Establishing Grants and Projects (CA100)

Process Group/Policy Details

• Subject:  Cost Accounting

• Process Group: Establish Grants and Projects

• Title of Policy: Establishing Grants and Projects (CA100)

• Effective Date: 07/01/2014

• Approved/Revision Date: 07/01/2014

• Approved by: State Controller

Process Group Description 

Establish Grants or Projects

• This process group includes grant and project set up, which allows for tracking and timely reimbursement of grant and project costs.

Rationale or background to policy:

• CORE provides the ability to track and monitor grants and project costs. By utilizing Cost Accounting specific elements in addition to the chart of account elements, departments are able to maintain control at both the legal level of compliance and at the grant and/or project level.

Policy Statement:

CA.PO.01 CA_Establish Grants or Projects

• Departments shall use the Cost Accounting to record and report on all federal grants. Optionally, departments can utilize CORE cost accounting for non-federal grant and/or project costs and reporting. Grants and projects will be established at the Major Program level. At least one Program is required per Major Program and departments may choose to use multiple programs to segregate types of service, reporting requirements or funding. Funding profiles will tie to a reimbursable Major Program and can cross multiple Programs. Phases may be used to further define a grant or to represent work steps for a project. Task Orders can be used to further break down Phases if needed.

Procedure(s):

CA.PR.01.1 Establish Grants

• Departments shall establish Grants at the Major Program level using the CAS (Cost Accounting Setup) transaction or through direct table input.

  • • Major Program: The grant is identified by a Major Program code. Smart-coding the

    • Major Program and related programs and appropriations is optional and may be beneficial, but not required for the operation of CORE.

    • Major Program Class and Category are central rollups and will be used to assist with federal grant reporting. These fields are required for grants. Non-federal grants and grants without a CFDA number are set up at the Major Program level using specific

    • Major Program Class and Category rollup values.

      • For federal grants: The prefix of the CFDA number (to the left of the decimal) is selected on the Major Program Class field and the suffix of the CFDA number (to the right of the decimal) in the Major Program Category field.

        • Example CFDA number 93.043 would be Major Program Class 93BX, where B is a variation of the federal agency and X is a placeholder. The Major Program Category is 0432 where 2 defines which agency/program applies when duplicate suffixes occur across federal agencies.

      • For federal grants without a CFDA number: The Major Program Class is the federal agency by code and the Major Program Class is 0000.

        • Example: Major Program Class 10AX and Major Program Category 0000. 

        • Grants with a Major Program Category of 0000 will use the Major Program Description field to reference the program as provided on the grant award.

      • For non-federal grants: The Major Program Class is XXXX and the Major Program Category is XXXX.

• In CORE there is a one-to-one relationship between CFDA number and Major Program. If a particular grant has multiple CFDA numbers, agencies will use the departmental Major Program rollups Group and Type to tie multiple Major Programs together.

• Reimbursement Status: The Reimbursement Status on the Major Program table is a required “Yes/No” field to permit calculation and automated reimbursement of grant expenditures. For more detail on automated reimbursements see CA.PR.04.2.

• A Reimbursable Budget must be selected for grants that are set up as reimbursable on the Major Program table. The reimbursable budget structure for grants is Budget 39 and is created with a BGPDR transaction.

• An expense and revenue budget should be created for both reimbursable and non-reimbursable grants. This will be budget structure 94 and is created with a BGG94 transaction.

• Program: Departments will setup Programs that may be related to the type of services, activities, reporting requirements, or funding. For example, Programs within a Major Program might include administration, operations or other activities where segregation of those costs is desirable. Each Major Program must have at least one related Program and can have many Program codes. However, each Program can be tied to only one Major Program.

  • • During setup, also consider other defined departmental chart of account elements (Activity, Location, Departmental Object, etc.,) to meet the agency’s configuration needs.

• Phases: Phases may be used to further sub-divide Programs. Phases may be sequential in nature or may overlap one another. Examples of Phases may include such activities as planning, research, execution, evaluation, etc. The use of Phases is optional.

• Program Period: The Program Period is the fiscal period of the Major Program's primary funding source. Proper cost reporting for many Programs requires tracking a time period that may be different from the state fiscal year. This needs to exist for multi-year grants, grants that run on a different fiscal year cycle (for example, a federal fiscal year) or grants with some other start and end date. Major Programs (grants) that are renewed each year will have multiple Program Periods for each additional grant award and period.

  • • • Program Periods may not overlap during setup. On a transaction the Program Period is determined by a soft inference based on the transaction date (or the disbursement date depending on the reporting basis of the Major Program), and can be overridden by selecting the desired Program Period manually at the time the transaction is processed.

      • Stage Profiles can define distinct time periods for each stage of the profile.  

  • Funding Profiles: Funding Profiles will tie directly to the Major Program and can cross multiple Programs within the Major Program. Reimbursement rates will be set up in the Funding Lines for automatic reimbursement in CORE. The Funding Priorities and Funding Lines are used to establish different funding sources, different reimbursement rates and the order in which funding sources are applied.

    • • Matching Funding priorities (10, 10, 10) will result in simultaneous use of the associated funding lines. Sequential funding priorities (10, 20, 30) will deplete the funding lines in order.

      • Funding lines with the same priority must have reimbursement rates that sum to 100%.

      • The Funding Profile is required for the automated reimbursement process.

• Funding Profile Inference 1 – 6: These 6 tables use various combinations of chart of account codes to infer Funding Profiles onto Major Program spending transactions. Users cannot enter Funding Profiles directly on transactions hence the need for inferences.

CA.PR.01.2 Establish Projects

• The Cost Accounting module can be used to track project costs. Projects will be established at the Major Program level similar to the grant set up discussed above.

•  For the central rollups, the Major Program Class is “PROJ” and the Major Program Category is “PROJ”.

•  When projects are not reimbursable, set the Reimbursement Status is to “N”, and Funding Profiles are not used. Program Period codes are generally not used for tracking project spending.

  • • A Reimbursable Budget must be selected for projects that are set up as reimbursable on the Major Program table. The reimbursable budget structure for projects is Budget 40.

    • An expense and revenue budget should be created for reimbursable and non-reimbursable projects. This will be budget structure 94.

•  Phases: Phases may be used to further sub-divide Programs. Phases may be sequential in nature or may overlap one another. Examples of Phases may include such activities as planning, research, execution, evaluation, etc. The use of Phases is optional.

  • • Departments can optionally set up Task Orders to further define and report activities, work orders, materials, or equipment within the Phase element.

• Fixed Asset Component: For construction in progress (CIP) or capital projects, the set up for a project will require completion of the fixed asset information tab on the Program table. Additionally, if phases are used, the fixed asset construction program flag must be checked on the Program Phase table.

  • • Reference AM_PO.03 for more information regarding generation of the fixed asset transaction for these associated costs and attaching the fixed asset to the Program and/or Program phase.

CA.PR.01.3 Establish Overhead Rates for charges to Grants or Projects

• When there are charges for overhead, this is established on the Major Program table. The Overhead Eligible checkbox indicates that the Major Program is or is not eligible for accumulating overhead costs on charges.

• A default percentage is entered for a Major Program directly on the Major Program table.

• A single set of accounting codes can be entered in the Overhead section of the Majo Program table to override and redirect the codes from the direct costs. This can b useful if a special account code should be used to track these postings (such as a ADMN Program).

• Exception rates can be entered on an Overhead Exception (OVDRTEXP) table and can be applied to direct spending by Program, Program Period, Activity, Object, or a combination of those elements. If no rate is specified for the Major Program in the Overhead Rate Exception table, CORE will then look to apply the default overhead rate.

• When the Overhead Rate Process is run, it will pick up the overhead costs and ONLY generate a report (by DE located on BATJOBS under the Catalog Name Overhead Rate. 

• The Overhead Rate job generates a report each Wednesday evening.

•  The Cost Allocation “Charge Back” process should be used for indirect recovery that should post as an expenditure and revenue and be reflected against the general accounting journal and reflected in the budget queries. Allocations can be run as needed. Please see the Cost Allocation Policy and Procedure for more details on the Charge Back method.