purchasing changes 2 cfr 200.318-320 osu grants & contracts financial administration

OSU Grants & Contracts Financial Administration

Purchasing Changes

2 CFR 200.318-320


Considerations

• Is the purchase grant-related?


General Standards

• Documented Policies• Necessary Purchase

• Redundant• Appropriate

• Dollar Amount• Full and Open Competition• Conflict of Interest• Documentation

• Cost/Price Analysis• Proper Selection Process in vendor Choice


Necessary/Grant-Appropriate/Redundant• Is the purchase allowed• Under federal standards• Approved by Agency

• Budgeted

• Policies in place• Preventing redundant purchases• Lease vs. Purchase Cost Analysis


Federally-imposed hierarchy for Purchases made in support of Federal Grants or Contracts

•< $3,000 Micro Purchases•> $3,000 - $150,000 Small Purchases•> $150,000 Large Purchases (Sealed Bids)•> $150,000 Large Purchases (Competitive Proposal)•Noncompetitive Purchases (All levels)


Micro-Purchases for Federal Grants

•< $3,000—Simply Follow institutional Purchasing Policies.•For the Federal Government’s Benefit,•No bid is required.•No sole-source process is required.


Small Purchases

• Follow Institutional Policy, but• For Purchases >$3,000 but < $150,000 in support of

a Federal Project•Must be able to show that quotes were solicited

(more than one quote)•Or, Prove strategic sourcing (institutional/state

contracts)•Or, justify the rationale for any sole-source


Large Purchases

•> $150,000• Competitive Proposals• RFP with Evaluation Methods• Fixed Price or Cost Reimbursement

• Sealed bid• Construction Projects• Price is a major factor


Sole Source

• What are institutional rules?• Unique?• Public Emergency, or• Authorized by Funding Agency?


Construction Purchases with Grant Funds• > $2,000 must be bid• Follow Davis-Bacon


Things to Watch

• Split purchases• Reallocation of Costs (from Institutional account to Grant Account)• Documentation after-the-fact• Charges to cost-share accounts


Conflict of Interest (CFR 200.318)

• Written Standards of Conduct• Precludes participation if “Real or Apparent” conflict of interest.

• Familial relationships• Financial relationships• Tangible Benefits

• Avoiding solicitation of gifts, favors, or gratuities• Provides for Disciplinary action in cases of violation.


Performance and Financial Monitoring and Reporting

2 CFR 200.327-329


Timing of Financial Reports

• Federal agencies may request financial data specifically limited to the OMB-approved, Government-wide data elements• At least annually• No more than quarterly, except• Unusual circumstances may require more frequent reporting

• Requiring closer monitoring• Specifically to improve program outcomes, or • To coordinate performance reporting


Program Performance

• Non-federal entities are responsible for monitoring program performance (including pass-through/subcontractors/sub-recipients)• Assuring compliance with Federal requirements• Performance expectations are fulfilled

• How do you monitor this now?• How will you monitor it in the future?


Progress Reports

• Performance reports are Progress Reports• Provided by Principal Investigator• Must be submitted/formatted in accordance with OMB and Agency requirements

• Compares accomplishments to stated objectives.• If applicable—why goals were not met.• Explanations of Cost-overruns, significant developments or problems

• Actions taken to correct• Filed at least annually (within 90 days of reporting period)• no more than quarterly (or more frequently in usual circumstances (within 30 days of reporting

period.• Before the anniversary date of a multi-year program, and• Within 90 days after the program’s end date (extension of the due date is at the discretion of the

awarding agency.• Remember – government wide data elements must be included in reports


Construction Performance Grants

• In addition• The non Federal Entity must also provide:

• Onsite technical inspections• Certified percentage of Completion data• Information on significant developments


Federal Agency Prerogatives

• Site Visits

• Waive any performance reporting


Reporting on Real Property

• If the non federal entity is responsible for real property in which the Federal Government retains an interest:

• An annual status report is required (if the interest is less than 15 years)

• If 15 years or greater and the Federal Agency agrees-• the status report may be in multi-year increments not greater than 5 years in length.• Or Annually for the first 3 years of the award and 5 years thereafter


Record Retention and Access (2 CFR 200.333)

• Records must be available for at least three years• Following the date of submission of the final report, or

• The time required for any litigation, claim, or audit---up until final resolution—started prior to the end of the three year period from the date of the final report, OR

• When the non-federal entity is notified in writing by the federal agency to extend the retention period.

• Program Income Accounts• Retains records for 3 years from the end of the fiscal year in which program income was earned

• Real Property/Equipment • Retains records for 3 years after the final disposition of the asset.

• IDC Proposals• 3 years from the date of submission for negotiation• If not submitted for negotiation, 3 years from the end of the fiscal year covered by the proposal


CASH MANAGEMENT

2 CFR 200.305


Written Cash Management 2 CFR 200.305

• Written procedures must describe whether non-federal entity uses: • Advance Payments (preferred)

• Limited to minimum amounts needed to meet immediate cash needs • Reimbursement

• Pass through must make payment within 30 calendar days after receipt of the billing • Working Capital Advance

• The pass through determines that the nonfederal entity lacks sufficient working capital. Allows advance payment to cover estimated disbursement needs for initial period


Written Cash Management 2 CFR 200.305 Continued

• Advances must be maintained in insured accounts• Pass-through cannot require separate depository accounts• Accounts must be interest bearing unless:• Aggregate federal awards under $120K• Account no expected to earn in excess of $500 per year• Bank require minimum balance so high account would not be feasible


Written Cash Management 2 CFR 200.305 ContinuedNEW

Interest amounts up to $500 per year may be retainedIncreases amount by $400 for State and local Gov’tsIncreases amount by $250 for IHE’s and Non-profits

SAME with exception of $500 administrative increaseInterest earned above $500 must be remitted annually to HHS


CASH MANAGEMENT

• Related to Financial Statements• Entities on a cash basis vs. accrual• Payment for expenses with state funds until the federal award arrives• All addressed in the FAQ’s found here:

• https://cfo.gov/wp-content/uploads/2014/11/2014-11-26-Frequently-Asked-Questions.pdf

https://cfo.gov/wp-content/uploads/2014/11/2014-11-26-Frequently-Asked-Questions.pdf

https://cfo.gov/wp-content/uploads/2014/11/2014-11-26-Frequently-Asked-Questions.pdf


NEW CERTIFICATION 2 CFR 200.415

• Official authorized to legally bind the non-federal entity • must certify on annual and final fiscal reports or • vouchers requesting payment

• “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete and accurate and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the federal award. I am aware that any false, fictitious, or fraudulent information or the omission of any material fact, may subject me to criminal civil or administrative penalties for fraud, false statements, false claims, or otherwise.”


200.201(b)(3) (New) Certification of completion atend of fixed price award or subaward

• The non-Federal entity must certify in writing to the Federal awarding agency or pass-through entity at the end of the Federal award that the project or activity was completed or the level of effort was expended. If the required level of activity or effort was not carried out, the amount of the Federal award must be adjusted.• Consistent with section 200.308(c)(3), a reduction of more than 25% of the

level of effort must be reported to the Federal awarding agency and would require an adjustment.• Adjustments would be necessary if the work wasn’t completed or actual costs

are significantly lower than budgeted

purchasing changes 2 cfr 200.318-320 osu grants & contracts financial administration

Documents

financial monitoring

financial data

support of federal grants

construction purchases

small purchases

micro purchases

redundant purchases

large purchases sealed