A Microsoft Word version of this letter is available for download and PRINTING.
April 25, 2011
TO THE ADMINISTRATOR ADDRESSED:
SUBJECT: Desk Monitoring of Federal Grant Expenditures – TEA Divisions of Formula Funding and Discretionary Grants
This letter is intended to provide all grantees receiving federal formula and discretionary grants from the Texas Education Agency (TEA) with a summary of desk monitoring activities to be conducted in the coming months and years by the divisions of Formula Funding and Discretionary Grants in the Office for Planning, Grants and Evaluation (OPGE).
Grantees are required to monitor the activities of local educational agencies (LEAs) and other subgrantees to ensure that federal grant awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements. The authority for these activities is given by the Office of Management and Budget (OMB) Circular A-133, Subpart D, §___.400(d)(3) and Title 34 of the Code of Federal Regulations (CFR) §80.40(a). Similarly, 34 CFR §76.770 requires states to perform administrative responsibilities necessary to ensure compliance with applicable statutes and regulations.
To address these requirements, various divisions in TEA, including the Division of Financial Audits, NCLB Program Coordination, IDEA Coordination, Performance-Based Monitoring, Program Monitoring and Interventions, the Fiscal Accountability and Federal Reporting Unit in OPGE, and the divisions of Formula Funding and Discretionary Grants currently conduct a variety of monitoring activities, including desk monitoring, as part of TEA’s comprehensive monitoring process.
The monitoring activities described in this letter expand upon the existing desk monitoring activities in the divisions of Formula Funding and Discretionary Grants. Because several TEA divisions already conduct various audits, investigations, reviews, general monitoring, and surveys, the agency is coordinating efforts to avoid grantees being monitored by more than one division where possible.
Exceptions to Monitoring by Discretionary Grants and Formula Funding
Federal grants awarded under the American Recovery and Reinvestment Act (ARRA) of 2009, including the ARRA Title XIV State Fiscal Stabilization Fund (SFSF), will not be included in this formula and discretionary grants desk monitoring process, as they are already monitored under a separate process.
Aspects of Grants to be Monitored
Grantees that are selected for formula and discretionary grants desk monitoring can expect staff to monitor the following:
1. That the grantee obligated, expended, and used grant funds in accordance with:
a. The approved application
b. The purpose authorized by law for those funds
c. The federal cost principles, including maintaining time and effort records in accordance with the applicable federal cost principles
d. The period of availability (i.e., encumbrances/obligations and receipt of goods and services occurred during the grant period and in time to substantially benefit the grant period)
e. The fiscal requirements applicable to the funds, including cash management requirements
2. That grant expenditures are properly supported by the grantee’s source documentation and costs are allocable to the grant program
3. That expenditures reported in the automated Expenditure Reporting (ER) system correspond to expenditures recorded in the general ledger and payroll journal and to the budget in the approved grant application
4. That the grantee complied with the mandatory account code structure and accounting requirements in the Financial Accounting and Reporting (FAR) module of the Financial Accountability System Resource Guide (FASRG), if applicable. (School districts, regional education service centers [ESCs], and open-enrollment charter schools are required to comply with FAR. All other applicants are required to comply with generally accepted accounting principles [GAAP] and fund accounting in accordance with 34 CFR §74.21, Standards for Financial Management Systems.)
No action is currently required from grantees regarding this formula and discretionary grants desk monitoring process, but administrators are asked to expect and be responsive to communications from these divisions. Through a comprehensive monitoring process, we can improve grant management efforts and assist Texas grantees in avoiding audit exceptions and the return of valuable federal dollars to the federal government.
Additional information regarding this formula and discretionary grants desk monitoring process can be found on the agency’s website at http://www.tea.state.tx.us/index4.aspx?id=2147499937. For more information, please contact Dr. Earin Martin, Chief Grants Administrator, in the Office for Planning, Grants and Evaluation at email@example.com.
Nora Ibáñez Hancock, EdD
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