Best Practices in Preparing For An Audit or Monitoring Visit

Top 3 Auditor’s Advice№ 1 – Documentation№ 2 – Disclosure№ 3 – Communication

Objectives Best Practices & Suggestions for Common Audit Findings

Most Requested Documents

General Principles and Guidelines for Documentation

Examples of Best Practices

→ Documenting Timelines

→ Expenditure Report Preparation

→ Inventory Reporting

Audit Tip #1 – Know Your Compliance Requirements A-133 Compliance Requirement TableNumber Description Federal State

A Activities Allowed or Un-Allowed X X

B Allowable Cost/Cost Principles X X

C Cash Management X X

D Davis-Beacon Act X

E Eligibility X X

F Equipment & Real Property Management X X

G Matching and/or Level Effort and/or Earmarking X X

H Period of Availability of Federal Funds X X

I Procurement & Suspension and Debarment X

J Program Income X

K Real Property Acquisition and Relocation Assistance X

L Reporting X X

M Sub-Recipient Monitoring X X

N Special Test and Provisions X X

Best Practice - Grant Narrative with A133 Internal Controls ComplianceA – Activities Allowed or Un-Allowed, and Allowable Cost/Cost Principles

Controls:(1)Authorization of expenditures by knowledgeable individuals(2)Budget analysis prepared quarterly by grant accountants

Process:The City of Tampa management establishes budgets for Federal and non-

Federal programs. Federal programs are established in accordance with government agreements. The Budget Analyst, Financial Accountant and management compare actual amounts to departmental budgets on a monthly basis for initiatives funded by the grant. The affiliates that receive a direct grant for Capacity Build do not maintain a budget to actual report because the budget amount is fixed as it relates to salary of employees. Discrepancies are researched to determine if costs are appropriately charged. Each government program has a budget versus actual schedule, which compares actual expenses for each line items with the agreement’s budget for that line item.

Current Top 5 Common A-133 Findings1. Allowable Costs/Cost Principles (19%)

* Staff charged food to a grant because they were unaware that it was unallowable* Excessive Administrative Costs2. Reporting (18%)* Grant progress reports not filed on time* SEFA is incomplete or not prepared at all3. Other (13%)* Insufficient monitoring of sub-recipients* Program serving ineligible participants* Fraudulent payments to vendors

4. Procurement, Suspension/Debarment (9%)* Lack of competitive bidding documentation

5. Equipment/Real Property Management (8%)* No evidence of inventory review or reconciliation to financial records.

* = Example

Best Practices to Reduce A-133 Findings

FINDING BEST PRACTICE

Fraudulent vendor payments New vendor set up requires independent approval

New vendor set up is only handled by one department (Accounting or Purchasing)

Check for suspended or debarred vendors.

Prior period adjustments or material adjustments posted during audit

Reconciliation

Frequent inter-departmental communication

Untimely reporting and Insufficient monitoring of sub-recipients

Develop a Grant Management Tracking and Compliance System

Training

Best Practice – Grant Intake FormCity of Tampa – Grant Information Sheet

Grant Title:_____________________ Granting Agency:______________________ Purpose:_______________

Contract #:_____________________ City Department:______________________ Contact:_______________

CFDA #: _____________________ Pass Through Entity:_______________& Identifying Number_________

Federal Funding: $_______________ Period of Performance: Start_________ End____________State Funding: $_______________ Local Match: $_______________ Grant Type: Cost ReimbursementCity’s Match: $_______________ Fixed FeeTotal Funding: $_______________ Unit of Service Advance

Requires Trust Fund/Interest Bearing Account? Yes No

Financial Reporting Schedule: __________________ Progress Reporting Schedule: _____________________

Financial Contact:_____________________________

General Guidelines for Documentation All documents should be self explanatory

UASI2012BRv6.doc

Budget Report

May 21 – 23, 2012

Always put the last version in the footer

Include summary or outline for further clarification

Page 1 of 15 Number pages in X of Y format

Approved By:

Deirdre Joseph_May 23, 2012_

Sign in ‘Sharpie’ or dark ink

General Guidelines for Documentation Explain Acronyms

FAMR2701 City of Tampa ** FAMIS PAYROLL INTERFACE **

EXPENSE DISTRIBUTION REPORT

Run Date: 5/23/12

Employee Name Employee POCN Period Earn Hours Rate Earning Benefits

ID Number Ending Type Charged

>>>SUBOBJECT: 01200

Joseph, Deirdre 26938 48990 06/13/11 HOL 16.00 $10.00 $160.00 $ 12.50

Joseph, Deirdre 26938 48990 06/13/11 REG 42.00 $10.00 $420.00 $ 95.50

>>>SUBOBJECT: 01212Joseph, Deirdre 26938 48990 06/13/11 ANN 22.00 $10.00 $220.00 $ 14.00

>>>SUBOBJECT: 04000Joseph, Deirdre 26938 48990 06/13/11 TPD 0.00 $55.00

ANN = Annual Leave

General Ledger Account #

HOL = Holiday Pay

Salary Calculation:

Holiday Pay $ 160.00

Holiday Benefits $ 12.50

Annual Leave $ 220.00

Annual Leave Benefits $ 14.00

Total Salary $ 406.50

(Note 1)

Note 1 = Travel cost not considered part of salary.

FAMIS – Financial Accounting System (general ledger)

General Guidelines for Documentation References should be consistent throughout

Memo

To: Chanda Brown

From: Deirdre Joseph

Date: May 23, 2012

Re: UASI 2011 (contract XXXX)

__________________________

A. Motorola Communications, Inc.

* Canceled Check (page 1)

* Invoice (page 2)

* Asset Paperwork (page 3)

* Purchasing Paperwork (pages 4 – 5)

* Grant Budget (page 6)

B. Fisher Scientific

* Canceled Check (page 6)

Division of Emergency ManagementDetail of Claims

Form 4ACategory: EquipmentGrantee: City of Tampa Agreement: XX-XXXCost Incurred During the Period of: May 21 – May 23, 2012Vendor Date Paid Check Amount

Motorola 5/5/12 345998 $88,000

Fisher Scientific 5/16/12 298488 $50,000

Total Expenditures $138,000

A

B

Reference

1. Form must be compiled from Form B by Category

2. Form must accompany Reimbursement Request

General Guidelines for Documentation Common Audit Request Grant files should be

easily accessible

Grant contract should always be referenced

Use audit checklist for folder contents

Contract XX-XX Agreement

Contract XX-XX Budget Adjustments

Contract XX-XX M&A Calculation

Contract XX-XX Sub Agreements

General Guidelines for Documentation

UASI 2012 Agreement$7,580,599

CFDA: 97.067Contract: XX-XXX

…the Management & Administrative dollar amount should not exceed 3% of total grant allocation…

Ernst & YoungCFDA: 97.067Audit Program

Matching & Earmarking and Level of Effort:

G1: Provide the earmarking calculation to show compliance with requirement.

CFDA: 97.067Contract: XX-XXGrant: UASI 2012Award: $7,580,599

M&A Calculation:Award: $7,580,599M&A%: .03%Allowable $227,418

Expended as of 5/30/12 $5,000 (Note 1)

Note 1 – GL attached

Common Audit Request - Earmarking

General Guidelines for Documentation Common Request – Project Selection Methodology

Project A Project B Project C Project A

Project B

Projects A, B, C vetted for grant inclusion Projects A & B chosen for grant inclusion

Project C

Not Chosen

•Withdrawn

•Other Funding

•Not Viable

•Not Enough Votes

General Guidelines for Documentation Common Request – Project Selection Methodology

Step 1 – Notify recipients of grant guidance via email or

letter and gather statistics (10 committees notified).

Step 2 – Give consistent guidance on documenting projects

on standard form.

Project Submission Form

•Project Title

•Contact Name/Phone Number

•Project Phase (ongoing, new)

•Category (Equipment, Training, etc)

•AEL

•Request Amount

•Description, Completion Time

•Applicable State Strategy

•Applicable National Strategy

Step 3 – Document how projects are selected

Step 4 – Project Chosen – YES or NO

If No document reason______________.

Common Request – Project Selection

General Guidelines for Documentation

Project Submission Form

Suggestions for Additional Information

• How does this project support the State approved strategic plan?

• How does this project support National priorities?

• What is the risk of not implementing this project?

• Can this project be sustained if grant funding is no longer available? If so, what contingency plan is in place?

Best Practices: Timeline (Narrative Format)Page # Date Explanation .

1 11/19/2009 Award Letter Received from State

2 12/4/2009 Resolution prepared and submitted to Doc Genda

3 12/17/2009 RESO 2009-1214 – Resolution approving Award Letter

4 12/31/2009 Agreement Received from the State

5 1/7/2010 Award Letter signed by Mayor

6 1/12/2010 Award Letter mailed to the State for signature

7 1/13/2010 Resolution prepared and submitted to Doc Genda

8 2/18/2010 Resolution for Agreement approved by City Council

9 2/23/2010 Agreement sent to the Mayor for signature

10 3/2/2010 Mayor signed Agreement

11 3/5/2010 Agreement sent to the State for signature

12 4/14/2010 Executed (signed) Agreement received from the State

Ready and Authorized to Spend Funding!

Best Practices: Timeline (Chart Format)Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 April 2010

11/19/09Award Letter

Received

12/4/09Award RESO

Approved

12/31/09Agreement

LetterReceived

From State

1/12/10Award Letter

Mailed toState

2/18/10Agreement

RESOApproved byCity Council

3/2/10AgreementSigned by

Mayor

4/14/10Agreement(executed)Receivedfrom State

Best Practices: InventoryCity of Tampa - UASI Grant Inventory

As of May 23, 2012Inventory Instructions:Please manually inspect your assets and confirm that you have the equipment listed below by comparing the asset tags. If asset is located, place an “X” in the column labeled “Inventoried”. If there is a discrepancy, write “NO” and write an explanation in the “Discrepancy/Notes” column. Documentation of any discrepancies (e.g. Asset Disposal Paperwork, Police Report of Stolen Items) must accompany this report. Upon completion, sign and date the bottom of this schedule.

■ Asset# ■ Description ■ Amount ■ Location ■ Grant ■ Inventoried ■ Discrepancy/Notes1. A1BC P25 Receiver $60,000 Pinellas UASI 10 X2. A4HI Satellite $ 4,500 Pinellas UASI 10 X3. A3FF Robot $50,000 Pinellas UASI 10 NO Item Stolen4. A2ER Raft Tools $ 2,000 Pinellas UASI 10 X5. A8KO X-Ray $17,000 Pinellas UASI 10 X

Inventory Completed By:____________________Date___________

Best Practices: InventoryGrant Asset Inventory Report – Sample Testing

Date of Review:___________________ Agency Name: ___________________ Agency Contact: __________

Please fill out the following information:

A. Has the agency disposed of any grant equipment?____ NO (go to B) YES, attach the Domestic Security Equipment Discharge Form.

B. The Number of Assets Assigned to this Agency is ______________.C. The Number of Capital Assets (>$1,000) is ______________.D. The Number of Assets inventoried during this review is _________ .

Instructions:1. Attach Inventory Listing for Agency2. Attach Agency’s last inventory that includes grant assets. 3. For each asset inventoried, review and document the following:

Does the asset contain a City of Tampa Yellow Grant Asset Tag? Compare the City of Tampa Grant Asset Tag to the Inventory listing. If different, manually correct

the Inventory Listing. Inspect the equipment (visually or through interview) to determine if asset is still usable. Ask the agency representative to give examples of how this equipment is being used?

Best Practices - Expenditure ReportingMinimum Standard Documentation

Canceled Check

Invoice

Asset Tag

Purchase Order

EHP/DHS approval (if applicable)

Additional Suggested Documentation+

Budget (directly from grant)

Allowable Equipment Cost

Quantity Cost Total Cost

IJ – Prepare & Respond Investment Justification

(for each project)

Grant Modification 1Grant Adjustment

(if applicable)