1. IRIS Financial Overview
IRIS Board of Directors Orientation
May 11, 2015

2. Financial Overview Topics
Financial Services Staff
IRIS Awards
Audits/Reviews
Financial Statements
Indirect Cost Recovery
Unrestricted Funds/Investments
Budget & Finance Committee

3. Financial Services Staff
Candy Shin,
CFO
Travel expense reports
Dave Fillebrown, Accounting Manager
Financial Statements, GL
Josephine Aka,
A/P Manager
Checks, ACH
Robert Austin, Purchasing
Staff Acct
Purchase Orders
Dee Mann,
A/R Staff Acct
A/R, Rebills
Robin Morris, Project Cost Controller
Budgets,
Subaward/Contract Invoices
* Effective 2/1/14

4. FY15 IRIS Awards
Active IRIS awards (7/1/14-6/30/15)

5. IRIS Awards – Accounting Codes
Award Number PI
Start
End
Budget
2005-xxx
EAR USArray C.A.
Woodward
10/1/08
9/30/14
$76,244,193
1005-xxx
EAR SAGE C.A.
Detrick
10/1/13
9/30/18
$57,873,116
1080-xxx
EAR Core C.A.
10/1/11
12/31/14
$30,569,736
1081-xxx
OCE OMO C.A.
2/1/12
1/31/17
$19,333,767
1082-xxx
ICER EarthCube
Ahern
9/15/13
8/31/15
$1,783,919
1071-xxx
EAR CHILE
9/15/10
$1,000,000
1083-xxx
PLR GEOICE
9/30/16
$636,426
PLR GLISN 2
9/1/13
8/31/18
$461,020
EAR REU
Taber
6/1/12
5/31/17
$377,991
LLNL B Tajik
Hafner
9/22/14
9/30/15
$146,286
1079-xxx
ICER SAVI
$138,193
EAR EC Workshop
5/1/14
4/30/16
$73,801
1086-xxx
JPL Subcontract NASA
9/23/14
6/30/15
$65,000
UNAVCO RESESS
9/15/09
$43,857
DUE CCLI
8/31/14
$32,609
15 awards + x other contracts/ agreements, etc.
12 Current active awards = 9 NSF + 3 non-NSF

6. IRIS Audits & Reviews What do you call an accountant with an opinion?
Answer: an auditor!
What do you call an accountant with an opinion?

7. Audits/Reviews OMB Circular A-133 Audit IRIS/McGladrey LLP
Desk Reviews
NSF BFA - contractors
Proposal Reviews
Indirect Rate Proposal/Rate Agreement
NSF CAAR (DIAS)
Business Systems Review
NSF BSR Team (LFO)
Management Review
NSF Program
Program Review
IRIS/NSF Program
Property Control System Review
NSF Property Mgmt (DAS)
Incurred Cost and Accounting System Audit
NSF OIG – DCAA
BFA = Office of Budget, Finance, and Award Management
DIAS = Division of Institution and Award Support
LFO = Large Facilities Office
DAS = Division of Administrative Services (Office of Information & Resource Management)

8. A-133 Audit
OMB has consolidated its grant guidance for recipients into a single document 2 CFR Part 200.
OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations”
Non-Federal entities that expend $500,000 or more in Federal awards in a year  increased threshold to $750,000
Audit of financial statements
Tests of internal control over the Federal program
Procedures to determine whether the auditee has complied with laws, regulations, and provisions of grant agreements
McGladrey LLP
Tom Sneeringer, Partner
FY2001 – FY2014
OMB Circular A-133 “sets forth standards for obtaining consistency and uniformity among Federal agencies for the audits of states, local governments, and non-profit organizations expending Federal awards.”

9. FY14 Audit Report

10. Balance Sheet Assets FY14 FY13 Cash & cash equivalents $ 545,086
$ 545,086
$ 246,035
Receivables
4,873,294
4,844,367
Prepaids, advances, & other assets
285,095
315,461
Investments
2,182,880
1,155,047
Leasehold improvements, net
105,278
119,616
Total assets
$ 7,991,633
$ 6,680,526
Liabilities
Accounts payable & accrued expenses
$ 1,779,942
$ 1,890,228
Subawards payable
3,165,691
2,119,001
Deferred rent and other liabilities
311,625
291,437
Total liabilities
$ 5,257,258
$ 4,300,666
Net Assets
Unrestricted
$2,709,725
$2,355,410
Temporarily restricted
24,650
24,450
Net assets
$ 2,734,375
$ 2,379,860
See Page 3 of Financial Statements

11. Temporarily Restricted Net Assets
These funds have donor-imposed restrictions that can be fulfilled by one of two ways - passage of a defined period of time (time restriction) or by performing defined activities (purpose restriction).
IRIS Example (beginning in 2009):
John C. Lahr Educational Seismology Fund
FY09 Contributions $25,980
FY10 Contributions $775
FY10 Purchase 4 AS-1s <$2,605>
FY11 Contributions $300
FY14 Contribution $200
Balance as of 6/30/11 $24,450
Balance as of 6/30/12 $24,450
Balance as of 6/30/13 $24,450
Balance as of 6/30/14 $24,650

12. Revenues Awards/Grants Membership Dues Interest/Dividends
Cost-reimbursable awards
Indirect cost recovery limitations
Management fees
Fixed-price awards
Program Income
Membership Dues
Interest/Dividends
Realized/Unrealized Gain on Investments
Contributions/Donations

13. Statements of Activities
Revenues
Revenue:
FY14
FY13
Federal awards
$38,127,768
$32,911,215
Program income
355,880
616,132
Sale of ocean cable
248,500
1,066,000
Investment income
240,377
130,688
Contributions
148,399
Membership dues
7,500
Total Revenue
$39,128,424
$34,731,535
FY13 Sale of ocean cable = Accrued contract value $1.3m – Allowance for adjustments to base contract amount (20%=234k) = Net FY13 Revenue Recognition $1.066m
In FY13, McGladrey recommended breaking out program income.
FY13 program income = EARN services, GSN State Dept PO + Vulcan contract
FY14 Contributions = Innovation Fund, Noble Energy, Nodal Seismic ($10k), Lahr ($200)

14. Innovation Fund Donations
Month
Online Contributions
Checks
Amount
April
1 (test)
$5.00
May 21 7
$17,955.00
June 11 13
$15,238.81
Winston Chan - commitment
$100,000.00
FY14 Donations Revenue
$133,198.81
Total Innovation Fund Donations as of 3/31/15 = $141,180.81

15. Expenses FY14 FY13 Program services: PASSCAL (+ Polar) $ 5,904,131
$ 5,904,131
$ 3,711,749
GSN
3,477,339
3,268,411
Data Services
4,377,151
3,544,944
Education & Public Outreach
1,336,565
930,580
Community Activities
461,170
237,918
Instrumentation Services Mgmt
945181
495,088
Transportable/MT Arrays
4,624,349
EarthScope - USArray
7,586,865
15,118,351
OBSIP Management Office
6,272,765
2,589,122
Chile MRI
37,954
49,165
Chile RAPID
19,559
Other - Unallowable Expenses
153,857
108,778
Indirect Expenses
3,596,582
3,449,122
Total Expenses
$ 38,773,909
$ 33,522,787

18. Indirect expenses DC Office Overhead DMC Office Overhead G&A
What are indirect costs?
Indirect costs represent the expenses of doing business that are not readily identified with a particular grant, contract, project function or activity, but are necessary for the general operation of the organization and the conduct of activities it performs. In theory, costs like heat, light, accounting and personnel might be charged directly if little meters could record minutes in a cross-cutting manner. Practical difficulties preclude such an approach. Therefore, cost allocation plans or indirect cost rates are used to distribute those costs to benefiting revenue sources.
DC Office Overhead
DMC Office Overhead
G&A

19. Data Management Center
Office Overhead Pools
IRIS Headquarters
Washington, DC
Data Management Center
Seattle, WA
Description
FY14
Office Manager
Salaries/Fringe
$ 67,203
Rent
Suite 400
(11,536 sq ft)
543,138
Supplies
14,211
Other
(equipment leases, postage, internet, telephone, water, misc.)
74,937
Total FY14 Expenses
699,490
Description
FY14
Office Manager
Salaries/Fringe
$ 89,900
Rent
Suite 200 (6,409 sq ft)
UWA computer space
180,387
Supplies
4,975
Other
(equipment leases, postage, internet, telephone, water, misc.)
28,084
Total FY14 Expenses
$ 303,346
Moving to Suite 400 (11,536 sq ft) 13% increase
Annual AAAS rent = $562,779 ($46,897/month) (straight-line)
actual current monthly rent = $50,017
FY14 DC Office O/H Expenses: 2% increase from FY13
FY14 DMC Office O/H Expenses: -3.6% decrease from FY13
Office Overhead Base = $1,959,894
DC Office O/H Rate = 35.69%
Office Overhead Base = $1,824,762
DMC Office O/H Rate = 16.62%

20. General & Administrative (G&A) Pool
All other allowable general and administrative costs (costs that benefit all programs and cannot be identified to a specific program) are allocated to programs, grants, etc. using a base that consists of total costs less equipment, participant support costs and subaward costs exceeding $25,000 per subaward per year.
OMB Circular A-122
General & Administrative Expenses
G&A Base
= _____ %

21. FY14-15 G&A Budgets Expense Actual FY14 Proposed FY15 Salaries/Fringe
Max. Provisional Rates
FY G&A Budgets
Expense
Actual
FY14
Proposed
FY15
Salaries/Fringe
$ 1,924,438
$ 2,002,808
$ 2,159,035
Supplies
33,069
25,000
Travel/Meetings
166,757
207,000
182,500
Professional Services
421,742
346,000
352,600
Other
47,519
55,000
85,000
DC/DMC Office O/H
435,960
434,029
433,845
Total
$ 3,029,484
$ 3,069,837
$ 3,237,980
G&A (MTC) Base
$12,113,849
$12,406,304
$13,039,006
G&A Rate
25.01%
25%
Revised FY15 SMT G&A Budget Estimate = $3,014,417

22. G&A (Indirect) Personnel
Labor
FY15 Revised
Salaries
$1,251,640
Fringe Benefits
700,918
Office O/H
443,806
Subtotal
$2,396,364
Management/Administration (100%)
Detrick, President
Linn, Executive Assistant
Willemann, Director of Planning
Woolley, Director of Program Support
Turner, HR Generalist/Administrative
Sobel, Award & Procurement Administrator
<open> Sr. Contracts Administrator
Business Office (100%)
Aka, Staff Accountant - A/P
Austin, Staff Accountant – Purchasing
Fillebrown, Accounting Manager
Mann, Staff Accountant – A/R
Morris, Senior Project Accountant
Shin, CFO
Split-charged (budgeted under G&A 25-50%)
Baranowski, Meeting Planner (50%)
Dorr, Public Outreach Manager (20%)
Joseph, Web Developer (25%)
79% of total
G&A revised budget
$3,014,417

23. G&A – Professional Services
Description/Vendor
FY14 Expenses
FY15 Revised Budget
% of Total G&A Budget
Consultants (e.g., Muco)
$29,496
$20,000
0.66%
HR - Insperity
$207,782
$240,000
7.96%
Audit
$39,300
$40,000
1.33%
Legal Services
$34,379
Misc. (e.g., recruiting, editing, IT)
$87,280
$44,900
1.49%
Corporate Insurance (Moodys)
$23,505
$34,260
1.14%
Subtotal
$421,742
$399,160
13.24%
22% over budget ($346,000)
Presidential recruiting (R. William Funk) = $60,625
Xykon = $21,497

24. G&A – Travel and Meetings
Description
FY14
Expenses
FY15
Budget
% of Total G&A Budget
Staff Travel (Domestic)
$60,768
$60,000
1.99%
Staff Travel (Foreign)
$8,442
$10,000
0.33%
Committee Travel
$42,823
$28,500
0.95%
Board of Directors (9)
CoCom (2 BoD)
Planning Committee
Instrumentation Committee
Int’l Development Seismology
Misc. Travel
$24,108
Subtotal - Travel
$136,141
$98,500
3.27%
Meetings
$30,616
$36,000
1.19%

25. Other G&A Expenses

26. G&A Base

27. Indirect Rate Agreement – signed 3/12/15
Actual and Proposed Rates Submitted by IRIS:
Indirect Pool
FY11
Actual
FY12
FY13
FY14
Proposed
FY15-16
DC Office O/H
28.66%
37.38%
33.90%
37%
35.69%
36%
DMC Office O/H
15.84%
18.89%
16.30%
20%
16.62%
19%
G&A
23.14%
22.04%
23.29%
25%
25.01%
Rates offered by NSF (3/4/15) and accepted by IRIS:
FY16 ICR Proposal – submitted 12/23/14
IRIS proposed the same rates for FY16 as FY15
CAAR – FY12 Indirect Rates Allowability Determination
FY12 Disallowed Expenses
G&A Travel $ 7,316
G&A Meetings $12,127
Total Disallowed in FY12 $19,443
Indirect Pool
FY11
Final
FY12
FY13-FY15
Maximum
DC Office O/H
28.66%
37.38%
37%
DMC Office O/H
15.84%
18.89%
20%
G&A
23.14%
21.89%
25%

28. Current Rate Agreement

29. Unrestricted funds
Morgan Stanley Portfolio
Unallowable Expenses

30. Revenues Awards/Grants Membership Dues Interest/Dividends
Cost-reimbursable awards
Indirect cost recovery limitations
Management fees
Fixed-price awards
Program Income
Membership Dues
Interest/Dividends
Realized/Unrealized Gain on Investments
Contributions/Donations

31. Unrestricted Funds PNC Bank Account balances as of 3/31/15
Unrestricted Account $367,409
Innovation Fund Account $125,384
Morgan Stanley Portfolio
12/31/14 beginning balance = $2,174,605
Portfolio balance as of 3/31/15 = $2,224,945
2015 YTD Change (2% increase) = $50,340

32. Morgan Stanley – IRIS Portfolio Account Balance 12/31/02 – 3/31/15
$2,224,945
4/2/14 transfer to Morgan Stanley
$802,770
(Subsea Cable)
5/5/05
Personal Portfolio inception $965,025
Feb/Mar 2010 Distributions
<$50,000>
2/28/12
Distribution
<$25,000>
11/22/11
Distribution
<$25,000>
1/19/05 transfer to Morgan Stanley $107,779 (Iguaçu)
11/02 transfer to Morgan Stanley = $649,742

33. Select UMA Proposal – Portfolio Changes Implemented August 2013

34. “Other” includes: investment fees, donations/gifts, staff meals, unallowable travel/meeting and promotional expenses

35. FY15 Unallowable Expenses -to-date 7/1/14 - 3/31/15

36. Budget & Finance Committee
The IRIS Budget & Finance (B&F) Committee is charged with assisting and providing recommendations to the Board of Directors on its financial management responsibilities, and serving as the liaison between the Board of Directors and IRIS staff, or external parties, on such issues.
The Budget & Finance Committee will:
oversee the indirect pool budgets and development of the annual indirect rate proposal,
oversee IRIS unrestricted funds and its investment portfolio,
accept and review reports provided by external auditors,
recommend the firm that will provide the next year's audit,
review the annual Form 990 (Return of Organization Exempt from Income Tax) submission.