“Bridging the Gap”Budget and Finance Workshop

January 2006

AGENDAIntroductions

Fiscal Reimbursement and Reporting Manual

Questions and Answers

Break

Budgets and Budget Development

Questions and Answers

FINANCE

PROGRAM

Contractor

VendorsSubcontractors

Finance Staff

Executive Director

Communication County Auditor/Controller Office

Controller

County Commissioners

Program Officers

EvaluationARC

CS&O

ChiefProgram Officer

INTRODUCTION

INTRODUCTIONDesignated 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”

INTRODUCTIONDesignated Responsibilities

• General Agreement (AKA Contract)– Foundation & Basis for all responsibilities

• Scope of Work• Budget & Narrative• Insurance• Evaluation & Data Analysis• Sustainability• Working within Legal Parameters

INTRODUCTIONReporting

• 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

INTRODUCTIONFiscal & Program Management

• Sound Fiscal Practices & Internal Controls

• Effective Project Implementation

• Adequate reporting systems for project evaluation at all levels

INTRODUCTIONReturning 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 & REPORTINGGeneral Provisions

• All contractors will submit claims for reimbursement of actual expenditures incurred and paid

• Cash basis

• And follow Generally Accepted Government Accounting Standards

ACCOUNTING & REPORTINGRecord 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 & REPORTINGAudits & 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

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

Allowable PaidAdvance $ - $ 20,000.00

$ 10,090.00 $ 8,072.00 $ 28,612.62 $ 22,890.10 $ 45,224.02 $ 36,179.00 $ 24,163.36 $ 10,858.90

Total $ 98,000.00 $ 98,000.00

First QuarterSecond QuarterThird QuarterFourth Quarter

4th Quarter Claim and Year-End ReconciliationFirst Five Project

Award Amount $100,000Description

PROGRAM MANAGEMENT & FISCAL EXPERTISEContract 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 EXPERTISEReporting 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 COSTSDefined

• 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 COSTSLimits

• 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 COSTSReporting

• 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 VSNON-REIMBURSIBLE

COSTS

SupplementingNew ProgramsExpansionEarly Screening

SupplantingNon-Budgeted Items>10% overagesInterest, Bank Fees, Etc.

FINAL REPORTS

FINAL REPORTSInformation

• 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