Oregon K-12 ARRA Implementation

 

The United States Department of Education (USED ) hosted a webinar on April 21, 2009 to discuss fiscal considerations for IDEA Stimulus Funds. Oregon was active in this event, posing several questions for clarification. From this we received some valuable responses from USED that represent greater flexibility for districts with the IDEA Stimulus Funds. Please look carefully at items #2 and #4 for some very new information. 

 

1) Spending Timelines for Stimulus Funds:

 

The original guidance was that 85% of Stimulus Funds should be obligated by September 30, 2010, with the remaining 15% obligated by September 30, 2011. This will remain true for Title 1 Funds, but the updated guidance for IDEA Stimulus Funds is more flexible for districts: "An LEA should use the IDEA recovery funds expeditiously. An LEA should obligate the majority of these funds during school years 2008–09 and 2009–10 and the remainder during school year 2010–11". (Guidance Document on IDEA Part B Stimulus Funds http://stimulus.k12partners.org/content/updated-usdoe-idea-part-b-guidance-april-17th).

 

EDGAR 75.707 defines "obligate" differently for various kinds of property and services:

 

Sec. 75.707 When obligations are made. The following shows when a grantee makes obligations for various kinds of property and services.

 

If the obligation is for:

(a) Acquisition of real or personal property. On the date the grantee makes a binding written commitment to acquire the property.

(b) Personal services by an employee of the grantee. When the services are performed.

(c) Personal services by a contractor who is not an employee of the grantee. On the date on which the grantee makes a binding written commitment to obtain the services.

(d) Performance of work other than the personal services. On the date on which grantee makes a binding written commitment to obtain the work.

(e) Public utility services. When the grantee receives the services.

(f) Travel. When the travel is taken.

(g) Rental of real or personal property. When the grantee uses the property.

(h) A preagreement. Cost that was properly approved by the Secretary under the cost principles identified in 34 CFR 74.171 or 80.22.

 

ODE asked USED if we should interpret that to mean 51% or more by June 30, 2010. They indicated that they would not give a specific percentage, but we would counsel you to use this approach at a minimum. The implications of this update are very important to you, as it could leave a district with up to 49% of its stimulus funds for use between 7/1/10 and 9/30/11.

 

 

A footnote in the most current USED Guidance Document of IDEA Part B states this clearly:"No requirement currently exists related to supplanting “particular costs” and if an LEA maintains local, or state and local, effort it will not violate the supplement/not supplant requirements of the IDEA. "

 

 

When you close your books for 2008-2009 you will have an estimate of your Fund 100: Area of Responsibility 320 expenditures for that year, which need to be added to your ESD 320 expenditures on behalf of kids on IEPs from your district. You then need to compare that against the same audited figures for 2007-2008 to determine with confidence whether or not you spent as much in 2008-2009 as you did in 2007-2008. If you feel certain that you will maintain effort in 2008-2009, then you would satisfy the non-supplanting standard. Then, and only then, you could do something like the following scenario:

 

Because of general fund reduction in 2008-09 you are planning on laying off a certified special education teacher who has traditionally been funded out of general fund. If you are certain you will maintain effort in 2008-2009, you could save this position by paying for it out of stimulus funds. If later it is found that you did not maintain effort, you will have violated non-supplanting requirements and will incur the enforcement consequences.

 

 

District grantees should use the information we provided under question 1 above, found in Part 75 Section 707 (Sec. 75.707) of EDGAR to find this definition.

 

Most of the questions we have received about "obligation" involve employee salaries in a district. Under 75.707 (b) personal services by an employee of a grantee the standard is clearly "when the services are performed". In other words, no salaries and or benefits could be obligated for employee services performed after the grant period of September 30, 2011.

 

Clarification was request because OSEP consistently stated that the ARRA funds are a 2009-2010 allocation and should be accounted for as such. Yet districts were told they could go back as far as February 17, 2009 to use these funds, so coding to 2009-2010 was very puzzling. Nancy Latini and Sue MacGlashan spoke with the OSEP staff this week and finally were able to clarify what OSEP means by coding all ARRA funds to 2009-10. In a nutshell, OSEP does not care if the districts recognize some of these funds as revenues in 2008-09. OSEP simply wants the money kept separate from regular flow through IDEA federal funding. Please review and follow any directions on this matter that come from the Deparment's School Finance Office.

 

These updates have significance for districts, mostly in a very positive manner. The guidance documents will be updated for each of these areas, and will be reposted as revised on the ODE K-12 stimulus site at the bottom of the ODE home page.

 

Any questions regarding maintenance of effort, non-supplanting, expenditure timelines, or EDGAR should be directed to Eric Richards at eric.richards@state.or.us or 503-947-5786.