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Copyright © Texas Education Agency 2012 1 Accounting for Grant Funds, including Documentation for Expenditures.

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Presentation on theme: "Copyright © Texas Education Agency 2012 1 Accounting for Grant Funds, including Documentation for Expenditures."— Presentation transcript:

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2 Copyright © Texas Education Agency 2012 1 Accounting for Grant Funds, including Documentation for Expenditures

3 Copyright © Texas Education Agency 2012 2 Origin of Financial Management Requirements 34 CFR Part 74 – Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Nonprofit Organizations (OMB Circular A-110) Codified in Title 2 CFR Part 215

4 Copyright © Texas Education Agency 2012 3 Financial Management Systems 34 CFR 74. 21 Financial management systems shall provide for: Accurate, current, and complete disclosure of the financial results of each federally- sponsored project

5 Copyright © Texas Education Agency 2012 4 Financial Management Systems Records that adequately identify the funding source and application (i.e., use) of funds for federally funded grant programs Records shall contain information for each grant you receive pertaining to: – Awards – Authorizations – Obligations – Unobligated balances – Assets – Outlays (i.e., expenditures) – Income (i.e., revenues) – Interest (on debt)

6 Copyright © Texas Education Agency 2012 5 Financial Management Systems Effective control over and accountability for all funds, property, and other assets Adequately safeguard all assets and assure they are used solely for authorized purposes Budget control - compare actual expenditures to budget amounts for each award

7 Copyright © Texas Education Agency 2012 6 Financial Management Systems Written procedures to minimize the time between the receipt of funds by the grantee and the disbursement of funds 3-day cash management rule – no more cash on hand than to meet 3 days’ business needs

8 Copyright © Texas Education Agency 2012 7 Financial Management Systems Written procedures for determining the reasonableness, allocability, and allowability of costs in accordance with the provisions of the federal cost principles and the terms and conditions of the award Accounting records supported by original source documentation

9 Copyright © Texas Education Agency 2012 8 Source Documentation Payroll records, including charges to payroll supported by time and effort records and copies of payroll checks Contracts Purchase orders Itemized Invoices Itemized Receipts Copies of checks Travel vouchers with appropriate travel receipts

10 Copyright © Texas Education Agency 2012 9 Travel Documentation Policy for reimbursing travel Actual travel costs must be documented with a “travel voucher” or other comparable documentation completed and signed by the employee. Documentation should include at a minimum: – The name of the individual claiming travel reimbursement – The destination and purpose of the trip, including how it was necessary to accomplish the objectives of the grant project – The dates of actual travel – The actual mileage (not to exceed reimbursement at the maximum allowable rate) – The actual amount expended on airfare, with receipt attached

11 Copyright © Texas Education Agency 2012 10 Travel Documentation – The actual amount expended on lodging per day, with a receipt attached (may not exceed the maximum allowable) – The actual amount expended on meals per day (may not exceed the maximum allowable; tips/gratuities are not reimbursable) – The actual amount expended on public transportation, such as taxis, shuttles, etc. – The actual amount expended on a rental car, with receipt attached and justification for why a rental car was necessary and more cost effective than alternate transportation – The actual amount expended on incidentals, such as hotel taxes, copying of materials, and other costs associated with the travel – The total amount reimbursed to the employee Any travel costs not properly documented are not reimbursable.

12 Copyright © Texas Education Agency 2012 11 Reimbursement for Travel Acceptable methods of reimbursement to employees: – An individual uses his/her own personal credit card to charge travel expenses, and then is reimbursed by the grantee organization. The individual would then complete some type of travel expense report or voucher to receive reimbursement. They would attach their hotel receipt, airfare receipt, and rental car receipt, if applicable, and list their mileage and actual cost of meals, not to exceed the maximum allowable rates, etc. – An individual can only pay for his/her own travel, including meals. An individual cannot pay for another individual's travel, including meals, etc. – The organization is "direct billed" by the hotel or airline company. The direct billing must include the name(s) of the individual(s) traveling, dates of travel, and the cost of the room per night so that it can be determined that the rates were within the maximum allowable rates.

13 Copyright © Texas Education Agency 2012 12 Use of Organization Credit Cards Grantees are advised to use caution in using organization credit cards A grantee may use any medium to transact business during the course of implementing a grant program. However, some business practices are better than others because they facilitate the implementation of internal controls that mitigate the risk that an employee or other agent will use public (or local) funds in an inappropriate or unauthorized manner. A grantee may use a revolving credit or charge account issued directly to the grantee (i.e., a corporate account) to transact business related to a grant program provided that it properly accounts for each individual transaction charged to the account(s).

14 Copyright © Texas Education Agency 2012 13 Use of Organization Credit Cards This includes, but is not necessarily limited to, the following: The accounting ledger must reflect each individual transaction on the credit or charge account billing statement by: – the individual vendor name (not just the credit card company name) – the source of funding (i.e., donations, a particular state grant, a particular federal grant, etc.) – the expense category (i.e., supplies, instructional materials, equipment, travel, etc.) – the actual date of the transaction (as opposed to the billing statement date or the date that the total credit/charge account bill was paid). Grantees must maintain financial accounting reports (e.g., a detailed general ledger that supports the expenditures reported to the TEA on an interim or final expenditure report) that discloses the accounting of grant funds and be able to produce such reports.

15 Copyright © Texas Education Agency 2012 14 Use of Organization Credit Cards Grantees should maintain the original, internal accounting records that identify the business purpose and the general ledger account code classification of each transaction : – purchase order – travel reimbursement voucher – employee expense reimbursement voucher, etc.. Grantees should maintain the original, third-party records (e.g., invoice, itemized receipt) that: – itemizes and adequately describes or otherwise identifies the goods purchased or services rendered – clearly identifies the business or individual the grantee transacted with – identifies the date of the transaction

16 Copyright © Texas Education Agency 2012 15 Use of Organization Credit Cards The classification of costs by specific funding source and expense type and the maintenance of adequate source documentation is necessary for reporting purposes to the TEA. It is also necessary to demonstrate compliance with state and federal cost principles and standards of financial management systems and conformance with generally accepted accounting principles. It is also a requirement of the Internal Revenue Code applicable to all business entities.

17 Copyright © Texas Education Agency 2012 16 Program Income Program income includes income from: – Fees for services performed – The use or rental of equipment or space acquired under a federal grant – The sale of commodities or items fabricated under the grant – License fees and royalties

18 Copyright © Texas Education Agency 2012 17 Use of Program Income Unless specifically approved in the grant agreement, any program income must be deducted from the expenditures to be charged to the grant This means the grantee would need to deduct the program income from the expenditures prior to filing the final expenditure report and TEA making final payment to the grantee If approved by TEA in the grant award, the grantee may add the program income to the total grant and not deduct it from expenditures


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