Executive Office of the President of the United States Office of National Drug Control Policy

Executive Office of the President of the United States

Office of National Drug Control Policy

http://www.whitehousedrugpolicy.gov

U.S. Department of Health and Human Services

Substance Abuse and Mental Health Services Administration www.samhsa.gov

New Grantee Fiscal & Administrative New Grantee Fiscal & Administrative TrainingTraining

October 18, 2012

Drug Free Communities

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3 Sessions

1. Grantee Financial Management Requirements

- Rocco LaMonaca

2. Payment Management Overview

- Raynette Robinson

3. Grants Management Overview

- Virginia Simmons

Executive Office of the President of the United States

Office of National Drug Control Policy

http://www.whitehousedrugpolicy.gov

U.S. Department of Health and Human Services

Substance Abuse and Mental Health Services Administration www.samhsa.gov

Grantee Financial Management Grantee Financial Management RequirementsRequirements

Drug Free Communities

Presenter:

Rocco LaMonaca

SAMHSA/DGM

Objectives

U.S. Dept. of Health & Human Services’ (HHS) prescribed standards for grantee financial management systems

SAMHSA Financial Capability Review (FCR)

Overview of the key controls needed to administer the award

Financial Advisory Services Office

Located in the Division of Grants Management within the Office of Financial Resources

FASO Responsibilities

Financial Capability Reviews

OMB Circular A-133 Audit Resolution

High Risk & Delinquent Audits

Financial Advisory

HHS Regulations

Financial management requirements

45 CFR Part 74.21 Educational Institutions, Hospitals, and Non-Profit Organizations

45 CFR Part 92.20 States, Local Governments and Tribal Organizations

Cost Principles

OMB Circular A-122 Non-Profit Organizations

OMB Circular A-87 State & Local Governments & Indian Tribal Gov’ts

OMB Circular A-21 Educational Institutions Appendix E 45 CFR 74 Hospitals

Financial Capability Review

Why FCRs are important:

Help grantees succeed fiscally & programmatically

Having sound fiscal policies is good business practice and helps protect Federal and grantee dollars against fraud, waste and abuse

Help equip grantees with adequate financial systems if the grantee decides to apply for future Federal funding


How FCRs are performed:

Review a recent report on an audit performed in accordance with OMB Circular A-133 (a.k.a. Single Audit); or

Obtain grantees’ recent financial statements together with accounting & personnel policies & procedures (P&P) Grantee Financial Management Requirements guide helps

grantees ensure the necessary controls are incorporated prior to submitting P&P, http://www.samhsa.gov/grants/management.aspx


Based on the review: Additional information may be requested; or

Conclude the organization has a financial management system capable of adequately administering the award.

High Risk

During the FCR, FASO may recommend high risk if: information is not received as requested; or Indications of significant financial system

weaknesses.

Note: SAMHSA will not restrict an award pending completion of the FCR unless a serious deficiency is found

High Risk

HHS regulations (45 CFR 74.14 or 45 CFR 92.12) permit awarding agencies to impose additional requirements on recipients’ awards for the following reasons:

History of poor performance; Is not financially stable; Financial management system that does not meet

prescribed standards; or Does not conform to terms & conditions of award.

High Risk

High risk grantees must request approval of allowable expenditures via SF 270 prior to drawdown from Payment Management

When the required corrective action is satisfied, SAMHSA will promptly remove high risk designation & account restriction.

Suspension & Termination

Suspension & termination

Appeal Rights Suspension & Termination HHS Departmental Appeals Board Does not apply to High Risk classification

Financial Mgmt. Requirements

Allowability of Costs Expenditure AnalysisCash Management Indirect CostsAnnual Audits Credit CardsAccounting System TimekeepingBank Statements TravelDisb./Procurement Property ControlMatching/Cost Sharing Conflict of interestConsultants/Subcontracts Drug-Free Workplace

Program Income


Allowability of Costs Costs must be reasonable, allocable, and

adequately documented A cost is reasonable if it does not exceed what a

prudent person would incur under similar circumstances

A cost is allocable if the goods or services benefited the project

A cost is adequately documented if it is supported by accounting records and source documents (i.e., timesheets & payroll records, contracts, invoices, etc.)


Cash Management – Drawdowns Limited to minimum amounts needed to cover

allowable project costs Timed in accordance with the actual immediate cash

required to carry out the approved project Not be made to cover future expenditures. PMS

permits advance drawdown of funds only for expenditures made w/in the next 72 hours


Annual Audits Audits must be performed in accordance with

OMB Circular A-133 for FYs with expenditures under Federal awards of $500,000 or more

Reports on these audits must be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt or nine months after your organization’s FY end

- Sections 200 and 320 of Office of Management and Budget (OMB) Circular A-133


Accounting System Must be able to separately report revenue

and expenditures by Federal program as well as other programs

Maintain a Chart of accounts


Bank Statements

Opened and reviewed by a grantee official (i.e., treasurer, president) not authorized to sign checks or perform the bank reconciliation, but who is familiar with financial activities

Reconciliation performed in a timely manner by an employee not authorized to sign checks. Define timely (i.e., within 14 days, etc.)

Reconciliation approved by grantee official outside the payment process but familiar with financial activities


Disbursements/Procurement Documentation maintained to support all disbursements Blank checks safeguarded Disbursements pre-approved (indicate by whom); Expenditures reasonable Two signatures on all checks for purchases over $1,000 Organization officials authorized to sign checks designated in

the policies


Matching or Cost SharingContributions (including cash and 3rd party in-kind) must be Verifiable from the grantee’s records Not included as contributions for any other federally-assisted project Necessary & reasonable for proper and efficient accomplishment of

the project or program objectives Not paid by the Federal Government under another award (except

where authorized by Federal statute) Allowable, similar to the grant’s Federal expenditures, and provided

for in the approved budget

- 45 CFR 74.23 or 45 CFR 92.24 & Part I-24 HHS Grants Policy Statement


Consultants & Subcontracts Nature and scope of services that may be

outsourced In-house capabilities must be evaluated before

obtaining external assistance Selection process described Method for ensuring costs and fees are reasonable Prior to selection, check General Services

Administration’s (GSA) Excluded Parties List System & HHS Office of Inspector General’s (OIG) List of Excluded Individuals & Entities


Expenditure Analysis Actual vs. budgeted expenditures are to be

compared periodically Significant variances investigated, resolved,

and documented to ensure actual expenditures do not exceed amounts budgeted for the grant period


Indirect Cost Any existing or planned indirect cost rates

and the type of rate used

If all costs are charged directly to the award, the method used to allocate costs that benefit more than one cost objective must be described in detail


Credit Cards All expenditures be pre-approved

Expenditure amounts & types limited

Personal expenditures prohibited

All receipts submitted for review & comparison with credit card statements before payment


Timekeeping Salaries and wages based on actual time

employees worked & be supported by timesheets that separately report total time worked on each project & leave

Timesheets certified as accurate by the employee or supervisor familiar with the employee's activities

Salaries & wages charged to Federal awards cannot be based on budgets or estimates

- Attachment B, Sec. 8.h & 8.m, of OMB Circulars A-87 & A-122


Travel Expenses be reasonable, necessary & pre-

approved Mileage, meals & incidentals and lodging rates be

limited to rates published in the GSA Federal Travel Regulation

Airfare limited to coach & car rental limited to mid-size

Travel costs reimbursed based on travel vouchers, expenditure reports or the like listing each cost individually along with receipts.


Property Control Property records must include a description, cost,

purchase date, source of funding, location, and condition

Physical inventories conducted at least every other year & reconciled with property records

Property purchased with Government funds tagged and safeguarded to prevent loss or theft


Conflict of Interest Prohibit the appearance and existence of

conflict of interest situations for employees, officers, and agents of the organization

Examples of conflict of interest situations given Define the code of conduct for conflict of

interest situations, i.e., nature of penalties for violations.

- 45 CFR 74.42 & 43; Part II-7 HHS Grants Policy Statement; 45 CFR 92.36


Drug Free Workplace Unlawful manufacture, distribution, dispensing,

possession, or use of controlled substances is prohibited in the workplace

As a condition of employment, employees must notify management in writing within 5 calendar days, if convicted of violating a criminal drug statute

Appropriate personnel action must be taken, within 30 calendar days, against any convicted employee


Drug Free Workplace (cont.) Federal agencies must be notified in writing,

within 10 calendar days, if any employee engaged in the performance of an award is convicted of violating a criminal drug statute

- 45 CFR 82.205 & 225


Program Income Further the eligible project or program

objectives Finance the non-Federal share of the project

or program Deduct it from the total Federal share of

project or program allowable costs

Useful Websites

SAMHSA Grants Management Website:

http://www.samhsa.gov/Grants/management.aspx

Documents

Executive Office of the President of the United States Office of National Drug Control Policy