overview of omb circular a-110 uniform administrative requirements for grants and agreements with...

Overview of OMB Circular A-110

Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-

Profit Organizations

June 2011

© Partners HealthCare System, Inc., 2011

Key Learning Objectives

• To gain a better understanding of the importance of adhering to the requirements found in this Circular.

• To learn what types of agreements are governed by A-110 and when the provisions apply.

• To apply the standards in our daily work in an effort to achieve consistency and uniformity in the administration of our grants and agreements.

OMB Circular A-110

– Also referred to as; The Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations

– The Purpose; To provide standards for obtaining consistency and uniformity among federal agencies re: awards

– The Policy; The standards set forth are applicable to all Federal agencies

– Precedence; if a statute prescribes policies or requirements that contradict the standards put forth in this Circular, the provisions of the statute will govern

– Provides guidance to Federal awarding agencies and limits their ability to impose additional or inconsistent requirements

Flow of Provisions

• The standards apply to all Federal Agencies

• Federal Agencies flow the standards down to all recipients/grantees

• All grantees then flow down the standards to all subrecipients performing a significant or substantive portion of the work under the grantee’s Prime award

A-110 Circular Is Organized intoFour Subparts and One Appendix

• Subpart A- General (includes a glossary of terms found in the Circular)

• Subpart B- Pre-Award Requirements

• Subpart C- Post-Award Requirements

• Subpart D- After the Award Requirements

• Appendix A- Contract Provisions

• Full text can be found at: http://www.whitehouse.gov/omb/circulars_default/

Subpart A - General

• Provides definitions– Definitions are provided for over 40 terms

• Examples: acquisition cost of equipment, award, closeout, contract, cost sharing or matching, disallowed costs, subaward, and unobligated balance (many of the terms not found in the glossary found in the NIH GPS)

• Supersedes other issuances– Any regulation or other non-regulatory materials inconsistent

with the A-110– OMB-A110 is the authority– Deviations- Exceptions only in unusual circumstances, which are

specified in the full text of the Circular

• Established Conditions for Subawards– Provisions apply to subrecipients who are institutions of higher

education, hospitals or other non - profit organizations

Subpart B - Pre-Award Requirements

• Defines policies for different types of awards:– Grants are issued when the principle purpose of award is to

accomplish a public purpose of support – Cooperative agreements are issued when the above is true, but

additionally when it is expected that there will be substantial involvement between the sponsoring agency and the grantee when carrying out the objectives delineated in the scope of work

– Contracts shall be issued when the principle purpose is acquisition of property or services for the direct benefit or use of the Federal Government

• Establishes forms and instructions for pre-award matters in accordance with 5 CFR Part 1320, “Controlling Paperwork Burdens on the Public”, this Circular establishes that the SF424 series, or those forms prescribed by the Federal agency shall be used when applying for federal assistance

Subpart B - Pre-Award Requirements, cont.• Defines debarment and suspension rules

– Restricts subawards and contracts with parties that are debarred, suspended or otherwise excluded from applying for and receiving Federal funds.

NOTE: check the Excluded Parties lists as found at https://www.epls.gov/

• Establishes special award conditions– Additional requirements may be imposed if applicant or recipient

has a history of poor performance; is not financially stable; the management system does not meet the standards prescribed in circular; awardee or sub has violated T&C's; awardee is not otherwise responsible

• In keeping with the Metric Conversion Act, establishes that the Metric System is the preferred measurement system for Federal procurements, grants and other business related activities

Subpart B - Pre-Award Requirements, cont.• Resource Recovery and Conservation Act - State and local

institutions of higher education, hospitals, and non-profit organizations receiving Federal funds are encouraged to purchase recycled products pursuant to the EPA guidelines

• Establishes Certifications and Representations – each Federal awarding agency is authorized and encouraged to allow recipients to submit certs and reps required by statute, executive order or regulation on an annual basis. Annual certs and reps will be signed by representatives authorized by the respective entity to ensure compliance with the pertinent regulations– This is in part accomplished by the annual updates completed in

the Central Contractor Registry (CCR) and the Online Representations and Certifications Application (ORCA), for each respective hospital

Subpart C - Post Award Requirements• Prescribes standards for financial management systems

– Accurate, current and complete disclosure of the financial results of each federally sponsored project or program in accordance with the reporting requirements (FSR, Report of Federal Cash Transactions)

– Records must adequately identify the source and application of all funds for federally sponsored activities (shall include obligations, unobligated balances, assets, expenses, income and interest as applicable)

– Recipients shall have effective control over and accountability for all funds, property and other assets and shall safeguard all to assure they are used solely for authorized purposes

– Compare the expenses to the approved budget amounts for each award

– Procedures will be written to minimize the time between the receipt of funds by the recipient and the payments for project expenses

– Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with applicable Federal cost principles and terms and conditions of award

– Accounting records that are supported by source documentation

Subpart C - Post Award Requirements, cont.• Establishes methods for making payments

– Minimize lag between US Treasury and release of payment– Cash draws – Advance payments (when there are written procedures and

adequate financial management systems in place)– Reimbursements (preferred method when no written procedures

in place and financial management systems are not sound)– Authorizes the standard forms to be used for requesting

advances and reimbursement requests (SF 270 and SF 271)

• Establishes criteria under which Federal awarding agencies may withhold payments to recipients– When the recipient has failed to comply with award terms and

conditions, project objectives or Federal reporting requirements– When the recipient is delinquent in repaying a Federal debt

Subpart C - Post Award Requirements, cont.

• Creates rules for: – Cost sharing and matching requirements– Accounting for program income– Budget and program plan revisions – Non-Federal Audits– Determining allowability of costs– Establishing fund availability– Property Standards– Equipment Standards– Intangible Property Standards– Procurement Standards– Reports and Records– Termination and Enforcement

Cost Sharing or Matching - Defined

Cost sharing or matching is defined as that portion of the project or program costs that are not borne by the Federal Government.

Cost Sharing Criteria: Section B.23.a establishes the following criteria for determining whether a contribution is eligible for cost sharing.

CostSharing

Provided for in theapproved award

budget

Verifiable fromrecipient's records

Allowable under theapplicable cost

principle

Conform to otherprovisions under

cost sharingguidelines

Accepted contributionsfor cost sharing

based on 7-prong criterion

Not included ascontributions for

any other federally-assisted project or

program

Necessary andreasonable based

on project’sobjectives

Not paid by thegovernment under

another award

Cost sharing or matching

(cash or in-kind) must meet

the following criteria:


• Cost Sharing criteria, continued:– Unrecovered indirect costs or F&A can only be included as a

cost share or matching contribution with the prior approval of the Federal awarding agency

– The values of recipient contributions shall be established in accordance with the applicable cost principles (45 CFR Part 74 Appendix E)

– Volunteer services of professional and technical personnel, consultants and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program

– Rates for volunteer services shall be consistent with those paid for same or similar work within the recipients organization and if no similar position exists within the organization, rates shall be consistent with those paid within the same labor market


• Cost Sharing criteria, continued:– Fringe benefit rates for volunteers may be included in the

valuation when they are allowable, allocable and reasonable– Donated supplies may include expendable equipment, office

supplies, lab supplies or workshop and classroom supplies. There assessed value shall be reasonable and shall not exceed the fair market value at the time of donation

– Third party in-kind contributions shall be documented and supported by the same methods used by the recipient for its own employees

– The basis of determining the value of personal services, material, equipment, buildings and land will be documented and retained


Potential audit findings –

• Mandatory cost sharing commitments are not met• Unallowable/inappropriate charges used to meet cost sharing

commitments• Institution does not record and maintain documentation for reporting

the cost sharing to the funding agency

Methods to evaluate institutional exposure –

• Investigate institution’s method and process for tracking and reporting cost sharing

• Review award documents including cost sharing; obtain accounting information and effort reports for the life of the award

Subpart C - Post Award Requirements, cont.• Program Income:

– Standards covered are required of recipient organizations accounting for program income related to projects financed in whole or in part with Federal funds

– Program income earned during the period shall be retained by the recipient and in accordance with Federal awarding agency regulations or the terms and conditions of award, shall be used in one or more of the following ways:

• Add to the funds committed to the project by the Federal awarding agency and used to further eligible project or program objectives

• Used to finance the non-Federal share of the project or program

• Deducted from the total project or program allowable costs to determine the costs on which the Federal share is based

Subpart C - Post Award Requirements, cont.• Program Income:

– When the Federal awarding agency does not specify in its regulations or the terms and conditions of award how to treat program income, it will be totaled and deducted from the total project or program costs coming from the awarding agency for all NON research awards

– When the project is a research project, the program income will be added to the funds committed by the Federal awarding agency and used to further the eligible project objectives

– Unless otherwise specified in the terms and conditions of award, recipients shall have no obligation to the Federal Government regarding any program income earned after the end of the project period

– Unless otherwise specified, there will also be no obligation with respect to program income earned from license fees and royalties


• Revisions to budgets and program plans:– Recipients are required to report deviations from budget and

program plans and request prior approval for any of the following revisions;

• Change in the scope or the objective of the project or program (even if there is no associated budget revision planned)

• Change in a key person specified in the application or award document

• The absence of the PI or project director that will be for more than three months or a 25% reduction in the time devoted to the project

• The need for additional Federal funding

• Transfer of amounts budgeted for indirect costs to absorb decreases in direct costs , or vice versa

• Transfer of funds from training allowances to other budget categories

• Adding a subcontract that was not described in the application and funded in the approved award


• Revisions to budgets and program plans, cont.:– Federal awarding agencies are authorized to waive the prior

approvals required by this Circular and may include authorizing recipients to do any one or more of the following;

• Incur pre-award costs 90 days prior to award or more than 90 calendar days with the prior approval of the Federal awarding agency (at recipient’s own risk if award is not realized or is inadequate to cover such costs)

• Initiate a one time no cost extension of up to 12 months at least 10 days prior to the expiration date of the award and if not “MERELY FOR THE PURPOSE OF USING UNOBLIGATED BALANCES”, is not prohibited under the terms of the award and will not involve any change to the approved objectives or scope of the project

• Carry forward of unobligated balances to subsequent funding periods


• Revisions to budgets and program plans:– Federal awarding agencies require recipients to notify the

agency in writing promptly whenever the amount of the Federal authorized funds is expected to exceed the needs of the recipient (for the project period) by more than $5000 or 5% of the Federal award, whichever is greater (unless an application for additional funding is submitted for a continuation award)

– When requesting approval for budget revisions, recipients are expected to use the budget forms used at the application stage, unless a narrative request has been approved by the Federal funding agency

– Federal awarding agencies shall review the request and notify the recipient if the request is approved or not within 30 calendar days. If still under review on the 30th day, the agency shall inform the recipient in writing of the date when the decision shall be made


• Non-Federal Audits:– Recipients and subrecipients that are institutions of higher

education or other non-profits organizations (including hospitals) shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 and revised OMB Circular A-133

• Allowable Costs:– Allowability of costs shall be determined in accordance with the

cost principles applicable to the entity incurring the costs. The allowability of costs incurred by hospitals is determined in accordance with the provisions of Appendix E of 45 CFR Part 74, “Principles of Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals”

• Period of Availability of Funds:– Where a funding period is specified, a recipient may charge to

the grant only allowable costs incurred during the period and any pre-award costs authorized by the Federal funding agency


• Property Standards:– This Circular establishes the standards governing the

management and disposition of property furnished by the Federal Government when the cost was charged to a project supported by a Federal award

– Recipients may use their own property standards, providing it observes the standards set forth in this Circular

– Federal awarding agencies shall not impose additional requirements unless specifically required by Federal statute

• Equipment:– Title to equipment acquired with Federal funds shall vest with the

recipient– Recipient shall not use equipment acquired with Federal funds to

provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services for as long as the Government retains an interest in the equipment


• Equipment, cont.:– Recipient shall use the equipment in the project or program for

which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds

– When no longer needed for the original project, the equipment shall be used in activities sponsored by the Federal agency that funded the original project first and then for activities sponsored by other Federal funding agencies

– During the time of use on the project or program for which it was acquired, recipient shall make it available for use on other projects or programs if such other use will not interfere with the work of for the original project

– User charges will be treated as program income– When acquiring replacement equipment, original can be traded

or sold to offset the cost of new equipment, subject to the approval of the Federal funding agency


• Equipment, cont.:– Equipment records shall include the following information;

• Description of the equipment• Manufacturer’s serial number, model number, or other ID

numbers• Source of equipment, including the award number• Whether title vests with recipient or Government• Acquisition date or receipt date if shipped by Government• Acquisition cost• Information from which one can calculate the percentage of

Federal participation in the cost of the equipment• Location and condition of the equipment and report date• Ultimate disposition data, including disposition date and

method• Equipment owned by the Federal Government shall be

identified as such


• Equipment, cont.:– Physical inventory will be completed at least once every two

years and shall verify the existence, current utilization and continued need for the equipment

– A control system will be in effect to insure adequate safeguards to prevent loss, damage, or theft

– Any such occurrence shall be investigated, documented and reported (if equipment is owned by the Federal Government)

– Adequate maintenance procedures will be implemented to keep equipment in good working condition

– Final disposition of equipment is additionally outlined and included

• Intangible Property:– Recipients may copyright work that is subject to copyright and

was developed, or for which ownership was purchased, under an award


• Intangible Property, cont.:– The Federal awarding agency reserves a royalty-free,

nonexclusive and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes and to authorize others to do so

– Recipients are subject to government wide regulations issued by the Department of Commerce at 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements”

– The Federal Government reserves the right to obtain, reproduce, publish or otherwise use the data first produced under an award and to authorized others to receive, reproduce, publish or otherwise use such data for Federal purposes

– In response to the Freedom of Information Act (FOIA), recipients shall provide research data so that they can be made available to the public under FOIA procedures


• Intangible Property, cont.:– Research Data is defined as the recorded factual material

commonly accepted in the scientific research community as necessary to validate research findings. It does not include preliminary findings, analyses, drafts of scientific papers, plans for future research, peer reviews or communications with colleagues

– Also not included – materials necessary to be held in confidence by the researcher until they are published, or similar information which is protected under law (medical or personnel records)

– Published is defined as research findings that are published in a peer-reviewed scientific or technical journal or when a Federal agency publicly and officially cites the research findings in support of an agency action that has the force and effect of law


• Procurement Standards.:– Standards are furnished to ensure that materials and services

are obtained in an effective manner and in compliance with the provisions of applicable Federal statutes and executive orders

– No additional standards or requirements shall be imposed on recipients unless specifically required by Federal statute or executive order or approved by OMB

– These standards do not relieve the recipient of the contractual responsibilities arising under their contract(s)

– Recipients shall maintain written standards of conduct and no-one shall participate in the selection, award or administration of an award supported by Federal funds if a real or apparent conflict of interest would be involved

– Officers, employees and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements


• Procurement Standards.:– All procurement transactions shall be conducted in a manner to

provide open and free competition to the maximum extent possible

– All recipients shall have written procurement procedures– Positive efforts shall be made by recipients to utilize small

businesses, minority owned firms and women’s business enterprises whenever possible

– Contractors shall be responsible, and recipients will consider integrity, record of past performance, financial and technical resources or accessibility to other necessary resources

– Please see Procurement Standards section for specifics on how to solicit, conduct, document and administer a compliant procurement process, as needed


• Reports and Records:– This Circular sets forth the standards for monitoring and

reporting program performance– Recipients are responsible for managing and monitoring each

project, program, subaward, function or activity supported by an award

– Performance reports shall not be required more frequently than quarterly or less frequently than annually

– Annual reports shall be due 90 calendar days after the grant year

– Quarterly or semi-annual reports shall be due 30 days after the reporting period

– Final performance reports are due 90 calendar days after the expiration or termination of the award

– Specifics of what is to be contained in technical reports is covered in this section


• Reports and Records:– Recipients shall not be required to submit more than the original

and two copies of performance reports– Federal awarding agencies may make site visits as needed– Financial reporting requirements are also covered in specific– Retention of records shall be for a period of three years from the

date of submission of the final expenditure report or for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report

– Records for real property and equipment shall be retained for three years after final disposition

– The Federal awarding agency, the Inspector General, Comptroller General of the US and any of their duly authorized representatives have the right of timely and unrestricted access to any books, documents, papers or other records pertaining to awards in order to make audits, examinations, excerpts, transcripts or copies of such documents


• Reports and Records, cont.:– This access right includes timely and reasonable access to

recipient’s personnel for the purpose of interview and discussion related to such documents

– The rights of access are NOT limited to the required retention period, but shall last as long as the records are retained!

• Termination:– Awards may be terminated in whole or in part if a recipient

materially fails to comply with the terms and conditions of award– Recipients can terminate awards by sending the Federal

awarding agency written notification setting forth the reasons for termination, the effective date and the portion to be terminated


Enforcement :– If a recipient materially fails to comply with the terms and

conditions of award, the Federal awarding agency may; • Temporarily withhold payments pending corrective action• Disallow all or part of the costs of the activity or action found

not in compliance• Wholly or partially suspend or terminate the current award• Withhold further awards for the project or program• Take other remedies that may be legally available

Subpart D – After-the-Award Requirements

• Close out Procedures:– Recipients shall submit within 90 calendar days after the date of

completion of the award, all financial, performance and other reports as required by the terms and conditions of award

– Extensions may be approved by the Federal awarding agency when requested by the recipient

– All obligations shall be liquidated no later than 90 calendar days after the funding period or date of completion

– Any balance of unobligated cash will be promptly returned to the Federal awarding agency

– Recipients shall account for any real or personal property acquired with Federal funds or received from the Federal Government

– Closeout does not affect the right of the Government to disallow costs and recover funds on the basis of a later audit

Subpart D – After-the-Award Requirements, cont.

• Appendix A – Contract Provisions:– This section includes the full text for the eight (8) clauses that

are mandatory provisions for all Federal awards;• Equal Employment Opportunity • Copeland Anti-Kickback Act• Davis-Bacon Act• Contract Work Hours and Safety Standards Act• Rights to Inventions Made Under a Contract or Agreement• Clean Air Act• Byrd Anti-Lobbying Amendment• Debarment and Suspension

Questions?

Reminder: This Circular applies to all of our Federal awards.

Full text can be found at: http://www.whitehouse.gov/omb/circulars/a110/a110.html

© Partners HealthCare System, Inc., 2011

overview of omb circular a-110 uniform administrative requirements for grants and agreements with...

Documents

award requirements appendix

inconsistent requirements

principle purpose of

grantees prime award

appendix subpart

federal agencies precedence

federal awarding agencies

flow of provisions