Budget Management

As purchases are made and grant business is conducted, it is essential that Project Managers monitor progress and adhere to the guidelines provided by the funder and by Santa Fe College Rules and Procedures.

• Keep expenditures consistent with the funder-approved budget.
• [CG1]  In addition, review the account on a regular basis to ensure the accuracy of all expenses posted to the account. Keeping a backup budget also helps prevent underspending or overspending on any one line.
• Keep proper backup for all expenses. It is important that the Project Director maintain a complete and accurate set of files for all invoices, contracts, receipts, or any other expense-related documents. All communications from the funding agency regarding expenses, the grant budget, and approval for specific purchases should also be retained. These documents should be scanned and kept electronically, as well. Electronic copies of these documents should be sent to SPO upon the close of the grant period.
• Review the grant contract periodically to ensure appropriate spending.
• Adhere to the grant timelines. Generally, all equipment and almost all supplies should be purchased during the first quarter. After the second quarter, there should be little funding remaining other than salaries and other personnel costs.
• Project Directors should review their account activities, at a minimum, on a monthly basis. Any disallowed cost in a grant program account must be removed immediately. This can be done by informing the Office for Finance and requesting a journal entry.

Project Directors can contact the SPO or the Office for Finance for many types of assistance including, but not limited to, assistance with budget set-up, day-to-day communications, and periodic meetings, monthly program budget reviews, fiscal year-end account reviews, assistance with journal entries and budget transfers, assistance with required report information (such as cost-share figures), questions as to the allowability of costs, and closeout procedures.

Budget and Programmatic Changes

Revision of budget and program plans 2 C.F.R. §200.308

(a) The approved budget for the Federal award summarizes the financial aspects of the project or program as approved during the Federal award process. It may include either the Federal and non-Federal share (see definition for Federal share in § 200.1) or only the Federal share, depending upon Federal awarding agency requirements. The budget and program plans include considerations for performance and program evaluation purposes whenever required in accordance with the terms and conditions of the award. (b) Recipients are required to report deviations from budget or project scope or objective, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with this section. (c) For non-construction Federal awards, recipients must request prior approvals from Federal awarding agencies for the following program or budget-related reasons: (1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval). (2) Change in a key person specified in the application or the Federal award. (3) The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator. (4) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with subpart E of this part as applicable. (5) The transfer of funds budgeted for participant support costs to other categories of expense. (6) Unless described in the application and funded in the approved Federal awards, the subawarding, transferring or contracting out of any work under a Federal award, including fixed amount subawards as described in § 200.333. This provision does not apply to the acquisition of supplies, material, equipment or general support services. (7) Changes in the approved cost-sharing or matching provided by the non-Federal entity. (8) The need arises for additional Federal funds to complete the project. (d) No other prior approval requirements for specific items may be imposed unless an exception has been approved by OMB. See also §§ 200.102 and 200.407. (e) Except for requirements listed in paragraphs (c)(1) through (8) of this section, the Federal awarding agency is authorized, at its option, to waive other cost-related and administrative prior written approvals contained in subparts D and E of this part. Such waivers may include authorizing recipients to do any one or more of the following: (1) Incur project costs 90 calendar days before the Federal awarding agency makes the Federal award. Expenses more than 90 calendar days pre-award require prior approval of the Federal awarding agency. All costs incurred before the Federal awarding agency makes the Federal award are at the recipient’s risk (i.e., the Federal awarding agency is not required to reimburse such costs if for any reason the recipient does not receive a Federal award or if the Federal award is less than anticipated and inadequate to cover such costs). See also § 200.458. (2) Initiate a one-time extension of the period of performance by up to 12 months unless one or more of the conditions outlined in paragraphs (e)(2)(i) through (iii) of this section apply. For one-time extensions, the recipient must notify the Federal awarding agency in writing with the supporting reasons and revised period of performance at least 10 calendar days before the end of the period of performance specified in the Federal award. This one-time extension must not be exercised merely for the purpose of using unobligated balances. Extensions require explicit prior Federal awarding agency approval when: (i) The terms and conditions of the Federal award prohibit the extension. (ii) The extension requires additional Federal funds. (iii) The extension involves any change in the approved objectives or scope of the project. (3) Carry forward unobligated balances to subsequent budget periods. (4) For Federal awards that support research, unless the Federal awarding agency provides otherwise in the Federal award or in the Federal awarding agency’s regulations, the prior approval requirements described in this paragraph (e) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e)(2) of this section applies. (f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for Federal awards in which the Federal share of the project exceeds the simplified acquisition threshold and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. The Federal awarding agency cannot permit a transfer that would cause any Federal appropriation to be used for purposes other than those consistent with the appropriation. (g) All other changes to non-construction budgets, except for the changes described in paragraph (c) of this section, do not require prior approval (see also § 200.407). (h) For construction Federal awards, the recipient must request prior written approval promptly from the Federal awarding agency for budget revisions whenever paragraph (h)(1), (2), or (3) of this section applies: (1) The revision results from changes in the scope or the objective of the project or program. (2) The need arises for additional Federal funds to complete the project. (3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed consistent with applicable OMB cost principles listed in subpart E. (4) No other prior approval requirements for budget revisions may be imposed unless an exception has been approved by OMB. (5) When a Federal awarding agency makes a Federal award that provides support for construction and non-construction work, the Federal awarding agency may require the recipient to obtain prior approval from the Federal awarding agency before making any fund or budget transfers between the two types of work supported. (i) When requesting approval for budget revisions, the recipient must use the same format for budget information that was used in the application, unless the Federal awarding agency indicates a letter of request suffices. (j) Within 30 calendar days from the date of receipt of the request for budget revisions, the Federal awarding agency must review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, the Federal awarding agency must inform the recipient in writing of the date when the recipient may expect the decision.

 

Funding agencies recognize that project success requires flexibility. This includes requests for modifications to the original budget or project scope. Almost all of these changes require prior written approval from the funding agency (See 2 C.F.R. §200.308). The following instances require the Project Director, with the proper internal approvals, submit a written request for prior approval from the funding agency:

1. Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval);
2. Change in Project Director or a key person specified in the application or the award documents;
3. There is a 25% or greater reduction in the time devoted to the project, or a separation from the project for more than three months, by the approved Project Director or principal investigator;
4. The transfer of funds budgeted for participant support costs, as defined in §200.75 – Participant support costs, to other line items;
5. The inclusion, unless waived by the awarding agency, of costs that require prior approval in accordance with Subpart E of 2 C.F.R. Part 200;
6. The subawarding, transferring, or contracting out of any work under the award (that was not approved in your original proposal);
7. The need for additional funds to complete the project;
8. International travel;
9. Changes in the amount of approved cost-sharing or matching;
10. Program income; and
11. Most budget modifications.

Before deciding that a modification is needed, Project Directors should speak to their direct supervisor or Office for Finance to get their input. If a modification is needed, SPO will work with Project Directors to find the most expedient way to present the information to the agency. The Sponsored Projects Office must be notified prior to any other communication with the funding agency as communications with the funding agency regarding modifications should be agreed upon by SPO, the Office for Finance, and college administration. Additionally, the SPO office must be copied on any communication with the funding agency.

To revise a budget, a copy of the proposed budget modification must be approved by the Office for Finance prior to submission to the funding agency. Most agencies require modifications to be submitted at least 90 days before the end of the grant funding period. If budget modifications or no-cost extensions are not submitted on time, or not approved, unspent funds must be returned.

A common type of modification is the no-cost extension. Requests for no-cost extensions are not always granted, and sometimes they are not desirable. A no-cost extension extends the duration of the funding period without additional cost to the grant award. Project Directors should complete the project scope and objectives within the time allotted by the grant. No-cost extensions should only be requested if the end of the project period is approaching and additional time is needed to complete the original approved project scope and objectives, and there are sufficient funds remaining to cover the extended effort.

An extension may not be granted solely because there is money left over or because extra time is necessary due to delay caused by the grantee. Programmatic benefit must be justified. No-cost extensions may convey the impression that the recipient is incapable of fulfilling the terms of the original grant agreement and may have a detrimental effect on future funding. Extending the timeframe for some grants, particularly multi-year grants, can cause the applicant to be deemed ineligible for the subsequent funding round. So, extending a five-year grant for six months may mean that the applicant is not eligible to reapply in the next funding cycle and will lose the opportunity to receive an additional five years of funding.

No-cost extensions are a last resort to be used only if the project objectives cannot be met or if significant progress cannot be documented. If a no-cost extension is deemed necessary after consulting with college administration, a Project Director should contact the Sponsored Projects Office and the Office

for Finance for assistance. Project Directors should always have a contingency plan in the event the request is not approved.

Revision of budget and program plans 2 C.F.R. § 200.308

(a) The approved budget for the Federal award summarizes the financial aspects of the project or program as approved during the Federal award process. It may include either the Federal and non-Federal share (see definition for Federal share in § 200.1) or only the Federal share, depending upon Federal awarding agency requirements. The budget and program plans include considerations for performance and program evaluation purposes whenever required in accordance with the terms and conditions of the award. (b) Recipients are required to report deviations from budget or project scope or objective, and request prior approvals from Federal awarding agencies for budget and program plan revisions, in accordance with this section. (c) For non-construction Federal awards, recipients must request prior approvals from Federal awarding agencies for the following program or budget-related reasons: (1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval). (2) Change in a key person specified in the application or the Federal award. (3) The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator. (4) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with subpart E of this part as applicable. (5) The transfer of funds budgeted for participant support costs to other categories of expense. (6) Unless described in the application and funded in the approved Federal awards, the subawarding, transferring or contracting out of any work under a Federal award, including fixed amount subawards as described in § 200.333. This provision does not apply to the acquisition of supplies, material, equipment or general support services. (7) Changes in the approved cost-sharing or matching provided by the non-Federal entity. (8) The need arises for additional Federal funds to complete the project. (d) No other prior approval requirements for specific items may be imposed unless an exception has been approved by OMB. See also §§ 200.102 and 200.407. (e) Except for requirements listed in paragraphs (c)(1) through (8) of this section, the Federal awarding agency is authorized, at its option, to waive other cost-related and administrative prior written approvals contained in subparts D and E of this part. Such waivers may include authorizing recipients to do any one or more of the following: (1) Incur project costs 90 calendar days before the Federal awarding agency makes the Federal award. Expenses more than 90 calendar days pre-award require prior approval of the Federal awarding agency. All costs incurred before the Federal awarding agency makes the Federal award are at the recipient’s risk (i.e., the Federal awarding agency is not required to reimburse such costs if for any reason the recipient does not receive a Federal award or if the Federal award is less than anticipated and inadequate to cover such costs). See also § 200.458. (2) Initiate a one-time extension of the period of performance by up to 12 months unless one or more of the conditions outlined in paragraphs (e)(2)(i) through (iii) of this section apply. For one-time extensions, the recipient must notify the Federal awarding agency in writing with the supporting reasons and revised period of performance at least 10 calendar days before the end of the period of performance specified in the Federal award. This one-time extension must not be exercised merely for the purpose of using unobligated balances. Extensions require explicit prior Federal awarding agency approval when: (i) The terms and conditions of the Federal award prohibit the extension. (ii) The extension requires additional Federal funds. (iii) The extension involves any change in the approved objectives or scope of the project. (3) Carry forward unobligated balances to subsequent budget periods. (4) For Federal awards that support research, unless the Federal awarding agency provides otherwise in the Federal award or in the Federal awarding agency’s regulations, the prior approval requirements described in this paragraph (e) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e)(2) of this section applies. (f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for Federal awards in which the Federal share of the project exceeds the simplified acquisition threshold and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. The Federal awarding agency cannot permit a transfer that would cause any Federal appropriation to be used for purposes other than those consistent with the appropriation. (g) All other changes to non-construction budgets, except for the changes described in paragraph (c) of this section, do not require prior approval (see also § 200.407). (h) For construction Federal awards, the recipient must request prior written approval promptly from the Federal awarding agency for budget revisions whenever paragraph (h)(1), (2), or (3) of this section applies: (1) The revision results from changes in the scope or the objective of the project or program. (2) The need arises for additional Federal funds to complete the project. (3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed consistent with applicable OMB cost principles listed in subpart E. (4) No other prior approval requirements for budget revisions may be imposed unless an exception has been approved by OMB. (5) When a Federal awarding agency makes a Federal award that provides support for construction and non-construction work, the Federal awarding agency may require the recipient to obtain prior approval from the Federal awarding agency before making any fund or budget transfers between the two types of work supported. (i) When requesting approval for budget revisions, the recipient must use the same format for budget information that was used in the application, unless the Federal awarding agency indicates a letter of request suffices. (j) Within 30 calendar days from the date of receipt of the request for budget revisions, the Federal awarding agency must review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of 30 calendar days, the Federal awarding agency must inform the recipient in writing of the date when the recipient may expect the decision.