A Reminder from PCG’s Cost Allocation Team to Reference the Correct Federal Guidance in Cost Allocation Plans and Indirect Cost Rates

December marked five years since the Federal Office of Management and Budget (OMB) consolidated eight prior OMB Circulars into a single source of federal guidance, and four years since that guidance went into effect. Yet, despite all the years, our Cost Allocation team still sees federal, state, and other agencies referencing the former OMB Circulars—such as OMB A-87 and OMB A-133—rather than the consolidated and streamlined guidance. These OMB circulars were replaced by the Uniform Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

The Uniform Guidance streamlined the eight OMB Circulars (outlined below) into one source of Federal guidance across state and local governments and tribal organizations, non-profits, and institutions of higher education:

OMB issued the final regulations for the Uniform Guidance on December 26, 2013. Adopted in Title 2 Code of Regulations (CFR 200), the Uniform Guidance went into effect on December 26, 2014.

The Uniform Guidance is divided into the following key sections:

• Subpart A – Acronyms and Definitions (200.10 – 200.99)
• Subpart B – General Provisions (200.100 – 200.113)
• Subpart C – Pre-Award Requirements (200.200-200.211)
• Subpart D – Post Award Requirements (200.300 -200.345)
• Subpart E – Cost Principles (200.400 – 200.475)
• Subpart F – Audit Requirements (200.500 – 200.521)
• Appendices I-XI – Contract Provisions, ICR, PACAP

Many federal agencies also adopted the Uniform Guidance into their own regulations, including the Federal Department of Health and Human Services, which adopted the Uniform Guidance in 45 CFR Part 74.

The Uniform Guidance also contains changes that impact cost allocation and audit requirements—for example, changes to standards of documentation requirements to support payroll charges to federal grants and raising the threshold for the Single Audit to $750,000.

Why does it matter if you are still referring to Office of Management and Budget (OMB) A-87 or OMB A-133?

Citing the correct federal requirement in requests for proposals (RFPs), cost allocation plan submissions, claiming documents, and other communication ensures that documents are substantively up-to-date and the proper guidance is being applied. Citing out-of-date regulations calls into question the quality and accuracy of the document or process, even if it is otherwise correct.

If you have any questions about the Uniform Guidance and best practices for referencing it or for assistance with cost allocation, indirect cost rates, or administrative claiming, our subject matter experts can help. Please contact PCG’s Amy Ferraro (aferraro@pcgus.com), Kelly Gallagher(kgallagher@pcgus.com), or Ruth Quirion (rquirion@pcgus.com).

Published by Ruth Quirion

Ruth Quirion, a Senior Advisor with PCG, has 17 years of combined experience working with state government finance and cost allocation plans in her current career with PCG and her former career with the State of Maine. Ms. Quirion has conducted extensive research and attended training on the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and she is a subject matter expert on federal cost allocation requirements for public assistance cost allocation plans, Medicaid administrative claiming, and governmental accounting, financial reporting, and auditing. Ms. Quirion provides technical expertise for all of PCG’s cost allocation projects. Ms. Quirion has worked with various state agencies across the country to develop and implement public assistance cost allocation plans, develop and implement time studies, and assistance with quarterly CAP processing and federal claiming. Prior to joining PCG, Ms. Quirion worked as the Director of Financial Reporting and Internal Audit with the State of Maine’s, Office of the State Controller and an Audit Manager with the state’s Department of Audit. During her eleven year career with the State of Maine, Ms. Quirion was responsible for directing statewide financial reporting and internal audit activities, developing statewide accounting and internal control policies and procedures, and oversight of state agency compliance with the state’s internal control law. This work included providing guidance with the Department of Health and Human Services public assistance cost allocation plans and indirect cost rate proposals for other state agencies. Ms. Quirion received her Bachelor of Science Degree in Business Administration from the University of Maine, Augusta. Ms. Quirion achieved her certification as a Certified Public Accountant (CPA) with the State of Maine in August 2002. Ms. Quirion is a member of the Association of Government Accountants and has been a Certified Government Finance Manager since February 2007. View all posts by Ruth Quirion