# Presentation: 385688

## Reimbursables & You! 

- LO Presentation
- May 10, 2007

## Purpose

**List the related KPMG audit findings & causes regarding reimbursable projects**
**Define general changes to work and paper flows for Finance & Line Office BPR effort**

- May 10, 2007

## KPMG Finding On Automatically Billed Projects With Advances

**Background**
**Cash is collected prior to incurring cost**
**For open agreements, cash balances are reduced as costs accrue **
**For expired agreements, cash balances must be refunded **
**Causes of Excess Cash**
**Agreements expire with remaining advances **
**Funds are not obligated within the period of performance**
**Prior year downward adjustments cause costs to be reduced after billing and collection**

- May 10, 2007

## KPMG Finding On Automatically Billed Projects Without Advances

**Background **
**Cash is collected after incurring cost**
**There should be no cash balances**
**Causes of Excess Cash **
**Costs are manually adjusted after billing and collection**
**Prior year downward adjustments cause costs to be reduced after billing and collection**

- May 10, 2007

## KPMG Finding On Manually Billed Projects

**Background**
**Includes a variety of projects, both with and without advances **
**Includes sales, fixed fee, and penalty projects, which don’t have formal agreements**
**Includes some projects with agreements**
**Areas of Concern**
**Some projects have no documented authority in Finance Office**
**KPMG is interested in these projects**

- May 10, 2007

## KPMG Finding On Manually Billed Projects (cont’d)

**Causes of Excess Cash**
**Agreements expire with remaining advances **
**Funds are not obligated within the period of performance**
**Costs are manually adjusted after billing and collection**
**Prior year downward adjustments cause costs to be reduced after billing and collection**

- May 10, 2007

## Finance Office Review

**Identify projects with positive cash balances**
**Identify agreements with expired funding**
**Transfer cash balances between fiscal years where appropriate**
**Apply advance balances to costs in another fiscal year**
**Carryover cash to FY 2007**
**Refund cash balances in excess of undelivered orders (UDOs) for expired agreements/projects**
**Notify LO/SO of amounts refunded by project**
***Note:  UDOs are goods or services ordered but not received.  UDOs do not equal total obligations.***

- May 10, 2007

## Line/Staff Office Role

**LO/SOs may be asked to:**
**Provide copies of agreements or funding documents**
**Provide no cost time extensions**
**Provide legal authority for projects**
**Contact sponsor for clarification of funding or period of performance questions**
**Verify project/agreement completion**
**Work with Finance Office staff to reconcile differences**

- May 10, 2007

## In Summary	

**The BPR effort will continue after implementation of new procedures on 7/1/07****in order to refine detail-level procedures**
**Finance will insure that BPR rules are followed****	****	****- watch for cost overruns, expired TWAs and ****	****  agreements, activate/turn off projects ****	****	****  accordingly**
**As a result of these changes, NOAA will experience better financial management & audit outcomes**

- May 10, 2007