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Presentation on theme: "BUSINESS AND FISCAL OFFICERS MEETING - 2/18/10 PRESENTED BY: GLEN JONES, DIRECTOR POST-AWARD RESEARCH AND SPONSORED PROGRAMS Federal Audit Compliance Overview."— Presentation transcript:


2 Compliance Requirements and Internal Control Activities Allowable or Unallowable Allowable Costs/Cost Principles Cash Management Davis-Bacon Act Eligibility Equipment and Real Property Management Matching, Level of Effort, Earmarking Period of Availability of Federal Funds Procurement and Suspension and Debarment

3 Compliance Requirements and Internal Control Program Income Real Property Acquisition and Relocation Assistance Reporting Subrecipient Monitoring

4 Activities Allowable or Unallowable Activities allowed or unallowed are unique for each Federal Program and can be found in the following: Laws & Regulations Program Legislation Federal Agency regulations Provisions of the grant agreement Terms and Conditions of Award A-133 Compliance Supplement Agency Program Requirements by CFDA#

5 Allowable Costs/Cost Principles OMB Circular A-21, Cost Principles for Educational Institutions (2 CFR part 220) Selected Items of Cost (Direct and Indirect) Selected Cost ItemA-21 Section J Advertising and public relations costs(1) Allowable with restrictions Advisory councils(2) Allowable with restrictions Alcoholic Beverages(3) Unallowable Alumni Activities(4) Unallowable Audit Costs and Related Services(5) Allowable with restrictions Bad Debts(6) Unallowable

6 Allowable Costs/Cost Principles (Cont) Selected Cost Item (Cont)A-21 Section J (Cont) Bonding Costs(7) Allowable with restrictions Commencement and Convocation Costs(8) Unallowable with exceptions Communication Costs(9) Allowable Compensation for Personal Services (CPS) (10) Unique criteria for support CPS – Organization Furnished Auto(10.g) Unallowable for personal use part CPS – Sabbatical Leave Costs(10.f(4)) Allowable with restrictions CPS – Severance Pay(10.h.) Allowable with restrictions Contingency Provisions(11) Unallowable with exceptions Deans of Faculty and Graduate Schools(12) Allowable Defense of Criminal & Civil Claims(13) Allowable with restrictions Depreciation and Use Allowance(14) Allowable with qualifications Donations and Contributions(15) Unallowable if made by recipient

7 Allowable Costs/Cost Principles (Cont) Selected Cost Item (Cont)A-21 Section J (Cont) Employee Morale Costs(16) Allowable with restrictions Entertainment Costs(17) Unallowable Equipment & Other Capital Expenses(18) Allowable based on requirements Fines and Penalties(19) Unallowable with exception Fundraising & Investment Mgmt Costs(20) Unallowable with exceptions Gains & Losses on Depreciable Assets(21) Allowable with restrictions Goods and Services for Personal Use(22) Unallowable Housing & Personal Living Expenses(23) Unallowable Idle Facilities and Idle Capacity(24) Unallowable with exceptions Insurance and Indemnification(25) Allowable with restrictions Interest(26) Allowable with restrictions Interest – Substantial Relocation(26.b(6) Possible adjustment

8 Allowable Costs/Cost Principles (Cont) Selected Cost Item (Cont)A-21 Section J (Cont) Labor Relations Costs(27) Allowable Lobbying(28) Unallowable with exceptions Lobbying – Executive Lobbying Costs(28.h) Unallowable Losses on other sponsored agreements(29) Unallowable Maintenance and Repair Cost(30) Allowable with restrictions Materials and Supplies Costs(31) Allowable with restrictions Meetings and Conferences(32) Allowable with restrictions Memberships, Subscriptions, & Professional Activity Costs (33) Unallowable for civic, community, or social organizations Page Charges in Professional Journals(39.b) Allowable with restrictions Participant Support CostsNot specifically addressed Patent Costs(34) Allowable with restrictions Plant and Homeland Security Costs(35) Allowable with restrictions

9 Allowable Costs/Cost Principles (Cont) Selected Cost Item (Cont)A-21 Section J (Cont) Pre-Agreement Costs(36) Unallowable unless approved by the Federal Sponsoring Agency Professional Services Costs(37) Allowable with restrictions Proposal Costs(38) Allowable with restrictions Publication and Printing Costs(39) Allowable with restrictions Rearrangement and Alteration Costs(40) Allowable with prior approval (special) Reconversion Costs(41) Allowable with restrictions Recruiting Costs(42) Allowable with restrictions Relocation Costs(42.d) Allowable with restrictions Rental Costs – Building & Equipment(43) Allowable with restrictions Royalties and other costs for use of Patent (44) Allowable with restrictions Scholarship and Student Aid Costs(45) Allowable with restrictions Selling and Marketing Costs(46) Unallowable with exceptions

10 Allowable Costs/Cost Principles (Cont) Selected Cost Item (Cont)A-21 Section J (Cont) Specialized Services Facilities(47) Allowable with restrictions Student Activity Costs (48) Unallowable unless specifically provided for in the sponsored agreement Taxes(49) Allowable with restrictions Termination Costs Applicable to Sponsored Agreements (50) Allowable with restrictions Training Costs(51) Allowable for Employee Development Transportation Costs(52) Allowable with restrictions Travel Costs(53) Allowable with restrictions Trustees(54) Allowable with restrictions

11 Allowable Costs/Cost Principles (Cont) Basic Considerations to Determine Costs Reasonable and necessary (A-21, C.3) Conform with the allocability provisions (A-21, C.4) Consistent accounting treatment (A-21, C.10 & C.11) Cost incurred for the same purpose, in like circumstances Treated as direct costs only, or Treated as indirect costs only Conform with allowability of cost provision (A21, C.5) Be net of applicable credits (A-21, C.5) Be supported by appropriate documentation (A-21, C.4) POs, receiving report, canceled checks, effort reports

12 Allowable Costs/Cost Principles (Cont) Basic Considerations to Determine Costs (Cont) Be applied uniformly to Federal and non-Federal activities Fringe benefit allocation based on benefits received by different classes of employees Direct Costs Identified specifically with a particular sponsored project Can be assigned to a project relatively easily and accurately Indirect Costs (F&A) Incurred for common or joint objectives cannot be identified readily and specifically with a project Include both facilities and administrative costs (A-21, F.)

13 Allowable Costs/Cost Principles (Cont) Basic Considerations to Determine Costs (Cont) Indirect Costs (F&A) (Cont) Facilities – depreciation, interest associated with building debt, equipment, capital improvements, operation & maintenance, library expenses. Administration – general and administrative expenses, departmental administration, sponsored projects administration, student administration and services, and other administrative costs

14 Cash Management Compliance Requirements Cost reimbursement basis Program costs must be paid before requesting reimbursement Advanced funds Procedure to minimize time elapsed between receipt & expense Appropriate assignment of responsibility of cash drawdowns. Drawdowns are consistent with cash needs. Routine assessment of adequacy of subrecipient cash needs.

15 Davis-Bacon Act Construction Grants Only Wages for laborers and mechanics paid at prevailing wage rates. Construction contracts should include Davis-Bacon language. Contractors and Subcontractors should report weekly, for each week the contract work is performed.

16 Eligibility Eligibility is unique to each Federal Program Determine who can participate in program Individuals Groups of individuals Subrecipients Consultants Employees

17 Equipment and Real Property Management Equipment acquired with federal funds Title vests with the university in most cases Acquisition cost of $5,000 or more per unit. Use, manage, dispose of equipment per established procedure Property tags are placed on equipment Physical inventory periodically taken (at least every 2 years) Property records contain Description Source (vendor) Who holds Title Acquisition date and cost Percentage of Federal participation in cost Location Condition Disposition Data

18 Matching, Level of Effort, Earmarking Compliance Requirements Verifiable from the universitys records Do not include contributions from other federal programs Are necessary and reasonable to accomplish project Are allowable under applicable cost principles (A-21) Are not paid by Federal Government under another award Are provided for in the approved budget when required Conform to applicable provisions in A-110, laws, regulations and provisions of grant agreement.

19 Matching, Level of Effort, Earmarking Matching, Level of Effort, Earmarking Defined: Matching (Cost Sharing) – non federal contributions Specific amount or percentage Allowable non-federal costs incurred In-kind contributions Level of Effort Specific level of service to be provided from period to period Specific level of expenditures maintained from period to period Federal funds to supplement not supplant non-Federal funding Earmarking Minimum and/or maximum amount or percentage of the programs funding that must/may be used for specific activities, including funds provided to subrecipients

20 Period of Availability of Funds Compliance Requirements All transactions must be incurred within the stated period of performance (expensed or encumbered for goods and services) All unliquidated obligations (encumbrances) should be liquidated within 90 days of the end of the grant. Timely communication of period of availability requirements Grant close-out emails Periodic reporting of unliquidated balances Burn rate report Periodic review of expenditures before and after cut-off date

21 Procurement and Suspension and Debarment Compliance Requirements Procurement Provide reasonable assurance that procurement are made in compliance with the provisions in OMB Circular A-110 Procedures to verify vendors providing goods and services under a grant award have not been suspended or debarred. Requires staff to determine that entities receiving subawards of any value and procurement contracts equal to or exceeding $25,000 are not suspended or debarred. Checking the Excluded Parties Listing System (EPLS) Obtaining a certification, or Inserting a clause in the agreement

22 Program Income Definition Program income is gross income received that is directly generated by the federally funded project during the grant period. Requirement To provide reasonable assurance that program income is correctly earned, recorded, and used in accordance with the program requirements.

23 Program Income Compliance Identify Program Income Review grant award to see if program income is anticipated Determine or assessing Program Income Properly determined and calculated and from allowable sources Recording of Program Income Properly recorded in accounting system Use of Program Income Used in accordance with program requirements and A-110

24 Real Property Acquisition and Relocation Assistance Requirement To provide reasonable assurance of compliance with the real property acquisition, appraisal, negotiation, and relocation requirements. Uniform Relocation Assistance Act of 1970 Typically related to HUD grants

25 Reporting Requirement To provide reasonable assurance that reports include all activity of the reporting period, are supported by underlying accounting or performance records, and are fairly presented in accordance with program requirements. Timely reporting Financial Reporting Performance Reporting Special Reporting

26 Subrecipient Monitoring Requirements Award identification Identify to subrecipient the federal award information (CFDA#) During the award monitoring Reporting, site visits and regular contact with subrecipient Subrecipient Audits Audit confirmation from subrecipients verifying A-133 audit

27 Special Tests and Provisions Compliance Requirement Unique to Federal Program Program listed in compliance matrix by CFDA number Requirements listed in Part 4 and Part 5 of Supplement Programs not listed in compliance matrix Review grant agreement for requirements

28 Common Audit Findings Time and Effort Reporting Cost Sharing and Matching Subrecipient Monitoring Cash Management Findings in recent WSU audit related to reporting ??QUESTIONS??


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