Federal Funds Management

  • Essex Westford School District
    Procedure:  Federal Funds Management

    Date:  3/25/2019

    Management of Procurement

    Purpose

    The purpose of this procedure is to ensure that all expenditures from federal grants other than salaries and benefits are made in an open and competitive manner and in compliance with federal regulations.

    General Standards Include (2 CFR §200.318)

    • Avoid the acquisition of unnecessary or duplicative items
    • Consider consolidation or breaking out procurements to obtain a more economical purchase
    • Consider lease vs purchase
    • Consider state and local intergovernmental purchasing agreements.
    • Consider use of excess and surplus property
    • Situations that restrict competition
    • Specifying a brand name only, instead of allowing “an equal”
    • State or local preference except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference
    • Conflicts of interest
    • Unreasonable requirements on vendors to qualify to do business
    • Requiring unnecessary experience or excessive bonding
    • Noncompetitive pricing practices
    • Noncompetitive awards to consultants on retainer
    • Any arbitrary action in the procurement process
       

    Procurement Steps to comply with federal procurement procedures:

    Step 1:  Identify a need for a non-salary and benefit purchase

    Step 2:  Determine method of procurement.

    There are 5 allowable methods of procurement:

    Micro-purchase -

    The acquisition of supplies or services, the aggregate dollar amount of which does not exceed the Micro-Purchase Threshold as set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 currently $10,000.

    • To the extent practicable, purchases must be distributed  among qualified suppliers
    • Purchases exceeding the threshold cannot be divided solely to meet this threshold

    Small Purchase -

    The acquisition of services, supplies, or other property, the aggregate dollar amount of which does not exceed the Simplified Acquisition Threshold as set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 currently $250,000.

    • Must obtain two or more prices and document the reason vendor was selected. Vendor/costs may be identified through internet research, telephone calls, advertisement, email or written requests for information
    • Purchases subject to Vermont bid Law (16 V.S.A. §559) must meet both VT Statutes and federal standards
       

    Sealed Bids—

    Formal advertising when a complete, adequate and realistic specification or purchase description is available.

    • Bids must be solicited from an adequate number of sources
    • Sufficient time must be allowed for potential vendors to submit bids
    • Invitation for bids will be publicly advertised and include any specifications for the bidder to properly respond
    • All bids will be publicly opened at the time and place determined by the invitation to bid
    • A firm fixed price contract will be awarded to the lowest responsive and responsible bidder
    • Any or all bids may be rejected if there is a sound documented reason
    • May be subject to Vermont bid Law (16 V.S.A. §559) must meet both VT Statutes and federal standards 


    Competitive Proposals—

    Formal advertising when a sealed bid is not appropriate.

    • Proposals must be solicited from an adequate number of sources
    • Requests for proposals must be publicized and identify all evaluation factors and their relative importance
    • A written method for conducting technical evaluations must be established
    • A contract will be awarded to the vendor whose proposal is most advantageous to the program, with price and other factors considered
    • May be subject to Vermont bid Law (16 V.S.A. §559) must meet both VT Statutes and federal standards

    Non-Competitive Proposals—

    Procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply:

    • The item is available only from a single source
    • A public emergency
    • The Federal awarding agency of pass-through entity expressly authorizes the noncompetitive proposals in response to a written request.  Naming a vendor in a grant application, strategy, investment, or award does not constitute a sole source approval. A separate written request and approval are both still required.
    • After solicitation of a number of sources, competition is determined inadequate
    • May be subject to Vermont bid Law (16 V.S.A. §559) must meet both VT Statutes and federal standards
       

    Step 3:   Use the method selected in Step 2 to select a vendor

    Step 4:  Check for vendor suspension or debarment at www.sam.gov. Suspended or Debarred vendors may not be selected. (Retain a copy of search results for Step 5)      

    Step 5:  Document procurement process form is located on the EWSD website under Finance/Accounting Forms.
    Documentation must include:

    • Method of procurement
    • Solicitation method (advertisement, invitation, internet research, etc.)*
    • All vendor proposals (printouts of internet research, phone conversation notes, bids, etc.)*
    • Rationale for vendor selection*
    • Suspension/Debarment results from Step 4*does not apply when using Micro-purchase method

    Step 6:  Prepare for a purchase order and or contract
    A purchase order or contract must include the following:

    • Accurate and detailed description of goods or services as approved in grant investment.
    • Clear definition of unit cost or rate of pay
    • Invoice requirements, clear billing information and break down of charges (Note for contracted services only payment cannot be made until after services have been provided.)
    • Signature by authorized individual as per local procedures
    • Contracts must be signed dated by both parties prior to start of work     
    • Contracts in excess of $10,000 must address termination for cause and convenience.
    • Allowable cost only (sales tax, alcohol, donations, entertainment, lobbying, gift cards…are not allowable)
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    Step 7:  You have now completed the additional steps necessary for federal procurement and may proceed based on EWSD’s purchasing process.

    Step 8:  Prepare to pay the invoice.

    • Do not pay an invoice for contracted services in advance of the work being completed
    • Verify work billed on invoice for contracted services was completed satisfactorily and per contracted terms and matches the deliverables in the contract (i.e. invoice signed and dated by grant manager)*
    • Verification of receipt of goods (i.e. signed packing slip or other documentation of receipt)*
    • Verify proof of attendance where applicable (i.e. sign-in sheet and agenda)*
    • Unit on invoice is consistent with the contract (i.e. if contract is based on a daily rate then billing is based on a daily rate)
    • If invoice contains charges for non-federal work or multiple federal programs, the invoice must be clearly written to be able to separate the charges
    • Verify the expenditure is within the grant period
    • Verify the expenditure is allowable (sales tax, alcohol, donations, entertainment, lobbying, gift cards…are not allowable)

    *maintain documentation with expenditure packet

    Travel

    arrow See also File Code F-1 Travel Reimbursement Policy and Fiscal Procedure (Travel)

    • Mileage:

    Travel is to be by the most direct route and will be reimbursed at the IRS per-mile rate in effect at the time of travel for all miles traveled on district business in excess of normal commuting miles.

    • Workshops and Conferences:

    Requests to attend a conference or workshop must be approved in advance by the appropriate Administrator.

    Registration fees are limited to the actual cost of the conference.       

    Air or Train Transportation is limited to the most cost-effective rate considering circuitous routing, unreasonable hours, and excessive prolonged travel.

    Rental cars are limited to the most cost-effective rate considering the needs of the individual(s).

    Other necessary transportation fees such as shuttles, taxis, tolls, parking, etc. are reimbursable.

    Lodging at the conference venue is reimbursable.  In the event that such lodging is unavailable then lodging is limited to the most cost-effective rate considering proximity and access to transportation.

    Meals will be reimbursed at a maximum per day allowance as established in travel procedure.

    Only expenditures addressed in this procedure are considered reimbursable

    Management of Equipment

    Citation: 2 CFR §200.313(d)
    Written procedures for managing equipment whether acquired in whole or in part with a federal grant.

    Equipment is defined as tangible personal property with a useful life of more than one year and a per unit acquisition cost of $5,000 or more.

    1. Equipment records will be maintained and will include the following:

    a.Description of equipment
    b. Serial # or other identification number
    c. Source of funding
    d. Federal Award Identification Number (FAIN)
    e. Title holder
    f. Acquisition date
    g. Acquisition cost
    h. Percentage of federal participation
    i. Location
    j. Use
    k. Condition
    l. Date of last physical inventory
    m. Date of disposition
    n. Method of disposition
    o. Sale price

    2. A physical inventory of the equipment will be taken at least once every two years and the results reconciled with the equipment records (item 1).

    3. Adequate safeguards will be taken to prevent lost, damage or theft.  Any loss, damage or theft will be investigated.

    4. Equipment will be maintained in good working condition.

    5. Equipment with a current per unit fair market value $5,000 or less may be sold or otherwise disposed of at the discretion of the SU/District. The Equipment Record in item 1 will be updated with disposition information.

    Equipment with a current per unit fair market value over $5,000 requires disposition instructions from the federal awarding agency per 2 CFR §200.313(e).  The Equipment Record in item 1 will be updated with disposition information

    Allowability of Cost Management

    Obligation of Federal Funds require the SU/SD must determine the allowability of costs in accordance with Subpart E cost principles (2 CFR §200.400) and the terms and conditions of the award.  The cost must be:

    • Reasonable
    • Necessary
    • Allocable
    • Consistent treatment of Direct and Indirect costs (2 CFR §200.412-§200.415)
    • Meets the conditions of Selected Items of Cost (2 CFR §200.420-§200.475)

     

    Task

    Title of Responsible Party

    Stage of Process

    (requisition, PO, Contract, Invoice)

    Determines the cost is necessary

    Grant Manager

    Requisition

    Determines the cost is reasonable

    Grant Manager

    Requisition

    Determines the cost is included in the grant

    Director of Finance

    Invoice

    Verifies the cost is within the grant period

    Director of Finance

    PO & Invoice

    Determines the cost is allocable

    Director of Finance

    PO & Invoice

    Determines the cost is correctly treated as a direct cost or indirect admin

    Director of Finance

    PO & Invoice

    Determines the cost is allowed as a selected item of cost (ex. sales tax, entertainment…are not allowable)

    Director of Finance

    PO & Invoice

    Verifies adequate documentation is on file to support the invoice (ex. Packing slip for supplies, proof of attendance for conferences…)

    Director of Finance

    PO & Invoice

    Verifies the cost is covered by a contract and that procurement procedures/ conflict of interest procedures have been followed

    Director of Finance

    PO/Contract & Invoice

    Verifies suspension and debarment has been checked

    Grant Manager

    Requisition

    Verifies contract administration procedures have been followed

    Director of Finance

    PO/Contract & Invoice