Office of
Sponsored Programs

Federal Circulars

GENERAL

Purpose

This SHARPI provides clarification to the research community regarding the underlying cost, administrative and audit principles that serve as the foundation for all federal awards, as well as disseminate information relevant for day-to-day administrative operation. Knowledge and observance of these principles forms the best operational basis in which to make decisions that safeguard the financial environment associated with sponsored research and reflect best business practices.

Administration

The Office of Sponsored Programs is responsible for maintenance and review of this SHARPI.

GENERAL DISCUSSION AND INFORMATION

Federal Circulars are instructions or information issued by the Office of Management and Budget (OMB) to Federal agencies. These are expected to have a continuing effect of two years or more. Institutions of higher education are guided by three different circulars:

  • OMB A-21 - "Cost Principles for Educational Institutions"
  • OMB A-110 - "Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations"
  • OMB A-133 - "Audits of States, Local Governments and Non-Profit Organizations"

It is further noted that the federal circulars are predicated on bodies of regulation found in specific Codes of Federal Regulation (CFR) and ultimately law found in the United States Code (USC).

SPECIFIC INFORMATION

OMB, A-21

  • "This Circular establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions." With this statement the government clarifies that this circular shapes all cost determination regardless of the award vehicle, i.e., whether it is a grant, contract, or cooperative agreement.
  • The following items - although not exhaustive - provide reference for some common cost items found in proposal and award budgets:
    • Factors affecting allowability of costs - (C2) - reasonable; allocable; consistent treatment
    • Allocable costs - (C4a(1)) - ...incurred solely to advance the work under the sponsored agreement
    • Allocable costs - (C4b) - BASIS FOR COST TRANSFERS - ...costs ...may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement...
    • Direct costs - (D1) - direct costs are those "that can be identified specifically with a particular sponsored project"
    • Salary rates for academic year - (J10d(1)) and Salary rates outside the academic year- (J10d(2)(a))
    • Equipment - (J18)
    • Losses on other sponsored agreements - (J29)
    • Material and supplies costs - (J32)

OMB, A110

  • "This Circular sets forth standards for obtaining consistency and uniformity among Federal agencies in the administration of grants to and agreements with institutions of higher education, hospitals, and other non-profit organizations." With this statement the government clarifies that this circular shapes all administrative principles such as award conditions, debarment, financial management, program income, procurement and property management.
  • The following items - although not exhaustive - provide reference for some common administrative considerations embedded in award management:
    • Definitions - (A2)
    • Subawards - (A5) - clarification that provisions of A-110 shall be applied to subrecipients performing work under awards if such subrecipients are institutions of higher education
    • Annual certifications and representations - (B17)
    • Standards for financial management systems - (C21)
    • Cost-sharing or matching - (C23)
    • Program income - (C24)
    • Revision of budget and program plans - (C25)
    • Period of availability of funds - (C28)
    • Real Property - (C32)
    • Equipment - (C34)
    • Supplies and other expendable property - (C35)
    • Procurement Standards - (C40-48)
    • Monitoring and reporting program performance - (C51)
    • Financial reporting -(C52)
    • Record retention - (C53)
    • Closeout procedures - (D71)

OMB, A-133

  • "This part sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards." With this statement the government clarifies that this circular shapes all elements that deal with auditing any recipient's, or subrecipient's, expenditure and management of federal funds, i.e., the items contained in OMB A-21 and A-110.
  • The following items - although not exhaustive - provide reference for some common audit considerations embedded in award receipt and management:
    • Definitions - (A105)
    • Audit requirements - (B200)
    • Subrecipient and vendor determinations - (B210) - this section gives instruction on how to determine if a recipient is a subrecipient or a vendor
    • Auditee responsibilities - (C300-320)
    • Federal agencies and pass-through entities - (D400-405)
    • Auditors - (E500-530) - this section describes the audit process for the university's required A-133 audit. OSP assists the university's pision of Finance in the preparation of this annual audit document.