Uniform Guidance

What is the Uniform Guidance?

The “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, or “Uniform Guidance” was adopted to consolidate and streamline the regulatory framework governing the administration of federal grants as well as create efficiencies and increased transparency. It replaces and consolidates eight (8) Office of Management and Budget (OMB) circulars, including those circulars that have guided Montclair State University’s receipt and administration of federal grants for the past several decades—specifically, OMB A-21 (Cost Principles), OMB A-110 (Administrative Requirements) and OMB A-133 (Audit Requirements).

When does the Uniform Guidance take effect?

The “Uniform Guidance” will take effect on December 26, 2014 and will apply to new awards and incremental funding on existing awards (e.g., Year two of a three-year federal grant) received after December 26, 2014.
Federal awards that were fully funded prior to December 26, 2014 will continue to be governed by the terms and conditions that existed at the time of award (i.e., in most cases, previously funded awards will be governed by OMB Circulars A-21, A-110, and A-133).

How will the Uniform Guidance impact Montclair State University?

A summary of major applicable changes and their impact is listed in the table below. With regard to the allowability of items of cost on federal grants, little has changed. However, some notable changes include the allowance of administrative costs on federal awards under certain conditions. In addition, the treatment of “computing devices” has been modified to include printers, peripherals, storage devices, etc., and are allowable for devices that are essential and allocable to a specific project, but not solely dedicated, to the performance of that project (as was the case under the previous guidelines).
Other changes pertain to university requirements in receiving and administering federal awards. For example, universities are required to broaden their Financial Conflict of Interest Policy to apply to all federal grants regardless of the agencies funding them (prior regulations limited the FCOI application solely to PHS and NSF funded projects). The Uniform Guidance also imposes additional requirements upon the federal agencies with regard to their interactions with federal awardees (e.g., 60-day advance notice of funding opportunities).
The Uniform Guidance is organized into six (6) subparts, A-F, and 11 appendices. The subparts are summarized below.

A (Acronyms and Definitions)
B (General Provisions)
C (Pre-Award Requirements and Contents of Federal Awards)
D (Post-Award Requirements)
E (Cost Principles)
F (Audit Requirements)

To follow is a partial list of some of the major changes that will, or may have impact on Montclair State University:

Summary of Uniform Guidance and Impact
Topic	Subpart (section)	Federal Policy Change	Intended Impact
Funding Opportunity Advance Notice	C (§200.203)	Federal agencies must notify the public of all funding opportunities generally at least 60 days in advance of the deadline, with some exceptions. No funding opportunity may be available for less than 30 days.	Applicants will have additional time to prepare applications for submission.
Federal Agency Review of Risk Posed by Applicants	C (§200.204)	Prior to issuing an award, federal agencies are required to review available information (e.g., financial data) and evaluate risk.	Prior to award, agencies may request additional data from the University concerning its history of performance, financial reporting, and quality of management systems.
Subrecipient vs. Contractor Determination	C (§200.330)	The University must make case-by-case determinations whether each agreement it makes for the disbursement of Federal funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require the University to comply with additional guidance to support these determinations	May require the University to provide additional reporting to the federal funding agency concerning the pass-through entity prior to a subaward. However, the federal agency will provide guidance as to the additional information needed in connection with subawards.
Cost-Sharing	D (§200.306)	Voluntary committed cost sharing is prohibited on federal research proposals except where otherwise provided by statute. Cost-sharing will not be used as a factor in the review of applications, and is only required if specified in the funding opportunity announcement.	The University’s current policy applicable to NSF grants is now extended to all federal funded grants. Proposals will be judged on review criteria that does not take into consideration a voluntary cost-share commitment.
Financial and Program Management	D (§200.301)	Federal agencies must collect standardized “performance data” elements. Performance is measured to improve performance outcomes. The University will be required to demonstrate responsible procurement and costing practices.	Reporting to the federal funded agency on performance ensures increased accountability to the federal government.
Fixed Amount Subawards	D (§200.332)	With prior written approval from the federal awarding agency, a pass-through entity may provide subawards based on fixed amounts up to the Simplified Acquisition Threshold ($150,000), provided that the subawards meet the requirements for fixed amount awards set forth in 2 C.F.R. §200.201 (Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts).	Provides flexibility to the University in the issuance of fixed-price contracts to subrecipients. For example, where familiarity might not exist, payment might be based on performance or deliverables.
Subrecipient Monitoring and Management	D (§200.301)	Institutions must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. The University must include additional data elements in subaward agreements at time of award. The University must monitor the activities of the subrecipient as necessary to ensure fiscal and programmatic compliance. The University must be given access to subrecipient’s financial and programmatic records to meet the federal agency’s audit requirements. The University must include a management decision for audit findings on weaknesses of a subrecipient on federal awards and follow up to ensure corrective action.	The University must meet specific pre-award and post-award assessment and monitoring requirements when entering into federally funded subaward contracts.
Procurement Standards	D (§200.317-326)	Detailed procurement methods that must be followed to purchase goods and services valued at $3,000 or more with the use of federal funds.	Note: OMB is providing a one-year grace period to December 26, 2015 for universities to comply with these standards. Expect to see changes in the University’s Procurement Policies to ensure compliance with these new standards.
Major Cost-Principle Changes (not including effort reporting)	E (§200.400-§200.475)	Administrative and Clerical staff salaries may be directly allowable if integral to project and explicitly included in the project budget, if approved in advance by the sponsor. Computing devices are treated as supplies provided their cost is less than $5,000. Computing devices are those devices “that acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving, or storing electronic information.” Residual materials/supplies in excess of $5,000 upon completion of a project can be retained for use on other activities. Subrecipients must use a federally negotiated indirect cost rate, or a de minimus rate of 10% of modified total direct costs (MTDC).	Increased flexibility with regard to proposal costing and award management where essential to program success.
Time and Effort Reporting	E (§200.430)	Simplifies Reporting Requirements for Time and Effort: Eliminates effort reporting examples from A-21	The University will have more flexibility implementing its own systems to report effort provided federal guidelines are followed, e.g., frequency of reporting.

Other Resources

Council on Financial Assistance Reform (COFAR), “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” (Includes FAQ)

Attain, Inc. “OMB Grants Management and Reform”

Questions?

Please contact: osp@liashapiro.com, or x4128.