PACE - Financial Policies - Allowable Use of Grant Funds
ALLOWABLE USE OF GRANT FUNDS AND ADHERENCE TO UNIFORM GRANT GUIDANCE POLICY
- PURPOSE - The City receives financial support from the federal government for capital projects from time to time. The funding is in the form of direct and indirect support for design and construction of capital projects. The federal Uniform Grant Guidance identifies the criteria that must be met in order to properly charge costs to federally funded projects. Individual non-federal awards may also include special terms and conditions that must be met before costs can be charged or reimbursed, which must also considered before allocating certain costs to the award.
- SCOPE - All elected officials, employees and volunteers acting on behalf of the City of Camas. As used throughout this document, “employee” means all persons included in this “scope”. Reference RCW 43.09.285, RCW 9A.56.280, and WAC 236-48-250-3.
- POLICY - It is the policy of the City of Camas to adhere to all applicable cost principles governing the use of federal and non-federal grants, both direct and indirect, charged to grant funded projects and that proposed and actual expenditures are consistent with the grant agreement and all applicable federal rules embodied in the Uniform Grant Guidance at 2 CFR 200 (UGG). Employees who are responsible for administering, expending, or monitoring grant funded programs should be well versed with the categories of costs that are generally allowable and unallowable.
- PRACTICE
All costs are expended using federal funds must meet the following general criteria laid forth in the UGG at 2 CFR 200, Subpart E:
- Be necessary and reasonable for the proper and efficient performance and administration of the grant program.
- Be allocable to federal awards under the provisions of the federal circular.
- Conform to any limitations or exclusions set forth in the principles, federal laws, terms and conditions of the federal award, or other governing regulations as to types or amounts of cost items.
- Be consistent with policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the City.
- Use of consistent treatment. A cost may not be assigned to a federal award as a direct cost and also be charged to a federal award as an indirect cost.
- Be determined in accordance with generally accepted accounting principles (GAAP) except as otherwise provided for in the federal circular.
- Not be included as a cost or used to meet cost sharing or matching requirements for any other federal award in either the current or prior period.
- Be net of all applicable credits.
- Be adequately documented.
The cost guidelines of the UGG must be considered any time federal award funds are to be expended. Federal regulations also require that any City policy related to specific types of expenditures must also be followed, for example travel and purchase card policies.
- Direct and Indirect Costs
Allowable and allocable costs must be appropriately classified as direct or indirect. In general, direct costs are those that can be identified specifically with a particular cost objective while indirect costs are those:
- Incurred for a common or joint purpose benefiting more than one cost objects,
- Not readily assignable to the cost objectives specifically benefited , without effort disproportionate to the results achieved
- Cost Transfers
Any costs charged to a federal or non-federal award that do not meet the allowable cost criteria must be removed from the award account and charged to an account that does not require adherence to federal UGG or other applicable guidelines.
Failure to adequately follow this policy and related procedures could result in questioned costs, audit findings, potential repayment of disallowed costs and discontinuation of funding. Employees are held responsible for compliance with UGG and must understand that severe penalties and funding disallowance could result from instances of non-compliance.
