APRIL 2016 GRASSROOTS SCIENCE PROGRAM State Authorization: Session Law 2015-241, House Bill 97, Section 15.18 An act to make base budget appropriations for Current Operations of State Departments, Institutions, and Agencies, and for other purposes. North Carolina Department of Commerce Fiscal Services Division Agency Contact Person - Program and Financial Monique Johnson, Accountant Telephone (919) 814-4637 Address Confirmation Letters To Heather Horton, CFO NC Department of Commerce Fiscal Management Division 4302 Mail Service Center Raleigh, NC 27699-4302 The auditor should not consider the Supplement to be safe harbor for identifying audit procedures to apply in a particular engagement, but the auditor should be prepared to justify departures from the suggested procedures. The auditor can consider the supplement a safe harbor for identification of compliance requirements to be tested if the auditor performs reasonable procedures to ensure that the requirements in the Supplement are current. The grantor agency may elect to review audit working papers to determine that audit tests are adequate. Auditors may request documentation of monitoring visits by the State Agencies. I. PROGRAM OBJECTIVES The primary objective of the Grassroots Science Museums Collaborative is to provide funds for the participating science museums to strengthen the programs of each member institution and provide coordinated science education outreach throughout North Carolina. II. PROGRAM PROCEDURES The Grassroots Science Museums Collaborative is a group of 30 museums throughout the State that jointly co-operate to further the goals of science museums and expand science education and outreach throughout the state. The conditions of funding are set forth in House Bill 97, Section 15.18. The membership applications are housed in the Museum of Natural Sciences and completed applications are reviewed by the Membership committee of the Grassroots Science Museums Collaborative and recommendations are brought before the Board of Directors. The disbursement of appropriated funds occurs through a base allocation for each member institution and additional percentages based on (1) the operating budget of each museum and (2) the degree to which the museum exhibits science. Appropriations less than $100,000 are disbursed in a lump. Appropriations $100,000 or more are disbursed on a monthly basis, as requested by each participating Museum from the Department of Commerce. C-4 COM-4 1
III. COMPLIANCE REQUIREMENTS 1. Activities Allowed or Unallowed s The activities of the members of the Grassroots Science Museums Collaborative are mandated by its bylaws. The NC Grassroots Science Museums Collaborative is a statewide partnership of museums dedicated to inspiring and educating today s youth and adults in Science, Technology, Engineering, and Mathematics (STEM) for North Carolina s competitive future. The NC Grassroots Science Museums Collaborative is a model of statewide collaboration among museums - big, medium and small - by leveraging resources and opportunities to provide STEM learning experiences to citizens throughout the state of North Carolina. Audit Objective Determine whether State awards were expended only for allowable activities. Suggested Audit Procedures 1. Identify the types of activities which are either specifically allowed or prohibited by the laws, regulations, and the provisions of contract or grant agreements pertaining to the program. 2. When allowability is determined based upon summary level data, perform procedures to verify that: a. Activities were allowable. b. Individual transactions were properly classified and accumulated into the activity total. 3. When allowability is determined based upon individual transactions, select a sample of transactions and perform procedures to verify that the transaction was for an allowable activity. 2. Allowable Costs/Cost Principles 1. According to the North Carolina Administrative Code (NCAC) Subchapter 03M, expenditures of State funds by any grantee shall be in accordance with the Cost Principles outlined in the Office of Management and Budget (OMB) Uniform Guidance 2 CFR Part 200 Subpart E Cost Principles. If the grant funding includes federal sources, the grantee shall ensure adherence to the cost principles established by the Federal Office of Management and Budget. 1. The auditor should reference the Cost Principles outlined in the Office of Management and Budget (OMB) Uniform Guidance 2 CFR Part 200 Subpart E Cost Principles during the monitoring and oversight process. 3. Cash Management Pursuant to G.S. 143C-6-21 and the State s Cash Management Plan, an annual appropriation of one hundred thousand dollars ($100,000) or less to or for the use of a nonprofit corporation may be made in a single annual payment. An annual appropriation C-4 COM-4 2
of more than one hundred thousand dollars ($100,000) to or for the use of a non-profit corporation shall be made in quarterly or monthly payments unless specified differently in the Appropriations Act. The Director of the Budget can make exceptions to this procedure. 1. Review deposits to insure that funds were received quarterly from Department of Commerce. 2. If an exception was made, obtain documentation approving the exception. 3. Review changes in bank balances for reasonableness and compare ending balances with cash budget balances; explanations should be obtained for significant or unusual variations. 4. Conflict of Interest According to 143C-6-23, every grantee shall file with the State agency disbursing funds to the grantee a copy of that grantee's policy addressing conflicts of interest that may arise involving the grantee's management employees and the members of its board of directors or other governing body before funds may be disbursed by the State agency. The policy shall address situations in which any of these individuals may directly or indirectly benefit, except as the grantee's employees or members of its board or other governing body, from the grantee's disbursing of State funds, and shall include actions to be taken by the grantee or the individual, or both, to avoid conflicts of interest and the appearance of impropriety. Audit Objective 1. Ensure adherence to a conflict-of-interest policy. Suggested Audit Procedure 1. Verify the existence of a written policy. 5. Eligibility s Basic eligibility rules for membership in the Grassroots Science Museums Collaborative are included in its bylaws. A copy of the bylaws can be obtained from the Department of Commerce. The funds for the Grassroots Science Program are appropriated in Session Law 2015-241, House Bill 97, Section 15.18. The Department of Commerce is required to disburse funds as appropriated in the Session Law. Audit Objectives 1. Determine whether required eligibility determinations were made, (including obtaining any required documentation/verifications), that individual program participants or groups of participants were determined to be eligible, and that only eligible individuals or groups of individuals participated in the program. 2. Determine whether amounts provided to or on behalf of eligible participants were calculated in accordance with program requirements. C-4 COM-4 3
Suggested Audit Procedure 1. Reference the Session Law to ensure funds were disbursed to eligible participants. 12. Reporting s As a condition for qualifying to receive Grassroots Science Program funds, each museum shall comply with the following: By November 1, 2015, each museum shall submit the following documentation to the Department of Commerce: 1. IRS (Internal Revenue Service) Form 990 to show its annual operating expenses, its annual report, and a reconciliation that explains any differences between expenses as shown on the IRS Form 990 and the annual report. 2. Each friends association of a museum shall submit its IRS Form 990 to show its reported expenses for the museum, its annual report, and a reconciliation that explains any differences between expenses as shown on the IRS Form 990 and the annual report, unless the association does not have both an IRS Form 990 and an annual report available, in which case, it shall submit either an IRS Form 990 or an annual report. 3. The chief financial officer of each county or municipal government that provides funds for the benefit of the museum shall submit a detailed signed statement of documented costs spent for the benefit of the museum that includes documentation of the name, address, title, and telephone number of the person making the assertion that the museum receives funds from the county or municipality for the benefit of the museum. 4. The chief financial officer of each county or municipal government or each friends association that provides indirect or allocable costs that are not directly charged to a museum under this section but that benefit the museum shall submit in the form of a detailed statement enumerating each cost by type and amount that is verified by the financial officer responsible for the completion of the documentation and that includes the name, address, title, and telephone number of the person making the assertion that the county, municipality, or association provides indirect or allocable costs to the museum. Each non-profit museum shall comply with 143C-6-23. The Grassroots Science Museums Collaborative prepares an annual report for the N.C General Assembly outlining programs, exhibits, educational development, visitor attendance, outreach participants, etc. that are a direct result of this program s funding. 1. Verify each museum submitted the required documentation to the Department of Commerce per the Session Law and complied with 143C-6-23. C-4 COM-4 4
2. Determine whether the reports submitted to the General Assembly include all activity and are supported by statistical and performance data from each participating museum. 3. Review the supporting records and ascertain if all applicable data elements were included in report. C-4 COM-4 5