Transcript SFSF: Refresher

FFATA, Section1512 Reporting
and ARRA Monitoring
Steven Spillan
[email protected]
Brustein & Manasevit, PLLC
Spring Forum 2011
1
SFSF: Refresher –
4 Core Reform Priorities

In order to receive SFSF funding, states provided
assurances to advance four core areas of education
reform:
 (1) increase teacher effectiveness and address inequities in the
distribution of highly qualified teachers;
 (2) establish a pre-K-through-college data system to track
student progress and foster improvement;
 (3) make progress toward rigorous college- and career-ready
standards and high-quality assessments that are valid and
reliable for all students, including students with limited English
proficiency and students with disabilities; and
 (4) provide targeted, intensive support and effective
interventions to turn around schools identified for corrective
action or restructuring.
2
SFSF: Refresher –
Federal Education Activities

Subject to limited statutory prohibitions, a Local Educational
Agency (LEA) may use Education Stabilization funds for
any activity that is authorized under the following Federal
education acts:
 The Elementary and Secondary Education Act of 1965 (ESEA);
○ Under Impact Aid authority, an LEA may use Education
Stabilization funds for educational purposes consistent with State
and local requirements, subject to ARRA and other applicable
Federal requirements.
 The Individuals with Disabilities Education Act (IDEA);
 The Adult Education and Family Literacy Act (AEFLA); or
 The Carl D. Perkins Career and Technical Education Act of
2006 (Perkins Act).
3
SFSF: Refresher –
State Maintenance of Effort (MOE)
 A State
must maintain State support for
elementary and secondary education, in
each of fiscal years (FYs) 2009, 2010,
2011, at least at the level that the State
provided in FY 2006.
 Same
rule for supporting public
Institutions of Higher Education
(IHEs)
4
SFSF: Refresher – State MOE Waiver
 The ARRA authorizes
the Secretary of
Education to waive these MOE
requirements if a State demonstrates that:
 It has provided for elementary, secondary,
and public higher education, for the fiscal
year under consideration, a % of the total
revenues available to the State that is equal
to or greater than the percentage provided
for that purpose in the preceding fiscal year.
5
SFSF: Refresher – Track and Account!
An entity that receives SFSF funds must
maintain records that separately track and
account for those funds.
 In accordance with the requirements of
Section 443(a) of GEPA (20 U.S.C. §1232f
(a)):

 Each recipient of SFSF funds must maintain
records that fully disclose how those funds
were used, the total cost of the activity for
which the funds were used, the share of that
cost provided by other sources, and such other
records as will facilitate an effective audit.
6
SFSF: Refresher – Time & Effort
There are no specific Federal time and effort
requirements that apply to individuals whose
salaries may be supported with SFSF funds.
 Entities must maintain documentation to
support the time & effort of these
individuals in the same manner that it
supports the time and effort of individuals
performing similar duties who are paid with
State or local funds.

7
SFSF: Refresher - 1512

Under section 1512 of ARRA, recipients of
SFSF funds must submit a quarterly report
that describes, among other things, how the
entity used those funds.

For purposes of reporting under section
1512 of ARRA, an entity must report
expenditures under the CFDA number under
which the SFSF funds are awarded (i.e.,
84.394 or 84.397).
8
ARRA Reporting Key Guidance
• ED Clarifying Guidance on Recovery Act Section 1512 Quarterly
Reporting (Revised—April 2, 2010),
http://www2.ed.gov/policy/gen/leg/recovery/section-1512.html
• Government-wide guidance for reporting under the requirements of
Section 1512 of the Recovery Act was published by the Office of
Management and Budget (OMB) on June 22, 2009. (OMB M-09-21)
Please see:
• Guidance on reporting,
http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m0921.pdf
• OMB, M-10-14, Updated Guidance on the American Recovery
and Reinvestment Act (March 22, 2010) (including “continuous
corrections” period).
9
ARRA Reporting Structure
10
ARRA Reporting Timelines
11
11
ARRA Reporting Timelines
12
12
ARRA Reporting Timelines
In January 2010, the Recovery Accountability
and Transparency Board (RATB) modified the
process for correcting data in
FederalReporting.gov by initiating a
“continuous corrections” period.
 Recipients can correct reported data for the
immediately preceding reporting quarter after
that reporting quarter has ended and after the
data is published on FederalReporting.gov.

Source: OMB M-10-14, March 22, 2010
13
ARRA Reporting Roles
The prime recipients are non-Federal entities that
receive Recovery Act funding as Federal awards in
the form of grants, loans, or cooperative
agreements directly from the Federal government.
Federal agencies are not considered prime- or subrecipients.
 The movement of Recovery Act funds between
Federal agencies is not subject to Section 1512
reporting.

Source: OMB M-09-21, June 22, 2009
14
ARRA Reporting Roles
A sub-recipient is a non-Federal entity that expends
Federal awards received from another entity to carry out a
Federal program but does not include an individual who
is a beneficiary of such a program.
 Non-Federal entities that are awarded Recovery funding
through a legal instrument from the prime recipient to
support the performance of any portion of the substantive
project or program for which the prime recipient received
the Recovery funding.

Source: OMB M-09-21, June 22, 2009
15
ARRA Reporting Roles
A vendor is defined as a dealer, distributor, merchant, or
other seller providing goods or services that is required
for the conduct of a Federal program.
 Prime recipients or sub-recipients may purchase goods or
services needed to carry out the project or program from
vendors.
 Vendors are not awarded funds by the same means as
sub-recipients and are not subject to the terms and
conditions of the Federal financial assistance award.

Source: OMB M-09-21, June 22, 2009, see also Circular A-133
16
ARRA Reporting Roles
• The prime recipient is ultimately
responsible for the reporting of all data required
by Section 1512 of the Recovery Act and this
Guidance, including the Federal Funding
Accountability and Transparency Act (FFATA)
data elements for the sub-recipients of the prime
recipient required under Sec. 1512(c)(4).
Source: OMB M-09-21, June 22, 2009
17
ARRA Reporting Roles
• Delegation: the prime recipient may require the
sub-recipients to report the FFATA data elements
required under Sec. 1512(c)(4).
• BUT…the prime recipient needs to collect data
about sub-recipients’ jobs created & retained,
and sub-recipients’ infrastructure investments.
These fields are only in the prime recipient
report.
18
ARRA Reporting Exception

Key reporting requirements:
 Section 1512 quarterly reporting applies to all
ARRA funds “recipients”
 List of Programs Subject to Recipient Reporting,
available in OMB Guidance Memorandum 09-21supp1.

Exceptions:
 Division B of ARRA not required to report
 Mandatory programs
 Individuals receiving awards
19
ARRA Reporting: Jobs
 Description
of Jobs Created or Retained
 Prime recipients are required to generate
estimates of job impact by directly
collecting specific data from subrecipients and vendors on the total FTE
resulting from the sub-award
 MAY NOT BE DELGATED to subrecipient, and it includes vendor
information.
20
ARRA Jobs Saved!
U.S. Department of Education American Recovery and
Reinvestment Act Report: Summary of Programs and
State-by-State Data, November 2, 2009
21
ARRA Jobs Saved!
“
 Overall,
about 400,000 jobs were
retained or created through the education
funding. According to figures given to
the federal government by the states,
325,000 were education jobs -- teachers,
principals and other educators -- and an
additional 75,000 were other public
service positions.
- “Education jobs boost connected to stimulus,”
Washington Post, Tuesday, November 3, 2009
”
22
ARRA Jobs Saved?

[E]conomic recovery program
saved 935 jobs at the Southwest
Georgia Community Action
Council, an impressive success
story for the stimulus plan.
Trouble is, only 508 people
work there. …”
- "Stimulus Watch: Salary raise
counted as saved job," Associated Press,
November 4, 2009.
23
ARRA Jobs Saved?
“

One of the largest reported jobs figures
comes from Bridgewater State College,
which is listed as using $77,181 in stimulus
money for 160 full-time work-study jobs for
students. But … the college made a mistake
and the actual number of new jobs was
‘almost nothing’’ ….
- "Stimulus job boost in state exaggerated, review
finds," Boston Globe, Nov. 11, 2009.
”
24
ARRA Reporting: Jobs
Updated guidance changes the job estimate
calculation
 Recipient will now report job estimate totals
by:

 dividing the hours worked in the reporting
quarter (i.e., the most recent quarter) by
 the hours in a full-time schedule in that quarter.
 Recipients
will no longer be required to sum
across multiple quarters of data as part of the
formula.
25
ARRA Reporting: Jobs
 The
updated guidance eliminates this
subjective “indirect job” assessment and
defines jobs created or retained as those
funded in the quarter by the Recovery Act.
 Jobs funded with non-Recovery Act funds will
not be counted unless they will be reimbursed.
 Jobs funded partially with Recovery Act funds
will only be counted based on the proportion
funded by the Recovery Act.
26
ARRA Reporting: Jobs
Source: OMB M-10-08, Updated Guidance on the American Recovery and Reinvestment Act – Data
Quality, Non-Reporting Recipients, and Reporting of Job Estimates (Dec. 18, 2009)
27
Source: Id.
28
29
ARRA Reporting: Vendor
 The
$25,000 vendor payment trigger:
 If any payments less than $25,000 from a
grant or subgrant, then the data may be
aggregated into a category of total number
and amount of payments.
 More detailed reporting required only if a
single payment is for $25,000 or more.
The full costs of the contract are not
considered.
30
ARRA Reporting Data Quality
 Data quality is an important responsibility of key
stakeholders identified in the Recovery Act.
 Prime recipients, as owners of the data submitted,
have the principal responsibility for the quality of the
information submitted.
 Sub-recipients delegated to report on behalf of
prime recipients share in this responsibility.
Source: OMB M-09-21, June 22, 2009, revised by M-10-14, March 22, 2010
31
ARRA Reporting Data Quality
 Data quality reviews are intended to emphasize the
avoidance of two key data problems:
 Material omissions,
 Significant reporting errors, and
Administrative/Technical (NEW).
 Data quality means accuracy, completeness and timely
reporting of information.
Source: OMB M-09-21, June 22, 2009, revised by M-10-14, March 22, 2010
32
ARRA Reporting Data Quality
 Penalties!
 On a case-by-case basis, findings of systematic or
chronic problems can result in termination of Federal
funding and/or initiation of suspension and debarment
proceedings of either the recipient or sub-recipient, or
both.
 In some cases, intentional reporting of false
information can result in civil and/or criminal
penalties.
Source: OMB M-09-21, June 22, 2009
33
SFSF: USDE ARRA Monitoring
34
SFSF: USDE Monitoring - Fiscal

SFSF monitoring is producing well worn
findings…
 (1) whether services provided in schools receiving
ESEA Title I, Part A funding were comparable to
those services provided to students in other district
schools not receiving ESEA Title I, Part A funding;
 (2) Whether federal funding had been used to
“supplant” local or state funds by paying for services
that had previously been provided using local or state
funds; or
 (3) Time and effort documentation regarding
employees funded through multiple funding
sources.
35
SFSF: USDE Monitoring - T&E

OMB Circular A-87 Cost Principles do not
apply
 But expenditures must be “necessary and reasonable”
and consistent with state and local requirements.
○ See Guidance for Grantees and Auditors: State Fiscal
Stabilization Fund Program (United States Dept. of Ed.,
Dec. 2009).

Track ARRA funds separately.
 GEPA Section 443(a) – Maintain records that fully
disclose how funds were used, total cost of the
activity, share of costs provided by other sources, and
such other records to facilitate an effective audit.
36
SFSF: USDE Monitoring - Set
Aside
Some
districts had not
included Recovery Act
funding in their calculations
as required.
Title I Part A
ARRA set-aside waivers
37
SFSF: MOE
 State
budget issues are apparent:
 ED has granted two states —NJ & RI —
an SFSF MOE waiver.
 Allows the state to reduce 2009 state
support for education below 2006 levels.
○ (P.L. No. 111-5, § 14012 (2009)).
 ED is reviewing SC’s and FL’s waivers.
38
OIG: ARRA - Key Lessons
39
OIG: ARRA:
40
GAO/OIG Lessons - Not
Surprising
SEA/LEA: adequate tracking of funds
 SEA: sub recipient monitoring policies and
practices
 Reporting data accuracy and completion
 Better documentation of policies and
procedures regarding payroll certification
 Better SEA cash management

41
OIG – Recent Audit
Recent OIG audit in Oklahoma could lead to
$16 million monetary finding.
 Moral of the Story: ARRA may be coming
to an end, but dangers linger.

42
Ed Jobs:
Accountability & Reporting
 A State
and its LEAs must fulfill the
reporting requirements under §1512 of
ARRA.
 Specifically, the State will submit
quarterly reports on its own behalf and on
behalf of its LEAs that describe, among
other things, how those funds were used.
43
Ed Jobs:
Accountability & Reporting
 States
will submit annual reports to
the Department for this program that
include information on the number
of education personnel impacted by
the program.
 See ARRA § 14008.
44
Ed Jobs:
Accountability & Reporting
 LEAs
must ensure that all reported data is
properly documented and supported.
 Supporting documentation should provide an
adequate audit trail between reported data and
source documents such as:
○ Timesheets, payroll records, invoices, executed
contracts, financial system reports and other
information stored in grant files.
45
Federal Funding Accountability
and Transparency Act (FFATA)
 Open
Government Initiative
 Applies to contracts and grants awarded on or
after Oct. 1, 2010, other than those funded by
ARRA.
 If the initial award is equal to or over
$25,000, the prime recipient must report on
subaward and executive compensation, if
required.
 Reported at www.fsrs.gov
46
FFATA – Who and What

The prime recipient must report on all subawards and
subcontracts over $25,000. Info required:










Name of entity receiving award
Amount of award
Funding agency
NAICS code for contracts / CFDA program number for grants
Program source
Award title descriptive of the purpose of the funding action
Location of the entity (including congressional district)
Place of performance (including congressional district)
Unique identifier of the entity and its parent; and
Total compensation and names of top five executives (same
thresholds as for primes)
47
FFATA – Who and What (cont.)

Prime Recipients must report the total
compensation and names of the top five
executives if:
 More than 80% of annual gross revenues from
the Federal government, and those revenues are
greater than $25M annually and
 Compensation information is not already
available through reporting to the SEC.
48
FFATA - How

Prime awardees will report using the FFATA
Sub-award Reporting System (FSRS). The
tool will pre-populate, to the maximum
extent possible, recipient information from
existing Federal agency databases, such as
the Central Contractor Registration System
(CCR), to reduce the burden associated with
this new FFATA reporting. All Federal
contractors and prime grant recipients are
required to register in CCR.
49
FFATA - Timing

The prime recipient will have until the end
of the month plus one additional month after
an award or sub-award is obligated to fulfill
the reporting requirement. For example, if a
sub-award was made on October 15, 2010,
the prime recipient has until November 30,
2010 to report the sub-award information.
50
FFATA Guidance
OMB: April 6, 2010 memo requiring the
reporting of first-tier sub-awards
 OMB guidance containing specific
instructions on the sub-award reporting on
August 27, 2010:

 http://www.whitehouse.gov/omb/open
51
FFATA – Federal Assistance

Despite guidance already released, open
questions remain.
 How to report on grants funded through
reimbursements?
 How much, if any, sub-recipient reporting effort can
be required by prime?
Individual federal agencies ill equipped to
respond to prime recipient questions.
 Full reporting required as of March 1, 2011, so
still working on implementation; may be some
time before compliance issues arise.

52
Resources
Education Department General Administrative
Regulations (EDGAR)
Title 34, Code of Federal Regulations (CFR), Parts 7486 and 97-99
December 2008 edition.
http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.ht
ml
FFATA FAQs: https://www.fsrs.gov/#a-faqs
53
DISCLAIMER!
This presentation is intended solely to provide general
information and does not constitute legal advice or a legal
service. This presentation does not create a client-lawyer
relationship with Brustein & Manasevit, PLLC and,
therefore, carries none of the protections under the D.C.
Rules of Professional Conduct. Attendance at this
presentation, a later review of any printed or electronic
materials, or any follow-up questions or communications
arising out of this presentation with any attorney at
Brustein & Manasevit, PLLC does not create an attorneyclient relationship with Brustein & Manasevit,
PLLC. You should not take any action based upon any
information in this presentation without first consulting
legal counsel familiar with your particular circumstances.
54