Are You a Federal Grant Recipient? Make Sure You’re Aware of Your New Responsibilities

As the recipient of a federal award or a pass-through award, there are many requirements you need to be aware of and follow in order to achieve compliance.  For example, if your total federal awards expenditure exceeds $750,000, you are now subject to additional audit requirements.  An audit of your federal awards—previously called an A-133 audit—will be required, as per the Uniform Guidance.  It is important to become familiar with the terms and conditions of your grant award, any related regulations, and the Uniform Guidance, as well as the OMB Compliance Supplement.

Subpart D of the Uniform Guidance, Post Federal Award Requirements, Standards for Financial and Program Management (2 CFR 200.300 – 200.345), includes several sections that you should find useful in ensuring your entity is compliant. In this article, we will focus on Financial Management, 2 CFR 200.302. The items in this section include the following:

(a) A non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, current regulations, and the terms and conditions of the Federal award, must be sufficient to permit

(1) the preparation of reports required by general and program-specific terms and conditions; and

(2) the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.

(b) The financial management system must provide for the following

(1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the CFDA title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any;

(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program;

(3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.;

(4) Effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and ensure that they are used solely for authorized purposes;

(5) Comparison of expenditures with budget amounts for each Federal award;

(6) Written procedures to implement the requirements of cash management; and

(7) Written procedures for determining the allowability of costs in accordance with Subpart E – Cost Principles of the UG and the terms and conditions of the Federal award.

Should you have any questions, please don’t hesitate to contact one of our audit specialists. We are glad to provide additional guidance.