Federal Funds

Originally Published: August 24, 2021

As you enter into new federally funded contracts this year, you need to know if your contractor has been banned from doing business with the federal government. Commonly referred to as suspension and debarment, these requirements are fairly easy to comply with, yet they are one of SAO's most common audit findings. We first ran this article in August 2021, and due to its importance, we're republishing it as a reminder.

With the recent and continued influx of federal funding, you might make more subawards than in the past. (A subward is providing your grant funds to other agencies to carry out a portion of the grant program.) Passing along your money to others doesn't relieve you of grant compliance requirements – it actually adds responsibilities for you to monitor your subgrantees (referred to as “subrecipient monitoring”). Since this is a frequent area reviewed in our audits, here are a few tips and resources to keep in mind:

What's the best advice we can give you regarding use of and documentation for CARES Act funding? Document, document, and document some more. These funds should be treated just like any other federal award, which means their use should comply with the terms and conditions of the award and the Uniform Guidance. The federal Office of Management and Budget (OMB) provided some additional guidance and some exemptions to Uniform Guidance in its memorandums. OMB has stressed the requirement to maintain appropriate records to support costs charged to federal awards.

At least initially, the general fund typically bears all general operating costs, such as for information technology, human resources, accounting, and facilities maintenance. But some local governments develop a plan to share these overhead costs with other funds that jointly benefit from the services provided. A cost allocation plan is optional and requires some work to set up and carry out, but it can take some pressure off of the general fund. This blog post will share some helpful tips and resources should you decide to go that route.

The Federal Emergency Management Agency's (FEMA) Public Assistance Program was activated March 13, 2020, when President Trump declared the ongoing coronavirus pandemic an emergency under the Stafford Act. With recent passage of the CARES Act, the program has received an influx of resources available to state and local governments.

Based on our years of experience auditing FEMA public assistance grants and FEMA's current guidance, we have a few suggestions and resources for you:

Document your expenses

Brand Name Specification occurs when a government determines a specific brand of equipment is necessary to meet their operational needs.