1. Brette Kaplan, Esq. bkaplan@bruman.com Erin Auerbach, Esq. eauerbach@bruman.com Brustein & Manasevit, PLLC www.bruman.com Spring Forum 2013 bkaplan@bruman.comeauerbach@bruman.com www.bruman.com DEVELOPING POLICIES AND PROCEDURES FOR STATE AND LOCAL EDUCATIONAL AGENCIES Brustein & Manasevit, PLLC1

2. Why? A-133 Audits – Auditors must ask about policies and procedures Some tests specifically require written policies and procedures – Compliance Supplement, Part 6: Internal Controls “The A-102 Common Rule and OMB Circular A-110 (2 CFR part 215) require that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.” Brustein & Manasevit, PLLC2

3. Why? Monitoring – Policies and procedures are evidence of compliance under all program monitoring tools Brustein & Manasevit, PLLC3

4. Why? Changes and Transitions of Staff – Training tool – Maintain consistency Brustein & Manasevit, PLLC4

5. WHY? Compliant policies and procedures lead to: – Administering compliant programs and complying with grants management requirements Brustein & Manasevit, PLLC5

6. Logistics Where to start? Who should be involved? What is the process? How long does it take? Brustein & Manasevit, PLLC6

7. Rules and regulations Education Department General Administrative Regulations (EDGAR) – OMB Circular A-102 Office of Management and Budget Circulars State/Agency Policies and Procedures Authorizing Statute Brustein & Manasevit, PLLC7

8. Types of grants State Administered Grants – Any grant that is distributed by formula to eligible states. EDGAR § 76.1 Direct Grants – Any grant other than those that are distributed by formula to eligible states. EDGAR § 75.1 Brustein & Manasevit, PLLC8

9. Building Blocks Organization, Structure and Function Grant Application Process Financial Management System Procurement Inventory/Property Management Time and Effort Record Keeping Monitoring Audit Resolution Programmatic Fiscal Requirements Programmatic Requirements Brustein & Manasevit, PLLC9

10. Organization Structure and Function Brustein & Manasevit, PLLC10

11. Organization Structure and Function Organization Chart Job Descriptions Brustein & Manasevit, PLLC11

12. Organization Structure and Function Do you have an organizational chart? What are the offices, sections, divisions or employees that have responsibility for grant administration? – What are their responsibilities? Are there any entities outside of the agency that have grant administration responsibilities? – What are those responsibilities? – How is relationship created? What are the terms? MOU/MOA? Brustein & Manasevit, PLLC12

13. Grant Application Process Brustein & Manasevit, PLLC13

14. Grant Application Process – Applying for grants: A grant application should be written so that it can be managed within the regulations that apply Review every grant application with a grants management eye before submitting it Read and understand the Grant Award Notification (GAN) Direct Grants: – Whether or not formal acceptance is required, meet with appropriate parties to be certain you want to accept the grant. – Make acceptance a conscious act. Things may have changed between submission and notice of award – internally and externally. Brustein & Manasevit, PLLC14

15. Grant Application Process How does the agency determine what grants to apply for? What is the process? Who reviews and signs off on a grant application? What happens after a grant is awarded? Brustein & Manasevit, PLLC15

16. Financial management system Brustein & Manasevit, PLLC16

17. Financial Management System EDGAR § 80.20 Accounting System Budget Budget Revisions Brustein & Manasevit, PLLC17

18. Financial Management System Allowable Costs – OMB Circular A-87 – Specific items of cost Timely obligation of funds – Period of availability – EDGAR § 80.23 – Obligations – EDGAR § 75.707 or 76.707 – Carryover Brustein & Manasevit, PLLC18

19. Financial Management System – What accounting systems are used? – What function does each system perform? – Who is responsible for managing budgets and accounts payable? – How are budgets loaded and tracked on the system? Timeline? – How do you ensure that expenditures are properly recorded in the system? – Is there a process for comparing budgets to expenditures? – How do you ensure that all expenditures are allowable? Travel – What is the process for requesting budget revisions? – How do you ensure that all expenditures are made within the period of availability? – What happens to unobligated funds? – Does the system interface with the procurement and inventory system? – How are vendors paid? What is this process? Brustein & Manasevit, PLLC19

20. Procurement Brustein & Manasevit, PLLC20

21. Procurement EDGAR § 80.36 Conflict of Interest Open Competition Solicitations Vendor Selection Contract Administration Brustein & Manasevit, PLLC21

22. Procurement What is your conflict of interest policy? State and/or agency-specific requirements that must be followed? Approval for contracts? Service contracts vs. contracts for goods? Contract thresholds and process for entering into contracts within each threshold amount? – Small purchase, etc. What clauses and/or certifications must be in each contract? How do you ensure that the terms of the contract are met? Brustein & Manasevit, PLLC22

23. Inventory Brustein & Manasevit, PLLC23

24. Inventory Property classifications – Computing Devices Inventory procedure Lost or stolen items Disposition Brustein & Manasevit, PLLC24

25. Inventory How do you classify and define property? – Equipment, supplies, non-consumables What items must be inventoried and tagged? – Detailed inventory records What is the inventory process? How frequently is a physical inventory conducted? What is the policy regarding lost or stolen items? Are there procedures to transfer equipment between programs? What are the disposition procedures? Brustein & Manasevit, PLLC25

26. Time and Effort Brustein & Manasevit, PLLC26

27. Time and effort OMB Circular A-87 Semiannual Certification PARs Cost Objective Brustein & Manasevit, PLLC27

28. Time and effort How do you document time and effort? – Employees that work on one cost objective? – Employees that work on multiple cost objectives? Who must sign the forms? Where are the forms turned in? Brustein & Manasevit, PLLC28

29. Record Keeping Brustein & Manasevit, PLLC29

30. Record Keeping EDGAR § 80.42 Statute of Limitations State Policy Agency Policy Brustein & Manasevit, PLLC30

31. Record Keeping How long must records be maintained? How are records maintained? – Electronic, hard copy Brustein & Manasevit, PLLC31

32. Monitoring Brustein & Manasevit, PLLC32

33. Monitoring Risk-based – Risk factors Desk reviews Onsite reviews Follow-up Brustein & Manasevit, PLLC33

34. Monitoring Monitoring of agency vs. monitoring of subrecipients? Who is responsible for monitoring? Fiscal? Programmatic? What gets monitored? How do you determine which subrecipients will be monitored? How often does monitoring occur? – Site visits, desk reviews, self-assessments What is the process – from notification to issuing report? – Timeline? How do you ensure that findings are resolved? – Corrective action plan – Closeout letter resolving finding – Future monitoring Brustein & Manasevit, PLLC34

35. Audit Resolution Brustein & Manasevit, PLLC35

36. Audit Resolution Single Audit OMB Circular A-133 Brustein & Manasevit, PLLC36

37. Audit Resolution Who is responsible for overseeing OMB A- 133 audit compliance and resolution? What is the audit process? How are findings resolved? Review of subrecipients’ A-133 audits? Brustein & Manasevit, PLLC37

38. Programmatic Fiscal Requirements Brustein & Manasevit, PLLC38

39. Programmatic Fiscal Requirements Supplement not supplant Maintenance of effort Matching Hold harmless Brustein & Manasevit, PLLC39

40. Programmatic Fiscal Requirements How do you ensure compliance with programmatic fiscal requirements? Brustein & Manasevit, PLLC40

41. Programmatic Requirements Brustein & Manasevit, PLLC41

42. Programmatic Requirements Programmatic compliance – Allocations to subrecipients – Allowable costs under grant program – Application process – Other Brustein & Manasevit, PLLC42

43. Programmatic Requirements How does your agency ensure compliance with the specific requirements of the grant program? Brustein & Manasevit, PLLC43

44. Now what? Training Review and revise Where are policies and procedures located? Brustein & Manasevit, PLLC44

45. Brustein & Manasevit, PLLC45

46. Disclaimer This presentation is intended solely to provide general information and does not constitute legal advice. Attendance at the presentation or later review of these printed materials does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances. Brustein & Manasevit, PLLC46