Transcript Joseph PM S Track 5 Session 6.ppt

Best Practices in Preparing For
An Audit or Monitoring Visit
Top 3 Auditor’s Advice
№ 1 – Documentation
№ 2 – Disclosure
№ 3 – Communication
Objectives

Best Practices & Suggestions for Common Audit Findings

Most Requested Documents

General Principles and Guidelines for Documentation

Examples of Best Practices
→ Documenting Timelines
→ Expenditure Report Preparation
→ Inventory Reporting
Audit Tip #1 – Know Your Compliance Requirements
 A-133 Compliance Requirement Table
Number
Description
Federal
State
A
Activities Allowed or Un-Allowed
X
X
B
Allowable Cost/Cost Principles
X
X
C
Cash Management
X
X
D
Davis-Beacon Act
X
E
Eligibility
X
X
F
Equipment & Real Property Management
X
X
G
Matching and/or Level Effort and/or Earmarking
X
X
H
Period of Availability of Federal Funds
X
X
I
Procurement & Suspension and Debarment
X
J
Program Income
X
K
Real Property Acquisition and Relocation Assistance
X
L
Reporting
X
X
M
Sub-Recipient Monitoring
X
X
N
Special Test and Provisions
X
X
Best Practice - Grant Narrative with
A133 Internal Controls Compliance
A – Activities Allowed or Un-Allowed, and Allowable Cost/Cost Principles
Controls:
(1) Authorization of expenditures by knowledgeable individuals
(2) Budget analysis prepared quarterly by grant accountants
Process:
The City of Tampa management establishes budgets for Federal and non-Federal
programs. Federal programs are established in accordance with government
agreements. The Budget Analyst, Financial Accountant and management
compare actual amounts to departmental budgets on a monthly basis for
initiatives funded by the grant. The affiliates that receive a direct grant for
Capacity Build do not maintain a budget to actual report because the budget
amount is fixed as it relates to salary of employees. Discrepancies are
researched to determine if costs are appropriately charged. Each government
program has a budget versus actual schedule, which compares actual expenses
for each line items with the agreement’s budget for that line item.
Current Top 5 Common A-133 Findings
1. Allowable Costs/Cost Principles (19%)
* Staff charged food to a grant because they were unaware that it was unallowable
* Excessive Administrative Costs
2. Reporting (18%)
Top 10 Audit Findings 2005
* Grant progress reports not filed on time
1. Untimely Report Submissions
* SEFA is incomplete or not prepared at all
2. Lack of Documentation
3. Other (13%)
3. Inadequate Recipient Monitoring
* Insufficient monitoring of sub-recipients
4. Inadequate Reports
* Program serving ineligible participants
5. Inaccurate Reports
* Fraudulent payments to vendors
6. Co-Mingling of Funds
7. Excess Cash On Hand
4. Procurement, Suspension/Debarment (9%)
8. Unallowable Cost
* Lack of competitive bidding documentation
9. Inappropriate Changes
10. Conflict of Interest
5. Equipment/Real Property Management (8%)
* No evidence of inventory review or reconciliation to financial records.
* = Example
Best Practices to Reduce A-133 Findings
FINDING
BEST PRACTICE
Fraudulent vendor payments
 New vendor set up requires independent
approval
 New vendor set up is only handled by one
department (Accounting or Purchasing)
 Check for suspended or debarred vendors.
Prior period adjustments or material
adjustments posted during audit
 Reconciliation
 Frequent inter-departmental communication
Untimely reporting and Insufficient
monitoring of sub-recipients
 Develop a Grant Management Tracking
and Compliance System
 Training
Best Practice – Grant Intake Form
City of Tampa – Grant Information Sheet
Grant Title:_____________________ Granting Agency:______________________ Purpose:_______________
Contract #:_____________________ City Department:______________________ Contact:_______________
CFDA #: _____________________ Pass Through Entity:_______________& Identifying Number_________
Federal Funding: $_______________
State Funding: $_______________
Local Match:
$_______________
City’s Match:
$_______________
Total Funding: $_______________
Period of Performance: Start_________ End____________
Grant Type:
Requires Trust Fund/Interest Bearing Account?
Cost Reimbursement
Fixed Fee
Unit of Service
Advance
Yes
No
Financial Reporting Schedule: __________________ Progress Reporting Schedule: _____________________
Financial Contact:_____________________________
General Guidelines for Documentation

All documents should be self explanatory
Include summary or outline for
further clarification
Budget Report
May 21 – 23, 2012
Approved By:
Deirdre Joseph_May 23, 2012_
UASI2012BRv6.doc
Always put the last version in the footer
Page 1 of 15
Sign in ‘Sharpie’ or dark ink
Number pages in X of Y format
General Guidelines for Documentation

Explain Acronyms
FAMIS – Financial Accounting System (general ledger)
General Ledger Account #
FAMR2701
City of Tampa ** FAMIS PAYROLL INTERFACE **
Run Date:
5/23/12
EXPENSE DISTRIBUTION REPORT
Employee Name
Employee
ID
POCN
Period
Earn
Number
Ending
Type
>>>SUBOBJECT: 01200
Hours
Rate
Earning
Benefits
Charged
HOL = Holiday Pay
Joseph, Deirdre
26938
48990
06/13/11
HOL
16.00
$10.00
$160.00
$ 12.50
Joseph, Deirdre
26938
48990
06/13/11
REG
42.00
$10.00
$420.00
$ 95.50
>>>SUBOBJECT: 01212
Joseph, Deirdre
26938
48990
06/13/11 ANN
22.00
$10.00
$220.00
$ 14.00
>>>SUBOBJECT: 04000
Joseph, Deirdre
26938
48990
06/13/11 TPD
0.00
Note 1 = Travel cost not considered part of salary.
ANN = Annual Leave
(Note 1)
$55.00
Salary Calculation:
Holiday Pay
$ 160.00
Holiday Benefits
$ 12.50
Annual Leave
$ 220.00
Annual Leave Benefits $ 14.00
Total Salary
$ 406.50
General Guidelines for Documentation
References should be consistent throughout

Memo
To:
Chanda Brown
From: Deirdre Joseph
Date: May 23, 2012
Reference
A
B
Division of Emergency Management
Detail of Claims
Form 4A
Category: Equipment
Grantee: City of Tampa
Agreement: XX-XXX
Cost Incurred During the Period of: May 21 – May 23, 2012
Vendor
Date Paid Check
Amount
Motorola
5/5/12
345998
$88,000
Fisher Scientific
5/16/12
298488
$50,000
Re:
UASI 2011 (contract XXXX)
__________________________
A.
Motorola Communications, Inc.
* Canceled Check (page 1)
* Invoice (page 2)
* Asset Paperwork (page 3)
* Purchasing Paperwork (pages 4 – 5)
* Grant Budget (page 6)
B.
Total Expenditures $138,000
1.
Form must be compiled from Form B by Category
2.
Form must accompany Reimbursement Request
Fisher Scientific
* Canceled Check (page 6)
General Guidelines for Documentation
Common Audit Request


Grant files should be
easily accessible
Grant contract should
always be referenced
Contract XX-XX
Agreement
Contract XX-XX
Budget Adjustments
Contract XX-XX
M&A Calculation
Contract XX-XX
Sub Agreements

Use audit checklist for
folder contents
General Guidelines for Documentation
Common Audit
Request - Earmarking
UASI 2012 Agreement
$7,580,599
CFDA: 97.067
Contract: XX-XXX
…the Management &
Administrative dollar
amount should not
exceed 3% of total grant
allocation…
Ernst & Young
CFDA: 97.067
Audit Program
Matching &
Earmarking and
Level of Effort:
G1: Provide the
earmarking calculation
to show compliance
with requirement.
CFDA: 97.067
Contract: XX-XX
Grant: UASI 2012
Award: $7,580,599
M&A Calculation:
Award:
$7,580,599
M&A%:
.03%
Allowable
$227,418
Expended
as of 5/30/12
(Note 1)
$5,000
Note 1 – GL attached
General Guidelines for Documentation

Common Request – Project Selection Methodology
Projects A, B, C vetted for grant inclusion
Project A
Project B
Project C
Projects A & B chosen for grant inclusion
Project A
Project B
Project C
Not Chosen
•Withdrawn
•Other
Funding
•Not Viable
•Not Enough
Votes
General Guidelines for Documentation

Common Request – Project Selection Methodology
Step 1 – Notify recipients of grant guidance via email or
letter and gather statistics (10 committees notified).
Project Submission Form
•Project Title
Step 2 – Give consistent guidance on documenting projects
on standard form.
•Contact Name/Phone Number
•Project Phase (ongoing, new)
•Category (Equipment, Training, etc)
Step 3 – Document how projects are selected
•AEL
•Request Amount
•Description, Completion Time
•Applicable State Strategy
•Applicable National Strategy
Step 4 – Project Chosen – YES or NO
If No document reason______________.
General Guidelines for Documentation

Common Request – Project Selection
Project Submission Form
Suggestions for Additional Information
• How does this project support the State approved strategic plan?
• How does this project support National priorities?
• What is the risk of not implementing this project?
• Can this project be sustained if grant funding is no longer available? If
so, what contingency plan is in place?
Best Practices: Timeline (Narrative Format)
Page #
Date
Explanation
1
11/19/2009
Award Letter Received from State
2
12/4/2009
Resolution prepared and submitted to Doc Genda
3
12/17/2009
RESO 2009-1214 – Resolution approving Award Letter
4
12/31/2009
Agreement Received from the State
5
1/7/2010
Award Letter signed by Mayor
6
1/12/2010
Award Letter mailed to the State for signature
7
1/13/2010
Resolution prepared and submitted to Doc Genda
8
2/18/2010
Resolution for Agreement approved by City Council
9
2/23/2010
Agreement sent to the Mayor for signature
10
3/2/2010
Mayor signed Agreement
11
3/5/2010
Agreement sent to the State for signature
12
4/14/2010
Executed (signed) Agreement received from the State
Ready and Authorized to Spend Funding!
.
Best Practices: Timeline (Chart Format)
Nov 2009
11/19/09
Award
Letter
Received
Dec 2009
12/4/09
Award
RESO
Approved
Jan 2010
Feb 2010
Mar 2010
April 2010
12/31/09
Agreement
Letter
Received
From State
1/12/10
Award
Letter
Mailed to
State
2/18/10
Agreement
RESO
Approved by
City Council
3/2/10
Agreement
Signed by
Mayor
4/14/10
Agreement
(executed)
Received
from State
Best Practices: Inventory
City of Tampa - UASI Grant Inventory
As of May 23, 2012
Inventory Instructions:
Please manually inspect your assets and confirm that you have the equipment listed below by
comparing the asset tags. If asset is located, place an “X” in the column labeled “Inventoried”.
If there is a discrepancy, write “NO” and write an explanation in the “Discrepancy/Notes”
column. Documentation of any discrepancies (e.g. Asset Disposal Paperwork, Police Report of
Stolen Items) must accompany this report. Upon completion, sign and date the bottom of this
schedule.
■ Asset# ■ Description ■ Amount ■ Location ■ Grant ■ Inventoried ■ Discrepancy/Notes
1. A1BC P25 Receiver $60,000 Pinellas
UASI 10
X
2. A4HI
Satellite
$ 4,500 Pinellas
UASI 10
X
3. A3FF Robot
$50,000 Pinellas
UASI 10
NO
Item Stolen
4. A2ER Raft Tools
$ 2,000 Pinellas
UASI 10
X
5. A8KO X-Ray
$17,000 Pinellas
UASI 10
X
Inventory Completed By:____________________Date___________
Best Practices: Inventory
Grant Asset Inventory Report – Sample Testing
Date of Review:___________________ Agency Name: ___________________ Agency Contact: __________
Please fill out the following information:
A. Has the agency disposed of any grant equipment?____ NO (go to B) YES, attach the Domestic Security
Equipment Discharge Form.
B. The Number of Assets Assigned to this Agency is ______________.
C. The Number of Capital Assets (>$1,000) is
______________.
D. The Number of Assets inventoried during this review is _________ .
Instructions:
1. Attach Inventory Listing for Agency
2. Attach Agency’s last inventory that includes grant assets.
3. For each asset inventoried, review and document the following:

Does the asset contain a City of Tampa Yellow Grant Asset Tag?

Compare the City of Tampa Grant Asset Tag to the Inventory listing. If different, manually correct the
Inventory Listing.

Inspect the equipment (visually or through interview) to determine if asset is still usable.

Ask the agency representative to give examples of how this equipment is being used?
Best Practices - Expenditure Reporting
Minimum Standard Documentation
+
Canceled Check
Additional Suggested Documentation
Allowable Equipment Cost
Quantity Cost Total Cost
Budget
(directly from grant)
Invoice
IJ – Prepare & Respond
Investment
Justification
(for each project)
Asset Tag
Grant Adjustment
Purchase Order
EHP/DHS approval (if applicable)
Grant Modification 1
(if applicable)