Although Federal regulations do not require physical segregation of cash deposits, the accounting systems of all recipients and subrecipients must ensure that agency funds are not commingled with funds from other Federal agencies.
Some programs, such as the Justice Assistance Grant program, require the deposit of funds into a trust fund. In addition, sometimes a high-risk designation will require a recipient to segregate awards into separate bank accounts.
How a recipient can avoid commingling funds:
A recipient with three awards has a bank account with a balance of $50,000. The subsidiary accounting ledgers for the cash account clearly show how much cash is available for each award: for cash award 1, $15,000; for cash award 2, $30,068; and for cash award 3, $ 2,880.
Sample Ledger | Award 1 | Award 2 | Award 3 |
---|---|---|---|
Grant Revenue | $23,500.00 | $50,000.00 | $10,800.00 |
Program Income | $1,169.00 | 0.00 | 0.00 |
In-Kind | 0.00 | 0.00 | 0.00 |
Total Revenue | $24,669.00 | $50,000.00 | $10,800.00 |
Personnel/Direct Labor | $4,750.00 | $10,600.00 | $1,950.00 |
Fringe @ 33% Actual | $1,567.50 | $3,498.00 | $643.50 |
Subtotal | $6,317.50 | $14,098.00 | $2,593.50 |
Travel | 0.00 | $45.00 | 0.00 |
Equipment | 0.00 | $3,610.00 | $4,606.50 |
Supplies | $2,042.50 | $263.80 | 0.00 |
Contractual | 0.00 | 0.00 | 0.00 |
Other | $430.00 | $103.20 | 0.00 |
Indirect @ 10% Actual | $879.00 | $1,812.00 | $720.00 |
Total Expense | $9,669.00 | $19,932.00 | $7,920.00 |
Revenue Balance | $15,000.00 | $30,068.00 | $2,880.00 |
If your accounting system does not make it possible to identify funds and expenditures with a particular program (with the identification supported by source documentation), a site visit or an audit of that program may be conducted and may result in those costs being questioned or disallowed.
How a recipient can make sure that funds and expenditures are clearly identifiable with specific programs within the accounting system:
A recipient has three active awards and four staff members who charge a portion of their time to all three awards. One expense account with payroll costs for all four staff members is not sufficient for purposes of accounting for each award. Each staff member must complete time and attendance records which clearly show the time each spent on each award by name or code; the recipient maintains these time and attendance records and uses them to distribute actual payroll costs to each award.
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