School Facility
Program Update
County School Facilities Consortium
September 25, 2012
“To enrich the lives of California’s school children as
stewards of the taxpayers’ commitment to education.”
Presenters:
Lisa Silverman, Executive Officer
Rick Asbell, Chief of Fiscal Services
Today’s Discussion
•
•
•
•
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COE Apportionments & Funding
Priority Funding Round
Financial Hardship Review (Process Improvements)
Financial Hardship Re-Reviews
Audit Subcommittee
2
COE Apportionments
Total Amount Apportioned For the School Facility Program:
$31.9 Billion
$1.0 Billion
Districts
COEs
$30.9 Billion
3
COE Funding by Region
* Dollar figures represent all
program totals.
$26.0 million*
60 CRs built
11 CRs modernized**
$49.6 million*
72 CRs built
3 CRs modernized**
$55.6 million*
78 CRs built
26 CRs modernized**
$30.0 million*
97 CRs built
66 CRs modernized**
$124.8 million*
174 CRs built
31 CRs modernized**
$54.8 million*
108 CRs built
36 CRs modernized**
$121.4 million*
263 CRs built
69 CRs modernized**
$50.7 million*
111 CRs built
33 CRs modernized**
Totals
Funding
$976.7 m
CRs built
2,023
CRs modernized 416
** The classrooms (CRs)
modernized represent the
funding used for the
facilities, which may not be
on the classrooms but on
other facility updates.
$238.8 million*
556 CRs built
11 CRs modernized**
$127.0 million*
247 CRs built
120 CRs modernized**
$98.0 million*
257 CRs built
10 CRs modernized**
4
Priority Funding: Background
State Allocation Board (SAB) approved regulations at the
May 25, 2011 SAB Meeting to expedite funding for projects
that are ready to begin construction.
• Two certification filing periods per year
• January and July
• Each period has a 30-day certification submittal window
• Projects on the Unfunded approvals list can participate
• At the June 27, 2012 SAB Meeting, new regulatory
amendments to the Priority Funding Process were
approved
• Regulations are currently in the Public Comment Period with
an end date of October 22, 2012
5
2013 Priority Funding Round Timelines
Once Office of Administrative Law approves regulations:
• First Filing Period:
• Request Filing Period from 1/9/13 to 2/7/13
• Eligible for Apportionments until 6/30/13
• Second Filing Period:
• Request Filing Period from 5/8/13 to 6/6/13
• Eligible for Apportionments from 7/1/13 to 12/31/13
6
Priority Funding: What to Expect
Approximately $1 billion in remaining Bond Authority. In order to get
these funds out into the community:
• Sale of General Obligation Bonds by the State Treasurer’s Office
• Typically occurs in the Spring and in the Fall
• Cash available for apportionment
• September 25, 2012 Bond Sale
• Apportionment made by the State Allocation Board
• Valid Priority Funding certification
• Funded according to original received date
• Fund Release Authorization (Form SAB 50-05) must be submitted to the
OPSC within 90 days
• If a valid form is not submitted, the project will be placed at the bottom
of the Unfunded List
7
Priority Funding: Current Round
Total Received: $637.6 Million, 119 Projects
$31.0 million
22 Projects
Districts
COEs
$606.6 Million
97 Projects
Filing Period Began: July 11, 2012
Filing Period Ended: August 9, 2012
Certifications Expire: January 8, 2013
8
Financial Hardship Review –
Process Improvements
Streamline the Financial Hardship (FH) Review process
• Created FH Checklists to standardized documentation
requested in a FH review
• Two-tier FH review process
• Phase 1 – Review of qualifying criteria for FH status (COEs
automatically qualify)
• Phase 2 – Review of available funds
• Reminder Letters are sent to District/COE of upcoming
deadlines for document submittal
• On-Site and Conference Call outreach for District/COE is
available
9
Financial Hardship Review Statistics
Average Review Time for Financial Hardship Packages (in days)
350
291
300
263
253
237
250
200
150
98
100
78
50
0
2009
2009***
2010
2010***
2011
Total FH Reviews
*** COE FH Review Times Only
** FH Re-Reviews Only
* COE FH Re-Reviews Only
10
2011***
19
21
2011**
2011*
Financial Hardship Re-Review
Any SFP project on an unfunded list for more than 180 days must have a
review conducted of a COE’s financial records to determine if additional
COE funds are available as contribution to their project.
• For the September 2012 Bond Sale, the OPSC will send letters to COEs
who submitted a Certification Letter to participate in Priority in Funding
• Letter will ask for Financial Information based on the potential funds will be
made available from the Bond Sale to the School Facility Program
• FH Re-Review must be completed prior to a project receiving an
apportionment.
• FH Re-Review is only a review for additional funds.
• The COE does not have to re-establish their FH status.
• The OPSC will contact the COE for all documents required in an
Unfunded FH Re-Review.
• After a Re-Review is complete and the COE concurs with the finding
they will be eligible to receive an apportionment.
11
Financial Hardship Webinars
Webinars to assist FH Districts and COEs
• May 2011
• Overview of the FH review process
• Walk through of the Phase 1 and Phase 2 review process
• Discussed key documents needed: FH project worksheet, FH
Fund Worksheets, and a worksheet breaking out RDA funds
received by individual area
• October 2011
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•
•
•
Background on FH Re-Reviews and Priority in Funding Rounds
Documents needed
Review of Available Funds
FH Re-Review Findings Letter
• Both webinars are available on the OPSC website.
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Financial Hardship Team
For Assistance contact:
Steve Inman, Supervisor
• 916-375-4576 or [email protected]
Maria Gamino
• 916-375-2031 or [email protected]
John Leininger
• 916-375-4610 or [email protected]
Jacqueline Shepherd
• 916-376-5119 or [email protected]
Audrey Sims-Davis
• 916-376-3989 or [email protected]
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Audit Subcommittee
Last meeting on August 27, 2012 to discuss:
• Status Update from the Audit Work Group (AWG)
• Review proposed process for SFP Review and Audits
• Shorten Time to Closeout a Project
• Certifications are Verified sooner
• Ensure Increased Accountability
• Seek Input and Direction from the Audit Subcommittee
14
Review of Proposed Process
•
Shorten the Lifecycle of a Project—(Application submittal to Closeout)
• Propose Regulation change to commence Final Review of a project from 2 years
to 1 year
• Explore a new “Trigger” for the Completion of a Project
•
Verify Certifications Earlier in the Lifecycle of a Project
• Consolidated Incremental Compliance Check at 18 months
• Verify Certain Application for Funding Certifications (SAB Form 50-04)
• Verify Certain Fund Release Authorization Certifications (SAB Form 50-05)
• Substantial Progress Check
Ensure Increased Accountability
• Use of External Entity to Perform Audits
• Yearly 50-06 Reports would be verified for internal controls and sampling of
expenditures on 50-06
• Additional Audit Scope to be determined by Education Audit Appeals Panel
Audit Guide/Regulations
•
15
Review of Proposed Process
Proposed Process for SFP Review and Audits
Consolidated Incremental Compliance Check
Assumptions:
Consolidated Incremental Compliance Check occurs 18 months after Fund Release (will require statute and regulation change).
First 50-06 Report would be due 18 months after Fund Release and subsequent 50-06 Reports would be due each year thereafter (will require statute and regulation change).
An External Audit will be triggered by the first 50-06 Report and subsequent 50-06 Reports but not the Final 50-06 Report (will require statute and regulation change) .
Incremental Compliance and Substantial Progress Checks(OPSC)
SFP Expenditure Review (OPSC)
Adjudicating Authority
18 Months to Year 6
State Agency Full Scope Audit may
be requested by the State
Allocation Board or Education
Audit Appeals Panel anytime for a
District or one of it’s projects.
0 to 18 Months
3&4
50-04 Submittal
Review Begins
1&2
District Requests
Fund Release
(within 90 days of
Apportionment)
(Day 0)
Consolidated Incremental Compliance Check
*Performed 18 months after Fund Release
*First 50-06 Report due 18 months after Fund
Release
Submittal of
additional 50-06
Reports by the
District
Verification would include:
*Appropriate 50-04 Certifications
*Appropriate 50-05 Certifications
*Substantial Progress
Additional 50-06
Reports to be
verified through
an External
Audit (except
final 50-06)
First 50-06 triggers an External Audit
Trigger for
Completion of Project
(TBD):
* Requirement to
submit Final
Expenditure Report
* Project is added to
Review Workload
(Propose a change to
Regulation that
review must
commence within 1
year of being added
to Review Workload)
OPSC will continue to verify the
following at time of Fund
Release Request :
OPSC reviews final 5006 report (OPSC will not
duplicate the work of
External Entity for
previous 50-06 reports)
(50-04 and 50-05
Certifications that could
not be verified due to
lack of information from
district in earlier check
will be verified here )
Review is Completed and
District Advised of Findings
(Normally completed
within 6 months unless
District disagrees with
Findings—may result in an
appeal before the SAB)
State Allocation
Board
(50-04 and 50-05
Certifications that can
only be checked at close
out may be checked
here)
*Construction Contracts
*Labor Compliance
External Audit (External Entity)
Final Report is
published by
External Entity
Yes
Yes
5
6
The External Audit’s scope would be defined by
the Education Audit Appeals Panel Audit Guide/
Regulations. Scope could include review of
internal controls and sampling of expenditures on
submitted 50-06.
Are there preliminary
findings that require
repayment of funds?
16
No
District agrees with
preliminary
findings?
No
Education Audit
Appeals Panel
Next Steps
Audit Subcommittee referred the following issues back to the AWG for
further discussion:
• 12 months vs. 18 months for Incremental Compliance Check
• Identify “Important” 50-04 and 50-05 Certifications that would be
verified by OPSC
• “Trigger” for the Completion of a Project
• External Audits
•
Evaluate the Use of Proposition 39 Audits
17
Questions?
18