Restricted Fund Accounting Policies and Procedures
Federally Funded Contracts and Grants
Effective Date: July 1, 2009
Board Approval: June 9, 2009
1. Purpose
To define policies specifically governing restricted contracts, agreements, and grants (hereafter referred to as contracts) funded from federal sources. These policies are in addition to general policies governing all contracts and grants (Sub-section 06-01).
Note: Each individual federal contract may also be subject to additional federal requirements specific to that federal contract or its granting agency.
2. Policy
2.1. Compliance Requirements: All charges made against federally funded contracts shall comply with OMB Circular A-87, Cost Principles Applicable to Grants and Contracts, and other federal requirements determined by the VP of Finance and Operations. All applicable federal regulations should be reviewed. Indirect cost allocations should be used to the extent allowable by the regulations.
a) Federal Pass-Thru Funds: State or local contracts providing federal pass-thru funds shall be considered federal contracts if the TATC maintains a large degree of control over how the funds are spent, what services are provided, and who is eligible to receive the benefits.
b) Necessary and Reasonable Costs: Costs charged to federal funds must be necessary and reasonable for the efficient administration of the specific contracted services, and not a general expense benefiting a whole department or the TATC. Amounts allocated must be based on the relative benefit to the contracted purposes it funds.
c) Eligible Costs: Eligible costs include:
Actual direct personnel costs.
Supplies and materials.
Approved equipment and capital outlays.
Other direct costs.
Indirect cost allocations (if applied equally using an approved rate).
Travel and training costs directly related to the contracted services.
d) Personnel Documentation: All personnel costs (salary and benefits) charged or allocated to federal funds must be supported by time and attendance records which fairly represent the amount of time spent on activities directly related to the contract. The method of documenting time and attendance shall be as reasonable as possible, as determined by the VP of Finance and Operations within federal requirements.
e) Unallowable Costs: Unallowable expenses include: bad debts, contingencies or reserves, donations, entertainment, fines and penalties, interest, board activities, unrelated travel and training, and the under recovery of expenditures from another federal contract.
f) Cost Shifting Prohibition: In no instance shall costs be shifted from one federal contract to another to bypass funding shortfalls, legal requirements, fund balance deficiencies, contract restrictions, etc.