21 st century community learning centers program

Dr. John D. Barge, State School Superintendent“Making Education Work for All Georgians”www.gadoe.org

21st CENTURY COMMUNITY LEARNING CENTERS

PROGRAM

Tehsin Akram, Budget Analyst 2August 8, 2012

Federal Grants Financial Management &Cost Principles and Administrative

Requirements

FY13


Federal Grants Financial Management Cost Principles and

Administrative RequirementsSpecific topics in understanding of:

Federal Grant Financial Management-21st CCLC Use of Funds Basic Cost Principles – determining allowability Selected Cost Principles Property/Inventory Controls Supplement not Supplant

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Fundamental Federal Grant Management Process

All are inter-related:


Use of Funds 21st CCLC program funds must be used to supplement and

not supplant (take the place) of other Federal, State, local, or non-Federal funds

21st CCLC funds must be used to provide supplemental service to meet the needs of children from low income and low performing schools

21st CCLC funds must only be used for authorized out-of-school activities to meet the needs of participating students and their families

Charges to the grant must be allowable under the 21st CCLC program

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Cost Eligibility OMB has issued Grants Management Guidance in three

areas:

Cost Principles Administrative Requirements Audit

In addition:GEPAEDGAR (including CFR 34 Part 80)


Cost Principles

Which Circular do I follow?

OMB A-87 – Cost principles for State, Local and Indian Tribal Governments (includes school districts/LEAs)

OMB A-21 – Educational Institutions (includes colleges, universities)

OMB A-122 – Non-Profit

http://www.whitehouse.gov/omb/grants_circulars/

http://www.whitehouse.gov/omb/grants_circulars/


Cost Principles - Basic Guidelines To Determine Allowability

Necessary and Reasonable

Be Allocable to Federal Awards

Be Authorized or Not Prohibited Under State or Local Laws or Regulations

Conform to Any Limitations or Exclusions Set Forth in the Federal Cost Principles, Federal Laws, Terms and Conditions of the Federal Award


Cost Principles - Basic Guidelines To Determine Allowability continued…

Be Consistent with Policies, Regulations, and Procedures That Apply Uniformly to Both Federal Awards and Other Activities of the Governmental Unit

Be Accorded Consistent Treatment

Be Determined in Accordance with Generally Accepted Accounting Principles (GAAP)


Cost Principles-Basic Guidelines To Determine Allowability continued… Not Be Included As a Cost or Used to Meet Cost

Sharing or Matching Requirements of Any Other Federal Award

Be Adequately Documented


What do These Guidelines Mean?

Necessary and Reasonable– Reasonable

• A cost, in its nature and amount does not exceed that which would be incurred by a prudent person under the circumstances

• Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the governmental unit or the performance of the Federal Award

• The restraints or requirements imposed by such factors as sound business practices, arms-length bargaining, Federal, State, and other laws and regulations and Federal Award Terms and Conditions



Necessary and Reasonable– Reasonable (Cont’d…)

• Market prices for comparable goods or services

• Whether the individuals concerned acted with prudence in the circumstances, considering their responsibilities to the governmental unit, its employees, the public at large, and the Federal government

• Significant deviations from the established practices of the governmental unit which may unjustifiably increase the Federal award’s cost

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Necessary and Reasonable– Necessary

• The cost claimed for a service or item is directly related to the performance objective of the grant

• Cost claimed is consistent with the expenditure category of the grant award

• The type of cost is incurred by other grantees



Necessary and Reasonable– Necessary (Cont’d…)

Questions to ask for determining “necessary”• Is anyone going to question this and why?

• Did I really need this (other cost effective alternatives)?

• Can I support (document) the basis for my decision?

• Have I considered whether there are any risks?

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Costs Must Be Allocable– Direct Costs

• Cost is allocable to a particular cost objective if the goods or services involved are directly related, chargeable or assignable to such cost objective in accordance with relative benefits

• Can only charge to the grant in proportion (share) to the value received by the program



Costs Must Be Allocable– Direct Costs - examples

• Compensation of employees for the time devoted and identified specifically to the performance of the award

• Equipment and other approved capital expenditures

• Travel expenses incurred specifically to carry out the award

Case Study: An Elementary School purchased 10 laptops for use in its afterschool program. The laptops were used half the time in the afterschool grant program and half the time by students in the regular school during the day. The afterschool grant was charged the total cost of $10,000 for all 10 laptops. Allowable or unallowable?



• Costs Must be Authorized and Not Prohibited Under State and/or Local Law

• Authorized – OMB means the grantee has received specific authority (typically in writing) in the form of an Approved Project Award Notification, and in Accordance with Approved Project Budget



Costs Must be Consistently Administered

• A Grantee must consistently administer all of its Federal Awards using the same Accounting Policies and Procedures

• Consistent with GAAP



Costs Must be Accorded Consistent Treatment

• A cost considered as an indirect expense under one Federal award must be considered as an Indirect Cost under all awards

• Must follow uniform policies that apply equally to Federal and non-Federal activities



Costs Must be Adequately Documented– Proof that:• Grant receipts were properly applied

• Grant expenditures actually occurred

• Expenditures are eligible, allowable, and authorized

• Expenditures benefited the grant

• Transactions are accurately and timely documented



Costs Must be Adequately Documented

– All records pertinent to the award (e.g. award and close-out periods)• Financial• Programmatic• Other Awards


Selected Items of Cost

21st CCLC Program Use of Funds– Funds may be used for program implementation, as well

as operation expenses such as:• Personnel and personnel benefits

• Staff development

• Consultants, subcontractors and evaluators

• Classroom equipment, materials and supplies



Some Unallowable costs specified by OMB cost principles:• Alcoholic beverages• Bad debts• Donations (by recipient)• Entertainment costs• Fines and penalties (exceptions)• Fundraising and investment management costs• Goods or services for personal use• Idle facilities (exceptions)• Lobbying• Selling and marketing costs



OMB A-87―Personnel and personnel benefits:

• “Compensation for personnel services includes all remuneration, paid currently or accrued, for services rendered during the period of performance under Federal Awards, including but not necessarily limited to wages, salaries, and fringe benefits.”

• “Cost of fringe benefits are allowable to the extent that the benefits are reasonable and are required by law, governmental-unit, employee agreement, or an established policy of the governmental unit.”




• “Cost of fringe benefits in the form of employer contributions or expenses:

Social Security, employee life, health, unemployment, and worker’s compensation insurance (except as indicated in section 22 Insurance and Indemnification), pension plan costs and other similar benefits are allowable provided such benefits are granted under established written policies




Support for salaries and wages

*Proper time distribution records* Based upon approved and documented payrolls


Who must maintain time distribution records?

All employees who are paid from Federal funds, or whose salaries are used to match federal funds, are required to document their time and effort

But Why?It serves as a “receipt” for payroll expenditures using Federal

funds



OMB A-87―There are two types of participating employees:

• Employees who work solely on a single Federal cost objective – SEMI-ANNUAL CERTIFICATIONS

• Employees who work on more than one (multiple) cost objective (split funded) – monthly PERSONNEL ACTIVITY REPORT (PAR)

• Non-profit organizations: PARs (whether single or multiple cost objectives)

Note: Please refer to the “21st CCLC Time and Effort Reporting July 2012” presentation for more details (available on the training CD)


Single Cost Objective

• Semi-Annual Certifications must be prepared and signed by the employee or the supervisor who has first hand knowledge of the work performed

100% from a single funding source 100% with a single type of activity 100% of time beyond the full-time day on a single activity (e.g., 4

hours afterschool in the 21st CCLC program)


Multiple Cost Objective

Employee works on – multiple activities/cost objectives

1. Personnel Activity Report (PAR) – monthly to coincide with 1 or more pay periods (unless a substitute system has been approved by cognizant agency)

2. Reflect after-the-fact distribution of the actual activity3. Account for the total activity for which employee is compensated4. Signed by employee

Must contain:An “effort statement”Number of hours workedTime worked on all cost objectivesThe specific Federal cost objective (not just “Federal”)



OMB A-87―Equipment, materials, and supplies

For personal use – unallowable Necessary to carry out a Federal award – allowable –

direct cost Charged at actual prices, net of applicable credits Donated to Federal program – without charge to Federal

program



OMB A-87 & EDGAR―Equipment, materials, and supplies

Equipment means – article of nonexpendable, tangible personal property having a useful life of more than ONE year AND AN ACQUISITION COST of $5,000 or more per unit. However, consistent with the recipient policy, lower limits may be established.

Please note that subgrantees must receive written approval from GaDOE to purchase any item over $5,000 per unit.


Property/Inventory Controls for Equipment Acquired with Federal

Funds OMB - Uniform Administrative Requirements for Grants:

― Equipment records shall be maintained accurately and include:

Description of the equipment Manufacturer’s serial number, model number and

identification number Source of equipment, including the award number Whether title vests in the recipient or Federal Government Acquisition date (or date received, if donated) and cost Percentage of Federal participation in the cost of equipment Location and condition of the equipment and date

information reported Unit acquisition cost


Property/Inventory Controls for Equipment Acquired with Federal Funds

Equipment records shall be maintained accurately and include:

A physical inventory of the property must be taken and the results reconciled with the property records

How often? – at least once every year A control system must be developed to ensure adequate

safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated

Adequate maintenance procedures must be developed to keep the property in good condition

EDGAR 34 CFR 80.32


Disposing of EquipmentHow do we dispose of 21st CCLC equipment? Federal regulations, 34 CFR 80.32 and the Financial

Management for Georgia Local Units of Administration handbook provide clear guidance

The equipment eligible for disposition must: Not be needed in any 21st CCLC activity Not be needed in any other Federal program Not be needed further for the purpose for which it was

purchased

Note: it would not be appropriate to purchase similar equipment in subsequent years

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Selected 21st CCLC Compliance Requirement – Supplement not Supplant

21st CCLC program funds must be used to supplement and not supplant (take the place) of other Federal, State, local, or non-Federal funds

What does this mean?

• Here is a simple thought! Think of local funds, (or other funds that are mandated or required under some authority) as the cake, and 21st CCLC funds as the “icing” on the cake!

• The icing (21st CCLC) is supplementing, and not taking the place of the cake (Federal, state, local, or non-Federal funds), but simply adding something to improve it!

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Selected 21st CCLC Compliance Requirement Supplement-not-Supplant

How do I determine if this may be a supplanting issue?Determine whether your agency provided the goods or services with non-Federal funds in the prior yearDetermine whether the services were required to be made available under other Federal, state or local laws Ascertain if the total level of services applicable to the requirement will increase in proportion to the level of Federal contribution (and not used to cover budget deficits)

Maintain sufficient relevant documentation to demonstrate that the services would not have been provided if the 21st CCLC funds were not available, including supporting documentation such as legislative actions, budget histories

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Resources

EDGAR - Education Department General Administrative Regulations http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html

OMB Circular A-21 (Educational Institutions) http://www.whitehouse.gov/omb/assets/omb/circulars/a021/a21_2004.pdf

OMB Circular A-87 (State, Local, and Indian Tribal Governments http://www.whitehouse.gov/omb/circulars_a087_2004/

OMB Circular A-122 (Non-Profit Organizations) http://www.whitehouse.gov/omb/assets/omb/circulars/a122/a122_2004.pdf

GEPA - General Education Provisions Act http://www4.law.cornell.edu/uscode/html/uscode20/usc_sup_01_20_10_31.html

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http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html

http://www.whitehouse.gov/omb/assets/omb/circulars/a021/a21_2004.pdf

http://www.whitehouse.gov/omb/circulars_a087_2004/

http://www.whitehouse.gov/omb/assets/omb/circulars/a122/a122_2004.pdf

http://www4.law.cornell.edu/uscode/html/uscode20/usc_sup_01_20_10_31.html

http://www4.law.cornell.edu/uscode/html/uscode20/usc_sup_01_20_10_31.html


Questions?

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21 st century community learning centers program

Documents