Article 45: Part 200 - Uniform Administrative Requirements, Cost Principles, & Audit Requirements

(Category: eligibility-regulations)

Article Summary

Supervised by the Office of Management and Budget (OMB), 2 CFR Part 200—universally known as the "Super Circular"—establishes the overarching, government-wide regulations that govern all federal financial assistance and grant awards. Any state, local, tribal, or nonprofit entity receiving FEMA Public Assistance funding must strictly adhere to the administrative requirements, procurement laws, cost principles, and audit standards centralized within this regulation.

Key compliance focal points include:

• Procurement Under Grants (§§ 200.317–200.326): Mandates full and open competition, outlaws restrictive local geographic preferences, dictates affirmative steps to utilize minority- and women-owned businesses, and explicitly prohibits cost-plus-a-percentage-of-cost contracting methods.
• Cost Principles (Subpart E): Establishes the foundational criteria that all claimed costs must be necessary, reasonable, allocable, and fully documented to be eligible for reimbursement.
• Internal Controls (§ 200.303): Requires grant subrecipients to implement and maintain rigorous internal financial management controls to safeguard federal funds against waste, fraud, and administrative abuse.

Five Key Takeaways for CTA FEMA Compliance

1. Enforce Full and Open Competition: Abolish any local or geographic contractor preferences in your disaster bidding documents, as 2 CFR § 200.319 strictly mandates open, unrestricted market competition.
2. Ban Cost-Plus-Percentage Contracts Globally: Ensure your legal and procurement teams never execute a cost-plus-a-percentage-of-cost contract for disaster recovery work, as this contracting method is strictly prohibited under 2 CFR § 200.323(d).
3. Execute Six Socioeconomic Affirmative Steps: Document clear, proactive efforts to solicit and include minority-owned, women-owned, and labor surplus area businesses in all disaster contract opportunities to satisfy 2 CFR § 200.321.
4. Document the 2 CFR 200.404 Reasonableness Test: Maintain independent cost estimates (ICE) and local market price analyses for every large procurement to prove that expenditures do not exceed what a prudent person would spend.
5. Separate and Isolate Accounting by CFDA: Establish distinct internal general ledger accounts, cost centers, or restricted bank funds for each federal award program to fulfill OMB tracking and single-audit preparation mandates.

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