1. 11/13/2008 Page 1 MDE and ISD Partnership: Darkening the Dotted Lines Monitoring and Compliance Training: Financial Management

2. 11/13/2008 Page 2 Overview

3. 11/13/2008 Page 3 Financial Management Pre-Training Assessment Survey

4. 11/13/2008 Page 4 Financial Management: Allowable Costs

5. 11/13/2008 Page 5 Allowable Costs Overview  Reasonable and necessary  Allocable  Legal under state and local law  Conform with federal law and grant terms

6. 11/13/2008 Page 6 Allowable Costs  Consistently treated  In accordance with GAAP  Not included as match

7. 11/13/2008 Page 7 Allowable Costs: Regulations and Guidance  General Education Provisions Act (GEPA)  Program statute and regulations  EDGAR (Education Department) General Administrative Regulations) Sub Part C, §80.22 Allowable Costs

8. 11/13/2008 Page 8 Allowable Costs: Regulations and Guidance  OMB Circular A 87 State, Local, and Indian Tribal Governments Section C – Basic Guidelines Attachment B – Selected Items of Cost

9. 11/13/2008 Page 9 Allowable Costs  Helpful Questions for Analyzing Costs: Is the proposed cost allowable under the relevant program? Is the proposed cost consistent with an approved program plan and budget?

10. 11/13/2008 Page 10 Allowable Costs  Is the proposed cost consistent with program specific fiscal rules?  Is the proposed cost consistent with EDGAR?

11. 11/13/2008 Page 11 Allowable Costs: Basis for Allowability  Must follow applicable cost principle to determine reasonableness, allowability, and allocability of all costs  All costs must be: Necessary Reasonable Allocable Legal under state and local law

12. 11/13/2008 Page 12 Allowable Costs: Necessary  A cost is necessary and reasonable if: Needed for the performance or administration of the grant Follows sound business practices; arms length bargaining Reflects fair market prices for comparable goods or services Is prudent

13. 11/13/2008 Page 13 Allowable Costs: Necessary  Practical aspects of ‘necessary’ Do I really need this to administer my program? Is this the minimum amount I need to spend to meet my need?

14. 11/13/2008 Page 14 Allowable Costs: Reasonable  Practical aspects of ‘reasonable’ Is this targeted to valid programmatic/administrative considerations? Do I have capacity to use what I am purchasing for this program?

15. 11/13/2008 Page 15 Allowable Costs: Reasonable Did I pay a fair rate and can I prove it? If this expense were in the local newspaper “Headlines”, would I be comfortable?

16. 11/13/2008 Page 16 Allowable Costs: Allocable  Practical aspects of ‘reasonable’ Can I prove the program benefited?  Time/effort records  Inventory management records Can I prove other programs are not benefiting?  Ensuring only authorized use  Incidental benefit

17. 11/13/2008 Page 17 Allowable Costs: Adequate  Adequately documented Amount of funds under grant How the funds are used Total cost of the project Share of costs provided by other sources

18. 11/13/2008 Page 18 Allowable Costs: Adequate  Records that show compliance  Records that show performance  Other records to facilitate an effective audit

19. 11/13/2008 Page 19 Allowable Costs: Compensation for Service  Overview of process Estimate how employee will work Pay based on estimate Reconcile estimates to how actually worked

20. 11/13/2008 Page 20 Allowable Costs: Compensation for Service  Necessary documentation Payroll records Time and effort records  Semi-annual certifications (single cost objective)  Personnel Activity Reports (PARs) (multiple cost objectives)

21. 11/13/2008 Page 21 Allowable Costs: Things to Consider  Maintenance of Effort  Supplement vs. Supplant  In-Kind Requirements  LEA Match (soft and hard match)  Timely Amendments  Document, Document, Document

22. 11/13/2008 Page 22 Allowable Costs: FAQs  Is there a list of allowable costs that we can look at to analyze a contemplated cost? No. Although lists are available, they are lists of “allowable, but”, they must meet the other tests spoken to earlier

23. 11/13/2008 Page 23 Allowable Costs: Other Resources  MDE Office of Audits (Auditing Manual  http://www.michigan.gov/mde/0,1607,7 -140-6530_9091---,00.html http://www.michigan.gov/mde/0,1607,7 -140-6530_9091---,00.html MDE – Specific Program Office

24. 11/13/2008 Page 24 Allowable Costs: Other Resources  OMB Circular A-21, Cost Principles for Educational Institutions Part C: Basic Considerations Part J: General Provisions for Selected Items of Cost

25. 11/13/2008 Page 25 Allowable Costs: Other Resources  OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments Appendix A: General Principles for Determining Allowable Costs

26. 11/13/2008 Page 26 Allowable Costs: Other Resources  OMB Circular A-133, Compliance Supplement  OMB Circular A-122, Cost Principles for Non-Profit Organizations Attachment B, Selected Items of Cost

27. 11/13/2008 Page 27 Allowable Costs: More Information  Contacts MDE: Specific Program Office ISD:

28. 11/13/2008 Page 28 LEA Fiscal Review Tool

29. 11/13/2008 Page 29 LEA Fiscal Review Tool  Developed by MDE staff responsible for federal and state fund management  Lists major elements reviewed during an audit performed by MDE state auditors

30. 11/13/2008 Page 30 LEA Fiscal Review Tool  Lists all items contained within the FMS Self-Assessment Survey and reflected in the Professional Development modules  Purpose To assist an LEA in the development of its own plan for improvement of its FMS

31. 11/13/2008 Page 31 Resources

32. 11/13/2008 Page 32 Resources All resources identified in this Professional Development module are available on: Michigan LearnPort www.learnport.org Collaboration Center Community Room LEA Financial Management Resources

33. 11/13/2008 Page 33 Michigan LearnPort  www.learnport.org www.learnport.org  A web-based professional development delivery system Created in partnership with Michigan Virtual University and the Michigan Department of Education

34. 11/13/2008 Page 34 Michigan LearnPort  ISDs and LEAs may use Learnport to assist with easy access to financial documents by uploading files to created community rooms and utilizing discussion forums for centralized, online question and answer banks  LearnPort is free to public schools, ISDs, and employees of the state of Michigan

35. 11/13/2008 Page 35 Michigan LearnPort  Offers full professional development record-keeping capabilities School employees are provided up- to-date and flexible online professional development to help meet personal and district learning requirements

36. 11/13/2008 Page 36 LearnPort Account Creation  Creating Account  Verification E-Mail  New Account Login  LearnPort Main Page  Accessing LEA Financial Management Resources Room  Online Financial Resources Assistance

37. 11/13/2008 Page 37 Creating Account  Go to learnport.org  Below the login area on the right side of the screen is “New User? CLICK HERE.” Select this link

38. 11/13/2008 Page 38 Creating Account

39. 11/13/2008 Page 39 Creating Account  On this page you will be prompted to enter a username and password Make sure they are easy to remember  Once you enter all the required sign up information you will be sent a confirmation e-mail to the e-mail that you provided

40. 11/13/2008 Page 40 Verification E-mail  After LearnPort notifies you that you will be sent a confirmation E-mail, check the E-mail address that you used in sign-up after five minutes  You must select the link in the E-mail that LearnPort sends you for your account to be finalized You won’t be able to log in without doing this

41. 11/13/2008 Page 41 New Account Login  Once you have selected the link to verify your account creation you will be able to access Learnport  Return to learnport.org and enter your account information

42. 11/13/2008 Page 42 LearnPort Main Page  After logging in you will be taken to Learnport’s Main Page  To access the “Community Rooms” where you can create rooms for your own use, or view rooms that are already created you need to select “Collaboration Center” from the left side toolbar We will be accessing the LEA Financial Management Resources room created by MDE

43. 11/13/2008 Page 43 LearnPort Main Page

44. 11/13/2008 Page 44 Accessing LEA Financial Management Resources Room  On the next page there will be 5 buttons to choose from  To access LearnPort’s listing of the available community rooms, select “Community Rooms”  The link to the left of this is where you would create your own room for your ISD/LEA if you would like to

45. 11/13/2008 Page 45 Accessing LEA Financial Management Resources Room

46. 11/13/2008 Page 46 Accessing LEA Financial Management Resources Room  This page will contain a scroll bar in the middle of the screen towards the bottom for scrolling through available rooms  Go down to LEA Financial Management Resources Room and select the link The “i” in a circle in this section gives a brief informational explanation of the item it is next to, select the words themselves to go to the community room

47. 11/13/2008 Page 47 Accessing LEA Financial Management Resources Room

48. 11/13/2008 Page 48 Online Financial Resources Assistance  The Community Room’s page will appear with several options on the left. Select “Content”  Within the content area are the reference documents that will assist with Financial Management procedures Some are links to actual documents Some are website links to obtain documents

49. 11/13/2008 Page 49 Online Financial Resources Assistance

50. 11/13/2008 Page 50 Online Financial Resources Assistance  This room will be kept up to date with any legislation changes and added necessary documents to complete the LEA’s Financial Management Process.  Feel free to use the “Discussion Forums” section of this community room to ask one another questions and provide answers.

51. 11/13/2008 Page 51 Committee Membership

52. 11/13/2008 Page 52 MDE/MAISA Monitoring and Compliance Committee  Becky Rocho, Calhoun ISD, (269) 781-5141 rochob@calhounisd.org rochob@calhounisd.org  Patty Cantú, MDE, Office of Career and Technical Education, (517) 373-3373 cantup@michigan.gov  Mary Ann Chartrand, MDE, Grants Coordination and School Support, (517) 373-8862 chartrandm@michigan.gov  Terri Lynn Giannola, MDE, Office of Career and Technical Education, (517) 373-4670 giannolat@michigan.gov

53. 11/13/2008 Page 53 Cash Management Subcommittee  Stan Kogut – ISD Chair Ingham ISD (517) 244-1214; skogut@inghamisd.orgskogut@inghamisd.org  Louis Burgess – MDE Co-Chair MDE – Grants Coordination and School Support (517) 335-3672; burgessl@michigan.govburgessl@michigan.gov  Craig Thurman - MDE Co-Chair MDE – Financial Management (517) 373-2810; thurmanc@michigan.govthurmanc@michigan.gov  Tom Armstrong Wexford-Missaukee ISD (231) 876-2312; tarmstrong@wmisd.orgtarmstrong@wmisd.org

54. 11/13/2008 Page 54 Allowable Costs Subcommittee  Tony Suszek, ISD Chair Alpena-Montmorency-Alcona ESD (989) 354-3101 ext.117; suszekt@amaesd.k12.mi.us suszekt@amaesd.k12.mi.us  John Cloft – MDE Co-Chair MDE – Office of Special Education-EIS (517) 335-0475; cloftj@michigan.govcloftj@michigan.gov  John Andrejack – MDE Co-Chair MDE – Office of Special Education-EIS (517) 241-4035; andrejackj@michigan.gov Steve Peffers Marquette-Alger RESAandrejackj@michigan.gov (906) 226-5101; speffers@maresa.orgspeffers@maresa.org  Gary Schafer MDE – Early Childhood Education (517) 335-2875; schaferg@michigan.govschaferg@michigan.gov

55. 11/13/2008 Page 55 Procurement Subcommittee  Tom Bean, ISD Chair Calhoun ISD (269)789-2476; beant@calhounisd.orgbeant@calhounisd.org  Dan Hanrahan – MDE Chair MDE – State Aid and School Finance (517) 335-0521; hanrahand@michigan.govhanrahand@michigan.gov  Gus Bishop Charlevoix-Emmet Intermediate School District (231) 547-9947; bishopg@charemisd.orgbishopg@charemisd.org  Steve Ezikian Wayne RESA (734) 334-1451; ezikias@resa.netezikias@resa.net  Cheryl Schubel MDE- Grants Coordination and School Support (517) 241-2597; schubelc@michigan.govschubelc@michigan.gov

56. 11/13/2008 Page 56 Timekeeping Subcommittee  Stephanie Murray – ISD Chair Traverse Bay Area Intermediate School District (231) 922-6417; SMURRAY@tbaisd.k12.mi.usSMURRAY@tbaisd.k12.mi.us  Margaret Madigan, MDE Co-Chair MDE - School Improvement/Field Services (517) 373-4588; madiganm@michigan.govmadiganm@michigan.gov  Kathy Weller – MDE Co-Chair MDE – Office of Audits (517) 335-6858; wellerk@michigan.govwellerk@michigan.gov

57. 11/13/2008 Page 57 Timekeeping Subcommittee  David Gray MDE - School Improvement/Field Services (517) 373-0161; grayd@michigan.govgrayd@michigan.gov  Gayla Mann MDE - School Improvement/Field Services (517) 373-4009; manng@michigan.govmanng@michigan.gov  Pat Meaux MDE - School Improvement/Field Services (517) 373-4212; meauxp@michigan.govmeauxp@michigan.gov  Harvey Vermeesch Lapeer County ISD (810) 664-1124; hvermeesch@lcisd.k12.mi.ushvermeesch@lcisd.k12.mi.us