Transcript Overview of OMB Circular A-110

Overview of OMB Circular A-110
Uniform Administrative Requirements for Grants and Agreements
With Institutions of Higher Education, Hospitals, and Other NonProfit 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 into
Four 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.
Cost sharing or matching
(cash or in-kind) must meet
the following criteria:
Verifiable from
recipient's records
Not included as
contributions for
any other federallyassisted project or
program
Necessary and
reasonable based
on project’s
objectives
Accepted contributions
for cost sharing
based on 7-prong criterion
Cost
Sharing
Not paid by the
government under
another award
Provided for in the
approved award
budget
Allowable under the
applicable cost
principle
Conform to other
provisions under
cost sharing
guidelines
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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 noone 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
• 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
Subpart C - Post Award Requirements, cont.
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