Federal Reporting Requirements for Head Start Grantees

1. Federal Reporting Requirements for Head Start Grantees Mississippi Head Start Association April 3 2012

2. Presented by: Walter K. Frye, MBA, CPA Revelation Management Systems, LLC 320 Main Street West Orange, NJ 07052 973-902-1040 walterfrye@aol.com www.fiscalinstitute.com

3. Goal • By the end of this session, you will be able to: • Identify the who, what, when, where, and how of the reporting requirements

4. The Basics of Reporting • Reporting: • Allows for informed decision-making and active involvement • Is necessary for monitoring financial expenditures and program operations • Identifies potential risks • Accurate and timely reports are only possible when a strong recordkeeping system exists • Provides checks and balances by keeping everyone in the loop • Increases accountability

5. The Basics of Reporting • Reporting is most effective when: • Provide accurate information and sufficient detail • Are presented in an easy to interpret way • Are presented in a timely manner • Individuals receiving the reports must know: • How to interpret the information provided • How to apply to the information to their responsibilities • What critical questions to ask about the information • How to use the information to identify red flags or problem areas

6. Regulations Associated with Reporting

7. General Reporting Requirements

8. General Reporting Requirements • Reporting System • 1304.51(h)(2) • Reporting systems, Grantees and delegate agencies must establish and maintain efficient and effective reporting systems that generate official reports for Federal, State, and local authorities, as required by applicable law. • Reporting to the Governing Body, Policy Council, and agency staff • 1304.51(h)(2) • Generate periodic reports of financial status and program operations in order to control program quality, maintain program accountability, and advise governing bodies, policy groups, and staff of program progress. *While these regulations are applicable, grantees must also meet the additional and more specific reporting requirements found in the Head Start Act.

9. Reporting Requirements - Reporting to the Governing Board and Policy Council

10. Reporting Requirements – Reporting to the Governing Board and Policy Council • HS Act: 642(d)(2)(A)-(1) • Each Head Start Agency shall ensure the sharing of accurate and regular information for use by the Governing Body and the Policy Council, about program planning, policies, and Head Start Agency operations. • This standard requires the provision of several new reports, like credit card transactions, to the governing bodies.

11. Reporting Requirements – Reporting to the Governing Board and Policy Council • Monthly – SEC.642(d)(2)(A)-(D) • Monthly financial statements, including credit card expenditures • Monthly program information summaries • Program enrollment reports, including attendance reports for children whose care is partially subsidized by another public agency • Monthly reports of meals and snacks provided through USDA programs • Annual - SEC.642(d)(2)(E)-(G)/(1) • The financial audit • The annual self-assessment, including any findings related to such assessment • The communitywide strategic planning and needs assessment of the Head Start Agency, including any applicable updates • The program information reports • As available SEC.642(d)(2)(H) • Communication and guidance from the Secretary

12. Reporting Requirements – Reporting to the Governing Board and Policy Council • Head Start Act: 642 (c)(1)(E)(iv)(IV) • The Governing Body is responsible for establishing procedures and guidelines for accessing and collecting information in reports received by the Governing Body/Policy Council.

13. Reporting Requirements – Reporting to the Governing Board and Policy Council • Head Start Act: 642(d)(3); 1304.52(I)(4) • Provide training and technical assistance to ensure members: • Understand information in reports • Use information effectively to oversee and participate in the programs of the Head Start Agency

14. Governing Board and Policy Council Requirements – Related to Reporting • Governing Body responsibilities include: • Head Start Act: 642(c)(1)(E)(iv) • Reviewing all applications for funding and amendments • Reviewing and approving all major policies of the agency • Approving financial management, accounting and reporting policies • Annual approval of the operating budget • Selection of independent financial auditors • Monitoring of the agency’s actions to correct any findings and comply with laws and regulations • Reviewing results from monitoring including follow-up activities • Approve compensation policies and personnel policies and procedures • Policy Council members responsibilities include: • Head Start Act: 642(c)(2)(D) • Applications for funding and amendments to applications for funding for programs (prior to submission of applications) • Budget planning for program expenditures

15. Best Practices: Reporting to the Governing Board and Policy Council • Effective and useful reports should include the following: • Budget to actual comparisons • Non-Federal share reporting • Administrative cost reporting • Breakouts by cost categories, as reflected on the FAA • Reporting of any one-time funding

16. Reporting Requirements:Reporting to HHS Agencies and the IRS • Financial reports required by HHS awarding agencies • 74.52 (a)-(b) • Financial reports required by IRS • 1304.51(h)(2)

17. Reporting Requirements:Reporting to HHS Agencies and the IRS • Financial reports required by HHS awarding agencies • Head Start Act Sec. 647(c)(1)-(3) • Complete accounting of the recipients administrative expenses • Additional documentation, as the Secretary may require • Copy of audit management letter and of any audit findings • Other reports required by HHS awarding agencies • Head Start Act Sec. 641A(h)(2)(A)-(B); 644(a)(2) • Annual report to the public • Enrollment reporting

18. Reporting Requirements:Reporting to HHS Agencies and the IRS • Annually • Audits A.133(200)(a); A-133(320)(a); A-133 Compliance Supplement; HS Act Sec. 647(c)(2) • Annual Report to the Public HS Act Sec. 644(a)(2)(A)-(H) • IRS 5500 1304.51(h)(2) • IRS 990 (for non-profits) 1304.51(h)(2) • Quarterly • FFR-425; Federal Financial Report (part 1) • IRS 941 1304.51(H)(2) Semi Annual FFR 425 Federal Financial Report (part2) • Monthly • Enrollment Reports HS Act 641A(h)(2)(A)-(B) • USDA Reports 1304.51(h)(2)

19. Annual Reports

20. Annual Reports: Audit • Audit Reporting • A-133(200)(a) • All grantees that expend >$500,000 per year in Federal awards must conduct an audit • The vast majority of grantees must obtain an annual audit • A-133(320)(a) • The data collection form and reporting package must be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period. • Grantee must make copies of the audit available for public inspection • Sec. 647(c)(2) • Submit a copy of the audit management letter and of any audit findings (as they relate in the Head Start program) to the Secretary within 30 days after audit completion • A-133 Compliance Statement • Updates to audit requirements: http//www.whitehouse.gov/omb/circulars_a133_compliance_10toc/

21. Annual Reports: Audit Responsibilities • The Auditor’s primary reporting responsibility is to the Governing Board • The Governing Board’s audit responsibilities include: • Selecting the auditor • Reviewing and approving the audit • Monitoring the correction of any audit findings • Knowing that OMB updated the scope of issues reviewed by auditors • The Grantee’s audit responsibilities include submitting: • The management letter and audit findings to the Grants Management Officer within 30 days of the completion of the audit • A separate audit submission to the Single Audit Clearinghouse

22. Annual Reports: Annual Report to the Public • Annual report to the public • HS Act Sec.644(a)(2) • Each HS agency shall make available to the public a report • The report should: • Be published at least once in each fiscal year • Disclose information from the most recently concluded fiscal year

23. Annual Reports: Annual Report to the Public • The annual report to the public must include: • HS Act Sec. 644(a)(2)(A)-(H) • Public/private funds received and amount from each source • Explanation of expenditures and proposed budget • Number of children and families served, average monthly enrollment (as a % of funded enrollment) and percentage of eligible children served • Results of the most recent review and the financial audit • Percentage of children receiving medical and dental exams • Information about parent involvement activities • The agency’s efforts to prepare children for kindergarten • Any other information required by the Secretary (The annual report should include information from the most recently concluded fiscal year, and be made available at least once each fiscal year.)

24. Annual Reports: IRS 5500 and IRS 990 • IRS 5500 • 1304.51(H)(2) • Annual Return/Report of Employees Benefit Plan • IRS 990 • 1304.51(H)(2) • Applies only to non-profits • Return of Organization Exempt From Income Tax

25. Quarterly Reports

26. Quarterly Reports: FFR-425 Recent Changes in Reporting Requirements – SF-425 • Effective January 1, 2010 • The FFR functionality will be available to all users of the Payment Management System • If recipients previously filed cash transaction reports using the PSC-272, the top portion of the new FFR Form and the FFR Attachment for reporting disbursements for multiple grants must be filed. • The FFR cash transaction reports must be filed within 30 days of the end of the quarter (instead of the 45 days previously allowed for filing the PSC-272). • The Department, in consultation with the OMB, has established a timetable for implementing the use of the lower portion of the /SF-425 to replace the SF 269 - for grant awards ( fye 2/1/2011 and after)

27. Semi Annual Reports: FFR-425 • 74.52(a)(1) File Paper Returns to Regional Office • Within 30 days after the 6th and 12th month of the award period (if grant year falls at the end of a calendar quarter) • Or within 30 days after the quarter ended for the 6th and 12th month of grant award date • Final Report due within 90 days of the end of the award period (if grant year falls at the end of a calendar quarter) • Or within 30 days after the quarter ended that included the 90 day closeout • Include information on disability services, training and technical assistance and development/administrative, and USDA expenditures.

28. Quarterly Reports: FFR-425

29. Quarterly Reports: IRS 941 • IRS 941 • 1304.51(h)(2) • Employer’s Quarterly Federal Tax Return

30. Monthly Reports: Enrollment Reporting • Enrollment Reporting • Head Start Act 641A(h)(2)(A)-(B) • Enrollment reporting requirement – Each Head Start program must report on a monthly basis to the Secretary and the relevant Head Start Agency • (A) the actual enrollment in such program; and • (B) If such actual enrollment is less than the funded enrollment, any apparent reason for such enrollment shortfall. • Additional instructions and details of online enrollment reporting system available in PI • ACF-PI-HS-08-06

31. Monthly Reports: USDA Reports • USDA Reports • 1304.51(h)(2) *Grantees are required to participate in the USDA Food and Consumer Services Child Nutrition Program and use funds from USDA as a primary source of payment for meal services 1304.23(b)(1)(1).

32. Resources • HHS Grants Policy Statement • ECLKC • http//eclkc.ohs.acf.hhs.gov/hslc • Your Financial Assistance Award • Contains references to reporting requirements • Related DABs • DAB Decision No.1580 • Failure to comply with the required reporting requirements

33. ECLKC: Policy Issuances • Monthly Enrollment Reporting • ACF-PI-HS-08-06 • Head Start Compliance Supplement to Office of Management and Budget (OMB) Circular A-133 • ACYF-IM-HS-99-11 • Reporting Obligations on the FFR 425 • OHS-PC-A-036 • Record Retention Requirements • OHS-PC-F-001

34. Questions??????

35. Federal Reporting Requirements for Head Start Grantees Contact Information: Walter K. Frye, MBA, CPA 973-902-1040 walterfrye@aol.com