Clarify that program income must be used for the current costs of grant-funded project (see 2 CFR 200.305(b)(5)). If the amount of program income is more than can be used on the current grant, explain how these funds can be used based on the banked-income informal policy developed in October-December 2013 (75)
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1 Comment
Anonymous
Sep 16, 2015There was an agenda item added on for September 16 - " Requirements for Program Income Management". I think the idea behind the proposal was to make sure that the states had written procedures for the handling of Program Income. I tend to agree with Brad that we should fully evaluate the need for a regulation before considering adding it 'just because it wouldn't hurt'. To decide whether or not this is needed probably requires someone to look at history, as Brad said, and evaluate the frequency of findings, and the distribution of those findings ( a very few recipients, or a broad range of recipients). Ultimately the analysis has to decide if there is a 'common cause' that needs to be addressed with a regulatory solution, or a small set of deviations that should be corrected directly with the recipients that are failing to exercise their internal controls.
I'd bet dollars to donuts that almost every state recipient has a set of existing policies and procedures (internal controls) for handling cash receipts and accounts receivable. I'd be willing to bet that most state recipients are adept at managing multiple statutorily established 'funds', and have robust state and agency procedures for handling, documenting, and depositing those monies. Is there value added in telling the recipient they must have a policy or a procedure, when we haven't researched to determine if there are already adequate (state) requirements in place.
I never met an auditor that didn't recommend that 'you need more written policies'. At some point, as the number of policies and procedures grows, the sheer volume of written policies can make it impossible to avoid tripping over something and committing an error. We don't want to set the recipient up to stumble.