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Discretionary Grants Administration

David J. Downey

Office of the Deputy Secretary

Risk Management Service

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Overview of ED financial policies

Managing budget

Avoiding audit problems

Identifying key resources such as Grantmaking at ED

Agenda

www.ed.gov/fund/grant/about/grantmaking/index.html

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Legislation

Regulations

EDGAR

Cost Principles (2 CFR/OMB Circulars)

Grant Award Notification (GAN)

Your approved Application

Tools of the Trade

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• 2 CFR Part 220 for Educational Institutions (see OMB Circular A-21)

• 2 CFR Part 225—for State, Local and Indian Tribal Governments

(see OMB Circular A-87)

Cost Principles

http://www.gpoaccess.gov/cfr/index.htmld

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• 2 CFR Part 230 – for Non-Profit Organizations (see OMB Circular A-122)

•2 CFR Part 215 – Uniform Administrative Requirements for Grants and Other Agreements with IHE’s, Hospitals and Other Non-Profit Organizations

(see OMB Circular A-110)

Cost Principles

http://www.whitehouse.gov/omb/circulars/

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Project’s success and financial accountability

Submit required reports

annual and final

applicable financial reports

Grantee Responsibilities

Valid & reliable data

Report on GPRA standards & indicators

EDGAR§§74.51 & 80.40

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Clear, concise, and detailed

Consistent with institutional policy

Meets federal requirements

Aligned with GPRA

Revised within scope of project

Achieve project goals

Monetary Road Map

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Provide for accurate, current, and complete disclosure of results regarding the use of project funds

Document both the federal and non-federal funds used to carry out the project and track partners

Maintain effective internal controls

Financial Management Systems

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Allowable –

permitted or not specifically prohibited

Allocable –

necessary for project’s success

Reasonable –

costs incurred by a “prudent” person

Budget Items

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Budget Categories

Contractual Other Indirect Costs Training Stipends

Personnel Fringe Travel Equipment Supplies

Internal Controls — Procedures for expending funds for:

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Required or voluntary…

Honor commitments

Primary grantee tracks contributions of partners

Cost Sharing / Matching

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Non-Federal audit if expending $500,000 or more annually in Federal awards

Mail to Federal Audit Clearinghouse

Review Attachment C

Audit Requirements

OMB Circular A-133

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Missing time and effort reports

Poor record-keeping

Failure to obtain prior approval

Incorrect indirect cost rates

Unallowable costs

Lack of internal controls

Common Audit Exceptions

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Request funds for immediate needs

Minimize time between requests & expenditures

Draws commensurate with approved scope

Drawdown Policy

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1st Quarter More than 50%

2nd Quarter More than 80%

3rd Quarter 100%

G5 Monitoring Report:Excessive Drawdowns

Must return excess cash & interest to govt.

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Large amounts of unobligated funds at end of budget period

Excessive or infrequent drawdown of funds

Project goals not met

ED Concerns

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Pre-award costs

Carryover

Budget transfers

Time extensions

Grantee Flexibility

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Goals: Increase flexibility

Increase accountability

Reduce paperwork burden

Develop relationships

Grantee Flexibility

Promote successful project outcomes

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Incurred up to 90 daysbefore budget period begins

Pre-award Costs

No prior approvalNew & NCC awards

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• Reasonable expectation of receiving a grant

• Incurred at own risk

• Funds not available until the budget period begins

• Not for cost over-runs

Pre-award Costs Overview

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Incurred MORE than 90 daysbefore budget period begins…

Pre-award Costs

Requires prior approval

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• Unexpended funds “forwarded” without prior approval

• For any allowable cost within the approved scope

• Complete unfinished activities

• New activities within scope – Program Staff

Carryover

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Program Office may require written statement:

How will unexpended funds be used?

When: At time of funding decision

New funds can be reduced

Carryover

Large Available Balance?Written statement required!

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No prior approval for most

See exceptions in EDGAR…Training fundsTransfer or contracting work

OMB Cost Principles – other exceptions

Budget Transfer

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Changes in project scope or objectives

Changes in key personnel

IHE & non-profit project directors> absent for more than 3 months> 25% reduction in time

Need for additional Federal funds

Prior Approval

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Final year… One-time extension for up to one year

without prior approval

Grantees should carefully consider time extension needs

Time Extension

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No later than 10 days before project ends

State reasons for extension

Include revised expiration date

Time Extension

Written notice to Program Officer

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Annual substantial progress met

GPRA indicators met

Recordkeeping & fiscal accountability

What ED Looks For

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Check grant terms, conditions and grant award attachments for possible exceptions

In rare circumstances, some flexibilities may be denied based on performance

When in doubt, call your Program Officer

Important Reminders

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That’s my time… I appreciate yours!

Best wishes in administering your U.S. Department of Education discretionary grants!