1. Financial Policies You Cannot Live Without - Setting Priorities in a new Job at a PUI NCURA FRA 2013 Conference New Orleans, LA

2. Presenters: Franc Lemire, Director, Grants Administration & Compliance, American Academy of Addiction Psychiatry and Senior Sponsored Programs Specialist, Worcester Polytechnic Institute and Hana Boed, Coordinator, Research Programs & Services, New College of Florida

3. Session Agenda Why Create Financial Policies? What Is the Difference between Policy and Procedure? What Do the Regulations Say? Finding the Right Institutional Approach An Example of Financial Policy Considerations - Consultants Setting Priorities - Key Financial Policies To Consider Policy Maintenance and Updating Resources

4. Why Create Financial Policies? As an educational and enforcement tool To create more efficient business processes – minimizing transaction time, exception processing, and misinterpretations about how business should be conducted To reduce potential audit risk by demonstrating that your institution is an effective steward of federal funds

5. What Is the Difference between Policy and Procedure? Policy: Long-lived – should seldom change Not open to interpretation Sets the standard for how business is to be conducted Not constrained or dictated by the current business environment Has global/enterprise application

6. What Is the Difference between Policy and Procedure? Procedure: Usually left up to department or division Provides the Who, Where, When and How Enables continuous improvement by providing a tactical roadmap which can be improved upon as time passes May be system/application dependent, by including specific references

7. Example: Receiving Hazardous Material Policy POLICIES " "Why, What, Who” PROCESSES “What, Who” PROCEDURES “How, What”

8. What Do the Regulations Say? OMB Circular A-110, Subpart C, Section 21 (6), Standards for Financial Management Systems, requires, among other things… Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with the provisions of the applicable federal cost principles and the terms and conditions of the award.

9. What Do the Regulations Say? OMB Circular A-21, Subpart C, Basic Considerations states in Section 4.d., Allocation and Documentation Standard: (1) Cost principles. The recipient institution is responsible for ensuring that costs charged to a sponsored agreement are allowable, allocable, and reasonable under these cost principles. (2) Internal controls. The institution's financial management system shall ensure that no one person has complete control over all aspects of a financial transaction.

10. Finding the Right Institutional Approach Decide whether financial policy development will be a minimal effort or a primary focus Determine what currently exists versus what is needed at your institution and assess how important each policy is Identify available local and online resources Obtain the support of institutional leadership Identify who the stakeholders are and involve them in the process

11. Finding the Right Institutional Approach Set a realistic timeline for specific policy development Define plans for implementation (e.g., forms, website presence, announcements to the community)? Identify policy enforcement needs (e.g., human capital, reports, senior administrative support) Schedule post-implementation assessment activities (i.e., is it working?)

12. An Example of Financial Policy Considerations Consultants (a.k.a., independent contractors) Regulatory requirements Sponsored programs versus institutional funding Transaction daily amounts and total amounts Purpose, duration, type of work to be performed Agreement coverage Procurement threshold and placement of bids or sole source justifications Assessment of IRS and/or state restrictions EPLS and export control determination

13. An Example of Financial Policy Considerations Consultants (a.k.a., independent contractors) Use of current or former employees Use of organizations versus individuals Payments, expenditures, reports/deliverables Non-standard agreements (e.g., used when consultant won’t sign standard agreement) Agreement modifications – how to handle both efficiently and on a timely basis Required institutional approvals Creation and issuance of IRS Form 1099 Audits, documentation, record retention, etc.

14. Setting Priorities – Key Financial Policies to Consider This is where we turn the session into what is hoped will be a lively discussion of what is most important to you within the time remaining Every institutional situation is different and you are in the best position to set your institution’s priorities Please look at today’s handout and feel free to ask questions, raise issues, or share your experiences.

15. Policy Maintenance and Updating Each new policy (and procedure) creates the additional responsibilities of maintenance and updating Stay abreast of regulatory updates Check online policies and procedures periodically to ensure they are current and the technology used to implement them is working Re-train end users, as needed, to remain current Re-assess the effectiveness and efficiency of each policy (and procedure) following updates

16. Resources OMB Circular A-21 Cost Principles for Educational Institutions http://www.whitehouse.gov/omb/circulars_a021_2004 http://www.whitehouse.gov/omb/circulars_a021_2004 OMB Circular A-110 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations http://www.whitehouse.gov/omb/circulars_a110/ http://www.whitehouse.gov/omb/circulars_a110/ OMB Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations http://www.whitehouse.gov/sites/default/files/omb/asset s/a133/a133_revised_2007.pdf http://www.whitehouse.gov/sites/default/files/omb/asset s/a133/a133_revised_2007.pdf

17. Resources (continued) Council on Government Relations (COGR) Managing Externally Funded Research Programs: Guide to Effective Management Practices http://www.cogr.edu/Pubs_EffectiveManagement.cfm http://www.cogr.edu/Pubs_EffectiveManagement.cfm COGR Publications: Financial Management Page http://www.cogr.edu/Pubs_Financial.cfm http://www.cogr.edu/Pubs_Financial.cfm NCURA Resources Page http://www.ncura.edu/content/regions_and_neighborhoods/re sources/ http://www.ncura.edu/content/regions_and_neighborhoods/re sources/ NCURA Collaborate for Communities on Specific Topics http://collaborate.ncura.edu/Home http://collaborate.ncura.edu/Home

18. Questions?