Northwest Association of Community Development Managers. September 22, 2014

Transcription

1 Northwest Association of Community Development Managers September 22, 2014

2 OMB Super Circular New Guidance for Federal Awards In late 2013, the Office of Management and Budget (OMB) released new guidance on Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. This has been dubbed the Super Circular. Guidance published December 26, 2013, will be in effect for all federal awards or for funding increments to nonfederal entities on or after December 26, It applies to nonfederal entity audits for fiscal years beginning on or after that date. Guidance supersedes, streamlines, and consolidates requirements contained in OMB Circulars A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133. Final guidance is located in Title 2 of the Code of Federal Regulations.

3 The new uniform guidance reduces administrative burden and risk of waste fraud and abuse by: 1 Eliminating duplicative and conflicting guidance 2 Focusing on performance over compliance 3 Encouraging effective use of information technology 4 Providing for consistent and transparent treatment of costs 5 Limiting allowable costs to make the best use of federal resources 6 Targeting audit requirements on risk of waste, fraud, and abuse

4 Administrative Requirements Reforms to administrative requirements, generally taken from guidance in Circular A- 110 and A-102, include:

5 Administrative Requirements (continued) Contractor The final guidance uses the term contractor rather than vendor to distinguish between a contract and a grant. Supplies If the cost of computing devices (inclusive of accessories) falls below the lesser of the capitalization threshold of the nonfederal entity or $5,000, regardless of the length of useful life, the asset is a supply rather than equipment.

6 Administrative Requirements (continued) Conflict of Interest Nonfederal entities must disclose in writing any potential conflict of interest to the federal awarding agency or pass-through entity. Mandatory Disclosures Nonfederal entities or applicants must disclose in writing to the federal awarding agency or pass-through entity all violations of federal criminal law involving fraud, bribery or gratuity violations potentially affecting the federal award, in a timely manner.

7 Administrative Requirements (continued) Performance Measurement In an effort to enhance performance measurement and improve program outcomes, the federal awarding agency must require the recipient to use OMB-approved government-wide standard information collections when providing financial and performance information. In addition, the federal awarding agency must require the recipient to relate financial data to performance accomplishments of the federal award.

8 Cost Principles Indirect Costs provides for a de minimis indirect cost rate of 10-percent of modified total direct costs (MTDC), which may be used indefinitely, to nonfederal entities that never had a negotiated indirect cost rate. If chosen, the nonfederal entity must use the 10-percent rate on all federal awards until the entity negotiates an approved rate with its cognizant agency.

9 Audit Requirements Audit Requirements A nonfederal entity that expends $750,000 or more in federal awards during its fiscal year must have a single or programspecific audit conducted for that year. This is an increase from the existing $500,000 audit threshold. This change is effective for audits of fiscal years beginning on or after December 26, For most entities, this would be years ending on or after December 31, 2015.

10 Audit Requirements (continued) Audit Findings The threshold for reporting known questioned costs has been raised from $10,000 to $25,000. Major Program Determination To identify Type A programs, the Type A threshold and parameters of total federal awards expended have been increased to $750,000 for total federal awards of equal to $750,000 but less than or equal to $25 million for the first selection level. Under the previous guidance of OMB Circular A-133, that first selection level was the larger of $300,000. This change is the result of auditors placing increased emphasis on larger programs rather than smaller programs.

11 Audit Requirements (continued) These sections provide for procurement standards to be followed by all other nonfederal entities, including: Use of the nonfederal entities own documented procurement procedures that comply with state and local laws and regulations, provided the procurements conform to applicable federal law and other standards set forth in the procurement sections. Maintenance of oversight to ensure contractors comply with agreed terms of their contracts or purchase orders. Maintenance of written standards of conduct covering conflicts of interest and governing the performance of employees engaged in the selection, award and administration of contracts.

12 Methods of Procurement Micro-purchase supplies or services for which the aggregate amount does not exceed $3,000 [New] Small purchase procedures: Threshold was $100,000 under 24 CFR Part 85, but 75 FR (August 30, 2010) raised simplified acquisition threshold to $150,000. Sealed bids (formal advertising). Competitive proposals.

13 Methods of Procurement (continued) Noncompetitive proposals Revised to clarify that solicitation of a proposal from only one source may be used only when one or more of the following apply: The item is available only from a single source. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation. The Federal awarding agency (or pass-through entity) expressly authorizes this method in response to a written request from the nonfederal entity. After solicitation of a number of sources, competition is determined inadequate.

14 Methods of Procurement (continued) Must means required. Should indicates best practices or recommended approach.

15 Crosswalk and side-by-sides showing where to find revised sections of the old guidance in the uniform guidance, and a comparison of the language from the old guidance next to the new guidance are available at: