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.

mbrustein@bruman.com

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