Federal Grants Financial Guidelines Illinois Criminal Justice Information Authority Office of General Counsel

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Introduction

Although this presentation outlines some of the main rules of the

Federal Grant Financial Guidelines

, it is not intended as a replacement for the guidelines. Details of the rules outlined and additional rules not included in this presentation are in the guidelines. The grantee is responsible for reading the

Federal Grant Financial Guidelines

and seeking guidance from the Illinois Criminal Justice Information Authority on any rules the grantee does not understand.

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Federal Grants administered by ICJIA

Anti Drug Abuse Act (ADAA - Byrne Formula Grant) Juvenile Accountability Incentive Block Grant (JAIBG) Local Law Enforcement Block Grants (LLEBG) National Criminal History Improvement Program (NCHIP)    Residential Substance Abuse Treatment for State Prisoners Program (RSAT) Violence Against Women Act (VAWA) Victims of Crime Act (VOCA)  Violent Offender Incarceration and Truth-in-Sentencing Incentive Grant (VOI-TIS) 3

Grant Process

 The Authority designates funding to a grantee for a grant program.

 An interagency agreement is signed that contains terms and conditions of funding, a grant program narrative and a grant program budget.

 The grantee administers the grant program according to the grant program narrative and budget.

 The grantee must follow the federal financial guidelines, circulars and program guidelines, the interagency agreement terms and conditions, and ICJIA’s financial guidelines.

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Administrative Policies

 The Authority must receive the signed interagency agreement and accompanying material within 45 days from the date it was sent to the grantee for signature.

 Interagency agreements must be signed by all parties prior to the start of the period of performance.

 If the grant program has not commenced within 60 days of the original start date of the grant period, the grantee must inform the Authority in writing of the steps taken to initiate the project, the reasons for the delay, and the expected starting date.  For continuing grant programs, continuation materials will be sent 120 days prior to the end of the grant’s period of performance.

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Match Contributions

Match funds are non-federal funds provided by the grantee to cover costs of the grant program.

 Grantees must have the authority to commit the match funds to the grant program.

 Match funds are subject to the same guidelines and cost principles as federal funds.

 Cash Match   Costs that are in addition to those already allocated for the program can be applied as match.

Includes cash spent for program costs.

 In-Kind Match   Costs that already exist, but that will now be used to benefit the grant program can be applied as match.

Includes the value of something that does not have a cost associated with it. (i.e., donated items.) 6

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Match Contributions

Some grants require cash match.

 ADAA, JAIBG, LLEBG, RSAT, VOI-TIS  Some grants allow both cash and in-kind match.

 VOCA, VAWA, NCHIP  The entire match amount must be obligated by the end of the period of performance or the grantee risks a proportionate reduction in the amount of federal funds awarded under the interagency agreement.

 Grantee must retain records on all match costs, including donated services.

 If overmatch is included in the grant program budget it will be subject to the same guidelines as the federal and match funds.

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Supplanting

 Definition: To deliberately reduce or reallocate state, local or agency funds because of the existence of the federal funds.

 Federal funds must increase or supplement the funding available for criminal justice system or crime victim assistance activities.

 Grantees must maintain a level of state, local or agency financial support that is equal to or greater than the level prior to receiving the federal funds.

 Any potential existence of supplanting will require documentation to establish that the reduction in financial support was not due to the receipt of federal funds.

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Supplanting

 Non-Supplanting guidelines for employees and contractual costs are as follows:  Federal funds cannot be used to pay for existing employees unless the existing position is “back-filled” with a new hire or the existing employee will be working additional hours on the grant program.

 Federal funds cannot pay for existing contractual costs (i.e., rent). Any costs to be paid with federal funds are to be additional or increased costs necessary to implement the grant program.

 In-kind match for existing employees or contractual costs can be allocated to a grant program for costs associated with that program.

  These costs must be in proportion to the services being allocated to the grant program.

If contractual costs include rent, the grantee must not have a financial interest in the property.

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Revisions and Extensions

All grant program and certain budget revisions, as listed in the

Federal Grant Financial Guidelines

, must be approved by the Authority in writing prior to implementation of these changes.

 The grantee must submit a written request for changes and must include the reasons and basis for the proposed changes.

 The grantee must submit the request at least 90 days prior to the end of the current period of performance.

 Changes that include an amendment to the interagency agreement to extend the period or performance must be signed by all parties prior to the end of the current period of performance.

 The grantee cannot make any obligations or expenditures beyond the current period of performance until the amendment is signed by the all parties.

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Disclosure of Federal Funds

 Publications that describe or result from the federally funded grant program must be reviewed by the Authority prior to printing.

  The review requirement applies regardless of whether federal funds are being used to pay for the printing of the publication.

Publications must contain the disclaimer included in the interagency agreement.

 Statements, press releases, requests for proposals, bid solicitations and other documents describing the federally funded grant program shall clearly state the percentage of the program costs to be federally funded and the dollar amount of the federal funds for the grant program.

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Cost Allowability

 As listed in the be: 

Federal Grant Financial Guidelines

, costs must Necessary and reasonable for the administration of the program.

 Allocable and specific to the program.

 Authorized and in compliance with state, local or agency laws or rules.

 In conformance with federal guidelines, laws and regulations.

 Treated consistently with policies and procedures that apply to non grant costs and activities.

 Allocated to the program and no other federally funded programs.

 Net costs that reflect all discounts, rebates, returns and sales.

 Adequately documented.

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Prior Approval Costs

 Even if approved in the budget, the following costs must receive additional written approval from the Authority prior to the grantee incurring the costs:         Pre-agreement costs or costs incurred prior to the award date; Indirect costs; Out-of-state travel; Sole source purchases with an aggregate cost over $25,000; Subcontracts over $100,000; Contractor fees exceeding $450/8 hour day; Rearrangements or alterations of facilities; and Lease/purchase agreements.

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Specific Budget Costs

 Personnel costs must be documented with signed time and attendance sheets for both federally funded and match funded personnel.

 Costs for personnel must be proportionate to the time they provide services to the program.

 Time sheets should show the hours the employee began and ended the day and the hours worked on the program.

 Equipment costs must be listed in the approved budget prior to their purchase.

 Costs for existing equipment cannot be paid for with program funds.

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Specific Budget Costs

 Contractor costs must conform to procurement requirements located in the interagency agreement and the

Federal Grant Financial Guidelines.

 Payment for contractor time may include payment for time spent on preparation, evaluation and travel in addition to the actual performance time.  Travel costs cannot exceed the State’s rate or the local or agency rate, whichever is lower.

 Out-of-state travel requests must be submitted and approved prior to the travel dates.

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Competitive Procurement

All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition.

 Procurements of $100,000 or less require the grantee to solicit bids or quotes from at least three sources.

 Procurements over $100,000 require formal advertisement through a Request for Proposals (RFP) or Invitation for Bids (IFB).

 RFPs over $100,000 require Authority review and approval prior to their issuance.

 If grantee’s procurement policies require a more competitive procurement process than the above process, then the grantee should follow their procurement process.

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Non Competitive Procurement

A sole source procurement is a procurement without competition and must meet one of the following criteria:  The item is available from only one source;  Public exigency or emergency will not permit a delay resulting from a competitive procurement; or  After solicitation from a number of sources, competition is determined to be inadequate.

The grantee must maintain justification, as listed in

Federal Grant Financial Guidelines

, for all non-competitive procurements.

 The grantee must request approval from the Authority for a non-competitive procurement over $25,000 prior to incurring the expense.

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Subcontracts

All subcontracts must be in writing.

 Subcontracts over $100,000 must receive prior Authority approval before they are executed by the parties.

 The terms and conditions of the interagency agreement shall apply to and bind the parties of the subcontract.

  All subcontracts shall include the basic provisions of the interagency agreement.

 Contractor’s full name and address      Agency name; Description of services to be rendered; Contract terms Maximum or estimated amount to be paid and payment rates; and Signature of contractor or authorized representative.

Subcontracts shall also include the provisions in Appendix F located in the Federal Grant Financial Guidelines .

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Property Management

The grantee shall manage the equipment to ensure that it is being used for grant program purposes.

 If the equipment is no longer necessary for the grant program, the grantee shall comply with the interagency agreement and the

Federal Grant Financial Guidelines

property.

for the disposition of the  The Authority reserves the right to make the final determination as to the disposal of program property and will make the determination based on the following assessment:   Program’s need for the property; Other federal programs’ need for the property;  The grantee shall retain detailed inventory records, as listed in the

Federal Grant Financial Guidelines

purchased with grant program funds.

, describing the property 19

Accounting Standards

 The grantee must use accounting practices that ensure the proper use of the grant program funds.

 The grantee’s accounting standards must use commonly accepted standards of financial responsibility or the grantee risks disallowance of expenditures.

 Funds from one federal grant program cannot be commingled with other funds and funds from one grant program cannot be used to support another grant program.

 If the grantee’s accounting system integrates the funds, then a system must be established to provide adequate identification of the separate grant program funds.

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Accounting Procedures

 The accounting system should provide the information needed to identify separately the receipt of federal and matching funds.

 The accounting system should have an adequate system of internal controls to safeguard the funds covered, verify the accuracy and reliability of information, promote operational efficiency, and encourage adherence to prescribed management policies.

 The grantee must accurately and timely record the expenditure of grant program funds. Supporting documentation must also be kept as evidence of the expenditure.

 The grantee must have procedures to ensure that the expenditure of funds are consistent with the grant program budget and expended for allowable purposes.

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Accounting Procedures

 The elements of the accounting system must consist of an account structure, accounting records, source documents, a system for coding financial transactions, financial reports, and written procedures that prescribe the manner in which and by whom these operations are performed.

 The grantee should have a separation of duties so that no single individual controls all the following accounting procedures:      Authorization to initiate expenses.

Approving vouchers for payment.

Signing checks.

Recording transactions in account books.

Responsibility for physical custody of expenditure documentation.

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Fiscal Reports

 The fiscal report is used as the basis for fund disbursement.

 Fiscal reports must be submitted no later than 15 days following the period covered by the report.

 Fiscal reports should include actual and cumulative expenditures by grant program budget category.

 Late notices will be sent to grantees who have failed to submit fiscal reports and the grantee must respond to these late notices within 30 days.

 All expenditures incurred during a given state fiscal year (July 1 June 30) must be submitted to the Authority by the following July 15 th for disbursement.

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Disbursements & Expenditures

 Grantees should anticipate a delay of approximately 4-6 weeks in receiving funds after a request for disbursement is made and the grantee should make adjustments in their request to adjust for this delay.

 The grantee must obligate the grant program funds prior to the end of the period of performance and must liquidate those funds within 45 days of the end of the period of performance. Any federal funds that are not liquidated within the 45 day period may lapse back to the Authority.

 If the grantee does not meet the match requirement in the interagency agreement the amount of federal funds to be disbursed will be proportionately lowered or, if already disbursed, a refund of federal funds will be required

.

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Recordkeeping

 Records for federally funded programs should be separately maintained and readily locatable.  Records should easily identify the receipt and expenditure of grant program funds and adequate documentation which supports these expenditures should be available.

 At the end of a grant period, the grantee is required to provide a final fiscal report that identifies the expenditures of the grant program and a final data report that show the progress of the program.

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Retention of Records

 Financial and program records shall be maintained for a period of at least three years.  If any litigation, audit, fiscal review or other action involving the records has been started before the 3 year period ends, the grantee must retain the documentation until the completion of the action or the end of the 3 year period, whichever is later.

 Property records must be retained for a period of three years after the final disposition, transfer or replacement of the property.

 The Authority, Department of Justice personnel, or any of their authorized representatives have the right to access any pertinent grant program documentation for as long as the records are retained.

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Audits

 Grantees that expend $500,000 or more in federal funds in a fiscal year must conduct an audit in accordance with OMB Circular A-133.

 Grantees that expend less than $500,000 in federal funds in a fiscal year are exempt from a federal audit but must make documentation available for review.

 Failure of a grantee to comply with an A-133 audit requirement may result in the withholding of funds.

 Audit costs for audits not required or not performed in accordance with an A-133 audit are unallowable.

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Sanctions

 If a grantee fails to comply with the terms and conditions of the interagency agreement, state and federal statutes, regulations, or guidelines, the Authority may take one or more of the following actions:  Temporarily withhold funds until the grantee is in compliance;  Disallow all or part of the costs of the activities not in compliance;  Wholly or partly suspend or terminate the current award;  Withhold further awards; or  Pursue other remedies legally available to the Authority.

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Questions

 If a grantee has any questions or comments concerning the

Federal Grant Financial Guidelines

or their grant, they should contact their grant specialist.

Illinois Criminal Justice Information Authority 120 S. Riverside Plaza, Suite 1016 Chicago, IL 60606 312-793-8550 29