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Posted by on Jun 20, 2016

It’s About Control

It’s About Control

LocalI had the opportunity to spend two days with a local agency and our instructor Patrick Smith. We had a good time tackling the issues of 2 CFR 200 implementation. But we know that this agency has identified a lot of follow up tasks. Some are small, while others will require full project and communications plans.

By the time we arrived for the training, these local agency officials had taken the most important step – informing their leadership that they need to make policy, procedure, and systems changes to become fully compliant with 2 CFR 200. As Patrick said throughout the two days, “management sets the tone” for how well an organization’s internal controls will be adopted and followed.

Here are some of my other takeaways:

  • Non-Federal Entities (NFE) taking advantage of the procurement policy grace period need to make sure they’ve documented this with their awarding Federal agencies. You may remember last fall, the Office of Management and Budget extended the deadline for incorporating applicable 2 CFR 200 procurement provisions into NFE policies.
  • Adoption of the current micropurchase and Simple Acquisition Threshold levels require more than policy changes. You need to think about the impact of the changes in terms of volume (i.e., lower micropurchase level means more transactions needing more than one bid), and procedure change (e.g., certain purchases can no longer be done with a purchase card). Not to mention, how you’re going to communicate changes to all staff.
  • The FAIN (Federal Award Identification Number) should go everywhere. The FAIN is a small detail, but essential for achieving transparency. That means if you are a Pass-Through Entity (PTE), you need to make sure that you mark all subaward documents with your FAIN. Remember, a key tenet of grant reform is transparency – the public should be able to follow the money.

Finally, I don’t think I could do the subrecipient vs. contractor exercise enough. Even when it seems clear after a review of the Federal Grant and Cooperative Agreement Act‘s delineation between a grant and a contract, I think you need to take a look at each individual transaction. It’s essential that PTEs choose the right instrument…otherwise you may miss flowing down the appropriate Federal requirements.

Uniform Guidance implementation is hard – and if you’re an NFE, your to-do list probably remains long. Remember you should tackle issues one step at a time and ask for help when needed. I continue to challenge anyone to show me an NFE that is fully compliant with 2 CFR 200.

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