The document summarizes key aspects of OMB's Uniform Guidance, also known as the "Super Circular", which consolidated and streamlined federal grant policies into a single set of rules. It discusses major reforms including standardized pre-award reviews, procurement standards, indirect cost recognition policies, and more robust requirements for subrecipient management and monitoring. It provides advice on ensuring subrecipient relationships meet the definition, assessing subrecipient risk, requirements for subaward agreements, cost principles, documentation, reporting, monitoring, auditing, and closeout procedures. Recipients are advised to review policies against the Uniform Guidance and communicate changes throughout their organizations.

1. Understanding OMB’s “Super
Circular”—Key Takeaways for RDO’s
NADO Annual Training Conference
October 18, 2016
Presented by Bob Lloyd
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2. OMB’s Grant Reform Initiative
• Three years in the making
• Initial “trial balloons” (2/28/12)
• Proposed consolidated policies (2/1/13)
• Final product—2 CFR 200 (12/26/13)
--- The “Super Circular”
--- The “Omni-Circular”
--- The “Uniform Guidance
• Uniform federal agency implementation
(12/26/14)
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3. How Does It Find Its Way to You?
• Uniform federal agency adoption
--- Citations (2 CFR 200 plus specific federal
agency supplemental regulations)
• Inclusion in new awards issued after 12/26/14
• Inclusion in old awards modified after
12/26/14
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4. The “Big Ticket” Reforms
• Standardized federal pre-award reviews (2 CFR 200.205)
and pass-through entity due diligence (2 CFR 200.331(e))
• FAPIIS (2 CFR 200.213 and Appendix II)
• Revised standards for procurement of goods and services (2
CFR 200.317-326)
• Reinforced policies for recognition of indirect costs (2 CFR
200.331(a)(4) and 2 CFR 200.414)
• Revised cost principles (2 CFR 200.400-475)
• “Quasi-uniform” time and effort reporting requirements (2
CFR 200.430(i))
• “Robust” policies for subrecipient management and
monitoring (2 CFR 200.330-332)
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5. Some Good General Advice
• There is not effective substitute for doing your
homework
• Assess your policies and procedures against
the Uniform Guidance and document that you
did so
• Appropriately alert your people from top to
bottom of the organization
• Use examples of non-compliance as incentives
to “get with the program.”
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6. OMB Grant Reform and Subawards
• Federal recognition of the prevalence of
subawards
--- Congressional program designs with heavy
reliance of substate regional organizations
• Consolidation of all policy related to “lower tier “
relationships in the administrative portion of the
“Super Circular” (2 CFR 200, Subpart D)
• Some “protection” for subrecipients; some
“exposure”
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7. Make Sure You’re Really a Subrecipient
• Revised policy on determination of “lower tier” relationships (2 CFR
200.330)
--- Previously Section 210 of OMB Circular A-133
• Pass-through entity “case-by-case” determination
--- Concepts of assistance vs. procurement from federal law
--- Indicative characteristics
----- Not all characteristics must be present
----- No “silver bullet”
• Issues
--- Name of the award
--- Type of subrecipient organization
--- Type of award “costing”
--- Type of oversight
----- Audit
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8. Be Ready for Risk Assessment
• Criteria (2 CFR 200.331(c))
--- Prior performance
--- Audit history
--- Management personnel and systems
--- Extent of federal (and other) monitoring
• Timing
• Possible “high risk” designation and imposition of
special conditions (2 CFR 200.207)
--- Due process required
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9. The Subaward Agreement
• Identification as a “subaward”
• Data elements (2 CFR 200.331(a)(1)(i-xiii)
--- Especially…the CFDA number
• “Flow-through”
• Required record retention and access
• Close-out procedures
• Additional or inconsistent requirements imposed by
pass-through entity
--- “Can they do that to us?”
• Contract clauses (2 CFR 200, Appendix II) do not apply
to subawards
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10. Indirect Cost Recognition
• 2 CFR 200.331(a)(4) and 2 CFR 200.414
• Acceptance of federally negotiated rates
• Rate negotiated with pass-through entity
--- Applicability
• Acceptance of subrecipient election of de
minimis rate
• Audit of rates (per Part 3B of the OMB
Compliance Supplement)
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11. Fixed Amount Subawards
• 2 CFR 200.332
• Must be authorized by federal awarding agency
• Limited to $150,000 or less
• Required elements ( 2 CFR 200.201)
--- Award amount based on proposed budget identifying
allowable costs
--- Not authorized if matching/cost sharing is required
--- Payment features retain leverage
--- Certification by subrecipient concerning effort or
performance
--- Periodic reports authorized
--- Changes in key personnel require prior approval
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12. Payment
• Misunderstanding of the term “cost reimbursement”
• Longstanding federal policy re: states—OMB A-102 Common Rule, Section
___.37)
• 2 CFR 200.305
• Required advance
• Conditions for advance
--- Drawdown of immediate cash needs
--- Drawdown as close as possible to time of disbursement
--- Minimize time elapsing between drawdown and disbursement
• Conditions for working capital advance
--- One time advance; subsequent reimbursement
• Conditions for reimbursement
--- Construction
--- Punitive
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13. Cost Allowability
• Subpart E, 2 CFR 200
• General tests of allowability
• The tests of reasonableness
• Issue
--- Imposition of policies of the pass-through
entity
----- Prior approvals
----- Advance understandings
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14. Documentation
• Source documentation (2 CFR 200.302)
• Records access and retention (2 CFR 200.333-
337)
• Issue
--- Required submission of documentary back-up
----- Duplicate recordkeeping
----- Locus of audit
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15. Reporting
• Prime recipient reporting
--- Applicability of Paperwork Reduction Act and its
regulations (5 CFR 1320)
• Lost in the changes (OMB Circular A-102, Section 41)
• Beware of 2 CFR 200.331(a)(3)!
• Issues
--- More frequent
--- More detailed
--- Submission timing
• Arguments against more frequent and detailed reporting
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16. Pass-through Entity Monitoring
• What to expect if they’re doing it correctly:
--- Review of financial and performance reports
--- Oversight of corrective action on deficiencies
--- Verification of audit compliance
--- Issuance of management decisions
--- Consideration of possible enforcement actions
--- Adjustment of records based on impact of
subrecipient oversight
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17. Pass-through Entity Monitoring
• What to expect if they choose:
--- Provision of training and technical assistance
--- Performance of on-site reviews (site visits)
--- Arrangement of agreed-upon procedures
audits
--- Other
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18. Close-out and Continuing
Accountability
• Close out of the prime award?
--- Subaward commitment = an expenditure for federal
financial reporting purposes
--- Handling of applicable credits
• Close-out procedures
--- Submission of final reports
--- Settlement of award claims and payment
--- Possible disposition of subaward acquired property
• Matters not affected by close-out
--- Records retention and access
--- Subaward acquired property retained
--- Federal agency and pass-through entity audit rights
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19. Audit
• Imposition of audit requirement
--- Subpart F, 2 CFR 200
• Agreed-upon procedures per 2 CFR 200.425
• Required audit of pass-through entity’s award
--- At their expense
• Audit cost, generally
• Submission of audit reporting package (2 CFR
200.512(b)—FAC only)
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20. Audit Resolution
• Who resolves which finding(s)?
• Management decisions
--- Substance
----- Disallowance and other financial adjustments
----- Procedural changes and other corrective
actions
--- Timing
• Corrective action
• Disagreements
--- Disputes and appeals
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21. Taking on Any Issues
• Option 1— Submit a careful written analysis
• Option 2– Use surrogate(s)
--- Federal awarding agency
--- Authoritative sources
• Option 3—Enlist similarly situated allies; Use
strength in numbers
• “Nothing personal, Sonny…only business.”
---Michael Corleone
The Godfather
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22. Some Additional Advice
• You need a system of “effective internal control
that provides reasonable assurance…”
• “Differential accountability” is possible
• You don’t need awarding agency approval to take
the right steps
• Look at what “they” are doing
--- www.usa.gov
--- www.ignet.gov
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