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Webinar Slides: Top Lessons Learned from the First Year of the Uniform Grant Guidance Implementation


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Original air date:
April 28, 2016
Rebroadcast and recording at

Recently, many not-for-profits faced a challenging task: implementing the Cost Principles and Administrative Requirements of the Uniform Grant Guidance (Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards or UGG). Many struggled with best practice solutions for how to adapt their existing protocol for the guidance the UGG replaced, which included cost circulars such as the OMB Circular A-21, A-122, A-133 and others.

In this session, we will review the more significant changes in UGG, and Brown University will present its experiences and several lessons learned as it went through a rigorous implementation of these changes. Hear how the university planned, executed and evaluated its implementation to ensure it met its new requirements.

Whether you are a large or small organization, you will walk away from this session with best practice ideas and lessons learned to implement in your organization.

Published in: Government & Nonprofit
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Webinar Slides: Top Lessons Learned from the First Year of the Uniform Grant Guidance Implementation

  1. 1. #cbizmhmwebinar 1 CBIZ & MHM Executive Education Series™ Uniform Grant Guidance: One Year Later Michelle Spriggs and Marisa Schasel April 28 & May 17, 2016
  2. 2. #cbizmhmwebinar 2 About Us • Together, CBIZ & MHM are a Top Ten accounting provider • Offices in most major markets • Tax, audit and attest* and advisory services • Over 2,900 professionals nationwide A member of Kreston International A global network of independent accounting firms *MHM is an independent CPA firm providing audit, review and attest services, and works closely with CBIZ, a business consulting, tax and financial services provider.
  3. 3. #cbizmhmwebinar 3 Before We Get Started… • To view this webinar in full screen mode, click on view options in the upper right hand corner. • Click the Support tab for technical assistance. • If you have a question during the presentation, please use the Q&A feature at the bottom of your screen.
  4. 4. #cbizmhmwebinar 4 CPE Credit This webinar is eligible for CPE credit. To receive credit, you will need to answer periodic participation markers throughout the webinar. External participants will receive their CPE certificate via email immediately following the webinar.
  5. 5. #cbizmhmwebinar 5 Disclaimer The information in this Executive Education Series course is a brief summary and may not include all the details relevant to your situation. Please contact your service provider to further discuss the impact on your business.
  6. 6. #cbizmhmwebinar 6 Presenters Michelle is a Shareholder in the Firm’s Not-For-Profit and Higher Education Audit Practice. Michelle is the not-for-profit subject matter expert in the Firm’s National Professional Standards Group. She has over 20 years of audit experience and is solely dedicated to serving not-for-profit organizations. Her experience includes managing financial statement and Single Audits (formerly OMB Circular A-133 audits); assisting in bond offerings; providing recommendations on internal controls; and training other accounting and auditing professionals to provide support to not-for-profit clients. 774.206.8336 • MICHELLE SPRIGGS, CPA, MBA MHM Shareholder
  7. 7. #cbizmhmwebinar 7 Presenters Marisa is a Managing Director in the Office of Sponsored Projects at Brown University and a 20+ year veteran in the field of sponsored projects administration. Marisa is also a subject matter expert on federal award compliance, including compliance with the Uniform Guidance. At Brown University, Marisa is responsible for the sponsored project post-award management and research administration systems. Prior to joining Brown University Marisa worked in Harvard University's Office of Sponsored Projects and was responsible for sponsored system operations and cash management. 401.863.1804 • MARISA SCHASEL, CPA Managing Director, Finance, Operations & Systems Brown University Office of Research Administration
  8. 8. #cbizmhmwebinar 8 Agenda Uniform Grant Guidance Background 02 01 03 04 Subpart D – Post Award Requirements • Internal Controls • Procurement Standards • Subrecipient Monitoring and Management Subpart E – Cost Principles 05 What to Do Now & Helpful Resources 06 Questions Subpart F – Audit Requirements
  10. 10. #cbizmhmwebinar 10 OMB Grant Reform – Chronology Presidential Direction – (Executive Order; Memorandum to Agencies) 2/28/12 – Advance Notice of Proposed Guidance 2/1/13 – Notice of Proposed Guidance (Rulemaking) 12/26/13 – Issue of Final Guidance (2 CFR Part 200) 6/26/14 – Federal Agency Draft Regulations to OMB 12/26/14 – Uniform Adoption by All Federal Agencies Fiscal years beginning after 12/26/14 – Single Audit Requirement (Subpart F) Applies 2 Phase Implementation
  11. 11. #cbizmhmwebinar 11 Key Effective Dates • Must implement policies and procedures by promulgating regulations • Effective December 26, 2014 Federal Agencies • Will need to implement the new Administrative Requirements and Cost Principles • All NEW Federal awards and ADDITIONAL funding to existing awards made after December 26, 2014 Non-Federal Entities • Effective for fiscal years beginning on or after December 26, 2014 • December 31, 2015 and June 30, 2016 Audit Requirements
  12. 12. #cbizmhmwebinar 12 OMB Grant Reform – Structure Contents Reference Origin A – Acronyms and Definitions 200.0 – 200.99 All Circulars B – General Provisions 200.100 – 200.113 All Circulars C – Pre-Federal Award Requirements and Contents of Federal Awards 200.200 – 200.211 A-110 and A-89 D – Post-Federal Award Requirements 200.300 – 200.345 A-110 and A-102 E – Cost Principles 200.400 – 200.475 A-21, A-87 and A-122 F – Audit Requirements 200.500 – 200.521 A-133 Appendices
  13. 13. #cbizmhmwebinar 13 SUBPART D – POST AWARD REQUIREMENTS
  14. 14. #cbizmhmwebinar 14 Subpart D – Post Award Requirements • Performance measurement • Financial management • Internal controls • Payment • Cost sharing/matching • Program income • Property standards • Procurement standards • Performance and financial monitoring and reporting • Subrecipient monitoring and management • Record retention and access • Remedies for noncompliance • Closeout
  16. 16. #cbizmhmwebinar 16 Internal Controls (200.303) • The Entity MUST establish and maintain effective internal control over Federal awards • The internal controls SHOULD be in compliance with guidance in: • “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the US - Green Book • “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission - COSO
  18. 18. #cbizmhmwebinar 18 Internal Controls (200.303) • Internal control assessment working team • Included representatives from Controller’s Office, Office of Sponsored Projects, Internal Audit, and Human Resources • Discussed impact of changes • Reviewed policies and procedures • Identified areas where we could strengthen internal controls and modified processes and procedures • Uniform Guidance website • Information sessions with department managers
  20. 20. #cbizmhmwebinar 20 Procurement (200.320)
  21. 21. #cbizmhmwebinar 21 The MUSTs of the New Procurement Rules 1. Must maintain written policies and procedures over procurement 2. Must maintain oversight to ensure contractors perform in accordance with terms and conditions of contract 3. Must maintain written standards of conduct covering conflicts of interest 4. Must maintain records sufficient to detail the history of procurement (i.e., rationale for method of procurement, selection of contract type, contractor selection or rejection, basis for contract type) 5. Must provide full and open competition
  22. 22. #cbizmhmwebinar 22 The MUSTs of the New Procurement Rules 6. Must use one of the following methods of procurement: • Micro-purchases • Small purchase procedures • Procurement by sealed bids • Competitive proposals • Noncompetitive proposals – sole source
  23. 23. #cbizmhmwebinar 23 Procurement “Claw” (Section 200.320)
  24. 24. #cbizmhmwebinar 24 Procurement – Effective Dates and Grace Period FAQ 200.110-6 • For compliance with the new procurement standards only, the federal government is providing a grace period of TWO full fiscal years after the effective date of the Uniform Guidance • For first full fiscal year beginning after December 26, 2014 (i.e., June 30, 2017) MUST document whether in compliance with old or new procurement standard AND MUST meet that documented standard • Future fiscal years (i.e., June 30, 2018) Must comply fully with procurement standards in UGG
  25. 25. #cbizmhmwebinar 25 Contents of Procurement Policy: • Code of conduct • Acceptable methods of procurement • Features of solicitation • Conduct of competition • Source evaluation and selection • Records retention • Contract administration
  27. 27. #cbizmhmwebinar 27 Procurement – Micro Purchase vs. Small Purchase • Brown University and other nonprofit research organizations have operated at micro-purchase thresholds of $5,000, $10,000, and in some cases, at higher levels for years • 70% of our purchasing transactions are between $3,000 and $10,000 • These transactions now will be subject to additional requirements • Obtain and document price and rate quotes
  28. 28. #cbizmhmwebinar 28 Significant Concern – Micro Purchase Threshold $3,000 • For example, acquisition of a $4,500 reagent with specific properties to support a precise chemical reaction • No longer an allowable “micro-purchase” under our current institutional policy • Now would be classified as a “small purchase” and be subject to 2 CFR 200.320(b)
  29. 29. #cbizmhmwebinar 29 Procurement – Micro Purchase Threshold $3,000 • Impact of implementing a $3,000 threshold for grants and cooperative agreements • Counterproductive to grants reform • Force institutions into expensive modifications of electronic systems and procurement management processes • Negatively impact Investigator productivity and the quality of the research • Increase administrative burden
  30. 30. #cbizmhmwebinar 30 Impact of Micro Purchase Threshold $3,000 • Need to modify developed procurement policies related to strategic sourcing, sole source, use of purchasing cards, etc. • Costly redesign of electronic systems • Revamp of training • Budget Implications • Increased administrative support • Brown estimate - 1 FTE
  31. 31. #cbizmhmwebinar 31 Procurement Standards – Moving Forward • We have made three specific requests: 1. Establish a “Grantee Exemption” process from 2 CFR 200.317-326; similar to the exemption offered to States 2. Fix sections of 2 CFR 200.317-326 that require common-sense improvements 3. Increase the Micro-purchase threshold from $3,000 to $10,000, with an option for a higher threshold
  33. 33. #cbizmhmwebinar 33 Subrecipient Monitoring (200.330-332) • Subrecipient Relationship • An assistance relationship • Determines eligibility • Performance measured against federal program objectives • Responsible for programmatic decision-making • Adheres to applicable federal program requirements • Uses federal funds to carry out a program for a public purpose specified in statute, as opposed to providing goods or services for the benefit of the pass-through entities • Contractor (Vendor) Relationship • A procurement relationship • Provides goods and services within normal business operations • Provides similar goods and services to many purchasers • Normally operates in a competitive environment • Provides goods or services that are ancillary to the federal program • Not subject to compliance requirements of the federal program Distinguishing Between Subrecipient and Contractor
  34. 34. #cbizmhmwebinar 34 Subrecipient Monitoring (200.330-332) – Pre-Award Assessment Requirements Subrecipients Prior Award Experience Subrecipients Prior Audit Experience Subrecipients Staffing and Systems Extent of Entity Monitoring (Fed or Pass-thru)
  35. 35. #cbizmhmwebinar 35 Subrecipient Monitoring (200.330-332) – Post-Award Mandatory Monitoring Steps Review Financial Performance Reports Presumably using data gathered during the pre-award stage Verify Single Audit Compliance Regardless of how they are disclosed Ensure Corrective Action on Deficiencies Issue Management Decisions on Findings Consider if enforcement actions are necessary Consider if adjustment to pass-through entity records is necessary
  37. 37. #cbizmhmwebinar 37 Subrecipient Monitoring • New administrative burden has been created with the new rules and requirements applicable to subrecipient monitoring by pass-through entities • The cumulative impact of these changes means that many institutions will need to add staff/FTEs to comply with the new requirements specified in § 200.331(d)
  38. 38. #cbizmhmwebinar 38 Subrecipient Monitoring • Review population of subrecipients • Assess your current processes and procedures • Do you have an existing process? • Standardized risk assessment template • Review of subrecipients audit report • Standardized award templates • Review invoice review and approval process • Payment required within 30 days of receipt • Work with other organizations
  39. 39. #cbizmhmwebinar 39 SUBPART E – COST PRINCIPLES
  40. 40. #cbizmhmwebinar 40 Compensation – Personal Services (200.430) Purpose: to reduce the administrative burden of documenting time and effort • More principles based – removed A-21 examples • Less prescriptive on documentation and places more emphasis on internal controls
  41. 41. #cbizmhmwebinar 41 Compensation – Personal Services (200.430) Based on records that accurately reflect the work performed Supported by system of internal control Four Standards for documentation of personnel expenses Be incorporated into official records Reasonably reflect total activity for which employee is compensated
  43. 43. #cbizmhmwebinar 43 Time and Effort Reporting • New guidance present an opportunity to make a change, if necessary • Regulations shift focus to internal controls • Costing allocations • Payroll accounting adjustments • Timely review of labor costs • Options to consider • Project certification of effort • Quarterly certification of all costs
  44. 44. #cbizmhmwebinar 44 SUBPART F – AUDIT REQUIREMENTS
  45. 45. #cbizmhmwebinar 45 Changes to Subpart F – Audit Requirements Final Changes to Single Audits – Effective for December 31, 2015 Year-Ends and later Impact Single audit threshold to increase from $500,000 to $750,000 Allows for relief for entities doing modest business from federally derived funds Type A/B program minimum threshold increase from $300,000 to $750,000 May reduce the number of programs considered major in an audit and therefore fewer programs audited Major program determination focus on areas with internal control deficiencies that have been identified as material weaknesses Entities with strong internal controls and few audit findings could have fewer high-risk Type A programs and fewer programs audited
  46. 46. #cbizmhmwebinar 46 Changes to Subpart F – Audit Requirements Final Changes to Single Audits – Effective for December 31, 2015 Year-Ends and later Impact Percentage of audit coverage decrease from 25% to 20% for low-risk auditee and 50% to 40% for high-risk auditee Could reduce the number of programs considered major in an audit Changes to SEFA and notes to SEFA Additional reporting requirements to be in compliance with new rules Threshold for reporting questioned costs to increase from $10,000 to $25,000 Could reduce the number of reported findings but more detail would be required for reported findings Other changes to reporting Will change auditors’ reports and schedule of findings and questioned costs
  47. 47. #cbizmhmwebinar 47 WHAT TO DO NOW
  48. 48. #cbizmhmwebinar 48 What To Do Now Take a step back from what you have done or not done Assessment of changes to significant processes and internal controls Make or refine changes as necessary Ongoing monitoring of compliance
  49. 49. #cbizmhmwebinar 49 HELPFUL RESOURCES
  50. 50. #cbizmhmwebinar 50 Links to Helpful Documents • COSO 2013 Internal Control – Integrated Framework • • OMB Documents • • Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards - 2 CFR 200 • idx?SID=d6d9a62155484b2fb6176d7d01a640cc&node=2:1.
  51. 51. #cbizmhmwebinar 51 Links to Helpful Documents • Uniform Guidance Cost Principles Text Comparisons • dreg/2013/uniform-guidance-cost-principles- requirements-text-comparison.pdf • Uniform Guidance Audit Requirements Text Comparisons • dreg/2013/uniform-guidance-audit-requirements-text- comparison.pdf
  52. 52. #cbizmhmwebinar 52 Links to Helpful Documents • Uniform Guidance Administrative Requirements Text Comparisons • /2013/uniform_guidance_administrative_requirements_tex t_comparison.pdf • COFAR’s FAQ for New Uniform Guidance on 2 CFR 200 • Frequently-Asked-Questions.pdf • Subaward Agreement Forms •
  53. 53. #cbizmhmwebinar 53 ? QUESTIONS
  54. 54. #cbizmhmwebinar 54 If You Enjoyed This Webinar… Upcoming Courses: • 5/11 & 6/1: Unclaimed, Unidentified but Undeniable - A Primer on Managing your Abandoned Property • 8/10 & 9/15: Win the Not-for-Profit Talent War - Recruitment, Retention, Rewards and Regulation • 12/7 & 12/15: Put Your Best Face Forward - How to Manage and Learn From Your Not-for-Profit's Publicly Facing Data Recent Publications: • Technical Agenda Update: FASB Items of Note for Not-for-Profits • Three Targets of UBIT Scrutiny • What's In a Name: How Nonprofits Can Protect Their Reputation
  55. 55. #cbizmhmwebinar 55 Connect with Us mayer-hoffman-mccann-p.c. @mhm_pc mayerhoffmanmccann cbiz-mhm-llc @cbizmhm BizTipsVideos MHM CBIZ
  56. 56. #cbizmhmwebinar 56 THANK YOU CBIZ & Mayer Hoffman McCann P.C.