Presentation on theme: "Managing Government Grants: Do The Right Thing! Session 1: July 29, 2014 2p-3p GETTING SPEEDY GRANT PAYMENT & KEEPING THE MONEY!"— Presentation transcript:
Managing Government Grants: Do The Right Thing! Session 1: July 29, p-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 14/15 Foundation B-X Program Program expense Construction Contractor Expense 10,000 Professional Contractor Expense 7,500 Supplies Expense 2,200 Occupancy expense Rent 300 Utilities 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 1 st Things 1 st 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 1 st Things 1 st 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 1 st 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 1 st 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 1 st 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 1 st 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 1 st 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 1 st 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 Upcoming programs!