RubinBrown What Not-For-Profit Organizations Should Expect in 2015

Changes to various administrative requirements such as procurement, contractor versus subrecipient determination and internal control. These changes were effective December 26, 2014. Highlights include: ∙ The definition of five methods of procurement to be used: – Micro purchases – less than $3,000 (or $2,000 for construction subject to the Davis Bacon Act) – Small purchases – $3,000 to $150,000 (the Simplified Acquisition Threshold) – Sealed bid purchases – over $150,000 (and preferred for construction) – Competitive proposal purchases – over $150,000 when a sealed bid is not appropriate – Noncompetitive purchases – special circumstances applicable to all levels. ∙ Additional guidance to differentiate between a contractor (previously referred to as a vendor) and a subrecipient. ∙ Explicitly requiring the establishment and maintenance of effective internal controls that provide assurance that an entity is managing federal awards in compliance with federal statutes, regulations and the terms and conditions of federal awards.

KEY ACTIONS TO PREPARE FOR IMPLEMENTATION

1. DETERMINE COMPLIANCE OF CURRENT PROCUREMENT PROCEDURES AND TIME & EFFORT REPORTING SYSTEM WITH NEW REQUIREMENTS

2. EVALUATE WHETHER TO REQUEST AN INDIRECT COST RATE EXTENSION OR THE 10% DE MINIMIS RATE

3. USE THE NEW CRITERIA TO MAKE THE CONTRACTOR VS. SUBRECIPIENT DETERMINATION

4. EVALUATE YOUR INTERNAL CONTROL STRUCTURE

5. EVALUATE THE IMPACT OF THE UGG CHANGES ON YOUR UPCOMING AUDIT AND DETERMINE THE STATUS OF PRIOR YEAR AUDIT FINDINGS

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