uniform administrative requirements, cost principles, and ... · uniform guidance (2 cfr § 200)...
TRANSCRIPT
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Reporting
Presented by: Wayne BallNCSI Fiscal Support Team (FST)
Uniform Guidance (2 CFR § 200)
1. The Uniform Guidance (2 CFR § 200) streamlines and consolidates government requirements for receiving and using federal awards so as to reduce administrative burden and improve outcomes. It was published in the Federal Register (79 Fed. Reg. 75871) on December 19, 2014, and became effective for new and continuation awards issued on or after December 26, 2014. Please note the new regulations do not affect grant funds awarded prior to December 26, 2014, unless funds made available under those grants are carried forward into a new Federal fiscal year or a continuation grant.
2
Guidance in the Federal Register http://www2.ed.gov/policy/fund/guid/uniform-guidance/index.html
1.Federal Register notice 80 FR 43301, Published on July 22, 2015
2.Federal Register notice 80 FR 54407, Published on September 10, 2015
3
Overview: Review of Uniform Guidance ) (2 CFR § 200) 1.Audit Requirements2.Cost Principles3.Indirect Costs4.Internal Controls5.Procurement6.Risk and Subaward Management
4
U.S. Department of Education
The Uniform GuidanceAudit Requirements –
2 CFR Part 200 Subpart F
6
Uniform Guidance: Key Changes
Four Broad Types of Changes in Audit Requirementsand their impact at ED and its grantees
7 Updated June 25, 2015
Uniform Guidance: Overview
Prior to the issuance of the Uniform Guidance, the audit requirements relating to Single Audits were set forth in OMB Circular A-50, Audit Follow-up, OMB Circular A-133, and the Compliance Supplement to that Circular.
The audit requirements resulting from the Uniform Guidance are found at 2 CFR 200, Subpart F, and Appendix XI.
8 Updated June 25, 2015
Uniform Guidance: 4 Key Changes and Their Impact
1. Strengthen oversight by focusing audits where there is greatest risk of waste, fraud, and abuse of taxpayer dollars. Increases audit threshold from $500,000 to $750,000 (2 CFR
200.501). Gives more weight, in testing, to programs with high-risk audit
findings in prior years (2 CFR 200.518). Raises questioned cost threshold from $10,000 to $25,000 (2 CFR
200.516).
Lowers audit burden further by reducing percentage of expenditures tested.
9 Updated June 25, 2015
Uniform Guidance: 4 Key Changes and Their Impact
2. Provide for greater transparency of audit results by making Single Audit reports available to the public online, removing impediments to their distribution, and increasing information in audit reports. Complete reports will be available at the FAC website, with some
exceptions, related to Indian Tribes Subgrantees are no longer required to submit their reporting package to the
pass-through agency. FAC will be the source of subgrantees’ reports (2 CFR 200.512)
FAC submission process will be changed to require that audits be in text-based PDF and unlocked to improve accessibility.
More information available on audit findings and Federal expenditures.
10 Updated June 25, 2015
Uniform Guidance: 4 Key Changes and Their Impact
3. Audit follow-up will focus more on higher questioned costs, with greater attention to timely issuance of management decisions, and ensuring quality of audits resolved, and avoiding the recurrence of audit findings. 2CFR 200.513 Higher threshold for reporting questioned costs means fewer, but more
significant, findings resolved Six-months clock for issuing Management Decisions starts when FAC accepts
Subpart F audits; prior to Uniform Guidance it started when the agency resolving the audit received it
Federal agencies are to take part every six years in an audit quality evaluation projects.
By using Cooperative Audit Resolution practices Federal agencies are expected to significantly reduce the recurrence of audit findings among grantees.
11 Updated June 25, 2015
Uniform Guidance: 4 Key Changes and Their Impact
4. Strengthen Federal agencies’ use of the Single Audit process to support more efficient and effective grants management. 2 CFR 200.513 Agencies are to develop a baseline, metrics, and targets to track effectiveness
of agencies’ processes to follow up on audit findings and how they use Single Audits in awarding grants and improving accountability by grantees.
Federal agencies must establish two new positions: (1) a Single Audit Accountable Official to link the Single Audit process to improved program outcomes, including accountability by grantees, and (2) a Key Management Single Audit Liaison, over operational issues, ranging from training to cooperative audit resolution.
Cost Principles – 2 CFR Part 200 Subpart E
U.S. Department of Education
13
Uniform GuidanceTitle 2 of the Code of Federal Regulations,
Part 200 (2 CFR Part 200)Accepted by the Department of Education
in 2 CFR Part 3474
14
“This guidance does not change or modify any existing statute or guidance otherwise based on any existing statute.”
Authorities to consider when using 2 CFR Part 200
15
When does 2 CFR Part 200 start? Uniform Guidance (2 CFR Part 200) applies to: New and Continuation grants awarded on or after December 26,
2014
Former regulations (EDGAR Part 74 or 80 and OMB circulars) apply to: Grants awarded prior to December 26, 2014
16
Where are the cost principles requirements?
Grants made prior to 12/26/2014
Grants made on or after 12/26/2014
OMB Circulars A-21, A-87, A-1222 CFR Parts 220, 225, and 230
Uniform Guidance (2 CFR Part 200 Subpart E)
1717
Cost Principles: Overview Allowable Reasonable and Necessary Allocable Direct v. Indirect Special Considerations by Entity Type Selected Items of Cost Expanded Authorities
Indirect Cost Concerns Under the Uniform Guidance
U.S. Department of Education
19
What Are Indirect Costs? Costs that have been incurred for common or joint purposes.
Costs that benefit entire organization, and cannot be specifically identified to one cost objective.
An indirect rate ensures that each Federal agency providing funding picks up its fair share of indirect costs.
20
Key Changes in Indirect Costs 200.210(a)(15) Federal awarding agency must include the Indirect
cost rate on the Federal Award (Grant Award Notification (GAN)).
200.414(f) - Grantees that have never negotiated an indirect cost rate may use de minimis rate of 10% of MTDC
200.414(g) – One-time extension of a current negotiated rate for a period of up to 4 years.
200.331(a)(4) Sub-recipients can use Federal rate agreement, negotiate a rate, or de minimis rate.
22
23
24
25
Procurement Policies under the Uniform Guidance
U.S. Department of Education
27
Locating Procurement Standards §200.317 - 326
28
§200.317 Procurement by states
A State must use the same procedures it uses to procure property and services under a Federal award as it uses for all other procurements using non-federal funds.
States will comply with §200.322 Procurement of recovered materials.
All other grantees and subgrantees must follow sections200.318 through 200.326.
Risk Management System
29
What is Risk?
Risk is the possibility that an event will occur and adversely affect the achievement of objectives. (GAO – The Green Book)
What is Risk Management?
Risk management can be described asthe continuous process of assessingrisks, reducing the potential that anadverse event will occur, and puttingsteps in place to deal with any eventthat does occur. (GAO)
Risk Management
Risk Assessment
Risk MitigationRisk-Based
Monitoring
Subrecipient Monitoring under the Uniform Guidance1. Subaward notice includes required information
2. Evaluate subrecipient’s risk of noncompliance
3. Impose specific conditions if appropriate
4. Monitor the activities of the subrecipient as necessary
2 CFR § § 200.328(a) and 331
33
Subrecipient Monitoring under the Uniform Guidance Continued5. Based on assessment of risk, consider monitoring
activities (TA, on-site monitoring, etc)
6. Verify that every subrecipient is monitored as required
7. Consider if audits and monitoring requires adjustment in entities own records
8. Consider taking enforcement action2 CFR §§200.328(a) and 331
34
Documents to Assist with Designing and Implementing a Risk Management System
35
Documents Needed
1.For full list see Grads 3602.Examples include:
• Current monitoring procedures and protocols• Proposed monitoring procedures and protocols• Monitoring cycle, if applicable• Risk rubric/assessment/factors• Summary of IDEA-related fiscal monitoring and
audit findings for prior two years
36
Resources
Relevant resources have been posted on https://osep.grads360.org/#program/fiscal-monitoring, including:• OSEP’s Risk Management System
PowerPoint• Monitoring Protocols• Fiscal Monitoring Overview• Related Resources
37
Resources (cont.)• GAO – The Green Book) http://www.gao.gov/greenbook/overview
• UGG- http://www.grants.gov/web/grants/learn-grants/grant-policies/omb-uniform-guidance-2014.html
• EDGAR- http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html
• IDEA- http://www2.ed.gov/policy/speced/guid/idea/idea2004.html
Discussion Questions on Current Monitoring Procedures
• How do you select LEAs for monitoring?• Do you currently conduct a risk assessment?• Do you conduct programmatic monitoring and
fiscal monitoring together, separately, or some combination?
• Do you monitor jointly with other offices responsible for Federal programs (e.g., Title I)?
• How doe the results of monitoring inform the TA provided to LEAs?
39
Contact Information
40
Wayne [email protected] Central
Jana [email protected] PlainsWestern
Anne Louise [email protected]
THANK YOU!http://ncsi.wested.org | @TheNCSI