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Revised August 2019 V. Nutrition Services & Administration (NSA) - Overview of Financial Management PROCEDURE 5.001 Implementing Office: Community Health Administration (CHA) Revised: July 2019 Approved by:

_______________________ LaQuandra S. Nesbitt MD, MPH; Agency Director Review by Legal Counsel:

____________________ Phillip Husband, Esq.; General Counsel Effective Date: 11/23/2015

I. Authority USDA

II. Reason for the Policy CFR § 246.16(d) Distribution of funds to local agencies

III. Applicability DC WIC State and Local Agencies IV. Policy Statement Financial Management of the District of Columbia’s WIC Program shall ensure that all local agencies develop and implement a financial management system consistent with requirements prescribed by FNS and the State Agency pursuant to the requirements of this section. The regulations, circulars and policies that govern operations of the WIC state and local agencies are: 1. Federal a) Federal Register 7 CFR Part 246 WIC Program Consolidated Regulations

b) 2 CFR 200 Uniform Administrative Requirement, Cost Principals, and Audit Requirements for Federal Awards

c) FNS Memo SFP 10-017, Updated Prior Approval Guidance 2. District a) Local Agency Policy and Procedure Manual b) WIC Conditions of Grant Award c) WIC and Breastfeeding Peer Counselor Budget Package All of the above referenced federal and state regulations are available on-line and should be on file at the local agency. The WIC Conditions of Grant Award and the WIC and Breastfeeding Peer Counselor (BPC) Budget Package and WIC Budget Instructions are revised annually. These updated files are issued as attachments to the annual local agency grant award letter.

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Revised August 2019 The applicable regulations and policies should be consulted whenever a question is raised concerning allowable costs or procedures. If further clarification is needed, the DC WIC State Agency should be contacted. If necessary, the appropriate federal or state authority will be contacted for explanation or clarification.

V. Definitions & Acronyms Breastfeeding Peer Counselor (BPC) VI. Procedures 1. Accountability / Program Costs

a. General

Each WIC local agency must maintain an accounting system and separate records relating to the WIC grant which conform to all state and federal regulations as well as generally accepted accounting principles. Any expenditure charged to a WIC grant must be traceable to source documentation.

Federal regulations require that records be retained for at least three years from the filing of the final closeout report as outlined in section B.3 of this policy. USDA has the option of requiring a longer record retention period if it is felt to be justified, or if any of those conditions specified in Section 246.25 (a) (2) of the federal regulations exist.

WIC funds are divided into two broad categories: Food funds and Nutrition Services and Administration (NSA) funds. Local agencies are not awarded Food funds. NSA funds are further subdivided into the following cost categories i. Certification ii. Nutrition Education iii. Breastfeeding Promotion and Support iv. Breastfeeding Peer Counselor Support v. Program Operations Separate accumulation of costs under each of these categories must be maintained. The WIC local agency shall not have expenditures that exceed the award for the current fiscal year. Expenditures in excess of the current fiscal year award will be disallowed and not reimbursed by the Program.

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Revised August 2019 b. Nutrition Education and Breastfeeding Spending Requirement At least 20% of NSA funds expended by each local agency must be for nutrition education. In addition, at least 5% of NSA funds expended by each local agency must be for breastfeeding promotion and support. c. Time Studies Local agencies are required to perform time studies during the first month of each quarter of the State Fiscal Year (July, October, January and April) or on a daily basis under certain circumstances. See Policy and Procedure 4.03 (Time Study Requirements for Staff Paid with WIC or BPC Funds) for further guidance. Salary and fringe cost expenditures for each quarter are allocated to the appropriate cost category based on the time study percentages. d. Other Costs Costs other than those for nutrition education and breastfeeding promotion and support must be allocated to the appropriate cost category on the monthly/quarterly expenditure report. Indirect costs are those costs incurred for a common purpose benefiting more than one program and not readily assignable to the program benefited. The WIC Program limits indirect costs to a specified percentage of actual expenditures for eligible salary line items (not including fringe benefits). This is further explained in the WIC Budget Instructions that are included with the annual local agency grant award letter. e. Inventory Records Local agencies are required to maintain equipment inventory records for all equipment items that are purchased with WIC grant funds. These records should allow easy identification of each item and its location. f. Items Requiring Specific WIC State Agency or USDA Approval Items purchased using WIC Program funds after the original budget was approved must be approved in writing by the State WIC Financial Officer. All requests are to be submitted via email. It is the responsibility of the Local Agency to retain approvals for recordkeeping purposes. • Purchases Over $1,000.00: Written approval for purchases of sensitive equipment costing $1,000.00 or more is required by the State WIC Financial Officer. Sensitive equipment includes capital or non-capital items such as all computer equipment such as laptops and notebook computers. Portable items such as tools, hand radios and cameras that are prone to theft and concealable in a handbag or briefcase are also considered sensitive items. Equipment items that are too large for concealment, such as typewriters and projectors, shall be considered sensitive items if there is a history

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Revised August 2019 of loss or theft within a particular local agency. Firearms and other law enforcement type weapons are always considered sensitive regardless of acquisition cost. • Purchases Over $5,000: The USDA must be notified in writing by the State WIC Office of any automation services or equipment purchase totaling $5,000 to $99,999 within 60 days of the expenditure or contract execution. USDA approval is required prior to the purchase of any non- computer equipment item with a unit cost of $25,000 or greater. WIC State Office and USDA approval is required prior to the start of any capital improvement project (including repairs) if the total cost is $5,000 or greater. Refer to Policy and Procedure 5.002 (Administrative Costs) for instructions. • Travel: Expenses for travel, lodging, meals, conference fees, etc. for agency staff that work for both WIC and another program must be approved in advance by the local agency WIC Coordinator. Travel requests for the local agency WIC Coordinator that works for both WIC and another program must be approved in advance by their supervisor. • Incentive/Outreach Items: Prior written approval from the State WIC Financial Officer is required for the purchase of all incentive / outreach items if the unit cost exceeds $4.00. • Documentation: For the items that require approval, a copy of the approval from the State WIC Financial Officer must be maintained in the local agency files. When budget modifications are submitted, the approved items must be included in the modified budget. • Budget Line Item Revisions Any line item revision more than 10% above the original amount budgeted requires justification for the additional costs to be submitted with the budget revision , and requires prior approval from the State WIC Financial Officer. g. Audits In accordance with the provisions in Federal Register 2 CFR 200, all non-federal entities that expend $750,000 or more in a year in federal awards shall have a single or program-specific audit conducted for that year. WIC local agencies must submit a copy of the annual single audit report to the WIC State Office upon its completion. USDA and other Federal and State agencies reserve the right to audit a Local Agency's operations at any time.

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Revised August 2019 h. Financial Review The DC WIC Program routinely performs Management Evaluations of local agencies. Prior to the start of the Management Evaluation, an electronic letter will be sent to the local agency fiscal staff and local agency director requesting that documentation be submitted. The requested documentation is to include, but is not limited to, cost allocation plans, proof of payment, records for costs reported to the WIC program, spending approvals and records for time studies. Documents should be submitted in electronic or paper form in the timeframe stated in the letter. Expenditures may be disallowed if supporting documentation cannot be provided. Disallowed expenditures are subject to repayment to the state WIC office. WIC funds shall not be used for the repayment of disallowed expenditures. During the Management Evaluation, the WIC financial management staff will schedule an on-site appointment with the local agency coordinator to perform a physical inventory of equipment. The on-site visit may also include a review of certain accounting records and procedures. Individual training sessions on WIC financial management policies, recordkeeping, reporting and time studies are provided to all new agency directors and fiscal officers. Additional training will be provided to any local agency staff upon request.

2. Funding, Caseload Assignments and Reporting Requirements a. WIC Grant Local agency NSA funding is awarded on a Federal fiscal year basis (Oct. 1st through Sept. 30th). Funding is awarded using the caseload assigned to each local agency, the rate per participant and base funding (based on caseload assignment). Funding rates may be adjusted annually and are subject to availability of funding. NSA Funding formula (per participant rate x caseload assignment) + Base Funding = FY Award b. Breastfeeding Peer Counselor (BPC) Funding Local agency BFPC funding is awarded on a Federal fiscal year basis (Oct. 1st through Sept. 30th). BFPC funding acceptance is voluntary for local agencies and is not required. BFPC awards are determined by using the estimated number of pregnant and breastfeeding women participants in each participating local agency and the rate per participant. Funding rates may be adjusted annually and are subject to availability of funding.

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Revised August 2019 BPC Funding formula (per participant rate x estimated pregnant and breastfeeding women participants) = FY Award c. Caseload Assignments Local agency caseload assignments are determined each year in October for the Federal fiscal year starting October 1st. Assignments are based on participation from the previous year, special populations served, percent of target population being served, and any other relevant information that is available. Caseload assignments and actual participation are reviewed on a monthly basis. Caseload assignments are normally adjusted once during the year, if indicated, based on actual participation but may be adjusted more frequently at the discretion of the DC WIC State Agency. Local agencies are required to serve an average of at least 97% of their caseload assignment during the year. If a local agency does not meet this requirement, their caseload assignment may be reduced for the following year. d. Local Agency Budgets Local agencies should refer to the WIC Budget Instructions when preparing their annual budgets and budget modifications. Local agency budgets are due at the end of September each year. Budget modifications are usually limited to one per year which is due with the third quarter expenditure report. The DC WIC State Agency requires an agency Cost Allocation Plan for each budget line item that is a shared cost. The cost allocation sample format in attachment 5.007A (Budget Schedule) can be modified, as needed, to meet this requirement. e. Monthly/Quarterly Expenditure Reports The DC WIC State Agency requires the submission of expenditure reports on a monthly basis. The format for the monthly expenditure report is included in the WIC Budget Instructions and WIC Budget Package. Expenditure reports must be submitted electronically to the DC WIC State Agency through the Department of Health’s, Electronic Grants Management System (EGMS) within 30 days after the end of the preceding month being reported. If this deadline cannot be met, a request for an extension, with justification stating the reason for lateness, must be made to the State WIC Financial Officer or the WIC Program Manager in advance of the 30 day deadline. The WIC Financial Officer or the WIC Program Manager will approve or deny the request in writing f. Compliance 1) Adherence to all instructions and due dates listed in the WIC Program Budget Package is required to maintain compliance with the terms and conditions of the Federal Award. If found non- compliant, one or more of the following actions will be taken in accordance with the 2 CFR 200.338 Remedies for Noncompliance:

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Revised August 2019 i. Temporary withholding of cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency;

ii. Disallowance of all or part of the cost of the activity or action not in compliance:

a. Costs determined unallowable will be charged back to the agency; b. Late submissions will have a portion of funding disallowed according to the following formula:

Disallowed Cost = (Total budgeted Indirect Cost ÷ number of business days in the fiscal year) × (number of business days past the assigned due date) × 15%. iii. Wholly or partly suspending or terminating the Federal award;

iv. Initiating suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations;

v. Withholding further Federal awards for the project or program;

vi. Other remedies that may be legally available. g. Local Agency Payments Local Agency payments will be made upon receipt and verification of a monthly expenditure reports.

3. Record Retention Schedule Program records must be retained for at least three (3) years following the date of filing the final closeout report for the period to which the report pertains. For example, the closeout report for Federal Fiscal Year 2010 was filed at the end of September 2011. All records for FFY 2010 must be retained for a period of three (3) years after the filing date. The following dates indicate when program records may be destroyed for each of the applicable Federal Fiscal Years: Federal Fiscal Year Dates Records May Be Destroyed FFY 2015 (10/14 – 9/15) September 30, 2019 FFY 2016 (10/15 – 9/16) September 30, 2020 FFY 2017 (10/16 – 9/17) September 30, 2021 FFY 2018 (10/17 – 9/18) September 30, 2022 FFY 2019 (10/18 – 9/19) September 30, 2023

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Revised August 2019 FFY 2020 (10/19 – 9/20) September 30, 2024 FFY 2021 (10/20 – 9/21) September 30, 2025 An audit may extend the three (3) year requirement. If a particular Federal fiscal year has been audited and there are issues to be resolved, the program records must be retained until all issues have been resolved or until the end of the three (3) year period, whichever is later.

VII. Contacts

5.002 Administrative Costs VIII. Reference CFR § 246.13 (j) Local Agency Financial Management CFR § 246.14 (a)(1) Program Costs