SPONSORED RESEARCH 1
Jan 03, 2016
SPONSORED RESEARCH
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Agenda
Federal Regulations – Uniform Guidance
National Science Foundation (NSF) Audit Update
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Federal Regulations:Uniform Guidance
Official Name is the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
It is the Office of Management and Budget’s (OMB) consolidation of their circulars for costing, administration and audit of Federal awardsIt replaces 8 circulars and applies to
universities, state and local governments, nonprofits, native tribes
It was issued on December 26, 2013It was effective on December 26, 2014
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Overriding Goal of Guidance
Implement the President’s directives to:streamline guidance for Federal awards
to ease administrative burden, andstrengthen oversight to reduce risks of
waste, fraud, and abuse
Council on Financial Assistance Reform (COFAR) - https://cfo.gov/cofar/
Council on Governmental Relations (COGR) –http://cogr.edu/
What is the Impact?
Biggest change in Federal regulations for sponsored research in 50 years
Some good news, some new administrative burdens
The Federal Agencies implementation of the UG was released December 17, 2014
UG is still being interpreted and clarified5
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Known Effective Dates Uniform Guidance will apply to:
All new and renewal awards issued on or after 12/26/14 (even if submitted under the old rules)
Single (A-133) Audit for FSU’s FY16 (July 2015 – June 2016)
Old Rules (A-21, A-110, A-133) will apply to: All active awards that do not get incremental
funding or another award action (until they expire)
Uniform Guidance may apply to: All non-competing awards
(agencies may decide on a case-by-case basis)
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2 CFR 200 – Basic Layout
6 Subparts A through F Subpart A, 200.XX –Acronyms &
Definitions Subpart B, 200.1XX –General Subpart C, 200.2XX –Pre Award - Federal Subpart D, 200.3XX –Post Award –
Recipients Subpart E, 200.4XX –Cost Principles Subpart F, 200.5XX –Audit 11 Appendices -I through XI
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Acronyms & Definitions §200.XX
200.0, Acronyms200.1 through 200-99, Definitions
99 separate sections and indexesApplicable to all requirements
(administrative, cost and audit) and all types of grantees
Use of “should” and “must”Should = best practices/recommended Must = required
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General §200. 1XX
200.112, Conflict of interest – NEWFederal agencies must establish COI
policiesNSF and NIH already meet the new
standard; no changes anticipatedEPA’s COI is problematic for IHEsGrantees must disclose in writing any
potential COI
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Post Award Grantees§200.3XX
200.301, Performance Management –Use standard forms (e.g., RPPR for research
awards)Must relate financial data to performanceFeds are to provide clear performance goals,
indicators and milestones 200.303, Internal Controls
Should follow GAO’s Green Book and COSO standards
200.309, Period of performanceNo-cost extension may be allowed –agency’s
option
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Post Award Grantees§200.3XX
200.313, EquipmentProperty standards (States versus other
grantees) 200.314, Supplies Computing devices (<$5K) are included as
“supplies”-NEW 200.320, Procurement Standards – NEW for
universities and Non ProfitsModeled after A-102: State uses own policiesOthers uses procurement standards in sections
200.317 -326
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Post Award Grantees§200.3XX
200.331, Requirements for pass-through entities (PTE) – NEW
Includes audit responsibilities (formerly in A-133)Pass-through entities responsibilities:
Provide subaward informationProvide indirect cost ratePerform risk assessment for subrecipent
monitoringVerify compliance to audit requirementsReport in accordance to FFATA
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Procurement – General Standards
A. Documented PoliciesB. NecessaryC. Full & Open CompetitionD. Conflict of InterestE. Documentation
i. Cost & Price Analysis ii. Vendor Selection
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Procurement§200.320
1. Micro Purchases◦ up to $3K; no quotations; equitable distribution
2. Small Purchases◦ Up to $150K; rate quotations; no cost/price analysis
3. Sealed Bids◦ $150K; construction projects; price is a major factor
4. Competitive Proposals◦ > $150K; fixed price or cost reimbursement◦ RFP with evaluation methods
5. Sole Source◦ Unique; public emergency; no competition◦ authorized by agency or Pass through entity (PTE)
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Overview of Cost Principles§200.4XX
For any cost to be allowable under a federal award, it must:Be necessary and reasonable for the
performance of the award and allocable thereto;
Conform to any limitations or exclusions set forth in applicable regulations or in the award itself;
Be consistent with policies and procedures that apply uniformly to both federally-financed and other FSU activities; and
Be accorded consistent treatment.
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Prior Approvals New emphasis on agency prior approvals
can slow down research activitiesNot clear that Federal agencies have
adequate staffing to respond quickly Examples where prior approval is
required:Unrecovered F&A as cost sharingFixed price subawardsCharging administrative salariesParticipant support costs on research
awardsUnusual cost items
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Cost Principles§200.4XX
200.414, Indirect (F&A) CostsMust accept approved negotiated rates, except
Allowed by Federal statute or regulationApproved by agency head or delegate and
OMB notified of deviations10% de minimis IDC rate (MTDC)
First timers and new grantees onlyCan be used indefinitely
One time four-year extension of current approved rate (final and pre-determined rates only)
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Cost Principles§200.4XX
200.430, Compensation –personal services – NEWRemoved A-21 examplesInternal controls are KEY
200.430(i) –9 standards for documenting personnel
E.g., supported by system of IC, budget estimates may be used
Substitute systems are allowed (430 (i) (5))Blended and braided funds allowed, with Fed
approval (430 (i) (7))Use of institutional base salary for Institutions
of Higher Education (IHEs)
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Cost Principles§200.4XX
200.431, Compensation – Fringe Benefits
200.432, Conferences◦Costs are appropriate, necessary and
minimized to the Federal award
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Cost Principles§200.4XX
200.449, InterestSection (b)(2), allows financing costs
associated with patents and computer software effective January 1, 2016
200.453, Materials and SuppliesSection (c) –may be charged as
direct costsInclude computing devices (defined
in 200.20)
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Administrative/Clerical Salaries §200.413/430
The salaries of administrative & clerical staff should normally be treated as indirect costs.
Direct charging of these costs may be appropriate only if all of the following conditions are met: Administrative/clerical services are integral* to a project; Individuals involved can be specifically identified with
the project or activity; and Such costs are explicitly included in the budget or have
the prior written approval of the federal awarding agency
*Integral is defined as essential to the project’s goals and objectives, rather than necessary for the overall operation of the institution.
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Impact on Budget
If all requirements are met, include justification statement in proposals to facilitate the required agency approval
If not included in the proposal budget, agency approval will be required at the post-award stage
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Computing Devices §200.453
Computing devices costing less than $5,000 that are essential and allocable may be direct charged
They may be charged 100% to an award (in rare circumstances), may be allocated to several awards or split between sponsored/non-sponsored funds
While no prior agency approval is required, computing devices should be itemized in the proposal budget
In addition, the project must not have reasonable access to other devices or equipment that can achieve the same purpose
Devices may not be purchased for reasons of convenience or preference
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Impact on BudgetProposal Stage: Include the request for computing devices in the
proposal budget and justification. The detailed justification should include an
explanation of why and how the device is essential for and beneficial to the performance of the project, and that no existing resources are reasonably available.
Award Stage: If the need for a computing device was not known
and included in the proposal budget, then SRA approval must be obtained.
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Participant Support Costs §200.75 / 200.456
Participant support costs are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects.
These costs must now be accepted by agencies as allowable costs, but still require prior agency approval.
These costs are excluded when calculating the Modified Total Direct Costs (MTDC) to determine the overall project’s F&A costs.
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Impact on Budget
Proposal Stage: Include the request in the budget and justification Exclude the costs from the MTDC baseAward Stage: If the request for participant support was included
in the proposal, then a subproject will be set up to separate these funds from the other project funds.
If there is a need to rebudget and move any of the participant support funds out of the category into another budget category, then prior approval from the sponsor must be received
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Subawards §200.330-332
More prescriptive requirementsPerform a risk assessment of the subrecipientAdd a lengthy list of elements to the subaward
termsEstablish a monitoring plan for the subrecipient
Financial review (SRA responsibility)Programmatic review (PI responsibility)Maintain documentation of monitoring efforts!
Must use subrecipient’s negotiated F&A rate or provide a 10% “de minimis” rate
Possibility of delays in issuing subawards
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Latest Developments
SRA working through the agency implementation of UG
NSF Guidelines
NIH Interim Grant Conditions
COGR recommendations to COFAR
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NSF Proposal and Award Policies and Procedures Guide (PAPPG)
Section B, Forward, contains the implementation statement for 2 CFR § 200, Uniform Guidance
If the AAG is silent on a specific area covered by 2 CFR § 200, the requirements specified in 2 CFR § 200 must be followed
NSF 2 month rule for Senior Personnel
http://www.nsf.gov/pubs/policydocs/pappguide/nsf15001/sigchanges.jsp
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NSF PAPPGAdministrative and Clerical Salaries: May be direct charged if the following conditions are met:
(1) Administrative or clerical services are integral to a project;(2) Individuals involved can be specifically identified with the
project;(3) Such costs are explicitly included in the approved budget or have the prior written approval of the cognizant NSF Grants Officer; and(4) The costs are not also recovered as indirect costs.
Computing Devices: Computing devices are considered supply items and may be
included as direct costs for devices that are essential and allocable, but not solely dedicated, to the performance of the NSF award.
Subawards: Inclusion of a subaward or contract in the proposal budget or submission of
a request after issuance of an NSF award to add a subaward or contract will document the organizational determination required.
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NIH Interim General Grant Conditions
Terms & Conditions for grant awards until new RTCs are available
Effective for NoAs issued on or after 12/26/14 that obligate new or supplemental funds
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Cost Related Prior Approvals
NIH prior approval is not required for areas below unless there is a change in the scope of work: Incur pre-award cost Initiate a one-time no-cost extension Carryforward Unobligated balances Rebudget among budget categories Rebudget between direct and F&A costs Provide subawards based on fixed amounts Direct charge the salaries of administrative
and clerical staff if conditions in 45 CFR § 75.413 are met
COFAR FAQsResolved Some IssuesProcurement rules to be delayed 1 year COI rules determined to be conflicts in
procurement only Program income rule about including
royalties in the definition of what has to be tracked conflicts federal law –Bayh Dole Act
Profit definition clarified to exclude legitimate unexpended balances under fixed price awards/subawards
DS-2 statements submitted after 12/26/14 to true-up charging practices to new rules
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NSF Audit Update
Phase One conducted in September 2014◦Transaction selection included travel,
equipment, cost transfers, other chargesOnsite fieldwork conducted 9/22 –
10/1/14; internal control interviews with management
Follow up questions in November 2014; more data provided
Phase Two conducted in March 2015◦Transaction selection focused primarily on
computers and foreign travel34
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NSF Audit Update
Phase Three – Current request received last week
More follow up questions from previous data provided
NSF senior personnel data request involving 277 employees
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NSF Audit: Questions Asked by Auditors
General◦ Explain why this purchase was necessary for
and how it benefited the awardLate purchases
◦ How did this transaction benefit the award given the limited time remaining on the award?
◦ Explain why the purchase was necessary.Cost Transfers
◦ Provide an explanation of the award/fund this transaction was transferred to or from. Include the identity of the award and whether it was another federal award.
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NSF Audit: Questions Asked by Auditors
Cost Transfers (cont’d)◦Provide the reason for the transfer
and why it was necessary.◦Provide the reason for why the
transfer was necessary so late in the award (if applicable).
◦What was the budget amount and the remaining balance at the time of the transfer?
◦Was there a cost overrun on the award transferred to or from?
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NSF Audit: Questions Asked by Auditors
Travel◦ Explain why this travel was not included in
the NSF proposal budget, if applicable.◦ How did this travel benefit the award given
the limited time remaining on the award?◦ Why was this travel necessary for the
award?◦ If allocated, provide the allocation
methodology and a list of the other projects in the allocation
◦ If applicable, why was this trip taken when it was specifically removed from the original budget?
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NSF Audit: Questions Asked by Auditors
Equipment◦Explain why this equipment was not
included in the NSF proposal budget, if applicable.
◦How did this equipment purchase benefit the award given the limited time remaining on the award?
◦Was this equipment used exclusively on this NSF award?
◦If allocated, provide the allocation methodology and a list of the other projects in the allocation.
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NSF Audit: Questions Asked by Auditors
Equipment (cont’d)◦If applicable, why was this purchase
required when you indicated that you had all the necessary equipment and/or facilities?
◦If applicable, why was the equipment purchased when it was specifically removed from the original budget?
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NSF Audit: Potential IssuesEquipment purchased late in the
award; not adequately justified or allocated.
Computers, computers, computers!◦Not included in budget and lacking
robust justification for purchase◦Not allocated