Key Concepts of Financial Management PennSERVE August 2017

Key Concepts of Financial Management PennSERVE August 2017
PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 1

PennSERVE 2017 Grantee Training
Session Road Map By the end of the session Participants will: Be aware of the basics of federal grant management Be acquainted with Uniform Guidance Understand an allowable cost Be familiar with federal regulations for AmeriCorps grant requirements Understand Living Allowance distribution Properly document Staff and Member time Understand financial reporting Understand matching requirement and in-kind documentation This session was designed to acquaint grantees of the responsibilities of managing a federal AmeriCorps grant, familiarize them with the basic requirements and provide tools on researching the specific requirements. As a result of this course grantees should be informed on the key compliance requirements and equipped with the tools of meeting the compliance requirements. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Common Red Flags and Findings
Consistently late in reporting Not meeting required match Continuous issues with the NSCHCs Staff turnover Verbal information from check-in does not match progress reports Low member enrollment Lack of cohesive partnerships Be aware of some red flags that will signal your items or issues you will need to address. Some of the red flags include Consistently late reporting …. may be a sign of inadequate staffing levels to support this activity, lack of training or poor design of the financial systems Not meeting the required matching …. may signal trouble with partnerships, changes in organizational leadership or commitment to the program. Continuous issues with the National Service Criminal History Checks …. may signal problems with inadequate staffing levels or staff knowledge to support this activity. We have found that consistent staff turn over …. can be reflective of difficulties within the organization, design or expectation of position Low member …. can highlight staffing issue or insufficient outreach Lack of cohesive community partner …. can also identify issues, such as staffing or other programmatic issues. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Key Concepts of Financial Management
Federal & State Requirements Understand grant requirements Learn federal regulations Develop comprehensive Required Policies and Procedures Understand Internal Controls Increase knowledge regarding proper documentation & time and activity reporting Specific AmeriCorps Requirements Understand National Service Criminal History Checks Learn documentation and compliance for Member oversight and management Eligibility Documentation Prohibited Activities Living Allowance Payments Education Award Grantees should understand that there are many compliance requirements with AmeriCorps grants. The federal government issued Uniform Guidance in December 2014, that replaced the former OMB circulars, it is important that grantees operate under the new federal grant requirements. We will review these in more detail. In addition to the basic federal grant requirements there are specific compliance requirements related to AmeriCorps. If grantees are familiar with federal grant requirements but new to National Service and AmeriCorps they should pay special attention to the specific AmeriCorps requirements PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Regulations & Requirements
A fundamental piece of knowledge that is critical to understand is the regulations. Know that AmeriCorps grants are subject to the Uniform Guidance that is applicable to all federal funds as well as specific program requirements that guide the program components. There are specific information that is required to document a members eligibility, specific information that must be included in a member contract, time sheets to support the education award as well as specific criminal history checks. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 5

Legislative History National and Community Service Act of 1990 led to the passage of legislation that focused on volunteering and created a new independent federal agency, the Commission on National and Community Service. The National and Community Service Trust Act of The legislation created the Corporation for National and Community Service, and AmeriCorps. The Serve America Act in 2009 reauthorizes and expands national service programs administered by the Corporation for National and Community Service. AmeriCorps has a long history and several pieces of key legislation that created the foundation of the Corporation for National and Community Service as well as the AmeriCorps program. There are several pieces of each of these that still impact the program today. To learn more about the programs rich legislative history check out the link provided 2017 PennSERVE Grantee Training August 2017

Nat’l & Community Svc. Act of 1990 Certifications and Assurances
Serve America Act Uniform Guidance (part of CFR) State & Local Regulations Grant Provisions Certifications and Assurances Notice of Grant Award When the participant clicks on a color the corresponding piece of text should be displayed. The various requirements are similar to an onion with many layers. Starting from the inside, where the information is most specific is the Notice of Funding Opportunity, this contains match requirements, living allowance limits and other unique items. The proposal that was submitted along with the budget states the goals and objectives that were committed as part of the grant. The budget that was part of the proposal is key as it is the foundation for allowable costs. The Notice of Grant Award and contract from the Connecticut Commission on Community Service provide the basis of the requirements, includes start and end dates of the program as well as refers to all of the other state and federal requirements AmeriCorps has Grant Provisions and there are Certifications and Assurances that were agreed to in eGrants when the application was submitted. Each program is subject to state and local requirements, an example of those would be the state mileage reimbursement rate. The Uniform Guidance replaced the OMB Circulars, these were effective in December of These requirements are the same for all federal grants. An example of this is proper documentation to support expenses. The Serve America Act, reauthorized the AmeriCorps program and provided new requirements in An example of one of the requirements is the National Service Criminal History Checks that all members and staff on the grant must have in order for costs to be allowable. The National Community Service Act created the National Service Trust, where the funds are held for members that successfully complete their term of service. Included in the legislation are requirements for eligibility for the program participation. Proposal & Budget Notice Of Funding Opportunity PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 7 7

Key Concepts of Financial Management
Grant Requirements Reporting Internal Controls Documentation Policy & Procedures Uniform Guidance There are many elements of Financial Management which are all important to meeting the compliance requirements of the AmeriCorps grant. All of these are equally important to the compliance structure that you should establish within your organization. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Uniform Guidance = OFFICE OF MANAGEMENT AND BUDGET GUIDANCE FOR GRANTS AND AGREEMENTS; OFFICE OF MANAGEMENT AND BUDGET GUIDANCE; ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS 2 CFR Title 2 Chapter II Part 200 Often referred to as Super Circulars Effective for grants issued after 12/14 Regulations for all types of organizations in one place Can be found: idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl Well organized table of contents that facilitates research The OMB Circulars were “updated” and the Uniform Guidance was created and became effective for new grants issues after December These regulations are applicable to all organizations that expend federal funds. There are no longer three different documents with different pieces applicable to different types of organization. Critical to understand financial requirements. Contained within includes information to assess allowable costs, match and documentation requirements, internal controls, financial requirements, procurement standards PennSERVE 2017 Grantee Training 2009 Financial & Grants Mgmt. Institute 2017 PennSERVE Grantee Training August 2017 9 9 9

Uniform Grant Guidance
Basics: How many people are familiar with Uniform Guidance? May know it as Super Circulars UGG replaced the OMB Circulars. 2017 PennSERVE Grantee Training August 2017

Allowable Costs Organization should develop policy as to how they to determine the allowable costs that can be incurred by organizations under Federal grants A Principle of standard is that Federal awards bear their fair share of costs Consistent treatment of costs is critical across the organization Provide uniform standards of allowability and allocation Policy became requirement as part of UG. Typically in fiscal manual or policies Examples of Costs Identified: Advertising and public relations costs, Compensation for personal services, Memberships, subscriptions, and professional activity costs, Recruiting costs, Rental costs, Training and education costs & Travel costs PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 11 11

Allowable, Reasonable & Allocable
Allowable –A cost within award limitations consistent, documented, reasonable & allocable Reasonable - A cost that does not exceed what a prudent person would do under the circumstances at the time the decision Allocable - Treated consistently with other costs incurred for the same purpose in like circumstances and benefits the award and can be distributed proportionally to the benefits received idx?SID=cdd99a6849efa ca78cc9d2ba7&mc=true&no de=sg _1401.sg12&rgn=div7 For additional information Important elements that are explicitly described in Uniform Guidance, there is an entire section in subpart E dedicated to cost principals Simular to the Way that the Cost principals were set up in OMB PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Policies & Procedures PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 13

Policies & Procedures Policies and procedures are a set of written documents that describe an organization's Record Retention Procurement Standards Allowable Cost Sub-receipient Monitoring (if applicable) Conflict of interest Personal Compensation and the documentation of wages. Travel reimbursements Financial Management Management of federal funds Review of budget Well documented policies and procedures are a guide for staff and management to ensure that operations are carried out as designed. Policies provide clarity and consistent for operations as well as assist when there is turn over. Above is a list of required policies, where there are many more recommended as a best practice that include accounting, reconciliations, payment processing, internal controls and separation of duties, cash receipts, approval and authorization to name a few key items PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 14

Documenting Expenses PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 15

Proper Documentation 2017 PennSERVE Grantee Training August 2017
So this winter I received package with materials shown here. Ideally grantees can run report form general ledger that is a key to the items. 2017 PennSERVE Grantee Training August 2017

Documentation Basics Be sure all proper documentation is available for review Ensure accurate files and record retention Be sure to follow your own policy and procedures regarding approvals Establish a written record retention policy PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Proper Documentation There are some key areas to ensure accurate info Staff salaries Expense allocation support Member enrollment documentation Other program compliance item including evaluations and background checks Check the Uniform Guidance to ensure that there is proper document to support salaries, pay particular attention to staff that work only a portion of their time on the National Service Grant, you are required to have after the fact determination of the amounts. In addition it is critical that if you allocate expenses there is a clear, reasonable rational. A key to achieving this is a simple cost allocation plan. When creating the annual budget, simply have a detailed narrative that explains how the costs are spread across the various programs. Member Documentation was introduced early in this presentation and is critical to ensure the allowability as is having appropriate background checks that will be reviewed in future slides. 18 PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 18 18

Budget, Match and Reporting

Budget Both Program & Fiscal Staff should Assist in developing the AmeriCorps budget by line item Develop the system to track budget versus actual expenses Review the budget versus actual expenses quarterly, at a minimum, but more frequently may be more effective Determine what line items funds can be reallocated based on periodic reviews Determine how subgrantees or host site budgets are monitored, if applicable Know when PA Commission and CNCS approval is needed for budget changes For awards in excess of $100,000 cumulative budget changes of 10% or more must be approved by CNCS staff The budget is a tool and basis for the allowability of costs. All staff that expend grant funds should be familiar with the budget and there should be a responsible party names that review the budget periodically. For new grantees and those not familiar with AmeriCorps, it is best to review the budget monthly. Staff should familiarize themselves when budget amendments are required and work closely with CT Commission staff on the budget. A common occurrence is that grantees struggle to put together their budget at the start of the program as there does not seem to be adequate funds for programs, however close to the end of the grant there are all of a sudden significant funds that must be expended in a short time. Properly monitoring the budget will elevate this problem and allow grantees to utilize resources through out the year. PennSERVE 2017 Grantee Training 20

Key Budgeting Tips Check to ensure that required match is met Be strategic when allocating funds to federal or grantee share, some costs can be met with in- kind donations Be aware of budget changes that require amendments Identify In-kind donations prior to creating the budget Be sure that in reviewing the budget that someone is keeping an eye on the match. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 21

Acceptable Match is . . . Cash and in-kind contributions are accepted as part of the grantee’s cost sharing or matching when contributions meet all of the following criteria: Are verifiable from the grantee's records Are necessary and reasonable for proper and efficient accomplishment of project or program objectives Are allowable under the applicable OMB cost principles Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching Are provided for in the approved budget Conform to other grant provisions or OMB Circulars Match has the same compliance regulations as federal funds. I often here people state they will not use the federal grant so they will apply the cost to the match, well the rules are the same so it is critical that if a cost is not allowable with federal funds it is not included in match PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 2009 Financial & Grants Mgmt. Institute 22

Key Elements of Financial Reporting
Prepare all financial reports with information from the organization’s accounting system Review and reconcile the information to ensure accuracy prior to report submission Ensure files have the proper documentation to support all information reported in financial reports Submit all reports on time Most of the key activities take place during the month where the expenses are incurred, invoices are approved, coded for the chart of accounts for entry into the account system. Payroll is recorded, paid and tracked by activity. There are several reconciliations and often some journal entries that are part of the month end process to ensure that the financial information is correctly recorded in the accounting system. The financial report should come out of the accounting system. There should be a report that comes from the general ledger to support AmeriCorps expenses for the period, typically month. This report should be what is used to complete the month reimbursement reports. It is a best practice to create a calendar of due dates for the grant which includes the financial reports. Timliness is critical PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 23 23

Member Compliance Oversight, Management

Member Documentation Critical to obtain information to support eligibility It is a good internal control for other staff to review files for completeness and to have information in payroll files prior to issuing first living allowance payment There are several tools and checklists that are available to assist a program ensure that they have the proper documentation to support. There is no need to recreate the wheel. You should get a headstart by utilizing a tool that lists all of the required information that must be maintained, We will review the most critical pieces….. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 25

Member Eligibility Be at least 17 years of age Has provided documentation (and copies of documentation has been placed in applicant file) that the applicant is a lawful citizen, national or permanent resident alien of the United States, PRIOR TO ENROLLMENT Conduct proper criminal history check, include accompaniment if necessary until check is complete Have a high school diploma or its equivalent or agree to get one before using the education award Eligibility is the first basic requirement for AmeriCorps members. The initial documentation requirements are more strigent than a typical employee and an I-9. be sure that citizenship or proper status is documented. Also ensure that you have reviewed the National Service History Check requirements and that they are initialed prior to service. There is also an age and high school education requirement that must be documeted PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Member Timesheets & Living Allowances
Develop a system to track member time (direct service, training and fundraising) Timesheets must be accurate and signed and dated by both the member AND supervisor Check with payroll staff to determine if there are existing systems and internal controls within the organization to assist with time tracking Payment must be made based on contract not hours in equal installment Members are to be paid a living allowance that is calculated based on their term of service. The member should not be paid on an hours basis that is determined by how much they work each period. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 27

Member Living Allowance Payroll Policies
Program and payroll staff need to develop a communication system to ensure that only active members receive living allowance Program and payroll staff need to discuss issues with AmeriCorps living allowance for example exemption from worker’s compensation insurance and that living allowance does not vary based on number of hours Only members that are active should receive a living allowances, programs need to develop and communicate policies on when member living allowances should be paid. There needs to be communication when members are suspended and when they exit the program. Members wages are subject to taxes and organizations either need to cover members with workers compensation or obtain an insurance polices that cover members while serving. There are many components that should be part of a policy See the specifics on the following slide PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 28

Member Tracking Systems
Both Program & Fiscal Staff should Assist in developing a system to track members’ W-4 received at the beginning of service [Withholding Allowance Certificate] W-2 provided at close of tax year [Wage & Tax Statement] Living allowances payments Personal Income Taxes Worker’s Compensation insurance or Occupational, Accidental, and Death and Dismemberment coverage Health insurance Unemployment Insurance taxes, if mandated by state law Ensure living allowances are not paid on an hourly basis Ensure members are not classified as an employee or paid a wage Ensure member costs are separately identified from organizational staff salaries & benefits Ensure member living allowances cease when member concludes term of service or is released from participation Ensure liability insurance coverage is secured for members in on- and off-site projects Ensure member files and records are safe and secure Here is a list of items that program and fiscal staff should meet to review as to ensure that there is a good system for documenting member payments and ensuring that taxes are withheld, and insurance is provided for full time staff PennSERVE 2017 Grantee Training 29

Member Recruitment & Retention
Both Program & Fiscal Staff should know When members have started service The level of recruitment The level of retention Know when slot conversions are warranted and have been made Recruitment and retention will impact program expenses and cash flow The conversation on this slide will be about recruitment and retention and impacts on the budget, on the performance measures and community partners. PennSERVE 2017 Grantee Training 30

Slot Conversions & Refills
Review slots where members have exited without award and determine if the slot can be refilled, or if funds will be unexpended to be reallocated Obtain approvals for reallocation, as needed Additional resources may need to be raised if you refill a slot Part-time conversion to full-time Account for additional health insurance PennSERVE 2017 Grantee Training 31

Background checks We are just touching the surface of this topic – please check the Corporation for National Service Website as there is significant tolls and resources to assist. PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017

Overview on Background Check Requirements
WHO Identifying a covered position Identifying the type of covered position WHAT Criteria which make an individual ineligible to serve WHERE Designated sources for the three check components WHEN Application of the rule as it relates to individual start dates Timing of the check as it relates to individual start dates HOW Helpful tools and resources to help meet the requirements National Criminal History Checks are a key AmeriCorps compliance issue. It is critical that there is a point person for this on staff that fully understands the process. It is also helpful to share this information with your Human Resources department as they can assist in compliance by ensuring the checks are done before someone starts, track when checks are complete and maintain the confidential files. 2017 PennSERVE Grantee Training August 2017

INDIVIDUAL IN A COVERED POSITION
WHO’S WHO? INDIVIDUAL IN A COVERED POSITION NO RECURRING ACCESS RECURRING ACCESS An individual in a covered position may be paid wholly from federal share, wholly from matching dollars, or from a mixture of federal and non-federal funds. Episodic access is access that is not a regular, scheduled, and anticipated component of an individual’s position. The ability on more than one occasion to approach, observe, or communicate with, an individual, through physical proximity or other means, including but not limited to, electronic or telephonic communication. $ - Salary, Stipend, Living Allowance and/or Education Award Step one is to determine covered positions – identify who within the organization will need a background check…note all AmeriCorps members will need this Then, once the covered positions are identified then you need to identify if there is recurring access or not $ NO ACCESS YES ACCESS PennSERVE 2017 Grantee Training

APPLIES TO ALL INDIVIDUALS IN A COVERED POSITION
National Sex Offender Public Website (NSOPW) WHAT The requirement to conduct the nationwide US Department of Justice National Sex Offender Public Website (NSOPW) Check ( became effective with the November 23, 2007 regulations. WHEN This must be completed (conducted, cleared, documented with dated printout/screenshot) BEFORE the start of service. Individuals in covered positions cannot begin counting hours until this check is cleared. HOW This is a name based check. This is public information. No fees are charged. Results of a nationwide NSOPW check is a dated screenshot or print out of the results of the search. Do not hand write the date. You are required to perform the NSOPW check until all State registries are cleared. The result will indicate whether or not any individual State systems were inoperable during that search. If the check was less than complete, you must re-check the NSOPW to rule out the possibility that the applicant may be registered in the State(s) system(s) that was not connected to the NSOPW system when you performed the first check. You may supplement the first NSOPW check by checking the State registr(ies) that are down. Do not limit the search by doing the Advanced search. Do not enter a zip code, state or other limiting criteria.. You must document the adjudication and resolve all hits before the start of work or service. That result should be annotated to document who confirmed that any hits are not the same persons as the candidate you are checking. NO ACCESS YES ACCESS A step for all covered positions is the National Sex Offender Public Website - BE SURE TO DOCUMENT THIS CHECK PennSERVE 2017 Grantee Training

STATE REPOSITORY CHECK(S)
CHECK COMPONENTS FOR A COVERED POSITION WITH NO ACCESS OR STATE REPOSITORY CHECK(S) WHAT This check requires that you check both the State of residence and the State of service. The State of residence is determined at the time of application. WHEN These checks must be initiated no later than the start of service. Any service hours accrued prior to initiation are ineligible. HOW These checks must be obtained from the CNCS designated state repository. FBI FINGERPRINT CHECK WHAT This check requires that you obtain a fingerprint based FBI check. WHEN Must be initiated no later than the start of service. Any service hours accrued prior to initiation are ineligible. HOW Programs must get their FBI check through the designated State repository. Anyone following a different method for obtaining the FBI check must submit a formal Alternate Search Procedure (ASP) request to CNCS for approval. If there is no reoccurring access you have a couple options PennSERVE 2017 Grantee Training

STATE REPOSITORY CHECK(S)
CHECK COMPONENTS FOR A COVERED POSITION WITH RECURRING ACCESS STATE REPOSITORY CHECK(S) AND FBI CHECK VULNERABLE POPULATIONS Children age 17 and under Individual aged 60 and over Individuals with Disabilities 18 + ACCOMPANIMENT Accompaniment must be performed while checks are pending. An individual is accompanied when he or she is in the physical presence of a person cleared for access to a vulnerable population. Accompaniment may cease when the results of either the State(s) or FBI component has cleared. For Recurring access you have a more detailed screening PennSERVE 2017 Grantee Training

INELIGIBLE TO SERVE OR WORK
Anyone who refuses to undergo the Check is ineligible. Anyone who makes a false statement in connection with a program’s inquiry concerning their individual’s criminal history is ineligible. Anyone listed, or required to be listed, on a sex offender registry is ineligible. (November 23, 2007) Anyone convicted of murder as defined and described in 18 U.S.C. § 1111 is ineligible.* (October 1, 2009) Note there are several things that would make someone ineligible to serve or be paid under the gratn *Although murder became an ineligibility offense in 2009, no one with this conviction can work present day even if they were hired prior to the effective date of the statute. PennSERVE 2017 Grantee Training

Questions?? Hopefully things are clearer. If you have a question on any of this material it is essential to see clarification, reach out to your program officer and set up a time to discuss. Also if you have new staff, please share this information with them as it will be helpful in their onboarding 39 PennSERVE 2017 Grantee Training 2017 PennSERVE Grantee Training August 2017 39

Key Concepts of Financial Management PennSERVE August 2017

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