Texas Education Agency Division of Federal Fiscal Monitoring Audit Findings and How to Avoid Them...

Texas Education AgencyDivision of Federal Fiscal Monitoring

Audit Findings and How to Avoid Them

October 8, 2014

About the Presenter

Roger Hingorani

ManagerGrant Review UnitDivision of Federal Fiscal MonitorsTexas Education Agency(512) [email protected]

October 8, 2014 Copyright © 2014 by TEA 2

Agenda

•Acronyms Used In This Presentation•Division of Federal Fiscal Monitoring•Reviews Conducted•Common Findings•How to Avoid Them•Useful links


Acronyms Used In Presentation

• CFR – Code of Federal Regulations • FASRG – Financial Accountability School Resource Guide• LEA – Local Education Agency• NCLB – No Child Left Behind• OMB – Office of Management and Budget• PAR – Personnel Activity Report• TEA – Texas Education Agency• PER-DIEM – Daily Allowance for Expenses


Division of Federal Fiscal Monitoring (FFM)

• Grant Review Unit (GRU)• Conducts monitoring activities including both desk and

onsite reviews as part of TEA’s annual risk assessment and investigations for complaints and/or management referrals of the discretionary and formula grants awarded to school districts, charter schools, regional education service centers and non-profit entities.

• Conducts reviews of annual financial reports for compliance with federal single audit requirements and issues management decisions related to audit findings pertaining to any federal awards passed through the TEA.



• Monitoring Review Unit (MRU)• Conducts monitoring activities including desk

reviews of LEAs as part of the TEA’s annual risk assessment

• Monitoring for special conditions imposed on discretionary and formula grants awarded to school districts, charter schools, regional education service centers and other entities.


January 28, 2014 Copyright © 2014 by TEA 7

Is Your School District in Compliance with Grant Requirements?


Grant Review Unit

• 55 Desk and Onsite Reviews Conducted• 41 Reviewed had Findings• 27 had Findings with Questioned Costs• $165,348.57 in Total Questioned Cost• $157,444.14 in Questioned Cost Resolved through

Corrective Actions Taken


Common Findings - Financial Management Systems

1. Internal Controls - Effective ControlLack of Written Policies and Procedures

Reporting of Expenditures for ReimbursementCredit CardsTravelEmployee ReimbursementsInventory ControlsTime and EffortBudgetary ControlsPurchasing


Common Findings – Payroll

2. Time and EffortNot adequately maintained or after-the-fact

a.Periodic Certifications Prepared in Advance not after the factNot signed by employee or supervisor

b. Personnel Activity Report (PAR) Did not account for 100% of the time

compensated Budgeted Hours Reported on PAR



2. Time and Effort continued…

Not adequately maintained or Not after-the-factc. Substitute Time and Effort Reporting

System Not approved by TEAThe employee did not work on a set schedule

Semi-Annual Certificate not signed by employee and supervisor



3. Lack of Supporting Documentation

Signed and Dated Job Descriptions Tutoring / Extra-duty Pay Supplemental Pay Agreement

Time Sheets Documentation Demonstrating Highly Qualified Status



3. Lack of Supporting Documentation continued…

Amounts Recorded in the Payroll Journals does not match with the payroll costs charged to the grant in the General Ledger

Payroll costs charged to the incorrect grant periodPayroll checks issued in midmonth every month prior to services being performed.

Expenditures claimed for reimbursement not recorded in financial records


Common Findings

4. Budgets/Amendments

Positions not Approved in the TEA Approved Program Budget

Encumbrances not Recorded in the General Ledger.

Incorrect Fund Codes Used for Reporting Expenditures


Common Findings

4. Budgets/Amendments – continued…

Items Requiring TEA Approval Purchased without Approval(Capital Outlay Items)

Cost Incurred from Class Object Codes not Approved in the Program Budget.

Budget Amendments-25% Variance/Threshold


Common Findings

5. Required Set Asides

Amounts not appropriated/Identified in financial records to match amounts reserved for specific activities such as a Districtwide Parental Involvement or Districtwide Professional Development Activities as reported on Schedule PS-3101 of Consolidated Federal Grant Application


Common Findings – Non-payroll

6. Lack of Source Documentation Third Party Documents such as an invoice/billing statement to support expenditure

Lack of Approval from Authorized PersonnelLack of Purchase Order. Gift Cards without additional support



6. Lack of Source Documentation continued…

Incomplete Receipts/Invoices Credit Card Statements without Backup Receipts Lack of Valid Contracts/Agreements for

Professional/contracted Services Proof of Attendance: Registration/Certificate of

Completion



7. Unallowable costsNecessary and Reasonable

Non-Educational Fieldtrips Not Aligned with Camus/District Improvement PlanAttend out of town training available in city of domicile



7. Unallowable costs – continued…

TravelLack of Authorization for TravelFull PER-DIEM Claimed without attestation of actual funds expended

Use of grant funds to attend training/conference unrelated to the Program.



7. Unallowable costs continued…

Food Costs/Incentives Food for Staff Meetings/Development Full Meals for Parental Involvement Food as Incentives for Student Participation



8. Allocable Costs Goods / Services at the end of the grant period

- Stockpiling of Supplies

Cost Allocation Plans for:-Rent/Utilities-Maintenance and Repair Agreements-Other Shared Costs


Common Findings - Other

9. Period of Availability- Pre-Award Costs Charged to the Grant without TEA

Approval- Annual Subscriptions/Software Licenses-Outside of

the Grant Period10.Supplement / Supplant

a. Curriculum Management Systems / Softwareb. State Mandated

– Required Trainings – Books


Common Findings - Other

11. Shared Service AgreementsLack of shared service agreement with member

districtsAgreement not clear about roles and

responsibilities of fiscal agent and member district

Lack of oversight by Fiscal Agent regarding expenditures of grant funds.


Common Findings - OtherShoolwide Program: Consolidation of State,

local & Federal Funds

12. Schoolwide Program out of ComplianceLack of Documentation to Demonstrate Needs

Assessments School Improvement Plans Missing Key Elements Methodology demonstrating the accounting for

expenditures from schoolwide pool at each participating campus

Demonstration of supplement not supplant requirements on schoolwide program


Common Findings - OtherShoolwide Program: Consolidation of State,

local & Federal Funds Continued…

12. School Improvement Plan missing key elementsTen Required ComponentsGoals, objectives, Targets based on Identified Needs

Assessment (Comprehensive Needs Assessment)Listing of specific federal, State and local funds

consolidated and amount each fund source contributed to the consolidated pool

Demonstration of Intent and purpose of each federal program whose funds were consolidated.


How to Avoid Findings

Strong Internal Controls•Policies and Procedures (P & Ps)•Tone at the Top – Adherence to P & Ps and Compliance Requirements

•Organizational Structure - Identify reporting/supervisory responsibilities as well as assignment of authority and responsibilities

•Provide Adequate Training


How to Avoid Findings

Compliance with Statutory RequirementsProgram Statutes

• Elementary and Secondary Education Act (NCLB) Regulations

• Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (34 CFR 80 )

• OMB Circular A-87 (Cost Principles for State, Local, and Indian Tribal Governments

Guidance• Non-regulatory Guidance• Application Guidance


Useful Website Links

Texas Education Agency• http://www.tea.state.tx.us/United States Department of Education• http://www.ed.gov/index.jhtmlOffice of Management and Budget• http://www.whitehouse.gov/omb/circulars/Code of Federal Regulations• http://www.gpoaccess.gov/cfr/index.htmlOffice of Executive Councils, Chief Financial Officers Council • https://cfo.gov/COFAR/


http://www.tea.state.tx.us/

http://www.ed.gov/index.jhtml

http://www.whitehouse.gov/omb/circulars/

http://www.gpoaccess.gov/cfr/index.html

More Useful Links (TEA)

TEA: Substitute System of Time-and-Effort Reportinghttp://www.tea.state.tx.us/index2.aspx?id=2147510385TEA: Financial Accountability System Resource Guidehttp://www.tea.state.tx.us/index2.aspx?id=25769817568&menu_id=645TEA: Grantshttp://www.tea.state.tx.us/index2.aspx?id=2147487920&menu_id=951Grant Management Resourceshttp://www.tea.state.tx.us/index4.aspx?id=8339&menu_id=951


http://www.tea.state.tx.us/index2.aspx?id=25769817568&menu_id=645

http://www.tea.state.tx.us/index2.aspx?id=2147487920&menu_id=951

Copyright © Notice

The materials are copyrighted © and trademarked ™ as the property of the Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA, except under the following conditions:

1. Texas public school districts, charter schools, and Education ServiceCenters may reproduce and use copies of the Materials and RelatedMaterials for the districts’ and schools’ educational use withoutobtaining permission from TEA.

2. Residents of the state of Texas may reproduce and use copies of theMaterials and Related Materials for individual personal use only

withoutobtaining written permission of TEA.

3. Any portion reproduced must be reproduced in its entirety and remainunedited, unaltered and unchanged in any way.


Copyright © Notice

4. No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged.

Private entities or persons located in Texas that are not Texas public school districts, Texas Education Service Centers, or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from TEA and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty.

For information contact: Office of Copyrights, Trademarks, License Agreements, and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, TX 78701-1494; phone 512-463-9270 or 512-936-6060; email: [email protected].


mailto:[email protected]

Texas Education Agency Division of Federal Fiscal Monitoring Audit Findings and How to Avoid Them...

Documents

Transcript of Texas Education Agency Division of Federal Fiscal Monitoring Audit Findings and How to Avoid Them...