1. Arizona
Perkins 101
Handouts…
Perkins 101
“Perkins 101 Library”

2. TED DAVIS Arizona Department of Education
Career & Technical Education Section
Phoenix, AZ

3. Perkins
Challenges
Sequestration
Hold Harmless
Reauthorization

4. Perkins Sequestration
- 5% converts to ≈ - 8.5% reduction for all but 20 states & territories
The “hold harmless” provision of Perkins as written never envisioned “sequestration”
The full 8.5% sequestration cut will come out of the last three months of the current federal fiscal year (July 1 – September 30, 2013)
Section 111(a)(5) – Hold Harmless

5. Perkins
Until October 1, 2013 you cannot obligate or spend more than your 1st quarter grant award notification (16.5% of total federal FY 13 award)
States – don’t forget to factor in any carryover monies you still have to reallocate
(Tydings-27 months)

6. Perkins
Perkins V ???
I wouldn’t count on reauthorization until after the next Presidential election….

7. Perkins Super circular Concentrates on the OMB Circulars
For our purposes primarily –
Circular A Audit Requirements
Circular A Allowable Costs Postsecondary
Circular A Allowable Costs Secondary & State Agencies
Circular A The Common Rules (Admin Regs)
Circular A Allowable Costs Non-Profit
(OMB – Office of Management & Budget)

8. Perkins Super circular Time & Effort More flexibility
Will iron out the differences between OMB Circulars A-21, A-87 & A-110

9. Perkins Super circular Audit –
Single audit threshold increased to $750,000
Removes –
Procurement (including debarment)
Property management
Level of effort – Maintenance of Effort (MOE)
Etc. (7 out of 14 compliance areas)
Be careful! – It does not mean these requirements are gone!
A year or two from actual release?

10. What about a rewrite of EDGAR?
Perkins
What about a rewrite of EDGAR?
Several years away…

11. Perkins
The basics
There is a more advanced Perkins break-out session. Check your conference schedules.

12. Perkins Perkins is “split-funded” between secondary and postsecondary
The average split nationally is 60% secondary & 40% postsecondary
The postsecondary splits range from 12% to 75%
Determined by each state

13. Perkins Maintenance of Effort (MOE) & Dollar-for-Dollar Match
State
Maintenance of Effort (MOE) & Dollar-for-Dollar Match
States have two ‘MOE’ requirements –
In the aggregate - (Section 311(b))
Your 5% Admin funds also have an MOE requirement
(Section 323)
States have a dollar-for-dollar administrative match requirement (Section 112(b))
Cuts in Perkins funding will make it easier for states to meet their Perkins MOE requirements and unfortunately for some state legislatures to cut what they are spending on CTE and not violate the Perkins MOE requirements
(Section 311(b)(1)(C) & Section 323(b))

14. Perkins Allocations to States are Census Based
50% “population aged 15 to 19 inclusive, 20% population aged 20 to 24,” etc.
Poverty is not factored into the allocations to the states (Section 111(a)(2) )
In-State Allocations – Secondary
District census data
70% based on 5-17 census count at or below poverty guidelines
30% total district census data
(Section 131 (a)(1-3))
In-State Allocations – Postsecondary
Based on Pell Grant recipient and BIE assistance recipient counts within a state and community college district (Section 132 (a)(2))

15. Perkins Exceptions - Area CTE/Vocational Schools
Most commonly funded via a cooperative agreement, based on the number of students served (Section 131 (e))
Exceptions - Secondary (Section 131(C))
Formula award less than $15k
Consortium or waiver approval

16. Perkins Exceptions - Charter Schools May participate in a consortium
Waiver allowance for public charter schools receiving less than $15K (Section 131(c)(A)(ii)
Exceptions – Postsecondary (Section 132(C))
Formula award less than $50k
Consortium or waiver approval
A secondary or postsecondary “split” of 15% or less allows for a state to develop its own allocation formula (Section 133(a)(2))

17. Perkins Where To Start - States – Approved State Plan
Recipients – Approved Local Application
Pitfalls –
Just don’t write “something” to get the money
States –
State Plan – Follow it, change it or amend it.
You really want to avoid a formal amendment process
Local Applications –
Recipients - Follow it or amend it
Check your progress and budget at least mid-grant and 90 days before your end date

18. Perkins Perkins is not an entitlement grant –
One or more programs of sufficient size, scope and quality to warrant the receipt of grant funds
Allocation is less than $15K (Secondary) or less than $50K (Postsecondary) you need to –
Request and receive a waiver, or
Enter into a consortium agreement with another district or college
Waivers – you need to be able to justify the waiver
The recipient has a viable program, and
They are not able to enter into a consortium due to:
Rural isolation
No one within a reasonable distance wishes to enter into a consortium with the recipient
Charter schools do not require a waiver
(Section 131(c)(1-2); Section 132(a)(3-4); Section 132(C); Section 132(C)(2))

19. Perkins
States – Without an approved State Plan or a “substantially approvable plan” may not obligate Perkins funds
Recipients – Are in the “same boat” – they can’t obligate new grant funds until their application is “substantially approvable”…
Example – A recipient’s new fiscal year begins July 1st. On July 6th, in anticipation of school starting, the district buys some badly needed CTE equipment. Their Perkins application for the new school year is substantially approved two days later on July 8th. This district may not use Perkins funds to pay for this equipment – even if the delay is the state’s fault.
EDGAR 34 CFR §76.703(d)
EDGAR 34 CFR §76.708(a)

20. Perkins You have an approved application - What can you spend $$$ on?
1st Rule – either follow your approved application or plan or amend it to meet your needs
States –
Section 3 Administration, your 5% Admin setaside
Section 124 – State Leadership Activities, your 10% setaside
Do Not Exceed These Percentages!
Recipients –
Section 134 – Your Local Plan
Section 135 – Local Uses of Funds
States, Tribes, K-12 schools – OMB Circular A-87
Community Colleges – OMB Circular A-21
Charter Schools – (Arizona utilizes OMB Circular A122)
In all three, look for the section titled, “Selected Items of Cost”
A-87 – Appendix B
A-21 – Section J
A-122 – Appendix B

21. Perkins Spending Guidance
Sole State Agency
Carl D Perkins Act
Section 112(a)(3) – 5% Administration
Section 124 – State Leadership Activities
State Approved Plan
Under OMB Circular A-87 – However, depending on the recipient you are working with you , might use
OMB Circular A-87 (Secondary)
OMB Circular A-21 (Postsecondary)
OMB Circular A-122 (Non Profit Charter Schools)
State Statutes -
Procurement, Capital Assets, Gifts, Travel, Pre-paid Costs, Etc.

22. Perkins Spending Guidance
Eligible Recipient
Secondary
Postsecondary
Carl D. Perkins Section 135 – Local Uses of Funds
Carl D. Perkins Section 135 – Local Uses of Funds
Your Approved Local Plan
Your Approved Local Plan
OMB Circular A-87; Selected Items of Cost
OMB Circular A-21; Selected Items of Cost
State Statutes -
Procurement
Capital Assets
Gifts
Travel
Pre-paid costs

23. Perkins General Test of Allowability Fits with your application
Allowable per the appropriate OMB Circular
Reasonable
Allocable
Consistently treated
Consistent with your organization’s policies
Incurred in accordance with GAAP
Not charged elsewhere
Adequately documented…

24. Perkins SALARIES Yes – You must do “time-and-effort” (T&E) reporting
Employee works full time on Perkins you –
Must ‘certify’ the employee at least semi-annually
T&E records must be signed by the employee or a supervisor with first-hand knowledge
Multiple cost objectives requires regular Personnel Activity Reports (PARs)
The cost has to be “allocable” to your Perkins grant
After-the-fact reporting
Signed by employee
Coincide with pay periods; at least monthly
Secondary, SEAs, Governments, BIE - OMB Circular A-87 Appendix B.8.h.
Community Colleges OMB Circular A-21 Appendix J.10.
Non-Profit Charter Schools – OMB Circular A-122 Appendix B.8.m.

25. Perkins Time & Effort (T&E) – A major source of audit findings
The Super Circular will make T&E reporting more uniform but it will still be a major compliance area

26. Perkins
EQUIPMENT
EDGAR (34 CFR §80.1) defines equipment as personal property that costs $5,000 or more – The issue has more to do with a state’s inventory requirements (and the associated costs) than the purchase price
If your state elects a lower dollar threshold for inventory purposes (or has “stewardship” requirements) you must comply with your state’s lower capitalization limit ( EDGAR 34 CFR § 80.32(b))
The OIG (Office of Inspector General) has been issuing findings relative to items of equipment that are considered “attractive theft” items – cell phones, digital cameras, flat screen monitors, etc. that cost a lot less than $5,000
When is something a supply and not equipment?
Use a “reasonable person approach” – Does it have a useful life of a year or more, would you throw it away or repair it, does your own state’s criteria treat it as a supply or equipment?
Colleges often won’t budget anything under $5,000 as “capital” – You’ll see terms like “non-capitalized capital”… The issues are more about what line you budget the money on and at what dollar amount do you have to inventory the equipment?

27. Perkins EQUIPMENT CONT. Get it written into your approved application
Items like your CTE computer lab
Specialized workstations
The cost of connecting equipment
Etc.
Avoid paying for items your district typically supplies to all your district’s educational programs – desks, chairs, PCs
USE NON-PERKINS FUNDING WHERE POSSIBLE
Trade Perkins-funded CTE costs for those CTE costs funded with non-federal $$$
Pursue donated equipment where possible

28. Perkins EQUIPMENT CONT. Equipment & Real Property Management –
Tag equipment purchased with Perkins funds
Equipment & Real Property Management –
The Super Circular may drop property management relative to the Single Audit, but…
Failure to safeguard and manage property and supplies purchased with federal funds –
Can still generate an audit finding
Can still result in “questioned costs”
Failure to follow your own state’s property management rules and requirements can still generate an audit finding
Responsibility shifts to states to ‘police’ program fiscal monitoring requirements

29. Perkins CTSOs STUDENT ORGANIZATIONS
Little guidance – the Feds typically refer you back to 34 CFR §403.71(c) – The last regulatory guidance for Perkins, under Perkins I
Allowed – Instructional related costs (very narrow)
Disallowed – All the fun stuff…
States – Section 124(c)(4)
Local Recipients – Section 135(c)(5)

30. Perkins
(3) The support of vocational student organizations may not include—
Lodging, feeding, conveying, or furnishing transportation to conventions or other forms of social assemblage;
(ii) Purchase of supplies, jackets, and other effects for students' personal ownership;
(iii) Cost of non-instructional activities such as athletic, social, or recreational events;
(iv) Printing and disseminating non-instructional newsletters;
(v) Purchase of awards for recognition of students, advisors, and other individuals; or
(vi) Payment of membership dues;
(d) Leadership and instructional programs in technology education; and
(e) Data collection.
34 CFR §403.71(c)
My guess, they mean non-instructional, out-of-the-classroom-type activities that don’t meet the conditions of 34 CFR § (c)(2)(iv) & – “all students…”

31. Perkins CTSOs Practices vary from state to state…
Use the “reasonable person” approach
Make them a part of your Program of Study approach
Seek local Board approval where you deem it appropriate

32. Perkins NOT ALLOWED Alcohol Entertainment expense Awards (gifts)
Promotional items (freebies)
Promotional advertising
OMB A-87 B.3; OMB A-21 J.3
OMB A-87 B.14; OMB A-21 J.17
OMB A-87 B.20; OMB A-21 J.22
OMB A-87 B.1.f.(3); OMB A-21 J.1.f(3)
OMB A-87 B.1.f(4); OMB A-21 J.1.f(4)

33. Perkins FOOD & BEVERAGES “NO” Unless it is related to –
OMB A-87 B.3; OMB A-21 J.3
OMB A-87 B.14; OMB A-21 J.17
OMB A-87 B.27; OMB A-21 J.32
OMB A87 B.43; OMB A-21 J.53
FOOD & BEVERAGES
“NO”
Unless it is related to –
Approved travel (subject to your state’s per diem guidelines)
Included in your approved registration
Not considered entertainment
Included as part of an approved conference or meeting (attending or sponsoring)
A consumable training supply (culinary arts)
Alcohol never allowed
Read Goods or services for personal use – A-87 Attachment B.20 & A-21 Section J. 22.

34. Perkins TRAVEL FOOD & BEVERAGES
Travel is allowable when it supports your approved grant or plan
Meals, lodging, all the usual stuff is allowable, when approved
Should be reasonable
DOES NOT INCLUDE ENTERTAINMENT COST
What about those conferences where entertainment is included in the registration fee?
It’s your state’s call…
If the cost is separate and identifiable and the employee wants to participate they must cover the cost out of their own pocket
OMB A-87 Attachment B.43 or OMB A21 Section J.53

35. Perkins MEETINGS & CONFERENCES/FOOD & BEVERAGES
OMB A-87 B.27 (Comparable language in OMB A-21 J.32)
Meetings and conferences. Costs of meetings and conferences, the primary purpose of which is the dissemination of technical information, are allowable. This includes costs of meals, transportation, rental facilities, speaker’s fees, and other items incidental to such meetings or conferences. (Also see OMB A-87 B.14; OMB A-21 J.17, “Entertainment Costs”.
Must be reasonable
Must be able to stand the, “Would you like to see this on the front page of your local paper?” test
Does NOT include internal staff meetings

36. Perkins MEETINGS & CONFERENCES/FOOD & BEVERAGES
Prepaid Fees – Early Registration
Are they a professional service cost or a travel cost?
Prepaid registration fees can lead to accounting headaches related to the issue of, “When is a cost incurred?” (See EDGAR 34 CFR §76.707)
May need to transfer the expense from one fiscal year to the next if the fee is paid prior to the fiscal year in which the activity will occur

37. Perkins MEMBERSHIPS, SUBCRIPTIONS & PROFESSIONAL ACTIVITY COSTS
Memberships for a state or district are OK . For example, the cost would be OK for your State CTE Director’s position, regardless of who the individual is – but not for the individual who is the CTE State Director
Must be “allocable” to your Perkins project or plan
Use the “reasonable person” approach
It is recommended that you utilize your procurement system procedures if you are looking at a -
Significant cost
Sole source provider (speakers, intellectual property, copyrighted, etc.)

38. Perkins AWARDS Awards or Gifts -Typically Not Allowed
However you can purchase nice frames through your approved state or local office supply contract, print out a nice certificate on your color laser printer and hand the result to folks…
Hand out donated items from your state’s Chamber of Commerce, local industry groups, etc.
OMB A-87 B.1.f(3); OMB A-21 J.1.f(3)
OMB A-87 B.20; OMB A-21 J.22

39. Perkins Do Not Use Perkins Funds For - Promotional items (freebies)
Promotional advertising
The Most Common Ways To Cover Such Costs –
At a state-wide level - Conference registration fees and conference accounts
Districts - Many states allow districts to maintain extra curricular programs, student activity accounts. Some states even allow for tax credits for donations made
Outside groups, professional organizations, etc.

40. Perkins
The most common problems, goofs!

41. Perkins Failure to follow your approved application/plan
Review it at least at the six and nine month points
Follow it, or
Amend it
The OMB Circular A-133 CTE Supplement – (15 pgs.)

42. Perkins common problems PROCUREMENT – Inadequate documentation
If your procurement shop or business office are not known for
their attention to details - Cover Thy Butt
Failure to comply with your own state’s procurement rules
Bidding and quotation requirements
Government credit card (PCard) problems
Don’t sign anything unless you are authorized by your agency, district or college to obligate them
Inadequate internal controls
Professional service contracts - Check the federal “Debarment” website. If your vendor is on there you can’t use them
(OMB Circular A-133 §___.220

43. Perkins Property Management Issues –
An inventory system that does not meet your own state’s
property management requirements
If you have to, keep your own set of documents
Purchase orders
Receiving documents
A mini-inventory, with item location info
Keep it current
Does your state have a lower dollar threshold?
Does it have “stewardship” requirements?
You need to put special procedures in place for items
that cost less than $5K but are high-theft items
Do your approved purchases agree with your approved application?
Does your annual fiscal completion report reconcile to your actual
purchases?

44. Perkins Time and Effort – Personnel Activity Reports (PAR)
Nationally there have been some significant questioned costs audit findings – in the $100K plus range…
Key factors –
First, you have a time and effort reporting system in place, not just an attendance (time clock) reporting system
Your system accurately reflects the activities for which the employee is paid
You are reporting after-the-fact
It’s signed by the employee
There is a suitable means of verification

45. Perkins Time and Effort Cont. -
A semi-annual certification is acceptable for an employee that only works on Perkins (one cost center)
Your system accounts for the full time for which the employee is paid
If an employee works on more than one cost center their activity must be reported at least monthly and must coincide with the employee’s pay period
A red light to an auditor – time reported spent exactly as budgeted…
In rare cases payments could be on a budgeted basis
Reconciled quarterly
Within 10% of actual

46. Perkins Time and effort Cont -
Monthly Report, Certifications… for community colleges? Where does it say that?
Circulars A-87 and A-122 are easier to read. For community college recipients, I recommend the following paragraph, OMB Circular A-21 Section J.10.c.(2)(e)…
“(e) For professorial and professional staff, the reports will be prepared each academic term, but no less than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods.”
(AZ Examples – Select Federal Fiscal requirements)

47. Perkins States - Fiscal Monitoring
Also on the list of “frequent” new audit findings – “States need to do fiscal monitoring” (EDGAR 34 CFR §80.40)
Your folks don’t need to be auditors
If they find something that “doesn’t look right”, then you can send in real auditors
Build fiscal questions into your monitoring tool –
Compare actual activities to their approved application
Compare equipment purchases to their reported end-of-year equipment purchase documents - Compare to P.O.s and receiving documents; did it end up on their inventory; check to see if you can physically locate a couple of items from their inventory on a sample basis
Are they paying salaries? Ask to see either the employee’s semi-annual certification or a personnel activity report (PAR)
Purchased professional services – Did they check the federal debarment website?
Etc.

48. Perkins The ‘MANTRA’ is back - Monitoring needs to be RISK BASED…
As resources dwindle you will see the rebirth in emphasis on
“risked –based “ monitoring or auditing
Our fiscal folk’s ranking is based on –
The amount of money awarded
Other audit reports
On-time reporting
Cash management issues
Only one or two approved programs
This information is then supplied to our program staff who have their own weighting system based on program staff input and ratings

49. Perkins States – Cash Management
In the absence of electronic transfers, most payments to your sub-recipients and contractors need to be on a “reimbursement basis only”
Many states have statewide bidding networks that meet the state’s bidding and procurement guidelines, including having 90 days to pay for equipment and supplies purchased through such agreements – States, school districts and community colleges need to take advantage of such agreements

50. When you have questioned
Never, ever, just concur
With an audit finding
When you have questioned
Costs!
You need to argue your point as to why you should not have to return funds before the final audit exit conference
State your case. Find alternate documentation. Reconstruct what is needed, etc.
Agree to put corrections in place, but try like heck to talk them out of returning $$$
MAKE SURE THAT YOUR ADMINISTRATION GIVES YOU INPUT INTO DECISIONS THAT AFFECT CTE!

51. Questions?