Federal Grants Financial Guidelines

1
Federal Grants Financial Guidelines

• Illinois Criminal Justice Information Authority
• Office of General Counsel

2
Introduction

• Although this presentation outlines some of the
  main rules of the Federal Grant Financial
  Guidelines, it is not intended as a replacement
  for the guidelines.
• Details of the rules outlined and additional
  rules not included in this presentation are in
  the guidelines.
• The grantee is responsible for reading the
  Federal Grant Financial Guidelines and seeking
  guidance from the Illinois Criminal Justice
  Information Authority on any rules the grantee
  does not understand.

3
Federal Grants administered by ICJIA

• Anti Drug Abuse Act (ADAA - Byrne Formula Grant)
• Juvenile Accountability Incentive Block Grant
  (JAIBG)
• Local Law Enforcement Block Grants (LLEBG)
• National Criminal History Improvement Program
  (NCHIP)
• Residential Substance Abuse Treatment for State
  Prisoners Program (RSAT)
• Violence Against Women Act (VAWA)
• Victims of Crime Act (VOCA)
• Violent Offender Incarceration and
  Truth-in-Sentencing Incentive Grant (VOI-TIS)

4
Grant Process

• The Authority designates funding to a grantee for
  a grant program.
• An interagency agreement is signed that contains
  terms and conditions of funding, a grant program
  narrative and a grant program budget.
• The grantee administers the grant program
  according to the grant program narrative and
  budget.
• The grantee must follow the federal financial
  guidelines, circulars and program guidelines, the
  interagency agreement terms and conditions, and
  ICJIAs financial guidelines.

5
Administrative Policies

• The Authority must receive the signed interagency
  agreement and accompanying material within 45
  days from the date it was sent to the grantee for
  signature.
• Interagency agreements must be signed by all
  parties prior to the start of the period of
  performance.
• If the grant program has not commenced within 60
  days of the original start date of the grant
  period, the grantee must inform the Authority in
  writing of the steps taken to initiate the
  project, the reasons for the delay, and the
  expected starting date.
• For continuing grant programs, continuation
  materials will be sent 120 days prior to the end
  of the grants period of performance.

6
Match Contributions

• Match funds are non-federal funds provided by the
  grantee to cover costs of the grant program.
• Grantees must have the authority to commit the
  match funds to the grant program.
• Match funds are subject to the same guidelines
  and cost principles as federal funds.
• Cash Match
• Costs that are in addition to those already
  allocated for the program can be applied as
  match.
• Includes cash spent for program costs.
• In-Kind Match
• Costs that already exist, but that will now be
  used to benefit the grant program can be applied
  as match.
• Includes the value of something that does not
  have a cost associated with it. (i.e., donated
  items.)

7
Match Contributions

• Some grants require cash match.
• ADAA, JAIBG, LLEBG, RSAT, VOI-TIS
• Some grants allow both cash and in-kind match.
• VOCA, VAWA, NCHIP
• The entire match amount must be obligated by the
  end of the period of performance or the grantee
  risks a proportionate reduction in the amount of
  federal funds awarded under the interagency
  agreement.
• Grantee must retain records on all match costs,
  including donated services.
• If overmatch is included in the grant program
  budget it will be subject to the same guidelines
  as the federal and match funds.

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Supplanting

• Definition To deliberately reduce or reallocate
  state, local or agency funds because of the
  existence of the federal funds.
• Federal funds must increase or supplement the
  funding available for criminal justice system or
  crime victim assistance activities.
• Grantees must maintain a level of state, local or
  agency financial support that is equal to or
  greater than the level prior to receiving the
  federal funds.
• Any potential existence of supplanting will
  require documentation to establish that the
  reduction in financial support was not due to the
  receipt of federal funds.

9
Supplanting

• Non-Supplanting guidelines for employees and
  contractual costs are as follows
• Federal funds cannot be used to pay for existing
  employees unless the existing position is
  back-filled with a new hire or the existing
  employee will be working additional hours on the
  grant program.
• Federal funds cannot pay for existing contractual
  costs (i.e., rent). Any costs to be paid with
  federal funds are to be additional or increased
  costs necessary to implement the grant program.
• In-kind match for existing employees or
  contractual costs can be allocated to a grant
  program for costs associated with that program.
• These costs must be in proportion to the services
  being allocated to the grant program.
• If contractual costs include rent, the grantee
  must not have a financial interest in the
  property.

10
Revisions and Extensions

• All grant program and certain budget revisions,
  as listed in the Federal Grant Financial
  Guidelines, must be approved by the Authority in
  writing prior to implementation of these changes.
• The grantee must submit a written request for
  changes and must include the reasons and basis
  for the proposed changes.
• The grantee must submit the request at least 90
  days prior to the end of the current period of
  performance.
• Changes that include an amendment to the
  interagency agreement to extend the period or
  performance must be signed by all parties prior
  to the end of the current period of performance.
• The grantee cannot make any obligations or
  expenditures beyond the current period of
  performance until the amendment is signed by the
  all parties.

11
Disclosure of Federal Funds

• Publications that describe or result from the
  federally funded grant program must be reviewed
  by the Authority prior to printing.
• The review requirement applies regardless of
  whether federal funds are being used to pay for
  the printing of the publication.
• Publications must contain the disclaimer included
  in the interagency agreement.
• Statements, press releases, requests for
  proposals, bid solicitations and other documents
  describing the federally funded grant program
  shall clearly state the percentage of the program
  costs to be federally funded and the dollar
  amount of the federal funds for the grant program.

12
Cost Allowability

• As listed in the Federal Grant Financial
  Guidelines, costs must be
• Necessary and reasonable for the administration
  of the program.
• Allocable and specific to the program.
• Authorized and in compliance with state, local or
  agency laws or rules.
• In conformance with federal guidelines, laws and
  regulations.
• Treated consistently with policies and procedures
  that apply to non-grant costs and activities.
• Allocated to the program and no other federally
  funded programs.
• Net costs that reflect all discounts, rebates,
  returns and sales.
• Adequately documented.

13
Prior Approval Costs

• Even if approved in the budget, the following
  costs must receive additional written approval
  from the Authority prior to the grantee incurring
  the costs
• Pre-agreement costs or costs incurred prior to
  the award date
• Indirect costs
• Out-of-state travel
• Sole source purchases with an aggregate cost over
  25,000
• Subcontracts over 100,000
• Contractor fees exceeding 450/8 hour day
• Rearrangements or alterations of facilities and
• Lease/purchase agreements.

14
Specific Budget Costs

• Personnel costs must be documented with signed
  time and attendance sheets for both federally
  funded and match funded personnel.
• Costs for personnel must be proportionate to the
  time they provide services to the program.
• Time sheets should show the hours the employee
  began and ended the day and the hours worked on
  the program.
• Equipment costs must be listed in the approved
  budget prior to their purchase.
• Costs for existing equipment cannot be paid for
  with program funds.

15
Specific Budget Costs

• Contractor costs must conform to procurement
  requirements located in the interagency agreement
  and the Federal Grant Financial Guidelines.
• Payment for contractor time may include payment
  for time spent on preparation, evaluation and
  travel in addition to the actual performance
  time.
• Travel costs cannot exceed the States rate or
  the local or agency rate, whichever is lower.
• Out-of-state travel requests must be submitted
  and approved prior to the travel dates.

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Competitive Procurement

• All procurement transactions shall be conducted
  in a manner to provide, to the maximum extent
  practical, open and free competition.
• Procurements of 100,000 or less require the
  grantee to solicit bids or quotes from at least
  three sources.
• Procurements over 100,000 require formal
  advertisement through a Request for Proposals
  (RFP) or Invitation for Bids (IFB).
• RFPs over 100,000 require Authority review and
  approval prior to their issuance.
• If grantees procurement policies require a more
  competitive procurement process than the above
  process, then the grantee should follow their
  procurement process.

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Non Competitive Procurement

• A sole source procurement is a procurement
  without competition and must meet one of the
  following criteria
• The item is available from only one source
• Public exigency or emergency will not permit a
  delay resulting from a competitive procurement
  or
• After solicitation from a number of sources,
  competition is determined to be inadequate.
• The grantee must maintain justification, as
  listed in Federal Grant Financial Guidelines, for
  all non-competitive procurements.
• The grantee must request approval from the
  Authority for a non-competitive procurement over
  25,000 prior to incurring the expense.

18
Subcontracts

• All subcontracts must be in writing.
• Subcontracts over 100,000 must receive prior
  Authority approval before they are executed by
  the parties.
• The terms and conditions of the interagency
  agreement shall apply to and bind the parties of
  the subcontract.
• All subcontracts shall include the basic
  provisions of the interagency agreement.
• Contractors full name and address
• Agency name
• Description of services to be rendered
• Contract terms
• Maximum or estimated amount to be paid and
  payment rates and
• Signature of contractor or authorized
  representative.
• Subcontracts shall also include the provisions in
  Appendix F located in the Federal Grant Financial
  Guidelines.

19
Property Management

• The grantee shall manage the equipment to ensure
  that it is being used for grant program purposes.
• If the equipment is no longer necessary for the
  grant program, the grantee shall comply with the
  interagency agreement and the Federal Grant
  Financial Guidelines for the disposition of the
  property.
• The Authority reserves the right to make the
  final determination as to the disposal of program
  property and will make the determination based on
  the following assessment
• Programs need for the property
• Other federal programs need for the property
• The grantee shall retain detailed inventory
  records, as listed in the Federal Grant Financial
  Guidelines, describing the property purchased
  with grant program funds.

20
Accounting Standards

• The grantee must use accounting practices that
  ensure the proper use of the grant program funds.
• The grantees accounting standards must use
  commonly accepted standards of financial
  responsibility or the grantee risks disallowance
  of expenditures.
• Funds from one federal grant program cannot be
  commingled with other funds and funds from one
  grant program cannot be used to support another
  grant program.
• If the grantees accounting system integrates the
  funds, then a system must be established to
  provide adequate identification of the separate
  grant program funds.

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Accounting Procedures

• The accounting system should provide the
  information needed to identify separately the
  receipt of federal and matching funds.
• The accounting system should have an adequate
  system of internal controls to safeguard the
  funds covered, verify the accuracy and
  reliability of information, promote operational
  efficiency, and encourage adherence to prescribed
  management policies.
• The grantee must accurately and timely record the
  expenditure of grant program funds. Supporting
  documentation must also be kept as evidence of
  the expenditure.
• The grantee must have procedures to ensure that
  the expenditure of funds are consistent with the
  grant program budget and expended for allowable
  purposes.

22
Accounting Procedures

• The elements of the accounting system must
  consist of an account structure, accounting
  records, source documents, a system for coding
  financial transactions, financial reports, and
  written procedures that prescribe the manner in
  which and by whom these operations are performed.
  
• The grantee should have a separation of duties so
  that no single individual controls all the
  following accounting procedures
• Authorization to initiate expenses.
• Approving vouchers for payment.
• Signing checks.
• Recording transactions in account books.
• Responsibility for physical custody of
  expenditure documentation.

23
Fiscal Reports

• The fiscal report is used as the basis for fund
  disbursement.
• Fiscal reports must be submitted no later than 15
  days following the period covered by the report.
• Fiscal reports should include actual and
  cumulative expenditures by grant program budget
  category.
• Late notices will be sent to grantees who have
  failed to submit fiscal reports and the grantee
  must respond to these late notices within 30
  days.
• All expenditures incurred during a given state
  fiscal year (July 1-June 30) must be submitted to
  the Authority by the following July 15th for
  disbursement.

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Disbursements Expenditures

• Grantees should anticipate a delay of
  approximately 4-6 weeks in receiving funds after
  a request for disbursement is made and the
  grantee should make adjustments in their request
  to adjust for this delay.
• The grantee must obligate the grant program funds
  prior to the end of the period of performance and
  must liquidate those funds within 45 days of the
  end of the period of performance. Any federal
  funds that are not liquidated within the 45 day
  period may lapse back to the Authority.
• If the grantee does not meet the match
  requirement in the interagency agreement the
  amount of federal funds to be disbursed will be
  proportionately lowered or, if already disbursed,
  a refund of federal funds will be required.

25
Recordkeeping

• Records for federally funded programs should be
  separately maintained and readily locatable.
• Records should easily identify the receipt and
  expenditure of grant program funds and adequate
  documentation which supports these expenditures
  should be available.
• At the end of a grant period, the grantee is
  required to provide a final fiscal report that
  identifies the expenditures of the grant program
  and a final data report that show the progress of
  the program.

26
Retention of Records

• Financial and program records shall be maintained
  for a period of at least three years.
• If any litigation, audit, fiscal review or other
  action involving the records has been started
  before the 3 year period ends, the grantee must
  retain the documentation until the completion of
  the action or the end of the 3 year period,
  whichever is later.
• Property records must be retained for a period of
  three years after the final disposition, transfer
  or replacement of the property.
• The Authority, Department of Justice personnel,
  or any of their authorized representatives have
  the right to access any pertinent grant program
  documentation for as long as the records are
  retained.

27
Audits

• Grantees that expend 500,000 or more in federal
  funds in a fiscal year must conduct an audit in
  accordance with OMB Circular A-133.
• Grantees that expend less than 500,000 in
  federal funds in a fiscal year are exempt from a
  federal audit but must make documentation
  available for review.
• Failure of a grantee to comply with an A-133
  audit requirement may result in the withholding
  of funds.
• Audit costs for audits not required or not
  performed in accordance with an A-133 audit are
  unallowable.

28
Sanctions

• If a grantee fails to comply with the terms and
  conditions of the interagency agreement, state
  and federal statutes, regulations, or guidelines,
  the Authority may take one or more of the
  following actions
• Temporarily withhold funds until the grantee is
  in compliance
• Disallow all or part of the costs of the
  activities not in compliance
• Wholly or partly suspend or terminate the current
  award
• Withhold further awards or
• Pursue other remedies legally available to the
  Authority.

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Questions

• If a grantee has any questions or comments
  concerning the Federal Grant Financial Guidelines
  or their grant, they should contact their grant
  specialist.
• Illinois Criminal Justice Information Authority
• 120 S. Riverside Plaza, Suite 1016
• Chicago, IL 60606
• 312-793-8550