Proper Documentation

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Proper Documentation

• Kristina Tecce
• Walker Company LLP
• Ktecce_at_walkerllp.com
• 877-363-9300

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Regulatory Requirements Provide the Guidance
Foundation For Your Financial Management Systems
OMB CIRCULAR REQUIREMENTS
STATE REQUIREMENTS
GRANT PROVISIONS
NOTICE OF GRANT AWARD
PROGRAM
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Determination of Acceptability of Costs

• Conditions in award letter
• Provisions
• OMB Circulars
• Program Applicability
• Allocable
• Allowable
• Reasonable
• Necessary

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Reasonable Costs

• 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 costs. The
  question of the reasonableness of specific costs
  must be scrutinized with particular care in
  connection with organizations or divisions which
  receive the preponderance of their support from
  awards made by Federal agencies.
• Definition from OMB Cost Circular

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Efficient Accounting System

• The Grantees accounting system must be capable
  of
• Distinguishing grant versus non-grant related
  expenditures
• Identifying costs by program year
• Identifying costs by budget category
• Differentiating between direct and indirect costs
  (administrative costs)
• Accounting for each award/grant separately
• Ideally recording in-kind contribution as
  revenue and the related expense

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Matching

• Match
• Must be verifiable from recipient records
• Must not be included as contribution for other
  federally-assisted program
• Must be necessary and reasonable for
  accomplishing program objectives
• Must be allowable according to cost principles
  (OMB Circulars)

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Documentation

• Documentation should ensure that all costs are
• Reasonable and allocable
• Conform to grant/contract limitations
• Treated consistently
• Recorded in accordance with Generally Accepted
  Accounting Principles (GAAP)
• Not included as cost or match for other
  federally-assisted program

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Documentation Objective

• All documentation (federal and grantee shares)
  should contain information that supports
• What is the service or good obtained
• Why the transaction is allowable for the grant
  purposes
• The value of the contribution
• Accounting records should trace back to source
  documentation

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Time Activity Documentation
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Time Activity Documentation

• All salaries and wages charged to CNCS grants
  must be supported by signed Time and Attendance
  records except for
• State, Local and Indian Tribal governments must
  comply with OMB A-87
• Educational Institutions must comply with OMB
  A-21
• Time must be based on after-the-fact activity and
  not based on a predetermined basis

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Time Activity Reporting Nonprofit
Organizations

• According to OMB Circular A-122
• Reports reflecting the distribution of activity
  of each employee must be maintained for all those
  whose compensation is charged (in whole or in
  part) to awards. The reports must reflect an
  after-the-fact determination of the actual
  activity of each employee. Budget estimates do
  not qualify as support.
• Activity reports must be signed by the employee
  and supervisor.

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Time Activity Reporting State or Local
Government

• According to OMB Circular A-87
• If an employee works on a single Federal award
  support for salary can be periodic certifications
  by the employee (at least semi-annually)
• If an employee work on multiple cost
  objectives/activities, support must be 1) after
  the fact, 2) account for total hours worked 3) be
  prepared at least monthly and 4) signed by
  employee and supervisor

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OMB A-87 requirements of documentation for
Activity reporting

• Must reflect an after-the-fact distribution of
  each employees actual activity
• Must account for the total activity of each
  employee
• Must be prepared at least monthly and should
  coincide with one or more pay periods
• Must be signed by the employee

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Time Activity

• OMB A-87 Budget estimates do not qualify as
  support for expenditure, except on an interim
  basis, provided that
• The estimates produce reasonable approximation of
  the actual activity performed
• Quarterly comparison to actual activity is
  performed
• Budget estimates are revised at least quarterly
  to reflect changed circumstances

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Documenting In-Kind Contributions Received
Document the basis for determining the value of
personal services, material equipment, building,
and land. Obtain acknowledgement of the
contribution which should include Name of
donor Date and Location of donation
Description of item/service Estimated
value Keep a copy of the receipt in your files.
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Records Retention

• Retain all financial records
• 3 years from date of submission of final
  Financial Status Report
• If there is an on-going audit 3 years from final
  audit resolution