Monitoring Principles

Management Systems and Best

Practices
Federal Requirement
 The CSBG Act of 1998 requires the State CSBG office
to monitor local community action agencies at least
once every three years.
 The National Association for State Community
Services Programs (NASCSP) established a
monitoring taskforce to develop a framework for the
development of strong and effective monitoring
systems for the nation’s community action agencies.
 The federal Office of Community Services has agreed
to adopt NASCSP’s Monitoring Principles and plans to
issue them in the form of an official Information
Memorandum.
Guiding Principles to Monitoring

 Mutual Respect – In working with local

boards and staff, we will value the
unique knowledge, ability, and
independence of each. We are
committed to treating all fairly and to
maintaining credibility by matching
actions with words.
Guiding Principles (continued)
 Open Communication – Effective
communication is key in facilitating good
working relationships with CAAs. The purpose
of our communication is to assist in developing
solutions to problems, to share program
improvement ideas, and provide information
on new developments in the anti-poverty field.
We are committed to listening to you and to
gain an understanding of your operations and
to assist you in pursuing your priorities.
Guiding Principles (continued)

 Joint Problem Solving – We believe a

team approach to problem solving is in
the best interests of all parties. We want
to promote an environment in which we
all will be open to change and can work
together in exploring options and
developing mutually agreeable solutions.
Monitoring Practice #1
 State monitors will look at more than
compliance with program rules and
regulations.
 Virginia OCS will take a systems view of each
CAA.
 We will assess the quality of service delivery
and program operations throughout the
agency.
 A truly “healthy” CAA is continually striving to
find better ways to use programmatic
resources to help people move out of poverty.
Monitoring Practice #2
 State Monitors will assess the effectiveness of
the board of directors.
 An effective board is critical to the overall
health of an agency.
 An effective board is mission-driven, evaluates
agency programs and operations, ensures
agency resources are used effectively,
honestly evaluates the Executive Director’s
performance and leadership, monitors the
financial status of the agency, and works to
ensure the agency operates within legal
guidelines.
Monitoring Practice #3
 State monitors will assess the level of administrative
and leadership skills of agency management.
 An effective CAA is flexible and responsive to the
needs of individuals and the communities it serves.
 We will assess the agency’s many management
systems and how those systems are applied to
multiple programs and activities.
 Monitors will seek to assess the degree to which CAA
management is leading the organization towards more
effective and responsive service delivery.
Monitoring Practice #4
 Monitoring is but one part of a process to strengthen
CAAs and the entire community action network.
 Monitoring will provide the agency with feedback about
its programs and its ability to change lives.
 Monitoring seeks to assist CAA leaders in making
changes to improve their organizations.
 Monitoring provides CAAs with both an “early warning
system” and a “best practices catalog.”
 Monitoring provides CAAs, VACAP, and OCS with
data that can be used to provide training and technical
assistance that will build network-wide capacity and
improve its effectiveness.
OCS Monitoring Procedures
 OCS Desk Review
 Review of By-Laws, Personnel Policies, and
Financial Policies/Procedures
 Review of last monitoring report
 Review of last A-133 audit report & Form 990
 Review whether program and financial reports are
timely, accurate, and complete
 Review of board composition/terms in last refunding
application
 Review of board minutes
OCS Monitoring Procedures (cont.)

 On-Site Monitoring Review

 Management Team Interview
 Financial Management Interview
 Board of Directors Interview
 Staff Focus Group
 Review documentation for a sample of financial
transactions, a sample of personnel files, and a
sample of client files.
 Review monitoring reports issued by other funding
sources.
 Optional Exit Conference with Executive Director
and/or Board members
OCS Monitoring Procedures (cont.)

 Issuance of written draft monitoring

report within 30 days of on-site visit
 Draft monitoring report emailed to
Executive Director to check facts, clarify
findings, and solicit comments
 Final monitoring report mailed directly to
Board Chair and Executive Director
OCS Monitoring Procedures (cont.)

 Final Monitoring Report may include:

 Findings – Instances of non-compliance with
statutes, regulations, policies, or procedures of
agency, Commonwealth of Virginia, and/or federal
agencies.
 Weaknesses – Conditions that might lead to
findings or problems for agency including
deficiencies in management and governance
systems.
 Recommendations – “Best practices” that can
contribute to increased agency effectiveness.
OCS Monitoring Procedures (cont.)

 Written response and Corrective Action Plan

 A written response and corrective action plan
approved by the board is due to OCS within 60
days of date a final monitoring report is issued
 A corrective action plan approved by the board is
required for all “Findings” and “Weaknesses”
identified in the final report.
 Written response must also outline how agency
plans to address all recommendations contained in
the final report.
OCS Monitoring Procedures (cont.)

 Corrective Action Plan must include:

 Date of board meeting at which the final monitoring
report and Corrective Action Plan was reviewed by
the board.
 Actions planned to correct findings and
weaknesses
 Timeframes for completing planned corrective
actions
 Staff, board, and/or financial resources assigned to
ensure implementation of planned corrective
actions
OCS Monitoring Procedures (cont.)
 Follow-Up Reviews
 OCS will issue a letter either accepting Corrective Action Plan
or requesting additional documentation.
 OCS will review board meeting minutes to monitor whether
agency is implementing corrective action plan.
 When findings and/or weaknesses are numerous or major, a
follow-up on-site visit will be conducted to document
implementation of corrective action plan.
 If findings and/or weaknesses are numerous or major, OCS
may increase frequency of monitoring reviews to annual on-
site visits.
 If agency fails to respond to monitoring report or fails to
correct findings and weaknesses, OCS will begin procedures
to terminate funding and rescind community action
designation.
OCS Monitoring Procedures (cont.)

 In response to whatever findings and

weaknesses are identified by our monitoring
reviews, OCS is committed to:
 Providing OCS training and technical assistance to
agencies who request it;
 Work with other CAAs in Virginia to provide peer-to-
peer support and technical assistance;
 Work with VACAP and Virginia’s CAAs to provide
quality training and technical assistance that is
responsive to local needs; and that builds capacity
and improves the effectiveness of Virginia’s
community action network.
Best Practices in Management and
Governance Systems
 OCS embraces the belief that identifying
best practices in management and
governance systems requires it and the
entire community action network to be
open to change and committed to
creating and fostering a learning
environment!
Best Practices in Management and
Governance Systems

How Do
You Eat
an
Elephant?
Best Practices in Management and
Governance Systems

One Bite at
a Time!
Best Practices in Management and
Governance Systems
Like eating an elephant one bite at a
time…..building the capacity and effectiveness
of Virginia’s community action network will be
a gradual, continuous process that will require
the knowledge, abilities, and hard work of
OCS, VACAP, and each community action
agency’s staff and board….and perhaps most
importantly, a commitment to taking that first
bite!
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System
 Tri-partite board structure in compliance
with state term limits
 Active committees structured to fully
address fiduciary and governance
responsibilities
 Orientation for new board members

 Board participation in establishing agency

vision and long-term strategic goals
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Board monitors implementation of strategic
goals (plan) and objectives.
 Annual review of By-Laws, Personnel
Policies, and Financial Policies/Procedures
and amending of same as needed.
 Use of community needs and service gap
analysis to establish service priorities and
adopt program objectives.
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Review and approve agency-wide budget.
 Ensure agency budget reflects strategic
goals and objectives.
 Regularly review financial reports including
budget-to-expenditure and revenue data.
 Participate in selection of a CPA firm to
provide audit services.
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Have audit firm present audit report to board or
board committee, answering questions about same.
 Ensure all audit findings, reportable conditions, and
instances of noncompliance are corrected.
 Re-bid audit services every three years.
 Every three to five years select a different CPA firm
to provide audit services; or at minimum, ensure
CPA firm uses a different lead auditor.
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Review IRS Form 990 and ensure it is
complete.
 If financial reports, audit reports, and/or
vendor payments are regularly late, find out
why and correct.
 Build an unrestricted cash balance equal to
three months of salary/fringe costs.
 Use lines of credit only for temporary and/or
emergency cash flow needs.
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Review agency salary scale/structure every
three years.
 Request salary comparability study every
five years.
 Evaluate annually the performance and
leadership of CEO/Executive Director.
 Establish performance goals with the CEO
that reflect agency’s strategic objectives.
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Monitor staff development/training needs,
plans and outcomes.
 Monitor program performance by comparing
outcome goals to outcomes achieved.
 Formally evaluate major programs every
three to five years including regulatory
compliance and outcome analysis.
Best Practices in Management and
Governance Systems – First Bites!
 Board Governance System (cont.)
 Adopt and enforce conflict of interest
policies.
 Develop “Board Workplan” and evaluate
own performance annually, identifying board
training needs.
 If applicable, ensure board understands and
implements Head Start shared governance
policies and procedures with Parent Policy
Council or Committee.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Review financial policies/procedures
annually to ensure they reflect actual
practice.
 Maximize segregation of duties.

 Maintain security of financial operations

including password protection of all
computerized financial records.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Budget procedures:
 Program directors/managers prepare program budget in
consultation with CFO;
 CFO prepares master (agency-wide) budget;
 Explore alternative means of providing services;
 Master budget approved by CEO/Executive Director;
 Master budget reviewed by board finance committee and
approved by full board.
 Budget to expenditure analysis completed monthly by
CFO and each program director with budget modification
requests approved by CEO and board as needed.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Cash receipts recorded and promptly
deposited.
 Restrictively endorse all checks.

 Monthly comparison of recorded cash

receipts to general ledger.
 Include actual revenue data in all financial
reports to CEO and board.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Use only numbered checks.
 Store blank checks in secure location.
 Retain all voided checks.
 Follow agency procedures governing dual
signatures on checks.
 Adopt and follow policy for immediate bank
notification when authorized check signers
change.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Purchasing and Procurement
 Adopt and enforce agency procurement policies.
 Purchase request approvals by program

directors/managers certify sufficient funds are

budgeted and that purchase is an allowable and
necessary expense according to program
guidelines.
 CFO or CEO authorizes all purchases and

expenditures.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Accounting Procedures
 Monthly reconciliation of general ledger and
bank statement completed by 10th of following
month and approved by CFO or CEO;
 Vouchers and supporting documents presented

with checks for approval and signature;

 All supporting documents, invoices, and bills

marked paid.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Payroll
 All payroll disbursements documented by time
and attendance reporting and supported by
activity reporting;
 Adequate controls for controlling and authorizing

overtime for non-exempt employees;

 Federal and state tax and other withholding

authorizations documented;
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Payroll
 Payroll account reconciled monthly by person
not directly involved in payroll preparation;
 Procedures in place to ensure that withheld

payroll taxes are paid promptly to the IRS and

IRS Form 941’s submitted in timely manner;
 All employees paid by check or direct deposit.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Travel
 Adopt, maintain and follow written travel policies and
procedures;
 Ensure travel, lodging, and per diem reimbursements are
reasonable;
 Require receipts in support of all board and staff travel
and lodging reimbursements;
 Maintain mileage logs for all agency-owned or leased
vehicles;
 Require annual DMV record checks for all operators of
agency vehicles;
 Require annual drug testing of all staff regularly
transporting clients in agency vehicles.
Best Practices in Management and
Governance Systems – First Bites!
 Financial Management
 Property
 Maintain inventory records for all non-
expendable property (equipment) including item
cost, location, source of funds, and purchase
date;
 Regularly update inventory records,
documenting disposal of obsolete or damaged
equipment;
 Check inventory records against actual physical
inventory on an annual basis.
Best Practices in Management and
Governance Systems – First Bites!
 Personnel Administration
 Review and update Personnel Policies annually using the
expertise of an attorney knowledgeable in personnel law;
 Ensure all staff have access to Personnel Policies and are
promptly informed of changes to them;
 Provide all new staff with an orientation pertaining to agency
mission, programs, services, policies, and procedures;
 Maintain organization chart that reflects current structure and
relationships;
 Adopt an agency-wide payscale;
 Complete a wage comparability study every five years;
Best Practices in Management and
Governance Systems – First Bites!
 Personnel Administration
 Ensure performance evaluations are completed
annually for all staff;
 To the maximum extent possible, relate employee
performance goals and evaluation factors to
program or operational objectives and outcomes;
 Identify and document staff training and
development needs and plans when performance
evaluations are completed;
 Review and, if needed, update job descriptions as
performance evaluations are completed.
Best Practices in Management and
Governance Systems – First Bites!
 Personnel Administration
 Personnel Files for all Employees should include:
 Employment application and/or resume;
 Documentation that references were secured;
 Copy of current job description;
 Copies of annual performance evaluations;
 Forms I-9, W-4, and VA-4;
 If applicable to job duties, Criminal History and DMV
Driving records check;
 Salary/Wage authorizations;
 Checklist recommended.
Best Practices in Management and
Governance Systems – First Bites!
 Agency and Program Planning System
 Maintain a program development and grant writing
component within organizational structure.
 Preserve capability to develop new programs by
assigning program and grant refunding
responsibilities to applicable program managers.
 Ensure CEO and board approval of all new
program and funding initiatives.
Best Practices in Management and
Governance Systems – First Bites!
 Agency and Program Planning System
 Ensure completion of a comprehensive needs
assessment every three years.
 If applicable, coordinate needs assessment with
Head Start community assessment.
 Review needs assessment data when establishing
strategic goals and objectives.
 Hold public meetings or hearings annually to solicit
input and comments pertaining to needs of low-
income community.
Best Practices in Management and
Governance Systems – First Bites!
 Monitoring and Evaluation Systems
 Monitoring Systems ensure
 Programs are operated in compliance with
federal, state, and contractual requirements;
 Clients meet guidelines for program eligibility;

 Agency policies and procedures are followed.

 Program Evaluation Systems ensure

 Programs designs and service strategies are
effective by achieving desired results/outcomes
and by impacting the clients and communities
being served in a positive manner.
Best Practices in Management and
Governance Systems – First Bites!
 Monitoring and Evaluation Systems
 Effective monitoring systems involve on-going or
regular activities and should be incorporated into
the job descriptions of program managers and
directors.
 Examples of monitoring activities include
 Regular or periodic review of client files by managers to
determine if program policies and procedures are being
correctly implemented and eligibility requirements applied;
 Regular or periodic review of personnel files by senior
management or CEO to determine if personnel policies
are being correctly implemented
Best Practices in Management and
Governance Systems – First Bites!
 Monitoring and Evaluation Systems
 Major programs should be evaluated every three years.
 Program evaluation reports should be reviewed by a board
committee and/or board and used in developing and/or
revising the agency’s strategic plan.
 While a program evaluation may include a review of
compliance issues normally addressed in monitoring
activities, program evaluations go beyond compliance to
assess whether desired outcomes are achieved, how the
number or quality of outcomes might be enhanced or
improved, and given the relative cost and benefits of each
program, guides the board in prioritizing and allocating scarce
human and financial resources to fulfill the agency’s mission
and achieve its strategic objectives. (Getting the most bang
for our bucks and getting the results or changes we most
value as a community and agency.)
Best Practices in Management and
Governance Systems – First Bites!
 Miscellaneous Issues
 Written policy for safeguarding confidentiality of
client records.
 To reduce errors, standard intake form with
program supplements; and an income calculation
worksheet.
 Business resumption plan (store copy of financial
records, client data, and other critical records off-
site).
 Provide information on how to access child support
enforcement services.