1. 9/12/2008 Page 1 MDE and ISD Partnership: Darkening the Dotted Lines Monitoring and Compliance Training: Financial Management

2. 9/12/2008 Page 2 Overview

3. 9/12/2008 Page 3 Financial Management Pre-Training Assessment Survey

4. 9/12/2008 Page 4 Financial Management: Timekeeping

5. 9/12/008 Page 5 Timekeeping: Content Financial Management System (FMS) Federal Timekeeping Requirements

6. 2/1/2012 Revised by OSE Page 6 Timekeeping: Components of a Good FMS  Written Policies and Procedures  New Staff/Position Training  Adherence to Approved Policies and Procedures  Annual Review and Training Updates  Timely

7. 2/1/2012 Revised by OSE Page 7 Timekeeping: Regulations  2 CFR 225 (formally OMB Circular A- 87, Attachment B, Item 8h)  PowerPoint: Federal Fiscal Requirements. Michigan Department of Education, Office of School Improvement

8. 9/12/2008 Page 8 Timekeeping: Definitions and Terms  Cost Objective - a function, organizational subdivision, contract, grant, or other activity for which cost data are needed and for which costs are incurred

9. 9/12/2008 Page 9 Timekeeping: Definitions and Terms  Personnel Activity Report (PAR) - record maintained by employee working on more than one cost objective which is prepared after the fact, reflecting the actual total activity of the employee, at least monthly and signed and dated by the employee

10. 9/12/2008 Page 10 Timekeeping: Definitions and Terms  Semi-Annual Certification - certification that employee worked on a single federal award or cost objective. Must be prepared at least semi-annually, signed, and dated by employee or supervisory official having firsthand knowledge of the work performed

11. 9/12/2008 Page 11 Timekeeping:Overview  Written Policies and Procedures  Multiple Activities or Cost Objectives  Single Federal Award or Cost Objective  Estimations  Quarterly Comparisons  Adjustments and Budget Revisions

12. 9/12/2008 Page 12 Policies and Procedures: Payroll Components  There are written policies and procedures governing payroll administration  Salaries from the Financial Expenditure Report (formerly DS-4044) agree with the district’s general ledger payroll accounts for all federal grant programs

13. 9/12/2008 Page 13 Policies and Procedures: Payroll Components  All salary costs for work performed are within the grant period  Salaries must comply with the employment contract which indicates the annual salary scale for the grant period

14. 9/12/2008 Page 14 Policies and Procedures: Timekeeping  There are written policies on recording time distribution for employees who work on one or more federal award or cost objective

15. 2/1/2012 Revised by OSE Page 15 Timekeeping: Multiple Cost Objectives For employees working on multiple activities OR cost objectives:  The district has Personnel Activity reports (PARs)  The PARs are prepared at least monthly

16. 2/1/2012 Revised by OSE Page 16 Timekeeping: Multiple Cost Objectives  The PARs are signed and dated by the employee  The PARs account for the staff person’s actual total activity

17. 2/1/2012 Revised by OSE Page 17 Timekeeping: Multiple Cost Objectives  The PARS are actual real-time records and not prepared in advance of the time period covered

18. 2/1/2012 Revised by OSE Page 18 Example-Personnel Activity Report Example 1: Single Award/Multiple Cost Objectives A school district could have an employee funded with a single federal award and working on multiple cost objectives In IDEA, a physical therapist could work part time at the local district and part time at a non-public school where data is required for the proportionate share, a PAR is required

19. 2/1/2012 Revised by OSE Page 19 Example-Personnel Activity Report Example 2: Multiple Awards/Multiple Cost Objectives A school district could have an employee funded with multiple federal awards and working on multiple cost objectives In IDEA, Part B Sec. 611 supports students ages 3-21 and Sec. 619 supports ages 3-5. If the employee works with students 3-5 and 6- 21 a PAR is required

20. 2/1/2012 Revised by OSE Page 20 Timekeeping: Single Federal Award or Cost Objective For employees working solely on a single federal award OR cost objective:  The district has certifications or a blanket certification showing that the employees worked solely on a single federal award or cost objective

21. 2/1/2012 Revised by OSE Page 21 Timekeeping: Single Federal Award or Cost Objective  The certifications are prepared at least semi-annually  The certifications are signed by the employee or a supervisor with first- hand knowledge of the work performed by the employee and are dated after the fact

22. 2/1/2012 Revised by OSE Page 22 Timekeeping: Single Federal Award or Cost Objective  The certifications are actual real-time records and not prepared in advance of the time period covered

23. 2/1/2012 Revised by OSE Page 23 Example-Semi Annual Certification Example 1: Single Award/Single Cost Objective A school district could have an employee funded with a single federal award and working on a single cost objective In IDEA Part B Sec. 611, a physical therapist working all their time at the local district, a semi annual certification is required

24. 2/1/2012 Revised by OSE Page 24 Example-Semi Annual Certification Example 2: Multiple Awards with Single Cost Objective A school district could have an employee funded with more than one federal award working on a single cost objective, where the awards support the cost objective In IDEA, Part B Sec. 611 supports students ages 3- 21 and Sec. 619 supports ages 3-5. If the employee works with only ages 3-5 on both awards, a semi annual certification is appropriate.

25. 9/12/2008 Page 25 Timekeeping: Estimations  The system for establishing estimates produces reasonable approximations of the activity performed

26. 9/12/2008 Page 26 Timekeeping: Quarterly Comparisons  At a minimum, quarterly comparisons are made of actual costs to budgeted distributions based on monthly activity reports

27. 2/1/2012 Revised by OSE Page 27 Timekeeping: Adjustments  Adjustments are made to costs charged to federal awards based on the activity actually performed  These adjustments can be made annually only if the quarterly comparisons show differences between budgeted and actual costs of less than 10%

28. 9/12/2008 Page 28 Timekeeping: Budget Revisions  Budget estimates or other distribution percentages are revised at least quarterly, if necessary, to reflect changed circumstances

29. 9/12/2008 Page 29 Timekeeping: FAQs  What are the audit requirements? Your auditor will take a sample of expenditures and request timekeeping documentation for anyone charged to federal funds. If your records are insufficient, the auditor will include a finding in the audit report and may question costs. See the Michigan School Auditing Manual for further information

30. 2/1/2012 Revised by OSE Page 30 Timekeeping: FAQs  What happens if you cannot produce the documentation for the single audit? Auditor will site 100% of salaries as questioned costs and could result in a penalty of repayment

31. 9/12/2008 Page 31 Timekeeping: Other Resources  The Michigan School Auditing Manual  Report from the Time Log Work Group, Michigan Department of Education, Office of School Improvement, February 13, 2008

32. 9/12/2008 Page 32 Timekeeping: Other Information  Contacts MDE: Office of Audits ISD:

33. 9/12/2008 Page 33 LEA Fiscal Review

34. 9/12/2008 Page 34 Resources

35. 9/12/2008 Page 35 Committee Membership