Basic Finance with CATMAn

Keeping Your Hometown HealthyArkansas Department of Health

Basic FinanceBasic Financewith CATMAnwith CATMAn

An overview of the An overview of the Office of FinanceOffice of Finance

Providers:Providers: Bob Bennett, Bob Bennett, Diane Smithson, and Diane Smithson, and Doug HallDoug Hall

Supervision 101: Update Module II



Compliance BranchCompliance Branch

CAFR Section:CAFR Section:

Is responsible for preparing the year-end Is responsible for preparing the year-end closing book for the State of Arkansas’ closing book for the State of Arkansas’ Comprehensive Annual Financial Report. Comprehensive Annual Financial Report. During the year, a review of all financial During the year, a review of all financial transaction in AASIS occurs to ensure they transaction in AASIS occurs to ensure they are recorded in compliance with rules and are recorded in compliance with rules and regulations for government agencies. regulations for government agencies.


Compliance Branch (cont’d)Compliance Branch (cont’d)

Cost Allocation Section:Cost Allocation Section:

Is responsible for ensuring that ADH is Is responsible for ensuring that ADH is accurately allocating it’s multiple funding accurately allocating it’s multiple funding sources to the appropriate programs within sources to the appropriate programs within the department in compliance with rules and the department in compliance with rules and regulations for government agencies. regulations for government agencies.


Compliance Branch (cont’d)Compliance Branch (cont’d)

This is achieved through multiple activities This is achieved through multiple activities including but not limited to the including but not limited to the administration of administration of CATMAnCATMAn (Cost Allocation (Cost Allocation Time Management Application) and the Time Management Application) and the Coding Validation Table.Coding Validation Table.


Accounts Payable BranchAccounts Payable Branch Payroll/Benefits SectionPayroll/Benefits Section::

Is responsible for verification of payroll Is responsible for verification of payroll transactions and employee benefits.transactions and employee benefits.

New employee orientation sharing benefit New employee orientation sharing benefit opportunities.opportunities.

Adjust existing employees benefits as requested.Adjust existing employees benefits as requested.Training for timekeepers and time-approvers.Training for timekeepers and time-approvers.


Accounts Payable Branch Accounts Payable Branch (cont’d)(cont’d)

Payables SectionPayables Section::

Is responsible for the review and verification Is responsible for the review and verification of documentation submitted for an issuance of of documentation submitted for an issuance of a state warrant.a state warrant.

Vendor Payables – vendor payment.Vendor Payables – vendor payment.Travel Reimbursement – employee reimbursement Travel Reimbursement – employee reimbursement

(TR-1) and petty cash reimbursement.(TR-1) and petty cash reimbursement.


Managerial Accounting Managerial Accounting BranchBranch

Banking SectionBanking Section::

The primary role is to receipt, record, and The primary role is to receipt, record, and deposit Agency revenues in an accurate and deposit Agency revenues in an accurate and timely manner. timely manner.

This section also monitors revenue compared This section also monitors revenue compared to projections and performs the daily banking to projections and performs the daily banking responsibilities.responsibilities.


Managerial Accounting Managerial Accounting (cont’d)(cont’d)

Budget SectionBudget Section::

Is responsible for managing the Department’s Is responsible for managing the Department’s appropriation levels by preparing and appropriation levels by preparing and reviewing monthly budget and expenditure reviewing monthly budget and expenditure reports. reports.

Coordinates input for the development of Coordinates input for the development of the Agency’s biennial and annual the Agency’s biennial and annual budgets.budgets.


Managerial Accounting Managerial Accounting (cont’d)(cont’d)

Grants Management / Reporting SectionGrants Management / Reporting Section::

Performs daily letter of credit cash draws for Performs daily letter of credit cash draws for federal grant expenditures in accordance with federal grant expenditures in accordance with state and federal guidelines ensuring state and federal guidelines ensuring consistency with state laws, regulations and consistency with state laws, regulations and federal grantors funding requirements. federal grantors funding requirements.

Prepare and submit timely federal Prepare and submit timely federal financial reports. financial reports.


Accounts Receivable SectionAccounts Receivable Section

Accounts Receivable SectionAccounts Receivable Section::

Is engaged in the collection of funds owed to Is engaged in the collection of funds owed to the Agency. the Agency.

Licensing Office – receives payment from license Licensing Office – receives payment from license issuance and mandatory fees. Includes things issuance and mandatory fees. Includes things such as Plumbing/HVACR license and plan review.such as Plumbing/HVACR license and plan review.


Accounts Receivable Section Accounts Receivable Section (cont’d)(cont’d)

Third Party ReimbursementThird Party Reimbursement::

Billing agent for all Medicaid/Medicare Billing agent for all Medicaid/Medicare services and flu activity performed in the services and flu activity performed in the Local Health Units.Local Health Units.


Accounts Receivable Section Accounts Receivable Section (cont’d)(cont’d)

Miscellaneous ReceivablesMiscellaneous Receivables::

Billing agent for miscellaneous revenues due Billing agent for miscellaneous revenues due to the agency through contracts, MOAs and to the agency through contracts, MOAs and various billing sources.various billing sources.

CollectionsCollections::

Works to collect outstanding debt due the Works to collect outstanding debt due the agency including civil penalties and agency including civil penalties and insufficient checks.insufficient checks.


Procurement BranchProcurement BranchPurchasing SectionPurchasing Section::

Is responsible for commodity Is responsible for commodity contracts/purchase orders, technical contracts/purchase orders, technical services and property leases.services and property leases.

Contract Support SectionContract Support Section::

Is responsible for professional services Is responsible for professional services and sub-grant contracts/purchase and sub-grant contracts/purchase orders.orders.


Procurement BranchProcurement Branch(cont’d)(cont’d)

Inventory Control SectionInventory Control Section::

Is responsible for management of agency Is responsible for management of agency assets, property management and assets, property management and coordination for items to Marketing & coordination for items to Marketing & Redistribution (M&R).Redistribution (M&R).


Central SupplyCentral Supply Central Supply is the warehouse for Central Supply is the warehouse for

clinical and office supplies used by the clinical and office supplies used by the various programs in the Agency.various programs in the Agency.

Courier ServiceCourier Service::

Managed through Central Supply for the Managed through Central Supply for the delivery of goods and lab specimens to and delivery of goods and lab specimens to and from the local health units.from the local health units.


Central SupplyCentral Supply(cont’d)(cont’d)

Copy CenterCopy Center::

Reproduce stock forms and special projects Reproduce stock forms and special projects as requested by the programs.as requested by the programs.

GarageGarage::

Responsible for regular maintenance and Responsible for regular maintenance and repair on state vehicles.repair on state vehicles.


Budget 101Budget 101General DefinitionsGeneral Definitions

AASISAASIS::

Arkansas Administrative Statewide Arkansas Administrative Statewide Information System. Information System.

AASISAASIS is the software application that most is the software application that most state agencies utilize for all financial and state agencies utilize for all financial and personnel transactions.personnel transactions.


Budget 101 (cont’d)Budget 101 (cont’d)General DefinitionsGeneral Definitions

PBASPBAS::

Performance Budgeting and Accountability Performance Budgeting and Accountability System. System.

This is the system where all budgets are This is the system where all budgets are entered when submitting the annual or entered when submitting the annual or biennial budget requests through DFA. Once biennial budget requests through DFA. Once all numbers are verified and approved all numbers are verified and approved this data is uploaded into AASIS.this data is uploaded into AASIS.


State Fiscal YearState Fiscal Year::

The state cycle runs from July 1The state cycle runs from July 1stst through through June 30June 30thth of the following year. of the following year.

SFY11 will run from July 1, 2010 through SFY11 will run from July 1, 2010 through June 30, 2011.June 30, 2011.



Grant Fiscal YearGrant Fiscal Year::

Grant cycle dates are established by the Grant cycle dates are established by the federal granting agency.federal granting agency.

ADH has grants ending in almost every month ADH has grants ending in almost every month and multiple grants in some months. A grant and multiple grants in some months. A grant cycle typically runs only one year, however, cycle typically runs only one year, however, some grants are for two or more years.some grants are for two or more years.



AppropriationAppropriation::

The legislative authority to expense funds.The legislative authority to expense funds.

Authority is given during the legislative Authority is given during the legislative session through an appropriation act.session through an appropriation act.



FundingFunding::

The actual funds or money the agency has The actual funds or money the agency has to expense.to expense.

The appropriation must never exceed the The appropriation must never exceed the funding. However, some instances the funding. However, some instances the funding exceeds the appropriation.funding exceeds the appropriation.



A Certification of Income (COI)A Certification of Income (COI)::

Is completed during the budget process to Is completed during the budget process to inform the Office of Finance the amount of inform the Office of Finance the amount of anticipated revenue expected during the state anticipated revenue expected during the state fiscal year.fiscal year.



BudgetBudget::The combination of appropriation and The combination of appropriation and funding each Section and/or Center is funding each Section and/or Center is allowed to expense.allowed to expense.

For example, if a Section had $100 in For example, if a Section had $100 in appropriation and $90 funding, the budget appropriation and $90 funding, the budget would be $90.would be $90.

If a Section had $80 in appropriation and If a Section had $80 in appropriation and $110 in funding, the budget would be $110 in funding, the budget would be $80. $80.



Budgets are completed every year according Budgets are completed every year according to the appropriation act passed during the to the appropriation act passed during the previous legislative session.previous legislative session.

Every two years a Biennial Budget is Every two years a Biennial Budget is submitted requesting agency needs for the submitted requesting agency needs for the next legislative session that will cover two next legislative session that will cover two fiscal years. fiscal years.



Fund CenterFund Center::A three character reference. The fund A three character reference. The fund center is how the legislature disburses center is how the legislature disburses appropriation. The main fund center for appropriation. The main fund center for Health is Health is 34P34P..

FundFund::Is tied to a fund center. Health’s main Is tied to a fund center. Health’s main fund is fund is PHD0000PHD0000..



Cost CenterCost Center::

A six digit number which represents a A six digit number which represents a work unit or section. The cost center is work unit or section. The cost center is linked to a fund center and fund.linked to a fund center and fund.



Internal OrderInternal Order::

A nine character field which represents a A nine character field which represents a funding source.funding source.

For example, ASGR00XX represents pure general For example, ASGR00XX represents pure general revenue funding. An internal order ending in XX is revenue funding. An internal order ending in XX is typically a non-federal funding source.typically a non-federal funding source.

An internal order ending with a number as in 10 An internal order ending with a number as in 10 or 11 is usually a federal grant and the number or 11 is usually a federal grant and the number represents the federal grant cycle.represents the federal grant cycle.



Commitment ItemCommitment Item::

The type of expenditure. Every expenditure The type of expenditure. Every expenditure is categorized into a commitment item. is categorized into a commitment item.

Below is a general listing of commitment Below is a general listing of commitment items:items:

CI00 – Regular SalariesCI00 – Regular SalariesCI01 – Extra Help SalariesCI01 – Extra Help SalariesCI02 – Maintenance and Operations (M&O)CI02 – Maintenance and Operations (M&O)



Additional Commitment items:Additional Commitment items:

CI03 – FringeCI03 – Fringe CI04 – Grants and Aids typically sub-grant CI04 – Grants and Aids typically sub-grant

payments payments CI09 – Conference Fees and TravelCI09 – Conference Fees and Travel CI10 – Professional Fees (professional services CI10 – Professional Fees (professional services

contracts) contracts) CI11 – Capital Outlay (asset purchases)CI11 – Capital Outlay (asset purchases)



General Ledger (GL) CodeGeneral Ledger (GL) Code::

Is the code within the commitment item Is the code within the commitment item which specifies the type of expenditure.which specifies the type of expenditure.

For example, CI02 is for M&O expenditures For example, CI02 is for M&O expenditures but the GL may be 5090006000 for Office but the GL may be 5090006000 for Office Supplies. Supplies.

Every GL code is “tied” to a commitment Every GL code is “tied” to a commitment item.item.



Additional General Ledger (GL) CodeAdditional General Ledger (GL) Code::

When purchasing goods and services, an When purchasing goods and services, an appropriate GL code and commitment item appropriate GL code and commitment item must be used.must be used.

In the state budget system (PBAS) the GL In the state budget system (PBAS) the GL code is also known as the cost element.code is also known as the cost element.



FITS (Financial Information Tracking FITS (Financial Information Tracking System):System):

Internal ADH system designed to monitor Internal ADH system designed to monitor budget vs. expenditures and commitments by budget vs. expenditures and commitments by internal order. internal order.

Information reported in FITS can be found in Information reported in FITS can be found in Business Objects (ADH’s main database Business Objects (ADH’s main database reporting program)reporting program)



How does all of this fit How does all of this fit together?together?

State Legislature approves ADH's budget State Legislature approves ADH's budget based on PBAS and DFA submission based on PBAS and DFA submission providing us appropriation for the providing us appropriation for the biennium.biennium.

The appropriation levels are then loaded The appropriation levels are then loaded into AASIS.into AASIS.


The program wants to purchase a widget.The program wants to purchase a widget.

A purchase requisition must be entered A purchase requisition must be entered into AASIS.into AASIS.

A cost center and internal order are entered.A cost center and internal order are entered. A material code for a widget is also entered A material code for a widget is also entered

which defaults to a specific commitment which defaults to a specific commitment item (CI) and GL code.item (CI) and GL code.


(cont’d)(cont’d)


Before the user can save the requisition, Before the user can save the requisition, AASIS checks to determine if there is enough AASIS checks to determine if there is enough appropriation in the fund center and CI to appropriation in the fund center and CI to support the purchase.support the purchase.

When the requisition is saved, the When the requisition is saved, the appropriation is encumbered or committed.appropriation is encumbered or committed.




The requisition must be approved (released) in The requisition must be approved (released) in AASIS.AASIS.

A purchase order is created and approved. A purchase order is created and approved. The widget is ordered by procurement.The widget is ordered by procurement.

The vendor delivers the widget and invoices The vendor delivers the widget and invoices ADH.ADH.

The program verifies receipt of the widget The program verifies receipt of the widget and performs a goods receipt in AASIS.and performs a goods receipt in AASIS.




The Payables Section receives the invoice, The Payables Section receives the invoice, reviews and post in AASIS for payment.reviews and post in AASIS for payment.

The Grants Management Section (federal The Grants Management Section (federal funds) or Banking Section verify the funds are funds) or Banking Section verify the funds are available to issue a state warrant.available to issue a state warrant.

The funds are “drawn” then deposited.The funds are “drawn” then deposited. A state warrant is then issued to pay the A state warrant is then issued to pay the

vendor for the widget.vendor for the widget.




Who watches the budget?Who watches the budget?

It is the responsibility of the program or It is the responsibility of the program or section to stay within their specific section to stay within their specific budgeted amount. budgeted amount.

AASIS reports reflecting expenditures AASIS reports reflecting expenditures along with program tracking and will let along with program tracking and will let you know where you stand regarding your you know where you stand regarding your specific budget. specific budget.


It is important to It is important to monitor monthly monitor monthly and watch all and watch all expenditures. expenditures.

Who watches the budget?Who watches the budget?


Training OpportunitiesTraining Opportunities

A-Train CoursesA-Train Courses::

Road to ADH Travel . . . . . . . . . . . . 1015364Road to ADH Travel . . . . . . . . . . . . 1015364 Travel Fraud Indicators . . . . . . . . . .1016579Travel Fraud Indicators . . . . . . . . . .1016579 Vendor Payables Policy Training . . 1017474Vendor Payables Policy Training . . 1017474


Basic FinanceBasic Finance

Questions?Questions?


Break TimeBreak TimeTen (10) minutesTen (10) minutes


Cost Allocation for Cost Allocation for Supervisor’sSupervisor’s

A guide to understanding reportsA guide to understanding reports

and how they are used throughoutand how they are used throughout

the Health Department.the Health Department.


Why Cost Allocation is Why Cost Allocation is ImportantImportant

WE HAVE NO CHOICE!!!!WE HAVE NO CHOICE!!!!

In order to continue receiving federal funding, In order to continue receiving federal funding, we are required to have an approved Cost we are required to have an approved Cost Allocation Plan.Allocation Plan.



Help avoid audit findings and potential Help avoid audit findings and potential repayment of federal dollars.repayment of federal dollars.

Cost Allocation is very important to federal Cost Allocation is very important to federal agencies who provide funding to the agencies who provide funding to the Department of HealthDepartment of Health.. These agencies want to make sure their funding is These agencies want to make sure their funding is

being used to support the programs they specify. being used to support the programs they specify. If we are unable to prove this, there is the If we are unable to prove this, there is the

potential that federal agencies will require us potential that federal agencies will require us to repay funding they feel was not properly to repay funding they feel was not properly utilized.utilized.



Improve accountability for time worked by Improve accountability for time worked by employees.employees.

Gives supervisors an added tool to ensure Gives supervisors an added tool to ensure employees are working on appropriate employees are working on appropriate programs.programs.



Support ADH’s efforts to secure additional Support ADH’s efforts to secure additional funding and positions from the State Legislature funding and positions from the State Legislature and other funding sources.and other funding sources.

Programs may not be properly supported by their Programs may not be properly supported by their current funding. Cost Allocation will help support current funding. Cost Allocation will help support this by giving us a total cost of a program.this by giving us a total cost of a program.



Benefit fee-based programs and support Benefit fee-based programs and support fee increases.fee increases.

There may be instances where a fee based There may be instances where a fee based program is not being supported properly by program is not being supported properly by the fees it collects. Through cost allocation, the fees it collects. Through cost allocation, we will be able to provide a cost for we will be able to provide a cost for performing a service which may performing a service which may support fee increases.support fee increases.


Direct Costs vs. Indirect Direct Costs vs. Indirect CostsCosts

Direct CostDirect CostDirect Costs are those costs directly related to Direct Costs are those costs directly related to the principal activity of the business. the principal activity of the business.

Ex. – Costs needed to directly operate a program Ex. – Costs needed to directly operate a program and the labor costs associated with the work and the labor costs associated with the work performed to complete the program objectives.performed to complete the program objectives.


Direct Costs vs. Indirect Direct Costs vs. Indirect Costs (cont’d)Costs (cont’d)

Indirect CostIndirect CostIndirect Costs represent the costs of doing Indirect Costs represent the costs of doing business that are not readily identified with a business that are not readily identified with a particular grant, contract, project function or particular grant, contract, project function or activity, but are necessary for the general activity, but are necessary for the general operation of the organization and the operation of the organization and the conduct of activities it performs.conduct of activities it performs.


Direct Costs vs. Indirect Direct Costs vs. Indirect Costs (cont’d)Costs (cont’d)

Indirect Cost Examples:Indirect Cost Examples:

Salaries and Benefits of . . . Salaries and Benefits of . . .

Office of Administration Staff including, Office of Administration Staff including, Finance and IT, Finance and IT, Utilities, Utilities, T1 lines for Internet connection, etc.T1 lines for Internet connection, etc.


Entering Leave for Your Entering Leave for Your EmployeesEmployees

As a supervisor, you have the ability to As a supervisor, you have the ability to enter leave time for employees under your enter leave time for employees under your supervision.supervision.

This is a function that should only be used This is a function that should only be used when an employee is on extended leave when an employee is on extended leave who is unable to enter their own time who is unable to enter their own time within the 4 week time frame within the 4 week time frame available.available.


Entering Leave for Your Entering Leave for Your EmployeesEmployees

Instructions on how Instructions on how to enter leave time to enter leave time for your employees for your employees can be found on can be found on the CATMAn the CATMAn Intranet site.Intranet site.


Reports Available for ReviewReports Available for Review

Each center has access to CATMAn Each center has access to CATMAn information located in Business Objects information located in Business Objects that can be used to monitor how its that can be used to monitor how its employee’s activity is being allocated.employee’s activity is being allocated.

Business Objects is a database reporting Business Objects is a database reporting program that allows ADH to combine multiple program that allows ADH to combine multiple information sources for reporting information sources for reporting purposes. purposes.


Reports Available for ReviewReports Available for Review

The Cost Allocation Section will provide quarterly The Cost Allocation Section will provide quarterly reports that compare reports that compare CATMAn CATMAn data to AASIS data to AASIS expense data as well as budget data.expense data as well as budget data.


Resources AvailableResources Available

The The CATMAn CATMAn intranet site has intranet site has multiple tools multiple tools available to assist available to assist you.you.

Documents

Basic Finance with CATMAn