Faqs for the FY12 Contract/Budget Process

FAQs for the FY12 Contract/Budget Process

General Budget ProcessInfo

I.IQ: Will providers be allowed to use the 12 months budget summary as the budget for the entire FY'12 year?

A: Yes, providers should use the 12 month budget summary for the entire fiscal year funded at 100% (calculated by multiplying their four-month amount times three [3] ). Providers are limited to the amount of the first four months under the current agreement. DHS is estimating that by mid September, the eight-month amendment will be distributed.

I.IIQ: Which contracts are exempt from completing a FY12 budget?

A:ALL fee-for-service programs – including contracts that are part of the Medicaid Waiver, fixed-rate contracts and performance based contracts – are exempt from the budgeting requirement for FY12.

I.IIIQ: What if my organization has both grant and fee-for-service programs; do I have to complete a budget for just the grants?

A: For organizations that have both grant and fee-for-service programs, the grant programs must be budgeted using either the one-page summary form or the detailed longer budget form. However, to make the budget form reflective of an organization’s entire budget, the fee-for-service revenue and expenses must be captured; to capture this information, simply group all fee-for-service related revenue and expenses into the “Other” column on the budget form.

I.IVQ: What ifDHS requests additional information regarding a provider budget?

A: Either the one-page summary or the longer detailed budget is due by August 31, 2011. DHS reserves the right to request additional information regarding a budget after the submission deadline.

I.VQ: For the contracts involving school programs, will funding continue beyond the four-month period; if not, will providers be given transition time?

A: Everyone whose funding ends at four months has been notified.

I.VIQ: Are these temporary contracts for the first quarter of the Fiscal Year? If so, what will happen after the first quarter?

A: These are not temporary contracts; these are official contracts that can be amended after the initial four-month period. This initial four-month period represents the first third of the year, not the first quarter.

I.VIIQ: For the contracts involving school programs, will funding continue beyond the four-month period; if not, will providers be given transition time?

A: Everyone whose funding ends at four months has been notified.

I.VIIIQ: Are these temporary contracts for the first quarter of the Fiscal Year? If so, what will happen after the first quarter?

I.IXQ: Why are four-month and eight-month budgets required; can providers submit 12- month budgets?

A: Providers should budget at 100% for the entire 12-month period; language will be added to the contract that authorizes providers not to exceed the 33% or 31% thresholds during the initial four-month period.

I.XQ: Will close-out reports or final reconciliations be required at the end of the initial four-month period?

A: NO

I.XIQ: A DHS Project Officer was asked for assistance with the contract/budget process, but didn’t know the answer; who should be contacted for help?

A: All questions related to the FY12 contract process should be directed to Steven Shaw, Office of Contract Administration, via email, , or at (312)793-0027.

I.XIIQ: If a provider under-bills their four-month contract, will excess dollars be transferred to the remaining eight-month contract? Or what about over-billing; can funds from the eight-monthcontract be applied toward billing in the four-month contract?

A: There is only one contract that can be amended after the initial four-month period; the amendment would change the end date of the existing agreement and billings will be expensed against the amount obligated. If the amount in the original four-month agreement is over-billed, the “overage” will be rejected until the amendment is executed and the increased amount is approved at the Office of the Comptroller. Since there is only one contract, there is no issue of “carryover” between the four-month and remaining eight-month period.

I.XIIIQ: What is the timeframe for DHS to act upon "approval" in a change in key personnel? Why is DHS involved if the initial grant is not premised on specific personnel?

A: DHS does not have to approve changes in key personnel, but must be notified when there is a change. This notification is consistent with grant monitoring procedures, where DHS/the State of Illinois and Federal grant-makers need to be aware of who is working on the grant.

II.Budget Template Information

II.IQ: It is difficult to use the budget template because the categories/fields on the template differ from how my organization collects information.

A: The budget template was constructed according to terminology used in nonprofit functional expense schedules, the Illinois Office of the Comptroller chart of accounts and practices consistent with Generally Accepted Accounting Principles.

II.IIQ: We have found errors with the budget documents; how do I know which version to use?

A: There have been small errors identified in the Occupancy and Management & General tabs of the detailed budget form, and DHS apologizes for these errors. However, the most time-consuming part of the template is completing the personnel section, so please continue to work on this section, and an updated template – with additional rows for personnel and additional columns for more grants – will be posted to the website during the week of August 8th. Information that was completed in an earlier version can easily be transferred to an updated version.

II.IIIQ: Will there be training on the budget forms?

A: Training videos will be posted on the DHS Contracts website on the one-page summary form and the longer detailed form. This training is accompanied on the website by an instructional document on the detailed budget form and other provider resources, such as a PowerPoint Presentation that discusses direct and indirect costs.

II.IVQ: Are the documents on the DHS Contract page the most updated forms?

A: The latest version of the budget form was available as of July 28, 2011. For the budget submission, either the one-page summary sheet or the longer detailed form is acceptable. The new due date by which this summary has to be submitted is AUGUST 31, 2011.

II.VQ: Is there still a 7% “hard” cap on Indirect Costs?

A: The formulas in the budget document have been revised so that there is no “hard” cap on Indirect Costs.

II.VIQ: Which form do I use for FY12, the previous year AFR or the new budget template?

A: Do not confuse Financial Reporting for the previous year with Budget Reporting for the current year; these are two different things. The year-end financial reporting should utilize the CFR (Consolidated Financial Report) and Grant Summary Report. The close out for fiscal year 2011 will not change from the procedure used in previous years; because of NEW Federal reporting requirements, some supplemental information may be requested. In terms of budgeting for the FY12 year, everyone should use the new FY12 one-page summary sheet.

II.VIIQ: How do I use the detailed template’s Occupancy tab if I have multiple program sites for various programs that need to be captured?

A: Do not to think of your sq. footage on an agency percentage basis, think about it on a raw sq. footage/program basis.In other words, consider how much square footage a program occupies, no matter where that program is located, and enter that square footage number for that grant/program. So, for example, consider that you have two programs that have two different locations, and one program uses 250 sq. ft in one location and the other uses 750sq. ft in the other location; for these grants/programs, enter the proper sq footage for each program, and the formula will sum to 1,000 for the total sq. footage.A percentage will then be calculated for that grant based on that grant sq. footage/total sq. footage, and expenses will be allocated accordingly. All grants/programs should be reflected on the same budget form.

Indirect Cost Rate Calculation

III.IQ: For providers who need to submit an Indirect Cost Rate Proposal (ICRP), those who initially submit the one-page summary budget, when is it due?

A: Providers that are required to submit an indirect cost plan must do so by October 1 and DHS will make every effort to notify providers of approval by November 1.

III.IIQ: For providers with a pre-approved indirect cost rate by the Feds, is that acceptable and what should be submitted to DHS?

A: Yes, that Fed rate is acceptable if all state grants were included in the rate proposal. Providers with a pre-approved rate only need to complete the summary budget form and must submit their indirect cost proposal package and required certifications (see related documents in the Provider Resources section of this website) they submitted to the Federal Agency, including their notification of approval for the Indirect Cost Rate. For all providers who do not have a pre-approved Federal rate or who do not initially complete the longer detailed budget form, an indirect cost rate proposal is due by October 1 with required certifications.

III.IIIQ: If I need to complete an Indirect Cost Rate Proposal (ICRP), what type of information will be required?

A: The ICRP is modeled after the US Department of Health and Human Services template that is required be used for submitting an ICRP. This information is contained in the budget long form. An advantage of initially completing the longer detailed budget form is that the information will already be captured, thus negating the need to complete an ICRP.

The following entities are exempt from ICRP:

If entities are primary recipients of federal funding and have an approved ICRP that includes DHS’ grants, then they must submit the plan and the approval from the federal government.
For Universities, the we will accept their Facility and Administrative Rate
For entities whose total operations consist of a single grant supported project.

Note: Any ICRP approved by DHS or the Federal Agency cannot exceed indirect cost limitations set forth by the federal funding agency for a specific grant. Please refer to program manuals for grants with restrictions.

III.IVQ: My organization doesn’t charge indirect costs to its grants; do I still have to provide this information?

A: There are some organizations that do not charge indirect costs to their grants. However, before making this determination, it will be helpful to review the information titled “Cost Principles Overview” located in the Provider Resources section of the DHS Contracts website. While DHS is pleased to provide this overview information, any determination of the applicability of the information to an individual organization’s situation must be made by the Financial and/or Legal counsel of that organization. DHS cannot advise an organization on how its individual budgets should be completed.

FFATA Information

IV.IQ: What is FFATA and do I have to comply with it?

A: The Federal Funding Accountability and Transparency Act (FFATA) is legislation that requires information on federal awards to be made available to the public. Federal prime awardees (e.g. DHS) must capture and report subaward and executive compensation data regarding their first-tier subaward grants and contracts and their subcontractors to meet the FFATA reporting requirements.This is a Federal requirement, as a condition of receiving federal funding.Therefore, DHS cannot grant exemptions from completing this responsibility. If DHS does not comply with FFATA, it will affect the agency’s ability to access Federal funds, and subject the agency to a fine of up to $250,000 per occurrence. This is the first year that FFATA is applicable to all Federal funds (and not just ARRA funds).

IV.IIQ: Who is required to file a FFATA report in FSRS?

A: The FFATA Sub-award Reporting System (FSRS) will collect data from Federal prime awardees on sub-awards they make: a prime grant awardee will be required to report on its sub-grants and a prime contract awardee will be required to report on its sub-contracts.
CONTRACTS
In accordance with Federal Acquisition Regulation clause 52.204-10 (Reporting Executive Compensation and First-Tier Sub-contract Awards), Prime Contractors awarded a federal contract or order are required to file a FFATA sub-award report by the end of the month following the month in which the prime contractor awards any sub-contract greater than $25,000. This reporting requirement will be phased-in (see below):
Phase 1: Reporting sub-contracts under federally-awarded contracts and orders valued greater than or equal to $20,000,000, reporting started July 8, 2010.
Phase 2: Reporting sub-contracts under federally-awarded contracts and orders valued greater than or equal to $550,000, reporting started October 1, 2010.
Phase 3: Reporting sub-contracts under federally-awarded contracts and orders valued greater than or equal to $25,000, reporting starts March 1, 2011.
Although the requirement to report sub-awards is being phased-in at certain dollar levels, if you would like to start reporting prior to the start date for your sub-contracts, the system is available to you for reporting.
GRANTS
In accordance with 2 CFR Chapter 1, Part 170 REPORTING SUB-AWARD AND EXECUTIVE COMPENSATION INFORMATION, Prime Awardees awarded a federal grant are required to file a FFATA sub-award report by the end of the month following the month in which the prime awardee awards any sub-grant equal to or greater than $25,000. The reporting requirements are as follows:

This requirement is for both mandatory and discretionary grants awarded on or after October 1, 2010.
All sub-award information must be reported by the prime awardee.
For those new Federal grants as of October 1, 2010, if the initial award is equal to or over $25,000, reporting of sub-award and executive compensation data is required.
If the initial award is below $25,000 but subsequent grant modifications result in a total award equal to or over $25,000, the award will be subject to the reporting requirements, as of the date the award exceeds $25,000.
If the initial award equals or exceeds $25,000 but funding is subsequently de-obligated such that the total award amount falls below $25,000, the award continues to be subject to the reporting requirements of the Transparency Act and this Guidance.

The CFDA numbers located on the Attachment of provider’s Community Services Agreement will indicate the funds that must be reported under FFATA, and the form that needs to be completed is located on the DHS website at