By Jessica Zaleski
There are a lot of rules to remember when it comes to EDGAR (Education Department General Administrative Regulations), and you particularly care about how this impacts inventory and technology. The Office of Management and Budget (OMB) released new regulations in December of 2014 that affected EDGAR.
In short, EDGAR is a structure that is used to ensure federal funds are spent as intended. It’s coming up on the radar of many districts and staying compliant may add to the responsibilities of your technology team. With that in mind, we’ve put together some information to ensure your district is ahead of the game when it comes to EDGAR. For more complete information on EDGAR, visit this page on the Department of Education’s website.
Does EDGAR apply to all of our grant funds?
EDGAR requirements are specific to federal awards from the US Department of Education that were received after December 26, 2014. EDGAR requirements do not apply to other state and local funds. If you are unsure which administrative regulations apply to your current federal awards, review your Notice of Grant Award (NOGA), or contact the appropriate program office.
What does EDGAR say about tracking items?
2 CFR 200.302(b)(4) states that a non-Federal entity “must adequately safeguard all assets and assure that they are used solely for authorized purposes.” Under the rule, equipment must be tracked until it is properly disposed and removed from the inventory. This means that even after an item has fully depreciated, it will still need to be tracked if it was paid for using Federal funds.
How does this impact your technology department?
Inventory tracking is now more complicated. In the past, districts only had to track larger equipment (over $5,000) purchased with grant funds. Now, districts are responsible for tracking any items, both large and small. Some states have adopted policies that require all non-consumable assets to be tracked, regardless of the useful life of the item.
What do school districts have to do to stay compliant?
School districts must keep detailed inventory records to abide by EDGAR regulations. These records must include:
1- A description of the property and who holds the title to the property
2- A serial number or other identification number
3- The funding source used to purchase the property
4- The purchase date
5- The cost of the property
6- The percent of federal funds used in the purchase
7- The location, use and condition of the property
8- Any final disposition data, including the date of disposal and sale price of the property
School districts need to tag all non-consumable purchases, like network equipment, and small property, such as Chromebooks and tablets that can easily be stolen. Those in charge of grants must ensure that procedures are in place and followed to tag equipment in a visible location and record funding details. EDGAR regulations indicate in section 80.32 that “a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.” If you’ve accepted federal funds for devices or assets in your district, you’ll need to comply with the tracking requirements. Additionally, the same section requires “a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated.”
What are the consequences for not staying compliant?
If your district is audited and found not to be compliant with EDGAR requirements, the funds you received may have to be returned to the corresponding federal fund, and then the LEA would have to pay for the expense out of local funds. There are steps in place to allow the LEA to negotiate with the auditors. If the findings are great enough, your district also may face criminal charges. This happens when auditors determine the non-compliance was intentional and fraudulent.
Why were these changes made?
The reporting and proper disposition of property is a new focus of EDGAR officials. Many school districts had trouble with inventory control and reporting, and the new EDGAR has put processes in place to ensure that schools are tracking and reporting their property with extreme accuracy. Some grants are now requiring districts to follow specific disposal processes according to Section 200.313.
What should school districts be fearful of?
Districts should be fearful of miscommunication between departments as so many smaller value assets are being purchased. Miscommunication is a big deal particularly if there are process gaps or unassigned roles and responsibilities to properly control grant-funded inventory. This presents a perfect opportunity to evaluate the following inventory procedures: recording inventory purchases, tagging assets, transferring between sites and rooms, auditing inventory, and disposal.