Don’t Take OMB Guidance for Grant-ed: Federal Award Policy Now Available

The Uniform Grant Guidance (Guidance), issued through the federal Office of Management and Budget (OMB), establishes uniform administrative require-ments, cost principles, and audit requirements for federal awards to non-federal entities (e.g., schools). Given the waves of ESSER funding over the last few years, school officials have likely become familiar with federal procurement requirements. For Thrun Policy Service subscribers, federal procurement is governed by Policy 3301A.

In addition to purchasing requirements, the Guidance requires schools receiving federal funds to maintain a financial management system that includes:

• identification of all federal awards received;
• disclosure of the financial results of the award or program;
• records identifying the source and application of funds;
• control over and accountability for all funds, property, and other assets;
• a comparison of expenditures for each federal award;
• written procedures regarding federal payments; and
• written procedures for determining the allowability of costs.

Thrun Policy 3201 addresses those subjects by incorporating the Michigan Public School Accounting Manual (Bulletin 1022), which mandates compliance with applicable federal and state requirements. Additionally, the written procedures obligation does not expressly require board policies and arguably may be satisfied by having internal written controls. However, we are aware that an MDE auditor recently required a school to provide additional board policies related to cash management and allowable costs for its Great Start Readiness Program.

We continue to believe that Thrun Policy Service subscribers are not required to adopt additional policies to comply with the federal award requirements. Nevertheless, we recently prepared optional Policy 3201.1, which can be adopted as a supplement to Policy 3201. Policy 3201.1 details the Guidance’s requirements for federal payments and cost allowability and mandates compliance with the Guidance and the terms and conditions of applicable grants. Policy 3201.1 may be beneficial to schools that have received similar requests from auditors or who desire to have a more detailed policy.

For information about obtaining Policy 3201.1, email policy@thrunlaw.com.