FISCAL MONITORING HIVCS CAG 9/22/10

1. FISCAL MONITORINGHIVCS CAG 9/22/10

2. REASONS FOR FISCAL MONITORING • Ensure organizations adhere to Federal Office of Management and Budget (OMB) guidelines around: • Allowable cost • Time and effort reporting • Appropriate allocation methodology for shared costs • Ensure organizations have established internal controls in place to appropriately manage federal funds

3. TYPES OF CONTRACT REIMBURSEMENT • Cost Based: reimbursement for actual expenditures incurred by programs • Performance-Based (Fee-for-Service): reimbursement for the number of services provided at the agreed upon reimbursement rate • Performance-Based (Deliverables): reimbursement for achieving/completing agreed upon program milestones.

4. METHODS OF FISCAL MONITORING • Cost-Based Contracts: • Support Documentation Review • Fiscal Site Visits • Performance-Based Contracts: • Mid-year Expense Report • Fiscal Questionnaire • Both Cost and Performance-Based Contracts: • Review of Organization’s annual audit reports

5. FISCAL MONITORING FOR COST-BASED CONTRACTS • Support Documentation Review: • Annually, HIVCS reviews supporting documentation for all cost-based subcontractor claims for one (1) month of a given contract year. • Documentation must consist of payroll records, payroll tax documentation, vendor invoices, and general ledger and cancelled checks which must reflect an allocation methodology for shared costs. • Payments will be withheld and/or disallowances applied as a result of incomplete or missing backup documentation.

6. FISCAL MONITORING FOR COST-BASED CONTRACTS • Fiscal Site Visit: • Every three years, HIVCS conducts a site visit to review documentation for reported expenditures. Review is conducted on-site at the agency. • Fiscal site visits consist of a review of two months of expenses (one month to satisfy the fiscal site visit requirement and one month to satisfy the one monthly “support documentation” review requirement).

7. FISCAL MONITORING FOR COST-BASED CONTRACTS • Fiscal Site Visit Continued.. • Contractors are instructed to obtain original back-up documentation for all reported expenditures, including personnel services file for budgeted staff. • HIVCS staff reviews personnel files, payroll records, payroll tax documentation, vendor invoices, and general ledger and cancelled checks which must reflect an allocation methodology for shared costs.

8. HIVCS FEEDBACK AND TA • Subcontractors who have substantial documentation deficiencies will be required to submit additional or monthly backup documentation to support monthly expenditure reports until HIVCS is confident the deficiencies have been addressed. • Subcontractors are allowed to modify budgets to maximize contract MRA in the event of disallowances. • Subcontractors allowed to reconcile and revise reported expenses as necessary (i.e. removing disallowed costs) • HIVCS provides TA for completing modifications

9. FISCAL MONITORING FOR PERFORMANCE-BASED CONTRACTS • Mid-Year Expense Report: • A report that summarizes costs incurred for running the program for the first six months • Annual • The report will show cost by service family by budget categories (e.g., Personnel Services, Travel), not individual line item. • a general ledger (G/L) must accompany the report. Report and G/L will be reviewed to ensure compliance with regulations regarding unallowable costs and NOT to verify adherence to contract budget or correspondence to YTD revenue.

10. FISCAL MONITORING FOR PERFORMANCE-BASED CONTRACTS Fiscal Questionnaire: • Agency self-assessment of fiscal and administrative controls, asset management and MIS protocols • Administered per contractor • Agency completes the full questionnaire every two years • Contractors given ample time to complete and submit the questionnaire to HIVCS

11. HIVCS FEEDBACK AND TA Mid-year Report: • HIVCS Fiscal Analyst reviews the general ledger for any “red flag” items (i.e. unallowable costs) • If unallowable expenses are found in the G/L contractors instructed to transfer these expenses to another funding source Fiscal Questionnaire: • HIVCS Fiscal Analyst reviews completed questionnaires and discuss any issues of concern with contractor, including referrals for technical assistance.

12. FISCAL MONITORING – ANNUAL AUDIT REVIEW – BOTH COST AND PERFORMED-BASED CONTRACTS Public Health Solutions/HIVCS requires that all contractors submit annual audit packages. The audit package consists of the following documents: • Agency-wide Financial Statements • A-133 audit report (if applicable) • Management Letter If an organization is not required to prepare an A-133 audit report, the following documents must be submitted: • Exemption Letter (signed by ED, CFO, or Auditor) • Schedule of Expenditures of Federal Awards • The audit package is submitted to Public Health Solutions/HIV Care Services within thirty (30) days after its completion, but no later than (9) months after the end of the audit period.

13. HIVCS FEEDBACK AND TA • Contractors are sent multiple communications/reminders to submit the audit package. • An agency is considered out of compliance with our audit requirements if it fails to submit the audit package by the required due date. • Non-compliance for failing to submit the audit package will result in disciplinary action, which includes HIVCS holding payments, and a Corrective Action/Compliance Plan request. • Monthly reimbursements remain on hold until the requested information is received by HIVCS.

14. QUESTIONS / COMMENTS Questions