American Recovery & Reinvestment Act North Carolina’s Perspective

1. NASACT Middle Managment Conference American Recovery & Reinvestment Act North Carolina’s Perspective Beth A. Wood, CPA North Carolina State Auditor

2. American Recovery & Reinvestment Act • Total Stimulus $ - $787 Billion • $225 Billion to State & Local Governments • $10.6 Billion – North Carolina’s Share • $9.0 Billion – State & Local Governments • $1.6 Billion – Individuals and Organizations, i.e., Pell Grant, Military Spending, Food Stamps

3. American Recovery & Reinvestment Act • Risks • $ Coming Hard and Fast • “Push” to Get Monies Out • New Requirements/Timing • Increased Scrutiny • Lot of Monies Passed to Local Govts • Old Existing Problems

4. American Recovery & Reinvestment Act • North Carolina’s Approach • Set Up Office Of Economic Recovery & Investment (OERI) • Assessed Programs For Risk of Failure • Provided Assistance to State Agencies & Subrecipients Note: North Carolina Had Federal Auditors

5. American Recovery & Reinvestment Act • North Carolina’s Approach (State Auditor) • Pre-emptive Strike • Assessed Readiness of State Agencies • Assessed State Agencies’ Guidance/Directives to Their Grantees • Issued 8 Reports (interim)

6. American Recovery & Reinvestment Act • Reporting: • Not Centralized for North Carolina • Higher Risk of Errors

7. American Recovery & Reinvestment Act • Findings (cont’d): • Deficiencies in Cash Management Practices • Deficiencies in Internal Control Over Earmarking • Deficiencies in Internal Control Period of Availability of Funds • Failure to Comply-Suspension & Debarrment • Noncompliance – Maintenance of Effort

8. American Recovery & Reinvestment Act • Findings (cont’d): • Inadequate Reconciliation of Medicaid Payments • Salaries Not Allocated Based on Time & Attendance • Error in Level of Support Calculation • Ineligible Benefit Payments

9. American Recovery & Reinvestment Act • Where Do We Go From Here? • 2011 & 2012 Audits • All Type A Programs with ARRA Funds Audited as Majors for 2010 • Bulk of Expenditures 2010 • Follow Up on Prior Years’ Findings

10. Federal Recovery Moneys • Who’s Involved? Federal Level • Federal Agencies • Governmental Accountability Office (GAO) • Agency Office of Inspector Generals (OIG) • Office of Management & Budget (OMB)

11. Federal Recovery Moneys • Who’s Involved? State Level • Office Of Economic Recovery Investment (OERI) • State Agencies • Local Government Commission (LGC) • Office of State Auditor (OSA)

12. Federal Recovery Moneys Whose Involved? - Federal • Federal Agencies • Federal Agencies Perform Risk Analysis-Request OMB Designate High Risk Programs • Dedicate Page of Primary Website to Recovery Act Activities • Post Funding Opportunities/Program Requirements

13. Federal Recovery Moneys Whose Involved? - Federal • Federal Agencies (cont’d) • Make Clear ARRA is One-Time Funding • Modify Standard Award Terms Conditions • Include Other Award Terms Needed • Include Terms/Conditions for First tier sub-awardees • Include Requirement for Reporting to Appropriate OIG Fraud/Misappropriation

14. Federal Recovery Moneys Whose Involved? - Federal • Governmental Accountability Office (GAO) • Known as “Congressional Watchdog” • Investigates How Federal Govt Spends Taxpayer $ • GAO Required to Audit Recovery Funds • 16 States – North Carolina Chosen

15. Federal Recovery Moneys Whose Involved? - Federal • Governmental Accountability Office (cont’d) • Monitoring Efforts of State • Monitoring Efforts of Local Governments • Reports to Congress Bimonthly • GAO Website – www.gao.gov

17. Federal Recovery Moneys Whose Involved? - Federal • Federal Agency Office of Inspector General (OIG) • Most Federal Agencies Have OIG • Responsible for Integrity of Programs of Agency • Perform Audits, Investigations, Evaluations • May Designate Higher-Risk ARRA programs

18. Federal Recovery Moneys Whose Involved? - Federal • Office Of Management & Budget (OMB) • Issues A-133 Compliance Supplement • No Information in 2009 Compliance Supplement – Part 4 • Addendums Posted End of Each Month • Compliance Supplement, Appendix 7 – Addenda Will Be Posted

19. Federal Recovery Moneys Whose Involved? - Federal • Office Of Management & Budget (OMB) • One Addendum Posted to-date • Second Addendum Coming Soon • OMB Website – www.whitehouse.gov/omb/management • Click on Grants Management • Click on Circulars

20. Federal Recovery Moneys Whose Involved? - State • Office of Economic Recovery Investment (OERI) • Division of Governor’s Office • Official Coordinator, Monitor, Clearinghouse for North Carolina • “Beefing Up” Agency Monitoring of ARRA Funds • Holding Workshops Across the State

22. Federal Recovery Moneys Whose Involved? - State • Office of Economic Recovery Investment (OREI) (cont’d) • Issues Directives to State Agencies – (6 Directives to date) • Maintains Schedule of Stimulus Moneys in NC - Funding and Disbursements • Maintains Website • Website – www.ncrecovery.gov

23. Single Audit Update Whose Involved? - State • State Agencies • Segregate ARRA Moneys • Identify ARRA Moneys Passed to Subrecipients • Ensure Requirements for ARRA Moneys Communicated to Subrecipients • Perform Effective Monitoring of ARRA Moneys at Subrecipient

24. Single Audit Update Whose Involved? - State • State Agencies (continued) • Provide Technical Support to Subrecipient • Ensure Subrecipient Reporting • Provide Guidance for Subrecipient Reporting

25. Single Audit Update Whose Involved? - State • Local Government Commission (LGC) • Provides Oversight for Local Governments • Monitors Audit Contracts for Local Governments • Working Closely with OERI • Coordinates & Makes Available State’s Compliance Supplements

26. Single Audit Update Whose Involved? - State • Local Government Commission (LGC) • Website: www.nctreasurer.com

30. Federal Recovery Moneys Whose Involved? - State • Office of the State Auditor (OSA) • OSA Role & Responsibility to Stimulus/Recovery Moneys • Interim Audit Work • Fall 2009 • Spring 2010

31. Federal Recovery Moneys Local Governments - Counties • Need Process For Accepting ARRA $ • Segregate ARRA $ • Should be Aware of Recovery Act Compliance Requirements • Control Procedures Should be in Place • Be Prepared to Report Starting 9/30

32. Federal Recovery Moneys Local Governments - Counties • Control Procedures Should be in Place • Allowable Costs (Compliance requirements A and B[2]); • Cash Management (Compliance requirement C). • Eligibility Requirement (Compliance requirement E); • Reporting • Reports identified in Part 4 of the Addendum • Systems designed to collect the data required by the ARRA section 1512 report (Compliance requirement L)

33. Federal Recovery Moneys Section 1512 Reporting • Who is required to report under Section 1512? • Prime recipients who receive Recovery Act funds • Prime recipients may delegate certain reporting responsibilities to “first tier” sub-recipients

34. Federal Recovery Moneys Section 1512 Reporting • What’s Going on In North Carolina? • State Agencies • Local Governments

35. Federal Recovery Moneys Section 1512 Reporting What reporting is required? • Total amount offunds received; and of that, the amount spent on projects and activities; • A list of projects and activities funded by name to include: • Description, Completion status, Estimates on jobs created or retained; • Details on sub-awards and other payments

37. Federal Recovery Moneys Section 1512 Reporting Do Organizations Report on All ARRA Money Received?

38. Federal Recovery Moneys • List of Programs Subject to ARRA Section 1512 Reporting

39. Basic Principles and Requirements Prime Recipient Basic requirements • Federal Funding Agency Name • Award identification • Recipient D-U-N-S • Parent D-U-N-S • Recipient CCR information • CFDA number, if applicable • Recipient account number • Project/grant period • Award type, date, description, and amount • Amount of Federal Recovery Act funds expended to projects/activities • Activity code and description • Project description and status • Job creation narrative and number • Infrastructure expenditures and rationale, if applicable • Recipient primary place of performance • Recipient area of benefit • Recipient officer names and compensation (Top 5) • Total number and amount of small sub-awards; less than $25,000

40. Basic Principles and Requirements Sub-Recipient Basic requirements (also referred to as FFATA Data Elements) • Sub-recipient D-U-N-S • Sub-recipient CCR information • Sub-recipient type • Amount received by sub-recipient • Amount awarded to sub-recipient • Sub-award date • Sub-award period • Sub-recipient place of performance • Sub-recipient area of benefit • Sub-recipient officer names and compensation (Top 5) *Prime recipient reports unless delegated to sub-recipient 40

41. Basic Principles and Requirements When is the reporting required to begin? • Initial reports are as of September 30 and due October 10 • Reporting is cumulative from enactment of the Recovery Act How will recipients report? • Report via www.FederalReporting.gov Can Section 1512 reporting be combined with existing Federal reporting requirements? • No, www.FederalReporting.gov is exclusively for Section 1512 reporting • Additional Reporting Issues • No waivers • Noncompliance could be treated as a violation of the award agreement • All information will be available to the public 41

42. In-bound Recipient Reporting (FederalReporting.gov) Timeline and Activities No less than 35 days prior to the end of the quarter 90 days after end of Quarter 30 days after end of Quarter 1 – 10 days after end of Quarter 11 – 21 days after end of Quarter 22 – 29 days after end of Quarter Prime Recipients & Subs Enter Draft Reporting Data Prime Recipients Review Data Submitted By Sub(s) Agency Review of Data Submitted Recipient Reports Published on Recovery.gov 4 6 2 8 Agency, Prime and Sub Recipient Registration Initial Submission Prime Recipients & Subs Make Corrections Prime Recipients & Subs Make Corrections Next quarterly reporting cycle begins- updates reflected cumulatively 1 3 5 7 10 days after end of Quarter 9 Agency “View Only” Agency Comment Period Recipient Report Adjustments Possible Draft Initial Submission Final Submission Published Report Status: Federal Recovery Moneys 42

43. Federal Recovery Moneys • Additional Websites: • www.recovery.gov – shows overall plans for recovery money. • Provides access to individual federal agencies • www.grants.gov – Find and apply for federal government grants • www.gaqc.aicpa.gov – AICPA Government Audit Quality Center

44. Federal Recovery Moneys • Additional Websites: • www.federalreporting.gov – Reporting guidelines from OMB for quarterly reports to federal agencies

45. Federal Recovery Moneys Other Issues • CFDA # • New CFDA # New ARRA Programs • New CFDA # for Existing Programs But ARRA Mandates Significantly Different Requirements - Clusters • Existing Programs ARRA Requirements not Significantly Different – May or May Not Get New CFDA#

46. Federal Recovery Moneys Other Issues • Clusters • New CFDA # • Existing Program/New CFDA# for ARRA • Changes in Clusters Posted : www.whitehouse.gov/omb/management • Changes Posted End of Each Month

47. Federal Recovery Moneys Other Issues • Award Terms & Conditions/Compliance Requirements • 2009 Audits

48. Federal Recovery Moneys Other Issues • Schedule of Expenditures of Federal Awards (SEFA) • Recipients Must Maintain Records that Identify Source and Application of ARRA $ • Separately Identify ARRA Funds on SEFA and Data Collection Form

49. Federal Recovery Moneys Other Issues • Looking Ahead? • Complete Single Audit Reports (including findings) available publicly for years ending on/after September 30, 2009 • Ongoing OMB/GAO Discussions • Additional Work on Internal Control • Change in Submission Deadline

50. Federal Recovery Moneys Assistance Office of Economic Recovery and Investment Jimmy Carter – 919-733-1567