The Importance of Grant Monitoring

1. Preston Alderman MSDE, Director of Audit The Importance of Grant Monitoring

2. As recipients of federal and state funds we are charged with ensuring that the funds are adequately accounted for and spend in accordance with the grant assurances. • Receipt of those funds also subjects the recipient to being monitored and audited regarding the use of the funds. Responsibilities of the Grant Recipient

3. Monitoring tools must be consistent with the following; • Grant assurances • Federal (OMB) regulations/policies (including testing of expenditures) • State regulation/policies • Agency policies MSDE Has BEEN REVISING ITS MONITORING TOOLS:

4. EDGAR (Education Department General Administrative Regulations)has been updated. • Cost , administrative & auditing rules are located in 2 CFR Part 200 • The effective date of the changes are; • December 26, 2014 –Direct Grants from ED • July 1, 2015 – State Administered Programs • July 1, 2016 – Procurement Rules New Federal Requirements

5. Focus on outcomes • Performance metrics • Risk assessments • Financial management • Audit thresholds • Major emphasis on strengthening accountability by improving policies that protect against waste, fraud and abuse Changes in federal grant management

6. Review the criteria for determining allowable costs: • Part 76 State Administered Programs • Governmental units assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. • Reasonable costs GRANT RECIPIENTS should:

7. Review 2 CFR Part 200 Subpart D – Post Award Requirements • Purpose of financial and program management • Standards for financial management systems • Purpose of reports and records • Monitoring and reporting program performance

8. Review 2 CFR Part 200 Subpart D – Post Award Requirements • Termination • If a recipient materially fails to comply with the terms and conditions of the award

9. Review 2 CFR Part 200 Subpart D – Post Award Requirements • Enforcement • Temporarily withhold payment pending correction of deficiency • Disallow all or part of the cost of the non compliant activity • Wholly or partly suspend or terminate the award

10. allowable Costs • Review 2 CFR Part 200 Subpart E • 55 specific costs detailed • Listed in alphabetical order

11. Necessary, reasonable & allocable • Conform with federal law & grant terms • Consistent with state && local policies • Consistently treated • In accordance with GAAP • Not included as match • Adequately documented All cost must be:

12. Financial Management System2 CFR 200.302

13. COMMON PROBLEMS • Controlling allowable costs • Clear record trail • Cash management Financial Management System:

14. Identification of Awards (new) • Financial Reporting • Accounting Records • Internal Control • Budget Control • Written Cash Management Procedures (new) • Written Allowability Procedures (new) Financial Management System (FMS)

15. Accurate, current and complete disclosure of financial information • All financial reports required by ED, must be submitted no less than annually, no more than quarterly. • Non federal entities must submit performance reports at intervals by federal agency or pass through. • Performance metrics must be included. Financial Reporting

16. Must identify source and application of funds (expenditure level detail): • Award amount • Authorizations • Obligations • Unobligated balances • Assets • Liabilities • Expenditures • Income Accounting Records

17. Internal controls are tools to help program and financial managers achieve results and safeguard the integrity of their programs • Includes processes for planning, organizing, directing, controlling, and reporting on agency operations Internal Controls

18. Questions ?