On September 10, 2015, the Office of Management and Budget (OMB) issued a federal register notice updating guidance on the procurement implementation grace period and making other technical corrections to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, referred to as the uniform guidance (2 CFR 200.110). Additionally, the Council on Financial Assistance Reform (COFAR) released an update to its frequently asked questions document, which includes answers to new questions as well as revisions to certain questions and answers included in previous versions of the FAQ.
One of the more significant revisions noted in the updated uniform guidance and FAQ is related to the grace period for implementing changes to policies and procedures to comply with the new procurement requirements in the uniform guidance. The updates to both the uniform guidance and FAQ now provide for a two-year grace period beyond the effective date of the uniform guidance before nonfederal entities are required to comply with the new procurement guidance. The previous guidance provided a one-year grace period. During this grace period, your organization must document whether it decided to comply with the previous version of the applicable procurement standards or the new standards contained in the uniform guidance.
The revised FAQ also includes new or revised guidance on the following matters:
- Cognizant agency for indirect cost
- Determination of modified total direct cost (MTDC) for subaward(s)
- Eligibility of institutions of higher education (IHE) for funding opportunities which are limited to nonprofit organizations
- Conflict of interest—scientific collaborations
- Application of 200.305(b) advance payments to payments by states
- Methods of procurement—sole source for research
- Negotiation of profit
- Requirement for compliance with applicable laws and regulations
- Extensions of final rates
- Federally negotiated indirect cost rates—voluntary under-charging or waiving indirect cost (IDC)
- De minimis rate and breaks in federal relationship
- De minimis rate and period of applicability
- De minimis rate and non-federal entity with single function
- Audits not required in accordance with single audit
- Financial statement audit
- Performance audits
- Financial statement audits by entities exempted from single audit and subpart F
- Internal audit functions
- Fringe benefits and indirect costs
- Charging payments of unused leave to employees terminating or retiring
- Interest costs for computer software development
- Basis for determining federal awards expended
- Audited financial statements not required by single audits
- Government wide audit quality project
- Compliance with GAAP
- Utility costs adjustment determination
- Salaries above the HHS/NIH statutory limitation—inclusion in MTDC base
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The provisions of the uniform guidance are already effective for new federal awards and certain incremental funding received on or after December 26, 2014. For more information, or to understand how these updates might affect your business, contact your Moss Adams professional.