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Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 Category: Issued: 02/97 Initiated by: Department of Approved by: Maricopa County Revised: 11/04; updated Finance Board of Supervisors & Special 04/08; 3/09; and 5/09 Districts A. Purpose The purpose of this policy is to serve as the framework for Maricopa County Departments and Special Districts (Flood Control District, Library District, and Stadium District) to follow when applying for grants and negotiating the terms and conditions of the agreements and/or contracts to ensure optimum financial and administrative arrangements for Maricopa County or the Special District are met. B. Definitions Central Service Costs (2 CFR Part 225 (OMB Circular A-87)) – refers to costs, benefiting both grant and non-grant activities for inclusion as part of indirect cost in grants. The allocation is calculated in compliance with 2 CFR Part 225 (Federal Office of Management and Budget Circular A-87). Department – refers to the department, office or agency under budgetary responsibility of the Board of Supervisors, which has direct oversight responsibility for the program(s) funded partially or totally with the grant funds. The elected official or department director of the Department shall act as the agent of the County for purposes of this policy. Department Overhead – Departmental/Special District costs incurred for both grant and non-grant programs. Grantor Agency – refers to a Federal, state, local, or private agency or organization, which provides the grant funding and/or grant funding oversight. Indirect Costs – refers to those costs incurred for a common or institution-wide objective that benefits more than one grant program or project. Such costs are not readily assignable to the cost objective specifically benefited. In-Kind – refers to contributions in the form of goods or services rather than in cash. One-time Grants – refers to funding from a Grantor Agency which is provided for a limited duration for a specified project or program. This type of grant may be provided to start a new program or service or for a program or services which has a limited life. Ongoing Grants – refers to funding from a Grantor Agency which is expected to be provided year after year for a specified program(s) or service(s). Special District – Flood Control District of Maricopa County, Maricopa County Library District, Maricopa County Stadium District. C. Policy Maricopa County and Special Districts receive significant funding from Federal, state, and local agencies annually. The following policy statements will ensure that the County or Special District is managing grants to its optimum potential. 1. The Board of Supervisors or Board of Directors must formally accept all grant awards prior to any funds being expended. Page 1 of 7 Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 2. Departments/Special Districts will consistently negotiate grant agreements to meet County or Special District goals and policies. This includes conducting a cost/benefit study to determine the appropriateness of Maricopa County or Special District pursuing a particular grant. 3. Departments/Special Districts will negotiate for advance funding financial arrangements first and only accept reimbursement funding as the final option. 4. Departments/Special Districts will clearly define any matching requirements required by Maricopa County or Special District during the application process. 5. To minimize interest expense to Maricopa County, Departments/Special Districts will try and negotiate a reimbursement schedule that is in alignment with this policy. Departments/Special Districts will closely monitor their expenditures and claim reimbursement whenever expenses exceed $100,000, or on a monthly basis. 6. Maricopa County or Special District will utilize the County financial system to track, monitor and report all grant financial activity. All grant activity must be closed out within 150 days of the grant end date. 7. Departments/Special Districts are required to charge indirect costs on all grants unless prohibited by the grant contract, law, County Board of Supervisors approval or Special District Board of Directors approval. • Indirect costs will always be included (applied for) in the financial section of the grant application. • Indirect costs will be recovered at the maximum allowed by the Grantor or as defined on the Indirect Cost Plan that is approved by the Department of Finance. 8. Departments/Special Districts do not have the authority to negotiate a lower indirect cost reimbursement in order to increase program funding. 9. Departments will expend all grant funds prior to expending any general fund appropriations, or in the case of Special Districts, before expending other Special District revenues in relation to grant programs. D. Guidelines This Policy shall serve as the framework for Departments/Special Districts to follow when applying for grants and negotiating the terms and conditions of the agreements. The Policy is not intended to discourage Departments/Special Districts from seeking grant funding as a means to support various services and programs. Rather, it is intended to provide consistent guidelines for grant administration to ensure optimum financial arrangements for Maricopa County or Special District and to enhance Board of Supervisors or Board of Directors acceptance of grants conforming to this Policy. Specific information and detailed procedures are contained in the Maricopa County Grant Manual, which is located at ebc.maricopa.gov/library/finance. The Maricopa County Grant Manual may be updated by the Department of Finance, as determined necessary, to accommodate the effective administration of this policy. 1. Initial Grant Application a) Departments/Special Districts are not required to obtain Board of Supervisors/Board of Directors approval prior to submitting an application for grant funding provided the grant meets the following requirements: (1) There is no matching requirement of funds; (2) Indirect costs are fully recoverable; and (3) There is no future or ongoing contributions required after the grant period ends. In addition, the Director of the Department or Special District shall certify that the grant being applied for meets the above requirements. Page 2 of 7 Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 Departments that wish to apply for grants that do NOT meet one or more of the above requirements must obtain Board of Supervisors/Board of Directors approval prior to submission of the application. b) Departments/Special Districts are required to obtain the approval of the Board of Supervisors/Board of Directors prior to submitting an application for grant funding for any type of deviation from this policy including full indirect cost recovery. The information on the agenda must be clear and describe the nature of the deviation(s). It must also be clearly noted the intent or non-intent to apply for further grants from this particular grantor of this nature. After this grant has been reviewed and accepted by the Board of Supervisors/Board of Directors, subsequent grants in that fiscal year from the same Grantor Agency with like provisions do not require the Board’s review and acceptance during the application process. c) Grants for the Judicial Branch in Maricopa County will be identified by the Presiding Judge of the Superior Court in an annual presentation to the Board of Supervisors. The presentation will reference the individual grants, and whether any of the provisions of the grants deviate from this Policy. After these grants have been reviewed and accepted by the Board of Supervisors, subsequent grants for that fiscal year from the same Grantor Agency with like provisions do not require the Board’s review and acceptance of the grant. Subsequent grants from a new Grantor Agency must be transmitted to the Board of Supervisors for review and acceptance. d) Departments/Special Districts may seek approval for both the Grant Submittal and Grant Award Acceptance at the pre-submission stage, provided that all terms of the grant are in compliance with this policy and the information presented to the Board of Supervisors/Board of Directors is consistent. e) Departments/Special Districts will provide to the Department of Finance a copy of all grant agreements which must specifically include the award amount, grant period dates, availability of indirect costs and the indirect cost percentage (%), distinction between reimbursement or advance funding and a complete description of the grant. The provided information will be used to establish controls on the County financial system and will not be changed or modified (award period, grant award, etc.) without supporting documentation from the Grantor. 2. On-Going Grant Application From year to year, Departments/Special Districts may receive grant funding from the same Grantor for the continuation of a program. In this case, Departments must notify the Board of Supervisors/Board of Directors in an annual or more frequent presentation of their intent to apply for all ongoing grants. Grants for the Judicial Branch in Maricopa County will be identified by the Presiding Judge of the Superior Court in an annual presentation to the Board of Supervisors. The presentation will reference the individual grants, and whether any of the provisions of the grants deviate from this policy. After these grants have been reviewed and accepted by the Board of Supervisors, subsequent grants for that fiscal year from the same Grantor Agency with like provisions do not require the Board’s review and acceptance of the grant. Subsequent grants from a new Grantor Agency will be transmitted to the Board of Supervisors for review and acceptance. 3. Funding To improve cash management practices, it is the County and Special Districts’ preference to receive funding on an advance basis instead of a reimbursement basis. Therefore, every effort is to be made by Departments/Special Districts to obtain advance funding from the Grantor Agency. This is Page 3 of 7 Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 especially critical for one-time grant funded programs where the County or Special District is advancing funds to nonprofit subcontractors. The Department/Special District may be requested by the Office of Management and Budget (OMB) to present the cost/benefits of accepting a grant versus not accepting a particular grant. The cost/benefit analysis must take into account if the grant-funded services are mandated and comply with the MfR Budgeting format. One-time Grants, which are actually start-up grants for new programs or services, will be so noted in the submittal to the Board of Supervisors/Board of Directors. Program costs, which Departments/Special Districts wish to continue once the grant funding has been depleted, will be identified and reported to the Board of Supervisors /Board of Directors at the time of submittal for consideration. The Department must present analysis and information to the Board of Supervisors/Board of Directors to assist the Board in deciding whether the County or Special District should fund expenses for the project or program from other County or Special District funds following the depletion of the grant funds. 4. Claiming Reimbursement a) Departments/Special District will record and track grant revenues and expenditures utilizing the County financial system. b) Departments/Special District shall submit claims to the Grantor Agency as frequently as permitted under the grant agreement. This will be no less frequent than monthly or when the expenditures reach $100,000, unless otherwise established by the grantor. c) At grant year-end, each Department/Special District shall close out its respective grants. This includes preparing and submitting any required final reports to the Grantor Agency and either returning excess funds or requesting final reimbursement for the grant year. All grant closing documentation will be submitted to the Finance Department to ensure the grants are accurately closed on the financial system within 150 days after the grant end date as represented on the County financial system. All unreimbursed costs must be identified and a plan of action defined to ensure an alternate funding source is identified and the grant is effectively closed within the 150 day timeframe. All unresolved grant balances/(deficits) after the 150 day timeframe will be reported to the County Manager by the Department of Finance and the Office of Management and Budget by utilizing the Fund Balance Report. 5. Indirect Costs (2 CFR Part 225 (OMB Circular A-87) Charges) 2 CFR Part 225 (Federal Office of Management and Budget Circular A-87) recognizes indirect costs as legitimate grant expenses. As such, it is the intention of Maricopa County or Special District to recover indirect costs at all opportunities. In order to do so, the Department of Finance will prepare the following plans on an annual basis: a) 2 CFR Part 225 (OMB Circular A-87) County-wide Central Services Cost Allocation Plan. The Department of Finance is responsible for preparing and negotiating the County-wide 2 CFR Part 225 (OMB Circular A-87) plan with Maricopa County’s cognizant agency, United States Department of Housing and Urban Development (HUD). The Department of Health and Human Services is Maricopa County’s assigned cognizant agency regarding audit issues. Whenever permitted by the Grantor Agency, grants requiring County or Special District matching funds may utilize County Overhead (A-87) as a last option. All other opportunities must be exhausted to meet the inkind match before utilizing County Overhead (A-87). If the required match exceeds the amount of inkind and/or County Overhead (A-87) or Overhead is not an Page 4 of 7 Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 allowable expense by the Grantor Agency the Department must inform the Board of Supervisors/Board of Directors of the exception and estimate the relative financial inkind impact. b) Departmental Indirect Cost Allocation Plan(s). The County’s 2 CFR Part 225 (OMB Circular A- 87) indirect costs plans are used as a means of equitably recovering indirect costs from both federal and non-federal grant programs. All departments/Special Districts receiving grant funds can submit a written request to the Department of Finance to prepare a Departmental 2 CFR Part 225 (OMB Circular A-87) Indirect Cost Allocation Plan. In some cases the grantor may limit the recovery of indirect costs to a percentage less than the combined Departmental and County-wide 2 CFR Part 225 (OMB Circular A-87) indirect rate. In these cases, the Departmental 2 CFR Part 225 (OMB Circular A-87) rate shall be satisfied first. Any remaining funds will then be applied to the County-wide 2 CFR Part 225 (OMB Circular A-87) rate. County Departments Providing Grant Services to Outside Entities Maricopa County Departments that are allowed to perform grant financial services for entities outside of the County and are not considered to be subrecipients may recover indirect costs and/or user charges for the administration of grants. If these outside entities are allowed by their grantors to recover indirect costs and/or charge a user fee to reimburse Maricopa County for services rendered, the monies must be deposited back to the funding source where the support services were initially provided. For example, a General Fund Department being reimbursed for grant management activities shall remit the reimbursement back to the General Fund. Specific accounting information and examples can be found in the County Grant Manual located at ebc.Maricopa.gov/library/finance. 6. Purchase of Computing and Network Systems Relating to Grant Supported Programs To ensure compatibility and supportability of the County computing and network infrastructure, Departments/Special Districts are to consult with and obtain approval from the Chief Information Officer prior to purchasing any desired equipment. This applies to hardware, software and communications technologies including data, voice, video, image radio telemetry and facsimile purchases under the provisions of the County’s Procurement Code. Departments/Special Districts are to utilize the Technology Financing Program unless the grant specifically does not provide for this type of activity. As an example, a grant that is Board approved for two (2) years would not allow for the purchase of computers under the Technology Financing Program as the Technology Financing Program is a 36-month program. To ensure effective asset management and tracking, all computer-related items must be tagged with an asset number by the Technology Finance Program Coordinator and recorded in an asset database. This information is utilized for the projection of asset replacement purposes. Departments in the Judicial Branch of Maricopa County will consult with the Chief Information Officer prior to any purchases under the Judicial Procurement Code to determine whether the purchase will require compatibility and supportability of the County computing and network infrastructure. 7. Department of Finance Responsibility While each Department/Special District has staff assigned to monitor and report the financial activities of grants, the Department of Finance will provide general and technical oversight and monitoring of all grant funds. At a minimum, the Department of Finance will: Page 5 of 7 Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 a) Review and approve grant agenda items when they comply with County policy and the County Grant Manual. b) Establish a Board approved grant on the County financial system when all supporting documentation is provided. c) Prepare and provide to the Departments/Special Districts a monthly grant report (Fund Balance Report). This report will include inception to date financial activity for each individual grant. This report will be used to ensure the effective management and maintenance of grant activity. d) Monitor that grant expenditures do not exceed grant awards. e) Review individual grant balances, utilizing the Fund Balance Report, on a quarterly basis to identify departments that are not requesting reimbursement from the Grantor Agency on a timely basis. Departments/Special Districts that are not regularly claiming reimbursements will be contacted by the Department of Finance. f) Communicate with the Office of Management and Budget regarding fund balance and/or deficit issues. g) Initiate the preparation of the Indirect Cost Allocation Plan by providing a copy of the current plan, detailed listing of expenditures and other supporting data. Provide support, guidance and direction to Departments/Special Districts to assist them in the preparation of their Indirect Cost Allocation Plan. h) Review Fund Balance Report for closed Grants to determine compliance with fund balance/(deficits). i) Review and recommend approval of proposed Grant applications when Department/Special District is not in full compliance with Grant policy. 8. Office of Management and Budget Responsibilities a) Review and recommend approval of grant agenda items when they comply with County policy and the County Grant Manual. b) Review and recommend approval of Department’s/Special District’s proposed grant budget. c) Review and recommend approval of adjustments to Department’s/Special District’s grant budget as necessary. d) Review and take action as necessary to correct any deficit in Grant Funded Budgets. e) Review and take action as necessary to minimize lost interest earnings to the General Fund due to negative cash positions in Grant funds. f) Review and take action as necessary regarding departmental indirect cost rate plans. Ensure maximum reimbursement of all allowable indirect costs. g) Consistent with Board policy, review departments spending to ensure that Grant Funds are used before General Fund dollars, and for Special Districts, to ensure that Grant Funds are used before other Special District revenues. Page 6 of 7 Maricopa County Policy Number: A2505 Policy for Administering Grants Revision: #3 h) Review and recommend approval of proposed Grant applications when Department/Special District is not in full compliance with Grant policy. 9. Department/Special District Responsibilities Each Department/Special District will ensure the following general maintenance activities are completed as defined below: a) Review, reconcile and certify the monthly Fund Balance Report. Any discrepancies are to be reported to the Department of Finance within two (2) weeks of receiving the Fund Balance Report. A written response must be received by the Department of Finance to report any discrepancies. b) Reconcile and close expired grants on the County financial system within 150 days of the grant end date (as entered on the County financial system). c) Communicate with the Office of Management and Budget and the Department of Finance regarding grants with a negative balance (unreimburseable expense). The Department/Special District must develop a plan of action to resolve the deficit. For departments, the plan should only consider utilizing General Funds as a last option. d) Prepare the Indirect Cost Allocation Plan in the format defined by the Department of Finance. Obtain Departmental/Special District approval of the Indirect Cost Allocation Plan and provide a complete copy of the plan with all supporting documenting to the Department of Finance and the Office of Management and Budget by the timeline established by the Department of Finance. e) Ensure that grant expenditures do not exceed grant awards. f) Comply with all reporting requirements as defined by the grantor and County-wide Grant Policy and Manual. g) Comply with all record retention requirements as defined by the grantor. E. Related Documents: The following documents are available at the indicated site. Grant Manual: ebc.maricopa.gov/library/finance 2 CFR Part 225 (OMB Circular A-87): http://www.whitehouse.gov/omb/assets/omb/fedreg/2005/083105_a87.pdf Agenda Numbers: C-18-05-013-6-00; C-18-05-014-6-00; C-18-05-015-6-00; C-18-05-016-6-00; C-18-08-045-6-00; C-18-08-046-3-00; C-18-08-047-3-00; C-18-08-048-3-00; C-06-09-283-6-01; C-06-09-307-6-01; C-06-09-308-6-01; C-06-09-309-6-01 Page 7 of 7