Regulatory Advocacy: Working for Our Members


Regulatory Advocacy: Working for Our Members

By Bonnie Ricci


In 1995 when the US Office of Management and Budget (OMB) proposed changes to its current Circular A-122, Cost Principles for Nonprofit Organizations, with a public call for comment announced in the Federal Register, APVOFM (Humentum’s predecessor organization) took the opportunity to seek member input and submit comments. This launched the organization’s foray into regulatory advocacy that has continued in earnest and grown in scale and scope ever since.

The Early Years

The regulatory historians among the readers may recall that APVOFM’s comments on A-122 arose from the recognition that: 1) there were common types of costs confronted by the members working globally that nonprofits working only in the US seldom, if ever, encounter; and 2) the organization could be a collective voice on behalf of the membership. We were pleased that the revised A-122 circular finally issued in 1998 reflected APVOFM input by providing greater flexibility on the allowability of such costs as housing and personal living expenses for staff working outside the US, and severance pay for foreign nationals. Since the US government (USG) funds activities that mainly take place inside the US, the APVOFM member voice was unique – and necessary – in underscoring the effect of proposed changes on activities taking place outside the US. Bob Lloyd, long-time Humentum regulatory trainer and advocacy advisor, guided the organization through its first OMB comment effort and continues to play that role to this day. 

Emboldened by the results of its 1995 Circular A-122 effort, guided by a regulatory advisor, and supported by member willingness to thoughtfully share their experiences and suggestions to help us formulate regulatory position papers, APVOFM advocated onward. Remember in 1996/7 when OMB proposed changes to its Circular A-133, Audits of Nonprofit Organizations? We responded with suggestions about raising the threshold that triggers a required audit and about possible exemptions for certain non-US entities. In 1996, The Single Audit Act changed the statutory audit threshold. When OMB later proposed additional revisions, its June 1997 Circular contained changes sought by INGOs for an exemption for non-US entities receiving federal awards directly from federal agencies or indirectly through other organizations.

Over the next ten years, numerous opportunities presented themselves for comment to OMB, including on the development of standard data elements for federal agency program announcements, full implementation of, and development of a revised standard financial report. Humentum participated in every public comment opportunity, and its comments led to important requirements, such as that which requires federal agencies to specifically identify the nature of their substantial involvement in solicitations for cooperative agreements.

In early 2001, the organization and its members started an ongoing dialogue with USAID and its Office of Procurement (now the Office of Acquisition and Assistance, a title change suggested by recipients) and makes regular representations to that office and to USAID’s ombudsman. We have since also interacted with the US Government Accountability Office (GAO); the Office of Information and Regulatory Affairs (OIRA) at OMB; other agencies including the Departments of State and Health and Human Services; the Internal Revenue Service (IRS) for the designation of high-cost, non-US housing locations; and private accounting and auditing standards-setting organizations such as the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA).

Issue-wise, to name just a few, we have substantively commented on USAID’s proposed branding and marking rule; partner vetting proposals at USAID and DOS; revisions to USAID’s Rules on Source, Origin, Nationality for Commodities and Services Financed by USAID – 22 CFR 228; subaward reporting requirements through FFATA—Federal Fund Accountability and Transparency Act; and the Standard Provisions for Non-US NGOs. Fast forward to February 2012 when OMB announced a major grant reform initiative to consolidate all the administrative, cost, and audit circulars affecting the management of federal grants and cooperative agreements. Over a period of more than two years, Humentum submitted several sets of comments, including one that contained 40 specific recommendations on how policies could better reflect federal fund management from the perspective of those who must apply the policies internationally. We believe that our comments resulted in, for example, the first-ever cost principles on exchange rates and VAT.

How Advocacy Plays Out

We couldn’t maintain a regulatory advocacy capacity without the regular engagement of members in our compliance training workshops, at roundtables, in discussions on the online Member Community, at the Annual Conference, and in response to issue-specific outreach. A standing Government Relations Committee as well as a Finance, Grants and Contracts Advisory Council, both made up of experienced compliance practitioners, meet regularly to give Humentum input into trending issues. In 2010, we introduced comment clinics to more widely communicate proposed changes to USG regulations and solicit member input for inclusion in comment letters.

As a US-based organization whose members receive sizeable funding from the USG, our efforts to date have necessarily focused close to home on USG agencies and their regulations. Our interactions with them to represent the members or connect the members directly are varied. In brief, we meet periodically with USAID’s ombudsman and other offices including M/OAA; submit issues and questions through the ombudsman channel; host occasional roundtables with staff from the Office of Acquisition and Assistance; participate in USAID’s Partner’s Day; provide member-submitted questions for the Ask the Procurement Executive conference calls; schedule sessions each year at the Humentum Annual Conference; and invite representation at special symposia such as on the topic of fraud. We also maintain contacts with assistance executives at the HHS and DOS, and with other agencies as issues surface.

Highlights of More Recent and Current Regulatory Advocacy Efforts

You may be interested to know the highlights of the advocacy efforts we have been involved in since 2016:

  • We submitted a comment letter on USAID’s 2016 SF-425 Process Guide that members mentioned began appearing in some awards. The guide missed the regulatory mark in several key respects and in places was contrary to OMB’s Uniform Guidance. Based on our letter, the USAID Controller informed us that use of the guide would be discontinued.
  • With the assistance of an input group of business development staff, we submitted a letter on behalf of concerned members about USAID’s co-creation mechanism, the Broad Agency Announcements. Our letter raised key concerns and offered suggestions for process improvement.
  • At special roundtables, we hosted USAID’s ombudsman and the director of the Office of Acquisition and Assistance so members could articulate their concerns directly.
  • We initiated a meeting with and then hosted a call with the chief of USAID's Cost, Audit & Support Division as we realized members had concerns that the process for negotiating indirect cost rate agreements had changed, which raised questions and issues for members.
  • At the invitation of USAID’s acting assistance administrator in the Bureau for Management, we submitted comments on the agency’s DRAFT Amplifying Guidance for ADS 304, Selection of Instrument.
  • On the two-year anniversary of OMB’s final rule on its Uniform Guidance, we solicited member input and held a comment clinic to identify areas still in need of clarification.

We’ve taken our upcoming 2017 Annual Conference as another opportunity for members to hear directly from and ask questions of USAID’s Office of Acquisition and Assistance (that panel will include OAA, the ombudsman, and the OIG); USAID’s Cost, Audit and Support Division including their indirect cost rate agreement negotiators; the chief grants policy executive at HHS; the assistance executive at DOS; and USAID’s chief data officer for their development data library.

Humentum will continue supporting our members by bringing problematic policies or practices to the attention of federal officials and suggesting improvements to them. Thank you for the trust you’ve placed in us to represent your views on numerous occasions. Our ears are always open. Have an issue you’d like to tell us about? Email Bonnie Ricci:

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