In this episode of THE SAMPLE, Leita Hart-Fanta, CPA answers the question “What is the Uniform Guidance?”
Welcome to The Sample, a quick discussion of auditing concepts and terms that will help you do your work. Conducting an audit in accordance with auditing standards is no small feat and I want to support you. We’ll be referring to the GAO, IIA and AICPA literature to bolster our conversations. Let’s get started.
In this episode, we answer the question, “What is the uniform guidance?” Actually, uniform guidance is a shortened title from a much longer title of an important document that tells the federal grant community how to take care of federal grants. Here’s the longer title. It’s big. The Uniform Administrative Requirements (which are often called admin rules, so even shortening that more), Cost Principles, & Audit Requirements for Federal Awards. Boy, that is a mouthful. Let’s cover this in reverse.
So, obviously federal awards is our subject matter, but states and local governments often borrow from the uniform guidance for their own rules and regulations regarding how to handle government funds. So know that’s true, but technically this is only for federal awards.
Audit requirements. If you expend more than $750,000 a year in federal funds, you are required to undergo an audit, and there are directions in this section about what that audit needs to look like. It’s called the single audit. And I’ll cover that with you in a future episode.
Cost principles tell the grantee what they can and cannot spend federal dollars on. So over time, grantees have been a little creative and charge the fed for things that the fed goes, “I don’t want to pay for that,” such as alcohol or penalties for bad behavior or lawsuits to defend the grantee against a lawsuit because of their bad behavior. The federal government’s like, “We’re not paying for that.” They have a list of things they will and will not pay for.
And then the administrative requirements. The reason I did this in reverse is because this is the catchall. This is where most of the meat of the uniform guidance lives. It’s a very long section. It’s actually multiple sections that I will show you in a minute. And it tells the grant community who is responsible for what, because there are multiple players here. There’s the grantor. There’s the grantee. There are intermediaries, sometimes called pass-through entities. So it can get a little complicated. And they’ve defined who does what as far as this process goes.
This is the process. This is the life cycle of a grant. Grants are born. Then they’re awarded to the grantees. Then they live their little life. That’s what they call the post-award phase, where the money is spent and the program is implemented. And then eventually they die and have to be closed out.
So the uniform guidance is actually structured in that sequence in a way. Because in the admin rules, if you’ll notice, there are pre-award requirements and then post-award requirements. That’s when the grant is actually occurring. Cost principles are most relevant in the post-award phase or the actual life of the grant phase, where the money is actually being spent, as is the audit requirements. So this is actually sequenced in order of the life cycle.
Now look at the top here. This is where you can find the uniform guidance. I’m about to show you that. It’s in this document called the CFR, Code of Federal Regulations. It’s in Title 2 part 200. Let me show you what that looks like. So here is the eCFR, literally just Google ECFR, Code of Federal Regulations, go to Title 2, grants and agreements. It’s worth it just to kind of browse around in this thing too, to get a sense of the rest of the structure. It’s pretty interesting.
Then you go to section 200. So I’m in Title 2, section 200, and there’s the formal title, Uniform Administrative Requirements, Cost Principles, & Audit Requirements for Federal Awards, just like I just said. And then we can scroll through and see section A, which is the acronyms and definitions, which goes on for quite a while. B, begins the admin rules or the administrative requirements, general provisions, pre-award requirements, post-award requirements. So that’s the admin rules. Then we get to cost principles and the audit requirements, which are the single audit requirements, which I’ll talk to you about in future episodes.
That wraps it up for another episode of The Sample. True to the nature of a sample, we didn’t talk about everything, so you’ve probably got questions. Write to me firstname.lastname@example.org and I’ll do my best to fill in the blanks. Thanks for playing.
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