Basic Finance with CATMAn

1. Basic Financewith CATMAn An overview of the Office of Finance Providers: Bob Bennett, Diane Smithson, and Doug Hall Supervision 101: Update Module II

3. Compliance Branch • CAFR Section: • Is responsible for preparing the year-end closing book for the State of Arkansas’ Comprehensive Annual Financial Report. During the year, a review of all financial transaction in AASIS occurs to ensure they are recorded in compliance with rules and regulations for government agencies. 

4. Compliance Branch (cont’d) • Cost Allocation Section: • Is responsible for ensuring that ADH is accurately allocating it’s multiple funding sources to the appropriate programs within the department in compliance with rules and regulations for government agencies. 

5. Compliance Branch (cont’d) • This is achieved through multiple activities including but not limited to the administration of CATMAn (Cost Allocation Time Management Application) and the Coding Validation Table.

6. Accounts Payable Branch • Payroll/Benefits Section: • Is responsible for verification of payroll transactions and employee benefits. • New employee orientation sharing benefit opportunities. • Adjust existing employees benefits as requested. • Training for timekeepers and time-approvers.

7. Accounts Payable Branch (cont’d) • Payables Section: • Is responsible for the review and verification of documentation submitted for an issuance of a state warrant. • Vendor Payables – vendor payment. • Travel Reimbursement – employee reimbursement (TR-1) and petty cash reimbursement.

8. Managerial Accounting Branch • Banking Section: • The primary role is to receipt, record, and deposit Agency revenues in an accurate and timely manner.  • This section also monitors revenue compared to projections and performs the daily banking responsibilities.

9. Managerial Accounting (cont’d) • Budget Section: • Is responsible for managing the Department’s appropriation levels by preparing and reviewing monthly budget and expenditure reports. • Coordinates input for the development of the Agency’s biennial and annual budgets.

10. Managerial Accounting (cont’d) • Grants Management / Reporting Section: • Performs daily letter of credit cash draws for federal grant expenditures in accordance with state and federal guidelines ensuring consistency with state laws, regulations and federal grantors funding requirements.  • Prepare and submit timely federal financial reports.

11. Accounts Receivable Section • Accounts Receivable Section: • Is engaged in the collection of funds owed to the Agency. • Licensing Office – receives payment from license issuance and mandatory fees. Includes things such as Plumbing/HVACR license and plan review.

12. Accounts Receivable Section (cont’d) • Third Party Reimbursement: Billing agent for all Medicaid/Medicare services and flu activity performed in the Local Health Units.

13. Accounts Receivable Section (cont’d) • Miscellaneous Receivables: Billing agent for miscellaneous revenues due to the agency through contracts, MOAs and various billing sources. • Collections: Works to collect outstanding debt due the agency including civil penalties and insufficient checks.

14. Procurement Branch • Purchasing Section: Is responsible for commodity contracts/purchase orders, technical services and property leases. • Contract Support Section: Is responsible for professional services and sub-grant contracts/purchase orders.

15. Procurement Branch(cont’d) • Inventory Control Section: Is responsible for management of agency assets, property management and coordination for items to Marketing & Redistribution (M&R).

16. Central Supply • Central Supply is the warehouse for clinical and office supplies used by the various programs in the Agency. • Courier Service: Managed through Central Supply for the delivery of goods and lab specimens to and from the local health units.

17. Central Supply(cont’d) • Copy Center: Reproduce stock forms and special projects as requested by the programs. • Garage: Responsible for regular maintenance and repair on state vehicles.

18. Budget 101General Definitions • AASIS: Arkansas Administrative Statewide Information System. • AASIS is the software application that most state agencies utilize for all financial and personnel transactions.

19. Budget 101 (cont’d)General Definitions • PBAS: Performance Budgeting and Accountability System. • This is the system where all budgets are entered when submitting the annual or biennial budget requests through DFA. Once all numbers are verified and approved this data is uploaded into AASIS.

20. Budget 101 (cont’d)General Definitions • State Fiscal Year: The state cycle runs from July 1st through June 30th of the following year. • SFY11 will run from July 1, 2010 through June 30, 2011.

21. Budget 101 (cont’d)General Definitions • Grant Fiscal Year: Grant cycle dates are established by the federal granting agency. • ADH has grants ending in almost every month and multiple grants in some months. A grant cycle typically runs only one year, however, some grants are for two or more years.

22. Budget 101 (cont’d)General Definitions • Appropriation: The legislative authority to expense funds. • Authority is given during the legislative session through an appropriation act.

23. Budget 101 (cont’d)General Definitions • Funding: The actual funds or money the agency has to expense. • The appropriation must never exceed the funding. However, some instances the funding exceeds the appropriation.

24. Budget 101 (cont’d)General Definitions • A Certification of Income (COI): Is completed during the budget process to inform the Office of Finance the amount of anticipated revenue expected during the state fiscal year.

25. Budget 101 (cont’d)General Definitions • Budget: The combination of appropriation and funding each Section and/or Center is allowed to expense. • For example, if a Section had $100 in appropriation and $90 funding, the budget would be $90. • If a Section had $80 in appropriation and $110 in funding, the budget would be $80.

26. Budget 101 (cont’d)General Definitions • Budgets are completed every year according to the appropriation act passed during the previous legislative session. • Every two years a Biennial Budget is submitted requesting agency needs for the next legislative session that will cover two fiscal years.

27. Budget 101 (cont’d)General Definitions • Fund Center: A three character reference. The fund center is how the legislature disburses appropriation. The main fund center for Health is 34P. • Fund: Is tied to a fund center. Health’s main fund is PHD0000.

28. Budget 101 (cont’d)General Definitions • Cost Center: A six digit number which represents a work unit or section. The cost center is linked to a fund center and fund.

29. Budget 101 (cont’d)General Definitions • Internal Order: A nine character field which represents a funding source. • For example, ASGR00XX represents pure general revenue funding. An internal order ending in XX is typically a non-federal funding source. • An internal order ending with a number as in 10 or 11 is usually a federal grant and the number represents the federal grant cycle.

30. Budget 101 (cont’d)General Definitions • Commitment Item: The type of expenditure. Every expenditure is categorized into a commitment item. • Below is a general listing of commitment items: • CI00 – Regular Salaries • CI01 – Extra Help Salaries • CI02 – Maintenance and Operations (M&O)

31. Budget 101 (cont’d)General Definitions • Additional Commitment items: • CI03 – Fringe • CI04 – Grants and Aids typically sub-grant payments • CI09 – Conference Fees and Travel • CI10 – Professional Fees (professional services contracts) • CI11 – Capital Outlay (asset purchases)

32. Budget 101 (cont’d)General Definitions • General Ledger (GL) Code: Is the code within the commitment item which specifies the type of expenditure. • For example, CI02 is for M&O expenditures but the GL may be 5090006000 for Office Supplies. • Every GL code is “tied” to a commitment item.

33. Budget 101 (cont’d)General Definitions • Additional General Ledger (GL) Code: • When purchasing goods and services, an appropriate GL code and commitment item must be used. • In the state budget system (PBAS) the GL code is also known as the cost element.

34. Budget 101 (cont’d)General Definitions • FITS (Financial Information Tracking System): • Internal ADH system designed to monitor budget vs. expenditures and commitments by internal order. • Information reported in FITS can be found in Business Objects (ADH’s main database reporting program)

35. How does all of this fit together? • State Legislature approves ADH's budget based on PBAS and DFA submission providing us appropriation for the biennium. • The appropriation levels are then loaded into AASIS.

36. How does all of this fit together? (cont’d) • The program wants to purchase a widget. • A purchase requisition must be entered into AASIS. • A cost center and internal order are entered. • A material code for a widget is also entered which defaults to a specific commitment item (CI) and GL code.

37. How does all of this fit together? (cont’d) • Before the user can save the requisition, AASIS checks to determine if there is enough appropriation in the fund center and CI to support the purchase. • When the requisition is saved, the appropriation is encumbered or committed.

38. How does all of this fit together? (cont’d) • The requisition must be approved (released) in AASIS. • A purchase order is created and approved. The widget is ordered by procurement. • The vendor delivers the widget and invoices ADH. • The program verifies receipt of the widget and performs a goods receipt in AASIS.

39. How does all of this fit together? (cont’d) • The Payables Section receives the invoice, reviews and post in AASIS for payment. • The Grants Management Section (federal funds) or Banking Section verify the funds are available to issue a state warrant. • The funds are “drawn” then deposited. • A state warrant is then issued to pay the vendor for the widget.

40. Who watches the budget? • It is the responsibility of the program or section to stay within their specific budgeted amount. • AASIS reports reflecting expenditures along with program tracking and will let you know where you stand regarding your specific budget.

41. Who watches the budget? • It is important to monitor monthly and watch all expenditures.

42. Training Opportunities • A-Train Courses: • Road to ADH Travel . . . . . . . . . . . . 1015364 • Travel Fraud Indicators . . . . . . . . . .1016579 • Vendor Payables Policy Training . . 1017474

43. Basic Finance Questions?

44. Break Time Ten (10) minutes

45. Cost Allocation for Supervisor’s A guide to understanding reports and how they are used throughout the Health Department.

46. Why Cost Allocation is Important • WE HAVE NO CHOICE!!!! • In order to continue receiving federal funding, we are required to have an approved Cost Allocation Plan.

47. Why Cost Allocation is Important • Help avoid audit findings and potential repayment of federal dollars. • Cost Allocation is very important to federal agencies who provide funding to the Department of Health. • These agencies want to make sure their funding is being used to support the programs they specify. • If we are unable to prove this, there is the potential that federal agencies will require us to repay funding they feel was not properly utilized.

48. Why Cost Allocation is Important • Improve accountability for time worked by employees. • Gives supervisors an added tool to ensure employees are working on appropriate programs.

49. Why Cost Allocation is Important • Support ADH’s efforts to secure additional funding and positions from the State Legislature and other funding sources. • Programs may not be properly supported by their current funding. Cost Allocation will help support this by giving us a total cost of a program.

50. Why Cost Allocation is Important • Benefit fee-based programs and support fee increases. • There may be instances where a fee based program is not being supported properly by the fees it collects. Through cost allocation, we will be able to provide a cost for performing a service which may support fee increases.