Financial Management
North Central National Service Training
August 20 – 22, 2013
You need to know . . .

Use of program regulations, NGA, terms and conditions,
and operations manuals (CNCS)

OMB Circulars
www.whitehouse.gov/omb/circulars/index.html

Use of Generally Accepted Accounting Principles
(GAAP)

Communication between program and fiscal staff
North Central National Service Training August
20 – 22, 2013
Welcome . . .

Introduction of trainer

Program types represented


Senior Corps: RSVP, FGP, SCP
Questions

As we go . . . ask clarifying questions and provide
your experiences
North Central National Service Training August
20 – 22, 2013
Contacts
Grants Management Specialist
States
Sheila Mullin
smullin@cns.gov
215-964-6320
IL, IN, WI, NE (MI- FGP-SCP)
Jeffrey Montgomery
jmontgomery@cns.gov
215-964-6337
MN, ND, SD, OH, IA (MI-RSVP – VISTA)
Anthony DeColli (Senior Grants Officer)
adecolli@cns.gov
215-964-6311
Available for all North Central States when
GMS is out.
North Central National Service Training August
20 – 22, 2013
North Central National Service Training August
20 – 22, 2013
EFFECTIVE
FINANCIAL
8. Managing
Cash
MANAGEMENT
7. Matching
Requirements
& In-kind
Contributions
5. Budget
Controls
6. Documentation
of expenses
North Central National Service Training August
20 – 22, 2013
Key Characteristics of Organizations with
Highly Effective Financial Management:






Written and followed policies and procedures
Qualified and trained financial staff
Effective communications
Succession planning and cross-training
Self-assessment and continuous improvement
Active, knowledgeable and informed Board and finance
committee
North Central National Service Training August
20 – 22, 2013
Regulations and
Requirements
North Central National Service Training August
20 – 22, 2013
Federal Regulations
Universities
States, Local,
Indian Tribal
Governments
Non-Profits
Hospitals
Administrative
Requirements
§ 45 CFR 2543
§ 2 CFR 215 (formerly
§ 45 CFR 2541
OMB A-102
§ 45 CFR 2543
§ 2 CFR 215
§ 45 CFR 2543
§ 2 CFR 215
(formerly A-110)
(formerly A-110)
Cost Principles
§ 2 CFR 220 (formerly
§ 2 CFR 225 (formerly
§ 2 CFR 230
§ 45 CFR 74
A-21)
A-87)
(formerly A-122)
(HHS regulations)
OMB A-133
OMB A-133
OMB A-133
OMB A-133
Federal
Grant Guidelines
Audit
Requirements *
A-110)
Notes: CFR = Code of Federal Regulations
* = Organization is subject to A-133 if it expends more than $500,000 in
Federal funds in its fiscal year
Locate Grants Management Circulars: www.whitehouse.gov/omb/grants_circulars/
North Central National Service
Training August 20 – 22, 2013
Basics of OMB Circulars
•
Cost Principles


•
•
Allowable & Unallowable Costs
Indirect Costs
Administrative Requirements

Accounting System

Documentation requirements
A-133 requirements
North Central National Service Training August
20 – 22, 2013
Cost Principles
• Provide guidance to determine the allowable costs that can be incurred
by organizations under Federal grants
• Designed so that Federal awards bear their fair share of costs
• Provide guidance about reimbursement requirements
• Provide uniform standards of allowability and allocation
• Encourage consistency of treatment of costs
Central National Service Training August
• Includes guidance on 54North
selected
20 – items
22, 2013 of cost
Allowable, Reasonable & Allocable
Allowable –A cost within award limitations
consistent, documented, reasonable & allocable
Reasonable - A cost that does not exceed what a
prudent person would do under the circumstances at
the time the decision
Allocable - Treated consistently with other costs
incurred for the same purpose in like circumstances
and benefits the award and can be distributed
proportionally to the benefits received
North Central National Service Training August
20 – 22, 2013
Administrative Requirements
• Provide consistency and uniformity among
Federal agencies in the management of
grants and cooperative agreements
• Require all Federal agencies to issue a
grants management common rule to adopt
government-wide terms and conditions
North Central National Service Training August
20 – 22, 2013
Policies and Procedures
North Central National Service Training August
20 – 22, 2013
Policies & Procedures
• Policies and procedures are a set of written documents that
describe an organization's policies for operation – “what is
to be done” the procedures necessary to fulfill the policies –
“how it is to be completed”
• All staff must be familiar with these documents
• Documents must be kept up-to-date
• Documents should explain the rationale and include
principal transactions and completed forms
• Documents must incorporate Federal and CNCS grant
regulations and provisions
North Central National Service Training August
20 – 22, 2013
LEAVE POLICY
North Central National Service Training August
20 – 22, 2013
Leave Policy


Many FGP/SCP sponsors provide Leave.
It is allowable to award leave to FGP/SCP volunteers as long
as:
o Leave paid with CNCS funding does not “cross” grant
cycles. i.e. No Carry-Over of unspent leave.
o Leave paid in subsequent years DOES NOT appear on the
budget (either as Fed or Non-Fed Match).
o Requires tracking leave across grant periods… this may
be too cumbersome for most grantees…
North Central National Service Training August
20 – 22, 2013
Leave Policy Cont.




Leave is a great way to reward/recognize volunteers
and retain their service.
It is allowable to utilize stipend funds to pay for leave
which occurs in the same grant year.
The best way to deal with unspent leave is to do an end
of year pay-out of all unused time.
By doing a pay-out you expend all grant funds in the
same period they were awarded.
North Central National Service Training August
20 – 22, 2013
Efficient Accounting
System
North Central National Service Training August
20 – 22, 2013
Efficient Accounting System
Requirements
• Distinguish grant verses non-grant related expenses
• Identify costs by program year & budget category
• Differentiate between direct and indirect costs
• Account for each award/grant separately
• Record in-kind contribution as both revenue & expense
• Provide management with financial reports at both the summary or
detailed levels that will compare outlays with budget amounts
• Correlate financial reports submitted to CNCS directly to accounting
North Central National Service Training August
information and supporting
documents
20 – 22, 2013
Internal Controls
North Central National Service Training August
20 – 22, 2013
Why Have Internal Controls?
• Improve accountability to constituents CNCS,
trustees, funders, public
• Help organization achieve performance &
budget targets
• Improve reliability of financial reporting
• Improve compliance with laws & regulations
• Prevent loss of resources & public assets
• Prevent loss of public trust
• Reduce legal liability
North Central National Service Training August
20 – 22, 2013
Who is Responsible?
Everyone within the organization has some role in internal
controls roles vary depending upon level of responsibility:
Executives establish the presence of integrity, ethics,
competence and a positive control environment
Directors and department heads have oversight
responsibility for internal controls within their units
Managers and supervisory personnel are responsible
for executing control policies and procedures at the detail
level within their specific unit
Each individual within a unit is to be cognizant of proper
internal control procedures associated with their specific
North Central National Service Training August
job responsibilities
20 – 22, 2013
A Good Control Environment Includes
 Positive “atmosphere” in the work environment
 Existence of a code of conduct and code of ethics
 Written job descriptions
 Timely/appropriate communications with Board
 Written policies to hire, train, promote and compensate
employees
 Safeguards for employees related to whistle-blowing
 A clear chain of command
North Central National
Training August
 Clear, written delegations
ofService
authority
& responsibilities
20 – 22, 2013
A Good Control Environment Includes
(cont’d)
 Written policies, procedures and processes
 Adequate review process for financial transactions, financial
reports, budgets, etc.
 Adequate cash management procedures (e.g., monthly bank
reconciliations by supervisory personnel)
 System to track participants’ & employees’ activities
 System to follow up on problems to ensure resolution
North Central National Service Training August
20 – 22, 2013
Prohibited Activities
While charging time to the Senior Corps program,
accumulating Service, or training hours, or
otherwise performing activities supported by the
Senior Corps Program, or CNCS, staff and
volunteers may not engage in the following
activities:
North Central National Service Training August
20 – 22, 2013
Prohibited Activities Cont.
Examples :
Political activities
Non-displacement of employed workers
Compensation for service.
Labor and anti-labor activity
Fair labor standards
Nondiscrimination
Religious activities
Nepotism.
North Central National Service Training August
20 – 22, 2013
Budget Controls
North Central National Service Training August
20 – 22, 2013
Grant Budget Preparation
Who should be Involved?
The budget process should be a team effort that includes:
 Board of Directors
 Executive Director
 Program/Project Director
 Program/Project Staff
 Fiscal Staff
North Central National Service Training August
20 – 22, 2013
Grant Budgets Preparation

Follow instructions in NOFO/NOFA

Organize narrative to fit budget categories on budget
form or proposal

Provide adequate descriptions and calculations to
support amounts
Ensure budget aligns with the application narrative
80:20 Direct Benefit Ratio (FGP & SCP)
Section II Subtotal
÷ CNCS Award Amount
North Central National Service Training August

20 – 22, 2013
Grant Budget Preparation

Qualities of an Effective Budget

Realistic

Consistent with organizational objectives


Flexible (amendable if conditions are not as
expected)
Consistent with Corporation goals
North Central National Service Training August
20 – 22, 2013
Grant Budget Preparation
Don’t forget…






Staff positions
Space, utilities, supplies, telephone
Medical and liability insurance
Uniforms and training
Transportation
Evaluations
North Central National Service Training August
20 – 22, 2013
Salaries & Wages Documentation
For most Senior Corps Grantees, the salaries & Benefits
section is one of the largest expense categories, if not the
largest.


It is critical to document properly…
But documentation will differ from organization to
organization.

North Central National Service Training August
20 – 22, 2013
Grant Budget Preparation

Organize narrative to fit categories on budget form

Provide adequate descriptions and calculations to
support amounts

Group related items (e.g., Staff salaries should be
grouped with staff benefits, FICA, etc.)

Compare the final costs to the narrative to ensure they
make sense
North Central National Service Training August
20 – 22, 2013
Examples of Unallowable Costs







Lobbying
Fines and penalties
Expenses not necessary to meet program objectives
Entertainment, alcohol
Costs that would constitute waste, fraud and abuse
Unreasonable costs from a “prudent person”
perspective
Costs with no logical basis for allocating to your
program
North Central National Service Training August
20 – 22, 2013
Grant Budget Preparation

Excess Column
•
Use of the Excess Column
•
Track total project costs
•
Fundraising
North Central National Service Training August
20 – 22, 2013
Budget: Final Review Checklist







Is there adequate explanation for budget items?
Are all projected costs in the budget allowable?
Have the appropriate fringe and indirect cost rates been used? Do
you have an updated copy to send with your Application?
Is the budget realistic, reasonable, credible, and aligned with
program goals?
Is the budget within the VSY limit for Fixed Grants?
Is your A-133 up to date in the Federal Audit Clearing House or
990 in GuideStar?
Is your organization's information up to date with the System for
Award Management (www.SAM.gov)?
North Central National Service Training August
20 – 22, 2013
Summary
Budgeting: The Road Map to Success
Know the Rules
of the Road
Where Are
We Going?
Preventive and Regular
Maintenance Check-ups
Keep You in the
Driver Seat
Are We There Yet?
Drive
Defensively
Bumps Along
the Road
North Central National Service Training August
20 – 22, 2013
Key Budgeting Tips

Check to ensure that required match is met

Be strategic when allocating funds to CNCS or grantee
share, some costs can be met with in-kind donations

Be aware of budget changes that require amendments

Identify In-kind donations prior to creating the budget
North Central National Service Training August
20 – 22, 2013
Grant Award





Notice of Grant Agreement (NGA)
Special Conditions
Grant Budget Amendments
Reporting
Terms and Conditions of Award

Prohibited Activities
North Central National Service Training August
20 – 22, 2013
Documenting Expenses
North Central National Service Training August
20 – 22, 2013
Documentation Basics
Why Retain Documentation?
•
To track incoming information
•
To review information
•
To provide historical evidence
•
To provide evidence of accomplishments
•
To prepare for an audit
Establish a written record retention policy
North Central National Service Training August
20 – 22, 2013
Budget Management
North Central National Service Training August
20 – 22, 2013
Budget Management
Grantees must obtain prior approval from CNCS for:

Subgrants or contracts not included in approved application and
budget

Specific costs described in the Cost Principles

For example: overtime pay, rearrangement and alteration costs,
and pre-award costs

Purchases of equipment over $5,000 using grant funds, unless
specified in the approved application and budget

Cumulative or aggregate budget line items that amount to 10% or
more of the total budget
North Central National Service Training August
20 – 22, 2013
Budget Revisions/Amendments


You can move funds between line items without approval from
CNCS when:
1) The total cumulative fund transfer will not exceed 10% of the
grant or $10,000

Does not apply to budgets of less than $100,000
2) The transfers would not create a new line item
3) Funds can be moved from “Volunteer Support” to “Volunteer
Benefits” but not vice versa

FGP and SCP must still meet the direct benefit ratio
Although CNCS approval is not required when these conditions
apply, it is a good practice to notify CNCS of any change to the
budget.
North Central National Service Training August
20 – 22, 2013
Budget Revisions

These revisions can be done any time during the
approved budget period.

CNCS approval is required when you do not meet
previously stated conditions.

Prevent major revisions and under spending by
reviewing your budget each month.
1.
2.
Approval required by the FFMC
Do not assume approvals have been granted unless documented
North Central National Service Training August
20 – 22, 2013
Financial Reporting and
Closeouts
North Central National Service Training August
20 – 22, 2013
Reporting Requirements
The Federal Financial Report (FFR)
- 6 month period
- Cumulative over 3-year grant
The Program Progress Report (PPR)
- Annual for all programs
- Supplemental semi-annual for stipend Programs
North Central National Service Training August
20 – 22, 2013
Before You Begin
Gather the following reports:
- Reports to support number of volunteers in reporting
period
-
Reports to support number of hours in reporting period
-
Financial report
-
Additional Documents (ex. In Kind)
North Central National Service Training August
20 – 22, 2013
Source Documents
(Invoices, Checks, Receipts, Timesheets, etc.)

Ensure proper and complete documentation in the files
to support all information reported in the FFR.

All financial reports should be prepared with information
that comes directly from the organization’s accounting
system.

Conduct a review and reconciliation of the information
to ensure accuracy prior to report submission.
North Central National Service Training August
20 – 22, 2013
FFR Screen Shots
North Central National Service Training August
20 – 22, 2013
FFR Screen Shots
North Central National Service Training August
20 – 22, 2013
FFR Screen Shots
North Central National Service Training August
20 – 22, 2013
Double Check the Figures
For example:
 Recognition
 Stipend hours match dollars spent
North Central National Service Training August
20 – 22, 2013
Federal Financial Report (FFR)

VSYs (FGP and SCP only)
 Cumulative hours for the budget period (common error)
 Cumulative hours ÷ 1044 = VSY Level
 Policy 850

Use of Prior Year Funds (Unallowable)
 Deobligation of funds

Late Reporting
Communication
 Extensions
 Consequences
 Withholding of Funds
 Risk Status

North Central National Service Training August
20 – 22, 2013
Federal Financial Report (FFR)

VSYs (FGP and SCP only)
 Cumulative hours for the budget period (common error)
 Cumulative hours ÷ 1044 = VSY Level
 Policy 850

Use of Prior Year Funds (Unallowable)
 Deobligation of funds

Late Reporting
Communication
 Extensions
 Consequences
 Withholding of Funds
 Risk Status

North Central National Service Training August
20 – 22, 2013
Highlights: Fiscal Responsibility

Overall compliance with State and Federal regulations

Accurate, timely and complete financial reporting

Tracking of budget to actual expenses

Ensure key staff understand roles, responsibility,
understand each other’s priorities and work together
North Central National Service Training August
20 – 22, 2013
Timing of Draws

Funds are intended to be available when needed.

Maintain minimum Federal cash on hand by requesting funds from
the Payment Management System only for immediate disbursement

Draws should match timing of allowable program expenditures.

Grantees may not draw funds in excess of their immediate needs

Funds can be drawn as needed:
 Example: Payroll to cover salaries and allocable payroll taxes
based on time charged to the Federally-funded program
North Central National Service Training August
20 – 22, 2013
Grant Closeout

Submission of final program and fiscal reports

FFR, 272, and draw down figures must reconcile

Property disposition
North Central National Service Training August
20 – 22, 2013
Questions?
North Central National Service Training August
20 – 22, 2013
Helpful Links
Description
Website Address
Financial and Grants Management
Resources
https://www.nationalserviceresources.org/financialand-grants-management
A-133 Federal Audit Clearinghouse https://harvester.census.gov/fac/
System For Award Management
www.sam.gov (must be updated yearly)
Payment Management System at
HHS
www.dpm.psc.gov
GuideStar
www.guidestar.org
OMB Circulars
www.whitehouse.gov/omb/circulars
Managing Senior Corps Grants
http://www.nationalservice.gov/build-yourcapacity/grants/managing-senior-corps-grants
North Central National Service Training
August 20 – 22, 2013