Corporation for Public Broadcasting. Introduction to Financial Reporting

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1 Corporation for Public Broadcasting Introduction to Financial Reporting Live Webinar Training October 4, 2017

2 Introductions Webinar Presenters Kate Arno, Director, TV CSG Policy & Review Biniam Debebe, Senior Financial Review Specialist Ken Goulet, Senior Financial Review Specialist 2

3 Objectives By participating in this training, you will: Understand purpose and importance of accurate reporting Be ready to prepare your first Annual Financial Report (AFR) or Financial Summary Report (FSR) Improve ability to file a flawless report Know where to find help Meet annual training requirement 3

4 Agenda Overview of Financial Reporting to CPB Non-Federal Financial Support (NFFS) Preparing the Annual Financial Reports AFR Demonstration 4

5 Financial Reporting to CPB Webinar Series Intro to Financial Reporting What is NFFS? TV Grantees & Radio CSG Level C & D In-kind Contributions Radio CSG Level A & B AFR Schedules A, E & F FSR Indirect Administrative Support Institutional Licensees 5

6 CPB Office of Grants Administration cpb.org Greg Schnirring, VP, CSG and Station Initiatives Kate Arno, Director, TV CSG Policy and Review Andrew Charnik, Director, Radio CSG Policy and Administration Nadine M. Feaster, Director, Grants Administration Sharon Simmons, Manager, Grants Administration Biniam Debebe, Senior Financial Review Specialist Ken Goulet, Senior Financial Review Specialist Station information page: cpb.org/stations/ Online webinars: cpb.org/station-resource/csg-and-isis-training-opportunities Help Desk Phone: (866) Fax: (202) CSG Resources 6

7 Where to Find Resources Website cpb.org 7

8 Where to Find Resources Website cpb.org 8

9 Submitting Questions Press Q&A button in the top right of screen At bottom right, choose Q&A Under Ask, select Host Type question in field at bottom of screen Hit send 9

10 Agenda Overview of Financial Reporting to CPB Grantee compliance Important documents Annual filing requirements Non-Federal Financial Support (NFFS) Preparing the Annual Financial Reports AFR Demonstration 10

11 Grantee Compliance The Communications Act 1. Open and closed meeting 2. Open financial records 3. Community advisory boards 4. Equal employment opportunity (EEO) 5. Donor lists and political activities 11

12 Grantee Compliance General Provisions and Eligibility Criteria 1. Eligibility criteria 2. Recordkeeping 3. Operational requirements 4. Diversity and transparency requirements 5. Use of CSG funds and spending restrictions 6. Reporting requirements (AFR/FSR, SABS and SAS) 12

13 Important Documents CSG Agreement and Certification of Eligibility Signed by Head of Grantee and Licensee Official Explains requirements of the Communications Act 13

14 Important Documents Financial Reporting Guidelines Explains reporting requirements, defines NFFS, provides line item instructions Updated annually Principles of Accounting (May 2005) Provides guidance on CPB s requirement to submit audited financial statements, both under Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB) 14

15 Important Documents Discrete Accounting The Communications Act and CSG General Provisions require grantees practice discrete accounting of all CSG revenues and expenditures. Discrete Accounting Defined Discrete accounting requires unique accounting codes that identify CSG funds both revenues and expenses, restricted and unrestricted so that both the grantor and auditor can track CSG funds within the grant recipient s accounting system. 15

16 Important Documents CSG Non-compliance Policy: To increase grantees compliance and to address consequences for grantees non-compliance. 16

17 Legal Form Annual Filing Requirements CSG Agreement and Certification of Eligibility Form Surveys/Reports Station Activities Survey (SAS) (TV & Radio) Station Activities Benchmarking Survey (SABS) (TV) Local Content and Services Report (LCSR) (TV) Financial Forms AFR or FSR 17

18 FY 2018 CSG Cycle 2 nd payment made (30% of CSG) Submit FY 2016 AFR/FSR (5 mo. after FY end) FY 2018 grant offers made (Nov. 2017) FY 2017 AFR/FSR submitted Certify & accept CSG (by June 30, 2018) SABS/SAS/LCSR (by Feb. 15, 2018) 1 st payment made (70% of CSG) 18

19 AFR or FSR & AFS? All TV grantees are required to file AFR and submit AFS Radio grantees: CSG Level Total Revenue Financial Form Financial Statements Required A & B < $300,000 FSR Audited or Unaudited A & B $300,000 FSR Audited C & D N/A AFR Audited 19

20 Submitting Questions Press Q&A button in the top right of screen At bottom right, choose Q&A Under Ask, select Host Type question in field at bottom of screen Hit send 20

21 Agenda Overview of Financial Reporting to CPB Non-Federal Financial Support (NFFS) Definition of NFFS Purpose NFFS Criteria Preparing the Annual Financial Reports AFR Demonstration 21

22 What is NFFS? NFFS is the total of direct revenue and the fair value of property and services received as either a contribution or a payment, which meets specific criteria as to: recipient, form, source, and purpose. 22

23 Purpose of NFFS Determine Grantee s CSG program eligibility Factor in calculating incentive portion of CSG Part of the legal justification for CPB s federal appropriation 23

24 NFFS Criteria Summary NFFS Criteria Contribution Payment (including Exchange Transactions) Recipient Public broadcasting entity or an organization that receives the revenue on its behalf Form Gifts, grants, bequests, donations and appropriations An appropriation or contract payment Source Any source except the federal government or a public broadcasting entity State or local government or agency thereof; or an educational institution Purpose Construction or operation of a noncommercial, educational public broadcast station; or the production, acquisition, distribution, or dissemination of educational television or radio programs and related activities The cash, goods and/or services received by the CSG recipient must be in exchange for a service directly related to producing, developing, or delivering educational or instructional television or radio programming. 24

25 NFFS: The Source Criterion Contributions Ineligible Federal Government Public Broadcasting Entities Eligible State & Local Government Agencies Not for profits & Foundations For Profit Entities Individuals Public & Private Colleges & Universities 25

26 NFFS: The Source Criterion Payments Eligible Ineligible Federal Government Not for profits & foundations that are not educational institutions State & Local Government Agencies Educational Institutions For Profit Entities Individuals Public Broadcasting Entities 26

27 NFFS Criteria Summary NFFS Criteria Contribution Payment (including Exchange Transactions) Recipient Public broadcasting entity or an organization that receives the revenue on its behalf Form Gifts, grants, bequests, donations and appropriations An appropriation or contract payment Source Any source except the federal government or a public broadcasting entity State or local government or agency thereof; or an educational institution Purpose Construction or operation of a noncommercial, educational public broadcast station; or the production, acquisition, distribution, or dissemination of educational television or radio programs and related activities The cash, goods and/or services received by the CSG recipient must be in exchange for a service directly related to producing, developing, or delivering educational or instructional television or radio programming. 27

28 Questions & Answers Q & A Test Your Knowledge 28

29 Question 1 For FY2017, a radio station with CSG level A has total revenue of $500K and NFFS of $275K. What financial forms must the station submit to CPB? A. AFR and AFS since the station is CSG level A. B. FSR and AFS since total revenue is $300K. C. FSR and no AFS since NFFS is < $300K. D. FSR and unaudited financial statements since NFFS is <$300K. 29

30 AFR or FSR & AFS? All TV grantees are required to file AFR and submit AFS Radio grantees: CSG Level Total Revenue Financial Form Financial Statements Required A & B < $300,000 FSR Audited or Unaudited A & B $300,000 FSR Audited C & D N/A AFR Audited 30

31 Question 1 - Answer For FY2017, a radio station with CSG level A has total revenue of $500K and NFFS of $275K. What financial forms must the station submit to CPB? A. AFR and AFS since the station is CSG level A. B. FSR and AFS since total revenue is $300K. C. FSR and no AFS since NFFS is < $300K. D. FSR and unaudited financial statements since NFFS is <$300K. 31

32 Question 2 Which of the following statements are true? A. All revenues in a station s AFS qualify as NFFS. B. The four NFFS criteria are Recipient, Form, Source and Purpose. C. Revenue needs to meet only one NFFS criteria to be eligible as NFFS. D. CPB can add additional restrictions to NFFS. 32

33 Question 2 - Answer Which of the following statements are true? A. All revenues in a station s AFS qualify as NFFS. B. The four NFFS criteria are Recipient, Form, Source and Purpose. C. Revenue needs to meet only one NFFS criteria to be eligible as NFFS. D. CPB can add additional restrictions to NFFS. 33

34 Question 3 A TV station received grants from USDOE, a for-profit entity, a foundation, and a PBE for the production and distribution of educational television. Which statement is correct? A. All contributions for the purpose of production and distribution of educational television are NFFS eligible. B. Contributions from the USDOE and other public broadcasting entity are NFFS eligible. C. Contributions from the foundation and for-profit entity are NFFS eligible. 34

35 Question 3 - Answer A TV station received grants from USDOE, a for-profit entity, a foundation, and a PBE for the production and distribution of educational television. Which statement is correct? A. All contributions for the purpose of production and distribution of educational television are NFFS eligible. B. Contributions from the USDOE and other public broadcasting entity are NFFS eligible. C. Contributions from the foundation and for-profit entity are NFFS eligible. 35

36 Question 4 A Radio station received payments for rental of excess tower capacity to the local government and to a private business. Which statement is correct? A. Payment from the local government is NFFS eligible and private business is NFFS ineligible. B. Payments from both sources are NFFS eligible. C. Payments from both sources are NFFS ineligible. 36

37 Question 4 - Answer A Radio station received payments for rental of excess tower capacity to the local government and to a private business. Which statement is correct? A. Payment from the local government is NFFS eligible and private business is NFFS ineligible. B. Payments from both sources are NFFS eligible. C. Payments from both sources are NFFS ineligible. 37

38 Submitting Questions Press Q&A button in the top right of screen At bottom right, choose Q&A Under Ask, select Host Type question in field at bottom of screen Hit send 38

39 Agenda Overview of Financial Reporting to CPB Non-Federal Financial Support (NFFS) Preparing the Annual Financial Reports AFR/FSR Filing Process AFR Form/Schedules Audited Financial Statement Requirements AFR Demonstration 39

40 AFR/FSR Filing Process General ledger and accounting records maintained throughout the fiscal year... 40

41 AFR/FSR Financial Schedules AFR FSR Direct Revenue Schedule A Part 1 Indirect Administrative Support (if applicable) In-kind Contributions (if applicable) Schedule B Part 1 Schedules C and D Part 1 Expenses Schedule E Part 2 NFFS Exclusions Schedules A, B, C and D Part 3 Reconciliation with Audited Financial Statements (if applicable) Schedule F Part 4 41

42 Required forms for all grantees Schedule A: Direct Revenue Schedule E: Expenses Schedule F: Reconciliation Grantee Profile Signature Page Audited Financial Statements Required forms, if they apply to your station Schedule B: Indirect Administrative Support Schedule C: In-kind Contributions of Services & Other Assets Schedule D: In-kind Contributions of Property & Equipment Large Gift Spread (TV) or Capital Spread (Radio) Accountant s Qualification Statement (AQS) (State/Internal Audit) Extension Request Form AFR Form 42

43 Audited Financial Statements/AFS Must be station specific Must be comparative statements (include prior year) Must be on letterhead, signed & uploaded by the Independent Auditor. Joint Licensees file separate AFRs/FSRs for each distinct CSG grantee but can use a combined AFS. 43

44 Audited Financial Statements Financial Accounting Standards Board (FASB) model financial statements include: Independent Auditor s Report Statement of Financial Position Statement of Activities Statement of Cash Flows Notes to Financial Statements Statement of Functional Expenses (optional but strongly encouraged) 44

45 Audited Financial Statements Governmental Accounting Standards Board (GASB) model financial statements generally include: Independent Auditor s Report Management s Discussion and Analysis (MD&A) Statement of Net Assets (and/or Balance Sheet) Statement of Revenues, Expenses and Changes in (Fund) Net Assets Statement of Cash Flows Notes to Financial Statements Statement of Functional Expenses (optional but strongly encouraged) 45

46 Unaudited Financial Statements Unaudited Financial Statements for FASB model: Required: Statement of Financial Position Statement of Activities Statement of Cash Flows Optional for CPB: Notes to Financial Statements Statement of Functional Expenses Note: Financial statements must be comparative. 46

47 Unaudited Financial Statements Unaudited Financial Statements for GASB model: Required Statement of Net Assets (and/or Balance Sheet) Statement of Revenues, Expenses and Changes in (Fund) Net Assets Statement of Cash Flows Optional for CPB Notes to Financial Statements Statement of Functional Expenses Management s Discussion and Analysis (MD&A) Note: Financial statements must be comparative. 47

48 AFR/FSR Filing Deadlines The AFR or FSR is due 5 months after the end of your fiscal year and penalties apply for late filing. CSG Grantee s Fiscal year-end AFR/FSR due by 6/30/17 11/30/17 9/30/17 2/28/18 12/31/17 5/31/18 Two extensions are available: 1 st extension is for 45 days 2 nd extension is for 30 days 48

49 Requesting Changes to AFRs/FSRs Submit requests by May 15 of voluntary changes to your AFR/FSR or AFS. Changes affecting NFFS must be recertified and re-attested before resubmitting to CPB. 49

50 AFR/FSR Desk Review Process After you submit your AFR/FSR: CPB performs desk reviews Stations will be contacted during desk reviews AFRs/FSRs are subject to audit by the Inspector General (even after desk review approvals) 50

51 AFR Submission Summary Complete all required & applicable schedules Verify revenues, expenses, and NFFS Complete signature page (by Head of Grantee & Independent Accountant) Submit the AFR/FSR to CPB CPB performs desk reviews & requests information/documentation Once approved, NFFS is used in CSG calculations 51

52 Questions & Answers Q & A Test Your Knowledge 52

53 Question 5 Which of the following is correct regarding AFR/FSR filing? A. The AFR/FSR is due by May 31 st B. Penalties do not apply C. A maximum of 3 filing extensions are available D. 1 st extension requires justification & approval by CPB E. 2 nd extension requires justification & approval by CPB 53

54 Question 5 - Answer Answer (E): The 2nd extension requires a justification and approval by CPB - The AFR is due 5 months after the grantee s FY end. - Penalties do apply for late filing - Only 2 AFR/FSR extensions are available, - 1 st extension requires only requesting it 54

55 Question 6 Which of the following is not correct? A. An AFR/FSR is subject to an audit by CPB s OIG, even after desk review approvals. B. Both the Head of Grantee & Independent Accountant must sign the AFR. C. AFR Schedules A, E, & F are always required to be completed. D. None of the above 55

56 Question 6 - Answer Answer (D): None of the above. - Choices A to C are all correct. A. An AFR/FSR is subject to an audit by CPB s OIG, even after desk review approvals. B. Both the Head of Grantee & Independent Accountant must sign the AFR. C. AFR Schedules A, E, & F are always required to be completed. 56

57 Submitting Questions Press Q&A button in the top right of screen At bottom right, choose Q&A Under Ask, select Host Type question in field at bottom of screen Hit send 57

58 Agenda Overview of Financial Reporting to CPB Non-Federal Financial Support (NFFS) Preparing the Annual Financial Reports AFR Demonstration 58

59 Integrated Station Information System Access at isis.cpb.org 59

60 Financial Reporting Main View status of schedules and forms Submit to CPB Menu NFFS Summary 60

61 Report direct revenue Schedule A Identify NFFS on each line Add comments for large differences 61

62 Report direct revenue Schedule A Line 13 & 14 Revenue (Net of Direct Expenses) Indicate NFFS eligibility on Line 20 New (Line 21) Spectrum Auction 62

63 Schedule A Adjustments to Revenue (Automatically populated in ISIS) Revised description New Line Item 63

64 Schedule E Report program and support services expenses Report investment in capital assets Indicate direct and indirect expenses 64

65 Schedule E Report expenses by function & source in Lines 1 to 7 (A-D) Radio TV 65

66 Schedule F Input all revenue reported in your audited financial statements in line 2 and add reconciling items in Line 4 66

67 Schedule B Indirect administrative support-ias Revised description 67

68 Indirect administrative support Schedule B 68

69 Schedule C In-kind contributions of services and other assets 69

70 Schedule D In-kind contributions of property and equipment 70

71 AFS Upload Page The independent accountant must complete this page and upload the audited financial statements 71

72 Signature Page Head of Grantee certifies NFFS Independent Accountant attests to NFFS 72

73 Submitting Questions Press Q&A button in the top right of screen At bottom right, choose Q&A Under Ask, select Host Type question in field at bottom of screen Hit send 73

74 Completed Agenda Overview of Financial Reporting to CPB Non-Federal Financial Support (NFFS) Preparing the Annual Financial Reports AFR Demonstration 74

75 Completed Objectives By participating in this training, you will: Understand purpose and importance of accurate reporting Be ready to prepare your first Annual Financial Report (AFR) or Financial Summary Report (FSR) Improve ability to file flawless report Know where to find help Meet annual training requirement 75

76 CPB Office of Grants Administration cpb.org Greg Schnirring, VP, CSG and Station Initiatives Kate Arno, Director, TV CSG Policy and Review Andrew Charnik, Director, Radio CSG Policy and Administration Nadine M. Feaster, Director, Grants Administration Sharon Simmons, Manager, Grants Administration Biniam Debebe, Senior Financial Review Specialist Ken Goulet, Senior Financial Review Specialist Station information page: cpb.org/stations/ Online webinars: cpb.org/station-resource/csg-and-isis-training-opportunities Help Desk Phone: (866) Fax: (202) CSG Resources 76

77 Where to Find Resources Website cpb.org 77

78 Where to Find Resources Website cpb.org 78

79 Corporation for Public Broadcasting Introduction to Financial Reporting Live Webinar Training October 4, 2017

Corporation for Public Broadcasting

Corporation for Public Broadcasting What is NFFS? Live Webinar Training October 11, 2017 Introductions Webinar Presenters Kate Arno, Director, TV CSG Policy & Review Biniam Debebe, Senior Financial Reviews