Introduction

This chapter compiles the applicable federal, state and agency requirements governing budgets of public funds administered by the Agency. In the event of conflict between these standards and federal statute or regulation, the federal statute or regulation will apply.

The forms referenced in this chapter are provided on the TWC Financial and Grant Information page at the Agency's website.

Record retention and access requirements are provided in Appendix K to this manual. All financial and programmatic records, supporting documents, statistical records, and other records pertaining to an award of federal or state funds must be retained and made available to authorized entities or their representatives in accordance with applicable administrative requirements.

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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.

Each Contractor must develop a budget for each grant or subgrant that it receives.  For some Contractors (and for most Contractors' subcontractors), the budget will be developed as part of a grant application or competitive procurement process. Other Contractors, such as Boards, receive pass-through funding allocations and must develop budgets for those funds based on the allocations that they receive.  The Agency recommends that each Contractor include the following procedures for budget development:

  • Identify expected revenues by contract, category and year of appropriation
  • Identify expenditures by functional classification and cost category
  • Develop written policies and procedures that specify the process by which the budget is developed, approved, implemented, monitored and revised
  • Maintain supporting documentation for budgeted amounts

Requirements for budget submission, budget controls, and changes to the budget are discussed in Section 6.2, Section 6.3 and Section 6.4 of this chapter, respectively.

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Submission Requirements

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

Federal statute or regulation, state statute or the Agency may require that a Contractor submit a budget or additional budget information to the Agency in relation to a specific award.  While some Contractors are not required to submit an operating budget beyond that which they submitted in response to an Agency solicitation for grant applications or competitive procurements, other Contractors, such as Boards, are required by state statute to provide certain budget information to the Agency.

Non-Board Budget Submission Requirements.  The Agency may, but does not generally require Contractors that develop and submit a budget to the Agency in response to a grant application or competitive procurement to resubmit the budget after the negotiated budget has been received by the Agency.  An exception is if the Contractor subsequently requests budgetary changes that require prior approval of the Agency (see Section 6.4 of this manual).

Board Budget Submission Requirements. In addition to requests for changes discussed in Section 6.4 of this manual, Boards must also comply with budget submission requirements established by state statute.  Texas Government Code §2308.262 expressly provides that, "A board shall adopt a budget for the board that must be included in the local workforce development plan submitted to the [Workforce Development] division [of the Texas Workforce Commission]."

Each Board is required by the current General Appropriations Act to annually file an itemized budget covering its fiscal year operations (separate from the budget required by the Texas Government Code).  The budget must be submitted to the Agency's Subrecipient Monitoring Department, along with required supporting information, within 90 days following the beginning of the Board's fiscal year.  These required documents are discussed below.  Contact information for the Agency's Subrecipient Monitoring Department is provided in Appendix E to this manual.

  • Operating Budget and Expenditures.  Each Board must submit its Board-approved operating budget as described in the preceding paragraph along with: The budget must clearly distinguish between the operational costs of the Board and the costs paid by the Board on behalf of the Board's contractors.  For example, rent paid by the Board for Texas Workforce Center facilities must be separate from the cost of facilities for Board offices.  Expense categories similar to the following must be used to identify expense items in the Board's submitted operating budget:

    The details must provide a complete understanding of the nature and amount of the budgeted items.  A sample format for submitting the Board-approved operating budget and actual expenditures is provided on the TWC Financial and Grant Information page at the Agency’s website.
     
  • Schedule of Projected Capital Expenditures.  A Schedule of Projected Capital Expenditures must be submitted to the Agency with the Board-approved operating budget. Submission of the schedule does not satisfy the prior approval requirements.  The Schedule of Projected Capital Expenditures is provided on the TWC Financial and Grant Information page at the Agency’s website.
  • Schedule of Positions.  A Schedule of Positions must also be included with the Board-approved operating budget that is submitted to the Agency.  Budgeted salary expenditures must be consistent with the Texas State Job Classification Salary Groups and Classification Salary Schedules located at the State Auditor's website (see also, Section 10.3 of this manual).  The Schedule of Positions that must be submitted with the budget is provided on the TWC Financial and Grant Information page at the Agency’s website.

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Budget Control

Actual expenditures or outlays shall be compared with budgeted amounts for each grant or subgrant.

In accordance with the administrative requirements of the Grants Management Common Rule (Common Rule) and Uniform Grant Management Standards (UGMS), all Contractors shall compare actual expenditures or outlays with budgeted amounts for each grant or subgrant that is funded by public funds administered by the Agency.  Financial information must be related to performance or productivity data, including the development of unit cost information whenever appropriate or specifically required in the grant agreement. If unit cost data are required, estimates based on available documentation will be accepted whenever possible.

Additionally, the Agency recommends that the following budget controls be implemented:

  • Conduct budget-to-actual comparisons no less than quarterly
  • Prescribe a threshold(s) above or below which budget variances will be investigated and reported, and the actions that will be taken
  • Prepare and analyze budget projections on a quarterly basis; i.e., expenditure projections

A budget projection is an extension of cumulative actual operating results into the future (future anticipated expenditures), usually to the end of the entity’s fiscal year and/or contract period to project possible budget shortages and surpluses.

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Budget Changes & Revisions

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

In general, Contractors may change or revise budgets within their approved direct cost budgets without the prior approval of the Agency when:

  • Such changes are necessary to meet unanticipated requirements and make limited program changes to approved projects
  • The Agency does not specifically require the Contractor to obtain prior approval for such changes
  • The changes will not require changes to the Contractor’s contract with the Agency or other documents required by the Agency, such as a Board plan

Specific examples of several types of budget changes follow. Contractors should refer to their contract to determine if prior Agency approval is required for budget changes.

Workforce Investment Act Waivers.  The following Workforce Investment Act (WIA) budget changes must be requested from the Agency as described in the Agency’s Guidelines for Implementing Workforce Investment Act Waivers, available on the Workforce Investment Act Information page at the Agency's website.

  • WIA Local Activity Funds
  • WIA Transfers Between Adult and Dislocated Worker Programs

Child Care Transfers Between Child Care Direct and Operations. Contractors are not required to request prior Agency approval to transfer Child Care funds between Direct and Operations cost categories.

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