The requesting Department generally manages the program activities of a grant award and is therefore responsible for providing financial status reports and other reports to grantor agency and/or pass-through entity. If it is requested that the preparation of grant financial reports be handled by the Accounting Office, this must be indicated on the Grant Processing Request Form.
Departments handling grant reporting are responsible for timely compliance with all reporting requirements of the grant including financial reporting and proper preparation and submission of drawdown requests for reimbursement of authorized grant expenditures. The drawdown reimbursement request mechanism is preferred over the payment-in-advance mechanism for receiving grant award payments. Drawdown requests for cash reimbursement of allowable grant expenditures must be made at least monthly, unless an alternative longer interval is specified and permitted under a specific grant award. Drawdown reimbursement requests must be substantiated by sufficient support to justify the request, including general ledger reporting that reconciles (a) recorded grant expenditures and (b) recorded grant revenues to (c) the drawdown amount requested. A drawdown request is a financial transaction that generates a receivable from the awarding agency or pass-through entity, therefore a journal entry to record the grant revenue and receivable should be prepared at the time the draw request is made and submitted immediately for review and posting to the Accounting Office, with copy to the Treasurer's Office.
All supporting documentation must be attached to the accrual journal entry, including general ledger reporting, copies of final signed (paper) or submitted (online) financial status reports, and agency/pass-through entity confirmations received. All cash receipts from grant award should always be credited to the receivable from the awarding agency or pass-through entity that is established at the time of the draw request. Audit-preparation work papers should be provided to assist the Accounting Office in completion of federal and/or state grant award summaries on a timely basis.
It is County policy for Grant applicants to request reimbursement of central services indirect costs unless reimbursement of indirect cost is specifically prohibited. The Accounting Office develops a County-wide Central Services Indirect Cost Allocation Plan that is used by the County to claim indirect costs as charges against grant awards and contracts. The Indirect Cost Plan is prepared based on audited expenditures from the second preceding year in compliance with the Federal Office of Management and Budget regulations. For the first two fiscal years of a grant award, departments should contact the OGC for assistance with identifying and calculating indirect costs for inclusion in grant applications. The agreed upon rate for all federal award contracts to entities without a negotiated indirect rate is 10%, however the County's Indirect Cost Plan preparer may be able to provide justification for a higher rate for the initial two years of a federal award's activities.
Any new personnel positions to be created as a result of grant funding must be approved by the County Board and properly classified by Human Resources. Where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications - at least semiannually - that the employees worked solely on that program for the period covered by the certification. These certifications must be prepared at least semi-annually and be signed by the employee or supervisory official having firsthand knowledge of the work performed by the employee.
Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. If an employee works on multiple cost objectives, the preferred method of documentation is for salaries and wages to be supported by Personnel Activity Reports (PARs). An employee is considered to work on multiple cost objectives if they work on:
- More than one Federal award
- A Federal award and a non-Federal award
- A Federal award with specific earmarking (set-asides) or matching requirements
- An indirect cost activity and a direct cost activity
- Two or more indirect activities which are allocated using different allocation bases; or
- An unallowable activity and a direct or indirect cost activity
For employees working on multiple cost objectives, PARs must reflect the following standards:
- After-the-Fact Record: The PAR must be created after the work has been executed. Projections of how an employee is expected to work or position descriptions would not be sufficient.
- Total Activity: The PAR must account for the total activity for which each employee is compensated, including part-time schedules or overtime.
- Monthly: The PAR must be prepared at least monthly and must coincide with one or more pay periods; and
- Signed and Dated: The PAR must be signed and dated by the employee and supervisor.
If an employee wishes to use a method other than semi-annual certification for PARs they must obtain prior approval from OGC and maintain alternate records that accurately reflect the work performed in compliance with section 430(I) of 2 CFR 200. It is never permissible to for salaries and wages to be charged to federal grant awards based solely on budget percentages or budget amounts.
Grant-Related Procurement & Policy Issues
The County's Purchasing Office must be notified that federal funds are involved for all purchases using Federal grant award funding, regardless of the dollar amount involved. Any purchases, of any amount, made with Federal grant award funds must comply with the following requirement:
A copy of the required certification related to the suspension and disbarment of the vendor MUST be obtained before any funds are spent. This copy must be kept with the grant file, and be available for when requested by auditors. This information is available on the System for Award Management web page and can be accessed at the following address: SAM.gov
The Accounting Office also needs to be notified so that assets acquired using federal funds can be properly identified. Equipment items purchased with Federal grant award that cost $5,000 or more are to be tagged when purchased so that proper disposal procedures may be followed when items are sold or sent to surplus. Federal equipment should be inventoried annually in order to be properly safeguarded against theft, damage, or loss. Also, land purchases made with grant funds often have land use restrictions which will be discussed with Corporate Counsel to ensure restriction compliance. When assets acquired with Federal grant awards are no longer used in the grant program (i.e., grant has expired, asset was lost, stolen, or damaged, or asset became idle) the grantor must be notified. The Federal Government may be due a portion of the proceeds for equipment items with a book value of $5,000 or more at the time of disposition. If the federal agency is compensated for the current fair market value of the item, the equipment may be retained by the agency.
Grantees should follow the County's and/or grantor's policies and procedures for all practices including procurement for the selection of contractors and vendors. If grant applications have special conditions, a copy of such must be given to the Accounting Office and OGC for assistance in compliance monitoring. If grant guidelines require grantees to abide by different procurement procedures other than those adopted by the County, the grantee should resolve the situation with the Accounting Office prior to submitting the application. Generally, the federal and state regulations prevail unless less restrictive than County policies-where County policy prevails.
Classification of Program Income
All Federal, state and local grant revenue should be recorded as revenue (not, for example, as a refund of expenditures) in compliance with generally accepted accounting principles (GAAP) and grant requirements. Budget appropriations for grant expenditures are obtained by way of Board action. Any Program Income (as defined in §200.307 of the Super Circular) that is earned by a federal grant award program shall be used in the manner stipulated by the terms and conditions of the federal award. Ordinarily, unless instructions to the contrary are received from the Federal agency or pass-through entity, Program Income must be deducted from total allowable costs to determine the net allowable costs. In this circumstance, Program Income must be used for current costs unless the Federal awarding agency authorizes otherwise.
All accounts payable invoices for goods or services received near the end of the fiscal year should be processed for payment promptly. Expenditures paid after September 30 for goods or services received on or before September 30 should be coded with a post date in September, so that the Accounts Payable system will accrue the expenditure and trade payable. It is important that a final draw be calculated, documented, submitted and accrued as close to September 30 as possible so that the grant award revenue is recorded in the appropriate period as the related expenses as soon as possible, so that the general ledger will properly reflect the nature of grant balances and transactions.