Seminar on Financial Management Office of Justice Programs Office of the Chief Financial Officer.

Seminar onFinancial Management

Office of Justice ProgramsOffice of the Chief Financial OfficerOffice of the Chief Financial Officer

Welcome Welcome &&

IntroductionsIntroductions

IntroductionIntroduction

1.1. Name Name

2.2. Jurisdiction Jurisdiction represented represented

3.3. Years in grants Years in grants

4. Types of grants 4. Types of grants

Eric H. Holder, Jr.

Office Of

Justice Programs

Community OrientedPolicing Services

Office onViolenceAgainstWomen

Office of Justice Programs

Office of theAssistant

Attorney General

NationalInstituteof J ustice

Office of theChief Financial

Officer

Office ofSex OffenderSentencing,Monitoring,

Apprehending,Registering, and

Tracking

Office ofCommunications

Office ofGeneralCounsel

Office of theChief Information

Officer

Office forCivil Rights

Office ofAdministration

Office ofJ uvenile

J ustice andDelinquencyPrevention

Office forVictims ofCrime

Bureau ofJ usticeStatistics

Bureau ofJ ustice

Assistance

Office of Audit,Assessment, andManagement

EqualEmployment

Opportunity Office

Office of the Chief Financial Officer

AUTHORIZATION

APPROPRIATION

APPORTIONMENT

Federal Budget Process

Defines the programs, policies, and the intent of Congress.Defines the programs, policies, and the intent of Congress.

The actual dollars Congress has provided to agency or department.

The actual dollars Congress has provided to agency or department.

A proportional division of funds made by Office of Management and Budget (OMB).

A proportional division of funds made by Office of Management and Budget (OMB).

ALLOTMENT

OBLIGATION

EXPENDITURES

DISBURSEMENTS

Authorization by the head of the agency (OJP) to incur obligations (make awards)

Authorization by the head of the agency (OJP) to incur obligations (make awards)

An order placed, contract awarded and/or service received

An order placed, contract awarded and/or service received

Funds spent by grant recipientsFunds spent by grant recipients

Payments made by Treasury to liquidate obligationsPayments made by Treasury to liquidate obligations

Federal Budget Process

All recipients are required to:Establish/maintain auditable accounting

records; Accurately account for funds awarded; andFunds for each award must be accounted

for separately from other grants and other funding sources.

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)


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.


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.


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.



– Presents and classifies costs, as required for budgetary and evaluation purposes.

– Provides cost and property control to ensure optimal use of funds.

– Controls funds/resources to assure conformance with general or special conditions.



– Meets requirements for periodic reporting.– Provides financial data for planning, control,

measurement, and evaluation of direct and indirect costs.


In summary, a Financial Management System must be able to record and report on the:

Receipt

Obligation, and

Expenditures of grant funds.


1) 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

Order of Precedence

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 Governments

28 CFR 70 - Uniform Administrative Requirements for Grants and Agreements (including subawards) with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations


OMB

AdministrativeRequirements:

2 CFR, Part 215 OMB A-110

Replaced by Uniform Administrative Requirements also known as “common rule”

Cost Principles:

2 CFR, Part 220 (OMB A-21)



Audit Requirements:

OMB A-133

OMB A-102

28 CFR 70

28 CFR 66

Included as reference in

CFR

Included as reference in

CFR

DOJAPPLIES TO

Non-Profit Non-Profit OrganizationsOrganizations

State & Local Units State & Local Units of Government of Government

Educational Educational InstitutionsInstitutions


State & Local Units State & Local Units of Governmentof Government

Educational Educational InstitutionsInstitutions


State & Local Units State & Local Units of Governmentof Government

COMMON RULES

Committee of Federal agency representatives

"Uniform" requirements Signed by Federal agencies Limited exceptions granted by OMB

Government-wide Common Rules

1. 28 CFR 66

“Uniform Administrative Requirements for Grants & Cooperative Agreements with State & Local Governments”

Applicable to:State & Local Units of Government


Who is covered? Direct recipients and subrecipients.

Exemption from certification: Direct recipients of a statutory entitlement (BJA, OVC, OJJDP formula awards).

Subcontractors receiving $100k or less.Excluded Parties List System:

http://www.sam.gov/

2. Suspension & Debarment (S & D)


Who is covered? Direct recipients and subrecipients who are state agencies.

Exemptions: Subrecipients other than state agencies.

3. Drug-Free Workplace (DFW):


Who is covered? Direct recipients and subrecipients.

Note: Any violation of this prohibition is subject to a minimum $10,000 fine for each occurrence.

4. LOBBYING


Applicable to: State & Local Units of Government Non-Profit Organizations Indian Tribes and Tribal Organizations Commercial Entities Individuals (direct or indirect)

LOBBYING RESTRICTIONS


CODE of FEDERAL REGULATIONS(2 CFR/Part – 220/225/230)

also known as OMB Circular A-21/87/122

Cost Principles for Educational Institutions, State, Local,

and Indian Tribal Governments, and Non-Profit Organizations

Requires That A Cost Be:

– Allowable

– Necessary to the performance of a project

– Reasonable

– Allocable to the project and consistently treated

MAJOR PROVISIONS


Requires That A Cost Be: (continued)

– Non-profitable

– Claimed against only one award, and

– Permissible under State & Federal lawsand regulations

MAJOR PROVISIONS


CLASSIFICATIONOF COSTS

MAJOR PROVISIONS


DIRECT COSTS, generally include:

Costs identified specifically with an activity Salaries and Wages (including holidays,

sick leave, etc.) for direct labor employees 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


Indirect cost generally are cost not readily identifiable with a particular grant or contract such as:

Maintenance of buildings Telephone expense Supplies Depreciation Rental expense


INDIRECT COSTS RATES:

Provisional indirect costs rates adjusted to actual (retroactive adjustment)

Predetermined rates (not normally subject to adjustment)

Fixed rates (with roll or carry forward adjusted in future period)

Implements cognizant Federal agency concept


The regulation DOES NOT:

Supersede limitation imposed by lawDictate extent of Federal fundsProvide additional Federal funds for

indirect costs

MAJOR PROVISIONS


The regulation DOES NOT: (continued))

MAJOR PROVISIONS

Dictate how a government should use funds

Relieve State & local governments of stewardship responsibilities for Federal funds


SELECTED ITEMS

OF COST


Accounting Advertising Alcoholic Beverage Audit Services Bad debts Contingencies

Selected Items of Cost


Contributions & Donations Entertainment Fines/Penalties Fund Raising Rental Costs Under Recovery of Cost under Federal

Grants

Selected Items of Cost


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

MATCH

CASH versus

IN-KIND

To calculate match:

Award Amount = Adjusted % of Federal share Project Cost

Adjusted x Recipient’s = Required Project Cost Share Match

=======================================

Ex: Federal Amount = $80,000 80/20 Match

$80,000 = $100,000 Adjusted Project Cost 80%

MATCH

$100,000 X 20% = $20,000 Required match

Seminar on Financial Management Office of Justice Programs Office of the Chief Financial Officer.

Documents

chief financial officer

office of management

financial data

types of grants slide

federal programs

adequate accounting

adequate system of accounting

reliable financial reporting