1. Preston Alderman MSDE, Director of Audit

2.  As recipients of federal and state funds we are charged with ensuring that the funds are adequately accounted for and spend in accordance with the grant assurances.  Receipt of those funds also subjects the recipient to being monitored and audited regarding the use of the funds.

3. Monitoring tools must be consistent with the following;  Grant assurances  Federal (OMB) regulations/policies (including testing of expenditures)  State regulation/policies  Agency policies

4.  EDGAR (Education Department General Administrative Regulations)has been updated.  Cost, administrative & auditing rules are located in 2 CFR Part 200  The effective date of the changes are;  December 26, 2014 –Direct Grants from ED  July 1, 2015 – State Administered Programs  July 1, 2016 – Procurement Rules

5.  Focus on outcomes  Performance metrics  Risk assessments  Financial management  Audit thresholds  Major emphasis on strengthening accountability by improving policies that protect against waste, fraud and abuse

6.  Review the criteria for determining allowable costs:  Part 76 State Administered Programs  Governmental units assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award.  Reasonable costs

7.  Review 2 CFR Part 200 Subpart D – Post Award Requirements  Purpose of financial and program management  Standards for financial management systems  Purpose of reports and records  Monitoring and reporting program performance

8.  Review 2 CFR Part 200 Subpart D – Post Award Requirements  Termination  If a recipient materially fails to comply with the terms and conditions of the award

9.  Review 2 CFR Part 200 Subpart D – Post Award Requirements  Enforcement  Temporarily withhold payment pending correction of deficiency  Disallow all or part of the cost of the non compliant activity  Wholly or partly suspend or terminate the award

10.  Review 2 CFR Part 200 Subpart E  55 specific costs detailed  Listed in alphabetical order 10

11.  Necessary, reasonable & allocable  Conform with federal law & grant terms  Consistent with state && local policies  Consistently treated  In accordance with GAAP  Not included as match  Adequately documented

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13.  COMMON PROBLEMS  Controlling allowable costs  Clear record trail  Cash management 13

14.  Identification of Awards (new)  Financial Reporting  Accounting Records  Internal Control  Budget Control  Written Cash Management Procedures (new)  Written Allowability Procedures (new) 14

15.  Accurate, current and complete disclosure of financial information  All financial reports required by ED, must be submitted no less than annually, no more than quarterly.  Non federal entities must submit performance reports at intervals by federal agency or pass through.  Performance metrics must be included. 15

16.  Must identify source and application of funds (expenditure level detail):  Award amount  Authorizations  Obligations  Unobligated balances  Assets  Liabilities  Expenditures  Income 16

17.  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 agency operations 17