Closeout Procedures for Provider Contracts

Please review your compliance with the following procedures to ensure an appropriate closeout of your Fiscal Year 2024 (FY24) Contracted Budget and return of any FY24 funds for the period ending 06/30/2024 within the required time. Please be mindful, all goods and services must be received by June 30, 2024, and can be invoiced after this period.

 

Invoicing

All invoices (including Equipment/Renovations for the reimbursement of expenses must be submitted no later than Friday, August 30, 2024 through PASSPort Financials.

 

In no case should bills remain unpaid longer than 30 days after the program is closed. If a budget modification is needed to reflect your spending patterns, submit the budget modification no later than Friday, July 26, 2024 through PASSPort Financials. Any modification submitted beyond this date may be rejected.

 

Payment After the End of the Program Year

Any expenses paid subsequent to the submission of the invoice for the last month of FY24 contract year must be vouchered on a Supplemental invoice (excluding Equipment/Renovations, and ‘Special Initiatives’ no later than Friday, August 30, 2024. Any invoices submitted after this date may be rejected and not considered for payment.

 

Bank Accounts

Multi-year Contractors do not have to maintain a separate bank account or open a new bank account for the new contract. However, the Contractor must maintain separate books and records and all required bookkeeping and accounting procedures/practices necessary to account for actual revenues and expenses for each fiscal year contract.

 

Year-End Inventory

Contractors must conduct a year-end inventory of all Fixed Assets, Food items and Consumable Supplies on hand as of June 30, detailing all items on site, including those that have not been paid for as of that date. Consumable Supplies include disposable items used in the preparation and service of meals; cleaning and maintenance supplies for the kitchen, dining room and program areas; office and general supplies. All supplies are to be in one inventory; there should not be separate inventories for different types of supplies. However, a separate inventory for the Equipment called the Equipment Inventory Report Template must be currently maintained as prescribed in the Standard Health and Human Service Invoice Review Policy

 

Payroll

If the last bi-weekly pay period does not end on the last calendar day of the contract year, the contractor must prorate the salary for that pay period. One method is to issue two checks for this period: (1) a check from the current year covering the remaining days of the present budget e.g., 06/30/2024; and (2) a check from the new contract budget for the remainder of the pay period.

 

Petty Cash

Contractors are to prepare a Petty Cash reconciliation form, record the petty cash expenses, deposit all monies remaining in the fund and credit the Petty Cash-on-Hand Account.

 

Security Deposits (if applicable)

In order to close this account in the current Program year, the contractor must issue a check from the next Program year account for the amount of the security deposit. The check will be deposited in the current year bank account. A sample entry to record this transaction is as follows:

 

City Fiscal Year 2025 Books:

DEBIT Cash in Bank

CREDIT Security Deposits

 

City Fiscal Year 2024 Books:

DEBIT Security Deposits

CREDIT Cash in Bank

 

Unpaid Bills

The program’s books and records are subject to audit by NYC Aging. Therefore, any unpaid bills, which are not available to the independent auditor (CPA) for verification, will not be honored by NYC Aging.

Note: FUNDS FROM FY25 CANNOT BE USED TO PAY EXPENSES OF FY24.

 

Records Retention

According to Appendix A Section 5.02 of your contract, you must retain your books and records for six years after the final payment.

 

Return of Outstanding Advance Balance

Providers must pay all outstanding FY2024 bills through 06/30/2024 promptly. Any unspent balances for FY2024 must be returned to New York City Department for the Aging (aka, NYC Aging) no later than August 30, 2024.

 

Providers may send the check payable to NYC Department for the Aging and send it to:

Department for the Aging

Bureau of Financial Services: Chief Financial Officer

2 Lafayette Street (11^th Floor),

New York, NY, 10007

 

The entry to record this transaction is:

DEBIT Advance Payable to NYC Aging

CREDIT Cash in Bank

 

Please return these funds to the Department as required to avoid possible impact on your payments and future City contracts.

 

Audit Date

The program’s books and records are subject to audit by NYC Aging. Therefore, you are expected to close your books by August 30, 2024. If your books and records are not ready at the time the auditor contacts you, you will be in non-compliance of Article 5 of your underlining contract.

 

Records Required by CPA Firms to Perform Audits

1. Contract Agreement and all internal budget modifications including an approved budget for the period ending June 30, 2024.
2. Minutes of the Board of Directors’ meetings.
3. Current listing of Board of Directors including home and/or business address and telephone number.
4. Monthly invoices that were submitted to NYC Aging
5. General ledger, general journal, cost allocation records, subsidiary cost ledgers (if applicable), cash receipts journal, cash disbursements journal, check registers, payroll registers, earning records and other accounting records containing information relative to the contract.
6. The following:
   1. Schedule of accounts payable at 06/30/2024.
   2. Schedule of accrued salaries as of 06/30/2024.
   3. Vacation and sick leave policy changes, if any, since 07/01/2023.
   4. Schedule of accrued vacation and sick pay at 06/30/2024.
7. The following:

7. 1. Bank statements and canceled checks at 06/30/2024.
   2. Bank reconciliation at 06/30/2024.
   3. Schedule of bank charges and interest income during July 1, 2023 to June 30, 2024.
   4. Listing of persons authorized to sign checks.

8. Trial balance at 06/30/2024.
9. All payroll tax returns filed: Federal, State and City (941’s, NYS – 45 and NYS – 45 – ATT returns) for the period of July 1, 2023 to June 30, 2024.
10. All time reports of employees, tax withholding authorizations, W-4’s and other supporting information relating to payroll type disbursements.
11. Schedule of salaries per employee including title, social security number and budget.
12. All personnel records of employees.
13. All vendor invoices paid with project funds.
14. A complete and updated Equipment called the Equipment Inventory Report Template must be currently maintained as prescribed in the Standard Health and Human Service Invoice Review Policy
15. Inventory of food and consumables on hand as of June 30, 2024.
16. All back-up data which support program services reported to NYC Aging.
17. Records which support any program income and/or match costs.
18. Any New York City licenses, if applicable.
19. Schedule of cash advances from NYC Aging for the period ending to June 30, 2024.
20. Schedule of consultants including, but not limited to contractual agreements, bid requirements, type of service(s) provided, basis and rates of pay for the charges (e.g., amount per hour, per session etc.), total amount paid per consultant for the contract audit period.
21. Rental Leases, Equipment Rental, Catering Agreements including, but not limited to bid requirements and other related supporting documentation.
22. Prior year NYC Aging Audit Report.

 

Reminder: Generally, NYC Aging does not audit program’s fund-raising activities. Therefore, separate books and records should be established and maintained for these funds.

 

Recovery of Funds Based on Audit Findings

• NYC Aging must recover funds received in excess of allowable (audited) expenses. When audit findings report questioned units and/or questioned costs, a “case by case” review will be conducted that will conclude with written recommendations(s) and justification(s) for allowance or disallowance.
• Types of questioned costs or units to be reported in the Final Audit include, but are not limited to the following:
  • Basis for Questioning: Specific disallowable costs
    • Examples: Fines and penalties; State and Local Taxes; Costs not chargeable to the current grant (costs incurred before or after the grant period); Interest on bank loans.
  • Basis for Questioning Unreasonable costs.
    • Examples: Purchasing a 2 month’s supply of materials during the last month of the contract; Administrative cost not commensurate with the purpose of the contract.
  • Basis for Questioning Allocability
    • Examples: Indirect costs charged to another funded program at the same time. There must be a written allocation plan documenting how various costs are spread across major functions/activities (e.g., Daycare, Youth, Senior Center etc.)
  • Basis for Questioning: Documentation
    • Examples: Lack of time and attendance records, invoices, record-keeping forms for units of service delivered; lack of support for the recording of non-federal contributions.
  • Basis for Questioning: Unapproved Costs
    • Examples Unauthorized personnel changes, rent, meals costs, consultants, staff out-of-town trips, equipment/renovations expenses,
  • Basis for Questioning: Propriety
    • Examples: Cost incurred with the intention to defraud the City.
  • Basis for Questioning: Equipment Lease or Rental, Consultant/Subcontracted Services, Catering Agreements
    • Examples: Absence of 3 bids dated before the agreement is signed; Existence of 3 bids dated after the Agreement is signed.

 

The allowance or disallowance of questioned units of service will depend on the reason for the questioning. The false documentation of services not delivered will result in a definite recovery of funds. Questioned units due to lack of supporting documentation will be allowed or disallowed after the review process is completed.

 

Thank you for your cooperation