FinancialandGrantsManagement101Basics

Handout2

RequiredWrittenPoliciesandProcedures

Policiesandproceduresareasetofdocumentsthatsetforthprinciples,rules,authorities,responsibilitiesandactionsforan
organization'smanagementandoperations.Theytypicallyidentifywhatistobedone,whoistodoit,andhowitshouldbedone.
ThelistsbelowidentifyexternalrequirementsforpoliciesandproceduresforanorganizationreceivingFederalgrantfunds,whether
yourorganizationisadirectrecipientorasubgrantee.

RequiredwrittenfinancialpoliciesandproceduresbasedonFederalgrantregulations:
Generalfinancialmanagementpolicies,procedures,manual,orguidelines
Internalcontrolsofgrantfunds,e.g.,approvalanddocumentationofexpenses,separationofduties,delegationsof
authority,checkissuance,cashreceipts,cashmanagement,bankreconciliation,travel,andpayroll
Procurementandpurchasingprocedures
PropertymanagementforequipmentpurchasedwithFederalfunds
Timeandeffortdistribution(timekeeping)
Recordretentionanddestruction
ProcedurestominimizethetimeelapsingbetweenthetransferofFederalfundsfromtheHHSPaymentManagement
SystemtotheGrantee
Proceduresfordeterminingthereasonableness,allocability,andallowabilityofcostsinaccordancewiththeapplicable
costprinciplesandthetermsandconditionsoftheaward
Codesofconductforemployeesengagedintheawardandadministrationofcontracts
Travel

OtherKeywrittenfinancialpoliciesandproceduresbasedonFederalgrantregulations:
CostAllocationPlans
Payroll
Cashreceiptsanddisbursements
Cashdrawdownsandreimbursements
FinancialReporting
Sitemanagementandmonitoring
Closeoutofsubgrants

AdditionalRequirementsforNonprofitOrganizations
Ifyourorganizationisanonprofitorganization,yourentityisrequiredtosubmittheannualForm990totheInternalRevenue
Service(IRS).PartVI,Governance,Management,andDisclosure,SectionB,PoliciesonPage6oftheFormrequires:
1. Conflictofinterestpolicy
2. Whistleblowerpolicy
3. RecordRetentionanddestructionpolicy
4. AwrittenprocessfordeterminingcompensationoftheorganizationsCEO,ExecutiveDirector,ortopmanagementofficial;
andotherofficersorkeyemployees.Theprocessmustinclude:areviewandapprovalbyindependentpersons,
comparabilitydata,andcontemporaneoussubstantiationofthedeliberationanddecision.
5. Awrittenpolicyorprocedureforanorganizationthatinvestsin,contributesassetsto,orparticipatesinajointventureor
similararrangementwithataxableentity.Itmustensureproperstepshavebeentakentosafeguardtheorganizations
exemptstatuswithrespecttosucharrangements.

References:
45CFR2541.200and360,UniformAdministrativeRequirementsforGrantsandCooperativeAgreementstoStateand
LocalGovernmentsfortheCorporationforNationalandCommunityService
45CFR2543.21,22and44,GrantsandAgreementswithInstitutionsofHigherEducation,Hospitals,andOtherNonProfit
OrganizationsfortheCorporationforNationalandCommunityService
2CFRpart220,CostPrinciplesforEducationalInstitutions
2CFRpart225,CostPrinciplesforState,LocalandIndianTribalGovernments
2CFRpart230,CostPrinciplesforNonProfitOrganizations
Form990,ReturnofOrganizationExemptFromIncomeTaxfortheInternalRevenueService

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