Vocational Rehabilitation Program Financial Management

1. Vocational Rehabilitation Program Financial Management National state rehabilitation council forum June 24, 2013

2. Today’s Presentation Terms for the Informed SRC • Basic Support Program Formula • Match • Maintenance of Effort (MOE) • Allowable Costs • I&E Expenditures • Federal Program Income • Carryover • Reallotted Funds • 107 Monitoring

3. Effective Partnership How can the SRC be an effective partner with the VR agency in improving the VR program? Be an INFORMED partner in fiscal matters!

4. The Basics

5. Basic Support Program Formula Determining State Allotments The allotment of Federal funds for vocational rehabilitation services for each State is computed in accordance with the requirements of Section 110 of the Rehabilitation Act.

6. Basic Support Program Formula The formula to allocate funds is based on a combination of factors including but not limited to: • State per capita income • State population Grant amounts are calculated in accordance with the program formula consistent with the appropriation level. *Refer to RSA Website for additional information

7. Guidance and Reference Materials Statute OMB Circulars EDGAR RSA ISSUANCES

8. Feeling Like a Fiscal analyst Yet? Good News! You don’t have to know ALL these details to be an effective SRC partner! More Good News! If you want to know more, the RSA Website: Guidance and Technical Assistance session will help you get there!!

9. What have we covered so far? Terms for the Informed SRC • Basic Support Program Formula • Match • Maintenance of Effort (MOE) • Allowable Costs • I&E Expenditures • Federal Program Income • Carryover • Reallotted Funds • 107 Monitoring

10. Match 21.3% STATE SHARE 78.7% FEDERAL SHARE 34 CFR 361.60(a)

11. Match Typical Sources… • State appropriations. • Transfers from other units of State government. • Third-party cooperative arrangements involving funds from other public agencies. (34 CFR 361.28)

12. Match Calculation FOR EXAMPLE • $27,800,000 (award amount) / .787 (Fed share) = $35,324,015 • In this example, total program outlays must equal or exceed $35,324,015 for the grantee to utilize its entire Federal allotment of $27,800,000. • $35,324,015 - $27,800,000 = $7,524,015 (State share of program expenditures)

13. Match Federal Allotment $27,800,000 Required State Match $7,524,015 Total Program Outlay $35,324,015 34 CFR 361.60(a)

14. Match • Expenditures from both agencies - General and Blind - are combined to determine compliance with the match requirement.

15. Maintenance of Effort • In any given Federal FY, if State non-Federal expenditures fall below total State non-Federal expenditures for the fiscal year two years before the FY under review, the State has not met its MOE requirement. 34 CFR 361.62

16. Maintenance of Effort FOR EXAMPLE State Expenditures FY 2011 $14,665,000 2011 + 2 years = State MUST expend a minimum of $14,665,000 in FY 2013

17. Maintenance of Effort FY 2011 $14,665,000 FY 2013 $14,000,000 MOE Shortfall($ 665,000)

18. Maintenance of Effort FY 2013 MOE Shortfall ($665,000) This means:

19. Maintenance of Effort • Expenditures from both agencies - General and Blind -are combined to determine compliance with the MOE requirement.

20. Maintenance of Effort Waivers… May be granted to permit the State to respond to exceptional or uncontrollable circumstances i.e. natural disasters 34 CFR 361.62(d)

21. Allowable Costs Governmental units are responsible for the efficient and effective administration of Federal awards.

22. Allowable Costs Costs must be: • Necessary and reasonable for the proper and efficient performance and administration of Federal awards. • Allocable to Federal awards under the provisions of the Circular. • Authorized or not prohibited under State or local laws or regulations. 2 CFR Part 2, 225

23. What have we covered so far? Terms for the Informed SRC • Basic Support Program Formula • Match • Maintenance of Effort (MOE) • Allowable Costs • I&E Expenditures • Federal Program Income • Carryover • Reallotted Funds • 107 Monitoring

24. I&E Expenditures I&E = Innovation & Expansion Activities States must use a portion of funds allotted for the development and implementation of innovative approaches to expand and improve the provision of vocational rehabilitation services. 34 CFR 361.35

25. I&E and the SRC • I&E is found in State Plan Attachment 4.11(d) • The SRC reviews the State Plan • I&E = funding support for the SRC • The SRC needs a Resource Plan for its funding support (34 CFR 361.17 (h)(8)(i)(1)-(5))

26. Federal Program Income • …income received by the State that is directly generated by an activity supported under the grant. • Typical sources 34 CFR 361.63 • Payments from the SSA for rehabilitating Social Security beneficiaries • Payments received from workers’ compensation funds • Fees for services to defray part or all of the costs of services provided • Income generated by a State-operated community rehabilitation program 34 CFR 361.63(b)

27. Federal Program Income • Must be used for the provision of VR services, administration of the State Plan, or carrying out innovation and expansion activities • Must be spent before Federal funds are drawn down • Can also be transferred to: • Independent Living – Parts B and C • Independent Living – OIB • Client Assistance Program

28. Carryover • Any Basic Support Program funds which remain unobligated at the end of the year of appropriation…including realloted funds…remain available for obligation during the succeeding fiscal year… • The state may only carry forward the unexpended Federal funds it was able to match in the year the funds were appropriated. 34 CFR 361.64

29. Reallotted Funds • No later that 45 days before the end of each fiscal year, States report to RSA any amount of their full allotment which cannot be used or matched. • As soon as possible, but not later than the end of the fiscal year, RSA reallots these funds to other States that can use those additional funds during the current or subsequent fiscal year...

30. Reallotted Funds …providing the State can meet the matching requirement by obligating the non-Federal share of any reallotted funds in the fiscal year for which the funds were appropriated. Funds reallotted to another State are considered to be an increase in the recipient State’s allotment for the fiscal year for which the funds were appropriated. 34 CFR 361.65(b)

31. 107 Monitoring We’re from the Federal Government... And, we’re here to HELP you!

32. 107 Monitoring • Section 107 of the Rehabilitation Act of 1973, as amended, requires the Commissioner of the Rehabilitation Services Administration (RSA) to conduct annual reviews and periodic on-site monitoring of programs authorized under Title I of the Rehabilitation Act to determine whether a vocational rehabilitation (VR) agency is complying substantially with the provisions of its State Plan under Section 101 of the Rehabilitation Act and with the Evaluation Standards and Performance Indicators established under section 106.

33. 107 Monitoring • Monitoring and Technical Assistance Guide *Can be found on the RSA website* • Focus Areas • Organizational Structure • Transition Services • Fiscal Integrity The SRC is a stakeholder in the 107 monitoring process

34. Fiscal Integrity Priority Focus Area • Matching and Earmarking • Payroll • Procurement • Program Income • Property Management • Record Retention

35. Be an Informed Partner! Terms for the Informed SRC • Basic Support Program Formula • Match • Maintenance of Effort (MOE) • Allowable Costs • I&E Expenditures • Federal Program Income • Carryover • Reallotted Funds • 107 Monitoring

36. In Closing…. • Understand how the agency’s fiscal status may affect services • Be familiar with emerging issues Be an Informed Partner in Fiscal Matters!

37. Resources • RSA website: www.rsa.ed.gov • State Liaisons: www.rsa.ed.gov

38. Presenter Information Sean Barrett Financial Management Specialist Department of Education Rehabilitation Services Administration Sean.barrett@ed.gov 202-245-7604 Corinna Stiles Vocational Rehabilitation Program Specialist Department of Education Rehabilitation Services Administration Corinna.stiles@ed.gov 202-245-7374