In the United States, compliance requirements are a set of directives set by the US federal government agency that summarizes the hundreds of federal laws and regulations applicable to federal assistance (also known as federal or federal assistance). They are currently incorporated into the OMB A-133 Compliance Supplement, created by the Office of Management and the US Budget (OMB).
To facilitate the recipient's compliance with federal laws and regulations, and its annual Single Audit, OMB creates fourteen basic compliance requirements and standards to which the recipient must adhere when receiving and using such federal assistance. OMB also provides detailed explanations, discussions, and guidance about them in the OMB A-133 Compliance Supplement. Compliance requirements are only guidelines for compliance with the hundreds of laws and regulations applicable to the type of special assistance used by the recipients, and their objectives are common due to the large number of federal programs. Each compliance requirement is identified by letters, in alphabetical order.
Video Compliance requirements
Activity allowed or disallowed (A)
This compliance requirement stipulates that each program operates for a specific purpose (such as parental care or children's education), and the funds provided for the program may only be used in activities that are beneficial for the purpose. Therefore, federal assistance provided to the recipient for a particular purpose must be excluded for that purpose only.
Maps Compliance requirements
Principle of allowable cost/cost (B)
This compliance requirement is one of the most important parts, as it includes cost accounting policies, expenditures and expenditures, and actual use of federal funds for managing federal assistance programs. In other words, it provides the foundations and principles that the recipients must adhere to when spending federal funds.
The federal government categorizes recipient types into three groups:
- State, local, and Indian tribal governments
- Higher education institutions
- Non-profit organization
Before December 26, 2014, each group has a separate set of cost principles to follow. The cost principle applicable to the type of recipient applies to all federal assistance received by the entity, regardless of whether the award is received directly from the federal government or indirectly through a pass-through entity.
OMB issues the Principle of Circular Cost for each category. This is a guide to spending federal aid in accordance with laws and regulations:
- OMB Circular A 87, "Cost Principles for Country, Local Government, and Indian Tribes" (2 CFR section 225) - This circle includes 50 United States and District of Columbia (Washington, DC)) , any agency or instrument of these governments - and any territory, parish, municipality, city, city, state designated tribal government, school district, territory and US possession, and any agency or instrument of these governments. li>
- OMB Circular A-21, "Principles of Costs for Educational Institutions" (2 CFR section 220) - All higher education institutions (eg, Colleges, Universities, etc.) are subject to the cost principles contained in the circular this./li>
- OMB Circular A-122, "Principles of Fees for Nonprofits" (2 CFR part 230) - Nonprofit organizations are subject to this circle, except for non-profit organizations listed in OMB Circular A-122, Appendix C subject to principle commercial costs contained in the Federal Acquisition Regulation (FAR).
These three circles contain different types of expenses or expenses (such as travel expenses, maintenance costs, salary, lobbying costs, material purchases, electricity bills, etc.), and specify whether each is allowed or unacceptable. The allowable fees are those determined by the federal government for federal assistance. The unbearable costs are prohibited by the government incurring for federal assistance. Certain cost items are considered universally unacceptable, such as fees associated with illegal activities and lobbying costs, but others may be deemed unacceptable for the type of temporary recipients permitted for other types of recipients. As a general rule, any assistance that is used improperly, such as incurring unbearable costs, requires reimbursement to the federal government.
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for the Federal Award are issued by the Office of Management and Budget on December 26, 2013. This final guide replaces and shortens the requirements of OMB Circulars A-21, A-87, A-110, and A-122 (which has been placed in the OMB guidelines); Circular Letter A-89, A-102, and A-133; and guidance in Circular A-50 on follow-up follow-up from Single Audit.
In order for a fee to be considered, they must be supported by adequate documentation.
Standard documentation - payroll costs
The cost for a federal award for salaries and wages should be based on records that accurately reflect the work performed. These records should be: (i) Supported by an internal control system that provides reasonable assurance that the cost is accurate, permissible, and properly allocated; [2 CFR Ã,§ 200.430 (i)] Documenting the time spent on government-funded activities is usually referred to as Time and Effort Reporting.
Standard documentation - non-payroll costs
The nature of the documentation required for non-payment fees will vary based on the nature of the transaction.
Per 2 CFR Ã,§200.403, Unless permitted by law, fees must meet the following general criteria to be permitted on a federal award basis:
- (a) Necessary and reasonable for federal rewards performance and can be allocated under these principles.
- (b) Subject to any limitations or exclusions set forth in these principles or in federal decisions for the type or amount of cost items.
- (c) Be consistent with policies and procedures applicable uniformly for activities financed by the federal government and other activities of a non-federal entity.
- (d) Must be treated consistently. Fees should not be set for a federal award as a direct cost if other expenses incurred for the same purpose in such circumstances have been allocated to a federal award as an indirect cost.
- (e) Issued in accordance with generally accepted accounting principles (GAAP), except for the state and local governments and Indian tribes only, as defined in this Section.
- (f) Not included as a fee or used to meet cost sharing or matching requirements from other federally-funded programs either at this time or in the previous period.
- (g) Sufficiently documented.
Cash management (C)
This section covers the actual management, or handling, of funds associated with federal programs, in particular about how federal aid is distributed to recipients and how recipients manage funds until disbursement. The actual transfer of funds, commonly referred to as "withdrawals", is usually done electronically by requesting funds to a federal agency through a website or network. Funds are automatically transferred from the US Treasury to the recipient's bank account. The federal assistance for program operations is given to the recipient usually by one of two methods, also called "funding techniques": either with down payment or with reimbursement.
- Advance - A down payment is a federal fund granted to the recipient prior to the program activity. The recipient determines the amount required for future expenditures (eg, through the budget process) and requests the amount to the federal government (or in the case of subrecipients to the pass-through entity, see Sub-Committee Monitoring below). The federal funds received are then issued for certain activities (for example, purchasing goods or services or for payroll). However, laws and regulations require recipients to request funds only when they are needed immediately, and the recipient should try to minimize the amount of time between receipt of funds for actual disbursements. Examples of programs under this funding technique are the Section 8 program and the Community Development Grants program.
- Reimbursement - This funding technique requires the recipient to pay for program spending on their own funds, and then ask for reimbursement for the costs of the federal government or pass-through entities. The recipient prepares and sends a replacement request, and maintains supporting documentation indicating that the requested reimbursement fee is paid before the date of the replacement request. Davis-Bacon Act (D) /h2>
- SF-269 (OMB Agreement No. 0348-0039) or SF-269A (OMB No. 0348-0038), commonly known as the Financial Status Report (FSR) - Used for report the status of the funds (e.g., amount received, amount issued or used, amount ordered, unused amount, etc.)
- SF-270 (OMB No. 0348-0004), also known as Upfront or Replacement Request - - Used to request advance payments and reimbursement of US down payment under a non-construction program.
- SF-272 (OMB No. 0348-0003) or SF-272-A (OMB No. 0348-0003), commonly known as the Federal Financial Transaction Report or Cash Report Status Federal - Provides accountability of all federal cash received by the recipient. This is partially prepared by the Payment Management Division (DPM) within the Department of Health and Human Services based on data reported to DPM by the recipient and federal agent, and completed and certified by the recipient.
As part of the adoption of the Davis-Bacon Act by the US government (DOL), federal regulations require all workers and mechanics working for contractors or subcontractors in federal government-funded construction contracts more than $ 2,000 to be paid wages not less than the DOL set for the project location (ie, the applicable wage). This Compliance Requirement is made to ensure that the recipients require contractors to comply with the Davis-Bacon Act, incorporating in their construction contracts with contractors or subcontractors a clause or requirement to comply with the Davis-Bacon Act and DOL regulations. The clause should also include requirements for contractors or subcontractors to submit to weekly recipients (eg, for each week where contract work is performed) a copy of the construction payroll with accompanying statements of compliance. This report is commonly referred to as "certified payroll", and is often done using the WH-347 Optional Form (OMB No. 1215-0149), a standard form previously designed by OMB.
Feasibility (E)
The main purpose of this compliance requirement is that only qualified individuals or organizations participate in federal assistance programs. While the criteria for determining eligibility may vary from program to program, goals that only qualified individuals or organizations participate consistently across all federal programs, which form the basis of these compliance requirements. To meet this objective, the recipient must first ensure that the appropriate feasibility determination is made, meaning that the recipient must determine parameters and limits to determine eligibility for a particular program in accordance with the program objectives. Many federal programs already contain eligibility requirements under the law, agency regulations, grant agreements, etc., and the recipient must ensure that their eligibility determines their compliance with those requirements. Examples include federal programs that offer HIV/AIDS treatment and require participants to become victims of the disease. It is usually the responsibility of the recipient to determine how to determine the eligibility, such as establishing a policy requiring a physician or home laboratory to diagnose each potential participant, receiving a diagnosis from a doctor or third-party laboratory, etc. However, certain agencies have included specific parameters to be followed by the recipient, as in the case of the Department of Housing and Urban Development (HUD) stating in the Federal Regulatory Code (CFR) that a particular HUD housing subsidy program beneficiary must obtain a specific income verification document to prove eligibility participants, such as the W-2 payroll form, federal income tax refund, etc.
After determining the requirements for participation in the required program, the recipient must also ensure that individual program participants or group eligibility are properly defined by maintaining such compliance evidence, such as maintaining documentation in participant files (eg copy of HIV/Aids diagnosis, copy of federal income tax refund , etc.). Further, the recipient must ensure that only qualified individuals or groups participate in the program by establishing strict programmatic funding controls to avoid unqualified persons receiving special assistance.
Real property tools and management (F)
This section sets out guidance on how the recipient should manage equipment and real property of the federal program.
Equipment management
Equipment means real, non-retrievable properties obtained with federal grants, which have a useful life of more than one year, and the cost of $ 5,000 or more per unit (though, consistent with the recipient's own equipment policy , lower cost limits can be set). Essentially, this section requires that, subject to the rules of the A-102 Common Rule and OMB Circular A-110, the equipment shall be used in federal programs purchased for, or - as appropriate - other federal programs. In addition, the recipient must keep a record of equipment, perform an inventory of physical equipment at least once every two years, and apply appropriate internal control systems to maintain and maintain equipment. When the equipment with the current fair market value of $ 5,000 or more is no longer required, it may be retained or sold, since a proportional share is awarded to the federal government amount from the current fair market value, based on the percent of federal funds to own the recipient's own funds used to buy goods.
Real property management
The title for the real property earned by the recipient with a federal award award with the recipient. It should be used for the original purpose as long as necessary for that purpose. Real property may be used in projects or other programs sponsored by federations that have a purpose similar to the property purchased, provided the federal government allows it. However, he should not dispose of or impose property rights on the actual property without prior federal government approval. When no longer required for federal government supported programs or projects, the recipient must seek disposition instructions from the federal government. Like equipment, if the property is sold, the proportional share is given to the federal government, the amount of current fair market value, based on the percent of federal funds to have the recipient funds used to acquire the goods.
Match, effort level, allocate (G)
This section covers 3 compliance requirements regarding the recipient's performance. They may require that the recipient provide a contribution rate for the federal program, maintain a certain level of performance or achievement, or limit the amount of federal funds used for a particular purpose. Failure to meet these requirements may result in future fund restrictions or termination of assistance. Specific requirements for matching, level of effort, and specific allocation for each federal program, and described in the laws, regulations, and terms of the contract or grant associated with the program.
Matching
Matching, also referred to as "cost sharing", is a requirement for the recipient to make contributions or (usually non-federal) contributions from a certain amount or percentage to complete federal assistance received. In other words, when a recipient participates in a federal program (eg receiving federal assistance) and a prepared operating budget, the federal government may ask the recipient to contribute to covering part of the program's operations. The matching requirement is based on the statement that the total cost of the program is 100% and that, although the federal government provides assistance for most of these costs, the recipients still have to bear some of them. Such proportions are solely determined by the federal government, but usually the recipient decides how the donation is provided and for which costs, as long as the contribution can be verified, are generally not derived from other federal programs, and are considered in the operating budget. Expenditures should be necessary and reasonable, permitted under the cost principle (see section B above), and not used for other federal programs. Adjustments may be in the form of donating funds or the money of the recipients themselves to choose the fees that the program permits (for example, paying utility bills, paying part of the wages of program employees, etc.) or, in some cases, in-kind contributions, non-monetary objects such as services, materials, properties, etc.
Examples of matching include the Head Start program, which requires the recipient to give 20% of the total annual cost either in the form of monetary contributions or goods. The recipient of these funds may contribute money to pay teacher salaries, or perhaps contribute buildings to accommodate the program classes. However, the federal government requires that contributions in the form of goods be respected and properly proven (such as estimating the value of the building to ensure that it meets 20% of the program budget), and certain programs specifically require that matches be made by donating money only.
Attempt level
The level of effort to determine the specific objectives or targets that the beneficiary must receive with the assistance received, and including the terms of the recipient for a particular level of service, the level of expenditure for the specified activity, and federal funds to supplement and not replace non-federal services. Some examples are programs that specify that the recipient should provide medical services to 1,000 patients each day and programs that require the recipient to spend more than 50% of his annual budget for capital projects, among others.
Earmarking
Earmarking is a requirement that determines the amount of limit or percentage of program aid that should (minimum) or possibly (maximum) be used for a particular activity. This example includes restrictions imposed on the federal government on the amount of federal funds to cover administrative costs, or percentage requirements for total program funds granted to subrecipients. Requirements can also be specified in relation to the type of participants covered (eg limits on the number of participants that the beneficiary can provide assistance).
This section establishes the fact that, although the recipient may receive federal awards during their lifetime, an individual federal grant is granted for a specified period of time, usually one year. The federal regulations prohibit the use of funds from grants beyond the prescribed time frame unless authorized by a federal agency, and the auditor should verify that the recipient only issues grants during that time alone. For example, the surplus of a federal award beginning on January 1, 2006 and ending December 31, 2006 can not be used after December 31, as the validity period has expired. This surplus must be returned to a federal agent unless permitted.
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Procurement and suspension (I)
This section covers compliance with laws and regulations when obtaining goods or services from vendors, suppliers, or providers. Procurement requirements are established to ensure that the goods and services are obtained in an effective manner and comply with laws and regulations, including restrictions on conflicts of interest, fair selection of vendors, providing free and open competition among vendors, etc. the terms of suspension and blocking stipulate that certain non-federal entities have been barred from participating in or receiving federal assistance for various reasons, including mismanagement of funds or previous non-compliance with laws and regulations. This prohibition may be temporary (suspended) or unlimited (blocking until specifically authorized by the government). When making this purchase, the recipient must verify that the vendor, supplier, provider or individual offender (eg, owner, top management, etc.) are not suspended, blocked or excluded by the federal government. This is done by examining the Excluded List Systems (EPLS) administered by the General Services Administration or by contacting a federal agency.
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Program revenue (J)
Program revenue is sometimes directly generated by federally funded programs. This type of income includes, but is not limited to, revenue from fees for services performed, use or rental of property obtained with program funds, the sale of goods made under the program, and payments of principal and interest on loans made by the recipient to persons others with program funds. However, it generally does not include interest on program funds (covered under "Cash Management", see above); nor does it cover rebates, credits, discounts, and refunds (covered under "Costs Required/Cost Principles"); or proceeds from the sale of equipment or real property (covered by "Real Property Equipment and Management"). The use or treatment of program earnings is reduced by the federal agency from the current program budget (for example, program revenue substitutes part of the original budget), added to the current program budget, or used to meet the appropriate requirements.
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Real estate financing and relocation assistance (K)
This section covers adherence to Uniform Relocation Assistance and the Real Property Procurement Policy Act of 1970 (URA). It provides uniform and fair treatment to persons who are removed by federal programs from their home, business or farm, including ensuring only compensation and assistance in relocation. For example, if a highway construction under a federal program requires a takeover of a home, a takeover must be made by providing fair compensation for the property or providing assistance for, or reimbursement, relocation costs incurred by the affected person. The Compliance Supplement recommends to verify that the property obtained is assessed by a qualified independent appraiser, the assessment is checked by the review reviewers to ensure acceptance, and that upon acceptance, the review reviewer declares the value of the property recommended or approved for fair compensation of the owner.
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Reporting (L)
This section specifies that all recipients should submit a report (whether financial, performance-related, or special nature) to the federal government to monitor the activities and use of federal assistance. The most common reports previously designed by federal agencies, approved by OMB, and available for free to all recipients and the general public. The delivery deadline for them varies depending on the report. In addition, reporting requirements (eg, which reports should be submitted, delivery times, information in reports, etc.) may vary from recipient to recipient, even though the federal government has made several reports that apply to all recipients. Some of the most common of these "universal" reports include:
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Monitoring sub-commission (M)
This compliance requirement stipulates that any non-federal federal beneficiaries who pass the assistance, in part or in whole, to other recipients (known as forwarding entities and sub-recipients, respectively) are responsible for monitoring the federal assistance activities subrecipient, as well as ensuring that they comply with laws and regulations. This requirement is based on the fact that they are equally responsible for federal funds received. Subproject monitoring may consist of field visits, regular contacts, interviews, meetings and sub-examination checks, and requires that sub-recipients be subject to a single annual audit.
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Special tests and conditions (N)
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