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Additional Federal Awards Compliance Requirements A number of the Federal awards received by the city are passed -through the State of Minnesota. Managementwill consider both the OMB UGG - Uniform Grant Guidance Compliance Supplement and any applicable compliance requirements as set forth by the State of Minnesota. General Information Source of Information — Each year the Federal government (Office of Management and Budget) issues a comprehensive document on the compliance requirements each grant recipient is obligated to follow in general terms, along with program -specific guidance on various grant awards. There are 12 compliance requirements identified, each of which is considered individually in this manual. The following pages document the policies and procedures of the city related to compliance with such procedures, as applicable. In each year that the city is subject to a single audit, applicable compliance requirements are expected to be tested in detail by the city's independent auditors. Objectives — The objectives of most compliance requirements are generic in nature. While the criteria for each program may vary, the main objective of the compliance requirement is relatively consistent across all programs. As such, the policies and procedures of the city have been based on the generic sense of the compliance requirement. For selected compliance requirements, this manual addresses the specific regulations applicable to individual grants. This is not intended to imply that a program is not subject to such policies if it is not specifically mentioned here. It is the intention of the city that all Federal awards are subject to the following policies and procedures. Controls over Compliance — In addition to creating policies and procedures over compliance with provisions of Federal awards, the city has implemented internal controls over such compliance, generally in the form of administrative oversight and/or independent review and approval. In order to document these control activities, all independent reviews must be signed/initialed and dated. Documentation — The city will maintain adequate documentation to support both the compliance with applicable requirements as well as internal controls over such compliance. This documentation will be provided to the city's independent auditors and/or pass -through grantor agencies, as requested, during the single audit and program audits. Activities Allowed/Un-allowed and Allowable Costs/Cost Principles Source of Governing Requirements — The requirements for activities allowed or un-allowed are contained in program legislation, Federal awarding agency regulations, and the terms and conditions of the award. The requirements for allowable costs/cost principles are contained in the A-102 Common Rule (§ .22), OMB Circular A-133 (2 CFR section 215.27), program legislation, Federal awarding agency regulations, and the terms and conditions or the award. In order to ensure compliance with these requirements, the city has implemented the following policies and procedures: 1. All grant expenditures will be in compliance with OMB Circular 2 CFR 200, Subpart E, State law, city policy, and the provisions of the grant award agreement, which will also be considered in determining allowability. Grant funds will only be used for expenditures that are considered reasonable and necessary for the administration of the program. 2. Grant expenditures will be approved by department heads/program managers initially through the purchasing process and again when the bill or invoice is received. This will be evidenced by signature or initials and date on the invoice or by an approval documented via email. Accounts payable disbursements will not be processed for payment by the Finance Department until necessary approval has been obtained. 3. Payroll costs will be documented in accordance with OMB Circular A-87 as described in the section ofthis manual titled "Payroll and Timekeeping". Page 10