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Financials in the New Frontier Presented by: Beverley Coleman August 29, 2013

Financials in the New Frontier Presented by: Beverley Coleman August 29, 2013. CLIMING THE STEPS IN THE NEW FRONTIER. Sometimes financials can seem like a climb to the top But its worth it once you get there !! https://www.youtube.com/watch?v=LYDHnUfWWDE. WHY WE DO IT?.

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Financials in the New Frontier Presented by: Beverley Coleman August 29, 2013

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  1. Financials in the New Frontier Presented by: Beverley Coleman August 29, 2013

  2. CLIMING THE STEPS IN THE NEW FRONTIER Sometimes financials can seem like a climb to the top But its worth it once you get there !! • https://www.youtube.com/watch?v=LYDHnUfWWDE

  3. WHY WE DO IT? • Financial documentation is required by DHCD to ensure that projects are implemented in compliance with federal and state statues. • Financial controls will prevent waste and audit findings • Improper use of funds will result in guarantee repaying project cost • Proper financial records assures a smooth compliance review

  4. FINANCIAL MANAGEMENT REQUIREMENTS • CDBG FUNDS should be deposited in a non-interest bearing account • Funds should not be co-mingled with any other funds used on the project • DHCD will approve a budget for the grant expenditures • Records of each expenditure must agree with the budget line items

  5. MORE ON FINANCIAL MANGEMENT REQUIREMENTS • Copies of the localities’ audit for the year CDBG funds were expended • Records of the expenditure of leverage funds

  6. ACCOUNTING • Virginia localities are required to comply with Generally Accepted Accounting Principles (GAAP) • Grantees are encouraged to use a special revenue fund for the deposit of grant funds • All transactions relating to the grant should be recorded in the special revenue fund account

  7. THE BUDGET • A project budget must be developed • Include in the budget total project costs • Show what costs are going to be paid with CDBG funds and what cost will be paid with non-CDBG funds • Keep in mind that 10% of the total construction cost is the maximum allowance Construction-related soft costs A budget is putting all the eggs in one basket

  8. MORE ON THE BUDGET • The budget will affect the manner by which you will draw down CDBG funds • The budget line items should match the line items in IDIS • The budget must always balance

  9. Budget Format

  10. BUDGET REVISIONS • The current approved budget should always be in use • DHCD must approve all budget revisions • Budget revision request should be made prior to the submission of a drawdown using the revised budget line items

  11. TRACKING LEAVERAGE FUNDS • Leverage funds are those funds offered to demonstrate that the Grantee has buy in into the project and are a portion of the non-CDBG funds included in the development of the project • Records should be maintained about how these funds are being spent • Leverage funds should be spent in proportion with CDBG funds

  12. PROCUREMENT • DHCD requires all grantees to follow the Agency Procurement and Surplus Property Manual policies and procedures that was prepared as a result of the Virginia Public Procurement Act • Grantee should submit any changes to their policies and procedures for DHCD approval

  13. INTERNAL CONTROLS Separation of duties-More than one person should be responsible for the financial transactions. At least three persons should be involved. One person should approved the payment of invoices and two others should sign the check Workflow procedures-processing of all transactions from one employee to another should provide for a cross- check of work Documentation-workflow procedures should be detailed and maintained in a notebook, file or binder that is accessible to all involved in the expenditure of funds

  14. MORE ON INTERNAL CONTROLS • Changes in personnel directly involved in the grant should be reported to DHCD and reflected in the Project Management Plan • Any changes in the grantee’s internal control system should be audited by an independent auditor and reported to your Community Development Specialist

  15. MANAGING EXPENDITURES • Each transaction should be supported with documentation including invoices, canceled checks, payment vouchers, etc. • Transactions should be recorded in ledgers or a spreadsheet system • Contracts should be in line with your budget

  16. CASH MANAGEMENT • Checks should be pre-numbered • Invoices and checks should be cross referenced • Drawdown amounts should match the bank statements

  17. AUDITS • A copy of the previous fiscal years’ audit should be in the file • DHCD must receive a copy of the audits that are prepared during the years CDBG funds are spent • The audit for the last year of activities must be received by DHCD before a grant can be closed

  18. PROGRAM INCOME • There must be a DHCD approved Program Income plan for all projects that may earn program income • Program Income is funds received as the result of CDBG funds being invested in a project • Program Income in a rehab project can be earned from loan repayments and loan pay offs • The grantee must track Program Income

  19. REVIEW

  20. CONTACT INFORMATION • beverley.coleman@dhcd.virginia.gov • (804) 371-7076

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