What were the Changes from the OMB Circulars to the Uniform Guidance Bag Lunch Webinar June 21, 2016

Transcription

1 What were the Changes from the OMB Circulars to the Uniform Guidance Bag Lunch Webinar June 21, 2016

2 Presenter: Paul H. Calabrese Rubino & Company, CPAs & Consultants Senior Manager Tel:

3 Sources 2 CFR 200 Uniform Administrative, Cost Principles & Audit Requirements for Federal Awards referred to as the Uniform Guidance Also 45 CFR 75 for HHS Awards

4 Uniform Guidance: Structure at a Glance Subpart A: Definitions Subpart B: General Conditions Subpart C: Pre-Award Conditions Subpart D: Post-Award Requirements Subpart E: Cost Principles Subpart F: Audit Requirements 4

5 Major Themes of the Uniform Guidance

6 Subpart D: Post Award Rules New Internal Controls Establish and maintain effective internal controls over award and comply with regulations and terms and conditions of the award Evaluate and monitor for compliance Take prompt action with instances of non-compliance or if identified in audit findings Take reasonable steps to safeguard Personal Identifiable Information (PII)* that is not already public *PII means information that can be used to distinguish or trace an individual s identity or combined with other personal data new 6

7 Subpart C Pre-Award Conditions (Expanded) Agency Review of Risk Posed by Applicants (c) In evaluating risk, the FAA must use a Risk-based approach depending on: Major Theme of Uniform Guidance (4) Reports and findings from audits performed under Subpart F {Single Audits} Audit Requirements of this part or the reports and findings of any other available audits Is there a corrective action plan? Is the PTE monitoring sub s audit findings? Will the PTE enforce if sub does not comply? 7

8 Financial Management (a) NFE s financial management system must: 1. Provide records documenting compliance with Federal statutes, regulations and terms & conditions of award 2. Sufficient to track funds to a level of expenditures 3. To ensure that such funds have been used in accordance with Federal statutes, regulations and terms and conditions of the award 8

9 Changes, Joint Interim Rule, COFAR, FAQs, Start Date

10 Some of the Changes Non-Federal Entity (NFE) [2 CFR ] New section for sub-recipient monitoring Only a 3 year document retention Change in procurement, A-133 and definitions from vendor to contractor Simplified acquisition threshold will be updated to $150,000 from $100,000 Small purchase threshold deleted of $25k Threshold level for equipment capitalization owned by organization is unchanged at $5,000 Single audit threshold from $500k to $750k 10

11 Impact of the Joint Interim Rule* Technical Fixes *Issued December 19, 2014 by all Grant-making Agencies

12 Impact of the Joint Interim Rule Technical Fixes A Move Away from Using DUNS Data Universal Numbering System has been replaced with reserved Appendix 1 (Section D.3) changes from DUNS to Unique Entity Identifier (UEI) The requirements for the UEI will be in SAM Previously the DUNS number was the primary identifier for NFE s in SAM and for applications For new applications, all NFE s must go to SAM for instructions to obtain a UEI for acceptability in applying via Grants.gov Also mentioned for sub-recipient Federal award identification in (a)(1) 12

13 13

14 What are FAQs? COFAR issued FAQs Intended to provided additional context and background to the Uniform Guidance (UG) The last update was FAQ dated 9/9/ Asked-Questions.pdf Any discrepancy between the FAQ and the UG, the UG governs 14

15 What is New under the Uniform Guidance

16 Subpart B: General Provisions Non-Federal Entity (NFE) disclose any potential conflicts-of-interest to Federal Awarding Agency (FAA) or Pass-Through Entity (PTE) New NFE must disclose in a timely manner any violations of criminal law: fraud, bribery, gratuity violations New Failure to disclose may result in remedies in including suspension and debarment 16

17 Subpart D: Post Award Rules New & Change to Period of Performance & Supplies New period of performance section NFE may charge to a Federal award only allowable costs during the period of performance Any costs incurred before the grant was awarded that was specifically authorized Under supplies, including the costs of computing devices per cost principle Materials & Supplies

18 Property Management Standards Equipment threshold is $5,000, or less if NFE s capitalization policy <$5,000 for equipment and > 1 year useful life Title is no longer < $5,000 goes to NFE, or > $5,000 goes to government, except impacts disposition (e)(1)+(2) Title is conditional upon acquisition by NFE (a) per a Property Trust arrangement Agency property manager / administrator Grants Management Officer for your grant/cooperative agreement Conditional means although ownership vests with the NFE, it is still subject to use, management & disposition of equipment per FAQ 8/

19 The Procurement Standards

20 Uniform Guidance 2 CFR 200 Procurement COFAR FAQ: (11/26/14) Procurement ( ) FAQ [1] Micro-purchases under $3,000 (supplies or services) 1. Purchase orders may be awarded without soliciting any competitive quotations if the NFE considers the cost to be reasonable. 2. To the extent practicable, the NFE must distribute their purchases equitably among qualified suppliers 20

21 Uniform Guidance 2 CFR 200 Procurement COFAR FAQ: (11/26/14) Procurement ( ) FAQ [1] Micro-purchases under $3,000 (supplies or services) EXAMPLE: Purchase of a laptop in the amount of $2,000 can be treated as a micro-purchase No competitive price quotations are required for purchase Cost or price analysis is not required 21

22 Uniform Guidance 2 CFR 200 Procurement COFAR FAQ: (11/26/14) Procurement ( ) FAQ If org has a policy that provides strategic sourcing or bulk purchase arrangements The NFE must consider procuring from 1 of a number of computer / office supply stores Such policies should dictate the purchase of a laptop to be rotated among qualified suppliers if they offer a similar price based on prescribed laptop features 22

23 Uniform Guidance 2 CFR 200 Procurement COFAR FAQ: (11/26/14) Procurement ( ) FAQ [2] Purchases under the Simplified Acquisition Threshold currently set at $150,000 All purchases between $3,000 and $150,000 Small purchase procedures are relatively simple and informal Price or rate quotations must be obtained from an adequate number of qualified sources (number of sources > 1, whereas 1 = sole source) The NFE has discretion as to the amount of qualified sources and the method(s) of obtaining price quotations 23

24 Uniform Guidance 2 CFR 200 Procurement COFAR FAQ: (11/26/14) Procurement ( ) FAQ [2] Purchases under the Simplified Acquisition Threshold currently set at $150,000 Price or rate quotations can be: Written or verbal Vendor price list on website Generated via online search engine Small purchases do not require cost or price analysis 24

25 General Procurement Standards (c)(1),(2) Must have written procurement policy Must have Code of Conduct to manage conflicts of interest. Avoid appearance of family, financial or other interest in vendor Anti-kickback policy No gratuities to federal officials Manage organization conflict of interest such as with affiliates, parent company 25

26 Procurement Standards General Procurement Standards.318 Avoid purchasing unnecessary items.318(d) Initiate process w/ purchase request/p.o. (best practice) If necessary, perform lease vs. buy analysis to ascertain the lowest cost method.318(d) Stipulate the type of procurement: FP, T&M.318(i) Ensure vendors aren t on excluded parties list SAM: Agency Review Risk Posed by Applicants Contracts awarded based on contractor integrity, record of past performance, and financial & technical capability.318(h) 26

27 Procurement General Procurement Standards.318(i)&(j) Maintain records sufficient to detail history of procurement: rationale for method of procurement, contract type, selection or rejection, basis of price Limit the use of Time & Material contracts: only use when no other contract is suitable Set a ceiling price, if contract exceeds ceiling it is at their own risk Higher degree of oversight for effective cost controls and efficient methods 27

28 Procurement Full and open competition without restrictive practices: Unreasonable requirements to qualify to do business Unnecessary experience and excessive bonding Noncompetitive pricing practices between firms/affiliates Noncompetitive awards to consultants on retainer Specify only brand names instead of allowing an equal product offered Avoid the use of geographic preference laws RFP publicized and solicited from an adequate number of qualified sources 28

29 Procurement (f) Procurement by noncompetitive proposals when: (sole source) No Threshold at any level The item is available only from a single source Public emergency will be delayed by competition Awarding agency authorizes noncompetitive proposals After solicitation of a number of sources, competition is determined inadequate More than one [qualified] source submitting an offer is competition per (d), else sole source 29

30 Contract Cost & Price Must perform cost or price analysis Cost & price analysis performed with every procurement action > $150,000 including contract modifications NFE negotiate profit as a separate element of the price for each contract w/no competition and all cases where cost analysis is performed 30

31 Contract Cost & Price Must perform cost or price analysis A fair and reasonable profit should be based on: Complexity of the work to be performed Risk borne by contractor Contractor s investment The amount of subcontracting The quality of its record of past performance Industry profit rates in the surrounding geographical area for similar work 31

32 Methods of Procurement Procurement by micro-purchases: adequate suppliers under $3,000 no competition Procurement by Small Purchase Procedures under Simple Acquisition Threshold requires adequate number of qualified sources Procurement by sealed bids: fixed price, lowest bid if meet all qualifications Procurement by competitive proposals for fixed price or cost reimbursable 32

33 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (8/29/14) Indirect cost procurements FAQ Since they are not a direct cost procurement, they do not follow the procurement standards Uniform guidance procurement rules do not apply to acquisitions in the indirect cost areas Uniform guidance procurement rules only apply to the acquisition of goods and services that are directly charged to a Federal award. 33

34 Fixed Amount Awards

35 Subpart C Pre-Award Conditions (b) New Use of Fixed Awards Payments are based on achieving specific requirements Federal amount is negotiated using the cost principles as a guide There is no government review of actual cost incurred Project scope is specific Paid in partial payments based on milestones, unit prices, or full payment upon completion 35

36 Impact of the Joint Interim Rule Technical Fixes Fixed Award / Sub-Awards (b)(1) new verbiage: The FAA or passthrough entity may use fixed amount awards if the project scope is specific and if adequate cost, historical, or unit pricing data is available to establish a fixed amount award based on reasonable estimate of actual cost. Old language was with assurance that the NFE will realize no increment above actual cost. Agencies still have to provide more specific guidance as to the form and details of fixed awards / subawards 36

37 Subpart C Pre-Award Conditions (b) New Use of Fixed Awards Cannot have cost sharing NFE must certify at the end of the award that the project was completed or level of effort was achieved Change in principal investigator or scope of effort must receive prior approval Fixed awards means the NFE provides a level of support regardless of the amount of actual cost incurred Reduces administrative burden and recordkeeping Accountability is based on performance and results Awards/sub-awards for fixed amounts based on simple acquisition threshold of $150,

38 Uniform Guidance 2 CFR 200 Fixed Awards COFAR FAQ: (11/26/14) Fixed Amount Awards ( ) FAQ Are appropriate when the work to be performed can be priced with a reasonable degree of certainty Examples of NFE pricing mechanisms are: (1) Past experience with similar types of work and outcomes with reliably predicted costs (2) NFE can easily obtain price estimates (bids, quotes, catalog pricing) for the significant cost elements 38

39 Uniform Guidance 2 CFR 200 Fixed Awards COFAR FAQ: (11/26/14) Fixed Amount Awards ( ) FAQ Salaries subject to, e.g. ACF or NIH statutory limits, are not mandatory cost-share or match Rather they are statutory limitations that cap charges to a Federal award Amounts above the cap are paid at the discretion of the NFE Since the statutory salary caps are not match, they can be used in fixed amount awards 39

40 Uniform Guidance 2 CFR 200 Fixed Awards COFAR FAQ: (11/26/14) Fixed Amount Awards & End of Award Certifications ( ) FAQ If the FAA does not prescribe the requirements for an end of fixed award certification then: (1) The recipient or sub should certify completion (2) Per (c)(3), a reduction of more than 25% of the level of effort must be reported to the FAA and requires a downward adjustment Reduction methods may include: (a) Adjustment based on percentage of completed work (b) Adjustment based on actual costs incurred-to-date 40

41 Sub-Recipient Monitoring Procedures & Requirements for Pass-Through Entities (PTE)

42 Sub-Recipient Monitoring A Pass-Through Entity (PTE): nonfederal entity provides awards to subrecipient to carry out a federal program Federal award to subrecipient vs. payment of goods and services to a vendor, now contractor

43 Definition of Sub-recipient.330 Federal award characteristics: 1. Determines who is eligible to receive federal assistance 2. Performance measured against objectives of federal program to determine if met 3. Responsibility for programmatic decision making programmatic work is unique 4. Responsibility to follow federal program compliance requirements 5. Use federal funds to carry-out a Federal activity 43

44 Definition of Contractor Procurement relationship with contractor relating to Goods & Services (G&S): 1. Provides G&S within normal business operations 2. Provides similar G&S to many diff. purchasers 3. Operates in a competitive environment 4. G&S are ancillary to operation of federal program 5. Not subject to compliance requirements of a Federal program Use of judgment in making determination as whether the relationship is a sub-recipient or contractor: substance over form 8-29 FAQ vendor & contractor has same meaning 44

45 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (8/29/14).23-2 If PTE calls a sub-award a contract it must treat it as a sub-award per Sub-Recipient and Contractor Determinations Likewise if a PTE has a contract and calls a subcontract or a vendor agreement it must treat it as a contract per

46 Sub-Recipient Monitoring Federal award identification to subrecipient: CFDA title and Federal Award Identification No. Unique Entity Identifier association w/sub s name Award name and number Award year Name of award agency Flow down clauses Total amount of Federal Award Other information such as indirect rate 46

47 Sub-Recipient Monitoring The sub-award agreement must include: Permit PTE and auditors to have access to their records and financial statements Terms and conditions for closeout of sub-award 47

48 Sub-Recipient Monitoring The sub-award agreement must include: All requirements on PTE is imposed on the subrecipient so that Federal award complies with Federal regulations, terms & conditions Any additional requirements PTE imposes on sub-recipient to meet its own responsibility to the Federal awarding agency An approved NICRA, negotiated rate between PTE and sub, or de-minimis rate of 10% between PTE and sub-recipient 48

49 Sub-Recipient Monitoring Evaluate each sub-recipient s risk of non-compliance w/federal regs, terms & conditions in order to determine the appropriate sub-recipient monitoring considering such factors as: The sub-recipient s prior experience with sub-awards Results of previous audits including Single Audit Whether sub-recipient has new personnel (training) and new or substantially changed systems The extent of Federal awarding agency monitoring, if the sub-recipient has direct awards with agencies Consider adding specific conditions per

50 Sub-Recipient Monitoring Monitor the sub-recipient s activities to ensure the sub-award is used for authorized purposes. PTE monitoring must include: Reviewing financial and programmatic reports Follow-up, ensuring sub-recipient takes timely and appropriate action on all deficiencies pertaining to the Federal sub-award detected from audits and on-site reviews Issue management decision on audit findings from the PTE to the sub-recipient 50

51 Sub-Recipient Monitoring Based on the PTE s assessment of risk posed by the sub-recipient, consider using these monitoring tools To ensure proper accountability; compliance with program requirements; achievement of performance goals: Provide training and technical assistance on program-related matters Perform on-site reviews of program operations Arrange for agreed-upon-procedures engagements per

52 Sub-Recipient Monitoring Verify sub-recipient had a Single Audit per Subpart F when they have expended or exceeded the threshold per Consider whether the results of audits, on-site reviews or other monitoring indicate conditions that necessitate adjustments to PTE own records Consider taking enforcement action against noncompliant sub-recipients per remedies 52

53 What s New with Indirect Rates

54 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (9/9/15) FAQ Voluntary under-charging, or waiving the recovery of 100% of applied indirect costs If a Non-Federal Entity (NFE) [2 CFR ] voluntarily (without coercion) decides to charge less than the established negotiated rate or waive the NICRA entirely, is a permissible practice Sometimes the NFE requires more funds for direct program efforts and thus reduces the amount of applied indirect or no indirect rate though they have a negotiated indirect rate 54

55 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (9/9/15) FAQ.19-1 Cognizant Agency for Indirect Cost Even though a cognizant agency (by statute) does not allow the NFE to recover indirect cost for a particular program: Example: CFDA HIV Emergency Relief Project Grants Such cognizant agency is still responsible to negotiate indirect cost 55

56 Subpart E Cost Principles Uniform Guidance : New Optional Rate 10% de minimis rate: per (f) Never received a negotiated indirect rate Charge on a modified total direct cost base May use indefinitely until negotiate an indirect rate Direct and indirect costs charged consistently but not as both causing double-charging Use consistently on all Federal awards 56

57 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (8/29/14) FAQ PTE* s Obligation re. Indirect Rate Negotiation If a sub has a NICRA, the PTE must honor the NICRA PTE s with subs that don t have a NICRA The PTE has the option to negotiate an indirect rate with a sub, or The PTE cannot offer a de minimis indirect rate lower than 10%; it must be 10% *PTE = Pass-Through Entity 57

58 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (9/9/15) FAQ NFE s Applying for De Minimis Rates having a break in Federal relationship If a NFE has a previously negotiated indirect rate but all Federal awards under that NICRA have expired as well as the NICRA Can the NFE apply for a 10% de minimis rate? NO. The 10% de minimis rate is only for those who have never had a negotiated indirect rate. The Government expects org s that have had experience developing & negotiating rates in the past, will have the adequate resources to prepare new indirect rates 58

59 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (9/9/15) FAQ % De Minimis Rate (DMR) & Single Function NFE The DMR cannot be used for a single function (program) NFE who charges 100% of cost direct The DMR is intended to be used to pay for indirect costs that are not directly assignable to a Federal award As prescribed in (d) a cost for the same purpose charged as a direct cost to a Federal award cannot be also be charged for the same purpose as an allocated indirect cost 59

60 Subpart E Cost PrinciplesFAQ Uniform Guidance: State, Local&Tribal Units State, Local, Tribal Governmental units can have a 10% de minimis rate per prior slide The amount of Federal awards for that unit of government has to be less than $35 Million per fiscal year They must document decision on file to select the 10% de minimis rate Never have received a NICRA indirect rate Per Appendix VII, D(1)(b) 60

61 Subpart E Cost Principles Uniform Guidance: New NICRA Extension NFE has existing negotiated indirect rate: One-time extension of current indirect rate For a period of up to 4 years If granted, cannot request a rate review until extension period ends At end of 4 year period, must re-apply to negotiate a new rate 61

62 Subpart E Cost Principles Uniform Guidance: FAQ The extension period can be 1, 2, 3, or 4 years The extension period is once for each negotiation cycle Once the extension period is over, org negotiates a new rate and then that NICRA can be extended again for up to 4 years Can only be done for predetermined and final rates not for provisional or fixed 62

63 Subpart E Cost Principles Uniform Guidance: (11/26/14) FAQ & 3 Is there special documentation requirements for an extension? No, the extension process is designed to reduced administrative burden What about the time of the request for an extension. No later than 60 days prior to due date for proposal of indirect costs, or if after, on a case-by-case basis the agency can accept requests 63

64 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (9/9/15) FAQ The requirement to have a current Federally negotiated, final indirect rate for Extension To be current, NFE must comply with the following: Extensions can only happen after 12/26/14 If NFE has 12/31 year-end Must have final rates through 12/31/14 & completed Single audit completed by 9/30/15 Submit final indirect rates for 12/31/15 + audit by 9/30/16

65 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (9/9/15) FAQ To be current, NFE must comply with the items on the previous slide: Then, NFE could request an extension of their FY 15 final indirect rate for FY s 2016 up to FY 2019, applicable to grants Rate extensions do not apply to cost reimbursable contracts

66 Subpart E Cost Principles Uniform Guidance: New Options Direct cost allocation principle (d) 1. If cost benefits two or more direct programs 2. In proportions that can be determined without undue effort or cost (e.g. summer workshops) 3. Costs must be allocated to projects If 1 and 2 cannot determine proportions based on interrelation of work involved, then allocated on benefited projects on a reasonable documented basis Purchase of equipment or capital assets for a specific award are assignable to that award only regardless of use on other projects or no longer needed as acquired 66

67 Subpart E Cost Principles Uniform Guidance: New Options Direct charging of admin staff wages may be appropriate when all items are met: (c) Administrative services are necessary to a project Individuals involved can be specifically identified to a project, such as time reports Administrative wages are included in the budget or prior written approval from agency Such costs are not recovered as indirect cost 67

68 Subpart E Cost Principles Uniform Guidance: New Requirements Unallowable activities and donated services receive allocation of indirect costs (b) Costs allocable to a Federal award may not be charged to cover fund deficiencies to avoid restrictions in the regulations (c) Limitation on allowable costs If maximum amount allowable under a limitation is less than total amount determined, the delta is not recoverable and cannot be charged to another award 68

69 Subpart E Cost Principles Uniform Guidance: New Requirements Payments made for costs determined to be unallowable must be refunded including interest to Federal government Unallowable by Federal awarding agency Cognizant agency for indirect cost Pass-through entity Either direct or indirect unallowable cost 69

70 Subpart E Cost Principles Uniform Guidance: New Requirements Adjustments of previously negotiated indirect cost rates containing unallowable costs Negotiated indirect cost rates later found to have costs: 1. Unallowable specified by Federal statutes, regulations or terms and conditions of a Federal award 2. Unallowable as not allocable to Federal award(s) Must be adjusted for a refund Adjustments are used to correct established negotiated rates Will not re-open for rate negotiation Applied to all types of rates: fixed, final, predeter, prov. 70

71 Subpart E Cost Principles Uniform Guidance: New Requirements Adjustments of previously negotiated indirect cost rates containing unallowable costs For projected rates of a future year, the costs are removed from cost pools and rates appropriated adjusted downward For historical rates of a past period, the unallowable costs will be computed by fiscal year and a cash refund including interest For current year rates, either a rate adjustment or refund per cognizant agency 71

72 Subpart E Cost Principles Uniform Guidance: New Requirements Adjustments of previously negotiated indirect cost rates containing unallowable costs For multiple years, the proportional amount of unallowable costs in the base year will be extrapolated to the out-year rates 72

73 Subpart E Cost Principles Uniform Guidance: New Certifications Assure proper expenditures (a) Certifying project budgets, annual and final fiscal reports or vouchers requesting payments By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may be subject to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. 73

74 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (8/29/14) What if state / PTE provides to a sub-recipient both Federal & non-federal funds, does the indirect rate application apply only to Federal funds or total funds? FAQ It would only apply to the Federal funds and not to state funds per terms and conditions of the award Are there no limits on the layers of multi-tier sub-recipients with the application of indirect cost rates such as from state to city, city to nonprofit, nonprofit to another nonprofit? There are no limits in the new rules, but award terms could place a limit per FAQ

75 Uniform Guidance 2 CFR 200 Indirect Rates & Subs COFAR FAQ: (11/26/14) FAQ Delayed Federal funds If temporarily using state funds while waiting for Federal budget/funds to be approved, must the state reimburse subrecipients for their indirect costs as directed in the Uniform Guidance? YES, because costs ultimately charged to a Federal award must comply with the terms & conditions of the Federal award, including the Uniform Guidance. 75

76 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (8/29/14) States often blend several Federal funding streams to reimburse nonprofit service providers. Some of the funding streams may have indirect rate caps or no indirect limitations. FAQ Each funding stream or Federal award will have its unique terms and conditions to follow. Each award has its unique limitations on indirect cost or rates, or no restrictions which states and other PTEs must follow. 76

77 Uniform Guidance 2 CFR 200 Indirect Rates & Subs COFAR FAQ (11/26/14) States often blend several Federal funding streams to reimburse nonprofit service providers. Some of the funding streams may have indirect rate caps or no indirect limitations. FAQ FAQ (11/26/14) If a NFE wishes to blend funds from multiple Federal awards, & apply only one set of terms and conditions to a Federal award: The Terms and Conditions of that arrangement must be agreed to in advance by all participating Federal agencies via a Prior Written Approval 77

78 Uniform Guidance 2 CFR 200 COFAR FAQ Update: (8/29/14) FAQ What happens if the PTE does not honor the NICRA rate of the sub? Under , the PTE must use the negotiated indirect rate of the sub. If not, there are remedies that a Federal awarding agency can sanction the PTE under through Report the matter to the agency IG overseeing your Federal award. Make sure the sub-award agreement stipulates the use of your NICRA currently in effect. 78

79 Categorized List of Cost Principles per 2 CFR Subpart E

80 Allowability Of Selected Costs Under 2 CFR Selected Costs May Be Allowable (A), Unallowable (UA), Allowable With Restrictions (AWR), or Unallowable With Exceptions (UWE) 1. Advertising and Public Relations Cost. (UWE) Advisory Councils. (A) Alcoholic Beverages. (UA) Alumni/ae Activities (UA) IHE 5. Audit Services. (A) Bad Debts. (UA) Bonding Costs. (A) Collections of Improper Payments. (A) New Principle 9. Commencement & Convocation Costs. (UA) IHE 10. Compensation - Personal Services. (AWR) Compensation Fringe Benefits. (AWR) Conferences. (AWR) Contingency Provisions. (AWR)

81 Allowability Of Selected Costs Under 2 CFR Selected Costs May Be Allowable (A), Unallowable (UA), Allowable With Restrictions (AWR), or Unallowable With Exceptions (UWE) 14. Contributions and Donations (UA) Defense and prosecution of criminal and civil proceedings, claims, appeals, and patent infringement. (UWE) Depreciation. (AWR) Employee health, and welfare costs. (A) Entertainment costs. (UWE) Equipment and other capital expenditures. (AWR) Exchange Rates (AWR) New Cost Principle 21. Fines and penalties. (UA) Fund raising and Investment Management Costs (UWE) Gains & Losses on Disposition of Depreciable Assets (AWR) General Costs of Government (UA) State & Local Gov t 25. Goods or Services for Personnel Use (UA) Idle Facilities and Idle Capacity (AWR) Insurance and Indemnification (AWR)

82 Allowability Of Selected Costs Under 2 CFR Selected Costs May Be Allowable (A), Unallowable (UA), Allowable With Restrictions (AWR), or Unallowable With Exceptions (UWE) 28. Intellectual Property (AWR) 29. Interest (UWE) 30. Lobbying (UWE) 31. Losses on Other Awards or Contracts (UA) 32. Maintenance and Repair Costs (A) 33. Materials, Supplies Including Computing Devices (A) 34. Memberships, Subscriptions, & Professional Activity Costs (AWR) 35. Organizational Costs (UA) 36. Participant Support Costs (AWR) 37. Plant and Security Costs (A) 38. Pre-Award Costs (AWR) 39. Professional Service Costs (AWR) 82

83 Allowability Of Selected Costs Under 2 CFR Selected Costs May Be Allowable (A), Unallowable (UA), Allowable With Restrictions (AWR), or Unallowable With Exceptions (UWE) 40. Proposal Cost (AWR) New Cost Principle 41. Publication and Printing Costs (AWR) 42. Rearrangement and Reconversion Costs (AWR) 43. Recruiting costs (AWR) 44. Relocation costs (AWR) 45. Rental Costs of Real Property and Equipment (AWR) 46. Scholarships and Student Aid Costs (AWR) IHE 47. Selling and Marketing Expenses (UWE) 48. Specialized Service Facilities (AWR) 49. Student Activity Costs (UA) IHE 50. Taxes Included VAT (UWE) 51. Termination Costs (AWR) 52. Training and Education Costs (A) 83

84 Allowability Of Selected Costs Under 2 CFR Selected Costs May Be Allowable (A), Unallowable (UA), Allowable With Restrictions (AWR), or Unallowable With Exceptions (UWE) 53. Transportation Costs (A) 54. Travel Costs (AWR) 55. Trustees (A) 56. Independent Research & Development (UA) 45 CFR only for HHS (included in the MTDC allocation base) 84

85 The Path Forward What s Next? How to We Start the Implementation Process?

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87 Any Questions 87

88 The materials contained herein or discussed in the webinar session or shown in the MS Powerpoint slides, are for illustrative and academic purposes only and should not be considered appropriate for your organization without careful adaptation by experts in the appropriate field of endeavor. DISCLAIMER 88