The 18 profile defines clearance patterns for grant drawdown calculations. It defines the days and percentages for the various clearance patterns used by the State.

Example:

14-3   ENTRY OF GRANT BUDGETS

The use of grant budgets is an optional feature of R⋆STARS. 29 profile (discussed in Section 14-1) contains indicators which define whether billable and/or expendable budgets will be used.

When grant expendable or billable budgets are utilized, the budgets must be entered as standard financial transactions of R⋆STARS. These budgets are entered using transaction codes established specifically for this purpose. Billable and expendable budgets require separate transactions.

Once the grant budgets are established, they may be adjusted (increased or decreased) at any time by entering adjustment transactions into the system in the same manner as the original budgets were entered. Normally, decrease adjustments are entered with the Reverse Code set to R.

Many levels of budgets are available for grants. Appropriations, agency budgets, allotments and financial plans are discussed in the R⋆STARS Reference Manual, Chapter #6, Budgeting. In addition to these, billable budgets and expendable budgets may also be recorded and controlled. These optional budgets may be recorded at the grant, phase, Agency Code 1 levels, fund and/or object levels. Billable and expendable budgets are discussed below.

Billable Budgets

Billable budgets may be entered at the grant, phase level, Agency Code 1 level and/or by Expenditure Object and/or fund within a grant or phase. These budgets serve to limit the amount of the billing transaction calculated. Billable budgets may be used not only to limit the amount of the charge but to limit the types of expenditures billed and or tasks (i.e., Agency Code 1). In this way, only specified expenditure object codes and/or tasks would be billed even though other costs may be charged to the grant.

It should be noted that if the billable budget is selected and no budget is entered, billing transactions will not be reported.

Billable budgets, if utilized, must be entered at the same level as the Expenditure Posting Level Indicator in the 29 profile and must be entered for the appropriate Objects. In addition, billable budgets must be entered with Agency Code 1 if Agency Code 1 is present in the key to the 29 profile. Unless these rules are followed, expenditures will not be billed.

Revenue, expenditure reimbursement and accounts receivable transactions may be limited to the billable budget amount if certain billing methods are chosen. The Grant/Project Billing Subsystem calculates the total cumulative-to-date expenditures, deducts previously billed amounts and compares the result to the billable budget. The billing is then reported for an amount up to the billable budget amount.

Users should monitor billable budgets to ensure that they are reasonable and that the appropriate amount of billing transactions are being generated.

In summary, a budget must be recorded for each expenditure record established in the Grant Table which is to be billed.

Expendable Budgets

The second type of grant budgets, expendable budgets, may be recorded to limit the amount of expenditures charged to the grant. When expenditure transactions are entered against a grant, the available balance of the expendable budget is compared to the amount of the expenditure.

Like billable budgets, expendable budgets may be recorded at the grant, phase level, or Agency Code 1 level and/or object level within a grant or phase. By entering expendable budgets at a level below grant or phase (i.e., Agency Code 1), the types of expenditures charged against a grant may be controlled. For example, if fatal control is selected for an expendable budget for Services and Supplies, only Services and Supplies expenditures may be charged to the grant.

Expendable budgets must be recorded using the same rules as those described above for billable budgets. That is, expendable budgets must be entered at the same level as the Expenditure Posting Level Indicator in the 29 profile and must be entered for the appropriate objects. In addition, expendable budgets must be entered with Agency Code 1 if Agency Code 1 is present in the key to the 29 profile.

Encumbrance and expenditure transactions are controlled against the grant expendable budget if this option is chosen. If the Grant Control Type Indicator in the 29 profile is set to 1, encumbrance and expenditure transactions which exceed the expendable budget will fall to the Error File. If set to 2, these transactions will post to the financial files (including the Project Financial Table) and a warning message will be issued. If set to 0, these transactions will post to the financial tables and will not be evidenced by an error message.

The Budgetary Transaction Entry screen and coding instructions are covered in Chapter #3.

14-4   ENTRY OF SUBGRANTEE FINANCIAL ACTIVITY

R⋆STARS provides the ability to track financial activity for subgrants. To utilize these features, subgrants must be established in the 31 – Subgrantee Control Profile. The profile screen and form follows this section. In order to track subgrantees it’s important to understand that special transactions posting to subgrantees must be entered in R⋆STARS.

Once the Subgrantee codes are established, the following subgrantee financial information may be recorded in R⋆STARS:

◾ Subgrantee contracts

◾ Disbursements to subgrantees

◾ Subgrantee expenditures

The entry of subgrantee financial activity is described below. Input coding instructions for financial transactions are included in Chapter #3.

Recording Subgrantee Contracts

Subgrantee contracts, also known as allocations, are recorded as a commitment against the grant and as an expendable budget against the subgrant. Data entry input coding instructions are discussed in Chapter #3.

Recording Disbursements to Subgrantees

Disbursements to subgrantees may be recorded as advances or reimbursements. In either case they are recorded against both the subgrant (as an advance) and against the grant (as an expenditure).

Recording Subgrantee Expenditures

Expenditures made by subgrantees are not expenditures of the governmental entity. Therefore, these amounts are recorded as memorandum entries in R⋆STARS for reporting purposes only. Subgrantee expenditures are recorded against the subgrant only – not against the grant.

Example:

14-5   REPORTING AND INQUIRY

The grant-related reporting capabilities of R⋆STARS include on-line inquiry, system-generated reports and user-requested reports. These capabilities provide a full range of financial information for both reimbursable and non-reimbursable grants. The following paragraphs describe the on-line inquiries and hard copy reports available.

on-line Inquiry

The primary source of on-line financial information for grants is available through the 66 – Grant Financial Inquiry Screen. The 66 screen provides access to record and financial inquiries to the Grant Table. The key to this table is Agency, Grant, Phase, Agency Code 1, Appropriated Fund or Fund and Comptroller Object or Agency Object and Grant Object. The level of information maintained in this table is defined in the 29 profile indicators. Detail procedures for using the on-line inquiry features are provided in Chapter #3.

Example:

The 67 – Grant Transaction Inquiry Screen provides an on-line mechanism for viewing grant related financial information at the detail level by Balance Type. This screen accesses data in the Accounting Event or Inactive Accounting Event Tables by Agency, Grant, Phase, Agency Code 1, Balance Type and Record Type. Another discussion of this screen can be found in Chapter #3.

Example:

System-Generated Reports

The DAFR4041 Grant Billings Detail Report is generated automatically each time the Grant Subsystem is run, both during the month for grants scheduled for non-month-end billing and at month-end. (For non-month-end billings, this report is generated only when requested through the 92 profile.)  This report displays the recovery transactions calculated by the system.

The DAFR4061 Letter of Credit Transaction Detail Control Report is generated automatically each time a Grant Subsystem is run. This report displays the accounts receivable detail generated by Grant Billing methods 7 & 8.

The DAFR4062 Letter of Credit Transaction Generation Control Report is generated automatically each time a Grant Subsystem is run. This report displays the total CMIA transactions read and IN transactions written.

The DAFR4063 Letter of Credit Transaction Generation Control Report is generated automatically each time a Grant Subsystem is run. This report displays the total CMIA transactions read, IN transactions written, agencies processed, and IT transactions read.

User-Requestable Profile Reports

Except for the Grant/Project Billings Detail Report, all grant related reports are user requestable. Agencies must specifically request these reports by following the procedures outlined in Chapter #11.

14-6   GRANT EXAMPLES

This section presents a number of examples which illustrate varying levels of complexity in using the Grant Subsystem. Completed forms are included to display profile entries. A brief description of the examples follows.

Example 1

Agency 101 will receive a federal grant to fund community training programs. All costs for these programs will be incurred internally; no contractors will be involved. The agency will not require billing detail reports because the grant will be received in equal annual installments. The report of grant revenues and expenditures will be used to support the program costs. No budgets will be recorded.

The D47 and 29 profile screens shown below are used to establish the grant. This is the simplest use of the Grant Billing Subsystem.

Example 1a

Example 1b

Example 2

Agency 101 will receive state reimbursement for 90% of its actual costs in implementing a new automated system for tracking welfare payments. The Federal Government will fund the remaining 10%. There is a cap on the grant for Fiscal Year 2008 in the amount of $720,000. Therefore, total expenditures may not exceed $800,000 (90% state, 10% local).

To support preparing claims to the Federal Government, Agency 101 has completed the D47, 29 and 92 profiles as displayed below. Note that the grant is billable each week as indicated in the 29 profile and that the 92 profile has been set up to request the billing detail reports for the first week.

Example 2a

Example 2b

Example 2c

14-7   CASH MANAGEMENT IMPROVEMENT ACT (CMIA) PROCESSING

The 1990 Cash Management Improvement Act (CMIA) is related to the methods used by the Treasury Department to disburse federal assistance funds to the state. CMIA typically affects final approved expenditures charged to a grant which has an automatic billing method and which is subject to CMIA. It may also involve other costs, such as indirect allocations. The CMIA process determines the CMIA due date, which is the date the State Treasurer can draw down funds without incurring interest liabilities, and sets up a receivable for the money owed to the State by the Federal Government. The due date is based on clearance patterns defined in the 18 profile. If the transaction is a direct deposit or wire transfer, the CMIA due date is equal to the payment due date plus one.

More specifically, after the nightly payment processing cycle, but before the Input, Edit & Update (IEU) process, the IT file is accessed to determine which records are final approved cash expenditures or other general ledger accounts charged to a grant. It further identifies which of those grant expenditures have billing methods set to automatic (7) or (8) on the 29 profile.

Billing Method (7) bills the total expenditures while Billing Method (8) bills total expenditures times an indirect rate that has been set on the 29 profile. With Billing Method (8), certain object ranges can be excluded.

The system may look up the Clearance Pattern on the 29 profile. The clearance pattern, if entered, must be in the 18 profile. The Clearance Patterns are used to determine how the Grant drawdown will be performed (e.g.; %), and what date. The CMIA Due Date then becomes the Estimated Days Clearance plus the Payment Due Date.

The Clearance Pattern can be entered on the 29 profile or on the 17 profile. If a Clearance Pattern is not found on the 29 profile, the system will look up the Grant Number, Phase, Agency Code 1, and Object Range from the billable transaction. If not found, the system will make its search less specific until it can find a match. The Agency Code 1 Indicator is located on the 29 profile and 17 profile, and is used to make tasks more specific within a certain grant number and phase. With the 17 profile, Clearance Patterns can be entered for a series of object ranges for a given Grant. If a Clearance Pattern is entered on the 17 profile, it must exist on the 18 profile. With the 18 profile, a Clearance Pattern can be entered using Estimated Days Clearance, Average Days Clearance or any other pattern type supported by the days and percentage concept. If Clearance Patterns are entered for a Grant on the 17 profile  the Clearance Pattern field should not be entered for this grant in the 29 profile. If the transaction is a direct deposit or wire transfer, the CMIA Due Date is equal to the Payment Due Date.

An accounts receivable transaction, using the CMIA Due Date, is generated to indicate an amount due from the Federal Government using the coding block values found in the Recovery Segment of the 29 profile. On the 29 profile the CMIA accounts receivable transaction code must be specified.

The system may generate a cash receipt transaction for the agency. The transaction code on the accounts receivable transaction is used to look up the Generate Transaction Code and Document Type from the 28A and 28B Transaction Code Profiles. The transactions are then posted in the Batch IEU cycle the following night.

DAFR7870 Letter of Credit Drawdown can be generated that lists the outstanding accounts receivable documents for which receipts have not been posted. This report will be used to review past due receivables and to prepare Letter Of Credit (LOC) requests. On the 29 profile, the LOC  Number is entered. The LOC Number is an informational data field. It is used for reporting purposes only.