COOPERATIVE AGREEMENT FINANCIAL PROCEDURES

1. COOPERATIVE AGREEMENT FINANCIAL PROCEDURES

2. SUBJECTS • Obligation of Agreements • Cost Principles • Payment Procedures • Reconciliation • Final Close Out

3. OBLIGATION OF AGREEMENTS DOD FMR Volume 3 Chapter 8 ARMY – NGR 5-1/ANGI 63-101, Chapter 12, and DFAS IN 37-1, Chapter 8 AIR – NGR 5-1/ANGI 63-101, Chapter 32

4. FULL VS INCREMENTAL FUNDING AIR - Fully Funded ARMY – Fully Funded (Preferred)

5. OBLIGATION OF AGREEMENTS • Under a Continuing Resolution Authority (CRA) • Under a Separate State and Federal Fiscal Years

6. COOPERATIVE AGREEMENT FUNDING FUNDING “CASH”Quarterly Authority Annual Budget Authority Allotment Annual Funding Program Maximum Funding Limitation Estimated Cost Federal Share (100%) $ 5,000,000.00 $ 5,000,000.00Federal Share (75%) $_______________________ $_______________________Federal Share (50%) $_______________________ $_______________________ Federal Total $_______________________ $______________________State Share (50%) $________________________ $_______________________State Share (25%) $________________________ $_______________________ Program Income $_______________________State Total $________________________ $_______________________Grand Total $________________________ $_______________________In-Kind Assistance.

7. FLOWCHART SHOWING OBLIGATIONS OF COOPERATIVE AGREEMENTS Program Manager/Air Comptroller Submits request to setup initial or modify CA GOR Reviews request/Prepares CA or modification USPFO and TAG Signature GOR makes distribution Federal PM/RA sets up informal ledger. Army PM enters reservation in AFCOS Federal Accounting ensures obligation is posted in accounting system State Comptroller set up data in State Accounting System

8. COST PRINCIPLESGENERAL POLICY ALL COSTS FOR WHICH REIMBURSEMENT IS SOUGHT MUST BE SUPPORTED AND DOCUMENTED.

9. COST REIMBURSEMENT RULES INDIRECT COSTS DIRECT COSTS • ALLOCABLE COSTS • ALLOWABLE COSTS • REASONABLE COSTS • AVAILABILITY OF FUNDS

10. INDIRECT COSTS • Incurred for a common or joint purpose benefiting more than one cost objective • Cost not readily assignable to the cost objectives specifically benefited • National Guard appropriated funds are prohibited from being used to reimburse indirect costs, except for fringe benefits, under a Grant or Cooperative Agreement.

11. DIRECT COSTS • Costs that can be identified directly with the performance of a Cooperative Agreement • Must meet the “consistent treatment rule” • Must meet the cost reimbursement rules

12. ALLOCABLE • Cost must be allocable to the Cooperative Agreement supported program, project or facility. The cost of goods or services purchased by the state must be used to support the Cooperative Agreement supported program.

13. ALLOWABLE The cost must be allowable under applicable laws, regulations and policy. This includes Federal, DoD, Army, Air Force and National Guard policies concerning the use and management of federal funds.

14. REASONABLE • Cost must “not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.” OMB Circular A-87, Appendix A

15. AVAILABILITY OF FUNDS Even of the State Military Department incurs costs that are authorized, these costs cannot be reimbursed unless sufficient funds have been obligated to the Cooperative Agreement.

16. BURDEN OF PROOF The “burden of proof” as to the allocability, allowability and reasonableness of costs for eligibility for reimbursement rests with the State

17. FINAL AUTHORITY The final authority in determine whether a particular costs meets the costs principle rest with the USPFO/GRANTS Officer.

18. COST PRINCIPLES EXAMPLES

19. EXAMPLE #1 The State’s Military Department is billed for remote connectivity to the Department of Administration. This service is needed to have access to the State Accounting system and the internet. DIRECT OR INDIRECT?

20. EXAMPLE #2 Payment of a license fee to certify a plumber who is employed under a Cooperative Agreement Appendix. DIRECT OR INDIRECT?

21. EXAMPLE #3 All State Agencies, to include the Military Department, will be charged for each funding line of any activity the State Treasurer processes. DIRECT OR INDIRECT?

22. EXAMPLE #4 The State Military Department is charged for background checks on new State hires under a Cooperative Agreement. DIRECT OR INDIRECT?

23. EXAMPLE #5 Under the Single Audit Act” the State Military Department contracted with a local CPA firm to conduct an audit of the Cooperative Agreements. The State wishes to pass this cost on a pro rata basis to each Cooperative Agreement. DIRECT OR INDIRECT?

24. EXAMPLE #6 The State Military Department is assessed a yearly charge on the Department’s per cent of mail activity. This reimbursement helps offset the operation of the State’s Central Mail Unit. DIRECT OR INDIRECT?

25. EXAMPLE #7 Overtime pay for security guards. DIRECT OR INDIRECT?

26. EXAMPLE #8 Payment to State employees who are covered under a Cooperative Agreement for making a suggestion that saves funding for the Military Department. DIRECT OR INDIRECT?

27. EXAMPLE #9 Provide training to State employees who are authorized and employed under a Cooperative Agreement. DIRECT OR INDIRECT?

28. Travel of State Employees • State Employees Must Travel on State Orders • Feds Reimburse the State up to the JFTR Allowances • The Use of Reimbursable Individual Travel Orders is Prohibited

29. PAYMENT OPTIONS • Reimbursement • Advance Payment

30. PAYMENT REFERENCES ARMY: NGR 5-1/ANGI 63-101, Chapter 12 AIR: NGR 5-1/ANGI 63-101, Chapter 32

31. REIMBURSEMENT PROCEDURE • State funds expended • State submits for reimbursement • Federal Program Manager/Resource Advisor must: • Verify documentation for accuracy • Certify charges are valid and are authorized for payment • Forward to ARNG(Pay/Exam)ANG-FM

32. REIMBURSEMENT FLOWCHART State Military Department Contracts with Vendor Pays Vendor Prepares request for Reimbursement and submits to Federal PM/RA Federal PM/RA request supplies, etc Federal PM/RA reviews request and certifies Forward request to Federal comptroller Federal comptroller ensures funds are obligated to cover reimbursement Reimbursement processed through CAPS as EFT Payment DFAS processes EFT payment to State Military Department

33. ADVANCE PAYMENT • DOD FMR Volume 12 Chapter 5 • DOD FMR Volume 10 Chapter 19 • NGR 5-1/ANGI 63-101 Chapter 12 (Army) • NGR 5-1/ANGI 63-101 Chapter 32 (Air)

34. ADVANCE PAYMENT • State Comptroller may request an advance • Advance may be required by State statute • Advance is based on cash flow and reimbursement cycle time

35. HANDOUT

36. ADVANCE PAYMENT • USPFO APPROVE/DISAPPROVE • ARMY - Copy furnished to ARNGRC NGB-ARC • At year end outstanding Advances must be returned • At anytime the Advance cannot exceed the unpaid Federal portion of the Cooperative Agreement

37. Advance and Reimbursement Payments Payment to be made within 7 days if EDI & EFT used DOD FMR Volume 10 Chapter 19, 190106 DOD FMR Volume 10 Chapter 7, 070102 G

38. CASH MANAGEMENT IMPROVEMENT ACT (CMIA) 31 CFR 205 • Federal agencies must make timely fund disbursements and grant awards to States. • States and Federal agencies must minimize the time between the advance of Federal funds to States and the State presenting settlement documentation or check to close advance.

39. CASH MANAGEMENT IMPROVEMENT ACT (CMIA) 31 CFR 205 • States are entitled to interest from the Federal Government for the time State funds are expended for program purposes pending Federal disbursement. The Federal Government is entitled to interest from the States for the time Federal funds are in State accounts (advance) pending the State presenting settlement documentation or check to close advance. Treasury may charge responsible Federal agencies if they are found to be flagrant or repeatedly incur Federal interest liabilities.

40. RECONCILIATION ARMY: DFAS IN 37-1, CHAPTER 27 AIR/ARMY: DoD FMR 7000-14R Vol 3 Chap 8 Tri-annual reviews

41. RECOMMENDED RECONCILIATION • Monthly • Status letter from State Comptroller • Federal Program Manager reconcile to include outstanding items • Accounting Branch reconcile obligations and reimbursements

42. RECOMMENDED RECONCILIATION • End of Year • State Comptroller, Federal Program Manager, Federal Accounting Branch meet • Identify shortage/excess funds

43. FINAL SETTLEMENT/CLOSEOUT OF COOPERATIVE AGREEMENTS

44. REFERENCES ARMY - NGR 5-1/ANGI 63-101 CHAPTER 12 AIR - NGR 5-1/ANGI 63-101 CHAPTER 32

45. MY CONCERN IS NOT NECESSARILY HOW LONG AN AGREEMENT IS OPEN, BUT RATHER WE DON’T KNOW WHY THE AGREEMENT IS OPEN

46. CLOSE OUT DEFINEDWhen the state has submitted their FINAL request for reimbursement the Appendix is closed

47. THE USPFO IS REQUIRED TO CLOSE OUT THE AGREEMENTS NLT 90 DAYS AFTER THE END OF THE FEDERAL FISCAL YEAR

48. QUESTION? FROM THE STATES PERSPECTIVE, WHAT IS REQUIRED IF THERE ARE PURCHASES THAT REMAIN UNLIQUIDATED AND A REQUEST FOR RE-IMBURSEMENT TO THE GRANTS OFFICER IS REQUIRED?

49. The State Resource Manager must submit a request for extension.

50. Federal Program Managers must have all requests for services, supplies, etc to the State Comptroller by established cutoff. NLT 30 Sep State Comptroller awards contracts.