# Presentation: 840440

## Fiscal Policy Interpretation

- DHHS ACF Region 10

- Julianne Crevatin/Lee Gooding
- Seattle, Washington
- October 24-25, 2006

**Fiscal Policy Interpretation**

## Fiscal Issues

**New Grants Policy Statement**
**Lengthy Document**
**On the Web**
**Changes regarding Pre-Approval for Equipment**
**Audit Information**
**When due, who sends**
**When R10 needs a copy**
**Management Letter requirement**
**What to do when NEAR Center sends a letter**
**Final SF269, SF272, PMS Drawdowns**
**3-day rule**
**Can not use new funds to pay for old expenses**

## Budget Execution System
Track Actual Expenses against Budget
Project Actual Expenses to Year End to determine surplus or deficit
Take Action to Spend Surplus wisely or cut expenses to bring overspending back into line with authorized budget amounts
Includes both Grant Funds and Non-Federal Share
Board Responsibilities for Internal Review 
Recent IMs and PIs
Fundraising
Grantee Finance Person

**Track Actual Expenses against Budget**
**Project Actual Expenses to Year End to determine surplus or deficit**
**Take Action to Spend Surplus wisely or cut expenses to bring overspending back into line with authorized budget amounts**
**Includes both Grant Funds and Non-Federal Share**
**Board Responsibilities for Internal Review **
**Recent IMs and PIs**
**Fundraising**
**Grantee Finance Person**

## 	
	1304.50   Program governance.
	(g) Governing body responsibilities. 
	(2) Grantee and delegate agencies must ensure that appropriate internal controls are established and implemented to safeguard Federal funds in accordance with 45 CFR 1301.13. 

**	****1304.50   Program governance.**
**	****(g) *****Governing body responsibilities. ***
**	****(2) Grantee and delegate agencies must ensure that appropriate internal controls are established and implemented to safeguard Federal funds in accordance with 45 CFR 1301.13.**

**Internal Controls**

## Internal Controls (continued)

- 	**(b) Recipients' financial management systems shall provide for the following:**
**	****(3) Effective control over and accountability for all funds, property and other assets. Recipients shall adequately safeguard all such assets and assure they are used solely for authorized purposes.**

**Internal Controls (continued)**

## Internal Controls (continued)

**(b) The financial management systems of other grantees and sub grantees must meet the following standards:**
**(3) *****Internal control.***** Effective control and accountability must be maintained for all grant and sub grant cash, real and personal property, and other assets. Grantees and sub grantees must adequately safeguard all such property and must assure that it is used solely for authorized purposes.**
**“****First, unlike the requirement on organizational structure that we found sufficiently clear in First State, the requirement at issue here does not specify all of the actions a grantee must take to be in compliance. The performance standard in section 1304.50(g)(2) (under the area of "Program Governance") provides that the governing body has the responsibility "to ensure that appropriate internal controls are established and implemented to safeguard federal funds in accordance with 45 CFR 1301.13." (Emphasis added.) Neither this requirement nor the referenced section specifies what internal controls are "appropriate" for any particular grantee.  **_**NEON**_** DAB Decision No. 2002 (2005)**

**Internal Controls (continued)**

## 92.20   Standards for financial management systems. (cont’d.)
Report narratives should describe why a grantee's financial management system does not provide reasonable assurance that transactions are properly recorded and accounted for, reliable financial statements and Federal reports aren't or can't be prepared, accountability over grant assets is not maintained, there's demonstrated noncompliance with laws, regulations, and established fiscal procedures, or grant funds and assets are not used solely for authorized purposes. 
Internal controls findings must make clear what the grantee is or is not doing that makes it noncompliant with the internal controls performance standard.

**Report narratives should describe *****why***** a grantee's financial management system does not provide reasonable assurance that transactions are properly recorded and accounted for, reliable financial statements and Federal reports aren't or can't be prepared, accountability over grant assets is not maintained, there's demonstrated noncompliance with laws, regulations, and established fiscal procedures, or grant funds and assets are not used solely for authorized purposes. **
**Internal controls findings *****must *****make clear what the grantee is or is not doing that makes it noncompliant with the internal controls performance standard.**

**Internal Controls (continued)**