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WELCOME TO WASHINGTON, DC. Seminar on Financial Management. Office of justice programs Office of the chief financial officer. FINANCIAL LIFE CYCLE OF GRANTS. Introduction. Name Jurisdiction/Organization represented Years in grants Type of grants. Eric H. Holder, Jr.

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Seminar on financial management

Seminar onFinancial Management

Office of justice programsOffice of the chief financial officer

Financial life cycle of grants


  • Name

  • Jurisdiction/Organization represented

  • Years in grants

  • Type of grants

U s department of justice

Eric H. Holder, Jr.

U.S. Department of Justice









Office on




Federal budget process
Federal Budget Process




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).

Federal budget process1
Federal Budget Process

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





Financial management systems
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

Financial management systems1
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)

Financial management systems2
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.

Financial management systems3
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.

Financial management systems4
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.

Financial management systems5
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.

Financial management systems6
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.

Financial management systems7
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.

Order of precedence
Order of Precedence

  • Authorizing Legislation

    • Congress

  • Federal Agency Regulation

    • Code of Federal Regulation (CFR)

  • Terms and Conditions of the Award

    • Grant Award Document

  • Federal Agency Policies

    • OJP Financial Guide

Code of federal regulations
Code of Federal Regulations

The Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government.

Code of federal regulations1
Code of Federal Regulations

Department of Justice

28 CFR 66 – Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments

28 CFR 70 – Uniform Administrative Requirements for Grants and Agreements (including subawards) with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations

Government wide common rules
Government-wide Common Rules

Common Rules:

  • Committee of Federal agency representatives

  • “Uniform” requirements

  • Signed by Federal agencies

  • Limited exceptions granted by OMB

Government wide common rules1
Government-wide Common Rules

  • OMB A-102:

    “Uniform Administrative Requirements for Grants & Cooperative Agreements with State & Local Governments”

    Applicable to:

    State & Local Units of Government

Government wide common rules2
Government-wide Common Rules

  • Suspension & Debarment (S&D)

    -Who is covered? Direct recipients and subrecipients

    • Exemption from certification: Direct recipients of a statutory entitlement (BJA, OVC, OJJDP formula awards)

    • Subcontractors receiving $100K or less

    • Excluded Parties List System: http://www.sam.gov/

Government wide common rules3
Government-wide Common Rules

  • Drug-Free Workplace (DFW):

    -Who is covered? Direct recipients and subrecipients who are state agencies.

    • Exemptions: Subrecipients other than state agencies

Government wide common rules4
Government-wide Common Rules

  • Lobbying:

    -Who is covered? Direct recipients and subrecipients

    • Note: Any violation of the prohibition is subject to a minimum $10,000 fine for each occurrence

Lobbying restrictions
Lobbying Restrictions

Applicable to:

  • State & Local Units of Government

  • Non-Profit Organizations

  • Indian Tribes and Tribal Organizations

  • Commercial Entities

  • Individuals (direct or indirect)

Code of federal regulations 2 cfe part 220 225 230 also known as omb circular a21 87 122
Code of Federal Regulations (2 CFE/Part – 220/225/230)also known as OMB Circular A21/87/122

Cost Principles for Educational Institutions, State, Local and Indian Tribal Governments, and Non-Profit Organizations

Code of federal regulations2
Code of Federal Regulations

Requires that a Cost be:

  • Allowable

  • Necessary to the performance of a project

  • Reasonable

  • Allocable to the project and consistently treated

Major Provisions

Code of federal regulations3
Code of Federal Regulations

Requires that a Cost be: (cont’)

  • Non-profitable

  • Claimed against only one award, and

  • Permissible under State & Federal laws and regulations.

Major Provisions

Classification of costs
Classification of Costs

Direct Costs:

  • Costs identified specifically with an activity

  • Salaries and wages (including holidays, sick leave, etc.) for direct labor employees

  • Other employee fringe benefits allocable to direct labor employees

Classification of costs1
Classification of Costs

Direct Costs: (cont.)

  • Consultant services contracted to accomplish specific project objectives

  • Travel of direct labor employees

  • Materials/supplies purchased directly for use on a specific project

Classification of costs3
Classification of Costs

Indirect costs generally are not readily identifiable with a particular grant or contract such as:

  • Maintenance of buildings

  • Telephone expense

  • Supplies

  • Depreciation

  • Rental expense

Classification of costs4
Classification of Costs

Indirect Costs Rates:

  • Provisional indirect costs rates adjusted to actual (retroactive adjustment)

  • Predetermined rates (not normally subject to adjustment)

  • Fixed rates (with roll or carry forward adjustment in future period)

  • Cognizant Federal agency

Code of federal regulation major provisions
Code of Federal Regulation Major Provisions

The regulation DOES NOT:

  • Supersede limitation imposed by law

  • Dictate extent of Federal funds

  • Provide additional Federal funds for indirect costs

Code of federal regulation major provisions1
Code of Federal Regulation Major Provisions

The regulation DOES NOT: (cont.)

  • Dictate how a government should use funds

  • Relieve State & local governments of stewardship responsibilities for Federal funds

Selective items of costs
Selective Items of Costs

  • Accounting

  • Advertising

  • Alcoholic Beverages

  • Audit Services

  • Bad Debts

  • Contingencies

Selective items of costs1
Selective Items of Costs

  • Contributions & Donations

  • Entertainment

  • Fines/Penalties

  • Fund Raising

  • Rental Costs

  • Under Recovery of Cost under Federal Grants


  • To deliberately reduce State or local funds because of the existence of Federal funds.

  • Example:

    State funds are appropriated for a stated purpose and Federal funds are awarded for that same purpose. The State replaces its State funds with Federal funds, thereby reducing the total amount available for the stated purpose.