Sneak Preview: Associations Offer Concerns About Proposed Uniform Guidance Revisions
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Office of Management and Budget (OMB) is assessing comments received on proposed revisions to its guidance on financial assistance under Title 2 of the Code of Federal Regulations (C.F.R.), including the uniform guidance (2 C.F.R. Part 200), and now anticipates issuing final guidance revising Title 2 sometime in February or March 2024. Many commenters stated that the proposed revisions, as written, could lead to multiple interpretations by grants administrators and auditors.
OMB on Oct. 5 proposed numerous revisions to its guidance in Title 2 to meet its goal in updating the guidance, address administrative priorities, offer streamlining, and reduce burdens for agencies and recipients (see “OMB Proposes To Raise Single Audit Threshold to $1 Million”). OMB received about 1,025 public comments by the Dec. 4 deadline. Comments on the revisions not only addressed OMB’s planned updates to the uniform guidance, but other guidance under Title 2, including 2 C.F.R. Part 25 (Universal Identifier and System for Award Management); 2 C.F.R. Part 170 (Reporting Subaward and Executive Compensation Information); and 2 C.F.R. Part 184 (Buy America Preferences for Infrastructure Projects).
Among its comments, which addressed concerns about multiple provisions within the proposal, the National Association of State Auditors, Comptrollers and Treasurers (NASACT) particularly criticized language proposed in §200.431(g)(6)(v) stating that “in all cases, the payments for unfunded pension costs may not exceed the contribution rate of the employees current pension costs.” NASACT asked what OMB considers “current pension” cost and “unfunded pension cost,” adding that an employer’s portion is mandated by law at the time services are rendered and is considered a current pension cost.
NASACT referred to the current cost principles stating that pension costs should be allowed if they are calculated in accordance with established actuarial standards and consistent with generally accepted accounting practices (GAAP). It encouraged OMB to clarify “current pension costs” to include the “normal cost contribution rate” and the “unfunded liability amortization contribution rate” calculated in accordance with established actuarial standards recognized by GAAP.
“The provisions of §200.431(g)(6)(iv) specifically allow the amortization of unfunded liability when converting to an actuarial cost method,” according to NASACT. “It would be extremely burdensome and very inconsistent if entities are required to obtain prior approval of their numerous awarding agencies to charge amounts paid to the pensions plans to pay down the unfunded actuarial liability in accordance with an actuarial costs-based method recognized by GAAP. We strongly recommend that OMB strike the proposed language in §200.431(g)(6)(v). As written, the proposed language lacks clarity and may lead to unintended outcomes that are not consistent with the stated intent.”
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