1 tier 1 training annual updates 2010-2011 school year school management issues & updates school...

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Tier 1 TrainingAnnual Updates

2010-2011 School Year

School Management Issues & UpdatesSchool Finance Issues & Updates

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Required TrainingACA Section 6-20-2204

• Tier 1 & Tier 2 apply to school districts, open-enrollment charter schools and education service cooperatives.

• Tier 1 required for:– Superintendents– Cooperative Directors– Charter Schools Directors– Person responsible for preparing budget or

overall accounting responsibility (GBM)

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General Business ManagerACA Section 6-15-2302

• A chief financial officer or business manager, however the position is titled, who:– Is responsible for fiscal operations– Under direction of superintendent– Meets minimum qualifications specified by

ADE Rule

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Required Tier 1 - ContentACA Section 6-20-2204

• School laws of Arkansas;

• Laws and rules governing the expenditure of public education funds, fiscal accountability, and school finance;

• Ethics; and

• Financial accounting and reporting of schools, school districts, open-enrollment public charter schools, and cooperatives.

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Tier 1 Initial Training-12 HoursACA Section 6-20-2204

• School Revenues – 2 hrs

• School Expenditures – 2 hrs

• School Ethics & Audit Compliance – 2 hrs

• School Purchasing – 2 hrs

• School Finance Issues & Updates – 2 hrs

• School Management Issues & Updates-2hrs

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Tier 1 Annual TrainingACA Section 6-20-2204

• 4 hours of annual training and instruction in order to maintain basic proficiency in the topics required in the initial 12 hours of Tier 1 training.– Must receive training by December 31st for the

current school year.• Accreditation citation for failure to meet December

31st deadline.• Unable to continue in position if training not

received by March 1st of following calendar year.

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• For employees who do not make decisions about selecting codes or who have a limited number of codes that they can use.– Principals– Assistant Principals– School Secretaries– Program Directors

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• 4 hours per year• School district, charter school or

cooperative responsible for providing the training

• Trainers required to attend Tier 1 training• Maintain records of all employees required

to have Tier 2 training and who have completed Tier 2 training.

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School Finance Issues & Updates

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Educational Financial Accounting and Reporting Act of 2004 (6-20-2201)

• Budget report (6-20-2202)

– Submitted to ADE through APSCN with cycle 1 due September 30th.

– To be approved by board in a legally held meeting and signed by president and ex- officio financial secretary.

– If budget not submitted by September 30th:– Warrants and checks issued after September 30 not

valid– Ex officio financial secretary or surety liable for

checks/warrants issued after September 30th

– State funding suspended until budget submitted

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• Annual financial report (6-20-2202)– Submitted to ADE through APSCN with cycle

9 due August 31st.– Information required:

• Daily expenditures and receipts• Fund balances• Reasons for maintaining rather than spending fund

balances• Transfers between funds

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• Final Close of General Ledger– Required by September 15th for year ended

the previous June 30th.– No changes can be made to the prior year

financial data after September 15th.• If changes are made after submitting cycle 9, cycle

9 must be re-submitted by September 15th.• If a change is needed after final close but before

September 15th, APSCN can assist.

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• Uniform budget and accounting system– Arkansas Educational Financial Accounting

and Reporting System• Establish and implement process and procedures

for financial reporting.• Uniform chart of accounts-Arkansas Financial

Accounting Handbook (Arkansas Handbook).– To comply with federal reporting requirements– Provide valid comparisons of expenditures of schools,

school districts, charter schools and cooperatives.

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• Arkansas Handbook shall include, but not be limited to:– Categories to allow for the gathering of data

on separate functions and programs;– Categories and descriptions of expenditures

to be reported on the annual school performance report; and

– Categories and descriptions of expenditures that allow for the gathering of data required by law.

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• Examples of categories of expenditures required to be reported:– Annual School Performance Report:

• Total expenditures• Instructional expenditures• Administrative expenditures• Extracurricular expenditures• Capital expenditures• Debt Service expenditures

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• Examples of categories of expenditures required to be reported-Continued:– Functions and programs provided by law:

• Athletic expenditures• Student transportation expenditures• School district level administrative costs• School level administrative costs• Instructional facilitators• Supervisory aides

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• Functions and programs provided by law-Continued:– Substitutes– Property Insurance

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• Examples of categories of expenditures required to be reported-Continued:– From following sources of revenue:

• Student growth• Declining enrollment• Special education catastrophic occurrences• Special education services• Technology grants• Debt service funding supplement

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• From following sources of revenue-Continued:

• General facilities funding• Distance learning• Gifted and talented

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• Examples of categories of expenditures required to be reported-Continued:– Categories and descriptions of restricted fund

balances.– Categories and descriptions of expenditures

that each education service cooperative shall report on its annual report authorized by law.

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• Arkansas Financial Accounting Handbook and APSCN– Web site location of Handbook is

http://www.apscn.org/• FMS>Financial Management System-Training

Documentation– Arkansas Financial Accounting Handbook 2009/2010– Commissioner’s Memos on Coding– Frequently asked questions

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• Arkansas Handbook modeled after the Financial Accounting for Local and State School Systems, 2003 Edition (National Center for Education Statistics, U.S. Department of Education-Institute of Education Sciences, NCES-2004-318)

• A new NCES edition was published June, 2009. Online version can be found at: http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2009325

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Arkansas Financial Accounting Handbook

• ADE’s Arkansas Public School Computer Network (APSCN) is responsible for maintaining the Arkansas Handbook and implementing revisions necessary to gather and report financial data required by state and federal law.

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• Financial coding structure (chart of accounts) within Arkansas Handbook– Fund– Source of Fund– Function– Location– Program– Subject Area– Object

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• Fund– Teacher Salary Fund (Fund 1)– Operating Fund (Fund 2)– Building Fund (Fund 3)– Debt Service Fund (Fund 4)– Dedicated M & O/Capital Outlay (Fund 5)– Federal Fund (Fund 6)– Activity Fund (Fund 7)– Food Service Fund (Fund 8)

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• Source of Fund

– Examples:• Student Growth Funding (217)• Declining Enrollment (218)• Professional Development (223)• Alternative Learning Environment (275)• English Language Learners (276)• National School Lunch Act-State (281)

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• Function– Instruction (1000-1999)– Support Services (2000-2999)– Operation of Non-Instructional Services(3000-

3999)– Facilities Acquisition and Construction (4000-

4999)– Other Uses (5000-5999)

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• Instruction Function-direct interaction between teachers and students– Regular Programs (1100-1199)– Special Education (1200-1299)– Workforce Education (1300-1399)– Adult/Continuing Education (1400-1499)– Compensatory Education (1500-1599)– Other Instructional Programs (1900-1999)

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• Support Services Function-provide administrative, technical and logistical support to facilitate and enhance instruction.– Includes:

• Student Support (2100-2199)• Instructional Staff Support (2200-2299)• General Administration (2300-2399)• School Administration (2400-2499)

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• Support Services Function-provide administrative, technical and logistical support to facilitate and enhance instruction-Continued:– Includes:

• Central Services (2500-2599)• Operation & Maintenance of Plant (2600-2699)• Student Transportation (2700-2799)

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• Operation of Non-instructional Services Function– Food Service Operations– Other Enterprise Operations– Community Services Operations

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• Facilities Acquisition and Construction Services Function– Land Acquisition– Land Improvement– Architectural & Engineering Services– Building Acquisition and Construction– Site Improvement– Building Improvements

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• Other Uses Function– Debt payments (principal & interest)– Transfers to other district funds– Indirect costs– Payments to state for prior year overpayment– 98% URT collection rate exceeded per 6-20-

2305

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• Location Code – The three-digit ADE assigned LEA number for schools that identifies the campus where funds are expended.

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• Program Code – a program is a plan of activities and procedures designed to accomplish a predetermined objective or set of objectives. This code will enable all expenditures pertaining to a particular program to be tracked across funds, sources of funds, functions and locations.

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• Program Code Examples:– NSLA Supplementing Salaries of Teachers

(015)– State Academic Facilities Funded (070-099)– Athletics (115)– Non-athletic extracurricular activities (116)– Special Education (200)– Gifted & Talented (270)– Alternative Education (438)

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• Subject Area – Use of this code is not currently required by ADE. School districts use this code for a variety of purposes pertaining to their own needs. State or federal reporting requirements could require designated subject area codes at some point in the future.

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• Expenditure Budget Unit – The sixteen-digit number entered for all expenditures that includes the fund, source of fund, function, location, program, and subject area codes.

• Revenue Budget Unit – The four-digit number entered for all revenue that includes the fund and source of fund codes.

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• Revenue Object /Account – A five digit number that describes the revenue.

• Expenditure Object – A five digit number that describes the type of expenditure:– Salary (61000-61999)– Employee Benefit (62000-62999)– Purchased Services (63000-65999)– Supplies and Materials (66000-66999)– Capital Outlay (67000-67999)– Other (68000-68999)

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Coding Changes for 2009-2010

• Expenditures from Foundation & Enhanced Funding (FIN-09-047, 1/29/09)

• Fund/Source of Fund Codes Required for all expenditures paid with Foundation and Enhanced Educational Funding:– Fund 1-Teacher Salary Fund– Fund 2-Operating Fund– Source of Fund 000– Source of Fund 100-199

See Appendix A-1 for Adequacy Funding Matrix

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Coding Changes for 2009-2010• Revenue included in foundation funding

– State foundation funding (31101)– 25 mills Uniform Rate of Tax (URT)

• Property Taxes (11110-11140)• Excess Commission (11150)• Land Redemption (11160)• Penalties & Interest (11400)• Interest on Unapportioned Property Taxes (11500)

– Miscellaneous Funds (per formula found in ACA 6-20-2303(11)

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Coding Changes for 2009-2010

• Miscellaneous Funds-ACA 6-20-2303(11)– Federal Forest Reserves (42100)– Federal Grazing Rights (42400)– Federal Mineral Rights (42300)– Federal Impact Aid (42500)– Federal Flood Control (42200)– Wildlife Refuge Funds (41200)– Severance Taxes (21200)– Revenue in Lieu of Taxes (12800)– Local Sales & Use Tax for Education (11200)

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Coding Changes for 2009-2010• Enhanced Educational Funding-Revenue

Code 31102– ACA 6-20-2305(a)(2)(C)

(iii) “The General Assembly has determined that the funding provided by the subdivision (a)(2)(C), which is known as “Enhanced Educational Funding”, is in addition to, and in excess of, the amount of funds necessary to provide an adequate education as required by the Arkansas Constitution.”

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Coding Changes for 2009-2010• Enhanced Educational Funding-Revenue

Code 31102-Continued– ACA 6-20-2305(a)(2)(C)

(iv) “Enhanced Educational Funding is available from a combination of fortunate economic factors, conservative budgeting of all state government, and the favorable forecast of state revenues. As a result, the enhanced component of Enhanced Educational Funding cannot be ensured and may not be relied on beyond the 2009-2010 school year.”

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Athletic Expenditures Coding

• Tracking and accounting for the amount of state funds that are used to support interschool athletic programs in public schools. (ACA 6-20-2001 – 6-20-2004)– State funds-All money derived from state revenues,

specifically including, but not limited to, distributions from the Department of Education Public School Fund Account and ad valorem property taxes distributed to a public school or school district.

– Athletic expenditures-All direct and indirect expenses related to interschool athletic programs, prorated if necessary.

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Athletic Expenditures Coding– Interschool athletic program:

• Any athletic program that is organized primarily for the purpose of competing with other schools, public or private; or

• Any athletic program that is subject to regulation by the Arkansas Activities Association.

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Athletic Expenditures Coding• Athletic expenditures to include but not be

limited to:

– Salaries and fringe benefits related to athletic programs.

– Travel, including bus-related operation and maintenance, to and from any interschool athletic program event for students, faculty, spirit groups, band, or patrons of the school district.

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Athletic Expenditures Coding• Athletic expenditures to include but not be

limited to: Continued– Equipment– Meals– Supplies– Property and medical insurance– Medical expenses– Utilities– Maintenance of facilities

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• Rules Governing Athletic Expenditures for Public School Districts-September 2007 (See Appendix B-1)

• Commissioner’s Memo COM-08-156, 6/06/2008-Athletic Expenditures and Allocations (See Appendix B-2)

• Commissioner’s Memo FIN-10-049, 12/30/2009 – Athletic Expenditure Audits (See Appendix B-3)

• Commissioner’s Memo FIN-10-051, 1/14/2010 – FY10 Transportation Rates (See Appendix B-4)

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Athletic Expenditures Coding• Problems reported by Arkansas Division of

Legislative Audit in Special Report on Athletic Expenditures.– For 2008-2009 (48 SE Arkansas districts

reviewed)• Review adjustments totaled $3.4M (14.7%)• Athletic expenditures for 23 districts adjusted in

excess of 10%, ranging from $7,759 to $2.0M.• 27 districts improperly allocated coaches’ salaries• 9 districts improperly allocated construction costs

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– For 2007-2008 (51 NW Arkansas districts reviewed)

• Review adjustments totaled $3.3M (6.8%)• Athletic expenditures for 14 districts adjusted in

excess of 10%, ranging from $11,694 to $457,191.• 4 districts did not properly code athletic related

construction costs.• 18 districts did not code the salaries of spirit group

sponsors and athletic directors as athletic expenditure.

• Program code 115 not used in the budget unit of all athletic expenditures.

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– For 2007-2008 (51 NW Arkansas districts reviewed)-Continued

• 17 districts coded positions such as gatekeepers and bus drivers to “direct instruction-function 1150”.

• 16 districts improperly allocated coaches’ salaries.

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– For 2006-2007 (50 Central Arkansas districts reviewed)

• Review adjustments totaled $4.3M (18.9%)• Athletic expenditures for 19 districts adjusted in

excess of 10%, ranging from $7,518 to $1.1M.• 9 districts failed to properly code athletic related

construction costs.• Salaries of spirit group sponsors and athletic

directors not coded to athletics.• Function code 1150 for “direct instruction” used for

all athletic expenditures.

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– For 2006-2007 (50 Central Arkansas districts reviewed)-Continued

• 20 districts improperly allocated coaches’ base contract amounts between athletics and instruction.

• www.arklegaudit.gov Select “Special Reports” – on the next screen type “Athletic Expenditures” in the search box.

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• Sanctions for improper coding of Athletic expenditures (or other material misstatements in reported data):– Section 8.00 of ADE Rule-Arkansas Financial

Accounting and Reporting System and Annual Training Requirements: (See Appendix B-5)

• Fiscal Distress (Also in Rule Governing Athletic Expenditures for Public School Districts-9.00)

• Probation, suspension or revocation of professional license.

• Accreditation citation/probation.

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Chapter 4 of Arkansas Financial Accounting Handbook- “A Guide for a Minimum Property

Accounting System”

• Expenditures for acquiring capital assets, including land, buildings, equipment, vehicles, furniture, technology related hardware and software, and infrastructure are coded to object codes in the 67100-67499 range if the unit cost is $1,000 or more.

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Accounting System”

• Capital Outlay must meet all of the following criteria:– Retains original shape, appearance and/or

character with use.– Does not lose its identity through fabrication

or incorporation into a different or more complex unit or substance.

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Accounting System”– It is non-expendable; that is, if the item is

damaged or some of its parts are lost or worn out, it is more feasible to repair the item than to replace it with an entirely new unit.

– Under normal conditions of use, including reasonable care and maintenance, it can be expected to serve its principal purpose for at least two years.

– Unit cost of at least $1,000.

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Coding ARRA Revenue & Expenditures

• Commissioner’s Memo FIN-09-077, 5/07/2009, provides the following for American Recovery and Reinvestment Act (ARRA) funds:– Fund/Source of Fund Codes– Revenue Codes– CFDA#– Program Code for Expenditures

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Coding ARRA Revenue & Expenditures

• Expenditure Program Codes:– 050 Buildings/Additions, $2500 or more– 051 Major Renovations, $2500 or more– 052 Equipment, $2500 or more– 053 Vehicles, $2500 or more– 054 Tech. Hardware/Software, $2500 or more– 055 Infrastructure, $2500 or more– 056 Program Direct Service (to students)– 057 Professional Services– 058 All Other

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Fiscal Assessment and Accountability Program

• Indicators of fiscal distress (ACA 6-20-1904):– Declining balance determined to jeopardize the fiscal

integrity of a school district or education service cooperative.

– An act or violation determined to jeopardize the fiscal integrity of a school district or cooperative.

– Any other fiscal condition of a school district or cooperative deemed to have a detrimental negative impact on the continuation of educational services by that district or cooperative.

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• Fiscal Integrity – To comply completely and accurately with financial management, accounting, auditing, and reporting procedures and facilities management procedures as required by state or federal laws and regulations in a forthright and timely manner.

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• Examples of acts or violations:– Failing to properly maintain facilities– Violation of fire, health or safety codes– Violation of construction codes– State or federal audit exceptions or violations– Failure to provide timely and accurate required financial reports– Insufficient funds to cover legal obligations– Failure to meet state expenditure requirements– Failure to comply with purchasing or bid requirements– Default on debt obligations– Material variances between budget and actual– Failure to comply with audit requirements

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• Fiscal Distress Early Intervention (Act 798 of 2009)– Commissioner’s Memo FIN-10-018 provides a checklist superintendents

can use to determine if early intervention should be considered.– Early intervention is provided by ADE if it is determined that a school

district has experienced two or more indicators at a “nonmaterial” level—but without intervention could place the district in fiscal distress.

– Communication requirement is a two-way street:• By August 31 ADE notifies superintendent if it is aware of two or

more nonmaterial indicators having occurred in the prior school year.

• By August 31 the superintendent notifies ADE if he or she is aware of two or more nonmaterial indicators having occurred in the prior school year.

• ADE and superintendent to review all data and make a determination regarding the need for early intervention.

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• Fiscal Distress Early Intervention (Act 798 of 2009)-Continued– Within 30 days of determination ADE shall:

• Provides notice to the school district’s superintendent and board of directors that:

– Describes the nonmaterial indicators– Identifies the support available from ADE

– The board of directors shall place on the agenda for its next regularly scheduled meeting a discussion of the notice of nonmaterial indicators of fiscal distress.

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School Management Issues and Updates

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Frequent Audit Findings2008-2009

• Review of 237 Audits (85% of total)– 462 Audit Findings

• 201 findings related to failure to maintain time certification records for federally funded personnel.

• 185 findings related to internal control and lack of segregation of duties. (See Appendix C-1)

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Time Distribution• Federal law requires for all employees paid with federal funds. This

includes Child Nutrition and Special Education. • Time distribution records are also called PARs (personnel activity

reports).• “Time distribution” refers to the requirement that an employee paid

from federal funds “allocate” his time among the funding sources that pay his salary.

• Records must be maintained that reflect this distribution of effort, or time distribution records.

• Rules for Time Distribution are found in OMB Circular A-87.• Federal funds can pay for goods or services to the extent that there

is a benefit to the federal program.• This benefit must be documented.

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Time Distribution Records

Frequency:– Does the employee work on one federal program or multiple

programs?

Examples:

– An employee working 50% of time for Title I and 50% for district would have two programs.

– An employee working 50% for Title I and 50% for Title V would also have two programs.

– An employee working 100% of his time on Title I would have a single program.

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Time Distribution Records (Continued)

• Example:– Targeted Assisted school wants to set up a computer lab. An aide

works in the lab. The lab is used for Title I - 50% of the time. District uses the lab 50% of the time. Time Distribution Records would indicate the aide time for federal funds Title I – 50% of time and district funds - 50% of time.

– If appropriate time distribution records are maintained to document services, then Title I can pay for half the aide’s salary and benefits.

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Time Distribution Record Keeping

• Time distribution records are above and beyond the normal payroll records used by an organization to document time and attendance.

• If an employee works for one federal program, then time distribution records are simple.

Periodic, semi-annual certifications signed and dated by employee or supervisor with firsthand knowledge of the work performed are required – twice a year.

• Federally-funded employees working for multiple programs must keep monthly Personnel Activity Reports (PARs). Must be signed and dated by the employee, detailing the actual time spent engaged in the various programs.

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Time Distribution Record Keeping(Continued)

• Maintain PARS in central audit file by fiscal year.• Time Distribution rules apply to teachers paid with federal funds.

This includes Special Education.• Can I use lesson plans as the required time record?• Yes:

– If written schedules were followed.

– If notes are made after the fact to indicate completion of each activity.

– If lesson plans account for the total time compensated for.

– If lesson plans are prepared at least monthly and coincide with pay periods.

– If completed lesson plan is signed by the employee.

– If lesson plans are retained and maintained as time and attendance.

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Blanket PARS Certification

• If several employees work full time on the same program, then blanket semi-annual certification can be filed.

• The supervisor filing the blanket certification must have actual, firsthand knowledge of the work that the employees perform.

• Required once every six months.

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Sample Personnel Activity Reports/Time Certification Forms

Commissioner’s Memo FIN-10-041 dated 11/06/2009 includes Sample PAR and Time Certification forms.

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Solving Internal Control Audit Findings

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Internal Control

A process to:

• Create reliability of financial reporting

• Assess risk

• Control preventable loss

• Promote efficiency and effectiveness of operations

• Ensure compliance with applicable law/rules

• Promote public trust

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Purpose of Internal Control Policy

Internal control gives the school board and administration reasonable assurance that the district/charter will:•Achieve its goals•Operate effectively and efficiently•Provide accurate and reliable financial data•Operate in compliance with current federal and state laws and rules

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What are the Goals of Internal Control?

• Limit opportunity for theft or unauthorized use• Ensure proper and legal

expenditure/disbursement• Detect errors and fraud in a timely manner• Alert management of relevant required courses of

action• Provide accurate financial information• Provide documentation of proper accounting• Provides reasonable assurance that

misstatements, losses, noncompliance with laws/rules would be prevented

• Promote public trust and confidence

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Five Components of Internal Control

1. Control Environment

2. Risk Assessment

3. Control Activities

4. Information and Communication

5. Monitoring See Appendix D-1 for Discussion of Each Component

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Key Control Activity

• Segregation of Duties– Lack of segregation of duties is one of the

most frequent audit findings.– Idea is for individuals responsible for making

entries to the general ledger, to not have access to subsidiary records that support entries to the general ledger.

– Districts with one person accounting offices often have inadequate segregation of duties.

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Control Activities (Continued)

• Examples of Needed Duty Segregation:– Authorization and maintenance of approved

vendor files and entry of accounts payable.– Set up new employee records and issue

payroll checks.– Fixed asset physical inventory and maintain

fixed asset inventory in computer system.– Process checks or bank deposits and

reconcile bank account.

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Control Activities (Continued)

• Cost/Benefit analysis for having adequate segregation of duties:– The cost of adding personnel can be easily

measured.– The benefit of having adequate segregation of

duties is not as easily measured. – The superintendent and the board should

carefully assess the risk of having too much control in the hands of one person.

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How will you know Internal Controls are working?

1. Risks are appropriately identified and managed;2. Interaction of the various governance groups occurs;3. Significant financial, managerial, and operating information

is accurate, reliable, and timely;4. Employees’ conduct and actions are in compliance with

policies, applicable laws and regulations;5. Employees are trained to be responsible for notifying the

superintendent/director of irregular circumstances;6. Resources are acquired economically, used efficiently, and

adequately safeguarded;7. Quality and continuous improvement are encouraged;8. Significant regulatory issues are recognized and addressed

appropriately.

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Other School Management Issues and Updates

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Federal Contracts

Concerns:1. Davis-Bacon Act (DBA)2. Debarment (EDGAR, 34 CFR Part 85

covers debarment for contracts which include federal funds.)

Legislative Audit and the U. S. Department of Labor are monitoring school districts’ compliance on these issues.

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Davis-Bacon Act (DBA)

1. Applies to federal contracts of $2,000 or more.

2. Applies to federal contracts for construction, renovation, and/or repair. This would include painting, running conduit, and installing white boards.

3. Applies to the entire project if any part of the project is paid with federal funds.

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4. District is responsible for ensuring that contractors comply with DBA.

5. Monitoring Requirements include:* Requiring contractors to provide weekly copies of certified payroll with original signature and maintain for audit purposes.* Verifying rates in all classes of workers.

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* Conducting interviews to verify pay received and hours worked per week. (Prevailing rate is the rate of pay established in approved contract. Rate may change in market, but not for the approved contract.)

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6. Legislative Audit and the U. S. Department of Labor are monitoring to determine district compliance.

7. Required to keep all records and documentation for three (3) years under federal law.

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8. It is the Department of Labor’s interpretation that any school district, charter school, or educational cooperative that accepts funds for construction purposes assumes the role of the federal government becoming the “Contracting Officer” referred to in the wage law.

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Debarment

The Education Department General Administrative Regulations (EDGAR)34 CFR Part 85 contains the requirements for entities receiving contracts paid with federal funds. Part 85 covers all federal education programs including ARRA.

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Debarment

The Excluded Parties List System (EPLS) identifies parties excluded from receiving federal contracts.

EPLS includes the names and other valid information for all contractors debarred, suspended, excluded, or disqualified for procurement contracts.

This list can be found at https://www.epls.gov

Commissioners Memo FIN-10-047 found at http://arkedu.state.ar.us/commemos/customer.cgi contains the Arkansas Department of Education guidance on debarment.

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Debarment

Contractors debarred are excluded from receiving contracts, and districts shall not award contracts to these contractors.

After receiving bids or proposals, the district shall review the EPLS. Keep a printout from EPLS to document the district verified the contractor’s status and complied with the requirements.

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Debarment

Bids received from debarred contractors shall be entered on the list of bids and rejected.

Prior to the awarding of the contract, the district shall again review EPLS to ensure that no contract is made with a debarred contractor.

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Debarment

Debarment applies when federal contract is expected to equal or exceed $25,000.

Debarment shall not exceed three (3)

years.

Districts need to verify status before awarding a federal contract equal to or exceeding $25,000.

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Debarment

Three methods to comply with debarment requirements as per Legislative Audit:

1. Verify status of contractor by accessing the EPLS system. Print report to verify for audit.

2. Vendor could provide certification that they have not been debarred and are not currently on the excluded parties list.

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Debarment

3. District can make it a requirement of the contract that in order to contract with any vendor where the cost of the contract exceeds $25,000

that the contract must include a statement that the vendor is not currently on the federal government excluded parties list (EPLS).

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Homeless Expenditure Requirements

Districts and Charter Schools are required to serve Homeless children.

Districts are required to reserve Title I, Part A funds as “may be necessary” to serve Homeless students attending both Title I and non-Title I schools.

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Homeless Expenditure RequirementsServices provided to Homeless students must be comparable to services provided to students attending Title I schools.

Districts may provide Homeless students with educationally-related support services such as tutoring, an item of clothing to meet a school’s dress or uniform requirements, summer school, medical, dental, eyeglasses, immunization, and/or school supplies. (Must document not readily available from other sources.)

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Homeless Expenditure Requirements

Title I funds may not be used to pay for a Homeless student’s living expenses, driver’s license fees, extracurricular activities, or transportation to and from their school of origin.

Homeless students may receive services not offered to other Title I students.

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Homeless Student Definition:

Children who lack a fixed, regular, and adequate nighttime residence including:

• Students who are sharing housing with friends or relatives because of a loss or hardship.

• Families living in transitional housing that is designed to move people from homelessness to a housed state.

• Children who are abandoned in hospitals or are awaiting foster care.

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• Children living in hotels and motels that are designed for low-income residents.

• Students living in inadequate housing or housing not appropriate for habitation, such as campgrounds, cars, parks, public spaces, abandoned buildings, bus or train stations, or other inadequate facilities like garages or sheds.

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• Unaccompanied youth who have run away or been “pushed out” by parents and are living in shelters or with friends or relatives.

• Migrant students who qualify as homeless because of their living situation.

All Homeless students are eligible for Title I regardless of whether they are enrolled in a Title I school or are struggling academically.

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Required Set Aside Homeless Students

• Federal law requires that districts set aside funds to serve Homeless students.

• Statute does not define a formula for determining the appropriate amount to set aside.

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Required Set Aside Homeless Students

Suggested method: Obtain estimated count of Homeless students in district and multiply the number by the district’s Title I, Part A per pupil allocation. Set that amount aside in the ACSIP budget. Currently, Homeless is budgeted under “3351 Welfare.”

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Homeless Caution

Recent states monitoring has cited districts for under-identifying homeless students.

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Identifying Homeless Students

Use the comprehensive Homeless definitions in estimating Homeless students.

Do not pick out one or two of the Homeless definitions, use all seven!

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Homeless Resource

U. S. Department of Education Non-Regulatory Guidance for Education for Homeless Children and Youth Program can be found at the website below:

http://www.ed.gov/programs/homeless/guidance.doc

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ESEA MAINTENANCE OF EFFORTSection 1120A(a) of Title I

Section 9521 of ESEA34 CFR 299.5

• Maintenance of Effort (MOE) is required by federal law to ensure that federal funds are not used to replace state and local funds.

• Maintenance of Effort (MOE) is a district-level test that measures whether a district is providing a consistent level of local and state support from year to year.

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MAINTENANCE OF EFFORT

WAIVER

Districts may seek a waiver of MOE by demonstrating that the decline in MOE was the result of an exceptional or uncontrollable event or a drastic decline in financial resources.(Section 9521(c))

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The following ESEA programs are subject to the maintenance of effort requirement:

• Title I, Part A• Title I, Part A, ARRA• Title I, Part D, Neglected/Delinquent Programs• Title II, Part A Improving Teacher Quality• Title II, Part D Educational Technology • Title III, Part A English Language Learners• Title IV, Part B 21st Century Community Learning• Title VI, Part B, Subpart 2 Rural Education

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• The MOE provision requires that LEA’s maintain at least 90% of their level of expenditures for programs from state and local funds from one year to the next.

• The LEA cannot reduce the amount it spends for educational programs from state and local funds and just pay for those programs from federal funds.

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• A district may receive its full allocations of ESEA funds only if it has met the MOE requirement.

• If a district’s expenditures from state and local funds fall below the 90% threshold, the state must reduce the district’s ESEA allocations by the percentage below the minimum that expenditures fell short.

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What expenditures are included in the MOE calculation?

• State and local funds for education• Administration• Instruction• Attendance and Health Services• Transportation• Operation and Maintenance of Facilities• Fixed Charges• Net expenditures to cover deficits for food services and

student activities

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MOE calculations should not include:

• Community services• Capital outlay• Debt services• Expenses incurred as a result of a presidentially

declared disaster• Expenditures from funds provided by federal

government

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Maintenance of Effort

CAUTION:

• If a district is using ARRA funds as local funds for purposes of meeting the MOE provision, districts must remember that in FY 2011 when the ARRA funds expire, the district will have to maintain the MOE obligation from regular local and state funds.

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Maintenance of Effort

For the latest ADE guidance, see FIN-10-040 issued November 17, 2009.

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Special EducationMaintenance of Effort

Reminder Special Education has a 100% requirement on Maintenance of Effort.

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Exceptions to 100% requirement are:

• The voluntary departure, by retirement or otherwise, or departure for just cause, of special education personnel;

• A decrease in the enrollment of identified children with disabilities;

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• The termination of the obligation to provide special education program to a particular child with a disability that is an exceptionally costly program because the child has left the district, has reached the age at which the LEA obligation has ended, or the child no longer needs special education services; or

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• The termination of long-term costly expenditures in a special education project, such as construction.

For further special education requirements see IDEA Section 613.

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Current NSLA Funding

Current NSLA funding levels:

• 90% or above F/R = $1,488

• 89% to 70% F/R = $992

• 69% and below F/R = $496

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NSLA Transitional Funding

• Beginning in 2009-2010, if the percentage of eligible F/R students changes enough to result in a change in the level of NSLA funding, then NSLA Transitional Funding goes into effect.

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• The amount of NSLA funding per eligible F/R student shall be increased or decreased in each year of a three-year transition period by one-third of the difference between the NSLA funding per student for the current year and the amount of NSLA funding in the immediately preceding school year.

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Example:

For 10-11 the district has lost NSLA poverty students and a decrease is due—

Level 09-10 $l,488

Level 10-11 $ 992

$ 496 ÷ 3 = $165.33/year

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Example District Lost NSLA Poverty

• Year 1$1,488.00

- $ 165.33

$1,322.66 x # eligible F/R students

• Year 2$1,322.66

- $ 165.33


• Year 3$1,157.34

- $ 165.34

$ 992.00 x # eligible F/R students

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Example:

For a district that has increased in NSLA poverty students and an increase is due –

Level 09-10 $ 992

Level 10-11 $1,488

$ 496 ÷ 3 = $165.33/year

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Example District Increased NSLA Poverty

• Year 1 $ 992.00

+ $ 165.33


• Year 2 $1,157.33

+ $ 165.33


• Year 3 $1,322.66

+ $ 165.34


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Website Requirements

Current laws related to school district/ charter school website requirements

A.C.A. 6-11-129

A.C.A. 6-13-619

A.C.A. 6-13-620

A.C.A. 6-15-2202

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Website RequirementsAs per A.C.A. 6-13-620, district/charter school must publish and maintain a website populated with the most current information, including:

Board minutes

Budgets

Monthly expenses

Salary schedules for ALL employees

Annual audit

Annual financial report

Annual contract information

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A.C.A. 6-11-129 increased the information that must be on a district’s/charter’s website.•Minutes of regular and special meetings of the board•Current year budget within 30 days after submission to ADE•Monthly expenditures of the district/charter school•Financial reports indicating local and state revenues

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Website Requirements• School district/charter school balances

• Salary schedules for all employees, including extended contracts and supplemental pay schedules

• Current contract information for all current school employees

• Annual statistical/financial report for district/charter school

• Current annual budget

• Personnel policies

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A.C.A. 6-15-2202 increased information required by districts/charters to be posted on their website.•ACSIP School Improvement Plan•Uses of NSLA funding - current and previous year•Annual district/school report card•School Improvement status of each school in parent friendly language•Supplemental services available

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• District status on any type of distress• Distress plans• Parent Involvement Plan and Policy• Teacher qualifications for all schools

Compliance is required for accreditation. Data must be easily accessible and shall be the actual data for two previous school years.

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As per A.C.A. 6-15-2202, the Department of Education shall monitor annually for compliance with website requirements and shall report failures in compliance to the State Board of Education.

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A.C.A. 6-13-619 requires that school board meeting notice must be published on the website 10 days prior to meeting.

If a school board meeting date is changed, district/charter school must publish new meeting date, time, and location not less than 24 hours prior to rescheduled meeting.

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IT Security

• A.C.A. 6-11-128 requires ADE to formulate security policies.

• Commissioner’s Communication RT-09-010 outlined the security requirements established by ADE. (See Appendix E-1)

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IT Security

• ADE implemented security policies in cooperation with DIS and a security vendor, Coalfire.

• ADE established standards for districts/ charters to implement regarding information/data security, access procedures, continuity plans, and emergency procedures.

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IT Security

• Legislative Audit is auditing for security compliance. Currently, problem is identified as a supplemental finding when missing. Beginning in 2010-2011, any failure to comply will be a more serious finding.

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IT Security

Policy Statements1. District management and IT staff will plan,

deploy, and monitor IT security mechanisms, policies, procedures, and technologies necessary to prevent disclosure, modification or denial of sensitive information.

2. Physical access to computer facilities, data rooms, systems, networks and data will be limited to those authorized personnel who require access to perform assigned duties.

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IT Security

Policy Statements, continued

3. Network perimeter controls will be implemented to regulate traffic moving between trusted internal (District) resources and external, untrusted (internet) entities. All network transmission of sensitive data should enforce encryption where technologically feasible.

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IT Security

Policy Statements, continued4. System and application access will be granted

based upon the least amount of access to data and programs required by the user in accordance with a business need-to-have requirement.

5. Application development and maintenance for in-house developed student or financial applications will adhere to industry processes for segregating programs and deploying software only after appropriate testing and management approvals.

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IT Security

Policy Statements, continued6. Monitoring and responding to IT related

incidents will be designed to provide early notification of events and rapid response and recovery from internal or external network or system attacks.

7. To ensure continuous critical IT services, IT will develop a business continuity/disaster recovery plan appropriate for the size and complexity of District IT operations.

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IT Security

Policy Statements, cont’d8. Server and workstation protection software

will be deployed to identify and eradicate malicious software attacks such as viruses, spyware, and malware.

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IT Security• Audit checklist for IT practices is on the

Legislative Audit website. www.legaudit.state.ar.us

(Check Resources, then Publications, then IS Application Audit Checklist)

• Requirements include Location Security, Access, Disaster Plan, Network Security, Continuity Procedures

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Continuity Plan Requirements

Legislative Audit and DIS have established that a district/charter continuity plan must contain the following elements, which are FEMA standards:

•Essential daily processes for all divisions/ units at a school. Examples are Administration, Information Technology, Maintenance, Instructional Staff, Food Services

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• Order of Succession. Include the primary, secondary, and tertiary persons to take over a specific essential job if the person assigned to that position is no longer available.

• Delegation of Authority. List the essential management/leadership positions and the line of authority to be followed if needed.

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• Employee Communications must include all employee home, work, cell, and emergency contact numbers as well as alternate e-mail addresses.

• Current vendor contact Information. Suggest vendors from the last two years.

• Vital Records essential to conducting district/charter business. Examples are fiscal records, accounts payable, accounts receivable, APSCN, licensure

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• All members of the organization and the specific skills they are capable of performing if substitutes are required.

• Alternate locations to conduct essential processes. Back up sites, homes, restoration sites, offsite storage locations pre-identified with existing memorandums of understanding on file.

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• Dissolving the entity. Who will take responsibility for essential processes if no one is available to continue them. Example, one district elementary facility is totally destroyed and all elementary staff were killed.

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• Reconstitution procedures to return to normal operations. Supplies and equipment needed, vital records, software or access required, etc. that would be needed from day one (1) - prioritized to week four (4)

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Arkansas Continuity of Operations Program (ACOOP)

For further information see:

http://www.dis.arkansas.gov/security/Pages/ContinuityofOperationsProgram.aspx

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Title I Equitable ServicesPrivate Schools

Under the Child Benefit Theory Title I services:

• benefit the individual child, NOT the private school.• are provided by the LEA, NOT the private school.

(This theory was developed to comply with the Constitutional prohibition against Federal funding to private schools.)

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Title I Equitable ServicesPrivate Schools

• An LEA must only use Title I funds to meet the needs of the Title I participant.– An LEA cannot use any Title I funds to meet

the needs of the private school or the general needs of the private school children.

– Private schools may not operate schoolwide programs.

See Appendix F-1

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Special Needs Funding Rule

• The Special Needs Funding Rule includes the requirements for receiving and spending the following state categorical funds (See Appendix G-1)

– Professional Development (PD)– National School Lunch Act (NSLA)– Alternative Learning Environment (ALE)– English Language Learner (ELL)

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EthicsAct 1599 of 2001

A.C.A. 6-24-100 et.seq.

• Prohibit self-dealing in transactions between public educational entities and board members, administrators, or employees.

• See Commissioner’s Memo FIN-09-036, 12/05/2008. (See Appendix H-1)

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ProcurementA.C.A. 6-21-301 et.seq.

• Commissioner’s Memo FIN-09-071, 04/20/2009 (See Appendix I-1)

– Provides:• Definitions• Bid requirements pertaining to commodities• Bid protest procedure requirements to be

established by school board

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Procurement A.C.A. 6-21-301 et.seq.

• Commissioner’s Memo FIN-09-071, 04/20/2009– Commodities – All supplies, goods, materials,

equipment, machinery, facilities, personal property, and services, other than personal and professional services, purchased for or on behalf of the school district.

– Bids required if estimated purchase price equals or exceeds $10,000.

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• Exceptions to bids:– Emergency purchases– Single sources– Used equipment (school buses 2 yrs or older)– Commodities available only from federal

government and utility services

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• Exceptions to bids-Continued:– Professional services listed in 19-11-801(b)

(legal, financial advisory, architectural, engineering, construction management, land surveying professional consultant services)

– A school board may elect to not use competitive bidding for other professional services not listed in 19-11-801(b) with a two-thirds vote of the board.

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• State contracts have gone through the bid process and school districts may purchase those commodities without soliciting additional bids.

• Purchasing cooperatives that have complied with state procurement laws (and federal if district is using federal funds) may be utilized without soliciting additional bids.

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Budget Suggestions• Develop a written budget process and

timeline that is approved by the board.• Begin early March by using the Personnel

Budgeting module in APSCN.– Will calculate salaries and benefits of all personnel

employed as of the date of your pull from live files. Changes anticipated in salary schedules and positions can be included.

• Use the Budget Preparation module for remainder of budget process.

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Budget Suggestions• Begin in early May to project revenue for

following year. Most of the variables necessary to calculate revenue will be known by this time. (3QTR ADM, Assessments, Per-student funding rates, etc.)

• Accept budget requests from appropriate personnel for non-salary related expenditures March-May.

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Budget Suggestions• Schedule board workshop(s) during June

to explain revenue and expenditure projections and seek board input.

• Finalize budget during month of July. Compare projected revenue and expenditures to prior year actuals to check for reasonableness and completeness.

• Obtain school board approval in August, submit cycle 9 in September.

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Budget Suggestions

• Obtain school board approval in August.

• Submit budget to ADE in cycle 1 by September 30.

• Compare budget to actual at least monthly throughout the remainder of the fiscal year.

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Personnel PoliciesChanges May 1-June 30

Act 1180 of 2009, A.C.A. 6-17-204

• Personnel policies (including salary schedules) adopted by board between May 1 and June 30, that are not required to ensure compliance with state or federal law or regulation, shall be considered a part of personnel contracts July 1st if:

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Act 1180 of 2009, A.C.A. 6-17-204

• Notice of change mailed to affected employees by first class letter within five working days of final board action. Notice to include:– The new or modified policy– Modified policy must clearly show additions

underlined and deletions stricken

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Act 1180 of 2009, A.C.A. 6-17-204

• Affected employees will have 30 days from date of final board action to unilaterally rescind their contract.

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