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TEA Correspondence

A Microsoft Word version of this letter is available for download and PRINTING.

January 7, 2011

 

 

TO THE ADMINISTRATOR ADRESSED:

 

SUBJECT:      Updates to the 2009–2010 and 2010–2011 ARRA Title XIV State Fiscal Stabilization Fund (SFSF) Grants

 

The purpose of this letter is to provide local educational agencies (LEAs) additional information related to recent changes to the 2009–2010 SFSF grant, which took effect on December 14, 2010. These changes provide LEAs additional time to review their 2009–2010 SFSF grant expenditures and allow LEAs the flexibility to make necessary amendments to help prevent possible lapsing of federal funds and assure compliance with federal law. This letter also provides additional information pertaining to the 2010–2011 SFSF grant. Please note all SFSF grant awards must be fully expended no later than September 30, 2011. The Texas Education Agency (TEA) is strongly encouraging LEAs to expend these funds appropriately and in a timely manner.

The recent changes and updates are in response to observations identified by TEA auditors during their onsite and desk compliance audits and reviews of American Recovery and Reinvestment Act (ARRA) grant funds awarded to LEAs during the 2009–2010 school year. TEA auditors identified a number of prevailing issues, including a number of instances in which LEAs did not maintain adequate documentation to demonstrate compliance with the requirements applicable to infrastructure investments (e.g., Davis–Bacon Act, Buy American Act, 1511 infrastructure certification). TEA strongly recommends that LEAs review their infrastructure investment expenditures to ensure compliance with applicable laws, rules, and regulations and make necessary changes to avoid any questioned costs.

These issues are described in the “To the Administrator Addressed” TEA Correspondence dated November 8, 2010, Findings Related to American Recovery and Reinvestment Act of 2009 (ARRA).

Summary of Changes to 2009–2010 SFSF Grant

·         The project ending date of the 2009–2010 SFSF grant has been extended to September 30, 2011.

·         Final expenditure reports for the 2009–2010 SFSF grant are now due October 31, 2011.

·         Grantees may amend their 2009–2010 SFSF grant application through July 1, 2011. Amendments will be effective retroactively to the project begin date specified on the LEA’s original 2009–2010 SFSF Notice of Grant Award (NOGA).

·         ARRA Section 1512 Quarterly Reports will continue to be required for the 2009–2010 SFSF grant through January 5, 2012, regardless of whether all funds are expended before then.

·         All future 2009–2010 SFSF grant expenditure reports in the expenditure reporting system (ER) will be considered a revised final expenditure report if a final expenditure report has already been submitted for the 2009–2010 SFSF grant. LEAs may submit as many revised final expenditure reports as necessary through October 31, 2011.

Extension of 2009–2010 SFSF Grant

The project ending date of the 2009–2010 SFSF grant has been extended to September 30, 2011. This change applies to all grantees even if the grantee has drawn down 100% of grant funds.

Rationale for Extension of Project Ending Date

TEA has extended the 2009–2010 SFSF grant period to provide LEAs additional time to review ARRA grant expenditures. With this additional time, grantees will have the flexibility to make any necessary amendments to help prevent lapsing of federal funds and assure compliance with federal law.

TEA strongly encourages LEAs to review the expenditures of 2009–2010 SFSF federal grant funds to ensure that expenditures are in accordance with grant guidelines. In particular, LEAs that expended grant funds on infrastructure investments should ensure they have complied with all of the provisions and assurances required for infrastructure investments to avoid potential audit exceptions and the repayment of grant funds.

In addition, TEA is extending the project ending date in response to requests from LEAs for time to amend their 2009–2010 SFSF grant applications and correct other issues, such as expenditures that had been budgeted in an incorrect class/object code or position(s) that were budgeted as the wrong type of position(s).

To assist LEAs in amending their 2009–2010 SFSF grant applications, specific guidance has been appended to the end of this letter. The guidance lists actions to be taken to complete certain amendments and the consequences of those amendments to the ARRA 1511 Certification and the ARRA Section 1512 Quarterly Report. The guidance also describes what documentation the LEA should prepare in case of audit.

No Deobligation of 2009–2010 SFSF Grant Funds

Unexpended 2009–2010 SFSF grant funds were scheduled to be deobligated on December 14, 2010. This deobligation did not occur. Grantees will continue to have access to their unexpended 2009–2010 SFSF funds until the extended grant period ends on September 30, 2011. TEA strongly encourages all LEAs to expend the remainder of their 2009–2010 SFSF grant funds before any further expenditure of 2010–2011 SFSF grant funds. Expending the remainder of the 2009–2010 SFSF grant funds before continued expenditures from the 2010–2011 SFSF grant will help prevent errors when submitting reports through ER.

Expenditure Reporting for the 2009–2010 and 2010–2011 SFSF Grants

LEAs must use the correct NOGA when submitting expenditure reports for funds to be properly drawn down from either the 2009–2010 or the 2010–2011 SFSF grant. Each year’s grant has its own budgeted purposes, and the expenditures submitted must correspond to the budget and approved activities for the grant from which the funds are drawn down.

The SFSF grants will function as two separate grants throughout the remaining grant period.  In local accounting records, LEAs must record expenditures as follows:

·       Expenditures charged to the 2009–2010 SFSF grant must be recorded to Fund 266 using the fiscal year code “0.”

·       Expenditures charged to the 2010–2011 SFSF grant must be recorded to Fund 266 using fiscal year code “1.”

Refer to Section 1.4.14 in Module 1 of the Financial Accountability System Resource Guide for additional guidance.

Amendments to the 2009–2010 SFSF and 2010–2011 SFSF Grants

TEA’s approval of amendments and any corresponding adjustments to expenditures may result in a prior-year adjustment to an LEA’s annual financial and compliance audit report. LEAs are responsible for making any required adjustments. LEA officials should carefully consider the accounting and financial reporting impact of amendments and consult with their independent auditor accordingly.

2009–2010 SFSF grantees may amend their grant applications through July 1, 2011. Amendments will be effective retroactively to the project begin date specified on the original 2009–2010 SFSF NOGA. Any expenditures incurred between February 17, 2009, and the begin date specified on the original 2009–2010 SFSF NOGA will be considered pre-award costs. Those expenditures must be specifically identified as such on the amendment, and the Pre-Award Cost Schedule must be completed and attached to the amended application. Please refer to the Standard Application System (SAS) Schedule Instructions for additional information.

After reviewing budgeted projects and expenditures, LEAs may also want to consider amending their 2010–2011 SFSF grant applications.  Amendments to the 2010–2011 SFSF grant applications will be accepted through July 1, 2011.

Grant

Effective Amendment Date (No Pre-Award Costs)

Effective Amendment Date (Pre-Award Costs Included)

2009–2010 SFSF

Retroactive to begin date stated on original NOGA

Retroactive to begin date as stated on original NOGA with pre-award costs approved back to February 17, 2009

2010–2011 SFSF

Retroactive to begin date stated on original NOGA

Retroactive to begin date as stated on original NOGA with pre-award costs approved back to September 1, 2009

ARRA Section 1511 Infrastructure Investment Reporting

Reporting requirements and definitions for infrastructure investments can be found in TEA’s Updated ARRA Section 1511 Infrastructure Investment Certification Guidance. Please be reminded that if the LEA uses funds for contracted construction, modernization, renovation, or repair, LEA must comply with the:

·       Davis–Bacon Act

·       Buy American Act

·       All other federal and state requirements pertaining to construction, modernization, renovation, and repair

In addition, LEAs must also comply with ARRA Section 1511 infrastructure investment certification requirements. ARRA Section 1511 requires recipients of ARRA infrastructure investment funds to certify that the infrastructure investment has received the full review and vetting required by law.

Please refer to the eGrants application guidelines, instructions, and provision and assurances and TEA’s ARRA – Section 1511 Infrastructure Investment website for additional resource information.

Changes to Infrastructure Investments

If an infrastructure investment changes after an LEA has completed, posted, and reported its ARRA Section 1511 certification to TEA in ER, the certification must be revised as follows:

·       Changes to the infrastructure investment must be recertified by the LEA’s superintendent (or chief operating officer for an open-enrollment charter school).

·       The revised certification must be posted to the LEA’s website. If the LEA does not have a website, the LEA must arrange to post the certification on its regional education service center’s (ESC’s) website.

·       The LEA must revise the certification information reported to TEA in ER.

·       In the case of shared service arrangements (SSAs), both the fiscal agent and the member LEA must complete the recertification and post it to their (or their ESC’s) website and include a link to www.recovery.gov. The fiscal agent (and not the member LEA) must report the recertification to TEA in ER on behalf of itself and the member LEA.

·       The LEA must adjust the infrastructure investment expenditure amount in the ARRA Section 1512 Quarterly Report during the next reporting cycle or during the current quarter’s continuous corrections period, if available.

Removing Infrastructure Investments

If an LEA chooses to amend its grant application to remove infrastructure investments, the LEA must do the following:

·         Remove the Section 1511 certification form from the LEA’s or ESC’s website.

·         Delete the ARRA 1511 Report for the infrastructure investment in ER. Though the LEA will no longer have an infrastructure investment, the LEA must still certify an ARRA 1511 Report in ER. To do this, the LEA must select the “Not Applicable–No infrastructure projects for this NOGA” checkbox and then certify and submit the report.

·         Delete the infrastructure investment expenditure amount in the ARRA Section 1512 Quarterly Report during the next reporting cycle or during the current quarter’s continuous corrections period, if available.

ARRA Section 1512 Quarterly Reporting

Because the 2009–2010 SFSF grant has been extended to September 30, 2011, grantees will be required to continue submitting ARRA Section 1512 Quarterly Reports through the reporting quarter ending December 31, 2011. This requirement applies even if 100% of grant funds have already been drawn down. Each quarter will require two separate ARRA Section 1512 Quarterly Reports: one for the 2009–2010 SFSF grant, and one for the 2010–2011 SFSF grant. The LEA is responsible for making any required corrections to prior ARRA Section 1512 reports. Refer to TEA’s ARRA – Section 1512 Reporting website for additional resource information.

Critical 2009–2010 SFSF and 2010–2011 SFSF Dates

The following table lists critical dates for the 2009–2010 SFSF and 2010–2011 SFSF grants. LEAs that are awarded grants are responsible for meeting all required reporting deadlines. Failure to meet reporting deadlines may result in a loss of funds and could cause the LEA to be identified as “high risk.”

Date

2009–2010 SFSF Event

2010–2011 SFSF Event

January 5, 2011

ARRA Section 1512 Quarterly Report due for quarter ended December 31, 2010

ARRA Section 1512 Quarterly Report due for quarter ended December 31, 2010

April 5, 2011

ARRA Section 1512 Quarterly Report due for quarter ended March 31, 2011

ARRA Section 1512 Quarterly Report due for quarter ended March 31, 2011

July 1, 2011

Amendment deadline

Amendment deadline

July 5, 2011

ARRA Section 1512 Quarterly Report due for quarter ended June 30, 2011

ARRA Section 1512 Quarterly Report due for quarter ended June 30, 2011

September 30, 2011

Project end date

Project end date

October 5, 2011

ARRA Section 1512 Quarterly Report due for quarter ended September 30, 2011

ARRA Section 1512 Quarterly Report due for quarter ended September 30, 2011

October 31, 2011

Final expenditure report deadline

Final expenditure report deadline

October 31, 2011

Revised final expenditure report deadline

Revised final expenditure report deadline

November 30, 2011

Additional final evaluation report deadline due to extension of grant period

Final evaluation report deadline

January 5, 2012

ARRA Section 1512 Quarterly Report due for quarter ended December 31, 2011 (final expenditure report information submitted through final expenditure reporting deadline of October 31, 2011)

ARRA Section 1512 Quarterly Report due for quarter ended December 31, 2011 (final expenditure report information submitted through final expenditure reporting deadline of October 31, 2011)

Information and Assistance

For program information, please call the Division of NCLB Program Coordination at (512) 463-9374 or email NCLB@tea.state.tx.us.

For funding information, please call the Division of Formula Funding at (512) 463-8525 or email FormulaFunds@tea.state.tx.us.

For questions regarding ARRA Section 1512 quarterly reporting and ARRA Section 1511 infrastructure certification, please call (512) 936-3647 or email arrastimulus@tea.state.tx.us.

Sincerely,

 

 

 

Yolanda Cantu

Senior Director, Division of Formula Funding


09-10 SFSF Grant Activity LEA Wants to Remove

Have Funds Been Drawn Down for Activity to Remove?

New Activity LEA Wants to Add to Replace Removed Activity

Amendment to 09-10 SFSF Application?

Change to 1512 Reporting?

Update to 1511 Certification?

Documentation to Be Prepared in Case of Audit

Infrastructure (6629)–Such as construction or renovation of a school building

Yes

Contracted Services (6200)–Allowable utility costs as described in TEA SFSF FAQ

If new activity is not already budgeted in 09–10 SFSF grant application and specified in the program description pages, or if amount for already-budgeted item is > 25% of total budgeted, then amend.

Report the adjusted cumulative infrastructure investment expenditure amount during the current reporting period or during the continuous corrections period. If all infrastructure investment information is deleted, the expenditure amount must be changed to $0.00.

Update infrastructure investment information to accurately reflect the project(s) funded with ARRA funds. Remove all information if $0.00 funds are now expended for infrastructure investments. Remove certification from website. Enter new certification in ER indicating “Not Applicable–No infrastructure projects for this NOGA”; certify and submit.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

Infrastructure (6629)–Such as construction or renovation of a school building

No

Contracted Services (6200)–Allowable utility costs as described in TEA SFSF FAQ

If new activity is not already budgeted in 09–10 SFSF grant application and specified in the program description pages, or if amount for already-budgeted item is > 25% of total budgeted, then amend.

No impact to Section 1512 report.

If the LEA has already reported an infrastructure investment, it may be necessary to update infrastructure investment information to accurately reflect the project(s) funded with ARRA funds. Remove all information if $0.00 funds are now expended for infrastructure investments. Remove certification from website. Enter new certification in ER indicating “Not Applicable–No infrastructure projects for this NOGA”; certify and submit.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

Infrastructure (6629)–Such as construction or renovation of a school building

Yes

Payroll (6100)–Administrator, teacher and support staff costs

Amend to include new payroll positions and costs and to remove infrastructure costs.

Report the adjusted cumulative infrastructure investment expenditure amount during the current reporting period or during the continuous corrections period. If all infrastructure investment information is deleted, the expenditure amount must be changed to $0.00. Report current quarterly FTE created/retained in the current reporting quarter. Ensure that documentation is maintained at the local level for any FTE adjustments that impact previous quarter reports as you will not be permitted to change FTE information reported for prior quarters.

Update infrastructure investment information to accurately reflect the project(s) funded with ARRA funds. Remove all information if $0.00 funds are now expended for infrastructure investments. Remove certification from website. Enter new certification in ER indicating “Not Applicable–No infrastructure projects for this NOGA”; certify and submit.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

Infrastructure (6629)–Such as construction or renovation of a school building

No

Payroll (6100)–Administrator, teacher and support staff costs

Amend to include new payroll positions and costs and to remove infrastructure costs.

Report current quarterly FTE created/retained adjustment in the current reporting quarter. Ensure that documentation is maintained at the local level for any FTE adjustments that impact previous quarter reports as you will not be permitted to change FTE information reported for prior quarters.

If the LEA has already reported an infrastructure investment, it may be necessary to update infrastructure investment information to accurately reflect the project(s) funded with ARRA funds.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

Payroll (6100)–Such as administrator, teacher and support staff costs

Yes                                        or                                        No

Capital Outlay (6600)–Computers on Wheels (COWs)

If new activity is not already budgeted in 09-10 SFSF grant application and specified in the program description pages, or if amount for already-budgeted item is > 25% of total budgeted, then amend.

Report current quarterly FTE created/retained adjustment in the current reporting quarter.  Ensure that documentation is maintained at the local level for any FTE adjustments that impact previous quarter reports as you will not be permitted to change FTE information reported for prior quarters.

No impact to Section 1511 report.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

Payroll (6100)–Administrator salaries

Yes                    or                    No

Payroll (6100)–Teacher salaries

Amend to update cost amounts and correct types of positions.

Report the adjustment in "Job Categories" under the FTE created/retained section for the current reporting quarter. Ensure that documentation is maintained at the local level for any "Job Categories" adjustments that impact previous quarter reports as you will not be permitted to change FTE information reported for prior quarters.

No impact to Section 1511 report.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

Supplies and Materials (6300)–Computers and associated equipment

Yes                    or                    No

Capital Outlay (6600)–Computers on Wheels (COWs)

If physical equipment is the same, amend to move costs from 6300 to 6600.

No impact to Section 1512 report.

No impact to Section 1511 report.

The general ledger must be adjusted.  The LEA should contact its independent auditor for guidance on impact this adjustment will have to the audited financial statements, the auditor's opinion, and the information reported in PEIMS.

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