Program in compliance with established policies and procedures published by the U.S. Department of Justice. In order to accomplish this objective, the Council is required to provide whatever technical assistance to subgrantees that is deemed necessary and appropriate. We request that each subgrantee hold us to this requirement. In turn, the Council requests that each subgrantee abide by the administrative and financial requirements outlined in these guidelines. Only through a joint and coordinated effort can the successful administration of this award Program occur. please direct all questions concerning the contents of these guidelines to either John C. Cook, Program Director/Grants Administration, or Joseph W. Hood 111, Senior Auditor, at (404) 559-4949. In closing, I would like to personally thank each subgrantee for their tireless efforts in eradicating the effects that drugs and violent crime impose upon our society. Sincerely, TABLE OF CONTENTS INTRODUCTION PART I A D m T R A T n T E REQUIREMENTS Section I Conditions of Award and Acceptance A. Award Document B. Acceptance Procedures C. Special Cancellation Conditions for Subgrants 1. Commencement Within 60 Days 2. Operational Within 90 Days D. Certifications and Disclosures 1. s on-supplanting certification 2. Certification of Matching Funds a. Source and Type of Funds b. Timing of Matching Contributions c. Records for Match 3. Statement of Property Disposition 4 . Certification regarding Debarment, suspension, Ineligibility, and Voluntary Exclusion Background Government-Wide Common Rule Causes for Debarment and Suspension r Applicability Compliance Non-Compliance 5. Disclosure of Lobbying Activities - Section I1 Special Conditions for "HIGH RISK" Subgrantees Section III Financial Administration Standards for Financial Management System 1. Financial Reporting 2. Accounting Records 3. Internal Control 4. Budget Control 5. Allowable Cost 6. Source Documentation Section IV Program Income *,Asset Seizures and Forfeitures Section V Property Policies A. Acquisition of Property B. Management Requirements C. Disposition Section VI Procurement Standards A. Policies and Principles 1. Equal Treatment 2. Maximum Open and Free Competition 3. Arms-length Business Relationships 4. Remedies 5. Socioeconomic Objectives B. Competition Section VII Retention and Access Requirement.for Records A. Length of Retention Period B. Access to Records C. Enforcement D. Termination for Convenience E. Closeout F. Later Disallowances and Adjustments G. Collection of Amounts Due PART II ACCOUNTING FOR THE SUBGRANT Section I Elements of the Accounting System Section 11 Accounting Systems Section Internal Controls Section IV Management System Section V Budget and Accounting Section VI Analysis by the Subgrantee Section VZI Revisions and Access to Data Section Vm Personnel and Compensation Section M Safeguarding of Assets Section I Internal Control Objectives A. Validation B. Accuracy C. Completeness D. Maintenance E. Physical Security F. Implementation of Objectives Determination Of Validity Control of Documents Check for Accuracy Record in Appropriate Journals Check for Completeness Investigation of Unprocessed Transactions Segregation of Duties Performance of Monthly Reconciliations Timely Investigation of the Differences Safeguarding of All Accounting Records Section I1 Controls in an EDP Environment A. Application Controls 1. Completeness of Input 2. Accuracy of Input 3. Authorization of Transactions 4. Handling of Rejected Transactions 5 . Completeness and Accuracy of Computer -Generated Data/Transactions 6. Completeness and Accuracy of Updating B. System/Program Implementation 1. Management of System Development 2. System Design 3. Vendor-Supplied Packages 4 . System and Programming Standards 5. Testing 6. Documentation 7. Standing Data Conversion 8. Transaction Data Conversion 9. Set-Up New Data C. Program Maintenance 1. Internally Maintained Applications 2. Vendor Maintained Packages 3. Cataloging D. Computer Operations 1. Scheduling 2. Job Set-Up and Execution 3. Use of Correct Data Files 4. Operator Actions 5 . Activity Logs 6. Back-Up and Recovery E. Security 1. Overall System Access Controls 2. Security Policy 3. Security Administration 4 . Dial-Up Access 5. Physical Access 6. Custody of Data and Programs Stored Off-Line 7. Utilities and High-Level Programming Languages 8. Bypassing Normal Access Controls 9. output Section III Cash A. Cash Receipts 1. Opening the Mail 2. Endorsement of Checks 3. Bank Deposits 4 . Reconciliations of CashIChecks Received to Bank Deposit B. Disbursements from Bank Accounts 1. Preparing checks 2. Check Signing 3. Disbursement of Checks 4 . Cancel Supporting Documentation 5. Maintenance of Check Control Log C. Imprest And Similar Funds 1. Disbursement of Funds 2. Summarize Disbursements 3. Reimbursement of Imprest Funds 4 . Payment of Payroll Through Imprest Funds D. Bank Reconciliations 1. Preparing Bank Reconciliations 2. Determination of Reconciling Items 3. Review of Bank Reconciliation PART IV COST PRINCIPLES Section I Basic Guidelines A. Factors Affecting Allowability of Costs B. Reasonable Costs C. Allocable Costs D. Applicable Credits E. Composition of Cost F. Direct Costs G. Indirect Costs Section 11 Allowable and Unallowable Costs Salaries and Wages Fringe Benefits Section III Indirect Cost Rate A. How to Obtain an Indirect Cost Rate B. The Cognizant Agency PART V BUDGETING & REIMBURS33MENTS Section I Budgeting A. The Appropriation or Allocation Process B. Computing the Subgrant Budget C. Budget Revision Procedures D. Matching E. Extending the Grant Period Section 11 Preparing the Reimbursement A. Personnel Acceptable Documentation B. Equipment Acceptable Documentation C. Supplies Acceptable Documentation D. Travel Acceptable Documentation E. Printing Acceptable Documentation F. Other Acceptable Documentation PART VI AUDIT REQUlREMENTS Section I Single Audit Act of 1984 and OMB Circular A-128 Introduction Section IX Features of the Single Audit Act Section Ill Features of Office of Management and Budget Circular A-128 Section IV , The Basic Single Audit Requirements Section V The Purpose of Single Audit Section VI Government Auditing Standards Types of Audits Section MI The OMB Compliance Supplement Section VIII Failure to Have a Required Audit Section M Reporting CFDA Number for Subgrants Section X Recordkeeping Section XI Audit Follow-Up PARTVII A'ITACEIMENTS - Attachment 1 Glossary - Attachment 2 References