Reimbursables & You! The presentation so nice, we’re doing it twice…sort of… April 29, 2008

2 Purpose Discuss current policies and procedures and why they exist Discuss the related audit findings and causes regarding reimbursable projects - Includes Standard Operating Procedures, Chapter 10, all reimbursable forms

April 29, Reimbursable Project Policies and Procedures Documents and correspondence move from FMC to LO to Finance to Budget Finance (only) alerts Budget of changes to allotments General Counsel clearance required for all reimbursable projects (copy of memo to Finance) No mixing advance and non-advance projects 1 to 1 relationship of project codes to agreements/funding documents

April 29, Policies & Procedures – Why? Financial statement audit (KPMG) A-123 (internal) audit Intra-government audit (Treasury & KPMG) -the agreement number serves as the common identifier, hence the need for a 1 to 1 relationship between agreements and project codes -CBS is able to capture agreement data

April 29, Audit Findings Past, Present, & … Past –Expired cash remaining on advance and non- advance projects –Audit Findings! Present –Unmatched cost & deferred revenue –Accounts Receivable balances misstated –Audit Findings!!

April 29, In Order to Avoid Future Audit Findings Areas of concern -Monitor all costs charged to reimbursable projects - Review the need for SLTs -Review unmatched cost reports (QR0068, RADG107, RA504D) - Compliance with Chapter 10, SOPs

April 29, Current Audit Finding On Deferred Revenue (aka Advances) Background –KPMG found that unmatched cost does not reduce advances from others account (can be overstated) –For open agreements (time & amount), cash balances are reduced as costs accrue –For expired agreements, cash balances must be refunded (CBS will not recognize/post cost) Causes of Excess Deferred Revenue –Agreements expire with remaining advances –Funds are not obligated within the period of performance (remaining advances) –Prior year downward adjustments cause costs to be reduced after billing and collection

April 29, Audit Finding On Deferred Revenue (Cont.) Causes of Anomaly Balances in Deferred Revenue –Cost continues to be charged after agreement expiration (official term: Unmatched Cost)

April 29, Audit Finding On Reimbursable Accounts Receivable Background –Mainly conversion issues from 2005 –General Ledger accounts not properly coded based on lack of knowledge re automated postings Addressing the Issues –Finance Office has researched and identified problem projects –Solutions are now being devised

April 29, Line/Staff Office Role LO/SOs may be asked to: –Work with Finance Office staff to reconcile projects, review problem areas, gather documentation, check with NOAA and/or Department General Counsel when necessary, insure that LO/FMC reimbursable staff have been properly trained (see Chapter 10, Appendix B)

April 29, In Summary The Reimbursable Work Group will continue to meet on a monthly basis to fine tune procedures and address issues Finance & LOs must insure that Chapter 10 and SOPs are followed - watch for cost overruns, expired TWAs and agreements, activate/turn off projects accordingly As a result of these changes, NOAA will experience better financial management & audit outcomes