OMB, COFAR Issue Technical Corrections, New FAQ

September 15, 2015 | By Jerry Ashworth | Post a Comment

OMB-SealIt didn’t have much fanfare and you may have missed it, but the Office of Management and Budget (OMB) and the Council on Financial Assistance Reform (COFAR) made some big news last week. Maybe not quite as big as the initial issuance of the uniform grant guidance, but important none the less.

There are two aspects. First, OMB came out with a Federal Register notice on Sept. 10 that included more technical corrections to the uniform guidance. Over a dozen sections were changed in some way. Some changes were cosmetic in nature; for example, instances in the guidance referring to the System of Award Management were corrected to read the System for Award Management. However, what is more eye-opening is that OMB has revised the guidance to allow a grace period of two fiscal years (previously one fiscal year) for nonfederal entities to implement changes to their procurement policies and procedures in accordance with guidance on procurement standards (§§200.317-200.326). OMB doesn’t say why it extended the grace period.

Other revisions were made where it “has come to the attention of COFAR that particular language in the final guidance did not match with the COFAR’s intent and would result in an erroneous implementation of the guidance.” This can be witnessed in the applicability chart in §200.101, which has been completely revised to better clarify what subparts apply to which types of awards. You may want to pay specific attention to this new chart.

In the second bit of news, COFAR issued an updated version of its Frequently Asked Questions related to the uniform guidance. The new FAQ document includes about 23 new questions,  revised answers for three previous questions and the remainder of the questions from COFAR’s previous FAQs. Many of the new questions relate to indirect costs and audits. For example, if an organization elects the 10 percent de minimis rate at the beginning of an award, is the de minimis rate applicable to the period of performance of the award? COFAR responds that the de minimis rate may not be applicable during the entire period of performance of an award. A nonfederal entity may use the de minimis rate indefinitely until it elects to negotiate an indirect cost rate, which the nonfederal entity may apply to do at any time. Indirect cost rates are generally negotiated based on a nonfederal entity’s fiscal year (not the period of performance of an award). Therefore, the de minimis rate may not be applicable during the entire period of performance of an award.

Another new question I found interesting was this one: Section 200.513(a)(3)(ii) of the uniform guidance states that a governmentwide audit quality project will be used to determine the quality of single audits and must be performed once every six years beginning in 2018 or at such other interval as determined by OMB. Does the 2018 date signify the year that the first study must be performed? COFAR says no. The single audit quality project will examine single audit engagements under the uniform guidance that are submitted to the Federal Audit Clearinghouse no earlier than 2018 and will, therefore, occur in 2019 or 2020 as determined by OMB. OK, duly noted.

You may want to check out the new FAQ and Federal Register notice to make sure you are in full compliance with the uniform guidance. We here at Thompson will feature articles soon with more details on these issuances.

Let us know what you think about the new FAQ and the technical corrections. Do they meet the intended goal of clarifying how to comply? We’d like to hear from you.



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