authorized by the Texas Education Code (TEC) to monitor compliance with
requirements applicable to a process or program, and the related use of funds.
Monitoring is conducted to ensure compliance with federal law and
regulations and financial accountability, including compliance with grant
requirements. The relevant statute is TEC §7.021(b)(1), in conjunction with
§§7.028(a)(1) and 7.028(a)(2).
In addition, TEA
is authorized by TEC §12.1163 to review the records of an open-enrollment
charter school, a charter holder, and a management company.
Monitoring Requirements for TEA
monitor the activities of federal grant subrecipients to ensure that federal
grant awards are used for authorized purposes in compliance with federal
statutes, regulations, and the terms and conditions of federal awards. This
requirement is given in Title 2 of the Code of Federal Regulations (CFR),
200.331(d) and 34 CFR §76.770.
Requirements for Federal Grant Subrecipients
Federal grant subrecipients
must comply with the following requirements:
Compliance with Federal Financial Management
subrecipients of federal grants must have a financial management system that
meets certain federal financial management standards. This requirement is
specified in the general and fiscal guidelines and general provisions and
assurances published by TEA. All grant applicants agree to this requirement when
they certify and submit the grant application. The requirement is given in 2
Compliance with Financial Accounting and Reporting
districts, open-enrollment charter schools, and education service centers
(ESCs) must maintain records in accordance with the provisions of TEA's Financial Accountability System Resource Guide (FASRG). The Financial Accounting and Reporting (FAR) module of
FASRG (or Module 11, Special Supplement
to Financial Accounting and Reporting, Nonprofit Charter School Chart of
Accounts, if applicable) establishes the requirements for proper budgeting,
financial accounting, and reporting systems. FAR (and Module 11) are structured
to comply with federal financial management standards requiring that grant
funds be accounted for according to a fund-code structure.
districts, open-enrollment charter schools, and ESCs must maintain an
accounting system that uses the appropriate fund-code structure.
The accounting system must allow the organization to report
budgets, encumbrances, and expenditures in its general ledger in accordance
with FAR (or Module 11). Fund codes must be a minimum of 15 digits: three of
the digits identify the source of funds (the grant program), and four of the
digits constitute an object code that identifies the expenditure category.
Compliance with Generally Accepted Accounting Principles
subrecipients of federal grants must account for expenditures in
accordance with generally accepted accounting principles (GAAP). GAAP addresses
issues that help subrecipients account for their expenditures consistently and
maintain financial statements that are reliable and verifiable by an
independent party. The FAR and Module 11 code structures are established to
accommodate compliance with GAAP, which reflects federal financial accounting
nonprofit corporations must also account for the expenditure of funds
in accordance with GAAP, as required by the provisions of the Texas
Business Organizations Code, §22.352.
Notice of Agency Policy
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.