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What You Need to Know!

Open and Honest: Transparency Act Requirements. What You Need to Know!. Sound Check. Audio is available via the internet Please be sure your— speakers are on & your volume turned up. Agenda. Highlight the Transparency Act Explain the new reporting requirements

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What You Need to Know!

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  1. Open and Honest: Transparency Act Requirements What You Need to Know!

  2. Sound Check Audio is available via the internet Please be sure your— speakers are on & your volume turned up

  3. Agenda • Highlight the Transparency Act • Explain the new reporting requirements • Assess your ability to capture the data • Provide tips for ensuring data quality • Identify submission procedures • Take your questions

  4. Presenter David J. Downey U.S. Department of Education Office of the Secretary Risk Management Service

  5. Panelists U.S. Department of Education Ayisa Crowe Office of the Secretary Pedro Romero Office of the Secretary Constance Davis Office of the Chief Financial Officer

  6. Special Guest • Karen Lee • Office of Management and Budget • Lead for Open Government in the • Office of Federal Financial management • Oversees the implementation of Federal • spending transparency for grant awards • among other areas of financial management

  7. Transparency Act Overview • Federal Funding Accountability and Transparency Act • AKA: FFATA • Signed into law September 6, 2006; amended in ‘08 • Purpose: To empower every American with the ability • to hold the government accountable for each • spending decision. The end result is to reduce • wasteful spending in the government. http://www.ffata.org/ffata/ffataact.html

  8. Who is Impacted? The Transparency Act or FFATA legislation requires information on Federal awards (Federal financial assistance and expenditures) be made available to the public via a single, searchable website. This impacts the awarding agencies and you the grantees and subrecipients.

  9. New Reporting Requirements • Take effect on October 1, 2010 • Are located in 2 CFR Part 170 • Requires disclosure of entities receiving Federal • funding through Federal awards such as grants and • their sub-grants • Requires disclosure of executive compensation • Requires the reported data for each award to • be available on website open to the public • Agencies assist OMB with implementation 2

  10. Who is Impacted? • Entities who receive or administer Federal • financial assistance in the form of: • Contracts • Grants • Cooperative agreements • Loans and loan guarantees • Subsidies • Insurance • Food commodities • Direct appropriations • Assessed and voluntary contributions • “Other”

  11. Our Focus Today • Grants • Cooperative agreements • Subawards

  12. Subaward Definition • Legal instrument to provide support for the • performance of any portion of the substantive project • or program for which you received this award and that • you as the recipient award to an eligible subrecipient • Contracts, small purchase agreements, vendor • agreements, and consultant agreements awarded • under an ED grant for supplies, equipment, and • services are not considered subawards for Federal • financial assistance under FATA, and thus, should not • be reported in FSRS by the prime awardee

  13. Who is Exempt? • Individual or “natural person” outside of a business • or non-profit organization he or she operates • Compensated executives if in the previous FY the • entity received less than 80% of its annual gross revenue • from Federal financial assistance and less than $25 million • from Federal financial assistance and procurement • contracts or subcontracts • Gross income, from all sources under $300,000 • Subawards • Total compensation of the five most highly compensated • executives of any subrecipient

  14. Who Else is Exempt? • Cooperative research and development • agreements pursuant to the Federal Technology • Transfer Act of 1986 (15 U.S.C.) • Technical assistance (which provides services in lieu of • money) • Transfer of title to Federally owned property • provided in lieu of money—even if it is called a grant • Any award funded in whole or in part with Recovery • Act funds • Public already has access to compensation info

  15. Classified Information Classified information remains exempt from the prime and subaward reporting requirement

  16. Requirements for Awarding Agencies • Make applicants aware of the reporting requirements • for the Transparency Act in all announcements, • regulations, notices, or other published documents • Ensure that applicants have the necessary processes • and systems in place to accurately report • Include the award term in Appendix A • Agencies report prime award information to • USASpending.gov on 5th and 20th of each month • Assist OMB with implementation and inform awardees

  17. New Requirements for Grantees • Prime grant awardees of grants $25,000 or more must report associated grant sub-awards • for Federal financial assistance • Executive compensation information for awardees • Be registered with Central Contractor Registration • See CCR.gov

  18. Timetable • Reporting for prime and sub-award goes into effect • October 1, 2010 • Prime awardees must report first tier sub-award • information by the end of the following month from • when the award was made or obligated Example: An award is made on October 15, 2010. The awardee has until November 30, 2010 to report.

  19. Data Elements • Reporting system (FSRS) Pre-populates prime awardee and • subawardee information from the CCR. Prime awardees • enter following sub-award information if not pre-populated: • Name of entity receiving award • DBA name (Grants) • Amount of award • Subcontract/Subcontract Number • Funding agency • CFDA Number (Grants) • NAICS (Contracts) • Treasury Account Symbol • Award title descriptive

  20. Data Elements • Location of the entity (including congressional district) • Place of performance (including congressional district) • Unique identifier (e.g., DUNS) of the entity and its parent and • DUNS +4 (Grants) • Total compensation and names of top five executives

  21. Summary If executive compensation is not found in CCR it can be supplied through FSRS

  22. Ensuring Quality Data

  23. Assessing Methodology • Essential step in the project’s development • Preparation is key • Anticipate potential problem areas • - Address in the design phase or early as possible • Ensure consistency across the board • Communicate clearly with staff collecting and recording data

  24. Where Methodology Goes Wrong • Problems by design • Problems arising from human error Determine just where they overlap and how to eliminate, reduce, negate their effects on reporting. Human Error Design

  25. Where Methodology Goes Wrong • Fundamental design flaws • Data collection mechanisms • Documentation • Communication breakdowns

  26. Lost, Inaccurate, or Questionable Data What do I do if I cannot find my grant in the FSRS.gov system? Federal agencies must report all award transactions within 30 days of the award to USASpending.gov.   Typically, the Department of Education (ED) submits award transactions to USASpending.gov on the 5th and 20th of each month.   If your grant was awarded prior to the 5th , or between the 5th and 20th, check to see if it appears in USASpending.gov. If it does, you will be able to report in FSRS within 48 hours.  If it does not appear in USASpending.gov within 30 days of your award, contact your program officer for assistance. When in doubt, contact your program officer!

  27. Questions Answers Further Recovery Act questions- ED contact listed on the Grant Award Notification or, email RMSCommunications@ed.gov

  28. Thank you for participating! Please complete an evaluation— Your feedback is important. http://www.ed.gov/policy/gen/leg/recovery/rms-web-conferences.html

  29. Resource Documents • FFATA.org • Central Contractor Registration • USASpending.gov • FSRS.gov • whitehouse.gov/omb/open • Securities and Exchange Act of 1934 • Federal Technology Transfer Act of 1986 • 1-800-USA-LEARN

  30. Resource Documents • G5 Hotline: • Hours of Operation: 8:00 AM to 6:00 PM, Monday - Friday, EST • Toll-Free: 1-888-336-8930 • TTY: 1-866-697-2696 • Local: 202-401-6238 • Email: edcaps.user@ed.gov

  31. Definitions and Key Terms 1) Entity—means all of the following, as defined in 2 CFR part 25: i. A Governmental organization, which is a State, local government, or Indian tribe; ii. A foreign public entity; iii. A domestic or foreign nonprofit organization; iv. A domestic or foreign for-profit organization; v. A Federal agency, but only as a subrecipient under an award or subaward to a non-Federal entity. 2) Executive—means officers, managing partners, or any other employees in management positions.

  32. Definitions and Key Terms 3)Subaward—term to denote a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient. ii. The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see Sec. ---- .210 of the attachment to OMB Circular A-133, ``Audits of States, Local Governments, and Non-Profit Organizations''). iii. A subaward may be provided through any legal agreement, including an agreement that you or a subrecipient considers a contract.

  33. Definitions and Key Terms 4)Subrecipient—means an entity that: i. Receives a subaward from you (the recipient) under this award; ii. Is accountable to you for the use of the Federal funds provided by the subaward. 5)Total compensation—means the cash and noncash dollar value earned by the executive during the recipient's or subrecipient's preceding fiscal year and includes the following (for more information see 17 CFR 229.402(c)(2)): i. Salary and bonus. ii. Awards of stock, stock options, and stock appreciation rights. Use the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2004) (FAS 123R), Shared Based Payments.

  34. Definitions and Key Terms 5) Total Compensation— iii. Earnings for services under non-equity incentive plans. This does not include group life, health, hospitalization or medical reimbursement plans that do not discriminate in favor of executives, and are available generally to all salaried employees. iv. Change in pension value. This is the change in present value of defined benefit and actuarial pension plans. v. Above-market earnings on deferred compensation which is not tax-qualified.vi. Other compensation, if the aggregate value of all such other compensation (e.g. severance, termination payments, value of life insurance paid on behalf of the employee, perquisites or property) for the executive exceeds $10,000.

  35. FAQ #1 Why is reporting under the Federal Funding Accountability and Transparency Act (FFATA) required? First-tier subaward data related to Federal contracts and grants and executive compensation data of these awardees must be reported, as FFATA requires that this information be made available to the public.

  36. FAQ #2 When will FFATA be implemented for Federal grants? For Federal grants, FFATA reporting requirements were implemented on October 1, 2010.

  37. FAQ # 3 What grant awards are subject to the subaward and executive compenstation reporting requirements of FFATA? New Federal, non-Recovery Act funded grant awards with an award date on or after October 1, 2010, and resulting first-tier subawards for Federal financial assistance are subject to the reporting requirements under FFATA. For those new Federal grants as of October 1, 2010, if the initial award is equal to or over $25,000, reporting of subaward and executive compensation data is required.

  38. FAQ # 3 (continued) If the initial award is below $25,000 but subsequent grant modifications result in a total award equal to or over $25,000, the award will be subject to the reporting requirements, as of the date the award exceeds $25,000. If the initial award equals or exceeds $25,000 but funding is subsequently deobligated such that the total award amount falls below $25,000, the award continues to be subject to the reporting requirements of FFATA.

  39. FAQ # 4 Under a grant, what is considered a first-tier subaward? A subaward is an award made by the prime recipient to an eligible sub-recipient, or an award made by a sub-recipient at one tier to a sub-recipient at the next lower tier, for the purpose of supporting the performance of any portion of the substantive project or program for which a grant was awarded.

  40. FAQ # 5 What are required FFATA data reporting elements? The key FFATA data reporting elements are: --Name of Entity Receiving Award --Amount of Award --Funding Agency --CFDA Program Number for Grants --Program Source --Award Title --Location of the Entity

  41. FAQ # 6 What encompasses the an entity’s location? (Including Congressional district) --Place of Performance (including Congressional district) --Unique Identifier of the Entity and its Parent Organization --Total Compensation and Names of Top Five Executives -- Collect the Total compensation and names of the top five executives if: More than 80% of annual gross revenues are from the Federal government, and those revenues are greater than $25M annually, and compensation information is not already available through reporting to the SEC.

  42. FAQ # 7 Are subawardees required to report data as required under FFATA? No. The prime grant awardee must report all information associated with a Federal grant, i.e. the prime awardee will report executive compensation data for the prime awardee and for its subawardees, as well as any other information associated with its subawardees.

  43. FAQ # 8 How will prime awardees report data as required under FFATA? Prime awardees will report using the FFATA Subaward Reporting System (FSRS), and will thus, be required to register in FSRS. During registration, the prime awardee’s information data fields will be pre-populated with information from the Central Contractor Registration System (CCR). As such, all prime grant awardees and subrecipients are required to register in CCR. (FAQ continued)

  44. FAQ # 8 continued After creating an account and logging into the system, prime awardees will have access to a “MyFSRS” page with a set of actions available to them. This customized page will give awardees the ability to file multiple reports, access and update previously initiated reports, view approved reports, and create batch uploads of data.

  45. FAQ # 9 When will prime awardees be able to report in FSRS? Prime awardees will be able to report in FSRS on October 29, 2010.

  46. FAQ # 10 How much time does a prime recipient have to report executive compensation and/or subaward information? For subaward reporting, the prime awardee must report information related to a subaward by the end of the month following the month the subaward or obligation was made.

  47. FAQ # 10 Examples Example A: Prime awardee awards subaward on October 1, 2010 Prime awardee must report subaward data by November 30, 2010. Example B: Prime awardee awards subaward on October 31, 2010 Prime awardee must report subaward data by November 30, 2010

  48. FAQ # 10 Examples Continued Similarly, the prime awardee must report the subawardee’s executive compensation data by the end of the month following the month the award or obligation was made. Example C: Prime awardee awards subaward on October 1, 2010 Prime awardee must report subawardee’s executive compensation data by November 30, 2010 Example D: Prime awardee awards subaward on October 31, 2010 Prime awardee must report subawardee’s executive compensation data by November 30, 2010

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