CSMFO Magazine February 2017 - 1 Year Anniversary Edition

CSMFO C A L I F O R N I A

S O C I E T Y

O F

M U N I C I P A L

F I N A N C E

O F F I C E R S

M A G A Z I N E

FEBRUARY 2017 #12

ONE YEAR ANNIVERSARY EDITION!

1 CSMFO MAGAZINE FEBRUARY 2017

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CSMFO

CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS

M A G A Z I N E FEBRUARY 2017 #12

NOW IS A GOOD TIME

To empower employees to save for tomorrow without sacrificing today Empower Retirement works closely with plan sponsors to provide employees with personalized

2016-17 Board of Directors President Drew Corbett, City of San Mateo President-Elect Margaret Moggia, West Basin MWD Past President John Adams, City of Thousand Oaks Scott Catlett, City of Yorba Linda Jimmy Forbis, City of Gilroy Brent Mason, City of San Bernadino Karan Reid, City of Concord Chu Thai, City of Monterey Park Jennifer Wakeman, City of Lafayette Executive Director Melissa Dixon, MBA, CAE Editorial Designer & Photographer David Blue Garrison Interim Editors Steve Heide, Chino Valley Independent Fire District Joan Michaels Aguilar, City of Dixon

support and powerful online resources to help

Additional Photography

them plan for their long-term financial independence.

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As the largest provider of government deferred

The California Society of Municipal Finance Officers is the statewide organization serving all California municipal finance professionals. We promote excellence in financial management through innovation, continuing education and the professional development of our members. CSMFO members are deeply involved in the key issues facing local agencies. We value honesty and integrity, and adhere to the highest standards of ethical conduct.

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GWFS Equities, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company. Empower Retirement refers to the products and services offered in the retirement markets by Great-West Life & Annuity Insurance Company (GWL&A), Corporate Headquarters: Greenwood Village, CO; Great-West Life & Annuity Insurance Company of New York, Home Office: NY, NY; and their subsidiaries and affiliates. The trademarks, logos, service marks and design elements used are owned by 4 GWL&A. Š2016 Great-West Life & Annuity Insurance Company. All rights reserved. PT257076 (2/2016) CSMFO MAGAZINE FEBRUARY 2017

Thank you to all the authors in this issue for sharing with us their time and expertise. If you have an idea for a future article, please contact Melissa Dixon at the CSMFO office at melissa.dixon@staff.csmfo.org.

For more information on CSMFO or this Magazine, please contact the CSMFO office at 916.231.2137 or visit the website at www.csmfo.org.

CONTENTS FEBRUARY 2017 #12

FEATURES

Grant Management: 10 Tips for Success

P.

10

CDBG Administrative Consultant DO’S and DON’TS P.

13

Cost Allocation Plans for Recovery of Overhead Costs in Grants P.

18

Single Audits under the Uniform Guidance – Ensuring a smooth transition P.

25

Job Opportunities

31

P.

INSIDE CSMFO President Drew Corbett’s Letter P.

6

Executive Director Letter P.

8

Central Valley Chapter 2016 Highlights P.

16

Spotlight on the Communications Committee P.

22

Looking Towards 2018 P.

29

The views and opinions expressed in these articles are those of the authors and do not necessarily reflect the official policy or position of CSMFO. 5 CSMFO MAGAZINE FEBRUARY 2017

PRESIDENT’S LETTER Drew Corbett

A Humble & Gracious Beginning I’d like to start my first message as CSMFO President by saying what an honor and a privilege it is to have been elected to this position by our membership. When I look through our directory at the distinguished list of those who have come before me, I am truly humbled to be in the position I am in. I will do my absolute best to serve the membership as well as the presidents before me have so capably done.

While my path to becoming the president is fairly typical (starting with committee work, then being elected to the Board, then being elected as President), my path to municipal finance was not so typical. Because of this, CSMFO is such an important organization to me, as without CSMFO, I would not be where I am today professionally.

My first “real job” out of college as an elementary school teacher, and that is the job that got me out to California initially, as I grew up in Florida. While teaching was a great experience, I learned during my two-year commitment that I just didn’t see myself as a career teacher. The problem, however, was I still had no idea what I wanted to do professionally.

As such, I did what many 24-year olds would have done at the time, which is delay that decision by returning to school to pursue a graduate degree. So I left sunny California for Madison, Wisconsin for an M.B.A. and some clarity on what

I wanted to do when I grew up. Two years later, I had my M.B.A, but I didn’t have any greater clarity on what I actually wanted to do with it. A lack of clarity doesn’t pay for student loans, however, so I needed a job. Fortunately, I was able to land one of those back in California with a large, global technology company.

Figuring I would work there for a couple of years while I was figuring out what I really wanted to do, I set out to make the most of my time. I definitely felt like I accomplished that, as I worked with a lot of truly amazing people and learned a ton.

After five years, however, I was no closer to really having any sort of passion for what I was doing professionally, and I was looking to make a change. My wife, who works in the public sector at the county level, suggested that I look into a job with the government and forwarded me a job announcement she saw with the City of Sunnyvale’s Finance Department. Uncertain of the direction I was headed but knowing I wanted to make a change, I decided to apply for the job. After making my way through the interview process, the Finance Director (and CSMFO Past President), Mary Bradley, offered ...without CSMFO, I would me a job and assigned not be where I am today me to the department’s professionally. budget office.

Within about six months, I had finally figured out what I wanted to do professionally. I loved working in local government for a city, particularly in the area of finance. And with a much better idea about what sort of career path I wanted to be on, I needed to start figuring out how to get the training I needed, and that is where CSMFO came into the picture. Not only did I utilize CSMFO’s training resources like the governmental accounting courses and the weekend training, but I was fortunate enough to have Mary help me get involved

Drew Corbett speaking at the President’s Dinner in the Crest Theater, photo by Tim Przybyla 6 CSMFO MAGAZINE FEBRUARY 2017

CGI Advantage360® Built-for-government SaaS ERP with the organization as a member of the Career Development Committee. Through that work, I continued to get the skills training I needed to progress in my career, and I also began to make valuable connections with people throughout the organization, many of whom have served as a mentor to me over the years.

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I’ve been very fortunate in my time as a municipal finance officer, as I have been able to make my way from Budget Analyst to Budget Manager to Assistant Finance Director to Finance Director to Assistant City Manager. There is no doubt in my mind that my career progression in municipal finance would not have been possible without CSMFO. The training I have been provided, the people that I have met, and the opportunities I have had to serve the organization have all been instrumental in getting me to where I am today.

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I hope that the story of my journey provides you with some insight into why CSMFO is so important to me. The impact this organization has had on me is beyond words, and in taking over as your President, I hope that I can serve this organization and its membership with the same impact that this organization has served me over the years.

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I am looking forward to a great 2017 for CSMFO!

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CSMFO MAGAZINE FEBRUARY 2017

EXECUTIVE DIRECTOR’S LETTER Melissa Dixon

Envisioning CSMFO Every fall, CSMFO leaders convene to develop (or update) the organization’s Strategic Plan and to develop the Action Plan for the following Board year. For 2017, we’re in the first year of a new three-year plan. The discussion last September, facilitated by member-favorite Neil Kupchin, began at the beginning. That is to say, the leadership spent a lot of time discussing CSMFO’s mission, vision and values.

For those who don’t know a lot about nonprofit associations, let me give you a quick tutorial.

“Nonprofit” does not mean the organization can’t make money. For those of you who enjoy goading people, saying as much is good way to get me to go off on a rant. I often see clients that abhor showing a positive net income on their budget because “we’re not supposed to make a profit.”

Except that, yes, you are. It’s okay to make money as a nonprofit. Nonprofit are businesses, just like for-profits, and fiscally should be managed much the same.

The difference comes with intent. In a for-profit corporation, the intent of the organization is to make a profit; for someone to make money. In nonprofit organizations, the intent is to forward a mission. For professional trade associations, like CSMFO, the intent is to make the profession better.

The mission of the organization, then, is very important. The mission is what we’re doing, why we exist, the common goal toward which we tirelessly work.

The vision of the organization is literally our vision for the future. It’s not what we do, it’s why we do what we do.

For professional trade associations, like CSMFO, the intent is to make the profession better.

The values of an organization tell the story of the people driving the association.

This is what the leadership finds important; what we want the culture of the organization to be.

When you’re crafting the mission, vision and values of an organization, it’s a lot of wordsmithing. And details. And making sure the words that are used are capturing everything that’s felt by the leadership. It’s a powerful experience. It’s inspiring.

I hope you’ll take a moment to read CSMFO’s Vision and Values and know that hundreds of volunteer hours went into developing this message, this guiding light for the next generation of leaders. I hope that when you read them, you’ll appreciate the dedication and thought that went into each specific word. I hope when you read them, you too will be inspired.

And finally I’d like to acknowledge this February issue as being the one year anniversary of launching the CSMFO Magazine. I’d like to thank our advertisers as well as the professionals who volunteered their expert advice on this fascinating world of finance.

MELISSA DIXON FACT Melissa and her husband met in their Honors Precalculus class at Vintage High School in Napa.

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CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS Our Vision CSMFO is the preeminent resource for promoting excellence in government finance.

Our Mission The California Society of Municipal Finance Officers serves all government finance professionals through innovation, collaboration, continuing education and professional development.

Our Guiding Values We value and respect our members as we live by and carry out the following values.

Integrity We believe in and adhere to honest and ethical decision making while displaying good character and sound judgment.

Competency We recognize the importance of obtaining and mastering the requisite skills, knowledge and experience to enable finance professionals to perform their jobs at a high level.

Commitment to Public Service We believe our members should give back to their agencies’ and the profession.

Transparency We recognize the importance of openness, accountability and honesty to enhance the public trust.

Creating a Positive Legacy We believe in collaboration, teamwork and developing leaders who share information, grow their skills and mentor others.

9 CSMFO MAGAZINE FEBRUARY 2017

FEATURED STORY

Grant Management: 10 Tips for Success Implementing these 10 tips may help you avoid being the “last to know” about grant awards and compliance issues

Written By Ursula Drake

C

Ursula Drake, Director of Grant Management Services, Blais & Associates, Inc.

ompliance in grant management is critical and should not be undervalued.

All federal and state grants have very specific program, fiscal and unique compliance requirements that accompany awards. Requirements may include eligible costs, local match, performance period, record keeping procedures, and report deadlines. In order to ensure that all grant conditions are being met, organizations receiving funds must first understand the requirements of the award, and then continually measure their performance against these metrics.

Listed below are 10 tested strategies you can implement to ensure your organization successfully navigates the grant management and compliance process.

Do the Research. Take the time to research the details of the grant for which you are applying. This allows you to determine if your organization meets the application criteria for the award, as well as the expectations of the grant funder in the event your agency receives the grant award. You may find that the requirements of the grant are not always

10 CSMFO MAGAZINE FEBRUARY 2017

worth the award. Careful selection of grants you want to apply for is an exceptional part of the grant management process.

Communicate Internally. Make sure your project manager, finance manager, purchasing agent, public information officer, etc. are included in project meetings, as needed. Many times, the finance manager is the “last to know” about a grant award yet this person is responsible for successful audits involving those funds. Calendar a standing monthly, internal “all hands” meeting throughout the grant’s performance period. Finance staff participation should be mandatory.

Organize a Management Structure. The grant process is an undertaking not for the faint of heart. It is complex and time consuming – especially without organization. This is why developing and implementing a grant management structure is very important. There are many moving parts in the grant process. Without a solid management structure, important requirements can easily be overlooked – costing your organization valuable time and money. Develop a tracking table or spreadsheet to keep key requirements at the forefront.

Compliance is Critical. Compliance is the most important facet of grant management, as all grants require evidence that funds have been used within the award guidelines. Establishing a system of compliance to measure progress against the grant agreement’s terms and specifications will ensure the conditions of the award are met, including any legal requirements.

Compliance is also critical to establishing and maintaining credibility and increases your chances of being awarded future grants.

Manage Deadlines. All grants have deadlines throughout the entire lifespan of the grant agreement. Develop a calendar or project timeline identifying all key dates and benchmarks.

This will ensure reporting deadlines are met and all information is reported in a timely manner.

Complete Project Reports. Completing required reporting for a grant that you have been awarded is critical. Reporting includes communicating on-time updates on the progress of the project, as well as submitting accurate financial reports.

Progress reports are also an opportunity to talk about reaching successful milestones, as well as challenges that you may be experiencing. Expect to give a final, detailed report about the project after completion.

Don’t Forget About Post-Award Compliance.

Compliance is also critical after your project is finished. Some grants may require additional reporting and periodic updates after projects have been completed. By understanding postaward compliance after your grant project is completed, you can ensure that you have successful and easy audits.

Take Costs into Consideration. There are costs associated with some grants that may not be reimbursable under the approved funding agreement. These costs may be minor, such as application fees, printing and mailing costs, but organizations applying for grants are also responsible to pay for audits and insurance, among other things. Understanding the costs before applying for the grant will allow you to anticipate and budget for expenses.

The grant process is an Grant management can be an intimidating undertaking not for the faint process and commands a high level of attention of heart. to detail, execution and management. There are

Communicate with Funders. During the grant management process, it is important to communicate any adjustments in the project, outcomes and even personnel changes that may have occurred since the initial submission. Communication is also critical for grants that involve multiple participants, in order to make sure all involved parties are informed and included.

Maintain Accurate Records. Accurate record keeping is an essential part of grant management, and you should establish a record keeping system that tracks all expenditures related to your grant. Many grant making entities require grantees to maintain detailed expense and project records, and submit them as a condition of payment. It is also important to be aware of record retention requirements of the grant for both compliance and auditing purposes.

many ways to achieve success. Implementation can include using qualified in-house staff, outsourcing, or a hybrid model. If using in-house staff, encourage membership and certification with various industry organizations like the Grant Professionals Asociation and/or National Grants Management Association to further hone staff skills and compentency.

Ms. Drake is the Director of Grant Management Services at Blais & Associates, Inc. where she leads the overall strategic direction of the division. She has successfully managed grants for over 16 years in State government, non-profit, and public education institutions in Michigan, Kansas, Texas

11 CSMFO MAGAZINE FEBRUARY 2017

and California. She is a member of the Grant Professionals Association (GPA) and the National Grants Management Association (NGMA). Ms. Drake is a graduate of Baker College with a degree in Business Administration.

The B&A team has been providing grant writing and grant management consulting services to local government agencies in California (with a local office in Irvine), and across the United States, for over 17 years. As a result of the company’s focus on compliance and organization, many local government agencies they work with have implemented a solid internal communication strategy, enjoyed successful and easy audits, and are awarded grants year after year.

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FEATURED STORY

CDBG Administrative Consultant DO’S and DON’TS Written By Sharon Rahban

W

hen looking to buy real estate, there are three important concepts you should know: LOCATION, LOCATION and LOCATION.

Sharon Rahban CPA – Rahban CPA & Similarly, when using an outside administrator for CDBG (Community Consulting Inc.

Development Block Grant) operations, there are also three important concepts you should know: COMMUNICATION, COMMUNICATION and COMMUNICATION. CDBG administration can be a hard fit within the various segments of responsibility for many local governmental organizations. It can end up being the dreaded “potato” in the

metaphoric game of “hot potato” where it gets passed on from division to division.

Therefore many agencies hire an outside consulting firm that has experience with CDBG program administration and claim reimbursement procedures. However, communication between municipal finance professionals and non-finance professionals is already hard enough, before hiring an outside consultant.

Consulting firms that may be well experienced at program administration may not have the key understanding of what is needed to pass an audit. Therefore it makes communication even more imperative.

Here are some Do’s and Don’ts that will add success to your organization’s CDBG operation when management has elected to use an outside consultant: DO’S • Do follow up on whether a reference-check was done for the consultant hired • Do obtain the approved grant application, the grant budget for the year, any budget amendments that have been approved by the granting agency, as well as an accounting of all disbursements and receipts that are specific to the program • Do ask the consultant about which receivables and payables are still outstanding and when payment is expected • Do ask the consultant about the status and effectiveness of vendor (or sub-recipient) work, and whether reference checks were done for vendors (or sub-recipients) hired • Do become familiar with the required format for the reimbursement claim • Do monitor all interactions between the consultant and any auditors, and step in when needed

continues....

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CSMFO MAGAZINE FEBRUARY 2017

DON’TS • Don’t wait until audit time to communicate with your consultant, do so regularly • Don’t blindly assume your consultant will cover all bases that will be tested during an audit. Gain familiarity with CDBG contract and federal requirements and communicate with the consultant regularly.

• Here is the website for federal CDBG requirements for 2016: • https://www.whitehouse.gov/sites/default/files/omb/ assets/OMB/circulars/a133_compliance/2016/hud.pdf • Don’t avoid communication with program vendors or beneficiaries. They could also provide feedback regarding the consultant’s work.

• Don’t assume that municipal staff responsible for programmatic oversight is educated regarding the possible consequences of a failed program or failed audit.

• Consequences could include reports made to elected officials, as well as the inability to obtain more grant funding in the future The benefits to the public of CDBG are immense. That’s what makes oversight so important. Experiencing a failed program or a failed audit can have consequences starting from mere disappointment to far reaching financial consequences.

You may not have control over the decision of who has oversight over the CDBG program. But, with some persistence and determination, you can exercise control over your communication with that internal division and with the external consultant.

Sharon Rahban, a native of Los Angeles, California, obtained her CPA license from the State of California in January of 2006.

Included in her studies as a double major from the University of California at Berkeley, in the fields of Applied Mathematics, and Economics, Sharon began her career in public accounting and went onto become a Senior Auditor with clients ranging from Public Sector, Non-profit, Private, and Publicly Traded firms.

For the next eight and a half years, Sharon worked as the Accounting Manager for the City of Beverly Hills, winning annual awards for Excellence in Financial Reporting, as well as creating value for the organization. Sharon is a current member of the AICPA, California Society of CPAs, Governmental Finance Officers Association, California Society of Municipal Finance Officers, and the Cal Alumni Association.

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The following characteristics are Sharon’s’ keys to success and are integral in every project she works on: Vision; Strategy; Persistence; Patience; and having sufficient Knowledge.

www.georgiacenter.uga.edu/govfinance/GFR

Units of the Office of Public Service & Outreach 14 CSMFO MAGAZINE FEBRUARY 2017

Budget Analyst Training Academy When: Apr 25, 2017 to Apr 28, 2017 – (Second time on the West Coast / First Time So. California) Program Description: The GFOA Budget Academy is an immersion training course that focuses on skills and techniques critical to public sector budget analyst. Using a combination of exercises, discussions, and lectures, the course will provide an overview of the budget development process, including best practices and techniques required in effective budgeting. This course covers essential elements of public sector budgeting such as goal setting, program development, revenue and expense analysis, position budgeting, capital budgeting, and more. Designed for budget analysts from both small and large organizations, this course will provide critical information for new analysts and allow veteran analysts an opportunity to hone their skills.

Where: Hyatt Regency Newport Beach, 1107 Jamboree Road Newport Beach, CA 92660 Speakers: Michael Gossman, Division Manager of Finance and Administration, Sonoma County Water Agency Scott Catlett, Finance Director / City Treasurer, City of Yorba Linda, CA David Cain, Director of Finance / Treasurer, City of Fountain Valley, CA Jay M. Goldstone, Managing Director, MUFG Americas

Who Will Benefit: This course is designed for new and intermediate analysts or others new to government looking to gain important budgeting skills and improve their understanding of the public-sector budget process and budgeting best practices. Also available are 30 CPE Credits.

Seminar Objectives: • Understand the public-sector budget process • Develop skills for basic forecasting and data analysis • Understand basic accounting principles and how they relate to the budget • Learn how to work with operating departments to develop goals and budget requests • Become familiar with position budgeting and salary projections for public sector organizations • Link capital and operating budgets • Understand how to budget for grant-funded programs • Gain an understanding of the basics of rate setting and internal service charges • Better understand specific operational issues facing local governments • Understand how to present budget information • Network with peers from other organizations Register now at the GFOA Training Website 15 CSMFO MAGAZINE FEBRUARY 2017

INSIDE CSMFO

Central Valley Chapter 2016 Highlights Written By Teri Albrecht

I

Chapter Chair Teri Albrecht

enjoyed the opportunity to be the 2016 Chapter Chair for the Central Valley Chapter. We had a very successful year with meetings combined with networking, relevant timely topics and informative presenters. The Central Valley Chapter met at host cities throughout the Chapter, which were the cities of Merced, Los Banos, Turlock, Galt and Lathrop. Since the Chapter covers a large geographic area, this offers all members a chance to attend a lunch meeting.

We appreciate the generous efforts of the presenters that dedicate their time and talent to the CSMFO organization.

We were fortunate to have a wide range of topics and interesting presenters such as Michael Coleman, Bartel and Associates, California Department of Transportation and HdL Companies – Property Tax, Sales Tax and Cannabis.

The meeting with the largest attendance of the year was the first meeting of 2016 hosted by the City of Merced with 29 attendees. Paula Cone and Andy Nickerson with HdL Companies presented “Real Estate Trends, Forecasting Property Tax and VLF in Lieu Revenue” and “Sales Tax

16 CSMFO MAGAZINE FEBRUARY 2017

Trends and Forecasts”. Not only are they both experts in their fields, they enlightened the attendees and provided the attendees with individualized relevant data. They went above and beyond what was requested of them and it is so much appreciated.

Besides the educational and networking goals, the Central Valley Chapter accomplished several goals established by CSMFO. We started the year by using the CSMFO website for chapter meeting registrations and payments and finished the year by establishing our first Chair and Vice Chair team to lead us through 2017. I’m happy to introduce the Central Valley Chapter Chair Vanessa Portillo and Vice Chair I’m happy to introduce the Jeri Tejeda.

Central Valley Chapter Chair

Vanessa Portillo and Vice Vanessa Portillo is the Chair Jeri Tejeda.

Accounting Manager with the City of Lathrop with over 10 years of experience in the public finance sector.

Her involvement in multiple levels of an organization has enabled her to gain first-hand experience on the technical tasks as well as to develop a deep understanding of the organization’s strategic planning process. Vanessa holds a Master’s Degree in Business Administration. She enjoys spending time with family and four-legged friends. When not at work, Vanessa feeds her adventurous spirit by participating in local running events, CrossFit or taking a stroll by the beach.

Jeri Tejeda is the Accounting Manager with the City of Manteca. She has been with the City for over 11 years. Jeri graduated from California State University, Stanislaus with a Bachelor’s of Science degree in Business Administration with a concentration in Accounting.

I look forward to the upcoming year as a Central Valley Chapter member working with the new leadership, networking, training and staying involved with CSMFO.

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FEATURED STORY

Cost Allocation Plans for Recovery of Overhead Costs in Grants Written By Nicole Kissam

E

Nicole Kissam, NBS Director

ffective cost recovery policies and procedures must come from an initial understanding of the true costs of providing services. Many local government agencies are aware that indirect administrative costs can be quantified and recovered from various funds, grants, fees, and charges, but are unsure of the best method of assigning these costs, or how to go about effectively recovering these costs.

An Overhead Cost Allocation Plan is an analysis – accompanied by supporting documentation – which distributes the indirect support services costs of an organization to the direct services and activities provided in a fair and equitable manner. Preparation of an Overhead Cost Allocation Plan encompasses a number of analytical steps, including the compilation of an organization’s cost data, expression of costs according to the primary types of support services provided, and assignment of a statistical basis for allocating costs. The results of the Plan provide information on the

18 CSMFO MAGAZINE FEBRUARY 2017

total assigned indirect cost to each program, department, or direct service area of the organization. The assigned costs are typically as an annual dollar amount, or as an overhead rate.

When preparing a Cost Allocation Plan, it is important to first identify and articulate the intended use of the Plan’s Preparation of an Overhead results. Cost Allocation Cost Allocation Plan Plans can be more or encompasses a number of less restrictive in their analytical steps... application of important published Federal and State guidelines. As the focus of this article is on grants management, the following is a discussion of specifics related to industry practice as well as recent developments in the guidelines for establishing grant related overhead costs.

Cities submit a type of Cost Allocation Plan commonly referred to as an “OMB A-87 Compliant” Cost Allocation Plan to a Federal or State grantor when seeking reimbursement of overhead costs from a grant. Common grantor agencies include the United States Department of Housing and Urban Development (HUD), the Federal Transit Administration, the California Department of Transportation, among others. In addition, Counties are required to submit this same type of Plan annually to the California State Controller’s Office.

This type of Cost Allocation Plan complies with the guidelines of Title 2, Code of Federal Regulations, Part 225, Cost Principles for State, Local, and Indian Tribal Governments, which was formerly known as the Federal OMB A-87. Effective with the Fiscal Year ending December 31, 2015, the OMB guidelines became part of the new Uniform Guidance, Part 200 CFR – Code of Federal Regulations, which superseded 8 previous Federal OMB circulars. This consolidation effort, also referred to by stakeholders as “The Super Circular”, represents the most comprehensive change in the federal grants landscape since the OMB’s predecessor, the Bureau of the Budget. The new guideline is composed of the streamlined Administrative Requirements, Cost Principles and Audit Requirements for federal awards to all types of non-federal entities.

Publication of the OMB guidelines in the Code of Federal Regulations does not change the nature of the information contained from guidance into regulation or law. The new Uniform Guidance retains all the familiar discussions and definitions of direct versus indirect costs, and the bulk of the guidance for Cost Allocation Plan development is in the appendices. Generally, direct costs are those that can be assigned or identified specifically, assigned relatively easily, or with a high degree of accuracy; indirect costs are those necessary for the overall operations of an organization, where a direct relationship with a particular cost objective would require efforts disproportionate to the benefit received. The

Uniform Guidance also consolidated several sets of “General Tests of Allowability”, essentially a set of hurdles that a grantee should run every cost through before charging it to the grantor. These Tests are concepts such as whether the costs are necessary, reasonable, allocable, consistently treated, uniform in nature, determined in accordance with Generally Accepted Accounting Principles, etc.

Fifty four (54) types of specific costs are addressed in the Uniform Guidance, representing logical groupings of commonly encountered costs in the course of doing business. A number of these are explicitly prohibited from reimbursement through Federal funds. It is important to remember that if a cost item does not appear in the selected 54 items, it is not automatically prohibited from funding. Allowability in each case would be determined on similar or related items of cost. Throughout the consolidation efforts, there were only a few new cost items added or removed, while many existing categories were modified in their description or terms of applicability.

For more information, the following resources may be useful: HTTPS://CFO.GOV/COFAR: Technical assistance materials, including cross-walks between the circulars and the new uniform guidance, FAQs and webinar recordings https://cfo.gov/wp-content/uploads/2014/08/2014-08-29Frequently-Asked-Questions.pdf: Developing and submitting a Cost Allocation Plan within the context of grant management may seem daunting. The

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guidelines and definitions in support of Plan development have been evolving for more than 50 years. Fortunately, by familiarizing with the Uniform Guidance achieving reimbursement of overhead costs from grantors is attainable by every local government.

Ms. Kissam is a Director with NBS in the Financial Consulting Group. She has 15 years’ total work experience in public sector consulting, city government, marketing, and public relations.

Nicole has been a financial and management consultant to local government for the majority of her career, specializing in Full and OMB A-87 compliant cost allocation plans, user and regulatory fee analysis, impact fee analysis, financial plans, and operational improvement strategy for California agencies.

Nicole holds a Bachelor of Science in Business Administration from California Polytechnic State University in San Luis Obispo.

20 CSMFO MAGAZINE JANUARY 2017

Piper Jaffray is committed to California municipal finance

For more information, contact the following representatives from our California public finance team: Mark Adler Managing Director 310 297-6010 mark.j.adler@pjc.com

Tom Innis Managing Director 415 616-1635 thomas.p.innis@pjc.com

Katie Koster Managing Director 949 494-6110 katherine.a.koster@pjc.com

Dennis McGuire Managing Director 916 361-6520 dennis.j.mcguire@pjc.com

Russell Reyes Managing Director 310 297-6014 russell.c.reyes@pjc.com

Victor Ume-Ukeje Managing Director 415 616-1662 victor.e.ume-ukeje@pjc.com

Tony Rapista Vice President 310 297-6031 anthony.l.rapista@pjc.com California municipal finance banking offices are located in Los Angeles, Orange County, Sacramento and San Francisco 21 CSMFO MAGAZINE FEBRUARY 2017 Since 1895. Member SIPC and NYSE. Š 2016 Piper Jaffray & Co. 9/16 CM-16-0858

INSIDE CSMFO

Spotlight on the Communications Committee

Written By Joan Michaels Aguilar

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Joan Michaels Aguilar, Deputy City Manager-Administrative Services City of Dixon

ach issue, the CSMFO Magazine will focus on one of the standing committees. This month, we would like to introduce you to the Communications Committee, the newest committee established just this past December 2016 by the Board. In early 2016, then President John Adams created an ad-hoc Communications Task Force comprised of representatives from all of the standing committees.

You know the magazine that you are perusing? Under the direction of President Adams, the CSMFO Communications Task Force spearheaded the initial publication efforts which have now transitioned to a standing committee. The new Communications Committee is in charge of developing the editorial content, as well as the editorial calendar for the Magazine.

22 CSMFO MAGAZINE FEBRUARY 2017

Up to now, the magazine has been published monthly, but will transition to bi-monthly publication beginning after March.

The Committee is comprised of Steve Heide as our Chair, Joan Michaels Aguilar as Vice Chair, David Cain and Marcus Pimentel serve as Senior Advisors, Chu Thai is Board Liaison, with Carol Williams as a Member, and John Adams as a Special Advisor. Some of our objectives are to maintain and update the CSMFO style guide, publish the magazine, including the advertising program; oversee CSMFO social media; undertake special projects as directed by the Executive Committee or Board of Directors.

As part of the recent strategic plan, the Communications Committee will be involved in the Core Strategy of Strategic Growth. Specifically, branding/outreach/promoting CSMFO. In addition to publishing the CSMFO Magazine, our committee will be focusing on: • Creating policies to establish consist messaging in the use of logos, email communications and magazine policies, etc. • Identifying standardized opportunities to support chapters and committees in their CSMFO outreach efforts If you are interested in being a part of this exciting new committee, please fill out a volunteer interest form, and our Chair will contact you.

We are always looking for new authors who want to share their perspective with our members. Please contact Melissa Dixon if you think you might have a great idea to share in one of our future magazines.

The edition themes for the balance of 2017 are: March

CSMFO Conference Edition – 60th Anniversary

May

Focus on Fiscal Sustainability

July

Hot Topics – many articles that may not warrant an entire issue devoted

September

Emergency Preparedness

November

Financial Reporting and Transparency

23 CSMFO MAGAZINE FEBRUARY 2017

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CSMFO MAGAZINE FEBRUARY 2017

FEATURED STORY

Single Audits under the Uniform Guidance – Ensuring a smooth transition Written By Jessica E. Andersen

Y

Jessica E. Andersen, CPA

ou made it through your first audit under the Uniform Guidance, but now what? Did you identify any areas you need to address? Read on to ensure you have covered the key changes, and are ready for the upcoming reporting cycle.

What is the Uniform Guidance, anyway?

On December 23, 2013, the Office of Management and Budget (OMB) issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, otherwise known as the Uniform Guidance or “Super Circular”. The Council on Financial Assistance Reform (COFAR) worked closely with OMB on the development of the Uniform Guidance, and is a great resource for more information.

The COFAR publishes and periodically updates Frequently Asked Questions on their website (https://cfo.gov/wpcontent/uploads/2015/09/9.9.15Frequently-Asked-Questions.pdf) to address common issues during implementation.

The full guidance is online at the Electronic Code of Federal Regulations (eCFR) under Title 2 of the Code of Federal Regulations Section 200 (also known as 2 CFR 200). There is no getting around Too often public budgeting it – reading the Uniform lacks transparency across Guidance is the best the globe. way to understand the requirements and changes.

In the meantime, I’ve highlighted some of the key elements below.

When are the changes effective?

The changes are effective now. New Federal awards issued after December 26, 2014, or incremental funding to existing awards after that date, are subject to the requirements of the Uniform Guidance. Pay careful attention to the award dates for all grants administered by your entity to determine which are subject to the Uniform Guidance. If you are unsure, check your grant agreements, or discuss with your granting pass-through agencies. Also, be aware that the Department of Housing and Urban Development (HUD) issued separate implementation guidance for certain HUD grants as described more fully in HUD CPD Notice 16-04.

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For the vast majority of agencies, audits for the fiscal year ended June 30, 2016, were the first under the Uniform Guidance. For fiscal year 2016-17, procurement requirements will be in effect for those entities that elected to apply the procurement Grace Period.

Reporting and audit requirements • A number of changes were made to the reporting and audit requirements for recipients of federal awards, contained within 2 CFR 200.5xx -Subpart F, including: • Thresholds used to determine if a single audit is required were raised from $500,000 to $750,000 of federal expenditures.

• Auditors are required to test 20%-40% of total federal expenditures, a reduction from 25%-50%.

• The Type A threshold was increased from $300,000 to $750,000.

• The Schedule of Expenditures of Federal Awards (SEFA) requirements were modified to include: • Identification of clusters, including the cluster name and listing of individual federal programs within the cluster, on the face of the Schedule, • Amounts provided to subrecipients on face of SEFA (not within the notes), • Total amounts by CFDA, 26 CSMFO MAGAZINE FEBRUARY 2017

• The balance of loans from previous years and new loans expended during the year must be reported on the face of the SEFA. Loan and loan guarantee balances outstanding at year-end must be disclosed in the notes, • The notes to the SEFA should disclose whether or not the nonfederal entity elected to use the 10% de minimis cost rate (see further discussion below).

• The Data Collection Form (SF-SAC) was revised, and procedures were modified. Further, CFDA numbers now prepopulate Federal program names within the form.

Written policies and procedures Don’t be caught off guard - your entity should have written procedures: • Implementing the requirements over cash management (2 CFR 200.305), • Determining the allowability of costs in accordance with Subpart E Cost Principles (from 2 CFR 200) and the terms and conditions of the Federal Awards, • Covering the standards of conduct for conflicts of interest (2 CFR 200.318), • Covering procurement transactions to ensure all solicitations include a clear and accurate description and identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals (2 CFR 200.319).

accepted by all Federal awarding agencies or PTEs. If your entity doesn’t have a negotiated rate, you may elect to indefinitely charge a de minimis rate of 10% of modified total direct costs.

Other key considerations Equipment (2 CFR 200.313) – Equipment purchased with federal funds must be supported by property records and subject to a physical inventory at least once every two years.

Procedures must be established to keep the equipment in good condition, and if sold, ensure the highest possible return.

Procurement (2 CFR 200.317 through .326) – While states continue to follow the same policies used for all procurements, non-Federal entities (including subrecipients of a state), will follow the general procurement standards within the Uniform Guidance. Procurement methods must fall into one of five categories: micro purchases, small purchases subject to the Simplified Acquisition Threshold, sealed bids, competitive proposals, and noncompetitive proposals. Implementation of procurement standards began December 26, 2016, for entities that opted for the Grace Period.

actual hours incurred.

• Compensation (2 CFR 200.430 and 200.431) – If you are charging salaries and benefits as part of any Federal program, familiarize yourself with the documentation requirements.

One of the key changes under the Uniform Guidance is that budget estimates alone do not qualify as support for charges to Federal programs. Estimates may be used, but the entity must perform an afterthe-fact review of charges made to the Federal Award, adjusting for actuals as necessary. This may be done through a time-study of those who charge time to the program.

Alternatively, one could directly allocate payroll costs based on

If you are responsible for grant management, bookmark the guidance (www.ecfr.gov), and refer to it often. Although you may have to reference the guidance occasionally, grant compliance is an open book test that you can pass.

Jessica is an audit partner with Vavrinek, Trine, Day & Co., LLP. She has been providing professional services to cities, counties, and special districts for over 12 years, including single audits for her municipal clients, as well as nonprofits and higher education entities. She also provides training and has assisted numerous clients with the implementation of new accounting standards, as well as implementation of the Uniform Guidance.

Subrecipient monitoring (2 CFR 200.331) – If you are a pass through entity (PTE), you are required to perform a risk assessment of all your subrecipients. The risk assessment should be customized based on the risk factors noted for each program where your entity is a PTE, should be documented, updated frequently, and used to develop appropriate subrecipient monitoring procedures performed across your entity. Other PTE requirements include: • Clear identification of award, CFDA number, Federal award date, reporting requirements, and close out terms to subrecipients at the time of award, • Indirect cost rate for the Federal award (including if de minimis rate is charged per 2 CFR 200.414) should be communicated to subrecipients, • Each disbursement to a subrecipient should identify the CFDA number and dollars under award.

• Cost Principles (2 CFR 200 Part 4xx – Subpart E) –A mustread section - there isn’t enough space to list them all, but some common changes are discussed below: • Indirect Facilities and Administration (F&A) costs (2 CFR 200.414) – The negotiated rates for indirect costs must be 27 CSMFO MAGAZINE JANUARY 2017

27 CSMFO MAGAZINE FEBRUARY 2017

CONFERENCE SAVE THE DATE

FEBRUARY 20 - 23

CSMFO RIVERSIDE 2018

28 CSMFO MAGAZINE FEBRUARY 2017

PRESIDENT-ELECT

Looking Towards 2018 Written By Margaret Moggia

F

Margaret Moggia, CPA, Chief Financial Officer, West Basin MWD

or those able to attend the Annual Conference in Sacramento, I hope you returned to your offices energized with new friendships, vendor contacts and a feeling that you benefited from the informational breakout sessions. Thank you to Drew Corbett and the Host Committee for bringing Sacramento to us along with the highly energized keynote speakers. It was awesome to see people talking throughout the three days about whether they are a circle, a squiggle, a triangle or a square. For those who know me, I am definitely a circle (however, I also have an inner square!).

I enjoy increasing the member experience and providing high-quality resources and training so we all can meet the demands of our individual organizations and professional roles.

As I enjoyed the conference, the questions were already swirling on what the 2018 Annual Conference in the historic Riverside will bring to this awesome association. I am excited to begin this journey along with the Host and Program Committees; to continue to bring high-quality training and meaningful networking to our

members. The process has already begun with listening to a debrief about the 2017 conference and tossing out ideas to celebrate next year’s locale. Countless decisions need to be made to enhance the conference experience and carry us into the future. Mark your calendar to attend February 20-23, 2018 at the Riverside Convention Center. We encourage all staff levels to attend!

At this year’s conference during the session, Leveraging Your CSMFO Benefits, there were two takeaways I want to share with you: First, when asked about the time commitment to be involved in CSMFO, panelist Bob Biery shared that there is no accounting for the time when you enjoy what you do. I could not agree more. I have actively served on multiple committees this past year, because I enjoy increasing the member experience and providing high-quality resources and training so we all can meet the demands of our individual organizations and professional roles.

Second, I loved moderator Bill Statler’s thought about getting involved. While we can create ways for you to share your interest, we respond best when we are asked. Bill then challenged the audience: “So this is my ask—get involved!”

How true this is! My “ask” was back at the 2005 Burlingame conference when I happened to walk past the committee meetings and Viki Copeland asked if I wanted to join the conversation about supporting Career Development. Thank you Viki, for inviting me.

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I understand that not all persons may see a role within CSMFO, but getting involved goes beyond serving on the Board or a committee. It is being there for your staff, sharing with a peer and always looking for continuous improvement. Or, perhaps it is sitting on an interview panel or sharing an RFP. That is why this association is amazing—we all strive for the betterment to serve in our role within our public agency.

As I look forward to my new role within the association, I encourage you to get involved. Let’s be a part of the next 60 years.

Looking towards 2018, Margaret Moggia

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JOB OPPORTUNITIES Capital and Grant Programs Analyst, Golden Gate Bridge HWY & Transportation Salary Range: $93,579.20 - $113,110.40 Application Deadline: Accountant I, Southern California Regional Rail Authority Salary Range: $58,322.00 - $91,119.00 annual Application Deadline: Financial Manager, MSMVCD Salary Range: $103,757 to $116,712 Application Deadline: 28-Mar-17 Principal Administrative Analyst, County of Calaveras Salary Range: $73,777.60 - $89,689.60 Application Deadline: 17-Mar-17 Finance Manager, Community Devel. Comm., County of Los Angeles Salary Range: $8,211 - $12,070/month Application Deadline: Chief Financial Officer, Mesa Water District Salary Range: $143,292 to $197,532 DOQ Application Deadline: 17-Mar-17

Payroll Technician, City of Emeryville Salary Range: $5,284-$6,423/month (3% COLA due on 7/1/17) Application Deadline: 3-Mar-17 Director of Financial Planning, City and County of San Francisco Salary Range: $122,070.00 - $155,766.00/year Application Deadline: 3/2/2017 17:00 Accounting Services Manager, City and County of San Francisco Salary Range: $113,672.00 - $145,106.00/year Application Deadline: 3/2/2017 17:00 Accounting Supervisor, Santa Margarita Water District Salary Range: $7,920.69 - $10,918.78/monthly Application Deadline: Open Until Filled Purchasing Manager, Modesto Salary Range: $6,711.57 - $8,158.59 Monthly Application Deadline: Tue. 02/21/17 5:00 PM Pacific Time Financial Services Analyst, Yolo County Salary Range: $85,545 - $103,978 Annually PLUS benefits Application Deadline: Friday, February 17, 2017

Controller, Goleta Water District Salary Range: $9,822 - $11,370/Month plus benefits Application Deadline: Open Until Filled - 3/13/2017

Accounting Supervisor, City of Roseville Salary Range: $7,107 to $9,524 monthly (26 pay periods annually) Application Deadline:

Finance Director, City of Tucson, AZ Salary Range: Negotiable Application Deadline: Friday, March 24, 2017

Finance Director, Ralph Andersen & Associates Salary Range: $141,544 to $180,650 Application Deadline: 13-Mar-17

Accounting Manager, Westminster Salary Range: $80,112 - $102,252 Application Deadline: 8-Mar-17

Accounting Services Division Manager, Prothman Company Salary Range: $98,633 - $126,464 Application Deadline: First review: March 19, 2017 (open until filled)

Accounting Technician (Confidential), City of Vista Salary Range: $4,068 - $4,945/monthly Application Deadline: 2/27/2017 Accounting Technician II, City of Half Moon Bay Salary Range: 4,376 - 5,317/mo Application Deadline: 17-Feb-17 Finance Manager, City of Cambell Salary Range: $9,626.93 ? $11,701.73 per month Application Deadline: Friday, March 3, 2017 Budget Manager, Davis Salary Range: $7,255.28 - $8,818.85 / Month Application Deadline: 3/14/2017 Chief Financial Officer, South Coast Water District Salary Range: $175,000 - $205,000 Application Deadline: 13-Mar-17 Budget Officer, Community Development Commission Salary Range: $113,112.00 - $166,308.00 Annually, DOQ Application Deadline: Apply Immediately. Recruitment will close without notice

ACCOUNTING TECHNICIAN I/II, Ad Club Advertising Salary Range: $4,984 - $6,021 Application Deadline: Financial Manager, Olivehurst Public Utility District Salary Range: $81,032.75 - $85,084.35 Application Deadline: 3/3/2017 Finance Director, Chino Hills Salary Range: $11,774-$15,027/month Application Deadline: 17-Mar-17 Chief Deputy Auditor-Controller, Ventura County Salary Range: $101,661.96 - $142,340.70 annually, plus benefits Application Deadline: 2/28/2017 Revenue Supervisor, Costa Mesa Salary Range: $6,093 ? $8,166 per month, DOQ Application Deadline: 3-Mar-17

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32 CSMFO MAGAZINE FEBRUARY 2017