[nfbmi-talk] when will mcb complete its rsa homework?

Wed Nov 16 13:54:47 UTC 2011

This still isn’t done to this date, November 16, 2011 now one year after RSA required corrective actions. In fact MCB continues to abuse the Michigan FOIA in this regards in addition to not accounting for federal funds and how it administers these programs critical for blind youth in transition in these counties.

For this alone Patrick Cannon, as Director of MCB should be fired. Simply, it is gross dereliction of known duties, documented and it has extreme negative impact on these programs let alone not being a good steward of taxpayer’s funds.

Moreover, the Regional Supervisor should be scrutinized for the development and oversight of these programs as well along with the associated school district personnel and third parties like Peckham.

Sincerely,

Paul Joseph Harcz, Jr.

>From RSA Monitoring Report:

Finding 2:  In FY 2009, MCB entered into three agreements called “Certified Expenditure Agreements” with local school districts for the purpose of using expenditures incurred under these agreements for meeting its non-Federal share requirement for the VR program.  The certified expenditures under these three agreements, totaling $416,112, were for school staff, fringe benefits, supplies, and travel.  The agreements were silent as to the services to be provided by the cooperating agencies and the consumers to be served; however, in practice, RSA was told by staff that the local school districts provided the same services under the agreements to their usual consumers that they customarily provide in the ordinary course of business.  For example:

·         Eaton Intermediate School District (ISD) transition staff informed RSA while onsite that the Orientation and Mobility (O&M) and Visual Impairment (VI) consultants provided the same services to all students with disabilities participating in the program – not just MCB consumers.  According to the Eaton ISD transition staff, only 3 of the 11 students – 27 percent – receiving O&M consultation services under the cash match program were MCB consumers.  Similarly, only 3 of the 17 students – 18 percent – receiving VI consultation services under the cash match agreements were MCB consumers.  Although the written agreements indicated that MCB was not certifying any of the Eaton ISD staff’s time for match purposes, the Eaton ISD transition staff told RSA that MCB certified 100 percent of the O&M consultant’s salary and 50 percent of the VI consultant’s salary as providing services to MCB consumers.

·         The agreement for Ingham ISD identified three individuals as certifying 100 percent of their time – totaling $204, 946 – spent providing services exclusively to MCB consumers.  However, according to a spreadsheet provided by MCB that spanned October 2008 through July 2009, one of the individuals providing services pursuant to the cash match agreement at Ingham ISD verified that she worked only 244.55 hours – 15.85 percent of the 1,533 total hours worked – in providing services to MCB consumers.

Finally, the various agreements stated that service providers under the agreements would be “technically supervised by” MCB and would comply with all requirements governing the VR program.  According to MCB staff, the agency has engaged in these and similar agreements for several years.

In order for MCB to use expenditures incurred by another public agency for purposes of satisfying its non-Federal share of 21.3 percent of the expenditures under the State Plan, the non-Federal expenditures must be incurred by the cooperating agency pursuant to a valid third-party cooperative arrangement that meets the requirements of 34 CFR 361.28.  In particular, the regulations require:  1) the services be new services, not customarily provided by the agency, or expanded services with a VR focus; 2) the services be provided only to VR applicants or eligible consumers; 3) the VR agency maintain supervisory control over the expenditures and staff providing the services; and 4) all State Plan requirements be met.  

The three agreements between MCB and local school districts failed to comply with Federal requirements governing third-party cooperative arrangements for several reasons.  First, as stated above, the agreements were silent as to the individuals to be served and the services to be provided under the agreements.  Due to the lack of specification in the agreements, RSA learned from transition staff in the school districts that the school districts continued to provide their customary services to their usual consumer population, not VR services to VR consumers, under these agreements, in violation of 34 CFR 361.28(a)(1) and (2).  Although MCB consumers were among those served under the agreements, they were a small minority of the individuals receiving the services.  Federal regulations require that the services provided under the cooperative agreements must be provided only to VR consumers (34 CFR 361.28(a)(2)).  Second, MCB did not supervise the expenditures incurred or the staff providing services under the agreements, as required by the language of the agreements and 34 CFR 361.28(a)(3).  For example, MCB could not verify the number of hours staff worked, the tasks performed, or the actual expenditures incurred under the agreements.  In a spreadsheet provided by MCB, it is clear that the staff providing the services under the Ingham agreement spent very little time serving MCB consumers as compared to other students with disabilities, yet MCB accepted the staff’s certification that they spent 100 percent of their time serving MCB consumers.  Third, the school districts failed to meet the State Plan requirements, as required by 34 CFR 361.28(a)(4), by not providing VR services to VR consumers.  Expenditures incurred under the VR State plan must be solely for the provision of VR services and the administration of the VR program (34 CFR 361.3).  For the foregoing reasons, these agreements do not comply with 34 CFR 361.28; therefore, the non-Federal expenditures incurred under these agreements are not eligible sources of match for MCB under the VR program.  

In addition, upon reviewing the three agreements and supporting documentation, RSA learned that MCB was using third-party in-kind contributions as a source of match.  For example, the MCB certified $16,000 and $12,300 in supplies and travel expenditures incurred by Eaton ISD and Ingham ISD, respectively, for match purposes under the VR program.  MCB’s use of in-kind contributions violated 34 CFR 361.60(b)(2), which prohibits the use of third-party in-kind donations for match purposes under the VR program.

Corrective Action:  MCB must:

2.1              cease reporting non-Federal expenditures as match funds under the VR program when those non-Federal expenditures fail to comply with 34 CFR 361.28 or 34 CFR 361.60(b);

2.2              amend those agreements that will be used by MCB as a source of non-Federal expenditures for meeting its non-Federal share obligation under the VR program to ensure they comply with 34 CFR 361.28;

2.3              submit a written assurance to RSA within 10 days of receipt of the final monitoring report that:  1) all future third-party agreements, for purposes of meeting MCB’s non-Federal share under the VR program, will comply with 34 CFR 361.28; and 2) MCB will not use in-kind contributions for meeting its non-Federal share under the VR program in accordance with 34 CFR 361.60(b); and 

2.4              complete and submit the following source of match spreadsheet entitled, “Certified Expenditure Agreements,” that provides summary information on the total amount of certified funds MCB received from the public agencies through these agreements and the total amount used by MCB for VR program match in FYs 2005 through 2009:

      Certified Expenditure Agreements

       (FYs 2005 through 2009)

      FY 2005
      FY 2006
      FY 2007
      FY 2008
      FY 2009

      Total certified funds MCB received from public entities for match

      Total certified funds from these agreements used for match  in specified FY

      Total certified funds from the agreements, incurred in the provision of allowable services to eligible individuals in accordance with 34 CFR 361.28, used for match  in specified FY

2.5       MCB must submit written documentation to support the amount of certified expenditures reported in the above chart as being allowable under the VR program.  The supporting documentation must demonstrate that the expenditures were incurred during the provision of allowable VR services to MCB consumers. 

Agency Response:  MCB’s match procedures are based on prior RSA consultation and reviews and MCB has historical documentation to support this claim.  MCB disagrees with the RSA finding that the three agreements between MCB and the local school districts (Certified Expenditure Agreements) are unallowable certified expenditures.  It is our determination that these agreements fully meet the requirements of 361.28.  The services provided in these three agreements were not the usual services of the school districts.   

MCB disagrees with the RSA statement that MCB did not supervise the expenditures incurred or the staff providing services under the agreement.  MCB’s blended staff is supervised by the manager within the region.  The time sheets for the personnel that provided services for MCB’s consumers under the certified match agreements are housed at the ISD district offices.  The certified agreements that are signed by the school personnel identify the specific instructional time provided to MCB’s consumers.  Copies of the agreements are attached indicating the supervision by the MCB staff.  MCB meets with the staff bi-monthly to review progress of the program, as well as to discuss with the staff the objectives of the specific individualized programs.  The ISD staff that are identified in the agreements are the ones that provide the instructions for the consumers in their expanded curriculum relating to career exploration, vocational information, comprehensive mobility instructions, work readiness skill training, job placement services, including job coaching, when necessary, and job follow along services.  These agreements also provide pre-employment activities, which includes resume development, job shadowing, and mentoring during the summer months.  These services are provided to eligible MCB consumers.

With regard to completion of the chart as required by corrective action 2.4 above, MCB has limited staff and resources and cannot work on issues which go back to October 1, 2004 (beginning of FY 2005).  The agency’s highest priority is working on current issues.  The documentation is available onsite for RSA reviewers.

RSA Response:  RSA has re-reviewed the three agreements in light of MCB’s comments.  While RSA understands that MCB disagrees with the RSA statement that MCB did not supervise the expenditures incurred or the staff providing services under the agreement, the problem is that neither the three one-page agreements – which were ambiguous as to the supervision MCB would provide -- nor our conversations with staff from those cooperating agencies while onsite support MCB’s claim.  Furthermore, even if MCB could document that it supervised the expenditures incurred and the staff providing the VR services under the agreements, as required by 34 CFR 361.28(a)(3), the agreements still failed to satisfy the other requirements for a third-party cooperative arrangement  at 34 CFR 361.28(a)(1), (2), and (4).  Most importantly, the information that RSA learned onsite, as described in this Finding, indicates that the services provided under the third-party cooperative agreements – O&M and VI consultations – were the same services provided to all students with disabilities.  In fact, only 27 percent and 18 percent of the students participating in the O&M and VI consultations, respectively, were MCB consumers.  Furthermore, the spreadsheet MCB provided shows one of the staff persons only provided services to MCB consumers 15.85 percent of her time, yet 100 percent of her salary was certified as non-Federal expenditures for match purposes.  Allowable expenditures under the VR State Plan must be solely for the provision of VR services to eligible consumers or the administration of the VR program (34 CFR 361.3).  Providing services to non-consumers is not an allowable expense under the VR program.  Given that MCB did not supply documentation to support its claim that the school districts provided only new or modified VR services to MCB consumers exclusively in accordance with the requirements set forth at 34 CFR 361.28, the Finding stands and corrective actions must be taken.  

In addition to re-reviewing the agreements, we also reviewed a letter written in April 1996 by the then RSA Regional Commissioner regarding the certified staffing agreements.  While the letter did not express concerns about the certified agreements as they existed at that time, the letter was based on third-party cooperative arrangement legal requirements that existed in 1996.  Those regulatory requirements changed in 1997, the year after the letter was written, and have remained virtually unchanged since then.  With regard to the issue of in-kind contributions discussed in that same letter, the information provided by the regional office did not accurately reflect the legal requirements that existed then and now.  RSA has always maintained the position that third-party in-kind contributions are not an allowable source of match under the VR program even though they are allowable under EDGAR (see 60 Fed. Reg. 64475, 64494 (December 15, 1995) and 62 Fed. Reg. 6308, 6333 (February 11, 1997)).  Although the prohibition for using third-party in-kind contributions as a VR match source was found in a different regulatory provision (34 CFR 361.24(c)) in 1996 then its current provision (34 CFR 361.60(b)(2)), the prohibition has remained virtually unchanged over the years.  

MCB still must complete the corrective actions outlined above.  In light of the fact that more facts are needed to determine the amount of certified staff expenditures that would be deemed allowable under the VR program, we have revised the chart that MCB must complete, pursuant to corrective action 2.4.  The revised chart not only asks for the amount of certified staff expenditures MCB is counting towards its VR match requirement per year, but also asks MCB to determine the amount of those expenditures that it believes were incurred in the provision of allowable services to eligible individuals in accordance with 34 CFR 361.28.  MCB also must submit supporting documentation as evidence of the amount of certified expenditures it reports in the chart as being allowable under the VR program (corrective action 2.5).  The chart also asks MCB to determine the amount of in-kind contributions it used, per fiscal year, for VR match purposes.  RSA will provide the specific TA requested as needed.  RSA requests that MCB be more specific about the TA it needs.

Technical Assistance:  MCB requests clarification on services to applicants vs. eligible consumers and allowable outreach activities.