Federal Fiscal Monitoring Division

The Federal Fiscal Monitoring Division is responsible for monitoring the expenditures of federal grant subrecipients to ensure federal funds are used for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of federal awards.

One way the division carries out its responsibilities is to monitor findings identified during an organization’s single audit. More information about monitoring single-audit findings, including single-audit requirements and what you can expect if your organization’s single audit contains findings, is available online.

The division also selects individual federal grant subrecipients for review. If selected for a review, the Division will notify your organization in writing by mail and email. The letter describes the details of the review process and provides a list of documents that you must submit to TEA.

The division conducts two kinds of reviews, described below. In any given fiscal year, organizations are usually selected for only one kind of review.

Monitoring Reviews

The objective of a monitoring review is to determine if a subrecipient of federal grant funds obligated and expended the grant funds in accordance with the approved grant application and applicable federal statutes and regulations.

To begin the monitoring review, staff from Federal Fiscal Monitoring request documentation from the organization to support grant expenditures, including a general ledger and payroll journal. After reviewing the submitted documents, staff select specific expenditures for further review and request additional supporting documentation, such as copies of invoices, receipts, travel vouchers, and time and effort records. If necessary, staff inquire about specific aspects of a transaction, such as the source documentation, the business purpose of the transaction, the associated activities, and the participants. When all requested documentation has been received and reviewed, and all inquiries satisfactorily answered, staff conclude the monitoring review and notify the organization by letter. The letter will describe any observations made during the review and provide recommendations for strengthening internal controls and financial management systems. Based upon the observations, the division may also refer the organization for further review.

The monitoring review is more limited in scope than a grant review and focuses on the allowability of selected expenditures.

Grant Reviews

A grant review is more comprehensive than a monitoring review. The objective of a grant review is to determine whether a subrecipient of federal grant funds is complying with applicable federal statutes and regulations and with grant requirements, including the uniform administrative requirements and cost principles for federal awards given in Title 2 of the Code of Federal Regulations (CFR), Part 200. The review focuses on the financial management systems developed and implemented by the organization to demonstrate compliance with applicable requirements, including policies and procedures, accounting software, and record keeping systems. The grant review also tests the allowability of expenses charged to your federal grant, as well as compliance with federal program requirements.

Division staff will communicate with you through a series of letters, emails, or telephone calls, as needed, to request policies and procedures, financial records, and supporting documentation. Staff review, analyze, and evaluate financial records and all supporting documentation submitted by the organization and may contact you to ask specific questions about the documents. If a site visit is deemed necessary, staff will notify you at a later date.

After staff have reviewed your internal controls, financial records, and supporting documentation, a preliminary report is issued. Your organization will review the preliminary report and respond, in writing, within ten business days. You may provide additional documentation in your response to the preliminary report. Staff review your response and any additional information you submit and then issue the final report of observations and findings. Division staff will refer organizations to other TEA divisions or staff to address pending issues, as needed.

Resources

 Additional information for subrecipients selected for a review.

 Statutory authority for reviews.

Notice of Agency Policy

TEA conducts federal fiscal grant subrecipient monitoring and compliance reviews, and implements related enforcement actions, in accordance with its established policies and procedures. These policies and procedures incorporate best practices and standards that may be similar to common auditing standards, but the agency does not apply a specific set of external standards, such as the US Government Accountability Office’s Generally Accepted Government Auditing Standards (Yellow Book), nor is it required to do so.