Title I Coordinator Training Fiscal and Internal Controls

1. Title I Coordinator TrainingFiscal and Internal Controls October 2010

2. Essential Questions • How are LEA allocations for Title I determined? • How can Title I funds be used? • What are the steps to creating a Title I budget? • What internal controls must be in place to ensure compliance?

3. Title I Allocation Timeline DEDOE calculates allocations based on derived poverty census December March June July US DOE provides census poverty data for 16 geographic districts Preliminary Title I, Part A allocations received from US DOE to DEDOE Final Title I, Part A allocations received from US DOE to DEDOE DEDOE loads final allocations into Consolidated Grants

4. Calculating LEA Title I Allocations • Inputs • Poverty Census data • Foster care children count • Unit count free and reduced lunch • Unit count enrollment • Students lost to vocational districts • Students lost to charter schools

5. Allocation Process • Step 1: Determine Poverty Rates • Use students lost to vocational schools and charters to reduce the census poverty estimates of the 16 geographic districts • Redistribute lost census poverty to the vocational and charter schools using free and reduced lunch • Add foster care children to census poverty for the 16 geographic school districts • Use unit count enrollment data to calculate final poverty rates for all districts and charter schools • Step 2: Determine Eligibility • Determine which LEAs are eligible for Title I, Part A (10 poverty children and 2% poverty rate or hold-harmless)

6. Allocation Procedures • Step 3: Allocate Funds • Allocate funds to eligible LEAs from the four funding grants that comprise Title I, Part A using the eligibility rules below :

7. Title I Budget Parameters • Supplement Not Supplant “A State educational agency or local educational agency shall use Federal funds received under this part only to supplement the funds that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of pupils participating in programs assisted under this part, and not to supplant such funds.”(Section 1120(b)(1))

8. Presumption of Supplanting Supplanting is presumed to have occurred when Title I funds are used to provide services that are: • required by Federal, State or local law Examples: • Using Title I funds to meet state class size reduction requirements. • Using Title I funds to provide services that must be provided under a child’s IEP • provided in previous years with other non-federal funds. • provided to children in a Title I program and provided to children in non-Title I programs with non-federal funds. Example: • Purchasing a reading software program for a Title I school and using State or local funds to purchase the software for non-Title I school.

9. Allowable Costs • Title I, Part A funds must be used to support academic achievement and assist students in meeting the state’s challenging academic achievement standards. (Section 1001 of the ESEA) • Regulations that govern the use of Title I, Part A Funds • EDGAR (Education Department General Administrative Regulations) Part 76 • OMB A-133 Compliance Supplement • OMB A-87

10. EDGAR and A-133 EDGAR • prohibits the use of funds for: • religious activities • the acquisition of real property or construction • Directs grantees to A-87 for general cost principles A-133 • Provides an audit guide for auditors to audit financial statements and monitor compliance

11. OMB Circular A-87 • To be allowable, a cost must generally: • Be necessary and reasonable for the proper performance and administration of the grant award. • Be allocable to a specific allowable costs under the cost principles • Be authorized or not prohibited under state or local laws or regulations • Conform to any applicable statutory or regulatory limitations • Be consistent with policies, regulations and procedures that apply uniformly to both Federal awards and other activities of the governmental unit • Be accorded consistent treatment • Be determined in accordance with generally accepted accounting principles (GAAP) • Not be included as a cost used to meet cost sharing or matching requirement • Be the net of all applicable credits • Be adequately documented

12. Required Set-Asides • LEA level set-asides • 1% for parent involvement if total allocation exceeds $500,000. • 10% for professional development if LEA is under improvement • 20% for Choice/SES if LEA has any schools in year 1 + of school improvement • Funds to provide educationally related support services to eligible homeless children • School level set-asides • 10% for professional development for any school in year 1 + of school improvement

13. Optional Set-Asides • Funds to administer programs for public and private school children • LEA level instructional set-asides Examples: • The LEA purchases a software program for use by all Title I schools to track student performance • The LEA purchases and operates an educational television program for use by all Title I schools

14. Other Important Fiscal Rules • LEAs must provide equitable services to participating private schools on the following set-asides: • Parent Involvement • Non improvement-related professional development • LEA Instructional set-asides • LEAs must distribute 95% of the 1% parent involvement set-aside (after equitable services are taken) to schools • LEAs must ensure that schools identified for corrective action or restructuring do not have an allocation reductions of more than 15 percent as compared to previous years.

15. Important Fiscal Rules Continued • LEAs budgeting funds for audit costs must ensure that Title I, Part A isn’t paying a disproportionate share of the total audit costs • LEAs serving schools with poverty rates below 35% must allocate to all its schools at least 125% of the LEA’s Per Pupil Allocation (PPA) Note: The PPA must be calculated before any set-asides are taken. • LEAs must serve schools in rank order based on the percent of poverty either on an LEA-wide or grade span basis. • 85% of Title I funds must be obligated/spent by September 30 of the second year of the grant.

16. Calculating Equitable Services • LEAs must provide an equitable share of funds reserved for: • parent involvement; • non-improvement related professional development; and • LEA-wide instructional activities to participating private schools. • LEAs calculate the proportion of low income private school children to the total of all low-income children (public and private) in participating attendance areas. • This proportion is then applied to the total set-aside to calculate the amount that must be made available to the private schools. • Low income private school students from participating public schools generate the same PPA as public school students from that participating public school.

17. Let’s take a 10 minute break

18. Rethinking the Budgeting Process • Determine LEA distributions and set asides • Determine school eligibility using school level poverty data • Determine how you will decide what schools to serve (single tier on ranked poverty, two or more poverty tiers on ranked poverty, two or more grade span tiers on ranked poverty) • Determine PPA(s) • Allocate money to schools using tier(s) and PPA(s) • Determine private school equitable share from LEA distributions and equitable share from school allocations • Determine school distributions and set asides • Determine specific budgeted items from LEA and school distributions.

19. Overview of Title I Budgeting Tool • Dynamic based on different LEA scenarios (i.e. improvement status, grade span makeup, etc.) • Limited LEA data entry • Calculates required set-asides automatically • Calculates equitable services automatically

20. Let’s Group Activity on Developing a Title I, Part A Budget

21. Internal Controls • Semi- Annual Certifications and Time & Effort Logs • Equipment • Records retention • Annual and final reports

22. Semi Annual Certifications • Required for employees who work on one federal program • Prepared twice a year • No required format • Signed by the employee OR supervisor having first-hand knowledge of the work performed • Acknowledges that the employee worked solely on the Federal program for the period covered by the certification.

23. Sample Semi-Annual Certification TO: Whom it May Concern SUBJECT: Verification of Time and Effort I verify by my signature that I spent 100% of my time on the designated program during the during the time period from July 1, 2002 through December 31, 2002. Employee Name Program Employee Signature Jane Doe 100% IDEA (L) TQM   Jane Doe Joe Smith 100% Title I, Part A Joe Smith I Concur: [Supervisors Signature] [Supervisors Name] [Supervisors Title]

24. Time and Effort Logs • Employees who work on multiple federal programs • Completed monthly and coincide with one or more pay periods • DEDOE has a required form • Reflects an after-the-fact distribution of actual activity of employee • Must account for total activity for which employee is compensated • Must be signed by the employee Required Time and Effort form available here: http://www.doe.k12.de.us/infosuites/staff/fedstprog/TitleIPartA/TitleIFILES/TimeandEffortLog.xls

25. Equipment • Equipment definition: an article of personal property having a useful life of more than one year and acquisition cost which equals or exceeds $1,000. • Inventory records must be kept for all equipment purchased • Inventory must be taken least once every 2 years • Control system must be in place to prevent loss, damage or theft • All equipment, whether it is federal or state owned, must be disposed of through the Delaware Office of Management and Budget’s Government Support Services, Surplus Services Office.

26. Equipment Records Equipment records must include: • A description of the equipment • A serial # or other id # • The source of equipment • Who holds the title • Acquisition date and cost • Location, use and condition of equipment • Any disposition data (including date of disposal and sale price) • All equipment at private schools must be marked “Property of XXXX School District” Additional guidance on equipment available here: http://www.doe.k12.de.us/infosuites/staff/fedstprog/TitleIPartA/TitleIFILES/DISPOSITION.pdf

27. Records Retention • Records must be maintained for three years from the date the grantee submits its last expenditure report • Equipment records must be kept for three years from the date of disposition, replacement or transfer. Additional guidance on records retention available here: http://www.doe.k12.de.us/infosuites/staff/fedstprog/TitleIPartA/TitleIFILES/RECORDSRETENTION.pdf

28. Annual and Final Reports • Annual reports are due July 15 of the second year of the grant • Final reports are due March 31 of the second year of the grant • DEDOE has a required format for annual and final reports

29. Additional Resources • US ED Non-Regulatory Guidance on Title I Fiscal Issues http://www.doe.k12.de.us/infosuites/staff/fedstprog/TitleIPartA/TitleIFILES/fiscalguid2008.doc • Section 1120A of the ESEA http://www2.ed.gov/policy/elsec/leg/esea02/pg2.html#sec1120A • DEDOE’s Title I Technical Assistance Session Materials www.doe.k12.de.us/infosuites/staff/fedstprog/default.shtml • Sample Semi-Annual Certification http://www.doe.k12.de.us/infosuites/staff/fedstprog/TitleIPartA/TitleIFILES/SAMPLECERTIFICATION.doc • Required Time and Effort Form http://www.doe.k12.de.us/infosuites/staff/fedstprog/TitleIPartA/TitleIFILES/TimeandEffortLog.xls • Government Support Services equipment disposal http://gss.omb.delaware.gov/surplus/index.shtml

30. Thanks for coming!