1PRESENTED BY M ICHAEL BRUSTE IN ,

ESQ.

WWW.BRUMAN.COMMBRUSTE IN@BRUMAN.COM

NEVADA AEFLA DIRECTORS

A DISCUSSION OF FEDERAL ISSUES

NOVEMBER 28, 2012HYATT PLACE

LAS VEGAS, NV

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AGENDA

1. Funding2. Sequestration3. Ryan Budget4. Cash Management Issues5. OMB Super Circular6. Time and Effort7. Reauthorization8. Questions

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FUNDING - AEFLA

FY 11 FY 12

National $521,270,370

$520,284,799

Nevada $4,829,004 $4,943,602

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EL CIVICS

FY 11 FY 12

National $74,850,000 $74,708,534

Nevada $776,346 $768,631

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FY 13 – 7/1/13 6/30/14

• Continuing Resolution (CR) but only through March 2013 increase of .612 of 1%

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SEQUESTRATION

• Budget Control Act, August 2011

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SEQUESTRATION

• Supercommittee tasked with cutting $1.5 trillion in spending over next decade by Thanksgiving 2011• Total failure to come to an agreement means

automatic cuts triggered• Only intended as a threat – never meant to

happen• Cuts take effect January 2, 2013• Automatic, across-the-board cuts• Little discretion for appropriators, agencies

• Apply to FY 2013 federal spending numbers• Could exacerbate effect of any cuts made in FY 2013

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WHEN WILL SEQUESTRATION HAPPEN?

• President Obama must issue a sequestration order no later than January 2, 2012

• Funds received by States July 2012 and earlier are NOT subject to sequestration

• Advance funding received in October of 2012 will not be subject to sequestration when allocated• BUT cuts will be calculated and applied to July 2013 funds

• Funding received in July of 2013 will be subject to cuts

• After July 2013, cuts will be incorporated into annual appropriations

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RYAN BUDGET

• Passed House• 5% cut on 7/1/13• 15% cut on 7/1/14

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CASH MANAGEMENT ISSUES

•Minimize time elapsing between transfer from ED to SEA, and from SEA to AEFLA provider for actual expenditure

– 72 hours – 34 CFR 80.20(b)(7)

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• Interest accrued over $100 must be remitted 34 CFR 80.21(i)

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PERIOD OF AVAILABILITY

•AEFLA requires multiyear funding •Each AEFLA $ subject to •27 month availability•90 day liquidation•34 CFR 80.23

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•AEFLA Providers Cannot Obligate Funds until Local Plan Approved

34 CFR 76.708(c)

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•Obligations in carryover period subject to current statute and applications

34 CFR 76.710

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•Administrative Costs = Indirect Costs

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OMB SUPER CIRCULARADVANCE NOTICE

NPRMFINAL RULE

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EXPECT REVISIONS TO:

1) Cost Principles• A-21• A-87• A-122

2) Administrative Principles• A-110• A-102

3) Federal Agency Audit Resolution• A-50

4) Single Audit• A-133

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SUPER CIRCULAR

• Increase consistency•Decrease complexity

But allows for disparate treatment depending on type of entity

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•Will the shifting of Audit Thresholds reduce burden on SEAs?

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SINGLE AUDIT THRESHOLD

a) Under $1 million in total federal expenditures:• No single audit• Augmented pass-through role

b) Between $1 million and $3 million• More “focused” single audit

c) Over $3 million• Full single audit

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“FOCUSED SINGLE AUDIT” ($1 TO $3 MILLION)

• Single auditors to review• 2 Compliance Requirements

1) Allowable/Unallowable2) Federal agency determines –

but priority on risk of improper payments, or fraud, waste, abuse

(look to Compliance Supplement)

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• Can SEA impose additional compliance requirements??

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“FULL SINGLE AUDIT” OVER $3 MILLION

“UNIVERSAL COMPLIANCE REQUIREMENTS”

1. Allowable Costs2. Eligibility3. Reporting4. Subrecipient Monitoring5. Period of Availability of Federal Funds6. Procurement Practices Comply with

Suspension/Debarment

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TIME AND EFFORT

•A-87 Requirements•New Flexibility on Cost Objectives

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REAUTHORIZATION

1. Current law authorized through 2003

2. Congress may consider WIA Reauthorization next year

3. AEFLA is relatively non controversial4. EL Civics likely to be folded into

Basic Grant5. DOL Administration?

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QUESTIONS

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