Financial Management

Subgrantees shall use fiscal control and fund accounting procedures to insure proper distribution of and accounting for Federal funds.

That means you as a subgrantee must be able to:

Spend your 21st Century Grant funds correctlyand

Prove that you did

Section 76.702 of EDGAR

EDGAR?

Who is he and what does he have to do with my grant?

EDGAREducation Department General

Administrative Regulations

80.20 Local Education Agencies 74.21 Systems of Higher Education

http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html

Essentially these sections describe the standards for the financial administration of federal programs:

Financial Reporting Accounting Records Internal Control Budget Control Allowable Costs Source Documentation Cash Management

Common Areas of Concern for Financial Management

Allowable Costs OMB Circular A-87 for LEAS OMB A-21 for Institutions of Higher Ed

Records/Source Documents Accounting Records must be supported by

cancelled checks, paid invoices, payroll, time & attendance records

Allowable CostsOMB Circular A-87 & A21

Costs must meet the following criteria:

Be necessary and reasonable Be allocable Be authorized or not prohibited under

State or local laws or federal grant regulation

Reasonable Costs:

Do not exceed that which would be incurred by a prudent person

Are ordinary and necessary for the operation of the program

Represent sound business practices and arms length bargaining

Allocable Costs

Must provide a benefit to the program in proportion to the amount of the expenditure. Costs are allocated over the period of the

grant Goods may be charged to the program in

accordance with the relative benefit received

Records/Source Documents

Lack of documentation is a primary reasons for audit findings

Documentation must be available to support every expenditure Initial requisition Final disbursement You must follow your own rules

Supplement Not Supplant

Federal funds must be used to augment the regular educational program;

Cannot replace nonfederal funds that would otherwise have been used.

Supplanting Has Occurred

If the LEA uses Title IV-B to provide services that it was required to provide under other federal, state or local laws; or

If the LEA uses Title IV-B funds to provide services it provided with nonfederal funds in the prior year