Accounting Procedures

Meadows Valley Community Foundation, Inc.

Accounting and Personnel

Policies and Procedures

Cash Management—in accordance with Section 22 of 45 Code of Federal Regulations (CFR)

Part 74, Uniform Administrative Requirements for Awards and Sub-awards to Institutions of

Higher Education, Hospitals, Other Nonprofit Organizations, and Commercial Organizations:

(a) Draw-downs of grant funds shall be limited to the minimum amounts needed to cover

allowable project costs.

(b) Draw-downs shall be requested on receipt of bill or receipt in accordance with the actual

immediate cash requirements of carrying out the approved project.

(c) Draw-downs shall not be made to cover future expenditures; excluding cash advances

for travel.

Audits—in accordance with Sections 200 and 320 of Office of Management and Budget (OMB)

Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations:

(a) Audit required. If MVCF expends $500,000 or more within their fiscal year (January 1 –

December 31) in Federal awards a single audit will be conducted except when the

MVCF board and/or grant administrator elects to have a program-specific audit

conducted as indicated below. Audits required by this part shall be performed annually.

Reports on the audits shall be submitted to the Federal Audit Clearinghouse within the

earlier of 30 days after receipt or nine months after the end of the fiscal year.

(b) Program-specific audit election. If MVCF expends Federal awards under only one

Federal program (excluding Research & Development) and the Federal program’s laws,

regulation, or grant requirements do not require a financial statement audit of the

auditee, MVCF may elect to have a program-specific conducted. A program- specific

audit may not be elected for Research & Development unless all of the Federal awards

expended are received from the same agency, or the same Federal agency and the

same pass-through entity, and that Federal agency, or pass-through entity in the case of

a subrecipient, approves in advance a program-specific audit. A program-specific audit

guide may be available to provide specific guidance to an auditor with respect to internal

control, compliance requirements, suggested audit procedures, and audit reporting

requirements. The auditor should contact the Office of the Inspector General of the

Federal agency to determine whether such a guide is available. When a current

program-specific audit guide is available, the auditor shall follow Generally Accepted

Government Auditing Standards (GAGAS) and the guide when performing the program-
specific audit. When a program-specific audit guide is not available, MVCF and the

auditor shall have basically the same responsibilities for the Federal program as they

would have for an audit of a major program in a single audit. The program-specific audit

shall be completed and submitted to the Federal Audit Clearinghouse designated 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 upon in advance by the Federal

agency that provided the funding or a different period is specified in a program-specific

audit guide.

(c) Exemption when Federal awards expended are less than $500,000. If MVCF

expends less that $500,000 within their fiscal year (January 1 – December 31) in Federal

awards, they are exempt from Federal audit requirements for that year, except as noted

below, but records will be available for review or audit by appropriate officials of the

Federal agency, pass-through entity, and General Accounting Office (GAO).

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(d) Audit costs. Unless prohibited by law, the costs of the audits made in accordance with

the Single Audit Act Amendments of 1996 are allowable charges to Federal awards.

These charges may be considered a direct cost or an allocated indirect cost. Any cost of

audit not conducted under the Single Audit Act Amendments of 1996 or for any Federal

awards of less than $500,000 are considered unallowable costs. However, this does not

prohibit MVCF as a pass-through entity from charging Federal awards for the cost of

limited scope audits to monitor its subrecipients, provided the subrecipient does not have

a single audit. For the purpose of this part, limited scope audits only include agreed-
upon procedures engagements conducted in accordance with generally accepted

auditing standards or attestation standards, that are paid for and arranged by MVCF and

address only one or more of the following types of compliance requirements: activities

allowed or unallowed; allowable cost/cost principles; eligibility; matching, level of effort,

earmarking; and, reporting.

(e) In Lieu of other audits. An audit made in accordance with this part shall be in lieu of

any financial audit required under individual Federal awards. To this extend this audit

meets a Federal agency’s needs; it shall rely upon and use such audits. The provisions

of this part neither limit the authority of Federal agencies, including their Inspectors

General, or GAO to conduct or arrange for additional audits (e.g., financial audits,

performance audits, evaluations, inspections, or reviews) nor authorize MVCF to

constrain Federal agencies from carrying on additional audits. Any additional audits

shall be planned and performed in such a way as to build upon work performed by other

(f) Federal agency to pay for additional audits. The Federal agency that conducts or

contracts for additional audits shall, consistent with other applicable laws and

regulations, arrange for funding the full cost of such additional audits.

(g) Request for a program to be audited as a major program. If a federal agency

requests MVCF to have a particular Federal program audited as a major program in lieu

of the Federal agency conducting or arranging for the additional audit, to allow for

planning, the request should be made at least 180 days prior to the end of the fiscal year

to be audited. MVCF, after consultation with their auditor, will promptly respond to such

request by informing the Federal agency whether this program would otherwise be

audited as a major program using the risk-based audit approach as described in OMB

Circular A-133 Section 520and, if not, the estimated incremental cost. The Federal

agency shall then promptly confirm to MVCF whether it wants the program audited as a

major program. If the program is to be audited as a major program based upon this

Federal agency request, and the Federal agency agrees to pay the full incremental

costs, then MVCF shall have the program audited as a major program. MVCF as a

pass-through entity may use the provisions of this paragraph for a subreciepient.

(h) Determining Federal awards expended. The determination of when an award is

expended shall be based on when the activity related to the award occurs. Generally,

the activity pertains to events that require MVCF to comply with laws, regulations, and

the provisions of the contracts or grant agreements such as: expenditure/expense

transactions associated with grants, cost-reimbursement contracts, cooperative

agreements, and direct appropriations; the disbursement of funds passed through to

subrecipients; the receipt or use of program income, and the period when insurance is in

(i) Subrecipient and vendor determinations. MVCF may be a recipient, a subrecipient,

and a vendor. Federal awards expended as a recipient or a subrecipient is subject to an

audit under this part. The payments for goods or services provided as a vendor would

not be considered Federal awards.

(j) Compliance responsibility for vendors. MVCF’s compliance responsibility for

vendors is only to ensure that the procurement, receipt, and payment for goods and

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Accounting and Personnel Policies and Procedures

services comply with laws, regulations, and the provisions of contracts or grant

agreements. MVCF is responsible for ensuring compliance for vendor transactions

which are structured such that the vendor is responsible for program compliance or the

vendor’s records must be reviews to determine program compliance. When these

vendor transactions relate to a major program, the scope of the audit shall include

determining whether these transactions are in compliance with laws, regulations, and the

provisions of contracts or grant agreements.

(k) Restriction on auditor preparing indirect cost proposals. An auditor who prepared

the indirect cost proposal or cost allocation plan may not also be selected to perform the

audit required when the indirect costs recovered by MVCF for the prior year exceeded

$1 million. This restriction applies to the base year used in the preparation of the indirect

cost proposal or cost allocation plan and any subsequent years in which the resulting

indirect cost agreement or cost allocation plan is used to recover costs.

(l) Submission by subrecipients. When applicable, if MVCF is a subrecipient then they

shall submit to each pass-through entity one copy of the audit report when the schedule

of findings and questioned costs disclosed audit findings relating to federal awards that

the pass-through entity provided or the summary schedule of prior audit findings

reported the status of any audits findings related to Federal awards that the pass-
through entity provided. If MVCF is not required to submit a copy of audit report to pass-
through entity, MVCF will provide written notification to the pass-through entity that: an

audit of the subrecipient was conducted as required; the schedule of findings and

questioned costs disclosed no audit findings relating to the Federal award(s) that the

pass-through entity provided; and the summary schedule of prior audit findings did not

report on the status of any audit findings relating to the Federal award(s) that the pass-
through entity provided. MVCF may submit a copy of the audit report to a pass-through

entity to comply with this notification requirement.

(m)Requests for report copies. MVCF, in response to requests by a Federal agency or

pass-through entity, will submit the appropriate copies of the audit report and copies of

any auditor management letters, as required.

(n) Report retention requirements. MVCF will keep one cop of the data collection form

and one copy of the audit report on file for three (3) years from the date of submission to

the Federal clearinghouse designated by OMB. Pass-through entities shall keep MVCF

submissions on file for three (3) years from date of receipt.

Accounting System—in accordance with Section 21 of 45 CFR Part 84

(a) Financial management system. MVCF will maintain a financial management system

that complies with various federal guidelines for financial management of federally

assisted activities. This system will include a minimum of four (4) accounting

transactions. They are:

o Cash Receipts Record – maintained to record the receipt of all funds (local, state,

and federal) used for program activities. This record will include the date and

amount of funds received, the date of deposit, and the source of the funds.

o Cash Disbursement Record – maintained to record all checks issued for payment

of program costs. This record will include the date of payment, payee, check

number, amount, and the account from which the disbursement was made.

o General Ledger-maintained to summarize cash receipts and disbursements on a

subaccount basis to show balance expended and balance remaining. All entries

of the general ledger will be made from the cash receipts and cash disbursement

records.

o Property Inventory-will list all fixed assets, if any, acquired with grant funds.

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(b) Regular financial status reports. The program financial manager will generate regular

financial status reports that indicate the dollar amount allocated for each activity

(including any budget revisions), the amount obligated, and the amount expended for

each activity. The system will permit the comparison of actual expenditures and

revenue, if any, against budgeted amounts. Any activity budgets which include program

income will be reflected in program accounting records.

(c) Accounting and bank records. Separate accounting and bank records will be

maintained with a separate non-interest bearing bank account for all grant funds. Not

only will separate records serve all of the above record-keeping requirements, but will

eliminate potential conflicts with MVCF’s usual record keeping system that may reflect

accounting by function or department rather than activity.

(d) Bank statement reconciliation. Bank statements shall be reconciled on a monthly

basis by the program financial manager who is not authorized to sign checks as

referenced within these policies and procedures. Bank statement reconciliation will be

included in regular financial status reports the will be reviewed and signed by the

program administrator, and/or program manager and a MVCF board member.

(e) Internal controls. To insure internal control, to the greatest extent possible, several

different people will carry out fiscal functions. For instance, one person will receive the

checks, another will approve the payments and still another will disburse and record

functions. For grant compensating control plan purposes:

o The program manager will:

 Review and approve all bills and invoices

 Review and approve all regular financial status reports

o The program administrator will:

 Review and preapprove all bills and invoices with exception of

 Review and approve all regular financial status reports

 Review and authorize draw down requests

o The program financial manager will:

 Write all checks

 Disburse checks once approved and signed by board

 Prepare regular financial status reports

 Prepare and submit all draw down requests

 Deposit all funds

o The MVCF board will:

 Review and approve all regular financial status reports

 Review and approve all disbursements either at a board meeting or by e-
mail with exception of expenditures less than $50.00 and budgeted

 Sign checks

expenditures less than $50.00 and budgeted personnel or contracted

services.

personnel or contracted services.

(f) Source documentation. Program financial manager will maintain source

documentation supporting accounting records. Services will be described as to what

was done and all expenditures charged must contain an approval of each billing by the

project manager and/or administrator. If separate activities exist in a grant, the separate

activity will be identified. Invoices, bills or lading, purchase vouchers, contract services,

etc., will be kept for four (4) years after grant closeout to show for what purpose funds

were spent.

(g) Personal information. Records containing personal information, e.g. home addresses,

home phone numbers, financial information, social security numbers, etc., are protected

under Title 9 Chapter 3 of the Idaho Code. As such these records will be retained for

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Accounting and Personnel Policies and Procedures

inspection by MVCF’s independent auditor as per above audit procedures, and/or

grantor agency, but shall not be made available for general public inspection.

Disbursement/Procurement—in accordance with Section 44 of 45 CFR Part 74, Section 36 of

45 CFR Part 92, and 48 CFR Part 31

(a) Procurement standards. MVCF procurement standards will reflect applicable State

and local laws and regulations, provided that the procurements confirm to applicable

Federal law and standards.

(b) Contract administration. MVCF will maintain a contract administration system

ensuring that contractors perform in accordance with the terms, conditions, and

specifications of their contracts.

(c) Conflict of interest. MVCF will maintain a code of standard of conduct in which no

MVCF officer, agent or subgrantee of shall participate in selection, or in the award and

administration of a contract supported by Federal funds if a conflict of interest, real or

apparent, would be involved.

(d) Duplication. MVCF and/or program administration will review proposed procurement to

avoid purchase of unnecessary or duplicative items. Consideration will be given to

consolidating or breaking out procurements to obtain a more economical purchase.

When appropriate an analysis to determine the most economical approach will be

conducted.

(e) Economy and efficiency. MVCF will foster greater economy and efficiency by entering

into intergovernmental agreements for procurement or use of common goods as

applicable.

(f) Surplus. MVCF will use Federal excess and surplus property in lieu of purchasing new

whenever such use is feasible and reduces project costs.

(g) Value engineering. Where pertinent, MVCF will use value engineering clauses in

contracts to offer reasonable opportunities for cost reduction to ensure that essential

functions are provided at the overall lower cost.

(h) Responsible contractors. MVCF will make awards to responsible contractors

possessing the ability to perform successfully under the terms and conditions of a

proposed procurement. Consideration will be given to such matters as contractor

integrity, compliance with public policy, record of past performance, and financial and

technical resources.

(i) Record keeping. MVCF will maintain records to detail the significant history of

procurement. These records will include: rationale for the method of procurement,

selection of contract type, contractor selection or rejection, and the basis for the contract

price. Receipts, time sheets or other documentation must be maintained to support all

disbursements prior to payment.

(j) Time and material. MVCF will use and time and material contracts only after the

determination that no other contract is suitable and the contract includes a ceiling price

that the contractor exceeds at its own risk.

(k) Settlement. MVCF will be responsible, in accordance with good administrative practice

and sound business judgements, for the settlement of all contractual and administrative

issues arising out of procurements.

(l) Protests. The MVCF board or their designees will handle and resolve disputes relating

to procurements and shall in all instances disclose information regarding the protest to

the awarding agency. A protestor must exhaust all administrative remedies with MVCF

before pursuing a protest with the Federal agency. Reviews of protests will be limited

as per Section 36 of 45 CFR Part 92.

(m) Competition. MVCF, as much as possible given our rural Idaho location, will conduct:

o All procurement transactions in a manner providing full and open competition.

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(n) Methods of Procurement. MVCF will practice four (4) methods of procurement.

o Compare costs within Lewis & Idaho Counties when contracting for services

providing there is an appropriate number of qualified applicants given the nature

and size of the project.

o MVCF;s written selection procedures include:

 A clear and accurate description of requirements for the qualifications,

 All requirements identified which the applicants must fulfill and all other

o MVCF will maintain and use current lists of persons, firms, or products in

acquiring goods and services that is adequate to ensure maximum open and free

competition. MVCF will not preclude potential applicants from qualifying during

the solicitation process.

o Small Purchase Procedures – simplified procedures for the acquisition of

materials, services and construction when the amount does not exceed a specific

amount.

o Competitive Sealed Bids (formal advertising) – MVCF will follow formal

procedures for acquisitions of materials, services and construction when the

aggregate amount exceeds $100,000.

o Competitive Negotiation/Proposals – MVCF will follow formal procedure required

with acquisition of services is expected to cost more than $25,000. Typically

involves the procurement of professionals with a fixed price or not to exceed cost

reimbursement type contract.

o Noncompetive Negotiation (sole source) – MVCF will award contract through

solicitation of a proposal from one (1) source under the following circumstances:

 After solicitation from a number of sources, competition is determined

 The items or services required are available from one source;

 The funding Federal agency authorizes the noncompetitive method;

 Emergency for the requirement will not permit a delay resulting from

material, product, or service to be procured.

factors to be used in evaluating bids, proposals or qualifications.

inadequate;

competitive solicitation.

(o) Prior procurement. If the procurement of a grant administrator, design professional, or

contractor occurred prior to the award and MVCF plans to use Federal awards to pay for

these services, the procurement process must have met the above procurement

requirements.

(p) Affirmative action. MVCF will take all necessary affirmative steps that assure that

minority firms, women’s business enterprises and labor surplus area firms are used

when possible.

(q) Contract cost and price. MVCF will perform a cost and/or price analysis in connection

with all procurement actions including contract modifications.

(r) Estimated costs. MVCF will allow costs or prices based on estimated costs for

contracts allowable only to the extent that costs incurred or cost estimates included in

negotiated prices are consistent with Federal cost principles. MVCF may reference their

own cost principles that comply with local, regional and state cost principles. Cost plus

a percentage of cost and percentage of construction cost methods of contracting will not

be used by MVCF.

(s) Checks. Checks shall be safeguarded under lock and key when not in use. No pre-
signed checks are permitted. All checks require two MVCF board member signatures.

(t) Awarding agency review. MVCF will make available, upon request of the awarding

agency, specifications on proposed procurements where the awarding agency believes

such a review is needed. MVCF will make available for awarding agency pre-award

review procurement documents, such as requests for proposals or invitations for bids,

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independent cost estimates, etc. as per Section 36 of 45 CFR Part 92. MVCF will be

exempt from the pre-award review if the awarding agency determines that MVCF’s

procurement systems comply with regulation standards.

(u) Bonding requirements. If MVCF makes the determination that the awarding agency’s

interest is not adequately protected, the minimum requirements are as follows:

(v) Contract provisions. All contracts negotiated by MVCF will contain:

o A bid guarantee from each bidder equivalent to five percent of the bid price.

o A performance bond on the part of the contractor for 100% of the contract price.

o A payment bond on the part of the contractor for 100% of the contract price.

o Administrative, contractual or legal remedies in instances where contractors

violate or breach contract terms, and provide for sanctions and penalties as

appropriate.

o Termination for cause and for convenience of MVCF including the manner in

which it will be affected and the basis for settlement for all contracts in excess of

$10,000.

o Compliance with “Equal Employment Opportunity”.

o Compliance with Copeland “Anti-Kickback” Act.

o Compliance with the Davis Bacon Act.

o Compliance with Sections 103 and 107 of the Contract Work Hours and Safety

Standards Act.

o Notice of awarding agency requirements pertaining to reporting, patent rights,

copyrights and rights in data.

o Access by any duly authorized representative to any books documents, papers,

and records of the contractor directly pertinent to the specified contract for the

purpose of making audit, examinations, excerpts, and transcriptions.

o Retention of all required records for three (3) years after MVCF make final

payment and all other pending matters are closed.

o Compliance with all applicable standards, orders, or requirements issued under

the Clean Air Act.

o Mandatory standards and policies relating to energy efficiency which are

contained in the sate plan issued in compliance with the Energy Policy and

Conservation Act.

Matching or Cost Sharing—in accordance with Section 23 of 45 CFR Part 74; Section 24 of

45 CFR Part 92; and Part I-24 of the HHS Grants Policy Statement, issued October 1, 2006.

(a) Acceptable match or cost sharing. For all cost sharing or matching contributions,

including cash and third party in-kind to be acceptable, MVCF will meet all of the

following criteria:

o Maintain verifiable records of all cost sharing or match

o Credited cost sharing or match is not included as contributions for any other

federally-assisted project or program.

o Cost sharing or match is necessary and reasonable for the proper and efficient

accomplishment of the project or program objectives.

o Cost sharing or match is allowable under application cost principals.

o Cost sharing and match are not paid by Federal Government under another

award, except where authorized by Federal statute to be used for cost sharing or

matching.

o Cost sharing and match are provided for in the approved budget.

(b) Indirect costs. MVCF may use unrecovered indirect costs as part of cost sharing or

match when allowed.

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(c) Values. MVCF will establish value of recipient contributions of services and property in

accordance with the application cost principals.

(d) Volunteer services. MVCF will value and count services furnished by professional and

technical personnel, consultants and other skilled and unskilled labor volunteers as cost

sharing or matching if the service is an integral and necessary part of an approved

project or program. Rates for volunteer services will be consistent with those paid for

similar work in MVCF. When the required skills are not available within MVCF, rates will

be consistent with those paid in the labor market in which MVCF competes for the kind

of services involved. Fringe benefits consistent with those paid that are reasonable,

allowable, and allocable will be included in the valuation. MVCF will document volunteer

services as supported by best business practices.

(e) Paid labor. If an employer other than MVCF furnishes services of an employee, these

services will be valued at the employee’s regular rate of pay (plus a reasonable amount

of fringe benefits), provided these services are in the same skill for which the employee

is normally paid. MVCF will document the basis for determining the valuation of

personal service.

(f) Donated supplies. MVCF will include such items as expendable property, office

supplies, laboratory supplies or workshop and classroom supplies. Value assessed to

donated supplies included in the cost sharing or matching shall be reasonable and shall

not exceed the fair market value of the property at the time of the donation. MVCF will

document the basis for determining the valuation of supplies.

(g) Donated property. MVCF will value donated land and buildings at its fair marker value

at the time of donation as established by an independent appraiser and certified by a

responsible official. MVCF will value donated equipment at the fair market value of

equipment of the same age and condition at time of donation. MVCF will value donated

space at the fair rental value of comparable space as established by an independent

appraisal of comparable space. MVCF will value loaned equipment at its fair rental

value. MVCF will document the basis for determining the valuation of equipment,

buildings, and land.

Consultants and Subcontracts—in accordance with Sections 47 and 48 of 45 CFR Part 74

and Section 201.3 of 48 CFR Part 31

(a) Contract administration. MVCF will ensure contractor compliance with terms,

conditions and specifications of the contract and to ensure the adequate and timely

follow-up of all services and purchases. MVCF will evaluate contractor performance and

document, as appropriate, whether contractors have met the terms, conditions and

specifications of the contract.

(b) Contract provisions. MVCF will include in addition to provisions to define a sound and

complete agreement, the following provisions in all contracts and subcontracts:

o Contracts will contain contractual provisions conditions that allow for

administrative, contractual, or legal remedies in instances in which a contractor

violates or breaches the contract terms, and provide for such remedial actions as

may be appropriate.

o All contracts will contain suitable provisions for termination by MVCF including

the manner by which termination will be effected by MVCF. Conditions under

which the contract may be terminated for default as well as conditions where the

contract may be terminated because of circumstances beyond control of the

contractor will included.

o Bonding requirements and policies will be included as applicable in all contracts.

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(c) Outsourcing. MVCF is a volunteer organization with no employees. All services

relating to program administration, program management, program financial

management, labor, supplies, materials, building, equipment, etc. are outsourced.

(d) In-house capabilities. MVCF is a volunteer organization. All services provided by

MVCF are on a volunteer basis and will be used as cost sharing or match. Qualified

MVCF volunteer’s capabilities will be considered for assistance prior to obtaining

external assistance as long the MVCF code of standard of conduct and internal controls

are not jeopardized.

(e) Selection process. MVCF will follow as established disbursement/procurement

procedures and policies for consultants and subcontracts.

(f) Reasonable costs and fees. A cost is reasonable if, in its nature and amount, it does

not exceed that which would be incurred by a prudent person in the conduct of

competitive business. MVCF recognizes reasonable costs as:

o It is the type of cost generally recognized as ordinary and necessary for the

conduct of the contractor’s business or the contract performance.

o Generally accepted sound business practices.

o The contractor’s responsibilities to the Government, other customers, MVCF, and

the public at large.

o The contractor’s established practice.

o MVCF will follow established disbursement/procurement procedures and policies

for consultants and subcontracts.

Expenditure Analysis—in accordance with Sections 31of 48 CFR Parts .001 and .201

(a) Total cost of contract. For MVCF accounting purposes, the composition of total cost

of a contract is the sum of the direct and indirect costs allocable to the contract, incurred,

or to be incurred, less an allocable credits plus any allocable cost of money. In

ascertaining what constitutes a cost, MVCF establishes that any generally accepted

method of determining or estimating cost that is equitable and is consistently applied will

be used, including standards costs properly adjusted for applicable variances.

(b) Estimated cost. MVCF will estimate costs for forecasting a future result in cost, based

upon information available at the time, to determine budget.

(c) Accumulated cost. MVCF will accumulate costs collecting cost data in an organized

manner through a system of accounts to analyze actual expenditures.

(h) Regular financial status reports. The program financial manager will generate regular

financial status reports that indicate the dollar amount allocated for each activity

(including any budget revisions), the amount obligated, and the amount expended for

each activity. The system will permit the comparison of actual expenditures and

revenue, if any, against budgeted amounts. Any activity budgets which include program

income will be reflected in program accounting records.

(i) Significant variances. To avoid significant variances the program administrator,

program director and program finance manager will meet monthly to review financial and

program status reports to determine budget and program compliance. If a significant

variance does occur, the MVCF board will be notified immediately and the Federal

agency will be contacted for recommendations for program modification and/or revision

for compliance. Written approval from Federal funding will be required for all program

modification and revision as applicable by Federal regulation.

Indirect Costs—in accordance with OMB Circular A-87 and Section 201 of 48 CFR Part 31

(a) MVCF has not prepared and “indirect cost rate proposal” and therefore has not

established a federally approved indirect cost rate.

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(b) When appropriate, MVCF will apply for a federally approved indirect cost rate under the

simplified method “where the level of Federal awards to the department or agency is

relatively small”.

(c) For granting purposes MVCF uses cost estimation to determine reasonable rates to

allocate cost to cost objectives. Estimating costs means the process of forecasting a

future result in terms of cost, based upon information available at the time. Other

considerations for cost estimation are:

o Determining reasonability – a cost is reasonable if in its nature and amount, it

does not exceed that which would be incurred by a prudent person in the conduct of

competitive business. Reasonableness of specific costs must be examined with

particular care in connection with firms or their separate divisions that may not be

subject to effective competitive restraints. No presumption of reasonableness shall

be attached to the incurrence of cost by a contractor. If an initial review in the facts

results in a challenge of a specific cost by the contracting officer or the contracting

officer’s representative the burden of proof shall be on the contractor to establish that

such cost is reasonable. What is reasonable depends upon a variety of

considerations and circumstances, including:

 Whether it is the type of cost generally recognized as ordinary and necessary

for the conduct of the contractor’s business or the contract performance

 Generally accepted sound business practices, arm’s length bargaining, and

Federal and State laws and regulations.

 The contractor’s responsibility to the Government, other customers, owners

of business, employees, and the public at large.

 Any significant deviations from the contractor’s established practices.

o Determining allowability – the factors to be considered in determining whether a

cost is allowable include the following:

 Reasonableness

 Allocability

 Generally accepted accounting principles and practices appropriate to the

particular circumstances.

 Terms of the contract.

o Determining allocability – a cost is allocable if it is assignable or chargeable to

one or more cost objectives on the basis of relative benefits received or other

equitable relationship. Subject to the foregoing, a cost is allocable to a

Government contract if it:

 Is incurred specifically for the contract.

 Benefits both the contract and other work, and can be distributed to them in

reasonable proportion to the benefits received.

 Or, is necessary to the overall operation of the business, although a direct

relationship to any particular cost objective cannot be shown.

(a) Authorization. The board may authorize the use of MVCF credit cards to facilitate

payment of travel and other expenditures that have been pre-authorized. Such use is

intended to facilitate convenience for the cardholder as well as expedite access to goods

or services.

(b) Management. The finance manager is responsible at all times for managing the credit

card accounts and will track the assignment and distribution of all credit cards issued,

and reconcile the credit card expenditures on a monthly basis. In the event that the

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Accounting and Personnel Policies and Procedures

cardholder fails to provide documentation regarding purchases to the finance manager,

or any misuse is suspected, the finance manager will immediately notify the board.

(c) Responsibility. Any cardholder authorized to use a credit card is responsible for

reading and complying with this policy at all times.

(d) Allowable purchases. The cardholder shall only use the credit card to make purchases

consistent with board policy and authorization. Cardholders are expressly prohibited

from purchasing the following with the credit card: Alcoholic beverages, illegal items,

personal items or services, gifts or donations, and items or services that the cardholder

is not authorized to purchase by board policy.

(f) Purchase documentation. The cardholder must obtain receipts verifying each purchase

(including vendor name and location, date and time of purchase, and items/services

purchased) and provide such receipts to the finance manager by the end of the calendar

(g) Purchase reimbursement. The cardholder shall be responsible to reimburse MVCF for

any purchases not consistent with board policy or for which the cardholder has not

provided the receipt, as well as any fees/charges associated with investigating the

unauthorized purchase.

(h) Safeguarding. The cardholder shall be responsible for the safeguarding of the credit

card and the confidentiality of the information contained on and regarding the credit card

while in the cardholder’s possession and/or responsibility. The cardholder shall

immediately (within 24 hours) report to the finance manager if the credit card is lost or

(j) Termination policy. The credit card shall be returned immediately to the finance

manager upon request or upon termination of the cardholder’s relationship with MVCF.

The cardholder shall not be authorized to give the credit card to anyone other than the

relevant merchant as may be required.

(k) Purchase policy violation. Any cardholder who violates this policy shall immediately

reimburse MVCF for any unauthorized purchases. In the event that it is determined that

the unauthorized purchase was an intentional violation of the policy, and/or the

cardholder makes such and unauthorized purchase on more than one occasion, the

finance manager may determine that the cardholder must return the credit card to

(l) Disciplinary action. Violation of this policy by any cardholder may be grounds for

disciplinary action, up to and including legal prosecution.

Timekeeping—in accordance with OMB Circulars A-87 and A-122

(a) MVCF has no employees.

(b) All personnel are contractual.

(c) Where contractors work solely on a single Federal award or cost objective, charges for

their wages and salaries will be supported by periodic certification that they have worked

solely on that program for the period covered by the certification. These certifications

will be prepared at least monthly and will be signed by the supervisory official having first

hand knowledge of the work performed by the contractor.

(d) Where contractors work on multiple activities or cost objectives, a distribution of their

salaries or wages will be supported by personal activity reports or equivalent

documentation which meet the following standards:

o They must reflect after-the-fact distribution of the actual activity of the contractor.

o They must account for the total activity for which each is compensated.

o They must be prepared monthly and coincide with one or more pay periods.

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Accounting and Personnel Policies and Procedures

(e) Substitute systems for allocating contract services to Federal awards may be used in

place of activity reports. These systems are subject to MVCF and Federal agency

approval. Such systems may include, but are not limited to, random moment sampling,

case counts, or other quantifiable measures of the contractor effort.

(f) All contractor invoices must be signed by the contractor and approved for payment

under MVCF internal control policy.

Travel/Per Diem—in accordance with OMB Circular A-87

(a) General. Travel costs are allowable for expenses for transportation, lodging,

subsistence, and related items incurred by employees traveling on official business.

Such costs may be charged on an actual cost basis, on a per diem or mileage basis in

lieu of actual costs incurred, or on a combination of the two, provided the method used is

applied to an entire trip, and results in charges consistent with those normally allowed in

like circumstances in non-federally-sponsored activities. Travel shall be pre-approved

by the program administrator and/or MVCF board. Reimbursements shall be based on

travel vouchers and supporting receipts.

(b) Per Diem. Costs incurred by employees and officers for travel, including costs of

lodging, other subsistence, and incidental expenses, shall be considered reasonable and

allowable only to the extent such costs do not exceed charges normally allowed.

o They must be signed by the contractor.

o In-State Daily Per Diem Reimbursement – $34.50 day

o Where employees are to be absent from their official station on official business

for less than twenty four (24) hours, partial day per diem will be reimbursed as

follows: Breakfast – $7.50, Lunch – $10.50, and Dinner – $16.50

o In order to qualify for the above reimbursement, the following time guidelines

should be followed.

 BREAKFAST – the employee must be in travel status prior to 6:30 A.M.

 LUNCH – the employee must leave the home station prior to 11:00 A.M.

 DINNER – the employee must be in travel status prior to 4:30 P.M. and be

o Out of State Daily Per Diem and mileage reimbursement will be based on the

rates and amounts established under United States Code “Travel and

Subsistence Expenses; Mileage Allowances”.

and not return to the home station prior to 11:30 A.M

and be in travel status three hours or longer. In no instance will

reimbursement be made if the traveler returns prior to 1:30 P.M.

in travel status five hours or longer. In no instance will reimbursement be

made for a return time of 7:30 P.M. or before.

(c) Airfare. Airfare costs in excess of the customary standard (coach or equivalent) airfare,

are unallowable except when such accommodations would: require circuitous routing,

require travel during unreasonable hours, excessively prolong travel, greatly increase

the duration of the flight, result in increased cost that would offset transportation savings,

or offer accommodations not reasonably adequate for the medical needs of the traveler.

Where a governmental unit can reasonably demonstrate to the awarding agency either

the nonavailability of customary standard airfare or Federal Government contract airfare

for individual trips or, on an overall basis, that it is the governmental unit’s practice to

make routine use of such airfare, specific determinations of nonavailability will generally

not be questioned by the Federal Government, unless a pattern of avoidance is

detected. However, in order for airfare costs in excess of the customary standard

commercial airfare to be allowable, e.g., use of first-class airfare, the governmental unit

must justify and document on a case-by-case basis the applicable condition(s) set forth

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Property Control—in accordance with OMB Circular A-110

(a) Record keeping. MVCF will accurately maintain property and equipment records

including the following information:

o A description of the equipment.

o Manufacturer’s serial number, model number, Federal stock number, national

stock number, or other identification number.

o Source of equipment, including award number.

o Whether title vests in MVCF or the Federal Government.

o Acquisition date (or date received, if equipment was furnished by the Federal

Government) and cost.

o Information on calculation of percentage of Federal participation in the cost of the

equipment if not furnished by Federal Government.

o Location and condition of the equipment and the date the information was

reported.

o Unit acquisition cost.

o Ultimate disposition data, including date of disposal and sales price or the

method used to determine current fair market value where MVCF compensates

the Federal for its share.

(b) Tagged. Equipment owned by the Federal Government shall be identified to indicate

Federal ownership.

(c) Inventory. Program Manager will take a physical inventory of equipment and the results

will be reconciled with the equipment records annually. Any difference in quantities

determined by the physical inspection and those shown in the accounting records shall

be investigated to determine the causes of the difference. The program manager shall,

in connection with the inventory, verify the existence, current utilization, and continued

need for the equipment. A written report will be given to the program administrator,

program finance manager and MVCF board.

(d) Control system. MVCF will implement a control system to be in effect to insure

adequate safeguards to prevent loss, damage, or theft of the equipment under the

guidance of the program administrator. Any loss, damage, or theft of equipment shall be

investigated and fully documented by the program manger; if the equipment was owned

by the Federal Government, UCF shall promptly notify the Federal awarding agency.

(e) Maintenance. The program manager will implement adequate maintenance procedures

to keep equipment in good condition.

(f) Sell. Where MVCF is authorized or required to sell the equipment, proper sales

procedures will provide for competition to extent practicable and result in highest

possible return.

(g) Surplus. When MVCF no longer needs the equipment, the equipment may be used for

other activities in accordance with the following standards. For equipment with a current

per unit fair market value of $5000 or more, MVCF may retain the equipment for other

uses provided that compensation is made to the original Federal awarding agency or its

successor. The amount of compensation shall be computed by applying the percentage

of Federal participation in the cost of the original project or program to the current fair

market value of the equipment. If MVCF has no need for the equipment, MVCF shall

request disposition instructions from the Federal awarding agency. The Federal

awarding agency shall determine whether the equipment can be used to meet the

agency’s requirements. If no requirement exists within that agency, the availability of the

equipment shall be reported to the General Services Administration by the Federal

awarding agency to determine whether a requirement for the equipment exists in other

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Federal agencies. The Federal awarding agency shall issue instructions to MVCF no

later than 120 calendar days after MVCF’s request and the following procedures shall

o If so instructed or if disposition instructions are not issued within 120 calendar

days after MVCF’s request, MVCF shall sell the equipment and reimburse the

Federal awarding agency an amount computed by applying to the sales

proceeds the percentage of Federal participation in the cost of the original project

or program. However, MVCF shall be permitted to deduct and retain from the

Federal share $500 or ten percent of the proceeds, whichever is less, for the

MVCF’s selling and handling expenses.

o If MVCF is instructed to ship the equipment elsewhere, MVCF shall be

reimbursed by the Federal Government by an amount which is computed by

applying the percentage of MVCF’s participation in the cost of the original project

or program to the current fair market value of the equipment, plus any reasonable

shipping or interim storage costs incurred.

o If MVCF is instructed to otherwise dispose of the equipment, MVCF shall be

reimbursed by the Federal awarding agency for such costs incurred in its

disposition.

o The Federal awarding agency may reserve the right to transfer the title to the

Federal Government or to a third party named by the Federal Government when

such third party is otherwise eligible under existing statutes. Such transfer shall

be subject to the following standards.

 The equipment shall be appropriately identified in the award or otherwise

 The Federal awarding agency shall issue disposition instructions within

 When the Federal awarding agency exercises its right to take title, the

made known to the recipient in writing.

120 calendar days after receipt of a final inventory. The final inventory

shall list all equipment acquired with grant funds and federally-owned

equipment. If the Federal awarding agency fails to issue disposition

instructions within the 120 calendar day period, MVCF shall apply the

standards of this section, as appropriate.

equipment shall be subject to the provisions for federally-owned

equipment.

(h) Expendable. Title to supplies and other expendable property shall vest in MVCF upon

acquisition. If there is a residual inventory of unused supplies exceeding $5000 in total

aggregate value upon termination or completion of the project or program and the

supplies are not needed for any other federally-sponsored project or program, MVCF

shall retain the supplies for use on non-Federal sponsored activities or sell them, but

shall, in either case, compensate the Federal Government for its share. The amount of

compensation shall be computed in the same manner as for equipment.

(i) Use restriction. MVCF shall not use supplies acquired with Federal funds to provide

services to non-Federal outside organizations for a fee that is less than private

companies charge for equivalent services, unless specifically authorized by Federal

statute as long as the Federal Government retains an interest in the supplies.

Conflict of Interest—in accordance with Section 42 of 45 CFR Part 74 and Part II-7 of the HHS

Grants Policy Statement.

(a) Appearance. MVCF’s standard of conduct code governing the performance of its

agents engaged in the award and administration of contracts is that no MVCF officer or

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agent will participate in the selection, award, or administration of a contract supported by

Federal funds if a real or apparent conflict of interest arises when the officer or agent, or

any member of their immediate family, his or her partner, or an organization which

employees is about to employ any of the parties herein, has a financial or other interest

in the firm selected for the award. Both the appearance and existence of conflict of

interest is prohibited.

(b) Procurement. All procurement transactions will be conducted in a manner to provide, to

the maximum extent practical, open and free competition.

(c) Financial gain. If a member of MVCF will receive financial gain or special treatment due

to a decision by MVCF, he/she must immediately acknowledge that a potential conflict of

interest exists and be excused from decision-making for that item.

(d) Locality consideration. Due to the lack of available services in rural areas, MVCF

members may be considered for paid services in compliance with stated Policies and

Procedures.

(e) Gratuities. MVCF officers and agents shall neither solicit nor accept gratuities, favors,

or anything of monetary value from contractors, or parties to subagreements. MVCF can

however receive no substantial financial interest or an unsolicited gift item of nominal

(f) Violation. Violation of this policy by any MVCF officer or agent may be grounds for

disciplinary action, up to and including legal prosecution.

Drug Free Workplace—in accordance of Sections 205 & 225 of 45 CFR Part 82,

Governmentwide Requirements for Drug-Free Workplace.

(a) Environment. Although MVCF is not established in a certain location, MVCF requires

that officers and agents of MVCF be free of illegal drug abuse. The Unlawful

manufacture, distribution, dispensing, possession, or use of controlled substances is

prohibited in the workplace.

(b) Agents. MVCF officers and agents shall not illegally use or abuse substances.

Employees must notify management, as a condition of employment, in writing within five

calendar days, if they are convicted of violating a criminal drug statute. Appropriate

personnel action must be taken, within thirty calendar days, against any employee

convicted of violating a criminal drug statue up to and including termination, or require

the employee to participate satisfactorily in a federal, state, local or law enforcement

approved drug abuse assistance or rehabilitation program. Federal agencies must be

notified in writing, within ten calendar days, if any employee engaged in the performance

of an award is convicted of violating a criminal drug statute.

Allowability of Costs—in accordance with OMB Circular A-122 and Section 201.2 of 48 CFR

(a) General. Bid and proposal costs are the immediate costs of preparing bids, proposals,

and applications for Federal and non-Federal awards, contracts, and other agreements,

including the development of cost and other data needed to support the bids, proposals

and applications. MVCF will consider bids and proposal costs incurred in the current

accounting period are allowable. Bids and proposals for past accounting periods are not

allowable, unless MVCF has established a practice that threats these costs by some

other method; they may be considered acceptable if they are found to be reasonable

and equitable. This does not include pre-award costs.

(b) Allowability. MVCF considers the following factors to determine allowability:

o Reasonableness

o Allocability

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o Generally accepted accounting principles and practices appropriate to the

particular circumstances

o Terms of the contract

o Goods and services benefit program

(c) Accounting. Contractors conducting business with MVCF are responsible for

accounting for costs appropriately and for maintaining records, including supporting

documentation, adequate to demonstrate that costs claimed have been incurred, are

allocable to the contract, and comply with applicable cost principals. The program

administrator, program manger or program financial manager may disallow all or part of

a claimed cost which is inadequately supported.

Program Income—in accordance with Section 24 of 45 CFR Part 74 or Section 25 of 45 CFR

(a) General. MVCF is encouraged to earn income to defray program costs. Program

income includes income from fees and services performed, from the use or rental of real

or personal property acquired with grant funds, from the sale of commodities or items

fabricated under a grant agreement, and from payments of principal and interest on

loans make with grant funds.

(b) Interest. Program income does include interest on grant funds, rebates, credits,

discounts, refunds, etc. and interest earned on any of them.

(c) Gross. Program income means gross income received by MVCF directly generated by

a grant supported activity, or earned only as a result of the grant agreement during the

grant period.

(d) “During the grant period”. The time between the effective date of the award reflected

in the final financial report.

(e) Uses. Program income earned during program period shall be retained by MVCF and

used in one or more of the following ways:

o Added to funds committed to the project or program, and used to further eligible

project or program objectives.

o Used to finance the non-Federal share of the project or program.

o Deducted from the total project or program allowable cost in determining the net

allowable costs on which the Federal share of costs is based.

(f) Disclaimer. If not stated in the terms of the federal award then the above option is be

(g) End of period. Unless otherwise stated, MVCF shall not have any obligation to the

Federal Government regarding program income earned after the end of the project

(h) Deduction. Costs incident to the generation of program income may be deducted from

gross income to determine program income, provided these costs have not been

charged to the award.

(i) Proceeds. Proceeds from the sale of property will be handled in accordance with the

requirements of the Property Standards.

(j) Cost sharing or match. MVCF may, when authorized, use program income to meet

the cost sharing or matching requirement for the grant agreement. The amount of the

Federal grant award remains the same.