Agency & Board Responsibilities

This chapter is currently under construction.

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Internal Controls

2.1 General

Effective control and accountability must be maintained for all cash, real and personal property, and other assets funded by public funds.

2.2 Components of Internal Control

Internal controls shall be designed, implemented and evaluated based on the ability of the controls to provide reasonable assurance for compliance with applicable requirements in a cost effective manner.

2.3 Fraud

Fraud, program abuse [including waste], possible illegal expenditures, unlawful activity, violations of law, Agency rules, or policies and procedures occurring under any grant or program contract awarded by the Agency are prohibited. Suspicion of such misuse must be reported to the Agency’s Office of Investigations no later than five business days from the date of discovery of such act.

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Insurance

3.1 Fidelity Bonds

A fidelity bond, or other method to secure funds against loss must be in place, and submitted to the Agency as required by this Section.

3.2 Insurance

Insurance coverage must comply with applicable federal, state and agency requirements.

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Cost Sharing & Matching

This chapter is currently under construction.

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Program Income

5.1 General

Gross income that is directly generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period is program income, and shall be disbursed before requesting additional cash payments for the same program.

5.2 Uses

Program income must be accounted for and reported in a manner that is consistent with applicable administrative and program requirements.

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Budget

6.1 Budget Development

Each Contractor must develop a budget that will enable it to comply with uniform administrative requirements to compare actual expenditures or outlays with budgeted amounts for each grant or subgrant.

6.2 Submission Requirements

A budget shall be submitted to the Agency within prescribed timeframes and in the prescribed formats to satisfy federal or state law, or contractual requirements.

6.3 Comparisons and Projections

Actual expenditures or outlays must be compared with budgeted amounts for each grant or sub grant.

6.4 Budget Changes and Revisions

Written Agency approval must be obtained prior to making budget changes or revisions that meet applicable thresholds.

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Cash Management

This chapter is currently under construction.

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Cost Principles

8.1 General Allowability Criteria

In order to be allowable under a federal or state award, a cost must meet the general allowability criteria established by the Office of Management and Budget Circulars, and/or the Uniform Grant Management Standards, as applicable.

8.2 Treatment of Costs

Costs must be consistently treated as either a direct or indirect cost. A cost may not be allocated to a federal or state award as an indirect cost if any other cost incurred for the same purpose, in like circumstances, has been charged to a federal or state award as a direct cost.

8.3 Selected Items of Cost

Determination of allowability for a particular item of cost, whether direct or indirect in nature, must be based on the general allowability criteria in Section 8.1 and treatment or standards for similar or related items of cost as established by the Office of Management and Budget and/or the Uniform Grant Management Standards.

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Travel

This chapter is currently under construction.

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Personnel

10.1 Personnel Policies

Written personnel policies and procedures must be developed, maintained and distributed to each employee.

10.2 Personnel Compensation

Payrolls must be based on time and attendance records that reflect the actual and total activity for which an employee is compensated. Such activities must be documented and maintained in written policies and procedures.

10.3 State Classification Salary System

Salary expenditures of a council of governments, regional planning commission, local workforce development board, or mental health-mental retardation community center must conform to requirements applicable to the state salary classification requirements.

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Cost Allocation & Resource Sharing

11.1 Cost Allocation Plan

The cost allocation plan must be adequately documented and must include all costs that will be claimed as allocated costs under federal or state awards.

11.2 Allocation Methodology

The allocation methodology must be described in the cost allocation plan and be consistent with applicable cost principles and administrative requirements.

11.3 Cost Pools

Cost pools shall only contain costs that are consistently treated as indirect (or are shared) costs and which jointly benefit two or more of the same programs or other cost objectives to the same degree.

11.4 Allocation (Distribution) Bases

Cost pools must be allocated to benefiting cost objectives using an allowable basis that results in an equitable distribution of costs relative to benefits derived.

11.5 Adjustments

Adjustments to allocated and billed services under a negotiated agreement must be performed in accordance with applicable requirements.

11.6 Resource Sharing

Local Workforce Development Boards that incorporate resource sharing as a method for One-Stop partners to pay their allocable share of costs must do so in accordance with applicable requirements.

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Indirect Cost Rates

12.1 Simplified Method

The simplified method is appropriate when an entity has only one major function, where its level of federal funding is relatively small, or where all its major functions benefit from its indirect costs to approximately the same degree.

12.2 Multiple Rate Method

The multiple rate method is appropriate when an entity has several major functions that benefit from its indirect costs in varying degrees.

12.3 Direct Allocation Method

The direct allocation method is appropriate for use by non-profit organizations provided that each indirect cost is prorated using a base that accurately measures the benefits provided to each award or other activity.

12.4 Special Indirect Cost Rates

It is appropriate to make provisions for a separate indirect cost rate that is only applicable to a specific award when that particular award is carried out in an environment that appears to generate a significantly different level of indirect costs.

12.5 Negotiation

All entities desiring to claim indirect costs under federal or state awards using an indirect cost rate must either have an approved indirect cost rate, or maintain the indirect cost proposal and supporting documentation for review, as required.

12.6 Documentation

Adequate documentation, including the indirect cost rate proposal, subsidiary worksheets, and other relevant data must be maintained and made available upon request.

12.7 Refunds

Unallowable and over recovered indirect costs must be refunded or returned to the Agency through an indirect cost rate adjustment.

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Property

13.1 Vesting of Title

Title to property will vest in the Contractor that acquired the property, subject to the Contractor’s compliance with applicable property requirements.

13.2 Property Control Officer

A property control officer must be designated when specifically required by contract, program or administrative requirement. It is recommended to all other Contractors.

13.3 Acquisition and Use of Real Property

Real property shall only be acquired when allowable and with the prior written approval of the Agency. If acquired, real property must be used for the originally authorized purpose as long as needed.

13.4 Disposition of Real Property

When no longer needed, real property must be disposed of in accordance with written instructions that have been requested from and provided by the Agency.

13.5 Acquisition and Use of Equipment

Equipment shall only be acquired with the prior approval of the Agency. Equipment acquired with federal or state funds must be used for an authorized purpose as long as needed, in accordance with applicable administrative requirements.

13.6 Property Records

Property records that meet or exceed the minimum standards established by applicable administrative requirements must be maintained for all equipment that was acquired in whole or in part with federal or state funds until such time as transfer, replacement or disposal occurs.

13.7 Physical Inventory

An annual physical inventory must be conducted and reconciled with property records for equipment that was purchased in whole or in part with federal or state funds.

13.8 Adequate Safeguards

Adequate controls must be implemented to safeguard equipment that was purchased in whole or in part with federal or state funds until such time as disposition occurs.

13.9 Equipment Maintenance

Adequate maintenance procedures must be developed to keep equipment that was purchased in whole or in part with federal or state funds in good condition until disposition occurs.

13.10 Sales Procedures

Proper sales procedures must be developed when the sale of equipment that was purchased in full or in part with federal or state funds is authorized or required.

13.11 Disposition of Equipment < $5,000

When no longer needed, equipment that was purchased using federal or state funds and that has a current per unit fair market value less than $5,000 may be retained, sold, or otherwise disposed of without further compensation to the funding source.

13.12 Physical Inventory Disposition of Equipment $5,000 or More

When no longer needed, equipment that was purchased using federal or state funds and that has a current per unit fair market value of $5,000 or more must be disposed of in accordance with written instructions requested from and provided by the Agency.

13.13 Supplies

Supplies purchased with federal or state funds may be acquired and disposed of without prior written approval from the Agency; however, any residual inventory of unused supplies at the end of an award must be disposed of as appropriate for the aggregate fair market value of the property.

13.14 Intangible Property

Intangible property that was acquired under a federally sponsored award must be made available to the federal sponsoring agency, and parties authorized by that agency.

13.15 Federally-Owned Property

Federally-owned property must be managed and disposed of in accordance with applicable administrative requirements.

13.16 State-Owned Property

State-owned property must be accounted for, managed, and disposed of in accordance with applicable state laws and rules.

13.17 Leases

Costs for leased or rental property must conform to applicable cost principles for rental costs. Such property must be procured in accordance with applicable procurement requirements.

13.18 Property Insurance

Sufficient property insurance must be maintained as required for property purchased under a federal or state award.

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Procurement

14.1 Administrative Responsibility

Contractors are responsible, in accordance with good administrative practices and sound business judgment, for the settlement and satisfaction of all administrative and contractual issues arising out of the Contractor’s procurements, including micro-purchases.

14.2 Written Procedures

Contractors shall establish, and require subcontractors to establish, written procurement procedures that when followed, result in procurements that comply with the standards in this Chapter, its cited authorities, and grant award contracts.

14.3 Full and Open Competition

The procurement of all goods and services shall be conducted, to the maximum extent practical, in a manner providing full and open competition consistent with the standards of Office of Management and Budget circulars, the Grant Management Common Rule, Uniform Grant Management Standards, and this Manual.

14.4 Standards of Conduct and Conflicts of Interest

No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by federal or state funds if a real or apparent conflict of interest would be involved.

14.5 Small and Minority Firms

All necessary affirmative steps shall be taken to contract with small and minority business firms and other historically underutilized businesses when possible.

14.6 Surplus Property Purchases

Whenever cost effective and feasible, federal and state salvage and surplus property should be purchased in lieu of purchasing new property.

14.7 Records

Procurement records providing the historical detail of each procurement action shall be retained and made available to authorized entities and authorized representatives of those entities for a minimum of three years from the date that the audit report for that period is submitted to the Agency.

14.8 Micro-Purchases and Small Purchase Method

Small purchase procedures shall be used for relatively simple purchases that do not exceed the simplified acquisition threshold specified in Appendix A of this Manual.

14.9 Sealed Bid Method

Sealed bid procedures shall be conducted in accordance with applicable administrative requirements.

14.10 Competitive Proposal Method

Competitive proposal procedures shall be conducted in accordance with applicable administrative requirements.

14.11 Noncompetitive Method

Noncompetitive procedures shall be conducted in accordance with applicable administrative requirements.

14.12 Program Related Client Services

Contracts for the purchase of program-related client services must comply with the contracting requirements of the General Appropriations Act of the corresponding biennium, in addition to the requirements of the Financial Manual for Grants and Contracts (FMGC) Contracts chapter.

14.13 Professional and Consulting Services

Professional services, including auditors, and consulting services, must be selected and awarded in accordance with applicable administrative requirements.

14.14 Eligible Training Provider List

Training providers for Workforce Investment Act (WIA) Adult and Dislocated Worker training services shall not be procured, but shall be certified through the Agency’s Eligible Training Provider Certification System and selected for training from the resulting Eligible Training Providers List. Where authorized, training available on the Eligible Training Provider List can be used by other customers.

14.15 Selection Procedures and Debarment

Written selection procedures must exist for procurement transactions. An entity on the federal debarment list shall not be selected for an award.

14.16 Cost/Price Analysis

A cost or price analysis must be performed in connection with every procurement action.

14.17 Protest Procedures

Protest procedures must be in place to handle and resolve disputes relating to procurements.

14.18 Pre-award and Review

A pre-award review should be conducted to determine the adequacy of an offeror’s financial management system prior to award.

14.19 Performance Bonds

Bonding for construction or facility improvement must adequately protect the federal and/or state government’s interest.

14.20 Contract Types

The appropriate type of contract must be used, and shall not include cost plus a percentage of cost or percentage of construction cost contracts.

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Contracts

15.1 Contract Types

The cost plus a percentage of cost and cost plus a percentage of construction methods shall not be used in contracting of federal or state funds. The type of contract used should coincide with 1) the degree and timing of responsibility assumed by the subcontractor for costs, and 2) the amount and nature of the profit incentive offered for achieving or exceeding specified standards or goals (if applicable).

15.2 Contract Elements

All contracts must contain necessary elements to ensure that all parties understand the terms of the agreement.

15.3 Assurances

The contracting entity must ensure that all applicable assurances are included and that the legal instrument is consistent with the standards in this section.

15.4 Workforce System Integrity

Boards’ contracting procedures must be consistent and ensure compliance with provisions for the integrity of the workforce system in Commission in Agency Rules at 40 TAC, Chapter 801, Subchapter C.

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Allocation, Deobligation & Reallocation

This chapter is currently under construction.

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Financial Reporting

This chapter is currently under construction.

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Contract Closeout

This chapter is currently under construction.

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Monitoring

19.1 General

Programs, functions or activities supported by federal and/or state funds administered by the Agency must be monitored on a regular basis to assure compliance with applicable federal and/or state requirements.

19.2 Risk Assessment

A risk assessment tool must be developed and used in accordance with the requirements of Commission rule.

19.3 Monitoring Plan

A local-level monitoring plan must be developed using the results of the risk assessment. The plan must include the information required by Commission rule.

19.4 Monitoring Controls

Monitoring controls must be implemented to ensure that comprehensive and effective monitoring is achieved.

19.5 Reporting and Resolution

Monitoring reports must identify instances of noncompliance with federal and/or state requirements, and provide recommendations for corrective action and program quality enhancements.

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Single Audit

20.1 General

States, local governments, and non-profit organizations that expend $500,000 or more ($300,000 or more for fiscal years ending on or before December 31, 2003) in federal and/or state awards in that entity’s fiscal year must have a single or program-specific audit performed by an independent auditor.

20.2 Reporting Package

The Single Audit reporting package must be submitted to the oversight entity within the earlier of 30 days after receipt of the auditor’s report(s) or nine months after the end of the audit period, unless a longer period is agreed to in advance by the oversight entity. However, for fiscal years beginning on or before June 30, 1998, the audit shall be completed and the reporting package shall be submitted within the earlier of 30 days after the receipt of the auditor’s report(s), or 13 months after the end of the audit period.

20.3 Oversight Responsibilities

An entity that passes federal and/or state funds through to a subrecipient to carry out a federal and/or state program must assume oversight responsibilities for those funds.

20.4 Management Decision

Within six months of the date that the entity with oversight responsibility receives the audit reporting package, a Management Decision must be issued to the audited entity.

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Enforcement, Appeals & Termination

21.1 Enforcement and Sanction

A Contractor’s enforcement policies must not conflict with federal or state requirements.

21.2 Appeals

The Contractor must provide the subcontractor, against which enforcement action is being taken, with an opportunity for a hearing, appeal, or other administrative proceeding as entitled by statute or regulation applicable to the action involved.

21.3 Termination

If the Contractor or subcontractor elect to terminate an award, closeout and other settlement requirements must be considered in the termination of the award.

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