American Recovery & Reinvestment Act (ARRA) July 10, 2009 10:00 a by 3VS5zGSN

VIEWS: 8 PAGES: 39

									 American Recovery &
Reinvestment Act (ARRA)
            July 10, 2009
             10:00 a.m.
http://www.isbe.net/arra/default.htm

                                       1
School Business Services
            DEB VESPA
       Division Administrator
          (217-785-8779)
         dvespa@isbe.net




                                2
    Historic, one-time investment to stimulate
         economy & improve education

   Effective with the second General State Aid
payment in April 2009, ARRA funds were distributed
                 to school districts




                                                 3
                       Definitions
 ARRA – “American Recovery and Reinvestment
  Act of 2009”
 SFSF Program – State Fiscal Stabilization Fund
  Program (ARRA General State Aid)
 ARRA – Title I Funds
 ARRA – IDEA Funds
 ARRA Capital Projects:
   Qualified School Construction Bonds (QSCB)
   Qualified Zone Academy Bonds (QZAB)
                                                 4
   Build America Bonds (BAB)
      Payment of ARRA GSA Funds
   ISBE will be using SFSF funds to pay the final GSA payments in
    FY 2009
   It is anticipated that the SFSF funds will be utilized to pay for
    approximately five GSA payments in FY 2010
   All districts should have submitted an application and assurance
    statement for the ARRA-GSA funds by April 17, 2009
   Districts will be required to report on the estimated number of
    jobs saved and/or created by SFSF funds. Guidance will be
    forthcoming
   Districts will be required to track and report on expenditures
    paid with ARRA funds
                                                                        5
Application and Assurance Statement
 Districts are to administer and use the SFSF program funds in
  accordance with all applicable statutes, regulations, and applications
 Recipients cannot use SFSF funds for:
     Payment of maintenance costs;
     Stadiums or other facilities used for athletic contests, exhibitions or
      other events for which admission is charged to the general public;
     Purchase or upgrade of vehicles;
     Improvements of stand-alone facilities whose purpose is not the
      education of children – such as central office administrative
      buildings;
     Financial assistance to students to attend private elementary or
      secondary schools unless the funds are used to provide special
      education and related services to children with disabilities as
      authorized by the IDEA Act;
     School modernization, renovation, or repair that is inconsistent with
      State Law.                                                              6
   Emergency Accounting Rules
Because of the tracking necessary for ARRA
  federal funds, emergency accounting
  rules were necessary to:
 Designate ARRA revenue districts receive
 Document ARRA expenditures paid via
  each type of ARRA revenue source

                                         7
            ISBE Emergency Rules
  Accounting Requirements for ARRA
     Revenues and Expenditures
Emergency Rules and Regulations have
been posted for accounting requirements
and are located at:

http://www.isbe.net/rules/archive/pdfs/23IAC100EmergAmnd_Code.pdf
                                                               8
 New Rules
are available
  here for
  viewing

                Rules can also be
                found at www.isbe.net,
                click on “rules”


                                    9
        ISBE Emergency Rules
 ARRA GSA funds received should have a revenue
  account/source code of 4850 and may be deposited
  into any fund except Working Cash
 Other NEW ARRA revenue account codes:
  4851 – 4855 Title I Low Income; Neglect, Private;
   Delinquent, Private; School Improvement (Part A);
   School Improvement (Part G)
  4856 – 4857 IDEA Part B, Preschool; IDEA Part B,
   Flow-Through

                                                       10
          ISBE Emergency Rules
 Other NEW ARRA revenue account codes (cont.):
    4860 – 4861 Title IID, Technology-Formula; Title IID,
     Technology-Competitive
    4862 – McKinney-Vento Homeless Education
    4863 – Child Nutrition Equipment Assistance
    4864 – 4865 Impact Aid Formula Grants and Impact Aid
     Competitive Grants
    4866 – 4869 QZAB Tax Credits, QSCB Credits, BAB Tax
     Credits, and BAB Interest Reimbursement
    4870 – 4880 Designated for other ARRA revenues and must
     be specified
    These can be located in Table C of the Emergency Rules    11
        ISBE Emergency Rules
•ARRA Expenditures must reflect Fund,
Function, Object, and now a NEW fourth
dimension -- revenue account code

Fund Function   Object   Revenue Source Code
 XX   XXXX       XXX          XXXX
 01   1100       100          4850



                                               12
          ISBE Emergency Rules
 All funds must be expended in accordance to their
  respective purposes as authorized by the relevant federal
  law, regulation, and guidance
 In order to comply with the federal regulations, each district
  receiving funds under ARRA shall include in its annual
  financial report (AFR) a detailed schedule of its receipts
  and expenditures for each revenue source received
 Districts will need their auditors to audit the detailed
  schedule of receipts and expenditures
 Districts may now be required to have an A-133 Single
  Audit conducted. They should inquire with their auditor if
  this will be necessary for the audit of their Fiscal Year 2009
  and if their auditor meets the necessary criteria to conduct 13
  A-133 audits
       ISBE Emergency Rules
              A-133 Audit is required if:
            District expends $500,000 or more
           in total federal funds for a fiscal year
 This also includes the last five payments of the districts’
  GSA as these are now considered federal funds.
 ISBE is anticipating approximately 200 additional districts
  will now be required to have an A-133 audit.
 Districts should be checking with their auditors to
  determine if they will need an A-133 audit and if their
  auditors qualify to conduct such an audit

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        Accumulated Interest
Since the ARRA GSA payments are considered
federal funds, ISBE is asking for guidance as to
whether these funds can accumulate interest.


Until this guidance is received, it is recommended that
districts reflect ARRA GSA revenues were used to pay
for allowable expenditures and reflect local revenue as
invested.


                                                      15
           ISBE Emergency Rules
                     Fiscal Year 2009 Issues
Districts may be required to amend their budgets
 Budgets – To Amend or Not??
    If a district is expending ARRA funds in FY 2009 and these
     expenditures are not budgeted in the current budget, a budget
     amendment will be necessary
    If a district is expending ARRA funds in FY 2009 and the total
     expenditures in any fund is more than their current budget, a budget
     amendment will be necessary
    If a district is expending just ARRA GSA, most probably the
     expenditures are already budgeted, the total expenditures in any fund
     will not increase and a budget amendment will not be necessary
    If a district is expending ARRA Title I, ARRA IDEA, etc. most probably
     the expenditures are not budget, the total expenditures will increase and
     a budget amendment will be necessary – this includes flow-through       16
     funds from a special education cooperative
           ISBE Emergency Rules
               For Fiscal Years 2010 and 2011
 For FY 2010 and 2011 Budgets
    Districts will be required to document expenditures with fund, function,
     object, and revenue account code for ARRA expenditures within their
     detailed ledger reports
    ISBE budget is not expected to change as ISBE does not collect
     expenditures to the fourth dimension – “revenue account code”
 For FY 2010 and 2011 AFR
    The 2010 and 2011 AFR will include the ARRA schedule of receipts and
     expenditures to document revenue and expenditures of ARRA funds
    The schedule is part of the district’s audit
    An A-133 Single Audit may be necessary

                                                                                17
           ISBE Emergency Rules
                       For Fiscal Year 2012
 For FY 2012 Budget
    Districts will be required to document expenditures with fund, function,
     object, and revenue account code for ARRA expenditures within their
     detailed ledger reports as ARRA Funds can be obligated and expended
     through September 2011.
    ISBE budget is not expected to change as ISBE does not collect
     expenditures to the fourth dimension – “revenue account code”
 For FY 2012 AFR
    The 2012 AFR will include the ARRA schedule of receipts and
     expenditures to document revenue and expenditures of ARRA funds
    The schedule is part of the district’s audit
    An A-133 Single Audit may be necessary
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                       Bond Options
•Qualified Zone Academy Bonds (QZAB)
Were first authorized in 1997 by amendment of the Internal Revenue
Code of 1986. The governing language explicitly designates ‘state
education agencies’ as the authority to allocate the individual state
volume caps.
Each calendar year, beginning with 1998 the national volume cap (the
amount of bonds that can be so designated nationally for QZAB
purposes) was $400 million and allocated among the states based upon
poverty counts. With the ARRA, the national volume cap was increased
to $1.4 billion for each of calendar years 2009 and 2010. To qualify for
an allocation by the state education agency (ISBE in the case of ILL)
there are curriculum design requirements, eligibility requirements, and a
private business contribution requirement. The bonds issued can be
used for repairs, renovations, curriculum development, or teacher
training relative to a ‘Zone Academy’, but cannot be used for new        19

construction.
                        Bond Options
•Qualified School Construction Bonds
(QSCB)
Is a new designation for bonds authorized for the first time through the
ARRA. The national volume caps are $11 billion for each of 2009 and
2010. The legislation is an amendment to the Internal Revenue Code of
1986. Unlike QZAB’s, virtually any school district or joint agreement is
eligible to apply and receive an allocation from the ‘State.
After receiving an allocation of the state’s volume cap, an issuing district
designating a bond issue or part of a bond issue as QSCB’s would
make principal payments on the bonds, but the bond holders would
receive federal income tax credits in lieu of interest payments. The
proceeds of such bonds can be used for new construction as well as
repairs, renovations, etc.
                                                                          20
                       Bond Options
•Build America Bonds (BAB)
Build America Bonds (BAB’s) are also tax credit bonds, but they are
taxable bonds rather than tax-exempt bonds, and they are not subject to
a national or state volume cap. Any school district or joint agreement
issuing bonds for construction type purposes can choose to designate
the issue or part of the issue as BAB’s. There are then two options. One
option involves paying taxable interest equal to 65% of the interest due
to the bond holders and filing paperwork with the IRS such that the bond
holder is eligible to claim the remaining 35% of the interest due as a tax
credit. Under the other option, the district would pay the full amount of
interest due on the bonds and then file a form with the IRS to receive a
reimbursement check from the IRS equal to 35% of the interest paid.


                                                                        21
                      Bond Options
Specific guidance on these bond programs is available from the IRS at
the following web address:
http://www.irs.gov/newsroom/article/0,,id=206044,00.html



Applications are being developed, watch Superintendent’s Weekly
Message and ISBE website at:
http://www.isbe.net/construction/html/qzab.htm




                                                                        22
      Funding &
Disbursement Services
         LARRY SMITH
      Principal Consultant
         (217-782-5256)
        ismith@isbe.net



                             23
            ARRA funds may lead to
          additional audit requirements
•A-133 audits are required for entities with Federal
 expenditures of $500,000 or more from all sources
 (direct and indirect)
•ARRA funds are Federal and must be included in
 determining if entity meets $500,000 threshold
•Many districts/joint agreements previously exempt
 may now be required to have an A-133 audit
http://www.isbe.net/funding/pdf/potential_A133_audits.pdf

                                                            24
http://www.isbe.net/funding/html/a133.htm




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     AUDITOR REQUIREMENTS – GOVERNMENT AUDITING STANDARDS
Auditors performing school district audits and A-133 audits must meet requirements under
Government Auditing Standards:

 •   Meet appropriate state licensing requirements
 •   Are independent from personal, external and organizational impairments
 •   Have a record of responsible work
 •   Have received a positive external quality control (peer) review within the last
     three years
       • Submit the peer review report and acceptance letter to ISBE
 •   Have adequate qualifications, including experience with the type of entity being
     audited
 •   Have completed required continuing professional education
 •   Have not been suspended or debarred from performing government audits
 •   Have not been the object of any disciplinary action during the past three years

      http://www.isbe.net/funding/pdf/audit_qualifications.pdf
                                                                                           26
    ARRA Funds – Auditor Requirements -
              Peer Review

  Each audit organization should have an appropriate internal
quality control system in place and undergo an external
quality control review (peer review). Government Auditing
Standards requires any CPA firm that performs governmental
audits to have a quality control review once every three years
by an organization not affiliated with their firm.




                                                           27
  ARRA Funds - Requirements for Auditors
•CPA firms that perform school district audits must be
qualified under Government Auditing Standards per ISBE
rules; if the firm is qualified under Government Auditing
Standards, it should be qualified to do an A-133 audit
•A-133 audits submitted using a non-qualified auditor may
be rejected by ISBE
•Additional information on A-133 audits and requirements
for CPA firms performing A-133 audits is available at:
http://www.isbe.net/funding/html/a133.htm
http://www.isbe.net/funding/pdf/audit_qualifications.pdf

                                                       28
         How much Federal aid did we receive?
http://www.isbe.net/funding/pdf/FRISfederalconfweb.pdf




                                                         29
ARRA REVENUE CODES AND CFDA NUMBERS                         REV            ARRA   ARRA
PROGRAM NAME                                               CODE   CFDA     CODE   CFDA


General State Aid – Education Stabilization Fund *         3001    N/A     4850   84.394
General State Aid – Govt. Services Stabilization Fund **   3001    N/A     4850   84.397
Title I – Low Income                                       4300   84.010   4851   84.389
Title I Neglected – Private                                4305   84.010   4852   84.389
Title I Delinquent – Private                               4306   84.010   4853   84.389
Title I School Improvement (Part A)                        4331   84.010   4854   84.389
Title I School Improvement 1003(g)                         4339   84.377   4855
IDEA Part B Preschool                                      4600   84.173   4856   84.392
IDEA Part B Flowthrough                                    4620   84.027   4857   84.391
Title II D Technology Formula                              4971   84.318   4860
Title II D Technology Competitive                          4972   84.318   4861
McKinney-Vento Homeless Education                          4920   84.196   4862   84.387
Child Nutrition Equipment Assistance                        N/A    N/A     4863   10.579

* Begins in FY 2009
** Begins in FY 2010




                                                                                      30
Federal Grantor/Pass-Through Grantor/               CFDA ISBE Project #        Receipts/Revenues          Expenditure/Disbursements4     Obligations/        Final
                                                         2
Program or Cluster Title and                       Number (1st 8 digits)      Year           Year             Year           Year         Encumb.            Status         Budget
                                                                         3
Major Program Designation                                  or Contract # 7/1/07-6/30/08 7/1/08-6/30/09   7/1/07-6/30/08 7/1/08-6/30/09
                                                     (A)        (B)            (C)            (D)              (E)            (F)            (G)              (H)                (I)

US DEPARTMENT OF EDUCATION

Passed through Illinois State Board of Education

 ARRA - GSA - Education Stabilization Fund (M)      84.394    09-4850-00                       476,623                         476,623                   $     476,623

 Title II - Teacher Quality                         84.281    08-4932-00           3,000         2,179           5,179                                   $          5,179              5,179

 Title II - Teacher Quality                         84.281    09-4932-00                        42,390                          46,646                   $      46,646             50,000

 Drug Free Schools - Formula                        84.186    08-4400-00           2,136                           762             961                   $          1,723              1,723

 Drug Free Schools - Formula                        84.186    09-4400-00             87          5,819                           4,419             1,400 $          5,819              5,000

 Federal - Spec. Ed. - IDEA - Room & Board          84.027   08-4625-EC                          1,854           1,854                                   $          1,854

 Title I - Low Income (M)                           84.010    08-4300-00         180,686                       151,298          28,390                   $     179,688           179,688

 Title I - Low Income (M)                           84.010    09-4300-00            998        184,899                         188,731             3,818 $     192,549           195,000

 ARRA Title I - Low Income (M)                      84.389    09-4851-00                       167,540                          15,867        151,673 $        167,540           167,540

TOTAL, US DEPT. OF EDUCATION                                               $     186,907 $     881,304 $       159,093 $       761,637 $      156,891 $      1,077,621
                                                                                                                                                                            31
Federal Grantor/Pass-Through Grantor/               CFDA ISBE Project #         Receipts/Revenues          Expenditure/Disbursements4     Obligations/       Final
                                                         2
Program or Cluster Title and                       Number (1st 8 digits)       Year           Year             Year           Year         Encumb.           Status         Budget
Major Program Designation                                  or Contract #3 7/1/07-6/30/08 7/1/08-6/30/09   7/1/07-6/30/08 7/1/08-6/30/09
                                                     (A)        (B)             (C)            (D)              (E)            (F)            (G)             (H)             (I)

US DEPARTMENT OF AGRICULTURE

Passed Through Illinois State Board of Education

 Commodities (Non-Cash)                             10.550       N/A                              6,348                           6,348

 Dept. of Defense Fresh Fruits and Vegetables       10.550       N/A                                857                             857

 ARRA - Child Nutrition Equipment Assistance        10.579    09-4863-00                          2,500                           2,500                  $          2,500

 Fresh Fruits and Vegetables (Cash)                 10.582    09-4240-00                          6,955                           6,955                  $          6,955

 National School Lunch Program                      10.555    08-4210-00          48,557         16,919          65,075             401                  $      65,476

 National School Lunch Program                      10.555    09-4210-00                         54,647                          63,315                  $      63,315

 School Breakfast Program                           10.553    08-4220-00          12,890          1,534          14,424                                  $      14,424

 School Breakfast Program                           10.553    09-4220-00                         13,450                          15,089                  $      15,089

 Child and Adult Care Food Program                  10.558    08-4226-00                          3,226                           3,226                  $          3,226

 Child and Adult Care Food Program                  10.558    09-4226-00                          2,850                           2,850                  $          2,850

TOTAL, US DEPT. OF AGRICULTURE                                             $      61,447 $      109,286 $        79,499 $       101,541 $            - $       181,040

TOTAL FEDERAL AWARDS                                                       $     248,354 $      990,590 $       238,592 $       863,178 $      156,891 $     1,258,661      32
Federal Grantor/Pass-Through Grantor/               CFDA ISBE Project #        Receipts/Revenues          Expenditure/Disbursements4      Obligations/          Final
Program or Cluster Title and                       Number2 (1st 8 digits)      Year           Year             Year           Year         Encumb.             Status         Budget
Major Program Designation                                  or Contract #3 7/1/07-6/30/08 7/1/08-6/30/09   7/1/07-6/30/08 7/1/08-6/30/09
                                                     (A)        (B)             (C)            (D)              (E)            (F)            (G)               (H)             (I)

US DEPARTMENT OF AGRICULTURE

Passed Through Illinois State Board of Education

 ARRA - Child Nutrition Equipment Assistance        10.579    09-4863-00                          2,500                           2,500                    $          2,500    N/A

 National School Lunch Program (Cash)               10.555    08-4210-00           48,557        16,919          65,075            401                     $      65,476       N/A

 National School Lunch Program (Cash)               10.555    09-4210-00                         54,647                          63,315                    $      63,315       N/A

 School Breakfast Program (Cash)                    10.553    08-4220-00           12,890         1,534          14,424                                    $      14,424       N/A

 School Breakfast Program (Cash)                    10.553    09-4220-00                         13,450                          15,089                    $      15,089       N/A

 Fresh Fruits and Vegetables (Cash)                 10.582    09-4240-00                          6,955                           6,955                    $          6,955    N/A

 Summer Food Program (Cash)                         10.559    08-4210-00                          4,647                           4,647                    $          4,647    N/A




 Fresh Fruits and Vegetables (Non-Cash)             10.555       N/A                                857                            857                                         N/A

 National School Lunch Program (Non-Cash)           10.555    09-4210-00                          5,080                           5,080                    $          5,080    N/A

 School Breakfast Program (Non-Cash)                10.553    09-4220-00                          1,268                           1,268                    $          1,268    N/A




TOTAL, US DEPT. OF AGRICULTURE                                             $       61,447 $     107,857 $        79,499 $       100,112 $                - $     178,754




TOTAL FEDERAL AWARDS                                                       $       61,447 $     107,857 $        79,499 $       100,112 $                - $     178,754
                                                                                                                                                                                33
       SEFA – List Subrecipients of ARRA Funds
Of the Federal Awards received by XXXX, the following grant amounts were provided to subrecipients:

                                                                                     CFDA             AMOUNT PROVIDED
PROGRAM TITLE – SUBRECIPIENT NAME                                                   NUMBER            TO SUBRECIPIENTS
ANYTOWN CUSD #1 – ARRA-TITLE I LOW INCOME                                            84.389                     $25,384
ANYTOWN CUSD #1 – ARRA-McKINNEY-VENTO HOMELESS                                       84.387                     $10,896


ANYTOWN SPECIAL EDUCATION DISTRICT
IDEA PART B FLOWTHROUGH                                                              84.027                      $8,963
ARRA-IDEA PART B FLOWTHROUGH                                                         84.391                      $9,847




                                                                                                                 34
                       Funding and Disbursement Services
http://www.isbe.net/funding/default.htm                    (217) 782-5256




                                                                      35
ISBE continues to get guidance from the
USDE every day. Please watch our
website at http://www.isbe.net/arra/default.htm and
the Superintendent’s Weekly Message for
up to the minute guidelines for ARRA
funds.

We will be passing this guidance on to
you as quickly as we received it.
                                                  36
                ARRA Resources
• ISBE ARRA Webpage:
  http://www.isbe.net/arra/default.htm

• Illinois ARRA Webpage:
  http://www.illinois.gov/recovery/

• ED ARRA webpage:
  http://www.ed.gov/policy/gen/leg/recovery/index.html

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                        At www.isbe.net,
                           click here to
                          receive more
                         information on
                          ARRA Funds

  At www.isbe.net,
 click here to review
the Superintendent’s
 Weekly Messages
     and archived
      messages




                                  38
Questions




            39

								
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