Managing Your Grant: Highs And Lows Lois Sunderland and Yolanda Mitchell 02/03/15

Grants Management Services GM Consulting Federal Cash Management Requirements Project Cash Requests (PCR) Final Expenditure Reports (FER) Federal Requirements (EDGAR) Business Rules and Helpful Tips

Grants Management Services Subrecipient Monitoring (SRM) The SRM vs Single Audits (A-133) Basics to Prepare for SRM Trending Statewide Issues/Findings Questions and Test your Knowledge

Grants and Requirements All grants, federal or state, have requirements to ensure the grant is used for its intended purpose. If determined to be noncompliant the funds would be required to be returned and future funding could be in jeopardy. Determination could be through an audit, monitoring or simple desk review.

The Highs The Lows In compliance Funds flowing Lower Monitoring Risk Increase in grant opportunities The Lows Higher risk of audit Risk of grant termination, suspension Withholding of funds or repayment Reimbursement Status

Federal Cash Management Requirements Immediate cash needs Expenses already incurred (i.e invoice in hand, payroll) Should not draw for outstanding encumbrances until they are ready to be paid

Project Cash Requests Ideally, submit monthly Actual cash basis expenditures – do not estimate

Project Cash Requests Advances for upcoming month Support Documentation (may attach summary report to PCR)

Federal Grant Requirements Substantially Approve Date (SAD) Period of Availability Substantially Approve Date determines the date that funds can be obligated Changes equal to more than 10% of the budgeted cell (This does not include unauthorized expenses)

Federal Grant Requirements Budget to revision (Do not obligate prior to revision) When an obligation is made?

Final Expenditure Reports Due via CCIP on or by Sept 30th (90 days after the project ending date) Must reflect actual expenditures No encumbrances 21st Century grant does not have a carryover provision

Definition of Obligation EDGAR 34 CFR 80.3 Obligations means 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… Per EDGAR 34 CFR 80.3 Obligations means 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…

When is an Obligation Made? If the obligation is for: If the obligation is made: Acquisition of real or personal property On the date the grantee makes a binding written commitment to acquire property. Personal services by an employee of the grantee When the services are performed. Travel When the travel is taken.

When is an Obligation Made? If the obligation is for: The obligation is made: Personal services by a contractor who is not an employee of the grantee On the date on which the grantee makes a binding written commitment to obtain the services. Public utility services When the grantee receives the services. Rental of real or personal property When the grantee uses the property.

Business Rules Only one advance per month, however unlimited requests for negative cash Grants Management starts approving PCRs around the 25st of the month for next month advances Grants Management may contact districts to verify amounts

Business Rules Budget revisions (Do not obligate prior to revision) Grants Management reviews FERs on a first-in, first-out basis Updated business rules coming in July 2016 resulting from Omni Circular

Grants Management Tips Communication is key to an efficient and effective grant process. Not just between the department and district District Internal groups (various offices within the district) District’s relationship with External groups District and their external auditor (AOS, IPA)

Grants Management Tips Periodic status updates: Internally: anything that may effect the grant programmatically or financially should be updated. If everything is on the table there will be no surprises during grant closeout. Assume Nothing! Ask Your grants management/program consultant or auditor.

Subrecipient Monitoring Sub-recipient Monitoring vs Single Audits (A-133) Subrecipient Monitoring - the process of providing oversight on subawards throughout their grant lifecycle including: Monitor and ensure goals are met Ensure compliance with laws and grant provisions Verify source documents and data accuracy

Subrecipient Monitoring Single Audit Act (A-133) A single audit is an organization-wide audit that includes both the entity's financial statements as well as its federal awards.

Subrecipient Monitoring Single Audit Act (A-133) The Office of Management and Budget Circular No. A-133, Audits of States, Local Governments and Non-Profit Organizations, requires entities that expend $500,000 or more a year in federal awards to have a single or program-specific audit conducted.

Subrecipient Monitoring New: The Combined Federal Circular raised the Single Audit Threshold from $500,000 to $750,000 for the 2016 grant period.

Basics to Prepare for SRM Proper Support Documentation (Invoices, Cancelled Checks, Time & Effort, Semi-Annual Certs, etc…) -34 CFR 80.20-(b) (1) & (2) Standards for Financial Management Systems. All records must be kept for 3-years – 34 CFR 80.42 (ii) (b)

Basics to Prepare for SRM Accounting to conform to a data coding structure (i.e. USAS-Uniform School Accounting System) – OAC 3301-19-03(A). AOS mandates that each entity must enter an expenditure with proper code classification 3-digit object code and 4 digit Function/Purpose

Basics to Prepare for SRM Proper use of Budget and Budget Revisions– 34 CFR 80.30 C(ii). GRANTEE MUST OBTAIN PRIOR APPROVAL IF ACTIVITIES ARE EXPECTED TO EXCEED 10% OF THE CURRENT TOTAL APPROVED BUDGET

Trending Statewide Issues 1) Lack of or incomplete Time & Effort forms/Semi-Annual Certifications. 2 CFR 225 Appendix B 8.g. (1-3) Where an employee work on multiple activities, A Fed award and a non-Fed award, 2 or more indirect activities = T & E Expected to work solely on a single Fed award=Semi Annual cert

Trending Statewide Issues 2) Activities Allowed or Unallowed 34 CFR 80.22 and/or Allocable Costs -2 CFR Part 225 Appendix A-Section c(3)(a) and C(1)(a-j) Costs that are: Reasonable, allocable, necessary, & compliant

Trending Statewide Issues 3) Obligations/Period of Availability (POA) and Liquidation of Funds 34 CFR 80.23 - Ensure expenses are obligated within the project period and all salaries and expenses and are paid prior to Sept. 30 (FER due date).

Trending Statewide Issues 4) Cash Management & Time Lapsed between payments. Monitoring cash drawdowns-34 CFR 80.20 (b)(7) and 80.21 (c )

Trending Statewide Issues 5) Budget Revisions – 34 CFR 80.30 (c) (ii)-Changes- A budget revision is required when program activities are expected to exceed 10 percent of the current total approved budgeted cell and must be approved by the department prior to OBLIGATING the funds.

Trending Statewide Issues 6) Adherence to the local district’s established inventory policy when coding supplies vs capital outlay (i.e. computers) 7) Expenses must be coded properly. Some entities may not be required to use specific coding but must still adhere to definitions outlined in the USAS manual.

Trending Statewide Issues 8) An Indirect Cost Rate (ICR) is optional, however a rate is required in order to pay severance or capture HR/Fiscal Department costs. Budget grid has a specific field for indirect cost.

Questions?

Test Your Knowledge My grant has a substantially approved date of Aug. 15. Can I charge my grant for time worked Aug. 1 through Aug. 10 if I issued payment on Aug. 16? Yes No

Test Your Knowledge On July 1, I have $10,000 approved in my supply budget. As of Oct. 30, I have obligated (placed orders) for supplies totaling $15,000 and issued payments totaling $10,000. I submit a budget revision on Nov. 15 to increase my supply line to $15,000 and issue the remaining $5,000 in payments on the same day. Is this acceptable? Yes No

Test Your Knowledge What does the substantially approved date determine? The date you can being to issue payments The date you can begin to enter into obligations Per federal guidelines, when are salaries obligated? On the date they are paid to the employee On the date they are worked by the employee

Test Your Knowledge The last day to obligate funds is June 30. The last day to issue payment is Sept. 30. I issued a purchase order on June 30 and ordered supplies on Aug. 15. The supplies were received Sept. 1 and payment was issued on Sept. 30. Is this an allowable expense? Yes No

Test Your Knowledge I drew down 10% of my allocation on July 1, how long do I have to liquidate these funds? No specific time because I’m allowed to have 10% cash on hand at any time. I must liquidate the funds immediately. If don’t have invoices and payroll to liquate the 10% immediately, I am required to request less than 10% when I submit my PCR.

Test Your Knowledge What is the current threshold for a Single Audit? What is the new threshold beginning in 2016? A) $750,000 and $500,000 B) $500,000 and $750,000 Is an invoice alone sufficient documentation to support an expense? A) Yes B) No

Test Your Knowledge Records must be retained for three years after the grantee makes final payment and all other pending matters are closed. A) True B) False Do you use a Time & Effort form when you work 100% of your time on 21st Century activities? A) Yes B) No

Contact Information Yolanda Mitchell, Grants Management Supervisor yolanda.mitchell@education.ohio.gov (614) 728-1568 Lois Sunderland, External Audit Supervisor lois.sunderland@education.ohio.gov (614) 387-7714 Office of Grants Management 25 South Front Street Mail Stop G03 Columbus, Ohio 43215-4183

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