1. Slide 1 FastFacts Feature Presentation June 17, 2010 We are using audio during this session, so please dial in to our conference line… Phone number: 877-468-2134 Participant code: 182500 © 2010 The Johns Hopkins University. All rights reserved.

2. Slide 2 Todays Topic Well be taking a look at… Implications of Cost Sharing and Program Income

3. Slide 3 Todays Presenter JoAnn Theys and Ana Pavich Jhpiego

4. Slide 4 Session Segments Presentation Ana and JoAnn will discuss cost sharing, the criteria used for valuations, setting up an auditable system for tracking, and program income. During their presentation, your phone will be muted. Q&A After the presentation, well hold a Q&A session. Well open up the phone lines, and youll be able to ask questions. Ana and JoAnn will answer as many of your questions as time allows.

5. Slide 5 Contact Us If you would like to submit a question during the presentation or if youre having technical difficulties, you can email us at: fastfacts@jhu.edu fastfacts@jhu.edu You can also send us an instant message! GoogleTalk – HopkinsFastFacts@gmail.comHopkinsFastFacts@gmail.com AOL Instant Messenger – HopkinsFastFacts MSN – FastFacts@jhu.edu

6. Slide 6 How To View Full Screen

7. Slide 7 Survey At the end of this FastFacts session, well ask you to complete a short survey. Your honest comments will help us to enhance and improve future FastFacts sessions.

8. Slide 8 Administering a USAID Award - Implications of Cost Sharing and Program Income

9. Slide 9 Agenda What is cost share? What is program income? How are they different? Key references

10. Slide 10 Cost Share Definition - cost sharing or matching That portion of project or program costs not paid for by the Federal Government 226.2

11. Slide 11 Cost Share Criteria - allowable when the costs: Are verifiable from your records Are not included in another USG project Are necessary and reasonable for proper and efficient accomplishment of objectives Are allowable under your cost principles (OMB Circular A-21) Are not paid by the USG under another award Are provided for in your approved cost share budget Key = are verifiable from your records Be diligent – auditors will question your cost share 226.23.a.1-6 226.23.a.1

12. Slide 12 Cost Share REQUIRED AS APPLICABLE STANDARD PROVISIONS FOR U.S. NONGOVERNMENTAL RECIPIENTS 12. COST SHARING (MATCHING) (July 2002) APPLICABILITY: This provision, along with 22 CFR 226, is applicable when the recipient has agreed or is required to cost share or provide a matching share. COST SHARING (MATCHING) (July 2002) a.If at the end of any funding period, the recipient has expended an amount of non-Federal funds less than the agreed upon amount or percentage of total expenditures, the Agreement Officer may apply the difference to reduce the amount of USAID incremental funding in the following funding period. If the award has expired or has been terminated, the Agreement Officer may require the recipient to refund the difference to USAID. b.The source, origin and nationality requirements and the restricted goods provision established in the Standard Provision entitled "USAID Eligibility Rules for Goods and Services" do not apply to cost sharing (matching) expenditures. [END OF PROVISION]

13. Slide 13 Cost Share – Shortfall Example Any shortfall in cost share means: For active awards – Your organization may have the federal portion of the project reduced (e.g., #1 = $200,000), or Your organization may be spending its unrestricted funds to make up the difference (e.g., #2 = $20,000) For expired awards – Your organization may be required to refund the difference to the USG (e.g., #1 = $200,000)

14. Slide 14 Cost Share Valuation – document basis for valuations: Volunteer services – account for time the same as employees and rates should be consistent with similar paid work in the local labor market Supplies – fair market value (FMV) Equipment / buildings / land – fair rental value (FRV) or FMV, if it meets the awards purpose Donated space – FRV Same rules apply to subrecipients reporting cost share to you 226.23.b-j

15. Slide 15 Cost Share Examples DOES count Volunteer services which are an integral and necessary part of the project Donated vehicle from Ford/Toyota DOES NOT count Your staffs donated time Office equipment provided to the project from another USAID project that has ended Unallowable costs as defined in OMB Circular A-21, Section J

16. Slide 16 Program Income Definition – program income Gross income directly generated by a supported activity or earned as a result of the award (see exclusions in 226.24.e and h) Program income includes, but is not limited to: Income from fees for services performed The use or rental of real or personal property acquired under federally-funded projects The sale of commodities or items fabricated under an award License fees and royalties on patents and copyrights Interest on loans made with award funds 226.2

17. Slide 17 Program Income Options: additive, cost share, deductive (default) After award, earned income is yours Net program income (deduct costs related to the generation of the program income from the gross income) No obligation to USG with program income earned on copyrights, patents, trademarks, and inventions produced under the award 226.24.e 226.24.f 226.24.h 226.24.b-d

18. Slide 18 Program Income Examples DOES count Fair Market Value fees charged to an NGO using your USAID project vehicle in Zambia Rental or usage fees, such as those earned from fees charged for use of computer or laboratory equipment purchased with grant funds Funds generated by the sale of commodities and research materials, such as tissue cultures, cell lines, or research animals Proceeds from the sale of software or publications Registration fees charged to participants for a workshop or conference sponsored by a project

19. Slide 19 Program Income Examples DOES NOT count Proceeds from the sale of your 5-year old project vehicle you no longer need Interest earned on advances of Federal funds Patient care credits Receipt of principal on loans, credits, discounts, etc. or interest earned on them Taxes, special assessments, levies, and fines raised by government recipients

20. Slide 20 Key References 22CFR226 OMB Circular A-21A-21 Mandatory and Required as Applicable Standard Provisions for U.S. Nongovernmental Recipients Mandatory Standard Provisions for Non-U.S. Nongovernmental Recipients JHU Policy on Program Income JHU Policy on Cost Sharing

21. Slide 21 Conclusion Today we covered: Cost share Program income How they are different Key references

22. Slide 22 Were going to open the phone lines now! There will be a slight pause, and then a recorded voice will provide instructions on how to ask questions over this conference call line. Well be answering questions in the order that we receive them. Well also be answering the questions that were emailed to us during the presentation. If theres a question that we cant answer, well do some research after this session, and then email the answer to all participants. Q&A

23. Slide 23 Thank You! Thank you for participating! We would love to hear from you. Are there certain topics that you would like us to cover in future FastFacts sessions? Would you like to be a FastFacts presenter? Please email us at: fastfacts@jhu.edu

24. Slide 24 Survey Before we close, please take the time to complete a short survey. Your feedback will help us as we plan future FastFacts sessions. Click this link to access the survey… http://connect.johnshopkins.edu/fastfactssurvey/ http://connect.johnshopkins.edu/fastfactssurvey/ Thanks again!