Fiscal Components of a Grant

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Gordon Palmer
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Office of Head Start Region V Conference Fiscal Components of a Grant Presenters: Heather Wanderski, Regional Program Manager Jason Rasmussen, Head Start Program

1 Office of Head Start Region V Conference Fiscal Components of a Grant Presenters: Heather Wanderski, Regional Program Manager Jason Rasmussen, Head Start Program Specialist Karen Claxton, Grants Management Specialist Tameika McDonald, Grants Management Specialist Victoria Watson, Grants Management Specialist October 31, 2018

Agenda Application Instructions Section II: Budget and Budget Justification Detailed Budget Narrative Training and Technical Assistance Funding

2 Agenda Application Instructions Section II: Budget and Budget Justification Detailed Budget Narrative Training and Technical Assistance Funding Non-Federal Match Administrative and Program Costs Indirect Cost Rate Cost Allocation Budget Revisions and Amendments Region V Office of Head Start 2

3 Office of Head Start Region V Conference Application Instructions Section II: Budget and Budget Justification

4 Section II: Budget & Budget Justification Comprehensive Budget Separate budgets for HS and EHS Separate budgets for grantee and each delegate Costs explained by object class category Alignment with SF-424A Region V Office of Head Start 4

5 Section II: Budget & Budget Justification Identify and explain each: Delegate agency agreement Partnership contract Item that costs more than $150,000 Region V Office of Head Start 5

6 Section II: Budget & Budget Justification Describe planned COLA fund usage Region V Office of Head Start 6

7 Section II: Budget & Budget Justification Describe systems to maintain effective control and accountability for grant funds, property and other assets Region V Office of Head Start 7

8 Section II: Budget & Budget Justification Non-federal match (NFM): Identify each source Estimated amount per source Valuation methodology Allowability Region V Office of Head Start 8

9 Section II: Budget & Budget Justification Non-Federal Match Waiver: Lack of resources in the community Impact in initial years of operation Unanticipated increase in program costs Major disaster Impact resulting from an end to the Head Start program Region V Office of Head Start 9

10 Section II: Budget & Budget Justification Administrative Costs: 15% limitation Waiver must meet Section Admin = 15% Program = 85% Region V Office of Head Start 10

11 Section II: Budget & Budget Justification Enrollment Reduction Request: Budget implications Cost savings Region V Office of Head Start 11

12 Section II: Budget & Budget Justification Conversion Request: Reallocation by object class category Explanation of changes Description of start-up costs One-time funding Region V Office of Head Start 12

13 Section II: Budget & Budget Justification Funds for facility: Purchase Construction Major renovation Region V Office of Head Start 13

14 Section II: Budget & Budget Justification Funds for Equipment: Equipment (45 CFR 75.2) Acquisition cost of $5,000 or more per unit and useful life greater than one year Describe procurement procedures Region V Office of Head Start 14

15 Office of Head Start Region V Conference Detailed Budget Narrative

object class categories Use appropriate CANs Cross

16 Budget Expectations Use current instructions Organize budget appropriately Align with federal object class categories Use appropriate CANs Cross check narrative with 424A Region V Office of Head Start 16

17 Detailed Budget Narrative Explain costs by object class category a. Personnel b. Fringe Benefits c. Travel d. Equipment e. Supplies f. Contractual g. Construction h. Other Region V Office of Head Start 17

18 Common Budget Errors Lack of Travel Details: Transportation (e.g. flights) Lodging Per diem Region V Office of Head Start 18

19 Common Budget Errors Equipment vs. Supplies Equipment - Cost of $5,000 or more and useful life greater than one year Region V Office of Head Start 19

20 Common Budget Errors Identify and explain each: Delegate agency agreement Partnership contract Item that costs more than $150,000 Region V Office of Head Start 20

21 Common Budget Errors Facility costs Cost allocation Administrative costs Indirect costs Region V Office of Head Start 21

22 Office of Head Start Region V Conference Training and Technical Assistance Funding

23 Training and Technical Assistance Plan (b) Training and Professional Development Required trainings Minimum of 15 hours per year Child abuse and neglect training Best practices for implementing family engagement strategies Improving child and family outcomes Region V Office of Head Start 23

24 Training and Technical Assistance Plan Plan development Include required trainings Connect to goals and self-assessment Create budget to reflect needs Region V Office of Head Start 24

25 Training and Technical Assistance Plan Region V Office of Head Start 25

26 Training and Technical Assistance Budget Expectations: Needs to align TA plan with TA budget Follow object class categories No need to duplicate budget in plan May include personnel and fringe benefit costs associated with training (e.g. coach, mentor, etc.) Region V Office of Head Start 26

27 Common Training and Technical Assistance Budget Errors Activities not related to training or technical assistance Not including required trainings Lack of details around travel Registration fees Inappropriate personnel charges Lack of alignment between components of the application Region V Office of Head Start 27

28 Office of Head Start Region V Conference Non-Federal Match

29 Allowability of Costs Reasonable Recognized as ordinary and necessary Comparable to market prices Meet sound business practices arm s length bargaining Prudent in light of circumstances Meet established cost practices and is consistently applied Allowable Costs Must Be Other Conforms to limitations/exclusions Is consistent with policies/procedures and applied uniformly Is accorded consistent treatment Meets GAAP (except local and tribal governments) Doesn t match other federal awards Adequately Documented Allocable Chargeable and assignable Beneficial and distributed using reasonable methods Necessary to the award Verifiable from the nonfederal entities records Adapted from 45 CFR Region V Office of Head Start 29

30 Non-Federal Match Either cash or donated goods and services by grantee or third party (the community) Region V Office of Head Start 30

31 Non-Federal Match Region V Office of Head Start 31

32 Non-Federal Match Calculation: Total Grant Award = $1,250,000 x 20% = $250,000 Match OR Federal Share = $1,000,000 x 25% = $250,000 Match Tip: Divide the federal funds awarded by 4 Region V Office of Head Start 32

33 Shifting Strategy Non-Federal Match Moving away from relying on Creative match Parent donations Lots of small donations All in-kind Moving to... Clearly allowable match Long-term community donations Larger donations Larger percentage of cash Region V Office of Head Start 33

34 Non-Federal Match Provide computations, a narrative and a justification for each NFM category Region V Office of Head Start 34

35 Non-Federal Match Valuation methodology must include: Service provided Rate of pay (valuation) Hours or number of units Region V Office of Head Start 35

36 Non-Federal Match Examples Volunteers Parent volunteers as teacher assistant = wage + fringe benefits $12.12/hour* 2 hours* 4 weeks *12 months = $1,163 Classroom volunteers as teacher assistant = wage + fringe benefits $12.12/hour* 2 hours* 4 weeks *12 months = $1,163 Region V Office of Head Start 36

37 Non-Federal Match Examples Volunteers Governing body = executive hourly wage + fringe benefits $50 /hour * 2 hours * 12 months = $1,200 Policy Council members = management hourly wage + fringe benefits $30/hour * 2 hours * 12 months = $720 Region V Office of Head Start 37

38 Non-Federal Match Examples Other Types of Volunteers Retired teachers Sorority members High school students Senior citizens Church groups Up-keep at FCC homes Gardener Zumba/yoga instructor Region V Office of Head Start 38

Non-Federal Match Valuing In-Kind Donations Supplies/Materials Value must be reasonable and not exceed fair market value when donated Donated Land/Buildings Value established by independent certified

39 Non-Federal Match Valuing In-Kind Donations Supplies/Materials Value must be reasonable and not exceed fair market value when donated Donated Land/Buildings Value established by independent certified appraisal. Conducted every 3- years Donated Use of Space Value established by certified appraisal not to exceed fair rental value. Conducted every 3-years Donated Space When Grantee Owns Building Grantee may claim depreciation Region V Office of Head Start 39

foundations, and other sources Know original source of cash funds

40 Cash Donations Non-Federal Match Generated by grantee; state, local, and Tribal governments; private organizations; foundations, and other sources Know original source of cash funds Spend on allowable costs before counted as match Region V Office of Head Start 40

41 Common Non-Federal Match Source Errors Child Care Funds are federal in nature Parent activities that benefit the family and not the program Parent Fees Parent Socialization (Home-Based) Region V Office of Head Start 41

42 What If You Can t Meet Your Match? Waivers Region V Office of Head Start 42

Non-Federal Match Waiver When a grantee knows in advance it is not going to meet the required Non-Federal Match, then the waiver should be included in the application All waivers must be approved in

43 Non-Federal Match Waiver When a grantee knows in advance it is not going to meet the required Non-Federal Match, then the waiver should be included in the application All waivers must be approved in an NOA Waiver Approvals Lack of, or change in community resources Start-up of new programs/services Unanticipated cost increase Community disaster Impact if program were discontinued Region V Office of Head Start 43

44 Office of Head Start Region V Conference 15 Minute Break

45 Office of Head Start Region V Conference Administrative and Program Costs

46 Administrative vs. Program Costs Administrative costs include: Salaries and fringe benefits of executive personnel Organization-wide planning costs Accounting and auditing purchasing and personnel functions Maintenance and operation of administrative space Program costs directly relate to the provision of program component services, including services to children with disabilities, as set forth and described in the Head Start Program Performance Standards (45 CFR part 1304). - HSPPS Terms Region V Office of Head Start 46

Buses - shared cost is identified and charged to each program Other Direct Costs Rent - facility is used exclusive by

47 Examples of Direct/Program Costs Salaries, wages, fringe benefits Salaries and benefits for staff members that can be identified to working on a program Equipment: Capital equipment purchases Buses - used only for a particular program Buses - shared cost is identified and charged to each program Other Direct Costs Rent - facility is used exclusive by one program Rent - cost is identified and charged to each program based on space occupied Region V Office of Head Start 47

direct depends on the function of the job NOT on the job title of the person Equipment HS Director s Computer Centralized Copier

48 Examples of Direct/Administrative Costs Salaries, wages, fringe benefits Director of Operations, Purchasing Clerk Classifying an employee s wages as indirect vs. direct depends on the function of the job NOT on the job title of the person Equipment HS Director s Computer Centralized Copier charged directly to programs based on usage by admin staff Other Direct Costs Rent - Administrative staff space Rent - cost is identified and charged to each program based on space occupied Region V Office of Head Start 48

Examples of Indirect/Administrative Costs

Director, Chief Financial Officer, Human

Organizational Wide Planning Efforts Board

49 Examples of Indirect/Administrative Costs Salaries, wages, fringe benefits Executive Director, Chief Financial Officer, Human Resources and accounting staff Organizational Wide Planning Efforts Board Professional Development Disaster Preparedness Other Indirect Costs Audit Annual Report Liability Insurance Region V Office of Head Start 49

50 Office of Head Start Region V Conference Indirect Cost Rate

51 Indirect Cost Rate Agreement Indirect cost rate agreement or records showing adoption of 10% de minimis rate Direct vs. indirect costs Region V Office of Head Start 51

Direct vs. Indirect Costs Direct Costs Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award.

52 Direct vs. Indirect Costs Direct Costs Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award. Indirect (F&A) Costs Indirect (F&A) costs are classified within two broad categories: Facilities and Administration Typical examples of indirect (F&A) cost for many nonprofit organizations may include depreciation on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting. Uniform Guidance Uniform Guidance Region V Office of Head Start 52

minimus, indirect cost rate must be negotiated and approved by the cognizant federal

53 Indirect Cost Rate Indirect cost rate is the ratio of an organization's total indirect cost to its direct cost base, including non-federal share With exception of the 10% de minimus, indirect cost rate must be negotiated and approved by the cognizant federal agency Indirect Costs Direct Cost Methodology Cognizant Federal Agency Region V Office of Head Start 53

54 De Minimis Indirect Cost Rate Available to grantees that have never received a negotiated indirect rate 10% of modified total direct actual salaries, wages, fringe benefits, material and supplies, services, travel; subawards up to the first $25,000 of each subaward Costs must be consistently treated as either direct or indirect Region V Office of Head Start 54

55 Office of Head Start Region V Conference Cost Allocation

56 Cost Allocation Expectations Allocating costs within a program and throughout the grant application Multiple grants Multiple programs Multiple funding sources Region V Office of Head Start 56

basis for each category will typically apply when

57 Identify a reasonable basis for allocating costs within each category and variation Cost Allocation The basis for each category will typically apply when tested across the entire category Region V Office of Head Start 57

58 Cost Allocation: Shared Staff Director over Multiple Programs Different jobs, same person Same Classroom, Same Services Center has Head Start and EHS classrooms Early Childhood Director shared between Federal & State HS/EHS programs EHS Home Visitor also works in teen parent program Teacher/Aides when children are Head Start and non HS in the classroom Human Resources Region V Office of Head Start 58

59 Cost Allocation: Shared Facilities Same Classroom Shared Classroom has 12 Federal HS and 4 State HS that are not Non Federal Different Space Center has 3 HS and 2 EHS classrooms Same Space, Different Services Office Space Federal HS Classroom with Extended Day hours treated as two separate programs Office space in central office is occupied by Federal HS, State EHS, CSBG, Weatherization, Teen Program Region V Office of Head Start 59

60 Cost Allocation: Other Shared Services Classroom Supplies Classroom Supplies with multiple programs, HS, EHS, State EHS, and Private pay Technology Support Information Technology Services shared between HS, EHS, Community Services, other state grants Telephone Telephone cost in a shared facility Training Training Pre-Service training is shared between HS and EHS Region V Office of Head Start 60

way Failing to include all shared costs in the cost allocation plan Allocating salaries and fringes to

61 Common Cost Allocation Errors Charging administrative costs that are already included in the approved indirect cost rate through direct allocation Allocating different categories of expenses in the same way Failing to include all shared costs in the cost allocation plan Allocating salaries and fringes to administration and not nonpersonnel cost associated with administrative staff Region V Office of Head Start 61

62 Office of Head Start Region V Conference Budget Revisions and Amendments

63 Budget Revisions & Amendments Source: Head Start Enterprise System, 10/17/2017 Region V Office of Head Start 63

64 Budget Revisions & Amendments Reviewed by Program Specialist / Grants Management Specialist Reviewed by Management Concurrence with Central Office Processing of Action Region V Office of Head Start 64

65 Supplement What is it? A request for additional financial support Types: COLA Increase to Program Hours Health and Safety Region V Office of Head Start 65

66 Supplement Unique Application Components: The narrative must address health and safety concerns How to submit: When & Where When? Any time a program has a need for supplemental funding for health and safety issues Where? HSES > Financials > Grant Applications > Add Supplement Region V Office of Head Start 66

object class categories of an approved budget Threshold: $250,000 and/or exceeds 25 percent of

67 What is it? Budget Revision: Movement of Funds between Object Class Categories Movement of funds between object class categories of an approved budget Threshold: $250,000 and/or exceeds 25 percent of total budget, whichever is of lesser value Capital expenditures or equipment greater than $5,000 requires prior approval Reference: 45 C.F.R Region V Office of Head Start 67

68 Budget Revision: Movement of Funds between Object Class Categories Unique Application Components: The narrative must address the availability of funds and proposed usage of funds How to submit: When & Where When? Submit at least 30 days prior to the end of the budget period Where? HSES > Financials > Grant Applications > Add Budget Revision amendment Region V Office of Head Start 68

69 Reprogramming / Carryover Request What is it? A one-time request to move previously approved funds from one period to the next for a specific objective Reference: 45 C.F.R Region V Office of Head Start 69

Should be submitted at the end of the budget period, but cannot be approved until final SF-425 is submitted Where?

70 Reprogramming / Carryover Request Unique Application Components: Planned use and budget breakdown Demonstrate funds were previously approved for one-time costs Complete and submit final SF-425 How to submit: When & Where When? Should be submitted at the end of the budget period, but cannot be approved until final SF-425 is submitted Where? Notify Grants Management Specialist to negotiate reprogramming HSES > Initiate an Amendment > Carryover Request > Reprogram Region V Office of Head Start 70

71 Common Budget Revision Errors Requesting a revision for: Amendment below required threshold Personnel and fringe benefits based on cost savings from underenrollment Lack of governing body approvals Region V Office of Head Start 71

72 Questions? Region V Office of Head Start 72

Uniform Guidance vs. OMB Circulars

Cost Allocation 101 Uniform Guidance vs. OMB Circulars Prior to the Uniform Guidance, requirements Designed for governing DOL-ETA cost direct principles, recipients and administrative their subrecipients