General Information for Federally Funded Contracts

Expenditures must be recorded and documented using the cash or accrual basis of accounting in accordance with  the Generally Accepted Accounting Principles (GAAP), as outlined in 2 CFR Part 200.302(b). This ensures that all financial transactions are properly accounted for and transparent.

Organizations receiving federal funds must maintain an active registration in the U.S. Government System for Award Management (SAM). Additionally, all award recipients must verify they are not suspended or debarred through the Exclusions section of SAM.gov.

Organizations should be prepared to provide the following documentation on a regular basis, typically monthly, to ensure compliance with federal regulations.

• General Ledger/Expenditure Detail Reports: General ledger and expenditure detail reports for the payment period.
• Timesheets: Timesheets for employees charged to the federal award, including both hourly and salaried employees.
• Proof of Program Eligibility: Documentation determining eligibility that fulfills the eligibility requirements specified in the program's terms and comply with the overall recordkeeping standards of 2 CFR 200.
• Attestation Forms: Agencies and clients must certify that no duplication of benefits has occurred.
• Detailed Proof of Expenses and Payments: This may include receipts, payroll reports, pay stubs, cash value card (i.e. gift cards), tracking forms, and justification for each expense.
• Proof of Activities/Events: Documentation such as sign-in sheets, meeting agendas, or other activity logs to validate that required program activities took place.

Federal grant recipients are often required to provide regular performance reporting, including demographic data and output/outcome measures for the programs funded. This includes, but is not limited to:

• Output Measurement: Regular reports on specific expenditure categories and associated program outputs.
• Annual Performance Reporting: This should include detailed data on outputs and outcomes, with an emphasis on demographic data such as age, race, ethnicity, gender identity, and other relevant information as encouraged by federal guidelines.

Each contract with Sonoma County will specify whether the organization is a subrecipient. Subrecipients are subject to additional federal requirements.

• Subrecipient Training: New subrecipients may be required to attend mandatroy training on federal grant compliance requirements.
• Monitoring: All federal grant requirements must be passed on to subrecipients and subcontractors. The County ensures compliance by conducting program and fiscal monitoring, which includes technical assistance.
• Single Audit Requirement: Organizations expending $1,000,000 or more in federal funds in a fiscal year must undergo a Single Audit, as required by 2 CFR Part 200 Subpart F – Audit Requirements. Evidence of compliance must be submitted to the County.
• Closeout Requirements: Within 90 days of the end of the contract period, organizations must submit all final financial and performance reports related to the programs funded by federal funds. This ensures transparency and accountability for the entire duration of the grant.
• Record Retention: All documentation related to the federal award must be maintained for a minimum of three years after the submission of the final expenditure report, as outlined in 2 CFR Part 200.334. In some cases, records must be retained for longer periods as specified in the contract.

If an organization is a for-profit entity, 2 CFR 200 does not apply; however, the substance of most, if not all, federal requirements will still be imposed. The contract with a for-profit subrecipient will describe applicable compliance requirements and the for-profit subrecipient’s compliance responsibility.

As a condition of receiving federal funds, grant recipients, whether they are local governments, nonprofit organizations, or other entities, are responsible for complying with a broad array of legal requirements. While most grantees are aware that they must comply with the specific laws under which the grant funds were awarded (e.g., specific education, health, or workforce laws), it is equally important to be aware of the other legal requirements and responsibilities that accompany federal grants. These are often referred to as grants management requirements and may include a range of regulatory, financial, and programmatic responsibilities.

• Federal Law Takes Precedence: Generally, federal law supersedes state or local law in the context of federal grants. However, federal laws may allow state or local laws to apply, provided certain conditions are met. If there is a conflict between federal and state or local law, federal law will take precedence unless the federal law specifically allows for a different approach or unless a state or local law is more stringent. Therefore, it is crucial for grant recipients to fully understand the specific laws, rules, and regulations governing their federal grant, as these will guide their compliance responsibilities.

The importance of thoroughly reading and understanding the laws and regulations that govern a particular federal grant cannot be overstated. Whether dealing with environmental regulations, labor laws, or specific program requirements, ensuring that all legal obligations are met is essential to maintaining compliance and avoiding potential penalties or the loss of funding.