Daniel Bush, DPI School Financial Services WASBO Accounting Conference March 11, 2015
Audit Program Overview Resolving Findings Current Findings and Issues Grant Expenditures Reconciliation 3/11/2015 2State SPED Fiscal Auditing
What are auditors looking for? Why do we care? 3/11/2015 3State SPED Fiscal Auditing
Program audit, not fiscal audit Required for all LEAs Purposes ◦ Verify compliance with licensure and other program requirements ◦ Verify accurate reporting for state aid calculation and federal IDEA Maintenance of Effort 3/11/2015 State SPED Fiscal Auditing4
1. “No Valid License” audit 2. Payroll testing 3. Personal services and employee travel 4. Private vendor contracted services 5. Specialized transportation 6. Vehicle/equipment purchases 7. Open enrollment reconciliation 3/11/2015 5State SPED Fiscal Auditing
Required for ◦ Staff listed under “Educators Without Valid Licenses” ◦ Other questioned costs Due before audited financial statements ◦ Aid payments begin in November, need worksheets in October Note whether LEA is requesting license status review ◦ Reviews are not automatic! All Compliance Requirements 3/11/2015 6State SPED Fiscal Auditing
Townsville (9999) Tyler, Rose Smith, Sarah Jane Chesterton, Ian Wright, Barbara Pond, Amelia Jovanka, Tegan McCrimmon, Jamie Oswald, Clara Grant, Jo
License must be current and valid License must be appropriate for the individual’s actual assignment Valid Reporting and License Codes for Special Education/Pupil Services Staff available at 3/11/2015 9State SPED Fiscal Auditing Compliance Requirements 1-4
Used to correct NVL report when ◦ Position/area incorrect on district’s PI-1202 ◦ License issued after NVL check run in June 3/11/ State SPED Fiscal Auditing Compliance Requirements 1-4
Compliance Requirement 1 ◦ DPI generates NVL list from cross-check between district’s position report and license database ◦ Auditor does not check the license ◦ Auditor completes & submits worksheet, attaches district representation letter (if provided) Compliance Requirements 2, 3 & 4 ◦ Auditor tests records as appropriate ◦ Auditor does check the license ◦ Questioned cost reported on worksheet 3/11/ State SPED Fiscal Auditing Compliance Requirements 1-4
Pupil transportation in Fund 27, project 011 Did all students have transportation in IEP? ◦ Exceptions: Listed in another student’s IEP (e.g. peer mentor) “Incidental Benefit”: Picked up at same location, didn’t displace another pupil with IEP, didn’t increase route cost/capacity Students going to/from school also counted for Pupil Transportation Aid? ◦ If district is having a Pupil Transportation Audit, report findings there Questioned cost calculation specified 3/11/ State SPED Fiscal Auditing Compliance Requirement 5
Vehicles ◦ Prior approval from DPI required Equipment with unit cost at least $10,000 ◦ Prior approval from DPI required Equipment with unit cost less than $10,000 ◦ No review 3/11/ State SPED Fiscal Auditing Compliance Requirement 6
Do expenditures match FTE out? Do revenues match FTE in? Is the base flat rate coded to Fund 10? ◦ rate: $6,635 Is there a PI-2092 open enrollment tuition agreement on file? Errors are not a questioned cost for aid, but corrections the LEA must make ◦ No finding required if corrected before reports are submitted 3/11/ State SPED Fiscal Auditing Compliance Requirement 7
Verify reported expenditures match general ledger ◦ Current: Total Fund 27; project 011 only ◦ Future: Project 340 Report questioned costs, findings, and aid estimate ◦ Identify questioned costs with specific amounts and account coding where necessary ◦ Obtain PI-1505-SE Aid Estimate from district’s online report and identify total on “Schedule of State Awards” 3/11/ State SPED Fiscal Auditing
to ◦ Completed NVL/QC worksheet—submit actual Excel workbook, not PDF or scan All “Educators Without Valid Licenses” Any additional questioned costs Reflect account coding after any corrections ◦ Confirm whether district agrees or disagrees ◦ Supporting documentation as appropriate District’s representation letter Copy of license certificate—not DPI website printout Payroll records Other appropriate documentation 3/11/ State SPED Fiscal Auditing
What happens next? 3/11/ State SPED Fiscal Auditing
SFS consultant may request more information Negative adjustments applied as necessary to aidable costs on PI-1505-SE (reduces aid) License reviews: ◦ Special Education Team reviews licenses and makes eligibility determinations ◦ District and auditor contacted with result ◦ Adjustments reduced/removed as necessary (additional aid in subsequent payments) 3/11/ State SPED Fiscal Auditing
SFS auditors review financials and forward findings to consultants as appropriate SFS consultant s letter to district requesting information District responds, further discussion/ clarification may be required SFS consultant informs district of decision ◦ Negative adjustments applied as necessary to aidable costs on PI-1505-SE (reduces aid) 3/11/ State SPED Fiscal Auditing
Areas of concern in the field 3/11/ State SPED Fiscal Auditing
Continued challenges with ELO transition ◦ License processing backlog ◦ Migrating database and internal DPI audits : Significantly elevated number of NVL reviews and findings ◦ Auditors were advised to add whatever qualifications they felt appropriate to findings : ? ◦ Keep an eye on the SFS and auditor listservs! 3/11/2015 State SPED Fiscal Auditing21
Starting to see findings on miscoded expenditures, answered many auditors’ questions on the topic Should a finding be issued for miscoding? ◦ YES, BUT…only when there’s a program issue Non-eligible SPED cost miscoded as 011 Fund 10 cost coded to Fund 27 Grant payment to other LEA not reported ◦ Otherwise, it’s sufficient for them to fix it Question: Would guidance in the audit program be helpful? 3/11/2015 State SPED Fiscal Auditing22
GPI/GPO lines on PI-1505-SE GPO = Project 340 w/ certain 380 objects? ◦ Obj 382 Payments to WI District ◦ Obj 383 Payments to CCDEB ◦ Obj 386 Payments to CESA Other challenges ◦ Late claims/budget changes shifting payments to other LEAs on/off the grant ◦ Lengthy CESA reconciliations ◦ Do checks indicate payment w/ grant funds? 3/11/2015 State SPED Fiscal Auditing23
or, One Man’s Crazy Dream 3/11/2015 State SPED Fiscal Auditing24
3/11/2015 State SPED Fiscal Auditing25 IDEA Final Claims Project 340 Expenditures = =
WUFAR does not define project code as actual rather than budgeted ◦ On spring WUFAR update agenda Obligations vs. expenditures Reporting vs. grant timelines ◦ Annual reports due mid-September ◦ IDEA claims open through September 30 3/11/2015 State SPED Fiscal Auditing26
Obligation ◦ Order placed, contract awarded, or goods/services received during a given period ◦ Payment required in current or future period General Federal Award Guidance at Expenditure ◦ Recognized when liability is incurred Liquidation ◦ Payment to resolve the liability ◦ May not submit grant claim until obligation is liquidated 3/11/2015 State SPED Fiscal Auditing27
3/11/2015 State SPED Fiscal Auditing28 7/19/30 6/30 Liquidation Period Forward Funding Federal Fiscal Year Grant Period
3/11/2015 State SPED Fiscal Auditing29 7/19/30 6/30 Claims only for expenditures to date
3/11/2015 State SPED Fiscal Auditing30 7/19/30 6/30 Contract signed Invoice received NOTE: The claim deadline is September 30, not 90 days after the invoice was received. The project may not be claimed next year.
1/22: Contract signed [OBLIGATION] 6/15-7/8: Work performed 7/14: Invoice received [EXPENDITURE] 7/14/15DR 27E CR 27B 8/14: Invoice paid [LIQUIDATION] 8/14/15DR 27B CR 27B 9/29: IDEA flow-through claim submitted JE 6/30/15DR 27B CR 27R 730 10/26: Reimbursement paid by DPI 10/26/15CR 27B DR 27B /11/2015 State SPED Fiscal Auditing31
s (7), Wis. Stats.: O FFSETTING RECEIPTS. In any school year, the following revenues shall be deducted from costs aidable under this section before aids are calculated under this section: (a) Any federal operational revenues expended on costs aidable under this section. So why can’t we just subtract 27R 730 from 27E project 011? ◦ Aid-eligible LEAs buy services from each other ◦ Differences in recording between LEAs can result in state aid paid on federally-funded expenditures 3/11/2015 State SPED Fiscal Auditing32
Aids register to revenue (currently in PI-1505) Revenue to expenditures 3/11/2015 State SPED Fiscal Auditing33
Would you be able to reconcile grant revenues/expenditures now? ◦ If not, what are the obstacles? Revisit communication with grant managers ◦ Make sure you know what your special ed director or CESA is doing! Look at internal grant policies/procedures ◦ Omni-Circular will require more in writing Watch for WUFAR and reporting changes 3/11/2015 State SPED Fiscal Auditing34
Audit Manual: Special Ed/SAP Categorical Aid: SFS Consultant: Daniel Bush /11/ State SPED Fiscal Auditing