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Omni Circular Key Area #4: Financial Management Controls The Key Component to Federal Grants. By Michael Brustein, Esq. [email protected] Brustein & Manasevit, PLLC Spring Forum 2014. Performance Metrics Risk Management Augmented Pass-Through Responsibilities - PowerPoint PPT Presentation
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Omni Circular Key Area
Omni Circular Key Area
#4:#4:
Financial Management
Financial Management
ControlsControls
The Key Component to
The Key Component to
Federal Grants
Federal Grants
By Michael Brustein, Esq.
By Michael Brustein, Esq.
Brustein & Manasevit, PLLC
Brustein & Manasevit, PLLC
Spring Forum 2014
Spring Forum 2014
Quic
k O
verv
iew
Quic
k O
verv
iew
of
Majo
r Them
es:
of
Majo
r Them
es:
1.1.Performance Metrics
Performance Metrics2.2.Risk Management
Risk Management3.3.Augmented Pass-
Augmented Pass-Through Through Responsibilities
Responsibilities4.4.Emphasis on
Emphasis on Immediate Corrective
Immediate Corrective
ActionAction5.5.Cooperative Audit
Cooperative Audit ResolutionResolution
BRUSTEIN & MANASEVIT,
PLLC
WH
Y??
WH
Y??
All oversight will examine
All oversight will examine
financial management
financial management
controls:controls:1)1)OIG Audit
OIG Audit2)2)Single Audit
Single Audit3)3)Federal Program
Federal Program MonitoringMonitoring4)4)““Pass Through”
Pass Through” MonitoringMonitoring
BRUSTEIN & MANASEVIT,
PLLC
New Risk Assessment
New Risk Assessment
Will be Based on
Will be Based on Financial Management
Financial Management
ControlsControls
BRUSTEIN & MANASEVIT,
PLLC
The more attention
The more attention paid to financial
paid to financial management controls,
management controls,
fewer headaches
fewer headaches down the road!!!
down the road!!!
BRUSTEIN & MANASEVIT,
PLLC
34 CFR 80.20
34 CFR 80.20
(b)(b)
1.1.Financial Financial
ReportingReporting
2.2.Accounting Accounting
RecordsRecords
3.3. Internal Control
Internal Control
4.4.Budget Control
Budget Control
5.5.Allowable Cost
Allowable Cost
6.6.Source Source
Documentation
Documentation
7.7.Cash Cash
Management
Management
2 CFR 200.302
2 CFR 200.302
(b)(b)
1.1. Identification of
Identification of
AwardsAwards
2.2.Financial Financial
ReportingReporting
3.3.Accounting Accounting
Records (Source
Records (Source
Docs)Docs)
4.4. Internal Control
Internal Control
5.5.Budget Control
Budget Control
6.6.Written Cash
Written Cash
Management
Management
ProceduresProcedures
7.7.Written Written
Allowability Allowability
ProceduresProcedures
Crosswork Between 34 CFR
80.20 (b) and CFR 200.302(b)
BRUSTEIN & MANASEVIT, PLLC
1)
Identi
fica
tion
1)
Identi
fica
tion
of
Aw
ard
s (N
ew
)
of
Aw
ard
s (N
ew
)
All federal “awards”
All federal “awards”
received and expended
received and expended
The name of the
The name of the federal “program”
federal “program” Identification # of
Identification # of awardaward CFDA Title and Number
CFDA Title and Number
Federal Award I.D. #
Federal Award I.D. # Fiscal Year of Award
Fiscal Year of Award Federal Agency
Federal Agency Pass-Through (If S/A)
Pass-Through (If S/A)BRUSTEIN & MANASEVIT,
PLLC
2)
Financi
al
2)
Financi
al
Report
ing
Report
ing New shift to OMB
New shift to OMB approved approved performance
performance metricsmetrics
BRUSTEIN & MANASEVIT,
PLLC
2)
Financi
al
2)
Financi
al
Report
ing (
cont.
)
Report
ing (
cont.
)
Accurate, current, complete
Accurate, current, complete
disclosure of financial results of
disclosure of financial results of
each awardeach award (Old) in accord with the financial
(Old) in accord with the financial
reporting requirements of the
reporting requirements of the
grantgrant (New) in accord with 200.327
(New) in accord with 200.327
and 200.328
and 200.328 200.327 – Federal awarding
200.327 – Federal awarding
agency can only collect OMB
agency can only collect OMB
approved data elements, no
approved data elements, no
less than annually, no more
less than annually, no more
than quarterly
than quarterly 200.328 – Non-federal entity
200.328 – Non-federal entity
must submit performance
must submit performance
reports at intervals required by
reports at intervals required by
federal agency or pass through.
federal agency or pass through.
Annual performance reports due
Annual performance reports due
90 days after reporting period;
90 days after reporting period;
Quarterly performance reports
Quarterly performance reports
due 30 days after reporting
due 30 days after reporting
periodperiodBRUSTEIN & MANASEVIT,
PLLC
2)
Financi
al
2)
Financi
al
Report
ing (
cont.
)
Report
ing (
cont.
)
Performance Metrics:
Performance Metrics:1.1.Compare actual
Compare actual accomplishments to
accomplishments to objectives (quantify to
objectives (quantify to
extent possible)
extent possible)2.2.Reasons goals were not
Reasons goals were not
met if appropriate
met if appropriate3.3.Additional pertinent
Additional pertinent information (e.g.
information (e.g. analysis and
analysis and explanation of cost
explanation of cost overruns, high unit
overruns, high unit costs)costs)
BRUSTEIN & MANASEVIT,
PLLC
2)
Financi
al
2)
Financi
al
Report
ing (
cont.
)
Report
ing (
cont.
) 4.4.Significant Significant developments
developmentsa.a.Problems, delays.
Problems, delays. Adverse conditions that
Adverse conditions that
would impair ability to
would impair ability to
meet objective of the
meet objective of the
awardawardb.b.Favorable
Favorable developments. Finishing
developments. Finishing
sooner or at less cost
sooner or at less costBRUSTEIN & MANASEVIT,
PLLC
2)
Financi
al
2)
Financi
al
Report
ing (
Cont.
)
Report
ing (
Cont.
)
OMB Allows ED to
OMB Allows ED to waive “performance
waive “performance
metrics” not required
metrics” not required
How will ED reconcile
How will ED reconcile
performance metrics
performance metrics
with accountability /
with accountability /
performance
performance indicators of ESEA,
indicators of ESEA, IDEA, CTE, AEFLA
IDEA, CTE, AEFLABRUSTEIN & MANASEVIT,
PLLC
3)
Acc
ounti
ng
3)
Acc
ounti
ng
Reco
rds
(Sourc
e
Reco
rds
(Sourc
e
Docu
menta
tion)
Docu
menta
tion)
Combines 80.20 (b)(2)
Combines 80.20 (b)(2)
and 80.20 (b)(6)
and 80.20 (b)(6) Source
Source Documentation
Documentation
on:on:1.1.Federal Awards
Federal Awards2.2.Authorizations
Authorizations3.3.Obligations
Obligations4.4.Unobligated balances
Unobligated balances
5.5.AssetsAssets6.6.Expenditures
Expenditures7.7. IncomeIncome8.8. Interest (New)
Interest (New) Eliminated
Eliminated liabilitiesliabilities
BRUSTEIN & MANASEVIT,
PLLC
4)
Inte
rnal
4)
Inte
rnal
Contr
ol
Contr
ol
Essentially same as
Essentially same as
80.20 (b) (3)
80.20 (b) (3) Effective control over
Effective control over
and accountability for:
and accountability for:1.1.All funds
All funds2.2.PropertyProperty3.3.Other assets
Other assets Must adequately
Must adequately safeguard all assets
safeguard all assets Use assets solely for
Use assets solely for
authorized purpose
authorized purposeBRUSTEIN & MANASEVIT,
PLLC
4)
Inte
rnal
4)
Inte
rnal
Contr
ol 2
00.3
03
Contr
ol 2
00.3
03
(cont.
)(c
ont.
)
Cross reference 200.303
Cross reference 200.303
(New)(New) Internal controls “should”
Internal controls “should”
be in compliance with
be in compliance with
Comptroller General’s
Comptroller General’s
“Standard for Internal
“Standard for Internal
Control Integrated
Control Integrated Framework” and “Internal
Framework” and “Internal
Control Integrated
Control Integrated Framework” issued by the
Framework” issued by the
Committee of Sponsoring
Committee of Sponsoring
Organizations of the
Organizations of the
Treadway Commission
Treadway Commission
(see attachment)
(see attachment)BRUSTEIN & MANASEVIT,
PLLC
4)
Inte
rnal
4)
Inte
rnal
Contr
ol 2
00.3
03
Contr
ol 2
00.3
03
(cont.
)(c
ont.
)
Comply with federal
Comply with federal statutes, regs, terms of
statutes, regs, terms of
the awardthe award Evaluate and monitor
Evaluate and monitor
compliancecompliance Take prompt action when
Take prompt action when
instances of
instances of noncompliance are
noncompliance are identifiedidentified Safeguard protected
Safeguard protected
personally identifiable
personally identifiable
informationinformation
BRUSTEIN & MANASEVIT,
PLLC
5)
Budget
5)
Budget
Contr
ol
Contr
ol
Same as 80.20 (b)(4)
Same as 80.20 (b)(4) Comparison of
Comparison of expenditures with
expenditures with budget amounts for
budget amounts for each awardeach award
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (N
ew
)
Proce
dure
s (N
ew
)
Written Procedures
Written Procedures to implement the
to implement the requirements of
requirements of 200.305200.305
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
) For states, payments
For states, payments
are governed by
are governed by Treasury – State CMIA
Treasury – State CMIA
agreements 31 CFR
agreements 31 CFR Part 205Part 205 No Change
No Change
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
)
For all other non
For all other non federal entities,
federal entities, payments must
payments must minimizeminimize time
time elapsing between
elapsing between drawdraw from G-5 and
from G-5 and disbursement
disbursement (not (not
obligation)obligation)
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
)
Written procedures must
Written procedures must
describe whether non-
describe whether non-
federal entity uses:
federal entity uses:1)1)Advance Payments
Advance Payments (preferred) (preferred) • Limited to minimum
Limited to minimum
amounts needed to meet
amounts needed to meet
immediate cash needs
immediate cash needs
2)2)Reimbursement
Reimbursement• Pass-through must make
Pass-through must make
payment within 30 calendar
payment within 30 calendar
days after receipt of the
days after receipt of the
billingbilling3)3)Working Capital Advance
Working Capital Advance
• The pass-through determines
The pass-through determines
that the nonfederal entity
that the nonfederal entity
lacks sufficient working
lacks sufficient working
capital Allows advance
capital Allows advance
payment to cover estimated
payment to cover estimated
disbursement needs for
disbursement needs for
initial period
initial period
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
)
Non-federal entity
Non-federal entity must use existing
must use existing resources before
resources before requesting an
requesting an advance: program
advance: program income, refunds,
income, refunds, rebates, interest
rebates, interest earnedearned
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
)
Payments must not be
Payments must not be
withheld from non-
withheld from non-federal entities unless
federal entities unless
finding of finding of noncompliance debt to
noncompliance debt to
the U.S., or non-
the U.S., or non-federal entity is
federal entity is withholding payment
withholding payment
to a vendor to assure
to a vendor to assure
satisfactory
satisfactory completion of work
completion of workBRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
)
Advances must be
Advances must be maintained in insured
maintained in insured
accountsaccounts Pass-through cannot
Pass-through cannot
require separate
require separate depository accounts
depository accounts Accounts must be
Accounts must be interest bearing unless:
interest bearing unless:
1.1.Aggregate federal awards
Aggregate federal awards
under $120,000
under $120,0002.2.Account not expected to
Account not expected to
earn in excess of $500 per
earn in excess of $500 per
yearyear3.3.Bank require minimum
Bank require minimum
balance so high, that such
balance so high, that such
account not feasible
account not feasible
BRUSTEIN & MANASEVIT,
PLLC
6)
Wri
tten C
ash
6)
Wri
tten C
ash
M
anagem
ent
Managem
ent
Proce
dure
s (c
ont.
)
Proce
dure
s (c
ont.
) Interest earned must
Interest earned must
be remitted
be remitted annuallyannually
to HHSto HHS Interest amounts up to
Interest amounts up to
$500 may be retained
$500 may be retained
by non-federal entity
by non-federal entity
for administrative
for administrative purposespurposes
BRUSTEIN & MANASEVIT,
PLLC
7)
Wri
tten
7)
Wri
tten
Allo
wabili
ty
Allo
wabili
ty
Proce
dure
s (N
ew
)
Proce
dure
s (N
ew
) Written procedures for
Written procedures for
determining
determining allowability of costs in
allowability of costs in
accord with Subpart E
accord with Subpart E
– Cost Principles (see
– Cost Principles (see
p. 78639 – 78662)
p. 78639 – 78662)
BRUSTEIN & MANASEVIT,
PLLC
7)
Wri
tten
7)
Wri
tten
Allo
wabili
ty
Allo
wabili
ty
Proce
dure
s (C
ont.
)
Proce
dure
s (C
ont.
) Not a restatement of
Not a restatement of
Subpart ESubpart E But a GPS through
But a GPS through grant development
grant development and budget process
and budget process Training tool for
Training tool for employeesemployees
BRUSTEIN & MANASEVIT,
PLLC
This presentation is intended solely to provide
This presentation is intended solely to provide
general information and does not constitute
general information and does not constitute
legal advice or a legal service. This
legal advice or a legal service. This
presentation does not create a client-lawyer
presentation does not create a client-lawyer
relationship with Brustein & Manasevit, PLLC
relationship with Brustein & Manasevit, PLLC
and, therefore, carries none of the
and, therefore, carries none of the
protections under the D.C. Rules of
protections under the D.C. Rules of
Professional Conduct. Attendance at this
Professional Conduct. Attendance at this
presentation, a later review of any printed
presentation, a later review of any printed
or electronic materials, or any follow-up
or electronic materials, or any follow-up
questions or communications arising out of
questions or communications arising out of
this presentation with any attorney at
this presentation with any attorney at
Brustein & Manasevit, PLLC does not create
Brustein & Manasevit, PLLC does not create
an attorney-client relationship with Brustein
an attorney-client relationship with Brustein
& Manasevit, PLLC. You should not take any
& Manasevit, PLLC. You should not take any
action based upon any information in this
action based upon any information in this
presentation without first consulting legal
presentation without first consulting legal
counsel familiar with your particular
counsel familiar with your particular
circumstances.
circumstances.BRUSTEIN & MANASEVIT, PLLC