FISCAL RESPONSIBILITY IN TITLE IIIAND OTHER SPONSORED PROGRAMS AND GRANTS ADMINISTRATION

Presented by

Sharon S. Crews, M.Ac., CPAVice President for Administrative & Student ServicesJune 23, 2011

Overview Administration & Accounting for Title

III and Federal Programs

Organizational Structure

Budget Management

Federal Drawdown (G-5)

Accounting Controls

Questions & Answers

Administrative Controls 34 CFR Part 74 Edgar provides guidance for the Administration of

Title III as well as other Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-profit Organizations.

OMB Circular A-21Cost Principles for Educational Institutions

OMB Circular A-133Audits of State, Local Governments, and Non-Profit Organizations

Administrative Controls Title III is called the President’s grant

and the President sets most parameters as to how the funds will be expended.

Title III Directors should be instrumental in helping the President adhere to the requirements of Edgar.

Administrative Controls Administrative Control includes a

plan of organization and the procedures and records that are concerned with the decision processes leading to management’s authorization of transactions.

As part of the Administrative control of the College, authorization is secured and verified before creating accounting transactions that commits the assets of the College.

Administrative Controls The President is the ultimate

decision maker at the College Level. The President initiates approved policies to ensure compliance with State Board Policy and the Laws of the State.

Each institution should operate based on an approved organizational structure designed to ensure consistent workflow and facilitate the decision making process.

Standards for Financial Management Systems

Edgar requires the maintenance of records that provides effective control over and accountability for all funds, property, and other assets.

Allocation and documentation cost principles states that the recipient institution is responsible for ensuring the costs charged to a sponsored agreement are allowable, allocable, and reasonable.

Standards for Financial Management Systems

Institution’s internal controls shall ensure that no one person has complete control over all aspects of a financial transaction.

When procuring property and services under a grant, State will follow the same policies and procedures it uses for procurements from its non-Federal funds.

ORGANIZATION/OVERSIGHT AWARD NOTIFICATION

Approved award-signed by the President.

Signed off by Office of Sponsored Programs/Title III Director.

Copy of approved award notification, approved budget and detail budgets should be forwarded to the Business Office.

ORGANIZATION/OVERSIGHT APPROVAL PROCESSES

− Activity Director/Budget Manager− Activity Director’s Supervisor− Dean of the Department− Vice President for the Area− President’s Office− Title III Director

The same process is required by all budget managers (restricted and unrestricted funds).

BUDGET MANAGEMENT Approved Budget forwarded to Business

Office.

Accountant enters the budget into the Accounting System

Title III activity budgets are established and separated using accounting codes.

The total of all activity budgets must balance to the total approved funding allocation for the year.

If the budget does not balance it is returned to the Title III Office.

BUDGET MANAGEMENT When the budget has been entered in

the Accounting System, the operating budget line items are set for online budget inquiry and requisition processing.

The salary and benefits line items are not available for online inquiry by the activity directors.

The President authorizes the hiring or termination of personnel and payment of salaries.

BUDGET MANAGEMENT Once the budgets have been

established on the accounting system, the Title III Directors are notified of the budget account codes to be usee for each activity.

The Payroll Accountant is provided a detail of employees paid from these budgets and the effective dates of the payroll.

The cashier receives a receipt code for Title III funds drawdown.

BUDGET MANAGEMENT Each Title III funding year is set up

as a separate set of self-balance accounts.

Title III funds are never combined in the accounting records.

Carryover funds are balanced each year during financial statement preparation.

ACCOUNTING CONTROLS When requisitions are received in

the Business Affairs Office, they are logged in a requisition ledger.

Requisitions are then forwarded to the Grants and Contract accountant for review for budgetary controls.

The accountant will review the requisition for the correct chart of account coding of budget line items.

ACCOUNTING CONTROLS If the requisition has no discrepancy,

it is forwarded to the person responsible for keying requisitions to create purchase orders.

If there is a discrepancy, the Title III Office will be notified that a budget revision is needed and/or the requisition will be returned to the budget manager for revisions.

ACCOUNTING CONTROLS Purchases are made using established state

guidelines. (See state purchasing policy and bid law requireents).

Federal Guidance on contracts over $2,000.

ATTACHMENT A

Funds for this project have been provided through the Department of Education, Title III program. The following Federal Regulations must be adhered to: − Davis Bacon Act− Wage Hour Act− Copeland Anti-Kick Back Act− EPA Standards

ACCOUNTING CONTROLS The successful vendor must furnish the college a

Vendor Disclosure Form prior to the awarding of the contract.

Lawson State pays by invoice. All purchases must be made with LSCC purchase order. Terms will become a part of the bid. Bid price must be guaranteed for a period of at least ninety (90) days. 

Lawson State Community College is a non-profit state supported institution and as such is tax exempt. Our tax number is 37-17684. Vendors will comply with ACT No. 2006-557 Subsection 41-4-116 which requires that each vendor, contractor, or their affiliate must certify that it is registered to collect and remit Alabama State and local sales, use and/or lease taxes on all taxable sales and leases in Alabama. By submitting this, the bidder is hereby certifying that they are in full compliance with ACT No. 2006-557.

ACCOUNTING CONTROLS When the purchasing cycle has been

completed:

Materials and supplies have been received.

Approved travel request processed. Accounts payable checks have been issued to the vendor.

ACCOUNTING CONTROLS MONTHLY DRAWDOWNS Once expenditures are made on Title III

funds, the college is eligible for reimbursement.

Calculate drawdown Total Revenues/Draw downs $650,000.00 Total Expenditures

$785,000.00 ___________ Difference/Drawdown $135,000.00

Require disbursement of funds within 3 days after drawing it down.

ACCOUNTING CONTROLS MONTHLY DRAWDOWNS Once expenditures are made on Title III

funds, the college is eligible for reimbursement.

Lawson State requests Title III funds on a monthly reimbursement basis through the G-5 system.

G-5 provides the 5 year authorization under 1 award number. All years expenditures are requested from 1 authorization.

ACCOUNTING CONTROLS Payroll salaries and benefits are verified

monthly to ensure proper posting to authorized budget codes.

Expenditures for equipment costing $1,000 to $4,999 are inventoried and assigned an asset number as inactive inventory.

Expenditures for equipment costing $5,000 or more are inventoried and assigned an asset number as active inventory.

All grants and contracts are reconciled and balanced monthly. (Cash, Revenues and Expenditures are balanced monthly with bank reconciliations).

ACCOUNTING CONTROLS

VP, Director of Accounting and Cashier receive copies of each G-5 draw down.

Federal cash drawn down is direct deposited to the institution’s general funds bank account.

Grants accountant does not have access to the bank accounts.

FISCAL RESPONSIBILITY IN TITLE IIIAND OTHER SPONSORED PROGRAMS AND GRANTS ADMINISTRATION

QUESTIONS & ANSWERS