Key Elements of

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• Key Elements of
• Financial Management

Presented by Kris Tecce ktecce_at_walkerllp.com
877-363-9300
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Learning Objectives

• Increase knowledge of the CNCS and WV Commission
  grants management processes
• Increase awareness of grant provisions and OMB
  regulatory requirements of CNCS grants
• Increase aptitude for incorporating effective
  financial management practices
• Increase understanding of the interconnection of
  fiscal and program management

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• Regulatory Requirements

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Regulatory Requirements Regulatory Requirements
Provide the Provide the Guidance and Foundation
for Guidance Foundation For Your Your
Financial Management Systems Financial Management
Systems
OMB CIRCULAR REQUIREMENTS
STATE REQUIREMENTS
AMERICORPS PROVISIONS
AWARD LETTER
PROGRAM
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Determination of Acceptability of Costs

• Conditions in award letter
• Provisions
• OMB Circulars
• Program Applicability
• Allocable
• Allowable
• Reasonable
• Necessary

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Office of Management and Budget OMB Requirements

• Recipients are responsible for
• Managing and monitoring each project, program,
  sub-award, function or activity supported by the
  award
• Effective control over and accountability for all
  funds, property, and other assets.
• Comparing outlays with budget amounts for each
  award
• Budget analysis and explanation of cost overruns
  or high unit cost

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Uniform Administrative Requirements

• Sets standards for obtaining consistency and
  uniformity among Federal agencies in managing
  grants and cooperative agreements
• Pre-award requirements
• Post-award requirements for financial and program
  management
• Property standards
• Procurement standards
• Reports and records
• Close-outs

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Cost Principles

• Establishes cost principles and standards for
  federal funds
• Circular establishes principles and standards to
  provide a uniform approach for determining costs
  and to promote effective program delivery,
  efficiency, and is designed to ensure that the
  Federal government gets its fair share of costs.

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OMB Circular A-133 Audit Audit

• A-133 audits must be performed annually, if
• Your organizations expends 500,000 or more of
  federal funds in your fiscal year (for fiscal
  years ending after 12/31/03)
• The Audit must be performed by an independent
  certified public accountant
• The cost of audit should be included as part of
  administrative costs and not a direct cost to any
  grant

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Summary of Relevant OMB Circulars
Http//www.whitehouse. gov/OMB/circulars/index.htm
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CNCS Grant Provisions

• Guiding principles for Grant Activities
• Contain both Program and Fiscal guidelines
• Should be read by and available for both Program
  and Financial staff
• Should be distributed to all sub-grantees
• CNCS revises and updates Grant Provisions annually

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• Match
• and
• In-Kind Donations

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CNCS Prohibited Program Activities

• Attempting to influence legislation.
• Organizing or engaging in protests, petitions,
  boycotts, or strikes.
• Assisting, promoting or deterring union
  organizing.
• Impairing existing contracts for services or
  collective bargaining agreements.
• Engaging in partisan political activities or
  other activities designed to influence the
  outcome of an election to any public office.
• Participating in, or endorsing, events or
  activities that are likely to include advocacy
  for or against political parties, political
  platforms, political candidates, proposed
  legislation, or elected officials.

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CNCS Prohibited Program Activities

• Engaging in religious instruction conducting
  worship services providing instruction as part
  of a Program that includes mandatory religious
  instruction or worship constructing or operating
  facilities devoted to religious instruction or
  worship maintaining facilities primarily or
  inherently devoted to religious instruction or
  worship or engaging in any form of religious
  proselytization.
• h. Providing a direct benefit to
• A for-profit entity
• A labor union
• A partisan political organization
• An organization engaged in the religious
  activities described in the preceding subclause,
  unless Grant funds are not used to support the
  religious activities or
• A nonprofit entity that fails to comply with the
  restrictions contained in section 501(c) (3) of
  U.S. Code Title 26.
• i. Voter registration drives by AmeriCorps
  members is an unacceptable service activity.

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WV Commission Cooperative Agreement

• Commission approval for any changes
• Reporting deadlines
• Nepotism not allowed
• MLK project required
• Add Commission to publicity
• Attend required training
• Sustainability plan

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• Policies Procedures

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Policies Procedures

• Documented Policies and Procedures are important
  because
• They are the standards for the organizations
  operations
• They help in maintaining information that is
  crucial to operations that would otherwise remain
  in employees heads
• They help in orienting new employees and
  substitutes if the appropriate personnel are
  absent

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Specific Policies Procedures for CNCS

• Organizations want to review current Policies
  Procedures to ensure that activities required for
  CNCS are documented including
• Financial Reporting
• Cash draw-downs
• Budgeting
• Sub-grantee management

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• Documentation

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Documentation

• Design a system to group grant activities and
  documents. Include items such as
• Grant letter, amendments and original grant
  application
• Documents from sub-grantees
• Expenses/vendors, consultant agreements, etc.
• General correspondence
• Monthly financial reports (e.g., budget to actual)

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Documentation Primary Goal

• All expenditures should contain documentation
  (i.e., brief descriptions, agendas, reports etc.)
  that support why the transaction is allowable for
  AmeriCorps purposes
• Accounting records should trace back to source
  documentation

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Section I. A. Personnel Costs

• Salary
• Signed timesheets with supervisory approval
• Quarterly payroll returns (941)
• Payroll register
• Personnel file with salary/wage information
• Employment contract
• Cancelled checks/Direct deposit schedule

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Staff Activity Reporting Summary

• All salaries and wages charged to AmeriCorps
  grants must be supported by signed Time
  Attendance records except for
• State, Local and Indian Tribal governments must
  comply with OMB A-87
• Educational Institutions must comply with OMB A-21

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Time Activity Reporting

• OMB A-122 requirements of documentation for
  Activity reporting
• Must reflect an after-the-fact distribution of
  the employee actual activity
• Must account for the total activity of each
  employee
• Must be prepared at least monthly and should
  coincide with one or more pay periods
• Must be signed by the employee

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Time Activity Reporting

• Budget estimates do not qualify as support for
  expenditure, except on an interim basis, provided
  that
• The estimates produce reasonable approximation of
  the actual activity performed
• Quarterly comparison to actual activity is
  performed
• Budget estimates are revised at least quarterly
  to reflect changed circumstances

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B. Personal Fringe Benefits

• Benefits For budget there is an estimate
  calculated, however you must have supporting
  documentation for amounts charged to grants
• Insurance receipts
• Cost allocation plan
• Paid invoices

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C.1 Staff Travel or C.2 Member Travel

• Travel
• Travel authorization
• Paid travel-related receipts/invoices
• Per diem rates (applicable for region)
• Mileage calculation
• Travel reimbursement requests
• Reconciliation of advances to payments

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Equipment Maintenance Records
Records should be maintained for all equipment in
use and should include at a minimum

• Description and funding source (including grant
  number)
• Manufacturer serial number
• Title holders name and address
• Acquisition date and cost
• Percentage of Federal financial participation

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E. Supplies

• Paid invoices/receipts that clearly shows amounts
  
• Cost allocation plan, if used to allocate
  expenses, that demonstrates consistency of
  treatment. Costs must be uniformly treated for
  both federally financed and other activities
  within organization

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F. Contractual and Consultant Services

• Payments to consultants services under this grant
  may not exceed 443 per day (exclusive of
  indirect expenses, travel, and supplies)
• Grantee should retain consulting contract and
  invoices that support work provided.

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G.1. Staff or G.2. Member Training

• Training documentation
• Training agenda
• Course description and cost
• Sign-in sheet (if in-house)
• Consultant/Trainer agreement
• Paid invoices

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H. Evaluation

• Consultant agreement
• Paid invoices
• Evaluation results
• Other relevant documentation

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Section II. Member Costs

• Signed timesheets with supervisory approval
• Quarterly payroll returns (941)
• Insurance receipts
• Payroll register

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Section II. Matching

• Grantees must match member living allowance in
  cash
• Match must be at least 15 of the minimum living
  allowance
• Living allowance paid in excess of minimum must
  be paid entirely from grantee share

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AmeriCorps Members Eligibility Requirements

• U.S. Citizen or Permanent Resident
• At least 17 years (16 if Youth Corps)
• High School diploma or GED or agree to obtain one

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Member Contracts

• Amount of Living Allowance, method of Payment
• Other Member Benefits
• Start and End Dates of Term
• Minimum Hours
• Prohibited Activities

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Member Contracts (continued)

• Expectations for Member Behavior
• Rules for Termination, Suspension, Disciplinary
  Action
• Drug-Free Workplace Act Requirements
• Grievance Procedures

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Prohibited Activities May Not Be
Performed In The Course of Duties

• Grantee should have a plan to ensure members do
  not participate in prohibited activities
• Lobbying Activities
• Political Activities
• Religious Activities
• Advocacy Activities
• Fundraising Activities

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Member Time sheets

• Identify eligible activities
• Separate service and training hours
• Ensure accuracy
• Member and supervisor signatures

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National Service Trust Forms

• Enrollment forms
• Exit Forms
• Change of term
• WBRS timesheets

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Member Files

• Overview of set-up Organization

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Section III. Administrative Costs

• Option A Organization using the Corporation
  Fixed Percentage Method
• Indirect costs can be up to 5 of Corporation
  share, and match in grantee share cannot exceed
  10
• These rates can be used with out supporting
  documentation.
• Option B Organization has Federally Approved
  Indirect Cost Plan Use of indirect rate
• Calculations done using supporting rate
• Documentation supporting amounts used in
  calculating rate
• Calculations to support amounts reported on
  Periodic Expense Report (PER)

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Administrative Costs Include

• General expenses related to the overall
  administration of an organization that receives
  Corporation funds
• Administrative Costs includes items such as
• Accounting, financial, auditing, contracting or
  general legal services
• Internal evaluation (except for programs)
• General liability insurance that project the
  organization (Not solely related to a program)

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Administrative Costs

• Do not include items such as
• Allowable direct charges for Members (living
  allowance, insurance payments made on Members
  behalf)
• Costs for staff who train, place or supervise
  Members or directly benefit programs
• Independent evaluations of programs
• Facility costs that primarily support programs

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Records Retention

• Retain all financial records
• 3 years from date of submission of final
  Financial Status Report
• If there is an on-going audit 3 years from final
  audit resolution
• Its a good idea to retained Member Records for
  seven years, which is the length of time they
  have to use their educations award

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• Accounting

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Efficient Accounting System

• System must be capable of
• Distinguishing grant verses non-grant related
  expenditures
• Identifying costs by program year
• Identifying costs by budget category
• Differentiating between direct and indirect costs
  (administrative costs)

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Efficient Accounting System

• An Efficient Accounting System (Continued)
• Maintains Federal/non-Federal matching funds
  separately from grant funds
• Records in-kind contribution as both revenues and
  expenses
• Allows management to easily obtain financial
  reports at both the summary or detailed levels
• Accounting information and documents should
  correlate to financial reports submitted to CNCS

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Accounting system that Does not segregate funds
Accounting System
Department of Education Matching Grant
AmeriCorps CNCS Grant
Ford Foundation Matching Grant
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Accounting system that properly segregates funds
Accounting System
Department of Education Matching Grant
Grant 1
AmeriCorps CNCS Grant
Grant 2
Grant 3
Ford Foundation Matching Grant
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• Budgets Controls

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Budget Controls

• A properly approved budget is
• A financial blueprint to help an organization
  meet its goals and objectives
• A tool to help ensure an organization is meeting
  matching requirements
• An Organization should
• Periodically review budget to actual expenses
• Assure budget changes are properly approved

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Budget Controls - continued

• AmeriCorps program must obtain prior approval for
  any changes to their approved budget.
• Budget line item changes should be submitted in
  writing

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Budget Amendments

• Written request to Commission
• Approval in writing from Commission
• Commission program officer requests change
  through CNCS prog. officer
• Egrants personnel makes amendment

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• Match In-kind Documentation

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Criteria for Matching AmeriCorps Funding

• Must be verifiable from recipient records
• Must not be included as contribution for other
  federally-assisted program
• Must be necessary and reasonable for
  accomplishing program objectives
• Must be allowable according to cost principles
  (OMB Circulars)
• Match for Member Support Costs must not come from
  Federal funds (except healthcare)

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Recording and Reporting In-Kind Contributions

• In-kind contributions documentation have same
  standards as other expenditures
• In-kind contributions must be entered into the
  general ledger and WBRS in order to be recognized
  as match
• In-kind contributions should be recorded as both
  a revenue and expense

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Documenting In-Kind Contributions Received
Document the basis for determining the value of
personal services, material, equipment, building,
and land. Give the donor a receipt signed by
donor which includes Name of donor
Date of donation Description of
item/service Estimated value Keep a copy of
the receipt in your files.
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The ABCD Tutoring Program 1299 N. Main Street,
Suite 110, Great City, Good State 00000-1234,
[phone] Fax [phone]
In-Kind Contribution Form
Name of Contributing Organization/Agency/Business/
Individual ____________________________________
Address of Above Contributor
_______________________________________ Phone
________________________ Printed/Typed Name
of Contributors Authorized Signee
________________________ Title
________________________ Signature of Authorized
Signee __________________________________________
___ Date ______________________________
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Valuation of In-Kind Services
Fair market value

• What-would-you-pay-if-it-was-not-donated?

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Contributed Services Valuation - Examples
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• Financial Reporting

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Financial Reporting

• All Financial reports must be supported by the
  accounting system and should match the
  information in the general ledger.
• Final financial status report is due within 90
  days after the end of the grant and must be
  cumulative
• Financial records must be retained for three
  years from the date of the submission of the
  final Financial Status Report (SF 269A)

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Web Based Reporting System (WBRS) Implications
for Financial Reporting

• Periodic Expense Report (PER) is an essential
  report in the WBRS
• Must be completed to create Financial Status
  Report (FSR)
• Should contain all program expenditures (i.e.
  cash, accruals, journal entries, in-kind
  contributions)
• Should be created utilizing source documentation
  from Accounting software

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FINANCIAL INFORMATION FLOW
Translate to Accounting Information (G/L)
Documentation
Reported to CNCS
WEB BASED REPORTING SYSTEM (WBRS)
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WBRS Implications for Funds Management

• Financial Status Reports (FSR)
• FSR will be generated from PER approved during
  the dates with in the designated period
• Data is not submitted to the Corporation until
  saved as approved
• Grantee must have PERs with dates covering exact
  date range as on FSR

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• Internal Controls

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Why Have Internal Controls?

• Improve accountability to Constituents
  (Community, Board of Directors, CNCS, etc.)
• Help organization achieve performance and budget
  targets
• Improve reliability of financial reporting
• Improve compliance with laws, regulations
• Prevent loss of resources and public trust

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Elements of Good Internal Controls

• Documented policies and procedures
• Adequate review process for financial reports and
  budgets
• Adequate cash management procedures (e.g.,
  monthly bank reconciliations)
• Physical safeguarding of assets
• System to track members employees activities
• System to follow-up on problems identified to
  ensure resolution

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Common Findings

• In an effort to learn from the past, we have
  summarized the common findings from the most
  recent Inspector General Audits
• This also acts as a good wrap-up, reinforcing
  what we discussed today.

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Common Audit Findings

• Lack of written policies and procedures
• Lack of or insufficient documentation
• Accounting records do not identify program costs
• Lack of supporting documentation for required
  match
• Inadequate tracking of member hours
• Incomplete Member Records

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Common Audit Findings

• Lack of internal controls
• Lack of segregation of duties
• Lack of documentation to support expenditures
• Inadequate supporting documentation for
  distribution of staff hours between federal and
  other activities

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Reflection

• Discuss one thing that you learned or was
  reminded at todays training
• And/Or
• How can you take something you learned today back
  to your office and implement it

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