Which Rules Apply? Uniform Guidance or Former OMB Circulars

July 6, 2016 | By Jerry Ashworth | Post a Comment

calendar-series-2-1192572One look at the calendar and you can easily tell its July 2016. The uniform guidance has been applicable for federal awards since Dec. 26, 2014. Generally speaking, that now makes a year and half under the Office of Management and Budget’s (OMB) new rules. Surely if you are a grantee, the uniform guidance would apply by now, wouldn’t it? Not necessarily.

During some of the presentations at last week’s American Institute of Certified Public Accountants’ Not-for-Profit conference at National Harbor, Md., speakers stressed the importance of understanding which rules apply to your grant – those under the uniform guidance or those under the former OMB circulars. The uniform guidance applies to new funding received on or after Dec. 26, 2014. However, a recipient may be receiving funds under a multi-year award that continues to follow the old rules.

Pass-through entities in particular must be aware of which rules apply when passing funds down to subrecipients. It should be stated clearly in the subrecipient’s terms and conditions whether they are to abide by the uniform guidance or the former circulars. It is the pass-through’s responsibility to ensure that the subrecipient understands which rules apply.

Subrecipients of federal funding that are still unsure about which rules they should be following should review the terms and conditions of their award or contact their pass-through entity in a timely manner to remain compliant. Still, the pass-through is ultimately accountable for these funds.

For a little more advice, readers can turn to question .110-7, Effective Dates and Incremental Funding, in the Council on Financial Assistance Reform’s (COFAR’s) most recent Frequently Asked Questions about the uniform guidance. It states:

“How does the effective date apply to incremental funding? I have an award with three more years of expected funding. Normally I would keep the same account number for all five years, with the incremental funding for each year added as it comes in. Do I have to keep my funding subject to the old OMB Circulars in a separate account from the funding awarded after the Uniform Guidance goes into effect? Or can I just assume that the new rules apply as soon as I get my first post-Uniform Guidance increment of funds? Can I apply those rules to any residual balance of old funds as well as the new monies?

The new rules apply as of the Federal award date (see 200.39) to new awards and, for agencies that consider incremental funding actions on previously made awards to be opportunities to change award terms and conditions, the first funding increment issued on or after 12/26/14. For agency incremental funding actions that are subject to the Uniform Guidance, non-Federal entities are not obligated to segregate or otherwise track old funds and new funds but may do so at their discretion. For example, a non-Federal entity may track the old funds and continue to apply the Federal award flexibilities to the funding awarded under the old rules (e.g., local ability to issue fixed price subawards, non-Federal entity determination of the need to incur administrative and clerical salaries based on major project classification). For Federal awards made with modified award terms and conditions at the time of incremental funding actions, Federal awarding agencies may apply the Uniform Guidance to the entire Federal award that is uncommitted or unobligated as of the Federal award date of the first increment received on or after 12/26/14.”

More information about subrecipient monitoring and pass-through entity responsibilities under both the uniform guidance and former OMB circulars can be found in the Thompson’s Federal Grants Management Handbook under ¶452 and Circular ¶452, as well as in the Single Audit Information Service under Tab 800 and Guidance Tab 800.  It’s very important to understand which rule apply. Don’t get caught following the wrong requirements.

Let us know if this has been an issue for you. We’d like to hear from you.

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