Budget: Managing and Working with Your Budget Office

1. Budget: Managing and Working with Your Budget Office Carla Kirksey & Amas Aduviri

3. Objectives • Review the Process of the Revised Budget • Review the Revised Budget Checklist • Provide opportunity to ask questions

4. Basis of Your Budget • Your approved Application Project Narrative • Your approved Application ED 524 (Sections A,B&C) • Section A: Description of use of Federal funds • Section B: Description of the use of Non-Federal funds • Section C: Narrative of the use of Federal AND Non-Federal funds • Attachment J • Subsequent Changes and Revised Budgets

5. OME Monitoring of Fiscal Matters • Review of Application Budget • Review of Revised Budget • Review of APR Expenditure Report • Monthly or Quarterly Review of Drawdowns • Review of Grant Balance at Continuation • Review of Use of Funds for Specific Requests • On-site and Desk Monitoring • Carryover Review

6. Revised Budget Checklist Overview • Calculations • Category Checks • Cost Sharing • Indirect Cost

7. How Is Cost Sharing / Matching Handled? • Review of Application Budget • Not Required by program laws or regulations • If proposed in application, must be provided • Must be outlined in ED 524, Sections B (Table) and Section C (Narrative) • Treated as Federal fundsare treated

8. The Budget Process

9. What Are the Basic Considerations of Cost?

10. How Do I Determine a Reasonable Cost? • 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 cost.

11. How Do I Determine an Allocable Cost? • A cost is allocable to a particular cost objective if the goods/services involved are chargeable/assignable to such cost objective in accordance with relative benefits received/other equitable relationship. • A cost that can be traced to specific activities of a grant project.

12. How Do I Determine an Allowable Cost? • Is necessary & reasonable for the performance of the award • Conforms with Federal cost principles • Is consistent with uniform procedures of the organization • Is determined in accordance with generally-accepted accounting principles • Is not included in any other Federally-financed grant (unless authorized by statute)

13. What is Equipment? • Tangible nonexpendable personal property • having a useful life of more than one year and • an acquisition cost of $5,000 or more per unit. What are Supplies? • Fungible property (paper, pens, pencils, calendars, CDs, DVDs, chairs, desks, etc.) • Less than $5,000 per unit • NOT equipment, intangible property (e.g., software designs), debt instruments, and contractor inventions (e.g., student classroom alertness monitor/SCAM)

14. Indirect Costs • Difference between agreed upon indirect cost and a restricted indirect cost rate cannot be used for cost sharing • Direct Cost Base must not include • Each sub-award in excess of $25,000 (contracts) • Stipends • Tuition and related fees • Equipment, as defined in 34 CFR 74.2 • 8% applies to sub-awards that fund training • If negotiated indirect cost rate is lower, the grantee must use the lower of the two

15. What Kind of Financial Management Systems Do I Need? • Relate financial data to performance data • Accurate, current, & complete disclosure • Records that identify source & application of funds • Effective control over & accountability for all funds, property, & other assets • Written procedures • to minimize the time between transfer of funds to the recipient • for determining costs reasonableness, allocability, & allowability • Accounting records supported by source documentation • May require adequate bonding & insurance

16. Things to Remember • Email the 524 form in a Word document or Excel version to your program officer with only the current year’s column. • Revised budgets were due August 30, 2014. • Have proper documentation on file at your project concerning contractors. • Refer to the Revised Budget Checklist for the additional information on documentation for contractors. • Send a full narrative only if there are changes to the budget. • Highlight specific changes from the original application’s budget.

17. Revisions • Financial expression of the project • Required to report deviations from budget and project plans • Request prior approvals for budget & plan revisions, in accordance with EDGAR 74.25 • Grantee prepares & submits a budget revision to acknowledge & accept the award & all conditions

18. Budget Revision—Expanded Authority • A one-time extension of the expiration date of the award of up to 12 months • To complete project activities, NOT spend down funds • Carry forward unobligated balances to subsequent funding periods

19. Carryover Balance • Unexpended funds from a previous budget period that are authorized for allowable costs in a current budget period • Can be used in the next budget period for allowable activities without any action by ED or the grantee unless restricted by program staff as an award condition • Program staff may require a description of how the unexpended funds will be used • In past years, some grants were offset for carryover so funds could be redistributed.

20. Budget Revisions—Prior Approvals • Change in scope or objectives • Need for additional funding • Change in key personnel specified in the application • Absence for more than 3 months of PD or PI • A 25% reduction in time of PD or PI • Transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa • Costs that require prior approval in accordance with 2 CFR • Transfer of funds allotted for training allowances (stipends) to other categories of expense • If NOT described in the application & funded in the approved award, the transfer or contracting out of any work under an award Generally not approved by Department

21. References • Program Statute: Title IV, Section 418A of the Higher Education Act of 1965 as amended by section 408 of the Higher Education Opportunity Act P.L. 110-315 (H.R. 4137) • Program Regulations: 34 CFR Part 206 • Education Department General Administrative Regulations (EDGAR) • Cost Principles • 2 CFR Part 200 • Grant Attachments • FAQs Conferences and Meetings

22. OME Contact Michael Holloman 202-260-2067 Michael.Holloman@ed.gov Carla Kirksey 202-260-2114 Carla.Kirksey@ed.gov Edward Monaghan 202-260-2823 Edward.Monaghan@ed.gov Tara Ramsey 202-260-2063 Tara.Ramsey@ed.gov Karan Sage 202-260-7496 Karan.Sage@ed.gov Always seek the assistance of your program officer first!