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January 22, 2010 03:03 AM UTC

Losing ARRA funds - due to rank incompetence.

1 Comments
by: DavidThi808

Interesting letter from Glen B. Gainer III, NASACT President to Mr. Daniel Werfel, Controller

The United States Office of Management and Budget

The state of Colorado has submitted and received approval of its ARRA S-SWCAP from the Federal Division of Cost Allocation (DCA). Additionally, many of the Colorado state agencies have submitted an Indirect Cost Rate Proposal (ICRP) or Public Assistance Cost Allocation Plan (PACAP), and some have received approval of those ICRPs or PACAPs. Even though these plans have been approved at both levels, Colorado has run into significant problems attempting to recover the S-SWCAP approved allocation amount from the ARRA grants.

Specific instances include the following (note that these items are based on discussions with state agencies or departments and have not been formally documented):

The U.S. Department of Education (USDOE) . USDOE issued guidance in the Federal Register on October 27, 2009 (Volume 74, No. 206), which set specific dollar limits on the amount that could be recovered from the ARRA portion of its IDEA and Title I grants. The dollar amounts are the lesser of 0.1 percent or $500,000 and are significantly less than the $898,809 (19 percent of Colorado’s total allocated costs) that was allocated to the Colorado Department of Education (CDE) through the DCA approved S-SWCAP. Under prohibitions against applying its ICRP to passthrough dollars, CDE reports it can at best recover $365,287 from ARRA funds to pay the SSWCAP allocation; however, doing so may jeopardize their ability to adequately meet additional ARRA grant requirements because CDE’s internal oversight costs would then go unfunded. In application, there is a significant misalignment between OMB’s original directive allowing collection of 0.5 percent of total ARRA dollars as compared to USDOE’s 0.1 percent allowance and their policy that no pass through funds are available for administrative costs. USDOE has recently issued additional guidance limiting total ARRA oversight recoveries to the amount in the Federal Register; Colorado believes these amounts are inadequate as shown by the approved S-SWCAP allocation. (The Division of Cost Allocation has delegated approval of the CDE ICRP to USDOE.)

The Centers for Medicare and Medicaid Services (CMS) . Reportedly CMS has informed the Colorado Department of Health Care Policy and Financing of its position that the S-SWCAP allocated costs cannot be applied to the ARRA enhanced FMAP, but is allowed as a normal Medicaid cost. This appears to be the opposite of the DCA directives requiring that ARRA administrative oversight costs be applied only to ARRA grants and not other federal grants. The application of Colorado’s $838,599 of S-SWCAP allocation to the normal Medicaid funding will result in 50 percent state participation and 50 percent recovery from ARRA grants ($419,299) because normal SWCAP allocations are based on total costs not just the federal share of costs. In comparison, per DCA instruction, the S-SWCAP allocation basis is specifically limited to only ARRA dollars received by the state; as a result, the S-SWCAP allocation should be recovered only from federal dollars without regard to matching percentages.

What’s especially frustrating about this is there is software that solves a significant part (not all) of the above problems. And it’s inexpensive. But OIT won’t even take a look at it. In other words, the ARRA funds available for oversight are sufficient – if OIT was willing to consider programs from companies that do not have teams of expensive salespeople.

Granted, this is the same group that continues the disastrous CBMS (in fairness Bill Owens’s administration started that train wreck) and so this is not surprising.

But with our having to cut the budget everywhere, I hope both Governor Ritter and our legislature will take a close look at OIT and look at replacing the leadership there with some highly qualified people. Because the above is not all the ARRA funds being lost, just a couple of examples.

After all, a half million here, and a half million there, and you’re starting to talk real money.

One thought on “Losing ARRA funds – due to rank incompetence.”

DavidThi808 says:

January 22, 2010 at 3:22 am

from Glen Emerson Morris

Every mistake made in the development and deployment of the Colorado Benefits Management System was completely avoidable. A little previous experience and common sense would have avoided a situation that adversely affected tens of thousands of people. The real tragedy is that, given the state of the American software industry, the mistakes made weren’t surprising at all.

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Losing ARRA funds - due to rank incompetence.

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