1. Adult Education Block Grant Webinar Fiscal Review August 10, 2016

2. Agenda Pots of Funding – what are they? Block Grant or Apportionment? Face Sheets? Reporting expenditures – system & annual plan AEBG Allowability – who/how to spend the funds Setting up your consortium Resource Codes Admin Cap & Indirect Subcontracts - Financial and Non-Financial MOUs Other Accountability Items – reduced funding & data collection Questions

3. AB104 - Funding 15-16 AEBG Funding – MOE & Non-MOE funding  Can be carried over into the next year.  15-16 Non-MOE funding good until 12/31/17.  15-16 MOE Funding good into 2018.  Both MOE & Non-MOE based on 15-16 annual plan.  Use fund code in system 15-328-XX. Data and Accountability Funding  Already in your fiscal agent’s account  Can be carried over into next year.  Data & Accountability funding is good until 12/31/17.  Budgets & work plans are due 12/20/16.  Use fund code in system 15-328-XXX. (in the system – but not operational)

4. AB104 – Funding (cont.) 16-17 AEBG Funding  No more MOE and Non-MOE – now all consortia funding.  16-17 consortia funding is good until 12/31/18.  Based on 16-17 annual plan.  Use fund code in system 16-328-XX. (Not available yet)  Annual Plans for 16-17 and uploaded online budget will constitute approval.  AEBG Office is looking of some way to “officially” notify consortia that they can begin spending 16-17 funding.  Note – we suggest a first in, first out methodology for spending – so please spend down 15-16 AEBG funding before spending 16-17 funding.

5. AB104 – Unspent Funds? Q: Why do I see an amount in the Data and Accountability funding under Unspent Funds that is similar to the 16-17 AEBG allocations?  Yes – these dollar amounts are the same.  But both have different purposes.  15-16 Unspent $$ - came back to the State after the CFADs were submitted & processed. We couldn’t ask you to resubmit your CFADs.  15-16 Unspent $$ - had to be reallocated prior to June 30 th.  15-16 Unspent $$ - must be spent on Data & Accountability efforts.  The only way to disburse the unspent funds in time was to include it in the Data & Accountability funding. This is one time funding.  The Unspent funds were easier to process for 16-17 because nothing was official yet.  So in 16-17, the unspent funds became part of your AEBG allocation base – and will continue to be part of the base moving forward.

6. Block Grant or Apportionment? Q: Why doesn’t the 15-16 and 16-17 AEBG funding have a face sheet like you did under AB86?  AB86 was a contract with terms and conditions.  The Adult Education Block Grant is not a “grant”. No terms & conditions.  The AEBG was set up based on AB104 legislation and will not change until legislation is passed to end the program (which does take some effort to do).  AEBG funds will continue every year as apportionment to the consortia.  The State will post allocation monthly schedules on the respective agency’s website.  The State will also send some type of official letter or notification to consortia so that they can begin spending 16-17 funding.

7. Reporting expenditures – online system Actual AEBG budget & expenses are reported into the Chancellor’s Office online system every six months by object code. This also includes a progress report. The AEBG budget & expense report is by object code. Budget revisions are due 10 days prior to the report month. So if the report month is January (meaning reports can be submitted between 1/1 & 1/31) – budget revisions are due by 12/20. They may be submitted earlier if necessary. For consortia with fiscal agents - the budget & expenses report includes a roll up of all members in the consortium based on how the funds were allocated – via OC 5000 or OC 7000 for members. For consortia that are direct funded – then you would provide your consortium coordinator a breakdown of each object code 1000s-7000s (and indirect). The consortium coordinator would roll that up and report it to the State in one consortium report. These reports are auditable and should be approved by a certifying official. For direct funded members – the reports to the consortium lead should be certified prior to submission to the consortium lead.

8. Reporting expenditures – online system (cont.) Q: What happens if we had a fiscal agent in 15-16 and then went direct funded in 16-17?  Fiscal Agent is responsible for 15-16 funding until all non-MOE AEBG funds are exhausted.  This includes tracking & reporting on funding.  And working with the consortium to revise and update the annual plan to reflect current activity.  Direct Funded agencies for 16-17 would be responsible for working with consortium lead to track, report & roll up consortium level budget & expenses.  They would also be responsible for working with the consortium to revise and update the annual plan to reflect current activity.

9. Reporting expenditures – annual plan AEBG 16-17 annual plan tables (Section 3) include expenditures (best estimate) by member as follows:  15-16 AEBG (MOE & Consortium Funds) by Program Area  15-16 AEBG (MOE & Consortium Funds) by AEBG Objective For these two tables spread your admin & indirect using a percentage rate  15-16 AEBG (MOE & Consortium Funds) by Object Code This table has its own line item for admin & indirect 16-17 Planned Expenditures by Program Area and AEBG Objective  Planned AEBG expenses = how is your consortium planning to allocate funds (best estimate)  Planned Other Fund Sources = how are the other fund sources being planned to serve students in the seven AEBG program areas.

10. AB104 – Allowability On website – Allowable Uses Guide & Program Guidance  Funds must be used in the seven AEBG program areas.  Expenditures must have member approval via the annual planning process.  All members must participate in the decision making.  All members must be in good standing with the consortium.  Cost must be reasonable, necessary, allocable & must not be a general expense required to carry out the consortia member’s overall responsibilities. Construction, remodels & leases would need to be shared with the State AEBG Office prior to purchasing/signing. Vehicles would need to be shared with the State AEBG Office prior to purchasing. Out of State travel would need to be shared with the State AEBG Office prior to booking. Not allowed: Paying for fines & penalties, entertainment costs, gift of funds, unrelated travel, political contributions, and staff not associate with the AEBG effort.

11. Setting up Your Accounts – K-12 Districts & COEs How should LEAs account for the MOE and consortia (non-MOE) funding using the standardized account code structure (SACS)? The answer to this question is specific to K-12 school districts, adult schools, and County Offices of Education and doesn’t apply to community college districts. LEAs will use the same resource code for MOE and non-MOE funding. Consortia Fund Administrators - LEAs who are the fund administrator for an adult education consortium and receive Adult Education Block Grant revenue on behalf of their member LEAs should use: – Resource 6391, Adult Education Block Grant Program and, – Either Object 8587, Pass-Through Revenues from State Sources (for the pass-through grant model), or Object 8590, All Other State Revenue (for the subagreement for services model), to account for the revenue that will be provided to their member LEAs.

12. Setting up Your Accounts – K-12 Districts (cont.1) Consortia Members (Subrecipients) - LEAs who are the members in an adult education consortium and receive Adult Education Block Grant revenue from their consortia’s fund administrator (not directly from the state) should use: Resource 6391, Adult Education Block Grant Program and, Either Object 8590, All Other State Revenue (for the pass-through grant model), or Object 8677, Interagency Services Between LEAs (for the sub-agreement for services model), to account for the AEBG revenue.

13. Setting up Your Accounts – K-12 Districts (cont.2) LEAs that receive AEBG directly from the State: Use Resource 6391, Adult Education Block Grant Program, and Object 8590, All Other State Revenue.

14. Sequoias AEC Coding Example

15. Consortium Administrative Cap (5%) The AB104 Legislation for AEBG states in Section 84913: ( b) A consortium may use no more than 5 percent of funds allocated in a given fiscal year for the sum of the following: (1) The costs of administration of these programs. (2) The costs of the consortium. (This applies to consortia only) A consortium may use no more than 5 percent of funds allocated in a given fiscal year for administration activities. Examples of consortium administration activities: Rolling up each member’s budget & expenditures for State reporting. Breaking out member’s budget & expenditures for State reporting. Working with fiscal agent(s) to submit budget & expenditures reports. Coordinating the completion of the fiscal administration documentation. Ensuring that member decisions are followed through by the fiscal agent(s). Submits deliverables to the State as agreed upon by consortium membership. Hiring of consortium level staffing. Preparing the payroll for consortium level staffing. Purchasing any consortium level items. Coordinating budgets in collaboration with consortium members, district administrators, and accounting staff

16. Member Indirect Rate Indirect Rate K-12 districts and COEs may use their CDE approved indirect cost rate for any AEBG apportioned funding. The indirect cost rate varies by district and is not a set amount. Please check the CDE Indirect Rate website, at the link shown below. http://www.cde.ca.gov/fg/ac/ic/ Community College Districts (CCDs) may use up to either their approved indirect cost rate as directed in Code of Federal Regulations (CFR) 200.414 up to the development minimus amount as allowed in the CFR. https://www.gpo.gov/fdsys/granule/CFR-2014-title2-vol1/CFR-2014-title2-vol1-sec200-414

17. Subcontracts & Subagreements For information on whether to use the pass-through grant model or the subagreement for services model when accounting for this grant, LEAs should consult the California School Accounting Manual (CSAM) Procedure 750. Additional guidance can be found in CSAM Procedure 330 under the definition for Object Code 5100, Subagreements for Services.

18. AB104 Performance Accountability and Potential Loss of Funding The legislation addresses the possibility of a decrease in funding or loss of funding for one or more of the following: (1) The member no longer wishes to provide services consistent with the adult education plan; (2) The member cannot provide services that address the needs identified in the adult education plan; (3) The member has been ineffective in providing services that address the needs identified in the adult education plan and reasonable interventions have not resulted in improvements

19. Effectiveness Measures In AB104, section 40, subsection 84920, the budget language states, “….the Chancellor and the Superintendent shall identify common measures for determining the effectiveness of members of each consortium in meeting the educational needs of adults”. The measures listed in the budget language include (but are not limited to) the following: (1) How many adults are served by members of the consortium. (2) How many adults served by members of the consortium have demonstrated the following: (A) Improved literacy skills. (B) Completion of high school diplomas or their recognized equivalents. (C) Completion of postsecondary certificates, degrees, or training programs. (D) Placement into jobs. (E) Improved wages. Note: additional measures were added relating to transfers.

20. Questions???