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Financial Management

Financial Management. Subgrantees shall use fiscal control and fund accounting procedures to insure proper distribution of and accounting for Federal funds. That means you as a subgrantee must be able to:. Spend your 21 st Century Grant funds correctly and Prove that you did

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Financial Management

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  1. Financial Management • Subgrantees shall use fiscal control and fund accounting procedures to insure proper distribution of and accounting for Federal funds.

  2. That means you as a subgrantee must be able to: • Spend your 21st Century Grant funds correctly and • Prove that you did • Section 76.702 of EDGAR

  3. EDGAR? Who is he and what does he have to do with my grant?

  4. EDGAREducation Department General Administrative Regulations • 80.20 Local Education Agencies • 74.21 Systems of Higher Education http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html

  5. Essentially these sections describe the standards for the financial administration of federal programs: • Financial Reporting • Accounting Records • Internal Control • Budget Control • Allowable Costs • Source Documentation • Cash Management

  6. Common Areas of Concern for Financial Management • Allowable Costs • OMB Circular A-87 for LEAS • OMB A-21 for Institutions of Higher Ed • Records/Source Documents • Accounting Records must be supported by cancelled checks, paid invoices, payroll, time & attendance records

  7. Allowable CostsOMB Circular A-87 & A21 Costs must meet the following criteria: • Be necessary and reasonable • Be allocable • Be authorized or not prohibited under State or local laws or federal grant regulation

  8. Reasonable Costs: • Do not exceed that which would be incurred by a prudent person • Are ordinary and necessary for the operation of the program • Represent sound business practices and arms length bargaining

  9. Allocable Costs • Must provide a benefit to the program in proportion to the amount of the expenditure. • Costs are allocated over the period of the grant • Goods may be charged to the program in accordance with the relative benefit received

  10. Records/Source Documents • Lack of documentation is a primary reasons for audit findings • Documentation must be available to support every expenditure • Initial requisition • Final disbursement • You must follow your own rules

  11. Supplement Not Supplant • Federal funds must be used to augment the regular educational program; • Cannot replace nonfederal funds that would otherwise have been used.

  12. Supplanting Has Occurred • If the LEA uses Title IV-B to provide services that it was required to provide under other federal, state or local laws; or • If the LEA uses Title IV-B funds to provide services it provided with nonfederal funds in the prior year

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