08 CAPTURE. COSTTREE 2016 Q3 ISSUE
The word compliance always seems to have a negative connotation to it. Why is that? Why do we always think that following the rules is bad, hard, costly, or confusing? Does it have to be? NO! Compliance is defined as “the act or process of doing what you have been asked to do” (The Merriam Webster Dictionary). Compliance can be looked at as a set of rules to follow and even the playing field, much like the Uniform Guidance (2 CFR Part 200) has set out to do, as it relates to audit requirements and indirect cost calculation rules. The Uniform Guidance has brought eight circulars together to create one set of rules to follow.
Instead of thinking of it as something scary and hard to do, we need to shift our thinking and look at it as if it is a new game that we have never played. We read the directions to find guidance on how the game works, what the first step is, and how to win. What we will get is not something scary but a tool to find compliance in the best way.
The Uniform Guidance is in effect now, so it is no longer an option. So, how do we start the “game?” For the first time, agencies of all types—federal, state, local, special districts, Indian tribes, education, and nonprofits alike—are on a level playing field. It might not seem like it, but that was one of the purposes of the Uniform Guidance. The first step was bringing it together, and now the job is for each of these agencies, at every level, to find their role in compliance. There is a learning curve, and learning the rules is the first step. From there, it’s a matter of perfecting the game. Whether you’re a federal auditor, grantor, grantee, sub-recipient, finance person, etcetera, each person will play a different role in the Guidance.
In order to move towards compliance, you have to first break down the parts of the Guidance and focus on what is necessary for your particular position. The Guidance is over one hundred pages of very small, fine print. At first glance, it is overwhelming, and there is too much information. It is necessary to look at the Guidance as sections for different roles, and then you can begin to realize that you are not responsible for the WHOLE thing.
There are six subparts (A to F) and twelve appendixes. Each of these parts has a very specific purpose. Some of these subparts will be used by everyone—like Subpart A, which is Acronyms and Definitions and Subpart B, which is General Provisions. But then, as you move your way through the rest, you will see that some things relate to Pre Award (Subpart C), Post Award (Subpart D), Cost Principles (Subpart E), or Audit Requirement (Subpart F). So, if you are responsible for, say, the pre award, you might only care about Subpart C. If you are responsible for calculating the indirect cost, then you would look at Subpart E. Whatever you are responsible for, there is a section that you can focus on, and the whole document will not necessarily pertain to you.
BREAKING DOWN THE UNIFORM GUIDANCE
MOVING TOWARDS COMPLIANCE
moving towards compliance