presented at the national association of hbcu title iii administration, inc. 2014 technical...
TRANSCRIPT
Presented at the National Association of HBCU Title III Administration, Inc.2014 Technical Assistance Workshop
June 24, 2014
Presenter: Perry L. HerringtonDirector of Title III & Strategic
InitiativesClark Atlanta University
1
Day-to-day; adhere to program objectives, laws, regulations, and guidance
Do the specific things that the funded program should be doing per OMB Circulars, the program regulations, and the terms of the grant award (including the grant application)
Properly execute responsibilities Properly account for federal funds Only use funds for intended purposes Adequately document program activities and
use of funds Perform internal audits
2
EDGAR
Program “Legislation”
OMB Circulars
Application CDP/Plan
University Policies
5
Ties federal funding to results Greater accountability
Government Performance and Results Act
GPRA indicators reflected in objectives and activities
6
o A-21 – J.: General provisions for selected items of cost
o .20 Fund raising and investment costs. a. Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions, are unallowable.
A-110 – Subpart A - Generalo .28 Period of availability of funds Where a funding period is specified, a
recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency.
A-133 – Subpart B - Audits◦ (a) Audit required. Non-Federal entities that expend $300,000($500,000 for
fiscal years ending after December 31, 2003) or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Guidance on determining Federal awards expended is provided in §___.205.
oOMB Circulars A-21, 110, and 133
7
ED requires prior approval for the following:
◦ Change in scope or objectives,
◦ Change in Budget (usually 10%),
◦ Change in key personnel,
◦ Absence of Project Director/PI for more than three months or a 25% reduction of time to the project.
EDGAR §74.25
8
o Higher Education Act (HEOA) of 1965; as amended in 2008
o ‘‘(d) MINIMUM ALLOTMENT.—Notwithstanding subsections (a) through (c), and subject to subsection (h), if the amount of an award under this section for a part B institution, based on the data provided by the part B institution and the formula under subsections (a) through (c), would be; (1) an amount that is greater than $250,000 but less than $500,000
o CFR-2012-title34–vol3-part 608o (b) Unallowable activities. A grantee may not carry out the following
activities under this part: (1) Activities that are not included in the grantee’s approved application; (2) Activities described in paragraph (a)(12) of this section that are not approved by the Secretary.
o CFR-2012-title34–vol3-part 609o (d) A description of how the grant funds will be used so that they will
supplement, and to the extent practical, increase the funds that would otherwise be made available for the activities to be carried out under the grant and in no case supplant those funds, for the activities described in
§ 609.10(a)(1) through § 609.10(a)(14).
9
A Comprehensive Development Plan (CDP) must describe an institution’s strategy for achieving growth and self sufficiency by strengthening its - (1) Financial management; (2) Academic programs; and (b) The comprehensive development plan must include the following: (1) An assessment of the strengths and weaknesses of the institution’s financial management and academic programs.(2) A delineation of the institution’s goals for its financial management and academic programs, based on the outcomes of the assessment described in paragraph (b)(1) of this section. (3) A listing of measurable objectives designed to assist the institution to reach each goal with accompanying timeframes for achieving the objectives.(4) A description of methods, processes and procedures that will be used by the college or university to institutionalize financial management and academic program practices and improvements developed under the proposed funded activities. - CFR: part 609Activity budgetsThe Annual Plan is submitted via the Phase II process during the final four years.
11
Request funds for immediate needs
Minimize time between requests & expenditures
Draws commensurate with approved scope
ED’s Concerns Large amounts of unobligated funds
Excessive / Infrequent requests
Project goals not met - ED monitors
12
Why: Identify performance issues Identify financial issues
Tracks spending patterns for each grant
G5 System
Work in partnership to
Work in partnership to
resolveresolveWork in partnership to
Work in partnership to
resolveresolve
13
Must return excess cash& interest to government
GAPS Monitoring Report:Excessive Drawdowns
0102030405060708090
100
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
By end of budget period’s:
1st Quarter: More than 50% drawn
2nd Quarter: More than 80% drawn
3rd Quarter: 100% drawn
14
GAPS Monitoring Report:Large Available Balance
Within 90 days, “flags” grants with 70% or more Verifies financial data on
annual performance report Discrepancies clarified before award
16
Non-Federal audit if expending $500,000 or more annually in Federal awards
Mail to Federal Audit Clearinghouse
Review Attachment C
OMB Circular A - 133
Poor recordkeeping / management
Unallowable costs / activities
Failure to follow standards
Lack of internal controls
Failure to obtain prior approval
Incorrect / no indirect cost rate
Single Audits (A-133) OIG Audits Program Monitoring:
◦ G5 irregularities (frequent draws and adjustments)◦ Consistent large Carry-forwards balances
Disclosure/Reporting SYMTOMS Whistle – Blowers U.S. Department of Education Enforcement tools:
◦ GEPA◦ EDGAR◦ Program-specific enforcement provisions
18
History of unsatisfactory performance Not financially stable Management system does not meet
standards Has not conformed to terms of previous
awards Is otherwise not responsible – may be
placed on special conditions or restrictions
19
20
Serious implication
Special terms/conditions added
Unsuccessful implementing project
More tech assistance
Notified by correspondence
Special conditions may include:◦ Payment on reimbursement basis◦ Withholding authority to proceed until
acceptable performance is shown◦ Requiring more detailed financial reports◦ Additional project monitoring◦ Requiring additional technical or managerial
assistance◦ Establishing additional prior approvals◦ Suspension/Termination
21
23
As stated in approved package
Key personnel changes need ED approval
Staff made aware of project’s :purpose, duration, objectives
Lines of Authority
24
Project’s success and financial accountability
Submit annual & final performance reports
Valid & reliable data
Report on GPRA standards & indicators
EDGAR
§§74.51 & 80.40
25
Funded application & Grant awards
Previous audits / site visit reports
Annual performance reports
Project revision(s) documentation
Current budget & personnel list
On Site:
26
Allowable - permitted or not specifically prohibited
Allocable - necessary for project’s success
Reasonable - costs incurred by a “prudent” person
Must be:
Budget Items
28
Increase flexibility
Increase accountability
Reduce paperwork burden
Develop partnerships
GOALS:
Promote successful project outcomes
Promote successful project outcomes
29
Incurred up to 90 days before budget period
begins
No prior approval required
Applies to New and NCC awards
30
Reasonable expectation of receiving a
grant Incurred at own risk
Funds not available until the budget period begins
Not for cost over-runs
31
Incurred more than 90 days before budget period begins::
Requires prior approval
OKOK
32
Unexpended funds “forwarded” without prior approval
For any allowable cost within the approved scope
Complete unfinished activities
New activities w/i scope – Program Staff
33
Program Office may require a written statement:
How will unexpended funds be used?
When: At time of funding decision
New funds can be reduced
Large Available Balance?Written statement required!
34
≫ No prior approval required for most
≫ Exceptions listed in EDGAR:
◈ Transfer training funds
◈ Transfer / contracting-out work
Check OMB Cost Principles for other exceptions
35
Changes in project scope / objectives
Changes in key personnel
IHE & non-profit project directors> absent for more than 3 months> 25% reduction in time
Need for additional Federal funds
36
Final Year: One-time extension up to
one year without prior approval
Grantees should carefully consider time extension needs
37
Send written notice to Program Officer:
No later than 10 days before project ends
State reasons for extension
Include revised expiration date
38
∴ Not just for using unexpended funds
∵ No additional Federal funds
∴ No change to scope or objectives
Pre-expiration letter – 60 daysRequirements reminderFinancial obligation during liquidation
Submit req’d reportsFinal PerformanceFinancial Status – ED 524B
Fail to adhere…
Grant Closed in“Non-Compliance”
EDGAR§
74.71 §
80.20
Recipients responsible for proper recordkeeping
Recipients responsible for proper retention Recordkeeping should be sufficient to
establish an audit trail When in doubt, keep it!
40
Necessary and Reasonable◦ Must be necessary for the performance or administration
of the grant◦ Follow federal laws and the terms of the grant award◦ Fair market prices◦ Act with prudence under the circumstances◦ No significant deviation from established prices
Allowable - permitted or not specifically prohibited
Allocable◦ Charge expenses only according to the approved plan◦ Can only charge in proportion to the value received by
the program
41
Conform with federal law & grant terms◦Example: Match Requirement (Not allowed in HBCU Program)
Consistently treated◦Must follow uniform policies that apply equally to federal and university activities
42
Adequately documented◦Amount of funds under grant◦How the funds are used◦Total cost of the project◦Share of costs provided by other sources◦Records that show compliance◦Records that show performance◦Other records to facilitate an effective
audit
43
Cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with institutional funds.
Always ask: “What would have happened in the absence of federal funds?”
Be careful how Carry-forward funds are used:◦Substantial progress does not equal large
carry-forward balances in accounts.◦Carry-forward balances do not document
substantial progress.
44
Executing Title III Procedures
45
Institutions must use fiscal control and fund accounting procedures that will ensure the proper disbursement of, and accounting for, federal funds.
Seven Requirements include:1. Financial Reporting2. Accounting Records3. Internal Controls4. Budget Control5. Allowable Cost6. Source Documentation7. Cash Management
46
General Ledger (A direct path to accountability)
Current information for each category Grant Accountant should reconcile the general
ledger (GL) monthly with the PI’s project ledger Grant Accountant or Contracts and Grants
Office should provide the PI with monthly print-out from the GL from the grantee’s integrated software
Limit the number of budget modifications Stop spending at least 30 days before the end
of the grant period to close out the year.
47
Common Problems/Pitfalls
48
Poor recordkeeping / management
Unallowable costs / activities
Failure to follow standards (policies and procedures
Lack of internal controls
Failure to obtain prior approval
Incorrect / no indirect cost rate
49
Payroll distribution system (time and attendance records inadequate)
Supplanting/maintenance of effort (using grant funds when institutional funds should have been used)
Services delivered to those other than the intended recipients
50
No written policies and procedures Lack of controls over computer systems and
computer equipment Inadequate financial management systems
(do not clearly show how grant funds used or how the use of funds ties to the budget)
51
Failure to maintain supporting documentation
Use of funds for unallowable purposes Charging obligations from prior year to
current funding period
52
54
Project ledger Current information for each
category Reconcile ledger w/ business office How often? By whom?
Federal and Non-Federal
portion
55
Personnel Travel Equipment Supplies Consultants Other
Include:
Federal and Non-Federal portion
“Cost-Share”
56
Maintained for grant’s staff Reflects total activity Signed by staff & supervisor Prepared monthly (w/i pay period) Cost sharing/matching salaries/wages
supported
Time & Attendance Certification
See: OMB Circular A-21 / -87 / -122
Personnel: Internal Controls
57
Justify purpose
Identify travelers
Destination / travel dates
Number & cost of trips
58
Approval required?
Who approves?
Advances provided?
How are costs reconciled?
59
Definitions consistent with institution’spolicy
Provide per unit cost Maintain control Lease or buy?
60
Initiates?
Approves?
Receives?
Authorizes payment?
Who:
61
Written procurement procedures
Cost and price analysis
Procurement records
Contracts administration
Grantees must put emphasis on programmatic activities and reduce personnel costs. Title III funding is based on programmatic issues, and is not a funding source for personnel
Time & Attendance Certification Maintained for grant’s staff Reflects total activity Signed by staff & supervisor Prepared monthly (w/i pay period) Cost sharing/matching salaries/wages
supported
62
What to look for:
Justify purpose
Identify travelers
Destination / travel dates
Number & cost of trips
Demonstrate institutional impact with tangible outcomes
63
Definitions consistent with institution’s policy
Provide per unit cost Maintain control Lease or buy?
64