The Auditors are Coming(Part I)

Prepare for Federal Program Fiscal

Monitoring VisitsJuly 26, 2006

Overall Objectives: Assess internal controls for Federal

Programs. Verify the completeness, accuracy,

validity, and allowability of financial information for budgeted costs claimed and reimbursed on Federal Programs

Fiscal Monitoring Selection Process

Subgrantee selected from risk based audit plan • Every subrecipient will be audited at

least once every three years (audit cycle)

Subrecipients with substantial audit findings audited more frequently.

Additional fiscal years to be audited may be added during audit fieldwork

•Business Official contacted to schedule fieldwork including

Dates of fieldwork Fiscal year(s) to be monitored Federal Programs to be examined Documentation required for review

•Confirmation letter with documentation list mailed to Business Official

Scheduling

Subgrantee Preparation

Business Official should coordinate plans for the fiscal monitoring with personnel involved • Business office personnel

• Federal Program personnel

• Human Resource personnel

• School personnel

Subgrantee Personnel

•Business Office Personnel Business Manager Accountants

• Payroll • Accounts Payable• Fixed Assets

•Federal Program Personnel Directors Managers

Subgrantee Personnel

•Human Resources Personnel Director Analysts

•School Personnel Principals School Business Managers School Fixed Asset Managers Custodians

Required Documentation

List provided with confirmation letter

Should be available for review at the beginning of fieldwork

Should be organized Contact LDOE staff with any

questions about required documentation

Required Documentation

Budgets including all revisions Requests for Funds Project Completion Reports Travel Policy Fixed Asset Policy Salary Schedule Chart of Accounts (including fund

numbers) Documentation to substantiate costs

discussed in each Object Code below

Internal Control Examine internal controls for

current fiscal year Complete questionnaire with Business

Official Ensure that internal controls are

uniformly applied to all programs Tests of specific internal controls will

be performed during fieldwork

LAUGH Object Codes

• Salaries (Object Code 100) and Related Benefits (Object Code 200)

• Purchased Professional and Technical Services (Object Code 300)

• Purchased Property Services (Object Code 400)

Specific Issues by Object Code

• Other Purchased Services (Object Code 500)

• Supplies (Object Code 600)• Property (Object Code 700)• Other Objects (Object Code 800)• Indirect Cost

Salaries (Object Code 100)

Related Benefits (Object Code 200)

Documentation• Staffing list for each federal program by

employee

• Personnel files for each federal employee

• Payroll for each federal program by employee

• Office of Management & Budget (OMB) A-87 Cost Certification form for all federal employees

Staffing Lists Should include

• Program name & CFDA number

• Employee name and identification number

• Employee position

• Beginning and ending staffing dates

• Work location of employee

Personnel Files

Should include• Employee name and identificaton

number

• Employee position

• Pay rate and benefits for each employee

• Certification & degree level (if applicable)

• Years of service Do not include evaluations or other

personnel actions

Payroll

Should include• Program name and fund number

• Employee name and identification number

• Employee position

• Pay and benefits for each period in fiscal year by type of pay (e.g. regular pay, stipend pay, insurance, retirement)

• Work location of employee

OMB A-87 Cost Certification Forms

Should include•Employee name & identification number•Position and Work location(s)•Program & CFDA number•Time period •Signature of employee and/or supervisor•Date completed

Required completion period•Semi-annual or monthly

Purchased Professional and Technical Services (Object

Code 300)

Documentation•Purchase requisitions for services•Purchase order for services•Contracts for services•Vendor invoice•Subgrantee cancelled check

Contracts may substitute for a purchase order for expenditures in this Object Code

Purchased Property Services (Object Code

400) Documentation

•Purchase requisitions for property services

•Purchase order for property services•Contracts for property services•Vendor invoice•Subgrantee cancelled check

Contracts may substitute for a purchase order for expenditures in this Object Code

Other Purchased Services

(Object Code 500) Documentation

•Purchase requisitions for other purchased services

•Purchase order for other purchased services

•Subgrantee’s Travel Policy & supporting documentation for employee travel

•Vendor invoice

•Subgrantee cancelled check

Employee Travel Reimbursement

Employee Expense Accounts•Follow the Travel Policy that covers

the period being audited Board adopted policy If no board adopted policy, then follow

State of Louisiana PPM # 49 All employee travel costs being

reimbursed must have documentation to substantiate them (e.g. agendas, sign in sheets, name tags)

Supplies (Object Code 600)

Documentation•Purchase requisitions for supplies•Purchase order for supplies•Vendor invoice•Subgrantee cancelled check

Food purchases and employee reimbursements need documentation for the corresponding activity

Late fees, interest service charges, finance charges, taxes, and alcohol are not allowable

Property (Object Code 700)

Documentation•Purchase requisitions for property

•Purchase order for property

•Vendor invoice

•Subgrantee cancelled check

•Fixed asset policy

•Fixed asset list

Property (Object Code 700)

Fixed Asset Policy•Value of fixed asset

•Acquisition procedures & forms

•Transfer procedures & forms

•Disposal procedures & forms

Property (Object Code 700)

Fixed Asset List• Maintained by Business Office (for all Federal and

state programs)• Updated on a regular basis• Reconciled to purchases at least once every two

years• Items on Fixed Asset List reported in total (e.g.

computer monitor, CPU, keypad and mouse) when purchased as a unit

• Cost should follow most restrictive of Federal, State or subgrantee definition

Federal (Code of Federal Regulations)- $5,000.00 State (LAUGH) - $1,000.00 Subgrantee (Fixed Asset Policy) – if lower than state

Property (Object Code 700)

Fixed Asset List should include•Fixed asset description

•Serial number

•Tag number

•Date purchased

•Acquisition cost

•Location

•Fund that purchased fixed asset

•Disposition date (if applicable)

Indirect Cost Approved indirect cost rate applied

to object codes 100 thru 600 Approved indirect cost rate

restricted on some programs (e.g. Title IV)

Not allowed on some federal programs (e.g. Vocational Education)

Other Objects (Object Code 800)

Catchall for costs that are not reported under any other Object Code

Flex Funds for IDEA program reported here •Supporting documentation is the same as

if reported in the normal Object Code for these costs

•Report these costs only in this Object Code or one of the other Object Codes, not both

Issues for all Object Codes

Costs should be charged to Object Codes based on the Louisiana Accounting and Uniform Governmental Handbook (LAUGH)

Costs in object codes 300 thru 700 and 800 must be paid before being included on the Request for Funds

Salaries (Object Code 100) and Related Benefits (Object Code 200) costs may be claimed for reimbursement one month in advance

Issues for all Object Codes

Subgrantee personnel (fiscal and program) should review Requests for Funds before submission

Project Completion Reports should be completed and submitted for all closed programs

Adjustments should be made on subsequent Requests for Funds based on actual amounts

Common Audit Findings Costs claimed for the wrong fiscal year Costs claimed for reimbursement with

insufficient or no supporting documentation

Incomplete or no A-87 Cost Certification Reports for salaries claimed for reimbursement

Incomplete or no fixed asset list Reporting errors (e.g. costs claimed in

incorrect object codes)

Useful Internet Links- Louisiana Department of Education

(LAUGH)•http://www.doe.state.la.us

Office of Management & Budget (Circulars)•http://www.whitehouse.gov/omb/circulars/

U.S. Department of Education (EDGAR)•http://www.gpoaccess.gov/cfr/index.html

Contact Information

Greg Becnel, Audit Supervisor, LDOE Email Greg.Becnel@la.gov

Judy Hurry, Audit Manager, LDOE Email Judy.Hurry@la.gov

P.O. Box 940641201 N. Third St. Ste. 5-130Baton Rouge, Louisiana 70804-9064Telephone: (225) 342-8848Toll Free: 1-(877)-342-453-2721Fax: (225) 342-3523