OMB or OMG !
TASBO Meeting November 13, 2014
Presented by Jayne Tavenner
Information is sited from:
• Training from ESC 16
• Presented by Tiffany R. Winters of
Brustein and Manasevit
(11 lawyers that with Federal Guidance with USDE)
The entire presentation can be found on the
ESC 6 website at: http://www.esc6.net/ look for
the Administrator’s Corner and click on “All Admin.
Docs”
Things are changing . . .
Based on audit findings across states
• Some of the audit findings were:
– Lack of proper documentation**
– Parent involvement activities and paying for food
– Time and Effort**
– Lack of proper internal controls (Administrative
Procedures)**
– Hand held technology and Apps
– Fraud, waist and abuse
**Top Areas that are getting hit in audits
Moving towards
• Simplicity
• Consistency
• Obama Executive Order on Regulatory
Review
– Increase Efficiency
– Strengthen Oversight
What is Changing?
• OMB Circulars
– A-87—for public schools
– A total of 8 different circulars
• New Name
– Omni Circular
– Super Circular
–Uniform Grants Guidance
• 55 cost items
A-87 ?
Where do I find this?
• USDE website
• TEA website under
Grant Administration Resources
• eGrants Application
• Title I A Fiscal Training Tool Kit----Brande Bass
Accountability/Monitoring
Currently
• Separate Financial Reporting
–Independent Audits which are
sent to TEA
–Desk Top Audits by TEA
–On-site Audits by TEA
Just a little food for thought
• Just because you get a “Clean Audit” from
your independent auditor DOES NOT mean
you are in COMPLIANCE.
(audits are subjective – meaning auditors
couldn’t make a determination as to whether a
cost was allowable or not)
Compliance Reporting
• Currently
–PBMAS
–Data Validations
AND NOW we will add . . .
• “NEW” –
– Performance Metrics
(But it is really not new)
Performance
• What data are you looking at?
Are you meeting Goals & Objectives
for Improvement?
• Do you have a Comprehensive Needs
Assessment?
• Have you set Goals and yearly Objectives?
• Do you have Developed Activities to meet
objectives?
• Are funds designated for activities?
• Evaluation – Did you meet your objectives?
HAVE YOU SEEN THIS BEFORE?
YES . . .
Campus and District Improvement Plans
WILL be very IMPORTANT!
In Simple terms:
What are What do
What
What
What
your
you plan activities funds will was the
needs/
to do
are you be used outcome
issues
?
going to
?
?
?
implement
?
Per TEA for this Year (2014-2015)
• NEW –Campus plans and district plans will
need to include dollar amounts for Title I A.
• Other Programs:
– Funding source: CTE, GT, Special Ed., etc
• SCE
– Dollar amounts
– Personnel FTEs
However . . .
By changing the date on your plans from year to
year will not cut the mustard!
As of right now, it is not certain what
the performance reports will look
like.
How will these be aligned?
• Fiscal Monitoring
• Compliance Monitoring
• Performance Monitoring
FISCAL Issues
Components of Internal Control
1.
2.
3.
4.
5.
Control Environment
Risk Assessment
Control Activities
Information and Communications
Monitoring
Crosswork Between Current Rule and
Omni Circular 200.302(b)
34 CFR 80.20(b)
1.
2.
3.
4.
5.
6.
7.
Financial Reporting
Accounting Records
Internal Control
Budget Control
Allowable Cost
Source Documentation
Cash Management
2 CFR 200.302 (b)
1. Identification of Awards (NEW)-Not for
Texas
2. Financial Reporting
3. Accounting Records (Source Docs)
4. Internal Control
5. Budget Control
6. Written Cash Management Procedures
(NEW)
7. Written Allowability Procedures (NEW)
(How do you determine if it’s allowable? If split
funded how do you determine the amount of
time usage by program?
Identification of Awards -- NOGA
Control Environment
What’s needed:
• Clearly defined organizational structure
• Clearly defined job descriptions
– Clearly defined supervisory and employee roles
– Reviewed, signed and dated each year
• Well written policies and procedures (dated)
Job descriptions
• Do you have the percent of time in each
program?
• Do you have the duties for each program
clearly stated?
Risk Assessment
We are all at-risk for noncompliance.
•
•
•
•
Risks increase as laws and regulations change
Risks increase as personnel changes
Risk increases when there is rapid growth
Risk increases with new technology
Risk Assessment
Things to consider:
• Do you have “checks” and “balances” in place?
– Who is asking the important questions?
• Do you “test” your internal controls?
• Do you monitor compliance not only for
program activities but also for fiscal?
Risk Assessment in 2014-2015
• TEA conducted risk assessments on districts
this year before approving your NCLB grants.
– Looked at the “FIRST” rating
– Looked at independent audit report
– Looked a past history with your grants
• Excessive carry over
• Audit issues with data validations or desk audits
Control Activities
• Procedures Manuals
– How does this align to State, Federal and Local
guidelines?
– What are your “checks and balances”?
– How do you do day to day business?
– How do you test and evaluate your procedures?
Information & Communications
Does personnel:
• receive training on procedures?
• receive relevant & timely information?
• understand the procedures?
• take seriously control responsibilities?
Monitoring
• Are you conducting internal audits?
• Are you conducting program reviews?
– Are you being effective and showing improvement?
• Are you testing/evaluating your policies and
procedures?
• Who is checking the fiscal budgets on a regular basis?
• Who is checking to see if procurement processes are
being followed?
• Who is monitoring whether there is carry over or over
spending?
General Fiscal Issues
All costs must be:
1. Necessary
2. Reasonable
3. Allocable
General Fiscal Issues
• Necessary:
– Do I really need this to carry out the grant
guidelines?
– Is there another way to do this without the
purchase?
• Reasonable:
– Did you pay the best/fair price?
– Did you follow your procurement process?
General Fiscal Issues
• Allocable:
Example:
–Purchase a computer to use 50% on
the grant and 50% on a state program;
then you could only charge 50% to the
grant not 100% of the cost to the grant.
General Fiscal Issues
• NEW—Required Certification
• Certifying on fiscal reports or vouchers
requesting payment
“I certify the report is true, complete &
accurate, meet the objectives set forth in the
terms and conditions of the federal award.”
– Could set yourself up for criminal civil or
administrative penalties for fraud and false claims
General Fiscal Issues
• You could be liable for 3 times the amount of
the award.
• If OIG comes a calling---(Office of the
Inspector General)
– Investigate fraud
• If the FBI comes a calling--– Get a good lawyer
General Fiscal Issues
• Travel:
– Must follow written travel reimbursement
procedures
– Travel must be reasonable
– Remember reimbursement is “after the fact”
Out of the TEA travel regulations:
• Travel allowances, in which the per diem is
paid to the employee regardless of the
amount actually expended, are not allowable.
General Fiscal Issues
• Personnel Documentation—FEDERAL Issue
– Semi-annual certification (paid 100% out of grant)
• Signed every 6 months
– Time and Effort Reporting (paid partially out of
grant—split funded)
• NEW Name---Time Distribution Record
– TEA is using the wording of “Personnel Activity Report” (PAR)
• Completed monthly
Does it Match Up?
Semi-annual
certification
Job Description
or
Time and Effort/Time
Distribution/PAR
Here is a real live example:
• Grant applications stated employee is paid out
of 224 and 211 budgets
• Time and effort report stated the employee
was working in 211, 224, 199, 255
and
• Payroll records showed 224, 199, 211
Do you see a problem?
General Fiscal Issues
• Personnel Documentation (cont.)
– Reports are completed “after the fact”
– Should be signed by the employee and the employee
supervisor and dated
– Substitute System
• Designed for teachers who have a set
schedule
• Must apply and be approved to do this
General Fiscal Issues
• Procurement Standards
– Must have documented procurement procedures
which reflect applicable Federal, State, and local
laws and regulations.
– Conduct a “cost/price analysis” for costs in excess
of the simplified acquisition threshold of $150,000
– Acquisition of costs $3,000 and less may be
awarded without soliciting quotes—however
recommend that you use the “2 quote test”.
General Fiscal Issues
• “Sole Source”
– Gives a “Red Flag”
– Do your homework
– Use only as a last resort
• Contractors/Vendors
– Use responsible contractors/vendors
– Cannot contract with someone who has been
suspended or debarred
General Fiscal Issues
• Contractors/Vendors (cont.)
– Who maintains oversight to ensure contractors
performed in accordance with the terms of the
contract?
– Who is checking and signing off on invoices before
paying?
– NEW
• Do you have a procedure on how to handle conflict of
interest?
Property Management
• What controls are in place for accounting of
property?
• How is property secured?
• Where is property located?
– If you can’t find it then you probably didn’t need
it!
• NEW---Computing/Hand held devices
– Lots of dollars are being spent in this area, but
what controls do you have in place?
Property Management
• Do you complete an “annual” inventory?
• NEW: When acquiring replacement
equipment, the equipment to be replaced
may be used as a “trade-in” without recourse
to federal agency.
Federal Audit Requirements
• Current threshold is $500,000
– Example: Title I A receives the A-133 Audit
• NEW-Moving to increased threshold of
$750,000
• An auditor must report:
– Significant deficiencies & weaknesses in internal
controls
– Significant instances of abuse
– Known questioned costs > $25,000
December 26, 2014
• The date when the “NEW” Uniform Grant
Guidance is suppose to begin.
• Watch to see if we have a “final” guidance
Or
• “Interim guidance” where guidance can be
tweaked all along the way till it is finalized
What about current grants?
• Most likely current grants will continue under
current OMB (A-87) and will change with the
new grant period.
• Most grants won’t change until July.
• Carry over will apply to the “new rules”.
What
?s do you have?
Reminders and Updates
• November 17th--HQ Campus Reports are due
– Snapshot date of September 16, 2014
• December 15th---Non-HQ Status Corrective
Actions and Public HQ Report are due
• December 2, 2015---SC9000—Annual Survey
of Children in Local Residential Facilities for
Neglected/Delinquent
Reminders and Updates
• December--(Date has not come out)
Comparability Reports
– Every district completes the Assurance Document
– Districts with more than one campus with overlapping
grade spans complete the spreadsheet report
December—Revised NOGAs with revised planning
amounts, reallocations, and carry over. Be sure to
amend your general ledger/budget to include the
changes in money amounts.
• February—when Maximum Entitlements come
out
Grant Resources
Grant Resources
Just Remember . . .
• Everything you heard today could change by
the time you leave this session.
• So, we will wait and see . . . To be continued
after December 26th.
Happy Holidays!
Jayne