GAC Grant Accounting & Federal Compliance 2 — Questions and Answers
Question 1: What is 'cost sharing' (or matching) in the context of federal grant management?
- The practice of splitting costs proportionally among multiple federal programs
- The recipient's contribution of non-federal resources toward federally funded project costs (Correct answer)
- The allocation of indirect costs across multiple concurrent grant awards
- The process of billing allowable costs to more than one federal grant simultaneously
Correct answer: The recipient's contribution of non-federal resources toward federally funded project costs
Cost sharing refers to the portion of project costs not borne by the federal government, representing the non-federal entity's required contribution of its own or third-party resources to the project.
Question 2: Under 2 CFR Part 200, how is 'program income' defined?
- Income earned by federal agencies from administering grant programs
- Gross income earned by a non-federal entity that is directly generated as a result of federally supported activities during the period of performance (Correct answer)
- The total budget allocated to a federal grant program in a fiscal year
- Revenue from participant fees charged for activities completely unrelated to the federal award
Correct answer: Gross income earned by a non-federal entity that is directly generated as a result of federally supported activities during the period of performance
Program income is gross income earned by a non-federal entity that is directly generated by or earned only as a result of activities supported by the federal award during the period of performance.
Question 3: What monitoring responsibilities does a pass-through entity have toward its subrecipients under 2 CFR Part 200?
- Conduct a full independent financial audit of each subrecipient annually
- Review financial and performance reports, conduct site visits as needed, and ensure subrecipients meet compliance requirements (Correct answer)
- Approve all subrecipient expenditures before any disbursement is made
- Assign a dedicated federal compliance officer to each subrecipient organization
Correct answer: Review financial and performance reports, conduct site visits as needed, and ensure subrecipients meet compliance requirements
Pass-through entities must actively monitor subrecipient activities to ensure compliance with federal requirements, including reviewing reports, conducting risk-based site visits, and following up on audit findings.
Question 4: What is the 'period of performance' for a federal grant award?
- The time period allowed for completing the required Single Audit after award closeout
- The time interval specified in the federal award during which the recipient may incur new obligations and expenditures of award funds (Correct answer)
- The period during which federal agency officials may conduct on-site inspections of grant records
- The duration of the grant application review and selection process
Correct answer: The time interval specified in the federal award during which the recipient may incur new obligations and expenditures of award funds
The period of performance is the time interval specified in the federal award during which the non-federal entity may incur new obligations to the award and expend federal funds for allowable costs.
Question 5: What is a 'no-cost extension' in federal grants management?
- An increase in grant funding provided without requiring additional programmatic deliverables
- An extension of the period of performance beyond the original end date without the addition of new federal funds (Correct answer)
- A waiver of indirect cost recovery requirements for the extended grant period
- An exemption from Single Audit requirements during a temporarily extended period
Correct answer: An extension of the period of performance beyond the original end date without the addition of new federal funds
A no-cost extension allows a recipient to extend the period of performance beyond the original end date without receiving additional federal funds, providing more time to complete approved project activities.
Question 6: Under 2 CFR Part 200, which procurement method is required for purchases exceeding the simplified acquisition threshold when using federal grant funds?
- Micro-purchase procedures without competitive bidding
- Small purchase procedures with informal price quotes
- Formal competitive procurement (competitive proposals or sealed bids) (Correct answer)
- Sole-source procurement with a written justification
Correct answer: Formal competitive procurement (competitive proposals or sealed bids)
Federal grant regulations require formal competitive procurement methods—either competitive sealed bids or competitive proposals—for purchases exceeding the simplified acquisition threshold to ensure fairness and price reasonableness.
Question 7: What is the purpose of a 'prior approval' requirement in federal grant management?
- To permit recipients to begin spending federal funds before the award agreement is fully executed
- To require recipients to obtain federal awarding agency consent before making certain significant programmatic or budget changes (Correct answer)
- To establish initial budget allocations and line-item authorizations at award inception
- To document and ratify expenditures made during a preceding grant period for carry-forward purposes
Correct answer: To require recipients to obtain federal awarding agency consent before making certain significant programmatic or budget changes
Prior approval requirements ensure that the federal awarding agency reviews and consents to significant deviations—such as scope changes, key personnel changes, or substantial budget reallocations—that could affect the grant's purpose or financial integrity.
GAC Grant Accounting & Federal Compliance 2
What is 'cost sharing' (or matching) in the context of federal grant management?