TABLE OF CONTENTS 3. Financial Regulations 3. Financial Control and Accounting Arrangements 3. Internal Financial Control and Data Security 5. Financial Management Systems 5. Budget Monitoring and Adjustments 6. Conflicts of Interest/Pecuniary Interests 7. Allowable Use of Funds/Cost Principles 10. Grant Funds Requests 10. Federal Timekeeping 15. Financial Reporting 15. Cash Management 15. Retention and Access Requirements for Records 15. Training for Financial Procedures 16. Consequences of Compliance Failures 2
FINANCIAL REGULATIONS Huron Intermediate School District uses the Michigan Public School Accounting Manual (Bulletin 1022) as its mandatory guide to uniform classification and recording of accounting transactions for Michigan school districts. The Michigan Public School Accounting Manual (Bulletin 1022) was adopted in 1963 with major revisions in 1976, 1988 and 2004. It conforms to the 2003 federal Financial Accounting for Local and State Schools Systems, to generally accepted accounting principles (GAAP), to the Governmental Accounting Standards Board (GASB) and to any changes in legislation related to State and Federal financial reporting. Revisions are made to Bulletin 1022 any time there are any changes to GMP, GASB or State and Federal financial reporting. FINANCIAL CONTROL AND ACCOUNTING ARRANGEMENTS Accounting is done by analyzing, recording, summarizing, and interpreting financial transactions of the school district. The financial record system is adequate to provide financial and related operational information for all interested parties; the school board; the administration; the public; auditors; local, state and federal authorities; and school employees. It is also designed to demand accuracy and a reasonable degree of internal control. The school district s accounting system is organized and operated on a fund basis. A fund is a fiscal and accounting entity with a self-balancing set of accounts. Each fund accounts for its activities and has its own designated assets, liabilities, fund equity, revenues and expenditures based upon the purpose of the fund. INTERNAL FINANCIAL CONTROL AND DATA SECURITY Procurement/Purchasing Payments to Vendors Reimbursements to Employees Receipting of Revenues Monthly Reporting and Reconciliations Payroll Procedures Segregation of Duties Computer Networks Data and Employee Security Internal control in its broader sense is defined as a process affected by the district s board of education, administration, and other personnel and designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Effectiveness and efficiency of operations Reliability of reporting Compliance with applicable rules, laws, and regulations The emphasis is on common control activities which include segregation of functional responsibilities to create a system of checks and balances and authorization/recording procedures adequate to provide reasonable accounting control over assets, liabilities, revenues, and expenditures. 3
A system of control activities includes: Procurement/Purchasing: Requisitions are submitted to an Administrator (Superintendent, Director, or Principal) who then, if deemed appropriate, approves. All requisitions are entered and approved in the financial software (Skyward). Two people are responsible for pre-verifying requisitions, the Director of Finance and the Special Ed Accountant. The Purchase Order Clerk is responsible for ordering items and ensuring all documentation is properly attached to the record in Skyward. All utility type invoices are entered in Skyward in order to go through the approval process. Any purchases over $10,000 require board approval. We follow the MDE competitive bid threshold for any necessary bidding. We review the Michigan debarred vendor list and the federal debarred vendor list annually and at the time of adding a new vendor to ensure the new vendor is not on the debarred list. Payments to Vendors: The Finance Associate maintains control over disbursements. Checks are processed when the Purchase Order Clerk notifies the Finance Associate that the invoices are cleared for payment. Un-mailed checks are locked in the Business Office vault. Director of Finance and Board of Education reviews issued checks. Reimbursements to Employees: Employees are to submit reimbursement requests in Skyward. Travel will be reimbursed at the IRS approved mileage rate. Meals will be reimbursed up to the district set amounts ($8 breakfast, $13 lunch, $25 dinner) for overnight approved trips. Employees are to obtain Supervisor approval prior to making a purchase that will encumber district funds. Employees are encouraged to order items using an approved district method prior to using personal funds to make a purchase and then seek reimbursement. District approved methods include entering a requisition for the business office to make purchase, or checking out a district credit card. All reimbursement requests must have a detailed receipt in order to be reimbursed. Sales tax will not be reimbursed. Supervisors will review reimbursement request and then approve or deny the request accordingly. Receipting of Revenues: All cash/checks are initially given to the Special Ed Accountant who prepares a list of cash receipts. All cash/checks are locked in the Business Office vault until deposited. Finance Associate scans checks remotely to the bank and physically takes cash to the bank. Finance Associate records receipts in Skyward. Monthly Reporting and Reconciliation: Chart of Accounts is maintained consistent with the Michigan School Accounting Manual (Bulletin 1022), generally accepted accounting principles (GAAP), and Governmental Accounting Standards Board (GASB). Bank reconciliations are performed monthly by the Finance Associate and reviewed by the Director of Finance. A cash summary is prepared by the Finance Associate on a monthly basis and reviewed by the Director of Finance and the Board of Education. Payroll Procedures: The Supervisor (Superintendent, Director, or Principal) reviews time sheets and approves prior to turning in to the Payroll/Human Resource Clerk. The Director of Finance confirms that employee compensation amounts are consistent with the Master Agreements and individual contracts (salaries; hourly amounts, and hours worked). The Payroll/Human Resource Clerk processes payroll. The Director of Finance reviews payroll reports periodically through the Skyward system and monitors year to date expenditures as a percent of the budget to ensure accuracy. 4
Segregation of Duties: The office is designed to ensure duties are segregated as much as possible in order to prevent fraud. This is reviewed annually or more frequently if change occurs. Computer Networks: The Technology Coordinator monitors the computer networks to ensure safety and reliability of data. The network is protected by a Fortigate firewall/content filter. Physical security of computer network servers by housing them in a locked server room. There is Board of Education approved policy in place for approved investments. Approved investments that are made are reconciled to the General Ledger on a monthly basis. Data and Employee Security: Technology Coordinator completes a daily backup of all servers, Finance data and student data also have a transactional log which is generated every 5 minutes. Daily backups are stored on the District SAN and then archived to an offsite NAS device for long term. All web-based transactions are on a secure server. Skyward is password protected with individualized security given to staff. Approval processes are set up to ensure that general ledger activity is properly accounted for. Employee criminal background checks have been performed on all existing employees and for all newly hired employees. FINANCIAL MANAGEMENT SYSTEMS Huron Intermediate School District currently uses Skyward software for financial management of the district. The software provides applications that allow for the completion of the accounting and payroll processes necessary to remain compliant with all State and Federal laws. It also is set up to conform to the Michigan Public School Accounting Manual (Bulletin 1022) and the required reporting to the State of Michigan such as the Financial Infrastructure Database. The security of this system is explained in the section labeled INTERNAL FINANCIAL CONTROL AND DATA SECURITY DATA AND EMPLOYEE SECURITY. BUDGET MONITORING AND ADJUSTMENTS The Superintendent with the assistance of the Director of Finance collects and assembles the necessary information to produce budgets that assist the Board of Education in the fiscal management of the school district. The Board of Education works to maintain both short and long-range projections based on the information they have been provided as well as the information they have also collected. The district s operations and educational plan is reflected in the following budgets which are prepared and approved by the Board of Education each year prior to July 1: General Fund Special Education Fund Career Technical Education Fund Capital Projects Fund General Capital Projects Fund Career Technical Education Capital Projects Fund Special Education Debt Retirement Fund Each budget is designed to carry out the district s operations in a thorough and efficient manner, properly maintain district facilities, and honor the continuing obligations of the Board of Education. The budgets will include the proposed revenue and expenditures in each financial category. The budget, after review and analysis by the Board of Education, will be approved with an Appropriations Resolution that will be implemented and adhered to. The Superintendent is authorized to proceed with making financial commitments, purchases, and other expenditures within the limits provided in the budgets, board approved policies, and Michigan State law. 5
At any time during the fiscal year that it appears that actual revenues are less than estimated or expenditures are greater than estimated, the Superintendent shall present to the Board of Education recommended amendments to the budgets. CONFLICTS OF INTEREST/PECUNIARY INTERESTS Huron Intermediate School District has approved policy that the Board of Education shall not knowingly enter into a contract with any supplier of goods and/or services under which any Board member, officer, employee, or agent of the school district has any pecuniary or beneficial interest either direct or indirect, unless the person has not solicited the contract or participated in the negotiations leading up to the contract. Board members and school personnel shall not accept any gifts or favors from vendors which might, in any way, influence their recommendations on the eventual purchase of equipment, supplies or services. Purchases made by the district do not show any favoritism toward any vendor. Each order is placed in accordance with the policies of the Board on the basis of quality, price and delivery with past service a factor if all other considerations are equal. ALLOWABLE USE OF FUNDS/COST PRINCIPLES Procedure ALLOWABLE USE OF FUNDS In accordance with District Policy 6110, the Board of Education forbids the use of Federal monies for partisan political activities and for any use that would not be in accord with Federal guidelines on discrimination. All Federal funds received by the District will be used in accordance with the applicable Federal law. The Superintendent shall require that each draw of Federal monies is as close as administratively feasible to the related program expenditures and that, when restricted, such monies are used to supplement programs and funding and not to supplant or replace existing programming or current funding. DEFINITIONS: Allowable cost A cost that complies with all legal requirements that apply to a particular Federal education program including statutes, regulations, guidance, applications and approved grant awards. A framework for determining whether a cost is allowable is included in Section 1.3 of these procedures. Education Department General Administrative Regulations (EDGAR) A compilation of regulations that apply to Federal education programs. These regulations contain important rules governing the administration of Federal education programs, and include rules affecting the allowable use of Federal funds (including rules regarding permissible costs, the period of availability of Federal awards, documentation requirements, and grants management requirements). EDGAR is accessible at: http://www2.ed.gov/policy/fund/reg/edgarreg/edgar.html. 2CFR Part 225 also known as OMB Circular A-87 Federal cost principles that provide standards for determining whether costs may be charged to Federal grants. EDGAR requires all grantees and subgrantees to follow the cost principles set out in OMB Circular A-87. The link is as follows: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=%2findex.tpl. 6
DETERMINING ALLOWABLE COSTS o Framework for analyzing allowable costs Federal grant programs are governed by a variety of Federal rules including statutes, regulations, and non-regulatory guidance. To determine whether a cost may be paid with Federal funds, i.e. whether the cost is permissible, staff must be familiar with these rules and how they work together. Generally, when analyzing whether a particular cost is permissible, it is useful to perform the following analysis: Is the cost specifically included in the district s approved grant budget? Is the cost forbidden by Federal laws such as OMB Circular A-87 or EDGAR? (see below for examples) Is the cost permissible under the relevant Federal program? Is the cost consistent with the Federal cost principles in OMB Circular A-87? Is the cost consistent with program specific fiscal rules? Is the cost consistent with an approved program plan and budget, as well as any special conditions imposed on the grant? While there are other important considerations District staff must take into account when analyzing whether a specific proposed cost is permissible, the above questions can provide a useful framework for the analysis. o Costs forbidden by Federal Law OMB Circular A-87 and EDGAR identify certain costs that may never be paid with Federal funds. The following list provides examples of such costs. If a cost is on this list, it may not be supported with Federal funds. The fact that a cost is not on this list does not mean it is necessarily permissible. There are other important restrictions that apply to Federal funds, such as those detailed in OMB Circular A-87; thus, this list is not exhaustive. ALLOWABLE COSTS Costs that may be Allowable Under OMB Circular A-87 Under Specific Conditions: Advisory councils Audit costs and related services Bonding costs Communication costs Compensation for personal services Depreciation and use allowances Employee morale, health, and welfare costs Equipment and other capital expenditures Gains and losses on disposition of depreciable property and other capital assets and substantial relocation of Federal programs Insurance and indemnification Maintenance, operations, and repairs Materials and supplies costs Meetings and conferences Memberships, subscriptions, and professional activity costs Patent costs Plant and homeland security costs Pre-award costs Professional service costs Proposal costs 7
Publication and printing costs Rearrangement and alteration costs Reconversion costs Rental costs of building and equipment Royalties and other costs for the use of patents Taxes Training costs Travel costs COSTS THAT ARE UNALLOWABLE UNDER OMB CIRCULAR A-87 Advertising and public relations costs (with limited exceptions), is prohibition includes promotional items and memorabilia, including models, gifts, and souvenirs Alcoholic beverages Bad debts Contingency provisions (with limited exceptions) Fundraising and investment management costs (with limited exceptions) Donations Contributions Entertainment Fines and penalties General government expenses (with limited exceptions pertaining to Indian tribal governments and Councils of Government (COGs)) Goods or services for personal use Interest Lobbying Selling and marketing costs (with limited exceptions) COSTS THAT ARE UNALLOWABLE UNDER EDGAR (PART 76) The use of funds for religion The acquisition of real property (unless specifically permitted by programmatic statute or regulations which is very rare in Federal education programs) The use of funds for construction (unless specifically permitted by programmatic statute of regulations which is very rare in Federal education programs) Charging tuition or fees collected from students toward meeting matching, cost sharing, or maintenance of effort requirements of a program o Program allowability Any cost paid with Federal education funds must be permissible under the Federal program that would support the cost. Many Federal education programs detail specific required and/or allowable uses of funds for that program. Issues such as eligibility, program beneficiaries, caps or restrictions on certain types of program expenses, and other program expenses, and other program specific requirements must be considered when performing the programmatic analysis. The two largest Federal K-12 programs, Title I, Part A and IDEA, do not contain a use of funds section delineating the allowable uses of funds under those programs. In those cases, costs must be consistent with the purposes of the program in order to be allowable. 8
o Federal cost principals OMB Circular A-87 defines the parameters for the permissible uses of Federal funds. While there are many requirements contained in A-87, it includes five core principles that serve as an important guide for effective grants management. These core principles require all costs to be: Necessary for the proper and efficient performance or administration of the program. Reasonable. In other words, it should be clear to an outside observer why a decision to spend money on a specific cost made sense in light of the cost, needs, and requirements of the program. Allocable to the Federal program that paid for the cost. This means that a program must benefit in proportion to the amount charged to the Federal program for example, if a teacher is paid 50% with IDEA funds, the teacher must work with the IDEA program/students at least 50% of the time. This also means that recipients need to be able to track items or services purchased with Federal funds so they can prove they were used for Federal program purposes. Authorized under state and local rules. This means that all actions carried out with Federal funds must be authorized and not prohibited by state and local laws and policies. Adequately documented. A recipient must maintain proper documentation so as to provide evidence to monitors, auditors, or other oversight entities of how the funds were spend over the lifecycle of the grant. OMB Circular A-87 also contains specific rules on selected items of costs. Costs must comply with these rules in order to be paid with Federal funds. o Program specific fiscal rules All Federal education programs have certain program specific fiscal rules that apply. Determining which rules apply depends on the program; however, rules such as supplement, not supplant, maintenance of effort, comparability, caps on certain uses of funds, etc. have an important impact when analyzing whether a particular cost is permissible. Many state administered programs require LEAs to use Federal program funds to supplement the amount of state, local (and in some cases other Federal) funds they spend on education costs, and not to supplant or replace those funds. Generally, the supplement, not supplant provision means that Federal funds must be used to supplement the level of funds from non-federal sources by providing additional services, staff, programs, or materials. In other words, Federal funds normally cannot be used to pay for things that would otherwise be paid for with state or local funds (and in some cases with other Federal funds). Auditors generally presume supplanting has occurred in three situations: District uses Federal funds to provide services that the District is required to make available under other Federal, state, or local laws. District uses Federal funds to provide services that the District provided with state or local funds in the prior year. District uses Title I, Part A, or Migrant Education Program funds to provide the same services to Title I or Migrant students that the District provides with state of local funds to nonparticipating students. These presumptions apply differently in different Federal programs, and also in school wide program schools. Staff should be familiar with the supplement not supplant provisions applicable to their program. 9
o Approved plans, budgets and special conditions As required by 2CFR Part 225 (OMB Circular A-87) all costs must be consistent with approved program plans and budgets. This includes the district s Consolidated Application to the Michigan Department of Education and school-level plans such as school wide plans or Federal school improvement plans. Costs must also be consistent with all terms and conditions of Federal awards, including any special conditions imposed on the district s grants. TRAINING The district will provide training on the allowable use of federal funds to all staff involved in federal programs through activities such as: Distributing federal guidance documents Distributing District policies and procedures Developing templates, checklists, and other guidance documents as appropriate Internal training sessions Routine staff meetings Informal technical assistance Districts will promote coordination between all staff involved in federal programs through activities such as: Routine staff meetings Joint training sessions Policies and procedures that address all aspects of federal grants management Sharing information that has cross-cutting impact such as single audits, monitoring reports, letters from oversight entities, etc. Legak Reference - OMB Circular A-87 GRANT FUNDS REQUESTS At the end of each month grant funds are requested by the Special Ed Accountant. The requests are based on the financial information from the previous month s General Ledger. Cash requests are not made until after the expenditures have occurred so the district is always compliant with the three day cash expenditure rule. FEDERAL TIMEKEEPING Procedure TIME AND EFFORT REPORTING AND APPROVAL PROCESS All employees whose compensation is paid, in full or in part, with Federal funds must maintain time and effort records in accordance with this established criteria. Employees must provide the information required on a timely basis and in accordance with all procedures. Time and effort records must be maintained in order for HISD to charge employee compensation costs to Federal grants; thus, compliance with these procedures prevents disallowance of salary and wages charged to Federal grants. 10
DEFINITIONS Cost Objective: A particular grant award or other category of costs used to track specific cost information (e.g. earmarks or set-asides that require [District Name] to track expenditure information to ensure it spends a specific amount for a specific purpose). Employee Compensation: All amounts paid to an employee for services rendered during the award period. Compensation includes salaries, fringe benefits, stipends, bonuses and payments made under supplemental contracts. Multiple Cost Objectives Employees: Employees who work on multiple cost objectives such as: More than one Federal award A Federal award and a non-federal award More than one activity within a Federal award that is separately tracked by HISD (such as set-asides, earmarks, or match/in-kind contributions) 2CFR, Part 225: Federal cost principles that provide standards for determining whether costs may be charged to Federal grants. Personnel Activity Report (PAR): A document certifying the amount of time a multiple cost objective employee spends on each cost objective. The PAR must reflect an after-the-fact distribution of the activities performed; account for the total activity for which the employee is compensated; be prepared at least monthly and coincide with one or more pay periods; and be signed by the employee. A template PAR is attached to these procedures. Semi-Annual Certification: A document certifying a single cost objective employee worked solely on one cost objective. The certification must be prepared at least every six months and must be signed by the supervisory official having first-hand knowledge of the work performed by the employee. A template semi-annual certification is attached to these procedures. Single Cost Objective Employees: Employees who work exclusively on one cost objective. PROCEDURE All employees paid with Federal funds must adhere to the following procedures to complete the appropriate time and effort records. These procedures also apply to employees paid with non- Federal funds that are used as a match (or in-kind contribution) in a Federal program. Determining Cost Objectives A cost objective is defined as a Federal grant award, or other category of costs HISD uses to track specific cost information. In certain circumstances HISD may track the time employees spend on particular activities within a single Federal grant in order to demonstrate compliance with Federal requirements such as earmarks, set-asides or match/in-kind contributions. When HISD uses employee compensation costs to meet these requirements they are known as cost objectives. In such a circumstance, an individual grant programs may have more than one cost objective. Determining cost objectives requires a careful reading of the programmatic provisions in the statute providing the funds. Employees should contact the business office if they need assistance determining the cost objectives on which they work. 11
Single Cost Objective Employees An employee who works on a single cost objective must complete a semi-annual certification that indicates the employee worked solely on that cost objective for the period covered by the certification. The certification must be prepared at least every six months. Either the employee or a supervisor with first-hand knowledge of the work performed by the employee must sign the semi-annual certification. A semi-annual certification must: Be executed after the work has been completed State that the employee worked solely on activities related to a particular cost objective Identify the cost objective Specify the reporting period Be signed by the employee or a supervisor with first-hand knowledge of the work performed Be dated The supervisory official for all single cost objective employees must complete the semiannual certification attached to these procedures. The business office will send the semi-annual certification forms to departments, schools and offices in January and July. If an employee works on a short-term cost objective whose end date does not coincide with the normal January/July collection dates for semiannual certifications (e.g. a supplemental contract for summer school programs), the employee must obtain a semi-annual certification from the business office after the time period for the work has ended. All supervisory officials of single cost objective employees with first-hand knowledge of the work performed by the employee must complete and sign the semi-annual certification provided by the business office. Executed semi-annual certifications must be forwarded to the business office. Multiple Cost Objective Employees Employees working on multiple cost objectives must maintain Personnel Activity Reports (PARs) or equivalent documentation indicating the amount of time spent on each cost objective for the period covered by the PAR or equivalent documentation. The PAR or equivalent documentation must be prepared at least every month. The employee must sign the PAR or equivalent documentation. A PAR or equivalent documentation must: Be executed after the work has been completed (projections of how an employee is expected to work or position descriptions are not sufficient); Account for the total activity for which each employee is compensated, including part-time schedules or overtime (total activity means all of the time an employee works, not just the amount of time worked on a Federal program); Identify the cost objectives; Specify the reporting period; Be prepared at least monthly and coincide with one or more pay periods; Be signed by the employee (unlike a semi-annual certification a supervisor s signature alone is not sufficient); and Be dated after the fact (when the work has been completed). 12
All multiple cost objective employees must complete the PAR attached to these procedures, unless they receive permission from business office to use equivalent documentation in lieu of a PAR. The business office will send PARs to departments, schools and offices. Copies of executed PARs, or approved equivalent documentation, must be forwarded to the business office. Stipends Employees may be provided stipends to participate in activities such as professional development. Employees receiving such stipends for HISD - sponsored activities may satisfy time and effort records by signing the sign-in and sign-out sheets provided at the activity. Employees receiving such stipends for non - HISD sponsored activities should contact the business office to obtain the necessary documentation. Reconciliation It is HISD s practice to charge employee compensation costs to Federal programs based on budget estimates that reasonably approximate how an employee will work during the year. HISD will reconcile payroll charges to the time and effort reflected in employee time and effort records at least quarterly. If HISD identifies a variance between how an employee s salary was charged and how the employee actually worked, HISD will adjust its payroll charges so that the amount charged to Federal funds reflects the employee s actual time and effort. HISD will perform the adjustment annually if an identified variance is less than 10%. HISD will perform the adjustment at least quarterly if an identified variance is 10% or more. In-Kind Contributions and Matching Employees who are paid with non-federal funds that will be used to meet a Federal match requirement (also known as in-kind contributions) must comply with the same time and effort reporting requirements as employees who are paid with Federal funds. In other words, employees paid with matching funds who work on a single cost objective must complete a semi-annual certification in accordance with the procedures in Section b. Employees paid with matching funds who work on multiple cost objectives must complete a personnel activity report in accordance with the procedures in Section c. Document Retention Time and effort records must be maintained for a period of five (5) years. FINANCIAL MANAGEMENT FEDERAL FISCAL REVIEW TOOL CHECKLIST There are written procedures on recording time distribution for employees who work on one or more Federal cost objectives. The district has PARs for split-funded employees (instructional staff may use their lesson plans to confirm their written schedules if they meet all of the other PAR requirements). The PARs are prepared at least monthly (recommended each pay period) 13
The PARs are signed and dated by the employee (A-122 allows PARS to be signed by the supervisor for non-profit agencies) The PARs account for the staff person s total activity The PARs are contemporaneous and not prepared in advance (if lesson plans are used to support PARs, the teacher must make daily progress notations. Lesson Plans Cannot Replace PARs). If paraprofessionals use regular time sheets, the time sheets: Are an after-the-fact distribution of their actual activity Account for the total activity for which they are compensated Show the hours or percentages for the programs that they worked on Are prepared at least monthly and prepared to coincide with at least one pay period Are signed by the employee For 100% Federally-funded or single cost objective district employees (this section does not apply to non-profits, A-122 requires non-profit employees to prepare PARs monthly): The district has certifications or a blanket certification showing that the employees worked solely on a single Federal cost objective The certifications are prepared at least semi-annually Individual certifications are signed and dated by the employees and a supervisor with first-hand knowledge of the work performed by the employees. Blanket certifications are signed and dated only by the supervisor with first-hand knowledge of the work performed by the employees. The certifications are contemporaneous and not prepared in advance Central Business Office Duties The system for establishing estimates produces reasonable approximations of the activity performed At least quarterly, comparisons are made of actual costs to budgeted distributions based on monthly activity reports Adjustments are made to costs charged to Federal awards based on the activity actually performed (if the quarterly comparisons show differences between budgeted and actual costs of less than 10%, these adjustments can be made annually) The budget estimates or other distribution percentages are revised at least quarterly, if necessary, to reflect changed circumstances Legal References: OMB Circular A-87-2 CFR, Part 225 14
FINANCIAL REPORTING Each month several reports are generated for review. The Superintendent and the Director s are provided with a report that shows them what financial position the school district is in comparison to the most recently approved Appropriations Act. Also generated are a list of check registers and a cash position report for the Board of Education to review. Various other reports are created and generated to allow Administration to review financial information as needed. A General Ledger is generated at year end that shows every transaction of the school district for the entire fiscal year. Any and all reports requested by the Auditor are generated. The Financial Infrastructure Database is compiled and submitted by November 15th of each. This report shows every account balance of every fund of the district. It is used by the Center for Education Performance to evaluate the district s financial position. Several other financial reports are generated and submitted to the State of Michigan. As mentioned earlier the Financial Expenditure Reports for each grant award as well as the Special Education Cost Report (SE4096) and the Transportation Expenditure Report (SE4094). CASH MANAGEMENT Huron Intermediate School District adheres to the following cash management procedures: Reviews the fund budgets and implements the budgets as has been approved by the Board of Education. Monitors the actual revenues and expenditures that have been forecast in the approved budgets. Segregation of duties for receiving revenues and making check payments to vendors for expenditures. Review of incoming revenue and output of expenditures by a second business office employee. Cash flow analyses are completed on a regular basis for the purpose of assuring availability of cash, possible investing and to determine the need for and, if needed, the amount of state aid borrowing. State approved investments are made when it is beneficial to the district. Board approved budget amendments are completed as revenue and expenditures change, usually three times per year. Fund balance projections are monitored closely by the Director of Finance and the Board of Education during each budget revision. Funds are requested on a regular basis. Funds are deposited promptly. Bank Reconciliations are performed monthly by the Finance Associate and reviewed by the Director of Finance. RETENTION AND ACCESS REQUIREMENTS FOR RECORDS Records are retained in accordance with the Records Retention and Disposal Schedule for Michigan Public Schools as revised on December 7, 2010. All Freedom of Information Act requests are acted upon as soon as possible and within the timelines of the various requests. TRAINING FOR FINANCIAL PROCEDURES All new employees will be given proper training for financial procedures by existing, experienced staff members. The length of training is commensurate with the amount of prior experience of the new employee and will be adequate so he or she fully understands the financial procedures of the district. Employees will receive refresher training as needed. 15
CONSEQUENCES OF COMPLIANCE FAILURES All employees are instructed to follow the procedures that have been put in place to monitor all financial and accounting activities in the district. Any employee who does not follow the procedures as instructed will be disciplined in a progressive manner. References: HISD Board Policies - http://www.hisd.k12.mi.us Legal References OMB Circular A-87 16