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Seminar on

Seminar on. Financial Management. Office of Justice Programs. Office of the Chief Financial Officer. Welcome. &. Introductions. Introduction. 1. Name 2. Jurisdiction represented 3. Years in grants 4. Types of grants. Eric H. Holder, Jr. Office Of Justice Programs.

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Seminar on

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

  2. Welcome & Introductions

  3. Introduction 1. Name 2. Jurisdiction represented 3. Years in grants 4. Types of grants

  4. Eric H. Holder, Jr. Office Of Justice Programs Community Oriented Policing Services Office on Violence Against Women

  5. Office of Justice Programs

  6. Office of the Chief Financial Officer

  7. Federal Budget Process Defines the programs, policies, and the intent of Congress. The actual dollars Congress has provided to agency or department. A proportional division of funds made by Office of Management and Budget (OMB).

  8. Federal Budget Process Authorization by the head of the agency (OJP) to incur obligations (make awards) An order placed, contract awarded and/or service received Funds spent by grant recipients Payments made by Treasury to liquidate obligations

  9. All recipients are required to: Establish/maintain auditable accounting records; Accurately account for funds awarded; and Funds 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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.

  17. 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

  18. 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

  19. 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

  20. OMB APPLIES TO DOJ Non-Profit Organizations 28 CFR 70 2 CFR, Part 215 OMB A-110 Administrative Requirements: OMB A-102 State & Local Units of Government Replaced by Uniform Administrative Requirements also known as “common rule” 28 CFR 66 Educational Institutions 2 CFR, Part 220 (OMB A-21) Cost Principles: Included as reference in CFR State & Local Units of Government 2 CFR, Part 225 (OMB A-87) 2 CFR, Part 230 (OMB A-122) Non-Profit Organizations Educational Institutions Audit Requirements: Included as reference in CFR OMB A-133 Non-Profit Organizations State & Local Units of Government

  21. COMMON RULES Committee of Federal agency representatives "Uniform" requirements Signed by Federal agencies Limited exceptions granted by OMB Government-wide Common Rules

  22. 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

  23. 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/ Government-wide Common Rules 2. Suspension & Debarment (S & D)

  24. Who is covered? Direct recipients and subrecipients who are state agencies. Exemptions: Subrecipients other than state agencies. Government-wide Common Rules 3. Drug-Free Workplace (DFW):

  25. Who is covered? Direct recipients and subrecipients. Note: Any violation of this prohibition is subject to a minimum $10,000 fine for each occurrence. Government-wide Common Rules 4. LOBBYING

  26. Applicable to: State & Local Units of Government Non-Profit Organizations Indian Tribes and Tribal Organizations Commercial Entities Individuals (direct or indirect) Government-wide Common Rules LOBBYING RESTRICTIONS

  27. 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

  28. Requires That A Cost Be: Allowable Necessary to the performance of a project Reasonable Allocable to the project and consistently treated Code of Federal Regulations MAJOR PROVISIONS

  29. Requires That A Cost Be: (continued) Non-profitable Claimed against only one award, and Permissible under State & Federal lawsand regulations Code of Federal Regulations MAJOR PROVISIONS

  30. Code of Federal Regulations MAJOR PROVISIONS CLASSIFICATION OF COSTS

  31. DIRECT COSTS, generally include: CLASSIFICATION OF COSTS • 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

  32. 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

  33. 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

  34. 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

  35. COFAR / Super Circular: Any non-Federal entity that has never received a negotiated indirect cost rate may elect to charge a de minims rate of 10% of modified total direct costs (MTDC). Rate may be used indefinitely or until entity elects to negotiate for a rate. Costs must be consistently charged as either indirect or direct – (not both). Once elected must be used consistently for all Federal awards. CLASSIFICATION OF COSTS

  36. The regulation DOES NOT: Supersede limitation imposed by law Dictate extent of Federal funds Provide additional Federal funds for indirect costs Code of Federal Regulations MAJOR PROVISIONS

  37. The regulation DOES NOT: (continued) Code of Federal Regulations MAJOR PROVISIONS • Dictate how a government should use funds • Relieve State & local governments of stewardship responsibilities for Federal funds

  38. Code of Federal Regulations SELECTED ITEMS OF COST

  39. Accounting Advertising Alcoholic Beverage Audit Services Bad debts Contingencies Code of Federal Regulations Selected Items of Cost

  40. Contributions & Donations Entertainment Fines/Penalties Fund Raising Rental Costs Under Recovery of Cost under Federal Grants Code of Federal Regulations Selected Items of Cost

  41. 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

  42. CASH versus IN-KIND MATCH

  43. To calculate match: 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% $100,000 X 20% = $20,000 Required match

  44. State and locals have their own regulations. If State or local procedures offer more efficient protection for the Federal Dollar use them -- IF NOT, USE THE FEDERAL. Documentation. Very important! Contract files must establish an audit trail. Documentation should be sufficient enough to stand on its own. Procurement Procedures General Guidance

  45. Both the Common Rule A-102 and OMB Circular 2 CFR Part 215 require competition ON CONTRACT AWARDS. Bidders' lists should be continually updated. Newspaper/other advertising of contract requirement -- very important. Procurement Procedures General Guidance re Competition

  46. Local preference laws relative to contract award -- discouraged by Federal agencies. Local preference should only be used when a wider distribution is not possible. Procurement Procedures General Guidance re Competition

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