CAPLAW eNews Bulletin - December 2019
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Head Start and CSBG Disaster Relief • Incentive Compensation •
Head Start Lease Accounting • Head Start Accounting Simplification •
AICPA Hosting Services Interpretation • DMCA • Handling Negative Online Reviews
Applying for Supplemental CSBG and Head Start Disaster Relief FundingCSBG and Head Start programs hit hard by natural disasters in 2018 and 2019 could be eligible for emergency funding to help restore operations and respond to disaster-related needs. In June 2019, Congress appropriated an additional $25 million in CSBG funding and $55 million in Head Start funding as part of the Additional Supplemental Appropriations for Disaster Relief Act of 2019. This disaster recovery funding is available for expenses directly related to the consequences of major disasters and emergencies in 2018 and 2019 that have been declared by the President under the Stafford Act, 42 U.S.C. §§ 5121-5207. This article discusses recent CSBG and Head Start guidance on applying for disaster recovery funding. |
It's Beginning to Look a Lot Like... Bonus Season? Managing Disallowance Risk in Incentive Compensation Policies and Practices CAAs considering one-time incentive compensation or bonus payments to their employees must pay attention to both the content and the implementation of incentive compensation policies. While federal tax and grant rules permit CAAs to pay incentive compensation, improper practices have led to significant disallowances, penalties, and even the revocation of tax-exempt status. This article reviews the incentive compensation rules applicable to CAAs, discusses issues to consider when drafting a policy, and describes how to implement a policy to mitigate the risk of disallowance. |
Head Start Guidance on New FASB Lease Accounting Rules
The Office of Head Start recently issued guidance (ACF-IM-HS-19-05) discussing the impact of the updated Financial Accounting Standards Board (FASB) rules on lease accounting. Under the new FASB rules, the recognition, measurement, and presentation of expenses and cash flows arising from a lease will primarily depend on its classification as either a capital (finance) or operating lease. Head Start grantees must carefully evaluate and categorize each proposed lease arrangement, and must be mindful of the generally accepted accounting principles (GAAP), Head Start, and Uniform Guidance rules that apply to lease payments, including obtaining the necessary prior approvals and submitting required forms. For more information, see ACF-IM-HS-19-05 - Accounting and Reporting Capital Leases.
Head Start Simplifies Accounting Procedure
The accounting procedures for agencies with both Head Start and Early Head Start programs will become less complex beginning in FY 2020. An Information Memorandum, ACF-IM-HS-19-04, issued by the Office of Head Start (OHS) in early October, announced that two separate Common Accounting Numbers (CANs)—CAN 4125 for Early Head Start operating costs and CAN 4122 for Head Start operating costs—will be consolidated into a single account, CAN 4122, which will be used for the operating costs of both programs. OHS anticipates the move will help streamline various operational and accounting activities. For example, because both programs will be within the same CAN, agencies will have greater flexibility to adjust estimated shared cost allocations between the programs after an award has been issued, without having to obtain an OHS-approved modification.
The consolidation does not impact CAN 4120 for Head Start Training and Technical Assistance (T/TA) or CAN 4121 for Early Head Start T/TA, which will continue to remain separate. Nor do the changes impact Early Head Start-Child Care Partnership/Early Head Start Expansion grants. Other program request procedures, such as those for funding and slot conversion, remain the same.
The IM contains additional details on the impacts of the change and can be read here.
AICPA Hosting Services InterpretationEffective July 1, 2019, a CPA firm’s possession of a CAA’s data or records could, under certain circumstances, impair the CPA’s independence. This is the result of a new ethics interpretation from the American Institute of Certified Public Accountants (AICPA). The new “hosting services” interpretation, ET § 1.295.143 of the AICPA Code of Professional Conduct, addresses the growing prevalence of CPA firms using cloud-based software and virtual platforms to store, access, and use a client’s data. Under this new interpretation, hosting services impair a CPA’s independence when the firm has accepted responsibility for maintaining internal control over a client’s data or records, whether financial or nonfinancial. |
Stay Safe – It’s Time to Renew Your Digital Millennium Copyright Act Designated Agents If your CAA lets third parties post content on your website, it might be time to update and submit some key information to the U.S. Copyright Office, or face the prospect of strict liability for copyright infringement under the Digital Millennium Copyright Act (DMCA). The DMCA requires that designations be renewed every three years and the U.S. Copyright Office issued a rule in late 2016 requiring everyone to file a new online DMCA designation between December 1, 2016 and December 31, 2017. If your CAA did so, you must take action to renew your designation between December 1, 2019 and December 31, 2020. |
Protect Your CAA’s Reputation – Planning for Toxic
Online Reviews
Online reviews aren’t always flattering. Sometimes, they’re downright nasty. If you’ve been in business long enough, chances are that someone, somewhere might not be happy with your organization or an interaction they’ve had with a representative of it. In today’s digital society, it’s easy for outraged employees and clients to take perceived slights and grievances public by way of the keyboard and vent their frustrations, real and manufactured. As they lash out, they have the potential to scare off would-be workers, clients, or donors and funding sources.
The dreaded nasty review paints a lasting impression. While an online presence in today’s world is essential to promote organizational initiatives and better serve clients, it also leaves an entity vulnerable to the ire of the digitally vocal. Leaving many to wonder, must an organization’s reputation hinge on the whims of an internet troll?
Before you decide to tear down that website, delete those social media accounts, and dust off the old fax machine, consider this article, recently released by the law firm Fisher Phillips: Former Employee Firebombing - 5-Step Plan To Handle Incendiary Online Reviews. It presents a plan for dealing with toxic online reviews, and for protecting the well-earned positive reputation of your organization. CAAs should review the steps carefully as they contemplate how best to mitigate the impact of the negative feedback.
This e-News Bulletin is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Grant Award Number 90ET0467-03. Any opinion, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.
The contents of this publication are intended to convey general information only and do not constitute legal advice. Any communication through this publication or through CAPLAW’s website does not constitute or create an attorney-client relationship. If you need legal advice, please contact CAPLAW or another attorney directly.
