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Grant Agreement

Office of Accountability — Grant Agreement Overview

HIGHLIGHTS OF KEY REQUIREMENTS

Part I    Budget — Your grant funds and how they may be spent.

The Part I Budget identifies the specific cost categories that must be used to report allowable grant expenditures.  The amounts and categories shown on this page CANNOT be altered without a formally executed modification as outlined in Part 5.7.  Any discretionary variance percentage or variance amount allowed will be clearly identified in their respective column.

Budget line item definitions are listed on this page to provide examples of costs that may be charged against the individual line items.

Please contact your DCEO grant manager if you are unsure about budget line variance or eligible costs PRIOR to incurring them.  This may help avoid any disallowance of the expenditure.

If the grant agreement allows any grant funds to be passed through to a sub-grantee, you are required to inform them of and ensure that they adhere to the DCEO grant agreement requirements and regulations.

Part II   Scope of Work — What you are to do and achieve with grant funds.

The scope of work (SoW) contains specific intent, purpose, objectives, timelines, and other vital information regarding your project.

The SoW should be very explicit in stating what tasks will be performed, when they will be performed, and what the expected outcome(s) will be.  It may identify specific benchmarks and goals to be met both during and after the grant period.

DCEO references SoW when monitoring the overall performance of a grantee and when verifying the completion of their objectives.  The Department expects the grantee to maintain documentation supporting the completion of the objectives stated in the SoW.

Part III  Grant Fund Control Requirements

Audits Requirements — Audit requirements to which you may be subjected to depending on grant type and funding amounts.

The grantee must comply with audit requirements stipulated in the Grant Agreement or they will be in jeopardy of losing grant funds.  Audit requirements vary based on grant program and whether the grant is funded by state or federal funds.  Refer to your grant agreement with DCEO.

The grantee’s audit must be performed by a certified public accountant and conducted in accordance with accounting principles generally accepted in the United States of America, or another comprehensive basis of accounting.

Reporting Requirements — How you are required to report on your project’s activity and expenses.

The grantee must follow reporting requirements as stipulated in the Grant Agreement Section 3.2 and the Welcome Package.

The grantee will be required to report regularly and provide supporting documentation on grant activity and progress including detailed budget and expenditure information, status of key deliverable items and performance measures.  See the Grantee Reporting Guidelines for more information.

Reports can only be signed by the authorized signatory or officially authorized designees as recorded by DCEO.

Fiscal Recording Requirements — How financial activities of your project are to be recorded and documented.

The grantee must maintain a structured financial management system to properly record all expenditures of the grant funds.

The grantee must also maintain appropriate documentation to support grant expenditures and activities for DCEO monitoring reviews.  All documentation should be kept in accordance with the record retention policy as stated in Section 3.6 in your grant agreement.

The grantee is responsible for the expenditure of all funds in accordance with the grant agreement including those funds spent by sub grantees.

Due Diligence in Expenditure of Funds — Rules you have to follow to spend grant funds.

Expenditures recorded against the grant funding must be spent in accordance with generally accepted sound business practices, applicable laws and regulations; must be within the terms and conditions of the agreement; must not exceed amounts deemed to be prudent and reasonable; and must be accounted for in accordance with generally acceptable accounting principles.

Monitoring — How the Department will monitor your grant activity.

The Department will continually monitor the grant activity through required reporting and submission of deliverables.  At any time, the Department may request additional supporting documentation from the grantee.  The Department will continuously work with the grantee to ensure the grantee’s understanding of grant requirements.

Onsite visits will occur as required by grant program and at the discretion of the Department.

Records-Retention — How long you are required to maintain grant-related records and supporting documentation.

The Department will continually monitor the grant activity through required reporting.  The grantee must retain all books, records and supporting documentation related to the grant for a minimum of four years following the Department’s most recently issued written approval of all required close-outs, unless the Department notifies the grantee that a longer period is required.

The records-retention period may be deferred for some of the following factors:  if a grantee is in noncompliance with any deliverable and/or Grant Agreement requirement; if a monitoring review has been scheduled; or if the grantee has been referred to Legal.

Part IV   Terms and Conditions

Rules you need to follow in the performance of your grant/project.

This part of the grant agreement contains provisions identifying specific requirements and controls, public information requirements, remedies in the event of breach of contract, and other critical information about the management of your grant project and funding.

Please contact your DCEO grant manager if you are unsure about any of the requirements or statements in this section.

Project Schedule; Extensions — Defines the project schedule dates and provides guidance in requesting grant period changes.

Unless identified specifically in the Scope of Work (SoW), the beginning date and ending date as shown in the Notice of Grant Award (NOGA) shall be the entire length of the project and funding period.

All deliverables and performance reporting will be based upon these dates.

Costs can only be incurred within the dates indicated on the NOGA, unless specifically stated otherwise within Part II SoW.

If you become aware of an inability to meet these performance dates, a written request must be made to the Department and approved prior to the ending date as specified in the NOGA (or SoW as stated above).  The written modification request must specifically explain the proposed project schedule changes and include appropriate justification.

If this modification request is approved, a signed executed copy of the modification will be provided to you by the Department.

Modifications in Budget — How to request and justify changes to your budget.

All grant funds must be spent in accordance with the approved Budget in Part I.

If there is indication that expenditures may exceed a particular budget line, in an amount greater than any allowed variance, a written request must be made to and approved by the Department prior to incurring the cost.  The request must clearly state the need for the modification and amounts of the revisions.

Failure to request a necessary modification in advance may result in a disallowance of the costs.

Deposit of Grant Funds — How grant funds are to be held.

Each grant program may have specific instructions for the grantee regarding the deposit of grant funds.  Please refer to your individual grant agreement Part 4.6 to determine your grant requirements.  Please contact your DCEO grant manager if you are unsure about the deposit requirements of your grant.

Interest on Grant Funds — How to account for interest earned and used, if applicable.

Interest earned on grant funds must be accounted for during the life of the grant and disclosed appropriately in the final closeout report.

If you are allowed to retain interest income:

If the grant agreement specifically allows you to retain interest, the final closeout report should be prepared to show full earning and expenditure of the interest.  The balance of project expenditures should be charged against the grant funds.  A check made payable to the Department should be submitted with the final closeout report for any unspent grant funds, including unspent interest income.

If you are required to return interest income:

If the grant agreement specifically prohibits you from retaining interest, the financial close-out package should be prepared to show full earning of the interest and no expenditure against these earnings.  A check made payable to the Department should be submitted with the final closeout report for the full amount of interest earned plus any unspent grant funds.

Program Income — How to account for program income earned with grant funds and used, if applicable.

Program income is gross income received by the grantee or sub grantee directly generated by a grant-supported activity, or earned only as a result of the grant agreement during the grant period.  Program income, earned with grant funds, must be accounted for during the life of the grant and disclosed appropriately in the final closeout report.

The retention and expenditure of program income could be different for each grant.  Please refer to Section 4.8 of your grant agreement to determine if program income is allowed to be earned for your grant.  If this section is present in your agreement and you have further questions, please contact your DCEO grant manager.

Part V     General Provisions — Requirements of all grant agreements issued by the Department

Final Financial Status Report — Your requirement to submit a Final Financial Status Report and any unspent funds within forty five days after the ending date of the grant.

All grants issued by the Department require the grantee to prepare and submit a final financial status report and return any unspent grant funds within forty five days after the ending date of the grant as shown in the Notice of Grant Award.

This refund requirement is statutorily mandated by the Grant Funds Recovery Act (30 ILCS 705/1).

The grantee will indicate on the Financial Status Report that the report is the final report for the grant.

Assistance in completing the final financial status report and/or determining the amount of any refund due the Department may be obtained by contacting your DCEO grant manager.

Part VI    Certifications — Binding statements you are required to fulfill.

All grants issued by the Department are subject to certain state and/or federal certifications.  Many of these certifications are specifically identified in the grant agreement, but the representation is not all inclusive.

These certifications are mandatory in order to receive funding from the state and federal government.

The grantee’s execution of the grant agreement serves as confirmation of the certifications contained in Part VI.

Subsequent discovery of a false certification may result in suspension or termination of the Agreement and recovery of the grant funds.