For regions that have not recently received a federal monitoring review, Education should use the detailed expenditure reports to select a sample of expenditures, request supporting documentation from the regions, and then review the expenditures to determine if they meet applicable federal and state criteria.
Fully implemented. Education utilizes a detailed checklist for reviewing each subgrantee's expenditure report. The checklist includes: (1) reviewing reported expenditures; (2) identifying abnormalities such as unapproved items, over budgeted items, and offsetting credits; and (3) requiring LEAs to provide a budgeted expenditure report for object code 4300 (materials and supplies), object code 5800 (contracts with outside vendors), and any other object code Education deems necessary as part of the expenditure review process. Education utilizes this detailed information to evaluate expenditures for adherence to federal administrative cost principles. In addition, a Webinar was conducted for all subgrantees to alert and reinforce the new requirement to include budgeted expenditure reports.
Attachments 2, 3, 4, and 5 illustrate an example of Education's detailed expenditure review process, across four quarters in 2015-16, for one subgrantee.
Education's internal guidance indicates that the department is targeting regions that have not had a recent federal monitoring review. Education's requests support for expenditures in key object codes and reviews them to see if they are allowable. We reviewed an example of Education disallowing an expenditure as a result of this process.
In 2014-15, Education developed a detailed checklist for reviewing each subgrantee's expenditure report. This checklist includes: (1) reviewing reported expenditures; and (2) identifying abnormalities such as unapproved items, over-budgeted items, and offsetting credits.
For 2015-16, Education will add an item to the checklist for regions that have not recently received a federal monitoring review. For these regions, Education will select a sample of expenditures and request supporting documentation to
ensure the expenditures are aligned with the approved budget, and meet applicable federal and state criteria.
As it acknowledges in its response, Education has not yet implemented a review of a sample of expenditures at regions that have not recently received a federal monitoring review. Therefore, this recommendation is pending implementation.
Education is currently developing a multi-year plan to monitor the expenditures of regions not selected for federal monitoring review. This monitoring plan will be included in the revised MEPFH that will be finalized in December 2014. Monitoring of expenditure reports will include: (1) selecting a sample of expenditures; (2) requesting supporting documentation from the regions; and (3) reviewing expenditures to determine compliance with applicable federal and state criteria. In addition, Education's detailed reviewer checklist ensures that all appropriate signatures and approvals are obtained prior to release of program funds.
Education standardized procedures for reviewing Migrant Regions expenditure reports. These procedures include, when necessary, selecting a sample of expenditures, requesting supporting documentation from the regions, and reviewing the expenditures to determine compliance with applicable federal and state criteria. A detailed reviewer checklist ensures that all appropriate Education signatures and approvals are obtained prior to release of program funds.
Although Education provided a checklist used by its fiscal staff to review regular budget reports from its migrant program regions, the checklist does not direct staff to consider how long it has been since a region received a federal monitoring review. Further, as noted in recommendation three, the expenditure reports that regions submit would not allow Education to select expenditures for review.
The increased level of detail of the redesigned expenditure reports will allow Education to more readily evaluate expenditures for adherence to OMB Circular A-87 Cost Principles. For FY 2013-14, Education will provide technical assistance to the regions over the new and revised expenditure reports, and follow up to ensure regions are completing the reports correctly. In addition, Education's administrators will provide guidance and oversight to Education staff responsible for the review and monitoring of the expenditure reports and will conduct random checks of reports, both internal and external, to ensure consistency.
To determine if regions are meeting applicable federal and state criteria, Education created a new District Service Agreement and the Regional Application (RA) that includes specific guidance and direction. The revised applications require more specific details from regions on their proposed services as they relate to specific budget line items. Education is also revising the current expenditure report to align with the new budget template that is part of the RA which results in a more detailed review of expenditures necessary to fund the Migrant Education Program (MEP) regionally. The revised expenditure reports will also provide clearer expenditure breakdowns to more accurately determine specific administrative costs (e.g., administrative salaries, support staff, materials), direct services (e.g., instructional program, pre-school services) and state required activities (e.g. identification and recruitment).
In addition to the Federal Program Monitoring reviews, Education is developing a MEP expenditure review process in which regions will be selected on a rotating basis to ensure applicable federal and state criteria are being met. Education plans to review 25 percent of the regions each fiscal year using the revised expenditure reports. Education will then select a sample of expenditures reported by these regions and request the necessary documentation to substantiate the costs. As part of these reviews, Education will provide ongoing technical assistance in addition to other specific technical assistance meetings.
Agency responses received after June 2013 are posted verbatim.