FINANCIAL MANAGEMENT SANTA CLARA COUNTY CONTINUUM OF CARE JANUARY 25, 2018

Transcription

1 FINANCIAL MANAGEMENT SANTA CLARA COUNTY CONTINUUM OF CARE JANUARY 25, 2018

2 LEARNING OBJECTIVES Understand HUD requirements around financial management of CoC Program grants Invoicing eligible program costs Documenting & tracking match Maintaining staff timesheets Implementing HUD-recommended internal controls

3 AGENDA Eligible costs Match Timekeeping Internal controls Conclusion

4 ELIGIBLE COSTS

5 RADAR: DOCUMENTING ELIGIBLE EXPENSES All costs charged to the CoC grant must be Reasonable Allowable Documented Allocable Reimbursable

6 ALLOWABLE COSTS: ELIGIBLE VS. APPROVED Ø There is a difference between eligible costs & approved costs Ø Eligible Costs: All costs included in the Interim Rule Ø Approved Costs: Costs included in a project s HUDapproved budget Project can only spend CoC funds on approved costs Project can request a grant amendment from HUD to charge to an eligible -- but not approved -- cost with limitations

7 EXAMPLE A A Case Manager has a client that needs a car to get to work but does not have a driver s license. Can you use CoC funds to pay for driver s education? Ø Is this a reasonable cost? Ø Is this an eligible cost? Answer: Yes, it is a reasonable cost, but not an eligible cost

8 EXAMPLE B A Case Manager has a client that is moving out of his apartment. Can you use CoC funds to pay for the move if it s not in your budget? Ø Is this a eligible cost? Ø Is this an approved cost? Answer: Yes, it is an eligible cost, but not an approved cost

9 GENERAL BILLING PRACTICES Staff costs related to carrying out each eligible activity are eligible as part of that activity Staff time should be billed to eligible activities, not to project administration Where possible, costs of administering eligible activities should be billed to relevant eligible activities

10 CATEGORIES OF ELIGIBLE COSTS Rental Assistance & Leasing Operating Costs Supportive Services Administrative Costs

11 RENTAL ASSISTANCE & LEASING COSTS Rental Assistance: Funds pay part of the rent for a unit in which a client resides Limited to Rent Reasonableness (may exceed Fair Market Rent) Funds may also be used for security deposit, first/last month s rent, up to 30 days vacancy, up to one month of rent to pay for damages to property Leasing: Funds pay for the full rent of a unit in which a client resides Limited to the lower of Fair Market Rent or Rent Reasonableness Funds may also be used for security deposit, first/last month s rent, Housing Quality Standards inspections, vacancies

12 WHAT IF A PROGRAM HAS EXCESS RENTAL ASSISTANCE FUNDS? Serve more participants Cover costs of rent over FMR (up to Rent Reasonableness) Cover eligible staff activity costs Cover security deposits & property damage Use up to 10% for other approved, eligible activity Other changes (including change in subpopulation served) require HUD approval/grant amendment!

13 OPERATING COSTS Costs associated with the day-to-day physical operation of a facility in which participants are housed Funds can be used for: Maintenance & repair of housing (except if they are covered by rent per the lease) Building security Electricity Gas Water Furniture Equipment Operating funds cannot be used in any SSO project or be combined with rental assistance costs in the same unit/structure

14 SUPPORTIVE SERVICE COSTS Provide services to assist transition from homelessness to supportive housing Must be necessary to assist program participants obtain & maintain housing (annual reassessment is required) Can include costs of labor (salary & benefits) & supplies/materials directly related to providing the services Example: Gas for an agency vehicle used to transport clients for the purpose of providing eligible services

15 ELIGIBLE SUPPORTIVE SERVICE COSTS Assessing service needs Moving costs Food Housing search & counseling services Mental health services Outreach services Case management Legal services Substance abuse treatment services Child care Education services Transportation Employment Assistance & job training Utility deposits Life skills training Outpatient health services

16 CASE MANAGEMENT Counseling Developing, securing, & coordinating services Using the coordinated assessment system Obtaining federal, State, & local benefits Monitoring & evaluating program participant progress Providing information & referrals to other providers Providing ongoing risk assessment & safety planning with victims of domestic violence, dating violence, sexual assault, & stalking Developing an individualized housing & service plan

17 CHILD CARE Establishing & operating child care, & providing child-care vouchers, for children from families experiencing homelessness, including providing meals & snacks, & comprehensive & coordinated developmental activities Children must be under 13 Disabled children must be under 18 Child-care center must be licensed

18 EDUCATION SERVICES Services: Instruction or training in consumer education Health education Component activities: Screening Assessment & testing Substance abuse prevention Individual or group instruction Literacy English as a Second Language General Educational Development Tutoring Provision of books, supplies, & instructional material Counseling Referral to community resources

19 EMPLOYMENT ASSISTANCE & JOB TRAINING Establishing & operating employment assistance & job training programs that assist individuals in: Securing employment Acquiring learning skills (e.g., vocational licenses & certificates) Increasing earning potential Employment screening, assessment, & testing Structured job skills & job-seeking skills Special training & tutoring (e.g., literacy training & pre-vocational training) Books & instructional material Counseling & job coaching Referral to community resources

20 HOUSING SEARCH & COUNSELING SERVICES Tenant counseling Assisting clients to understand leases Securing utilities Making moving arrangements Mediation with property owners & landlords Credit counseling, accessing a free personal credit report, & resolving personal credit issues Payment of rental application fees

21 LEGAL SERVICES Eligible subject matters Child support Guardianship Paternity Emancipation Legal separation Orders of protection & other civil remedies for victims of domestic violence, dating violence, sexual assault, & stalking Appeal of veterans & public benefit claim denials Landlord tenant disputes Resolution of outstanding criminal warrants

22 LIFE SKILLS TRAINING Teaching critical life management skills necessary to function independently in the community Budgeting of resources & money management Household management Conflict management Shopping for food & other needed items Nutrition Use of public transportation Parent training

23 OUTPATIENT MENTAL HEALTH SERVICES Crisis interventions Counseling Individual, family, or group therapy sessions Prescription of psychotropic medications or explanations about the use & management of medications Combinations of therapeutic approaches to address multiple problems

24 OUTPATIENT HEALTH SERVICES Analysis/assessment of health problems & development of a treatment plan Assistance with understanding health needs Providing directly or assisting clients to obtain & utilize appropriate medical treatment Preventive medical care & health maintenance services Provision of appropriate medication Providing follow-up services Preventive & noncosmetic dental care

25 OUTREACH SERVICES Initial assessment Crisis counseling Addressing urgent physical needs Actively connecting & providing people with information & referrals to homeless & mainstream programs Publicizing the availability of the housing & services provided within the geographic area covered by the CoC

26 TRANSPORTATION Client travel on public transportation or in program-provided vehicle to & from medical care, employment, child care, or other eligible services Mileage allowance for service workers to visit clients & to carry out housing quality inspections Purchasing/leasing a vehicle to transport clients and/or staff serving program participants (including gas, insurance, taxes, & maintenance) Costs of staff to accompany or assist clients to utilize public transportation If public transportation options are not sufficient within the area, a one-time payment on behalf of a client needing car repairs or maintenance required to operate a personal vehicle, subject to limits

27 MISCELLANEOUS Providing meals or groceries to program participants Substance abuse treatment services Intake & assessment Outpatient treatment Group & individual counseling Drug testing Utility deposits

28 ADMINISTRATIVE COSTS Grantees may use 10% of their award to conduct: General management, oversight & coordination Training on CoC requirements Environmental review Administrative costs do not include staff & overhead costs directly related to carrying out rental, leasing, supportive services, or other eligible costs

29 GENERAL MANAGEMENT, OVERSIGHT & COORDINATION Salaries, wages, & related costs of staff engaged in program administration: Preparing & amending program budgets & schedules Developing systems for assuring compliance with program requirements Developing agreements with subrecipients & contractors to carry out program activities Monitoring program activities for progress & compliance with program requirements Preparing reports & other documents directly related to the program for submission to HUD Coordinating the resolution of audit & monitoring findings Evaluating program results against stated objectives Managing or supervising persons whose primary responsibilities with regard to the program include such assignments as those above

30 GENERAL MANAGEMENT, OVERSIGHT & COORDINATION CONT D Travel costs incurred for monitoring of subrecipients Administrative services performed under third-party contracts or agreements, including: General legal services Accounting services Audit services Other costs for goods & services required for administration of the program, including: Rental or purchase of equipment Insurance Utilities Office supplies Rental & maintenance (but not purchase) of office space

31 INDIRECT COSTS What are indirect costs? Costs incurred for a common purpose benefitting more than one objective & not readily assignable to your project Grouped into pools & sometimes called overhead Costs of CoC-funded or non-coc funded activities Examples: staff salary for office administration, office supplies used for multiple projects

32 INDIRECT COSTS Indirect costs DO NOT increase the grant amount They are calculated as a percentage of specific, eligible direct costs For many CoC-funded programs, these are very small amounts!

33 INDIRECT COST RATE OPTIONS Negotiated indirect cost rate Based on a cost rate proposal approved by a cognizant agency Common for large organizations with many federal awards & complicated accounting systems Required for government departments & nonprofits who have had a negotiated rate in the past Flat de minimis rate (10%) of modified total direct costs (MTDC) Only available to recipients that have never had a negotiated indirect cost rate with a cognizant agency For organizations that would like to cover indirect expenses, but do not have an existing indirect cost rate or prefer not to go through the process of developing a rate

34 USING THE 10% DE MINIMIS RATE What are Modified Total Direct Costs (MTDC)? Subset of all CoC grant direct costs Includes direct salaries & wages, fringe, services, travel & subcontracts up to $25,000 Excludes equipment, capital expenditures, rental & leasing costs, scholarships, charges for patient care, portion of subcontracts in excess of $25,000 10% x Modified Total Direct Costs (MTDC) Amount of Indirect

35 DRAWING DOWN INDIRECT COSTS How do I ask for indirect costs for my CoC grant? Indicate intent to draw down indirect costs in the CoC Project Application (indirect costs should be included in the project budget) Indicate whether you have a negotiated federal indirect cost rate or will be using the de minimis rate of 10% of modified total direct costs If you have a negotiated federal indirect cost rate, the rate agreement must be attached to the project application

36 FREQUENTLY ASKED QUESTIONS Q: If we accept the de minimis rate under the CoC grant, would we have to use this rate for all other federal awards? A: YES. The de minimis rate must be used consistently for all federal awards until the entity chooses to negotiate for a rate. Q: Can indirect costs be used as match? A: YES. The method of calculating the amount of match available & the documentation required is the same as if you were including indirect costs as an expense on your budget. Q: Is there a way to verify if an organization has ever had a negotiated indirect cost rate with the federal government? A: YES. Contact the federal agency that was likely to have been the cognizant agency for indirect costs for its previous Federal awards.

37 MATCH

38 INTERIM RULE REQUIREMENTS of the CoC Interim Rule outlines program match requirements Purpose is to confirm that recipients of CoC funds have local support All eligible costs except leasing (but including administrative costs) must be matched with at least 25% cash or in-kind match on a grant-by-grant basis Failure to meet match requirements is one of the most prevalent HUD monitoring findings

39 EXAMPLE A Total amount requested from HUD: Ø Rental Assistance funding = $95,000 Ø Project Administration funding = $5,000 Ø Total amount requested = $100,000 Total amount requested from HUD x.25 = Minimum Match Requirement Ø $100,000 x.25 = $25,000

40 EXAMPLE B Total amount requested from HUD ØLeasing funding = $40,000 ØSupportive Services funding = $55,000 ØProject Administration funding = $5,000 ØTotal amount requested = $100,000 Total amount requested from HUD, excluding amount requested for leasing Ø$100,000 - $40,000 = $60,000 Total amount requested from HUD x.25 = Minimum Match Requirement Ø$60,000 x.25 = $15,000

41 MATCH CONTRIBUTION BASICS Match contributions are treated as additional federal dollars All expenditures must support CoC program participants & be applied to eligible activities Recipients must keep precise & up-to-date accounts of these funds, review these records regularly, & report on match to HUD Recipients must monitor subrecipient match

42 MATCH VS. LEVERAGE Match is distinct from leverage! Match consists of contributions restricted to one CoC grant that must be treated as if they were federal dollars Leverage comprises general donations (unrestricted funds & services)

43 CASH MATCH: DEFINITION Actual cash contributed to a CoC grant & spent on eligible CoC Program costs Possible sources: Other federal funds (excluding CoC Program funds) State or local housing trust funds or general funds Private sources (e.g., foundation funding) Program income (i.e., rent or occupancy fees) Funds must not be prohibited from use as match under the laws governing those funds

44 CASH MATCH: DOCUMENTATION Records must demonstrate funds were secured & used for eligible activities Prior to grant execution, written documentation must be provided on the source agency s letterhead, signed & dated by an authorized representative of said agency, including: The amount of cash to be provided to the recipient for the project The specific date the cash will be made available The actual grant & fiscal year to which the cash match will be contributed The time period during which funding will be available The allowable activities to be funded by the cash match

45 IN-KIND MATCH: DEFINITION The value of any real property, equipment, goods, or services contributed to a CoC grant Costs attributed to such contributions must be eligible under the Interim Rule

46 IN-KIND MATCH: DOCUMENTATION Recipient must keep records of the sources & use of in-kind contributions Including records documenting service hours provided

47 IN-KIND GOODS & EQUIPMENT MATCH: DOCUMENTATION Prior to grant execution, written documentation of the donation of goods & equipment must be provided on the source agency s letterhead, signed & dated by an authorized representative of said agency, including at a minimum: The value of the donated goods How the value of the contributions was determined The specific date they will be made available The grant & fiscal year towards which each contribution applies The time period during which they will be available Allowable activities to be provided by the donation Value of commitments of land, buildings, & equipment

48 IN-KIND SERVICES MATCH: DOCUMENTATION Prior to grant execution, the services to be provided by a third party must be documented by a Memorandum of Understanding (MOU) between the recipient & the service provider, including: Recipient & service provider s identifying info with point(s) of contact The unconditional commitment by the third party to provide the services Description of services to be provided Specific scope of services to be provided & by whom How the actual value of the services was determined Documentation requirements & responsibilities of service provider & recipient Timeliness standards of service provider & recipient for providing services

49 DOCUMENTATION OF SCOPE OF SERVICES Specific contract, grant/fiscal year to be matched Length of time services provided/term of contract Point-in-time number of clients receiving service Total clients receiving service over grant term Profession & qualification of persons providing service Estimated value of services provided (such as hourly rate)

50 DOCUMENTATION OF VALUATION OF SERVICES Services must be valued at rates consistently paid for similar work in recipient s organization If the recipient does not have employees performing similar work, rates must be consistent with those ordinarily paid by other employers for similar work in the same labor market (requires documentation of local rates) To extent possible, volunteer services must be valued by these same methods

51 TIPS & TRICKS Ø Mainstream benefits are usually not match as they are typically provided to the program participant rather than committed to the recipient exceptions may apply Ø It is recommended to periodically check with providers of in-kind match, not only to ensure that they are providing adequate documentation, but also to determine if: ØTheir fee structure and/or standardized pricing has changed ØThe type(s) of services provided to program participants has changed Ø Any given contribution can only comprise match for one project in one year

52 TIPS & TRICKS CONTINUED Ø Overmatching is not recommended it does not increase competitiveness of a grant application & is a contractual commitment which limits the use of funds Ø Match does not need to be made per budget line item, but this may facilitate tracking Ø Coordinate the recordkeeping responsibilities pertaining to the sources & uses of contributions between finance & program staff, & track match at least quarterly

53 KEY ISSUES FOR COMPLIANCE Remember, you must maintain documentation: Establishing the match contributions were from eligible sources & equal to the match required For cash match, demonstrating funds were used for eligible costs under the CoC Program For in-kind match, demonstrating costs would have been eligible if paid with cash Establishing the value of in-kind contributions was calculated properly

54 TIMEKEEPING

55 WHY COMPLETE A TIMESHEET? Without timesheets, your organization: Is prevented from effectively managing costs Is noncompliant with grant requirements Submits inaccurate reimbursement requests May have to pay back grant funds With timesheets Personnel costs are visible so adjustments are easier Employees spend less time trying to remember what actually happened Supervisors find it easier to keep track of who worked what project & the hours spent

56 TIME & ACTIVITY REPORTS Time & activity reports should be maintained for at least 3 years & track employee time by cost objective: Employees that work in a single indirect cost activity should be documented with a time record Employees that work on more than one activity (direct or indirect) should be documented with a time & activity report supported by activity records (e.g., client case notes, sign-in sheets, calendars, etc.)

57 PRO-RATING COSTS Supportive Services costs Based on the percentage of real, actual time documented using time & activity reports reflecting the funding sources Operating costs Based on the percentage of space or time used documented using logs, plans, etc.

58 PREPARING TIME & ACTIVITY REPORTS Reports must: Be prepared at least monthly Be signed & dated by employee & supervisor Account for actual time worked (as opposed to percentage of day) Track ineligible costs in addition to eligible costs & account for total activity Demonstrate multiple program activities Demonstrate multiple funding sources when applicable Demonstrate eligible activities & eligible participants served (often with back up documentation)

59 COMMON TIMEKEEPING MISTAKES Ø Billing 8 hours in a single day to one grant Ø Billing a fixed percentage of time to a grant Ø Not reconciling time & activity reporting with invoicing/drawdowns Ø Excluding sick & vacation time Ø Forgetting to record: ØAn eligible activity ØAn eligible grant ØA project &/or client ØIneligible time & activities Ø Missing documentation to accompany time & activity reporting Ø Forgetting the employee & supervisor signatures

60 REMEMBER! Track time by grant, client, & eligible activity Track time spent on eligible & non-eligible activities

61 INTERNAL CONTROLS

62 WHAT ARE INTERNAL CONTROLS? Process that makes sure public resources go to the correct places Policies, practices & procedures developed by management Example: The Green Book is a document created by the federal government that sets internal control standards for federal agencies

63 INTERNAL CONTROLS = POLICIES, PAPERWORK, EVERYDAY PRACTICES Who can spend money/ resources? Who can approve expenditures? What can resources be spent on? How can resources be spent? What documentation must be on file?

64 WHY IMPLEMENT INTERNAL CONTROLS? Internal controls can help: Protect assets Ensure compliance with policies, rules, regulations & laws Prevent errors & deceptive practices Verify accuracy of accounting Produce reliable & timely financial data Provide accurate information for oversight of programs & operations Achieve organizational mission & goals

65 WHAT RESOURCES ARE AVAILABLE TO SET UP INTERNAL CONTROLS? Cost Principles Office of Management & Budget (OMB) 2 CFR Part 200 Administrative Standards Audit Requirements Resources Control Environment Government Accountability Office(GAO) Green Book Risk Assessment Control Activities Communication Monitoring

66 STANDARDS OF INTERNAL CONTROLS Control Environment Risk Assessment Control Activities Information & Communication Monitoring

67 CONTROL ENVIRONMENT Develop an environment that has integrity, ethical values & oversight of internal controls system Recruit, train, & retain competent employees who understand & are held accountable for their responsibilities Examples: Staff receive training & evaluations Program resources are managed according documented policies & procedures

68 EXAMPLES OF HUD GRANT SYSTEM CONTROLS qhud Interim Rule Requirements on: Eligible costs/activities Eligible clients Mandatory policies FMRs, Rent Reasonableness Grant management/monitoring qgrant agreements/contracts qauditor reviews qsystem Performance measures qbudgets

69 BUDGETS AS MODELS FOR CONTROLS Establish objectives & provide a foundation of accountability Programs must operate within HUD-approved budgets Expenditures must be compared to budgeted amounts Programs must serve number of participants approved by HUD Drawdowns in LOCCs are constrained by HUD-approved budget Approved & reviewed by external parties HUD, accountants, Board members, public

70 RISK ASSESSMENT The four principles for assessing risk are: Identify risk & tolerance to risk Identify, analyze & respond to risk Consider potential for fraud when identifying, analyzing & responding to risks Identify, analyze & respond to changes that could impact internal controls system

71 ASSESSING RISK How should you oversee a risk management process? Have each function identify the risks to operations & performance Brainstorm with staff to determine possible external risks Learn about emerging risks through employee & customer surveys Consider the potential for fraud when identifying, analyzing & responding to risks Rate & rank the risks, & discuss controls needed to eliminate or reduce the risk Develop corrective actions & assign someone to be in charge of implementing each

72 CONTROL ACTIVITIES Control activities are designed by management to respond to risks. Examples are: Segregation of Duties Control of Cash & Funds Documentation Control of Physical Assets

73 EXAMPLES ØUse checks & credit cards, not cash ØRequire backup documentation (receipts, invoices, cost comparisons, requests for purchases) ØBank reconciliation performed frequently by someone without authority to make purchases ØEnsure all purchases are tracked to grant source ØAllocate time to appropriate grants & activities: Eligible & ineligible activities Direct & indirect activities

74 INFORMATION & COMMUNICATION Communication should flow up, down & across the organization. Remember to always: Use the best, most up-to-date information Communicate the information internally Communicate the information externally

75 MONITORING The two principles for monitoring are: Establish regular reviews of the system & evaluate results Correct internal control issues in a timely manner

76 DON T LOSE SIGHT OF YOUR MISSION What is the mission of your organization? Are your systems helping the organization achieve its objectives? What objectives is your organization funded to achieve? Are your resources being used in the best ways to achieve your mission?

77 QUESTIONS?