Financial Management

 
​The following resources provide critical information regarding financial and grants management under the Workforce Innovation and Opportunity Act (WIOA) Act.
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Uniform Guidance
​The Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance") at 2 CFR Part 200 is the first consolidation of grant management requirements in many years. Prior to the Uniform Guidance, Federal grant management requirements governing administrative requirements, cost principles, and audit requirements were found in eight separate OMB Circulars that included the following:

  • Administrative Requirements: OMB Circulars A-89, A-102 (29 CFR part 97), and A-110 (29 CFR Part 95)
  • Cost Principles: OMB Circulars A-21 (2 CFR Parts 215 and 220), A-87 (2 CFR Part 225), and A-122 (2 CFR Part 230)
  • Audit Requirements: OMB Circulars A-50 and A-133 (29 CFR Parts 96 and 99)

The Department of Labor's adoption of the Uniform Guidance is found at 2 CFR 2900, which includes a limited number of exceptions approved by OMB to ensure consistency with existing policy and procedures.

Additionally, OMB published technical amendments to the Uniform Guidance at 2 CFR 200 in the Federal Register. The technical amendments published on December 19, 2014, are located here; those published on September 10, 2015, are located here, and those published on November 9, 2015, are located here. DOL published technical amendments to the DOL exceptions at 2 CFR 2900 on December 30, 2015, and those are located here.

A Frequently Asked Questions document for OMB's Uniform Guidance at 2 CFR 200 is available. This document was developed in partnership with the Council on Financial Assistance Reform as one of its final deliverables. The CFOC continues to make grants management resources available at CFO.gov.

Implementation of the Uniform Guidance will require recipients and sub-recipients to review and update all financial and administrative policies, procedures, and systems for compliance with the new regulations.


Cost Categories
​There are two cost categories under WIOA grants – Administration and Program Activities.

The allowability and allocability of administrative costs must be consistent with the Cost Principles in the Uniform Guidance and 20 CFR 683.215. Efforts must be made to streamline the services and functions to reduce administrative costs by minimizing duplication and effectively using information technology to improve services.

Administration cost limitations may vary and are listed in each Notice of Funding Opportunity.
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Direct and Indirect Costs
​Differentiating between Direct and Indirect depends on how the cost is identified to a final cost objective (single versus multiple cost objectives) rather than the nature of the cost itself (unlike program or administrative). (2 CFR 200.413 and 200.414). Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs. See also 2 CFR 200.405 -Allocable costs. The total cost of an award is the sum of the allowable direct and allocable indirect costs less any applicable credits.

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Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. (2 CFR 200.413)

Indirect costs are those costs incurred for a common or joint purpose benefitting more than one cost objective and not readily assignable to the cost objectives specifically benefitted without effort disproportionate to the results achieved. (2 CFR 200.56)

In Illinois, indirect costs can be charged through an approved Negotiated Indirect Cost Rate Agreement (NICRA) or, if eligible, the de minimis rate.  See Indirect Cost Rate Negotiation.

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Indirect Cost Rate Negotiation
​All State of Illinois grantees receiving awards from Illinois grant making agencies must enter the State of Illinois Centralized Indirect Cost Rate System (CARS) to substantiate its organizations' election regarding indirect cost reimbursement.

All grantees must elect at least one of the following (4) options annually and complete the necessary requirements in the State of Illinois Indirect Cost Rate System. 

  • Negotiate an indirect cost rate with the State of Illinois
  • Elect the de minimis rate - 10% of modified total direct costs (MTDC)
  • Provide a copy of a current Federal Negotiated Indirect Cost Rate Agreement (NICRA)
  • Elect to decline any indirect cost rate

An indirect cost proposal or rate election must be initiated with the CARS upon notice of award.  Grantees that are not current users in the system will receive an invitation to CARS once a Notice of State Award (NOSA) is generated by a State awarding agency.  The indirect cost rate proposal or rate election must be completed no later than three (3) months after the effective date of the State award.

For organization that select to negotiate an indirect cost rate with the State of Illinois, the Uniform Guidance (2 CFR 200) requires annual submission of an indirect cost proposal or rate election.  The CARS will be used for annual renewals. Annual submissions must be received within six (6) months after the Grantee's fiscal year end.

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Resources
​This chart describes the differences between WIOA administrative costs, program costs, and indirect costs and identifies entities that may or may not charge all of their costs to the program cost category.

This module focuses on cost-sharing/matching requirements and leveraging resources. It explains the valuation and documentation requirements set forth by the Uniform Guidance for cash, in-kind contributions, leverage resources, documentation of third-party contributions, and common errors. In addition, it explores the challenges that may arise in meeting a matching requirement and the DOL exceptions in the Uniform Guidance.

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Subrecipients
​The Grantee is responsible for the monitoring of any approved subrecipient, ensuring that the terms and conditions of the Grant Agreement (GA) are in all subaward packages and that the subrecipient is in compliance with all applicable regulations and the terms and conditions of this Award. 2 CFR 200.101(b)(1); 2 CFR 200.331.