City of Chicago Comptroller’s Office Voucher Audit and Tracking Unit (Revised 04/06/09)

1. City of ChicagoComptroller’s OfficeVoucher Audit and Tracking Unit(Revised 04/06/09) Common Problems with Delegate Agency Invoices

2. Introduction • The Voucher Audit and Tracking Unit identifies issues of non-compliance that could affect the amount and timing of reimbursement. • Here are some of the challenges the Voucher Audit Unit encounters when processing delegate agency invoices

3. 1. PO-release numbers on invoices are incorrect. • PO-release numbers are crucial numbers and they are the starting point for Voucher Audit Unit to process delegate agency invoices. • Purchase Order (PO) refers to a Delegate Agency blanket purchase agreement. • A PO number, namely contract number, identifies supplier, a general description of the type of goods and services to be covered, the required dates (effective, starting and ending dates), and general long-term liabilities and responsibilities spelled out in the contract boilerplate. • Delegate Agency blanket purchase agreement may cover multiple years. If a contract is renewed, a new contract number, namely PO number will be assigned.

4. 1. continued • Release is an actual order of goods and services issued against a PO and the true fiscal encumbrance document. • The release specifies actual quantities, the amounts of money to purchase those quantities, the required dates and the account distributions for the ordered items. • A Release covers a fiscal year or a period of time within the term of the subject contract. If a new funding source is awarded, a new release number* will be assigned. • PO-release numbers identify the contract and budget, with which the invoice will be matched. They must be clearly and correctly indicated on the invoice. * Occasionally, multiple release numbers may be assigned to identify the programs under the same or different funding sources or to identify the available funding for a specific period of time.

5. 2. Invoice number on invoice is incorrect • An invoice number consists of four elements: PO number-Release number-Invoice Year (2 digits)-Sequential number (2 digits), e.g., 16046-1-09-01 • Invoice number (sequential number) must be unique. If the invoice is a resubmission, add “R” after the sequential number to identify the invoice as a resubmission, e.g., 16046-1-09-01R (01R2, 01R3, etc). • To prevent duplicate payments and provide an audit trail, under any circumstances, do not use a different invoice number for resubmissions (only add an R to the original invoice number).

6. 3. Positions, salaries and fringes identified in the invoice do not agree with detail budget. • Positions identified in the invoice must be specified in the approved contract budget • Pay special attention to dollar limitation both monthly, by pay period and for the contract as a whole as it relates to salary and fringe reimbursement • If period pay is not evenly allocated, providing a Schedule for Pay Period Allocation, as a part of the budget documentation is very helpful in determining the dollar limitation. • A schedule of pay period allocation must be consistent and justifiable and should match the budgeted amount for each position identified in the Personnel Budget.

7. 4. Non-personnel items identified in the invoice are not in the contract budget detail. • Requested items identified in the invoice must be allowable costs specified in the approved contract budget. • Under an object classification budget, Operating Costs budget line 0100 may include the costs such as rental of property*, utilities, telephone, postage, etc. However, such objects must be specified and justified in the budget. Otherwise, they will not get reimbursed * The program may set up a separate account 0155 for rental of property

8. 5.Check numbers are not indicated on Personnel Cost Details form and Non-personnel Cost Details form • Check number must be identified as part of the supporting documentation • When a check number is provided, an assumption has been made that the bill was paid and sufficient supporting documentation for the payment was well documented and filed. • If a check number is not available, alternative supporting documentation is required. Typical examples are payroll register and summary, bank statement, and payment statement.

9. 6. Lack of supporting documentation • Tax Payment Certification is required if any claims for personnel cost (salaries and wages, social security tax and Medicare tax) are requested for reimbursement • Property Record Card and copy of equipment invoice if any claims for equipment cost reimbursement ($5,000 or more per unit)

10. 7. Improper claim for Indirect cost • There must be an approved indirect cost rate agreement. • The dollar amount of indirect cost claimed for reimbursement shall be determined by multiplying a modified total actual direct cost base by the approved indirect cost rate. • A modified total direct cost base may be the total of actual direct costs,minus capital outlays such as acquisition cost of equipment ($5,000 or more per unit), and other distorting or unallowable items(contrasted with budget and ineligible). • A modifies total direct cost base and the approved indirect cost rate should be indicated in the invoice and detail reference data is helpful.

11. 8. Combination of two calendar year expenditures in one reimbursement voucher • Delegate agency contracts may span two calendar years, e.g. from March 1, 2008 to February 28, 2009. • The accounting period adopted by the City for Financial Reporting is from January 1 to December 31. Also, the agencies’ fiscal year must be noted and invoiced accordingly. • In order for the City to properly record the expenditures in a correct accounting period, do not combine expenditures incurred in two different calendar/fiscal years in one voucher, e.g. cover period by the invoice is from 12-31-08 to 01-31-09 or 06-01-2008 to 07-31-08. • Contract boilerplate prescribes that the reimbursement voucher shall be submitted for reimbursement on a monthly basis (e.g. “Requisitions must be submitted within 15 calendar days after the end of the month in which the Services were performed and /or costs were incurred”).

12. 9. Signature on face of invoice is unauthorized or not original • Signature on face of invoice must be properly signed and dated by agency’s authorized personnel • If authorized personnel has been changed, the Signature Authorization Form must be updated • Authorized signature must be an original signature • Invoice will be rejected for reimbursement if not properly signed and dated.

13. 10. Preparer’s name and phone number are missing from invoice • Voucher auditor staff and Invoice Preparer should have an open line of communication if there are any questions on invoices. • To avoid payment delays and deleted amounts, you should indicate preparer’s name and phone number on the invoice so that voucher audit staff can contact the preparer in a timely manner to resolve the voucher audit problem.

14. 11. Amount requested on invoice does not match budget line balances. • In order to verify that the budget has been charged correctly, a requested and an approved amount reconciliation and a budget to actual comparison should be done periodically to ensure reimbursement requests were paid as requested. • Contact department to get the budget line balances

15. 12. Agency address and remittance address on invoice is unclear • Agency address or remittance address identified in the invoice should match with the site address identified in the FMPS. • Site address is the place where EFT or check (regular check or check mailed to the bank) will be sent. A hard copy of Contract Voucher (CV), Invoice, and Remittance Advice will also be sent to the site address. • EFT (Electronic Funds Transfer): deposits are made electronically and directly to your account, eliminating time-consuming mail delays, and give you the reliability and safe advantages. • Correctly identify site address in the invoice to ensure receipt of payment and a hard copy of CV, Invoice and Remittance Advice.

16. 13. Lack of insurance or expired insurance. • Do not wait until insurance has expired to renew. System will automatically put invoice on hold if insurance expires. • Call Federal Funds Insurance Unit Maria Santiago at 312-744-7923 or Karen Gaynor at 312-744-6483.

17. 14. Invoice submission after submission deadline • Depending on your contractual requirement, there is a 30 or 45 day rule* for final invoice submission after the end of contract or/and budget period. • The final invoice must reach Comptroller’s Office Voucher Audit Unit by the submission deadline as required. • If your final invoice is submitted after the submission deadline, your invoice will be most likely rejected unless there is a concurrence from SAD or OBM to proceed to voucher process. • All resubmissions (deleted costs) are due prior to the specified deadline date. * The program may set up a different rule for final invoice submission deadline under special circumstances. Pay close attention to your program’s submission deadline.

18. 15. Miscellaneous Issues • Deletion due to contract and budget problems • E.g. contract type and budget item are unclearly identified in the contract and budget • Deletion due to timing discrepancy between action taken & budget revision or PO modification approved • Agency should submit invoices against new revision after receiving confirmation by Contracting Department. • Budget and budget revision issues must be addressed via Contracting Department • Budgets and/or budget revisions should not be submitted directly to Voucher Audit Unit.