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2. Building Blocks to Successful Management of Title III Funds Part I Managing Title III Funds 2

3. Building Blocks to Successful Management of Title III Funds Foundational Block Understand the purpose of funds proposed Supplement vs. Supplant How Title III funds integrate with College funds Building Block I Communication! Key relationships between the Business Office and Title III Administrators Building Block II Fiscal Compliance Understand terms and conditions of the grant Record Keeping, Time and Effort reporting, etc. Davis Bacon Act EDGAR, Title 34 CFR parts 74-86 and 97-99 3

4. Building the Foundation It is imperative that Title III Administrators: ALWAYS align expenditures with the purpose of the proposed programming NEVER use Title III funds to supplant, ONLY supplement Supplement –to add to; to enhance; to expand; to increase; to extend; to create something new Supplant –to take the place of; to replace by something else Understanding Purpose 4

5. Building the Foundation When designing Title III programming, Title III Administrators must consider: Existing programming currently supported by institutional funds Proposed budgets should not include funding for programming currently supported by institutional funding. This is considered supplanting. The exception to this rule is if there is diminished budgeting, where the institution can substantiate that reductions in institutional funding available will lead to the elimination of necessary programming Understanding Purpose 5

6. Building the Foundation When designing Title III programming, Title III Administrators must consider: Impact of new programming to institutional budget and operations, such as (but not limited to): Are new positions proposed that will require the College to absorb the costs of new personnel in the future? Is existing space available for any new activities, new equipment, etc proposed for funding? If new equipment is requested, can existing facilities support the equipment? (i.e. electrical, etc.) Understanding Purpose 6

7. Building on the Foundation Block I……Communication Title III management is a partnership between Activity Directors, Title III Program Administrato r(Director), and the Business Office Title III management is a partnership between Activity Directors, Title III Program Administrato r(Director), and the Business Office Cooperative Activities Quarterly reconciliations 7

8. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance is the shared responsibility of Activity Directors, Title III Administrator s and the Business Office. 8

9. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance begins with knowledge of terms and regulations applicable to Title III grants OMB Circulars A-21 (http://www.whitehouse.gov/omb/circulars_a021_200 4http://www.whitehouse.gov/omb/circulars_a021_200 4 OMB Circular A-110 (http://www.whitehouse.gov/omb/circulars_a110)http://www.whitehouse.gov/omb/circulars_a110 EDGAR, Title 34 CFR parts 74-86 and 97-99 (http://www2.ed.gov/policy/fund/reg/edgarReg/edgar. html)http://www2.ed.gov/policy/fund/reg/edgarReg/edgar. html 9

10. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights Document…Document…Document! Substantiation for all expenditures should be available at any and all times(i.e. purchase requisitions, contracts, bids, quotes, receipts, invoices, time-sheets, payroll registers, etc) and should be required prior to approval of expenditures Typically the Business Office maintains copies of documentation required from purchases which are processed. However, Title III Administrators are encouraged to maintain records with copies of documents as well. Title III Administrators should also maintain records of all requests and responses made to DOE for prior approval to initiate budget adjustments and/or any activity changes. 10

11. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) Budget Adjustments requiring prior approval should not be processed without approved documentation from DOE Record Keeping Grantees are obligated to retain all pertinent documentation for a period of three (3) years. Generally, the three-year period commences on the date of the final reimbursement (Ref: Federal Regulation 49 CFR Part 18.42(c)). Records include financial, procurement, administrative and project 11

12. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) In-kind Contributions non-cash, trackable donations provided by non-Federal third parties. These can be in the form of real property, equipment, supplies, services, and other expendable property. A value of donated services and/or donated goods must be assessed at fair market value Documentation required includes: The source of contribution, The donation (if time, time and effort sheet must be maintained) How the value was determined 12

13. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) Time and Effort Reporting Any employee funded with federal grants must document the time spent working on the grant’s objectives to demonstrate that the amount budgeted and claimed is accurate. (OMB Circular A-21, J.10)OMB Circular A-21, J.10 These effort reports must be performed on a regular schedule (minimally twice annually or once per semester for faculty)and must be certified by individuals who have first-hand knowledge of 100% of the employee's compensated activities. In most cases, that would be the employee or the employee's direct supervisor. A reconciliation process should be utilized to reconcile actual time and effort reported with proposed effort. 13

14. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) Time and Effort Reporting Significant differences between proposed and actual effort (25% or greater) requires approval from DOE These effort reports must be performed on a regular schedule (minimally twice annually or once per semester for faculty)and must be certified by individuals who have first-hand knowledge of 100 percent of the employee's compensated activities. In most cases, that would be the employee or the employee's direct supervisor. 14

15. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) Non-Salary Related Expenses Expenses must pass the tests of: Reasonableness Allowability Allocability Expenditures must fall within the grant period; Title III grantees are allowed automatic carryover of unexpended funds within the grant cycle, however, no cost extensions require DOE approval Foreign travel must be pre-approved by DOE Entertainment, Alcohol and F&A expenses are unallowable 15

16. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) Non-Salary Related Expenses Be aware of the difference between employee, contractor and consultant 16

17. Building on the Foundation Block II……Fiscal Compliance Fiscal Compliance Highlights (con’t) Davis Bacon Act Applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair Mandates that contractors (i.e. institutions) and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area Department of Labor determines applicable wage 17

18. Building on the Foundation Block III……On the Horizon Part II What’s on the Horizon 18

19. Building on the Foundation Block III……On the Horizon OMB Reform OMB has developed a series of reform ideas to standardize information collections across agencies, adopt a risk-based model for Single Audits, and provide new administrative approaches for determining and monitoring the allocation of Federal funds. Reform ideas include: Streamlining the universal compliance requirements in the Circular A-133 Compliance Supplement. Accomplished by emphasizing elements that address improper payments, waste, fraud, abuse, and program performance subset of compliance requirements would be targeted for increased testing 19

20. Building on the Foundation Block III……On the Horizon OMB Reform (con’t) To improve audit follow-up, the Federal Government would digitize Single Audit reports into a searchable database to support analysis of audit results by Federal agencies and pass-through entities. Indirect Costs use of flat rates as opposed to negotiated rates. Option 1: establish mandatory flat rate that is discounted from the recipient’s already negotiated rate Option 2: give recipient option of accepting flat rate or negotiating a rate 20

21. Building on the Foundation Block III……On the Horizon OMB Reform (con’t) Time and Effort Reporting Attempts made to identify risks associated with justifications for documenting salaries and wages New requirements may be less burdensome to grantee, by removing the requirement for first hand certification of reports and providing electronic options for reporting Charging directly allocable administrative support as a direct cost. Allowing for the budgeting for contingency funds for construction or upgrade of facility or equipment on certain awards. 21

22. Building on the Foundation Block III……On the Horizon OMB Reform These reforms are currently in the discussion phases and may or may not be implemented, however, it is interesting to consider how some of the aforementioned reforms may effect current institutional practices. The lesson…Stay informed and prepared. 22

23. Building on the Foundation Block III……On the Horizon Questions? 23