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Slide 1
FastFactsFeature 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.
Slide 2
Today’s TopicWe’ll be taking a look at…
Implications of Cost Sharing and Program Income
Slide 3
Today’s Presenter
JoAnn Theys and Ana PavichJhpiego
Slide 4
Session Segments
PresentationAna 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&AAfter the presentation, we’ll hold a Q&A session. We’ll open up the phone lines, and you’ll be able to ask questions. Ana and JoAnn will answer as many of your questions as time allows.
Slide 5
Contact Us
If you would like to submit a question during the presentation or if you’re having technical difficulties, you can email us at: [email protected] can also send us an instant message!
GoogleTalk – [email protected] Instant Messenger – HopkinsFastFactsMSN – [email protected]
Slide 6
How To View Full Screen
Slide 7
Survey
SurveyAt the end of this FastFacts session, we’ll ask you to complete a short survey. Your honest comments will help us to enhance and improve future FastFacts sessions.
Slide 8
Administering a USAID Award - Implications of Cost
Sharing and Program Income
Slide 9
Agenda
What is cost share?
What is program income?
How are they different?
Key references
Slide 10
Cost Share
Definition - cost sharing or matchingThat portion of project or program costs not paid for by the Federal Government
226.2
Slide 11
Cost ShareCriteria - allowable when the costs:
Are verifiable from your recordsAre not included in another USG projectAre necessary and reasonable for proper and efficient accomplishment of objectivesAre allowable under your cost principles (OMB Circular A-21)Are not paid by the USG under another awardAre 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
Slide 12
Cost ShareREQUIRED 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]
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 = $200,000) Original
Federal Share Reduced
Federal Share Total ShortfallOriginal 1,000,000$ 10% 100,000$ -$ 1,100,000$ -$
#1 Shortfall 1,000,000$ 800,000$ -$ 10% 80,000$ 880,000$ 200,000$ #2 Shortfall 1,000,000$ 10% 100,000$ 8% 80,000$ 1,100,000$ 20,000$
Original Recipient Cost Share
Reduced Recipient Cost Share
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 marketSupplies – fair market value (FMV)Equipment / buildings / land – fair rental value (FRV) or FMV, if it meets the award’s purposeDonated space – FRV
Same rules apply to subrecipients reporting cost share to you
226.23.b-j
Slide 15
Cost Share Examples
DOES countVolunteer services which are an integral
and necessary part of the projectDonated vehicle from Ford/Toyota
DOES NOT countYour staff’s 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
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 performedThe use or rental of real or personal property acquired under federally-funded projectsThe sale of commodities or items fabricated under an awardLicense fees and royalties on patents and copyrightsInterest on loans made with award funds
226.2
Slide 17
Program Income
Options: additive, cost share, deductive (default)After award, earned income is yoursNet 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
Slide 18
Program Income Examples
DOES countFair Market Value fees charged to an NGO using your USAID project vehicle in ZambiaRental or usage fees, such as those earned from fees charged for use of computer or laboratory equipment purchased with grant fundsFunds generated by the sale of commodities and research materials, such as tissue cultures, cell lines, or research animalsProceeds from the sale of software or publicationsRegistration fees charged to participants for a workshop or conference sponsored by a project
Slide 19
Program Income Examples
DOES NOT countProceeds from the sale of your 5-year old project vehicle you no longer needInterest earned on advances of Federal fundsPatient care creditsReceipt of principal on loans, credits, discounts, etc. or interest earned on them Taxes, special assessments, levies, and fines raised by government recipients
Slide 20
Key References
22CFR226
OMB Circular A-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
Slide 21
ConclusionToday we covered:
Cost share
Program income
How they are different
Key references
Slide 22
We’re 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.
We’ll be answering questions in the order that we receive them.
We’ll also be answering the questions that were emailed to us during the presentation.
If there’s a question that we can’t answer, we’ll do some research after this session, and then email the answer to all participants.
Q&A
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: [email protected]
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/
Thanks again!