Essential Background for Practitioners

In order to make sense of the regulations, your need to have a firm grasp of a few fundamental concepts. Before you dive into the details of the regs, I recommend that you first study the materials that are linked from this page.

Is it assistance, or is it acquisition?

US law makes a clear distinction between assistance (grants) and acquisition (procurements). Learn the basics of this key distinction in Acquisition vs. Assistance.

If you're curious abut the distinction the federal government makes between grants and cooperative agreements, see What’s the difference between a “grant” and a “cooperative agreement”?.

Compliance with what?

Bottom line: your primary responsibility for compliance is to satisfy the terms and conditions of your award agreement. The agreement is the legally binding statement of what your organization must do and what your funder will accept in return for the funding the award provides. Read more about agreements in Basic Facts about Funding Agreements.

Your organization’s policies are of primary importance. They are the organization's instructions to its employees. Thus, your organization's employees should be more focused on policies than on the regulations. Naturally, policies should be crafted to assure compliance with the regulations. Read more about the importance of policies and how to tailor your them to assure compliance in Policies You Need.

If organizational policies are most important, then why do we focus so much attention on the regulations? What are the regulations? How do they come to be? Are they really the same as law? Where can I find the regulations on the web? Get answers to these questions and more in Regulations - basic background.

Financial Matters

Understanding the federal regulations is fundamentally about "the bottom line" of your organization's financial statement. You care about compliance because failure to comply with the terms of your agreement can result in significant financial loss. Federal assistance awards are nearly always limited to reimbursement of allowable costs actually incurred: in essence, you spend the money according to the rules, and then you get paid. Read Basic Financial Concepts for the basic financial context you need to put the regulations in perspective. Then explore the finer points discussed in the next three paragraphs.

Federal funders place numerous restrictions on the costs they're willing to reimburse. Thus, the recipient is keenly interested in assuring that all costs incurred are allowable for reimbursement—and in avoiding unallowable costs. Learn more about that here: Allowable Costs & Prior Approvals.

Correctly accounting for costs is crucial to optimizing cost recovery. The rules for assigning costs to awards are introduced in Cost Allocation Principles. The rules for documenting costs in order to demonstrate that the conditions of allowability have been met are discussed in Documentation Requirements.

Reasonably enough, the federal government has a process for checking up on recipients to assure that they have satisfied the terms and conditions of the award agreement, especially the rules for allowable costs. Audit Basics provides background on the Single Audit Act and how it is implemented in 2 CFR 200 Subpart F.

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