12/6/2016 Overview of Financial & Administrative Review Agenda - PDF document

12/6/2016 Overview of Financial & Administrative Review Agenda U.S. Department of Housing and Urban • Who is Booth Management Consulting? • Development What is an Agreed-Upon Procedures Engagement? • Office of Housing Counseling Overview of the Financial & Administrative Review Process:  Phase I: Planning Overview of Financial & Administrative Reviews  Phase II: On-Site Visit December 6, 2016  Phase III: Reporting  Phase IV: Technical Assistance 2:00 PM EST • Common Findings • Lessons Learned • Facilitated by Frequently Asked Questions? Booth Management Consulting, LLC • Questions? 7230 Lee Deforest Drive, Suite 202, Columbia, MD 21046 2 Who Is Booth Management Consulting? • An SBA Certified Minority and Women owned accounting firm located in Columbia, MD • Founded in 1997 Who Is Booth Management Consulting? • Lead by Principal, Robin L. Booth, CPA with a staff consisting of CPAs, accountants, auditors, and financial analysts • Approximately 25 years of experience performing compliance auditing of non-profit organizations; local, state, and federal government entities 4 Key Team Members • Project Manager – Robin L. Booth, CPA • Alternate Project Manager – Richard Yirenkyi • Financial and Administrative Reviews: What is an Agreed-Upon  Auditors • Wilfredo Corps, CFGM Procedures Engagement? • Petergay Bryan • Delbert Strawther 5 1

12/6/2016 What is an Agreed-Upon Procedures Engagement? The Financial & Administrative Review is an agreed- upon procedure engagement with: • Specific tests and procedures agreed to between HUD and BMC • Different types of agreed-upon procedures including assessing compliance with agreements and regulations • Reports on results of procedures • Procedures that are not an audit • No opinion provided 7 Overview of Financial & Administrative (FA) Review TIME PERIOD PHASE TITLE Within 30 days of the review Phase I Planning On-Site Visit Phase II 1-2 business days Phase I: Planning Phase III Reporting Up to 2 weeks after the site visit Phase IV Technical 30-60 days after the report issued Assistance 9 Phase I: Planning Phase I: Planning Before the site visit, we will: STEP 5 • Communicate with the HUD Specialist and Parent STEP 6 STEP 1 Pre-site visit planning call Send confirmation letter Initial notification (if applicable) to obtain: with the grantee and HUD letter from HUD POC to schedule an on-site review date, coordinate on-  LOCCs vouchers and requests for payment site interviews, and confirm the location of records  Grant agreement and Form 1044 STEP 7  Award letter STEP 2A STEP 4 Send a sample Initial Notification HUD sends invite to selection three to five Letter and Document  Leveraged funds days prior to a participate in training prior Request from BMC to confirmed on-site visit to the FA Review Grantee  Final approved budget and amendments  Concerns about agency STEP 2B STEP 3 STEP 8 Receive documents from  Performance reviews Contact the grantee to Prepare Preliminary Grantee the grantee confirm readiness three Evaluation days before the on-site visit 12 11 2

12/6/2016 Phase I: Planning Phase I: Planning Policies and Procedures Content Policies and Procedures Content Cash Disbursements Cash Receipts • Assess the ability to: open bank statements, review • Assess the ability to: open bank statements, issue a purchase invoice/billing documents, receive payments/open mail, order, authorize a purchase order, issue a check, initiate an electronic funds transfer, sign checks, access a mechanical review reconciliation to the general ledger, and approve credit signature plate, and review bank statements/bank memos or write-offs reconciliations • Record the ability to: prepare invoice/billing documents, • Record the ability to: record account payable, record cash prepare credit memos, post to the general ledger, change disbursements to the general ledger, record cash transfers to the general ledger, change on-line information for accounts online information for billing or credit memos, change a payable entries, check payment and electronic funds transfer, master file for billing or credit memos, prepare a listing of change master files for electronic funds transfer, and make cash receipts, and post to the accounts receivable ledger journal entries • Monitor the ability to: perform bank reconciliations, • Monitor the ability to: perform bank reconciliations, reconcile reconcile accounts receivable to the general ledger, and accounts payable to the general ledger, and approve budgets approve budgets 13 14 Phase I: Planning Phase I: Planning Policies and Procedures Content Policies and Procedures Content Time and Attendance Sub-Grantee Monitoring • Signed by employee and supervisor • Sub-grantee interviews • Based on the after-the-fact determination of hours worked • Risk assessments for the Sub-grantees • Prepared by individual timecards/timesheets • Penalties for falsifying, altering or tampering with timesheets • Policy and procedure testing • Hours work are accurate • Spot audits on files, financial information, and • Procedure for correcting timecards/timesheets system data • Procedure for approving timecards/timesheets • Confirmations • Procedures for preparing the Personnel Activity Reports (PARs) or processes to ensure that necessary adjustments are made so that the final amounts charged to the award are accurate, allowable, and properly allocated 15 16 Phase I: Planning Phase I: Planning Policies and Procedures Content Procurement Process Three to five working days before site visit: • Procurement strategies and administrative 1. Send the sampled transactions identifying the type of supporting requirements documentation needed • Employees’ authorization level to initiate/execute 2. Request clarification of any issues/questions in the grantee evaluation purchases 3. Provide a list of individuals to be interviewed on-site and a • Contract requirement proposed date and time • Vendor requirement • Receipt and verification of goods and services • Payment process and approval 17 19 3

12/6/2016 Phase II: On-Site Visit STEP 14 STEP 15a STEP 9 Conduct an entrance Meet with Grantee and If findings, conduct exit conference and allow conference and provide an open item discuss preliminary ten (10) days for list with a due date of 10 observations additional information working days Phase II: On-Site Visit STEP 10 STEP 15b STEP 13 Prepare Sub-Grantee If No findings, conduct Discuss potential confirmation list for Exit Conference signature and confirm findings with Grantees mailing STEP 11 STEP 12 Review the Grantee Conduct substantive Evaluation, interview testing/ test of controls key personnel, review sample selection 21 Phase II: On-Site Visit Phase II: On-Site Visit Entrance Conference Procedures Performed Agenda Administrative Structure • Introductions • Review previously submitted flow charts, • Scope of Work policies and procedures, and organizational structure • Timing of Work/Reporting • Review individual roles and responsibilities • Communication of Findings • Interview individuals to confirm narratives, • Other Matters roles, and responsibilities 22 23 Phase II: On-Site Visit Phase II: On-Site Visit Procedures Performed Procedures Performed Typical Interview Questions : Sub-Grantee Monitoring 1. What is your role and what are your responsibilities as they relate to compliance and oversight of funding from HUD? 1. Verify the status of Sub-Grantees confirmations 2. Do you understand your agency’s code of conduct? 2. Review at least one Sub-Grantee file for compliance with 3. Did you receive training on your agency’s compliance the documented monitoring policies policies and procedures related to compliance and 3. For any positive confirmation letters to Sub-Grantees oversight of funding from HUD? received, review any discrepancies with the grantee 4. What are the compliance and/or ethics related challenges 4. Interview a sample of sub-grantees you face in your current role? 5. Can you report concerns, issues, or potential violations of laws, regulations, code of conduct, or compliance policies anonymously or confidentially without fear of retaliation? 6. Do you receive refresher training on your company code of conduct, compliance, or ethics policies? 24 25 4