Transcript EDGAR and OMB Circulars

EDGAR AND OMB
CIRCULARS
Lucy Jones
TRIO Specialist
479-234-9131
[email protected]
ORDER OF PRIORITY
EDGAR 74.2 – DEFINITIONS
 Equipment
means tangible nonexpendable
personal property including exempt property
charged directly to the award having a useful
life of more than one year and an acquisition
cost of $5,000 or more per unit. However,
consistent with recipient policy, lower limits
may be established.
 Prior
approval means written approval by an
authorized official evidencing prior consent.
EDGAR 74.25 – REVISION OF BUDGET
AND PROGRAM PLANS
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(a) The budget plan is the financial expression of the
project or program as approved during the award process.
It may include either the Federal and non-Federal share,
or only the Federal share, depending upon ED
requirements. It shall be related to performance for
program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget
and program plans, and request prior approvals for budget
and program plan revisions, in accordance with this
section.
(c) For nonconstruction awards, recipients shall request
prior approvals from ED for one or more of the following
program or budget related reasons:
EDGAR 74.25 – REVISION OF BUDGET
AND PROGRAM PLANS
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(1) Change in the scope or the objective of the project
or program (even if there is no associated budget
revision requiring prior written approval).
(2) Change in a key person specified in the application
or award document.
(3) The absence for more than three months, or a 25
percent reduction in time devoted to the project, by
the approved project director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs
to absorb increases in direct costs, or vice versa, if
approval is required by the Secretary.
EDGAR 74.25 – REVISION OF BUDGET
AND PROGRAM PLANS
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(6) The inclusion, unless waived by the Secretary, of costs
that require prior approval in accordance with OMB
Circular A-21—Cost Principles for Institutions of Higher
Education . . .
(7) The transfer of funds allotted for training allowances
(direct payment to trainees) to other categories of expense.
(8) Unless described in the application and funded in the
approved awards, the subaward, transfer or contracting
out of any work under an award. This provision does not
apply to the purchase of supplies, material, equipment, or
general support services.
(d) No other prior approval requirements for specific items
are imposed unless a deviation has been approved by OMB.
EDGAR 74.25 – EXPANDED AUTHORITY
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(e) Except for requirements listed in paragraphs (c)(1) and (c)(4)
of this section, the Secretary may waive cost-related and
administrative prior written approvals required by this part and
OMB Circulars A-21 and A-122. These waivers may authorize
recipients to do any one or more of the following:
(1) Incur pre-award costs 90 calendar days prior to award or
more than 90 calendar days with the prior approval of the
Secretary. All pre-award costs are incurred at the recipient's risk
(i.e., the Secretary is under no obligation to reimburse these costs
if for any reason the recipient does not receive an award or if the
award is less than anticipated and inadequate to cover these
costs).
EDGAR 74.25 – EXPANDED AUTHORITY
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(2)(i) Initiate a one-time extension of the expiration date of the
award of up to 12 months unless one or more of the following
conditions apply:
(A) The terms and conditions of award prohibit the extension.
(B) The extension requires additional Federal funds.
(C) The extension involves any change in the approved
objectives or scope of the project.
(ii) For one-time extensions, the recipient shall notify the
Secretary in writing with the supporting reasons and revised
expiration date at least 10 days before the expiration date
specified in the award.
This one-time extension may not be exercised merely for the
purpose of using unobligated balances.
EDGAR 74.25 – EXPANDED AUTHORITY
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(3) Carry forward unobligated balances to
subsequent funding periods.
(4) For awards that support research, unless the
Secretary provides otherwise in the award or in ED's
regulations, the prior approval requirements
described in paragraph (e) of this section are
automatically waived (i.e., recipients need not obtain
prior approvals) unless one of the conditions included
in paragraph (e)(2)(i) of this section applies.
EDGAR 74.25 – EXPANDED AUTHORITY
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(f) The Secretary may restrict the transfer of funds among direct
cost categories or programs, functions and activities for awards
in which the Federal share of the project exceeds $100,000 and
the cumulative amount of the transfers exceeds or is expected to
exceed 10 percent of the total budget as last approved by the
Secretary. The Secretary does not permit a transfer that would
cause any Federal appropriation or part thereof to be used for
purposes other than those consistent with the original intent of
the appropriation.
(g) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j) of this section, do not require
prior approval.
EDGAR 74.34 – EQUIPMENT
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The recipient's property management standards for equipment
acquired with Federal funds and federally-owned equipment
shall include all of the following:
(1) Equipment records shall be maintained accurately and
shall include the following information:
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal
stock number, national stock number, or other identification
number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal
Government.
EDGAR 74.34 – EQUIPMENT
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(v) Acquisition date (or date received, if the equipment was
furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage of
Federal participation in the cost of the equipment (not applicable
to equipment furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the
information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and
sales price or the method used to determine current fair market
value where a recipient compensates ED for its share.
EDGAR 74.34 – EQUIPMENT
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(2) Equipment owned by the Federal Government
must be identified to indicate Federal ownership.
(3) A physical inventory of equipment must be taken
and the results reconciled with the equipment records
at least once every two years. Any differences between
quantities determined by the physical inspection and
those shown in the accounting records must be
investigated to determine the causes of the difference.
The recipient shall, in connection with the inventory,
verify the existence, current utilization, and continued
need for the equipment.
EDGAR 74.34 – EQUIPMENT
 (4)
A control system must be in effect to insure
adequate safeguards to prevent loss, damage,
or theft of the equipment. Any loss, damage,
or theft of equipment shall be investigated
and fully documented; if the equipment was
owned by the Federal Government, the
recipient shall promptly notify the Secretary.
 (5) Adequate maintenance procedures must be
implemented to keep the equipment in good
condition.
EDGAR 74.53 – RECORD RETENTION

Financial records, supporting
documents, statistical records,
and all other records pertinent
to an award shall be retained for
a period of three years from the
date of submission of the final
expenditure report.
(b)
EDGAR 75.730 – RECORDS RELATED TO
GRANT FUNDS
A
grantee shall keep records that full
show:
(a) The amount of funds under the grant
(b) How the grantee uses the funds
(c) The total costs of the project
(d) The share of that cost provided from
other sources
(e) Other records to facilitate an effective
audit
EDGAR 75.731 & 75.732 – RECORDS RELATED
TO COMPLIANCE AND PERFORMANCE
75.731 – A grantee shall keep records to show its
compliance with program requirements.
 75.732 – A grantee shall keep records of
significant project experiences and results.
 The grantee shall use the records to
 (1) Determine progress in accomplishing
project objectives; and
 (2) Revise those objectives if necessary.
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CAN YOU . . .
Carry
forward $10,000
from one year to the
next year?
CAN YOU . . .
Hire
a new advisor for
your project without
prior written approval?
CAN YOU . . .
Purchase
a copy
machine that costs
$2,500?
COST GUIDELINES – OMB CIRCULARS
WHICH OMB CIRCULAR DO I FOLLOW?
Although there are six grant circulars, you are only
covered by three of them, depending on type of entity:
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States, local governments, and Indian Tribes follow:
A-87 for cost principles
 A-102 for administrative requirements, and
 A-133 for audit requirements
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Educational Institutions (even if part of a State or local
government) follow:
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A-21 for cost principles
A-110 for administrative requirements, and
A-133 for audit requirements
Non-Profit Organizations follow:
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A-122 for cost principles
A-110 for administrative requirements, and
A-133 for audit requirements
OMB CIRCULAR A-21 C.
Basic Considerations:
Factors affecting allowability of costs.
a)
b)
c)
d)
Reasonable: Is it defensible? Is it prudent? Is
it necessary?
Allocable: Does it advance your work? Does it
benefit your project?
Consistent treatment: Does it meet
established policies at your institution?
Conform to limitations.
C3. REASONABLE COSTS
A cost may be considered reasonable if the nature of
the goods or services acquired or applied, and the
amount involved therefore, reflect the action that a
prudent person would have taken under the
circumstances prevailing at the time the decision to
incur the cost was made.
C4. ALLOCABLE COSTS
a. A cost is allocable to a particular cost
objective (i.e., a specific function, project,
sponsored agreement, department, or the
like) if the goods or services involved are
chargeable or assignable to such cost
objective in accordance with relative
benefits received or other equitable
relationship.
J.1. ADVERTISING & PUBLIC
RELATIONS COSTS
a. The term advertising costs means the costs of
advertising media and corollary administrative
costs. Advertising media include magazines,
newspapers, radio and television, direct mail,
exhibits, electronic or computer transmittals, and
the like.
 b. The term public relations includes community
relations and means those activities dedicated to
maintaining the image of the institution or
maintaining or promoting understanding and
favorable relations with the community or public
at large or any segment of the public.
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J.1. ADVERTISING & PUBLIC
RELATIONS COSTS (CONTINUED)
c. The only allowable advertising costs are those that
are solely for:
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(1) The recruitment of personnel required for the
performance by the institution of obligations arising
under a sponsored agreement (See also subsection b.
of section J.42, Recruiting);
(2) The procurement of goods and services for the
performance of a sponsored agreement;
(3) The disposal of scrap or surplus materials
acquired in the performance of a sponsored
agreement except when non-Federal entities are
reimbursed for disposal costs at a predetermined
amount; or
(4) Other specific purposes necessary to meet the
requirements of the sponsored agreement.
J.1. ADVERTISING & PUBLIC
RELATIONS COSTS (CONTINUED)
d. The only allowable public relations costs are:
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(1) Costs specifically required by the sponsored
agreement;
(2) Costs of communicating with the public and press
pertaining to specific activities or accomplishments
which result from performance of sponsored
agreements (these costs are considered necessary as
part of the outreach effort for the sponsored
agreement); or
(3) Costs of conducting general liaison with news
media and government public relations officers, to the
extent that such activities are limited to
communication and liaison necessary keep the public
informed on matters of public concern, such as notices
of Federal contract/grant awards, financial matters,
etc.
J.1. ADVERTISING & PUBLIC
RELATIONS COSTS (CONTINUED)
f. Unallowable advertising and public relations costs include
the following:
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(1) All advertising and public relations costs other than as
specified in subsections 1.c, 1.d and 1.e.
(2) Costs of meetings, conventions, convocations, or other
events related to other activities of the institution,
including:
 (a) Costs of displays, demonstrations, and exhibits;
 (b) Costs of meeting rooms, hospitality suites, and other
special facilities used in conjunction with shows and
other special events; and
 (c) Salaries and wages of employees engaged in setting
up and displaying exhibits, making demonstrations, and
providing briefings;
(3) Costs of promotional items and memorabilia, including
models, gifts, and souvenirs;
(4) Costs of advertising and public relations designed solely
to promote the institution.
J.3. ALCOHOLIC BEVERAGES
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Costs of alcoholic beverages are unallowable.
J.9. COMMUNICATION COSTS
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Costs incurred for telephone services, local and
long distance telephone calls, telegrams, postage,
messenger, electronic or computer transmittal
services and the like are allowable.
J.10. COMPENSATION FOR PERSONAL SERVICES
(1)(b) The apportionment of employees’ salaries and wages
which are chargeable to more than one sponsored
agreement or other cost objective will be accomplished by
methods which will:
(1) be in accordance with Sections A.2 & C,
(2) produce an equitable distribution of charges for employee’s
activities, and
(3) distinguish the employees’ direct activities from their F & A
Activities.
J.16. EMPLOYEE MORALE, HEALTH, AND
WELFARE COSTS AND COSTS
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a. The costs of employee information publications,
health or first-aid clinics and/or infirmaries,
recreational activities, employee counseling services,
and any other expenses incurred in accordance with
the institution's established practice or custom for the
improvement of working conditions, employeremployee relations, employee morale, and employee
performance are allowable.
b. Such costs will be equitably apportioned to all
activities of the institution. Income generated from
any of these activities will be credited to the cost
thereof unless such income has been irrevocably set
over to employee welfare organizations.
J.17. ENTERTAINMENT COSTS
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Costs of entertainment, including amusement,
diversion, and social activities and any costs
directly associated with such costs (such as
tickets to shows or sports events, meals, lodging,
rentals, transportation, and gratuities) are
unallowable.
J.18. EQUIPMENT AND OTHER CAPITAL EXPENDITURES
"Equipment" means an article of
nonexpendable, tangible personal
property having a useful life of more
than one year and an acquisition cost
which equals or exceeds the lesser of
the capitalization level established by
the organization for financial
statement purposes, or $5000.
J.28. LOBBYING
a. Notwithstanding other provisions of this
Circular, costs associated with the
following activities are unallowable:
(1) Attempts to influence the
outcomes of any Federal, State, or local
election, referendum, initiative, or similar
procedure, through in kind or cash
contributions, endorsements, publicity, or
similar activity;
J.28. LOBBYING (CONTINUED)
(3) Any attempt to influence (i) the
introduction of Federal or State legislation
(ii) the enactment or modifications of any
pending Federal or State legislation through
communication with any member or
employee of the Congress or State
legislature (including efforts to influence...)
J.30. MAINTENANCE AND REPAIR
Costs incurred for necessary
maintenance, repair or upkeep of
property (including Federal property
unless otherwise provided for) which
neither add to the permanent value of
the property nor appreciably prolong
its intended life but keep it in an
efficient operating condition, are
allowable.
J.31. MATERIAL & SUPPLIES COST
a. Costs incurred for materials, supplies, and fabricated
parts necessary to carry out a sponsored agreement are
allowable.
 b. Purchased materials and supplies shall be charged at
their actual prices, net of applicable credits.
Withdrawals from general stores or stockrooms should
be charged at their actual net cost under any recognized
method of pricing inventory withdrawals, consistently
applied. Incoming transportation charges are a proper
part of materials and supplies costs.
 c. Only materials and supplies actually used for the
performance of a sponsored agreement may be charged
as direct costs.
 d. Where federally-donated or furnished materials are
used in performing the sponsored agreement, such
materials will be used without charge.
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J.32. MEETINGS & CONFERENCES
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Costs of meetings and conferences, the primary
purpose of which is the dissemination of technical
information, are allowable. This includes costs of
meals, transportation, rental of facilities,
speakers' fees, and other items incidental to such
meetings or conferences. But see section J.17,
Entertainment costs.
J.33. MEMBERSHIPS, SUBSCRIPTIONS &
PROFESSIONAL ACTIVITY COST
a.
b.
c.
Costs of the institution's membership in business,
technical and professional organizations are allowable.
Costs of the institution's subscriptions to business,
professional and technical periodicals are allowable.
Costs of meetings and conferences when the primary
purpose is the dissemination of technical information, are
allowable. This includes costs of meals, transportation,
rental of facilities, and other items incidental to such
meetings or conferences.
J.33. MEMBERSHIPS, SUBSCRIPTIONS AND
PROFESSIONAL ACTIVITY COSTS (CONTINUED)
d. Costs of membership in any civic or
community organization are unallowable.
e. Costs of membership in any country
club or social or dining club or
organization are unallowable.
38. PROPOSAL COSTS
Proposal Costs are the costs of preparing bids or
proposals on potential government and
nongovernment sponsored agreements or
projects, including the development of data
necessary to support the institution's bids or
proposals.
Proposal costs of the current accounting period of
both successful and unsuccessful bids and
proposals normally should be treated as F & A
(facilities and administration) costs and allocated
currently to all activities of the institution. (i.e. not
chargeable to the federal grant).
43. RENTAL COSTS OF BUILDINGS AND EQUIPMENT
Subject to the limitations described in
subsections b. through d. of this section,
rental costs are allowable to the extent that
the rates are reasonable in light of such
factors as: rental costs of comparable
property, if any; market conditions in the
area; alternatives available; and, the type,
life expectancy, condition, and value of the
property leased. Rental arrangements
should be reviewed periodically to
determine if circumstances have changed
and other options are available.
J.53. TRAVEL COSTS
General: Travel costs are the expenses for transportation,
lodging, subsistence, and related items incurred by
employees who are in travel status on official business of
the institution.
Such costs may be charged on an actual basis, on a per diem
or mileage basis in lieu of actual costs incurred, or in a
combination of the two, provided the method used is
applied to an entire trip and not to selected days of the
trip, and results in charges, and is in accordance with
institution's travel policy and practices consistently
applied to institutional travel activities.
QUESTIONS. . .
[email protected]
[email protected]