Important Changes in the UG
This page describes specific differences between the Uniform Guidance and its predecessors, Circulars A21, A110, and A133. UMCP’s implementation or policy changes resulting from the UG are also discussed.
Click on any of the links below to find out more about changes resulting from the Uniform Guidance.
Restrictions on voluntary committed cost share
Only Cost Share When it is Required by the Solicitation
Cost Sharing or Matching: (As definefd by 200.29) is the portion of project costs not paid by Federal funds unless otherwise authorized by Federal statute. All cost sharing must be tracked and maintained in a separate account.
Voluntary Cost Sharing: (As defined by 200.99) is specifically pledged on a voluntary basis in the proposal’s budget or the Federal award on the part of the non-Federal entity and that becomes a binding requirement of the Federal award.
Section 200.306 specifies that cost sharing or matching should only be solicited for research proposals when required by regulation and transparent in the notice of funding opportunity. Voluntary committed cost sharing is not expected under Federal research proposals and is not to be used as a factor in the review of applications or proposals unless it is specifically stated as such in the announcement. Only mandatory cost sharing or cost sharing committed in the budget must be included in the research base for computing F&A cost rate.
Shared costs, matching funds, and contributions must meet certain criteria to be accepted as cost sharing. In particular, salary costs above a Federal awarding agency’s cap are not mandatory cost-share or match. For more information on the criteria for cost-sharing allowability, go to Section 200.306.
For more information on cost sharing transparency in funding opportunities, go to Appendix I to Part 200 – Full Text of Notice of Funding Opportunity; E. Application Review Information, 1. Criteria – Required.
Impact at the University of Maryland:
- UMCP’s Cost Sharing Policy is consistent with these requirements.
- Research proposals for federal grants must only include cost sharing when it is required by the solicitation.
- Any funded award with cost sharing is required to maintain a separate KFS account for costs to be counted as cost sharing.
- The F&A waiver on the first $25K to either UMB or UMCP under MPowering The State proposals is rescinded.
Definition of Allocable Expanded from “Solely” to “Specifically”
Section 200.405 language in the guidance changed from “incurred solely for the Federal award” to “incurred specifically for the Federal award”. Federal funds cannot be used to overcome deficiencies or reasons other than those specified at the time of the award. If an incurred cost benefits two or more projects, the cost should be allocated proportionately; costs for equipment purchased under an award are allocable regardless of the use of the equipment when it is no longer needed.
Impact at the University of Maryland:
- UMCP will carefully analyze fair and appropriate direct cost allocation methodologies.
Expenditures that now require agency pre-approval
Items Requiring Pre-Approval
Section 200.407. Specifies that the institution may want to seek prior written approval to avoid subsequent disallowance or dispute based on unreasonableness or nonallocability. Many items require pre-approval. For the full list, go to Code of Federal Regulations - Title 2 Section 200.407.
Changes have been made regarding the following items requiring pre-approval:
- Revisions to the budget or program plan. See also Making Changes.
- Overloads (Section 200.430)
- Cost increases for fluctuations in exchange rates (Section 200.440). See also Foreign Activities.
- Participant support costs (Section 200.456). See also Participant Costs.
Impact at the University of Maryland:
- Any costs that you anticipate incurring during the performance of your research project should be included in your proposal budget and budget justification.
- Post-award changes to costs requiring pre-approval must be requested in writing before the change is made. Contact your ORA Contract Administrator for more information.
- ORA has issued Guidelines on Overloads involving Federal or Federal Flow-through Funds.
Conflict of Interest Disclosures to be Agency-Specific
Conflict of Interest: Federal agencies have specific policies on this that are appropriately tailored to the specific nature of their programs. Section 200.112 requires Federal agencies to have policies on conflict of interest in Federal awards and requires non-Federal entities to disclose in writing any potential conflicts of interest (in accordance with applicable policies) to the Federal awarding agency or pass-through entity. COFAR FAQ .112-1 specifies that this clause refers to conflicts related to how decisions are made for selecting subrecipients or procurement contracts.
Impact at the University of Maryland:
The impact at UMCP will remain an open issue until individual federal agencies have published their Implementation Plans.
License Fees and Royalties covered by Bayh-Dole exempt from Program Income
Policy Guide on Profit (200.400). Entities may not earn or keep profit resulting from Federal financial assistance, unless expressly authorized by the terms and conditions of the Federal award.
Program Income (200.307). The Uniform Guidance does not include language limiting the treatment of licensing/royalty revenue as program income (A-110, .24(h)), which is inconsistent with Bayh-Dole Act. In FAQ .307-1, COFAR clarified that “U.S. law or statute takes precedent over the Uniform Guidance.” Therefore, income from license fees and royalties on research funded by a Federal award should be excluded from the definition of program income.
- Budget preparation and cost principles
Participant Support Costs Must be tracked in a Separate Account
Section 200.75. Participant support costs are direct costs such as stipends or subsistence allowances, travel 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 should be excluded from the MTDC. See also MTDC.
Impact at the University of Maryland:
- UMCP already requires projects to track participant support costs in a separate KFS account. Read ORA’s Guidance on Participant Support Costs.
Direct costs – clerical and administrative
Administrative Costs may be charged as Direct Costs under Certain Conditions
Administrative Costs as Direct Costs. Administrative or clerical salaries and expenses are allowed as direct costs when the activities are integral to a project, can be specifically identified, are included in the budget or have prior approval, and are not also recovered as indirect costs (Section 200.413 and 200.430). “Integral” is defined as essential to the accomplishment of the project’s goals and objectives, rather than necessary for the overall operation of the institution.
Impact at the University of Maryland:
- Grant applications submitted before 12/26/14 should be developed in accordance with the Uniform Guidance.
- In order to charge administrative and/or clerical costs to federally sponsored agreements, a determination must be made by ORA and SPAC to designate the administering unit as either an Organized Research Unit or a specific project as a Significant Project. Read more on Administrative Cost Designations.
Computing Devices allowed as a Supply – Chargeable as a Direct Cost
Cost of Computing Devices: Section 200.453 allows computing devices to be charged as direct costs if they are essential and allocable, but not solely dedicated, to the performance of a Federal award.
Section 200.20 defines a computing device as a “machine used 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.” To be considered a supply cost, the cost of the computing device may not be equal to or exceed $5,000.
Impact at the University of Maryland:
- Computing devices should be itemized in your proposal budget and their use in the project clearly justified in the budget justification.
- The project must not have reasonable access to other devices or equipment that can achieve the same purpose. Devices may not be purchased for reasons of convenience or preference.
Fringe benefits (accumulated leave)
Payouts for Accumulated Leave and Compensation Claims are Allowable
Section 200.431. The cost of compensation paid to employees for authorized absences, payments for unused leave when an employee retires or terminates employment, and actual claims for workers compensation, unemployment compensation, severance pay, and similar benefits are allowable as indirect costs. Cost must be recognized in the period that the leave is taken and paid for when the entity uses the cash basis of accounting.
Impact at the University of Maryland:
- UMCP does not currently charge federal awards in these instances when it creates an inequity.
Publication Costs after the Period of Performance are Allowable
Publication and Printing Costs: Section 200.461 clarifies that non-Federal entities may charge the Federal award before closeout for the costs of publication or sharing of research results if the costs are not incurred during the period of performance of the Federal award.
Impact at the University of Maryland:
- In developing your proposal, make sure that the costs for publication and printing are specified in the budget. The budget justification should include an explanation of why the costs will be incurred post-award.
- Departments must work with SPAC regarding the charging of these costs after the termination of the award. Costs must be charged within 90 days of termination.
Short-term Travel Visas for Recruitment are Allowable as Direct Costs
Short-term travel visas in connection with recruitment efforts are allowable as direct costs provided they can be clearly identified as directly connected, critical and necessary to the project. (Section 200.463 Recruiting Costs (d)).
Impact at the University of Maryland:
- Departments must maintain documentation supporting this cost in accordance with the UG requirements.
Travel Costs for Conferences
Family-Friendly policies in regards to travel costs: Section 200.474 has been amended to allow the cost of identifying, but not providing, temporary locally-available dependent care resources for travel to conferences. If the institution implements a policy that these costs are allowed, the policy must be implemented consistently across all sources of funds. Travel costs for dependents are unallowable, except for travel lasting 6 months or more. Must have prior approval from the awarding agency. (Section 200.474(2)).
Conference Costs: Section 200.432 confirms that costs associated with intra-campus meetings are unallowable.
Impact at the University of Maryland:
- UMCP does not currently have a policy which allows for the direct charging of costs associated with identifying dependent care resources for travel to conferences.
Allowable Expenses for Foreign Activities
Exchange Rates: Cost increases due to fluctuations in exchange rates are allowable subject to the availability of funding and prior approval. The institution must review local currency gains to determine the need for additional funding before the expiration date of the award. (Section 200.440).
Value Added Tax (VAT) is an allowable expense if it is charged for the purchase of goods or services and the non-Federal entity is legally required to pay in country. Any refunds or applicable credits resulting from the payment of VAT taxes must be credited to the awarding agency (Section 200.470).
Impact at the University of Maryland:
- If applicable, additional documentation for foreign subrecipients may be needed to demonstrate requirement ‘to pay in country VAT tax’.
New Exclusions from MTDC
Modified Total Direct Cost (MTDC) should only include salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants up to the first $25,000 of each subaward (regardless of the period covered). Specifically excluded from the MTDC are equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. (Section 200.68) The Uniform Guidance further excludes participant support costs and rental costs.
Impact at the University of Maryland:
- UMCP already requires projects to track participant support costs in a separate KFS account. Read ORA’s Guidance on Participant Support Costs.
- The MTDC is the basis by which Facilities and Administrative (F&A) costs are charged to federal awards. F&A rates are negotiated campus-wide. Read more on F&A Costs.
Making a change to my program plan or budget after award
Change Requests Handled by Your ORA Contract Administrator
Budget Revisions must receive prior approval. (Section 200.308) These include:
- Changes in the amount of approved cost-sharing.
- Transfer of funds budgeted for participants support costs to other categories of expense.
- Subawarding, transferring, or contracting that was not described in the application and funded in the approved award, except for supplies, materials, equipment, or general support services.
Disengagement from the project for more than three months or a 25% reduction in time devoted to the project by the approved project director or principal investigator requires prior approval. Disengagement refers to the level of the PI’s involvement with project activities, not the PI’s actual presence on campus.
Other Modifications Requiring Pre-Approval are the Same. Modifications that continue to require pre-approval (under the OMB Circulars and the Uniform Guidance) are: change in the scope or objective of the project, change in key personnel specified in the application, and the inclusion of costs that require prior-approval.
Section 200.308(d). Prior written approval for certain costs can be waived by the agency.
Impact at the University of Maryland:
- To initiate a change in your program plan or budget after award, contact your ORA Contract Administrator.
Procurement Standards
Effective Dates for Procurement (Section 200.110). Per COFAR published FAQ 200.110-6 (link is external), the federal government provided a grace period for non-Federal entities to comply with the procurement standards in the Uniform Guidance. The grace period is for one full fiscal year that begins on or after December 26, 2014. The grace period has since been extended for additional years (See rule), providing additional time for non-Federal entities to implement changes to their procurement policies and procedures in accordance with guidance on procurement standards. For the latest information on this issue, see the General Procurement Standards under Open Issues.
General Procurement Standards must be followed when procuring property and services under a Federal award (i.e. costs that are charged directly to an award). These standards do not apply to procurements made in indirect cost areas. Section 200.318 (link is external) includes the following provisions:
- .318(d): The non-Federal entity’s procedures must avoid acquisition of unnecessary or duplicative items. No specific equipment screening procedures are required (FAQ 200.318-1 (link is external)).
- .318(f): The non-Federal entity is encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project cost.
- .318(i): The non-Federal entity must maintain records sufficient to detail the history of procurement. May include: rationale for method of procurement, selection of contract type, contractor selection/rejection, and basis for the contract price.
Methods of Procurement (Section 200.320 (link is external)) divides procurement into one of 5 types. See also OMB Procurement Claw (link is external).
- Micro-Purchase: Acquisitions not to exceed $3,000. Micro-purchases must be distributed equitably among qualified suppliers. Competitive quotes are not required if price is considered reasonable.
- Small Purchase: Acquisitions costing $3,001-$150,000 (Simplified Acquisition Threshold). Rate quotes must be obtained from an adequate number of qualified sources. Cost or price analysis is not required.
- Sealed Bids: Acquisitions costing $150,001 or more (Simplified Acquisition Threshold) where price is the most important determining factor. Procurement results in a firm fixed price contract to the lowest bidder who conforms to all terms and conditions. Preferred for construction projects.
- Competitive Proposals: Acquisitions costing $150,001 or more (Simplified Acquisition Threshold) where contract is awarded through technical evaluation of proposals. Procurement can result in a fixed price or cost reimbursement contract.
- Sole Source: Use of sole source procurement is limited to certain circumstances. See Section 200.320 (link is external)(f). Researchers may acquire items through sole source for scientific reasons, as long as it complies with the General Procurement Standards (200.318), particularly the documentation requirements (200.318(i)). (FAQ 200.320-2 (link is external))
Impact at the University of Maryland:
- The University of Maryland College Park will continue to follow the procurement requirement of OMB Circular A-110 and will utilize the grace period allowed in the Uniform Guidance and as extended by the Office of Management and Budget technical corrections. The procurement standards in the Uniform Guidance become effective at the University on July 1, 2018.
- For more information on purchasing with sponsored funds, go to: http://www.purchase.umd.edu/sponsored_funds_guidelines.html (link is external)
- Subrecipients
Including subrecipients in my proposal
Contractor vs Subaward
Elimination of the term Vendor and replaced with Contractor. See Sections 200.22 Contract, 200.92 Subaward, and 200.330 Subrecipient and Contractor Determinations. Determination must be documented.
- Subaward: A subaward is for the purpose of carrying out a portion of the Federal award and creates a Federal assistance relationship with the subrecipient. Subawards are subject to F&A up to the first $25,000 of the award for the entire period of performance.
- Contractor: A contract is for the purpose of obtaining goods and services and creates a procurement relationship with the contractor. The entire contract amount is subject to F&A.
Subrecipients: De Minimis indirect cost rate (F&A) of 10% of MTDC should be applied to non-federal entities without a negotiated indirect cost rate (F&A) (Sections 200.210, 200.331, and 200.510).
Fixed Amount Subawards. (200.332). With prior approval, fixed amount subawards may be awarded up to the Simplified Acquisition Threshold.
Impact at the University of Maryland:
- Your contract administrator can help you make the determination of whether a subrecipient is a subaward or a contractor. Read more on Subawards and Procurement in the Uniform Guidance.
contract terms and conditions
Terms and Conditions for Subrecipients
Uniform Guidance is Applicable to Subrecipients: Subrecipients receiving flow down from a federal award are subject to the Uniform Guidance. (Section 200.101).
Subcontracts under Federal Awards: Contracts over the Simplified Acquisition Threshold ($150,000) must address contract breach. Contracts in excess of $10,000 must address termination for cause. (Appendix II to Part 200 – Contract Provisions for Non-Federal Entity Contracts under Federal Awards).
Federal cost-reimbursement contracts awarded under the FAR are subject to Subpart A, Subpart B, Subpart D (Post Federal Award Requirements and Subrecipient Monitoring and Management), Subpart E and Subpart F.
Impact at the University of Maryland:
- Contracts for subrecipients of federal awards administered by UMCP will include specific terms and conditions applicable to the Uniform Guidance. Read more on Subawards.
Pass through Entities Must Assess Risk
Section 200.331(b). Entities receiving federal awards who then subaward to other entities must consider the risks associated with that subaward combined.
Impact at the University of Maryland:
- Risk assessments for all subrecipients of federal awards will be conducted by ORA’s subaward unit. Read more on Subawards.
Monitoring Required by Section 200.331 Mostly Unchanged
Oversight should be based on the consideration of risk (see above).
Monitoring should include the review of performance and financial reports required of the subawardee to meet the requirements of the federal award.
When Deficiencies are Identified: The subrecipient should take timely and appropriate action to correct deficiencies pertaining to the federal award. Unresolved deficiencies may result in the issuance of a management decision for audit findings. (Section 200.521)
- Reporting Requirements
Effort Reporting Premised on Strong Internal Controls
Section 200.430(i). Emphasis on documenting salary charges to federal awards using a system premised on strong internal controls which provides reasonable assurance as to the accuracy of the information. The institution’s official payroll system should be the basis for confirming payroll charges to federal awards.
Impact at the University of Maryland:
- UMCP will continue to track effort via the UMCP Effort Reporting System.
Retain Records for 3 Years after Closeout. Electronic Retention is Preferred.
Record Retention. Section 200.333 clarifies the requirement that records be retained for three years from the date of submission of the final expenditure report and permits the federal agency to extend the retention period if notified in writing.
Storage of Information. Section 200.335 (c) makes clear that electronic, open, machine readable information is preferable to paper as long as there are appropriate controls in place to safeguard from alteration of records.
Impact at the University of Maryland:
- The UMCP record retention policy is in compliance with this requirement.
Stronger Closeout Requirements and Enforcement Techniques
Subpart D - Subtitle VII Closeout. Section 200.343 – provide all reports and liquidate all obligations incurred within 90 days. Includes subrecipient invoices and cash payments.
Section 200.201: Requires that the institution certify that project was completed and/or level of effort was expended. If not carried out fully, the award will be adjusted.
Enforcement Techniques:
- Withholding future awards
- Inability to draw down funds beyond 90 calendar days after award end date
Increase in the Single Audit Threshold and Remedies for Noncompliance
Subpart D - Subtitle VII Remedies for Noncompliance. Section 200.339 allows the termination of funds for cause.
Section 200.501 Audit Requirements raises the Single Audit Threshold from $500,000 in Federal expenditures per year to $750,000 in Federal expenditures per year. This reduces the audit burden for approximately 5,000 non-Federal entities while maintaining Single Audit coverage over 99% of the Federal dollars currently covered.
Impact at the University of Maryland
- Additional risk assessment tools required for subrecipients under Single Audit threshold ($750k)
Questions?
Contact your ORA contract administrator for technical questions or SPAC for financial matters.