Dana Mabeus, Audit and Budget Manager

1
HWTF Contract (including State Travel Guidelines
and Travel Requests), Budget, Financials Workbook
(MER), and Budget Adjustments

• Presented By
• Dana Mabeus, Audit and Budget Manager
• August 2009

2
Disclaimer

• The information contained in this presentation
  is for informational purposes and general
  guidance only. It is the intent of HWTF to
  highlight certain provisions contained in the
  HWTF contract including attachments and
  contract-related documents. It is not the intent
  of HWTF to cover all terms and conditions
  contained in the HWTF contract, the attachments
  and contract-related documents, but rather to
  provide grantees with a better understanding of
  aforementioned documents that may affect grantees
  in the performance of their program. In no event
  is HWTF liable to grantees for any decision made
  or action taken in reliance on the information in
  this presentation. As such, information
  contained herein does not act as a substitute for
  grantees knowledge and understanding of the
  contract. Grantee bears full responsibility for
  reading, understanding and adhering to the HWTF
  contract including attachments and
  contract-related documents.
• This presentation will be posted at the TRU
  listserv and HWTF website. It is incumbent upon
  HWTF grantees to keep current on information
  contained herein and regularly check the listserv
  for revisions and updates to this presentation.

3

• IF YOU DIDNT
• DOCUMENT IT,
• IT DIDNT
• HAPPEN!

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The HWTF Contract
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Contract Definition

• A contract is an agreement between two or more
  parties which creates obligations to do or not do
  the specific things that are the subject of that
  agreement.
• The HWTF contract is standard for both government
  and non-governmental (non profit) entities with
  the exception that the non-governmental entity
  contract contains provisions regarding
  obligations required by the North Carolina Office
  of State Auditor under N.C.G.S. 143C-6-23. Some
  of these obligations are filing an annual
  Conflict of Interest statement and Certification
  of No Overdue Taxes, and reporting grant
  information via the online Grants Information
  Center (GIC) database. More information can be
  found at www.ncauditor.net.

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Grant Award versus Term

• The grant award and grant term have
  different meanings.
• The grant award refers to the total amount
  approved by the HWTF Commission over the period
  of time of the overall funding of the program.
  For most HWTF grantees this is XXX,XXX.XX over
  X number of years.
• The grant term refers to a period of time up to
  12 months for which the HWTF Commission approves
  the funding.
• Each year, the contract and budget for the
  upcoming term undergo certification by the HWTF
  Commission.

7
Payment Setup Options

• Prior to the effective date of the contract, a
  grantee must elect a method of payment straight
  reimbursement or initial payment.

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• 1) Straight reimbursement payment of expenses
  are reimbursed by the amount on approved monthly
  expense reports (MERs) OR
• 2) Initial Payment grantee receives an initial
  payment of 25 of the total amount of the initial
  term budget to assist in start-up costs. Grantee
  is reimbursed by the amounts on approved MERs
  until such time as the amount paid is less than
  the 25 initial payment and approved reported
  expenses.
• What does this mean? Example Grantee is
  awarded a grant of 300,000 over 3 years (100,000
  per term). Grantee receives 25,000 as an initial
  payment in year 1, and submits MERs on a monthly
  basis for which it receives payment. At a point
  in year 3, when grantee has spent 270,000 of its
  300,000 award, grantee will not receive payment
  for expenses submitted on its MERs until such
  time as grantee has repaid the initial 25,000
  that it received from HWTF at the commencement of
  year 1. Hence, grantee must plan for the gap
  period when it does not receive payment and will
  have to rely on funds from other sources to meet
  internal expenses.

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Contract Provisions

• The grant contract between HWTF and grantee sets
  out the obligations of both parties under the
  TTUPC program. The contract contains definitions
  of the terminology used in the contract and sets
  forth provisions, including but not limited to,
  the term of the grant funding, grantees
  representations and warranties, obligations, and
  the HWTF Commissions obligation. The following
  are certain provisions found in the HWTF contract
  worthy of attention herein.

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• Section III D - Use of Funds Grantee must use
  all funds awarded exclusively to support the
  program and spend the funds in accordance with
  the approved budget.

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• Section III D 2 - Cost Principles Grantee
  shall follow all applicable cost principles,
  including but not limited to Federally
  established guidelines OMB Circular A-87 or OMB
  Circular A-122 as recommended by the NC State
  Auditor.
• Cost principles are the basic guidelines for
  cost determination for state and federal
  pass-through grants that funding agencies and
  grantees must follow. In July 2005, North
  Carolina adopted OMB Circular A-87 as the States
  cost principles. A-87 incorporates OMB Circular
  A-122 relating to nonprofit entities. The
  purpose of the cost principles is to provide a
  framework for consistent treatment of costs
  across grants. The cost principles are basic
  guidelines they are not a listing of specific
  allowable and unallowable costs (with the
  exception of the prohibition against alcohol and
  entertainment)
• More information can be found at
  www.ncauditor.net .
• Circulars can be found at www.whitehouse.gov/omb/
  circulars.

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• Section III D 4 - Travel and Subsistence Rates
  All travel and subsistence expenses must be
  reimbursed under the prevailing State rates and
  policies for State employees. State travel rates
  may be found in the Budget Manual at
  www.osbm.state.nc.us. All out-of-state travel,
  travel involving airfare, and any travel to
  conferences that have a registration fee of
  75.00 or more per individual must be
  pre-approved in writing by Commission staff.
  International travel shall not be reimbursed
  under this Contract.
• Costs incurred by a grantee for in-state travel
  totaling 75.00 or more do not require
  pre-approval from HWTF UNLESS the travel involves
  a registration fee (for a meeting, conference,
  etc.) that is 75.00 or more per person.

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• It is not necessary for grantees to submit
  travel requests for HWTF-required meetings,
  workshops, etc. (such as the Annual Action
  Planning meeting or the Annual State Conference)
  because such events do not require a registration
  fee of 75.00 or more. Moreover, the requirement
  to submit a travel request is waived when a
  grantees attendance at a HWTF event is required
  even when the hotel room rate exceeds the State
  allowed per diem rate for lodging. HWTF works to
  obtain volume discount packages for attendees
  and recognizes that more often than not the room
  package discount exceeds the State per diem rate
  allowed. However, grantees must make every
  effort to reserve rooms at the room package
  discount for HWTF required events. Lodging
  costs that exceed the room package discount
  rates will not be allowable the allowed
  reimbursement rate will be that of the rate
  offered at the room package discount rate.

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Professional Development

• Professional development/educational events,
  conferences, meetings, etc. must meet the
  following 3 prong criteria before costs for such
  are allowable under the grant
• The event must have a direct and discernable
  connection/link to the TTUPC program and the
  execution of the grantees contract and AAP and
• The knowledge, skills, etc. acquired from
  attendance at the event must be utilized and the
  utilization must be readily evident and
  demonstrate its correlation to the TTUPC program
  and the execution of the grantees contract and
  AAP and
• The value and benefit derived must be clearly
  demonstrated in the TTUPC program and the
  execution of the grantees contract and AAP.

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• State Travel and Subsistence Per Diems
• Effective July 1, 2009, the State reimbursement
  rates for subsistence are as follows
•                                         In-State 
       Out-of-State
•                 Breakfast                
  7.75          7.75
•                 Lunch                   
   10.10         10.10
•                 Dinner                  
  17.30       19.65
•        Lodging (actual, up to) 65.90      
  78.05
•                               Total   
  101.05      115.55
• The payment of sales, lodging, and local taxes
  and/or service fees applied to the cost of
  lodging is allowed in addition to the lodging
  rate and is to be paid as a lodging expense.

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• Subsistence Eligibility and Allowability
• Eligibility for per diem subsistence allowances
  for same day travel, partial and overnight travel
  are set forth in the State Travel Guidelines as
  follows
• Meals during Daily Travel (Overnight and Partial
  Day)
• Employees may be reimbursed for meals for
  partial days of travel when in overnight travel
  status and the partial day is the day of
  departure or the day of return. The following
  applies
• Breakfast depart duty station prior to 600 a.m.
  and extend the workday by 2 hours.
• Lunch depart duty station prior to Noon (day of
  departure) or return to duty station after 200
  p.m. (day of return).
• Dinner depart duty station prior to 500 p.m.
  (day of departure) or return to duty station
  after 800 p.m. (day of return) and extend the
  workday by 3 hrs.
• The travel must involve a travel destination
  located at least 35 miles from the grantee's
  regularly assigned duty station (vicinity) or
  home, whichever is less.

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• Meals during Daily Travel (No partial day or
  overnight)
• Allowances cannot be paid to employees for
  lunches if travel does not involve an overnight
  stay however, employees can be eligible for
  allowances for the breakfast and evening meals
  when the following applies
• Breakfast depart duty station prior to 600
  a.m., and extend the workday by 2 hours.
• Dinner return to duty station after 800 p.m.,
  and extend the workday by 3 hours.
• The travel must involve a travel destination
  located at least 35 miles from the grantee's
  regularly assigned duty station (vicinity) or
  home, whichever is less.

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• Can a grantee charge lunch costs to the grant?
• Generally, no. Under the grant, a grantee can
  only claim lunch costs when grantee meets the
  eligibility requirements and such costs are
  allowable under the State Travel Guidelines.
• What if a grantees agencys internal policy
  permits the grantee to claim lunch costs under
  certain conditions or when certain situations
  exist, such as traveling outside the grantees
  designated county or region?
• Again, no. Under the grant, a grantee can only
  claim lunch costs when grantee meets the
  eligibility requirements and such costs are
  allowable under the State Travel Guidelines.

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• Inter-Grantees Meeting Costs
• Grantees often host trainings and meetings in
  furtherance of grant performance, and must adhere
  to the terms of the contract in doing so.
  Meetings conducted among grantees and HWTF
  technical assistance providers are held to a
  higher standard of inspection any expense
  associated with such meetings will be examined
  and analyzed as to the appearance of impropriety
  or the misuse of State funds. In determining
  such, HWTF considers
• 1. whether costs incurred during the meeting
  were justified weighed against the intent,
  purpose, necessity, and productivity produced by
  grantees/attendees at the meeting
• 2. whether any prior or present concerns exist
  regarding grantees spending patterns and
• 3. whether grantees adhered to contractual
  provisions addressing expenditures arising
  under similar instances.
• In general, subsistence costs are most
  associated with meetings. For example, lunch
  costs incurred during the meeting and the
  conditions noted in 1-3 above will be weighed
  against the States Travel Guidelines and its
  rates/restrictions on eligible and allowable meal
  reimbursements.
• Best advise, if a grantee is first eligible to
  claim a lunch per diem, then each grantee should
  pay for his/her own lunch. Hosting grantee should
  not cater inter-grantee/TA provider meetings.

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• When charging travel and subsistence costs, a
  grantee must provide and document at the very
  least the following information on grantee
  agencys internal reimbursement claim form or
  report
• Locations From and To
• Date and Times In and Out (must be provided
  when grantee is claiming a subsistence cost
  this may be inserted manually by grantee on
  form)
• Purpose or Reason for Travel (provide sufficient
  detail showing connection between the travel and
  the grant)
• Mileage and Rate
• Meals and amounts for each meal WITH ALL
  RECEIPTS and
• Any miscellaneous costs allowable under the State
  Travel Guidelines WITH RECEIPTS.

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• ALL SUBSISTENCE AND LODGING COSTS MUST BE
  SUPPORTED BY RECEIPTS AND DOCUMENTATION TO
  INDICATE THAT THE EVENT FOR WHICH THE GRANTEE
  TRAVELED ACTUALLY OCCURRED.
• Proof of event occurring may include, but not be
  limited to, sign-in sheets, agendas , minutes,
  media about the event.

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• When a grantees per diem rates for subsistence
  and lodging is higher than the States per diem
  rates, the grantee cannot charge the excess costs
  to the grant. Example ABC Health Departments
  rate for dinner is 24.00 but the States rate is
  17.30. The grantee can only charge 17.30 to the
  grant for dinner (supported by a receipt).
• When a grantees per diem rate for subsistence
  and lodging is lower than the States per diem
  rates, the grantee is eligible to claim the State
  rate. Example ABC Health Departments rate for
  dinner is 15.00 but the States rate is 17.30.
  The grantee is eligible to charge up to 17.30 to
  the grant for dinner (supported by a receipt).
  However, such non-actual costs can cause
  auditing nightmares for financial folks, so
  grantees should follow grantee internal policies
  and procedures before claiming and charging costs
  in this manner.

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• Subsistence rates for each meal, breakfast,
  lunch and dinner, are set by the State. A
  grantee must adhere to each separate rate for
  each meal when charging these costs to the grant.
  
• In other words, if a grantee is eligible to
  claim 3 meals, the cumulative total of the 3
  meals will not be used to determine whether the
  costs exceeded or remained within the rates
  allowable. The rate for each individual meal
  controls.
• For example Grantees agency charges actual
  costs to the grant based upon receipts the
  agency does not claim the actual per diem rates
  allowable because of internal grantee policy.
  Grantee spends 4.00 for breakfast, 6.00 for
  lunch, and 20.00 for dinner (and has receipts for
  all meals). In determining whether the costs are
  allowable, the 4.00 spent by grantee for
  breakfast will be compared to the allowable State
  per diem rate for breakfast, 7.75. The same
  comparison will be made for lunch and dinner.
  Here, grantee did not exceed the State rate
  allowable for breakfast and lunch, but did exceed
  the State rate allowable for dinner. The
  cumulative total for the 3 meals is 30.00
  (4.006.0020.00 30.00 - which is 5.15 less
  than the 35.15 per day allowed by the State).
  However, based upon grantees agencys internal
  policy regarding charging for actual
  receipt-based meals, the most the grantee can
  claim and charge to the grant is 27.30
  (4.006.0017.30). In other words, a grantee
  cannot balance the costs of meals to obtain a
  daily cumulative total.

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• However, if grantees agency charges the allowed
  per diem rates to the grant notwithstanding the
  actual cost for each meal (supported by receipts)
  and not exceeding the allowed per diem per meal,
  using the amounts provided in the example above,
  the cumulative total for the 3 meals is 35.15
  (7.7510.1017.30). Based upon grantees agency
  decision to claim reimbursement based upon
  eligibility rather than actual costs, grantee may
  charge 35.15 to the grant. In this instance, for
  breakfast grantee spent 4.00 but is eligible to
  claim 7.75, for lunch grantee spent 6.00 but is
  eligible to claim 10.10, and for dinner grantee
  spent 20.00 but is only eligible to claim 17.30.
  Grantee must keep receipts for the meals although
  grantee is claiming more than what grantee
  actually spent for breakfast and lunch, and
  exceeded the allowed amount for dinner.

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• Excess In-State Lodging Costs
• In instances when a grantee finds that in-state
  travel for a non-required HWTF event will include
  lodging costs that exceed the State allowed per
  diem rate for lodging, the grantee must submit a
  travel request to HWTF applying for approval for
  the excess lodging costs. Without this approval,
  the grantee will be held to the State per diem
  rate.
• Lodging costs must also be supported with
  receipts.

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• State Travel and Mileage
• Actual mileage is reimbursable costs for motor
  fuel and repair/maintenance for vehicles are
  prohibited.
• The business standard mileage rate set by the
  Internal Revenue Service (55.0 cents per mile
  effective January 1, 2009) will be paid. Parking
  fees, tolls, and storage fees are reimbursable
  when the required receipts are obtained.

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Additional Contract Provisions

• Under Section IV. B. Grantees that fail to
  submit required reports by dates specified and in
  the formats, required by HWTF Commission staff,
  are subject to the withholding of payments until
  the reports are received in an acceptable format
  and approved by HWTF Commission staff.
• If a grantee is not current in its reporting
  such as MERs, WIPTS, etc. HWTF may withhold
  reimbursement payments. In addition, until such
  time as grantee becomes current, HWTF will not
  entertain and/or review requests from grantee for
  travel, media, etc.

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• Under Section IV.C. Record Retention Five (5)
  Years Following Date of Contract Cessation Letter
  For a period of five (5) years following the
  date of the Contract Cessation Letter received
  from the Commission after Termination Date,
  Grantee shall maintain full, accurate and
  verifiable financial records, supporting
  documentation, and all other pertinent data for
  this Grant and this Project. These records must
  be maintained so as to identify and document
  clearly the expenditure of Commission funds
  provided under this Agreement separate from
  accounts for other awards, monetary contributions
  or other revenues sources for this Project. In
  the event such records are audited, all Project
  records shall be retained beyond such five (5)
  year period until all audit findings have been
  resolved.
• For clarification purposes, the 5 years begins
  to toll as of the date of the contract cessation
  letter this tolling date is NOT the same date
  of the end of the grant award. The termination
  date is the date on which the last term ends, or
  the date grantees funding terminates pursuant to
  other terms within the contract.

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• Under Section IV.D. Subcontracting.
  Paraphrasing
• 1. Notice Grantee shall notify the Commission in
  writing at least five (5) business days in
  advance of Grantee disbursing Commission funds to
  any subcontractors, partners and subgrantees
  during the term of this Grant. In other words,
  grantees must notify HWTF prior to making payment
  to a subcontractor, partner or subgrantee.
• 2. Bound by Terms All subcontractors, partners
  and subgrantees shall be subject to all terms and
  conditions of this Agreement through a
  subcontract with the grantee. In other words,
  grantee shall have a contract with any
  subcontractors, partners and subgrantees that
  binds them to the HWTF contract.

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• 3. Grantee Responsibility Grantee is
  responsible for the performance of any
  subcontractor, partner, or subgrantee and
  continues to be responsible for all services
  provided under this Agreement regardless of who
  may be providing them. Grantee is responsible for
  the notification and the monitoring of all
  subcontractors, partners, or subgrantees in
  regards to all applicable reporting requirements
  as specified by this contract, including but not
  limited to N.C. General Statute 143C-6-23.
• 4. Payment of Subcontractors, Partners and
  Subgrantees Grantee is responsible for paying
  all subcontractors, partners and subgrantees for
  services and ensuring that all funds are spent in
  accordance with the purposes for which they were
  granted.

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• Grantees are responsible for the contractual,
  regulatory, programmatic and fiscal actions or
  non actions of their subcontractors, partners and
  subgrantees.
• Mini-grants are a form of subcontract and are
  subject to the same contractual provisions that
  regard grantee subcontracting.
• How this comes into play Grantee contracts with
  a subgrantee or awards a mini-grant to a local
  high school. The subgrantee/mini-grant recipient
  uses the funds to purchase items from a health
  education catalog that do not contain a required
  HWTF logo which is a violation of the HWTF
  Guidelines for Media and Promotional Items. HWTF
  will require the grantee, NOT the subgrantee or
  mini-grant recipient, to reimburse the grant for
  the funds used in violation of the Guidelines.

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TRAVEL REQUESTS
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Tips for Completing Travel Request Form

• The travel request form is available on HWTFs
  website (www.healthwellnc.com).
• Form must be submitted at least one month prior
  to date of travel.
• The form should be completed in its entirety (all
  sections completed).
• The budget portion should be estimated as close
  as possible, and ample funds must be available in
  grantees travel budget category prior to
  requesting approval to travel.

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Description and Purpose/Justification of Travel

• The Travel Request Form asks the following
  questions
• 1.Why is it beneficial for grantee to attend this
  training/conference/trip?
• 2.How does this align with the grantees program
  annual action plan goals and objectives?
• Grantees must provide a thorough, concise answer
  for each of these questions.

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• BAD EXAMPLE
• This training was included in my annual action
  plan, and I have sufficient funds to attend.
  Training will help me increase my knowledge and
  skills.

• GOOD EXAMPLE
• I request to attend the CDC training on SHS to
  gain a better understanding of secondhand smoke
  research and how I can integrate this information
  into my May presentation to the local Chambers of
  Commerce and local business owners advocating for
  teen-frequented restaurants to adopt 100 smoke
  free policies. This training is in my Annual
  Action Plan, and sufficient funds have been
  budgeted to cover lodging, meals, and travel
  reimbursement. Attending this training will help
  me to include the most up-to-date SHS research
  into my presentation and will help me to create a
  more compelling case that will help me achieve my
  overall goal of promoting the adoption of a 100
  smoke free policies in local eating
  establishments to protect teen employees and
  customers from exposure to SHS.

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Travel Request Approval Process

• Grantee will
• Obtain a copy of the travel request form on
  HWTFs website and complete it in its entirety.
• Submit the completed form to their respective
  Grants Manager at least one month prior to date
  of travel.
• Grants Manager will
• Provide an initial review for programmatic
  accuracy and review sufficiency of funds
• Communicate with the grantee to obtain revisions
  if necessary and
• Notify the grantee of final approval (within five
  business days of submission of final request).
  Once approval is obtained, the grantee is free to
  register for the training/conference and pay for
  any necessary charges associated with attending.

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BUDGETBudget Bootcamp 101
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Grant Funds

• Guiding Principals
• Funds awarded under a State grant, are State
  Funds and not the funds of HWTF Commission or the
  grantee.
• Grantees should never consider HWTF money as use
  it or lose it.
• State agencies, including HWTF, use
  performance/results based budgeting which means
  the expenditure of every state dollar is compared
  to established goals and objectives through the
  evaluation of service statements compared to
  performance measures

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• When budgeting State funds, a grantee must
  accurately and sufficiently budget funds to the
  appropriate budget categories based upon its
  approved AAP.

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• The approved budget establishes monies in each
  budget category which grantee and HWTF have
  negotiated and agreed upon as sufficient and
  appropriate for grantee to effectively operate
  and execute its program under the contract. In
  other words, the funds in each category are the
  monetary contribution that the grant will
  support.
• For example Funds budgeted to the
  salary/wages/benefits budget category are the
  grants contribution or allocation to this
  line item. In other words, HWTF has approved the
  allocation of funds for the position(s) set forth
  by grantee in the approved budget. Hence, funds
  are approved in this category for the position
  that grantee has set forth in this budget
  category and not the individual filling the
  position. Information regarding the credentials,
  qualifications or educational experience and
  background of the individual filling the position
  are not necessary or relevant for the purpose of
  allocating funds to this budget category.

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• A grantees budget
• is what it says it is -
• no more or less!

42
Budgeting Compensation Expenses

• Budget adjustments are allowed under certain
  circumstances. However, budget adjustments for
  personnel/contracted services (P/CS) are not
  generally allowed.
• When budgeting costs for personnel/contracted
  services for each term, a grantee must
  specifically state who (individuals/entities)
  will be compensated, what the compensation amount
  will be per individual/entity, and what
  duties/tasks each individual/entity will be
  performing under the grant. Particular attention
  must be given to inclusion of any variables if
  variables are not included, then grantee cannot
  bring them forward for consideration at a later
  date.
• In terms of the approved budget, a variable
  refers to language included in a P/CS budget
  category that may allow a grantee to slightly
  change the use or amount of funds in the budget
  category should certain conditions arise that
  were not present at the time the funds were
  originally allocated in the budget category.

43

• Variable Not Included in Budget
• Example, under salary/wages/ benefits in
  grantees approved budget for term 1 grantee
  states Salary and fringe for 2 full-time health
  educators. Annual salary for 1 FTE is 29, 583
  plus approx 31 fringe benefits at 9,192 for a
  total of 38,775. Annual salary for 2nd FTE is
  32,664 plus approx 29 fringe benefits at 9,600
  for a total of 42,264. The combined total is
  81,039. Grantee has budgeted 81,039 for this
  category.
• Grantee states and acknowledges that it will
  utilize no more than 81,039 to support this
  budget category, and grantee acknowledges that
  the grant is contributing no more than 89,039 in
  this budget category. In this case, grantee has
  not included any variables and will not be able
  to request any changes in this budget category
  during term 1.

44

• Variable Included in Budget
• Example under salary/wages/ benefits in
  grantees approved budget for term 1 grantee
  states One FTE salary will be 34,654 with
  fringe of 34.53 at 11,960 for a total of 46,614.
  This amount does not include a cost of living
  increase which may be approximately 2.5, or
  1,165, based on a county pay plan/salary study.
  We estimate that in January 2010 in term 1, we
  may submit a budget adjustment to request the
  increase and understand that the request is
  subject to the availability of funds in our
  budget. Grantee has budgeted 46,614 for this
  category.
• Grantee states and acknowledges that it will
  utilize no more than 46,614 to support this
  budget category AND grantee has also reserved a
  privilege to exercise a request to increase this
  amount by 2.5 or 1,165. In this case, grantee
  has included the variable of a potential increase
  and has reserved the privilege to request the
  increase in this budget category during term 1.
  Grantee has also included a projected timeframe
  for requesting the increase.

45

• Variable Included in Budget
• Example under salary/wages/ benefits in
  grantees approved budget for term 1 grantee
  states One FTE salary will be 36,050 with
  fringe of 20 at 7,210 for a total of 43,260.
  This amount assumes a 3 cost of living increase
  based on a county pay plan. The initial salary
  at the commencement of term 1 is 35,000 and
  fringe at 20 or 7,000 for a total of 42,000.
  The 3 increase brings the total amount for
  salary and fringe to 43,260. We estimate that
  the increase may occur in December 2009. Grantee
  has budgeted 43,260 for this category.
• Grantee states and acknowledges that it will
  utilize no more than 43,260 to support this
  budget category AND grantee has also included the
  variable of the 3 COLA increase, as well as the
  anticipated date of the increase. Note that
  grantee must state the initial salary and fringe
  amounts before the 3 increase. In this
  scenario, grantee has factored in the future
  increase of 43,260 but at the beginning of term 1
  is paying 42,000.

46

• When a grantee states a variable based upon a
  percentage increase, grantee will be held to that
  percentage and cannot exceed the percentage
  amount.
• Example At the beginning of the term, grantees
  approved budget for salary/wages/benefits
  includes a variable to increase the salary/fringe
  amount (40,000) by 5 (2,000) totaling 42,000 in
  Dec 2009. The increase does not actually take
  place until Feb 2010, and the increase to the
  grantee agency is actually 8 and not 5. The
  line item can only be increased by 5 and grantee
  is not eligible to claim monies for the two
  month delay even though the increase became
  effective in Feb 10 and not Dec 09 as grantee
  estimated.

47

• Budget categories that must include a variable
  to reserve a privilege to exercise a monetary
  change during a grant term are
• Personnel/Contracted Services
• Salary/Wages/Benefits
• Contracted Staff
• Other (regarding payment of stipends, speaking
  fees, etc)
• Other Than Personnel Services
• Contracted Services

48

• Budget categories that do not need to include a
  variable to reserve a privilege to exercise a
  monetary change during a grant term are
• Other Than Personnel Support
• Supplies/Materials
• Communication Costs
• Occupancy Costs
• Paid Media Production and Placement
• Capital Outlay
• Other
• Travel Expenses
• Travel
• Meeting
• Other

49

• Communication Costs
• When requesting communication costs, a grantee
  must specifically describe what items will be
  covered and provide a monetary breakout of costs.
• Example Funds will be used for telephone
  services local and long distance. A single
  phone line is approximately 28 per month or 336
  per year, equipped with voice mail capability and
  the YTPC has a personalized message with specific
  service area noted including the QuitlineNC
  number, _at_7/month or 84/yr. Based on estimated
  usage from the two previous grant years, the long
  distance cost that supports the work of YTPC has
  been 10 per month on the average or 120/year.
  The cell phone that has been provided for the
  YTPC averages 26/month or 312/yr. This is
  requested because a substantial amount of time is
  spent after 5pm and on weekends out of the ABC
  Grantee homebase with youth at trainings and
  events when contact by phone is necessitated.
  Postage at 223 with shipping, handling and
  freight at 100 for program mailings to community
  partners and prospective partners that will
  include (churches, restaurants, parents, school
  personnel, businesses, private providers
  including physicians, dentists, and other medical
  professionals) to inform/educate them about the
  goals and objectives of the program and various
  activities and events.

50
Cost Allocations

• Generally, certain costs cannot be allocated to
  the grant. North Carolina General Statute
  143C-6-23 requires cash basis reporting often
  stated as receipt-based reporting.
• Example ABC Health Department Grantee has 4
  state grants and purchases 3 cases of paper each
  month. Each month grantee takes turns charging
  the costs for the cases of paper to one of the 4
  different grants (Jan posted to State Grant 1
  Feb posted to State Grant 2 and so on).
• By definition, this is not cost allocation -
  this practice of rotating the costs for the cases
  of paper across the 4 grants is not allowable.

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Approvals

• Always, always, always retain approvals obtained
  by HWTF for travel, media, etc.
• Remember, all records, whether programmatic or
  fiscal, are auditable.

52
Naming Media/Promotional, Travel and Budget
Adjustment Requests AND MER

• When submitting media/promotional items, travel
  and budget adjustment requests, as well as MERs
  to HWTF, the grantee must ensure that the
  submission is named correctly. If not named
  correctly, HWTF will reject your submission.

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• MEDIA/PROMOTIONAL ITEMS REQUEST
• What to include
• Type of request (promotional or media),
• Grantee Full Name as it appears on contract,
• Name of Project,
• Initiative,
• Date submitted.
• Example
• Media Request_XYZHealthDepartment_ GASO newspaper
  ad_TTUPC_ 05062009

54

• TRAVEL REQUEST
• What to include
• Type of request (Travel),
• Grantee Full Name as it appears on contract,
• Initiative,
• Date submitted.
• Example
• Travel Request_XYZHealthDepartment_TTUPC_
  05062009

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• BUDGET ADJUSTMENT REQUEST
• What to include
• Type of request (Budget Adjustment),
• Grantee Full Name as it appears on contract,
• Initiative,
• Date submitted.
• Example
• Budget Adjustment_XYZHealthDepartment_TTUPC_
  05062009

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• Monthly Expense Report (MER)
• Components of the title for your individual
  organization are
• 566980328 - Federal ID Number of your
  Organization
• OrgName Short title of your Organization
• TTUPC Teen Tobacco Use Prevention and Cessation
  Program
• YR1FinancialsAPPROVED denotes grant year and
  report title
• Month09 month and year expenses were incurred
  (this will be updated each time you enter a new
  months expenses)   
• Example 566980328_XYZHealthDepartment_TTUPC_
  Yr1Financials APPROVED_Month09

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Financials Workbook (MER)
58
Financials Workbook

• Excel Tips
• Zoom Feature
• Page Break Preview

• Three Components of Workbook
• APPROVED Budget
• Monthly Expense Report (MER)
• Budget Adjustment Worksheet

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ApprovedBudget Format
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Monthly Expense Report Format
61

• North Carolina General Statute 143C-6-23
  requires cash basis reporting often stated as
  receipt-based reporting.
• This means that all expenditures charged to a
  HWTF grant (reported on an MER), must be
  supported by some type of documentation such as a
  receipt.
• Expenditures not supported by sufficient
  documentation are not allowable.

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Monthly Expense Reports

• Due electronically to hwtfc_at_healthwellnc.com by
  the 20th of each month for the prior months
  expenses and reported on a cash basis.
• Include in the MER submission email
• Brief justification for any expenses reported in
  line items entitled Other, media and capital
  outlay expenses reported.
• We ask that the naming convention for Financials
  Workbook be maintained 123456789_OrgName_YR1Finan
  cialsAPPROVED_JUL 09 (ONLY the month should be
  changed)

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• Sample e-mail submission to HWTF with monthly
  MER when expenses reported include categories
  that require an explanation such as capital
  outlay, other, media, and/or travel (when
  required by HWTF)
• Attached is ABC grantees monthly MER for
  September 2009.
• The 400.00 reported in other under
  Personnel/Contract Svsc is for stipends paid to
  teachers to conduct NOT (200.00 each to Ms. Purdy
  and Mr. Ugly covering the period August 09 to
  December 2009).
• The 630.00 reported in media is for newspaper ads
  promoting QuitlineNC approved by HWTF on August
  2, 2009.
• The 200.00 reported in travel/other is for van
  rental to transport TRU teens to XYZ County on
  August 10, 2009, to Manteo, NC to attend Question
  Whys Tobacco 101 training.
• The 150.00 reported in travel is supported by the
  attached HWTF Travel Verification Form detailing
  approved travel between August 1 and 31, 2009.

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Attachment HWTF TRAVEL VERIFICATION FORM
Dates of Travel Location Cost Approval Date
8/1/09 Raleigh 30.00 7/5/09
8/15/09 Winston-Salem 90.00 7/5/09
8/25/09 Charlotte 30.00 7/16/09
150.00
65

• When preparing the MER for submission to HWTF,
  grantee should have its approved budget for the
  term at hand to serve as a reference indicating
  its approved allocations to ensure that
  expenditures are reported in the appropriate and
  correct budget categories.

66

• Once HWTF has approved grantees expenditures
  and reimbursed grantee on an MER, grantee can not
  go back and makes changes to amounts entered in
  prior months for which grantee received
  reimbursement. Any adjustments/credits should be
  made in on the next MER grantee will submit to
  HWTF. When reporting such adjustments, grantee
  must state in its e-mail to HWTF 1) its
  expenses and 2) the offsetting adjustments.
• Example Attached is ABC grantees MER for Oct
  2009. As a result of the financial review
  conducted by our grantee manager, we are
  reporting a 500.00 credit in the
  supplies/materials line. The total amount for
  supplies/materials on our MER is -200.00, and the
  breakout in this category is 1) 400.00 in
  purchases of TRU promotional items, 300.00 in
  purchases of QuitlineNC incentives, and the
  -500.00 credit totaling -200.00.

67
BUDGET ADJUSTMENTS
68
WHEN ARE THEY NECESSARY?

• At the time that a grantee is aware or should be
  aware that it will exceed the approved amount for
  a budget line item by any amount. A grantee must
  not wait until the budget line item is exceeded.
• Anytime that a significant programmatic change is
  approved by Commission staff that will have an
  impact on how budget will be spent over the
  remainder of the grant period. Budget adjustments
  must be approved at the same time as the
  programmatic change.
• Anytime the grantee requests to use carry-forward
  funds from one term of the project to a
  subsequent term. Request must be submitted within
  45 days of the grant award termination date.

69

• Funds left over or not being used in a
  budget category are not sufficient justifications
  to warrant approval of a budget adjustment.
  Remember, the funds are State funds and do not
  belong to HWTF or the grantee.
• Budget Adjustments cannot be submitted to
  increase indirect or administrative costs.

70
Budget Adjustment and Approved Budget

• A budget adjustment must relate back to a
  grantees approved budget for the term and, where
  applicable, to any prior budget adjustments
  approved by HWTF in the same term.
• The justification for both increasing funds in a
  budget category and decreasing funds in a budget
  category must be strong and justifiable to
  overcome reallocating the funds from grantees
  approved budget and/or any prior budget
  adjustments.

71

• BAD EXAMPLE
• Supplies/Material Justification
• Increasing this line item by 500 to pay for
  QuitlineNC incentives.
• Media Justification
• Decreasing this line item by 500 because there
  are sufficient funds available to do so.

72

• GOOD EXAMPLE (Relates to Approved Budget)
• Contracted Staff Justification
• Decrease by 500.00. In Year 3, grantee will not
  be utilizing the local program evaluator ABC
  Evaluation Center for evaluation and technical
  services (500.00) as approved in grantees
  budget. Therefore, 500.00 in funds originally
  approved for contracted staff are available.
• Supplies/Materials Justification
• Increase by 500.00. At the time of the original
  Phase III contracting, for Year 3, grantee
  underbudgeted this category. In Years 1 and 2,
  most of our program activities and efforts were
  concentrated on youth in high schools. In Year
  3, we plan to expand program efforts to youth in
  the middle schools. In Years 1 and 2, the TRU
  program has grown and increased its membership.
  Therefore, we project that its membership will
  only increase more in Year 3. With more TRU
  youth we will be conducting more prevention and
  educational activities and events in schools and
  locally in the community, and conducting,
  participating, and hosting more local projects,
  trainings and activities than originally
  projected. Therefore, additional funds are
  needed to cover the cost of supplies/materials
  that will be needed for the increase in the
  number of such activities/events. Funds will be
  used for programmatic supplies/materials for
  youth trainings, peer to peer prevention
  activities, educational materials such as
  handouts banners, posters, flyers,
  incentive/giveaway items such as T-shirts, water
  bottles events and meeting materials (excluding
  food and beverage), office supplies smoking
  cessation materials, and promotional materials
  printed in house such as brochures, flyers and
  posters and for the purchase of TRU recruitment
  and promotional materials.

73

• GOOD EXAMPLE (Relates to Approved Budget)
• Salary/Wages/Benefits Justification
• Decrease by 2,000. Salary costs decreased due
  to a change in staffing structure so that one
  less person is being paid from the grant, and the
  delay in hiring a staff member one month later
  than anticipated. Therefore funds are available
  to support other budget categories as set forth
  below.
• At present, the salary structure and number of
  persons is as follows
• One FTE health educator at XX,XXX plus 10
  benefits at X,XXX for a total of XX,XXX to
  implement annual action plan activities.
• One part time health educator at XX,XXX
  (increased from commencement of Year 3, from
  XX,XXX and number of hours increased to 20 hours
  per week from 18-20 hours per week at
  XX,XX/hour) to implement annual action plan
  activities. This person did not begin work
  until after the start of Year 3.
• At the beginning of Year 3, funds were allocated
  for a finance assistant at 50 FTE is X,XXX plus
  10 benefits at XXX for a total of X,XXX. The
  number of persons working under the grant, as
  well as the structure of our organization has
  changed, and we no longer require the services of
  this person at 50. Instead, we are utilizing
  the finance assistants services at 5 FTE at
  X,XXX plus 10 benefits at XXX for a total of
  X,XXX. Therefore, X,XXX in funds are
  available. The total for 3 personnel is XX,XXX.
  
• Meetings Justification
• Increase by 2,000 At the time of the Phase III
  contracting, the budget for this category was set
  at 0.00 and grantee did not accurately project
  the nature and cost of services to be delivered
  in FY08-09. Funds will be used to provide snacks
  at TRU meetings, snacks for trainings hosted for
  TRU groups, spit tobacco and cessation/QuitlineNC
  trainings, and snacks for adult leader training.

74

• GOOD EXAMPLE (relates to prior budget adjustment)
• Salary/Wages/Benefits/Other Justification
• Decrease by 3,500.00. In August 2008, we
  submitted a budget adjustment to allocate funds
  to this line items to cover costs to pay for a
  HWTFC approved national speaker such as Gruen Von
  Behrens or Rick Bender. Due to the high cost to
  book and scheduling difficulties with both
  individuals, we were not able to book either
  speaker. Rather Reena Roberts of SAVE visited
  our schools in January 2009, and this had a great
  impact and added value to our TRU program. in
  Having Reena visit also proved to be more cost
  effective than either Bender or Von Behrens.
  Therefore, 3,500 is available and we request that
  the funds be reallocated to other budget
  categories.
• Media Justification
• Increase by 3,500. As the rap CD, Too TRU to
  Use, was completed this Spring, we request funds
  be reallocated to promote the rap CD through the
  placement of ads in our local media outlet
  (newspaper ad). We have garnered a great amount
  of earned media for our TRU activities throughout
  the year from this newspaper, and in order to
  maintain that relationship, we find that we
  should pay to place an ad to further retain this
  relationship and promote the video which will
  prove to promote TRU.

75

• GOOD EXAMPLE (relates to prior budget adjustment)
• Media Justification
• Decrease by 2,500.00. In August 2008 we
  submitted a budget adjustment to increase this
  line item by 4,496.00 because at the time of
  Phase III contracting, we did not sufficiently
  allocate funds to this budget category. The
  funds were to be used to purchase and place
  advertising in local media markets in an effort
  to promote TRU tobacco prevention activities and
  messages. We planned to utilize the funds for a
  radio campaign, multiple newspaper advertisements
  correlating with local/state tobacco observance
  days, and school and community media venues to
  promote teen prevention, TFS compliance, and/or
  QuitlineNC cessation messages. Since the budget
  adjustment was approved in August 2008, a large
  amount of earned media has been garnered and
  published in newspapers within ABC County. This
  earned media has resulted in a substantial
  decrease in the media cost that was originally
  projected. We do not plan to purchase any media
  for the rest of the year. Therefore, funds
  originally budgeted for this line item are
  available.
• Supplies/Materials Justification
• Increase by 2,500.00. At the start of Year 3,
  we did not budget sufficient funds in this
  category. We did not take into account the fact
  that ABC County rapidly increased its TRU youth
  groups from 3 to 8. With this increase we need
  more TRU promotional items that we will purchase
  from the online store and local vendors. In
  addition, due to the large number of TRU members,
  we are carrying out more peer to peer prevention
  activities and educational events and we will
  need additional TRU materials to distribute to
  targeted audiences and utilize as recruitment and
  retention tools. The funds will also be used to
  support our activities/events and to purchase
  meeting, events materials, as well as QuitlineNC
  materials for these activities/events including
  but not limited to our TFS workshop scheduled in
  June. We will also use the funds to purchase
  demonstrative educational items for use in the
  schools - to support TRU activities that take
  place there.

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STEPS IN THE BA PROCESS

• Step 1
• You will begin by acquiring your most recently
  Approved Financials Workbook
• If a previous budget adjustment has been made,
  the filename will include the word Amend
• For example, the naming convention HWTF uses is
• FedID_Organization_YR1FinancialsAPPROVED_AMEND1_JA
  N09

77
Step 2

• Select the Budget Adjustment Worksheet tab at the
  bottom of the excel Financial Workbook
• Look for off-setting entries in the budget
  categories that are to be adjusted
• The total amount of decrease must equal the total
  amount of increase, unless Carry Forward is being
  requested

78
Step 3

• The Budget Adjustment Template WORD doc should
  include
• The entire annual budget under the column
  entitled Annual Budget must be filled (insert
  the dollar amounts) out as it would look with
  requested adjustments).
• 2. A very detailed justification of only the
  categories being adjusted.

79
Step 4

• The grantee will send these 2 completed documents
  (Budget Adjustment Worksheet and Justification
  Template) in an email from the grantee with
  SUBJECT OrganizationName_Budget Adjustment
• A. To Grants Manager AND
• B. cc HWTFC_at_healthwellnc.com

80
Step 5

• The Grants Manager will
• Provide initial review for programmatic accuracy
• Transmit electronic correspondence to the grantee
  to obtain revisions if they are needed and
• Send the final version of the grantees request
  (including both the Budget Adjustment Worksheet
  and Justification Template) to Program Officer.

81
Step 6

• The Financial Officer will notify the grantee by
  email (within five business days of submission of
  final request) of the final approval status of
  the request and will cc the Grants Manager and
  the Program Officer.
• Email will include an APPROVED Budget and Monthly
  Expense Report that reflects the adjustment(s).
• Grantee should always report on the most
  recently approved Excel Financials Workbook.

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• The End