On December 26, 2013, the Office of Management and Budget released the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards“, commonly known as the Uniform Guidance, or 2 CFR 200, or UG. The Uniform Guidance consolidates and makes consistent the administrative requirements, cost principles and audit requirements formerly included in eight separate circulars. For universities and other institutions of higher education, the Uniform Guidance replaces OMB Circulars A-21, A-110, and A-133.
Timeline for Implementation
The Uniform Guidance will become effective December 26, 2014, and will apply to all new awards. Depending on the issuing agency’s approach, ongoing awards that receive additional funding after that date may be subject to the new guidance or may continue under the original regulations. Ohio State’s first audit under the Uniform Guidance will be for FY 16 (i.e. costs incurred in July 1, 2015 – June 30, 2016).
Additional information about the Uniform Guidance is available from the Council on Financial Assistance Reform (COFAR). In addition to the guidance itself, the COFAR website includes background information, FAQs, webcasts and other supplemental materials.
The federal grant making agencies are required to publish their implementation plans by 12/26/14.
What Do Researchers and Their Staff Need To Know Now?
Pre-award/Proposal Preparation Information
Proposals submitted to federal sponsors for projects with start dates beginning on or after December 26, 2014 should follow the guidelines provided below.
Cost Sharing or Matching (Section 200.306 and Appendix I 2.C.)
The Uniform Guidance clarifies cost share requirements as follows:
- Funding announcements must state whether there is required cost sharing, matching, or cost participation without which an application would be ineligible
- If cost sharing is not required, the announcement must explicitly say so
- Voluntary committed cost sharing (institutional cost share proposed but not required) is not expected in federal research proposals and cannot be used as a factor during the merit review of applications or proposals, but may be considered if it is in accordance with Federal awarding agency regulations and specified in a notice of funding opportunity. Criteria for considering voluntary committed cost sharing and any other program policy factors that may be used to determine who may receive a Federal award must be explicitly described in the notice of funding opportunity.
Charging Administrative/Clerical and Programmatic Salary Costs (Sections 200.413 and 200.430)
The UG states administrative salaries are allowable and can be direct charges if all of the following requirements are met:
- Administrative and clerical salaries are integral to a project or activity, and
- Individuals involved can be specifically identified with the project or activity, and
- Such costs are explicitly included in the budget or have prior written approval of the federal awarding agency, and
- The costs are not also recovered as indirect costs
The ‘major project’ requirement in A-21 is eliminated, but the allowable, allocable and reasonable standards still apply. Administrative salaries may be considered integral to a project when the level of service needed is identifiably above and beyond that which is provided on a routine basis by the department.
Direct Charging Computing Devices (Section 200.453)
Computing devices are allowable as a direct cost if the devices are essential and allocable, but not solely dedicated, to the performance of a federal award:
- Computing device must be necessary and reasonable for the performance of the work, but it need no longer be used exclusively for the project
- The device must be charged to the project in some manner that reasonably relates to its use on the project
- PI/department should retain documentation as to how the purchase met these criteria
Participant Support Costs (Sections 200.75 and 200.456)
Participant support costs means 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.
- Participant support costs are allowed on projects with an educational component, if included in the proposal budget or with subsequent sponsor approval.
- Sponsor approval is also required to rebudget funds from participant support costs into another category
- Participant support costs are excluded from the F&A base
F&A Rates to be used (Section 200.414)
The Uniform Guidance clarifies that an entity’s negotiated F&A rates must be accepted by all Federal awarding agencies:
- A Federal awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification
- Notices of funding opportunities must include the policies relating to indirect cost rate reimbursement
- Pass-thru entities must honor subrecipients’ approved F&A rates. If subrecipient doesn’t have a federally negotiated rate, a 10% MTDC de minimus rate can be used.
Post-award/Award Management Information
Prior Approvals (Section 200.407)
Section 200.407 collects all of the references to prior approval. Agencies may choose to implement or waive some, or all, of these, as the Uniform Guidance sets out a broad framework within which federal agencies must operate. In general, agencies differ in their implementation of the Uniform Guidance: consult individual agency guidelines to find out about a particular agency. Most generally important are the need for sponsor approval (if not included in the approved proposal) to:
- Issue an unbudgeted subaward (Section 200.201)
- Use unrecovered indirect costs, including indirect costs on cost sharing or matching as part of cost sharing or matching only with the prior approval of the Federal awarding agency. (Section200.306)
- Use Program Income (Section 200.307)
- Revise budget and program plans, including changes in key personnel or their level of effort (by more than 25%); disengagement of the PI (the new term for absence of PI, to acknowledge that a PI can be absent from campus but still engaged in the project) (200.308)
- Transfer of funds budgeted for participant support costs to other categories of expense. (Section 200.456)
- Incur unbudgeted participant support costs (Section 200.456)
- Pay of supplemental compensation (Section 200.430 (h)(ii))
- Purchase capital equipment (cost >$5,000) (Section 200.439)
The Uniform Guidance includes a number of changes pertaining to subawards with other entities. As a result, a pass-through entity:
- Must make and document a case-by-case determination as to whether the funding recipient should be a subrecipient or a contractor (formerly known as vendor). OSP staff can help with these determinations (Section 200.330)
- Must use an approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal government or, if no such rate exists, either a rate negotiated between the pass-through entity and the subrecipient (in compliance with this part), or a de minimus indirect cost rate of 10% MTDC (Section 200.331)
- Must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include reviewing financial and programmatic reports required by the pass-through entity(Section 200.331)
- Must pay subrecipient’s invoice within 30 calendar days after receipt of the billing, unless the pass through entity reasonably believes the request to be improper (Section 200.305).
- Subaward agreements will be modified to incorporate these changes
Project Closeout and The 90 Day Requirement (Section 200.343)
This is not a new requirement. NSF has always had a strict 90 day close-out policy, but other agencies have been more lenient. However, with the implementation of the Uniform Guidance the requirement will be more stringently enforced. Specifics include:
- The non-Federal entity must submit, no later than 90 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by or the terms and conditions of the Federal award. The Federal awarding agency or pass-through entity may approve extensions when requested by the non-Federal entity (this would be an award end date extension, or no-cost extension, not an extension of the 90 day reporting requirement).
- A non-Federal entity must liquidate all obligations incurred under the Federal award not later than 90 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
- PIs, department and OSP staff will have to work together to that all project costs are recorded in time to be billed during the 90 day close-out period.
Procurement (Sections 200.318 – 326)
Some of the most significant changes resulting from the Uniform Guidance are related to procurement. Top of the list is the requirement that, for all purchases above the ‘micropurchase threshold’ ($3,000), price or rate quotations must be obtained from ‘an adequate number of qualified sources.’ However, no cost analysis is required. Because of the changes required to meet this new requirement, OMB is delaying its implementation until July 1, 2017.