Uniform Guidance – An Overview of Changes · The Unique Alternative to the Big Four® Uniform Guidance – An Overview of Changes CACUBO Annual Meeting -October 6, 2015 Presented
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The Unique Alternative to the Big Four ® Uniform Guidance – An Overview of Changes CACUBO Annual Meeting - October 6, 2015 Presented by: Pete Ugo, CPA, Crowe Horwath LLP Angie Lewis, CPA, Crowe Horwath LLP Linda Sadler, Chief Financial Officer, University of Kansas Center for Research
Uniform Guidance – An Overview of ChangesCACUBO Annual Meeting - October 6, 2015
Presented by: Pete Ugo, CPA, Crowe Horwath LLPAngie Lewis, CPA, Crowe Horwath LLPLinda Sadler, Chief Financial Officer, University of Kansas Center for Research
Streamline guidance for Federal awards to ease administrative burden
Strengthen oversight over Federal funds to reduce risks of waste, fraud, and abuse.
Streamlining existing OMB guidance will increase the efficiency and effectiveness of Federal awards to ensure best use of the more than $500 billion expended annually.
Objective - Reduce both administrative burden and risk of waste, fraud and abuse.
1. Eliminating Duplicative and Conflicting Guidance2. Focusing on Performance over Compliance for Accountability3. Encouraging Efficient Use of Information Technology and Shared Services4. Providing For Consistent and Transparent Treatment of Costs5. Limiting Allowable Costs to Make Best Use of Federal Resources6. Setting Standard Business Processes Using Data Definitions7. Encouraging Non-Federal Entities to Have Family-Friendly Policies8. Strengthening Oversight9. Targeting Audit Requirements on Risk of Waste, Fraud, and Abuse:
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Presentation Notes
By combining eight previously separate sets of OMB guidance into one, OMB has eliminated numerous overlapping duplicative and conflicting provisions of guidance that were written separately over many years. Beyond dealing with the administrative burden associated with understanding such guidance, non-Federal entities have faced risks of more restrictive oversight and audit findings that stem from inappropriate applications of the guidance caused by overlapping requirements. Streamlining the guidance into one document improves consistency and eliminates of many duplicative provisions throughout. Further, as described in § 200.110 Effective Date, Federal agencies will implement this guidance in unison, which will provide non-Federal entities with a predictable, transparent, and governmentwide consistent implementation schedule. Finally, this completes a long-standing goal of co-locating all related OMB guidance into Title 2 of the Code of Federal Regulations. Focusing on Performance over Compliance for Accountability: The final guidance includes provisions that focus on performance over compliance to provide accountability for Federal funds. Section 200.102 Exceptions notes that on a case-by-case basis, in accordance with OMB guidance in M-13-17, OMB will waive certain compliance requirements and approve new strategies for innovative program designs that improve cost-effectiveness and encourage effective collaboration across programs to achieve outcomes. The models described in OMB Memorandum 13-17 include tiered evidence grants, Pay for Success and other pay-for-performance approaches, and Performance Partnerships allowing braided and blended funding. The goals for these models include encouraging a greater share of funding to support approaches with strong evidence of effectiveness and building more evaluation into grant-making so we keep learning more about what works. In addition to these specific models, M-13-17 also encourages Federal agencies to pursue other strategies to increase cost-effectiveness in high-priority programs. Section 200.201 Use of Grant Agreements (Including Fixed Amount Awards), Cooperative Agreements, And Contracts includes provisions for fixed amount awards that minimize compliance requirements in favor of requirements to meet performance milestones. Section 200.301 Performance Measurement provides more robust guidance to Federal agencies to measure performance in a way that will help the Federal awarding agency and other non-Federal entities to improve program outcomes, share lessons learned, and spread the adoption of promising practices. The Federal awarding agency is required to provide recipients with clear performance goals, indicators, and milestones. Section 200.419 Cost Accounting Standards and Disclosure Statement, the threshold for IHEs to comply with Cost Accounting Standards is raised to align with the threshold in the Federal Acquisition Regulations and the process for Federal agency review of changes in accounting practices is streamlined to reduce risk of noncompliance. Section 200.430 Compensation—Personal Services strengthens the requirements for non-Federal entities to maintain high standards for internal controls over salaries and wages while allowing for additional flexibility in how non-Federal entities implement processes to meet those standards. In addition, it provides for Federal agencies to approve alternative methods of accounting for salaries and wages based on achievement of performance outcomes, including in approved instances where funding from multiple programs is blended to more efficiently achieve a combined outcome.
OMB issued on December 26, 2013 Streamlines the eight existing OMB Circulars into one document including Circular
A-133 and the various Cost Principles. Consolidates the Cost Principles into a single document with limited variations by
entity. Circulars included: A-21, Cost Principles for Educational Institutions A-87, Cost Principles for State, Local and Indian Tribal Governments A-89, Federal Domestic Assistance Program Information A-102, Awards and Cooperative Agreements with State and Local Governments A-110, Uniform Administrative Requirements for Awards and Other Agreements with
Institutions of Higher Education, Hospitals and other Non-Profit Organizations A-122, Cost Principles for Non-Profit Organizations A-133, Audits of States, Local Governments and Non-Profit Organizations A-50, Audit Follow-Up, (as related to Single Audits)
Structure of the Uniform Grant Guidance 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards Subpart A - Acronyms and definitions Subpart B - General provisions Subpart C - Pre-Federal Award requirements and Contents of Federal Awards Subpart D - Post Federal award Requirements Financial and program management standards Property standards Procurement standards Performance and financial monitoring and reporting Sub recipient monitoring and management Record retention and access Remedies for noncompliance Closeout
Structure of the Uniform Grant Guidance (continued) 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards Subpart E - Cost Principles General provisions Basic considerations Direct and indirect costs Special considerations for states, local governments and Indian Tribes Special considerations for institutions of higher education General provisions for selected items of costs
Structure of the Uniform Grant Guidance (continued) 2 CFR Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards Appendix I - Full text of Notice of Funding Opportunity Appendix II - Contract provisions for non-Federal entity contracts under Federal awards Appendix III - Indirect (F&A) costs identification and assignment, and rate determination
for IHEs Appendix - IV Indirect (F&A) costs identification and assignment, and rate determination
for nonprofit organizations Appendix V - State/local government and Indian tribe-wide central service cost allocation
plans Appendix VI - Public assistance cost allocation plans Appendix VII - State and local government and Indian tribe indirect cost proposals Appendix VIII - Nonprofit organizations exempt from cost principles Appendix IX - Hospital cost principles Appendix X - Data collection form Appendix XI - Compliance supplement
Subpart A – Acronyms and Definitions Need to review as some of the definitions may have changed due to the
consolidation of circulars
Example: Vendor has been replaced with Contractor Note – guidance on subrecipient versus contractor determination relocated to Subpart D
Added the term personally identifiable information (PII) and protected personally identifiable information (protected PII) These two terms will affect the single audit reporting package
Program Income has now been defined (was not defined in A-133) Equipment threshold did not change ($5,000)
Must and Should – Must = Required Should = Recommended, but not required
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Presentation Notes
As noted there are 6 subparts to the Omni Circular – Subparts A-F. The following slides will cover each Subpart at a high level. Subpart A - This Subpart provides definitions for the terms used in the Omni Circular. As noted previously, many of the definitions are a consolidation of those found in a number of circulars, some of which were specific to a particular type of organization (for example, an educational organization). Therefore, definitions an auditor is accustomed to as they relate to a type of organization may have changed. In addition, some terms that were not previously defined in Circular A-133 or the other superseded circulars have been added to Subpart A. One significant change in terms is the use of the term vendor. This term was widely used in Circular A-133; however, it has been replaced with the term contractor in the Omni Circular. Guidance on subrecipient versus contractor determination has been relocated to Subpart D and will be cover later in this presentation. Other definitions of note that have been added are the terms personally identifiable information (PII) and protected personally identifiable information (protected PII). These terms, not previously defined in grant guidance, are now important for both auditees and auditors because of the public availability of the single audit reporting packages going forward. You will see these terms again when we talk about subpart F, which covers audit and reporting requirements. Program income is now defined in the Omni Guidance as it was not defined in A-133. The Omni Circular uses the term must to indicate a requirement in the document. The term should is used in Omni Circular to indicate best practice or recommended approach and does not indicate a requirement. As you go through the Omni Circular, you will want to look for the use of these two terms to ensure you are appropriately adhering to the guidance.
Discusses the purpose, applicability, exceptions, and effective date of the Uniform Grant Guidance
Strengthen oversight:
Conflict of interest The Federal awarding agency must establish conflict of interest policies for their Federal awards.
The non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency (or pass-through entity) in accordance with applicable Federal awarding agency policy
Mandatory disclosures Non-Federal entities must disclose, in writing, all violations of Federal criminal law involving
fraud, bribery, or gratuity violations potentially affecting the Federal award
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Subpart B discusses the purpose, applicability, exceptions, and effective date of the Omni Circular. In addition, this subpart provides oversight guidance relative to conflict of interest policies and mandatory disclosures. As Kevin noted, one of the objectives of the new guidance was to strengthen oversight. Subpart B specifics notes the following in regards to Conflict of interest and Mandatory discolosures: read slide.
Are applicable to the following types of Federal Awards
Are not applicable to the following types of Federal Awards
Subpart A – Acronyms and definitions
All
Subpart B – General provisions All
Subpart C – Pre-federal Award requirements and Contents of Federal Awards
Grant agreements and cooperative agreements Agreements for loans, loan guarantees, interest subsidies, and insurance
Cost reimbursement contracts awarded under the Federal Acquisition Regulations and cost-reimbursement subcontracts under these contracts
Subpart D – Post Award requirements, subreceipient monitoring and management
All
Subpart E – Cost principles Grant agreements and cooperative agreements, except those providing food commodities
Cost reimbursement contracts awarded under the Federal Acquisition Regulations and cost-reimbursement subcontracts under these contracts in accordance with FAR
Grant agreements and cooperative agreements providing food commodities
Also noted in subpart B, Section 200.101, is the information in this table. This table specifies the subparts that are applicable (or not applicable) to a particular type of federal award. I would suggest reviewing the table to become familiar with how to apply the Omni Circular to the various types of federal awards. FAR – Federal Acquisition Regulations
Non-federal entities - The new administrative requirements and cost principles are required to be implemented for all federal awards and incremental funding made after December 26, 2014 nonfederal entity is a state, local government, Indian tribe, institution of higher education, or
nonprofit organization that carries out a federal award as a recipient or subrecipient.
Audit Requirements - FYs beginning on or after December 26, 2014 (1st applicable FY - December 31, 2015)
Early Implementation not allowed
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Because the Omni Circular is applicable to federal agencies, nonfederal entities, and auditors, there are different effective dates. This allows federal agencies time to adopt and implement the guidance before nonfederal entities are required to apply the guidance to new federal awards and incremental funding (that is, additional funding to existing awards) and then be audited under the new audit requirements. The federal agencies are required to adopt the guidance and implement policies and procedures by December 26, 2014. The new administrative requirements and cost principles are required to be implemented by nonfederal entities for all federal awards and incremental funding made after December 26, 2014. The audit requirements in Subpart F of the Omni Circular guidance are effective for fiscal years beginning on or after December 26, 2014.
June 30, 2014, September 30, 2014, and December 31, 2014, year ends No impact from the Uniform Grant guidance for non-federal entities and auditors
March 31, 2015, June 30, 2015, and September 30, 2015 year-ends Non-federal entities will have to adopt new Administrative Requirements and Cost Principles
relating to all new federal awards and additional funding to existing awards
Single audit requirements continue to use “old” regulation but auditor compliance testing will be affected by client adoption of “new” requirements (i.e., will likely have to test some awards subject to the old requirements and some the new requirements)
December 31, 2015, year-ends and beyond New administrative requirements, Cost Principles, and new single audit requirements apply
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One example is a nonfederal entity with a June 30 fiscal year end. The audit for the June 30, 2015, fiscal year end is required to be performed under Circular A-133. However, because the Omni Circular guidance for Federal Awards administrative requirements and cost principles are effective for new awards and incremental funding made after December 26, 2014, the organization may have some awards subject to the new administrative requirements and cost principles, in addition to some awards being subject to the old administrative requirements and cost principles. Auditees need to be sure they are applying the correct administrative requirements and cost principles to a particular federal award. Likewise, auditors need to understand this and be sure they are testing to the proper administrative requirements and cost principles for a particular federal award.
Subpart C - Pre-Federal Award Requirements and Contents of Federal Awards Covers administrative requirements directed primarily at federal agencies
regarding their responsibilities for information that is required to be provided to nonfederal entities for the purpose of applying for and receiving federal awards Responsibilities include: Public notice of funding opportunities Federal awarding agency requirement to evaluate the risks posted by applicants
prior to the nonfederal entity receiving a federal award Listing of information that must be included in a federal award document
Merit Review Process For competitive grants or cooperative agreements, unless prohibited by Federal
statute, the Federal awarding agencies must design and execute a merit review process for applications. Process must be described (or incorporated by reference) in funding opportunity
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Subpart C – pre-federal award requirements and contents of federal awards – this subpart covers….read slide.
Subpart C - Pre-Federal Award Requirements and Contents of Federal Awards Pre-Award Risk Assessment May include: Financial Stability Quality of management systems History of Performance Reports and findings from Audits Applicants Ability to Effectively Implement Program Requirements
Agency Framework – for how and when to conduct risk assessments All applicants need a risk assessment process
Federal Awards Defined 15 data elements that must be included Defined General Terms and Conditions that must be included Performance Goals Timing and scope of expected performance and outcomes to be achieved
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In evaluating risks posed by applicants, the Federal awarding agency may use a risk-based approach and may consider any items such as the following: Financial Stability Quality of management systems History of Performance in managing Federal awards Reports and findings from Audits Applicants Ability to Effectively Implement Program Requirements All applicants need a risk assessment process – we will cover risk assessments in more detail as part of the 5-part webinar series on the Omni Circular. A Federal award must include the following information: (a) General Federal Award Information. The Federal awarding agency must include the following general Federal award information in each Federal award: (1) Recipient name (which must match registered name in DUNS); (2) Recipient's DUNS number (see §200.32 Data Universal Numbering System (DUNS) number); (3) Unique Federal Award Identification Number (FAIN); (4) Federal Award Date (see §200.39 Federal award date); (5) Period of Performance Start and End Date; (6) Amount of Federal Funds Obligated by this action; (7) Total Amount of Federal Funds Obligated; (8) Total Amount of the Federal Award; (9) Budget Approved by the Federal Awarding Agency; (10) Total Approved Cost Sharing or Matching, where applicable; (11) Federal award project description, (to comply with statutory requirements (e.g., FFATA)); (12) Name of Federal awarding agency and contact information for awarding official, (13) CFDA Number and Name; (14) Identification of whether the award is R&D; and (15) Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A) costs). In addition, Federal awarding agencies must incorporate certain general terms and conditions either in the Federal award or by reference, as applicable and noted in the this subpart of the Omni Circular guidance. In regards to Federal Award Performance Goals. The Federal awarding agency must include in the Federal award an indication of the timing and scope of expected performance by the non-Federal entity as related to the outcomes intended to be achieved by the program.
Subpart D – Post Federal Award Requirements Covers a wide range of topics that contain information for both federal agencies
and nonfederal entities: Financial management Internal controls Bonds Payment Cost sharing and matching Program income Revision of budget and program plans Property standards Procurement standards Performance and financial monitoring and reporting Subrecipient monitoring and management Record retention and access Remedies for noncompliance Closeout
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Subpart D covers post federal award requirements. All sections have specific revisions, therefore, a deeper dive into this subpart may be necessary for federal agencies, nonfederal entities and external auditors. Financial management – system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions Internal controls – we will cover in a little more detail in a few slides Bonds – federal awarding agency may include a provision on bonding and insurance in certain circumstances Payment – covers when and how certain payments are made and provides standards governing the use of banks and other institutions as depositories of advance payments under Federal awards. Cost sharing and matching – when you can use it Program Income – what is it and how to use it Revision of budget and program plans – deviations from budget and program plan revisions should be done in accordance with this section Property standards – include insurance coverage, real property, federally-owned and exempt property, equipment, supplies, intangible property and property trust relationship Procurement standards – we will cover in a little more detail in a few slides Performance and financial monitoring and reporting – includes non-federal responsibilities for monitoring and reporting activities under the Federal award Subrecipient monitoring and management – we will cover in a little more detail in a few slides Record retention and access Remedies for noncompliance Closeout – this section specifies the actions the non-federal entity and federal awarding agency or pass-through entity must take to complete the closeout process at the end of the period of performance
Subpart D – Post Federal Award Requirements Some topics that relate to nonfederal entities are internal controls, procurement
standards and subrecipient monitoring and management
Internal controls Must establish and maintain effective internal control over the Federal award Should be compliant with Green book or COSO
Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards
Evaluate and monitor the non-Federal entity's compliance with statute, regulations and the terms and conditions of Federal awards.
Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings.
Use reasonable measure to safeguard protected personally identifiable information (PII) and information designated as sensitive. New explicit responsibility for safeguarding
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We will cover the following topics in a little more detail – internal controls, procurement standards and subrecipient monitoring and management The non-federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” [Green Book] issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). All items are a Must before each bullet – read slide.
Subpart D – Post Federal Award Requirements Procurement
In general, the new procurement standards adopt the majority of the language used from Circular A-102. Therefore, non-federal entities that are currently subject to Circular A-110 will likely be affected more significantly.
Non-federal Entities must follow documented procurement procedures
Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
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In general, the new procurement standards adopt the majority of the language used from Circular A-102. Therefore, non-federal entities that are currently subject to Circular A-110 will likely be affected more significantly. However, all auditees should review these changes carefully to determine the impact on their procurement procedures. Some specific items address in this section include - Non-federal Entities must follow documented procurement procedures - Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. - The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the performance of its employees engaged in the selection, award and administration of contracts. Other items covered include other general procurement standards, use of competition, methods of procurement to be followed, use of minority businesess, women’s business enterprises, and labor surplus area firms when possible, procurement of recovered materials, contract cost and price, federal awarding agency or pas-through entity review, bonding requirements and contract provisions (located in Appendix II)
There are various responsibilities associated with organizations that are either a subrecipient or the organization acting as the pass-through entity. Such items as monitoring, audits, types of agreements and reporting can overlap. Due to the importance and complexity of this section, we will cover subrecipient monitoring in more detail in a future webinar as part of one of our five-part series of webinars on the Omni Circular. I will cover a few highlights of this section over the next couple of slides.
A non-Federal entity may concurrently receive Federal awards as a: Recipient Subrecipient Contractor
Pass-through entity (PTE) must make case-by-case determination whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a Subrecipient, or Contractor
Substance of the agreement is more important than the form
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The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. Therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. As noted on the next slide, in determining subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. To help determine whether you are a subrecipient or contractor, the Omni guidance has provide the following characteristics of each.
Subpart D – Post Federal Award Requirements Subrecipent and Contractor Determination Guidance Currently in OMB Circular A-133 (Subpart B Section 210) and uses the term
“Vendor” Guidance Moved to 2013 Omni Circular (Subpart D Section 200.330) 2013 Omni Circular Terminology – “Contractor” replaces “Vendor”
Subrecipient Contractor
Creates a Federal assistance relationship Purpose is to obtain goods and services for the non-Federal entity’s own use and creates a procurement relationship
Determines who is eligible to receive what Federal assistance
Provides the goods and services within normal business operations
Has its performance measured in relation to whether objectives of a Federal program were met
Provides similar goods or services to many different purchasers
Has responsibility for programmatic decision making Normally operates in a competitive environment
Is responsible for adherence to applicable Federal program requirements specified in the Federal award; and
Provides goods or services that are ancillary to the operation of the Federal program; and
In accordance with its agreement, uses the Federal funds to carry out a program for a public purpose specified in authorizing stature, as opposed to providing goods or services for the benefit of PTE
Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons
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All of the characteristics listed in this table may not be present in all cases, and the passthrough entity must use judgment in classifying each agreement as a subaward or a procurement contract.
Must clearly identify the agreement as a subaward at the time of the subaward
Must provide the following Federal award identification information and if not available provide the best available information: Subrecipient’s name and DUNS number Federal award identification number and date Subaward period of performance, start and end Amount of Federal funds obligated and total amount of Federal funds obligated to the subrecipient Total amount of Federal award Federal award project description Name of Federal awarding agency, and other PTEs and contact information CFDA number and name for each payment at the time of disbursement Identify whether the award is R&D Indirect cost rate for the Federal award
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One topic that is significantly more prominent in the Omni guidance than in Circular A-133 is pass-through entities’ responsibilities. There are a variety of requirements for pass through entities that we will cover over the next few slides and these can all be found in Subpart D section 200.331.
Identify all applicable Federal requirements Identify all additional requirements imposed by the PTE Communicate the Indirect cost rate Approved federally recognized ICR Rate negotiated between the PTE and subrecipient A de minimis ICR
Permit the PTE and auditors to have access to the subrecipient’s records and financial statements
Identify appropriate terms and conditions concerning closeout of the subaward.
Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring
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For indirect cost rate: 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 as defined in Subpart E.
Monitor activities of the subrecipient. Monitoring must include: Review financial and programmatic reports Follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies
pertaining to the Federal award identified through audits, on-site reviews and other means Issue management decision for audit findings pertaining to the Federal award provided to the
subrecipient from the PTE
PTEs based on their assessment may: Provide training and technical assistance on program-related matters Perform on-site reviews of program operations Arrange for agreed-upon procedures engagements
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Assessment section: Depending upon the pass-through entity’s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient’s program operations; (3) Arranging for agreed-upon procedures engagements
Verify that every subrecipient is audited as required by Subpart F of the Uniform Grant Guidance
Consider the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the PTE’s records
Consider taking enforcement action against noncompliance
With prior written approval from the Federal awarding agency, a PTE may provide subawards based on fixed amounts up to the Simplified Acquisition Threshold (currently $150,000- is adjusted for inflation).
It is important to note that an auditee is subject to the cost principles and administrative requirements in the new Uniform Grant Guidance for federal awards and incremental funding made after December 26, 2014. Therefore, any federal awards and incremental funding received after December 26, 2014, will be subject to different cost principles and administrative requirements than those received prior to that date.
Subpart E – Cost Principles (Allowable Activities and Costs) GOAL – To eliminate duplicative language while clarifying where there are important
substantive policy variances across entities.
GOAL – To provide updated language to reflect common current business practices, such as electronic submissions of information.
Type of Cost Main SourceAdvertising and public relations costs A-87Advisory councils A-87Alcoholic beverages A-87Alumni activities A-21Audit services A-87Bad debts A-87Bonding costs A-87
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Clarified --- Advertising – The only allowable advertising costs are those which are solely for (A) The recruitment of personnel required for the performance of the grant; (B) The procurement of goods and services for the performance of a Federal award; (C) The disposal of scrap or surplus materials acquired in the performance of a Federal award or (D) Other specific purposes necessary to meet the requirements of the Federal award. Clarified -- Advisory councils – still allowable if authorized by statute or with prior approval from the Federal awarding agency. Audit services - allows the costs of a financial statement audit for a non-Federal entity that does not currently have a Federal award when included in the indirect cost pool as part of a cost allocation plan or indirect cost proposal. These audits may be useful to the Federal agency negotiating an indirect cost rate, and they are not in conflict with the Single Audit Act.
Subpart E – Cost Principles (Allowable Activities and Costs)
Type of Cost Main SourceCollections of Improper Payments NewCommencement and convocation costs A-21Compensation – personal services AllCompensation – fringe benefits A-122Contingency provisions A-21Contributions and donations A-21, A-122Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements
A-21, A-87
Depreciation A-21Employee morale, health, and welfare costs A-21Entertainment costs A-21
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Collection of Improper Payments - Allows recipients to be reimbursed for expenses associated with the effort to collect improper payment recoveries or related activities; these costs may be considered either indirect or direct costs. Compensation – Personal services – 200.430 (i) – Strengthens the requirements for non-Federal entities to maintain high standards for internal controls over salaries and wages while allowing for additional flexibility in how non-Federal entities implement processes to meet those standards. Removed Examples. Compensation – fringe benefits – family friendly leave might be allowed based on entity’s policy Depreciation – Shifts from GASB #51 to GAAP – Donated assets – value at the time of donation – may be claimed through depreciation or claimed as match using the value at the time of the donation, but not both. Employee morale, health, and welfare costs – more specific – removed morale from definition - Costs incurred in accordance with the non-Federal entity's documented policies for the improvement of working conditions, employer-employee relations, employee health, and employee performance are allowable.” Entertainment Costs – Unallowable – Unless 1. Those costs have a programmatic purpose and are authorized in the approved budget for the federal award, or 2. Those costs have prior written approval from the federal awarding agency
Subpart E – Cost Principles (Allowable Activities and Costs)
Type of Cost Main SourceEquipment and other capital expenditures A-21, A-87Exchange Rates NewFines, penalties, damages and other settlements A-21Fund raising and investment management costs A-87Gains and losses on disposition of depreciable assets
A-87
General government expenses A-87Goods or services for personal use A-21Idle facilities and idle capacity A-87Insurance and indemnification A-21, A-87Intellectual Property New
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Exchange Rates - Allows for cost increases from fluctuations in exchange rates with certain conditions being met and of course, the availability of funds Fines, penalties, damages and other settlements – alleged violations are now unallowable – not just violations. - List of laws under which failure to comply could result in costs of fines and other penalties include Tribal law. Idle Facilities - Allows for the costs of idle facilities when they are necessary to meet fluctuations in workload, such as those which may be typical of developing shared service arrangements. Intellectual Property – The new section outlines costs that are allowable and unallowable for both Patent Costs and Royalties.
Subpart E – Cost Principles (Allowable Activities and Costs)
Type of Cost Main SourceInterest AllLobbying A-21, A-87Losses on other Federal awards or contracts A-21Maintenance and repair costs A-122Material and supplies costs, including costs of computing devices
A-122
Meetings and conferences (External) A-122Memberships, subscriptions, and professional activitycosts
A-122
Organization costs A-122Participant support costs A-122
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Interest – Added patents and computer software - Paragraph (b)(2) establishes the date of January 1, 2016, as the date that non-federal entities whose fiscal year starts on or thereafter may be reimbursed for financing costs associated with patents and computer software . Material and supplies costs – clarified that can be charged direct, added costs of computing devices - Computing devices are defined as machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information. Costs incurred for materials, supplies, and fabricated parts necessary to carry out a Federal award are allowable. Purchased materials and supplies shall be charged at their actual prices, net of applicable credits. Meetings and conferences (external) --- NOW Just Conferences - Costs of external meetings and conferences the primary purpose is the dissemination of technical information beyond the recipient entity, are allowable. This includes costs of meals, transportation, rental of facilities, speakers' fees, and other items incidental to such meetings or conferences, and the identification of locally available dependent-care resources unless further restricted by Federal awarding agency policy. Organization costs – now unallowable to all organizations not just NFPs
Subpart E – Cost Principles (Allowable Activities and Costs)
Type of Cost Main SourcePlant and security costs A-122Pre-award (or Preagreement) costs A-122Professional service costs A-122Proposal costs A-21Publication and printing costs A-87Rearrangement and reconversion costs A-87Recruiting costs A-21Relocation costs of employees A-122Rental costs of real property and equipment AllScholarships and student aid costs A-21Selling and marketing costs A-122
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Proposal Costs – Only Indirect cost - Deleted language allowing for other than indirect treatment with prior Federal agency approval. Clarified -- Only allocable to the current accounting period. Recruiting Costs – Eliminates requirements regarding printed "help-wanted" advertising. ---- Paragraph (c) provides that when relocation costs are incurred with the recruitment of a new employee and have been funded in whole or in as a direct cost to the federal award, and the newly hired employee resigns for reasons within the employee’s control within 12 months after hire, the non-Federal entity will be required to refund or credit only the Federal share of such relocation costs to the Federal government. ---- Costs associated with visas when critical skills are needed for a specific award may be proposed as a direct cost. Relocation Costs – employees’ vacant home can only be charged for up to 6 months. Rental Costs – prohibits costs related of Home office space.
Subpart E – Cost Principles (Allowable Activities and Costs)
Type of Cost Main Source
Specialized service facilities A-21
Student activity costs A-21
Taxes A-21, A-87
Termination costs A-122
Training and education costs A-122, A-87
Transportation costs A-21
Travel costs A-21
Trustees A-21
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Student activity costs – All entities -- costs incurred for intramural activities, student publications, student clubs, and other student activities, are unallowable, unless specifically provided for in the Federal awards. Travel Costs – item to note: (c)(1) Temporary dependent care costs (as dependent is defined in 26 U.S.C. 152) above and beyond regular dependent care that directly results from travel to conferences is allowable provided that: (i) The costs are a direct result of the individual's travel for the Federal award; (ii) The costs are consistent with the non-Federal entity's documented travel policy for all entity travel; and (iii) Are only temporary during the travel period.
Subpart E – Cost Principles (Allowable Activities and Costs) Major Changes in Indirect Cost Rate
Allows for a one-time extension of negotiated rates up to four years if no major changes in F&A (Facilities and Administrative) costs with cognizant agency approval. If the extension is granted the entity would not be allowed to request a rate review until the
extension period ends.
A minimum flat rate of 10% of modified total direct costs has been added to ensure that entities without the capacity for a full negotiation receive a minimum reimbursement which may be used indefinitely. The subrecipient section specifically requires pass through entities to honor the Federally
negotiated indirect cost rates, negotiate a rate in accordance with Federal guidelines or provide the minimum flat rate.
The salaries of administrative and clerical staff should normally be treated as indirect (F&A) costs
The negotiated rates shall be accepted by all Federal agencies
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OMB hopes that this extension of the negotiated rate will provide a reduction in burden by reducing the frequency of negotiations.
Subpart E – Cost Principles (Allowable Activities and Costs)
Major Changes in Indirect Cost Rate (continued)
Special considerations for Nonprofit Organizations The Federal agency with the largest dollar value of awards with an organization will be designated as
the cognizant agency for the negotiation and approval of the indirect cost rates. The assignment will not be changed unless there is a shift in the dollar volume of the Federal awards to
the organization for at least three years. Where a nonprofit organization has only one major function, or where all its major functions benefit from
its indirect costs to approximately the same degree, the allocation of indirect costs and the computation of an indirect cost rate may be accomplished through simplified allocation procedures.
For an organization that receives more than $10 million in Federal funding of direct costs in a fiscal year, a breakout of the indirect cost component into two broad categories, Facilities and Administration, is required. The rate in each case shall be stated as the percentage which the amount of the particular indirect cost category (i.e., Facilities or Administration) is of the distribution base identified with that category.
Identification of indirect costs. Cost groupings shall be established so as to permit the allocation of each grouping on the basis of benefits provided to the major functions. Depreciation and use allowance Interest Operation and maintenance expenses General administration and general expense
Subpart E – Cost Principles (Allowable Activities and Costs)
Compensation – personal services changes
Purpose was to reduce the administrative burden of documenting time and effort Previously different reporting under A-21, A-87 and A-122 A-87 and A-122 is based on time actually incurred through periodic (at least monthly) time and effort reporting. A-21 is based on a system for establishing an estimate and determining that is a reasonable basis for the activity.
The three examples of acceptable systems (Activity Reports, Plan Confirmation and Multiple Confirmation Records) have been eliminated New guidance more in line with A-21, as follows: Compensation includes all remuneration paid currently or accrued, for services of employees
rendered during the period of performance under the Federal award, including but not limited to wages and salaries and fringe benefits
Reasonable for services rendered – subject to ceiling (10 U.S.C. 2324(e)(1)(P), and 41 U.S.C. 1127 and 4304(a)(16)
Conforms to the established written policy of the non-Federal entity Is determined and supported according to “Standards for Documentation of Personnel
Expenses” Special provisions for institutions of higher education
Subpart E – Cost Principles (Allowable Activities and Costs)
Documentation of personnel expenses: Must be based on records that accurately reflect the work performed. These records
must: Be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated Be incorporated into the official records of the non-Federal entity Reasonably reflect the total activity for which the employee is compensated, not exceeding
100% of compensated activities Encompass both federally assisted and all other activities compensated by the non-Federal
entity on an intergraded basis, but may include the use of subsidiary records and defined in the non-Federal entity’s written policy
Comply with the established accounting policies and practices of the non-Federal entity, and Support the distribution of the employee’s salary or wages among specific activities or cost
objectives if the employee works On more than one Federal award A federal award and non-Federal award An indirect cost activity and a direct cost activity Two or more indirect activities which are allocated using different allocation bases An unallowable activity and a direct or indirect cost activity
Objectives of a Single Audit Audit of the entity’s financial statements and reporting on the schedule of expenditures of
federal awards Whether the financial statements of the auditee are presented fairly in all material
respects in conformity with GAAP Whether the SEFA is presented fairly in all material respects in relation to the auditee’s
financial statements taken as a whole (SAS 119).
Compliance audit of federal awards Obtain an understanding of the internal control over compliance of each major program Determine whether the auditee has complied with laws, regulations, and the provisions
of contracts or grant agreements that may have a direct and material effect on each of the major programs
Real property acquisition and relocation assistance (removed from compliance supplement – June 2015)
Reporting
Sub-recipient monitoring
Special tests and provisions
If award is received through a pass-through agency, the pass-through agency’s requirements also apply
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Appendix XI Compliance Supplement While most commenters were in favor of the proposed reduction of the number of types of compliance requirements in the compliance supplement, many voiced concern about the process that would implement such changes. Comments questioned whether Federal agencies adding back provisions under special tests and provisions would result in increased administrative burden and requested that such fundamental changes be subject to a public notice and comment period. Since the Compliance Supplement is published as part of a separate process, no final changes are made at this time, but the COFAR recommended that any future changes to the compliance supplement be made based on available evidence on past findings and the potential impact of non-compliance for each type of compliance requirement. The COFAR further recommends that further public outreach be conducted prior to making any structural changes to the format of the compliance supplement to mitigate potential risks of an inadvertent increase in administrative burden.
Schedule of Expenditures of Federal Awards (SEFA) Basis for major program determination process, and thus, the key to determining the
required level of testing for an A-133 audit Preparation is the responsibility of management Auditor must also understand and test internal controls over SEFA preparation Understanding must be sufficient for the auditor to assess the risks of material misstatement of the
SEFA Controls must cover financial AND non-financial data
Items to look for regarding SEFA accuracy: CFDA numbers Identification of pass-through information Amounts passed through to subrecipients Clusters Vendor relationships are excluded
Subpart F - Audit Requirements
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There are several changes made to the major program determination process with the Omni Circular, however, we wanted to also place emphasis on the preparation of the SEFA. Management is responsible for the preparation of a complete and accurate SEFA which includes financial and non-financial information. Proper controls should be place surrounding the preparation of the SEFA. It is also important that management document the controls surrounding SEFA (i.e. documented review/approval from someone other than the preparer). If auditee has not prepared an accurate SEFA, then how are they monitoring their compliance with grant requirements??
Single audit process Audit threshold (200.501) Subrecipient vs. Contractor (200.501(f) & 200.330) Program-specific (200.507) and biennial audits (200.504) Auditee prepares basic financial statements & SEFA (200.510) Major program determination based on risk (200.518) Compliance Supplement overall format (Appendix XI) Reporting to Federal Audit Clearinghouse (FAC).(200.512) Audit follow-up and corrective action. (200.511 & 200.521)
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The Omni Guidance retains the basic approach to a single audit. Many of the audit requirements in the this Guidance for Federal Awards are very similar, or the same as, those found in Circular A-133. Certain sections may have updated language, whereas others have revised guidance and other details regarding the topic. However, there are a number of other changes to the requirements that will affect the performance of a single audit, including the threshold that determines whether a single audit is required. The following slides present some of the major changes found in the Guidance for Federal Awards as it relates to the audit requirements. We will have a separate webinar as part of the five-part series of webinars covering the Omni Circular that will provide more detail on the audit requirements noted in this Subpart. These revisions Focus the Audit on risk: Increases audit threshold Focuses on risk based approach to determine major programs Provides for greater transparency of audit results Strengthens agency use of the single audit process
Subpart F - Audit Requirements Concentrate audit resolution and oversight
resources on higher dollar, higher risk awards
Increase $500,000 threshold to $750,000
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Raising the threshold would reduce the administrative burden for entities being audited and for the federal agencies. The federal agencies could concentrate their audit oversight and follow-up on the higher dollar, higher risk entities. Based on the 2011 Federal Clearinghouse database approximately 5,000 auditees would no longer be required to have a single audit, but 99% of the federal dollars would till be audited.
This is a graphic representation of the dollars for Single Audits that were completed during 2011. 99% of the dollars relates to entities that spend more than $750,000. By adjusting the threshold, the audits will become more focused on where the majority of the money is spent.
Subpart F - Audit Requirements Changes to Major Program Determination Process
Step #1 – Dollar Threshold - Type A minimum threshold revised from $300,000 to $750,000
Step #2 – Risk Assessment - Focuses on material weaknesses in internal control and modified opinions (remove term “any” audit finding)
Step #3 – Type B Risk Assessment – not required to identify more high risk Type programs than at least 25% low risk Type A program threshold (removes smaller Type B from assessment)
• Step #4 – Percentage of Coverage – reduced from 50% to 40% for not low risk auditees and from 25% to 20% for low risk auditees
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The guidance relating to major program determination has been revised. As was the case in Circular A-133, the auditor must use a risk-based approach to determine which federal programs are major programs. The process of identifying major programs to audit remains a four-step process. However, there are a number of changes within the process. A discussion of the four steps follows. Step 1 - The auditor must identify the larger federal programs, which are labeled type A programs. A significant change found in the Omni Guidance relates to the type A/B threshold, which has been increased to $750,000 (and which is now the same dollar amount as the audit threshold). Current A-133 is 500k audit threshold and 300k type A. Step 2 – Identify type A programs that are low-risk. Auditor considers risk related to - federal or pass through entity oversight, results of audit follow-up and changes in personnel or systems. New guideance is different than currently A-133 in that current A-133 also indicates that the auditor consider inherent risk. For a Type A program to be considered low risk, it must have been audited as a major program in at least one of the two most audit periods and in the most recent audit period, the program must have not had; • Modified opinion • Material weakness in internal control • Known or likely questioned costs exceeding 5% of total program expenditures Current A-133 includes significant deficiency or material weakness Step 3 – Identify type B programs that are high risk. Regarding how many type B programs are required to be risk assessed - The auditor is not required to identify more high-risk type B programs than at least one fourth (25 percent) of the number of low-risk type A programs that have been identified in step 2. Exclusion for small type B program risk assessment - the auditor is only required to perform risk assessments on type B programs that exceed 25 percent of the type A threshold determined in step 1. Step 4 – Select programs to audit as major programs. - All type A programs not identified as low risk under step 2 - All type B programs identified as high risk under step 3 (that is, those type B programs identified as high risk that number at least one- fourth the number of low-risk type A programs) - Such additional programs necessary to comply with the percentage of coverage requirements. Read slide.
Changes in low-risk auditee designation Requirements are for the prior 2 years Annual Single Audits Unmodified opinion on financial statements in accordance with GAAP or basis of accounting
required by state law. Unmodified SEFA in-relation-to opinion No GAGAS material weaknesses Type A programs did NOT have any of the following in the past two years: Internal control deficiency identified as material weakness Modified opinion on major programs Questioned costs that exceed 5%
Timely filing of the Data Collection Form No auditor reporting of going concern No waivers
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Various other reforms to audit requirements include the following: Low-risk – meet the following conditions for each of the preceding two audit periods - annual single audits were performed, including timely submission of the data collection form and reporting package to the Federal audit clearinghouse - unmodified opinion - no material weaknessess identified under Government Auditing Standards - auditor did not report a substantial doubt about the auditee’s ability to continue as a going concern - None of the federal programs had audit findings from any of the following in either of the two preceding periods in which they were classified as type A programs — internal control deficiencies identified as material weaknesses in the auditor’s report on internal control for major programs; — a modified opinion on a major program in the auditor’s report on major programs; or — known or likely questioned costs that exceeded 5 percent of total federal awards expended for a type A program during the audit period. Questioned costs - Increasing the minimum threshold for reporting questioned costs from $10,000 to $25,000 to focus on the audit findings presenting the greatest risk. This will eliminate smaller audit findings which require the investment of follow-up resources yet are unlikely to indicate significant weaknesses in internal controls. DCF – read slides
Questioned costs threshold raised to $25,000 (known or likely)
Data Collection Form requires a “YEAR-XXX” format References in the Summary of Findings and Questioned Costs need to be consistent with the
DCF requirement
Auditee certification that no protected personally identified information included in reporting package
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Various other reforms to audit requirements include the following: Low-risk – meet the following conditions for each of the preceding two audit periods - annual single audits were performed, including timely submission of the data collection form and reporting package to the Federal audit clearinghouse - unmodified opinion - no material weaknessess identified under Government Auditing Standards - auditor did not report a substantial doubt about the auditee’s ability to continue as a going concern - None of the federal programs had audit findings from any of the following in either of the two preceding periods in which they were classified as type A programs — internal control deficiencies identified as material weaknesses in the auditor’s report on internal control for major programs; — a modified opinion on a major program in the auditor’s report on major programs; or — known or likely questioned costs that exceeded 5 percent of total federal awards expended for a type A program during the audit period. Questioned costs - Increasing the minimum threshold for reporting questioned costs from $10,000 to $25,000 to focus on the audit findings presenting the greatest risk. This will eliminate smaller audit findings which require the investment of follow-up resources yet are unlikely to indicate significant weaknesses in internal controls. DCF – read slides
Online publication of reports (Clearinghouse) Intended to be the sole point of submission and access moving forward
Federal due date is the earlier of nine months after fiscal year end or 30 days after receipt of the auditor’s reports “Next business day” due date provision
The Corrective action plan must be a separate document from the schedule of findings and questioned costs
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Online – for example, the requirements for a subrecipient to submit a reporting package to a pass-through entity and for a pass-through entity to retain reporting packages of a subrecipient were remo ved (reporting packages will be publicly available on a website maintained by the FAC, thus, providing accessibility to pass-through entities and others). Federal due date - The audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Corrective action plan
Questioned Costs Questioned Costs – Known costs by CFDA #
Cause
Effect
Context Context• Sample Size Support for Statistical Samples
Repeat Finding from PY?
Recommendation Recommendation
Management Response Management Response
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Changes to Finding Elements: Program info includes the Federal program, the CFFA (Catalog of Federal Financial Assistance) title and number, name of federal agency and pass through entity. Criteria – The criteria or specific requirement upon which the audit finding is based, including statutory, regulatory or other citation. NEW: Criteria generally identify the required or desired state or expectation with respect to the program or operation. Criteria provide a context for evaluation evidence and understanding findings. Condition – the condition found, including facts that support the deficiency identified in the audit finding. Questioned Costs – Identification of questioned costs and how they were computed. NEW: Known questioned costs must be identified by applicable CFDA number and applicable award number Cause: NEW – a statement of cause that identifies the reason or explanation for the condition or the factors responsible for the difference between the situation that exists (condition) and the required or desired state (criteria) Effect: NEW – A statement of the effect or potential effect that includes a clear, logical link to establish the impact or potential impact of the difference between the condition and the criteria. Context: Information to provide proper perspective for judging the findings. Number of instances related to the universe and the number of cases examined and be quantified in terms of dollar value. Sample Size – NEW – Where the auditor uses statistical sampling, the auditor must provide audit documentation to show how the sample was drawn to support that the sample size is appropriate and proportional to any findings or conclusions in the audit that are based on the sample and to demonstrate that the sample was drawn in such a way that it can be representative of the population. Repeat – NEW – Identification of if the audit finding was a repeat of a finding in the prior audit and if so, any applicable prior year audit finding numbers. Recommendation: To prevent future occurrences of the deficiency identified. Management Response – NEW – Views of responsible officials – previously only required if there is a disagreement.
The corrective action plan must be a separate document from the schedule of findings and questioned cost
Submitted to FAC along with data collection form
Federal agency or pass-through entity must provide management decision within 6 months of acceptance of audit report by the FAC
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(c) Corrective action plan. At the completion of the audit, the auditee must prepare, in a document separate from the auditor's findings described in § 200.516 Audit findings, a corrective action plan to address each audit finding included in the current year auditor's reports. The corrective action plan must provide the name(s) of the contact person(s) responsible for corrective action, the corrective action planned, and the anticipated completion date. If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan must include an explanation and specific reasons. 200.521 (a) General. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs. The management decision should describe any appeal process available to the auditee. While not required, the Federal agency or pass-through entity may also issue a management decision on findings relating to the financial statements which are required to be reported in accordance with GAGAS.Show citation box (b) Federal agency. As provided in § 200.513 Responsibilities, paragraph (a)(7), the cognizant agency for audit must be responsible for coordinating a management decision for audit findings that affect the programs of more than one Federal agency. As provided in § 200.513 Responsibilities, paragraph (c)(3), a Federal awarding agency is responsible for issuing a management decision for findings that relate to Federal awards it makes to non-Federal entities. (c) Pass-through entity. As provided in § 200.331 Requirements for pass-through entities, paragraph (d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. The auditee must initiate and proceed with corrective action as rapidly as possible and corrective action should begin no later than upon receipt of the audit report. (e) Reference numbers. Management decisions must include the reference numbers the auditor assigned to each audit finding in accordance with § 200.516 Audit findings paragraph (c).
The SEFA must include all federal awards expended (some types, such as noncash assistance, can be shown in the notes now instead of the SEFA)
SEFA requires payments to subrecipients (language on extent practical is removed)
The SEFA must include total federal awards expended for loan or loan guarantee programs (in addition to identifying the balances outstanding at the end of the audit period in the notes to the SEFA)
The notes to the SEFA are required to include if the entity elected to use the 10% deminimus cost rate
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SEFA - total federal awards expended (Currently, Circular A-133 allows several of the amounts included in total federal awards expended, such as noncash assistance, to be shown in the notes to the SEFA instead of on the face of the SEFA.) SEFA change – total amount provided to subrecipients from each federal program
Removed “Davis-Bacon Act” and “Real property acquisition and relocation assistance” from the compliance matrix Now considered as part of Special Tests and Provisions
“Period of Availability of Federal Funds” compliance attribute now called “Period of Performance”
Part 3 (“Compliance Requirements”) is now divided into: Part 3.1 - for federal awards made prior to 12/26/2014 Part 3.2 - for federal awards made on/after 12/26/2014
Part 6 (“Internal Controls”) will be updated in 2016 based on COSO changes to internal control requirements
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Highlights a few of the bigger changes in the Compliance Supplement Several other updates were made to specific CFDA numbers
