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FINANCIAL MANAGEMENT SUMMER TRAINING FFY2012. Sponsoring Organizations of Child and Adult Care Sites. Summer 2012. FINANCIAL MANAGEMENT AGENDA. CACFP Financial Review Process Federal Financial Management Requirements DPI Financial Management Requirements Accounting System

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financial management summer training ffy2012

FINANCIAL MANAGEMENTSUMMER TRAINING FFY2012

Sponsoring

Organizations of

Child and Adult

Care Sites

Summer 2012

financial management agenda
FINANCIAL MANAGEMENT AGENDA

CACFP Financial Review Process

  • Federal Financial Management Requirements
  • DPI Financial Management Requirements
    • Accounting System
    • FFY2013 Budget
    • Nonprofit Food Service Financial Report
  • DPI CACFP Financial Review
    • And other CACFP financial reviews
  • Will you pass a DPI Financial Review?
frequently used terms
Frequently Used Terms
  • Agency: The organization name on the CACFP Application. Same as the name on the federal tax-exempt status (non-profit) or the legal name of the agency (for-profit).
  • Child and Adult Care Food Program (CACFP): Federally funded program through USDA and administered in WI by the Department of Public Instruction. Provides reimbursement for eligible meals served to enrolled participants. Sometimes referred to as the “Food Program”.
    • Voluntary Program (except for Head Starts)
    • Performance based reimbursement
      • Reimbursement received after the fact.
      • Documentation maintained to support meals were actually served to eligible children
frequently used terms1
Frequently Used Terms
  • Sponsoring Organization (SO): an agency with more than one participating site. Any combination of Child Care, Adult Care, Emergency Shelter and/or At-risk or Outside of School Hour approved site.
    • Affiliated: Sites are the same legal entity as the agency; same organization.
    • Unaffiliated: Sites have no affiliation with the Sponsoring Organization; different owner/board of directors.
  • Nonprofit Food Service Financial Report (NPFS): DPI form required from ALL participating agencies (for-profit and non-profit) that is used to report actual food program expenditures and earned food program revenue on a quarterly basis.
child and adult care food program
Child and Adult Care Food Program

IS NOT

“Free” money

Funding for personal expenses

To purchase soda/coffee for teachers, non-healthy and/or not enough food and snacks for participants

Entitlement Program

For the disorganized

IS

  • Federally Funded
    • Passed through DPI
  • a FOOD Program
  • Healthy meals to eligible participants
  • Voluntary Program
    • Except in Head Start
  • Heavily Administered
    • Detailed program requirements.
federal requirements
Federal Requirements

FINANCIAL VIABILITY

  • Appropriate practices for recruiting facilities [7 CFR § 226.6(b)(2)(vii)(A)(1)]
  • Financial Resources to Administer Program on a daily basis [7 CFR § 226.6(b)(2)(vii)(A)(2)]
    • Other Sources of funding
      • During interruptions in program payments
      • Fiscal claims against the agency
      • Unallowable program costs
      • Documentation:
        • Financial Statements
        • Audit Reports
  • Budgets [7 CFR § 226.6(b)(2)(vii)(A)(3)]
    • Costs must be necessary, reasonable, allowable and appropriately documented.
federal requirements1
Federal Requirements

Nonprofit Food Service

  • Cannot make a profit on Federal food program
  • No more than 3 month operating balance per program year
  • Documentation to support actual costs
  • Must have other source of income
    • Costs Not Covered
    • Temporary interruptions in program payments
    • Unallowable program costs
nonprofit food service operation
Nonprofit Food Service Operation
  • CACFP is like a separate nonprofit business within your business
  • Must show how you spend CACFP reimbursement in an allowable way
  • Required for ALL types of agencies even for-profits
slide11

DPI FINANCIAL MANAGEMENT REQUIREMENTS

Measurements of Financial Viability

1. Accounting System

  • In compliance with GAAP

2. Approved Budget

  • Amended Budget

3. Incurred Costs (Actual Costs)

  • Reported quarterly on the Nonprofit Food Service Financial Report
accounting system
Accounting System
  • Cash/Accrual/Modified Accrual
    • Cash System: Recognizes revenues and costs when cash is received and bills are paid.
    • Accrual System: Recognizes revenues and costs when incurred and uses payable and receivables.
    • Modified Accrual System: Certain expenses are reported on an accrual basis.
  • Compliance with Generally Accepted Accounting Principles (GAAP)
    • Rules for the accounting of costs and revenues
    • Resource: http://www.fasab.gov/accepted.html or Ask your staff Accountant
    • Items should not be purchased with CASH.
  • Financial Reports
    • General Ledger / Check Register
    • Profit/Loss Statement
    • Balance Sheet
  • Co-mingled CACFP funds with Agency funds
    • Method of separation (ie. independent account codes)
    • Approved allocation plan for shared costs
accounting system1
Accounting System
  • Consistent with all programs
  • Written Procedures
    • Process of Payments, Deposit of funds and Payroll
  • Single Audit Reports (non-profits only)
    • A-133 report required if expend over $500,000/year in federal dollars (non-profits only)
      • Single Audit Clearinghouse http://harvester.census.gov/sac/index.html
    • Less than $500,000 - Annual report/review from outside party should be conducted annually.
    • Copy sent to DPI within 9 months from end of agency’s FY if CACFP is major program.
  • For-profits: Compliance review by outside accountant
    • Annual Report
    • Should be completed when Federal taxes are completed.
    • Good resource: www.irs.gov
accounting system2
Accounting System

DPI Requirements:

  • CACFP vs. Other agency activities
  • Operational and Administrative Costs
  • Support NPFS reports submitted to SA
  • Consistent with other agency operations
accounting system3
Accounting System

Acceptable

  • Center credit card
  • Center checking account
  • Charge Account at local store
  • Invoice or COD
  • Formal purchasing procedures

Unacceptable

  • Cash
    • Including cash-back & cash with-drawls,
    • Not Petty Cash
  • Third party checks
  • Food Stamps

* Information per GAAP

cacfp budget
CACFP BUDGET
  • FFY2013 Detailed Budget (Attachment G)
  • Projection –
    • “Road Map” of Upcoming Food Program Year
    • All Food Program Expenses
      • Allowable, Reasonable, in accordance to FNS Instruction
      • How much will it cost your agency to run the food program?
    • All Revenue Available
      • CACFP Meal Reimbursement
      • CACFP Cash-in-lieu reimbursement
      • Interest earned on CACFP funds
      • “Other” Income
        • Unfunded/Unallowable Costs
        • SA Overclaims
        • Interruption in Program Payments
        • Ex. Child Care Fees, Tuition, Headstart, W-2, Donations
ffy2013 cacfp budget attachment g
FFY2013 CACFP Budget (Attachment G)
  • Available online at: http://www.dpi.wi.gov/fns/cacfpapps.html
  • Click on “Attachment G: Budget for Sponsors of Affiliated Sites”.
    • Note: the Budget is a downloadable, Excel form that must be submitted electronically.
  • Download (Save) the budget form to YOURcomputer.
  • E-mail completed budget to Cari Muggenburg at DPI
    • E-mail: Must be sent by Authorized Rep. on contract
      • Acts as the signature
ffy2013 cacfp budget attachment g1
FFY2013 CACFP Budget (Attachment G)
  • Attachment G used to support figures entered on Online Application
  • Online application will not be approved without an approved Attachment G
    • May result in delay/non-receipt of reimbursement.
  • Approval will be received via e-mail to Authorized Representative
    • Include copy of approved budget.
    • Notify of online application approval.
    • Formal approval letter will also be sent via e-mail to AR.
    • Can submit claim when receive initial email from Cari Muggenburg.
      • Pending any unresolved issues
ffy2013 cacfp budget
FFY2013 CACFP Budget
  • Project Food Program Costs & Revenue
    • Costs: Regardless if paid with CACFP reimbursement
      • How much will it cost your agency to administer the food program?
      • Will it be paid directly with CACFP funds?
    • Revenue: All sources and amounts available to fund food program expenses.
      • Not covered
      • Unallowable
      • Pay Overclaims
  • Costs not approved are unallowable
    • Cannot be funded with CACFP funds
administrative operational costs
Administrative

Monitoring

Claim

Compiling

Submitting

Reconciling

Accounting / Bookkeeping

Operational

Kitchen

Meals

Preparation

Delivery

Menus –

Planning, Dietician

Purchasing / Vended Meals

Administrative & Operational Costs
frequent allowable costs lists are not all inclusive
Frequent Allowable Costs(lists are not all inclusive)

Allowable

  • Food (consumable)
  • Kitchen Supplies (Nonfood)
  • Contract / Vended Meals
  • Food Program Personnel
    • Admin & Operational
  • Audit Services
    • CACFP Portion
  • Employee Travel
    • e.g. Grocery shopping, DPI training
  • Equipment Purchase/Rental
food costs
Food Costs
  • Costs in purchasing ingredients for menu items (Food Supplies) AND/OR the cost of purchasing itemized CACFP meals from an outside vendor (Contracted Service) that are served to the participants
  • Recommend at least 50% of budget
    • For healthy, reimbursable meals at least ½ of reimbursement should be used on food costs.
food supplies
Food Supplies
  • Consumable food products used to create menu items served to program participants.
  • Costs can include delivery costs.
  • Taxes must be paid with non-CACFP funds (tax-exempt).
  • Report on the Food Supplies/Food Costs line on budget and NPFS.
food vendors
Food Vendors
  • Outside food service, not related to agency.
  • Copy of Contract to DPI
  • Provide all CACFP components.
  • Report as Contracted Services on CACFP Budget and Financial Report
contracted vended meals
Contracted/Vended Meals
  • Costs of purchased, prepared meals are contracted service costs
  • Contract must be signed prior to beginning date (contracted service)
  • The vendor must keep production records(a record of quantityof food prepared)
food service labor
Food Service Labor

All wages, salaries, employee benefits, and the share of the employee taxes paid by the agency.

operational food service labor
Operational Food Service Labor
  • Menu planning
    • Production Records
  • Food purchasing
  • Cooking
  • Serving the food
  • Cleaning-up after the meal
  • Meal Attendance
food service labor is also
Food Service Labor is also…
  • Time spent completing required records
    • HSIR and HSIS
    • Monthly claim
    • Financial reports
  • Supervision of day-to-day food service operations

These are Administrative costs

administrative costs
Administrative Costs

Sponsors:

No more than 15% of CACFP meal reimbursement can be spent on administrative costs without State Agency waiver.

frequent unallowable costs lists are not all inclusive
Frequent Unallowable Costs(lists are not all inclusive)

Unallowable

  • Bad Debts, Fines, Penalties, interest on credit cards
  • Non food program food costs
    • Example: Coffee, Entertainment
  • Purchase of food for personal use
    • Money received must be kept in food program account. Must have strict internal policy.
  • Costs of meals for non-CACFP personnel or non-employees
    • Example: Bus driver, Custodian
    • Must have policy and paid with non-CACFP funds.
resources for allowable unallowable costs
Resources for Allowable/Unallowable Costs
  • Guidance Memorandum #11
    • Child Care: http://dpi.wi.gov/fns/centermemos.html
    • Adult Care: http://dpi.wi.gov/fns/adultmemos.html
    • “Standards for Allowable Costs”
      • User friendly, searchable, Excel reference
  • FNS Instruction 796-2 (rev. 3)
    • Electronic copy available on our website under GM #11
    • Derived from OMB Circulars and Regulations
    • http://www.whitehouse.gov/omb/circulars_default
cacfp reimbursement
CACFP Reimbursement
  • CACFP Reimbursement is based upon:
    • Number of meals you serve
    • Eligibility of the participants
  • The funds you receive will not cover all of yourallowable FP costs.
remember
Remember!

The CACFP funds are replacing funds you are now spending

other source of income
Other Source of Income
  • CACFP is part of your overall organization.
  • Funds received to run organization must also be available to fund CACFP costs not covered by reimbursement.
  • Examples: Headstart, Tuition, W-2, Fundraising, Private Donations
  • Food Stamps is not another source of income for the center.
  • Report projected Source and Amount on Budget
best use of your cacfp reimbursement
Best use of your CACFP Reimbursement

Plan, budget, and organizing the funds available will help you to maximize your CACFP reimbursement.

No planning, using funds on non-program needs, no accountability of funds spent will result in loss of funding and/or participation

amending budgets
Amending Budgets
  • DPI Policy: CACFP funds can only be used for approved food program line items on annual budget.
  • Notify DPI of any budget omissions.
  • When in doubt contact DPI for approval.
how would dpi know what i spent my cacfp reimbursement on
How would DPI know what I spent my CACFP reimbursement on?
  • Review of quarterly NPFS Report
  • On-Site Financial Reviews
nonprofit food service financial report npfs
Nonprofit Food Service Financial Report (NPFS)
  • Quarterly report of all ACTUAL CACFP expenditures.
    • Form PI-1463-A (SO of Affiliated)
    • Form PI-1463-C (SO of Unaffiliated)
    • Electronic, downloadable, Word version form
  • At end of program year, food program costs should equal expenditures charged to food service program plus any additional food program expenses covered with non-CAFP funds. Do allow carryover of no more than 3 months worth of reimbursement with explanation.
  • Amounts must be supported by actual documentation – NO ESTIMATES
  • Forms can be found under Guidance Memo 11
nonprofit food service financial report npfs1
Nonprofit Food Service Financial Report (NPFS)

All Food Program Costs:

  • Actual Expenditures
    • Not Estimates
  • Support Documentation
  • Only report CACFP %
    • Shared costs
  • Amount net credits
  • Allowable and Approved
    • FNS 796-2 (rev.3)
    • CACFP Budget
nonprofit food service financial report npfs2
Nonprofit Food Service Financial Report (NPFS)
  • CACFP revenue should be reported using the accrual method (as earned, not received).
  • Additional program income must be reported (e.g. interest income, rebates)
  • Additional non-program income must be reported
    • Total Costs less Program income = non-program income
nonprofit food service financial reports npfs due dates
Nonprofit Food Service Financial Reports (NPFS) Due Dates

Sponsoring Organization

  • 1st Quarter
    • Reporting period: October 1 – December 31
    • Due Date: March 1st
  • 2nd Quarter
    • Reporting period: January 1 – March 31
    • Due Date: June 1st
  • 3rd Quarter
    • Reporting period: April 1 – June 30
    • Due Date: September 1st
  • 4th Quarter
    • Reporting period: July 1 – September 30
    • Due Date: December 1st

PI-1463-A (front page)

cacfp financial reviews
CACFP Financial Reviews
  • State Agency (SA)
  • USDA
  • OIG
cacfp financial reviews1
CACFP Financial Reviews
  • SA Reviews (DPI)
    • Announced (30 day notice) and Unannounced (Drop-in)
    • Items to have available:
      • Support documentation for NPFS for last and current FFY
      • ALL support documentation for food program costs pulled and ready for review
      • Bank statements/cancelled checks for food program funds
      • General Ledger, allocation plan, P/L reports
    • MUST BE ORGANIZED
      • Be able to show/explain your organization/accounting system
      • How do you pay your bills?
cacfp financial reviews2
CACFP Financial Reviews
  • USDA Reviews
    • Monitoring SA as part of Management Evaluation
    • SA will work with agency on Corrective Action (if needed)
  • OIG (Office of Inspector General) Audits
    • “Report Card” on CACFP
    • Focus Audits and Data Gathering on key elements or red flags
      • Related party transactions (less than arms length)
      • Purchase of property and/or real estate
      • Excessive growth in short time-span
      • Contracted Services
    • Reports go to Washington DC (Congress)
    • http://www.usda.gov/oig/
slide51

5500

750

5500

11

X

750

Big Day Care, Inc.

12,300

0

1265 Lombardi Ave. Green Bay, WI 54304

0

475

4,500

0

0

3,080

0

475

16,800

0

22,300

23,525

3,080

Buddy Ann Holmgren

3/25/2012

Buddy Ann Holmgren, Accountant

Sponsoring Organizations

slide52

5500

750

5500

12

05-4321

750

Big Day Care, Inc.

5500

2000

1265 Lombardi Ave. Green Bay, WI 54304

1500

0

4800

6,030

4,500

10,530

475

750

14,275

Child Care Fees

9,995

19,775

Difference

20,525

20,525

Must Equal

0

Sparky McSparkle

2/5/2012

Sparky McSparkle, Authorized Rep

CORRECT COPY

financial management resources
Financial Management Resources
  • Federal Rules
    • http://www.fns.usda.gov/cnd/Care/Regs-Policy/Regulations.htm
    • 7 CFR 226
    • FNS Instruction 796-2 (rev. 3)
    • OMB Circulars (now regulation)
      • Non-profits: 2 CFR 230
      • Public, State, Indian Reservations: 2 CFR 225
      • For-profit: Federal Acquisition Regulation (FAR)
  • State Rules (http://dpi.wi.gov/fns/centermemos.html)
    • Guidance Memo 11
      • State agency Financial Management policy Child and Adult Care sites (Sponsors & Independent)
      • Instructions Completion of NPFS Report(s)
      • Allowable/Unallowable costs
      • Fiscal Action Procedures
  • Cari Ann Muggenburg
    • E-mail: cari.muggenburg@dpi.wi.gov
financial management summer training ffy20121

FINANCIAL MANAGEMENTSUMMER TRAINING FFY2012

Sponsoring

Organizations of

Child and Adult

Care Sites

Summer 2012