FEDERAL FINANCIAL INTERNAL CONTROLS AND PROCEDURES
As a precondition to receiving federal funds, and described within Title 2 U.S. Code of Federal Regulations (CFR) Part 200, OMB Uniform Guidance and the Compliance Supplement, school districts must have written internal controls and procedures for the administration of federal grants. This policy outlines the financial internal controls and procedures established by the Smithfield School Department.
The Smithfield School Department has developed internal controls and procedures in the following areas to guide compliance with the requirements of federal laws and regulations.
1. Determination of Allowable Activities and Allowable Costs
To provide reasonable assurance that federal funds are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles, the Smithfield School Department has established a multi-step approval process. The Director of Financial Operations reviews and approves all expenditures for allowable activities, based upon the following process:
A. The federal grant program director approves the purchase by submitting a requisition to the Bookkeeper,
B. The Bookkeeper reviews and approves the requisition and forwards the requisition to the Fiscal Analyst,
C. The Fiscal Analyst enters the requisition into the financial software,
D. The Director of Financial Operations approves the requisition,
E. Upon approval, it is printed as a purchase order by the Fiscal Analyst,
F. The Financial Assistant processes payment upon receipt of appropriate documentation after the goods have been received.
2. Cash Management
The Smithfield School Department shall follow Federal/RIDE procedures for reimbursement of costs. Reports are prepared by the Director of Financial Operations to ensure a consistent level of service and timely request for reimbursement of expenditures. The Department operates on a reimbursement basis. There is no time lapse between draw down and disbursements and no interest earnings to be considered for repayment. Reimbursements shall be requested only after costs have been incurred. The Director of Financial Operations shall monitor cash management activities.
The federal grant program director shall review eligibility requirements for Federal Awards and determine that only eligible individuals and organizations receive assistance under Federal Awards. The federal grant director shall maintain documentation showing evidence of eligibility and reasonable assurance that funds are applied in accordance with program requirements. Eligibility documents will be maintained confidentially with limited access. Eligibility requirements will be communicated with staff members with related responsibilities.
4. Equipment and Real Property Management
Accurate records will be maintained for all equipment and/or property acquired with Federal awards, including the disposition of said equipment to provide reasonable assurance of the following:
A. Proper records are maintained for equipment acquired with federal awards,
B. Equipment is adequately safeguarded and maintained,
C. Disposition or encumbrance of any equipment or real property is in accordance with federal requirements, and
D. The federal awarding agency is appropriately compensated for its share of any property sold or converted to non-Federal use.
5. Matching, Level of Effort, Earmarking
The Director of Financial Operations will review and monitor matching contribution requirements of all federal grants to provide reasonable assurance that matching, level of effort, or earmarking requirements are met using only allowable funds or costs which are properly calculated and valued.
6. Period of Availability of Federal Funds
The Director of Financial Operations shall identify and communicate the funding period for all federal grant awards to program directors. All expenditures will be reviewed to ensure they were incurred within the proper funding period.
7. Procurement and Suspension and Debarment
To provide reasonable assurance that procurement of goods and services are made in compliance with the provisions of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, the Smithfield School Department shall not award a sub-award, covered contract, or any other covered agreement for program administration, goods, services or any other program purpose with any suspended or debarred party. The Smithfield School Department shall be responsible for determining that entities receiving sub-awards are not suspended or debarred by means such as checking the system for life award management (Sam.Gov); obtaining a certification or inserting a clause in the agreement. In addition, the Smithfield School Department will adhere to bidding and procurement requirements defined within the charter of the Town of Smithfield.
8. Program Income
The Director of Financial Operations shall ensure all program income is properly recorded as earned and deposited in the bank as collected.
The Director of Financial Operations shall review the reporting requirements applicable to each federal grant and prepare the report based on the applicable accounting method. The Bookkeeper is responsible for accumulating data on grant activities for each reporting period and reviewing the data with the Director of Financial Operations and federal grant program directors to confirm accuracy.
10. Sub-Recipient Monitoring
The Department currently retains all federally funded grants and does not pass any funds through to others. If the Department chooses to pass through funding with future grants, the internal controls related to Sub-Recipient Monitoring will be designed and implemented at that time.
11. Financial Management System
The financial management system of the Smithfield School Department shall meet applicable standards for all reporting requirements of each grant, related to financial reporting, accounting records, internal control, and budget control.
Materials and supplies will be deemed allowable that are necessary to carry out grant funded activities, as prescribed within the governing cost principles.
Compensation for personnel services includes but is not limited to wages, salaries, and fringe benefits. The costs of such compensation are allowable to the extent that they satisfy the specific requirements of the grant and other federal requirements.
14. Federal Timekeeping
Any employee who is funded by a federal grant shall complete a quarterly Time Certification Form, which is reviewed and approved by the federal grant program director. In addition, employees who provide instructional support services to students and who are funded by a federal grant, shall maintain a log of students he or she has worked with and the type of instructional support that was provided.
15. Retention and Access Requirements for Records
Records are retained in accordance with the FERPA and RI Records Retention Schedule LG2. Information Act requests are acted upon as soon as possible and within the timelines as stipulated within the Act.
16. Conflicts of Interest/Pecuniary Interests
Members of the Smithfield School Committee shall not knowingly enter into a contract with any supplier of goods and/or services under which any member, officer, employee or agent of the school district has any pecuniary or beneficial interest either direct or indirect, unless the person has not solicited the contract or participated in the negotiations leading up to the contract. School Committee members and school personnel shall not accept any training gifts or favors from vendors which might, in any way, influence their recommendations on the eventual purchase of equipment, supplies or services.
17. Training for Federal Financial Internal Controls Procedures
All new employees involved in federal programs shall be given proper training by the Smithfield School Department for the procedures in this document by existing, experienced staff members. The length of training is commensurate with the amount of prior experience of the new employee and will be adequate so he or she fully understands the financial procedures of the district. Employees will receive refresher training as needed.