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 |
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Takeaway: Only cost share when required by the solicitation.
Cost sharing or matching 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. 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. [§200.306] Additionally, 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.
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| Allocable Costs |
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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]
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| Expenditures that now require agency pre-approval |
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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. [§200.407] Changes in pre-approval have been made regarding the following items:
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| Conflict of Interest |
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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]
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| Program Income |
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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 |
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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
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)]
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| Subrecipients > Including subrecipients in my proposal |
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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.
§200.330: 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]
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| Subrecipients > Contract terms and conditions |
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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.
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| Subrecipients > Risk assessment |
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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)]
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| Subrecipients > Monitoring |
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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 |
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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]
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| Audits |
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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]
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| Budget preparation and cost principles > Participant costs |
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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. Participant support costs should be excluded from the MTDC (see also MTDC).
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| Budget preparation and cost principles > Direct costs clerical and administrative |
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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.
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| Budget preparation and cost principles > Computing devices |
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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]
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| Budget preparation and cost principles > Fringe benefits (accumulated leave) |
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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 direct or 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]
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| Budget preparation and cost principles > Publication costs |
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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]
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| Budget preparation and cost principles > Recruiting costs |
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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)]
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| Budget preparation and cost principles > Travel costs |
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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]
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| Budget preparation and cost principles > Foreign activities |
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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]
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| Budget preparation and cost principles > Modified Total Direct Cost |
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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]
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| Reporting Requirements > Effort Reporting |
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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)]
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| Reporting Requirements > Record Retention |
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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)]
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