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Hawai`i
Commission for National and Community Service
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Fiscal Manual
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I. Ten Rules of Funds Management for AmeriCorps Programs
1. Know Your Regulatory
Requirements Rule #1 Know Your Regulatory Requirements Regulatory requirements provide the guidance and foundation for your financial management system. For AmeriCorps programs, the following requirements apply:
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The National
Community Service Act (http://www.csc.ca.gov/aboutus/files/ncsa1990.pdf) OMB (Office of Management and Budget) circulars describe a wide variety of financial management issues including administrative requirements, cost principles, and audits. A fiscally sound program should comply with the OMB circulars specifically applicable to the type of institution or organization through which the AmeriCorps program is housed (the legal applicant entity for the program). The full text of all OMB circulars can be found on the internet at the address provided above. Applicable OMB circulars are as follows: For Educational Institutions
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A-110=Uniform
Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations For Non-Profit Organizations
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A-110=Uniform
Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations For State and Local Government Entities
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A-87=Cost Principles
for State, Local and Indian Tribal Governments Rule #2 Document Your Policies and Procedures Documented policies and procedures are important because:
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They are the
standards for the organization’s operations Documented policies and procedures may include such items as:
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Chart of Accounts Rule #3 Maintain Adequate Documentation to Support Expenditures All expenditures should trace back to source documentation and should include descriptions that support why the transaction is allowable for AmeriCorps purposes. Design a filing system that groups grant activities and documents such as the:
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grant contract,
amendments, original application and changes Records must be maintained on all equipment in use by the program and should include at a minimum:
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description and
funding source Equipment and supplies must be handled in accordance with 45 C.F.R. 2541–Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Government or with 45 C.F.R. 2543–Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit organizations. Rule #4 Manage Cash Effectively The Hawai`i Commission for National and Community Service issues AmeriCorps grants on a reimbursement basis except for the first month advance in which case programs must minimize the time that elapses between the receipt of funds and the disbursement of these funds. The AmeriCorps funds from the Commission are federal funds, and as such, should be deposited in an interest bearing account. Accounting systems should track interest earned on federal funds. Separate general ledger accounts for each grant you receive (federal, state, or private) should be maintained. Bank reconciliation should be prepared monthly. And, a schedule of all bills to be paid should be prepared and maintained. Rule #5 Design an Efficient Accounting System An efficient accounting system separates accounts for each grant/award, maintains federal and non-federal matching funds separate from grant funds, and records in-kind contributions as both revenues and expenses. Accounting records should be complete with all AmeriCorps expenditures and local match entered into the general ledger system. Financial statements should reflect the receipt and use of cash and in-kind contributions. The general ledger should form the basis for the Periodic Expense Report and the Financial Status Report. An effective accounting structure should facilitate easy transaction input and report generation. The structure should allow for the efficient transfer of information for reports from the accounting system into the Web-Based Reporting System (WBRS). Rule #6 Maintain Effective Budgetary Controls The budget is a central part of fiscal control, which, when compared to actual spending can provide important information about variances from the original spending plan. In other words, effective budgetary controls should allow for easy comparison of expenditures against the budget and provide for revisions as appropriate. To produce useful budgetary information, follow these steps:
Step One: Design and effective
accounting system Rule # 7 Document and Report Employees and Members Activities Accurately All stipends or salaries/wages charged against the AmeriCorps grant (either the grant funds or the match funds) must be supported by signed time and attendance records. This requirement is twofold: For AmeriCorps Members: · Programs must document everything for AmeriCorps members in terms of each member’s eligibility, enrollment, time logs, activities (separating direct service from training), etc. All time logs should be signed by both the AmeriCorps member and his or her supervisor. The supervisor should be an individual who is able to account for the member’s time and activities. Members cannot supervise other members. For Staff: · In compliance with OMB A-133, any staff that is charged against the grant or the match for the grant, depending on your regulatory requirements, must keep monthly time and attendance records signed by a supervisor. Detailed job descriptions should be on file for AmeriCorps staff. Exceptions to this include: State, Local and Indian Tribal Government programs These programs must comply with OMB A-87, which states that
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an employee working
on a single indirect cost activity such as accounting needs no
further documentation beyond normal payroll procedures; Educational Institution programs These programs must comply with OMB A-21, which abides by a principle of after-the-fact confirmation or determination, such as a signed annual statement with after-the-fact activity records. Rule #8 Meet Matching Requirements and Document In-Kind Contributions Appropriately All match contributions, both cash and in-kind, must be properly valued and clearly identifiable from the grantee’s records, have adequate supporting documentation, and meet the criteria established by the appropriate circular, A-110 or A-102 implemented by 45 C.F.R. 2541. Programs must meet the proposed and approved match amount. AmeriCorps member support costs must be matched with non-federal cash, with the exception of health care. This cash match must be met by each reporting period. Other operating costs (member training, staff costs, operating expenses, evaluation, and administration) may be matched with federal, state, or local cash, or with in-kind contributions. This match must be met by the end of the program year. Rule #9 Report Timely and Accurate Financial Information Financial reporting is done through the Web-Based Reporting System (WBRS). Periodic Expense Reports (PERs) and Financial Status Reports (FSRs) are due on a semi-annual basis. The first due date is mid-April and covers the period up through March 31. The second due date is mid-October and covers the period ending September 30. Final PERs and FSRs are due 90 days after the close of the program year. Rule #10 Maintain Strong Internal Controls Maintaining strong internal controls protects organizational resources from waste, fraud, and inefficiency, ensures accuracy and reliability in accounting and operating information, ensures compliance with organizational policies, and assists in evaluating organizational performance. Examples of good internal controls include:
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Adequate segregation
of duties. The same employee should not authorize, purchase,
sign the check and reconcile the statement in the accounting
system. |
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| II. AmeriCorps provisions & rules
The AmeriCorps Provisions and Rules are
binding on the Grantee. By accepting funds under this Grant, the
Grantee agrees to comply with the AmeriCorps Provisions, Rules, and
all applicable federal statutes, regulations and guidelines. The
Grantee agrees to operate the funded Program in accordance with the
approved Grant application and budget, supporting documents, and
other representations made in support of the approved Grant
application. The Grantee agrees to include in all subgrants the
applicable terms and conditions contained in this award. All
applicable Provisions of the Grant, including regulations and OMB
circulars that are incorporated by reference shall apply to any
Grantee, subgrantee, or other organization carrying out activities
under this award. A link to the full text of the AmeriCorps
Provisions can be found on the Hawaii Commission website at: |
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III. allowable costs A cost is considered allowable under the grant if it is:
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Reasonable
An allowable cost
is allocable to the AmeriCorps grant if it is: Administrative (or indirect) costs mean general or centralized expenses of overall administration of an organization that receives Corporation funds and DOES NOT include specific program costs. Administrative costs must be consistent throughout the organization. If you can identify the cost specifically to the program, then it is a direct cost, not an administrative (indirect) cost. Certain costs are unallowable. Unallowable costs include, but are not limited to:
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Bad Debts Funds cannot be charged against the AmeriCorps budget for organized fundraising, including financial campaigns, endowment drives, solicitation of gifts and bequests, or similar expenses. Similarly, funds cannot charged against the AmeriCorps budget to support the staff time for fundraising activities. All budgeted funds for Member Support Costs are directly related to the number of AmeriCorps members the program proposed to enroll. If that threshold of members is not obtained, or if members leave the program early, these funds may not be used to pay for other costs. Also, once a member is suspended, terminated, or exited, they may not continue to receive a living allowance.
Payments to
individuals for consultant services under the AmeriCorps grant
may not exceed $540 per day (exclusive of any indirect
expenses, travel, and supplies). |
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IV. match requirements Programs must provide and account for matching funds. Overall costs of the program may not exceed a federal cost of $12,600 per member service year (MSY) for the 2008-2009 program year. The limitations on the Federal
government's share are different—in type and amount—for member
support costs and program operating costs. Under the new AmeriCorps Rules, the overall Match Requirements will increase up to 50% over a 10 year period following the schedule in the table below.
There are exceptions to the above schedule for programs in rural or economically distressed areas in which case a waiver can be filled out and submitted to the Corporation. If approved, these programs will follow an alternative match schedule. Programs that are approved for the alternative match schedule will still have to increase matching funds over a 10 year period following the table below.
Programs must meet the full match proposed in the application budget. All match specified in the budget is part of the grant award, and is subject to all programmatic restrictions and audit requirements. Further, match in excess of the statutory requirements cannot be reduced by the program once the grant proposal is approved without Commission approval. Matching funds must be accounted for in the general ledger. Many programs utilize in-kind match (a program’s contribution of non-cash outlays of materials or resources to support a percentage of grant award activities). This may include non-cash outlays contributed by other public agencies and institutions, private organizations and individuals. Examples include donated office supplies, equipment, space, and professional services. In general, the value of in-kind contributions is determined by fair market value. A sample in-kind match tracking form can be found in the appendices of this manual (this is not a required form, but may assist organizations that do not currently have a document for tracking in-kind contributions). If you are including supervisor hours as part of your program’s matching, you must document and track supervisor hours properly. A sample Supervisor Certification form is also included in the appendices. You may also use supervisor timesheets as documentation. You may NOT use member timesheets as a way to document supervisor time. |
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V. Budget changes In accordance with the Contract between the Hawai`i Commission for National and Community Service and the program, a program must obtain permission to modify the approved budget when cumulative budgetary line item changes exceed 10% of the total contract amount. This permission must be obtained through the Hawai`i Commission for National and Community Service, and may require Corporation for National Service approval as well. Further, in accordance with the AmeriCorps Provisions, the grantee must obtain permission from the Corporation for National Service, via the Commission liaison, in order to modify the approved budget in any of the following ways:
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Reallocation of funds
from the “Member Support Costs” category Beyond specific budgetary changes, programs must obtain written approval from the Corporation for National Service via the Hawai`i Commission for National and Community Service before making any of the following modifications:
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Changes in the scope or
specific goals and objectives of the program Again, all budgeted funds for Member Support Costs are directly related to the number of AmeriCorps members the program proposed to enroll. If that threshold of members is not obtained, or if members leave the program early, these funds may not be used to pay for other costs.
Grantees should not assume approvals
have been granted unless documentation from the Hawai`i Commission
for National and Community Service and the Corporation for National
Service as applicable, has been received. |
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VI. payments The Hawai`i Commission for National and Community Service issues a contract to each approved program. Programs may not charge against the grant until a fully executed Contract (with all signatures from both the grantee and the University of Hawaii) has been issued. Except for the 1st month advance (if approved by the Commission and University of Hawaii), the method of payment under the AmeriCorps grant is cost reimbursement with all contract costs charged to the approved budget categories specified in the total contract amount of the budget. If costs incurred are allowable and warranted, the Hawai`i Commission for National and Community Service will reimburse the program on a need basis. To receive payment, the program shall submit a Request for Reimbursement form (Form 300), which must include an authorized signature, to the Commission. Programs may request reimbursement at any time, but are encouraged to submit on a monthly basis. The Cash Reimbursement Form (Form 300) is available in paper format or can be e-mailed upon request; however, it cannot be electronically submitted as it requires an authorized original signature. A Cash Reimbursement Form can be found in the appendices of this manual. To receive payment, corresponding Periodic Expense Reports (PERs) must be approved in WBRS and Financial Status Reports (FSRs) must be completed each quarter. Also, please keep documentation of all expenditures being charged to the Corporation as well as documentation of match (cash and in-kind). We will be reviewing these documents when we do site visits and monitor the program.
Programs requiring
advance payments may request funds based on actual and immediate
cash needs in order to minimize cash on hand in accordance with
policies established by the U.S. Department of the Treasury in 31
C.F.R. 205. Advance payments are subject to financial management
standards specified in OMB Circular A-102 and its implementing
regulations (45 C.F.R. 2541) or A-110 and its implementing
regulations (45 C.F.R. 2543), as applicable. In accordance with the
Contract between the program and the Hawai`i Commission for National
and Community Service, no more than one month’s advance amount can
be outstanding at the end of any two month period. Further, advance
payments may be limited or eliminated at any time by the Hawai`i
Commission for National and Community Service. Lastly, programs
must deposit advance funds in federally-insured, interest-bearing
accounts (with exceptions to this as noted in the AmeriCorps
Provisions). |
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VII. monitoring The Hawai`i Commission for National and Community Service monitors program compliance and progress through a variety of meetings which include program director meetings, attendance at special events, on-going phone technical assistance, review of progress and financial reports, and formal and informal site visits. The monitoring philosophy of the Commission is to develop a level of mutual trust between the Commission and its programs so as to encourage programs to seek technical assistance from the Commission without feeling threatened by bureaucracy. While step-by-step compliance is part of program monitoring by both the Commission and the program, the Commission views program monitoring and evaluation as a means to enhance the continuous improvement processes of programs. The Commission engages in both formal, but more so, informal meetings and visits with programs and program staff in order to gauge needs, celebrate successes, and provide ongoing support to programs.
Site visits provide a valuable
opportunity to accomplish a number of things, including: 1) to
gather information beyond written reports (including the review of
programmatic, member, and financial files); 2) to make sure the
program is making progress toward goals; 3) to identify problem
areas first-hand and identify opportunities for improvement; 4) to
facilitate a partnership between the Commission and program staff to
better understand each others’ needs and address problems together
in a supportive way; and 5) to celebrate success and achievements.
Overall, site visits are meant to ensure success at the outset by
forming effective partnerships. Programs are called by Commission
staff to schedule a site visit. The Commission believes that site
visit scheduling should be done in cooperation with sites and at a
time that is convenient, rather than intrusive, to the operating of
programs. The Commission takes a risk-based approach to formal
monitoring of its AmeriCorps programs. Programs are categorized
according to risk. The risk-based monitoring categories and
approach, as well as the monitoring review instrument used by the
Hawai`i Commission can be found in the appendices of this manual.
In the event of
non-performance on the part of the program, the Commission may
exercise remedial actions should it find that a program
substantially failed to satisfy or perform the duties and
obligations outlined in the grant. Remedial actions may include:
the withholding of payment; a request for the removal from work on
the grant of employees who are determined to be incompetent,
careless, insubordinate, unsuitable, or otherwise unacceptable;
denial of payment for services or obligations which have not been
performed and which due to circumstances caused by the program
cannot be performed or if performed would be of no value to the
State; or termination of the grant. These terms can be found in the
Contract between the University and the program. |
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VIII. audits Organizations that expend $500,000 or more of total federal awards in a fiscal year are required to obtain a single audit for that year conducted by an independent auditor in accordance with the Single Audit Act, as amended, 31 U.S.C. 7501, et seq., and OMB Circular A-133. “Single audit” is a term to explain one audit process wherein the organization administering various federal grant programs is audited annually across all of the federal grants it receives. The single audit is required as a basic financial statement audit does not get to the kind of things the federal government is looking for, such as compliance issues (both programmatic and financial). A grantee that does not expend $300,000 in a fiscal year in federal funds is exempt from the single audit requirements of OMB Circular A-133 but must conduct financial management reviews of its programs, and records must be available for review and audit. An A-133 requires: a financial statement audit of the organization; a preparation of a schedule of federal awards and expenditures; a test of internal management controls (procurement, payroll, eligibility, cost principles, monitoring, compliance, etc.); an opinion level assurance of the organization’s ability; and typically uses a formula driven determination and risk assessment to cover only major programs. Thus, while an organization may undergo an A-133 audit annually, the AmeriCorps program may not be a major focus if it is not considered a major program under the formula. In addition to required or voluntary audits, AmeriCorps programs need to be aware that under the authority of the Inspector General Act of 1978 (IG Act), as amended, the Office of the Inspector General (OIG) for the Corporation for National Service may conduct audits and investigations related to AmeriCorps programs and operations. A primary purpose of these activities is to detect and deter fraud, waste, abuse, or mismanagement of government funds. Audits by the OIG may be conducted by OIG staff auditors (employees of the federal government) or by auditors of audit firms under contract to perform audits for the OIG. Auditors are authorized by the IG Act to have full access to any grantee records, reports, or other materials necessary to conduct an audit. All audits conducted by the OIG are conducted in accordance with generally accepted government auditing standards. Investigations by the OIG may be conducted by special agents (investigators) who are duly authorized federal law enforcement officers or by other administrative investigators who specialize in noncriminal matters. OIG investigators are authorized by the Act to have full access to any records, reports, or other materials necessary to investigate allegations of fraud or abuse concerning their respective agency’s programs and operation. OIG investigators are also authorized to take statements under oath.
During the past six years, OIG audits and “pre-audit surveys” of
national service grantees have detected problems ranging from
instances of noncompliance with grant provisions to failure to
maintain adequate financial systems or management controls to
properly administer the AmeriCorps grant funds. OIG findings
include questioned costs in 66% of the grantees visited between 1995
and 1998, totaling $6.2 million. Further, during this time period
(1995-1998), the OIG found inadequate accounting systems and
management controls for reporting grant expenditures in 56% of the
grantees visited, found inaccurate and/or delinquent Financial
Status Reports in over one-third of national service grantees
visited, found inadequate records of staff and member time in 47% of
grantees visited, found unsupported or unmet match in over one-third
of grantees visited, and a variety of other substantial findings.
Several OIG investigations have resulted in criminal prosecution in
federal courts. |
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IX.
reporting requirements The Periodic Expense Report Form serves as a tracking mechanism for the grant as the grantee draws funds from each budget line item. The PER mimics the approved budget for each program and allows programs to enter expenses against both the grant and the match in each line item. The WBRS system then calculates the balance remaining and the match percentages. PERs must be submitted on WBRS to the Commission on a monthly basis. The Program Officers and the Executive Director review the PER for each month before approving cash requests. The Financial Status Report (FSR) is a federal report (269A) that tracks the amount of money spent from both the grant and match. The Commission and University staff as well as the Corporation for National Service review these reports for accuracy. It is very important that this report accurately reflects both the match as well as grant funds. This form is part of the Web-Based Reporting System. For the 2008-2009 Program Year, the first FSR is due (saved as “approved”) in WBRS on January 20, 2009 and covers the period from October 1, 2008 through December 31, 2008. The second FSR is due in WBRS on April 20, 2009 and covers the period from January 1, 2009 through March 31, 2009. The third FSR is due in WBRS on July 20, 2009 and covers the period from April 1, 2009 through June 30, 2009. The fourth FSR is due in WBRS on October 19, 2009 and covers the period from July 1, 2009 through September 30, 2009. The fifth and final FSR is due in WBRS on December 5, 2009 and covers the last month(s) of the program year. In order to complete the last FSR, you will need to create a blank PER for December 2009 with zeros. That way you will be able to create an FSR for the last quarter. Program Director’s must also submit Progress Reports due quarterly in WBRS (unless otherwise granted permission by the Commission staff to turn in semi-annually). The Commission needs program Progress Reports in order to submit a Grantee Progress Report to the Corporation. Progress Report due dates are as follows: 1st Quarter: January 26, 2009 (October-December 2008 data) 2nd Quarter: April 27, 2009 (January-March 2009 data) 3rd Quarter: July, 27, 2009 (April-June 2009 data) 4th Quarter: October 26, 2009 (July-September 2009 data) Supplemental: December 5, 2009 (Programs ending after September 30, 2009) In addition, programs must submit required programmatic reports and member forms, and must comply with requests for data or additional reports from the Hawai`i Commission for National and Community Service and/or the Corporation for National Service. This may include, but is not limited to, an annual estimate of unexpended funds in order to gauge funds available for the following year, an annual estimate of expenses to set up accounts payable for the close of the state fiscal year, and specific data, reports, or studies commissioned by the Hawai`i Commission for National and Community Service and/or the Corporation for National Service. If for any reason you cannot submit any of these reports in a timely manner, please let our office know as missing these documents could result in withholding payment on cash requests. |
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x. close-out of your grant Close-out of a grant must be completed at the end of a 3-year cycle. Staff will notify your Program as to when a close-out needs to be completed. The Hawai`i Commission for National and Community Service sub-grant closeout process includes two sets of procedures: requirements for closing out program activities and requirements for finalizing fiscal issues. Program closeout procedures include successfully documenting member service terms and program progress toward stated objectives. Fiscal closeout procedures will include submission of final invoices within 60 days of grant termination date and submission of final FSRs within 90 days of the grant termination date. The following steps are needed to complete the programmatic closeout of a sub-grant. We will reserve the right to withhold final payment on a program’s outstanding invoices until we receive the following documents or have assurance that the program has performed the following procedures:
The following closeout forms must be completed and can be found on the AmeriCorps website at http://www.americorps.gov/forms/06_1204_ac_lsa_closeout.pdf
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appendices · Cash Request Form 300 (this form may be duplicated for submission to the Commission)
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Sample In-Kind
Contribution Form (this is not a required format, but may be of
assistance to organizations that do not
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Sample Supervisor
Certification Form (this is not a required format, but may be of
assistance to organizations that do not · Checklist for Getting Members Started (pages 62-63 in Program Director’s Handbook) · Program Member File Checklist · Hawaii Program Review Instrument (to assist programs w/ self-monitoring and to better prepare programs for site visits) · Site Visit Member File Checklist · Site Visit Member Timesheet Testing Grid · Site Visit Fiscal Transaction Testing Grid · WBRS Tips w/ Instructions for Completing Financial Reports online |
