under unexpired leases are generally
allowable if:
(1) The amount is reasonable
(2) Effort is made to terminate, assign or otherwise reduce
the cost
(e) Settlement expense including accounting, legal,
clerical or similar costs are generally allowable
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43
§ 200.474 Travel costs
(a) Costs may be charged on an actual cost basis, on
a per diem or mileage basis in lieu of actual costs
incurred, or on a combination of the two, provided
the method used is applied consistently.
(b) NEW Documentation must justify:
(1)Participation is necessary for the federal award; and
(2)Costs are reasonable and consistent with entity policy
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§ 200.474 Travel costs (cont.)
(c) (1) NEW Temporary dependent care costs
resulting from travel to conferences are
allowable provided that:
(i) Costs are a direct result of travel;
(ii) Costs are consistent with the travel policy; and
(iii) Costs are temporary during the travel period
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44
Subpart F. Audit Requirements
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Audits
§ 200.501 Audit Requirements
(a) Audit required. A non-Federal entity that expends
$750,000 (NEW) or more during the non-Federal
entity's fiscal year in Federal awards must have a
single or program-specific audit.
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Audits
§ 200.501 Audit Requirements (cont.)
(d) NEW Exemption when Federal awards expended
are less than $750,000.
A non-Federal entity that expends less than $750,000
during the non-Federal entity's fiscal year in Federal
awards is exempt from Federal audit requirements for
that year, but records must be available for review or
audit by appropriate officials of the Federal agency,
pass-through entity, and Government Accountability
Office (GAO).
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Auditors
§ 200.516 Audit Findings
(a) Audit findings reported. The auditor must report
the following as audit findings in a schedule of
findings and questioned costs:
(1) Significant deficiencies and material weaknesses in
internal control over major programs and significant
instances of abuse relating to major programs.
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Auditors
§ 200.516 Audit Findings (cont.)
(2) Material noncompliance with the provisions of Federal
statutes, regulations, or the terms and conditions of
Federal awards related to a major program.
(3) Known or likely known questioned costs that are greater
than $25,000 (NEW) for a type of compliance
requirement for a major program.
(4) Known questioned costs that are greater than $25,000
(NEW) for a Federal program which is not audited as a
major program, if the auditor becomes aware of
questioned costs for such a program.
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Auditors
§ 200.516 Audit Findings (cont.)
(5) The circumstances concerning why the auditor's report
on compliance for each major program is other than an
unmodified opinion.
(6) Known or likely (NEW) fraud affecting a Federal award,
unless such fraud is otherwise reported as an audit
finding in the schedule of findings and questioned costs
for Federal awards.
(7) Instances where the results of audit follow-up
procedures disclosed that the summary schedule of
prior audit findings prepared by the auditee materially
misrepresents the status of any prior audit finding.
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47
Summary and Next Steps
• Learn what new regulations and changes from
the current regulations will impact your agency
• Develop a plan to implement the necessary
changes
• Educate others in your organization on the
changes and include them in the planning
process
• Watch for guidance from your funding sources
© Wipfli LLP
95
© Wipfli LLP
96
Janet’s Top 10 Changes
1. Cost allocation options
2. PARs
3. Procurement
4. Computers as supplies
5. Recognition of electronic media
6. Audit threshold changes
7. Family friendly policies
8. Internal controls focus in admin requirements
9. Fund raising to support program
10. No employee morale
48
How We Can Help
Management and Best Practices
Consulting
 Business Process Review
 Process Improvement
 Monitoring Plan Development
 Cost Allocation Plan Design
 Policies and Procedures
Training
 Best Practices Webinars
 On-Site Training
 Board Governance Training
DVD Series
Products
 Finance, HR, and Technology
Policy and Procedure Templates
(ProPackage)
 PAR Tool Kit
 My Wipfli Membership Service
© Wipfli LLP
97
For More Information on How We Can Help
Visit www.wipfli.com/ngp for more
details or email
[email protected]
© Wipfli LLP
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49
Please connect with me:
www.facebook.com/WipfliNGP
99
© Wipfli LLP
Bring me to your agency
Janet S. Johnson, CPA, CMA
Senior Manager
[email protected]
608.270.2970
© Wipfli LLP
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50
Evaluation!
Please turn in your evaluation as
you leave. We love your
feedback!
Thank you!
© Wipfli LLP
101
© Wipfli LLP
102
www.wipfli.com
51

Navigating the OMB Super Circular

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