Discretionary Grants Administration United States of America Department of Education Agenda Overview of ED financial policies

Managing budget

Avoiding audit problems

Identifying key resources such as Grant making at ED www.ed.gov/fund/grant/about/grantmaking/index.html Transition Year Closely read the newly issued GANs and the attached terms and conditions Follow existing guidance for FY 15 Contact your ED program officer with questions ED will adopt the Uniform Guidance (2 CFR Part 200) on December 26, 2014 All awards made after 12/26/2014 will adhere to the updated Uniform Guidance Tools of the Trade Legislation Regulations EDGAR Cost Principles (2 CFR/OMB Circulars) Grant Award Notification (GAN) Your approved Application Cost Principles 2 CFR Part 220 for Educational Institutions (see OMB Circular A- 21)

2 CFR Part 225—for State, Local and Indian Tribal Governments (see OMB Circular A-87) 2 CFR Part 230—for Non-profits (see OMB Circular A-122) Accountability Government Performance and Results Modernization Act of 2010 Initially passed in 1993 Ties federal funding to results

Greater accountability

Project objectives and activities must reflect GPRA indicators Monetary road Map Clear, concise, and detailed

Consistent with institutional policy

Meets federal requirements

Aligned with GPRA

Revised within scope of project

Achieve project goals Administration / Management Lines of authority

As stated in approved package

Key personnel changes need ED approval

Staff made aware of project’s… purpose, duration, objectives Grantee Responsibilities Project’s success and financial accountability Submit annual & final performance reports Valid & reliable data

Report on GPRA standards & indicators EDGAR §§74.51 & 80.40 Budget Management Financial Management Systems must do the following…

• Provide for accurate, current, and complete disclosure of results regarding the use of

project funds

• Document both the federal and non-federal funds used to carry out the project and track

Partners

• Maintain effective internal controls

• Answer the following budgetary questions:

• Fiscal systems must allow for the proper tracking of expenditures for itself, sub-recipients, and contractors to ensure the proper use of funds Budget Items Allowable – permitted or not specifically prohibited Allocable – necessary for project’s success Reasonable – costs incurred by a “prudent” person Cost Sharing/Matching Definition: The portion of project/program costs not borne by the Federal government Terms are used interchangeably and refer to either: Statutorily-specified percentage of project/program costs that must be provided Voluntary contribution

Grantee must honor the commitment

Fully documented Examples include: equipment, facilities, cash, staff time Must be treated like Federal dollars See EDGAR §74.23 and §80.24 Cost-Share/Match formula X/Y=Z Z-X= Cost Share/ Match Where X= Federal award/Federal Dollars Y= Percent of Federal Dollars to total If Cost Share/ Match = 10%; Y=0.9 If Cost Share/ Match = 20%; Y=0.8 If Cost Share/ Match = 21.3%; Y=.787 Z= Total Project Budget Audits Common Audit Exceptions Missing time and effort reports

Poor record-keeping

Failure to obtain prior approval

Incorrect indirect cost rates

Unallowable costs

Lack of internal controls Audit Requirements See Subpart F of 2 CFR Part 200 Supersedes A-133 Effective 12/26/2014 the single audit threshold requirement increases from $500,00 to $750,000 expended annually OMB provides FAQs and other training to help with your questions Grant Monitoring Drawdown Policy Request funds for immediate needs Minimize time between requests & expenditures (3 days) Draws commensurate with approved scope ED’s Drawdown Policy Draw down only enough cash to meet grant’s immediate need Minimize time between drawdown and payout of funds Rate of drawdown must be commensurate with approved scope of work and milestones Grantee Flexibility Goals:

Increase flexibility

Increase accountability

Reduce paperwork burden

Develop relationships Promote successful project outcomes Prior Approval Changes in project scope or objectives Changes in key personnel IHE & non-profit project directors absent for more than 3 months 25% reduction in time Need for additional Federal funds Time Extension Final year… One-time extension for up to one year without prior approval Grantees should carefully consider time extension needs Written notice to Program Officer No later than 10 days before project ends

State reasons for extension

Include revised expiration date Time Extension Restrictions Not just for using unexpended funds No additional Federal Funds No change to scope or objectives Ed concerns Large amounts of unobligated funds at the end of the budget period Excessive or infrequent drawdown of funds Project goals not met What Agencies Look For Annual substantial progress met GPRA indicators met Recordkeeping & fiscal accountability Questions