Financial Management Training Program for Program Managers

1. 2006 EASEMENT TRAINING FINANCIAL MANAGEMENT Presenters Linda F. Washington Stan Yackoski

2. OBJECTIVE • To provide the Program Manager/Staff with the financial tools necessary to perform his/her job: • OMB Circular A-123/Sarbanes – Oxley Act (SOX) • Spending Chain

3. OMB CIRCULAR A-123 • Effective FY 2006 it is Management Responsibility: • Develop and implement appropriate, cost effective internal control for results oriented management; • Assess and document the adequacy of internal controls in programs and operations; • Identify needed improvements; • Take corresponding corrective action; and • Consistently apply the standards

4. OMB A-123 Continuation • FY 2007 Initiatives • Open Obligation Review – WRP • Re – Testing of what was completed in FY 06 • Applying old standards/implementing new standards

5. Spending Chain • A commitment – is the setting side of funds that will be used to purchase goods and/or services in the future. • An obligation – records the accounting and budgetary impact of an order to purchase goods and/or services. • An invoice – records the receipt of a bill from the vendor identifying the terms of payment for goods and/or services received. • An expenditure – is an authorization to pay for goods and/or services received. • A payment – is authorized to pay for goods and/or services received.

6. A Commitment • Is the setting aside of funds that will be used to purchase goods and/or services in the future. • Form SF- 424, Application • Form AD – 1159, Notification of Intent to Continue • E-Mail Message from Program to Finance

7. An Obligation • Records the accounting and budgetary impact of an order to purchase goods and/or services. • Signed (by all parties) Cooperative Agreement • AD-1157 and AD-1157 (A) Option Agreement to Purchase and Option Agreement to Purchase Amendment,

8. An Invoice • Records the receipt of a bill from the vendor identifying the terms of payment for goods and/or services received. • Form- AD-1161 Payment application • Form AD-270 Request for Reimbursement or Advance • Vendor created invoice

9. An Expenditure • Is an authorization to pay for goods and/or services received. • Form- AD-1161 Approved Payment application • Form AD-270 Request for Reimbursement or Advance Approved • Vendor created invoice Approved

10. A Payment • Is authorized to pay for goods and/or services received. • Within FFIS this is the actual disbursement of funds • EFT • Check

11. Examples • Example 1: • What part of the spending chain does this document apply? What Dollar amount should be recorded in the system: • Commitment • Obligation • Invoice • Payment

12. Examples • Example 2: • What part of the spending chain does this document apply? What Dollar amount should be recorded in the system: • Commitment • Obligation • Invoice • Payment

13. Examples • Example 3: • What part of the spending chain does this document apply? What Dollar amount should be recorded in the system: • Commitment • Obligation • Invoice • Payment

14. Examples • Example 4: • What part of the spending chain does this document apply? What Dollar amount should be recorded in the system: • Commitment • Obligation • Invoice • Payment

15. Examples • Example 5: • What part of the spending chain does this document apply? What Dollar amount should be recorded in the system: • Commitment • Obligation • Invoice • Payment

16. IPIA • What is IPIA? • FY 2006 Results • Easement Issues • Future Testing • 2007 IPIA

17. What is IPIA? • Improper Payment Information Act of 2002 • Process • Incorporated into Appendix C of OMB Circular A-123 for 2007

18. 2006 Farm Bill Results • 765 Samples • Improper Rate 0.22% • Improper Dollars (estimated) $2,874,125.00

19. Easement Issues • Documentation • Appraisals • Calculations

20. Future Testing • Farm Bill Programs will be tested on a cyclical basis