1. Kristen Tosh Cowan, Esq. Brustein & Manasevit www.bruman.com WASBO Conference May 5, 2011

2.  2009 and 2010  2011  2012  2013 Brustein & Manasevit 2

3. Funding Trends  More consolidation  More competition Brustein & Manasevit 3

4. Standards and Assessments  Common Core debate Require or “incentivize” Brustein & Manasevit 4

5. Accountability  Growth Model  Subgroup accountability  No 100% proficiency Brustein & Manasevit 5

6. Accountability  School improvement – more nuanced Obama & Sen Dems – 4 SIG models for lowest % Republicans – More local flexibility Target interventions to struggling subgroup Choice/ SES – 1 option of many  New Rewards Program Brustein & Manasevit 6

7. Teacher Preparation and Evaluation  Preparation: Focus on teaching colleges Performance exam for classroom Alternate certification Brustein & Manasevit 7

8. Teacher Preparation and Evaluation  Evaluation: Multiple factors, including student assessment data Performance/ merit pay Brustein & Manasevit 8

9. Fiscal Requirements  Comparability End option to exclude salary differential to reflect seniority, as well as use of FTEs Move to measuring non-federal expenditures/ student  Supplement not Supplant  Maintenance of Effort Brustein & Manasevit 9

10. Federal scrutiny, monitoring and audits! 10 Brustein & Manasevit

11. ** #1 greatest area of audit exposure

12.  Easy finding for auditors  Unclear, contradictory guidance  Expensive!! Brustein & Manasevit

13.  OMB Circulars A-87: Cost Principles for State and Local Governments HHS Implementation Guide for A-87: ASMB C-10 (1997) http://rates.psc.gov/fms/dca/asmb%20c-10.pdf Brustein & Manasevit

14.  Cost Allocation Guide for State and Local Governments (or “Green Book”) (Sept 2009) http://www.ed.gov/about/offices/list/ocfo/fipao/gui deigcwebsite.pdf  Montana Compact www.bruman.com  Program-specific guidance  USDE officials Brustein & Manasevit

15. Compensation for Personnel Services:  If federal funds used for salaries, then time distribution records are required.  Must demonstrate= If employee paid with federal funds, then employee worked on that specific federal program/ cost objective. Brustein & Manasevit

16.  Time and attendance records  Payroll records Worked 8:00-4:00  Time and effort records  Time distribution records Worked 50% on Title I administration and 50% on nonfederal Brustein & Manasevit

17.  A-87 Definition: A function, organizational subdivision, contract, grant or other cost activity for which cost data are needed and for which costs are incurred. Brustein & Manasevit

18.  A Minimum Set-Aside or Maximum Cap: Title I- LEA Parent Involvement minimum (at least 1%); Title III – Cap on administration (no more than 2%)  Program services Title I program services Brustein & Manasevit

19.  Any employee working on a federal program ◦ Not contractors  All employees paid with federal funds  Some employees paid with non-federal funds ◦ Matching Brustein & Manasevit

20.  Semi-Annual Certification Signed every six months by supervisor or employee  “This is to certify that Kristen Cowan has worked 100% of her time for the period January 1, 2010, through June 30, 2010, on Perkins Administration.” Signature of employee: Date: Brustein & Manasevit

21.  Single cost objective (semi-annual cert)  Multiple employees  Signed by supervisor with first-hand knowledge (principal) Brustein & Manasevit

22.  Personnel Activity Reports (PAR) Signed every month by employee UNLESS, using “substitute system” (then 2 or 3 times per year)  “For the month of September 2009, I spent my time 50% on Title I Program Services and 50% on non-federal programs.” Signature of Employee: Date: Brustein & Manasevit

23.  After-the-fact record  Total activity for which employee compensated  At least monthly  Signed and dated by employee Brustein & Manasevit

24. Need reconciliation between:  programs that funded salaries, and  programs on which employees actually worked

25.  Initially, use budget estimates or other distribution percentages determined before the services are performed But these do not qualify as PARs!  May be used for interim accounting purposes Brustein & Manasevit

26.  Quarterly comparisons of actual costs to budgeted distributions  If difference between actual cost and budgeted cost is 10% or greater, then make adjustment quarterly  If difference is <10%, then make adjustment annually Brustein & Manasevit

28.  Combine administration for all NCLB programs  NOT non-administrative activities  Single Cost Objective  Semi-annual certification  LEA needs approval of SEA Brustein & Manasevit

29.  OMB Circular A-87 Cost Principles do not apply  No federal requirement to keep time and effort records for employees paid with SFSF  Same rules as those paid with non-federal  SFSF Guidance to Auditors, Dec 24, 2009 Brustein & Manasevit

30.  Contemporaneous records to show that SFSF-paid individuals: Worked sufficient hours to justify salary Level of salary was similar to other employees performing similar work Not paid more than once for same work Costs were reasonable Service actually provided No other funds were paid for the same service Brustein & Manasevit

31.  Compensation for school-level positions  Conflicting info from US Govt  USDE = OMB Circular A-87 applies  Time and effort? Keep documentation showing time spent at school site vs. district level If 100% at school = blanket semi-annual certification If both school and district = PAR Brustein & Manasevit

32.  Depends on the extent of consolidation of federal, state, and local funding.  Can be “conceptual” or “virtual” consolidation – not literal  The programs included in the Schoolwide Plan constitute a single cost objective *** per S.Brown at NASTID, Jan 2011 Brustein & Manasevit

33. If LEA/ school consolidates.... Then must keep... All federal, state, and local fundsNo time and effort records Federal only (“Consolidated federal pot”) Semi-annual – if works ONLY on SWP Plan (single cost objective) Monthly PAR – if works on SWP Plan and other programs not in Plan (multiple cost objectives) Nothing (only Title I funds SWP)Semi-annual – if works ONLY on SWP Plan (single cost objective) Monthly PAR – if works on SWP Plan and other programs not in Plan (multiple cost objectives) Brustein & Manasevit

34. IF:  Works 100% on SWP Plan  Paid 100% from consolidated pool that includes all federal, state, and local programs THEN:  No records are required. No distinction between federal and nonfederal Brustein & Manasevit

35. IF:  Works 100% on SWP Plan  Paid 100% from consolidated federal pool THEN:  Do semi-annual certs  “I spent 100% of my time on SWP” Brustein & Manasevit

36. IF:  Works 100% on SWP Plan  Paid 100% from Title I Part A (no consolidation) THEN:  Do semi-annual certs  “I spent 100% of my time on SWP” Brustein & Manasevit

37. IF:  Works 100% on SWP Plan  Paid 50% from Title I Part A and 50% from non-federal money (no consolidation) THEN:  Keep semi-annual certification – “I spent 100% of my time on SWP Plan” (per S. Brown – working on 1 cost objective - could have been funded 100% from Title I Part A, if had enough resources) Brustein & Manasevit

38. IF:  Works 50% on SWP Plan and 50% on Reading First (not included in Plan)  Paid 50% from Title I Part A and 50% from Reading First THEN:  Keep monthly PARs  “I spent 50% of my time on the SWP Plan and 50% on Reading First” Brustein & Manasevit

39. FALSE

41. 1. Plan initial funding allocations well May use “budget estimates” for initial allocations Supervisors need to be on board Brustein & Manasevit

42. Beware of Re-organizations!

43. 2. Develop written time distribution policies and procedures ◦ “How to” instructions for employees  reporting vacation, travel, long-term leave ◦ Manual for fiscal side  Frequency of comparing estimates to actual costs, handling of deviations, monitoring of system Brustein & Manasevit

44. 3. Train employees On mechanics of filling out form On which federal program cost objective they are working Refresher training New employee training Brustein & Manasevit

45. 4. Close supervision Supervisors should be aware of deviations of effort from initial budget estimates Be ready to redirect work of employee or adjust grant supporting salary Brustein & Manasevit

46. So maximize the flexible use of your federal dollars! 46 Brustein & Manasevit

47.  Combine administration for all NCLB programs  NOT non-administrative activities  Single Cost Objective  Semi-annual certification  LEA needs approval of SEA 47 Brustein & Manasevit

48.  Combine federal, state, and local funds into flexible pool to be used for improving entire school  Must have at least 40% poverty  Conduct needs analysis and develop plan!  Not required to: Identify Title I students for targeted services Maintain separate fiscal accounting records to track Title I $ to allowable Title I activity – only to activity in SWP plan Use Title I for supplemental purposes Brustein & Manasevit 48

49.  Ensure that the amount of Title I funds for that year is supplemental to the total amount of state and local resources that school would have received in the absence of Title I  Only look at total nonfederal dollars going into that school – not whether federal funds bought something “extra” Brustein & Manasevit 49

51.  Federal funds must be used to supplement and in no case supplant state and local resources

52.  “What would have happened in the absence of these federal funds??”

53. OMB Circular A-133 Compliance Supplement

54. #1: Provided with non- federal funds in prior year Brustein & Manasevit

55.  If SEA or LEA demonstrates it would not have provided services if the federal funds were not available  NO state or local resources this year! Brustein & Manasevit

56.  Fiscal or programmatic documentation to confirm that, in the absence of fed funds, would have eliminated staff or other services in question  State or local legislative action  Budget histories and information Brustein & Manasevit

57. 1. Actual reduction in state or local funds 2. Decision to eliminate service/ position was made without regard to availability of federal funds (including reason decision was made) Brustein & Manasevit

58. #2. Required to be made available under (other federal), state, or local laws Brustein & Manasevit

59.  USDE assumes state and local officials will work to find a way to comply with a state-mandated requirement.  “While it is conceivable that an SEA or LEA could demonstrate that its loss of revenue is so great that it cannot meet a legal requirement, we believe that it typically would be extremely difficult to do so”  “The bar for rebutting this presumption is very high” Letter from Asst. Secretary Melendez to Leigh Manasevit, January 2011. Brustein & Manasevit

60. December 1-2, 2011 Las Vegas, NV To register: www.bruman.com

61. This presentation is intended solely to provide general information and does not constitute legal advice. Attendance at the presentation or later review of these printed materials does not create an attorney-client relationship with Brustein & Manasevit. 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 61