Page 1 Discretionary Grants Administration David J. Downey Office of the Deputy Secretary Risk Management Service

Page 2  Overview of ED financial policies  Managing budget  Avoiding audit problems  Identifying key resources such as Grantmaking at ED Agenda

Page 3 Legislation Regulations EDGAR Cost Principles (2 CFR/OMB Circulars) Grant Award Notification (GAN) Your approved Application Tools of the Trade

Page 4 2 CFR Part 220 for Educational Institutions (see OMB Circular A-21) 2 CFR Part 225—for State, Local and Indian Tribal Governments (see OMB Circular A-87) Cost Principles

Page 5 2 CFR Part 230 – for Non-Profit Organizations (see OMB Circular A-122) 2 CFR Part 215 – Uniform Administrative Requirements for Grants and Other Agreements with IHE’s, Hospitals and Other Non-Profit Organizations (see OMB Circular A-110) Cost Principles

Page 6 ¯ Project’s success and financial accountability ¯ Submit required reports ¯ annual and final ¯ applicable financial reports Grantee Responsibilities 4 Valid & reliable data 4 Report on GPRA standards & indicators EDGAR §§74.51 & 80.40

Page 7  Clear, concise, and detailed  Consistent with institutional policy  Meets federal requirements  Aligned with GPRA  Revised within scope of project  Achieve project goals Monetary Road Map

Page 8 Provide for accurate, current, and complete disclosure of results regarding the use of project funds Document both the federal and non-federal funds used to carry out the project and track partners Maintain effective internal controls Financial Management Systems

Page 9 Allowable – permitted or not specifically prohibited Allocable – necessary for project’s success Reasonable – costs incurred by a “prudent” person Budget Items

Page 10 Budget Categories Contractual Other Indirect Costs Training Stipends Personnel Fringe Travel Equipment Supplies Internal Controls — Procedures for expending funds for:

Page 11 Required or voluntary… Honor commitments Primary grantee tracks contributions of partners Cost Sharing / Matching

Page 12  Non-Federal audit if expending $500,000 or more annually in Federal awards  Mail to Federal Audit Clearinghouse  Review Attachment C Audit Requirements OMB Circular A-133

Page 13  Missing time and effort reports  Poor record-keeping  Failure to obtain prior approval  Incorrect indirect cost rates  Unallowable costs  Lack of internal controls Common Audit Exceptions

Page 14  Request funds for immediate needs  Minimize time between requests & expenditures  Draws commensurate with approved scope Drawdown Policy

Page 15 1st Quarter More than 50% 2nd Quarter More than 80% 3rd Quarter 100% G5 Monitoring Report: Excessive Drawdowns Must return excess cash & interest to govt.

Page 16  Large amounts of unobligated funds at end of budget period  Excessive or infrequent drawdown of funds  Project goals not met ED Concerns

Page 17   Pre-award costs   Carryover   Budget transfers   Time extensions Grantee Flexibility

Page 18 Goals:  Increase flexibility  Increase accountability  Reduce paperwork burden  Develop relationships Grantee Flexibility Promote successful project outcomes

Page 19 Incurred up to 90 days before budget period begins Pre-award Costs No prior approval New & NCC awards

Page 20 Reasonable expectation of receiving a grant Incurred at own risk Funds not available until the budget period begins Not for cost over-runs Pre-award Costs Overview

Page 21 Incurred MORE than 90 days before budget period begins… Pre-award Costs Requires prior approval

Page 22 Unexpended funds “forwarded” without prior approval For any allowable cost within the approved scope Complete unfinished activities New activities within scope – Program Staff Carryover

Page 23 Program Office may require written statement:  How will unexpended funds be used?  When: At time of funding decision  New funds can be reduced Carryover Large Available Balance? Written statement required!

Page 24 No prior approval for most See exceptions in EDGAR… Training funds Transfer or contracting work OMB Cost Principles – other exceptions Budget Transfer

Page 25 Changes in project scope or objectives Changes in key personnel IHE & non-profit project directors > absent for more than 3 months > 25% reduction in time Need for additional Federal funds Prior Approval

Page 26 Final year…  One-time extension for up to one year without prior approval  Grantees should carefully consider time extension needs Time Extension

Page 27  No later than 10 days before project ends  State reasons for extension  Include revised expiration date Time Extension Written notice to Program Officer

Page 28  Annual substantial progress met  GPRA indicators met  Recordkeeping & fiscal accountability What ED Looks For

Page 29  Check grant terms, conditions and grant award attachments for possible exceptions  In rare circumstances, some flexibilities may be denied based on performance  When in doubt, call your Program Officer Important Reminders

Page 30 That’s my time… I appreciate yours! Best wishes in administering your U.S. Department of Education discretionary grants!