3100  Accounting System Requirements

Notes

• Fund accounting is a system in which separate records are maintained for each funding source. For example, the Family Violence Program contract reimburses the nonresidential center for specific line-item costs.
• The nonresidential center must record all Family Violence Program contract payments and expenditures charged to the contract in a separate fund.
• Fund accounting does not require that the center maintain a separate bank account for Family Violence Program contract funds.

Suggested Practice

None

3200  Cost Allocation Plan

Law

• The Office of Management and Budget (OMB) Circular A-122
• Uniform Grant Contract Management Standards (UGMS)

Notes

• Nonresidential center staff whose positions are funded by more than one funding source must record the actual time spent on each funded activity; however, funding for administrative staff may be allocated under an allocation formula. Time sheets and/or the allocation formula will be reviewed as part of the HHSC Family Violence Program fiscal monitoring visit.
• Cost allocation is the process by which a nonresidential center divides its indirect costs (that is, administrative salaries, fundraising and other general expenses) between its various funding sources, including unrestricted funds, in order to determine the appropriate amount to charge each grant, contract and/or program.
• Cost allocation plans will be reviewed before contract monitoring.
• Administrative (indirect) costs are functional costs that relate to the specific management of the nonresidential center program, such as salary costs of a general secretary, an accountant/bookkeeper, the executive director and the office space and supplies required to support their work. Unless these costs can be directly charged to the nonresidential center contract based on direct service, they should be allocated proportionately to all of the organization's programs, including its fundraising program.
  • Time sheets reflect actual time the employee worked under each grant or contract, if the employee is paid out of more than one grant or contract (for example, an employee who works under both family violence and sexual assault contracts, or more than one family violence contract).
  • More information on cost allocation can be found in OMB Circular A-122. To reference the circular, go to: www.whitehouse.gov/omb/circulars/a122/a122.html.
  • More information on cost allocation also can be found in the UGCMS. To reference UGCMS, go to: http://tlo2.tlc.state.tx.us/statutes/docs/GV/content/htm/gv.007.00.000783.00.htm.
• For more information regarding cost allocation methodology requirements of nonresidential centers, see the HHSC Family Violence Program contract, Article 13, Section 13.06(r) and (u).

Suggested Practice

None

3300  Accounting Methods

• Double Entry Basis Accounting — A method of bookkeeping that is self-balancing and that assures mathematical accuracy of the bookkeeping work. It is based on the theory that every financial transaction affects and is recorded on two or more accounts, each one either increased or decreased. There are two sides to recording a transaction: a debit and a credit.
• Accrual Basis Accounting — Revenue and expenses are related to and identified with specific time periods (for example, a month or a year) when the revenue was actually earned and the expenditures actually incurred. Therefore, the organization records revenue at the time it obtains an unqualified right to record them and records expenses at the time it incurs a clear obligation to pay them. This is regardless of the timing of the actual receipt or payment of monies. Generally, accrual basis is the recommended method of accounting.
• Cash Basis Accounting — Allows for recording and reporting revenue (only when received in cash) and expenses (only when paid in cash).
• Modified Accrual (Cash Basis Accounting – Accrual Basis Reporting) — This approach is used by many nonprofit organizations and combines the two methods outlined above. The organization keeps its books on a cash basis during the year but makes the necessary adjustments to record the accruals for reporting purposes at year-end. These adjustments are then reversed as the first transaction of the new year. This method also allows for preparation of quarterly or monthly reports on a cash basis and then converting to an accrual basis for year-end reporting.

3400  Required Insurance Coverage

Notes

• HHSC requires that centers have the following types of insurance:
  • standard workers’ compensation,
  • automobile liability, and
  • comprehensive liability insurance including:
    • bodily injury coverage of $100,000 per each occurrence, and
    • property damage coverage of $25,000 per each occurrence.
• For more information about HHSC insurance requirements, see the HHSC Family Violence Program contract, Article 13, Sections 13.05 and 13.06(n).

Suggested Practice

None

3500  Nonresidential Center Budget

Notes

• HHSC requires an annual operating budget for all of the nonresidential center's family violence program services required by the HHSC family violence contract and the nonresidential center rules, including any funding source that supports the center’s family violence services.
• The nonresidential center's annual operating budget includes all monetary and in-kind revenue and expenditures necessary to provide nonresidential center family violence services.
• The nonresidential center's annual budget serves two important purposes:
  • First, the budget is the monetary expression of the nonresidential center’s board of directors' annual service goals.
  • Second, it is the nonresidential center's operating guide for measuring the actual cost of service to estimated cost. In addition, the annual budget should be reviewed to ensure that the percentage of nonresidential center administrative (indirect) costs to direct service costs is reasonable. Direct service costs for the nonresidential center may include, but are not limited to, nonresidential center rent, utilities and staff salaries.
• To calculate the center’s total administrative cost percentage, the center can use its Internal Revenue Service Form 990 in the following way: Add Line 14 (Management and General) to Line 15 (Fundraising) and divide by Line 12 (Total Revenue). This will equal the center’s total administrative cost percentage.
• For more information regarding annual operating budget requirements of nonresidential centers, see the HHSC Family Violence Program contract, Article 13, Section 13.06(j) and (o).

Suggested Practice

None

3600  Contribution

3610  Cash and In-kind Contributions and Matching Requirements

Law

• §379.1702 Cash/In-Kind Match
• Family Violence Prevention and Services Act (FVPSA) Federal Regulation
• Uniform Grants and Contract Management Standards (UGCMS)
• Office of Management and Budget (OMB) Circular A-122

Notes

• Nonresidential centers that receive federal funds under the FVPSA are required to provide matching funds, either cash, in-kind or a combination. The FVPSA is located in U.S. Code Title 42, Chapter 110. To reference FVPSA, go to: http://frwebgate.access.gpo.gov/cgi-bin/usc.cgi?ACTION=BROWSE&TITLE=42USCC110.
• The HHSC Family Violence Program will inform the nonresidential center at the beginning of each fiscal year:
  • if the nonresidential center receives federal funds under the FVPSA;
  • the amount of match based on federal grant requirements; and
  • what the required percentage of the match is.
• For contracting purposes, HHSC permits the family violence nonresidential center to include cash and/or in-kind contributions of goods and services when calculating yearly operating costs.
• The nonresidential center does not have to provide a match for state funds allocated by the HHSC Family Violence Program.
• OMB Circular A-122 and UGCMS require that the value of a non-cash donation be based on the current market value. For a service, this means the price the nonresidential center would pay to have this person perform this service. For goods, this means the price the nonresidential center would have to pay for the item in its present condition (for example, new, used, damaged, etc.)
  • To access information regarding A-122, go to www.whitehouse.gov/omb/circulars/a122/a122.html.
  • To access information regarding UGCMS, go to http://tlo2.tlc.state.tx.us/statutes/docs/GV/content/htm/gv.007.00.000783.00.htm.
• Volunteer time, as well as hours worked by unpaid board members, may be counted as an in-kind donation. However, documentation of their time must be maintained, just as it is for paid employees. The following websites can provide assistance in estimating the current market value of volunteer time:
  • www.independentsector.org/programs/research/volunteer_time.html.
  • http://www.bls.gov/bls/blswage.htm.
• For more information regarding cash and in-kind contributions and match requirements of nonresidential centers, see the HHSC Family Violence Program contract, Article 13, Section 13.06(o)-(q).

Suggested Practices

• It is recommended that the nonresidential center develop a fiscal procedure to identify and designate cash/in-kind donations to particular grants and/or contracts. This match designation will ensure that a donation is not used for more than one required match.
• It is recommended that a nonresidential center have three people (or at a minimum two) present to ensure a separation of accounting duties when handling monetary transactions.

3700  Reporting and Payment

Law

• Uniform Grants and Contract Management Standards (UGCMS)
• Office of Management and Budget (OMB) Circular A-122

Notes

• As stipulated in the contract between HHSC and the nonresidential center, failure to submit the following is justification for withholding payment:
  • statistical information;
  • monitoring report responses;
  • quarterly budget reports; or
  • any other required documents.
• For more information regarding reporting and payment requirements of nonresidential centers, see the HHSC Family Violence Program contract, Article 9 and Article 13, Section 13.06(t)–(y).
• Only those costs allowable under the UGCMS and any applicable federal cost principles are eligible for reimbursement. For the nonprofit nonresidential center, applicable cost principles are stated in OMB Circular A-122.
• To reference the A-122 Circular, go to www.whitehouse.gov/omb/circulars/a122/a122.html.
• To reference the UGCMS, go to http://tlo2.tlc.state.tx.us/statutes/docs/GV/content/htm/gv.007.00.000783.00.htm.

3710  Budget Revisions

Notes

• HHSC Family Violence Program will not accept budget revisions 30 days after the close of the contract fiscal year.
• Because centers can only charge HHSC for costs approved in the HHSC Family Violence Program budget, centers should review program budgets on a regular basis to ensure funds are being spent appropriately and if needed, a budget revision may be submitted throughout the contract year until Sept. 30 (if revision falls under the threshold of 5 percent or $5,000 of approved budget).
• For more information regarding budget revisions of nonresidential centers contract budgets, see Item 2430, Budget Revision, of this handbook and the HHSC Family Violence Program contract, Article 13, Section 13.06(j).

Suggested Practice

None

3720  Monthly Reporting and Payments

Notes

• HHSC Family Violence Program Monthly Reimbursement Request must be submitted by the nonresidential program before payment voucher may be processed.
• HHSC will process a payment voucher to reimburse the nonresidential center one-twelfth of the contract amount if the center meets the requirements of the contract.
• For more information regarding monthly reporting and payment of nonresidential centers, see the HHSC Family Violence Program contract, Article 13, Section 13.06(t)–(u).

Suggested Practice

None

3730  Quarterly and Annual Reporting

Law

Human Resources Code Title II, §51.005(b)(1)

Notes

• The nonresidential center must make a quarterly and annual financial report on a form prescribed by the department. To reference the code, go to: http://tlo2.tlc.state.tx.us/statutes/hr.toc.htm.
• Nonresidential center budget reports are due:

  First quarter	Dec. 30
  Second quarter	March 30
  Third quarter	June 30
  Annual	Oct. 15

• For more information regarding monthly reporting and payment of nonresidential centers, see the HHSC Family Violence Program contract, Article 13, Section 13.06(w)–(y).

Suggested Practice

None

3800  Audit Requirements

Law

Office of Management and Budget (OMB) Circular A-133

Notes

• For more information regarding single audit requirements, access the OMB Circular A-133 for more information at www.whitehouse.gov/omb/circulars/a133/a133.aspx.
• HHSC requires audited financial statements if the nonresidential center is not required to submit a single audit. Audited financial statements must be forwarded to the HHSC Family Violence Program nine months after the organization’s fiscal year end.
• The HHSC Office of Inspector General is responsible for review of single audit reports from nonresidential centers. The Office of the Inspector General will ensure that the nonresidential center takes appropriate and timely corrective action if needed.
• For more information regarding audit requirements of nonresidential centers, see the HHSC Family Violence Program contract, Article 13, Section 13.06 (y)-(z).