Changes to Transparency, Accountability and Reporting Requirements

Steven A. Spillan, Esq.

[email protected]

Brustein & Manasevit, PLLC Spring 2012 Forum

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Overview

• • • Reporting Before FFATA • EDGAR Reporting Requirements • ARRA Reporting FFATA Reporting Programmatic Reporting 2

Reporting Before FFATA

• What is “reporting”?

• Accountability measure used by granting agencies to ensure that federal funds are spent appropriately 3

Reporting Before FFATA – EDGAR Reporting

 Financial Status Reports • EDGAR 80.41

 OMB-approved forms - Standard Form 425  Grant Life Cycle • Solicitation, application, award issuance • • • • Obligations, draw Federal cash payments Disburse cash/liquidate obligations Document transactions

Submit Financial Reports

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Reporting Before FFATA EDGAR Reporting

 Standard Form 425 • • • • Combines SF 269 and SF 272 Deadlines - federal fiscal year quarters New Certification Language     Previous features retained: Object class categories of expenditure Frequency Handling of accruals Cash management instructions 5

Reporting Before FFATA EDGAR Reporting

• Subgrantee Reporting • • Not required to use OMB forms Grantees may not impose more burdensome requirements on subgrantees 6

Reporting Before FFATA EDGAR Reporting

 Performance Reports • EDGAR 80.40

• Frequency depends on awarding agency, not required more often than quarterly  EXCEPTION: “High Risk” grantees may be subject to more frequent and extensive reporting. EDGAR 80.12

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Reporting Before FFATA EDGAR Reporting

 Performance reports must contain: • Comparison of actual accomplishments to established objectives • Explanation of slippage if objectives not met • Analysis/explanation of cost overruns or high unit costs  Grantees must immediately report “significant developments” 8

Reporting Before FFATA EDGAR Reporting

 “Significant Developments” • Problems, delays or adverse conditions that substantially impair ability to meet objective of award • Favorable developments that enable meeting time schedules and objectives sooner, at less cost, or produce more beneficial results than originally planned  Note: If grantees/subgrantees suspect materials misuse of funds, may need to report the issue to the awarding agency  Potential fraud, waste or abuse may need to be reported to Office of Inspector General 9

Reporting Before FFATA ARRA Reporting

• Section 1512 requires states to submit quarterly reports • Total amount received and expended • List of all projects or activities funded • Estimate of the number of jobs created and retained • www.federalreporting.gov

• www.recovery.gov

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Reporting Before FFATA ARRA Reporting

• SFSF reporting • Distribution of highly qualified teachers • Data systems tracking student achievement • • Improved standards and assessments Turnaround of failing schools • Some states received extension on certain indicators to December 31, 2013 • Old deadline: January 31, 2012 11

FFATA Reporting Background

 Reporting needed to • Assess grant performance/effectiveness • Provide public opportunity to review  Scope of data collected increase • Need for better risk management • New technologies  Reported information available through single, searchable website • USASpending.gov

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FFATA Reporting Federal Agency Reporting

• Federal agencies have long been required to report data on prime awards and prime awardees • Old: Federal Assistance Award Database System (FAADS), operated by Census Bureau • New: FAADS-Plus • Info updated daily • Posted on USASpending.gov

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FFATA Reporting Reporting by Prime Recipients

• • “Prime Recipients” – receive grant or contract directly from federal gov’t New layer of reporting: prime recipients to report data on first-tier subawards and executive compensation • “Subawards” includes subgrants and subcontracts • Prime recipients of grants and contracts, both mandatory and discretionary, awarded after October 1, 2010 14

FFATA Reporting Reporting by Prime Recipients

 Initial awards of $25,000 or more: • Prime recipients report first-tier subawards of $25,000 or more, and executive compensation, if conditions are met  Initial awards below $25,000 • FFATA does not apply • Subsequent grant modifications push award over $25k threshold, award is subject to requirements • Subsequent grant modifications reduce award under $25k threshold, continues to be subject to FFATA 15

FFATA Reporting Exempt from Reporting

• • • • • Contracts, purchase agreements, vendor agreements and consultant agreements for supplies, equipment, and services Grants under ARRA Federal awards to individuals Federal awards to entities with gross income of less than $300,000 Classified information 16

FFATA Reporting Prime Recipient Registration

• Prime recipients that receive grants must register in two systems: • FFATA Subaward Reporting System (FSRS) – to be displayed on USASpending.gov

• Accessible to federal employees and prime recipients • Central Contractor Registration System (CCR) • Entities that do business with the federal government • Links to Dun & Bradstreet (DUNS) 17

FFATA Reporting

• • First tier subawards • A grant or contract from a prime recipient to a subgrantee or subcontractor Second tier subawards • A subsequent subgrant or subcontract between the subawardee and another entity 18

FFATA Reporting - What

  Name of entity receiving award Amount of award   Subcontract/subcontract number Funding agency   NAICS code (contracts)/CFDA program number (grants) Program source  Award title descriptive of the purpose of the funding action   Location of the entity (congressional district) Place of performance (congressional district)   Unique identifier (DUNS) of the entity and its parent; and Total compensation and names of top five executives (same thresholds as for primes), if required 19

FFATA Reporting - When

• • Federal agencies, including ED, report prime award information to USASpending.gov on the 5th and 20th of each month Prime recipients must report first tier subaward information by the end of the following month in which the subaward was made 20

FFATA Reporting Executive Compensation

• Prime recipients must report the total compensation and names of 5 most highly compensated executives for both itself and first-tier subrecipients, if: • (1) more than 80% of annual gross revenue is from the federal government, and those annual revenues are greater than $25 million, and • (2) compensation information is not already available through reporting to the SEC 21

FFATA v. ARRA

 Under FFATA, expenditures are not required to be reported on USASpending.gov, only obligated subawards must be reported.

 Under FFATA, reporting is done on a rolling basis depending on when a subgrant is made, rather than reporting on a quarterly basis.  There are certain data elements required under ARRA that are not required under FFATA. For example, number and descriptions of jobs created and reporting requirements related to infrastructure projects. 22

FFATA vs. ARRA

• FFATA reporting is done through www.fsrs.gov

, while ARRA reporting should continue to be done through www.federalreporting.gov

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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  FSRS FAQs: https://www.fsrs.gov/#a-faqs 24

New Higher Ed Reporting Requirements/Proposals

 Gainful Employment: • Higher Ed programs must lead to gainful employment.

• Beginning on July 1, 2012, IHEs must report on previous students.

 Applies to: • All programs at for-profit institutions except program leading to baccalaureate degree in liberal arts offered since Jan. 09 if institution has been regionally credited since Oct. 07.

• Any program at a public or not-for-profit school that is not:  A program leading to a degree  A transfer program of at least 2 years 25

Gainful Employment Reporting

 Covered programs must show that: • At least 35% of their students are repaying their loans; or • That the annual loan payment does not exceed:  30% of a typical graduate’s discretionary income; or  12% of total income  An institution only has to meet one of the three requirements to remain eligible for federal aid.

 Institutions would only see sanctions if they fail to meet the criteria for three years out of four. 26

Gainful Employment Reporting

 The first year that programs could lose eligibility is 2015.

 Students evaluated in 3 rd and 4 th years after completion.

 Colleges can cap their measurements of student debt at the amount necessary to pay tuition, fees, textbooks and other college expenses in order to avoid counting debt amassed by students who borrow more than that amount and use some of it to pay living expenses while enrolled.

 ED will calculate Debt Measures, based on data reported by IHEs (34 CFR 668.6).

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Gainful Employment Reporting

• • • As of October 1, 2011, institutions must report information for the 2006-2007 award year to the extent that the information is available and for the 2007-2008 through the 2009-2010 award years.

Info for 2010-2011 Award Year was due last November Info for 2011-2012 Award Year due October 15, 2012 28

New Higher Ed Reporting Proposals

• • • April 12, 2012: ED released “Action Plan” Current law only requires that schools track graduation rates for full-time, first-time students.

Proposals to include part-time and other students who have previously attended postsecondary education.

• http://www.ed.gov/edblogs/ous/initiatives/ 29

This presentation is intended solely to provide general information and does not constitute legal advice. Attendance at the presentation or later review of these printed materials does not create an attorney-client 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.

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