Financial Management 101 For SCSEP Program Administrators General overview of financial and administrative policies and procedures. State grantees….nothing new….refresher For SCSEP Program Administrators 2010 SCSEP Business Meeting November 18, 2010

How Feds View Themselves

How Grantees View Feds

The DOL Grantee Our Expectations of You: A program that is designed to focus on customer needs and to address those needs A program that meets the requirements of Federal law and regulation A program in compliance with SCSEP requirements, OMB Requirements and Generally Accepted Accounting Principles.

The NEW DOL Grantee What you can expect from us: Assistance with regulations & requirements On site technical assistance & monitoring Assistance with fiscal & programmatic issues

Why know this stuff? Financial requirements impact program design Need for financial information is critical to achieving program success Failure to comply may result in sanctions

It’s All Very Simple Written Policies and Sound Business Practices, Followed Consistently Over Time, With Each Funding Stream Treated Equally, With All Costs Being Necessary and Reasonable, Would be done similarly by a Prudent Person, Ensuring Proportionate Share and Benefits Received to take the same sort of care as an ordinary prudent person might take

Rules affecting programs Enabling legislation Uniform administrative requirements Grant management rules Cost principles Determination of allowable costs Program regulations Program activities Both allowable and unallowable Cost category restrictions Statement of Work Description of grant outcomes

The Pyramid of Grant Requirements Suspension Debarment Drug Free Workplace Lobbying Guidance Policy Manuals Davis Bacon Act Terms and Conditions Program Regulations OMB Circulars Program Statutes A&A Govt.-Wide Govt.-Wide Improved financial management is having accurate and timely financial information to manage costs and achieve efficiencies. Accurate and timely financial data is the foundation for financial reporting integrity. Financial management is how an organization uses its data (from financial reporting) to drive results. OFFM assists agencies in both building the financial reporting foundation and creating a framework to drive improvement and results. The Role of Standards Fulfills the government’s duty to be publicly accountable Assess the government’s accountability and its efficiency and effectiveness Contribute to the understanding of the allocation and various uses of Federal resources Provides users of financial reports with understandable, relevant, and reliable information Facilitates government-wide comparison Fosters the improvement of accounting systems and effective internal controls Agency & Programs

Cost principles Set of government wide rules Cost principles Now codified at 2 CFR Cost principles Define conditions for charging costs Types of Allowable costs Allowable Unallowable Allowable with conditions

Uniform Administrative Requirements Governments (State, Local, Indian Tribal) A-110 Non-profit organizations Institutions of Higher Education Hospitals Commercial organizations

Required? Incorporated by reference Uniform Administrative Standards 29 CFR 97.22 29 CFR 95.27 SCSEP Regulations 20 CFR 641.800 Older Americans Act Title V

Items of Cost Travel Pre-Award costs Interest Allowable Reasonable and in support of grant activity Pre-Award costs Not allowable unless specifically authorized Interest Costs of borrowing Payments for equipment over time

SCSEP Requirements Legal expenses Real property Unallowable for prosecution of claims against the government Audit appeals Real property Unallowable Exception for ADA compliance

SCSEP Unallowable Activities Sectarian activities Union organizing activities Lobbying costs Building repair and acquisition Exceptions- Labor costs for following: Minor remodeling necessary for project purpose Minor repair/rehab for benefit of community

Allowable Cost Standards Necessary To achieve grant outcomes Reasonable Sound business practices Allocable Only charge costs that clearly BENEFIT grant Additional standards

Grant Management Requirements 29 CFR Part 95 Uniform Administrative Requirements Procurement Program Income Property Management Post-Award requirements

Cost Categories Only 2 Cost Categories Reporting categories Administration Program Activities Reporting categories Expenditures Program Income Match Other Federal funds Budget line items

Administrative Costs SCSEP Definition -- 20 CFR 641.856 & 859 Not related to direct services Either to clients or employers List of specific functions Unlike traditional definitions Limitation is 13.5% (in grant agreement) Measured at conclusion of grant period

Indirect Costs Costs through an approved Indirect Cost Rate or Cost Allocation Plan Included on the SF-424A Reported on the ETA 9130 May be both Administrative & Program costs SCSEP definition applies

PL 109-234 Applies to Limits salary and bonus payments to individuals All ETA appropriated funds All grants, contract and interagency agreements All funds available on June 15, 2006 Limits salary and bonus payments to individuals Implementation guidance in TEGL 5-06 2008 limit is $172,200

Who is covered? Individuals paid by ETA appropriated funds Direct recipients and all subrecipients Direct costs or through an Indirect Cost Rate Vendors are not subject to limitation

SCSEP Match Requirements At least 10% non-Federal funds No match for: §502(e) grants Disasters Distressed areas Grantees can’t use match as award condition Subgrantees & host agencies Ref: 20 CFR 641.809(e) Slide 3 – SCSEP Match Requirements At least 10 percent of SCSEP grant costs must be supported by non-Federal funds. Any source of resources is acceptable so long as it is non-Federal in origin and meets applicable allowable cost requirements. The matching share provisions of the DOL administrative requirements in Parts 95 and 97 of 29 CFR provide approved methodologies for valuing in-kind contributions – non-Federal resources other than those provided by the grantee or subgrantee. Past practice in the SCSEP program has been for much of the match to be provided by host agencies in the form of supervisory time and related space costs. DOL has the option of awarding Sec. 502(e) grants without the otherwise applicable match requirement. DOL’s regulations at 20 CFR 641.809(e) prohibit grantees from requiring their subgrantees and/or host agencies to supply matching resources as a condition of making an award of grant funds or community service slots to them.

Match (Non-Federal Share) All contributions must be: Spent on allowable activities In accordance with cost principles Can’t be BOTH match & allowable cost No administrative cost limitation A grantee or subrecipient must decide whether to charge costs against the Federal share of costs or as match. The same item can’t be charged as match and as allowable Federal costs.

Leveraged Resources Allowable match Non-match In excess of match requirement Non-Federal funds used for grant purposes Reported on the ETA 9130 Non-match Funds available for the project that don’t meet criteria for allowable match Reported on the performance report Federal funds also reported on ETA 9130

Examples Federal funds expended by other organizations WIA ITAs CDBG grants Foundation grants expended by subgrantees

Reports ETA 9130 Electronic reporting system Quarterly reports Use of passwords and pins Quarterly reports Cumulative from beginning of project Accrual basis Due 45 days after quarter end

Financial Reports Keep in mind— Accrual basis of reporting Administrative costs Breakout on line 10.f Leveraged resources Non-Federal resources expended Lines 10.k-m Federal resources expended Line 11.a

SCSEP Fund Availability I year grants May request extension Justification required Unexpended funds recaptured EFFECTIVELY MANAGE YOUR $$$

Questions?