Are you struggling to keep up with all the changes to the grant regulations in 2 CFR Part 200?

Well hold on to your hat, because they released some more changes last month.

Here are four updates for grant managers:

Update #1: Extension of the Procurement Grace Period to Two Years

The grace period for implementation of the new procurement standards contained in sections 2 CFR 200.317 through 200.326 in the new grant regulations has been extended to two fiscal years.

Now this doesn’t mean you don’t’ have to comply with any procurement standards, it just means that you can choose the old or new regulations to follow during this grace period.

Additionally, the grant recipient is required to document their choice of which procurement standards they are following in the internal procurement policies.

(Originally the grace period was for a one year period, but recently was extended to two years. Get more details about how this works at https://blog.myfedtrainer.com/procurement-rules-too-good-to-be-true/)

Update #2: The Method to Send Excess Interest Earned on Federal Funds

The new grant regulations in Section 200.305 increased the threshold on interest earned on Federal funds that needed to be remitted to Department of Health and Human Services to $500.

(In the old days, you had to send back any interest earned in excess of $250 annually.)

Now you can keep the first $500, but no longer can you send this to HHS via check.

That’s so…old school!

The most recent update includes the requirement to remit the excess interest earned electronically via Fedwire or Automated Clearing House (ACH) payment to the HHS Payment Management System. (PMS)

Next, grant recipients need to include all relevant information about the payment that will help it get posted correctly.

This includes things like:

• Award recipient name
• Payee Account Number (PAN)
• Agency Information

(Of course the missing information in this update is just how much money you would have to have sitting in an account to generate over $500 of interest in this low rate environment we have been in for the last many years….)

Update #3: Tuition Benefits for Institutions of Higher Education (IHE’s) and others…

The latest update provided more details on section 200.431 Compensation—fringe benefits and the inclusion of tuition benefits for individual employees.

First of all, the main part of this update is directed at IHE’s.

It explicitly allows for tuition benefits for employees as long as the benefits are part of the established policies and spread across the organization’s activities equitably.

In other words, you can’t have a special group of employees who work on Federal awards getting tuition benefits that nobody else is eligible to receive.

Next, you can’t skew the tuition benefits towards highly compensated employees.

In other words, the plan can’t be discriminatory towards a class of employees.

Finally, the update limits tuition benefits employees who are NOT employed by an IHE to the amount specified in section 127 of the IRS code as the tax-free benefit allowed to employees.

Update #4: Items to Include in an Allocated Central Services Plan

If you are a state or local government with a Central Service Cost Allocation Plan, the update has added some clarification to what to include in the plan.

For every central service that you are allocating, your plan must include:

• A short summary of the services provided
• Who (what agency or business unit) is providing the service
• Who is receiving the services
• What types of expenses are included in the costs that are being allocated
• What method you are using to allocate the costs
• Summary worksheet of how each service is allocated to the agencies which are receiving the services.

There’s sure to be more updates and clarifications in the coming months, so stay tuned for updates.

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Author:

Lucy Morgan CPA, MBA

CEO, Compliance Warrior

Author of “Decoding Grant Management-The Ultimate Success Guide to the Federal Grant Regulations in 2 CFR Part 200” The 2nd Edition is now available on Amazon in Paperback and Kindle versions.