Module 3
TRIO Training: Budget Management - Administration
Table of Contents
Purpose of Budget Management – Administration ...... 1
Federal Authorities ...... 1
Equipment Management ...... 3
Prior Approval Requirements ...... 3
Scope and Objectives ...... 4
Key Personnel ...... 4
Director Time ...... 5
Other Statutes...... 5
Management Practices...... 6
Assignment ...... 6
Assignment Checklist...... 6
Discussion – Carryover and Prior Approval ...... 7
Addenda ...... i Areas Normally Covered in an On-site Review ...... i Grants Policy Bulletin #8...... iii
Table of Figures
Figure 1: TRIO Governing Documents Hierarchy ...... 2
Figure 2: A-110 References ...... 2
Figure 3: Example of Change in Scope ...... 4
Figure 4: Prior Approval ...... 5
Figure 5: Sample Disclosure ...... 5
Purpose of Budget Management – Administration
This module addresses how the administrative aspects of a project’s budget, such as personnel, equipment, and prior approval for budgetary changes, are managed. These are important because they are areas covered* by federal reviewers in an on-site review.
Budget management administration uses the federal authorities, including the TRIO regulations, EDGAR, OMB Circulars, the approved proposal, and the Grant Award Notification (GAN) to address how projects manage the administrative aspects of a project. Administrative aspects relating to measuring the project’s effectiveness in meeting objectives and for documentation of participant eligibility are covered in the Program Accountability and Participant Eligibility modules, respectively.
The Budget Management – Administration module focuses on good management practices as well as federal requirements. This module provides you with:
Examples of practical applications of the governing rules to Budget Management –
Administration;
An understanding of how to improve budget management through internal controls and financial management;
An understanding of the checks and balances designed to ensure that grant funds are used only for eligible expenses and that no singular person controls the authorization and disbursement of grant funds; and
An understanding of conflict of interest provisions and the grantee’s obligations as a
fiduciary.
As you read through the content associated with this module consider the following situation:
Due to a position vacancy, a project has significant carryover funds from year two of a five year grant. The project would like to use the monies to fund an additional component of a current program. However, the new component was not in the approved proposal.
As with the issues stated in the previous module, you should be able to rely on the guidance offered by the governing documents to protect both your project and your entity. The following discussion will enable you to do that.
Federal Authorities
A grantee, upon acceptance of an SSS grant, agrees to two things: to comply with applicable laws and regulations and with the approved application [34 CFR 75.700], and to keep records to evidence its compliance with program requirements [34 CFR 75.731]. Yet recall the 2003 Inspector General (IG) audit presentation discussed in the Training Priority Overview noted several areas where many projects were out of compliance with the requirements of the governing documents.
* Addendum 1: Areas Normally Covered in an On-site Review
The three sections of regulatory documents that address the requirements an institution must meet once the grant has been awarded are:
SSS regulations, Part 646, Subpart D – What Conditions Must Be Met by a Grantee?, Sections 646.30 – 646.32;
EDGAR, Part 74, Subpart C – Post-Award Requirements, Sections 74.20 – 74.62;
and
EDGAR, Part 75, Subpart F – What Are the Administrative Responsibilities of a
Grantee?, Sections 75.700 – 75.740.
The Program Authorities Review module covered how the regulations cite the parts of EDGAR that apply to a TRIO program. Note the many references to OMB Circular A-110 throughout those relevant parts of EDGAR. For example, go to EDGAR Part 74.1 and look at the parenthesis at the end where the ED cites the authority. The first citation is 20
U.S.C. (law); the second cited authority is
OMB Circular A-110.
Figure 1: TRIO Governing Documents Hierarchy
As discussed, OMB Circular A-110 covers the uniform administrative requirements for grants to institutions of higher education. Page one of OMB Circular A-110, Item 3. Policy, states the circular is applicable to all Federal agencies. It further states, “If any
statue specifically prescribes policies or specific requirements that differ from the standards provided herein, the provisions of the statue shall govern.” This is OMB acknowledging that there is a hierarchy of authorities and that the statute overrides the circular.
Although EDGAR currently incorporates almost verbatim the language in A-110, occasionally
OMB circulars are revised and
EDGAR revisions are made at a later date. Therefore, it is important for you to understand the organization of A-110 and gain familiarity with this circular. Also, it is sometimes easier to find a reference in the circular.
A-110 References
Subpart C – Post-Award Requirements
Topic Page
.23 Cost sharing or matching ...... 16
.25 Revision of budget and program plans...... 19
.26 Non-Federal audits ...... 21
.34 Equipment ...... 24
.35 Supplies and other expendable property ...... 27
The index for A-110 is on pages .51 Monitoring and reporting program performance .. 33
2 through the top of page 5. An .53 Retention and access requirements for records ..... 35
institution’s grants management
office is responsible for much of
Figure 2: A-110 References
the information in A-110, such as Subpart C – Post-Award Requirements [see EDGAR, Subpart C – Post-Awards Requirements, Section 74.20 – 74.62]. That is where OMB discusses financial and program management standards. Sections that projects primarily reference are in Subpart C. See Figure 2 for a selected list of A-110 references. It may be helpful to be aware of certain sections; one such section that pertains to the TRIO programs is Equipment Management and is
an example of where the language in A-110 Subpart C,
.34 Equipment and EDGAR 74.34
Equipment are identical. Equipment is a good example to use as an introduction to the administrative requirements of budget management.
Equipment Management
As previously mentioned, equipment management is covered in the Administrative
Requirements A-110
.34 and echoed in EDGAR 74.34. Because the requirements apply
to all federal agencies and their grantees, it might be convenient to assume that institutions or agencies are monitoring compliance with these requirements. However, some smaller grantees may not have an office or individual with primary responsibility for asset management. Even for larger grantees, the asset management function of the institution or agency will rely on cooperation from the project. Therefore, the primary responsibility for keeping accurate records of equipment that comply with the requirements and for responding to requests for information from the asset management officer lies with the project. Both the Administrative Requirements and EDGAR detail the types of data required for maintaining the project’s equipment records.
For a list of requirements, see OMB Circular A-110, Subpart C, .34 Equipment.
If you have not already done so, it is a good idea to learn who at your institution is responsible for this function, determine the institution’s definition of equipment, and then request from the asset management officer the institutional policies and procedures that respond to the requirements. Then, it is advisable to collect the information required and keep it updated as purchases are made and inventory is surplused or disposed of. An internal instrument and policy for collecting this information is strongly recommended.
Prior Approval Requirements
The Program Authorities Review module mentioned the Revision of Budget and Program Plans in EDGAR 74.25. These regulations were originally called the Expanded Authorities because they offer grantees greater administrative flexibility to take certain actions without the prior approval of the ED. This increased flexibility for managing a discretionary grant project also means there is increased accountability. In 34 CFR 74.25(c), sections (1), (2), and (3) state the three project-related reasons grantees must request prior approval. EDGAR further states in
74.25(d) that no other prior approval requirements are imposed. The following areas are particularly relevant to TRIO programs:
Changing the scope or objectives of the project [74.25(c)(1)]; Changing a key person [74.25(c)(2)]; or
Changing the amount of time the project director devotes to the project if the time
reduction is more than 25% [74.25(c)(3)].
Any program-related change that would generate a need for additional federal funding also requires prior approval [74.25(c)(4)].
Although EDGAR provides general guidance for all the ED programs, specific program regulations may have more liberal or restrictive requirements.
Scope and Objectives: When discussing the scope of the project and its objectives it is necessary to look at the approved grant application. In SSS projects, the grant proposal established the need for the project and included objectives and a plan of operation to meet those objectives. Since the ED, upon awarding the grant, may make changes to the objectives, such as changing the number of students to be served and/or changing the graduation or transfer rate objectives, the original proposal as modified during negotiations is the project’s approved application.
Example of Change in Scope
The project was funded to identify and recruit 120 low income, first
generation students.
At the time of the visit, 82 students were enrolled; they included 70 disabled students and 12 low income, first generation students.
Figure 3: Example of Change in Scope
Subsequent to the application’s approval, any change to the project’s scope requires the ED’s approval as per EDGAR 74.25(c)(1) and 75.700. The difficulty in complying with the regulatory requirements is that scope has never been defined by the ED. To provide a basis for discussing if a change in a project constitutes a change in scope, consider the example demonstrated in Figure
3.
Given the grant application established a specific need for the project, it is reasonable to assume that any portion of the proposal that has a material impact on how and to what extent that need is addressed is a change in scope. If the proposal made the case for a project targeted at low income, first generation students, changing the target population to students with disabilities could be construed as a change in scope.
As the example demonstrates, serving fewer students than approved and focusing on students with disabilities results in a change of scope. A federal on-site reviewer would look for the ED’s approval for this type of change in scope. Absent such approval, the project is not in compliance with EDGAR 74.25(c)(1) and 75.700.
Key Personnel: The ED, when awarding the grant, defines the key personnel in block 4 of the Grant Award Notification (GAN). Locate your project’s GAN, find block 4, and note who is named as key personnel and the person’s title. If the person in that position changes, the grantee must submit a request to the ED with the person’s resume, and request approval to name that person to that position, 74.25(c)(2). TRIO projects usually have no more than two people named as key personnel. If the SSS grant is the only TRIO grant at the institution, the SSS director is probably the only person named. Institutions that have a TRIO director responsible for administering two or more TRIO grants may also have associate directors or coordinators for
each project. The Department may then identify both the TRIO director and the associate director or coordinator on the GAN.
SSS regulations, 646.32(c)(1) require a full-time project director, unless waived under
646.32(c)(3).
Director Time: EDGAR 74.25(c)(3) states that if the grantee wants to change the director’s level of effort with the project, the grantee must request prior approval from the ED if the change is a reduction of more than
25%. Since the TRIO regulations are more restrictive than EDGAR, it is recommended that any changes from the negotiated level of effort of key personnel be discussed with the project’s program specialist.
If block 4 of the GAN does not specify a
level of effort, refer to the project’s approved
budget for the approved level of effort.
Other Statutes
Prior Approval Requirements Changes in project scope or objectives; Changes in key personnel;
Project directors; or
o Absence for more than three months
o 25% reduction in time
Need for additional federal funds.
Important Reminders Check grant terms, conditions and grant award attachments for possible exceptions. In rare circumstances, some or all requests may be denied.
When in doubt, call your Program
Specialist.
Figure 4: Prior Approval
The Federal Authorities include statues other than the Higher Education Act that apply to these grants, as evidenced by the earlier mention of GPRA and the Civil Rights Act.
One such statute that is often overlooked by projects and is a common area of noncompliance is Public Law 105-78 Section 508. This statute is referenced in your Grant Award Notification (GAN) packet as Attachment S†: Special Conditions for Disclosing Federal Funding in Public Announcements. This citation requires any public document, such as a recruitment brochure, issued from a federally funded program, must state:
That it receives federal funding, and
The percentage of the total cost being financed with federal funds.
For example, a Student Support Services recruitment brochure might contain a disclosure statement such as the one in Figure 5. Keep in mind that a project’s website would also require this statement since that information is made available to the public. Documents internal to the
project, such as a tutor handbook, would not require the disclosure statement.
Sample Disclosure
This Student Support Services Project is
100% federally funded at $xxx,xxx annually.
Figure 5: Sample Disclosure
† Addendum 2: Grants Policy Bulletin #8
An additional statute of particular interest to TRIO administrators is Title 31 U.S.C. Section
1352. This law is government wide and, as such, it is published in the OMB Cost Principles appropriate for the grantee type. It is referenced in Circular A-21, Part J.28 Lobbying. You are encouraged to read the full OMB citation so that you are able to recognize what constitutes lobbying. Furthermore, every applicant for federal TRIO funding must certify when completing the application packet that no federal funds have been paid or will be paid for