When the Uniform Guidance was issued, it brought with it several changes for entities that receive federal awards. The purpose of the Uniform Guidance was to reduce the risk of fraud, waste and abuse as well as to streamline the requirements for several different types of entities that receive federal funds. The Office of Management and Budget (OMB), which issued the Uniform Guidance, put an emphasis on written policies and procedures. Even if your entity doesn’t expend enough federal funds to require a Single Audit, the requirement for written policies over certain areas still applies. Additionally, if you don’t receive any federal funds, it is still a good idea to review your written policies and procedures and update them as needed. Many organizations may have focused on the changing requirements and may have overlooked the need for written policies and procedures. Although your organization probably already has written policies and procedures, the Uniform Guidance requires certain policies to be written. Even existing policies may need to be updated as a result to changes under the Uniform Guidance.
Within the Uniform Guidance (2 CFR 200.303), the OMB requires an entity to establish internal control over the federal awards and recommends following the guidance in “Standards of Internal Control in the Federal Government” (also known as the Green Book) or the “Internal Control – Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Some of the areas that the Uniform Guidance requires policies for include:
- Conflicts of interest
- Financial management
- Determination of allowable costs
- Cash management
The content and structure of the written policies and procedures will vary between entities and will depend on entities’ size, structure and risks.
If you haven’t yet updated your policies and procedures to comply with the Uniform Guidance, you will want to do so now. The first step is to determine which policies and procedures are required under the Uniform Guidance. Once you have determined the requirements, you will need to assess your entity’s current policies and procedures and compare them to the requirements. You will need to consider what policies and procedures need to be updated, changed or completely re-written. Even if your organization does not receive federal funding, you may want to consider updates.
Jeff Patterson, CPA, MBA