Managing Government Grants: Do The Right Thing!

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.


• 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


• 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


• 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?


• 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


• 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?


• 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


• How IS your financial reporting?– Monthly– Balance sheets– P&L vs budget– Cash flow statement– Key/significant programs

reporting– Read?– Understood– Action items?


• 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?


• 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?


• 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 (

[email protected])• Upcoming programs!

mailto:[email protected]

Managing Government Grants: Do The Right Thing!

Documents

Transcript of Managing Government Grants: Do The Right Thing!