Circular A-133

Purpose: This Circular is issued pursuant to the Single Audit Act of 1984, P.L. 98-501, and the Single Audit Act Amendments of 1996., P.L. 104-156. It sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of States, local governments, and non-profit organizations expending Federal awards.

 Audit required. Non-Federal entities that expend $300,000 (%500,000 for fiscal years ending after December 31, 2003) or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part.  

Single audit. Non -Federal entities that expend $300,000 (%500,000 for fiscal years ending after December 31, 2003) or more in a year in Federal awards shall have a single audit conducted in accordance with ___.500 except when they elect to have a program-specific audit conducted in accordance with paragraph (c) of this section. Program-specific audit election. When an auditee expends Federal awards under only Federal program (excluding R&D) and the Federal program's laws, regulations, or grant agreements do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted. A program-specific audit may not be elected for R&D unless all of the Federal awards expended were received from the same Federal agency, or the same Federal agency and the same pass-through entity, and that Federal agency, or pass-through entity in the case of a subrecipient, approves, in advance a program-specific audit.

Subrecipient and vendor determinations.
An auditee may be a recipient, a subrecipient, and a vendor.  Federal awards expended as a recipient or a subrecipient would be subject to audit under this part.  The payments received for goods or services provided as a vendor would not be considered Federal awards.  The guidance of this section should be considered in determining whether payments constitute a Federal award or a payment for goods and services.

Federal award.  Characteristics indicative of a Federal award received by a subrecipient are when the organization:

• Determines who is eligible to receive what Federal financial assistance;
• Has its performance measured against whether the objectives of the Federal program are met;
• Has responsibility for programmatic decision making;
• Has responsibility for adherence to applicable Federal program compliance requirements; and
• Uses the Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

Payment for goods and services. (VENDOR) Characteristics indicative of a payment for goods and services received by a vendor are when the organization:

• Provides the goods and services within normal business operations;
• Provides similar goods or services to many different purchasers;
• Operates in a competitive environment;
• Provides goods or services that are ancillary to the operation of the Federal program; and
• Is not subject to compliance requirements of the Federal program. 

Use of judgment in making determination.  There may be unusual circumstances or exceptions to the listed characteristics.  In making the determination of whether a subrecipient or vendor 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 and judgment should be used in determining whether an entity is a subrecipient or vendor.

For-profit subrecipient. Since this part does not apply to for-profit subrecipients, the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients.  The contract with the for-profit subrecipient should describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility.  Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits., monitoring during the contract, and post-award audits.

Compliance responsibility for vendors.  In most cases, the auditee's compliance responsibility for vendors is only to ensure that the procurement, recipient, and payment for goods and services comply with laws, regulations, and the provisions of contracts or grant agreements.  Program compliance requirements normally do not pass through to vendors.  However, the auditee is responsible for ensuring compliance for vendor transactions which are structured such that the vendor is responsibility for program compliance.  Also, when these vendor transactions relate to a major program, the scope of the audit shall include determining whether these transactions are in compliance with laws, regulations, and the provisions of contracts or grant agreements.

Cost Sharing

Cost Sharing:

• Must be verifiable from records
• Provided for in approved budget
• Only used for one award
• Conforms to Federal rules & regulations
• Un-recovered f&A costs may be included
• One Federal award cannot be used as cost sharing on another Federal award

   Mandatory Cost Sharing - University contributions to the sponsored project that are required as a condition of the award (normally, but not always, Federal) and which were agreed to between the University and the sponsor prior to the awarding of the grant or contract. This is printed on the FEC and includes the proposed amount agreed upon when the grant or contract was executed.

- represents contributions to a sponsored project or program required by the sponsor as a condition of award.  Mandatory cost sharing:

• may be a fixed percent or specific level of participation negotiated between the institution and the sponsor.
• must be included in the proposal and be provided by someone other than the sponsor.
• is a binding commitment and must be accounted for 
• may be reportable to the sponsor

     
Committed Cost Sharing- University contributions to the sponsored project not required as a condition of the award but included in the grant/contract proposal budget or budget justification with no corresponding funding requested or awarded. This budget number is printed on the FEC and includes the percent offered in the proposal.

    Aggregate Cost Sharing - University contributions required by the National Science Foundation (NSFi) to fulfill the requirement that the University provide one percent (1%) contribution (cost sharing) on the total of all unsolicited NSF funding. NSF is eliminating both program specific cost sharing and the 1% statutory cost sharing requirement on unsolicited proposals. These changes will be reflected in the terms and conditions of new awards or supplements issued after June 1, 2007. Awards issued before June 1st will continue to carry the 1% requirement or may have program specific cost sharing requirements that must be met.

    Salary Cap Cost Sharing - University contribution required by the National Institutes of Health (NIHi), the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Agency for Healthcare Research and Quality (AHRQ) for faculty with salaries in excess of the salary cap applicable to the particular federal fiscal year. For effort reporting, the FEC will reflect the cap in effect during the period of expenditure.

    K Award Cost Sharing - NIH Career Development Awards, or K Awards, are intended to provide support and protected time for new faculty to develop research skills. Because the effort requirements are high and salary recovery is limited, cost share may be necessary to complete the 75% effort requirement.

    Voluntary Uncommitted Cost Sharing - Effort that was not required by the sponsor nor committed on the budget page or budget justification of the proposal (i.e. it is not mandatory or committed cost sharing). Include this type of effort with other non-grant activities on the FEC.

Voluntary Cost Sharing represents contributions to a sponsored project or program not required by the sponsor as a condition award.  Voluntary cost sharing is classified as either:

• Committed: quantified contributions reflected in the proposal.  These are binding commitments and must be accounted for.  They may be reportable to the sponsor.
• Uncommitted: contributions not quantified or reflected in the proposal. These are not binding commitments and do not require documentation or reporting. 

 Taken from: http://www.ncsu.edu/sparcs/budgeting/cost_sharing.php

Sample Test 2

1. The Bayh-Dole Act addresses:
a. Fixed price contracts for federally sponsored research
b. Ownership of intellectual property resulting from federally sponsored research
c. Publication rights to intellectual property
d. Extension of collaborative business opportunities

 2. An anti-lobbying certification is required on federal grants, cooperative agreements, and contracts exceeding a minimum of:
a. $25k
b. $50K
c. $100k
d. $10k

3. Which of the following establishes audit requirements and defines Federal responsibilities for implementing and monitoring these requirements for institutions of higher education and other nonprofit institutions receiving federal awards?
a. A-110
b. A-21
c. A-122
d. A-133


 4. A cost reimbursement sub agreement:
a. requires the PI at the prime institution to provide additional funds if the research costs more than originally planned
b. Provides for carry-forward and other expanded authorities
c. Is the least common type of subagreement
d. Requires that the subrecipient use best efforts to complete the research

5. If a sponsor has a published policy of reimbursing  F&A costs less than the University's approved research rate and is not requiring the University to cost share, what type of cost share would the unrecovered F&A costs be?
a. Voluntary Committed
b. Voluntary
c. Mandatory
d. None of the above


6. According to expanded authorities, costs incurred prior to the project start date are:
a. allowable only if approved by sponsor agency
b. unallowable
c. allowable only if approved by OMB
d. allowable only if approved by Project Director


7.  At minimum, how frequently must the Institutional Animal Care and Use Committee review a facility’s programs for human care and use of animals, and inspect the animal’s facilities?
a.    Every two years
b.    Annually
c.    Every three years
d.    Every six months


8. Which of the following is the Institutional Animal Care and Use Committee responsible for reviewing in a grant application using animal subjects?
a.    Certification that all animals to be used in a given project are Specific Pathogen Free (SPF)
b.    A statement of other agencies to which a proposal using the same protocol will be submitted
c.    A description of how the animals will be housed and in what procedures they will be involved
d.    A list of other funding projects involving animals

9. Federal law generally requires grant financial records be kept for a MINIMUM of how many years?
a.    3
b.    10
c.    5
d.    1


10. A PI wants to hire a company to do a survey to collect and analyze the data necessary to understand why dog owners are healthier than cat owners.  The small company he wishes to hire, Survey U., is a spin-off start-up , created by a faculty member in the Sociology Department of the
PI’s institution. What mechanism should the PI use to hire Surveys U?
a. A cost-reimbursement sub agreement
b. a firm-fixed price subagreement
c. A consulting agreement
d. it depends
e. a service agreement


ANSWERS:
1. b. 2.c   3. d   4.d   5. d.  6. a.  7. d.  8. c.  9. a.  10. d.

Sample Test 1

1. What best describes an allocable cost?
a. A cost that can be assigned to a project or an activity based on the relative benefits received
b. A cost that has an associated benefit to the F&A cost function being performed
c. A cost that is allowable and reasonable
d. A cost that is specifically allowed under the terms and conditions of federally sponsored project and by OMB Circular A-21

 2. Which of the following establishes audit requirements and defines federal responsibilities for implementing and monitoring these requirements for institutions of higher education and other nonprofit institutions receiving federal awards?
a. A-110
b. A-133
c. A-21

3. Which of the following provides information on patent rights and responsibilities currently applicable to universities and federally sponsored projects?
a. Commerce Business Daily
b. Code of Federal Regulations
c. Federal Register
d. CFDA

4. The university receives a grant from NIH that states the payment terms are DHHS Letter of Credit. This means:
a. The Office and Grants and Contracts/Finance will monitor and draw cash on expenditures as appropriate
b. Funds are received in full at the beginning of the project
c. The department should monitor expenditures and contact OGCA when funds should be drawn upon
d. The PI can request funds via a phone request to the sponsor

5. Which of the following is a reason for a federal contracting officer to send a “Show Cause” notice to a contractor?
a. The contractor’s services are no longer needed
b. The contractor has not responded within 5 days of receipt of a cure notice
c. The contractor fails to bill for services being performed within 60 days of the end of the contract
d. The contractor fails to perform the services within the time specified or any extension


6. Under OMB Circular A-21, time and effort reporting must be submitted to the institution a MINIMUM of once
a. Each calendar quarter
b. Monthly when classes are in session
c. Annually until the project is completed
d. Each calendar year


7. The Federal Animal Welfare Act applies to which of the following animal species?
a. Marine mammals and amphibians
b. All vertebrate animals
c. Reptiles and warm-blooded wild animals
d. Non-human primates and fish

8. According to federal regulations, an institutional review board must include:
a. An attorney
b. A member not otherwise affiliated with the institution
c. An ethicist
d. A member of the clergy

9. Which of the following best describes essential laboratory biosafety levels in medical research?
a. Biosafety cabinets class I, II, or III according to the agent under study
b. Basic and containment procedures designed to protect personnel and the environment
c. Special microbiological practices used to conduct procedures with high aerosol potential
d. Degrees of protection provided to personnel, environment, and community


10. The following would be considered an appropriate description of a cost transfer journal entry
a. To transfer cost of lab supplies incorrectly charged to other fund
b. To correct prior date entry error/transfer lab supplies, Fisher Scientific, PO#XXXXX, appropriate date
c. Transfer costs to Fisher Scientific
d. To correct error

ANSWERS
1.a  2. b. 3. b 4. a 5.  6. d 7. b. 8. b. 9. a. 10. b.

Letter of Credit

A letter of credit is a document that a financial institution or similar party issues to a seller of goods or services which provides that the issuer will pay the seller for goods or services the seller delivers to a third-party buyer.[1] The issuer then seeks reimbursement from the buyer or from the buyer's bank. The document serves essentially as a guarantee to the seller that it will be paid by the issuer of the letter of credit regardless of whether the buyer ultimately fails to pay. In this way, the risk that the buyer will fail to pay is transferred from the seller to the letter of credit's issuer.

Letters of credit are used primarily in international trade for large transactions between a supplier in one country and a customer in another. In such cases, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits applies (UCP 600 being the latest version).[2] They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are the supplier, usually called the beneficiary, 'the issuing bank,' of whom the buyer is a client, and sometimes an advising bank, of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without the consent of the beneficiary, issuing bank, and confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and Traveler's cheques.

Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time. Generally, it is "the right to copy", but also gives the copyright holder the right to be credited for the work, to determine who may adapt the work to other forms, who may perform the work, who may financially benefit from it, and other related rights. It is an intellectual property form (like the patent, the trademark, and the trade secret) applicable to any expressible form of an idea or information that is substantive and discrete.

That is, by guaranteeing them a period of time in which they alone could profit from their works, they would be enabled and encouraged to invest the time required to create them, and this would be good for society as a whole. A right to profit from the work has been the philosophical underpinning for much legislation extending the duration of copyright, to the life of the creator and beyond, to his heirs.

Patent: A patent (  /ˈpætənt/ or /ˈpeɪtənt/) is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention.

The procedure for granting patents, the requirements placed on the patentee, and the extent of the exclusive rights vary widely between countries according to national laws and international agreements. Typically, however, a patent application must include one or more claims defining the invention which must meet the relevant patentability requirements such as novelty and non-obviousness. The exclusive right granted to a patentee in most countries is the right to prevent others from making, using, selling, or distributing the patented invention without permission.[1]


Trade Secret: A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers. In some jurisdictions, such secrets are referred to as "confidential information" or "classified information".


Trademark, trade mark, or trade-mark[1] is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities.

A trademark may be designated by the following symbols:
•    ™ (for an unregistered trade mark, that is, a mark used to promote or brand goods)
•    ℠ (for an unregistered service mark, that is, a mark used to promote or brand services)
•    ® (for a registered trademark)

A trademark is typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements.[2] There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories, such as those based on color, smell, or sound.

The owner of a registered trademark may commence legal proceedings for trademark infringement to prevent unauthorized use of that trademark. However, registration is not required. The owner of a common law trademark may also file suit, but an unregistered mark may be protectable only within the geographical area within which it has been used or in geographical areas into which it may be reasonably expected to expand.

The term trademark is also used informally to refer to any distinguishing attribute by which an individual is readily identified, such as the well-known characteristics of celebrities. When a trademark is used in relation to services rather than products, it may sometimes be called a service mark, particularly in the United States.[2]

Code of Federal Regulations

The Code of Federal Regulations (CFR) annual edition is the codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government. It is divided into 50 titles that represent broad areas subject to Federal regulation. The 50 subject matter titles contain one or more individual volumes, which are updated once each calendar year, on a staggered basis. The annual update cycle is as follows: titles 1-16 are revised as of January 1; titles 17-27 are revised as of April 1; titles 28-41 are revised as of July 1; and titles 42-50 are revised as of October 1. Each title is divided into chapters, which usually bear the name of the issuing agency. Each chapter is further subdivided into parts that cover specific regulatory areas. Large parts may be subdivided into subparts. All parts are organized in sections, and most citations to the CFR refer to material at the section level. About the Code of Federal Regulations (annual edition).

The Code of Federal Regulations (CFR) is the codification of the general and permanent rules and regulations (sometimes called administrative law) published in the Federal Register by the executive departments and agencies of the federal government of the United States.
The CFR is published by the Office of the Federal Register, an agency of the National Archives and Records Administration (NARA).

The CFR is divided into 50 titles that represent broad areas subject to Federal regulation.
Contents
•    1 Background
•    2 Effect of administrative law
•    3 Publication of administrative law
•    4 List of regulation titles
•    5 References
•    6 See also
•    7 External links

Background
Every regulation in the CFR must have an "enabling statute," or statutory authority. The United States Code (U.S. Code) precedes the CFR and contains statutes enacted by Congress. The CFR contains regulations, which spell out in further detail how the executive branch will interpret the law.[1] The two documents represent different stages in the legislative process. The U.S. Code is a codification of legislation, while the CFR serves as administrative law. Administrative law exists because the Congress often grants broad authority to executive branch agencies to interpret the statutes in the U.S.Code (and in uncodified statutes) which the agencies are entrusted with enforcing. Congress may be too busy, congested, or gridlocked to micromanage the jurisdiction of those agencies by writing statutes that cover every possible detail, or Congress may determine that the technical specialists at the agency are best equipped to develop detailed applications of statutes to particular fact patterns as they arise.
Under the Administrative Procedure Act, the agencies are permitted to promulgate detailed rules and regulations through a public "rulemaking" process where the public is allowed to comment, known as public information. After a period of time, the rules and regulations are usually published in the Federal Register.
The Parallel Table of Authorities and Rules in the index to the CFR correlates laws with their regulations using U.S. Code citations, Statutes at Large citations and Public Law numbers.[2]
Effect of administrative law

The rules are treated by the courts as being as legally binding as statutory law, provided the regulations are a reasonable interpretation of the underlying statutes. This "reasonable interpretation" test or Chevron doctrine was articulated by the U.S. Supreme Court in a unanimous decision (6 voting, 3 recused) involving a challenge to new Clean Air Act regulations promulgated by the Reagan administration in 1981. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.[3]

For example, if Congress enacted a law that simply stated that there are not to be "excessive" levels of mercury in any significant body of water in the United States (but defined things no further), an entity designated, as part of the law, to enforce it (probably the United States Environmental Protection Agency (EPA)) could define in a scientific way what an excessive level of mercury is, as well as what constitutes a significant body of water. The Agency's definitions and its plan of enforcement for what Congress intended (along with listed penalties for violation coming from Congress unless Congress specified otherwise) will all go into the CFR.
Also, enabling legislation can be passed by Congress which gives a federal non-Congressional entity wide latitude in creating rules (law of bases). For example, the EPA could be designated by Congress to promulgate rules "that control harmful pollutants"; the Agency could then promulgate broad rules (including definitions and enforcement provisions), in the absence of existing specific laws, to control lead emissions, radon emissions, pesticide emissions, and so forth. Such rules, including any definitions and enforcement provisions created by Congress or the Agency, will all go into the CFR.

Publication of administrative law
The rules and regulations are first promulgated or published in the Federal Register. Each is given a CFR citation, such as 42 CFR 260.11(a)(1), that can be cited immediately, without waiting for a page number from the physical copy. The aforementioned citation would be read, "title 42, part 260, section 11, paragraph (a)(1)."

NARA also keeps an online version of the CFR, the e-CFR, that is normally updated two days after changes to the regulations, that have been published in the Federal Register, become effective.
While new regulations are continually becoming effective, the printed volumes of the CFR are issued once each calendar year, on this schedule:
•    Titles 1–16 are updated on January 1
•    Titles 17–27 are updated on April 1
•    Titles 28–41 are updated on July 1
•    Titles 42–50 are updated on October 1