Effective Title III Program Administration

Dr. Haywood L. Strickland, President and CEOWiley College * Marshall, Texas

June 3-5, 2008

It’s All About Stewardship Excellence

• Fiscal Accountability

• Program Administration

• Monitoring

• Demonstrating Results

Did you do what you said you were going to

do? At what cost?

PART I: FISCAL ACCOUNTABILITY

ORDER OF PRECEDENCE WHEN DECIDING ALLOWABILITY OF COST

• Legislation

• Program Regulations

• EDGAR (Incorporates OMB A-21 Cost Principles for Educational Institutions)

• Approved Application

ALLOWABLE COSTS(USE OF FUNDS)

• Legislation – Section 323 of Higher Education Act of 1965 as amended U.S. Code 1060

• Part B, Historically Black Colleges & Universities

ALLOWABLE COSTS• Section 323 (a) General Authorization: Use of

funds– Purchase, rental, or lease of scientific or

laboratory equipment for educational purposes, including instruction and research purposes.

– Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities including purchase or rental of telecommunications technology equipment or services.

Allowable Costs (Sec. 323 continued)– Support faculty exchanges, and faculty development

and faculty fellowships to assist in attaining advanced degrees in their field of instruction.

– Academic instruction in disciplines in which African Americans are underrepresented.

– Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials.

– Tutoring, counseling, and student service programs designed to improve academic success.

Allowable Costs (Sec. 323 continued)– Funds and administrative management, and

acquisition of equipment for use in strengthening funds management.

– Joint use of facilities, such as laboratories and libraries.

– Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector.

– Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school that shall include, as part of such program, preparation for teacher certification.

Allowable Costs (Sec. 323 continued)– Establishing community outreach programs which will

encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education.

– Establishing or improving an endowment fund.

– OTHER ACTIVITIES submitted pursuant to section 323 that:

1. contribute to carrying out the purpose of this part; and

2. are approved by the Secretary as part of the review and acceptance of such application

EDGAR REQUIREMENTS

• EDUCATION GENERAL ADMINISTRATIVE REGULATIONS (EDGAR)

• SECTION 72.27 ALLOWABLE COST– Incorporates OMB Circular A-21, Major Cost

Principles for Educational Institutions

ALLOWABLE & UNALLOWABLE COSTS

• OMB Circular A-21

ObjectiveProvides clear cut guidance on all expenditures: allowable, allocable, reasonable, and prudent.

OMB A-21 COST PRINCIPLES

• Purpose

– Establishing principles for determining costs applicable to grants, contracts, and other agreements with educational institutions.

OMB A-21 COST PRINCIPLES

• Applicability

– All federal agencies that sponsor research and development and other work at educational institutions shall apply the provisions of this Circular in determining costs incurred for such work.

OMB A-21 COST PRINCIPLES

• TABLE OF CONTENTSA. Purpose and Scope

B. Definition of Terms

C. Basic Considerations

D. Direct Costs

E. Indirect Costs

F. Identification and assignment of indirect costs

OMB A-21 COST PRINCIPLES

• TABLE OF CONTENTS (Continued)G. Determination & Application of Indirect

Cost Rate or Rates

H. Simplified Method for Small Institutions

I. Reserved

J. General Provisions for Selected Items of Costs

K. Certification of Changes

FIRST LEVEL DETERMINATION OF ALLOWABLE COST IN OMB A-21

• ALLOCABLE TO THE GRANT– Benefits received

• REASONABLE– Necessary for the operation

• ALLOWABLE– Circular, law, local regulation

• PRUDENT– Comparability with use of institutional funds

UNALLOWABLE COSTS

• OMB Circular A-21, Section J– Alcoholic Beverages

– Communications (i.e. line charges, unit charges)

– Donations & Contributions

– Entertainment (i.e. anything remotely related)

– Executive Lobbying (i.e. attempting to improperly influence the decisions of officers or employees of the Federal Government)

UNALLOWABLE COSTS (Continued)

– Exclusive Memberships, Subscriptions & Professional Activity (i.e. Country Clubs)

– Pre-agreement Costs (Unallowable unless pre-approved)

– Scholarships & Student Aid

INDIRECT COSTS

INDIRECT COSTS

ARE NOT ALLOWABLE

IN THE TITLE III PROGRAM

THINGS TO REMEMBER

• TO DETERMINE IF A COST IS ALLOWABLE OR

UNALLOWABLE, CHECK THE FOLLOWING SOURCES:

• The Law• Program Regulations• EDGAR, 34 CFR 74.27 Allowable Costs• OMB Circular 21• Approved Application

ACCOUNTABILITY

• GPRA – 1993– Government Performance

and Results Act– Ties federal funding to results– Greater accountability

» GPRA indicators reflected in objectives and activities

» Include milestones in objectives to determine success accurately

DRAWDOWN POLICY

• Request funds for immediate needs

• Minimize time between requests & expenditures (72 HOURS)

• Rate of draw downs commensurate with approved scope & milestones

DOE CONCERNS

• Large amounts of unobligated funds• Excessive or infrequent requests• Project goals/objectives not met – DOE

monitors– Student population is not being served

as proposal objectives indicates– Maybe, HBCU’s DON’T NEED THE

MONEY

GAPS MONITORINGOF AVAILABLE BALANCES

• Within 90 days, “flags” grants with 70% or more of funds remaining

• Verifies financial data reported on annual performance report

PART II: TITLE III PROGRAM ADMINISTRATION AND

MANAGEMENT

ELEMENTS OF AN EXEMPLARY TITLE III

PROJECT ADMINISTRATION PROGRAM

• RESPONSIBILITIES OF A TITLE III PROJECT DIRECTOR

A. Provide leadership and coordination

B. Facilitate integration of Title III activities

C. Support an ongoing process of institutional effectiveness

D. Develop and update a project handbook to include policies and procedures

E. Monitor expenditures and reconcile monthly

F. Ensure conduct of an annual external evaluation

RESPONSIBILITIES (Cont.)

G. Ensure that Title III funds are disbursed in keeping with:

• Education Departments General and Administrative Regulations (EDGAR) (Revised June 23, 2005);

• A-110 (Revised April 25, 2007);

• OMB Circular A-21 (revised May 10, 2004); and

• A-133 (revised June 27, 2003).

RESPONSIBILITIES (Cont.)

Roles and Responsibilities of Title III Activity Directors

The Title III Activity Director is responsible for….

1. Activity management and oversight

2. Implementation of objectives

3. Supervision and monitoring of activity staff

4. Reporting activity status/progress

5. Approval and processing of requisition

6. Keeping abreast of grant regs & information

7. Maintaining up-to-date activity files

8. Maintaining up-to-date equipment inventory

Roles and Responsibilities of Title III Activity Director (Cont.)

1. Budget Monitoring and Oversight

2. Staff meeting attendance

3. Approval of travel requests

4. Preparation and submission of annual plan of operation

5. Documentation of objective implementation

6. Preparation for and participation in internal and external Title III activity evaluation, site review, etc.

MAJOR COMPLIANCE PROVISIONS

A. EDGAR

1. Property Controls

2. Prior Approval Requirements

3. Notification of Change in Key Personnel

4. Annual Evaluations of Performance

B. OMB Circular A-110

1. Available over the Internet at http://www.whitehouse.gov/omb/circulars/a110_compliance/06/pt3.pdf

2. An institution cannot hold excess cash on hand. (Funds to be spent in 72 HOURS)

3. A-110 also describes “Davis-Bacon” compliance requirements.

C. OMB CIRCULAR A-21The Cost Principles

• As a reminder, follow four guidelines

ALLOWABLEALLOCABLE

REASONABLEPRUDENT

OMB CIRCULAR A-133/THE SINGLE AUDIT REQUIREMENT

A-133 single audit requirement pertains to all federal grants which exceed $500,000. A-133 auditing defines institutions as:

Low-Risk or High Risk

D. OMB CIRCULAR A-133/The Single Audit Requirements

1. A system of checks and balances

2. Proof of written policies and procedures

3. Property Control Management

OMB CIRCULAR A-133/The Single Audit Requirements (cont.)

4. A review of all reports filed• The Financial Transactions (the 269s; 272s);• Performance Reports;• Annual Audit must be filed with the Federal

Audit Clearinghouse (which must include any corrective action plans prepared by the institution)

5. Proof of compliance with the Davis-Bacon Act.

6. Proof that all Expenditures Constitute Allowable Costs.

OMB CIRCULAR A-133/The Single Audit Requirements (cont.)

PART III MONITORING BEGINS WITH MEASURABLE OBJECTIVES

Writing Measurable Objectives

• There are many formats for writing objectives. During this workshop we will use the National Laboratory for Higher Education (NLHE) format and content.

A well written objective should take the form of

a single statement that contains the following:

1. QUANTIFIED OUTCOME

– State the projected end result in measurable terms

A well written objective should also include….2. Time

– Specify the date that the objective will be completed.

The following are optional parts of an objective:

A. Responsibility:State what person(s) or unit is/are responsible for implementing the objective.

B. Conditions:Specify special conditions (if any) that will or may impact that outcome of the objective.

Many grants, such as the Title III Grant, require each objective to have an anticipated result.

The anticipated result statement should include…• Performance Level and Baseline Data

• Evaluation Method(s) Date(s)

• Type and Location of Documentation

MONITORING

The Ongoing Review of Activities

to Manage Performance

•Title III Activity Timetable

•Internal Monitoring of Progress

•Monthly Time and Effort Reports

•Updated Equipment Inventory Records

FISCAL MONITORING

• Monthly Expenditure Reports by Activity

• Reconciled Monthly to Capture Discounts, Cost-Savings, and Consistency with Drawdown Reports

• Required for A- 133 Audit & Timely Submission to the Audit Clearinghouse

• Facilitate Title III E-Reporting

GRANTEE’S RESPONSIBILITIES

• Project success & financial accountability

• Submit annual & final performance reports

• Valid & reliable data

• Report of GPRA standards & indicators

GRANTEE’S RESPONSIBILITIES

• ON SITE:– Funded application & grant award

– Previous audits & site visit reports

– Annual Performance Reports

– Project revision(s) documentation

– Current budget & personnel list

COMMON AUDIT EXCEPTIONS

• Things that should NEVER happen:– Poor recordkeeping

– Unallowable costs or activities

– Missing time & effort reports

– Failure to follow procurement standards

– Lack of internal controls

– Failure to obtain prior approval if required

– Poor cash management (excessive draws)

AUDIT REQUIREMENTS

• Non-Federal audit IF expending $500,000 or more annually in Federal awards

• Mail to Federal Audit Clearinghouse

OMB CIRCULAR A-133OMB CIRCULAR A-133

EXPANDED AUTHORITIES

• GOALS: (Promote Successful Project Outcomes)

– Increase flexibility

– Increase accountability

– Reduce paperwork burden

– Develop partnerships

EXPANDED AUTHORITIES (Cont.)

• PRE-AWARD COSTS:

• May be incurred up to 90 days before budget period begins

• NO PRIOR APPROVAL REQUIRED

EXPANDED AUTHORITIES (Cont.)

• PRE-AWARD COSTS OVERVIEW:– Reasonable expectation of receiving a

grant

– Incurred at own risk

– ED funds are not available for draw down until the budget period begins

– NOT for cost over-runs

EXPANDED AUTHORITIES

• CARRYOVER:– Unexpended funds carried over without

prior approval

– May be used for allowable costs within the approved scope• Complete unfinished objectives• “Other” activities within scope

EXPANDED AUTHORITIES (Cont.)

• CARRYOVER (continued):

– Program Officer may require• Written statement to include:

–How will unexpended funds be used?

–When will unexpended funds be used?

–In rare cases, new funds may be reduced

PERFORMANCE MONITORING:

The Routine Tracking of:

Activity Inputs and Outputs

Adequacy of Project Management

Extent of Compliance

Level of Effort

Adequacy of Property Controls

MONITORING

Continuous Internal Review of Data to Manage the Implementation Process

EVALUATION

Periodic External Review of Information to Describe Short and Long Term Outcomes and Benefits

PART IV DEMONSTRATING RESULTS

EXTERNAL EVALUATION

ENCOMPASSES BOTH

FORMATIVE & SUMMATIVE

METHODOLOGIES

KINDS OF EVALUATIONS

• FORMATIVE

for improvement purposes

• SUMMATIVE

to describe program impacts

TYPICAL FORMATIVE EVALUATION ACTIVITIES

• Time and Effort Reports

• Property Control Procedures

• Monthly and Quarterly Progress Reports

• Fund Accounting Procedures

• Internal Monitoring Strategies

• General Grant Management Procedures (Checks and Balances)

Include Review of:

TYPICAL SUMMATIVE EVALUATION ACTIVITIES

• Annual E-Performance Reports

• A-133 Audit Report Findings & Follow-Up

• Assessment Instruments and Results, and

• Level of Institutional Commitment

Include Review of :

PURPOSES OF EVALUATION

• Document Accomplishments

• Provide Data on Cost-Effectiveness

• Describe Program Effectiveness

PURPOSES (Cont.)

• Document Compliances with Program Regulations

• Ensure Agency (Donor) that Funds were used as Approved

THE EVALUATION PROCESS ENTAILS

Monthly Progress Report

Annual E-Performance Report

Minutes of Meetings

Assessment Surveys and Results

Equipment Inventory Records

•Verification of Relevant Documentation

Title III Policies and

Procedures Manual

EVALUATION PROCESS FOCUS

1. What are the Actual Outcomes?

2. What were the Intended Outcomes?

3. Relationship of Actual Outcomes to CDP Priorities.

4. Relationship of Resources Used to Actual Outcomes.

5. Were there Unexpected Outcomes?

THE EXTERNAL EVALUATION PROCESS ULTIMATELY

DOCUMENTSINSTITUTIONAL

Accountability AND

Performance

AND

Achievement

Thank you for your participation in this workshop

Haywood L. Strickland hstrickland@wileyc.edu

June 3-5, 2008