1. Seminar on Financial Management Office of Justice Programs Office of the Chief Financial Officer

2. Welcome & Introductions

3. Introduction 1. Name 2. Jurisdiction represented 3. Years in grants 4. Types of grants

4. Eric H. Holder, Jr. Office Of Justice Programs Community Oriented Policing Services Office on Violence Against Women

5. Office of Justice Programs

6. Office of the Chief Financial Officer

7. AUTHORIZATION APPROPRIATION APPORTIONMENT Federal Budget Process Defines the programs, policies, and the intent of Congress. The actual dollars Congress has provided to agency or department. A proportional division of funds made by Office of Management and Budget (OMB).

8. Authorization by the head of the agency (OJP) to incur obligations (make awards) An order placed, contract awarded and/or service received Funds spent by grant recipients Payments made by Treasury to liquidate obligations Federal Budget Process

9.  All recipients are required to: Establish/maintain auditable accounting records; Accurately account for funds awarded; and Funds for each award must be accounted for separately from other grants and other funding sources.  Records shall include Federal, matching, and program income. Financial Management Systems

11.  States and locals shall expend/account for grant funds per Federal or State laws & procedures for their funds. (whichever are more restrictive) Financial Management Systems

12. Accounting and Internal Controls: –Proper stewardship of Federal resources is an essential responsibility of the grantee organization. –Grantees must ensure that Federal programs and resources are used efficiently and effectively to achieve desired objectives. Financial Management Systems

13. Internal Controls and Segregation of Duties:  Strong internal controls ensure effective and efficient operations, reliable financial reporting, and compliance with applicable laws and regulations.  Proper segregation of duties is a critical element of adequate internal control. Financial Management Systems

14. Adequate Accounting System: –Grantee must maintain an adequate system of accounting and internal controls and ensure that an adequate system exists for each of its subrecipients. Financial Management Systems

15. Adequate Accounting System: –Presents and classifies costs, as required for budgetary and evaluation purposes. –Provides cost and property control to ensure optimal use of funds. –Controls funds/resources to assure conformance with general or special conditions. Financial Management Systems

16. Adequate Accounting System: –Meets requirements for periodic reporting. –Provides financial data for planning, control, measurement, and evaluation of direct and indirect costs. Financial Management Systems

18. In summary, a Financial Management System must be able to record and report on the: Receipt Obligation, and Expenditures of grant funds. Financial Management Systems

19. 1)Authorizing Legislation - Congress 2) Federal Agency Regulation - Code of Federal Regulation (CFR) 3) Terms and Conditions of the Award - Grant Award Document 4) Federal Agency Policies - OJP Financial Guide ORDER OF PRECEDENCE

20. The Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government. Code of Federal Regulations

21. Department of Justice 28 CFR 66 - Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments 28 CFR 70 - Uniform Administrative Requirements for Grants and Agreements (including subawards) with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations Code of Federal Regulations

22. OMB Administrative Requirements: 2 CFR, Part 215 OMB A-110 Replaced by Uniform Administrative Requirements also known as “common rule” Cost Principles: 2 CFR, Part 220 (OMB A-21) 2 CFR, Part 225 (OMB A-87) 2 CFR, Part 230 (OMB A-122) Audit Requirements: OMB A-133 OMB A-102 28 CFR 70 28 CFR 66 Included as reference in CFR DOJ APPLIES TO Non-Profit Organizations State & Local Units of Government Educational Institutions Non-Profit Organizations State & Local Units of Government Educational Institutions Non-Profit Organizations State & Local Units of Government

23.  COMMON RULES Committee of Federal agency representatives "Uniform" requirements Signed by Federal agencies Limited exceptions granted by OMB Government-wide Common Rules

24. 1. 28 CFR 66 “Uniform Administrative Requirements for Grants & Cooperative Agreements with State & Local Governments” Applicable to: State & Local Units of Government Government-wide Common Rules

25.  Who is covered? Direct recipients and subrecipients.  Exemption from certification: Direct recipients of a statutory entitlement (BJA, OVC, OJJDP formula awards). Subcontractors receiving $100k or less.  Excluded Parties List System: http://www.sam.gov/ 2. Suspension & Debarment (S & D) Government-wide Common Rules

26.  Who is covered? Direct recipients and subrecipients who are state agencies.  Exemptions: Subrecipients other than state agencies. 3. Drug-Free Workplace (DFW): Government-wide Common Rules

27.  Who is covered? Direct recipients and subrecipients.  Note: Any violation of this prohibition is subject to a minimum $10,000 fine for each occurrence. 4. LOBBYING Government-wide Common Rules

28. Applicable to:  State & Local Units of Government  Non-Profit Organizations  Indian Tribes and Tribal Organizations  Commercial Entities  Individuals (direct or indirect) LOBBYING RESTRICTIONS Government-wide Common Rules

29. CODE of FEDERAL REGULATIONS (2 CFR/Part – 220/225/230) also known as OMB Circular A-21/87/122 Cost Principles for Educational Institutions, State, Local, and Indian Tribal Governments, and Non-Profit Organizations

30. Requires That A Cost Be: –Allowable –Necessary to the performance of a project –Reasonable –Allocable to the project and consistently treated MAJOR PROVISIONS Code of Federal Regulations

31. Requires That A Cost Be: (continued) –Non-profitable –Claimed against only one award, and –Permissible under State & Federal laws and regulations MAJOR PROVISIONS Code of Federal Regulations

32. CLASSIFICATION OF COSTS MAJOR PROVISIONS Code of Federal Regulations

33. DIRECT COSTS, generally include:  Costs identified specifically with an activity  Salaries and Wages (including holidays, sick leave, etc.) for direct labor employees  Other employee fringe benefits allocable to direct labor employees CLASSIFICATION OF COSTS

34. DIRECT COSTS, generally include:  Consultant services contracted to accomplish specific project objectives  Travel of direct labor employees  Material/supplies purchased directly for use on a specific project CLASSIFICATION OF COSTS

36. Indirect cost generally are cost not readily identifiable with a particular grant or contract such as:  Maintenance of buildings  Telephone expense  Supplies  Depreciation  Rental expense CLASSIFICATION OF COSTS

37. INDIRECT COSTS RATES:  Provisional indirect costs rates adjusted to actual (retroactive adjustment)  Predetermined rates (not normally subject to adjustment)  Fixed rates (with roll or carry forward adjusted in future period)  Implements cognizant Federal agency concept CLASSIFICATION OF COSTS

38. COFAR / Super Circular:  Any non-Federal entity that has never received a negotiated indirect cost rate may elect to charge a de minims rate of 10% of modified total direct costs (MTDC).  Rate may be used indefinitely or until entity elects to negotiate for a rate.  Costs must be consistently charged as either indirect or direct – (not both).  Once elected must be used consistently for all Federal awards. CLASSIFICATION OF COSTS

40. The regulation DOES NOT:  Supersede limitation imposed by law  Dictate extent of Federal funds  Provide additional Federal funds for indirect costs MAJOR PROVISIONS Code of Federal Regulations

41. ) The regulation DOES NOT: (continued) MAJOR PROVISIONS  Dictate how a government should use funds  Relieve State & local governments of stewardship responsibilities for Federal funds Code of Federal Regulations

42. SELECTED ITEMS OF COST Code of Federal Regulations

43.  Accounting  Advertising  Alcoholic Beverage  Audit Services  Bad debts  Contingencies Selected Items of Cost Code of Federal Regulations

44.  Contributions & Donations  Entertainment  Fines/Penalties  Fund Raising  Rental Costs  Under Recovery of Cost under Federal Grants Selected Items of Cost Code of Federal Regulations

45.  To deliberately reduce State or local funds because of the existence of Federal funds.  Example: State funds are appropriated for a stated purpose and Federal funds are awarded for that same purpose. The State replaces its State funds with Federal funds, thereby reducing the total amount available for the stated purpose. SUPPLANTING

46. MATCH CASH versus IN-KIND

47. To calculate match: Award Amount = Adjusted % of Federal share Project Cost Adjusted x Recipient’s = Required Project Cost Share Match ======================================= Ex: Federal Amount = $80,000 80/20 Match $80,000 = $100,000 Adjusted Project Cost 80% MATCH $100,000 X 20% = $20,000 Required match

48. General Guidance  State and locals have their own regulations.  If State or local procedures offer more efficient protection for the Federal Dollar use them -- IF NOT, USE THE FEDERAL.  Documentation. Very important! Contract files must establish an audit trail. Documentation should be sufficient enough to stand on its own. Procurement Procedures

49.  Both the Common Rule A-102 and OMB Circular 2 CFR Part 215 require competition ON CONTRACT AWARDS.  Bidders' lists should be continually updated.  Newspaper/other advertising of contract requirement -- very important. General Guidance re Competition Procurement Procedures

50.  Local preference laws relative to contract award -- discouraged by Federal agencies.  Local preference should only be used when a wider distribution is not possible. General Guidance re Competition Procurement Procedures

51.  Federal awarding agency's approval of sole source is required for procurements over 150k.  Use when: The item or service is available only from a single source. A true public exigency or emergency exists. After competitive solicitation, competition is considered inadequate. A for-profit entity not eligible to be a direct recipient may not be awarded a sole source contract. Sole Source Contract Procurement Procedures

52. Paragraph Content 1 Brief description of program and what product or service is being contracted for. 2Explanation of why it is necessary to contract non-competitively, to include: -- Expertise of contractor -- Management -- Knowledge of the program -- Responsiveness -- Expertise of personnel Sample Outline SOLE SOURCE JUSTIFICATION

53. Paragraph Content 3 When contractual coverage is required and what impact on the program, if dates are not met. How long it would take another contractor to reach the same level of competence (equate in $$). 4Uniqueness. Sample Outline SOLE SOURCE JUSTIFICATION

54. Paragraph Content 5 Other points that should be covered to "sell the case." 6 A declaration that this action is in the "best interest” of the grantor agency and/or the Federal government. Time constraints will not be considered a factor if the grantee has not sought competitive bids in a timely manner thereby creating a time constraint situation. Note: Sample Outline SOLE SOURCE JUSTIFICATION

55. Contracting Do’s 1)Compete 2)Prepare IFB/RFP 3)Maintain bidders list 4)Conduct interviews 5)Obtain prior approval 6)Make documentation available

56. Contracting Don’ts 1)Place unreasonable requirements 2)Require unnecessary experience 3)Engage in noncompetitive pricing 4)Engage in organizational conflicts of interest 5)Require unreasonable timeframes

57. Frequently Asked Questions Electronic List of Parties: http://www.sam.gov/ Federal Service Desk: 1-866-606-8220 Lists of Parties Excluded from Federal Procurement or Non-procurement Programs

58. PRE-AWARD EXERCISE FINANCIAL MANAGEMENT SEMINAR

59. Application Review  Data Universal Numbering System (DUNS)  Toll-free DUNS number request line: 1-888-814-1435  https://eupdate.dnb.com/requestoptions.asp  System for Award Management (SAM)  Federal Service Desk (8 am – 8 pm Eastern Time) 1-866-606-8220  http://www.sam.gov FINANCIAL MANAGEMENT SEMINAR

60. Type of applicant Financial Capability Questionnaire (Non-profits) Grantee Audits Applicant Federal Debt Accuracy of Taxpayer ID  Financial Integrity FINANCIAL MANAGEMENT SEMINAR Application Review

61.  High Risk Grantees Have a history of unsatisfactory performance Are not financially stable Have a management system which does not meet the management standards set forth in 28 C.F.R., Section 66.20 (Standards of Financial Management Systems) FINANCIAL MANAGEMENT SEMINAR

62.  High Risk Grantees Have not conformed to the terms and conditions of previous awards Have open Single Audit or Office of Inspector General (OIG) audit report recommendations Have significant non-compliance issues Are otherwise not responsible (e.g., open site visit, requests for information from DOJ program manager, etc.) FINANCIAL MANAGEMENT SEMINAR

63. FRINGE BENEFITS PERSONNEL INDIRECT OTHER CONTRACTUAL SUPPLIES EQUIPMENT TRAVEL BUDGET Budget Categories