New Guidance to Cost Principles and Administrative and Audit Requirements

By Kathleen Harris

The most substantive revision of guidance related to the cost principles and administrative and audit requirements of federal awards was published in the Federal Register, December 26, 2013. Full register entry »

While, the effective date of the guidance is December 26, 2013, federal agencies have one year from the date of publication to implement the directives contained in the publication. Thus it will likely be some time after December 2014 before Texas Tech receives awards subject to the new regulations.

Dubbed the “Omni-Circular” and widely referred to as the Office of Management and Budget Circular A-81, the official citation in the Code of Federal Regulations is: 2 CFR Chapter I, Chapter II, Parts 200, 215, 220, 225 and 230, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”

The goal of the new circular is to eliminate duplicative and conflicting guidance by combining eight previous circulars into one. Some highlights of the new guidance are:

• Computing devices may be subject to the less burdensome administrative requirements of supplies (as opposed to equipment),
• Administrative costs (such as clerical and administrative salaries) may be treated as direct costs when they meet certain conditions to demonstrate that they are directly allocable to a Federal award.
• Cost sharing may only be solicited in research proposals when required by regulation and transparent in the notice of funding opportunity. It may never be considered during merit review.
• Federal agencies must accept a awardee's negotiated indirect cost rates unless an exception is required by statute or regulation or approved by the agency head or delegate based on publicly documented justification.
• Notices of funding opportunities must use a standard set of data elements.

A recorded webcast by the OMB/COFAR (U.S. Chief Financial Officers Council on Financial Assistance Reform) “Improving Outcomes by Reducing Red Tape for Financial Assistance” can be accessed here » The approximately 30 minute presentation provides narrative highlights of the history of the circulars, the current reform process, implementation and next steps.

Comments and questions can be submitted directly to COFAR.

Kathleen Harris is senior associate vice president in the Office of Research & Innovation