Texas Education Agency. Division of Federal Fiscal Monitoring

Transcription

1 Texas Education Agency Division of Federal Fiscal Monitoring The DO s and DON Ts of Administering Federal Grants Copyright 2016 by TEA

2 DO s and DON'Ts of Administering Federal Grants Division of Federal Fiscal Monitoring Flexibility Risk Assessment Policies and Procedures Purchasing Topics Shared Service Agreements Internal Controls Grant Budget Period of Performance Time Distribution Records Copyright 2016 by TEA 2

3 DO s and DON'Ts of Administering Federal Grants Record Retention Property Standards Professional and Contracted Services Technology Devices Supplies and Materials Questions and Answers Additional References: Methods of Procurement Copyright 2016 by TEA 3

4 Division of Federal Fiscal Monitoring (FFM) Roger Hingorani Acting Director Division of Federal Fiscal Monitoring Texas Education Agency (512) Copyright 2016 by TEA 4

5 Division of Federal Fiscal Monitoring (FFM) Grant Review Unit (GRU) Conducts monitoring activities, including desk and onsite reviews, as part of TEA s annual risk assessment and management referral system of discretionary and formula grants awarded districts, charter schools, regional education service centers and non-profit entities. Conducts reviews of annual financial and compliance reports (AFR), including the single-audit report for compliance with federal single-audit requirements; and oissues management decisions letters related to audit findings pertaining to any federal awards passed through TEA. Copyright 2016 by TEA 5

6 Division of Federal Fiscal Monitoring (FFM) Monitoring Review Unit (MRU) Conducts monitoring activities, including desk reviews of LEAs, as part of the TEA s annual risk assessment Monitoring for special conditions imposed on discretionary and formula grants awarded to school districts, charter schools, regional education service centers and other entities. Copyright 2016 by TEA 6

7 Federal Flexibility Applied to Subrecipient Monitoring Conducted during the current fiscal year. Allows staff to work with subrecipients to resolve findings and/or adjust questioned costs by: o Submitting adequate supporting documentation o Amending budgets o Reclassifying unallowable costs to other funding sources and replacing costs with other allowable expenditures. o Reducing draw-down of funds in the amount of unallowed costs. Copyright 2016 by TEA 7

8 Division of Federal Fiscal Monitoring (FFM) Grant Review Unit (GRU) Conducted 57 Desk and Onsite Reviews: 49 of those reviewed had FINDINGS 41 had FINDINGS WITH QUESTIONED COSTS $1,185, of TOTAL QUESTIONED COSTS found $1,027, in QUESTIONED COST resolved through CORRECTIVE ACTIONS taken Copyright 2016 by TEA 8

9 Division of Federal Fiscal Monitoring (FFM) Monitoring Review Unit (MRU) 36 Desk reviews conducted 16 Review of High-Risk Subrecipients with Special Conditions Copyright 2016 by TEA 9

10 Risk Assessment Pass-through entity must evaluate each organization s risk of non-compliance (federal statute / regulations / terms of award) to determine appropriate monitoring. ( (b)). Risk Factors, may include consideration of: o Subrecipient s prior experience with the grant program o Results of previous audits o New personnel or substantially changed systems o Results of federal monitoring Copyright 2016 by TEA 10

11 Risk Assessment Criteria Used in the Risk Assessment for are published on TEA s website riskassessment/ FFM is in the process of completing its annual risk assessment of all subrecipients that will be receiving grants in fiscal year Based upon the outcome of the risk assessment, subrecipients will be assigned a risk level of low, medium, or high. Each subrecipient will be able to access its risk assessment level by accessing GFFC Reports and Data Collections Secure application where it will find a letter indicating risk level of your organization. Copyright 2016 by TEA 11

12 Affect of Different Risk Levels Differentiated Grant Negotiation. TEA uses a differentiated grant negotiation process for federal grant applications. Organizations with a medium or high risk level are subject to a more stringent grant negotiation review than those with a low risk level. Subrecipient Monitoring. Each year, TEA selects subrecipients for fiscal monitoring according to their risk levels. The higher your organization s risk level, the more likely your are to be selected for monitoring Copyright 2016 by TEA 12

13 Policies & Procedures DO develop local policies and procedures Make policies broad and procedures more detailed. DON T use generic policies that do not accurately state what your district or charter school does locally. New EDGAR s emphasis on internal controls will likely result in a finding by auditors/monitors. Procedures that are locally developed to ensure compliance with federal statutes, regulations, terms of and performance goals. Copyright 2016 by TEA 13

14 Policies & Procedures DO formally adopt the policies and procedures signed by organization s governing body (board of trustees) and/or its chief administrative officer. DO assign the date the policies and procedures were approved. DON T implement policies and procedures that are not approved. Copyright 2016 by TEA 14

15 Policies & Procedures DO establish procedures and internal controls for complying with: Financial Management Standards ( ) ofasrg-15 digit account codes oaccurate, Current, Complete Accounting Records Internal Controls ( ) Cash Management ( ) For all non-federal entities payments must minimize time elapsing between transfer of funds (draw-downs) and disbursement. Copyright 2016 by TEA 15

16 Policies & Procedures DO establish procedures and internal controls to comply with new procurement standards: Claiming Extension ( ) odo include a written statement claiming an extension to implement policies and procedures that comply with procurement standards given in 2 CFR Procurement standards ( ) odo include procurement policies and procedures that conform to applicable state, local, and federal laws and standards. ( ) odo include policies and procedures to maintain oversight to ensure that the organization s contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. ( )(3) Copyright 2016 by TEA 16

17 General Procurement Standards( ) All nonfederal entities must have documented procurement procedures which reflect applicable Federal, State and local laws and regulations, provided that the procurement conform to applicable federal laws and standards noted in Copyright 2016 by TEA 17

18 Policies & Procedures DO establish procedures and internal controls to comply with new procurement standards: DO include policies and procedures to ensure that the organization follows the methods of procurement described in new EDGAR (2 CFR ) o Micro-purchase procedures o Small purchase procedures o Competitive sealed bids procedures o Competitive proposals o Noncompetitive proposals Copyright 2016 by TEA 18

19 Policies & Procedures DO establish procedures and internal controls to comply with new time and effort requirements: o DO include specific procedures describing your organization s standards for documenting charges to federal awards for salaries and wages based on records that accurately reflect the work performed. o DO include specific procedures that require that records of personnel expenses reasonably reflect the total activity for which the employee is compensated by your organization, not exceeding 100 percent of compensated activities. o DO include specific forms staff is required to use to document their time and effort. o DO include specific procedures describing duration when specific forms must be completed by staff. Copyright 2016 by TEA 19

20 Policies & Procedures DO establish procedures and internal controls for complying with: Property standards ( ) o DO consider implementing a policy for safeguarding technology devices. o DO implement internal controls to provide assurance that property purchased with federal grant funds are solely used for authorized purposes. Travel ( ) odo include a specific administrative policy that defines the reasonable and allowable costs to be reimbursed by the organization for travel. odo include a specific administrative procedure that describes the organization s travel authorization and travel reimbursement process. Copyright 2016 by TEA 20

21 Policies & Procedures DO establish procedures and internal controls for determining allowability of costs in accordance with Subpart E Cost Principals. All costs must be: Necessary, Reasonable, and Allocable Conform with federal law and grant terms Consistent with state and local policies Consistently treated In accordance with GAAP Not included as match Net of applicable credits Adequately documented If its not in your plan, it is not allowable-necessary for the performance or administration of the grant Copyright 2016 by TEA 21

22 Provide Training on Policies & Procedures DON T just develop and/or update policies and procedures. DO provide training for professional and support staff including: Business Office Staff Central Administrative Staff Campus Staff Department Staff DO ensure that personnel receive relevant, reliable and timely information that enables them to carry out their responsibilities. Copyright 2016 by TEA 22

23 Common Observations on Policies & Procedures Most common finding/observation is that policies and procedures either: a) Don t exist b) Are outdated c) Or are not being implemented Copyright 2016 by TEA 23

24 Purchasing from Purchasing Cooperatives When purchasing items from existing state and local Purchasing Cooperatives... DO enter into a enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services in order to foster greater economy and efficiency. DO verify that the purchasing cooperative has followed the most restrictive of the state or federal procurement rules. DON T buy from purchasing cooperatives that do not meet these conditions to avoid questioned cost for entire purchase. Copyright 2016 by TEA 24

25 Purchasing from Sole Source Vendors When purchasing items from through solicitation of a proposal from only one source (Non Competitive)... DO maintain supporting documentation for one of the following: 1. Document that the item is available only from a single source. 2. Document that there is a public exigency or emergency for the requirement that will not permit a delay resulting from competitive solicitation. 3. Document that the federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-federal entity. 4. Keep records showing that after solicitation of a number of sources, competition is determined inadequate. Copyright 2016 by TEA 25

26 Shared Service Agreements DO maintain current inter-local agreements between fiscal agent and member districts DO ensure that inter-local agreements clearly identify roles and responsibilities of fiscal agent and member district DO monitor expenditures of grant funds by member districts. DON T give money to member districts without adequate oversite. Copyright 2016 by TEA 26

27 Internal Controls Requirements ( ) The non-federal entity must: a. Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. b. Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. c. Evaluate and monitor the non-federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. d. Take prompt action when instances of noncompliance are identified including in audit findings. e. Take reasonable measures to safeguard protected personally identifiable information and other information designated or deemed sensitive. Copyright 2016 by TEA 27

28 Internal Controls Requirements ( ) DO implement internal control procedures for accounting Separation of Duties Access Controls Physical Audits Documentation Reconciliation Approval Authority Copyright 2016 by TEA 28

29 Grant Budget Work-papers Grant Budget ( ) DON T throw them away keep all supporting documentation regarding discussions, meetings regarding district and campus improvement plans. DO maintain adequate documentation regarding special individualized education needs/plans Set Aside Requirements-DO include specific amounts as appropriations in your financial records if approved in the grant application DO verify class object code budgeted before expending in any given cost category. DO verify positions approved in budget. DO maintain evidence of funding for each campus. Any funding formulas regarding the distribution of local, state, and federal funds. Copyright 2016 by TEA 29

30 Period of Performance-Obligations Period of Performance ( ) DO consider when an obligation of federal funds occurs. What affect will this have on whether my expense is allowable under federal period of performance standards. oobligation-promise to pay oliquidation-performance of services/goods received odrawdown-reimbursement opayment-issuance of payment Obligation = transaction that requires payment Copyright 2016 by TEA 30

31 Period of Performance- When can I obligate federal grant funds? Grantees may begin to obligate funds when Awarding agency approves application Awarding agency determines the application is substantially approvable Expenditure Type Acquisition of Property Personal Services by Employee Personal Services by Contractor Travel Utility Services Rental or lease of property Date of Obligation Date of binding written commitment When services are performed Date of binding written commitment Actual dates of travel When the services are received. When the property is actually used or occupied. Copyright 2016 by TEA 31

32 Time Distribution Records ( ) Time & Effort DO use the TEA s substitute time and effort reporting for documenting payroll allocations for teachers, when applicable. DO consider applying for use of TEA s substitute time and effort reporting even if you don t know if you will be using it. Approximately LEAs have applied for approval to use this substitute system. DON T have employees sign their forms prior to the end of the period being certified. DO ensure that time distribution records account for 100% of the employee s time for which they are compensated and identify all funding sources/cost objectives from which they are paid. Copyright 2016 by TEA 32

33 Payroll Records ( ), ( ) DO update Employee Job Descriptions on an periodic basis. or whenever the job duties change. This allows for the opportunity to update any change in their roles and responsibilities. DO implement controls for documenting Supplemental Pay Agreements and timesheets for supporting extra-duty payments, e.g., tutoring services. DON T issue payroll checks prior to services being performed. Midmonth payroll for services provided during the whole month in which payments are made. Copyright 2016 by TEA 33

34 Record Retention Think twice before throwing anything away. DO consider: o Requesting copies of conference materials-evidence of attendance o Working lunches-agendas, evidence of cost analysis o Food-documentation of business related activity, demonstrating the purchase was reasonable and necessary for school business purposes. DO retain records for at least five years. DOverify student eligibility for participants. Copyright 2016 by TEA 34

35 Property Standards Must have adequate controls in place to account for: o Location of equipment o Custody of equipment o Security of Equipment Physical Inventory at least every two years Property records o Description, serial number or other ID, title info, acquisition date, costs, percent of federal participation, location, use and condition, and ultimate disposition Copyright 2016 by TEA 35

36 Property Standards-Shared Use Shared use is allowed if such use will not interfere: o 1 st preference projects supported by federal awarding agency o 2 nd preference project funded by other federal agencies o 3 rd preference - use for non federally funded programs Incidental benefit exists if three requirements are met: 1. the equipment is used less than 5% of time 2. the use does not take away the use by intended program 3. the use does not increase the depreciation value of the equipment Copyright 2016 by TEA 36

37 Professional and Contracted Services ( ) DO verify qualifications and credentials when outsourcing. Implement effective procedures for ensuring contract terms and conditions are documented and monitored for compliance. DON T pay employees as independent contractors in the same fiscal year. Copyright 2016 by TEA 37

38 Technology Devices ( ) DO implement procedures for monitoring the use by participants and staff including what software applications are on these devices. DON T maintain devices in a school closet and expect that it is safeguarded. TEA recommends all technology devices be considered as controllable assets in policy and procedures be implemented to track these units by some means. Copyright 2016 by TEA 38

39 Supplies and Materials ( ) DON T allow for stockpiling of supplies and materials. DO document every need. Make sure that all purchases align with a goal or objective included in the most current improvement plan or a need in a student s individual educational plan, as applicable. DO maintain appropriate documentation for demonstrating compliance with procurement standards, as applicable. Copyright 2016 by TEA 39

40 Questions? Copyright 2016 by TEA 40

41 Copyright Notice The materials are copyrighted and trademarked as the property of the Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA, except under the following conditions: 1. Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts and schools educational use without obtaining permission from TEA. 2. Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of TEA. 3. Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way. Copyright 2016 by TEA 41

42 Copyright Notice 4. No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts, Texas Education Service Centers, or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from TEA and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty. For information contact: Office of Copyrights, Trademarks, License Agreements, and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, TX ; phone or ; copyrights@tea.state.tx.us. Copyright 2016 by TEA 42

43 Methods of Procurements( (a)) Procurement By Micro-purchase Acquisition of supplies and services under the aggregate amount of $3,500 or less To the extent practicable must distribute micropurchases equitably among qualified suppliers May be awarded without soliciting competitive quotations if nonfederal entity considers the cost reasonable. Copyright 2016 by TEA 43

44 Methods of Procurements( (b)) Small Purchase Procedures Good or service that costs $150,000 or less (NEW: Simplified Acquisition Threshold was raised under ) Organization may set lower threshold Must obtain price or rate quotes from an adequate number of qualified sources Relatively simply and informal Copyright 2016 by TEA 44

45 Methods of Procurements( (c)) Sealed Bids for Over $150,000 Organization may set lower threshold to meet compliance with state or local requirements Bids are publically solicited. When following conditions are met o A complete, adequate and realistic specification or description of good or service is available; o Two or more responsible bidders are willing and able to compete effectively for the business. o Selection of vendor can be made principally based on price and it s a firm fixed price contract. Copyright 2016 by TEA 45

46 Methods of Procurements( (c)) (Cont.) Sealed bids must: oprovide sufficient time to submit bids; oinclude all specifications so bidder can properly respond; and obe publicly opened at time and place announced in invitation for bids Any and all bids may be rejected if there is a sound documented reason. Award is made to the lowest responsive and responsible bidder. Copyright 2016 by TEA 46

47 New EDGAR versus State Category Current Texas School Purchasing Uniform Guidance $1-$3,500 TEC no formal rules $3,001-$50,000 TEC no formal rules $50,000-$150,000 (except produce and fuel) $150, competitive bidding 2. competitive sealed proposals 3. request for proposal (rfp) 4. interlocal contract 5. request for qualifications (rfq) - no prices are bid 6. Reverse auction. 7. formation of political subdivision corporation TEC one of 7 methods listed above (a) micro purchase - reasonable cost (b) small purchase - price or quotes (adequate number of vendors) (b) small purchase - price or quotes (adequate number of vendors) (c) sealed bids or rfps or rfqs Copyright 2016 by TEA 47

48 Methods of Procurements( (c)) Competitive Proposals Over $150,000 Organization may set lower threshold to meet compliance with state or local requirements. Award contract to responsible vendor whose proposal is most advantageous to the program, considering price and other factors. Generally used when sealed bid is not appropriate. Copyright 2016 by TEA 48

49 Competitive Proposals( (d)) Request for proposal (RFP) must be publicized and identify all evaluation factors and their relative importance identified. Proposals must be solicited from an adequate number of sources. Must have method for evaluating proposals and selecting the vendor. Contracts must be awarded to the responsible vendor whose proposal is most advantageous to the program, considering price and other factors. Copyright 2016 by TEA 49

50 Noncompetitive Proposals( (f)) Only use when following: The item is only available from a single source; The public exigency or emergency for the requirement will not permit delay; The Federal awarding agency or pass-through expressly authorizes noncompetitive proposals in response to a written request from non-federal entity; or After soliciting a number of sources, competition is determined inadequate. Copyright 2016 by TEA 50