Corporation for Public Broadcasting

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1 Corporation for Public Broadcasting What is NFFS? Live Webinar Training October 11, 2017

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

3 Objectives By participating in this training, you will: Understand the definition of non-federal financial support (NFFS) Know the purpose of reporting NFFS and why it matters to your station and to the public broadcasting system Understand how to determine NFFS eligibility Know where to find help Meet your annual training requirement 3

4 Agenda Overview of Financial Reporting to CPB Overview of NFFS NFFS Exclusions NFFS Decision Charts 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 Overview of Financial Reporting to CPB Grantee compliance Important documents Annual filing requirements Overview of NFFS NFFS Exclusions Agenda NFFS Decision Charts 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 Overview of Financial Reporting to CPB Overview of NFFS Definition of NFFS Purpose NFFS Criteria NFFS Exclusions Agenda NFFS Decision Charts 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: The Recipient Criterion Public broadcasting entity (PBE), or an organization that receives the revenue on its behalf Examples of PBEs: CPB licensee or permittee nonprofit institution engaged primarily in the production, acquisition, distribution or dissemination of educational and cultural television or radio programs 24

25 Contributions Grants Gifts or donations of cash, property, or services Bequests Appropriations from licensee (institutional stations) Payments NFFS: The Form Criterion Cash, property, or services in exchange for materials and services related to public broadcasting services 25

26 NFFS: The Source Criterion Contributions may be from any source except: The federal government or Public broadcasting entities. Payments must be from: State and local government agencies or Educational institutions. 26

27 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 27

28 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 28

29 NFFS: The Purpose Criterion Contributions - purpose: Construction or operation of a non-commercial, educational public broadcasting station, or Production, acquisition, distribution, or dissemination of educational television or radio programs and related activities. Payments must be in exchange for: Services directly related to producing, developing, or delivering educational or instructional television or radio programming. 29

30 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. 30

31 Questions & Answers Q & A Test Your Knowledge 31

32 Question 1 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 1 - 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 2 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 2 - 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 3 A Radio station sold various products with the station logo on them to individuals throughout the year. Which statement is correct? A. The revenue from the sale of station logo items is NFFS eligible. B. The revenue is a contribution and from an eligible source. C. The revenue is from an exchange transaction, and such payments are excluded from NFFS. 36

37 Question 3 - Answer A Radio station sold various products with the station logo on them to individuals throughout the year. Which statement is correct? A. The revenue from the sale of station logo items is NFFS eligible. B. The revenue is a contribution and from an eligible source. C. The revenue is from an exchange transaction, and such payments are excluded from NFFS. 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 Overview of NFFS NFFS Exclusions Source Criterion Exception Direct Revenue Exclusions In-Kind Contributions Exclusions NFFS Decision Charts 39

40 Source Criterion Exception & Exclusion: Institutional Stations An institutional station can include the following revenues and support from its licensee as NFFS: Direct revenues Appropriations from the licensee Expenses incurred or absorbed by the licensee specifically for the station Indirect administrative support (IAS) However, in-kind contributions from a licensee are ineligible for NFFS. 40

41 NFFS Exclusions: Direct Revenues Federal funds Funds from CPB and other PBEs Quid Pro Quo contributions Premiums Funds derived from subsidiary enterprises unrelated to public broadcasting Spectrum auction related revenues Presenting station fees GASB 68 (net pension liability adjustments) 41

42 NFFS Exclusions: Direct Revenues Capital Funds (TV only) Gains from sale of property & equipment Realized & unrealized investment gains & losses Rental revenue Advertising Refunds and rebates Unrelated Business Income (UBI) 42

43 NFFS Exclusions: In-kind Contributions Certain in-kind contributions are excluded from NFFS Third party production payments Contributions in quid pro quo transactions Non-professional volunteer services Prerecorded compact discs, records, tapes, cassettes, and film libraries Fundraising related activities Promotional items Local productions Programs that are nationally distributed Program supplements ITV or educational radio outside the allowable scope of approved activities TV Grantees only in-kind contributions of capital assets 43

44 Questions & Answers Q & A Test Your Knowledge 44

45 Question 4 Which of the following in-kind contributions received by a radio station are eligible for NFFS? (Assume the 4 NFFS criteria are all met) A. Fundraising related activities B. Local productions C. Promotional items D. Program supplements E. None of the above 45

46 Question 4 - Answer Answer (E): None of the above. See list of policy exclusions per sections and of the Financial Reporting Guidelines. 46

47 A station received an in-kind contribution of new equipment from a local business with FMV of $10,000. The equipment is for continued use by the station but it does not meet the station s capitalization threshold. Is this in-kind contribution NFFS eligible? A. Yes B. No C. It depends Question 5 47

48 Question 5 - Answer Answer (C)-It depends For TV stations -donated equipment is NFFS ineligible (per section of the Financial Reporting Guidelines). For Radio stations -donated equipment is NFFS eligible. 48

49 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 49

50 Agenda Overview of Financial Reporting to CPB Overview of NFFS NFFS Exclusions NFFS Decision Charts 50

51 NFFS Decision Chart 51

52 Contributions Decision Chart 52

53 Payments Decision Chart 53

54 Other Income Decision Chart 54

55 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. 55

56 Questions & Answers Q & A Test Your Knowledge 56

57 Question 6 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. 57

58 Question 6 - 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. 58

59 Question 7 A TV station received a membership donation of $750 and the station gave the donor tickets to a local theatre performance with a FMV of $150, a high-end premium. Which statement is correct? A. Donation of $750 is membership revenue and the entire amount is NFFS eligible. B. Donation of $750 is membership revenue, but only $600 is NFFS eligible. C. Only the net donation of $600 is membership revenue and NFFS eligible. 59

60 Question 7 - Answer A TV station received a membership donation of $750 and the station gave the donor tickets to a local theatre performance with a FMV of $150, a high-end premium. Which statement is correct? A. Donation of $750 is membership revenue and the entire amount is NFFS eligible. B. Donation of $750 is membership revenue, but only $600 is NFFS eligible. C. Only the net donation of $600 is membership revenue and NFFS eligible. 60

61 Question 8 A TV station received the following revenue: CPB CSG grant of $100,000 underwriting of $65,000 insurance proceeds of $10,000 gifts for facilities and equipment of $150,000 membership contributions of $50,000 fundraising revenue of $25,000 (direct expenses of $10,000) What is the correct total NFFS? A. $290,000 B. $130,000 C. $300,000 D. $400,000 61

62 Question 8 - Answer Answer (B) Total NFFS is $130,000. NFFS Eligible: underwriting of $65,000 membership contributions of $50,000 net fundraising revenue of $15,000 (net of direct expenses) NFFS Ineligible: CPB CSG grant of $100,000 insurance proceeds of $10,000 gifts for facilities and equipment of $150,000 62

63 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 63

64 Completed Agenda Overview of Financial Reporting to CPB Overview of NFFS NFFS Exclusions NFFS Decision Charts 64

65 Completed Objectives By participating in this training, you will: Understand the definition of non-federal financial support (NFFS) Know the purpose of reporting NFFS and why it matters to your station and to the public broadcasting system Understand how to determine NFFS eligibility Know where to find help Meet your annual training requirement 65

66 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 66

67 Where to Find Resources Website cpb.org 67

68 Where to Find Resources Website cpb.org 68

69 Corporation for Public Broadcasting What is NFFS? Live Webinar Training October 11, 2017

Corporation for Public Broadcasting. Introduction to Financial Reporting

Corporation for Public Broadcasting Introduction to Financial Reporting Live Webinar Training October 4, 2017 Introductions Webinar Presenters Kate Arno, Director, TV CSG Policy & Review Biniam Debebe,