You Should Have Two Handouts…
• My Slides
• One Titled “Recommended Reading
Library”
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• Arizona Department of Education
• Career & Technical Education Section
• Phoenix, AZ
• 602-542-5349
• ted.davis@azed.gov
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• My main “claim to fame” is that I have been around a
long time – Everything I say is “Unofficial” or
worse…
• The greater the “Risk” the more you need to check out
any answers discussed and “document” the how’s and
why’s of the option you choose…
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• There has been some type of
CTE/Vocational program funded since
1917 (Smith-Hughes Vocational Act)
• In terms of raw dollars, Perkins is not a
major educational grant
• However, it is still the largest grant targeted
at our high-school-age population
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• Perkins is “split funded” between the
secondary (high school) and the postsecondary
(community college) programs
• The average split nationally is 59.24%
secondary & 38.89% postsecondary
• The postsecondary split ranges from 13.5%
low (Delaware) to a 75% high (Guam)
• The splits are determined by each state
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•
Perkins has basically been “flat funded” over the past decade
•
The President’s Administration has agreed to the :
•
Elimination of Tech Prep (Title II of Perkins) relative to federal FY
2011
•
A 3.2% reduction in the federal FY 2011 Basic Grant funds that will
become available July 1, 2011
•
A larger cut in the Basic Grant (Title I of Perkins) federal FY 2012
funding that will become available July 1, 2012. Prior to the 3.2%
cut to next years funds, the proposed reduction was 13.9%. (It is not
known how the 3.2% cut for next year will be factored into federal
FY 2012?)
•
The July, 2012 cuts will trigger the “hold harmless” provisions of
Section 111(a)(5) of the Act which is based on fiscal 1998 allocation
amounts (and by default 1998 estimated census counts)
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•
If the hold harmless Perkins provisions aren’t changed, 14 states
and territories (that have had relatively small population growth)
will see a modest <2.6% > cuts in Basic Grant funding starting
July 1, 2012
•
Everyone else will see larger cuts up to a <39.8% > reduction in
Perkins funding for Nevada
•
Nevada population has grown 35.1% since the 2000 census
• Is a <39.8% > funding cut equitable?
• The proposed cuts appear to be inversely related to
population growth, which does not make sense for a funding
formula based on census counts
•
“My gut feeling” is that states counting on small cuts in Perkins
funding need to plan on the conservative side
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STATES –
Maintenance-of-Effort (MOE) & Dollar-For-Dollar Match
• YOU HAVE TWO ‘MOE’ REQUIREMENTS –
• IN THE AGGREGATE (Section 311(b))
• YOUR 5% ADMIN FUNDS ALSO HAVE AN MOE
REQUIREMENT (Section 323)
• STATES HAVE A DOLLAR-FOR-DOLLAR ADMINISTRATIVE
MATCH REQUIREMENT (Section 112(b))
Cuts in Perkins funding will make it easier for states to meet their Perkins
MOE requirements as states also cut CTE funding
(Section 311(b)(1)(C) & Section 323(b))
This is a Perkins 101 session. If you have MOE questions please see me at
any time during the conference and we can talk about MOE
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State Allotments Are Census Based
• 50% “population aged 15 to 19 inclusive, 20%
population aged 20 to 24,” etc.
• Poverty is not factored into the allocations to the
states (Section 111(a)(2) )
In-State Allocations – Secondary
• District census data
• 70% based on 5-17 census count at or below
poverty guidelines
• 30% total district census data
(Section 131 (a)(1-3))
In-State Allocations – Postsecondary
• Based on Pell Grant recipient and BIE assistance
recipient counts within a state and community
college district (Section 132 (a)(2))
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Exceptions - Area CTE/Vocational Schools
• Most commonly funded via a cooperative
agreement, based on the number of students
served (Section 131 (e))
Exceptions - Secondary (Section 131(C))
• Formula award less than $15k
• Consortium or waiver approval
Exceptions – Postsecondary (Section 132(C))
• Formula award less than $50k
• Consortium or waiver approval
A Secondary or Postsecondary “Split” of 15% or
less allows for a state to develop its own allocation
formula (Section 133(a)(2))
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GETTING STARTED
STATES – Your approved State Plan
RECIPIENTS – Your approved Local Application
Pitfalls –
• Just don’t write “something” to get the money
• State Plan – States follow it, amend it or negotiate a
change to avoid the more complicated formal
amendment process
• Local applications –
• Recipients, follow it or amend it
• Check your progress and budget at least mid-grant
and 90 days before your end date
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Perkins is not an entitlement grant –
• You have to have one or more programs of sufficient size, scope
and quality to warrant the receipt of grant funds
• If your allocation is $15k or less (Secondary) or $50k or less
(Postsecondary) you will need to either –
• Request and receive a waiver or
• Enter into a consortium agreement with another district or
college
Waivers – you need to be able to justify the waiver
• The recipient has a viable program, and
• They are not able to enter a consortium due to:
• Rural isolation
• No one within a reasonable distance wishes to enter into a
consortium with the recipient
(Section 131(c)(1-2); Section 132(a)(3-4); Section 132(C); Section 132(C)(2))
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States – Without an approved State Plan or a Plan judged
to be in a “substantially approvable form” a state may
not obligate Perkins funds
Recipients – Are in the “same boat” – they can’t obligate
their new grant funds until their application is
“substantially approvable”…
Example – A recipient’s new fiscal year begins July 1st. On July 6th, in
anticipation of school starting, the district buys some badly needed CTE
equipment . Their application for the new school year is substantially
approved two days later on July 8th. This district may not use Perkins funds
to pay for this equipment – even if the delay is the state’s fault.
EDGAR 34 CFR §76.703(d)
EDGAR 34 CFR §76.708(a)
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You have your approved application – You’re ready to go and spend your
money! What can I spend $$$ on?
• Again, follow your approved application or plan
• States –
• Section 3 Administration, your 5% Admin setaside
• Section 124 – State Leadership Activities, your 10% setaside
• Do Not Exceed These Percentages!
• Recipients –
• Section 134 – Your Local Plan
• Section 135 – Local Uses of Funds
• States, Tribes, K-12 schools – OMB Circular A87
• Community Colleges – OMB Circular A21
• Charter Schools – (Arizona utilizes OMB Circular A122)
• In all three, look for the section titled, “Selected Items of
Cost”
• A87 – Appendix B
• A21 – Section J
• A122 – Appendix B
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Sole State Agency
Carl D Perkins Act
• Section 112(a)(3) – 5% Administration
• Section 124 – State Leadership Activities
State Approved Plan
Under OMB Circular A87 – However, depending on the recipient you are
working with you might use
•
OMB Circular A87 (Secondary)
•
OMB Circular A21 (Postsecondary)
•
OMB Circular A122 (Non Profit Charter Schools)
State Statutes Procurement, Capital Assets,
Gifts, Travel, Pre-paid costs,
Etc.
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Eligible Recipient
Secondary
Postsecondary
Carl D. Perkins Section 135 – Local
Uses of Funds & 203 Tech Prep
Carl D. Perkins Section 135 – Local
Uses of Funds & 203 Tech Prep
Your Approved Local Plan
Your Approved Local Plan
OMB Circular A-21; Selected
Items of Cost
OMB Circular A-87;
Selected Items of Cost
State Statutes • Procurement
• Capital Assets
• Gifts
• Travel
• Pre-paid costs
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General Test of Allowability
• Fits with your application
• Allowable per the appropriate OMB Circular
• Reasonable
• Allocable
• Consistently Treated
• Consistent with your organization’s policies
• Incurred in accordance with GAAP
• Not charged elsewhere
• Adequately Documented..
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SALARIES
• Yes – You must do “time-and-effort” (T&E) reporting
• Employee works full time on Perkins you –
• Must ‘certify’ the employee at least semi-annually
• T&E records must be signed by the employee or a supervisor with
first hand knowledge
• Multiple cost objectives requires regular Personnel Activity Reports
(PARs)
• The cost has to be “allocable” to your Perkins grant
• After-the-fact reporting
• Signed by employee
• Coincide with pay periods; at least monthly
Secondary, SEAs, Governments, BIE - OMB Circular A87 Appendix B.8.h.
Community Colleges OMB Circular A21 Appendix J.10.
Non-Profit Charter Schools – OMB Circular A122 Appendix B.8.m.
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EQUIPMENT
•
EDGAR (34 CFR §80.1) defines equipment as personal property that costs $5,000
or more – The issue has more to do with a state’s inventory requirements (and the
associated costs) than the purchase price
•
If your state elects a lower dollar threshold for inventory purposes (or has
“stewardship” requirements) you must comply with your state’s lower capitalization
limit ( EDGAR 34 CFR § 80.32(b))
•
The OIG (Office of Inspector General) has been issuing findings relative to items of
equipment that are considered “attractive theft” items – cell phones, digital cameras,
flat screen monitors, etc. that cost a lot less than $5,000
•
When is something a supply and not equipment?
•
•
Use a “reasonable person approach” – Does it have a useful life of a year or
more, would you throw it away or repair it, does your own state’s criteria treat it
as a supply or equipment?
Colleges often won’t budget anything under $5,000 as “capital” – You’ll see terms
like “non-capitalized capital”… The issues are more about what line you budget the
money on and at what dollar amount do you have to inventory the equipment?
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EQUIPMENT CONT.
• Get it written into your approved application
•
Items like your CTE computer lab
• Specialized workstations
• The cost of connecting equipment
• Etc.
• Avoid paying for stuff your district typically supplies to all your
district’s educational programs – desks, chairs, PCs
• USE NON-PERKINS FUNDING WHERE POSSIBLE
• Trade Perkins-funded CTE costs for those CTE costs funded
with non-federal $$$
• Pursue donated equipment where possible
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STUDENT ORGANIZATIONS
Little guidance – the Feds typically refer you back to 34 CFR
§403.71(c) – The last regulatory guidance for Perkins, under
Perkins I
• Allowed – Instructional related costs (very narrow)
• Disallowed – All the fun stuff…
States – Section 124(c)(4)
Local Recipients – Section 135(c)(5)
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(3) The support of vocational student organizations may not
include—
(i) Lodging, feeding, conveying, or furnishing transportation to conventions or other forms
of social assemblage;
(ii) Purchase of supplies, jackets, and other effects for students' personal ownership;
(iii) Cost of non-instructional activities such as athletic, social, or recreational events;
(iv) Printing and disseminating non-instructional newsletters;
(v) Purchase of awards for recognition of students, advisors, and other individuals; or
(vi) Payment of membership dues;
(d) Leadership and instructional programs in technology education; and
(e) Data collection.
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My guess, they mean, non-instructional, out-of-the-classroom-type activities that
don’t meet the conditions of 34 CFR § 403.71(c)(2)(iv) & – “all students…”
NOT ALLOWED
• Alcohol
• Entertainment expense
• Awards (gifts)
• Promotional items (freebies)
• Promotional advertising
•
•
•
•
•
OMB A87 B.3; OMB A21 J.3
OMB A87 B.14; OMB A21 J.17
OMB A87 B.20; OMB A21 J.22
OMB A87 B.1.f.(3); OMB A21 J.1.f(3)
OMB A87 B.1.f(4); OMB A21 J.1.f(4)
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FOOD & BEVERAGES
• “NO”
OMB A87 B.3; OMB A21 J.3
OMB A87 B.14; OMB A21 J.17
OMB A87 B.27; OMB J.32
OMB A87 B.43; OMB J.53
• Unless it is related to –
• Approved travel (subject to your state’s per diem guidelines)
• Included in your approved registration
• Not considered entertainment
• Included as part of an approved conference or meeting (attending or
sponsoring)
• A consumable training supply (culinary arts)
• Alcohol never allowed
Read Goods or services for personal use – A87 Attachment B.20 &
A21 Section J. 22.
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TRAVEL FOOD & BEVERAGES
• Travel is allowable when it supports your approved grant or plan
• Meals, lodging, all the usual stuff is allowable, when approved
• Should be reasonable
• DOES NOT INCLUDE ENTERTAINMENT COST
What about those conferences where entertainment is included in the
registration fee?
• It’s your state’s call…
If the cost is separate and identifiable and the employee wants to
participate they must cover the cost out of their own pocket
OMB A87 Attachment B.43 or OMB A21 Section J.53
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MEETINGS & CONFERENCES/FOOD & BEVERAGES
OMB A87 B.27 (Comparable language in OMB A21 J.32)
“Meetings and conferences. Costs of meetings and conferences, the
primary purpose of which is the dissemination of technical information,
are allowable. This includes costs of meals, transportation, rental
facilities, speaker’s fees, and other items incidental to such meetings or
conferences. See OMB A87 B.14; OMB A21 J.17, “Entertainment
Costs”.
• Must be reasonable
• Must be able to stand the, “Would you like to see this on the front page
of your local paper?” test
• Does NOT include internal staff meetings
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MEETINGS & CONFERENCES/FOOD & BEVERAGES
Prepaid Fees – Early Registration
Are they a professional service cost or a travel cost?
• Prepaid registration fees can lead to accounting headaches related
to the issue of, “When is a cost incurred” (See EDGAR 34 CFR
§76.707)
• May need to transfer the expense from one fiscal year to the next if
the fee is paid prior to the fiscal year in which the activity will
occur
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MEMBERSHIPS, SUBCRIPTIONS &
PROFESSIONAL ACTIVITY COSTS
• Memberships for a state or district are OK . For example the
cost would be OK for your State CTE Director’s position,
regardless of who the individual is – but not for the individual
who is the CTE State Director
• Must be “allocable” to your Perkins project or plan
• Use the “reasonable person” approach
• It is recommended that you utilize your procurement system
procedures if you are looking at a -
• Significant cost
• Sole source provider (speakers, intellectual property,
copyrighted, etc.)
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AWARDS
• Awards or Gifts -Typically Not Allowed
• However you can purchase nice frames through your approved
state or local office supply contract, print out a nice certificate on
your color laser printer and hand the result to folks…
• Hand out donated items from your state’s Chamber of Commerce,
local industry groups, etc.
OMB A87 B.1.f(3); OMB A21 J.1.f(3)
OMB A87 B.20; OMB A21 J.22
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Do Not Use Perkins Funds For -
• Promotional items (freebies)
• Promotional advertising
The Most Common Ways To Cover Such Costs –
• At a state-wide level - Conference registration fees and
conference accounts
• Districts - Many states allow districts to maintain extra
curricular programs, student activity accounts - Some states
even allow for tax credits for donations made
• Outside groups, professional organizations, etc.
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The most
common
problems, goofs!
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• FAILURE TO FOLLOW YOUR OWN
APPROVED APPLICATION/PLAN
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OUR APPLICATION WAS APPROVED – WE’RE
GETTING THE MONEY – “LIFE IS GOOD” & I AM
DONE!
•
•
•
•
Review it at least at the 6 and 9 month points.
Follow it, or
AMEND IT
The OMB Circular A133 CTE Supplement – 4-84.048 (15 pgs.)
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PROCUREMENT –
• INADEQUATE DOCUMENTATION
If your procurement shop or business office are not known for
their attention to details - Cover your “butt”
• FAILURE TO COMPLY WITH YOUR OWN
STATE’S PROCUREMENT RULES
• Bidding and quotation requirements
• Government credit card (PCard) problems
• Don’t sign anything unless you are authorized by your agency,
district or college to obligate them
• Inadequate internal controls
• Professional Service Contracts - Check the federal “Debarment”
website. If your vendor is on there you can’t use them
(OMB Circular A133 §___.220
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PROPERTY MANAGEMENT ISSUES –
• An inventory system that does not meet your own state’s
property management requirements
• If you have to, keep your own set of documents
• Purchase orders
• Receiving documents
• A mini-inventory, with item location info
• Keep it current
• Does your state have a lower dollar threshold?
• Does it have “stewardship” requirements?
• You need to put special procedures in place for items
that cost less than $5K but are high-theft items
• Do your approved purchases agree with your approved application?
• Does your annual fiscal completion report reconcile to your actual
purchases?
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TIME AND EFFORT – Personnel Activity Reports (PAR)
• Nationally there have been some significant questioned
cost audit findings – in the $100K plus range…
• Key factors –
• First, you have a time and effort reporting system in
place;
not just an attendance (time clock) reporting system
• Your system accurately reflects the activities for which
the employee is paid
• You are reporting after-the-fact
• It’s signed by the employee
• There is a suitable means of verification
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TIME AND EFFORT • A semiannual certification is acceptable for an employee that
only works on Perkins (one cost center)
• Your system accounts for the full time for which the
employee is paid
• If an employee works on more than one cost center their
activity must be reported at least monthly and must coincide
with the employee’s pay period
• A red light to an auditor – time reported spent exactly as
budgeted…
• In rare cases payments could be on a budgeted basis
• Reconciled quarterly
• Within 10% of actual
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TIME AND EFFORT Monthly Report, Certifications… for community colleges?
Where does it say that?
Circulars A87 and A122 are easier to read. For community
college recipients, I recommend the following paragraph, OMB
Circular A21 Section J.10.c.(2)(e)…
“(e) For professorial and professional staff, the reports will be
prepared each academic term, but no less than every six months.
For other employees, unless alternate arrangements are agreed
to, the reports will be prepared no less frequently than monthly
and will coincide with one or more pay periods.”
(AZ Examples – https://www.ade.az.gov/gme/ Select Federal Fiscal requirements)
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New audit findings for States - No FISCAL MONITORING… RISK BASED…
• Also on the list of “frequent” new audit findings – “States need to do
fiscal monitoring” (EDGAR 34 CFR §80.40)
• Your folks don’t need to be auditors
• If they find something that “doesn’t look right”, then you can send in real
auditors
• Build fiscal questions into your monitoring tool –
• Compare actual activities to their approved application
• Compare equipment purchases to their reported end-of-year equipment
purchase documents - Compare to P.O.s and receiving documents; did
it end up on their inventory; check to see if you can physically locate a
couple of items from their inventory on a sample basis
• Are they paying salaries? Ask to see either the employee’s semiannual
certification or a personnel activity report (PAR)
• Purchased professional services – Did they check the federal debarment
website?
• Etc.
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New audit findings for States - Monitoring needs to be RISK BASED…
• Our fiscal folk’s rank is based on –
• The amount of money awarded
• Other audit reports
• On-time reporting
• Cash management issues
• Only one or two approved programs
• This information is then supplied to our program staff who have their own
weighting system based on program staff input and ratings
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• You need to argue your point as to why you should not have to return funds
before the final audit exit conference
• State your case. Find alternate documentation. Reconstruct what is needed,
etc.
• Agree to put corrections in place, but try like heck to talk them out of
returning $$$
• MAKE SURE THAT YOUR ADMINISTRATION GIVES YOU INPUT
INTO DECISIONS THAT AFFECT CTE!
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Questions?
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