How to Draft & Update Compliant Policies & Procedures

How to Draft & Update Compliant Policies & Procedures
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017 How to Draft & Update Compliant Policies & Procedures Bonnie Graham, Esq.

QUICK… WHERE ARE YOUR POLICIES AND PROCEDURES!?!
Brustein & Manasevit, PLLC © All rights reserved.

What category do you fall into?
No policies and procedures Some policies and procedures Existing policies and procedures need updating Started updating existing policies and procedures, but got sidetracked… Brustein & Manasevit, PLLC © All rights reserved.

Agenda Why policies and procedures are important? Logistics
Suggested Sections Rules and Requirements Helpful Questions to Ask What to do with completed policies and procedures? Brustein & Manasevit, PLLC © All rights reserved.

Policies vs. Procedures
Policies – goals for your organization Procedures – steps to achieve your goals Brustein & Manasevit, PLLC © All rights reserved.

Education: The New Federalism! Spring Forum 2017 May 10-12, 2017
Why? Brustein & Manasevit, PLLC © All rights reserved.

Single Audits Auditors ask about policies and procedures
Some tests specifically require written policies and procedures Brustein & Manasevit, PLLC © All rights reserved.

Single Audits Compliance Supplement, Part 6: Internal Controls
“Control activities are the policies and procedures that help ensure the management’s directives are carried out.” Clearly written Clearly communicated Brustein & Manasevit, PLLC © All rights reserved.

Compliance Supplement, Part 6: Internal Controls, Section M
Compliance Supplement, Part 6: Internal Controls, Section M. Subrecipient Monitoring Written policies and procedures exist establishing: Communication of Federal award requirements to subrecipients Responsibilities for monitoring subrecipients Process and procedures for monitoring Methodology for resolving findings Requirements related to subrecipient audits, including appropriate adjustment of pass-through’s accounts Brustein & Manasevit, PLLC © All rights reserved.

Monitoring Policies and procedures are evidence of compliance under all program monitoring tools OSS Fiscal Review Self Assessment asks for “documented procedures” 28 times!!!! Brustein & Manasevit, PLLC © All rights reserved.

Staff Changes and Transitions
Training tool Maintain consistency Brustein & Manasevit, PLLC © All rights reserved.

Uniform Grant Guidance
Written policies and procedures are required! Written Cash Management Procedure (b)(6) & Written Allowability Procedures (b)(7) Written Conflicts of Interest Policy (c) Written Procurement Procedures (c) Written Method for Conducting Technical Evaluations of Proposals and Selecting Recipients (d)(3) Written Travel Policy (b) **Procedures for managing equipment - § (d) Brustein & Manasevit, PLLC © All rights reserved.

Logistics - Overview What is the process? Review existing policies and procedures Develop questions Schedule interviews with relevant staff Gather information on actual practices Draft policies and procedures Review internally with appropriate staff Revise Formally adopt and implement Train staff Annually review and revise! Brustein & Manasevit, PLLC © All rights reserved.

Who should be involved? Fiscal AND program staff Use team approach to capture entire grant process Everyone involved should sit in the same room to review grant activities, decision making, job responsibilities, etc. Brustein & Manasevit, PLLC © All rights reserved.

How long does it take? Depends on need Review of existing policies and procedures is less time than starting from scratch Set deadlines for actions Don’t get overwhelmed! Brustein & Manasevit, PLLC © All rights reserved.

Things to Consider Buy-in from those who will be using the policies and procedures Review for accuracy, completeness, and compliance Adoption by board or other governing body Brustein & Manasevit, PLLC © All rights reserved.

Suggested Sections Education: The New Federalism! Spring Forum 2017 May 10-12, 2017 Organization, Structure and Function Grant Application Process Financial Management System Procurement Inventory/Property Management Time and Effort Record Keeping/Record Retention Monitoring Audit Resolution Programmatic Fiscal Requirements Programmatic Requirements Travel Notice of Nondiscrimination and Grievance Procedures Brustein & Manasevit, PLLC © All rights reserved.

Organization, Structure and Function

Organization, Structure and Function
Organization Chart Offices Sections Divisions Job Descriptions & Responsibilities Outside entities with grant administration responsibilities MOU/MOA Brustein & Manasevit, PLLC © All rights reserved.

Grant Application Process

State-Administered Grant vs. Direct Grant Decisions regarding what grants to apply for Determining organizational capacity to run a compliant program Approvals and Authorizations After the grant is awarded Brustein & Manasevit, PLLC © All rights reserved.

Financial Management System

Financial Management 200.302(b)
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017 Financial Management (b) Procedures Overview of financial management / accounting system Budget control, amendments Maintaining accounting records Journal voucher process Cash management and interest remittance Spending funds, determining allowability Brustein & Manasevit, PLLC © All rights reserved.

Overview Financial Management/ Accounting System – 200.302(b)(1)-(2)
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017 Overview Financial Management/ Accounting System – (b)(1)-(2) Describe the system used by the grantee Identification of awards Interface with procurement and inventory systems? Budgets loaded in the system? Position / office responsible for managing budgets and accounts receivable? Position / office responsible for compiling financial reports? Review or approvals required? Brustein & Manasevit, PLLC © All rights reserved.

Budgeting Control 200.302(b)(5), Amendments
The Planning Phase: Meetings and Discussions Start from prior year budget? Needs assessment? Consideration of existing resources? Reviewing and Approving the Budget Program vs. fiscal review Timeframe Amending the Budget Process, notification, formal approval Budget Control Comparison of budget to actual expenditures Brustein & Manasevit, PLLC © All rights reserved.

Maintaining Accounting Records Journal Voucher Process – 200
Maintaining Accounting Records Journal Voucher Process – (b)(3)-(4) Definitions of assets, liabilities, revenues, expenses, etc. Chart of accounts / codes How are journal entries made? Approvals required? Brustein & Manasevit, PLLC © All rights reserved.

Written Cash Management Procedures 200.302(b)(6)
Must have written cash management procedures to implement requirements of § Payment Advances maintained in insured accounts Pass through cannot require separate depository accounts Accounts must be interest bearing (exceptions) Remit interest above $500 Brustein & Manasevit, PLLC © All rights reserved.

How do we calculate $500 of interest?
Any additional interest earned over $500 must be remitted annually to HHS. The $500 is typically applied to all grants, not applied individually per grant. Letter dated, June 11, 2015 Brustein & Manasevit, PLLC © All rights reserved.

Cash Management (cont.)
Timely Obligation of Funds When Obligations are made Period of performance of federal awards Carryover Program income Brustein & Manasevit, PLLC © All rights reserved.

Spending Grant Funds Classifying costs as direct vs. indirect
Negotiated indirect cost rate Application of indirect rate Determining Allowability of costs Written allowability procedures (b)(7) Brustein & Manasevit, PLLC © All rights reserved.

Direct v. Indirect Costs 200.413(c)
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017 Direct v. Indirect Costs (c) Salaries of administrative and clerical staff should be treated as “indirect” unless all of following are met: Such services are integral to the activity Individuals can be specifically identified with the activity Such costs are explicitly included in the budget Costs not also recovered as indirect BRUSTEIN & MANASEVIT, PLLC © All rights reserved.

Written Allowability Procedures 200.302(b)(7)
Must have written procedures for determining allowability In accordance with Subpart E – Cost Principles & terms and conditions of federal award 2 CFR § (b)(7) Brustein & Manasevit, PLLC © All rights reserved.

Cost Principles: “Factors Affecting Allowability of Costs” 200.403
Education: The New Federalism! Spring Forum 2017 May 10-12, 2017 Cost Principles: “Factors Affecting Allowability of Costs” All Costs Must Be: Necessary, Reasonable, and Allocable Conform with federal law & grant terms Consistent with state and local policies Consistently treated In accordance with GAAP Not included as match Net of applicable credits (moved to ) Adequately documented Brustein & Manasevit, PLLC © All rights reserved.

Allowability Procedures (cont.)
Can include Selected Items of Cost section for frequently asked about expenses E.g. Food!! EDGAR has 55 specific items of cost Brustein & Manasevit, PLLC © All rights reserved.

Procurement All nonfederal entities must have documented procurement procedures which reflect applicable Federal, State, and local laws and regulations. 2 CFR § (a) Brustein & Manasevit, PLLC © All rights reserved.

Gratuities Policy Prohibition against soliciting or accepting gratuities, favors, or anything of monetary value from contractors or parties to subcontracts May set standards in which the financial interest is not substantial or the gift is an unsolicited item of nominal value Consider including examples 2 CFR § (c)(1) Brustein & Manasevit, PLLC © All rights reserved.

Vendor Selection Process 200.320
Method of procurement: NEW: Micro-purchase Small purchase procedures Competitive sealed bids Competitive proposals Noncompetitive proposals 2 CFR § Brustein & Manasevit, PLLC © All rights reserved.

Contract Cost and Price 200.323
NEW: Must perform a cost or price analysis in connection with every procurement action over $150,000, including contract modifications Independent estimate before receiving bids or proposals. Cost analysis generally means evaluating the separate cost elements that make up the total price (including profit) Price analysis generally means evaluating the total price Profit must be negotiated separately for these contracts, and for all noncompetitive awards BRUSTEIN & MANASEVIT, PLLC © All rights reserved.

Inventory & Property Management

Inventory/Property Management
2 CFR § Property Classifications Equipment Supplies Computing Devices Inventory Procedure Loss, Damage, or Theft Disposition Brustein & Manasevit, PLLC © All rights reserved.

Time and Effort Describe “system of controls” 2 CFR 200.430(i)
Semi-annual certifications or PARs? Cost Objective Reconciliations HR Policies Benefits Brustein & Manasevit, PLLC © All rights reserved.

Audit Resolution Single Audit EDGAR, Subpart F Resolution of Findings

Programmatic Requirements

After your policies and procedures are done . . . NOW WHAT!?!

Education: The New Federalism! Spring Forum 2017
~ Legal Disclaimer ~ This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances. Brustein & Manasevit, PLLC © All rights reserved.

How to Draft & Update Compliant Policies & Procedures

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