A Microsoft Word version of this letter is available for download and PRINTING.
October 6, 2009
TO THE ADMINISTRATOR ADDRESSED:
SUBJECT: Monitoring of American Recovery and Reinvestment Act of 2009 (ARRA) Grant Requested Expenditure Reimbursements
In February of 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA; also known as the “stimulus bill”). This legislation provides for a high level of transparency, reporting, and accountability for recipients and subrecipients of ARRA funds. This letter is intended to provide all grantees receiving stimulus funding with a summary of the ways in which the Texas Education Agency’s (TEA) Division of Formula Funding, Reporting and Fiscal Accountability Unit will be monitoring ARRA grant expenditures. Please be prepared for staff to contact you regarding the monitoring activities described in this letter.
ARRA Grant Funds Made Available to Local Education Agencies (LEAs)
Aspects of ARRA Grants to be Monitored
LEAs Designated As High-Risk Grantees
Cash Management Practices
In considering each request for above-threshold payment requests, TEA asks the grantee to submit documentation that lists cumulative expenditures by the corresponding class/object code. Above-threshold payments are made in ER only after TEA’s receipt and approval of the requested documentation. If TEA does not receive documentation supporting the above-threshold payment within three business days, ER purges the request for payment.
Special Note for ARRA IDEA, Part B
Timely Expenditure of Grant Funds
TEA will generate a monthly report of LEA expenditure reimbursements and post it on the Stimulus section of the TEA web site at http://www.tea.state.tx.us/arrastimulus/reimbursement/. LEAs that have not drawn down funds for a particular grant or that exhibit a low rate of expenditure reimbursement (i.e., below 5% of a grant award per month) for ARRA grants will receive an e-mail notification with a link to the posted report. Because low rates of spending in the early months of an ARRA grant can be aligned with the planned use of funds, low spending does not indicate a compliance issue. Rather, the “low” designation is a reminder to administrators to submit expenditure reimbursements promptly and to carefully monitor the implementation of planned budgets.
Random Review of Grant Expenditures
General ledgers must comply with Financial Accounting and Reporting (FAR), which establishes the requirements for proper budgeting, financial accounting, and reporting systems. FAR is structured to comply with federal financial management standards which require that grant funds be accounted for according to a fund code structure. ESCs, charter schools and school districts are required to use a 15-digit fund code for their general ledger. The codes identify the source of funds and the use of funds. A general ledger with 15-digit fund codes documents the use of funds for allowable purposes and demonstrates compliance with FAR. (FAR can be accessed at http://www.tea.state.tx.us/index4.aspx?id=1222.)
No action is currently required from LEAs on the monitoring procedures outlined here; however, administrators are asked to watch for and be responsive to communications from the Division of Formula Funding, Reporting and Fiscal Accountability Unit. Additionally, other TEA divisions are conducting ARRA-related monitoring activities, such as quarterly USDE reporting and onsite financial audits. Together, we can ensure that Texas schools make the most of this unique opportunity to jump-start school reform and improvement efforts while also saving and creating jobs and stimulating the economy. Additional information regarding jobs created/retained can be accessed at http://ritter.tea.state.tx.us/taa/eduqualstan092509.html.
For more information, contact the Division of Formula Funding at (512) 463-8525.
Nora Ibáñez Hancock, Ed.D.
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