2018-9-26 Federal Funding

1. Federal Funded Grants &
Awards…what systems do I need ?
Helping Great Organizations Thrive
www.raffa.com P: 202.822.5000 F: 202.822.0669
PRESENTERS:
Glenn Anstead, CPA - Raffa
Buu-Linh Tran – Raffa
Seth Zarny - Raffa
SEPTEMBER 26, 2018

2. Page 1
FEDERALLY FUNDED GRANTS & AWARDS
Session Objectives:
• Overview of history, and current environment
of doing business with Federal government
• How can your systems support compliance
and sustainability
• Are your current systems adequate
• Steps to create a culture of compliance and
sustainability in the federally funded
marketplace

3. Page 2
RAFFA OVERVIEW
 LARGE ACCOUNTING, PROFESSIONAL
SERVICES & TECHNOLOGY CONSULTING
FIRM
• Serve hundreds of clients in DC/MD/VA
• 240+ specialists on staff at all levels
• Support over 230 Financial System Clients
• Certified System Consultants, Certified Project
Management Professionals, Business Process
Consultants
 32+ YEARS IN BUSINESS
 17 PARTNERS, INCLUDING 11 WOMEN PARTNERS
 WOMEN-OWNED FIRM
 MULTI-CULTURAL WITH DIVERSITY AT ALL LEVELS
 PRIMEGLOBAL ALLIANCE MEMBER
Raffa is nationally recognized with access to all the resources of the largest
international firms. We contribute to our clients’ abilities to achieve their
missions and deliver promises to the world.
 WIDE RANGE OF SERVICES
• Technology Solutions
• ERP & Accounting Systems
• Software Development
• Managed IT Services
• Audit and Tax
• Managed Accounting
• HR Consulting
• Business Advisory
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• Search and Transition Services
 NATIONALLY RECOGNIZED
• Top 100 Largest Accounting Firms
• Top 100 ERP VAR (Bob Scott & Accounting Today)
• Top 100 and Fastest Growing Value Added Reseller

4. Page 3
FEDERALLY FUNDED GRANTS AND AWARDS
Agenda:
1. Introductions
2. The landscape working with the Federal Government
has changed
3. System compliance
4. Foreign operation requirements
5. What do I need in an accounting system?
6. How do I know when its time to replace my legacy
system?
7. Q & A

5. Page 4
Part 1:
Introductions

6. Page 5
Introductions
Who is in the room?
• Your name, organization, and role
• Familiarity with Federal grants &
awards
• Current accounting system
• What do you hope to take away
from today’s seminar?

7. Page 6
Part 2:
Working with the Federal
Government

8. Page 7
What You Don’t Know, Can Hurt You
Prior to 2011, Federal funding was a
predictable source of revenue for not-for-
profits.
Audit findings were addressed with a
corrective action plan; auditors concurred
and funding was approved for another
year.
Not-for-profits had little to no competition
in securing cooperative agreements and
grants.
Then, the DCAA got into trouble with the
OMB….

9. Page 8
What You Don’t Know, Can Hurt You
…and then…all Hell broke loose. It was a
lousy time to be an NGO

10. Page 9
Wait, what happened?
The DCAA’s problems began a ripple effect
Other agencies began to clamp down on indirect costs and
compliance
In 2014, the number of organizations debarred by USAID alone
doubled, compared with 2013
By 2015, one of the largest recipients of USAID funding was
suspended and temporarily ineligible for federal funding (IRD)
This required non-profits to become compliant…QUICKLY!
Remember, compliance starts at the top!

11. Page 10
How to Minimize Risk ?
Start at the top…
 The tone at the top is the best indicator of risk. The
C-suite that follows procedures, submits timely
documents, and makes reasonable expenditures
serves as an example to all staff and volunteers

12. Page 11
Part 3:
Systems Compliance

13. Page 12
Will any system support my NGO operations?
THERE IS NO “SILVER BULLET.”
• There is no solution certified by any agency or
organization that will guarantee compliance with DCAA,
FAR, Uniform Guidance, and regulatory audits.
• You must invest in the proper processes, financial
systems, and reporting tools to help achieve and
maintain compliance
For these reasons, organizations are increasingly turning away from basic accounting
software applications, and instead require broader and more fully integrated systems
that are designed for the federally funded space.
Yes and No…

14. Page 13
Where does the requirement come from?
Who is subject to a Pre-Award?
How long does it take to prepare?
Why is it important?
The Pre-Award Survey (SF 1408)
Map the pre-award requirements to your accounting
system.

15. Page 14
Pre-Award Accounting System Review
Contractually required; may be stated as a prerequisite in a solicitation.
SF 1408 with criteria may apply to Cost-type, T&M, or Fixed-Price grant
agreements (2 CFR 200 – Subpart C)
Might not apply to a T&M or FFP (depends on the cognizant agency)
Risks:
• Adequate accounting system is a basic qualification
• Audit Agency criteria is highly subjective with almost no margin for
error
– a single deficiency = inadequate system;
– inadequate system = no grants or awards
• Contracting officers generally defer to DCAA’s opinion.

16. Page 15
What is the “Accounting System”?
• “System” includes:
o Software and updates
o Software security
o System documentation
o Internal controls over access, storage, data integrity
o Employee/user instructions
o Adequately trained users
o Active program of self monitoring
o Written polices & procedures that match system

17. Page 16
How are Requirements Satisfied?
• Capability native to the software
• Use parallel, integrated software
• Data extracted, manipulated, and imported back
• Data extracted and auxiliary records used
• Manual records from source documents (think Excel)
• Requirement not addressed – wait for auditors to ask
(In order of simple & safe…to cumbersome & risky.)

18. Page 17
Assessing Accounting Systems
What Sub-Systems might be Affected?
• Impact of Uniform Guidance on your awards is
widespread…
o Timekeeping / Payroll
o Indirect Rates
o HR and labor categories
o Labor distribution of hours and costs
o Job Cost Ledger
o Employee expense reports
o Vendor social-economic categories
o Contract invoicing
o Fixed Asset (F/A) register

19. Page 18
Assessing Accounting Systems
What are the Requirements?
• Uniform Guidance requirements vary widely by:
o Award/Contract type (CR, CPFF, FFP, T&M)
o Award/Contract structure (ACRN, CLIN, subCLIN)
o Agency-specific clauses Award/Contract-specific, non-
standard provisions or clauses
• Ensure your firm understands Uniform Guidance.
• If you are a subcontractor on a contract subject to FAR,
ensure you are familiar with FAR 31.7 and FAR
supplement clauses for impacts on Non-Profits.

20. Page 19
Assessing Accounting Systems
Timekeeping Requirements - Example
• Paper or Electronic?
• Total time vs. proportional time reporting
• Do you restrict employees to 40 hour / week – DON’T!
• Requirements can vary widely by:
o Award/Contract type (CPFF, FFP, T&M)
o Award/Contract structure (CLIN, subCLIN)
o Agency-specific clauses
o Award/Contract-specific, non-standard clauses
• Employee instructions

21. Page 20
Assessing Accounting Systems
Job Cost Ledger – Cost Reimbursement
• Record direct costs by contract/task/subtask
• Work Breakdown Structure (WBS) - rolls up data
• Direct costs by cost element (DL, consultants, travel,
subs, ODCs, etc.)
• Each cost element has own requirements
o Direct labor hours and dollars by person
o Direct cost by sub-element needed? (e.g. airfare,
lodging, M&IE, etc.)
• Apply indirect rates at: actual, ceiling, provisional, final
• Job cost ledger integrated with GL
• Billing and revenue recognition – compliance with ASC 606

22. Page 21
Assessing Accounting Systems
Indirect Rates
• Rate structure (pools & bases) tailored to each firm
• Compute actual indirect rates monthly
• Recomputed each month on YTD basis
• Applied retroactively for completed years

23. Page 22
Assessing Accounting Systems
Subcontracting & Reporting
• Designate vendors by social-economic categories
• Quarterly report actual costs by category
Sub-Awards
• Track first $25,000 of each sub-award (MTDC)
Participant Support Costs
In-Kind Contributions

24. Page 23
Part 4:
Requirements for Foreign
Operation

25. Page 24
Requirements for Foreign Operations
• Supporting documentation
• Multi-Currency
• Remote Access & Timecards
• Statutory Reporting
• Grant & Award reporting
• Security
• Global consolidation

26. Page 25
Part 5:
What do I need in an
accounting system?

27. Page 26
Assessing Accounting Systems
What should you expect from an Accounting
System designed for NGO’s…
• Integrated Systems
• Dashboards
• Real-Time access from Anywhere
• Multi-Currency
• Scalable
• Overcome Agency and DCAA Audits
• Easy to Use
• Service

28. Page 27
Dashboards – Information Finds the user

29. Page 28
Dashboards – Interactive & Self Service

30. Page 29
Dashboards – Interactive & Self Service

31. Page 30
Dashboards – Interactive & Self Service

32. Page 31
Part 6:
How do you know when it’s time to
replace your legacy system?
Let’s discuss some key indicators…

33. Helping Great Organizations Thrive
Glenn Anstead, CPA
Raffa
ganstead@raffa.com
301.279.6503
Buu-Linh Tran
Raffa
btran@raffa.com
Jeremy Taro
Raffa
jtaro@raffa.com
301.279.6504
Questions & Answers
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