Maximus, Inc. · NYSE:MMS
Maximus — Conference Presentation (July 2018)
22 slides from Maximus's conference presentation, Jul 17, 2018
Slide 1: Compliance Considerations for F&A Proposals
Compliance Considerations for F&A Proposals Deborah Carmel July 17, 2018 1
Slide 2: MAXIMUS Higher Education Practice
MAXIMUS Higher Education Practice • Serves more than 150 colleges, universities and university hospitals in 49 states plus Puerto Rico and the U.S. Virgin Islands ̶ 90 of top 100 research institutions ̶ Ranging from <$1M to >$1B in research • Headquartered in Northbrook, Illinois ̶ Satellite offices
Slide 3: F&A and Other Rate Consulting Services
F&A and Other Rate Consulting Services • F&A Cost Rate Proposal Preparation (Long and Short Form) and Negotiation (DHHS‐CAS & ONR/DCAA) • Space Surveys/Reviews • Fringe Benefit Rates • Federal Disclosure Statement (DS‐2) and Direct Costing Policy • Service Centers and/or Recharge Centers Rates and P
Slide 4: MAXIMUS Higher Education Products & Services
MAXIMUS Higher Education Products & Services • Grant Management Compliance • Learning Management and and Internal Controls Continuing Education Software • Effort Reporting Consulting • Research Operational Reviews – and Software Business Process Review and • Uniform Guidance Diagnostic – Improvement
Slide 5: Compliance Considerations for F&A Proposals
Compliance Considerations for F&A Proposals Two areas of compliance risk emerge during preparation of F&A rate proposal, due to the overarching nature of F&A: • F&A compliance to 2 CFR 200, the “Uniform Guidance” • Audit risk related to internal control weakness 5
Slide 6: Facilities and Administrative Basics
Facilities and Administrative Basics Depicts how the indirect costs of the university benefit: Instruction, Research, Other Sponsored Activities, Other Activities Indirect costs include: • Depreciation • Interest • Operations and Maintenance • Library • Administrative costs 6
Slide 7: Facilities and Administrative Process
Facilities and Administrative Process Collect data for an entire fiscal year: • Financial • Organizational structure • Space usage • Faculty, staff & student numbers 7
Slide 8: Facilities and Administrative Process
Facilities and Administrative Process Review financial information: • Determine what costs are excluded or unallowable costs • Determine if direct or indirect, which pool • Scrub costs that don’t belong in a particular cost pool at object code or salary title level 8
Slide 9: Key F&A Objectives
Key F&A Objectives • Properly depict how much Organized Research costs the institution • Allocate costs appropriately, based on what is in a given cost pool • Make certain that federal government isn’t double charged! Remove federal costs 9
Slide 10: Remove Federal Costs
Remove Federal Costs Building Depreciation • Identify federal contribution • Be sure you can identify when asset is fully depreciated! Equipment Depreciation • Identify federally-purchased equipment • Identify if the contribution is less than 100% • Cost shared equipment 10
Slide 11: Remove Federal Costs
Remove Federal Costs Grants for Indirect Areas • Public safety is most common • Need to go in the direct cost base 11
Slide 12: Cost Exclusions
Cost Exclusions Per Uniform Guidance, exclude costs that shouldn’t factor into the equation, non-cost bearing. • F&A is not charged to these expense types Examples • Subcontract amount > $25K • Hospital/patient care costs • Student aid • Bad debt 12
Slide 13: Cost Exclusions - Risk
Cost Exclusions - Risk Subcontracts >25K • Properly tracked? • F&A charged for subcontracts <=25K Only Hospital costs/space, Other Affiliated Entity • Are there any space related costs? • Are they burdened with their share of admin? • Is their share of admin cost based, or a “hand shake” deal? Check
Slide 14: Asset Accountability
Asset Accountability Capitalization Policies • Useful lives – accuracy • Retirement of assets as new are instated • Write-offs 14
Slide 15: Asset Accountability
Asset Accountability Location/Ownership • Often used to allocate depreciation, so it is important to be accurate Recharged equipment • Remove from the rate as feds may be paying via service center rates Retired/Missing assets • Are these identified and removed from F&A? 15
Slide 16: Space Related Costs
Space Related Costs External parties • Unrelated Business Income Tax (UBIT) Vacant space Space shared with another entity • Both claimed F&A with the federal government 16
Slide 17: Cost Sharing
Cost Sharing • Tracked by award? • Able to figure an annual amount? • Are commitments being met? ̶ Mandatory ̶ Voluntary Committed ̶ Salary over the cap unallowable costs • Is the university over committing itself? ̶ Voluntary Uncommitted Cost Share is not required to be tracked 17
Slide 18: Service Centers
Service Centers • Can we identify who is direct charging? • Do they all have approved rates • Are feds getting the best deal? • Are private entities full burdened? 18
Slide 19: Projected Costs
Projected Costs Universities are allowed to ask for additional consideration for buildings under construction Be realistic in estimation – firm documentation needed of: • Costs • Completion/move in date • Occupancy/Estimate usages 19
Slide 20: O&M Charges
O&M Charges • Are the Feds being direct charged O&M? • May need a Direct Charge Equivalent calculation 20
Slide 21: Conclusion
Conclusion F&A Risk • Failure to exclude indirect costs paid by federal sources • Inclusion of costs recovered elsewhere • Improper classification of costs • Lack of asset accountability Internal Control Risk • Failure to follow policies and procedures • Poor integration of management systems 21
Slide 22: Questions?
Questions ? ? ? If you have questions, please send me an email at: deborahcarmel@maximus.com Thank you for attending this MAXIMUS webinar! 22