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Ed Jameson has been working in government grant and contract accounting for more than 25 years. No CPA is more knowledgeable about the ins and outs of this complex accounting specialty as it relates to small businesses.
A sought-after consultant and speaker, Ed is always happy to share his expertise. Review the FAQs below to see if your question is addressed here. If not, please send your query to Ed and he’ll answer it for you.
Note that the questions below have been answered based on typical grant and contract terms. Jameson & Company is happy to review your individual issues and address whatever specific concerns you may have.
Using the Omnibus Minimum Indirect Rate
Q: The NIH has recently raised the Omnibus Minimum Indirect Rate to 40% on Phase 2 grants. Why should we bother to go through the audit process if they are willing to give us a 40% indirect rate?
Ed: If you choose to request the Omnibus Minimum Indirect Rate, you may be short-changing yourself. I strongly recommend that you attend our Webinar.
Working in Another State
Q: We are located in another state. How easy is it to work with you?
Ed: Our clients are located all over the United States. We work together smoothly and efficiently by phone, email, WebEx, overnight mail and an occasional flight. Individual state licensing requirements are fairly standardized, so if Jameson & Company is not currently licensed in your state, it’s usually a quick process.
OMB A-133 Audits
Q: We need an Office of Management and Budget (OMB) A-133 audit. Can your firm perform this audit?
Ed: National Institutes of Health (NIH) grantees that expend more than $500,000 per year are required to have an OMB A-133 audit. The OMB has very strict rules governing auditor independence.
Independence is determined on a case by case basis. If we are not independent of your organization (and can not perform your A-133 audit), we can help you identify a qualified CPA firm to perform the audit, and we can represent your company during the audit.
Re-Budgeting Grant Money
Q: Can we change the way we spend the money that was originally budgeted?
Ed: Yes! National Institutes of Health (NIH) grants usually contain standard terms and conditions that allow grantees to re-budget as much as 25% of the total grant between budget categories without the permission of the grant specialist.
However, if you’ve requested an F&A rate of 40% or less, you may NOT rebudget from direct cost categories into indirect!
In general, contracts can be re-budgeted as well. However, contracting officer approval may be required, depending on the specific terms and conditions of your contract.
Incurred Cost Submissions
Q: What do we have to submit to the government for the financial portion of our grants?
Ed: In general , if you have a phase 2 award, your grant or contract will contain FAR 52.216-7 the Allowable Cost clause. As such, you must submit an annual incurred cost submission. This document is used to “true up” or reconcile the funds you’ve earned and billed (using WAWF or via Forms 1034/1035, or drawn from the Payment Management System at your provisional indirect rates) with your actual spending.
Q: We have grants and contracts. What determines which agency does our audit?
Ed: Generally, NIH grants are audited by the Division of Financial Advisory Services (DFAS) out of Bethesda, MD and may also be subject to an OMB A-133 audit – performed by a qualified independent CPA firm.
Army, Navy, Air Force, the Department of Homeland Security, Defense Threat Reduction Agency (DTRA), and NASA contracts are usually audited by your local Defense Contract Audit Agency (DCAA) branch.
Smaller government agencies (Department of Energy, National Science Foundation, Department of Education) tend not to be cognizant/lead agencies, so the audit provisions tend to be dictated by the terms and conditions embedded in the funding vehicle.
Working With Auditors
Q: If we work with your firm, will we have to deal directly with the government auditors?
Ed: With Jameson & Company, our goal is to eliminate or minimize our client’s direct exposure to the audit process.
I Already Have a CPA
Q: What can I ask my current CPA to see if he or she understands the Federal Acquisition Regulation (FAR)?
Ed: We hear horror stories from clients who relied on their CPA for advice that they now realize was outside that person’s field of expertise. If you have concerns about the competency of your CPA, I’d recommend you ask them a few questions from this FAQ and listen very carefully.
Should you decide to make a change
While some of our clients have our firm handle their tax planning and preparation needs, other clients have chosen to retain their current tax professional, while utilizing Jameson & Company solely for our government grants and contracts services. We are quite adept at integrating your Government accounting services and tax service needs under either scenario.