Government Contractor
January 2011
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6851 Oak Hall Lane Suite 300
The Price of Federal Funding: More Reporting
by Nelly Gizdova, Manager
If you had just
become used to
hearing the term
ARRA without
having a panic
attack, now there’s
a potential new
source of anxiety:
FFATA! FFATA, or the Federal
Funding Accountability and Trans-
parency Act, is not new legislation,
per se; it was signed into law on
September 26, 2006, by President
George W. Bush. The reason FFATA
is starting to make headlines again
is that many of its provisions
become effective on October 1, 2010.
FFATA is similar to ARRA (the
American Recovery and Reinvestment
Act) in its intent to make the govern-
ment transparent and accountable
for its spending decisions by using
the newest information technology
resources, but it goes beyond the
ARRA reporting in several aspects.
To begin, the provisions of FFATA
affect all entities that receive federal
awards (direct and first tier sub-
recipients) regardless of the type or
amount of federal funding received,
and are applicable for all new
awards effective October 1, 2010.
The other major difference is that
FFATA reporting is going to be
monthly (not quarterly as with
ARRA). The first reporting was due
November 30, 2010, for the month
UHY LLP provides specialists in government contracting solutions in accounting and tax.
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ending October 31, 2010. The col-
lected information on federal
awards is then published and acces-
sible on a searchable website:
www.USASpending.gov.
The term federal awards used in
FFATA is quite broad and includes
grants, sub-grants, loans, awards,
cooperative agreements and other
forms of financial assistance as well
as contracts, sub-contracts, purchase
orders, task orders and delivery
orders. Federal awards that involve
classified information are excluded
from reporting under FFATA.
Who is affected?
FFATA affects a spectrum of entities:
for-profit and nonprofit corpora-
tions, associations, partnerships,
limited liability companies, limited
liability partnerships, sole propri-
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Fax 410-381-5538 www.uhyllp-us.com
etorships, any other legal business
entities and states or localities.
Entities with gross income less than
$300,000 for the previous tax year
(from any source) are exempted
from reporting.
All recipients of federal awards
(grants and/or contracts) are
required to register in the Central
Contractor Registration system at
https://www.bpn.gov/ccr/. Additionally,
prior to submitting FFATA reports,
prime awardees must register in the
new FFATA Sub-award Reporting
System (FSRS) at http://www.fsrs.gov/.
FSRS was created to collect the
required data from the federal
awardees for reportable sub-awards
(grants or contracts greater than
$25,000) and executive compensa-
tion. In a memo to federal agencies,
the Office of Management and
Budget (OMB) clarified that
awardees would be required to sub-
mit data only on first-tier sub-grants
and sub-contracts.
continued on page 2
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Reporting requirements
According to OMB FFATA
Memorandum dated April 6, 2010,
all federal prime contractors and
sub-contractors should be prepared
to report on applicable contracts
(greater than $25,000) as soon as
practicable after the sub-contract (or
subsequent changes thereto) has
been made, but no more than 30
days after that event. FFATA
requires prime recipients to report
in FSRS by the end of the month fol-
lowing the month the applicable
contract was awarded or modified,
which, in effect, gives prime con-
tractors at least 30 days to report.
The prime contractor has a responsi-
bility to inform the sub-contractor as
part of the contractual agreement of
all reportable data elements and to
monitor the completion of those
requirements on a monthly basis. It
is the sub-contractor’s responsibility
to report to the prime contractor all
information required by FSRS.
Sub-contractors cannot report in
FSRS. Only the prime contractor is
required (and able) to report sub-
contract actions in the FSRS report-
ing module.
The FSRS reporting requirements
are phased-in for federal contracts
and sub-contracts and are effective
as follows:
• For contracts greater than or equal
to $20,000,000, reporting started
July 1, 2010,
• For contracts greater than or equal
to $550,000, reporting started
October 1, 2010, and
• For contracts greater than or equal
to $25,000, reporting starts March
1, 2011.
The statements contained herein are provided for informational purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal,
state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. Furthermore, such statements are not presented or intended as, and should not be taken
or assumed to constitute legal advice of any nature, for which advice it is recommended that you consult your own legal counselors or professionals.
UHY Advisors, Inc., provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc.,
and its subsidiary entities offer services from offices across the United States. UHY Advisors, Inc., and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent
CPA firm that performs attest services. UHY Advisors, Inc., and UHY LLP are independent U.S. members of Urbach Hacker Young International Limited.
January 2011
Sub-award reporting
The sub-contract information report-
ed in FSRS is very similar to what is
being reported under ARRA at
http://www.FederalReporting.gov:
• Name of entity receiving award
• Amount of award
• Funding agency
• NAICS code
• Program source
• Award title
• Location of the entity (including
congressional district)
• Place of performance (including
congressional district)
• Unique identifier of the entity and Some prime and sub-contract infor-
its parent (if owned by another mation will be pre-populated in
entity) FSRS with data from the Federal Pro-
curement Data System (FPDS) and
Compensation and names of the top the Central Contractor Registration
five executives (prime and/or sub- System (CCR) to ensure quality data
contractor), are limited to entities and to minimize unintended data
that have met all three of the fol-
entry errors by award recipients.
lowing requirements: FSRS interfaces with the above two
• More than 80% of annual gross systems (FPDS and CCR) to make
revenues are funded by the the information available to the gen-
Federal government, eral public in USASpending.gov.
FSRS allows the prime contractors to
• Annual gross revenues are greater
manage and report against multiple
than $25 million in the previous
contracts awarded to their registered
fiscal year, and
DUNS number. The awardees can
• Compensation information is not sort and filter their worklist by type,
already available through report- by awarding agency, and by other fil-
ing to the SEC or some other pub- ter terms. They will be able to see, by
lic source. contract number, the FFATA sub-con-
tract reports filed against that partic-
For ARRA-funded contracts subject ular contract.
to FFATA reporting, the prime recipi- •••
ent will be required to report the con- Please contact Nelly Gizdova, 410-
tracts to both FederalReporting.gov and 423-4800 or ngizdova@uhy-us.com
FSRS, if required by the contract. for more information.