Career Education Finance Update

1. Career Education Finance Update MCCTA Spring Conference February 2016

2. Uniform Grant Guidance • Perkins • ePeGS • Compliance Plans • Tiered Monitoring • State CTE Funding • EIF • Salary Reimbursement • Due Dates • Ad Hoc CTE Funding Committee • Other Questions??

3. March 15, 2016 – Springfield • March 16, 2016 – Kansas City • March 22, 2016 – Cape Girardeau • March 23, 2016 – St. Louis • The goal is to provide technical assistance and offer LEAs an opportunity to discuss any issues they may have encountered when working to implement changes required by the Uniform Grant Guidance. • There will be an informal Q&A session in the afternoon of each workshop for the Career Education administrators. • Registration deadline is February 29, 2016. Uniform Grant Guidance Training

4. Federal Award Identification • Time and Effort • Required Certifications • Equipment • Food Costs • Written Policies and Procedures Uniform Grant Guidance

5. The financial management system of the LEA must include: • CFDA Title and Number • Federal Award Identification Number (FAIN) • Fiscal Year of Award • Name of the Federal Agency • Name of the Pass-Through Entity • This information must be included in the LEA accounts (chart of accounts, general ledger, accounting system). • Our Office will include the Federal award identification information on the Perkins Grant Allocation spreadsheet. Identification of the Award in the LEA Accounts

6. The Department has created a Federal Award Identification spreadsheet that contains all of the required components of identification of Federal awards received and expended. • The spreadsheet may be used by LEAs to fulfill this requirement; however, the Department encourages LEAs to enter the Federal award identification information in their accounting systems, if possible. • The Federal Award Identification spreadsheet is located on the Perkins IV Finance page at the following address: • http://dese.mo.gov/financial-admin-services/career-education-finance/perkins-iv-finance Federal Award Identification Spreadsheet

7. The new Federal regulations do not require any specific documentation to support the charges for compensation of personal services. • However, our Department will be more restrictive and continue to require the use of the semi-annual time certifications, personnel activity reports (PARs), and time and effort reports to support charges to the Federal award for salaries and wages. • Our Department strongly recommends the use of the sample time and effort documents located on our website. Compensation for Personal Services

8. School Districts • Semi-Annual Time Certification—single cost objective • Personnel Activity Report (PAR)—multiple cost objectives • Institutions of Higher Education • Time and Effort Report • The sample time and effort documents are located on the Perkins IV Finance page at the following address: • http://dese.mo.gov/financial-admin-services/career-education-finance/perkins-iv-finance Time and Effort Documentation

9. These salaries should normally be treated as indirect costs unless all of the following conditions are met: • Such services are integral to the project or activity • Individuals involved can be specifically identified with the project or activity • Such costs are explicitly included in the budget • Costs are not also recovered as indirect costs • For administrative (Directors, Assistant Directors, Coordinators, Deans, etc.) and clerical positions, the LEA must have a job/position description on file that indicates the percentage of time directly involved in the administration of the Perkins grant (but only if a portion of the salary is charged to the grant). Salaries of Administrative and Clerical Staff

10. To assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved budget, payment requests and FERs will include the following certification statement: • “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise.” • Employees of the LEA who are responsible for submitting payment requests and FERs must ensure the information is accurate and complete. All payment requests and FERs must have documentation (general ledger, accounting report, etc.) that supports the amount submitted. • The certification statement has been added to the payment request and will be added to the FER in the near future. Required Certifications

11. Equipment records must be maintained by the LEA and include the following: • Description of the equipment • Serial number or other identification number • Source of funding for the equipment • Federal Award Identification Number (FAIN) • Who holds title, if applicable • Acquisition date • Cost of the equipment • Percentage of Federal participation in the cost of the equipment • Location of the equipment • Use and condition of the equipment • Ultimate disposition data • There has been one new data element added to the requirements for equipment records—Federal Award Identification Number (FAIN). Our Office will include the FAIN on the Perkins Grant Allocation spreadsheet. Equipment Requirements

12. During the time that equipment is used for the program it was acquired, the LEA must also make equipment available for use on other programs provided that such use will not interfere with the work on the program for which it was originally acquired. • When acquiring replacement equipment, the LEA may use the equipment to be replaced as a trade-in or sell the equipment and use the proceeds to offset the cost of the replacement equipment. • Regardless of cost, the LEA must maintain effective control over and adequately safeguard all property and assets. Equipment Miscellaneous

13. Our Office has created a sample equipment inventory document similar to the sample time and effort documents. • The sample equipment inventory document contains all of the required data elements plus a physical inventory certification. • The sample equipment inventory document is located on the Perkins IV Finance page at the following address: • http://dese.mo.gov/financial-admin-services/career-education-finance/perkins-iv-finance Equipment Inventory

14. Meal costs at meetings or trainings are typically not allowable under Federal awards unless the LEA can document that the expenditures for food were reasonable in cost, necessary to accomplish program goals and objectives, and an integral part of the instructional program. • Our Office has revised the guidance on food costs at LEA hosted meetings or trainings. • Effective July 1, 2015, LEAs must abide by the new guidance. • The supporting documentation for the food expenditures will be what is monitored related to the meal costs charged to the Perkins grant. Meal Costs at LEA Hosted Meetings or Trainings

15. The USDE has indicated that there is a very high burden of proof to show that paying for food with Federal funds is necessary to meet the goals and objectives of a Federal grant. • Therefore, LEAs will have to make a compelling case to justify food costs as reasonable and necessary. • The Uniform Grant Guidance—Food Costs is located on the Perkins IV Finance page at the following address: • http://dese.mo.gov/financial-admin-services/career-education-finance/perkins-iv-finance Guidance Related to Food Costs

16. LEAs must have written procedures on cash management. • Procedures must explain the process used to request reimbursement of Federal funds. • Employees of the LEA who are responsible for submitting payment requests and FERs must abide by these procedures. • These employees should obtain a copy of their LEA’s procedures and keep them on file. • These procedures and the process followed will be what are monitored related to the Perkins payment requests and FERs. Written Cash Management Procedures

17. LEAs must have written procedures on determining allowability of costs for the Federal award. • Procedures must explain the process used throughout the grant development and budget process (possibly reference Perkins Act, UGG, DESE Guidance, and/or List of Allowable and Unallowable Costs). • Procedures should serve as a “roadmap” that is used from beginning to end. • Procedures should indicate what employees are responsible for preparing and approving the budget, approving and expending funds, and reporting payments and final expenditures. • Procedures should be a training tool and guide for employees. • These procedures and the process followed will be what are monitored related to the Perkins budget, expenditure of funds, and the reporting of those expenditures. Written Allowability Procedures

18. LEAs must have a written policy on travel. • Policy must explain the requirements of travel status and the reimbursement of travel costs (actual cost basis or per diem basis). • This policy and the process followed will be what are monitored related to the travel expenses charged to the Perkins grant. Written Travel Policy

19. LEAs must retain documentation that participation of the individual is necessary to the Federal award and that the costs are reasonable and consistent with the LEA’s travel policy. • Written justification memo/statement • Travel approval/authorization form • Prior written approval • Documentation should also include a copy of the agenda for the conference/meeting (this proves allocability to the Federal award). • The supporting documentation will be what is monitored related to the travel expenses charged to the Perkins grant. Travel Documentation Justification

20. LEAs have a one-year grace period for implementing the UGG’s procurement standards. Thus, the written procurement procedures will be effective July 1, 2016. • LEAs must have written procedures on procurement. • Procedures must reflect applicable Federal, State, and local laws and regulations. • LEAs must have written procedures on standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. • Procedures should include standards for situations in which a financial interest is not substantial or a gift is an unsolicited item of nominal value. • Procedures must provide for disciplinary actions to be applied for violations of such standards by employees of the LEA. Written Procurement Procedures

21. Our Office has provided recommendations instead of mandatory requirements related to equipment and instructional furniture. • This guidance was effective July 1, 2015. • Equipment: Our Office recommends that all equipment items purchased with Perkins grant funds be received, installed, and available for student instruction by December 31 of each year. However, if the LEA does not meet this deadline, then a justification statement(s) should be written and kept locally as documentation to support the exception to this date. • Rationale: It is the expectation of this Office that equipment items are purchased early in the school year so the students can use them and benefit from their instruction. Students should have ready access to up-to-date equipment that enables improved instruction. The justification statement(s) should address these areas and also explain why the deadline was not met. FY2016 Perkins Changes

22. Instructional furniture: Our Office recommends that LEAs not use Perkins grant funds to purchase instructional furniture. However, if the LEA determines there is a need for this type of item, then a justification statement(s) should be written and kept locally as documentation to support the purchase. • Rationale: The Perkins Act states that the funds must be used to improve the career and technical education programs. In addition, items purchased with Perkins funds should strengthen and support academic and technical skill achievement. Ultimately, the purpose of the Perkins program should be to develop more fully the academic and career and technical skills of students enrolled in CTE. The justification statement(s) should address these areas and also explain why Perkins grant funds were needed to support this type of cost. FY2016 Perkins Changes (cont.)

23. Accounting records don’t agree with payment requests or FERs • Funds obligated and expended outside of the period of availability • Funds used for unallowable costs • Time and effort reporting issues • Inadequate stipend/extra-duty pay documentation • Equipment inventory issues • Inadequate physical inventory documentation • Consortium agreement issues Perkins Monitoring Findings

24. LEAs must complete the Capital Outlay page in ePeGS to receive prior approval for equipment purchases from the Perkins Grant. • Enter data on CTE program area, description of equipment, unit cost, and quantity. • System totals the amounts entered and populates the data on the Budget grid. ePeGS—Capital Outlay Page

25. LEA must only report FTEs and amounts paid from the Perkins grant. • Enter data on FTEs, salaries, benefits, stipends/extra-duty pay, and substitute pay. • Include explanation of new or increased amounts in FTEs, salaries, and benefits and also explanations of any stipends/extra-duty pay and substitute pay. • System totals the amounts entered and populates the data on the Budget grid. ePeGS—Salaries and Benefits Page

26. Enter data on purchased services and materials & supplies. The data for salaries, benefits, and capital outlay are populated from other pages. • Review budget and actual expenditures monthly or at least quarterly—must ensure good fiscal management. • Accurate budgets are important due to the reporting of expenditures on the payment request and final expenditure report. • Must have funds budgeted in a cell to report an expenditure. • Budget revisions—last date to create a budget revision is April 30. • Budgets are estimates—do not have to agree exactly to how funds are spent. Some budget revisions are not necessary—10% variance. ePeGS—Budget Grid

27. Must report actual cumulative expenditures (by both object code and function code). • Formula used to calculate the payment is: Actual cumulative program year expenditures to date – Amount paid to date. • Funds must be budgeted in a cell before a payment can be requested. • Expenditure cells will be grayed out where $0 has been budgeted. • Must be submitted by the 1st day of the month in order to receive a payment that month. • 10% variance—based on the total budget amount—then compares to program costs subtotal. • Certification statement (CMIA requirement). • Must maintain documentation (i.e. account ledger, accounting report) that supports the payment request. ePeGS—Payment Request

28. Opens July 1 of each year. • Due on or before September 30 of each year. • Must enter actual expenditures—budget amounts are shown above the cells. • Must have an amount budgeted in a cell to allow an expenditure to be reported. • 10% variance—based on the total budget amount—then compares to program costs subtotal. • May serve as the final payment request. • Must maintain documentation (i.e. account ledger, accounting report) that supports the payment request. ePeGS—Final Expenditure Report (FER)

29. Desk Monitoring—review of Perkins Finance Self-Assessment. • For FY2016, this was required for Cohort 2. • Access Perkins Finance Self-Assessment through Web Applications—Tiered Monitoring. • Perkins Finance Self-Assessment were available on October 1, 2015 and due on January 31, 2016. • Responses to the self-assessment should be related to the previous year. • Perkins Finance Self-Assessment will be used to identify any LEAs not complying with requirements. Tiered Monitoring

30. On-Site Monitoring—review of financial records using the Perkins Finance Worksheet. • For FY2016, on-site reviews were conducted for Cohort 1. • Perkins Finance Report and LEA Corrective Action Plan (CAP) were completed in the Tiered Monitoring system. • Access On-Site Monitoring through Web Applications—Tiered Monitoring. • LEAs receiving an On-Site Monitoring were determined by reviewing the Perkins Finance Self-Assessment and a risk-based assessment. Tiered Monitoring

31. Effectiveness Index Formula (EIF) is an incentive-based funding system comprised of two components: placement and enrollment. • The formula uses placement data to calculate 90% of the EIF allocation and enrollment data for the remaining 10%. • Data must be submitted through MOSIS. • Please review data for completeness and accuracy. • Questions on data, please contact Mike Griggs or Connie O’Brien in the Office of Data Management Effectiveness Index Formula

32. EIF allocations consist of: • Base funding ($5,000,000 for area career centers and $1,000,000 for comprehensive high schools). • Surplus funding (unspent funds from various programs and grants at the end of the fiscal year). • Only area career centers receive the surplus funding. Effectiveness Index Formula

33. The last several years, each LEA has received the maximum approved salary reimbursement amount that was established in FY2002. • The maximum amounts were based on the number of FTEs in the approved career education programs at each LEA. • This process will remain the same for FY2016. Secondary Salary Reimbursement

34. The Department uses an Adult/Postsecondary Reporting System to determine the salary reimbursement for adult and postsecondary programs. • Data must be submitted through MOSIS. • Please review data for completeness and accuracy. • Questions on data, please contact Mike Griggs or Connie O’Brien in the Office of Data Management Adult/Postsecondary Salary Reimbursement

35. Talking Points • Goal • Delivery System for CTE • Issues with Current Funding • CTE Priorities at the Local Level • Possible Funding Formula Criteria State Career Education Funding