Federal Uniform Guidance

The federal Office of Management and Budget (OMB) has made a major change to the underlying guidance by which university recipients of federal awards have operated for decades. OMB combined eight separate circulars, applicable to different types of grantee organizations, into a single document, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” commonly referred to as the Uniform Guidance (UG).  

The three previous circulars applicable to universities are:  A21 – Cost Principles for Educational Institutions, A110 – Administrative Requirements for Grants & Agreements with Institutions of Higher Education, Hospitals and other Non-profit Organizations and A133 – Audits of States, Local Governments and Non-Profit Organizations. There are similar documents applicable to states, local governments and Indian Tribes. The UG includes portions from all of the previous documents as well as new sections and some deletions. While much of it is similar to the previous guidance, there is the potential for both major and minor changes to university recipients of federal awards. In addition, the OMB document is actually guidance to federal agencies and each granting agency must issue its own implementing regulations. Most changes were applicable to new grants and funding increments issues after December 26, 2014. 

The UG encompasses a wide variety of compliance areas, including what constitutes an allowable charge to a federal award, what costs may be included in the Facilities and Administrative Cost Rate, minimum information required in funding announcements, information needed in equipment records, how long record must be retained, requirements for monitoring subrecipients, the frequency and minimum content of programmatic reporting and a host of other topics.    

The University of Kentucky must be compliant with the UG in order to remain eligible to receive federal awards. A Working Group has been formed to review the UG and determine if current university policies and procedures are compliant or if any change is needed. The University community will be kept informed of progress through this website, campus listserv and periodic town hall meetings. Your participation and feedback are encouraged.

The Office of Management and Budget (OMB) has combined many federal circulars into a single guidance document (known as Uniform Guidance or 2 CFR 200) that must be used by all agencies. These new regulations will become effective December 26, 2014. This quick guide highlights select changes in the UG that you should consider in conjunction with the Funding Opportunity Announcement as you prepare proposal budgets for federal sponsors.

Purchasing Threshold

Effective 01/22/19, the dollar threshold for which UG requirements apply increased from $5,000 to $10,000 per order value. Non-contract purchases subject to Uniform Guidance compliance (i.e., federal or state-funded WBS elements) will require competing quotes (3) or Single Source Justification (if applicable) when the overall order value is $10,000 or greater (the previous threshold was $5,000). Other requirements may continue to apply to WBS-based orders in the $5,000 to $10,000 range (e.g., capital GL account for equipment, etc.) 

Administrative and Clerical Salaries - UG Section 200.413

In general, administrative and clerical salaries are normally indirect costs and should not be direct charged. However, it may be appropriate to direct charge administrative/clerical salary if all of the following criteria are met:

1. Administrative and Clerical services are integral* to a project or activity;
2. Individuals involved can be specifically identified with the project or activity;
3. Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency; and
4. The costs are not also recovered as indirect costs

* Integral means: (1) essential to the project’s goals and objectives, rather than necessary for the overall operation of the project or institution. The individuals involved must be specifically identified with the project or activity; AND (2) normally, a minimum of 15% FTE is budgeted in the grant’s budget year.

Prior written approval of the awarding agency must be obtained. If all of these requirements are met, Investigators/departments should add a new justification statement to proposals to facilitate the required agency approval. The budget justification must include a narrative that explains how these services are integral to the project. NOTE: Although NIH modular grants or similar grant instruments do not require line-item justifications, the personnel, including administrative salaries, do need to be described in a modular budget’s justification.

Programmatic Salary Costs - UG Section: 200.430

Costs related to protocol development and maintenance, managing substances/chemicals, managing and securing project-specific data, and coordination of research subjects are allowable direct costs when they are “contributing and directly related to work under an agreement.” Thus, these programmatic costs may be direct charged using the same underlying requirements as other types of direct costs, and are not subject to the extra approval requirements applicable to administrative and clerical costs. They are still subject to all regular costing requirements (e.g.; allocability, reasonableness, allowable by the terms of the award, incurred within award period).

Computing Devices - UG Sections: 200.33, 200.48, 200.89, 200.439, 200.453C

For awards effective 01/22/19 or later, computing devices under $10,000 per unit may be direct charged to the project or activity under the following circumstances: The device is essential* and allocable to the project in that it is necessary to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting and receiving or storing electronic information. The project does not have reasonable access to the other devices or equipment that can achieve the same purpose; devices may not be purchased for reasons of convenience or preference. Items costing $10,000 or more per unit are considered general purpose equipment and follow federal equipment rules for when they can be direct charged.

*Investigators are responsible for determining whether or not the device is “essential” and to what extent the cost of the device is allocable to the sponsored project. Investigators and departments should maintain documentation that describes how the proposed computing device meets the above requirements. The computing devices should be listed in the budget under “materials and supplies” and are subject to Facilities and Administrative costs (F&A).

Participant Support Costs – UG Sections: 200.75, 200.456

Participant support costs (see 200.75) are allowable with agency prior approval. This includes stipends or subsistence allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects. Participant support costs are not routinely allowed on research projects but can be charged if the project includes an education or outreach component and the agency approves such costs.

These costs should be explicitly listed in the proposal budget or approved by the funding agency after the award has been made. These costs must be excluded when calculating the Modified Total Direct Costs (MTDC) to determine the project’s F&A costs.

F&A on Subawards - UG Section: 200.331

subrecipient’s negotiated F&A rate or an alternative rate as described as follows must be used for all subawards included in competitive proposals. If a federal program has a published statutory F&A cap, that rate must be used both by UK and all of its subrecipients. For all other federal programs, if a subrecipient has a federally negotiated F&A rate, it must be used. If the entity does not have a negotiated F&A rate, a 10% MTDC de minimis F&A rate must be used instead. Investigators may not negotiate or agree to lower rates with their subrecipients.

Fixed Amount Subawards - UG Sections: 200.332, 200.201

Agency prior approval is required to enter into a fixed amount subaward rather than a cost reimbursement subaward, and the total value of each fixed amount subaward may not exceed $150K. To expedite agency approval, Investigators/departments should add a new justification statement to a proposal contemplating a fixed amount subaward which addresses why it is appropriate to use this funding mechanism (see 200.201). A statement is not needed for cost reimbursement subawards.

Voluntary Committed Cost Sharing - UG Section: 200.306

Under the UG, funding agencies are prohibited from considering voluntary committed cost sharing in the merit review process. The National Science Foundation specifically prohibits voluntary committed cost sharing in proposals, unless specified in the funding opportunity announcement. Since the federal agencies cannot consider voluntary committed cost sharing in assessing a proposal’s merit, offering it will not increase the likelihood of an award.

Cost sharing means project costs not borne by the sponsor; also known as matching or in-kind contributions. Voluntary committed cost sharing is cost sharing that is not required by law, statute or regulation, nor written in the application guidelines, but was offered by the investigator in the proposal. Voluntary committed cost sharing is recorded in the University’s accounting system and must be reported internally.