Financial Management Homeland Security Grant Program

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Financial ManagementHomeland Security Grant
Program

• Michigan State Police
• Emergency Management and
• Homeland Security Division

Ms. Penny Burger, Financial Manager Ms. Nancy
Downs, Financial Support Unit Manager
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Overview

• Improper Payments
• Proof of Payment
• Advances
• Accounts Payable
• Questions

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Improper Payments
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Improper Payments Elimination and Recovery Act
(IPERA)

• Enacted in 2002 as the Improper Payments
  Information Act (IPIA) as an effort to strengthen
  financial management controls so that Federal
  agencies could better detect and prevent improper
  payments and better ensure that taxpayer dollars
  are spent wisely and efficiently.
• The Improper Payments Elimination and Recovery
  Act (IPERA) was signed by the President and
  enacted as a public law (111-204) in July 2010
  and officially amended IPIA requirements.

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Improper Payments Elimination and Recovery Act
(IPERA) (cont.)

• Provides more transparency and accountability of
  government.
• Commitment by the President to further reduce
  payment errors and eliminate waste, fraud and
  abuse in Federal programs.
• Enacted with aggressive goal set by the President
  to reduce government-wide improper payments by
  50 billion and to recapture at least 2 billion
  in actual improper payments within the first two
  years.

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Improper Payments Elimination and Recovery Act
(IPERA) (cont.)

• The objective of the IPERA is to enhance the
  accuracy and integrity of federal payments. More
  specifically
• Validate that a Programs processes, procedures
  and controls are sound, thereby increasing
  Program credibility.
• Elevate a Programs awareness of risk areas
  within its processes for increased focus.

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Improper Payments Elimination and Recovery Act
(IPERA) (cont.)

• Objectives of the IPERA (cont.)
• Identify targeted areas in which increased
  training or improved policies, processes and
  procedures need to be developed to improve
  Program efficiency and effectiveness.
• Grantees must comply with all regulations (e.g.
  44CFR and 2CFR) and program guidance for payments.

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Improper Payments Elimination and Recovery Act
(IPERA) (cont.)

• IPERA applies to ALL federal departments and
  agencies and aims to further institutionalize
  efforts to eliminate improper payments.
• Federal agencies annually required to identify
  programs that are vulnerable to significant
  improper payments.
• Federal agencies must report to Congress steps
  being taken to reduce such (improper) payments.
• IPERA requires statistical sampling and testing
  on an annual basis.
• Expands the use of Payment Recapture Audits by
  all Federal agencies to recover funds.

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Payment Recapture Audits

• Mechanism for detecting and recapturing payment
  errors.
• Effective payment recapture audits are
  investigations in which specialized auditors
  (often private sector, not state audit staff)
  using cutting-edge technology and tools to
  scrutinize government payments and then find and
  reclaim taxpayer funds made in error or gained
  through fraud.

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Payment Recapture Audits (cont.)

• Private sector auditors that conduct payment
  recapture audits are compensated based on the
  amount of improper payments they identify that
  are then reclaimed (i.e. they are paid on a
  contingency basis on the amounts actually
  recovered) and therefore have incentive to find
  and recapture overpayment errors.
• State auditors are not considered private sector
  auditors.

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Complying With the IPERA

• Expenditures must be properly documented,
  allowable, reasonable, allocable and obligated
  within the period of performance and otherwise
  eligible under award terms and conditions.
• FEMA contractors must comply with all
  regulations.
• Payments that are ultimately determined to be
  improper will be subject to recoupment.

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Improper Payments Defined

• An improper payment includes any payment that was
  made to an ineligible recipient or for an
  ineligible service, duplicate payments, payments
  for services not received, and payments that are
  for the incorrect amount.
• When an agencys review is unable to determine
  whether payment was proper as a result of
  insufficient or lack of documentation, this
  payment must also be considered an error.

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Proof of Payment
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Sufficient Proof of Payment

• External document verifying the outlay of funds
• Copy of canceled check
• Computer-generated report from a financial
  institution showing outlay of funds
• Bank Statement
• Detailed receipt indicating item or service
  purchased, date and method of payment.
• Internal source documents are not sufficient to
  prove outlay of funds.

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Sufficient Proof of Payment

• Effective immediately, any reimbursement requests
  submitted to EMHSD that do not have sufficient
  proof of payment attached will not be processed
  until sufficient proof of payment has been
  submitted and received by the appropriate EMHSD
  Analyst.

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Documentation for Payroll Reimbursement Requests

• Sufficient proof of payment documentation to
  accompany EMD-055 payroll reimbursements would
  include the following
• Copy of Payroll Ledger, which includes employee
  name, pay date, amount paid and check number.
• Copy of actual pay stubs for employees proving
  that payment was made and when.
• Timecards for employees are NOT sufficient proof
  of payment and will ONLY be accepted as
  supporting documentation that accompanies proof
  that payment was actually made to the employee as
  stated above.
• Copy of approved AAF and required attachments.

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Documentation for Travel Reimbursement Requests

• Sufficient proof of payment documentation to
  accompany EMD-057 travel reimbursements would
  include the following
• Copy of paid invoice and proof payment was made
  (i.e. airfare, hotel billing).
• Google, Yahoo map outlining total miles driven to
  substantiate mileage reimbursement request.
• Copies of receipts for actual expenses, such as
  parking, tolls, ground transportation, and
  lodging.
• Receipts for meals do not need to be sent to
  EMHSD, but must be retained at the local
  jurisdiction for audit and review as necessary.
• Meal reimbursements must not exceed established
  state approved rates or local rates, whichever is
  less.
• Copy of approved AAF and required attachments.

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Documentation for Equipment Reimbursement Requests

• Sufficient proof of payment documentation to
  accompany EMD-056 for equipment reimbursements
  would include the following
• Copy of paid invoice. Information that must be
  on the invoice copy includes
• Approval to pay invoice including date of
  approval.
• Initials or signature of individual approving
  invoice to pay.
• Date payment was made and check number.
• Initials or signature of individual making
  payment of invoice.
• Proof of payment (canceled check, etc.)
• Copy of approved AAF and required attachments.
• EHP approval if required.

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Documentation for Supply/Other Reimbursement
Requests

• Sufficient proof of payment documentation to
  accompany EMD-056 supply/other reimbursements
  would include the following
• Copy of paid invoice. Information that must be
  on the invoice copy includes
• Approval to pay invoice including date of
  approval.
• Initials or signature of individual approving
  invoice to pay.
• Date payment was made and check number.
• Initials or signature of individual making
  payment of invoice.
• Proof of payment (canceled check, etc.)
• Copy of approved AAF and required attachments.

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Advances
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Advances

• Subgrantee may request an advance for 25,000 or
  more
• Subgrantee must submit letter, approved purchase
  orders, and approved AAF form
• Subgrantee must place advanced funds in an
  interest-bearing account
• Subgrantee may keep interest up to 100 per year
  for administrative expenses for all federal grant
  funds combined.

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Advances (cont.)

• Subgrantee must notify EMHSD quarterly, in
  writing, of any interest earned over 100
• Subgrantee must send EMHSD a check payable to the
  State of Michigan for any interest earned over
  100
• Interest received by EMHSD is returned to the
  federal government
• Advances cannot be outstanding for more than 120
  days

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Advances (cont.)

• All invoices and proof of payment must be dated
  within 120 days of the advanced payment issue
  date
• When advance purchases are completed, subgrantee
  must submit
• Reimbursement Coversheet (EMD-054)
• Copy of supporting paid invoices
• Copy of cancelled checks
• Detail forms (if necessary)
• Copy of approved AAF
• A check for unused portion of advance made
  payable to the State of Michigan

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Accounts Payable
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Accounts Payable

• Transaction that takes place at the end of a
  fiscal year. State of Michigans fiscal year is
  October 1 through September 30.
• Ensures that money spent in one fiscal year for
  goods and/or services is reimbursed with funds
  for that same fiscal year. (Required in
  accordance with Generally Accepted Accounting
  Principles (GAAP).)

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Accounts Payable (cont.)

• If goods/services were received on or before
  September 30, but the invoice was not received,
  an accounts payable must be established.
• If the invoice for the goods/services was
  received and payment made to the vendor, but a
  reimbursement request cannot be completed and
  submitted to EMHSD before the requested deadline,
  an accounts payable must be established.

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Examples of Payables

• Previously ordered equipment arrives on September
  30, but invoice has not been received yet.
• The contractor performed services during the
  month of September, but wont send a bill until
  the middle of October.
• Invoices were paid on September 30, but a
  reimbursement request cannot be completed,
  approved, and submitted before the year-end
  deadline that EMHSD has given.

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Establishing Accounts Payable

• Complete Payables Estimate form sent by EMHSD
  Financial
• Complete separate Payable Estimate forms for each
  grant.
• Attach documentation that supports the estimated
  payable, such as invoice copy, shipping receiver,
  or billing estimate.
• Fax or mail completed package to EMHSD Financial
  Section on or before deadline.

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If Payables Are Not Established

• In order to make payments greater than 10,000
  for old fiscal years without a payable, EMHSD is
  required to obtain special permission from the
  State Budget Office (SBO) before payment can be
  made. This delays processing.
• Continued requests of the SBO to make these
  special approvals has raised questions in the
  accounting practices regarding local programs at
  EMHSD, resulting in longer than usual delays.
• Average approval time by SBO this fiscal year has
  been three months.

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Reimbursing a Payable

• Do not complete one reimbursement packet for both
  payable and new year expenditures on the same
  form, even if they are the same grant.
• Payable expenses incurred through September 30
  that have been established at EMHSD
• Current year expenses incurred beginning
  October 1
• Submit reimbursement requests for payables no
  later than December 31st.

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Questions?
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Contact Information
Ms. Sandy Long, Analyst Phone
[phone] Email LongS7_at_Michigan.gov Ms.
Carla Richardson, Analyst Phone [phone]
Email RichardsonC6_at_Michigan.gov Ms. Nancy
Downs, Financial Support Unit Manager Phone
[phone] Email DownsN_at_Michigan.gov Ms.
Penny Burger, Financial Manager Phone (517)
333-5046 Email BurgerP_at_Michigan.gov