# Presentation: 224751

## How to Avoid Audit Problems: Matching Share and Cost PrinciplesNational Telecommunications and Information Administration : Public Safety Interoperable Communications Grants 

**John Bunting, JD CPA CFE****Regional Inspector General for Audits****Denver Regional Office of Audits **
**Office of Inspector General****U.S. Department of Commerce**

- NTIA PSIC Public Meeting

- June 3, 2007

**Matching Share **
**	****Digital Television Transition and ****	****	****	****Public Safety Act of 2005, section 3006**
**	****Uniform Administrative Requirements            15 Code of Federal Regulations (CFR) Part 24**
**	****Department of Commerce **
**	****	****Standard Terms and Conditions**
**Cost Principles for State, Local, and Indian Tribal Governments: Office of Management and Budget Circular No. A-87**

- NTIA PSIC Public Meeting

- June 3, 2007

## Statute requires that non-Federal sources be used to provide not less than 20 percent of the cost of acquiring and deploying the interoperable communications systems.
Statute does not require a non-Federal match for interoperable communications training.

**Statute does not require a non-Federal match for interoperable communications training.**

**NTIA PSIC Grant Match Requirements**

- NTIA PSIC Public Meeting

- June 3, 2007

## NTIA PSIC Grant Match Requirements

**Uniform Administrative Requirements (15 CFR 24) provide for matching or cost sharing requirement including:**
**Allowable costs incurred by grantee or subgrantee. **
**The value of third party in-kind contributions applicable to the period to which the cost sharing or matching requirements apply. **
**The same costs or contributions can only be used as match for one federal financial assistance award.**

- NTIA PSIC Public Meeting

- June 3, 2007

**Notes:**
Examples of the primary government being able to impose its will.
  Remove appointed members of the component unit’s governing board.
. Has authority to modify or approve the component unit’s budget.
  Has authority to approve or modify component unit’s fees.
  Can veto, overrule, or modify decisions of the component unit’s governing board.
  Can appoint, hire, or dismiss component unit managers responsible for day-to-day operations.

Examples of providing specific financial benefits to, or imposing specific financial burdens on the primary government.

Entitled to component unit’s financial resources.
 Legally obligated for component unit’s deficits.
 Legally obligated for component unit’s debt. 

## NTIA PSIC Grant Match Requirements

**Department of Commerce Standard Terms and Conditions provide:**
**the non-Federal share, whether cash or in-kind, is expected to be paid out at the same general rate as the Federal share.**
**if actual allowable costs are less than the total approved budget, the approved Federal and non-Federal cost share ratio are applied to the actual allowable cost.**
**if the actual allowable costs are greater, the Federal share can not exceed the total Federal amount of the award. **

- NTIA PSIC Public Meeting

- June 3, 2007

**Audit Issues With Matching Share**
**   ****Documentation**
**   ****Valuation**
**   ****Pass Through Provisions to Subgrantees**
**   ****Monitoring of Subgrantees**

- NTIA PSIC Public Meeting

- June 3, 2007

## Best Practices for Preparing Proposals:
Get your Chief Financial Officer, Certified Public Accountant, or other governmental financial professional as part of the team preparing the proposal.
Discuss available options for non-Federal cash and in-kind match before preparing your proposal.
Identify who is going to approve payment for project costs and prepare your financial status reports.

**Get your Chief Financial Officer, Certified Public Accountant, or other governmental financial professional as part of the team preparing the proposal.**
**Discuss available options for non-Federal cash and in-kind match before preparing your proposal.**
**Identify who is going to approve payment for project costs and prepare your financial status reports.**

- NTIA PSIC Public Meeting

- June 3, 2007

## Three Basic Guidelines
Allowable Costs: necessary, consistent treatment, not used as match for any other federal award.
Reasonable Costs: ordinary and necessary, market prices, prudent person, established practices.
Allocable Costs: relative benefits received, all activities share cost, cost allocation plan.

**Allowable Costs: necessary, consistent treatment, not used as match for any other federal award.**
**Reasonable Costs: ordinary and necessary, market prices, prudent person, established practices.**
**Allocable Costs: relative benefits received, all activities share cost, cost allocation plan.**

**Cost Principles:****	****OMB Circular No. A-87, ****	****	****	****	****Attachment A, Part C**

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- June 3, 2007

## 43 Cost Categories from Advertising Costs to Travel Costs 
Apply to direct and indirect costs: 
	Federal and non-Federal (cash or in-kind)
Pass Through to subgrantees

**Apply to direct and indirect costs: **
**	****Federal and non-Federal (cash or in-kind)**
**Pass Through to subgrantees**

**Cost Principles: ****	****OMB Circular No.A-87, ****	****	****	****	****Attachment B**

- NTIA PSIC Public Meeting

- June 3, 2007

## Best Practices for Accounting for Grant Costs

**  ****Costs, Federal and non-Federal, are verifiable ****	****from ****	****accounting and financial records.**
**  ****Costs, Federal and non-Federal, are clearly identified ****	****using project cost accounting.**
**  ****Costs are within the approved budget.**
**  ****Costs, Federal and non-Federal, are not used for other ****	****Federal awards or non-Federal purposes.**

- NTIA PSIC Public Meeting

- June 3, 2007

##     Best Practices for Procurement of 	 Interoperable Communications Equipment 

** ****Brief your Contract or Procurement Department about your planned purchase of interoperable communications equipment and the need for competitive procurement.**
** ****Get quotes from vendors of interoperable communications equipment before submitting your proposal.**
** ****Consider a single statewide or regional procurement. **

- NTIA PSIC Public Meeting

- June 3, 2007

## Helpful Website

**Office of Management and Budget Circulars including**
**	****A-87 Cost Principles for State, Local, and ****	****Indian ****	****Tribal Governments **
**	****www.whitehouse.gov/omb/circulars/index.html**

- NTIA PSIC Public Meeting

- June 3, 2007