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Best Practices in Preparing For An Audit or Monitoring Visit
Top 3 Auditor’s Advice№ 1 – Documentation№ 2 – Disclosure№ 3 – Communication
Objectives Best Practices & Suggestions for Common Audit Findings
Most Requested Documents
General Principles and Guidelines for Documentation
Examples of Best Practices
→ Documenting Timelines
→ Expenditure Report Preparation
→ Inventory Reporting
Audit Tip #1 – Know Your Compliance Requirements A-133 Compliance Requirement TableNumber Description Federal State
A Activities Allowed or Un-Allowed X X
B Allowable Cost/Cost Principles X X
C Cash Management X X
D Davis-Beacon Act X
E Eligibility X X
F Equipment & Real Property Management X X
G Matching and/or Level Effort and/or Earmarking X X
H Period of Availability of Federal Funds X X
I Procurement & Suspension and Debarment X
J Program Income X
K Real Property Acquisition and Relocation Assistance X
L Reporting X X
M Sub-Recipient Monitoring X X
N Special Test and Provisions X X
Best Practice - Grant Narrative with A133 Internal Controls ComplianceA – Activities Allowed or Un-Allowed, and Allowable Cost/Cost Principles
Controls:(1)Authorization of expenditures by knowledgeable individuals(2)Budget analysis prepared quarterly by grant accountants
Process:The City of Tampa management establishes budgets for Federal and non-
Federal programs. Federal programs are established in accordance with government agreements. The Budget Analyst, Financial Accountant and management compare actual amounts to departmental budgets on a monthly basis for initiatives funded by the grant. The affiliates that receive a direct grant for Capacity Build do not maintain a budget to actual report because the budget amount is fixed as it relates to salary of employees. Discrepancies are researched to determine if costs are appropriately charged. Each government program has a budget versus actual schedule, which compares actual expenses for each line items with the agreement’s budget for that line item.
Current Top 5 Common A-133 Findings1. Allowable Costs/Cost Principles (19%)
* Staff charged food to a grant because they were unaware that it was unallowable* Excessive Administrative Costs2. Reporting (18%)* Grant progress reports not filed on time* SEFA is incomplete or not prepared at all3. Other (13%)* Insufficient monitoring of sub-recipients* Program serving ineligible participants* Fraudulent payments to vendors
4. Procurement, Suspension/Debarment (9%)* Lack of competitive bidding documentation
5. Equipment/Real Property Management (8%)* No evidence of inventory review or reconciliation to financial records.
* = Example
Best Practices to Reduce A-133 Findings
FINDING BEST PRACTICE
Fraudulent vendor payments New vendor set up requires independent approval
New vendor set up is only handled by one department (Accounting or Purchasing)
Check for suspended or debarred vendors.
Prior period adjustments or material adjustments posted during audit
Reconciliation
Frequent inter-departmental communication
Untimely reporting and Insufficient monitoring of sub-recipients
Develop a Grant Management Tracking and Compliance System
Training
Best Practice – Grant Intake FormCity of Tampa – Grant Information Sheet
Grant Title:_____________________ Granting Agency:______________________ Purpose:_______________
Contract #:_____________________ City Department:______________________ Contact:_______________
CFDA #: _____________________ Pass Through Entity:_______________& Identifying Number_________
Federal Funding: $_______________ Period of Performance: Start_________ End____________State Funding: $_______________ Local Match: $_______________ Grant Type: Cost ReimbursementCity’s Match: $_______________ Fixed FeeTotal Funding: $_______________ Unit of Service Advance
Requires Trust Fund/Interest Bearing Account? Yes No
Financial Reporting Schedule: __________________ Progress Reporting Schedule: _____________________
Financial Contact:_____________________________
General Guidelines for Documentation All documents should be self explanatory
UASI2012BRv6.doc
Budget Report
May 21 – 23, 2012
Always put the last version in the footer
Include summary or outline for further clarification
Page 1 of 15 Number pages in X of Y format
Approved By:
Deirdre Joseph_May 23, 2012_
Sign in ‘Sharpie’ or dark ink
General Guidelines for Documentation Explain Acronyms
FAMR2701 City of Tampa ** FAMIS PAYROLL INTERFACE **
EXPENSE DISTRIBUTION REPORT
Run Date: 5/23/12
Employee Name Employee POCN Period Earn Hours Rate Earning Benefits
ID Number Ending Type Charged
>>>SUBOBJECT: 01200
Joseph, Deirdre 26938 48990 06/13/11 HOL 16.00 $10.00 $160.00 $ 12.50
Joseph, Deirdre 26938 48990 06/13/11 REG 42.00 $10.00 $420.00 $ 95.50
>>>SUBOBJECT: 01212Joseph, Deirdre 26938 48990 06/13/11 ANN 22.00 $10.00 $220.00 $ 14.00
>>>SUBOBJECT: 04000Joseph, Deirdre 26938 48990 06/13/11 TPD 0.00 $55.00
ANN = Annual Leave
General Ledger Account #
HOL = Holiday Pay
Salary Calculation:
Holiday Pay $ 160.00
Holiday Benefits $ 12.50
Annual Leave $ 220.00
Annual Leave Benefits $ 14.00
Total Salary $ 406.50
(Note 1)
Note 1 = Travel cost not considered part of salary.
FAMIS – Financial Accounting System (general ledger)
General Guidelines for Documentation References should be consistent throughout
Memo
To: Chanda Brown
From: Deirdre Joseph
Date: May 23, 2012
Re: UASI 2011 (contract XXXX)
__________________________
A. Motorola Communications, Inc.
* Canceled Check (page 1)
* Invoice (page 2)
* Asset Paperwork (page 3)
* Purchasing Paperwork (pages 4 – 5)
* Grant Budget (page 6)
B. Fisher Scientific
* Canceled Check (page 6)
Division of Emergency ManagementDetail of Claims
Form 4ACategory: EquipmentGrantee: City of Tampa Agreement: XX-XXXCost Incurred During the Period of: May 21 – May 23, 2012Vendor Date Paid Check Amount
Motorola 5/5/12 345998 $88,000
Fisher Scientific 5/16/12 298488 $50,000
Total Expenditures $138,000
A
B
Reference
1. Form must be compiled from Form B by Category
2. Form must accompany Reimbursement Request
General Guidelines for Documentation Common Audit Request Grant files should be
easily accessible
Grant contract should always be referenced
Use audit checklist for folder contents
Contract XX-XX Agreement
Contract XX-XX Budget Adjustments
Contract XX-XX M&A Calculation
Contract XX-XX Sub Agreements
General Guidelines for Documentation
UASI 2012 Agreement$7,580,599
CFDA: 97.067Contract: XX-XXX
…the Management & Administrative dollar amount should not exceed 3% of total grant allocation…
Ernst & YoungCFDA: 97.067Audit Program
Matching & Earmarking and Level of Effort:
G1: Provide the earmarking calculation to show compliance with requirement.
CFDA: 97.067Contract: XX-XXGrant: UASI 2012Award: $7,580,599
M&A Calculation:Award: $7,580,599M&A%: .03%Allowable $227,418
Expended as of 5/30/12 $5,000 (Note 1)
Note 1 – GL attached
Common Audit Request - Earmarking
General Guidelines for Documentation Common Request – Project Selection Methodology
Project A Project B Project C Project A
Project B
Projects A, B, C vetted for grant inclusion Projects A & B chosen for grant inclusion
Project C
Not Chosen
•Withdrawn
•Other Funding
•Not Viable
•Not Enough Votes
General Guidelines for Documentation Common Request – Project Selection Methodology
Step 1 – Notify recipients of grant guidance via email or
letter and gather statistics (10 committees notified).
Step 2 – Give consistent guidance on documenting projects
on standard form.
Project Submission Form
•Project Title
•Contact Name/Phone Number
•Project Phase (ongoing, new)
•Category (Equipment, Training, etc)
•AEL
•Request Amount
•Description, Completion Time
•Applicable State Strategy
•Applicable National Strategy
Step 3 – Document how projects are selected
Step 4 – Project Chosen – YES or NO
If No document reason______________.
Common Request – Project Selection
General Guidelines for Documentation
Project Submission Form
Suggestions for Additional Information
• How does this project support the State approved strategic plan?
• How does this project support National priorities?
• What is the risk of not implementing this project?
• Can this project be sustained if grant funding is no longer available? If so, what contingency plan is in place?
Best Practices: Timeline (Narrative Format)Page # Date Explanation .
1 11/19/2009 Award Letter Received from State
2 12/4/2009 Resolution prepared and submitted to Doc Genda
3 12/17/2009 RESO 2009-1214 – Resolution approving Award Letter
4 12/31/2009 Agreement Received from the State
5 1/7/2010 Award Letter signed by Mayor
6 1/12/2010 Award Letter mailed to the State for signature
7 1/13/2010 Resolution prepared and submitted to Doc Genda
8 2/18/2010 Resolution for Agreement approved by City Council
9 2/23/2010 Agreement sent to the Mayor for signature
10 3/2/2010 Mayor signed Agreement
11 3/5/2010 Agreement sent to the State for signature
12 4/14/2010 Executed (signed) Agreement received from the State
Ready and Authorized to Spend Funding!
Best Practices: Timeline (Chart Format)Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 April 2010
11/19/09Award Letter
Received
12/4/09Award RESO
Approved
12/31/09Agreement
LetterReceived
From State
1/12/10Award Letter
Mailed toState
2/18/10Agreement
RESOApproved byCity Council
3/2/10AgreementSigned by
Mayor
4/14/10Agreement(executed)Receivedfrom State
Best Practices: InventoryCity of Tampa - UASI Grant Inventory
As of May 23, 2012Inventory Instructions:Please manually inspect your assets and confirm that you have the equipment listed below by comparing the asset tags. If asset is located, place an “X” in the column labeled “Inventoried”. If there is a discrepancy, write “NO” and write an explanation in the “Discrepancy/Notes” column. Documentation of any discrepancies (e.g. Asset Disposal Paperwork, Police Report of Stolen Items) must accompany this report. Upon completion, sign and date the bottom of this schedule.
■ Asset# ■ Description ■ Amount ■ Location ■ Grant ■ Inventoried ■ Discrepancy/Notes1. A1BC P25 Receiver $60,000 Pinellas UASI 10 X2. A4HI Satellite $ 4,500 Pinellas UASI 10 X3. A3FF Robot $50,000 Pinellas UASI 10 NO Item Stolen4. A2ER Raft Tools $ 2,000 Pinellas UASI 10 X5. A8KO X-Ray $17,000 Pinellas UASI 10 X
Inventory Completed By:____________________Date___________
Best Practices: InventoryGrant Asset Inventory Report – Sample Testing
Date of Review:___________________ Agency Name: ___________________ Agency Contact: __________
Please fill out the following information:
A. Has the agency disposed of any grant equipment?____ NO (go to B) YES, attach the Domestic Security Equipment Discharge Form.
B. The Number of Assets Assigned to this Agency is ______________.C. The Number of Capital Assets (>$1,000) is ______________.D. The Number of Assets inventoried during this review is _________ .
Instructions:1. Attach Inventory Listing for Agency2. Attach Agency’s last inventory that includes grant assets. 3. For each asset inventoried, review and document the following:
Does the asset contain a City of Tampa Yellow Grant Asset Tag? Compare the City of Tampa Grant Asset Tag to the Inventory listing. If different, manually correct
the Inventory Listing. Inspect the equipment (visually or through interview) to determine if asset is still usable. Ask the agency representative to give examples of how this equipment is being used?
Best Practices - Expenditure ReportingMinimum Standard Documentation
Canceled Check
Invoice
Asset Tag
Purchase Order
EHP/DHS approval (if applicable)
Additional Suggested Documentation+
Budget (directly from grant)
Allowable Equipment Cost
Quantity Cost Total Cost
IJ – Prepare & Respond Investment Justification
(for each project)
Grant Modification 1Grant Adjustment
(if applicable)