1. Title I Fiscal Responsibilities Presented by: New Jersey Department of Education Office of Student Achievement and Accountability Are You Fiscally Compliant?

2. What is Needed to be in Compliance & Where to Find It No Child Left Behind www.ed.gov/legislation/ESEA02/index.html OMB Circular A-87, Attachment B www.whitehouse.gov/omb/circulars/a087/a087_2004.pdf EDGAR http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html h Compliance Supplement (A-133) http://www.whitehouse.gov/omb/circulars_a133_compli ance_08_08toc/ttp://www.whitehouse.gov/omb/circulars_a133_compli ance_08_08toc/ General Education Provisions Act (GEPA): straylight.law.cornell.edu/uscode/html/uscode20/usc_sup_01_20_1 0_31.html straylight.law.cornell.edu/uscode/html/uscode20/usc_sup_01_20_1 0_31.html

3. Legal Structure and Requirements Statutes Program Regulations Program Guidance Letters/Press Releases EDGAR (Parts 76 & 80) OMB Circulars OMB A-133 Compliance Supplement Office of Inspector General

4. System Requirements for LEAs EDGAR §§ 80.20, 80.32, 80.36 Financial Management=80.20 7 Key components Financial Reporting (Ability to Report) Accounting Records Internal Controls Budget Controls Allowable Costs Source Documentation Cash Management

5. System Requirements for LEAs EDGAR §§ 80.20, 80.32, 80.36 Equipment=80.32 (more details later) Procurement=80.36 Open competition Cost/Price Analysis Vendor Selection Contract Administration

6. Board Minutes What should be in my Board minutes? Resolutions to: Apply for Funds (copy of budget statement) Accept the Fund (Grant Acceptance Certificate)

7. Board Minutes (continued) What should be in my Board minutes? Appointment of Teachers Name Salary School Funding Percentage for Each Program Appointment of Secretaries, Aides, Program Directors, etc. Name Salary Work Location Funding Percentage for Each Program

8. Final Expenditure Reports Must be consistent with budget (amendments filed through County Office) – EWEG Monitors CANNOT: Move more than 10% of total funds or $50,000, whichever is less, without State approval (filed through County Office) Add a budget category without State approval (filed through County Office) Carryover more than 15% of total amount received more than once every three years without State approval (Must have good reason)

9. Carryover of Funds (Set Asides) Some Carryover Funds are Restricted to the Original Intent and Purpose of the Funding **** Accounting Tracking Required **** Parental Involvement If these funds carried over, then can only be spent for original intent and purpose or must be refund to SEA Professional Development (SINI and DINI) If these funds carried over, then can only be spent for original intent and purpose or must be refund to SEA

10. Select Expenditures and Support Needed Fully-funded Salaries Periodic certification signed at least semi- annually Signed by employee and supervisor

11. Select Expenditures and Support Needed Split-funded Salaries Personnel activity reports Signed by employee and supervisor Must be an after-the-fact distribution of actual activity Prepared at least monthly and must coincide with pay periods

12. Select Expenditures and Support Needed General Purchases Must have purchase orders Must have account number on P.O. Should indicate Title I purchases Signed by Business Administrator If split P.O., Title I should be easily identifiable REMEMBER – Money spent in Individual Schools should EQUAL amount in Step 4 of Eligibility

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15. Select Expenditures and Support Needed Equipment Maintain master inventory listing Date, Serial Number, Model, Cost, Location Each school should maintain subsidiary listing All equipment should be labeled with Title I or equivalent tracking system Need to keep records for FIVE years past disposition (date needs to be on master list) Even if not equipment for GRANT purposes, if district has a lower threshold, then tracking of equipment is required

16. Select Expenditures and Support Needed Employee Benefits TPAF/FICA reimbursement applies only to teachers contracted salaries, supervisors and program directors TPAF/FICA reimbursement report does not apply to aides, secretaries or clerical, stipends, substitute teachers or summer teachers All other benefits based on actual cost, not budgeted percentages

17. Select Expenditures and Support Needed Employee Benefits – TPAF/FICA Reimbursement Report

18. Selected Items of Cost Special rules for specific expenses Still subject to basic guidelines Examples: Alcohol: Never allowable Salaries and Wages: Allowable if time distribution Meetings and conferences: Allowable if dissemination of technical information

19. Helpful Questions to Ask When Analyzing Costs Is the proposed cost consistent with federal cost principles? Is the proposed cost allowable under the relevant program? Is the proposed cost consistent with an approved program plan and budget? Is the proposed cost consistent with program specific fiscal rules? Is the proposed cost consistent with EDGAR?

20. Allowable Costs All Costs must be: Necessary Reasonable Allocable Legal under state and local law

21. Allowable Costs Must be necessary for the performance or administration of the grant Must follow sound business practices: Arms length bargaining (hint: procurement processes) Follow federal, state and local laws Follow terms of the grant award

22. NON-PUBLIC Continuous Consultation District should attempt to find students attending non-public schools Aide in Lieu of Other Reasonable Method

23. NON-PUBLIC Equitable Amounts for Parent Involvement Professional Development Same Fiscal Rules Apply Only your districts students Students that need extra services

24. NON-PUBLIC NO longer just supplies/computer – SERVICES ARE REQUIRED Carryover Funds not Spent in Prior Year (Discretion) Automatic flow of district carryover in EWEG

25. Use of Third Party Providers for Non-Public Services Third Party Provider Contracts When bid, the specifications should have the Stephens Amendment wording Vendor Complaint Policy Details on who provides parental involvement activities Renting/Ownership of Supplies, Trailers, etc. Breakout of Invoices to Include: Instructional Salaries and Benefits Instructional Supplies Rental of books, supplies, trailers Administrative Charges/Profit

26. Use of Third Party Providers for Non-Public Services Administrative Costs of Third Party Providers counts against the Districts Five Percent (5%) Total Administrative Costs Who pays the Administrative Costs? Off the top allocation of the District of Other Title I Funds (USDOE Non-Regulatory Guidance)

27. Policy Statements District Policies on: Maintenance of Effort Comparability Supplement vs. Supplant

28. Policy Statements Maintenance of Effort Current Expenditures (Not Including Capital Outlay) Less: Community Services Divided by: Average Daily Enrollment Compare to prior year (current year/prior year) and must be at least 90% *** Must Be Done Annually ***

29. Policy Statements Maintenance of Effort Example LineDescriptionAggregate Expenses Average Daily Enrollment Amount Per Student 1 Amount from 2004-2005 $ 5,098,944377.50 13,507.14 2 Amount LEA had to Spend in 2005- 2006 (90% of Line 1) $ 4,589,050377.50 12,156.42 3 Actual Amount Spent in 2005-2006 $ 5,095,897398.00 12,803.76 4 Amount District Failed to Maintain 5 Percent of Reduction in 2006-2007 EXCESS $ 506,847 $ 647.34

30. Policy Statements Comparability Compare Like-Kind Schools (Title 1 to Non-Title 1) or Compare Like-Kind Title 1 Schools to each other or Compare Like-Kind Grade Span Groupings (Elementary, Middle or High)

31. Policy Statements Comparability The average number of students per instructional staff for Title I schools does not exceed 110 percent of the average of schools not participating in Title I programs; or

32. Policy Statements Comparability The average instructional staff salary expenditure per student for Title I schools is at least 90 percent of the average of schools not participating in Title I programs.

33. Policy Statements Components Short Form Instructional staff only Full Time Staff Equivalent (FTE) (Paras only count as ½ FTE for every full FTE) Pupils enrolled Different sheets depending on if ALL schools are funded or if some are funded and some are not Long Form (if required) District-wide salary scale All employees at first range of scale NEW TIMELINES STARTING 2008-2009 (Due December 4 th ) ** Required to document compliance every year **

34. Supplement Not Supplant Funds must be supplemental to local spending Supplemental Defined: In the absence of federal funds, would funds have been spent (prior year funding is one distinguishing factor)

35. Supplement Not Supplant If all students/classroom get items, district cant pay for Title I part out of Title I funds Items purchased should not be used by non-Title I students Presentations/Trips should not benefit non-Title I students Special rules apply to approved and implemented Schoolwide Programs

36. Schoolwide Programs MUST have approved plan that addresses all schoolwide issues Time sheets are required (except in a blended resource fund, e.g., Fund 15 for Abbott districts)

37. Schoolwide Programs Approval on a school by school basis Key questions to be addressed: Do the activities budgeted support the intent of the law? [Federal Register: July 2, 2004 (Volume 69, Number 127)] Are supplemental services provided to the students enrolled in the school?

38. Frequently Asked Questions Time Sheets and Salaries Q:Multiple Federal Grants – If someone works on multiple federal grants, must their salary be allocated to all the grants since it is one large federal pot of money? A: Yes, since each is a separately funded program.

39. Frequently Asked Questions Title I Set-Asides: Choice/SES. If no Choice than all SES, If no SES, then all Choice, If both minimum 5% for each and 10% district option. May use state or local money to meet this obligation – just be able to verify Must track per pupil expenditures by student New rules for reallocation of unspent SES in current year Must show copies of letters and multiple offerings (at least twice and 30 days registration period each offering)

40. Frequently Asked Questions Title I Set-Asides: Teacher and Paraprofessional Qualifications Must set aside not less than 5% unless lesser amount is needed and can be documented that it is not needed. All teachers in Title I schools can benefit, not just Title I. May not use in Non-Title I schools. North Dakota Policy Letter

41. Frequently Asked Questions Title I Set-Asides: Parental Involvement Must show that at least 1% was spent on grants over $500,000. Be able to document all parental involvement activities with associated costs 95% must be at the school level and 5%can be at the district level Remember Carryover Restriction and Tracking of Funds

42. Frequently Asked Questions Title I Set-Asides: Professional Development Must set-aside 10% if school is identified as in need of improvement. Remember Carryover Restriction and Tracking of Funds If Parental Involvement or Professional Development reserved, then proportional amount for nonpublic (Regulations 200.65(a))

43. Other Important Fiscal Considerations Grant Year Start date of grants – some start July 1 st and some start September 1 st (NCLB) Dont encumber funds prior to start of Grant Now Grants will entertain requests to encumber funds prior to September 1 (But you must seek permission) Final Amendments due by June 30th for NCLB (Depending on EWEG issues) Summer NCLB runs through August – Separate summer expenditures from current year Carryover Oldest money automatically used first!!!! Make sure your Auditors know so Due to Grantor not in CAFR – started with 2005-2006 Carryover into 2006- 2007

44. Other Important Fiscal Considerations Carryover Oldest money automatically used first!!!! Make sure your Auditors know so Due to Grantor is not in CAFR, Schedule of Federal Expenditures – started with 2005-2006 Carryover into 2006-2007

45. Other Important Fiscal Considerations

46. Title I Monitoring AA Team Random Sample Other Criteria Size of Grant Office of Fiscal of Accountability & Compliance Follow up Prior year follow up Program Content Fiscal Content

47. Fiscal News from Washington New Haven Audit Report from Office of Inspector General Supplanting in a Schoolwide Program http://www.ed.gov/about/offices/list/oig/auditreports/a02f0 005.pdf

48. Fiscal News from Washington William Floyd Audit Report from Office of Inspector General Unsupported Expenses Unsupported Adjusting Journal Entries Supplanting of Textbooks Weak Internal Controls http://www.ed.gov/about/offices/list/oig/auditreports/a02f00 30.pdf

49. Fiscal News from Washington City of Detroit and Parent Involvement Fund 2005 Disallowed Charges for Entertainment, Promotional Items and Public Relations Need to be necessary, reasonable, allocable and documented Disallowed items include advertising for an event and live musical entertainment at parent volunteer function http://www.ed.gov/about/offices/list/oig/auditreports/a05f0018.pdf

50. Fiscal News from Washington City of Detroit Revisit in 2008 Over $131 Million in 2005 and $126 Million in 2006 No Time Sheets – Almost $50 Million No Time Sheets – Almost $50 Million Teaching non-Title I students – even though most of Detroit is schoolwide some schools are not (no plan submitted) and OIG looked to these schools and found staff being funded that were teaching non-Title I identified students. Detroit argued they could have been schoolwide if they did a plan and the OIG rejected this argument Teaching non-Title I students – even though most of Detroit is schoolwide some schools are not (no plan submitted) and OIG looked to these schools and found staff being funded that were teaching non-Title I identified students. Detroit argued they could have been schoolwide if they did a plan and the OIG rejected this argument Over $21 M for adjusting entries for employees that were charged to other programs and then charged to Title I Gift cards they could not show got to students $150,000 for martial arts training

51. Fiscal News from Washington St. Louis OIG Audit Lost 125 Computers Serving Ineligible Schools http://www.ed.gov/about/offices/list/oig/areports.html

52. Common Audit Findings Personnel not listed in board minutes (with Title I percentage) for current year and carryover Lack of time sheets (or signature of employees/supervisors) TPAF/FICA not being properly calculated

53. Common Audit Findings Improper payroll distribution (not pro-rated) Purchase orders not indicating Title I (and adjusting entries to reclassify amounts)

54. Common Audit Findings Policies not being updated for current law Supplanting on purchases of non-salaried items Not spending at the schools approved in the application Not liquidating within 90 (ninety) days of the end of the grant

55. Conclusion Remember: If you take the money, you are responsible for knowing the rules and regulations concerning the grant. If you need further help contact Anthony Hearn (609) 633-2492 anthony.hearn@doe.state.nj.us