1. SD DOE Federal Education Programs Monitoring Office of Grants Management Rob Huffman, Administrator Tacy Kennison, Program Specialist Danna Sanders, Program Specialist

2. 2 MonitoringRequirement The SD DOE is required to monitor subrecipients. 2 CFR Part 200.331(d) Ensure that sub awards are used for authorized purposes, and in compliance with Federal statutes and regulations Ensure that performance goal are achieved

3. 3 Types of Monitoring Application Process Site Visits and/or Desk Reviews Single Audit Report Reviews Program Specific Example - IDEA MOE & Excess Costs

4. 4 Program Site Reviews Programmatic Requirements Performance Goals are met Staff Qualifications Professional Development Plans Non Public School Participation Etc.

5. 5 Fiscal Reviews Ensure expenditures are allowable and in compliance with program requirements and the approved application Review information regarding Internal Controls, Financial Management Systems, Inventory Management Systems and Procurement Systems.

6. 6 Grant Application The first tool to monitor sub recipients is the grant application and budget. Application activities are reviewed. Budgets are reviewed for allowable costs. Subrecipients are expected to follow the activities and budgets they submitted in the application that was approved.

7. Fiscal Monitoring – Who gets Chosen each Year? A risk analysis is preformed based many factors to chose districts to monitor each year, including: Date of last review Audit and Monitoring findings District Enrollment & Number of Schools Priority or focus schools Amount of Federal Funding Number of Federal programs Administrative staff turnover 7

8. What to Expect if Chosen The SD DOE will send a letter notifying of the review and requesting information. 8

9. Financial Management System The district must be able to provide records to adequately identify the program source and expenditure of federal funds by program. 9

10. Typical Information Requested Expenditure Reports General Ledger reports Accounting System’s Identifiers for each Federal Program Payroll Reports Employee Time Distribution Records Equipment Inventory Records Supporting Documentation, such as receipts, invoices, vouchers, etc. Policies and Procedures 10

11. 11 Financial Management Systems Accounting Accounting records for each federal grant the LEA receives Title I funds need to be accounted for and tracked at the school level  Ensure funds are properly distributed to schools – public and private  Ensure any required set-asides or earmarks are met

12. 12 Financial Management Systems Accounting Expenditures are posted to the accounting records as they occur Accounting records tracks expenditures against the budget in the approved application Same accounting records track expenditures by category back to the original funding source

13. 13 Financial Management Systems Accounting Record Utilize indicators within coding to identify grant program Capability to generate reports using that indicator Reports support expenditures reflected on Project Completion Reports

14. Initial Fiscal Review Process Comparative Analysis of Each Federal Program’s Approved Budget District’s Reimbursement Requests District’s Accounting Records and Expenditure Reports 14

15. 15 Fiscal Review Process District’s accounting records are reviewed to verify that expenditures match amounts reported on the Reimbursement Requests and Close Out Reports for each Federal Program.

16. Common Finding The District did not maintain separate accounts for each grant to track federal funding separately by source. Reimbursement requests do not match accounting records. Federal funds are comingled with State and/or other Federal program funds. Continued… 16

17. Common Finding Continued Federal program fund sources are over identified, or under identified Programs with common allowable activities are comingled and not tracked separately. For example -Title I, REAP, School Improvement Grants funds are separate programs that need to be tracked separately and should NOT be comingled. 17

18. 18 Fiscal Desk Audits Based on review of the accounting reports, a sampling of support documentation such as time distribution records, contracts, invoices, property records, district capitalization policy, and district procurement policy will be requested.

19. 19 Documents are reviewed Ensure that Costs are: Consistent with approved budget Necessary & Reasonable Allocable to the Program Allowable Documented

20. 20 Support Documentation Support documentation sufficient to determine the nature of the expenditures and their allowability: Cancelled checks; Vouchers with supporting invoices; Payroll records; Contracts; And time and attendance records.

21. 21 Employee Time Distribution Records Required to charge salaries & wages to federal programs Must demonstrate that the employees actually worked on the specific federal program Applies to all employees who are paid with federal funds

22. 22 Employee Time Distribution Records – Type Required Depends on how many “cost objectives” the employee worked on The cost objectives must be connected to the employee’s work activities. What is a cost objective? A specific grant award, or other category of costs, that requires the grantee to track specific cost information

23. 23 Single Cost Objective Time Distribution Records If an employee works on a single cost objective: Semi-Annual Certification Signed by employee or supervisor every six months After-the-fact

24. 24 Multiple Cost Objective Time Distribution Records If an employee works on multiple cost objectives: Personnel Activity Report (PAR) or equivalent documentation are required

25. 25 Personal Activity Reports Time Distribution Records PAR must be: After the fact Account for 100% of employee’s work Signed by employee Prepared at least monthly and coincide with one or more pay periods Time increments should be sufficient to recognize the number of different activities performed

26. Common Findings Salaries paid from grant are not supported with time and effort records. Expenditures were unallowable or did not support the program’s intent. Expenditures were not consistent with the approved budget. Source documentation could not be provided. 26

27. 27 Fiscal Monitoring Report The SD DOE will provide a written monitoring report to the District that may include recommendations, findings and questioned costs. If findings are included a corrective action plan will be required from LEA.

28. Corrective Action Plan A specific required action and a deadline for completion. The District must submit documentation that demonstrates that you have addressed and corrected the issue. 28

29. Questioned Costs The SD DOE may find that costs are unallowable or undocumented and require your LEA to return the disallowed costs A corrective action may also be required to avoid future unallowable costs and activities. 29

30. Monitoring Follow Up Districts must take timely and effective action to resolve issues identified. SD DOE will do a follow up monitoring to review corrective actions and determine if all issues are resolved. 30

31. Enforcement Withhold Approval of the Application Suspending Payments Withhold further Payments Designate High Risk Grantee Status Require more detailed expenditure reports Require the District to obtain technical or management assistance Other Special Conditions 31

32. New State Law Requirements Each sub recipient must attest that: A conflict of interest policy is enforced within the organization IRS Form 990 has been filed and displayed on the sub recipients website. (nonprofit organizations) An effective internal control system is employed by the organization If applicable the sub recipient is in compliance with the single audit act, and audits are displayed on the sub recipient’s website. 32

33. New State Law Most of this is already required under the new Federal Uniform Guidance – 2 CFR Part 200 33

34. Who Must Have a Single Audit? Beginning in FY 2016 a district must have a single audit if it expends more than $750,000 in federal grant funds in that fiscal year that meets the requirements of the Federal Uniform Guidance. 2 CFR 200.501(a). The trigger amount was $500,000 in FY 2015. Note. Districts that are exempt from the Single Audit Act must still have an audit that meets the requirements in State law. 34

35. 35 Single Audit Reviews SD DOE reviews the single audit reports for findings related to federal awards that pass through the SD DOE to the sub recipient. SD DOE reviews and verifies amounts provided to districts on the Schedule of Federal Awards. (SEFA)

36. Management Decision of Findings SD DOE will review findings related to federal programs and the district’s corrective action plan and issue a Management Decision. Management Decision will either sustain or not sustain the finding. In general, a finding will be sustained unless the auditor misinterpreted a federal rule or new guidance is available. 36

37. Management Decision Corrective Action Plan SD DOE may require that the district provide more documentation on CAP implementation before issuing decision. Questioned Costs – SD DOE will ask you if you agree or disagree with finding. Request clarifying documentation if you disagree. 37

38. Audit Management Decision Require implementation of CAP May imposed additional Requirements Require repayment of funds if SD DOE determines the funds were misspent or undocumented. Opportunity for a hearing 38

39. Failure to Comply with CAP Failure to implement a Single Audit finding’s CAP may result in SD DOE taking an appropriate enforcement action. 39

40. Internal Controls Subgrantees must establish and maintain internal controls that provide reasonable assurance the award is managed in compliance with Federal statutes and regulations (2 CFR 200.303) Maintain accountability for and control over all federal funds and other assets. Safeguard grant property and ensure it is used solely for authorized purposes. Ensure the integrity of federal funds 40

41. Components of Internal Control Control Environment Risk Assessment Control Activities Information and Communication Monitoring 41

42. Control Environment Polices to ensure employees possess and maintain competence Org structure that defines areas of authority and responsibility Policies that provide training and the proper amount of supervision 42

43. Risk Assessment Designed to reasonably manage risks Common risk factors: Large disbursement amounts New personnel Complex program rules New programs Rapid Growth 43

44. Control Activities Segregation of key responsibilities Secure valuable assets Written Policies Restrict access to system or records. Common areas: Approvals, Authorizations, Reconciliations, Security, Record Retention 44

45. Communications Employees receive relevant, reliable and timely information Identify and distribute information that allows staff to do their jobs effectively Communication between fiscal and program staff 45

46. Monitoring Controls Assess quality of controls of over time Correct findings or noted deficiencies 46

47. Conflict of Interest EDGAR EDGAR 75.525 Participation in Project A grantee may not permit a person to participate in an administrative decision if: The decision is likely to benefit that person or a member of his or her the immediate family The person is a public official, or has a family or business relationship with the grantee. Continued … 47

48. COI EDGAR Continued A grantee may not permit any person to use his or her position for the purpose that is/or gives the appearance of being motivated by a desire for private financial gain. 48

49. Conflict of Interest Standards for Procurement Subgrantees must maintain a written code of conduct for employees that award or administer contracts. 2 CFR 200.318(c)(1) See Example - Code of Standards of Conduct 49

50. 50 Procurement Systems Procurement procedures must comply with Procurement Standards in 2 CFR Part 200.318 to 200.326

51. 51 Inventory Management System Adequate controls are in place to account for non-consumable equipment (tangible, nonexpendable, personal property that has a useful life of more than one year) purchased with federal funds

52. 52 Inventory Management System Requirements 2 CFR Part 200.313(d) Property Records must consist of: a description of the property a serial or other identification number source of funding who holds title the acquisition date the cost of the property

53. 53 Inventory Management System Requirements continued the percentage of Federal participation in the cost the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.

54. 54 Inventory Management System Physical Inventory Physical inventories of equipment should be taken every two years Inventories should be reconciled with the Property Records

55. 55 Inventory Management System Loss Prevention & Maintenance Ensure adequate safeguards to prevent loss, damage, or theft of the property Any loss, damage or theft shall be investigated Adequate maintenance procedures to keep equipment in good condition must be in place.

56. 56 References Federal Uniform Guidance 2 CFR Part 200 The Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards EDGAR – Education Department General Administrative Regulations Available on the US Ed website http://www2.ed.gov/policy/fund/guid/uniform- guidance/index.html http://www2.ed.gov/policy/fund/guid/uniform- guidance/index.html

57. Grant Award Notifications (GAN) Recipients Name and unique entity identifier (DUNS) Federal Award Identifying number (FAIN) Federal Award Date Federal Awarding Agency Typically will be US ED or USDA Continued … 57

58. GAN Continued Required Info Catalog of Federal Domestic Assistance (CFDA) Number Grant Period Start and End Date Amount of Federal Funds Awarded Awarding Agency Contact Information Grant Award Terms and Conditions 58

59. Where Can I get GAN Programs on the GMS are available in the GMS system. Click the View GAN under the Application Status Column (must be approved before it is available) Other programs will be provided as a paper document. 59

60. IDEA Maintenance of Effort Updates and Clarifications on New Regulations clarifications. 60