Requirements for American Recovery and Reinvestment Act Funds Administered by NYSED

1
Requirements for American Recovery and
Reinvestment Act Funds Administered by NYSED

• Deborah H. Cunningham
• New York State Education Department
• Educational Management Services Coordinator
• dcunning_at_mail.nysed.gov
• June 2010

2

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

2
3

• 1. Legislation and Appropriations
• Signed into Law February 17, 2009
• 787 Billion New Federal Spending
• 393 Billion for
• State and Local Fiscal Relief
• Infrastructure and Energy
• Health and Human Services
• Education, and
• Public Safety
• 26 Billion allocated to NYS
• Unprecedented level of transparency and
  accountability

3
4

• ARRA funding is a one-time appropriation to be
  provided over a 27 month period (mainly 2009-10
  and 2010-11).
• Quarterly reporting is required.
• The first quarter reporting period was for the
  quarter ending September 30, 2009.
• Grant Recipients have reported three times.

5
5
6

• Purpose and Requirements
• The intent of these funds is to create jobs and
  avert layoffs while promoting education reforms.
• Reporting will focus on the number of jobs
  created and retained.
• Calculations for all positions reported as a
  percentage of Full-Time Equivalents. For
  example, the number of hours worked is divided by
  the number of hours of full time employment.
• ARRA funds are federal grants and subject to all
  federal reporting requirements.

7

• Four Basic Principles
• Spend the funds quickly to save and create jobs
• Improve student achievement through school
  improvement and reform
• Ensure transparency and accountability and report
  publicly on the use of funds
• Invest one-time ARRA funds thoughtfully to
  minimize the funding cliff

7
8

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

8
9
2. ARRA Quarterly ReportingReporting Period and
Deadlines

2010-Q1 implemented 12/18/09 OMB Revised
Guidance to report expenditures cumulatively from
the beginning of the Act but to report jobs
directly paid for in the quarter being reported. 9
10

• Roles
• Prime recipient NYSED is serving as the prime
  recipient for most ARRA education funds in New
  York State.
• Sub-recipient Entities whose mission requires
  them to perform certain functions regardless of
  grant funds received, such as local education
  agencies.
• Vendors Organizations or businesses which
  sub-recipients contract for services, but which
  are not required to provide services absent the
  grant funding.
• Some entities can serve more than one role.

10
11
NYSED and LEAs

• NYSED and Sub-recipients
• Approximately 1,000 sub-recipients, many with
  multiple awards.
• Sub-recipients first submitted over 3,000 reports
  to NYSED through the ARRA system on October 1,
  2009 for the first quarter of the fiscal year
  (July 1-September 23, 2009).
• Sub-recipients, e.g., school districts, report on
  vendor contracts. Sub-recipient vendors do not
  report directly to NYSED.
• NYSED reviews, approves and aggregates the data
  from sub-recipients and reports it to the federal
  government on their behalf.

11
12

• Sub-recipients Report Limited Amount of Data
• Quarterly through NYSED Online System
• Online ARRA System collects
• -Brief Program Narrative
• -Jobs created and retained
• -Vendor information limited to
• Payment amount
• Sub-award ID
• Name and zip of vendor OR DUNS number
• -Infrastructure amount (IDEA and Stabilization)

12
13

• The Department Uses Expenditure Information From
  Existing Financial Systems
• Expenditure information is provided directly to
  the agency payment office as part of the claims
  process. At NYSED, payment offices are the Office
  of Grants Finance or Fiscal Management.
  Sub-recipients do not need to report expenditure
  information through the ARRA Reporting System.
• For ARRA funds that NYSED pays to other State
  agencies, the agency payment office must report
  expenditure information to NYSED through the
  program office. For example, OMRDD would report
  on the use of ARRA-IDEA funds received from NYSED
  to their VESID program office contact.

13
14

• Applications Must be Approved
• For ARRA-funded programs, sub-recipients must
  apply and have their application approved by
  NYSED.
• Sub-recipients then submit ARRA reporting data on
  each funded program, subject to approval by NYSED.

14
15

• Proposed Reporting Timeline
• Online System opens on the Portal 6/2/10
• Deadline for data from sub-recipients 6/30/10
• NYSED submits report to federal government
  7/10/10
• NYSED makes corrections 7/11/10-7/12/10
• Federal review and SED corrections
  7/13/10-7/29/10
• Reports published on www.recovery.gov 7/30/10
• Next quarterly report cycle begins 9/1/10

16

• Accessing the Online Portal through NYSED
• Currently, only the CEO, using their user
  identification and password can access the ARRA
  Reporting option on the SED portal. 
• The CEO must delegate access to the application
  through SEDDAS for others (including auditors) to
  use the portal or view the data.
• Technical assistance options are available
  on-line for any difficulties with the SEDDAS
  system or questions on how to delegate access to
  other administrators.
• Office of Management Services provides individual
  phone assistance during working hours.

16
17
The NYSED Application Business Portalhttp//porta
l.nysed.gov
17
18
ARRA Reporting System

• Reporting will answer key questions
• -Who is receiving Recovery Act funds and in what
  amounts?
• -What projects or activities are being funded
  with Recovery Act dollars?
• -What is the completion status of such projects
  or activities and what impact have they had on
  job creation and retention?
• Reporting is required for each grant a
  sub-recipient receives. Recipients select the
  appropriate fund from a drop-down list.
• For Education Stabilization Funds, the system
  also includes an application and will include a
  final expenditure report.

18
19
Sub-recipient Information
19
20
Sub-recipient Information

• Data Universal Numbering System (DUNS) number
• Date for Central Contractor Registration (CCR)
• -Additional information about DUNS and CCR can
  be found at
• http//www.oms.nysed.gov/cafe/guidance/dunsccrfaqs
  .html
• Review guidance at http//usny.nysed.gov/arra/
• Chief executive must certify and submit data

20
21
Program Narrative and Summary

• Describe the programs to be provided
• Enter jobs saved and directly funded during the
  quarter
• Enter jobs created and directly funded during the
  quarter
• Enter amount for infrastructure from inception
  (7-1-09) to end of reporting period (e.g.,
  6/15/10)ESF and IDEA only
• Guidance on job estimates is at
• http//usny.nysed.gov/arra/

21
22
Sub-recipient Vendor Data
22
23
Sub-recipient Vendor Data

• Sub-recipients must provide data on funds awarded
  to vendors including BOCES.
• Sub-recipients must report
• vendor/organization name and zip OR DUNS number,
  sub-award number and payment amount
• FTEs for jobs retained or created by the vendor

23
24
CEO Certify and Submit
24
25
New York State EducationARRA Jobs Reported and
Compliance
25
26

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

26
27
3. Requesting Payment

• District staff must have a thorough understanding
  of the processes and requirements summarized in
  the Department's Fiscal Guidelines for Federal
  and State Grants and A Guide to Grants
  Administration and Implementation Resources.
• Some funds have an automatic 20 percent first
  payment upon SED approval of the application
• Grant recipients draw down funds using FS-25
  forms up to 90 percent of the grant amount for
  actual expenditures to date
• Districts submit final expenditure information
  using the FS-10F long form or the on-line system
  for ESF.
• For information
• Webwww.oms.nysed.gov/café
• E-mailgrantsweb_at_mail.nysed.gov

27
28
28
29
Payment and Accounting Information (Continued)
29
30
Payment and Accounting Information (Continued)
30
31

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

31
32
4. Accounting

• ARRA grant recipients should have separate
  accounting of ARRA funds within their financial
  system
• The Comptroller has specified revenue codes
  http//www.osc.state.ny.us/localgov/pubs/releases/
  files/americanrecovery.pdf
• The grant recipient must create separate
  expenditure codes.

32
33

• Education Stabilization Funds
• - Revenues and expenditures must be accounted
  for in the General Fund
• - Use A4285 to coincide with ST-3
• Title 1 and IDEA
• Must be accounted for in the Special Aids Fund
• Accounting must be separate from all other funds

33
34
Annual Financial Report Changes

• Every item that was added as a projection item on
  last year's ST-3 will now have an actual amount
  reported (in the upcoming ST-3) as well.
• SED will be collecting a separate supplementary
  schedule as part of the ST-3 on which districts
  will need to report 2009-10 ARRA expenditures in
  a certain format to comply with federal reporting
  requirements.
• We also are preparing our full annual ST-3
  changes document, as we try to release a draft by
  June.

34
35

• Personnel Activity Reports
• Not needed for ESF
• Needed for Title 1 and IDEA
• Employees work solely on single federal award
• Prepared at least semi-annually
• Signed by employee or supervisor having
  first-hand knowledge of activities
• Employees who work on multiple activities
• Must reflect after-the-fact activities
• Account for the total activity
• Prepared at least monthly to coincide with
  payroll
• Must be signed by employee

35
36

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

36
37
5. Allowable Expenses

• Most grants are governed by the requirements of
  the particular program (e.g., Title I,
  Mentor-Teacher Intern Program, etc.) and OMB
  Circular A-87 Cost Principles
• Education Stabilization funds can be use for any
  ESEA or IDEA purposes
• Non-allowable expenses are detailed (see
  Education Stabilization Fund, CFDA No. 84-394
  Supplemental Application-Guidance Document Feb
  2010)

37
38

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

38
39
6. Education Stabilization Funds

• Allowable uses
• Retain existing teachers, administrators and
  support staff
• Establish data systems
• Turn around the lowest-performing schools
• Improve results for all students (through
  technology, early learning or accelerated tracks
  to college)
• Non-allowable uses
• Maintenance costs
• Stadiums or facilities used primarily for
  athletics
• Purchase or upgrade of vehicles or school buses
• Stand alone facilities not for educating children
• Financial assistance for students to attend
  nonpublic schools (except special education
  services)
• School modernization, renovation or repair
  inconsistent with State law

39
40
Closing out ESF

• ESF will be treated as two separate years with an
  application for each year (two applications for
  2009-10 to handle the two separate appropriations
  of funds)
• A final expenditure report will close out each
  year.

40
41
ESF Final Expenditure Report Process

• Districts should complete the final expenditure
  report process for 2009-10 before applying for
  new funds for 2010-11.
• There currently is no statutory provision to
  allow school districts to carry over funds from
  2009-10 to 2010-11 if this is enacted, SED will
  incorporate.
• Districts should be able to begin the application
  process by July 1.
• Upon approval districts will be able to draw down
  funds.

41
42
ESF Final Expenditure Report Process

• Districts will report expenditures of approved
  funds.
• SED is working on a close out process and a Year
  2 application to be available to districts by
  July 2010.
• A comparison of actual expenditures with the
  approved budget and a final narrative noting any
  deviations from the approved budget.
• If a district has claimed and received funds in
  excess of the final allowable cost, SED will
  recover the overpayment although the district
  should have safeguards in place to assure this
  does not occur.

42
43

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

43
44
State Legislation and RecommendationsState
Appropriations of ARRA ESF for theCurrent School
Year 2009-10

• The State Budget adopted in April 2009 included a
  Deficit Reduction Assessment (DRA) for 2009-10.
• The DRA was offset with 1.2 billion in federal
  Education Stabilization Funds, known as a
  Deficit Reduction Assessment Restoration (DRAR).
• In December 2009, Chapters 502 and 503 of the
  Laws of 2009 were adopted and included a
  Supplemental Deficit Reduction Assessment (SDRA).
  This was a second, i.e. supplemental DRA (the
  initial DRA was adopted in the April budget).
• The SDRA is being offset with 391 million in
  federal ARRA funds.

44
45
Supplemental ARRA ESF Funds For 2009-10

• Although ARRA Education Stabilization Funds (ESF)
  are being used to offset reductions in State Aid,
  they are administered as federal grants and
  federal requirements apply.
• District amounts of Total General Aid and SDRAR
  amounts can be viewed on the General Aid output
  report via SAMS online
• Districts first reported on the additional ARRA
  funds, used to offset the Supplemental Deficit
  Reduction Assessment Restoration (SDRAR),
  resulting from Chapters 502 and 503 of the Laws
  of December 2009, for the quarter ending March
  31, 2010.
• NYSED provided a supplemental Education
  Stabilization Fund (ESF) application for
  districts to complete in early 2010.
• http//stateaid.nysed.gov.

45
46
Additional Information on Supplemental Education
Stabilization Funds

• The supplemental ESF application will require
  districts to detail their proposed purposes and
  budgets for the supplemental funds.
• Allowable and non-allowable expenses for the
  SDRAR will be the same as for other Education
  Stabilization Funds.
• Information can be found at http//usny.nysed.gov
  /arra/
• NYSED will review and approve supplemental ESF
  applications and districts will be authorized to
  spend funds between July 1, 2009 June 30, 2010.
• Districts should account for supplemental funds
  and other ESF funds together.
• Districts must account for ESF funds separately
  and follow administrative requirements of the
  Office of Management and Budget Circular (OMB
  Circular A-87) and Federal Education Department
  General Administrative Regulations (EDGAR).

46
47
Executive Budget Recommendations for 2010-11

• Continue the 2009-10 Mid-Year DRP reductions a
  1.4 billion, 5 percent, cut to state aid to
  school districts
• The 2010-11 cut to State Aid to school districts
  includes a partial restoration of 726 million in
  Recovery Act funds.
• Eliminate aid increases resulting from data
  submissions following Executive Budget. Aid
  limited to amount generated by data used for
  district estimates accompanying Executive budget.
  Subsequent data submissions would not increase
  aid.
• Limit growth of county costs for Preschool
  Special Education by making districts responsible
  for any year-to-year growth in county costs
  exceeding 2.
• Consider wealth as a factor in reimbursing
  districts for Summer School Special Education
  Program costs.
• Limit payments with 2010-11 appropriation for
  Summer School Special Education Program for
  obligations prior to the 2009-10 school year to
  50.0 million.
• Apply same requirements for regulatory adoption
  procedures to NYSED that apply to other state
  agencies, including local impact, cost-benefit
  analysis and identify funding sources for any new
  regulations.

47
48
ARRA Funding in 2010-11

• The Executive Proposal recommends appropriation
  authority for the following

PROGRAM ARRA APPROPRIATION
Support of Elementary and Secondary Education 843,000,000
Preschool Special Education Program 194,000,000
Math and Science High Schools 1,382,000
Teacher Mentor Intern Program 2,000,000
Say Yes to Education Program 350,000
Race to the Top 750,000,000
Teacher Incentive Fund 20,000,000
Statewide Data Systems Grant 10,000,000
Title I Part A Grants to School Districts 454,000,000
Title I School Improvement Grants 135,000,000
Homeless 1,700,000
Title II-D Technology 28,000,000
IDEA 398,000,000
Vocational Rehabilitation 15,000,000
Educational TV and Radio 5,587,000
TOTAL 2,858,019,000
Competitive
48
49

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

49
50
8. ARRA Monitoring Plan for New York State

• Desk audits of applications and quarterly reports
• On-site monitoring of Education Stabilization
  Funds, Cafeteria grants and programs funded with
  Other Government Services Funds
• On-site audits of ARRA ESF, ARRA Title I and ARRA
  IDEA

50
51
ESF ARRA Monitoring

• Monitoringto verify that funds are spent as
  intended and to receive feedback on SED data
  collection and communication
• 12 districts visited selected randomly or for
  reporting anomalies
• Collaborated with ARRA audits
• Draft and final reports in process
• Allowable costs reviewed
• Job calculations reviewed
• Supporting documentation reviewed

51
52
ESF Monitoring Findings

• Some districts did not recalculate jobs retained
  or created each quarter
• Some districts misunderstood the revised guidance
  to report jobs directly funded during the quarter
  as meaning that once jobs are reported they
  didnt need to be reported in subsequent
  quarters.
• Some districts had discrepancies between FTEs
  reported on the ARRA Reporting System and FTE
  data on personnel records.
• District errors in incorrectly coding journal
  entries were identified and resolved.
• Some districts spent large amounts of ESF for
  contracts with vendors but reported no jobs saved
  or created by vendors

52
53

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• ARRA Audits
• Non-compliance
• Common Misunderstandings
• Resources

53
54

• OAS District Selection for Audit
• Used Existing Data From
• Annual Independent Audits
• Single audit findings
• OSC audit findings
• Any other audits
• Identified 68 At Risk Districts
• Plan to audit 30 by June 30, 2011

54
55
Risk Assessment of Financial Factors

• Selection based on quantified risk assessment
  approach
• Level of Title 1 and IDEA funding
• Amount of 2006-07 and 2007-08 unreserved-undesigna
  ted fund balance
• ARRA funds as a percent of 2007-08 budget
• 2007-08 unreserved-undesignated fund balance as a
  percent of the following years adopted budget

55
56
Risk Assessment of Financial Factors

• External auditors qualified opinion
• Deficiencies or material weaknesses in internal
  controls for 2006-07 or 2007-08
• Timeliness of financial statement submission
• Timeliness of A-133, OSC, federal audit, and OAS
  audit corrective action plans
• Number of audit findings by type

56
57
OAS Audit Objectives

• Verify the allowability and accuracy of amounts
  expended to-date (for FS-25) or amounts reported
  for each expense code (FS-10F)
• Verify the appropriateness of any requests for
  additional funding (FS-25)
• Determine if the District has sufficient control
  systems in place to administer ARRA funds
• Assess compliance with pertinent federal
  requirements for the use of federal funds

57
58
OAS Typical Findings

• Allowability and accuracy of reported
  expenditures
• Some were reporting anticipated costs for the
  next month for ESF
• Some costs claimed were not approved
• Financial control system
• Some districts were not accounting for ESF
  separately in the general fund

58
59
OAS Typical Findings (Contd)

• Compliance with federal grant requirements
• No time and effort certifications
• When paid from multiple sources
• Not accounting for the full efforts of the
  employee
• Not certifying at least monthly to coincide with
  payroll
• Not signed by the employee
• Not reflected after the fact activities
• Section 1512 reporting
• Incorrect number of FTEs reported for jobs
  created/retained
• Cash management
• Lacking procedures to minimize time elapsing
  between receipt and disbursement of funds

59
60

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• Non-compliance
• Common Misunderstandings
• Resources

60
61
9. ARRA Non-Compliance

• Make the reporting task easy by streamlining
  reporting retrieving many data elements from
  available databases and thus reducing the burden
  on sub-recipients
• Provide good information and training on ARRA
  reporting in order to win compliance with
  reporting requirements and
• Continue to watch for noncompliance and take
  steps as appropriate on case-by-case basis.

61
62

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• Non-compliance
• Common Misunderstandings
• Resources

62
63
10. Common Misunderstandings

• True Sub-recipients submit requests for
  payments through a payment office (Grants Finance
  in most cases)
• False Quarterly reporting is a request for
  payment
• True a Full-time employee is 1.0 FTE per quarter
• False A full-time employee is .25 FTE per
  quarter
• True Job creation refers to jobs created with
  ARRA funds compared with school year 2008-09. A
  job created and funded throughout the year
  remains a job created.
• False That a job created in one quarter is a
  job saved in the next

63
64
Common Misunderstandings

• True ARRA funds appropriated for school year
  2009-10 must be obligated by June 30, 2010 and
  expended by September 30, 2010 (without
  legislative change)
• False Supplemental ESF funds can be used next
  year
• True Quarterly reports are due at the end of
  each quarter 3/31, 6/30, 9/30, 12/31. This is
  when quarterly reports are due for each and every
  ARRA grant (even if there are no changes).
• False Not knowing when the report is due!
• Fact Regular updates are available at
  http//usny.nysed.gov/arra
• False Forgetting to check the ARRA website

64
65

• Topics
• Legislation and Appropriations
• ARRA Quarterly Reporting
• Requesting Payment
• Accounting
• Allowable Expenses
• Education Stabilization Funds
• State Legislation and Recommendations
• ARRA Monitoring
• Non-compliance
• Common Misunderstandings
• Resources

65
66

• 11. Resources
• www.ed.gov/recovery/
• www.ed.gov/policy/gen/leg/recovery/index.html
• usny.nysed.gov/arra/
• http//stateaid.nysed.gov
• Email your reporting questions to NYSED
• arra_at_mail.nysed.gov
• emscmgts_at_mail.nysed.gov
• Grants Finance Questions to grantsweb_at_mail.nysed.
  gov
• E-mails for Federal guidance
• SFSF State.fiscal.fund_at_ed.gov
• IDEA IDEArecoverycomments_at_ed.gov
• Title I oese_at_ed.gov
• Office of the Inspector General hotline
  oig.hotline_at_ed.gov
• Inspector General rick.rasa_at_ed.gov

66
67

• Use of all ARRA Funds
• Must Comply with Federal Guidance
• Saving and Creating Jobs and Reforming Education
  An Overview
• http//www.ed.gov/policy/gen/leg/recovery/implemen
  tation.html
• www.recovery.gov
• Federal ARRA Legislation
• http//frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi
  ?dbname111_cong_billsdocidfh1enr.pdf
• OMB Circular A-87 are the cost principles that
  are applicable for school districts.
• http//www.whitehouse.gov/omb/rewrite/circulars/a0
  87/a87_2004.html
• Office of Management and Budget EDGAR
• http//www.ed.gov/policy/fund/reg/edgarReg/edgar.h
  tml
• ARRA Federal Reporting
• www.federalreporting.gov

68
Description of ARRA Programs Funded Through NYSED
68
69
Description of ARRA Programs Funded Through NYSED
(Continued)
69