FINANCIAL AND

ADMINISTRATIVE SERVICES

Missouri Department of Elementaryand Secondary EducationApril 25, 2013

Federal Fiscal Management

Updates

Topics

Sequestration 2013-14 NCLB and IDEA Part B

Allocations Period of Availability What’s New

Time and Effort Reporting ePeGS Enhancements

Tiered Federal Monitoring General Federal Guidance

Sequestration

Sequestration

The failure of the Joint Select Committee on Deficit Reduction (Super Committee) to produce a bill identifying budgetary savings of at least $1.2 trillion over ten years has triggered an automatic spending reduction process (called sequestration) that takes effect on July 1, 2013.

Sequestration Webpage:http://www.dese.mo.gov/fas/Sequestration.html

Sequestration Process under the Budget Control Act of 2011 The Office of Management and Budget

(OMB) has calculated that there will be a 0.2% across-the-board cut for all non-security programs in the bill.

Programs with advanced appropriations (IDEA 611 & 619, Title I, II.A, III) will end up with a cut of 5.21%

Title I LEA funding will vary due to statutory formula

Will be implemented on July 1, 2013.

Sequestration

2013-14 NCLB & IDEA Part B Allocations

2013-2014 Funding Projections (NCLB)

In March, Congress passed a final budget appropriation for federal FY 2013

Comparison of 2011 Census Data with 2010 by state, Missouri’s change in the national poverty share increased by 3.12%

Preliminary allocations available by late April

http://www2.ed.gov/about/overview/budget/statetables/index.html#update

Sequestration reduces funding

2013-2014 Census Data (NCLB)

USDE uses census poverty to calculate all of the formula grants.

Count may be accessed through the US Census Bureau

http://www.census.gov//did/www/saipe/ Available under Federal Financial

Management/Census at http://www.dese.mo.gov/divimprove/fedprog/financialmanagement/

Income Year 2011 Large districts allocation is based solely on

census poverty data Small districts use alternative poverty

Allocation Criteria for 2013-2014 (NCLB)

The Department uses the following data to compute NCLB formula grants: Census Poverty – Income Year 2011 Free and Reduced Lunch Counts – October

2012 Neglected and Delinquent Counts – Fall 2012 Nonpublic Enrollment & F/R Lunch Counts –

Fall 2012 Hold Harmless Percentages

The allocation amount is based on a formula and is NOT dependent on need or use of funds.

Allocation Criteria – Title I

Title I allocation consists of four separate funding calculations:

Each funding category has different criteria and formula to distribute these funds.

Has hold-harmless criteria –no less than 85% if criteria are met and funding is sufficient.

Detailed Allocation Criteria is located at:http://dese.mo.gov/divimprove/fedprog/financialmanagement/Allocation%20Info.htm

o Basic Grant o Concentration Granto Targeted Grant o Education Finance Incentive Grant (EFIG)

Hold Harmless Amounts – Title IThe amount made available to the LEA shall

be: Not less than 95% of the amount made

available for the preceding fiscal year if the percentage of formula children is not less than 30%

Not less than 90% of the amount made available for the preceding fiscal year if the percentage of formula children is between 15% and 30%

Not less than 85% of the amount made available for the preceding fiscal year if the percentage of formula children is below 15%

2013-14 Funding for IDEA

IDEA Part B Entitlement funds (Section 611) are Federal funds your District/LEA receives to help support your special education program and implement IDEA.

Timeline

2013-14 Counts and Part B Allocations are posted at:http://dese.mo.gov/divspeced/Finance/

Date Step in Process

Beginning of April

Preliminary population and poverty counts posted on webpage

April 21 Deadline for LEAs to confirm/make changes to counts

April 22 Pull data that will be used to calculate final Part B allocations

Federal IDEA Part B Funds Formula

Three separate components in formula:

1. Base Amount;

2. Population Count (includes ALL

students)– September Enrollment– Home School– Non-Public– Neglected/Delinquent

3. Poverty Count (includes ALL students)– Free/Reduced Lunch Count

Period of Availability

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Period of Availability of Funds“Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations of the funding period unless carryover of unobligated balances is permitted, in which case the carryover balances may be charged for costs resulting from obligations of the subsequent funding period.”

EDGAR §80.23

Grant Cycle / Obligation Period / FER Reporting Period

Grant Cycle Obligation Period

FER Reporting Period

July 1, 2012 to June 30, 2013

Date of Substantially Approved Application to June 30, 2013

July 1, 2012 to September 30, 2013

Period during which funds may be obligated and expended.

Obligations occur during the grant cycle, but only after a substantially approved budget application has been submitted.

Expenditures for obligations made during the obligation period may be reported up until September 30.

When is an Obligation Made?

IF THE OBLIGATION IS FOR-- THEN THE OBLIGATION IS MADE-- Acquisition of real or personal property On the date the school district makes a binding written

commitment to acquire the property Rental of real or personal property When the school district uses the property Personal services by an employee of the school district

When the services are performed

Personal services by a contractor who is not an employee of the school district

On the date the school district makes a binding written commitment to obtain the services

Performance of work other than personal services

On the date the school district makes a binding written commitment to obtain the work

Public utility services When the school district receives the services Travel When the travel is taken

EDGAR §76.707

What’s New

Cost Objective Criteria Documentation

Required

Single Cost Objective

Employee works solely on a single Federal award or cost objective

Semi-Annual Certification Must be prepared at least semi-annually; and Must be signed after-the-fact by employee or

supervisory official having firsthand knowledge of the work performed by the employee.

Multiple Cost Objectives

More than one Federal award; Federal award & non-Federal award; Indirect cost activity & direct cost activity; Two or more indirect activities that are

allocated using different allocation bases; Unallowable activity & a direct or indirect

cost activity; or One Federal award with multiple cost

objectives.

Personnel Activity Report (PAR) Reflect an after-the-fact distribution of the actual

activity of the employee; Account for the total activity for which each

employee is compensated; Be prepared at least monthly & coincide with one

or more pay periods; and Must be signed after-the-fact by the employee. At least quarterly, the actual time reflected on the

PAR must be compared to the payroll charges, and if differences exist, then payroll adjustments must be made.

OMB Circular A-87Time and Effort Reporting

Guidelines

OMB Circular A-87Time and Effort Reporting

GuidelinesCost

Objective Criteria DocumentationRequired

Multiple Cost Objectives with Fixed Schedule (Substitute System)

Currently work on a schedule that includes multiple activities or cost objectives that must be supported by monthly personnel activity reports;

Work on specific activities or cost objectives based on a predetermined schedule; and

Not work on multiple activities or cost objectives at the exact same time on their schedule.

Substitute System Certification & Fixed Schedule Indicate the specific activity or cost objective that

the employee worked on for each segment of the employee’s schedule;

Account for the total hours for which each employee is compensated during the period reflected on the employee’s schedule; and

Be certified at least semi-annually & signed by the employee & a supervisory official having firsthand knowledge of the work performed by the employee.

Stipend andExtra Duty Pay

Pay for extra work beyond an employee’s regular contract

Written Agreement Indicates the extra work to be performed; Date(s) of performance; Amount to be paid to the employee; and Must be signed by the employer & the employee

to show the acceptance of the terms.AndSemi-Annual Certification or Personnel Activity Report

Payment Request in ePeGS

New for 2013-2014: Expenditures will be reported by both

object and function code Expenditures in approved object codes

may not exceed 10% of the total amount budgeted within the approved program

Expenditures outside approved function/object code will not be allowed

10% Variance Example

Expenditures in approved object codes may not exceed 10% of the total amount budgeted within each of the approved programs.

Capital Outlay Page in ePeGS

Equipment is tangible, non expendable personal property having a useful life of more than one year and an acquisition cost of $1,000 or more per unit.

Unit Acquisition Cost is the net invoice price of the equipment, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment usable for the purpose for which it was acquired.  Other charges such as the costs of installation, transportation or taxes should be included in the unit acquisition cost.

Capital Outlay Page in ePeGs Equipment

Capital Costs (Federal Funds)(34 CFR §300.718)

Prior Approval from Special Education Finance is required for Non-Equipment purchased with Part B funds:

Alteration / Renovation: changing an existing LEA‐owned structure

Construction - building a new structure Real Estate - purchasing a structure or

land Buses/Vehicles

Capital Outlay Page in ePeGs Non-Equipment

Capital Outlay Page in ePeGs Non-Equipment

Tiered Federal Monitoring

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Tiered Monitoring Timeline

Task 2013-14 2014-15 2015-16

Desk Audit Cohorts 1,2,3 Cohorts 1,2,3 Cohorts 1,2,3

Desk Monitoring (Tiered Federal Monitoring System)

Cohort 3 Cohort 1 Cohort 2

On-site /telephone(Tiered Federal Monitoring System)

Cohort 2-10% for On-site and 10% for telephone

Cohort 3-10% for On-site and 10% for telephone

Cohort 1-10% for On-site and 10% for telephone

Clean-up Cohort 1-10% Cohort 2-10% Cohort 3-10%

Tiered Federal Monitoring

Possible Risk Factors – On-site or Telephone Amount of federal funds (large amounts =

greater risk) A-133 audit findings Late MOSIS/Core Data Reports Financial Distress Administrator Changes/Other Issues

Reported by Auditor or LEA Late FER Late Budget Application Violation of CMIA

Tiered Monitoring Process

Tiered Monitoring Process at http://www.dese.mo.gov/ls/index.html Description Cohort Groups Timeline

Common Findings

General: Expenditures not tracked separately Time distribution for federally paid

employees Obligations prior to budget

applications CMIA Allowable Costs/Uses of Funds No inventory/tracking of equipment

IDEA Part B: Special Education MOE documentation Proportionate Share

Separate Tracking

All Federal funds MUST be tracked separately from other funding sources.

EDGAR 76.730o Records shall be kept that fully show the amount of Federal funds

received and how the funds are expended. EDGAR 80.20

o A grantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds.

MO Financial Accounting Manualo Federal funds generally require separate identification and reporting

within the LEA’s audit report.

Cash Management Improvement Act

The Cash Management Improvement Act (CMIA) requires LEAs/Districts to demonstrate when receiving federal funds that they have either already spent the funds or will spend the funds within three business days of receipt of funds.

Payment requests may only include amounts already expended and/or amounts that will be expended within three business days of receipt of funds.

Violating CMIA requires interest to be calculated and funds returned.

Re-coding Expenditures

LEAs that receive federal funds through the Early Childhood Special Education (ECSE) or High Need Fund (HNF) payments must ensure they are completing journal vouchers/entries for those funds within three (3) days of receipt of the funds, or that they will expend within three (3) days, to be in compliance with CMIA.

Inventory Control (EDGAR 80.32)

Equipment & Property records (Inventory List)

Physical inventory (at least every two years)

Control system to prevent loss, damage, theft (all must be investigated), LOCKS!

Adequate maintenance procedures If authorized to sell, proper sales

procedures for highest return

Note: $5000 according to EDGAR but MO has a lower threshold

Fiscal Guidance for Federal Grants

The purpose of this document is to provide a reference to the fiscal requirements and procedures necessary for responsible financial management of federal grant programs. The intent is to provide a general overview of federal requirements and assist subgrantees/ recipients in the proper fiscal accountability for federal funds as prescribed by law.

http://www.dese.mo.gov/fas/GeneralFederalGuidance.html

Resources

DESE Accounting Manual (School Finance)

http://dese.mo.gov/divadm/finance/acct_manual/

NCLB Administrative Manual

http://www.dese.mo.gov/divimprove/fedprog/grantmgmnt/documents/qs-fc-admin-manual-June-2012.pdf

Individuals with Disabilities Education Act (IDEA) Regulations

http://www2.ed.gov/legislation/FedRegister/finrule/2006-3/081406a.pdf

MO State Plan for Special Education

http://dese.mo.gov/se/stateplan/index.html

Fiscal Monitoring resources

http://dese.mo.gov/divspeced/Finance/FiscalMonitoring.html

ANGIE NICKELLDIRECTOR

SPECIAL EDUCATION FINANCE

angie.nickell@dese.mo.gov573-751-4385

PAT KAISERDIRECTOR

FEDERAL FINANCIAL MANAGEMENT (NCLB)

pat.kaiser@dese.mo.gov573-751-8643