Allowable Expenses Using Federal and State Grants

1. Allowable Expenses Using Federal and State Grants 2011 Purchasing Academy November 3, 2011 TASBO

2. Reference Materials • Federal Resources: • OMB A-87 Cost Principles • OMB A-133 Compliance Requirements • TEA Resources: • FASRG Purchasing Module • Federal Cost Principles Side-by-Side, A87, A122 & A21 • Guidelines Related to Specific Costs (Updated 9-27-2011) • Travel Guidelines for In-State and Out-of-State • Appendix 5 – SAS#NCLB – Revised March 2011 – Encumbrances and Expenditures • Resources located under Grant Management Resources

3. General Allowable Costs • 1st Test: Must be reasonable and necessary • Meet needs identified in the campus’ comprehensive needs assessment process • District or Campus Improvement Plans • Must be included in Grant application [either in budgeted dollars or specific approval if required] • Must be in agreement with grant purpose • Obligation meets federal rules for timing of eligible expenditure • Allowable Costs Principles OMB Circular A-87 • OMB Circular A-133 Compliance

4. Period of Funds Availability • All encumbrances and expenditures of approved funds shall occur on or after the effective submission date of the grant application or amendment (date submitted to TEA, or first day grant funds are available for obligation, whichever is later). • Refer to grant application for period of availability: • Start and stop dates of grant • Date application or amendment was submitted to TEA • Date NOGA (Notice of Grant Award) was approved by TEA • Local decision – will funds be made available prior to NOGA?

5. General Provisions - Obligations

6. Liquidation of Obligations • Liquidation [recording of expenditure] of all obligations must occur before the final expenditure report is due, typically 30 days after the end of a grant period. • All invoices must be paid or be in “accounts payable” • All goods must be received

7. 6200 Professional and Contracted Services

8. Allowable • Professional Services • Prior specific approval from TEA • Provided by non-employees • If district does not have the expertise • Printing services • Utilities • Allowable for grant activities conducted before or after school, weekends, or during the summer

9. 6200 Non-Allowable • Legal fees that are not grant specific • Regular audit fees • Motivational speakers or those speaking on general education issues • Staff development for contracted consultants paid as contracted services • Cell phones/PDAs for personal use • Costs associated with ceremonies, banquets, or celebrations • Honorariums (must say “fees”)

10. 6300 Supplies

11. 6300 Allowable • Instructional supplies – targeted student population or supplementary materials • Software – document alignment to identified need of the campus and core reform • Subscriptions • related to the grant program • Must be in the name of the grantee organization and not in the name of an individual

12. 6300 Unallowable • Routine classroom supplies – must be supplemental • Sales tax • Gifts

13. 6400 Other Operating Costs

14. 6400 Allowable • Membership in business, technical, and professional organizations related to the grant program • Membership must be in the name of the grantee organization and not in the name of an individual • Membership in civic and community organizations are allowable with prior specific approval from TEA. (Ed-Flex programs do not require prior approval)

15. Food - Light Lunch • Cloistered in an all-day meeting (at least 6 hours) • Document that it was impractical for participants to obtain lunch on their own (isolation or distance to restaurants) • Document that their attendance was essential • Agenda should contain topics discussed, time allocated to each topic, including the lunch period • List of attendees • Nominal cost per participant

16. Food – Working Lunch • Light meal • Definition: an activity in which staff or participants are engaged in exercises or activities during the normal meal time as stated on an agenda and in which no other opportunity for a meal will be provided • Must maintain an agenda that clearly identifies the exercise or activity that the participants were engaged in and should retain a representative sample of the work product, if any, that was generated as a result of the working session • List of attendees • Nominal cost per participant

17. Food Costs for Parents and/or Students • Nutritional snacks for students in extended day (after-school) programs • Nutritional snacks for children in child care while parents are participating in grant activities • Food necessary to conduct nutrition education programs for parents • Parent involvement activities where refreshments are necessary to encourage participation or attendance by parents, such as in low-income areas, and thus meet program objectives • Must be reasonable, necessary, and related to the instructional program • Documentation: Copy of meeting agenda

18. Travel • New rules September 1, 2009 • NEW RATE July 1, 2011 • 55.5 cents • http://ritter.tea.state.tx.us/taa/discgrant070611.html • No more Texas Mileage Guide • Mileage calculated • Odometer reading (point-to-point) • Electronic mapping • Must be printed and attached to travel voucher

19. Travel • Reimbursement lesser of state rates or local policy • Federal Rate Schedule used for reimbursement of in-state meals and lodging • Print at time of reservation • Travel Guidelineshttp://www.gsa.gov/portal/category/100120 • If not listed, $85/night lodging and $36/day meals

20. Travel • No overnight stay • If more than 6 consecutive hours, meals may be reimbursed • However………..IRS consequences! • First and Last Day of Travel rates calculated at 75% • http://www.gsa.gov/portal/content/101518

21. Travel Procedures • Travel documentation must include: • Name of the individual claiming travel reimbursement • Destination and purpose of the trip, including how it was necessary to accomplish the objectives of the grant project • Dates of travel • Actual mileage (not to exceed reimbursement at the maximum allowable rate) • Actual amount expended on lodging per day, with a receipt attached (may not exceed the maximum allowable) • Actual amount expended on meals per day (may not exceed the maximum allowable; tips and gratuities are not reimbursable) • Actual amount expended on public transportation, such as taxis and shuttles • Actual amount expended on a rental car, with a receipt attached and justification for why a rental car was necessary and how it was more cost effective than alternate transportation; receipts for any gasoline purchased for the rental car must be attached (mileage is not reimbursed for a rental car—only the cost for gasoline is reimbursed) • Actual amount expended on incidentals, such as hotel taxes, copying of materials, and other costs associated with the travel • Total amount reimbursed to the employee

22. Registrations • Conference registration – attach conference documentation to payment • Registration form should reflect the total registration costs • Use caution with optional events that may be perceived as “entertainment”

23. Awards • Minimal cost certificates, plaques, ribbons, small trophies, or instructionally-related items to be used in the classroom such as pens and pencils are acceptable incentives for participation in program activities or awards for recognition • The following items may be donated by others but may not be purchased with grant funds: • Gifts or items that appear to be gifts • Promotional items such as t-shirts, caps, tote bags, imprinted pens and key chains. • Door prizes, movie tickets, gift certificates, etc. • Food or any kind (snacks, beverages, etc)

24. Field Trips • Must be educational • Must be instructional activities that involve students in learning experiences difficult to duplicate in a classroom situation • Must support Texas Essential Knowledge and Skills (TEKS) • Must be reasonable in cost • Must be necessary to accomplish the objectives of the grant program • Must appear as a part of the teacher’s lesson plans, which should include activities that prepare students for the trip and follow-up activities that allow students to summarize, apply, and evaluate what they learned from the trip • Documentation: May need a form to collect the data

25. Field Trip Procedures • Documentation of the field trip must be maintained for audit purposes and must provide clear evidence of how the expense ties back to an instructional objective. Documentation should include the following: • Destination of each field trip • Costs associated with each field trip • Objectives to be accomplished from conducting the field trip • Teacher’s lesson plan and follow-up activities • For the supplement-not-supplant requirement, documentation must demonstrate the supplementary nature of the field trip • Attach this to the purchase order/payment

26. 6400 Unallowable • Travel allowance • Tips and gratuities • Travel advances without proper documentation • Foreign travel if not approved by TEA • Alcoholic beverages • Entertainment costs • Memberships in social or civic organizations involved in lobbying • Professional liability insurance

27. Unallowable Food Costs • Full meals for parents or students • Refreshments of any kind, including beverages, breaks, and snack foods, for staff meetings or staff training • Refreshments or meals at an awards banquet or function • Food costs not necessary to accomplish the objectives of the grant program • Any event in which a “guest speaker” or other individual conducts a presentation • Breakfast • “TEA reserves the right to restrict a grantee from expending any funds on food costs or to disallow expenditures on food costs should the TEA determine that the grantee expended grant funds on food costs that are not reasonable or necessary to meet the intent and objectives of the grant. “

28. 6600 Capital Outlay

29. 6600 Allowable • Equipment as approved on grant application • Refer to district’s capitalization policy • Construction, remodeling, renovation • Must be specifically authorized in the authorizing program statute and specifically approved by TEA in the applicable grant application

30. Other Considerations – Credit Cards • TEA will reimburse costs charged to the grant using corporate credit cards only when the accounting ledger reflects each individual charge on the credit card statement by the following: • Individual vendor name (not just credit card company) • Grant funding source/code • Expense category • Actual date of charge

31. Procedures Manual

32. Manual Should Include: • Purchasing Overview • Bid Laws and Process • Vendor Requirements – Conflict of Interest, Felony Conviction, Insurance • Requisitions – Approval Path • Purchase Orders – Approval Path • Contract Approval and Management • Payments to Vendors (Accounts Payable Functions) • Purchasing with Credit Cards or Procurement Cards • Security of cards, authorized users, authorized purchases, monitoring charges • Travel Expenditures • Fixed Assets/Equipment Inventory Tracking • Miscellaneous Purchases: Internet, Memberships, Sales Tax, Incentives/Awards, Petty Cash

33. Procedures – Overview of A-87 • Procedures exhibit includes questions such as: • Is competitive bidding required for all major procurement? • Do the subrecipient’s policies incorporate procedures for contract monitoring to ensure goods and services are received/performed? • Do the subrecipient’s policies and procedures require that any missing items, damaged or otherwise not received or rejected goods were properly identified? • Did the subrecipient policies and procedures describe the process that subrecipient personnel were required to follow for the expenditure of grant funds through corporate accounts and/or revolving lines of credit?

34. Federal and State Monitoring Visits • Areas reviewed in Federal monitoring visits include • Planning • District and campus improvement plans • Allowable Charges • Period of Availability • Cash management • Internal controls • Supplement Not Supplant

35. Onsite Review – Request for Documents • An electronic copy of: • Locally developed and approved accounting policy and procedures manual implemented during the school year. • Policy Manual - identify the specific policies and procedures directly related to the administration of the grant. • Clearly identify general accounting and administrative policies and procedures pertaining to: • contracts for professional and other services, • purchasing, • time and effort, and • travel and other employee expense reimbursements.

36. Other Best Practices • Develop Purchasing Flowchart for purchases with federal and state grant funds • Does the grant administrator approve all purchases? • Who is responsible for grant program compliance? • Develop resources for campuses and departments to facilitate compliance with allowable costs • Forms to collect data • Procedural manuals • “Do Not Buy” lists – Sample at San Antonio ISD Website • Training….training…training on an annual basis

37. Wrap-up:Q & A’s

38. Presenter Contact Information Rebecca Estrada Executive Director of Finance Lackland ISD 2460 Kenly Ave., Bldg. #8265 Lackland Air Force Base San Antonio, Texas 78236 (210) 357 5005 estrada.r@lacklandisd.net