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Announcer: OTAN, Outreach and Technical Assistance Network.

Arturo Ambriz: Hello. Good morning, everyone. Welcome back from break. My name is Arturo Ambriz. I'm an education program consultant here at the CDE Adult Education Office.

I'll be covering today the WIOA title II, Fiscal Compliance Overview. And I'll be referring to it on our presentation as AEFLA, which stands for Adult Education and Family Literacy Act, and sometimes, I'll referred to it as WIOA title II.

I'd like to mention one more thing before I start is that this presentation will end around noon. And then we have an hour lunch. And we'll come back at 1:00 for the data and accountability requirements, which will be presented by Dr. Michaela Webb. So you definitely want to be back on time.

I also want to mention that I hope everyone is at that speed after going through Jay presentation. But again, it's hard to compete with that. So just hang in there. Thank you.

OK. The overview topics that we'll be covering today. We will go over the statute and regulations that apply to this AEFLA grant. We cover timely spend funds and carryover, which is basically the parameters of this grant that the agency has to spend the funds.

We'll go over the supplement, not supplant provisions, which is the provisions that AEFLA funds are supplemental to your state and local funds, for adult education, mainly for UK funding. Cost allowability and allocation requirements, that's the rules and regulations for allowable cost, and how much can you charge to the program in proportion to the benefit received.

We also the standards for documentation of personal expenses, which is also referred as time and effort record-- reporting requirements. These are your semi-annual certifications personal activity reports or PARs, timesheets, the documentation the agency uses to document salaries and wages, the time that employees spend working on those federal programs.

We also covered matching requirements really quick at the end. That is the 25% requirement match that the agencies have report-- the agency reported in the year on the expenditure claim reports.

So with that, we know and understand that payroll compliance can be complex. But as administrators, you will need to be familiar with these requirements. And sometimes, you might not be involved on all the functions of these areas. But it's very important that you know who is doing that work.

And that being said, in spite of your level of experience on fiscal, whether you have a lot or not so much, if anything please keep a copy of this presentation handy, perhaps, on your desktop, and share with other programs and fiscal staff who is involved in the process.

Finally, for questions, if you have any questions as we go through each of these areas, please write those on the chat as the presentation go on. And my colleague Jim will read those at the end of each this area. And I'll respond to those. If for some reason, I don't know the answer or it requires follow up, we'll keep in the Q&A, and I'll be sure to respond. Excuse me.

OK. Let's start with statue and regulation. This is for reference. The statue is mainly the law that applies to these ground, and includes such things such as the provisions for section 231 that Dr. Zachary mentioned yesterday, the provisions for supplement, not supplant. The regulations is mainly EDGAR, which stands for Education Department and General Administration Regulations. These are the rules that apply to all federal grants issued by the US Department of Education.

Then back in 2015, '16, the Uniform Grant Guidance, they combine all the circulars and became one requirements for all federal awards issued by the federal government. So EDGAR incorporated the Uniform Grant Guidance, which is going to be referred as Part 200 or 2 CFR 200.

So again, recipients of AEFLA funds must comply with the requirements. So again, as administrators, you will need to be familiar with this and refer to this when you are planning to spend funds when you are developing your budgets.

And this is definitely one of those areas that is a collaboration between fiscal and program, because program knows the needs of these-- the program are part, and fiscal knows the internal controls and these requirements.

Some of the slides, they have underlying references. So what that is basically a direct link to the-- to that reference.

And lastly, I'd like to mention that there are also other regulations such as Title 24 that might apply to AEFLA, but these two are the main ones that directly applies to the fiscal compliance.

This is just a summary for references. This is what you have been learning throughout this new administrative orientation. And this is just basically a summary of how AEFLA funds are awarded by section, resource code, and the fiscal area of-- the fiscal area we are reviewing.

So for instance, section 231 has two resource code, resource code 3905, which the program areas that can use those funds are ABE, Adult Basic Education, ELA, English Language Acquisition, and EL civics.

And we also have resource code 39113 under Section 231, and those funds are intended for adult secondary education with-- in California is high school equivalency, GED or HiSET, and high school diploma.

We also have section 225 and 243. And so the 243 agencies is-- those funds are intended to support English language learners, co-enrolled on a compliance ILC with or without IET.

Literacy and workforce preparation activities. My colleague, Corey, will-- he's the subject expert for this program. So he'll be going over it today on everything you need to know about section 243 for those agencies that receive this funding.

This is the first actual area that we're covering today. And it is timely spending funds and carryover.

So outflow of funds cannot be carried over from one fiscal year to the next. They must be expended or financially obligated by June 30. Funds are considered expended as of the day of the obligation, consisting with title 34 76-- section 76.707.

So these references will take you to a-- is a table that includes examples of services, materials, property. And it will tell you the date that they obligate. For instance, a couple of examples that will help us understand the-- this requirement, salaries and benefits they obligate when the services are performed, which means that you can only report those up to June 30. Comparing to, for example, computing devices, they obligate when the agency makes the written commitment.

So in many situations, you will, for example, want to order computers or laptops in May or April. But they will not be available until July or September. So the funds are considered obligated when you made that written commitment on May or April. And you can claim those as part of that fiscal year, even though the devices will be received after June 30.

So on the planning and collaboration, especially for new grantees that this is different from other federal funds, might be different from all other federal funds that allow carryover, planning and collaboration with both fiscal and program to spend obligate these funds is especially important. So the window is July 1 to June 30 of the fiscal year.

Financial obligation is basically the definition of the regulation is defined as orders placed for property, services, contracts, and similar transactions that require payment. The written commitment documentation that you will need if you have that situation that you will purchase something on May but-- or April or June, that will be received after June 30, the agency will need to maintain documentation such as a purchase order, signed contract, a specific description and cost of the item that you ordered.

And that's pretty much for a timely spending funds and carry over. Jim, do we have any questions so far?

Jim Shields: Not at this time, Arturo.

Arturo Ambriz: Good. So again, if you don't think of any question as we go through--

Jim Shields: Sorry, one just popped up here.

Arturo Ambriz: OK, no problem. Yeah, just-- you can put those on or you can send them to me later, or definitely reach out to your CDE consultant. So--

Jim Shields: So our first question, is it the same for contracts for services?

Arturo Ambriz: That would-- yeah, it's the same. But again, each situation is different. So if the contract, for example, services, depends on what it is. It really depends on what it is. So like for example, if the services is not-- you want to make a contract for a service, like for example, a professional development or presentation, if the person that's going to provide the presentation is not available before the June 30, but you want that presentation, you might be able to pay with that funding, with that fiscal year.

Contract. Contract, we covered the-- that would be dependent on the details of the contract. For example, if you contracted for something that is going to start July 1st and on, then that's the time period that the funds can be used. So it really isn't the timing. And again, there are examples on that table. And if anything, please reach out to your CDE consultant.

Jim Shields: And I think you may have just answered this, but the fault was by when contract is signed or by when service is provided.

Arturo Ambriz: It is-- again, it will depend. So if the contract-- for example, if you have a-- if you sign in a contract in July, but those services are going to start-- I mean, let me just step back. If that contract-- depend on the services, but if the contract is signed in May or June, but the services will start from July on, then the obligation, really, on this case, even though it happens on May, if the services belong to the fiscal year, then that's when you can, that's when they obligate-- that will be July.

Because like for example, a lot of the times, schools have subscriptions, right, to software programs. You can use AEFLA funds for whatever month those subscriptions pertain to. Like for example, if you pay for subscriptions on May 2023 or make a contract for those in May 2023, but those subscriptions are for-- are to begin July 1, then you should really be using funds from the new fiscal year, from the fiscal year, the year that will start July 1. I hope that answered that question.

Jim Shields: And it looks like we're all caught up now.

Arturo Ambriz: OK. Thank you. Thank you for the questions. Great.

OK. We move on to supplement, not supplant. And this is basically the provisions that federal funds must go-- are supplemental and must go on top or your state or local funds. And on this case again, it's mainly CAEP funding.

So what is required? The requirements say that funds for adult education and literacy activities under this title shall supplement or increase the level of services, and not supplant or replace the state or local funds expended for adult education and literacy activities. So in other words, AEFLA funds should now be used to pay for services, staff, programs, or materials that will otherwise be paid with state and local funds.

A leading question that is useful when you consider spending AEFLA funds is that to ask what will happen in the absence of AEFLA funds. If the answer is that you can still support of or pay for that service equipment-- or not equipment, service or position or materials, you should continue using those funds. If the answer is no, you might be able to use AEFLA funds, considering they comply with the rules and regulations of the grant.

For AEFLA, there are two presumptions of supplanting. And this is coming from the OMB compliance supplement, which is the federal compliance. So the first one is the agency-- the supplanting will be presumed if the agency use AEFLA funds to provide services that the agency provided with no federal funds in the prior year.

So again, in general, AEFLA funds are supplemental. And the test is current to prior year. So the first question when preparing your budget or planning any course with AEFLA is to ask, how would it pay for this service in the prior year?

Again, if you use the state of local funds, including CAEP, you should continue those using those resources. If this is a new cost or is a supplemental service-- a supplemental cost, you might use AEFLA funds.

So on this first test, the assumption from the feds is that if you use non-federal funds on the prior year, you should continue to use those funds. And throughout my presentation, I include notes, which are questioned, but not necessarily, we don't require an answer on this presentation. But it's help-- it's to help you understand the requirement.

The second test is that if the agency use AEFLA funds to provide services that were required by law or regulation. And so again, the assumption is that if something is required by law, it should be funding allocated for that purpose. And AEFLA funds should not be used for that.

That's it. I'd like to mention that presumption of supplanted-- supplanting are reviewable if the agency can demonstrate that it will not-- they will not be able to offer those services or for the cause with no federal funds have the federal funds not been available.

And these references here the information on the supplement, not supplant. On the CDE website, we have frequently asked questions. I highly encourage you to visit that. It's basically, we will have the information that-- you will need to comply with the supplement, not supplant requirements of this grant.

And I'll also like to say that the supplement, not supplant is a case by case basis. And definitely, the specific details should be analyzed on each-- on separate situation.

OK. We have a couple of questions to practice our understanding of this concept or this provision. And this is our first question. If you notice, I included the answers for reference, and for those who would like to go back later on and review those questions. But I feel that is also useful to understand the requirement and not be guessing which one do we say was the correct one or not.

So let's see the first one. So on this one, we have an agency that use state funds to pay for an adult basic education teaching position last year, but decided to use federal AEFLA funds on the current year for the same teaching position because they receive additional funding.

So the answer to this is that this will be a presumption of supplanting because the agency replacing state with AEFLA funds to pay for the same position. So in this case, it will be [ INAUDIBLE ] or supplanting will be difficult. The only way it will be made-- might be possible is if the position had extra responsibilities that are supplemental to the grant or it was something changed that we comply with the supplemental piece.

And we have one more. This one include percentages. I'd just like to mention that percentages are not coming from the rules and regulations or statute. I'm just putting those to help us understand the requirement. Most of the time, they're really basic percentages, 50, 25, 75. So just letting you know that these are not coming from any regulations.

So in this case, we have an agency that rents a copier to be used 50% on AEFLA programs and 50% on non-AEFLA programs. The agency paid 50% of the rent costs with AEFLA and 50%, we stay in local funds in the prior year.

But fully pay, 100% pay with funds in the current year because they stay in local funds, resources were needed for all their expenditures. And again on this situation, supplanting will be presumed that the agency redirects state and local funds while using AEFLA to fully pay for the cost.

So on this scenario, the agency can only pay up to 50% of the copier cost with AEFLA funds. And we'll-- this will relate to a local ability we will be covering in more detail in a minute.

And that's pretty much it for supplement, not supplant. Jim, do we have any questions for supplement, not supplant?

Jim Shields: Yes. So far, there is one. And what about budget adjustments? If there are still funds in one category and we have an expense in another, what is the threshold to be able to spend the funds within another category? Or do we need to process a budget adjustment request?

Arturo Ambriz: OK. Thank you. Great question. So for AEFLA, you can adjust your budget within a resource code. For example, resource code 39, if you budgeted for something on the 1,000 object code certificated personnel, and you have funds available, and there's a need to purchase devices or there is a need to pay someone classified, so you can shift your cost within a resource code. You cannot transfer funds between resource code. You can only you shift your budget inside or within the object codes in a resource code. I don't know if that makes sense. I hope that makes sense, actually.

Jim Shields: I believe it's so-- hold on here, just got--

Arturo Ambriz: Let's see if that-- is that responds--

Jim Shields: Yes. I believe, yes. Donna said thank you. Janice is asking, what if you discover a mistake?

Arturo Ambriz: Great question, Janice. Thank you, Janice. So basically, that will-- if there's a mistake, like for example-- and I'm not sure what's the context to the question. Like for example, we go on and do a federal compliance review. And we notice that they pay these funds-- they pay last year with CAEP funds. And this year, they're showing that they pay with AEFLA funds.

So the first question a CDE reviewer will ask, what was the reason for the budget shift? And so if it was an error, they say, well, we didn't notice that we paid with K, and so we use AEFLA. So if there's an error, then the agency will have to reimburse those funds to the CDE the year that they use AEFLA funds, if there's a supplanting violation. So I hope that answered the question.

Jim Shields: Yes, it did.

Arturo Ambriz: OK.

Jim Shields: And I think we're all caught up now, Arturo, for questions.

Arturo Ambriz: OK. Thank you. I think I went-- oh, OK, we're moving on to a different area, it's cost allowability and allocation.

This one has a lot of information. And I'm really sorry for having so much information on some of the slides. But on this specific one, I want to include all these factors because all these are to be considered when you're spending each cost.

So definitely, this one, you will need to refer when you planning to spend AEFLA funds because all needs to be considered. I'll tell you that if the answer to the necessary, reasonable, and allocable is that you can support those three, the rest are pretty standard.

So what is required to determine whether a cost is allowable or not is to be allowable on the federal awards, the cost must be necessary. What that means, can you demonstrate that there is a need? Can the agency demonstrate that there is a need? And again, program is the expert on this area. So that's why I mentioned collaboration between program and fiscal is crucial.

The cost must be reasonable. So reasonable is typically on the procurement department, which a lot of the times, is also fiscal. That's where the prudent person will pay based on the circumstances at the time the decision was made.

Allocable is basically the cost charged to the program in proportion to the benefit received. Authorized is the requirement that it's not prohibited under AEFLA, EDGAR, or the Uniform Guidance, or state and local funds. For example, sometimes, something might be allowable under the fed-- under the factors affecting allowability, but if it's authorized on this-- the law for certain areas, then that will automatically make it unallowable.

Adequately documented. So that basically it goes without saying. It's-- it's that documentation that includes the planning. It includes the purchase order, evidence of approval, and again, the collaboration between fiscal and program.

And last one, incurred during the approved budget period. Again, the window to spend or obligate the funds is-- for this grant is between July 1 and June 30.

So on the allocable, I'd like to mention one example that we'll be referring to it because it's a very important concept. So basically, allocable is the proportion-- the part that you pay in proportion of the benefit received. For instance, if you pay a teacher with 50% with AEFLA funds and 50% with CAEP funds or any other resources, the documentation, the time and effort documentation of that teacher must reflect that the program-- the AEFLA program received 50% of the benefits.

If you-- another example, if you purchase a laptop with 100% AEFLA funds, the expectation is that that computer or that laptop benefits 100% the AEFLA program. And again, we'll be seeing more of that, but I just want to mention, because these factors are again, to be considered every time that expenditure is made with federal funds, including AEFLA.

Under the reference here for 22, section 422, section 426, there are 56 general provisions and rules for selected items of cost, which include advertising alcoholic beverages, compensation of personal services, which is salaries and benefits.

So there-- most of the time, there-- you will see that the costs are allowable with restrictions. You'll find those that are completely unallowable, like for example, cost for alcoholic beverages.

The list is in alphabetical order and is not a complete list of allowable and unallowable costs as it relates to WIOA. I'd like to note here that even though a cause must be listed as allowable, you must also comply with the supplement, not supplant provisions we discussed earlier. And also meet those general cost principles noted on the prior slide.

Is it necessary and reasonable, allocable, authorized, and adequately documented, and incurred on the approved budget?

For instance, costs for travel and compensation for personal services are typically allowable with certain conditions and requirements. But if the agency paid for those costs in the prior year with CAEP funds, for example, then that makes this cost automatically unallowable for this agency.

So again, if you have questions of any of these general provisions, you can reach out to the CDE consultant or you can reach out to me.

OK. And we have two questions-- a couple of questions to understand the allowable cost and allocation. So in this case, we have-- the question is, may AEFLA funds be used to pay for the salary and related costs of an adult education teacher? And a lot of the times, without knowing details, the answer will be, it depends. Generally, salary and related costs are allowable, but the costs are subject to restrictions and reporting requirements.

So in this case, it will depend. AEFLA funds might be used if or considering the teacher provides services to students who are eligible under AEFLA. And the costs are necessary, reasonable in all the requirements, and comply with the supplement, not supplant provision. OK.

May AEFLA funds be used to purchase office furniture, such as desk, chairs, and cabinets? And on this case, the answer is no. AEFLA funds cannot be used for office furniture. And in general, AEFLA funds cannot be used for capital expenditures and equipment with a per unit acquisition cost equals or exceeding the agency's threshold-- capitalization threshold of $5,000. This is a state-imposed requirement.

And there is a few state imposed requirements such as no equipment over-- no expenditure-- capital expenditures over 5,000 per unit. The other one is knowing direct costs are allowable to claim under this grant. Those state-imposed requirements are communicated to agencies on the request for applications. The RFAs that were just recently submitted for the '23, '27 cycle.

And this question includes the-- I think will help us to understand the allocable proportion concept. So on this case, we have an agency. The rents are copied that is used 50% on AEFLA programs and 50% on non-AEFLA programs.

So the question is, can the agency charge 50% of the cost of AEFLA and 50% to non-AEFLA programs? And the answer is yes. They-- remember the agency can charge up to the benefit received, which is, in this case, is 50%. On b, can they charge 75% of the cost to AEFLA and 25% to non-AEFLA? And on this case, it will be no. 75% is more than the 50% benefit received. So again, the agency can only charge up to 50% to AEFLA.

On c, can the agency charge 0% to AEFLA and 100% to non-AEFLA? And the answer is yes, charging 0 to AEFLA and receiving 50% of the benefits is acceptable. The feds will love this scenario.

So again, in general, a lack of proportion concept is when two or more programs share costs, plan ahead of the time. The cost must be charged to each program and proportion of the benefit received or is solely pay, pay 100% with one funding source, the cost must benefit 100% such funding source.

And that is pretty much for our allowability and allocation. Jim, do we have any questions on the Q&A?

Jim Shields: Yes, we do have a couple. The first one, is it permissible to utilize the AEFLA fund to compensate instructors for additional responsibilities, such as composing the monthly department newsletters?

Arturo Ambriz: OK. I like the question until the part that it says composing the monthly department newsletter. And again, that is possible if the additional responsibilities, such as composing the monthly department newsletter, include AEFLA programs.

So you-- I can see that as advertising costs. And again, it has to be for advertising-- for advertising the AEFLA programs, not the school. So that seems like potential. And definitely, we will ask for more details.

If you reach out to CDE with that, then we'll need to know what kind of information is on the newsletter and what other programs. Because if you included AEFLA programs and other programs, then you can-- we can do a-- the school will do a cost allocation. And you can share that with CDE. And then we say, yeah, that looks adequate.

But definitely, what I like is the additional responsibilities. That's definitely the intention of this grant. This is supplemental grant to enhance your adult education programs. So that's-- I hope that answered that question, but it's-- if it is a cause for-- if it is for information that relates to the AEFLA program, in this case, advertising the program, not the school, that would be allowable.

And if there are other programs like CTE that might not be part of AEFLA, then it will be a cost allocation. And AEFLA can definitely pay for that proportion of the benefit received. OK. Thank you.

Jim Shields: All right. And our second question, would laptop carts be classified as furniture or equipment?

Arturo Ambriz: Great question. So laptop cards, we consider those as-- it's equipment, but it's under-- if it is under 5,000, it will be allowable if it was-- if it was a need for it because it's really part of your laptop's equipment or devices.

So if it's under $5,000 per unit, and it use-- it pass all those requirements, then that should be allowable, even though it's equipment. But again, remember, the equipment that is not allowable is with a per unit of $5,000 or more.

One thing to keep in mind on equipment, a lot of the times, the value is close to $5,000. Please keep in mind that equipment, the total of $5,000 on equipment includes taxes. And if that device requires installation, the library costs, so all that is included on the total cost. It's not just the net cost. It's the total cost of the device, taxes, a deliberate cost, and if it includes installation costs.

Jim Shields: Great. That's it for our current round of questions.

Arturo Ambriz: Thank you. Great questions. Thank you, Jim.

OK. Time and effort reporting. This is, by far, the biggest area that we'll be covering today. And you'll see a lot of information. But at the end of the day, it's-- I hope I provide the tools for you to comply with this requirement.

And time and effort reporting-- time and effort is only one of those items on the 56 selected items, of course. So it's basically directly related to compensation for personal services.

So there's a lot of requirements on this. And I suspect, because this is the biggest expense for adult education agencies, and typically, can account up to 90% of the total grant.

So bottom line is that if your agency use AEFLA funds for compensation for personal services to pay salaries and benefits, then time and effort records are such as semiannual certifications, personal activity reports, timesheet, whatever you use to document the time, so time and effort records are required.

So what is required? The requirements said that any employee, full time, part time, substitute, hourly paid with federal funds must maintain documentation showing that their time is allocable. Again, that allocability in proportion, allocable to a federal program. So in other words, a cost must be allocated or charged to a federal program in accordance to the benefits received.

Again, this basic example that we-- if an agency-- if a teacher is paid 50% with AEFLA funds, let's say, resource code 3905, providing adult basic education, and 50% with CAEP, resource code 6391, the time and effort documentation, whether it's a semiannual certification, personal activity report, timesheet, whatever the agency uses must demonstrate that at least 50% of the time-- of the teacher's time was providing AEFLA grant related activities under the resource code 3905.

So allocability, the easy--

Speaker 1: Arturo, I'm going to interrupt just for a second. Everybody's bells and whistles are going to be going off right now because of the alert. So they're doing it across the United States. So we got it a little early here. You might have not have gotten it yet where you're in California, but I'm just making sure that we have a little space here so the people can turn off the message and then get back to it. OK?

Arturo Ambriz: Yeah, I just got the thing. Acknowledged it and turned it off. So--

Speaker 1: There you go.

Arturo Ambriz: Let me know when we're ready to continue.

Speaker 1: I think we're good. Go-- let's go.

Arturo Ambriz: OK. I hope we're all good now. And the only thing I wanted to mention on our location or allocability, really, the easy-- the easiest way to demonstrate that is to have the employees include on the time and effort again whether it's semi-annual personal activity report or part, they should clearly state the activity in the actual-- on the actual time the employee is working, benefiting the programs, whether it's AEFLA or the other resources the employee is compensated for.

And we'll cover some forms that have space to document the activity and the time. So in upcoming slides, we'll have samples that will help us or hopefully, help you understand the requirements better.

OK. This is the standards for documentation. For time and effort, the information is on three slides. This is the first one included on the standards for documentation that mentioned on the prior slide.

So again, whether you use semi-annual certification, PARs timesheet, this is the requirement. So for this section of 2 CFR 200, 430(i)(1), the documentation must be based on records that accurately reflect the work performed. The records must be supported by a system of internal controls, which provide reasonable assurance that the charges are accurate, allowable, and properly allocated.

So a strong internal control ensure reliability and accuracy. For example, verifiable document-- verifiable documentation, such as review and approval of supervisors, signature for employees, having firsthand knowledge of the services the employee provide, backup documentation such as duty statements, class schedules, and so on.

Again, I included note with leading questions. So hopefully, this will help you when you go back and find-- if you're responsible for this area, then you can determine whether you have this systems in place or the requirements in place. But if not, we'll help you identify who or what unit is doing this work.

The second requirement is that the records must be incorporated into the official records of the agency. So basically, on this case, time and effort records should be incorporated with your payroll records and new time accounting records.

This is the second slide of three that includes the standards for documentation. And so what the requirement says is that the records must reasonably reflect the total activity for which the employee is compensated.

So again, if the employee is funded with more than one funding source, the time and effort record must reflect 100% of activity. We, sometimes, when we do our reviews, we see time and effort records some agencies maintain. And the form has the elements that it only includes the portion that relates to the federal award.

So again, it must include 100%. Activities employee perform under the AEFLA. If they're the same as they do with CAEP, they will still have to display those from CAEP. If they are funded with other funding sources, it has to include all 100% of the activity.

The second one-- or the next one is that the records must encompass all activities, federal and non-federal. So basically, these two requirements go hand in hand. And a leading question is, do the time and effort records include all activities, federal, non-federal, reflecting, again, 100% of the position? And we'll look at some forms that will help us understand the requirements.

This is the third slide that include the standards for documentation. And so it-- the requirement is that records must comply with the agency established accounting policy and practices.

So in this case, does your time and effort records align with your policy and procedures? And we'll go over more policies and procedures, but in instance, what the policy and procedure say is what is taking place.

The next one is-- the next one is that the records must support the distribution among a specific activities of cost objectives. Cost objectives is definitely something that we'll cover because it's important. And we'll see more details on next slides.

So cost objective is the-- is mentioned here on the federal requirement. But pretty much what it is cost adjectives are the activities the employee perform. And again, the easiest way to have the employee describe or identify the cost objective is to include those or to identify or write those on their time and effort record.

For example, a cost objective can be ESO instruction, ABE instruction, administration, professional development, CASAS intake, CASAS assessment. So all those are different cost objectives or activities.

Another requirement is that budget estimates. These are estimates determined before the services are performed, alone, do not qualify as support for charges to federal awards. So this is one of the most common reasons for no-- of noncompliance.

A lot of the times, we receive documentation that reflects the funding. And it's great to see how the person is funded. But it does-- that doesn't-- that is not the time and effort. Remember, the effort is the effort that employee performs services to the program. So budget estimates, again, are not a valid evidence for time and effort documentation.

So what will happen when we receive those documents, then we'll have to ask for more documentation. So what did the person do? Then we might interview the employee. Then we will request payroll records, class sketches. And so that is just to justify the charges to the program.

And the noncompliance still will be that the agency have to correct-- have a corrective action to train employees, to develop those policies and procedures. If not developed, the time spent on the program should be based-- reasonable based on the actual time the employee spent serving those programs.

And again, as mentioned, cost objective. This is-- one of the standards of documentation is that the records must support the distribution among specific activities or cost objectives. So on the regulation of cost objective is defined as a function, activities, mandated set asides, mandatory minimums. Like for example, with AEFLA, there is a requirement that you can spend up to 5% for administrative cost. So that will-- that what makes administrative costs a cost objective.

Unlike the definition of the California School Accounting Manual, they define in practical terms that a cost objective is a set of work activities allowable under the terms and conditions of a particular funding source. For example, on the resource code 3905, we have different cost objectives. We have ESL instruction, ABE instruction, CASAS testing, administrative costs. So again, this is resource code 3905. 39113, we have the high school secondary education or high school diploma, GED, instruction, high school instruction. So that's pretty much the cost objective, those activities of a particular funding source.

OK. When administrators, again, we-- collaboration with your program and fiscal staff, you're planning and determining or verifying what type of documentation this employee should maintain, the-- something to keep in mind that a very-- the most significant factor is not the number of funding sources the employee is paid. It is rather the activity or activities being performed by the employee.

So if we go to what-- when we want to determine what type of documentation a certain employee should be maintaining, the type of documentation will depend on whether the employee works on a single cost objective or activity or multiple cost objectives. And again, the regulation-- a single cost objective is a function activity and so on, or when both the services being performed and the population being served is allowable and eligible under any of the programs supporting the cost objective.

And we have a couple examples that these are the typical ones with the AEFLA of funds. So a very basic one is when-- we have an employee solely providing ESL instruction on the resource code 3905, and is paid 100% with AEFLA funds. That's a single cost objective or single activity.

An example 2, when employees pay with more than one funding source. So we have an employee who solely, again, provides ESL instruction. Basically, the employee is doing the same function as on the example 1. But on this case, the employees pay 50% with AEFLA and 50% with CAEP.

So on this case, still, the employee works on a single cost objective because the services being performed and the population being served, English language learners, are allowable and eligible under CAEP and AEFLA, supporting the ESL structure and cost objective of activity. So again, the factor is what the employee do compared to how was the employee being paid?

And we have-- that lead us to a semi-annual certification or periodic certification, which is a form agencies often use to comply with the federal regulations for those employees who work on a single cost objective.

So these are the elements that a semi-annual certification will include to meet the federal requirements. It's-- it will be an-- it will reflect an updated file-- this is an updated file record covering the entire period of the certification, identifies, again the objective or activity, resource code, percentage of actual time, hours time expended for the period of the certification.

Accounts for the total activity for which the employee is compensated, that means federal and non-federal. Any signed and dated by the employee or supervisor. Agencies might require both signatures. That's a really good internal controls showing that the employee sign and the supervisor review and approve that time and effort documentation.

There is a sample certification-- semiannual certification on the California School Accounting Manual. And this link will take you to that. But if not, it's on page 905-19.

I'd like to mention that the semi-annual certification of periodic certifications forms are suggestions. The agencies might use different certifications, but as long as he meets the federal requirements, we talk about on those first-- the three slides and the one prior to that. So again, if the agency used a different type of-- form of certification for employees who work on a single cost objective, make sure it includes these elements.

And I hope you can see this. You can probably increase your zoom on the PowerPoint. But this template or form is basic, and is typically, again, for someone who works on a single cost objective or activity and is paid with only one funding source. If utilized correctly, this sample template includes all the elements and information the agency will need to help the agency meet the federal regulations.

Again, for example, if you have an instructional aide who works 100% supporting, let's say, your adult secondary education instruction and is paid solely with resource code 3913, then these forms will be adequate.

I'd like to mention something important. Employee training is very important, even with these simple forms, because the employee will need to understand that what they sign in is based on their position. And they-- certifying that they-- that's what they did. They provide adult secondary education instruction. And this is, on this case, a minor certification that is covering, typically, from July 1 to December 31. And then he signed after December 31, attesting or certifying that, in fact, that's what they did during those six months.

This is the template example to our second example on this slide, which is for someone who still work on a single cost objective but is paid with more than one funding source. Again, if utilized correctly, this template include the information to help the agency meet their requirements. OK.

Continuing with time-- type of documentation. Again, when you're making that determination, how do we-- what documentation these employees should maintain? And again, the type of documentation will depend on whether the employee works on a single cost objective or multiple cost objective.

We have-- the multiple cost objective is basically when an employee works on more than one federal award, a federal and non-federal award, a function, and the activities performed are not considered a single cost objective.

So two examples. On this case, we have an employee who is funded 25 AEFLA, resource code 3926, 25 with Perkins. So that-- at that point, we know it's two different federal programs. So that employee works on a multiple cost objective. So that employee will maintain the documentation the agency uses for individuals or for employees who work on multiple cost objectives.

Example 2 is if an employee provides offline instruction and administration services, which includes professional development, and is paid 100% with AEFLA funds, the employee is considered to work on multiple cost objective as instruction and administration activities are two separate functions of cost objectives within the AEFLA grant. So even though it's 100% paid with AEFLA, the employee works on two cost objectives. So the information should be maintained for each of those activities.

And again-- excuse me. And again, the most important factor is what the function's employee do rather than how they are paid. Parts of equivalent. So this-- I typically use the adequate for employees who work on multiple objectives, who usually have a variation of activities, support various programs. And we typically refer to this as a PAR time sheet or time log.

And the elements for this certification is that this is an after the fact record, again, as after the employee performed the activity, reflecting the actual time work, not budgeted estimates on each cost objective or activity, under each resource code.

Prepare a list monthly or unless substitute system. Includes all activities for which the employee is compensated 100%, federal and non-federal. Again, signed and date by the employee or supervisor. Agency might require both. This is a strong internal control again.

And I'm also including a link to a sample form on the California School Accounting Manual. So that form is basic, but it's include the elements to meet the requirements-- the federal requirements. Again, if the agency used any other type of documentation for employees who work on multiple objectives, please ensure that includes, at a minimum, these elements. And most importantly, that they meet the requirements on the slides that we discussed the standards.

This is a simple form for those who work on multiple objectives. And their time is fairly predictable. Again, training is important. So they understand that they need to document 100%.

So on this case, this will be adequate for someone who-- like for example, a teacher who teaches adult basic education and also teaches ESL or the literacy part under Resource code 3926. So 3926, 3905, they are different requirements for those funds. So they, by itself, are two different cost objectives.

And if an employee is paid with 3926 and 3905 in CAEP and other programs, then automatically is-- the employee is working on a multiple cost objective, again, because the requirements for 3905, 3913, and 3926 are different. So it's different sources of funds with different eligibility.

This is another form for employees who work on multiple cost objectives. And again, if you realize correctly, this form include the elements and information to help the agency meet the time and effort requirements for employees who work on multiple cost objectives.

This form is fairly simple. And I really like this form because it includes a clear area for funding source, activity, and the time the employee spend serving that activity in that funding source.

Again, these are just samples. But if you use any other form of certification, make sure you include the elements on these forms. And again, employee training is very important because often, we see the certifications, but they not completed correctly. Sometimes, on the activity, they just listed adult education, which is not very helpful because we don't know what they did on adult education. Sometimes, it has just the resource code and not the activity. But again, with the resource code, we don't know what the activity was so we cannot verify if the activity is allowable or not allowable.

So employee training is very important that these forms are completed correctly and are reviewed and approved within reasonable time because if the form is monthly, you should be signing and completing these forms right after the end of the month. And it will help to show that it was reviewed and approved or it was signed some type of assurance that is reasonably close to the month that is reported.

OK. Real quick, the other part that is required for time and effort is policy and procedures. And so this-- the Federal Cost Allocation Guide indicates that these are essential to implement an effective time and effort reporting system. Then the process should be in sufficient detail to understand how the systems will operate from when the time is worked and when the time is recorded on the accounting records, charged to the federal award.

So some of the common noncompliance that we noticed is that sometimes, agencies don't have policies and procedures updated or nonexistent. So if that is the case, definitely, you will start as soon as you can. And then reach out to your CDE consultant if you need any assistance.

An agency written policy and procedures are to be established and implemented for documented time and effort of employees that work on federal programs. These are the main-- some of the elements that might be included on those policies and procedures.

One key requirement or something really important is that the policy and procedures must include the elements to meet the federal compliance and also ensure that what's reflected on your policy and procedures is actually taking place. So your time and effort record should be aligned to your policy and procedures. If you say that you maintain personal activity reports, then you're really maintaining personal activity reports. And they should include things such as what forms are used, who must complete the forms, the due dates, where and when the forms are submitted, approval, reconciliation process, employee training, and sample forms in the appendices.

So when you have a review, this is one of the first areas that we review to understand your system. And so when we review the policy and procedures, the expectation is that that's what's happening on-- actually happening with your time and effort documentation.

OK. And a couple of questions to help us understand the single versus multiple cost objective on this question is we have a director of adult education who provides administrative services for AEFLA, and also, we are a Title I, Perkins. So on this case, once we see more than one federal award or one federal program, automatically is that the person works on a multiple cost objective.

Single or multiple objective. Here, we have an instructional aide, who provides instruction support for ABE students allowable under CAEP and AEFLA. In addition, the aide provides CASAS pre-test, post-test and-- to these students. The aide salary benefits are paid 60% with CAEP and 40% with AEFLA resource code 3905.

So in this case, the answer is A. This is a single cost objective based on that the services we perform, ABE instruction and CASAS pre-test, post-test, and the population being served, ABE students are allowable and eligible under CAEP and AEFLA. So in this case, the employee will complete time and effort documentation the agency uses for employees who work on a single cost objective.

And this is the last one. We have a school principal who provides support to all adult education programs. And again, we will need to know the functions of the services that the employee performs to make a determination. So in this case, it will not be a sufficient information to determine a cost objective. We'll need to know what kind of support the principal does for this, and what kind of programs support.

OK. And that's it for time and effort. We're almost done. Jim, do we have questions for time and effort?

Jim Shields: Yes, we have several. So I'll get right to it. First one, do you need time and effort reports for all adult ed staff, even if they are not paid with AEFLA funds? Are only those that are paid with AEFLA funds-- for example, the agency pays some of their teachers with AEFLA, but not all.

Arturo Ambriz: OK. Is-- it would be-- the short answer is yes. In-- let me say, for federal-- for employees who are paid with AEFLA funds, it's absolutely yes. For employees who are paid with restricted funds, for example, CAEP, it's also yes. The agency should follow the federal rules for those employees who are paid with restricted programs.

On the California School Accounting Manual, there is an alternative to use for those who are paid with restricted programs. But the general rule is that they should be using the systems or the time and effort process that they use for federal. But if I'm not sure what the details are for those who are paid with CAEP funds for the alternative because there's an alternative that they can use. But the expectation is that they use the federal requirements.

Jim Shields: Great. And the next one, I think this question was asked before you provided examples of the PARs of the semi-annual certification. But it says, might you have a sample document to look at for time and effort? So the person who sent that question in, if what Arturo provided isn't what you're looking for, then let us know. Thank you.

And then is 50/50 allowable, even if prior to receiving WIOA grants, the teacher was paid 100% with CAEP?

Arturo Ambriz: OK. Great question. So again, the employee-- they really have to consider if there's a change on the activities. Like for example, if the employee was paid 100% with CAEP, and it was just providing ESL, and now you want to pay that employee with 50% CAEP, 50% AEFLA, it has to be some change on the position. Like for example, now the teacher, instead of just doing ESL, the teacher is also providing tutoring services, is providing additional support to students that are not part of the same position.

So it really depends on the services, not so much-- because what we use is-- we use as a first question is, how this employee was paid on the prior year. But then it might be different reasons. It might be because the employee got promoted because now the employee is teaching different subjects.

So on this case, it's possible, but it will-- the first consideration is, what's different from last year? Because when there's a budget shift, it has to be a difference. It has to be because there are additional functions that are supplemental that might justify the charge of the shift on funding.

Jim Shields: Great. And this person, I think, just had an example that they wanted a little clarity on. It says, if you have an IET teacher teaching part CTE and part ESL, they can only be funded, in part, by AEFLA, correct?

Arturo Ambriz: Yes, that is the-- yeah, AEFLA-- the-- and I'm going to assume the IET, the CPEs for the resource called 3926. Again, they-- those funds are intended for-- to support English language learners with the leadership and the work and the coops part. So on that case, definitely, the CTE part has to be paid ideally with non- AEFLA. Title I, usually, can support the training piece.

Jim Shields: OK. Great. And then are CASAS testing and admin tasks considered different cost objectives?

Arturo Ambriz: Yes. CASAS testing is direct services to-- everything that is direct to students, it's part of the 95% of the grant, which is the adult education and literacy activities. The administration is a different cost objective because there is the 5% that it needs to be identified. So that is why it's two different cost objectives.

Jim Shields: OK. Great. And then we're just down to a few here. Are there any lists that state exactly what activity are cost objective terms to use?

Arturo Ambriz: We don't really have a specific-- a document that shows the cost objectives. But I-- that's really interesting that maybe, we will put something in place. But in a way to think about cost objective is really the activities the employee perform. And the easiest way is to think of research code 3905 is ESL. So ESL includes instruction, administration, CASAS assessment testing, and data reporting.

So data reporting, like for example, those data managers. That's administrating the grant. So that is administration. CASAS testing, student intakes, orientation, those are services directly to students. So that is not administration costs. Anything that doesn't have to do with the administration of the grant is direct cost.

And cost objective, again, there's no right or wrong, but it should be sufficient to identify the activity the employee is doing.

Jim Shields: OK. If reassigning an IA in a high school program who is paid by general funds to conducting an AEFLA activities such as CASAS assessments, would it be allowable to switch to AEFLA funds?

Arturo Ambriz: I'm sorry, what is-- I--

Jim Shields: I think what they're asking, I think if you have a classified person or a teacher, it's an AI, and there's a lot of acronyms in high school program. So the person is, they are being paid in general funds. But then I guess as part of their task, they're conducting an AEFLA activity such as CASAS assessments. Would that portion-- I think what they're asking, would that portion of their job be allowable to switch are to be covered by AEFLA funds?

Arturo Ambriz: Yeah. I think the key word there is reassigning. And again, it's really not the person, it's what the person is doing. Again, if it was paid with CAEP, doing something related to CAEP. But now it's going to be reassigned to AEFLA activities. And if there is a need, and they comply with the rules and regulations, that should be OK.

Jim Shields: Right. And our last one, would an instructor that helps with watching adults with kids be considered an AEFLA supplements?

Arturo Ambriz: Watching-- well, that's--

Jim Shields: So I think the student's kids--

Arturo Ambriz: For child care?

Jim Shields: Child care. Yeah

Arturo Ambriz: I will-- so basically, if he-- if-- definitely, that seems like a that might be allowable because if-- I would say, what I think is confusing or at least, interesting is instructor watching kids. So adults with kids.

So for child care, it's-- it might be because if they-- to attend those AEFLA programs, they will not be able to pay with CAEP funds for child care. But without AEFLA funds, they are able to pay for child care costs, whether it is instructor or someone who is going to watch, that's definitely a supplemental-- a supplemental cost that-- because it wouldn't be-- I guess, the easiest way to put it, it wouldn't be possible without the AEFLA funds. And that's the whole purpose to use AEFLA funds for those type of service, support services.

Jim Shields: OK. Great. That's it for the questions.

Arturo Ambriz: OK. And again, we just have this-- or this will go in a couple of minutes. So this is the-- the matching requirement is that the 25% annual that all grantees must provide in non-federal funds. And this is typically the-- those of you who are continuing. So on the next slide, I'm going to show you an example. These are reported on the ECR.

Again, the known federal funds contribution can be on cash, in-kind, or stay in local-- stay in local funds. So I just want to mention a key requirement on the marching contribution is that they are subject to the same rules and regulations the AEFLA funds are subject. So it has to be allowable under the grant in order to be-- for the agency to claim or to report as a matching contribution.

So this is the agency report the non-federal contribution on the expenditure credit report. This is an example of what new grantees will see. And it's just divided on three sections. The state general fund is typically UK expenditures related to AEFLA activities.

All the non-federal funding, that is very rare. I mean, it's not often that we see those, and mainly because the contribution really are things such as cash or designated foundation local grants assigned for AEFLA programs or for leadership programs.

In-kind funding is the other section. And in-kind funding is typical. That is your classroom space, volunteering time, buildings, donated property, and so on.

And that's it. If there is any questions on matching, Jim.

Jim Shields: So far, nothing is appearing. But we can give folks maybe a second or two. But it's-- yeah, I guess you covered everything for that section. So great.

Arturo Ambriz: OK. OK. And if there are no questions, right on time. Thank you so much, again, for attending. And we know this can be complex, but again, keep this PowerPoint. Reach out to your CDE consultant. Reach out to me if there's anything we can assist. And if you have additional questions, you can send those to me or to your consultant or to the CDE Adult Education Office. So the information is on the slide. And again, I want to thank you one last time.