More UGG Questions and Clarifications

The U.S. Department of Education (ED) recently released some additional training materials on implementation of the Office of Management and Budget’s (OMB’s) uniform grant guidance (UGG).  These materials include PowerPoint presentations on procurement, cost principles, indirect costs, and risk management.  As reported in last week’s Federal Update, most of the information included in the slides is simply a restatement of the new rules.  However, there are a few items in each presentation that either offer greater clarification of what ED expects, or raise additional questions about the implementation of the rules.
In the procurement presentation, slide 25 notes that the micro-purchase threshold will increase from $3,000 to $3,500 on October 1, 2015.  The micro-purchase threshold allows smaller contracts to be awarded without any formal bidding, so long as such purchases are spread out amongst qualified suppliers as much as is practicable.  Under the federal rules, the micro-purchase threshold is determined by the Federal Acquisition Regulation (FAR) at 48 CFR Subpart 2.1.  The FAR was recently updated, effective October 1, 2015, to raise the micro-purchase threshold to $3,500.  For many local educational agencies, however, this change will not have any significant impact as many States already have a lower threshold than the current federal rule. 
Another item of note was included in the slides detailing changes in the applicable cost principles.  Slide 24 of this presentation discusses certification language required under 2 CFR § 200.415.  According to the rule, all annual and final fiscal reports or vouchers requesting payment under federal awards must include a certification, signed by an official who is authorized to legally bind the non-federal entity.  The certification is as follows: “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise.”
Slide 24 of ED’s presentation references a revised ED Form 524B in relation to this certification language for annual and final fiscal reports.  The cover letter for this revised form includes a shorter form of the required certification language: “To the best of my knowledge and belief, all data in this performance report are true and correct and the report fully discloses all known weaknesses concerning the accuracy, reliability, and completeness of the data.”  This language does not seem to go quite as far as is required under the UGG, but ED has not issued any additional information regarding this certification.
The PowerPoint presentations also raise questions regarding performance reporting under federal awards.  The UGG requires new performance reporting under 2 CFR § 200.328.  In a previous frequently asked questions (FAQ) document, ED has stated its belief that current programmatic reporting requirements meet the standards of the UGG, and no further reporting would be required.  ED Form 524B, which is also referenced in ED’s indirect cost presentation, does include various references to performance reporting under ED programs.  The federal rules require non-federal entities to submit performance reports that include the following information:

  • A comparison of actual accomplishments to the objectives of the federal award established for the period;
  • The reasons why established goals were not met, if appropriate; and
  • Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.

ED Form 524B requires grantees, for each project objective included in its approved grant application, to provide specific quantitative and/or qualitative data for each associated performance measure and a description of preliminary findings or outcomes that demonstrate that it has met or is making progress towards meeting the performance measure.  Grantees must also explain how the data on the performance measures demonstrate that it has met or is making progress towards meeting each project objective. 
Unfortunately, this form also raises additional questions.  The UGG requires all non-federal entities to submit performance reports, but ED Form 524B appears to be for discretionary grantees.  There is no discussion of the form’s applicability to recipients of formula grants or subrecipients.  Are all recipients and subrecipients required to complete this form? Are pass-through entities required to provide their own forms to subrecipients?  Must subrecipients complete the revised ED Form 524B?  With any luck, ED will release additional guidance soon to provide more clarification on subrecipient and formula grant performance reporting.  Until then, grantees and subrecipients may still submit UGG-related questions to UniformGrantGuidanceImplementation@ed.gov.

About the Author

Steven Spillan is an associate with the Washington, DC law firm of Brustein & Manasevit, PLLC. Established in 1980, the Firm is nationally recognized for its federal education regulatory and legislative practice, providing legal advice regarding compliance with all major federal education programs as well as the federal grants management requirements, including the Education Department General Administrative Regulations (EDGAR). In addition, they work with agencies on federal spending flexibility, allowability, policies and procedures, audit defense and resolution and legislative updates. The Firm provides government relations services for the National Title I Association.