1. A Review of Federal Financial Management and Reporting Definitions
June 13th, 2011
2:00 - 3:00 p.m.

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7. Office of Grants Management
Presenter
Judi Fisher
Division Chief
Office of Grants Management

8. Importance of financial reporting
Fiduciary responsibility
Tremendous need
Scarcity of resources
Need for consistent financial reporting

9. Need for consistent financial reporting
Impacts:
ETA’s financial credibility
Future funding availability
Over-reporting obligations can lead to funds being returned
Under-reporting expenditures can lead to funds being returned

10. Purpose of TEGL
Impact
Definitions
Examples

11. Background: Cash Disbursements
Tracked in Real Time
Used by ETA as proxy for status of usage of funds
Grantee reports validate accuracy of ETA’s data

12. Background: Cash Disbursement
Inconsistencies:
Delay of PMS Drawdowns
Advances to subrecipients
Disbursements on state level reports vs. disbursements on local level reports
Timing: last day of reporting period

13. Background: Cash Disbursements
Reported disbursements should reflect only those made from Federal cash received

14. Background: Expenditures
Accrual reporting required
Better determination of actual costs of a program at a particular point in time
Reporting varies based on types of accounting systems used
Many accruals, particularly at subrecipient level, not being reported

15. Background: Obligations
Data provide expanded picture of how funds are being utilized
Accurate tracking leads to good grant management
Over-reporting of obligations can result in loss of funds

16. Definition: Cash Disbursement
The sum of actual cash disbursements for direct charges for goods and services, the amount of cash paid out for indirect expenses charged to the grant, and the amount of cash advances and payments made to subrecipients and subcontractors.

17. Examples: Cash Disbursement
Federal level:
Online transfers to grantees through HHS PMS
Federal Disbursement = cash receipt on grantee financial report
Governed by Uniform Administrative Requirements
Grantee level: transfer of cash to a subgrantee, vendor, or other payee, either by check, voucher, or an electronic transfer
Formula state level reports: Disbursement = Electronic transfer to local area
Formula local level reports: Disbursement = local area payment to subrecipient or other organization or payments for their own costs

18. Charges incurred during a given period for:
Definitions: Accrued Expenditure
Charges incurred during a given
period for:
Goods or other tangible property received
Services performed by employees, contractors, sub-grantees, subcontractors, and other payees
Other amounts becoming owed under programs for which no current services or performance is required

19. Definitions: Expenditures
Sometimes referred to as outlays
In general, charges made to the project or program in support of its authorized activities
Required to be reported on an accrual basis

20. Whether or not a cash payment is made
Accrued Expenditures
Total accrued expenditures =
Costs for goods and services received
Whether or not a cash payment is made

21. Accrued Expenditures
If using cash basis, must also have a method to track and report on an accrual bases
Usually accrual worksheets
Not every accrual accounting system captures all accrued expenditures. May also need to develop worksheets to capture additional accruals that must be reported
i.e. Training received by not yet invoiced

22. Examples: Accrued Expenditures
All costs of goods and services received and paid for
Salaries and benefits earned for work performed or leave taken (whether or not payroll checks issued)
Costs of services received by clients/participants (i.e. child care, transportation) for which grantee has legal requirement to pay
Cost of training received by enrolled participants

23. Examples: Accrued Expenditures
Tuition
Tuition often billed months after training received. Therefore cost of tuition is accrued even though not billed
Tuition is specific exception to prohibition of paying for services before received (Comptroller General)
Full cost of tuition for current semester can be expensed up front when paid in advance or it can be accrued as participant receives training.
Provides more realistic assessment of actual costs incurred for training

24. Definitions: What is an obligation?
29 CFR 97.3
Orders placed, contracts and subgrants awarded, goods and services received during a given period
Payment during the same or future period
Legal commitment to pay
Occurs at time services rendered
Before services rendered where binding agreement exists
“Definite and certain” – Comptroller General

25. Examples: Obligations
Subgrant agreements
Purchase orders
Cash disbursements

26. Obligation vs. Encumbrance
But what about…
Projected staff time?
Future rent payments?
Future or projected training?
Individual Training Accounts (ITAs)?
Items budgeted during period of grant award?

27. What is an encumbrance?
An anticipated expenditure or funds restricted for anticipated expenditures
Projected costs due in a current or future period
Is not be paid in advance of actual work
Expenditure is not definite or certain
No legal liability to pay
Not reported to ETA

28. Example: Projected Training Costs
Are NOT obligations
Do not meet definition in 29 CFR 97.3 of definite and certain
Do not constitute a legal liability
Comptroller General Decision B – period covered by pre-payment only extends to current period participant is registered and attending classes

29. Examples: Individual Training Accounts
NOT an obligation at the time issued to participant.
Equivalent to budgeted limit for training
Commitment to participant, but not legal commitment until participant registers for classes
Amount of ITAs for which enrollments have not occurred are encumbrances

30. Only current expenditure and the cancellation penalty are obligations
Examples: Leases
Entire amount NOT an obligation – rent payments contingent on occupancy
Only current expenditure and the cancellation penalty are obligations

31. Why is this important?
Directly affects funding availability
Over-reported and unliquidated obligations may have funding authority expire
Funds returned to U.S. Treasury
Appearance is that program did not require all the funds previously appropriated

32. Please enter your questions into the Chat Room!
Question and Answer Period
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33. Online Training: Resources Intro to Financial Reporting
Financial Management Principles

34. Online Training: Resources
List of additional financial and administrative online training in TEN and 49-08
/TEN49-08.pdf
/ten39-09.pdf

35. Comprehensive One-Stop Financial Management Technical Assistance Guide
Resources
Comprehensive One-Stop Financial Management Technical Assistance Guide
ust_02.pdf

36. ETA Advisories and Training and Employment Guidance Letters:
Resources
ETA Advisories and Training and Employment Guidance Letters:

37. For additional Information or Assistance
Questions following the webinar can be directed to:
Prime Grantees can contact their Federal Projects Officer
Contact info for ETA’s Regional Offices:
ault.cfm?CFID= &CFTOKEN=
Subrecipients should contact the prime grantee to request technical assistance.

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