Industry Update: Proposed Rule Changes to A-133

In order to ensure that the public receives the most value for the more than $600 billion tax dollars spent each year, it is essential that Federal grants programs function as effectively and efficiently as possible. To this end President Obama has directed the Office of Management and Budget (OMB) to  work to evaluate potential reforms to Federal grants policies. The OMB has released an Advance Notice of potential reforms and RBP Methods is keeping our ear to the wall in order to stay abreast of this process in order to help keep you informed.

The ultimate goals of the reform are to:

  1. Strengthen the oversight of Federal grant dollars by aligning existing administrative requirements to better address ongoing and emerging risks to program outcomes and integrity.
  2. Increase efficiency and effectiveness of grant programs by eliminating unnecessary and duplicative requirements.
  3. Adopt a risk based model for Single Audits, and provide new administrative approaches for determining and monitoring the allocation of Federal funds.
  4. Eliminate roadblocks to effective performance in carrying out and completing grants and cooperative agreements and to reduce unnecessary ‘‘red tape’’ that is attached to grant monies.

Section A: Proposed Reforms to Audit Requirements

  1. Concentrating audit resolution and oversight on higher dollar/risk awards.
  2. Streamlining the universal compliance requirements.
  3. Strengthening the guidance on audit follow-up for Federal awarding agencies.
  4. Reducing burdens on pass-through entities/sub recipients by ensuring cross-agency coordination.
  5. Reducing burdens on pass-through entities and sub recipients from audit follow-up.

Section B: Proposed Reforms to Cost Principles

  1. Using flat rates instead of negotiated rates for indirect (‘‘facilities and administrative’’) costs.
  2. Exploring alternatives to time-and effort reporting requirements for salaries and wages.
  3. Including the cost of certain computing devices as allowable direct cost supplies.
  4. Allowing for the budgeting for contingency funds for certain awards.
  5. Requesting that the (CASB) increase the minimum threshold for disclosure statements.

Providing non-profit organizations an 1. example of the Certificate of Indirect Costs, and Indirect Cost Proposal Documentation Requirements.

 Section C: Possible Reforms to Administrative Requirements

  1. Creating a consolidated, uniform set of administrative requirements.
  2. Requiring pre-award consideration of each proposal’s merit and each applicant’s financial risk.
  3. Requiring agencies to provide 90- day notice of funding opportunities.
  4. Providing a standard format for announcements of funding opportunities.
  5. Reiterating that information collections are subject to Paperwork Reduction Act approval.

If you’d like more in-depth information in regards to the proposed rule changes to A-133, stay tuned for our upcoming webinar to be held later this summer.