1. Documenting Cash and In-Kind Match
Financial and Grants Management Institute - March 18-20, 2008

2. Financial and Grants Management Institute - March 18-20, 2008
Session Objectives
Understand allowable, allocable, necessary & reasonable costs
Gather and retain proper documentation
Learn about types and examples of match
Financial and Grants Management Institute - March 18-20, 2008

3. Talking Technical: Definitions to Know
Total allowable budget or expenditures incurred to operate the program and accomplish its objectives
Portion of budget or expenditures paid for with Federal funds (CNCS)
Portion of total expenditures not paid for with CNCS funds
Project
Costs
Federal
Share
Grantee
Share
aka: match
Financial and Grants Management Institute - March 18-20, 2008

4. Financial and Grants Management Institute - March 18-20, 2008
More Technical Talk
Gross income earned by the grantee that is directly generated by a supported activity or earned as a result of the award
Value of non-cash contributions provided by non-Federal third parties
May be in the form of real property, equipment, supplies, services, and other expendable property
Program
Income
In-Kind
Contributions
Financial and Grants Management Institute - March 18-20, 2008

5. What We’ve Always Known About OMB Requirements
Cost Principle Requirements:
OMB Circular A-21: Cost Principles for Educational Institutions
OMB Circular A-87: Cost Principles for State, Local, and Indian Tribal Governments
OMB Circular A-122: Cost Principles for Non-Profit Organizations
Administrative Requirements:
OMB Circular A-102: Grants and Cooperative Agreements with State and Local Governments (CNCS: § 45 CFR 2541)
OMB Circular A-110: Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (CNCS: § 45 CFR 2543)
Audit Requirements:
OMB Circular A-133: Audits of States, Local Governments, and Non-Profit Organizations
OMB Circulars:
CNCS Regulations:
Financial and Grants Management Institute - March 18-20, 2008

6. Revised Grant Guidelines
Effective May 11, 2004 and August 31, 2005
Federal
Grant Guidelines
Universities
States, Local, Indian Tribal Governments
Non-Profits
Hospitals
Administrative Requirements
§ 45 CFR 2543
§ 2 CFR 215 (formerly A-110)
§ 45 CFR 2541
A-102
Cost Principles
§ 2 CFR 220 (formerly A-21)
§ 2 CFR 225 (formerly A-87)
§ 2 CFR 230 (formerly A-122)
§ 45 CFR 74 (HHS regulations)
Audit
Requirements *
A-133
Notes:
CFR = Code of Federal Regulations
* = Organization is subject to A-133 if it expends more than $500,000 in Federal funds in its fiscal year
Financial and Grants Management Institute - March 18-20, 2008

7. Allowability of Project Costs
Cost Principle Requirements
To be allowable under a grant, costs must:
Be reasonable and allocable for the performance of the award
Conform to grant award limitations or cost principles
Be consistent with policies and procedures that apply to both federally-financed and other activities of the organization
Be given consistent treatment
Be in accordance with Generally Accepted Accounting Principles (GAAP)
Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program
Be adequately documented
Financial and Grants Management Institute - March 18-20, 2008

8. Grantee Share or Match Administrative Requirements
Cash and in-kind contributions are accepted as part of the grantee’s cost sharing or matching when contributions meet all of the following criteria:
Are verifiable from the grantee's records
Are necessary and reasonable for proper and efficient accomplishment of project or program objectives
Are allowable under the applicable OMB cost principles
Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching
Are provided for in the approved budget
Conform to other grant provisions or OMB Circulars
Financial and Grants Management Institute - March 18-20, 2008

9. Defining Documentation
Document, Document, Document
Allowable
Reasonable
Allocable
Consistently Applied
Financial and Grants Management Institute - March 18-20, 2008

10. Allowable - What does it Mean?
To be allowable under a grant, costs must:
Be reasonable and allocable for the performance of the award
Conform to grant award limitations or cost principles
Be consistent with policies and procedures that apply to both federally-financed and other activities of the organization
Be given consistent treatment
Be in accordance with Generally Accepted Accounting Principles (GAAP)
Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program
Be adequately documented
Financial and Grants Management Institute - March 18-20, 2008

11. Reasonable - What Does it Mean?
A cost is reasonable if:
It does not exceed what a prudent person would do under the circumstances at the time the decision was made to incur the cost
Consideration should be given to:
Whether the cost is ordinary and necessary for the operations of the organization
The restraints or requirements imposed by generally accepted sound business practices
Whether the individuals concerned acted with prudence
Significant deviations from established practices which may unjustifiably increase the award costs
Financial and Grants Management Institute - March 18-20, 2008

12. Allocable - What Does it Mean?
A cost is allocable:
Based on its relative benefits received
If it is treated consistently with other costs incurred for the same purpose in like circumstance and if it:
It is incurred specifically for the award
Benefits both the award and other work and can be distributed in reasonable proportion to the benefits received or
Is necessary to the overall operation of the organization
Any cost allocable to a particular award
may not be shifted to other Federal awards
to overcome funding deficiencies, or to avoid restrictions imposed by law or by the terms of the award
Financial and Grants Management Institute - March 18-20, 2008

13. Consistent - What Does it Mean?
Grantees must be consistent in assigning costs:
Whether a direct cost or an indirect cost
Regardless of the source of funding, i.e., federally or non-federally sponsored activities, and
Following written cost allocation plan, as applicable
Key wording in the cost principles:
Consistent with that paid for similar work in the organization’s other activities
Distributed to awards and other activities in a consistent pattern
The organization must follow a consistent, equitable procedure
Charges must be consistent with those normally allowed in like circumstances in the organization’s non-Federally-sponsored activities
Financial and Grants Management Institute - March 18-20, 2008

14. Financial and Grants Management Institute - March 18-20, 2008
Documentation Basics
Why Retain Documentation?
To track incoming information
To review information
To provide historical evidence
To provide evidence of accomplishments
To prepare for an audit
See Forms Collection
Financial and Grants Management Institute - March 18-20, 2008

15. Defining Source Documentation
Physical information:
Hard copy
Soft copy: CD, flash drive, server, microfilm
Source:
Internal source
External source
Benefits  supports a value, cost, or performance criteria relative to the grant
Financial and Grants Management Institute - March 18-20, 2008

16. Documentation Examples
Salary
Benefits
Travel
Supplies
Contract &
Consultant
Training
Evaluation
Member Costs
Admin
Financial and Grants Management Institute - March 18-20, 2008

17. Identifying Documentation
Salary
Signed timesheets with supervisory approval
Quarterly payroll returns (941)
Payroll register
Personnel file with salary/wage information
Employment contract
Cancelled checks
Direct deposit schedule
Financial and Grants Management Institute - March 18-20, 2008

18. Time & Activity Reporting Summary
All salaries and wages charged to grants must be supported by signed time & attendance records, i.e., timesheets
Exceptions:
State, Local and Indian Tribal Governments must comply with requirements of § 2 CFR 225 [OMB A-87]
Educational Institutions must comply with requirements of § 2 CFR 220 [OMB A-21]
Financial and Grants Management Institute - March 18-20, 2008

19. Time & Activity Reporting: State, Local, and Indian Tribal Governments
§ 2 CFR 225 (formerly A-87):
Budget estimates determined before services are performed do not qualify as support for expenditure, except on an interim accounting basis, provided that:
The estimates produce reasonable approximation of the activity actually performed
Quarterly comparison is performed of actual activity to budgeted estimates
Budget estimates are revised at least quarterly to reflect changed circumstances
Financial and Grants Management Institute - March 18-20, 2008

20. Time & Activity Reporting: Educational Institutions
§ 2 CFR 220 (formerly A-21):
Salaries, wages, and fringe benefits are allowable to the extent that the total compensation to individual employees conforms to:
The established policies of the institution *
Consistently applied
Provided that the charges for work performed directly on sponsored agreements and for other work allocable as facilities and administrative (F&A) costs are determined and supported as defined in § 2 CFR 220
* Check with your Accounting Department for your college or university requirements
Financial and Grants Management Institute - March 18-20, 2008

21. Time & Activity Reporting: Non-Profit Organizations
§ 2 CFR 230 (formerly A-122):
Reports maintained by non-profit organizations:
Must reflect an after-the-fact determination of the employee actual activity (not budgeted)
Must account for the total activity of each employee
Must be signed by the employee or supervisor having first hand knowledge
Must be prepared at least monthly and must coincide with one or more pay periods
See Forms Collection
Financial and Grants Management Institute - March 18-20, 2008

22. Identifying Documentation
Benefits
Insurance policy
Paid invoices and receipts
Claims made against the insurance
Cost allocation plan
Fringe benefits are allowable, provided such costs are absorbed by all organization activities in proportion to the relative amount of time or effort actually devoted
Financial and Grants Management Institute - March 18-20, 2008

23. Identifying Documentation
Travel
Authorization/reimbursement requests
Paid invoices and receipts
Per diem rates (applicable for area)
Mileage calculation
Reconciliation of advances to payments
Travel costs must not exceed charges normally allowed by the organization in its regular operations based on the organization’s written travel policy
Financial and Grants Management Institute - March 18-20, 2008

24. Identifying Documentation
Supplies
Purchase orders
Packing slips
Paid receipts and invoices
Donated Supplies, i.e., in-kind donations
Financial and Grants Management Institute - March 18-20, 2008

25. Identifying Documentation
Contract &
Consultant
Purchase orders
Signed agreements
Paid invoices and receipts
Maximum Allowed by CNCS for Consultant fee is $540 per day
Financial and Grants Management Institute - March 18-20, 2008

26. Identifying Documentation
Training
Agenda
Course description, cost
Sign-in sheet
Consultant/trainer agreement
Paid invoices and receipts
Financial and Grants Management Institute - March 18-20, 2008

27. Identifying Documentation
Evaluation
Purchase orders
Signed agreement/contract
Paid invoices and receipts
Final copy of the evaluation report
Financial and Grants Management Institute - March 18-20, 2008

28. Identifying Documentation
Member Costs
Member eligibility
Signed member contract
Member timesheets signed by both member and supervisor
Documented pay system
Signed midterm and end-of-year written member evaluations, depending on the member’s term
Financial and Grants Management Institute - March 18-20, 2008

29. Identifying Documentation
Administrative
Authorized in the budget
Cost must be identifiable to the project
Purchase orders
Paid invoices and receipts
Packing slip
Financial and Grants Management Institute - March 18-20, 2008

30. Identifying Documentation
General
Grant agreement with amendments
General correspondence
Reimbursement requests
Financial Status Reports
Federal Cash Transactions Reports
Budget vs. actual reports
Financial statements
Audits
General Ledger and supporting ledgers
Financial and Grants Management Institute - March 18-20, 2008

31. Financial and Grants Management Institute - March 18-20, 2008
Exercise
In-Kind or Not?
Financial and Grants Management Institute - March 18-20, 2008

32. Financial and Grants Management Institute - March 18-20, 2008
AmeriCorps
Match Requirements
Financial and Grants Management Institute - March 18-20, 2008

33. AmeriCorps Match Requirements
New 2008 Match Requirements
Single Overall Minimum Match
24% for the first 3 years of funding, and thereafter annually increases to 50% by Year 10
Applies to 2008 new, recompete, and continuation applicants
No requirements on cash or in-kind amounts, at this time
Must still request approval to use other federal funds as match
Must still meet minimum member living allowance
Will use standard Federal FSR starting in 2008
2008 Clarification Period
Between March 24 to April 28, 2008 applicants may revise budgets to reflect new match requirements, if desired
Financial and Grants Management Institute - March 18-20, 2008

34. Examining “Overall Match” Requirement
§ 45 CFR (a) – Regulatory Match:
Grantees must meet minimum requirements as shown in table below up to 50% overall match
$1 dollar for every CNCS $1 - by year 10
Year 1 2 3 4 5 6 7 8 9 10
Overall Minimum Share
24%
26%
30%
34%
38%
42%
46%
50%
Note: Pre-existing grantees as of September 2005 were deemed to be
in Year 3 for matching purposes.
Therefore, long term grantees would be in Year 5 based on the above chart.
Financial and Grants Management Institute - March 18-20, 2008

35. Finding, Recording, Valuing & Documenting Match
Financial and Grants Management Institute - March 18-20, 2008

36. Finding Match Cash: In-Kind Contributions: Value of donated services
Donations
Non-Federal income
Local governments
State appropriations
Foundation grants or corporate contributions
In-Kind Contributions:
Value of donated services
and/or donated goods
  
Labor  space  vehicles  training  supplies  equipment
Government-wide, with few rare exceptions,
Grantees cannot use other Federal funds as match
Financial and Grants Management Institute - March 18-20, 2008

37. Exception: Volunteer Match
Do not count as match -
The value of direct community services performed by volunteers
Do count as match -
Services that contribute to organizational functions
Count services such as accounting, training of staff or members that are elements of the grantee’s cost allocation plan
Financial and Grants Management Institute - March 18-20, 2008

38. Recording In-Kind Contributions
Maintain adequate documentation to support amounts claimed as match
Maintain same documentation for both CNCS Federal share and for grantee’s share
Documentation must meet same standards as other expenditures
Record donation and valuation of item in detail
Enter into the general ledger as income and expenditure
Failure to enter match contributions into general ledger requires a formal explanatory policy and separate spread sheet accountability of receipt and use
Financial and Grants Management Institute - March 18-20, 2008

39. Why Record In-Kind in the General Ledger?
Statement of Financial Accounting Standards
(SFAS #116) sets the standard:
Contributed services are recognized in financial statements if services received:
Create or enhance non-financial assets, or
Require specialized skills, are provided by individuals possessing those skills, and would need to be purchased if not provided by donation.
Financial and Grants Management Institute - March 18-20, 2008

40. Recording In-Kind Contributions
Enter into the general ledger as income and expenditure:
Example:
A local paint store donates a professional paint sprayer with a fair market value of $550.00
$ – 7250 In-Kind Expense Account (debit)
$ – 5250 In-Kind Income Account (credit)
Financial and Grants Management Institute - March 18-20, 2008

41. Valuing In-Kind Contributions
Use fair market price
Consider what it would cost to obtain similar good or service
Value of donation should be placed by the donor
Review donation letter or form to ensure the value is reasonable
The IRS defines fair market value as
the price that item would sell for
on the open market. 
Financial and Grants Management Institute - March 18-20, 2008

42. Documenting In-Kind Contributions
Document in-kind contributions to show:
What service or goods were obtained
Why transaction is allowable for grant purposes
The value of the contribution
How it is traced back to source documentation
If audited, a grantee may be required to obtain full supporting documentation from all donors, if not available during the audit.
Financial and Grants Management Institute - March 18-20, 2008

43. Documenting In-Kind Contributions
Document the basis for determining value of personal services, material, equipment, building, and land
Obtain written acknowledgement of the contribution including:
Name and signature of donor
Date and Location of donation
Detailed description of item/service
Estimated value of contribution, how value was determined, who made the determination
Was the contribution obtained with Federal funds
*** Keep a copy of the receipt in your files ***
Financial and Grants Management Institute - March 18-20, 2008

44. Sample 1: In-Kind Contribution Form
See Forms Collection
Financial and Grants Management Institute - March 18-20, 2008

45. Sample 2: In-Kind Contribution Form
See Forms Collection
Financial and Grants Management Institute - March 18-20, 2008

46. IRS Form 990 and In-Kind Contributions
In 2007, the IRS changed the Form 990
Revised Form 990 must be used for reporting year in 2009
NEW Schedule M, Non-Cash Contributions:
Requires organizations to report the aggregate of $25,000 of 24 specific categories of non-cash property an organization receives
May require organizations to implement new recordkeeping practices
See the revised Form 990:
Financial and Grants Management Institute - March 18-20, 2008

47. Common Audit Findings Related to Cash & In-Kind Match
See Forms Collection
Financial and Grants Management Institute - March 18-20, 2008

48. Financial and Grants Management Institute - March 18-20, 2008
Take it Home!
Familiarize all staff with cash and in-kind match documentation requirements
Establish documentation for expenditure requirements to ensure costs are: reasonable, necessary, allocable, allowable, and adhere to grant guidelines
Ensure supporting documentation relates directly to approved program funded by the CNCS grant
Maintain proper records and establish a written record retention policy
Financial and Grants Management Institute - March 18-20, 2008