The American Recovery and Reinvestment Act of 2009

The Federal Stimulus Bill

Overview of Federal and State Requirements

Bud Fitch, Director, Office of Economic Stimulus

New Hampshire School Administrators Association

New Hampshire Association of School Business Officials

Thursday, September 24, 2009

New Hampshire is committed to putting people to work with stimulus

funds in a manner that is:

Accountable

Transparent

Prudent

State Fiscal Stabilization Fund – Education Formula Funds

Adequacy Payments

• Required by federal law

• LEAs may use the funds for any federally permitted expense• State recommends use for payroll

Cash Management Improvement Act Applies to:• State receipt – disbursement to LEAs• LEA’s receipt – expenditure

Solution that keeps us all in compliance:Reimbursement basis for disbursement

ARRA Education Funds Reporting - Section 14008

SEC. 14008. STATE REPORTS.

For each year of the program under this title, a State receiving funds under this title shall submit a report to the Secretary, at such time and in such manner as the Secretary may require, that describes—

ARRA Education Funds Reporting - Section 14008

(1) the uses of funds provided under this title within the State;

(2) how the State distributed the funds it received underthis title;

(3) the number of jobs that the Governor estimates weresaved or created with funds the State received under thistitle;

ARRA Education Funds Reporting - Section 14008

4) tax increases that the Governor estimates were averted because of the availability of funds from this title;

(5) the State’s progress in reducing inequities in the distribution of highly qualified teachers, in implementing a State longitudinal data system, and in developing and implementing valid and reliable assessments for limited English proficient students and children with disabilities;

ARRA Education Funds Reporting - Section 14008

(6) And (7) related to higher education

(8) a description of each modernization, renovation and repair project funded, which shall include the amounts awarded and project costs.

The State will be contacting you soon to request copies of appropriate payroll records/system reports to document expenditure of funds on payroll for teachers/staff who are not funded in any part with federal funds.

The Office of Economic Stimulus,

The State Department of Education, and

New Hampshire’s Schools

must work together to get ARRA right.

The taxpayers have entrusted us with hundreds of millions of tax dollars for education.

The taxpayers deserve that we spend those dollars in an accountable, transparent, and prudent manner

How well we do will affect future funding:

• Immediate – Race to the Top Funds• Future – New appropriations by Congress

Race to the Top Fund (Appropriation: $4,350,000,000) :

Competitive grants to encourage and reward States that are creating the conditions for education innovation and reform;

• Implementing ambitious plans in the four education reform areas

• Achieving significant improvement in student outcomes

• Making substantial gains in student achievement

• Closing achievement gaps

• Improving high school graduation rates

• Ensuring that students are prepared for success in college and

careers.

ARRA AssurancesNew Hampshire has committed to advancing

education reform in four specific areas:

1. Achieving equity in teacher distribution;

2. Improving collection and use of data;

3. Enhancing the quality of standards and

assessments; and

4. Supporting struggling schools.

Errors found during audits can lead to federal authorities demanding repayment of funds!

Top Ten Reasons your ARRA funded Program would be

Audited

10. Significant changes in federal programs, laws or regulations (changes in the compliance supplement for a particular program)

9. Complex and/or new

compliance requirements 

8. Lack of accounting controls for expenditures of federal funds.

7. Programs administered under multiple internal control structures (Lots of folks involved in spending the $)

6. Stand-alone computer systems versus centralized accounting. 

Also a newly installed system or recent modifications to a system may indicate high risk.

5. Turnover in key personnel who administer the grants

4. Competence and experience of personnel who administer the grants is weak

3. Overall control environment at management level is found to be weak

2. Prior audit experience – prior findings of internal control weaknesses or compliance issues were identified

1. Federal audit reports issued with findings

Accounting Standards

•Greater Cost Accounting Detail

•More Reporting

•Detailed Labor Tracking

•Increased Oversight

Accounting Standards

CFR § 76.730 Records related to grant funds.A State and a subgrantee shall keep records that fully show:(a) The amount of funds under the grant or subgrant;(b) How the State or subgrantee uses the funds;(c) The total cost of the project;(d) The share of that cost provided from other sources; and(e) Other records to facilitate an effective audit.

Accounting Standards

CFR § 76.731 Records related to compliance.

A State and a subgrantee shall keep records to show its compliance with program requirements.

Special Compliance Issues

• Davis-Bacon Prevailing Wage•Must pay DOL wage rates

•Buy-American Act• Must use iron, steel & manufactured

goods of US origin

Accountable• Municipal/School Level:

– Grant and allocation agreements will require

separate tracking and

reporting of ARRA funds

Accountable

•Quarterly reports to federal authorities – Section 1512

Accountable There will be enhanced oversight:

• 184 Million to federal Inspector General’s Offices for programs funded in N.H. • Office of Economic Stimulus will utilize compliance personnel to assist State

agencies, Municipalities, Schools,

and Non-Profits

AccountableDavis-Bacon Prevailing Wage documentation will be required where applicable

Accountable

Buy America compliance documentation will be required where applicable

Prudent

Avoid a Funding Cliff when ARRA appropriations are depleted

Prudent

Use ARRA funds for infrastructure, goods, or services that bring lasting value to New Hampshire

PrudentUse ARRA funds for new personnel or new programs only if they can be:

• Discontinued when the ARRA funds are depleted; or

• Funded from a non-tax source after ARRA funds are exhausted

Office of Economic StimulusState House Annex, Room 208

25 Capitol Street

Concord, New Hampshire 03301

US Mail:

107 North Main Street, State House – Rm 208

Concord, New Hampshrie 03301

nhoes@nh.gov http://www.nh.gov/recovery/ (603) 271-2121

Director: Bud Fitch

(603) 271-8785

Bud.fitch@nh.gov