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Tribal TANF and CCDF Guide to Financial Management, Grants

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Tribal TANF and CCDF Guide to Financial Management, Grants

Tribal TANF and CCDF Guide to

    Financial Management, Grants Administration, and

    Program Accountability

    DEPARTMENT OF HEALTH & HUMAN SERVICES

    Child Care Bureau • Office of Family Assistance

    Table of Contents

    Introduction ......................................................................................................................................... 1

    1. Overview of Programs ................................................................................................................. 2

     Child Care and Development Fund for Tribal Grantees (CCDF) ................................................. 2

     Tribal Temporary Assistance for Needy Families (TANF) .......................................................... 2

2. Applicable Regulations, OMB Circulars, and Certifications ..................................................... 3

     Code of Federal Regulations ....................................................................................................... 3

     Title 45 ....................................................................................................................................... 3

     Office of Management and Budget (OMB) Circulars .................................................................. 4

     Policies....................................................................................................................................... 5

     Certifications .............................................................................................................................. 5

    3. Basic Grants Management Principles ......................................................................................... 6

     Allowable Cost Determination ................................................................................................... 6

     Recipient/Subrecipient/Vendor Status ........................................................................................ 6

     Obligation and Liquidation Periods ............................................................................................ 7

     Administrative Costs .................................................................................................................. 8

     Penalties and Disallowances ..................................................................................................... 10

     Required Financial Reporting ................................................................................................... 11

4. Basic Financial Management Principles: Federal Financial Management Requirements ...... 12

     Financial Systems ..................................................................................................................... 12

     Internal controls ....................................................................................................................... 12

     Accounting Systems ................................................................................................................. 13

     Cash Management .................................................................................................................... 13

     Audits ...................................................................................................................................... 14

    5. Procurement/Property Requirements ....................................................................................... 16

     Federal Procurement Requirements .......................................................................................... 16

     Code of Conduct ...................................................................................................................... 16

     Competition ............................................................................................................................. 17

     Contract Requirements ............................................................................................................. 17

     Property Management .............................................................................................................. 18

6. Other Administrative Requirements/Options ........................................................................... 19

     Record-Keeping and Record Retention ..................................................................................... 19

     Program Administration Option: Indian Employment, Training and

     Related Services Demonstration Act (102-477)................................................................... 19

    Appendix ........................................................................................................................................... 21 Web Sites for Agencies and Documents Referenced in This Guide .................................................. 21

Introduction

A ―Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program

    Accountability” was developed in conjunction with a special Tribal Cluster Training, ―Collaboration and Accountability as Foundations for Success,‖ held in Portland, Oregon on August 24-25, 2004. This Tribal Cluster Training is jointly sponsored by the Office of Family Assistance (OFA), which administers the

    Tribal Temporary Assistance for Needy Families (TANF) program, and the Child Care Bureau (CCB),

    which administers the Child Care and Development Fund (CCDF) program.

    Recognizing that the TANF and CCDF programs have a number of cross-cutting issues, this Guide focuses on general program administration and accountability issues that are common to the Tribal TANF

    and CCDF programs, including basic grants management and financial management principles, audits,

    and procurement and Federal property requirements. TANF and CCDF specific information is

    highlighted throughout the Guide.

By working collaboratively across the TANF and CCDF programs, Tribes have the opportunity to provide

    enhanced services to Indian families as they move along the path toward social and economic

    self-sufficiency.

    Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 1

1. Overview of Programs

Child Care and Development Fund for Tribal Grantees (CCDF)

    The Child Care and Development Block Grant Act was enacted in 1990 to provide child care assistance to low income working families. In 1988 and 1990, Congress enacted Title IV-A programs to support families on welfare, leaving welfare, and at-risk of welfare. The Child Care and Development Fund (CCDF) was authorized by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193), also known as PRWORA or ―welfare reform.‖ It eliminated the separate Title

    IV-A programs and consolidated Federal child care subsidy funding. PRWORA provided new direct Federal child care funds for Tribes which have been designated as Tribal Mandatory Funds. The new funds, combined with the Discretionary Fund (also referred to as the Child Care and Development Block Grant or CCDBG), are called the Child Care and Development Fund (CCDF).

    The CCDF assists low-income families, families receiving temporary public assistance, and those transitioning from public assistance in obtaining child care so they can work or attend training/education. Funds are awarded by the U.S. Department of Health and Human Services (DHHS), through the Administration for Children and Families (ACF), Child Care Bureau (CCB). ACF Regional Office staff have approval authority for Tribal CCDF two-year plans.

Tribal Temporary Assistance for Needy Families (TANF)

    With the signing of the 1996 welfare reform law, the Administration and Congress charted new ground by giving federally recognized Indian Tribes, or consortia of such Tribes, authority to operate their own Temporary Assistance for Needy Families (TANF) programs. The final Tribal TANF regulations hold Tribes accountable for moving families to self-sufficiency while encouraging and supporting flexibility, innovation, and creativity in tribal programs. The final regulations also implement the Native Employment Works (NEW) program which authorizes funding to former Tribal JOBS grantees, for tribal programs to make work activities available. This final rule implements the provisions in PRWORA, which for the first time gives Tribes the opportunity to operate their own TANF programs. The TANF statute offers Tribes the choice of whether to operate their own TANF program or to participate in the program operated by the State, a choice that represents a major step forward in tribal self-governance.

    The Tribal TANF final regulations provide Tribes and tribal consortia with a clear and balanced set of rules for complying with the law’s performance goals. They reflect PRWORA’s focus on moving needy

    families to work and self-sufficiency, and on ensuring that welfare is a time-limited, transitional experience, not a way of life. The regulations encourage and support flexibility, innovation, and creativity to enable tribal programs to reach all families and provide supports to working families. They do not dictate to Tribes how to design their TANF programs or spend their funds; however, they do hold Tribes accountable for moving families toward self-sufficiency. Funds are awarded and administered by the DHHS, through the ACF, Office of Family Assistance (OFA) at the regional office level. Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 2

2. Applicable Regulations, OMB Circulars, and Certifications

Tribal agency staff working with Federal grants must be fully knowledgeable of all applicable Federal

    requirements and skilled in applying these requirements in the daily operation of their program, whether

    starting a new program or striving to maintain a quality program which meets the intent of the enacting

    legislation. It is the responsibility of the tribal agency staff to determine what regulations apply to each

    program they administer.

While legislation and enacting regulations are program specific, there are also regulations and Office of

    Management and Budget (OMB) Circulars which are cross-cutting and apply to many Federal programs.

    These requirements address program administration such as financial management and procurement.

    There are also ―assurances‖ which define standards for operation, such as the Drug-Free Workplace, which apply uniformly. Statements of agreement to abide by these assurances are included in the tribal

    plan.

Code of Federal Regulations

    The Code of Federal Regulations (CFR) is a systematic collection of the rules published in the Federal Register by the executive departments and agencies of the Federal government. The CFR is divided into

    50 Titles that represent broad areas of Federal regulation. A portion of these are devoted to common

    regulations that apply across several different Departments of the government, such as Title 5,

    Administrative Personnel; and Title 41, Public Contracts and Property Management. Other Titles contain

    only the regulations of a single Department, such as Title 7, Agriculture; Title 29, Labor, and Title 49,

    Transportation. Title 25 is titled Indians and includes regulations related to programs funded through the Bureau of Indian Affairs (BIA), U.S. Department of the Interior.

Some of the regulations pertaining to DHHS are Title 21, Food and Drug Administration; Title 42, Public

    Health Service; and for Human Services, Title 45, Public Welfare. CCDF regulations are found at Title 45, Parts 98 and 99.

Title 45

Several Parts under Title 45 contain the Department-wide regulations that apply to DHHS programs. Most

    important among these in terms of the day-to-day operation of the programs under discussion are Part 74,

    Uniform Administrative Requirements for Awards and Subawards to Institutions of Higher Education,

    Hospitals, Other Non-Profit Organizations, and Commercial Organizations and Part 92, Uniform

    Administrative Requirements for Grants and Cooperation Agreements to State and Local Governments

    including Indian Tribal Governments.

Part 74 and Part 92 contain the procedures governing the administration of awards issued by DHHS. The

    Subparts cover topics such as cash management, financial reports, allowable and unallowable costs, and

    property management and procurement. Part 92 applies to tribal governments.

Regulations related to the operation of a Tribal Child Care (CCDF) program are found at 45 CFR Part 98,

    Subpart I. Subpart I specifies the extent to which general regulatory requirements apply to Tribes. In

    accordance with Section 98.80(a), Tribes shall be subject to all regulatory requirements in Parts 98 and 99,

    unless otherwise indicated. Subpart I lists general regulatory requirements that apply to Tribes. It also

    identifies requirements that do not apply to Tribes. Financial Management issues that apply to Tribes are

    Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 3

addressed in Subpart G Financial Management, and Data Reporting issues that apply to Tribes are

    addressed in Subpart H Program Reporting Requirements.

Regulations related to Tribal TANF are found at 45 CFR, Subtitle B, Chapter II (Office of Family

    Assistance), Part 286. Part 286 is divided into five subparts:

    Subpart A General Tribal TANF Provisions;

    Subpart B Tribal TANF Funding;

    Subpart C Tribal TANF Plan Content and Processing;

    Subpart D Accountability and Penalties; and

    Subpart E Data Collection and Reporting Requirements.

    What Does This Mean for Tribal TANF and CCDF Programs?

    TANF: Follows Part 92

    *CCDF: Follows Parts 98 and 99

    *As noted in Part 98.84(d), Tribes that have ACF approval to use CCDF funds for construction

    are required to comply with certain requirements set forth in Part 92.

Office of Management and Budget (OMB) Circulars

On behalf of the executive branch of the Federal government, OMB leads the development of

    government-wide policy to assure that grants are managed properly and that Federal dollars are spent in

    accordance with applicable laws and regulations. The outcome of this process is the issuance by OMB of

    instructions or information to Federal grant-making agencies. These issuances are referred to as OMB

    Circulars. Although a number of OMB Circulars have addressed grants management issues, each Federal

    grant award recipient is covered by only three Circulars, depending on the type of entity. Tribal

    governments follow these circulars:

    • A-87 for cost principles;

    • A-102 for administrative requirements (also referred to as the ―Common Rule‖); and

    • A-133 for audit requirements.

The administrative requirements for Indian Tribes are codified at 45 CFR Part 92.

    What Does This Mean for Tribal TANF and CCDF Programs?

    TANF: Follows OMB Circulars A-87, A-102 and A-133

    CCDF: Follows OMB Circular A-133 only (and A-87 for Construction and Major

    Renovation of Child Care Facilities)

Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 4

Policies

Legislation and regulations represent the first two levels of rulemaking. The third level of rulemaking is

    referred to as policy. Policies are developed to guide the implementation of a regulation.

Generally, new policies are developed and existing policies are updated in response to changes in the body

    of knowledge concerning ―best practice,‖ or because of frequent misinterpretation of the meaning of a

    regulatory requirement. Policies are generally issued in the form of a Policy Announcement (PA),

    Information Memorandum (IM), or Program Instruction (PI). For example, TANF-ACF-PA-00-4

    transmitted ―Guidance concerning State Maintenance-of-Effort (MOE) funds paid to a Tribe with an

    Approved Tribal Family Assistance plan.‖

Certifications

When a grantee accepts Federal funding, they are asked to certify that they will adhere to certain

    cross-cutting requirements. These include, but are not limited to:

    ? Certification regarding debarment (includes definitions for use with the certification of

    debarment);

    ? DHHS certification regarding drug-free workplace requirements;

    ? Certification of compliance with the Pro-Child Act of 1994;

    ? Assurance of compliance with Title VI of the Civil Rights Act of 1964 (CCDF only); and

    ? Assurance Non-Construction Programs (TANF only). Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 5

3. Basic Grants Management Principles

Allowable Cost Determination

Determinations of cost allowability are based on principles found in the OMB Cost Principles (A-87).

    Costs must meet certain criteria to be allowable. The costs must be reasonable, necessary, and conform to

    limitations set forth in legislation, regulation, or circulars. They must be consistent with the grantee’s

    policies and procedures such as agency procurement policies. Grantees are required to determine and

    adequately document costs in accordance with Generally Accepted Accounting Principles (GAAP).

    Failure to follow these principles may result in an inappropriate use of Federal funds; as the result of an

    audit finding or questioned cost, the grantee may have to repay the funds or incur a financial penalty.

    Attachment B of OMB Circular A-87 lists numerous ―Selected Items of Cost.‖ A cost is not necessarily unallowable just because it is not listed in these circulars. If a specific cost is not listed, the cost must meet

    the ―necessary and reasonable‖ principle before being charged to the program. Costs that are listed as unallowable under certain paragraphs cannot be shifted to another category to make them allowable. For

    example, all forms of fundraising and lobbying costs are unallowable and are noted as such in the cost

    principles.

Costs must also be ―allocable‖ to a program to be allowable. Costs can be allocated in one of three ways.

    They can be directly charged, proportionately charged, or be an indirect cost. A direct cost is a cost which

    is incurred specifically for one program, such as the salary of a program manager. A cost which is

    proportionately allocated is one which benefits more than one program. An example of a proportionately

    allocated cost would be the salary for an administrative assistant who works for two programs. This salary

    cost would be allocated based on the number of hours worked for each program. Indirect costs benefit all

    programs in an agency or tribal government equally. These costs are charged to an indirect cost pool and

    allocated to the programs using an indirect cost rate. This rate is determined during the indirect cost

    negotiation process and is approved by the cognizant Federal agency.

A written cost allocation plan is required for costs which are allocated proportionately between programs.

    The plan must include the items of cost, the basis for allocation, and the funding source information to

    which the cost will be allocated.

    NOTE to CCDF Programs:

    While CCDF Programs are not required to follow OMB Circular A-87 (Cost Principles), this

    Circular is a good reference document, containing ―Best Practices‖ information related to cost

    principles. However, a Tribal CCDF Program must follow OMB Circular A-87 if it has

    received ACF approval for construction or major renovation of a child care facility.

Recipient/Subrecipient/Vendor Status

There is a distinction between the status of recipient, subrecipient, and vendor. Federal awards expended

    as recipient or subrecipient are subject to audit under OMB Circular A-133. In contrast, a vendor supplies

    either goods or services.

Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 6

The functions performed by the agency determine the status as subrecipient or vendor. For example, when

    a Federal award is received by a subrecipient agency, the following may be completed by the

    organization:

    ? Determination of client eligibility for the program;

    ? Is subject to performance measurement by the Federal agency;

    ? Responsible for programmatic decision making;

    ? Must adhere to Federal program compliance requirements;

    ? Uses Federal funds to carry out a program of the organization as compared to providing goods

    or services for a program of the pass-through entity.

In contrast, payment for goods and services received by a vendor are when the organization:

    ? Provides the goods and services within normal business operations;

    ? Provides similar goods/services to many different purchasers;

    ? Operates in a competitive environment; and

    ? Provides goods or services that are ancillary to the operation of the Federal program.

Obligation and Liquidation Periods

Based on the Federal regulations at 45 CFR 92.23 and 98.60(e), where a funding period is specified, a

    grantee may charge only allowable costs resulting from obligations incurred during the funding period for

    the award. Funding period refers to the period of time that Federal funds are available for obligation. An

    obligation is defined as a legally binding agreement between two parties for purchase of services, supplies,

    or equipment. Examples include purchase orders and contracts. Liquidation means the issuance of

    payment for an obligation.

When submitting financial reports, the grantee must be able to provide information related to the

    unobligated balance of Federal funds and the unliquidated balance. The unobligated balance is defined as

    the portion of the funds authorized by the DHHS awarding agency that has not been obligated by the

    grantee, and is determined by deducting the cumulative obligations from the cumulative funds authorized.

    The unliquidated obligations are those obligations which have not yet been paid. The programs under

    discussion in this document have different funding periods which are defined in the applicable regulations,

    and noted below:

    CCDF:

    The Tribal Child Care (CCDF) program grantees have a two-year obligation period with an additional

    one-year liquidation period, with the exception of construction awards which have a three-year

    obligation/liquidation period.

    TANF:

    Tribal TANF funds do not necessarily need to be obligated by the end of the funding period. A Tribe

    may reserve amounts awarded to it, without fiscal year limitation, to provide assistance under the

    Tribal TANF program. It may expend funds beyond the fiscal year in which awarded only on benefits

    that meet the definition of assistance at Sec. 286.10 and administrative costs directly associated with

    providing that assistance.

    Tribal TANF and CCDF Guide to Financial Management, Grants Administration, and Program Accountability 7

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