EPA Publication Number 202K09001
                           EPA Contract Number EP-W-08-042
         Learner Manual - Module 6
        Financial System Requirements
TRIBAL, U.S. TERRITORIES AND
INSULAR AREAS ADMINISTRATIVE
AND FINANCIAL GUIDANCE
MANUAL FOR ASSISTANCE
AGREEMENTS
"A Nation is a stable, historically developed community of people
who share territory, economic life, distinctive culture, and language.
Office of Environmental Justice, US. EPA
U. S. Environmental Protection Agency
Updated August 2013

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                     Module 6: Financial System Requirements
      This  manual  was  originally developed by  the  U.S.
      Environmental Protection Agency  for  Tribal Nations,
      but content also pertains to U.S. Territories and Insular
      Areas. Exception: U.S. Territories and Insular Areas are
      treated as states under Part 31 (and also under Part 35,
      Subpart A  for PPGs,  unlike Tribes  that are  covered
      under Subpart B).
                                   Contents
MODULE 6: FINANCIAL SYSTEM REQUIREMENTS .
  FINANCIAL SYSTEM REQUIREMENTS	3
  FINANCIAL POLICIES AND PROCEDURES	4
  ACCOUNTING PROCESSES	7
  FINANCE TRACKING	9
    Flexible accounting system	9
    Chart of accounts	10
    Document reference numbering system	10
    General Journal	10
    General Ledger	11
  FINANCIAL REPORTING	13
    Financial Status Reports	17
  ATTACHMENT TO MODULES	24
    Answers to Quizdom Actionpoint Questions	24
        EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
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                           Module 6: Financial System Requirements
                           Module 6:  Financial System Requirements
   Tribal,  U.S. Territories and
   Insular Areas Administrative and
   Financial Guidance for
   Assistance Aareements
   Module 6:
   Financial System Requirements
   The Grants Management Process
                                   •Module i! The Grant
                                   Appl itatiDn Process
                                   •Module a: Assistance
                                   Agreements
                                   •Module 31 Federal
                                   Funding
                                     jntabilrtyand
Module 9; Disadvantaeed
Business EntEip rises [DEEs)
Module ID: Assistance
Agreement Monitoring and
Ooseost
  • Module 6: Finaicial
  System Requirements
  • Module 7; Accounting Pol
  and Procedure
  • Module8: Source
  Documentation and
  Purchasing
   Financial Management System
Module 6 will cover the essentials of an effective
financial management system that a grant recipient
will need to successfully administer a grant.
    •   Financial System Requirements
    •   Financial Policies and Procedures
    •   Accounting Processes
    •   Finance Tracking
    •   Financial Reporting

Financial policies and procedures must be in
writing. Develop procedures. Learn the rules and
regulations. Review and update procedures often.

Apply policies and procedures consistently
across programs and projects.
                                                     Establish an accounting
                                                     process using:
                                                         •    Chart of
                                                             accounts
                                                         •    Document
                                                             reference
                                                             numbering
                                                         •    General journal
                                                             entries
                                                         •    General ledger
                                                             entries
Track award finances
using:
    •   Posting
        reference
        numbers
    •   Debit
        columns
    •   Credit
        columns
    •   Balance
        columns
                                                     Submit financial status reports to EPA. Include a
                                                     summary of activities. Send reports semi-annually.
                                                        Financial System Requirements
                                                        • Maintain separate accounts for each federally issued
                                                         assistance agreement.
                                                        • Keep accurate books and records.
                                                         • Failure to maintain accurate financial records will
                                                           impact the recipient's ability to receive future federal
                                                           funding.
                                                        • Every department needs to be trained.
                                                         • Each staff member needs to understand his or her rule
                                                           and responsibility in the process.
                                                        • Each project must be tracked independently.

                                                         Financial System Requirements
                                                     Why do we need a financial system?
                                                     EPA regulations require recipients (i.e., Tribal
                                                     Nations) to maintain separate accounts for each
                                                     federally issued assistance agreement to avoid
                                                     confusion about how the funds are spent or how
                                                     much is received per project. A financial
                                                     management system enables a Tribal Nation to
                                                     keep accurate books and records. Failure to
                                                     maintain accurate financial records will impact the
                                                     recipient's ability to receive  future federal funding.

                                                     Because financial management systems require
                                                     different departments to enter data into the system,
                                                     every department needs to be trained. Each staff
                                                     member needs to understand his or her role and
                                                     responsibility in the process. The financial
                                                     management system is a central depository for
                                                     tracking federal funding. It is important to
                                                     remember that each project must be tracked
                                                     independently, so that there is no mixing of funds
                                                     from different federal programs.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
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                           Module 6:  Financial System Requirements
   Ensure Compliance

    • Compliance with EPA regulations is reviewed by
     auditors.

    • EPA auditors use the EPA Administrative and
     Financial Onsitc Review Questionnaire.
    • Recipients should he able to implement each of
     the processes listed on the questionnaire, or
     explain why they are not necessary.
What does an effective financial management
system need?
EPA auditors review a Tribal Nation's accounting
and financial management system to ensure that the
system is in compliance with EPA regulations. The
EPA Administrative and Financial Onsite Review
Questionnaire lists goals and objectives that an
auditor uses to monitor a recipient's compliance.

This guidance is for tribal governments that are
eligible for any grant awards. Your Tribal Nation
must have a set of written financial and accounting
policies. Your Tribal Nation should be able to
implement each of the processes listed or explain
why they are not necessary for your organization.

The EPA Administrative and Financial Onsite
Review Questionnaire is provided in Module 10
and the Appendix.

   Financial Policies and Procedures
Financial policies and procedures are necessary for
effective management of the following systems:
    •   Accounting
    •   Personnel
            o  Timekeeping
            o  Payroll
    •   Travel
    •   Matching
            o  Cost Sharing
            o  In-Kind Contributions
            o  Program Income
    •   Procurement
            o  Contracts
            o  Subagreements
            o  Purchasing
    •   Disadvantaged Business Enterprises
    •   Property Management
    •   Internal Controls
Write Policies and Procedures for:


              Accounting

       Personnel / Timekeeping
          Personnel / Payroll
                                                           I
 Mulching, Cost Sharing, In-Kind Contributions
 and Pn >grum lnc< >me
 Procurement / Contracts / Subagreements
 Disadvantaged Business Enterprises
 Property Management
             Internal Controls
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                          Module 6:  Financial System Requirements
      Learner Notes

      The "goals and objectives" for an efficient
      and effective financial management
      system are outlined in the EPA
      Administrative and Financial Onsite
      Review Questionnaire.
        •   The EPA Administrative and
            Financial Onsite Review
            Questionnaire is provided in the
            Appendix and in Module 10 of this
            Manual.
        •   The Appendix also contains the
            Code of Federal Regulations, 40
            CFR Part 31, which includes
            31.20(b), an administrative
            checklist for reviewing
            administrative and financial
            systems.
              •   Use it to make sure you have
                  the necessary systems in
                  place and operational before
                  you need them.

      Please take a few minutes to locate and
      examine the EPA Administrative and
      Financial Onsite Review Questionnaire.
                                                        An effective financial management
                                                        system must account for:
                                                         A. Award funds drawn down and dispersed
                                                         B. Award project expenses and income
                                                         0. Environmental compliance
                                                         D. Subcontracts and subawards
                                                         E. All of the above
                                                        Know the Terminology
What basic financial terminology do we need to
understand?
Before getting into the seven financial management
standards, it would be helpful to understand a few
basic terms.

Many useful terms are provided in:
    •   The Appendix
    •   EPA's online glossary at
        http://www.epa.gov/ogd/recipient/glossarv.htm

If you would like additional examples or
explanations, ask your Grants Specialist. Your
Grants Specialist will be happy to provide
individual assistance.
                                                            Learner Notes
                                                            It is time for another vocabulary exercise.
                                                            Take a minute to complete Activity 6.a
                                                            (online at www.petetribal.org).
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Last Updated April 2013                                                                         Page 5 of 27

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                           Module 6:  Financial System Requirements
   Fund accounts record financial resources and
   obligations in object class categories established
   in the:
   A. Assistance agreement award
   B. EPA document of limitations
   C. EPA regional office policies
   D. Federal restrictions tor grant management
   E. All of the above
   Who is responsible for implementing internal
   controls to safeguard resources ensuring accuracy,
   reliability, and compliance?
   A. EPA headquarters
   B. EPA regional officials
   C. The Tribal Nation / Recipient
   D. The award project manager
   E. All of the above
   Essential Components of a
   Financial Management System
What are the essential components of a financial
management system?
A financial management system ensures proper
reporting and control at all levels of the Tribal
Nation's government. A system must be in place
and operating for the Tribal Nation to be in
compliance with federal regulations.

The essential components of a financial
management system include:
        1.   Accounting Policies and Procedures
        2.   Internal Controls
            Inventory and Equipment
            Management
            Budget Controls
            Real and Personal Property
            Assignment
            Cost Accounting (direct, indirect,
            reasonable, allowable, and allocable)
            Source Documentation
These components are described in Modules 6, 7,
and 8.
6.
7.
   Confidential Business Information

    Tribal Nations request the confidential
    business exception, like any other recipient,
    but EPA will determine whether or not
    information \\ill be considered "confidential
    business information" (CBI).
What are the EPA rules for confidentiality?
Tribal Nations are unique entities, differing
substantially from state, local, and federal
governments. However, EPA documents are public
documents regardless of the entity that they are
awarded to. There are no special EPA rules for
confidentiality for Tribal Nations; rules are the
same for all recipients. Tribal Nations request the
confidential business exception, like any other
recipient, but EPA will determine whether or not
information will be considered "confidential
business information" (CBI).

  For example, after September 11, 2001 security
  issues increased in importance. EPA funded an
  initiative to map all water sources, their
  tributaries and flow patterns. The data gathered
  was determined to be "confidential business
  information". The grant recipient for this project
  was authorized to keep project records private,
  not sharing vital documents with the public.
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                           Module 6: Financial System Requirements
   Federal Regulations
     Accepting an award agreement means the recipient
     agrees to comply with:

     • Title 40 CFR Part 31 - Administrative Requirements

     • OMB Circular A-8y - Cost Principles
       codified in Title 2 CFR Part 225

     • OMB Circular A - 133 (When the recipient spends
       $500,000 or more in federal funds)

     All documents are available to the public upon request.
Which financial rules are we agreeing to follow
when we get an award?
When the Tribal Nation accepts a federal assistance
award they agree to follow the accounting and
financial standards established in the federal
regulations 40 CFR Part 31 (Administrative
Requirements) and the OMB Circular A-87 (Cost
Principles).

EPA, the Inspector General, the Comptroller of the
United States, or any other duly authorized
representative has the right to timely and
unrestricted access to any books, documents,
papers, or other records of the Tribal Nation that
are pertinent to the awards. They have the right to
conduct audits, examinations, and take excerpts,
transcripts, and copies of such documents. This
right also includes timely and reasonable access to
Tribal personnel for the purposes of interviews and
discussions related to such documents.
   Additional Guidance
                          Native American
                          Finance Officers
                          Association guidelines
                          the New Financial
                          Reporting Model for
                          Tribal Governments -
                          Implementing
                          Government Accounting
                          Standards Board
                          ((JA^ID Statement 34
In addition to the guidance contained in this
Manual, Tribal Nations can go to the Native
American Finance Officers Association website at
http://www.nafoa.org/ to find guidelines from their
publication New Financial Reporting Model for
Tribal Governments—Implementing Government
Accounting Standards Board (GASB) Statement 34.
The Government Accounting Standards Board
Statement is available at http://www. gasb.org/.

In 2002 the Aleutian/Pribilof Islands Association
developed a manual of management and
administrative policies and procedures. You may
find it helpful as a guide when writing your own
policies and procedures. This manual is provided in
the Appendix.
   Which of the following is necessary for
   financial accounting information to be
   protected by EPA as "confidential business
   information"?

   A. Generally Accepted Accounting Principles
      (GAAP) '
    B. Public disclosure of information policies
   C. Approval of request for confidential business
      information protection
    D. Financial reporting and tracking
   E. All of the above
        Accrual Accounting Method
    The accrual method of
    accounting is
    recommended by EPA.
     = Income is counted ivhen the
      underlying grant eligible
      expenditures are made,
     = Expenses are counted when
      the goods or services are
      received or incurred.
           Accounting Processes
Which accounting system is recommended?
There are two types of accounting methods: cash
and accrual. The recipient needs to choose either
the cash or accrual accounting method and use it
throughout the award period. It is important to
understand the basics of these two principal
methods of keeping track of income and expenses.
These methods differ only in the timing of
transactions, including sales and purchases, when
they are credited or  debited to your accounts.

The  accrual method or accrual basis accounting
is the more commonly used method of accounting.
Under the accrual method, transactions are counted
when the order is made, the item is delivered, or
the services occur, regardless of when the money
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                           Module 6:  Financial System Requirements
for them (receivables) is actually received or paid.
In other words, income is counted when the sale
occurs, and expenses are counted when the goods
or services are received. You don't have to wait
until you see the money, or actually pay money out
of your checking account, to record a transaction.
         Cash Accounting Method
   The cash method of
   accounting is accepted
   when used consistently
   throughout the award
   period.
     • Incomeisnotcounteduntil
      cash (or a check) is actually
      received.
     = Expenses are not counted
      until they are actually paid.
Under the cash method or cash basis accounting,
income is not counted until cash (or a check) is
actually received, and expenses are not counted
until they are actually paid.

The method you use is your decision although
accrual is generally the accepted system for
nonprofit organizations. EPA highly recommends
the accrual basis of accounting.
   Which accounting method does EPA
   recommend?
    A. Accrual basis
    B. Assets and liabilities
    C. Cash basis
    D. Fund basis
    E. None of the above
   Computerized Accounting System
    A computerized
    accounting system is
    not required by
    EPA, but it does
    make record
    keeping easier.
Do we need to use an automated or
computerized accounting system?
The federal assistance agreement requirements do
NOT specify the type of accounting system a
Tribal Nation must have, but the requirements do
specify what the accounting system must be able to
do.

As Tribal Nations receive more federal awards,
they may decide to convert to a computerized fund
accounting system, if they have not already done
so. Various accounting systems are used for
tracking federal funds.
   Which of the following is not a necessary
   requirement for your Tribal Nation's
   accounting system?

   A. Compliance with federal regulations
   B. Computerized record keeping
   C. Personnel dedicated to managing award funds
      and reports
   D. Separate, accurate, current, and complete
      records
   E. Documented accounting policies and
      procedures
                                                          Accounting Procedures
    Accounting procedures are
    part of a financial system
    that consists of:
     =  Policies,
     =  Procedures, and
     =  Documents
Supporting the:
  = Collecting
  = Recording,
  = Disbursing, and
  = Reporting
           Of all the award recipient's financial activity.
What are the required accounting procedures?
Accounting procedures are the processes a Tribal
Nation uses to record all of its financial
transactions. Accounting procedures are part of a
financial system that consists of policies,
procedures, and documents supporting the
recording, disbursing, and reporting of the Tribal
Nation's financial activity, so that the Tribal
Nation's leadership (elected administration),
department heads, and the federal government have
good information about the financial status of a
project.
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                           Module 6:  Financial System Requirements
   Sample Policy and Procedure Categories
Financial Management Policies and Procedures
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
100
3.00
4.00
5.00
i-, no
7.00
8.00
9.00
10.00
11.00
12.00
l J on
14.00
Introduction/Purpose
ConttsctcrKcrt.fiLi.! Pul'lir Ai.. cum'tiM (i.KA)
Consultants
Cash Receipts and Deposits
Computerized Check Register
Check Writing and Supporting Documentation
Purchasing
Documentation of Expenditures
Inventory/Property Management
Payroll Preparation
Budgeting Process Program Reporting
Financial Reports
Reporting Requirements
Audits
Indirect Costs
Pagel
Pace 1
Page 2
P,»r ,'
Page 3
P.ig. :
Page 4
Page?
Par- S
Page 9
Page 10
P.ig.< 1 1
['„;--• 12
Page 13
Each award recipient is unique. For example, your
Tribal Nation may or may not need to address
these sample categories in your written policies
and procedures.
   A financial accounting system consists of
   policies, procedures, and documents that
   support the	of a Tribal Nation's
   financial activity.
   A. collecting
   B. recording
   C. disbursing
   D. reporting
   E. All of the above
   Finance Tracking

    • A flexible accounting system
      • manual or aut"m,il>'tJ
     ° Allrms for establishing a unique account tracking
      ci ide li M' each individual grunt
     " Follows the Generally Accepted Accounting
      Principles QjAAP)
                         Module?...
             Finance Tracking
How should we keep track of award finances?
Tribal Nations must be able to address the
financial/accounting reporting and tracking
requirements described in 40 CFR Part 3 1 and
OMB Circular A-87 as well as Tribal Council
requirements and Tribal laws or ordinances. These
documents describe the types of things that are
needed for a technically correct financial
accounting system.
          Flexible accounting system
What is a flexible accounting system?
A flexible accounting system (manual or
automated) allows for establishing a unique
account tracking code for each individual grant to
record all its financial transactions including
revenue, expenses, assets, accounts payable,
accounts receivable, cost pools to support indirect
cost rates, project costs, and so on.

Tribal Nations should have these basic items in
their flexible accounting system and follow
Generally Accepted Accounting Principles
(GAAP).
      •   Chart of accounts
      •   Document reference numbering system
      •   General journal
      •   General ledger
      •   Dates of expenditures
      •   Posting reference numbers
      •   Debit columns
      •   Credit columns
      •   Balance columns

See Module 7, Internal Controls for an explanation
of Generally Accepted Accounting Principles
(GAAP) or visit http://www.fasab.gov/accepted.html.
   Which of the following are not necessary
   components in a Tribal Nation's accounting
   system?

   A. Debit, credit, and balance columns
   B. Time stamps and personnel initials
   C. Dates and posting reference numbers
   D. General journal,  ledger, and chart of accounts
   E. Flexible accounting and document reference
      numbering s\ 'stems
   What is the greatest value of a flexible
   accounting system?

   A. It automatically fixes our errors.
   B. It lets us account for more than one source of
      funding.
   O. It lets us manually make changes.
   P. It monitors accounts receivable and payable.
   E. None of the above
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                             Module 6: Financial System Requirements
   Chart of Accounts

    •  The chart of accounts is
      the "backbone" of an
      accounting system and
      lists all of the accounts in
      the general ledger.

    •  Each transaction is
      coded to an account.
5-13°°  Bank eh acting''savings
     Accounts Receivable
     Accounts Payable
     salary Payable
     Salary Benefits payable
     Deferred Revenue
5-2350
5-4000
5-6000
5-6100
5-63=0

5-6650
5-6^00
5-6&oo
     Salary
     Salarv B enefits
     Contract Labor
     printing
     Supplies
     Equipment Rental
     Groap aieetbigs
     Travel
     Indirect
                Chart of accounts
What is the chart of accounts?
The chart of accounts lists all of the accounts in the
general ledger of the Tribal Nation. Each account is
identified with an account number and it is used to
record and classify financial data including revenue
and expenses. The chart of accounts could include
EPA projects or "funds," rent, utilities, and other
essential expenses.
      Document  Reference Numbering System

      Recorded in the GeneralJournal
      Identifies transactions
      Needs to beused consistently

            Cash Disbursements Journal for FY a o o ii/ 2012
DRN Date Description Amount
010021
010022
010023
12/08/2011
12/16/2011
12/17/2011
Excavation
Gate installation
Clarifler
829.600. oo
$537.84
$548.35
   Document reference numbering system
What does a document reference numbering
system do?
A document reference numbering system is
designed by a Tribal Nation to identify the
transactions that are entered into the general
journal. The Tribal Nation needs to use this system
consistently for like transactions.

If the document reference number is the Check
Number, then every time a check is written, the
Check Number is used, rather than a file number or
other identifier.
                                What does a document reference numbering
                                system do?
                                A. Code project ledgers
                                B. Enter items into the general jc mrnal
                                C. Identify transactions
                                D. Inventories equipment
                                E. All of the above are possible.
                                            GeneralJournal
                                                          Also known as the
                                                          Book of Original Entry
                                                          Is the accounting
                                                          record of transactions
                                                          Is recorded in
                                                          chronological  order
                                Note: With accountingsofbvarepackages, otherjoumalssuchas payroll.
                                cash receipts, cash disbursements, procurement, accounts payable and
                                accounts recetabte are often used instead of the general journal.
                                             GeneralJournal
                             What should be recorded in the general journal?
                             The general journal, also called the Book of
                             Original Entry, is the first place the Tribal Nation
                             records anything affecting their financial well-
                             being. The general journal is the accounting record
                             where transactions are initially recorded in
                             chronological order.

                             The general journal is a daily log of transactions. It
                             needs to include the following:
                                 •   Date the item is being recorded
                                 •   Account number and name of the
                                     transaction that it affects
                                 •   Debit column—the amount that is debited
                                     to the account (subtracted from the
                                     balance)
                                 •   Credit column— the amount that is
                                     credited to the  account (added to the
                                     balance)
                                 •   Transaction description—an explanation
                                     of why the transaction was recorded into
                                     the Tribal Nation's accounting records
                                 •   Document reference number—the Tribal
                                     Nation's reference code for the kind of
                                     transaction being recorded.
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                           Module 6:  Financial System Requirements
For example, when payments are made the
reference number can be the Check Number. If a
receipt of ordered supplies is recorded, then the
vendor's invoice number or a voucher number may
be used.
               General Ledger
 Compilation of all accounts that show detailed
 transactions by account.
• Accounts are listed in account number order in the
 ledger.
• Journal transactions are posted in the General Ledger by
 Account number.
 Shows account:
    Beginning  balances
    Detail of changes
    Ending balances       ^^f  ^ ^gk
                General Ledger
What goes in the general ledger?
A general ledger contains all asset, liability, and
equity accounts for the Tribal Nation. It lists the
beginning balance, the detail of changes, and the
ending balance in each account. The entire group
of accounts maintained by a Tribal Nation is
referred to collectively as the ledger.
         Dating Accounting Records

         The j ournal records original date and
          the ledger records data by account.
                                  General
                                  Ledger
                                 Date transaction
                                 was recorded in
Which date do we put in the ledger?
The date entered into the general ledger must be
the same date that appears in the general journal.
The date in the general journal is the date the
information is originally recorded in the general
journal.
                                                           Posting Reference Number

                                                        Each posting to the General Ledger is given a
                                                        Posting Reference Number (PRN)

                                                        The PRN identifies the page of general journal or
                                                        any other journal (such as payroll) on which the
                                                        transaction is recorded.
                                                              Differentsystails mayhaw usedirferentidentifiers such as
                                                              *journal,r or ^entries."
                                                       What is a posting reference number?
                                                       The posting reference number refers to the page of
                                                       the general journal that the transactions come from.
                                                       General journal pages are usually numbered
                                                       sequentially for the entire year.
                                                     General Ledger Column Entries

                                                            Debit    -     Deduct arm >unl paid <>r
                                                                          expenses

                                                           Credit    +     Add deposits, refunds,
                                                                          and income

                                                          Balance    s     Debits and credits must
                                                                          balance equally

                                                   What goes in the debit column?
                                                   The debit column must contain the deducted or
                                                   paid amount that was recorded in the general
                                                  journal.

                                                   What goes in the credit column?
                                                   The credit column must contain the amount added
                                                   (i.e., deposit, refund, etc.) that was recorded in the
                                                   general Journal.

                                                   What goes in the balance column?
                                                   The balance column reports the result of adding
                                                   and subtracting from the account. Debit and credit
                                                   columns must balance equally.
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                            Module 6:  Financial System Requirements
Table 1: Sample General Journal
December 31, 2011
Trans#
1
1
2
2
3
3
4
4
4
5
5
6
6
7

7

8
8
9

9

10

10

11
11
11
12
12
13
13
13
13
14

14

15
15
TOTAL
Type
check
check
check
check
check
check
wire
wire
wire
check
check
check
check
check

check

check
check
check

check

check

check

wire
wire
wire
JE
JE
JE
JE
JE
JE
JE

JE

JE
JE

Date
12/06/11
12/06/11
12/07/11
12/07/11
12/11/11
12/11/11
12/12/11
12/12/11
12/12/11
12/12/11
12/12/11
12/13/11
12/13/11
12/15/11

12/15/11

12/16/11
12/16/11
12/20/11

12/20/11

12/20/11

12/20/11

12/26/11
12/26/11
12/26/11
12/30/11
12/30/11
12/30/11
12/30/11
12/30/11
12/30/11
12/31/11

12/31/11

12/31/11
12/31/11

DRN#
ck92
ck92
ck93
ck93
ck94
ck94
w#25
w#25
w#25
ck95
ck95
ck96
ck96
ck97

ck97

ck98
ck98
ck99

ck99

cklOO

cklOO

w#26
w#26
w#26
jel
jel
je2
je2
je2
je2
je3

je3

je4
je4

Name
AA Airlines
AA Airlines
Ox Rentals
Ox Rentals
Rest Hotel
Rest Hotel
Tribal Bank
Tribal Bank
Tribal Bank
ABC Supply
ABC Supply
XYZ Hall
XYZ Hall
Computer
Supp.
Computer
Supp.
J. Doe
J. Doe
USA
construct.
USA
construct.
Office Supply
CO.
Office Supply
CO.
Tribal Bank
Tribal Bank
Tribal Bank
EPA
EPA
Tribal Bank
Tribal Bank
Tribal Bank
Tribal Bank
USA
construct.
USA
construct.
Tribe indirect
Tribe indirect

Memo
J. Doe airline ticket
J. Doe airline ticket
rent for Dec-08
rent for Dec-08
J. Doe hotel exp.
J. Doe hotel exp.
Payroll ending 12/12/08
Payroll ending 12/12/08
Payroll ending 12/12/08
parts for EPA project
parts for EPA project
Start-up EPA meeting
Start-up EPA meeting
Computer supplies

Computer supplies

travel per diem
travel per diem
12/01/08-12/17/08

12/01/08-12/17/08

Office supplies

Office supplies

Payroll ending 12/26/08
Payroll ending 12/26/08
Payroll ending 12/26/08
Dec-08 accrual
Dec-08 accrual
Payroll accrual 12/31/08
Payroll accrual 12/31/08
Payroll accrual 12/31/08
Payroll accrual 12/31/08
12/18/08-12/31/08

12/18/08-12/31/08

Dec-08 indirect
Dec-08 indirect

Account
025-6700 - Travel
025-1300 -Bank
025-6500 - Equip. Rent
025-1300 -Bank
025-6700 - Travel
025-1300 -Bank
025-5000 - Salary
025-5900 - Salary Ben.
025-1300 -Bank
025-6320 - Supply
025-1300 -Bank
025-6650 - Group meet.
025-1300-Bank
025-6320 - Supplies

025-1300-Bank

025-6700 -travel
025-1300-Bank
025-6000 - Contract

025-1300-Bank

025-6320 - Supplies

025-1300-Bank

025-5000 - Salary
025-5900 -Salary Ben.
025-1300-Bank
025-4000 - Income
025-1800 -A/R
025-5000-Salary
025-5900-Salary Ben.
025-2200-Salary Payable
025-2300-Sal.Ben.Payable
025-6000 - Contract

025-1300 -A/P

025-6800 - Indirect
025-2100-A/P

Debit
700.00

1,200.00

800.00

9,000.00
1,530.00

2,800.00

400.00

1,500.00



600.00

2,000.00



500.00



8,500.00
1,440.00


40,000.00
3,000.00
530.00


3,000.00



2,500.00

80,000.00
Credit

700.00

1,200.00

800.00


10,530.00

2,800.00

400.00


1,500.00


600.00


2,000.00



500.00



9,940.00
40,000.00



3,000.00
530.00


3,000.00


2,500.00
80,000.00
                                                                                                  Page 1
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013                                                                              Page 12 of 27

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                           Module 6: Financial System Requirements
      Learner Notes
      Activity 6.b (online at www.petetribal.org)
      provides you with the opportunity to
      practice entering information into a
      General Ledger.
   Why do we need both a general
   journal and a general ledger?
   A. Cross checking requires the bookkeeper to look
      at transactions in different ways.
   B. It helps accountants check mathematical
      accuracy.
   C. The journal records data on multiple accounts.
   D. The ledger tracks data by separate accounts.
   E. All of the above
     Common  Financial Reports
      Balance Sheet

    •  Income Statement/Profit & Loss

    •  Budget vs. Actual Expenditures

            Financial Reporting
What must be reported?
Accurate, current, and complete disclosure of the
financial results of financially-assisted activities
must be made in accordance with the financial
reporting requirements of the assistance agreement
award. The provisions of 40 CFR 31.41 discuss
financial reporting requirements in greater detail.

40 CFR Part 31 is provided in the Appendix.

Which financial reports are prepared and when?
Two financial reports are produced by a Tribal
Nation from the general  ledger accounts on a
monthly basis a (1) balance sheet and (2) financial
statement.

A balance sheet lists:
    •    All the assets
    •    Things of value
    •    Liabilities (payments due to third parties)
    •    Fund balance or fund equity
                                                                 Sample Balance Sheet
                                                                       BALANCE SHEET SUMMARY
                                                                           DKSTb*- 31,2011
                 Accounts !U;e:vsb«

                 TDM Current Asset!


              TOTAL ASSETS

              UASILmcS a EQUITY

                 Current L»Diities
                                 3,500.00
                                 3,COO.OO
                                 600.00
                                 : ::•: :•'
                 TMal Current LjaDirrties

                 £,«*,

              TOTAL LIABILITIES & EQUITY
A statement of revenues, expenditures, and
changes in fund balance breaks down the funds
into various revenue streams (e.g., assistance
agreements). Each grant has its own budget with
different line-item or cost categories. These cost
categories are established in the chart of accounts.
The statement of revenues, expenditures, and
changes shows how much money has been spent
from each cost category and how much of the
budgeted balance remains.
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
tast Updated April 2013
                                     Page 13 of 27

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                            Module 6: Financial System Requirements
        Sample Income Statement
INCOME STATEMENT/PROFIT & LOSS
December 31, 2O11
income
s~T
F-^nge Ber*Fts

EV^KMM
Suppfes

Copit^Lrfon
Other
hwfirect

JO,OOQ.CQ
203OO.OO
3.5OO.OO
5,OOO.OO
•1^00.00
1^OO.OO
400.00
aoo.oo
1300.00
...2JOQ.QQ
4Q.QQO.OO
oo.:-:'
               Budget vs. Actual
                   BUDGET vs. ACTUAL
                    December 31,2011
       3,5OO.OO
       5,OOO.OO
       4.BQO.OO
       1,200/X5
        4OOBO
        EOO.OO
       1300.00
       2.50000
J5.QOO.OQ   aO.QQQ.QQ
                       22,000.00
                       5,700.00
                       7,000.00
                       =,OOO.OO
                       1,20000
                        500.OO
                        SOOXKJ
                       1..SOO.OO
                     1.500XB
                      200.00
                     2,OOO.OO
                      200.OO
                      0.00
                      200 fXl
                      1OO.OO
                      500.03
A financial statement of revenues, expenditures,
and changes in fund balance shows:
    •   Break-downs in the funds into various
        revenue streams
    •   The budget
    •   What has been put against the project
        funds in specific cost categories
    •   Balances remaining in funds
   Yearly Financial Reporting
   Federal Financial
   Report (FFR) SF 425
Check the "terimand
conditions" of the award
Las Vegas Finance
Center (LVFC)
     This form is used tocioss out a grant or cooperative agreement and
       may also be needed if the terms and conditions of the award
          require interim or annual financial status reports.
                       When is the report sent to EPA?
                       As of October 1, 2009, the Federal Financial
                       Report (FFR) Standard Form (SF) 425 replaced:
                           •   Standard Forms 269 and 269A Financial
                               Status Report (FSR)
                           •   Standard Forms 272 and 272A Federal
                               Cash Transactions Report
                       as the only financial status report accepted by the
                       Las Vegas Finance Center (LVFC).

                       SF 425 is used to close out a grant or cooperative
                       agreement and may also be needed if the terms and
                       conditions of the award require interim or annual
                       financial status reports.  Grant recipients are no
                       longer required to submit Federal Cash Transaction
                       information formerly reported on the SF 272.

                       Tribal Nations must submit a final Federal
                       Financial Report (FFR) SF 425 no later than 90
                       days after the end of the budget/project period.
                       Some regions require interim financial status
                       reports,  read the "administrative terms and
                       conditions" of your award very carefully for your
                       specific reporting requirements. If your assistance
                       agreement requires submission of an interim or
                       annual financial status report, please submit the SF
                       425 FFR following the schedule stipulated in the
                       terms and conditions of the agreement.
                                        Please be advised. The Federal Financial Report
                                             (FFR) Standard Form (SF) 425 replaced
                                           Standard Forms 269,269A and 272,272A
                                                      on October 1,2009.
                                           Financial Report Due Dates
                                                                  Monthly
                                                           Finance Department
                                                                 Balance Sheet
                                                              Statement of Revenues, I
                                                                expenditures, and
                                                                           Yearly
                                                                          to LVFC
                                                                   SF 425 Federal
                                                                  Financial Report
                                                        Copies of the Federal Financial Report (FFR)
                                                        Standard Form (SF) 425 are available in Activity 6c
                                                        (online at www.petetribal.org) and the Appendix.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                                                             Page 14 of 27

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                          Module 6: Financial System Requirements
      Reflection
        •   What do the "administrative terms
            and conditions" in your award say
            about financial management
            systems?
        •   How often does your award require
            financial status reporting?
      Monthly reports are kept in the recipient's
      files. Yearly reports are sent to the Las
      Vegas Finance Center.
                                                p
   What does a financial statement show?

    A.  Chart of accounts
    B.  Debit, credit, and balance columns
    C.  General journal and ledger entries
    D.  Summary of financial activities byproject
    E.  None of the above
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013                                                                       Page 15 of 27

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                            Module 6:  Financial System Requirements
Table 2: Sample General Ledger for a Single Account
General Ledger Detail by Account
As of December 31, 2011
Type Date PRN
025-4000 Income
JE* 12/30/11 Je* 1
Total 025-4000 Income
025-5000 Salary
wire 12/12/1 IT wire 25
wire 12/26/11 wire 26
JE 12/30/11 je2
Total 025-5000 Salary
025-5900 Salary
Benefits
wire 12/12/11 wire 25
wire 12/26/11 wire 26
JE 12/30/11 je2
Total 025-5900 Salary Benefits
025-6000 Contract Labor
check 12/20/11 ck 99
JE 12/30/11 je3
Total 025-6000 Contract Labor
025-6320 Supplies
check 12/12/11 ck 95
check 12/15/11 ck 97

check 12/20/11 ck 98
Total 025-6320 Supplies
025-6500 Equipment Rental
check 12/07/11 ck93
Total 025-6500 Equipment Rental
025-6650 Group Meetings
check 12/13/11 ck 96
Total 025-6500 Group Meetings
025-6700 Travel
check 12/06/11 ck92
check 12/11/11 ck94
check 12/16/11 ck97
Total 025-6700 Travel
025-6800 Indirect
JE 12/31/11 je4
Total 025-6800 Indirect
Totals for 025
Name

EPA


Tribe Salaries
Tribe Salaries
Tribe Salaries



Tribe Salaries
Tribe Salaries
Tribe Salaries


USA Construction
USA Construction


ABC Supply Co.
Computer Supply
Co.
Office Supp. Co.


Ox Rentals


XYZ Hall


AA Airlines
Rest Hotel
J. Doe


Tribe Indirect


Memo

Dec-08 accrual


pay ending 12/12/08
pay ending 12/26/08
pay accrual 12/31/08



pay ending 12/12/08
pay ending 12/26/08
pay accrual 12/31/08


12/01/08-12/17/08
12/18/08-12/31/08


parts for project
computer supplies

office supplies


rent for Dec-08


start-up EPA Meeting


J. Doe airline ticket
J. Doe hotel exp.
travel per diem


indirect on EPA project


Debits




9,000.00
8,500.00
3.000.00
20,500.00


1,530.00
1,440.00
530.00
3,500.00

2,000.00
3000.00
5,000.00

2,800.00
1,500.00

500.00
4,800.00

1.200.00
1,200.00

400.00
400.00

700.00
800.00
600.00
2,100.00

2.500.00
2,500.00
40,000.00
Credits Balance**

40.000.00
40.000.00 -40,000.00




20,500.00





3,500.00



5,000.00





4,800.00


1,200.00


400.00

700.00


2,100.00


2.500.00
40,000.00 00.00
                                                                                                  Page 1
*JE/je means the transaction was entered manually on the general journal.
"Balances represent expenses by category. General journals for grants should balance evenly. There should be
the same amount of income/credits as there are expenses/debits.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
Page 16 of 27

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                         Module 6: Financial System Requirements
     Financial  reporting  is
     an important  project
       management tool.
   What happens if the Tribal Nation is unable to file
   financial reports as required?
    A. Award funds become unavailable or are
      withheld.
    B. Draw-down of funds requires additional
      documentation.
    C. The Tribal Nation may experience budget
      problems.
    D. It becomes more difficult to win assistance
      awards in the future.
    E. All of the above are possible.
How does financial reporting help our Tribal
Nation?
Timely and accurate financial reporting is an
important project management tool for both the
Tribal Nation and EPA. It enables the Tribal
Nation and EPA to ensure that the project is on
track and alerts the Tribal Nation and EPA if a
project has developed issues that need to be
resolved. Not supplying the proper and timely
financial status reports could jeopardize additional
and/or future funding.

Financial reporting is a great internal control. A
project's administrative and financial personnel
should meet on a regular basis, such as once each
month. Getting everyone together provides them
with an appreciation for the scope of the project,
reporting progress and discovering problems.

At the administrative and financial personnel
meeting discuss the status of the project, for
example:
  •   Where are we now? What is the timeline and
      how are we doing?
  •   What, if any changes have been made since
      the last meeting?
  •   Are there  any needs at this time? If so, how
      can we best meet those needs?
  •   What is due before the next meeting?
   Financial Status Reports
            * Ledger
                          ^ Financial
                             Status
                    Financial   Report
                    Statements
        * Journal
  CHECK YOUR "TERMS AND CONDITIONS" FOR DETAILS.

           Financial Status Reports
What are the requirements?
Accounting records must support the costs claimed
on each financial status report. Different EPA
programs may have different financial reporting
requirements. See the "administrative terms and
conditions" in the award for more details.

How do we prepare financial reports?
Once the transaction has been put in the general
journal, it is posted to the general ledger by
account. The accounting system generates a
summary of total balance of all accounts in the
general ledger and is used to prepare and provide
"financial statements" that report the Tribal
Nation's financial activities by project.

The accounting system needs to produce a
Federal Financial Report (FFR), which is used
to reconcile requests for advances or
reimbursements from EPA. This report is also
used for budget control within the Tribal Nation
and departments responsible for performing tasks
in the project work plans.
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                   Page 17 of 27

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                          Module 6: Financial System Requirements
                        Federal Financial Report Instructions

Report Submissions
     1) Recipients will be instructed by Federal agencies to submit the Federal Financial Report (FFR) to a
     single location, except when an automated payment management reporting system is utilized. In this case,
     a second submission location may be required by the agency.

     2) If recipients need more space to support their FFRs, or FFR Attachments, they should provide
     supplemental pages. These additional pages must indicate the following information at the top of each
     page: Federal grant or other identifying number (if reporting on a single award), recipient organization,
     Data Universal Numbering System (DUNS) number, Employer Identification Number (BIN), and period
     covered by the report.

Reporting Requirements
     1) The submission of interim FFRs will be on a quarterly, semi-annual, or annual basis, as directed by the
     Federal agency. A final FFR shall be submitted at the completion of the award agreement. The following
     reporting period end dates shall be used for interim reports: 3/31, 6/30, 9/30, or 12/31. For final FFRs, the
     reporting period end date shall be the end date of the project or grant period.

     2) Quarterly and semi-annual interim reports shall be submitted no later than 90 days after the end of each
     reporting period. Final reports shall be submitted no later than 90 days after the project or grant period end
     date.

Note:   For single award reporting:

     1) Federal agencies may require both cash management information on lines 10(a) through 10(c) and
     financial status information lines 10(d) through 10(o).

     2) 10(b) and 10(e) may not be the same until the final report.
                       Line Item Instructions for the Federal Financial Report
FFR
Number
Reporting Item
Instructions
Cover Information
1
2
3
4a
4b
5
6
7
Federal Agency and
Organizational Element to
Which Report is Submitted
Federal Grant or Other
Identifying Number
Assigned by Federal
Agency
Recipient Organization
DUNS Number
EIN
Recipient Account Number
or Identifying Number
Report Type
Basis of Accounting
(Cash/Accrual)
Enter the name of the Federal agency and organizational element identified in
the award document or as instructed by the agency.
For a single award, enter the grant number assigned to the award by the Federal
agency. For multiple awards, report this information on the FFR Attachment. Do
not complete this box if reporting on multiple awards.
Enter the name and complete address of the recipient organization including zip
code.
Enter the recipient organization's Data Universal Numbering System (DUNS)
number or Central Contract Registry extended DUNS number.
Enter the recipient organization's Employer Identification Number (EIN).
Enter the account number or any other identifying number assigned by the
recipient to the award. This number is for the recipient's use only and is not
required by the Federal agency. For multiple awards, report this information on
the FFR Attachment. Do not complete this box if reporting on multiple awards.
Mark appropriate box. Do not complete this box if reporting on multiple awards.
Specify whether a cash or accrual basis was used for recording transactions
related to the award(s) and for preparing this FFR. Accrual basis of accounting
refers to the accounting method in which expenses are recorded when incurred.
For cash basis accounting, expenses are recorded when they are paid.
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
Page 18 of 27

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                            Module 6:  Financial System Requirements
8

9
10
Project/Grant Period,
From: (Month, Day, Year)
Project/Grant Period, To:
(Month, Day, Year)
Reporting Period End
Date: (Month Day, Year)
Indicate the period established in the award document during which Federal
sponsorship begins and ends.
Note: Some agencies award multi-year grants for a project period that is funded
in increments or budget periods (typically annual increments). Throughout the
project period, agencies often require cumulative reporting for consecutive
budge periods. Under these circumstances, enter the beginning and ending dates
of the project period not the budget period. Do not complete this box if reporting
on multiple awards.
See the above instructions for "Project/Grant Period, From: (Month, Day,
Year)."
Enter the ending date of the reporting period. For quarterly, semi-annual, and
annual interim reports, use the following reporting period end dates: 3/31, 6/30,
9/30, or 12/31. For final FFRs, the reporting period end date shall be the end
date of the project or grant period.
Transactions
Enter cumulative amounts from date of the inception of the award through the end date of the reporting period
specified in line 9.
Use Lines lOa through lOc, Lines lOd through lOo, or Lines lOa through lOo, as specified by the Federal
agency, when reporting on single grants.
Use Line 12, Remarks, to provide any information deemed necessary to support or explain FFR data.
Federal Cash (To report multiple grants, also use FFR Attachment)
lOa
lOb
lOc
Cash Receipts
Cash Disbursements
Cash On Hand (Line lOa
Minus Line lOb)
Enter the cumulative amount of actual cash received from the Federal agency as
of the reporting period end date.
Enter the cumulative amount of Federal fund disbursements (such as cash or
checks) as of the reporting period end date. Disbursements are the sum of actual
cash disbursements for direct charges for goods and services, the amount of
indirect expenses charged to the award, and the amount of cash advances and
payments made to subrecipients and contractors.
For multiple grants, report each grant separately on the FFR Attachment. The
sum of the cumulative cash disbursements on the FFR Attachment must equal
the amount entered on Line lOb, FFR.
Enter the amount of Line lOa minus Line lOb. This amount represents
immediate cash needs. If more than three business days of cash are on hand, the
Federal agency may require an explanation on Line 12, Remarks, explaining
why the drawdown was made prematurely or other reasons for the excess cash.
Federal Expenditures and Unobligated Balance: Do not complete this section if reporting on multiple awards.
lOd
lOe
Total Federal Funds
Authorized
Federal Share of
Expenditures
Enter the total Federal funds authorized as of the reporting period end date.
Enter the amount of Federal fund expenditures. For reports prepared on a cash
basis, expenditures are the sum of cash disbursements for direct charges for
property and services; the amount of indirect expense charged; the value of
third-party in-kind contributions applied; and the amount of cash advance
payments and payments made to subrecipients. For reports prepared on an
accrual basis, expenditures are the sum of cash disbursements for direct charges
for property and services; the amount of indirect expense incurred; the value of
in-kind contributions applied; and the net increase or decrease in the amounts
owed by the recipient for (1) goods and other property received; (2) services
performed by employees, contractors, subrecipients, and other payees; and (3)
programs for which no current services or performance are required. Do not
include program income expended in accordance with the deduction alternative,
rebates, refunds, or other credits. (Program income expended in accordance with
the deduction alternative should be reported separately on Line lOo.)
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013                                                                              Page 19 of 27

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                            Module 6:  Financial System Requirements
lOf
lOg
lOh
Federal Share of
Unliquidated Obligations
Total Federal Share (Sum
of Lines lOeandlOf)
Unobligated Balance of
Federal Funds (Line lOd
Minus Line lOg)
Unliquidated obligations on a cash basis are obligations incurred, but not yet
paid. On an accrual basis, they are obligations incurred, but for which an
expenditure has not yet been recorded. Enter the Federal portion of unliquidated
obligations. Those obligations include direct and indirect expenses incurred but
not yet paid or charged to the award, including amounts due to subrecipients and
contractors. On the final report, this line should be zero unless the awarding
agency has provided other instructions.
Do nof include any amount in Line lOf that has been reported in Line lOe. Do not
include any amount in Line lOf for a future commitment of funds (such as a long-
term contract) for which an obligation or expense has not been incurred.
Enter the sum of Lines lOe and lOf
Enter the amount of Line lOd minus Line lOg.
Recipient Share: Do not complete this section if reporting on multiple awards.
lOi
10j
10k
Total Recipient Share
Required
Recipient Share of
Expenditures
Remaining Recipient Share
to be Provided (Line lOi
Minus Line lOj)
Enter the total required recipient share for reporting period specified in line 9.
The required recipient share should include all matching and cost sharing
provided by recipients and third-party providers to meet the level required by
the Federal agency. This amount should not include cost sharing and match
amounts in excess of the amount required by the Federal agency (for example,
cost overruns for which the recipient incurs additional expenses and, therefore,
contributes a greater level of cost sharing or match than the level required by the
Federal agency).
Enter the recipient share of actual cash disbursements or outlays (less any
rebates, refunds, or other credits) including payments to subrecipients and
contractors. This amount may include the value of allowable third party in-kind
contributions and recipient share of program income used to finance the non-
Federal share of the project or program. Note: On the final report this line should
be equal to or greater than the amount of Line 1 Oi.
Enter the amount of Line 1 Oi minus Line 1 Oj. If recipient share in Line 1 Oj is
greater than the required match amount in Line 1 Oi, enter zero.
Program Income: Do not complete this section if reporting on multiple awards.
101
10m
lOn
lOo
11
lla
lib
lie
lid
lie
llf
Hg
Total Federal Program
Income Earned
Program Income Expended
in Accordance With the
Deduction Alternative
Program Income Expended
in Accordance With the
Addition Alternative
Unexpended Program
Income (Line 1 01 Minus Line
1 Om or Line 1 On)
Enter the amount of Federal program income earned. Do not report any program
income here that is being allocated as part of the recipient's cost sharing amount
included in Linel Oj.
Enter the amount of program income that was used to reduce the Federal share
of the total project costs.
Enter the amount of program income that was added to funds committed to the
total project costs and expended to further eligible project or program activities.
Enter the amount of Line 1 01 minus Line 1 Om or Line 1 On. This amount equals the
program income that has been earned but not expended, as of the reporting
period end date.
Indirect Expense: Complete this information only if required by the awarding agency and in accordance with
agency instructions.
Type of Rate(s)
Rate
Period From; Period To
Base
Amount Charged
Federal Share
Totals
State whether indirect cost rate(s) is Provisional, Predetermined, Final, or Fixed.
Enter the indirect cost rate(s) in effect during the reporting period.
Enter the beginning and ending effective dates for the rate(s).
Enter the amount of the base against which the rate(s) was applied.
Enter the amount of indirect costs charged during the time period specified.
(Multiply 1 Ib. x lid.)
Enter the Federal share of the amount in lie.
Enter the totals for columns lid, lie, and 1 1 f .
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
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                            Module 6: Financial System Requirements
Remarks, Certification, and Agency Use Only
12
13a
13b
13c
13d
13e
14
Remarks
Typed or Printed Name and
Title of Authorized
Certifying Official
Signature of Authorized
Certifying Official
Telephone (Area Code,
Number and Extension)
E-mail Address
Date Report Submitted
(Month, Day, Year)
Agency Use Only
Enter any explanations or additional information required by the Federal
sponsoring agency including excess cash as stated in line 1 Oc.
Enter the name and title of the authorized certifying official.
The authorized certifying official must sign here.
Enter the telephone number (including area code and extension of the individual
listed in Line 1 3a.
Enter the e-mail address of the individual listed in Line 1 3a.
Enter the date the FFR is submitted to the Federal agency using the month,
year format.
day,
This section is reserved for Federal agency use.
                   Line Item Instructions for the Federal Financial Report Attachment
                   (To be completed if reporting on cash management activity for multiple grants.)
                                    There is not a separate attachment form.
          Attach one FFR for each award providing the information described below for each additional award.
Box
Number
1
2
3a
3b
4
5
Reporting Item
Federal Agency and
Organizational Element to
Which Report is Submitted
Recipient Organization
DUNS Number
EIN
Reporting Period End Date:
(Month Day, Year)
Federal Grant Number
Recipient Account Number
Cumulative Federal Cash
Disbursement
Total
Instructions
Enter the name of the Federal agency and organizational element identified in
the award document or as instructed by the agency. (This information should be
identical to that entered in Box 1 , FFR.)
Enter the name and complete address of the recipient organization including zip
code. (Same information as entered in Box 3, FFR.)
Enter the recipient organization's Data Universal Numbering System (DUNS)
number or Central Contract Registry extended DUNS number. (Same
information as entered in Box 4a, FFR.)
Enter the recipient organization's Employer Identification Number (EIN). (Same
information as entered in Box 4b, FFR.)
Enter the ending date of the reporting period of this report. (Same information as
entered in Box 9, FFR.)
Enter the grant number assigned to each award by the Federal agency.
Enter the account number or any other identifying number assigned by the
recipient to the award. This number is for the recipient's use only and is not
required by the Federal agency.
Enter the cumulative amount of the Federal share of cash disbursed for each
award. Cash disbursements are the sum of actual cash disbursements for direct
charges for goods and series, the amount of indirect expenses charged to the
award, and the amount of cash advances and payments made to subrecipients
and contractors.
Enter the total for the Cumulative Cash Disbursement. This column should equal
the amount reported on Line lOb, FFR.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
Page 21 of 27

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                                      Module  6:  Financial System Requirements
                                                FEDERAL FINANCIAL  REPORT
                                                            (Follow form instructions)
 1.  Federal Agency and Organizational Element
    to Which Report is Submitted


    United States Environmental Protection Agency
                                                    2.   Federal Grant or Other Identifying Number Assigned by Federal Agency
                                                        (To report multiple grants, use FFR Attachment)
                                                                                                                            Page
                                                                                                                                      Of
                                                                                                                                       Pages
 3.  Recipient Organization (Name and complete address including Zip code)
 4a.  DUNS Number
                         4b.  EIN
                                               5. Recipient Account Number of Identifying Number
                                                  (To report multiple grants, use FFR Attachment)
                                                                                                   6.  Report Type
                                                                                                   D Quarterly
                                                                                                   D Semi-Annual
                                                                                                   D Annual
                                                                                                   D Final
                                                                                                                      7. Basis of Accounting
                                                                                                                      D Cash  D Accrual
8.  Project/Grant Period
   From: (Month, Day, Year)
                                               To: (Month, Day, Year)
                                                                                               9. Reporting Period End Date
                                                                                                 (Month, Day, Year)
 10.   Transactions
 (Use lines a-c for single or multiple grant reporting)
 Federal Cash (To report multiple grants, also use FFR Attachment):
    a. Cash Receipts
    b. Cash Disbursements
    c. Cash on Hand (line a minus b)
 (Use lines d-o for single grant reporting)
 Federal Expenditures and Unobligated Balance:
    d. Total Federal funds authorized
    e. Federal share of expenditures
   f.  Federal share of unliquidated obligations
    g. Total Federal share (sum of lines e and f)
    h. Unobligated balance of Federal funds (line d minus g)
 Recipient Share:
      Total recipient share required
   j.  Recipient share of expenditures
    k. Remaining recipient share to be provided (line I minus j)
 Program Income:
    I.  Total Federal program income earned
    m. Program income expended in accordance with the deduction alternative
    n. Program income expended in accordance with the addition alternative
    o. Unexpended program income (line I minus line m or line n)
 11.  Indirect
  Expense
                  a. Type
                             b.  Rate
                                                c. Period From
                                                                                               e.  Amount Charged
                                                                                                                        f. Federal Share
                                                                   g. Totals:
 12.  Remarks:  Attach any explanations deemed necessary or information required by Federal sponsoring agency in compliance with go verning legislation:
 13.  Certification:  By signing this report, I  certify that it is true, complete, and accurate tot eh best of my knowledge. I am aware that any false,
     fictitious, or fraudulent information may subject me to criminal, civil, or administrative penalties. (U.S. Code, Title 18, Section 1001)
 a.  Typed or Printed Name and Title of Authorized Certifying Official
                                                                                               c.  Telephone (Area code, number and extension)
                                                                                               d.  Email address
 b.  Signature of Authorized Certifying Official
                                                                                               e.  Date Report Submitted (Month, Day, Year)
                                                                                               14.  Agency use only:
                                                                                               Federal Share Calculation
                                                                                               Standard Form 425
                                                                                               OMB Approval Number: 0348-0061
                                                                                               Expiration Date: 10/31/2011
Paperwork Burden Statement
According to the Paperwork Reduction Act, as amended, no persons are required to respond to a collection of information unless it displays a valid OMB Control Number. The valid OMB control
number for this information collection is 0348-0061. Public reporting burden for this collection of information is estimated to average 1.5 hours per response, including time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other
aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget, Paperwork Reduction Project (0348-0060), Washington, DC 20503.
 Table 3: Federal  Financial Report, SF425
               EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
 Last Updated April 2013
                                                                                                                              Page 22 of 27

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                           Module 6:  Financial System Requirements
       Learner Notes
       Practice completing a Federal Financial
       Report, Standard Form 425 in Activity 6.c
       (found online at www.petetribal.org).
   Federal Financial Reports (FFRs) should
   include which of the following information?

   A. Assets and liabilities
   B. Costs and remaining funds
   C. EPA advancements and reimbursements
   D. Revenues and expenditures
   E. All of the above
   Track All Costs
How do we know if our financial reports are
sufficient?
By establishing the document requirements of a
complete accounting system, Tribal Nations are
able to track all costs.

A complete accounting system allows a Tribal
Nation to receive reimbursement for allowable,
reasonable, and allocable costs, as stated in the
OMB Circular A-87.

Examples of financial reports are provided in the
Appendix.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
Page 23 of 27

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                                                             Attachment to Module 6
                                                     Answers to Quizdom Actionpoint Questions
         An effective financial management system must account for:
                A.   Award funds drawn down and dispersed
                B.   Award project expenses and income
                C.   Environmental compliance
                D.   Subcontracts and subawards
                E.   All of the above
                                                                          	
                                                                           The financial management system keeps records on every aspect of the project
                                                                           with monetary value.
15
Fund accounts record financial resources and obligations in object class categories
established in the:
     A.   Assistance agreement award
     B.   EPA document of limitations
     C.   EPA regional office policies
     D.   Federal restrictions for grant management
     E.   All of the above
Fund categories must align with special regulations, restrictions, or limitations,
such as those indicated in the assistance agreement award.
18
Who is responsible for implementing internal controls to safeguard resources
ensuring accuracy, reliability, and compliance?
     A.   EPA headquarters
     B.   EPA regional officials
     C.   The Tribal Nation / Recipient
     D.   The award project manager
     E.   All of the above
The Tribal Nation or grant recipient is responsible for safeguarding the resources
granted in EPA assistance agreement awards.
25
Which of the following is necessary for financial accounting information to be
protected by EPA as "confidential business information"?
     A.   Generally Accepted Accounting Principles (GAAP)
     B.   Public disclosure of information policies
     C.   Approval of request for confidential business information protection
     D.   Financial reporting and tracking
     E.   All of the above
The financial activities of a Tribal Nation are private and confidential. When a
financial agreement is signed with another governmental entity, such as EPA, the
other entity must be given permission and access to financial information
pertaining to that agreement only. However, a Tribal Nation may request that the
information be protected as "confidential business information" by EPA.

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                                                     Module 6:  Financial System Requirements
30
                                   bold font indicates correct answer]
Which accounting method does EPA recommend?
     A.   Accrual basis
     B.   Assets and liabilities
     C.   Cash basis
     D.   Fund basis
     E.   None of the above
The accrual basis of accounting is recommended by EPA.
34
Which of the following is not a necessary requirement for you Tribal Nation's
accounting system?
     A.   Compliance with federal regulations
     B.   Computerized record keeping
     C.   Personnel dedicated to managing award funds and reports
     D.   Separate, accurate, current, and complete records
     E.   Documented accounting policies and procedures
Though computerized accounting systems can make your job easier, they are not
required.
39
A financial accounting system consists of policies, procedures, and documents that
support the	of a Tribal Nation's financial activity.
     A.   collecting
Reporting the financial status of a project requires recording all financial
transactions, including how funds are disbursed.
               B.
               C.
               D.
               E.
          recording
          disbursing
          reporting
          All of the above
43
What is the greatest value of a flexible accounting system?
     A.   It automatically fixes our errors.
     B.   It lets us account for more than one source of funding.
     C.   It lets us manually make changes.
     D.   It monitors accounts receivable and payable.
     E.   None of the above
A flexible accounting system allows the grant recipient to track multiple funding
sources and expense accounts.
Last Updated April 2013
                          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
                                                                                          Page 25 of 27

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                                                     Module 6: Financial System Requirements
                              lion (bold font indicates correct answe
46
Which of the following are not necessary components in a Tribal Nation's
accounting system?
     A.   Debit, credit, and balance columns
     B.   Time stamps and personnel initials
     C.   Dates and posting reference numbers
     D.   General journal, ledger, and chart of accounts
     E.   Flexible accounting and document reference numbering systems
The grant recipient need not time stamp each entry or authorize specific
personnel to initial items after approval. However, recipient may choose to use
these methods for internal control of the financial management system.
51
What does a document reference numbering system do?
     A.   Code project ledgers
     B.   Enter items into the general journal
     C.   Identify transactions
     D.   Inventories equipment
     E.   All of the above are possible.
A document reference numbering system assigns a unique number to each
transaction. Document reference numbers make it easier to track financial
activity (e.g., supplies and equipment, contractors and subawards).
60
Why do we need both a general journal and a general ledger?
     A.   Cross checking requires the bookkeeper to look at transactions in
          different ways.
     B.   It helps accountants check mathematical accuracy.
     C.   The journal records data on multiple accounts.
     D.   The ledger tracks data by separate accounts.
     E.   All of the above
Data is recorded in the general journal as transactions occur and for all active
accounts. Data from the general journal is transferred to the general ledger, and
categorized by the account to which it is applied. This makes reporting easier.
69
What does a financial statement show?
     A.   Chart of accounts
     B.   Debit, credit, and balance columns
     C.   General journal and ledger entries
     D.   Summary of financial activities by project
     E.   None of the above
A financial statement is a report that summarizes a Tribal Nation's financial
activity by project. The financial statement is based on but does not include the
chart of accounts, debit, credit, and balance columns, general journal and ledger
entries.
Last Updated April 2013
                          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
                                                                                         Page 26 of 27

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                                                     Module 6: Financial System Requirements
73
                                  'bold font indicates correct answe
What happens if the Tribal Nation is unable to file financial reports as required?
     A.   Award funds become unavailable or are withheld.
     B.   Draw-down of funds requires additional documentation.
     C.   The Tribal Nation may experience budget problems.
     D.   It becomes more difficult to win assistance awards in the future.
     E.   All of the above are possible.
Without timely and accurate financial reports, neither the Tribal Nation nor EPA
is able to monitor how award funds are being used.
77
Federal Financial Reports (FFRs) should include which of the following information?
     A.   Assets and liabilities
     B.   Costs and remaining funds
     C.   EPA advancements and reimbursements
     D.   Revenues and expenditures
     E.   All of the above
Federal Financial Reports (FFRs) are comprehensive reports of all financial activity
during a specific time frame.
Last Updated April 2013
                          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
                                                                                         Page 27 of 27

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