1. Presented at the National Association of HBCU Title III Administration, Inc. 2015 Technical Assistance Workshop June 24, 2015 Presenters: Perry L. Herrington, Executive Director of Title III Programs, Clark Atlanta University Tori Willis, Director of Title III, Sponsored Programs, and Strategic Initiatives, Arkansas Baptist College 1

2. EDGAR Program “Legislation” OMB Circulars / Super Circulars Application CDP/Plan University Policies

3. 3 Ø Ties federal funding to results Ø Greater accountability Government Performance and Results Act  GPRA indicators reflected in objectives and activities

4. All federal agencies must... Prepare: ◦ Strategic Plans: Major long-term goals and objectives ◦ Performance Plans: Annual program strategies and targets ◦ Performance Reports: Annual performance and accountability reports Make program information available to the public 4

5. 5  Subchapter A - General Provisions  Subchapter B - Pre- award Requirements  Subchapter C - Federal Award Notice  Subchapter E - Post Federal award Requirements  Subchapter F - Cost Principles  Subchapter G - Audit Requirements  Subchapter H - Appendices

6. 6 ED requires prior approval for the following: ◦ Change in scope or objectives, ◦ Change in Budget (usually 10%), ◦ Change in key personnel, ◦ Absence of Project Director/PI for more than three months or a 25% reduction of time to the project. EDGAR §74.25

7. 7 o Higher Education Act (HEOA) of 1965; as amended in 2008 o ‘‘(d) MINIMUM ALLOTMENT.—Notwithstanding subsections (a) through (c), and subject to subsection (h), if the amount of an award under this section for a part B institution, based on the data provided by the part B institution and the formula under subsections (a) through (c), would be; (1) an amount that is greater than $250,000 but less than $500,000 o CFR-2012-title34–vol3-part 608 o (b) Unallowable activities. A grantee may not carry out the following activities under this part: (1) Activities that are not included in the grantee’s approved application; (2) Activities described in paragraph (a)(12) of this section that are not approved by the Secretary. o CFR-2012-title34–vol3-part 609 o (d) A description of how the grant funds will be used so that they will supplement, and to the extent practical, increase the funds that would otherwise be made available for the activities to be carried out under the grant and in no case supplant those funds, for the activities described in § 609.10(a)(1) through § 609.10(a)(14).

8. 8 A Comprehensive Development Plan (CDP) must describe an institution’s strategy for achieving growth and self sufficiency by strengthening its - (1) Financial management; (2) Academic programs; and (b) The comprehensive development plan must include the following:  (1) An assessment of the strengths and weaknesses of the institution’s financial management and academic programs.  (2) A delineation of the institution’s goals for its financial management and academic programs, based on the outcomes of the assessment described in paragraph (b)(1) of this section.  (3) A listing of measurable objectives designed to assist the institution to reach each goal with accompanying timeframes for achieving the objectives.  (4) A description of methods, processes and procedures that will be used by the college or university to institutionalize financial management and academic program practices and improvements developed under the proposed funded activities. - CFR: part 609  Activity budgets The Annual Plan is submitted via the Phase II process during the final four years.

10.  Compliance is LAW  Accountability is holding people responsible for following the LAW 10

11.  Day-to-day; adhere to program objectives, laws, regulations, and guidance  Do the specific things that the funded program should be doing per OMB Circulars, the program regulations, and the terms of the grant award (including the grant application)  Properly execute responsibilities  Properly account for federal funds  Only use funds for intended purposes  Adequately document program activities and use of funds  Perform internal audits 11

12.  All Costs Must Be: ◦ Allowable ◦ Allocable ◦ Necessary and Reasonable  Conform with federal law & Grant terms  Consistently treated  In accordance with GAAP (Generally Accepted Accounting Principles)  Adequately documented 12

13.  Permitted or not specifically prohibited  The OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; ◦ 2 CFR Chapter I, Chapter II, Part 200 13

14.  Reference: Guide to the OMB Uniform Guidance-200.Subchapter F, 605 ◦ To be allowable under Federal awards, costs must meet the following general criteria:  (a) Be reasonable for the performance of the award and be allocable thereto under these principles.  (d) Be accorded consistent treatment.  (g) Be adequately documented. ◦.621 Selected Items of Cost ( C-1 through C-54) 14

15.  Only use funds for intended purposes  Charge expenses only according to the approved plan  Can only charge in proportion to the value received by the program  Cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with institutional funds. ◦ Ask: “What would have happened in the absence of federal funds? 15

16.  Reference: Guide to the OMB Uniform Guidance-200.Subchapter F, 607 ◦ (a) A cost is allocable to a particular Federal award if the goods or services involved are chargeable or assignable to that award in accordance with relative benefits received. ◦ (c) Any cost allocable to a particular Federal award under the principles provided for in this guidance may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by law or terms of the Federal awards, or for other reasons. However, this prohibition would not preclude non-Federal entities from shifting costs that are allowable under two or more awards in accordance with existing program agreements, Federal legislation, or regulation. 16

17.  Must be necessary for the performance or administration of the grant  Must follow sound business practice:  Arms length bargaining (procurement processes)  Follow federal laws  Follow terms of the grant award  Fair market prices  Act with prudence under the circumstances  No significant deviation from established prices 17

18.  Reference: Guide to the OMB Uniform Guidance-200.Subchapter F, 606 ◦ A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. In determining reasonableness of a given cost, consideration shall be given to:  (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award.  (e) Significant deviations from the established practices and policies of the non- Federal entity regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost. 18

19.  DON’T PANIC  DON’T BE COMBATIVE OR UN-COOPERATIVE  GET TO THE BOTTOM OF THINGS  DO YOUR RESEARCH  USE YOUR ANNUAL PLAN / LAW / PROGRAM SPECIALIST AS THE BASES FOR DENIAL 19

20. Conform with federal law & grant terms ◦ Example: Match Requirement (Not allowed in HBCU Program) Consistently treated ◦ Must follow uniform policies that apply equally to federal and university activities 20

21.  Recipients responsible for proper recordkeeping  Recipients responsible for proper retention  Recordkeeping should be sufficient to establish an audit trail  When in doubt, keep it! 21

22.  Adequately documented ◦ Amount of funds under grant ◦ How the funds are used ◦ Total cost of the project ◦ Share of costs provided by other sources ◦ Records that show compliance ◦ Records that show performance ◦ Other records to facilitate an effective audit 22

23.  Cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with institutional funds.  Always ask: “What would have happened in the absence of federal funds?”  Be careful how Carry-forward funds are used: ◦ Substantial progress does not equal large carry-forward balances in accounts. ◦ Carry-forward balances do not document substantial progress. 23

25. 25  As stated in approved package  Key personnel changes need ED approval  Staff made aware of project’s : purpose, duration, objectives Lines of Authority

26. 26 ¯ Project’s success and financial accountability ¯ Submit annual & final performance reports  Valid & reliable data 4 Report on GPRA standards & indicators EDGAR §§ 74.51 & 80.40

27. 27  Funded application & Grant awards  Previous audits / site visit reports  Annual performance reports  Project revision(s) documentation  Current budget & personnel list On Site :

28.  General Ledger (A direct path to accountability)  Current information for each category  Grant Accountant should reconcile the general ledger (GL) monthly with the PI’s project ledger  Grant Accountant or Contracts and Grants Office should provide the PI with monthly print-out from the GL from the grantee’s integrated software  Limit the number of budget modifications  Stop spending at least 30 days before the end of the grant period to close out the year. 28

29. 29 Incurred up to 90 days before budget period begins  No prior approval required  Applies to New and NCC awards

30. 30  Reasonable expectation of receiving a grant  Incurred at own risk  Funds not available until the budget period begins  Not for cost over-runs

31. 31 : Incurred more than 90 days before budget period begins : Requires prior approval OK

32. 32  Unexpended funds “forwarded” without prior approval  For any allowable cost within the approved scope  Complete unfinished activities  New activities w/i scope – Program Staff

33. 33 Program Office may require a written statement:  How will unexpended funds be used?  When: At time of funding decision  New funds can be reduced Large Available Balance? Written statement required!

34. 34 ≫ No prior approval required for most ≫ Exceptions listed in EDGAR: ◈ Transfer training funds ◈ Transfer / contracting-out work Check OMB Cost Principles for other exceptions

35. 35 Final Year: h One-time extension up to one year without prior approval h Grantees should carefully consider time extension needs

36. 36 Send written notice to Program Officer:  No later than 10 days before project ends  State reasons for extension  Include revised expiration date

37. 37 ∴ Not just for using unexpended funds ∵ No additional Federal funds ∴ No change to scope or objectives

38.  Pre-expiration letter – 60 days  Requirements reminder  Financial obligation during liquidation  Submit req’d reports  Final Performance  Financial Status – ED 524B  Fail to adhere… Grant Closed in “Non-Compliance” EDGAR § 74.71 § 80.20

40. 40  Request funds for immediate needs  Minimize time between requests & expenditures  Draws commensurate with approved scope ED’s Concerns  Large amounts of unobligated funds  Excessive / Infrequent requests  Project goals not met - ED monitors

41. 41 Why: 3 Identify performance issues 3 Identify financial issues Tracks spending patterns for each grant G5 System Work in partnership to resolve

42. 42 Must return excess cash & interest to government GAPS Monitoring Report: Excessive Drawdowns By end of budget period’s: 1st Quarter:More than 50% drawn 2nd Quarter: More than 80% drawn 3rd Quarter: 100% drawn

43. 43 GAPS Monitoring Report: Large Available Balance  Within 90 days, “flags” grants with 70% or more  Verifies financial data on annual performance report  Discrepancies clarified before award

45. 45  Non-Federal audit if expending $500,000 or more annually in Federal awards  Mail to Federal Audit Clearinghouse  Review Attachment C OMB Circular A - 133

46.  Poor recordkeeping / management  Unallowable costs / activities  Failure to follow standards  Lack of internal controls  Failure to obtain prior approval  Incorrect / no indirect cost rate

47.  Single Audits (A-133)  OIG Audits  Program Monitoring: ◦ G5 irregularities (frequent draws and adjustments) ◦ Consistent large Carry-forwards balances  Disclosure/Reporting SYMTOMS  Whistle – Blowers  U.S. Department of Education Enforcement tools: ◦ GEPA ◦ EDGAR ◦ Program-specific enforcement provisions 47

48.  History of unsatisfactory performance  Not financially stable  Management system does not meet standards  Has not conformed to terms of previous awards  Is otherwise not responsible – may be placed on special conditions or restrictions 48

49. 49  Serious implication  Special terms/conditions added  Unsuccessful implementing project  More tech assistance  Notified by correspondence

50.  Special conditions may include: ◦ Payment on reimbursement basis ◦ Withholding authority to proceed until acceptable performance is shown ◦ Requiring more detailed financial reports ◦ Additional project monitoring ◦ Requiring additional technical or managerial assistance ◦ Establishing additional prior approvals ◦ Suspension/Termination 50