# Presentation: 761919

## Grants Administration Fiscal Year 2008 EMHE New Project Directors MeetingNovember 7, 2008 ~ Washington, D.C.

**Debbie Kalnasy**
- Budget Analyst
- Office of Safe and Drug-Free Schools
- debbie.kalnasy@ed.gov

## Topics to Be Covered

**Fiscal Management**
**Recordkeeping**
**Requesting Funds**
**Returning Funds**
**Managing Funds**
**Expanded Authorities**
**Freedom of Information Act (FOIA)**
**Audit Requirements**
**Compliance with Regulations**

## Fiscal Management

***“******A grantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds.” EDGAR §75.702***
**Accountability**
- Project Director is responsible for fiscal management of all grant funds even if other staff (finance office) may be assigned to perform a variety of financial functions.
- have access to G5 system to monitor drawdowns
- maintain fiscal records
- knowledgeable about procurement process

## Fiscal Management

**Contracts and consultants**
- Can be a large portion of your budget.  You need to ensure that:
- district procurement process was adhered to when awarding the contract
- contractor or consultant is meeting the terms and conditions of the contracts and that products or services are acceptable and timely
- contract and consultant are maintaining financial files to track expenditures
**NOTE**:  The Department has recently issued additional guidance on awarding contracts.  This information is available on the Department’s website and in the application package.  Make sure you review this guidance along with your business office, counsel and others in your district as appropriate.

## Recordkeeping

- Should have in place a viable recordkeeping system that includes copies of:
- Most recently approved budget
- Policies or procedures for overseeing and implementing the grant
- Any grant-related documents
- All performance reports submitted to ED
- Monitoring tools/forms
- Inventory of all equipment purchased or leased
- Evaluation plan – including timelines and measurement instruments
- Site visit reports, if applicable
***“******A grantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds.” EDGAR §75.702***

## Requesting Funds

- Minimize time between drawdown and disbursement  (EDGAR § 80.20-21)
**Two payment methods** – Advance or Reimbursement
**Advance Payment Request** – payees paid in advance to meet immediate needs.  Payees make requests on-line using G5.

## Requesting Funds

**Reimbursement Payment Method** – Department of Education enters approved payment requests into GAPS for payees.  Grantees must spend their own funds and submit appropriate documentation before receiving funds.  Reimbursement is used because:
- ED regulations were not followed
- Terms and conditions of previous awards were not met
- Program requirements were not met
- Problems identified with the organization’s financial management system
- Organization has been designated as “high risk” by ED
- An agreement to repay a debt due ED is in default
- Advance payment privileges have been abused

## Requesting Funds

- Payees should keep records of submitted payment requests, including amount and control number.  Use for audit purposes as well as to reconcile accounts.
- Avoid large available balances – 70% of project’s budget is available 90 days or less before the budget period ends
- Avoid excessive drawdowns – Department’s thresholds are:
- first quarter - 50% or more
- second quarter - 80% or more
- third quarter – 100%

## Returning Funds

- Payee must return fund to ED when any of the following occur:
- Payee has excess funds/cash on hand
- Payee owes ED for disallowed expenditures found during an audit or program review
- Payee has earned interest on its federal funds deposited in interest-bearing accounts
- Funds can be returned electronically or manually via check.

## Managing Funds

**Award periods – **grants will be in several different award periods during the life cycle of the grant.
_***Performance period***_*** – ****the period of time between the grant award begin date and the date during which the grantee satisfies the requirements of the grant award.*
_***Liquidation period***_*** – ****the 90-day period immediately following the performance period, during which time a grantee is to submit their final performance report and draw down funds for obligations incurred prior to their performance period end date.  No new obligations may occur during this time.*

## Managing Funds

_***Suspension period***_*** – ****the 6-month period that follows the liquidation period to complete grant closeout activities.  No new payment actions can occur without the approval of the ED Program Contact/Officer.*
_***Manual Closeout***_*** – ****the 6-month period that follows the suspension period.  This status is for those grantees that have either unexpended funds or not submitted a required report preventing the grant from closing.*
_***Closed***_*** – ****a grant in the closed status indicates that the performance period has ended, all required reports received, and the remaining balance is zero so that the grant files can be transferred to Records Center.*

## Expanded Authorities

- Background
- In 1994 the Department revised parts of EDGAR to allow grantees to undertake certain types of administrative actions with discretionary grants without prior approval of the ED Program Contact/Officer.
- Became effective July 28, 1997 and specifically permits:  a one-time no-cost extension, budget transfers, carry-over of funds, and reimbursement   of pre-award costs.

## Expanded Authorities

**No-cost extensions (NCE) **- extend the grant project period for up to 12 months to finish activities intended to be completed during the initial performance period, but have not been finished due to mitigating circumstances.  A NCE cannot:
- require additional Federal funds
- change the scope or objectives of the project
- be used merely for the purpose of exhausting unexpended funds
- be contrary to Federal statute, regulation, or grant conditions

## Expanded Authorities

- A grantee must notify the ED Program Contact/Officer at least 10 days before the end of the project period, with supporting reasons for the extension and request that an NCE be processed
- ED Program Contact/Officer will review and respond with follow-up questions as needed
- Process the NCE in the Grants Administration Payment System and generate a revised Grant Award Notification

## Expanded Authorities

**Budget transfers - **Make transfers of funds among budget categories without prior approval from your ED Program Contact/Officer, unless it
- Changes the project scope or objectives
- Changes key personnel
- Results in the absence for more than 3 months (or 25% reduction in time) of approved project director
- Requires the need for additional Federal funds
- Transfers funds for training to other budget categories
- Transfers funds to contracting from other budget categories
- You should notify your ED Program Contact/Officer in writing of the transfer – the amount of funds, involved budget categories, and purpose

## Expanded Authorities

**Pre-award costs **– allows the grantee to be reimbursed for allowable costs that occurred up to 90 days prior to the start of the budget/performance period.
- Pre-awards costs that would occur during a period of longer than 90 days before the budget/performance period begins requires ED approval.  The following considerations apply:
- Applicants should have a reasonable expectation of receiving a grant
- Expenditures are incurred at the applicant’s own risk
- Funds are not available until the budget period begins
- Funds cannot be used to pay for cost overruns from the previous year

## Freedom of Information Act (FOIA)

- The Freedom of Information Act (FOIA), 5 U.S.C. § 552, was enacted in 1966 and generally provides that:
- Any person has the right to request access to Federal agency records or information.
- All agencies of the U.S. Government are required to disclose records upon receiving a written request for them.
- There are some exemptions that protect certain records from disclosure.

## Freedom of Information Act (FOIA)

**Processing a FOIA**
- Project Director is contacted and provided 10 days to identify any information that the grantee would like redacted
- Requested documents, including redacted information, is forwarded to ED’s FOIA Office
- Documents forwarded to the requestor (fee may be involved)

## Audit Requirements

**Two types of audits **
- Grantee-Initiated
- Office of Inspector General (OIG) Audit
**Grantee-Initiated **- any grantee that expends $500,000 or more annually of Federal funds must have a non-Federal audit performed yearly and submit the report to the Federal Audit Clearinghouse.
- Use an independent auditor
- Comply with OMB Circular A-133
**Important fact:  **EMHE – 84.184T is not included in the Audit Compliance Supplement -- OMB Circular A-133, auditors should use Part 7- Guidance for Auditing Programs Not Included in Compliance Supplement

## Audit Requirements

**OIG Audit**
- Complaint
- Not every grant is audited
- Office of Chief Financial Officer (OCFO) reviews audit reports and OIG audit is triggered by serious audit findings identified by OCFO

## Audit Requirements

- _Recommended documents to provide to your auditor(s)_
- OMB Circular A-133
- _[http://www.whitehouse.gov/omb/circulars/a133/a133.html](http://www.whitehouse.gov/omb/circulars/a133/a133.html)_
- OMB Circular A-87 (Cost Principles) _[http://www.whitehouse.gov/omb/circulars/a087/a87_2004.html](http://www.whitehouse.gov/omb/circulars/a087/a87_2004.html)_
- EMHE FY 2008 Program Announcement/Application Package
- Grant Award Notifications and Attachments (all versions)
- Post Award Conference Call Memo
- Grantee’s original EMHE application
- Approved Budget (from your post award conference call memo)
- Performance Reports
- Correspondence (memos, emails, letters) regarding program changes and expenditures

## Audit Requirements

**Some common audit findings:**
- Poor recordkeeping
- Unallowable costs/activities
- Missing time and effort reports for staff
- Failure to follow procurement standards
- Lack of internal controls
- Failure to obtain prior approval for expending or encumbering funds
- Incorrect calculation of indirect cost rate
- Excessive or infrequent draw down/poor cash management

## Compliance with Regulations

- The following should be consulted in the management of the EMHE grant:
- EDGAR – Education Department General Administrative Regulations (_[www.ed.gov/policy/fund/reg/edgarReg/edgar.html](http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html)__)_
- OMB Circulars (cost principles, administrative requirements, and audit requirements)
- (_[www.whitehouse.gov/omb/circulars](http://www.whitehouse.gov/omb/circulars)__)_
- EMHE grant announcement/application package
- Written guidance provided by your ED Program Contact/Officer