silc-net presents financial management presentation to the
TRANSCRIPT
1111
Financial Management
Presentation to the PennsylvaniaSILC
Presented by:
Melissa Glisson & Tim Glisson
August 24-25, 2010
SILC-NET Presents
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Overview of Materials
&
Agenda
Session Two
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OPERATIONALIZING EFFECTIVE
SILCs - Manual
Ch.1 – SILC Duties & Responsibilities
Ch.2 – Managing SILC Finances
Appendix A – RSA Responses to NCIL
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FINANCIAL MANAGEMENT for
CILs - Manual
Ch 2: Accounting Basics &
Regulatory Requirements
Ch 4: Financial Statements
Ch 6: Internal Controls
Ch 10: Fiscal Oversight
Ch 11: Independent Audit
Ch 13: Board’s Role in Fundraising
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FINANCIAL MANAGEMENT for
CILs – Manual, cont’d.
Appendix A - M
– Financial Statements
– Accounting Procedures Manual
– Cost Allocation Plan
– Conflict of Interest Policies
– Staff Time Sheets & more…
SILCSILCSILCSILC
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Session Seven
General Fiscal Requirements
& Management
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Fiscal Terms
Program Income
Income received by the grantee directlygenerated by the supported activity or earnedas a result of the grant.
Award
Financial assistance that provides support toFinancial assistance that provides support toaccomplish a public purpose (i.e. grants).accomplish a public purpose (i.e. grants).
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Fiscal Terms I
Direct Cost
Cost expenses that can be identified specificallywith a particular cost objective.
Indirect Cost
Expenses for common or organization wideobjectives that cannot be assigned to or readilyidentified with a specific grant award.
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Fiscal Terms II
Accrual Basis of Accounting
Record revenues when earned &expenses when they result in liabilities.
Internal Controls
Policies for proper record keeping &
minimizing theft, fraud, and mistakes.
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Fiscal Terms III
Allocable
- Costs distributed to multiple awards &benefits account charged in proportionto benefit provided. Benefit award &other work.
Allowable
- Costs that are not otherwise prohibitedfrom recovery by state law, regulation,or grant guidelines.
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Fiscal Terms IV
Pass-through Funds
Funding awarded to a recipient organization(CIL) and then, awarded to another entityresulting in a sub-recipient.
Pass-through Entity
A non-Federal entity that provides a Federalaward to a sub-recipient entity to carry out aFederal program. Must monitor subawards toensure audit compliance.
(OMB A-110)
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Fiscal Terms V
GAAP (Generally AcceptedAccounting Principles)
The basis of all accounting; used to prepare,present, and report financial statements.
FASB (Financial AccountingStandards Board)
The highest authority establishing GAAP fororganizations.
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Fiscal Terms, cont’d. 6
Cognizant Federal Agency
The Federal agency that provides thepredominant amount of direct Federalawards. Assigned by the Office ofManagement and Budget; CILs often DOE.
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Financial Management Standards
Regulatory Guidelines
Best Practices
&
Accounting Principles
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“The applicant will practicesound fiscal management “
Rehab. ActSec. 725 Standards & Assurances
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Financial Management Standards I
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Financial Management StandardsII
Transparency
&
Accountability
ARE KEY !
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Financial Management StandardsIII
Systems Must Provide:
Accurate
Current
&
Complete Disclosure(OMB A – 110)
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Financial Management StandardsIV
3 Objectives of Financial Management
Effective & Efficient Operations- You
Reliable Financial Reporting- Public
Regulatory Compliance- Law
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Financial Management StandardsV
Clear Paper Trail (74.22)
Allows auditors and federal reviewer(s) tofollow money from its point of award to:
- Receipt of Cash
- Drawdowns
- Expenditures
- Cash after Expenses
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Financial Management StandardsVI
Source Documentation A-110
Documentation shows:
- expenses (all)
- justification (i.e. travel; Part B activity)
- funding source
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Financial Management StandardsVII
Internal Controls
Policies to ensure federal fundssafeguarded
Separation of duties (priority control) forapproving purchases, check signing,checks & balances
Conflict of interest
Independent Audit…and more.
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Everyone Needs The Basics
Board of Directors
Executive Director & Fiscal Staff
Leadership Team
Staff
Financial Management StandardsVIII
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Efficient Accounting System
User & System Friendly
Meets Needs of Agency
GAAP
Financial Management StandardsIX
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Financial Management StandardsX
Contract & Grants Management
Reporting
– Accurate & Timely
Oversight
– Internal (administrator)
– External
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Standards Summary
Four
Money Matters
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Standards Summary I
1. Federal funds ONLY for expendituresand activities described in goals &objectives of approved contract.
2. Fiscal control & accounting proceduresmust ensure proper disbursement of,and accounting for, federal funds.
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Standards Summary II
3. When In Doubt…
Check It Out
….Get it in Writing!!
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Standards Summary III
4. Relationships are Critical!
Make Them
Maintain Them
Use Them
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Policies Procedures ManualModel
Accounting & Financial
Policies & Procedures
Manual
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Policies Procedures ManualModel II. Board Roles & Responsibilities
II. Accounting Procedures
Chart of Accounts
Income & Expenses
Banking Procedures
III. Financial Management
Revenue & Expense Classification
Budget Management
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Policies Procedures ManualModel II
IV. Financial Reporting
Annual Budget
Contract Requirements & Audit
V. Payroll Policies
Independent Contractors
Personnel Policies
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Session Eight
Regulatory
Agencies Overview
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Regulatory Agencies Overview
“The Act” The Rehabilitation Act
CFR Code of Federal Regulations
EDGAR Education DepartmentGeneral AdministrativeRegulations
OMB Office of Management & Budget
FASB Financial Accounting StandardBoard
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“TheAct”
EDGAR
34 CFR
OMB Circulars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB116 - 117
EDGAR
34 CFR
OMBCirculars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB & GAAP
TheAct
Regulatory Agencies Pyramid -Overview
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Purpose: To empower individuals withdisabilities
1973 - Enacted
1977 – IL Regulations Authorized
1992 - Reauthorized
1998 – Absorbed into WorkforceInvestment Act – Title IV
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The Rehabilitation Act Timeline
36363636
The Rehabilitation Act Titles
Title I – Vocational Rehab Services
Title II – Research & Training
Title III – Professional Development &Special Projects
Title IV – Nat’l Council on Disabilities
Title V – Rights & Advocacy
Title VI – Employment Opportunity
Title VII – Independent Living Services
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Code of Federal Regulations(CFR) Overview
Text of federal agency regulationorganized (codified) in a singlepublication.
50 Titles - broad subjects of FederalRegulations – Education 34th.
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CFR Overview, cont’d.
Independent Living Regulations
Title 34 CFR Sections 364; 365; & 366
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Education Department General
Administrative Regulations (EDGAR)
Overview
Contains regulations for administeringdiscretionary & formula grants awardedby D.O.E.
Regulations in Title 34 of CFR, parts 74-99; collectively known as “EDGAR.”
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Part 74 – Uniform AdministrativeRequirements
Part 75 – Federal Grant Programs
Part 77 – Federal Grant Definitions
Part 82 – Lobbying & Advocacy for E.D.Grantees
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EDGAR Parts 74, 75, 77, & 82Overview
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Ensure federal grants managed properly &
according to applicable laws & regulations
Publishes daily circulars
Part of Executive Office of President of U.S.
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Office of Management & Budget(OMB) Overview
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A – 110 Uniform AdministrativeRequirements
A – 122 Cost Principles
A – 133 Independent Audits
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OMB Circulars Overview
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The Financial Accounting Standards Board
(FASB) a private, not-for-profit organization. Primary
purpose - develop generally accepted accounting
principles (GAAP) in the public's interest (U.S.)
The Securities Exchange Commission (SEC)designated the FASB responsible for setting accountingstandards for public companies in the U.S.
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Financial Accounting StandardsBoard Overview
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116 – Contributions
117 – Financial Statements
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FASB Overview
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“TheAct”
EDGAR
34 CFR
OMB Circulars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB116 - 117
EDGAR
34 CFR
OMBCirculars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB & GAAP
TheAct
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Regulatory Agencies Pyramid,Revisited
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Session Eleven
Important Used SILC
Fiscal Regulations
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Regulatory Agencies
“CAN WE DO THAT ? ”
Where Do We Look?
&
Why or Why Not?
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“TheAct”
EDGAR
34 CFR
OMB Circulars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB116 - 117
EDGAR
34 CFR
OMBCirculars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB & GAAP
TheAct
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Regulatory Agencies – Order ofPrecedence
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EDGAR
34 CFR
OMBCirculars
364 - 366
74, 75, 77, 82
A-110, A-122 & A-133
FASB & GAAP
State Law State LawTheAct
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Order of Precedence, cont’d.
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Title VII - Part B
Innovation & Expansion
Social Security Reinvestment Fund
Other Federal, State or Private
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The Rehabilitation Act Sourcesof SILC Funding
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Title VII – Part B
Section 713
“The State may use funds received underthis part to provide the resourcesdescribed in section 705 relating to theSILC.”
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Sources of SILC Funding I
52525252
Innovation & Expansion Funds
Section 108 says Innovation & ExpansionFunds can be used for:
Innovative ways to expand andimprove VR, and
to support the SRC and SILC.
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Sources of SILC Funding II
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Social Security Reimbursement Funds
Section 108; States can use Social SecurityReimbursement Funds (SSRF) in support ofSILCs and IL services.
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Sources of SILC Funding III
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Part 74 – Uniform AdministrativeRequirements
Part 75 – Federal Grant Programs
Part 77 – Federal Grant Definitions
Part 82 – Lobbying & Advocacy forD.O.E. grantees
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Education Department GeneralAdministrative Regulations
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Uniform Administrative Requirements
Standards for Financial Management
Program Income Accounting
Written Procedures
OMB 122 Compliance
Record Retention
Required filingsSILCSILC--NET at ILRUNET at ILRU
EDGAR 74
56565656
Allowable Uses of Program Income
Used to further project or program
Used to finance non-Federal share
Deducted from total allowable costs
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EDGAR 74 - I
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Financial Management Systems must be:
Accurate
Current
Complete Disclosure
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EDGAR 74 - II
58585858
Requires written procedures:
Reasonableness
Allocability (aka “Cost Allocation”)
Allowability
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EDGAR 74 - III
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Application Notice
Selection Procedures
Conflict of Interest
Use of Consultants
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EDGAR 75
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Grantees may not permit a person to makean administrative decision if;
they or family directly benefit
they are a public official
has family or business relationship with
the grantee
motivated by personal gain
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EDGAR 75 - Conflict of Interest
61616161
Form 990 asks for written:
Conflict of Interest Policy
Procedures for identifying and dealingwith conflicts of interest.
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Conflict of Interest
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No Using Federal $$$
to Lobby for Federal $$$!
EDGAR 82 places restrictions ongrantees against using Federal funds forinfluencing Federal officials or CongressPeople in connection with awardingFederal funds
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EDGAR 82
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Attempts to influence legislation
Attempts to influence legislators
Attempts to influence elections
Contributions to political parties
Formation of lobbying organizations
Says Federal $$s Can’t Pay for:
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OMB A-122
64646464
provide assistance or advice to
legislators in response to a written
request
provide non-biased analysis
provide information about your own
agency
SILCs Can Advocate:
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The Act
65656565
Direct Lobbying – state a position onlegislation
Grassroots Lobbying – “call to action”to influence legislation
SILC/non-profits Can Use a Portion ofnon-Federal $ For:
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Internal Revenue Code (IRC)
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“Substantial Part Test” – not more than 5%
501 (h) Election – Up to 20% of funds
How Much $$?:
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IRC
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A – 110 Uniform AdministrativeRequirements
A – 122 Cost Principles
A – 133 Independent Audits
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OMB Circulars
68686868
Standards for Financial Management
Systems
Award payment
Cost Sharing or Matching
Procurement procedure
Financial reporting
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OMB Circular A-110Uniform Administrative Requirements
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Determine costs of the award so:
Grant is managed properly
Government bears its fair share
Money is spent legally
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OMB Circular A-122Cost Principles
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Allowable
Reasonable
Allocable
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OMB Circular A-122Cost Principles I
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Allocable & Allowable doesnot mean
Reimbursement!!
…HMMM.
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OMB Circular A-122Cost Principles II
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Direct Costs
Can be identified specifically to a finalcost objective.
project
service
direct activity
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OMB Circular A-122Cost Principles III
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Costs are Allowable if:
Reasonable for the award’s performance
Adequately documented
Consistent
In accordance with GAAP
Conform to cost limitations / exclusions
Time frame appropriate to contract
OMB Circular A-122Cost Principles IV
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Reasonable
Costs incurred with proper considerationof the circumstances prevailing at thetime.
OMB Circular A-122Cost Principles V
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Considerations when making judgmentsabout reasonableness:
prevailing circumstances
ordinary and necessary
laws and contracts
responsible and prudent
OMB Circular A-122Cost Principles VI
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Indirect Costs
Incurred for common cost objectives, notassigned to specific cost objectives.
OMB Circular A-122Cost Principles VII
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Allocable
Consistent w/other costs &:
- Incurred specifically for award
- Benefits award & other work
- Distributed in reasonable proportion to benefitsor;
- Necessary to overall operation, not to a specificcost objective
OMB Circular A-122Cost Principles VIII
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Cost Allocation Plan (CAP):
EDGAR 74.21 & OMB A-110, A-122 (approved
by Cognizant Agency)
- “Designed to provide that the FederalGovernment bear its fair share of the costsexcept where restricted or prohibited bylaw”
•Financial “blueprint “ for agency
OMB Circular A-122Cost Principles IX
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Cost Allocation Plan (CAP):
Simplified (Indirect Cost Rate)
Special Indirect Cost Rate
Multiple
Direct- preferred method
* Model CAP Appendix G Financial Management Manual
OMB Circular A-122Cost Principles X
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Section 725 of the Act.
Single Audit Act mandates audit for agencies
receiving $500,000 or more in federal funds.
Allowable expense for agencies required
(133.230).
Also EDGAR 34 CFR 74.26
OMB Circular A-133Independent Audits
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Contributions
Pledges
Donor Conditions
Donor Restrictions
FASB 116Accounting Principles
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Financial Position
Activities
Functional Expenses
Cash Flows
Financial Disclosures
FASB 117Financial Statements
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Annual federal tax return form whichmust be filed
Failure to file penalties
Conflict of Interest
Form 990
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Annual grant performance status report tocognizant agency that helps to ensure:
Expenses are recorded
Funds are spent in the given grant
period
Form SF-269
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Document Parts/Title Web Address
IL Regs 34 CFR 364-366 http://www.gpoaccess.govEDGAR 34 CFR Parts 74, 75, 77, 82, http://www.ed.gov/policy/fund/reg/edgarReg/edgar.htmlOMBCirculars:A-110 Uniform Administrative
Requirementshttp://www.whitehouse.gov/search/site/A-110?filters=im_og_gid:10275
A-122 Cost Principles for NonprofitOrganizations,
http://www.whitehouse.gov/omb/fedreg/2005/083105_a122.pdf
A-133 Audits of States, LocalGovernments, and Non-ProfitOrganizations
http://www.whitehouse.gov/omb/circulars/a133/a133.pdf
Other:
FASB 116 Contributions http://www.gasb.org/pdf/fas116.pdfFASB 117 Financial Statements http://www.1800net.com/nprc/fasb117.html
Advocacy & Lobbying http://www.muridae.com/nporegulation/lobbying.htmlCost Allocation http://www.ed.gov/programs/cil/legislation.htmlIRS Form 990 http://www.irs.gov/pub/irs-pdf/f990.pdfIRS Form 269 http://www.irs.gov/pub/irs-utl/sf269-blank.pdf
IL Regs, EDGAR, OMB CircularsFASB, & More
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Support for development of this training was provided bythe U.S. Department of Education, RehabilitationServices Administration under grant numberH132B070003-09. No official endorsement of theDepartment of Education should be inferred. Permissionis granted for duplication of any portion of thisPowerPoint presentation, providing that the followingcredit is given to the project: Developed as part ofthe SILC-NET, a program of the IL NET, anILRU/NCIL/APRIL National Training andTechnical Assistance Project.
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