Introduction to IDEA Part B Fiscal Accountability Plan

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1 Introduction to IDEA Part B Fiscal Accountability Plan Lester Wyer Funding and Accountability Coordinator ldwyer@sde.idaho.gov Federal Requirement for Fiscal Monitoring 1

2 Federal Requirement for Fiscal Monitoring The Idaho State Department of Education is the prime recipient of IDEA Part B grant awards under both the Special Education - Grants to States Program and the Special Education - Preschool Grants Program. Administrative responsibility: General supervision requirements of IDEA Fiscal monitoring required by both IDEA law and regulations and variety of federal statutes and regulations. Regulations 2

3 Regulations 34 CFR Part 80 Uniform Administrative Requirements for Grants and Cooperative Agreements to State t and Local Governments (this is the U.S. Department of Education s codification of the Grants Management Common Rule) Office of Management and Budget (OMB) Circular A-87 Cost Principles for State, Local, and Indian Tribal Governments OMB Circular A 133 Audits of States, Local Governments, and Non- Profit Organizations 34 CFR Part 76 State Administered Programs Requirement to Monitor Even though federal law makes it clear that comprehensive monitoring (including fiscal) must be done by grantees, federal statutes and regulations are fairly general about the rules on how this should look. 3

4 Requirement to Monitor 34 CFR Part 80 Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments Monitoring and reporting program performance. (a) Monitoring by grantees. Grantees are responsible for managing the day-today operations of grant and subgrant supported activities. Grantees must monitor grant and subgrant supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program, function or activity. Requirement to Monitor IDEA Monitoring Requirement 34 CFR SEA responsibility for general supervision. (a) The SEA is responsible for ensuring-- (1) That the requirements of this part are carried out 4

5 Requirement to Monitor OMB Circular A Responsibilities. (d) Pass-through entity responsibilities. A pass-through entity shall perform the following for the Federal awards it makes: (2) Advise subrecipients of requirements imposed on them by Federal laws, regulations, and the provisions of contracts or grant agreements as well as any supplemental requirements imposed by the pass-through entity. (3) Monitor the activities of subrecipients as necessary to ensure that Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Fiscal Accountability Monitoring Plan The SDE s recent OSEP verification visit and their review of our fiscal accountability system, served to give shape to the policies and procedures of our fiscal accountability and monitoring i plan. 5

6 Fiscal Accountability Monitoring Plan Components of the Fiscal Monitoring Plan IDEA Part B and Preschool Application Statement of Assurances Monitoring Cycle Risk Assessment Document Reviews Site Visits Limited Scope Audits State Audits and IFARMS annual report A-133 Single Audits Fiscal Accountability Checklist (self-assessment tool) IDEA Part B and Preschool Application This is the SDE s mechanism for initially determining fiscal eligibility for IDEA funds. Includes the Statement of Assurances 6

7 Monitoring Cycle The Special Education Division has an established five-year monitoring cycle. Following the format of the cycle, different components of fiscal monitoring plan will be implemented according to which year of the cycle a particular LEA is in. As mentioned above, districts and LEAs in Year 1 of the cycle will be required to respond to each of the applicable items on the Fiscal Accountability Checklist. Monitoring Cycle (continued) Year 2: Selective review of written policies and procedures required by Fiscal Monitoring Checklist. Year 3: Selective documents review that may include any of the following: Specific items of cost from submitted GRA reimbursement requests Time and effort certifications; personnel activity reports. Year 4: Selective site visits that may be focused on one or more of the fiscal accountability requirements of the fiscal monitoring plan. Year 5: Selective review of state audits and A-133 audits. 7

8 Risk Assessment Risk is the identification of events or circumstances that could have a negative impact on, or indicate compromise in, an LEA s ability to effectively administer the fiscal requirements of federal grant programs. The SDE has established risk factors and categories that may be used to determine if additional levels of fiscal monitoring are indicated. Risk Assessment (continued) History of Maintenance of Effort issues or failure Evidence of financial instability New administration, business manager Failure to use IFARMS accounting system History of late submission of required data or financial information (Part B application, IFARMS Annual Report) Data quality in Part B application (narratives not adequate to demonstrate allowable excess costs) 8

9 Audit findings Risk Assessment (continued) Inaccurate or unverifiable reporting of actual expenditures and carryover on previous year budgets Program monitoring determinations other than Meets Requirements Fiscal Accountability Checklist Timely obligation and liquidation of funds Accounting for Medicaid expenditures and reimbursements. Risk Assessment (continued) These risk factors, taken by themselves, will generally not trigger additional fiscal monitoring activities. However, multiple instances of these issues or ongoing issues that appear to be unresolved may place a LEA in a higher risk category that would indicate that additional monitoring is necessary. LEAs that are determined to have factors that place them in a higher risk category, will be notified in writing. The notification will include the reasons for the determination, possible monitoring consequences, and the opportunity to respond with an explanation or plan for resolution of the issues. 9

10 Document Review See Monitoring Cycle Site Visits See Monitoring Cycle 10

11 Limited Scope Audits Limited scope audits are defined as an agreed-upon procedures engagements conducted in accordance with the American Institute of Certified Public Accountants (AICPA s) generally accepted auditing standards (GAAS) and attestation standards, that are paid for and arranged by the SDE and address one or more of the following types of compliance requirements: Allowable costs/cost principles Maintenance of Effort Time and Effort Reporting Parentally-placed private school children proportionate funding Charter school sub-allocations. Typically, these types of monitoring activities will only be triggered by risk assessments that place an LEA in a high risk category. Audits of School Districts and LEAs as required by Idaho Code (b) A-133 Audits 11

12 Fiscal Accountability Checklist In the first year of implementation of the new fiscal accountability plan, the Fiscal Accountability Checklist is required of all subrecipients i of IDEA Part B funds. In subsequent years, it will be required of those districts and schools that are in Year 1 of the monitoring cycle, as well new Charter LEAs during their first 2 years of operation. In general, this checklist is intended as a tool for self-assessment of the adequacy of the subrecipient s fiscal systems. However, districts and LEAs determined to have 1 or more of the risk factors listed above may be required to submit responses to the Fiscal Accountability Checklist. 12

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17 Contact Lester Wyer Funding and Accountability Coordinator Idaho State Department of Education Division of Federal Programs Special Education