OMB’s New Guidance Offers Grantees Time To Prepare for Changes

February 3, 2014 | By Jerry Ashworth | Post a Comment

thRemember the key words of the Boy Scout motto? Be prepared! Thinking back on a webinar hosted by Thompson last Thursday featuring Tiffany Winters, partner at Brustein & Manasevit, PLLC, that motto seems to ring true for grantees now that the Office of Management and Budget has issued its grants uniform reform guidance.

Federal agencies have until Dec. 26, 2014, to adopt the guidance in their grant regulations. Therefore, grantees still will follow traditional grants requirements in their current grant agreements for the remainder of the year. That will give grantees time to review the numerous changes in the guidance and determine how well they are prepared to comply with them.

“I recommend doing an internal control test of your systems,” Winters said. “Really what that is is taking what the new rules are and checking them against your own systems and finding where the weaknesses are.” For example, the guidance has new requirements for financial management, procurement and inventory management procedures, including a new discussion of “micro-purchases” below $3,000.

Winters said that if recipients currently have written procedures addressing these issues, they should update them. If they have no written procedures addressing such, they should begin crafting them so that they are prepared for the new regulations. “Creating procedures strengthens your internal controls,” she added. “If your policy has nothing for purchases under $3,000, you may want to rewrite them to add information on micropurchases.”

In an attempt to make time and effort reporting more flexible, OMB in the new guidance doesn’t require personnel activity reports or semiannual notifications, but requires grantees to “maintain high standards for internal controls over salaries and wages while encouraging entities to focus on performance about how they implement processes to meet those standards.” Winters said that because these standards almost appear “too flexible” and could vary upon grantor agency and auditor interpretation, she recommended that grantees continue with their current time and effort documentation practices. “Until we start to see [single] audits down the line, I would be hesitant to recommend something that meets these new standards because they are too vague,” she said.

The good thing is we all have a year to prepare for these changes. However, because the changes are so vast, and in some cases, so vague, it’s going to be one of the most challenging years grantees may ever face. However, continue to rely on Thompson to keep you informed on how you can stay compliant with the changes.

Do you have policies in place? How difficult will it be for your entity to change them to meet the new requirements? Let us know.

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