Adult Education Administrator's Manual, June 2005: Accountability, Budgeting

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Adult Education Administrator's Manual

Revised August 2007

Accountability

Budgeting

1. Coordination with the Business/Accounting Office and Financial Management

To ensure compliance with required accounting procedures, all applicants must consult with their business office prior to submitting the application regarding the assignment of budgeted items to the proper class-object codes. Advance coordination with the business office will expedite negotiation and processing of the application.

The applicant must maintain a financial management system that provides for accurate, current, and complete disclosure of the financial results of each grant project. The financial management system records must adequately identify the source and application of funds and must contain information pertaining to grant awards, authorizations, obligations, unobligated balances, assets, outlays (i.e., expenditures), income and interest.

Budgeted expenditures will be shown by class-object code. School districts, open enrollment charter schools, and Education Service Centers (ESCs) are required to maintain records on all expenditures by budget function, class-object code, and year of entitlement (appropriation), in accordance with the provisions of the Financial Accountability System Resource Guide. Detail of the form BS6000 Budget Summary will be shown on budget support forms BS6100, BS6200, BS6300, BS6400, BS6500, and BS6600 and BS6629, as appropriate. Do not enter zeros (.00) or cents (.37) in the budget figures. Use whole dollar amounts only (e.g. $1,970).

Fiscal control and accounting procedures must permit the tracking of funds to a level of expenditure adequate to establish that funds have been used in accordance with the approved grant application. The applicant must maintain effective control over and accountability for all funds, property, and other assets.

2. Use of Funds/ Reasonable and Necessary Costs

Funds requested must only be for those items that are reasonable and necessary for accomplishing the objectives of the program and for implementing activities as described in the application.

A. Reasonable and Necessary

Reasonable costs are consistent with prudent business practice and comparable to current market value. Necessary costs are essential to accomplish the objectives of the project. All items requested must be allowable expenditures under the authorizing program statutes, regulations, and rules. In general, the budget forms must evidence that:

Project costs are reasonable in relation to expected outcomes
The amount requested might realistically be expected to have an impact on the stated needs
The expected outcomes are sufficient to justify the amounts requested
The program will identify and coordinate funding from several sources
All expenditures are pertinent to and appropriate for the objectives and activities stated

B. Allowable

To be allowable, costs must meet the following criteria:

Be reasonable for the performance of the grant and be allocable under the applicable cost principles;
Conform to limitations or exclusions set forth in applicable cost principles or the grant agreement as to types or amount of costs;
Be consistent with policies and procedures that apply uniformly to federally funded activities and activities funded from other sources;
Be accorded consistent treatment among all grant programs, regardless of funding source;
Be determined in accordance with generally accepted accounting principles (GAAP);
If federal, not be included as cost or used to meet cost-sharing or matching requirements of any other federally-funded program in the current or a prior period; and
Not be used for lease/purchases (i.e., debt service). Refer to Part 2: Program Guidelines for additional guidance pertaining to allowable and unallowable costs.

C. Reasonable

Determine the reasonableness of a cost by considering whether:

The cost is of a type generally recognized as ordinary and necessary for operation of the organization or grant performance;
Restrictions or requirements are imposed for generally accepted sound business practices, arms length bargaining, federal /state laws and regulations, grant award terms and conditions;
Individuals acted with prudence in the circumstances of responsibility to the organization, its members, employees, clients, the public, and federal government; and
There are significant deviations from established practices of the organization which may unjustifiably increase grant costs.

D. Allocable Costs

A cost is allocable to a particular grant in accordance with the relative benefits received and if it is treated consistently with other costs incurred for the same purposes in like circumstances and if it:

Is incurred specifically for the grant;
Benefits both the grant and other work and can be distributed in reasonable proportion to the benefits received; and if
Any cost allocable to a particular grant or other cost objective may not be shifted to other federal awards to overcome funding deficiencies, or to avoid restrictions imposed by law or by the terms of the grant award.

Consult the form and instructions for CS7000 – Provisions, Assurances, and Certifications to determine the applicable cost principles and with the document General Guidelines Applicable To All Cost Principles to determine allowability of certain costs. Always consult the original applicable circular pertaining to cost principles for the full text. OMB Cost Principle Circulars include:

A-87 State, Local, and Indian Tribal Governments

http://www.whitehouse.gov/omb/circulars/a087/a087-all.html

A-21 Educational Institutions, including Institutions of Higher Education

http://www.whitehouse.gov/omb/circulars/a021/a021.html

A-122 Nonprofit Agencies

http://www.whitehouse.gov/omb/circulars/a122/a122.html

3. Obligation of Funds

All encumbrances, expenditures, and obligations of funds for this program must occur on or after the effective date of this application and within the grant beginning and ending dates listed on the Notice of Grant Award (NOGA). All goods must be received and all services must be rendered between the beginning and ending dates of the project as specified in the “Project Period” section in Application Guidelines – Part 2: Program Guidelines. An encumbrance, accounts payable, and an expenditure, as with all other project accounting terms, will be as defined in the Financial Accountability System Resource Guide.

Funds granted through this project must be used for those purposes described in the Program Purpose, Goals, and Description, and Project Requirements sections of Part 2 of this application. Applicants may elect to use additional resources and other sources of financial support to help maximize the effectiveness of the project goals and objectives.

The applicant must commence and perform project activities according to the time lines described in the application. Failure to do so may result in reduction and reallocation of funds.

Project funding will be based on appropriation by the authorized governmental body and on general budget approval by the commissioner of education, the state legislature, or U. S. Congress, as applicable.

4. Expenditure Reports

The grantee agrees to submit expenditure reports by class-object code through the paper-based system or through the eGrants system when operational. Beginning September 1, 2005, grantees that have applications in eGrants will migrate toward reporting expenditures by class-object code in eGrants using the TEASE eGrants password assigned to the individual. Until this reporting is available in eGrants, grantees will report expenditures by class-object code through the paper-based system and will report cumulative expenditures through Web ER.

Once expenditure reporting through eGrants is operational, grantees may report expenditures by class-object code at any time to receive payment, as long as the request for cash does not exceed three days’ cash needs pursuant to cash management requirements (see section on “Cash Management” in these Guidelines). Grantees must record expenditures at least semiannually.

When reporting expenditures by class-object code in eGrants, the system will automatically deny any expenditure report where the grantee is claiming expenditures in a class-object code not budgeted in the approved application; when the amount claimed is in a class-object code that exceeds the allowable budget variation for that object/code; or when the total amount exceeds the total amount of the grant.

Semi-annual and other interim reports are due to Texas Education Agency (TEA) within 15 days after the end of each reporting period. Grantees are required to adhere to the expenditure report due dates, including submission of expenditure reports showing $0.00 expended, if that is the case for that reporting period. The final expenditure report is due within 30 days after the ending date of the grant (refer to Application Guidelines – Part 2: Program Guidelines). *PDF file. Download Adobe® Acrobat® Reader. Final payment is contingent upon receipt of the eGrants expenditure report and all required programmatic reports/documents. The TEA reserves the right to withhold a portion of the final payment pending receipt of the required reports.

Grantees may enter cumulative expenditures, not to exceed 90% of the total grant award amount, into the Web ER system (or eGrants when operational) up to 30 days following the ending date of the grant.

The total project cumulative costs of the grant as provided on the eGrants final expenditure report should equal and in no case may exceed the total cumulative expenditures recorded in the financial accounting records of the grantee organization.

If the final expenditure report indicates a refund is due to Texas Education Agency, the grantee must submit a refund check to:

Texas Education Agency - MSC
P. O. Box 13717
Austin, TX 78711-3717

Write the name of the grant program and the NOGA ID/project number on the refund check.

Revised Final Expenditure Reports:
In the event the grantee finds it necessary to submit a revised final expenditure report, any revised Final Expenditure Report claiming expenditures greater than the amount initially reported in the final report must be received by TEA within 30 days of the due date of the Final Expenditure Report (i.e., within 60 days of the ending date of the grant). Any such revised Final Expenditure Report received after that date, where the grantee is claiming expenditures greater than the amount initially reported in the final report, will not be approved, processed, or paid by TEA.

Any revised Final Expenditure Reports claiming expenditures less than the amount initially reported in the final report must be submitted as soon as it is determined expenditures were less than the amount originally reported. Refunds will be accepted at any time (i.e., access to Web ER (or eGrants when operational) is available to record refunds by reducing cumulative expenditures). A refund check must accompany the revised Final Expenditure Report.

If cost share is required, the grantee must report on the final expenditure report the total cost share expended. Grantee will be reimbursed only for that portion/percentage of grant funds which meet cost share requirements.

5. Requesting Payments Through eGrants

Grantees have access to Web ER/eGrants to record additional expenditures and request payment, not to exceed 90% of the grant award, for 60 days following the ending date of the grant in the event such total cumulative expenditures need to be revised. On the 61st day, grantees will not have access to Web ER/eGrants to request additional funds. Grantees will only have access to Web ER/eGrants to record refunds to the grant by reducing cumulative expenditures. TEA will not process, approve, or pay any requests for additional funds beyond 60 days after the ending date of the grant.

**Access the Texas Education Agency website at http://www.tea.state.tx.us and click on "WEB Expenditure Report" under "School Finance and Grants". Each vendor has one username (lower case “z” plus your 6-digit county-district number (ex: z010101); one password (generally established by the district’s Finance/Business Manager); and one 4-digit authorization code. Individuals other than the Finance/Business Manager who wish to access Web ER will need to contact the Finance/Business Manager for the password and authorization code. Enter cumulative expenditures to date for the grant.

Beginning September 1, 2005, grantees will report expenditures by class-object code and request payment through the eGrants system using the TEASE eGrants password assigned to the individual who is reporting.

Budget Adjustments/Amendments

Grantees are permitted to amend their budgets within the approved direct cost budget to meet unanticipated requirements and to make certain changes to the approved budget without written amendment. The Texas Education Agency must approve an amendment prior to any activities such as purchase orders issued, funds encumbered and/or expended, goods received, or services rendered which are affected by the amendment. Amendments received in substantially approvable form will become effective on the date received in the appropriate funding division. Amendments received in substantially approvable form submitted to the Division of Discretionary grants will become effective on the date received in the Texas Education Agency. Amendments not received in substantially approvable form will become effective on the date of approval (signature date) by the Agency. The last day to submit an amendment is 60 days prior to the ending date of the grant.

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