Presentation by Gloria VenablePerkins New Coordinator Training

September 9, 2010

FINANCIAL MANAGEMENT

Pervasive Fiscal IssuesExpenditures not allowable$ paid but not benefitting that intended by

Perkins LegislationPerkins supports CTE programs$ intended for program improvement

Ask question: How will expenditure improve performance indicators

PARS not legally compliantImproper inventory controls

BUDGET CATEGORIESEmployee Salaries and BenefitsEquipment and SuppliesPurchased Services & Professional

Development

BUDGET DETAILEmployee Salaries & Benefits

SalariesBenefitsExtra Help

Equipment & SuppliesCapital & Inventorial PurchasesSupplies (non-inventorial)Instructional MaterialsOther Equipment/Supplies

Budget DetailProfessional Services & Professional

DevelopmentTravel and ConferencesOther Services

FINANCIAL CAUTIONS . . . .Pervasive Fiscal Issues

Improper internal controls or management systems

Fraud schemesSupplanting

Documentation “If you take the $, then you must provide

the documentation!”Students logs, Sign in sheetsPARSInventory records Reimbursement backup documents Professional Development logs

Back up fileAgendas relating to core indicator improvementon campus workshops agendas, sign in sheets

Source Documentation

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Types of documents:Canceled checks (or similar bank record)Bills, Invoices, ContractsPayrollsTime and attendance recordsContract and sub-award documents

Electronic copies ok Must retain for at least 3 5 years

(Statute of Limitations = 5years)

Internal Controls

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Goal: Assess the quality of internal controls over time and ensure any findings are promptly resolved.

Ongoing program and fiscal monitoring Regular oversight by supervisors Record reconciliation Formal program reviews / audits OMB Circular A-133 audits Include policies and procedures for correcting any

findings in a timely manner.

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Internal controls are tools to help program and financial managers achieve results and safeguard the integrity of their programsIncludes processes for planning, organizing,

directing, controlling, and reporting on operations

Internal Controls

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Effectiveness and efficiency of operationsReliability of financial reportingCompliance with applicable laws and

regulationsSafeguarding assets

Objectives of Internal Controls

Perkins Issues$ spent are to benefit CTE Programs

Activities, Equipment Professional Development involving travel

Record expenditures on Professional Development Log

Keep backup document file by program year (agenda, purpose of meeting)

If benefitting academic programs must be for purpose of integrating academic instruction into CTE

Include narrative to show how travel benefits CTE students/programs

Proration of expenses may be appropriate

Professional Development CautionsNot a travel fund, nor a reward for a good job

fund$ spent should to relate to improvement of a

core indicatorInstitution/Program policy on PD may include

specific requirements to be met by participantCommitments for teaching/sharingCommitments for revision of curriculumCommitments for related tasks

If no policy in place, perhaps the institution team would develop one to maximize use of funds.

TravelDon’t pay from statements—have invoicesIf paid to Visa, documentation should be the

actual invoices or other evidence of expenditure

i.e. hotel bill, restaurant receipt, etc. Be prepared for auditing of travel

TIME DISTRIBUTION RECORD

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PARS:After-the-fact recordTotal activity for which employee compensated

At least monthly *

Signed and dated by employee

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PAR CONFIRMATION SIGNATURE

Confirmation must be done by “responsible person with suitable

means of verification”

Time Card are not acceptable as PARS

Inventory Management

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Must have inventory management systemProperty records

Description, serial number or other ID, title info, acquisition date, cost, percent of federal participation, location, use and condition, and ultimate disposition

Physical inventory and reconciliation of recordsRequired EVERY TWO YEARS

Control system to prevent loss, damage, theft All incident must be investigatedDistricts are responsible for lost / stolen property

Inventory Management

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Title vests in the granteeMust protect against unauthorized

useMay use for other projects as long as no

interference with intended useIncidental Benefit

Must ensure adequate maintenance

Supplies

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Supplies = Everything ElseEDGAR does not set out any specific

tracking requirementsBut, as a practical matter, ED expects sub

grantees to track all property purchased with federal funds in order to prove there has been an allocable benefit to the federal program

Supplanting

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Supplanting is determined on a case by case basis and is fact specific

Federal Funds Cannot Displace State and Local Funds!!

Section 311(a) – Perkins

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Test #1 Was the activity paid for in the prior

year with non-federal funds?

Test #2 Was the activity required by state/local law or

policy?

Supplanting

Fiscal UpdatesAdmin 0P1- Cost for managing grant,

reporting to stateExpenditures must show value to grant

Document all expendituresOr, use a federal indirect cost rate letter to

document Grant Administration is 5% of the grant

amount

FEDERAL INDIRECT COST RATE LETTERIssued by Department of Health and

Human ServicesMust be up to date Copy submitted for state fileNo further documentation of admin

required

Compliance Site VisitsSeptember through April Increased technical assistanceEmphasis on systems and internal controlsEmphasis on success of activities in

previous yearGoing forward will review improvement

plan progress

Institutions selected based on risk factors institution to show that systems are in place

to safeguard funds and equipmentInstitution to demonstrate properly

documented expendituresShow that activities are carried out as

approvedShow efforts are directed to student

achievement

Supplemental Monitoring

No Fed monitoring findings at Post Secondary level

OVAE required Arkansas to develop a Risk analysis system

Based on point systemStaff Identifies sites at most risk Review financial operations, point out

problems, identify inappropriate practicesIf expenditures unallowable, institution must

pay back $

WEIGHTED BY RISK FACTORSINSTITUTION

Grant size

% salaries, C/P year

Coordinator tenure

% funds unused previous year

Financial Report after Aug 1

Annual Plan by 5/31

Frequency #Amendments

Quarterly req. Reimbursement

OTHER

09-10 site visit findings

Equipment purchases

Workshop attendance

POS issues

Other

Other: Site visit findingsEquipment PurchasesPrograms of StudySpecial populations reportingOther factors as identified

Pattern of Inappropriate expendituresLack of response or cooperation in solving

identified areas of concern

Risk Management Assessment

Improvement PlansNumber of Indicators DeficientSuccess of previous year’s activitiesLikely to replace compliance site visitsStaff elected intensive work with

institutions to put systems in placeNoncompliance issues will be regarded as

findings

Risk Management Assessment Going Forward

SUPPLEMENTAL MONITORINGAll Institutions are subject to supplemental

monitoring during Perkins IVUnder consideration by state staff

Combine supplemental monitoring with compliance site visit

Incorporate ACE auditor into high risk institution monitoring visit

Form to be used will be posted on web site Schedule to be published

A Pause