1. Grant Financial Management U.S. Department of Commerce Officer of the Inspector General 1

2. 2 How to Prepare for an Audit Public Safety Interoperable Communications Grants National Telecommunications and Information Administration John Bunting, JD CPA CFE Regional Inspector General for Audits Denver Regional Office of Audits Office of Inspector General U.S. Department of Commerce

3. 2007 PSIC Amendments Department of Commerce Inspector General Requirements :  Report annually on the management of the NTIA PSIC program to Congress, and  Conduct financial audits, over four years, of a representative sample of not fewer than 25 States or territories receiving NTIA PSIC grant awards. September 24, 2007 NTIA PSIC Workshop 3

4. Matching Share Regulations  Digital Television Transition and Public Safety Act of 2005, Section 3006  Uniform Administrative Requirements 15 Code of Federal Regulations (CFR) Part 24,  Department of Commerce Standard Terms and Conditions September 24, 2007 NTIA PSIC Workshop 4

5.  Statute requires that non-Federal sources be used to provide not less than 20 percent of the cost of acquiring and deploying the interoperable communications systems.  Statute does not require a non-Federal match for interoperable communications for training, and planning and coordination. NTIA PSIC Grant Match Requirements September 24, 2007 NTIA PSIC Workshop 5

6. Uniform Administrative Requirements  Allowable costs incurred by grantee or subgrantee.  The value of third party in-kind contributions applicable to the period to which the cost sharing or matching requirements apply.  The same costs or contributions can only be used as match for one federal financial assistance award. September 24, 2007 NTIA PSIC Workshop 6

7. 7 Commerce Standard Terms and Conditions  The non-Federal share, whether cash or in-kind, is expected to be paid out at the same general rate as the Federal share.  If actual allowable costs are less than the total approved budget, the approved Federal and non-Federal cost share ratio are applied to the actual allowable cost.  If the actual allowable costs are greater, the Federal share cannot exceed the total Federal amount of the award. September 24, 2007 NTIA PSIC Workshop 7

8. Audit Issues With Matching Share  Documentation  Valuation  Pass Through Provisions to Subgrantees  Monitoring of Subgrantees September 24, 2007 NTIA PSIC Workshop 8

9. Best Practices for Preparing for an Audit  Notify your Chief Financial Officer, State Auditor, Certified Public Accountant, and other financial professional maintaining your accounting records.  Discuss available options for non-Federal cash and in-kind match with your financial professionals before submitting your investment justification.  Identify who is going to approve payment for project costs and prepare your financial status reports.  Designate an audit liaison for your state. September 24, 2007 NTIA PSIC Workshop 9

10. 10  Allowable Costs: necessary, consistent treatment, not used as match for any other Federal award.  Reasonable Costs: ordinary and necessary, market prices, prudent person, established practices.  Allocable Costs: relative benefits received, all activities share cost, cost allocation plan. Cost Principles OMB Circular No. A-87 Three Basic Guidelines

11.  43 Cost Categories from Advertising Costs to Travel Costs  Apply to direct and indirect costs: Federal and non-Federal (cash or in-kind)  Pass Through to subgrantees Cost Principles: OMB Circular No. A-87, Attachment B September 24, 2007 NTIA PSIC Workshop 11

12. 12 Best Practices for Accounting for Grant Costs  Costs, Federal and non-Federal, are verifiable from accounting and financial records.  Costs, Federal and non-Federal, are clearly identified using project cost accounting.  Costs are within the approved budget.  Costs, Federal and non-Federal, are not used for other Federal awards or non-Federal purposes.

13. Best Practices for Procurement of Interoperable Communications Equipment  Brief your Contract or Procurement Department about your planned purchase of interoperable communications equipment and the need for competitive procurement.  Get quotes from vendors of interoperable communications equipment before submitting your proposal.  Consider a single statewide or regional procurement. September 24, 2007 NTIA PSIC Workshop 13

14. Office of Management and Budget Circulars  A-87 Cost Principles for State, Local, and Indian Tribal Governments,  A-102 Grants and Cooperative Agreements with State and Local Governments (codified at 15 CFR Part 24),  A-133 Audits of States, Local Governments, and Nonprofit Organizations. www.whitehouse.gov/omb/circulars/index.html September 24, 2007 NTIA PSIC Workshop 14