Financial and Administrative Management TAA-CCCT Grants November 2, 2011

Fiscal and Administrative Requirements Impact program design Failure to comply may result in sanctions Accurate financial information is critical to achieving program success

It’s all very simple… Written Policies and Sound Business Practices Followed Consistently Over Time With Each Funding Stream Treated Equally With All Costs Being Necessary and Reasonable Would be done similarly by a Prudent Person Ensuring Proportionate Share and Benefits Received

Rules Affecting Programs Enabling legislation Uniform administrative requirements Grant management rules Cost principles Determination of allowable costs Program regulations Program activities Both allowable and unallowable Cost category restrictions Statement of Work Description of grant outcomes

The Pyramid of Grant Requirements Suspension Debarment Drug Free Workplace Lobbying Guidance Policy Manuals Davis Bacon Act Terms and Conditions Program Regulations OMB Circulars Program Statutes A&A Govt.-Wide Govt.-Wide Agency & Programs

Authorizing Legislation Trade Adjustment Assistance Act of 1974 (Section 279(b)) The Health Care and Education Reconciliation Act of 2010 (P.L. 111-152)

Uniform Administrative Requirements DOL adapted OMB Circular A-110 under 29 CFR Part 95 DOL continues to apply the requirements of 29 CFR Parts 95 and 97 until 2 CFR part 215 becomes final. 7

All Financial Systems Must adhere to 7 separate standards 1. Financial reporting System must permit preparation of Federal financial reports Must report accruals 2. Accounting records Adequately identify grant funds Awards, obligations, assets, liabilities, income and expenditures Supported by source documentation Must be maintained in accordance with GAAP 8

Financial Standards 3. Internal controls 4. Budget controls System to protect integrity of funds Accountability for cash, property & other assets 4. Budget controls Comparison of actual expenditures (outlays) to approved budget plan Compliance with line item requirements Prevents overspending 9

More Financial Standards 5. Allowable costs Only allowable costs charged Only allocable costs charged 6. Source documentation Costs must trace to authorizing document Proof that costs are allowable & allocable 7. Cash management System to control cash assets 10

Procurement Procurement Requirements Procurement Regulations: Open and free competition Sole source Procurement Regulations: 29 CFR Part 95 or Part 97 Procurement standards for partners and subcontracts

Grant Management Requirements Program Income Non-federal audits Property Management Equipment Supplies Reports and Records After-the-Award requirements Closeout

Federal Cost Principles Set of government wide rules Now codified at 2 CFR Incorporated by reference - Uniform Administrative Standards 29 CFR 97.22 29 CFR 95.27 Cost principles Define conditions for charging costs Types of Allowable costs Allowable Unallowable Allowable with conditions

The Four Sets of Cost Principles 2 CFR 220 (OMB A-21) Educational Institutions 2 CFR 225 (OMB A-87) State/Local Governments and Indian Tribes 2 CFR 230 (OMB A-122) Non-profit Organizations 48 CFR 31 Contract Cost Principles and Procedures dealing with Commercial Organizations 14

Purpose Provides that the Federal government bears its fair share of costs except where restricted or prohibited by law Reasonable & Necessary “Prudent Person Rule” Allocable Clearly benefit program Both direct & indirect costs 15

Selected Items of Cost 3 types of Costs If Cost not Treated Allowable Unallowable Allowable with Conditions If Cost not Treated Principles of necessary and reasonable apply 16

Allowable Costs Hiring and training of instructors and staff to develop curricula Leasing space Implementing or upgrading IT infrastructure Professional services from subject matter experts 17

Allowable with Conditions Examples Advertising/Public Relations Equipment (with prior approval) Alteration of facilities (with prior approval) Prior Approval Needed BEFORE incurring cost May exist in grant agreement 18

Unallowable Costs Costs of other grant programs Interest, fines & penalties Contingency reserves Donations and contributions Real property purchase/ construction Exception: Compliance with ADA Requirements 19

Allowable Cost Standards Necessary To achieve grant outcomes Reasonable Sound business practices Allocable Only charge costs that clearly BENEFIT grant Additional standards

Financial Reporting 21

Financial Reports ETA 9130 Electronic reporting system Use of passwords and pins Quarterly reports Cumulative from beginning of project Accrual basis Due 45 days after quarter end

Why is Accrual Reporting Important? Required for ALL ETA programs Provides more reliable data Cash basis understates true spending Failure to report on accrual basis may result in loss of funds 23

What does Accrual Reporting Mean? Transactions are recognized in accounting period in which they occur Revenue is recognized when received or earned Expense is recognized when incurred May be cash disbursement May be delivery of goods/services 24 24

Types of Accrued Costs Salaries of employees Training Travel expenses Rental costs 25 25

The ETA 9130 26 26

9130 Reporting lines Cash Receipts Cash Disbursements Expenditures Total administrative expenditures Unliquidated obligations Leveraged resources Program Income Other Federal funds expended

Financial Reporting Contacts Initial Contact – Federal Project Officer On-Line Reporting System - Password and PIN -Shantay Logan – logan.shantay@dol.gov 28 28

Additional Resources Financial Management Training Tutorial Workforce3One Website (www.workforce3one.org) IN DEVELOPMENT: http://etareporting.workforce3one.org Tutorial Titles: Introduction to Financial Reporting (ETA -9130) Cash Management Cost Allocation, Cost Pooling & Time Distribution Indirect Costs and Applying for an Indirect Cost Rate for Non-Profits Cost Classification Cost Principles 29

Next Session – November 9 TAA CCCT Funding Restrictions Indirect Cost Rates Administrative Costs Salary and Bonus limits Use of funds for Wages Supportive Services Real Property

Questions?? 31 31