County Administration of Grants and Contracts

The County Agricultural Extension District Council is legally responsible for all money handled within and through the county extension office, including dollars received from grants and contracts. Responsibility includes but is not limited to determining the budget, signing vouchers, signing checks, reviewing accountability reports for the county extension program, and reporting receipts and expenditures to the public.

Definitions

Public Funds

Public funds are those funds owned by a public entity such as a school or County Agricultural Extension District. This includes both tax and non-tax moneys. Non-tax dollars can come from a variety of sources including grants and contracts.

All public funds are the legal responsibility of the Extension Council. Legal responsibility assigned by law cannot be transferred by Council action. Public funds have the same legal requirements for accounting, reporting, auditing and allowing, proper signatures, segregation of duties, publishing, bonding, investing and uniform financial accounting procedures. The District's Fiscal Policy governs the use of these funds. By law expenses paid with money collected and disbursed by the County Extension District shall serve the public purpose. The public purpose is determined solely by the Extension Council based on local expectations and standards for the spending of public funds.

Fiscal Policy

In overseeing public funds, the County Agricultural Extension District has a responsibility to control the financial risk for the public and legal risk for employees. One method of risk control is to develop, implement, and maintain sound fiscal policies and procedures for the operation of extension programs. To be effective these policies and procedures must include all money held or passing through the county extension office and be:

• Based on the Iowa Code and Generally Accepted Accounting Principles (GAAP).
• Adopted by the County Agricultural Extension District Council.
• Communicated to all employees, volunteer groups and cooperating entities, giving them guidance and direction in accepting and spending public funds that meets with public scrutiny. To enhance the internal control environment, employee job descriptions and computer systems documentation are used to clearly define authority and responsibility.
• Implemented in a consistent and accountable manner.

Each county has a 15-16-page document that defines the Extension District's policies and procedures for handling county funds. All funds handled by the County Extension Council will basically be accounted for in one of two funds: Education Operating Fund or Agency Fund.

Education Operating Fund

The Education Operating Fund receives money from the county tax levy, program fees, resale items, grants and contracts, and other sources that support the operation of all Extension programs. The Extension Council makes all decisions related to the operating fund, including the annual budget, use of funds, and reporting.

Agency Fund

An Agency Fund may be established by the Council to hold funds in custody for a non-Extension entity cooperating with Extension programs. Examples are few and include Empowerment Board Funds, employee pop fund, etc. The entity must be legally separate and has sole decision-making authority for the money held in the agency fund. The entity, not the Council, makes all decisions regarding use of the moneys held in custody.

Grants and Contracts

Grants and contracts are awards of public or private funds for specific projects or programs. These awards:

• Are the responsibility of the Council; the Council makes all decisions regarding receipts and expenditures.
• Require a separate tracking of receipts and expenditures for each grant or contract.
• Usually have start and end dates, programmatic and fiscal reporting requirements, and other guidelines imposed by the granting agency. (The exception are fixed-price, unrestricted gifts.)

Budget and Reporting

With assistance from the County Extension Education Director (CEED), the Extension Council annually prepares a budget for the Education Operating Fund for the fiscal year (July 1 through June 30). The budget includes an estimate of grant funds anticipated for the fiscal year. Field specialists give the best estimate they can of the income and expenses that are anticipated for the fiscal year as a result of grants.

Also on an annual basis, the Council publishes a full and detailed report of all receipts and expenditures in both the Education Operating Fund and the Agency Fund for the last fiscal year. Receipts and expenditures from grant funds are included in this report.

Typical County Procedures Regarding Grants & Contracts

The Extension Council and staff assess a proposed project's compatibility with priority programs when considering whether or not to seek outside funding. This includes the expected outcomes, an estimate of administrative costs to be supplied by the Extension District, and how or if the program will be funded after the grant ends.

1. Proposals for grants affecting the County Agricultural Extension District, including cooperative projects with grants received and managed by other agencies, should be reviewed by the Extension Council and CEED prior to the submission of the proposal.
2. Grant proposals involving a commitment of field specialists or CEED staff time should be approved by the Area Extension Director(s) prior to submission.
3. Grants affecting the County Agricultural Extension District may be received by the County or processed through Iowa State University. Generally, this is determined at the time of application. There are incentives and disincentives for both situations. See the handout titled "incentives/disincentives."
4. The Extension Council must approve all grants and contracts that will be received by the County Agricultural Extension District. Following the Council's approval, the Council chairperson, not the CEED, must sign the contract or grant agreement.
5. To the extent allowed by the granting agency, the County Agricultural Extension District may recover administrative costs of carrying out the contract or grant. This may be accomplished by building direct costs into the proposal budget (staff time, supplies, telephone, travel, office services, etc.) or by including a portion of the District's indirect cost rate, if established by the District and properly filed. Note: The recovery of administrative costs as direct costs to the project is preferred.
6. The County Extension Council is legally responsible for the grant award, including but not limited to signing vouchers, signing checks and reviewing accountability reports.
7. The County Extension Council delegates responsibility of day-to-day operations to the CEED.
8. The County Extension Council and CEED regularly review and authorize payment of all expense vouchers.
9. The CEED presents to the Council the following financial reports for each grant award: details on each voucher/check, monthly budget-to-actuals report (Quicken), and monthly itemized category report (Quicken).
10. Interest earned on grant funds may have restrictions. Check the requirements on each grant award to determine how interest is to be handled. Federal grants normally require that any interest earned by the recipient agency on federal grant dollars must be returned to the U.S. Treasury.

Last updated: 4/14/04

cj 3/31/04

Contact: Sharon Larwick larwick@iastate.edu