ESSA Federal Program Director Training

1. ESSA Federal Program Director Training Presented by: Jennifer Carrougher, OSPI Director of Federal Fiscal Policy Toni Bernethy, OSPI Director of Audit Management and Resolution

2. Agenda • ESSA • Uniform Grant Guidance (UGG)

3. Every Student Succeeds Act (ESSA) ESSA: Grants Continuing

4. Every Student Succeeds Act (ESSA) ESSA: Grants Eliminated

5. ESSA Fiscal Highlights Per Pupil Expenditure Reporting (Report Card) Each State report card shall include the following information: The per-pupil expenditures of Federal, State, and local funds, including actual personnel expenditures and actual non-personnel expenditures of Federal, State and local funds, disaggregated by source of funds, for each local educational agency and each school in the State for the preceding fiscal year.

6. ESSA Fiscal Highlights School Improvement (Sec. 1003) • OSPI must reserve 7% of their Title I, A grant award to support school improvement activities. Direct Student Services (Sec. 1003(a)) • OSPI could reserve up to 3% of their Title I, A grant for grant awards to districts for “Direct Student Services” • Concerns about having to maintain “SES” like services and taking funds away from district Title I allocations. • OSPI has opted out of this optional reservation.

7. ESSA Fiscal Highlights Title II, A Formula (Sec. 2101(c)) • Makes 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 • LEA-level allocation also switches to 20% population, 80% poverty and eliminates hold harmless, but no transition period

8. ESSA Fiscal Highlights Title III, Part A (Sec. 3115) Administrative Cap • Under NCLB, there was a 2% cap on administrative expenses, which included both indirect and direct expenses. • Under ESSA, the 2% cap is now only applicable to “direct administrative expenses”.

9. ESSA Fiscal Highlights Title IV, Part A – Student Support and Academic Enrichment NEW Block Grant • Districts receive an amount based on their statewide relative share of Title I, Part A allocation • May spend up to 2% on administration (Direct) • Minimum grant of $10,000 • Must prioritize funding to schools with greatest need, highest poverty levels Available Funding?? • ESSA authorized funding, FY17: $1.65 billion • President’s FY17 budget request: $500 million

10. ESSA Fiscal Highlights Title IV, Part A 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 on “safe and healthy students” activity • Some portion of funds to support effective use of technology (no more than 15% on technology infrastructure)

11. ESSA Fiscal Highlights Title IV, Part A “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

12. ESSA Fiscal Highlights Title IV, Part A “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

13. ESSA Fiscal Highlights Title IV, Part A “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

14. ESSA Fiscal Highlights Title V – Transferability (Sec. 5103) • Now allows LEAs to transfer all of their funds under Title IIA and Title IVAbetween each of those programs, and into (but not out of) Title I Parts A, C or D, Title IIIA, or Rural Education. • Why would I want to do that????

15. ESSA Fiscal Highlights Blending/Braiding of Funds Braided Funding – Financial resources from several individual funding streams coordinated by all stakeholders to support a single initiative, so each individual award maintains its specific identity. Blended Funding – Financial resources from several individual funding streams merged by all stakeholders into one award and each award loses its specific identity. NOTE: Have to still meet the intent and purpose of each individual funding stream.

16. The New EDGAR Education Department General Administrative Regulations Part 75 – Direct Grant Programs Part 76 – State-Administered Programs (Part 80 – Removed and substance replaced by Title 2, Part 200) Part 81 – General Education Provisions Act Title 34 OLD 34 CFR Parts 75, 76, and 81 remain 2 CFR Part 200 – Cost/Administrative/Audit Rules (supersedes OMB circulars) 2 CFR Part 3474 – USDE Exceptions – Adopts Part 200 2 CFR Part 3485 – Nonprocurement Debarment/Suspension Title 2 NEW

17. Prior Rules – Now in 2 CFR Part 200 • A-87 – Cost Principles – State / Local Gov’t • A-102 – Administrative Regulations - State / Local Gov’t • A-133 – Audit Regulations • A-21 – Cost Principles – Higher Education • A-122 – Cost Principles – Non-Profits • A-110 – Administrative Regulations – Higher Education and Non-Profits

18. Uniform grant guidance (UGG)

19. Uniform Grant Guidance (UGG) • Also referred to as: Omni Circular, Super Circular, Time to Retire Circular • First major reform of federal administrative regulations in over 25 years • Effective for new grant awards for a fiscal year starting on or after December 26, 2014

20. 2 CFR Part 200 Subpart A: Definitions Subpart B: General Provisions Subpart C: Pre-Federal Award Requirements and Content of Federal Awards Subpart D: Post Federal Award Requirements (previously A-102) Subpart E: Cost Principles (previously A-87) Subpart F: Audit Requirements (previously A-133)

21. Subpart D (200.300 - 200.345) Post Federal Award Requirements

22. Subpart D – Post Federal Award Requirements Period of Performance (200.309) Determining Obligations (34 CFR 76.707) Federal awards contain a specified period of time that funds are available: • Generally 15 months (July 1 through September 30 of succeeding year) – OSPI ends with district Fiscal Year for ease of reporting (8/31) • 12 month additional period that allowable carryover funds may be obligated (Tydings Period) Exception to Tydings: Direct grants to districts from ED – the funding period is stated in the award notification and no additional 12 months apply

23. Subpart D – Post Federal Award Requirements Limitations on Carryover Generally carryover is eligible for the additional 12 months. Exceptions are: • Title I, Part A (CFDA 84.010) – districts that receive in excess of $50,000 are limited to a 15% carryover (a waiver may be obtained once every three years). • Career and Technical Education (CFDA 84.048) – carryover is returned to the state for reallocation. • OSPI has further limits for some programs (Homeless, Title I, C, 21st Century, Title I, D).

24. Subpart D – Post Federal Award Requirements • When are funds initially available to spend? • Formula Grant: • When the district submits a “substantially approvable” application – except for IDEA, which requires the full application. • When the state can begin obligating the funds (generally July 1) • Competitive Grant: • Competitive grants can include pre-award costs (with prior approval), so generally the funds are available as of July 1 of each year.

25. Subpart D – Post Federal Award Requirements Obligation of Funds - When the district has entered into a binding commitment to pay out federal funds. The timing depends on the type of activity the funds are being used for. The following table shows when an obligation is made:

26. Subpart D – Post Federal Award Requirements Equipment (200.313) Exception– Equipment and supplies must be removed from private schools when no longer needed for federal program/project. • Equipment must be used in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the Federal award. • It may be shared provided such use will not interfere with work on the original projects/programs, in the following priority: • Other programs/projects supported by the federal awarding agency • Programs/projects from other federal agencies • Use for Non-federally funded programs

27. Subpart D – Post Federal Award Requirements Procurement Standards (200.317 – 200.326) NEW: Added a “micro-purchase” $3,500 threshold which doesn’t require quotes but make sure price is reasonable and distribute equitably among suppliers. NEW: Increased small purchases threshold from $100,000 to $150,000 - at least 3 quotes must be obtained (and documented) for purchases under that threshold.

28. Procurement requirementswhen using federal funds Note: Effective October 1, 2015, the micro-purchase threshold was increased from $3,000 to $3,500.

29. Subpart D – Post Federal Award Requirements Procurement Standards (200.317 - 200.326) Some important points: • 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. Example: If you plan to purchase professional development from a vendor at 3 different times throughout the year, must aggregate the cost of each training. • Documentprocurement decisions / quotes.

30. Subpart E (200.400 - 200.475) Cost Principles

31. 31 Subpart E – Cost Principles Basic standards for allowability remain the same. All Costs Must Be: • Necessary, Reasonable and Allocable • Conform with federal law and grant terms • Consistent with state and local policies • Consistently treated • In accordance with GAAP • Not included as match • Net of applicable credits • Adequately documented

32. 32 Subpart E – Cost Principles REASONABLE / NECESSARY • Do I really need this? • Is the expense targeted to valid programmatic/administrative need? • Is this the minimum amount I need to spend to meet my need? • Do I have the capacity to use what I am purchasing? • If I were asked to defend this purchase, would I be able to? • Did I pay a fair rate?

33. 33 Subpart E – Cost Principles ALLOCABLE • A cost is allocable to a Federal award or cost objective if the goods or services involved are chargeable or assignable in accordance with relative benefits received. • Can only charge in proportion to the value received by the program.

34. 34 Subpart E – Cost Principles Meals at Conferences/Meetings (hosted by district) • Conference meals are allowable onlywhen it is reasonable and necessary to the completion of actual work. • A working lunch may be allowable ifthe conference must conduct sessions at that time to keep the number of conference days to a minimum. • Snacksand other meals typically are notreasonable and necessary because these costs can be purchased by attendees using non-grant funds and the snacks are not essential to the conference objectives.

35. Subpart E – Cost Principles UNITED STATES DEPARTMENT OF EDUCATION Office of the Chief Financial Officer MEMORANDUM to ED GRANTEES REGARDING THE USE OF GRANT FUNDS FOR CONFERENCES AND MEETINGS A grantee hosting a meeting or conference may not use grant funds to pay for food for conference attendees unless doing so is necessary to accomplish legitimate meeting or conference business. A working lunch is an example of a cost for food that might be allowable under a Federal grant if attendance at the lunch is needed to ensure the full participation by conference attendees in essential discussions and speeches concerning the purpose of the conference and to achieve the goals and objectives of the project.

36. Subpart E – Cost Principles Frequently Asked Questions to Assist U.S. Department of Education Grantees To Appropriately Use Federal Funds for Conferences and Meetings When a grantee is hosting a meeting, may the grantee use Federal grant funds to pay for food, beverages, or snacks? • Generally, there is a very high burden of proof to show that paying for food and beverages with Federal funds is necessary to meet the goals and objectives of a Federal grant. When a grantee is hosting a meeting, the grantee should structure the agenda for the meeting so that there is time for participants to purchase their own food, beverages, and snacks. In addition, when planning a meeting, grantees may want to consider a location in which participants have easy access to food and beverages. • While these determinations will be made on a case-by-case basis, and there may be some circumstances where the cost would be permissible, it is likely that those circumstances will be rare. Grantees, therefore, will have to make a compelling case that the unique circumstances they have identified would justify these costs as reasonable and necessary.

37. Subpart E – Cost Principles Meals at Conferences/Meetings (hosted by district) ED Restrictions on Food • Is a working lunch necessary? • Is the portion of the agenda to be carried out during lunch substantive and integral to the overall purpose of the conference or meeting? • Is there a genuine time constraint that requires the working lunch? • If a working lunch is necessary, is the cost of the working lunch reasonable? • Has the SEA or LEA carefully documented that a working lunch is both reasonable and necessary?

38. Subpart E – Cost Principles Time and Effort Reporting (200.430) The Prior A-87 Rule Semi-Annual Certifications Personnel Activity Report • If an employee works on a singlecost objective: • After the fact • Account for the total activity • Signed by employee or supervisor • Every six months (at least twice a year) • If an employee works on multiplecost objectives: • After the fact • Account for total activity • Signed by employee • Prepared at least monthly and coincide with one or more pay periods Note: Still current until we receive more guidance on alternative methods

39. Subpart E – Cost Principles Time and Effort Reporting (200.430) • 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. NEW! These records MUST: • Be supported by a system of internal controls which provides reasonable assurance charges are accurate, allowable and properly allocated; • Be incorporated into official records;

40. Subpart E – Cost Principles Time and Effort Reporting (200.430) 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. Subpart E – Cost Principles Time and Effort Reporting (200.430) • In June 2016, the Association of Education Federal Finance Administrators (AEFFA) in partnership with Brustein and Manasevit, PLLC submitted a proposal for new time and effort flexibilities to the Department. • Currently waiting for formal response…

42. Subpart E – Cost Principles Time and Effort Reporting (200.430) 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 the department.

43. Subpart E – Cost Principles Time and Effort Reporting (200.430) • The Department of Education (ED) has authorized OSPI to allow semi-annual certifications for multiple funded staff that have a fixed schedule. • Guidance documents can be found at: http://www.k12.wa.us/SAFS/TT/TimeEffort.asp Fixed Schedule Flexibility NOTE: We will incorporate this guidance into the next update of the Time and Effort Bulletin.