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Uniform Guidance for Government Entities: Personal Services and Fringe Benefits
Government entities applying for and receiving federal grants and cooperative agreements are in for some significant reforms that promise to increase competition for grant funds, add new administrative processes, change long-established principles, and impact the audits of organizations receiving federal funding.
White Paper: Uniform Grant Guidance for Government Entities: Personal Services and Fringe Benefits
The Office of Management and Budget’s (OMB) 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, commonly known as the Uniform Guidance (UG) but previously referred to as the Super Circular or Omni Circular, will apply to new awards, and to additional funding (or funding increments) to existing awards made after December 26, 2014.
At more than 100 pages long, the new Uniform Guidance includes sweeping changes to the processes of applying for, managing, and auditing federal grants and cooperative agreements.
“It is critical that government entities review these changes to stay in compliance,” advises Rebecca Field, a nonprofit manager for CliftonLarsonAllen. “Our professionals have burrowed deep into the guidance to find the issues that concern you most, and developed methods for implementing change.”
Personal services and fringe benefits
One area of high interest to governmental entities is compensation for personal services and fringe benefits. The current guidance in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, governs how these specific costs can be treated by government entities that are charging a portion of the costs to a grant, contract, or other agreement with the federal government.
The guidance includes some significant changes in time and effort reporting. Under Circular A-87, an employee who spends 100 percent of his or her time on a federal program must periodically certify that they worked solely on that program. Currently, employees who work on more than one federal program must report an after-the-fact distribution of activities and account for the total activity for which they are compensated.
Under the UG, all employees (regardless of how many federal programs they work on) may use budget estimates as a percentage of time spent in each federal program, if appropriate, as long as they certify at the end of the period that those estimates are accurate.
Clarified and expanded rules
In addition, the OMB has clarified and expanded guidance in multiple areas, including professional activities outside the entity and post-retirement health plans.
The new guidance also allows federal agencies to approve alternative accounting methods for salaries and wages based on the achievement of performance outcomes. This includes areas that blend funding from multiple programs to attain a more efficient combined outcome.
How we can help
CliftonLarsonAllen has prepared a white paper, Uniform Grant Guidance for Government Entities: Personal Services and Fringe Benefits, that compares requirements under the new UG to OMB Circular A-87 in the area of compensation for personal services and fringe benefits, and offers insight into what the changes will mean for government organizations.
We have also prepared a Uniform Guidance Checklist to help you plan the implementation of UG in your organization.