Transcript Document

Financial Management
Financial Management
10 CFR 600: Know Your
Requirements
WEATHERIZATION
ASSISTANCE
PROGRAM
/ PROGRAM
MANAGEMENT
CURRICULUM
– September
2011
1 | WEATHERIZATION
ASSISTANCE
PROGRAM
/ FINANCIAL
MANAGEMENT
CURRICULUM
– September
2011
eere.energy.gov
10 Code of Federal
Regulation 600
Financial Management
Major Subparts
•
Subpart A - General
•
Subpart B - Grants to Other Than State and Local
Governments
•
Subpart C - Grants to State and Local Governments
•
Subpart D - Cooperative Agreement
2 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
10 CFR 600 Sections
Financial Management
SECTION
10 CFR 600
(Non-Profits)
10 CFR 600
(State/Local)
General Requirements
101-104
200-205
Pre-Award
Requirements
110-117
210-212
Financial
Admin./Management
120-128
220-230
Property Standards
130-137
231-235
Procurement Standards
140-149
236-237
Reports and Records
150-153
240-242
Termination &
Enforcement
160-162
243-244
After-the-Award
170-173
250-252
3 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Grant Application Requirements
Financial Management
This section prescribes the forms and instructions to be used in
applying for federal assistance.
Applicants are not required to submit more than the original and
two copies of preapplications and applications.
For amendments to a previously submitted application only the
affected pages need be submitted.
4 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Debarment and Suspension
Financial Management
• Recipients shall comply with the debarment and suspension
common rule.
• www.epls.gov
5 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Special Restrictive Conditions
Requirements
Financial Management
Defines under what circumstances a grantee will be considered
high-risk:
•
•
•
•
•
history of unsatisfactory performance,
financially unstable,
management system that does not meet standards,
nonconformance in prior awards,
or not otherwise responsible.
Awarding agency will provide written explanation of conditions
and corrective action.
6 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Standards Requirement
Financial Management
Financial management systems must meet the following
minimum standards:
•
Provide for accurate, current, and complete disclosure for all
financial activities.
•
Maintain records that identify the source and use of funds.
7 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Accounting System
Financial Management
Accounting system that does not
segregate funds
LIHEAP Grant
Grant 1
Grant 2
Grant 3
Weatherization Grant
Utilities Funds
8 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Accounting System
Financial Management
Accounting system that does segregate
funds
LIHEAP Grant
Weatherization Grant
Utilities Funds
9 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Standards Requirements
Financial Management
Financial management systems must meet the following
minimum standards:
•
Internal Control. Maintain effective control and accountability
for all grant cash, property, and other assets.
•
Budget Control. Compare actual expenditures with
budgeted amounts on a periodic basis.
10 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Standards Requirements
Financial Management
Budget Control
•
Serves to link programmatic and financial activities.
•
Prevents cost overruns.
•
Helps staff responsible for specific activities to maintain
control over expenditures.
11 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Standards Requirement
Financial Management
Financial management systems must meet the following
minimum standards:
•
Source Documentation. Have records supported by source
documentation.
•
Cash Management. Have procedures to minimizing time
elapsing between the transfer of funds and disbursement of
funds.
12 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Payment Requirements
Financial Management
All methods and procedures for payment shall minimize the time
elapsing between the transfer of funds and disbursement by the
subgrantee.
The payment methods that can be used are:
•
Advances (for grantees if they meet standards)
•
Reimbursements (when requirements are not met or for
construction contracts.)
•
Working capital advances (if a subgrantee cannot meet the
criteria for advance payments.)
13 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Payment Requirements
Financial Management
• Recipients must also expend program income, rebates,
refunds, and audit recoveries before requesting additional
federal cash payments.
• Payments cannot be withheld unless:

Recipient has failed to comply with grant award conditions.

Recipient is indebted to the United States.
• Recipients are encouraged to use minority owned banks.
14 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Standards Requirements
Financial Management
Financial management systems must meet the following
minimum standards:
•
Allowable Cost. Determine allowable costs by OMB cost
principles, program regulations, and grant agreement.
15 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Allowable Cost Requirements
Financial Management
The allowable costs referenced in 10 CFR 600 are
detailed in separate OMB Circulars:

OMB Circular A-87 -Cost Principles for State and Local
Governments. (2 CFR Part 225)

OMB Circular A-122 -Cost Principles for Non-Profit
Organizations. (2 CFR Part 230)

OMB Circular A-21 – Cost Principles for Institutions of
Higher Education (2 CFR Part 220)
16 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Period Allowability of Funds
Requirements
Financial Management
• Where a funding period is specified, a grantee may
charge to the award only costs resulting from
obligations during the funding period.
17 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Cost Sharing Requirements
Financial Management
All Contributions, including cash and in-kind, shall be
accepted as part of recipient’s cost sharing or
matching if they:
•
•
•
•
•
•
•
are verifiable through records,
are not counted for other federal programs
are necessary for completion of the project,
are allowable under the cost principles,
are not paid by other federal funds (unless approved by
statute),
are provided for in the approved budget, and
conform to other provisions of the financial management
circulars.
18 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Program Income Requirements
Financial Management
Program income is gross income generated by a grant
supported activity, or earned only as a result of the grant
agreement during the grant period.
The methods for treatment of program income include:
• Addition
• Deduction
• Cost Sharing
19 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Program Income Requirements
Financial Management
Unless authorized by Federal regulations or the grant
agreement, program income will be treated as gross program
income. Unless authorized, program income shall be deducted
from the total allowable costs.
There are no Federal requirements governing the disposition of
program income earned after the end of the award period unless
the regulations or agreement states differently.
20 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Non-Federal Audit Requirements
Financial Management
State and local governments and non-profit organizations will be
subject to the audit requirements in OMB A-133.
21 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Budget and Project Revisions
Requirements
Financial Management
Recipients are permitted to rebudget within the approved direct
cost budget to meet unanticipated requirements and make very
limited program changes.
The applicable cost principles which require prior approval shall
apply.
Prior approval is required based on specific clauses within the
grant agreement and in the following instances where
•
•
a revision would result in the need for additional funds;
Cumulative transfers would exceed 10% of the total budget if
the grant is over $100,000;
22 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Budget and Project Revisions
Requirements
Financial Management
•
•
•
•
•
•
Funds allotted for training were transferred;
There is a revision in the scope of objectives;
Contracting out of any work;
There is a need to extend the period of availability of funds;
There is a change in key persons who are central to the
purpose of the project or
Absence of Project Director or Principal Investigator for more
than 3 months or 25% of time
Requests for prior approval will be in the same format as used in
the application. The approval must be in writing.
23 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Real Property and Equipment
Requirements
Financial Management
Real property means land and structures.
Title to real property will vest with the grantee or subgrantee.
The awarding agency will provide instructions for disposition of
real property when it is no longer needed.
24 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Real Property and Equipment
Requirements
Financial Management
Equipment is defined as tangible, nonexpendable personal
property having a useful life of more than one year and an
acquisition cost of $5,000 or more per unit.
Title to equipment acquired under a grant or subgrant will vest
with the grantee or recipient unless specified.
Equipment shall be used for the program or project it was
acquired. The equipment may be used for other Federally
supported projects if it does not interfere with the project for
which it was originally acquired.
Equipment shall not be used to provide services to non-federal
outside organizations for a fee less than private companies
charge.
25 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Real Property and Equipment
Requirements
Financial Management
• If replacement equipment is needed the equipment to be
replaced may be used as a trade-in.
• The property management requirements include the following:
• Property records must include a description, serial number,
source, title, cost, acquisition date, percent of Federal
participation, location, use, condition, and ultimate
disposition.
• Physical inventory must be done at least every two years.
• A control system to ensure safeguards against loss,
damage, or theft.
26 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Real Property and Equipment
Requirements
Financial Management
• Adequate maintenance procedures.
• Proper sales procedures. Items with a fair market value
(F.M.V.) of $5,000 or less that are no longer needed can be
disposed of with no further obligations. Items over $5,000
F.M.V. require the awarding agency to receive its fair share.
27 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Real Property and Equipment
Requirements
Financial Management
Federally owned equipment requires a recipient to submit an
annual inventory listing. When the equipment is no longer
needed a grantee will request disposition instructions from the
Federal agency.
28 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Supplies Requirements
Financial Management
Title to supplies acquired under an award will vest with the
recipient.
If there is a residual inventory of unused supplies exceeding
$5,000 in total fair market value upon termination or completion
of the award and if the supplies are not needed for any other
federally sponsored programs the recipient shall compensate the
awarding agency for its share.
29 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Federal Procurement
Regulations
Financial Management
Standards:
 Recipient is responsible for all procurement contractual and
administrative issues
 Maintain Code of Conduct
 All procurement transactions must provide for open and free
competition
30 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Federal Procurement
Regulations
Financial Management
Grantees and Subgrantees must have written
procurement procedures that include:
• Procedures that avoid the purchase of unnecessary or
duplicative items.
• Analysis of lease and purchase alternatives.
• Preference for products and services that conserve natural
resources and protect the environment.
31 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Procurement Regulations
Financial Management
• Grantees are encouraged to enter into State and local intergovernmental agreements for purchasing common goods and
services.
• Grantees are encouraged to use Federal excess and surplus
property.
• Procedures to ensure awards are only to responsible
contractors.
• Records that detail the significant history of a procurement.
• Grantees will have protest procedures.
32 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Procurement Regulations
Financial Management
•
All procurement transactions will be conducted in a manner
providing full and open competition. There must be written
selection procedures. Also, the solicitation must include a
clear and accurate description of the service or material
being procured.
33 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
• Small purchase. Procedures for services and goods that will
not cost more than $25,000 in the aggregate (non profits)
and $100,000 (governmental).
• Sealed bids (formal advertising).
• Competitive proposals.
• Non-competitive proposals may only be used when the item
is available from one source, emergency situations, the
awarding agency authorizes, or competition is determined
inadequate. Pre-award review may be required.
34 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Sealed Bid Proposals:
• Made early in the procurement cycle:
 Allows vendors time to prepare their bids to meet the
specification of the solicitation
• Solicitation information includes:
 What is being purchased
 Terms & conditions the vendors must meet
 Where & when sealed bids will be opened
35 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Sealed Bid Proposals:
• Awards are made to the lowest priced responsible vendor:
 Capable of compliance will all bid specification
 Capability of performing the work
 Has administrative capacity
• Award becomes – a firm, fixed price contract
36 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Sealed Bid Proposals:
• Vendor’s payments:

Lump sum - paid for successful performance

Unit price - paid for each deliverable unit is completed in
the contract
• Must have at least 2 responsive suppliers competing for
contract
37 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Competitive Proposal Procurements:
– Proposal types:

Request for Proposal

Request for Quotations

Request for Information
38 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Competitive Proposal Procurements:
•
•
•
•
•
Publicized method same as sealed competitive process
(invitation for bids)
All evaluation factor publicized & their importance
All vendor submittals received and evaluated
Proposals must be solicited from a number of qualified
sources
Organization must have a method for conducting technical
evaluation of all proposals & for selecting awardees
39 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Competitive Proposal Procurements:
• Award made to the most responsive firm whose proposal is
most advantageous to the program
 Price and other factors considered to determine most
advantageous offer
• Must have at least 2 responsive suppliers competing for
contract
40 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Non Competitive Procurements:
• Non competitive procurements must be approved by funding
agency before awarding
• Organization must devise & document its own analysis
process to ensure fair prices are being charged
• Non competitive contracts become negotiated contracts
• Organization determines what level of organizational
leadership is required to approve this method
41 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Non Competitive Procurements:
• May be used only when it is not feasible for:
 Small purchase procedures
 Sealed bid or competitive proposals
and one of the following conditions applies:
 Item only available from a single source
 Emergency exist that will not permit a delay resulting from
completive bidding
42 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Methods of Procurement
Financial Management
Non Competitive Procurements:


Organization authorized noncompetitive proposals
After solicitation of a number of sources, competitive is
determined as inadequate
Cost analysis is required which verifies:



Proposed cost data
Projection of the data
Evaluation of costs and profits
43 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Procurement
Financial Management
• Grantees are to encourage minority firms, women’s business
enterprises, and labor surplus area firms.
44 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Procurement
Financial Management
• There must be a cost price analysis in connection with every
procurement.
45 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Procurement
Financial Management
• Grantees must make available proposed procurement
technical specifications upon request by the awarding agency.
46 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Procurement
Financial Management
• The bonding requirements of a recipient will be accepted if the
awarding agency’s interest is adequately protected. If not,
there are specific requirements described in 10 CFR 600.
47 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
12 Steps of Procurement
Financial Management
1.
Determine what you will be purchasing
2.
Establish the timeframe for the purchase.
3.
Identify the lead individual to handle the purchase.
4.
Prepare the general instructions.
5.
Prepare the specifications and price quote sheets.
6.
Advertise the solicitation
48 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
12 Steps of Procurement
Financial Management
7.
Conduct bidder’s conference.
8.
Receive bids/proposals/quotations.
9.
Evaluate the bids/proposals/quotations.
10. Select the contractor(s)/vendor(s)
11. Establish the solicitation file.
12. Enter into agreements with contractor(s)/vendor(s).
49 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Performance Report
Requirements
Financial Management
Performance reports shall not be required more frequently than
quarterly or, less frequently than annually.
Periodically report progress in meeting program objectives. This
must include comparison of accomplishments with planned
objectives.
Quarterly and semi-annual reports will be due 30 days after the
reporting period. Annual and final reports will be due 90 days
after expiration date.
50 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Record Retention Requirements
Financial Management
Grantee and subgrantees must retain records for three years
after submitting the final expenditure report.
Records must be maintained until completion of action on all
litigation, claims, negotiation, or audit.
For property and equipment the retention period starts upon
disposition.
51 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Close-out Requirements
Financial Management
The Federal agency will require the following final
reports:
•
Standard Form 425 – Federal Financial Report
•
Standard Form 270 - Request for Advance or
Reimbursement, if applicable
•
Final performance or progress report
The recipient will submit an invention disclosure, if applicable.
The recipient will submit a Federally-owned property report.
Cost and cash adjustments will be made as appropriate.
52 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Cost Principles
Financial Management
The Cost Principles Address Four Major Areas:
• Basic Guidelines for Costs
• Cost Allocation Plan
• Indirect Cost
• Allowability for selected costs
53 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Basic Guidelines for Costs
Financial Management
• Costs are allowable if they are necessary and reasonable, not
prohibited under state or local laws, conform to laws and
regulations, given consistent treatment, comply with generally
accepted accounting principles, and are not included as a cost
under other federal programs.
• Allocable costs assigned must be in proportion to the benefits
received, cannot be shifted to overcome deficiencies in other
programs, must be supported by a cost allocation plan.
• Applicable credits are to be used to reduce expenditures
applicable to a given grant.
• The total cost of a grant program is comprised of the allowable
direct and allowable indirect costs less applicable credits.
54 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Allocation of Costs
Financial Management
•
Identify each of the shared costs that should be allocated.
•
Identify each of the shared costs that will be included as part
of the indirect cost pool, if applicable.
•
Determine the method in which costs will be allocated so that
each program is paying proportionately for the benefits from
the cost.
•
Prepare the cost allocation plan and submit for internal
approval.
55 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Steps in Preparing a Cost
Allocation Plan
Financial Management
•
Identify the service and costs of each service to be allocated.
•
Determine the method (unit) for allocating the costs of each
service to user programs.
•
Allocate costs mathematically to user programs.
56 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Direct Cost Allocation Plan
Documentation
Financial Management
The following supporting information would be a part of
a cost allocation plan.
• List of grants, contracts and agreements.
• Agency organization chart.
• Job description - for each general and administrative staff person.
• Work sheet for each individual showing personnel and non personnel
costs, chargeable hours and calculation of that employee's billing rate.
• Summary of non-personnel general administrative costs and allocation
to each general and administrative position.
57 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Direct Cost Allocation Plan
Documentation
Financial Management
The following supporting information would be a part of
a cost allocation plan.
• Copy of the previous audit report supporting the total general and
administrative costs use in these calculations.
• Copy of the time sheet form which will be used by general and
administrative staff.
• Copy of the monthly billings summary form that will be used to invoice
each program.
• Space cost allocation for each property
58 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
INDIRECT COSTS
Financial Management
Direct Costs
Indirect Costs
Personnel
Personnel
Space
Space
Consumables
Consumables
Telephone
Telephone
Total Costs
Direct Costs
Indirect
Costs
59 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Indirect Costs
Financial Management
• Indirect costs are shared costs, to be distributed by an indirect
cost rate, that must be grouped into one or more equitable
cost pools to determine appropriate rate(s).
• A formal indirect cost proposal must be submitted and
approved. Once approval is granted, charges can then be
distributed by means of an indirect cost rate.
• Application of indirect cost rates must be supported by formal
accounting records available for auditing.
• Indirect costs (or administrative costs) are no different than
direct costs in that they have to be allowable under the federal
government cost principles.
60 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Types of Indirect Cost Rates
Financial Management
• Predetermined rate - negotiated, usually for one year and not
subject to adjustment.
• Fixed rate with carry forward - adjusted in future period.
• Final rate - not subject to adjustment.
• Provisional rate - temporarily subject to adjustment.
61 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Cognizant Agency
Financial Management
• Receive the grantee's indirect cost proposal.
• Review it in the detail it deems necessary to reach a
conclusion.
• Try to reach an agreement with the proposing agency on a
rate both will find acceptable.
62 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Key Points to Remember
Financial Management
• Costs included as indirect costs should not also be charged
directly to programs.
• All costs could be charged to programs on a direct basis, if
one wanted to incur the time and expenses to do so.
• Costs must be allowable under the cost principles.
• Funds spent on administrative costs are unavailable for
programmatic use.
• Funds spent on administrative costs, which are not charged to
the program receiving the benefit, must be paid for by other
funds of the agency.
• Many funding sources limit the amount of total administrative
costs (direct and indirect).
63 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Cost Category
Accounting
Advertising –
Read Allowability
Advisory Council
Alcoholic Beverages
Alumni Activities
Audit Services
Automatic Data Processing
A-87
State & Local
Governments
X
A-122
Nonprofit
Organization
A-21
Educational
Institutions
X
X
X
X
X
X
X
X
Allowable
Allowable with
Approval
X
X
X
X
X
X
X
Bad Debts
Bid and Proposal Costs (reserved)
X
Bonding Costs
Budgeting
Building Lease and Management
X
X
Not Allowable
X
X
X
X
X
X
X
X
X
X
Civil Defense Costs – Read
Allowability
Commencement and Convocation
Costs – Read Allowability
X
X
Communication Costs
Compensation for Personal Services
X
X
X
X
X
X
X
X
Contingency Provisions
X
X
X
Contributions
Deans of Faculty/Graduate Schools
X
X
X
X
X
X
64 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
A-87
State & Local
Governments
A-122
Nonprofit
Organization
A-21
Educational
Institutions
Read Allowability
Depreciation of Use Allowance
X
X
X
X
X
X
Disbursing Services
Donations
Employee Morale, Health and
Welfare Costs and Credits
X
X
X
X
X
X
Entertainment Costs
Equipment and other Capital
Expenditures
Executive Lobbying Costs
X
X
X
X
X
X
Cost Category
Allowable
Allowable with
Approval
Not Allowable
Defense and Prosecution
Fines and Penalties
Fringe Benefits
General Government Expenses
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Independent Research and
Development (reserved)
Insurance and Indemnification
X
X
Goods/Services for Personal use
Housing and Personal Living
Expenses
Lobbying
Idle Facilities and Idle Capacity
X
X
X
X
X
X
X
65 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Cost Category
A-87
State & Local
Governments
A-122
Nonprofit
Organization
A-21
Educational
Institutions
Interest, Fund-Raising, and
Investment Management Costs –
Read the Regulations
X
X
X
Labor Relations Costs
Legal Expenses
Losses on Other Awards
X
X
X
X
X
X
X
Maintenance and Repair Costs
X
X
X
X
Materials and Supplies
X
X
X
X
Meetings, Conferences
X
X
Memberships, Subscriptions and
Professional Activity Costs
X
X
Motor Pools
Organization Costs
Overtime, Extra Pay, Shift and
Multi-Shift Premiums
X
X
X
X
X
X
X
X
X
X
X
A-87
X
X
X
X
X
X
X
Allowable with
Not Allowable
Approval
X
X
Page Charges in Professional
Journals
Participant Support Costs
Patent Costs
Payroll Preparation
Pension Plans
Personnel Administration
Allowable
X
A-122
X
X
X
X
X
X
66 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov
Financial Management
Cost Category
Plant Security Costs
Preagreement Costs
Pre-award Costs
Professional Costs
Profit and Losses on Disposition
of Depreciable Property or Other
Capital Assets
Proposal Costs
Publication and Printing Costs
Rearrangement and Alteration
Costs
Reconversion Costs
Recruiting Costs –
Read Allowability
Relocation Costs –
Subject to Limitations
Rental Costs
Royalties and other costs for use
of patents and copyrights
A-87
State & Local
Governments
A-122
Nonprofit
Organization
X
Student Activity Costs
Allowable
Allowable with
Approval
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
A-87
A-122
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Not Allowable
X
X
Scholarships and Student Aid
Costs
Selling and Marketing
Severance Pay
Specialized Service Facilities
A-21
Educational
Institutions
X
X
X
X
X
X
X
X
X
67 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
X
eere.energy.gov
Financial Management
Cost Category
Taxes
A-87
State & Local
Governments
A-122
Nonprofit
Organization
A-21
Educational
Institutions
Allowable
X
X
X
X
X
X
X
Termination Costs
Allowable with
Approval
Not Allowable
Training and Education Costs
Transportation Costs
Travel Costs
X
X
X
X
X
X
X
X
X
X
Trustee Travel and Subsistence
X
Under Recovery
X
X
68 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
X
eere.energy.gov
Financial Management
[email protected]
208-733-9351
69 | WEATHERIZATION ASSISTANCE PROGRAM / FINANCIAL MANAGEMENT CURRICULUM – September 2011
eere.energy.gov