CIL Financial Management Presented by: Melissa & Tim Glisson September 21-22, 2010

1. CIL-NET Presents… CIL Financial Management Presented by: Melissa & Tim Glisson September 21-22, 2010

2. Introduction - I “The applicant will practice sound fiscal management “ Rehab. Act Sec. 725 Standards & Assurances

3. Introduction - II Transparency & Accountability ARE KEY ! CIL-NET at ILRU

4. Introduction - III Systems Must Provide: Accurate Current & Complete Disclosure (OMB A – 110) CIL-NET at ILRU

5. Three Objectives of Financial Management • Effective & Efficient Operations- You • Reliable Financial Reporting- Public • Regulatory Compliance- Law CIL-NET at ILRU

6. Everyone Needs The Basics • Board of Directors • Executive Director & Fiscal Staff • Leadership Team • Staff CIL-NET at ILRU

7. Efficient Accounting System • User & System Friendly • Meets Needs of Agency • GAAP • Fulfills Reporting Requirements CIL-NET at ILRU

8. Four Money Matters - I • Federal funds ONLY for expenditures and activities described in goals & objectives of approved contract. CIL-NET at ILRU

9. Four Money Matters - II 2. Fiscal control & accounting procedures must ensure proper disbursement of, and accounting for, federal funds. CIL-NET at ILRU

10. Four Money Matters - III • When In Doubt…Check It Out ….Get it in Writing!! CIL-NET at ILRU

11. Four Money Matters - IV • Relationships are Critical! Make Them Maintain Them Use Them CIL-NET at ILRU

12. Chapter One Board of Directors The Governing Body CIL-NET at ILRU

13. Three Governing Functions • Preserve Integrity of the Trust • Set Policy • Support & Promote Organization CIL-NET at ILRU

14. Preserve Integrity of the TrustOversee / True to Mission • Consumer Control • Systems & Individual Advocacy • Services for All • Civil Rights Orientation CIL-NET at ILRU

15. Question… How does preserving the integrity of the trust relate to fiscal management?

16. Set Policy • Operational decisions • Creating fiscal accounting policies to protect assets & assure viability • Endowment decisions • Purchase, sale, or lease of property CIL-NET at ILRU

17. Support & Promote the CIL • Agency Ambassadors • Community Networking • Time, Talent & Treasure CIL-NET at ILRU

18. Board Structure & Committees • Ad Hoc Committees • Standing Committees CIL-NET at ILRU

19. Ad Hoc Committees • Short term • Specific task e.g. Executive search, policy, building, fundraising • Board or non-board members • Report to full board CIL-NET at ILRU

20. Standing Committees • Long term • Meet regularly • Ongoing issues • Report to the full board • Board members with staff advisory CIL-NET at ILRU

21. Standing Committees, cont’d. • Executive Committee • Program Committee • Nominating Committee • Development Committee • Finance Committee CIL-NET at ILRU

22. Finance Committee • Board members, Treasurer • Works with CFO & ED • Liaison with Auditor • Key role in CIL budget & policies • Reviews monthly financial reports CIL-NET at ILRU

23. Board of Directors A Board of Directors, by both law and organizing documents, is legally liable and responsible forALL CIL Fiduciary Matters! CIL-NET at ILRU

24. Chapter Two – Part I Accounting Basics & Regulatory Agencies CIL-NET at ILRU

25. Why the Basics? • Develop and understand budgets • Read financial statements • Understand contract obligations • Respond appropriately to funders CIL-NET at ILRU

26. What are the Basics? • Accrual Basis of Accounting • Cash Basis of Accounting • Accounting Procedures Manual • Allocable • Allowable • Audit Opinion – Clean • Cognizant Federal Agency • GAAP CIL-NET at ILRU

27. What are the Basics?, cont’d. • Internal Controls • Notes to Financial Statements • Operating Budget / Annual Budget • Program Budget • Program Income • Revenue /Expenses • Overhead / Indirect costs CIL-NET at ILRU

28. Non-Profit Accounting vs.For Profit Accounting • Meet a social need, NOT to make $$ • Heightened Accountability & Stewardship • Managing of cash balances is essential • Donations & Fundraising • Grant Administration ( ie. Allowable) CIL-NET at ILRU

29. Regulatory Agencies State Law The Act State Law 34 CFR 364 - 366 EDGAR 74, 75, 77, 82 OMB Circulars A-110, A-122 & A-133 FASB & GAAP

30. Chapter Two – Part II Fiscal Regulations & Cost Allocation Plans CIL-NET at ILRU

31. CIL Funding Title VII Funding For CIL’s Title VII Part C General operating to fulfill Sec. 725 The Act Title VII Part B Specific activities to fulfill Sec. 713 The Act CIL-NET at ILRU

32. Fiscal Regulations “CAN WE DO THIS ? ” “MUST WE DO THAT ?” Where Do We Look? & Why or Why Not? CIL-NET at ILRU

33. EDGAREducation Department General Administrative Regulations • Part 74 – Uniform Administrative Requirements • Part 75 – Federal Grant Programs • Part 77 – Federal Grant Definitions • Part 82 – Lobbying & Advocacy for D.O.E. grantees 33

34. EDGAR 74 - I • Uniform Administrative Requirements • Standards for Financial Management • Program Income Accounting • Written Procedures • OMB 122 Compliance • Record Retention • Required filings 34

35. EDGAR 74 - II • Financial Management Systems: • Accurate • Current • Complete Disclosure • Source Documentation - $ where & what 35

36. EDGAR 74 - III • Allowable Uses of Program Income • Used to further project or program • Used to finance non-Federal share • Deducted from total allowable costs 36

37. EDGAR 74 - IV • Requires written procedures for determining: • Reasonableness • Allocability (Cost Allocation Plan) • Allowability 37

38. EDGAR 75 • Application Notice • Selection Procedures • Conflict of Interest * • Use of Consultants • * More later ... 38

39. OMB Circulars • A – 110 Uniform Administrative Requirements • A – 122 Cost Principles • A – 133 Independent Audits 39

40. OMB Circular A-110 Uniform Administrative Requirements • Standards for Financial Management Systems • Award payment • Cost Sharing or Matching • Procurement procedure • Financial reporting

41. OMB Circular A-122 Cost Principles - I • Determine costs of the award so: • Grant is managed properly • Gov’t pays its fair share • Money is spent legally 41

42. OMB Circular A-122 Cost Principles - II • Allowable • Allocable • Reasonable

43. OMB Circular A-122 Cost Principles - III • Allocable & Allowable does not mean • Reimbursement!! • …HMMM. The Fun Begins!

44. OMB Circular A-122 Cost Principles - IV Costs are Allowable if: • Reasonable for the award’s performance • Adequately documented • Consistent • In accordance with GAAP • Conform to cost limitations / exclusions • Time frame appropriate to contract 44

45. OMB Circular A-122 Cost Principles - V • Reasonable • Costs incurred with proper consideration of the circumstances prevailing at the time.

46. OMB Circular A-122 Cost Principles - VI Consider these when making judgments about reasonableness: • Prevailing circumstances • Ordinary & necessary • Laws & contracts • Responsible and prudent

47. OMB Circular A-122 Cost Principles - VII Allocable Process of assigning a cost, or group of costs, to one or more cost objectives, in realistic proportion to the benefit provided or other equitable relationship. 47

48. OMB Circular A-122 Cost Principles - VIII • Direct Cost • Can be identified specifically to a final cost objective. • Project • Service • Direct activity 48

49. OMB Circular A-122 Cost Principles - IX Indirect Costs Incurred for common cost objectives, not assigned to specific cost objectives. 49

50. OMB Circular A-122 Cost Allocation Plan - I Cost Allocation Plan (CAP): • EDGAR 74.21 & OMB A-110, A-122 (approved by Cognizant Agency) • “Designed to provide that the Federal Government bear its fair share of the costs except where restricted or prohibited by law” • Financial “blueprint” for agency 50