Transcript Title I Fiscal Responsibilities

Federal Grant Fiscal Responsibilities
Presented by:
Anthony Hearn, CPA
Office of Title I
Grant Specific
• Title I – Very Programmatic – Be able to identify additional
programs in place (that are funded) for low performing
students in Targeted Assistance
• Title I – Schoolwide – Plan dictates
• Other ESEA
 Title IIA
• Will Sample Staff and HQT Status
• Review of Professional Development Plan
 Title III
• What additional Programs in place
Common Issues and Resolutions
Summary
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Financial Management, Procurement and EDGAR 80.36
Time Sheets
Equipment
Non Allowable Uses of Funds
Lack of Identified Programs
Lack of Non Public Consultations (IDEA and Title I)
Time Sheets, PARs, Funded Staff, etc
• VERY IMPORTANT to Understand
• Need to Show
– What they are doing (e.g.: In Class Support)
– Where they are doing it (e.g.: Room or Ms. Jones
Class)
– When they are doing it (e.g.: Time Schedule)
OIG Time and Effort Findings
• 2006 – Columbus - $2.3 million
• 2008 – Detroit - $49 million
• 2009 – Houston - $238 million
• 2010 – Philadelphia - $123 million
5
Staff Funding
What should be in my Board minutes?
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Appointment of Teachers
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Name
Salary
School
Funding Percentage for Each Program
Appointment of Secretaries, Aides, Program Directors,
etc.
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Name
Salary
Work Location
Funding Percentage for Each Program
Staff Funding and Time Sheets
Fully-funded Salaries
Applies to all Fund 20 Federal
Grants
• Periodic certification signed at
least semi-annually
• Clarification on Funding vs.
Cost Objective – UGH !!!!!! –
New Model Implemented
• Signed by employee and
supervisor
• NEW EXAMPLE IN OCT of
2012
Staff Funding and Time Sheets
Multiple Cost
Objectives or Splitfunded Salaries
• Personnel activity reports
• Signed by employee and supervisor
• Must be an after-the-fact distribution of
actual activity
• Prepared at least monthly and must
coincide with pay periods
• NEW EXAMPLE IN OCT of 2012
Select Expenditures and Support Needed
Equipment
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Maintain master inventory listing
 Date, Serial Number, Model, Cost, Location
Each school should maintain subsidiary listing
All equipment should be labeled with Grant Name or equivalent
tracking system
Need to keep records for FIVE years past disposition (date needs
to be on master list)
Even if not equipment for GRANT purposes, if district has a lower
threshold, then tracking of equipment is required
If less expensive to inventory than to replace, it should be
inventoried
Non-Allowable Uses or What is Allowable
• OMB Circular A-87, Attachment B
• Supplanting
• Schoolwide – Is it in the Plan ?
OMB Circular A-87- requires the use of funds for a specific purpose be
necessary and reasonable for the proper and efficient performance and
administration of the program and be authorized and not prohibited under
State and local laws and regulations.
Selected Items of Cost
• Special rules for specific expenses
• Still subject to basic guidelines
• Examples:
– Alcohol: Never allowable
– Salaries and Wages: Allowable if time
distribution
– Meetings and conferences: Allowable
if dissemination of technical
information
– Entertainment !!!!!!!!!!
Non-Allowable Uses or What is Allowable
OMB Circular A-87, Attachment B
www.whitehouse.gov/omb/circulars/a087/a087_2004.pdf
• 1 – Advertising
• 14 – Entertainment
• 34 – Publication and Printing
• 43 – Travel Costs
Non-Allowable Uses or What is Allowable
Advertising
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Advertising and public relations costs.
The term advertising costs means the costs of advertising media and corollary administrative costs.
Advertising media include magazines, newspapers, radio and television, direct mail, exhibits, electronic or
computer transmittals, and the like.
The term public relations includes community relations and means those activities dedicated to
maintaining the image of the governmental unit or maintaining or promoting understanding and favorable
relations with the community or public at large or any segment of the public.
The only allowable advertising costs are those which are solely for:
(1) The recruitment of personnel required for the performance by the governmental unit of obligations arising under a
Federal award ;
(2) The procurement of goods and services for the performance of a Federal award;
(3) The disposal of scrap or surplus materials acquired in the performance of a Federal award except when
governmental units are reimbursed for disposal costs at a predetermined amount; or
(4) Other specific purposes necessary to meet the requirements of the Federal award.
Non-Allowable Uses or What is Allowable
Entertainment (14)
Costs of entertainment, including
amusement, diversion, and social activities
and any costs directly associated with such
costs (such as tickets to shows or sports
events, meals, lodging, rentals,
transportation, and gratuities) are
unallowable.
Non-Allowable Uses or What is Allowable
Publication & Printing (34)
• Publication costs include the costs of printing (including the processes
of composition, plate-making, press work, binding, and the end
products produced by such processes), distribution, promotion,
mailing, and general handling. Publication costs also include page
charges in professional publications.
• If these costs are not identifiable with a particular cost objective, they
should be allocated as indirect costs to all benefiting activities of the
governmental unit.
Non-Allowable Uses or What is Allowable
Travel (43)
General. Travel costs are the expenses for transportation, lodging,
subsistence, and related items incurred by employees who are in travel
status on official business of the governmental unit. Such costs may be
charged on an actual cost basis, on a per diem or mileage basis in lieu of
actual costs incurred, or on a combination of the two, provided the method
used is applied to an entire trip and not to selected days of the trip, and
results in charges consistent with those normally allowed in like
circumstances in the governmental unit’s non-federally sponsored activities.
Notwithstanding the provisions of Attachment B, section 19, General
government expenses, travel costs of officials covered by that section are
allowable with the prior approval of an awarding agency when they are
specifically related to Federal awards.
Select Expenditures and Support Needed
General Purchases
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Must have purchase orders
Must have account number on P.O.
Should indicate Grant on P.O. (Not Just Account #)
Signed by Business Administrator
If split P.O., Title I should be easily identifiable
REMEMBER Title I – Money spent in Individual Schools
should EQUAL amount in Step 4 of Eligibility
0
60000
Reserves
Public
Nonpublic
Total
Administration
60000
Preschool Programs
0
Homeless Students
0
District-wide Instructional Programs
0
0
LEA Professional Development
70000
0
LEA Parent Involvement
67187
0
Choice-Related Transportation
0
Supplemental Educational Services
0
Teacher Incentives and Rewards
0
Priority/Focus Interventions
491237
Neglected
0
Delinquent
0
Total Reserves:
688424
0
688424
Total Distribution Amount:
949033
Districts with Less than 35% Poverty - Minimum Per-Pupil Amount
0
Districts with 35% Poverty or Higher Must Follow the Instructions
18
Attendanc
e Centers
SW / TA
Not
Served
School
Designati
on
Public
Low
Income
Nonpublic
Low
Income
Low
Income
Percent
Total
Allocated
Public
Allocation
Per-Pupil
Amount
Nonpublic
Allocation
050 - ESSEX
CTY V N
13TH ST
NWK
SW
OTHER
570
0
85.97 %
307009
$539
$0
020 - ESSEX
CTY VOC
BLOOMFIELD
SW
OTHER
406
0
83.54 %
218676
$539
$0
070 - WEST
MARKET
STREET
CENTER
SW
OTHER
606
0
83.01 %
326398
$539
$0
080 - ESSEX
CTY VOCWEST
CALDW
SW
PRIORITY
180
0
81.82 %
96950
$539
$0
Total Allocated
Difference
$949,033
$949,033
$0
$0
19
Supplement Not Supplant
• Funds must be “supplemental” to local spending
• Supplemental Defined:
“In the absence of federal funds, would funds have
been spent (prior year funding is one distinguishing
factor)”
Supplement Not Supplant
If it is “REQUIRED”, then you can NOT fund it!
Supplement Not Supplant
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If all students/classroom get items, district can’t pay for
Title I / IDEA part out of grant
Items purchased should not be used by non-eligible
students (can have some incidental benefit, but need to
document)
Presentations/Trips should not benefit non-eligible
students (identify Title I and in IEP for IDEA)
Special rules apply to approved and implemented
“Schoolwide Programs”
Student Incentives
• The US Dept. of Education(ED) has indicated that an LEA may
use Title I funds to provide “non-monetary” rewards of
“nominal” value (e.g., Plaque, gift certificate, or book, etc.) in
an effort recognize Title I students for good performance.
• Title I funds may NOT be used to pay students a stipend or
provide some other type of award as an incentive for student
participation in a Title I program
Parent Incentives
• To encourage parents of Title I students to participate in
school activities in the evening, an LEA may use Title I funds to
provide light refreshments.
• Note, ESEA § 1118(e)(8) authorizes LEAs to use Title I funds for
“parent-related” activities that are reasonable and necessary
for expenses associated with parental involvement activities,
including child care and transportation to enable parents to
attend “school-related” meetings and training sessions
Helpful Questions to Ask When Analyzing
Costs
• Is the proposed cost consistent with federal cost
principles? OMB A-87, Attachment B
• Is the proposed cost allowable under the relevant
program? (Title I, IDEA, etc)
• Is the proposed cost consistent with an approved program
plan and budget? (EWEG)
• Is the proposed cost consistent with program specific
fiscal rules? (Supplement not Supplant)
• Is the proposed cost consistent with EDGAR?
Allowable Costs
All Costs must be:
• Necessary
• Reasonable
• Allocable
• Legal under state and local law
(A5)
Allowable Costs
• Must be necessary for the performance or
administration of the grant
• Must follow sound business practices:
– Arms length bargaining (hint: procurement processes)
– Follow federal, state and local laws
– Follow terms of the grant award
Schoolwide Program & Expenses
• MUST have approved plan that addresses all
schoolwide issues
• Time sheets are required (except in a blended resource
fund, e.g., Fund 15 for former Abbott districts)
• Key questions to be addressed:
– Do the activities budgeted support the intent of the law?
[Federal Register: July 2, 2004 (Volume 69, Number 127)]
– Are supplemental services provided to the students enrolled
in the school?
Lack of Identified Funded Programs
• Programs for Title I must be clear and distinct.
• Programs for Title I must be the “icing on the cake” for low
performing students.
• Watch for funded programs that
– Are replacement programs (in lieu of math or English)
– Pull children away from elective classes
Allowable Non Public Expenses
• IDEA and Title I have different coverage areas for services
to students
– Title I – Students that would have attended, but are out of district –
anywhere
– IDEA – Just resident students
• Remember allowable cost rules are the same for Non
Public as for Public Schools
• If Third Party contractors hired
– District needs to maintain plans
– Responsibility for all areas should be addressed in the contract
– Only allow to bill for actual services, not flat fee monthly
Closing Out the Grants
• Must be consistent with budget (amendments filed through EWEG) –
EWEG Monitors
• CANNOT:
– Move more than 10% of total funds without State approval
(EWEG amendment) - $50K threshold removed
– Add a budget category without State approval (EWEG
Amendment)
– Transfers to and from Equipment Lines
– Carryover more than 15% of Title I total amount received more
than once every three years without State approval (Must have
good reason)
Watch Transfers
• Must be able to state WHY transfer and how not
SUPPLANTING
• Transfers:
– Just can’t move expenses to “Use up leftover money”
– Make sure consistent with program plans
– Can’t move ½ a chair
Restrictions and Reserves
Title I
– Parental Involvement
– RAC Reserve
– Spending by location
– Non Public Funds
Fiscal News from Washington
New Haven Audit Report from Office of Inspector
General
• Supplanting in a Schoolwide Program
http://www.ed.gov/about/offices/list/oig/auditreports/a02f0
005.pdf
Fiscal News from Washington
William Floyd Audit Report from Office of Inspector
General
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Unsupported Expenses
Unsupported Adjusting Journal Entries
Supplanting of Textbooks
Weak Internal Controls
http://www.ed.gov/about/offices/list/oig/auditreports/a02f00
30.pdf
Fiscal News from Washington
City of Detroit and Parent Involvement Fund
2005
• Disallowed Charges for Entertainment, Promotional Items
and Public Relations
• Need to be necessary, reasonable, allocable and
documented
• Disallowed items include advertising for an event and live
musical entertainment at parent volunteer function
http://www.ed.gov/about/offices/list/oig/auditreports/a05f0018.pdf
Fiscal News from Washington
City of Detroit -Revisit in 2008
• Over $131 Million in 2005 and $126 Million in 2006
• No Time Sheets – Almost $50 Million
• Teaching non-Title I students – even though most of Detroit is schoolwide some
schools are not (no plan submitted) and OIG looked to these schools and found staff
being funded that were teaching non-Title I identified students. Detroit argued they
could have been schoolwide if they did a plan and the OIG rejected this argument
• Over $21 M for adjusting entries for employees that were charged to other programs
and then charged to Title I
• Gift cards they could not show got to students
• $150,000 for martial arts training
Fiscal News from Washington
St. Louis OIG Audit
• Lost 125 Computers
• Serving Ineligible Schools
http://www.ed.gov/about/offices/list/oig/areports.html
Fiscal News from Washington
Philadelphia
• Findings totaling $138,376,068
• Unsupported Salaries (some direct and some thru adjusting
entries)
• School Police paid from Title I Funds
• Supplanting (moving company, etc)
• No backup for School Choice Charges of $1.3M
• Weak internal controls
Fiscal News from Washington
Maryland
Title I ARRA Funds
• Findings totaling $540,013
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$8,736 in gifts to staff
$4,352 in Dinner Cruises in Baltimore Harbor
Lack of Receipts for Expenses
$200,323 in Unsupported Title I and IDEA Salaries
3,922 Tablets with no controls over them or applications that are
downloaded (Items against policy – 22%)
US Dept. of Education- Office of
Inspector General
Four Jefferson Parish Public School System Employees Sentenced
(Louisiana).
• Four former employees of Jefferson Parish Public School System
were each sentenced for their roles in an embezzlement scheme.
For more than 2 years, two of the former employees submitted
fraudulent documents for themselves and the other co-conspirators
to receive supplemental pay and stipends for various tutoring,
testing, and remediation programs funded by Jefferson Parish
Public School System, although none of them were certified
teachers or qualified to perform those activities. The scheme’s two
ringleaders were each sentenced to serve 6 months of home
confinement and 5 years of probation. They were also ordered to
pay more than $132,000 in restitution. Their two co-conspirators
were sentenced to serve between 3 and 5 years of probation and
were ordered to pay $9,700 and $11,800, respectively, in
restitution.
What Happens When Federal $$$
Are Misspent??????
• Accountability. Efficiency. Effectiveness.
US Dept. of Education- Office of Inspector
General
• Former Charles County Public Schools Title I
Coordinator Sentenced (Maryland).
• The former Title I coordinator was sentenced to
serve 27 months in prison and 36 months of
supervised release. She was also ordered to pay
more than $115,300 in restitution for theft. The
former official used Title I grant funds to
purchase technology items for herself, family, and
friends, including computers, video games
consoles, portable media players, tablet
computers, and televisions.
US Dept. of Education- Office of Inspector
General
Sandra Campbell, 57 a former Detroit Public Schools contract accountant and school board
candidate, and her daughter, Domonique Campbell, 38, a Detroit Public Schools teacher, were
convicted today by a federal jury in Detroit on charges of program fraud conspiracy, money
laundering conspiracy, and tax charges following a five-week jury trial, United States Attorney
Barbara L. McQuade announced today. The jury returned its verdict after only one-and-a-half hours
of deliberations.
McQuade was joined in the announcement by FBI Special Agent in Charge Robert D. Foley, III and
Special Agent in Charge, Erick Martinez, Internal Revenue Service, Criminal Investigation.
The evidence presented at trial established that between 2004 and 2008, Sandra Campbell and
Domonique Campbell obtained in excess of $530,000 from the Detroit Public Schools through a
fraudulent scheme in which orders were placed with the Campbells’ sham company for books and
educational materials never provided to the schools. Sandra Campbell and Domonique Campbell
conspired to launder the fraud proceeds and to defraud the Internal Revenue Service and failed to
report the money they fraudulently obtained from the Detroit Public Schools as income on their tax
returns.
United States Attorney Barbara L. McQuade said, “Anyone who considers stealing from our school
children should take note that we are scrutinizing records and conduct, and will prosecute
wrongdoers.”
Available Research & Where to Find It
No Child Left Behind
www.ed.gov/legislation/ESEA02/index.html
OMB Circular A-87, Attachment B
www.whitehouse.gov/omb/circulars/a087/a087_2004.pdf
EDGAR
http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html
Compliance Supplement (A-133)
http://www.whitehouse.gov/omb/circulars_a133_compliance_08_08to
c/
Conclusion
Remember:
• “If the district takes the money, they are
responsible for knowing the rules and regulations
concerning the grant.”
• If you need further help contact Anthony Hearn
– (609) 633-2492
– [email protected]