Audit Resolution

1. Audit Resolution Debra Jennings, Team C (McPherson) Charles Kniseley, Team B (Gregorian) Lisa Pagano, Team A (Corr) Cynthia Bryant, Team D (Ringer) Deborah Morrow, Special Assistant for Policy and Fiscal Issues (Ryder) Integrated Fiscal Accountability (IFA)

2. Audit resolution process 2 • Single Audit Act requires annual audit - Type A programs ($500,000) and at-risk Type B ($100,000) • Completed audits submitted to Clearinghouse • Clearinghouse disperses audits to agencies • ED Audit Triage group meets monthly to receive new audits and determine whether resolution will be “abbreviated” or “full” Integrated Fiscal Accountability (IFA)

3. Audit resolution process • Resolve 6 Months from date audit report is issued • Timelines and process beginning with 2008 audits • Notify State of receipt within a month • Set up call to discuss findings • Confirm call with email or letter requesting documentation Integrated Fiscal Accountability (IFA)

4. Audit resolution process • Collaborative process • Proactive response from State – as soon as you know what the audit finding will be (usually when you are responding to the draft report from the auditor) • Begin compiling documentation • Develop policies and procedures • Obtain approvals within your Division or Department as required Integrated Fiscal Accountability (IFA)

5. Audit resolution process • When providing documentation to OSEP • Talk to your AF in advance • Clearly indicate the audit (ACN if you have it, such as 02-08-67823) and the specific finding to which it applies • Notify (email or phone) your AF Integrated Fiscal Accountability (IFA)

6. Audit resolution process • PDL within 30-60 days of receipt of documentation – if documentation resolves the finding • If documentation not received in 35 days, MSIP Director will contact State and provide 10 days for response • If documentation is not received in 10 days, the OSEP Director will contact the CSSO and provide 10 days for a response Integrated Fiscal Accountability (IFA)

7. Common Audit Findings (and what to do about them) 7 g Monitoring Examples Evidence of Processes Procedures Policy(ies) Integrated Fiscal Accountability (IFA)

8. Common Audit Findings (and what to do about them) Subrecipient monitoring • Audit standard: SEA must monitor subrecipient’s use of Federal funds through reporting, site visits, regular contact, or other means to ensure legal requirements are met and performance goals achieved. • Documentation for resolution • Policies/procedures related to monitoring • Recent monitoring results • Demonstration of monitoring for programmatic and fiscal requirements Integrated Fiscal Accountability (IFA)

9. Common Audit Findings (and what to do about them) 9 Time and Effort Distribution Audit Standard: • Employees work on a single Federal award - at least semi-annual certifications, signed by the employee or supervisory official. • Employees work on multiple Federal grants, distribution of salaries supported by personnel activity reports that: (a) reflect an after-the-fact distribution of the actual activity of each employee; (b) account for the total activity for which each employee is compensated; (c) be prepared at least monthly and must coincide with one or more pay periods; and (d) be signed by the employee. SeeOMB Circular A-87, Attachment B.8.h.3. Integrated Fiscal Accountability (IFA)

10. Common Audit Findings (and what to do about them) • Documentation for resolution • Policies/procedures related to time and effort distribution • Sample certification forms or time sheets showing how employees distribute their time and effort among grants • Samples of signed certifications or completed time sheets reflecting time and effort distribution Integrated Fiscal Accountability (IFA)

11. Common Audit Findings (and what to do about them) 11 State Maintenance of Financial Support • Audit Standard: A State must not reduce the amount of financial support for special education and related services...below the amount of that support for the preceding year (34 CFR §300.163(a)) Integrated Fiscal Accountability (IFA)

12. Common Audit Findings (and what to do about them) 12 • Documentation for Resolution • Policies and procedures for calculating State maintenance of support • Documentation of calculation of support in preceding year along with documentation of support in preceding year • Documentation of calculation of support in audit year along with documentation of support in audit year Integrated Fiscal Accountability (IFA)

13. Common Audit Findings (and what to do about them) 13 LEA Maintenance of Effort (MOE) • Audit standard: Funds provided under Part B of the Act must not be used to reduce the level of expenditures...below the level...of the preceding year: • Local funds only OR State and local funds (year to year) • Per capita or in total Integrated Fiscal Accountability (IFA)

14. Common Audit Findings (and what to do about them) 14 • Documentation for Resolution • Policies and procedures regarding LEA MOE • Verification of documentation of effort in preceding year • Verification of documentation of effort in audit year • Verification of exceptions under 34 CFR §300.204 • Verification of authority under 34 CFR §300.205 Integrated Fiscal Accountability (IFA)

15. Common Audit Findings (and what to do about them) Timely Obligation/Liquidation of Funds • Audit Standard: In accordance with applicable period of availability requirements, funds appropriated in July of a fiscal year remain available for obligation during the succeeding 27 months with ninety days to liquidate obligations after the period of availability ends. Integrated Fiscal Accountability (IFA)

16. Common Audit Findings (and what to do about them) • Documentation of Resolution • Policies and procedures specifying the period of availability, required documentation and accounting procedures to ensure appropriate obligation/liquidation • Purchase orders, signed contracts or other accounting records of obligations for allowable purposes within the obligation period • Invoices, checks, payroll records or other accounting records demonstrating liquidation within the allowable period Integrated Fiscal Accountability (IFA)

17. Common Audit Findings (and what to do about them) Procurement • Audit Standard: Grantees must follow EDGAR standards intended to ensure effective procurement and compliance with Federal requirements. Standards address responsibilities of grantees, codes of conduct, encouraging competition, establishing written procedures, cost and price analysis, maintenance of records, monitoring contract administration and various other provisions. Integrated Fiscal Accountability (IFA)

18. Common Audit Findings (and what to do about them) • Documentation for Resolution • Policies and procedures that address all required EDGAR provisions (34 CFR §80.36) • Process flow charts, forms reflecting the appropriate requirements/standards • Completed forms documenting the flow chart processes, reflecting implementation of requirements, including appropriate approvals and justifications; evidence of training on revised procedures Integrated Fiscal Accountability (IFA)

19. Common Audit Findings (and what to do about them) Prior Grantor Approval • Audit Standard: According to OMB Circular A-87 (2 CFR Part 225), Attachment B, section 19.2.C, capital expenditures for equipment, including replacement equipment, other capital assets, and improvements which materially increase the value of the useful life of the equipment or other capital asset are allowable as a direct cost when approved by the awarding agency. Federal awarding agencies are authorized, at their option, to waive or delegate this approval requirement. Integrated Fiscal Accountability (IFA)

20. Common Audit Findings (and what to do about them) • Documentation of Resolution • Policies and procedures that require approval from OSEP to purchase items of equipment with a unit price of $5000 or more, for construction or for renovation • RFPs, contracts, purchase orders or other records that document approval and obligations AFTER approval is received • Documentation that expenditures comply with section 605 of IDEA and that expenditures are for allowable purposes Integrated Fiscal Accountability (IFA)

21. Summary 21 • Begin correction upon receipt of audit – don’t wait for OSEP • Focus on the finding – do you need to submit policies/ procedures, evidence of process, evidence of implementation? • Identify appropriate State staff to assist OSEP • Communicate status of resolution activities • Respond to information requests promptly • Request assistance, as needed Integrated Fiscal Accountability (IFA)

22. OSEP Audit Facilitators Team A – Gregg Corr Lisa.Pagano@ed.gov 202-245-7413 Team B – Judy Gregorian Charles.Kniseley@ed.gov 202-245-7322 Team C – Alma McPhersonDebra.Jennings@ed.gov 202-245-7389 Team D – Larry Ringer Cynthia.Bryant@ed.gov 202-245-7284 Fax – 202-245-7614 Deborah.Morrow@ed.gov 202-245-7456 ADDRESS: Office of Special Education Programs U.S. Department of Education 400 Maryland Avenue Washington, DC 20202 ATTN: ------ Integrated Fiscal Accountability (IFA)

23. Electronic Calculators • Appendix A to Part 300 --Excess Costs Calculation • Appendix B to Part 300 --Proportionate Share Calculation • Appendix D to Part 300 --Maintenance of Effort and Early Intervening Services Integrated Fiscal Accountability (IFA)

24. Rationale for Electronic Calculators • To offer a streamline process of researching Federal regulations and appendixes related to each calculation • To provide tools that can be easily referenced • To offer easy access to LEAs and SEAs • To serve as resources for LEAs and SEAs Integrated Fiscal Accountability (IFA)

25. Calculators Features • Data is presented in an application format • Allows users to access regulations as they use calculators • Large amount of data can be consolidated and displayed in one view, using graphics like gauges and thermometers • Ability to predict and forecast by using “what if” scenarios • Visual effects that allow users to see impact as numbers change Integrated Fiscal Accountability (IFA)

26. Calculators Features – Continued • Allows the integration of specific Q & A from the Part B ARRA April 2009 Guidance • Can be adjusted to reflect more Federal regulations and State Statutes and Procedures Integrated Fiscal Accountability (IFA)

27. Calculators Links • Proportionate Share: http://www.northcentralrrc.org/calculators/Proportionate%20Share%20Calc%20v1.swf • MOE-EIS: http://www.northcentralrrc.org/calculators/MOE%20EIS%20Calc%20v1.swf • Excess Cost: http://www.northcentralrrc.org/calculators/Excess%20Cost%20Calc%20v1.swf Integrated Fiscal Accountability (IFA)

28. Other MOE Calculators Wisconsin Department of Public Instruction http://www.dpi.state.wi.us/sped/idearecovery.html Contact Information: Rachel Zellmer, IDEA Grant Specialist Email: Rachel.Zellmer@dpi.wi.gov Mark Magnuson, IDEA Grant Accountant Email: Mark.Magnuson@dpi.wi.gov Integrated Fiscal Accountability (IFA)

29. Other MOE Calculators State of Washington Office of Superintendent of Public Instruction http://www.k12.wa.us/safs/TT/tools.asp Contact Information Mary Ellen Parrish, Special Education Safety Net Supervisor Email: MaryEllen.Parrish@k12.wa.us Integrated Fiscal Accountability (IFA)

30. Contact Information Contact Information: Michael Luseni, State Technical Assistance Specialist Email: Luse0002@umn.edu Phone: 612-625-2388 Integrated Fiscal Accountability (IFA)