Ok, so you have an award from the government and you understand that there are requirements on how your accounting system is set up and operated. Where do these requirements come from? How do you know what needs to be done to make your accounting system compliant? I think it makes sense to understand the "rules of the playground". This review is fairly superficial but will help you, as a Federal Award participant, to understand more of the "why" and where it is coming from. This overview may also help you understand some of the other terms and conditions that are always attached to a Federal Award.
First of all it is important to understand a little bit of the working of the Federal Government. The general and permanent laws of the United States are published by the U.S. House of Representatives and called the United States Code. The code is separated into areas of subject matter, called Titles. There are currently 51 titles. A normal callout of these laws typically looks like:
50 USC Secs. 46
This is normally read like: Title 50 of the U.S. Code, Section 46. The Code has both positive law and prima facie evidence of the laws within the titles. The titles enacted into positive law include titles 1,3,4,5,9,10,11,13,14,17,18,23,28,31,32,35,36,37,38,39,40,41,44,46,49 and 51. The U.S. Code does not include how agencies regulate the laws, Presidential Orders, decisions of Federal Courts, treaties or other State & Local laws.
The Code of Federal Regulations (CFR) contains regulations that generally spell out how agencies will carry out or interpret the law (U.S. Code). The CFR is divided into 50 Titles covering different areas from Title 10 for Energy to Title 32 for National Defense to Title 42 for Public Health (as an example). The U.S. Code precedes the Code of Federal Regulations. The CFR is what is considered administrative law. Each Title of the CFR is divided into Chapters which normally bear the name of the responsible agency. Each Chapter is then divided into parts and into sections. The CFR contains a lot of the requirements that govern over Federal Procurements and Grants. For instance, the Federal Acquisition Regulations are spelled out in Title 48 of the CFR. Title 10 part 600 outlines guidelines for Department of Energy Grants. The CFR is generally specified similarly to the U.S. Code as it normally reads:
Again, this is read as Title 48 of the Code of Federal Regulations, part 31. Generally this is where most of the requirements come from when receiving a grant or contract from the Federal Government. Generally the CFR will reference the source where the law dictates the specific section of the CFR. There also can be references to other regulations such as to Generally Accepted Accounting Principles (GAAP). These are derived from regulations of the Federal Accounting Standards Board (FASB) which is a private non-profit organization that establishes regulations for fair and consistent accounting.
Finally there are Executive Orders and OMB Circulars that define additional requirements that may come into play. For instance, the Department of Energy may require awardees to do an audit of their accounting system that is governed by the OMB Circular A-133 (Commonly known as an A-133 Audit).
As you can see, the trail of regulations is very large and can become confusing very fast. This is typically where small business can get into trouble since they may not be familiar with what is affectionately referred to as the "rat maze" of regulations. This is exactly why the experts at ReliAscent are a valuable addition to your team.