Grant Financial Management and Compliance Monitoring Karly

Grant Financial Management and Compliance Monitoring Karly Watson Grants Financial and Monitoring Manager Contracts and Asset Management Don Duru Grants Monitor Contracts and Asset Management

Grant Financial Management Grant Financial Management Karly Watson Grants Financial and Monitoring Manager Contracts and Asset Management

Grant Financial Management Grantee has a fiduciary responsibility for the grant. Office of the Attorney General (OAG) has oversight to see that grant projects operate: Efficiently; Effectively; and In accordance with all laws, rules, regulations and guidelines that govern grants.

Grant Award Signed contract by the authorized official and the OAG contains: Amount awarded for the fiscal year, and originally awarded budget categories; Term of the contract; and Any applicable special conditions.

OAG Financial Forms The OAG Financial Forms are emailed to each grantee at the beginning of the fiscal year Budgets Invoice Financial Status Report (FSR) Salary Detail & Internal Review Sheet Inventory Report (only for Equipment) The Grant reimbursement forms (Invoice, FSR, and Salary Detail & Review Sheet) are combined in an Excel workbook.

Approved Detailed Budget Budget Categories Personnel Fringe benefits Professional & Consultant Travel Equipment Supplies Other Direct Operating Expenses (DOE)

Budget Adjustments Generally, one budget adjustment is allowed per grant year. Requires prior approval by the OAG Adjustment of 10% or more Move from one budget category to another budget category Reallocate funds between line items Adding new budget category Move funds to a new budget category Adding new line items

Budget Adjustments Personnel Changes Increase/decrease in hours worked Eliminate/change the job function Add a new position

Other Budget Changes Less than 10% budget modification Requires notification to the OAG before implementation Awarded funds are moved within or between approved budget categories or approved budget lines Funds are allocated between approved line items within an approved budget category Personnel modification due to change in job title, job function. Lapse salaries from termination/resignation.

Common Errors On Budgets Personnel Position Titles on the Budgets don’t match the Position Titles on the Job Descriptions. Requesting Ineligible/Unallowable Costs These can be found in the Grant Application Kits, 2 CFR 200, and the Uniform Grant Management Standards You may also contact your Grant Manager if you have questions regarding a particular item or activity.

Invoices Invoice Form Invoice Number – what is used by your agency Date – date the invoice is mailed Agency Name – name of the agency Preparer’s Name – individual who fills out the form Texas Tax Identification Number (TIN) – tax identifier Vendor ID number – 14-digit number issued by the Comptroller Federal ID Number – 9-digit Federal Tax Number Contract Number – number assigned by the OAG Amount – should match the amount requested on the FSR Signature – the Authorized Official or Alternate Designee

Common Errors On Invoices Incorrect or Missing TINS number Mailing Address on the Invoice does not match the address submitted on the Direct Deposit Authorization Form Incorrect Service Date for Month of Billing Example: Entering December 2018 for December 2017, or entering the month of Service as January when data for February is entered in the FSR. Amount of Claim does not match total requested on the FSR. Authorized Official or Alternate Designee did not sign and/or type their name and title. Invoice signed by someone other than the Authorized Official or Alternate Designee

Financial Status Report (FSR) Financial Status Report (FSR) Reporting mechanism to capture monthly expenses Invoice should match the monthly total amount requested for reimbursement Budget adjustment or 10% budget modification on the right-hand side of the form indicates: Current Approved Budget Increase or decrease in the budget category Revised Approved Budget Year-to-Date financial information provides: YTD total YTD balance Form must be sent in with the Invoice

Common FSR Errors Amount listed in Salary does not match the Total on the Salary Detail & Internal Review sheet Not allocating Professional and Consultant Costs in the Preparer’s Comments Billing Registration Costs under Travel Registration Costs are billed under ODOE for the OAG. Not allocating Travel Costs over 300 in the Preparer’s Comments Not providing a justification in the Preparer’s Comments for a variance of 600 from one month to the next in any budget category.

Common FSR Errors - Continued Not providing a status update on vacant positions. Billing additional hours for filled positions to cover the vacancy without gaining prior approval from the OAG. Not removing the justifications for the previous months from the Preparer’s Comments. Going over budget in a category without first notifying the OAG. Always notify your grant manager when you need a budget adjustment before submitting an FSR with negative balances. Changing amounts in the previous months requests.

Salary Detail & Internal Review Sheet Salary Detail & Internal Review Sheet Lists approved grant funded positions “Position Currently Filled” column Hours worked on the grant column Total amount must match the salary category on the FSR Month of service must match the Invoice The form must be sent with Invoice

Common Salary Detail & Internal Review Sheet Errors Leaving the “Position Currently Filled” column blank Billing “Hours Worked on Grant” over the monthly equivalent of the approved hours on the Budget. If hours go over the budgeted amount during a month, let your grant manager know and provide an explanation in the Preparer’s Comments of the FSR. Month of Service does not match the billing on the FSR Tied to the Invoice Sheet Total Amount billed does not match the Salary amount on the FSR

Other Common Errors for Reimbursement Requests Not submitting Reimbursement Forms even when billing 0.00 Emailing in Reimbursement Forms Reimbursement Forms must be sent through the mail Submitting the Forms after the monthly deadline. This can result in your grant being placed on Financial Hold. If you need to submit the reimbursement forms late, let the financial specialist for the grant type know in advance of the deadline if possible.

Inventory Form Only for grantees which have Equipment as a budgeted line item. Track tangible equipment having a useful life of more than one year. Grantee name Date prepared Name of preparer Type of grant Date acquired and a brief description Amount paid Inventory number and location of the equipment Authorized signature or designee

Submitting Requests for Reimbursement The Invoice Form, FSR and Salary Detail & Internal Review Sheet must be mailed to: Contracts and Asset Management Division Office of the Attorney General - MC 005 P.O. Box 12548 Austin, Texas 78711-2548

If you need any further information, contact your Financial Specialist: Robert Huenefeld [email protected] Brandy Bandera [email protected] Bobby Ratra [email protected]

Grant Monitoring Grants Compliance Monitoring Don Duru Grants Monitor Contracts and Asset Management

OAG’s Requirements The OAG is required by federal/state regulations to monitor grantees to ensure compliance with the following: Federal and/or state awards are used for authorized purposes Compliance with laws, regulations (i.e., UGMS, CFR) Provisions of contracts or grant agreements are achieved

Grantee’s Requirements Some key areas that the OAG reviews for compliance include the following: Federal and/or state awards are used for authorized purposes Compliance with laws, regulations (i.e., UGMS, CFR) Provisions of contracts or grant agreements are achieved Segregation of duties / internal controls exist Financial controls

Grantee’s Requirements - Continued Policies and procedures are in place and being followed System to record and track expenditures for each grant Expenditure reports reconciled monthly Adequate supporting documentation Filing and record retention system

Overview Criteria Types of monitoring and expectations Common findings Annual audit requirements Fraud, waste and abuse

Criteria Criteria Federal standards State standards OAG standards

Grant Management Federal Standards Electronic Code of Federal Regulations (CFR) 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D—Post Federal Award Requirements Standards for Financial and Program Management Subpart E—Cost Principles

Grant Management Federal Standards 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart F Audit Requirements Audits of States, Local Governments, and Non-Profit Organizations A single audit is required if 750,000 or more in federal or state expenditures. Federal programs are listed in the Catalog of Federal Domestic Assistance (CFDA). Audit period based on the organization’s fiscal year.

Grant Management Federal Standards Uniform Grant Management Standards (UGMS) Texas Administrative Code (TAC) T.A.C. §60 – Texas Crime Victim Services Grant Programs Provides OAG rules for Other Victim Assistance Grants (OVAG) and Victim Coordinator/Liaison Grants (VCLG) T.A.C. §62 – Sexual Assault Prevention and Crisis Services Provides OAG rules for Sexual Assault Prevention and Crisis Services (SAPCS)

Grant Management Federal Standards Compliance with UGMS and 2 CFR 200 Grantees must follow the guidelines in the Uniform Grant Management Standards (UGMS). Both governmental entities as well as non-profit entities are required to follow UGMS guidelines and/or applicable cost principles. Grantees must be in compliance with all applicable federal/state statutes, regulations, policies, guidelines and requirements, including, but not limited to, UGMS as well as 2 CFR 200 (Formerly OMB Circulars No. A21, A-110, A-122, A-128, A-87 A-133).

Types of Monitoring On-site monitoring visit – conducted by grant monitors at your organization Desk review – conducted by OAG grant staff Technical assistance visit – conducted by OAG grant monitors and/or grant managers at your organization

Grant Monitoring Expectations OAG grant monitor will contact your organization prior to the engagement Engagement letter sent with date of engagement Information OAG will request to send in before the engagement: Board meeting minutes for the past year List of board members By-laws Organizational chart of the organization

Grant Monitoring Expectations Time sheets for personnel on OAG grants General ledger for all expenditures tested Internal Control Questionnaire (ICQ) – questionnaire regarding the internal controls

Grant Monitoring Expectations Documents to have ready the day of the visit Quarterly federal tax return (941) Policies and procedures Bank reconciliations Personnel files Supporting documentation for all non-payroll expenditures (include approval form, invoice and cleared checks)

Top 10 Common Findings 1. Time sheets do not match hours reported on FSR. 2. Personnel files were missing up-to-date evaluations, acknowledgement of personnel policies, or job descriptions. 3. Time sheets missing employee/supervisory signature and/or date. 4. Time sheets are not signed “after-the-fact.” 5. Time sheets do not show the time worked for each funding source. 6. Executive director’s time sheet was not approved by board. 7. General ledger does not reconcile with expenditures.

Top 10 Common Findings - Continued 8. Grantee expense items not on approved budget. 9. Missing supporting documentation or inadequate documentation for expenditures. 10. Failure to follow organization’s policies and procedures.

Audit Requirement An annual independent financial audit is a requirement for this OAG grant, which may include: A financial audit only, or A financial audit with a single audit (compliance audit). The audit shall meet 2 CFR 200 and UGMS requirements. Additionally, the annual independent financial audit shall meet Generally Accepted Government Accounting Standards (GAGAS) in the event a Single Audit is not required. The annual independent financial audit is due within nine months of the end of the fiscal year of the agency or within 30 days of completion of audit, whichever is earlier.

Fraud, Waste and Abuse Definition of fraud Intentional deception or misrepresentation that an individual knows to be false or does not believe to be true, when that individual knows that the deception could result in some unauthorized benefit to himself or herself or some other person Deliberate misuse or misapplication of resources Examples of fraud Requesting or attempting to request reimbursement for travel that did not occur Falsifying a time sheet or a billing statement or any other document to benefit one’s self or your agency

Fraud, Waste and Abuse Definition of waste Waste amounts to the extravagant, careless, or needless expenditure of resources. Waste could result from deficient practices, defective system controls, or imprudent decisions. Examples of waste Authorizing unnecessary or extravagant expenditures Engaging in excessive and unnecessary work travel

Fraud, Waste and Abuse Definition of abuse Incidents or practices that are inconsistent with sound business or fiscal practices These practices may directly or indirectly result in unnecessary costs to the program, improper payment, or payment for services that are not necessary. Abuse of authority – employees must not misuse their title, position, or authority to obtain a personal benefit. Examples of abuse Improper charging of services or payroll Improperly disclosing confidential information to which one has access Forcing or trying to force a subordinate to commit an act that one knows is illegal

Fraud, Waste and Abuse Common grant fraud scenarios Charging personal expenses as business expenses against the grant Charging for costs which have not been incurred or are not attributable to the grant Charging for inflated labor costs or hours, or categories of labor which have not been incurred (for example, fictitious employees, contractors, or consultants)

Fraud, Waste and Abuse Detect and Prevent Fraud Establish an adequate and effective system of accounting, internal controls, records control, and records retention. Implement an internal compliance and ethics program that encourages the recognition and reporting of fraud, waste, or abuse. Report suspected fraud to your OAG grant manager, GAD management, or the Texas State Auditor’s Office at http://sao.fraud.state.tx.us/ or SAO Hotline at (800) TXAUDIT (892-8348). Grant Fraud: National Procurement Fraud Task Force

Helpful Websites Texas Administrative Code (TAC) https://www.sos.texas.gov/tac/index.shtml Uniform Grant Management Standards (UGMS) https://comptroller.texas.gov/purchasing/docs/ugms.pdf 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards http://www.gpo.gov/fdsys/pkg/CFR-2015-title2-vol1/xml/ CFR-2015-title2-vol1.xml Council on Financial Assistance Reform (COFAR) http://www.CFO.gov/COFAR/

Helpful Websites - Continued Crime Victim Services – Contracts and Asset Management https://www.texasattorneygeneral.gov/cvs/grants-and-co ntracts Catalog of Federal Domestic Assistance https://www.cfda.gov/ Texas Comptroller of Public Accounts https://comptroller.texas.gov/

Contact Information Karly Watson Grants Financial and Monitoring Manager Office of the Attorney General [email protected] (512) 936-1597 Don Duru Grants Monitor Office of the Attorney General [email protected] (512) 936-2182