Pre-Award Guide CDWGround2-compliance-checked final.pdf

Pre-Award Guide for Applicants

USDA Forest Service Office of Grants & Agreements

Acces s Storefront

COMMUNITY WILDFIRE DEFENSE GRANT (CWDG)

FUNDING OPPORTUNTIES:

USDA-FS-2023-CWDG-CWSF

USDA-FS-2023-CWDG-TRIBES

USDA-FS-2023-CWDG-SGSF

USDA-FS-2023-CWDG-NEMW

This guide addres s es high level and routine components of a grant application. It does not replace requirements outlined in the Notice of Funding Opportunity or Detailed Ins tructions required for any funding opportunity. The guide targets new or infrequent applicants to the USDA Fores t Service but is available to a ll applicants for use. For general as s is tance or inquiries on the CWDG funding opportunity, contact Acces s StoreFront a t acces s ga@us da.gov.

https://www.fs.usda.gov/working-with-us/grants https://www.fs.usda.gov/working-with-us/grants https://www.fs.usda.gov/managing-land/fire/grants https://www.grants.gov/web/grants/search-grants.html?keywords=CWDG https://www.grants.gov/web/grants/search-grants.html?keywords=CWDG

1 | P a g e

Table of Contents

Competitive Application

General Tips

Sections of a Grant Application

Project Introduction

Project J us tification

Project Objectives

Project Timeline/ Schedule

Project Budget

The Importance of Additional Support

Engage Community Support

Assemble a Grant Writing Team

Grant Application Checklis t

Sys tem for Award Management (SAM)

General

Regis tration and Validation

Workspace

General

Ac c e s s and Ownership

Cre a t ing a Workspace

Overview Walkthrough

Main Menu

Managing Workspaces

Progres s Tracker

Completing t h e Fo rm s

Subm it t ing Your Application

Budget

Matching/ Cos t-share

Direct vs . Indirect Cos t

NICRA

Financial Capability

Financial Management Sys tem Standards

Property Management Sys tem Standards

Procurement Sys tem Standards and Requirements

2 | P a g e

Equipment

Appendix

Financial Capability FS-1500-22

NICRA Ins tructions & Checklis t

Budget and Narrative Sample

Equipment J us tification Form FS-1500-34

You can pres s Ctrl key to dis play the clicking hand , then click at the content to jump to the relative page.

To find a keyword, go to “Home” tab, in the “Editing” group, s elect Find. Type the word you'd like to find, and it will be highlighted in your document.

3 | P a g e

Competitive Application

General Tips

Read the entire grant application guide and follow ins tructions carefully.

• Application requirements vary acros s programs , so look closely a t the Notice of Funding Opportunity (NOFO) for each specific grant program to ensure that you are addres s ing all the requirements and criteria for the grant program in ques tion.

• Carefully review the s coring criteria and make sure to addres s each of those criteria in your proposal

• Submit a reasonable budget based on realis tic cos ts . Always double check your budget math. Refer to the Code of Federal Regulations on cos t principles when needed: 2 CRF 200 Subpart E.

• Be sure to include any additional forms or a ttachments that are required. Submit work samples that reflect your ability to carry out the grant project proposed.

• Pay attention to deadlines – these are usually inflexible and if you submit your application pas t the deadline date, it will not be cons idered. Try to submit early.

• When writing your proposal, be clear and concise, es tablish your major points , and avoid unneces sary complexity. These points are the primary items on which the application will be evaluated.

• If provided, use the s amples and checklis ts included in the application.

• Separate fact from opinion.

Sections of a Grant Application

Grant applications are typically comprised of s everal s ections , as outlined below. Know what information you need to include for each section.

Project Introduction

This s ection is s imilar to an abs tract and is often written after mos t, if not a ll, of the proposal is completed. It should clearly explain what you are us ing funds for and should be written in a way so that any reader can unders tand quickly and clearly what the project will deliver.

Project J us tification

In this section, you should define and explain the problem that your project will a ttempt to addres s .

Some ques tions to answer:

• Why is it critical to address the problem now?

• What plans , s tudies , and data are available to identify or quantify the need?

• How will the defined population be impacted or different when the project is completed?

• What documented proof/ evidence is available to support the need for your project?

https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E

4 | P a g e

• Who will your project serve?

• Are there any special circums tances to cons ider about your defined area/ population?

• What are your organization’s needs?

Project Objectives

The objectives of your project should mirror what you are us ing the grant funds for in your project. Note, there is a difference between goals and objectives – goals are not measurable, whereas objectives are. Objectives are performance-rela ted, so make sure your project objectives are realis tic – they will become the criteria your project is evaluated by if you are s elected for funding.

Project Timeline/ Schedule

In this section, you should dis cus s :

• How the project will be managed by your organization;

• How project s ervices will be delivered, and

• Who will be in charge.

Include the planned s tart date, activity, respons ible party, completion date, miles tones , and deliverables / products . You should only cover those s teps / tasks that will be supported by grant funding. The schedule should be detailed and clear enough that it can give the reviewer a general unders tanding of what the project involves .

Project Budget

• Budget Narrative vs Budget Forms . Your budget narrative and your budget provide s imilar information in two different, but important ways . One lis ts the expenses and income while the other is a narrative description that deta ils what is found in the budget form. The Budget narrative gives context to the information found in the form.

• Cos ts and project elements mus t be well-defined—explain what cos ts are as sociated with each element and what portion of the cos ts will be covered by each of the funding sources .

• Check the application directions or ask the grant coordinator to determine how the budget should be organized (usually in columnar form according to general accounting principles ).

• Include a ll cos ts as sociated with capita l and non-capita l expenditures and all as sumed in-kind services , volunteer efforts , and indirect cos ts .

• Only include items covered by the grant funds—do not include a miscellaneous or contingency category.

• Don’t forget that this project will take place in the future, so budget numbers should account for inflation a t the time of expenditure.

• Like the project timeline, the project budget should provide enough detail that the reviewer can gain a general unders tanding of what the project entails .

5 | P a g e

The Importance of Additional Support

Engage Community Support

Community support is vital for a succes s ful project. Many grant programs require a local funding match and/ or community engagement in the project’s des ign and execution. The s tronger the local support for a project, the eas ier it will be to s ecure matching funds , letters of support, and in-kind donations . Once the proposal summary is developed, s eek out academic, political, and profes s ional individuals or organizations , as well as community members or groups , that may be interes ted in your proposal. Obtain their support in writing, and then involve these individuals and organizations in project input.

Contact the grant coordinator as well as your dis trict/ s ta te/ regional representative (depending on the funding source). They can help you determine how well the grant program will work for your project and can provide you with technical as s is tance and additional guidance in the application proces s . Some competitions provide pre-proposal/ application as s is tance. This is a lso specified in the announcement. Subscribe to s tay updated on the s ta tus of your application.

Ass emble a Grant Writing Team

While this is not a lways pos s ible, it can be helpful to as semble a team to as s is t with grant writing.

Examples of pos s ible team members include:

• Senior-level management (support and s ign grant applications )

• The project manager (who is the primary source of project-rela ted information)

• A grant writer

• An editor (otherwise unaffilia ted with the project so that they can provide an independent as ses sment of how well the application presents the required information); and

• Finance expert(s ) (to help develop a good budget).

Depending on the s ize, capacity, and s tructure of your organization, it may not be feas ible to as semble a team dedicated to grant application writing. It is not a requirement for a succes s ful grant application but can help ease the proces s of the grant application preparation, content, submis s ion and the like.

Grant Application Checklis t

Use the checklis t below to make sure your application is well written, contains a ll the neces sary supporting documents , and meets the grant criteria . See if you answer ‘YES’ to everything above.

However, if you have answered ‘NO’ to any items , you should follow up on these mis s ing items before submitting your application.

6 | P a g e

1.Guidelines and documents :

▢ YES ▢ NO – I have read all documents and know the a im of the grant program, eligibility criteria , and clos ing date and time.

2. Application form:

▢ YES ▢ NO – I have used the correct application form and followed the proces s outlined in the grant guidelines .

3.Checked my idea:

▢ YES ▢ NO – My proposal is s trong and aligns with the a im of the grant.

4. Cons idered my audience:

▢ YES ▢ NO – I have written my grant application as suming the as ses sor knows nothing about my bus iness / organization or the project.

5. Language and tone:

▢ YES ▢ NO – I have used s imple, pos itive bus ines s language (and included no jargon, vague, speculative, or negative wording).

6. Concise:

▢ YES ▢ NO – My answers are concise and within the required word count.

7. Targeted answers :

▢ YES ▢ NO – I have not duplicated my answers and all sections have been completed.

8. Budget:

▢ YES ▢ NO – I have outlined my project budget as required in the guidelines .

9. Headings :

▢ YES ▢ NO – I’ve included useful headings so readers can skim the content.

10. Keywords :

▢ YES ▢ NO – I’ve included the s ame keywords used as in the grant guidelines and as ses sment criteria .

11. Formatting:

▢ YES ▢ NO – The cons is tent formatting applied and answers are in the s ame sequence as the application form (if applicable).

12. Reviewed:

▢ YES ▢ NO – I have had my application thoroughly reviewed by 2 or more people.

13. Proofread:

▢ YES ▢ NO – I have had my application proofread by 2 or more people.

14. Final check:

▢ YES ▢ NO – All information has been provided to support the application as outlined in the guidelines .

7 | P a g e

Sys tem for Award Management (SAM)

General

Sam.gov is an officia l webs ite for U.S government. All entities mus t regis ter with SAM in order to conduct bus ines s with the federal government. On April 4, 2022, the unique entity identifier used acros s the federal government changed from the DUNS Number to the Unique Entity ID (UEI). Once you go to this webs ite for the firs t time, you will s ee a window pops up below:

Additionally, you will s ee all announcements and alerts pos ted on its homepage. It is important to review them. For example, the lates t a lert below addres ses the delay of validation applicants ’ information. Therefore, it is recommended that you regis ter very early on to avoid delays . This link provides FAQ to validating your entity.

https://www.fsd.gov/gsafsd_sp?id=kb_article_view&sysparm_article=KB0058422&sys_kb_id=7bb8810ddba05990060d5425f3961912&spa=1

8 | P a g e

Regis tration and Validation

• Regis ter/ Renew your regis tra tion early. You will need to regis ter SAM to do bus ines s with the U.S federal government. Every year you will need to update and renew your regis tra tion. If your SAM regis tration expires , there will be a delay in receiving funding or adding new funding through a modification.

• Gather Up Your Bas ic Information. Before you get s tarted with SAM regis tration, you will need to know some important information. For ins tance, you will need your company tax ID number, which should be lis ted on tax forms . You also will need the routing number and account number for your bus ines s bank account, as payments to you will be made through SAM so this info is s tored in your SAM account. You also might need to know your North American Indus try Clas s ification Sys tem Codes if you will be applying for Contracting. These codes identify the specific goods or s ervices (or both) that your company provides .

• Tax ID and Phys ical Addres s . Make sure to use the Tax ID number that you have with the federal government. Use the s ame name as you regis ter with the Internal Revenue Service (IRS). Once you regis tered, you can add another name as “doing bus ines s as” ins ide of SAM.

Use the phys ical addres ses to regis ter for your UEI and have addres s proof ready to show (i.e., lease) if being reques ted by SAM.gov for validation.

• Entity Regis tra tion Checklis t: See checklis t link to help you prepare your regis tra tion. If you are applying for Financial Ass is tance award only, click on the 2nd link which will get you s tra ight to the checklis t.

• Socio-Economic Entity: Under General information, make sure that you click all that applies to your organization, especially if you qualify under socio-economic categories , Native-https://sam.gov/content/entity-registration

9 | P a g e

American entity, or Disadvantaged bus ines s category. This is important as some grants have s et as ides if you qualify under this category. Vis it https :/ / www.sba.gov/ to learn more about these programs .

• Two or more adminis trators for your organization. It is recommended to have multiple people who can renew and update your SAM regis tra tion. If you lose acces s to the email that has the acces s to SAM, you will have to create a new account and submit a notarized letter to SAM granting you acces s again. If you leave the organization, the new person will have to go through the s ame proces s of submitting a notarized letter and gaining acces s to the organization’s SAM. This can lead to delays in receiving your funding rela ted to a grant or agreement. A backup person from your organization can go into SAM and give that acces s immediately removing the delay.

• Review twice! Double check everything and make sure it matches your documentation exactly when setting your SAM account up for the firs t time or for SAM recertification proces s . Any information entered incorrectly will create a delay in the proces s . During times of high volume, it may add several weeks to the time it takes to regis ter your entity.

https://www.sba.gov/

10 | P a g e

Workspace

When applying on grants .gov, you will need a “Workspace”. Go here for a Workspace overview. For grants .gov online help, go here and you can search for specific areas for as s is tance. For more information on CWDG NOFO, please vis it Fores t Service webs ite here and on grants .gov.

General

• Some agencies may have other submis s ion porta l bes ides grants .gov; make sure to read carefully in the NOFO to ensure you have the correct submis s ion porta l.

• Files cannot exceed 200MB.

• Do not use the Adobe attachment function (the paper clip in the taskbar) to upload files .

You must use the in-form “Add Attachment” option. Not us ing the in-form options will cause errors .

• Disable pop-up blockers for the Grants .gov s ite. Some confirmation boxes appear in pop-up windows .

• Available and required forms vary by FOA and agency. Always read the application ins tructions carefully.

• Like the Adobe Legacy forms , completing the SF424 R&R form will populate some fields in the res t of the package.

• Individual Applicants : If you are regis tered in Grants .gov and only have an individual profile (i.e., not applying on behalf of an organization), the Applicant Management s ection does not apply to you. Review the Grants .gov Varia tions for Individual Applicants help article for more information.

Ac c e s s and Ownership

• You can only create a workspace if you have a Grants .gov account with the “Manage Workspace” role.

• The person who creates the workspace is workspace owner and can grant other users acces s to the workspace.

• You do NOT need an account to s earch for and download funding opportunities .

Cre a t ing a Workspace

• You must have a Grants .gov account to create and be added as a participant on workspaces . Get set up here:

https :/ / www.grants .gov/web/ grants / applicants / regis tra tion.html.

https://www.grants.gov/applicants/workspace-overview.html https://www.grants.gov/help/html/help/index.htm#t=GetStarted%2FGetStarte https://www.fs.usda.gov/managing-land/fire/grants https://apply07.grants.gov/help/html/help/Register/GrantsgovVariationsForIndividualApplicants.htm https://apply07.grants.gov/help/html/help/Register/GrantsgovVariationsForIndividualApplicants.htm https://www.grants.gov/web/grants/applicants/registration.html

11 | P a g e

• You need an ORGANIZATION APPLICANT account.

• How to regis ter as an organization: Organization Regis tra tion | GRANTS.GOV

• You can complete forms online (web forms) or download forms to complete offline and upload later.

• You can run a check on each page for errors .

• Each ques tion/ section links to help documents for that ques tion.

Overview Walkthrough

Please note below is not intended to be a s tep-by- s tep walkthrough. It highlights a general overview of creating workspace and provide helpful tips a long the way. Please vis it grants .gov for Workspace ins tructions .

Main Menu

You mus t be logged in to Grants .gov to create a workspace. After you log in you, click on “Applicants” tab Apply Now.

• Select “Create Workspace” to create a new workspace OR “Manage Workspace” to acces s an exis ting workspace.

• Enter the Notice of Funding Opportunity (NOFO) number or the package ID: For example, USDA-https://www.grants.gov/web/grants/applicants/organization-registration.html https://www.grants.gov/web/grants/applicants/workspace-overview.html

12 | P a g e

FS-2022-CWDG-NEMW or USDA-FS-2022-CWDG-TRIBES. All NOFO have package ID that are available when you search Grants .gov for opportunities .

• Enter an Application Filing Name. This is a required field, limited to 240 characters . This does not need to be the grant title, but it cannot be left blank. Sugges tion: Keep it brief and descriptive, so that it is eas ier to locate later.

• Click the “Create Workspace” button to launch the Manage Workspace Page.

Managing Works paces

No te the p lura l – th is re la te s to a ll your c re a te d workspaces , no t a specific one . The Manage Workspace page is the hub of a ll actions and activity for the workspace. You will download and select forms to complete, grant workspace acces s to the other users (participants ), preview and validate the application from this s creen

Search by any of the criteria below to find workspaces where you are the workspace owner or a participant. The example below is by “las t activity date”. Select the form you want to acces s from the Actions column (las t on the right).

• Copy: Use to copy the workspace to use for another application.

• Manage: Use to open an “In Progres s” workspace.

13 | P a g e

Progres s Tracker

The top section of the Manage Workspace s creen has a helpful bar that tracks your progress .

• Green check: Indicates what you’ve completed so far.

• Red ellipses : Indicates your current progres s—where you are in the completion and submis s ion proces s .

• Blue sections : Indicates things that you s till need to complete.

• He a de r/ Opportunity Information. Beneath the tracker bar is a s ection with the information about the NOFO (such as the title, opportunity number and dates ), it shows your unique workspace ID (WS00948906) and identifies the workspace owner.

• Navigation Tabs. The available tabs will vary by agency. For mos t submis s ions , you’ll s ee

FORMS, VIEW APPLICATION, ATTACHMENTS, PARTICIPANTS, ACTIVITY, DETAILS.

• Application Package Forms . The res t of the page is where you will add forms to and complete the forms for the application. A series of boxes on the left lis ts the forms , which you can check or uncheck to include or remove them from the proposal.

Completing t h e Fo rm s

The proces s of completing the workspace forms is not s ignificantly different from completing the Legacy Adobe package. Below is information to help you navigate these pages and a few things that you need to be aware of.

• Include In Package: the firs t column has a lis t of boxes you can check or uncheck to include or remove an optional form set from the application.

• Form Name: Clicking on the Form Name, opens a preview window of the form.

• Requirem ent: Mandatory forms are lis ted firs t, followed by the optional forms .

• Form Status :

[---]: A form that has not been acces sed yet.

14 | P a g e

[In Progres s ]: A form that has been acces sed, but the data entered does not pas s the validation check.

[Pas sed]: A completed form that has completed (pas sed) they sys tem validation check.

Las t Update Da te / Tim e : This shows the las t time a s ection was updated.

Locked By: This is blank unles s the lis ted user has locked the form, in which case it will show who locked it.

Actions : you will s elect from several different options to enter information into your application.

• Lock: use this to prevent a form from being updated while someone is us ing it. The sys tem prompts you to lock or “Unlock” the form.

• Download: This a llows to you download a PDF of the form to your works tation for completion offline a t your convenience or s end to someone els e to complete. After completing a form offline, use the “Upload” function to add the completed form to the application. These forms are s imilar to the Legacy Adobe forms .

• Reuse: You’ll be able to use this option once you have completed a s imilar form in another workspace. You can reuse the information from an exis ting form in a previous workspace. You are asked to confirm that you want to reuse a form, and then are taken to the “Reuse Workspace Form” to search for the form you want to reuse. Not available for a ll forms . The “Reuse” s earch results show the application filing name, workspace s ta tus , FOA, the date of the las t update and a preview option.

Once you select the form to reuse, it is imported to your current workspace, replacing the blank form with and it will update that form’s s tatus to PASSED.

Webform: This is an enhanced online interface. Use the webform option if you need to tweak the information in the form.

• Hovering over a field will give you information or ins tructions about completing that field.

• If enter invalid information in a field, it is highlighted yellow and a red error notation appears .

• You can check for errors as you work. The errors appear a t the top of the page with a link to the field that has an error.

• There is an auto s ave feature (every five minutes ), but you should s ave manually after updating a page.

• When someone is editing a form, it is locked to other users . When you exit a form the sys tem asks if you want to unlock the form (releas ing it for another use to edit) or keep the form locked (if you s till need to make changes and do not want someone to undo what you’ve done.) when a form is locked, the Locked by field will let you know who to contact if you need to make changes .

• When uploading an attachment, Workspace s cans for viruses and file name conventions .

15 | P a g e

Subm it t ing Your Application

• Only the AOR (Authorized Organization Representative) can submit applications .

Contact your organization for a lis t of your AORs . If you are an individual, s ee applicant regis tra tion. To learn more about Grants .gov roles & privileges , vis it here.

• When you click “Sign and Submit,” you are prompted for your Grants .gov password, not your Commons pas sword. Upon submis s ion, you’ll receive the Grants .gov confirmation emails , as you would for the Legacy packages .

• After submitting, a ll edit options are dis abled.

• The Re-open option is available for the workspace owner and the AOR after submis s ion but should not be used unles s by reques t of the AOR.

• Consult your AOR officia l who will work with you on the Changed/ Corrected application about what s teps need to be taken in Workspace.

• Each time you complete a form, check it for errors and save BEFORE clos ing it.

Participants Ta b: From this tab, you will be able to: (1) add Participants to your workspace, (2) remove users from your workspace, (3) manage what areas of your workspaces , participants can acces s , and (4) trans fer workspace ownership to other users with the workspace owner role.

• Add participant by username or email addres s .

• Add participant from workspace organization by their firs t and las t name.

• Adding a participant, grants them acces s to All Forms including Budget, by default. You can limit acces s to Non-Budget forms and Sub-form(s ) only. If you choose to limit someone’s acces s to Sub-forms , the available Sub-forms options are shown.

• NOTE: Both the reques ter and the user being added as a participants receive an email confirmation once a new user is added to the workspace.

https://www.grants.gov/web/grants/applicants/registration.html https://www.grants.gov/help/html/help/index.htm?callingApp=custom#t=Applicants%2FManagement%2FViewRolePrivileges.htm

16 | P a g e

Activity t a b : This lis ts every action taken on the form by every user.

Details t a b : you can track the submis s ion. This will be blank until you have submitted the application.

Preview Grantor Va lida t ion : You can run agency validation checks . It s ends the workspace to the agency sys tem to confirm whether the application meets validation checks or not. The page doesn’t automatically update. Refresh the page to get the results of the validation check in a pop-up window.

17 | P a g e

Budget

As you begin to develop a budget for your grant application and input the relevant cos ts down on paper, many ques tions may aris e. Your bes t resources for answering these ques tions are the grants or sponsored programs office within your own ins titution, your adminis trative officia ls , and/ or your peers .

If you are an individual applicant, there are online resources to guide you while you are developing your budget. If you have cos t-related ques tions (i.e., what is a llowable), Uniform Guidance is a "government-wide framework for grants management". It is an authorita tive set of rules and requirements for Federal awards . Vis it Code of Federal Regulations (CFR) – Chapter II, Part 200 covers Grants and Agreements . You will s ee Subpart A-F; Subpart E addres ses cos t principles that might be beneficia l to review while drafting your budget proposal.

Matching/Cos t-share

There are two kinds of matching/ cos t-share: cash and third-party in-kind.

1. Cash: includes cash spent for project-related cos ts . The allowable cash match mus t include cos ts that are neces sary, reasonable, and allowable under the federal program.

Matching and cos t share funds have the s ame res trictions as federal funds . These funds mus t follow the same allowable and unallowable guidelines in their federal award. If, for example, a conference is unallowable under the grant award that has matching requirements , then grantees would not be able to use the matching funds ins tead. The expense mus t be a llowable with federal funds for it to be a llowable with matching or cos t share funds .

2. Third Party In-Kind: this includes , but is not limited to, the valuation of non-cash contributions provided by a third party. An in-kind match may be in the form of s ervices , supplies , real property, and equipment. The value of the s ervice may be used for the matching requirements , if the services are neces sary, reasonable, and allowable under that federal program. Grantees are a llowed to use unrecovered indirect cos ts for matching or cos t sharing requirements ; however, this requires prior approval of the federal awarding agency.

For third-party in-kind matching—such as supplies , equipment, or space—the value mus t not exceed the fa ir market value a t the time of the donation.

For volunteer services , the ra tes mus t be cons is tent with the rates normally paid for s imilar work in the organization. If an employee from another organization conducts s ervices free of charge, the services should be valued at that employee's regular ra te of pay, in addition to their fringe benefits and allowable indirect cos ts . There are online resources to help you determine the value of volunteer time, such as :

https :/ / independentsector.org/ resource/ value-of-volunteer-time/ . It is important to maintain a record for tracking and reporting volunteer time and services .

Grantees are required to maintain records , which clearly show the source, amount, and timing for a ll matched contributions . While grantees are not required to submit their supporting documentation to the Department of J us tice, their records mus t be available in the event of an audit or s ite vis it.

https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E?toc=1 https://independentsector.org/resource/value-of-volunteer-time/

18 | P a g e

Direct vs . Indirect Cos t

Unders tanding direct cos ts and indirect cos ts is important for properly tracking your organization’s expenses . Knowing the difference between the types of cos ts will help you to prepare a competitive budget proposal and you will have a better grasp on your accounting, thus better equipped to plan.

In cases of government grants or other forms of external funding, identifying direct and indirect cos ts becomes extra important. Grant rules are often s trict about what cons titutes a direct or an indirect cos t and may allocate a specific amount of funding to each clas s ification.

Often, funding for a specific project will largely support direct cos ts . Certa in government agencies might a llow you to explain why indirect cos ts should be funded, too, but the decis ion to grant funding is at their dis cretion.

When a company accepts government funds , the funding agency may also have s everal s trict mandates in place regarding the maximum indirect cos t ra te and which expenses qualify as indirect cos ts .

Direct Cos ts Indirect Cos ts

If the cos t can be identified specifically with a particular cos t objective such as a grant, contract, project, function, or activity, then it is a direct cos t

Cos ts of an organization that cannot readily be as s igned to a particular project but are neces sary to the operation of the organization and the performance of the project

Examples : raw materia l, direct labor, fuel Examples : operating and maintaining facilities , depreciation, and adminis tra tive s alaries

Highly variable mainly due to market factors Relatively s table

Direct cos ts affect the products / s ervices prices , and are thus calculated per project or per item

Indirect cos ts affect the whole bus ines s and are thus calculated monthly or annually

Contractual cos ts are those services carried out by an individual or organization, other than the applicant, in the form of a procurement relationship. The cos ts a contractor, including an individual consultant, incurs for travel are included in the contractual line item of the budget.

The budget jus tification should addres s each of major cos t categories (s alaries , fringe benefits , equipment, travel, supplies , other direct cos ts , and indirect cos ts ), as well as any additional categories required by the sponsor.

Fringe benefits include but are not limited to the cos t of leave, employee insurance, pens ions , and unemployment benefit plans . The budget narrative should identify the applicant's fringe benefit rate.

The applicant should not combine the fringe benefit cos ts with direct s a laries and wages in the personnel category.

19 | P a g e

NICRA

To be reimbursed for indirect cos ts , you mus t firs t es tablish an appropria te negotia ted indirect cos t ra te agreement (NICRA). To do this , prepare an indirect cos t rate proposal and submit it to the cognizant federal agency. The cognizant federal agency is generally determined based on the preponderance of federal dollars you receive.

The term “de minimis ra te” refers to the rate that is available to certa in recipients (and certa in subrecipients , which is 10% of “modified tota l direct cos ts ” (MTDC). This is specifically defined in 2 CFR 200.68. This definition mus t be followed. If your indirect cos t rate is over 10%, you will need a NICRA with your cognizant agency, which is the Federal agency respons ible for reviewing, negotia ting, and approving cos t a llocation plans and indirect cos t proposals on behalf of a ll Federal agencies .

All direct s a laries and wages , applicable fringe benefits , materia ls and supplies , s ervices , travel, and up to the firs t $25,000 of each subaward (regardles s of the period of performance of the subawards under the award)

If the Fores t Service (FS) is your cognizant Agency and you need to obtain a NICRA, please vis it FS Resource Audit branch (RAB) Audit and Assurance Staff | US Fores t Service (usda.gov). Refer to the Appendix for the FS NICRA application that you may be required to submit. Please contact the RAB before filling out the form below.

Financial Capability

This document does not addres s a ll pos s ible circums tances that need to be cons idered when es tablishing internal controls or as ses s ing risk. Each applicant is respons ible for reviewing their practices and proces ses to determine where risks exis t and where and how controls can be es tablished to mitigate them, and also complying with pos s ible audits .

Grantees need adequate financial management sys tems to ensure that grants are used for intended purposes and in accordance with regulations . A capability as ses sment ensures that an applicant has adequate financial sys tems and enables awarding agencies to decide whether to award the grant, and whether conditions should be added. Asses sments of grant applicant capability provide management with confidence that grantees have, or will have, the required financial sys tems and allow management to plan the level of grantee overs ight.

The Fores t Service policy requires a pre-award evaluation of the adminis tra tive and programmatic capabilities of applicants . Applicants are required to answer ques tions regarding financial management sys tems , property, and procurement s tandards , as s igned personnel, and travel policies . Below are the 3 areas to be evaluated. Refer to the Appendix for the Fores t Service Form 1500-22 Financial Capability Ques tionnaire.

Financial Management Sys tem Standards

Recipients are required to meet the s tandards and requirements for financial management sys tems set forth or referenced in 2 CFR Part 200.302, as applicable. The s tandards and requirements for a financial management sys tem are es sentia l to the grant rela tionship.

Recipients mus t have in place accounting and internal control sys tems that provide for appropriate monitoring of grant accounts to ensure that obligations and expenditures are reasonable, a llocable, and allowable. Internal controls in accounting are procedures that are put in place within an https://www.fs.usda.gov/about-agency/audit-assurance https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/section-200.302

20 | P a g e organization to ensure bus ines s is carried out in an orderly, effective, and accurate manner. In addition, the sys tems must be able to identify large unobligated balances , accelerated expenditures , inappropriate cos t transfers , and other inappropria te obligation and expenditure of funds .

Property Management Sys tem Standards

Generally, recipients may use their own property management policies and procedures for property purchased, cons tructed, or fabricated as a direct cos t provided they observe the regulatory requirements in 2 CFR Parts 200.310 through 200.316, as applicable. Sta te governments will use, manage, and dispose of equipment acquired under a grant in accordance with s ta te laws and procedures as specified in.

Procurement Sys tem Standards and Requirements

Recipients may acquire a variety of goods or services in connection with a grant-supported project, ranging from those that are routinely purchased goods or s ervices to those that involve subs tantive programmatic work. States may follow the same policies and procedures they use for procurements from non-Federal funds and ensure that every purchase order or other contract includes any clauses required by 2 CFR Part 200.327. All other recipients mus t follow the requirements in 2 CFR Part 200.317 through 200.327 and the purchase of goods or s ervices through contracts under grants , as applicable.

Equipment

Equipment can only be purchased with Federal funds with written approval of Federal Awarding agency (2 CFR 200.439). Ins tructions for how to handle equipment purchased can be found in 2 CFR

200.313. In addition, review the NOFO carefully to addres s any additional equipment requirements from the awarding agency. Below is a synops is to give you a broad unders tanding, it is recommended to carefully review the entire equipment section referenced in 2 CFR 200.

• Must get written prior approval to purchase

• The Title will Ves t upon acquis ition with the Non-Federal entity

• The equipment mus t be properly used and disposed of.

• Equipment mus t be used in the program or project for which it was acquired.

• Very Detailed records mus t be kept of the Equipment and damage, or los s mus t be inves tigated.

• Must be maintained

• When no longer needed the equipment mus t be disposed of according to awarding agency.

See Appendix for the Fores t Service Equipment J us tification & Certification Statement form.

https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR8feb98c2e3e5ad2/section-200.310 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR8feb98c2e3e5ad2/section-200.316 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR45ddd4419ad436d/section-200.327 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR45ddd4419ad436d/section-200.317 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR45ddd4419ad436d/section-200.317 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR45ddd4419ad436d/section-200.327 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRed1f39f9b3d4e72/section-200.439 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR8feb98c2e3e5ad2/section-200.313 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/subject-group-ECFR8feb98c2e3e5ad2/section-200.313

21 | P a g e

Appendix

Financial Capability FS-1500-22

22 | P a g e

23 | P a g e

24 | P a g e

NICRA Ins tructions & Checklis t

U.S. Fores t Service Albuquerque Service Center

Resource Audit Branch

Indirect Cos t Proposal Guidance and Checklis t For Non-profit Entities

Subject to 2 CFR Part 200 (Formerly 2 CFR Part 230)

Proposals may be based on prior year actual data, actual data with forward- adjus tments or any combination of information.

All documentation requirements described below mus t be met.

Please E-mail the proposal, adjoining schedules , financial s tatements (or IRS Form 990) and General Ledger (GL) to rab@fs .fed.us . Since we review proposals e lectronically, Microsoft Excel is the preferred format for submitting proposal calculations and schedules .

If the GL files and other s chedules are too large to submit electronically via e- mail, you may wish to s end a CD ROM or other compres sed file to:

U.S. Fores t Service Albuquerque Service Center

Resource Audit Branch ATTN: Indirect Rates 101B Sun Avenue NE Albuquerque, NM 87109

Our fax number is : (866) 436-5939

Provide a cover letter s ta ting the purpose of the proposal and the proposed ra te or ra tes , as applicable.

Were the agency’s books and records audited in accordance with OMB A-133 or AICPA s tandards?

If so, please submit a copy of the auditor’s report or the grantee internet s ite where it can be located.

If no audit was performed, please provide copies of IRS Form 990 ins tead.

The proposed indirect cos t pool and allocation base mus t reconcile to the financial s ta tements (or IRS Form 990) and general ledger (G/ L):

Provide detailed s chedules to tie financial s ta tement amounts (or IRS Form 990) and GL expense accounts to the proposed indirect cos ts pool and base.

The allocation base mus t be complete (i.e., does it include a ll activities that benefit from the indirect cos t pool?)

The allocation base mus t be fully explained (e.g., direct labor with or without direct fringe mailto:rab@fs.fed.us

25 | P a g e

Explain any differences between proposed indirect cos t pool and allocation base amounts , financial s ta tements (or IRS Form 990), and the GL.

Are unallowable expenses eliminated from the indirect cos t pool? The proposed cos t pool mus t have sufficient detail to make an independent determination.

Provide a calculation of the indirect cos t rate based on item 3. Above.

An example of this calculation, us ing tota l direct cos t, is below. Allocation bases typically differ from one organization to another.

CALCULATION OF INDIRECT RATE

Pool (a) $ 750,000

Base (b) $ 3,225,000

Rate (a)/(b) 23.26%

Note: Base is tota l direct cos t, excluding capita l expenditures . Unallowable cos ts are excluded from the calculation.

A schedule of unallowable cos t is provided.

During the proposal fis cal year, were there any s ignificant changes to the accounting sys tem or to the definition or accounting treatment of any expense category (e.g., a change in building/ equipment cos ting methodology, a change in charging an expense from direct to indirect or vice versa)?

Provide a narrative description of how like expenses are determined to be direct or indirect (i.e., labor, travel, materia ls and supplies , etc.)

Certifications .

Submit, as part of the proposal, a certification that the requirements and s tandards regarding lobbying have been complied with. See Appendix B to Part 230- Selected items of Cos t (paragraph 25). A copy is attached.

Certificate of Indirect Cos t. A copy is attached.

As appropriate, are previous unders tandings with the Fores t Service or other federal agency incorporated into the proposal (for example, previous ra te agreements ).

Provide a schedule of expenditures on federal awards (SEFA).

Organizational Chart

Provide the following information:

Organization Name (if different from the non-profit agency submitting the proposal)

26 | P a g e

Point of Contact for the proposal: name, title, email, phone number, fax number

Name and title of officia l who is authorized to s ign the ra te agreement.

Note: All final negotiation agreements are e-mailed us ing Resource Audit Branch electronic is suance procedures . Please provide the name and e-mail addres s of the individual who is to receive the agreement

LOBBYING COST CERTIFICATE

I hereby certify that the has complied with the requirements and s tandards on lobbying cos t in 2 CFR Part 200 (formerly 2 CFR Part 230) for the period 20XX through 20XX.

Non-Profit Organization:

Signature:

Name of Officia l: (Printed)

Title: __________________________________________________

Date of Execution __________________________________________________

This is to certify that I have reviewed the indirect cos t proposal submitted herewith and to the bes t of my knowledge and belief:

All cos ts included in this proposal based on actual cos t incurred as of , and dated , to es tablish final or billing indirect cos ts ra tes for fis cal year ended are a llowable in accordance with the requirements of the Federal award(s ) to which they apply and 2 CFR Part 200 (2 CFR Part 230). Unallowable cos ts have been adjus ted for in a llocating cos ts as indicated in the indirect cos t proposal.

All cos ts included in this proposal are properly a llocable to Federal awards on the bas is of a beneficia l or causal rela tionship between the expenses incurred and the agreements to which they are a llocated in accordance with applicable requirements . Further, the s ame cos ts that have been treated as indirect cos ts have not been cla imed as direct cos ts . Similar types of cos ts have been accounted for cons is tently.

Non-profit Organization

Signature:

Name of Authorized Official:

Title:

Date of Execution:

27 | P a g e

Budget and Narra tive Sample

Below illus trates a s ample detailed budget and narrative. with guidance for completing SF 424A and s ection B for the budget period. Pleas e note this only a s ample and does not include all that is required.

A. Pers onnel: Provide employee(s ) (including names for each identified pos ition) of the applicant/ recipient organization, including in-kind cos ts for thos e pos itions whos e work is tied to the grant project.

FEDERAL REQUEST

Pos ition Name Annual Salary/Rate Level of Effort Cos t

(1) Project Director

J ohn Doe $64,890 10% $6,489

(2) Grant Coordinator

To be s elected $46,276 100% $46,276

(3) Clinical Director

J ane Doe In-kind cos t 20% $0

TOTAL $52,765

J USTIFICATION: Des cribe the role and res pons ibilities of each pos ition.

(1) The Project Director will provide da ily overs ight of the grant and will be cons idered key s taff.

(2) The coordinator will coordinate project s ervices and project activities , including training, communication and information dis s emina tion.

(3) Clinical Director will provide neces s ary medical direction and guidance to s taff for 540 clients s erved under this project.

Key s taff pos itions require prior approval after review of credentials of res ume and job des cription.

The key s taff pos itions identified in Section I-2 Expecta tions mus t be included in the Pers onnel s ection and/ or the Contractual Section (F). In addition, the Project Director mus t be the s ame as the Project Director named in s ection 8f of the SF-424.

NON-FEDERAL MATCH

Pos ition Name Annual Salary/Rate Level of Effort Cos t

(1) Project Director

J ohn Doe $64,890 7% $4,542

(2) Prevention Specialis t

Sarah Smith $26,000 25% $6,500

(3) Peer Helper Ron J ones $23,000 40% $9,200

(4) Clerical Support

Sus an J ohns on $13.38/ hr x 100 hr. $1,338

TOTAL $21,580

J USTIFICATION: Des cribe the role and res pons ibilities of each pos ition.

(1) The Project Director will provide da ily overs ight of grant and will be cons idered key s taff.

28 | P a g e

(2) The Prevention development s pecialis t will provide s ta ffing s upport to the working council.

(3) The peer helper will be res pons ible for peer recruitment, coordination and s upport.

(4) The clerical s upport will proces s paperwork, payroll, and expens e reports which is not included in the indirect cos t pool.

FEDERAL REQUEST (enter in Section B column 1, line 6a of form SF424A) $52,765

NON-FEDERAL MATCH (enter in Section B column 2, line 6a of form SF424A) 21,580

B. Fringe Benefits : Lis t a ll components of fringe benefits rate

Component Rate Wage Cos t

FICA 7.65% $52,765 $4,037

Workers Compens a tion 2.5% $52,765 $1,319 Ins urance 10.5% $52,765 $5,540

TOTAL $10,896

Component Rate Wage Cos t

FICA 7.65% $21,580 $1,651

Workers Compens a tion 2.5% $21,580 $540 Ins urance 10.5% $21,580 $2,266

TOTAL $4,457

J USTIFICATION: Fringe reflects current rate for agency.

FEDERAL REQUEST (enter in Section B column 1, line 6b of form SF424A) $10,896

NON-FEDERAL MATCH (enter in Section B column 2, line 6b of form SF424A) $4,457

C. Travel: Explain need for all travel other than tha t required by this application. Loca l travel policies prevail.

Purpos e of Travel Location Item Rate Cos t

(1) Grantee Conference

Was hington, DC Airfare $200/ flight x 2 pers ons

$400

Hotel $180/ night x 2 pers ons x 2 nights

$720

Per Diem (meals and incidentals )

$46/ day x 2 pers ons x 2 days

$184

(2) Loca l travel Mileage 3,000 miles @.38/ mile

$1,140

TOTAL $2,444

J USTIFICATION: Des cribe the purpos e of travel and how cos ts were determined.

29 | P a g e

(1) Two s taff (Project Director and Evaluator) to attend mandatory grantee meeting in Was hington, DC.

(2) Local travel is needed to attend local meetings , project activities , and training events . Local travel rate is bas ed on organization’s policies / procedures for privately owned vehicle (POV) reimburs ement rate. If policy does not have a rate us e GSA.

Purpos e of Travel Location Item Rate Cos t

(1) Regional Training Conference

Chicago, IL Airfare $150/ flight x 2 pers ons

$300

Hotel $155/ night x 2 pers ons x 2 nights

$620

Per Diem (meals ) $46/ day x 2 pers ons x 2 days

$184

(2) Loca l Travel Outreach works hops

Mileage 350 miles x .38/ mile

$133

TOTAL $1,237

J USTIFICATION: Des cribe the purpos e of travel and how cos ts were determined.

(1) Grantees will provide funding for two members to attend the regional technica l as s is tance works hop (our clos es t loca tion is Chicago, IL).

(2) Local travel rate is bas ed on agency’s POV reimburs ement rate. If policy does not have a rate us e

GSA.

FEDERAL REQUEST (enter in Section B column 1, line 6c of form SF424A) $2,444

NON-FEDERAL MATCH (enter in Section B column 2, line 6c of form SF424A) $1,237

D. Equipment: an article of tangible, nonexpendable, pers onal property…