Federal Fiscal Monitoring, Personnel Documentation, and Consolidated Accounts �VASBO �January 11, 2019��

Cassandra Ryan Kristine Seipel

cassandra.ryan@vermont.gov kristine.seipel@vermont.gov

802-479-8545 802-479-7451

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Monitoring is Required

• Federal 2 CFR Part 200 (Uniform Grants Guidance) requires the AOE to monitor all federal grants the AOE awards to subrecipients.
• Programmatic Federal Regulations such as Child Nutrition (USDA) and Title I (USED) also require programmatic monitoring specific to the funding source
• Vermont State Administrative Bulletin 5 requires all State Agencies/Departments monitor all State grant awards.

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Goals of Monitoring

• Ensure effective use of Federal and state grant dollars
• Measurable Results
• Right service is provided to the right population during the right timeframe
• Transparency
• Protecting Personally Identifiable Information (PII)

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Types of Monitoring?

• Monitoring includes:
• Programmatic Monitoring: completed by the AOE Program Manager(s)
• Fiscal monitoring*: completed by the AOE School Finance Fiscal Regulatory and Compliance staff

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*Today we will only be talking about Fiscal monitoring

Fiscal Monitoring

• Fiscal Monitoring:
• is for current year expenditures
• starts in January of each year (FY19 list is already set and LEAs have been contacted)
• There are two ways your organization may qualify for Fiscal Monitoring:
• Risk Assessment
• Special Circumstance

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What Does AOE Review During Fiscal Monitoring?

Policies and Procedures

• Federal regulations require the below policies and procedures:
• Policies
• ☐ Capitalization Policy
• ☐ Conflict of Interest Policy (Procurement)
• ☐ Travel Reimbursement Policy

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• Procedures
• ☐ Allowability of Cost Procedure
• ☐ Management of Equipment Procedure
• ☐ Procurement Procedure
• ☐ Travel Reimbursement Procedure
• VASBO website has templates of the above – be sure to customize as applicable.

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Policies and Procedures Review

• Are policies and procedures compliant?
• Where are the policies and procedures located?
• How do new employees access the policies and procedures?
• Are your policies and procedures up-to-date with federal regulations?
• How often do you review to be sure your internal processes are still in line with the policies and procedures?

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How do we use your Policies and Procedures?

AOE 3.0 Financial Reports

• AOE 3.0s are the monthly financial reports used to claim grant funds from the AOE.
• Monitors are going to review the most recently submitted AOE 3.0 reports and the back-up accounting records for each of the grants being monitored.
• The back-up documentation needs to match the request of the reimbursement.
• The earning of program income must be reported on the AOE 3.0 and will be checked by the monitoring team.
• Make sure to keep a copy of all accounting reports that informed the AOE 3.0 submission.

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Equipment Inventory

• Federal regulations require monitoring of equipment purchases and inventory controls.
• Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level

Equipment Inventory

Monitors will ask if “Equipment” has been purchased with federal funds (in whole or part) not just for the current fiscal year.

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If yes, we will look for the following:

• copy of the equipment inventory to verify that all required components are being accounted for. *VASBO has a template Excel file on its website
• proof that that a physical inventory of the Equipment was completed within the prior two years

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Subgrant Documents�(if applicable)

• Supervisory Unions use a subgrant documents to transfer grant dollars/assurances to a member town school district for grant expenditures that will be incurred at the district level.
• LEAs cannot subgrant state or federal grant funds to any other type of entity without permission from the VTAOE.
• Requires an official subgrant document and must be signed by the Superintendent and Principal
• Look for upcoming VTAOE Technical Assistance regarding subgrants.

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Outside Normal Day Contracts�(Stipends, MOU, etc.)

• Monitors will review all outside normal day contracts for the following:
• Signed by all parties in advance of work
• Clear rate of compensation that is reasonable and necessary
• Clear scope of work that connects to the approved grant strategy

Procurement

• Purchases of goods or services using Federal funds (in whole or in part) must follow Federal regulations, State law and rules, and Local procedures.
• Must be open and competitive
• Must check suspension or debarment (SAM.gov)
• Procurement process must be documented
• Always call AOE fiscal monitoring team with procurement questions before signing a contract or making a purchase.

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Common Procurement Questions

• Limiting Competition is not allowed:
• Specifying a brand name only is not compliant with federal procurement.
• Using geographic preference to choose a vendor is not compliant with federal procurement
• Students Experiencing Homelessness: It is always acceptable to use the non-competitive (sole source) method of procurement for purchasing goods or services required by students experiencing homelessness.

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Contracts

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• Clear scope of work that connects to an approved grant strategy
• Rate of compensation including max value when appropriate
• What is included in the price? – What is outside the price?
• Termination clause for contracts over $10K paid with federal funds
• All signatures completed and dated prior to work occurring. A fully executed contract is one that is signed and dated by all parties.
• Do not pay contracts using federal funds in advance of the work

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�Expenditure Documentation��

• Expenditure Documentation must answer the following questions:
• Is the expenditure approved in the grant award before the expenditure was obligated?
• Is the obligation incurred during the period of performance?
• Is the expenditure allowable under the Uniform Guidance Cost Principles (Subpart E)?
• Is it reasonable and necessary?
• Is it allocable? The grant can only pay for the portion of the expense that benefits the grant’s objective.

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Expenditure Documentation Packet

• Proof of payment (check/payment stub)
• Requisitions, and purchase orders
• Pre-approval forms (as applicable)
• Procurement documentation
• Contracts
• Agendas and certificates of attendance/sign-in sheets
• Travel reimbursement form and itemized receipts (if applicable)
• Packing slips/verification of goods received
• Invoices (approved before payment)
• Other documentation to support the expense

Please also refer to the Grant Expenditure Documentation Guide

Expenditure Packet for�Parent/Family Engagement

• Advertisement/Marketing Flyer
• Agenda
• Sign-in sheet
• Itemized Receipts (as applicable)

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Only light refreshments may be offered. Light refreshments include pizza, pasta, pastry items, coffee, tea, water, etc. Full dinners and buffets are not considered light refreshments.

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Consult with the AOE if there is any doubt expenditures are allowable.

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Compensation of Personal Services Documentation�“Time and Effort”

Monitor will ask for:

• A list of all employees paid in whole or in part with federal funds
• Regularly contracted staff
• Outside regular work contracts: stipends, MOUs, etc.
• Substitutes
• Afterschool programs
• Actual completed documentation (not to be confused with a timesheet)

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Review of Personal Services Documentation

• Are you using the traditional PAR/PC system?
• Monitor will review for:
• Using correct form
• Correct citations are on form
• 100% of employee’s time is recorded
• Accurate cost objectives
• Represents work as actually completed – not budgeted
• Correct signature – dated after completion of the time period reported
• Controlled system: one set of forms being used across programs, tracking to be sure correct documentation is on file, etc.

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PAR / PC

• Periodic Certification (PC): used for employee working 100% of their time on only one cost objective
• Personnel Activity Report (PAR): used for employee working on more than one cost objective
• Blanket Periodic Certification: used for multiple employees working 100% of their time on the same sole cost objective

What Is a Cost Objective

• Activity or function for which costs are measured or data is tracked.
• Examples (not all-inclusive):
• Consolidated Administration
• Title I Tutoring
• Delivery of IEP services
• Delivery of IEP services to PK
• Afterschool program delivery
• SWP School X_
• SWP School Y
• Other (state/local duties)

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Consolidated Federal Accounts

SWP and Consolidated Administration

Consolidated Funds� Accounting

• Consolidated funds include:
• Consolidated Administration (Con. Admin.)
• Schoolwide Program (SWP)

Consolidated Funds

• Consolidated funds support an activity without regard to which program contributed the specific funds used for a particular activity.
• Allow for flexibility on the program side
• Single Cost Objective for time and effort
• Require business office to set up consolidated accounting records

Schoolwide

• School must be approved to participate in Schoolwide
• Income % requirements
• Requires a Schoolwide Plan
• Allows the LEA to serve all students vs. a target assistance approach
• All Schoolwide expenses must be “building based”

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Types of Schoolwide

• SW1—no consolidation (Title I funds only)

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• SW2—consolidation of federal funds

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• SW3—consolidation of federal, state and local funds

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What Funds Can Be Consolidated in SWP

• Title I
• Title IIA
• Title III (with conditions)
• Title IV Part A
• IDEAB
• The amount of funds that can be consolidated are the total IDEA-B allocation for the year divided by the number of children with disabilities in the SU/SD multiplied by the number of students with disabilities in the school
• 21^st Century, Title IV, Part B

Consolidated Administration�“Con Admin”

• Must combine some funds from all grants benefitting from the administration services.
• Con Admin expenditures are included in the administration caps for each grant.

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Accounting Structure �for Consolidated Funds�(SWP and Con. Admin)�

• Must allow the contributing funds to lose their identity/restrictions

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• Must provide detail to support grant funds were spent on allowable expenditures

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Accounting Structure for Consolidated Accounts: (SWP and Con. Admin.)

• LEA must create a separate accounting record for each consolidated account to track associated expenditures and cost data.
• SWP (one for each participating school)
• Con. Admin
• Expenditures must be charged directly to “consolidated fund” accounting record.

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FY19 Schoolwide (SWP) Reporting

SWP expenditures will be reported on its own AOE 3.0

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SWP will be reported at an aggregate of all SWPs rolled-up to the object code level

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GMS system will allocate SWP reported expenditures to funding sources per the method specified on your application.

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FY19 Reporting

Two options for reporting: (choice made on CFP application at beginning of year)

• Sequential
• Prorated

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Sequential

Funds are paid from a single funding source until that source is exhausted, and then remaining payments are paid from the next funding source.

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Title I will always draw first.

The order you draw into SWP in the GMS determines the order of other funding sources.

Sequential - Example

For a SWP that consolidates both Title I and Title IIA funds only, the following will be the sequence of draw:

1. Title I Oldest funds until depleted

2. Title IIA Oldest funds until depleted

3. Title I Old funds until depleted

4. Title IIA Old funds until depleted

5. Title I Current funds until depleted

6. Title IIA Current funds

If your LEA does not have funding in one of the above levels, the system will default to the next category with funding.

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Prorated

Funds are drawn from each source at a rate proportional to the amounts consolidated across all funding sources.

***Oldest and Old funds will be drawn sequentially until depleted. Current funds will be drawn on a prorated basis.

Prorated - Example

For a SWP that consolidates both Title I and Title IIA funds only, the following will be the order of the draw:

1. Title I Oldest funds until depleted

2. Title IIA Oldest funds until depleted

3. Title I Old funds until depleted

4. Title IIA Old funds until depleted

5. Title I Current funds and Title IIA Current funds proportionate to the amounts consolidated

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How will you know the funding split?

The split between funding sources will be identified at the time of payment.

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Once you know the split you can make the journal entry to the contributing source.

FY20 SWP Accounting

• Possible changes in reporting may occur in FY20
• Look for future AOE Technical Assistance

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