“Bridging the Gap” Budget and Finance Workshop January 2006

AGENDA Introductions Fiscal Reimbursement and Reporting Manual Questions and Answers Break Budgets and Budget Development Questions and Answers

FINANCEFINANCE PROGRAMPROGRAM Contractor Vendors Subcontractors Finance Staff Executive Director Communication County Auditor/ Controller Office Controller County Commissioners Program Officers Evaluation ARC CS&O Chief Program Officer

INTRODUCTION

INTRODUCTION Designated Responsibilities Contractor –Submit Timely & Accurate Reports –Open Dialogue with staff –Conduct Fiscal & Administrative Contracts Management KCCFC (AKA First 5 Kern) –Provide Technical Assistance (as needed) –Open Dialogue with the Contractor –Process Reports in a timely manner THE PROCESS IS A “PARTNERSHIP”

INTRODUCTION Designated Responsibilities General Agreement (AKA Contract) –Foundation & Basis for all responsibilities Scope of Work Budget & Narrative Insurance Evaluation & Data Analysis Sustainability Working within Legal Parameters

INTRODUCTION Reporting Quarterly Reports –Due 30 days after Quarter Ending QPR (Copies for KCCFC & ARC) Fiscal Reimbursement Claim & Backup Follow-up –KCCFC reserves the right to request further information on all reports submitted –KCCFC will communicate with contractors if there are changes significant changes to the Claim

INTRODUCTION Fiscal & Program Management Sound Fiscal Practices & Internal Controls Effective Project Implementation Adequate reporting systems for project evaluation at all levels

INTRODUCTION Returning Contracts & Amendments Contract Advance (Conditions) –Contract is fully executed & On-file –Certificate of Insurance is complete & lists KCCFC as “additionally insured” Amendments Revisions Timeliness

ACCOUNTING & REPORTING REQUIREMENTS

ACCOUNTING & REPORTING General Provisions All contractors will submit claims for reimbursement of actual expenditures incurred and paid Cash basis And follow Generally Accepted Government Accounting Standards

ACCOUNTING & REPORTING Record Keeping Maintain records for 3 years Claims will be paid when all backup documentation is provided and is logical Staff is permitted to request all program related records and backup documentation (on a need-to-know basis)

ACCOUNTING & REPORTING Audits & Auditors All contractors will have an annual audit –Audit recommendation to F5K –Audit policy developed by team of accountants and auditors Must be performed by a: –Licensed CPA Must be submitted within 150 days after the close of the fiscal period covered

PROGRAM MANAGEMENT & FISCAL EXPERTISE

Fiscal Management Program Management

PROGRAM MANAGEMENT & FISCAL EXPERTISE Inventory Control –Maintain on an annual basis (minimum) –Rule of thumb “items that have a shelf life of more than one year” Retention & Disposal of Goods –KCCFC will not be responsible for the disposal of hazardous materials (i.e. televisions, computers, computer screens, medical waste, paint, etc.) –Refer to terms of agreement

PROGRAM MANAGEMENT & FISCAL EXPERTISE Operating Funds Minimum of 3-months of Operating Capital –Contractors are obligated to pay employees & vendors despite any payment delays 20% Advance –Contractors can request a 20% advance in writing Recommend submitting advance request by June 1st 20% Advance will be reclaimed in quarterly increments

PROGRAM MANAGEMENT & FISCAL EXPERTISE Operating Funds

PROGRAM MANAGEMENT & FISCAL EXPERTISE Contract Amendments Contract Amendments –Contract Terms can ONLY be changed by a contract amendment Needs to be approved and on-file (HIGHLY DISCOURAGED) Requests are to be made to the Executive Director Steven G. Ladd in writing

PROGRAM MANAGEMENT & FISCAL EXPERTISE Back to Basics Basic Rule –Contract Funds MUST be spent on REIMBURSIBLE costs for ELIGIBLE services. Contractors should be familiar with their: –Contract –Conditions for Approval –Scope of Work –Budget & Narrative (for allowable costs)

PROGRAM MANAGEMENT & FISCAL EXPERTISE Reporting Deadlines Reporting Timelines –All reports must be submitted on a quarterly basis –Due 30 days after Quarter Ending date –Late or incomplete reports will experience delays in their reimbursement –Contact the finance staff if there are difficulties

PROGRAM MANAGEMENT & FISCAL EXPERTISE Cost Allocation Plan (CAP) Definition –Identifies shared expenses between programs & funding streams Salaries Operating Costs Etc. CAP is NOT an Indirect Plan Contact your CPA for more info

PROGRAM MANAGEMENT & FISCAL EXPERTISE Accrual vs. Cash Accounting “Cash Basis” –Costs are reimbursed on debt already paid by the contractor. –Accrued costs or encumbrances are paid when the contractor has received the goods/services and payment is rendered

REVENUE/IN-KIND/OTHER SOURCES OF INCOME

REVENUE/IN-KIND/OTHER SOURCES OF INCOME Disclosure of Income Contractors must report all sources of income that have been generated as a result of Prop. 10 funding –Grants –Fees –Donations –Endowments –Etc.

REVENUE/IN-KIND/OTHER SOURCES OF INCOME Disclosure of Income Purpose of Income Disclosure is to: –Demonstrate Sustainability –Agency Leveraging Capacity –Avoid double billings –Ensures fair payment of costs by grantors (across funding streams) –Accurate reflection of Cost-Effectiveness & Cost-Benefit Analysis –Reportable to the state in the annual report Non-Collection of Income

INDIRECT COSTS

INDIRECT COSTS Defined Most Basic –Costs not readily identified to any one specific program or line-item Administrative Costs are included in indirect cost allocations –Example: Non-Specified Program Supervision Non-Specified Human Resources General Agency Audit Costs Categorically Funded Positions –Example: Positions working with the project but fully funded by other sources (usually due to legal requirements)

INDIRECT COSTS Limits Contractors can claim their approved agency rate (with a maximum of 8%) of the total Operating & Personnel contract amounts Indirect Rate must be on-file EXAMPLE 1: Approved Rate (by CPA) is 14.70% Total Operating & Personnel costs are $100,000. Maximum Allowed for Indirect is 8% Total Indirect Allowed is $8,000. Total Contract Amount $108,000 EXAMPLE 2: Approved Rate (by CPA) is 6.70% Total Operating & Personnel costs are $100,000. Maximum Allowed for Indirect is 6.7% Total Indirect Allowed is $6,700. Total Contract Amount $106,700

INDIRECT COSTS Reporting Request for Payment Form –Identify Indirect Costs and the calculated rate –Indirect Cost amounts exceeding the approved budget amount will be deducted from the Claim as non-reimbursable costs If the indirect changes during the contract period, the approved budget amount will be used for the duration of the contract.

REIMBURSIBLE VS NON-REIMBURSIBLE COSTS Supplementing New Programs Expansion Early Screening Supplanting Non-Budgeted Items >10% overages Interest, Bank Fees, Etc.

FINAL REPORTS

FINAL REPORTS Information Final reports includes year-end reports are due within 60 days of the close of the project or reporting period Once a final claim has been received and filed the encumbrance is closed and the remaining funds are no longer available

CLOSURE NOTIFICATIONS

CLOSURE NOTIFICATIONS Information Contractor must notify us when closing any KCCFC project –Written Notification to the Executive Director Steven G. Ladd –Contractor has 60 days from the last day of service to submit all documentation