Fiscal Grants Management �VASBO – Business Manager 101� �December 10, 2021�������

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Agency of Education Regulatory Compliance Team��Bob Coathup, robert.coathup@vermont.gov �Abby Houle, abby.houle@vermont.gov �Cassandra Ryan, cassandra.ryan@vermont.gov

VT AOE Fiscal and Regulatory Compliance Team

• Technical Assistance on Fiscal Grant Issues
• Indirect Cost Rates
• Fiscal Monitoring
• Single Audit Review
• Subgranting info
• Emergency (COVID-19) Funds
• Prior Approvals: Equipment / Construction
• Sole Source Letters for Federal Procurement
• State Bid Waivers
• Emergency School Construction Aid
• State Excess Spending Approvals / Construction

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Technical Assistance on Fiscal Grant Issues

Technical Assistance (TA)

• Regulatory Compliance Team (RC Team) sits in School Finance under the Chief Financial Officer - Bill Bates
• RC Team assists LEAs with questions on meeting Federal and State grant compliance questions: specifically, the Federal Uniform Guidance and some sections of VT Title 16
• Always best to reach out with questions as soon as possible and before the LEA incurs an expense.
• Questions are encouraged – no penalty during TA

Laws, Regs, and Other Requirements Impacting Federal Grants

Policies and Procedures�(Federally Required)

• Policies
• Capitalization Policy
• Conflict of Interest Policy (Procurement)
• Travel Reimbursement Policy
• Procedures
• Allowability of Cost Procedure
• Management of Equipment Procedure
• Procurement Procedure
• Travel Reimbursement Procedure
• The RC Team is always willing and able to review the policies and procedures for compliance
• VASBO provides sample templates of each of the required policies and procedures on its website.
• If your entity uses these samples, please make sure they are customized (including the name of your LEA and any other information specific/relevant to your LEA).

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Expenditure Documentation

• All expenditures of Federal grant funds must include back-up documentation to meet the foundational requirements of
• Allowable
• Reasonable
• Necessary
• Allocable
• Each expenditure may require a variety of back-up documentation to meet this requirement.

Need Help

What do you do if you cannot remember what type of documentation you need for your grant expenditure?

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Call AOE Regulatory Compliance Team.

�Compensation - Personal Services �f.k.a. “Time and Effort”�2 C.F.R. §200.430�

• Applies to employees (not outside contractors) paid in part or in whole with federal funds.
• Any employee whose salary is used as a match for a federal program
• Time and effort not on file may result in single audit and/or monitoring findings and / or disallowed costs
• Note: not to be confused with VT State Time Studies

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Standards for Documentation of Personnel Expenses�§200.430(i)

• Based on records that accurately reflect the work performed
• Supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated
• Incorporated into official records
• Documentation is COMPLETE and AVAILABLE
• Reasonably reflect 100% of the total activity for which the employee is compensated – all federal and non-federally supported activities
• Support the distribution of salaries and wages among specific activities or cost objectives if the employee works on more than one award, federal and non-federal awards, an indirect and direct cost activity, etc.

Keep it current / Use a tracking system

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Traditional “Time and Effort” System

• VT LEAs may and do opt to use a traditional system for documenting staff time paid with Federal funds.
• Personnel Activity Report (PAR): for employees working on more than one cost objective
• Periodic Certification: for employees working on one cost objective for 100% of their time
• VT AOE is exploring other methods for meeting the UG requirements – more info to come.

Cost Objective

• 2 CFR §200.1 defines a cost objective as

“… a program, function, activity, award, organizational subdivision, contract, or work unit for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc.”

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• The number of cost objectives determines the method for personnel documentation.

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Examples of Cost Objectives�(not all-inclusive)

A cost objective must capture cost data as needed

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Examples:

• SWP – Alburgh
• SWP – Grand Isle
• Literacy Coach
• 21C Afterschool Program
• Other non-Federal work
• Services to Homeless
• Small Group Math Coach
• Consolidated Administration
• Parental Involvement
• Special Education Preschool Direct Instruction
• Coordinated Early Intervening Services

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Periodic Certification �(PC)

• Use when employee works 100% of their time on ONE cost objective (not based on funding).
• Covers a period of not more than 6 months
• Signed by the employee or a supervisor with direct knowledge
• Blanket PC’s allow for one form for multiple employees working 100% of their contracted time on the same sole cost objective.

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Personnel Activity Report�(PAR)

• Use when employee works on more than one cost objective (not based on funding)
• Completed at least monthly
• Records the split of time actually worked between multiple cost objectives
• Signed by employee
• Must reflect actual work as occurred not as budgeted

Reconciliation �Personnel Activity Reports�§200.430(i)(viii)

• Budget estimates may be used for interim accounting purposes as long as:
• Your system for estimating is reasonable
• Significant changes in work is identified and acted on in a timely manner.
• §200.430(i)(viii)(C) Requires all necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable and properly allocated. This is very important: ex: retirement

Keep It Current

• Employee documentation requirements should be reviewed at least annually to be sure cost objectives and format (PAR/PC) are still relevant.
• New Federal funds will trigger the need for documentation for additional staff.

Need Help

What do you do if you need help documenting staff time or determining cost objectives?

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Call AOE Regulatory Compliance Team.

Procurement with Federal Funds and State Bid Law

• 2 CFR §200.318-327

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• Recommend viewing full August 20, 2021 VT AOE Federal Procurement training video at: https://www.youtube.com/watch?v=7cj0fMb1Wts

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Contract Administration

2 CFR §200.318(b): “Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.”

• Signed Contract: A fully executed contract is one that is signed and dated by all parties.
• Date of execution = the date of the last signature
• Scope of Work:
• Accurate detailed deliverables of work or product
• Negotiate / Establish non-negotiables
• This is your chance to protect your entity by defining your requirements
• What is included in the price? – What is outside the price?
• Scope of the contract must be supported by an approved investment in the approved grant award
• Rate of compensation:
• Clearly defined and include a max value when possible
• connected to the scope of work - identify the rate of compensation using terms that equal how you will measure performance
• Required Clauses: 2 CFR §200 Appendix II
• Different required clauses are triggered based on contract value and nature of contract
• Detail Invoice Requirements: Invoice details, timeline for receiving invoices, dates of services

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Authorization ?’s To Consider

• Which positions at your entity are authorized to sign contracts?
• Authorization should be expressly granted to a position – not assumed – position is committing district assets
• Have the authorized individuals received training on contract administration?
• Do your procedures identify the positions authorized to sign contracts so all staff are aware of the process?

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Consolidated Federal Accounts

• 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
• Must allow the contributing funds to lose their identity/restrictions
• Must provide detail to support grant funds were spent on allowable expenditures per SWP.
• Must be able to report back to the VT AOE under the contributing funding(s) i.e. Title I and Title IIA, Title IV, IDEA etc.
• Require business office to set up consolidated accounting records – detailed in the UCOA Handbook

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• Two Consolidated Funds to be familiar with:
• Schoolwide Program (SWP)
• SW1—no consolidation (Title I funds only)
• SW2—consolidation of Title I and at least one other federal fund
• SW3—consolidation of federal, state and local funds

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• 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

Examples of Funds That Can Be �Consolidated in SWP�(not all inclusive)

• Title I
• Title IIA
• Title III (with conditions)
• Title IV Part A
• IDEA-B*
• 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*
• State and Local Funds*

*Requires advance notice to the AOE

Application Budget

• GMS Application budgets for contributing funds must include the dollars under object codes:

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• SWP Object Code Placeholder: 990
• Con. Admin. Object Code Placeholder: 995
• Please note: These codes (990 and 995) are not part of the UCOA and are not used in your accounting system – they are placeholders in the GMS only.

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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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Reporting

Two options for calculating SWP for reimbursement: Must chose one method of reporting

• 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.
• If Local Funds are part of the School-Wide Consolidation (SW3), then Local and State funds would be used first until exhausted, next Title 1 would be drawn, and so forth.
• Prorated:
• Funds are drawn from each source at a rate proportional to the amounts consolidated across all funding sources.

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AOE 3.0 �Consolidated Funds Reporting

• On the AOE 3.0 for each contributing fund LEAs need to report using the object code placeholders for the amount of SWP expenditures associated with each funding source

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SWP Object Code Placeholder: 990

Con. Admin. Object Code Placeholder: 995

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Need Help

What do you do if you need help with Schoolwide Accounting or Reporting?

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Call AOE Regulatory Compliance Team

Bob Coathup: Robert.Coathup@vermont.gov

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Indirect Cost Rates

What is an Indirect Cost Rate?�(ICR)

• An indirect cost rate is a means of determining the percentage of allowable general management costs that benefit each federal program or activity.

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• Indirect costs are generally administrative costs such as the salaries and expenses for staff engaged in organization-wide (general) activities.

What is an Indirect Cost Rate?�(ICR) cont.

• Charging indirects does not increase your grant award
• Indirect dollars are dollars earned on dollars spent
• Once an indirect is earned – the funds lose federal identity. LEA has ability to be flexible with the earned ICR dollars.
• Cannot draw indirects in advance of supporting direct expenditures

USED/AOE Delegation Agreement

• AOE receives authority from USED to approve LEA rates through a delegation agreement.
• ICRs are approved on an annual basis and follow the LEA fiscal year of July 1 – June 30.
• The ICR is for use on Federal grants / not state grants.

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USED/AOE Delegation Agreement

• Deminimis Rate (10%) Ruling from USED.

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• The De minimis rate is not allowed for Local Education Agencies (LEAs). The Education Department Administrative Requirement (EDGAR), which supersede Uniform Guidance states on a regulatory basis, in  34 CFR §76.560 (d) General indirect cost rates; exceptions.  “The Secretary accepts an indirect cost rate negotiated by a grantee's cognizant agency but may establish a restricted indirect cost rate for a grantee to satisfy the statutory requirements of certain programs administered by the Department.” The De minimis indirect cost rates do not address the supplement not supplant requirements. For this reason, we must negotiate a restricted indirect cost rate to comply with the supplement not supplant requirements.

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• CFR §76.564 (c)(2) Restricted Indirect Cost Rate Formula

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Two Types of Indirect Cost Rates

• Restricted Indirect Cost Rate: For use on Federal grants that contain a supplement not supplant requirement such as:
• Title I, Title IIA, Title IV, Perkins, 21^st Century
• Unrestricted Indirect Cost Rate: For use on Federal grants that do NOT include a supplement not supplant requirement such as:
• ESSER I, ESSER II, NSLP
• You may use the ICR you receive from VTAOE for Federal grants you receive from other state agencies or on Federal grants you receive directly from a Federal Awarding Agency.

ICR calculations for Reimbursement request

• Indirect Cost Rate Calculation template
• The link above is a template that will assist you in budgeting the correct amount of ICR in a Federal grant application to prevent the Derived Indirect Rate to occur.
• The template will assist you with the calculation of the Indirect Cost that include excluded cost in the calculation.

FY23 Indirect Cost Rate (ICR) Application

• Great news:
• The FY23 ICR Application will be emailed to the Business Manager list serve by Monday, December 13, 2021.
• The Agency has decreased the amount of data that will need entering in the application.
• Deadline for the application is January 30, 2022
• Turnaround for ICR approval is 30 days.

Need Help

Interested in applying for an Indirect Cost Rate or have questions on Indirect Cost Rates?

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Call AOE Regulatory Compliance Team

Bob Coathup: Robert.Coathup@vermont.gov

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Fiscal Monitoring

Monitoring

• 2 CFR §200.332 Federal Uniform Grants Guidance requires the AOE to monitor all Federal funds the AOE subgrants to subrecipients.
• Vermont State Administrative Bulletin 5 requires all State Agencies/Departments monitor all State grant awards.
• Different AOE Teams conduct different monitoring's:
• Child Nutrition monitors CN funds
• Program Teams monitor individual programs
• Regulatory Compliance Team monitors all grant programs with a focus on fiscal and administrative functions such as:
• Accounting system
• Procurement practices
• Internal controls / Policies and Procedures / Segregation of duties
• Grant expenditures
• Compensation of personal services documentation
• Etc.

Fiscal Monitoring�How/When?

• Monitoring visits are normally scheduled January – May each year
• Review is for expenditures of grant awards active within that fiscal year
• There are two ways your organization may qualify for Fiscal Monitoring:
• Risk Assessment
• Special Circumstance
• Emergency (COVID-19) Grants will be monitored separately as they cover multiple fiscal periods and fall outside normal monitoring.

Fiscal Monitoring

• Desk / onsite reviews
• AOE will communicate dates and process to those LEAs that are being monitored
• Abby Houle is the RC Team’s main Point of Contact for Fiscal monitoring.
• Monitoring Steps for LEA
• Review
• Report -10 days to notify of errors
• Best Practice, Findings, Disallowed Costs
• Corrective Action Plan to address Findings
• Closeout
• Follow-up – AOE discretion

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Single Audit Review

Subpart F�Audit Requirements�2 CFR §§200.500-200.521

• Highlights:
• 200.501 $750K in Federal expenditures within a fiscal year, requires a Single Audit

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• 200.508 Auditee Responsibilities:

Prepare Financial Statements –SEFA

(Schedule of Expenditures of Federal Awards)

• 200.509 Auditor Selection

Procure an Auditor to complete the audit

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• 200.511 Audit findings follow up / corrective action plan

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Audit Requirements �2 CFR §§200.521 pgs. 176-177

• 200.521 Management Decision Letter (MDL)

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• In the Audit: If there is a finding with question cost(s), the SD/SU/Not for Profit will receive a MDL from the VT Agency of Education (Primary Pass Through Agency)

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• The VTAOE will determine if the questioned costs in the amount of $$$ are disallowed.  If so, the SD/SU/NFP must recode this amount to a non-federal source of funds.  The SD/SU/NFP must submit evidence of the recoding by submitting accounting record printouts of the entry to the VTAOE.  The VTAOE will send an invoice for the SD/SU/NFP to remit payment.

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• APPEAL: The auditee may make a written appeal to The Agency of Education Chief Financial Officer. The appeal must be received no later than 30 days from the date of this letter.

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The Schedule Expenditures of Federal Awards What to Include?

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• What type of Federal Grants are included in the SEFA?
• Direct Federal Awards
• LEAs may receive grants directly from a Federal Agency such as:
• U.S. Department of Energy
• U.S. Department of Health and Human Services
• U.S. Department of Education
• Pass-Through Federal Awards
• These are the grants that are passed to the LEA from a VT State Agency such as:
• Vermont Agency of Education
• Vermont Agency of Health and Human Services
• Department of VT Agriculture passed through by VT Agency of Education

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The Schedule of Expenditures of Federal Awards What to Include?

• Federal Awarding Agency and Pass-through Agency/Departments are required to notify you that these funds are subject to the single audit.
• If funds are subject to the single audit, Fiscal Year expenditures for those awards must be included in the SEFA.
• Look in Assurances Section of your awards:
• Single Audit
• 2 CFR §200 Subpart F
• 2 CFR Part 200
• For Federal awards from AOE it is included in Attachment C

The Schedule Expenditures of Federal Awards Sample Template

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• Sample template of a completed SEFA
• The following link will bring you to a blank SEFA if you do not have a template yet.
• SEFA Template

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Single Audit

• Due to VT AOE by March 31^st each year

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• Auditor must upload final audit to the Federal Audit Clearinghouse (FAC) 2 CFR 200.§512(b)

https://harvester.census.gov/facdissem/SearchA133.aspx

• Send single audit notification to the AOE at:

AOE.FinancialReports@vermont.gov

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Financial Statement audits should be emailed as PDFs to the above address.

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Subgranting info

Subgrant Document

• VT SUs may only subgrant funds passed through the VTAOE to its member districts. – Does not apply to SDs
• Grant is received at the SU level, but obligations are incurred at a district level – most commonly (but not exclusively) for salary and benefits
• Requires an official subgrant agreement document
• Subgrant agreement must include a scope of work and information per 2 CFR §200.332 + all assurances of original award
• Must be signed by the Superintendent and Principal
• In addition to the SU, the district is now also responsible for meeting all the requirements of a federal grant including:
• Financial management
• Internal controls
• Procurement
• Expenditure Documentation – including time and effort
• Contract Administration
• Controlled and documented reimbursement request
• Etc.
• If an SU subgrants grant funds to a member district, the SU must reimburse the district prior to claiming these expenses on an AOE 3.0.

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Emergency (COVID-19) Funds

So Many New Federal Programs….

• ESSER I
• ESSER II
• ARP-ESSER
• GEER
• IAQ (EVT)
• ARP-IDEA
• ARP-Homeless
• Vaccination Incentive Program
• Etc, Etc.

ESSER Trio�ESSER I, ESSER II, and ARP-ESSER

• One-Time Funding's with broad uses: LEAs should treat the funds as non-recurring, emergency aid and avoid building in programmatic costs that may not be sustainable after the period of performance ends.
• Investments must Prepare, Prevent, or Respond to COVID-19
• Distinct funding sources with different periods of performance
• No Supplement not Supplant requirement
• Use unrestricted Indirect Rate

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ESSER I, ESSER II

• ESSER I (CARES) $ 28,033,524
• Period of Performance 3/13/2020 – 9/30/2022
• Equitable Services
• Previous Uniform Guidance applies
• Application is open
• ESSER II (CRRSA) $114,276,027
• Period of Performance 3/13/2020 – 9/30/2023
• No Equitable Services
• New Uniform Guidance applies
• Application is open

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ARP-ESSER

• ARP-ESSER (ARP) $256,647,600
• Period of Performance 3/13/2020 – 9/30/2024
• No Equitable Services
• Stakeholder Engagement
• LEA Plan
• LEA must reserve at least 20% of funds to address learning loss through the implementation of evidence-based interventions and ensure that those interventions respond to students’ social, emotional, and academic needs and address the disproportionate impact of COVID-19 on underrepresented student subgroups
• New: Maintenance of Equity
• Application is not yet open

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Need Help - Stay Up-to-Date

• AOE Coffee & Conversation = Wednesdays 9-10: AOE hosts weekly conversations with the Field to review current questions, relay new information, identify best practices, etc.
• If you are not receiving the email invitations please email: Patrick.Halladay@vermont.gov

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Prior Approvals

Equipment / Construction

“Equipment” / Construction�Prior Approval

• UG requires LEAs receive “prior approval” from the VT AOE when using Federal grant funds to purchase “Equipment” or construction.
• AOE process for prior approval for both is administered through the GMS system
• Equipment is a single step process
• Construction is a two-step approval process
• Concept Approval
• Project Approval = Final prior approval

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Sole Source Letters for Federal Procurement

State Bid Waivers

Non-Competitive Federal Procurement�Request for Sole-Source Determination

• Full Federal Procurement: 2 CFR §200.318-327
• LEA may request a non-competitive / sole source determination from the AOE for purchases involving Federal funds
• Request is a Cognito Form: https://www.cognitoforms.com/VermontAgencyOfEducation/aoenoncompetitiveprocurementrequestwithfederalfunds

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Vermont State Bid Law / Waivers

Vermont Bid Law�Waiver Request

• Full Bid Law found at 16 V.S.A. §559
• If an LEA is unable to comply with the Vermont Bid law it may request a waiver from the Secretary of Education.
• Bid Waiver request is a Cognito Form: https://www.cognitoforms.com/VermontAgencyOfEducation/AOEBidWaiverRequestForm

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Emergency School Construction Aid

Emergency School Construction Aid�

• Title 16, V.S.A. §3448 (d) Emergency aid. Notwithstanding any other provision of this section, the Secretary may grant aid pursuant to subdivision (a)(7) of this section for a project the Secretary deems to be an emergency, up to a maximum total project cost of $100,000.00.

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• Subdivision (a)(7): Except as provided in other subdivisions of this subdivision (7) and elsewhere in law, the amount of an award shall be 30 percent of the approved cost of the project

Emergency School Construction Aid�

1. Emergency construction aid is
1. reserved for projects that are both unanticipated and result in a safety concern for occupants.
2. limited to 30% of actual costs up to a maximum eligible project cost of $100,000. 
3. applied to eligible project costs after insurance claims and other sources of assistance.
4. paid on a first come / first serve based on the completion of a financial audit.
5. not for deferred maintenance.
2. It is not necessary for a School District to receive approval prior to starting construction. 
3. The bid law (Title 16, V.S.A. §559) does not apply to emergency situations.

VT AOE Emergency Construction Aid Application

Need Help

If you have questions on emergency construction aid program including eligibility and application requirements?

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Call AOE Regulatory Compliance Team

Bob Coathup: Robert.Coathup@vermont.gov

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State Excess Spending Approvals / Construction

Uniform Grants Guidance

Available on the Electronic Code of Federal Regulations website:

• https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200

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• Also available for purchase through Brustein and Manasevit: 5^th Edition with purple cover is current

AOE COVID Guidance�

COVID Guidance on AOE website

https://education.vermont.gov/news/covid-19-guidance-vermont-schools/covid-19-federal-emergency-funds

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Questions?