Financial statements for the Foundation will be presented on the accrual basis in order to conform to the American Institute of CPA’s Generally Accepted Accounting Principles, but the underlying books and record keeping may be kept on a cash basis.

Internal Accounting Control System: The safeguarding of assets and the reliability of financial records are the primary objectives of the Foundation’s internal accounting controls. An organizational chart that clearly defines the organization’s activities by function shall be established and maintained as well as a detailed chart of accounts that defines the types of items chargeable to each category. A system of controls over revenues and expenses, including comparisons with approved budget estimates shall be established and maintained.

Back-up of Accounting Data: (Effective October 2002) To protect against the loss of accounting data, the Foundation's accounting files are copied onto a hard disk and floppy disk on a daily basis. On a weekly basis, updated files are copied onto a floppy disk and maintained at an off-site location.

Audits: OMB requires any nonprofit corporation handling government funds to be audited (OMB Circular A-133). Auditor service fees must include the statement that it is on condition of an audit acceptable for the federal agency. AREF will be audited annually.

Capitalization: All depreciable assets (equipment) purchased with AREF funds for permanent long term use with a cost over $5,000 will be capitalized using standard accounting methods. Capitalized assets will be reflected on the Balance Sheet reviewed by the Board.

Reconciliation: The Controller will reconcile the bank statements monthly.

Annual Budget: Beginning FY1996 (January 1) the Foundation will present an expected annual budget to the Board for approval. At Board meetings, financial reports are presented by the Treasurer and reviewed by the Board.

Check Receipt: (Effective October 2002) All checks received by the Foundation must be recorded into a log book maintained by the Senior Grants Manager. The log must include the following information: date of receipt, name of company, check amount, check number, invoice number (if applicable), project number, date presented to Controller for deposit and any necessary comments. After checks are recorded into the log, the checks are presented to the Controller for deposit in accordance with the Foundation’s deposit of funds policy. The Senior Grants Manager issues a letter to donor.

Deposit of Funds: All funds received are to be date stamped upon receipt in the AREF office and are to be deposited within three (3) days of receipt.

Financial Loans: No financial loans may be made to any Director, Officer or staff member of the Foundation, nor to any research personnel for any purpose.

The programs and operations of the Foundation are subject to the scrutiny and review of the VA Inspector General (I.G.). A formal list of suggested audit procedures are listed in the OMB publication #1171, “Compliance Supplement for Audits of Institutions of Higher Learning and Other Non-Profit Institutions."

Separate accounting shall be kept of unrestricted and restricted funds. All unrestricted gifts, grants or bequests shall be considered available as corporate operating funds unless appropriated by the Board for a specific purpose.

Separate accounting shall be maintained for each research activity being conducted through the Foundation. Each research activity budget shall include an Administrative Overhead Fee/Indirect Cost Rate. The fee level will be determined by the Board of Directors annually, but shall not be less than 10% of the total estimated project cost. In certain special cases, the Administrative Overhead Fee/Indirect Cost Rate may be adjusted or waived at the discretion and at the direction of the Board of Directors. All Administrative Overhead Fees/Indirect Cost Rates shall be available as corporate operating funds.

All funds are to be deposited into an appropriate, federally insured, interest-bearing account(s) in the name of the Atlanta Research and Education Foundation. No funds may be accepted unless they are made payable to the Atlanta Research and Education Foundation. Interest accruing from Foundation deposits and/or investments shall be reflected in the corporate operating fund account.

Accounts established to support research and development and education are ultimately the responsibility of the Board of Directors. In an effort to maximize usage and to ensure that we meet the highest accounting standards, principal investigators/account holders are expected to utilize accounts for the purposes indicated by the donor, sponsor or grantor within the stipulated time frame.

Restricted Accounts
Inactive restricted accounts (e.g. ongoing projects), with no activity for a continuous 24 month period, will be reviewed by the Executive Director, and subsequently the primary investigator/holder of the account will be asked to provide a written plan for utilization of the funds within 30 days of receipt of the Executive Director’s memorandum. If the investigator/holder fails to respond, the Board reserves the right to contact the sponsor to return the funds, or absorb the funds into the general account, if allowable. If AREF finds that the PI has left the institution and failed to leave closeout information, the Board reserves the right to dispose of the funds in a fashion which benefits the mission of the AREF.

Unrestricted Accounts/Residual Funds
Inactive unrestricted accounts, with no activity for a continuous 12 month period, will be reviewed by the Executive Director, and subsequently the primary investigator/holder of the account will be asked to provide a written plan for utilization of the funds within 30 days of receipt of the Executive Director’s memorandum. In addition, the investigator/holder of the account will be notified that the account will be charged a non-use fee of 10% of the available balance (after 12 months of no activity). If the investigator/holder fails to respond, the Board reserves the right to contact the sponsor to return the funds, or absorb the funds into the general account. If AREF finds that the PI has left the institution and failed to leave closeout information, the Board reserves the right to dispose of the funds in a fashion which benefits the mission of the AREF.

All donations must be made payable to the Atlanta Research and Education Foundation (AREF), not to any individual. Any donation made payable to an individual shall be returned to the donor. Any donation not accompanied by a donation letter shall be acknowledged in writing by the Foundation. Such acknowledgment shall include the purpose to which the Foundation will apply the donation.

Donations in support of research by a Principal Investigator can only be accepted if the Principal Investigator holds a VA appointment. Such donations can be in support of specific research projects or of a specific PI’s general research.

Upon receipt, all funds are to be deposited into an appropriate, federally insured, interest-bearing account(s) in the name of the Atlanta Research and Education Foundation. Interest income shall be included in the corporate operating fund account.

Principal Investigators shall be notified of receipt of funds and when they will be available for use. All research projects must receive a formal review by the VA R&D Committee and be approved by the appropriate committees and subcommittees prior to any funds being expended by the Foundation.

Separate accounting shall be kept of unrestricted and restricted funds. All unrestricted gifts, grants, or bequests not restricted to a specific Principal Investigator by the donor shall be considered available as corporate operating funds unless appropriated by the Board for a specific purpose.

Separate accounting shall be maintained for each research project being conducted through the Foundation. Principal Investigators shall be sent financial statements, at least quarterly, as to the status/balance of their research account(s) unless other arrangements are made.

Each research activity shall include an Administrative Overhead Fee or an Indirect Cost Rate. The fee level will be determined by the Board of Directors annually, but shall not be less than 10% of the total estimated project cost. In certain special cases, the Administrative Overhead Fee/Indirect Cost Rate may be adjusted or waived at the discretion and at the direction of the Board of Directors. All Administrative Overhead Fees/Indirect Cost Rates shall be available as corporate operating funds. For Federally funded grants, the Indirect Cost Rate will be what is negotiated with the agency.

All Foundation checks may be signed by the Executive Director for amounts up to $1,500 exclusive. Checks of $1,500 inclusive or more must be co-signed by the Executive Director and an authorized Board member or by two authorized Board members.

Administrative Expenses: All expenditures from the corporate operating funds must be limited to those which further the purpose of the Foundation. This includes expenditures for equipment and supplies, personnel, subscriptions, education, travel and entertainment.

Research Accounts: Principal Investigators are responsible for the research activity accounts. Distribution of funds will be from the appropriate research account. All requests for expenditures must be made and approved by the Principal Investigator or designee. If the Executive Director reviews a proposed expenditure and deems it inappropriate, the Principal Investigator may seek review by the Board of Directors for final disposition. NOTE: All disapproved requests will be retained in the AREF Research Files as evidence of review and disapproval for future audits.

Entertainment Expenses: Foundation research funds may be used for reasonable business-related entertainment expenses if the primary purpose of the expense item is related to a research activity. Such expenses are to be charged against the appropriate research activity account.

Foundation corporate operating funds may also be used for reasonable business-related entertainment expenses if the primary purpose of the expense is related to furthering the purpose of the Foundation and/or research activities at the VAMC.

Reimbursement of VA Services: Specific medical center costs incurred for clinical/diagnostic/support services provided solely for the purpose of obtaining data on patients in a funded study, exclusive of routine patient care, should be reimbursed. Such reimbursements should be made from the appropriate research activity account. Reimbursable services may include, but are not limited to: Radiology, Laboratory, Pharmacy, and specific sections of Medicine and Neurology. Projected Medical Center costs that may be generated beyond normal patient care are to be budgeted by the Principal Investigator and reserved for payments against bills of collection from the VAMC. Effective July 1, 2002, a clinical impact statement will accompany all agreements involving patient care.

Purchasing: Supplies and expenditures in support of research activities such as chemicals, animal, laboratory supplies, etc., may be requested by the Principal Investigator by submitting the appropriate paperwork to the accounting assistant. All purchase requests must be submitted on Foundation purchase order forms, not VA forms. The accounting assistant reviews paperwork for appropriateness and to ensure all items are filled in properly. The Executive Director reviews and approves all purchases over $500. The accounting assistant orders all items; the Principal Investigator reviews orders upon receipt and then returns the packing slips to the accounting assistant as verification of receipt. Payment is made after an original invoice is received.

If the Foundation Controller reviews a proposed expenditure and deems it inappropriate, the Principal Investigator may seek review by the Board of Director for final disposition.

NOTE: All disapproved requests will be retained in the AREF Research Files as evidence of review and disapproval for future audits.

All expenditures over the amount of $500 must be approved by the Executive Director as well as the Principal Investigator.

Supplies, equipment, and needed services may be purchased on the open market. Any item over $5,000 must have at least three (3) bids unless sole source justification can be provided. All equipment items over $5,000 are to be capitalized.

Equipment Inventory/Limitations: Equipment is any depreciable asset purchased for permanent long term use. All corporate purchased equipment is to be inventoried annually and records maintained in the corporate offices on the location and assignment. Equipment purchased with Foundation funds must be tagged with a Foundation property tag and registered with Acquisitions and Material Service as non-government equipment on loan to the VA.

The Board of Directors must approve the transfer or sale of all corporate-purchased equipment. Should a Principal Investigator want to transfer equipment to another not-for-profit institution, a written request must be submitted to the Board. No equipment may be transferred to a for-profit institution. Correspondence to and acknowledgment from the receiving entity should be retained in the AREF files for documentation. The Foundation will retain physical possession of all equipment until such time that it is distributed to an appropriate individual or entity.

All equipment purchased by the Foundation must be maintained using Foundation funds. Foundation funding may be used to repair VA equipment if the PI/Member has no VA funds but continues to use VA equipment in support of approved research funded through the Foundation.

Foundation research monies may be used to purchase hardware accessories for VA-purchased research equipment so long as attachments are external, can be identified and removed. The sole justification acceptable for purchasing attachments to VA equipment with Foundation research monies is the 10 requirement for such attachments in order to complete VA-approved Foundation research projects. In the rare instance where internal attachments to VA research equipment are required, such attachments must be donated to the VA and the Foundation will lose all rights to any part of the equipment.

Foundation funds may not be used to purchase hardware accessories for equipment personally owned by a Member, Director, staff member or researcher. Foundation funds may not be used to repair the personal property of any Member, Director, staff member or researcher.

Continuing Education: Expenditures for continued education, including scientific books, conference and registration fees, society memberships, etc., specifically relating to a research activity may be requested by submitting the appropriate paperwork to the Foundation. Subscriptions or professional association dues, with the exclusion of license fees, may be paid from appropriate research or general operating funds upon approval by the Executive Director. All dues and subscriptions must list the address of the VA.

Travel: Foundation funds may support domestic or foreign travel expenses to bona fide scientific meetings or for other research and/or educational conference/seminars. Travel charged to a research account must be limited to purposes related to that research activity. Travel charged to the corporate operating account must limited to purposes which further the mission of the Foundation.

All travel by VA employees paid by the Foundation must be pre-approved in accordance with the appropriate policies of the Veterans Health Administration (a request for authorized absence, and submission of VA Form 0893, “Advance Review of Offer to Donate Support for Official Travel”). This approval allows VA salaried employees to travel on Authorized Leave. A memo requesting funds for travel must be submitted in advance of the travel. When travel has been completed, a voucher request for expense reimbursement should be submitted. Foundation funded travel for VA salaried employees or VA WOC employees may be at the rates set by the Board of Directors, not necessarily at government per diem rates and rules, unless traveling on federal funds. Current per diem rate set by the Board of Directors for miscellaneous and incidental expenses is the latest per diem rate set by the IRS. Lodging expenses will be paid for original receipt charges up to the normal convention hotel rates.

Travel Restrictions: On trips, VA and non-VA employee meal expenses may not exceed the per day amount set up by the corporation’s Board, plus a “reasonable” amount for hotel (determined by the city and meeting site hotels involved). Maximum transportation reimbursement should be limited to the equivalent direct coach fare by airplane, plus reasonable local ground transportation costs. First class airline fare may be approved only if justified based on physical disability. Requests for items that cost over $25 should be backed up by original receipts. Cash advances can be provided for travel only if requested and approved. VA salaried employees who are traveling at Foundation expense, must have an approval on file for the acceptance of gifts/money from the corporation before reimbursement for per diem and expenses can be paid. In the event that the Directors approve a per diem greater than that allowed for a specific city by IRS, original receipts for meals will be requested if the traveler chooses to exceed the IRS rate.

Foundation personnel traveling on government grant funds are restricted to the same per diem limits (IRS Guidelines) as government employees.

Reimbursements: The Foundation's Director, staff or research personnel may request reimbursement for purchase of items in support of research or Foundation activities. An itemized reimbursement form must be completed with original receipts attached and submitted to the Executive Director for approval. If the Executive Director deems the Reimbursement Request, in whole or in part, to be inappropriate, the Principal Investigator may seek review by the Board of Directors for final disposition. Expenditures of more than $1,000 must also have approval of a Board member.

NOTE: All disapproved requests will be retained in the AREF Research Files as evidence of review and disapproval for future audits.

Subject Payments: Principal Investigators requesting payment to a subject for their participation in research activities must submit the name, mailing address and social security number for each subject. In any case where any subject receives in total $600 or more in a calendar year, the Foundation must submit such year-end information to the IRS and the subject.

Research Personnel, Contract, Consultants: Any VA employee, including Foundation officers, may not work for pay from the Foundation on government time. Any salary earned as Foundation employees must be for hours worked outside their VA tour of duty performing duties other than their usual and customary VA work. A VA employee may not receive pay from a non-governmental source at the direction of the employee’s Federal supervisor for services performed off-duty which are part of his official duties. (O.G.C. Advisory 10-91 dated February 11, 1991). A time card for each employee must be submitted to the Foundation.

A consultant is an individual that has been contracted to complete a particular aspect necessary to an authorized project. Payment for services will be made upon completion of the contract as a whole or as sections of the contract come due. The consultant must invoice the PI as well as submit a progress report or summary, which the PI attaches to the AREF form “Payment for Contractual Services."