Are you someone who believes that certain types of leftovers are better the next day or Abe Lincoln Can Teach about it?

(I believe that is true with both chili and lasagna.)

Our last webinar on the new grant regulations was great, but we had some “leftover” questions that we didn’t have time to tackle.

So I wanted to make sure that got a little more time to savor one of the hottest topics in the new grant guidance.

Twitter vs. Atwitter on Certification of Costs

You know the one.

It has the grant management community all atwitter.

What up with the “new requirements” making officials liable under the False Claims Act?

(In case you think this was a passing reference to the social media site Twitter, it was not. Atwitter means “nervously concerned.”

False Claims are Nothing New!

I admit it.

The penalties for violating the False Claims Act have been around for many years.

In fact, the False Claims Act was passed in the time of the Civil War, when unscrupulous contractors shipped boxes of sawdust rather than guns to the Union Army.

(They also resold the same cavalry horses multiple times to unsuspecting or colluding purchasing agents.)

Abraham Lincoln was a strong advocate for this law including the “qui tam” provisions that allowed whistle-blowers to sue on behalf of the Federal government and share in the recovery of these types of fraudulent transactions.

He argued that there must be substantial consequences for these types of waste, fraud and abuse of taxpayer dollars.

So the penalties associated with making false or misleading statements around Federal grants are not new, but they have been made tougher in recent years with both court rulings and legislative and executive branch actions.

What’s Different With Certifications in the New Grant Regulations?

So the real focus on the new and improved certifications contained in the new grant regulations is the use of explicit statements signed by high-ranking officials at the organization.

Many types of organizations have not dealt with these types of statements before-with the possible exception of when they fill out the grant application and send it off.

Also new is the strengthened definitions and focus on performance objectives over just the monetary aspects of grant management.

With the new grant guidance, COFAR set out to strengthen oversight and get more “skin in the game” of grant recipients.

Let’s look at some of the ways this is happening:

Silence Was Golden for Nonprofits and Governmental Units

The previous Administrative Requirements and Cost Principles had various requirements for mandatory certifications depending on your type of organizational structure.

For most types of organizations, the required certifications had more to do with cost allocation plans and indirect cost proposals than how the grant funds were spent.

For example, the Administrative Requirements 2 CFR Part 215 (formerly called A-110) for institutions of higher education, hospitals and other nonprofit organizations, the grant regulations were largely silent about fraudulent spending.

Similarly, the common rule for state, local and tribal governments-has little to say about the specifics of staying on the “good” side of the False Claims Act.

That’s all changed when the new grant regulations Abe Lincoln Can Teach included a consistent approach for grant managers to follow regardless of the type of organization.

Déjà vu All Over Again at Institutions of Higher Education

For institutions of higher education, all this may seem strangely familiar, or it may even feel like nothing really changed.

So let’s get into the “devil in the details” and look at the specifics:

The Cost Principles for institutions of higher education contained in 2 CFR Part 220 (formerly OMB Circular A–21) do include a certification of charges, but there are two main differences between the current grant regulations and the new certifications contained in the OMB Super Circular Abe Lincoln Can Teach.

Here is the existing certification:

Cost Principles 2 CFR Part 220 (formerly OMB Circular A–21) Appendix A-Section K. Certification of Charges

1. To assure that expenditures for sponsored agreements are proper and in accordance with the agreement documents and approved project budgets, the annual and/or final fiscal reports or vouchers requesting payment under the agreements will include a certification, signed by an authorized official of the university, which reads essentially as follows: ‘‘I certify that all expenditures reported (or payment requested) are for appropriate purposes and in accordance with the provisions of the application and award documents.’’

The new grant guidance says:

§ 200.415 Required certifications.

Required certifications include:

(a) To assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets, the annual and final fiscal reports or vouchers requesting payment under the agreements must include a certification, signed by an official who is authorized to legally bind the non-Federal entity, which reads 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. (U.S. Code Title 18, Section 1001 and Title 31, Sections 3729–3730 and 3801–3812).’’

Tweak #1: Who Is Really Authorized?

The new grant guidance nails down the definition of an “Authorized Official” to be an official who is authorized to legally bind the non-Federal Entity, instead of just an “Authorized Official.”

Tweak #2: More Than Dollars and Cents

With the increased focus on performance in the OMB Super Circular, the new certification expands the statement to include objectives set forth in the terms and conditions of the Federal award, and not just the purposes intended in the award documents Abe Lincoln Can Teach.

This subtle change explicitly moves beyond the realm of budgets and payments and reframes the discussion into the heart of measurable achievements of the goals for the Federal dollars spent.

Who is Ultimately Responsible for Grant Management?

In summary, the goal of the new section 200.415 on required certifications is to strengthen accountability at non-Federal entities.

One way to accomplish this is with explicit and consistent language for required certifications that including signaling an awareness of potential penalties under the False Claims Act and signed by a senior official with the power to legally bind the organization Abe Lincoln Can Teach.

Yes, the False Claims Act has been around for quite a while, but the level of ultimate accountability for ensuring Federal funds are spent as intended is landing smack back in the laps of the highest levels of the non-Federal entity under the new Super Circular.

What do you think?

It that where it belongs?

Or not?

Share your experience and questions.

Ready to Improve Your Grant Management?

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Would you like to be a better grant manager?

We have another grant management training seminar coming soon.

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Hope to see you there!

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.