Financial Management

1. Financial Management What you need to know…

2. Agenda • Introductions • Webinar logistics • Financial management systems • Policies and procedures • OMB circulars • Accounting system • Fiscal Reporting • 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.org • Dan Glidden, CFO • 617-542-2544, x227 • dglidden@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. Fiscal Reporting • Quarterly Due Dates • October 15 (10-11 AND 11-12 through September 30) • January 15 (through December 31) • April 15 (through March 31) • July 15 (through June 30) • October 15, 2012 (11-12 AND 12-13 through Sept. 30) • Email PER Excel document with individual worksheets updated through the required date

9. Reimbursement and ReportingKey Definitions • FSR/Financial Status Report • PER/Periodic Expense Report • Budget Summary Worksheet • FFR/Federal Financial Report • “Cover Sheet”/Request for Cash Reimbursement Cover Page • Backup/Supporting Documentation

10. Reimbursement Request Process • At least quarterly • At minimum, request funds 30 days after submission of FSR (except for July 15) • Encouraged to request more frequently • Payments made via check or electronic fund transfer (EFT) • EFT requires small transaction fee deducted from reimbursement • Contact July to discuss/choose EFT

11. Reimbursement Request Process • Accurate reimbursement received by 15th processed by 30th; received by 30th processed by 15th • Inaccurate reimbursements returned for revision and will be resubmitted for processing in the next reimbursement cycle • MSA adheres to 15 day processing timeline to account for staff capacity, time off, etc. • MSA does not advance funds

12. Reimbursement Request Process • Complete reimbursement request includes: • Cover sheet with original signature (scan or mail) • PER printout for current request • Budget summary worksheet printout • General ledger, reconciliation report, other backup documentation • Individual member hours to date • Reimbursements will not be processed until all components are received • MSA will not take responsibility for ensuring completeness

13. Reimbursement Request Documents • Reimbursement Request Cover Page • Budget Summary Worksheet • PER • Supporting Documentation

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

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

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

23. 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

24. 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

25. Section III - Calculations

26. 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 Grant Close Out • 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

27. 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

28. 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.