threshold system presented by jan stanley, state title i director office of assessment and...
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Threshold System
Presented by Jan Stanley, State Title I Director Office of Assessment and Accountability
Fall Title I Director’s ConferenceOctober 23-25, 2007
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Necessity for increased fiscal awareness ED placing more emphasis on fiscal and
administrative requirements due to concerns at state and local levels High profile fraud and abuse Concerns about quality of single audits
Office of Inspector General-part of on-site SEA monitoring visits
Threshold system regulations in Part 80 of EDGAR apply to all grantees and sub grantees
Improper Payments Act of 2002 requires a tracking of items purchased with federal funds 2
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Essential Questions
1. From what government document are the basic fiscal threshold requirements derived?
2. What are the three components of a threshold system that ED deems important for the effective management of federal grants?
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Essential Questions
3. Which OMB Circular identifies allowable expenditures under general cost cutting principles?
4. What two parts of a property management system (inventory) are required, but most neglected within district procedures?
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Threshold system requirements Derived primarily from the Education
Department General Administrative Regulations (EDGAR)
Three important systems that are critical for effective grants management are: financial management (74.21 and 80.20); procurement (74.41-48 and 80.36); and equipment/inventory management (74.34 and
80.32).5
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Threshold System RequirementsWhat Rules Apply?
Overall, must use fiscal control and reporting procedures that will ensure the proper disbursement of and accounting for federal funds
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Threshold System Requirements
All grantees and subgrantees must implement systems that meet specific requirements of EDGAR
FMS = 80.20(b)
Procurement = 80.36(b)-(i)
Inventory = 80.32(c)-(e
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General Principles In general, the SEA
and the LEA must implement controls over federal funds
ED looks to “systems,” not individuals, to ensure funds are spent appropriately
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Financial management Definition-controlling and accounting for
federal funds and assets Used to make informed programmatic decisions Used to substantiate and document expenditures
Seven standards described in Section 80.20(b)of EDGAR
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Financial management rules 7 requirements:
Financial Reporting Accounting Records Internal Control Budget Control Allowable Cost Source Documentation Cash Management
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Examples of Allowable Cost Controls
Grant manuals Formal procedures or statue relating to costs Guidelines for determining allowable costs
(OMB Circular A-87, EDGAR) Access to helpful resources and program guidance
Professional development and
technical assistance to LEAs
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Examples of Allowable Cost Controls
Budget controls Pre-award planning process and technical
assistance - developing and approving budgets Communication between fiscal and program staff
at the SEA and LEA levels Routine reconciliation to actual expenditures at
the SEA and LEA levels
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Financial management
Acquisition of property Date of binding or written commitment – PO or contract
Personal services by employee
After services are performed
Personal services by contractor
Date of binding written commitment
Travel After travel is taken
Obligation=transaction that requires payment
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Financial management
Obligation Obligation-transaction that requires payment Valid obligation–transaction giving rise to an
obligation within the period of grant availability
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Financial ManagementLiquidation
Liquidation–settle an obligation by paying funds
All obligations must be liquidated within 90 days after the end of the obligation period
SEA may impose a shorter deadline on sub grantee
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Procurement procedures
General procurement procedures found in EDGAR - some in statute
Follow State’s procurement procedures Purchasing Policies and Procedures Manual Available on WVDE website
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Procurement procedures Review all proposed purchases to avoid
unnecessary or duplicative items Surplus property Structure procurement to obtain most economical
purchase Intergovernmental agreement for common goods or
services Lease vs. purchase
All procurement transactions must be conducted with full and open competition
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Procurement ProceduresContracted Services
Must have written contracts Contract should include clearly defined deliverables
Description of services to be performed or goods to be delivered
Description of dates when services will be performed or goods delivered
Description of locations where services will be performed or goods delivered
Description of number of students/teachers/etc. to be served (if applicable)
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Procurement ProceduresContracted Services Must have written invoice
Description of services performed or goods delivered Description of dates services were performed or goods
delivered Description of location services were performed or goods
delivered Description of students/teachers/etc. served (if applicable
Invoice should be reviewed & approved before payment Segregation of duties Documented approvals
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Inventory management
Inventory items purchased with federal funds are divided into three categories:
Real Property Equipment Supplies
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Inventory managementEquipment inventory vs. internal control
EDGAR requires an inventory for equipment Inventory not required for supplies; however,
ED determined that an adequate internal control system must include a process for labeling and locating property purchased with federal funds
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Inventory ManagementDifferent rules for equipment and supplies Equipment
Federal Definition of Equipment Tangible property Useful life of more than one year Acquisition cost of $5,000 or more
State may use another definition as long as it includes all property described above
Supplies
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Inventory Management Equipment
Must have adequate controls in place to account for: Location of equipment - assure that it is used
solely for authorized purposes Custody of equipment - maintain effective control
and accountability Security of equipment - adequately safeguard all
property
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Inventory management Written inventory–updated annually Physical inventory–documented every two
years Control system–safe guard against loss, theft,
and used solely for intended purposes Deposition
Transfer to another federal program site Under $5000–no fiscal accountability to ED Over $5000–pay proportional share to ED
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Essential Questions
1. From what government document are the basic fiscal threshold requirements derived?
2. What are the three components of a threshold system that ED deems important for the effective management of federal grants?
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Essential Questions
3. Which OMB Circular identifies allowable expenditures under general cost cutting principles?
4. What two parts of a property management system (inventory) are required, but most neglected within district procedures?
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