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Federal Program and Fiscal Compliance

Federal Program and Fiscal Compliance. LEA Administrative Responsibilities. An LEA shall comply with applicable statutes, regulations, and approved applications. An LEA shall use federal funds in accordance with those statutes, regulations, and applications. EDGAR § 76.700

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Federal Program and Fiscal Compliance

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  1. Federal Program and Fiscal Compliance

  2. LEA Administrative Responsibilities • An LEA shall comply with applicable statutes, regulations, and approved applications. • An LEA shall use federal funds in accordance with those statutes, regulations, and applications. EDGAR § 76.700 • An LEA shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for federal funds. EDGAR § 76.702

  3. Program Compliance: Monitoring • SEAs are responsible for managing the operations of LEA supported activities in order to verify compliance with federal requirements. • Types of monitoring include: • HQT (all districts annually) • Consolidated Title I monitoring, three year cycle (approximately 194 districts annually)

  4. Program Compliance: Evaluation • LEAs must meet the evaluation requirements of the specified program. • Types of evaluation include: • McKinney-Vento, End of the Year Grant Cycle Evaluation • Neglected and Delinquent • MSP Annual Performance Report

  5. Program Compliance: Reporting • A SEA may require a LEA to submit reports in a manner and format that assists the SEA in complying with the requirements and responsibilities under each program. • Title I Annual Report • Comparability Report • Neglected and Delinquent • Private School Information • Low-Income Student Count/Community Eligibility • Title I District Plans (every 5 years) • Schoolwide Plans

  6. Fiscal Compliance • Three requirements are critical to the success of Title I, Part A because they ensure that the Federal investment has an impact on at-risk students the program is designed to serve. The focus is on the use of state and local resources to ensure there is a fair distribution of resources between Title I schools and non-Title I schools. • Maintenance-of-Effort • Comparability • Supplement, not Supplant

  7. Maintenance-of-Effort • At the district level • A provision which requires that an LEA maintain a 90% level of it’s expenditures for public education from State and local funds from one year to the next. The federal government allows three different ways to calculate Maintenance of Effort for NCLB. A LEA meets MOE on either their average daily attendance (ADA), enrollment, or expenditures based on the 90 percent rule)

  8. Failure to Meet Maintenance-of-Effort • If an LEA fails to meet the MOE requirement, the SEA must reduce the amount of funds allocated under certain federal programs in the exact proportion by which the LEA fails to maintain. • For example, in FY2013 an LEA had to expend no less than 90% of what it expended in FY2012 in order to maintain effort. If the LEA failed below 90%, its FY2015 federal allocations are reduced by the percentage the LEA failed.

  9. Waiver The Secretary may waive the MOE requirement if it is determined that: • Exceptional or uncontrollable circumstances such as a natural disaster; or • A precipitous decline in the financial resources of the LEA.

  10. Comparability Requirement At the building level • Comparability requires that LEAs be able to document that services provided with state and local funds in Title I schools are comparable to those provided in non-Title schools or if an LEA serves all of its schools with Title I funds, the LEA must use state and local funds to provide services that, taken as a whole, are “substantially comparable” in each school. [Section 1120A(c)(B)] • The Comparability requirement does not apply to an LEA that is a single site district, that is, no “like” schools to compare.

  11. Comparability Measure • Based on Student/Teacher Ratio • By category, elementary, middle, high school • Comparing the total average non-Title I student/teacher ratio to each Title I site or if all sites are Title I, then the average student/teacher ratio is compared to each Title I site.

  12. Compare Non-Title to Title I

  13. Compare Title I to Title I

  14. Developing Procedures for Compliance An LEA must develop procedures for complying with the Comparability requirements. [Section 1120A(c)(3)] These procedures should be in writing and should, at a minimum, include the LEA’s timeline for demonstrating comparability, identification of the office responsible for making comparability calculations, the measure and process used to determine whether schools are comparable, and how and when the LEA makes adjustments in schools that are not comparable.

  15. Supplement not Supplant • At the student level • Ensures services provided with Title I resources cannot replace, or supplant, services that an LEA would ordinarily provide to all students.

  16. Fiscal Flexibility Options • Transferability- allows LEAs to transfer up to 100% of the funds they receive under certain Federal programs to other programs that can more effectively address the district’s needs. However, there is a limitation on the 100 percent transferability for Title II, Part A funds. ESEA Section 9501(b)(3)(B) requires an LEA to provide, at a minimum, equitable services to private schools teachers and students based on an amount of the LEA’s overall allocation under Title II, Part A. • Consolidated Administrative Funds- allows LEAs to consolidate 5, 7, or 8 percent (based on ADA) of its funds to a unique project code in order to carryout administrative duties.

  17. Period of Availability of Funds • LEAs must obligate funds during the 27 months extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12-month period for carryover. This extra 12 months is known as the Tydings period.

  18. Period of AvailabilityCurrent Year, 1st Year, 2nd Year Funds • Period of availability for FY2012 funds for school year 2011-2012 is 27 months, beginning July 1, 2011 and ending September 30, 2013. Example Current year funds are FY2012 funds in FY2012 7/1/11-6/30/12 12 months LEA 1st year carryover funds are FY2012 funds in FY2013 7/1/12-6/30/13 12 months LEA 2nd year carryover funds are FY2012 funds in FY20147/1/13-9/30/13 3 months 27 months

  19. Period of AvailabilityCurrent Year, 1st Year, 2nd Year Funds

  20. Carryover Funds • Section 421(b) of the General Education Provisions Act (GEPA) states, an LEA that does not obligate all of the Title I, Part A funds allocated to it for a given fiscal year may carryover the unobligated funds and obligate them during the following fiscal year. • Although the Tydings amendment extends the period for obligating funds for an another 12 months, Section 1127(a) of the ESEA limits the amount an LEA can carryover from one fiscal year to the next.

  21. 15% Carryover Limitation • An LEA that receives $50,000 or more in Title I, Part A current year funds cannot carry over beyond the initial 15 months more than 15 percent without first being granted a waiver. • An SEA may grant a waiver of the 15% limitation once every three years if the LEA’s request is reasonable and necessary.

  22. 9/30 ReportingLEAs that carry over more than 15 percent of their Title I funds must request a waiver and complete the 9/30 Report.

  23. Independent Audit Findings • Since August 2014, Federal Programs has received 41 LEA 2013 audit findings from the Financial Accounting Office. • Common Findings • OCAS data overstated/understated did not match amount actually paid from the federal program • Equipment purchased with federal funds not properly labeled as required by federal program guidelines (OMB A-87) • Time and Effort (Incomplete or no T/E Records) • Corrective Action Response • May require LEA to provide additional information/documentation

  24. Independent Audit Findings Major Audit Finding of one LEA in FY2013 • LEA did not prepare employee contracts for most of it’s employees • One employee was paid a $10,000 extra duty stipend instead of the approved $1,000 amount due to an input error (overpaid $9,000) • District supervisors are allowed discretion in establishing the pay step to start new support staff. The step is verbally communicated to the payroll clerk. • Time records are not always maintained for extra duty items paid to support staff, time records were not always signed by a supervisor, and time records could not be located for a few specific payments that were tested. • Sick leave/vacation leave information in the district’s software doesn’t appear to be accurate. • 6 of 27 purchases tested in the activity fund had invoices dated before the purchase requisition. Appears the items were purchased before the purchase was approved.

  25. Independent Audit Findings • Sponsors are not issuing pre-numbered receipts for monies they collect. Auditors not able to trace receipts from the point of collection through to the deposit. • The district did not issue prenumbered thickets for admissions to events nor did they prepare a reconciliation of tickets sold to collections. LEA did not have any procedures to ensure proceeds were deposited. • The outstanding encumbrances amounts was changed several times after June 30, but before OCAS data was finalized. Major Federal Award Programs Audit • As of January 28, 2014, the district’s 2011-2012 audit report was not listed on the Federal Audit Clearinghouse website. • The district did not maintain “Time and Effort” certifications for its Title I program.

  26. Specific Requirements for Time and Effort Time and effort reporting is required under the Federal Office of Management and Budget’s Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments 1. An employee who works a 100% from a SINGLE program (single cost objective) must report: • Semi-annual certification, that they “worked solely on that program for the period covered by the certification (e.g. Jul 1-Dec 30 and Jan 1- Jun 30). • The certification must be signed by the employee and knowledgeable supervisor. 2. An employee whose work is split between more than one federal program (multiple cost objectives) must report: • Personnel Activity Reports that accurately reflects the percentage of time/hours the employee spendsperforming the federal work activity and any other duties. • Report must reflect an “AFTER-THE-FACT” distribution of actual activities performed • Account for TOTAL activity for which employee is compensated • Must be completed at LEAST MONTHLY (e.g. Jan 1 – Jan 30) • Be signed by the employee and knowledgeable supervisor

  27. T/E Single Program

  28. T/E Multiple Programs

  29. HELPFUL LINKS • Education Department General Administrative Regulations (EDGAR) • Non-Regulatory Guidance, Title I Fiscal Issues: Maintenance of Effort, Comparability, Supplement, Not Supplant, Carryover, Consolidating Funds in Schoolwide Programs, and GrantBack Requirements, Revised 2008 • Maintenance of Effort Calculation Check Page can be found on the OSDE website in the Oklahoma Cost Accounting System (OCAS) Manual • Time and Effort Information (Federal Programs link)

  30. CONTACTS For technical assistance, contact Kay Townsend in the Federal Programs office at (405) 522-3254 or email: kay.townsend@sde.ok.gov.

  31. Questions???

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