Responsibility for Maintenance: Academic Affairs; Financial Services
I. Policy Statement
The organization will track and manage administrative expenditures related to federal grants when required with strict adherence to federal regulations. The administrative allowance will be used solely for allowable administrative costs as defined by the grant agreement, and all related expenditures will be documented and reported in a transparent and timely manner.
II. Reason for Policy
The purpose of this policy is to establish guidelines and procedures for tracking, managing, and reporting administrative expenditures related to federal grants when applicable. This policy ensures compliance with federal regulations, promotes financial accountability, and supports the effective management of grant funds.
III. Applicability of the Policy
This policy applies to all departments, divisions, and personnel involved in the administration and management of federal grants within the organization that requires tracking of administrative costs.
IV. Related Documents
K4: Post-Award Financial Management of Sponsored Projects
V. Contacts
Subject | Office Name | Title or Position | Telephone Number | Email/URL |
Administration and Compliance | Academic Affairs | Provost and Senior Vice President | (315) 498-2594 | |
Administration and Compliance | Financial Services | Senior Vice President and Chief Financial Officer | (315) 498-2668 |
VI. Definitions
- Administrative Costs (aka Administrative Expenditures): As stated in the CFR 683.215, Administrative Costs are “expenditures incurred by State and Local WDBs, Regions, direct grant recipients, including State grant recipients under subtitle B of title I of WIOA, and recipients of awards under subtitle D of title I, as well as local grant recipients, local grant subrecipients, local fiscal agents and one-stop operators that are associated with those specific functions identified in paragraph (b) of this section and which are not related to the direct provision of workforce investment services, including services to participants and employers. These costs can be both personnel and non-personnel and both direct and indirect.”
- Direct Costs: As stated in the CFR 200.413, Direct costs are “those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect (F&A) costs. See also § 200.405.”
- Indirect Costs: As stated in the CFR 200.414, Indirect Costs are “Facilities and administration classification. For major Institutions of Higher Education (IHE) and major nonprofit organizations, indirect (F&A) costs must be classified within two broad categories: “Facilities” and “Administration.” “Facilities” is defined as depreciation on buildings, equipment and capital improvement, interest on debt associated with certain buildings, equipment and capital improvements, and operations and maintenance expenses. “Administration” is defined as general administration and general expenses such as the director's office, accounting, personnel, and all other types of expenditures not listed specifically under one of the subcategories of “Facilities” (including cross allocations from other pools, where applicable). For nonprofit organizations, library expenses are included in the “Administration” category; for IHEs, they are included in the “Facilities” category. Major IHEs are defined as those required to use the Standard Format for Submission as noted in appendix III to this part, and Rate Determination for Institutions of Higher Education paragraph C. 11. Major nonprofit organizations are those which receive more than $10 million dollars in direct Federal funding.”
- Administrative Allowance: The portion of the federal grant that is allocated to cover administrative costs associated with managing the grant. In most cases it caps at 10%.
VII. Responsibilities
- Project Director: Responsible for overseeing the administration of the grant, ensuring that expenditures are in line with the grant agreement, and reporting any discrepancies.
- Finance Department: Responsible for recording and tracking all grant-related expenditures, including administrative costs, in the organization’s accounting system.
- Department Heads: Responsible for approving expenditures related to their respective departments and ensuring that all costs are necessary and reasonable.
VIII. Procedures
1. Budgeting and Planning
- Prior to the commencement of any grant-funded project, the Project Director will work with the Finance Department and Grants Department to verify if the award requires tracking of Administrative Costs and if there is a cap on the Administrative Costs.
- If the tracking is required, the Project Director will work with the Finance Department to determine how much of the Indirect Budget is Indirect Administrative Costs. They will also review other budgeted items as well as personnel to determine an estimate of Direct Administrative Costs.
- If there is a cap, the anticipated Administrative Costs will be compared to the overall award to ensure it is within the allowance. If it is not, a plan will be put into place regarding where the additional Administrative Costs will be charged (e.g., Operating Budget).
- The budget must be reviewed and approved by the appropriate authority within the organization before submission to the granting agency.
2. Recording Costs when Tracking is Required and/or there is an Allowance
- All administrative expenditures must be recorded in the organization’s accounting system using designated grant codes to ensure accurate tracking.
- Personnel responsible for initiating expenditures must complete a Purchase Request Form, which includes details of the expense, the grant code, and approval from the Department Head.
- The Finance Department will record all expenditures and ensure they are categorized correctly as either direct or indirect costs.
- The Finance Department will use completed Time & Efforts to reclass the quarterly portion of pay that the employee and project director indicated as Administrative Costs to the Administrative Costs Personnel lines.
3. Approval Process
- Administrative Costs must be approved by the Department Head or Grant Manager before they are incurred except for Administrative Costs related to Indirect Cost.
- The Finance Department must verify that the expenditure is within the approved budget and in compliance with the grant’s terms and conditions.
4. Monitoring and Reporting
- The Finance Department will generate financial reports that detail all administrative expenditures related to federal grants based on the grants reporting requirements (e.g., Monthly/quarterly) and review to ensure that expenditures align with the grant’s budget and objectives.
- The Project Director will review the grant expenditures via MyOCC on a regular basis to ensure that expenditures align with the grant’s budget and objectives.
- Any discrepancies or unallowable costs identified during the review must be addressed immediately, with corrective actions documented and implemented.
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Approved by the OCC Board of Trustees September 24, 2024