Track Sub-Recipients

Process Group/Policy Details

• Subject:  Cost Accounting

• Process Group: Track Sub-recipients

• Title of Policy: CA_ Track Sub-recipients

• Effective Date: 07/01/2014

• Approved/Revision Date: 07/01/2014

• Approved by: State Controller

Process Group Description

Track Sub-recipients

• This process group includes recording all payments to the appropriate grant and monitoring the remaining balance on the sub-award when the State is awarded grant funds (mostly from the Federal Government) and passes these funds to sub-recipients (pass through grants).

Rationale or background to policy:

• Pass through grants from the federal government and State-originated grants need to be awarded, budgeted (i.e., encumbered) and payments tracked for each sub-recipient for each grant award. With federal grants, a major program structure is already established. Sub-award payments must be encumbered with the POGG1 transaction and associated with the major program. Once the sub-award is encumbered, the payable and disbursement cycle operates to disburse the funds. Encumbering funds prevent over commitment of grant funds as sub awards.

Policy Statement:

CA.PO.05 CA_ Track Sub-recipients

• Departments shall enter encumbrance transactions for each sub-recipient award into CORE. The encumbrance transactions will have the account coding that will associate the encumbrance with the applicable major program. This will ensure that distribution dollars for each award are not over committed while allowing departments to track the award amount for each sub-recipient, the amount requested on each award and the amount remaining on each award.

Procedure(s):

CA.PR.05.1 Track Sub-recipients

• The basic steps for tracking a sub-recipient in CORE, are as follows:

  • Set up a grant in the Cost Accounting Module of CORE with a CAS transaction or table entry in accordance with the processes outlined in the Establishing Grants Policy/Procedure CA.PO.01.

  • Create an encumbrance transaction for each award to a sub-recipient. The encumbrance transaction will need to have the account coding to tie the encumbrance to the specific major program and program period. If the sub-recipient amount exceeds $100,000 then a CTGG1 (contract clone transaction) transaction will need to be used instead of the POGG1 transaction in accordance with fiscal rules. The encumbrance amount will reflect the amount awarded to a sub-recipient.

  • In addition, the encumbrance transaction should have an event type to reflect the type of grant that is being awarded.

    • PR05 Event Type should be used for an External Encumbrance that will be paid by CORE to an external Grant recipient.

    • PR06 Event Type should be used for internal grant recipients.

    • CG07 Event Type is used to reflect the cash match amount.

    • CG08 Event Type is used to reflect the in-kind match amount.

• Sub-recipients will submit bills to the grantee departments. The grantee department will generate an invoice which will reference the POGG1/CTGG1 encumbrance transaction. Per AP_PR.01, the two-way match process will run to generate a PRM or PRMI. Lastly, when the automated disbursement batch job is run, a disbursement instrument is generated either in the form of a check/warrant, EFT or internal transfer transactions.

• Distribution payments for sub-recipients will be submitted to accounting with the encumbrance transaction information. This will ensure that distribution payments to a sub-recipient are paid from the correct Major Program, and Program Period. The encumbrance will be reduced by the amount of the payment processed in CORE.

• The original amount encumbered less distribution payments will reflect the amount remaining on the award for the sub-recipient.

• Modifications to award amounts for a sub-recipient will require a modification of the encumbrance transaction to reflect the new award amount.

• Reporting on sub-recipient payments will be dictated by grant award requirements and are managed departmentally.

• Appropriate sub-recipient Object codes and Revenue Source Codes must be used as appropriate to ensure the financial statements are properly stated.