What You Need to Know!

Open and Honest:Transparency Act Requirements

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Sound Check

Agenda Highlight the Transparency Act

Explain the new reporting requirements

Assess your ability to capture the data

Provide tips for ensuring data quality

Identify submission procedures

Take your questions

Presenter

David J. DowneyU.S. Department of EducationOffice of the SecretaryRisk Management Service

Panelists

Ayisa CroweOffice of the Secretary

Pedro RomeroOffice of the Secretary

Constance DavisOffice of the Chief Financial Officer

U.S. Department of Education

Special Guest

Karen Lee • Office of Management and Budget

• Lead for Open Government in the Office of Federal Financial management

• Oversees the implementation of Federal spending transparency for grant awards among other areas of financial management

• Federal Funding Accountability and Transparency Act

• AKA: FFATA

• Signed into law September 6, 2006; amended in ‘08

• Purpose: To empower every American with the ability to hold the government accountable for each spending decision. The end result is to reduce wasteful spending in the government.

Transparency Act Overview

http://www.ffata.org/ffata/ffataact.html

The Transparency Act or FFATA legislation requires information on Federal awards (Federal financial assistance and expenditures) be made available to the public via a single, searchable website.

This impacts the awarding agencies and youthe grantees and subrecipients.

Who is Impacted?

• Take effect on October 1, 2010

• Are located in 2 CFR Part 170

• Requires disclosure of entities receiving Federal funding through Federal awards such as grants and their sub-grants

• Requires disclosure of executive compensation

• Requires the reported data for each award to be available on website open to the public

• Agencies assist OMB with implementation

New Reporting Requirements

Entities who receive or administer Federalfinancial assistance in the form of:• Contracts • Grants• Cooperative agreements• Loans and loan guarantees• Subsidies• Insurance• Food commodities• Direct appropriations• Assessed and voluntary contributions• “Other”

Who is Impacted?

Our Focus Today

• Legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient

• Contracts, small purchase agreements, vendor agreements, and consultant agreements awarded under an ED grant for supplies, equipment, and services are not considered subawards for Federal financial assistance under FATA, and thus, should not be reported in FSRS by the prime awardee

Subaward Definition

Who is Exempt? • Individual or “natural person” outside of a business or non-profit organization he or she operates

• Compensated executives if in the previous FY the entity received less than 80% of its annual gross revenue from Federal financial assistance and less than $25 million from Federal financial assistance and procurement contracts or subcontracts

• Gross income, from all sources under $300,000• Subawards• Total compensation of the five most highly compensated executives of any subrecipient

Who Else is Exempt?

• Cooperative research and development agreements pursuant to the Federal Technology Transfer Act of 1986 (15 U.S.C.)

• Technical assistance (which provides services in lieu of money)

• Transfer of title to Federally owned property provided in lieu of money—even if it is called a grant

• Any award funded in whole or in part with Recovery Act funds

• Public already has access to compensation info

Classified Information

Classified information remains exempt from the prime and subaward reporting

requirement

Requirements for Awarding Agencies• Make applicants aware of the reporting requirements for the Transparency Act in all announcements, regulations, notices, or other published documents

• Ensure that applicants have the necessary processes and systems in place to accurately report

• Include the award term in Appendix A

• Agencies report prime award information to USASpending.gov on 5th and 20th of each month

• Assist OMB with implementation and inform awardees

New Requirements for Grantees

• Prime grant awardees of grants $25,000 or more must report associated grant sub-awards

for Federal financial assistance

• Executive compensation information for awardees

• Be registered with Central Contractor Registration• See CCR.gov

Timetable • Reporting for prime and sub-award goes into effect October 1, 2010

• Prime awardees must report first tier sub-award information by the end of the following month from when the award was made or obligated

Example:

An award is made on October 15, 2010. The awardee has until November 30, 2010

to report.

• Reporting system (FSRS) Pre-populates prime awardee and subawardee information from the CCR. Prime awardees enter following sub-award information if not pre-populated:

–Name of entity receiving award–DBA name (Grants)–Amount of award–Subcontract/Subcontract Number–Funding agency–CFDA Number (Grants)–NAICS (Contracts)–Treasury Account Symbol–Award title descriptive

Data Elements

–Location of the entity (including congressional district)

–Place of performance (including congressional district)

–Unique identifier (e.g., DUNS) of the entity and its parent and DUNS +4 (Grants)

–Total compensation and names of top five executives

Data Elements

Who? Reports what? How?

Agency Prime award information for awards $25K or more

FAADS+ for grants, FPDS-NG for contracts

Prime grant awardee

Company informationExecutive compensationGrant subaward information for awards $25K or more

CCRCCR or FSRS*FSRS

Summary

If executive compensation is not found in CCR it can be supplied through FSRS

Ensuring Quality Data

Assessing Methodology• Essential step in the project’s development • Preparation is key• Anticipate potential problem areas

- Address in the design phase or early as possible• Ensure consistency across the board• Communicate clearly with staff collecting and

recording data

Where Methodology Goes Wrong

• Problems by design

• Problems arising from human error

Determine just wherethey overlap and howto eliminate, reduce,negate their effects on reporting.

Design HumanError

Where Methodology Goes Wrong

• Fundamental design flaws

• Data collection mechanisms

• Documentation

• Communication breakdowns

Lost, Inaccurate, or Questionable DataWhat do I do if I cannot find my grant in the FSRS.gov system?

When in doubt, contact your program officer!

Federal agencies must report all award transactions within 30 days of the award to USASpending.gov. Typically, the Department of Education (ED) submits award transactions to USASpending.gov on the 5th and 20th of each month. If your grant was awarded prior to the 5th , or between the 5th and 20th, check to see if it appears in USASpending.gov. If it does, you will be able to report in FSRS within 48 hours. If it does not appear in USASpending.gov within 30 days of your award, contact your program officer for assistance.

Questions

AnswersFurther Recovery Act questions- ED contact listed on the Grant Award Notification or,email RMSCommunications@ed.gov

Thank you for participating!Please complete an evaluation—

Your feedback is important. http://www.ed.gov/policy/gen/leg/recovery/rms-web-conferences.html

Resource Documents

• FFATA.org• Central Contractor Registration• USASpending.gov• FSRS.gov• whitehouse.gov/omb/open• Securities and Exchange Act of 1934• Federal Technology Transfer Act of 1986• 1-800-USA-LEARN

Resource Documents

G5 Hotline: Hours of Operation: 8:00 AM to 6:00 PM, Monday - Friday, EST

Toll-Free: 1-888-336-8930 TTY: 1-866-697-2696

Local: 202-401-6238

Email: edcaps.user@ed.gov

Definitions and Key Terms 1) Entity—means all of the following, as defined in 2 CFR part 25:

i. A Governmental organization, which is a State, local government, or Indian tribe;

ii. A foreign public entity; iii. A domestic or foreign nonprofit organization;iv. A domestic or foreign for-profit organization;v. A Federal agency, but only as a subrecipient under an award or

subaward to a non-Federal entity.

2) Executive—means officers, managing partners, or any other employees in management positions.

Definitions and Key Terms3) Subaward—term to denote a legal instrument to provide support for the performance of any portion of the substantive project or program for which you received this award and that you as the recipient award to an eligible subrecipient.

ii. The term does not include your procurement of property and services needed to carry out the project or program (for further explanation, see Sec. ---- .210 of the attachment to OMB Circular A-133, ``Audits of States, Local Governments, and Non-Profit Organizations'').

iii. A subaward may be provided through any legal agreement, including an agreement that you or a subrecipient considers a contract.

Definitions and Key Terms 4) Subrecipient—means an entity that:

i. Receives a subaward from you (the recipient) under this award; ii. Is accountable to you for the use of the Federal funds provided

by the subaward.

5) Total compensation—means the cash and noncash dollar value earned by the executive during the recipient's or subrecipient's preceding fiscal year and includes the following (for more information see 17 CFR 229.402(c)(2)):

i. Salary and bonus.ii. Awards of stock, stock options, and stock appreciation rights. Use the dollar amount recognized for financial statement

reporting purposes with respect to the fiscal year in accordance with the Statement of Financial Accounting Standards No. 123 (Revised 2004) (FAS 123R), Shared Based Payments.

Definitions and Key Terms 5) Total Compensation—

iii. Earnings for services under non-equity incentive plans. This does not include group life, health, hospitalization or medical reimbursement plans that do not discriminate in favor of executives, and are available generally to all salaried employees.

iv. Change in pension value. This is the change in present value of defined benefit and actuarial pension plans.

v. Above-market earnings on deferred compensation which is not tax-qualified.vi. Other compensation, if the aggregate value of all such other compensation (e.g. severance, termination payments, value of life insurance paid on behalf of the employee, perquisites or property) for the executive exceeds $10,000.

FAQ #1

Why is reporting under the Federal Funding Accountability and Transparency Act (FFATA) required? First-tier subaward data related to Federal contracts and grants and executive compensation data of these awardees must be reported, as FFATA requires that this information be made available to the public.

FAQ #2

When will FFATA be implemented for Federal grants? For Federal grants, FFATA reporting requirements were implemented on October 1, 2010.

FAQ # 3What grant awards are subject to the subaward and executive compenstation reporting requirements of FFATA? New Federal, non-Recovery Act funded grant awards with an award date on or after October 1, 2010, and resulting first-tier subawards for Federal financial assistance are subject to the reporting requirements under FFATA. For those new Federal grants as of October 1, 2010, if the initial award is equal to or over $25,000, reporting of subaward and executive compensation data is required.

FAQ # 3 (continued)If the initial award is below $25,000 but subsequent grant modifications result in a total award equal to or over $25,000, the award will be subject to the reporting requirements, as of the date the award exceeds $25,000. If the initial award equals or exceeds $25,000 but funding is subsequently deobligated such that the total award amount falls below $25,000, the award continues to be subject to the reporting requirements of FFATA.

FAQ # 4

Under a grant, what is considered a first-tier subaward? A subaward is an award made by the prime recipient to an eligible sub-recipient, or an award made by a sub-recipient at one tier to a sub-recipient at the next lower tier, for the purpose of supporting the performance of any portion of the substantive project or program for which a grant was awarded.

FAQ # 5

What are required FFATA data reporting elements? The key FFATA data reporting elements are: --Name of Entity Receiving Award--Amount of Award--Funding Agency--CFDA Program Number for Grants--Program Source--Award Title--Location of the Entity

FAQ # 6What encompasses the an entity’s location?

(Including Congressional district) --Place of Performance (including Congressional district) --Unique Identifier of the Entity and its Parent Organization --Total Compensation and Names of Top Five Executives -- Collect the Total compensation and names of the top five executives if: More than 80% of annual gross revenues are from the Federal government, and those revenues are greater than $25M annually, and compensation information is not already available through reporting to the SEC.

FAQ # 7

Are subawardees required to report data as required under FFATA? No. The prime grant awardee must report all information associated with a Federal grant, i.e. the prime awardee will report executive compensation data for the prime awardee and for its subawardees, as well as any other information associated with its subawardees.

FAQ # 8How will prime awardees report data as required under FFATA? Prime awardees will report using the FFATA Subaward Reporting System (FSRS), and will thus, be required to register in FSRS. During registration, the prime awardee’s information data fields will be pre-populated with information from the Central Contractor Registration System (CCR). As such, all prime grant awardees and subrecipients are required to register in CCR.

(FAQ continued)

FAQ # 8 continued

After creating an account and logging into the system, prime awardees will have access to a “MyFSRS” page with a set of actions available to them. This customized page will give awardees the ability to file multiple reports, access and update previously initiated reports, view approved reports, and create batch uploads of data.

FAQ # 9

When will prime awardees be able to report in FSRS? Prime awardees will be able to report in FSRS on October 29, 2010.

FAQ # 10

How much time does a prime recipient have to report executive compensation and/or subaward information? For subaward reporting, the prime awardee must report information related to a subaward by the end of the month following the month the subaward or obligation was made.

FAQ # 10 Examples

Example A: Prime awardee awards subaward on October 1, 2010 Prime awardee must report subaward data by November 30, 2010. Example B:Prime awardee awards subaward on October 31, 2010 Prime awardee must report subaward data by November 30, 2010

FAQ # 10 Examples ContinuedSimilarly, the prime awardee must report the subawardee’s executive compensation data by the end of the month following the month the award or obligation was made. Example C: Prime awardee awards subaward on October 1, 2010 Prime awardee must report subawardee’s executive compensation data by November 30, 2010 Example D:Prime awardee awards subaward on October 31, 2010 Prime awardee must report subawardee’s executive compensation data by November 30, 2010

FAQ # 10 Examples ContinuedFor the prime awardee’s executive compensation data, the prime awardee must report by the end of the month following the month the award or obligation was made. Example E: ED awards grant to prime awardee on October 1, 2010 Prime awardee must report executive compensation data by November 30, 2010. Example F:ED awards grant to prime awardee on October 31, 2010 Prime awardee must report executive compensation data by November 30, 2010

FAQ # 11Are there Federal grant awards that are not subject to reporting under FFATA? Yes. These grants fall into one of four categories.

1.An initial grant award of less then $25,000, and that is not supplemented with subsequent funding resulting in an amount equal to or greater than $25,000; however, if the award is supplemented resulting in a total award equal to or over $25,000, the award becomes subject to FFATA reporting requirements;

2.A grant awarded prior to October 1, 2010 that will receive continuation funding on or after October 1, 2010;

FAQ # 11 Continued

3. Grant awards to individuals who apply for, or receive, Federal awards as natural persons (i.e, unrelated to any business or non-profit organization he or she may own or operate in his or her name);

4. Grant awards to entities that had a gross income, from all sources, of less than $300,000 in the entities’ pervious tax year; Grant awards under which the required reporting would disclose classified information as addressed in FFATA Sections 2(a)(1)(C), 2(e), 3; and Grant awards, whether existing or new as of October 1, 2010, that are funded under the Recovery Act, as these grant awardees will continue to report through FederalReporting.gov.

FAQ # 12

Where will the FFATA data be displayed to the public? Data will be displayed to the public via USASpending.gov beginning in Fiscal Year 2011.