1. OMB or OMG ! TASBO Meeting November 13, 2014 Presented by Jayne Tavenner

2. 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”http://www.esc6.net/

3. 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

4. Moving towards Simplicity Consistency Obama Executive Order on Regulatory Review – Increase Efficiency – Strengthen Oversight

5. 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

6. 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

7. Accountability/Monitoring Currently Separate Financial Reporting – Independent Audits which are sent to TEA – Desk Top Audits by TEA – On-site Audits by TEA

8. 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)

9. Compliance Reporting Currently – PBMAS – Data Validations

10. AND NOW we will add... “NEW” – – Performance Metrics (But it is really not new)

11. Performance What data are you looking at?

12. 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? Are you meeting Goals & Objectives for Improvement?

13. YES... Campus and District Improvement Plans WILL be very IMPORTANT!

14. In Simple terms: What are your needs/ issues ? What do you plan to do ? What activities are you going to imple- ment ? What funds will be used ? What was the outcome ?

15. 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

16. However... By changing the date on your plans from year to year will not cut the mustard! Campus Improvement Plan 2012-2013 2014-2015

17. As of right now, it is not certain what the performance reports will look like.

18. How will these be aligned? Fiscal Monitoring Compliance Monitoring Performance Monitoring

19. FISCAL Issues

20. Components of Internal Control 1.Control Environment 2.Risk Assessment 3.Control Activities 4.Information and Communications 5.Monitoring

21. Crosswork Between Current Rule and Omni Circular 200.302(b) 34 CFR 80.20(b) 1.Financial Reporting 2.Accounting Records 3.Internal Control 4.Budget Control 5.Allowable Cost 6.Source Documentation 7.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?

22. Identification of Awards -- NOGA

23. 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)

24. Job descriptions Do you have the percent of time in each program? Do you have the duties for each program clearly stated?

25. 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

26. 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?

27. 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

28. 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?

29. Information & Communications Does personnel: receive training on procedures? receive relevant & timely information? understand the procedures? take seriously control responsibilities?

30. 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?

31. General Fiscal Issues All costs must be: 1.Necessary 2.Reasonable 3.Allocable

32. 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 ?

33. 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.

34. 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

35. 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

36. 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.

37. 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

38. Does it Match Up? Job Description Semi-annual certification Time and Effort/Time Distribution/PAR or

39. 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?

40. 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

41. 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”.

42. 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

43. 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?

44. 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?

45. 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.

46. 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

47. 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

48. 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”.

49. What ? s do you have?

50. Reminders and Updates November 17 th --HQ Campus Reports are due – Snapshot date of September 16, 2014 December 15 th ---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

51. 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

52. Grant Resources

54. 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 26 th. Happy Holidays! Jayne