How ESEA Reauthorization will impact LEAs (… and how it won’t)

1. How ESEA Reauthorization will impact LEAs(… and how it won’t) Kristen Tosh Cowan, Esq. Brustein & Manasevit www.bruman.com PAFPC Conference April 5, 2011

2. ESEA Reauthorization- Timing 2009 and 2010 2011 2012 2013 Brustein & Manasevit

3. ESEA Reauthorization Funding Trends • More consolidation • More competition Brustein & Manasevit

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

5. ESEA Reauthorization Accountability • Growth Model • Subgroup accountability • No 100% proficiency Brustein & Manasevit

6. ESEA Reauthorization 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

7. ESESA Reauthorization Teacher Preparation and Evaluation • Preparation: • Focus on teaching colleges • Performance exam for classroom Brustein & Manasevit

8. ESESA Reauthorization Teacher Preparation and Evaluation • Evaluation: • Emphasis on outputs • Multiple factors, including student assessment data • Performance/ merit pay Brustein & Manasevit

9. ESEA Reauthorization Fiscal Requirements • Comparability • Close loophole of excluding salary differential to reflect seniority • Move to measuring non-federal expenditures/ student • Supplement not Supplant • Maintenance of Effort Brustein & Manasevit

10. What won’t be changing in reauthorization . . . . Federal scrutiny, monitoring and audits! Brustein & Manasevit

11. Time and Effort Documentation for Employees Paid with Federal Funds ** #1 greatest area of audit exposure

12. Why should you care? Easy finding for auditors Unclear, contradictory guidance Expensive!! Brustein & Manasevit

13. OIG Time and Effort Findings: 2006 – Columbus – $2.3 million 2008 – Detroit - $49 million 2010 – Philadelphia - $123 million Brustein & Manasevit

14. QUIZ: Is a district’s employee attendance system sufficient to meet time documentation requirements? No

15. Terminology • 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

16. QUIZ:If an employee is paid from non-federal money that is used for a match, then is the employee required to keep time and effort records? YES

17. QUIZ:Are classroom teachers who are federally-paid required to keep time and effort records? YES

18. Who must participate? • 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

19. OMB Circular A-87:If employee works 100% on single cost objective • 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

20. OMB Circular A-87:If employee works on multiple cost objectives • Personnel Activity Reports (PAR) • Signed every month by employee • “For the month of September 2010, I spent my time 50% on Title I Program Services and 50% on non-federal programs.” Signature of Employee: Date: Brustein & Manasevit

21. PARs must: After-the-fact record Total activity for which employee compensated At least monthly (unless substitute system) Signed and dated by employee Brustein & Manasevit

22. What else is not going away? Equitable Services to Nonpublic School Students

23. Equitable Services: #1 most common finding of noncompliance in USDE Title I program monitoring

24. Commonly Cited Problems Inadequate Public Control and Oversight of Funds Failure to Distribute Set-Asides Inadequate evaluation of program Inadequate consultation Third Party Contracts and Invoices Brustein & Manasevit

25. 1) LEA controls! • LEA is responsible for planning, designing and implementing the Title I program • Through consultation • LEA cannot delegate to private schools or third party contractors

26. 2) Deriving Allocation and Set-Asides Separate “pots”: • Instructional Allocation • Includes districtwide instruction (set-aside) • Parent Involvement (set-aside) • Professional Development (set-aside) • Administration (LEA and third party provider costs) Brustein & Manasevit

27. Instructional Allocation • Based on number of: • Private school students • From low-income families • Who reside in Title I-participating public school attendance areas

28. Inadequate Oversight of Third Party Contractors Contracts and Invoices: • SEA must require LEA to ensure third party is in compliance • Provider give “technical descriptions . . . in detail sufficient to enable the LEA to determine” if requirements met

29. LEAs must exercise proper oversight over invoices • Invoice expenditures in 2 categories: • Instructional activities and administrative costs • Within each category, provide detail sufficient to determine compliance • Name and salary of each teacher, instructional materials purchased, supervisor’s salary, office expenses, travel costs, capital expense type costs, and fee

30. With or without reauthorization, LEAs will need to do more with less So maximize the flexible use of your federal dollars! Brustein & Manasevit

31. Consolidated Administration • Combine administration for all NCLB programs • NOT non-administrative activities • Single Cost Objective • Semi-annual certification • LEA needs approval of SEA Brustein & Manasevit - March 18, 2011

32. Transferability- LEAs not ID SI • May transfer up to 50% of funds under: • Title II Part A (Teacher Training) • Title II Part D (Ed Tech) • Title IV (Safe and Drug Free) • Transfer to Title I Part A or any of the above programs • Increases the base on which calculating set asides Brustein & Manasevit

33. Transferability – LEAs ID for SI Transfer up to 30% May only use for school improvement activities (1003 or 1116) Brustein & Manasevit

34. Transferability – How to use Notify SEA Modify local plans (submit to SEA within 30 days) Consult with private school officials Brustein & Manasevit

35. Schoolwide Programs • 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

36. Schoolwide Programs – Supplement not supplant 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

37. Supplement Not Supplant

38. Supplement not Supplant – General Rule: Federal funds must be used to supplement and in no case supplant state and local resources

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

40. Auditors’ Tests for Supplanting OMB Circular A-133 Compliance Supplement

41. Auditors presume supplanting occurs if federal funds were used to provide services . . . #1. Required to be made available under other federal, state, or local laws

42. Auditors presume supplanting occurs if federal funds were used to provide services . . . #2: Provided with non-federal funds in prior year

43. Presumption Rebutted! • 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!

44. What documentation needed? • 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

45. Documentation must show: Actual reduction in state or local funds Decision to eliminate service/ position was made without regard to availability of federal funds (including reason decision was made)

46. Brustein & Manasevit Spring Forum April 27-29, 2011 Washington, DC To register: www.bruman.com

47. Brustein & Manasevit

48. 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