Primary Financing and Help America Vote Act (HAVA) Funding Update Texas Secretary of State Elections Division 11/16/2018 Primary Financing and Help America Vote Act (HAVA) Funding Update Election Funds Management 11/16/2018 Texas Secretary of State Elections Division Texas Secretary of State Elections Division

Primary Finance Overview State primary funds are issued to county chairs overseeing the conduct of primary elections every two years, in accordance with Chapter 173 of the Texas Election Code. The primary elections are paid for by a combination of county level candidate filing fees, allocated state level filing fees, state primary funds, and miscellaneous funds. 11/16/2018 Texas Secretary of State Elections Division

Primary Finance Overview (cont.) The state funds between 75 and 80 percent of the primary election costs (approximately $12MM is the typical state contribution). The Secretary of State initially distributes funding to the county chairs based on estimated costs for the primary and runoff. Seventy-five (75%) of the approved estimated cost is advanced to the chair to cover election day and administrative expenses. 11/16/2018 Texas Secretary of State Elections Division

Primary Finance Overview (cont.) After the primary and runoff elections, chairs remit a final cost report of actual expenses. The SOS remits the remaining balance based on actual expenses or excess funds are returned to the state primary fund. Most county parties contract with the county election officer to lease voting equipment as well as for various election services related to the conduct of the election. 11/16/2018 Texas Secretary of State Elections Division

Other Funding Information Texas Election Code, § 173.0832 allows for direct payment to counties of 100,000 or more. Funds are made available to the county chairs effective November 1 preceding the primary. The 82nd Legislature cut the base budget for the funding of primary elections by 10%. SOS implemented a partial rollback of election worker pay and limited administrative costs. 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Allowable Costs The county may only charge for actual costs necessary and directly related to the primary, except for a 10% general supervision fee that may be assessed against the direct costs. Actual expenses include but are not limited to the following: transporting, preparing, programming, and testing the necessary equipment, as well as for staffing the central counting station. 11/16/2018 Texas Secretary of State Elections Division

Allowable Costs (cont.) A county may charge $5 for each unit of tabulating equipment and $5 for each complete unit which makes up a DRE. The only reimbursable costs for early voting are ballot costs and expenses related to the early voting ballot board. The county pays all other costs associated with early voting (including workers, voting by mail, postage). 11/16/2018 Texas Secretary of State Elections Division

Non-Reimbursable Costs No charge may be made for a public building used as a polling place or central counting station if the building is normally open for business on election day. Election worker compensation to attend training or costs for training material available through the SOS. Salaries of personnel regularly employed by the county, except for time worked beyond the normal 40 hour work week. 11/16/2018 Texas Secretary of State Elections Division

Non-Reimbursable Costs (cont.) Duties the election officer is statutorily required to perform. Costs associated with voter-registration drives or get-out-the-vote campaigns, including mass mail-outs and phone banks. Election notices, except for public testing announcements. 11/16/2018 Texas Secretary of State Elections Division

Non-Reimbursable Costs (cont.) Voting by mail kits and postage related to mail ballots. Purchases of MBB’s/PEB’s or other voting system items transferable to other elections. Voting booths and ballot boxes owned by the county. Any food or drink items. 11/16/2018 Texas Secretary of State Elections Division

Election Services Contract Fund The following county election officer duties are required by statute and may not be included for compensation in an election services contract: The filing of Title 15 reports. Custodian of election records. Conducting early voting (ballots, including programming, and early voting ballot board expenses are payable from the primary fund). 11/16/2018 Texas Secretary of State Elections Division

Election Services Contract Fund (con.t) Funds received as a result of an election services contract must be deposited in a separate fund in the county treasury. Expenditures from the fund do not require budgeting or appropriation from the commissioners court. The commissioners court may not consider the availability of the election services contract fund in adopting the county budget for the election office. 11/16/2018 Texas Secretary of State Elections Division

E-Filing of Final Cost Report Cost Reports are submitted electronically. County chairs are paid directly from the Secretary of State via paper warrant or direct deposit, depending upon the method the chair chooses. Counties must seek reimbursement from the county chair. Counties with a population of 100,000 or more may seek direct payment. 11/16/2018 Texas Secretary of State Elections Division

E-Filing of Final Cost Report (cont.) The Final Primary Election Cost Report is divided into four sections: Statistics Expenses Election Day Expenses Election Day Personnel Election Day Other Administrative Costs Financing Sources Payments from SOS Candidate Filing Fees 11/16/2018 Texas Secretary of State Elections Division

E-Filing of Final Cost Report (cont.) The county chair has the user access to submit cost reports. The county election officer has the option to access the system to submit contracted expenses to the county chair. The county election officer may do so at any time during the process; however, it is up to the county chair to incorporate the data into the cost report. 11/16/2018 Texas Secretary of State Elections Division

E-Filing of Final Cost Report (cont.) If contracted expenses have been submitted by the county election officer: The county chair has the option to import the data directly into the cost report or to otherwise use as a reference. This option will override any data previously entered by the county chair for those line items. If the county election officer submits data after the county chair has submitted the cost report, an amendment may be submitted. 11/16/2018 Texas Secretary of State Elections Division

Supporting Documentation Copy of a signed contract or joint resolution with the county official. Copies of all bank statements from November 1, 2013 through the present (if obtained from the chair). Copies of all invoices, bills, and receipts. Copies of all signed compensation sheets from each of the polling locations, central count, early, late, and provisional ballot boards. 11/16/2018 Texas Secretary of State Elections Division

Supporting Documentation (cont.) Copies of county employees' timesheets showing overtime hours worked in election preparation, etc. Detailed itemization of anything listed under miscellaneous with who, what, when & receipts/timesheets/etc. 11/16/2018 Texas Secretary of State Elections Division

Submitting Supporting Docs Email: efmadmin@sos.texas.gov Fax: 512-463-7552 Mail: Texas Secretary of State Election Funds Management Section P. O. Box 12060 Austin, Texas 78711-2060 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division HAVA Update 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Expired HAVA Grants The County Education Fund Voting System Replacement (17 counties that used punch card or lever machines in the 2000 federal election) Voting System Accessibility General HAVA Compliance Polling Place Accessibility Opportunity for Access 11/16/2018 Texas Secretary of State Elections Division

Grant Closeout Process The county financial officer must attest to the cumulative expenditures, serial numbers, and program income reported in the grant system. If incorrect, the SOS will work with the county to reconcile the data. All grants should be closed out as soon as possible. 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division 2010 US EAC Audit Reminders Program Income Interest – Counties must deposit program income in an interest-bearing account to be used only for HAVA-eligible purposes. Property Management – Equipment must be properly safeguarded and inventoried. County may be liable for loss or misuse. Insurance Proceeds – If insurance is collected to replace HAVA-funded assets, money must be placed in an interest-bearing account to be used only for HAVA-eligible purposes. 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Program Income Program income is defined as gross income received from a grant-supported activity. E.g., grant-funded equipment usage fees, programming charges, equipment transportation costs, general supervision fees applied to those costs, etc. Gross program income must be reported annually October 1 – September 30 beginning in 2004 through final expenditure of HAVA funds. 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Program Income (cont.) Program income may only be expended on activities eligible under HAVA. HAVA-compliant equipment, including annual maintenance and licensing fees, programming costs, training, storage costs, epollbooks, and any other activities that can be associated with HAVA compliance. Gross program income must be reported annually October 1 – September 30 beginning in 2004 through final expenditure of HAVA funds. 11/16/2018 Texas Secretary of State Elections Division

Texas Secretary of State Elections Division Records Retention Must maintain records for at least three years following the final expenditure of HAVA funds at the state level. If any litigation, claim, negotiation, audit or other action involving the records has been started before the expiration of the 3-year period, the records must be retained until completion of the action and resolution or until the end of the regular 3-year period, whichever is later. 11/16/2018 Texas Secretary of State Elections Division

Disposition of HAVA-funded Equipment HAVA-funded equipment that is no longer needed may be retained or disposed of with no obligation to the state if the equipment has a fair market value of less than $5,000. Counties should attempt to get trade-in value or sell HAVA-funded equipment after it is no longer needed. Proceeds or trade-in value must be used toward replacement equipment or other HAVA-related activities. 11/16/2018 Texas Secretary of State Elections Division