Get In The Habit Of Avoiding Compliance Issues
With all of the changes we’ve seen over the past year with regard to federal standards, use of credit cards, crowdfunding and more, now is a good time to step back and take a look at your policies and procedures to determine that you have all the necessary policies in place, but that they are up-to-date. While it may not sound like much, this little bit of foresight can actually mean the difference between being prepared or failing when an issue arises.
Policies & Procedures For Government Entities
Uniform Guidance – The implementation of Uniform Guidance has ushered in sweeping changes to federal standards. As a result, all government entities are now required to have written policies and procedures in place to address internal controls with regard to compensation, fringe benefits, conflicts of interest, travel costs, record retentions and access, advance payments and reimbursement, cash management and procurement. The most significant changes are the policy changes required by the new procurement standards, which went into effect in June 2018. It’s imperative your policies are established in accordance with Uniform Guidance and up-to-date to avoid audit findings.
Human Resources – This year we are expecting to see greater emphasis on HR compliance issues with regard to state and federal regulations. The new Office of Compliance initiatives created two websites, www.worker.gov and www.employer.gov to help HR professionals evaluate updates and policy changes while providing users with effective compliance. Some of the regulations employers should pay attention to include paid sick leave, FMLA, sexual harassment, workplace immigration, FLSA overtime rules, minimum wage, compensation equity, gender discrimination and more. The Department of Labor has initiatives in place to track compliance and target repeat offenders.
Listen to episode 152, “Process Documentation: Crystal Clear Or Clear As Mud?” on Rea’s award-winning podcast, unsuitable on Rea Radio, to hear Bridgette Lafferty’s experience with process documentation.
Gifts Cards – Gift cards are popular to give for a variety of reasons, just make sure you have a policy in place. For instance, the budget for all gift purchases must be approved by the board in an open meeting to ensure the gifts qualify as expenditures with a proper public purpose. Furthermore, it’s essential to document and maintain approval of the purchases and purpose. These purchases cannot be made with federal grant or Title I funds and are subject to federal employment taxes through payroll disbursements if the value is $25 or more.
Crowdfunding – These internet donation platforms are now popular for school districts and teachers to raise money to offset the cost of class materials and other projects. While this might sound like a great idea, the practice can actually be pretty tricky. Solid regulatory practices must be in place to govern how these funds are used. Because there are numerous laws to follow concerning financial records, crowdfunding opens entities up to substantial liabilities and risks, including as how to deposit and record monetary transactions and confidentiality issues and disclosures. Schools could actually lose government funding if they fail to abide by the laws. A good policy will include which platforms are permitted, school board approval process and a point person in charge of reviewing all crowdfunding campaigns before they go live in order to protect the school’s reputation and credibility.
Credit Card Use – Ohio House Bill 312 went into effect in November of 2018 and outlines safeguards to protect government credit cards. As of February 2019, local governments and schools should have the necessary policies in place to determine how the entity’s credit cards can be used and who can use them (except for counties). HB 312 establishes general procedures and requirements that attempt to hold political subdivisions accountable for misuse, as well as the actual credit card users. The use of debit cards is banned (with minor exceptions) and formal policies should be enforced with guidance on credit limits, reissue periods, itemized receipts and the number of active cards. Additionally, rules pertaining to benefits and rewards, entities on cards, general possession and control of the cards and compliance officers are also part of the new rules.
Information Management – With the amount of information that’s stored electronically, entities must address the security of their information, especially the protection of private information. To this end, it’s vital to have policies in place to ensure all data is appropriately protected.
Sure, writing up and updating a series of policies isn’t a quick task, but it’s absolutely critical to maintain the safety and security of your government entity. Reviewing your entity’s policies every few years is a great habit to start.
Rea’s government services team brings extensive experience to the table when it comes to developing policies and procedures for public entities. We are also happy to review your existing policies to ensure compliance.
By Derek Conrad, CPA (New Philadelphia office)
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