posted April 13, 2017

Uniform Guidance Reminders

by Corey Arvizu, CPA, Managing Partner

The administrative requirements and cost principles of the Uniform Guidance (UG) have now been effective for over two years. Governments may have had procedures in place to address some of the new requirements of the guidance; however there are details of the guidance that warrant some additional discussion. This article will provide some information on a few subtleties of the Uniform Guidance.

Procurement

Uniform Guidance includes more robust guidance for procurements than what was in the prior guidance. Governments likely have procurement procedures in place that exceed the requirements of the Uniform Guidance. However, one item to note are the thresholds for formal procurement procedures. The competitive bidding procedures in the Uniform Guidance begin at $3,000.The requirement allows for relatively simple and informal procurement methods, essentially obtaining more than one quote from any qualified source available. Most governments have competitive procedures that satisfy this requirement but typically not at $3,000, therefore these governments will have a “procurement gap” between $3,000 and their initial competitive procurement threshold. It should be noted that this $3,000 procurement requirements applies only to purchases from Federal funds.

The procurement guidance also includes “integrity rules” which require items such as written standards of conduct for conflicts of interest. Many governments have written standards in place for conflicts of interest, however the UG also includes requirements for mandatory disclosure requirements for violations as well as disciplinary actions for violations.

Time and Effort Reporting

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Identified as “Documentation of Personnel Expenses” in the Uniform Guidance the revised time and effort reporting requirements are intended to reduce the administrative burden of the related recordkeeping. The guidance emphasizes internal controls for time and effort rather than prescriptive documentation requirements. Due to the emphasis by some Federal agencies in recent years regarding time and effort, most governments have implemented robust recordkeeping procedures that they will likely continue under the new guidance. Governments are encouraged however to work with the Federal and pass-through grantors to evolve their time and efforts procedures to reduce the administrative burden as provided in the Uniform Guidance while also satisfying the compliance requirements. One example of this is elimination of the semi-annual certification requirement from the compliance supplement.

The Uniform Guidance was a significant and far-reaching change in the guidance provided to federal agencies and the entities which receive federal funding. Some of the primary objectives of Uniform Guidance are to reduce administrative burden, focus on performance over compliance, and target the risk of fraud waste and abuse. It is too early to assess if these objectives have been accomplished but continued efforts by federal agencies, pass-through grantors, grant recipients and auditors are required. If there are any questions on the above items or any other elements of Uniform Guidance, please contact us.


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