Preparing your final budget amendments, compliance calculations, and Schedule of Expenditures of Federal Awards.
This Internal Control Tip is authored by Celina Cereceres, Whitley Penn
As the end of fiscal year 2023 approaches, there are a few reminders as you prepare for your final budget amendments, finalize compliance calculations, and prepare your Schedule of Expenditures of Federal Awards.
- New lease agreements must be recorded as capital outlay (object codes 6650 through 6657) and offset by Other Financing Resources (object code 7913).
- New subscription-based technology agreements (SBITAs) also need to be recorded as capital outlay (object code 6658) and offset by Other Financing Resources (object code 7949). Please note that the Texas Education Agency (TEA) FASRG Module 1 did not include a specific code for other financing resources related to SBITAs.
- Record all principal and interest payments for both leases and SBITAs in Function 71 and Object Code 65xx.
- Calculate your LEA’s ESSA Maintenance of Effort (MOE) amounts for fiscal year 2023. The comparison year should be the 2022 amounts reported by TEA in their annual ESSA MOE report. TEA has also allowed Function 71 and Object 65xx for lease payments and I believe (or hope) they will update their template for SBITAs. Our main concern in fiscal year 2023 is the large amounts of General Fund reclassifications to your ESSER II and III funds. If your LEA believes it will reclassify more than 10% of the 2022 expenditures reflected in the ESSA MOE template, then the District should refer to the 5-year flexibility rule made available by the U.S. Department of Education.
- Determine the amount of Emergency Connectivity Fund (ECF) funding/goods received and report it in the LEA’s SEFA. Please remember that under ECF, the LEA or the vendor is paid directly by the Federal Communications Commission. While you may not receive cash from the federal government, the goods received from the vendor do need to be recognized.
If you’re unsure, you can find your LEA’s allocation here. Remember that are multiple funding windows available to LEAs. Some LEAs are under Window #3 now. Until told otherwise, the Office of Management and Budget has deemed ECF as higher risk and auditors will find it quite difficult to explain why they have not selected larger ECF programs (i.e., Type A programs) for testing.
I know it’s a lot, but you can start by looking at the budget amendments and journal entries you had to make last year and determine if there are similar circumstances that require action in fiscal year 2023.
