2005 SITE REVIEW REPORT DETAIL

Center Name:
Review Date:
Center Director:
Host Institution:
Review By:
FINANCIAL REVIEW

Objective: To obtain an understanding of the internal controls used by the center and its host, to ensure the accuracy of reported financial and management information, and assess whether costs incurred and claimed for reimbursement were reasonable, allowable, and allocable.

Financial Review Overview

The financial review consisted of cursory review of submitted regional center reports and financial detail, and Q&A with the center director and budget officer for the center. Questions were asked to gain an understanding of the internal controls of the center and host institution to ensure the safeguarding of federal and state funding and to ensure proper authorization of those funds. The financial review also consisted of a sampling of transactions, which were chosen from year-end financial transaction reports submitted with the year-end cost share report (i.e. final reimbursement invoice). The reviewer’s findings and notes relating to this portion of the review are included below.

QUESTIONS AND FINDINGS

CURSORY REVIEW – PERFORMED BY STATE OFFICE

1)  Reviewed final cost share report to determine if year-end federal, state and grantee match (i.e. cash, in-kind and indirect) are supported by ledger and journal detail.

Tasks Completed:
√ / Yes
No
Reviewers Comments:
Support detail was sufficient to support final invoice balances.

2)  Scan general ledgers and general journals for transactions that appear questionable, improper or extraordinary in nature for sample selection. In lack of such transactions, randomly select samples for review. Provide a copy of samples selected, including a detailed transaction description to the center director and center budget officer for compilation of support documentation. Attach a copy of sample selections to review work papers.

Tasks Completed:
√ / Yes
No

3)  Record and compare actual expenditure detail to detailed budget and budget justification provided in proposal. Note discrepancies and prepare discussion notes for on-site visit.

Tasks Completed:
√ / Yes
No
Reviewers Comments:
Actual expenditures were within budgeted parameters.

4)  Review financial findings from previous financial review and list below.

FINDINGS
# / Description
0 / No financial findings from previous review.


SELF-ASSESSMENT FINANCIAL REVIEW – COMPLETED BY REGIONAL CENTER

SELF-ASSESSMENT COMPLETED BY CENTER DIRECTOR:

INTERNAL CONTROLS

1)  Describe the degree of autonomy the SBDC regional director has within the host organization to allocate/expend committed program resources to accomplish contractual milestones and further the objectives of the program.

Director’s Comments:

2)  Describe who, besides the regional director, is authorized to expend SBDC program award or match funds. List the name, title and organization of all individuals, and describe what level of authority they have and if prior approval of the SBDC regional director is required.

Director’s Comments:

3)  Describe, if applicable, hosts or SBDC policies covering approval authority for program financial transactions. Do the policies include guidelines for controlling expenditures such as purchasing requirements, voucher payments and travel authorizations?

Director’s Comments:

4)  Describe the general processes and procedures required to expend SBDC program funds. Describe how and who prepares requisitions/purchase orders, reviews and handles payment of invoices and vouchers for payment, and processes and signs checks for payment. Describe if there is a policy regarding business purchases made with cash and credit cards from personal accounts.

Director’s Comments:

5)  Describe the accounting system used to manage SBDC program funds. Describe any financial statements or reports that are prepared and distributed to the regional director for review. Provide a copy of a chart of accounts for the center.

Director’s Comments:

1

ON-SITE FINANCIAL REVIEW – COMPLETED BY STATE OFFICE

1)  What financial findings were discovered during the last financial review?

a.  How were those findings addressed?

b.  What corrective action was taken?

c.  Describe in detail what new procedures or internal controls were instituted.

d.  List any unresolved issues and recommended actions.

FINDINGS
# / Description
Evaluation:
Pass / Demonstrates control / compliance
Fail / Condition

Reviewer’s Comments:

2)  Determine whether cost share reports (i.e. invoices) followed state invoicing policy guidelines.

a.  How often were invoices submitted for reimbursement?

b.  If less frequently than quarterly, what was the reason?

c.  Did the center utilize the state prepared invoice form worksheets?

d.  Who prepared invoices for submission?

e.  How were invoices prepared, i.e. what support was used to prepare periodic invoices?

f.  Who reviewed invoices before submission for reimbursement?

g.  Were invoices prepared correctly?

Evaluation:
Pass / Demonstrates control / compliance
Fail / Condition

Reviewer’s Comments:

3)  Determine whether cash match committed was allowable and met the special terms and conditions of the grant contract.

a.  Discuss the sources of cash match and determine if they were from allowable non-federal sources.

b.  Verify cash match contributions.

c.  If applicable, review bank statements or electronic fund transfer (EFT) reports for proof of receipt and deposit of grant funds.

Evaluation:
Pass / Demonstrates control / compliance
Fail / Condition

Reviewer’s Comments:

4)  Determine who is authorized to accrue expenditures on behalf of the center.

a.  How many individuals have authority to authorize SBDC expenditures?

b.  Who are they?

c.  What level of authority do they have?

d.  Do they require the prior approval of the center director?

Evaluation:
Pass / Demonstrates control / compliance
Fail / Condition

Reviewer’s Comments:

5)  Describe how expenditure requests, invoices, and vouchers for payment are processed.

a.  Who processes purchase orders/requisitions for the center?

b.  How are inter-agency transfers (i.e. charge backs) determined and processed?

c.  Who is responsible for the cash purchase of goods for the center?

d.  Who is responsible for the receipt of ordered merchandise?

e.  Who receives invoices for goods ordered by the center?

f.  Who reviews invoices/vouchers before payment?

g.  Are all payments to external entities made by check?

h.  Do invoices/vouchers require the signature of the center director? If not, who is required to sign them?

i.  Is there a clear separation of responsibilities?

Evaluation:
Pass / Demonstrates control and separation of duties
Fail / Condition

Reviewer’s Comments:

6)  Describe the budget management of the center.

a.  Are periodic financial management reports prepared?

b.  Which reports are they?

c.  How often are they provided to the center director? Reviewed by the center director?

d.  How are discrepancies in the reports handled?

Evaluation:
Pass / Demonstrates control
Fail / Condition

Reviewer’s Comments:

7)  Describe year-end allocation procedures.

a.  How are year-end cut-off procedures completed?

b.  Who performs / reviews these procedures?

c.  Are new account / cost center numbers assigned each program year?

d.  How are discrepancies resolved?

Evaluation:
Pass / Demonstrates control
Fail / Condition

Reviewer’s Comments:

8)  Describe any services provided to clients that require a fee being charged.

a.  If any, what services are provided to counseling clients for a fee?

b.  How are the fees determined?

c.  How were the revenues accounted for?

d.  Review appropriate program income items for comparison.

Evaluation:
Pass / Demonstrates control / does not apply
Fail / Condition

Reviewer’s Comments:

9)  Review sample financial data. Report findings below.

a.  Personnel

i.  Is the employee full-time?

ii. If no, what percentage of their effort allocated towards the SBDC.

iii.  What other programs does the employee allocate time.

iv.  Does the timesheet / time and effort report support employees effort?

b.  Fringe Benefits

i.  Is there a written policy for fringe benefits?

ii. What are they?

c.  Travel

i.  Are travel costs attributed to the employees’ effort on behalf of the SBDC?

ii. Are the costs attributed to out-of-state travel? If yes, what was the purpose of the travel?

iii.  Was the travel approved in the proposal or through prior approval?

d.  Equipment

i.  Does the equipment purchased meet the definition of equipment (i.e. tangible property greater than $500 in value per single item).

ii. Was the equipment approved in the proposal or through prior approval?

iii.  Was the equipment detail recorded in the Equipment Inventory Record and provided to the lead center.

e.  Supplies

i.  Are the supplies reasonable, allowable, and allocable to the center?

ii. Is the expenditure appropriately categorized?

f.  Contractual, and

g.  Consultants

i.  Is the organization/consultant included in the regional proposal budget?

ii. If no, how was the organization/consultant selected?

iii.  Does a contract between the center and organization/consultant exist?

iv.  Was the contract executed prior to delivery of service?

v. Does the contract contain the necessary terms described in the grant agreement?

vi.  Do the counseling hours delivered agree in terms (i.e. hours and rate) to budget and counseling report detail?

h.  Other Direct

i.  Are expenditures reasonable, allowable, and allocable to the center?

ii. Are expenditures in excess of historical trends?

iii.  Is the expenditure appropriately categorized?

i.  Indirect

i.  Verify that indirect costs reported are less than or equal to the Federal indirect costs rate agreement with the host institution.

ii. Verify that only those costs allowed are reported and properly documented. Is there supporting documentation?

j.  In-Kind

i.  Are there any conflicts of interest in the sources of in-kind contributions?

ii. Are amounts reasonable, allowable and allocable?

iii.  Is there supporting documentation for amounts recorded for contributions? (e.g., signed and dated time sheets, log of supplies received, time and effort worksheets.)

Findings:
Sample# / Category / Finding

Reviewer’s Comments:

10) Determine if claimed in-kind contributions were accurately calculated.

a.  Are there any conflicts of interest in the sources of in-kind contributions?

b.  Are amounts reasonable, allowable and allocable?

  1. Is there supporting documentation for amounts recorded for contributions? (e.g., signed and dated time sheets, log of supplies received, time and effort worksheets.)

Evaluation:
Pass / Demonstrates control / does not apply
Fail / Condition

Reviewer’s Comments:

11) Determine that the organization’s procedures are adequate to account for program income.

a.  Verify documentation and usage of program income according to 13 CFR 143.25.

b.  Is there program income carried forward from the previous period?

c.  Are attendee list maintained from events that produce program income and are fees paid by attendees recorded in the program income ledger?

d.  Discuss how program income was used to further program objectives.

e.  Was program income accurately reported to the lead center?

Evaluation:
Pass / Demonstrates control / does not apply
Fail / Condition

Reviewer’s Comments:

1

PROGRAMMATIC REVIEW

Objective: To ensure the safeguarding of client confidentiality and compliance with program policies, operating procedures, and applicable laws and regulations pursuant to the Cooperative Agreement.

Programmatic Review

The Programmatic review consisted Q&A with the center director and program coordinator for the SBDC. The programmatic review questions were asked to gain an understanding of the internal controls of the SBDC and to ensure the safeguarding of the SBDC and its clients. The programmatic review also consisted of the review of client, counseling and counselor records, and observation of center facilities and client safe guards. The reviewer’s findings and notes relating to this portion of the review are included below.

QUESTIONS AND ANSWERS

MONITORING AND MARKETING

1)  Describe center contractual (i.e. grant contract) milestones.

a.  What were the past periods milestones?

b.  Did the center accomplish past milestones?

c.  What are the current contracts milestones?

d.  Is the center on track to accomplish current milestones?

Milestone / 2005
(GOAL) / 2005
(6/30/05) / 2005
% OF GOAL / 2004
ACTUAL / 2004
% of GOAL
Counseling Hours
Training Programs
Loan Packages
Evaluation:
Pass / Demonstrates control to manage contract efficiently
Fail / Condition / Needs attention

Reviewer’s Comments:

Recommendation:

2)  Describe monitoring procedures in accomplishing contractual milestones.

a.  What tools or reports are used to monitor progress toward accomplishing goals?

b.  How often is progress reviewed?

c.  What are the biggest obstacles in accomplishing contractual milestones?

d.  How are these obstacles, if any, managed?

e.  Are there other non-contractual milestone goals monitored? If so, which ones?

f.  What procedures would you take if a shortfall in contractual milestones were projected?

Evaluation:
Pass / Demonstrates control
Fail / Condition

Reviewer’s Comments:

Recommendation:

3)  How do you monitor the level of quality of service delivery?

a.  What tools do you use?

b.  How do you respond to complaints?

Evaluation:
Pass / Demonstrates control
Fail / Condition

Reviewer’s Comments:

Recommendation:

4)  How do you monitor what services the small business community needs?

a.  Besides state surveys, do you survey to determine needs? If so, how often?

b.  Are there other tools you use to determine needs?

c.  Do you query stakeholders about needs? How?

Evaluation:
Pass / Center utilizes formal and informal resources to determine business needs
Fail / Condition

Reviewer’s Comments:

Recommendation:

5)  How do you market your SBDC to clients and stakeholders?

a.  What tools do you use?

b.  How do you advertise to prospective clients?

c.  How do you market and report results to funding partners and other stakeholders?

d.  How do you integrate the state marketing plan with your regional marketing plan?

e.  Obtain a sample of advertising/reporting material.

Evaluation:
Pass / Demonstrates ability to market SBDC sufficiently
Fail / Condition / Needs attention

Reviewer’s Comments:

Recommendation:

6)  Do you market to local elected representatives?

a.  Who?

b.  How often?

c.  What tools do you use?

d.  Does a formal plan exist?

e.  What measurable benefits, if any, have resulted from marketing to this group?

f.  Within regulation, is there anything the state office can do?

Evaluation:
Pass / Demonstrates willingness to communicate on a regular basis with legislators
Fail / Condition / Needs attention

Reviewer’s Comments:

Recommendation:

7)  Describe your centers strengths and weakness in the services/training you offer.

a.  What are your strengths?

b.  What are your weaknesses?