Download - Reducing Red-Tape to Improve Outcomes The Council on Financial Assistance Reform Initiatives March 12, 2014.

Reducing Red-Tape to Improve OutcomesThe Council on Financial Assistance

Reform Initiatives

March 12, 2014

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Increase in Federal Grants Activity

$7B$24B

$91B

$200B

$600B

The Catalog of Federal Domestic Assistance lists over 2,000 Federal grant programs

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Guidance Reform History

Nov. 2009: Executive

Order: Reduce

Improper Payments

Feb 2011: Presidential

Memo: Reduce

Administrative Burden

Feb 2012: Advance Notice of Proposed Guidance

(public comments)

Feb 2013: Notice of Proposed Guidance

(public comments)

Dec 2013: Final

Uniform Guidance

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Diverse Range of Stakeholders Engaged

Type of Institution Represented ExamplesState Governments NASACT

NASCIONonprofits National Council of NonprofitsAuditors AICPA

CIGIE Indian Tribes NAFOA

GAOGrants Professionals AGA

NGMAUniversities COGR

AAUAPLU

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“OMB Simplifies Government-wide Grant

Guidance”

“A Whole New World: OMB Publishes New

Grants Reform Guidance”

December 2013: Final Uniform Guidance

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Challenge & ImpactChallenge Under Previous Guidance Impact of New Uniform Guidance

1. Eight Overlapping Sets of Compliance Requirements

Eliminates Duplicative and Conflicting Guidance

2. High Levels of Administrative Burden Performance and Internal Controls Over Compliance for Accountability

3. Hundreds of Forms with Non-Standard Data Definitions

Provides Framework for Standard Business Processes & Data Definitions

4. Outdated Guidance Does Not Account for Modern Electronic Work Environment

Promotes Efficient Use of IT and Shared Services

5. Inconsistent and Non-Transparent Treatment of Costs

Requires Consistent and Transparent Treatment of Costs

6. Lack of Support for Policies with Work-Life Balance

Encourages Non-Federal Entities to Have Family-Friendly Policies

7. Audit Findings Repeated Each Year = Waste

Stronger Oversight & Target Audits on Risk of Waste, Fraud, and Abuse

8. Lack of Accountability for Effectively Correcting Financial Integrity Weaknesses

Increased Accountability for Effective Resolution of Weaknesses

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Eliminating Duplicative and Conflicting Guidance

AwardsReceived

• A-102 & A-89• A-87• A-133 &A-50

Subawards to

universities

• A-110• A-21

Subawards to

nonprofits

• A-110• A-122

INSERT YOUR STATE OR AGENCY

HERE

Now: All OMB guidance streamlined in 2 CFR 200.

Then:

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Performance Over Compliance for Accountability

• Emphasis on strong internal controls and reduction in specific compliance requirements– Example: Specific examples of justification for salaries

and wages eliminated for more flexibility in implementing a strong system of internal controls

• Alignment with M-13-17 encouraging innovative program design based on evidence

• Performance measurement aimed at developing lessons learned

• Fixed amount awards aimed at performance milestones

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Consistent and Transparent Treatment of Costs

• Voluntary Committed Cost Sharing is not expected under research awards

• Pass-through entities must provide an indirect cost rate for subawards

• Standards for treating admin costs as direct• High bar for circumstances where agencies may

deviate from Federally negotiated rates• Option to extend rate for up to 4 years• De minimis rate of 10% of MTDC for entities

without a Federally negotiated rate

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Standard Business Processes & Data Definitions

• Sets framework for standardizing data definitions in all grants-related forms governmentwide

• Standardizes format for notices of funding opportunities w/60 days to apply

• Standardizes Information to be provided in all Federal Awards and Subawards

• Highlights areas where specific agency approval is needed

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Family-Friendly Policies

• Where consistent with non-Federal entity policy:– Allows costs of conference hosts to identify locally

available child care – Allows temporary dependent care costs that meet

specified standards for travel– Allows family leave as a fringe benefit

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Stronger Oversight

• Requires mandatory disclosures for conflict of interest and criminal violations

• Requires pre-award review of merit of proposal and risk of applicant

• Federal agencies may assign specific conditions for awards based on risk

• Strong focus on internal controls

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Targeting Waste, Fraud, and Abuse

• Single Audit Threshold raised from $500,000 to $750,000 – reducing burden for 5,000 entities while maintaining coverage for 99% of current dollars covered.

• Publication of single audit reports online with safeguards for PII and optional exception for Indian tribes

• Senior Accountable Official to implement metrics and encourage cooperative resolution

• Strong requirement to rely on existing audits first

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Stakeholder Reactions

• Significant interest in training webcast held January 27, 2014 & future outreach – Over 5,000 registrations for mailing list– Recorded version will be available at

CFO.gov/COFAR• General recognition of significance of reform• Interest in resources to assist in smooth

implementation

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Guidance Metrics

Metrics to gauge impact of guidance on reducing the risks of non-compliance and unnecessary administrative burdenPossible General Metrics:• Number of OMB Approved Exceptions • Number of fixed amount awards issued• Number of IDC rate extensions approved by

Cognizant Officials

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Guidance Metrics

Possible Audit Metrics:• # of major programs before and after

guidance effective• % of timely submissions of single audits • # of repeat findings• # of ‘unclean’ opinions for major programs• # of material audit findings in single audits

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Council On Financial Assistance Reform Priorities

Guidance Targets Risk & Minimizes

Burden

Standardized Business

Processes & Data

Well Trained Workforce

Strong Program Oversight:

Audit Resolution

Better Outcomes for Grants

EvidenceSpending

Transparency

Shared Services

Financial Management

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Framework for 2014 COFAR Activities

All deliverables will be strategically aligned to support effective

implementation of guidance reform with minimum resource burden to Federal agencies and non-Federal

entities.

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Strong Program Oversight: Audit Resolution

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• Over 4,000 audited programs failed to receive clean opinions in 2011 (3% of total audited programs)

• No existing guidance holds agencies and recipients accountable for effectively correcting financial integrity weaknesses

Challenge

• September 2013: High risk programs and recipients identified

• November 2013: CAROI pilot results presented to COFAR principals

Accomplishments

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Strong Program Oversight: Audit Resolution

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• December 2013: Document best practices on CAROI to contribute to resource repository

• February 2014: Complete framework for 2014 Compliance Supplement (w/preview of guidance implementation)

• March 2014: Compile and publish Federal agencies’ audit resolution policies• March 2014: Finalize Single Audit Metrics• April 2014: Publish 2014 Compliance Supplement • June 2014: FAC to deliver available standard and ad hoc reports and

analytical tools

Short Term Deliverables

• July 2014: Reconvene to plan management decision letter pilot• December 2014: Publish proposal to revise Data Collection Form and SEFA

Long Term Deliverables

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Workforce Development

• Lack of consistent standards for qualifying people to perform the grants management function

• No government-wide core training requirement for people performing the grants management function

Challenge

• December 2013: Competencies established• December 2013: Resource repository built, available

for use, and in testing phase

Accomplishments

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Workforce Development

• March 2014: Knowledge-Sharing Resource Center available for sharing ideas and best practices

• August 2014: Publish Grants Management 101 Course


• October 2014: Reconvene to discuss long-term vision and possible industry-wide credentialing framework


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Federal Grants Workforce Training

GrantsWorkforce

Grants 101 Course

Uniform Guidance

Knowledge-Sharing

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Grants Data Standardization

• Over 700 distinct grant related forms approved in OMB database

• No current process to vet and validate existing data elements nor to create and validate new data elements

• Multiple stakeholders must be engaged to fully explore grants data standards and chart a successful path forward

• Non-standard data definitions compromise quality of publicly reported financial data

Challenges

• September 2013: Preliminary analysis of 1100 data elements• September 2013: Contract awarded to support further analysis

of data elements and development of governance framework• December 2013: 99 standard definitions in final guidance

Accomplishments

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• Over 700 distinct grant related forms approved in OMB database

• No current process to vet and validate existing data elements nor to create and validate new data elements

• Multiple stakeholders must be engaged to fully explore grants data standards and chart a successful path forward

• Non-standard data definitions compromise quality of publicly reported financial data

Challenges

• September 2013: Preliminary analysis of 1100 data elements• September 2013: Contract awarded to support further analysis

of data elements and development of governance framework• December 2013: 99 standard definitions in final guidance

Accomplishments

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• December 2013: Grants data standardization proposed vision, project outline, and governance framework

• March 2014: HHS to brief COFAR on grants data standards records repository functional requirements


• June 2014: Brief COFAR on proof of concept for grants data standards

• July 2014: Reconvene to plan additional long term deliverables based on HHS and Treasury short term deliverables.


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Federal Spending Transparency

• Quality: Improving data integrity

• Completeness: Expanding the focus

to include obligations and expenditures

• Functionality: Providing a one-stop

location for all Federal spending

• Utility: Linking spending information

to program activity

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December 2013: Final Guidance

Published

January-April 2014: Training Webcasts,

Single Audit & Other Metrics, Publish 2014

Single Audit Compliance Supplement

June 2014: Agencies Submit

Draft Rules to OMB, Continued

Outreach on Implementation

December 2014: Final Guidance

Effective, Baseline Metrics Collected,

Case Studies of Best Practices Published

The Road Ahead: Implementing Grants Reform

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Engage With COFAR

For More Information Visit: CFO.gov/COFAR

Send Questions To:

[email protected]

Thank you!