Financial Management 101

Transcription

1 Financial Management 101 CalAct Conference September 20, 2012 Gloria Salazar Assistant General Manager/CFO

2 My Responsibilities Organization Structure Report to the GM/CEO Oversee Finance, Grants, Planning, IT, Materials and Parts, Contracts, Marketing CFO Responsibilities (RTD and Retirement Plan) Financial Health Compliance Allocation of Resources Sustainability 2

3 My Responsibilities AGM Responsibilities GM/CEO Support Board Directives Policies/Procedures Politics Industry Requirements/Best Practices Leadership Advisory Internal Operations Delegated Tasks/Attendance at Meetings ODAA (OMG) 3

4 Operating Guiding Principles Fiduciary Responsibility Compliance Transparency Transaction Trail 4

5 Operating Guiding Principles Fiduciary Responsibility Highest level of trust (government office) No room for lapse in judgment Watch where you re going; tripping is not an option People are watching, the press is watching Perception is reality 5

6 Operating Guiding Principles Fiduciary Responsibility in appearance and in fact 6

7 Compliance Operating Guiding Principles Compliance without knowledge is impossible Not enough staff or too many things to do in so little time is not an excuse Ignorance of the rule excuses no one Nothing is a secret in this industry Non-compliance may cost the entire business Internal controls are designed to preserve the integrity of transactions Some requirements are developed internally because they are the RTD 7

8 Examples of Rules FTA Circular D FTA F OMB Circular A-87 OMB Circular A-133 GAAP GAAS 8

9 Examples of Rules Questions: What governs the following? 1) Payroll 2) Human Resources 3) Planning/Service Development 4) Mobility 5) Maintenance 6) IT 7) Administrative Support 8) Transportation 9

10 Operating Guiding Principles Transparency Not bare all (OMG; 511) Gather the facts; present accurate information Whether honest or deliberate, mistakes create a false perception Say enough with pertinent and accurate information If you don t know what you re talking about, zip it 10

11 Operating Guiding Principles Transaction Trail CYA Auditable Must support the transaction Must be authorized by the appropriate staff Caution: If you are not authorized to approve a transaction or a contract, DON T; every signature represents a commitment 11

12 Decision-Making Balance: business, customers, employees The RTD Vision and initiatives of RTD, strategic plan Questions: not immoral, unethical, illegal? Another Question: can we afford it? Funding requirements Timely delivery of outcome 12

13 This is everyone s responsibility Financial Management Everyone has an impact in the organization s financial health The system of internal control must be tight Check and balance, reconciliation Documentation There needs to be a balance: business, customers, employees 13

14 Getting to Know Transit Business Where does the money come from? Where does the money go? 14

15 Getting to Know the RTD Business Two types of budget: Capital Operating Unlike clothing, we can t mix & match 15

16 Funding Requirements Type of expenditures (capital or operating) Scope of work Project description Eligible expenses Matching requirement Timely use of funds Project delivery Reporting requirement Periodic reports Closeout 16

17 Where Does the Money Come From? Fare Revenue Grants Federal State Local Contracts Advertising Revenue Property Taxes Sale of Assets 17

18 Where Does the Money Go? Operating Labor and Fringes Workers Compensation Materials and Supplies Services Insurance Third Party Claims Utilities Purchased Transportation Capital 18

19 Cost Drivers Wages Overtime Premium Pay for Excessive Absenteeism Fringe Benefits Medical Pension Reserves Workers Compensation Fuel Third Party Liability Borrowing Costs 19

20 Budget Monitoring Inter-department transfer Intra-department transfer Periodic discussions, reporting Participative process Identification of threats that will compromise the financial plan No surprises OMG!! 20

21 The Must Haves Effective financial management system Accurate Real time Secure Garbage in, garbage out Effective grants management system Application Post award (eligible expenses, schedule, project delivery, timely use of funds) Reporting Closeout 21

22 The Must Haves Compliant procurement system Procurement Manual Delegation of authority Solicitation procedures in line with applicable state and federal requirements Documentation procedures and filing system (procurement history) Reliable information technology Integrity of data (accurate, real time) Secure (access management) Change management Integrated Backup Disaster recovery Stability 22

23 The Must Haves Competent and reliable staff Proper training Management of turnover (backup support) Understanding and appreciation of the organization s strategic plan, mission, and vision Integrity, team spirit Culture of fiscal responsibility 23

24 Audits and Compliance Internal controls Types of audits and reviews External financial audit o Audit opinion Single Audit Federal Review State Review Local Funding Audit/Review 24

25 Audits and Compliance Federal reviews Annual Grantee Oversight Assessment Triennial Reviews State Management Oversight Financial Management Oversight Procurement Reviews Security and Assessment Reviews 25

26 Audits and Compliance Federal reviews Civil Rights Reviews ITS Reviews Planning Oversight Project Management Oversight 26

27 Triennial Review Areas 1. Legal 2. Financial 3. Technical 4. Satisfactory continuing control 5. Maintenance 6. Procurement 7. Disadvantaged Business Enterprise 8. Buy America 9. Suspension/debarment 10. Lobbying 11. Planning/program of projects 12. Title VI 13. Public comment process for fare and service changes 14. Half-fare 15. ADA 16. Charter bus 17. School bus 18. National Transit Database 19. Safety and Security 20. Drug-free workplace 21. Drug and Alcohol Program 22. Equal Employment Opportunity 23. ITS architecture 27

28 4 Types of Financial Audit Opinions Unqualified opinion Qualified opinion Disclaimer opinion Adverse opinion 28

29 What if Audit or Review Fails? Current and/or future funding Credit standing Confidence of the public Confidence of the employees Business Litigation/Claims 29

30 Measuring Performance Performance Indicators Productivity Efficiency Effectiveness If you are not measuring, you are not managing. 30

31 You Are a VIP RTD needs your due diligence (GIGO) You influence the bottom line You are the expert at what you do RTD needs your critical thinking, your creativity RTD needs that you care about the business No one department or person is more important than any department or person; if you believe you are, BYOA; LOL )) A leader can only be as successful as its members TEAM 31

32 Example of a Successful Campaign Supporting Fiscal Responsibility 32

33 Have fun and enjoy the ride Gloria Salazar Assistant General Manager/CFO San Joaquin Regional Transit District Stockton, CA (209) ext