Uniform Guidance For Federal Assistance

In Washington DC, the Office of Management and Budget has put all relevant parties on notice:  federal agencies, recipients, sub-recipients, and auditors. Agencies will have to become more accountable, auditors will have to perform better audits, and non-federal entities will have to have more effective systems in place to address weakness. Or else! (Yes, there can be very costly consequences for failure to comply, including forfeiture of funds.)

Uniform Guidance found at 2 CFR Part 200 has significantly altered the grant-funding landscape and the shift is impacting Public Assistance in some very interesting ways. As with any new guidance, 2 CFR Part 200 comes with both opportunity and pitfall. With the right understanding and approach, an applicant stands to gain considerably under Uniform Guidance. Without it, and without the proper tools and techniques, an applicant could literally be left out in the rain.

Uniform Guidance has put into place a sleeker fundamental framework within which to operate — it provides real advantages for seekers of funding, so long as they remain informed and compliant. The OMB has scaled back procedural requirement and opened up instead to a broader focus on ‘records that accurately reflect work performed’ (based on strong internal controls).

Having strong internal control will be a specific requirement for non-federal entities moving forward in the world of Grants and Agreements (Title 2 CFR), and federal awarding agencies will now be required to have in place frameworks for review of risk associated with a particular applicant, prior to making an award. What will be assessed is whether the applicant has strong internal control and broad flexibility.

Another very significant aspect of the new guidance deals with administrative cost reimbursement (DAC). The specific language is found at 2 CFR Part 200.431 (referred to as Time and Effort reporting).

As allowed by Section 428 of the Stafford Act, a pilot program has been initiated within Public Assistance which gives an applicant the option to receive administrative cost reimbursement as a fixed percentage of total project cost rather than the actual totals. The amount is fixed at 4% with the incentive of an additional percentage-point if the project closes out in a timely manner (a relative slam-dunk for those who are savvy).

The new procedures for funding administrative costs do not relieve an applicant of the requirement to document actual costs, but it does allow greater reporting flexibility and permits an applicant to keep funding overages for use in other eligible areas, such as retaining a professional consultant to help maintain a strong system of internal control (which, again, is a specific requirement of Uniform Guidance).

If you are seeking assistance, please contact DI Recovery for help.