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Contents:

  • Budget Crosswalks
  • Cost Allocation
  • Definition of Line Item Expense Categories
  • Project end date vs. contract end date & closeout reporting requirements
  • Contract Attachments related to Audit Requirements & “Parent & Child”

Budget Crosswalks

Q. Why does my contract budget look different than my application budget?

My annual grant contract budget looks different than the revised budget I submitted. How do I know which line items to use for reporting my costs in the Itemized List of Expenditures, Request for Funds and Final Evaluation?

A. Thanks for being careful about financial reporting by line item. The State of Tennessee Central Procurement Office regulation 06930-03-01-.17 provides that the form of all contracts shall be established by the Central Procurement Office.

For many years, the Tennessee Arts Commission has annually requested a policy exception to use the detailed budget format that external panel adjudicators have favored. With the new Online Grants System, the Tennessee Arts Commission grant contracts will follow the official state budget format. If your agency has other grants from state agencies, this format will look familiar. If not, here’s a crosswalk with color coding so you can tell how the numbers you entered in the revised budget are translated into the Contract Grant Budget and how you should report costs in the Itemized List of Expenditures, Request for Funds and Final Evaluation.

 

Q. Rolling Grant Line Items. How does the application budget translate to the official contract budget for rolling grants like Touring, Special Opportunities, Teacher Incentive, Mini-Grants and Technical Assistance, when available?

A. Here’s the crosswalk for rolling grants, which have simpler budgets.

Q. What if my organization wants to do cost allocation?Cost Allocation

A. If your agency receives grants from other state or federal agencies in addition to the Tennessee Arts Commission and plans to split costs among different grants, you must provide an approved cost allocation plan to the Tennessee Arts Commission. If you need to develop a cost allocation plan or have questions, please review State of Tennessee Accounting Policy 3: Cost Allocation Plans for Subrecipients of Federal and State Grant Monies at https://www.tn.gov/assets/entities/finance/attachments/policy3.pdf and/or contact Carol.White@tn.gov

Definition of Line Item Expense Categories

Q. What are the official definitions of line items an annual grant might use, primarily for match?

A. See below. Just because an expense type is included as part of the official state definition does not mean it is an allowable expense for a Tennessee Arts Commission grant if the grant category guidelines are more narrow. However, any expenses below could qualify as matching funds.

POLICY 03 Object EXPENSE OBJECT LINE-ITEM CATEGORY 1  

DEFINITION PER STATE ACCOUNTING POLICY 3

1. 2 Salaries, Benefits & Taxes  

Compensation, fees, salaries and wages paid to officers, directors, trustees and employees.   Benefits include the organization’s contributions to pension plans and to employee benefit programs such as health, life and disability insurance; and the organization’s portion of payroll taxes such as social security and medicare taxes and unemployment and workers’ compensation insurance.

 

4, 15 Professional Fee, Grant & Award 2  

Fees to outside professionals, consultants and personal-service contractors, including individual artists or technical contractors.   Also, any awards, grants, subsidies and other pass-through expenditures to individuals or other organizations (like ABC subgrants).   Include allocations to affiliated organizations. Include scholarships, tuition payments, travel allowances and equipment allowances to clients and individual beneficiaries.

 

5, 6, 7, 8, 9, 10 Supplies, Telephone, Postage & Shipping, Occupancy, Equipment Rental & Maintenance, Printing & Publications  

Office supplies, housekeeping supplies, food and beverages, and other supplies.

Telephone, cellular phones, beepers, telegram, FAX, email, telephone equipment maintenance and other related expenses.

Postage, messenger services, overnight delivery, outside mailing service fees, freight and trucking, and maintenance of delivery and shipping vehicles.

Expenses for use of office space and other facilities, heat, light, power, other utilities, outside janitorial services, mortgage interest, real estate taxes and similar expenses.

Expenses for renting and maintaining computers, copiers, postage meters, other office equipment and other equipment, except for automobile expenses, reportable on line 11

Expenses for producing printed materials, purchasing books and publications and buying subscriptions to publications.

 

11. 12 Travel, Conferences & Meetings  

Expenses for travel, including transportation, meals and lodging, and per diem payments.   Include gas and oil, repairs, licenses and permits, and leasing costs for company vehicles. Include travel expenses for meetings and conferences.   Include vehicle insurance.

Expenses for conducting or attending meetings, conferences, and conventions. Include rental of facilities, speakers’ fees and expenses, printed materials and registration fees.

 

18 Other Nonpersonnel Expenses  

Allowable expenses for advertising, bad debts, contingency provisions, fines and penalties, independent research and development, organization, page charges in professional journals, rearrangement and alternation, recruiting and taxes. Include the organization’s and employees’ membership dues in associations and professional societies. Include other fees for the organization’s licenses, permits, registrations, etc.

 

20 Capital Purchase 2  

Purchases of fixed assets. Include land, equipment, buildings, leasehold improvements, and other fixed assets. (These expenses are not allowable for arts grant funds, only for match).

 

22 Indirect Cost  

Must be made in accordance with an allocation plan approved by your cognizant state agency.

 

25 GRAND TOTAL  

Sum of all expenses above.

 

Project end date vs. contract end date & closeout reporting requirements

Q. Why am I asked to closeout my grant “within 30 days of the project end date or June 15 whichever is sooner” when contract clause C.7 Disbursement Reconciliation and Close Out says I have 30 days after the contract end date?

A. This is a known problem. It’s a conflict between state accounting policy and state procurement policy. The state central accounting office requires that state agencies finish payments for the fiscal year ending June 30 by a deadline that varies but is generally July 7. Requests for payment received after that date must be “accrued” which from a practical perspective means that the payment is delayed for several weeks.

The Tennessee Arts Commission manages more than 1000 grants annually with a staff of less than 20 people. To review final closeout reports from that many grantees in the month of June and resolve issues that arise is a major undertaking, truly impossible if everyone waits until the last minute. That’s why we ask every grantee to submit their closeout report and final request for payment within 30 days of the project end date or June 15, whichever is sooner.

Contract Attachments related to Audit Requirements & “Parent & Child”

Q. What should I do with Contract Attachments B and C related to Audit Requirements and Parent Child Information?  

A. Not much, unless you get more than $750,000 in state and federal funds annually.

These TN Central Procurement Office required attachments relate to standard contract clause D.19. Audit Report. Unless your agency receives $750,000 or more in state and federal grants in FY17, check the box that says NOT required to have a special audit subject to Comptroller requirements per D.19. However, Tennessee Arts Commission requirements for MCI, PS and CEP audits still apply. Attachment C is only required if your organization is subject to the special audit.

To be fully compliant with state policy, your organization should scan a copy of Attachment B indicating not subject to audit and email it to the Central Procurement Office at least 90 days before the end of your organization’s fiscal year.

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