United States United States Department of Labor Department of Labor

Employment and Employment and Training AdministrationTraining Administration

N. Didra Nunn-Manpower N. Didra Nunn-Manpower Development SpecialistDevelopment Specialist

Understanding Understanding Expenditure DataExpenditure Data

Understanding Understanding Expenditure Data Expenditure Data

BackgroundBackground Low Spending LevelsLow Spending Levels ETA Investigation ResultsETA Investigation Results ImpactImpact Congressional InterestCongressional Interest GAO’s reportGAO’s report OIG’s reportOIG’s report

Understanding Understanding Expenditure Data Expenditure Data

Background Con’t…Background Con’t… GAO Recommendations:GAO Recommendations: ETA should clarify reporting guidance ETA should clarify reporting guidance

and definitionsand definitions ETA should use obligations along with ETA should use obligations along with

expenditures as a measure of fund expenditures as a measure of fund utilization (FUR)utilization (FUR)

ETA should share any spending ETA should share any spending “benchmarks” and guidance for better “benchmarks” and guidance for better management of spending with the management of spending with the StatesStates

Understanding Understanding Expenditure Data Expenditure Data

Background Con’t…Background Con’t… ETA Response to GAOETA Response to GAO TEGL 16-99, Change 1, & TEGL 16-99, Change 1, &

Financial training to clarify Financial training to clarify definitions, reporting instructionsdefinitions, reporting instructions

Accrued Expenditures (Fund Accrued Expenditures (Fund Utilization Rate) not ObligationsUtilization Rate) not Obligations

Understanding Understanding Expenditure Data Expenditure Data

Background Con’t…Background Con’t… WIA Reauthorization Proposal for WIA Reauthorization Proposal for

ReallotmentReallotment Based on 70% accrued Based on 70% accrued

expenditures, not 80% obligationsexpenditures, not 80% obligations Based on all funds available for Based on all funds available for

spending, not just current year fundsspending, not just current year funds Applied to each funding stream i.e., Applied to each funding stream i.e.,

Adult, Dislocated Worker, and Youth.Adult, Dislocated Worker, and Youth.

Understanding Understanding Expenditure Data Expenditure Data

TerminologyTerminology

Understanding Understanding Expenditure Data Expenditure Data

TerminologyTerminology Financial ReportingFinancial Reporting Total Federal Funds AuthorizedTotal Federal Funds Authorized Outlays (Accrued Expenditures)Outlays (Accrued Expenditures) Unliquidated ObligationsUnliquidated Obligations ObligationsObligations Unobligated BalanceUnobligated Balance

Understanding Understanding Expenditure Data Expenditure Data

Terminology Con’t…Terminology Con’t… Financial Reporting : Entity must : Entity must

demonstrate the ability to provide demonstrate the ability to provide accurate, current, and completeaccurate, current, and complete disclosure disclosure of the financial results of of the financial results of the financial results financially the financial results financially assisted activities in accordance assisted activities in accordance with the financial reporting with the financial reporting requirements of the grant/subgrant.requirements of the grant/subgrant.

Understanding Understanding Expenditure Data Expenditure Data

Terminology Terminology Total Federal funds authorized-Total Federal funds authorized- The The

total amount of Federal funds obligated total amount of Federal funds obligated by the DOL for use by the recipient. by the DOL for use by the recipient. This amount may include any This amount may include any authorized carryover of unobligated authorized carryover of unobligated funds from prior funding periods when funds from prior funding periods when permitted by the DOL’s regulations or permitted by the DOL’s regulations or implementing instructions implementing instructions

[29 CFR 95.2][29 CFR 95.2]

Understanding Understanding Expenditure Data Expenditure Data

Terminology Con’t…Terminology Con’t… Accrued expenditures-Accrued expenditures- are charges are charges

incurred by the grantee during a given incurred by the grantee during a given period requiring provision of funds for period requiring provision of funds for (1) goods and other tangible property (1) goods and other tangible property received; (2) services performed by received; (2) services performed by employees, contractors, subgrantees, employees, contractors, subgrantees, and other payees; and other amounts and other payees; and other amounts becoming owed (by the grantee) under becoming owed (by the grantee) under programs for which no current services programs for which no current services or performance is required, such as or performance is required, such as annuities, insurance claims, and other annuities, insurance claims, and other benefit payments [29 CFR 97.3] benefit payments [29 CFR 97.3]

Understanding Understanding Expenditure Data Expenditure Data

Terminology Con’t…Terminology Con’t… Outlays (expenditures)-Outlays (expenditures)- Charges made to Charges made to

the project or program. They may be the project or program. They may be reported on a cash or accrual basis. For reported on a cash or accrual basis. For reports prepared on a cash basis, outlays reports prepared on a cash basis, outlays are the sum of actual cash disbursement are the sum of actual cash disbursement for direct charges for goods and services, for direct charges for goods and services, the amount of indirect expense incurred the amount of indirect expense incurred the value of in-kind contributions applied, the value of in-kind contributions applied, and the amount of cash advances and and the amount of cash advances and payments made to contractors and payments made to contractors and subgrantees. ETA requires outlays subgrantees. ETA requires outlays (expenditures) to be reported on an (expenditures) to be reported on an accrual basis.accrual basis.

Understanding Understanding Expenditure Data Expenditure Data

Con’t…Con’t… Unliquidated Obligations-Unliquidated Obligations-For reports For reports

prepared on a cash basis, the prepared on a cash basis, the amount of obligations incurred by amount of obligations incurred by the grantee that has not been paid. the grantee that has not been paid. For reports prepared on an accrued For reports prepared on an accrued basis, they represent the amount of basis, they represent the amount of obligations incurred by the grantee obligations incurred by the grantee for which an outlay has not been for which an outlay has not been recorded recorded

Understanding Understanding Expenditure Data Expenditure Data

Con’t…Con’t… ObligationsObligations-The amounts of -The amounts of

orders placed, contracts and orders placed, contracts and subgrants awarded goods and subgrants awarded goods and services received, and similar services received, and similar transactions during a given period transactions during a given period that will require payment by the that will require payment by the grantee during the same or a grantee during the same or a future period.future period.

Understanding Understanding Expenditure Data Expenditure Data

Con’t…Con’t… Unobligated balance-Unobligated balance- The portion of The portion of

the funds authorized by the Federal the funds authorized by the Federal agency that has not been obligated agency that has not been obligated by the grantee and is determined by the grantee and is determined by deducting the cumulative by deducting the cumulative obligations from the cumulative obligations from the cumulative obligations from the cumulative obligations from the cumulative funds authorized [29 CFR 97.3]funds authorized [29 CFR 97.3]

What is Accrual What is Accrual Accounting?Accounting?

A method of accounting that A method of accounting that outlines an operating entity’s outlines an operating entity’s financial position and operating financial position and operating results are measured by the flow results are measured by the flow of economic resources.of economic resources.

Transactions are recorded in the Transactions are recorded in the accounting period in which they accounting period in which they occur occur

Why Accrual Why Accrual Reporting?Reporting?

Reliable financial information Reliable financial information “key”“key”

Effective ManagementEffective Management AccountabilityAccountability Federal fiduciary responsibilityFederal fiduciary responsibility

Obligation or Accrual Obligation or Accrual Expenditures?Expenditures?Exercise 1 & 2Exercise 1 & 2

Key Players in Key Players in Expenditure Data Expenditure Data

ReviewReview Labor, National Labor, National Labor, RegionalLabor, Regional StateState Local contractors and/or other grantees i.e., private or not-for Local contractors and/or other grantees i.e., private or not-for

profit grantees profit grantees Local areaLocal area

Local areas have two years within which to spend their annual allocations while states have 3 program years.

STATE

= EXPENDITURE DATA ANALYSIS

NATIONAL

REGIONAL (EIMS)

LOCAL, PRIVATE, NON-PROFIT, etc. (Other)[1]

[1] The above diagram is a “Sample” illustration of the reporting structure of expenditures.

Open DiscussionOpen Discussion

Regional OSS StaffRegional OSS Staff

(404)562-2095(404)562-2095