Fiscal Stewardship: Overview

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Fiscal Stewardship Overview
Tom Hickey, Consultant Karen Mercer, Division of
Service Systems, HRSA, HAB For the Feb 5-7, 2008
Administrative Overview
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Goals of Session

• Responsibilities, Expectations, Requirements
• Understand fiduciary responsibility and potential
  implications.
• Understand DSS Expectations and OMB Requirements
• Eligibility Determinations
• What are the grantees responsibilities for
  eligibility determination?
• What are the subcontractors responsibilities for
  eligibility determination?
• Monitoring
• Discuss internal monitoring of grantee and
  subcontractors.
• Discuss on-site monitoring of subcontractors.
• Reimbursement
• What is third-party reimbursement?
• How is third party reimbursement accounted for?

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Fiscal Stewardship Responsibilities

• HRSA recognizes that stewardship of Ryan White
  funds is the key to assuring that, regardless of
  appropriations levels, the Department is
  utilizing Federal funds in the best way possible.
  
• As administrators of the Ryan White HIV/AIDS
  Program, HRSA and Part A and Part B grantees can
  work more effectively to ensure
• Improved planning, quality and evaluation of
  care, treatment and support services
• Consistency in how we define expectations and
  costs across Ryan White programs and
• Sound fiscal management and stewardship.

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Fiscal Stewardship Expectations

• Stewardship of grant funds
• Program and fiscal monitoring
• Adherence to Reporting Requirements

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Stewardship of Grant Funds

• Allowable, proper, authorized, reasonable and
  necessary costs
• Ensuring that funds are used for Care Act
  purposes.
• Monitoring spending patterns
• Verification of payor of last resort
• Monitoring of cost caps
• Adequate documentation
• No supplanting

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Fiduciary Responsibilities

• Who is responsible for the use of RW Part A B
  funds?
• What is required to document/justify the use of
  funds?
• What oversight is required of subcontractors?
• What is necessary to correct problems with the
  use of funds when they are identified?
• What are the consequences for not spending funds
  appropriately, or documenting how funds were
  spent?

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Fiscal Accountability Expectations

• Ability of grantees to document and account for
  all grant funds
• Assure that funds are expended according to
  federal requirements
• Initiation of corrective action when necessary
  and appropriate

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Fiscal Accountability Requirements

• Costs cost caps defined in legislation
• Aggregate administrative costs
• Allowable administrative costs
• Allowable subcontractor costs
• Grantee administrative cost caps
• Quality management program costs

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Part A Allowable Administration Funding
Allowable Administrative Costs
Part B Allowable Planning/Evaluation
Administration Costs

• Grantee Not more than 10 Administration
• Grantee Not more 10 Planning and Evaluation
• However the total allowable amount for
  Administration/Planning and Evaluation may not
  exceed 15
• Subcontractors - Total of 10 of all Subcontracts
• Quality Management No more than 5 or 3 million

• Grantee Not more than 10 - Includes Planning
  Council Expenses
• Subcontractor Total of 10 of all Subcontracts
• Quality Management No more than 5 or 3 million

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Legislative Requirements

• Payor of Last Resort
• Maintenance of Effort
• Audit Requirements
• State Match

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Payor of Last Resort Section 2605(a)(6)

• Part A funds cannot be used to pay for services
  that can be made or can reasonably be expected to
  be made by any other State or Federal benefits
  program, or
• By an entity that provides health services on a
  prepaid basis

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Maintenance of Effort Section 2605(a)(1)

• Funds received under a grant awarded will be
  utilized to supplement not supplant State/local
  funds to provide HIV-related services  
• Each EMA/TGA will maintain the level of
  HIV-related expenditures at a level that is equal
  to the level of such expenditures for the
  preceding fiscal year and
• EMAs/TGAs can not use Part A grant in maintaining
  the level of expenditures for HIV-related
  services in their areas

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Audit Requirements Ryan White Section 2675

• Pursuant to OMB Circular A-133, grantees and
  subgrantees that expend 500,000 or more federal
  funds shall have audits made by an independent
  auditor in accordance with generally accepted
  government auditing requirements covering
  financial audits
• OMB Circular A-133 Audits of States, Local
  Governments, and Nonprofit Organizations

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OMB Circulars Information Covered

• Standards for financial management systems
• Purpose of property standards
• Procurement
• Reports and records
• Termination and enforcement
• Close-out procedures

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OMB Circulars Information Covered

• Federal grant administration
• OMB Circular A-102
• Grants and Cooperative Agreements with State and
  Local Governments. (45 CFR Part 92)
• OMB Circular A-110
• Uniform Administrative Requirements for Grants
  and Other Agreements with Institutions of Higher
  Education, Hospitals, and Other Non-Profit
  Organizations. (45 CFR Part 74)

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OMB Circulars Information Covered

• Establishing Cost Principles and Standards
• OMB Circular A-122
• Cost Principles for Nonprofit Organizations
• OMB Circular A-87
• Cost Principles for State, Local and Indian
  Tribal Governments
• OMB Circular A-21
• Cost Principles for Educational Institutions

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OMB Circulars For More Information

• Office of Federal Financial Management, Office of
  Management and Budget
• www.whitehouse.gov/omb/circulars

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State Match Section 2617(d)1(E)

• 1 for each 2 of Federal funds
• May be Cash
• May be In-kind
• May not include any Federal funds

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DSS Expectations

• Program and fiscal monitoring are grantee
  responsibilities under Part A Part B
• Establish sound and effective business management
  systems
• Meet minimum requirements as detailed in
• OMB Circular A-102
• OMB Circular A-110

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DSS Expectations (continued)

• Grantees are responsible for providing
  subgrantees with clarification on allowable
  activities
• Grantees are expected to be well versed on
• The relevant OMB Circulars
• The Grants Policy Statement
• Ryan White HIV Treatment Modernization Act
• HAB Policies

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DSS Expectations (continued)

• Administrative policies and procedures manuals
  outlining covered services are expected to exist
• All grantees expending more than 500,000 in
  Federal funding in a year must have a fiscal
  audit performed by a certified auditing firm
• Part A should be included in the auditors
  sampling at least once every 3 years

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Improper Payments

• Review of Part A grantees fiscal operations and
  financial documents
• Inadequate fiscal monitoring (40 or 6 of 15)
• Unallowable costs (47 or 7 of 15)
• Unsupported costs (60 or 9 of 15)

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Improper PaymentsOIG Concerns

• What does this mean for Part A Programs?
• Improper payments are
• Unallowable services received by eligible clients
  (services not allowed by Ryan White legislation
  or HAB Policies)
• Allowable services received by ineligible clients
  (clients that are not low-income or who are not
  HIV-positive)

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Improper Payments OIG Recommendations

• Work with HRSA to determine actual costs (27 or
  4 of 15)
• Develop cost controls accounting systems to
  accurately, track, allocate and report costs (80
  or 12 of 15)
• Refund money to HRSA ranging from 5,367 to
  352,094 (80 or 12 of 15)

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DSS Goals for Fiscal Accountability/Monitoring

• To assure that each grantee has in place an
  effective fiscal management system to manage and
  account for all grant funds, including funds
  awarded to contract providers
• To assure that each grantee has an effective
  fiscal management system in place to monitor
  contractor expenditures, unit costs, allowable
  costs, and all other fiscal requirements

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Major Fiscal Accountability Monitoring Objectives

• Ensure each assigned grantee clearly documents
  its system for monitoring contractor compliance
  with fiscal requirements including fiscal
  reporting requirements, on-site fiscal monitoring
  reviews, audit requirements, and corrective
  action procedures
• Understand each assigned grantees fiscal
  monitoring procedures, including fiscal reporting
  requirements, auditing requirements, and
  corrective action procedures for contractors

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Implications for Poor Eligibility Verification

• Site Visit
• Audit
• OIG Audit
• Recoups, interest and penalties

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Implications of Improper Payments or Use of Funds

• Site Visit
• Audit
• OIG Audit
• Recoups, interest and penalties
• Same for Subcontractors

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Grantee Use of Ryan White Part A and B Funds

• What is allowable?
• Allowable Personnel
• Allowable Overhead
• Allowable Other Costs Supplies/Travel/Equipment

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Subcontractor Use of Part A and B Funds

• Subcontractors are required to meet the same
  standards that the grantee is required to meet.
• Trust but verify.

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Internal Subcontractor Monitoring Invoices

• Invoices - How much is enough documentation to
  pay an invoice?
• Primary Source Documentation
• Verification of Personnel and Hours
• Process to review documentation and pay invoices

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Internal Subcontractor Monitoring Subcontractor
Files

• Narrative Reports Must be read
• Issues must be responded to. Have not hired a CM
  - Then should not be billing for a CM
• A-133 Audits
• Correspondence

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Site Visit Subcontractor Monitoring

• Real Site Visits Not Meet and Greet Reviews
• Primary source verification
• Payroll timecards
• Allocation of expenses between funding sources
• Supplies and other expenses.
• Policies and Procedures

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Site Visit Subcontractor Monitoring Eligibility

• Documentation of HIV Status
• Payor of last resort
• Screening of clients for third party resources
• Use of Electronic Screening
• Bill all third-party revenue payors.
• Tracking third party payments

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Monitoring Activities of Project Officers

• Assess and understand each assigned grantees
  fiscal and programmatic monitoring systems by
  review of application and progress reports
• Discuss fiscal and programmatic monitoring
  systems with grantees during monitoring calls
• Discuss contractor compliance issues with
  grantees during monitoring calls ask about any
  contractor fiscal issues that may appear in the
  media
• Review fiscal and programmatic monitoring
  procedures during site visits
• Discuss how allowable costs are assured
• Discuss corrective action procedures for
  disallowed costs