InsideNGO Advocacy Update - January 2010
Each quarter, InsideNGO will provide an update on advocacy and policy issues to keep members informed on topics that affect their jobs. Below is a summary of the key issues we have been involved with recently. InsideNGO members will be able to find the complete January 2010 Update by logging onto the Members Only Site, where you will find each issue treated in more depth with links to additional background documents to further elaborate the topic. Contact Mike Walsh for more information: mwalsh@InsideNGO.org
USG Grants/Cooperative Agreements
- Standard Form (SF) 425: USAID will be modifying awards soon to incorporate the SF 425 requirement, while State began to require it as of October 09.
- President’s New Executive Order on Improper Payments: An Executive Order (EO) now holds US agencies accountable for lowering the rate of improper payments and minimizing waste in Federal Programs. The EO requires agencies to publish rates, amounts of overpayment and who received them. Further, the EO requires the establishment of a website so the public can report suspected fraud, waste or abuse by a federally funded entity. Watch for changes to OMB A-133.
- The Paperwork Reduction Act (PRA): InsideNGO submitted a letter to the Office of Information and Regulatory Affairs highlighting that the PRA process is ineffective and that the burden estimates are often unrealistic. We requested that the agency publicize how they determine the amount of effort required to complete a form.
USG Contracts
- New Travel Cost Rule: FAC 2005-38 dated December 10, 2009 contains a new cost standard for travel costs (FAR 31.205-46) that limits reimbursement to the lowest priced airfare available during normal business hours, with a few exceptions that must be documented. We anticipate problems in asserting that a firm has paid the “lowest priced airfare.”
Finance
- Overhead: The assault on indirect rates and reimbursement of core support costs appears to be expanding. It looks like members of the US Congress and senior officials in the Administration are now expressing the opinion that overhead paid to contractors and grantees is too high. InsideNGO continues its analysis and development of a white paper on “full cost recovery.” We have developed talking points for our members to consider in addressing this issue with their donors.
- International Financial Reporting Standards (IFRS): The International Accounting Standards Board (IASB) has published IFRS 9 “Financial Instruments,” which calls for a single approach to determine whether financial assets should be measured at amortized cost or fair value. IASB is working with FASB, and the two have plans to merge their standards by June 2011. Start planning now.
Foreign Assistance Reform
- QDDR: By invitation, InsideNGO submitted comments on the Quadrennial Diplomacy and Development Review, which will align State and USAID strategies and resources to projected needs over the next 4 years.
USAID
- Partners Day: At USAID’s invitation, InsideNGO participates in these quarterly informal meetings with the Office of Acquisition and Assistance (OAA) as a representative of its members. Among other things, we learned that procurement forecasts will be more detailed and updated regularly; OAA is working to address inconsistencies among COs and negotiators; USAID’s internal guidance (ADS) on source/origin/nationality (22CFR 228) will be updated and streamlined.
- USAID’s Semiannual Regulatory Agenda Highlights Policy Initiatives: USAID recently published in regulations.gov their Fall 2009 Semiannual Agenda for Regulations that covers issues such as updating unspecified portions of 22 CFR 226, finalizing the AIDAR clause on Partner Vetting, revising 22 CFR 226 to permit the use of the SF 425 Federal Financial Report, and more. InsideNGO is monitoring the issues and will seek input from our members as possible.
- SPOT: The message from DoD, State and USAID is – comply with SPOT – the DoD managed data system to collect personal information on all employees, including subs in Iraq, or risk termination, suspension or debarment. InsideNGO is working with InterAction and other members to ask USAID to pause in the roll-out of SPOT for Afghanistan until there can be further consultation with the implementing partners about what makes the most sense.
- Subcontract Profit Under Assistance: Maureen Skauket, USAID’s Director of OAA, is reviewing an internal document on this subject. InsideNGO will share the document when available externally and solicit comments from our members when given the opportunity by OAA.
- PVS – Partner Vetting System: InsideNGO continues to collect specific examples of how the PVS has had a detrimental impact on development to help make the case. Please pass along any examples from West Bank/Gaza to Mike Walsh at mwalsh@InsideNGO.org
- Use of Host Country Systems: USAID issued a General notice entitled, “Strengthening and Using Country Systems – Implementing the Paris Declaration (PD) and Accra Agenda for Action (AAA).” The General Notice conveys a “Reference Guide to Existing USAID Automated Directives Systems (ADS) Guidance on Use of Country Systems.” The reference guide simply pulls together the diverse ADS references to host country systems and standards for use by personnel in designing activities and possibly host country procurements.
U.S. Internal Revenue Service
- International High Cost Housing Locations: InsideNGO members report that certain cities where they implement programs have unusually high housing costs. This directly impacts U.S. expat staff who are taxed on their housing allowance. Many cities in Africa such as Accra, Abuja and Luanda are not recognized by the IRS as high cost. To move forward, the IRS needs independent proof of housing costs in the targeted cities, such as newspaper or real estate listings (in English). InsideNGO is currently collecting data. If interested, please contact Marie McNamee at mmcnamee@InsideNGO.org
U.S. Department of State
- IG Input on PEPFAR II: A recent OIG report entitled “The Exercise of Chief of Mission Authority for Managing the President’s Emergency Plan for AIDS Relief Overseas” raises concern about possible problems due to the proliferation of USG brands (PEPFAR, USAID, CDC, etc.) that NGOs should track. The report also recommends biannual, rather than annual, Country Operational Plans and more decision making authority in the field.
U.S. Health and Human Services
- Prostitution/Sex Trafficking Provision Published for Comments: As stated, “The proposed rule relaxes the criteria for recipient – affiliate separation, and simplifies the process for compliance with the statutory requirement that recipients of HHS Leadership Act HIV/AIDS funds have a policy explicitly opposing prostitution and sex trafficking.” USAID has been in the background to date, but the HHS rulemaking notice seems to indicate that the Agency would be expected to follow an approach similar to the one HHS proposed.
Other Notes of Interest
- On December 8, 2009 the White House issued an “Open Government Directive” that describes three principles: transparency, participation and collaboration. Each USG agency is expected to move aggressively in publishing more Government information online, improving the quality of Government information, creating and institutionalizing a culture of open Government, and establishing an enabling policy framework for open Government. InsideNGO is preparing a letter to the new USAID Administrator Shah, and solicits member suggestions. Contact Mike Walsh at mwalsh@InsideNGO.org
Trend Spotting: What trends do you see on the horizon in the compliance and regulatory environments? What issues would you like to propose InsideNGO become involved with? Please share your thoughts with Mike Walsh at mwalsh@InsideNGO.org
InsideNGO members may obtain a copy of the full January 2010 Advocacy Update by logging onto the Members Only Site.