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HomeMy WebLinkAboutB10.0 Grant Compliance �'l3llRl�ll `Y 111CJ- 1' E A S CITY OF GRAPEVINE ADMINISTRATIVE POLICY SUBJECT- GRANT COMPLIANCE SECTION. B NUMBER- 10.0 PREPARED BY- CMO/FINANCE EFFECTIVE DATE: 11/2/2017 PAGE: 1 of 6 Activities Allowed or Unallowed and Allowability of Costs All expenditures of the City go through standard review and approval procedures for all City expenditures including review and approval by the appropriate department personnel, review and approval by Fiscal Services personnel, and reviewed by City Manager or designate and Council when required. In addition, all grant expenditures will be reviewed and reconciled periodically by Fiscal Services and Internal Audit personnel. Any grant expenditures will be reviewed for allowability with 2 CFR 200, UGMS and specific grant requirements and this will be reviewed and authorized prior to submission to the granting agencies. Cash Management If advance funds are received from a federal or state funding source, the City's Fiscal Services department will deposit the funds in an interest bearing deposit account. Interest earned on these accounts will be submitted at least quarterly to the granting agency by the Fiscal Services Department. Advance grant funds will be recorded in a separate account that will be tracked and monitored by Fiscal Services as a part of the monthly reconciliation process. For projects funded on a reimbursement basis, the Fiscal Services department will verify that expenditures submitted for reimbursement have been paid prior to the request being approved for submission to the granting agency. Eligibility As a part of the grant award and contract review process, the grant contract manager and Internal Audit Director will review the grant program and determine any eligibility requirements that may exist for the grant. If there are eligibility requirements for the grant, processes will be implemented by the grant contract manager to accurately and adequately determine and document the procedures performed to determine eligibility. Additionally, the Internal Audit Director will periodically monitor the procedures involved in this process to determine that the program remains in compliance with the eligibility requirements of the grant agreement. Equipment and Real Property Management Equipment, obtained by the City through federal or state grants, shall be used in the program for which it was acquired or, when appropriate, other federal or state programs. Capital asset records will be maintained by Fiscal Services, a physical inventory of �'l3llRl�ll `Y 111CJ- 1' E A S CITY OF GRAPEVINE ADMINISTRATIVE POLICY SUBJECT- GRANT COMPLIANCE SECTION. B NUMBER- 10.0 PREPARED BY- CMO/FINANCE EFFECTIVE DATE: 11/2/2017 PAGE: 2 of 6 equipment shall be taken at least once every 2 years by Fiscal Services and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. When equipment with a current per unit fair market value of $5,000 or more is no longer needed for a federal or state program, it may be retained or sold with the Federal agency having a right to a proportionate (percent of Federal participation in the cost of the original project)amount of the current fair market value. Proper sales procedures shall be used that provide for competition to the extent practicable and result in the highest possible return. Period of Performance Federal and state awards may specify a time period during which the City may use the federal or state funds. Where a funding period is specified, the City may charge to the award only costs resulting from obligations incurred during the funding period and any pre- award costs authorized by the federal or state awarding agency. Also, if authorized by the federal or state program, unobligated balances may be carried over and charged for obligations of a subsequent funding period. Obligations means the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the City during the same or a future period. Period of performance will be monitored first by the grant contract manager for the City. The have responsibility for ensuring all expenditures of a grant award occur during the period specified or allowed by the granting agency. These procedures will be monitored and reviewed by Fiscal Services and Internal Audit as well with the performance of periodic reconciliations. Procurement and Suspension and Debarment When procurement is required for a federal or state grant, procurement procedures are applied as required by the OMB Compliance Supplement and 2 CFR 200 and/or statues of the State of Texas. The most restrictive requirements will be followed under each individual procurement. Grant contract managers with the City are required to notify the Purchasing Department of any procurements related to federal and state grants. For these procurements, the Purchasing Department will verify any vendors used are no debarred or otherwise excluded on the SAM.gov (https://www.sam.gov/portal/public/SAM/) website. Purchasing will printout a copy of this verification and include it in the procurement documentation for the contract. Program Income Program income is gross income received that is directly generated by the federally funded project during the grant period. If authorized by Federal regulations or the grant �'l3llRl�ll `Y 111CJ- 1' E A S CITY OF GRAPEVINE ADMINISTRATIVE POLICY SUBJECT- GRANT COMPLIANCE SECTION. B NUMBER- 10.0 PREPARED BY- CMO/FINANCE EFFECTIVE DATE: 11/2/2017 PAGE: 3 of 6 agreement, costs incident to the generation of program income may be deducted from gross income to determine program income. Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired with grant funds, the sale of commodities or items fabricated under a grant agreement, and payments of principal and interest on loans made with grant funds. Except as otherwise provided in the Federal awarding agency regulations or terms and conditions of the award, program income does not include interest on grant funds (covered under "Cash Management"), rebates, credits, discounts, refunds, etc. (covered under"Allowable Costs/Cost Principles"), or interest earned on any of them (covered under "Cash Management"). Program income does not include the proceeds from the sale of equipment or real property (covered under "Equipment and Real Property Management"). Program income may be used in one of three methods: deducted from outlays, added to the project budget, or used to meet matching requirements. Unless specified in the Federal awarding agency regulations or the terms and conditions of the award, program income shall be deducted from program outlays. Unless Federal awarding agency regulations or the terms and conditions of the award specify otherwise, non-Federal entities have no obligation to the Federal Government regarding program income earned after the end of the grant period. The grant contract manager and the Internal Audit Director will monitor grants awarded to the City to determine if any program income will be involved in the projects. If there will be program income, City staff will contact the granting agency and verify how program income should be handled in each particular instance. Reconciliations will be performed by Fiscal Services, Internal Audit, and the grant contract manager to ensure that program income is accounted for properly. Reporting Reporting requirements for grants will be monitored by the City on a grant-by-grant basis. Each grant will likely have specific reporting (performance, financial, or other special reporting) that will be required by the state, federal government or other pass-through entity. Reporting requirements will be managed by the City grant contract manager. Required report submissions will be reviewed and approved by Fiscal Services and Internal Audit periodically for compliance and reconciled at least annually as a part of the year-end closing procedures. �'l3llRl�ll `Y 111CJ- 1' E A S CITY OF GRAPEVINE ADMINISTRATIVE POLICY SUBJECT- GRANT COMPLIANCE SECTION. B NUMBER- 10.0 PREPARED BY- CMO/FINANCE EFFECTIVE DATE: 11/2/2017 PAGE: 4 of 6 Subrecipient Monitoring For any subrecipients of grant awards for the City, we are responsible for the following: • Determining Subrecipient Eligibility — In addition to any programmatic eligibility criteria determining whether an applicant for a subaward has provided a Dun and Bradstreet Data Universal Numbering System (DUNS) number as part of its subaward application or, if not, before award (2 CFR section 25.110 and Appendix A to 2 CFR part 25). • System for Award Management (previously Central Contractor Registration)— For ARRA subawards, ensuring that the subrecipient maintains a current registration in the System for Award Management (SAM) (http://sam.gov) at all times during which it has an active subaward(s) funded with ARRA funds (2 CFR section 176.50(c). • Award Identification — At the time of the subaward, identifying to the subrecipient the Federal award information (i.e., CFDA title and number; award name and number; if the award is research and development; and name of Federal awarding agency) and applicable compliance requirements. ForARRA subawards, identifying to the subrecipient the amount of ARRA funds provided by the subaward. • During-the-Award Monitoring — Monitoring the subrecipient's use of Federal awards through reporting, site visits, regular contact, or other means to provide reasonable assurance that the subrecipient administers Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. • Subrecipient Audits— (1) Ensuring that subrecipients expending $750,000 or more in Federal awards during the subrecipient's fiscal year for fiscal years beginning on or after December 26, 2014 have met the audit requirements of 2 CFR part 200, subpart F and that the required audits are completed within 9 months of the end of the subrecipient's audit period; (2) issuing a management decision on audit findings within 6 months after receipt of the subrecipient's audit report; and (3)ensuring that the subrecipient takes timely and appropriate corrective action on all audit findings. In cases of continued inability or unwillingness of a subrecipient to have the required audits, the pass-through entity shall take appropriate action using sanctions. • Ensuring Accountability of For-Profit Subrecipients —Awards also may be passed �'l3llRl�ll `Y 111CJ- 1' E A S CITY OF GRAPEVINE ADMINISTRATIVE POLICY SUBJECT- GRANT COMPLIANCE SECTION. B NUMBER- 10.0 PREPARED BY- CMO/FINANCE EFFECTIVE DATE: 11/2/2017 PAGE: 5 of 6 through to for-profit entities. For-profit subrecipients are accountable to the pass- through entity for the use of Federal funds provided. Because for-profit subrecipients are not subject to the audit requirements of 2 CFR part 200, subpart F, pass-through entities are responsible for establishing requirements, as needed, to ensure for-profit subrecipient accountability for the use of funds. • Pass-Through Entity Impact— Evaluating the impact of subrecipient activities on the pass-through entity's ability to comply with applicable Federal regulations. Although it is not common for the City to have subrecipients for any grant awards, procedures noted above will be performed by the grant contract manager in conjunction with Fiscal Services and Internal Audit if the City enters into agreements or contract with subrecipients. For during-the-award monitoring, the grant contract manager must consider the following factors when determining the nature, timing, and extent of during-the-award monitoring: • Program complexity — Programs with complex compliance requirements have a higher risk of non-compliance. • Percentage passed through —The larger the percentage of program awards passed through the greater the need for subrecipient monitoring. • Amount of awards — Larger dollar awards are of greater risk. • Subrecipient risk — Subrecipients may be evaluated as higher risk or lower risk to determine the need for closer monitoring. Generally, new subrecipients would require closer monitoring. For existing subrecipients, based on results of during-the- award monitoring and subrecipient audits, a subrecipient may warrant closer monitoring (e.g., if the subrecipient has (1) a history of non-compliance as either a recipient or subrecipient, (2) new personnel, or (3) new or substantially changed systems). Evaluation of subrecipient risk also may take into consideration the extent of Federal monitoring of subrecipient entities that also are recipients of prime Federal awards. The grant contract manager for the City must notify Fiscal Services and Internal Audit in the event that the City decides to participate in as federal or state award with a sub- recipient. Upon notification, these individuals must determine a plan to address the required responsibilities noted above. All documentation related to subrecipient monitoring �'l3llRl�ll `Y 111CJ- 1' E A S CITY OF GRAPEVINE ADMINISTRATIVE POLICY SUBJECT- GRANT COMPLIANCE SECTION. B NUMBER- 10.0 PREPARED BY- CMO/FINANCE EFFECTIVE DATE: 11/2/2017 PAGE: 6 of 6 must be maintained by the grant contract manager and submitted to Fiscal Services and Internal Audit for periodic compliance review. Special Tests and Provisions The specific requirements for Special Tests and Provisions are unique to each Federal program and are found in the laws, regulations, and the provisions of contract or grant agreements pertaining to the program. Upon initial review of the grant award by the grant contract manager, Fiscal Services, and Internal Audit, a determination will be made of any special tests and provisions that may apply to a grant award. The grant contract manager will be responsible for performing all required special tests and provisions and these items will be subject to monitoring and periodic review from Internal Audit and Fiscal Services. Grant Monitoring Procedures Ongoing auditing and monitoring is an essential part of any compliance program.Auditing and monitoring activities shall be conducted on an ongoing basis underthe direction of the Internal Audit Director. These activities will be designed to address compliance with governing laws, claim development and submission, reimbursement, cost reporting, and marketing. In addition, the auditing activities will focus on compliance with specific rules and policies that have been identified by management, Internal Audit, granting agencies, or the federal or state government as high risk areas. Any overpayments discovered as a result of our auditing activities shall be promptly refunded to the applicable payer with appropriate documentation and an explanation of the reason for the refund. As part of the monitoring process, the Internal Audit Director will utilize techniques such as: • On-site visits. • Review of billing edit reports generated by the City and discussions as to how such edits are resolved prior to billing an account. • Interviews with personnel involved in management, operations, coding, billing, and other relevant activities. • Questionnaires developed to solicit information from a broad cross-section of the City staff. • Reviews of financial records and record documentation for a sample of accounts. • Trend analyses that seek to identify deviations, positive or negative, in specific risk areas over a given period of time.