1. Financial Management What you need to know…

2. Agenda –Introductions –Webinar logistics –Financial management systems Policies and procedures OMB circulars Accounting system –Requirements for cash reimbursement requests –Preparing for fiscal site visits Common IG audit findings –Member support costs and grant drawdown –Administrative Costs –Close Outs –Program Income

3. Your Fiscal Team July Afable, Manager of Accounting & Finance –617-542-2544, x225 –jafable@mass-service.orgjafable@mass-service.org Dan Glidden, CFO –617-542-2544, x227 –dglidden@mass-service.orgdglidden@mass-service.org

4. Financial Mgmt. Systems –Required policies and procedures –Suggested policies and procedures –Form 990 Questions on procedures

5. OMB Circulars All Corporation grants are governed by the Office of Management & Budget (OMB) circulars. OMB establishes government-wide grants management policies through circulars and common rules in cooperation with federal agencies and non federal parties. Adapted from a Walker & Company Training

6. Accounting System In order to meet the CNCS reporting standards … Your Accounting System must be capable of: –Distinguishing grant versus non-grant related expenditures –Identifying costs by program year –Identifying costs by budget category –Differentiating between direct and indirect costs (administrative costs)

7. Accounting System (cont.) – Accounts for each award/grant separately – Maintains Federal/non-Federal matching funds separately from grant funds – Records in-kind contribution as both revenues and expenses – Directly correlates to financial reports submitted to Mass-Service and CNCS (PERs and FFRs)

8. Reimbursement Objective: To ensure that programs submit accurate and timely reimbursements including a Signed Reimbursement Request Cover Sheet with Program Initials, a PER, a General Ledger, and a clear reconciliation report tying expenses in the PER to the General Ledger. Both the Program Officer and the Massachusetts Service Alliance Fiscal Department will review this system. System Checklist: Does system Ensure reimbursement requests are accurate Include only allowable expenses Ensure Periodic Expense Report ties to the reconciliation report Ensure reconciliation report ties to General Ledger

9. Reimbursement (cont.) Requirements for cash reimbursement requests Summary page with signatures Periodic expense report – Excel spreadsheet General ledger detail report supporting all current expenses, including match, for the period shown on the periodic expense report Reconciliation report showing how the general ledger detail report translates into the periodic expense report

10. Reimbursement (cont.) –Provide necessary back-up documentation for expenses billed to CNCS Share –Provide necessary back-up documentation for expenses billed to Grantee Share –Ensure Program Staff Initial Cover Page indicating all member hours are up to date –Ensure at least one reimbursement request is submitted each quarter

11. Reimbursement (cont.) Documentation of Expenses –All expenses should align with the budget and budget narrative. –All expenses should be reported in the the General Ledger and have appropriate documentation on site. Documentation should be signed and coded

12. Fiscal Site Visits –Purpose MSA is responsible for ensuring the fiscal integrity of organizations funded Ensure proper systems and safeguards exist around the financial operations of an AmeriCorps program

13. Fiscal Site Visits (cont.) –Includes, but not limited to: Review of organization's internal control structure Review of prior audit reports and management letters Review of progress made from any prior audit and management letter finding(s) Sampling of selected fiscal transactions

14. Fiscal Site Visits (cont.) –Likely areas for review Member benefits Fiscal compliance –Living allowance stipends –Cash match –In kind contributions –Insurance –Human resources/payroll documentation

15. Fiscal Site Visits (cont.) –Likely areas for review (cont.) Financial policies and procedures Program analysis –Actual vs. Budget reports Program documentation Staff charged to grant –I-9 –W-4 –Timesheets –Current wage authorization –Job description –Current personnel evaluation

16. Fiscal Site Visits (cont.) –Recurring Fiscal Findings Staff Files missing I-9s Incomplete I-9s Staff Files missing Job Descriptions or contracts Staff Files missing properly completed payroll authorization forms No Staff timesheets Staff timesheets missing supervisory signoff Section III fixes

17. Member Support Costs According to the AC Provisions –Regardless of member type: Stipends are not determined by the number of hours served, it’s a flat rate Stipends can only be paid while a member is serving

18. Member Support Costs (cont.) –Guidance from CNCS A member stipend stays the same for the duration of their service All members with the same position description must be paid identical stipends Member stipends can not be pro-rated Member stipends can not be paid in lump sums If members are suspended through a whole pay period they are not eligible for that stipend

19. Grant Drawdown –Commissions and AmeriCorps Programs do not spend all of their Federal money each year. –Report from 2003-2006 Grants Most of the unexpended funds are from Section II Member Support Costs and other costs associated with members (Trainings, Travel).

20. Grant Drawdown (cont.) Section I –Reconcile budgeted amount with year to date expenses –Forecast projected expenditures –File amendment with Program Officer Section II –Start program year with full enrollment –Fill slots vacated by members who served less than 30% of their hours –Convert Member Slots

21. Grant Drawdown (cont.) –Budget Amendments Contact your AmeriCorps Program officer before initiating a budget amendment All provisions still apply to budget amendments Include justification with budget amendment Budget amendments are subject to review Budget amendments can be rejected

22. Section III: Admin. Costs –A fixed percentage of Section I + Section II designed for administrative costs –Composed of Corporation Fixed Amount (this is yours) Commission Fixed Amount (this is MSA’s) –The only way to draw down all of Section III is to draw down all of Section I and Section II

23. Section III - Calculations

24. Grant Close Out A grant is closed out when it is over This process at CNCS documents: –Total Funds drawn down –Summary of results (narrative) –Residual equipment & supply inventory –Refunds as necessary Process –MSA checks total funds drawn down for program and compares to final program FFR/PER –MSA sends close out letter/instructions with forms to programs and amounts drawn down –Program completes forms and reconciles its total draw down with MSA amount provided –Program submits documentation to MSA within 30 days –MSA aggregates all programs and submits one package to CNCS

25. Program Income –Definition Revenue earned as a direct result of activities funded under the grant –Program income must be used for the purposes of the grant incurred during the project period –Program income on hand must be used to defray eligible program costs before requesting funds

26. Program Income What options are there for the use of program income? –There are three ways that program income can be used. For most Corporation grants, the matching alternative is specified in the grant provisions or terms and conditions. In some other cases, the Corporation instructs the grantee to use the funds to enhance or expand grant-approved activities (additive method). In some other cases, the Corporation requires the grantee to use the program income to replace approved Federal grant funds (deductive method). Program Income Alternative Use of Program Income (Specified in the terms and conditions or provisions of the grant) –Matching Alternative Used to satisfy all or part of the required grantee share of the project or program –Additive Alternative Added to funds committed to the project or program and used to further eligible project or program objectives –Deductive Alternative Deducted from the total allowable costs of the project or program to determine the net allowable costs on which the federal share of costs will be based.