Transcript PIN# 2013-01 - Pennsylvania Association of Community Health

Pennsylvania Association of
Community Health Centers
PIN 2013-01 – Health Center Budgeting and
Accounting Requirements
Presented by
David Fields, CPA, Senior Manager
October 9, 2013
1 // experience perspective
PIN 2013 - 01
 Purpose:
 Clarification & documentation?
 Who?
 All CHCs including look-a-likes
 What?
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
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Budgeting
Documentation & accounting records
Accounting for CHC scope of project funding
Other lines of business outside of scope
PIN 2013 - 01
 Why?
 GAO & OIG pressure to improve program integrity
measures
 Warnings?
 Your organization
 Who knows
 Who is responsible
 Ignorance of law is no excuse
 NACHC & BKD responses
 To do…
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HEADLINE ISSUE – COMPLIANCE
 OIG audits of CHCs
 New era of accountability – phrase spoken with
ARRA bill
 Seeing fruits of change – OIG est. 57 reports for 2013
 Accountability, not new rules
 HRSA scrutinized by OIG
 OIG audits of CHCs
 Significant questioned costs
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THE RULES
 Federal laws & regulations
 Section 330 of the Public Health Services Act (42 U.S.C. 254b)
 Program specific: CHC (42 CFR 51c) & Migrant (42 CFR 56)
 Grant administrative regulations (OMB Circular A-110) :
 45 CFR 74 ~ Non-profits
 45 CFR 92 ~ State, Local, Tribal Government
 Cost principles: 2 CFR part 230 (OMB Circular A-122)
 Audit requirements: OMB Circular A-133
THE RULES
 Awarding agency guidance
 HHS Grants Policy Statement
 BPHC Policy Information Notices (“PINs”) & Program
Assistance Letters (“PALs”)
 Notice of grant award (“NGA”) terms & conditions
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FEDERAL REGULATION MAP
Office Supply
Company
HHS / HRSA / BPHC
Gov’t Contract
- Paper
Section 330 CHC Grant
Non-Profit CHC Organization
(PRIVATE)
Gov’t Contract
- Staples
Local / Tribal Government
CHC Department
(PUBLIC)
Local / Tribal Government
Requirements
501(c)(3) Non-Profit
Requirements
A-110 – Grants
Management
Standards
Agriculture
7 CFR 3019
HHS 45 CFR
74
HUD 24 CFR
84
A-122 – 2 CFR,
Part 230 –
Cost Principles
Standards
A-133 – Single
Audit
A-102 –Grants
Management
Standards
A-87 – 2 CFR,
Part 225 –
Cost Principles
Standards
Federal Contractor
Requirements
A-133 – Single
Audit
Federal Acquisition
Regulation - FAR
Agriculture
7 CFR 3016
HHS 45 CFR
92
HUD 24 CFR
85
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PIN 2013-01 A GAME CHANGER
 Expectations gap
 How CHCs are doing things?
 How the Bureau & OIG want CHCs to do things?
 Documentation
 Segregate grant expenditures from non-grant funds
 Clarification needed: definition of non-grant funds
 Program income
 Other income
8 // experience perspective
BUDGETING REQUIREMENTS
 Section IV addresses budgeting requirements and
requires that “appropriate HRSA approvals are
requested and received”
 Is this just for 330 grants funds or for all funds?
 How will this approval be documented – a separate form?
EHB?
 Budget revisions required for all funds or just 330 grant
funds?
 Timing of approvals a concern
9 // experience perspective
GRANT FUNDS VS. NON-GRANT FUNDS
 All Section 330 grant expenditures have to be
documented in your accounting records
 There are different requirements for grant
expenditures vs. non-grant expenditures as OMB
Circulars, CFRs, etc. generally do not apply to nongrant expenditures
 This PIN adds new requirements for documentation
of expenditures of non-grant funds
10 // experience perspective
GRANT FUNDS VS. NON-GRANT FUNDS
 Some CHCs feel like:
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We spent the money
Trust us its all in there
If asked we can “come up with the expenses”
No one ever asked before
 The reality is:
 What do the rules say?
 Someone is asking
11 // experience perspective
NON-GRANT EXPENDITURES
 New PIN could conflict with other grant rules or
donor intentions
 HRSA approval for such activity?
 PIN requires that every expenditure be matched with
a corresponding revenue stream
 This is required to be documented
 All expenditures require a price or cost analysis to be
performed
 What does that mean?
12 // experience perspective
NON-GRANT EXPENDITURES
 Is the expectation that the new PIN requirements on
non-grant fund expenditures be tested by the Health
Center’s external auditors and if so, are violations
questioned costs?
 PIN requires all non-grant funds be fully covered by a
revenue stream – no more deficits?
13 // experience perspective
ACCEPTABLE NON-GRANT FUND EXPENDITURES
 Repair or minor renovations of physical plant not to exceed
$100,000
 Building financial reserves up to 3 months
 Interest payments on cash shortfalls
 Salary cost over HRSA cap
 Fundraising
 Meals to board or employees in special situations
 Incentives valued at $20 or less
 Special one-time costs
14 // experience perspective
OTHER LINES OF BUSINESS
 Health centers are prohibited by the PIN to transfer
benefits received from being a Section 330 grantee
(e.g. program income) to out of scope activities
 All out of scope activities must be self sufficient and
have adequate revenue streams to cover
expenditures, including a reasonable allocation of
overhead, if applicable
15 // experience perspective
PUBLIC COMMENTS - BKD
 Financial perspective
 Outlines significant administrative & grants
management changes
 Raises significant questions about implementation
 If implemented as published will have significant and
far reaching impact
16 // experience perspective
PUBLIC COMMENTS - NACHC
 Provides legislative context for PIN issues
 Strongly worded objections:
1. “It is contrary to law”
2. “It changes agency practice without explanation”
3. “It is a legislative rule that should be issue by
regulation”
 Challenges elements of the public & non-public parts
of the PIN
17 // experience perspective
CONTEXT OF PUBLIC COMMENTS
 Not a license to ignore PIN
 Recognize the environment of more program integrity
measures not less
 Many of the concepts are not being debated
 The level of documentation may be argued, but more
documentation will be required
18 // experience perspective
ITEMS NOT BEING DEBATED
 That A-110 & A-122 rules that apply to federal grant
dollars including time & effort reporting
 Must have plan & budget that meets requirements of
PHS Act section 330(k)(3)(I)(i), even if disagreement
about having two budgets
 That program integrity measures have been increased
 “New Era of Accountability”
19 // experience perspective
ACTION PLAN
 Know the rules…really know the rules
 Who in your Organization is responsible for which rules?
 Where & to whom do you go for answers?
 Document your compliance
 What are your policies?
 Where is you documentation maintained?
 How well is your activity documented?
20 // experience perspective
ACTION PLAN
 Stay informed & connected
 Be aware of NACHC & PACHC updates
 Look for final PIN
 Take action
 Prioritize your weaknesses & fix now
 Despite dispute over some elements of PIN, address items
not up for debate
21 // experience perspective
ACTION PLAN
 Track CHC grant funds closely
 Even if two budgets is challenged, identifying &
documenting grant expenditures is necessary
 Develop a game plan to ensure time and effort
reporting is in compliance
 Begin to consider the recording requirements of the
new PIN and develop a game plan to account for nongrant funds
22 // experience perspective
THANK YOU
Please feel free to contact
David Fields
[email protected]
417.865.8701
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