1. LCDJFS Sub-recipient Fiscal Training

2. Introductions & Contact Info.  Deb Ortiz-Flores, LCDJFS Director  Adam J. Nutt, Chief Fiscal Officer (419) 213 - 8933 nutta@odjfs.state.oh.us  Michelle Niedermier, Contracts Manager (419) 213 - 8871 niedem@odjfs.state.oh.us  Breda Dymarkowski, Budget Analyst (419) 213 - 8904 dymarb@odjfs.state.oh.us  Sue Gwozdz, Budget Analyst (419) 213 - 8905 gwozds@odjfs.state.oh.us  All-Inclusive E-mail Lucas_Contracts@odjfs.state.oh.us

3. Training Goals  Inform sub-recipients of several important County, State and Federal fiscal-related rules/regulations.  Review LCDJFS fiscal-related contract requirements & reporting mechanisms.  Allow for sub-recipient questions regarding LCDJFS contracts and related funding sources.

4. Topics  Budgeting  Invoicing  Employment/Retention Bonuses  Fiscal Monitoring  Corrective Action  Post Award Audit Compliance  Purchasing & Competitive Bidding

5. Budgeting  Budget form is the same as last year.  Completing the budget: Look at Prior Year costs to plan for current year. Employee Salaries-only employees with direct client contact. Payroll Taxes- Actual employer payroll taxes and fringe benefits. Based on percentages of direct salaries charged to program. Non-employee salaries-contractors who are not on agency payroll. Must adhere to federal monitoring guidelines. Admin and Professional Fees-Preferred way to budget is based on FTE’s for the agency.

6. Budgeting (cont’d) Occupancy costs-billed as percentage based on square footage. Equipment-Assets are determined as equipment costing $5,000 or more, or the organization’s capitalization threshold, which ever is less. Agency Income-Last page of budget:  Section A-all income for this JFS Contract  Section B-Total income for the agency, not including the amount in Section A.

7. Budgeting (Con’td)  The Contract Budget is the face page of the 8 page budget document; the 7 pages that follow are supporting details of the estimated costs to deliver contracted services.  Expenses may be shifted within lines of the budget, but not between the sections. Sections of the budget are defined as IA, IB, IC, ID, and so forth.

8. Invoicing LCDJFS  Invoicing to LCDJFS must be done on a monthly basis. If for any reason an invoice is late or missed, you must provide an invoice for each month services were provided, and not a combination of those two on one 4284 and/or Cost Statement.

9. Elements of the Invoice  Contract Cost Statement  Contract Incentive Cost Statement  4284  Supporting Financials  Supporting Employment Documentation for Placement and Retention Incentives  Attendance Sheet / Roster Sheet for Month

10. Form 4284  The 4284 invoice form includes a budget column. The approved budget is entered in this column. The balance of the budget will be tracked as costs are invoiced.  The budget balance can be used as a tool to forecast average monthly balance of funds.  JFS will only reimburse costs up to the approved budgeted section.

11. State Government Recipient/Passthrough Entity Federal Government State & Local Governments Profit & Non-Profit Organizations (Subrecipients) Sub-Subrecipients Money Reports Accountability Monitoring

12. Fiscal Monitoring  Pursuant to 45 CFR 92.40, LCDJFS is required to monitor awards to sub-recipients.  Sub-recipient Monitoring Checklist highlighted areas: Allowable Costs Cost Allocation Internal Controls Program Income

13. Allowable Costs  Documents containing Cost principles by sub-recipient type are as follows: Educational Institutions – 2 CFR 220 For-profit Organizations – 48 CFR 31.2 Non-profit Organizations – 2 CFR 230  http://www.whitehouse.gov/omb/circulars/ http://www.whitehouse.gov/omb/circulars/  For Questions/Rule Clarification, contact your assigned Budget Analyst (Breda or Sue).

14. Cost Allocation  Overhead costs must be allocated to the proper program and funding source for those agencies operating with multiple funding sources or programs.  The methodology on which allocations are based must be reasonable and documented. Examples:  Program square footage for rent and utilities  Full-time equivalents (FTE’s) for Administrative oversight and payroll processing

15. Internal Controls  Sub-recipients should have internal controls built into agency processes & procedures to minimize the risk of loss and non-compliance.  Following are some tips on the development of internal controls: Ensure duties are properly segregated Put policies and procedures in writing Address audit/monitoring findings timely Adequately safeguard assets.

16. Program Income  Definition per 45 CFR 74.24: Gross income earned by a recipient that is directly generated by a supported activity or earned as a result of the award. Examples:  Income from fees for services  Interest on loans made with award funds  The sale of commodities or items fabricated under an award.

17. Program Income (cont’d)  Cost Reimbursement Contracts Most common at LCDJFS Non-issue - reimbursement for actual costs  Unit Rate Contracts Rare at LCDJFS (common pre-FY07) Issue - unit rate billings do not represent the actual costs incurred for the program  Reconciliation of unit rate billings to actual costs incurred required.

18. Fiscal Monitoring Report  Two page document 1 st – summary of why and how we monitor from a fiscal perspective 2 nd – any weaknesses identified during monitoring  Description (e.g., lack of internal controls, consistently late invoices)  Status (e.g., resolved, unresolved)  Action – LCDJFS plans with regard to the weakness noted (e.g., additional monitoring)

19. Corrective Action  Must be taken if fiscal (or contract) monitors determine that a sub-recipient is not in compliance with the LCDJFS contract(s).  Process: LCDJFS communicates non-compliance to sub-recipient Sub-recipient has 30 days from date of LCDJFS communication to submit Corrective Action Plan (CAP) LCDJFS reviews/approves CAP Sub-recipient has 60 days from LCDJFS approval within which to correct non- compliance issues identified.

20. Post Award Audit Compliance  Responsibilities of the Non-Profit Agency Records retention for 3 years after completion of the award year (or until audited) Overpayments and/or Fraudulent payments are the responsibility of the Non-Profit Required to cooperate with any Federal, State, or Local Government Audit Maintain Equipment Records / Inventory and Depreciation Schedule

21. Post Award Audit Compliance  Recent Unallowable Cost Findings Costs being billed to more than one federal program Reimbursement for services outside of the award period Unallowable meals and entertainment (food is only allowable if beneficial to program activities, for example after school snacks for children)

22. Procurement/Purchasing  In order to allow for free and open competition, items purchased with federal funds must allow for free and open competition  The act of seeking goods or services allowing for free and open competition is referred to as procurement.

23. Procurement/Purchasing  Mechanisms of procurement: For goods or services over $25,000, a notification must be published in a local newspaper(s) similar to the JFS competitive bid processes. For purchases under $25,000, pricing (bids) should be obtained from at least three vendors.

24. Procurement/Purchasing cont’d  For smaller items, such as office supplies, a price list from a selected vendor may be used for ordering during the year as such items are needed.  Selection: it is not required that the bidder or quote with the cheapest cost is selected; quality of product and/or service should also be included in the decision making process and documented as to reasoning.

25. Contract Amendments  Any requests to amend the contract budget to allow for movement among costs should be submitted to the attention of Director Deb Ortiz-Flores’ attention.  Requests for additional funds should also be submitted to Director Ortiz-Flores.  A proposed revised budget should be attached to the letter requesting to amend.

26. Remaining Funds  Any sub-recipient anticipating a surplus in funding by 5% of the contract award or $5,000 (whichever is lower) should promptly notify their Budget Analyst of the amount and reasoning for the surplus.  Failure to comply with the above contract requirement could result in a decrease in funding based on LCDJFS projections of expenditures.

27. Thank You for Attending!  Questions?