Implementing OMB Uniform Guidance

Type: 
Best Practice
Approved by GFOA's Executive Board: 
February 2014
Background: 

In late 2013, the U.S. Office of Management and Budget (OMB) published final guidance in the Federal Register entitled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). This Uniform Guidance supersedes and combines the requirements of eight previous OMB Circulars (A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133) with the intent to streamline the federal grant-making and monitoring process, to ease administrative burden for grant applicants and recipients, and to reduce the risk of waste, fraud and abuse. The Uniform Guidance is located in Title 2, Part 200 of the Code of Federal Regulations.

State and local governments need to take appropriate steps to ensure that they comply fully with the new Uniform Guidance, which sometimes differs in subtle, but important ways from previous guidance.

Recommendation: 

State and local governments should take all of the following steps to ensure they fully comply with the provisions of the OMB’s Uniform Guidance:

  1. The government should communicate to all agencies, departments, and personnel throughout the government that the requirements for Federal Awards have changed. It may be helpful for that communication to specifically state that Title 2, Part 200 of the Code of Federal Regulations (Uniform Guidance) supersedes all of the following OMB guidance:
    1. A-21, Cost Principles for Educational Institutions;
    2. A-87, Cost Principles for State, Local and Indian Tribal Governments;
    3. A-89, Federal Domestic Assistance Program Information;
    4. A-102, Grant Awards and Cooperative Agreements with State and Local Governments;
    5. A-110, Uniform Administrative Requirements for Awards and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations;
    6. A-122, Cost Principles for Non-Profit Organizations;
    7. A-133, Audits of States, Local Governments and Non-Profit Organizations;
    8. Those sections of A-50 related to audits performed under Subpart F—Audit Requirements of Title 2, Part 200; and
    9. For Federal awards subject to 2 CFR, Part 200, all administrative requirements, program manuals, handbooks and other non-regulatory materials that are inconsistent with the requirements of that Part, except to the extent they are required by statute or authorized in accordance with the provisions in 2 CFR Part 200.102, Exceptions.
  2. The government should inform its agencies, departments, and personnel that the Uniform Guidance is first effective for audits for the fiscal year ending December 31, 2015.
  3. The government should determine what monitoring activity may be necessary for any subrecipients that no longer will obtain a Single Audit or a program-specific audit because the Uniform Guidance raised the spending threshold from $500,000 to $750,000;
  4. For subrecipients that will require monitoring, the subaward agreement should include: 1) all of the requirements that must be met by the subrecipient to ensure that the Federal award is used in accordance with Federal statutes, regulations, and the specific terms and conditions of the Federal award; and 2) any additional requirements that the subrecipient must meet for the government to fulfill its own responsibility to the Federal awarding agency, including identification of any required financial and performance reports;
    5. The government should identify what, if any, specific performance measurement requirements relate to a particular Federal award to ensure that the government will be able to comply with them.i
Committee: 
Accounting, Auditing, and Financial Reporting
Notes: 

i A separate section, Part 200.301, Performance Measurement, was added to raise awareness of the emphasis to relate financial data to performance accomplishments of the Federal award. Title 2 CFR, Part 200.210, Information Contained in a Federal Award, includes the following discussion:

(d) Federal Award Performance Goals. The Federal awarding agency must include in the Federal award an indication of the timing and scope of expected performance by the non-Federal entity as related to the outcomes intended to be achieved by the program. In some instances (e.g., discretionary research awards), this may be limited to the requirement to submit technical performance reports (to be evaluated in accordance with Federal awarding agency policy). Where appropriate, the Federal award may include specific performance goals, indicators, milestones, or expected outcomes (such as outputs, or services performed or public impacts of any of these) with an expected timeline for accomplishment (emphasis added). Reporting requirements must be clearly articulated such that, where appropriate, performance during the execution of the Federal award has a standard against which non-Federal entity performance can be measured. The Federal awarding agency may include program-specific requirements, as applicable (emphasis added). These requirements should be aligned with agency strategic goals, strategic objectives or performance goals that are relevant to the program.