HomeMy WebLinkAbout12/03/2002, C10 - GRANT MANAGEMENT POLICY UPDATE council MR6�D.p
12-3-02
acEnaa 12Epolit (3 10
CITY O F SAN LUIS O B I S P O
nti
FROM: Bill Stader,Director of Finance
SUBJECT: GRANT MANAGEMENT POLICY UPDATE
CAO RECOMMENDATION
Adopt a resolution updating the City's grant management policy to authorize Department Heads to
submit grant applications and accept awards when they are$5,000 or less, subject to conditions.
DISCUSSION
Background. In August 1994, the Council adopted Resolution No. 8322, which sets forth an
overall framework for guiding the City's use and management of grant resources by:
1. Stating the importance of grant programs in accomplishing City goals and objectives.
2. Establishing general concepts and framework for seeking and managing grant programs.
3. Identifying rolesandresponsibilities in managing grant programs.
4. Establishing criteria for evaluating the desirability of grant programs.
5. Setting forth the City's policy in complying with federal single audit act requirements.
This policy has served the City well since then. However, based on our experience over the last
nine years, we recommend amending the policy to authorize Department Heads to submit grant
applications and accept awards when they are $5,000 or less. Currently, Council approval is
required for all grant applications, no matter how small. In some cases, this results in
administrative costs to prepare the Council agenda report and other required internal documentation
that may not be wan-anted by the small size of the grant; and missed opportunities if we are unable
to meet the grant application deadline relative to Council meeting dates. For larger grants, these
constraints are prudent internal controls; however, for smaller grants we believe that the costs
outweigh the benefits.
Proposed Change. To make it more cost effective and timely to apply for small grants, we
recommend allowing Department Heads to apply for grants and accept them when they are $5,000
or less, subject to the following conditions:
1. It will not add regular staffing.
2. Any matching funds or in-kind contributions are already available within existing resources,
and no additional appropriation of unreserved, undesignated fund balance or working capital
is required.
CLQ —�
Grant Management Policy Update Page 2
3. At the conclusion of the grant, there will no ongoing commitments or obligations to continue
the program.
4. The purpose of the grant program is clearly consistent with current City plans, policies and
goals.
These revisions are consistent with the City's donation policy, under which Department Heads are
authorized to accept donations of $5,000 or less (subject to specific conditions); and the City's
purchasing policies, under which Departments are authorized to approve purchases of$5,000 or
less.
FISCAL IMPACT
There is no direct fiscal impact associated with adopting this policy; however, it will result in
improved fiscal operations and more effective management of small grant programs.
ATTACHMENTS
1. Resolution Updating the City's Grant Management Policy
2. Updated Grant Management Policy(Changes Highlighted)
G:Manuals/Financial Management Manual/Section 700/Revisions/Grant Management Policy/Council Agenda Report
coo a
ATTACHMENT
RESOLUTION NO. (2002 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
UPDATING THE CITY'S GRANT MANAGEMENT POLICY
WHEREAS, on August 16, 1994, the Council adopted Resolution No. 8322 establishing an
overall framework for guiding the City's use and management of grant resources; and
WHEREAS, the Council desires to update this policy to authorize Department Heads to
apply for grants and accept awards when they are$5,000 or less, subject to conditions.
NOW THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
that the updated grant management policy provided in Exhibit A (Section 740 of the Financial
Management Manual) is hereby adopted.
On motion of , seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted on December 3, 2002.
ATTEST:
Lee Price, City Clerk Mayor Dave Romero
APPROVED AS TO FORM:
Yti,sfrfensA, CrA#ney
�10�3
f i
ATTACHMENT 2
Section 740 Exhibit A
-GRANT MANAGEMENT POLICY
OVERVIEW
With state-takeaways and continued decreases in key General Fund revenues, grant revenues
have become an even more important part of the City's overall resource picture, especially in
funding capital improvements. Although grant programs themselves are being reduced and
becoming more competitive, actively seeking out grant revenues that assist in achieving
identified City goals and objectives should nonetheless play a key role in the City's overall
financial health strategies.
The purpose of this policy is to set forth an overall framework for guiding the City's use and
management of grant resources.
GOALS
1. Set forth the importance of grant programs in accomplishing City goals and objectives.
2. Establish general concepts and framework for seeking and managing grant programs.
3. Identify roles and responsibilities in managing grant programs.
4. Establish criteria for evaluating the benefits and costs of grant programs.
5. Set forth the City's policy in complying with Single Audit Act requirements.
GENERAL CONCEPTS AND FRAMEWORK
1. The City will aggressively pursue grant funding from federal, state and other sources,
consistent with identified City goals and objectives.
2. Aside from entitlement grants, the City should focus its efforts on securing grants for capital
improvements. This approach will allow the City to compete for projects we might not
otherwise be able to afford while maintaining financial independence should future grant
sources diminish. Grants for operating purposes may be considered on a case-by-case basis
after careful consideration of the benefits of the program and the ongoing impacts on the City
if grant funding is no longer available.
3. Until the City's financial situation significantly improves, we should avoid grants that fund
"pilot"operating programs or short-term staffing enhancements to existing programs. Taking
on these programs could ultimately aggravate the City's fiscal position should the desire for
the program remain once the grant funding is no longer available.
4. The City will only seek grants when sufficient staff resources are available to effectively
administer the program in compliance with grant requirements and successfully perform the
grant workscope.
740-1
CID ^'�
Grant Management Policy ATTACHMENT 2
5. Indirect costs of administering grant programs will be recovered to the maximum extent
feasible.
6. Operating departments have the primary responsibility for seeking out grant opportunities, for
preparing effective grant applications and for successfully managing grant programs after
they have been awarded.
7. Operating departments should develop a simple system that tracks grant funding availability
in their functional areas. Using this system, all capital improvement plan budget requests
will evaluate and document the ability of grants to assist in funding the project.
ROLES AND RESPONSIBILITIES
City Council
1. Approves grant management policies.
2. Approves all grant applications in excess of $5,000 and delegates receipt and contract
execution to the CAO if delegation is allowed by the grantor agency.
City Administrative Officer
1. Receives grants and executes related contract documents when delegated to do so by the
Council.
2. Develops, recommends and maintains grant management policies.
Operating Departments
1. Develop systems for maintaining ongoing information regarding grant availability within
their functional areas of responsibility.
2. Evaluate benefits and costs of specific grant programs on a case-by-case basis:
a. Purpose of the grant program and its consistency with identified City goals and
objectives.
b. Additional staffing, office space, facilities, supplies or equipment that will be required if
the grant is awarded.
c. Ongoing impacts of the grant program after it is completed.
d. Responsibilities of other departments and impacts on them in preparing the grant
application or performing workscope if the grant is approved.
740-2
�ip-S
I j
Grant Management Policy ATTACHMENT 2
e. Amount of indirect costs to be recovered from the grant.
f. Total program costs, including portion funded through grant revenues and any required
City contribution.
g. Source of funding for any required City share.
h. Compliance and audit requirements.
3. Prepare grant applications.
a. Work with the grantor agency in identifying special program requirements and
developing strategies for preparing a successful grant application.
b. Complete grant application documents.
c. Coordinate with affected departments as necessary.
d. For grants in excess of $5,000, prepare a Council agenda report requesting authorization
to seek grant funding. This report should describe the grant program's conformance with
this policy, including the results of the cost/benefit analysis.
e. For grants of $5,000 or less,, submit the grant application, subject to the following
conditions:
• It will not add regular staffing!
• Any matching funds or in-kind contributions are already available within existing
resources, and no additional pp opriation of unreserved, undesignated_fund balance
r
or working capital is required:
• At the conclusion of the grant, there will no ongoing commitments or obligations to
continue the program.'
• The purpose of the grant program, is clearly_ consistent with current City plans;
policies and goals:
4. Administer grant programs if awarded.
a. For grants in excess of $5,000, prepare a CAO Report (or Council agenda report if
required by the grantor agency) accepting grant award, including grant summary form
(see attached), budget amendment request and any other required City forms or
documents; and coordinate execution of grant documents by the CAO and return
executed documents to grantor agency.
b. For grants of$5,000 or less, execute and return grant documents to grantor agency.
740-3
Grant Management Policy ATTACHMENT 2
c. Notify affected departments of grant award.
d. Maintain financial and other records in accordance with grant requirements.
e. Complete and submit required reports, including requests for funds.
f. Monitor grant expenditures and receipt of revenues.
g. Coordinate on-site management reviews by the grantor agency during the grant term.
h. Perform the grant workscope.
5. Complete grant closeout.
a. Complete the grant workscope.
b. Notify affected departments that the project is completed and schedule a "close-out"
meeting if necessary to resolve any final procedural issues.
c. Ensure final receipt of grant revenues.
d. Prepare and submit any required grant close-out documents.
e. Review grant file for completeness.
f. Retain all necessary program and financial records for the period of time required by
grantor agency.
g. Coordinate any on-site management reviews or audits after the grant is completed.
h. Resolve any audit findings.
i. Ensure that the City's policy regarding single audit act requirements is implemented as
discussed below.
Department of Finance
1. Provides technical assistance to operating departments in preparing grant applications,
submitting reports and maintaining records.
2. Coordinates preparation and distribution of single audit reports.
Other Departments
Provide assistance to the managing department as identified during the grant application and
award process.
740-4
Grant Management Policy ATTACHMENT 2
SINGLE AUDIT ACT REQUIREMENTS
Background
The City is subject to the financial and compliance requirements of the Single Audit Act of 1984,
which is applicable to all local and state governments that expend $300,000 or more per fiscal
year in federal grant awards. The purpose of the Act is to:
1. Improve the financial management and accountability of state and local governments with
respect to federal financial assistance programs.
2. Establish uniform requirements for audits of federal grants.
3. Promote efficient and effective use of audit resources.
4. Assure that federal departments and agencies rely upon and use audit work performed during
a single audit rather than performing the audit work themselves.
Under this Act, federal grants are included under an inclusive single audit program that is
incorporated into the City's annual audit and financial report preparation process. During the
audit, tests are made to determine the adequacy of the internal control structure, including that
portion related to federal financial assistance programs, as well as to determine that the City has
complied with applicable laws and regulations.
City's Policy Regarding the Single Audit Approach
For federal grants included in the scope of the City's single audit approach, it is the City's policy
that all financial and compliance issues have been met through the single audit, and follow-up
audits to determine these issues are not necessary unless specifically related to findings or
recommendations included in the single audit report. As noted above, the purpose of the Act is
to establish uniform audit requirements, promote efficient use of audit resources, and assure that
federal agencies rely upon audit work already completed; its purpose is not to audit local
agencies twice. Accordingly, the City will strongly resist any efforts by federal agencies to
duplicate audit work already performed in complying with Act requirements. As such, whenever
federal grantor agencies request final audits, the managing department should notify the
Department of Finance in order to ensure a consistent response to these types of requests.
ATTACHMENT
Grant Summary Form
Amended policy approved by the Council on December 3,2002 (Resolution No.)
740-5
�io�S
Grant Management Policy ATTACHMENT 2
GRANT SUMMARY FORM
This form is available on the City Hall "Everyone" Drive as follows: Folder/Financial Management
Templates and Forms;File/Grant Summary Form.
City of San Luis Obispo
GRANT PROGRAM SUMMARY
GENERAL INFORMATION
Grant Title Grant No.
General Description of Grant Workscope.
Granting en _ Agency Contact, Phone No.
Responsible Department Department Contact Extension No.
Council Appiuvalbite I Application Date Award Date Est'd Completion Date
GRANT COST AND REVENUE SUMMARY
Program Cost Suinntary Total Grant Portion
Staffing
Contract Services
Supplies&Other Operating Expenditures
Capital Outlay
Indirect Costs Q %of Direct Costs
TOTAL GRANT COSTS AND REVENUES Is $
How Was Grant Portion-Determined?
Is a Midget Amendment keq6eit Required? i(a ) No ) 1 'm itshoaid.beaaaahed
OTHER COMMENTS note any significant or unusual compliance requirements)
Use reverse side if meessary to pmride addidonal information
Pre eredBy -- Date
This farm does not have to be typed-legible handwritten printing is preferred
740-6
CIO