You Should Have Two Handouts…

•Perkins 101

•One Titled “Perkins 101 Library”

1

OREGON

• Arizona Department of Education

• Career & Technical Education Section

• Phoenix, AZ

• 602-542-5349

• ted.davis@azed.gov

2

• The greater the “Risk” the more you need to “Document” the how’s and why’s of the option you choose…

• Include the specific official sources you relied on and cite the specific reference involved…

• CTB*

3

CTB – Cover Thy Butt

• There have been CTE/Vocational programs funded since 1917 - (Smith-Hughes Vocational Act)

• Perkins is not a major educational grant. However, it is still the largest educational grant targeted at our high-school-age population

4

5

• Reauthorization?

o My guess - Not until after the presidential election, if then ?

o The Workforce Investment Act has been up for reauthorization since 2003

•The failure of the Budget Super Committee leaves the threat of a 9.5% across-the-board budget reduction. My guess is that the President and Congress will find a way around this issue until after the election also

• Perkins is “split-funded” between secondary (high school) and postsecondary (community college) programs

• The average split nationally is 60.33% secondary & 39.14% postsecondary

• The postsecondary split ranges from a 12.18% low (PS - Delaware) to a 75% high (Guam)

• The split is determined by each state

6

• Perkins funding has stagnated and declined over the past decade

• Tech Prep (Title II of Perkins) funding was eliminated. (The law is still on the books.)

• Some good news – It appears Perkins is tentatively flat-funded for the grant period beginning July 1, 2012

• In the absence of the federal deficit problem improving, unknowns as to control of the White House and Congress the grant year starting July 1, 2013 may be a ‘challenge’

• The Perkins hold-harmless language is still alive and well (Section 111(a)(5)) ; which is good news for states like Iowa and 13 others who had small or declining 5-17-year-old populations at the beginning of Perkins III (FY 98)

If there are major cuts to Perkins, expect a fight from moderate sized states who have large percentage growth in their target census figures

7

8

• Current discussions sound a lot like what Tech Prep was supposed to look like –

o Programs of Studyo Consortiums (both secondary and postsecondary members)o State allocations would still be census drivenoThere may be several options as to how states would fund Secondary/Postsecondary consortiums

•The fate and look of Career & Technical Education is to a great degree dependent on the forthcoming elections and the CTE community

•You cannot use Perkins funds to lobby – You can make your vision of what CTE should look like known to your own congressional delegations as a private citizen. I’d recommend that you, “don’t leave it up to someone else”

9

10

• Look Over The Library References…

• EDGAR, the OMB Circulars will still be around – regardless of Perkins’ fate… get to know them…

11

• Perkins Management & Reporting• Maximizing Your Programs Federal Dollars• Maintenance of Effort Matching Requirements• The Single Audit Process• Effective Subrecipient Monitoring for Career and

Technical Education Programs

http://cte.ed.gov/FMI/

(New slide – Not in your handout…)

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 (Perkin Section 111(a)(2) )

In-State Allocations – Secondary• District census data

o 70% based on 5-17 census count at or below poverty guidelines

o 30% total district census data (Perkins 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 (PerkinsSection 132 (a)(2))

12

Exceptions - Area CTE/Vocational Schools• Most commonly funded via a cooperative

agreement (Perkins Section 131 (e))

Exceptions - Secondary (Perkins Section 131(C))

• Formula award less than $15ko Consortium or waiver approval

Exceptions – Postsecondary (Perkins Section 132(C))

• Formula award less than $50ko Consortium or waiver approval

A Secondary/Post Secondary “Split” of 15% or less allows a state to develop its own allocation formula (Perkins Section 133(a)(2))

13

GETTING STARTED

STATES – Approved State Plan

RECIPIENTS – Approved Local Application

Pitfalls – • Just don’t write “something” to get the money

• State Plan – o Follow it or amend it o Avoid the formal amendment process

• Local applications – o Follow it or amend it o Check your compliance mid-grant and 90 days

before it ends

14

Perkins is Not an Entitlement Grant

•You have to have one or more program(s) of sufficient size, scope and quality

•If your allocation is $15K or less (Secondary) or $50K or less (Postsecondary) you will need to either –

o Be accepted for a waiver, or you must enter into a consortium agreement

Document the Waiver -

• The recipient has a viable program and they are not able to enter a consortium -

o Rural isolatedo Lack of consortium partner(s)

(Perkins Section 131(c)(1-2); Section 132(a)(3-4); Section 132(C); Section 132(C)(2))

15

16

Perkins Funding is SUPPLEMENTAL FUNDING…

The funding of CTE programs is really the responsibility of each individual state…

States –Plan must be judged “substantially approvable” or a state may not begin to obligate Perkins fundsRecipients – “Same boat” – You cannot obligate grant funds until your 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)

17

You have your approved application – You’re ready to go and spend your money! What can you spend $$$ on?

•Follow your approved application/plan

•States – • Section 3 Administration, your 5% Admin Setaside• Section 124 – State Leadership Activities, your 10% Setaside • Do Not Exceed These Percentages!

18

• Read - “Selected Items of Cost” • Secondary , States, BIE - OMB A87, Appendix B• Postsecondary - OMB A21, Section J• Charter Schools - OMB A122, Appendix B

19

You have your approved application – You’re ready to go and spend your money! What can you spend $$$ on?

•Follow your approved application/plan

• Recipients – • Perkins Section 134 – Your Local Plan• Perkins 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)

• Read - “Selected Items of Cost” • Secondary, States, BIE - A87, Appendix B• Postsecondary - A21, Section J• Charter Schools - A122, Appendix B

Maintenance-of-Effort (MOE) & Dollar-For-Dollar Match

• YOU HAVE TWO ‘MOE’ REQUIREMENTS

• IN THE AGGREGATE (Perkins Section 311(b))

• YOUR 5% ADMIN FUNDS ALSO HAVE AN MOE REQUIREMENT (Perkins Section 323)

• STATES HAVE A DOLLAR-FOR-DOLLAR ADMINISTRATIVE MATCH REQUIREMENT (Perkins Section 112(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 or my workshop for the “Not-So-New” fiscal breakout session

Cuts in Perkins funding will make it easier for states to meet their Perkins MOE requirements as states also cut CTE funding

(Perkins Section 311(b)(1)(C) & Perkins Section 323(b))

20

States

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.

21

Eligible Recipient

Secondary Postsecondary

Carl D. Perkins Section 135 – Local Uses of Funds

Your Approved Local Plan

OMB Circular A-87; Selected Items of Cost

OMB Circular A-21; Selected Items of Cost

State Statutes -

• Procurement

• Capital Assets

• Gifts

• Travel

• Pre-paid costs

Carl D. Perkins Section 135 – Local Uses of Funds

Your Approved Local Plan

22

General Test of Allowable Costs (Secondary - A87, Part 225, Appendix C, Basic Guidelines)

• Fits with your approved application/plan

•Allowable per the appropriate OMB Circular

• Necessary and reasonable (prudent person)

• Allocable cost to Perkins

• Consistently treated

• Consistent with your organization’s policies & state/local laws

• Incurred in accordance with GAAP

• Not charged elsewhere

• Adequately documented..

23

24

Worth repeating…

•DOCUMENT…•DOCUMENT…•DOCUMENT…

The lack of adequate documentation is one of the most significant causes of “questioned costs” – a.k.a. “Return the money!”

25

Things That Can Get You

• A Must Do - “Time-and-Effort” (T&E) reporting

(Samples in USDOE Indirect Cost Group Cost Allocation Guide – “The Green Book”)*

• Full time –

• ‘Certify’ at least semi-annually

• T&E records must be signed by the employee or a supervisor with “first hand” knowledge

“Time & Effort” - SALARIES

26

*The “Green Book” – cost allocation guidance…

http://www2.ed.gov/about/offices/list/ocfo/fipao/guideigcwebsite.pdf Secondary, SEAs, Appendix VIII

• Multiple ”cost objectives” –

• Regular Personnel Activity Reports (PARs)

• “Allocable” to your Perkins grant

• After-the-fact reporting

• Signed by employee

• Coincide with pay periods; at least monthly

“Time & Effort” – SALARIES (Continued)

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.

27

• EDGAR (34 CFR §80.1) “personal property that costs $5,000 or more”

• The real issue is “state inventory requirements” - more stringent than EDGAR 34 CFR § 80.32(b) – lower thresholds, “stewardship” requirements, etc.

• The OIG (Office of Inspector General) has issued findings for “attractive theft items” – cell phones, digital cameras, flat screen monitors, etc. that cost less than $5,000

• When is something a supply?

• 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 equipment”…

Still Generating Audit Findings - EQUIPMENT

28

• Get it in writing - your approved application

• Costs like your CTE computer labs

• Specialized workstations

• The cost of connecting equipment

• Etc.

• Avoid district traditional educational programs costs – 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

EQUIPMENT CONT.

29

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…

STUDENT ORGANIZATIONS

States – Section 124(c)(4)Local Recipients – Section 135(c)(5)

30

(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.

(3) The support of vocational student organizations may not include—

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…”

31

• Alcohol

• Entertainment expense

• Awards (gifts)

• Promotional items (freebies)

• Promotional advertising

NOT ALLOWED

• 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)

32

• “NO”

• 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.

FOOD & BEVERAGES OMB A87 B.3; OMB A21 J.3OMB A87 B.14; OMB A21 J.17OMB A87 B.27; OMB J.32OMB A87 B.43; OMB J.53

33

• Travel is allowable when it supports your approved grant or plan

• Meals, lodging, etc. are 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

TRAVEL FOOD & BEVERAGES

34

OMB A87 B.27 (Comparable language in OMB A21 J.32)

“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

MEETINGS & CONFERENCES/FOOD & BEVERAGES

35

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,

o “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

MEETINGS & CONFERENCES/FOOD & BEVERAGES

36

• Memberships for a state or district are OK – for the position

o Your state’s CTE Director position

o 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.)

MEMBERSHIPS, SUBCRIPTIONS & PROFESSIONAL ACTIVITY COSTS

37

• 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.

AWARDS

OMB A87 B.1.f(3); OMB A21 J.1.f(3)OMB A87 B.20; OMB A21 J.22

38

• Promotional items (freebies)

• Promotional advertising

Do Not Use Perkins Funds For -

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.

39

The most common problems, goofs!

40

41

AT THE HEART OF ALMOST EVERYQUESTIONED COST* FINDING –

•Inadequate or no DOCUMENTATION

•Inadequate or no DOCUMENTATION

•Inadequate or no DOCUMENTATION

* a.k.a. - “Give back the money….”

• Failure to follow your approved application/plan

• Failure to amend your approved application/plan

42

PROCUREMENT –

•INADEQUATE DOCUMENTATION

•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

43

• PROPERTY MANAGEMENT ISSUES –• To “cover thy butt” you have to keep your own set of documents

o Purchase orderso Receiving documentso A mini-inventory, with item location info

• Keep it current• State laws –

o An inventory system that does not meet your own state’s property management requirements

o Lower dollar threshold?o “Stewardship” requirements? o Procedures in place for attractive theft items under $5K

• Reconcile purchases to your Perkins annual fiscal completion report

44

TIME AND EFFORT – Personnel Activity Reports (PAR)

• Nationally there have been some significant questioned cost audit findings – in the $100K plus range…

45

More TIME AND EFFORT -

• 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

46

More 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)

47

Easy audit findings for States –

• Regardless of the topic – o Lack of documentation or inadequate documentation

•Time & Effort –o Full-time staff without assuranceso T&E reports not signed/approved by supervisor

•Procurement – o Professional service contractors not checked against the

Federal Debarment data base. If who you paid is on the Debarment list you now have a “questioned cost”

•Perkins Performance Measures outcomes not made available to the public – Section 113(b)(4)(C)(v)

48

• 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!

49

Questions?

50