Federal Financial Management Requirements An overview

Standards  Necessary and reasonable Sound business practices Prudent person principle  Allocable Only charge costs that clearly BENEFIT grant Proper allocation methods  Authorized or not prohibited Federal, State, or local laws

More Standards  Consistent treatment Across all programs Year to year Both indirect and direct  Not used for matching requirements Unless specifically authorized  Conform to ETA grant exclusions & limitations Specific unallowable costs Administrative cost limitation

And more…..  Adequately documented Traceable to source documentation Consistent with GAAP  Source documentation Evidence of authority to incur cost Demonstrate actual amount Receipts for goods Subcontractor invoices Time sheets for staff costs (payroll records)

Internal Controls  System to safeguard integrity of funds  Accounting system Timely recording of expenditures Qualified personnel Limited access to records  Separation of duties Dual signatures for checks Reconciliations by different staff Timesheets and payroll approvals

Budget Controls  Accounting records need to track to budget categories Linking spreadsheets or chart of accounts  Spending according to quarterly budget estimates  Spending within approved line items  Monitor costs and make adjustments  Indication of potential modification needs

Obligation  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 future period  Defined in 29 CFR Parts 97 & 95

Unliquidated Obligation  The amount of obligations incurred for which an expenditure has not been recorded. goods and services ordered but not received.)

Accrued Expenditure  Charges incurred by a grantee during a given period requiring a provision of funds for: (i) goods and tangible property received (ii) services performed by employees, subgrantees, subcontractors, etc. (iii) other amounts becoming owed for which no current services or performance is due

Outlays  Same as expenditure Cash payments  For reporting purposes Cash payments + accruals for goods and services received but not yet paid

Examples  Obligation Subcontract for training services Purchase order for equipment  Unliquidated Obligation Purchase order not yet filled  Accrued Expenditure Equipment received, but not invoiced or paid

Chart of Accounts  Numerical Listing or Codes  General Ledger/Books of Account  Identify Costs in Books of Account  Report Financial Results of Operations  Accumulate & Track Costs  Source of Funds  Program Activities or Cost Categories  Interim & Final Cost Objectives

Cost Classification  Process used to distribute costs  Assign allowable costs to cost objectives  Costs Assigned Direct Charge Allocation  General ledger or books of account

Classification System  Required by GAAP  Trace Costs from Federally required reports To books of account & To source documentation

Cost Classification Process

Cost Categories  Only 2 Cost Categories Administration Program Activities  Reporting categories Vary by grant Classify within books of account Classify through linking spreadsheets

Reporting Categories  Program Income Both earnings and expenditures  Non-federal costs {Sec. 185 (f)(2)} AKA “Stand-in” costs No match required for Earmark grants  Both must be traceable to books of account

Administrative Limits  Contained in Grant Agreement  Not to exceed 10% of grant award  Unless negotiated to max of 15%  Documentation Required  Subject to Grant Officer Approval Measured at conclusion of grant period

WIA Definition  20 CFR (a)  Not related to direct services Either to clients or employers  List of specific functions Unlike traditional definitions  Applies to all Title I programs Including Earmark grants

Administrative Functions  Overall general administrative functions Accounting, financial, cash management Procurement Property management Personnel management Payroll Coordinating resolution of findings  Audit, monitoring, investigations

Administrative Functions  General administrative functions Audit functions General legal services Developing systems and procedures  Includes information systems  Required for administrative functions  Monitoring of administrative functions

Administrative Costs  Goods & services Required for administrative functions  Travel costs Carry out administrative activities Related to overall management  Awards for administrative functions Payroll service for staff

Administrative Costs Information Technology  Costs of information systems Related to administrative functions  Accounting & payroll systems  Procurement & purchasing systems  Costs include Purchase, development & operation

Program Costs Information Technology  Tracking/monitoring participant & performance information  Employment statistics  Performance & cost information Eligible providers of training services Youth & education activities  If both program & admin---ALLOCATE

Indirect costs  Traditionally administrative costs  For WIA—may be administrative or program costs  Process to determine proportion for reporting Addressed in next workshop  Use of linking spreadsheet for reporting

Other Guidance  Job Title vs. Job Function Costs follow job function, NOT title Multiple functions must be allocated  Subrecipient level classification Use of contract proposals or invoicing Function of the award

Program Income  Additional revenues for the grant Earned as a result of grant activity Earned because of grant  29 CFR – Governmental Grantees  29 CFR – Non-governmental Grantees

More Program Income  Addition method required - WIA 20 CFR (a)(5)  Reported on SF 269  Expenditure within a grant period  ETA does not reduce grant awards Addition method always applies  Both revenues and expenditures identified in books of account

Uses of Program Income  No administrative cost limitation  Allowable activities  Allowable costs and proper classification  Included in the scope of audit  Other administrative rules apply  Sanctions for misuse

Financial Reports  SF-269 Standard for all Federal grants  Quarterly expenditure report  Due: 30 days after quarter end  Electronic reporting system

Where do I find the data for reports?  Accounting System Cash Basis Accrual Basis  Accrual worksheet(s)  Subgrantee reports

Subrecipient Reporting  Direct Grant recipient must establish reporting requirements Comply with Federal requirements May impose additional requirements Monitor subrecipient financial activity

Common Reporting Elements  Identifying information  Funding year & period covered by report  Total Federal Outlays (expenditures) Accrual basis Cumulative by each year of appropriation  Refunds, Rebates, etc. Any receipt that reduces Federal Outlays

Common Elements  Recipient share of net outlays for allowable program activities  Program income Addition method required Reported in Section 10, lines r-t  Indirect costs Reported in Section 11  Administrative costs identified in comments section (section 12)

Status of Funds Section  Federal Unliquidated Obligations  Total Federal Obligations  Net Federal Outlays  Total Federal Funds Authorized for this Funding Period  Unobligated Balance of Federal Funds

Web-based Reporting  Program-specific software with required data elements  Grantees provided: Passwords (data entry) PINs (data certification)  Embedded data entry instructions

Password & PIN Information  Individuals responsible for on-line reporting & report certification must be identified  Instructions contained in grant award transmittal letter

Steps in electronic reporting  Select Report Form  Select/Verify Grant Number  Select Reporting Quarter  Report Header Information

Report StatusDescription Not Submitted Indicates that the data has not been submitted for the quarter. Awaiting Grantee Certification Indicates that data has been entered and passed the edit checks. These edit checks occur from top to bottom on the form. Once the data is saved, the date is applied to the status. This date IS NOT the official submission date for the quarter. It is more of a temporary save. Grantee Certified Indicates that the Certifying Official has applied the PIN to the report. Once certification is successful, the certification date will be attached to that report. This is the official submission date for the report. At this point, the data becomes available for ETA Regional Office review and acceptance. Region Accepted Indicates that the ETA Regional Office has reviewed and “ Accepted ” the Grantee Certified report. Once the report has been accepted, the date is attached to the report. Report Status Types

Finalizing reports  2 Ways to Save the Report Enter PIN and submit Submit  Confirmation provided by system Certified Report Status Updated

Report Revisions  Grantee may revise until data “locked”  Select appropriate FY/PY & reporting quarter  Explain in comments section  Same process for review & acceptance by ETA

“Locking”  2 consecutive quarters “FPO Accepted” LOCKED from revisions  Data available Read-only  Example Quarter ending 9/30 is “FPO Accepted” Quarter ending 6/30 is “LOCKED”

Common Problems  Compliance with Edit Checks  Local internet provider difficulties  Difficult to access EIMS at peak times

QUESTIONS????