But managing the award is equally as important as receiving it. When your department receives awards, there are some common sense guidelines on how to document expenditures, avoid conflicts, and maintain good records. My recommendations are based much more on logical book keeping than any accepted fiscal standard.
Can We Use The Money For Something Else?
“The number one issue we have with our awardees comes within the first minutes of award notification,” said Tom Devaney Director of Operations at JSK Inc./Grant-Guys. “The initial question almost immediately is can we use the money for something else; we don’t want that anymore.” The short answer is no. If you applied for an item and were awarded that item, it is highly unlikely the award will be greatly altered. The reason is because the questions are computer scored for various items, and the narrative was approved by the peer review committee for that specific item.
The reality is that much of the AFGP is based on the honor system. And as citizens and firefighters, it’s up to us to be honest and keep good records. But many awards are audited. Recently, one of our clients was the subject of an AFGP desk review. We assisted the fire department for two reasons: first we wanted to learn what should be documented to help our other clients in the future; and secondly and most importantly it was the right thing to do. By writing an application, receiving an award and then leaving them on their own is hardly fair.
Suggestions at the time of the award include the following items:
- Print out quarterly reports and semi-annual reports
- Print out a copy of the application and award package
- Keep user names and passwords together with the application in a secure place keeping passwords up to date
- Keep all purchase orders, invoices, cancelled checks, and receipts together
- Track serial numbers and location of purchased equipment
- Maintain all payroll and employment data as required.
It is my experience that the overwhelming majority of fire departments meets and exceeds these simple guidelines. However, in assisting with the desk review, it was found that the FEMA staff appeared more interested in the “how” they expended funds rather than the proof of the purchase. For instance the desk reviewers did not ask for serial numbers or invoices, but they did ask about their “processes.” How was it that decisions are reached, who has the authority to make decisions, or what happens in the event of cost overruns. This fire department, which is a form of fire district under NYS law, thankfully was required to have accounting practices well above what could ever be expected in a routine audit. But, it did not have a written list of practices as to how funds were dispersed. Everyone on the board knew that receipts presented for payment were to be voted on by the board, and that purchases needed to be in line with the award. But nowhere did it actually have a written policy to document that. It was a problem which had a quick resolution in this case, but it draws attention to some of the rules that FEMA might be looking for. Of the 18 questions asked during the review, here are nine important ones. In the event of an award, we recommend establishing a simple three ring binder and placing the following policies and procedures in them in WRITTEN FORM.
- Organizational charts
- Fiscal year reviews separating federal vs non-federal funds
- Policy on who has authority to commit funds, approve policies, and accepts proposals
- How are amendments or reclassifications to the original award made and by who
- Who reviews each request for funds
- Where is the accounting manual kept
- Who determines the reasonableness of purchases, and what is reasonable
- What are the retention periods of your documents
- What documents are needed for each purchase
As you can see, many of these questions are what can be expected of any business or government agency. But incredibly, there are some agencies that cannot comply with even these simple policies. It’s important to realize that this is the people’s money. If your agency chooses not to follow general accounting practices that’s fine — but don’t expect to receive federal funding. Since you are now spending the government’s money received from taxpayers, you now have an obligation to follow their rules. It is after all their money, and if you can’t follow these steps then you shouldn’t apply. FEMA has a responsibility to make sure tax money is spent honestly.
The time to discuss these issues is before you apply for aid, not after you receive the award. If you are on the grant committee, or if you have retained a professional grant writer, you need to make these requirements known to the department leadership.
Audit requirements are not a reason not to apply for funding. If anything it will make your agency more efficient in the long run. The possibility of an audit or review is a great excuse to get a non-compliant fire department to be a more professional organization.
Kevin Mulrooney is a 30 year volunteer firefighter/EMT/Hazmat Tech. He is the owner of JSK Inc., “the Grant-Guys.” JSK is New York’s largest fire grant writing firm securing a record $2 million by round four of the 2013 AFGP. JSK represents 200 fire departments in nine states.