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FastFactsFeature Presentation

June 17, 2010

We are using audio during this session, so please dial in to our conference line…

Phone number: 877-468-2134 Participant code: 182500

© 2010 The Johns Hopkins University. All rights reserved.

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Today’s TopicWe’ll be taking a look at…

Implications of Cost Sharing and Program Income

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Today’s Presenter

JoAnn Theys and Ana PavichJhpiego

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Session Segments

PresentationAna and JoAnn will discuss cost sharing, the criteria used for valuations, setting up an auditable system for tracking, and program income.During their presentation, your phone will be muted.

Q&AAfter the presentation, we’ll hold a Q&A session. We’ll open up the phone lines, and you’ll be able to ask questions. Ana and JoAnn will answer as many of your questions as time allows.

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Contact Us

If you would like to submit a question during the presentation or if you’re having technical difficulties, you can email us at: fastfacts@jhu.eduYou can also send us an instant message!

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How To View Full Screen

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Survey

SurveyAt the end of this FastFacts session, we’ll ask you to complete a short survey. Your honest comments will help us to enhance and improve future FastFacts sessions.

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Administering a USAID Award - Implications of Cost

Sharing and Program Income

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Agenda

What is cost share?

What is program income?

How are they different?

Key references

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Cost Share

Definition - cost sharing or matchingThat portion of project or program costs not paid for by the Federal Government

226.2

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Cost ShareCriteria - allowable when the costs:

Are verifiable from your recordsAre not included in another USG projectAre necessary and reasonable for proper and efficient accomplishment of objectivesAre allowable under your cost principles (OMB Circular A-21)Are not paid by the USG under another awardAre provided for in your approved cost share budget

Key = “are verifiable from your records”Be diligent – auditors will question your cost share

226.23.a.1-6

226.23.a.1

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Cost ShareREQUIRED AS APPLICABLE STANDARD PROVISIONS FOR U.S.

NONGOVERNMENTAL RECIPIENTS

12. COST SHARING (MATCHING) (July 2002) APPLICABILITY: This provision, along with 22 CFR 226, is applicable when the recipient has agreed or is required to cost share or provide a matching share.

COST SHARING (MATCHING) (July 2002) a. If at the end of any funding period, the recipient has expended an

amount of non-Federal funds less than the agreed upon amount or percentage of total expenditures, the Agreement Officer may apply the difference to reduce the amount of USAID incremental funding in the following funding period. If the award has expired or has been terminated, the Agreement Officer may require the recipient to refund the difference to USAID.

b. The source, origin and nationality requirements and the restricted goods provision established in the Standard Provision entitled "USAID Eligibility Rules for Goods and Services" do not apply to cost sharing (matching) expenditures.

[END OF PROVISION]

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Cost Share – Shortfall Example

• Any shortfall in cost share means:– For active awards –

• Your organization may have the federal portion of the project reduced (e.g., #1 = $200,000), or

• Your organization may be spending its unrestricted funds to make up the difference (e.g., #2 = $20,000)

– For expired awards –• Your organization may be required to refund the

difference to the USG (e.g., #1 = $200,000) Original

Federal Share Reduced

Federal Share Total ShortfallOriginal 1,000,000$ 10% 100,000$ -$ 1,100,000$ -$

#1 Shortfall 1,000,000$ 800,000$ -$ 10% 80,000$ 880,000$ 200,000$ #2 Shortfall 1,000,000$ 10% 100,000$ 8% 80,000$ 1,100,000$ 20,000$

Original Recipient Cost Share

Reduced Recipient Cost Share

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Cost Share

Valuation – document basis for valuations:

Volunteer services – account for time the same as employees and rates should be consistent with similar paid work in the local labor marketSupplies – fair market value (FMV)Equipment / buildings / land – fair rental value (FRV) or FMV, if it meets the award’s purposeDonated space – FRV

Same rules apply to subrecipients reporting cost share to you

226.23.b-j

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Cost Share Examples

DOES countVolunteer services which are an integral

and necessary part of the projectDonated vehicle from Ford/Toyota

DOES NOT countYour staff’s donated time

Office equipment provided to the project from another USAID project that has ended

Unallowable costs as defined in OMB Circular A-21, Section J

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Program Income

Definition – program income Gross income directly generated by a supported activity or earned as a result of the award (see exclusions in 226.24.e and h) Program income includes, but is not limited to:

Income from fees for services performedThe use or rental of real or personal property acquired under federally-funded projectsThe sale of commodities or items fabricated under an awardLicense fees and royalties on patents and copyrightsInterest on loans made with award funds

226.2

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Program Income

Options: additive, cost share, deductive (default)After award, earned income is yoursNet program income (deduct costs related to the generation of the program income from the gross income)No obligation to USG with program income earned on copyrights, patents, trademarks, and inventions produced under the award

226.24.e

226.24.f

226.24.h

226.24.b-d

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Program Income Examples

DOES countFair Market Value fees charged to an NGO using your USAID project vehicle in ZambiaRental or usage fees, such as those earned from fees charged for use of computer or laboratory equipment purchased with grant fundsFunds generated by the sale of commodities and research materials, such as tissue cultures, cell lines, or research animalsProceeds from the sale of software or publicationsRegistration fees charged to participants for a workshop or conference sponsored by a project

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Program Income Examples

DOES NOT countProceeds from the sale of your 5-year old project vehicle you no longer needInterest earned on advances of Federal fundsPatient care creditsReceipt of principal on loans, credits, discounts, etc. or interest earned on them Taxes, special assessments, levies, and fines raised by government recipients

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Key References

22CFR226

OMB Circular A-21

“Mandatory” and “Required as Applicable” Standard Provisions for U.S. Nongovernmental Recipients

“Mandatory” Standard Provisions for Non-U.S. Nongovernmental Recipients

JHU Policy on Program Income

JHU Policy on Cost Sharing

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ConclusionToday we covered:

Cost share

Program income

How they are different

Key references

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We’re going to open the phone lines now!

There will be a slight pause, and then a recorded voice will provide instructions on how to ask questions over this conference call line.

We’ll be answering questions in the order that we receive them.

We’ll also be answering the questions that were emailed to us during the presentation.

If there’s a question that we can’t answer, we’ll do some research after this session, and then email the answer to all participants.

Q&A

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Thank You!

Thank you for participating!We would love to hear from you.

Are there certain topics that you would like us to cover in future FastFacts sessions?Would you like to be a FastFacts presenter?Please email us at: fastfacts@jhu.edu

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Survey

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Thanks again!