Jerome Joint School District No. 261

FINANCIAL MANAGEMENT 7218

Federal Grant Financial Management System

The District maintains a proper financial management system in order to receive both direct and state-

administered grants and to expend funds associated with a grant award. Certain fiscal controls and procedures

must be in place to ensure that all financial management system requirements are met.

Idaho Financial Reporting Management System (IFARMS)

IFARMS provides the basis for complete financial and cost accounting, for the development of program budgets,

and for the preparation of periodic financial reports. The uniformity of the system enables the District to fulfill

state requirements and provides the flexibility to obtain program and account detail to meet management needs.

Financial Management Standards

The standards for financial management systems are found at 2 C.F.R. § 200.302. The required standards include:

1. Identification: The District shall identify, in its accounts, all federal awards received and expended and the

federal programs under which they were received. Federal program and award identification shall include

the information described below under “Overview of the Financial Management/AccountingSystem.”

2. Financial Reporting: Accurate, current, and complete disclosure of the financial results of each federal

award or program will be made in accordance with the financial reporting requirements set forth in the

Education Department General Administrative Regulations (EDGAR).

3. Accounting Records: The District shall maintain records that adequately identify the source and

application of funds provided for federally-assisted activities. These records will contain information

pertaining to grant or subgrant awards, authorizations, obligations, unobligated balances, assets,

expenditures, income and interest, and be supported by source documentation.

4. Internal Controls: Effective control and accountability shall be maintained for all funds, real and personal

property, and other assets. The District shall adequately safeguard all such property and shall assure that

it is used solely for authorized purposes.

“Internal controls” are tools to help program and financial managers achieve results and safeguard the

integrity of their program. Internal controls should be designed to provide reasonable assurance that the

following objectives are achieved:

A. Effectiveness and efficiency of operations;

B. Adequate safeguarding of property;

C. Assurance property and money is spent in accordance with grant program and to further the

selected objectives; and

D. Compliance with applicable laws and regulations.

5. Budget Control: Actual expenditures or outlays shall be compared with budgeted amounts for each

federal award.

6. Cash Management: The District shall maintain written procedures to implement the cash management

requirements found in EDGAR. See Policy7450.

7. Allowable Costs: The District shall maintain written procedures for determining allowability of costs in

accordance with EDGAR. See Policy 7320 and Procedure 7320P.

Overview of the Financial Management/Accounting System

The District accounting system is established to present, with full disclosure, the financial position and results of

the financial operations of the District in conformity with generally accepted accounting principles. The accounting

system currently used is Skyward. The system is in compliance with IFARMS, as required by Idaho statute. IFARMS

shall be used as the basis for developing program budgets and the preparation of periodic financial reports. The

District Business Manager shall be responsible for managing budgets and accounts payable. As required by 34 CFR 200.302, the District shall maintain on file award letters that include Catalog of Federal Domestic Assistance (CFDA) titles and numbers, federal award identification numbers and years, names of the federal awarding agencies, and the name of the State Department of Education (the pass-through entity), for each federal award. The funds are given unique identification numbers in the IFARMS system.

The Business Manager shall be responsible for preparing financial reports, as required for local, state, and federal

agencies, for review and approval by the Board of Trustees. The financial reports shall reflect the financial activity

and status of the District. These reports shall include monthly and cumulative expenditures, program budgets, and

balances remaining.

Budgeting

The Planning Phase: Meetings and Discussions: Before Receiving the Grant Award Notice (GAN): The

Superintendent, assisted by the Business Manager, shall be responsible for initial federal grant budget

development. Initial budget development shall be based upon estimates of federal program award amounts as

provided by the State Department of Education, as well as input from program and administrative staff with

respect to individual program staff needs, number and assignments of paraprofessionals relative to program

allocations, and need for instructional supplies and equipment. The primary considerations of initial budget

development shall be the educational needs of students and the availability of existing District resources for

meeting these needs.

Budgets shall be prepared and presented in a format that clearly identifies revenue sources and amounts and

budgeted expenditures, in accordance with IFARMS accounting codes, and shall be open for public inspection.

The Superintendent shall present the proposed budget to the Board for final approval of the budget and the

policies reflected therein, such as proposed changes or additions to instructional programs and proposed salary

schedules. Consideration of the proposed budget shall take place in an open meeting with opportunity for public

comment. The approved budget shall be included in the minutes of the Board as documentation of its acceptance

and approval.

After Receiving the GAN: If the Superintendent determines that final program allocations necessitate revisions to

program budgets, he or she, assisted by the Business Manager with input from federal programs staff, shall

discuss, review, and propose budget revisions. If proposed revisions require amendment proposals, the

Superintendent will follow protocols of the amendment process.

Amending the Budget: The Superintendent shall review and approve any necessary budget amendments and shall

submit those amendments to the Board at least seven days in advance of the meeting at which the amendment

will be considered. The Board shall have final approval of the amended budget and consideration of the proposed

budget shall take place in an open meeting with opportunity for public comment. The approved amended budget

shall be included in the minutes of the Board of Trustees as documentation of its acceptance and approval.

Budget Control: The Business Manager shall prepare monthly financial reports that monitor budget performance

by comparing actual to budgeted revenues and expenditures. Monthly financial reports indicate budgeted

amounts, monthly expenditures, year-to-date-expenditures and percentage of budget spent. The Superintendent

shall review these reports for the preceding month prior to presentation to the Board.

Accounting Records

The Business Manager shall be responsible for the maintenance of accounting records. Electronic accounting

records are maintained in the Skyward, and paper records are maintained on file in the District office. All

accounting records shall be reviewed by the District Superintendent and, where appropriate and required, the

Board. The District chart of accounts and financial reports shall be established and maintained in accordance with

Generally Accepted Accounting Principles (GAAP) and IFARMS, as required by Idaho Code. Accounting records shall be available for public inspection at any time.

Spending Grant Funds

In determining what items will be included in individual program budgets, the Business Manager and the

Superintendent will follow the federal cost principles and individual program statutes and regulations, as the basis

for determining whether individual expenditures are allowable.

While developing and reviewing the grant budget, the District will keep in mind the difference between direct

costs and indirect costs.

Direct and Indirect Costs:

1. Determining Whether a Cost is Direct or Indirect: 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.

Indirect costs are those that have been incurred for a common or joint purpose benefiting more than one cost

objective, and not readily assignable to the cost objectives specifically benefitted, without effort

disproportionate to the results achieved.

Costs incurred for the same purpose in like circumstances shall be treated consistently as either direct or

indirect costs.

Identification with the federal award rather than the nature of the goods and services involved is the

determining factor in distinguishing direct from indirect costs of Federal awards. Typical costs charged directly to a Federal award are the compensation of employees who work on that award, their related fringe benefit costs, the costs of materials, and other items of expense incurred for the Federal award.

The salaries of administrative and clerical staff shall normally be treated as indirect costs. Direct charging of

these costs may be appropriate only if all of the following conditions are met:

A. Administrative or clerical services are integral to a project or activity;

B. Individuals involved can be specifically identified with the project or activity;

C. Such costs are explicitly included in the budget or have the prior written approval of the federal

awarding agency; and

D. The costs are not also recovered as indirect costs.

2. Indirect Cost Rate: It is at the discretion of the Jerome Jt. School District to use the indirect cost rate. It is the

normal policy of the District not to take indirect costs on federal awards. If the District elects to take indirect

costs, it shall follow the procedures for calculating the indirect cost rate prescribed by the State Department of

Education and apply the policies and procedures outlined in the federal regulations as described below.

3. Applying the Indirect Cost Rate: Once the District has an approved indirect cost rate, the percentage is

multiplied against the actual direct costs(excluding distorting items such as equipment, contracts in excess of

$30,000, pass-through funds, etc.) incurred under a particular grant to produce the dollar amount of indirect

costs allowable to that award.

Once the District applies the approved rate, the funds that may be claimed for indirect costs have no federal

accountability and may be used as if they were non-federal funds. For direct grants, reimbursement of indirect

costs is subject to the availability of funds and statutory or administrative restrictions.

Where a federal program has a specific cap on the percentage of administrative costs that may be charged to

a grant, that cap must include all direct administrative charges as well as any recovered indirect charges.

Cross Reference: 7230 Financial Reporting and Audits

Legal Reference: 2 C.F.R § 200.300 et. seq. Post Federal Award Requirements

2 C.F.R. § 200.56 Indirect (Facilities & Administrative (F&A)) Costs

2 C.F.R. § 200.413 Direct Costs

34 C.F.R. § 75.564 Reimbursement of Indirect Costs

34 C.F.R. § 76.569 Using the Restricted Indirect Cost Rate

Policy History:

Adopted on: 05/28/2019

Revised on: 05/24/2022