A few ideas about COVID – 19’s impact on SPIL public input

In a Dear Colleague letter on March 17, Dr. Corinna Stiles* addressed some of the questions from the network regarding the COVID-19 pandemic. As we reduce our group meetings and look to other communication, the SPIL development comes to mind. One of Dr. Stiles’ high-level questions that SILCs have been asking about is this:

Q: What about preparing the SPIL, especially public hearings? A: OILP will providing additional guidance. Please note that current Federal law and regulation does not require that “public hearings” be groups of people meeting in public. We encourage SILCs to begin thinking of alternative ways to reach and garner input used in formulating their SPIL.

I have been listening to the SILCs, and some of the creative ideas for input include electronic surveys with a link to follow, or group meetings by computer/phone such as Google Hangouts, Skype or Zoom. One SILC is asking that consumers call and leave voice comments on a phone line and staff are transcribing these for the SILC to review. Many SILCs are posting their draft SPIL on their website and requesting comments.

The point is that face to face meetings are not required in the federal law or regulations, so you have some flexibility in how you get input. And if we are honest with each other, SILCs have not always received the input they need with our current public hearings.

Current COVID-19 information can be found at the Centers for Disease Control and Prevention website at www.cdc.gov.  I also encourage you to review current resources and guidance found at www.ACL.gov/COVID-19.  This page is intended to make it easier for the aging and disability networks to find the information they need most. In most cases, you will find links to the definitive source for information, in order to ensure that our networks are accessing the most up-to-the-minute information.

*Corinna H. Stiles, PhD, JD, Director | Office of Independent Living Programs/Administration for Community Living /U.S. Department of Health and Human Services

How do we count services that happen in groups or electronically?

Note: while your Program Performance Reports (PPRs formerly 704 Reports) were submitted in December, you are continuing to collect data for the year we are in. In fact, you are over a quarter into the next year. Be sure to review the data collection processes for consistency throughout the year so that you don’t have to scramble next December.

Question: Many of our CILs are beginning to offer webinars and podcasts to deliver information and training to people. Questions have been raised on how the CILs will capture service data related to digital touchpoints with individuals, and if they can count these individuals as served on the Program Performance Report. And, if so, where should they be captured. Obviously, most if not all of these are not part of any intake process (waiver or ILP) and will not be counted in that manner. The regulations are not very clear on this, as far as I can tell? Can you provide your opinion on this and/or share any regulatory guidance that may be helpful in answering this question.

Response: Usually with any group event, in person or electronically, the meeting cannot be IL Skills or even peer support because that individual participating isn’t required to have a goal and a CSR. Sometimes the group is made up on current consumers, in which case they might agree on a common goal for the course and could add it to a CSR, and then assess if that goal is met. Sometimes the members of a group have individual goals achieved by their participation. Otherwise that leaves us with only two choices — Information and Referral (I&R) or outreach.

Hits on a website or likes on a Facebook page cannot be I and R because you don’t really know if any specific information was viewed by the individual. Any numbers of people you have reached, therefore, would be outreach, not I & R.

Webinars or other group events that do not require that attenders have a CSR or goal could be considered I and R.

One final note. The area of electronic services is emerging, and the recent COVID19 is causing CILs to consider if use of webinar video and other such options are workable during the crisis — and will be viable options for services in the future. Stay tuned.

How is your planning?

A dial with "See problem" at 9:00, then Make a plan, take action and get results. The needle rests on get results.

Remember the Program Performance Report (PPR) that you submitted the end of December? In one of those sections — Section 6.2.1 — you were required to “establish clear priorities through annual and 3-year program and financial planning objectives for the center, including overall goals or a mission for the center, a work plan for achiving the goals or mission, specific objectives, service priorities, and types of services to be provided, and a description that shall demonstrate how the proposed activities of the applicant are consistent with the most recent 3-year State plan”. Let’s break this down a little.

First, the funder wants to know what you plan to do with the funds you receive. How will they be used? What are your program priorities? Usually this is determined by your board, with input from others. You may or may not publish a three year plan, but you need to have one. The priorities and goals flow from the mission the board establishes. That isn’t enough, though. You need to have specific objectives you plan to achieve (and that you will report on in next year’s report).

Second, you need to address financial goals. One way to do this is to examine what resource development activities you want to conduct. You are required to do resource development, so those are good financial goals. Others might include ways you plan to implement better internal controls, or adding a fee for service option that you expect will increase your funds.

Finally, your goals need to be compatible with your State Plan for Independent Living. How does what your center plans to achieve dovetail with what the network in your state wants to achieve?

Your PPR is reviewed by the Office of Independent Living Programs. (Yes, that has been happening and you may have heard from them.) You may get questions if you didn’t provide a thorough response in this section. Remember that planning for the future, and achieving that plan, are important in your center’s work.

Are Advertising and Public Relations costs allowed?

How can I distinguish between unallowable advertising and outreach? Can I call promotional giveaways outreach?

While advertising is one of those categories that is on the list of those not allowed with federal funds, not all advertising is unallowable. Uniform Guidance section 200.421 (HHS regulation section 75.421) confirms that advertising costs are allowable for:

  • recruiting personnel necessary for the performance of a Federal award,
  • procurement of goods and services for performing a Federal award,
  • program, outreach, as well as
  • other specific purposes necessary to meet the requirements of the Federal award.

Also, certain public relations that include communicating with the public and the press pertaining to specific activities or accomplishments resulting from performance of the Federal award are allowable.

Other public relations costs are not allowed, nor is the cost of displays, demonstrations or exhibits, or the costs of promotional items or memorabilia.

John F Heveron, Jr. Principal, Heveron and Company CPAs

Board Recruitment tips for CILs

Does your board of directors have the expertise needed to oversee your organization? Are all your board positions full? Are you planning for the day when members rotate off your board? You should always be on the lookout for good board members. Because the staff, especially the Executive Director, are often out in the community, they might run into potential board members. At the same time, they should not be in charge of the board membership.

We suggest that you utilize a board member application process. Your application can ask about the prospective board member’s disability, since you must maintain at least 51% members who have a significant disability. Then a nominating committee can review the applications, interview the candidates, and invite candidates to observe a meeting and meet the full board before a vote is taken. What are some characteristics you look for in your board?

  • Consumer control is first. Make sure that more than 50% (51% or more) of your board members state that they have a significant disability.
  • Look around at your service area and compare the community makeup with the board makeup. Is your board representative of ethnic diversity, at least to the same degree as your community? What about other aspects of diversity?
  • Are your board members representative of gender, age, or other aspects of community? While board members typically need to be of legal age, you can still have younger and older members in the mix.
  • What kinds of expertise is useful on the board? Legal? Financial? Business? Contacts? Determine what is missing from your board makeup and seek out members to fill the gaps.
  • Check your bylaws. You may have other requirements, such as requiring the person to live or work in your service area. This is not required by your grantor. If you feel someone outside the area will benefit the organization, you can suggest them to your board as long as it is allowed by your bylaws and policies.
  • Typically the executive director is not a member of the board, although again, your bylaws would determine that. Some boards have found it useful to include current or past members of their board or the board or director of another center.

One last thought. If you don’t have term limits for board members, consider it. While board recruitment is a lot of work, there are many advantages to members rotating off after a period of time so that you can expand those who know you in the community and can tap the expertise of new folks in the process.

Are we required to have an independent audit?

While your small center is not required by your federal funder to conduct an annual audit, typically you are by other funding sources (check your contracts) and it is best practice for all.

a word diagram including FISCAL YEAR in large print, then strategy, planning, success, project, etc.

The only federally required audit kicks in when you spend at least $750,000 in federal funds in a year. Then you are required to have the more expensive single audit of all federal funds which includes allowable and non-allowable costs.

Most centers have an independent firm conduct what is called a financial statement audit, which assures your funders that your financial statements are an accurate portrayal of your finances. This is what I recommend for you, but typically the auditor is secured by the board and they may want something more detailed when the Executive Director or Finance Director are replaced. You can collect a few bids, then give to the board for their decision. Then the auditor should report any findings directly to the board when the audit is complete.

The audit should occur as soon as possible after the close of your fiscal year. The auditor will also typically file your IRS Form 990 on your behalf. You should have done it annually, and it is required for you to keep your 501(c)3 status with the IRS. If you lose that status you lose eligibility to receive Title VII funds.

Does the Hatch Act apply to CILs or SILCs?

A man, arms crossed, looks into the camera. In the background is a capital building.

The Hatch Act typically applies to federal employees, and may apply to state and local elected officials. It forbids intimidation or bribery of voters and restricts political campaign activities by federal employees. It does not apply to Title VII funded grantees such as the centers and SILCs.

When you are a 723 state (where the state provides more funding than the federal grants), you will want to ask your DSE if that is the case in their view. That is who provides oversite in 723 states.  

There are other prohibitions regarding partisan political activity in the IRS code because of your 501(c)3 status, which is required for all centers and optional for SILCs. Here is an article regarding those prohibitions: https://www.irs.gov/pub/irs-tege/eotopici02.pdf

Related to lobbying, specifically, we do provide guidance as those prohibitions do apply to centers. 45 CFR 93 says in §93.100:

Conditions on use of funds.

(a) No appropriated funds may be expended by the recipient of a Federal contract, grant, loan, or cooperative agreement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

And this definition may help:

(o) Recipient includes all contractors, subcontractors at any tier, and subgrantees at any tier of the recipient of funds received in connection with a Federal contract, grant, loan, or cooperative agreement. The term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.

A proper statement for your policies might be this from the certification regarding lobbying:

No Federal appropriated funds can be paid or will be paid, by or on behalf of (name of center), to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. As an employee or board member of (name of center) you cannot lobby on behalf of the center without the approval of the Executive Director. If you participate in lobbying, all related costs such as travel, lodging, or meals and indirect costs cannot be paid with federal funds.

You might add that the Center cannot and will not support a specific candidate for office, and cannot act in a partisan manner related to elections. Political materials supporting a candidate cannot be displayed on Center property.

Is indirect cost the same as management and general in our financial statements?

Indirect costs that are used in the calculation of your indirect cost rate aren’t always the same as management and general costs in your financial statements. 

Sometimes a specific program will require administrative costs for that program only.  So those administrative costs would be directly assigned to that program. 

In other cases costs, that are potentially direct,  may be combined with indirect costs for convenience.  For example costs like copies and supplies, which could be tracked directly to programs are generally combined with indirect costs because it is inefficient to track them for  direct assignment .

BUT, in many cases indirect and general & administrative will be the same, especially for smaller and medium-sized organizations.

Using management and general as your indirect costs makes your annual reporting of actual indirect costs very easy, and also simplifies tracking your indirect costs percentage to make sure you are not billing significantly more or less indirect cost than you are incurring.

John F Heveron, Jr. Principal, Heveron and Company CPAs

Dos and Don’ts of Drawing Funds

A fish hook snags a dollar bill.

If your Center for Independent Living receives a direct grant from Health and Human Services through the Administration on Community Living, then someone in your organization draws down funds to be directly deposited in your CIL’s bank account. This process is getting a lot of attention from the Office of Independent Living Programs, and you want to know what you can and cannot do.

Do make sure that you are authorized to draw funds before you need to do so. There is a process for being the identified person, and you don’t want the cash crunch of waiting until the last minute and then discovering you still have to get registered as the person who can draw. (You can assign two people to the task, each with their own registration, so that you don’t run into a situation where no one can draw. Typically the second person is a board member as a back up.)

Don’t draw down using your predecessor’s user ID and password, even if they left it for you or left it memorized on the computer you are using. During the process you certify that you are the person who signed in, so make sure that is true.

Do draw down the amount you will need for the expenses charged to the grant. An easy way to do this is to draw down to cover the expenses for which checks were written, drawing the properly allocated amount for the specific grant. A monthly draw or a draw that coincides with payroll makes sense since payroll is your largest expense. Have your bookkeeper or accountant run a report of the checks written and the total charged to each funding source. If you do this once or twice a month you will keep up with your actual expenses.

Don’t draw down in excess of what you are spending in that period. You cannot use your draw to borrow money to pay other expenses, or to build a reserve. You should draw from your Part C grant only what you are charging to the grant, both direct and indirect expenses. This includes only the appropriate share of the expenses that are shared. If you are having difficulty getting money on time from other funding sources you must resolve those with the entities funding the programs.

Do maintain a clearly labeled PDF of the payroll, payroll overhead calculation, other direct costs and indirect cost allocation be kept to support each draw. These should be retained for three years after the year of the draw.

Do realize that your program officer at ACL is reviewing the information related to your draws. There should not be a pattern, an equal amount drawn each time. You should be drawing based on actual expenses, not based on budgeted expenses or 1/12 every month.

Four key checks for SILCs

Your Statewide Independent Living Council operates under a set of rules found in section 705 of the Rehabilitation Act and in the SILC Indicators and SILC and DSE Assurances. Here are some key items that your SILC must not overlook:

  • The executive director of a Center must be selected by the center directors to serve on the SILC as a CIL representative. This is required in the Rehabilitation Act itself, in Section 705 which states: (2) Composition. – The Council shall include (A) among its voting members, at least 1 director of a center for independent living chosen by the directors of centers for independent living within the State; Note that this is not considered a conflict of interest. This voting member can serve as an officer as well unless your bylaws prevent that. The point is to have meaningful representation from the center(s) on the council.
  • Long-term members of the SILC (more than six consecutive years) are not legitimate because the same section of the Rehabilitation Act, 705 clarifies (6) Terms of Appointment. – (A) Length of term. – Each member of the Council shall serve for a term of 3 years, except that a member appointed to fill a vacancy occurring prior to the expiration of the term for which a predecessor was appointed, shall be appointed for the remainder of such term; and the terms of service of the members initially appointed shall be (as specified by the Governor) for such fewer number of years as will provide for the expiration of terms on a staggered basis. (B) Number of terms. – No member of the Council, other than a representative described in paragraph (2)(A) if there is only one center for independent living within the State, may serve more than two consecutive full terms. The governor’s appointment office needs to be aware of this item and must remove any members of the council who are serving now and have served in excess of 6 total years.
  • The Indicators mentioned above require a number of written and approved policies and procedures for the SILC and a training plan for SILC members. We can work with you on both those items.
  • Not all SILCs fund a full SILC office. The SILC can request staff assistance from the DSE as long as the person who provides the assistance is agreed to by the SILC and the SILC evaluates the work that is done for them. While it is true that the SILC cannot be established as an entity within a state agency, they can supervise and evaluate a person from the DSE assigned to the SILC.

For technical assistance or training regarding requirements for SILCs contact Paula McElwee at paulamcelwee.ilru@gmail.com