Summer Sizzling Information About Fiscal Accountability

1. Summer Sizzling Information About Fiscal Accountability Exceptional Children IDEA 611 Grant And Fiscal Accountability Training NCDPI August 16, 2013

2. Roles and Responsibilities of the Charter School #1 Assure Sound Financial Management #2 Assure Compliance with IDEA #3 Provide Timely and Accurate Data

3. #1 Sound Financial Management In order to assure Fiscal Accountability, it is important to know how funds were allocated for students with disabilities, what are the allowable activities for the funds allocated and how were funds spent.

4. Uniform Chart of Accounts • In 1975 the General Assembly enacted a law requiring a uniform accounting system for all local school administrative units effective July 1, 1976. • The Uniform Chart of Accounts provides a structure for each school unit to document how funds are received and spent. • The structure requires a minimum of four parts. The Fund code, the Purpose code, the Program Report code and the Object code.

5. Fund Code Funds are allocated to Charter Schools to provide services for students with disabilities. Funds provided to Charter Schools come primarily from three funding sources; Fund 1 – State Public School Fund Fund 2 – Local Current Expense Fund Fund 3 – Federal Grant Fund

6. Purpose Code • This part of the account code is made up of four digits and describes the reason for which funds are being spent. • Purpose codes that are typically used by a local school unit are; 5210 – Instructional Services such as salaries for teachers or teacher assistants, supplies and material, and workshop expenses 6550 – Employee benefits

7. Program Report Code (PRC) • The Uniform Chart of Accounts includes the Program Report Code to detail the activities for which funds can be used. For example, Charter Schools receive; • PRC 036 (State Public School Funds) which includes monies to be used for students with disabilities. • PRC 029 (Behavioral Support Funds) which should be used for allowable activities specified by the program. • PRC 060 (IDEA 611 Funds) which are accessed via the IDEA 611 Grant Application and should be used to fund those activities approved in the grant.

8. Object Code The Object code consists of three digits. The object code tells the exact service or commodity obtained by the expenditure or exactly how the money was used. Example: Teacher’s salary is code 121 Instructional supplies is code 411

9. Assure Sound Financial Management Are we ready? Remember we need to know how funds are allocated for students with disabilities, what are the allowable activities for the funds allocated and how were funds spent. 3-5210-060-121 Are these state, local or federal funds? What is the reason these funds were spent? What activities are allowed in this PRC? What is the service or commodity purchased with these funds?

10. #2 Compliance with IDEA Time and Effort Equipment Maintenance of Fiscal Effort CEIS Contacted Services

11. Time and Effort Documentation • All employees who are paid from federal funds or whose salaries are used to match federal funds must document their time and effort. • Time and effort documentation serves as a “receipt” for payroll expenditures.

12. Time and Effort Reporting • Single Cost Objective – Semi-Annual Certification (individual / blanket) • Multiple Cost Objective – Personnel Activity Report (PAR) – Reconciliation • Substitute System – State Approved

13. Cost Objective • It’s a federal term that refers to a function, organizational subdivision, contract, grant, or other activity for which cost data are needed and for which costs are incurred. • Single federal cost objective-100% of your employee’s time is spent on specific activities allowed in the grant. • Multiple federal costobjectives- employee works on more than one type of activity.

14. Semi-Annual Certification Certification that an employee worked solely on a single federal cost objective for the period covered by the certification. Completed at least semi- annually. Semi- Annual

15. Semi-Annual Certification • INDIVIDUAL: Signed by employee • or supervisor who has first-hand • knowledge of the work performed. • BLANKET: Supervisor with first- • hand knowledge of the work done • certifies all federally-funded • employees in the school, by the • individual program.

16. Personnel Activity Report (PAR) Documentation of a distribution of the salaries or wages of an employee who works on multiple cost objectives. PAR

17. PAR Requirements • Reflect an after-the-fact distribution of the actual activity; • Account for the total activity for which employee is compensated; • Prepared at least monthly and coincide with 1 or more pay periods; • Maintained support documentation; • and • Signed by the employee.

18. PAR Form Required Components • Effort statement that accounts for 100% • of employee’s effort; • Specific cost objective (not just “federal”); • Number of hours worked (no “X” entries); • Time worked on ALL cost objectives; and • Weekly and monthly allocation %.

19. PAR - Reconciliation • Comparisons: Actual costs (based on monthly PAR reports) to budgeted distributions at least quarterly. • Adjustments: Immediately, if quarterly comparisons show differences between budgeted and actual costs charged to federal program are 10% or more. Annually, if quarterly comparisons show differences between budgeted and actual costs charged to the federal program are less than 10%.

20. PAR – Substitute Systems • Plan approved by DPI that specifies the months that PAR forms will be completed; • The next year’s number of reporting months is recalculated annually; • Comparisons must be conducted each time an employee completes a PAR (2 or 3 times a yr.); • The adjustment must be conducted immediately, regardless of the difference (+/− 10%); and • Handbook must be maintained and updated.

21. ??? Semi Annual Semi Annual PAR

22. Semi-Annual Certification or PAR??? • Question 1. An elementary special education teacher is paid 50% from federal PRC 60 and 50% from state PRC 32. Would it make any difference if the special education teacher worked part of the day in an elementary school and part of the day in a middle school?

23. Semi-Annual Certification or PAR??? Question 2: EC/Title I Director is paid 60% with federal PRC 60 funds and 40% with federal Title I funds.

24. Semi-Annual Certification or PAR??? Question 3: A preschool teacher has 12 students in her class-4 funded with special education federal PRC 49 funds, 4 funded with federal Title I funds and 4 funded with state More At 4 funds.

25. Equipment • Internal Controls (Policies and Procedures) • Identification (Tag & Track) • Inventory (at least every two years)

26. Equipment– Internal Controls • Compliance with policies/procedures • “Significant technological items” – Non-consumable, Useable life > a year, and Can be converted to personal use.

27. Equipment - Identification • Description • Serial number/other ID number • Source • Title holder • Cost • Percentage of federal participation in cost • Location • Use, condition, disposition • Acquisition cost

28. Equipment - Inventory • Physical inventory at least every two years. • Reconciliation with property records. • Submission of Equipment Disposition Request Form.

29. CONTRACTED SERVICES WHO? WHAT? WHEN? Don’t get burned!! WHERE?

30. Contracts • Invoices for contracted services must be supported by a valid contract. • Expenditures from contract codes (i.e. 311, 317, 318, 331, 344) MUST have a contract. • Check the Debarment & Suspension list of vendors before contracting. • Review and approve all special education services contracts and invoices.

31. Would you get burned with this contract? Sunshine School District (SSD) has purchased services from Flowing Waters Related Services (FWRS) for the 2012-13 school year. In your packet you will find a contract between SSD and FWRS, and an invoice from SSD for the month of August. What corrections would you require before you would approve this invoice for payment?

32. Maintenance of Fiscal Effort (MOE) The Sun will come out tomorrow! State & Local Total Expenditures Local Expenditures Only State & Local Total Per Child Expenditures Local Expenditures Per Child Only

33. MOE Exception §300.204 • Voluntary departure of special education/related service personnel, retirement/otherwise/just cause; • Decrease in enrollment of SWDs; • Termination of costly expenditures for long-term purchases, such as acquisition of equipment or construction of school facilities; • Termination of an exceptionally costly obligation to a particular SWD because child has left jurisdiction, aged out, or no longer needs special education; and/or • Assumption of cost by SEA high cost fund (PRC 114).

34. MOE Adjustment In Certain Fiscal Years §300.205 Increase in IDEA 611 funds since prior fiscal year; ”Meets Requirements” under IDEA (determinations); No action taken against LEA by SEA under IDEA; FAPE responsibility not taken away by SEA; Not identified w/significant disproportionality; AND Amount of funds intended for CEIS permissive use is counted toward maximum amount of expenditures LEA may reduce.

35. Coordinated Early Intervening Services (CEIS) Start Early!

36. CEIS Requirements • Provision for students K-12 (particularly K-3) not identified as SWDs, but need academic and behavioral support to succeed in general education. • Mandatory for LEAs identified with significant disproportionality based on race and ethnicity of SWDs with respect to identification, including specific disability categories, placement in particular educational settings, and incidence, duration and type of disciplinary actions. • LEAs must report the number of children who received CEIS, and the number of those children who subsequently received special education and related services during the two years after receipt of CEIS.

37. CEIS Funds • Permissive use – up to 15% of total IDEA Part B funds (611+619). • Mandatory use – 15% of total IDEA Part B funds (611+619). • Funds transfer from PRC 060 to PRC 070. • Allowable use of funds for targeted CEIS students include personnel, contracted services and equipment.

38. #3 Timely and Accurate Data • IDEA 611 Grant Application • Desk Review • Child Count • Any data requested by DPI

39. SEA Responsibilities • IDEA Fiscal Monitoring • Training • Technical Assistance

40. IDEA Fiscal Monitoring • Tiers • Audit Results • On-Site Visit Preparation

41. Semi-Annual Certification – Audit Findings • Statements did not include language - “IDEA Activities”. • Signatures dated before ending period. • Period and signature not included on blanket certifications with multiple employee lists.

42. PAR – Audit Findings • Incomplete effort statement. • No monthly % allocation calculation. • No reconciliation evidence.

43. Equipment – Audit Findings • Incomplete policies/procedures (purchasing, physical inventory, federal funds use/nonuse) • Incomplete management records (identification, physical inventory)

44. MOE - Audit Findings • Completion of incorrect calculation form. • Justification form not submitted for reduction. • Inappropriate recording of federal expenditures. • Budgeted/encumbered entries on calculation form and not year-to-date expenditures. • Discrepancies between calculation form and expenditure reports. • Unidentifiable expenditures for transportation calculation.

45. Your Resources Don’t’ hesitate to ask for help!! Valencia Davis valencia.davis@dpi.nc.gov Valerie Herndon valerie.herndon@dpi.nc.gov Carolyn Hammond carolyn.hammond@dpi.nc.gov