FFATA, Section1512 Reporting and ARRA Monitoring Steven Spillan [email protected] Brustein & Manasevit, PLLC Spring Forum 2011 1

FFATA, Section1512 Reporting and ARRA Monitoring

Steven [email protected]

Brustein & Manasevit, PLLCSpring 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/m09-21.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

11

ARRA Reporting Timelines

11

12


12

13

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

14

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 sub-recipients.

The movement of Recovery Act funds between Federal agencies is not subject to Section 1512 reporting.

ARRA Reporting Roles

Source: OMB M-09-21, June 22, 2009

15

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.



16

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

• 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).



17

• 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

19

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 09-21-supp1.

Exceptions:Division B of ARRA not required to reportMandatory programsIndividuals receiving awards

ARRA Reporting Exception

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 sub-recipients and vendors on the total FTE resulting from the sub-award

MAY NOT BE DELGATED to sub-recipient, and it includes vendor information.

20

21

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

22

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

ARRA Jobs Saved!

“

”

23

[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.

ARRA Jobs Saved?

24

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.

ARRA Jobs Saved?

”

“

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) bythe 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


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


27


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)

28

Source: Id.

29

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: Vendor

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.

ARRA Reporting Data Quality

31

Source: OMB M-09-21, June 22, 2009, revised by M-10-14, March 22, 2010

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

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.



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 applyBut 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 AARRA 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

53

Education Department General Administrative Regulations (EDGAR)Title 34, Code of Federal Regulations (CFR), Parts 74-86 and 97-99December 2008 edition.

http://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html

FFATA FAQs: https://www.fsrs.gov/#a-faqs

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 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.

54

Documents

FFATA, Section1512 Reporting and ARRA Monitoring Steven Spillan [email protected] Brustein & Manasevit, PLLC Spring Forum 2011 1