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Omni Circular Key Area #7: New Responsibilities of the Pass-Through Agency

Omni Circular Key Area #7: New Responsibilities of the Pass-Through Agency. By Michael Brustein, Esq. mbrustein@bruman.com Brustein & Manasevit, PLLC Spring Forum 2014. Show me the money!!!. What was COFAR Thinking?.

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Omni Circular Key Area #7: New Responsibilities of the Pass-Through Agency

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  1. Omni Circular Key Area #7:New Responsibilities of the Pass-Through Agency By Michael Brustein, Esq. mbrustein@bruman.com Brustein & Manasevit, PLLC Spring Forum 2014

  2. Show me the money!!! BRUSTEIN & MANASEVIT, PLLC

  3. What was COFAR Thinking? BRUSTEIN & MANASEVIT, PLLC

  4. If A-133 cost and S/A costs come from the same pot of funds, perhaps SEAs will do a better job BRUSTEIN & MANASEVIT, PLLC

  5. Will pass-through agencies embrace “performance metrics” more effectively? BRUSTEIN & MANASEVIT, PLLC

  6. A pass-through entity means a non-federal entity that provides a subaward to a subrecipientto carry out part of a federal program. -200.74 (e.g. ESEA, IDEA, CTE, AEFLA) BRUSTEIN & MANASEVIT, PLLC

  7. Under EDGAR / A-102, pass-through responsibilities primarily described in 34 CFR 80.40 – Monitoring of Subgrantees • (Note – Part 76* on S/A programs will not change significantly) *And Part 75 BRUSTEIN & MANASEVIT, PLLC

  8. But OMB / COFAR shifted many new responsibilities to the pass-through, over and above 80.40 BRUSTEIN & MANASEVIT, PLLC

  9. Omni Circular NPRM (February 1, 2013) proposed reduction of the number of types of compliance requirements in the compliance supplement BRUSTEIN & MANASEVIT, PLLC

  10. Many pass-throughs opposed this reduction because of burden on them. OMB punted p. 78608 BRUSTEIN & MANASEVIT, PLLC

  11. Monitoring Responsibilities of the Pass-Through 200.328 34 CFR 80.40 • Non-federal entity is responsible for oversight of the operations of the federally supported activities BRUSTEIN & MANASEVIT, PLLC

  12. Measuring Performance “Performance Metrics” 200.328(b) • The non-federal entity must submit to the pass-through performance reports: • Comparing actual accomplishments to the objectives established by the federal award • Where the accomplishment can be quantified (e.g. cost) it may be required • If performance trend data is useful to federal award agency, agency should include it as requirement for performance BRUSTEIN & MANASEVIT, PLLC

  13. Measuring Performance 200.328(b) (cont.) • Reasons why goals were not met, if appropriate • Explanation of other pertinent information, such as cost overruns • Significant developments, problems, delays, adverse conditions • Favorable developments BRUSTEIN & MANASEVIT, PLLC

  14. The Big Question • How will ED (OESE, OSERS, OPE, OCTAE) reconcile the OMB required performance metrics with the current statutory / regulatory performance / accountability indicators? BRUSTEIN & MANASEVIT, PLLC

  15. In many instances OMB performance metrics are more detailed BRUSTEIN & MANASEVIT, PLLC

  16. Specific Requirements for Pass-Through (200.331) • Ensure that every subaward contains the following information relating to federal award identification: • Subrecipient name (must match registered name in DUNS) • Subrecipient DUNS # (Data Universal Numbering System) • Federal Award Identification Number (FAIN) • Federal Award Date BRUSTEIN & MANASEVIT, PLLC

  17. Specific Requirements for Pass-Through (200.331) (cont.) • Period of performance start and end date • “Amount of federal funds “obligated” by this action”?? • “Total amount of federal funds “obligated” to the subrecipient” ?? • “Total amount of the federal award” BRUSTEIN & MANASEVIT, PLLC

  18. Specific Requirements for Pass-Through (200.331) (cont.) • Federal award project description for FFATA purposes • Name of federal awarding agency, pass-through agency, and contact official • Is the award for “research and development” ? • The indirect cost rate (restricted vs. unrestricted) BRUSTEIN & MANASEVIT, PLLC

  19. The pass-through must reference the requirements of the federal grant and any additional requirements imposed by the pass-through (i.e. state-administered programs) (Incorporate by reference) BRUSTEIN & MANASEVIT, PLLC

  20. Compare 200.331(a)(1)(xiii) to 200.331(a)(4) on indirect costs • What is the relevance of the approved federally recognized indirect cost rate in state-administered programs with a non supplant provision? • Must pass-through negotiate restricted rates, and must sub-grantees use them? BRUSTEIN & MANASEVIT, PLLC

  21. Pass-through must seek an assurance from subgrantees that access will be provided to records and financial statements BRUSTEIN & MANASEVIT, PLLC

  22. New Risk management Requirements for Pass-Throughs BRUSTEIN & MANASEVIT, PLLC

  23. Pass-through must evaluate each subrecipient’s risk of non compliance (federal statute / regulations / terms of award) for purpose of monitoring BRUSTEIN & MANASEVIT, PLLC

  24. 200.331 • Risk Factors: • Subrecipient’s prior experience with the grant program • Results of previous audits • New personnel or substantially changed systems • Results of federal monitoring BRUSTEIN & MANASEVIT, PLLC

  25. 200.331 • Pass-through may impose conditions on subgrant based on risk assessment: • Shift to reimbursement • Withhold payments until evidence of acceptable performance • Require more reporting • Require additional monitoring • Require additional technical or management assistance • Establish additional prior approvals BRUSTEIN & MANASEVIT, PLLC

  26. 200.331 • Pass-through must monitor its subrecipients to assure compliance and performance goals are achieved BRUSTEIN & MANASEVIT, PLLC

  27. 200.331 • Monitoring must include: • Review financial and programmatic reports • Ensure corrective action • Issue a “management decision” on audit findings if the award is from the pass-through BRUSTEIN & MANASEVIT, PLLC

  28. 200.331 • Types of monitoring tools (depending on risk assessment) • Providing training and technical assistance • On-site reviews • Arranging for “agreed upon procedures” (less than $750,000) BRUSTEIN & MANASEVIT, PLLC

  29. 200.331 • Pass-through must verify all subrecipients (> $750,000) have single audits BRUSTEIN & MANASEVIT, PLLC

  30. 200.331 • Pass-through must adjust its own financial records based on audits, monitoring, on-site reviews BRUSTEIN & MANASEVIT, PLLC

  31. 200.331 • Pass-through must consider taking enforcement action based on non compliance: • Temporarily withhold cash payments pending correction • Disallow all or part of the cost • Wholly or partly suspend the award • Recommend to federal awarding agency suspension / debarment • Withhold further federal awards • Other remedies that may be legally available BRUSTEIN & MANASEVIT, PLLC

  32. 200.339 • The pass-through may terminate the award for “cause,” notice and opportunity for hearing (200.340 and 200.341) BRUSTEIN & MANASEVIT, PLLC

  33. Ready To Retire!!! BRUSTEIN & MANASEVIT, PLLC

  34. Firm Disclaimer This presentation is intended solely to provide general information and does not constitute legal advice or a legal service.  This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct.  Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC.  You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances. BRUSTEIN & MANASEVIT, PLLC

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