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MDE and ISD Partnership:

Darkening the Dotted Lines

Monitoring and Compliance

Training: Financial Management

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Overview

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Financial Management

Pre-Training Assessment Survey

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Financial Management:

Timekeeping

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Timekeeping: Content

Financial Management System

(FMS)

Federal Timekeeping Requirements

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Timekeeping: Components of a Good FMS

Written Policies and Procedures New Staff/Position Training Adherence to Approved Policies and

Procedures Annual Review and Training Updates Timely

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Timekeeping:Regulations

2 CFR 225 (formally OMB Circular A-87, Attachment B, Item 8h)

PowerPoint: Federal Fiscal Requirements. Michigan Department of Education, Office of School Improvement

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Timekeeping: Definitions and Terms

Cost Objective - a function, organizational subdivision, contract, grant, or other activity for which cost data are needed and for which costs are incurred

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Timekeeping: Definitions and Terms

Personnel Activity Report (PAR) - record maintained by employee working on more than one cost objective which is prepared after the fact, reflecting the actual total activity of the employee, at least monthly and signed and dated by the employee

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Timekeeping: Definitions and Terms

Semi-Annual Certification - certification that employee worked on a single federal award or cost objective.  Must be prepared at least semi-annually, signed, and dated by employee or supervisory official having firsthand knowledge of the work performed

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Timekeeping:Overview

Written Policies and Procedures

Multiple Activities or Cost Objectives

Single Federal Award or Cost Objective

Estimations

Quarterly Comparisons

Adjustments and Budget Revisions

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Policies and Procedures: Payroll Components

There are written policies and procedures governing payroll administration

Salaries from the Financial Expenditure Report (formerly DS-4044) agree with the district’s general ledger payroll accounts for all federal grant programs

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Policies and Procedures: Payroll Components

All salary costs for work performed are within the grant period

Salaries must comply with the employment contract which indicates the annual salary scale for the grant period

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Policies and Procedures: Timekeeping

There are written policies on recording time distribution for employees who work on one or more federal award or cost objective

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Timekeeping: Multiple Cost Objectives

For employees working on multiple activities OR cost objectives:

The district has Personnel Activity reports (PARs)

The PARs are prepared at least monthly

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Timekeeping: Multiple Cost Objectives

The PARs are signed and dated by the employee

The PARs account for the staff person’s actual total activity

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Timekeeping: Multiple Cost Objectives

The PARS are actual real-time records and not prepared in advance of the time period covered

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Example-Personnel Activity Report

Example 1:

Single Award/Multiple Cost Objectives

A school district could have an employee funded with a single federal award and working on multiple cost objectives

In IDEA, a physical therapist could work part time at the local district and part time at a non-public school where data is required for the proportionate share, a PAR is required

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Example-Personnel Activity Report

Example 2:

Multiple Awards/Multiple Cost Objectives

A school district could have an employee funded with multiple federal awards and working on multiple cost objectives

In IDEA, Part B Sec. 611 supports students ages 3-21 and Sec. 619 supports ages 3-5. If the employee works with students 3-5 and 6-21 a PAR is required

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Timekeeping: Single Federal Award or Cost

ObjectiveFor employees working solely on a single federal award OR cost objective:

The district has certifications or a blanket certification showing that the employees worked solely on a single federal award or cost objective

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Timekeeping: Single Federal Award or Cost

ObjectiveThe certifications are prepared at least

semi-annually

The certifications are signed by the employee or a supervisor with first-hand knowledge of the work performed by the employee and are dated after the fact

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Timekeeping: Single Federal Award or Cost

Objective

The certifications are actual real-time records and not prepared in advance of the time period covered

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Example-Semi Annual Certification

Example 1:

Single Award/Single Cost Objective

A school district could have an employee funded with a single federal award and working on a single cost objective

In IDEA Part B Sec. 611, a physical therapist working all their time at the local district, a semi annual certification is required

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Example-Semi Annual Certification

Example 2:

Multiple Awards with Single Cost Objective

A school district could have an employee funded with more than one federal award working on a single cost objective, where the awards support the cost objective

In IDEA, Part B Sec. 611 supports students ages 3-21 and Sec. 619 supports ages 3-5. If the employee works with only ages 3-5 on both awards, a semi annual certification is appropriate.

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Timekeeping: Estimations

The system for establishing estimates produces reasonable approximations of the activity performed

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Timekeeping: Quarterly Comparisons

At a minimum, quarterly comparisons are made of actual costs to budgeted distributions based on monthly activity reports

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Timekeeping: Adjustments

Adjustments are made to costs charged to federal awards based on the activity actually performed

These adjustments can be made annually only if the quarterly comparisons show differences between budgeted and actual costs of less than 10%

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Timekeeping: Budget Revisions

Budget estimates or other distribution percentages are revised at least quarterly, if necessary, to reflect changed circumstances

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Timekeeping:FAQs

What are the audit requirements?

Your auditor will take a sample of expenditures and request timekeeping documentation for anyone charged to federal funds.  If your records are insufficient, the auditor will include a finding in the audit report and may question costs.  See the Michigan School Auditing Manual for further information

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Timekeeping:FAQs

What happens if you cannot produce the documentation for the single audit?

Auditor will site 100% of salaries as questioned costs and could result in a penalty of repayment

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Timekeeping: Other Resources

The Michigan School Auditing Manual

Report from the Time Log Work Group, Michigan Department of Education, Office of School Improvement, February 13, 2008

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Timekeeping: Other Information

Contacts

• MDE: Office of Audits

• ISD:

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LEA Fiscal

Review

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Resources

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Committee

Membership