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)
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
Adequate Accounting System:
– 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.
Financial Management Systems
Adequate Accounting System:
– Meets requirements for periodic reporting.– Provides financial data for planning, control,
measurement, and evaluation of direct and indirect costs.
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.
Financial Management Systems
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
Code of Federal Regulations
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)
2 CFR, Part 225 (OMB A-87)
2 CFR, Part 230 (OMB A-122)
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
Non-Profit Non-Profit OrganizationsOrganizations
State & Local Units State & Local Units of Governmentof Government
Educational Educational InstitutionsInstitutions
Non-Profit Non-Profit OrganizationsOrganizations
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
Government-wide Common Rules
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)
Government-wide Common Rules
Who is covered? Direct recipients and subrecipients who are state agencies.
Exemptions: Subrecipients other than state agencies.
3. Drug-Free Workplace (DFW):
Government-wide Common Rules
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
Government-wide Common Rules
Applicable to: State & Local Units of Government Non-Profit Organizations Indian Tribes and Tribal Organizations Commercial Entities Individuals (direct or indirect)
LOBBYING RESTRICTIONS
Government-wide Common Rules
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
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
CLASSIFICATIONOF COSTS
MAJOR PROVISIONS
Code of Federal Regulations
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
Classification of Costs
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
Classification of Costs
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
Classification of Costs
The regulation DOES NOT:
Supersede limitation imposed by lawDictate extent of Federal fundsProvide additional Federal funds for
indirect costs
MAJOR PROVISIONS
Code of Federal Regulations
The regulation DOES NOT: (continued))
MAJOR PROVISIONS
Dictate how a government should use funds
Relieve State & local governments of stewardship responsibilities for Federal funds
Code of Federal Regulations
SELECTED ITEMS
OF COST
Code of Federal Regulations
Accounting Advertising Alcoholic Beverage Audit Services Bad debts Contingencies
Selected Items of Cost
Code of Federal Regulations
Contributions & Donations Entertainment Fines/Penalties Fund Raising Rental Costs Under Recovery of Cost under Federal
Grants
Selected Items of Cost
Code of Federal Regulations
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