Monthly Financial Status Reports
Each DSP is required to submit a Monthly Financial Status Report (FSR) to the Partnership Contracts and Accounting Manager, detailing expenditures for the previous month. (The FSR serves as both a monitoring tool for DSPs and the Partnership and as a request for reimbursement of funds expended). In order to maintain cash flow, the Partnership reimburses activity expenditures for a month at the beginning of the following month.
Monthly FSRs must be received by the 10th day of the following month in order to avoid a delay in processing and payment. When the due date falls on a weekend or a holiday, the forms should be submitted on the last working day prior to the due date. An FSR for the first month’s activity (generally July) needs to be submitted by the deadline even if the DSP’s contract has not yet been executed.
The Monthly Financial Status Report (FSR) is an Excel workbook which contains a worksheet with instructions for completing the FSR each month, as well as a sample worksheet for each month. The DSP must use the current fiscal year’s format for reporting expenditures to the Partnership.
As a general rule, there should be no significant negative amounts in the “Unexpended Budget” column of an FSR. The exception to this rule is when budget changes have been approved verbally by the Program Coordinator, as discussed in Section IV.
Submission
The completed FSR must be submitted in soft copy via email sent to the Partnership by the 10th day of the month to request reimbursement of prior month expenses. Prior to submitting the July FSR, the person authorized to act as the Contract Administrator for the DSP will complete the FSR Electronic Submission Authorization form. This form authorizes the Partnership to accept a “soft copy” of the FSR in lieu of a signed original. The FSR should be emailed to the Partnership’s Contracts and Accounting Manager.
If the FSR Electronic Submission Authorization form is not signed by a DSP, then the DSP must submit signed monthly FSRs in hard copy.
Amendments
In the event that a previously submitted FSR needs to be changed (amended), the change should be run through the current month’s FSR. An explanation should accompany the FSR describing the change, the amount, and how it was calculated. The Partnership strongly encourages each DSP to regularly review their expenditures and FSRs to ensure accuracy.
Cash Basis of Accounting
The North Carolina Department of Human Resources, Division of Child Development requires that FSRs for Smart Start funds be completed on the cash basis of accounting. This means that expenses must be reported on the FSR in the period paid, regardless of when the goods or services were actually received. For DSPs who normally maintain accounting records on an accrual basis or modified cash basis, it will be necessary to convert Smart Start expenses to cash basis for purposes of monthly FSRs. (Cash-basis project expenditures = expenses for this project as recorded in accounting records - expenses for this project included in accounts payable at end of month + expenses for this project included in accounts payable at end of previous month.) Worksheets showing the conversion from the DSP’s ordinary accounting records to cash basis must be maintained as an audit trail.
Year-End FSRs
Since the Partnership is required to operate on the cash basis of accounting, funds for the current fiscal year may not be disbursed after the last day of the fiscal year (June 30). The Partnership asks DSPs to estimate expenses for the month of June. The Partnership pays an amount for anticipated expenses to each DSP in June to cover all expenditures through June 30. The FSRs for May and June require a few extra steps than the other months. Detailed instructions are outlined in the Monthly Financial Status Report (FSR).
Mid-Year Review and Reversions
In order to maximize the use of Smart Start funds and to monitor DSP spending for the first half of the year, DSPs are asked to submit a Grantee Mid-Year Explanation when actual expenditures for July-December are less than 50% of the budget for the year. The purpose of the explanation is to make certain that all budgeted funds will be spent by June 30. If there are any funds which will not be used by a DSP, the appropriate budget changes need to be made as soon as possible so that the unused funds (reversions) can be reallocated to other DSPs. Although the final NCPC deadline for budget changes is May 15, it is very important that the Partnership be made aware of any reversions as early as possible to allow sufficient time for the funds to be reallocated. The current deadline for funds to be reallocated to subsidy is April 15.
Quarterly Revenue Reports
The N.C. state legislature imposes stringent requirements on the Smart Start activity to demonstrate communities’ support for Smart Start-funded activities. Community support is measured by the amount of cash and in-kind contributions made to the individual local projects by individuals or organizations other than state government. It is imperative that DSPs actively seek cash and in-kind contributions and adequately document all such contributions received. (see Tips on Documenting In-Kind Contributions.) Quarterly reports of contributions received are required to be submitted to the Partnership by:
- Wednesday, October 10
- Thursday, January 10
- Thursday, April 10
- Thursday, July 10
When the due date falls on a weekend or a holiday, the forms should be submitted on the last working day prior to the due date. There are three types of reports of contributions that must be submitted.
In-kind contributions to DSPs include a variety of goods and services. Services provided by non-professional volunteers may be counted towards the matching requirement. Non-professional volunteer services are valued at the North Carolina statewide average wage rate, which for FY07-08 is $17.93 per hour. All such contributions should be reported on the Quarterly Volunteer Contributions Report. As documentation of non-professional volunteer services provided to a DSP, one of two forms should be used, based on DSP preference: If the DSP prefers to compile a single report for each volunteer for each quarter, the DSP Non-Professional Volunteer Voucher should be used. Alternatively, if the DSP prefers to compile a single report for each volunteer event (meeting of volunteer board, staging of annual conference, etc.), the DSP Non-Professional Volunteer Event Roster should be used.
Program Income
Any income that the DSP receives as a result of providing a Smart Start-funded service is considered program income. Any program income received, such as from participation fees, interest earned on Smart Start funds, proceeds from sale of assets purchased with Smart Start funds (requires the Partnership board approval prior to the sale), etc., must be either paid to the Partnership or used to fund additional expenses of the Smart Start activity. (Note that program income is not the same as contributions.)
Program income must be reported to the Partnership quarterly on or before the 10th day of the new quarter (see Quarterly Program Income Report). When the due date falls on a weekend or a holiday, the form should be submitted on the last working day prior to the due date.
For FY07-08, activity income is counted towards the Smart Start cash matching requirement. Note that program income must be expended in the same fiscal year it is earned to avoid reversion to the Partnership. Employees of DSPs who handle cash must be bonded.
Quarterly Revenue Worksheet
Preparation of the quarterly revenue reports can be confusing – it may be helpful to keep in mind that all expenses of Smart Start activities are to be reported to the Partnership as either expenses funded by Smart Start (on the Monthly Financial Status Report (FSR)); expenses funded by cash or in-kind contributions (on the Quarterly Cash Contributions Report and Quarterly In-Kind Contributions Report); or as expenses funded by program income (on the quarterly program income report).
This concept underlies the Quarterly Revenue Worksheet. The revenue worksheet is an optional worksheet that may be useful in preparing the quarterly revenue reports. See a sample Quarterly Revenue Worksheet.
Quarterly Reports Checklist
The Quarterly Reports Checklist is used as a tool to assist DSPs in preparing the quarterly reports package to submit to the Partnership. The completed checklist should be submitted with quarterly reports (revenue and program). See Appendix 15 for an illustration of the checklist. The Activity Reports on the checklist are submitted by email to the Program Coordinator. The Revenue Reports on the checklist must be signed and the hard copies submitted to the Finance Director along with all supporting documentation.
Please see Summary Instructions for Completing Quarterly Revenue Reports. This may be useful as a guide when preparing the reports.
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