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Office of Field Services Fiscal Review and Auditing Process

Office of Field Services Fiscal Review and Auditing Process. Mike Radke Director Office of Field Services March 6, 2012. OFS Monitoring Process. Program and Fiscal Review Types Desk Reviews Alternative Reviews On-Site Reviews Usually announced but may be unannounced.

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Office of Field Services Fiscal Review and Auditing Process

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  1. Office of Field Services Fiscal Review and Auditing Process Mike Radke Director Office of Field Services March 6, 2012

  2. OFS Monitoring Process • Program and Fiscal Review Types • Desk Reviews • Alternative Reviews • On-Site Reviews • Usually announced but may be unannounced

  3. Program Fiscal Reviews • The program fiscal review process complements the program On Site Reviews process • Goal: Review all LEAs within a 5-year cycle • Program fiscal reviews have a different scope and do not replace Single Audits

  4. Fiscal Monitoring Process Selection • Risk-based criteria Notice • Date and required documentation On Site Visit • Review fiscal records • Prepare report • Require compliance plan for findings • Follow up verification

  5. Risk Factors • Size of Title I Allocation • Late application or amendment submission • Deviations found on Final Expenditure Reports (FER) • LEAs reporting a deficit or low fund balance • Single Audit findings

  6. Risk Factors • Low Graduation Rate • Not making proficiency targets for Reading or Mathematics • A school on the Persistently Low Achieving (PLA) List • And …

  7. Risk Factors • The degree to which: • This LEA has excellent educational program and business office staff working cooperatively to manage grant programs • 2. This LEA produces excellent comprehensive needs assessments and school improvement plans likely to accelerate student achievement

  8. Risk Factors • The degree to which: • This LEA respects all of the major laws, regulations, and guidance for OFS grant programs • All Risk factors considered in identifying highest priority for fiscal reviews

  9. Documents Requested for Program Fiscal Reviews • General Ledger detail and summary for Title I, Part A and programs in the Consolidated Application • Employee list of anyone being paid with Title I or other federal funds • A list of equipment purchased with federal grant funds

  10. Documents Requested for Program Fiscal Reviews • Policies and detailed procedures • Drawdown supporting documentation • Purchase service contracts and related documentation

  11. Scope of Program Fiscal Reviews • Staff • Highly Qualified, Background Checks,Time & Effort, Salaries, Payroll • Policies and Procedures • Created by LEA officials with knowledge of the programs and appropriate approval • Cash Management • Review of the drawdowns and documentation that substantiates each amount requested

  12. Scope of Program Fiscal Reviews • Payroll Expenditures • Direct tracing of the payroll expenditures to the General Ledger and the Consolidated Application • Budget • Comparing of the Consolidated Application (Function and Object Code) to the General Ledger and LEA records for alignment of expenditures

  13. Scope of Program Fiscal Reviews • General Expenditures • Review of the documentation for each of the selected expenditures. Making sure that all expenditures have been approved in the Consolidated Application • Purchased Services • Any professional development or substitute services with ISD or outside agency requires an approved contract to ensure that proper protocols have been followed

  14. Scope of Program Fiscal Reviews • Equipment • Review of the equipment purchased with funds and ensure the equipment is properly inventoried and tagged with the proper funding source

  15. Common Findings - 2010 • Semi-annual certifications and personnel activity reports (PARs): • Not completed after the fact reflecting actual time spent on each cost objective • Not signed by employee (or supervisor) • Criminal background checks are missing from proof of certifications • Errors in personnel costs, and contracts • Expenditures not specifically approved in the application

  16. Common Findings • Questioned costs; unallowable costs; miscoding • Lack of policies and procedures to ensure that proper internal controls are in place, implemented, and properly monitored • Written procedures (and policies) are not detailed and specific to LEA • LEA could not provide adequate documentation for cash draws

  17. Common Findings • LEA’s budget approved by Board does not align with LEA’s Consolidated Application • Inventory listing of items purchased with Title I, Part A funds are not being maintained • Equipment purchased with Title I, Part A funds are not tagged with the funding source

  18. Common Issues with PARs and Semi-Annual Certifications • PARs must be prepared at least monthly, be signed and dated by the employee, and account for the staff person’s total actual activity for all pay periods • Staff members hired for a fully federally funded Title I summer school are required to have a separate certification for that time period

  19. Progressive Compliance Model

  20. Progressive Compliance Model

  21. Progressive Compliance Model

  22. Grant Electronic Monitoring System (GEMS) • File cabinet for documents • * LEA documents • * MDE documents • Monitor scheduling capabilities • Communication capabilities

  23. Grant Electronic Monitoring System (GEMS) • Issues identification and tracking to resolution capabilities • Begins in 2012-2013

  24. Questions? Michael W. Radke, Ph.D. Director, Office of Field Services Michigan Department of Education radkem@michigan.gov 517-373-3921

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