Financial and Grants Management Institute - March 18-20, 20081 Avoiding Common Issues & Pitfalls.

Financial and Grants Management Institute - March 18-20, 2008 1

Avoiding Common Issues & Pitfalls


WELCOME !

• On your table, there is a little warm-up “Quiz”…..No worries – it will not be graded or turned in!

• There will also be a small group activity!


Session Objectives

1. Learn about the primary issues & pitfalls for national service programs

2. Understand the impact or consequence of each of the pitfalls

3. Understand how organizations can avoid these problem issues


Scope & Structure of Session

Common Issues address Corporation major programs:

AmeriCorps - State & National- VISTA

Senior Corps- Senior Companion- Foster Grandparent- Retired Senior Volunteer

Learn & Serve- School-based- Community-based- Higher Education


Issues & Pitfalls are Drawn From:

• Inspector General Audits– Agreed-Upon-Procedures

• Corporation staff site visits– Site review tools

• Corporation Standards Reviews of State Commissions– Administrative standards tools– External/internal review teams

• Grantee monitoring of subgrantees• OIG hotline calls


Framework for Issues or Pitfalls

• Description of the Issue & Finding

• Possible Consequences

• Preventive Actions


Common Issues or Pitfalls

• Participant eligibility• National Service Criminal History Check• Inappropriate time and activity records for staff time

charged on grant• Inappropriate time keeping for participants (members &

volunteers)• Inadequate or no documentation for match • Inappropriate in-kind donations documentation• Incomplete or non-existent reconciliation of financial

reports• Inadequate processes established for subgrantee

monitoring• Inadequate financial systems and internal controls• Lack of written policies and procedures• Program specific requirements


Participant Eligibility

Finding: Lack of Documentation of participants’ age; criminal record/sex offender check for work with children or vulnerable.

Or program specific eligibility:

AmeriCorps: US Citizen or Permanent Resident Alien

Senior Companion/Foster Grandparent: Income limitations


Participant Eligibility

Consequences: • All payments (any stipends/living allowances, health

and child care benefits, or participant reimbursements) may be disallowed.

• Education awards for AmeriCorps participants may be disallowed

• Extent and severity of findings could result in grant termination & other actions

• If all/most participants are undocumented or ineligible all funds provided under the grant may be disallowed


Participant Eligibility, Con’t.

Preventive Actions: • Be sure to document age eligibility• Be sure to conduct appropriate National Service Criminal History

Checks– Understand requirements for Staff & Participants with

involvement with children or vulnerable populations• Be sure to understand and document program specific participant

requirements for eligibility• Be sure to create written policies and procedures that clearly

delineate the requirements for eligibility, documentation, screening and maintenance of records

• Be sure to initiate necessary reviews, deciding eligibility and final signoff for “hiring”

• Be sure to incorporate internal controls which provide review of decisions and documentation by the Project Director in addition to someone else.


Time & Attendance – Staff Activity

• Finding: Inadequate time and activity documentation to support charges to the grant.

Salaries and wages charged to the grant• On the basis of budgeted amounts or

• Based on estimates or

• On the basis of grant activity only or

• Unsigned timesheets or

• Time not allocated among activities


Time & Attendance – Staff Activity Con’t.

Consequences: Entire claimed salaries & wages over the course of the grant maybe disallowed over the course of the grant.

• Understand Federal requirements for timekeeping by organization type:– Nonprofit Organization - § 2 CFR 230 (formerly OMB A-122) – Educational Institutions – § 2 CFR 220 (formerly OMB A-21)– State, Local & Indian Tribal Gov’ts - § 2 CFR 225 (formerly OMB A-87) Salaries, Wages & Fringe benefits must be:– Reasonable (consistent with that paid for similar work)– Allocable (incurred specifically for grant)– Allowable (no unallowable activities such as fundraising and

lobbying)


Time & Attendance – Staff Activity Con’t.

Preventive Actions: Use timesheets aligned with the payroll period which provide information on all activities of the employee, both on the grant and other projects/ functions.

Support for salaries & wages charged to grant:

• Documented payroll reports approved by responsible official of the organization

• Time and activity report for employee time allocated to grant as Federal cost or match:– After-the-fact determination of actual activity– Account for total activity of each employee– Signed by employee or responsible supervisor knowledgeable about

employee’s activities– At least monthly & coincide with one or more pay periods


Do-Good Nonprofit BI-WEEK LY TIME SHEET1234 United Blvd.

Dogood, TX 75555

Telephone: (214) 111-4444; FAX: (214) 222-5555

Employee Name:

Title: Pay Period Ending:

Department: Supervisor:

Task or Grant Project S M T W TH F S S M T W TH F S Total Hrs.

Senior Companions 2 1 4.25 2 9.25

Foster Grandparents 2.5 1 3.5 2 1 10

RSVP in Macon 2.5 1.5 2 1 7

AmeriCorps 1 3 0.25 6 4 1 8 23.25

Other Activites:capital campaign fund-raising;lobbying

3.5 8 11.5

Annual Leave 8 8

Sick Leave 4 7 11

Holiday 0

Leave: Other _________ 0

TOTALS: 0 8 8 8 8 8 0 0 8 8 8 8 8 0 80

By signing below, I hereby attest that the time recorded on this time sheet is true and accurate to the best of my knowledge.

Employee Signature Date

Supervisor's Signature DateInstructions: 1. Calculate all time in 15 minute increments, for example: 1.25, 2.50, 4.75.2. Employee must submit timesheet to his/her supervisor by the ___ day of the pay period.3. Sign timesheet with ink pen only.4. Do not use "white-out" to correct mistakes, instead cross-out the error, write-in the correct number, and initial correction.

See Forms Collection


Time & Attendance – Participants

Finding:

Stipended Volunteers (FGP & SCP) & members (AmeriCorps) timesheets:

• Not signed by supervisor/volunteer/member• Don’t add correctly• Missing timesheets

AmeriCorps Members:• Training/fundraising hours are not segregated or hours

exceed limits• Time sheets do not support certification of hours for

education award


Time & Attendance – Participants

Consequences: Unsupported time may result in questioned costs of the amount paid in stipends (and education awards for AmeriCorps).

Preventative Actions: Use timesheets aligned with the project type which provide required information for the volunteer or member.


Senior Corps: FGP or SCP Time Sheet

ID #

11/29

Hours

Date Started Finished per Day To Client Home Total Y N

11/13/06 : : $

11/14/06 : : $

11/15/06 : : $

11/16/06 : : $

11/17/06 : : $

11/20/06 : : $

11/21/06 : : $

11/22/06 : : $

11/23/06 H H $

11/24/06 : : $

$

What Time ? Carfare

Total Hours Total Travel Cost

Legend

Remarks

P = Personal

Site Timesheet # 10

Name of Volunteer (Print)Signature of Volunteer Signature of Site Supervisor

H = Holiday

B = Bereavement

JD = Jury Duty

Due No Later Than

Meals V = Vacation

S = sick



Senior Corps Time Sheet Instructions

• Ensure time sheet is correct• Print clearly• Submit in a timely manner• Indicate whether meal was received• Document all travel costs• Never use whiteout to make corrections (Throw

it out!)• Use a permanent means to document all time,

(i.e. never use pencils or erasable pen)


AmeriCorps Member Time Sheet

AmeriCorpsMember Service Log

Name Service for the week(s) of

Morning Hours Afternoon Hours

Total Hours

Activity Hours

Date Activity Location Time InTime Out

# of Hours

Time In

Time Out

# of Hours

Fund Raising

(1)

Training(2)

Service(3)

Total Hours

AmeriCorpsMember Service Log



AmeriCorps Member Time Sheet Instructions

• Complete service log daily and submit in a timely manner.

• Only hours served should be documented, do not include lunch breaks as service hours.

• Divide your total hours according to the activities you performed (direct service, training or fundraising). Record these activity hours in the appropriate columns.

• All totals should be mathematically correct. • All service logs must be signed and dated by

member and site supervisor.• Sites must maintain a file with the original service logs.• Never use whiteout to make corrections (Throw it out!)• Use a permanent means to document all time, (i.e.

never use pencils or erasable pen)


Match Senior Corps, AmeriCorps and Learn &

ServeFindings: Match not met, undocumented,

unreasonable, not approved in budget or uses unauthorized federal funds.

• Cash and in-kind amounts were unsupported by adequate documentation or not verifiable by grantee’s records. Inadequate documentation

• Other federal funds were used as match for programs without authority

• Match claimed was not necessary to operate grant• Match amounts were unreasonable or excessive• Match was inadequately supported to determine if it was

allowable and allocable• Claimed match was not related to a cost included in the approved

budget• Match covered expenses incurred outside of the grant award

period



ServeConsequences: Undocumented, unmet or unacceptable match can

reduce the allowable direct costs to be paid by federal funds by the amount of required match not met for the program.

Preventive Actions: Know the regulatory and other match requirements which vary

extensively for and within specific program types:

Senior Corps Learn & Serve § 45 CFR 2551- Senior Companion; § 45 CFR 2516- School-based; § 45 CFR 2552 –Foster Grandparent; § 45 CRR 2517- Community-

based; § 45 CFR 2553 – RSVP; § 45 CFR 2519- Higher Education

AmeriCorps § 45 CFR 2521



Serve

Note: The same requirements apply to match and direct costs. All must be:– reasonable – allocable– allowable – provided consistent treatment– expensed in the accounting system – supported by adequate & appropriate

documentation



ServeIn-Kind Contribution Form

Date ofContributio

n

Description ofContributedItem(s) orService

Purpose forWhich

ContributionWas Made

Real orApproximat

eValue of

Contribution

How Was ValueDetermined?(i.e., Actual,

appraisal,fair marketvalue; condition-

new,used; value of likeservices)Retail comparisons,

etc

Who Made This Value

Determination?

Was Contribution Obtained With or Supported By Federal Funds? (If so,

indicate source)

Name of Contributing Organization/Agency/Business/Individual:

Address of Above Contributor: Phone #:

Printed Name of Contributor's Authorized Signee: Title:

Printed name & Title of Recipient Signee: Date:

Signature of Recipient Signee: Date:



Match – In-Kind• Make sure in-kind match documentation includes:

– Name of the donor– Description of contributed items or services– Receipt date– Value of contribution, how value was determined, and who

determined value– Printed name & title of official representing donor– Signature of donor or representative– Signature of official accepting contribution; and printed name & title– Donor restrictions, if any

• Verify in-kind contribution was not purchased with funds from other federal sources, unless authorized by law

• Maintain all documentation of match and ensure subgrantees do also, if applicable.

• Grantees should not record in-kind match until the documentation is sufficient.

• Record all claimed match in the accounting system as required by financial accounting standards

• Same costs can never be recorded on two National Service programs


Expenditures & Reconciliation

Findings: Grantees/subgrantees are not reconciling expenditures in their accounting systems to amounts in the FSR (Financial Status Reports and FCTR (Federal Cash Transaction Reports.

Consequences: Costs not allowed for differences between accounting system, FSR and FCTR

Preventive Action: Regularly reconcile differences among the reports and the accounting system. Prepare cross-walks if necessary to track FSR & FCTR reports to the accounting system detail.


Subgrantee Monitoring

Finding: Grantee does not have fiscal monitoring procedures in place to ensure subgrantee financial systems can manage federal funds and member or volunteer compliance requirements.

Consequences: Grantee can lose federal funds due to unallowable, undocumented subgrantee costs and/or inadequacies of subgrantee financial accounting system & practices and/or failure to meet match

Preventative Action: The primary grantee needs to develop policies and practices that assure subgrantee compliance and fiscal performance. Such efforts should include:



Pre-award:• Survey the potential subgrantee’s accounting system, policies

procedures & internal controls• Review organization’s OMB A-133 Audit if applicable and Form 990• Ascertain experience with Federal, state and/or foundation grants

& project cost accounting• Construct a well-developed contract/subgrantee agreement

incorporating required federal and any state provisions• Use information to develop a fiscal, technical assistance or

corrective action plan if needed• Develop a risk-based monitoring strategy



Post-Award:• Provide start-up training commensurate with the pre-award

review, identified needs and risk-assessment• For higher risk subs implement early desk and site reviews. • Site reviews should include tracking expense and financial reports

with the accounting system• Provide timely feedback to subs from all reviews including positive

and improvement needed • Establish corrective action plans where needed with specific

expectations & timelines• Follow-up on a regular basis• Take action when necessary including withholding of payments

with notification and suspension or termination when warranted


Other Findings

Financial Systems and Internal Controls Findings:

• Accounting systems and internal controls are inadequate to report grant expenditures, or management controls are insufficient to safeguard Federal funds

• Financial reporting incomplete, most recent audit has not been sent to the Clearinghouse yet

• Records do not identify cost by programmatic year, by budget line item, or do not differentiate between direct and indirect costs or administrative costs.

• Lack of written policies and procedures• Inadequate internal controls for separation of duties


Other Findings, Con’t

• The following policies & procedures are lacking:– Invoices should be stamped as paid– Pay records should be signed by an authorized approval

authority– For mileage reimbursement, meal reimbursement– Service/leave with specific information– A method to ensure goods and/or services are received

and accepted before being paid (example: have a signed receiving report)

– An organizational chart showing clear lines of authority and duties

– A policy against writing checks to cash



Program Responsibility Findings:

• Grantee did not fulfill its FGP responsibilities for the following – Documentation of volunteer orientation and in-service training.– Documentation to support annual volunteer evaluations.– Documentation of written assignment/care plans for FGP volunteers during

the review period.– Documentation regarding the eligibility of the children to be served.

• Memoranda of Understanding with volunteer stations missing or did not include all required elements.

• Member Contracts And Volunteer Assignment Plans are late, not prepared or do not meet Corporation grant provisions and regulations

• Senior Corps/AmeriCorps Appraisals/Evaluations are not conducted; evaluations or maintained as records; members serving a second term without appropriate evaluations supporting successful completion of the first term



• Missing documentation of volunteer income eligibility for SCP & FGP

• Lack of procedures & documentation to assure beneficiaries are eligible as special or exceptional need

• Volunteers enrolled did not meet the income guidelines and were ineligible to serve

• Sponsor lacks process to verify non-profit status of volunteer stations



Commissions • Did not ensure that sub-grantees meet the evaluation

requirements• Did not ensure that tutoring programs met the

eligibility, training, supervision and curriculum requirements

• Either did not have board approval or appropriate signatory authority for signing awards to sub-grantees & did not specifically incorporate/reference required AmeriCorps provisions.

• Lacked adequate written process to deal with audits of sub-grantees & did not have current information on which sub-grantees were subject to A-133 audits; or did not track, review, or follow-up on audit reports.

• Did not have good subgrantee financial monitoring tools


Exercise

Exercise will consist of small groups arranged generally by major program area to the extent feasible : Senior Corps, AmeriCorps and Learn & Serve.

Participants will be given handouts with scenarios with specific issues to analyze, identify any issues and provide a strategy for corrective action. Each table will provide a quick summary to the larger audience.


Take it Home!

1. Learn from the mistakes of others.2. Use information to review organization

strengths, challenges.3. Create systems and written policies to

rectify challenges.4. Resources and sample forms may be

found at: http://www.nationalserviceresources.org/resources

Financial and Grants Management Institute - March 18-20, 20081 Avoiding Common Issues & Pitfalls.

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Transcript of Financial and Grants Management Institute - March 18-20, 20081 Avoiding Common Issues & Pitfalls.