COOPERATIVE AGREEMENT FINANCIAL PROCEDURES

SUBJECTSSUBJECTS

• Obligation of Agreements• Cost Principles• Payment Procedures• Reconciliation• Final Close Out

OBLIGATION OF AGREEMENTSOBLIGATION OF AGREEMENTS

DOD FMR Volume 3 Chapter 8

ARMY – NGR 5-1/ANGI 63-101,

Chapter 12, and DFAS IN 37-1, Chapter 8

AIR – NGR 5-1/ANGI 63-101, Chapter 32

FULL VS INCREMENTAL FULL VS INCREMENTAL FUNDINGFUNDING

AIR - Fully Funded

ARMY – Fully Funded (Preferred)

OBLIGATION OF AGREEMENTS

• Under a Continuing Resolution Authority (CRA)

• Under a Separate State and Federal Fiscal Years

FUNDING “CASH” Quarterly Authority Annual Budget Authority Allotment Annual Funding Program Maximum Funding Limitation Estimated Cost

Federal Share (100%) $ 5,000,000.00 $ 5,000,000.00Federal Share (75%) $_______________________ $_______________________Federal Share (50%) $_______________________ $_______________________

Federal Total $_______________________ $______________________

State Share (50%) $________________________ $_______________________State Share (25%) $________________________ $_______________________

Program Income $_______________________

State Total $________________________ $_______________________

Grand Total $________________________ $_______________________

In-Kind Assistance.

COOPERATIVE AGREEMENT FUNDING

Program Manager/Air ComptrollerSubmits request to setup initial or modify CA

GORReviews request/Prepares CA or modification

State Comptrollerset up data in StateAccounting System

Federal Accounting ensures obligation

is posted in accountingsystem

FLOWCHART SHOWING OBLIGATIONS OF FLOWCHART SHOWING OBLIGATIONS OF COOPERATIVE AGREEMENTSCOOPERATIVE AGREEMENTS

USPFO and TAG Signature

GOR makes distributionFederal PM/RA sets up

informal ledger.Army PM

enters reservationin AFCOS

COST PRINCIPLESGENERAL POLICY

ALL COSTS FOR WHICH REIMBURSEMENT IS SOUGHT MUST BE SUPPORTED

AND DOCUMENTED.

COST REIMBURSEMENT RULES

INDIRECT COSTS

DIRECT COSTS– ALLOCABLE COSTS– ALLOWABLE COSTS– REASONABLE COSTS– AVAILABILITY OF FUNDS

INDIRECT COSTSINDIRECT COSTS

Incurred for a common or joint purpose benefiting more than one cost objective

Cost not readily assignable to the cost objectives specifically benefited

National Guard appropriated funds are prohibited from being used to reimburse indirect costs, except for fringe benefits, under a Grant or Cooperative Agreement.

DIRECT COSTSDIRECT COSTS

Costs that can be identified directly with the performance of a Cooperative Agreement

Must meet the “consistent treatment rule”

Must meet the cost reimbursement rules

ALLOCABLEALLOCABLE

Cost must be allocable to the Cooperative Agreement supported program, project or facility.

The cost of goods or services purchased by the state must be used to support the Cooperative Agreement supported program.

ALLOWABLE

The cost must be allowable under applicable laws, regulations and policy.

This includes Federal, DoD, Army, Air Force and National Guard policies concerning the use and management of federal funds.

REASONABLEREASONABLE

Cost must “not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.” OMB Circular A-87, Appendix A

AVAILABILITY OF FUNDS

Even of the State Military Department incurs costs that are authorized, these costs cannot be reimbursed unlesssufficient funds have been obligated to the Cooperative

Agreement.

BURDEN OF PROOFBURDEN OF PROOF

The “burden of proof” as to the allocability, allowability and reasonableness

of costs for eligibility for reimbursement rests with the State

FINAL AUTHORITY

The final authority in determine whether a particular costs meets the costs principle rest with the USPFO/GRANTS Officer.

COST PRINCIPLES

EXAMPLES

EXAMPLE #1

The State’s Military Department is billed for remote

connectivity to the Department of Administration. This service is needed to have access to the State

Accounting system and the internet.

DIRECT OR INDIRECT?

EXAMPLE #2

Payment of a license fee to certify a plumber who is employed under a Cooperative Agreement Appendix.

DIRECT OR INDIRECT?

EXAMPLE #3

All State Agencies, to include the Military Department, will be charged for each

funding line of any activity the State Treasurer

processes.

DIRECT OR INDIRECT?

EXAMPLE #4

The State Military Department is charged for

background checks on new State hires under

a Cooperative Agreement.

DIRECT OR INDIRECT?

EXAMPLE #5

Under the Single Audit Act” the State Military

Department contracted with a local CPA firm to conduct an audit of the Cooperative

Agreements. The State wishes to pass this cost on a pro rata basis to each Cooperative

Agreement.

DIRECT OR INDIRECT?

EXAMPLE #6

The State Military Department is assessed a yearly charge on the Department’s per cent of mail activity. This reimbursement helps offset the

operation of the State’s Central Mail Unit.

DIRECT OR INDIRECT?

EXAMPLE #7

Overtime pay for security guards.

DIRECT OR INDIRECT?

EXAMPLE #8

Payment to State employees who are covered under

a Cooperative Agreement for making a suggestion that saves funding for the Military Department.

DIRECT OR INDIRECT?

EXAMPLE #9

Provide training to State employees who are authorized and employed under a Cooperative

Agreement.

DIRECT OR INDIRECT?

Travel of State Employees

• State Employees Must Travel on State Orders

• Feds Reimburse the State up to the JFTR Allowances

• The Use of Reimbursable Individual Travel Orders is Prohibited

PAYMENT OPTIONS

• Reimbursement

• Advance Payment

PAYMENT REFERENCESPAYMENT REFERENCES

ARMY: NGR 5-1/ANGI 63-101, Chapter 12

AIR: NGR 5-1/ANGI 63-101, Chapter 32

REIMBURSEMENT REIMBURSEMENT PROCEDUREPROCEDURE

• State funds expended

• State submits for reimbursement

• Federal Program Manager/Resource Advisor must:

Verify documentation for accuracy Certify charges are valid and are authorized

for payment

• Forward to ARNG(Pay/Exam)ANG-FM

DFAS processes EFT payment to

State Military Department

State Military DepartmentContracts with Vendor

Pays VendorPrepares request for

Reimbursement and submits to Federal PM/RA

Federal PM/RA request supplies, etc

Federal PM/RA reviews request and certifies

Forward request to Federal comptroller

Federal comptroller ensures fundsare obligated to cover reimbursementReimbursement processed through

CAPS as EFT Payment

REIMBURSEMENT FLOWCHARTREIMBURSEMENT FLOWCHART

ADVANCE PAYMENTADVANCE PAYMENT

• DOD FMR Volume 12 Chapter 5

• DOD FMR Volume 10 Chapter 19

• NGR 5-1/ANGI 63-101 Chapter 12 (Army)

• NGR 5-1/ANGI 63-101 Chapter 32 (Air)

ADVANCE PAYMENTADVANCE PAYMENT

• State Comptroller may request an

advance

• Advance may be required by State statute

• Advance is based on cash flow and

reimbursement cycle time

HANDOUT

ADVANCE PAYMENTADVANCE PAYMENT

• USPFO APPROVE/DISAPPROVE

• ARMY - Copy furnished to ARNGRC NGB-ARC

• At year end outstanding Advances must be returned

• At anytime the Advance cannot exceed the unpaid Federal portion of the Cooperative Agreement

Payment to be made within 7 days if EDI & EFT usedDOD FMR Volume 10 Chapter 19, 190106

DOD FMR Volume 10 Chapter 7, 070102 G

Advance and Reimbursement Advance and Reimbursement PaymentsPayments

CASH MANAGEMENT IMPROVEMENT CASH MANAGEMENT IMPROVEMENT ACT (CMIA) 31 CFR 205ACT (CMIA) 31 CFR 205

• Federal agencies must make timely fund disbursements and grant awards to States.

• States and Federal agencies must minimize the time between the advance of Federal funds to States and the State presenting settlement documentation or check to close advance.

CASH MANAGEMENT IMPROVEMENT CASH MANAGEMENT IMPROVEMENT ACT (CMIA) 31 CFR 205ACT (CMIA) 31 CFR 205

• States are entitled to interest from the Federal Government for the time State funds are expended for

program purposes pending Federal disbursement. The Federal Government is entitled to interest from the

States for the time Federal funds are in State accounts (advance) pending the State presenting settlement

documentation or check to close advance.

Treasury may charge responsible Federal agencies if they are found to be flagrant or repeatedly incur Federal interest liabilities.

RECONCILIATIONRECONCILIATION

ARMY: DFAS IN 37-1, CHAPTER 27

AIR/ARMY: DoD FMR 7000-14R Vol 3 Chap 8

Tri-annual reviews

RECOMMENDED RECOMMENDED RECONCILIATIONRECONCILIATION

• Monthly

Status letter from State Comptroller

Federal Program Manager reconcile to include outstanding items

Accounting Branch reconcile obligations and reimbursements

RECOMMENDED RECONCILIATIONRECOMMENDED RECONCILIATION

• End of Year State Comptroller, Federal Program

Manager, Federal Accounting Branch meet

Identify shortage/excess funds

FINAL SETTLEMENT/CLOSEOUT OF COOPERATIVE

AGREEMENTS

ARMY - NGR 5-1/ANGI 63-101 CHAPTER 12

AIR - NGR 5-1/ANGI 63-101 CHAPTER 32

REFERENCESREFERENCES

MY CONCERN IS NOT NECESSARILY HOW LONG AN

AGREEMENT IS OPEN, BUT RATHER WE DON’T KNOW WHY THE AGREEMENT IS

OPEN

CLOSE OUT DEFINED

When the state has submitted their FINAL request for

reimbursement the Appendix is closed

THE USPFO IS REQUIRED TO CLOSE OUT THE AGREEMENTS

NLT 90 DAYS AFTER THE END OF THE FEDERAL FISCAL YEAR

QUESTION?

FROM THE STATES PERSPECTIVE,

WHAT IS REQUIRED IF THERE ARE PURCHASES THAT REMAIN

UNLIQUIDATED AND A REQUEST FOR RE-IMBURSEMENT TO THE GRANTS OFFICER

IS REQUIRED?

The State Resource Manager must submit a request for

extension.

• Federal Program Managers must have all requests for services, supplies, etc to the State Comptroller by established cutoff.

• NLT 30 Sep State Comptroller awards contracts.

REQUESTS FOR EXTENSION REQUESTS FOR EXTENSION MUST CONTAIN THE MUST CONTAIN THE

FOLLOWING ELEMENTSFOLLOWING ELEMENTS

• Detailed listing of unliquidated obligations.

• Anticipated date of liquidation.

GRANTS OFFICER GRANTS OFFICER APPROVES OR APPROVES OR

DISAPPROVES REQUESTDISAPPROVES REQUEST

(If approved, Cooperative Agreement remains open until

the last item is liquidated or until further extensions are granted)

State continues to submit Request for Extensions until all outstanding obligations

are liquidated.

FINAL CLOSEOUT

• Final Request for Reimbursement received from the State.

• Request from Federal Program Manager to modify agreement to actual amount of reimbursement.

• Final Modification completed by GOR.

COST NOT DISCLOSEDCOST NOT DISCLOSED

• State Comptroller submits separate request for reimbursement to Grants Officer.

• Grants Officer validates request and determines source of funding if approved.

MANAGEMENT CONTROLSMANAGEMENT CONTROLS

• Are the CA’s incrementally or fully funded and have appropriate obligations been made?

• Have the Program Manager, Federal Accounting and State Comptroller reconciled financial data quarterly?

• Have prior year cooperative agreements been closed out within the 90 day period, or request for extension granted?

• Ensure advance to State does not exceed the amount of the agreement and is based on a cash flow cycle.

MANAGEMENT CONTROLSMANAGEMENT CONTROLS

• Has advance been collected in a timely manner?

• Do requests for reimbursements meet the cost reimbursement rules of allowable, allocable, reasonable and availability of funds?

• Has the federal Program Manager or Assistant USPFO’s certified request for reimbursement prior to submitting to the Finance Office for payment?

QUESTIONSQUESTIONS