Uniform Guidance Now Available

As announced earlier, the interim joint final rule implementing the Uniform Guidance (UG) is now available in Federal Register (Vol. 79, No. 244, Friday, December 19, 2014) and can be accessed at https://www.federalregister.gov/articles/2013/12/26/2013-30465/uniform-administrative-requirements-cost-principles-and-audit-requirements-for-federal-awards#h-10.  It is effective for new awards and for selected funding increments, issued on or after December 26, 2014. The document is long, detailed and complex.  While it will be the document that we will refer to in the future (similar to how we currently access A-21, A-110 or A-133), it is not something that most people need to read at this point.  As detailed in previous articles, UGEP (Uniform Guidance, Emory Planning) is a group of Emory Research Administrators who are working together in eight working groups assigned to assess the impact of Uniform Guidance changes on key areas.  These working groups are identifying the areas impacted, determining appropriate strategies to address these issues, and will be revising policies and procedures (as needed).   These working groups will be providing more information about how the changes will impact Research at Emory –and what you need to know.

What does “interim joint final rule” mean?  Is this interim or final?
There is a 60 day comment period.  To offer this 60 day period for comment is standard federal protocol.  Emory has provided comments on this document in the past and we will provide comments on this version as well.  (Whether we will issue our own comments or just include ours in the COGR response is being determined.)  The effective date of this document is December 26, 2014.

Do we now have all of the information that we need from our sponsors to determine the full impact of this on Emory?
No, we do not.  NIH has not yet issued a revised Grants Policy Statement.  Given the large amount of funding we receive from NIH, many of our questions will not be answered until the receipt of this guidance.  We were hoping to receive this in late December but it has not been made available yet.   In addition, we are still awaiting the updated federal Research Terms and Conditions.  Dave Mader, OMB Controller, has reported to COGR that this document is expected to be released in mid to late January.

What are the key changes that come with Uniform Guidance?
The good news is that many of the concepts familiar to us regarding research administration are not changing.  The definition of what constitutes an allowable cost remains essentially the same (i.e., necessary, reasonable, allocable, allowable, and consistently treated). Most costs that were unallowable before remain unallowable now. One of the largest changes now appears to be that certain costs must now be included in your proposal budgets in order to be allowable or they will require agency prior approval after the award has been issued.  However, without having received NIH’s revised Grants Policy Statement, we still are not clear on what the changes will be.

With all this in mind, the UGEP Working Groups have been meeting regularly to understand the general requirements of the Uniform Guidance and can offer the following information at this time.  Please note that when preparing proposals for federal awards, you should refer to the proposal guide that was issued in November and can be accessed at http://ogca.emory.edu/documents/ugep/ug_proposal_guide_11_25_14.pdf

Administrative/Clerical Staff

Administrative and clerical salaries should still not be direct charged in most cases. While the rules governing “major project or activity” exceptions have been dropped (see Section F.6 and Exhibit C of A-21), they have been replaced by the following criteria in § 200.413, all of which must be met:

  1. Administrative or 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.

So the language is different, but the effect is the same.

  • Administrative and clerical staff must be essential to the scientific/programmatic conduct of the funded project.
  • Staff must be appropriately allocated between projects.
  • And in keeping with the requirement of consistent treatment, the services provided by the administrative and clerical staff charged to a Federal award must be unlike the routine services that are provided by administrative and clerical staff charged to institutional funds.

What has changed is that these costs now must have prior approval.  In the past, these costs could be approved via the CAS exception process at Emory.  As Uniform Guidance is currently written, these costs are required to be approved by inclusion in the proposal budget or by written request to the sponsor later in the award (that receives approval).  UGEP is developing draft guidance documents for how this process and charges will be handled in the future at Emory.   If you do intend to charge these costs to a federal award (or year of an award) that was issued on or after December 26, 2014, please ensure that you have sponsor approval for those costs.  Additional guidance will be issued on these topics during January/February of 2015.

Computing Devices

You may have also heard that general purpose computing devices can now be direct charged as a supply cost. Technically, this is true. Indeed, § 200.94 clarifies that a computing device is a supply, provided the acquisition cost is less than $5,000. This does not mean, however, that a laptop, IPad or other computing device can be charged to any federal award. Similar to previous awards issued under A-21, a computing device will only be an allowable expense if it is necessary, reasonable, consistently treated, and properly allocated.

In plain language, this means the computing device must be:

  1.  Essential for the purposes of carrying out a specific aim of the funded project,
  2.  Above and beyond what is normally provided by the department for academic use, and
  3.  Charged to the grant in some reasonable proportion relative to how much it is used for the funded project.

We recommend explicitly addressing these unlike circumstances in your budget justification. While we do not believe that a specific approval process will be required at Emory for these purchases (similar to our past required CAS Exception process), PIs and administrators should maintain documentation that describes how the proposed computing device meets the above requirements.

Participant Support Costs

Now here is something new! Under A-110, the transfer of funds allotted for training allowances (direct payments to trainees) to other categories of expense required prior approval from the Federal awarding agency. While the Uniform Guidance retains this prior approval requirement (see § 200.308), it has changed the terminology to participant support costs, defined as “direct costs for items 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” (see § 200.75).

In addition, § 200.456 of the Uniform Guidance now states that participant support costs are allowable with the prior approval of the Federal awarding agency. In other words, we now have the added burden of getting prior approval to transfer funds into the participant support cost line as well as to transfer funds out of the participant support cost line! (Note it is likely your proposal guidelines will state whether participant support costs are allowed under the program to which you are applying.) So be extra sure to explicitly include participant support costs in your budget if you need them or you will be required to get sponsor approval later.

In addition, participant support costs will have to be segregated in a separate sub-project grant with a 0% indirect cost rate when they are included as part of an award that is recovering indirect costs.

Facilities & Administrative Costs

The change to note regarding Facilities & Administrative Costs (i.e., F&A, indirect costs, IDC etc.) is that our subrecipients can either use a de minimus F&A rate of 10% of Modified Total Direct Costs or ask to negotiate a rate with Emory, if they do not have a Federally negotiated F&A rate of their own. Except under exceptional circumstances, OGCA will use the former. As before, we will honor the federally negotiated F&A rate of our subrecipients, if they have one.

A Word about NIH Modular Budgets

There is something of a conflict between the Uniform Guidance and the non-specific nature of NIH modular budgets. In modular budgets, funding is requested in modules of $25,000 total direct costs, without specific budget line items. The budget narrative only addresses personnel (by position, role, and level of effort) and any consortium/contractual arrangements. An additional narrative is only required if the number of modules requested varies from year to year. Thus, adherence to the instructions for submitting a modular budget leaves you no opportunity to follow the Uniform Guidance requirement that certain costs have prior written approval or be explicitly included in the budget in order to be allowable. The full list of such costs is provided in § 200.407. Until NIH provides an update to its Grants Policy Statement and modular budget instructions, please be advised that any such costs will likely require NIH approval after an award has been made.

A Word about Procurement

Some of the biggest and most far-reaching changes brought about by the Uniform Guidance are related to procurement. High on the list is the requirement that all procurements above the micropurchase threshold of $3,000 must be competitively bid. Compliance with this new requirement will be burdensome for many institutions involving changes to policies, business processes, and computer systems, so the Office of Management and Budget has granted a one year grace period to allow extra time for a systematic implementation. However, Emory is expected to be in compliance with the changes within the next couple of months.  While there may be some additional burdens, the enhanced tools being offered are expected to streamline processes and reduce burdens in other areas.  It is hoped that these changes will result in minimal impacts and that the additional tools will provide strong benefits.  Further communication will be coming from Procurement over the upcoming months.

Next Steps

UGEP continues to meet regularly and will be working with Emory’s leadership to discuss recommendations and finalize some of the proposed changes (some of which are discussed above).  Additional communications will also be shared as the NIH revised Grants Policy Statement and the federal Research Terms and Conditions are both published.

As further information is provided and decisions are made, further communication will be provided.  Guidance will be shared via the Research Administration Listserv.  A presentation on Uniform Guidance will be provided at ERAZ (Emory Research A to Z, a forum for Emory Research Administrators) on January 15.  Other presentations will be announced.  Two Emory guides are currently being developed (one for researchers and one for administrators).

If you have questions or concerns, please address them to Kerry Peluso at kpeluso@emory.edu.

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