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Executive Office of the President of the United States Office of National Drug Control Policy U.S. Department of Health.

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Presentation on theme: "Executive Office of the President of the United States Office of National Drug Control Policy U.S. Department of Health."— Presentation transcript:

1 Executive Office of the President of the United States Office of National Drug Control Policy U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration New Grantee Fiscal & Administrative Training October 18, 2012 Drug Free Communities

2 To ask a question using the Net Conference Q&A tool: Click on the Q&A button on the meeting console. A new window pops open. Type your question in the white area At the top, then press “Ask”.

3 3 Sessions 1. Grantee Financial Management Requirements - Rocco LaMonaca 2. Payment Management Overview - Raynette Robinson 3. Grants Management Overview - Virginia Simmons

4 Executive Office of the President of the United States Office of National Drug Control Policy U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration Grantee Financial Management Requirements Drug Free Communities Presenter: Rocco LaMonaca SAMHSA/DGM

5 Objectives U.S. Dept. of Health & Human Services’ (HHS) prescribed standards for grantee financial management systems SAMHSA Financial Capability Review (FCR) Overview of the key controls needed to administer the award

6 Financial Advisory Services Office Located in the Division of Grants Management within the Office of Financial Resources

7 FASO Responsibilities Financial Capability Reviews OMB Circular A-133 Audit Resolution High Risk & Delinquent Audits Financial Advisory

8 HHS Regulations Financial management requirements 45 CFR Part 74.21 Educational Institutions, Hospitals, and Non-Profit Organizations 45 CFR Part 92.20 States, Local Governments and Tribal Organizations

9 Cost Principles OMB Circular A-122 Non-Profit Organizations OMB Circular A-87 State & Local Governments & Indian Tribal Gov’ts OMB Circular A-21 Educational Institutions Appendix E 45 CFR 74 Hospitals

10 Financial Capability Review Why FCRs are important: Help grantees succeed fiscally & programmatically Having sound fiscal policies is good business practice and helps protect Federal and grantee dollars against fraud, waste and abuse Help equip grantees with adequate financial systems if the grantee decides to apply for future Federal funding

11 Financial Capability Review How FCRs are performed: Review a recent report on an audit performed in accordance with OMB Circular A-133 (a.k.a. Single Audit); or Obtain grantees’ recent financial statements together with accounting & personnel policies & procedures (P&P) Grantee Financial Management Requirements guide helps grantees ensure the necessary controls are incorporated prior to submitting P&P,


13 Financial Capability Review Based on the review: Additional information may be requested; or Conclude the organization has a financial management system capable of adequately administering the award.

14 High Risk During the FCR, FASO may recommend high risk if: information is not received as requested; or Indications of significant financial system weaknesses. Note: SAMHSA will not restrict an award pending completion of the FCR unless a serious deficiency is found

15 High Risk HHS regulations (45 CFR 74.14 or 45 CFR 92.12) permit awarding agencies to impose additional requirements on recipients’ awards for the following reasons: History of poor performance; Is not financially stable; Financial management system that does not meet prescribed standards; or Does not conform to terms & conditions of award.

16 High Risk High risk grantees must request approval of allowable expenditures via SF 270 prior to drawdown from Payment Management When the required corrective action is satisfied, SAMHSA will promptly remove high risk designation & account restriction.

17 Suspension & Termination Suspension & termination Appeal Rights Suspension & Termination HHS Departmental Appeals Board Does not apply to High Risk classification

18 Financial Mgmt. Requirements Allowability of Costs Expenditure Analysis Cash Management Indirect Costs Annual Audits Credit Cards Accounting System Timekeeping Bank Statements Travel Disb./Procurement Property Control Matching/Cost Sharing Conflict of interest Consultants/Subcontracts Drug-Free Workplace Program Income

19 Financial Mgmt. Requirements Allowability of Costs Costs must be reasonable, allocable, and adequately documented A cost is reasonable if it does not exceed what a prudent person would incur under similar circumstances A cost is allocable if the goods or services benefited the project A cost is adequately documented if it is supported by accounting records and source documents (i.e., timesheets & payroll records, contracts, invoices, etc.)

20 Financial Mgmt. Requirements Cash Management – Drawdowns Limited to minimum amounts needed to cover allowable project costs Timed in accordance with the actual immediate cash required to carry out the approved project Not be made to cover future expenditures. PMS permits advance drawdown of funds only for expenditures made w/in the next 72 hours

21 Financial Mgmt. Requirements Annual Audits Audits must be performed in accordance with OMB Circular A-133 for FYs with expenditures under Federal awards of $500,000 or more Reports on these audits must be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt or nine months after your organization’s FY end - Sections 200 and 320 of Office of Management and Budget (OMB) Circular A-133

22 Financial Mgmt. Requirements Accounting System Must be able to separately report revenue and expenditures by Federal program as well as other programs Maintain a Chart of accounts

23 Financial Mgmt. Requirements Bank Statements Opened and reviewed by a grantee official (i.e., treasurer, president) not authorized to sign checks or perform the bank reconciliation, but who is familiar with financial activities Reconciliation performed in a timely manner by an employee not authorized to sign checks. Define timely (i.e., within 14 days, etc.) Reconciliation approved by grantee official outside the payment process but familiar with financial activities

24 Financial Mgmt. Requirements Disbursements/Procurement Documentation maintained to support all disbursements Blank checks safeguarded Disbursements pre-approved (indicate by whom); Expenditures reasonable Two signatures on all checks for purchases over $1,000 Organization officials authorized to sign checks designated in the policies

25 Financial Mgmt. Requirements Matching or Cost Sharing Contributions (including cash and 3 rd party in-kind) must be Verifiable from the grantee’s records Not included as contributions for any other federally-assisted project Necessary & reasonable for proper and efficient accomplishment of the project or program objectives Not paid by the Federal Government under another award (except where authorized by Federal statute) Allowable, similar to the grant’s Federal expenditures, and provided for in the approved budget - 45 CFR 74.23 or 45 CFR 92.24 & Part I-24 HHS Grants Policy Statement

26 Financial Mgmt. Requirements Consultants & Subcontracts Nature and scope of services that may be outsourced In-house capabilities must be evaluated before obtaining external assistance Selection process described Method for ensuring costs and fees are reasonable Prior to selection, check General Services Administration’s (GSA) Excluded Parties List System & HHS Office of Inspector General’s (OIG) List of Excluded Individuals & Entities

27 Financial Mgmt. Requirements Expenditure Analysis Actual vs. budgeted expenditures are to be compared periodically Significant variances investigated, resolved, and documented to ensure actual expenditures do not exceed amounts budgeted for the grant period

28 Financial Mgmt. Requirements Indirect Cost Any existing or planned indirect cost rates and the type of rate used If all costs are charged directly to the award, the method used to allocate costs that benefit more than one cost objective must be described in detail

29 Financial Mgmt. Requirements Credit Cards All expenditures be pre-approved Expenditure amounts & types limited Personal expenditures prohibited All receipts submitted for review & comparison with credit card statements before payment

30 Financial Mgmt. Requirements Timekeeping Salaries and wages based on actual time employees worked & be supported by timesheets that separately report total time worked on each project & leave Timesheets certified as accurate by the employee or supervisor familiar with the employee's activities Salaries & wages charged to Federal awards cannot be based on budgets or estimates - Attachment B, Sec. 8.h & 8.m, of OMB Circulars A-87 & A-122


32 Financial Mgmt. Requirements Travel Expenses be reasonable, necessary & pre- approved Mileage, meals & incidentals and lodging rates be limited to rates published in the GSA Federal Travel Regulation Airfare limited to coach & car rental limited to mid- size Travel costs reimbursed based on travel vouchers, expenditure reports or the like listing each cost individually along with receipts.

33 Financial Mgmt. Requirements Property Control Property records must include a description, cost, purchase date, source of funding, location, and condition Physical inventories conducted at least every other year & reconciled with property records Property purchased with Government funds tagged and safeguarded to prevent loss or theft

34 Financial Mgmt. Requirements Conflict of Interest Prohibit the appearance and existence of conflict of interest situations for employees, officers, and agents of the organization Examples of conflict of interest situations given Define the code of conduct for conflict of interest situations, i.e., nature of penalties for violations. - 45 CFR 74.42 & 43; Part II-7 HHS Grants Policy Statement; 45 CFR 92.36

35 Financial Mgmt. Requirements Drug Free Workplace Unlawful manufacture, distribution, dispensing, possession, or use of controlled substances is prohibited in the workplace As a condition of employment, employees must notify management in writing within 5 calendar days, if convicted of violating a criminal drug statute Appropriate personnel action must be taken, within 30 calendar days, against any convicted employee

36 Financial Mgmt. Requirements Drug Free Workplace (cont.) Federal agencies must be notified in writing, within 10 calendar days, if any employee engaged in the performance of an award is convicted of violating a criminal drug statute - 45 CFR 82.205 & 225

37 Financial Mgmt. Requirements Program Income Further the eligible project or program objectives Finance the non-Federal share of the project or program Deduct it from the total Federal share of project or program allowable costs

38 Useful Websites SAMHSA Grants Management Website:

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