2011 Purchasing AcademyNovember 3, 2011

TASBO

Allowable Expenses Using Federal and State Grants

Reference MaterialsFederal Resources:

OMB A-87 Cost PrinciplesOMB A-133 Compliance Requirements

TEA Resources: FASRG Purchasing ModuleFederal Cost Principles Side-by-Side, A87, A122 & A21Guidelines Related to Specific Costs (Updated 9-27-

2011)Travel Guidelines for In-State and Out-of-StateAppendix 5 – SAS#NCLB – Revised March 2011 –

Encumbrances and Expenditures

Resources located under Grant Management Resources

General Allowable Costs1st Test: Must be reasonable and necessaryMeet needs identified in the campus’

comprehensive needs assessment processDistrict or Campus Improvement Plans

Must be included in Grant application [either in budgeted dollars or specific approval if required]

Must be in agreement with grant purposeObligation meets federal rules for timing of

eligible expenditureAllowable Costs Principles OMB Circular A-87OMB Circular A-133 Compliance

Period of Funds AvailabilityAll encumbrances and expenditures of approved

funds shall occur on or after the effective submission date of the grant application or amendment (date submitted to TEA, or first day grant funds are available for obligation, whichever is later).

Refer to grant application for period of availability:Start and stop dates of grantDate application or amendment was submitted to TEADate NOGA (Notice of Grant Award) was approved by

TEALocal decision – will funds be made available prior to

NOGA?

General Provisions - Obligations

If the obligation is for: The Obligation is made:

Acquisition of real and personal property

On the date the grantee makes a binding written commitment to acquire the property

Personal services by an employee of the grantee

When the services are performed

Personal services by a contractor who is not an employee of the grantee

On the date on which the grantee makes a binding written commitment to obtain services

Performance of work other than personal services

On the date on which the grantee makes a binding written commitment to obtain the work

Public utility services When the grantee receives the services

Travel When travel is taken

Rental of real or personal property

When the grantee uses the property

Liquidation of ObligationsLiquidation [recording of expenditure] of all

obligations must occur before the final expenditure report is due, typically 30 days after the end of a grant period.All invoices must be paid or be in “accounts

payable” All goods must be received

6200 Professional and Contracted Services

AllowableProfessional Services

Prior specific approval from TEAProvided by non-employeesIf district does not have the expertise

Printing servicesUtilities

Allowable for grant activities conducted before or after school, weekends, or during the summer

6200 Non-AllowableLegal fees that are not grant specificRegular audit feesMotivational speakers or those speaking on

general education issuesStaff development for contracted consultants

paid as contracted servicesCell phones/PDAs for personal use Costs associated with ceremonies, banquets, or

celebrationsHonorariums (must say “fees”)

6300 Supplies

6300 AllowableInstructional supplies – targeted student

population or supplementary materialsSoftware – document alignment to

identified need of the campus and core reform

Subscriptionsrelated to the grant program Must be in the name of the grantee

organization and not in the name of an individual

6300 UnallowableRoutine classroom supplies – must be

supplementalSales taxGifts

6400 Other Operating Costs

6400 AllowableMembership in business, technical, and

professional organizations related to the grant programMembership must be in the name of the grantee

organization and not in the name of an individualMembership in civic and community

organizations are allowable with prior specific approval from TEA. (Ed-Flex programs do not require prior approval)

Food - Light LunchCloistered in an all-day meeting (at least 6

hours)Document that it was impractical for participants

to obtain lunch on their own (isolation or distance to restaurants)

Document that their attendance was essentialAgenda should contain topics discussed, time

allocated to each topic, including the lunch period

List of attendeesNominal cost per participant

Food – Working LunchLight mealDefinition: an activity in which staff or participants

are engaged in exercises or activities during the normal meal time as stated on an agenda and in which no other opportunity for a meal will be provided

Must maintain an agenda that clearly identifies the exercise or activity that the participants were engaged in and should retain a representative sample of the work product, if any, that was generated as a result of the working session

List of attendeesNominal cost per participant

Food Costs for Parents and/or Students

Nutritional snacks for students in extended day (after-school) programs

Nutritional snacks for children in child care while parents are participating in grant activities

Food necessary to conduct nutrition education programs for parents

Parent involvement activities where refreshments are necessary to encourage participation or attendance by parents, such as in low-income areas, and thus meet program objectives

Must be reasonable, necessary, and related to the instructional program

Documentation: Copy of meeting agenda

TravelNew rules September 1, 2009NEW RATE July 1, 2011

55.5 centshttp://ritter.tea.state.tx.us/taa/

discgrant070611.htmlNo more Texas Mileage GuideMileage calculated

Odometer reading (point-to-point)Electronic mapping

Must be printed and attached to travel voucher

TravelReimbursement lesser of state rates or local

policyFederal Rate Schedule used for reimbursement

of in-state meals and lodgingPrint at time of reservationTravel Guidelines

http://www.gsa.gov/portal/category/100120If not listed, $85/night lodging and $36/day

meals

TravelNo overnight stay

If more than 6 consecutive hours, meals may be reimbursed

However………..IRS consequences!First and Last Day of Travel rates calculated

at 75%http://www.gsa.gov/portal/content/101518

Travel Procedures Travel documentation must include:

Name of the individual claiming travel reimbursementDestination and purpose of the trip, including how it was necessary to

accomplish the objectives of the grant projectDates of travelActual mileage (not to exceed reimbursement at the maximum

allowable rate)Actual amount expended on lodging per day, with a receipt

attached (may not exceed the maximum allowable)Actual amount expended on meals per day (may not exceed the

maximum allowable; tips and gratuities are not reimbursable)Actual amount expended on public transportation, such as taxis and

shuttlesActual amount expended on a rental car, with a receipt attached

and justification for why a rental car was necessary and how it was more cost effective than alternate transportation; receipts for any gasoline purchased for the rental car must be attached (mileage is not reimbursed for a rental car—only the cost for gasoline is reimbursed)

Actual amount expended on incidentals, such as hotel taxes, copying of materials, and other costs associated with the travel

Total amount reimbursed to the employee

RegistrationsConference registration – attach conference

documentation to paymentRegistration form should reflect the total

registration costsUse caution with optional events that may be

perceived as “entertainment”

AwardsMinimal cost certificates, plaques, ribbons,

small trophies, or instructionally-related items to be used in the classroom such as pens and pencils are acceptable incentives for participation in program activities or awards for recognition

The following items may be donated by others but may not be purchased with grant funds:Gifts or items that appear to be giftsPromotional items such as t-shirts, caps, tote

bags, imprinted pens and key chains.Door prizes, movie tickets, gift certificates, etc.Food or any kind (snacks, beverages, etc)

Field TripsMust be educationalMust be instructional activities that involve students in

learning experiences difficult to duplicate in a classroom situation

Must support Texas Essential Knowledge and Skills (TEKS)

Must be reasonable in costMust be necessary to accomplish the objectives of the

grant program Must appear as a part of the teacher’s lesson plans,

which should include activities that prepare students for the trip and follow-up activities that allow students to summarize, apply, and evaluate what they learned from the trip

Documentation: May need a form to collect the data

Field Trip ProceduresDocumentation of the field trip must be maintained for

audit purposes and must provide clear evidence of how the expense ties back to an instructional objective. Documentation should include the following: Destination of each field trip Costs associated with each field trip Objectives to be accomplished from conducting the field

trip Teacher’s lesson plan and follow-up activities For the supplement-not-supplant requirement,

documentation must demonstrate the supplementary nature of the field trip

Attach this to the purchase order/payment

6400 UnallowableTravel allowanceTips and gratuitiesTravel advances without proper documentationForeign travel if not approved by TEAAlcoholic beveragesEntertainment costsMemberships in social or civic organizations

involved in lobbyingProfessional liability insurance

Unallowable Food CostsFull meals for parents or students Refreshments of any kind, including beverages, breaks,

and snack foods, for staff meetings or staff training Refreshments or meals at an awards banquet or function Food costs not necessary to accomplish the objectives of

the grant program Any event in which a “guest speaker” or other individual

conducts a presentation Breakfast “TEA reserves the right to restrict a grantee from

expending any funds on food costs or to disallow expenditures on food costs should the TEA determine that the grantee expended grant funds on food costs that are not reasonable or necessary to meet the intent and objectives of the grant. “

6600 Capital Outlay

6600 AllowableEquipment as approved on grant applicationRefer to district’s capitalization

policyConstruction, remodeling, renovationMust be specifically authorized in the

authorizing program statute and specifically approved by TEA in the applicable grant application

Other Considerations – Credit CardsTEA will reimburse costs charged to the

grant using corporate credit cards only when the accounting ledger reflects each individual charge on the credit card statement by the following:Individual vendor name (not just credit card

company)Grant funding source/codeExpense categoryActual date of charge

Procedures Manual

Manual Should Include: Purchasing Overview

Bid Laws and ProcessVendor Requirements – Conflict of Interest, Felony

Conviction, Insurance Requisitions – Approval Path Purchase Orders – Approval Path Contract Approval and Management Payments to Vendors (Accounts Payable Functions) Purchasing with Credit Cards or Procurement Cards

Security of cards, authorized users, authorized purchases, monitoring charges

Travel Expenditures Fixed Assets/Equipment Inventory Tracking Miscellaneous Purchases: Internet, Memberships, Sales Tax,

Incentives/Awards, Petty Cash

Procedures – Overview of A-87Procedures exhibit includes questions such as:

Is competitive bidding required for all major procurement?

Do the subrecipient’s policies incorporate procedures for contract monitoring to ensure goods and services are received/performed?

Do the subrecipient’s policies and procedures require that any missing items, damaged or otherwise not received or rejected goods were properly identified?

Did the subrecipient policies and procedures describe the process that subrecipient personnel were required to follow for the expenditure of grant funds through corporate accounts and/or revolving lines of credit?

Federal and State Monitoring Visits

Areas reviewed in Federal monitoring visits include PlanningDistrict and campus improvement plansAllowable ChargesPeriod of AvailabilityCash managementInternal controlsSupplement Not Supplant

Onsite Review – Request for Documents

An electronic copy of:Locally developed and approved accounting policy

and procedures manual implemented during the school year.

Policy Manual - identify the specific policies and procedures directly related to the administration of the grant.

Clearly identify general accounting and administrative policies and procedures pertaining to:contracts for professional and other services, purchasing, time and effort, and travel and other employee expense reimbursements.

Other Best PracticesDevelop Purchasing Flowchart for purchases with

federal and state grant fundsDoes the grant administrator approve all purchases?Who is responsible for grant program compliance?

Develop resources for campuses and departments to facilitate compliance with allowable costsForms to collect dataProcedural manuals“Do Not Buy” lists – Sample at San Antonio ISD

WebsiteTraining….training…training on an annual basis

Wrap-up:Q & A’s

Presenter Contact Presenter Contact InformationInformation

Rebecca EstradaRebecca EstradaExecutive Director of FinanceExecutive Director of FinanceLackland ISDLackland ISD2460 Kenly Ave., Bldg. #82652460 Kenly Ave., Bldg. #8265Lackland Air Force BaseLackland Air Force BaseSan Antonio, Texas 78236San Antonio, Texas 78236

(210) 357 5005(210) 357 5005

estrada.r@lacklandisd.netestrada.r@lacklandisd.net