Leigh Manasevit, Esq. Brustein & Manasevit, PLLC Fall Forum
“Notwithstanding any other provision of law…any funds…to carry out any programs to which this title is applicable…which are not obligated and expended…prior to the beginning of the fiscal year succeeding the fiscal year for the which such funds were appropriated shall remain available in obligation and expenditure…during such succeeding fiscal year.” Section 412 (b) General Educations Provisions Act (GEPA) Brustein & Manasevit, PLLC © All rights reserved. 2
Funds in most State-Administered Programs are available for 27 months ◦ Example: Funds first available July 1, 2015 First 15 months available to September 30, 2016 Tydings Amendment allows obligation for another 12 months That is Until September 30, 2017 Brustein & Manasevit, PLLC © All rights reserved. 3
From July 1, 2016 until September 30, 2016 it is possible to have 3 FYs of funds available Must have a system to identify which funds are expended ◦ Funds July 1, 2014 to September 30, 2016 ◦ Funds July 1, 2015 to September 30, 2017 ◦ Funds July 1, 2016 to September 30, 2018 Brustein & Manasevit, PLLC © All rights reserved. 4
5 Carryover Overlap July 1, 2014 July 1, 2015 July 1, 2016 September 30, 2016 Until Sept 30, Funds Funds Funds Brustein & Manasevit, PLLC © All rights reserved.
Title I, Part A Rule – ◦ Limits carryover to 15% ◦ Can be waived by State Once per 3 years ◦ ED can and has waived this limitation Perkins LEA/Postsecondary ◦ No carryover Brustein & Manasevit, PLLC © All rights reserved. 6
Carryover funds must be obligated in accordance with new law, regulations, application ◦ 34 CFR Brustein & Manasevit, PLLC © All rights reserved. 7
Funds must be obligated within the time periods described Obligation Disclosure Decision of the Secretary, Appeal of California-May 6, 1986 Brustein & Manasevit, PLLC © All rights reserved. 8
9 Obligation – EDGAR 34 CFR Property:Binding written commitment Employee:When services performed Contractor:Binding written commitment
Obligations must be liquidated within 90 days of the end of period of availability Funds – obligation no later than September 30, 2016 Liquidation by December 30, 2016 (may be extended – ED has specific rules on extensions) Brustein & Manasevit, PLLC © All rights reserved. 10
18 months after end of obligation period – program office After 18 months – only in extraordinary circumstances (or construction contracts) June 5, 2007 Policy Memorandum August 16, 2011 Memorandum Can be granted only by CFO Brustein & Manasevit, PLLC © All rights reserved. 11
Grantee has burden ◦ Allowable cost ◦ Obligation was timely Generally will not approve if moves: ◦ Funds between programs ◦ From state/local to federal Will consider if ◦ Obligation charged/federal but paid state/local Consistent with underlying accounting system High risk? Audits current? Attestation required Attachment A Brustein & Manasevit, PLLC © All rights reserved. 12
When an obligation is paid = Liquidation Liquidation involves the use of actual funds These funds must be identified to the year they were available Brustein & Manasevit, PLLC © All rights reserved. 13
Example: ◦ A contract is signed on August 15, 2014 ◦ Invoice submitted October 15, 2014 ◦ Funds available to liquidate carryover st year ending September 30, 2014 st year beginning Brustein & Manasevit, PLLC © All rights reserved. 14
Utilize oldest funds first (FIFO) Why – they are going to expire How to utilize – ◦ Accounting entry – assign ◦ Cost to funds by a clear accounting entry indicating payment from funds ◦ Must be consistently used part of accounting system Brustein & Manasevit, PLLC © All rights reserved. 15
LEA has paid the contract with newest funds (14-15) Realizes there is an unpaid balance of funds Deobligate funds – increasing balance of funds Obligate (by accounting entry) funds Brustein & Manasevit, PLLC © All rights reserved. 16
The legally relevant question is when the obligation arose, not in what account such obligation was originally recorded. Attachment B Brustein & Manasevit, PLLC © All rights reserved. 17
Was the obligation incurred during the period of availability of the grant? Was the obligation for an allowable expense? Does the State/LEA have an established accounting policy covering linkage? Brustein & Manasevit, PLLC © All rights reserved. 18
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Where LEA must spend a set amount ◦ Example 10% PD for LEA in improvement: And the full amount not spent The balance carried over Remains in setaside Plus new 10% allocation Brustein & Manasevit, PLLC © All rights reserved. 20
Exception: Some setasides specify an amount – but say unless a lesser amount is needed Example: 5% for all teachers HQT Brustein & Manasevit, PLLC © All rights reserved. 21
Special rules for spending less than the specified amount Example: 20% for Choice/SES Brustein & Manasevit, PLLC © All rights reserved. 22
Equitable Services ◦ If equitable services not provided – carry over as setaside ◦ If provided – reverts to general Title I available funds (subject to equitable services) Brustein & Manasevit, PLLC © All rights reserved. 23
Where LEA must spend a set amount: ◦ The full amount not expended in year one ◦ There is a new law in year 2 ◦ Must the balance be made up? Brustein & Manasevit, PLLC © All rights reserved. 24
25 This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances. Brustein & Manasevit, PLLC © All rights reserved.