OMB Uniform Guidance: New and Updated Frequently Asked Questions
Anne Sullivan, Jim Carter, Marisa Zuskar
COFAR has issued a second, updated set of frequently asked questions, which address the new Uniform Guidance. The revised set of questions covers a number of new areas and incorporates both reprinted and revised responses from the first set of FAQs.
Of the wide number of topics covered in the new set of FAQs, highlights include:
- Clarified timing for implementation of the Uniform Guidance (Section 200.110) – The new set of FAQs addresses timing considerations such as when the Uniform Guidance may be incorporated into an institution’s F&A rates, when updated DS-2s will be accepted, and when Uniform Guidance will apply to new awards, continuations, and subawards.
- The Uniform Guidance will apply to new awards made on or after December 26, 2014*.
- DS-2 revisions can be submitted for fiscal years beginning on or after December 26, 2014.
- F&A proposals based on the Uniform Guidance can be submitted when due for fiscal years that begin on or after December 26, 2014.
- Additionally, a grace period for the implementation of procurement practices of one full year will be allowed for the fiscal year beginning after December 26, 2014
*If a Federal awarding agency considers its incremental funding actions to be opportunities to change terms and conditions on previously made awards, the Uniform Guidance will apply to that Federal awarding agency’s incremental funding actions also.
- Added guidance on fixed amount awards and subawards (Sections 200.201, 200.332, 200.400 and 200.401) – These sections address a number of questions such as the application of cost principles, budget standards for establishing fixed amount awards, end of award certifications, and the treatment of residuals on fixed amount awards.
Fixed price awards are not subject to a higher budget standard than other federal award mechanisms. Fixed price award amounts can be based on methods that establish a reasonable degree of certainty, e.g., past experience with similar types of work or estimates from bids, quotes, and catalog pricing. As long as budgets are determined in accordance with Uniform Guidance, cost principles are not formally used for compliance during the life of the award (e.g., they may be billed on milestones, may have ending residuals, etc).
- Expanded guidance on simplified acquisition procedures (Section 200.320) – The requirements for justifying procurement decisions at defined cost thresholds are outlined, as well as the application of these procedures to bulk purchases, payment types, and indirect expenditures.
A minimum of two price quotations are required for purchases at or above $3,000 (but under $150,000). However, exceptions may be made for sole sourcing.
- Responses on prior approval requirements for currently active awards charging clerical and administrative salaries (Section 200.413) – Some level of guidance is provided to institutions with active awards currently classified as major projects and accumulating charges for clerical and administrative salaries.
Institutions should evaluate the terms and conditions of active Federal awards and/or consult with the relevant awarding officials of active Federal awards to determine if and when pre-approval has been granted. Institutions may need to request prior written approval from the Federal awarding agency to continue charging those costs to new incremental funds.
- Guidance on F&A rate extensions (Section 200.414) – The FAQs clarify timing and eligibility for F&A rate extensions.
The one-time F&A rate extensions described in the Uniform Guidance may be requested once per rate negotiation cycle, and requests should be submitted at least 60 days prior to the due date of the next proposal. This means that subsequent one-time extensions (up to four years) are available if a renegotiation is completed between each extension request.
- (Lack of) Clarity on changes to time and effort systems (Section 200.430) – Many of the questions submitted to the OMB on the Uniform Guidance involved potential changes to current institutional time and effort systems, technologies and processes, and responses were included in the FAQs.
Changes to payroll certification processes can be implemented as institutions begin compliance with the new Uniform Guidance, and if a DS-2 update is necessary, the DS-2 should be updated to provide a high level summary of the processes that meet Federal requirements. Changes to current processes can be incremental or more significant, including the complete elimination of current institutional effort reporting systems, as long as the new processes (in place of effort reporting) meet the requirements of the Uniform Guidance.
- Technical corrections: COFAR indicates several areas where technical corrections will be made or will be further explored based on feedback to date. Of specific note:
- Fringe benefits and direct costs (200.431-1): OMB will issue a technical correction to clarify that fringe benefits costs may be supported by either the F&A rate or the fringe benefit rate.
- Depreciation and cost sharing (200.436-1): OMB will also issue a technical correction to clarify that depreciation on the institutional contribution of buildings and equipment is allowable, unless law or agreement prohibits recovery. \
- Internal controls (200.303-1): COFAR suggests that the usage of “should” was not intended to mean “must” with respect to internal controls complying with guidance in the “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).