3. Resources
Educa7on Department General Administra7ve Requirements (EDGAR) ‐
hAp://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html
Office of Management and Budget (OMB) Circulars
• A‐110 ‐ Uniform administra7ve requirements for grants and agreements with ins7tu7ons of higher educa7on,
hospitals, and other non‐profit organiza7ons
hAp://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a110/2cfr215‐0.pdf
• A‐122 ‐ Cost Principles for Non‐Profit Organiza7ons ‐
hAp://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a122/a122_2004.pdf
• A‐133 ‐ Audits of States, Local Governments, and Non‐Profit Organiza7ons ‐
hAp://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdf
Uniform Grant Management Standards (UGMS) –
hAps://governor.state.tx.us/files/state‐grants/UGMS062004.doc
5. Approved Grant Application
• The approved nego7ated grant applica7on and the signed No7ce of Grant Award
(NOGA) together cons7tute a legally binding agreement between TEA and
the grantee.
Cer$fica$on and Incorpora$on
• I hereby cer7fy that the informa7on contained in this applica7on is, to the best of my knowledge, correct and that the organiza7on
named above has authorized me as its representa7ve to obligate this organiza7on in a legally binding contractual agreement. I
further cer7fy that any ensuing program and ac7vity will be conducted in accordance with all applicable Federal and State laws and
regula7ons, applica7on guidelines and instruc7ons, the Provisions and Assurances, Debarment and Suspension, lobbying
requirements, Special Provisions and Assurances, and the schedules aAached as applicable. It is understood by the applicant that this
applica7on cons7tutes an offer and, if accepted by Agency or renego7ated to acceptance, will form a binding agreement.
• The grantee is responsible for maintaining copies of nego7ated changes,
correc7ons, and amendments to the original applica7on.
6. Budget Schedules
• Budget schedules represent the “financial plan” for the grant project.
• Organized by cost categories in accordance with federal Generally Accepted
Accoun7ng Principles (GAAP)
1. Direct Costs
• Payroll Costs (6100)
• Professional and Contracted Services (6200)
• Supplies and Materials (6300)
• Other Opera7ng Costs (6400)
• Capital Outlay (6600)
2. Indirect Costs
• Narra7ves should support and reference the budgeted items.
7. Budget Review Process
• Review all items for allowability
• Calculate the maximum allowable indirect costs
• TEA may review whether budget items charged to indirect costs are consistent among
the applicant’s grant projects
• Review job posi7ons, salaries, and wages
• Number and classifica7on of posi7ons
• Percent of 7me allocated to the grant project
• Reasonableness of compensa7on
• Each job posi7on funded with the grant must be listed in the
approved applica7on
9. Provisions and Assurances
• General Provisions and Assurances (Schedule #6A) – included with every grant applica7on from TEA
• Debarment and Suspension (Schedule #6B) – included with every federally funded applica7on
• Lobbying Cer7fica7on (Schedule #6C) – included with every federal applica7on in which the applicant can
request greater than $100,000
• Disclosure of Lobbying (Schedule #6D)‐ included with every federal applica7on in which the applicant can
request greater than $100,000
• NCLB Provisions and Assurances (Schedule #6E) – included with every applica7on funded by NCLB federal
funds
• Program‐Specific Provisions and Assurances (Schedule #6F) – included if the program requires addi7onal
provisions or assurances such as supplement‐not‐supplant, data collec7on, survey par7cipa7on, aAendance
at events, and other programma7c requirements
12. Premises of Federal Cost Principles
The applica7on of the cost principles is based on the premises that:
• Organiza7ons are responsible for the efficient and effec7ve administra7on of Federal awards through
the applica7on of sound management prac7ces
• internal controls
• wriAen policies and procedures
• separa7on of du7es
• checks and balances
• effec7ve and appropriate decision‐making
• appropriate authority levels approving purchases and expenditures
• Organiza7ons assume responsibility for administering Federal funds in a manner consistent with
underlying agreements, program objec7ves, and the terms and condi7ons of the Federal award
• Each organiza7on, in recogni7on of its own unique combina7on of staff, facili7es, and experience, will
have the primary responsibility for employing whatever form of organiza7on and management
techniques may be necessary to assure proper and efficient administra7on of Federal awards
13. Guidelines of Federal Cost Principles
To be allowable under Federal awards, costs must meet the following general criteria:
• Be reasonable and necessary for proper and efficient performance and administra7on of Federal
awards.
• Be allocable to Federal awards under the provisions of the Circular.
• Be authorized or not prohibited under State or local laws or regula7ons.
• Follow the most restric7ve rules
• Conform to any limita7ons or exclusions set forth in these principles, Federal laws, terms and
condi7ons of the Federal award, or other governing regula7ons as to types or amounts of cost
items.
14. Guidelines of Federal Cost Principles
• Be consistent with policies, regula7ons, and procedures that apply uniformly to both Federal
awards and other ac7vi7es of the organiza7on.
• Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost
if any other cost incurred for the same purpose in like circumstances has been allocated to the
Federal award as an indirect cost.
• Be in accordance with generally accepted accoun7ng principles (GAAP).
• Not be included as a cost or used to meet cost sharing or matching requirements of any other
Federal award in either the current or a prior period, except as specifically provided by Federal
law or regula7on.
• Be adequately documented.
15. Allowable and Unallowable Costs
• Specific allowable and unallowable costs are ojen described in the Request for Applica7on (RFA)
materials
• Part 2: Program Guidelines
• Part 3: Schedule Instruc7ons
• Guidelines Related to Specific Costs
• Costs must also be allowable as specified in the applicable OMB Circular
• Guidance related to allowable and unallowable costs are available on the Grant Resources sec7on of
the TEA Grant Opportuni7es page at:
hAp://www.tea.state.tx.us/index4.aspx?id=8339&menu_id=951
16. Allowable Payroll Costs
• OMB Circular A‐122, AAachment B, sec7on 8 addresses “Compensa7on for Personal Services”
• Payroll costs are allowable to the extent that:
• compensa7on is reasonable for the services rendered and conforms to the established policy of the
organiza7on consistently applied to federal and non‐federal ac7vi7es
• salaries and wages are supported by 7me and effort reports
• Compensa7on is considered reasonable to the extent that:
• it is consistent with that paid for similar work for non‐grant funded employees (when organiza7on is
predominantly engaged in non‐federal ac7vi7es)
• it is comparable to that paid for similar work in the labor markets (when organiza7on is predominately
engaged in federal ac7vi7es)
18. Liquidation of Obligations
• Grantees must pay all of their bills or the expenditure must be in their “accounts payable” by the
7me the final expenditure report is due to TEA.
• In order to pay a bill or to be in “accounts payable”, the invoice may have been received but the
goods and services must have been received.
• NOTE: Auditors will determine if supplies and equipment were purchased in sufficient 7me to
benefit the current grant period. Grantees cannot stockpile for future grant periods.
21. What Does “Necessary” Mean?
• A cost is necessary when it is vital or required in order to meet the objec7ves of the grant or for
the grant to be successful.
• It is not “nice to have”.
22. What are Allocable Costs?
• A cost is allocable to a par7cular cost objec@ve if the goods or services involved are chargeable or
assignable to the cost objec7ve in accordance with rela7ve benefits received.
• Cost objec@ve: a func7on, grant, contract, or other ac7vity for which cost data are needed and for
which costs are incurred
• it is possible for some costs to benefit more than one objec7ve or program
• a cost benefiqng more than one program must be shared or prorated by those programs
• A cost allocable to a par7cular Federal award or cost objec7ve may not be charged to other
Federal awards to overcome fund deficiencies, to avoid restric7ons imposed by law or terms of
the Federal awards, or for any other reasons.
26. Origin of Financial Management Requirements
• 34 CFR Part 74 – Uniform Administra7ve Requirements for Grants and
Agreements with Ins7tu7ons of Higher Educa7on, Hospitals and
Other Nonprofit Organiza7ons (OMB Circular A‐110)
• Codified in Title 2 CFR Part 215
27. Financial Management Systems
34 CFR 74. 21
• Financial management systems shall provide for:
• Accurate, current, and complete disclosure of the financial results of
each federally‐sponsored project
28. Financial Management Systems
• Records that adequately iden7fy the funding source and applica7on (i.e., use) of
funds for federally funded grant programs
• Records shall contain informa7on for each grant you receive pertaining to:
• Awards
• Authoriza7ons
• Obliga7ons
• Unobligated balances
• Assets
• Outlays (i.e., expenditures)
• Income (i.e., revenues)
• Interest (on debt)
29. Financial Management Systems
• Effec7ve control over and accountability for all funds, property, and
other assets
• Adequately safeguard all assets and assure they are used solely for
authorized purposes
• Budget control ‐ compare actual expenditures to budget amounts for
each award
30. Financial Management Systems
• WriAen procedures to minimize the 7me between the receipt of
funds by the grantee and the disbursement of funds
• 3‐day cash management rule – no more cash on hand than to meet 3
days’ business needs
31. Financial Management Systems
• WriAen procedures for determining the reasonableness, allocability,
and allowability of costs in accordance with the provisions of the
federal cost principles and the terms and condi7ons of the award
• Accoun7ng records supported by original source documenta7on
33. Use of Organization Credit Cards
• Grantees are advised to use cau7on in using organiza7on credit cards
• A grantee may use any medium to transact business during the course of implemen7ng a grant
program. However, some business prac7ces are beAer than others because they facilitate the
implementa7on of internal controls that mi7gate the risk that an employee or other agent will
use public (or local) funds in an inappropriate or unauthorized manner.
• A grantee may use a revolving credit or charge account issued directly to the grantee (i.e., a
corporate account) to transact business related to a grant program provided that it properly
accounts for each individual transac7on charged to the account(s).
34. Use of Organization Credit Cards
• Grantees should maintain the original, internal accoun7ng records that iden7fy the business
purpose and the general ledger account code classifica7on of each transac7on :
• purchase order
• travel reimbursement voucher
• employee expense reimbursement voucher, etc.
.
• Grantees should maintain the original, third‐party records (e.g., invoice, itemized receipt) that:
• itemizes and adequately describes or otherwise iden7fies the goods purchased or services rendered
• clearly iden7fies the business or individual the grantee transacted with
• iden7fies the date of the transac7on
35. Use of Organization Credit Cards
• The classifica7on of costs by specific funding source and expense type and the
maintenance of adequate source documenta7on is necessary for repor7ng
purposes to the TEA.
• It is also necessary to demonstrate compliance with state and federal cost
principles and standards of financial management systems and conformance with
generally accepted accoun7ng principles.
• It is also a requirement of the Internal Revenue Code applicable to all business
en77es.
36. Program Income
• Program income includes income from:
• Fees for services performed
• The use or rental of equipment or space acquired under a federal grant
• The sale of commodi7es or items fabricated under the grant
• License fees and royal7es
38. Time and Effort Reporting and Charges to Payroll
• OMB Circular A‐122, AAachment B, Sec7on 8. “Compensa7on for Personal Services,”
Subsec7on m. “Support of Salaries and Wages”
• All charges to payroll for grant‐funded staff must be based on distribu7on of ac7vity
reports (i.e., 7me and effort reports). This includes professionals (exempt) and
nonprofessionals (nonexempt) whose compensa7on is charged, in whole or in part,
directly to awards.
• Therefore, all personnel, whether 100% funded or par$ally funded from the grant,
must maintain $me and effort records for 100% of the $me (unless the organiza7on has
a subs7tute system approved in wri7ng by the cognizant agency).
39. Nonprofessional (non-exempt) Employees
• Charges for salaries and wages of nonprofessional employees must
also be supported by records indica7ng the total number of hours
worked each day maintained in conformance with the Department of
Labor regula7ons implemen7ng the Fair Labor Standards Act (FLSA).
For this purpose, the term “nonprofessional employee” shall have the
same meaning as “nonexempt employee” under FLSA.
40. Components of a Time and Effort Report
• Daily records:
• The ac7vity (what the employee did)
• Time frame (how long it took the employee to do it)
• Funding source (which funding source will it be charged to)
• Job descrip7ons
NOTE: If a grantee does not have adequate 7me and effort records then either TEA or
an independent auditor (CPA) may disallow payroll costs charged to the grant program.
42. Equipment and Furniture
• All capitalized equipment and furniture must be approved in your grant applica7on
• Capitalized Equipment means:
• Tangible nonexpendable personal property having a useful life of more than one year and
• an acquisi7on cost which equals or exceeds $5,000 or more per unit, or
• which meets the capitaliza7on level of the organiza7on for financial statement purposes, whichever is
less
(34 CFR 74.2 and OMB Circular A‐122, AAachment B, sec7on 15)
• Title to equipment belongs to the grantee
• TEA reserves the right to transfer equipment due to noncompliance or ajer the grant ends,
regardless of how it is classified
43. Use of Equipment
• Grantee shall use equipment as long as needed for the project for which it was
originally purchased, whether or not the project con7nues to be federally funded.
• When no longer needed, equipment may be used in other federal grants funded
by TEA (if purchased with state funds, would be used in another state program). If
no other grants funded by TEA, then may use in other federal grants.
• Shall make equipment available for other federally funded projects as long as
doesn’t interfere with project under which it was originally acquired.
(34 CFR 74.34)
44. Property Management Records
34 CFR 74.34(f)
• Equipment records shall be maintained accurately and shall include:
• Descrip7on of the equipment
• Serial number, model number or other iden7fica7on number
• Funding source of the equipment, including the award number
• Acquisi7on date and cost, including the unit acquisi7on cost
• Percent federal par7cipa7on
• Loca7on and condi7on of the equipment and the date reported
• Ul7mate disposi7on of the equipment
45. Other Requirements
• A physical inventory of equipment must be taken and the results reconciled with the equipment
records at least once every two years.
• A control system must be in effect to insure adequate safeguards to prevent loss, damage, or thej
of the equipment.
• Implement procedures to adequately maintain the equipment to keep it in good condi7on.
• Provide insurance for property purchased with grant funds equivalent to insurance for property
purchased with non‐grant funds (34 CFR 74.31)
• If authorized by TEA to sell the equipment, establish procedures which provide for compe77on to
the extent prac7cable and result in highest possible return.
46. Disposition of Equipment
34 CFR 74.34(g)
When no longer needed for original project or another federally funded project:
• Grantee shall request disposi7on instruc7ons from TEA
• If approved by TEA, equipment with current fair market value of less than $5,000 ‐ may be
retained, sold, or otherwise disposed of with no further obliga7ons to TEA (except as noted
below)
• Equipment with current fair market value of $5,000 or more – may be retained or sold but TEA
shall have right to the proceeds
• TEA reserves the right to transfer 7tle to another grantee for noncompliance or as needed ajer
the project ends (regardless of how equipment is classified)
48. Ensuring Supplement, Not Supplant
• The applicant assures in their applica7ons for federal funds that they are using
funds to supplement, not supplant.
• In discre7onary applica7ons, applicants must describe how funds and ac7vi7es
are supplementary to current or previously funded ac7vi7es.
• Penal7es for supplan7ng are ojen7mes very severe. All federal funds involved in
a supplan7ng situa7on would most likely have to be returned to the federal
government.
49. Am I Supplanting?
Ask yourself this ques7on:
• If I didn’t have federal funds available to conduct this ac7vity/service, would I s7ll
conduct it with other funds anyway?
• If the answer to the ques7on is yes, you are supplan7ng because it is no longer a
supplementary ac7vity. You must be able to demonstrate that you could not conduct the
ac7vity if it weren’t for these federal funds.
• The test to determine whether supplan7ng has occurred is whether the programs
supported with federal funds would, in the absence of those federal funds, have been
supported with other funds.
50. Supplement, Not Supplant
Diminished Budgets
• A grantee can demonstrate that it is supplemen7ng where there is
acceptable documenta7on of a diminished budget.
• Must be able to prove that fewer non‐federal funds are available in
the current year than there were in the previous year.
• Must be carefully documented.
52. OMB Circular A-133
• Requires a Single Audit if the grantee expends more than $500,000
total in each fiscal year in federal grant funds (all federal grants added
together)
• 34 CFR 74.26 requires nonprofit organiza7ons to comply with the
requirements in the Single Audit Act and OMB Circular A‐133
• Single Audits are conducted by an independent auditor hired by the
nonprofit organiza7on
53. Single Audit Requirements
• A single audit encompasses a grantee’s financial statements and schedule of
expenditures of federal awards for the en7re organiza7on.
• A program‐specific audit focuses on one par7cular program and may be selected
by the auditee if they expend federal awards under only one federal program and
the federal program’s laws, regula7ons, or grant agreements do not require a
financial statement audit of the auditee (primarily for grantees that receive only
one federal grant even if they expend more than $500,000 annually)
55. Audit Report Submission
• Audit must be completed and the data collec7on form and repor7ng
package submiAed with 30 days ajer receipt of the independent
auditor’s report, or 9 months ajer the end of the audit period,
whichever is earlier.
• Data Collec7on Form (completed by the auditor) ‐ states the audit
was completed in accordance with A‐133 and provides informa7on
about your organiza7on, your federal programs, and the results of the
audit
56. Audit Report Submission
• You must submit a copy of the Data Collec7on Form and the repor7ng
package to the Federal Clearinghouse designated by OMB
• hAp://harvester.census.gov/sac/
• Click on “Search the Single Audit Database”
59. Contract Administration System
• Maintain system for contract administra7on to ensure:
• contractor is conforming to terms and condi7ons of award and specifica7ons
• adequate and 7mely follow up of all purchases
• evalua7on of contractor performance and documenta7on of performance
• contract defines a sound and complete agreement
60. Contract Provisions
• Contractual provisions in contracts more than $25,000 that allow for:
• administra7ve, contractual, or legal remedies in the event the contractor
violates or breaches the contract terms, and the remedies
• termina7on (for cause or for convenience) by the grantee, including the
manner for termina7on and basis for seAlement
• termina7on for default or for circumstances beyond the control of the
contractor
61. Monitoring and Reporting
• Grantees must:
• manage and monitor each project
• monitor any subawards or subcontracts
• report to TEA as required (both fiscal and programma7c reports)
• retain all original records for 5 years from the ending date of the award
• provide 7mely and unrestricted access to records and to personnel by TEA,
USDE, OIG, etc. as long as records are retained
• NOTE: Records need to be organized and easily accessible.
63. Matching or Cost Sharing Basics
(34 CFR 74.23)
• Other federal funds may not be used to meet a matching or cost sharing
requirement (unless otherwise permiAed in the authorizing program statute –
Even Start allows other federal funds for cost share)
• Costs must first be allowable costs under the grant program to be allowable to be
counted toward cost share or match (the costs must also be obligated/expended
during the same grant period)
• Costs used to count toward cost share or match may not be used to count toward
cost share or match of another federal program
64. Determining Value of In-Kind Contributions
• Grantee in‐kind contribu7ons
• Third‐party in‐kind contribu7ons
• Services and property donated by others
• Volunteer services
• Services provided by employees from other organiza7ons
• Donated supplies
• Donated equipment, buildings, or land
65. Grantee In-Kind Contributions
• Equipment owned by grantee – 6 2/3% of original acquisi7on cost
• Use of building space owned by grantee – 2% of original acquisi7on
cost plus capital improvements (for the square footage used)
66. Third Party Volunteer Services
• Services provided by professional and technical personnel, consultants, and other
skilled and unskilled labor
• Count if the service is an integral and necessary part of the approved grant
project
• Value at rate consistent with those paid for similar work in the grantee
organiza7on or in the labor market
• May include reasonable, allowable, and allocable fringe benefits
67. Third Party Other Employees
• Employees of other organiza7ons (“loaned” employee)
• Value at employee’s regular rate of pay (plus reasonable, allowable, and
allocable fringe benefits)
• Excludes any overhead costs
• Must be for what employee is normally paid to do (same line of work)
68. Third Party Donated Supplies
• Non‐capitalized equipment, office supplies, workshop or classroom
supplies, etc.
• Value shall be reasonable and not exceed fair market value at 7me of
dona7on