FISCAL TRAINING FOR LPA SUBRECIPIENTS COLUMBUS, OHIO • MARCH 13, 2018
FISCAL TRAINING FOR LPA SUBRECIPIENTS Michael Miller Lead Auditor – LPA Audit Program Office of External Audits 2 | Fiscal Training for LPA Subrecipients
IN TRANSITION o The Office of External Audits is committed to identifying and implementing procedures which reduce administrative burden while still maintaining compliance with Federal requirements. 3 | Fiscal Training for LPA Subrecipients
AGENDA FOR THIS SESSION o Regulations & Definitions o ODOT – LPA Project Agreement o REVISED Sect. 15.1 Cost Recovery Options o REVISED Sect. 15.2 Federal Reporting o NEW - Effective Periods of Fringe Benefit and Indirect Cost Rates o REVISED - Extensions of Prior ODOT Approved Rates 4 | Fiscal Training for LPA Subrecipients
TOPICS FOR FUTURE WEBINAR SESSIONS o What is Needed for Adequate Documentation of LPA’s Labor Costs on ODOT Projects? o What Documentation is Needed to Obtain an Approved Fringe Rate? o What Documentation is Needed to Obtain an Approved Indirect Rate? 5 | Fiscal Training for LPA Subrecipients
REGULATIONS & DEFINITIONS 6 | Fiscal Training for LPA Subrecipients
2 CFR PART 200 o UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS 7 | Fiscal Training for LPA Subrecipients
§200.74 PASS-THROUGH ENTITY o Pass-through entity means a non- Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program. 8 | Fiscal Training for LPA Subrecipients
§200.92 SUBAWARD o Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. 9 | Fiscal Training for LPA Subrecipients
§200.93 SUBRECIPIENT o Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program. 10 | Fiscal Training for LPA Subrecipients
§200.430 COMPENSATION — PERSONAL SERVICES o Compensation for personal services . . . of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. . . 11 | Fiscal Training for LPA Subrecipients
§200.430 COMPENSATION — PERSONAL SERVICES o Continued . . . o Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. . . 12 | Fiscal Training for LPA Subrecipients
§200.431 COMPENSATION — FRINGE BENEFITS o Fringe benefits are allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages. Fringe benefits include, but are not limited to, the costs of leave (vacation, family-related, sick or military), employee insurance, pensions, and unemployment benefit plans. 13 | Fiscal Training for LPA Subrecipients
§200.431 COMPENSATION — FRINGE BENEFITS o Continued . . . o Except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, non-Federal entity- employee agreement, or an established policy of the non-Federal entity. 14 | Fiscal Training for LPA Subrecipients
PROJECT AGREEMENT Recovery of LPA’s Allocable Project Direct Labor, Fringe Benefits, and/or Indirect Costs 15 | Fiscal Training for LPA Subrecipients
4 COST RECOVERY OPTIONS Sorted in Ascending Order Option 1 = No Recovery Option 2 = DL + De Minimis Option 3 = DL + Fringe + De Minimis Option 4 = DL + Fringe + Indirect 16 | Fiscal Training for LPA Subrecipients
OPTION 1 1. No cost recovery of LPA’s project direct labor, fringe benefits, or overhead costs. 17 | Fiscal Training for LPA Subrecipients
OPTION 1 - EXPLAINED (A) The LPA does not currently maintain an ODOT approved federally compliant time- tracking system, and 18 | Fiscal Training for LPA Subrecipients
OPTION 1 - EXPLAINED (B) The LPA does not intend to have a federally compliant time- tracking system developed, implemented, and approved by ODOT prior to the period of performance of this project, and/or 19 | Fiscal Training for LPA Subrecipients
OPTION 1 - EXPLAINED (C) The LPA does not intend to pursue recovery of these project direct labor, fringe benefits, or overhead costs during the period of performance of this project agreement. 20 | Fiscal Training for LPA Subrecipients
OPTION 2 2. Direct labor plus indirect costs calculated using the Federal 10% De Minimis Indirect Cost Rate. 21 | Fiscal Training for LPA Subrecipients
OPTION 2 - EXPLAINED (A) The LPA currently maintains, or intends to develop and implement prior to the period of performance of this project, an ODOT approved federally compliant time-tracking system, and 22 | Fiscal Training for LPA Subrecipients
OPTION 2 - EXPLAINED (B) The LPA does not currently have, and does not intend to negotiate, an ODOT approved fringe benefits rate prior to the period of performance of this project. 23 | Fiscal Training for LPA Subrecipients
OPTION 3 3. Direct labor, plus fringe benefits costs calculated using the LPA’s ODOT approved Fringe Benefits Rate, plus indirect costs calculated using the Federal 10% De Minimis Indirect Cost Rate. 24 | Fiscal Training for LPA Subrecipients
OPTION 3 - EXPLAINED (A) The LPA currently maintains, or intends to develop and implement prior to the period of performance of this project, an ODOT approved federally compliant time-tracking system, and 25 | Fiscal Training for LPA Subrecipients
OPTION 3 - EXPLAINED (B) The LPA currently has, or intends to negotiate, an ODOT approved fringe benefits rate prior to the period of performance of this project. 26 | Fiscal Training for LPA Subrecipients
OPTION 4 4. Direct labor, plus fringe benefits costs calculated using the LPA’s ODOT approved Fringe Benefits Rate, plus indirect costs calculated using the LPA’s ODOT approved Indirect Cost Rate. 27 | Fiscal Training for LPA Subrecipients
OPTION 4 - EXPLAINED (A) The LPA currently maintains, or intends to develop and implement prior to the period of performance of this project, an ODOT approved federally compliant time-tracking system, and 28 | Fiscal Training for LPA Subrecipients
OPTION 4 - EXPLAINED (B) The LPA currently has, or intends to negotiate, an ODOT approved fringe benefits rate prior to the period of performance of this project, and 29 | Fiscal Training for LPA Subrecipients
OPTION 4 - EXPLAINED (C) Instead of using the Federal 10% De Minimis Indirect Cost Rate, the LPA currently has, or intends to negotiate, an ODOT approved indirect cost rate prior to the period of performance of this project. 30 | Fiscal Training for LPA Subrecipients
COMPARISON OF OPTIONS 1 - 4 OPTION 1 OPTION 2 OPTION 3 OPTION 4 DIRECT LABOR 0% $ - $ 5,000.00 $ 5,000.00 $ 5,000.00 FRINGE BENEFITS 0% $ - 0% $ - 65% $ 3,250.00 65% $ 3,250.00 SUBTOTAL $ - $ 5,000.00 $ 8,250.00 $ 8,250.00 INDIRECT COSTS 0% $ - 10% $ 500.00 10% $ 825.00 20% $ 1,650.00 OTHER PROJECT DIRECT COSTS 100% $ 10,000.00 100% $ 10,000.00 100% $ 10,000.00 100% $ 10,000.00 TOTAL COSTS $ 10,000.00 $ 15,500.00 $ 19,075.00 $ 19,900.00 Option 1 The LPA has not received approval to bill labor costs to ODOT projects. Accordingly, the fringe and indirect costs are both $0 because the base (direct labor) is $0. 31 | Fiscal Training for LPA Subrecipients
COMPARISON OF OPTIONS 1 – 4 CONTINUED OPTION 1 OPTION 2 OPTION 3 OPTION 4 DIRECT LABOR 0% $ - $ 5,000.00 $ 5,000.00 $ 5,000.00 FRINGE BENEFITS 0% $ - 0% $ - 65% $ 3,250.00 65% $ 3,250.00 SUBTOTAL $ - $ 5,000.00 $ 8,250.00 $ 8,250.00 INDIRECT COSTS 0% $ - 10% $ 500.00 10% $ 825.00 20% $ 1,650.00 OTHER PROJECT DIRECT COSTS 100% $ 10,000.00 100% $ 10,000.00 100% $ 10,000.00 100% $ 10,000.00 TOTAL COSTS $ 10,000.00 $ 15,500.00 $ 19,075.00 $ 19,900.00 Option 2 The LPA is authorized to bill direct labor costs but has not negotiated a fringe benefits rate. Accordingly, the indirect costs using the 10% de minimis indirect costs rate are 10% of the base (direct labor of $5000). 32 | Fiscal Training for LPA Subrecipients
COMPARISON OF OPTIONS 1 – 4 CONTINUED OPTION 1 OPTION 2 OPTION 3 OPTION 4 DIRECT LABOR 0% $ - $ 5,000.00 $ 5,000.00 $ 5,000.00 FRINGE BENEFITS 0% $ - 0% $ - 65% $ 3,250.00 65% $ 3,250.00 SUBTOTAL $ - $ 5,000.00 $ 8,250.00 $ 8,250.00 INDIRECT COSTS 0% $ - 10% $ 500.00 10% $ 825.00 20% $ 1,650.00 OTHER PROJECT DIRECT COSTS 100% $ 10,000.00 100% $ 10,000.00 100% $ 10,000.00 100% $ 10,000.00 TOTAL COSTS $ 10,000.00 $ 15,500.00 $ 19,075.00 $ 19,900.00 Option 3 The LPA is authorized to bill direct labor costs and has negotiated a fringe benefits rate of 65%. Accordingly, the indirect costs using the 10% de minimis indirect costs rate are 10% of the base (direct labor of $5000 plus fringe of $3250). 33 | Fiscal Training for LPA Subrecipients
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