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Gilbert Tran Executive Office of the President

Office of Management and Budget

Governor’s Grants Conference 2011

Agenda

• The Big Grant Picture• Grant Basics• Grant Monitoring

and Oversight

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0

100

200

300

400

500

600

1960 1970 1978 1986 1994 2002 2010

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$7B $24B $91B $200B

$600B

CFDA lists more than 2,000 Federal grant programs

In Billion of $

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In 1950, Federal grants to states totaled $2.5 billion

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Distribution of Federal Grants

4%

1%

80%

8%

7%

States

Locals

Universities

Non-Profits

Tribes, For-Profit, Others

2012 US BUDGET - $3.7 TRILLION GRANTS- $600 BILLION

In 2012, Federal grants to states will total $480 billion

Patty, Will you marry me?

Patty, Will you marry me?

And pay my mortgage

My student loan

My child support

“Grants can’t be taken from granted”

Suspension Debarment Regulations

Drug Free Workplace Regulations

Lobbying

Act

Guidance Policy Manuals

Davis

Bacon Act

Terms and Conditions

Program Regulations

Statutes

OMB Circulars

Program Statutes

Appropriations

Govt.-Wide

Agency & Programs

Govt.-Wide

A&A

Grant Agreements, Terms and Conditions

Statutes

Authorizations: establish program, define purpose, prescribe eligibility standards and application process, set grant terms and conditions Appropriations: make fund available

OMB Circulars – Government-wide guidance adopted by agencies in their regulationsPublic Policy Requirements (e.g., lobbying, drug-free workplace)Agency Program and Administrative RegulationsOther Agency Guidance: policy manuals, award document T&C

OOH My head hurts!!

Cost Principles (Gilbert Tran)A-21- Colleges & UniversitiesA-87- GovernmentsA-122- Non-Profits

Administrative Requirements (Marguerite Pridgen)

A-102- GovernmentsA-110- Everyone Else

Audit Requirements (Gilbert Tran)A-133- Everyone

Compliance Supplement

What’s the LAW ?

$600 B

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Relation to Other CircularsRelation to Other CircularsRelation to Other CircularsRelation to Other CircularsType of Institution Cost Principles

Administrative Requirements

Audit

State/Local Government

A-87"Common Rule"

A-102A-133

Colleges & Universities

s

A-21 A-110 A-133

Hospitals & Care Facilities

Various, 45 CFR 74

Various, A-110 Various, A-133

Other Non-Profits A-122 A-110 A-133

For Profit (commercial)

48CFRPart 31 FAR FAR

Objectives of the Cost CircularsObjectives of the Cost CircularsObjectives of the Cost CircularsObjectives of the Cost Circulars

Provide guidelines for reimbursement requirementsProvide uniform standards of allowabilityProvide uniform standards of allocationDoes not supersede limitations imposed by lawSimplify intergovernmental relationsEncourage consistency in treatment of costs

Circular Basic PrinciplesCircular Basic PrinciplesProvide guidelines on cost reimbursements of Federal awards

Cost Allowability Direct and indirect costsAllocation of indirect costsProvisions on specific items of costs

RAA!!

RReasonableeasonable: “incurred by a prudent person”, “necessary for the operation”AAlllocablelocable: “benefits received”AAllowablellowable: Circular, law, T&C, local reg.

I just can’t wait to be …KING !!

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A-133 Single Audit - What is Audited?

Financial Statement audit Major Program

– Compliance with laws and regulations

– Internal control over compliance

Major Programs are based on auditor judgment Major Program Selection

– Size of Program

– Prior Audit Experience

– Federal Guidance

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Purpose of the Compliance Supplement

Identifies important compliance requirements that the Federal Government expects to be reviewed if it has a direct & material impact on program

CS is required to be used by auditors

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14 Types of Compliance Requirements

A. Activities allowed or unallowed

B. Allowable costs/cost principles

C. Cash management

D. Davis-Bacon Act

E. Eligibility

F. Equipment & real property management

G. Matching, level of effort, earmarking

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14 Types of Compliance Requirements

H. Period of availability of Federal fundsI. Procurement & suspension & debarmentJ. Program incomeK. Real property acquisition & relocation

assistanceL. ReportingM. Subrecipient monitoringN. Special tests and provisions

“Spending Stimulus take Money” - $787 Billion

“We’re going to operate in a transparent fashion so that taxpayers know this money is not being wasted on a bunch of boondoggles”

President Obama, Washington Post, June 12, 2009

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OMB Guidance -- 02/18/09, 04/03/09, 04/07/09, 05/11/09, 06/22/09, 09/11/09, 09/30/09,10/13/09, 11/30/09, 12/18/09, 3/22/10, 05/04/10, 09/24/10 Agency use SA for program risk assessment Agency use SA for program monitor

Separate ARRA CFDA, separate reporting on SEFA and DCF (including subrecipients)

Federal Audit Clearinghouse to display summary of all single audits

Review of Single Audits

Presidential Executive Memorandum 4/26/10 Combating Noncompliance with ARRA reporting requirement

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ARRAEffect of ARRA awards on major program determinationSEFA & SF-SAC presentation of ARRA awardsSeparate reporting of audit findingARRA programs –covered and not covered

Non-ARRAGranting of extensions suspendedLow-risk auditee criteria clarifiedLoan program safe harbor

If new ARRA CFDA added to cluster in 2011 Supplement and new ARRA CFDA has current year expenditures then cluster not qualify as low-risk

Cluster with new ARRA CFDA considered new programTherefore cannot qualify as low-risk Type A program as not pass the two-year look-back criteria

SFA & R&D ExcludedARRA portion of Pell Grant Program and Work-Study not identified to Grantee - SFA see Part 5-3, Section IVR&D, e.g., CFDA numbers not listed in Supplement

SFA and R&D ExcludedRule – If ARRA expenditures then not low-risk

Inherent risk associated with transparency and accountability requirements for ARRA funds preclude being low-risk

Exception if ALL of the following met:Had ARRA expenditures in 2010Audited as major program in 2010ARRA expenditures in current audit period less than 20% of total expenditures for program or clusterOtherwise determined low-risk under §___.520(c) and §___.525

SFA and R&D Excluded

Programs with ARRA expenditures considered programs of higher risk inherent risk ( §___.525(d))

When Type B programs are required to be selected as major under §___.520(e)(2), presumption is the programs with ARRA expenditures would be selected first.

However, auditor is not precluded from selecting an especially risky Type B program that does not have ARRA expenditures.

A, “Activities Allowed or Unallowed” to include limitations on activities funded with ARRA funds. D, “Davis-Bacon Act,” for coverage under ARRA.I, “Procurement and Suspension and Debarment,” to add ARRA Buy American requirements.L, Reporting

Added testing 1512 ReportingAward NumberAward AmountTotal Federal Amount ARRA Funds Received/InvoicedTotal Federal Amount of ARRA Expenditures

“Best Available Data” Clarification

M, Subrecipient Monitoring updatesRequirement for use Central Contractor Registry (CCR)

Clarification for timing

N, “Special Tests and Provisions,” for ARRA-funded expenditures.

Separate accountability for ARRA FundingPresentation on SEFA and Data Collection FormSubrecipient Monitoring

IPERA 2010 – Recapture AuditsS.303 – FFAMIA of 2009ARRA Internal Control Project Part 3 ARRA Single Audit Findings SypnosesARRA Single Audit MetricsPresidential Memorandum on State Flexibility – February 28, 2011

IPERA, July 22, 2010

Fall is here…Grants and Recovery Continue…