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To continue maximizing the value of grant funding and to set the stage for enhanced results-oriented accountability for grants, the Office of Management and Budget (OMB) announced it had revised some sections of its Guidance for Grants and Agreements. These revisions went into effect on November 12, 2020, and we want to ensure you can maintain compliance with the changes.

As a leading provider of grant management solutions, we want to help you make a better sense of the essential changes. We put together a guide to explain the new initiatives and statutory requirements in the Guidance as well as to clarify existing provisions.

Content

Chapter 1: Revisions to Performance Measurement

Chapter 2: De Minimis Indirect Cost Rate and Terminology Overview

Chapter 3: Purchase Thresholds, Closeout Time, and Period of Performance and Budget Period Overview

Chapter 4: Data Revisions Overview

Chapter 5: Risk Management Overview

Chapter 6: Financial Assistance Applicants and Indirect Cost Rates Overview

In the first section, we will review the changes to performance measurement and program design requirements.

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Revisions to Performance Measurement

One of the latest updates’ main goals is to increase grant accountability by emphasizing results-based reporting. This means starting November 12, you will need to produce performance metrics on each Federal award, and Federal awarding agencies must make performance measuring available for each award. This updated Guidance further empowers Federal agencies by giving them the ability to terminate awards if the recipient is not meeting performance standards.

These revisions also encourage agencies to measure recipient performance to help them meet objectives, share lessons learned, and encourage the adoption of best practices.

Revisions to Program Design

Sound program design is an essential component of performance management, and as a result, a new provision regarding program planning and design is included. Under this updated Guidance, Federal awarding agencies are now formally required to develop a robust program design complete with established program goals, objectives, and indicators, to the extent permitted by law, before they solicit any applications.

How to Prepare for Compliance With These Changes

To ensure you will be able to comply with these performance and program guidelines, your organization needs to have the ability to develop comprehensive performance plans for Federal awards, complete with programmatic goals that align with the award.

However, this cannot be easy to manage while maintaining accuracy if your team operates with decentralized systems and processes. With a grant management software solution like AmpliFund, you can design an overall performance plan for each program. For example, in AmpliFund, six-goal collection formats are available with an infinite number of labels representing all the various outcome formats that could be established and required by the grant distributor.

 A grant management solution will also allow you to automate reports on your performance metrics directly from your data in the system.

Now that you have a better understanding of the revisions to Performance Measurement and Program Design in the Office of Management and Budget’s (OMB) Guidance for Grants and Agreements, we want to cover a couple more important changes to this Guidance.

The next chapter reviews the expanded scope of the de minimis indirect cost rate and some terminology changes. Read on to learn more about each revision as well as to gain tips for maintaining compliance.

De Minimis Indirect Cost Rate and Terminology Overview

De Minimis Indirect Cost Rate Expansion

Indirect costs, costs that you cannot tie to a particular project or function, can play an important role in supporting an organization’s ability to manage a grant. So whether administrative oversight or technology or facility costs, you need to account for your indirect costs when managing your funding. However, some recipients and funders never negotiate an exact indirect cost rate and instead operate with the Federally recognized rate that may be used to recover allowable indirect costs, otherwise known as the 10 percent de minimis rate.

In previous versions of this Guidance, only entities that have never negotiated an indirect cost rate could use the de minimis rate of 10 percent of modified total direct costs. In this updated Guidance, however, the OMB expands this to allow all entities who wish to use this 10 percent de minimis rate to apply it to received Federal grants starting November 12, 2020 (except for those described in Appendix VII to Part 200—State and Local Government and Indian Tribe Indirect Cost Proposals, paragraph D.1).

Terminology Changes

To interpret how revisions such as the de minimis rate expansion apply to your organization, you need to have a solid grasp of the terminology frequently used to describe grant regulations. Therefore, we recognize how important it is that you are aware of the terminology changes the OMB has made in this version of the Guidance so you can digest these changes with clarity.

Specifically, the OMB has made the following terminology alterations:  

  • Obligation is referred to as Financial Obligation or Responsibility
  • Catalog for Federal Domestic Assistance (CFDA) number and CFDA program title is referred to as Assistance Listings number and Assistance Listings program title, respectively.

How to Prepare for Compliance With These Changes

If you choose to apply this de minimis indirect cost rate to any Federal grants, come November, proper tracking will be your key to compliance. Given that you may not want to apply this rate to every grant in your portfolio, your best bet will be to utilize a system equipped to manage multiple rates. For example, with software, you not only have the ability to track multiple indirect cost rates, whether previously negotiated rates or the 10 percent de minimis rate, you can also apply each rate directly to the appropriate Federal grant — in one centralized system.

And whether it’s your Grant Management Software provider or another service provider, it’s important to partner with experts in the grants industry so you can remain compliant with all Federal data legislation such as this Guidance. A reliable partner will provide you with resources and hands-on support to help you best understand and decipher important changes in our industry and how they may affect your organization.

Next, we discuss the covering changes to budget and performance thresholds, purchase thresholds & closeout time.

Purchase Thresholds, Closeout Time, and Period of Performance and Budget Period Overview

We have now covered several revisions to the Office of Management and Budget’s (OMB) Guidance for Grants and Agreements, including:

  • Performance measurement
  • Program design
  • De minimis indirect cost rate
  • Terminology

Let’s review the increases in purchase thresholds and closeout time and clarifications to the period of performance and budget period definitions.

Purchase Threshold Increases and Allowances

Many of the OMB revisions have been made to this Guidance have been to simplify processes and procedures. To support this goal, the OMB has made revisions to various purchase thresholds.

The purchase threshold revisions include:

  • Increase of the micro-purchase threshold from $3,500 to $10,000
  • Increase of the simplified acquisition threshold from $100,000 to $250,000
  • Allowance of non-Federal entities to request a micro-purchase threshold above $10,000 under certain conditions

Closeout Time Increase

Purchase thresholds are not the only things that the OMB has increased in this updated Guidance. In fact, another increase they have made in this Guidance will greatly aid recipients of Federal funds. Starting in November, the number of days for recipients to submit closeout reports and liquidate all financial obligations will increase from 90 days to 120 days, giving them 30 extra days to complete these reports.

Clarification of Period of Performance and Budget Periods

The OMB has adjusted time periods beyond just closeout time. They have provided further clarifications around the definitions of period of performance and budget period.

“Period of Performance”:

  • Clarified the definition of period of performance to reflect that it covers the total estimated time interval between the start of an initial Federal award and the planned end date.
  • Specified that period of performance may include one or more budget periods, but identifying the period of performance does not commit funding beyond currently approved budget periods.

“Budget Period”:

  • Clarified that recipients are authorized to expend current funds awarded, including any funds carried forward or other revisions according to 2 CFR 200.308.
  • Ensured consistent use of the term “budget period” for transparent reporting purposes, as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA).

How to Prepare for Compliance With These Changes

As with many of the revisions we have discussed, you are more likely to maintain compliance with the changes to purchase thresholds, closeout time, and period of performance and budget period if you are utilizing a configurable, flexible system to manage your grant portfolio.

For instance, with AmpliFund, you can easily update your budget caps and expense alerts if you plan to increase your purchase thresholds. You can submit amendments directly to your funder through our system to request a budget change, helping you more easily maintain compliance with the purchase threshold revisions.

AmpliFund’s configurable system also simplifies the process of updating things such as the reporting periods and close-out dates of your grants. This will help with compliance if you are adjusting these in November per the new revisions.

Data Revisions Overview

It’s all about data.

Wondering how and if the OMB addressed data in their recent revisions of the Guidance for Grants and Agreements? Read on to learn more.

Clarification of Machine-Readable Data

If you work with Federal funds, you have likely heard a lot about machine-readable data in recent years. Through legislation, the Federal government has emphasized the importance of using a machine-readable format, or a format that a computer can quickly process without human intervention while still ensuring no semantic meaning is lost. To continue this trend, the OMB is clarifying the appropriate methods for data collection, transmission, and storage in this Guidance. This clarification also reinforces the machine-readable requirements in the Foundations of Evidence-Based Policymaking Act of 2018 and accompanies OMB Guidance. 

The Guidance indicates a need to continuously evaluate which standards and structures are needed, instead of defining a clear standard. This means that flexibility in data collection is paramount. On the Federal side, a shared infrastructure is also pushed as a continuation of CAP goal #2.

Revision of Data Standards

To promote uniform application of standard data elements in future information requests, the OMB has revised their discussion of information collection requests in this Guidance. This revision reflects that these requests must adhere to the standards available from the OMB-designated standards lead. The OMB also made this clarification to support further other OMB memorandums, which state that future shared service solutions must adhere to the Federal Integrated Business Framework standards.

Increase of Transparency

To support the Federal Funding and Accountability Act of 2006 (FFATA) and the Data Accountability and Transparency (DATA) Act, the OMB has made some revisions to this Guidance specifically to increase the transparency of Federal spending. As FFATA and the Data Act mandate that Federal agencies report any Federal appropriations received or expended by both Federal agencies and non-Federal entities, the OMB has revised the reporting thresholds in this Guidance to further align financial assistance requirements with those of the Federal acquisition community. For example, in this updated Guidance, the OMB has raised the reporting threshold for sub-awards that equal or exceed $30,000.

How to Prepare for Compliance With These Changes

To maintain compliance with any grant-related data regulations, you must employ a reliable system through which you can input, monitor, and report on data to ensure accuracy. Through a cloud-based solution like AmpliFund, you can collect all data via forms and fields that you can configure to meet ever-changing regulations and data standards. AmpliFund also allows your users to store documents and transmit them in messages, ensuring you are reporting on your data on time through one system.

In the next section, we explain how the OMB has revised this Guidance to strengthen Federal awarding agencies’ ability to assess risk.

Read on to learn more about risk management changes and how to maintain compliance with these changes.

Risk Management Overview

To minimize the risk of abuse and waste of taxpayers’ dollars, legislation stresses the importance of conducting risk assessments before awarding Federal funds. As such, the OMB focused on risk assessment and management when making their most recent set of revisions to the Guidance for Grants and Agreements.

Risk Management Revisions

Many of the recent revisions the OMB has made to this Guidance serve to support further the President’s Management Agenda Cross-Agency Priority (CAP) Goal #8: Results-Oriented Accountability for Grants. Specifically, when focusing on Goal #8, the OMB has targeted areas of greater risk.

According to these revisions, Federal agencies must all invest in risk analysis starting in November. The risk they are to consider no longer only entails spending or next year award risk, but also the risk of a lack of performance. Therefore, if recipients are not meeting the now mandated performance or program plans according to this Guidance, Federal agencies can cancel the funding.

How to Prepare for Compliance With These Changes

To ensure you are meeting the requirements of risk assessments, you need a system that will help you evaluate risk and assess if you are meeting the programmatic goals set by the funder throughout the lifecycle of a grant.

AmpliFund has many functions and features geared towards both assessing and minimizing risk. Through AmpliFund, the funder and the recipient will negotiate the grant’s programmatic goals before the award begins, and both parties can amend these as needed. After conducting this negotiation, you can utilize AmpliFund’s configurable risk, which specifically monitors programmatic goal risk and allows you to configure risk thresholds per grant.

Also, to ensure you are best managing risk, in AmpliFund, funders dictate reporting periods to ensure that grant-related goals remain on track. As the grant recipient, you can dictate tracking periods to assess and manage potential risks continually. AmpliFund also has dashboards that allow you to view your goal progress at-a-glance and reporting features that provide a detailed view of goals across all grants or all recipients.

Moving on…

The next chapter details the new requirements for financial assistance applicants and various changes to indirect cost rates.

Financial Assistance Applicants and Indirect Cost Rates Overview

Addition of FAPIIS Requirement

For those who are financial assistance applicants, the OMB now requires you to provide information in SAM regarding your immediate business and highest-level owner and subsidiaries in this updated Guidance and on all predecessors who have been awarded a Federal contract, grant, or cooperative agreement within the last three years. Before making a grant or cooperative agreement, the OMB now requires agencies to consider all of an applicant’s immediate owner or highest-level owner information that appears in the Federal Awardee Performance and Integrity Information System (FAPIIS), if applicable.

Changes to Indirect Cost Rates

The OMB has also clarified in this Guidance the responsibilities of pass-through entities regarding establishing sub-recipient indirect cost rates and resolving sub-recipients’ audit findings. Specifically, pass-through entities cannot require the use of the 10 percent de minimis indirect cost rate if the recipient already has a Federally approved indirect cost rate established.

Also, to support post-award compliance, per this Guidance, the OMB now requires any indirect cost rates and structures to be made public.

Lastly, effective immediately, the OMB has placed restrictions on indirect costs of certain telecommunications services or equipment.

How to Prepare for Compliance With These Changes

As with all of the changes we have covered, you can best maintain compliance with these revisions by using a centralized system that allows you to automate your grant management processes. For example, when creating applications in AmpliFund, organizations working with financial assistance applicants can specify what information they need to provide, such as owner information.

Also, whatever system your organization employs should give you the ability to collect multiple pieces of information related to indirect costs so your organization can comply with the new indirect cost revisions. With AmpliFund’s standard opportunity details form, you can collect indirect cost information such as description, rates, restrictions, and citations governing restrictions. You can publish this information on each opportunity.

In Summary

The Guidance for Grants and Agreements revisions could bring a significant impact on grant seekers’ operations. The modifications range from performance and risk management, indirect costs, increases of purchase thresholds and closeout time, and data requirements.

The full version of OMB’s updated Guidance for Grants and Agreements can be accessed here.

Finding a grant management system that meets your needs will ease your administrative burden, improve your organization’s internal workflow, and help you keep up with deadlines and reporting, so you can focus on amplifying your impact.

If you’re ready to see how our solution can solve your problems, request a demo today. We’ll walk you through how AmpliFund can help you streamline operations, improve efficiency, maintain your compliance, and increase your ROI, all in a free customized 30-minute demo.

Featured image: Photo by AbsolutVision on Unsplash

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