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LOGIC: Logistics of Grants Internal Controls
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LEAs (local educational agencies, which includes Independent School Districts and Open-Enrollment Charter Schools) must establish and maintain effective internal control over their federal grant awards. The internal controls should provide reasonable assurance that the LEA is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR §200.303

The purpose of the LOGIC webpage is to provide resources to assist LEAs with certain internal control processes.

  • Monthly calendars are posted to help LEAs stay informed of various TEA due dates and deadlines.

    The calendars include deadlines obtained from TEA listserv emails, TEA correspondence letters, and TEA's webpage. Although the calendars cannot capture every due date and deadline, the calendars are fairly comprehensive in regards to fiscal and programmatic dates.

    Each month's calendar covers the 1st of the month to the 15th of the following month, to provide an overlap of dates.

    Two Calendar Versions:

    • "At a Glance" lists due dates and deadlines only
    • "Detailed" provides more detailed information concerning the topic. If the information was obtained from TEA correspondence, the letter is copied and pasted into the calendar.

    The following calendars are located on TEA's website:

         

       

         

         

               Under "TEDS 2017-2018", select "For ESCs & LEAs Using TSDS PEIMS Only".

              Then select "Section 8.1: PEIMS Data Submission Responsibilities".

              The schedule of timelines is located on page 10.

    LEAs must establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.

    • Written policies and procedures serve as internal control activities to ensure compliance
    • Written policies and procedures are beneficial training tools and help maintain consistency in implementation

    EDGAR requires the following written policies and procedures:

    • Cash Management Procedures: 2 CFR §200.302(b)(6) & §200.305
    • Conflicts of Interest Standards of Conduct: 2 CFR §200.318(c)(1)&(2)
    • Compensation Policies and Procedures: 2 CFR §200.430, including: Compensation - Personal Services: 2 CFR §200.430(a); Professional Activities Outside the LEA: 2 CFR §200.430(c); Fringe Benefits: 2 CFR §200.431; and Relocation Costs of Employees: 2 CFR §200.464
    • Determining Allowability of Costs Procedures: 2 CFR §200.302(b)(7)
    • Procurement: Method for Conducting Technical Evaluations of Proposals and Selecting Recipients: 2 CFR §200.320(d)(3)
    • Procurement Transactions Procedures: 2 CFR §200.318(a); 2 CFR §200.319(c); 2 CFR §200.320
    • Travel Reimbursement Policy: 2 CFR §200.474

    The APM, Procurement, and Travel templates provide the framework for LEAs to create customized administrative policies and procedures.

    • The templates may not include all federal and state compliance requirements.
    • The templates are intended to be a starting point and reference guide for your LEA to draft policies and procedures that are unique to the specific circumstances of your organization.
    • It is imperative that the customized manual(s) contain your LEA's local policies and procedures, as well as federal and state requirements. Auditors will review your written policies and procedures to ensure the procedures are being implemented as written.
    • Review your written procedures manual(s) annually and revise as needed based on TEA and USDE guidance, audit findings, and changes in local policy and processes.

    Always customize!

    Your written policies and procedures manual(s) must

    accurately reflect local processes.

    The APM (Administrative Procedures Manual) template provides the framework for creating localized policies and procedures for the administration of federal, state, and local funds.

    The APM template does not include procedures for procurement or travel reimbursement. Instead, text in the APM template directs the user to reference the separate Procurement and Travel manuals, as applicable.

    Please note: This APM manual was created August 2017 and will not be updated. Whenever TEA or USDE releases updates applicable to APMs, the information will be added to this webpage as a separate document so LEAs may revise their customized APMs accordingly.

    Use of the LOGIC resources are entirely at the LEA's risk and does not guarantee that the LEA will not have an audit finding or questioned costs.

    ESC-20 Resources:

    The ESC-20 Resource: Procurement template provides the framework for creating localized procurement policies and procedures for the administration of federal, state, and local funds.

    Texas Comptroller Resources:

    The Texas Comptroller of Public Accounts' procurement resources for state government, cities and counties may be useful to LEAs to modify certain generic processes for local procedures.

    TEA Resources:

    "FASRG Purchasing Module", "Comparison of New EDGAR and FASRG Procurement Process", and "Guidance and Best Practices for Professional Services Contracts" provide TEA guidance related to purchasing/procurement.

    The ESC-20 Resource: Procurement template provides the framework for creating localized procurement policies and procedures for the administration of federal, state, and local funds.

    The Procurement template includes EDGAR requirements and the state purchasing rules found in Texas Education Code (TEC) 44.031, which is applicable to ISDs and to certain charter schools that choose to adopt the purchasing rules of TEC 44.  If your charter school does not adopt the purchasing rules of TEC 44, many of the sections of this template will not be appropriate and will need to be replaced with purchasing procedures that apply to your charter school.

    Please note: This Procurement Template was created August 2017 and will not be updated. Whenever TEA or USDE releases updates applicable to procurement, the information will be added to this webpage as a separate document so LEAs may revise their customized Procurement Procedures Manual accordingly.

    Use of the LOGIC resources are entirely at the LEA's risk and does not guarantee that the LEA will not have an audit finding or questioned costs.

    PROCUREMENT THRESHOLD CHANGES:

    The Office of Management and Budget (OMB) released a memo dated 6/20/2018 regarding increased procurement thresholds for micro-purchases and the simplified acquisition threshold.

    Page one of the OMB memo indicates the increase in procurement thresholds for all recipients:

    • Micro-purchase threshold increased to $10,000
    • Simplified Acquisition Threshold increased to $250,000

    Page two of the OMB memo is granting an exception allowing recipients to use the higher thresholds effective upon the date of the memo (6/20/18)*.

    *However, TEA released a To The Administrator Addressed letter stating that the effective date will be July 1, 2018. Please review TEA's August 28, 2018 letter, particularly the information regarding cumulative aggregate costs during the grant year in relation to the thresholds, and the state's more restrictive rules for competitive procurement methods required for purchases valued at $50,000 or more in accordance with Texas Education Code 44.031.

    For an understanding of the various procurement thresholds and which method follows federal rules or state rules, please refer to the explanation 7.1 of TEA's EDGAR FAQ document, keeping in mind that the FAQ has not been updated since June 2017. Simply replace the existing $3,500 micro-purchase amount with the new amount of $10,000 and the existing $150,000 amount with the new amount of $250,000.

    Please update your procurement manual accordingly, if you wish to adopt the new thresholds. If you choose to keep the thresholds at the lower amounts, that will be considered your local policy. The most restrictive of federal, state, or local policy must be followed.

    Texas Comptroller of Public Accounts Resources:

    Model Purchasing Manual for Texas Cities and Counties 2010:

    The "Model Purchasing Manual for Texas Cities and Counties 2010" was designed by the Texas Comptroller's office to "help Texas local governments establish or improve purchasing operations."

    Although the manual is outdated and no longer available on the comptroller's website and intended for cities and counties, the manual is included on the LOGIC website as a resource for LEAs that may desire to adapt some generic processes for their local procedures.

    The State of Texas Procurement Manual:

    The "State of Texas Procurement Manual" is intended for state agencies. The website link to the state's manual is included on the LOGIC website as a resource for LEAs that may desire to adapt some generic processes for their local procedures. 

    FASRG Purchasing Module

    TEA's Financial Accountability System Resource Guide (FASRG) Purchasing Module version 14 provides information regarding state procurement requirements. The module also provides sample forms an LEA could modify for local use. As you use this module in developing your local procedures, keep in mind that you will also need to incorporated federal EDGAR procurement requirements in instances where the federal requirements are more restrictive.

    Comparison of New EDGAR and FASRG Procurement Process

    TEA's chart provides a preliminary comparison of key procurement standards in the new EDGAR regulations to key provisions of TEA's existing purchasing/procurement process addressed in the FASRG. This document was developed in 2015.

    Guidance and Best Practices for Professional Services Contracts

    TEA's Guidance and Best Practices document was designed to assist LEAs in identifying key issues to consider regarding allowable use of funds as it relates to professional services contracts. The document was also designed to assist LEAs in avoiding potential audit/monitoring findings.

    New Guidance from TEA: Purchasing from your ESC with Federal Funds

    TEA released guidance on November 30, 2017 regarding options available for procuring services with federal funds from ESCs.

    New: TEA Presentation at ESC-20 January 26, 2018: Federal Grant Procurement Rules and Regulations.

    The ESC-20 Resource: Travel template provides the framework for creating localized travel policies and procedures for the administration of federal, state, and local funds.

    Please note: This Travel Template was released July 2017 and will not be updated. Whenever TEA or USDE releases updates applicable to travel reimbursement, the information will be added to this webpage as a separate document so LEAs may revised their customized Travel Procedures Manual accordingly.

    Use of the LOGIC resources are entirely at the LEA's risk and does not guarantee that the LEA will not have an audit finding or questioned costs.

    An LEA's fiscal practices must demonstrate compliance with applicable EDGAR requirements.

    *At a minimum, the LEA's Administrative Procedures Manual (APM) must address the following fiscal and fiscal-related activities:

    1. Accounting for property and supplies purchased with federal funds.
    2. Budgeting and accounting for federal grants.
    3. Financial reporting and cash management for federal grants.
    4. Using federal funds for the specific purposes of the grant program.
    5. Maintenance and retention of records pertaining to federal grants.
    6. Procurement of goods and services using federal grants.
    7. Appropriate documentation and use of program income generated from activities supported by federal grants, if applicable.
    8. Support of salaries, wages, and related costs charged to federal grants.
    9. Payment of travel reimbursement from federal grants.
    10. Use of credit, debit, gift, and procurement cards, if applicable.
    11. Management and disposal of property purchased with federal funds.
    12. Compliance with conflict of interest requirements.
    13. Preventing and reporting fraud, waste, and abuse of federal funds.

    *Information obtained from TEA's 2016-2017 Federal Grant Review letter to selected LEAs

    As a proactive measure, compare these requirements to your LEA's procedures manual(s) to ensure all elements are included.

    Use the APM Internal Controls Questionnaire to evaluate your manual(s).

    The Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides frameworks and guidance on enterprise risk management, internal control and fraud deterrence.

    2 CFR §200.303(a) includes COSO's "Internal Control Integrated Framework" as a suggested resource for internal control guidance.

    Access the COSO "Guidance on Internal Control" webpage.

    The U.S. Government Accountability Office (GAO) sets the standards for an effective internal control system for federal agencies in the Standards for Internal Control in the Federal Government, known as the "Green Book." 

    The Green Book may also be adopted by state, local, and quasi-governmental entities as a framework for an internal control system.

    2 CFR §200.303(a) includes GAO's "Standards for Internal Control in the Federal Government" as a suggested resource for internal control guidance.

    Access the GAO "The Green Book" webpage.

    The United States Department of Education (USDE) developed an Internal Control Tool Kit that includes:

    • Use of Funds Guidance
    • Self-Assessment Checklists
    • Procurement Examples
    • Internal Control Glossary

     

    Access the USDE "Internal Controls" webpage

  • Time Distribution reporting is applicable to any employee paid in full or in part with federal funds.

    Compensation charges to federal awards must be reasonable, accurate, allowable, and properly allocated.

    Federal regulations require time distribution documentation to ensure that charges to each federal program reflect an accurate account of the employee's time and effort devoted to that program.

    Time and Effort session #50411 held at ESC-20 on 9/14/18.

    The new EDGAR is less prescriptive regarding time distribution documentation. LEAs must have adequate internal controls to ensure charges to the Federal awards are reasonable, accurate, allowable, and allocable.

    As long as the LEA's internal controls and documentation meet the EDGAR standards of 2 CFR §200.430(i), the LEA has flexibility on how they comply with time distribution reporting.

    Best practice is to follow the old EDGAR documentation standards of 2 CFR §225 (OMB Circular A-87).

    Sample forms for Single Cost Objective and Multiple Cost Objective employees are available below, as well as sample Extra Duty Pay Agreement and Supplemental Pay Agreement forms.

    Job descriptions that are up-to-date, signed and dated by the employee and supervisor, are considered to be an internal control activity that signifies the employee's understanding of their job duties.

    Job descriptions for employees paid from federal funds are an important internal control to ensure the employee understands their responsibilities and does not inadvertently perform duties unallowable for their fund source.

    Job descriptions for employees paid from federal funds should clearly state whether the position entails a Single Cost Objective or Multiple Cost Objectives and whether funding is split among multiple sources.

    Review the flyer below for a list of grant management workshops being held at ESC-20 during the 2018-2019 school year.
    Workshop #48416 on Desk Audits was presented on May 24, 2018.
    EDGAR (Education Department of General Administrative Regulations) Overview presented on October 10, 2018 at the AAASBO (Alamo Area Association of School Business Officials).

    Maintenance of Effort (MOE) for ESSA and IDEA-B: Preparing for the New School Year

    Workshop #50410 held September 26, 2018.

    Presentation materials available on the ESC-20 Special Education Funding and Compliance webpage

    TEA revised the look of the eGrants home page.

    The presentation below provides instructions on how to navigate the new eGrants system.

    Cory Green, TEA Associate Commissioner, Department of Contracts, Grants and Financial Administration presented at ESC-20 on January 26, 2018 on the federal procurement standards under the new EDGAR.

    Time and Effort

    This workshop was held September 14, 2018.

    Materials are available on this website under the toggle titled "Time and Effort (Time Distribution) Federal Requirement."

 

DISCLAIMERS:

Within the LOGIC webpage are resources developed, adapted, or acquired by ESC-20 from public websites and other public sources readily available in the public domain. No copyright is claimed for those materials.

ESC-20 and its affiliates and suppliers disclaim any representations or warranties that use of the LOGIC resources will satisfy or ensure compliance with any legal obligations or laws or regulations. The disclaimer applies to, but is not limited to, the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), the Gramm-Leach-Bliley Act of 1999, the Sarbanes-Oxley Act of 2002, or other Federal or State statutes or regulations.

Use of the LOGIC resources are entirely at the LEA's risk and does not guarantee that the LEA will not have an audit finding or questioned costs.

To the maximum extent permitted by applicable law, ESC-20, its affiliates, and suppliers disclaim all warranties, expressed or implied, including any warranty that the LOGIC resources are fit for a particular purpose, title, merchantability, data loss, non-interference with or non-infringement of any intellectual property rights, or the accuracy, reliability, quality, or content in or linked to the LOGIC webpage.

Contact:
Denise Dusek
Phone: (210) 370-5378
Fax: (210) 370-5755

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