1. SILC-NET, a project of ILRU – Independent Living Research Utilization 00 Playing by the Rules: A SILC Fiscal Guide to Spending Federal Money Part I – The Basics April 21, 2011 Presented by: Tim and Melissa Glisson SILC-NET at ILRU Presents…

2. SILC-NET, a project of ILRU – Independent Living Research Utilization 11 Playing by the Rules: A SILC Fiscal Guide to Spending Federal Money Part I – The Basics April 21, 2011 Presented by: Tim and Melissa Glisson SILC-NET at ILRU Presents…

3. SILC-NET, a project of ILRU – Independent Living Research Utilization 2 Session Objective Identify key components and best practices of effective general fiscal requirements and management.

4. SILC-NET, a project of ILRU – Independent Living Research Utilization 3 Rehab. Act Sec. 725 Standards & Assurances “The applicant will practice sound fiscal management “

5. SILC-NET, a project of ILRU – Independent Living Research Utilization 4 Effective & Efficient Operations- You Reliable Financial Reporting- Public Regulatory Compliance- Law Financial Management Standards 3 Outcomes of Financial Management

6. SILC-NET, a project of ILRU – Independent Living Research Utilization 5 General Fiscal Requirements Why the Basics? Understand budgets Read and understand financial statements Meet contract obligations Respond appropriately to funders

7. SILC-NET, a project of ILRU – Independent Living Research Utilization 6 Everyone Needs The Basics Board of Directors Council Members Executive Director & Fiscal Staff Leadership Team Staff

8. SILC-NET, a project of ILRU – Independent Living Research Utilization 7 Fiscal Terms Award Accrual basis of accounting Allocable Allowable Cognizant Federal agency Direct cost Indirect cost Internal controls Pass-through entity Program income GAAP

9. SILC-NET, a project of ILRU – Independent Living Research Utilization 8 Overarching Principle One “The applicant will practice sound fiscal management “ Rehab. Act Sec. 725 Standards & Assurances

10. SILC-NET, a project of ILRU – Independent Living Research Utilization 9 Overarching Principle Two Transparency & Accountability ARE KEY !

11. SILC-NET, a project of ILRU – Independent Living Research Utilization 10 Overarching Principle Three Systems Must Provide: Accurate Current & Complete Disclosure (OMB A – 110)

12. SILC-NET, a project of ILRU – Independent Living Research Utilization 11 Allows auditors and federal reviewer(s) to follow money from its point of award to: Receipt of Cash Drawdowns Expenditures Cash after Expenses Financial Management Standards - Clear Paper Trail (From EDGAR 74.22)

13. SILC-NET, a project of ILRU – Independent Living Research Utilization 12 Documentation shows: - expenses (all) - justification (i.e. travel; Part B activity) - funding source Financial Management Standards - Source Documentation (From OMB Circular A-110)

14. SILC-NET, a project of ILRU – Independent Living Research Utilization 13 Financial Management Standards - Internal Controls (OMB standards) Policies to ensure federal funds safeguarded Separation of duties (priority control) for approving purchases, check signing, checks & balances Conflict of interest Independent Audit …and more.

15. SILC-NET, a project of ILRU – Independent Living Research Utilization 14 Financial Management Standards - Efficient Accounting System User & System Friendly Meets Needs of Agency GAAP

16. SILC-NET, a project of ILRU – Independent Living Research Utilization 15 Financial Management Standards - Contract & Grants Management (OMB Circular A-110) Reporting Accurate & Timely Oversight Internal (administrator) External

17. SILC-NET, a project of ILRU – Independent Living Research Utilization 16 Financial Management Standards - 4 Money Matters Federal funds ONLY for expenditures and activities described in goals & objectives of approved contract. Fiscal control & accounting procedures must ensure proper disbursement of, and accounting for, federal funds.

18. SILC-NET, a project of ILRU – Independent Living Research Utilization 17 Financial Management Standards - 4 Money Matters, cont’d. When In Doubt…Check It Out ….Get it in Writing!! Relationships are Critical! Make Them Maintain Them Use Them

19. SILC-NET, a project of ILRU – Independent Living Research Utilization 18 Questions and Answers

20. SILC-NET, a project of ILRU – Independent Living Research Utilization 19 Internal Controls Policies & Procedures that… Protect the assets Provide consistency and operational efficiency Increase fiscal viability Uncover potential liabilities

21. SILC-NET, a project of ILRU – Independent Living Research Utilization 20 Benefits of Internal Controls Assure fiscal prudence Safeguard assets Assure fiscal compliance & viability Set policy (board responsibility) Create checks and balances Required by funding sources

22. SILC-NET, a project of ILRU – Independent Living Research Utilization 21 Internal Controls Policies Key Policy: Segregation of Duties –Limits amount of fiscal activity controlled by any one person.

23. SILC-NET, a project of ILRU – Independent Living Research Utilization 22 Internal Controls Policies, cont’d. Authorizing signatories Separating accounts receivable from accounts payable Segregating payroll from Human Resources Balancing cash and checking accounts Creating checks and balances

24. SILC-NET, a project of ILRU – Independent Living Research Utilization 23 Internal Controls Policies, cont’d. 2 Inspecting payroll reports Recording cash: journal & general ledger Passwords whenever possible Petty cash limits Using P.O.s (purchase orders) Regular computer backups - offsite

25. SILC-NET, a project of ILRU – Independent Living Research Utilization 24 Internal Controls: Reporting Level Board monthly financials Compare utilization data Balance GL monthly Quarterly finance committee meetings Time sheets / written OT authorization

26. SILC-NET, a project of ILRU – Independent Living Research Utilization 25 Internal Controls: Board Level Accurate records of income/expenses Cost of programs and services Comparison of income/expenses Segregation of duties

27. SILC-NET, a project of ILRU – Independent Living Research Utilization 26 Internal Audit Quality assurance process for the accounting department Assures timely and accurate recording of information Twice per year per program (minimum) Performed by audit committee, board or auditor

28. SILC-NET, a project of ILRU – Independent Living Research Utilization 27  Expenditures approved in advance?  Requests for checks reviewed?  Check signer reviews and initials check register?  Larger checks require two signatures?  Checks pre-numbered?  Voided checks on file?  Bank statements & canceled checks received & reconciled? Internal Control Checklist: Check Signing & Payments

29. SILC-NET, a project of ILRU – Independent Living Research Utilization 28  List of unpaid invoices on file and reviewed periodically by ED?  Purchase orders pre-numbered?  Employees submit expenses & receipts on-time? Internal Control Checklist: Check Signing & Payments, cont’d.

30. SILC-NET, a project of ILRU – Independent Living Research Utilization 29 Financial Management Standards - Accounting & Financial Manual (OMB 110 – EDGAR 74) Excellent internal control tool Effective training tool Needs board approval Updated annually (at least) Must be used!!

31. SILC-NET, a project of ILRU – Independent Living Research Utilization 30 I.Board Roles & Responsibilities II. Accounting Procedures Chart of Accounts Income & Expenses Banking Procedures III. Financial Management Revenue & Expense Classification Budget Management Purchasing Policies Policies Procedures Manual - Model

32. SILC-NET, a project of ILRU – Independent Living Research Utilization 31 IV. Financial Reporting Annual Budget Contract Requirements & Audit V. Payroll Policies Independent Contractors Personnel Policies Policies Procedures Manual - Model, cont’d.

33. SILC-NET, a project of ILRU – Independent Living Research Utilization 32 Questions and Answers

34. SILC-NET, a project of ILRU – Independent Living Research Utilization 33 IL Regs, EDGAR, OMB Circulars, FASB, & More DocumentParts/TitleWeb Address IL Regs34 CFR 364-366http://www.gpoaccess.gov EDGAR34 CFR Parts 74, 75, 77, 82,http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html OMB Circulars: A-110Uniform Administrative Requirements http://www.whitehouse.gov/omb/circulars/a110/2cfr215-0.pdf A-122Cost Principles for Nonprofit Organizations, http://www.whitehouse.gov/omb/fedreg/2005/083105_a122.pdf A-133Audits of States, Local Governments, and Non-Profit Organizations http://www.whitehouse.gov/omb/circulars/a133/a133.pdf Other: FASB 116Contributionshttp://www.gasb.org/pdf/fas116.pdf FASB 117Financial Statementshttp://www.1800net.com/nprc/fasb117.html Advocacy & Lobbyinghttp://www.muridae.com/nporegulation/lobbying.html Cost Allocationwww.o.gov/programs/cil/legislation.html IRS Form 990 http://www.irs.gov/pub/irs-pdf/f990.pdf IRS Form 269 http://www.irs.gov/pub/irs-utl/sf269-blank.pdf

35. SILC-NET, a project of ILRU – Independent Living Research Utilization 34 Wrap Up and Evaluation Please complete the evaluation of this program by clicking here: https://vovici.com/wsb.dll/s/12291g49d9d

36. SILC-NET, a project of ILRU – Independent Living Research Utilization 35 SILC-NET Attribution Support for development of this Webinar/teleconference was provided by the U.S. Department of Education, Rehabilitation Services Administration under grant number H132B070003-10. No official endorsement of the Department of Education should be inferred. Permission is granted for duplication of any portion of this PowerPoint presentation, providing that the following credit is given to the project: Developed as part of the SILC-NET, a project of the IL NET, an ILRU/NCIL/APRIL National Training and Technical Assistance Program.