FINANCIAL MANAGEMENT SUMMER TRAINING FFY2011 Sponsors and Independent Child and Adult Care Centers...
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Transcript of FINANCIAL MANAGEMENT SUMMER TRAINING FFY2011 Sponsors and Independent Child and Adult Care Centers...
FINANCIAL MANAGEMENTSUMMER TRAINING FFY2011
Sponsors and Independent
Child and Adult Care Centers
CACFP SummerTraining - 2011
FINANCIAL MANAGEMENT AGENDA
Federal Financial Management Requirements
DPI Financial Management Requirements– Accounting System– Budget– Nonprofit Food Service Financial Report
DPI Detailed Financial Review– Other CACFP financial reviews
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Frequently Used Terms
Agency: The organization name on the CACFP Application. Same as the name on the federal tax-exempt status (non-profit) or the legal name of the agency (for-profit).
Child and Adult Care Food Program (CACFP): Federally funded program through USDA and administered in WI by the Department of Public Instruction. Provides reimbursement for eligible meals served to enrolled participants. Sometimes referred to as the “Food Program”.
Nonprofit Food Service Financial Report (NPFS): DPI form required from all participating agencies (for-profit and non-profit) that is used to report actual food program expenditures and earned food program revenue. Annually = Independent and Quarterly = Sponsors.
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Frequently Used Terms (cont.)
United States Department of Agriculture (USDA): The federal branch of government that oversees and regulates the CACFP administered to State Agencies.
Department of Public Instruction (DPI): The Department in the State of WI that administers the CACFP to participating institutions.
Institution: A licensed center that contracts with the DPI to administer the CACFP to it’s enrolled participants. Also referred to as an “Agency”. Two types:
– Independent: One site participating in the CACFP.– Sponsoring Organization (SO): Two or more sites participating
in the CACFP. Affiliated - same legal entity as the Institution/Agency. Unaffiliated – no affiliation with Sponsor – SO must be non-profit
Child and Adult Care Food Program
IS Federally Funded
– Passed through DPI
a FOOD Program Healthy meals to eligible
participants Optional Program
– Except in Head Start
Heavily Administered– Detailed program
requirements.
IS NOT “Free” money Funding for personal
expenses To purchase soda/coffee
for teachers, non-healthy and/or not enough food and snacks for participants
Entitlement Program For the disorganized5
FEDERAL FINANCIAL MANAGEMENT REQUIREMENTS
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FINANCIAL VIABILITY
Appropriate practices for recruiting facilities. [7 CFR 226.6(b)(2)(vii)(A)(1)]
Adequate financial resources to operate the CACFP on a daily basis. [7 CFR 226.6(b)(2)(vii)(A)(2)]
– Other Sources of funding During interruptions in program payments Fiscal claims against the agency Unallowable program costs Documentation:
– Financial Statements– Audit Reports
Budgets [7 CFR 226.6(b)(2)(vii)(A)(3)]– Costs must be necessary, reasonable, allowable and
appropriately documented.
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Nonprofit Food Service [7 CFR 226.6(e)(13)]
CACFP funds used solely for operation of food service for enrolled participants.
Cannot make a profit on Federal food program
No more than 3 month operating balance per program year
Documentation to support actual costs
Must have other source of income – Costs Not Covered– Temporary interruptions in
program payments– Unallowable program costs
Nonprofit Food Service Operation
CACFP is like a separate nonprofit business within your business
Must show how you spend CACFP reimbursement in an allowable way
Required for ALL types of agency’s even for-profits
DPI FINANCIAL MANAGEMENT REQUIREMENTS
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MEASUREMENTS OF FINANCIAL VIABILITY
1. Accounting System Does your agency have one? If so is it in compliance to GAAP?
2. Approved Budget Amended Budget
3. Incurred Costs (Actual Costs) Reported annually (Independent) and Quarterly
(Sponsors) on the Nonprofit Food Service Financial Report
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Accounting System
Cash/Accrual/Modified Accrual– Cash System: Recognizes revenues and costs when cash is received and bills are paid. – Accrual System: Recognizes revenues and costs when costs are incurred and uses a
payable and receivable system.– Modified Accrual System: Certain expenses are reported on an accrual basis.
Compliance with Generally Accepted Accounting Principles (GAAP)– Rules for the accounting of costs and revenues– Resource: http://www.fasab.gov/accepted.html or Ask your staff Accountant– Items should not be purchased with CASH.
Financial Reports– General Ledger / Check Register– Profit/Loss Statement– Balance Sheet
Co-mingled CACFP funds with Agency funds– Method of separation (ie. independent account codes)– Approved allocation plan for shared costs
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Accounting System
Consistent with all programs Written Procedures
– Process of Payments, Deposit of funds and Payroll Single Audit Reports (non-profits only)
– A-133 report required if expend over $500,000/year in federal dollars (non-profits only)
Single Audit Clearinghouse http://harvester.census.gov/sac/index.html– Less than $500,000 - Annual report/review from outside party should be
conducted annually.– Copy sent to DPI within 9 months from end of agency’s FY if CACFP is major
program. For-profits: Compliance review by outside accountant
– Annual Report– Should be completed when Federal taxes are completed.– Good resource: www.irs.gov
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Accounting System
Summary DPI Requirements: CACFP vs. Other agency
activities Operational and
Administrative Costs Support NPFS reports
submitted to SA Consistent with other agency
operations
Accounting Systems
Acceptable Center credit card Center checking
account Charge Account at
local store Invoice or COD
– Food delivery vendor
Unacceptable Cash
– Including cash-back
Third party checks Food Stamps
15 * Information per GAAP
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CACFP BUDGET
Budget Summary submitted with online application Projection –
– “Road Map” of Upcoming Program Year– All Expenses
Allowable, Reasonable, in accordance to FNS Instruction– All Revenue Available
CACFP Meal Reimbursement CACFP Cash-in-lieu reimbursement Interest earned on CACFP funds and/or other FS income “Other” Non-CACFP Income
– Unfunded/Unallowable Costs– SA Overclaims– Interruption in Program Payments– Ex. Child Care Fees, Tuition, Headstart, W-2, Donations
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Review Online CACFP Budget
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FFY2012 CACFP Application/Budget
Available online at:
http://fns.dpi.wi.gov/fns_cacfpapps Click on first dot point: “CACFP Internet Application
Manual”– Instructions for online application
FFY2012 Online Application (second dot point) Renewing – all material will carry-over just make
updates and submit a new online budget summary. All NEW Sponsoring Organizations must submit a
completed Attachment G.
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Project Food Program Costs & Revenue– Costs: Regardless if paid with CACFP
reimbursement How much will it cost your agency to
administer the food program from October 1, 2011 – September 30, 2012
– Revenue: All sources and amounts available to fund food program expenses.
Not covered Unallowable Pay Overclaims
Costs not approved are unallowable– Cannot be funded with CACFP funds
FFY2012 Budget
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What do I put in my budget?
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Administrative & Operational Costs
Administrative Monitoring Claim
– Compiling – Submitting– Reconciling
Accounting / Bookkeeping
Operational Kitchen
– Meals Preparation Delivery
– Menus– Purchasing / Vended
Meals
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Frequent Allowable CACFP Costs(lists are not all inclusive)
Allowable Food (consumable) Kitchen Supplies/Nonfood Contract / Vended Meals Food Program Personnel
– Admin & Operational Audit Services
– CACFP Portion Employee CACFP Travel
– e.g. Grocery shopping, DPI training
Equipment Purchase/Rental
Food Costs
Costs in purchasing ingredients for menu items (Food Supplies) AND/OR the cost of purchasing itemized CACFP meals from an outside vendor (Contracted Service) that are served to the participants
At least 50% of budget– For healthy, reimbursable meals at least ½ of
reimbursement on food costs.
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Food Supplies
Consumable food products used to create menu items served to program participants.
Costs can include delivery costs. Taxes must be paid with non-CACFP funds
(tax-exempt). Report on the Food Supplies/Food Costs
line on budget and NPFS.
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Food Vendors
Outside food service, not related to agency.
Contract approved with DPI Provide all CACFP components. Report as Contracted Services
on CACFP Budget and Financial Report
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Contracted/Vended Meals
Costs of purchased, prepared meals are contracted service costs
Contract must be signed prior to beginning date (contracted service)
The vendor must keep production records(a record of quantityof food prepared)
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Food Service Labor
All wages, salaries, employee benefits, and the share of the employee taxes paid by the agency.
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Operational Food Service Labor
Menu planning– Production Records
Food purchasingCookingServing the foodCleaning-up after the mealMeal Attendance
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Food Service Labor is also…
Time spent completing required records– HSIR and HSIS– Monthly claim– Financial reports
Supervision of day-to-day food service operations
These are Administrative costs
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Administrative Costs
Sponsors: No more than 15% of CACFP meal reimbursement can be spent on administrative costs without State Agency waiver.
Independent Centers: Not an issue because CACFP meal reimbursement is usually spent on operational costs, any leftover should be less than 15%.
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Administrative Costs
CACFP Administrative Costs should never be higher then CACFP Operational Costs.– It should cost an agency more to prepare and
serve the meals then doing the paperwork and monitoring of the program.
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Frequent Allowable CACFP Costs(list is not all inclusive)
Allowable Food (consumable) Kitchen Supplies/Nonfood Contract / Vended Meals Food Program Personnel
– Admin & Operational Audit Services
– CACFP Portion Employee Travel
– e.g. Grocery shopping, DPI training
Equipment Purchase/Rental
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Frequent Unallowable CACFP Costs(lists are not all inclusive)
Unallowable Bad Debts, Fines, Penalties
Non food program food costs– Coffee, non-CACFP personnel
meals (i.e. driver, maintenance, non-employee/family member)
– Entertainment – “Family Night”, catering costs
Purchase of food for personal use– Money received must be kept in
food program account. Must have strict internal policy.
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Resources for Allowable/Unallowable Costs
Guidance Memorandum #11– Child Care: http://fns.dpi.wi.gov/fns_centermemos– Adult Care: http://fns.dpi.wi.gov/fns_adultmemos– “Standards for Allowable Costs”
User friendly, searchable, Excel reference
FNS Instruction 796-2 (rev. 3)– Electronic copy available on our website.– Derived from OMB Circulars and Federal Regulations.– USDA website for OMB Circulars:
http://www.fns.usda.gov/fm/FeaturedAreas_menus/FA_Reference.html
STRETCH TIME
35 Stretch your mind, body and CACFP dollars
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How am I going to pay for this program?
CACFP Reimbursement
CACFP Reimbursement is based upon:– Number of meals you serve– Eligibility of the participants
The funds you receive will not cover all of yourallowable FP costs.
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Remember!
The CACFP funds are replacing funds you are now spending
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Other Source of Income
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CACFP is part of your overall organization. Funds received to run organization must also be
available to fund CACFP costs not covered by reimbursement.
Examples: Headstart, Tuition, W-2, Fundraising, Private Donations
Food Stamps is not another source of income for the center.
Report projected Source and Amount on Budget
Best use of your CACFP Reimbursement
Plan, budget, and organize the funds available will help you to maximize your CACFP reimbursement.
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No planning, using funds on non-program needs, no accountability of funds spent will result in loss of funding and/or participation
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All Food Program Costs Paid with CACFP Reimbursement must have received
PRIOR DPI approval
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I need to change my budget!
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Amending Budgets
DPI Policy: CACFP funds can only be used for approved food program line items on annual budget.
Notify DPI of any budget omissions.
When in doubt contact DPI for approval.
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How would DPI know what I spent my CACFP reimbursement on?
Review of NPFS Reports
On-Site Financial Reviews
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Nonprofit Food Service Financial Report (NPFS)
Form PI-1463 (Independent) and PI-1463-A (Sponsors)
Report of all ACTUAL CACFP expenditures during the reporting period.
Costs should equal expenditures charged to food service program plus any additional expenses covered with non-CACFP funds.
Amounts must be supported by actual documentation – NO ESTIMATES
Forms can be found under Guidance Memo 11
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All Food Program Costs: Actual Expenditures
– Not Estimates Support Documentation Only report CACFP %
– Shared costs Amount net credits Allowable and Approved
– FNS 796-2 (rev.3)– CACFP Budget
Nonprofit Food Service Financial Report (NPFS)
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Nonprofit Food Service Financial Report (NPFS)
CACFP revenue should be reported using the accrual method (as earned, not received).
Additional program income must be reported (e.g. interest income, rebates)
Additional non-program income must be reported
– Total Costs less Program income = non-program income
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Nonprofit Food Service Financial Report (NPFS) Due Dates
Independent Annual Report
– Reporting period: October 1 – September 30
Due Date: November 1st
Submit via: E-mail: [email protected] Fax: (608) 267-0363 Regular Mail
E-mail or call if need extension
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Nonprofit Food Service Financial Reports (NPFS) Due Dates
Sponsoring Organization 1st Quarter
– Reporting period: October 1 – December 31 Due Date: March 1st
2nd Quarter– Reporting period: January 1 – March 31 Due Date: June 1st
3rd Quarter– Reporting period: April 1 – June 30 Due Date: September 1st
4th Quarter– Reporting period: July 1 – September 30 Due Date: December 1st
PI-1463-A (front page)
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State Agency (SA) USDA OIG
CACFP Financial Reviews
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CACFP Financial Reviews
SA Reviews (DPI)– Announced or Unannounced– Usually occur during a program review– Items to have available:
Support documentation for NPFS for current and last FFY ALL support documentation for food program costs Bank statements/cancelled checks for food program funds General Ledger, allocation plan, P/L reports
– Should be able to describe accounting system. How do you pay your bills? Where did CACFP funds go?
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CACFP Financial Reviews
SA Reviews (continued)– Any non-food program/unallowable cost found to be paid with
CACFP funds will be disallowed. May result in repayment to DPI. CACFP funds exceed CACFP costs = repayment to DPI Appeal-able Action
– MUST BE ORGANIZED Be able to show and explain your organizations system
USDA Reviews– Monitoring SA as part of Management Evaluation– SA will work with agency on Corrective Action (if needed)
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CACFP Financial Reviews
OIG Audits– Office of Inspector General– “Report Card” on CACFP– Focus Audit on key elements or red flags
Related party transactions (less than arms length) Purchase of property and/or real estate with federal funds Excessive growth in short time-span Contracted Services Disbarment from other Federal and State Programs
– Result: DUNS Number requirement – track all federal grant recipients
– http://www.fns.usda.gov/fm/documents/DUNS_general.htm– Reports go to Washington DC– http://www.usda.gov/oig/
Let’s Summarize…
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Which are allowable food costs?
Milk Beer & Liquor Personal Groceries Spices Bread
Crab meat Soda Pop Rabbit Food Teacher Meals Refrigerator
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Which are allowable nonfood/kitchen supplies?
Dishes Milk Cups Arts/Crafts Supplies
Toilet paper Cooking utensils Dishwashing
detergent Paper towels used in
the classrooms
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receipts.
What are some “Other” allowable CACFP expenses?
Food Service labor– Operational Exp.
Admin. Labor– Only CACFP %
Vended Meals– Contracted Service
Kitchen Equipment Gas for Vehicles
– Only CACFP %
Maintenance/Repairs– Only CACFP %
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CACFP funds should always be spent on food and kitchen supplies FIRST
What items should you retain to support your CACFP costs?
Receipts Invoices Payroll (timesheets,
paystubs, etc.) Checkbook/check
register General Ledger
CACFP Claim documentation
Bank Statements A shoebox or
garbage bag The number to your
accountant
58Retained for 4 years (3 yrs plus the current)
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Resources
Financial Management: Guidance Memo 11
– State agency Financial Management policy Child and Adult Care sites (Sponsors & Independent)
Instructions Completion of NPFS Report(s) Allowable/Unallowable costs Fiscal Action Procedures
FNS Instruction 796-2 (rev. 3)– Abbreviated version– Available Electronically – User Friendly– http://fns.dpi.wi.gov/fns_centermemos (under Guidance
memo 11)
QUESTIONS
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Contact Info
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Cari Ann Muggenburg, AuditorCommunity Nutrition Programs
Ph. 608-264-9551E-mail: [email protected]
FINANCIAL MANAGEMENTSUMMER TRAINING FFY2011
Sponsors and Independent
Child and Adult Care Centers
CACFP SummerTraining - 2011