1. TECHNOLOGY MANAGEMENT FORUM
FINANCE, TALENT AND
TECHNOLOGY MANAGEMENT FORUM

2. Federal Government Grants: Is My Organization Ready?

3. Rebecca Field, CPA, CISA, CRISC
Manager, Grant Compliance Services
ClifronLarsonAllen LLP

4. Federal Grants: Pros Monetary rewards
Diversified and possibly steady funding source
Easier to raise money from other government and private sources
Credibility and public exposure
Further mission of organization
Impact communities

5. Federal Grants: Cons Proposals can require significant time and effort
Grants are competitive
Grant may be reimbursement basis, so could be hard for cash-strapped organizations
Strict compliance requirements
May require additional personnel and resources to properly manage
Noncompliance could require returning fundsh

6. Federal Grants
Recognize difference between “Easy Money” and “Free Money”
Federal grants have large number of compliance requirements
Designed to help prevent grant fraud and misuse
Generally, benefits far outweigh the frustrations.
Consider the fact that you can receive funds to help individuals in your community, the red tape and bureaucracy is more or less a minor inconvenience.
Ultimately your organization must be the one to decide if a government grant is the right opportunity.

7. Sources of Requirements
Federal / State Statues and Regulations
Terms and Conditions of federal awards
2 CFR Part 200 “The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”
Referred to as “Uniform Guidance”

8. Uniform Guidance Split into 6 Subparts:
Subpart A – Acronyms and Definitions
Subpart B – General Provisions
Subpart C - Pre Federal Award Requirements
Subpart D – Post Federal Award Requirements
Subpart E – Cost Principles
Subpart F – Audit Requirements

9. Administrative Requirements
Standards for Financial and Program Management
Property Standards
Procurement Standards
Performance and Financial Monitoring and Reporting
Subrecipient Monitoring and Management
Record Retention and Access

10. Financial Management System
Must include records documenting compliance
Must allow for the preparation of required reports
Must allow for the tracing of funds to a level of expenditures to show that they have been used according to grant terms and conditions
Requires written procedures for determining the allowability of costs

11. Financial Management System
Generally does not require a new or “fancier” software system
Most nonprofit accounting systems can meet the requirements of a compliance financial management system
Grant expenditures can be done within the general ledger, with specific account codes / cost centers
If extensive recording has to be done outside of the accounting software, may need to upgrade

12. Procurement Standards
Uniform Guidance expanded requirements from previous regulation (Circular A-110), specifically around competition
Organization must have written procurement policies in place
Uniform Guidance allows for 5 methods of procuring goods and services

13. Procurement Standards
Allowable methods
of procurement:

14. Procurement Standards
Micro-Purchase
< $3,500, No quotations, Equitable distributions
Small Purchases
Up to $150,000, Rate quotations needed from at least 2 sources, No cost or price analysis
Sealed Bids
> $150,000, Generally for Construction projects, Price is a major factor
Competitive Proposals
> $150,000, RFP with evaluation methods
Sole Source
Unique, Public emergency, Authorized by agency or pass through entity, No competition

15. Procurement Standards
Organizations Must:
Take all necessary affirmative steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible
Engage in full and open competition
Perform a cost or price analysis when purchase in excess of Simplified Acquisition Threshold (Currently at $150,000)
Keep Procurement records must be maintained sufficiently to detail the history of all procurements

16. Procurement Standards
Individual Conflict of Interest Policies need to be in place
Organizational Conflict of Interest also needs to be in place
Can not procurement with a parent, affiliate, or subsidiary organization because relationship is unable or appears to be unable to be impartial

17. Subrecipient Monitoring
Subaward purpose of carrying out a portion of a federal award and creates a federal assistance relationship
Subrecipient determines eligibility, has performance measured in relation to objectives of program, has responsibility for programmatic decision making; and uses the Federal funds to carry out a program for a public purpose specified in authorizing statute, as opposed to providing goods or services for the benefit of the pass-through entity.

18. Subrecipient Monitoring
Contract is for the purpose of obtaining goods and services for the non-federal entity’s own use and creates a procurement relationship
Contractor provides the goods and services normally, provides similar goods or services to many different purchasers; provides goods or services that are ancillary to the operation of the Federal program and
is not subject to compliance requirements of the Federal program

19. Subrecipient Monitoring
Subaward must contain specific information as outlined in UG
Federal Award identification
Requirements so that federal award is used in accordance with terms and conditions of original federal award
Description of performance or financial reports due
Indirect cost rate – either an approved rate, negotiated rate, or deminimis rate
Appropriate terms and conditions concerning closeout of the subaward

20. Subrecipient Monitoring
Pass-through entities must evaluate each subrecipient's risk of noncompliance by performing a risk assessment
prior experience
results of previous audits
new personnel or new or substantially changed systems
extent and results of Federal awarding agency monitoring

21. Subrecipient Monitoring
Risk Assessment must be documented.
Subrecipient Risk Assessment Matrix:
Results of risk assessment determine what type of monitoring should be performed on sub-recipient

22. Subrecipient Monitoring
Pass-through entities must monitor activities of the subrecipient:
Reviewing financial and programmatic reports
Verify that audit is being performed (if necessary) and following up on audit findings and deficiencies
Issuing management decision on audit findings

23. Subrecipient Monitoring
Additional monitoring tools that may be used depending on risk assessment of sub-recipient:
Providing training and technical assistance
On-site reviews of program operations
Arranging for agreed upon procedures

24. Time and Effort Reporting
Charges must be based on records that accurately reflect the work performed and must:
Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated
Reasonably reflect the total activity for which the employee is compensated
Comply with the established accounting policies and practices of the non-federal entity
Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award

25. Time and Effort Reporting
Budget estimates may be used for interim accounting purposes, provided that:
System for estimating must produce “reasonable approximations” of activity actually performed
Significant changes in work activity) are identified and entered into records timely
Must be a process to review the charges made based on budget and adjustments after the fact

26. Time and Effort Reporting
When records do not meet the standards, federal government may require personnel activity reports, including prescribed certifications, or equivalent documentation
Need to determine what is appropriate for your employees working on federal awards – not all individuals working on federal grants have the same situation

27. Required Policies Charging of Costs Policy Payment and Billing Policy
Procurements Standards Policy
Conflicts of Interest Policies

28. Best Practice Policies
Financial Management Systems Policy
Documentation of Internal Controls
Cost Sharing and Matching Policy
Program Income Policy
Budget and Program Revisions Policy
Property and Equipment Standards Policy
Monitoring and Reporting
Subrecipient Procedures Policy
Record Retention Policy
Grant Award and Closeout Policy

29. Readiness Assessments
Greater Twin Cities United Way 2012
Performed Federal Grants Readiness Assessment
Met with personnel
Reviewed current procedures and processes
Compared to Federal requirements
Delivered Readiness Assessment Report
Decided to search out opportunities commensurate with current mission and impact areas
Obtained large grant from Corporation for National and Community Service

30. Grants Management Best Practices

31. Grant Compliance Accounting Responsibility of all departments involved
Procurement / Purchasing
Contract / Legal
Program Personnel

32. Grants Management
Develop checklists
Document compliance requirements
Obtain proper training
Read through Uniform Grant Guidance
Read through grant agreement for terms and conditions

33. Grant Compliance Resources
CLA Grant Compliance Services:
CLA Grant Compliance Reading Room (Resources)

34. Questions?