Transcript Document

1
Arizona
Handouts…
• Perkins 101
• “Perkins 101 Library”
2
• Arizona Department of Education
• Career & Technical Education
Section
• Phoenix, AZ
• 602-542-5349
• [email protected]
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Challenges
• Sequestration
• Hold Harmless
• Reauthorization
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Sequestration
• - 5% converts to ≈ - 8.5% reduction for all
but 20 states & territories
• The “hold harmless” provision of Perkins as
written never envisioned “sequestration”
• The full 8.5% sequestration cut will come
out of the last three months of the current
federal fiscal year (July 1 – September 30,
2013)
Section 111(a)(5) – Hold Harmless
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Until October 1, 2013 you cannot obligate or spend
more than your 1st quarter grant award notification
(16.5% of total federal FY 13 award)
• States – don’t forget to factor in any carryover
monies you still have to reallocate
o (Tydings-27 months)
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• Perkins V ???
• I wouldn’t count on reauthorization until after the
next Presidential election….
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• Concentrates on the OMB Circulars
• For our purposes primarily –
o Circular A-133 - Audit Requirements
o Circular A-21 - Allowable Costs
Postsecondary
o Circular A-87 - Allowable Costs Secondary &
State Agencies
o Circular A-102 - The Common Rules (Admin.
Regs)
o Circular A-122 - Allowable Costs Non-Profit
(OMB – Office of Management & Budget)
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Time & Effort
• More flexibility
• Will iron out the differences between OMB
Circulars A-21, A-87 & A-110
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• Audit –
o Single audit threshold increased to $750,000
o Removes –
• Procurement (including debarment)
• Property management
• Level of effort – Maintenance of Effort
(MOE)
• Etc. (7 out of 14 compliance areas)
• Be careful! – It does not mean these requirements
are gone!
• A year or two from actual release?
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Several years away…
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There is a more advanced Perkins break-out session.
Check your conference schedules.
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• Perkins is “split-funded” between
secondary and postsecondary
• The average split nationally is 60%
secondary & 40% postsecondary
• The postsecondary splits range from 12%
to 75%
• Determined by each state
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State
Maintenance of Effort (MOE) & Dollar-for-Dollar Match
• States have two ‘MOE’ requirements –
• In the aggregate - (Section 311(b))
• Your 5% Admin funds also have an MOE requirement
(Section 323)
• States have a dollar-for-dollar administrative match requirement
(Section 112(b))
Cuts in Perkins funding will make it easier for states to meet their
Perkins MOE requirements and unfortunately for some state
legislatures to cut what they are spending on CTE and not violate
the Perkins MOE requirements
(Section 311(b)(1)(C) & Section 323(b))
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Allocations to States are Census Based
•
•
50% “population aged 15 to 19 inclusive, 20%
population aged 20 to 24,” etc.
Poverty is not factored into the allocations to
the states (Section 111(a)(2) )
In-State Allocations – Secondary
• District census data
• 70% based on 5-17 census count at or
below poverty guidelines
• 30% total district census data
(Section 131 (a)(1-3))
In-State Allocations – Postsecondary
• Based on Pell Grant recipient and BIE
assistance recipient counts within a state and
community college district (Section 132 (a)(2))
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Exceptions - Area CTE/Vocational Schools
• Most commonly funded via a cooperative agreement,
based on the number of students served (Section 131 (e))
Exceptions - Secondary (Section 131(C))
• Formula award less than $15k
• Consortium or waiver approval
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Exceptions - Charter Schools
• May participate in a consortium
• Waiver allowance for public charter schools receiving
less than $15K (Section 131(c)(A)(ii)
Exceptions – Postsecondary (Section 132(C))
• Formula award less than $50k
• Consortium or waiver approval
A secondary or postsecondary “split” of 15% or less
allows for a state to develop its own allocation formula
(Section 133(a)(2))
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Where To Start States – Approved State Plan
Recipients – Approved Local Application
Pitfalls –
• Just don’t write “something” to get the money
• States –
o State Plan – Follow it, change it or amend it.
o You really want to avoid a formal amendment
process
• Local Applications –
o Recipients - Follow it or amend it
o Check your progress and budget at least midgrant and 90 days before your end date
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Perkins is not an entitlement grant –
• One or more programs of sufficient size, scope and quality to
warrant the receipt of grant funds
• Allocation is less than $15K (Secondary) or less than $50K
(Postsecondary) you need to –
o Request and receive a waiver, or
o Enter into a consortium agreement with another district or
college
o Waivers – you need to be able to justify the waiver
o The recipient has a viable program, and
o They are not able to enter into a consortium due to:
• Rural isolation
• No one within a reasonable distance wishes to enter into
a consortium with the recipient
o Charter schools do not require a waiver
(Section 131(c)(1-2); Section 132(a)(3-4); Section 132(C); Section 132(C)(2))
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States – Without an approved State Plan or a
“substantially approvable plan” may not obligate Perkins
funds
Recipients – Are in the “same boat” – they can’t obligate
new grant funds until their application is “substantially
approvable”…
Example – A recipient’s new fiscal year begins July 1st. On July 6th, in
anticipation of school starting, the district buys some badly needed CTE
equipment. Their Perkins application for the new school year is
substantially approved two days later on July 8th. This district may not use
Perkins funds to pay for this equipment – even if the delay is the state’s
fault.
EDGAR 34 CFR §76.703(d)
EDGAR 34 CFR §76.708(a)
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You have an approved application - What can you spend $$$ on?
• 1st Rule – either follow your approved application or plan or amend it to meet
your needs
• States –
o Section 3 Administration, your 5% Admin setaside
o Section 124 – State Leadership Activities, your 10% setaside
o Do Not Exceed These Percentages!
• Recipients –
o Section 134 – Your Local Plan
o Section 135 – Local Uses of Funds
o States, Tribes, K-12 schools – OMB Circular A-87
o Community Colleges – OMB Circular A-21
o Charter Schools – (Arizona utilizes OMB Circular A122)
• In all three, look for the section titled, “Selected Items of Cost”
o A-87 – Appendix B
o A-21 – Section J
o A-122 – Appendix B
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Sole State Agency
Carl D Perkins Act
• Section 112(a)(3) – 5% Administration
• Section 124 – State Leadership Activities
State Approved Plan
Under OMB Circular A-87 – However, depending on the recipient you are
working with you , might use
•
OMB Circular A-87 (Secondary)
•
OMB Circular A-21 (Postsecondary)
•
OMB Circular A-122 (Non Profit Charter Schools)
State Statutes Procurement, Capital Assets,
Gifts, Travel, Pre-paid Costs,
Etc.
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Eligible Recipient
Secondary
Postsecondary
Carl D. Perkins Section 135 – Local
Uses of Funds
Carl D. Perkins Section 135 – Local
Uses of Funds
Your Approved Local Plan
Your Approved Local Plan
OMB Circular A-21; Selected
Items of Cost
OMB Circular A-87;
Selected Items of Cost
State Statutes • Procurement
• Capital Assets
• Gifts
• Travel
• Pre-paid costs
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General Test of Allowability
• Fits with your application
• Allowable per the appropriate OMB Circular
• Reasonable
• Allocable
• Consistently treated
• Consistent with your organization’s policies
• Incurred in accordance with GAAP
• Not charged elsewhere
• Adequately documented…
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SALARIES
• Yes – You must do “time-and-effort” (T&E) reporting
• Employee works full time on Perkins you –
o Must ‘certify’ the employee at least semi-annually
o T&E records must be signed by the employee or a
supervisor with first-hand knowledge
o Multiple cost objectives requires regular Personnel Activity
Reports (PARs)
o The cost has to be “allocable” to your Perkins grant
o After-the-fact reporting
o Signed by employee
o Coincide with pay periods; at least monthly
Secondary, SEAs, Governments, BIE - OMB Circular A-87 Appendix B.8.h.
Community Colleges OMB Circular A-21 Appendix J.10.
Non-Profit Charter Schools – OMB Circular A-122 Appendix B.8.m.
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Time & Effort (T&E) –
• A major source of audit findings
• The Super Circular will make T&E reporting more uniform
but it will still be a major compliance area
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EQUIPMENT
•
EDGAR (34 CFR §80.1) defines equipment as personal property that costs
$5,000 or more – The issue has more to do with a state’s inventory
requirements (and the associated costs) than the purchase price
•
If your state elects a lower dollar threshold for inventory purposes (or has
“stewardship” requirements) you must comply with your state’s lower
capitalization limit ( EDGAR 34 CFR § 80.32(b))
•
The OIG (Office of Inspector General) has been issuing findings relative to
items of equipment that are considered “attractive theft” items – cell phones,
digital cameras, flat screen monitors, etc. that cost a lot less than $5,000
•
When is something a supply and not equipment?
•
•
Use a “reasonable person approach” – Does it have a useful life of a
year or more, would you throw it away or repair it, does your own state’s
criteria treat it as a supply or equipment?
Colleges often won’t budget anything under $5,000 as “capital” – You’ll see
terms like “non-capitalized capital”… The issues are more about what line
you budget the money on and at what dollar amount do you have to
inventory the equipment?
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EQUIPMENT CONT.
• Get it written into your approved application
•
Items like your CTE computer lab
• Specialized workstations
• The cost of connecting equipment
• Etc.
• Avoid paying for items your district typically supplies to all
your district’s educational programs – desks, chairs, PCs
• USE NON-PERKINS FUNDING WHERE POSSIBLE
• Trade Perkins-funded CTE costs for those CTE costs
funded with non-federal $$$
• Pursue donated equipment where possible
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EQUIPMENT CONT.
• Tag equipment purchased with Perkins funds
Equipment & Real Property Management –
• The Super Circular may drop property management
relative to the Single Audit, but…
• Failure to safeguard and manage property and supplies
purchased with federal funds –
o Can still generate an audit finding
o Can still result in “questioned costs”
• Failure to follow your own state’s property management
rules and requirements can still generate an audit finding
• Responsibility shifts to states to ‘police’ program fiscal
monitoring requirements
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STUDENT ORGANIZATIONS
Little guidance – the Feds typically refer you back to 34 CFR §403.71(c)
– The last regulatory guidance for Perkins, under Perkins I
• Allowed – Instructional related costs (very narrow)
• Disallowed – All the fun stuff…
States – Section 124(c)(4)
Local Recipients – Section 135(c)(5)
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(3) The support of vocational student organizations may not
include—
(i) Lodging, feeding, conveying, or furnishing transportation to conventions or other
forms of social assemblage;
(ii) Purchase of supplies, jackets, and other effects for students' personal ownership;
(iii) Cost of non-instructional activities such as athletic, social, or recreational events;
(iv) Printing and disseminating non-instructional newsletters;
(v) Purchase of awards for recognition of students, advisors, and other individuals; or
(vi) Payment of membership dues;
(d) Leadership and instructional programs in technology education; and
(e) Data collection.
My guess, they mean non-instructional, out-of-the-classroom-type activities that
don’t meet the conditions of 34 CFR § 403.71(c)(2)(iv) & – “all students…”
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• Practices vary from state to state…
• Use the “reasonable person” approach
• Make them a part of your Program of Study
approach
• Seek local Board approval where you deem it
appropriate
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NOT ALLOWED
• Alcohol
• Entertainment expense
• Awards (gifts)
• Promotional items (freebies)
• Promotional advertising
o
o
o
o
o
OMB A-87 B.3; OMB A-21 J.3
OMB A-87 B.14; OMB A-21 J.17
OMB A-87 B.20; OMB A-21 J.22
OMB A-87 B.1.f.(3); OMB A-21 J.1.f(3)
OMB A-87 B.1.f(4); OMB A-21 J.1.f(4)
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FOOD & BEVERAGES
• “NO”
OMB A-87 B.3; OMB A-21 J.3
OMB A-87 B.14; OMB A-21 J.17
OMB A-87 B.27; OMB A-21 J.32
OMB A87 B.43; OMB A-21 J.53
• Unless it is related to –
• Approved travel (subject to your state’s per diem guidelines)
• Included in your approved registration
• Not considered entertainment
• Included as part of an approved conference or meeting
(attending or sponsoring)
• A consumable training supply (culinary arts)
• Alcohol never allowed
Read Goods or services for personal use – A-87 Attachment
B.20 & A-21 Section J. 22.
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TRAVEL FOOD & BEVERAGES
• Travel is allowable when it supports your approved grant or plan
• Meals, lodging, all the usual stuff is allowable, when approved
• Should be reasonable
• DOES NOT INCLUDE ENTERTAINMENT COST
What about those conferences where entertainment is included in
the registration fee?
o It’s your state’s call…
If the cost is separate and identifiable and the employee wants to
participate they must cover the cost out of their own pocket
OMB A-87 Attachment B.43 or OMB A21 Section J.53
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MEETINGS & CONFERENCES/FOOD & BEVERAGES
OMB A-87 B.27 (Comparable language in OMB A-21 J.32)
Meetings and conferences. Costs of meetings and conferences,
the primary purpose of which is the dissemination of technical
information, are allowable. This includes costs of meals,
transportation, rental facilities, speaker’s fees, and other items
incidental to such meetings or conferences. (Also see OMB A-87
B.14; OMB A-21 J.17, “Entertainment Costs”.
• Must be reasonable
• Must be able to stand the, “Would you like to see this on the front
page of your local paper?” test
• Does NOT include internal staff meetings
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MEETINGS & CONFERENCES/FOOD & BEVERAGES
Prepaid Fees – Early Registration
Are they a professional service cost or a travel cost?
• Prepaid registration fees can lead to accounting headaches
related to the issue of, “When is a cost incurred?” (See
EDGAR 34 CFR §76.707)
• May need to transfer the expense from one fiscal year to the
next if the fee is paid prior to the fiscal year in which the
activity will occur
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MEMBERSHIPS, SUBCRIPTIONS &
PROFESSIONAL ACTIVITY COSTS
• Memberships for a state or district are OK . For example, the cost
would be OK for your State CTE Director’s position, regardless of
who the individual is – but not for the individual who is the CTE
State Director
• Must be “allocable” to your Perkins project or plan
• Use the “reasonable person” approach
• It is recommended that you utilize your procurement system
procedures if you are looking at a • Significant cost
• Sole source provider (speakers, intellectual property,
copyrighted, etc.)
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AWARDS
Awards or Gifts -Typically Not Allowed
• However you can purchase nice frames through your
approved state or local office supply contract, print out a
nice certificate on your color laser printer and hand the
result to folks…
• Hand out donated items from your state’s Chamber of
Commerce, local industry groups, etc.
OMB A-87 B.1.f(3); OMB A-21 J.1.f(3)
OMB A-87 B.20; OMB A-21 J.22
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Do Not Use Perkins Funds For -
• Promotional items (freebies)
• Promotional advertising
The Most Common Ways To Cover Such Costs –
• At a state-wide level - Conference registration fees and
conference accounts
• Districts - Many states allow districts to maintain extra
curricular programs, student activity accounts. Some
states even allow for tax credits for donations made
• Outside groups, professional organizations, etc.
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The most
common
problems, goofs!
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• Failure to follow your approved
application/plan
• Review it at least at the six and nine
month points
• Follow it, or
• Amend it
• The OMB Circular A-133 CTE
Supplement – 4-84.048 (15 pgs.)
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PROCUREMENT –
• Inadequate documentation
If your procurement shop or business office are not known for
their attention to details - Cover Thy Butt
• Failure to comply with your own state’s procurement rules
o Bidding and quotation requirements
o Government credit card (PCard) problems
o Don’t sign anything unless you are authorized by your agency,
district or college to obligate them
o Inadequate internal controls
• Professional service contracts - Check the federal “Debarment”
website. If your vendor is on there you can’t use them
(OMB Circular A-133 §___.220
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Property Management Issues –
• An inventory system that does not meet your own state’s
property management requirements
• If you have to, keep your own set of documents
• Purchase orders
• Receiving documents
• A mini-inventory, with item location info
• Keep it current
• Does your state have a lower dollar threshold?
• Does it have “stewardship” requirements?
• You need to put special procedures in place for items
that cost less than $5K but are high-theft items
• Do your approved purchases agree with your approved application?
• Does your annual fiscal completion report reconcile to your actual
purchases?
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Time and Effort – Personnel Activity Reports (PAR)
• Nationally there have been some significant
questioned costs audit findings – in the $100K plus
range…
• Key factors –
o First, you have a time and effort reporting system
in place, not just an attendance (time clock)
reporting system
o Your system accurately reflects the activities for
which the employee is paid
o You are reporting after-the-fact
o It’s signed by the employee
o There is a suitable means of verification
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Time and Effort Cont. • A semi-annual certification is acceptable for an employee
that only works on Perkins (one cost center)
• Your system accounts for the full time for which the
employee is paid
• If an employee works on more than one cost center their
activity must be reported at least monthly and must coincide
with the employee’s pay period
o A red light to an auditor – time reported spent exactly as
budgeted…
• In rare cases payments could be on a budgeted basis
o Reconciled quarterly
o Within 10% of actual
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Time and effort Cont -
Monthly Report, Certifications… for community colleges?
Where does it say that?
Circulars A-87 and A-122 are easier to read. For
community college recipients, I recommend the following
paragraph, OMB 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.”
(AZ Examples – https://www.ade.az.gov/gme/ Select Federal Fiscal requirements)
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States - Fiscal Monitoring
• Also on the list of “frequent” new audit findings – “States need to
do fiscal monitoring” (EDGAR 34 CFR §80.40)
• Your folks don’t need to be auditors
• If they find something that “doesn’t look right”, then you can send in
real auditors
• Build fiscal questions into your monitoring tool –
o Compare actual activities to their approved application
o Compare equipment purchases to their reported end-of-year
equipment purchase documents - Compare to P.O.s and
receiving documents; did it end up on their inventory; check to
see if you can physically locate a couple of items from their
inventory on a sample basis
o Are they paying salaries? Ask to see either the employee’s
semi-annual certification or a personnel activity report (PAR)
o Purchased professional services – Did they check the federal
debarment website?
o Etc.
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The ‘MANTRA’ is back - Monitoring needs to be RISK BASED…
• As resources dwindle you will see the rebirth in emphasis on
“risked –based “ monitoring or auditing
• Our fiscal folk’s ranking is based on –
o The amount of money awarded
o Other audit reports
o On-time reporting
o Cash management issues
o Only one or two approved programs
• This information is then supplied to our program staff who have their
own weighting system based on program staff input and ratings
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States – Cash Management
• In the absence of electronic transfers, most payments to your
sub-recipients and contractors need to be on a “reimbursement
basis only”
• Many states have statewide bidding networks that meet the
state’s bidding and procurement guidelines, including having
90 days to pay for equipment and supplies purchased through
such agreements – States, school districts and community
colleges need to take advantage of such agreements
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• You need to argue your point as to why you should not have to return
funds before the final audit exit conference
• State your case. Find alternate documentation. Reconstruct what is
needed, etc.
• Agree to put corrections in place, but try like heck to talk them out of
returning $$$
• MAKE SURE THAT YOUR ADMINISTRATION GIVES YOU INPUT
INTO DECISIONS THAT AFFECT CTE!
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Questions?