Financial Management Workshop for CILs…Regulations and Beyond
IL-NET presentation on May 25-27, 2016
Module 10: Documentation of Expenditures

JOHN HEVERON: Okay.

This next section we're going to be talking about documentation for expenses.

I'm going to give you an overview.

Some of this really repeats information in our internal control section.

Some of it we've talked about at length, maybe even ad nauseam, because it is about documentation for allocating payroll.

I'll go through that quite briefly.

Maria is going to share some of the forms she uses in her agency to do this documentation.

The page is number 101.

Actually, let's go right to 102.

So just some general procedures for disbursements.

After checks are prepared they should be submitted to the check signer with original invoices.

There was a question that came up that said, if my board member is signing the check, co-signing the check, is that adequate?

Well, if they get the original invoice, the documentation, then it would qualify as a review.

Invoices should be canceled by marking them paid.

So they don't get double paid.

Checks should be sent out without being returned to the check preparer.

That's just the good internal control thing.

The check preparer could prepare a check for something that's not really valid.

But if they get the check back and then can redirect it, that can become a problem.

So you don't want to do that.

Sometimes very small agency, that's not an option.

Documentation for all credit card charges and for all employee expense reimbursements should be reviewed by an independent person.

We've already discussed that.

It needs to be reviewed by a supervisor, in the case of the Executive Director by a board member.

Access to blank checks should be limited to check preparers.

For payroll, we've certainly said this, there should be documentation for time worked and what was worked on.

And someone other than the person entering payroll, whether you do it electronically or call it in, or process it internally, but somebody other than that person should look at the payroll as soon as it's completed to make sure that hours and rates are okay.

Some expenses won't have invoice support.

Employee travel for training as an example.

Rent.

I don't know whether people really prepare check requests for rent but there are documents, like check request forms that can be prepared to document items that won't have an invoice.

If travel is reimbursed frequently the check request should have a place space for date, purpose and distance traveled, Maria is going to talk about that.

Check requests should be signed by the requester and by a supervisor or other independent person.

So let me turn it over to Maria now to give you some real life examples of how her agency does this.

MARIA STEPANYAN: So I have some forms in the packet.

Some are samples, like the P & L and anything that has actual numbers.

They're just numbers out of nowhere for sample purposes.

But the forms and the policies themselves are the forms that they're using.

For the travel expenses that was mentioned, we have a travel policy, and it includes travel locally and outside of town.

Because for the local travel expenses, we reimburse only for mileage, and so in a packet, there should be a mileage reimbursement form, and it just tells pretty clearly the date and start point and the destination, purpose of travel, and whether it's round trip or not, and the miles.

And then the formula calculates based on the mileage rate, the total that we should reimburse the employee.

With the mileage form, the employees are required to submit MapQuest printout, or Google Map printout where it shows from one destination to another to show how they came up with the miles that they're submitting.

For travels outside of town that required lodging and food, we have a form that just wraps up the estimated expense for travel.

So it is estimated for hotel, food, registration, car rental, anything that would be used.

This form is used to get an authorization from the supervisor and the Executive Director in our company to go to this training.

If it's a training or conference, whatever travel it is, just to have idea of how much it will cost to send this employee to this or that training.

So that's not the reimbursement request form.

It's just a form to show to estimate how much it will cost us.

Once this is approved, then the employee would complete the other form that is showing the breakfast, lunch, dinner, incidentals and those are per diem, and any other expenses that employee would have such as for taxi or something else that they needed, a car rental, or anything that was purchased while the employee was away.

Then they would receive a receipt and bring the receipt and submit with a purchase request.

The purchase request form is not here, but it's a regular purchase request that says who to reimburse it to and for what and they attach the receipt to that request.

And that purchase request form is what we use, agency wide, for any requests that are reimbursable.

The other forms that are in the packet are, there's a form that is, it lists the positions and then lists the grants that we have across, and it has some percentages, so this is what I use in the beginning of the year for budgeting purposes and put down percentages that we think will be worked by each employee towards each grant that we have.

And this also reconciles with the time cards.

Of course, those can change because as we know, the time should be the actual, but most of it stays more or less consistent or at least we know which employee is working on which grant.

That helps us figure out which employees are working on specific grants and that reconciles with their time cards.

Our time card includes the part, it's one document that we use, and so this is helpful to me to reconcile with time card, to make sure that the person has those grants listed on their time card in PAR section.

One of the other documents is the invoice sample.

And I would what I like about this invoice sample is that it shows the budget for the grant, and each months we have the actual expenses toward that grant per line item of the budget, and the cumulatives, which are calculated based on the formulas in the Excel spreadsheet.

So our each of our grants have their Excel spreadsheet with tabs for each month.

So if I went to March tab, it would and looked at the cumulative, I would know in March how much is spent from this grant and how much is left per line item of the grant budget.

So those are the forms that are included.

As far as how we incorporate all that John talked about, we just follow what is told here.

We do we do requests every we do require that every request for reimbursement have receipt, some kind of a document to show what it was spent on.

For rents, we usually have the contract that shows the period and the amount on monthly basis and we do actually get invoice from our landlord for the rent.

I don't remember some other ones.

For the checks to be cut, our accounts payable person collects all the invoices, takes them to our accounting administrator, who codes them based on codes in the budget and verifies those invoices are accurate and they should be paid.

And then the accounting, the accounts payables cuts the checks and while cutting the checks and entering invoices, we do have a stamp that says entered and so she stamps each invoice that's entered.

And then after that, after the check is cut, the accounts payables person attaches the invoices and requests and any supporting documentation that's needed for that check.

She attaches that to the check, and all those checks come to me for signature, or to our Executive Director.

So we don't sign a check that is not presented with a backup documentation.

And that's how we avoid having any payments without documentation.

Let's see.

What else was I don't remember what else was in that presentation.

But yeah.

Here we are.

Credit cards.

We definitely have credit cards that the credit card that's on the name of our Executive Director does get reviewed by our board treasurer or board president who puts a signature on it and we file it.

So at any given time, if the auditor asks, we do have that transaction report attached to the credit card statement with a signature from a board member.

And it's mostly board treasurer or the board president.

My credit card gets expenses gets reviewed and signed by the Executive Director.

Our financial policy that we are working on, should be approved today, hopefully, says that no expenses, it says that every single reimbursement to the Executive Director should be reviewed and authorized by a board member, and every payment to myself as the director of operations should be reviewed and approved by the Executive Director.

So even though I do have signing authority, I cannot and I can't sign my check.

It has to have some kind of signature somewhere showing this was presented to the Executive Director and the Executive Director is aware that this reimbursement was made to me and the same for him, it has to be approved and some signature must show that the board has reviewed and authorized this reimbursement to the Executive Director.

The blank checks are in a locked place in the office of the accounts payables.

And most of our stuff is all the checks and the petty cash, they're all in the accounts payables office in locked box, and that office key is actually not a key accessible to the rest of the agency, just to the Accounting Department.

That's all I have.

JOHN HEVERON: Thanks, Maria.

I wouldn't want to be the federal reviewer who didn't approve your indirect cost rate policy and I wouldn't want to be a federal auditor that audited your agency.

You're very conscientious.

Your documentation is great, exemplary, and I think they'd walk away with an education, but nothing else.