Purchasing Goods or Services Using Federal Funds

Presented by:

Tracy Arner, M.Ed., CPA

tarner@uga.edu

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At the end of this session, the participant will be able to

• Explain how to locate Title 2 Part 200 of the Code of Federal Regulations

• Recall federal guidance for purchasing goods and services

Learning Outcome

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Uniform Grant Guidance (UGG) Overview

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Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200

Federal Administrative Guidance

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Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200

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www.ecfr.gov

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200

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www.ecfr.gov

Subpart Title

A Acronyms and Definitions

B General Provisions

C Pre-Federal Award Requirements and Contents of Federal Awards

D Post Federal Award Requirements

E Cost Principles

F Audit Requirements

UGG Subparts

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Subpart A- Selected Definitions

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Contract § 200.22

• Legal instrument by which a non-federal entity purchases property or services needed to carry out a project or program under a federal award

Contractor § 200.23

• Entity that receives a contract as defined in § 200.22 replaces term vendor

2 CFR 200 – Subpart A, Select Definitions

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Disallowed costs § 200.31

• Charges to Federal award that the Federal awarding agency determines to be unallowable

Uniform Grant Guidance (UGG) –Subpart A – Select Definitions

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Improper Payment § 200.53

• Payment that should not have been made

• Made for an incorrect amount

• Payments to ineligible party or for ineligible goods or services

• Duplicate payments

• Payments for goods or services not received

• Payment that does not account for applicable discounts

• Payment without adequate documentation for discerning whether payment was proper

Uniform Grant Guidance (UGG) –Subpart A - Select Definitions

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Obligations § 200.71

• Orders placed for property and services, contracts and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period.

Uniform Grant Guidance (UGG) –Subpart A – Select Definitions

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Questioned Cost § 200.84

A cost that is questioned by the auditor because of an audit finding:

(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;

(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or

(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.

Uniform Grant Guidance (UGG) –Subpart A – Select Definitions

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Subpart B – General Provisions

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Conflict of interest– § 200.112

• Federal awarding agency must establish conflict of interest policies for federal awards

• NFE must disclose conflict of interest in writing to the federal awarding agency or PTE

Mandatory disclosures § 200.113

• NFE disclose fraud, bribery, or gratuity violations potentially affecting the federal award

Uniform Grant Guidance (UGG) –Subpart B – General Provisions

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Subpart C – Pre-Federal Award Requirements and

Contents of Federal Awards

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• Non-federal entities are subject to the non-procurement debarment and suspension regulations which restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities

Suspension and Debarment § 200.213

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• www.sam.gov

• Certain companies or individuals have been declared ineligible to receive federal contracts due to violation of federal laws, regulations, or agreements

• SAM – System for Award Management

• Contains roster of debarred companies excluded from federal procurement

Debarred Companies

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www.sam.gov

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Subpart D

Post Federal Award Requirements

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Financial management system - §200.302(a)

• State must expend and account for federal award in accordance with state laws for accounting for state funds

• Financial management system must provide for the preparation of required reports and allow tracing of funds to show they have been used according to the requirements

Subpart D – Post Federal Award Requirements

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TeamWorks Fund Source Chartfield

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10-29 (Federal Restricted Direct)- Fund sources in this range should be used to account for Federal financial assistance received direct from Federal agencies. Federal financial assistance includes grants, entitlements, contracts, loans, and interest subsidies but does not include direct Federal assistance to individuals.

30-39 (Federal Restricted – Indirect) - Fund sources in this range should be used to account for Federal financial assistance received from organizations other than the Federal government for which expenditure restrictions remain intact. Federal financial assistance received from organizations included within the State reporting entity should be accounted for within this fund source range.

State Accounting Office PolicyDirect and Indirect Awards

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§ 200.313(d)

Property records must be maintained that include

• Description

• Serial number or other identification number

• Source of funding

• Including Federal Award Identification Number (FAIN)

• Who holds title

Subpart D – Post Federal Award Requirements

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§ 200.313(d)

• Acquisition date

• Cost of the property

• % of federal participation in project costs

• Location, use, and condition

• Disposition data including

• Date of disposal

• Sales price

Subpart D – Post Federal Award Requirements

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Equipment – §200.313(d)(2)

• Physical inventory at least every 2 years

• Controls to prevent loss, damage, or theft

• Adequate maintenance

• Sale for highest return

Subpart D – Post Federal Award Requirements

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Contract Provisions – §200.326

• Contracts must contain provisions included in Appendix II to Part 200 including

• Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms

• Termination for cause or convenience

• Equal Employment Opportunity

• Davis Bacon Act

• Contract work hours and safety standards

Subpart D – Post Federal Award Requirements

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Contract Provisions – §200.326

• Contracts must contain provisions included in Appendix II to Part 200 including

• Rights to inventions made under contract or agreement

• Clean Air Act

• Debarment and suspension

• Byrd Anti-Lobbying Amendment

Subpart D – Post Federal Award Requirements

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Subpart E

Cost Principles

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§ 200.403

• Necessary and reasonable for performance of federal award

• Conform to any limitations or exclusions

• Consistent with policies and procedures applying uniformly to federally-financed and other activities of NFE

• Consistent treatment of direct costs and indirect costs

• Generally accepted accounting principles based

• Not be used to meet cost sharing or matching requirements of other federal programs

• Adequately documented

Subpart E – Cost Principles Allowability of Costs

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Subpart E – Cost Principles Allocable Costs

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§ 200.405 Allocable Costs• Cost should be assignable in accordance to relative benefits received • Benefits federal and non-federal and can be assigned proportionately• Cost allocated to a federal award may not be charged to other federal

awards to overcome fund deficiencies• Costs benefitting more than one project should be allocated using a

reasonable basis

• Credits received should be credited to the federal award

§ 200.406

• Purchase discounts, rebates, allowances, recoveries or indemnities, overpayment or erroneous charges

• Unallowable costs must be refunded to federal government § 200.410

Subpart E – Cost Principles

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General Provisions for Selected Items of Cost

• § 200.420 – 200.475

• Entertainment Costs § 200.438

• Costs of entertainment, including amusement, diversion, and social activities and any associated costs are unallowable, except where specific costs that might otherwise be considered entertainment have a programmatic purpose and are authorized either in the approved budget for the Federal award or with prior written approval of the Federal awarding agency

Subpart E – Cost Principles

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Fines, Penalties, damages, other settlements § 200.441

Costs resulting from non-Federal entity violations of, alleged violations of, or failure to comply with, Federal, state, tribal, local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the Federal award, or with prior written approval of the Federal awarding agency.

Subpart E – Cost Principles

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§200.458 Pre-award costs

Pre-award costs are those incurred prior to the effective date of the Federal award directly pursuant to the negotiation and in anticipation of the Federal award where such costs are necessary for efficient and timely performance of the scope of work. Such costs are allowable only to the extent that they would have been allowable if incurred after the date of the Federal award and only with the written approval of the Federal awarding agency.

Subpart E – Cost Principles

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200.470 Taxes (including Value Added Tax)

(a) For states, local governments and Indian tribes:

(1) Taxes that a governmental unit is legally required to pay are allowable, except for self-assessed taxes that disproportionately affect Federal programs or changes in tax policies that disproportionately affect Federal programs.

(2) Gasoline taxes, motor vehicle fees, and other taxes that are in effect user fees for benefits provided to the Federal Government are allowable.

Subpart E – Cost Principles

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200.470 Taxes (including Value Added Tax).

(a) For states, local governments and Indian tribes:

(3) This provision does not restrict the authority of the Federal awarding agency to identify taxes where Federal participation is inappropriate. Where the identification of the amount of unallowable taxes would require an inordinate amount of effort, the cognizant agency for indirect costs may accept a reasonable approximation thereof.

Subpart E – Cost Principles

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Other Considerations

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• Eligibility

• Time period

• Expended under grant (disbursed vs PO)

• Specific terms and conditions provided by grantor

Federal Grant Funds Expenditure Considerations

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© 2017 The Carl Vinson Institute of Government. All rights reserved.

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