8305-Federal Grant Administration ## Financial Management Systems and Internal Controls
The finance officer shall be responsible to the superintendent to develop, monitor, and enforce effective financial management systems and other internal controls over federal awards that provide reasonable assurance that the school system is managing the awards in compliance with all requirements for federal grants and awards. Systems and controls must meet all requirements of federal law and regulation, including the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) issued by the U.S. Office of Budget and Management and any applicable state requirements, and shall be based on best practices.
The financial management and internal controls must provide for (1) identification of all federal funds received and expended and their program source; (2) accurate, current, and complete disclosure of financial data in accordance with federal requirements; (3) records sufficient to track the receipt and use of funds; (4) effective control and accountability over assets to assure they are used only for authorized purposes; and (5) comparison of expenditures against budget. In addition, written procedures must be established for cash management and for determining the allowability of costs, as required by the Uniform Guidance.
At a minimum, the systems and controls shall address the following areas:
Costs charged by the school system to a federal grant must be allowed under the individual program and be in accordance with the cost principles established in the Uniform Guidance, including how charges made to the grant for personnel are to be determined. Costs will be charged to a federal grant only when the cost is (1) reasonable and necessary for the program; (2) in compliance with applicable laws, regulations, and grant terms; (3) allocable to the grant; (4) adequately documented; and (5) consistent with school system policies and administrative regulations that apply to both federally-funded and non-federally funded activities. Internal controls shall be sufficient to provide reasonable assurance that charges to federal awards for personnel expenses are accurate, allowable, and properly allocated and documented. Prior written approval for certain cost charges must be obtained as required by the awarding agency in order to avoid subsequent disallowances.
2. Cash Management and Fund Control
Payment methods must be established in writing that minimize the time elapsed between the draw of federal funds and the disbursement of those funds. Standards for funds control and accountability must be met as required by the Uniform Guidance for advance payments.
All purchases for property and services made using federal funds must be conducted in accordance with all applicable federal, state and local laws and regulations, the Uniform Guidance, and the school system’s written policies and procedures. The district shall avoid situations that unnecessarily restrict competition, as defined in 2 C.F.R. 200.319, and shall avoid acquisition of unnecessary or duplicative items. Noncompetitive procurement will be used only in the circumstances allowed by 2 C.F.R. 200.320. Individuals or organizations that develop or draft specifications, requirements, statements of work, and/or invitations for bids, requests for proposals, or invitations to negotiate, must be excluded from competing for such purchases.
Contracts are to be awarded only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. No contract shall be awarded to a contractor who is suspended or debarred from eligibility for participation in federal assistance programs or activities.
Purchasing records must be sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred.
The requirements for conflicts of interest established below in subsection A.4 are applicable to all procurements.
4. Conflict of Interest
Each employee, board member, or agent of the school system who is engaged in the selection, award, or administration of a contract supported by a federal grant or award (“covered individual”) and who has a potential conflict of interest shall disclose that conflict in writing to the superintendent. The superintendent shall disclose in writing any potential conflict of interest to the federal awarding agency in accordance with 2 C.F.R. 200.112.
For purposes of this paragraph, a conflict of interest would arise when (1) the covered individual, (2) any member of his or her immediate family, (3) his or her partner, or (4) an organization which employs or is about to employ any of those parties has a financial or other interest in or receives a tangible personal benefit from a firm considered for a contract. A covered individual who is required to disclose a conflict in accordance with this paragraph shall not participate in the selection, award, or administration of a contract supported by a federal grant or award.
Covered individuals shall not solicit or accept any gratuities, favors, or items from a contractor or a party to a subcontract for a federal grant or award; however, covered individuals may accept (1) a single unsolicited item with a value of $50 or less or (2) multiple unsolicited items from a single contractor or subcontractor having an aggregate monetary value of $100 or less in a 12-month period. Violations of this rule are subject to disciplinary action.
5. Mandatory Disclosures
The superintendent shall disclose in writing to the federal awarding agency in a timely manner all violations of federal criminal law involving fraud, bribery, or gratuities potentially affecting any federal award. The superintendent shall fully address any such violations promptly and shall notify the board accordingly. The board may request the superintendent to develop a plan of correction for board approval in appropriate situations as determined by the board.
6. Equipment and Supplies Purchased with Federal Funds
Equipment and supplies acquired with federal funds will be used, managed, and disposed of in accordance with applicable state and federal requirements. Property records and inventory systems shall be sufficiently maintained to account for and track equipment that has been acquired with federal funds.
7. Accountability and Certifications
All fiscal transactions must be approved by the finance officer and by the program manager or other person who can attest that the expenditure is allowable and approved under the federal program.
The finance officer shall submit all required certifications and is authorized to sign them on behalf of the board.
8. Monitoring and Reporting Performance
The superintendent shall establish sufficient oversight of the operations of federally supported activities to assure compliance with applicable federal requirements and to ensure that program objectives established by the awarding agency are being achieved. Performance reports, including reports of significant developments that arise between scheduled performance reporting dates, must be submitted as required by federal or state authorities.
Audits and Corrective Action
- An annual independent audit will be conducted as provided in policy 8310, Annual Independent Audit. The finance officer will prepare all financial statements, schedules of expenditures, and other documents required for the audit. 2. At the completion of the audit, the superintendent or designee shall prepare a corrective action plan to address any audit findings. The plan must identify the responsible party and the anticipated completion date for each corrective action to be taken. The superintendent shall present the plan to the board for approval. 3. Compliance deficiencies discovered internally through administrative supervision must be addressed promptly with the goal of improving processes to encourage future compliance and reduce audit findings.
All individuals responsible for the administration of a federal grant or award shall be provided sufficient training to carry out their duties in accordance with all applicable requirements for the federal grant or award.
Other Applicable Board Policies
Other board policies provide additional controls over the administration of federal grants. These include, but are not necessarily limited to:
- Educational programs policies (policies in the 3000 series) 2. School nutrition services policies (policies in the 6200 series) 3. Purchasing policies (policies in the 6400 series) 4. Equipment, materials, and supplies policies (policies in the 6500 series) 5. Personnel policies (policies in the 7000 series) 6. Fiscal management policies (policies in the 8000 series)
The board intends to comply with all requirements applicable to the use of federal funds. To the extent that any provision of a board policy is contrary to a federal law, regulation, term, or condition applicable to a federal award, employees must follow the applicable federal requirement.
Reporting Mismanagement of Federal Funds
Any employee who reasonably believes that federal funds have been misused or that the school system is otherwise in violation of any requirement applicable to the receipt and use of federal funds should report the matter as provided in policy 1760/7280, Prohibition Against Retaliation.
Legal References: 2. C.F.R. Part 200
Cross References: Prohibition Against Retaliation (Policy 1760/7280), Fiscal Management Standards (policy 8300)
Other References: Standards for Internal Control in the Federal Government (“The Green Book”) (GAO), available at http://www.gao.gov/greenbook/overview; Internal Control Framework (Committee of Sponsoring Organizations of the Treadway Commission (COSO)), executive summary, available at http://www.coso.org/ic.htm; Compliance Supplement, Part 6, Internal Control (Office of Management and Budget), available at https://www.whitehouse.gov/omb/financial_fin_single_audit