1.3 Financial Reporting and Administrative Costs

Revised October 2019

1.3.1 COST REPORTING

Local Agency costs for each Maternal and Child Health Program Grant must be broken down and reported separately.

A description of each line item and examples of activities which may fall into these categories is provided for reference.

Addendum 1.3.1 - Allowable Costs by Line Item

1.3.2 FUNDING

The method of payment to Maternal and Child Health grants is by reimbursement of expenditures. Repayment and reconciliation methodology will be documented in the annual agency agreement.

Once the amount of funds available to Illinois for the BMCH programs is determined:

  • The Department allocates awards to Local Agencies through a grant review process.
  • Administrative funds are allocated by use of a formula based on standardized costs per caseload.

The Department - Local Agency Grant Agreement serves as the legal basis for disseminating funds to local programs. Grant agreements must be signed and properly obligated through the Department and the Illinois Comptroller. Payments are scheduled on a monthly basis. All payments will be reconciled based on submitted documentation. Failure of the Provider to submit documentation may result in a reduction to the total award.

1.3.3 ALLOWABLE COSTS

  1. Costs associated with activities considered necessary to meet Program objectives by the Agency are allowable and may be charged to the grant.
  2. Program management activities including accounting, auditing, budgeting, and outreach.
  3. Allowable Costs for outreach activities as defined in the Outreach section are allowed. However, health, general education, or other social service activities may not be included as outreach.
  4. Salary and other expenses for staff conducting activities required by the grant must be supported by documentation as described in Time and Activity subsection.
  5. The agency must maintain an internal system of documenting time and activity; and separating activities performed under separate grants. Agencies may choose to use the SV02 documentation in Cornerstone as this system of documentation.
  6. The agency must make its clinical and time reporting records available for inspection by authorized representatives of the Department.
  7. When approved in the plan and budget, funds may be used for the direct costs of operating and maintaining the project. The following direct costs may be incurred:
    1. Salaries, including fringe benefits for full or part-time personnel employed for the program. The rates for personal services and fringe benefits shall be comparable to that paid to other employees of the agency.
    2. Fees for consultants and specialists.
    3. Travel of personnel, consultants, and specialists in carrying out the activities approved in the plan. Reimbursement shall be made in accordance with established delegate agency policies.
    4. Transportation of clients at the usual rates for the mode of travel that is consistent with the needs of the client, only once all options through Medicaid Managed Care Transportation Options have been exhausted, may be documented for the Better Birth Outcomes program if these costs are documented in the approved budget
    5. Supplies, as required in the operation of the project. The cost of supplies shall not exceed the lowest charge levels at which they are generally available in the area.
    6. Rental of privately-owned facilities where adequate space cannot be provided by the grantee agency. Rental charges shall not exceed the lowest rate for comparable space within the community as supported by bids.
    7. Equipment used in the operation of the project excluding the purchase of vehicles.
    8. Other expenditures directly related to the provision of project services, such as: telephone service, photocopying and scanning, utilities, etc. Purchases of items or services that do not vary significantly in quality from one supplier to another shall not exceed the lowest charge levels at which they are available in the area. A description for prorating costs must be provided.
  8. Indirect costs may be included as a portion of the overall project costs as defined in the Grant Accountability and Transparency Act (GATA) [30 ILCS 708/15] if the indirect costs are budgeted along with the direct costs.

1.3.4 UNALLOWABLE COSTS

  1. Under no circumstances may the DHS MCH grants be charged in full or in part for the costs of services which are demonstrably outside of the scope of the MCH Program's authorizing statute. For example, the FCM grant may be charged to screen FCM clients for immunizations and refer and follow-up on FCM client immunizations, but FCM may not be charged for the cost to administer the shot, the vaccine, or vaccine-related equipment. Further, costs which are specifically disallowed by applicable Federal cost principles outlines in the 2CFR200 may not be charged to the DHS MCH grants.
  2. Project funds shall not be used to pay the following:
    1. Inpatient care services
    2. Purchase, construction, or renovation of buildings
    3. Dues to societies, organizations, or federations
    4. Entertainment costs
    5. Cash payments to intended recipients of services
    6. Purchase or repair of vehicles
    7. Lobbying
    8. Any other costs not approved in the plan and budget.
  3. Administrative costs shall not exceed 15% of the total grant award. Any deviation from this must be approved in writing by the Associate Director of the Office of Family Wellness after a review of the circumstances which would require such an exception. The Department will consider the following in determining whether to grant an exception:
    1. the nature of the project,
    2. ability to find resources in the community which will meet part of the needs of the project and thus invalidate the percentages,
    3. a targeting of the resources toward one particular component or identified unmet need by the grantee which clearly will inhibit the ability of the grantee to carry out the project.

1.3.5 TIME AND ACTIVITY

Each agency must be able to document time, and activity spent by each employee on each grant. This documentation will be used to reconcile against reimbursement request of Personnel costs against each grant during audit and administrative review. The specific format of documenting this time may be determined by the agency, however each report must be signed by the employee, and the employee's supervisor. Cornerstone reports may be used to document time and activity; however, it is not required to be documented through Cornerstone.

The documentation must at minimum contain the following information:

  1. Identification of the staff person.
  2. The date on which the activity was conducted.
  3. Activity type - At a minimum, categories must identify case management; outreach; administration of outreach and case management; accrued benefit time; and other direct services, as follows:
    1. Time Spent - The amount of time spent on each activity.
    2. Program - The employee is working in (FCM, BBO, HRIF/HWIL).

1.3.6 PRIOR APPROVAL FOR PURCHASES

Prior Approval is not needed for:

  1. Activation of clients
  2. Clinical costs necessary to provide program services, including referrals
  3. Outreach to prospective program clients
  4. Rental or purchase of non-computer equipment (any nonexpendable item costing less than $5,000)

Costs allowable with prior approval from the Department:

  1. Rental space costs - new sites / locations
  2. Any computer software purchases, such as: word processing, spreadsheet, database, email, presentation, or anti-virus applications
  3. Any computer equipment purchases, such as: personal computers, monitors, printers, and modems
  4. Items costing more than $5,000
  5. Purchase of capital assets, such as: buildings, land, and improvements to buildings or land that materially increase their value or useful life and cost more than $5,000

All requests must be in writing on Local Agency letterhead from the agency to the Department via the Administrative Contract Coordinator. The request must include:

  1. Item Description
  2. Model Number/Serial Number
  3. Unit Cost
  4. Justification for Purchase
  5. Percentage of time the product will be used for each program
  6. Number of Program Full Time Equivalents present in the Local Agency

1.3.7 INVENTORY MANAGEMENT

Each local agency must maintain full and complete records concerning program operations. This includes maintaining property records as described below.

  1. The Local agency must tag all equipment, valued at $100 or greater at the time of purchase, with a unique identification number
  2. An inventory must be maintained of all tagged items purchased in full or partially with program funds. The inventory must include:
    1. Tag number/Inventory Number
    2. Item description
    3. Model Number/Serial Number
    4. Date of Purchase
    5. Unit Cost
    6. Location
  3. Agencies using a blended inventory of all items must have a method to clearly indicate items purchased with program funds.

GUIDELINES FOR DISPOSAL OF PROGRAM EQUIPMENT

  1. To dispose of equipment purchased with Program funds:
    1. If the item is on a depreciation schedule, and the timeframe of depreciation has not elapsed, the local agency must submit a request in writing, on agency letterhead, to the Department via the Administrative Contract Coordinator which includes:
      1. Item description
      2. Date of purchase
      3. Unit cost (if available)
      4. Justification for disposal
  2. If the request is approved, a letter will be sent granting approval to dispose of the equipment. The letter must be kept on file with the inventory records.
  3. Computer equipment approved for disposal must have all client information erased prior to disposal.

1.3.8 LOCAL AGENCY ACCOUNTING PROCEDURES

  1. Accounting System - Each Local Agency participating in a DHS MCH Program must have an established financial management system, which provides complete, separate, and accurate accountability of Program funds. The accounting system in the Local Agency must provide original evidences of:
    1. Transactions
    2. A chart of accounts
    3. Ledgers for posting
    4. Complete accountability of all obligations, payments, and reimbursements
  2. Expenditure Documents - Source documents for expenditures must be available for audit, and records of payment of such expenses must allow for clear audit trails. To qualify for payment, an expenditure must be:
    1. A documented program expense related to the grant
    2. In compliance with federal and state regulations

1.3.9 FINANCIAL DOCUMENTATION

  1. Local agencies will receive MCH grants payments from the Department as follows:
    1. Payments are scheduled on a monthly basis.
      1. All payments are reconciled based on submitted documentation. Failure to submit documentation may result in a reduction to the total award.
    2. Periodic Financial Reports (PFR) must report expenditures by line item category in alignment with the current approved budget.
  2. PFR Form Setup
    1. The PFR is a Microsoft Excel Spreadsheet file, and there is a tab for each month of expenditures.
    2. Expenditures are automatically calculated for the month as well as the Cumulative Amount Year to Date.
    3. Print Areas are pre-set - Do not alter the print areas.
    4. Any issues with the spreadsheet file, can be communicated by email at dhs.bmchedf@illinois.gov or by calling (217) 557-3105.
  3. Step by Step Guide
    1. Save the spreadsheet file to your computer
    2. Complete the Information and Instructions Tab - Information entered on this tab will automatically populate to each of the monthly tabs.
      1. All fields are Mandatory
        1. Agency Name
        2. Agency FEIN
        3. MCH Contract Number
        4. MCH Program Name
    3. Complete the applicable Month Expenses Tab
    4. All fields are mandatory
      1. PFR Field Purpose of Field
        Date Submitted Submittal date of the PFR
        Date Revised

        Revision date of the PFR

        This field is mandatory only if you are submitted a Revised PFR for the month.

        Reporting Month Expenditures

        MCH expenditures must be broken out by line item in alignment with the current approved budget.

        If you do not have expenditures to report for a month, you must still submit a PFR with the Amount Claimed as $0.

        Certification and Authorized Local Provider Approval A PFR is considered "uncertified" unless it includes:
        • Typed or handwritten Name and Title of the Authorized Local Provider Official, and
        • Date Authorized
        • Authorization Signature
        Report Prepared by Enter the name, Email and Phone number of the person preparing the PFR.
    5. Submit your Periodic Financial Report
      1. Periodic Financial Reports (PFR) must be submitted monthly.
      2. Deadline for submission of monthly PFRs is the 15th of the month following the month of service (i.e., PFR for July expenditures must be submitted to DHS by August 15th).
        1. Any month that an agency is not able to meet the deadline for submission of a monthly PFR may request an extension in writing prior to the 15th of the month.
      3. Choose one of the following options to submit your EDF each month:
        1. Print the completed monthly tab to Adobe PDF and email the file to dhs.bmchedf@illinois.gov. (Print Areas are pre-set. Please do not alter the print areas. OR
        2. Print hard copy of the correct monthly tab and fax to Program Coordinator at (217) 558-9548.
  4. Helpful Information
    1. Refer to the GATA training and 2 CFR 200 for detailed information on how to categorize expenses in conjunction with the agency approved budget.

1.3.10 PROGRAM AUDIT

  1. Local Agencies are required to be audited annually in accordance with: 2 CFR Part 200.501 Audit Requirements
  2. 2 CFR 200.425 states "A reasonably proportionate share of the costs of audits required by, and performed in accordance with, the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507), as implemented by requirements of this part, are allowable. Agencies should follow regulatory references in 2 CFR 200.425 for allowable and unallowable and unallowable audit costs. Any direct cost being charged to the program would be based on an organization's written costs allocation policy which meaningful allocation base and methodology would be included therein.
  3. Allowable and unallowable Audit Costs are addressed in 2 CFR 200.425 (Subpart E - Cost Principles) . The Department retains the right to conduct audits of any and all Local Agency MCH Programs. There is no charge to the Local Agency for these audits.
  4. No other audits are required in the MCH Program nor will outside audits be paid for from MCH funds. The requirements for Audit are set forth in 2 CFR 200 Subpart F and reflected in 44 IL Adm Code 7000.90; allowable and unallowable Audit Costs are addressed in 2 CFR 200.425 (Subpart E - Cost Principles.

1.3.11 LOCAL AGENCY SANCTIONS / RECOVERIES

The Local Agency shall have the right to appeal any sanction or recovery given by Programs or the financial review team to the Chief of the Bureau of Maternal & Child Health

  1. The appeal shall indicate the reason why the sanction should not be imposed and/or why this recovery should not have been made.
  2. The appeal shall be made within thirty (30) calendar days of this imposition of the sanction and/or the recovery of monies from the reimbursement voucher.

1.3.12 CLOSEOUT REPORTING PROCEDURES

The State Fiscal year runs from July 1 through June 30.

  1. Costs must be separated so that expenditures are charged to the fiscal year in which the obligation was incurred.
  2. The separation of costs must occur between the months of June and July to close out the state fiscal year.