Subrecipient Fiscal Monitoring Systems

1. Subrecipient Fiscal Monitoring Systems Implementation and Outcomes in Idaho

2. OSEP Disclaimer • 2019 OSEP Leadership Conference DISCLAIMER: The contents of this presentation were developed by the presenters for the 2019 OSEP Leadership Conference. However, these contents do not necessarily represent the policy of the Department of Education, and you should not assume endorsement by the Federal Government. (Authority: 20 U.S.C. 1221e-3 and 3474)

3. Presenters Dr. Charlie Silva SEA Director Idaho State Department of Education, Special Education Julie Mead LEA Director Caldwell School District, Special Education Anthony Mukuna, CPA Funding and Accountability Coordinator Idaho State Department of Education, Special Education

4. Session Objectives • Explain the benefits and outcome of incorporating the risk based approach within a new fiscal monitoring system at the SEA level • Describe the different tools and processes • Establish the correlation between IDEA fiscal metrics and program outcomes at the SEA and LEA level

5. Agenda • Special Education Facts in Idaho - Charlie • Fiscal Monitoring Past Practices – Charlie and Julie • Fiscal Monitoring System Implementation – Anthony • Risk Assessment – Anthony • Fiscal Monitoring Procedures and Program Outcomes – All • SEA and LEA Directors Stories – Charlie and Julie

6. Special Education Facts in Idaho

7. Where is Idaho?

8. Local Educational Agencies in Idaho • Approximately 70-75% of Idaho’s Schools are located in rural areas scattered throughout the State. • In FY 2018-2019, 166 Local Educational Agencies (LEAs) • 47 out 166 are Charter Schools stand alone LEAs • 119 out 166 are District Schools LEAs • 149 out 166 applied for IDEA Part B Funds in FY 2018-2019 • We anticipate 5 additional charter schools next year • Our fall 2018 special education child count was 34,310

9. Special Education in Idaho • 72% of students with disabilities are White • 21% are Hispanic/Latino.

10. Idaho Special Education Facts • Almost 65% of students with disabilities are eligible under Speech or Language Impairment, Specific Learning Disability or Other Health Impairment.

11. Idaho Special Education Facts cont’d • 63% of students with disabilities ages 6-21 are in the regular classroom > = 80% of the time • 26% are in the regular classroom 40% - 79% of the time.

12. Idaho Special Education Funding FY 2017 Funding was $253,643,754

13. Idaho Special Education Organization Chart

14. Fiscal Monitoring Past Practices What was done in the past in Idaho?

15. Procedures and Methodology

16. SEA Comments Past Practices • No clear procedures at the SEA level • No clear expectations at the LEA level • If SEA was unclear on process, LEAs had no idea of what to expect • No systematic selection process. . . review or no review? • Opportunity to create a system

17. LEA Comments on Past Practices • More systematic and consistent audit practices needed at the LEA level • Most LEAs want to continually improve practices • A method for checking current practices and procedures against federal and state expectations was needed

18. Fiscal Monitoring System implementation in Idaho How were the legal requirements applied in Idaho?

19. Monitoring Requirements 2 CFR §200.331 – Subrecipient monitoring/requirements for pass-through entities: • Must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and subaward terms and conditions. • May conduct risk assessments before or after subawards are made. • Must use risk assessment results to determine appropriate subrecipient monitoring activities.

20. Idaho Fiscal Monitoring • As a pass-through entity we were required to carry out our fiscal monitoring responsibilities as stated in the Federal regulation codes: 34 CFR 300.600 & 2 CFR 200.331 • Idaho implemented a plan in line with the Uniform Grant Guidance (UGG) requirements in November 2017.

21. Idaho Fiscal Monitoring Purpose • Set the standards for fiscal monitoring and oversight • Standardize evaluation and monitoring guidelines • Identify each component of subrecipients fiscal monitoring • Provide fiscal technical assistance to LEAs

22. Collaboration Efforts for Implementation

23. Transparency and Technical Assistance

24. New Procedures and Methodology Annual Risk Assessment • Using data collected at SEA level in normal operations Desk Review • Performed remotely • Review of accounting and fiscal records Field Review • On-site visit of subrecipients • Thorough review of accounting and fiscal records

25. Risk Assessment How was risk factor incorporated in Idaho’s monitoring system?

26. Risk Indicators and Weight

27. Monitoring Selection Sequential Sampling Method • Previously used monitoring method - still widely used Risk Based Method • New method in line with the Uniform Grant Guidance requirements Idaho State Department of Education Special Education uses a combination of the two methods.

28. Monitoring Selection Methods

29. Fiscal Monitoring Procedures and Program Outcomes What are the testing procedures? How do these correlate to program outcomes?

30. Fiscal Monitoring Testing Procedures

31. Program/Student Outcomes Testing procedures designed to protect, secure and retain funds invested in special education Money $$$ helps buy resources to achieve better students outcome Better students outcome often requires additional resources Program and Student Outcome $$$ Additional resources require more money $$$

32. Process for Student Outcome • Section 2 Cost Principles: Process and Outcome • Test the allowability of costs in compliance with IDEA Part B and Uniform Grant Guidance • Protect funds intended to serve students with disabilities • Cross collaboration between fiscal and program staff. Fiscal staff do not see IEPs • Section 3 Time and Effort: Process and Outcome • Test process for allowability of salaries and benefits charged to the IDEA and the MOE • Protect funds intended to serve students with disabilities • Save time and resources of staff by implementing an effective time tracking system upfront

33. Process for Student Outcome Con’t. • Section 4 IDEA Specific Requirements: Process and Outcome • Test IDEA requirements such as MOE and Private School Proportionate Share • Protect funds intended to serve students with disabilities enrolled in private schools • Protect MOE general funds dollars already invested in special education • Section 5 Inventory Management: Process and Outcome • Test the inventory management system and the procedures • Protect equipment and resources purchased to benefit students with disabilities • Reduce the risk of misusing or misplacing SPED program inventories

34. Process for Program Outcome • Section 6 Contracts and Procurement: Process and Outcome • Test contract administration and procurement systems and procedures • Minimize cost and maximize savings as intended by federal procurement rules • Mitigate the risk of bad contracts with unintended consequences for the program • Section 8 Financial Management System: Process and Outcome • Test financial management and accounting systems for efficiency and effectiveness • Budget transparency for better planning by LEA directors • Cross collaboration for better programmatic decisions aligned with budget availability

35. Fiscal Technical Assistance Process

36. SEA and LEA Directors Stories How did the fiscal monitoring system improve program outcome for a SEA director? How did the fiscal monitoring system improve program outcome for a LEA director?

37. SEA Director - Process • Opportunity to create a system to align with other federal programs • Consistency across programs is essential at the SEA level • Factors to consider when building a system • Sustainability – what will you need in the 1st, 2nd, 3rd years and on . . . • Leveraging – what is already in place? • Equity – All LEAs are not created equally

38. SEA Director - Benefits of Creating a System • Everyone knows the ground rules • Proactive vs reactive • Consistency • Transparency • Partnerships – Here to support • Fiscal Technical Assistance • We all have the same goal • Improve outcomes for students with disabilities

39. LEA Director – Selection Process • First Impressions • No one loves Audit • LEAs don’t want the State Department to see their errors • Prior to audit notification • Reviewed the Fiscal Monitoring Procedures manual • Reviewed the risk assessment scoring process • No surprises--it seemed reasonable

40. LEA Director - Audit Process and Outcome • Audit process from the LEA perspective • Step one: gather and send requested information • Step two: in-district visit • Step three: results and corrections • Change in practice--impact on the district • Time and effort • Policies • Oversight without being overbearing • Developing relationships with the team at the State Department

41. Questions and Discussion • How important do you think fiscal monitoring is to help support program activities? • Do you have a fiscal monitoring system in place? Have you identified strengths and weaknesses of your current system after todays’ presentation? • What is the level of collaboration between fiscal monitoring staff and program staff in your state?

42. Idaho Team Idaho Team Dr. Charlie Silva Special Education Director - SEA Email: csilva@sde.Idaho.gov Phone: 208-332-6806 Julie Mead Special Education Director - LEA Email: jmead@caldwellschools.org Phone: 208-455-3300 Anthony Mukuna, CPA Funding and Accountability Coordinator - SEA Email: amukuna@sde.Idaho.gov Phone: 208-332-6916

43. OSEP • 2019 OSEP Leadership Conference DISCLAIMER: The contents of this presentation were developed by the presenters for the 2019 OSEP Leadership Conference. However, these contents do not necessarily represent the policy of the Department of Education, and you should not assume endorsement by the Federal Government. (Authority: 20 U.S.C. 1221e-3 and 3474)