IRISFINANCIAL OVERVIEWIRIS Board of Directors Orientation

May 11, 2015

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Financial Overview Topics

• Financial Services Staff• IRIS Awards• Audits/Reviews• Financial Statements• Indirect Cost Recovery• Unrestricted Funds/Investments• Budget & Finance Committee

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Financial Services Staff

Email: <admin@iris.edu>

Candy Shin,

CFO

Travel expense reports

Dave Fillebrown, Accounting Manager

Financial Statements, GL

Josephine Aka,

A/P ManagerChecks, ACH

Robert Austin, Purchasing Staff Acct

Purchase Orders

Dee Mann,

A/R Staff Acct

A/R, Rebills

Robin Morris, Project Cost Controller

Budgets,

Subaward/Contract Invoices

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FY15 IRIS AWARDSActive IRIS awards (7/1/14-6/30/15)

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IRIS Awards – Accounting Codes

Code Award Number PI Start End Budget

2005-xxx EAR-0733069 USArray C.A. Woodward 10/1/08 9/30/14 $76,244,193

1005-xxx EAR-1261681 SAGE C.A. Detrick 10/1/13 9/30/18 $57,873,116

1080-xxx EAR-1063471 Core C.A. Detrick 10/1/11 12/31/14 $30,569,736

1081-xxx OCE-1112722 OMO C.A. Detrick 2/1/12 1/31/17 $19,333,767

1082-xxx ICER-1343709 EarthCube Ahern 9/15/13 8/31/15 $1,783,919

1071-xxx EAR-1040292 CHILE Detrick 9/15/10 8/31/15 $1,000,000

1083-xxx PLR-1337861 GEOICE Woodward 10/1/13 9/30/16 $636,426

1078-600 PLR-1304011 GLISN 2 Detrick 9/1/13 8/31/18 $461,020

1075-700 EAR-1156739 REU Taber 6/1/12 5/31/17 $377,991

1085-400 LLNL B610206 Tajik Hafner 9/22/14 9/30/15 $146,286

1079-xxx ICER-1321600 SAVI Ahern 9/1/13 8/31/18 $138,193

1084-700 EAR-1425893 EC Workshop Taber 5/1/14 4/30/16 $73,801

1086-xxx JPL Subcontract1507934 NASA Taber 9/23/14 6/30/15 $65,000

1066-700 UNAVCO RESESS Taber 9/15/09 8/31/15 $43,857

1065-700 DUE-0942559 CCLI Taber 9/15/09 8/31/14 $32,609

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IRIS AUDITS & REVIEWSWhat do you call an accountant with an opinion?

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Audits/ReviewsOMB Circular A-133 Audit IRIS/McGladrey LLP

Desk Reviews NSF BFA - contractors

Proposal ReviewsIndirect Rate Proposal/Rate Agreement

NSF CAAR (DIAS)

Business Systems Review NSF BSR Team (LFO)

Management Review NSF Program

Program Review IRIS/NSF Program

Property Control System Review NSF Property Mgmt (DAS)

Incurred Cost and Accounting System Audit

NSF OIG – DCAA

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A-133 Audit

OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations”

• Non-Federal entities that expend $500,000 or more in Federal awards in a year increased threshold to $750,000

• Audit of financial statements• Tests of internal control over the Federal program• Procedures to determine whether the auditee has complied

with laws, regulations, and provisions of grant agreements

McGladrey LLP• Tom Sneeringer, Partner• FY2001 – FY2014

OMB has consolidated its grant guidance for recipients into a single document 2 CFR Part 200.

FY14 Audit Report

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Balance SheetAssets FY14 FY13

Cash & cash equivalents $ 545,086

$ 246,035

Receivables4,873,294 4,844,367

Prepaids, advances, & other assets 285,095 315,461

Investments2,182,880 1,155,047

Leasehold improvements, net 105,278 119,616

Total assets $7,991,633

$6,680,526

Liabilities

Accounts payable & accrued expenses

$1,779,942

$1,890,228

Subawards payable3,165,691 2,119,001

Deferred rent and other liabilities 311,625291,437

Total liabilities $5,257,258

$4,300,666

Net Assets

Unrestricted $2,709,725 $2,355,410

Temporarily restricted 24,650 24,450

Net assets $2,734,375

$2,379,860

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Temporarily Restricted Net Assets• These funds have donor-imposed restrictions that can be fulfilled

by one of two ways - passage of a defined period of time (time restriction) or by performing defined activities (purpose restriction).

IRIS Example (beginning in 2009):John C. Lahr Educational Seismology FundFY09 Contributions $25,980FY10 Contributions $775FY10 Purchase 4 AS-1s <$2,605>FY11 Contributions $300FY14 Contribution $200

Balance as of 6/30/11 $24,450Balance as of 6/30/12 $24,450Balance as of 6/30/13 $24,450Balance as of 6/30/14 $24,650

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Revenues Awards/Grants

• Cost-reimbursable awards- Indirect cost recovery limitations- Management fees

• Fixed-price awards• Program Income

Membership Dues Interest/Dividends Realized/Unrealized Gain on Investments Contributions/Donations

Statements of ActivitiesRevenues

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Revenue: FY14 FY13

Federal awards$38,127,768 $32,911,215

Program income 355,880616,132

Sale of ocean cable 248,5001,066,000

Investment income 240,377130,688

Contributions 148,399

Membership dues 7,500 7,500

Total Revenue$39,128,424 $34,731,535

Innovation Fund Donations

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Month Online Contributions

Checks Amount

April 1 (test) $5.00

May 21 7 $17,955.00

June 11 13 $15,238.81

Winston Chan - commitment $100,000.00

FY14 Donations Revenue $133,198.81

Total Innovation Fund Donations as of 3/31/15 = $141,180.81

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FY14 FY13

Program services:

PASSCAL (+ Polar) $ 5,904,131

$ 3,711,749

GSN3,477,339 3,268,411

Data Services4,377,151 3,544,944

Education & Public Outreach 1,336,565

930,580

Community Activities 461,170 237,918

Instrumentation Services Mgmt

945181

495,088

Transportable/MT Arrays 4,624,349

EarthScope - USArray7,586,865 15,118,351

OBSIP Management Office6,272,765 2,589,122

Chile MRI 37,954 49,165

Chile RAPID 0 19,559

Other - Unallowable Expenses 153,857 108,778

Indirect Expenses3,596,582 3,449,122

Total Expenses $ 38,773,909

$ 33,522,787

Expenses

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INDIRECT EXPENSESDC Office Overhead

DMC Office Overhead

G&A

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Office Overhead PoolsIRIS Headquarters

Washington, DC

Description FY14

Office Manager Salaries/Fringe

$ 67,203

Rent Suite 400

(11,536 sq ft)543,138

Supplies14,211

Other (equipment leases, postage, internet, telephone, water, misc.)

74,937

Total FY14 Expenses699,490

Data Management CenterSeattle, WA

Description FY14

Office Manager Salaries/Fringe

$ 89,900

Rent Suite 200 (6,409 sq ft) UWA computer space

180,387

Supplies4,975

Other (equipment leases, postage, internet, telephone, water, misc.)

28,084

Total FY14 Expenses $303,346

Office Overhead Base = $1,959,894DC Office O/H Rate = 35.69%

Office Overhead Base = $1,824,762DMC Office O/H Rate = 16.62%

General & Administrative (G&A) Pool

All other allowable general and administrative costs (costs that benefit all programs and cannot be identified to a specific program) are allocated to programs, grants, etc. using a base that consists of total costs less equipment, participant support costs and subaward costs exceeding $25,000 per subaward per year.

General & Administrative ExpensesG&A Base = _____ %

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Expense ActualFY14

ProposedFY14

ProposedFY15

Salaries/Fringe $ 1,924,438

$ 2,002,808

$ 2,159,035

Supplies33,069 25,000 25,000

Travel/Meetings166,757 207,000 182,500

Professional Services421,742 346,000 352,600

Other47,519 55,000 85,000

DC/DMC Office O/H435,960 434,029 433,845

Total $3,029,484

$3,069,837

$3,237,980

G&A (MTC) Base $12,113,849 $12,406,304 $13,039,006

G&A Rate 25.01% 25% 25%

FY

14-15 G&

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udgetsMax. Provisional Rates

Revised FY15 SMT G&A Budget Estimate = $3,014,417

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G&A (Indirect) Personnel• Management/Administration (100%)

– Detrick, President– Linn, Executive Assistant– Willemann, Director of Planning– Woolley, Director of Program Support– Turner, HR Generalist/Administrative– Sobel, Award & Procurement Administrator– <open> Sr. Contracts Administrator

• Business Office (100%)– Aka, Staff Accountant - A/P– Austin, Staff Accountant – Purchasing– Fillebrown, Accounting Manager– Mann, Staff Accountant – A/R– Morris, Senior Project Accountant– Shin, CFO

• Split-charged (budgeted under G&A 25-50%)– Baranowski, Meeting Planner (50%)– Dorr, Public Outreach Manager (20%)– Joseph, Web Developer (25%)

Labor FY15 Revised

Salaries $1,251,640

Fringe Benefits 700,918

Office O/H 443,806

Subtotal $2,396,364

79% of total G&A revised budget

$3,014,417

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G&A – Professional ServicesDescription/Vendor FY14 Expenses FY15 Revised

Budget% of Total G&A

Budget

Consultants (e.g., Muco) $29,496 $20,000 0.66%

HR - Insperity $207,782 $240,000 7.96%

Audit $39,300 $40,000 1.33%

Legal Services $34,379 $20,000 0.66%

Misc. (e.g., recruiting, editing, IT)

$87,280 $44,900 1.49%

Corporate Insurance (Moodys)

$23,505 $34,260 1.14%

Subtotal $421,742 $399,160 13.24%

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G&A – Travel and MeetingsDescription FY14

ExpensesFY15

Budget% of Total

G&A Budget

Staff Travel (Domestic) $60,768 $60,000 1.99%

Staff Travel (Foreign) $8,442 $10,000 0.33%

Committee Travel $42,823 $28,500 0.95%

Board of Directors (9)

CoCom (2 BoD)

Planning Committee

Instrumentation Committee

Int’l Development Seismology

Misc. Travel $24,108

Subtotal - Travel $136,141 $98,500 3.27%

Meetings $30,616 $36,000 1.19%

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Other G&A Expenses

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G&A Base

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Indirect Rate Agreement – signed 3/12/15

Indirect PoolFY11Actual

FY12Actual

FY13Actual

FY14Proposed

FY14Actual

FY15-16Proposed

DC Office O/H 28.66% 37.38% 33.90% 37% 35.69% 36%

DMC Office O/H 15.84% 18.89% 16.30% 20% 16.62% 19%

G&A 23.14% 22.04% 23.29% 25% 25.01% 25%

Indirect PoolFY11Final

FY12Final

FY13-FY15Maximum

DC Office O/H 28.66% 37.38% 37%

DMC Office O/H 15.84% 18.89% 20%

G&A 23.14% 21.89% 25%

Rates offered by NSF (3/4/15) and accepted by IRIS:

Actual and Proposed Rates Submitted by IRIS:

CAAR – FY12 Indirect Rates Allowability Determination

FY12 Disallowed ExpensesG&A Travel $ 7,316G&A Meetings $12,127------------------------------------------------Total Disallowed in FY12 $19,443

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Current Rate Agreement

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UNRESTRICTED FUNDSMorgan Stanley Portfolio

Unallowable Expenses

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Revenues Awards/Grants

• Cost-reimbursable awards- Indirect cost recovery limitations- Management fees

• Fixed-price awards• Program Income

Membership Dues Interest/Dividends Realized/Unrealized Gain on Investments Contributions/Donations

Unrestricted Funds

• PNC Bank Account balances as of 3/31/15

• Unrestricted Account $367,409• Innovation Fund Account $125,384

• Morgan Stanley Portfolio12/31/14 beginning balance = $2,174,605Portfolio balance as of 3/31/15 = $2,224,9452015 YTD Change (2% increase) = $50,340

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Morgan Stanley – IRIS Portfolio Account Balance12/31/02 – 3/31/15

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5/5/05Personal Portfolio inception $965,025

Feb/Mar 2010 Distributions<$50,000>

11/22/11Distribution<$25,000>

2/28/12Distribution<$25,000>

11/02 transfer to Morgan Stanley = $649,742

1/19/05 transfer to Morgan Stanley $107,779 (Iguaçu)

4/2/14 transfer to Morgan Stanley $802,770 (Subsea Cable)

$2,224,945

Select UMA Proposal – Portfolio Changes Implemented August 2013

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“Other” includes: investment fees, donations/gifts, staff meals, unallowable travel/meeting and promotional expenses

FY15 Unallowable Expenses -to-date7/1/14 - 3/31/15

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Budget & Finance Committee

The IRIS Budget & Finance (B&F) Committee is charged with assisting and providing recommendations to the Board of Directors on its financial management responsibilities, and serving as the liaison between the Board of Directors and IRIS staff, or external parties, on such issues.

• The Budget & Finance Committee will:• oversee the indirect pool budgets and development of the

annual indirect rate proposal,• oversee IRIS unrestricted funds and its investment portfolio,• accept and review reports provided by external auditors,• recommend the firm that will provide the next year's audit,• review the annual Form 990 (Return of Organization Exempt

from Income Tax) submission.