1. Comparability & Title I Compliance Annual MASBO Institute May 12, 2015

2. History of the School Business Official  The leadership role of the school business official has changed during the past two centuries.  Initially, a lay board oversaw the area of school business. That responsibility then moved to selectmen of the town and later to a committee of men.  In the early to mid-1800’s, superintendents were given the responsibility of paying bills and maintaining the buildings.  Then in _____, the role of the school business official was formalized with the establishment of the National Association of School Accounting Officers. Massachusetts Department of Elementary and Secondary Education 2

3. A.1953 B.1910 C.1938 D.1925 Massachusetts Department of Elementary and Secondary Education 3

4. The first female Superintendent of public schools the United States was appointed in 1874 in the district of: Massachusetts Department of Elementary and Secondary Education 4 A.Davenport, IA B.Jefferson, WI C.Dearborn, MI D.Plainville, KS

5. Agenda  Title I and comparability  Maintenance of effort  Internal controls  Time and effort reporting  Single audits Massachusetts Department of Elementary and Secondary Education 5

6. 5 facts about Title I  Title I serves more than 18 million students nationwide  Title I was initiated in 1965 as part of the War on Poverty  Title I serves students Pre-K through 12 th grade  Title I is the single largest precollege federal education program  Title I students are found in almost every school district in the county Massachusetts Department of Elementary and Secondary Education 6

7. Comparability is a test of fairness Schools receiving federal Title I funds must receive state and local funds comparable to the state and local funds given to non-Title I schools. In other words, Title I schools must be getting their fair share of state and local funds before they receive Title I funds. Title I funds, by law, are therefore supplemental to state and local funds. Comparability is required by the No Child Left Behind Act of 2001. 7 Massachusetts Department of Elementary and Secondary Education

8. General Rule- §1120A(c)  An LEA may receive Title I Part A funds only if it uses state and local funds to provide services in Title I schools that, taken as a whole, are at least comparable to the services provided in non-Title I schools.  If all are Title I schools, all must be “substantially comparable.”

9. Meeting comparability  LEAs must conduct calculations every year to demonstrate compliance because Title I, Part A allocations are made annually.  LEAs must keep comparability documentation on file for outside review. 9 Massachusetts Department of Elementary and Secondary Education

10. How to measure?? Compare Student/Staff Ratios  Average of all non-Title I schools to  Each Title I school

11. Exclusions:  Federal Funds  Private Funds  Need not include unpredictable changes in students enrollment or personnel assignments that occur after the start of a school year

12. Who is “instructional staff”?  Consistent between Title I and non-Title I  EPIMS Codes Used for Comparability :  EPIMS 1305Principal  EPIMS 1310Assistant/Vice Principal  EPIMS 2305Teacher  EPIMS 2310Teacher – support content instruction  EPIMS 2325Long Term Substitute Teacher  EPIMS 2330Instructional Coach  EPIMS 3329Guidance Counselor

13. Exemptions  Schools with 100 or fewer students  An LEA with only one school for each grade span (Vocational Schools & Charters too)  A school with no comparison school in the same grade span grouping by enrollment size 13 Massachusetts Department of Elementary and Secondary Education

14. Automated form: detailed school data 14 Massachusetts Department of Elementary and Secondary Education

15. ESE-generated report  ESE is using a newly created database to monitor district compliance with comparability.  ESE will run monitoring reports in February (using current year SIMS and EPIMS data).  Districts in question will be asked to review their staffing data and explain discrepancies or submit hard evidence of student to staff ratios. 15 Massachusetts Department of Elementary and Secondary Education

16. What if a school is not comparable? LEAs must take immediate action to adjust school resources. Adjustments may involve:  Moving Title I funds out of a school  Replacing them with State or local funds  Making staffing changes in a school 16 Massachusetts Department of Elementary and Secondary Education

17. Maintenance of Effort

18. MOE: The NCLB Rule  LEA may receive funds only if SEA finds the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds from preceding year not less than 90% for second preceding year.

19. MOE: Preceding fiscal year  Need to compare final financial data  ESE Uses End of Year Financial Report (EOYR)  Example: To ensure MOE for FY16 Title I ~ compare FY13 EOYR to FY14 EOYR. (FY15 data would not be available in time)

20. Expenditures included EOYR codes used for MOE:  100 Administration  200 Instructional Services  300 Pupil Services  400 Operation & Maintenance of Plant  500 Benefits & Other Fixed Charges (local & state funds only)

21. Failure to meet MOE  ESEA: If LEA fails MOE, SEA must reduce amount of allocation in the exact proportion by which LEA fails to maintain effort below 90%.  Reduce all applicable NCLB programs, not just Title I

22. Determining MOE for FY16 Title I grant funding Aggregate expenditures Amount per student SY 13$1,000,000$6,100 SY14 must spend 90%$900,000$5,490 Actual amount$850,000$5,200 Shortfall($50,000)($290) Percent shortfall/ reduction FY16 TI grant reduced by 5.3% -5.6% ($50,000/$90,000) -5.3%** ($290/$5,490)

23. Internal controls All recipients of federal funds must have controls that:  Ensure federal money is spent correctly  Transactions properly recorded and accounted for  Prove federal money is spent correctly  Transactions are executed in compliance with laws, regulations, and provisions of contracts or grants  Safeguard property purchased with federal money  Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition 23 Massachusetts Department of Elementary and Secondary Education

24. Internal controls Purchase Orders: should indicate that an item or service was authorized prior to purchase Information on Invoices: should describe the item or service purchased and its designated purpose Payment of Invoices: should ensure that expenditures match agreed upon charges with purchase orders and vendor contracts Vendor Contracts – should document the activity or item being purchased 24 Massachusetts Department of Elementary and Secondary Education

25. Internal controls Equipment records – should indicate up to date equipment lists, inventory lists with accurate location information and physical inventory at least once every two years Procedures to Draw Down Funds: should have procedures to draw down funds from ESE within the allowed time periods Title I Set-Asides: should show the allocation and distribution of funds from Title I set-asides 25 Massachusetts Department of Elementary and Secondary Education

26. Internal controls Budget Process – should have financial information that compares actual expenditures to the amounts budgeted (Business Manager tracks) Grant workbook must align with budget expenditures – submit amendments as needed Payroll records / FTEs must / time & effort should all reconcile 26 Massachusetts Department of Elementary and Secondary Education

27. Time and effort reporting  Districts must maintain auditable "time and effort" records that show how each Title I employee spent his or her compensated time.  Records are written, after-the fact (not estimated or budgeted).  Time and effort records must be prepared by Title I staff with salary charged directly to: 1.A federal award, 2.Multiple federal awards, or 3.To any combination of a federal award and other federal, state or local fund sources. 27 Massachusetts Department of Elementary and Secondary Education

28. Time and effort reporting – stipends and other payments  Stipends (and other supplemental contracts) must also be reported.  Record stipends on semi-annual certifications or monthly reports, whichever is utilized for the particular employee.  Alternatively, permitted documentation includes  A signed supplemental contract that stipulates Title I work activity;  Sign-in attendance logs approved by the supervisor (e.g., pay for professional development activities, after school activities, etc); and  Employee time/pay slips that specify "Title I" and are approved by the supervisor 28 Massachusetts Department of Elementary and Secondary Education

29. Title I audits What does the auditor look for?  Deficiencies in internal controls  Noncompliance with laws and regulations  Questioned costs greater than $10,000  Unallowable costs  Undocumented costs  Unapproved costs  Unreasonable costs 29 Massachusetts Department of Elementary and Secondary Education

30. What is an audit finding?  “Findings” are significant issues noted by the auditor that are disclosed in your audit report, which is a public record.  Your district must prepare a corrective action plan to resolve the issue.  Your district may be asked to repay questioned costs to the grantor agency. 30 Massachusetts Department of Elementary and Secondary Education

31. Statistics on MA single audit findings FY14 Commonwealth of Massachusetts Common Single Audit findings: 4%Use of funds 4% Unallowable costs 4% Procurement 11% Cash management 29% Time and effort 50% Reporting/recordkeeping 31 Massachusetts Department of Elementary and Secondary Education

32. Allowable costs  To be allowable, a cost must:  Be reasonable for the performance of the award and be allowable in accordance with OMB Circular A-87. http://www.whitehouse.gov/omb/circulars_a087_2004/ http://www.whitehouse.gov/omb/circulars_a087_2004/  All costs must be necessary and reasonable  Must be necessary for the performance or administration of the grant  Must follow sound business practice  Fair market prices  Act with prudence under the circumstances  Do I really need this?  Do I have the capacity to use what I am purchasing?  Did I pay a fair rate? Can I prove it? 32 Massachusetts Department of Elementary and Secondary Education

33. Procurement (the acquisition of goods & services) Written policies and procedures Common problems:  No documentation  Invoice predates purchase order  Lack of description in contracts/invoices  Lack of approval over payment process  Inadequate segregation of duties  Conflicts of interest 33 Massachusetts Department of Elementary and Secondary Education

34. Inventory controls  LEA Title I Office & Title I school will maintain a current and accurate inventory record of equipment purchased with Title I funds (including purchases for private school services)  Inventory Listing should include equipment that is non-consumable with a life of more than one year 34 Massachusetts Department of Elementary and Secondary Education

35. Travel expenses As always….  Documentation / pre-approval / purchase order  Purpose of travel – where & why?  Receipts – auto/airfare/train/taxi/food/hotel  Reasonable and necessary 35 Massachusetts Department of Elementary and Secondary Education

36. Tips for T1 Directors & Business Managers  Gather and summarize grant information  Clean and organized records to give to auditors  Document your policies and procedures  Documentation drives quality and compliance  Know where to find the OMB Circular A-133. This supplement lists 14 areas of compliance that auditors are expected to review when performing an audit  http://www.whitehouse.gov/omb/circulars/a133_compliance _ supplement_2012 http://www.whitehouse.gov/omb/circulars/a133_compliance _ supplement_2012  Make sure the employees assigned to Title I understand the grant requirements to ensure compliance 36 Massachusetts Department of Elementary and Secondary Education

37. Contact information Website: http://www.doe.mass.edu/apa/titlei http://www.doe.mass.edu/apa/titlei Email:titlei@doe.mass.edu Phone:781-338-6230