OMB New Uniform Guidance Session 7

OMB New Uniform Guidance Session 7


>>WELCOME BACK, EVERYBODY. RODNEY CLEMENTS, AND WE’RE
MOVING FORWARD WITH THE NEXT WEBCAST SERIES NUMBER 7. IT’S COST PRINCIPLES. WE’LL BE COVERING THE GENERAL
PROVISIONS AND THE DIRECT AND INDIRECT COST. AND THE NEXT SEGMENT WE’LL GO
INTO THE SELECTIVE ITEMS OF COST WHICH IS KIND OF INTERESTING. SOME NEW THINGS FOR US FOR OUR
BELONG GRANT RECIPIENTS. LET’S — JUST TO REMIND
EVERYBODY THAT THIS IS PART OF A WEBCAST SERIES. SO THIS IS SEGMENT 7. AND SO WE HAVE TO BROKEN —
WE’RE GOING TO BE COVERING THE E INTO TWO SEGMENTS. THIS IS SECTION 7 AND THEN THE
NEXT WILL BE 8 AND WE’LL COVER 27 THE COST PRINCIPLES. ALSO WANT TO REMIND EVERYBODY
THAT WE HAVE SOME REALLY GREAT TOOLS FOR YOU. WE DISCUSSED EARLIER BUT WE HAVE
THE REDLINE VERSION FOR THE 200 UNIFORM GUIDANCE AND THE UNIFORM
GUIDANCE CROSSWALK FOR THE IHBG, ICDBG. WE HAVE CONFORMING AMENDMENTS
WHICH WE’LL TAKE A LOOK AT HERE SHORTLY. A LOT OF BACKGROUND
IMPLEMENTATION MATERIALS. AS WE GO THROUGH THIS, WE MAY
REFERENCE SOME OF THESE TOOLS AND HAVE YOU LOOK AT THEM. I JUST WANT TO MAKE SURE
EVERYONE REMEMBERS THAT. SO LET’S GO AHEAD AND DIVE IN. AGAIN, THIS SEGMENT IS ABOUT
LOOKING AT WHAT ARE THE CHANGES THAT HAVE BEEN IMPLEMENTED WITH
THE NEW UNIFORM GUIDANCE THAT WE — SOME THINGS THAT ARE NEW
FOR US THAT WE DIDN’T SEE. IF YOU — I HAVE TO SAY IF YOU
ARE NOT FAMILIAR WITH THE A-87 COST PRINCIPLES, IF IT’S NEW TO
YOU, IF THE FORMER WAS NEW TO YOU, IT WILL STILL BE NEW TO
YOU. WE CAN’T BRIDGE THAT GAP. BECAUSE WE’RE FOCUSING TO ALERT
FOLKS AS TO WHAT CHANGED AND IF THERE’S ANY IMPACTS WE NEED TO
BE AWARE OF. WE’RE TO COVER THE BASIC
CONSIDERATIONS 200.400, 411 AND SHORT SEGMENT ON DIRECT AND
INDIRECT COSTS. 412 THROUGH 417. LET’S DIVE RIGHT IN AND SEE WHAT
HAS CHANGED. THE FIRST THING — JUST TO LAY A
LITTLE BIT OF GROUNDWORK BEFORE WE JUMP INTO THE PRINCIPLES, WE
NEED TO TAKE A LOOK AT THE PROGRAM EXCEPTIONS. GO TO YOUR BOOK AND THE DOCUMENT 28
WE’RE LOOKING FOR IS THE CONFORMING ENTERTAINMENTS
SECTIONS. SO WE HAVE COPIES OF THOSE FOR
1,026 FOR THE REGULATIONS THAT DESCRIBES THE ADMINISTRATIVE
REQUIREMENTS AND WE ALSO HAVE A
DOCUMENT THAT’S THE 1,03501 IT’S CALLED APOLITICKIBILITY COST
PRINCIPLES. EFFECTIVE DECEMBER 7th, 2015
THE AMENDMENTS WERE MADE TO CONFORM TO THE CITATIONS FOR THE
UNIFORM GUIDANCE. OKAY. SO EVERYBODY GOT THAT? YOU FOUND THAT? OKAY. WE NEED TO LAY A LITTLE
GROUNDWORK. IF YOU LOOK AT — THIS IS PRETTY
MUCH, THE SAMING WILL FOR IHBG. IT SAYS WITH RESPECT TO THE
APOLITICKIBILITY OF COST PRINCIPLES, ALL ITEMS, WHICH
REQUIRE PRIOR FEDERAL APPROVAL ARE ALLOWABLE WITHOUT THE PRIOR
APPROVAL OF HUD. THAT’S PRETTY — WE’VE HAD THAT
ALL ALONG. THIS IS THE SAME LANGUAGE WE HAD
BEFORE. TO THE EXTENT — AND THAT’S WHAT
YOU NEED TO UNDERLINE — TONIGHT EXTENT THAT THEY COMPLY WITH THE
GENERAL POLICIES AND PRINCIPLES STATED IN PART 200, SUBPART E.
SO THAT’S WHAT WE’RE GOING TO COVER NEXT IS WHAT ARE THOSE
GENERAL POLICIES AND PRINCIPLES THAT WE HAVE TO COMPLY WITH TO
REALLY ACCEPT — REALLY FOR THE COST TO BE DETERMINED ALLOWABLE. THEN IT SAYS AND ARE OTHERWISE
ELIGIBLE UNDER THIS PART AND IT SAYS ACCEPT FOR THE FOLLOWING. [LAUGHTER]
>>SO THERE ARE SOME EXCEPTIONS. HUD IS BASICALLY GRANTING US
PRIOR APPROVAL ON ITEMS OF — 29 SELECTED ITEMS OF COST WHICH
WE’LL BE DISCUSSING LATER EXCEPT FOR THESE. LET’S TAKE A LOOK AT THESE. THESE TWO RIGHT OFF THE BAT, THE
ONLY CHANGE TO POINT OUT TO YOU HERE IS UNDER 436-D-2, THE
DEPRECIATION METHOD FOR FIXED ASSETS SHALL NOT BE CHANGED. IT USED TO SAY WITHOUT THE
APPROVAL OF HUD OR THE FEDERAL AGENCY. NOW IT SAYS PLAINLY JUST THE
FEDERAL AGENCY. 441 FINES, PENALTIES, DAMAGES. A FEW WORDS CHANGED IN THERE. I THINK THE WORD OTHER
SETTLEMENTS WAS ADDED BUT SUBSTANTIALLY JUST THE SAME. AND HERE ARE THE CHANGES. THAT BECAME EFFECTIVE
DECEMBER 7th, 2015. NEW ITEM OF COST. NUMBER 3 FOR BOTH — AND THIS
ONE — NUMBER 3 IS BOTH FOR THE IHBG AND. THE ICDBG EXCEPTIONS. COST OF HOUSING. MAINTENANCE, UTILITIES,
FURNISHINGS RENTS, HOUSING ALLOWANCES REGARDLESS OF WHETHER
REPORTED AS TAXABLE INCOME IS — TO THE EMPLOYEES IS GOING TO
REQUIRE PRIOR APPROVAL. SO WE’LL LOOK AT THIS SELECTED
ITEM OF COST LATER. IT’S I THINK IMPORTED FOR US
FROM THE — I THINK PROBABLY FROM THE INSTITUTE OF THE HIGHER
EDUCATION. THEY ARE TRACKING PROFESSORS AND
SO. YOU SWEETEN THE SALARY PACKAGE
AND YOU PROVIDE COST OF HOUSING AS PART OF THAT PACKAGE. WE’RE GOING TO SEE NEW ITEMS OF
COST THAT WE HADN’T SEEN BEFORE. SO THIS IS ONE OF IT. HUD IS MAKING SURE THAT EVERYONE
UNDERSTANDS THAT THIS IS NOT — 30 THIS DOESN’T HAVE PRIOR
APPROVAL. YOU USED TO GO TO HUD FOR THAT
PRIOR APPROVAL PROCESS. AND THEN 2455 IS ORGANIZATIONAL
COSTS. ANOTHER NEW ITEM OF COSTS THAT
ALSO REQUIRES HUD PRIOR APPROVAL AND IT APPLIES ONLY TO THE
ICDBG. THIS IS THE NO NOT A PRIOR
APPROVAL REQUIREMENT, FOR THE IHBG. ONLY THE ICDBG. ANY QUESTIONS ON THAT. THAT GIVES US THE FOUNDATION. AGAIN, WHAT WE’RE LOOKING FOR
IS, YOU KNOW, WHEN IT SAYS THE — TO THE EXTENT THAT THEY
COMPLY WITH THE GENERAL POLICIES AND PRINCIPLES, WHAT — THERE IS
THE QUESTION I WANT TO ASK RIGHT NOW. WHAT ARE THOSE GENERAL POLICIES
AND PRINCIPLES THAT WE NEED TO LOOK AT? LET’S GO TO 400, 200, 400, TO
BEGIN THIS. SO WHAT YOU WILL SEE — IF YOU
WANTED TO FOLLOW ALONG IN YOUR SIDE-BY-SIDE DOCUMENT, YOU ARE
WELCOMED TO DO THAT. OR IF YOU WOULD RATHER JUST READ
THROUGH AND FOLLOW ALONG, THAT’S FINE. HOWEVER YOU WANT TO REVIEW THAT. THE FIRST THING IS THE NEW
PROVISION IN PARAGRAPH D OF THE POLICY GUIDANCE. SO IT SAYS THE APPLICATION OF
THESE COST PRINCIPLES SHOULD NOT REQUIRE SIGNIFICANT CHANGES IN
THE COUNTY PRACTICES OF THE NONFEDERAL ENENTITY. HOWEVER, THE NONFEDERAL ENTITY
SHOULD HAVE THE FOLLOWING IN PLACE, COUNTY PRACTICES MUST BE
CONSISTENT WITH THESE COST PRINCIPLES AND SUPPORT THE
ACCUMULATION OF COSTS AS 31 REQUIRED BY THESE PRINCIPLES AND
IMPORTANTLY, THE NEXT THING IS BUT PROVIDE FOR ADEQUATE
DOCUMENTATION TO SUPPORT THE COST CHARGED TO THE FEDERAL
AWARD. THIS REALLY FITS WITH WHAT WE
DISCUSSED UNDER SUBPART D FOR FEDERAL MANAGEMENT REQUIREMENTS,
SUPPORT DOCUMENTATION. THAT’S BEEN WITH US ALL ALONG. WE ALWAYS HAVE TO HAVE SUPPORT
FOR EVERY COST THAT WE INCUR FOR THE GRANT, IT HAS TO HAVE
SUPPORTING DOCUMENTATION SO WE KNOW EXACTLY WHAT WAS PURCHASED,
WHAT PROGRAM IT IS SERVING AND FOR WHAT PURPOSE AND HOW MUCH
WAS SPENT. PARAGRAPH E AND G. A COUPLE NEW ONES. IN REVIEWING, NEGOTIATING
APPROVING PLANS OR INDIRECT PROPOSALS, THE AGENCY SHOULD
ENSURE THAT THE NON-FEDERAL ENTITY IS APPLYING THESE COST
PRINCIPLES. WHENEVER A TRIBE IS PUTTING
TOGETHER AN INDIRECT COST PROPOSAL, THEY HAVE TO MIRROR
AND BE IN COMPLIANCE WITH — WITH THE PRINCIPLES. THEY MAY NOT EARN OR KEEP ANY
PROFITS RESULTING FROM FEDERAL FINANCIAL ASSISTANCE UNLESS
EXPRESSLY AUTHORIZED. TWO NEW PARAGRAPHS. AGAIN, THESE ARE JUST POLICY
STATEMENTS. AGAIN, EXPANDING ON THE LANGUAGE
THAT WAS ALREADY THERE AND MAKING MORE CLEAR, YOU KNOW, THE
INTENTION OF THE POLICY. OKAY. LET’S GO 401. THERE’S NOTHING CHANGED IN 401,
I JUST WANTED TO LAY THIS GROUNDWORK IN THE SLIDE BECAUSE
THERE’S CHANGE IN THE NEXT SECTION. 32
JUST TO REVIEW, AGAIN, WE’RE TALKING ABOUT WHAT GENERAL
PROVISIONS THAT ARE — THAT APPLY. IT MUST BE — IN DETERMINING
THESE PRINCIPLES MUST BE USED TO DETERMINES ALLOWABLE COST WORK
PERFORMED UNDER FEDERAL AWARDS IF YOU ARE DETERMINING THE
PRICING OF FIXED PRICE CONTRACTS, SUBCONTRACTS, DOING
COST ESTIMATES, YOU WOULD APPLY THESE PRINCIPLES IN DETERMINING
THE APPROPRIATE PRICE. HERE’S WHERE 4 — 401 IS WHERE
WE HAVE NEW LANGUAGE. SO WHERE THESE COST PRINCIPLES
DO NOT APPLY. SO FIRST ONE A, PARAGRAPH 3,
FIXED AMOUNT AWARDS. SO IN THE EARLIER SECTION WHERE
WE WERE TALKING ABOUT FIXED AMOUNT AWARDS, IT’S A NEW
PROVISION OR CONTRACTING PROVISION WE HAVE. EXCUSE ME. A NEW MANNER OF WHICH WE COULD
RECEIVE AWARDS FROM THE FEDERAL GOVERNMENT OR A PASS-THROUGH
ENTITY MAY GIVE THAT TO THEIR SUBRECIPIENT. THE COST PRINCIPLES DON’T APPLY. THE MAIN THING ABOUT FIXED
AWARDS IT’S NOT BASED ON COST PRINCIPLES. WE’RE GIVING YOU A FLAT AMOUNT
OF MONEY TO ACCOMPLISH AN OBJECTIVE. IF YOU ACCOMPLISH THAT WORK
PERFORMANCE OBJECTIVE, IF THERE’S MONEY LEFT OVER, YOU
KEEP THAT. SO WHAT THIS IS SAYING, COST
PRINCIPLES DON’T APPLY. WE DON’T LOOK AT ITEMS OF COST
UNDER THAT FIXED AMOUNT AWARD. IT’S NOT GOING TO APPLY. WE DON’T HAVE TO LOOK AT THE
PRINCIPLES TO DETERMINE WHAT COST IS ALLOWABLE OR 33
UNALLOWABLE. THE FOCUS IS ON THE OUTCOME, DID
THEY ACHIEVE THEIR PERFORMANCE. A-5 NEW LANGUAGE. OTHER AWARDS WHERE THE
NONFEDERAL ENENENTITY TO ACCOUNT TO THE FEDERAL GOVERNMENT FOR
ACTUAL COSTS INCURRED. AND THERE ARE NONPROFIT
ORGANIZATIONS WHO HAVE SPECIFIC EXEMPTIONS FROM THE COST
PRINCIPLES. OKAY. THAT’S THE CHANGES FOR GENERAL
PROVISION. 402. NOT A BIG CHANGE. SUBSTANTIALLY THE SAME. THE ONLY THING THAT WAS ADDED IN
THIS PARAGRAPH, IS THE SUM. SO DIRECT COSTS IS — THE TOTAL
COSTS ARE ALLOWABLE. DIRECT COSTS MINUS THE CREDITS
EQUALS TOTAL COSTS. THESE ARE JUST TO GIVE US MORE
CLARIFICATION. 405. CAN THIS COST — IT MAY BE A
GOOD THING TO PURCHASE, BUT IS IT THE RIGHT THING TO PURCHASE
FOR THIS GRANT OBJECTIVE AND IT HAS TO BE — IT BE HAS TO BE A
FEDERAL AWARD COST OBJECTIVE THAT BENEFITS A PARTICULAR
BENEFIT OF A FEDERAL AWARD OBJECTIVE. NOT — THERE ARE A LOT OF THINGS
ALLOWABLE. BUT THE NEW LANGUAGE IS SOME
CRITERIA FOR HOW THIS STANDARD IS MET. THIS IS WHAT THEY HAVE EXPANDED
THE LANGUAGE ON AND ADDED THAT IN ORDER TO MEET THE STANDARD,
YOU CAN DETERMINE THAT YOU MET THE STANDARD IF THE COST IS
INCURRED SPECIFICALLY FOR THE FEDERAL AWARD, IT BENEFITS BOTH
THE FEDERAL AWARD AND OTHER WORK AS A NON-FEDERAL ENTITY AND CAN 34
BE DISTRIBUTED PROPORTIONALLY. EVERYBODY HAS TO PAY THEIR FAIR
SHARE. BEING ABLE TO DISTRIBUTE COSTS,
ALLOCATE COSTS, PROPORTION IT TO THE BENEFIT THAT EACH PROGRAM
GETS FROM THAT PROGRAM. AND IS NECESSARILY TO THE
OVERALL OPERATION OF THE NON-FEDERAL — NON-FEDERAL
ENTITY. THIS IS NEW LANGUAGE IN HERE
REGARDING — PARAGRAPH C DISCUSSING WHAT ARE DISALLOWED
COSTS. THIS
MIGHT BE IMPOSED BY TERMS AND REGULATIONS OF THE AWARD. THIS SAYS WE CAN SHIFT COSTS
THAT ARE ALLOWABLE UNDER TWO OR MORE AWARDS IN ACCORDANCE WITH
EXISTINGS FEDERAL STATUTES IF I PURCHASE A PIECE OF LUMBER TO
BUILD A HOUSE, AND IT’S ALLOWABLE. I CAN HAVE THAT EXPENSED OUT OF
MY ICDBG. THIS IS NEW LANGUAGE THAT MAKES
SURE YOU HAVE FLEXIBILITY BEFORE YOU CLOSE OUT YOUR BOOKS TO
SHIFT COSTS UNDER 405. COSTS OF BENEFITS TWO OR MORE
PROJECTS THAT CAN BE DETERMINED WITHOUT UNDUE EFFORT. [ INAUDIBLE ]
>>THIS NEW LANGUAGE, IF NOT, THE COST MAY BE ALLOCATED OR
TRANSFERRED. SO ONE OF THE EXAMPLES OF THAT
IS I.T. COSTS. IT MAY BE SERVING MULTIPLE
FEDERAL PROGRAMS. HOW DO I ALLOCATE THAT COST SO
EACH ONE IS PAYING THEIR FAIR SHARE. THIS IS SAYING ON ANY REASONABLE
BASIS. YOU HAVE TO HAVE IT WRITTEN OUT
IN SOME SORT OF JUSTIFICATION. IT COULD BE WE HAVE — THIS
DEPARTMENT HAS, YOU KNOW, 20 35 EMPLOYEES, 20 — AND THIS
DEPARTMENT HAS 5. THERE’S A REASONABLE WAY TO
PROPORTION THOSE COSTS AND I.T. COSTS. WHERE THE PURCHASE OF EQUIPMENT
OR CAPITAL ASSET IS THE
AUTHORIZED. [ INAUDIBLE ]
>>WE’RE TALKING ABOUT EQUIPMENT. AT SOME POINT WE MIGHT BE
FINISHED WITH THAT PROJECT AND WE CAN DISPOSE OF THAT PIECE OF
EQUIPMENT. WHAT THAT IS SAY I DON’T NEED TO
ALLOCATE THAT COST TO ANOTHER FEDERAL PROGRAM. IT WOULD STAY WITH ORIGINAL
PROGRAM WE PURCHASED. OKAY. AND THEN 407, IF YOU LOOK AT
407, YOU — IF YOU TAKE A LOOK AT IT, YOU CAN SEE THERE’S A
LIST ABOUT THIS LONG OF THINGS THAT NOW REQUIRE PRIOR WRITTEN
APPROVAL. THINGS THAT WE DIDN’T HAVE
BEFORE. SO THIS WILL HELP US APPRECIATE
THE CLAUSE THAT WE HAVE NOW, NOT NOW, BUT THAT WE’VE HAD AND ALSO
FOR ICDBG. CAUSE WHERE HUD IS GRANTING US
FOR ALL OF THE ITEMS THAT REQUIRE PRIOR APPROVAL, WE’RE
GRANTED THAT PRIOR APPROVAL THROUGH THIS LANGUAGE WITH THOSE
EXCEPTIONS THAT WE DISCUSSED. ANY QUESTIONS ON THAT? OKAY. AND THEN 248 THROUGH 249. A COUPLE OF NEW SECTIONS,
CLARIFYING THINGS WE ALREADY KNEW BUT MAKING CAN CLEAR WE
CANNOT CHARGE COSTS ABOVE STATUTORY LIMIT OF THE FEDERAL
AWARD. YOU HAVE 105,000 AND WE CHARGE
125,000, THAT WOULD NOT BE 36 ALLOWED. WHERE DID YOU GET THAT MONEY? WHERE IS THAT COMING FROM? SPECIAL CONSIDERATIONS, 200,
249. THERE ARE CERTAIN I ELSE TERMS
IN THE COST THAT ARE ONLY APPLICABLE TO NON-FEDERAL
ENTITIES. COST ALLOCATION PLANS, INDIRECT
COST PROPOSALS, INNER AGENCY SERVICE, THEY ARE APPLICABLE
ONLY TO STATES, LOCAL GOVERNMENTS AND INDIAN TRIBES. 409 MAKES THAT — CONNECTS THAT
LINK THERE. 410 AND 411, AGAIN, JUST NEW
PROVISIONS ADDED THAT CLARIFY THAT IF WE HAVE
HAVE ANY UNALLOWABLE COSTS, IT MUST BE
REFUNDED OR DEDUCTED, INCLUDING INTEREST TO THE FEDERAL
GOVERNMENT UNLESS WE HAVE A FEDERAL STATUTE OR REGULATION
THAT REQUIRES OR DIRECTS OTHERWISE. AND THEN 411 IS JUST SAYING, IF
YOU HAVE ANY — IT’S LATER DETERMINED THAT WE HAVE
UNALLOWABLE COSTS CHARGED, THEN THAT’S GOING TO HAVE TO BE
ADJUSTED AND REFUNDED BACK TO THE FEDERAL GOVERNMENT. THOSE ARE THE NEW PRINCIPLES
THAT ARE ADDED IN THE BASIC CONSIDERATION OF COST
PRINCIPLES, SORT OF LAYS THE FOUNDATION. SO 413 HERE IS A NEW SECTION ON
DIRECT COSTS. PARAGRAPH C.
THIS WAS ADDED. IT’S IMPORTANT FOR TRIBES WHO
HAVE A LARGE NUMBER OF FEDERAL AWARDS THAT THEY ARE MANAGING
THAT MAY HAVE A FRONT-DESK RECEPTIONIST THAT’S SERVING
MULTIPLE PROGRAMS. THIS CLARIFIES THAT THE SALARIES
OF ADMINISTRATIVE CLERICAL 37 STAFF, THAT THEY CAN BE
CHARGED — WHERE THEY WOULD NORMALLY BE TREATED AS INDIRECT
COSTS. THIS IS CLARIFYING THEY MAY BE
CHARGED AS DIRECT COSTS TO THAT FEDERAL AWARD IF THE FOLLOWING
CONDITIONS ARE MET — THERE’S FOUR CONDITIONS ON THAT. IF YOU CAN DETERMINE THAT THE
CLERICAL SERVICES ARE INTY GALLIAL TO THE PROJECT OR
ACTIVITY THAT, THAT THE INDIVIDUALS INVOLVED ARE
SPECIFIC TO THAT PROJECT OR ACTIVITY, THAT THE COSTS ARE
INCLUDED IN THE BUDGET OF YOUR GRANT AWARD TO COVER THAT COST
IN THIS CASE, IT WOULD BE HAVING THE PRIOR WRITTEN APPROVAL OF
THE FEDERAL AGENCY, IN OUR CASE, WE HAVE THAT PRIOR WRITTEN
APPROVAL AND THEN THAT ALSO — IT’S IMPORTANT THAT THE COSTS
ARE NOT ALSO RECOVERED AS INDIRECT COSTS. WE CAN’T ADD THAT ADMINISTRATIVE
ASSISTANT CHARGE AND — YOU CAN’T DOUBLE DIP. PARAGRAPH D, AND REALLY WE WANT
TO POINT OUT — PARAGRAPH E IS WHERE THE CHANGE IS. THIS SAYS, IF YOU HAVE
ACTIVITIES WITHIN YOUR TRIBE, YOUR ENTITY THAT ARE — WOULD BE
DETERMINED TO BE UNALLOWABLE COSTS, TO — TO THE FEDERAL
AWARD, THIS IS A PROGRAM OR A SERVICE OR A FUNCTION THAT IS —
THAT IS BENEFITING FROM — IT HAS ACTIVITIES THAT INCLUDE THE
SALARIES OF THE PERSONNEL, THEY OCCUPY SPACE, THEY HAVE OFFICE
SPACE, THEY ARE GETTING MAINTENANCE, THEY GET ALL OF THE
SUPPLIES FROM THE CENTRAL SUPPLIES OF THE ORGANIZATION. THEY GET THE I.T. SERVICES THAT
IS SUPPLIED BY THE TRIBE, THIS SAYS IF IT’S UNALLOWABLE, YOU 38
NEED TO INCLUDE THEM IN THE INDIRECT COST NEGOTIATIONS SO
THAT THAT PROGRAM IS PAYING FOR ITS FAIR SHARE OF INDIRECT
COSTS. IF YOU — IF YOU WANT TO LOOK UP
WHAT THE DEFINITION FOR INDIRECT COST IS, YOU WILL NOTICE THAT IT
ALSO HAS FACILITIES AND ADMINISTRATIVE COSTS, THAT’S THE
TERM THAT CAME INTO BEING A WHILE BACK. THIS HAS TO BE THE SAME MEANING
THAT, THAT IF YOU SAY INDIRECT COST FOR — SPECIFICALLY FOR
INSTITUTES OF HIGHER EDUCATION, IT HAS THE SAME MEANING —
FACILITIES ALSO MEANS FACILITIES AND ADMINISTRATIVE COSTS. THE DEFINITION IS TO REFRESH OUR
MEMORY. THESE COSTS ARE ENCOURAGED FOR A
COMMON PURPOSE BENEFITING MORE THAN OBJECTIVE.>>THEY ARE NOT NECESSARILY
ASSIGNED TO ONE. IN AN ACCOUNTING OFFICE, THEY
ARE SUPPLYING CHECKS, THEY ARE MANAGING THE ACCOUNTS FOR
MULTIPLE AWARDS. WE HAVE TO GO, HEY, HOW MUCH
TIME ARE YOU SPENDING WRITING CHECKS OUT FOR THIS AWARD OR HOW
MUCH TIME ARE YOU SPENDING ON THIS AWARD? IF YOU HAD TO TIME TRACK ALL OF
THAT, THE EFFORT TO DO THAT IS DISPROPORTIONATE TO THE RESULTS
ACHIEVED. IT WILL TAKE MORE TIME FOR HER
TO TIME TRACK THAN THE BENEFIT. THAT’S WHY WE PUT THE PERSON IN
THE INDIRECT COST POOL SO WE CAN COME UP WITH A RATE AND THEN
APPLY THAT INDIRECT RATE AND INCLUDE THE TIME FOR WORKING ON
ALL OF THOSE FEDERAL AWARDS. IF DONE RIGHT, WE HAVE THE RIGHT
DIRECT COST RATE, THEN EACH FEDERAL AWARD IS GOING TO PAY 39
ITS FAIR SHARE. THAT’S MY ROUGH AND READY
INDIRECT COST 101. SO IT GOES ON TO SAY THAT
FACILITATE EQUITABLE DISTRIBUTION OF INDIRECT
EXPENSES AND ALL OF THE OBJECTIVES SERVED, IT MAY BE
NECESSARY TO ESTABLISH A NUMBER OF POOLS WITH INDIRECT COSTS. IT DEPENDS ON HOW LARGE YOUR
GOVERNMENT ORGANIZATION IS, YOU MIGHT HAVE A POOL THAT SERVED
MULTIPLE PROGRAMS THAT MAY BE ONE EXAMPLE OF THAT. OKAY. WE GOT THAT LITTLE BACKGROUND
DONE. 414. LET’S SEE WHAT’S CHANGED FOR US
REGARDING WHAT’S THE NEW LANGUAGE FOR US REGARDING
INDIRECT COSTS. THE AGENCY —
THIS IS MAKING IT CLEAR THAT AGENCIES ARE REQUIRED
TO MUST, WE UNDERLINE THE WORD “MUST,” MUST BE ACCEPTED BY ALL
FEDERAL AWARDING AGENCIES. THERE ARE SOME EXCEPTIONS. AND SO IF THERE IS ANY
DEVIATIONS, THAT THEY MUST NOTIFY OMB FOR ANY EXCEPTIONS TO
THAT. AGENCY MUST IMPLEMENT, MAKE
PUBLICLY AVAILABLE THE POLICIES, PROCEDURES AND GENERAL DECISION
MAKING CRITERIA THAT THEIR PROGRAM WILL FOLLOW TO SEEK AND
JUSTIFY DEVIATIONS FROM GAUCHE BATED RATES. SO WHAT THIS IS SAYING IS —
ONCE YOU — WITH YOUR AGENCY, ONCE UP NEGOTIATE THAT RATE,
WHATEVER IT IS, THE FEDERAL AGENCY MUST ACCEPT THAT. THERE’S CHANGES WHEN WE HAD OMB
8 7, WE HAD DIFFERENT AREAS WHERE WE LOCATED THE TEMPLATE
FOR DOING INDIRECT COST PROPOSALS. 40
JUST WANTED TO POINT THAT OUT TO YOU, THEY’VE CHANGED THE
LOCATION. SO THEY ARE IN THE PART 200. SO FOR THE INDIRECT COST RATE
PROPOSALS FOR NONPROFITS, IT’S IN APPENDIX 4. STATE, LOCAL, GOVERNMENT-WIDE
CENTRAL SERVICE COST ALLOCATION PLANS ARE IN APPENDIX 5 AND THEN
MOST IMPORTANTLY FOR US, OUR TRIBES, IS APPENDIX 7, THE
STATE, LOCAL GOVERNMENTS AND INDIAN TRIBES INDIRECT COST
PROPOSALS. IN DOING OUR SIDE BY SIDE, THEY
HAVEN’T CHANGED AT ALL. SO VERBATIM, EVERYTHING WAS THE
SAME RIGHT ACROSS THE BOARD. MAKES IT NICE FOR US. [LAUGHTER]
>>OKAY. AND THEN 414, PARAGRAPH F ON
THERE. WE TALKED EARLIER IN THE SECTION
ON THE TYPES OF AWARDS THAT — AND REQUIREMENTS OF
SUBRECIPIENTS. 10% RATE FOR — OF MODIFIED
TOTAL DIRECT COSTS. THIS MEANS IF YOU HAVE EVER HAD
A RATE, YOU ARE A SMALL TRIBE AND NEVER HAD THAT, THIS IS
SAYING YOU CAN — YOU HAVE THE OPTION TO TAKE 10% OF YOUR TOTAL
MODIFIED DIRECT COSTS. WE DON’T GO INTO THE DEFINITION. BUT THAT ALLOWS US TO THINGS
THAT WOULD DISTORT THE COST. SO IF — WE HAVE A LARGE
CONTRACT, WE WOULD REMOVE THAT CONTRACT FROM OUR DIRECT BASE. SO WE’RE NOT CHARGING
ADMINISTRATIVE COSTS AGAINST THE ENTIRE CONTRACT THAT’S GOING TO
REQUIRE ONE OR TWO CHECKS WRITTEN, SALARIES, SO IF YOU
WANT TO TAKE A LOOK AT THAT, THAT DEFINITION HAS NOT CHANGED. BUT THE MAIN THING HERE IS THAT, 41
YOU KNOW, WE HAVE — IF YOU HAVEN’T HAD THE OPPORTUNITY TO
HAVE AN INDIRECT COST RATE, YOU HAVE THE OPPORTUNITY TO DO THAT
NOW AT A MINIMUM OF 10%. THERE IS AN EXCEPTION FOR TRIBES
OVER 23 MILLION. NOT MANY TRIBES HAVE THAT. BUT YOU WOULDN’T BE ABLE TO USE
THE 10%. YOU WILL NOTICE IN HERE, THE
LANGUAGE, EXPANDED LANGUAGE, EMPHASIZES THE DIFFERENCE
BETWEEN DIRECT AND IN MAKING SURE THAT WE’RE NOT DOUBLE
CHARGING. WE HAVE TO TREAT THAT
CONSISTENTLY. WE CAN’T IN ONE FEDERAL AWARD
PUT THIS AS A DIRECT COST AND ANOTHER PUT IT AS AN INDIRECT
COST. WE HAVE TO BE CONSISTENT SO
WE’RE NOT DOUBLE CHARGING THE GRANT. THE OTHER LAST POINT HERE ON
THIS IN 414, NON-FEDERAL ENTITIES THAT HAS A CURRENTLY
NEGOTIATED INDIRECT COST, NEW LANGUAGE, YOU CAN APPLY FOR A
ONE-TIME EXTENSION OF THE RATE FOR A PERIOD OF UP TO FOUR
YEARS. SO YOU — YOU WOULD BE LOCKED IN
IF YOU TAKE THAT OPTION. YOU ARE LOCKED IN FOR THAT FOUR
YEARS. YOU WOULDN’T BE ABLE TO GO BACK
AND NEGOTIATE IT. YOU HAVE TO KEEP THAT RIGHT. AND AT THE END OF THE FOUR
YEARS, I CAN GO BACK AND RENEGOTIATE A BETTER RATE. THAT’S A NEW PROVISION. AND THAT’S IT FOR THE BIG
PROVISIONS AND THE CHANGES THAT WE’VE NOTICED THAT WILL BE
IMPORTANT TO YOU AS RECIPIENTS
FOR INDIRECT COSTS. THAT’S IT FOR SECTION 7.

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