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Posted by on Apr 7, 2014

New Requirements in the Supercircular Designed to Enhance Accountability

accountabilityFederal agencies and grant recipients face increased pressure to protect federal funds from waste, fraud, and abuse.  The Office of Management and Budget (OMB) and the Council on Financial Assistance Reform (COFAR) identified the need to strengthen oversight of federal awards as one of the primary objectives of grants reform.  As a result, the Uniform Guidance: Uniform Administrative Requirements, Cost Principles, and Audit Requirements (the “Supercircular”) contains two new provisions that will promote greater recipient accountability relating to federal funds.

Under §200.112, federal agencies must establish and implement conflict of interest policies for all grant awards. The Uniform Guidance stipulates that the conflict of interest policy must include a provision requiring recipients to disclose, in writing, any potential conflict of interest affecting the grant award.  Agencies have flexibility in designing conflict of interest policies to best meet their specific programmatic needs. Many agencies currently have established conflict of interest policies, and therefore, the administrative burden of this provision should be minimal. An example of a conflict of interest policy can be found on the National Science Foundation’s website.

Grant recipients will also be required to notify the awarding agency or pass-through entity, in writing, of all violations of federal criminal law involving fraud, bribery, or gratuity violations that present a risk to federal funds.  Recipients that fail to notify the awarding agency or pass-through entity may be subject to sanctions for noncompliance, including suspension and debarment. The provision, found in §200.113, uses broad and generic language to provide agencies with flexibility in crafting specific regulations. This provision is modeled after the mandatory disclosure requirements found in the Federal Acquisition Regulation (FAR) (73 Fed. Reg. 67064). Once agencies have implemented the new policy, recipients should update their internal policy manuals and procedures to comply with agency requirements.

The Uniform Guidance, found at 2 CFR 200, consolidates eight existing grant circulars into one set of uniform regulations.  The Uniform Guidance contains more than 60 policy changes and new requirements affecting grants management. The provisions in the Uniform Guidance will become applicable to all new grant awards on December 26, 2014.

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