1. NCJA’s National Forum Financial Management Training
Office of the chief financial officer

2. No Question is a Dumb Question

3. 2 CFR Part 200 Uniform Guidance

4. Background
The Office of Management and Budget (OMB) published the Uniform Guidance (UG) on December 26, 2013.
The UG consolidated (8) eight grant circulars into a single document (2 CFR Part 200).
Combined the Administrative Requirements, Cost Principles, and Audit Requirements.

5. Uniform Requirements
Implemented by federal agencies on December 26, 2014.
There were (5) five updates published in CY-15.
Updates consisted of technical corrections (add and/or delete language).
Electronic version (e-CFR) frequently updated

6. Objectives Streamline regulations to ease administrative burdens.
Strengthen oversight of federal awards to reduce the risk of fraud, waste, and abuse.
To achieve these goals, some of the UG policy reform included:
Increase accountability standards for non-federal entities;
Provide for consistent and transparent treatment of costs.

7. Administrative Funds Indirect Costs Direct Costs 10% percent

8. Administrative Funds
Allows pass-through entities to utilize a specified percentage of an award to administer the program.
Administrative funds may be billed either directly or indirectly.
Funds must be tracked separately and reported on the SF-425.
Administrative
Funds

9. Indirect Costs
Indirect costs generally are costs not readily identifiable with a particular grant or contract.
Rate must be current to claim under a grant program.
Implements the cognizant Federal agency concept.
Movement of funds into or out of the indirect cost category requires prior approval (GAN).

10. De Minimis
Any non-federal entity that has never received a negotiated indirect cost rate may elect to charge a de minimis rate of 10% of modified total direct cost (MTDC).
Rate may be used indefinitely or until the entity elects to negotiate for a rate.
Costs must be consistently charged as either indirect or direct – (not both).

11. Performance vs. Compliance

12. Definition Performance: Performance measure: Performance measurement:
The accomplishment of a given task measured against known standards – (preset).
Performance measure:
A metric used to gauge program or project performance.
Performance measurement:
The ongoing monitoring and reporting of program progress and accomplishments, using pre-selected performance measure.

13. Uses of Performance Information
Provides an unbiased way to assess performance.
Assess allocation of resources to support activities.
Provides information for policy/project decision-making.
Set program priorities (difficult to do without evaluation).
Assess whether program/project goals are being met.

14. Definition Compliance:
The action of complying with rules, regulations, and guidelines.
(i.e. terms and conditions, reporting requirements)

15. Reporting Requirements (SF-425) Federal Financial Report - FFR

16. Federal Financial Report (SF-425)
Quarterly Federal Financial Reports are submitted through the Grants Management System (GMS) at
Grant recipients will be required to report grant expenditures utilizing the Federal Financial Report Form (SF-425).
The SF-425 quarterly report must be submitted no later than 30 days after the end of each calendar quarter. 16 16

17. GMS
CLICK HERE 17 17

18. GMS
cinderella
********* 18

19. GMS 19 19

20. . GMS 2017-XX-XX-1234 Smallville Police Department 123 Main Street
Nicetown, USA .
10/01/2016
09/31/2018
03/31/2017 20

21. GMS

22. GMS $ $ $ $ $ $ $ 22

23. $
GMS $
$500.00 $ $
$400.00
$400.00
$0.00 23

24. GMS
10.0
01/01/2016
12/31/2017
$900.00
$900.00
$900.00
$900.00 24

25. GMS 25 25 Chief Financial Officer jdoe@smallvile.gov 01/25/2017 Mr
John
Doe
Chief Financial Officer
01/25/2017 25 25

26. 2009-XX-XX-1234
GMS 26 26 26

27. Grant Monitoring
MONITORING 27

28. Monitoring Discussion
Grants Financial Management Division’s Mission
Ensure stewardship over Federal funds awarded:
On-Site financial reviews
OCFO-Based financial reviews
Technical assistance to grantees 28

29. Monitoring Discussion
How are grants selected for on-site review?
Risk assessment
Dollar amount of award
New grant or grantee
Program Office Request
Grantee’s request for technical assistance
Problems identified through OCFO-Based review
Random sample

30. Monitoring Discussion
What will be reviewed during the on-site visit?
Internal Controls
Accounting System
Accounting procedures including cash management procedures
Federal Financial Reports (SF-425s)
Test and Analyze expenditures
Provide technical assistance

31. Monitoring Discussion31

32. Monitoring Discussion
If there are deficiencies in your objectives and/or you have deviated from the budget without prior approval from the program office …..
CORRECTIVE
ACTION PLAN
DEVELOP
OCFO will help you get back on track 32

33. Monitoring Discussion
What are the objectives of the OCFO-based review?
Conduct an analysis of grant activity to date
Analyze Federal Financial Reports (SF-425s)
Determine compliance with audit report submission requirements
Evaluate payments -- determine excess cash
Identify grantees who need on-site financial review

34. Primary Grantee’s Responsibility
The primary grant recipient is responsible for monitoring the subrecipient and ascertaining that all fiscal and programmatic responsibilities are fulfilled, including compliance with Federal rules and regulations (e.g., 2 CFR Part 200, EEO compliance). 34

35. Ten Top Monitoring Findings (FY 2016)
Procedures not documented or need improvement.
FFR does not reconcile to grantee’s accounting records.
FFATA reporting requirements not met.
Internal control weakness – procedures not followed and lack of segregation of duties.
Budget category not properly tracked. 35 35

36. Ten Top Monitoring Findings (FY 2016)
Excess cash-on-hand.
Indirect costs charged improperly.
Unreasonable cost identified.
Award special conditions violated.
Indirect costs not reported on FFR. 36 36

37. Questions & Answers (Q&A)

38. Subrecipient Requirements and Monitoring

39. Subrecipient or Contractor?
A non-federal entity may concurrently receive Federal funds as a recipient, subrecipient, and a contractor.
Therefore, the pass-through entity must determine whether each agreement cast the party receiving the funds in the role of subrecipient or a contractor.
The Federal awarding agency may supply and require recipients to comply with additional guidance to support determination.

40. Subrecipient or Contractor?
Definitions:
Subrecipient – means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program, but does not include an individual that is a beneficiary of such a program – (200.93).
Contractor – means a dealer, distributor, merchant, or other seller providing goods or services that are required for the conduct of a Federal program. These goods or services may be for an organization’s own use or for the beneficiaries of the Federal program, but creates a procurement relationship with the contractor.

41. Characteristics of a Subrecipient vs. Contractor
Characteristics of a Contractor
Determines who is eligible to receive what Federal assistance.
Provides the goods and services within normal business operations.
Has its performance measured in relation to whether objectives of a Federal program were met.
Provides similar goods or services to many different purchasers.
Has responsibility for programmatic decision making.
Normally operates in a competitive environment.
Is responsible for adherence to applicable program requirements specified in the Federal award.
Provides goods or services that are ancillary to the operation of the Federal program.
Uses Federal funds to carry out a program specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity.
Is not subject to compliance requirements of the Federal program as a result of the agreement, though similar requirements may apply for other reasons.

42. Subrecipient Requirements
The pass-through entity is responsible for ensuring that subrecipients use grant funds in accordance with all federal and program guidelines.
Responsible for managing the day-to-day operations of subrecipients to ensure they achieve their performance objectives on schedule and within budget.
If problems arise, take the appropriate actions to get the subrecipient back on track.
The use of subrecipients does not relieve the pass-through entity of their responsibilities.

43. Subrecipient Requirements
A pass-through entity must have established policies and procedures on how subawards will be made and subrecipients managed.
Those procedures must be in writing and clearly describe the pass-through entity’s responsibility for pre-award and post-award requirements.
A pass-through entity must have established written policies and procedures for subrecipient monitoring, as described in 2 CFR Part 200 §
If the pass-through entity does not have written subrecipient monitoring procedures, funds will be held.

44. Subrecipient Requirements
Performing a risk assessment of each subrecipient for noncompliance with Federal requirements and the terms and conditions of the subaward to determine the appropriate level of monitoring needed is a new concept under 2 CFR Part 200 Uniform Requirements.
The attributes used by the pass-through entity to evaluate the overall risk of their subrecipients should be customized to suit the specific program.
There are a number of different attributes to consider when assessing risk. The final score should clearly identify the risk level as either high, medium, or low.

45. Subrecipient Monitoring
Pass-through entity:
Must provide reasonable assurance that sub-recipients are incompliance with Federal program guidelines and requirements.
Inform each sub-recipient of CFDA title and number, award name and number, and award year.
Advise sub-recipient of requirements imposed on them by Federal laws, regulations, and provisions of contracts or grant agreement.
Advise of any supplemental requirements imposed by the pass-through entity.

46. Subrecipient Monitoring
Pass-through entity: (cont’)
Monitor the activities of sub-recipients to ensure funds are used for authorized purposes and performance goals are achieved.
Ensure that sub-recipients that expend $750,000 or more in their fiscal year follow the audit requirements in OMB Uniform Requirements (2 CFR Part ).
Issue a management decision on audit findings within 6 months after receipt of the sub-recipient’s audit report.
Ensure that the sub-recipient takes appropriate and timely corrective action.

47. Subrecipient Monitoring
Pass-through entity: (cont’)
Require each sub-recipient to permit the pass-through entity and auditors to have access to the records and financial statements as necessary.

48. Subrecipient Reporting
Requires prime recipients to report on first-tier subawards of $25K or more.
Requires prime recipients to report executive compensation for prime or subawards if:
The organization received 80% or more of its annual gross revenues in Federal awards and those revenues are greater than $25 million; and
The public does not have access to information about executive compensation through periodic reporting. 48 48

49. When to Report
For Federal awards of $25K or more the prime recipient must report first-tier and executive compensation data.
Data must be reported in FSRS the following month after the obligation is made.
Example: Awards made during October will have until November 30th to report. 49 49

50. What Your Sub-recipient Should Know
Seek prior approval for certain costs and extensions to grant closing date.
Method in which they will be paid and any documentation that should accompany the claim.
Documenting the allowable sources of matching funds.
Prohibition of using the federal award to supplant existing resources.
Maintain property records for equipment and perform physical inventory of equipment.
Accounting for and using program income.

51. Factors to Consider When Monitoring Sub-recipients
Dollar amount of awards provided to sub-recipients.
Number of sub-recipient can effect how often you monitor them.
Complexity of program requirements.
Sub-recipient’s control environment (i.e., staffing levels, computer system, etc.).
Results of prior audits.
Sub-recipient with frequent requests for budget modifications, extensions, or exceptions to the rules.

52. When Monitoring Your Sub-recipients
Perform an on-site visit to review financial and programmatic records and observe operations.
Reconcile the sub-recipient’s budgeted expenditures to actual.
Offer sub-recipients technical assistance where needed.
Perform desk reviews to ensure allowable use of grant funds.
Have a second party within your organization periodically review the sub-recipient monitoring plan and reports.

53. Document Your Efforts
Maintain a file or record of the desk reviews that you perform and the results.
Develop a schedule of dates to perform on-site visits.
Document the work performed and the results of on-site visits.
Document corrective action taken by sub-recipient and follow-up work performed by you.
Retain a copy of the management decisions you issued in response to sub-recipient audit findings.

54. OFFICE OF THE CHIEF FINANCIAL OFFICER
Sanctions & Penalties
If the subrecipient fails to comply with Federal statues, regulations or the terms and conditions of the subaward, the pass-through entity can impose additional conditions.
If the pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the pass-through entity can take one or more of the following actions:
Temporarily withhold funds pending correction of the deficiency;
Disallow all or part of the activity not in compliance;
Wholly or partly suspend or terminate the subaward;
Initiate suspension or debarment;
Withhold future subawards; or
Other legal remedies that may be available.

55. Questions & Answers (Q&A)