National Association for State Community Services Programs2011 Mid-Winter Training Conference

The Federal Perspective

National Association for State Community Services Programs 2011 Mid-Winter

Training Conference

National Association for State Community Services Programs2011 Mid-Winter Training Conference

FINANCIAL SYSTEM

2

Budget System

Cash Management

System

Procurement System

Human Resources/Payroll System

Travel System

Inventory Management

System

Contract Management

System

Property Management

System

CORE FINANCIAL- Cost Accounting- Reporting

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Budget System• Subgrantees Not Submitting an Annual Budget

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Cash Management System• Subgrantees given advances that exceeded

the cash needs of the program• Advances not put in interest bearing accounts• Subgrantees not provided cash advances

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Procurement System• Competitive process not used for procurement of

contractors• Cost analysis not done in the selection of the contractor• Bid/Proposal specifications inadequate or not written at

all• Cumbersome procurement procedures• Incomplete documentation of procurement activities• Lease/purchase analysis for equipment not performed

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Human Resources/Payroll System• Payroll information did not support that

employees were providing services to the program

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Travel System

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Inventory Management System• Inventory records do not track the point of

purchase to the installation of materials on the house

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Grant/Contract Management System• Contractors billed for labor charges that had not

been performed and materials that had not been installed

• Inadequate oversight of contractors• Inadequate documentation for contractor billing• Subgrantees not monitored to ensure compliance

with financial regulations• Evaluation of contractors not documented

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Property Management System• Subgrantees not performing a physical

reconciliation of equipment• Subgrantees not requesting permission to

purchase equipment prior to purchase• Equipment records do not include required

information

National Association for State Community Services Programs2011 Mid-Winter Training Conference

FOR PROFIT WEATHERIZATION SERVICESAgency Self Assessment• Does the organization have the skills needed to run a

for profit project?• Has the organization identified what help they will

need and where to get the help?• Do the staff have the time required to learn the things

that they need to know?• Does the organization have the money to hire the staff

and/or consultants needed?

National Association for State Community Services Programs2011 Mid-Winter Training Conference

FOR PROFIT WEATHERIZATION SERVICESAgency Self Assessment (cont.)• Is the organization interested in the proposed for profit

project?• Is the organization committed to the success of the for profit

project?• Is the organization willing to devote the time needed to

develop a successful for profit project?• Will the project fill an unmet need in the community or can

you do it better that the current businesses providing the goods/services?

National Association for State Community Services Programs2011 Mid-Winter Training Conference

FOR PROFIT WEATHERIZATION SERVICESAgency Self Assessment (cont.)

• Is there sufficient customer demand for the goods/services offered by the project?

• Will the organization be able to compete competitively?• Does the Board of Directors and Administration

understand financial statements such as cash flow, profit and loss, and balance sheets?

• Has the organization developed a comprehensive business plan?

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Business PlanningThe steps involved in developing a business plan include:STEP 1: Determine what is wanted from the venture,

recognizing the time and investment involved.

STEP 2: Survey the target-population you plan to serve to determine if the necessary volume required to produce the desired income is attainable

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Business Planning The steps involved in developing a business plan include: (cont)

STEP 3: Prepare a statement of assets to be used in the venture

STEP 4: Analyze estimated expenses in terms of fixed or variable nature and determine the break point

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Business Planning The steps involved in developing a business plan include: (cont)

STEP 5: Review the risks to which the organization is subject and methods with which these risks are going to be minimized

STEP 6: Establish an adequate system of accounting records

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Federal Regulations10 CFR 600.134 - Equipment“The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment.” “User charges shall be treated as program income.”

National Association for State Community Services Programs2011 Mid-Winter Training Conference

Federal Regulations (cont.)

10 CFR 600.135 – Supplies and other expendible property“The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the supplies.” “User charges shall be treated as program income.”