FEDERAL GRANT MANAGEMENT
Federal Programs New Directors’ Workshop
March 11, 2013
WVDE Office of Federal Programs
Legal Structures for Federal Programs
• Statutes/Legislation
– Program Statutes (NCLB, IDEA, Perkins)
– General Education Provisions Act (GEPA)
• Regulations
– Program Regulations
– Education Department General Administrative
Regulations (EDGAR)
• Office of Management and Budget Circulars
• Guidance
– Non-Regulatory Guidance
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Grants Management Resources
• Program Guidance: www.ed.gov
– Statutes
– Regulations
– Guidance
• General Education Provisions Act (GEPA):
http://www.law.cornell.edu/uscode/20/usc_sup_01_20_10_31.
html
• Education Department General Administrative Regulations
(EDGAR):
http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html
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Grants Management Resources
• Office of Management & Budget (OMB) Circulars:
http://www.whitehouse.gov/omb/circulars
– Circular A-87 principles for allowable costs
– Circular A-122-cost principles for non-profit
organizations
– Circular A-133 Compliance Supplement-audit
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What Rules Apply to Utilizing Federal Funds?
State and local agencies must demonstrate
fiscal control and accounting procedures to
ensure the proper disbursement of and
accounting for federal funds.
– Section 76 of EDGAR – State Administered Programs
– Section 80 of EDGAR – Uniform Admin.
Requirements…State & Local Gov.
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Who or What is EDGAR?
Education Department General Administrative Regulations (EDGAR)
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Financial Management Requirements
All grantees and
sub grantees must
implement the
requirements and
maintain systems that
meet specific
requirements of
EDGAR.
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Financial Management Requirements
EDGAR Section 76
o Eligibility to receive subgrants
o Distribution of funds (formula or competitive)
o Private faith-based organizations eligible to
receive funds
o State consolidated grant application to ED
o Assurance statements
o Ability for the SEA to reallocate funds based on
specific federal program
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Financial Management Requirements
EDGAR Section 76 (continued)
o LEA grant application and budget approved by the SEA prior to
the issuance of a grant and the expenditure of funds
o Approval process
o SEA must provide a grant award that indicates the amount of
the subgrant, obligation period and any requirements that apply
to the specific federal program (scope and conditions)
o Consultation with and services for private school students
o Application guidelines for private schools
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Financial Management Requirements
EDGAR Section 76 (continued)
o Calculation and approval of indirect cost rates
(restricted)
o Coordination of the federal funds with other
programs that serve the same populations
(Braiding of funds Title I, Title II and Title III)
o Program evaluations and fiscal audits
o SEA and LEA reporting requirements
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Financial Management Requirements
Section 80 of EDGAR
Specific regulations governing three threshold systems:
• Financial Management
• Procurement
• Inventory
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General Principles
• In general, the SEA
and the LEA must
implement controls
over federal funds.
• ED looks to
“systems,” not
individuals, to
ensure funds are
spent appropriately.
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Financial Management
• Definition-controlling and accounting for federal
funds and assets
– Used to make informed programmatic decisions
– Used to substantiate and document expenditures
• Seven standards described in Section 80.20(b)of
EDGAR
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Financial Management
Seven Requirements:
– Financial Reporting
– Accounting Records
– Internal Control
– Budget Control
– Allowable Cost
– Source Documentation
– Cash Management
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Budget Controls
– Pre-award planning process and technical
assistance - developing and approving budgets
– Communication between fiscal and program staff
at the SEA and LEA levels
– Routine reconciliation to actual expenditures at
the SEA and LEA levels
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Allowable Cost Controls
Program Regulations
– Formal procedures or statue
relating to costs
– Guidelines for determining
allowable costs
(OMB Circular A-87, EDGAR)
– Access to helpful resources and
program guidance
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Financial Management
Obligation
• Obligation-transaction that requires payment
• Valid obligation–transaction giving rise to an
obligation within the period of grant availability
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Financial Management
Obligation=transaction that requires payment
Acquisition of property
Date of binding or written
commitment – PO or contract
Personal services by
employee
After services are
performed
Personal services by
contractor
Date of binding written
commitment
Travel
After travel is taken
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Financial Management
In some programs, unobligated funds can be “carried over”
from first year
• Tydings Amendment
– Does not apply to all grants
– Allows extra year to obligate funds
• Under Tydings, funds are available for 24-27 months
– 15 months under the grant award
– Plus 12 months
• Restricted to a 15% carryover for Title I Part A and Title II
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Financial Management
Liquidation
•
•
•
Liquidation–settle an obligation by paying
funds
All obligations must be liquidated within 90
days after the end of the obligation period.
SEA may impose a shorter deadline on sub
grantee.
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Procurement Procedures
• General procurement procedures are found in
EDGAR and some are found in the individual
federal program statute
• Follow State’s procurement procedures
– State Board Policy 8200
– Purchasing Policies and Procedures Manual
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Procurement Procedures
• Consider purchases based on the following considerations:
–
–
–
–
–
Allowable by the specific program
Reasonable
Necessary for the administration and/or implementation of the grant
Be authorized or not prohibited under state or local laws or regulations
Be adequately documented (requisition, PO, invoice and proof of payment)
• Review all proposed purchases to avoid unnecessary or duplicative
items
– Surplus property
– Structure procurement to obtain most economical
purchase
– Intergovernmental agreement for common goods or
services
– Lease vs. purchase
• Conduct all transactions with full and open competition – be
cognizant of conflict of interest
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Procurement Procedures
Contracted Services
– Contract should include clearly defined deliverables and
terms
•
•
•
•
Description of services to be performed or goods to be delivered
Description of dates when services will be performed or goods delivered
Description of locations where services will be performed or goods delivered
Description of number of students/teachers/etc. to be served (if applicable)
– Remedies for breach of contract-sanctions and penalties
– Termination procedures
– Compliance with federal statues – see §80.36(i)(3-6) of
EDGAR
– Reporting procedures (if applicable)
– Requirements pertaining to copyrights
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Procurement Procedures
Contracted Services
– Must have written invoice from the individual or
company contracted
• Description of services performed or goods delivered
• Description of dates services were performed or goods
delivered
• Description of location services were performed or goods
delivered
• Description of students/teachers/etc. served (if applicable
– Invoice should be reviewed & approved before
payment
• Segregation of duties/expenditures
• Documented approvals
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Inventory Management
Inventory items purchased with federal funds
are divided into three categories:
• Real Property (if an allowable program cost)
• Equipment
• Supplies
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Inventory Management
Equipment Inventory vs. Internal Control
• EDGAR requires an inventory for equipment
• Inventory not required for supplies; however,
ED determined that an adequate internal
control system must include a process for
labeling and locating property purchased
with federal funds
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Inventory Management
• Equipment
– Federal Definition of Equipment
• Tangible property
• Useful life of more than one year
• Acquisition cost of $5,000 or more
– State may use another definition as long as it
includes all property described above
• Supplies
– Small cost items
– Consumed quickly
• ED expects subgrantees to track all property purchased with
federal funds, in order to prove there has been a benefit to
the federal program
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Inventory Management
Practical help for tracking non-equipment items
• Small and attractive item list
•
•
•
Conduct risk assessment to identify items susceptible
to loss
Implement specific measures to control such items
Certain pre-defined assets (technology equipment)
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Inventory Management
• Equipment inventory-updated annually
–
–
–
–
–
–
a description of the property
a serial number or other identification number
the acquisition date and cost of the property
the percentage of federal participation in the cost of the property
the location, use and condition of the property, and
any ultimate disposition data including the date of disposal and sale price
of the property
• Physical inventory
– Must be performed at least every 2 years
– Indicate signature of individual(s)
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Inventory Management
• Must protect against unauthorized use
• When property is no longer needed, must
follow disposition rules:
– Transfer to another federal program
– Over $5,000 – Keep or sell, but must pay a share
based on the percentage of federal ED
participation at initial acquisition
– Under $5,000 – May keep, sell, or dispose of it
with no obligation to ED
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Inventory Management
• Must have adequate controls in place
to account for:
– Location of equipment - assure that it is used
solely for authorized purposes
– Custody of equipment - maintain effective control
and accountability
– Security of equipment - adequately safeguard all
property
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Closing Thoughts…...
Efficiency is doing the thing right.
Effectiveness is doing the right thing.
– Peter F. Drucker
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