WELCOME TO WASHINGTON, DC

Seminar onFinancial Management

OFFICE OF JUSTICE PROGRAMSOFFICE OF THE CHIEF FINANCIAL

OFFICER2

FINANCIAL LIFE CYCLE OF GRANTS

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U.S. Department of Justice

Eric H. Holder, Jr.

Office Of

Justice Programs

Community OrientedPolicing Services

Office onViolenceAgainstWomen

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U.S. Department of Justice

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U.S. Department of Justice

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Federal Budget Process

Authorization

Appropriation

Apportionment

Authorization: Defines the programs, policies, and the intent of Congress.

Appropriation: The actual dollars Congress has provided to agency or department.

Apportionment: A proportional division of funds made by Office of Management and Budget (OMB). 7

Federal Budget Process

Allotment

Obligation

Expenditures

Disbursements

Allotment: Authorization by the head of the agency (OPP) to incur obligations (make awards)

Obligation: An order placed, contract awarded and/or service received

Expenditures: Funds spent by grant recipients

Disbursements: Payments made by Treasury to liquidate obligations 8

Financial Management Systems

• All recipients are required to:– Establish/maintain auditable accounting

records;– Accurately account for funds awarded; and – Funds for each award must be accounted for

separately from other grants and other funding sources.

• Records shall include Federal, matching, and program income 9

Segregation of Awards and Activities

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Financial Management Systems

• States and locals shall expend/account for grant funds per Federal or State laws & procedures for their funds.

(whichever are more restrictive)

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Financial Management Systems

Accounting and Internal Controls:– Proper stewardship of federal resources is

an essential responsibility of the grantee organization.

– Grantees must ensure that Federal programs and resources are used efficiently and effectively to achieve desired objectives.

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Financial Management Systems

Internal Controls and Segregation of Duties:

– Strong internal controls ensure effective and efficient operations, reliable financial reporting, and compliance with applicable laws and regulations.

– Proper segregation of duties is a critical element of adequate internal control.

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Financial Management Systems

Adequate Accounting System:– Grantee must maintain an adequate system

of accounting and internal controls and ensure that an adequate system exists for each of its subrecipients.

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Financial Management Systems

Adequate Accounting System:– Present and classifies costs, as required

for budgetary and evaluation purposes.– Provides cost and property control to

ensure optimal use of funds.– Controls funds/resources to assure

conformance with general or special conditions.

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Financial Management Systems

An Adequate Accounting System:– Meets requirements for periodic

reporting.– Provides financial data for planning,

control, measurement, and evaluation of direct and indirect costs.

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Financial Management Systems

In summary, a Financial Management System must be able to record and report on the:

– Receipt;– Obligation; and – Expenditures of grant funds.

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