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Uniform Guidance (Super Circular)

Date: 01 Dec 2016

The Office of Management and Budget (OMB) has hand out the much-awaited final rule titled “2 CRF Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”. This rule is also acknowledged as the “Super Circular,” which has streamlined eight federal regulations (OMB Circulars A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133) into a single and inclusive strategy guide and is effective for fiscal years beginning on or after December 26, 2013. It provided a comprehension to the Federal government with an aptitude to better oversee and control it’s approximately $600 billion, awarded annually as grants, cooperative agreements, and other types of financial assistance.

While the Super Circular has not entirely changed the eight federal regulations from which it is derived, but includes certain changes that will have important implications on all nonprofit recipients of, and applicants for, Federal grants and cooperative agreements.

This new guidance has created provisions that are designed to standardize the reporting requirements for federal grant recipients, and streamline cost principle requirements, which represents the biggest change among these requirements till date, included in the changes.

The new regulations are envisioned to progress the federal grant award process by providing a framework that emphases on performance over compliance; ensuring financial integrity and enhancing existing or future federal award guidelines; streamlining the administrative, costing principles, and audit administrative for federal awards; and strengthening federal grant oversight to better defend against “waste, fraud, and abuse.” The main intention is to provide “a backbone for sound financial federal award management.”

The “new and improved” guidance for Federal awards was designed to provide streamlined guidance in one location, consolidation and uniformity of guidance previously spread over eight circulars and a focus on outcomes over compliance.

The uniform guidance provides de minims indirect cost rate of 10% of Modified Total Direct Cost (MTDC), and requires pass-through entities to provide an indirect cost rate to sub recipients and allows alternate methods of accounting for salaries and wages based on achievement of performance outcomes. It also raises the audit threshold from $500,000 to $750,000 and has an increased focus on internal controls, effective for 12/31/15 fiscal year-ends and beyond.


  • The financial management system must include identification, in its accounts, all federal awards received and expended and the federal programs under which they were received. This information should include their Catalog of Federal Domestic Assistance (CFDA) number, the Federal award identification number, year, award agency and pass through entities, if applicable.
  • There are detailed requirements for the financial management system, including the prerequisite to have written procedures to implement the cash management requirements and for defining the allow ability of costs in accordance with the cost principles. Written procedures are required if grant advances are received. Otherwise, the reimbursement method will be used.
  • Cost sharing and matching issues are addressed, including in-kind contributions.
  • Program income is normally used to defray the cost of the program. If not indicated by the federal awarding agency in the award terms, program income must be deducted from total allowable costs.
  • There are specific rules regarding budget revisions and procurement, including the identification of small purchases and how to handle sealed bids. For compliance with the procurement changes, there is a full one-year grace period.
  • There are also specific rules regarding monitoring and reporting. Performance reporting will now include comparing accomplishments to the objectives and must contain reasons goals were not met.
  • The new guidance on how to monitor sub recipients includes expanded definitions to identify a sub recipient versus a contractor. When there is non-compliance, there may be stricter consequences, including the possibility the grant award may be suspended or future awards disallowed.
  • While there are a number of changes, having all of the guidance in one location should make the process of grant compliance much improved.
For detailed explanation of super circulars and its implications on your entity, please contact me at (858) 784-1622 or you can also request me a free half-hour appointment at my office 266 17th Street, Suite 200, Oakland CA 94612.

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