Seminar on Financial Management Office of Justice Programs Office of the Chief Financial Officer
Financial Management Systems All recipients are required to: Establish/maintain auditable accounting records and Accurately account for funds awarded. Records shall include Federal, matching, and program income.
Financial Management Systems States and locals shall expend/account for grant funds per Federal or State laws & procedures for their funds. (whichever are more restrictive)
Financial Management Systems Accounting and Internal Controls: Proper stewardship of Federal resources is an essential responsibility of the grantee organization. Grantees must ensure that Federal programs and resources are used efficiently and effectively to achieve desired objectives.
Financial Management Systems Internal Controls and Segregation of Duties: Strong internal controls ensure effective and efficient operations, reliable financial reporting, and compliance with applicable laws and regulations. Proper segregation of duties is a critical element of adequate internal control.
Financial Management Systems Adequate Accounting System: Grantee must maintain an adequate system of accounting and internal controls and ensure that an adequate system exists for each of its subrecipients.
Financial Management Systems In summary, a Financial Management System must be able to record and report on the: • Receipt; • Obligation; and • Expenditures of grant funds
ORDER OF PRECEDENCE Authorizing Legislation - Congress 2) Federal Agency Regulation - Code of Federal Regulation (CFR) 3) Terms and Conditions of the Award - Grant Award Document 4) Federal Agency Policies - OJP Financial Guide
Code of Federal Regulations The Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government.
Code of Federal Regulations Department of Justice 28 CFR 66 - Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments28 CFR 70 - Uniform Administrative Requirements for Grants and Agreements (including subawards) with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations
DOJ OMB APPLIES TO State & Local Units of Government 28 CFR 66 OMB A-102 Administrative Requirements: OMB A-110 Non-Profit Organizations 28 CFR 70 (2 CFR, Part 215) Educational Institutions OMB A-21 (2 CFR, Part 220) Cost Principles: Included as reference in CFR State & Local Units of Government OMB A-87 (2 CFR, Part 225) Non-Profit Organizations OMB A-122 (2 CFR, Part 230) Educational Institutions Audit Requirements: Included as reference in CFR OMB A-133 Non-Profit Organizations State & Local Units of Government
CIRCULARS Directives from Office of Management and Budget (OMB) Implemented by policy from each Federal agency Agencies policy can be more restrictive OMB CIRCULARS
Code of Federal Regulations REQUIRES THAT A COST BE: Allowable Necessary to the performance of a project Reasonable Allocable to the project and consistently treated Major Provisions
Code of Federal Regulations REQUIRES THAT A COST BE: (continued) Non-profitable Claimed against only one award, and Permissible under State & Federal lawsand regulations Major Provisions
Code of Federal Regulations Major Provisions CLASSIFICATION OF COSTS
CLASSIFICATION OF COSTS DIRECT COSTS: Costs identified specifically with an activity
CLASSIFICATION OF COSTS DIRECT COSTS, generally include: • Salaries and Wages (including holidays, sick leave, etc.) - Direct Labor Costs • Other employee fringe benefits allocable to direct labor employees
CLASSIFICATION OF COSTS DIRECT COSTS, generally include: Consultant services contracted to accomplish specific project objectives Travel of direct labor employees Material/supplies purchased directly for use on a specific project
CLASSIFICATION OF COSTS INDIRECT COSTS: Costs that are not readily identifiable with a particular grant or contract
CASH versus IN-KIND MATCH
Matching funds are generally not required for Recovery Act awards. However, if match was included in the approved budget, this amount is subject to audit and must be tracked separately. MATCH
FINANCIAL MANAGEMENT SEMINAR SUPPLANTING
To deliberately reduce State or local funds because of the existence of Federal funds. Example: State funds are appropriated for a stated purpose and Federal funds are awarded for that same purpose. The State replaces its State funds with Federal funds, thereby reducing the total amount available for the stated purpose. SUPPLANTING
FINANCIAL MANAGEMENT SEMINAR Application Review OMB has implemented a grant tracking system through Dun & Bradstreet (D&B) known as Data Universal Numbering System (DUNS). All grant applicants (excluding individuals) must have a DUNS number when applying for initial or supplemental awards. Organizations may receive a DUNS number at no cost by calling the toll-free DUNS number request line at 1-888-814-1435 or on-line at https://eupdate.dnb.com/requestoptions.asp
FINANCIAL MANAGEMENT SEMINAR Both current and potential grant applicants are required to register in Central Contractor Registration (CCR) Grant applicants are required to complete a one-time registration Grant applicants must update or renew their registration at least once per year to maintain active status Registration does not guarantee a federal contract or assistance Application Review
FINANCIAL MANAGEMENT SEMINAR History with OJP (if any) Financial Capability Questionnaire (Non-profits) Grantee Audits Applicant Federal Debt Accuracy of Taxpayer ID Financial Integrity
FINANCIAL MANAGEMENT SEMINAR High Risk Grantees • Have not conformed to the terms and conditions of previous awards • Are otherwise not responsible • Have open Single Audit or Office of Inspector General (OIG) audit report recommendations • Have significant non-compliance issues
FINANCIAL MANAGEMENT SEMINAR Award Notification and Acceptance
The ANA module deployed through the Grants Management System (GMS) will electronically issue an award instead of mailing it. The grant recipient will receive an e-mail on the award date instructing them to utilize GMS to accept their award. Award Notification and Acceptance (ANA)
Grantee has 45 days from the date of the award to accept the award If not accepted within 45 days, the obligation may be terminated without further cause Award Notification and Acceptance (ANA)
To accept the award the recipient should: Recipient must go into GMS and designate a Financial Point of Contact (FPOC) in order to print the award documents. Review and print their award in GMS. Have authorizing official accept and sign the award and initial each page of special conditions. Fax the complete award package to OCFO at (toll free) 1-866- 388-3055 or (local) 202-354-4081, or email the pdf file to firstname.lastname@example.org. Electronic notification will allow grantees to receive the award and implement their programs sooner. Award Notification and Acceptance (ANA)
FINANCIAL MANAGEMENT SEMINAR Conditions of Award
1. The recipient agrees to comply with the financial and administrative requirements set forth in the current edition of OJP's "Financial Guide." Conditions of Award The United States Department of Justice Office of Justice Programs Office if the Comptroller Financial Guide http://www.ojp.usdoj.gov/financialguide
2. The recipient agrees to comply with the organizational audit requirements of OMB Circular A-133, Audits of State, Local Governments and Non-Profit Organizations, as further described in OJP's Financial Guide, Chapter 19. Note: There is a different special condition for individuals and for-profit commercial organizations. Conditions of Award
3. The recipient acknowledges that failure to submit an acceptable Equal Employment Opportunity Plan (if recipient is required to submit one pursuant to 28 CFR Section 42.302), that is approved by the Office of Civil Rights, is a violation of its Certified Assurance and may result in funds from the award being frozen, until such time as the recipient is in compliance. Conditions of Award
New Changes to Anti-Lobbying Act: 4. Recipient understands and agrees that it cannot use any federal funds, either directly or indirectly, in support of the enactment, repeal, modification or adoption of any law, regulation or policy, at any level of government, without the express prior written approval of OJP. Conditions of Award
5. The recipient must promptly refer to DOJ/OIG any credible evidence that a principal, employee, agent, contractor, subgrantee, subcontractor, or other person has either 1) submitted a false claim for grant funds under the False Claims Act; or 2) committed a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity, or similar misconduct involving grant funds. This condition also applies to any subrecipient. Conditions of Award
Potential fraud, waste, abuse, or misconduct should be reported to the OIG by – Mail: Office of the Inspector General U.S. Department of Justice Investigations Division 950 Pennsylvania Avenue, N.W. Washington, DC 20530 E-mail: email@example.com Conditions of Award
Hotline: (800) 869-4499 (contact information in English and Spanish) Hotline fax: (202) 616-9881 Additional information is available from the DOJ OIG website at www.usdoj.gov/oig Conditions of Award
The Standard Assurances form has been updated to incorporate compliance requirements codified under 28 CFR Part 38 regarding the eligibility for religious organizations to receive grant funds and the prohibition from discrimination, among other provisions. FINANCIAL MANAGEMENT SEMINAR New Language to the Standard Assurances
FINANCIAL MANAGEMENT SEMINAR Availability of Funds
Obligation Period (Grantee’s books) EX: Award period = 10/1/07 - 9/30/09 Award date = 12/1/07 (Federal books) Expenditure Period EX: 10/1/07 - 12/29/09 Liquidation Period (90 days after end of award) Ex: 10/01/09 - 12/29/09 AVAILABILITY OF FUNDS Funds will be frozen 90 days after the end of the award.
Costs incurred prior to the project start date Written prior approval AVAILABILITY OF FUNDS Pre-agreement Costs
PROGRAM INCOME FINANCIAL MANAGEMENT SEMINAR
Gross income earned by the recipient during the funding period as a direct result of the award. PROGRAM INCOME
Spend prior to requesting additional grant funds Supplement Project with $$ Reduce Project with $$ Send Back $$ PROGRAM INCOME