2E. Head Start: Head Start Hot Topics

2E. Head Start: Head Start Hot Topics

CAPLAW 2014 National Training Conference

Thursday, June 19, 2014 8:30 am – 11:45 am

Sheraton New Orleans Hotel, New Orleans, LA

Handouts:

Tipton PowerPoint Slides Head Start Policy Council Governing Body Responsibilities OHS CLASSTM Reviewer Field Guide

Ann Linehan Acting Director Federal Office of Head Start [email protected] 202.205.8679

Brian Tipton, Esq. Managing Director The Private Client Law Group [email protected] 404.389.4864

Yasmina Vinci Executive Director National Head Start Association [email protected] 703.649.4222

HEAD START HOT TOPICS

R. BRIAN TIPTON, ESQ.

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CAPLAW 2014 NATIONAL TRAINING CONFERENCEJUNE 19, 2014



THE PRIVATE CLIENT LAW GROUP

75 FOURTEENTH STREET, SUITE 2200

ATLANTA, GEORGIA 30309

TELEPHONE: (404) 974‐3484

FACSIMILE: (404) 974‐3486

E‐MAIL: [email protected]

JUNE 19, 2014 R. BRIAN TIPTON, ESQ. 1

AGENDA• CHANGING COMPLIANCE EXPECTATIONS

• COMPLIANCE VERSUS "COMPLIANCE PLUS"

• COMPLIANCE PLUS IN HEAD START

• RECOMPETITION AND MONITORING

• TRANSITION TO FIVE YEAR GRANTS

• GOVERNANCE

• FISCAL MANAGEMENT AND AUDITS (EFFECTS OF OMB SUPER CIRCULAR)

• RELATED ISSUES

• RECENT ADMINISTRATIVE DECISIONS

• QUESTION & ANSWER PERIOD

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COMPLIANCE V. COMPLIANCE PLUS

• COMPLIANCE V. "COMPLIANCE PLUS"

• COMPLIANCE = VERIFIES ADHERENCE TO LEGALLY REQUIRED MINIMUM STANDARDS (MORE OBJECTIVE)

• "COMPLIANCE PLUS" (OR "BEYOND COMPLIANCE") = LOOKS FOR ADHERENCE TO BEST PRACTICES, "EXPECTATIONS", AND OTHER ELEMENTS APART FROM MINIMUM LEGAL REQUIREMENTS (MORE SUBJECTIVE)

• THINK ABOUT GOOGLE V. GOOGLE+

• IMPLICATIONS (QUESTIONS RAISED)

• IS COMPLIANCE ALONE ENOUGH?

• IS “COMPLIANCE PLUS” (OR "BEYOND COMPLIANCE") THE NEW DE FACTO STANDARD?

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COMPLIANCE V. COMPLIANCE PLUS

INTERNAL AND VOLUNTARY

OUTSIDE EXPECTATIONS

GOVERNMENT AND FUNDING

SOURCES

• THREE SOURCES OF "STANDARDS"

• GOVERNMENT AND FUNDING SOURCE REQUIREMENTS

• INTERNAL AND OTHER VOLUNTARY STANDARDS

• OUTSIDE EXPECTATIONS

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RECOMPETITION: OVERVIEW• 2007 HEAD START REAUTHORIZATION INCLUDED PROVISIONS FOR "DESIGNATION RENEWAL" AND RECOMPETITION

• AGENCIES "DELIVERING A HIGH‐QUALITY AND COMPREHENSIVE HEAD START PROGRAM" ENTITLED TO REDESIGNATION ("DESIGNATION RENEWAL") AS HEAD START AGENCIES FOR 5 YEARS [42 U.S.C. §9836(c)]

• OTHER AGENCIES SUBJECT TO OPEN RECOMPETITION [42 U.S.C. §9836(d)]

• IMPLEMENTED THROUGH REGULATIONS ISSUED NOV. 2011

• SEVEN TRIGGERS FOR RECOMPETITION (45 C.F.R. PT. 1307)

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RECOMPETITION: CLASS

• CLASS REALLY TWO STANDARDS

• ABSOLUTE STANDARDS SET FOR EACH DOMAIN

• EMOTIONAL SUPPORT = 4

• CLASSROOM ORGANIZATION = 3

• INSTRUCTIONAL SUPPORT = 2

• RELATIVE STANDARD

• BOTTOM 10% ANY DOMAIN

• REPLACEMENT FOR 25% MINIMUM RECOMPETITION IN ORIGINAL PROPOSAL FOR DESIGNATION RENEWAL SYSTEM

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RECOMPETITION: CLASS

DOMAIN PART 1307STANDARD

2013 MEAN(AVERAGE)

2013 MEDIAN(50%)

2013LOWEST10%

2013MIN.

EMOTIONALSUPPORT

4 5.99 5.99 5.5417 4.99

CLASSROOMORGANIZATION

3 5.63 5.62 5.0556 4.15

INSTRUCTIONALSUPPORT

2 2.72 2.71 2.1061 1.33

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RECOMPETITION: TRENDS• IMPORTANCE OF SINGLE DEFICIENCY TRIGGER RECONSIDERED

• LESS SIGNIFICANT GOING FORWARD?

• INITIAL RECOMPETITION POOL

• MAJORITY (ALMOST 60%) HAD SINGLE DEFICIENCY

• APPROXIMATELY 20% HAD TWO DEFICIENCIES

• SIGNIFICANT MINORITY ALSO HAD CLASS ISSUES

• SECOND COHORT

• APPROXIMATELY 39% BECAUSE OF CLASS

• BUT MAJORITY STILL DEFICIENCIES

• IMMEDIATE OR INITIAL DEFICIENCY = 34%

• CONTINUING NONCOMPLIANCE = 27%

• THIRD COHORT HAS MAJORITY RECOMPETING BECAUSE OF CLASS

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RECOMPETITION: THIRD COHORT

CLASS51%

UNCORRECTED NONCOMPLIANCES

10%

TRIENNIAL REVIEWS11%

SELF‐REPORTS15%

OTHER REVIEWS13%

IMMEDIATE DEFICIENCIES[PERCENTAGE]

2014 RECOMPETITION POOL



MONITORING• MONITORING HAS BEEN EVOLVING

• SYSTEMS BASED (REMEMBER PRISM?)

• USING MANY OF THE SAME ELEMENTS ALREADY USED BUT MORE INTEGRATION OF DATA ELEMENTS

• NOT JUST MONITORING PROTOCOL AND TRIENNIAL REVIEW

• INCORPORATING OTHER INFORMATION AND PROCESSES (E.G., RISK MANAGEMENT PROCESS)

• ADDITIONAL FOCUS ON CHILD OUTCOMES AND SCHOOL READINESS

• MONITORING TOOL CHANGING

• MORE FOCUSED (CONDENSED)

• LESS OF CHECKLIST APPROACH

• ON‐SITE NOW TENDS FOCUS ON "HIGH VALUE" AREAS

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MONITORING: TRENDS• RECENT ISSUES CAN BE GROUPED INTO A FEW BROAD CATEGORIES

• FACILITIES/HEALTH & SAFETY

• GOVERNANCE

• MONITORING AND REPORTING

• HUMAN RESOURCES

• FISCAL OPERATIONS

• ERSEA

• MONITORING INSTRUMENT TENDS FOCUS ON THESE AND OTHER "HIGH VALUE" AREAS

• MAY WANT TO GIVE ADDITIONAL ATTENTION WHEN PREPARING FOR REVIEWS AND DESIGNING COMPLIANCE/ON‐GOING MONITORING PLANS

• CAVEAT: PROGRAMS ARE EXPECTED TO COMPLY WITH ALL HEAD START REQUIREMENTS EVEN IF NOT INCLUDED IN MONITORING INSTRUMENT

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MONITORING: TRENDS

11

37

159 9 4

19

51

1010 12

7

42

24

58 3

20

20

40

60

80

100

120

PDM SAF MON GOV HEAN ERSEA FIS

DEFICIENCIES BY AREA

FY 2010 FY 2011 FY 2012




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CHANGES: 5‐YEAR GRANTS

• NEW REQUIREMENTS AS PART OF TRANSITION TO 5‐YEAR GRANT CYCLES (REVISED ACF‐IM‐HS‐13‐02)

• GOVERNANCE

• "The grantee governing body must conduct a governance and leadership capacity screening within 60 calendar days of the start of the project period."

• "The governing body must certify that the . . . screening was conducted and a training plan was developed. The certification must be submitted to OHS in the Head Start Enterprise System (HSES) within 75 calendar days of the start of the project period.“

• ALSO SEE INFORMATION MEMORANDUM ACF‐IM‐HS‐14‐02 (MARCH 19, 2014)

• DISCUSSES FEDERAL OVERSIGHT OF 5 YEAR GRANTS

• KEY AREA: EFFECTIVE GOVERNANCE AND LEADERSHIP

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• NEW REQUIREMENTS AS PART OF TRANSITION TO 5‐YEAR GRANT CYCLES (REVISED ACF‐IM‐HS‐13‐02)

• HEALTH AND SAFETY

• "Each grantee must complete a screening of the health and safety environment of each center and/or family child care home where services are provided within 45 calendar days of the start of the program/school year, or within 45 calendar days of the start of the five year project period when the five year project period begins during the program/school year."

• "The grantee governing body must submit to OHS the signed certification of compliance . . . within 75 calendar days of the start of the program or school year, or within 75 calendar days of the start of the five year project period when the five year project period begins during the program or school year."

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• NEW REQUIREMENTS AS PART OF TRANSITION TO 5‐YEAR GRANT CYCLES

• SCHOOL READINESS

• "Grantee must participate in individual school readiness progress meetings with the OHS regional office."

• AUDIT WEBINAR:

• "Grantee must participate in an OHS‐sponsored single audit webinar within six months of the start of the project period."

• SEE REVISED INFORMATION MEMORANDUM ACF‐IM‐HS‐13‐02 (JULY 1, 2013)

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GOVERNANCE

• WHAT IS GOVERNANCE?

• RESPONSIBILITY FOR LEGAL AND GENERAL OVERSIGHT OF A CORPORATION AS OPPOSED TO RESPONSIBILITY FOR DAILY OPERATIONS

• GOVERNANCE IS DIFFERENT THAN MANAGEMENT

• WHY THE EMPHASIS ON HEAD START GOVERNANCE?

• GOVERNANCE “TOUCHES” ALL OTHER ASPECTS OF AGENCY AND PROGRAM

• SEEN AS LINCHPIN FOR COMPLIANCE AND PERFORMANCE (EFFECTIVENESS)

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GOVERNANCE

GOVERNANCE

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GOVERNANCE• COMMON COMPLIANCE ISSUES RELATED TO HEAD START GOVERNANCE

• GOVERNING BODY COMPOSITION

• FAILURE TO EXERCISE GOVERNANCE RESPONSIBILITIES

• LACK OF OVERSIGHT OVER EXECUTIVE DIRECTOR

• REPORTING TO GOVERNING BOARDS AND POLICY COUNCILS (E.G., MONTHLY REPORTS)

• ANNUAL REPORT TO PUBLIC

• BOARD AND POLICY COUNCIL TRAINING

• POOR RELATIONSHIP BETWEEN GOVERNING BOARD AND POLICY COUNCIL

• RANGE OF GOVERNANCE‐RELATED ISSUES FROM ALMOST MINISTERIAL TO CORE GOVERNANCE FUNCTIONS

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GOVERNANCE• OHS HAS DEVELOPED GOVERNANCE "SCREENER" AS PART OF TRANSITION TO 5‐YEAR GRANTS

• LOOKS AT FOUR AREAS

• COMPOSITION

• ROLES AND RESPONSIBILITIES

• TRAINING AND TECHNICAL ASSISTANCE

• REPORTING

• SCREENER IMPLICATES AREAS CHANGED UNDER 2007 HEAD START ACT AS WELL AS RECENT COMPLIANCE FINDINGS

• CERTIFICATION OF SCREENING AND DEVELOPMENT OF TRAINING PLAN BASED ON RESULTS

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GOVERNANCE• OHS HAS ALSO DEVELOPED “GOVERNANCE READINESS TOOL”

• INTENDED TO HELP DEVELOP T&TA PLAN

• SET OF 15 INDICATORS IN 6 CATEGORIES

• STRUCTURAL: BYLAWS, MAJOR POLICIES, MEASURING GOVERNING BODY PERFORMANCE, MEMBERSHIP, & ORIENTATION AND TRAINING

• FIDUCIARY: FISCAL OVERSIGHT, EXTERNAL AUDIT, & MANAGING FEDERAL FUNDS

• STRATEGIC DIRECTION: STRATEGIC PLANNING

• LEADERSHIP: OVERSIGHT OF ORGANIZATIONAL PERFORMANCE & RELATIONSHIP WITH EXECUTIVE DIRECTOR

• COMMUNITY RELATIONS: COMMUNITY PARTNERS AND STAKEHOLDERS & COMMUNICATIONS STRATEGIES

• DECISION‐MAKING: CONSTITUENT VOICE & INFORMED AND INCLUSIVE PROCESS




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GOVERNANCE• MORE RECENTLY, OHS RELEASED A GOVERNING BODY CERTIFICATION TRAINING MODULE

• AVAILABLE ONLINE THROUGH ECLKC

• APPROXIMATELY 2 HOURS LONG

• ACTUALLY CAN PRINT CERTIFICATE OF COMPLETION AT END

• OVERVIEW OF HEAD START WITH BRIEF HISTORY AND DISCUSSION OF CURRENT GOVERNANCE REQUIREMENTS

• INCLUDES STRUCTURES, LEGAL RESPONSIBILITIES, FISCAL RESPONSIBILITIES, & LINKS TO ADDITIONAL RESOURCES

• CAVEATS

• EXPERT BOARD MEMBERS ARE NOT REPLACEMENTS FOR OUTSIDE (OR INTERNAL) PROFESSIONALS

• AN INTRODUCTION BUT ADDITIONAL, ON‐GOING TRAINING NECESSARY (BASED ON AGENCY’S DETERMINED NEEDS AND PLAN)



GOVERNANCE

• TONE COMES FROM THE TOP

• BOTH MANAGEMENT AND GOVERNING BODY (AND POLICY COUNCIL) MUST BE COMMITTED TO ORGANIZATIONAL COMPLIANCE

• SET EXAMPLE

• TAKE AFFIRMATIVE ACTIONS WITHIN SPHERE OF DUTIES

• HOWEVER, ROLES OF MANAGEMENT AND GOVERNING BODY (AND POLICY COUNCIL) DIFFER BASED ON DISTINCTION BETWEEN MANAGEMENT AND GOVERNANCE FUNCTIONS

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GOVERNANCE• GOVERNANCE IS RESPONSIBILITY FOR GENERAL OVERSIGHT AND DIRECTION OF THE ORGANIZATION

• ADOPTING APPROPRIATE POLICIES AND PROCEDURES TO ENSURE ORGANIZATIONAL COMPLIANCE

• ADOPT BUDGETS AND MONITOR PERFORMANCE (FINANCE COMMITTEE)

• OVERSIGHT OF INDEPENDENT AUDIT FUNCTION (AUDIT COMMITTEE)

• MEMBERS OWE DUTY OF CARE TO ACT IN GOOD FAITH AND WITH SAME LEVEL OF CARE AS REASONABLY PRUDENT PERSON

• STAY INFORMED

• ATTEND MEETINGS REGULARLY

• MAKE DECISIONS ONLY WHEN HAVE SUFFICIENT INFORMATION AND UNDERSTANDING

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GOVERNANCE• AGENCY MUST SHARE CERTAIN INFORMATION WITH GOVERNING BODY AND POLICY COUNCIL [42 U.S.C. § 9837(d)(2)]

• MONTHLY FINANCIAL STATEMENTS (INCLUDING CREDIT CARD USE)

• MONTHLY PROGRAM INFORMATION SUMMARIES

• ENROLLMENT REPORTS

• MONTHLY USDA MEAL AND SNACK REPORTS

• FINANCIAL AUDITS

• ANNUAL SELF‐ASSESSMENT (WITH FINDINGS)

• COMMUNITY NEEDS ASSESSMENT

• "COMMUNICATION AND GUIDANCE" FROM HHS

• PROGRAM INFORMATION REPORTS

• TRAINING AND TECHNICAL ASSISTANCE REQUIRED TO HELP GOVERNING BODY AND POLICY COUNCIL UNDERSTAND INFORMATION AND THEIR RESPONSIBILITIES

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GOVERNANCE


GOVERNINGBODY

POLICY COUNCILAGENCY / MANAGEMENT


GOVERNANCE• PUBLIC REPORTING REQUIREMENTS [42 U.S.C. § 9839(a)(2)]

• HEAD START AGENCIES MUST MAKE AVAILABLE TO PUBLIC AT LEAST ONCE EACH FISCAL YEAR A REPORT CONTAINING CERTAIN INFORMATION:

• TOTAL PUBLIC AND PRIVATE FUNDS RECEIVED AND SOURCES

• BUDGET EXPENDITURES AND PROPOSED BUDGET

• TOTAL NUMBERS SERVED, AVERAGE ENROLLMENT, AND PERCENTAGE OF ELIGIBLE CHILDREN SERVED

• RESULTS OF MOST RECENT FEDERAL REVIEW AND FINANCIAL AUDIT

• EFFORTS TO PREPARE CHILDREN FOR KINDERGARTEN

• "ANY OTHER INFORMATION REQUIRED BY" HHS

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GOVERNANCE

• 2007 ACT [42 U.S.C. § 9837(c)] REQUIRES FORMAL GOVERNANCE STRUCTURE CONSISTING OF GOVERNING BODY AND POLICY COUNCIL, EACH WITH DEFINED RESPONSIBILITIES

• GOVERNING BODY HAS GENERAL "LEGAL AND FISCAL RESPONSIBILITY" FOR GRANTEE AGENCY [42 U.S.C. § 9837(c)(1)(A)]

• POLICY COUNCIL HAS GENERAL RESPONSIBILITY FOR PROGRAM "DIRECTION" [42 U.S.C. § 9837(c)(2)(A)]

• COMPARE TO "SHARED GOVERNANCE" CONCEPT PRIOR TO 2007 HEAD START ACT

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GOVERNANCE• NOT NECESSARILY PARALLEL PROVISIONS IN EXISTING REGULATIONS & 2007 HEAD START ACT; UNCERTAINTY REMAINS (EXAMPLE: PERSONNEL DECISIONS)

• REGULATIONS

• HEAD START DIRECTOR: BOARD GENERAL RESPONSIBILITY & REQUIRED BOARD & POLICY COUNCIL APPROVAL

• HEAD START STAFF: BOARD GENERAL RESPONSIBILITY & REQUIRE POLICY COUNCIL APPROVAL

• 2007 ACT

• BOARD: APPROVE PERSONNEL POLICIES & PROCEDURES, INCLUDING HIRING, EVALUATION, COMPENSATION, AND TERMINATION OF EXECUTIVE DIR., HEAD START DIR., H.R. DIR., CFO, AND EQUIVALENT AGENCY POSITIONS [SEC. (1)(E)(iv)(IX)]

• POLICY COUNCIL: APPROVE & SUBMIT PROGRAM PERSONNEL POLICIES & DECISIONS ABOUT EMPLOYMENT OF PROGRAM STAFF, CONSISTENT WITH SEC. (1)(E)(iv)(IX), INCLUDING STANDARDS OF CONDUCT & CRITERIA FOR EMPLOYMENT & DISMISSAL OF PROGRAM STAFF

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GOVERNANCE• POOR WORKING RELATIONSHIPS BETWEEN BOARD AND POLICY COUNCIL OFTEN RELATED TO LACK OF UNDERSTANDING OF ROLES & RESPONSIBILITIES

• MAY ALSO BE RESULT OF INCOMPATIBLE PERSONALITIES

• PERSONALITY CLASHES AND OTHER WORKING RELATIONSHIP ISSUES OFTEN LINKED TO "PROBLEM MEMBERS"

• IDENTIFYING THE TYPE OF PROBLEM BOARD MEMBER

• IDENTIFYING THE UNDERLYING CAUSE OF THE PROBLEM

• CRAFTING THE SOLUTION

• CAREFUL SELECTION OF MEMBERS (AND APPROPRIATE PROVISIONS FOR REMOVAL) ESSENTIAL COMPONENTS FOR ENSURING EFFECTIVE GOVERNANCE

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FISCAL ISSUES• CONCERN OVER FISCAL MANAGEMENT‐RELATED ISSUES REFLECTED IN NEW 5‐YEAR GRANT REQUIREMENT FOR PARTICIPATION IN AUDIT WEBINAR

• WEBINAR IN 2012 FOR AUDIT COMMUNITY

• FIRST WEBINAR FOR GRANTEES IN 2013

• PRIMARILY CONCERNS ABOUT AUDIT QUALITY

• FINANCIAL (AND OTHER) REPORTING ALSO CONTINUE TO BE ISSUE/AREA OF CONCERN

• INTERNAL

• PUBLIC

• GOVERNMENT

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REPORTING AND AUDITS• TWO RECENT INFORMATION MEMORANDA ADDRESS ISSUES RELATED TO AUDITS AND REPORTING

• 2012 INFORMATION MEMORANDUM ABOUT SELECTING AN EXTERNAL AUDITOR FOR A‐133 AUDITS [ACF‐IM‐HS‐12‐01 (FEB. 10, 2012)]

• PLAN CAREFULLY

• COMMUNICATE AUDIT REQUIREMENTS AND SOLICIT PROPOSALS

• EVALUATE PROPOSALS TO SELECT THE AUDITOR

• DOCUMENT EXPECTATIONS

• ENSURE A COMPLETE AND TIMELY AUDIT

• MORE RECENT INFORMATION MEMORANDUM OSTENSIBLY DISCUSSES REVISED OMB AUDIT SUPPLEMENT [ACF‐IM‐HS‐14‐01 (JAN. 9, 2014)]

• REMINDER ABOUT TRAINING ("EFFECTIVELY EDUCATE") BOARD

• REMINDER ABOUT BOARD INVOLVEMENT IN AUDITOR SELECTION

R. BRIAN TIPTON, ESQ. 30


CHANGES: OMB SUPER CIRCULAR• OMB HAS PUBLISHED NEW UNIFORM GOVERNMENT‐WIDE GUIDANCE FOR GRANTS MANAGEMENT

• CONSOLIDATES AND SUPERSEDES EXISTING MAJOR CIRCULARS (ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDITS)

• "SUPER CIRCULAR" OR "OMNICIRCULAR“

• SEE 78 FED. REG. 78589 (DECEMBER 26, 2013)

• EFFECTIVE DATE

• AGENCIES MUST PROMULGATE REGULATIONS TO APPLY THE SUPER CIRCULAR TO GRANTEES

• IN EFFECT BY DECEMBER 26, 2014, FOR NEW AWARDS AND ADDITIONAL FUNDING FOR EXISTING AWARDS

• AUDIT REQUIREMENTS APPLY FOR FISCAL YEARS BEGINNING ON OR AFTER DECEMBER 26, 2014




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AUDITS: SUPER CIRCULAR• SINGLE AUDIT REQUIREMENTS

• CURRENTLY OMB CIRCULAR A‐133 IMPLEMENTS REQUIREMENTS OF SINGLE AUDIT ACT

• CURRENT THRESHOLD = $500,000

• SUPER CIRCULAR RAISES AUDIT THRESHOLD (§ 501)

• RAISES SINGLE AUDIT THRESHOLD FROM $500,000 TO $750,000

• REJECTED ORIGINAL THREE‐TIERED AUDIT STRUCTURE FROM 2012 ADVANCE NOTICE

• EFFECT OF INCREASING THRESHOLD

• RETAINS SINGLE AUDIT COVERAGE FOR OVER 99% OF FEDERAL FUNDING CURRENTLY SUBJECT TO ACT

• RETAINS COVERAGE FOR APPROXIMATELY 87% OF ENTITIES CURRENTLY COVERED BY ACT


AUDITS: SUPER CIRCULAR• SUPER CIRCULAR ALSO CHANGES RULES FOR MAJOR PROGRAM DETERMINATIONS AND PERCENTAGE OF COVERAGE (§ 518)

• INCREASES TYPE A/B THRESHOLD TO $750,000 (SAME AS AUDIT THRESHOLD)

• PERCENTAGE OF COVERAGE LOWER

• DECREASES TO 20% (FROM 25%) FOR LOW‐RISK AUDITEE

• DECREASES TO 40% (FROM 50%) FOR NON‐LOW‐RISK

• REDUCES HIGH‐RISK TYPE B PROGRAMS TESTED AS MAJOR PROGRAMS TO 25% OF LOW‐RISK TYPE A PROGRAMS

• THRESHOLD FOR REPORTING FINDINGS FOR QUESTIONED COSTS INCREASES TO $25,000 (§ 516)




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PERSONNEL COSTS• ANOTHER RECENT AREA OF CONCERN INVOLVES PERSONNEL COSTS

• ISSUES WITH DOCUMENTATION SUPPORTING PERSONNEL COST ALLOCATION

• NONPROFITS NEED "PERSONNEL ACTIVITY REPORTS" OR APPROVED ALTERNATIVE METHOD FOR DISTRIBUTING PERSONNEL COSTS

• 2 C.F.R. PT. 230, APP. B ¶ 8 [NONPROFITS]

• ALSO NEED ADDITIONAL DOCUMENTATION COMPLYING WITH FLSA FOR NON‐EXEMPT EMPLOYEES [2 C.F.R. PT. 230, APP. B ¶ 8(m)(3)]

• DIFFERENT STANDARDS FOR DIFFERENT TYPES OF RECIPIENTS

• MAY NOT BE SO SIGNIFICANT GOING FORWARD

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PERSONNEL COSTS: SUPER CIRCULAR• COMPENSATION (§ 430)

• CHARGES MUST BE BASED ON RECORDS THAT ACCURATELY REFLECT WORK PERFORMED

• SYSTEM OF INTERNAL CONTROLS PROVIDING REASONABLE ASSURANCE ACCURATE, ALLOWABLE & PROPERLY ALLOCATED CHARGES

• INCORPORATED INTO ENTITY'S OFFICIAL RECORDS

• REASONABLY REFLECTS TOTAL ACTIVITY FOR WHICH EMPLOYEE COMPENSATED

• INCLUDES FEDERALLY ASSISTED AND NON‐FEDERALLY COMPENSATED ACTIVITIES

• COMPLIES WITH ENTITY'S ESTABLISHED ACCOUNTING POLICIES

• SUPPORTS DISTRIBUTION OF EMPLOYEE'S ACTIVITIES OR COST OBJECTIVES

• MAY USE BUDGET ESTIMATES IF REASONABLE APPROXIMATION AND AFTER‐THE‐FACT RECONCILIATION & ADJUSTMENT




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PERSONNEL COSTS: SUPER CIRCULAR

• COMPENSATION (§ 430)

• GOVERNMENTS MAY USE APPROVED SUBSTITUTE SYSTEMS THAT INCLUDE SAMPLING

• BLENDED FUNDING MAY USE PERFORMANCE‐BASED METRICS IF APPROVED IN ADVANCE BY ALL AWARDING AGENCIES

• DO NOT NEED TO USE PERSONNEL ACTIVITY REPORTS (BUT MAY BE REQUIRED IF SYSTEM DOES NOT MEET § 430 STANDARDS)

• DO NOT FORGET ABOUT FLSA COMPLIANCE (NO CHANGE)


FISCAL ISSUES• CHILD CARE PARTNERSHIP INITIATIVE HAS RAISED CONCERNS ABOUT

COST ALLOCATION

• OHS HAS CREATED RESOURCE PAGE ON ECLKC: http://eclkc.ohs.acf.hhs.gov/hslc/grants/ehs‐ccp/index.html

• "Grantees will be required to have budgets that reflect the multiple funding

sources, and cost allocation plans to ensure that each funding source is used for

allowable purposes without duplicate payment." (IMPLEMENTATION FAQ #6)

• COST ALLOCATION VIDEO: http://eclkc.ohs.acf.hhs.gov/hslc/tta‐

system/operations/center/mgmt‐matters.html

• WITHDRAWN INFORMATION MEMORANDUM ACYF‐IM‐HS‐01‐13

(NOV. 16, 2001)?

• ADDRESSED BUDGETING FOR PARTNERSHIPS BETWEEN CHILD CARE & HEAD

START




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OTHER ISSUES• ADDITIONAL FOCUS ON ELIGIBILITY DETERMINATIONS IN RECENT YEARS

• PROPOSED REVISIONS TO ERSEA REGULATIONS

• NOTICE OF PROPOSED RULEMAKING PUBLISHED MARCH 18, 2011 (76 FED. REG. 14841)

• NO FINAL REGULATIONS YET

• TWO REASONS FOR REVISIONS

• CODIFY STATUTORY ELIGIBILITY REQUIREMENTS

• ADDRESS ELIGIBILITY AND ENROLLMENT FRAUD CONCERNS FROM GAO INVESTIGATION WITH

NEW REGULATIONS FOR ELIGIBILITY DETERMINATIONS AND RECORD‐KEEPING

• STILL PENDING?

• NEW INFORMATION MEMORANDUM ACF‐IM‐HS‐14‐03 (JUNE 4, 2014) ABOUT

SAME‐SEX SPOUSES: http://eclkc.ohs.acf.hhs.gov/hslc/standards/im/2014/resour_im_003_06022014.html


RECENT ADMINISTRATIVE DECISIONS

• WILLIAM SMITH SR. TRI‐COUNTY CHILD DEVELOPMENT COUNCIL, INC., DAB NO. 2549 (DEC. 13, 2013)

• COMMUNITY ACTION PARTNERSHIP—HUNTSVILLE/MADISON AND LIMESTONE COUNTIES, INC., DAB NO. 2557 (FEB. 2014)

• AVOYELLES PROGRESS ACTION COMMITTEE, INC., DAB NO. 2559 (MARCH 5, 2014)

• JACKSONVILLE URBAN LEAGUE, DAB NO. 2565 (MARCH 25, 2014)




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RECENT ADMINISTRATIVE DECISIONS• WILLIAM SMITH SR. TRI‐COUNTY CHILD DEVELOPMENT COUNCIL, INC., DAB NO. 2549 (DEC. 13, 2013)

• DISALLOWANCE OF FUNDS AWARDED FOR VANS BUT USED FOR SALARIES AND FRINGE BENEFITS

• DAB REJECTED GRANTEE’S ARGUMENTS

• FOUND ACF DID NOT ABUSE DISCRETION IN REFUSING TO GRANT RETROACTIVE APPROVAL OF RE‐BUDGETING BECAUSE GRANTEE DID NOT MEET REQUIREMENTS FOR PERSONNEL ACTIVITY REPORTS (AND, THUS, SALARY AND FRINGE BENEFIT COSTS WERE NOT ALLOWABLE)

• FOUND GRANTEE NOT ENTITLED TO OFFSET BECAUSE ADDITIONAL COSTS CLAIMED WERE NOT ALLOCABLE IN THAT NOT INCURRED UNTIL AFTER GRANT PERIOD

• DISALLOWANCE UPHELD



• COMMUNITY ACTION PARTNERSHIP—HUNTSVILLE/MADISON AND LIMESTONE COUNTIES, INC., DAB NO. 2557 (FEB. 4, 2014)

• DISALLOWANCE OF FUNDS FOR REPAIR AND RENOVATION OF PORTABLE CLASSROOMS

• ALLEGED VIOLATION OF 45 C.F.R. § 74.43 PROHIBITING AWARD OF CONTRACT TO CONTRACTOR THAT DEVELOPED SPECIFICATIONS

• DAB FOUND THAT CONTRACTOR’S INVOLVEMENT WAS MORE THAN MINIMAL (AS ARGUED BY AGENCY) AND WAS VIOLATION OF 74.43

• DISALLOWANCE UPHELD




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• AVOYELLES PROGRESS ACTION COMMITTEE, INC., DAB NO. 2559 (MARCH 5, 2014)

• TERMINATION OF HEAD START GRANT FOR FAILURE TO TIMELY CORRECT DEFICIENCY (INITIALLY NONCOMPLIANCE)

• IMPROPER CHARGING OF MANAGEMENT SALARIES TO HEAD START

• NOT BASED ON AFTER‐THE‐FACT DETERMINATION OR PERSONNEL ACTIVITY REPORTS

• BASED ON PRE‐SET PAYROLL ALLOCATIONS

• DAB REJECTED ARGUMENT ABOUT INADEQUATE T&TA REGARDING DEVELOPMENT OF ACCEPTABLE COST ALLOCATION PLAN

• SUMMARY DISPOSITION IN FAVOR OF GOVERNMENT


RECENT ADMINISTRATIVE DECISIONS• JACKSONVILLE URBAN LEAGUE, DAB NO. 2565 (MARCH 25, 2014)

• APPEAL OF SUMMARY SUSPENSION (CONTINUED FOLLOWING SHOW CAUSE MEETING)

• MULTIPLE ALLEGED INCIDENTS INVOLVING VIOLATIONS OF CHILD HEALTH AND SAFETY REQUIREMENTS AND STANDARDS OF CONDUCT

• CHILD SUPERVISION AND RELEASE

• INAPPROPRIATE DISCIPLINE

• SUSPENSION UPHELD

• DAB CONCLUDED SERIOUS RISK TO HEALTH AND SAFETY JUSTIFYING SUSPENSION

• DAB ALSO FOUND GRANTEE FAILED PRODUCE SUFFICIENT EVIDENCE OF CORRECTION AT SHOW CAUSE MEETING




CAPLAW 2014

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QUESTION & ANSWER PERIOD

• WHAT ARE YOUR QUESTIONS?

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CONTACT INFORMATION


THE PRIVATE CLIENT LAW GROUP

75 FOURTEENTH STREET, SUITE 2200

ATLANTA, GEORGIA 30309

TELEPHONE: (404) 974‐3484

FACSIMILE: (404) 974‐3486

E‐MAIL: [email protected]

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Head Start Policy Council and Governing Body Responsibilities

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AREA GOVERNING BODY POLICY COUNCIL REGULATION

GENERAL LEGALLY AND FINANCIALLY RESPONSIBLE FOR ADMINISTERING AND OVERSEEING HEAD START PROGRAMS, INCLUDING SAFEGUARDING OF FEDERAL FUNDS

RESPONSIBILITY FOR PROGRAM DIRECTION

SHARED GOVERNANCE STRUCTURE OUTLINED IN APPENDIX A TO 45 C.F.R. § 1304.50

GOVERNANCE ADOPT PRACTICES THAT ASSURE ACTIVE, INDEPENDENT AND INFORMED GOVERNANCE OF AGENCY

WRITTEN POLICIES DEFINING ROLE OF BOARD MEMBERS

BOARD = GEN. & APPROVAL

SHARED DECISION-MAKING PROCEDURES


PC = APPROVAL

DELEGATES SELECT DELEGATE AGENCIES AND THEIR SERVICE AREAS

APPROVE & SUBMIT RECOMMENDATIONS ON SELECTION OF DELEGATE AGENCIES AND THEIR SERVICE AREAS


PC = APPROVAL

ERSEA ESTABLISH PROCEDURES AND CRITERIA FOR RECRUITMENT, SELECTION, AND ENROLLMENT

APPROVE & SUBMIT PROGRAM RECRUITMENT, SELECTION, AND ENROLLMENT PRIORITIES

BOARD = GEN.

PC = APPROVAL


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COMPLIANCE ENSURE COMPLIANCE WITH FEDERAL, AND APPLICABLE STATE AND LOCAL, LAWS AND REGULATIONS

INTERNAL CONTROLS TO SAFEGUARD FEDERAL FUNDS

BOARD = GEN.

CONDUCT STANDARDS

ADOPT & PERIODICALLY UPDATE WRITTEN STANDARDS OF CONDUCT

SEE PERSONNEL DISCUSSION SEE PERSONNEL DISCUSSION

FINANCIAL APPROVE FINANCIAL MANAGEMENT, ACCOUNTING & REPORTING POLICIES, INCLUDING:

A. APPROVE MAJOR AGENCY FINANCIAL EXPENDITURES

B. ANNUALLY APPROVE AGENCY OPERATING BUDGET

C. SELECT AUDITOR

D. MONITOR CORRECTION OF AUDIT FINDINGS AND RELATED ACTIONS

APPROVE & SUBMIT BUDGET PLANNING FOR PROGRAM EXPENDITURES, INCLUDING POLICIES FOR REIMBURSEMENT & PARTICIPATION IN POLICY COUNCIL ACTIVITIES

INTERNAL CONTROLS

BOARD = GEN.

ANNUAL AUDIT

BOARD = GEN.

FUNDING REVIEW APPLICATIONS FOR HEAD START FUNDING AND AMENDMENTS

APPROVE & SUBMIT APPLICATIONS FOR PROGRAM FUNDING AND AMENDMENTS

BOARD = LEGAL

PC = APPROVAL


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MONITORING REVIEW MONITORING RESULTS & FOLLOW-UP ACTIVITIES

PARENT ACTIVITIES

APPROVE & SUBMIT ACTIVITIES TO SUPPORT PARENT INVOLVEMENT IN SUPPORTING OPERATIONS, INCLUDING RESPONSIVENESS TO COMMUNITY NEEDS

POLICY COUNCIL REIMBURSEMENT

BOARD = GEN.

PC = APPROVAL

PLANNING FULLY PARTICIPATE IN DEVELOPMENT, PLANNING, AND EVALUATION OF HEAD START PROGRAM

GENERAL RESPONSIBILITIES FOR PROGRAM DIRECTION INCLUDE DESIGN & OPERATION PLUS LONG & SHORT-TERM PLANNING GOALS & OBJECTIVES


PC = APPROVAL

POLICIES REVIEW AND APPROVE ALL MAJOR AGENCY POLICIES, INCLUDING:

A. ANNUAL SELF-ASSESSMENT

B. FINANCIAL AUDIT

C. AGENCY PROGRESS IN CARRYING OUT PROGRAMMATIC & FISCAL PROVISIONS IN APPLICATION,

SEE PERSONNEL DISCUSSION SELF-ASSESSMENT

BOARD = GEN.

PC = APPROVAL

INTERNAL CONTROLS

BOARD = GEN.


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INCLUDING IMPLEMENTING CORRECTIVE ACTIONS

D. PERSONNEL POLICIES (HIRING, EVALUATION, TERMINATION, AND COMPENSATION) FOR AGENCY EMPLOYEES

ANNUAL AUDIT

BOARD = GEN.

PC BYLAWS APPROVE & SUBMIT BYLAWS

PC ELECTION DEVELOP SELECTION PROCEDURES FOR POLICY COUNCIL MEMBERS, CONSISTENT WITH ELECTION REQUIREMENT

APPROVE & SUBMIT PROCEDURES FOR ELECTION OF POLICY COUNCIL


PC = APPROVAL

PERSONNEL APPROVE PERSONNEL POLICIES & PROCEDURES, INCLUDING HIRING, EVALUATION, COMPENSATION, AND TERMINATION OF EXECUTIVE DIR., HEAD START DIR., H.R. DIR., CFO, AND EQUIVALENT AGENCY POSITIONS [SEC. (1)(E)(iv)(IX)]

APPROVE & SUBMIT PROGRAM PERSONNEL POLICIES & DECISIONS ABOUT EMPLOYMENT OF PROGRAM STAFF, CONSISTENT WITH SEC. (1)(E)(iv)(IX), INCLUDING STANDARDS OF CONDUCT & CRITERIA FOR EMPLOYMENT & DISMISSAL OF PROGRAM STAFF

POLICIES & CHANGES TO POLICIES


PC = APPROVAL

Documents

2E. Head Start: Head Start Hot Topics