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Managing Government Grants: Do The Right Thing!. Session 1: July 29, 2014 2p-3p GETTING SPEEDY GRANT PAYMENT & KEEPING THE MONEY!. Welcome, Introductions &. Ground Rules Keep your phone on mute please Be ready for polling questions Feel free to e-send questions during presentation - PowerPoint PPT Presentation
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Managing Government Grants:
Do The Right Thing!Session 1: July 29, 2014 2p-3p
GETTING SPEEDY GRANT PAYMENT & KEEPING THE MONEY!
Welcome, Introductions &
• Ground Rules– Keep your phone on mute please– Be ready for polling questions– Feel free to e-send questions during presentation– The only silly question is the one not asked!• You are all safe with us! We truly have seen it all!
General Government Contract Assumptions Here
• Awards assumed to be reimbursement based• Requests for payment or “draws on award”
presumed being submitted to a government agency, subject to processing effort and after-the-fact audit ability
• Award payments can and will be requested to be repaid if noncompliance is found
• You may be new at this… or maybe not• Goals here: timely payment which is kept!
Focus of Today: Design of Your Grant Financial System
Being Effective Means: Be Proactive
• Meet your Bookkeeper, Fiscal Officer, Controller, CFO – whatever you call them.
• Include them upfront!• Here’s what they feel like
when you or your management team leaves surprises in the budget proposal submitted with grant request
Being Effective Means: Be Proactive• Design your accounting
system & process to “get” (capture) the necessary information upfront– Consider chart of
accounts– Consider – expense? Or
asset” Capture both!• Also capture
grant/funder (QB-Class)– Use ALWAYS (bills, aje’s)
“Who Does That?”
• Executive Director PLUS • Program Manager PLUS• Fiscal
Officer/Controller/CFO PLUS
• You!• You get together, talk it
through, plan it, do this with each such grant & follow the plan(s)!
Being Effective Means: Be Proactive• We understand many such
grants are “continuations” of prior contracts. But..make NO assumptions!
• Each authorizing person must be able to “code”
• From start, each such person must be knowledgeable of:– the portion of expense that may
be allowable/covered,– the work they hire, through
vendors & contractors , & – what other expenses/costs are
covered.
Being Effective Means: Be Proactive
• Make sure the FULL team knows and obtains before check(s) are cut: – what paperwork is
needed to prove services were provided/fulfilled, inspected, as specified
– what documentation is needed to support their “allowable” nature
Being Effective Means: Be Proactive
• As time & work progress, Finance is receiving originals of vendor bills, with proof of vendor’s “compliance,” with transactions properly coded on their face
• All of Finance Team knows same – so they can review and record transactions as indicated, which is correct! AND THEY RECORD IT LIKE THAT!
Work of ‘humans’ is usually the largest covered cost
• Their coverage is ALL a function of how they spend their time/effort
• What criteria must be met to ensure “allowable cost”?
• Bid? RFQ? RFP?• Equal Opportunity?• Contractor = licensed?
Bonded? insured? W/C?• Independent?
Financial Architecture of NPO• For non-accountants:– Account means, think row– Funder/Program/Grant,
think column– Create as much detail as
needed to properly capture what reporting is needed
– Truly, you must “Begin with the end in mind.”
CDBG 14/15Foundation B-X
Program
Program expenseConstruction Contractor Expense 10,000 Professional Contractor Expense 7,500
Supplies Expense 2,200
Occupancy expense
Rent 300 300
Utilities 100 100
Sample CDC Coding • Construction contractor
expense:
• Supplies expense:
• Professional contractor expense:
• (On p&l) Program expense – Construction expense; Funder/Grant – Project 2014-B– Associated with proper vendor
• (On p&l) Program expense – Supplies expense; Funder/Grant- Project 2014-B– Associated with proper vendor
• (On p&l) Program expense – Professional expense; Funder/Grant – Project 2014-B– Associated with proper vendor
Sample CDC Coding • Construction contractor
expense:
• Supplies expense:
• Professional contractor expense:
• Program expense – Vendor name only used to “cut
check”– No fund/grant associated
• Supplies expense– No vendor name associated– No fund/grant associated
• Professional expense– No vendor name associated– No fund/grant associated
During each month…• Obtain bills, code them
properly on their face• Make necessary copies
during “single touch”• Make sure employee &
supervisor approves each timesheet – with original signature
• Make sure information on deliverables (inspections, lien waiver, etc.) are gathered, attached
• File consistently
POLL!
• Whose payment request process tells the entire story on its face?
• __ “Mine! Ours!”• __ No! – things change
too fast around here, we prepare this stuff when draw request is prepared…
• __ What’s a payment request process?
Being Effective Means: Begin with the End in Mind
• Ramping up means:– Make sure your Finance
Leader reviews the proposal BEFORE it is submitted
– Build in enough time to get right person (employee or contractor)
– Make sure needed documentation is gathered before payment issued!• e.g. Bad 1099 examples
Being Effective Means: Begin with the End in Mind
• Ramping up means:– What categories are
covered?– How are vendors
selected?– Who can spend? On
what vendors?– Who receives the bills? – Who can approve the
bills?– How is data entered into
accounting system?
Being Effective Means: Begin with the End in Mind
• Ramping up means:– Do ALL program staff
know exactly what paperwork you need from them for the financial submission?• And for proof of allowable
cost?• And for proof of
deliverables generated? • All required
documentation is obtained & filed at present time
Being Effective Means: Begin with the End in Mind
• If I had a dollar for each time..– A program manager
came to me asking me for a report of all allowable costs – that they never told us about• Then I could fly all of you
here for a free visit, hotel stay, food, drinks & fun
THIS GUY THOUGHT HE COULD HANDLE IT TOO!
BUT, DO Start with the end in mind – Do NOT leave money on the table!
• Ramp up before hand, plan, perform & spend on time, across the contract period. • Don’t gamble! Bad odds
POLL!
• How many of you, at current organization or a previous one, have experienced a disallowance?
• __ Yes!• __ No!• __ Like what?
Being Effective Means: Put 1st Things 1st
Pace Yourself• Make sure all necessary
documentation is obtained NOW, as you go
• Know exactly what is covered, when, get it now
• Create checklists by month
• Make copies when you are touching the transactions; touch once
Put 1st Things 1st
Pace Yourself
• Getting copies of cancelled checks or other payment proof when receiving, processing & reconciling bank statements
POLL!
• How many of your Finance Teams issue program management reports?
• __ Yes – Monthly • __ Yes – on Request• __ No – they used to
but no one looked at them
• __ What are program reports?
POLL!
• How many of you understand what you are reading when you look at a program report?
• __ Yes – ME! • __ Yes – Kinda• __ Yes – when they go
over them with me• __ No, that’s Finance’s
job…
POLL!
• How many of your organizations have a Program Committee of the Board that sees the reports?
• __ Yes – Us!• __ Yes – we have a
committee, but they don’t like financial reports
• __ No, that’s Finance Committee’s job
Put 1st Things 1st Is it Working?
• Review account & funder/grant/program coding with each processing period
• Get reports at least monthly; are they working for you?
• Don’t waste $ & time on unallowed costs– How often do you see
Mr. Coyote actually eat?
Put 1st Things 1st Is it Working?
• Prepare & submit the submissions promptly– Prepare request quickly, – Compare to costs incurred
in Accounting System; make necessary adjustments
– Processing by government offices already slow; don’t add to that misery with slow submissions
Put 1st Things 1st Is it Working?
• How IS your financial reporting?– Monthly– Balance sheets– P&L vs budget– Cash flow statement– Key/significant programs
reporting– Read?– Understood– Action items?
Put 1st Things 1st Is it Working?
• Have you periodically pulled the backup to 3 to 5 material transactions and tested:– Do you have all the
required documentation?– Does the documentation
tell the story?– How is your system doing?
Put 1st Things 1st Is it Working?
• What is the depth of your Finance Team? – Can they win the game?
• How interactive is your auditor?– Have they interviewed staff?
Conducted fraud interviews? Met with the upper management team to review the results? Met with the board – to review the audit & the management letter?
Put 1st Things 1st Is it Working?
• What is the financial skill set of your upper management team?
• What is the financial skill set of your board?
• What is the financial skill set of your Finance Committee?
• Is there a culture of healthy questioning?
Do The Right Thing! Means What?
• Have the knowledge of what is right, proper according to the contract
• Start it that way, end it that way– Follow through!
• Do what is right, proper• Have proof that you did
what was right & proper
Do The Right Thing! Means What?
• But know this - You will be remembered for the last thing that you (& your CDC) did…
Wrap Up, Conclusion, Next Steps
• Contact your LISC Representative• Joanne with confidential, off-line questions (
joannemh@yourbeancounters.com)• Upcoming programs!
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