Playing by the Rules: A SILC Fiscal Guide to Spending Federal Money Part I – The Basics April 21, 2011 Presented by: T

1. Playing by the Rules: A SILC Fiscal Guide to Spending Federal Money Part I – The Basics April 21, 2011 Presented by: Tim and Melissa Glisson SILC-NET at ILRU Presents… 0

2. Playing by the Rules: A SILC Fiscal Guide to Spending Federal Money Part I – The Basics April 21, 2011 Presented by: Tim and Melissa Glisson SILC-NET at ILRU Presents… 1

3. Session Objective • Identify key components and best practices of effective general fiscal requirements and management.

4. Rehab. Act Sec. 725 Standards & Assurances “The applicant will practice sound fiscal management “

5. Financial Management Standards3 Outcomes of Financial Management • Effective & Efficient Operations- You • Reliable Financial Reporting- Public • Regulatory Compliance-Law

6. General Fiscal RequirementsWhy the Basics? • Understand budgets • Read and understand financial statements • Meet contract obligations • Respond appropriately to funders

7. Everyone Needs The Basics • Board of Directors • Council Members • Executive Director & Fiscal Staff • Leadership Team • Staff

8. Award Accrual basis of accounting Allocable Allowable Cognizant Federal agency Direct cost Indirect cost Internal controls Pass-through entity Program income GAAP Fiscal Terms

9. Overarching Principle One “The applicant will practice sound fiscal management “ Rehab. Act Sec. 725 Standards & Assurances

10. Overarching Principle Two Transparency & Accountability ARE KEY !

11. Overarching Principle Three Systems Must Provide: Accurate Current & Complete Disclosure (OMB A – 110)

12. Financial Management Standards -Clear Paper Trail(From EDGAR 74.22) • Allows auditors and federal reviewer(s) to follow • money from its point of award to: • Receipt of Cash • Drawdowns • Expenditures • Cash after Expenses

13. Financial Management Standards -Source Documentation (From OMB Circular A-110) Documentation shows: - expenses (all) - justification (i.e. travel; Part B activity) - funding source

14. Financial Management Standards -Internal Controls (OMB standards) Policies to ensure federal funds safeguarded Separation of duties (priority control) for approving purchases, check signing, checks & balances Conflict of interest Independent Audit …and more.

15. Financial Management Standards -Efficient Accounting System User & System Friendly Meets Needs of Agency GAAP

16. Financial Management Standards -Contract & Grants Management (OMB Circular A-110) Reporting Accurate & Timely Oversight Internal (administrator) External

17. Financial Management Standards -4 Money Matters Federal funds ONLY for expenditures and activities described in goals & objectives of approved contract. Fiscal control & accounting procedures must ensure proper disbursement of, and accounting for, federal funds.

18. Financial Management Standards -4 Money Matters, cont’d. When In Doubt…Check It Out ….Get it in Writing!! Relationships are Critical! Make Them Maintain Them Use Them

19. Questions and Answers

20. Internal Controls Policies & Procedures that… Protect the assets Provide consistency and operational efficiency Increase fiscal viability Uncover potential liabilities

21. Benefits of Internal Controls Assure fiscal prudence Safeguard assets Assure fiscal compliance & viability Set policy (board responsibility) Create checks and balances Required by funding sources

22. Internal Controls Policies Key Policy: Segregation of Duties Limits amount of fiscal activity controlled by any one person.

23. Internal Controls Policies, cont’d. Authorizing signatories Separating accounts receivable from accounts payable Segregating payroll from Human Resources Balancing cash and checking accounts Creating checks and balances

24. Internal Controls Policies, cont’d. 2 Inspecting payroll reports Recording cash: journal & general ledger Passwords whenever possible Petty cash limits Using P.O.s (purchase orders) Regular computer backups - offsite

25. Internal Controls: Reporting Level Board monthly financials Compare utilization data Balance GL monthly Quarterly finance committee meetings Time sheets / written OT authorization

26. Internal Controls: Board Level Accurate records of income/expenses Cost of programs and services Comparison of income/expenses Segregation of duties

27. Internal Audit Quality assurance process for the accounting department Assures timely and accurate recording of information Twice per year per program (minimum) Performed by audit committee, board or auditor

28. Internal Control Checklist:Check Signing & Payments  Expenditures approved in advance?  Requests for checks reviewed?  Check signer reviews and initials check register?  Larger checks require two signatures?  Checks pre-numbered?  Voided checks on file?  Bank statements & canceled checks received & reconciled?

29. Internal Control Checklist:Check Signing & Payments, cont’d.  List of unpaid invoices on file and reviewed periodically by ED?  Purchase orders pre-numbered?  Employees submit expenses & receipts on-time?

30. Financial Management Standards -Accounting & Financial Manual (OMB 110 – EDGAR 74) Excellent internal control tool Effective training tool Needs board approval Updated annually (at least) Must be used!!

31. Policies Procedures Manual - Model • Board Roles & Responsibilities • II. Accounting Procedures • Chart of Accounts • Income & Expenses • Banking Procedures • III. Financial Management • Revenue & Expense Classification • Budget Management • Purchasing Policies

32. Policies Procedures Manual -Model, cont’d. • IV. Financial Reporting • Annual Budget • Contract Requirements & Audit • V. Payroll Policies • Independent Contractors • Personnel Policies

33. Questions and Answers

34. IL Regs, EDGAR, OMB Circulars, FASB, & More

35. Wrap Up and Evaluation • Please complete the evaluation of this program by clicking here: https://vovici.com/wsb.dll/s/12291g49d9d

36. SILC-NET Attribution Support for development of this Webinar/teleconference was provided by the U.S. Department of Education, Rehabilitation Services Administration under grant number H132B070003-10. No official endorsement of the Department of Education should be inferred. Permission is granted for duplication of any portion of this PowerPoint presentation, providing that the following credit is given to the project: Developed as part of the SILC-NET, a project of the IL NET, an ILRU/NCIL/APRIL National Training and Technical Assistance Program.