DHHS ACF Region 10

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Fiscal Policy Interpretation
Julianne Crevatin/Lee Gooding Seattle,
Washington October 24-25, 2006
DHHS ACF Region 10
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Fiscal Issues

• New Grants Policy Statement
• Lengthy Document
• On the Web
• Changes regarding Pre-Approval for Equipment
• Audit Information
• When due, who sends
• When R10 needs a copy
• Management Letter requirement
• What to do when NEAR Center sends a letter
• Final SF269, SF272, PMS Drawdowns
• 3-day rule
• Can not use new funds to pay for old expenses

3

• Budget Execution System
• Track Actual Expenses against Budget
• Project Actual Expenses to Year End to determine
  surplus or deficit
• Take Action to Spend Surplus wisely or cut
  expenses to bring overspending back into line
  with authorized budget amounts
• Includes both Grant Funds and Non-Federal Share
• Board Responsibilities for Internal Review
• Recent IMs and PIs
• Fundraising
• Grantee Finance Person

4
Internal Controls

• 1304.50   Program governance.
• (g) Governing body responsibilities.
• (2) Grantee and delegate agencies must ensure
  that appropriate internal controls are
  established and implemented to safeguard Federal
  funds in accordance with 45 CFR 1301.13.

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Internal Controls (continued)
74.21   Standards for financial management
systems. (b) Recipients' financial management
systems shall provide for the following (3)
Effective control over and accountability for all
funds, property and other assets. Recipients
shall adequately safeguard all such assets and
assure they are used solely for authorized
purposes.
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Internal Controls (continued)

• 92.20   Standards for financial management
  systems.
• (b) The financial management systems of other
  grantees and sub grantees must meet the following
  standards
• (3) Internal control. Effective control and
  accountability must be maintained for all grant
  and sub grant cash, real and personal property,
  and other assets. Grantees and sub grantees must
  adequately safeguard all such property and must
  assure that it is used solely for authorized
  purposes.
• First, unlike the requirement on organizational
  structure that we found sufficiently clear in
  First State, the requirement at issue here does
  not specify all of the actions a grantee must
  take to be in compliance. The performance
  standard in section 1304.50(g)(2) (under the area
  of "Program Governance") provides that the
  governing body has the responsibility "to ensure
  that appropriate internal controls are
  established and implemented to safeguard federal
  funds in accordance with 45 CFR 1301.13."
  (Emphasis added.) Neither this requirement nor
  the referenced section specifies what internal
  controls are "appropriate" for any particular
  grantee. NEON DAB Decision No. 2002 (2005)

7
Internal Controls (continued)

• 92.20   Standards for financial management
  systems. (contd.)
• Report narratives should describe why a grantee's
  financial management system does not provide
  reasonable assurance that transactions are
  properly recorded and accounted for, reliable
  financial statements and Federal reports aren't
  or can't be prepared, accountability over grant
  assets is not maintained, there's demonstrated
  noncompliance with laws, regulations, and
  established fiscal procedures, or grant funds and
  assets are not used solely for authorized
  purposes.
• Internal controls findings must make clear what
  the grantee is or is not doing that makes it
  noncompliant with the internal controls
  performance standard.