Office of Federal Programs Fiscal Compliance Fiscal Compliance

Office of Federal Programs Fiscal Compliance

Fiscal Compliance Agenda ØFederal Funding Flexibilities in Response to COVID-19 ØFiscal Compliance Ø Ø Ø Ø Ø 2 Ø Maintenance of Effort Ø Comparability Ø Supplement not Supplant Period of Performance Allocation Notices Tracking Federal Funds Title I, Part A Carryover Limitation Fiscal Flexibility Options LEA Independent Audit Findings Significant Due Dates Resources Questions Federal Programs Fiscal Compliance

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USDE Waivers Granting LEAs Flexibility with Federal Funds • Section 1127(b) of Title I, Part A of the ESEA (the Elementary and Secondary Act of 1965). This waiver allows the SEA to waive the 15% carryover limitation in ESEA Section 1127(a) for FY 2020 Title I, Part A funds more than once every three years; • Section 421(b) of the General Education Provisions Act (GEPA) has been waived to extend the period of availability (also known as period of performance) of FY 2019 funds until September 30, 2021. Covered programs are: • • 4 511 Title I, Part A (Improving Basic Programs) 521 Title I, Part C (Education of Migrant Children) 531 & 532 Title I Part D, Subparts 1 and 2 (Neglected and Delinquent Programs) 541 Title II, Part A (Preparing, Training, and Recruiting High-Quality Teachers, Principals and Other School Leaders) 571 & 572 Title III, Part A (Immigrant and English Learners) 552 Title IV, Part A (Student Support and Academic Enrichment) 587 Title V, Part B (Rural and Low-Income School Program) 596 Mc. Kinney-Vento Homeless Children and Youth Program Federal Programs Fiscal Compliance

Coronavirus Aid, Relief and Economic Security Act (CARES Act) Funding • $144, 655, 428 allocated to Oklahoma LEAs • CARES Act Funding Period for FY 2020 6/30/2020 3/13/2020– • CARES Act funds made available for obligation on March 13, 2020, and will remain available for obligation through September 30, 2022 • Project Code 788 • CFDA – 84. 425 D 5 Federal Programs 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) • An LEA shall use fiscal control and fund accounting procedures that ensure proper disbursement of and accounting for federal funds. (EDGAR § 76. 702) 6 Federal Programs Fiscal Compliance

Fiscal Compliance Three requirements that 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. o. Maintenance-of-Effort o. Comparability o. Supplement, not Supplant 7 Federal Programs Fiscal Compliance

Maintenance-of-Effort (MOE) At the district level A provision which requires that an LEA maintain a 90 percent level of it’s expenditures for public education from State and local funds from one year to the next. (ESEA, Section 1118(a) and 8521(a)) 8 Federal Programs Fiscal Compliance

Reduction for Failure to Meet MOE The SEA must reduce the amount of allocation under Title I, A and other covered programs by the exact proportion by which the LEA failed if the LEA failed to maintain effort in the target year (2019) and also failed to maintain effort in one or more of the 5 previous years. (ESEA, Section 8521(b)(1)) 9 Federal Programs Fiscal Compliance

Reduction for Failure to Meet MOE Conversely, if the LEA failed to met MOE in the target year (2019) but met MOE in the previous 5 years, the SEA would not reduce the LEA’s allocation. 10 Federal Programs Fiscal Compliance

Waiver USDE may waive the MOE requirement if it is determined that: • Exceptional or uncontrollable circumstances such as a natural disaster; • A precipitous decline in the financial resources of the LEA. (ESEA, Section 8521(c)) or • “New” A change in the organizational structure of the LEA 11 Federal Programs Fiscal Compliance

Maintenance of Effort and Schoolwide Flexibility Schoolwide Defined Schoolwide flexibility allows the use of federal funds to be spent to upgrade the entire educational program in a Title I school as long as it is integrated in the LEAs Schoolwide Plan LEAs exercising Schoolwide flexibility must ensure that the 90 percent level of state and local expenditures remain constant. 12 Federal Programs Fiscal Compliance

Comparability 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 I schools. (ESEA, Section 1118(c)(A)) • Moreover, 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. (ESEA, Section 1118(c)(B)) 13 Federal Programs Fiscal Compliance

Comparability Measure • Based on student/teacher ratio • Compare the total average non-Title I student/teacher ratio to each Title I site or if all sites are Title I, then the total average student/teacher ratio is compared to each Title I site. 14 Federal Programs Fiscal Compliance

Comparability Procedures An LEA must develop procedures for complying with the Comparability requirements. (ESEA, Section 1118 (c)(3)(A)) 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 Federal Programs Fiscal Compliance

Comparability and Schoolwide Flexibility Schoolwide schools still have to comply with Comparability requirements of Title I. 16 Federal Programs Fiscal Compliance

Supplement not Supplant At the student level • Ensures services provided with Title I resources cannot replace, or supplant, services that a LEA would ordinarily provide to all students. (ESEA, Section 1118(b)(1)) 17 Federal Programs Fiscal Compliance

Period of Performance of Federal Funds Current Year, 1 st Year, 2 nd Year Funds Period of Performance for FY 2019 funds for school year 2018 -2019, is 27 months, beginning July 1, 2018 and ending September 30, 2020. Example Current year funds are FY 2019 funds in FY 2019 7/1/18 – 6/30/19 12 months LEA 1 st year carryover funds are FY 2019 funds in FY 2020 7/1/19 – 6/30/20 12 months LEA 2 nd year carryover funds are FY 2019 funds in FY 2021 7/1/20 – 9/30/20 3 months 27 months Waiver extended FY 2019 unexpended funds through September 30, 2021 18 Federal Programs Fiscal Compliance

Period of Performance Determining 2 nd Year Carryover 19 Federal Programs Fiscal Compliance

Period of Performance Current Year, 1 st Year, 2 nd Year Funds 20 Federal Programs Fiscal Compliance

Allocation Notices 21 Federal Programs Fiscal Compliance

Allocation Notices 22 Federal Programs Fiscal Compliance

Original Allocation Notice 23 Federal Programs Fiscal Compliance

Revised Allocation Notice 1 24 Federal Programs Fiscal Compliance

Revised Allocation Notice 2 25 Federal Programs Fiscal Compliance

Tracking Funds -Funding Summary 26 Federal Programs Fiscal Compliance

Tracking Funds by Funding Summary 27 Federal Programs Fiscal Compliance

Fiscal Flexibility Options • Transferability- allows LEAs to transfer up to 100 percent 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. (ESEA, Section 5103(e)(1)) 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 Costs (CAC)- 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. • Schoolwide Consolidation of Federal Funds – Project 785 -Allows funds from various federal programs to be combined and spent at a schoolwide site. 28 Federal Programs Fiscal Compliance

Title I Carryover Limitation Title I A: 15 Percent Limitation (ESEA, Section 1127(a)) Not more than 15 percent of the funds allocated to a local educational agency for any fiscal year under this subpart (but not including funds received through any reallocation under this subpart) may remain available for obligation for one additional fiscal year. Fiscal Tip: 15 cap is calculated on the Title I current year allocation plus any funds transferred into Title I. Waiver allows an LEA to carryover more than 15 percent of its Title I, Part A current year funds from FY 2020 to FY 2021, without requesting a waiver. 29 Federal Programs Fiscal Compliance

Independent Audits Most Common and Repeat Findings q OCAS data overstated/understated did not match amount actually paid from the federal program q Equipment purchased with federal funds not properly labeled as required by federal program guidelines (UGG) Corrective Action Response q May require LEA to provide additional information/documentation 30 Federal Programs Fiscal Compliance

Independent Audits LEA Finding: During our audit of the federal programs, we noted instances where the district recorded expenses in the accounting system for federal projects that did not match what was claimed and reimbursed by federal monies. LEA Response: District personnel will review OCAS expenditures to ensure match of federal monies claimed and received. 31 Federal Programs Fiscal Compliance

Detailed Written Procedures Public School Policy and Procedure Objective: Federal Fund accounting and tracking procedures. Purpose: Establish sound accounting and tracking guidelines to ensure all funds are properly tracked and accounted for during each fiscal year. Authority: Superintendent Responsibility: Encumbrance and Accounts Payable Procedures: When comparing claims to reimbursements, all OCAS differences will be double checked by key personnel by June 30 of the fiscal year to ensure all amounts balance. District will compare monthly as well as year-end the amount of program expenditures that have been coded to federal projects to what was claimed for reimbursement and make adjustments as needed. This will eliminate any further discrepancies. (All coding was corrected at the time of final audit for 2018 -2019. ) The district has established a procedure in which an employee, other than the one filing the claims, perform a reconciliation at the end of the fiscal year between the expenditures claimed for reimbursement and the expenditures actually coded the program’s project code on the detailed expenditures reports. Proper reconciliation of federal programs will be conducted including revenue and expenditures prior to the certification of OCAS data to ensure correct numbers are submitted to the State Department of Education. Expenses and potential claims will be reviewed by no less than three of the following four people before submitting: Superintendent, Assistant Superintendent, Encumbrance Clerk, and Payroll clerk. Once a claim is awarded, the Treasurer and Assistance Superintendent will review the claim and keep a working spreadsheet to make sure it matches records submitted to OCAS. Reimbursements will be initiated by encumbrance clerk, reconciled for project and program codes, and then check and approved by superintendent for accuracy in coding. 32 Federal Programs Fiscal Compliance

Independent Audits LEA Finding: During our audit, we noted that some equipment purchased with federal funds was not properly labeled as required by the federal program guidelines. LEA Response: Label all equipment purchased with federal funds. 33 Federal Programs Fiscal Compliance

Detailed Written Procedures Public School Policy and Procedure Objective: Labeling and Tracking all Federally Purchased Equipment (FPE), Property and/or Technology. Purpose: To establish and follow uniform guidelines to ensure that a complete inventory record is maintained for all FPE items within Public School. Authority: Superintendent Responsibility: The school business manager will initiate and maintain all inventory control records for the district. The second line of responsibility is the building or district Principal to inspect and verify the inventory records are accurate and current. Procedure: The Business Manager (BM) will initiate an annual inventory of all school district property. It is district policy to have all packages delivered to the office of our BM to make tagging and initial inventory possible before district dispersion. This inventory will be conducted at least once every fiscal year (July 1 to June 30). As a check and balance the building Principal will also know how to perform these duties. Inventory procedures are for the BM to collect and maintain copies of all invoices of the FPE. Each list will contain a district assigned tracking number, item description, model #, Serial #, FY purchased and location. Tracking of all FPE must be a part of end of year inventory procedures. This list will originate from the previous year’s inventory and must note any changes new or outdated items or lost, stolen or damaged items. Originating with the direct use employee, then on to the building principal, then from there to the Business Manager and on to the Superintendent. At this point the Business Manager, Principal and Superintendent will finalize the inventory and write a report based on the findings. Inventory list will be given to all responsible employees and it will be required each employee reports lost, stolen or damaged equipment to the building principal of District Business Manager within 2 business days. 34 Federal Programs Fiscal Compliance

Good Stuff To Know For OSDE Significant Due Dates for all departments see Reporting Requirements Document accessed through Single Sign-On (links and docs) or the Accreditation homepage. 35 Federal Programs Fiscal Compliance

Good Stuff To Know 36 Federal Programs Fiscal Compliance

Good Stuff To Know • Office of Federal Programs Newsletter • Go to OSDE website, click on Services > Federal Programs > OFP Newsletter and send email to contact person listed. • Weekly Message to School Administrators • Go to OSDE website, scroll down to the Newsletter Sign Up Now 37 Federal Programs Fiscal Compliance

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Resources • Non-Regulatory Guidance, Title I Fiscal Issues: Maintenance of Effort, Comparability, Supplement, Not Supplant, Carryover, Consolidating Funds in Schoolwide Programs, and Grant Back Requirements, Revised 2008 • Non-Regulatory Guidance: Fiscal Changes and Equitable Services Requirements under the Elementary and Secondary Education Act of 1965 (ESEA) as Amended by the Every Student Succeeds Act (ESSA) • Maintenance of Effort Calculation can be found on the OSDE website in the Oklahoma Cost Accounting System (OCAS) Manual • Uniform Grant Guidance (UGG) CFR 200 on Office of Federal Programs Link • Education Department General Administrative Regulations (EDGAR) found on the USDE website • COVID-19 Resources and FAQ - OSDE website 39 Federal Programs Fiscal Compliance

Contact Kay Townsend, Financial Analyst Office of Federal Programs E-mail: Kay. Townsend@sde. ok. gov (405) 522 -3254 40 Federal Programs Fiscal Compliance