Securing and Documenting Match and In-kind Support

2. Securing and Documenting Match and In-kind Support Gregory Winn, Sr. Grants Advisor, OGM Susan Meche, Meche Consulting

3. Session Objectives Gain knowledge of match requirements at basic and more advanced levels Gather and retain proper match documentation for accountability and audit review Learn about types and examples of match and how to address complex requirements Corporation Grantee Financial Accountability Seminar July 2007

4. Allowability of Project Costs To be allowable under a grant, costs must: • Be reasonable and allocable for the performance of the award • Conform to grant award limitations or cost principles • Be consistent with policies and procedures that apply to both federally-financed and other activities of the organization • Be given consistent treatment • Be in accordance with Generally Accepted Accounting Principles (GAAP) • Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program • Be adequately documented OMB Circulars – see handout Corporation Grantee Financial Accountability Seminar July 2007

5. Grantee Share or Match Cash and in-kind contributions are accepted as part of the grantee’s cost sharing or matching when contributions meet all of the following criteria: • Are verifiable from the grantee's records • Are necessary and reasonable for proper and efficient accomplishment of project or program objectives • Are allowable under the applicable OMB cost principles • Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching • Are provided for in the approved budget • Conform to other grant provisions or OMB Circulars Question: How would you estimate and record the value of PSAs? (See FAQ Sheet) Corporation Grantee Financial Accountability Seminar July 2007

6. Talking Technical: Definitions to Know Total allowable expenditures incurred to operate the program and accomplish its objectives Portion of total expenditures paid for with Federal funds (CNCS) Portion of total expenditures not paid for with Federal funds (CNCS) – Key Point – grantee share is recorded and documented the same as CNCS funding Project Costs Federal Share Grantee Share Corporation Grantee Financial Accountability Seminar July 2007

7. More Technical Talk • Gross income earned by the grantee that is directly generated by a supported activity or earned as a result of the award Key Point: There are three ways to address the use of program income – [see FAQ sheet] • Value of non-cash contributions provided by non-Federal third parties • May be in the form of real property, equipment, supplies, services, and other expendable property Program Income In-Kind Contributions Corporation Grantee Financial Accountability Seminar July 2007

8. Cash: Donations Non-federal income Local governments State appropriations Foundation grants or corporate contributions In-Kind Contributions: Value of donated services and/or donated goods Unfunded Indirect Costs: The portion of indirect costs not allowed by CNCS in Federal Share Where Can You Find Match? Government-wide, with few rare exceptions, Grantees cannot use other Federal funds as match Corporation Grantee Financial Accountability Seminar July 2007

9. Exception: Volunteer Match Do not count as match - • The value of direct community services performed by volunteers Do count as match - • Services that contribute to organizational functions • Count services such as accounting, training of staff or members that are elements of the grantee’s cost allocation plan Corporation Grantee Financial Accountability Seminar July 2007

10. How to Record In-Kind Contributions • Maintain adequate documentation to support amounts claimed as match • Maintain same documentation for both CNCS Federal share and for grantee’s share • Documentation must meet same standards as other expenditures • Record donation and valuation of item in detail • Enter into the general ledger as income and expenditure • Failure to enter match contributions into general ledger requires a formal explanatory policy and separate spread sheet accountability of receipt and use Corporation Grantee Financial Accountability Seminar July 2007

11. Why Record In-Kind in General Ledger? Statement of Financial Accounting Standards (SFAS #116) sets the standard: • Contributed services are recognized in financial statements if services received: • Create or enhance non-financial assets • Requires specialized skills provided by individuals possessing those skills • Would need to be purchased if not provided by donation Corporation Grantee Financial Accountability Seminar July 2007

12. Recording In-Kind Contributions Enter into the general ledger as income and expenditure: Example: Local paint store donates a professional paint sprayer with a fair market value of $550.00 $550.00 – 7250 In-Kind Expenses Account (debit) $550.00 – 5250 In-Kind Income Account (credit) Corporation Grantee Financial Accountability Seminar July 2007

13. Defining Source Documentation: Benefits: Supports a value, cost, or performance criteria relative to the grant Physical information: • Hard copy • Soft copy: CD, flash drive, server, microfilm Source: • Internal source • External source NB: Federal Funds and match are maintained and documented the same way with the exception of in-kind match contributions Corporation Grantee Financial Accountability Seminar July 2007

14. Why Retain Documentation? • To track incoming information • To review information • To provide historical evidence • To provide evidence of accomplishments • To prepare for an audit • How do you maintain documentation? Internal controls and security for your financial system (see handout) Corporation Grantee Financial Accountability Seminar July 2007

15. Retaining Source Documentation Retain all financial records: • 3 years from date of submission of final Financial Status Report • Final report submitted by Commission or Parent of National Direct • 3 years from final audit resolution when there is an on-going audit Example 1: Grant Ends 7/31/2009 • 90 days to submit Final FSR = 10/31/2009 • 3 years = 10/31/2012 Example 2: Grant Ends 7/31/2009 • 90 days = 10/31/2009 • 3 years = 10/31/2012 • Audit started = 4/1/2012 • Final audit resolution = 9/30/2013 • 3 years = 8/31/2016 Corporation Grantee Financial Accountability Seminar July 2007

16. Documentation Examples Salary Benefits Travel Supplies Contract & Consultant Training Evaluation Volunteer or Member Costs Admin Corporation Grantee Financial Accountability Seminar July 2007

17. Identifying Documentation Salary • Signed timesheets with supervisory approval • Quarterly payroll returns (941) • Payroll register • Personnel file with salary/wage information • Employment contract • Cancelled checks/Direct deposit schedule Corporation Grantee Financial Accountability Seminar July 2007

18. Time & Activity Reporting Summary All salaries and wages charged to grants must be supported by signed time & attendance records, i.e., timesheets Exceptions: • State, Local and Indian Tribal governments must comply with requirements of OMB A-87 • Educational Institutions must comply with requirements of OMB A-21 {See Handout for specifics depending on Grantee Type i.e. State, Local and Indian Tribal Governments, Educational Institutions and Non-Profit Organizations} Corporation Grantee Financial Accountability Seminar July 2007

19. Identifying Documentation • Insurance policy • Paid invoices and receipts • Cost allocation plan Benefits Fringe benefits are allowable, provided such costs are absorbed by all organization activities in proportion to the relative amount of time or effort actually devoted Corporation Grantee Financial Accountability Seminar July 2007

20. Identifying Documentation Travel • Authorization/reimbursement request NB: You must have written policies and procedures on hand on how to authorize and reimburse travel • Paid invoices and receipts • Per diem rates (applicable for area) • Mileage calculation • Reconciliation of advances to payments Travel costs must not exceed charges normally allowed by the organization in its regular operations based on the organization’s written travel policy Corporation Grantee Financial Accountability Seminar July 2007

21. Identifying Documentation Supplies • Purchase orders • Packing slips • Paid receipts and invoices • Donated Supplies, i.e., in-kind Corporation Grantee Financial Accountability Seminar July 2007

22. Identifying Documentation Contract & Consultant • Purchase orders • Signed agreements • Paid invoices and receipts Maximum Allowed by CNCS for Consultant fee is $540 per day. In charging contract services it is important to differentiate among days of prep time, number of days of activity, travel and per diem where applicable. Corporation Grantee Financial Accountability Seminar July 2007

23. Identifying Documentation Training • Agenda • Course description, cost • Sign-in sheet • Consultant/Trainer agreement • Paid invoices and receipts • While the cost of the training, itself, is usually allowable, one cannot include the value of the time given by the attendees to participate. Corporation Grantee Financial Accountability Seminar July 2007

24. Identifying Documentation Evaluation • Purchase orders • Signed agreement/contract • Paid invoices and receipts • Final copy of the evaluation report Corporation Grantee Financial Accountability Seminar July 2007

25. Identifying Documentation Volunteer Costs* • Meal receipts • Uniforms invoices and receipts • Insurance invoices and receipts • Recognition invoices and receipts • Travel invoices and receipts • Physical Examinations invoices and receipts * Senior Corps only Corporation Grantee Financial Accountability Seminar July 2007

26. Identifying Documentation Member Match • Member eligibility • Signed member contract • Member timesheets signed by both member and supervisor • Documented pay system • Signed mid-year and final member evaluations • Were donations received with restrictions on their use, or on the time of their allowable use? Can grantee use cash contribution for a prior period retroactively of member cost or not? Were contributions received timely and used during the course of the award, or only at the end of it? Corporation Grantee Financial Accountability Seminar July 2007

27. Program Match Requirements (SEE HANDOUT SUMMARIES) Corporation Grantee Financial Accountability Seminar July 2007

28. More Technical Talk: Match Requirements • Minimum matching amount the law requires a grantee to provide • Minimum matching amount established by CNCS regulations that may be higher than the statutory requirement • Amount of match grantee provides based on budget, budget narrative, and program narrative contained in grant application; may be greater than statutory or regulatory required match Statutory Regulatory Budgeted Corporation Grantee Financial Accountability Seminar July 2007

29. Sustainability for AmeriCorps and Service Learning: The Ultimate Goal Mature Program/Project New Program/Project Grantee Share CNCS Share Grantee Share CNCS Share Corporation Grantee Financial Accountability Seminar July 2007

30. Valuing In-Kind Donations • Use Fair Market Price • Consider what it would cost to obtain similar good or service • Value of donation should be placed by the donor • Review donation letter or form to ensure the value is reasonable and compare with other estimates or bases for value Corporation Grantee Financial Accountability Seminar July 2007

31. Documenting In-Kind Contributions Document in-kind contributions to show: • What service or goods were obtained • Why transaction is allowable for grant purposes • The value of the contribution • How it is traced back to source documentation If audited, a grantee may be required to obtain full supporting documentation from all donors if not available during the audit. Corporation Grantee Financial Accountability Seminar July 2007

32. Documenting In-Kind Contributions • Document the basis for determining value of personal services, material equipment, building, and land • Obtain written acknowledgement of the contribution including: • Name and signature of donor • Date and Location of donation • Detailed description of item/service • Estimated value of contribution, how value was determined, who made the determination • Was the contribution obtained with Federal funds *** Keep a copy of the receipt in your files *** Corporation Grantee Financial Accountability Seminar July 2007

33. Sample 1: In-Kind Contribution Form See Handout Corporation Grantee Financial Accountability Seminar July 2007

34. Sample 2: In-Kind Contribution Form See Handout Corporation Grantee Financial Accountability Seminar July 2007

35. Exercise In-Kind or Not? Corporation Grantee Financial Accountability Seminar July 2007

36. Common Audit Findings Related to Cash & In-Kind Match See Handout Corporation Grantee Financial Accountability Seminar July 2007

37. Summing it up: In a Nutshell Source Documentation: • Familiarize all staff with cash and in-kind match documentation requirements • Ensure supporting documentation relates directly to approved program funded by the CNCS grant • Establish documentation for expenditure requirements to ensure costs are: reasonable, necessary, allocable, allowable, and adhere to grant guidelines • Maintain proper records and establish a written record retention policy Corporation Grantee Financial Accountability Seminar July 2007

38. Questions Electronic copies of this material can be found at The Resource Center http://nationalserviceresources.org/ Search for Financial Accountability Seminar

39. !! PARTICIPANT NOTICES !! • CERTIFICATES FOR TRAINING: All participants who attend and complete three or more sessions of the Financial Accountability Seminars can pick up a certificate of participation Sunday afternoon, Monday or Tuesday morning. • CFO – OIG – OGM SUNDAY CLOSING PLENARY: Please attend the Plenary Session [Sunday 3:15 –Salon G] with Jerry Bridges, Carol Bates and Peg Rosenberry to hear about OIG audit plans, address issues that arose during the day and learn about upcoming changes in grants policy. • RESOURCE TABLE: Please take advantage of this opportunity to meet with and discuss your questions and concerns with our experts who include presenters and a special guest from the Division of Payment Management at HHS. Corporation Grantee Financial Accountability Seminar July 2007