1. Daniel Bush, DPI School Financial Services WASBO Accounting Conference March 11, 2015

2.  Audit Program Overview  Resolving Findings  Current Findings and Issues  Grant Expenditures Reconciliation 3/11/2015 2State SPED Fiscal Auditing

3. What are auditors looking for? Why do we care? 3/11/2015 3State SPED Fiscal Auditing

4.  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

5. 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

6.  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

7. Townsville (9999) 123456 789012 Tyler, Rose Smith, Sarah Jane Chesterton, Ian Wright, Barbara Pond, Amelia Jovanka, Tegan McCrimmon, Jamie Oswald, Clara Grant, Jo

9.  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 http://sfs.dpi.wi.gov/sfs_specedn http://sfs.dpi.wi.gov/sfs_specedn 3/11/2015 9State SPED Fiscal Auditing Compliance Requirements 1-4

10.  Used to correct NVL report when ◦ Position/area incorrect on district’s PI-1202 ◦ License issued after NVL check run in June 3/11/2015 10State SPED Fiscal Auditing Compliance Requirements 1-4

11.  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 3/11/2015 11State SPED Fiscal Auditing Compliance Requirements 1-4

12.  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 3/11/2015 12State SPED Fiscal Auditing Compliance Requirement 5

13.  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 3/11/2015 13State SPED Fiscal Auditing Compliance Requirement 6

14.  Do expenditures match FTE out?  Do revenues match FTE in?  Is the base flat rate coded to Fund 10? ◦ 2014-15 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 3/11/2015 14State SPED Fiscal Auditing Compliance Requirement 7

15.  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” 3/11/2015 15State SPED Fiscal Auditing

16.  Email to dpisfsreports@dpi.wi.gov:dpisfsreports@dpi.wi.gov ◦ 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 3/11/2015 16State SPED Fiscal Auditing

17. What happens next? 3/11/2015 17State SPED Fiscal Auditing

18.  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) 3/11/2015 18State SPED Fiscal Auditing

19.  SFS auditors review financials and forward findings to consultants as appropriate  SFS consultant emails 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) 3/11/2015 19State SPED Fiscal Auditing

20. Areas of concern in the field 3/11/2015 20State SPED Fiscal Auditing

21.  Continued challenges with ELO transition ◦ License processing backlog ◦ Migrating database and internal DPI audits  2013-14: Significantly elevated number of NVL reviews and findings ◦ Auditors were advised to add whatever qualifications they felt appropriate to findings  2014-15: ? ◦ Keep an eye on the SFS and auditor listservs! 3/11/2015 State SPED Fiscal Auditing21

22.  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

23.  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

24. or, One Man’s Crazy Dream 3/11/2015 State SPED Fiscal Auditing24

25. 3/11/2015 State SPED Fiscal Auditing25 IDEA Final Claims Project 340 Expenditures = =

26.  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

27.  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 http://sms.dpi.wi.gov/sms_fedaidshttp://sms.dpi.wi.gov/sms_fedaids  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

28. 3/11/2015 State SPED Fiscal Auditing28 7/19/30 6/30 Liquidation Period Forward Funding Federal Fiscal Year Grant Period

29. 3/11/2015 State SPED Fiscal Auditing29 7/19/30 6/30 Claims only for expenditures to date

30. 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.

31.  1/22: Contract signed [OBLIGATION]  6/15-7/8: Work performed  7/14: Invoice received [EXPENDITURE] 7/14/15DR 27E 320 255000 341CR 27B 811200  8/14: Invoice paid [LIQUIDATION] 8/14/15DR 27B 811200CR 27B 711000  9/29: IDEA flow-through claim submitted JE 6/30/15DR 27B 715000CR 27R 730  10/26: Reimbursement paid by DPI 10/26/15CR 27B 711000DR 27B 715000 3/11/2015 State SPED Fiscal Auditing31

32.  s. 115.88 (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

33.  Aids register to revenue (currently in PI-1505)  Revenue to expenditures 3/11/2015 State SPED Fiscal Auditing33

34.  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

35.  Audit Manual: http://sfs.dpi.wi.gov/sfs_aud_list http://sfs.dpi.wi.gov/sfs_aud_list  Special Ed/SAP Categorical Aid: http://sfs.dpi.wi.gov/sfs_speced http://sfs.dpi.wi.gov/sfs_speced  SFS Consultant: Daniel Bush daniel.bush@dpi.wi.gov 608-267-9212 daniel.bush@dpi.wi.gov 3/11/2015 35State SPED Fiscal Auditing