Tennessee Summer CTE Conference “Beltway Politics on the Future of CTE” July 16, 2008

1. Tennessee Summer CTE Conference“Beltway Politics on the Future of CTE”July 16, 2008 Michael Brustein, Esq. Brustein & Manasevit 3105 South Street, NW Washington, DC 20007 (202) 965-3652 www.bruman.com mbrustein@bruman.com

2. Bush’s “Lame Duck” Status has Resulted in Beltway Paralysis

3. Republicans Gearing for Significant Losses in Congress

4. NCLB Legacy in Doubt Under McCain or Obama

5. FY08 Review: Veto & Omnibus Democrats sought over $20 billion above the President’s request, and increases for education programs. Congress could not override Presidential veto. The final bill contains only a few key increases: Title I: Up $1.2 billion to $14 billion; Special Education: Up $285.5 million to $12 billion; Pell Grants: Up $544 million to $14.2 billion; School Improvement Grants: Up $366 million to $491 million (a 293% increase), among others

6. FY08 Review: Veto & Omnibus And a number of cuts: Reading First; Career and Technical Education; Title V Innovative Programs; Safe & Drug Free Schools; Even Start, and others. All of the programs in the omnibus bill received an across the board cut of 1.747% from the already agreed upon levels.

7. President’s FY09 Request • “President proposes and Congress disposes.” – Secretary Spellings • Feb. 4: President requested a $3.1 trillion budget: • $59.2 billion for U.S. Dept. of Education; • $24.5 billion for NCLB; • Eliminates 47 ED Programs for a requested savings of $3.3 billion;

8. President’s FY09 Request • 47 ED programs would be zeroed under the proposed FY09 Budget, including: • Career & Technical Education; • Tech Prep; • Arts in Education; • Advanced Placement; • Even Start, and others.

9. Congressional Budget Act 302(a) House FY09 Budget resolution: $7.1 billion increase over the President’s request and about 9% over FY08 for “function 500” spending, (Labor, HHS and Education). Senate FY09 Budget Resolution: $5.4 billion over the President’s request and an 8% increase over fiscal year 2008 levels for Labor, HHS and Education).

10. Reactions • Democrats criticize President’s budget for continuing to ignore domestic priorities. • “Because either ... Clinton or Obama will be president in less than a year, if we have to delay with a [continuing resolution] next year, we'll deal with it," speculated Senate Majority Leader Harry Reid (NV).

11. Reactions “I’m not about to waste the time of this committee with a needless eight-month scramble over money if the president continues to stick by his original requests…. I want to work things out now or wait until a new president comes to act like an adult.” - House Appropriations Chairman David Obey (D-WI), House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, Feb. 27, 2008

12. Reactions President Bush will reject any bill exceeding the Administration's request: “I want to reiterate that appropriations bills that exceed the president's reasonable and responsible spending levels will be met with a veto," OMB Director Jim Nussle told the appropriators in March.

13. How does the Bush Administration justify ZERO funding for CTE? “We are all about the same endeavor. How we arrive there is where we are going to disagree.” -Troy Justesen, March 2008

14. Based on poor ratings (ineffective) for Perkins under the OMB Program Assessment Rating Tool (PART), funds should be dedicated to improving high school education through NCLB

15. So How has the Federal role in CTE changed? • Is OVAE the “Engine” driving the train?

16. What are the Key Implementation Issues of Perkins IV? • Opting out of Perkins • Unfunded Mandate • Remedial Courses • Direct Assistance to Students • Allocability • Supplanting • Support for Student Organizations

17. Can my District / Institution opt out of Perkins IV? Section 8(b) “no preclusion of other assistance”

18. Unfunded Mandates (Section 8(a)) No employee of the Federal Government shall mandate a State or any subdivision thereof to spend any funds or incur any costs not paid for under this Act. Who pays for 3rd party skills assessments?

19. Prohibition on Developmental / Remedial CoursesA 44 Year Change in Federal Policy Can tutoring be provided to “special population” students?

20. “Assistance may only be provided to an individual to the extent it is needed to address barriers to the individual’s successful participation in CTE.”-Congressional Record H5807 (7/25/06)

21. May Direct Assistance be provided to Special Populations? “Special populations may need direct assistance to be able to participate successfully in CTE. These supportive services include such services as transportation, child care, dependent care, tuition, books, supplies, etc.” -Congressional Record H5806 (7/25/06)

22. Burden on Eligible Recipient to Identify CTE students, and apply A-87 “Allocability” to: • Salaries • Equipment • Supplies • Curriculum Development • Professional Development

23. Supplement, NOT Supplant

24. Supplement, NOT Supplant • Cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with state or local funds • Always ask: “What would have happened in the absence of federal funds?”

25. Supplement, NOT Supplant, cont… • A-133 Compliance Supplement presumes supplanting in 2 situations: • Used federal funds to provide services the SEA or LEA is required to make available under other federal, state or local laws • Used federal funds to provide services the SEA or LEA provided with state or local funds in the prior year

26. Supplement, NOT Supplant, cont… • Presumption may be rebutted: • If SEA or LEA demonstrates it would have not provided the services with state or local funds if the federal funds were not available

27. Supplement, NOT Supplant, cont… • To rebut presumption show: • Fiscal or programmatic documentation to confirm that, in the absence of federal funds, would have eliminated staff/services in question. • State or local legislative action • Budget histories and information

28. A Road Map to former Regulations on Student Organizations 104.513 Activities of Vocational Education Student Organizations

29. (a) State may use funds under its basic grant to support activities of vocational education student organizations which are described in its approved Five-Year Plan and annual program plan and which are:

30. An integral part of the vocational instruction offered • Supervised by vocational education personnel who are qualified in the occupational area which the student organization represents; and

31. Available to all students in the instructional program without regard to membership in any student organization. (b) An integral part of vocational instructional:

32. (1) Training in an organized educational program which is directly related to the preparation of individuals for paid or unpaid employment in a career requiring other than a baccalaureate or higher degree; or (2) Field or laboratory work incident to the vocational training; or

33. (3) Development and acquisition of instructional materials, supplies, and equipment for instructional services. • (c) An integral part of vocational instruction does not include: (1) Lodging, feeding, conveying, or furnishing transportation to conventions or other forms of social assemblage;

34. (2) Purchase of supplies, jackets, and other effects for students’ personal ownership; (3) Cost of non-instructional activities such as athletic, social, or recreational events; (4) Printing and disseminating non-instructional newsletters;

35. (5) Purchase of awards for recognition of students, advisors, and other individuals; or (6) Payment of membership dues.

36. USDE is relying less on Single Audits and more on conducting their OWN monitoring reviews of Internal Controls of Grantees/Subgrantees

37. New Risk Management Initiatives “Risk Never Sleeps”

38. Both State and USDE Now Using Risk Management Tools

39. Grantees/Subgrantees must be more proactive to ensure programs are managed properly

40. A-133 Audits have some value, but not as invasive as more intense program monitoring.

41. New in A-133 • Stricter audit standards beginning FY 2007! • For every compliance requirement selected for audit, the auditor must assess the likelihood of whether agency’s internal controls can prevent and detect noncompliance that is “more than inconsequential” from occurring in a timely manner • Materiality threshold lowered Bottom line: More internal control findings!

42. Significant Changes in ED Monitoring OCFO will take Responsibility for Fiscal Side

43. Grant Administration • Three major “systems” in grants management: • Financial management • Procurement • Inventory management

44. What Rules Apply? • State and local agencies must use fiscal control and fund accounting procedures that will ensure the proper disbursement of, and accounting for, federal funds • Section 441 of GEPA (general assurances) • Section 76.702 of EDGAR

45. What Does that Mean? • All recipients of federal funds must be able to: • Spend federal money correctly; and • Prove that they spent federal money correctly

46. Financial Management: Common Problems • Controlling allowable costs • Clear record trail • Cash management

47. Potential Solutions:Allowable Costs • Lists of allowable/unallowable costs • Florida – Reference Guide for State Expenditures: http://www.fldfs.com/aadir/reference_guide/ • Tulane University – Policy for Unallowable Cost Categories: http://www.tulane.edu/~tams/forms/instructions/unallowable.pdf

48. Potential Solutions:Allowable Costs (cont.) • Checklists • Is the cost consistent with federal cost principles • Is the cost allowable under the relevant federal program • Is the cost consistent with program specific fiscal rules • Is the cost consistent with EDGAR/special conditions imposed on the grant

49. Potential Solutions:Allowable Costs (cont.) • Guidance to subgrantees: • Ohio – Uses of Funds Manuals: https://ccip.ode.state.oh.us/ccip/doclib/doclib_group.asp?DocGroupID=1638

50. Practical Solutions:Allowable Costs (cont.) • Strong application/budget process • Link program elements to use of funds