Transcript Document

Presented at the National Association of
HBCU Title III Administration, Inc.
2014 Technical Assistance Workshop
June 24, 2014
Presenter: Perry L. Herrington
Director of Title III & Strategic Initiatives
Clark Atlanta University
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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
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Program
“Legislation”
EDGAR
Application
CDP/Plan
OMB
Circulars
University
Policies
Government Performance and Results Act
 Ties
federal funding to results
 Greater accountability
 GPRA
indicators reflected
in objectives and activities
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o
A-21 – J.: General provisions for selected items of cost
o .20 Fund raising and investment costs. a. Costs of organized fund raising,
including financial campaigns, endowment drives, solicitation of gifts and
bequests, and similar expenses incurred solely to raise capital or obtain
contributions, are unallowable.
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A-110 – Subpart A - General
o .28 Period of availability of funds Where a funding period is specified, a
recipient may charge to the grant only allowable costs resulting from
obligations incurred during the funding period and any pre-award costs
authorized by the Federal awarding agency.
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A-133 – Subpart B - Audits
◦ (a) Audit required. Non-Federal entities that expend $300,000($500,000
for fiscal years ending after December 31, 2003) or more in a year in
Federal awards shall have a single or program-specific audit conducted for
that year in accordance with the provisions of this part. Guidance on
determining Federal awards expended is provided in §___.205.
oOMB Circulars A-21, 110, and 133
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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
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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
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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.
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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).
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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.
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 Request funds for immediate needs
 Minimize time between requests & expenditures
 Draws commensurate with approved scope
ED’s Concerns
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Large amounts of unobligated funds
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Excessive / Infrequent requests
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Project goals not met - ED monitors
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Tracks spending patterns for each grant
G5 System
Why:
 Identify performance issues
 Identify financial issues
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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
Must return excess cash
& interest to government
100
90
80
70
60
50
40
30
20
10
0
1st Qtr
2nd Qtr 3rd Qtr
4th Qtr
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GAPS Monitoring Report:
Large Available Balance
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Within 90 days, “flags” grants with
70% or more
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Verifies financial data on
annual performance report
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Discrepancies clarified before award
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 Non-Federal audit if expending
$500,000 or more annually in Federal
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Mail to Federal Audit Clearinghouse
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Review Attachment C
awards
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Poor recordkeeping / management
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Unallowable costs / activities
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Failure to follow standards
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Lack of internal controls
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Failure to obtain prior approval
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Incorrect / no indirect cost rate
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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
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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
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Serious implication
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Special terms/conditions added
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Unsuccessful implementing project
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More tech assistance
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Notified by correspondence
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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
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Lines of Authority
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As stated in approved package
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Key personnel changes need ED approval
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Staff made aware of project’s :
purpose, duration, objectives
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 Project’s
success and financial
accountability
 Submit annual & final performance reports
 Valid & reliable data
 Report on GPRA standards & indicators
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On Site:
 Funded application & Grant awards
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Previous audits / site visit reports
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Annual performance reports
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Project revision(s) documentation
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Current budget & personnel list
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Budget Items
Must be:
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Allowable - permitted or not specifically
prohibited
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Allocable - necessary for project’s success
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Reasonable - costs incurred by a
person
“prudent”
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GOALS:
 Increase flexibility
 Increase accountability
 Reduce paperwork burden
 Develop partnerships
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Incurred up to 90 days
before budget period begins
 No prior approval required
 Applies to New and NCC awards
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 Reasonable expectation of receiving a
grant
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Incurred at own risk
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Funds not available until the budget period begins
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Not for cost over-runs
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Incurred more than 90 days
before budget period begins:
Requires prior
approval
OK
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Unexpended funds “forwarded”
without prior approval
For any allowable cost within the
approved scope
 Complete unfinished activities
New activities w/i scope – Program Staff
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Program Office may require a
written statement:
 How will unexpended funds be used?
 When: At time of funding decision
 New funds can be reduced
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No prior approval required for most
Exceptions listed in EDGAR:
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Transfer training funds
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Transfer / contracting-out work
Check OMB Cost Principles for other
exceptions
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Changes in project scope / objectives
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Changes in key personnel
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IHE & non-profit project directors
> absent for more than 3 months
> 25% reduction in time
Need for additional Federal funds
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Final Year:
 One-time extension up to
one year without prior
approval
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Grantees should carefully
consider time extension
needs
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Send written notice to Program Officer:
 No later than 10 days before project ends
 State reasons for extension
 Include revised expiration date
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Not just for using
unexpended funds
∵ No additional Federal
funds
∴ No change to scope
or objectives
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Pre-expiration
letter – 60 days
Requirements reminder
Financial obligation during
liquidation
Submit req’d reports
Final Performance
Financial Status – ED 524B
Fail
to adhere…
EDGAR
§ 74.71
§ 80.20
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Recipients responsible for proper
recordkeeping
Recipients responsible for proper retention
Recordkeeping should be sufficient to
establish an audit trail
When in doubt, keep it!
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Necessary and Reasonable
◦ Must be necessary for the performance or administration of
the grant
◦ Follow federal laws and the terms of the grant award
◦ Fair market prices
◦ Act with prudence under the circumstances
◦ No significant deviation from established prices
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Allowable Allocable
permitted or not specifically prohibited
◦ Charge expenses only according to the approved plan
◦ Can only charge in proportion to the value received by the
program
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 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
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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
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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.
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Executing Title III Procedures
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Institutions must use fiscal control and fund
accounting procedures that will ensure the
proper disbursement of, and accounting for,
federal funds.
Seven Requirements include:
1.
2.
3.
4.
5.
6.
7.
Financial Reporting
Accounting Records
Internal Controls
Budget Control
Allowable Cost
Source Documentation
Cash Management
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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.
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Common
Problems/Pitfalls
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Poor recordkeeping / management
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Unallowable costs / activities
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Failure to follow standards (policies and
procedures
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Lack of internal controls
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Failure to obtain prior approval
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Incorrect / no indirect cost rate
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Payroll distribution system (time and
attendance records inadequate)
Supplanting/maintenance of effort (using
grant funds when institutional funds should
have been used)
Services delivered to those other than the
intended recipients
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No written policies and procedures
Lack of controls over computer systems and
computer equipment
Inadequate financial management systems
(do not clearly show how grant funds used or
how the use of funds ties to the budget)
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Failure to maintain supporting documentation
Use of funds for unallowable purposes
Charging obligations from prior year to
current funding period
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Project ledger
 Current information for each
category
 Reconcile ledger w/ business office
 How often?
 By whom?
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Personnel
 Travel
 Equipment
 Supplies
 Consultants
 Other
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Personnel:
Internal Controls
Time & Attendance Certification
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Maintained for grant’s staff
Reflects total activity
Signed by staff & supervisor
Prepared monthly (w/i pay period)
Cost sharing/matching salaries/wages
supported
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Justify purpose
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Identify travelers
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Destination / travel dates
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Number & cost of trips
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 Approval required?
 Who approves?
 Advances provided?
 How are costs reconciled?
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Definitions consistent with institution’s
policy
Provide per unit cost
Maintain control
Lease or buy?
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Who:
 Initiates?
 Approves?
 Receives?
 Authorizes payment?
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 Written procurement procedures
 Cost and price analysis
 Procurement records
 Contracts administration
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Grantees must put emphasis on programmatic
activities and reduce personnel costs. Title III
funding is based on programmatic issues, and is
not a funding source for personnel
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Time & Attendance Certification
Maintained for grant’s staff
Reflects total activity
Signed by staff & supervisor
Prepared monthly (w/i pay period)
Cost sharing/matching salaries/wages supported
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What to look for:
 Justify
purpose
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Identify travelers
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Destination / travel dates
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Number & cost of trips
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Demonstrate institutional impact with
tangible outcomes
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 Definitions
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consistent with institution’s policy
Provide per unit cost
Maintain control
Lease or buy?
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