Module 3
TRIO Training:Budget Management - Administration
TableofContents
Purposeof Budget Management– Administration...... 1
Federal Authorities...... 1
Equipment Management...... 3
Prior Approval Requirements...... 3
Scope and Objectives...... 4
KeyPersonnel...... 4
Director Time...... 5
Other Statutes...... 5
Management Practices...... 6
Assignment...... 6
Assignment Checklist...... 6
Discussion – Carryover and PriorApproval...... 7
Addenda...... i Areas NormallyCoveredin an On-siteReview...... i Grants PolicyBulletin #8...... iii
TableofFigures
Figure1: TRIO GoverningDocuments Hierarchy...... 2
Figure2: A-110 References...... 2
Figure3: Exampleof Changein Scope...... 4
Figure4: PriorApproval...... 5
Figure5: SampleDisclosure...... 5
PurposeofBudgetManagement–Administration
This module addresses how the administrative aspectsofaproject’s budget, such as personnel, equipment, and prior approval forbudgetarychanges,aremanaged. Theseareimportant because theyare areas covered*byfederal reviewers in an on-site review.
Budget management administrationuses the federal authorities, includingtheTRIO regulations, EDGAR, OMBCirculars, the approved proposal,and the GrantAwardNotification (GAN)to address how projects managethe administrativeaspects of aproject. Administrative aspects relatingto measuringtheproject’s effectiveness inmeetingobjectives andfordocumentation of participant eligibilityarecovered in theProgramAccountabilityand Participant Eligibility modules, respectively.
TheBudget Management– Administration module focuses ongood management practices as wellas federal requirements. This module providesyouwith:
Examples of practical applications of thegoverningrules toBudget Management–
Administration;
An understandingof howto improvebudget management through internalcontrols and financial management;
An understandingof thechecks and balances designed toensurethatgrantfunds areused onlyforeligibleexpenses and that no singularperson controls the authorization and disbursement ofgrant funds; and
An understandingofconflict ofinterest provisions andthegrantee’s obligations as a
fiduciary.
Asyou read through thecontent associatedwith this module consider thefollowingsituation:
Dueto a position vacancy, a project hassignificantcarryover funds from year two of a five year grant. Theproject would liketo usethemonies to fund an additional component ofa current program. However, the new component was not in theapproved proposal.
As with the issues stated in the previous module,youshould be able to relyon the guidance offered bythegoverning documents toprotect bothyour project andyour entity. The following discussion willenableyou to do that.
FederalAuthorities
A grantee, upon acceptanceof an SSSgrant, agrees to two things: to complywith applicable laws and regulations and with the approved application [34 CFR 75.700],and to keep records to evidenceits compliancewith program requirements [34 CFR 75.731]. Yet recall the 2003InspectorGeneral (IG)auditpresentationdiscussed in theTrainingPriorityOverview noted several areas wheremanyprojects wereoutof compliancewith the requirements of the governingdocuments.
*Addendum1: AreasNormallyCoveredinanOn-siteReview
Thethreesections of regulatorydocuments that address the requirements an institutionmust meet oncethegrant has been awardedare:
SSSregulations, Part 646, Subpart D– What Conditions Must BeMet byaGrantee?,Sections 646.30– 646.32;
EDGAR, Part 74, Subpart C– Post-Award Requirements,Sections 74.20– 74.62;
and
EDGAR, Part 75, Subpart F – What Arethe AdministrativeResponsibilities of a
Grantee?,Sections 75.700– 75.740.
TheProgram AuthoritiesReviewmodule covered how theregulations citethe parts of EDGAR that applyto aTRIO program. Note the manyreferences to OMBCircularA-110 throughout thoserelevantparts ofEDGAR. For example,go to EDGARPart 74.1 and look at the parenthesis atthe endwherethe ED cites the authority. The first citation is 20
U.S.C. (law); thesecondcited authorityis
OMBCircular A-110.
Figure1:TRIOGoverningDocumentsHierarchy
As discussed, OMBCircularA-110 covers the uniform administrative requirements for grants to institutions of highereducation. Pageoneof OMBCircular A-110,Item 3. Policy, states the circularis applicable to all Federal agencies. Itfurther states, “If any
statuespecificallyprescribes policies or specific requirements that differfrom thestandards provided herein, theprovisions of thestatueshall govern.”This is OMB acknowledgingthat thereis a hierarchyof authorities andthat the statute overrides thecircular.
Although EDGAR currentlyincorporates almostverbatim thelanguagein A-110, occasionally
OMBcircularsarerevised and
EDGAR revisions aremadeat a later date. Therefore, itis important foryou to understand the organization ofA-110 and gain familiaritywith this circular. Also, it is sometimes easierto find areferencein the circular.
A-110References
Subpart C– Post-AwardRequirements
TopicPage
.23 Cost sharingor matching...... 16
.25 Revision ofbudgetand program plans...... 19
.26 Non-Federal audits...... 21
.34 Equipment...... 24
.35 Supplies andother expendable property...... 27
TheindexforA-110 is on pages .51 Monitoringand reportingprogram performance..33
2 through the top ofpage5. An .53 Retention and access requirements for records.....35
institution’sgrants management
officeis responsible formuch of
Figure2: A-110References
the information in A-110, such as Subpart C– Post-Award Requirements [seeEDGAR, Subpart C– Post-Awards Requirements, Section 74.20– 74.62]. That is whereOMBdiscusses financial and program management standards. Sections that projects primarilyreference arein Subpart C. See Figure2 foraselected list of A-110 references. It maybehelpful to beawareof certain sections; onesuchsection that pertains to the TRIOprograms is Equipment Management and is
anexampleof wherethelanguagein A-110 Subpart C,
.34 Equipmentand EDGAR 74.34
Equipment areidentical. Equipment is a good exampleto use as an introduction to the administrative requirements of budget management.
EquipmentManagement
As previouslymentioned, equipment managementis covered in theAdministrative
RequirementsA-110
.34 andechoed in EDGAR 74.34. Because therequirements apply
toallfederal agencies and theirgrantees, itmight be convenient to assumethat institutions or agenciesaremonitoring compliancewith theserequirements. However, some smallergrantees maynot have an officeor individual with primaryresponsibilityforasset management. Evenfor largergrantees, the assetmanagement function ofthe institution or agencywillrelyon cooperation from the project. Therefore, the primaryresponsibilityfor keepingaccurate records of equipment that complywith therequirements and for respondingto requestsforinformation from the asset management officer lies with the project. Both theAdministrativeRequirements and EDGAR detail thetypes of data requiredformaintainingthe project’sequipment records.
Foralist of requirements, seeOMBCircularA-110, Subpart C, .34 Equipment.
Ifyou havenotalreadydoneso, it is a good ideato learn who atyour institution is responsible forthis function, determinethe institution’s definition of equipment, and then requestfrom the asset management officerthe institutional policiesand procedures that respond to the requirements. Then, it isadvisableto collect theinformation required andkeep itupdated as purchasesaremade and inventoryis surplusedordisposed of.An internalinstrument and policy for collectingthis information is stronglyrecommended.
PriorApprovalRequirements
TheProgram AuthoritiesReviewmodulementioned theRevision of Budgetand ProgramPlans in EDGAR 74.25. Theseregulations wereoriginallycalled theExpandedAuthoritiesbecause theyoffergranteesgreater administrative flexibilityto takecertainactionswithoutthe prior approval of theED. This increased flexibilityformanaging adiscretionary grant projectalso means thereis increasedaccountability. In 34 CFR 74.25(c), sections (1),(2), and (3) state the threeproject-related reasons grantees must request prior approval. EDGAR furtherstates in
74.25(d)that no otherprior approval requirements areimposed. Thefollowingareasare particularlyrelevant to TRIO programs:
Changingthe scopeor objectives of theproject[74.25(c)(1)]; Changingakeyperson [74.25(c)(2)]; or
Changingthe amountof timethe project director devotes to theproject if thetime
reductionis morethan 25%[74.25(c)(3)].
Anyprogram-relatedchangethat would generateaneed for additional federal fundingalso requires priorapproval [74.25(c)(4)].
Although EDGAR provides generalguidance forallthe ED programs, specific program regulations mayhavemoreliberal orrestrictiverequirements.
ScopeandObjectives:When discussingthe scopeof theproject and its objectives itis necessaryto look at theapprovedgrant application. In SSSprojects, thegrant proposal establishedthe needfortheproject and included objectives andaplan ofoperation to meet those objectives. Sincethe ED, upon awardingthe grant, maymakechangesto theobjectives, such as changingthe numberofstudents to beserved and/or changingthegraduation ortransfer rate objectives, the original proposal as modified duringnegotiations is the project’sapproved application.
ExampleofChangeinScope
Theproject was funded to identifyand recruit 120 low income,first
generation students.
At the timeof thevisit, 82 students were enrolled; theyincluded 70 disabled students and 12 low income, first generation students.
Figure3:ExampleofChangeinScope
Subsequent to the application’s approval, anychangeto theproject’s scoperequires the ED’s approval as per EDGAR 74.25(c)(1) and 75.700. Thedifficultyin complyingwith theregulatory requirements is that scope has never been defined bythe ED. To provide abasisfordiscussingif a changein a project constitutes a changeinscope, consider the exampledemonstrated in Figure
3.
Given thegrant application establishedaspecificneed fortheproject, it isreasonableto assume that anyportion of theproposal that has amaterial impact on how and to what extent that need is addressed is achangein scope. If theproposal madethe case for aprojecttargeted at low income, first generation students, changingthetarget population to students with disabilities could be construedas a changein scope.
As the exampledemonstrates, servingfewer students than approved andfocusingon students with disabilities results in a changeof scope. A federal on-site reviewer would look forthe ED’s approval forthis typeofchangein scope. Absentsuch approval, theproject is not in compliance with EDGAR 74.25(c)(1) and 75.700.
KeyPersonnel:TheED, when awardingthegrant, defines the keypersonnel in block 4 ofthe Grant Award Notification (GAN). Locateyour project’s GAN,find block4, and note who is namedas keypersonneland theperson’s title. Ifthe person in that position changes, thegrantee mustsubmita request to the ED with the person’sresume, and request approval to name that person to that position, 74.25(c)(2). TRIO projects usuallyhaveno morethan two people named as keypersonnel. If theSSSgrant is the onlyTRIOgrant at the institution, the SSS director is probablythe onlyperson named. Institutions that haveaTRIOdirector responsible for administeringtwo ormoreTRIOgrantsmayalso have associate directors or coordinators for
each project.TheDepartment maythen identifyboth theTRIO directorand the associate director orcoordinator on the GAN.
SSSregulations, 646.32(c)(1)requirea full-time project director, unless waived under
646.32(c)(3).
DirectorTime:EDGAR74.25(c)(3) states that if thegranteewants to changethe director’s level of effortwith theproject,the granteemustrequestprior approval from the ED ifthe changeis a reduction ofmorethan
25%.Sincethe TRIO regulations aremore restrictivethan EDGAR, itis recommended that anychanges from thenegotiated level of effort of keypersonnel bediscussed with the project’s program specialist.
Ifblock 4 oftheGAN does not specifya
level of effort, refer to theproject’sapproved
budget for the approved level of effort.
OtherStatutes
PriorApprovalRequirements Changes in project scopeor objectives; Changes in keypersonnel;
Project directors; or
oAbsenceformorethan threemonths
o25%reduction in time
Need for additional federal funds.
ImportantRemindersCheck grant terms,conditions and grant awardattachments for possible exceptions. Inrare circumstances, some or allrequests maybedenied.
When in doubt, callyour Program
Specialist.
Figure4:PriorApproval
The Federal Authorities include statues other thanthe Higher Education Act that applyto these grants, as evidenced bythe earlier mention ofGPRA and the CivilRights Act.
Onesuchstatutethat is often overlookedbyprojects and is a common areaof noncomplianceis PublicLaw 105-78 Section 508. This statute is referenced inyourGrant Award Notification (GAN) packetas Attachment S†: Special Conditions forDisclosing Federal Fundingin PublicAnnouncements. This citation requires anypublicdocument, such as a recruitment brochure, issuedfrom afederallyfunded program,muststate:
That it receivesfederal funding, and
Thepercentageof thetotal cost being financed with federal funds.
For example, aStudent Support Services recruitment brochuremight contain a disclosure statement such as the onein Figure5. Keep in mind that aproject’s websitewould also require this statement sincethat information is madeavailable to the public. Documents internal to the
project, such asatutorhandbook, would not require the disclosurestatement.
SampleDisclosure
This Student Support Services Project is
100% federallyfundedat$xxx,xxxannually.
Figure5:SampleDisclosure
†Addendum2:GrantsPolicyBulletin#8
An additional statuteof particular interest to TRIOadministrators is Title 31 U.S.C. Section
1352. This law is government wide and, as such, it is published in theOMBCost Principles appropriateforthegranteetype. It is referenced in CircularA-21, Part J.28 Lobbying. You are encouraged to read the fullOMB citation so thatyou areableto recognizewhat constitutes lobbying. Furthermore, everyapplicant for federal TRIOfundingmustcertifywhen completingtheapplication packet that no federal funds havebeen paid or will be paid for
lobbyingpurposesand must disclose lobbying activities that fallunder this law. Recognizethat
as a resultof this law, it isyourresponsibilityas aTRIOemployeeto protectyour institution from allegations of lobbyingsinceyour activities could quite inadvertentlyrise to that level.
ManagementPractices
Inaddition to the federalrequirements alreadydiscussed, EDGAR also stipulates in75.701 that grantees shall “directlyadminister orsupervisethe administration ofthe project.” The granteeaccomplishes this through its own local policies and procedures; therefore, the project director and staffmustcomplywith both Federal and local requirements. Institutional policies and procedures willoftenaddress theadministrative requirements applicable to broad categories of federallyfunded projects. However, thesewilloften miss the TRIO program specific requirements. Toaddress these requirements,itis advisable that TRIO projects develop and use apolicyandprocedures manual as an integral part of project administration, and ensurestaff haveaclear understandingof thesepolicies and procedures. Agood placeto start is the
approvedgrant application. Theselection criteriasection ofthe SSSregulations[
646.21(c)(5)]requiresyourgrant application to include aplan for project administration (plan of operation), whichwillincludesuchitems as organizational placement ofthe project, a staffing plan, hiringand stafftrainingprocedures, physical location ofthe project on campus, office space, recordkeeping, etc.
Apart from therequirement to notifythe ED of developments that havesignificant impact on the approved activities ( 74.51 Monitoring and Program Performance), EDGAR allows a granteeto make changesto theplan ofoperation, usuallywithoutprior approval. Therefore, for the purposes ofmaintainingpolicies and procedure, itis important to track the evolution ofyour project overtime.
Assignment
Assignment Checklist:
Discussion
Discussion – CarryoverandPrior Approval:You arein thelast fewmonths of thesecond year ofafouryeargrant. The collegestudent financial aid officer earlierthisyear hired two of yourrecruiter/advisors. Dueto state budget constraints,your collegehiringprocedures became verycomplex. As a result,you wereunable to fill thosepositions as rapidlyas planned, soyou hired temporarystaff. Althoughyou now haveyourgrant positions filled as approved inyour budget,you have$21,000 in unexpended funds from thestaff salaries andbenefits line items.
You want to add ajob shadow component toyourcareer program in the third budget period. You will use that $21,000 to hireapart-time staffer to coordinatethe job sites. Although the career program was approved in thegrant, therewas no mention ofashadow component.
What approval,if any, doyou need to implement this new activity? What authorities wouldyou citeto researchand justifyyourdecision?
Hint: while reviewingEDGAR, bemindful of75.253.
Addenda
The following Addendaarereferenced in theprevious material.
Addendum1
AreasNormallyCoveredinanOn-siteReview
Administration
Institutionalsupport/commitment
oHowdoesthe granteemonitorthe grant?
oChain ofcommand
oInstitutionalrelationships
oSpace
Administrative/studentoriented
Filesecurity/recordsretention
Staffing
oOrganizationalstructure
oAllkeystaffon board atdesignated
salariesapproved percentagesoftime?
oStaffdevoting grant-paid time to non- grantduties?
oAffirmative actionproceduresfollowed?
oTrainingstaffdevelopment
Role ofprojectdirector/coordinator
oDuties include servicedelivery?
oBalance betweenmanagerialservice
delivery?
Equipment
oInventoryusage (34 74.27 [cost principles]34 CFR74.34)
oAdministrative computers adequate? Performancereport(s)
oTimely
oAccurate
oReports onallobjectives?
oAddress priorexperience?
ProgramActivities Overallgoals Objectives
oImpact/outcome
oAddress the needsof the targetarea/target
population
oMeasurable(performancemeasuresfor each objective?)
oAmbitious &attainable
oAddress priorexperience criteria
oSupport the intentofthe legislation
Currentstatus/achievements to date
oAnnualsummariesfromperformance reportorinternalprogress reports
oInterimdata frominternaltracking systems
Issues/problems
Studentcharacteristics (filereview)
oCan participantrosters be produce on
Demographics
Gender
Ethnicity
Yearsin project
Eligibilitycriteria Citizenship Income
Firstgeneration
Grade/age
Need
Enrollmentstatus
Two-thirdrequirement
oReview participantfolders to determine if informationexiststhatdocuments
Eligibilitycriteria
Recruitment/intake
Project’sassessmentof intervention
neededbyparticipant
Servicesreceived byparticipant
(instruction,tutoring, counseling, etc.)
Progress
FiscalOperations
Generalgranteefiscalsystems
oAccountability
oPurchasingauthority
oAudittrail
oBudget reports
Frequency
Timeliness
Sentto director? Expenditures
oDeviations, aretheyallowable?
oProjectledger
oMaintainssufficientrecords toreconcile
withgranteefiscalreports?
oReconciles &resolvesregularly? Certification of time &attendance
oSystemadequate &beingimplemented?
oStaffunderstand?
Match
oNot required bystatute
oIf in approved budget, EDGARapplies
Unexpended funds
oLookfortrends
oUnderwhatconditions may theybe used?
Miscellaneouscosts
oFood
oTravel
oEquipment
oConsultants
oAssociation dues
Evaluation
Processevaluation
oInternalreporting/managementprocedures
oPolicyproceduresmanual, developed &
used?
oRecords ofstaffmeetings?
oTrackingofprocessobjectives/activities?
Outcome evaluation
oTrackingpersistence?
oSecondarypostsecondaryeducation
enrollment, attendancegraduation?
Participantevaluation
Externalevaluationreports,ifany
Written annualreports
Other
Potentialexemplarypractices
Relationship with otheragencies/useof local resources
Addendum2
GrantsPolicyBulletin#8
Attachment S– SpecialConditions forDisclosing FederalFundingin PublicAnnouncements
Purpose:To issueAttachment S, which informs grantees of the requirements fordisclosing federal fundingin public announcements. Attachment Sincorporates thecitations of themost recentappropriations legislation.
Background:Themostrecentappropriations legislation forthe Department of Education (ED), theLabor, Health and Human Services, andEducation, and Related Agencies Appropriation Act,
1998(P.L. 105-78), contains languagein §508 that continues to impose certain requirements on grantees. Specifically, thelegislation requires thatallgrantees disclose theamountand percentageoffederal fundingandfunding from non-governmental sourceswhen makingpublic announcements aboutfederally-funded projects.
Attachment Sis the establishedvehicle forinforming grantees ofthe existenceof these requirements and imposingthem asa condition ofreceivingdiscretionarygrants or cooperative agreements. So that EDgrantees willcontinuetobe awareof the responsibilities imposedbythe mostrecent legislation in connection with public announcements related toawards, the attachment is update to the current version (3/98),which is attached to thisbulletin. It cites the legislation and section numbers of theFY 1998 appropriations law.
Policy:Therevised Grants PolicyBulletin #8 replaces Grants PolicyBulletin#8 dates
December 30,1996.
Attachment Sis to beincluded as a standard procedureon allnewand non-competing continuation Grant Award Notifications.
ATTACHMENT S
SPECIAL CONDITIONSFOR DISCLOSING
FEDERALFUNDING IN PUBLIC ANNOUNCEMENTS
When issuingstatements, press releases, requests forproposals, bid solicitations, and other documents or announcements describingprojectsor programs funded inwhole orin part with Federal money, allgrantees receiving Federalfunds includedin this Act, includingbut not limited to State and local governments and recipients for Federalresearchgrants, shallclearly state:
1) the percentageof thetotal costs of the program orproject which will be financed with federal money;
2) the dollar amountof Federal funds for theprojectorprogram;and
3) percentage and dollar amount of thetotal costs of the project or program that will be financed bynon-governmental sources.
Recipients must complywith these conditions under PublicLaw 108-447,the “Consolidated Appropriations Act, 2005,” DIVISION OFDEPARTMENTS OF LABOR, HEALTHAND HUMANSERVICES, AND EDUCATION, ANDRELATED AGENCIESAPPROPRIATIONS ACT, 2005, Title VGeneral Provisions, Sec. 506, December 8, 2004. 04/13/05