rules governing sponsored projects (aka omb circulars) presented by beverly blakeney, diane cummings...

Rules Governing Rules Governing Sponsored ProjectsSponsored Projects(aka OMB Circulars)(aka OMB Circulars)

Presented by Beverly Blakeney, Diane Cummings and Julie Macy

ObjectivesObjectivesTo have an understanding of the

OMB Circulars that apply to UVMTo understand how different

agencies may implement each circular

To understand how UVM implements these rules through our policies and procedures

SPONSORED PROJECTS TRAINING PROGRAM

OMB CircularsOMB CircularsThe Office of Management and

Budget (OMB) maintains a set of circulars containing requirements federal agencies must follow when issuing federal funds.

Each of the funding agencies pass down requirements established under the circulars to the recipients of the federal funds through the implementation of their own sponsor specific policies.


OMB Circulars (Continued)OMB Circulars (Continued)

The Circulars with which UVM must comply are:

•OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations

•OMB Circular A-110, Uniform Administrative Requirements for Grant and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations

•OMB Circular A-21, Cost Principles for Educational Institutions


Sources of Guidance for Sources of Guidance for Sponsored ProjectsSponsored Projects


A-21A-21Cost Principles for Educational Institutions

-First it gives instructions and guidance as to what types of costs are allowed to be charged to federal awards.-Secondly, it gives instructions to recipients on how they should develop and apply their facilities and administrative (F&A) cost rates.


A-21A-21Difference between direct and F&A

costs◦DIRECT COSTS: costs that can be, relatively

easily, identified with a particular sponsored project with a high degree of accuracy.

◦FACILITIES AND ADMINISTRATIVE COSTS (F&A): costs that are incurred for common or joint objectives, and therefore, cannot be readily and specifically identified with a particular sponsored project. (a.k.a. indirect costs or overhead costs)


A-21 Four Guiding A-21 Four Guiding PrinciplesPrinciplesIs the cost REASONABLE?Is the cost ALLOCABLE to the

project?Is the cost CONSISTENTLY

TREATED?Is the cost ALLOWABLE?


A-21 Four Guiding A-21 Four Guiding PrinciplesPrinciplesReasonable - being necessary for

the operation of the project and paying a price that a prudent person would pay for the same item.

Allocable – is defined as making sure that the item or service charged to the project benefits the project and advances the work being performed.◦ It benefits both the work under the

sponsored agreement and other work of the institution in proportions that can be approximated.

◦Example: equipmentSPONSORED PROJECTS TRAINING PROGRAM

A-21 Four Guiding A-21 Four Guiding PrinciplesPrinciplesConsistently Treated – like costs must

be treated the same in like circumstances, as either direct or F&A costs◦Must be consistent with all types of funds,

public or private◦Example – PAS/GCA, PI salary & fringe

Allowable – expenses charged to an award must be allowed by the circular, the agreement, public laws and institution policy.◦Example – (A)equipment, (U) alcohol, lobbying


Administrative ExceptionAdministrative ExceptionOMB Guidance on A-21 Revision

to section F.6.b (July 1993)◦A-21 defines Department

Administrative costs as an F&A cost◦“Items such as office supplies,

postage, local telephone costs and memberships shall normally be treated as F&A costs.”


Administrative Exception Administrative Exception (continued)(continued)OMB Guidance on A-21 Revision

to section F.6.b (July 1993)◦Direct charging of these costs may

be appropriate where a major project or activity explicitly budgets for administrative or clerical services and individuals involved can be specifically identified with the project or activity.


Administrative Exception Administrative Exception (continued)(continued)OMB Guidance on A-21 Revision to

section F.6.b (July 1993)◦“Major project” is defined as a project

that requires an extensive amount of administrative or clerical support, which is significantly greater than the routine level of such service provided by academic departments.

◦Examples: (Exhibit C) Program Projects; General Clinical Research Centers; projects that involve extensive data accumulation, analysis and entry; projects that require making travel and meeting arrangements for large numbers of participants; etc


A-110A-110Uniform Administrative

Requirements for Grant and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations◦A-110 tell recipients of federal grants

and cooperative agreements the rules they have to follow in administering awards.


A-110- Four Defined PartsA-110- Four Defined PartsSubpart A – Ground Work/GeneralSubpart B – Basic Policy / Pre-

Award Requirements Subpart C – Post-Award

RequirementsSubpart D – Closeout ProceduresAppendix A – Contract Provisions


Subpart C – Post-Award Subpart C – Post-Award RequirementsRequirementsFinancial and Program

ManagementProperty StandardsProcurement StandardsReports and Records


Subpart C – Post-Award Subpart C – Post-Award RequirementsRequirementsFinancial and Program

Management:Automobile RentalCost Transfers on Grants and

ContractsProcurement StandardsBusiness Meals and AmenityTravelEtc…


Subpart C – Post-Award Subpart C – Post-Award RequirementsRequirements

◦Cost sharing or matching – Portion of the project not borne by the sponsoring agency

◦Program income – gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award.


Subpart C - Prior Subpart C - Prior ApprovalsApprovalsChange in scopeChange in key personnelAbsence for more than 3 months

or 25% reduction in effortNeed for additional federal fundsAdditional subawards (if not in

application)Additional equipment


Subpart C - Waiver of Prior Subpart C - Waiver of Prior ApprovalsApprovalsPre-Award CostsNo cost extensions (first time)

◦ Complete the internal form found on the OSP Website under forms no-cost extension request.

◦ PAS will work with Sponsor to determine their requirement.

Carry forward of unobligated balance


Subpart D – Closeout Subpart D – Closeout ProceduresProceduresTypically 90 days after the date

of completionIncludes:

◦Final Financial Report◦Final Invention Statement◦Final Progress Report


A-133A-133Audits of States, Local Governments,

and Non-Profit Organizations◦Outlines audit requirements for

Universities and other non-profit institutions that receive federal funds.

◦Ensures the institution can demonstrate compliance with laws, regulations, award conditions, institutional policies, etc.

◦Ensures that federal funds are managed appropriately and financial reporting is accurate.


A-133A-133 Top areas the auditors will review:

◦ Compliance with Federal regulations, sponsor terms & conditions, and University policy

◦ Sufficient internal controls They will accomplish this by reviewing:

◦ Cash (primarily LOC draws)◦ Accounts receivable activity◦ Financial status reporting, for accuracy and on-time

completion◦ Cost transfers, both salary and non-salary, with a

particular focus on late cost transfers◦ Expense review, for allowability, allocability, back

up documentation◦ Subrecipient monitoring◦ Schedule of Expenditures of Federal Awards (SEFA)◦ Effort Reporting


Who is required to have an Who is required to have an A-133 audit?A-133 audit?Non-Federal entities that expend

$500,000 or more in a year in Federal awards either as prime recipient, sub-recipient or both during their fiscal year.

What is a major program? It is a grouping (cluster) of closely related programs that share common compliance requirements. At UVM, Research & Development, Smith Lever, Student Financial Aid, and Medicaid are considered major programs.

Research & Development awards are audited every year.


Audit findings, risks, Audit findings, risks, potential implications potential implications Findings may impact sponsor decisions about existing

awards, future funding opportunities and/or may prompt sponsors to conduct their own reviews or audits.

If a material weakness and/or significant deficiency is found in a major program in one year, that program will be audited the following year.

In the event of a finding, a corrective action plan must be prepared and implemented. For example, in FY09, our Journal Approval Workflow was modified to eliminate any self-approvers and ensure that all Journals were reviewed to meet the Cost Transfer Policy requirements prior to approval.


Rules Governing Sponsored Rules Governing Sponsored Projects (aka OMB Circulars)Projects (aka OMB Circulars)

Questions???


rules governing sponsored projects (aka omb circulars) presented by beverly blakeney, diane cummings...

Documents

sponsored agreement

particular sponsored

fa costs direct costs

types of costs

cost principles

administrative costs

overhead costs

indirect costs