MAXIMUS Higher Education Practice

Federal Compliance Webinar Series 2 CFR 200 Uniform Guidance Kris Rhodes, Director, MAXIMUS Jason Guilbeault, Senior Consultant, MAXIMUS 1 MAXIMUS Higher Education Practice Headquartered in Northbrook, IL Satellite Offices in: Denver, CO, Lexington, KY, Columbus, OH, Phoenix, AZ, Charlottesville, VA, McLean, VA, and Albany, NY Backed by a $1.3 billion multinational corporation Gives our practice unparalleled financial stability and the resources to invest in developing expertise in Federal regulations and guidance like 2 CFR Part 200 2 1

MAXIMUS Higher Education Practice Serves over 150 colleges, universities, and university hospitals in 49 states plus universities in Puerto Rico and the US Virgin Islands 90 top 100 research institutions Less than $1M to $1B in research 3 MAXIMUS Products and Services F&A and Other Rate Consulting Services F&A Cost Rate Proposal Preparation (Long and Short Form) Space Surveys/Reviews Negotiations with DHHS CAS* & ONR/DCAA, as well as Prime/Subrecipient Negotiations Fringe Benefit Rate Proposals Assistance with Federal Disclosure Statement (DS 2) and Direct Costing Policy Reviews of Service Centers and/or Recharge Centers Rates and Policies OMB Uniform Guidance (2 CFR Part 200) Diagnostic - http://www.maximus.com/higher-education/omb-uniform-guidance 4 2

MAXIMUS Products and Services F&A Software Solutions Comprehensive Rate Information System Industry leading proprietary F&A software used by over 150 universities to prepare, produce, optimize F&A proposals since 1988 Most robust web based Space Survey and Space Inventory tool on market (since 2003) Eliminates paper and reduces time Over 50 universities use WebSpace 5 MAXIMUS Products and Services Effort Reporting Consulting and Software, ERS Pre and Post Award Consulting Services and Training includes: Research Operational Reviews Business Process Review and Improvement Policy and Procedure Writing Federal Compliance/Risk Assessment Transition Staffing Audit Response Assistance Export Control Compliance And More 6 3

Federal Compliance Webinar Series 2 CFR 200 Uniform Guidance Performance and Financial Monitoring and Reporting Subrecipient Monitoring and Management 7 2 CFR 200 Uniform Administrative Requirements Subpart B-D sets forth the uniform administrative requirements for grant and cooperative agreements Subpart B: General Provisions Subpart C: Pre-Federal Award Requirements and Contents of Federal Awards Subpart D: Post Federal Award Requirements Standards for Financial and Program Management Property Standards Procurement Standards Performance and Financial Monitoring and Reporting Subrecipient Monitoring and Management Record Retention and Access Closeout and Post-Closeout Adjustments and Continuing Responsibilities Collection of Amounts Due 8 4

Performance and Financial Monitoring and Reporting: 2 CFR Part 200: 200.327-200.329 200.327 Financial reporting 200.328 Monitoring and reporting program performance 200.329 Reporting on real property 9 Financial Reporting 200.327 Agencies may only request the standard, OMB-approved governmentwide data elements for the collection financial information. Examples: SF 270 Request for Advance or Reimbursement SF 272 Report of Federal Cash Transactions Must be submitted at least annually and no more frequently than quarterly except in unusual circumstances. 10 5

Monitoring and Reporting Program Performance 200.328 Monitoring: Organizations are responsible for oversight, compliance, and performance achievement. Monitoring must cover each program, function, or activity. Performance Reports: Must use standard governmentwide data elements for performance progress reports, Research Performance Progress Report, or such other standards issued by OMB. Due Dates: Annual reports are due 90 calendar days after the reporting period; quarterly or semiannual reports are due 30 calendar days after the reporting period. 11 Monitoring and Reporting Program Performance 200.328 Reporting Progress Comparison of actual accomplishments to objectives established for period. Where accomplishment can be quantified a computation of the cost may be required; performance trend data and analysis may be required. Reasons why established goals were not met, if appropriate. Additional pertinent information, such as explanations of cost overruns or high unit costs Agencies may: Make site visits Waive any performance reporting from 2 CFR 200 if not needed 12 6

Reporting Significant Developments (200.328) Agency notification required for: Problems, delays or adverse conditions encountered which will impair the ability to meet the program s objective(s). Disclosure must include a statement of action taken or planned and assistance that may be needed to resolve the situation. Favorable developments: being ahead of schedule, less costs than anticipated, or different beneficial results other than originally planned. 13 Reporting on Real Property 200.329 Real Property (200.85) - means land, including land improvements, structures and appurtenances thereto, but excludes moveable machinery and equipment. 200.329 - The Federal awarding agency or pass-through entity must require a non-federal entity to submit reports at least annually on the status of real property in which the Federal government retains an interest. Frequency could be less frequent if Federal interest for a period of 15 years or more, HOWEVER: Cannot be less frequent than 5 years Federal awarding agency or PTE may require annual reporting for the first 3 years and then switch to reporting every 5 years. Don t forget section 200.311 Real Property, which describes regulations for title, use, and disposition 14 7

Subrecipient Monitoring and Management: 2 CFR Part 200: 200.330-200.332 200.330 Subrecipient and Contractor Determinations 200.331 Requirements for Pass- Through Entities 200.332 Fixed Amount Subawards 15 Subrecipient and Contractor Determinations 200.330 Pass-through entities (PTEs) must make a case-by-case determination of the role of subrecipient or contractor. The awarding agency may supply and require recipients to comply with additional guidance to support these determinations, provided such guidance does not conflict with this section. PTEs are expected to use judgment in making the determination, the substance of the relationship is more important than the form of the agreement. 16 8

Subrecipients 200.330 (a) Subaward Definition: An award provided by a PTE to a subrecipient for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient. A subaward may be provided through any form, including an agreement the PTE considers a contract. Subaward Characteristics include: Determination by the PTE who is eligible to receive assistance; Performance is measured in relation to whether objective of a program are met; Responsible for adherence to applicable Federal program requirements stated in the Federal award; Responsibility for programmatic decision making; and Use of funds to carry out a program for a public purpose, as opposed to providing goods or services 17 Contractors 200.330 (b) Contract Definition: Contracts are a legal instrument for purchase of property, goods or services to carry out a project; they create a procurement relationship with the contractor. Contractor Characteristics include when the entity: Provides goods and services within normal business operations; Provides similar goods or services to many different purchasers; Normally operates in a competitive environment; Provides goods or services that are ancillary to the operation of the Federal program; and Is not subject to compliance requirement of the Federal program as a result of the agreement. 18 9

Requirements for Pass-Through Entities 200.331(a) PTEs must: Ensure every subaward is clearly identified to the subrecipient as a subward at the time of issuance and includes the federally prescribed data elements from this section. Flow down the applicable terms and conditions of the prime award. Ensure additional requirements are imposed to enable the PTE to meets it own responsibility for reporting. Use the subrecipients approved indirect cost rate, if no rate exists then work to negotiate a rate or apply the de minimis indirect cost rate of 10%. Ensure access to the subrecipient s records and financial statements. Ensure the subaward includes terms and conditions concerning the closeout of the subaward. 19 COFAR FAQ Clarification on Subs and Indirect Costs Indirect cost rate requirement in 200.331(a)(4) only applies to Federal awards No limit on indirect costs for layers of subrecipients, but Federal award may have a limit Charging for indirect costs or establishing an indirect cost rate is not mandatory. Non-Federal entities that charge 100% of their costs to awards may continue to do so. If a subrecipient has a Federally negotiated rate, it must be used, except in cases where the award has a statutorily imposed cap on indirect cost rates. 20 10

COFAR FAQ Clarification on Subs and Indirect Costs Cannot entice or force subrecipients without a rate to use a rate lower than the 10% de minims rate. If an award has a statutorily imposed indirect cost rate cap lower than the de minims rate, that can be used. PTE s are not required to negotiate a rate with a subrecipient, but may do so if they wish and the subrecipient asks to do so. If your PTE does not honor your Federally negotiated indirect cost rate, and there is no statutorily imposed cap on indirect cost rates in the award, you should remind them of their obligation in 200.331 of the Uniform Guidance. 200.108 says that Non-Federal entity inquiries should be addressed to the Federal awarding agency, cognizant agency for indirect costs, cognizant or oversight agency for audit, or pass-through entity as appropriate. 21 PTE Risk Evaluation 200.331(b) PTEs must evaluate each subrecipient s risk of noncompliance. Factors for consideration include: Prior experience with same or similar awards; Results of previous audits, including whether the entity receives a Single Audit; Whether the organization has new personnel or new or substantially changed systems; and The extend and results of Federal awarding agency monitoring 22 11

Subaward Terms for Risk Mitigation 200.331 (c) PTEs are authorized to impose the following terms (200.206): Requiring payments as reimbursement rather than advance payment Withhold authority to proceed to the next phase until receipt of evidence of acceptable performance within the performance period Require additional, more detailed financial reports Require additional project monitoring Require attendance at technical or management assistance training Require additional prior approvals and notifications 23 Subaward Terms for Risk Mitigation 200.331 (c) PTEs must notify the subrecipient as to the: Additional requirements, why they are being imposed Actions needed to remove the additional requirements, if applicable Methods for requesting reconsideration of the requirements Any special conditions must be promptly removed once they have been addressed or corrected. 24 12

PTEs and Monitoring 200.331 (d-f) Monitoring must include: Reviewing programmatic reports Ensuring subrecipients take timely and appropriate action on all deficiencies Issuance of a management decision for audit findings pertaining to the award Verification every subrecipient is audited, if required by 2 CFR 200.501 25 PTEs and Monitoring 200.331 (d-f) Depending on the risk assessment, monitoring may include: Providing of training and technical assistance Performing on-site reviews of program operations Arranging for agreed-upon-procedures audit engagements If monitoring or auditing indicates corrections must be made, the PTE must ensure their records are also corrected. If enforcement actions are required, they are taken in accordance with 200.338, Remedies for Non-compliance. 26 13

Fixed Amount Subawards 200.332 With prior approval organizations may provide subawards based on fixed amount up to the Simplified Acquisition Threshold, providing compliance with 200.201: Payments are based on meeting specific requirements Accountability is based on performance and results The amount is negotiated using the cost principles or other pricing information as a guide Does not include a commitment for cost share Changes in principal investigator, project leader receive prior approval. Agreement provides for a certification in writing that the project was completed or the level of activity expended If the required activity was not completed or the level of effort was not carried the amount of the award must be adjusted. 27 Recap of other Subrecipient Monitoring activities: Conduct a risk assessment Make sure your subrecipients are in compliance with: Requirements of Federal award Awarding Federal agency regulations Must also be in compliance with the Uniform Guidance. Financial Management (200.302) Internal Controls (200.303) Cost Sharing or Matching, if applicable to award (200.306) Revision of Budget and Program Plans (200.308) Equipment (200.313) Procurement Standards (200.317 200.326) Monitoring and Reporting Program Performance (200.328) Retention Requirements for Records (200.333) Access to Records (200.336) Remedies for Noncompliance (200.338) Closeout (200.343) Cost Principles (Subpart E) Audit Requirements (Subpart F) 28 14

Questions from Pre-Webinar Survey Some organizations are insisting that 2 CFR 200 requires collection of backup documentation for all sub invoices, and a "clean" A-133 audit report is meaningless. Can you address that issue. How can we balance the collaborative nature of higher education with the required compliance monitoring? How can prime recipient institutions effectively monitor when we are not familiar with the details of another organization and what tools do we have to enforce compliance? Who should be responsible for subrecipient monitoring- the PI or the financial and administrative personnel of the Contracts and Grants Division? Or both? 29 Questions from Pre-Webinar Survey What are some monitoring techniques for subrecipients not subject to higher threshold? Responsibilities for prime award institutions outside of U.S.? Does the de minimus 10% IDC rate apply to foreign entities? Monitoring of required training (Responsible Conduct of Research/Conflict of Interest Training)? When should the risk assessment take place? Before proposal is submitted or once award is made? What best practices should be adopted to confirm receipt and review of subrecipient performance and financial reports in a decentralized setting? 30 15

Take Aways Don t forget to report favorable developments and problems as soon as they are known. Review and update your policies and procedures. Have a plan for subrecipient risk assessment and monitoring. 31 Upcoming Webinar Schedule: Record Retention, and Access, Remedies for Noncompliance, Closeout, Post Closeout Adjustments and Continuing Responsibilities, and Collection of Amounts Due 11/20/14, 3pm Eastern Time Invites will be sent out for each webinar about 3 weeks in advance, or you can visit our new website to register, and also view old recordings. http://www.maximus.com/higher-education/webinars 32 16

Upcoming Conferences where we will be. SRA in San Diego, CA 10/18 10/22 SACUBO in Tampa, FL 10/26 10/29 33 Questions? KrisRhodes@maximus.com JasonRGuilbeault@maximus.com 34 17