eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR 31 st National Indian and Native American Employment and Training Conference eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Financial Management Session II Presenter: Stacey M. Jones Wednesday, April 28, 2010

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Learning Objectives DOL Requirements Allowable Costs Direct -vs- Indirect Cost Financial Reporting Emphasis on Accrual Reporting

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR DOL Requirements DOL adapted OMB Circular A -102 under 29 CFR Part 97 States follow their own policies and procedures as long as they are consistent with federal requirements DOL adapted OMB Circular A-110 under 29 CFR Part 95 DOL continues to apply the requirements of 29 CFR Parts 95 and 97 until 2 CFR part 215 becomes final. Handout

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR All Financial Systems Must adhere to 7 separate standards 1. Financial reporting System must permit preparation of Federal financial reports Must report accruals 2. Accounting records Adequately identify grant funds Awards, obligations, assets, liabilities, income and expenditures Supported by source documentation Must be maintained in accordance with GAAP

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Financial Standards 3. Internal controls System to protect integrity of funds Accountability for cash, property & other assets 4. Budget controls Comparison of actual expenditures (outlays) to approved budget plan Compliance with line item requirements Prevents overspending

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR More Financial Standards 5. Allowable costs Only allowable costs charged Only allocable costs charged 6. Source documentation Costs must trace to authorizing document Proof that costs are allowable & allocable 7. Cash management System to control cash assets

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR The Four Main Cost Principles OMB A-21 (2 CFR 220) Educational Institutions OMB A-87 (2 CFR 225) State/Local Governments and Indian Tribes OMB A-122 (2 CFR 230) Non-profit Organizations 48 CFR 31 Contract Cost Principles and Procedures dealing with Commercial Organizations

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Federal Cost Principles Purpose – provides that the Federal government bears its fair share of costs except where restricted or prohibited by law Reasonable & Necessary “Prudent Person Rule” Allocable Clearly benefit program Both direct & indirect costs

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Selected Items of Cost 3 types of Costs Allowable Unallowable Allowable with Conditions If Cost not Treated- Principles of necessary and reasonable apply

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Allowable Cost Participant Support Costs GED Course Costs Staff Salary Costs Counselor Costs Training materials Job Search Assistance

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Allowable with Conditions Examples Personal services Advertising/Public Relations Equipment (with prior approval) Prior Approval Needed BEFORE incurring cost May exist in grant agreement

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Unallowable Costs Costs of other grant programs Interest, fines & penalties Contingency reserves Donations and contributions Real property purchase/construction Exception: Compliance with ADA Requirements

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Direct Costs Direct costs: any costs that can be directly identified with a specific grant project/program. Direct costs can be either administrative or program costs

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Indirect Costs Indirect Costs: any costs shared between multiple programs for which a definitive amount can not be directly attributed to a specific grant. Indirect Cost Rate or Cost Allocation Plan May be both Administrative & Program costs

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Direct and Indirect Costs Direct costs – Information/Data Collection System costs for a specific grant: Administrative: all costs directly related to financial recording and reporting Program: all costs directly related to performance tracking and reporting Indirect costs – Equipment maintenance and operational costs for an office working with multiple programs Administrative: general office copiers and printers Program: motor vehicles used for transporting participants.

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Financial Reporting

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Financial Reports ETA 9130 Electronic reporting system Use of passwords and pins Quarterly reports Cumulative from beginning of project Accrual basis Due 45 days after quarter end

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Why is Accrual Reporting Important? Required for ALL ETA programs Provides more reliable data Cash basis understates true spending Failure to report on accrual basis may result in loss of funds

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR What does Accrual Reporting Mean? Transactions are recognized in accounting period in which they occur Revenue is recognized when received or earned Expense is recognized when incurred May be cash disbursement May be delivery of goods/services

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Types of Accrued Costs Salaries of employees Training Travel expenses Rental costs

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Salaries of Employees Obligation When salaries are earned Including related items Retirement fund contributions, etc. Accrued expenditure At the time the salaries are earned When the services are rendered Simultaneous recording

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Training Contracts Single Semester Contract to obligate funds and pay on an “as training received” basis School Year Contract to obligate funds for school/program year and pay each semester/quarter cost as training received

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Travel Expenses Obligation Travel actually performed Ticket purchased Not issuance of travel authorization Accrued expenditure Travel actually performed Ticket purchased Simultaneous recording

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Rental Costs Obligations Lease agreement signed Amount = maximum payment for termination Not entire lease amount Accrued Expenditure As service is provided Space is occupied Maybe paid in advance

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR What are NOT Accruals? Obligations for which goods or services have NOT been received Orders placed for which goods or services have NOT been received or paid Performance contracts in which benchmarks have NOT been achieved

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR DELIVERED ORDERS - UNPAID DELIVERED ORDERS - PAIDOBLIGATIONS UNLIQUIDATED OBLIGATIONS ACCRUED EXPENDITURES UNDELIVERED ORDERS -UNPAID Obligations = Unliquidated Obligations + Accrued Expenditures

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR The ETA 9130 Handout

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Federal Cash 10.a. Cash Receipts Tied to PMS drawdowns PMS draw amount appears above 10a 10.b. Cash Disbursements checks, cash, advances to subs 10.c. Cash on Hand 10.a. minus 10.b.

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Federal Expenditures and Unobligated Balance 10.d. Total Federal Funds Authorized Grant award Pre-entered for most ETA grants for first reporting quarter 10.e. Federal Share of Expenditures ACCRUED expenditure

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Federal Expenditures and Unobligated Balance 10.f. Total Administrative Expenditures That portion of 10.e.(expenditures) attributable to administrative costs Follow appropriate guidance on administrative vs. program costs

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Administrative Cost Limitations 20% as specified in grant agreement Line item 10.f. identifies administrative portion of total federal expenditures Provides ability to assess compliance with administrative limitation

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Federal Expenditures and Unobligated Balance 10.g. Federal Unliquidated Obligations -10.h.(Obligations) minus 10.e. (Expenditures) 10.h.Total Federal Obligations -10.e.(Expend.) plus10.g.(Unliquid. Oblig.) 10.i. Unobligated Balance of Federal funds - 10d.(Authorized) minus 10.h.(Obligations)

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Recipient Share - Match 10.j. Total Recipient Share Required No Match Requirement 10.k. Recipient Share of Expenditures Non-DOL/non-Federal expenditures incurred for purposes of subject grant Leveraged resources

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Leveraged Resources All resources used by grantee to support allowable grant activity Reported on ETA 9130 Examples: Activities paid by other Federal funds Training classes provided by community college Substance abuse counseling by local faith-based organization Education grants provided by state college Handout

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Recipient Share 10.l. Recipient Share of Unliquidated Obligations 10.m.(obligatiions) minus 10.k (expenditures) 10.m. Total Recipient Obligations 10.k.(expend.) plus 10.l.(unliquid. oblig.) 10.n. Remaining Recipient Share to Be Provided 10.j.(required) minus 10.m.(obligated)

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Program Income Reporting 10.o. Total Fed. Program Income Earned Production of curriculum Sale of products to non-Federal organizations 10.p. Program Income Expended 10.q. Unexpended Program Income

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Program Income Accountability NET – Line 10.o. reflects total PI earned minus costs incident to generating it No cost reported on line 10.e. GROSS – Line 10.o. reflects 100% of PI earned Costs incident to generating it were charged to the grant on line 10.e.

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR What’s Included? What’s Not Included? This IS Program Income: Fees for services User or rental fees Sale of products List included in Part 97 This IN NOT Program Income: Applicable credits Income from OJT participant Donations Income earned after the grant period Program Income Definition and Examples: 20 CFR (b-c) and 29 CFR and 95.25

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Additional Expenditure Data Required 11.a. Other Federal Funds Expended Examples: Other DOL Grant Funds Dept of Ed Funds HUD

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Additional Expenditure Data Required 11.b. Employment Services Expenditures Portion of total expenditures reported on line 10.e. 11.c. Training Services Expenditures Portion of total expenditures reported on line 10.e. 11.d. Other Program Services Expenditures Line 10.e. minus Administrative Expenditures (10.f.) and related assistance Expenditures (11.b.) and (11.c.)

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Financial Reporting Contacts Initial Contact – Federal Project Officer On-Line Reporting System - Password and PIN -Shantay Logan – -Avery Malone –

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Additional Resources Financial Management Training Tutorial Workforce 3 One Website ( Tutorial Titles: Introduction to Financial Reporting (ETA -9130) Cash Management Cost Allocation, Cost Pooling & Time Distribution Indirect Costs and Applying for an Indirect Cost Rate for Non-Profits Cost Classification Cost Principles Handout

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Questions??

eta EMPLOYMENT AND TRAINING ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR Financial Reporting Exercise