> MELISSA GLISSON: Good afternoon, everyone.
Welcome to today's talking by the rules, EDGAR and OMB
conference. Today's host will be Mr. Tim Fuchs. During
the presentation, all participant lines will be on mute.
Participants will be allowed to ask questions at several
points during the presentation. As a reminder, today's
call is being recorded.
Now without further delay, il will turn the call over to
Mr. Fuchs.
> TIM FUCHS: Thanks, Julie. Good afternoon
everybody. Tim Fuchs from the national council on
independent living. I want to welcome you back for our
final presentation. Today's presentation is going to focus
on EDGAR and OMB.
Our teleconference and webinar is presented by the
SILC-NET, a program of the IL training and technical
assistance project for CILs and SILCs. Pratted among a
partnership between IRLU, nickel and April, with sum
provided by IRSA at the U.S. department of education. Our
call is being recorded so we can archiver it and as always
we will break a few times during the presentation to answer
your questions.
Our webinar participants, I'm sure you remember, you can
ask questions in the chat box under the ee note cons and
for our teleconference participants, you can press zero one
on your phone to get in the question queue.
I'm going to give the URL for the PowerPoint and I'll
read this once this time since you all have heard it
throughout the series.
finance 2011 materials.HTML.
That is the URL sent in the confirmation e-mail where
you can get the PowerPoint presentation and the evaluation
form for today's call.
If you are participating by phone and you don't have the
PowerPoint, you're going to want to get that now.
Please do take a moment after today's call to fill out
the evaluation form. As I mentioned last time, there is a
separate evaluation for each piece of the series and we
want to know what you think.
With that, I'm going to get started for today. I want
to welcome back Melissa and Tim Glisson.
Melissa is going to take the lead today as we talk about
EDGAR and mach.
Melissa.
> MELISSA GLISSON: Great. Good afternoon. I do
welcome you all back. Tim Glisson is on the line as well.
> Hello everybody.
> MELISSA GLISSON: And he will be adding to this
presentation as well as we get to kind of the mid section,
I'll call it.
As Tim Fuchs said, this is our final session of this
webinar series. During the first session, we presented to
you an overview of the practices and principles that server
as the foundation. I call the operational tenants of a
SILC that might be categorized as having sound fiscal
management.
The second session that Tim Glisson took the lead on,
really focused on the regulatory bodies and how they fit
together, and thus how the regulations, how and why the
regulations apply to your financial management process.
Today we're going to be talking about what some of the
most often used regulations say and really talk a little
bit about how you can apply them or how to implement them.
I'm hoping this session today will help you to pull
after of the information from the first two sessions
together. Certainly that is our goal.
Again , if you are wearing both a CIL hat and SILC hat I
would ask that you kindly take off your CIL hat and really
think through the lens of your role as a SILC council
member or director or employee.
We really want to avoid any confusion given there are
clearly differences in terms of some of the funding
regulations.
With that, let's get started.
Tim, go ahead. Next slide, please.
Okay, here we have the session objective today. That is
to identify important fiscal regulations that affect the
SILCs, we're going to included include EDGAR 74-76 after
office of management and budget circulars A 110 and 22.
I want to note while all of the rules and regulations
governing how you safeguard sh spend and account for the
federal dollars you receive are important and you are
required to comb comply with them, today for the purposes
of this webinar we will only focus on the related EDGAR
parts which, again, is the education department general
administrative regulations and the OMB, office of
information and budget circulars, A 110 and 122.
We will review the parts that have the greatest impact
on the fiscal management of your federal dollars. Again,
for SILCs, these are the parts listed here on this slide,
EDGAR 74-76 and the OMB circulars A 110 and 122.
I want to emphasize and I will encourage you as well
toward the end here that to really familiarize yourself
with all of the regulations. We want to spend the bum fr
bulk of our time on these specific ones, the most widely
used ones.
Next slide.
Our intent is to help you answer these three questions
so that you are in fact practicing sound fiscal management
as required by the rehab act, section 725.
This session will server as a guide as to where you can
find the answers.
We start with three questions. Can we do that. I often
add add, the idea of can we do what? In some cases it may
be must we do that. That of course being something related
to the federal dollars you receive. Can we spend them on
this, record them this way, et cetera.
Next question, where do we look. Where in the
requirements or the regs regulations would I find this.
Lastly, why or why not. Which would, the response may
be this is an accounting issue, a SILC mission issue, may
be a legal issue.
Anything that would fit the meaning of the reason why or
why not.
Those are the three questions that we're going to
attempt to answer in terms of the regulations that you are
required to comply with.
Next slide.
A quick review the regulations and how they fit
together.
Tim Glisson did a great job last time going over these.
A quick review.
All starts with the rehab act as amended which is the
intention of the legislature, we want to get done.
The code of federal regulations, EDGAR, the e dept
education department general administrative regulations, is
OMB circular, which is the office of management and budget
circulars, then the financial act standards board, and gap,
the generally accepted accounting principle.
Any other accepted policy or guidelines of this is the
how of the intent. In other words, how do we account for,
safeguard the money that we are given to ensure that we are
fulfilling the intent of the act.
So these again are the three regulatory bodies and how
they fit together.
Next slide, please.
A quick glance again at the order of precedent. Given
that we are focusing on the how, not the what of the act in
this session, it's important to remember that EDGAR does
not supercede any requirements contained in the law.
In this case the law is the rehab act.
There's only one case, as Tim mentioned on Tuesday,
where a rule or regulation would supercede the act. That
is if there's a state law that is stricter or more limiting
than then that would take precedence.
This is truly the case in some states. So I would make
sure that as SILC fiscal person or exec on the council,
that you're aware of what the state regs are.
I'm sure in most cases that your DSU has made you aware
of them. But if there is a state law that is stricter or
more limiting then that supersedes the act.
If this is your first blurb with all of this, it may be
important to remember or helpful to remember that if a
regulation conflicts with the law, in this case the act,
the law wins.
Unless there's a state law that is stricter.
Statutes always supercede regulations.
Remember that the law is the intent and the regulations
are how we get it done. That is what we are talking about
today.
Next slide, please.
Next slide.
> TIM FUCHS: Might be your computer. It's up.
SILC funding.
> MELISSA GLISSON: Yes. Is that slide up?
> TIM FUCHS: It is on my computer.
> MELISSA GLISSON: Okay. I don't have that.
Okay. Yeah. Tim, shall I keep going?
> TIM FUCHS: I think so.
> MELISSA GLISSON: Okay.
> TIM FUCHS: If any of our participants can't see
it, you can message me. I imagine everyone else is seeing
it.
> MELISSA GLISSON: Okay.
Rehab act. Let's begin with our core funding here and
where our core funding may come from.
I want you to know these are not the only sources of
funding and we don't want to imply that you should be
limited to these resources.
We will spend a couple minutes defining each of these
funding streams. I will not get into the specifics and
details, just simply what they are.
So we have the title 7 part B, we have innovation and
expansion funding, we have social security reinvestment
funding, and we have other federal or state or private
funding.
Next slide.
Let's begin with rehab act title 7 part B, section 713.
I'm assuming for most of you this may be the majority of
your funding.
The state may use funds received under this part to
provide the resources described in section 705 relating to
the SILC.
I'm going to briefly read what the intention is here,
the five intended purposes for this funding.
First is jointly develop and sign the state plan, as
required in section 704.
Secondly, to monitor review and evaluate the
implementation of the plan.
Third, to coordinate activities with the state rehab
council established under section 105.
Fourth, to ensure that all regularly scheduled meetings
of the SILC are open to the public and sufficient advance
notice is provided.
And fifth ap lastly, to split to the commissioner such
periodic reports as the commissioner may reason reasonably
request and keep such records and afford access to them as
the commissioner finds necessary to verify such reports.
Let me just make a note here of saying that the rules
around record retention can be very confusing. This is
related to the fifth duty of the SILC, which involves
record keeping.
As EDGAR instructs us only to keep records for three
years, but the SEC instructs auditors to keep their
accounts valuable for seven years.
So I know that there was a question a week ago about how
long must we retain our records and our book keeping.
I suggested the stricter of the two be applied, which
might confuse anyone following EDGAR's instruction.
Let me clarify by saying if you are conducting annual
audits, you need to keep the record three years. But if
you are not, I'm advising you to keep them seven years, as
that is typically the general rule of thumb.
So if you have an outside auditor come in and do an
audit, you need to keep your supporting documentation, ie
records, for three years.
If you are not having that done, the general rule of
thumb is to keep them for seven years.
Next slide please.
Another source of SILC funding is what is commonly
referred to as INE or innovation and expansion funding
which is calculated in title one of the act.
This means the amount of money in this category of funds
varies by state.
Okay. Note here the state also must set aside a portion
of this money they receive for vocational rehabilitation to
fund these two activities. When innovation and expansion
funds are used to support the SILC, the purpose, how you're
going to use these monies, must be included in the resource
plan.
As we see here, innovation and expansion funds that come
out of section 101 A 18 and say innovation expansion funds
can be used for innovative ways to expand and improve VR
and secondly and most importantly for you all, is to
support the SRC and the SILC.
Next slide.
Lastly, in terms of federal dollars, which are designed
specifically for SILCs, we have SSRF, social security
reimbursement funds. These funds as section 108 states,
they can use social security reimbursement funds in support
of SILCs and IL services.
Again, I want to remind you here these funds are program
income funds for the DSU.
Social security reimbursement funds, as the name
implies, are those monies received by the DSU as
reimbursement for resources that they spend to assist
people on SSI or SSDI in getting employed.
Therefore, as program income, these funds may not be
used by the state for any purpose other than those spelled
out in titles 1, 6 or 7 of the act.
Section 108 clearly states they can be used in support
of SILCs.
A note of caution here, though, social security
reimbursement funds may not be a stable source of funding.
So to develop programs or services or activities
depending on these funds and maybe the long-term
availability of these funds, I would urge a note of caution
there.
Let's.
As always is the case, there needs to be proper source
documentation as to how these dollars were spent, the
activities, obviously, and accompanying budget, line by
line budget.
Now let's move to the regulations that apply to funding
from these sources.
Okay, the EDGAR, when we look at EDGAR under the general
administrative regulations, we have four parts.
These, for today, the most applicable parts for SILCs
are parts 74 and 75 in terms of financial management.
Later in this session today, Tim Glisson will discuss
part 82, the regulations regarding lobbying and advocacy.
Again, I want to really make a point that this is not to
suggest that you shouldn't be aware of any other
regulations that maybe apply. What we will be doing today,
I kind of call it the cliff notes review. Some explanation
and some highlights. Just enough to familiarize you.
Hopefully not too much to cause confusion.
Let's begin and look at EDGAR 74. Next slide please.
EDGAR 74 covers the majority of the general fiscal
administrative requirements that are related to grant
management.
Note here there are other documents outside of EDGAR
that contain fiscal and administrative requirements. For
example, the rehab act section 34 of the code of federal
regulation and the OMB circulars.
As we mentioned earlier too, the order of precedence is
if there's an item in the regulation that conflicts with
the language of the law, you comply with the law.
Let's just take a look here what the is contained in
EDGAR 74 under the uniform administrative requirements.
There's standards for financial management, program
income accounting, written procedures, OMB 122 compliance.
There you see how the two fit together, EDGAR and OMB,
record retention, and what some of the necessary required
filings.
You can assume that these requirements are in accordance
with GAAP, the generally accepted accounting principles,
which Tim talked in the previous session.
Now, let's take a more detailed look at some of the more
relevant mandates under the first three categories.
We're going to focus on standards for financial
management, program income, and written procedures.
Next slide, please.
Recognizing that many of you have only title 7 part B
title 1 funding, neither of which entitle you to provide
programs, I want to mention the regulations aprond program
income as it does apply to those SILCs that in fact do
receive federal funding outside of title 7 which may allow
them to earn income from programs or services.
Also this will be important to know in the event that
one day you expand to include federal funding from another
federal program and you need to understand the concept of
program income.
With that said, if you do generate program income, which
again, that is any gross income earned directly generated
by a supported activity or earned as a result of the award,
that money can only be used for these purposes.
Firstly, to further the project or the program that
generated the funds.
So it's money that you can, as we say, dump back into
the activity or the project that the contract is funding.
Or it can finance a nonfederal share of the program. Or
thirdly, it can be deducted from the total program
allowable costs in determining the net allowable costs on
which the federal share of costs is based.
So very specific uses of program income.
The other piece regarding program income is in terms of
the timing that it must be used, must be used during, you
need to use it for these three purposes during the time