Presented by: Jennifer Carrougher, Director of Federal Fiscal Policy Toni Bernethy, Director of Audit Resolution Annual Conference, Spokane WA

Transcription

1 Presented by: Jennifer Carrougher, Director of Federal Fiscal Policy Toni Bernethy, Director of Audit Resolution 2017 Annual Conference, Spokane WA

2 Agenda Federal Budget/ESSA Procurement/Suspension & Debarment Time and Effort

3 Federal Budget Update

4 Federal Budget Update Budget Deal for FFY17 (school year ) Title II, A $294M cut (from $2.4B to $2.1B) Title IV, A Funded at $400M ($1.65B authorized in ESSA) Preliminary Allocations? Census Data Washington State Decreased 4% President s Skinny Budget Blueprint for FFY18 Title I, A Reservation of 7% for School Improvement Activities

5 Federal Budget Update Title II, A Formula Change ESSA made adjustments to formula to increase focus on poverty State-level allocation: Transitions to 20% population, 80% poverty by 2020 Phases out hold-harmless by 2023 District-level allocation: Also 20% population, 80% poverty Eliminates hold harmless immediately - no transition period

6 ESSA Update Grants Eliminated School Improvement Grants Improving Literacy through School Libraries Close up Fellowships School Dropout Prevention Ed-Tech Reading First, Early Reading First Even Start Advanced Placement Math and Science Partnerships Safe and Drug Free Schools Several eliminated program activities are now allowable uses of funds under other grants, such as a new block grant under Title IV, A and reservation of funds from Title I, A.

7 ESSA Update Title IV, Part A NEW BLOCK GRANT Districts receive an amount based on their statewide relative share of Title I, Part A allocation (for FFY17 authority for states to issue competitively) May spend up to 2% on administration (Direct) Minimum grant of $10,000 Must prioritize funding to schools with greatest need, highest poverty levels

8 ESSA Update Title IV, Part A NEW BLOCK GRANT LEAs receiving $30,000 or more must spend: At least 20% of funds on at least one well-rounded educational opportunities activity At least 20% on at least one safe and healthy students activity Some portion of funds to support effective use of technology (no more than 15% on technology infrastructure)

9 ESSA Update Title IV, Part A NEW BLOCK GRANT Well-rounded educational opportunities activities include (Sec. 4107): Career and college counseling/guidance Arts and music programs that promote problem solving and conflict resolution STEM programming and activities Accelerated learning History, civics, economics, geography, foreign language, and environmental education Community involvement

10 ESSA Update Title IV, Part A NEW BLOCK GRANT Safe and Healthy Students activities include (Sec. 4108): Drug and violence prevention School-based mental health services Health and safety practices in school/athletics Physical/nutrition education Bullying and harassment prevention relationship-building schools Dropout prevention and re-entry Training for school personnel in drug, violence, trafficking, and trauma

11 ESSA Update Title IV, Part A NEW BLOCK GRANT Effective use of technology may include (Sec. 4109): Professional learning tools, technology, devices, and content for adaptive learning programs Building technological capacity Developing strategies for use of digital learning technologies Blended learning projects Professional development Remote access for students in rural/remote/ underserved areas

12 ESSA Update NEW: Supplement, not Supplant for Title I, A Instead of looking at individual costs, compliance will be tested by looking at the methodology the LEA uses to allocate state and local money to each Title I school (same as currently done for schoolwide buildings). School must receive all state and local money it would have received if not a Title I school 3 presumptions of supplanting eliminated Not required to identify that any individual cost or service supported with Title I, Part A funds is supplemental

13 Procurement using Federal Funds Non-compliance with procurement requirements is the most common finding reported in recent single audits.

14 Procurement General Standards for Federal Purchases Use own written procurement procedures that comply with most restrictive of local, state and federal requirements. Open competition (to the extent required by each method) Maintain oversight to ensure contractor compliance. Maintain written standards of conduct covering, conflicts of interest real and or perceived for staff engaged in the selection, awarding or the administration of a contract. Document rationale for procurement method, contractor selection, etc.

15 Procurement Thresholds Federal vs State Federal - Uniform Grant Guidance 2 CFR Micro-purchase threshold = $3,500 (no quotes but must be reasonable price and to extent practicable distribute equitably) State Law School Districts RCW 28A (excludes books and WA grown food) Simplified acquisition threshold = $150,000 Small purchase procedures $3,500 - $150,000 (quotes from adequate number of sources) Formal competition More than $150,000 Small purchase procedures $40,000 - $75,000 (quotes from at least 3 sources) Formal competition Purchases: more than $75,000 Public works: $100,000 or more Public works small works roster $300,000 or less 15

16 Procurement Must follow most restrictive requirements when using federal funds Procurement Method Goods (includes textbooks) Services Micro-Purchase No required quotes. However, must consider price as reasonable, and, to the extent practical, distribute equitably among suppliers. $3,500 or less Must use more restrictive $3,500 federal threshold instead of $40,000 state threshold $3,500 or less Small Purchase Procedures (Informal) Obtain/document quotes from a reasonable number of qualified sources (at least three per RCW 28A ). $3,500 - $75,000 Must use more restrictive $75,000 state threshold instead of $150,000 federal threshold $3,500 - $150,000 Sealed Bids / Competitive Bids (Formal) More than $75,000 More than $150,000 Must use more restrictive $75,000 state threshold instead of $150,000 federal threshold Non-competitive proposals Appropriate only when: - Available only from a single source (sole source) - Public emergency - Expressly authorized by awarding or pass-through agency in response to written request from district - After soliciting a number of sources, competition is deemed inadequate 16

17 Procurement Contract Cost and Price Analysis If procurement exceeds the $150,000 Simplified Acquisition Threshold, a cost or price analysis is required. The method and degree of analysis depends on the facts surrounding the particular procurement. As a starting point, an independent estimate must be made before receiving of any bids or proposals.

18 Procurement - Competition Examples of Restricting Competition Placing unreasonable requirements on firms to qualify, Unnecessary experience and excessive bonding, Organizational conflicts of interest e.g. a contractor competes for a contract when they developed the specs, requirements, statements of work, invitations for bid, or RFPs. Specifying only a brand name product instead of allowing an equal product to be offered.

19 Procurement Use of Brand Names Provide a clear and accurate description of the technical requirements to be procured. The description must not unduly restrict competition. When impractical to otherwise describe the technical requirements, a brand name or equivalent description may be used as a means to define the procurement. Specific features of the named brand that must be achieved are to be clearly stated.

20 Procurement Important Points! Ensure your district s policy/procedures is updated to reflect new federal thresholds. Don t split purchases, whether the product is coming from the same vendor or not, if the only justification is to avoid a procurement threshold. Pay attention to repetitive purchases. Examples: 1) If you plan to purchase professional development from a vendor at 3 different times throughout the year, must aggregate the cost of each training. 2) Estimate the cost of purchasing fruits/vegetables for the year. Aggregate Term is not defined in the federal regulations. Depends on what you know at the time / particular circumstances. DOCUMENT procurement decisions / quotes.

21 Suspension and Debarment Protects the federal government from fraud, waste and abuse by not allowing business with entities who have been prohibited from participating in or receiving Federal assistance for various reasons (such as prior mismanagement of funds). Suspended or debarred entities are identified on the System for Award Management (SAM), a website administered by the U.S. General Services Administration.

22 Suspension and Debarment When does a district have to comply with suspension and debarment requirements? Before entering into the following covered transactions: Vendor contracts for goods and services that equal or exceed $25,000 All subawards (no $ threshold)

23 Suspension and Debarment Three options to comply with suspension and debarment requirement: 1. Check the System for Award Management (SAM) at Be sure to keep evidence. 2. Collect a certification from the entity. 3. Add a clause or condition to the covered transaction.

24 Procurement Questions Question #1 A district wants to purchase a site license for instructional program/data services. If they purchase a site license for 3 years, the price is reduced. Cost per year is about $19,000. Is it permissible to purchase these services for multiple years with Title I funds?

25 Procurement Questions Answer to Question #1 Yes, a three-year contract can be purchased. To comply with the period of performance, the district should charge Title 1 for the first year s license (and claim reimbursement for that year), and set up a pre-paid account for the next two years. At the beginning of each of the next two fiscal years, do a journal entry to charge Title I and claim reimbursement.

26 Procurement Questions Question #2 Can a vendor help draft specifications for Requests for Proposals (RFPs)?

27 Procurement Questions Answer to Question #2 A vendor involved in the development or drafting of specifications for an RFP has an organizational conflict of interest that would exclude the vendor from competing for the resulting procurements. The Department of Education understands that a grantee may need to inform itself about the capacity and capability of potential vendors in order to prepare an RFP. In the course of doing so, the grantee may contact a number of vendors to collect information necessary for developing the RFP, as long as the LEA poses its request for information broadly so that any potential vendor has an opportunity to provide input. Soliciting input from one or two vendors would, in most cases, create an unfair competitive advantage.

28 Procurement Questions Question #3 What if we need to purchase a particular brand and a similar brand will not suffice? For instance, we need to purchase a specific brand of computer equipment so it can be integrated into our existing system.

29 Procurement Questions Answer to Question #3 The Uniform Guidance does not require a grantee to abandon a technology or instructional approach just because a similar technology or instructional approach would cost less. The Department of Education also understands that in some limited situations, specifying a brand name may not restrict competition. If a grantee has already invested in a particular infrastructure or instructional framework, specifying a brand name compatible with the infrastructure or framework may be appropriate. But the grantee must find the lowest cost supplier of the technology or instructional approach.

30 Procurement Questions Question #4 Do we have to aggregate purchases for buildings/departments within our district?

31 Procurement Questions Answer to Question #4 Yes. However, if the services are clearly not the same type, regardless if it is a single contractor, then aggregation is not required. Focus on the type of service as opposed to the building or department.

32 Suspension and Debarment Questions Question #1 We added a suspension/debarment clause to our Purchase Order. Is this a sufficient method to comply with suspension and debarment requirements?

33 Suspension and Debarment Questions Answer to Question #1 Yes, adding a suspension/debarment clause to a purchase order is sufficient (acceptance of a purchase order forms a contract).

34 Suspension and Debarment Questions Question #2 To comply with suspension and debarment requirements, is it sufficient to check the list of debarred contractors on the WA Labor & Industries website?

35 Suspension and Debarment Questions Answer to Question #2 No. WA Labor & Industries maintains a list of debarred contractors who are not allowed to bid on or work on public works projects due to violations/infractions of prevailing wage law (chapter RCW), contractor registration law (chapter RCW), or industrial insurance law (chapter RCW). However, it does not verify that the entity is not suspended or debarred from doing business with the federal government.

36 Time and Effort

37 Time and Effort Who has to document time and effort? Generally, time and effort records are required for anyone with salary and benefits that are charged: Directly to a federal award. Directly to multiple federal awards, or any combination of a federal award (direct or indirect) and other federal, state or local fund sources. To any source that is used as a match for a federal program.

38 Time and Effort OLD Circular A-87 Requirements Single Cost Objective: Can the employee s salary be supported in full from each of the Federal awards on which the employee is working, or from the Federal award alone if the employee s salary is also paid with non-federal funds? Multiple Cost Objective: If the answer to the question above is no, the employee is working on multiple cost objectives. 38

39 Time and Effort NEW Uniform Grant Guidance Be supported by a system of internal controls which provides reasonable assurance that charges are accurate, allowable and properly allocated; Be incorporated into official records; Reasonably reflect total activity for which employee is compensated (not to exceed 100%); Encompass all activities (federal and non-federal); Comply with established accounting polices and practices; and Support distribution among specific activities or cost objectives. What do the changes mean for us? So, what now Maintain current time and effort systems for semi-annual certifications and PARs until additional guidance is received from OSPI.

40 Time and Effort What We Know Must have some type of documentation Time can be tracked by percentage or hours Track time by cost objectives Reconcile documentation to budgeted amounts Substitute Systems still allowed What We Don t Know Signatures? Time Periods? Electronic system? What is a good system of internal controls?

41 Time and Effort In June 2016, the Association of Education Federal Finance Administrators (AEFFA) submitted a proposal for new time and effort flexibilities to the Department. Currently waiting for formal response

42 Time and Effort Examples of Proposals Submitted Less Frequent Preparation Multiple Cost Objective Staff: Preparing PARs Quarterly or Semi-annually Single Cost Objective Staff: Prepare semi-annual certifications annually. Other Record Of Employees Activities (OREA) A job description/schedule clearly identifying cost objectives/account codes, no additional documentation should be needed, as long as internal controls in place to ensure changes to job duties are identified and accounted for timely. Roll-up Based on Others Time Using a roll up of employee effort to allocate effort for supervisors, clerical and support staff. Under this system, for example, the time spent by supervisors on purely supervisory activities may be allocated based on the average time allocations of the supervised employees. NOT YET APPROVED

43 Time and Effort Things to Consider Budget estimates: Do not qualify as a time and effort and must be adjusted to actual by end of the year Schoolwide Program: Make sure you know which programs are included in the schoolwide plan and determine time and effort accordingly (semi-annual certification vs. PAR) Reconciliations: No longer required to be done quarterly, but need to provide reasonable assurance that charges accurately reflect time worked Signatures/Dates: Make sure that signatures are dated after the end of the reporting period Cost Objectives: Make sure cost objectives are clearly identified on the time and effort documentation

44 Time and Effort Substitute System Substitute Time and Effort Systems: Alternative method for calculating and supporting compensation charges to federal program Example: sampling of time or student counts Must be approved by OSPI prior to use (not annually)

45 Time and Effort Fixed Schedule Flexibility Use schedules instead of PARs Certified semi-annually by employee and supervisor Who can use it: Staff that work a fixed pre-determined schedule, and Work on multiple activities/objectives Complete and return the certification form to debbie.crawford@k12.wa.us More information at

46 Time and Effort Scenarios The pointy haired boss is a federal programs administrator. He works 8 hours per day and is budgeted 25% in each of 4 programs. What type of time and effort is required? Should his time and effort reflect 2 hours every day for each program? What type of documentation is required to support his time and effort?

47 Time and Effort Scenarios He would be required to do a monthly PAR because of the time spent in different programs. His time should not reflect 2 hours for each program each day, it must be based on actual time worked. He needs to maintain a calendar (or other documentation) that supports his time and effort documentation for time charged to each program.

48 Time and Effort Scenarios Dilbert works in a Title I, targeted assistance building and is splitfunded among state and federal programs. He works the same schedule with the same hours from week to week. What type of time and effort is required?

49 Time and Effort Scenarios It depends on whether the district is using the additional flexibility for employees with a fixed schedule. If so, Dilbert could use a semi-annual certification with a schedule that clearly identifies the cost objectives. If not, he would need to do a monthly PAR.

50 Time and Effort Scenarios Alice works in a schoolwide building. The schoolwide program includes Title I-A and Basic Ed. She works 50% of her day as a basic ed. teacher and 50% as an ELL para educator charged to State Transitional Bilingual. What type of time and effort is required?

51 Time and Effort Scenarios Alice would need to maintain a monthly PAR, because TBIP cannot be combined in a schoolwide program, or could do a semi-annual certification if using the fixed schedule flexibility.

52 Time and Effort Scenarios Asok is going to be on leave for 3 months. A long-term substitute is hired to replace him. He worked in Title I, A. Does the substitute need to prepare time and effort?

53 Time and Effort Scenarios Yes, if an employee is hired to replace Asok on a long-term basis, they would prepare the same type of time and effort as Asok was.

54 Time and Effort Scenarios Wally works 100% of his time as a Title I-A teacher in a targeted assistance building, although half of his salary is funded from BEA. What type of time and effort is required?

55 Time and Effort Scenarios Wally would need to prepare a semi-annual certification, since he is performing the same activities and the funding is interchangeable.

56 Time and Effort Scenarios A general ed. classroom teacher works full time and is charged 100% to basic ed. The teacher also has a supplemental contract to provide after school tutoring services to Title I students and is paid 100% out of Title I for those activities. What type of time and effort is required?

57 Time and Effort Scenarios The teacher would complete a semi-annual certification for the supplemental contract only, since they are working on a single-cost objective. Each employee contract is treated separately when determining whether time and effort is needed.

58 Time and Effort What s wrong with this picture?

59 Time and Effort What s wrong with this picture?

60 Time and Effort What s wrong with this picture?

61

62 Contact Information Jennifer Carrougher Director, Federal Fiscal Policy/Grants Management (360) Toni Bernethy Director, Audit Management and Resolution (360)