Updated April 2025

How to Use this Guide

All Office of Management and Budget (OMB) guidance related to Federal Awards is consolidated in Title 2 of the CFR, Subtitle A, Chapter II, Part 200. This “Uniform Guidance” is available for review at https://www.ecfr.gov.

The Colorado Office of the State Controller (OSC) has issued this Guide as its interpretation of new and revised requirements that are mandatory for administration of Federal Awards by the State, its Departments and Agencies, and Institutions of Higher Education (IHEs) who are subject to State Fiscal Rules. The State, its departments, institutions, agencies, and IHEs are referred to collectively in this Guide as “State Agencies”. Though all IHEs must follow the Uniform Guidance, those IHEs who are not subject to State Fiscal Rules are not required, but may elect, to comply with this Guide. All State Agencies except IHEs who are not subject to State Fiscal Rules must comply with this Guide.

The purpose of this Guide is to advise State Agencies of best practices for compliance with the Uniform Guidance, to develop a statewide approach to Uniform Guidance implementation, and to avoid the need for multiple, specific waivers from State Fiscal Rules and Procurement Rules where the Uniform Guidance conflicts with such Rules.

State Agencies are responsible for compliance with the Uniform Guidance as “Recipients” of Federal Awards, and as “Pass-through Entities” (PTEs) that provide subawards to other non-federal entities to carry out part of a federal program. (2 CFR §200.1)

State Agencies must also follow existing procedures set forth in the Colorado Revised Statutes, State Procurement Code and Rules, State Fiscal Rules, Executive Orders, and the directives of the State Purchasing & Contracts Office. State Agencies are responsible as awardees and as PTEs of Federal Awards to ensure “that the Federal Award is used in accordance with federal statutes, regulations and the terms and conditions of the Federal Award”. (2 CFR §200.332(b)(2))

Pre-Award Considerations

Applicability - The terms and conditions of Federal Awards flow down to Subrecipients unless a particular section of 2 CFR §200.101 or the terms and conditions of the Federal Award specifically indicate otherwise. Users of this Guide should consult 2 CFR §200.101 for the applicability of the Uniform Guidance to the types of Federal Awards.

     OSC Note: Applicability to Modifications. If award subject to the Uniform Guidance is renewed or otherwise modified after October 1, 2024 (the effective date of the Uniform Guidance), the terms and conditions of the award must be updated to be brought into compliance with the Uniform Guidance.

Federal Conflict of Interest Rules (2 CFR §200.112) - The Uniform Guidance requires Recipient or Subrecipient must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity in accordance with the established Federal agency policies. 

    OSC Note: OSC’s Conflict of Interest Policy. The OSC has issued a policy entitled “Procurement Conflicts of Interest” that applies to all workers and subrecipients, as defined in the policy, who receive funds from the State of Colorado. The policy applies to all employees and volunteers of the executive branch of state government, as well as Subrecipients who receive funds including pass-through funds from the State. The policy is available on the OSC website.

Financial Management (2 CFR §200.302) – The Uniform Guidance requires all Recipients and Subrecipients to expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the funds. 

Subrecipient and Contractor Determination by State Agencies (2 CFR §200.331) - State Agencies must determine whether an awardee is a subrecipient or a contractor. A Subrecipient is an entity that receives a subaward from a PTE to carry out part of a federal award. A subrecipient is not a contractor because program compliance requirements do not pass through to contractors. There may be unusual circumstances or exceptions to the characteristics of subrecipients and contractors. In making the determination of whether a subrecipient or contractor relationship exists, the substance of the relationship is more important than the form of the agreement. It is not expected that all of the characteristics will be present for every subrecipient. Judgment may need to be used in determining whether an entity is a subrecipient or contractor. Further, an entity may concurrently receive federal awards as a direct recipient, subrecipient, and contractor, depending on the substance of the agreements. OSC Subrecipient vs Contractor Determination Tool

Subrecipient (2 CFR 200.331) - Characteristics that support the classification of the entity as a subrecipient include, but are not limited to, when the entity:

• Determines who is eligible to receive what federal assistance;
• Has its performance measured in relation to whether the objectives of the federal program were met;
• Has responsibility for programmatic decision-making authority;
• Is responsible for adherence in applicable federal program requirements specified in the Federal Award; and
• Implements a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the PTE.

Contractor (2 CFR 200.331) - A Contractor (recipient of payment pursuant to a Contract) has the following characteristics:

• Provides the goods and services within normal business operations;
  • Provides similar goods or services to many different purchasers;
  • Normally operates in a competitive environment;
  • Provides goods or services that are ancillary to the implementation of the federal program; and
  • Is not subject to compliance requirements of the Federal program as a result of the agreement, however similar requirements may apply for other reasons.

Award Considerations

Procurement Standards (2 CFR §§200.317 to 200.327) - When conducting procurement transactions under a Federal award, a State or Indian Tribe must follow the same policies and procedures it uses for procurements with non-Federal funds. If such policies and procedures do not exist, States and Indian Tribes must follow the procurement standards in §§ 200.318 through 200.327. In addition to its own policies and procedures, a State or Indian Tribe must also comply with the following procurement standards: §§ 200.321, 200.322, 200.323, and 200.327. All other recipients and subrecipients, including subrecipients of a State or Indian Tribe, must follow the procurement standards in §§ 200.318 through 200.327.

Contracts - If State Agencies determine that the receiver of value from the State will be a Contractor, they must follow the Procurement Code when procuring goods and services under a Federal Award. (2 CFR §200.317) The terms of a Federal Award to the State do not flow down to a Contractor with whom the State contracts for any part of the performance under the Federal Award.

Grant Agreements - If State Agencies determines a Subrecipient relationship, they must negotiate Grant Agreements, as defined in State Fiscal Rules.

     OSC Note: OSC Approval of Grant Agreements (CRS §24-30-202) - State law requires that there be no disbursement of funds by the State absent a commitment voucher (including Grant Agreement) that has been examined and approved by the OSC. The OSC has issued a policy entitled “Grant Agreements – Federal Subrecipient” that outlines the conditions under which it must approve and sign Grant Agreements upon receipt of an Advice or Notice of Federal Award. 

     OSC Note: OSC Grant Agreement templates – all OSC approved grant agreement templates have been updated to include the Whistleblower Protection language. State Agencies should ensure that Subrecipients are aware of this new language.

Whistleblower Protections (2 CFR §200.217) The Uniform Guidance states that an employee of a Recipient or Subrecipient must not be discharged, demoted, other otherwise discriminated against as a reprisal for disclosing to a person or body described in paragraph (a)(2) of 41 U.S.C. 4712 information that the employee reasonably believes is evidence of gross mismanagement of a Federal contract or grant, a gross waste of Federal funds, an abuse of authority relating to a Federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract (including the competition for or negotiation of a contract) or grant. The recipient and subrecipient must inform their employees in writing of employee whistleblower rights and protections under 41 U.S.C. 4712. See statutory requirements for whistleblower protections at 10 U.S.C. 4701, 41 U.S.C. 4712, 41 U.S.C. 4304, and 10 U.S.C. 4310. 

      OSC Note: Templates. State Agencies must use the Grant Agreement templates developed by the OSC and available at the OSC website for Subawards of Federal Awards to Subrecipients.

Post Award Considerations

Internal Controls - Recipients and Subrecipients must establish, document and maintain effective internal control over the Federal Award that provides reasonable assurance that the recipient or subrecipient is managing the Federal Award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. These internal controls should align with guidance contained in “Standards for Internal Control in the Federal Government” (commonly referred to as the “Green Book,” issued by the Comptroller General of the U.S.). (2 CFR §200.303)

Internal controls means a process, implemented by a recipient or subrecipient, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

• Effectiveness and efficiency of operations,
• Reliability of reporting for internal and external use, and
• Compliance with applicable laws and regulations

     OSC Note: OSC Adoption of Internal Control Standards. Based on 2 CFR §200.303, the OSC has adopted the “Standards for Internal Control in the Federal Government” (the “Green Book”) as the standard for internal control for Federal Awards to State Agencies (see the OSC policy, “Internal Control System” available on the OSC website). State Agencies must follow the Green Book to maintain effective internal control related to administering federal grant funding.

Payment and Advance Payment - The PTE is not required to make advance payments pursuant Federal Awards passed through to Subrecipients. Pursuant to 2 CFR §200.305(a), State payments are governed by Treasury-State Cash Management Improvement Act agreements (CMIA agreements) and the default procedures codified at 31 CFR Part 205 for rules on efficient transfer of federal funds.

     OSC Note: OSC Exception to State Fiscal Rule. The OSC and State Fiscal Rules generally prohibit advance payments, however, the Fiscal Rules allow an exception for federal grants awarded by the State to subrecipients in compliance with federal requirements that may be included in the Federal Award itself. (2 CFR §200.305)

Cost Sharing (2 CFR 200.306) - For all Federal awards, a PTE must accept any cost sharing funds (including cash and third-party in-kind contributions, and also including funds committed by the recipient, subrecipient or third parties) as part of the recipient’s or subrecipient’s contributions to a program when the funds:

• Are verifiable in the recipient’s or subrecipient’s records;
• Are not included as contributions for any other Federal award;
• Are necessary and reasonable for achieving the objectives of the Federal award; Are allowable under subpart E;
• Are not paid by the Federal Government under another Federal award, except where the program's Federal authorizing statute specifically provides that Federal funds made available for the program can be applied to cost sharing requirements of other Federal programs;
• Are provided for in the approved budget when required by the Federal agency; and
• Conform to other applicable provisions of this part.

Program Income (2 CFR 200.307) -  The Uniform Guidance states that recipients and subrecipients are encouraged to earn income to defray program costs when appropriate. Program income must be used for the original purpose of the Federal award. Program income earned during the period of performance may only be used for costs incurred during the period of performance or allowable closeout costs. See 2 CFR 200.472(b). Program income must be expended prior to requesting additional Federal funds. Program income exceeding amounts specified in the Federal award may be added to or deducted from the total allowable costs in accordance with the terms and conditions of the Federal award.

Required Certifications (2 CFR 200.415 (b)) - Subrecipients under a Federal award must certify to the PTE whenever applying for funds, requesting payment, and submitting financial reports.

      OSC Note: State Agencies Administering Federal Funds must include the following certification language in all applications, reimbursement requests, and financial reports:

      “I certify to the best of my knowledge and belief that the information provided herein is true, complete, and accurate. I am aware that the provision of false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil, or administrative consequences including, but not limited to violations of the U.S. Code Title 18, Sections 2, 1001, 1343, and Title 31, Sections 3729-3730 and 3801 -3812.”

Responsibilities of State Agencies - State Agencies have the following responsibilities regarding Subrecipients (which are not necessarily required with Contractors):

• Require Subrecipients to submit regular financial reports (2 CFR §200.328(c)) and performance reports (2 CFR §200.329(c)(1), within 90 days after annual reporting periods and within 30 days after quarterly or semi-annual reporting periods.
• Require Subrecipients to compare actual accomplishments to the objectives of Federal Awards, and provide explanations of variance in program objectives and fund maximization. (2 CFR §200.329(c)(2))
• Verify that Subrecipients are not excluded or disqualified in accordance with §180.300 by confirming in SAM.gov that a subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds.
  • Hold Subrecipients responsible for compliance with applicable federal, State and local program requirements, rules, policies and guidance. (2 CFR §200.332(b)(2)).
• Verify that all Subrecipients are audited in accordance with 2 CFR §200, Subpart F—Audit Requirements, when the $1,000,000 threshold has been met or exceeded. (2 CFR §200.332(g))
• Consider whether Subrecipient audit results, on-site monitoring reviews, or other monitoring activities indicate conditions that require adjustments to the State PTE’s own related records. (2 CFR §200.332(h))
• Monitor Subrecipient entities for programmatic and fiscal compliance with applicable program requirements to ensure that the Subaward is used for authorized purposes, that the Subrecipient complies with federal statutes and regulations, and that the terms and conditions of the Federal Award and performance goals are achieved. (2 CFR §§200.332(e))
• Include in Grant Agreements the proper terms and conditions for determining allowability of indirect cost rates. (2 CFR §200.414)

     OSC Note: OSC Interpretation of OMB Procurement Standards. State Agencies, as PTEs, are responsible for ensuring that their Subrecipients who either (i) hire a Contractor to provide goods or services, or (ii) make Subawards to Subrecipients use one of the methods of procurement as outlined in the Uniform Guidance (2 CFR §200.320, the “CLAW”). Even if only a portion of the grant funds are federal grant funds, the State Agency is responsible for ensuring that it’s Subrecipient applies the CLAW. For further information on following the Uniform Guidance’s procurement standards, see the “Office of the State Controller OMB Subrecipient Procurement Guidance”, available at the OSC website.

The CLAW, however, does not apply to a State Agency when the State Agency directly hires a Contractor to provide goods or services under a Federal Award through a Contract. In these instances, State Agencies must follow the methods, policies, and procedures of the State Procurement Code. (2 CFR §200.317)

Nor does the CLAW apply to State Agencies when State Agencies, as PTEs, make Subawards to Subrecipients. In this instance, the State Agency’s grant to a Subrecipient is subject to neither the CLAW nor the State Procurement Code, but is subject to the OSC Policy “Competition Requirements for Grants”.

The State Agency exemption from following the CLAW applies to State Agencies regardless of whether the State Agency is the original Recipient of the Federal Award or a Subrecipient passing through funds to another State Agency.

Risk Assessment - A PTE must evaluate each Subrecipient’s risk of noncompliance with federal statutes, regulations, and terms and conditions of the Subaward for purposes of determining the appropriate Subrecipient monitoring. (2 CFR §200.332(c)) The PTE must administer the Uniform Guidance risk assessment only after selection of Subrecipients is complete, i.e., after the Subrecipient has met all criteria for receiving the Subaward. The Uniform Guidance risk assessment is not part of the process for determining which entities will receive Subawards.

     OSC Note: Risk Assessment of a State Agency. State Agencies, as Subrecipients of State Agency PTEs, shall be considered ‘low’ risk for purposes of compliance with 2 CFR §200.332(c). Any change will be communicated through the Office of the State Controller.

Risk Assessment Tool. State Agencies must use a risk assessment tool, or a similar method designed to measure associated risk. A sample “Risk Assessment Tool” is available at the OSC website. Risk assessments may be performed using the sample Risk Assessment Tool, a similar tool, or some other method that measures the risks associated with providing federal grant funds to a Subrecipient.

Subrecipient Monitoring and Performance Reporting - Each State Agency must evaluate and monitor its Subrecipient’s compliance with federal statutes and regulations; the terms and conditions of the Subaward; and the Subrecipient’s progress in achieving performance goals. (2 CFR §200.332(e)) Each State Agency must consider initiating enforcement actions against non-compliant Subrecipients. (2 CFR §200.339)

Monitoring of Subrecipients includes reviewing financial and programmatic reports required by the PTE; following up and ensuring that Subrecipients take timely and appropriate action to remediate all deficiencies related to the Federal Award provided to the Subrecipient that were disclosed through audits, on site reviews, or other means; and issuing management decisions for audit findings associated with a Federal Award. (2 CFR §200.332(e)) All management decisions must clearly state whether or not related audit findings are sustained, the reasoning behind conclusions, and the expected Subrecipient response to repay disallowed costs, make financial adjustments, or take other actions as appropriate. (2 CFR §200.521(a)and (c))

     OSC Note: Management Decisions. State Agency PTEs are not required to issue management decisions to other State Agency Subrecipients due to the fact that there is a statewide pro-active process in place for the timely remediation of audit findings found at State entities and the implementation of associated recommendations.

Depending on the PTE’s assessment of risk posed by a Subrecipient, the following monitoring tools may be useful for managing risks. State Agencies are encouraged to use these tools to the greatest extent possible:

• Providing Subrecipients with training and technical assistance on program- related matters,
• Performing on-site reviews of the subrecipient’s program operations,
• Arranging for agreed upon procedures as provided for in 2 CFR §200.425(c).

The Uniform Guidance requires recipients and subrecipients to submit performance reports required by the Federal Awarding Agency/PTE. The purpose of such reports is to inform on improvements in program outcomes and productivity. This reporting should be formally documented and include the essential information as prescribed in the Uniform Guidance. (2 CFR §§200.328-329) Office of the State Controller Guide for Monitoring Subrecipients

Closeout - The Uniform Guidance requires Recipients and Subrecipients to submit all reimbursement requests, and financial, performance and other reports, within 120-days after the end-date for performance. (2 CFR §200.344(b)) In addition, the Uniform Guidance requires all Subrecipients to submit all reimbursement requests, and financial, performance, and other reports required by the subaward to the PTE no later than 90 calendar days after the conclusion of the period of performance of the subaward. (2 CFR §200.344(b))

All property acquired with Federal funds must be accounted for in accordance with 2 CFR §§200.310-316 and 200.330.

     OSC Note: OSC Recommended Subrecipient Closeout Term. To meet the 90-day deadline, the OSC Grant Agreement template allows Subrecipients 45 days to submit all documentation to the State Agency.

Record Retention Period - The Uniform Guidance at 2 CFR §200.334 mandates retention of records for a period of three years from the date of submission of the final financial report. For a Subaward, the three-year record retention period begins at the date of submission of the final expenditure report by the Subrecipient to the PTE. For Federal Awards or Subawards that are renewed quarterly or annually, the three-year record retention period begins on the date of the submission of the quarterly or annual financial report. If litigation or an audit is started before the expiration of the three-year period, the records must be retained until all litigation or audit findings have been resolved. Federal Awarding Agencies and PTEs may not impose any other record retention requirements upon non-Federal entities, except as specifically provided in the Uniform Guidance.

Audit Requirements - Under the Uniform Guidance, the threshold for requiring single audits is $1,000,000. State Agencies should be aware of federal requirements for monitoring the activities of Subrecipients and Contractors, and must fully comply with these requirements when applicable. (2 CFR §200.332) Single or program-specific audits are required for all Subrecipients that receive $1,000,000 or more in Federal Awards during a fiscal year. (2 CFR §200.501) As a result, State Agencies must ensure that their Subrecipients have an audit performed if they meet or exceed the $1,000,000 threshold per fiscal year.

Guidance on determining Federal Awards expended is provided in 2 CFR §200.502. The determination of when a Federal Award is expended is based on when the activity related to the Federal Award occurs. The disbursement of funds to a Subrecipient is an event that triggers recognition of the expenditure. (2 CFR § 200.502(a))

Auditee Responsibilities (2 CFR §200.508) - State Agencies must comply with auditee responsibilities for audits mandated by 2 CFR §200. The audits may be performed by Federal Agencies, outside auditors, and/or the Office of the State Auditor. The auditee is responsible for the requirements related to follow-up and corrective action on all audit findings, including the implementation of associated audit recommendations. This requirement includes preparation of a summary schedule of the status of prior year audit findings and corrective action plan to remediate current year audit findings and implementation of associated recommendations. (2 CFR §200.511)

     OSC Note: OSC Interpretation of Auditee Responsibilities. To comply with Uniform Guidance requirements for preparing a “Summary Schedule of Prior Audit Findings” all State Agencies must respond to the OSC’s related annual data request. The data request requires completion of the “Schedule of Prior Year Audit Recommendation Status as of June 30” (Exhibit K3) of the current fiscal year. The OSC also annually summarizes current year data received from State Agencies on their approved corrective actions taken or planned in compiling the State’s “Corrective Action Plan”. Both the Summary Schedule of Prior Audit Findings and the Corrective Action Plan are part of the State’s reporting package submitted by the OSC to the Federal Audit Clearinghouse and to the U.S. Department of Education via EZ-Audit.

Compliance Supplement - The OMB issues a Compliance Supplement annually. The auditors’ use of the Supplement is mandatory.

Recipients should review 2 CFR §200, Subpart F, Compliance Supplement. This supplement is designed to provide information to auditors to assist in determining compliance requirements that are relevant to an audit, audit objectives, and suggested audit procedures associated with Federal Awards. The information in the supplement is also useful to auditees in understanding the compliance requirements and what to expect during an audit.

     OSC Note: OSC Interpretation of Safe Harbor Status. It should be noted that the Compliance Supplement indicates it is not to be considered a “safe harbor” for identifying the audit procedures that will apply to any particular Federal Award. The auditor may consider the Supplement to be a safe harbor only upon taking certain steps such as considering whether alternative audit procedures are necessary and updating or augmenting requirements as appropriate.

Cost Principles

Uniform Guidance, Subpart E, 2 CFR §§200.400-475, contain the cost principles applicable to Federal Award Recipients, Subrecipients, and PTEs. Instructions relate to developing and negotiating Indirect Cost Rate Proposals (ICRP) and Facilities and Administration Rates (F&A), State Wide Cost Allocation Plans (SWCAP) and Public Assistance Cost Allocation Plans (PACAP), which are presented in separate appendices (Uniform Guidance, Appendices III – VII).

The Objectives:

• Provide guidelines for reimbursement requirements,
• Provide uniform standards for allowability and allocation,
• Provide that Federal Awards bear their fair share of cost,
• Simplify intergovernmental relations, and
• Does not supersede limitations imposed by law.

Types of Costs:

• Allowable - To be allowable as a charge to a Federal Award, a cost must meet a number of criteria. Allowable costs must be documented, necessary, reasonable, allocable, conform to limitations, in accordance with GAAP, net of applicable credits, and consistent with organization’s policies uniformly applied to all activities. (2 CFR §§200.403-406) These criteria are discussed further below.
  • Unallowable - Unallowable costs are not allowable as charges to Federal Awards. Examples include advertising and public relations, alcoholic beverages, contingencies, contributions and donations, prosecution of criminal activities, entertainment, fines, penalties, general costs of government [BJ1] [BJ2] and lobbying costs. Unallowable costs are listed at 2 CFR §200.400 Policy Guide and 2 CFR §§200.420-475.
  • Direct - Direct costs are those costs directly related to the purpose of a Federal Award. Direct costs can be identified specifically with a particular final cost objective. Typical costs that may be charged directly to a Federal Award include personal service and other costs incurred for the Federal Award. (2 CFR §200.413)
  • Indirect - Indirect costs are costs that cannot be linked directly to a Federal Award. Indirect costs are those costs incurred for a common purpose benefiting more than one cost objective. Examples include overhead expenses such as rent and utilities, among other expenses. Indirect Costs are assignable to the cost objective with an allocation to distribute among objectives in reasonable proportion to the benefit received. This proportion is expressed as an indirect cost rate, a percentage of non-direct costs chargeable to a Federal Award (2 CFR (2 CFR §200.414)

Factors Affecting Allowability of Costs (2 CFR §§200.403-406) - To be allowable, costs must meet all of the following requirements:

• Be necessary and reasonable for the performance of the Federal award;
  • Conform to any limitations or exclusions set forth in the Federal award as to types or amount of cost items;
  • Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the Recipient or Subrecipient;
  • Be accorded consistent treatment (a cost may not be assigned to a Federal Award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal Award as an indirect cost).
  • Be determined in accordance with generally accepted accounting principles (GAAP),
  • Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period (§200.306(b)); and,
  • Be adequately documented (§200.300-309).

Uniform Guidance Selected Items of Cost (2 CFR §§200.420-475) - The Uniform Guidance, at 2 CFR §§200.420-475, identifies selected items of cost, and discusses their proper treatment as direct, indirect, allowable, unallowable, or allocable.

Administrative Costs (2 CFR §200.413(c)) - Salaries of administrative and clerical staff are normally indirect costs, unless:

• Such salaries are integral to the project,
• Individuals can be specifically identified, and
• Such costs are not otherwise recovered.

Time and Effort Reporting (2 CFR §200.430(g) - The Uniform Guidance provides that labor records must be supported by a system of internal controls. Salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated.

     OSC Note: OSC Recommendation [BJ3]on Time and Effort Reporting. State Agencies must use a method for time and effort reporting, and the OSC suggests using timecards. IHEs who are not subject to State Fiscal Rules and do not use the state payroll system may continue to use their method for collecting time and effort.

Indirect (Facilities and Administration) Costs (2 CFR §200.414) - As PTEs, State Agencies must include in Grant Agreements the proper terms and conditions for determining allowability of indirect cost rates. An indirect cost rate is required if a Recipient or Subrecipient has a Federal Award for direct cost reimbursement, has more than one funding source, and wishes to request reimbursement of indirect costs. There are three options for recognizing indirect costs:

• Use a current, federally-approved indirect cost rate negotiated between the Subrecipient and the Cognizant Federal Agency, if such a rate exists,
• If no negotiated indirect cost rate exists, a PTE must either use a rate negotiated between the PTE and the Subrecipient, or
• Use the de minimis rate of 15% of modified total direct costs under 2 CFR §200.414.

15% de minimisRate.  Recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 15 percent of the modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. PTEs may not require subrecipients to use a de minimis rate lower than the negotiated indirect cost rate. Recipients and subrecipients are not required to use the de minimis rate. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the Recipient or Subrecipient must use the de minimis rate for all Federal wards until the Recipient or Subrecipient chooses to receive a negotiated rate.

Cost Allocation Plans/ Indirect Cost Rate Proposals (2 CFR §200.416) - To recover indirect costs on Federal Awards, a Recipient or Subrecipient must have either a Cost Allocation Plan or an Indirect Cost Rate Proposal.

Tools to Recover Indirect Costs:

Statewide:

• Statewide Indirect Cost Allocation Plan (Uniform Guidance, Appendix V), and
• Statewide Appropriations/Cash Fees Plan (Prepared for the State’s budget). State Agency:Indirect Cost Rate Proposal (ICRP) (Uniform Guidance, Appendix IV),
• Public Assistance Cost Allocation Plan (PACAP) (Uniform Guidance, Appendix VI), and
• 15% de minimis Rate (2 CFR §200.414).

     OSC Note: OSC’s Policy for Reporting of Indirect Cost Recoveries. Indirect Costs should be recorded when earned in separately identifiable accounts.

Reporting of Indirect Excess Recovery Fund. Each State Agency must transfer any excess revenue collected that exceeds the amount expended to the Excess Indirect Recovery Fund pursuant to CRS §24-75-1401. OSC will annually report the revenues, expenditures and fund balance in each State Agency’s account for this fund to the Joint Budget Committee and the General Assembly on or before November 1st of each year. Indirect Costs should be recorded when earned in separately identifiable accounts.

Required Certifications (2 CFR §200.415) - Annual and final fiscal reports or vouchers requesting payment under Federal Awards must include a certification, signed by an official who is authorized to legally bind the Recipient. Cost allocation plans and Indirect Cost Rate Proposals must be certified by authorized financial officer. In the case of Subrecipients that are not governmental entities, the certifying officer must be someone no lower than a vice president or chief financial officer.

APPENDIX I: Acronyms and Definitions

The following terms are provided for general reference throughout this Guidance, and additional definitions are provided within some of the Guidance sections. For definitions in the Uniform Guidance, see 2 CFR §200.0 to §200.1). For additional grant terminology, see Colorado Grants Management Grant Terminology and Definitions document.

CFR

The Code of Federal Regulations.

Closeout 

The process by which a Federal Agency or PTE determines that all applicable administrative actions and all required work of the Federal Award have been completed and takes actions as described in 2 CFR §200.344.

Colorado Procurement Code 

Articles 101 to 112 of Title 24 of the Colorado Revised Statutes.

CMIA

The Cash Management Improvement Act of 1990, which provides the general rules and procedures for the efficient transfer of funds for federal financial assistance programs between the federal government and the states.

Cognizant Federal Agency 

The cognizant Federal Agency for indirect costs responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals developed under 2 CFR Part 200 on behalf of all Federal Agencies.

Contract

For the purpose of Federal financial assistance, a legal instrument by which a recipient or subrecipient conducts procurement transactions under a Federal Award.

Contractor 

An entity that receives a Contract.

Cooperative Agreements 

A legal instrument of financial assistance between a Federal agency and a recipient or between a pass-through entity and subrecipient where there is substantial, continuing involvement between the Federal Awarding Agency or PTE in carrying out the activity contemplated by the Federal Award. A Cooperative Agreement is not considered a type of grant.

CRS 

The Colorado Revised Statues.

Federal Agency 

An agency, as defined at 5 U.S.C. 551(1) and further clarified by 5 U.S.C. 552(f).

Federal Award 

An award of federal financial assistance or a commitment for cost-reimbursement under the Federal Acquisition Requirements by a Federal Awarding Agency to a Recipient. A Federal Award does not include other contracts that a Federal Agency uses to buy goods or services from a Contractor.

Grant or Grant Agreement

A legal instrument of financial assistance between a Federal agency and a recipient or between a pass-through entity and a subrecipient for which the principal purpose is to transfer anything of value to carry out a public purpose authorized by law and not to acquire property or services for the Federal agency or pass-through entity’s direct benefit or use.

Guidance 

This Colorado State Controller Guidance to State Agencies regarding compliance with the OMB Uniform Guidance (2 CFR Part 200).

OMB 

The Executive Office of the President, Office of Management and Budget.

OMB Procurement Methods 

Following five methods of procurement described in the OMB Uniform Guidance; micro-purchase; small purchase; sealed bids; competitive proposals. (2 CFR §24-50-502(3))

OSC 

Office of the State Controller.

Pass-through Entity (PTE) 

A recipient or subrecipient that provides a Subaward to a Subrecipient (including lower tier subrecipients) to carry out part of a federal program. The authority of the pass-through entity under this part flows through the subaward agreement between the pass-through entity and subrecipient. Where the State is the Recipient of a Federal Award that will be subsequently awarded to one or more Subrecipients, the PTE, for purposes of the Uniform Guidance, shall be the specific State Agency that administers and monitors the Subawards.

Project Cost 

Total allowable costs incurred under a Federal Award and all cost sharing including third-party contributions.

Recipient

An entity that receives a Federal Award directly from a Federal Agency to carry out an activity under a federal program. The term “Recipient” does not include Subrecipients or individuals that are participants or beneficiaries of the award.

State

The State of Colorado.

State Agency

An executive department, institution, or other agency of the State. “State Agency” shall include institutions of higher education, except as otherwise provided in CRS §24-30-202(13)(b).

Subaward

An award provided by a PTE to a Subrecipient for the Subrecipient to contribute to the goals and objectives of the project by carrying out part of a Federal Award received by the PTE. A Subaward does not include payments to a Contractor, beneficiary, or participant. The form of agreement for a Subaward is a grant.

Subrecipient

An entity that receives a Subaward from a pass-through entity to carry out part of a federal award. The term subrecipient does not include a beneficiary or participant. A Subrecipient may also be a Recipient of other Federal Awards directly from a Federal Agency.

Uniform Guidance

The Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, which supersedes requirements from OMB Circulars A-21, A-87, A-110, A-122, A-89, A-102, and A-133, and the guidance in Circular A-50 on Single Audit Act follow up.