a-21, a-110, a-133. omb the federal office of management and budget (omb) has issued circulars that...
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Office of Management & Budget
A-21, A-110, A-133
OMBThe federal Office of Management and
Budget (OMB)has issued circulars that define the principles and standards for sponsored projects funded by federal agencies.
OMB circulars A-21, A-110, and A-133 provide instructions for handling federal funds.
WHAT IS OMB A-21?This section outlines the principles and policies
that must be followed regarding the accounting principles, arrangements, and exemptions for any training or work produced under the contract as agreed upon by the Federal Government.
A-21 defines the cost principles applicable to grants and contracts at educational institutionsCost Accounting Standards (CAS)Direct vs. Indirect (F&A) CostsAllowable vs. Unallowable CostsEffort Reporting
CASCost Accounting Standards
Consistency in estimating, accumulating, and reporting costs
Consistency in allocating costs incurred for the same purpose
Accounting for unallowable costsCost accounting period (fiscal year)
DIRECT COSTSDirect Costs are costs must be:Allowable, Allocable Reasonable, Consistent
Direct Costs can be directly associated with a particular sponsored project, an instructional activity, or any other institutional activity.
Examples of Direct Costs:Salaries, wages, and fringe benefitsSuppliesServicesTravelEquipment
INDIRECT COSTSIndirect Costs are often referred to as
facilities and administrative costs (F&A) or overhead. HCC has an approved indirect rate of 39%.
Allowable CostsAllowable Costs
Must be reasonableMust be allocableMust be treated consistentlyMust conform to any limitation or
exclusion“Prudent person” test
Allowable and Unallowable CostsSection J specifies which costs are allowable and
unallowable as both direct and indirect costsExamples of Allowable Costs
Equipment, Professional Services, Transportation
Examples of Unallowable CostsAlcohol, Entertainment, Lobbying, Marketing
Anything outside the scope of these costs is typically not allowed unless it falls under one of the specifically mentioned exceptions within the circular.
Time and EffortTime and Effort ReportingThe purpose of an effort reporting system is
to provide a reasonable basis for distributing salary charges among direct and indirect activities
HCC uses an after-the-fact effort reporting system
WHAT IS OMB A-110A-110 sets forth standards for uniform
administrative requirements for grants and agreements among federal agencies in the administration of grants to and agreements with institutions of higher education.
Cost SharingCost Sharing must be more than a token
amount (e.g. more than 1% of project costs)Cost Sharing represents institutional
commitment to the projectMandatory Cost Sharing is required by the
sponsor as a condition of making the awardVoluntary Cost Sharing is not required by the
sponsor but may become legally binding as a commitment reflected in the proposed budgetCommitted (e.g. over salary cap)Uncommitted
Cost SharingAcceptable Cost Sharing must be:
Verifiable and documented in recipient records
Not included as matching for any other federal projects, nor paid from other federal awards
Necessary and reasonableAllowable under applicable cost
principlesAppropriate to all OMB Circular A-110
provisions
Program IncomeProgram Income applies to funds earned
during a project periodProgram Income includes
Registration fees for a training or conference award
Products or materials purchased on an award and sold after research has been conducted
Sale of information produced or acquired under the award
Program IncomeProgram Income may be:
Added to funds committed to the projectDeducted from total project allowable
costsApplied to non-federal share of project
costsRecipient has no obligation to the Federal
Government for funds earned after the project period unless the agency’s regulations or terms and conditions provide otherwise
Program IncomeProgram Income may be:
Added to funds committed to the projectDeducted from total project allowable
costsApplied to non-federal share of project
costsRecipient has no obligation to the Federal
Government for funds earned after the project period unless the agency’s regulations or terms and conditions provide otherwise
Property ControlManagement of property should:
• Conduct a physical inventory every two years• Safeguard against damage, loss, and theft• Provide adequate maintenance•Maintain insurance• Sell competitively at highest return, when authorized
Reports & Records A-110 sets forth procedures for monitoring
and reporting financial and program performance and the required reporting forms, including requirements for record retention
Retention of RecordsFinancial records, supporting documents,
statistical records and all other records must be retained for three years from the date of final report, except when:Litigation requires retention until
matters have been resolvedRecords are transferred to the agency,
in which case retention requirements end
Other record retention requirements apply
The PI and Grants AccountingAward recipients are responsible for
managing and monitoring each project, program, function and activity supported by the award
Award recipients are responsible for ensuring that sub-recipients have also met all audit requirements
Technical ReportsTechnical reports must be completed not
more than quarterly and not less than annually
Reports must contain:Comparison of actual accomplishments
with set goals for the periodIf applicable, reasons that goals were
not metExplanation for any cost over-runs or
high unit costs
Close Out the GrantsClose-Out Requirements
All reports submitted within 90 daysAll obligations liquidated within 90 daysPrompt payment by awarding agencyRecipient refund of unobligated cash
advancesAccounting for real and personal
propertyAgency right to recover disallowances
SUMMARY OF OMB A-133 A-133 sets forth standards for consistency in
audits of organizations spending federal awards.A-133 defines the requirements of an audit and
explains the responsibilities of the institution, the agency and the auditor.
A sample of Federal awards and their direct cost transactions is selected and examined to determine if expenditures and procedures were appropriate
A-133 requires an annual external audit of all non-federal entities expending $500,000 or more annually in Federal funds
WebsitesA-21http://www.whitehouse.gov/omb/circulars_a021_2004
A-110http://www.whitehouse.gov/omb/circulars_a110/
A-133http://www.whitehouse.gov/omb/circulars/a133_compliance_
supplement_2010
http://www.myflorida.com/audgen/pages/subjects/ea_other.htm
The federal audit reports for the entire state of Florida are rolled up into one report that fulfills the A-133 requirement. This report is copied and sent to the feds as needed.
Questions?