Gombash1

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Practical Advice for Meeting the Challenge of
Grants Management

• ELIZABETH T. GOMBASH
• Asst to the Vice President for Resource
  Development
• Valencia Community College
• Orlando, FL
• Florida Council for Resource Development
• Tallahassee, FL
• October 2003

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Lets Get Started
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What is Grants Management?

• Ensuring that program staff have the latitude to
  accomplish something meaningful at the same time
  that every obligation to the funding source is
  met.

Henry Flood Essentials of Grants Management A
Guide to the Perplexed The Grantsmanship Center
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The Challenge of Grants Management Balancing
Effectiveness and Efficiency

• If you are too cautious it can hinder your
  ability to meet your project goals

• but if you are not cautious enough, you could
  experience compliance problems.

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Why So Much Interest in Grants Management Now?

• Those managing public resources need to make a
  good faith effort to be aware of the results of
  public expenditures. This is a fundamental
  aspect of the public trust with which they are
  vested. Having little or no control over
  outcomes or having little or no legal or
  regulatory authority for tracking outcomes is an
  insufficient reason for ignorance about what
  happens with resources once they are passed on to
  another entity.

Chris Wye Performance Management, October
2002 Managing for Results Series, IBM Endowment
for the Business of Government
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Why So Much Interest in Grants Management Now?

• Grant programs account for 20 of the total
  federal budget (400 billion).
• OMB implementation of PART (Program Assessment
  Rating Tool).
• Assessment goals
• Assessment process
• Rating system
• Year 1 results

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Famous Last Words

• I only write grants grants management is not
  my problem.
• Our grants management process is good enough.
• They have so many grants - theyll never audit
  us.

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Why Invest Time and Resources in Grants
Management?

• The rules are not really changing, but the
  interpretation and enforcement of the rules
  continuously evolve. Currently, the pendulum is
  swinging in the direction of tougher and more
  frequent grants management reviews.
• Continuing to fly under the
• radar is not worth the risk!

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Overview of Todays Session

• Getting Started
• Internal Issues
• External Issues
• Rules and Regulations

• Implementation
• Spending Grant Funds
• Collaboration
• Changes
• Timely Spending
• Recordkeeping
• Documenting Match
• Communication
• Evaluation and Reporting
• Preparing for Audit
• Closeout
• Additional Helpful Hints

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Getting Started on the Right Foot

• Consider grants management when developing the
  proposal. Making basic decisions during the
  proposal development process relieves initial
  grants management problems when the project is
  funded.
• Obtain copies of all applicable internal and
  external fiscal guidelines (more on this later).
• Have a clear and mutual understanding of each
  persons management responsibilities within your
  internal organizational structure.
• After the grant is awarded, the
  proposal/negotiated budget is the first place to
  start for grants management, as supported by the
  narrative. This budget is your first spending
  plan.

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Getting Started Internal Issues

• Confirm collegewide and department-specific
  policies and procedures do a realistic
  appraisal of strengths, limitations,
  inconsistencies, etc.
• Institutional policy manual
• Unofficial policies
• Procedures built into computer systems
• Institutional travel and purchasing procedures
• If you have established a policy/ procedure,
  auditors expect you to follow it!

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Getting Started External Issues

• Have ready access to common external regulations,
  policies and procedures check citations.
• Hierarchy of Grant Requirements
• Program Laws (Statutes)
• Cross-Cutting Laws (Assurances, Compliances,
  Executive Orders)
• CFR (Program Rules)
• OMB Circulars
• Grant Agreement
• Internal controls should be based on this
  hierarchy. The law always rules!

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Getting Started Rules and Regulations

• Code of Federal Regulations (CFR)
• http//www.access.gpo.gov/nara/cfr/cfr-table
  -search.htmlpage1
• Office of Management and Budget (OMB) Circulars
• http//www.whitehouse.gov/omb/circulars
• Circular A-110 Uniform Administrative
  Requirements for Grants and Other Agreements with
  Institutions of Higher Education, Hospitals, and
  other Nonprofit Organizations (also A-102)
• Circular A-21 Cost Principles for Educational
  Organizations (also A-87)
• Circular A-133 Audit Requirements

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Getting Started Rules and Regulations

• Agency Regulations and Guidance (examples)
• EDGAR (US Department of Education)
• http//www.ed.gov/offices/OCFO/grants/edgar.
  html
• National Science Foundation (NSF) Grant Policy
  Manual and Grant General Conditions
• https//www.fastlane.nsf.gov/fastlane.jsp
• Public Health Service (PHS)/National Institutes
  of Health (NIH) Grants Policy Statement
• http//www.nih.gov

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Getting Started Rules and Regulations

• Dont just read the regulations comprehend them
  to ensure compliance!
• Lizs common themes
• Consistency
• Allowability
• Completeness
• Accuracy

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Getting Started Rules and Regulations

• What is compliance?
• The effective management of public funds to
  maximize outcomes.
• The avoidance of fraud, institutional
  mismanagement, and poor management of federal
  funds.
• An institutional commitment.

Carol Alderson, Division of Grants Policy,
National Institutes of Health
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Getting Started Rules and Regulations

• Compliance Issues
• Grant awards are made to institutions.
• Grantees must be in compliance with institutional
  as well as federal requirements.
• Institutional requirements may be more
  restrictive.

Carol Alderson, Division of Grants Policy,
National Institutes of Health
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Getting Started Rules and Regulations

• NIH Compliance Data
• Steady increase in grant related allegations
  since FY99 (approximately 80 of caseload).
• Most allegations are institutional not
  individual.
• Most allegations involve large universities.
• Common problem areas
• Improper cost allocation/cost transfers
• Time and effort reporting issues
• Unallowable grant charges
• Accelerated expenditures
• Large unobligated balances

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Getting Started Rules and Regulations

• Common Contributors to Compliance Problems
• Inadequate resources
• Roles and responsibilities of institutional staff
  not clearly defined or understood
• Outdated or nonexistent policies and procedures
• Inadequate staff training and education
• Inadequate management systems
• Perception that internal control systems are not
  necessary

Carol Alderson, Division of Grants Policy,
National Institutes of Health
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Implementation Spending Grant Funds

• Comply with internal and external regulations,
  policies, and procedures.
• Play devils advocate - You cannot ever be too
  concerned about spending plans consider audit
  readiness for every transaction.
• Grant vs. match vs. project cost.
• Expenditures must stand on their
• own each grant year.
• Advance vs. reimbursement

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Implementation Spending Grant Funds

• Compliance Issues
• Comparability of Services
• Maintenance of Effort
• Supplement not Supplant

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Implementation Spending Grant Funds

• Supplement not Supplant
• Hypothetical
• Auditor Presumptions
• Recovery

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Implementation Collaboration

• Sub-recipient vs. Vendor vs. Sub-contractor vs.
  Consultant
• Sub-recipient agreements
• Sub-recipient monitoring

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Implementation Changes

• Proceed with caution!
• Is the change reasonable and necessary to meet
  your project objectives?
• Is the change allowable based on internal and
  external regulations, policies, and procedures?
• How much money is involved?
• Can you still achieve your objectives and
  complete your activities if funds are moved from
  one area to another?
• Do you need prior approval from the funding
  agency? If not, communicate the change to them
  anyway cover yourself!
• Whose approval do you need internally?
• Is there a similar item in the existing budget?

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Implementation Changes

• Exercise
• Allowability Scenarios

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Implementation Timely Spending

• Review budget columns regularly!
• Can you reasonably expect to expend all funds
  within the time frame allowed?
• Does your spending schedule take into account the
  time needed to get needed approvals and to
  process paperwork?
• Is the timing of your expenditures reasonable
  considering the grant period?
• Catch last quarter expenditures.

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Implementation Recordkeeping

• Handle all records with care! Retain records
  that show
• Amount of grant funds
• How funds are used
• Total cost of project
• Share of costs provided by other sources
• Records that show compliance
• Records that show performance

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Implementation Recordkeeping

• Types of records
• Payroll/time cards
• Purchase orders/payment checks
• Consultant and sub-recipient agreements
• Matching records (more later)
• Documentation of rates used for indirect costs,
  facility usage watch out for consistency in
  usage, especially regarding actual vs. market
  value

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Implementation Recordkeeping

• Exercise
• Time and Effort Scenarios

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Implementation Recordkeeping

• Record retention
• Federal - three years from the final report due
  date for the grant unless your award stipulates
  otherwise or you are in the midst of an audit.
• Where should records be stored? Are copies or
  electronic documents OK?

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Implementation Documenting Match

• Counting match can be a challenge
• Match vs. Cost Sharing
• Why is match important?
• Cash vs. and in-kind match
• When do you use match?
• What counts as match? It depends.
• How is match calculated?

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Implementation Documenting Match

• Common matching expenditures
• Personnel and fringe benefits time and effort
  forms
• Indirect cost vs. value of facility and equipment
  usage be careful - these can involve complex
  calculations of market rate or depreciation
• Beware of overlapping matching!

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Implementation Communication

• Communicate with the funding agency, primes, and
  sub-recipients!
• Cultivate relationships call, send cards.
• Dont let connections grow cold.
• Provide continuing education for project staff.
• Dont forget to share information with your
  community and colleagues (including CRD)

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Implementation Evaluation and Reporting

• Capture data frequently, consistently, and
  accurately!
• Formative vs. summative programmatic reports
• Format and content
• Electronic options the NSF FastLane model
• Data collection and assessment instruments
• How do you explain unexpected outcomes or
  objectives that were not achieved?

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Implementation Preparing for Audit

• Before an external auditor ever contacts you
• Maintain orderly records - dont expect much lead
  time.
• Perform internal audits and reviews as part of
  your internal controls system.
• Conduct internal performance and fiscal reviews -
  err on the side of caution confront your
  problems then correct them.
• Make sure that your sub-recipients understand
  that they are subject to audit also.
• Check out the Federal Audit Clearinghouse website
  at http//harvester.census.gov/sac/ .

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Implementation Preparing for Audit

• When you hear from the auditor
• Stay calm!
• Your goal a clean audit report with minimal
  findings.
• Clarify what the auditor needs provide no more,
  no less.
• Call counsel if needed.

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Implementation Preparing for Audit

• Next steps
• Create a response team.
• Cooperate fully with the auditors be completely
  responsive to their requests - check and double
  check what they have asked for and what you
  intend to present.
• Compare what you intend to present with previous
  audit documents.
• Present organized and detailed documents - dont
  make it hard for the auditors to find the
  information they need.

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Implementation Preparing for Audit

• After the audit
• Communicate preliminary audit findings with the
  team and seek their input for the response.
• Check and double check your response to the
  preliminary audit findings.
• Distribute the final audit report to the team and
  seek their input in developing a corrective
  action plan.
• Submit corrective action plan to the auditors and
  wait for acceptance.
• Distribute corrective action plan to all
  necessary parties.
• What happens if the funding agency does not
  accept the corrective action plan? What are the
  penalties?

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Closeout

• Disposing of equipment and supplies.
• Is it a crime to return funds?
• Compress records and keep them in a central
  location.

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Additional Helpful Hints

• Dont depend on your memory create checklists,
  calendars, databases, etc.
• Dont wait for a catastrophe to start thinking
  about compliance!
• Check for federal updates regularly.
• Maintain an open door policy to proactively
  address problems and to minimize the number of
  grants management fires you have to put out.
• Enroll in grants management courses and attend
  conferences to gain/update your knowledge.
• Dont let a bad grants management experience
  color your thoughts in a negative way about
  grants in general.
• Change the grants management culture of your
  institution.