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–Susan Lytle Gilmore, Ph.D., Director of Adult Education, Sacramento City Unified School District
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AEP Questions and Answers

This is a collection of questions that are most frequently asked of the AEP Office. They are organized by topic area and will be updated as needed.

Fiscal Agent

Yes, you can. The choice you make will apply to all the funds the consortium receives from AEP.

The decision has to be made according to the decision-making structure in your Consortium Governance agreement. If you have no special structure for such decisions, the fallback is consensus. In any case, the decision submitted on your Consortium Fiscal Administration Declaration (CFAD), which is due May 2, is binding for all consortium members for the entire program year. It will apply to all AEP funds distributed.

Yes. If the consortium chooses to have a Fiscal Agent, all AEP Allocations will go through that entity.

No, you must select either “Direct Funding” or “Fiscal Agent” for all the Consortium Funds.

Yes. Members can receive direct allocations provided they spend the AEP funds in the seven program areas, based on a plan approved by members at a public meeting.

No, according to AB104 legislation, a consortium may use up to 5% for the administration of the consortium. Administrative activities are mostly fiscal in nature. There is no guaranteed fiscal agent funding as those administrative costs must be discussed by members when making the decision on who will be responsible for the administration of the consortium and the cost associated with those activities. Also, the consortium can decide to hire a different fiscal agent or opt for direct funding, which in turn may change the cost of administrating the consortium.

In the direct funding model, members would have to decide how they will manage the administration of the consortium. Who is going to manage the program side? Who will be responsible for those fiscal activities at the consortium level? How will the consortium report to the State? In some cases, members in the consortium have agreed to take on those responsibilities (along with funding to support it). A non-financial MOU would be important to have in place in order to have member agreement on who is responsible for what activities, the requirements, and deadlines.

In some instances, Direct Funding is quicker in getting the funding directly to consortia members. However, some State officials and some consortia state that having a common fiscal agent has encouraged better collaboration within the consortia and are satisfied with this process. Both models, Direct Funding or Fiscal Agent, require a MOU (financial or non-financial) in order to clarify the fiscal and programmatic responsibilities of the consortium and its members. Our goal is to both get funds “on the ground” to programs that benefit students as quickly as possible AND to foster collaboration between providers to improve coordination and alignment of services.

No, you will use your governance plan and agreed upon decision making process when making consortium decisions. Only changes to member allocations needs to be unanimous, per AB104.

No – consortia can only opt for one of two fiscal models – direct funding or a fiscal agent model. A consortium cannot vote to have MOE funds be directly funded to K-12 and consortium funds be allocated through the fiscal agent. Two things to keep in mind- 1) the "no less than prior year" rule for funding consortium members (unless changes are unanimously agreed to) continues into Year 2, and 2) there is no longer a distinction between MOE and consortia funds. MOE and consortia funds were always all AEP funds and the distinction was a Year 1 phenomenon only. Neither the CFAD nor the role of the fiscal agent have an effect on this.

Once the CFAD is submitted (no later than May 2 at 11:59 pm) the choice is fixed for the year. Your consortium will have to wait to make changes until the following year.

Allocations to consortia members from the State are set via the CFAD, but consortium members can move funds, as needed. This is the case regardless of whether the consortium has chosen Fiscal Agent or Direct Funding.  The methods may vary. 

To be clear, we at the State are not using the term “Certifying Agent.” There may be many people that help roll up the member’s expenditure and budget information, but there should be one Fiscal Agent or Fiscal Coordinator (for those doing Direct Funding) for the consortium. On the CFAD, you may list more than one person, but realize that the State really wants one person to talk to about fiscal matters at the consortium level. Keep in mind, that depending on how your consortium is structured, you may or may not have a Fiscal Agent. You may only need a Fiscal Coordinator for the consortium, while each member has its own certifying Fiscal Agent separately in their organization. This will vary from region to region.

The amounts for administration and indirect are outlined in the updated AEP Program Guidance on the AEP Resources webpage. “Indirect” is for membership level and “administrative” applies to the Fiscal Agents or the entity/person that will be responsible for the consortium level administrative activities. Don’t confuse consortium administrative activities with indirect – different rules, different definitions. See the 2016-17 AEP Program Guidance on the AEP Resources webpage.

Yes, it can. That is the case whether you have chosen a Fiscal Agent or Direct Funding. But once received via apportionment, you would have to use a subcontracting or MOU process to move the funding among members. More details will be released soon.

Fiscal Agents are not necessarily “guaranteed” the same amount every year as stated in the legislation for members of a consortium. In other words, Fiscal Agents are not “protected members” of a consortium. These individuals and the amounts they receive can change (if the consortium votes on this change) and the percent negotiated for their services may also vary – it can be up to 5%, but does not “have” to be the full 5%. The amount paid to the Fiscal Agent would depend on the services rendered and terms and conditions negotiated with consortia.

Note that if you go to Direct Funding, the consortium members would need to pull their resources together to pay the Primary Contact or designee for the cost of administering the consortium (which is still required under Direct Funding per all the State level deliverables). See Program Guidance for the list of those activities.

Consortia must focus on and agree to a process that will allow them to meet the AEP requirements. Consortia may elect a different Fiscal Agent if the current one fails to meet AEP requirements. However, AEP revision timelines and processes need to be followed when making such changes.

Regarding data and accountability funds – those that went straight to the fiscal agent – no pass through - the fiscal agent has the responsibility to oversee any funds their district receives directly. This would also apply to any AEP funds allocated to the fiscal agent (as the district has oversight) – but would not apply to the pass through.

Last year, the 2016-17 trailer bill was passed with language to limit the holding of funds to 45 days. Additionally, fiscal agents must use a pass through mechanism to disburse funds to members. To provide further clarification, an addition to AEP was included in the 2017-18 draft Trailer Bill language released by the California Department of Finance. The portion released pertaining to the Adult Education Block grant builds upon the existing legislation. The 2017-18 trailer bill language addition states that "program funds received by a participating school district shall be deposited in a separate fund of the school district to be known as the Adult Education Fund. Moneys in an Adult Education Fund shall be expended only for adult education purposes". Please go to the website under "About" and click on Adult Education Block Grant legislation.

Yes - here is the main part of the memo......Subject: Accounting Advisory: Adult Education Block Grant Funds

This accounting advisory addresses the appropriate accounting for districts receiving Adult Education Program (AEP) funds either as a fiscal agent, as a participant/provider, or both. The treatment of funds received as the fiscal agent for disbursement to other participants is different than for funds received by the district for the direct costs of providing adult education services.
Fiscal Agent
Funds received from the State under a fiscal agent agreement that are then disbursed within 45 days to other adult education providers should be recorded in the restricted General Fund as 8900 "Other Financing Sources" using revenue object code 8970 "Fiscal Agent Pass Though". Disbursements should be coded to "Other Outgo-Other Transfers" using expenditure object code 7400 "Other Transfers", excluding indirect cost recovery. Under AEP, districts have no fiduciary requirement regarding the use of the funds by the other participants. The only obligation of the fiscal agent is to disburse within 45 days.
If a portion of the funds received as a fiscal agent are for the district's own adult education program, then those funds should be recorded initially as described above. A transfer (other outgo) will be recorded to the fiscal agent funds for the district's share. The district will recognize its share of the funds in the restricted General Fund using revenue object code 8620 "General Categorical Programs". Expenditures should be recorded in expenditure object codes 1000-6000 as appropriate. Likewise, if the district is not the fiscal agent and is receiving AEP funds, those funds should be recorded to the restricted General Fund using revenue object code 8620 "General Categorical Programs" and expenditure object codes 1000-6000 as appropriate.
Note the newly created object codes are not currently reflected in the California Community College Budget and Accounting Manual. This guidance will be incorporated at the next opportunity.