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Thompson’s Grants Compliance Expert quoted Venable nonprofit attorneys from a recent seminar/webinar they hosted on "The OMB Super Circular: What the New Rules Mean for Nonprofit Recipients of Federal Awards." Dismas Locaria, who spoke on the panel, said the new uniform grant reform guidance – a merger of eight previous grant circulars – “equates to a more formal, contract-like set of rules [for federal grantees].”

Melanie Jones Totman, who also spoke on the panel, said the more standardized pre-award process is “very good news,” saying it “will be an improvement for nonprofits because it will increase efficiency.” The guidance also expects nonprofit grantees to give written assurance that the project was completed or the level of effort expended, which emphasizes performance and results. Locaria said this has “turned the grant community on its head,” adding that it is an entirely different award type.

Locaria and Totman praised the changes to indirect costs, including the requirement that pass-through entities honor a nonprofit’s negotiated indirect cost rate or negotiate a rate. This is significant, said Locaria, because “in the past, many state and local governments simply did not pay indirect costs.”

Remarking on changes to indirect controls, Totman said “The government wants reasonable assurance that you are spending grant funds the way that you said you would and in compliance with federal requirements.” Jeff Tenenbaum, who moderated the panel, urged a top-to-bottom approach with internal controls. “It’s so critical you have solid internal controls,” he said. “Your internal controls, however, are only as good as the people who implement them,” he said while also stressing the need to conduct regular staff training.

Under the new guidance, nonprofit recipients of federal awards also must disclose in a timely manner violations of federal criminal law potentially affecting the federal award. “This is a very strict requirement with serious ramifications that can result in suspension or debarment,” said Locaria.

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