Implementation of Federal Grant Procurement Standards Delayed

Wendy Thompson

On May 17, 2017, the federal government granted an additional one-year delay for implementation of the procurement standards under the Uniform Guidance in 2 CFR 200.317 to 326. The grace period now extends through December 25, 2017, meaning entities with fiscal years beginning on or after December 26, 2017, must have procurement standards, for federal expenditures, that meet the more stringent requirements of 2 CFR 200.317 to 326.

  • Entities with year-ends of December 26, 2016, through May 16, 2017, were already required to have adopted the Uniform Grant Guidance procurement policies. If procurement policies and procedures were not timely adopted and implemented for Uniform Grant Guidance, it will likely result in an audit finding in the next Single Audit.
  • Entities that previously adopted and implemented procurement policies and procedures in accordance with 2 CFR 200 likely will not want to reverse those procurement policies and procedures. Reversing those policies and procedures part-way through the year will lead to additional confusion on the part of those in charge of procurements, may result in more noncompliance, and may result in additional testing by your auditor due to changes in internal controls. We recommend that if Uniform Guidance policies and procures were adopted and implemented, do not re-adopt the old policies and procedures.
  • Entities that did not previously adopt and implement procurement policies and procedures in accordance with 2 CFR 200 should go through the appropriate channels in their organization to elect and document usage of the additional grace period year. This could include entities that have adopted new policies and procedures with an implementation date of May 17, 2017, or later (for example, June 30, 2017, year-ends are likely to be in this position). However, the grace period decision and documentation should go through the same process as the adoptions of procurement policies.

It is imperative that your procurement policies – whatever they are documented as – be followed.

The Uniform Guidance and the old guidance in the OMB Circulars provide minimum requirements that must be covered by an entity’s procurement policies. If an entity’s policies are stricter than the federal rules, the entity policies still must be followed. As you adopt new procurement policies, we also recommend that you consider separate policies for federal and non-federal expenditures to ease the administrative burden of certain federal requirements.

If you have questions or need assistance, please contact Yeo & Yeo.

Wendy Thompson

Wendy Thompson

CPA

Wendy Thompson, CPA, is Yeo & Yeo’s Training Manager and a member of the firm’s Not-for-Profit Services Group, Audit Services Group, and the Compilation and Review Team. She conducts training seminars for the Michigan Association of Certified Public Accountants (MICPA) and serves on the MICPA’s Nonprofit Task Force. Contact Wendy via e-mail at wentho@yeoandyeo.com or call 989.793.9830.