Transcript Slide 1

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ARIZONA
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TED DAVIS
• Arizona Department of Education
• Career & Technical Education
Section
• Phoenix, AZ
• 602-542-5349
• [email protected]
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States
Sequestration Triggers
• Section 111(a)(5), Hold
Harmless
• Force the use of FY 1998
census numbers
• Currently about 20 states or
territories qualify…
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States
Sequestration –
• The last numbers I saw reflected an -8.5% reduction
relative to those funds that become available July 1,
2013 for those states not protected by the “hold
harmless”
• What the administration sent out appears to imply
that Washington will take the full 8.5% out of our
very first quarter; in effect limiting states to only
being able to draw 16.5% of next year’s grant until
October 1, 2013?
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States
Sequestration
•
Historically state legislatures have been
“less than delighted” with the Perkins
100% Maintenance of Effort (MOE)
language
•
Sequestration reductions allow state
legislatures to reduce what they spend
on CTE by an equal amount or percent
and not trigger the Act’s MOE penalties
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States
Sequestration
Less Money –
• Look at how you are using your 10%
Leadership set-aside funds
• Cannot be used for “administrative” costs Which Perkins defines in Section 3 (1) –
“…... Such term does not include curriculum
development activities, personnel
development, or research activities.”
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States
Sequestration
Less Money – The Reserve
• Look at how your state uses “Reserve” funding
o Assistance dollars – Max 10%
• Large number of CTE students, large percentages of CTE students
or rural
• State defined
• States can award these funds on a competitive or on a formula basis
• Could target activities historically funded with leadership dollars
• Monies could be pooled under the provisions of Section 135(c)19
(Local uses of funds)
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The Super Circular
• A couple of years to actually have the proposed
changes in place?
• One I’m worried about – OMB Circular A-133, the
Single Audit
• Tests – still on the cross cutting matrix
• States are still expected to do fiscal monitoring
o Desk monitoring guide
o Do it digitally
o Virtual monitoring
• Risk-based fiscal monitoring
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Risk-based fiscal monitoring
• Start with what you do know?
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Size of the grant
A-133 audit findings
Request a copy of the Desk Monitoring document
Late with applications
Late with cash management reports
Late with the financial completion report
Any recipient placed on a financial hold by your state or
another federal program
o Concerns raised by your programmatic staff who
did go on-site
o Performance measures
• Has a practical aspect – most states don’t have the
resources to support full-time fiscal accountability staff
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QUESTIONED COSTS*
• Inadequate or no documentation
• Failure to follow your own approved plan
• Exceeding the Perkins’ mandatory setasides
o 5% Administration
o 10% State Leadership
o $60K to $150K – Non Traditional
o Etc…
• Cost Allocation - Inaccurate or not allocable to Perkins
o Time & Effort – Also a cost a cost allocation issue
* a.k.a. – Give me back the
money
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COST ALLOCATION –
OMB Circulars A-87 & A-21 outline the factors to consider in
determining the allowability of costs
Costs must meet the following criteria:
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Be necessary and reasonable for proper and efficient
performance and administration of federal awards
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Be allocable to the federal award
•
Be authorized or not prohibited under state or local laws or
regulations
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Cost Allocation (Cont.)
• Conform to any limitations or exclusions set forth in these
principles, federal laws, terms and conditions of the federal
award, or other governing regulations as to types or amounts
of cost items (e.g., use of restricted rates as defined by 34
CFR 75.563 and 76.563)
• Be consistent with policies, regulations, and procedures that
apply uniformly to both federal awards and other activities of
the governmental unit
• Be accorded consistent treatment. A cost may not be
assigned to a federal award as a direct cost if any other cost
incurred for the same purpose in like circumstances has been
allocated to the federal award as an indirect cost
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Cost Allocation – (Cont.)
• Be determined in accordance with Generally Accepted
accounting Principles (GAAP)
• Not be included as a cost or used to meet cost sharing
or matching requirements of any other federal award in
either the current or a prior period, except as specifically
provided by federal law or regulation
• Be the net of all applicable credits
• Be adequately documented
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Time & Effort
• The primary issue is still allowable, allocable costs
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Semi-Annual Certifications
o An employee working solely on a single federal award or cost
objective
• Personnel Activity Reports (PARs)
o More than one federal award;
o A federal award and a non-federal award;
o An indirect cost activity and a direct cost activity;
o Two or more indirect cost activities which are allocated using
different allocation bases; or
o An unallowable activity and a direct or indirect cost activity
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Time & Effort (Cont.)
Personnel Activity Reports (PARs)
• After-The-Fact Record: must reflect an after-the-fact
distribution of the actual activity of the employee;
• Total Activity: must account for the total activity for
which the employee is compensated;
• Monthly: must be prepared at least monthly and
must coincide with one or more pay periods; and
• Signed and dated: must be signed and dated by the
employee. A signature of the supervisor alone is
not sufficient
• Budget estimates determined before the services
are performed do not qualify as support for
charges to federal awards
• A substitute system is allowable with written prior
approval – Rare… Don’t count on it…
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Time & Effort (Cont.)
The T&E language is more to the point in A-87, A-122 & Cost Allocation
Guide for State and Local Governments (The Green Book)
http://www2.ed.gov/about/offices/list/ocfo/fipao/guideigcwebsite.pdf
The language for higher education participants in A-21 is not as
clear…
Circular A-21 Section J.10.c.(2)(e)…
“(e) For professorial and professional staff, the reports will be
prepared each academic term, but no less than every six months.
For other employees, unless alternate arrangements are agreed
to, the reports will be prepared no less frequently than monthly
and will coincide with one or more pay periods.”
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Time & Effort – And the Super Circular
• Promises consistent language
• A little more flexibility
• But you still must meet cost allocation
requirements/standards
o You might start with “budgeted” but the numbers
will have to back you up
o Expanded use of semiannual certifications…
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Turn Your Procurement Practices Into A Questioned
Cost?
• Don’t DOCUMENT or document poorly
• The services or property you bought is not ALLOCABLE to your
Perkins grant
• Failure to document the method of allocation when services or
property/equipment is shared by two or more cost activities
• Issue a service contract to someone on the Federal Debarment
List
(EDGAR 34CFR 85 Subpart B)
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Turn Your Procurement Practices Into A Questioned
Cost?
• Failure to follow your own state’s
procurement rules
• Issuance of district credit cards to
staff – can be an internal control
nightmare. (I suggest you severely
restrict)
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SUPPLANTING
• It is a jump from the “presumption” of supplanting
to an actual finding
• The primary question arises when you cover a
cost previously paid for with non-federal funds
• Supplanting defense – “would not have
provided the service in the absence of federal
funds” (OMB A-133 Compliance Supplement 484.000; III.G.2.2 )
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PROPERTY MANAGEMENT FINDINGS the “never ending easy audit finding…”
• Failure to follow your own state’s property
management requirements
• The use of purchased equipment for non-CTE
purposes
• The loss or theft of electronic toys…. cell phones, flat
screens, cameras, back-up hard drives, etc.
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The AUDIT Process
• If you smell a finding – get involved before the exit
conference – don’t wait
• Don’t let your administration concur with a finding in
your area because, “it’s not in their administrative shop”
Some will concur with a finding not in their area,
regardless of how much work or damage it will do to
your area… Talk to your administration in advance and
request to be involved relative to findings that include
your area
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