Super Circular - Desk Reference Guide

The new OMB 2 CFR Part 200 Super Circular streamlines Administrative Requirements, Cost Principles,
and Audit Requirement guidelines for federal awards received by all types of non-federal entities. Overlapping
requirements were eliminated, and overly burdensome or conflicting requirements were reformed in an effort
to allow federal award recipients to focus their efforts on programmatic objectives instead of compliance with
complex requirements. The adjustments set forth by the new guidance include:
Increased internal control efforts
Standardization of terminology and definitions in the industry (including changes to the cost principles
that reflect modern business practices and use of technology)
Standardized business processes and cost treatment
Family-friendly policies
Goals of the 2 CFR Part 200:
To ensure the integrity of taxpayer dollars by improving performance outcomes of federal resources
To ease administrative burden and strengthen oversight to reduce risks of waste, fraud, and abuse
2 CFR Part 200 supersedes OMB Circulars, A-21, A-87, A-110, A-122, A-89, A-102, A-133, and the guidance
in Circular A-50 on the Single Audit Act to achieve uniformity
The new Super Circular went into effect on December 26, 2014 and must be implemented for the fiscal year
beginning after that date. Example: If your fiscal year ends June 30, 2015, you are not required to implement the
Super Circular until the fiscal year beginning July 1, 2015 and ending on June 30, 2016. Audit requirements will
apply to audits of fiscal years beginning on/after Dec. 26, 2014. Administration requirements/cost principles will
apply to new awards and additional funding to existing awards made after Dec 26, 2014. Existing federal awards
continue under terms of the federal award, except for audit as subpart F is based on 12/26/2014 fiscal year date.
Oversight and Administration:
Conflict of Interest and Mandatory Disclosures (200.112-.113) - Requires non-federal entities to disclose
any conflicts of interest or relevant violations of federal criminal law. Grants are more competitive and the
federal government wants to make sure taxpayer money is used wisely.
Use of Grant Agreements (Including Fixed Amount Awards, Cooperative Agreements, and Contracts)
(200.201) - New language has been added to allow for fixed amount awards that rely more on performance
results than compliance for accountability.
Federal Awarding Agency Review of Merit of Proposals and Risk Posed by Applicants (200.204-.205) Requires federal awarding agencies to evaluate the merit and risks associated with a potential federal award
to mitigate potential risks of waste, fraud, and abuse.
Information Contained in a Federal Award (200.210) - Streamlined grant application with certain
guidelines, time minimums, and 15 uniform data sets for general federal award information that must be
present. A consistent set of information, which will reduce the administrative burden and costs associated
with managing this information throughout the life of the federal award.
Internal Controls (200.303) - Establishes effective internal controls over the federal award that provides
reasonable assurance that the award is managed in compliance with federal statutes, regulations, and terms
and conditions. Previously, this topic was discussed in audit requirements, after the funds are spent, and this
edit encourages entities to better their internal control structure early on.
Prior Written Approval (200.407) - Provides a one-stop comprehensive list of the circumstances under
which non-federal entities should seek prior approval from the federal awarding agency.

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Cost Principles
Supplies (200.94) - Clarifies threshold for defining personal property as a supply. Streamlined cost accounting
provides consistent capitalization procedures and depreciation required at the $5,000 mark.
Direct Costs (200.413) - Allows admin costs to be directly charged (salaries, computer equipment) in some
cases if directly related to a specific award. Some direct costs that are unallowable as charges to federal awards
must now be treated as direct costs for determining indirect cost rates.
Indirect (F&A) Costs (200.414) - Negotiated indirect cost rates have to be accepted by ALL federal awarding
agencies. They must approve this rate unless a different rate is required by federal statute or regulation,
or when approved by a federal awarding agency head or delegate. Also provides a de minimis 10 percent
indirect rate of modified total direct costs for new grantees that have never received a negotiated indirect cost
rate and can be used on all federal awards until an approved rate is negotiated with the cognizant agency. This
can continue indefinitely, which is good for small businesses who cant afford the high costs, eliminating a
potential administrative barrier to receiving federal financial assistance. Those grantees with negotiated rates
can extend their rate number for up to 4 years (one-time extension), subject to the review of the cognizant
agency. If they do so, they cant request a rate review until that extension period ends.
Conferences and Travel Costs (200.432/200.474) - Provides flexibilities that better allow non-federal
entities to have polices that allow their employees to balance their personal responsibilities while maintaining
successful careers contributing to federal awards. (Family-friendly provisions).
Compensation Fringe Benefits (200.431) - Fringe benefits are allowable on GAAP basis to entities using
accrual-based accounting. Prior approval by the federal awarding agency/cognizant agency must be given
before an indirect cost is charged to the federal award for abnormal or mass severance pay.
Required Certifications (200.415) - Has to be signed by an official who can legally bind [the] organization
with penalties under the False Claims Act.
Cost Accounting Standards and Disclosure Statement (200.419) - IHE threshold for CAS-covered contracts
raised to $50 million, when it was previously $25 million for the total federal award amount.
Audit Services (200.425) - Allows the costs of a financial statement audit for an entity that does not currently
have a federal award when included in the indirect cost pool as part of a cost allocation plan or indirect cost
proposal. These audits may be useful to the federal agency negotiating an indirect cost rate.
Contributions and Donations (200.434) - The value of a donated item, whether it is a good or a building,
cannot be charged to a federal award as either a direct or indirect cost. Depreciation on donated assets is
permitted in accordance with 200.436 Depreciation as long as the donated property is not counted towards
cost sharing or matching requirements.
Depreciation (200.436) - Clarifies that allowable compensation for the use of buildings, capital improvements,
equipment, and software projects should be based on capitalization in accordance with GAAP instead of the
Government Accounting Standards Board Statement Number 51. Also, a donated asset will have its fair market
value documented at the time of the donation and as the acquisition cost. Such assets may be depreciated or
claimed as matching but not both.
Audit
Audit Requirements (200.501) - The audit threshold has changed from $500,000 to $750,000. This covers
close to 99 percent of all costs while relieving the audit burden from about 5,000 non-Federal entities:
Nonprofits.
Report Submission (200.512) - Audit submissions for financial reports attached to the data collection
form must be a text-based Adobe portable document file (PDF) that is unlocked and unencrypted. Personally
identifiable information must not be included.
Audit Findings (200.516) - Federal agencies will engage auditees to remediate findings on a more streamlined
basis and to reduce questioned costs. The questioned cost reporting threshold will also rise from the current
$10,000 to $25,000. This is the baseline unless it is obvious that these are questioned costs.
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