Braided Funding Compliance Framework Comparison Chart
Side-by-side comparison of 2 CFR 200, ISDEAA (25 CFR), CMS Medicaid cost principles, and state contract terms — covering allowable costs, cost allocation, indirect costs, reporting, audit, and fiscal year.
Community healthcare organizations managing braided funding operate under multiple compliance frameworks simultaneously. These frameworks share surface-level similarities — they all govern how costs are allocated, reported, and audited — but differ in foundational ways that affect daily operations.
This reference compares the four frameworks most commonly encountered by braided-funded healthcare organizations: 2 CFR 200 (Uniform Guidance for federal grants), ISDEAA/25 CFR (tribal 638 contracts and compacts), CMS Medicaid cost principles, and state contract terms. Where state-specific examples are needed, Washington State terms are used.
How to use this chart: For any shared cost in your organization — a clinician's salary, office rent, IT infrastructure — trace it across the applicable frameworks below. The framework-specific treatment of that cost determines how it must be allocated, documented, and reported for each funding stream.
Legal Foundation & Relationship
| Dimension | 2 CFR 200 (Uniform Guidance) | ISDEAA / 25 CFR Part 900 | CMS Medicaid Cost Principles | State Contract Terms |
|---|---|---|---|---|
| Governing authority | 2 CFR Part 200 (OMB) | 25 U.S.C. 5301 et seq. (ISDEAA); 25 CFR Part 900/1000 | 42 CFR Part 413; CMS Provider Reimbursement Manual (PRM-15) | State procurement law; individual contract terms |
| Legal relationship | Grantor-grantee | Government-to-government (tribal sovereignty) | Provider-payer (reimbursement) | Contractor-contractee |
| Nature of funding | Competitive, discretionary grants and cooperative agreements | Exercise of tribal self-determination; legal entitlement to operate federal programs | Reimbursement for covered services rendered | Contracted services; may be discretionary or entitlement-based |
| Applies to | Competitive federal awards from SAMHSA, HRSA, CDC, ACF, and other HHS agencies | IHS Title I contracts (Section 638), Title IV compacts, and ISDEAA-authorized programs | Medicaid-enrolled providers billing for covered services | State-administered behavioral health, public health, opioid response, and similar programs |
Fiscal Year & Reporting Periods
| Dimension | 2 CFR 200 | ISDEAA / 25 CFR | CMS Medicaid | State Contracts |
|---|---|---|---|---|
| Standard fiscal year | Federal: October 1 - September 30 | Contract-defined (often aligns with federal FY but may differ) | Calendar: January 1 - December 31 | State: July 1 - June 30 (most states, including WA) |
| Financial reporting period | Matches award budget period (typically federal FY) | Contract year | Calendar year (cost reports) | State fiscal year or contract period |
| Financial reporting frequency | Quarterly or semi-annual (SF-425) | Per contract terms (typically annual, with interim reports) | Annual cost report; interim encounter data | Quarterly or as specified in contract |
| Financial report form | SF-425 (Federal Financial Report) | IHS-specific forms; financial status per contract terms | CMS cost report format (varies by provider type) | State-specific templates |
| Programmatic reporting | SPARS, GPRA, NOMs, or agency-specific systems | IHS Area Office; program-specific deliverables | Quality measures, encounter data | Deliverable-based; state-specific portals |
| Reporting portal | PMS (Payment Management System), Grants.gov, agency-specific | IHS Portal | State Medicaid agency portal | State contract management portal |
Cost Principles: What's Allowable
| Dimension | 2 CFR 200 | ISDEAA / 25 CFR | CMS Medicaid | State Contracts |
|---|---|---|---|---|
| Core cost test | Necessary, reasonable, allocable to the award (2 CFR 200.403-405) | Reasonable costs of activities necessary to carry out the contracted program (25 U.S.C. 5325) | Reasonable, related to patient care, not in excess of what a prudent buyer would pay | Per contract terms; often mirrors 2 CFR 200 for pass-through federal funding |
| Specific cost guidance | 2 CFR 200 Subpart E — 55 selected items of cost (200.420-200.475) with explicit allowable/unallowable determinations | Contract/compact terms define scope; ISDEAA provides broad authority for program support costs | CMS PRM-15 (Provider Reimbursement Manual); specific treatment by cost type | Contract-specific; may reference state administrative code |
| Personnel costs | Allowable when documented per 200.430 (compensation); time-and-effort required | Allowable when necessary for contracted program delivery | Allowable when related to patient care; must be at reasonable rates | Allowable per contract terms; may require time reporting |
| Equipment (>$5,000) | Requires prior approval or authorization in budget (200.439) | Per contract terms; tribe typically has greater flexibility | Depreciation or rental charge, not direct purchase (unless approved) | Per contract terms; may require prior approval |
| Travel | Must follow organization's written travel policy or federal rates (200.474) | Per contract terms; tribal travel policy applies | Limited; typically only when related to patient care delivery | Per state travel rates or contract terms |
| Lobbying | Unallowable (200.450) | Unallowable for federally-funded lobbying; tribal sovereign activities may differ | Not applicable (Medicaid is reimbursement, not grant) | Varies by state law |
| Fundraising | Unallowable (200.442) | Per contract terms | Not applicable | Per contract terms |
| Alcohol | Unallowable (200.423) except for research | Per contract terms | Not applicable to cost reporting | Per contract terms |
Overhead Recovery & Indirect Costs
This is the area of greatest divergence across frameworks, and the most common source of compliance errors in braided-funded organizations.
| Dimension | 2 CFR 200 | ISDEAA / 25 CFR | CMS Medicaid | State Contracts |
|---|---|---|---|---|
| Overhead recovery mechanism | Negotiated Indirect Cost Rate Agreement (NICRA) or 10% de minimis (200.414) | Contract Support Costs (CSC) — legally distinct from indirect costs | Built into PPS rate calculation or cost report; overhead allocated via cost finding | Indirect cost rate per contract terms (often capped) |
| Rate determination | Negotiated with cognizant federal agency (or DOI-IBIA for tribal orgs) | CSC rate determined by IHS based on tribal organization's needs assessment | Calculated from cost report data using CMS-approved methodology | Specified in contract; may reference federal rate, cap at lower percentage, or define its own methodology |
| Typical rate range | 10-35% (varies by organization) | 15-30% CSC rate (varies; legally an entitlement, not a negotiated cap) | N/A — overhead is a component of the PPS rate or cost report | 10-15% cap is common for state behavioral health contracts |
| Rate limitations | Full negotiated rate applies to federal awards; 10% de minimis if no NICRA | CSC is a legal entitlement — not subject to appropriations caps (per Salazar v. Ramah, 2012) | Built into rate methodology; no separate cap | Contract-specified cap may be significantly lower than federal rate |
| What happens when rates differ | Organization recovers full indirect costs on 2 CFR 200 awards | CSC covers program support costs on 638 contracts; does not apply to competitive grants | Overhead is embedded in PPS rate; not separately recovered | Under-recovery on capped contracts must be absorbed or allocated elsewhere |
| Key distinction | Indirect costs are a category of costs recovered via a rate | CSC is a legal entitlement to fund overhead of programs the tribe operates on behalf of the government | Overhead is a component of reimbursement, not a separate recovery | Indirect costs are a contractual provision subject to negotiation and caps |
Critical Interaction: CSC and Indirect Costs in Tribal Organizations
A tribal health program with both 638 contracts and competitive federal grants uses two different overhead recovery mechanisms simultaneously:
- CSC covers overhead on 638 contracts. The CSC rate is applied to direct program costs.
- DOI-IBIA indirect cost rate covers overhead on competitive federal grants (SAMHSA, CDC, HRSA awards under 2 CFR 200).
The same overhead cost pool cannot be recovered through both CSC and indirect cost rates. The cost allocation plan must clearly delineate which overhead costs are recovered through which mechanism. This delineation is one of the most technically complex aspects of tribal braided compliance — and one that auditors scrutinize closely.
Cost Allocation Requirements
| Dimension | 2 CFR 200 | ISDEAA / 25 CFR | CMS Medicaid | State Contracts |
|---|---|---|---|---|
| Allocation requirement | Costs must be allocable to the award (200.405). Shared costs require a reasonable allocation methodology. | Costs must be related to the contracted program. Shared costs require allocation per the tribe's cost allocation plan. | Costs must be allocated to cost centers for PPS rate calculation or cost report purposes. CMS methodology required. | Per contract terms. Shared costs require allocation; methodology may be specified or left to the contractor. |
| Personnel allocation method | Time-and-effort documentation (200.430). After-the-fact activity records or periodic certifications. Semi-annual minimum. | Per contract terms and tribal policy. Generally requires documentation of time spent on contracted programs. | Encounter-based for clinical staff; time-based or cost-based for support staff. Must support PPS rate. | Per contract terms. May require time reports, deliverable documentation, or both. |
| Non-personnel allocation bases | "Benefits received" or other equitable method (200.405). Common bases: square footage, FTEs, direct costs, modified total direct costs. | Per tribal cost allocation plan. Similar bases as 2 CFR 200 but governed by contract terms rather than Uniform Guidance. | CMS-approved methodology. Step-down allocation, direct assignment, or other CMS-recognized method. | Per contract terms. Often less prescriptive than federal requirements. |
| Cost allocation plan requirement | Required for organizations with federal awards (200.416-200.418). Must be submitted to cognizant agency if >$35M in federal awards. | Required by most 638 contracts. Must demonstrate how shared costs are distributed between 638 programs and other funding. | Required for cost report preparation. Must follow CMS cost finding methodology. | May or may not be explicitly required; recommended for audit purposes. |
| Documentation standard | Must be "supported by a system of internal controls" (200.303). Methodology must be documented and applied consistently. | Documentation per contract terms. IHS may review during site visits. | Documentation per CMS audit requirements. Cost report working papers must support all allocations. | Per contract terms. State auditors may test allocation methodology. |
Audit Requirements
| Dimension | 2 CFR 200 | ISDEAA / 25 CFR | CMS Medicaid | State Contracts |
|---|---|---|---|---|
| Primary audit | Single Audit per 2 CFR 200 Subpart F (required when federal expenditures ≥ $750,000) | Single Audit per 2 CFR 200 Subpart F (638 contracts are federal awards). ISDEAA compliance supplement applies. | Medicaid cost report audit (by state Medicaid agency or its contractor) | State audit per contract terms; may be covered by Single Audit if state funding passes through federal awards |
| Audit standard | Generally Accepted Government Auditing Standards (GAGAS / Yellow Book) | GAGAS for Single Audit. ISDEAA-specific compliance supplement within the Single Audit framework. | CMS audit protocols; GAGAS if government-funded | State audit standards; GAGAS if applicable |
| What auditors test | Allowable costs, cash management, eligibility, matching, period of performance, procurement, reporting, subrecipient monitoring, earmarking, equipment management | ISDEAA-specific: CSC calculation, contract modification compliance, self-determination requirements, program performance. Plus 2 CFR 200 tests for competitive grants. | Cost report accuracy, rate calculation, encounter data validity, compliance with CMS conditions of participation | Deliverable completion, cost allowability, contract compliance, state-specific requirements |
| Key risk areas for braided orgs | Cost allocation across multiple awards; time-and-effort documentation; indirect cost rate application | CSC reconciliation (estimated vs. actual); indirect cost/CSC delineation; allocation of costs between 638 and non-638 programs | PPS rate accuracy; allocation of costs between CCBHC and non-CCBHC services; encounter data consistency | Indirect cost cap compliance; deliverable documentation; cost allocation consistency with federal reporting |
| Audit timing | Within 9 months of fiscal year-end (Single Audit); earlier submission to Federal Audit Clearinghouse preferred | Same as Single Audit timing for covered awards. 638-specific reviews per IHS schedule. | Per state Medicaid agency schedule (may be separate from Single Audit) | Per contract terms; may align with state fiscal year-end |
The Dual-Audit Reality for Tribal Health Programs
A tribal health program with both 638 contracts and competitive federal grants may be subject to audit under two different compliance supplements within the same Single Audit:
- ISDEAA compliance supplement — for 638 contracts
- Standard 2 CFR 200 compliance supplement — for competitive SAMHSA, CDC, and HRSA grants
Different audit tests apply to different programs within the same organization. Auditors unfamiliar with this structure may apply 2 CFR 200 tests to 638 contracts (producing invalid findings) or ISDEAA tests to competitive grants (missing required tests). The organization must ensure its audit firm understands both frameworks.
Summary: Key Differences That Affect Daily Operations
| Operational Decision | 2 CFR 200 | ISDEAA | CMS Medicaid | State Contracts |
|---|---|---|---|---|
| "Is this cost allowable?" | Check 200.420-200.475 | Check contract terms + ISDEAA authority | Check CMS PRM-15 + state Medicaid rules | Check contract terms |
| "How do I recover overhead?" | Indirect cost rate (NICRA or 10% de minimis) | Contract Support Costs (legal entitlement) | Built into PPS rate or cost report | Indirect rate per contract (often capped at 10-15%) |
| "When do I report finances?" | Federal FY (Oct-Sep); SF-425 | Contract year; IHS-specific forms | Calendar year; CMS cost report | State FY (Jul-Jun); state templates |
| "What effort documentation do I need?" | After-the-fact activity records or certifications (200.430) | Per contract terms; tribal policy | Encounter data for clinical; time-based for support | Per contract deliverable requirements |
| "Who audits me?" | Single Audit (Subpart F compliance supplement) | Single Audit (ISDEAA compliance supplement) | State Medicaid agency or contractor | State auditors; may overlap with Single Audit |
| "What happens if I make an error?" | Questioned costs; potential disallowance and return of funds | Questioned costs; potential contract modification or non-renewal | Rate adjustment; potential recoupment | Contract non-compliance; potential non-renewal |
Using This Chart for Cost Allocation
When allocating a shared cost across multiple funding streams:
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Identify which frameworks apply. A cost shared between a SAMHSA grant and a state contract involves 2 CFR 200 and state contract terms. A cost shared between a 638 contract, a SAMHSA grant, and Medicaid involves ISDEAA, 2 CFR 200, and CMS.
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Check allowability under each framework. A cost that is allowable under one framework may not be under another. If a cost is unallowable under one stream, it cannot be allocated to that stream — the allocation must shift to eligible streams or be absorbed by unrestricted funds.
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Determine the correct overhead treatment for each stream. Apply the indirect cost rate to 2 CFR 200 awards, CSC to 638 contracts, state cap to state contracts, and CMS methodology to Medicaid. These are not interchangeable.
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Document the allocation methodology. Write down the basis for the allocation (time-based for personnel, square footage for facilities, etc.), the framework-specific treatment, and any adjustments made for framework differences. This documentation is required by every framework — the specifics of what they ask for differ, but the need for written methodology is universal.
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Reconcile across frameworks. The total allocated across all streams must equal the actual total cost. The portions claimed under each framework must be consistent with each other and with the underlying effort and cost documentation.
This reference is part of GrantBridges's braided funding compliance series. For framework-specific guidance, see the CCBHC Braided Funding Guide and Tribal Health Braided Compliance Guide.