Item #03
Date: July 2, 2024
To: Mayor and City Council
From: Jennifer Styczynski, Finance Director
Jim Schaad, City Manager
Subject: Adopting a Grant Accounting Policy
Recommendation:
Pass a Motion to adopt Resolution 2024-XX adopting a Grant Accounting Policy.
Rationale for Recommendation:
Both the Government Finance Officers Association (GFOA) and the Governmental Accounting Standards Board (GASB) recommend that processes are established to promote the awareness of the significant requirements that normally come with grants. This policy is intended to standardize and streamline the accounting treatment of grants received by the City.
Background:
Grants come with specialized requirements that can apply to the general operations of the grant, specific compliance rules, monitoring of other parties that may receive resources from the grants, and specialized reporting requirements. There are typically negative consequences for failing to meet these requirements. Further, grants may, either as a condition of the grant itself or as a result of practical/ political circumstances, commit the City to financially maintaining a program or asset after the expiration of the grant. Accordingly, the City should develop a grant accounting policy that requires certain steps to be taken before applying for, or accepting, to maximize the benefits of grants while minimizing their risks.
Discussion & Analysis:
The proposed grant accounting policy includes the following key components:
• Administrative procedures to set forth the importance of grant programs in accomplishing City goals and objectives.
• Roles and responsibilities that identify the responsible parties for activities surrounding the submittal, implementation, maintenance, reporting, and other related duties for grant-funded projects by or on behalf of the City.
• Pre-award procedures that include the grant seeking process, grant applications, pre- application assessment and review, and application submission.
Item #03
• Post-award procedures that include award notification and acceptance, use of grant funds, daily administration, reporting, and file management.
• The grant closeout process and single audit requirements.
By implementing this policy, the City can enhance our ability to effectively administer grants, minimize the risk of non-compliance, and optimize the use of grant resources to achieve intended outcomes. Clear communication, proactive monitoring, and a commitment to continuous improvement are the essential elements in ensuring successful grant administration and fulfilling all requirements stipulated by grant providers.
Alignment with City Council Goals:
Goal #6: Strengthen Institutional Capacity
Legal Review:
The City Attorney has reviewed the policy.
Fiscal Analysis:
There is no fiscal impact to the City in adopting a Grant Accounting Policy.
Attachments:
1) Resolution 2024-XX
2) Grant Accounting Policy