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Wayne State University

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School of Medicine

Uniform Guidance Changes: 2015

The following index menu can be used to navigate important changes to the Uniform Guidance (UG), as implemented on December 26, 2014.  For specific agency dictates on how UG will be implemented within their context, please refer to their own information (for example: NIH's implementation information can be found here; NSF's guide for implementation can be found here).

 

Restrictions on voluntary committed cost share Budget preparation and cost principles
Allocable costs Participant costs
Expenditures that now require agency pre-approval Direct costs: clerical and administrative
Conflict of interest Computing devices
Program income Fringe benefits (accumulated leave)
Making a change to my program plan or budget after award Publication costs
Subrecipients Recruiting costs
Including subrecipients in my proposal Travel costs
Contract terms and conditions Foreign activities
Risk assessment Modified Total Direct Cost (MTDC)
Monitoring Reporting Requirements
Closeouts Effort Reporting
Audits Record Retention

 

 

 

Restrictions on voluntary committed cost share

 

Takeaway: Only cost share when required by the solicitation.

 

Cost sharing or matching (§200.29) is the portion of project costs not paid by federal funds unless otherwise authorized by federal statute.  All cost sharing must be tracked and maintained in a separate account. Voluntary cost sharing  is specifically pledged on a voluntary basis in the proposal’s budget or the federal award on the part of the institution, which becomes a binding requirement of the federal award. [§200.99] Cost sharing or matching should only be solicited for research proposals when required by regulation and is transparent in the notice of funding opportunity.  Voluntary committed cost sharing is not expected under federal research proposals and is not to be used as a factor in the review of applications or proposals unless it is specifically stated as such in the announcement. Only mandatory cost sharing or cost sharing committed in the budget must be included in the research base for computing F&A cost rate. [§200.306]

 

Shared costs, matching funds, and contributions must meet certain criteria to be accepted as cost sharing.  In particular, salary costs above a federal awarding agency’s cap are not considered mandatory cost share or match.  [§200.306Additionally, prior approval must be granted to use unrecovered F&A as cost share match. For more information on cost sharing transparency in funding opportunities, go to Appendix I to Part 200 – Full Text of Notice of Funding Opportunity; E. Application Review Information, 1. Criteria – Required.

 

 

WSU Impact:

  • WSU’s cost sharing policy is consistent with these requirements.
  • Research proposals for federal grants must only include cost sharing when it is required by the solicitation.

 

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Allocable Costs

 

Takeaway: The definition of “allocable” is modified from “solely” to “specifically.”

 

Language in the guidance has changed from “incurred solely for the federal award” to “incurred specifically for the federal award”.  In other words, federal funds cannot be used to overcome deficiencies for reasons other than those specified at the time of the award.  If a cost benefits two or more projects, the cost should be allocated proportionately; costs for equipment purchased under an award are allocable regardless of the use of the equipment when it is no longer needed. [§200.405

 

WSU Impact:

  • Take special care to carefully analyze fair and appropriate direct cost allocation methodologies. 

 

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Expenditures that now require agency pre-approval

 

Takeaway: Prior approval now can save disallowance pain later.

 

It is suggested that an institution may want to seek prior written approval to avoid subsequent disallowance or dispute, based on unreasonableness or nonallocability.  Many items require pre-approval.  A full list is provided in the section link. [§200.407Changes in pre-approval have been made regarding the following items:

  • Revisions to the budget or program plan  
  • Overloads [§200.430]
  • Cost increases for fluctuations in exchange rates [§200.440]
  • Participant support costs [§200.456]

 

WSU Impact:

  • Any costs that you anticipate incurring during the performance of your research project should be included in your proposal budget and budget justification.
  • Post-award changes to costs requiring pre-approval must be requested in writing before the change is made.  Contact your GCO to open the lines of communication with your federal funding entity. 

 

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Conflict of Interest

 

Takeaway: Conflict of interest disclosures need to be agency-specific.

 

Federal agencies have specific policies on conflict of interest that are appropriately tailored to the specific nature of their programs.  Federal agencies are required to have policies on conflict of interest in federal awards, and non-federal entities must disclose in writing any potential conflicts of interest (in accordance with applicable policies) to the federal awarding agency or pass-through entity. [§200.112]  Tthis clause refers to conflicts related to how decisions are made for selecting subrecipients or procurement contracts. [COFAR FAQ .112-1]

 

WSU Impact:

  • SPA will likely issue policy once until individual federal agencies have solidified their implementation plans.  Be sure to watch their News & Announcements.

 

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Program Income

 

Takeaway: License fees and royalties covered by Bayh-Dole are exempt from a “program income” definition.

 

Policy Guide on Profit: Entities may not earn or keep profit resulting from federal financial assistance, unless expressly authorized by the terms and conditions of the federal award. [§200.400

 

Program Income: The Uniform Guidance does not include language limiting the treatment of licensing/royalty revenue as program income (A-110, .24(h)), which is inconsistent with Bayh-Dole Act.  In FAQ .307-1, COFAR clarified that “U.S. law or statute takes precedent over the Uniform Guidance.”  Therefore, income from license fees and royalties on research funded by a Federal award should be excluded from the definition of program income. [§200.307]  

 

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Making a change to my program plan or budget after award

 

Takeaway: Remember, any changes to your program plan or budget must be initiated by your GCO.  These include (but are not limited to):

 

Budget revisions [§200.308], such as –

  • Changes in the amount of approved cost-sharing.
  • Transfer of funds budgeted for participants support costs to other categories of expense.
  • Subawarding, transferring, or contracting that was not described in the application and funded in the approved award, except for supplies, materials, equipment, or general support services.

 

Disengagement from the project for more than three months or a 25% reduction in time devoted to the project by the approved project director or principal investigator requires prior approval.  Disengagement refers to the level of the PI’s involvement with project activities, not the PI’s actual presence on campus (see “COFAR, So Good” on our blog for more explanation).

 

Other modifications requiring pre-approval are the same.  Modifications that continue to require pre-approval (under the OMB Circulars and the Uniform Guidance) are: change in the scope or objective of the project, change in key personnel specified in the application, and the inclusion of costs that require prior approval. Prior written approval for certain costs can be waived by the agency. [200.308(d)]  

 

WSU Impact:

  • Any time there is a change to your award, you must initiate permission through your GCO only.

 

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Subrecipients > Including subrecipients in my proposal

 

Takeaway:  The term “vendor” has been eliminated and replaced with the term “contractor;”  payments to subrecipients must be made within 30 days from receipt of invoice. 

 

200.22, §200.92, §200.330: Subrecipient and Contractor Determinations]

 

Contractor: A contract is for the purpose of obtaining goods and services and creates a procurement relationship with the contractor.  The entire contract amount is subject to F&A. [§200.330]

 

Subaward: A subaward is for the purpose of carrying out a portion of the federal award and creates a federal assistance relationship with the subrecipient.  Subawards are subject to F&A up to the first $25,000 of the award for the entire period of performance (this is unchanged). [§200.330]

  • Subrecipients: De Minimis indirect cost rate (F&A) of 10% of MTDC should be applied to non-federal entities without a negotiated indirect cost rate (F&A). [§200.210, §200.331, and §200.510] (Don't forget: NIH only allows up to 8% to foreign entities.)
  • Fixed Amount Subawards: With prior approval, fixed amount subawards may be awarded up to the Simplified Acquisition Threshold ($150,000). [§200.332]

 

WSU Impact:

  • If you’re not sure, your GCO or someone in RAS can help you make the determination of whether a subrecipient is a subaward or a contractor. 

 

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Subrecipients > Contract terms and conditions

 

Takeaway:  Uniform Guidance is applicable to subrecipients.

 

Subrecipients receiving flow down from a federal award are subject to the Uniform Guidance.  [§200.101].

 

Breach/Termination: Contracts over the Simplified Acquisition Threshold ($150,000) must address contract breach.  Contracts in excess of $10,000 must address termination for cause.  [Appendix II to Part 200 – Contract Provisions for Non-Federal Entity Contracts under Federal Awards]. 

 

Federal cost-reimbursement contracts awarded under the FAR are subject to Subpart A, Subpart B, Subpart D (Post Federal Award Requirements and Subrecipient Monitoring and Management), Subpart E and Subpart F.

 

WSU Impact:

  • Contracts for subrecipients of federal awards administered by WSU will include specific terms and conditions applicable to the Uniform Guidance. 

 

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Subrecipients > Risk assessment

 

Takeaway: Pass-through entities must assess risk.

 

Entities receiving federal awards who then subaward to other entities must consider the risks associated with that subaward combined. [§200.331(b)]

 

WSU Impact:

 

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Subrecipients > Monitoring

 

Takeaway: Monitoring required by §200.331 remains mostly unchanged.

 

Oversight should be based on the consideration of risk (see above).  Monitoring should include the review of performance and financial reports required of the subawardee to meet the requirements of the federal award. When deficiencies are identified, the subrecipient should take timely and appropriate action to correct deficiencies pertaining to the federal award.  Unresolved deficiencies may result in the issuance of a management decision for audit findings. [§200.521

 

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Closeouts

 

Takeaway: Stronger closeout requirements and enforcement techniques will be applied.

 

All reports must be provided and all obligations incurred must be liquidated within 90 days.  This includes subrecipient invoices and cash payments. [§200.343]  Recipient institutions are required to certify that project was completed and/or level of effort was expended.  If not carried out fully, the award will be accordingly adjusted. [§200.201]

 

WSU Impact:

  • Failure to adhere to new closeout requirements will incur the inability to draw down funds beyond 90 calendar days after award end date, and the withholding future awards.

 

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Audits

 

Takeaway: There is an increase in the Single Audit Threshold and new remedies for noncompliance.

 

Subpart D - Subtitle VII “Remedies for Noncompliance” allows the termination of funds for cause. [§200.339]

 

The Single Audit Threshold is raised to $750,000 (from $500,000) in federal expenditures per year. This reduces the audit burden for approximately 5,000 non-Federal entities while maintaining Single Audit coverage over 99% of the Federal dollars currently covered. [§200.501

 

WSU Impact:

  • Additional risk assessment tools will likely be required for subrecipients under Single Audit Threshold.

 

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Budget preparation and cost principles > Participant costs

 

Takeaway: Participant support costs must be tracked in a separate account.

 

Participant support costs are direct costs 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. [§200.75]  Participant support costs should be excluded from the MTDC (see also MTDC).

 

WSU Impact:

  • SPA already requires projects to track participant support costs in a separate subaccount for NSF, and will likely require a similar mechanism for all projects with participant costs going forward. Stay tuned for their policy/procedure update, and be sure to contact SPA if your project has participant support costs.
  • Note: For NIH, participant costs are not applicable to Kirschstein-NRSA programs, and participant costs are only allowable when specifically identified in a funding opportunity announcement (FOA).

 

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Budget preparation and cost principles > Direct costs – clerical and administrative

 

Takeaway: Administrative costs may be charged as direct costs under certain conditions.

 

Administrative or clerical salaries and expenses are allowed as direct costs when the activities are integral to a project, can be specifically identified, are included in the budget or have prior approval, and are not also recovered as indirect costs. [§200.413, §200.430]  “Integral” is defined as essential to the accomplishment of the project’s goals and objectives, rather than necessary for the overall operation of the institution.   

 

WSU Impact:

  • In order to charge administrative and/or clerical costs to federally sponsored agreements, a determination must be made to designate the administering unit as either an "Organized Research Unit" or a specific project as a "Significant Project."  Stay tuned to SPA as there will likely be policy for these designations; be sure to contact them if you are unsure.  

 

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Budget preparation and cost principles > Computing devices

 

Takeaway: Computing devices are allowed as a supply, chargeable as a direct cost.

 

Computing devices may be charged as direct costs if they are essential and allocable, but not are not required to be solely dedicated, to the performance of a Federal award. [§200.453] To be considered a supply cost, the cost of the computing device may not be equal to or exceed $5,000.  [§200.20

 

WSU Impact:

  • Computing devices should be itemized in your proposal budget and their use in the project clearly justified in the budget justification.
  • 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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Budget preparation and cost principles > Fringe benefits (accumulated leave)

 

Takeaway: Payouts for accumulated leave and compensation claims are allowable.

 

The cost of compensation paid to employees for authorized absences; payments for unused leave when an employee retires or terminates employment; and actual claims for workers compensation, unemployment compensation, severance pay, and similar benefits are allowable as indirect costs.  Cost must be recognized in the period that the leave is taken, and paid for when the entity uses the cash basis of accounting. [§200.431

 

WSU Impact:

  • SPA has discussed a termination payout account structure to be used in certain qualifying instances. If you have personnel on grants that you know will be retiring or leaving, contact SPA.

 

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Budget preparation and cost principles > Publication costs

 

Takeaway: Publication costs incurred after the period of performance are allowable.

 

Non-federal entities may charge the federal award before closeout for the costs of publication or sharing of research results if the costs are not incurred during the period of performance of the federal award. [§200.461]

 

WSU Impact:

  • Make sure to include costs for publication and printing in your budget.  The budget justification should include an explanation of why the costs will be incurred post-award.
  • Costs must be charged within 90 days of termination.

 

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Budget preparation and cost principles > Recruiting costs

 

Takeaway: Short-term travel visas for recruitment are allowable as direct costs.

 

Short-term travel visas in connection with recruitment efforts are allowable as direct costs, provided they can be clearly identified as directly connected, critical and necessary to the project. [§200.463(d)]

 

WSU Impact:

  • Be sure to maintain documentation supporting this cost; it is likely this definition will include H-1B and J-1 visas.

 

 

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Budget preparation and cost principles > Travel costs

 

Takeaway: Identifying child care costs during conference travel is allowable, if it is in accordance with institutional policy.

 

Section 200.474 has been amended to allow the cost of identifying, but not providing, temporary locally-available dependent care resources for travel to conferences.  If the institution implements a policy that these costs are allowed, the policy must be implemented consistently across all sources of funds.  Travel costs for dependents are unallowable, except for travel lasting 6 months or more, and must have prior approval from the awarding agency.  [§200.474(2)]

 

No “local travel” allowed: Costs associated with intra-campus meetings are confirmed as unallowable. [§200.432] 

 

WSU Impact:

  • WSU does not currently have a policy which allows for the direct charging of costs associated with identifying dependent care resources for travel to conferences. 

 

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Budget preparation and cost principles > Foreign activities

 

Takeaway: budgetary fluctuations due to exchange rates may be allowable with prior approval. VAT for project-related goods may also be allowable.

 

Cost increases due to fluctuations in exchange rates are allowable subject to the availability of funding and prior approval. The institution must review local currency gains to determine the need for additional funding before the expiration date of the award.  [§200.440]

 

Value Added Tax (VAT) is an allowable expense if it is charged for the purchase of goods or services and the non-federal entity is legally required to pay in country.  Any refunds or applicable credits resulting from the payment of VAT taxes must be credited to the awarding agency. [§200.470]

 

WSU Impact:

  • If applicable, additional documentation for foreign subrecipients may be needed to demonstrate requirement “to pay in country VAT tax”.

 

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Budget preparation and cost principles > Modified Total Direct Cost

 

Takeaway: There are new exclusions (participant support costs) from MTDC.

 

Modified Total Direct Cost (MTDC) should only include salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants up to the first $25,000 of each subaward (regardless of the period covered).  Specifically excluded from the MTDC are equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. [§200.68]  

 

WSU Impact:

  • Participant support costs must be explicitly included in your budget and excluded from the Modified Total Direct Cost (MTDC) base for calculating Facilities & Administrative (F&A) costs.

 

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Reporting Requirements > Effort Reporting

 

Takeaway: Effort reporting is now based on strong internal controls; many of the strict prescriptions in A-21 have been removed.

 

The documentation of salary charges to federal awards using a system premised on strong internal controls is emphasized, which provides reasonable assurance as to the accuracy of the information. The institution’s official payroll system should be the basis for confirming payroll charges to federal awards. [§200.430(i)

 

WSU Impact:

 

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Reporting Requirements > Record Retention

 

Takeaway: Records need to be retained for three years after closeout; electronic retention is preferred.

 

The retention requirement for records is three years from the date of submission of the final expenditure report, and the federal agency is permitted to extend the retention period if notified in writing. [§200.333]  Electronic, open, machine readable information is preferable to paper as long as there are appropriate controls in place to safeguard from alteration of records. [§200.335(c)]

 

WSU Impact:

  • The WSU record retention policy is in compliance with this requirement. 

 

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