2016  SITE REVIEW REPORT WORKPAPERS	

Center Name: 	
Review Date: 	
Center Director: 	
Host Institution: 	
Review By:	

FINANCIAL REVIEW	

Objective: To obtain an understanding of the internal controls used by the center and its host, to ensure the accuracy of reported financial and management information, and assess whether costs incurred and claimed for reimbursement and accounted for as match were reasonable, allowable, and allocable.

Financial Review Overview
The financial review consists of a cursory review of regional center reports and financial detail submitted to the state office, and Q&A with the center director (and if necessary other key personnel) for the center. Questions are asked to gain an understanding of the internal controls of the center and host institution to ensure the safeguarding of federal and state funding and to ensure proper authorization of those funds. The financial review also consists of a sampling of program transactions, which were chosen from the quarterly financial reimbursement reports. The reviewer’s findings and notes relating to this portion of the review are included below.

_________________________________________________________________________________CURSORY REVIEW________________________
PERFORMED BY STATE OFFICE PRIOR TO THE ONSITE REVIEW (PS)

The following pre-review tasks should be completed by the state office at least 30-days prior to the scheduled onsite review.

1)  Review reimbursement report(s) to determine if grant, cash match, and in-kind (i.e. cash, in-kind, and indirect) are supported by ledger and/or journal detail. This function must take place prior to the submission of final reimbursement reports for payment.

Tasks Completed:
	Yes	
	No	

Reviewers Comments:

2)  Record final line item expenditure totals reported in final cost share report and compare year-end actual results to the planned budget provided in the centers contract. Note discrepancies and prepare discussion notes for onsite visit.

SBDC Budget	BUDGET
	VARIANCE	ACTUAL	VARIANCE	PERCENT	
A. Personnel	$	$	$	%	
B. Fringe	$	$	$	%	
C. Travel	$	$	$	%	
D. Equipment	$	$	$	%	
E. Supplies	$	$	$	%	
F. Contractual	$	$	$	%	
G. Consultants	$	$	$	%	
H. Other Direct	$	$	$	%	
I.	Indirect	$	$	$	%	
TOTAL BUDGET (ACTUAL)	$	$	$	%	

Tasks Completed:
	Yes	
	No	

Reviewers Comments:

3)  Scan general ledgers and general journals for transactions that appear questionable, improper, or extraordinary in nature for sample selection. Questionable, improper or extraordinary samples may include: abstract transaction descriptions, unrecognizable employees or consultants, items in extraordinary cost categories, expenditures large in amount, charges to equipment or out-of-state/country travel, or transaction dates outside of the program year. Select all questionable samples for review. In lieu of such transactions, randomly select samples to insure adequate representation (10 –
20).

Tasks Completed:
	Yes	
	No	

Reviewers Comments:

4)  Record the transaction details of the samples selected and provide a copy to the center director and center budget officer for compilation of support documentation. Attach a copy of sample selections to onsite review work papers.

Tasks Completed:
	Yes	
	No	

Reviewers Comments:

5)  Review financial findings from previous financial review and list below.

FINDINGS
#	Description	

		

Reviewers Comments:

	

_________________________________________________________________________________CURSORY REVIEW________________________
PERFORMED BY REGIONAL CENTER PRIOR TO THE ONSITE REVIEW (PC)

The following pre-review tasks should be completed by the regional center director and provided to the state office at least 30-days prior to the scheduled onsite review.

1)  Describe the degree of autonomy the SBDC regional director has within the host organization to allocate/expend committed (budgeted) program resources, i.e. state award and match resource, to accomplish contractual milestones and further the objectives of the SBDC program.

Director’s Comments:

2)  Describe who, besides the regional director, is authorized to expend SBDC program award or match funds. List the name, title and organization or host unit of all individuals with such authority, and describe what level of authority they have and if prior approval of the SBDC regional director is required.

SBDC Program Authorized Delegates:
Name	Title	Organization/Unit	

			

Director’s Comments:

3)  Describe, if applicable, host or SBDC policies covering approval authority for program financial transactions. Do the policies include guidelines for controlling expenditures such as general purchasing and voucher payment authorizations, equipment purchases, or travel authorizations?

Director’s Comments:

4)  Describe the general processes and procedures required to expend SBDC program funds. Describe how and who prepares requisitions/purchase orders, reviews and handles invoices and vouchers for payment, and processes and signs checks for payment.  Describe if there is a policy regarding business purchases made with cash or credit cards from personal accounts.

Director’s Comments:

5)  Describe the accounting system used to manage SBDC program funds. Does the director have direct access to the system to review SBDC accounts? Describe any financial statements or reports that are prepared and distributed to the Lead Center for review. How often are these reports distributed and reviewed?

Director’s Comments:

6)  Attach a copy of the chart of accounts for the SBDC. Include a listing of the SBDC’s accounts for the program year being reviewed. Does a separate account/tracking exist for SBDC funds?

Director’s Comments:

7)  Does the SBDC have any agreements with other federal agencies? (If yes, provide a copy of the agreement(s) to ensure there are no conflicts of interest or matching violations)

Director’s Comments:

8)  Provide a list of all program income from sources other than training.

Director’s Comments:

9)  Provide the bank statement, or general ledger, that supports the balance in the Program Income account.

Director’s Comments:

____________________________________________________________________________ONSITE REVIEW WORKPAPERS___________________

The following are the state office’s detailed work papers for an SBDC onsite review. These are internal documents that assist the examiner in being responsive to each area included in an onsite review. These notes are not intended to be distributed to outside parties who do not have direct knowledge, experience, or authority with the CSBDC. (O)

1)  Determine if the center met or exceeded its match obligation.
a.   Did grantee match funding (lines 2a & 2b) equal or exceed total award funding (line 1)?
b.   Did grantee cash match (line 2a) equal or exceed 50 percent of total award funding
(line 1)?
c.	If not, what was the reason and did the state office provide a waiver of match?

Table 1.

SBDC Budget Summary (by Source)	$	%	
1.	Federal (SBA)			
2.	Local Match Funding			
a.	Cash Match			
b.	Indirect / Inkind Match			
Total			

Evaluation:
	Pass	Demonstrates financial commitment / compliance	
	Fail	Condition	

Reviewer’s Comments:

	

2)  Determine if the center managed its financial resources as planned.
a.   Was the budget an accurate representation of actual spending?
b.   Were there significant variances (over 10%) in any line item? Which?
c.	What were the extraordinary circumstances that accounted for significant variances?
d.   Did the center have unspent award funding for the year? If yes, did the center execute a contract/PO amendment to reallocate resources to another center?

Table 2.

SBDC Federal Budget	Budget	Actual	Variance	Var. %	
A.	Personnel	$	$	$	%	
B.	Fringe	$	$	$	%	
C.	Travel	$	$	$	%	
D.	Equipment	$	$	$	%	
E.	Supplies	$	$	$	%	
F.	Contractual	$	$	$	%	
G.	Consultants	$	$	$	%	
H.	Other	$	$	$	%	
I.	Indirect	$	$	$	%	
Total	$	$	$	%	

Evaluation:
	Pass	Demonstrates financial management / compliance	
	Fail	Condition	

Reviewer’s Comments:

3)  Determine if the center had previous financial findings and if those findings were resolved.
a.   What financial findings were identified in the centers last review? (note below)
b.   What corrective action was taken to resolve previous findings?
c.	Describe in detail what new procedures or internal controls were instituted.
d.   Describe any unresolved issues and recommended appropriate corrective action.

Evaluation:
	Pass	Demonstrates control / compliance	
	Fail	Condition	

Reviewer’s Comments:

Previous Findings
#	Description	

		

Corrective Actions & New Procedures (if any):

4)  Determine whether reimbursement requests followed state policy guidelines.
a.   How often were requests submitted for reimbursement?
b.   If less/more frequently than quarterly, what was the reason?
c.	Did the center utilize the state prepared reimbursement form worksheets?
d.   Who prepared reimbursement forms for submission?
e.   Were reimbursements prepared correctly or did they require frequent correction?
f.	How were reimbursements prepared, i.e. what support was used to prepare reimbursements?
g.   Who reviewed reimbursements before submission to the state office?
h.   Were reimbursements signed by the center director and host?

Evaluation:
	Pass	Demonstrates control / compliance	
	Fail	Condition	

Reviewer’s Comments:

5)  Describe any services provided to clients that require a fee being charged.
a.   If any, what services are provided to clients for a fee?
b.   How are the fees determined?
c.	How were the revenues and cash receipts accounted for?
d.   Who was responsible for making deposits?
e.   Who was responsible for tracking program income?
f.	Are income and expenses properly allocated between SBDC and co-hosts?

Evaluation:
	Pass	Demonstrates control / does not apply	
	Fail	Condition	

Reviewer’s Comments:

6)  Determine if the center director has control of the SBDC budget as prescribed by state policy.
a.   Who, besides the center director, is authorized to accrue expenditures using program resources?
b.   What level of authority do they have to disburse funds?
c.	Do they require the prior approval of the center director?
d.   Are periodic financial management reports prepared? Describe the reports provided. e.   How often are reports provided and reviewed by the center director?
f.	How are discrepancies in reports resolved?

Evaluation:
	Pass	Demonstrates control / compliance	
	Fail	Condition	

Reviewer’s Comments:

7)  Determine whether cash match committed was allowable and met the special terms and conditions of the grant contract.
a.   Verify the center’s Sources of Cash Match Report and determine if contributions were from allowable non-federal sources.
b.   If applicable, review bank statements or electronic fund transfer (EFT) reports for proof of receipt and deposit of grant funds to SBDC accounts.
c.	Summarize major cash match contributions.

Cash Match Contributions ($2,500 or more):
Amount ($)	Organization	
$		
$		
$		
$		

Evaluation:
	Pass	Demonstrates control / compliance	
	Fail	Condition	

Reviewer’s Comments:

8)  Determine if purchases were appropriately managed and recorded.
A.	Who is the dedicated financial manager/budget officer for the SBDC program?
B.	Who processes purchase orders/requisitions for the center?
C.	Who is responsible for the receipt of ordered merchandise?
D.	Who receives invoices for goods ordered by the center?
E.	Who reviews invoices/vouchers before payment?
F.	Are payments to external entities for goods or services ever made by cash?
G.	Do invoices/vouchers require the signature of the center director?  If not, who is required to sign them?
H.	What is the name of the accounting system used to manage SBDC finances? Does the regional director have direct access to the system to review SBDC accounts?
I.	Does the center have a current inventory list? Review current year additions.

Evaluation:
	Pass	Demonstrates control and segregation of duties	
	Fail	Condition	

Reviewer’s Comments:

9) Determine if in-kind contributions were accurately calculated and justified.
a.   Are there any conflicts of interest in the sources of in-kind contributions?
b.   Are amounts claimed reasonable, allowable and allocable?
c.	Is there adequate supporting documentation for amounts claimed? (e.g., signed and dated time sheets, non-SBDC customer invoices, log and market rate of supplies received, comparable lease property invoices, etc.)

Evaluation:
	Pass	Demonstrates compliance / does not apply	
	Fail	Condition	

Reviewer’s Comments:

10) Determine if indirect contributions were accurately calculated and justified (If Applicable).
a.   Verify that the center has an indirect rate agreement that is current or that a provisional rate is allowed.
b.   Verify that only those costs allowed are included in the indirect base in accordance with the indirect rate agreement.
c.	Verify that indirect costs reported are less than or equal to the Federal indirect cost rate agreement allowed.

Evaluation:
	Pass	Demonstrates compliance / does not apply	
	Fail	Condition	

Reviewer’s Comments:

11) Determine if the organization’s procedures are adequate to account for program income.
a.   Verify documentation and usage of program income according to federal regulation. b.   Was there program income carried forward from the previous period?
c.	Are attendee lists maintained from events that produced program income and are fees paid by attendees recorded in the program income ledger?
d.   How were cash receipts received and managed?
e.   Was program income accurately reported to the lead center?
f.	Discuss how program income was used to further program objectives.
g.   Are program income and leading edge funds kept / tracked separate from general SBDC funds?
h.   Is interest being earned on Program Income? If greater than $250, is it being returned to SBA?

Evaluation:
	Pass	Demonstrates control / does not apply	
	Fail	Condition	

Reviewer’s Comments:

12)  Review sample financial data selected. Report findings below.
a.   Personnel
i.  Are all center personnel full-time? If no, what personnel were part-time and what was the percentage of time allocated to the SBDC.
ii.  What other programs did the employee allocate time, if any?
iii.  Does the timesheet / time and effort report support employee’s effort?
b.   Fringe Benefits
i.  Is there a written policy / employment contract outlining fringe benefits or fringe rate?
ii.  Are fringe expenditures in accordance with policy?
c.	Travel
i.  Are travel costs attributed to an employees’ effort on behalf of the SBDC?
ii.  Are there costs attributed to out-of-state travel?  If yes, what was the purpose of the travel?
 iii.   Are registration fees included under the travel category? (Should be Other)
iii.  Was the travel approved in the proposal or by prior approval? If not, why?
iv.   Are there travel expenses for someone other than an SBDC employee? (If yes, obtain justification and explanation)
d.   Equipment
i.  Does the equipment purchased meet the definition of equipment (i.e. tangible property greater than $500 in value per single item)?
ii.  Was the equipment approved in the proposal or by prior approval?
iii.  Was the equipment detail recorded in the Equipment Inventory Record and provided to the lead center.
e.   Supplies
i.  Are the supplies charged reasonable, allowable, and allocable to the center?
ii.  Is the expenditure appropriately categorized as supplies?
f.	Contractual/Consultant
i.  Is the organization/consultant included in the regional proposal budget?
ii.  If no, how was the organization/consultant selected?
iii.  Does a contract between the center and organization/consultant exist?
iv.  Was the contract executed prior to delivery of service?
v.  Does the consulting hours delivered agree in terms (i.e. hours and rate) to budget and consulting report detail from Center IC?
vi.  Is the consultant’s rate allowable and reasonable? If above $35, is backup present (industry rate and average rates from similar non-SBDC consultants)
vii.  Is the consultant certified?
g.   Other
i.  Are expenditures reasonable, allowable, and allocable to the center?
ii.  Are expenditures in excess of historical trends? If yes, why?
iii.  Is the expenditure appropriately categorized?
h.   Program Income
i.  Verify that the revenue sources were from allowable activities.
ii.  Were there controls in place to manage and track cash receipts?
iii.  Were expenses appropriate, i.e. did they further the objectives of the program?
iv.  Were receipts and expenses allocable to the appropriate period?
v.    Verify net income from 888 forms match deposits into program income account. Also verify that this amount traces back to sources of program income reported monthly to the Lead Center.
vi.   Are there any indirect charges to program income? (not allowed)

Findings:

Sample #	Category	Finding	

			

			

			

Reviewer’s Comments:

SCOPE AND LIMITATIONS
The examination covered the Center’s operations during Program Year 2012. 

Because the procedures did not constitute an audit in accordance with generally accepted auditing standards, we do not express an opinion on the SBDC’s financial information as a whole, nor do we express an overall opinion on (1) the recipient’s compliance with program policies, operating procedures, applicable laws and regulations, or (2) whether costs incurred were reasonable, allowable, or allocable, or (3) whether the network is operating in an effective manner.  Had we performed additional procedures or conducted an audit in accordance with generally accepted auditing standards, other matters may have come to our attention that would have been reported to you.

This examination by the CSBDC State Office of the performance of a primary recipient of Federal funds under a cooperative agreement does not substitute for audits required of Federal grantees under the Single Audit Act of 1984 or Office of 
Management and Budget (OMB) Circular A-110 or A-133 nor does this examination substitute for audits to be conducted by the SBA Office of Inspector General under authority of the Inspector General Act of 1978, as amended.

Named users of this report are the Small Business Administration, the ASBDC Certification Committee, and the Governor’s Office of Economic Development and International Trade.  This report is not intended as a basis for reliance or action by any other users.