1. Presentation by Gloria Venable Perkins New Coordinator Training September 9, 2010 FINANCIAL MANAGEMENT

2. Pervasive Fiscal Issues Expenditures not allowable $ paid but not benefitting that intended by Perkins Legislation Perkins supports CTE programs $ intended for program improvement Ask question: How will expenditure improve performance indicators PARS not legally compliant Improper inventory controls

3. BUDGET CATEGORIES Employee Salaries and Benefits Equipment and Supplies Purchased Services & Professional Development

4. BUDGET DETAIL Employee Salaries & Benefits Salaries Benefits Extra Help Equipment & Supplies Capital & Inventorial Purchases Supplies (non-inventorial) Instructional Materials Other Equipment/Supplies

5. Budget Detail Professional Services & Professional Development Travel and Conferences Other Services

6. FINANCIAL CAUTIONS.... Pervasive Fiscal Issues Improper internal controls or management systems Fraud schemes Supplanting

7. Documentation “If you take the $, then you must provide the documentation!” Students logs, Sign in sheets PARS Inventory records Reimbursement backup documents Professional Development logs Back up file Agendas relating to core indicator improvement on campus workshops agendas, sign in sheets

8. Source Documentation 8 Types of documents: Canceled checks (or similar bank record) Bills, Invoices, Contracts Payrolls Time and attendance records Contract and sub-award documents Electronic copies ok Must retain for at least 3 5 years (Statute of Limitations = 5years)

9. Internal Controls 9 Goal: Assess the quality of internal controls over time and ensure any findings are promptly resolved. Ongoing program and fiscal monitoring Regular oversight by supervisors Record reconciliation Formal program reviews / audits OMB Circular A-133 audits Include policies and procedures for correcting any findings in a timely manner.

10. 10 Internal controls are tools to help program and financial managers achieve results and safeguard the integrity of their programs Includes processes for planning, organizing, directing, controlling, and reporting on operations Internal Controls

11. 11 Effectiveness and efficiency of operations Reliability of financial reporting Compliance with applicable laws and regulations Safeguarding assets Objectives of Internal Controls

12. Perkins Issues $ spent are to benefit CTE Programs Activities, Equipment Professional Development involving travel Record expenditures on Professional Development Log Keep backup document file by program year (agenda, purpose of meeting) If benefitting academic programs must be for purpose of integrating academic instruction into CTE Include narrative to show how travel benefits CTE students/programs Proration of expenses may be appropriate

13. Professional Development Cautions Not a travel fund, nor a reward for a good job fund $ spent should to relate to improvement of a core indicator Institution/Program policy on PD may include specific requirements to be met by participant Commitments for teaching/sharing Commitments for revision of curriculum Commitments for related tasks If no policy in place, perhaps the institution team would develop one to maximize use of funds.

14. Travel Don’t pay from statements—have invoices If paid to Visa, documentation should be the actual invoices or other evidence of expenditure i.e. hotel bill, restaurant receipt, etc. Be prepared for auditing of travel

15. TIME DISTRIBUTION RECORD 15 PARS: After-the-fact record Total activity for which employee compensated At least monthly * Signed and dated by employee

16. 16 PAR CONFIRMATION SIGNATURE Confirmation must be done by “responsible person with suitable means of verification” Time Card are not acceptable as PARS

17. Inventory Management 17 Must have inventory management system Property records Description, serial number or other ID, title info, acquisition date, cost, percent of federal participation, location, use and condition, and ultimate disposition Physical inventory and reconciliation of records Required EVERY TWO YEARS Control system to prevent loss, damage, theft All incident must be investigated Districts are responsible for lost / stolen property

18. Inventory Management 18 Title vests in the grantee Must protect against unauthorized use May use for other projects as long as no interference with intended use Incidental Benefit Must ensure adequate maintenance

19. Supplies 19 Supplies = Everything Else EDGAR does not set out any specific tracking requirements But, as a practical matter, ED expects sub grantees to track all property purchased with federal funds in order to prove there has been an allocable benefit to the federal program

20. Supplanting 20 Supplanting is determined on a case by case basis and is fact specific Federal Funds Cannot Displace State and Local Funds!! Section 311(a) – Perkins

21. 21 Test #1Was the activity paid for in the prior year with non-federal funds? Test #2Was the activity required by state/local law or policy? Supplanting

22. Fiscal Updates Admin 0P1- Cost for managing grant, reporting to state Expenditures must show value to grant Document all expenditures Or, use a federal indirect cost rate letter to document Grant Administration is 5% of the grant amount

23. FEDERAL INDIRECT COST RATE LETTER Issued by Department of Health and Human Services Must be up to date Copy submitted for state file No further documentation of admin required

24. Compliance Site Visits September through April Increased technical assistance Emphasis on systems and internal controls Emphasis on success of activities in previous year Going forward will review improvement plan progress

25. Institutions selected based on risk factors institution to show that systems are in place to safeguard funds and equipment Institution to demonstrate properly documented expenditures Show that activities are carried out as approved Show efforts are directed to student achievement Supplemental Monitoring

26. No Fed monitoring findings at Post Secondary level OVAE required Arkansas to develop a Risk analysis system Based on point system Staff Identifies sites at most risk Review financial operations, point out problems, identify inappropriate practices If expenditures unallowable, institution must pay back $

27. WEIGHTED BY RISK FACTORS INSTITUTION Grant size % salaries, C/P year Coordinator tenure % funds unused previous year Financial Report after Aug 1 Annual Plan by 5/31 Frequency #Amendments Quarterly req. Reimbursement OTHER 09-10 site visit findings Equipment purchases Workshop attendance POS issues Other

28. Other: Site visit findings Equipment Purchases Programs of Study Special populations reporting Other factors as identified Pattern of Inappropriate expenditures Lack of response or cooperation in solving identified areas of concern Risk Management Assessment

29. Improvement Plans Number of Indicators Deficient Success of previous year’s activities Likely to replace compliance site visits Staff elected intensive work with institutions to put systems in place Noncompliance issues will be regarded as findings Risk Management Assessment Going Forward

30. SUPPLEMENTAL MONITORING All Institutions are subject to supplemental monitoring during Perkins IV Under consideration by state staff Combine supplemental monitoring with compliance site visit Incorporate ACE auditor into high risk institution monitoring visit Form to be used will be posted on web site Schedule to be published

31. A Pause