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Financial and Administrative Services

Federal Fiscal Management Updates. Financial and Administrative Services. Missouri Department of Elementary and Secondary Education. April 25, 2013. Topics. Sequestration 2013-14 Allocations Period of Availability What’s New Time and Effort Reporting ePeGS Enhancements

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Financial and Administrative Services

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  1. Federal Fiscal Management Updates Financial and Administrative Services Missouri Department of Elementaryand Secondary Education April 25, 2013

  2. Topics • Sequestration • 2013-14 Allocations • Period of Availability • What’s New • Time and Effort Reporting • ePeGS Enhancements • Tiered Federal Monitoring • General Federal Guidance

  3. Sequestration

  4. Sequestration • The failure of the Joint Select Committee on Deficit Reduction (Super Committee) to produce a bill identifying budgetary savings of at least $1.2 trillion over ten years has triggered an automatic spending reduction process (called sequestration) that takes effect on July 1, 2013. • Sequestration Webpage: http://www.dese.mo.gov/fas/Sequestration.html

  5. Sequestration • Sequestration Process under the Budget Control Act of 2011 • Makes across the board cuts on all discretionary grants each year over the next 9 years. • Will be implemented on July 1, 2013. • Since grant awards have yet to be released from USED to states, the Department is unable to determine LEA level allocations. • Until allocations are published, we recommend basing 2013-14 budgets on your FY13 allocations with a 5% reduction.

  6. 2013-14 Allocations

  7. 2013-2014 Funding Projections (NCLB) • In March, Congress passed a final budget appropriation for federal FY 2013 • Comparison of 2011 Census Data with 2010 by state, Missouri’s change in the national poverty share increased by 3.12% • Preliminary allocations available by late April • http://www2.ed.gov/about/overview/budget/statetables/index.html#update • Sequestration reduces funding

  8. 2013-2014 Census Data (NCLB) • USED uses census poverty to calculate all of the formula grants. • Count may be accessed through the US Census Bureau http://www.census.gov//did/www/saipe/ • Available under Federal Financial Management/Census at http://www.dese.mo.gov/divimprove/fedprog/financialmanagement/ • Income Year 2011 • Large districts allocation is based solely on census poverty data • Small districts use alternative poverty

  9. Allocation Criteria for 2013-2014 (NCLB) The Department uses the following data to compute NCLB formula grants: • Census Poverty – Income Year 2011 • Free and Reduced Lunch Counts – October 2012 • Neglected and Delinquent Counts – Fall 2012 • Nonpublic Enrollment & F/R Lunch Counts – Fall 2012 • Hold Harmless Percentages The allocation amount is based on a formula and is NOT dependent on need or use of funds.

  10. Allocation Criteria – Title I Title I allocation consists of four separate funding calculations: Each funding category has different criteria and formula to distribute these funds. Has hold-harmless criteria –no less than 85% if criteria are met and funding is sufficient. Detailed Allocation Criteria is located at: http://dese.mo.gov/divimprove/fedprog/financialmanage ment/Allocation%20Info.htm

  11. Hold Harmless Amounts – Title I The amount made available to the LEA shall be: • Not less than 95% of the amount made available for the preceding fiscal year if the percentage of formula children is not less than 30% • Not less than 90% of the amount made available for the preceding fiscal year if the percentage of formula children is between 15% and 30% • Not less than 85% of the amount made available for the preceding fiscal year if the percentage of formula children is below 15%

  12. 2013-14 Funding for IDEA IDEA Part B Entitlement funds (Section 611) are Federal funds your District/LEA receives to help support your special education program and implement IDEA. Timeline 2013-14 Counts and Part B Allocations are posted at: http://dese.mo.gov/divspeced/Finance/

  13. Federal IDEA Part B Funds Formula Three separate components in formula: • Base Amount; • Population Count (includes ALL students) • September Enrollment • Home School • Non-Public • Neglected/Delinquent • Poverty Count (includes ALL students) • Free/Reduced Lunch Count

  14. Period of Availability

  15. Period of Availability of Funds “Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations of the funding period unless carryover of unobligated balances is permitted, in which case the carryover balances may be charged for costs resulting from obligations of the subsequent funding period.” EDGAR §80.23

  16. Grant Cycle / Obligation Period / FER Reporting Period

  17. When is an Obligation Made? EDGAR §76.707

  18. What’s New

  19. OMB Circular A-87Time and Effort Reporting Guidelines

  20. OMB Circular A-87Time and Effort Reporting Guidelines

  21. Payment Request in ePeGS New for 2013-2014: • Expenditures will be reported by both object and function code • Expenditures in approved object codes may not exceed 10% of the total amount budgeted within the approved program • Expenditures outside approved function/object code will not be allowed

  22. 10% Variance Example Expenditures in approved object codes may not exceed 10% of the total amount budgeted within each of the approved programs.

  23. Capital Outlay Page in ePeGs Equipment

  24. Capital Outlay Page in ePeGs Non-Equipment

  25. Capital Outlay Page in ePeGs Non-Equipment

  26. Tiered Federal Monitoring

  27. Tiered Monitoring Timeline

  28. Tiered Federal Monitoring • Possible Risk Factors – On-site or Telephone • Amount of federal funds (large amounts = greater risk) • A-133 audit findings • Late MOSIS/Core Data Reports • Financial Distress • Administrator Changes/Other Issues Reported by Auditor or LEA • Late FER • Late Budget Application • Violation of CMIA

  29. Tiered Monitoring Process • Tiered Monitoring Process at http://www.dese.mo.gov/ls/index.html • Description • Cohort Groups • Timeline

  30. Common Findings • General: • Expenditures not tracked separately • Time distribution for federally paid employees • Obligations prior to budget applications • CMIA • Allowable Costs/Uses of Funds • No inventory/tracking of equipment • IDEA Part B: • Special Education MOE documentation • Proportionate Share

  31. Separate Tracking All Federal funds MUST be tracked separately from other funding sources. • EDGAR 76.730 • Records shall be kept that fully show the amount of Federal funds received and how the funds are expended. • EDGAR 80.20 • A grantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds. • MO Financial Accounting Manual • Federal funds generally require separate identification and reporting within the LEA’s audit report.

  32. Cash Management Improvement Act • The Cash Management Improvement Act (CMIA) requires LEAs/Districts to demonstrate when receiving federal funds that they have either already spent the funds or will spend the funds within three business days of receipt of funds. • Payment requests may only include amounts already expended and/or amounts that will be expended within three business days of receipt of funds. • Violating CMIA requires interest to be calculated and funds returned.

  33. Re-coding Expenditures • LEAs that receive federal funds through the Early Childhood Special Education (ECSE) or High Need Fund (HNF) payments must ensure they are completing journal vouchers/entries for those funds within three (3) days of receipt of the funds, or that they will expend within three (3) days, to be in compliance with CMIA.

  34. Inventory Control (EDGAR 80.32) • Equipment & Property records (Inventory List) • Physical inventory (at least every two years) • Control system to prevent loss, damage, theft (all must be investigated), LOCKS! • Adequate maintenance procedures • If authorized to sell, proper sales procedures for highest return Note: $5000 according to EDGAR but MO has a lower threshold

  35. Fiscal Guidance for Federal Grants The purpose of this document is to provide a reference to the fiscal requirements and procedures necessary for responsible financial management of federal grant programs. The intent is to provide a general overview of federal requirements and assist subgrantees/ recipients in the proper fiscal accountability for federal funds as prescribed by law. http://www.dese.mo.gov/fas/GeneralFederalGuidance.html

  36. Resources • DESE Accounting Manual (School Finance) http://dese.mo.gov/divadm/finance/acct_manual/ • NCLB Administrative Manual http://www.dese.mo.gov/divimprove/fedprog/grantmgmnt/documents/qs-fc-admin-manual-June-2012.pdf • Individuals with Disabilities Education Act (IDEA) Regulations http://www2.ed.gov/legislation/FedRegister/finrule/2006-3/081406a.pdf • MO State Plan for Special Education http://dese.mo.gov/se/stateplan/index.html • Fiscal Monitoring resources http://dese.mo.gov/divspeced/Finance/FiscalMonitoring.html

  37. Pat kaiserDirectorfederal Financial management (NCLB) pat.kaiser@dese.mo.gov 573-751-8643 Angie NickellDirectorSpecial Education Finance angie.nickell@dese.mo.gov 573-751-4385

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