Budget: Managing and Working with Your Budget Office

Carla Kirksey & Amas Aduviri

Objectives

Review the Process of the Revised Budget

Review the Revised Budget Checklist

Provide opportunity to ask questions

Basis of Your Budget

Your approved Application Project NarrativeYour approved Application ED 524 (Sections A,B&C)• Section A: Description of use of Federal funds • Section B: Description of the use of Non-Federal funds• Section C: Narrative of the use of Federal AND Non-

Federal funds

Attachment JSubsequent Changes and Revised Budgets

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OME Monitoring of Fiscal Matters

Review of Application BudgetReview of Revised BudgetReview of APR Expenditure ReportMonthly or Quarterly Review of DrawdownsReview of Grant Balance at ContinuationReview of Use of Funds for Specific Requests On-site and Desk MonitoringCarryover Review

Revised Budget Checklist Overview

Calculations

Category Checks

Cost Sharing

Indirect Cost

Review of Application BudgetNot Required by program laws or regulationsIf proposed in application, must be provided Must be outlined in ED 524, Sections B (Table) and Section C (Narrative)Treated as Federal fundsare treated

How Is Cost Sharing / Matching Handled?

The Budget Process

Application With Budget Request

ED 524

Budget AnalysisED 524

Attachment Js

Department’s Recommendation

GANAttachment Js

Your Acceptance of RecommendedRevised Budget

Expenditure Reporting & Carryover Projection

APR, Cover Sheet and Section E

Department’s Recommended Continuation

GANOriginal Attachment Js

Your Acceptance of Continuation & Explanation

of CarryoverRevised Budget

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What Are the Basic Considerations of Cost?

Reasonable

AllowableAllocable

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How Do I Determine a Reasonable Cost?

A cost is reasonable if it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.

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How Do I Determine an Allocable Cost?

A cost is allocable to a particular cost objective if the goods/services involved are chargeable/assignable to such cost objective in accordance with relative benefits received/other equitable relationship.A cost that can be traced to specific activities of a grant project.

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How Do I Determine an Allowable Cost?

Is necessary & reasonable for the performance of the awardConforms with Federal cost principlesIs consistent with uniform procedures of the organizationIs determined in accordance with generally-accepted accounting principlesIs not included in any other Federally-financed grant (unless authorized by statute) 12

What is Equipment?

Tangible nonexpendable personal property • having a useful life of more than one year and • an acquisition cost of $5,000 or more per unit.

WHAT ARE SUPPLIES? Fungible property (paper, pens, pencils, calendars, CDs,

DVDs, chairs, desks, etc.) Less than $5,000 per unit NOT equipment, intangible property (e.g., software

designs), debt instruments, and contractor inventions (e.g., student classroom alertness monitor/SCAM)

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Indirect Costs

Difference between agreed upon indirect cost and a restricted indirect cost rate cannot be used for cost sharingDirect Cost Base must not include • Each sub-award in excess of $25,000 (contracts)• Stipends• Tuition and related fees• Equipment, as defined in 34 CFR 74.2

8% applies to sub-awards that fund trainingIf negotiated indirect cost rate is lower, the grantee must use the lower of the two

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What Kind of Financial Management Systems Do I Need?

• Relate financial data to performance data• Accurate, current, & complete disclosure • Records that identify source & application of

funds• Effective control over & accountability for all

funds, property, & other assets• Written procedures

to minimize the time between transfer of funds to the recipient

for determining costs reasonableness, allocability, & allowability

• Accounting records supported by source documentation

• May require adequate bonding & insurance15

Things to Remember

Email the 524 form in a Word document or Excel version to your program officer with only the current year’s column.Revised budgets were due August 30, 2014.Have proper documentation on file at your project concerning contractors.• Refer to the Revised Budget Checklist for the additional

information on documentation for contractors.Send a full narrative only if there are changes to the budget.• Highlight specific changes from the original

application’s budget.

Revisions

Financial expression of the projectRequired to report deviations from budget and project plans Request prior approvals for budget & plan revisions, in accordance with EDGAR 74.25Grantee prepares & submits a budget revision to acknowledge & accept the award & all conditions 17

Budget Revision—Expanded Authority

A one-time extension of the expiration date of the award of up to 12 months• To complete project activities, NOT spend down

fundsCarry forward unobligated balances to subsequent funding periods

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Carryover BalanceUnexpended funds from a previous budget period that are authorized for allowable costs in a current budget period

Can be used in the next budget period for allowable activities without any action by ED or the grantee unless restricted by program staff as an award conditionProgram staff may require a description of how the unexpended funds will be usedIn past years, some grants were offset for carryover so funds could be redistributed.

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Budget Revisions—Prior Approvals• Change in scope or objectives • Need for additional funding• Change in key personnel specified in the application • Absence for more than 3 months of PD or PI• A 25% reduction in time of PD or PI• Transfer of amounts budgeted for indirect costs to absorb increases in

direct costs, or vice versa• Costs that require prior approval in accordance with 2 CFR • Transfer of funds allotted for training allowances (stipends) to other

categories of expense• If NOT described in the application & funded in the approved award, the

transfer or contracting out of any work under an award

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Generally not approved by Department

ReferencesProgram Statute: Title IV, Section 418A of the Higher Education Act of 1965 as amended by section 408 of the Higher Education Opportunity Act P.L. 110-315 (H.R. 4137)Program Regulations: 34 CFR Part 206Education Department General Administrative Regulations (EDGAR)Cost Principles• 2 CFR Part 200

Grant AttachmentsFAQs Conferences and Meetings

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OME ContactMichael Holloman 202-260-2067 Michael.Holloman@ed.govCarla Kirksey 202-260-2114 Carla.Kirksey@ed.govEdward Monaghan 202-260-2823 Edward.Monaghan@ed.govTara Ramsey 202-260-2063 Tara.Ramsey@ed.govKaran Sage 202-260-7496 Karan.Sage@ed.gov

Always seek the assistance of your

program officer first!