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Nonprofit
Grant
Management
TopicsSortingitallout
CommonAudit
Findings
OMBCircularA-
122
Accountingfor
Funds
TimeandEffort
Equipment
Supplement,not
su...
Resources
 Education Department General Administrative Requirements (EDGAR) -
http://www2.ed.gov/policy/fund/reg/edgarReg...
Sorting It All Out…
Approved Grant Application
• The approved negotiated grant application and the signed Notice of Grant Award
(NOGA) togethe...
Budget Schedules
• Budget schedules represent the “financial plan” for the grant project.
• Organized by cost categories i...
Budget Review Process
• Review all items for allowability
• Calculate the maximum allowable indirect costs
• TEA may revie...
Amendments
• Certain budgetary changes require TEA’s prior approval via the
amendment process
• Refer to specific instruct...
Provisions and Assurances
• General Provisions and Assurances (Schedule #6A) – included with every grant application from ...
Common Audit Findings
Inadequate
Accounting Records
No Source
Documentation
Inadequate Internal
Controls
Supplanting
Unall...
OMB Circular A-122 and
Federal Cost Principles
Premises of Federal Cost Principles
The application of the cost principles is based on the premises that:
• Organizations ...
Guidelines of Federal Cost Principles
To be allowable under Federal awards, costs must meet the following general criteria...
Guidelines of Federal Cost Principles
• Be consistent with policies, regulations, and procedures that apply uniformly to b...
Allowable and Unallowable Costs
• Specific allowable and unallowable costs are often described in the Request for Applicat...
Allowable Payroll Costs
• OMB Circular A-122, Attachment B, section 8 addresses “Compensation for Personal Services”
• Pay...
Obligations
“Obligations mean the amounts of orders placed, contracts and subgrants awarded, goods and
services received, ...
Liquidation of Obligations
• Grantees must pay all of their bills or the expenditure must be in their “accounts payable” b...
Reasonable and Necessary
All costs must be reasonable and necessary to carry out the grant project
• Reasonable
• What the...
Determining Reasonableness
Consideration shall be given to:
• Whether the cost is of a type generally recognized as ordina...
What Does “Necessary” Mean?
• A cost is necessary when it is vital or required in order to meet the objectives of the gran...
What are Allocable Costs?
• A cost is allocable to a particular cost objective if the goods or services involved are charg...
Direct Costs
Typical direct costs chargeable to federal grants are:
• Salaries and benefits for employees who devote time ...
Indirect Costs
Organizations must have an approved indirect cost rate from their cognizant
agency in order to charge indir...
Accounting for Funds
Origin of Financial Management Requirements
• 34 CFR Part 74 – Uniform Administrative Requirements for Grants and
Agreemen...
Financial Management Systems
34 CFR 74. 21
• Financial management systems shall provide for:
• Accurate, current, and comp...
Financial Management Systems
• Records that adequately identify the funding source and application (i.e., use) of
funds fo...
Financial Management Systems
• Effective control over and accountability for all funds, property, and
other assets
• Adequ...
Financial Management Systems
• Written procedures to minimize the time between the receipt of
funds by the grantee and the...
Financial Management Systems
• Written procedures for determining the reasonableness, allocability,
and allowability of co...
Source Documentation
• Payroll records, including charges to payroll supported by time and
effort records and copies of pa...
Use of Organization Credit Cards
• Grantees are advised to use caution in using organization credit cards
• A grantee may ...
Use of Organization Credit Cards
• Grantees should maintain the original, internal accounting records that identify the bu...
Use of Organization Credit Cards
• The classification of costs by specific funding source and expense type and the
mainten...
Program Income
• Program income includes income from:
• Fees for services performed
• The use or rental of equipment or sp...
Time and Effort
Time and Effort Reporting and Charges to Payroll
• OMB Circular A-122, Attachment B, Section 8. “Compensation for Personal...
Nonprofessional (non-exempt) Employees
• Charges for salaries and wages of nonprofessional employees must
also be supporte...
Components of a Time and Effort Report
• Daily records:
• The activity (what the employee did)
• Time frame (how long it t...
Equipment
Equipment and Furniture
• All capitalized equipment and furniture must be approved in your grant application
• Capitalized...
Use of Equipment
• Grantee shall use equipment as long as needed for the project for which it was
originally purchased, wh...
Property Management Records
34 CFR 74.34(f)
• Equipment records shall be maintained accurately and shall include:
• Descri...
Other Requirements
• A physical inventory of equipment must be taken and the results reconciled with the equipment
records...
Disposition of Equipment
34 CFR 74.34(g)
When no longer needed for original project or another federally funded project:
•...
Supplement, Not Supplant
Supplement – to add to; to enhance; to expand;
to increase; to extend; to create something new
VS...
Ensuring Supplement, Not Supplant
• The applicant assures in their applications for federal funds that they are using
fund...
Am I Supplanting?
Ask yourself this question:
• If I didn’t have federal funds available to conduct this activity/service,...
Supplement, Not Supplant
Diminished Budgets
• A grantee can demonstrate that it is supplementing where there is
acceptable...
Audit Requirements
for
Non-Profits
OMB Circular A-133
• Requires a Single Audit if the grantee expends more than $500,000
total in each fiscal year in federa...
Single Audit Requirements
• A single audit encompasses a grantee’s financial statements and schedule of
expenditures of fe...
Your Responsibilities
Under OMB Circular A-133, Auditees (i.e., YOUR ORGANIZATION) shall:
• Identify, in your accounts, al...
Audit Report Submission
• Audit must be completed and the data collection form and reporting
package submitted with 30 day...
Audit Report Submission
• You must submit a copy of the Data Collection Form and the reporting
package to the Federal Clea...
TEA’s Responsibilities
TEA’s Division of Financial Audits:
• Ensure subrecipients expending $500,000 or more in federal aw...
Contract Administration
System
Contract Administration System
• Maintain system for contract administration to ensure:
• contractor is conforming to term...
Contract Provisions
• Contractual provisions in contracts more than $25,000 that allow for:
• administrative, contractual,...
Monitoring and Reporting
• Grantees must:
• manage and monitor each project
• monitor any subawards or subcontracts
• repo...
Matching and Cost Share
Matching or Cost Sharing Basics
(34 CFR 74.23)
• Other federal funds may not be used to meet a matching or cost sharing
re...
Determining Value of In-Kind Contributions
• Grantee in-kind contributions
• Third-party in-kind contributions
• Services ...
Grantee In-Kind Contributions
• Equipment owned by grantee – 6 2/3% of original acquisition cost
• Use of building space o...
Third Party Volunteer Services
• Services provided by professional and technical personnel, consultants, and other
skilled...
Third Party Other Employees
• Employees of other organizations (“loaned” employee)
• Value at employee’s regular rate of p...
Third Party Donated Supplies
• Non-capitalized equipment, office supplies, workshop or classroom
supplies, etc.
• Value sh...
Thank you!
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Non-Profit Grant Management

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Liza Lorenzi and Jaron Barganier, Texas Education Agency and Be A Champion
Texas ACE Conference 2013
Austin, Texas

Published in: Education
  • Very nice and informative article here. Thanks for the info, you made it easy to understand. Filling out forms is super easy with PDFfiller. Try it on your own here OPM SF 86 and you'll make sure how it's simple.
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Non-Profit Grant Management

  1. 1. Nonprofit Grant Management
  2. 2. TopicsSortingitallout CommonAudit Findings OMBCircularA- 122 Accountingfor Funds TimeandEffort Equipment Supplement,not supplant AuditRequirements forNonprofits Contract Administration System Matching&Cost- Share
  3. 3. Resources  Education Department General Administrative Requirements (EDGAR) - http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html  Office of Management and Budget (OMB) Circulars • A-110 - Uniform administrative requirements for grants and agreements with institutions of higher education, hospitals, and other non-profit organizations http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a110/2cfr215-0.pdf • A-122 - Cost Principles for Non-Profit Organizations - http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a122/a122_2004.pdf • A-133 - Audits of States, Local Governments, and Non-Profit Organizations - http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdf  Uniform Grant Management Standards (UGMS) – https://governor.state.tx.us/files/state- grants/UGMS062004.doc
  4. 4. Sorting It All Out…
  5. 5. Approved Grant Application • The approved negotiated grant application and the signed Notice of Grant Award (NOGA) together constitute a legally binding agreement between TEA and the grantee. Certification and Incorporation • I hereby certify that the information contained in this application is, to the best of my knowledge, correct and that the organization named above has authorized me as its representative to obligate this organization in a legally binding contractual agreement. I further certify that any ensuing program and activity will be conducted in accordance with all applicable Federal and State laws and regulations, application guidelines and instructions, the Provisions and Assurances, Debarment and Suspension, lobbying requirements, Special Provisions and Assurances, and the schedules attached as applicable. It is understood by the applicant that this application constitutes an offer and, if accepted by Agency or renegotiated to acceptance, will form a binding agreement. • The grantee is responsible for maintaining copies of negotiated changes, corrections, and amendments to the original application.
  6. 6. Budget Schedules • Budget schedules represent the “financial plan” for the grant project. • Organized by cost categories in accordance with federal Generally Accepted Accounting Principles (GAAP) 1. Direct Costs • Payroll Costs (6100) • Professional and Contracted Services (6200) • Supplies and Materials (6300) • Other Operating Costs (6400) • Capital Outlay (6600) 2. Indirect Costs • Narratives should support and reference the budgeted items.
  7. 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 positions, salaries, and wages • Number and classification of positions • Percent of time allocated to the grant project • Reasonableness of compensation • Each job position funded with the grant must be listed in the approved application
  8. 8. Amendments • Certain budgetary changes require TEA’s prior approval via the amendment process • Refer to specific instructions in the RFA (Part 3: Schedule Instructions) and on the amendment schedule (Part 4: Schedule 3 – Purpose of Amendment) • An amendment is effective on the day it is received by TEA in substantially approvable form • The last date to submit an amendment is usually 90 days prior to ending date of grant
  9. 9. Provisions and Assurances • General Provisions and Assurances (Schedule #6A) – included with every grant application from TEA • Debarment and Suspension (Schedule #6B) – included with every federally funded application • Lobbying Certification (Schedule #6C) – included with every federal application in which the applicant can request greater than $100,000 • Disclosure of Lobbying (Schedule #6D)- included with every federal application in which the applicant can request greater than $100,000 • NCLB Provisions and Assurances (Schedule #6E) – included with every application funded by NCLB federal funds • Program-Specific Provisions and Assurances (Schedule #6F) – included if the program requires additional provisions or assurances such as supplement-not-supplant, data collection, survey participation, attendance at events, and other programmatic requirements
  10. 10. Common Audit Findings Inadequate Accounting Records No Source Documentation Inadequate Internal Controls Supplanting Unallowable Costs
  11. 11. OMB Circular A-122 and Federal Cost Principles
  12. 12. Premises of Federal Cost Principles The application of the cost principles is based on the premises that: • Organizations are responsible for the efficient and effective administration of Federal awards through the application of sound management practices • internal controls • written policies and procedures • separation of duties • checks and balances • effective and appropriate decision-making • appropriate authority levels approving purchases and expenditures • Organizations assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award • Each organization, in recognition of its own unique combination of staff, facilities, and experience, will have the primary responsibility for employing whatever form of organization and management techniques may be necessary to assure proper and efficient administration of Federal awards
  13. 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 administration 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 regulations. • Follow the most restrictive rules • Conform to any limitations or exclusions set forth in these principles, Federal laws, terms and conditions of the Federal award, or other governing regulations as to types or amounts of cost items.
  14. 14. Guidelines of Federal Cost Principles • Be consistent with policies, regulations, and procedures that apply uniformly to both Federal awards and other activities of the organization. • 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 accounting 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 regulation. • Be adequately documented.
  15. 15. Allowable and Unallowable Costs • Specific allowable and unallowable costs are often described in the Request for Application (RFA) materials • Part 2: Program Guidelines • Part 3: Schedule Instructions • 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 section of the TEA Grant Opportunities page at: http://www.tea.state.tx.us/index4.aspx?id=8339&menu_id=951
  16. 16. Allowable Payroll Costs • OMB Circular A-122, Attachment B, section 8 addresses “Compensation for Personal Services” • Payroll costs are allowable to the extent that: • compensation is reasonable for the services rendered and conforms to the established policy of the organization consistently applied to federal and non-federal activities • salaries and wages are supported by time and effort reports • Compensation is considered reasonable to the extent that: • it is consistent with that paid for similar work for non-grant funded employees (when organization is predominantly engaged in non-federal activities) • it is comparable to that paid for similar work in the labor markets (when organization is predominately engaged in federal activities)
  17. 17. Obligations “Obligations mean the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period” (34 CFR 74.2 and 80.3) • When an obligation occurs depends on the type of transaction: • Real or personal property: the date of a binding written commitment to acquire the property • Services by an employee: when the services are performed • Services by a contractor: the date of a binding written commitment to obtain services • Utility services: when the services are received • Travel: when the travel is taken • Rental (or leasing) of property: when the property is used • An “obligation” is the encumbrance of funds and must occur between the beginning and ending dates of the grant • Once an encumbrance is paid, the obligation becomes a “cost”
  18. 18. Liquidation of Obligations • Grantees must pay all of their bills or the expenditure must be in their “accounts payable” by the time 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 time to benefit the current grant period. Grantees cannot stockpile for future grant periods.
  19. 19. Reasonable and Necessary All costs must be reasonable and necessary to carry out the grant project • Reasonable • What the current market will bear for comparable goods and services • In accordance with prudent business practice • Necessary • Necessary to carry out the objectives of the grant project
  20. 20. Determining Reasonableness Consideration shall be given to: • Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the organization or the performance of the award. • The restraints or requirements imposed by such factors as: sound business practices, arms-length bargaining; Federal, State and other laws and regulations; and terms and conditions of the Federal award. • No significant deviations from the established practices of the organization which may unjustifiably increase the Federal award’s cost.
  21. 21. What Does “Necessary” Mean? • A cost is necessary when it is vital or required in order to meet the objectives of the grant or for the grant to be successful. • It is not “nice to have”.
  22. 22. What are Allocable Costs? • A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to the cost objective in accordance with relative benefits received. • Cost objective: a function, grant, contract, or other activity for which cost data are needed and for which costs are incurred • it is possible for some costs to benefit more than one objective or program • a cost benefitting more than one program must be shared or prorated by those programs • A cost allocable to a particular Federal award or cost objective may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by law or terms of the Federal awards, or for any other reasons.
  23. 23. Direct Costs Typical direct costs chargeable to federal grants are: • Salaries and benefits for employees who devote time to one or more specific grant programs • Professional and contracted services for a specific grant program • Materials purchased for a specific grant program • Equipment purchased for use in a specific grant program • Travel costs and other operating costs directly attributed to a specific grant program
  24. 24. Indirect Costs Organizations must have an approved indirect cost rate from their cognizant agency in order to charge indirect costs to state or federal grants. • Costs that are incurred for common or joint purposes • Costs that benefit multiple cost objectives thus supporting more than one federal award, state project, or activity • Costs that cannot be specifically identified with a particular grant program without effort disproportionate to the benefits received • Accounting • Budget • Human Resources • Purchasing • Building Maintenance, etc.
  25. 25. Accounting for Funds
  26. 26. Origin of Financial Management Requirements • 34 CFR Part 74 – Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Nonprofit Organizations (OMB Circular A-110) • Codified in Title 2 CFR Part 215
  27. 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. 28. Financial Management Systems • Records that adequately identify the funding source and application (i.e., use) of funds for federally funded grant programs • Records shall contain information for each grant you receive pertaining to: • Awards • Authorizations • Obligations • Unobligated balances • Assets • Outlays (i.e., expenditures) • Income (i.e., revenues) • Interest (on debt)
  29. 29. Financial Management Systems • Effective 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. 30. Financial Management Systems • Written procedures to minimize the time 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. 31. Financial Management Systems • Written procedures for determining the reasonableness, allocability, and allowability of costs in accordance with the provisions of the federal cost principles and the terms and conditions of the award • Accounting records supported by original source documentation
  32. 32. Source Documentation • Payroll records, including charges to payroll supported by time and effort records and copies of payroll checks • Contracts • Purchase orders • Itemized Invoices • Itemized Receipts • Copies of checks • Travel vouchers with appropriate travel receipts
  33. 33. Use of Organization Credit Cards • Grantees are advised to use caution in using organization credit cards • A grantee may use any medium to transact business during the course of implementing a grant program. However, some business practices are better than others because they facilitate the implementation of internal controls that mitigate 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 transaction charged to the account(s).
  34. 34. Use of Organization Credit Cards • Grantees should maintain the original, internal accounting records that identify the business purpose and the general ledger account code classification of each transaction : • 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 identifies the goods purchased or services rendered • clearly identifies the business or individual the grantee transacted with • identifies the date of the transaction
  35. 35. Use of Organization Credit Cards • The classification of costs by specific funding source and expense type and the maintenance of adequate source documentation is necessary for reporting 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 accounting principles. • It is also a requirement of the Internal Revenue Code applicable to all business entities.
  36. 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 commodities or items fabricated under the grant • License fees and royalties
  37. 37. Time and Effort
  38. 38. Time and Effort Reporting and Charges to Payroll • OMB Circular A-122, Attachment B, Section 8. “Compensation for Personal Services,” Subsection m. “Support of Salaries and Wages” • All charges to payroll for grant-funded staff must be based on distribution of activity reports (i.e., time and effort reports). This includes professionals (exempt) and nonprofessionals (nonexempt) whose compensation is charged, in whole or in part, directly to awards. • Therefore, all personnel, whether 100% funded or partially funded from the grant, must maintain time and effort records for 100% of the time (unless the organization has a substitute system approved in writing by the cognizant agency).
  39. 39. Nonprofessional (non-exempt) Employees • Charges for salaries and wages of nonprofessional employees must also be supported by records indicating the total number of hours worked each day maintained in conformance with the Department of Labor regulations implementing the Fair Labor Standards Act (FLSA). For this purpose, the term “nonprofessional employee” shall have the same meaning as “nonexempt employee” under FLSA.
  40. 40. Components of a Time and Effort Report • Daily records: • The activity (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 descriptions NOTE: If a grantee does not have adequate time and effort records then either TEA or an independent auditor (CPA) may disallow payroll costs charged to the grant program.
  41. 41. Equipment
  42. 42. Equipment and Furniture • All capitalized equipment and furniture must be approved in your grant application • Capitalized Equipment means: • Tangible nonexpendable personal property having a useful life of more than one year and • an acquisition cost which equals or exceeds $5,000 or more per unit, or • which meets the capitalization level of the organization for financial statement purposes, whichever is less (34 CFR 74.2 and OMB Circular A-122, Attachment B, section 15) • Title to equipment belongs to the grantee • TEA reserves the right to transfer equipment due to noncompliance or after the grant ends, regardless of how it is classified
  43. 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 continues 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. 44. Property Management Records 34 CFR 74.34(f) • Equipment records shall be maintained accurately and shall include: • Description of the equipment • Serial number, model number or other identification number • Funding source of the equipment, including the award number • Acquisition date and cost, including the unit acquisition cost • Percent federal participation • Location and condition of the equipment and the date reported • Ultimate disposition of the equipment
  45. 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 theft of the equipment. • Implement procedures to adequately maintain the equipment to keep it in good condition. • 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 competition to the extent practicable and result in highest possible return.
  46. 46. Disposition of Equipment 34 CFR 74.34(g) When no longer needed for original project or another federally funded project: • Grantee shall request disposition instructions 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 obligations 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 title to another grantee for noncompliance or as needed after the project ends (regardless of how equipment is classified)
  47. 47. Supplement, Not Supplant Supplement – to add to; to enhance; to expand; to increase; to extend; to create something new VS Supplant – to take the place of; to replace with something else
  48. 48. Ensuring Supplement, Not Supplant • The applicant assures in their applications for federal funds that they are using funds to supplement, not supplant. • In discretionary applications, applicants must describe how funds and activities are supplementary to current or previously funded activities. • Penalties for supplanting are oftentimes very severe. All federal funds involved in a supplanting situation would most likely have to be returned to the federal government.
  49. 49. Am I Supplanting? Ask yourself this question: • If I didn’t have federal funds available to conduct this activity/service, would I still conduct it with other funds anyway? • If the answer to the question is yes, you are supplanting because it is no longer a supplementary activity. You must be able to demonstrate that you could not conduct the activity if it weren’t for these federal funds. • The test to determine whether supplanting 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. 50. Supplement, Not Supplant Diminished Budgets • A grantee can demonstrate that it is supplementing where there is acceptable documentation 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.
  51. 51. Audit Requirements for Non-Profits
  52. 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 organizations 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 organization
  53. 53. Single Audit Requirements • A single audit encompasses a grantee’s financial statements and schedule of expenditures of federal awards for the entire organization. • A program-specific audit focuses on one particular program and may be selected by the auditee if they expend federal awards under only one federal program and the federal program’s laws, regulations, 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)
  54. 54. Your Responsibilities Under OMB Circular A-133, Auditees (i.e., YOUR ORGANIZATION) shall: • Identify, in your accounts, all Federal awards received and expended and the federal programs under which they were received. • Maintain internal control over federal programs that provides reasonable assurance that you are managing federal awards in compliance with laws, regulations, and provisions. • Comply with laws, regulations, and provisions of grant agreements. • Prepare appropriate financial statements, including the schedule of expenditures of federal awards. • Ensure audits are properly performed and submitted when due. • Follow up and take corrective action on audit findings, including preparation of a summary schedule of prior audit findings and a corrective action plan.
  55. 55. Audit Report Submission • Audit must be completed and the data collection form and reporting package submitted with 30 days after receipt of the independent auditor’s report, or 9 months after the end of the audit period, whichever is earlier. • Data Collection Form (completed by the auditor) - states the audit was completed in accordance with A-133 and provides information about your organization, your federal programs, and the results of the audit
  56. 56. Audit Report Submission • You must submit a copy of the Data Collection Form and the reporting package to the Federal Clearinghouse designated by OMB • http://harvester.census.gov/sac/ • Click on “Search the Single Audit Database”
  57. 57. TEA’s Responsibilities TEA’s Division of Financial Audits: • Ensure subrecipients expending $500,000 or more in federal awards during the past fiscal year have met the audit requirements • Issue a management decision on audit findings within 6 months after receipt of the audit report and ensure that the grantee takes appropriate and timely corrective action
  58. 58. Contract Administration System
  59. 59. Contract Administration System • Maintain system for contract administration to ensure: • contractor is conforming to terms and conditions of award and specifications • adequate and timely follow up of all purchases • evaluation of contractor performance and documentation of performance • contract defines a sound and complete agreement
  60. 60. Contract Provisions • Contractual provisions in contracts more than $25,000 that allow for: • administrative, contractual, or legal remedies in the event the contractor violates or breaches the contract terms, and the remedies • termination (for cause or for convenience) by the grantee, including the manner for termination and basis for settlement • termination for default or for circumstances beyond the control of the contractor
  61. 61. Monitoring and Reporting • Grantees must: • manage and monitor each project • monitor any subawards or subcontracts • report to TEA as required (both fiscal and programmatic reports) • retain all original records for 5 years from the ending date of the award • provide timely 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.
  62. 62. Matching and Cost Share
  63. 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 permitted 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. 64. Determining Value of In-Kind Contributions • Grantee in-kind contributions • Third-party in-kind contributions • Services and property donated by others • Volunteer services • Services provided by employees from other organizations • Donated supplies • Donated equipment, buildings, or land
  65. 65. Grantee In-Kind Contributions • Equipment owned by grantee – 6 2/3% of original acquisition cost • Use of building space owned by grantee – 2% of original acquisition cost plus capital improvements (for the square footage used)
  66. 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 organization or in the labor market • May include reasonable, allowable, and allocable fringe benefits
  67. 67. Third Party Other Employees • Employees of other organizations (“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. 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 time of donation
  69. 69. Thank you!

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