Procedures, Processes and Programs - The 3 P's of Grant Monitors

1. Procedures, Processes and Programs - The 3 P's of Grant Monitors Becky Bunte, CTSBO, SFO, Chief Financial Officer/Director of Professional Development Tom Canby, Director of Research and Technology TASBO Association for Compensatory Educators of Texas October 2011

2. Why is a Business Operations Manual so Important? • Communicates processes to stakeholders • Great training tool for cross-training and/or new staff • Facilitates the implementation of internal controls • Recent ARRA Audit Findings • Lack of policies and procedures

3. Development & Implementation Tips • Perform a Gap Analysis of your current Manual or obtain a template as a starting point • Review and incorporate local board policies & administrative regulations • Obtain Stakeholder input • Modify existing forms to match current operating procedures • Provide training for campus and department staff • Post Operations Manual on Intranet with links to forms

4. Gap Analysis of Current Manual • What does your Manual Include? • Does it include all local, state, or federal compliance areas? • References: Transparency Mandates on School Districts, TASB, January 2011 • Financial Mandates on School Districts Update 1, TASBO, September 2011

5. Gap Analysis of Current Manual • Example: State/Federal Requirements • Comprehensive Needs Assessment • District and Campus Improvement Plans • Monthly Time & Effort/ 6 Month Certification • Comparability • MOE • Supplement vs. Supplant • Expenditure Reports • Grant Application Procedures • Capital Projects • Allowable Costs

6. Time & Effort Procedures • Work Flow Process

7. Sample Template – Revenue & Cash Management • Revenue • Local – Such as NSLP Meal Receipts, Property Taxes, Donations, Vending machines, etc • State – Special Program Allotments, HS Allotment, State Grants, etc. • Federal – SHARS, MAC, NSLP, Federal Grants, etc. • Cash Management • Investments • Collateral • Depository Bank Contract • Bank Account Reconciliations • Cash Handling Procedures – Bank Deposits, Returned Checks, Storing Money • Tracking and Recording Receivables

8. Sample Template – Expenditures • Purchasing Overview • Bid Laws and Process • Vendor Requirements – Conflict of Interest, Felony Conviction, Insurance • Requisitions – Approval Path • Purchase Orders – Approval Path • Contract Approval and Management • Payments to Vendors (Accounts Payable Functions) • Purchasing with Credit Cards or Procurement Cards • Security of cards, authorized users, authorized purchases, monitoring charges • Travel Expenditures • Fixed Assets/Equipment Inventory Tracking • Miscellaneous Purchases: Internet, Memberships, Sales Tax, Incentives/Awards, Petty Cash

9. Sample Template – Special Revenue Funds • State and Federal Grants • Internal Controls • Supplement vs. Supplant • Time and Effort Process • Preparing Expenditure Reports and Draw downs • Documentation of Allowable Costs • Grant-Specific Requirements • List all grants and specific requirements

10. Review & Incorporate Local Board Policies & Admin. Proc. • CAA – Financial Ethics • CFB – Capital Assets & Inventories • CFD – Activity Funds • CE – Fiscal Year & Budget • CH – Purchasing • DEE – Travel Expenses • GKD – Use of Facilities

11. Obtain Stakeholder Input • Business Office Staff • Most valuable input • Superintendent & Administrative Staff • Principals & Directors • Finance, Audit or other committees, if any

12. Modify existing forms • Insure that all forms correspond to operating procedures

13. Provide training • Provide training for professional and support staff • Business Office Staff • Central Administrative Staff • Campus Staff • Department Staff

14. Post Business Operations Manual • Easy access by all staff • Streamlined distribution – can request a sign-off sheet • Consistent information rather than outdated paper copies • Link all forms for quick access & quality copies

15. Federal and State Monitoring Visits • Areas reviewed in Federal monitoring visits include • Planning • District and campus improvement plans • Allowable Charges • Period of Availability • Cash management • Internal controls • Supplement Not Supplant

16. Campus and District Improvement Plans

17. District and Campus Improvement Plans • Section 11.252, TEC • Basis for expenditure of State Compensatory Education Allotment and federal grants on schoolwide campuses

18. District and Campus Improvement Plans Con’t…. • Comprehensive needs assessment - conducted to identify the strengths and weaknesses of existing programs, practices, procedures, and activities

19. District and Campus Improvement Plans Con’t…. • Total amount of state compensatory education funds allocated for resources and staff • Identified strategies - aligned with the comprehensive needs assessment • Supplemental financial resources for state compensatory education

20. District and Campus Improvement Plans Con’t…. • Supplemental FTEs for state compensatory education (This is not necessary if the schoolwide campus is at or above 40% low-income and is combining SCE funds to support their Title I, Part A educational program.)

21. District and Campus Improvement Plans Con’t…. • Measurable performance objectives - stated in terms of what the student is expected to do and stated in terms of measurable and/or observable behavior to ensure that the plan is resulting in academic improvement

22. District and Campus Improvement Plans Con’t…. • Timelines for monitoring strategies and reaching goals – specific schedule for data collection during the school year

23. District and Campus Improvement Plans Con’t…. • Formative and summative evaluation criteria - Formative evaluation includes periodic measures that are utilized during the actual implementation of the interventions or strategies. The summative evaluation occurs at the end of the implementation period, to provide the overall project and process evaluation.

24. Onsite Review – Request for Documents • An electronic copy of: • Locally developed and approved accounting policy and procedures manual implemented during the school year. • Policy Manual - identify the specific policies and procedures directly related to the administration of the grant. • Clearly identify general accounting and administrative policies and procedures pertaining to: • contracts for professional and other services, • purchasing, • time and effort, and • travel and other employee expense reimbursements.

25. Onsite Review – Request for Documents • Organization Chart • Human Resources Manual and Procedure Manual • Chart of Accounts • Draft working document for budget and budget amendments • The summary and source documentation (i.e.., needs assessment, plans, allocations, etc.) that supports the development of the information submitted on the grant applications.

26. Procedures and Processes

27. Procedures • OMB Circular A-87 Time and Effort Requirements • Do procedures describe the circumstances under which personnel will be required to prepare periodic certifications or personnel activity reports? • Do procedures prescribe the form and content of a periodic certification or personnel activity report? • Do procedures require that the employee disclose an after the fact distribution of 100 percent of the actual time spent on each activity and each fund source on the personnel activity reports?

28. Procedures • Do procedures prescribe the frequency of the periodic certifications (e.g., semi-annually, grant funded staff and child nutrition program staff) and personnel activity reports (e.g.. monthly) to coincide with each pay period? • Do procedures require that both the employee and immediate supervisor sign and date the periodic certification and personnel activity report?

29. Procedures • Do procedures require that each employee and their immediate supervisor sign and date a detailed job description? • Do procedures require each job description to describe the work performed by the employee for each program/fund source? • Do procedures require the preparation of an internal accounting record for each position that identified the individual employed, their functional title, and the amount of their salary and other compensation charged to each local, state or federal fund source/program?

30. Procedures • Do procedures require that the personnel department authorize all changes to the payroll master file?

31. Procedures • Are there written procedures describing the process district personnel are required to follow for the expenditure of grant funds for professional and contracted services?

32. Procedures • Do the subrecipient's policies incorporate procedures to ensure that contracted services are allowable under the applicable statute, regulations and other requirements? • Is a higher level of approval for contracts that are over a certain dollar threshold required? If so, what is the dollar threshold? • Is competitive bidding required for all major procurement? • Is the function tor solicitation and evaluation of bids separate from the contract award process? • Do the subrecipient's policies incorporate procedures for contract monitoring to ensure goods/services are received\performed? • Do the subrecipient's policies and procedures incorporate directives for reviewing a contractor's past performance prior to the award of a contract?

33. Procedures • Do the subrecipient's policies and procedures describe how it identified qualified professionals and other contractors (e.g., it solicited bids or proposals)? , • Do the subrecipient's policies and procedures describe when it required signed contracts (e.g., when a contractor was hired for more than one month and the total contract was for more than $500.00)? • Do the subrecipient's policies and procedures describe what third-party documentation (e.g., invoices) was required to support the disbursement of funds? • Do the subrecipient's policies and procedures describe the degree to which the contractor should describe the goods and/or services provided to the subrecipient (e.g., the dates, total hours and number of students to whom the contractor provided therapy)?

34. Procedures • Do the subrecipient's policies and procedures require subrecipient personnel to document the receipt of goods and/or services on the purchase order, invoice or other record? • Do the subrecipient's policies and procedures describe the degree to which the contractor should describe the goods and/or services provided to the subrecipient (e.g., the dates. total hours and number of students to whom the contractor provided therapy)?

35. Procedures • Did the subrecipient have written policies and procedures that described the process that subrecipient personnel must follow for the expenditure of grant funds for supplies and materials and miscellaneous operating costs?

36. Procedures • Do the subrecipient's policies and procedures describe its purchase requisition and purchase order system? • Do the subrecipient's policies and procedures identify the individual(s) responsible for initiating and approving transactions (i.e.. purchases) and the disbursement of funds? • Do the subrecipient's policies and procedures describe what third-party documentation (e.g., invoices, receipts) was required to support the disbursement of funds?

37. Procedures • Do the subrecipient's policies and procedures require that invoices include the detail of the work that was performed or items purchased? • Do the subrecipient's policies and procedures require that subrecipient personnel document the receipt of goods on the purchase order, a receiving report, or other record? • Do the subrecipient's policies and procedures require that any items missing, damaged or otherwise not received or rejected goods were properly identified? • Do the subrecipient's policies and procedures require that subrecipient personnel compare the marked purchase order, receiving report or other record to the vendor's invoice to ensure that the vendor did not charge the subrecipient for items not received or rejected?

38. Procedures • Does the subrecipient have written policies and procedures that described the process that subrecipient personnel were required to follow for the expenditure of grant funds for personal property?

39. Procedures • Do the subrecipient's policies and procedures ensure that contracted services are allowed under the Recovery Act? • Do the subrecipient's policies and procedures describe the circumstances under which the subrecipient must follow competitive bidding requirements? • Do subrecipient’s policies and procedures describe the competitive bidding process?

40. Procedures • Do the subrecipient's policies and procedures identify property management policy (e.g., all inventoried property will receive a property ID and be recorded in the grantee's property management records)? • Do the subrecipient's policies and procedures require the filing of written correspondence with the TEA regarding personal property acquired with grant funds in which it requested instructions from the TEA for the disposal of the property? • Do the subrecipient's policies and procedures require the filing of written correspondence with the TEA regarding personal property acquired with grant funds in which it requested instructions from the TEA for the disposal of the property?

41. Procedures • Did the subrecipient have written policies and procedures that described the process that subrecipient personnel were required to follow for the expenditure of grant funds for the reimbursement of expenses incurred by an employee?

42. Procedures • Do the subrecipient's policies and procedures describe the types of expenses that it would reimburse to an employee? • Do the subrecipient's policies and procedures describe the reimbursement process, including the authorization necessary prior to the expenditure of grant funds and the subsequent approval of any expenditure that exceeded the approved amount? • Do the subrecipient's policies and procedures identify the required forms and third-party source records? • Do the subrecipient's policies and procedures describe the consequence for failing to adhere to the subrecipient's requirements (e.g., the amount requested shall not be reimbursed)?

43. Procedures • Did the subrecipient have written policies and procedures that described the process that subrecipient personnel were required to follow for the expenditure of grant funds through corporate accounts and/or revolving lines of credit?

44. Procedures • Did the subrecipient have written policies and procedures that described the process that subrecipient personnel were required to follow for the expenditure of grant funds through corporate accounts and/or revolving lines of credit?

45. Procedures • Do the subrecipient's policies and procedures permit the use of corporate accounts (e.g., VISA) and/or revolving lines of credit (e.g., Office Depot account) for the purchase of supplies and materials and miscellaneous operating costs, including travel expenses? • Do the subrecipient's policies and procedures identify who was authorized to use this type of account? • Do the subrecipient's policies and procedures have established criteria for identifying who purchase cards were distributed to?

46. Procedures • Do the subrecipient's policies and procedures describe how control was maintained over the account(s) (e.g., the subrecipient required the business manager to maintain the charge card in a safe deposit box in the business office and a log of who used the charge card and the amount that person was authorized to charge; e.g., subrecipient personnel were personally responsible for charges on corporate accounts and had to file a reimbursement from with original itemized third-party invoices and receipts)?

47. Procedures • Do the subrecipient's policies and procedures require that subrecipient personnel tile original itemized third-party invoices or receipts and a standard internal accounting form (e.g., payment authorization form, purchase order or reimbursement form)? • Do the subrecipient's policies and procedures require purchase cardholders to attend periodic training on the proper usage of purchase cards and required recordkeeping?

48. Procedures • Do the subrecipient's policies and procedures require the monitoring of corporate account and/or revolving line of credit activities to identify inappropriate use? • Does the subrecipient permit the use of petty cash for the disbursement of grant funds?

49. Procedures • Does the subrecipient have written policies and procedures that described the process that subrecipient personnel were required to follow for the expenditure of grant funds for travel costs? • Do the subrecipient's policies and procedures describe its travel authorization and travel reimbursement process? • Do the subrecipient's policies and procedures identify the individual(s) responsible tor initiating and approving travel and the disbursement of funds?

50. Procedures • Do the subrecipient's policies and procedures identify the required forms and third-party source records that had to be submitted? • Do the subrecipient's policies and procedures state that the program office should forward or retain other related records (e.g., meeting/conference agendas, certificates of completion) to demonstrate that the use of funds pertained to an allowable activity? • Do the subrecipient's policies and procedures identify the amounts that would be reimbursed for travel costs? Note if these amounts exceeded the maximum allowable amount identified in the Texas Travel Allowance Guide.