EDGAR for New Federal Program

1. EDGARfor New Federal Program Brande Bass Director Federal/Special Programs New Caney ISD

2. Objectives today • Where did EDGAR come from. • How does EDGAR relate to a State and Federal Programs Director? • How can you “survive” so many sets of guidance and rules to follow? • What is the key to putting it all together? • Communication across your district.

3. WHO? Education Department General Administrative Regulations EDGAR

4. Acronyms • Non federal entity – School District • CFR – Code of Federal Regulations • OMB – Office of Management and Budget • UGG – Uniform Grant Guidance

5. EDGAR Educational Department General Administrative Regulations The parts of EDGAR that apply to all agencies receiving federal education funds. • 34 CFR Part 75—Direct Grant Programs • 34 CFR Part 76—State Administered Programs • 34 CFR Part 77—Definitions that apply to Department Regulations • 34 CFR Part 81—General Education Provisions Act Enforcement

6. Uniform Guidance 2 CFR Part 200 • The Uniform Administrative Requirements • Cost Principles • Audit Requirements for Federal Awards • (Uniform Guidance) 2 CFR Part 200 • May also be referred to as: • The new super circular • Uniform Grant Guidance (UGG) • Uniform Guidance (UG) • 2 CFR 200 Putting all the OMB Circulars into one document

7. Uniform Guidance • Subparts A-F • Subpart A – Acronyms and Definitions • Subpart B – General Provisions • Subpart C – Pre-Federal Awards Requirements & Contents of Federal Awards • Subpart D – Post- Federal Awards Requirements • Subpart E – Cost Principles • Allowable cost organized by topics • Subpart E – Audit Regulations • Audit requirements

9. 2 CFR PART 3474—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS • Adoption of 2 CFR Part 200 • Exceptions • Clarifications • Contracting with Faith Based Organizations • Non-Discrimination

10. Here is the “Formula” for EDGAR! Education Department General Admin Regulation 34 CFR 75, 76, 77 & 81 + Uniform Guidance 2 CFR 200 (UGG, UG, New Super Circular) + Uniform Admin Procedures 2 CFR 3434 = EDGAR

11. Edgar & Title 2 CFR Part 200 (Uniform Guidance) • Go to ED.GOV website to view the full EDGAR publication. • https://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html • You can also go to TEA’s website and download their PDF version. • https://tea.texas.gov/Finance_and_Grants/Grants/EDGAR_Materials_and_Resources/

12. Brief Overview of EDGAR Why was EDGAR changed? • Reduce fraud, waste, and abuse • Simplicity and consistency • Executive order 13563 on regulatory review: • Increase efficiency • Strengthen oversight • Performance Focus

13. Major Changes in Federal Grants Management • Focus on outcomes • Performance Metrics • Risk Assessments • Financial Management Policies • Equipment Use

14. Uniform Guidance Subpart B—General Provisions Uniform Guidance Subpart A—Acronyms and Definitions • Cooperative Audit Resolution 200.25 • Cost Objectives 200.28 • Equipment 200.33 • Supplies 200.94 • Conflict of Interest 200.112 • Mandatory Disclosures 200.113

15. Uniform Guidance Subpart C—Pre-Federal Award Requirements and Contents of Federal Awards • Requirements of Pass-through Entities 200.205 Uniform Guidance Subpart D—Post Federal Award Requirements • Financial Management Rules 200.302 • Procurement (Purchasing) 200.317-200.326 • Property Management 200.329

16. Uniform Guidance Subpart E—Cost Principles • Factors Affecting Allowability of Costs 200.403 • Selected Items of Cost 200.420-200.475 • Time and Effort Documentation 200.430

17. SubrecipientMonitoring • New EDGAR strengthens oversight of federal grantees • Increases subrecipient monitoring and technical assistance • Focuses on grantee responsibilities to demonstrate project success and financial accountability

18. Uniform Guidance Subpart F—Audit Requirements • General Audit Requirements 200.501 • Audits Required • Single Audit Reports • Program Specific Audits • Exemption from Audits (All Federal Awards less than $750,000) • Federal Agency Responsibilities 200.513 • Audit Findings 200.516

19. Appendices I - XI • Appendix II to 2 CRF Part 200— • Contract Provisions for Non-Federal Entity (District) Contracts Under Federal Awards • Contracts • Equal Employment Opportunity • Davis-Bacon Act • Contract Work & Safety Standards • Rights to Inventions Made Under a Contract • Clean Air Act • Debarment & Suspension • Byrd Anti-Lobbying Amendments • Procurement of Recovered Materials (CFR 200.322)

20. How does EDGAR relate to a State and Federal Program Director? EDGAR has everything that a Federal Program Director needs to run a compliant federal education program.

21. Determining Allowability of Costs • Allowability, allocability, and reasonableness of costs directly address the legitimacy of a cost charged against a specific grant. • You are responsible for ensuring that costs charged to a sponsored grant are allowable, allocable, and reasonable. • Each financial transaction charged against a grant is evaluated against these three concepts. • Allowability CFR 200.403 • Allocability CFR 200.404 • Reasonableness CFR 200.405

22. Determining Allowability of Costs • Allowability: Expenses charged to a grant award must meet the following allowability criteria: • (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. • (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. • (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. • (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.

23. Determining Allowability of Costs • (e) Be determined in accordance with Generally Accepted Accounting Principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. • (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also §200.306 Cost sharing or matching paragraph (b). • (g) Be adequately documented. See also §§200.300 Statutory and national policy requirements through 200.309 Period of performance of this part.

24. Determining Reasonableness of Costs • Reasonableness: A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. • For a charge to be reasonable, consideration should be given to: • Necessary expenditure for the operation of the grant • Followed established policies and procedures • The evaluation by prudent individuals during audits

25. Determining Allocability of Costs Allocability:Has the cost has been incurred solely to support or advance the work of a the grant. • A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.

26. EDGAR and Compliance • EDGAR regulations cover all the compliance measures that Federal Program directors must meet for the following: • Financial Management • Application process • Procurement (Purchasing) • Inventory management • Time and effort • Allowability • Record retention • Program oversight • Audit resolutions

27. EDGAR and Compliance • The new EDGAR requires districts to request approval from or provide justification to TEA before taking certain actions involving grant funds. • TEA has developed forms for LEAs to use in requesting approval or providing justification. Other forms are also available to justify specific costs. http://tea.texas.gov/Finance_and_Grants/Grants/Administering_a_Grant/Request_for_Prior_Approval,_Disclosure,_and_Justification_Forms/ • Forms are submitted with some grant applications or maintained locally, as specified in the application's program guidelines.

28. EDGAR and Compliance • 34 CFR Part 76.707 • When obligations are made. • (Put this table in your State/Federal Grant manual.)

29. EDGAR and Compliance • 34 CFR Part 76.730 • Records related to grant funds – keep all of them! • Electronically! • Includes Micro Purchases ($10,000) •  Think of record retention as the story that explains where the Federal funds went when no one is there to remember. • Records that demonstrate efforts at compliance, monitoring, and program achievements are all items that need to documented and retained for future reference.

30. EDGAR and Compliance • Conflict of interest - 2 CFR Part 200.112 • The non-Federal entity (District) must disclose in writing any potential conflict of interest to the Federal awarding agency. • 2 CFR Part 200.113 • Mandatory Disclosure • The non-Federal entity must disclose, in a timely manner, in writing to the Federal awarding agency or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. • EDGAR FAQ: 1.2-1.22-7.29-9.5

31. EDGAR and Compliance • §200.213   Suspension and debarment. • Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, sub-awards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. • EDGAR FAQ: 7.25-9.9 • You can monitor this at: (SAM) System for Award Management -  You can do a “Quick Search” under Search Records Auditors ask for these “SAM” documents to prove that you have done the search. Print them off the day you purchase items from vendors. The date and time will print on your printer to prove you did a timely search. • https://www.sam.gov/portal/SAM/##11

32. EDGAR and Compliance • 2 CFR Part 200.302 • Financial Management • (4) Effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. See §200.303 Internal controls. (Even less than $5000) • (5) Comparison of expenditures with budget amounts for each Federal award. **** • (6) Written procedures to implement the requirements of §200.305 Payment. • (7) Written proceduresfor determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the Federal award. (Program Allowability) • A complete list of all required written policies and procedures is contained in Appendix 1. • Be sure that you date policies and procedures when they are reviewed and updated. • EDGAR FAQ: 3.10

33. EDGAR and Compliance • 2 CFR Part 200.305 • Payment • (9) Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. • Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually. • EDGAR FAQ: 9.10

34. EDGAR and Compliance • 2 CFR Part 200.313 • Equipment • c(2) During the time that equipment is used on the project or program for which it was acquired, the non-Federal entity must also make equipment available for use on other projects or programs currently or previously supported by the Federal Government • d(2) A physical inventory of the property mustbe taken and the results reconciled with the property records at least once every two years. (Written Inventory Policy) • EDGAR FAQ: 1.7 – 1.8 - 1.12 – 1.13 – 1.14 – 1.15 – 9.11

35. EDGAR and Compliance • 2 CFR Part 200.318 • General Procurement Standards • (a) The non-Federal entity must use its own documented procurement procedures; • (c)(1) The non-Federal entity must maintain written standards of conduct covering conflicts of interestand governing the actions of its employees engaged in the selection, award and administration of contracts. • EDGAR FAQ: 1.22

36. Purchasing through Purchasing Cooperatives • Districts must have an agreement with the purchasing cooperative. • Once it has been verified that the purchasing cooperative has followed the most restrictive of the state or federal procurement rules, the LEA may enter into an agreement with the purchasing cooperative to purchase goods and services directly, without any additional procurement activities or documentation. This verification is to be conducted annually, preferably at the beginning of the grant period. • Districts must ensure that the purchasing cooperative is in compliance with both state and federal procurement requirements. • The subrecipient must use its own documented procedures which reflect the most restrictive applicable federal, state, or local policy. • The subrecipient must maintain proper documentation of the general procurement standards identified in 2 CFR 200.318. • Documentation of verifying the purchasing cooperative followed the appropriate rules could be a simple as maintaining a signed certification statement or an email stating that the rules were followed. • EDGAR FAQ: 7.14, 7.21, 7.36-7.37, 7.41

37. EDGAR and Compliance • 2 CFR Part 200.319 • Competition • (a) All procurement (purchasing) transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. • 7(b) The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. • EDGAR FAQ: 7.11 – 7.15 – 7.16 – 7.17 – 7.20 – 7.30 – 7.40 – 7.44 - 7.45 – 9.4

38. EDGAR and Compliance • 2 CFR Part 200.320 • Methods of Procurement to be followed can be found in Appendix 2 • Have you updated your State/Federal grant manual to include the new Micro-purchase limit? • New Micro-Purchase limit is $10,000 • Note: The threshold of $10,000 must be considered in the aggregate over the entire period of applicable federal grants. Therefore, the cost of items purchased using the micropurchase method is cumulative across the grant year and cannot exceed a total of $10,000.

39. Micro Purchase Example • You purchase $2000 worth of highlighters with federal funds for campuses at the beginning of school. • You purchase another $2000 worth of highlighter for campuses in November. • You purchase another $7000 worth of highlighters for campuses in February. • Aggregate over the year: $2000 + $2000 + $7000 = $11,000 • You have exceeded the micro purchase for highlighters for the year.

40. EDGAR and Compliance • Small purchase procedures - As of July 1, 2018, the simplified acquisition threshold increased from $150,000 to $250,000. • The $250,000 threshold should be considered as an aggregate amount within the grant period of the applicable grant. • However, Texas Education Code (TEC) 44.031 requires competitive procurement methods be used for purchases valued at $50,000 or more. • If an item costs less than $50,000, state rules allow an LEA to utilize price quotations to stimulate competition and to attempt to receive the most favorable pricing. • Therefore, since TEC 44.031 is more restrictive than the EDGAR procurement rules, the simplified acquisition threshold under EDGAR does not apply to purchases made with federal funds costing $50,000 or more. • EDGAR FAQ: 7.5

41. EDGAR and Compliance • Sealed bids • Competitive proposals • 2 CFR Part 200.320 (continued) • Methods of Procurement to be followed • (f) Procurement by noncompetitive proposals. Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply: (Sole Source) • TEA EDGAR FAQ: • 7.11 – 7.16 – 7.17 – 7.18 – 7.35 – 7.40 - 9.4

42. EDGAR and Compliance • Cost price analysis should be performed for all purchases exceeding $250,000 (200.323) • Cost or Price Analysis is basically what it says - analyzing the cost or price of the purchase based on what the district had anticipated the cost of the procurement to be, and what the price or prices are as submitted by the vendors. • This is only required if the contract purchase will be at or above $250,000 and requires the district to provide the required federal documentation to support the award. • TEA FAQ: 7.1 -7.2

43. Sole Source 1. The item is available only from a single source. 2. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation. 3. The federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-federal entity. 4. After solicitation of a number of sources, competition is determined inadequate.

44. Sole Source Justification Questions • Describe the proposal, and explain the rationale for making it noncompetitive. • Do you have a sole-source verification letter from the proposed vendor? • Does this make them a sole source? • NO: An affidavit or sole source letter is not sufficient documentation that the item or service is only available from a single source. Attorneys have indicated that under the new regulations, sole source must be proven and adequately documented, and will seldom be used in federal procurements. • Do not accept sole source letter to award noncompetitive procurement • How many vendors have been contacted for price quotes that led you to determine that there is only a sole source? • How many times did you request quotes? How do you document this? • Provide a reason that this procurement is a noncompetitive or sole-source procurement. • What is your “proven and adequate documentation”?

45. EDGAR and Compliance • 2 CFR Part 200.335 • Methods for collection, transmission and storage of information • The non-Federal entity should, whenever practicable, collect, transmit, and store Federal award-related information in open and machine readable formats rather than in closed formats or on paper……

46. EDGAR and Compliance • 2 CFR Part 200.406 • Applicable Credits • (a) Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the Federal award as direct or indirect costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges.To the extent that such credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate.

47. EDGAR and Compliance • 2 CFR Part 200.413 • Direct Cost • 2 CFR Part 200.414 • Indirect Cost

48. EDGAR and Compliance • 2 CFR Part 200.415 • Required Certifications • (a) To assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets, the annual and final fiscal reports or vouchers requesting payment under the agreements must include a certification, signed by an official who is authorized to legally bind the non-Federal entity (District), which reads as follows:

49. EDGAR and Compliance “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code Title 18, Section 1001 and Title 31, Sections 3729-3730 and 3801-3812).”

50. EDGAR and Compliance • 2 CFR Part 200.430 • Compensation – Personal Services(Time and Effort) 8(i) Standards for Documentation of Personnel Expenses • (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • (ii) Be incorporated into the official records of the non-Federal entity; • (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity (District), not exceeding 100% of compensated activities • (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity (District) on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's (District’s) written policy; • (v) Comply with the established accounting policies and practices of the non-Federal entity (District). • EDGAR FAQ: 8.1 through 8.10 and 9.3