Head Start Self-Assessment: Your Foundation for Building Program Excellence

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Program Self-Assessment Booklet 7

Management Systems: Fiscal Management

Core Question to be answered by Self-Assessment team:

How effective is the fiscal management system in supporting the implementation of quality services to children and families?

Purpose:

Fiscal Management means having a system of administering resources including funds, property and equipment. A fiscal management system is necessary to ensure that limited resources, allocated carefully and accountably, support the program’s delivery of quality services.

This booklet will help you to assess if the program meets Federal Performance Standards relating to fiscal management, budgeting, and expenditures. Related Performance Standards include: 1301.10-1301.13, Subpart B; 1301.20-1301.21, Subpart C; 1301.32-1301.33; 1304.20(c)(5); 1304.23(b)(1)(i); 1304.50(f); 1304.50(g)(2); 1304.51(h)(1)-1304.51(h)(2); 1304.52(d)(8); 1305.9; 1308.4(m)-1308.4(o); 1310.23(b); Part 74, Subpart C; Part 92, Subpart C; OMB Circular A-21; OMB Circular A-87; OMB Circular A-110; OMB Circular A-122; OMB Circular A-133.

As you conduct your assessment of the program’s fiscal management systems, pay close attention to:

• How Federal regulations regarding fiscal management are met
• How the budget is developed and approved
• How expenditures are monitored
• What fiscal reports are produced and how they are used
• How the grantee maintains accountability
• How investment choices are made

Given the increased emphasis on fiscal management and oversight, the official PRISM Fiscal Checklist has been included in this booklet. It will provide you with a useful tool to ensure that the program is meeting its fiscal oversight and management responsibilities.

Helpful tools to support data collection in this area follow.

Interview:

The Self-Assessment team member should interview the program’s fiscal officer and Head Start director. Use the questions below to assist you with the interview:

Describe the fiscal system and how the management team and the fiscal officers work together to support the delivery of Head Start services. How do they interact during the year to support the Head Start program?
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How is the budget developed and approved? Describe the involvement of the governing body and Policy Council. Are there written procedures describing this process? Is there a timeline?
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How are expenditures monitored? What reports are produced and how are they used? (Find out who receives regular financial reports, how often, and how the budget is compared to actual expenditures.)
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Has the program conducted a cost analysis of providing transportation services? If so, does your cost analysis reflect the true cost of providing transportation services? Do the results suggest any changes to these services?
_____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________

Review:

Review salary information for the grantee’s executive and staff positions. Are salaries in general and teacher salaries in particular, sufficient to recruit and retain qualified staff? Is the level of compensation consistent with the mission and goals of an anti-poverty agency and reasonable by community standards?
_____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________

Use your interview with the director and chief financial officer to obtain copies of documents and other information to complete the attached fiscal checklist.

Incorporating Relevant Data Sources:

Additional observations, document reviews, or interview questions that this team may choose to add:
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Include any key insights you may have learned from reviewing important data sources such as the PRISM report, PIR data, Community Assessment, strategic plan or short and long term program goals:
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Fiscal Checklist

Instructions for completing the Fiscal Checklist:

This checklist is designed to assist you in monitoring the fiscal health of the grantee and any delegate agencies (as applicable). The checklist is divided into three sections (with all questions receiving either a "Yes" or "No" answer). The answers to the questions in the first two sections will help you, in the third section, assess fiscal health in each of two major areas:

1. Internal Controls [45 CFR Parts 74.21(b)(3), 92.20(b)(3)]; and

2. Governance [45 CFR Part 1304.50(g)(2)].

These two major areas receive substantial emphasis because, together, effective internal controls and governance help grantees ensure successful and efficient operations of their own programs (and those of their delegates), reliable financial reporting, and compliance with applicable laws and regulations.

The first section of this checklist (Section I) includes 24 questions that serve as indicators (i.e., "flags") designed to help identify underlying fiscal problems. Circle "Y" (yes) or "N" (no) when answering each question. Responses with flags immediately below them might indicate an underlying fiscal problem. ( For several of the questions, one or more follow-up questions appear that are related to the main question. Answer these questions as directed.) After completing the first section, refer back to the questions with "flags" responses to gain a preliminary sense of the fiscal health of the grantee (and/or its delegates) and to identify areas that may need additional attention.

The second section of this checklist (Section II) includes 28 questions that directly assess compliance with specific program requirements (i.e., each question contains citations to the regulation(s) and/or Office of Management and Budget (OMB) Circulars that are applicable to the respective question). Circle "Y" (yes) or "N" (no) when answering each question. (For several of the questions, one or more follow-up questions appear that are related to the main question. Answer these questions as directed.) If a [asterisk] appears under the response that you circled, and if the weight of the answers to the main and follow-up questions (if applicable) suggest the grantee/delegate is not in compliance with the specified requirement(s), place a check in the box under the "Potential Area of Noncompliance" heading.

Toward the end of the fiscal review (i.e., after you have completed Sections I and II of the checklist, gathered all relevant information from document reviews and interviews, and followed up on all outstanding issues), turn your attention to the two major areas identified above (i.e., internal controls and governance). These items also appear in question form in Section III. For each of these items, in Section III, place a check in the box under the heading "Potential Area of Noncompliance" if the weight of the evidence you have collected (including the answers to the questions in Sections I and II of the checklist) suggests that the grantee/delegate is not in compliance with the specified requirement.

Under the "Documents Reviewed" column, list the evidence, in the form of documents, you gathered and reviewed to support your conclusion. Under the "People Interviewed" column, list the individuals you interviewed when answering the checklist questions, and in the "Additional Comments" column, write any additional remarks that pertain to the question.

In answering the questions on this checklist, some of the documents you might find useful to review include:

• current and prior financial statements from the audit report,
• most recent financial reports as delivered to the governing bodies,
• Policies and Procedures manual(s) covering fiscal operations (e.g., written accounting procedures and procurement procedures),
• detailed general ledger or accounts payable (AP) disbursements journal,
• monthly trial balances,
• bank reconciliations,
• administrative costs documentation,
• program budget planning documents (e.g., forms, memorandums, work papers, GABI, and grant proposals),
• chart of accounts,
• property inventory and files for recent major purchases,
• audit reports and the management letter that accompanies the audit report (including the most recent),
• current and prior year Financial Assistance Award (FAA),
• notice of grant award,
• indirect cost agreement and/or cost allocation plan,
• lease agreements,
• codes of conduct from personnel policies,
• organizational chart or list of staff and function of each staff person, including any vacancies,
• payroll journal and/or payroll service summary,
• most recent SF-269, with supporting documentation,
• PMS-272 with supporting documentation from the past four quarters,
• insurance policies (e.g., liability, vehicles, child accident),
• interagency agreements,
• Non-Federal share documentation,
• Department of Agriculture (USDA) accounting records and source documents (e.g. meal counts, etc.),
• Vendor contracts,
• grantee charter document,
• delegate agencies and other partnership contracts as required.

*Please note that questions 12, 27, 40, and 50 apply to grantees only, and question 45 is only applicable to private non-profits.

Fiscal Checklist

Section I

Section II

Section III

Team Member Summary Worksheet

Summary of Results for Fiscal Management

Areas where the program is working well. Provide examples of program strengths or areas where the program exceeds Performance Standards:
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Areas where the program needs improvement:
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Additional areas of concern:
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TEAM LEADER BOOKLET ANALYSIS

Booklet # ____________
Booklet Name: ______________________________________________________________________________

Program Strengths	Data Source
Specific Program Weaknesses and Areas to Strengthen	Data Source