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AGENDA. Final Obligations/Liquidations Allocation Criteria
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1. Office of quality schools AND Financial and administrative services federal programs conference Missouri Department of Elementary and Secondary Education Type comments here. Type comments here.
2. AGENDA Final Obligations/Liquidations
Allocation Criteria & Related Information
Overview of Cash Management
Program Requirements
Financial Management Systems
Time Distribution
3. Funds Expiring in 2010-2011 ARRA funds
Title I.A
Title I School Improvement (a)
Title I.D (Delinquent)
Title II.D (Technology)
Homeless
Non ARRA funds
Title II.D (Technology)
Title IV.A (Safe & Drug Free)
4. Period of Availability Funds must be budgeted and expended during two program years.
In the 2009-2010 program year, these funds were considered the original allocation.
During the 2010-2011 program year, these funds are considered carryover funds. The carryover funds must be obligated by September 30, 2011.
5. Timeline State fiscal year ends June 30, 2011.
Federal fiscal year ends September 30, 2011.
Last obligation date is September 30, 2011.
Liquidation period ends December 30, 2011.
DESE striving for final expenditures by June 30.
Released funds will be reallocated.
Lapsed funds detrimental to future appropriations.
7. Payment Requests LEAs are encouraged to submit Payment Requests for reimbursement as expenditures occur.
ARRA fund balances are a concern
Unexpended ARRA balances will be analyzed
8. Original Allocation (Current Year Allocation)
Allocation Detail button shows nonpublic info
Carryover funds
Carryover Detail
NCLB Consolidated Transfers or REAP-Flex options
Schoolwide Pool
Current Funds Available often gets confused with Funds AvailableCurrent Funds Available often gets confused with Funds Available
9. Balances on rows 3 and 4 are Carryover and must be expended in the 2010-2011 program year.Balances on rows 3 and 4 are Carryover and must be expended in the 2010-2011 program year.
10. Allocation Criteria and Related Information
Formula Grant
11. Formula Grant Allocation Criteria The allocation amount is dependent upon poverty counts, enrollment counts, or other formula counts.
The allocation amount is NOT dependent on need or use of funds.
12. Allocation Criteria for 2010-2011 Census Poverty -Income Year 2009
Free and Reduced Lunch Counts-January 2011
Neglected and Delinquent Counts Fall 2010
Nonpublic Enrollment & F/R Lunch Counts Fall 2010
LEP & Immigrant Counts Spring 2011
Migrant Counts 2010-2011 Data
Hold Harmless Percentages
13. Allocation Criteria Census Poverty - The USDE uses this information to calculate all of the formula grants.
This count may be accessed through the US Census Bureau
www.census.gov/hhes/www/saipe/
14. Title I, Part A Improving the Academic Achievement of the Disadvantaged
The purpose of this program is to ensure that all children have a fair, equal and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging State academic achievement standards and state academic assessments. Approximately $237 millionApproximately $237 million
15. Allocation Criteria Title I NCLB law requires the use of census data
Large districts (total populations of 20,000 or more) receive their allocation based solely on census poverty data.
Smaller districts Missouri uses alternative poverty data (State Board Approved & USDE Approved)
80% census poverty data and foster child counts
20% January free/reduced lunch counts as reported on Core Data
16. Allocation Criteria Title I Title I allocation consists of four separate funding calculations:
Basic Grant
Concentration Grant
Targeted Grant
Education Finance Incentive Grant (EFIG).
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
School Improvement and Administration Set-Asides
17. Title I Allocation Title I Allocation for 2010-2011 = $237,637,454
Preliminary for 2011-2012
95% LEA Allotment
4% reserved for School Improvement (a)
< 1% reserved for State Administration
18. Title II, Part A Preparing, Training, and Recruiting High Quality Teachers and Principals
The purpose of this program is to increase student academic achievement through strategies such as improving teacher and principal quality and increasing the number of highly qualified teachers in the classroom and highly qualified principals and assistant principals in schools and to hold schools accountable for improvement in student academic achievement. Approximately $50 millionApproximately $50 million
19. Allocation Criteria Title II.A Hold Harmless 100% of 2001-2002 Title II Eisenhower funds + 100% of 2001-2002 Class Size Reduction funds.
Additional funds over the hold harmless amount should be distributed as follows:
20% is distributed based on census population ages 5-17
80% is distributed based on census poverty
20. Allocation Criteria Title II.D Law allows SEAs to distribute 50% formula grants and 50% competitively OR to distribute 100% competitively
Since 2007, Missouri chose to distribute 100% competitively due to major cuts in federal allocation
Exception: Because Title II.D also receives an ARRA grant in SY 2010, funds distributed based on 50% formula and 50% competitive
LEAs must expend formula II.D funds in the 2010-2011 program year.
LEAs must expend formula II.D funds in the 2010-2011 program year.
21. Title IV.A and Title V Issue Zero allocation.
LEAs may not transfer into either program.
LEAs that are eligible for SRSA funding may continue to exercise REAP-Flex authority to use any funds received under Title II.A and Title IV.A to carry out local activities authorized under Title IV.A and Title V.
22. Equitable Services Required for Title I, Migrant, II.A, III LEP
Bypass Services for Title II.D, and some Title I Districts
Title I services
where the student resides
The rest of the programs
where the nonpublic school is physically located.
Allocations - Nonpublic Services
23. Nonpublic Services for Title II.A Program
25. Nonpublic Services LEA must include funds for equitable nonpublic services in Consolidated Application
Titles I.A, I.C, II.A and III LEP budgets reflect appropriate amounts for proposed expenditures
Required forms to be completed to document that timely and meaningful consultation has occurred and will continue throughout the year:
Public/Private Design for Educational Services (retained at LEA)
Consultation/Participation Forms for each program (copy sent to DESE)
26. Nonpublic Services Consultation should take place in Spring so consultation forms can be submitted with the application (due July 1).
Then consultation should take place again in the Fall when allocations are known and discussions of actual expenditures can take place.
27. Title I Nonpublic Services Assessment Required
During consultation, must discuss what standard will be used to measure the effectiveness of the Title I program (baseline data, targets and progress made)
Title I Professional Development
PD services to nonpublic teachers of private school Title I participants
28. Terms Third Party Provider vs. Bypass Contractor
LEAs may contract with Third-Party Provider. The LEA is responsible to make sure that the third party provider follows all requirements of the law.
Bypass Contractor - The USDE contracts for bypass services in Missouri. Neither the LEA or SEA are required to monitor these services.
SES compared to nonpublicSES compared to nonpublic
29. Contract Administration Must maintain a contract administration system that ensures that contractors perform in accordance with the terms, conditions, and specification of the contract
Must have written contracts (purchase orders ok)
Contract should include clearly defined deliverables
Description of services to be performed or goods to be delivered
Description of dates when services will be performed or goods delivered
Description of number of students/teachers/etc. to be served (if applicable).
30. Contract Administration LEA should pay contracts based on written invoices that provide a description of the:
services performed or goods delivered
dates when services were performed or goods delivered
location services were performed or goods delivered
number of students/teachers served (if applicable).
Invoice should be reviewed & approved before payment (segregation of duties and documented approvals).
31. Payment Process Terms
Obligation
Liquidation
Payment
Overview of Cash Management
32. Obligations Obligations are transactions that require a payment
Every grant has a period of availability = period in which grantee can obligate funds
33. Obligations: Period of Availability Grantees and subgrantees may begin to obligate funds when:
Awarding agency approves application; or
Awarding agency determines application is substantially approvable (reimbursement subject to final approval)
NOTE: When using federal funds, LEAs may not liquidate (pay) prior year obligations from a current year application!
34. Obligations: Period of Availability Tydings Amendment
Allows extra year to obligate funds
Does not apply to all grants
Under Tydings, funds are available for 24-27 months:
12-15 months under the grant award
(July 1, 2009 September 30, 2010)
Plus 12 months
(October 1, 2010 September 30, 2011)
State may limit period of availability Missouri allows two project years.
35. Obligations: Period of Availability Under Tydings, unobligated funds can usually be carried over from first year
Generally, no limit on carryover unless stated:
Title I = 15% carryover, SEA may waive once every 3 years
ARRA waiver approved by USED allows waivers of the once in three years limitation: FY 2009 (SY 2009-10 funds; and FY 2010 (SY 2010-11) funds.
Requirement does not apply to a LEA that receives less than $50,000.
36. Carryover Waivers
LEA received waiver in 2008 (Fall 2009 = 1st waiver) LEA needed 2nd or 3rd waivers in Fall 2010 and Fall 2011.
If an LEA receives a waiver in Fall 2011, they will not be eligible again until Fall 2014. LEA received waiver in 2008 (Fall 2009 = 1st waiver) LEA needed 2nd or 3rd waivers in Fall 2010 and Fall 2011.
If an LEA receives a waiver in Fall 2011, they will not be eligible again until Fall 2014.
37. 9/30 Report-Carryover Amount State fiscal year ends June 30. We call the funds not used in the initial year as carryover funds.
The federal fiscal year runs through September 30. So in order to determine the actual carryover funds based on the federal definition, we use the 9/30 Report to collect this information.
38. 9/30 Report There are two reasons that SEA collects 9/30 Report of Expenditures & Obligations
Determine if actual carryover amount is greater than carryover limitations (end of 15 months of grant) -- Title I
Determine that funds are appropriately obligated by end of funding period (end of 27 months of grant) Title I School Improvement.
40. Current Funds Available
43. 9/30 Report Submittal and Approval Title IV.A will no longer be funded in FY 2011 so link will be removed.Title IV.A will no longer be funded in FY 2011 so link will be removed.
44. 9/30 Report Title I and ARRA
45. 9/30 Report Submittal and Approval
46. Liquidation Liquidation = Settle an obligation by paying funds
47. Liquidation Must liquidate all obligations within 90 days after the end of the period of availability
Period of availability: July 1-September 30
Liquidation period ends: December 30
It is important that DESE does not lapse funds.
48. Payments: Funds to LEAs Reimbursement is the preferred method.
If LEA receives advance funds from the SEA, the LEA must minimize the time elapsing between transfer and disbursement in accordance with CMIA (Cash Management Improvement Act) guidelines
Must time draw downs as close as possible to disbursements (3-day rule)
Accounting system must track interest
Interest earned must be returned to USED
SEA must monitor LEA to ensure timely payments
49. Violations of CMIA Placed on cash-reimbursement payment method. Recipient would have to pay for grant activities with its own money and submit documentation of the expenditures to DESE before receiving reimbursement
Designated a high-risk recipient which may involve the imposition of conditions in addition to that being placed on a reimbursement payment system.
50. ePeGS Payment Method ePeGS will use Payment Requests only
The LEA will need to certify that the funds have either been spent or are being expended within three business days of receipt.
Payment Requests received by the first (1st) day of the month will be in that months school payment. Emphasize first of the monthEmphasize first of the month
51. ePeGS Payment Enhancements LEAs will indicate their expenditures to date on the payment request.
Comparison of expenditures to date with the cumulative payments to see if LEA is eligible for a payment under CMIA.
LEAs will be able to make payment requests through June, July, August and September.
Final expenditure report (FER) will be due September 30. 100% of funds may be requested through payment requests.
The FER is a final report. Not a means of receiving payment.100% of funds may be requested through payment requests.
The FER is a final report. Not a means of receiving payment.
52. Title I Payment Request
53. Title I.A with Transfer
54. Payment Submittal and Approval
55. Final Expenditure Report (FER) FER in ePeGS displays the approved budget.
Expenditures are 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.
Program person must work with finance person.
Budget amendments were due April 30.
Expenditures outside approved budget will not be allowed.
56. Final Expenditure Report (FER) A single FER is due September 30.
LEA cannot open the FER if budget amendment is open.
Once the FER is open, the rest of the system shuts down (no payment requests or budget amendments allowed)
FER revisions will not be permitted unless there are audit/monitoring issues. No preliminary data!
Any budget requests after April 30 are not for program reasons. They are budgetary.No preliminary data!
Any budget requests after April 30 are not for program reasons. They are budgetary.
57. Distribution of Funds The Distribution of Funds is available on the Final Expenditure Report page. This displays the expenditures by program. Notice the breakdown of funds when the transferability option was exercised. Expenditures by each program are by column. The Distribution of Funds is available on the Final Expenditure Report page. This displays the expenditures by program. Notice the breakdown of funds when the transferability option was exercised. Expenditures by each program are by column.
58. Indirect Cost Cost incurred for common or joint purposes
Cost cannot be readily and specifically identified with a particular cost objective without effort disproportionate to the results achieved.
59. Indirect Cost The SEA, on the basis of a plan approved by the USDE, shall approve an indirect cost rate for each LEA. The indirect cost rate is determined by using information from the previous years ASBR (Annual Secretary of the Board Report).
Questions about indirect cost rate? Contact School Finance 573-751-0357.
60. Indirect Cost Indirect Cost = (Restricted indirect cost rate) x (Total direct costs of the grant minus capital outlays and other unallowable items)
The federal program indirect costs allowance must be transferred to the districts general operating funds. There they lose their identity as federal funds and can be spent by the district.
Part of program expenditures, no additional moneyPart of program expenditures, no additional money
61. OMB Circular A-133 Compliance Supplement Single Audit is required if LEA expends more than $500K of federal funds
Pressure on ED to ensure high-quality single audits & to review audit findings more carefully
Conducted by external, independent auditors
Recipient (LEAs) must address any findings, prepare corrective action plans within 6 months after receipt of audit report.
School districts that expend less than $500,000 in federal funds (in total, not per program) have no federal filing requirements. School district required to have a Single Audit pursuant to OMB Circular A-133 have specific filing requirements. These districts must file a complete reporting package and a data collection form with the Federal Audit Clearing house.
Single Audit Act states that pass through entities (SEA) must monitor a sub recipient's use of federal funds through site visits, limited scope audits, or other means. EDGAR 80.40(a) Grantees must monitor grant and subgrant supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program function or activity.School districts that expend less than $500,000 in federal funds (in total, not per program) have no federal filing requirements. School district required to have a Single Audit pursuant to OMB Circular A-133 have specific filing requirements. These districts must file a complete reporting package and a data collection form with the Federal Audit Clearing house.
Single Audit Act states that pass through entities (SEA) must monitor a sub recipient's use of federal funds through site visits, limited scope audits, or other means. EDGAR 80.40(a) Grantees must monitor grant and subgrant supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program function or activity.
62. Are Audits Reliable?? Auditors only review a sample of transactions
Percentage of items reviewed depends on the risk rating of the district
A clean audit is not an assurance that all federal rules are followed.
Federal Audit Clearinghouse reviews Single Audit Reports
Since the samples may not cover all of the federal programs; the SEA and LEA may not rely of a clean audit as proof that federal rules are followed.
Since the samples may not cover all of the federal programs; the SEA and LEA may not rely of a clean audit as proof that federal rules are followed.
63. Questions on Cash Management?
64. Financial Management Systems 34 CFR 80.20 Financial Reporting
Accounting Records
Internal Controls
Budget Control
Allowable Costs
Source Documentation
Cash Management LEAs must have financial management systems that meet specific standards in the following areas:
Financial Reporting (Accurate, current and complete disclosure of financial records)
Accounting Records (Must maintain records that adequately identify the source and application of funds)
Internal Controls (LEAs must adequately safeguard all property and must assure that it is used solely for authorized purposes)
Budget Control (Actual expenditures must be compared with budgeted amounts for each grant)
Allowable Costs (Applicable cost principles and terms of the grant will be followed to determine reasonableness, allowability and allocability of costs)
Source Documentation (Accounting records must be supported by source documentation such as cancelled checks, paid bills, payrolls, time and attendance records)
Cash Management (LEAs must minimize the time elapsing between the transfer of funds to the LEA and the actual disbursement)
LEAs must have financial management systems that meet specific standards in the following areas:
Financial Reporting (Accurate, current and complete disclosure of financial records)
Accounting Records (Must maintain records that adequately identify the source and application of funds)
Internal Controls (LEAs must adequately safeguard all property and must assure that it is used solely for authorized purposes)
Budget Control (Actual expenditures must be compared with budgeted amounts for each grant)
Allowable Costs (Applicable cost principles and terms of the grant will be followed to determine reasonableness, allowability and allocability of costs)
Source Documentation (Accounting records must be supported by source documentation such as cancelled checks, paid bills, payrolls, time and attendance records)
Cash Management (LEAs must minimize the time elapsing between the transfer of funds to the LEA and the actual disbursement)
65. Financial Management Systems 34 CFR 80.20 State, and its subgrantees, must have fiscal control and accounting procedures sufficient to:
Prepare Reports
Trace funds to a level of expenditure adequate to show funds spent properly
66. Financial Reporting Accurate, current and complete disclosure of financial information
All financial reports required by USED or SEA
67. Accounting Records Fiscal control and account procedures must be sufficient to:
Prepare Reports
Trace funds to a level of expenditures adequate to show funds spent properly
This is a major focus because of ARRA reporting.
68. Accounting Records Use Accounting Codes in the Missouri Financial Accounting Manual
These codes include Fund Code, Function Code, Object Code, Operational Code, and Source of Funds Code.
Source of Funds/Project Code should be used to identify individual federal programs Example:
Function Code 1251 has traditionally been used for Title I activities. However, this code should be used for instructional activities only. If you are providing professional development activities with Title I funds, they should be coded to Function Code 2213, Instructional Staff Training Services. The use of a Source of Funds/Project Code will then identify these expenditures as Title I.Example:
Function Code 1251 has traditionally been used for Title I activities. However, this code should be used for instructional activities only. If you are providing professional development activities with Title I funds, they should be coded to Function Code 2213, Instructional Staff Training Services. The use of a Source of Funds/Project Code will then identify these expenditures as Title I.
69. Accounting Code Overview Example: 120 2213 6312 402 51
Fund Code (120)
Function Code (2213)
Object Code (6312)
Operational Unit Code (402)
Source of Funds/Project Code (51) Fund Code -- The Fund Code consists of two basic elements, the first two digits indicate the type of fund and the last digit indicates the fiscal year. For example, 120 indicates by the 1 that the purpose of this fund is General (Incidental) Fund. The second digit indicates the Operating Subfund of the General (Incidental) Fund. The 0" indicates that it is for the 2009-10 fiscal year.
Function Code -- The Function Code describes the action, purpose, or program for which activities are performed. For example in Function 2213, the first digit indicates the general area of Support Services. The second digit denotes Support Services Instructional Staff. The third digit identifies Improvement of Instruction. The fourth digit specifies Instructional Staff Training Services.
Object Code -- The Object Code consists of three parts: the account classification, the object code, and the sub object code. The Account Classification Code identifies the General Ledger section such as assets, liabilities, fund balance or budgetary accounts. All revenue objects will be classified as "5's"; all expenditure objects will be classified as "6's." The Revenue Object Code (second digit) identifies the source of revenue, such as local, county, or state monies. The Expenditure Object Code (second digit) identifies the service or commodity obtained, i.e., Purchased Services. The Subobject Code (fourth digit) while not usually required in state reports may be valuable on a local level to further identify certain revenues or expenditures.
Operational Unit Code -- The Operational Unit Code refers to individual campuses within a district and individual components within the administration, school service, maintenance and operation divisions. (building number minus last digit -- 4020)
Source of Funds/Project Code -- The Source of Funds Code is used to identify a subset of the General (Incidental), Special Revenue (Teachers), and Capital Projects Funds which are parts of a specific grant as is commonly the case with various federal funds such as Individuals with Disabilities Act (IDEA), Revenue Codes 5441-42. The Source of Funds Code may also be used to aggregate costs across subfunds, such as
teachers' salaries and supplies, to construct the reports necessary for various granting agencies.
When used to identify a federal project, the Source of Funds Code may also be associated with
accounts receivable, accounts payable, and fund balance accounts pertaining to that project. With
the exception of the cash account, a balance sheet for the project may be drawn from the general
ledger utilizing this code dimension.
Fund Code -- The Fund Code consists of two basic elements, the first two digits indicate the type of fund and the last digit indicates the fiscal year. For example, 120 indicates by the 1 that the purpose of this fund is General (Incidental) Fund. The second digit indicates the Operating Subfund of the General (Incidental) Fund. The 0" indicates that it is for the 2009-10 fiscal year.
Function Code -- The Function Code describes the action, purpose, or program for which activities are performed. For example in Function 2213, the first digit indicates the general area of Support Services. The second digit denotes Support Services Instructional Staff. The third digit identifies Improvement of Instruction. The fourth digit specifies Instructional Staff Training Services.
Object Code -- The Object Code consists of three parts: the account classification, the object code, and the sub object code. The Account Classification Code identifies the General Ledger section such as assets, liabilities, fund balance or budgetary accounts. All revenue objects will be classified as "5's"; all expenditure objects will be classified as "6's." The Revenue Object Code (second digit) identifies the source of revenue, such as local, county, or state monies. The Expenditure Object Code (second digit) identifies the service or commodity obtained, i.e., Purchased Services. The Subobject Code (fourth digit) while not usually required in state reports may be valuable on a local level to further identify certain revenues or expenditures.
Operational Unit Code -- The Operational Unit Code refers to individual campuses within a district and individual components within the administration, school service, maintenance and operation divisions. (building number minus last digit -- 4020)
Source of Funds/Project Code -- The Source of Funds Code is used to identify a subset of the General (Incidental), Special Revenue (Teachers), and Capital Projects Funds which are parts of a specific grant as is commonly the case with various federal funds such as Individuals with Disabilities Act (IDEA), Revenue Codes 5441-42. The Source of Funds Code may also be used to aggregate costs across subfunds, such as
teachers' salaries and supplies, to construct the reports necessary for various granting agencies.
When used to identify a federal project, the Source of Funds Code may also be associated with
accounts receivable, accounts payable, and fund balance accounts pertaining to that project. With
the exception of the cash account, a balance sheet for the project may be drawn from the general
ledger utilizing this code dimension.
70. ePeGS Funding Application In ePeGS, all budgets will use object and function codes that are in the Missouri Financial Accounting Manual.
Program person should work closely with the finance person to make sure the accounting system is set up appropriately.
71. Function Code Changes For the 2011-2012 year, function codes used in ePeGS have changed in most programs.
Use of upper hierarchy structure
2200 vs. 2210
Descriptor changes:
1200 Special Programs has changed to Supplemental Instruction
2200 Support Services Instruction Staff has changed to Professional Development
Link will provide group of applicable function codes in the Accounting Manual
Sweep over will provide function codes needed for ASBR.Sweep over will provide function codes needed for ASBR.
72. 1000 Instruction
1111 Elementary
1131 Middle School
1200 Special Programs
1211 Gifted
1250 Culturally Different
1251 - Title I Instruction
73. PD Function Code Examples 2000 Support Services
2100 Pupils (attendance, social workers, guidance, etc)
2200 Instructional Staff (Professional Development)
2210: Improvement of Instruction Services
2211 Service Area Direction
2212 Instruction and Curriculum Development Services
2213: Instructional Staff Training Services (fall outside the direction of Board approved plan)
2214: Professional Development (1% - meets the objectives of the board approved school improvement plan) The grids in ePeGS will usually use higher level codes such as 2200. The bookkeeper will break down to specific codes needed for the ASBR and other reporting.
2000 Support Services
2100 Students (Attendance, Social Workers, Guidance, Health, Psychological Services, Speech Pathology and Audiology Services)
2200 Instructional Staff
2300 General Administration (Board of Education, Office of Superintendent, etc.)
2324 State and Federal Relations Services Developing & maintaining good relationships with State and Federal officials. (Grant Admin)
2400-- School Administration (Building Level Admin; Office of the Principal, etc.)
2500-- Business
The grids in ePeGS will usually use higher level codes such as 2200. The bookkeeper will break down to specific codes needed for the ASBR and other reporting.
2000 Support Services
2100 Students (Attendance, Social Workers, Guidance, Health, Psychological Services, Speech Pathology and Audiology Services)
2200 Instructional Staff
2300 General Administration (Board of Education, Office of Superintendent, etc.)
2324 State and Federal Relations Services Developing & maintaining good relationships with State and Federal officials. (Grant Admin)
2400-- School Administration (Building Level Admin; Office of the Principal, etc.)
2500-- Business
74. Accounting Records - Record Retention Must retain records that show:
Amount of funds by grant
How the funds are used
Total cost
Share of costs provided from other sources
Compliance with program requirements
Other records to facilitate an audit
Federal records must be retained for 3 years after the end of the budget period
Statute of limitations: 5 years
75. Internal Controls LEAs must maintain effective controls and accountability.
LEAs must adequately safeguard all federal funds and property.
LEAs must assure that all federal funds and property are used solely for authorized purposes.
Auditors are required to test internal controls.
This area has become a catch-all for monitoring findings. Internal Controls are tools to help program and financial managers achieve results and safeguard the integrity of their programs.
Internal Controls includes the plan of the organization and processes for planning, organizing, directing, controlling and reporting on agency operations.
Objectives of Internal Control:
Effectiveness and efficiency of operations
Reliability of financial reporting
Compliance with applicable laws and regulations
Safeguarding assets
Internal Controls are tools to help program and financial managers achieve results and safeguard the integrity of their programs.
Internal Controls includes the plan of the organization and processes for planning, organizing, directing, controlling and reporting on agency operations.
Objectives of Internal Control:
Effectiveness and efficiency of operations
Reliability of financial reporting
Compliance with applicable laws and regulations
Safeguarding assets
76. Components of Internal Controls Control Environment Organization Structure and Culture
Risk Assessment Internal and External
Control Activities Proper segregation of duties, physical controls over assets, proper authorization, and appropriate documentation
Information and Communications updated guidance from SEA; and communication between program and financial staff
Monitoring Periodic review; program assessments; and reconciliations/comparisons of data
Since Federal Program Coordinator may not know all the financial rules, they should work closely with the financial staffSince Federal Program Coordinator may not know all the financial rules, they should work closely with the financial staff
77. Control Over Reporting Effective internal control over financial reporting
Provides reasonable assurances that misstatements, losses, or noncompliance with applicable laws and regulations, material in relation to financial reports, would be prevented or detected.
78. Budget Control LEA MUST submit the NCLB Consolidated Application by July 1
Actual expenditures must be compared with budgeted amounts for each grant on a routine basis
Amendments to the approved application must be submitted prior to obligation of funds
79. Allowable Costs Basic Guidelines:
All costs must be necessary, reasonable, allocable and legal under state and local law.
In addition all costs must conform with federal law & grant terms and must be adequately documented
80. Necessary and Reasonable Must be necessary for the performance or administration of the grant
Must follow sound business practices:
Arms length bargaining (procurement processes)
Follow federal, state and local laws
Follow terms of the grant award
Fair market prices
Act with prudence under the circumstances
No significant deviation from established prices
81. Allocable
Can only charge in proportion to the value received by the program
Legal under state and local law
If you cannot do under state law, cannot pay with federal funds
Example: (Title II.A allows for hiring incentives, but Missouri law does not allow)
Example: (Some services to nonpublic schools- That is why Missouri has bypass for Title II.D and for some districts Title I) Necessary and Reasonable
82. Source Documentation Accounting records must be supported by source documentation such as cancelled checks, paid bills, payrolls, time and attendance records, contract and sub-award documents.
Electronic copies are okay.
Proper authorization Example: Make sure that time and effort logs are signed by the staff.
Must retain for at least 3 years from the end of the grant. The statute of limitations is 5 years.
83. Inventory/Property Management System Equipment (Items costing $1,000)
Title vests with the USED for all purchases with Federal dollars
Management Requirements Inventory
Disposition
84. Management Requirements 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 Inventory List must contain:
Description
Serial number or other ID
Title information
Acquisition date
Cost
Percent of Federal participation
Location
Use and condition
Ultimate dispositionInventory List must contain:
Description
Serial number or other ID
Title information
Acquisition date
Cost
Percent of Federal participation
Location
Use and condition
Ultimate disposition
85. Inventory Sample is found at the Grants Management websiteSample is found at the Grants Management website
86. Disposition Key questions to ask when deciding to dispose of equipment purchased with federal funds:
Has the item exceeded its useful life?
Is the item no longer effective for the program for which it was purchased?
Is the item no longer effective in another federal program?
If answer is yes, SUBMIT PURGE REQUEST.
87. Disposition Disposition of Equipment that is no longer effective or needed in the federal program:
Acquisition cost < $5,000 may be purged or transferred to the school district at no cost, upon DESE approval.
Records of transferred equipment must be retained for three years from date of transfer.
The written request to purge or transfer must include: item, date of acquisition, original cost, reason for purge or transfer, and anticipated use.
Acquisition cost > $5,000 LEA must request disposition instructions from DESE
Equipment greater than $5,000 most typically is mobile unit. SEA uses the double-declining depreciation used by the IRS to determine the fair market value of these items.Equipment greater than $5,000 most typically is mobile unit. SEA uses the double-declining depreciation used by the IRS to determine the fair market value of these items.
88. Supplies Must maintain effective control and accountability
Must adequately safeguard all such property
Must assure that it is used solely for authorized purposes
89. Procurement 34 CFR 80.36 applies
LEAs will use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurement conform to applicable Federal law and the standards under 80.36.
Procurement Procedures should be written BOARD POLICIES?BOARD POLICIES?
90. Procurement Standards All costs have to be necessary
All costs must be reasonable
Must review all proposed purchases to avoid unnecessary or duplicative items
All procurement transactions must be conducted with full and open competition
Code of Conduct to avoid conflict of interest
Protest procedures to handle disputes
Must not restrict competition
91. Procurement Records Suspension and Debarment
www.epls.gov
Retain records to document:
Rationale for the method of procurement
Selection of contract type
Contractor selection or rejection
Basis for contract price What is the Excluded Parties Lists System (EPLS)? EPLS is a web-based system that identifies parties excluded throughout the U.S. Government (unless otherwise noted) from receiving Federal contracts or certain subcontracts and from certain types of Federal financial and nonfinancial assistance and benefits. What is the Excluded Parties Lists System (EPLS)?EPLS is a web-based system that identifies parties excluded throughout the U.S. Government (unless otherwise noted) from receiving Federal contracts or certain subcontracts and from certain types of Federal financial and nonfinancial assistance and benefits.
92. Time Distribution
93. Time Distribution If federal funds are used for salaries time distribution records are required (sometimes referred to as time and effort records)
Must demonstrate that employees paid with federal funds actually worked on the specific federal program/cost objective
Time and Effort Requirements:
Semi-annual certification
Time and Effort logs
94. Time and Effort Requirements All federally funded FTEs must be recorded on Core Data.
All partially-funded FTEs must maintain time and effort logs or classroom schedules.
Single Funding Certification Form signed by employee or building principal
95. Time Distribution A Cost Objective is a specific grant award/program that requires grantees to track specific cost information
Who must participate?
All employees paid with federal funds
Some employees paid with non-federal funds (match or cost-sharing activities, i.e., Even Start program) On the Time Distribution sheet, it is okay to identify non Federal activities but it is not okay to simply show Federal activities. The certification form must describe specific federal program cost objectives.On the Time Distribution sheet, it is okay to identify non Federal activities but it is not okay to simply show Federal activities. The certification form must describe specific federal program cost objectives.
96. Time Distribution If employee works 100% on single cost objective, need Single Funding Certification, signed every six months by supervisor or employee
If employee works on multiple cost objectives, need monthly Time and Effort Log
Sample forms are located on the Federal Program website under Publications and forms.
If employee woks on multiple cost objectives, need personnel activity reports (PAR). This form should be signed every month by employee. The timesheet can use a percentage of time. Example: for the month of March 2011, I spent my time 50% on Title I School Improvement and 50% on non-federal programs.
Who works on multiple cost objectives?
More than one federal award
A federal award and a non-federal award
An indirect cost activity and a direct cost activity
Two or more indirect activities which are allocated using different allocation bases; or
An unallowable activity and a direct or indirect cost activity
It is what you worked on.Sample forms are located on the Federal Program website under Publications and forms.
If employee woks on multiple cost objectives, need personnel activity reports (PAR). This form should be signed every month by employee. The timesheet can use a percentage of time. Example: for the month of March 2011, I spent my time 50% on Title I School Improvement and 50% on non-federal programs.
Who works on multiple cost objectives?
More than one federal award
A federal award and a non-federal award
An indirect cost activity and a direct cost activity
Two or more indirect activities which are allocated using different allocation bases; or
An unallowable activity and a direct or indirect cost activity
It is what you worked on.
97. Time Distribution - Schoolwide Schoolwide Programs
Guidance says that time and effort depends upon if the district combines funds into a single account.
If school consolidates Federal, State and local funds in a single account, not required to file single funding certification
If school does not consolidate funds into a single account, must complete single funding certification or time & effort log for federal employees.
Because federal funds are consolidated with State and local funds in a single account, there is no distinction between staff paid with Federal funds and staff paid with State and local funds from the single account.
In effect, payment from the single account certifies that the employee works only activities of a single program or cost objective, i.e., the Schoolwide pool program.
If a school operating a Schoolwide program does not consolidate Federal funds it receives in a single account, an employee who works on a Federal program or cost objective must meet the time distribution requirements of a targeted school, ie., single account certification or PAR.
Because federal funds are consolidated with State and local funds in a single account, there is no distinction between staff paid with Federal funds and staff paid with State and local funds from the single account.
In effect, payment from the single account certifies that the employee works only activities of a single program or cost objective, i.e., the Schoolwide pool program.
If a school operating a Schoolwide program does not consolidate Federal funds it receives in a single account, an employee who works on a Federal program or cost objective must meet the time distribution requirements of a targeted school, ie., single account certification or PAR.
98. Time and Effort Log Time and Effort Log must be:
After the fact
Account for total activity
Signed by employee
Prepared at least monthly and coincide with one or more pay periods
Time increments reported on this log should be sufficient to recognize the number of different activities performed and the dynamics of these responsibilities
99. Time Distribution To minimize audit/monitoring findings:
Plan budget well
Develop written time distribution policies
Make sure that all logs are in sufficient detail and signed by appropriate staff
Train employees
Provide close supervision
100. Maintenance of Effort
Comparability of Services
Supplement, Not Supplant Fiscal Issues
101. Maintenance of Effort Per pupil expenditures or the aggregate expenditures, whichever is most favorable for the LEAPer pupil expenditures or the aggregate expenditures, whichever is most favorable for the LEA
105. Waiver of Fiscal Requirements
106. Comparability of Services LEAs having multiple attendance areas serving same or similar grade spans must demonstrate compliance with comparability requirements annually.
State and local funds used to provide services in Title I schools are at least comparable to services provided in schools not receiving Title I funds.
If an LEA doesnt meet Comparability requirements, the result is the loss of all Title I funds. No waiver available.
Major focus of USDEMajor focus of USDE
107. Comparing Student/Teacher FTE Ratios Title I schools do not exceed 110% of the average for non-Title I schools
Comparing Student/Teacher Salary Ratios Title I schools ratio is at least 90% of the average in non-Title I schools.
Comparing State and Local Per Pupil Expenditure Ratios Title I schools ratio is at least 90% of the average in non-Title I schools.
Comparing Student/Teacher FTE Ratios - Comparability is achieved when the student/teacher FTE ratios in the Title I schools do not exceed 110% of the average for non-Title I or comparison group schools;
2. Comparing Student/Teacher Salary Ratios - Comparability is achieved when the average per-pupil salary expenditure in Title I schools is at least 90% of the average in non-Title I or comparison group schools; or
3. Comparing State and Local Per Pupil Expenditure Ratios - Comparability is achieved when the average per-pupil state and local expenditure in Title I schools is at least 90% of the average in non-Title I or comparison group schools.
Comparing Student/Teacher FTE Ratios - Comparability is achieved when the student/teacher FTE ratios in the Title I schools do not exceed 110% of the average for non-Title I or comparison group schools;
2. Comparing Student/Teacher Salary Ratios - Comparability is achieved when the average per-pupil salary expenditure in Title I schools is at least 90% of the average in non-Title I or comparison group schools; or
3. Comparing State and Local Per Pupil Expenditure Ratios - Comparability is achieved when the average per-pupil state and local expenditure in Title I schools is at least 90% of the average in non-Title I or comparison group schools.
108. DESE uses October MOSIS/Core Data information to compare Student/Teacher FTE Ratios Title I schools do not exceed 110% of the average for non-Title I schools.
Is this reliable? Only to the extent that the district has reliable information on Core Data.
LEA must be able to document compliance regardless of what DESE determines. Notes:Notes:
109. Comparability of Services As you plan your teaching assignments for the 2011-2012 school year, keep in mind that districts with multiple attendance centers must demonstrate comparability in order to receive Title I funding.
Guidance is available at http://www.dese.mo.gov/divimprove/fedprog/financialmanagement/ComparabilityofServices.html
110. Supplement-Not-Supplant Requirement: An LEA shall use Federal funds received under NCLB programs only to supplement the funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the activities authorized under the individual programs, and not to supplant such funds. Notes:Notes:
111. Supplement-Not-Supplant A-133 Compliance Supplement presumes supplanting in 3 situations:
Used federal funds to provide services the LEA is required to make available under other federal, state or local laws
Used federal funds to provide services the LEA provided with state or local funds in the prior year
112. Supplement-Not-Supplant Used Title I, Part A or Migrant funds to provide the same services to Title I or Migrant students that the LEA or SEA provides with state or local funds to nonparticipating students
Special Rule for Title I: Exclude any supplemental state or local funds spent in any school for a program meeting the intents and purposes of Title I, Part A.
CONDITIONS THAT APPLY
Special Rule for Title I: Exclude any supplemental state or local funds spent in any school for a program meeting the intents and purposes of Title I, Part A.
CONDITIONS THAT APPLY
113. Supplement-Not-Supplant KEY Question: What would have happened in the absence of federal funds?
Cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with state or local funds. Example: Superintendent cannot be counted in Administration Pool because they would otherwise be paid with state or local funds.
Example: Superintendent cannot be counted in Administration Pool because they would otherwise be paid with state or local funds.
114. Supplement-Not-Supplant To monitor the Supplement Not Supplant Requirement,
DESE compares Core Data staff to staff coded on the NCLB Consolidated Application
DESE requires the LEA to submit a Supplement, Not Supplant Worksheet for class size reduction teachers
Class Size Reduction Teachers District must meet MSIP required student/teacher ratio before federal funds can be used to reduce class size.
115. Supplement-Not-Supplant Presumption of supplant is rebuttable if the LEA can demonstrate (written documentation such as budget information, planning documents, class-size data from previous years and upcoming year, board minutes, other material) that it would not have provided the services in question with non-federal funds had the federal funds not been available.
Notes:Notes:
116. Supplement-Not-Supplant It is difficult to rebut supplant after the fact.
Board meeting should occur before the decision to hire.
LEA must document with budget information. Notes:Notes:
117. Guidance documents Education Department General Administrative Regulations (EDGAR)
http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html
OMB Circulars
http://www.whitehouse.gov/omb/circulars
118. dese.mo.gov
webreplyfgm@dese.mo.gov or
webreplyFinancialMgmt@dese.mo.gov
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