What are the
Changes in the
Cost Principles and
Audit Requirements
and How Might
This Impact Your
Deirdre M. Joseph
City of Tampa
If you don’t like something change it;
if you can’t change it, change the way
you think about it.~ Mary Engelbreit
Who, What, When, Why?
2009 – Executive Order to
Reduce Improper Payments
2011 Presidential Memo on
Administrative Flexibility,
Lower Costs
Reduce Waste,
Fraud, Abuse
2011 COFAR established to
coordinate improvements
Who, What, When, Why?
Who, What, When, Why?
• Federal Agencies
• Recipient and Sub-Recipient Non-Federal
* States, Local Governments, Indian Tribes
• Institutions of Higher Learning
• Auditors
Who, What, When, Why?
December 26, 2014
Where Do I Find It?
• Subpart A: Acronyms and Definitions
• Subpart B (100): General
• C (200): Pre-Award
• D (300): Post-Award
• E (400): Cost Principles
• F (500): Audit
Categorize, Cross-Reference & Consult
Procurement ~ Documentation ~ Inventory ~ Allowability
OMB Requirement
Procurement 200.113 - Mandatory
Disclosure: Requires
disclosure, in writing, of
any violations of Federal
criminal law involving fraud,
bribery, or gratuity
violations affecting the
Federal award.
City of Tampa Compliance
The City of Tampa's procurement policy
requires review vendors the City is unable
to conduct business; grant requires review
of Excluded Party List
*Consider adding
review of the
State's convicted
vendor list to
manual *Formal
bid language may
be expanded
*Agreements may
be impacted.
Legal ~ Human Resources ~ Internal Audit ~ Purchasing ~ Finance
Focus Now
• Performance over Compliance
– Pre-Award Review
– Clear milestones identified in agreements
• Strengthened Accountability
– Earlier communication of audit findings
Must -vs- Should
(Best Practice)
Audit Threshold
• NEW! Single Audit Threshold = $750,000
Old = $500,000
New = $750,000
Get All Departments Engaged
200. 447 Insurance & Indemnification
“ Deletes policy requirement that Federal
government will participate in actual losses of a
self-insurance fund that are in excess of reserves.”
Involve Legal, Risk Management and
200.206: Collection of Standardized
Information on Applications
Grant Intake Information Form
Grant Title:____ Granting Agency:____ Description_________
Contract#: _____ CFDA#:_______ Pass Through Entity:______
Federal Funding: $________ Period of Performance:
State Funding: $________ Start Date:_____ End Date:______
Local Match:
$________ Grant Type: Cost Reimbursement
City’s Match:
Fixed Fee
Total Funding: $________
Unit of Service

Financial Reporting Schedule: _______ Progress Reporting ______
Requires Trust Fund/Interest Bearing Account? 
Yes No
Indirect Cost: 
Yes No. If Yes, document rate used__________.
200.203 Notice of Funding Opportunities
• (A) Notices must remain open for at least 30 days!
• (B) Standardizes information to be provided in Summary
Federal Awarding Agency Name/Funding Opportunity Title/
Announcement Type (initial or modification)
Funding Opportunity Number
Catalog of Federal Financial Assistance (CFDA) Numbers
Key Dates (due dates for applications or submissions and intent)
• (C) Full Text of Funding Summary
– Summary Information
200.207: Specific Conditions
• Applicants or Recipients who have a history of ‘failure
to comply” with general or specific terms and
conditions or failure to meet expect performance goals
• Result – Awarding agency may impose additional
specific award conditions
Example: Requiring payments as reimbursements rather
than advance payments
Fixed Amount Awards
• 200.201
• NEW! Allow for ‘Fixed Amount’ awards
• Awards rely more on Performance than
• Payments are based on specific requirements
such as performance, milestone and results
Grant Agreements
• New! Subpart D- Post Federal Award
• Requires inclusion of performance goals in
award’s terms and conditions, as a
programmatic requirements.
200.301 Performance Measurement
Federal Agencies MUST include
performance goals aligned with program
goals in notice
• Entities Must relate financial data to performance
Goal = Response
$100K purchase of
Communications 1st quarter
30% of our State
can now Respond
Cost Sharing or Match
• 200.306
• CLARIFICATION! Voluntary committed cost
sharing is not expected and cannot be used as a factor
during the merit review of applications or proposals.
CONSIDER Criteria for Cost Share/Match:
• Verifiable in records
• Not included in any other Federal award
• Necessary and reasonable to accomplish program
• Not paid by Federal Government
• Allowable in Subpart E
• 200.317
• States may use their own written
procurement policies and procedures
• Open Competition
• Ensure Most Economical Purchase
• Conflict of Interest
• Mandatory Disclosures
• Must perform cost analysis on all noncompetitive contracts
• All contracts must include required
Review of Risk of Applicants
• 200.205
• An evaluation framework must be in
place (e.g. Do Not Pay)
• Where necessary, specific conditions
must be imposed to mitigate potential risk
200.333 Record Retention
• Clarification – Files must be maintained for 3
years from the date of FINAL Expenditure
Family Friendly Policies Encouraged
NEW! Cost of identifying locally available child
care resource is allowable.
NEW! Allows temporary dependent care cost
that meet specified standards for travel
NEW! Allows family leave as a fringe benefit
TIP: Review existing policies with Human Resources
Pass Through Entity Requirements
Sub Awards must be clearly identified
Risk Evaluation of sub-recipient’s
Verify compliance to audit requirements
May impose specific sub-award conditions
Withhold cash
Disallow cost
Terminate (or temporary suspend) award
Suspension and Debarment
Indirect Cost Rates
• Must accept approved negotiated rate
• Pass-through entities must provide an indirect
cost rate for sub-awards
• If no Negotiated Rate; then 10% rate in effect
Merit Review Proposal
• 200.204 – New!
• Must have a merit review process
• 200.313
• The State can follow their own equipment
• NEW! Computing Devices with a value of
$5,000 or less will be considered supplies
• 200.313 (continued)
if such use will not ‘interfere”
1st – Projects supported by federal agency
2nd – Projects funded by other federal agencies
3rd - Use for non-federally funded programs
Methods of Collection Transmission
& Storage of Information
• 200.335
• Clarification! Electronic, open, machine
readable information is preferable to paper
(with appropriate internal controls to
safeguard alteration of records)
• Can substitute electronic versions for
original paper provided certain conditions
Required Certifications
• 200.415 NEW!
• Must certify on annual and fiscal reports or
vouchers requesting payment:
“By signing this report, I certify to the best of my
knowledge and belief that the report is true, complete and
accurate and expenditures, disbursements and cash receipts
are for the purpose and objectives set forth in the terms and
conditions of the federal award. I am aware that any false,
fictitious or fraudulent information or the omission of any
material fact, may subject me to criminal civil or
administrative penalties for fraud, false statements, false
claims or otherwise”
• 200.305
• Interest Earned on Federal Funds paid annually
(rather than promptly)
• Interest Bearing account increased to $500 for
administrative purposes
• 200.339
• Can Terminate Award
– Non compliance
– For Cause
– With Consent
Direct Cost
• 200.413
• Clarifies the circumstances where
Administrative Support cost may be treated as
direct cost
Compensation & Payroll
• 200.430
• High standards of internal control
over salaries and wages
Allowable -vs- Non-Allowable Cost
• NEW: 200.421 Advertising and Public
Relations are allowable exceptions to the
otherwise unallowable cost
• 200.460 Proposal Cost are allowable
Develop a checklist of Allowable and
Unallowable Cost for each grant file
Internal Controls
• 200.303
• Must safeguard and
protect personally
identifiable or
sensitive information
Source Documents for Best Practices:
1. The Green Book
2. “Internal Control Framework” by COSO
3. Appendix XI, Compliance Supplement
Mandatory Disclosure
• 200.112: Awarding Agency MUST establish
Conflict of Interest policy and NonFederal entity MUST disclose any
potential Conflicts of Interest
• 200.113: MUST disclose in a timely manner
and in writing ALL violations of
criminal law involving fraud, bribery
or gratuity violations
Appendix II: Contract Provisions
• NEW! All contracts must contain provision
covering the guidance, statues and regulations
provided in this appendix (11 areas)
* Legal remedies when contractors violate
or breach
* Termination for cause or convenience
* Rights to Inventors Made under Contract
* Byrd Anti-Lobbying Amendment
Contract Administration
• 200.318
• Must maintain oversight to ensure contractors
perform in accordance with terms, conditions
and specifications of the contract
Prior Approval
• 200.407
• Required for the following circumstances:
Change in principal investigator, project leader, partner
or scope of effort
Unrecovered indirect cost
Additions to program income or use of program
income to meet cost sharing or match
Changes in project scope/objective, key person
specified in award (non-construction award)
Transfer of participant support cost to other expense
Transfer or subcontract of work under the award
Auditor Selection
• Peer Review is now a factor in
selecting an auditor
• Add requirement to upcoming RFPs
• Request periodic Peer Review results
Single Audit
• 200.512: MUST publish Single Audit Reports
online at the Federal Audit Clearinghouse
Suggestion(s): Establish procedures/metrics
• Timely Single Audit submission
• Coordinated Audit Follow-Up (e.g. using SFSAC categories to track findings)
Single Audit Report
• 200.512
• Auditor and auditees MUST ensure report do
not include any Protected Personally
Identifiable Information (PPII)
• MUST sign statement that
reports don’t include PPII and
authorization to make reports
publically available on a website.
Audit Resolution
• 200.513
• 3 months to resolve findings
• Federal Agency will appoint a Senior
Accountable Official for oversight of
Single Audit
Audit Findings
• 200.516
• MUST identify audit findings as repeat (from
prior audit) with reference to the audit finding
Internally track audit findings
Close Out
• 200.343
• Clarification: Final reports due 90 days from
end of period of performance
• Close Out period extended to one year
[email protected]
(813) 276-3388
If nothing ever changes, there’d be no butterflies ~ Author Unknown

similar documents