vgfoa 2009 sppgring conference
TRANSCRIPT
VGFOA 2009 Spring Conferencep gJune 3-5, 2009
Preparing Governments for the Accountability Requirements Accountability Requirements of the America Recovery and
Reinvestment Act (ARRA) Reinvestment Act (ARRA)
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AgendaOverview of ARRAOverview of ARRA
Impact on State and Local Governments
Key Deadlines
Transparency, Oversight, and Accountability
Receiving, Disbursing and Reporting ARRA funds
Compliance with ARRA Requirements Compliance with ARRA Requirements
Future Guidance and Department of Education Illustration
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Internal Control, External Audit and Single Audit Implications
The American Recovery and Reinvestment Act
C t i f T t l Sti l F di A t (Billi )Categories of Total Stimulus Funding Amount (Billions)*Tax Relief $288*State and Local Fiscal Relief 144*State and Local Fiscal Relief 144Infrastructure and Science 111Protecting the Vulnerable 81Protecting the Vulnerable 81Health Care 59Education and Training 53Education and Training 53Energy 43Other 8
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Other 8TOTAL $787
Source: www.recovery.govSource: www.recovery.gov
Purposes of the Recovery Act (ARRA)P d t j b d t i Preserve and create jobs and promote economic recoveryAssist those impacted by the recessionProvide investments needed to increase economic efficiency
by spurring technological advances in science and health Invest in transportation, environmental protection, and other
infrastructure that will provide long-term economic benefitsStabilize state and local government budgets, in order to
minimize and avoid reductions in essential services and counterproductive state and local tax increases
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counterproductive state and local tax increases
ARRA Targeted EffortsClean efficient American energyClean, efficient American energy
Transforming our economy with science and technology
Modernizing roads, bridges, transit and waterway
Education for the 21st century
Tax cuts to make work pay an create jobs
Lowering healthcare costs Lowering healthcare costs
Other
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Jobs, Jobs, Jobs
Key Accountability ObjectivesProgram/economic outcomes achievedProgram/economic outcomes achievedCompetitive opportunities maximizedWaste, fraud, and abuse identified and minimizedFunds obligated/expended timely Improper payments minimizedTimely and accurate data reportingy p g***Increased accountability and transparency*** Recovery gov
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Recovery.gov Recovery board, GAO, Inspector Generals, whistleblowers
Accountability and TransparencyG D i C it & E D l t- Governor or Designee - Community & Econ. Development
- Recovery Czar - Education
- State Auditor - Health
- State Budget Director - Highways & Transportationg g y p
- State Controller - Homeland Security
Chi f I f ti Offi H i- Chief Information Officer - Housing
- Chief Procurement Officer - Social Services
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- State Treasurer - State Evaluation Entity
Overview of ARRA Accounting and Reporting
Accounting and reporting requirements for ARRA funds represent a significant fiscal process
Therefore, you need to ensure that ARRA requirements : Are well documented; Key controls identified, documented & tested; Control weaknesses are identified and mitigated
Addi i l i Additional reporting Federal government States
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States Recipients
State ImpactEstimated $275 Billion (34.9%) of ARRA Funds will be distributed to state and local governments via funding formulas.Estimated 90% of ARRA Funds provided to states
ill b f h lth t t ti d
80% of funds have “strings attached”
will be for health, transportation, and education programs.
80% of funds have strings attached20% of funds can be spent as seen fit
Estimated Job Effect (1,000)
AL FL GA NC SC VA
51 206 106 105 50 93
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51 206 106 105 50 93
Source: www.recovery.govSource: www.recovery.gov
Virginia allocated $4,768 MillionAmount
Expenditure Type*Amount (Million) Types of Programs
Health and Human Resources
$ 1,833 Child Support Enforcement, CCDF Childcare, Drinking Water State Revolving Fund, Community Service Block ResourcesGrant, Foster Care, Adoption, Vocational Rehabilitation, Community Development Block Grant, Head Start Immunization, SNAP, Medicaid, Elderly Nutrition, Emergency Food Assistance Program Crime Victim Emergency Food Assistance Program, Crime Victim Assistance, Independent Living
Education $ 1 495 Title I Workforce Investment Act IDEA Dislocated Education $ 1,495 Title I, Workforce Investment Act, IDEA, Dislocated Workers, Technology, Work Study, School Lunch, Education for Homeless
Transportation $ 811 Highways and Bridges Transit Capital Grants Rail
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Transportation $ 811 Highways and Bridges, Transit Capital Grants, Rail Modernization
Source: www.stimulus.virginia.govSource: www.stimulus.virginia.gov
Virginia allocated $4,768 MillionAmount
Expenditure Type*Amount (Million) Types of Programs
Commerce and Trade
$ 309 Weatherization, State Energy Program, HOME, Public Housing, Homelessness Prevention, Unemployment TradeInsurance, Employment Service
Finance $ 218 Capital Planning and Improvements, BRACC, Conservation, Rolls Royce Incentive, Tobacco Settlement, Regional Jail Reimbursement, SRI
Natural Resources $ 81 Clean Water State Revolving Fund
Public Safety $ 21 Byrne Justice Assistance Grants, Violence Against Women, Internet Crimes Against Children, Crime Victim Compensation.
$
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TOTAL $ 4,768
Source: www.stimulus.virginia.govSource: www.stimulus.virginia.gov
2009 – 2011 ARRA Estimated Funding Amount by Locality2009 2011 ARRA Estimated Funding Amount by Locality
Virginia continues to receive information and guidelines on projects receiving ARRA funding. This map will beregularly updated as new information becomes available. For some programs all or a portion of the funding(e.g., FY 2011 allocation) has not yet been allocated by locality. Funds allocated regionally or for statewide
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(e.g., FY 2011 allocation) has not yet been allocated by locality. Funds allocated regionally or for statewideBenefit are not included in individual locality allocation amounts.
Uses of Virginia’s $4.8 Billion ARRA Funds
Medicaid reimbursement from increased federal share is $300 Medicaid reimbursement from increased federal share is $300 million
Drinking Water State Revolving Fund - $20.1 mil State Clean Water Revolving Loan Fund - $77 mil Weatherization Program - $32.7 mil Transportation - CTB approved round of projects on 5/21 Transportation - CTB approved round of projects on 5/21 K-12 Education - $1.3 billion of the $4.8
$500 million to local school districts following federal formulas (Title I and S i l Ed ti )Special Education)
$984 million – State Fiscal Stabilization Fund• $365 million to K-12 each year
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• $126.7 million to higher education each year
State Fiscal Stabilization Fund
One-time appropriation of $53.6 billionDOE will award $48.6 billion by formula to governors in
h f d i f iexchange for education reform commitmentsWill stabilize State and local budgets to minimize or avoid
d ti i d ti d th ti l bli ireductions in education and other essential public services Avert cuts and retain teachers and professors
S t d i ti ti d i f f iliti Support modernization, renovation, and repair of facilities Significant resources to support education, public safety and other
government services
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government services
State Fiscal Stabilization FundStates must apply to US DOE for funds with key assurances States must apply to US DOE for funds with key assurances
and information on the use of funds For FY09, FY10, FY11, States will maintain state support at FY06 , , , pp
levels Commitment to advancing education reform in:
I i t h ff ti• Increasing teacher effectiveness• Establishing state-wide education longitudinal data systems• Improving the quality of state academic standards & • Improving the quality of state academic standards &
assessments Baseline data that demonstrates the state’s current status in each
d i f
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education reform area Description of how state intends to use its stabilization allocation
State Fiscal Stabilization Fund
Within 2 weeks of approved application, DOE will provide 67% of SFSF allocation (in some
)cases 90%)
Full peer review of application before final allocations
Once SFSF awards, school districts may useOnce SFSF awards, school districts may use for any allowable purpose under the Elementary and Secondary Education Act
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(ESEA)
Timeline – Key Deadlines
PastPast
Feb 17 Obama signed ARRA
Feb 18 OMB releases Initial ARRA Guidance
Mar 6 Project Solicitation Deadline
April 3 OMB releases Updated ARRA Guidance
Upcoming
May 3 Federal Agency Performance Plans become available
May 20 Federal Agencies begin reporting competitive grants andMay 20 Federal Agencies begin reporting competitive grants and contracts
July 15 Begin reporting on use of Federal funds
O 10 1 t Q l i d S b l
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Oct 10 1st Quarterly report is due. Subsequent quarterly reports are due 10 days after the close of each quarter.
Source: www.recovery.govSource: www.recovery.gov Source: www.stimulus.virginia.govSource: www.stimulus.virginia.gov
Requesting and Receiving ARRA Funds
Methods of Fund AllocationMethods of Fund Allocation
FormulaMedicaid, State Fiscal Stabilization Fund, Highway Infrastructure Investment, Workforce Investment Act.
CompetitionNational Institutes of Health, National Science Foundation, Broadband Program, Green Jobs Act.
DemandCOBRA, Unemployment, Pell Grants, Food Stamps, Small Business Loans, TradeAct.
One-Time Social Security, Veterans, Supplemental Security Income.One-Time Disbursement
Social Security, Veterans, Supplemental Security Income.
Agency PlanEnviromental Clean up, National Parks, Defense and Veteran P
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Agency Plan Programs.
Future Guidance
Source Guidance
www.FederalReporting Reporting instructions and data .gov elements.
www.recovery.gov Agency specific:www.recovery.gov Agency specific
Objectives Guidance
Award terms Data metrics
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Unprecedented levels of transparency, oversight and accountability
Recovery funds are awarded and distributed in a prompt, fair, and reasonable manner.Public benefit of funds are reported clearly, accurately and timely:•How funds are used.•Descriptions and status reportsE ti t f j b d d t d•Estimates of jobs saved and created
•Estimates of tax increases averted
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Prevent instances of fraud, waste, error, and abuse.Source: www.stimulus.virginia.govSource: www.stimulus.virginia.gov
Unprecedented levels of transparency, oversight and accountability
Project avoid unnecessary delays and cost overruns Programs meet specific goals and targets:Programs meet specific goals and targets:•Certification by Governor or local officials.•Pubic access to contract and grant information.•Provisions for federal oversight, review, and audits.•Access by federal inspectors and Recovery Act Accountability and T B dTransparency Board.
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Disbursing and Reporting ARRA Funds
Entities must separately account for funds received directly or indirectly.
Entities must track how funds are spent. (Projects, subcontractors, services, jobs created, wage rates, etc.)
Entities receiving funds directly and has subcontractors or awards sub-grants, must register with the Central Contractor Registration databasedatabase.
Capital projects must use American Iron, Steel and Manufactured G d
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Goods.
Actions to ensure compliance with ARRA requirementsq
OMB Guidance
A S ifi G idAgency Specific Guidance
State Auditors and Independent Public Accountants pfor A-133
GAO reportsGAO reports
State Comptrollers for reporting
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Internal Controls“A robust system of internal control specifically designed to deal with the unique and complex aspects of the Recovery Act funds will be key to helping management of the complex aspects of the Recovery Act funds will be key to helping management of the states and localities achieve the desired results.” -GAO-09-580
Enhancing Internal Controls
Element Suggestions
Control Environment
Appointment of “Recovery czars” or boards or working groups focused on the Recovery ActEnvironment on the Recovery Act.
Risk Assessments Results of recent audits and Single Audit reports.
Control Activities Effective implementation of documented policies, procedures and Control Activities guidance.Information and Communication
Developing guidance related to ARRA and submitting information to state agencies.
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Monitoring Budget Director meeting with heads of programs, Surveys, Oversight boards or committees, sub-recipient monitoring.
Questions Has your government organized a program management office and Has your government organized a program management office and
established vision, strategy, and methodology? Has your government assessed existing processes, systems, and
controls for administering federal funding against ARRA expectations?
I t d t t k d l f d Is your government prepared to track and resolve performance and compliance issues?
Have year-end ARRA financial reporting requirements been Have year-end ARRA financial reporting requirements been identified ?
Has your government complied with requirements to report the
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y g p q pstatus of projects or activities for which recovery funds were obligated and expended?
Illustration--Department of Education$44 Billion Available in April 2009 $49 Billion Available late in 2009$44 Billion Available in April 2009 $49 Billion Available late in 2009
Assurances Metrics
Math and Reading NAEP scores
College- and career-ready
Math and Reading NAEP scores
Action steps to improve assessments
Measures for ELLs and disabled test in math and ELAstandards and ELA
# and % students who graduate and complete one year of college
Pre-K-to higher education data systems meeting
Statewide data system includes America COMPETES Act
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America COMPETES Act
All teachers receive timely data and estimates of impact on student achievement
Illustration--Department of Education, ContinuedAssurances MetricsAssurances
# and % teacher in highest/lowest-poverty schools who are highly qualified
Teacher effectiveness and distribution
qualified
# and % teachers rated at each level in each LEA’s teacher evaluation system
# and % LEA teacher e aluation# and % LEA teachers evaluation systems required student achievement outcomes
S h l d t ti i i
Intensive support and
Schools demonstrating gains in achievement, closed or consolidated
Schools initially in bottom 5% that d t t i i t d t
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ppeffective interventions
demonstrate gain in student achievement
Schools that made progress in math and ELA
What to Look For!
Guidance from OMB and Federal Agencies continuing to be developed Still unanswered questions
GAO Study of the Recovery Act As Initial Implementation Unfolds In States and Localities,
Continued Attention to Accountability Issues Is EssentialSt t C States Concerns
Resources to use
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Single Audit Implications
Single Audit Challenges associated with ARRASingle Audit Challenges associated with ARRA
New programs and recipientsLack of management controls and accounting systems to ensure compliance with regulations
d bj tiand objectives.
Sudden increase in funds
Funds may exceed previously effective management controls and accounting systems. M l t i d f Si l dit f titi Sudden increase in funds May also trigger need for Single audit for entities not previously meeting the threshold.Requires implementation of new controls and
Extensive accountability and transparency
procedures, but lacks funds to management and oversight entities for accountability and transparency.
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Inject funds into Economy Pressure to spend funds quickly increases risk.
Source: GAO-09-580Source: GAO-09-580
Use of Single Audit
U f i k tUse for risk assessment
Use for monitoring programs
Assign separate ARRA CFDA
E l ti f “hi h i k” d t Evaluation of “high risk” programs and grantees
Separate reporting on SEFA (including subrecipient)
Federal audit clearinghouse to display all ARRA findings (will be all Single Audit findings including ARRA)
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OMB Compliance Supplement Annual Update released May 26, 2009 Annual Update released May 26, 2009
Effective for fiscal years beginning after 6/30/08 Normal update for new programs, deleted programs, and modified
i tprogram requirements
New Appendix VII – Highlights and Addenda Look for future addenda including new reporting requirementsg p g q Be alert for Recovery Act Awards Impact on CFDA # New clusters of programs (to be updated monthly) Major program determination Multiple sources to determine compliance requirements
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Multiple sources to determine compliance requirements SEFA and Data Collection Form
Updated Compliance Supplement
ARRA Guidance in Appendix VII First step, not all compliance requirements For 2009
• Review award documents• Check OMB website for addenda• Check OMB website for addenda• Use framework from parts 3, 4, 5, and 7
New CFDA # is optional, not mandatoryNew CFDA # is optional, not mandatory • If ARRA funds in current CFDA #, auditor must
document if ranked as low risk
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Updated Compliance Supplement
Cluster guidance• Will be updated monthly
If CFDA i l d d i l t th l t• If new CFDA included in cluster, then cluster becomes major
SEFA and Data Collection Form – must separately p yidentify ARRA funds, regardless of whether a new CFDA # is created
R i i t t di l t b i i t Recipients must disclose to subrecipients any portion of funding that relates to ARRA funds
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OMB Implementing Guidance
Latest round of guidance April 3 2009 (172 pages) Latest round of guidance April 3, 2009 (172 pages) Supplements, amends and clarifies the initial guidance issued by
OMB on February 18, 2009y , Section 1 – General Information Section 2 – Agency Plans and Public Reporting Section 3 – Governance, Risk Management and Program Integrity Section 4 – Budget Execution S i G d C i A Section 5 – Grants and Cooperative Agreements Section 6 – Contracts Section 7 Loans and Loan Guarantees
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Section 7 – Loans and Loan Guarantees
OMB Implementing Guidance Appendices Appendices 1 – Detailed Instructions on Transmitting Materials 2 – Agency Recovery Related Web Pagesg y y g 3 – Agency and Program Data Elements 4 – Risk Considerations 5 – N/A 6 – Agency Risk Template
7 C il E i t l Q lit NEPA R ti G id 7 – Council on Environmental Quality NEPA Reporting Guidance 8 – Interim FAR Rules 9 – Interim Final Guidance for Federal Financial Assistance
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9 – Interim Final Guidance for Federal Financial Assistance http://www.recovery.gov/sites/default/files/m09-15.pdf
Appendix 9 – Interim Final Guidance Section 1512(c) of ARRA requires quarterly reporting on the use of Section 1512(c) of ARRA requires quarterly reporting on the use of
funds Data elements published in Federal Register on 4/1/09 Total amount of Recovery funds received Amount expended or obligated to projects or activities Detailed list of projects or activities for which funds expended or obligatedDetailed list of projects or activities for which funds expended or obligated
• Name of project or activity• Description of project or activity
f• Evaluation of completion status• Estimate of jobs created or retained• For infrastructure – purpose, total costs and rationale, and contact
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Detailed information on subcontracts or sub-grants
Appendix 9 – Interim Final Guidance
Section 1512 (h) of ARRA requires registration in the Central Section 1512 (h) of ARRA requires registration in the Central Contractor Registration database at www.ccr.gov
Section 1605 of ARRA requires use of American iron, steel and q ,manufactured goods for construction type projects
Section 1606 of ARRA requires payment of Davis-Bacon Act wage trates
To maximize transparency and accountability, OMB Circular A-102 (Common Rule), recipients agree to maintain records that identify (Co o u e), ec p e s ag ee o a a eco ds a de yadequately the source and application of ARRA funds
Guidance in part 176 on responsibilities to track, account, and report t ti d t dit d t ti d t i
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transactions and to prepare audit documentation and reports in accordance with OMB Circular A-133
GAO Study of ARRA RECOVER ACT: As Initial Implementation Unfolds in States and RECOVER ACT: As Initial Implementation Unfolds in States and
Localities, Continued Attentions to Accountability Issues is Essential Recovery Act requires GOA to do bimonthly reviews of the use of funds y q y
by selected states and localities 16 states and D.C.
VA t i l d d b t th ill b i i t f t t t l t d VA not included, but they will be reviewing reports from states not selected 90% of funds to states and localities in FY09 will be through health,
transportation and education programsp p g 3 largest programs
• Federal Medical Assistance Percentage grant awards
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• Highway Infrastructure Program• State Fiscal Stabilization Programs
State Concerns with ARRA FundingIdentified by GOA Study
Lack of Recovery Act funding provided for accountability and oversight How to determine jobs created and retained under the Act M difi ti t ti t t t k ARRA f d Modifications to accounting systems to track ARRA funds Differences in software Outdated systems Outdated systems Lack of financial system grant module
Identifying and tracking ARRA funds to subrecipients, local y g g p ,governments, and other non-state entities Ability of these entities to separately tag, monitor, track & report
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Concern over the States being held accountable for these entities
Web Resources
www.recovery.gov Contains links to Federal Agencies’ Recovery.gov websites
www.stimulus.virginia.gov
http://blogs.cbh.com/govserv/ http://blogs.cbh.com/govserv/
Virginia State Comptroller’s Stimulus Webpage www doa virginia gov/Stimulus/Stimulus Information cfm www.doa.virginia.gov/Stimulus/Stimulus_Information.cfm
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Virginia ARRA Accomplishments to Date
G t bli h d ARRA I l t ti T h i d b Governor established an ARRA Implementation Team, chaired by Wayne Turnage, Chief of Staff. Includes members with subject matter expertise in each functional area covered by ARRAmatter expertise in each functional area covered by ARRA
Governor provided required ARRA certification to begin receipt of funds on March 3, 2009. Other individual program certifications funds on March 3, 2009. Other individual program certifications required on a more piecemeal basis
A Web site was hosted to solicit requests from the state agencies, A Web site was hosted to solicit requests from the state agencies, localities, interest groups, and the public at-large. More than 9,000 projects were submitted to the website totaling close to $466 billion
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Virginia ARRA Accomplishments to Date
Web site has transitioned from a portal for data entry to a site that Web site has transitioned from a portal for data entry to a site that provides information to citizens and tracks the allocation of ARRA funds in Virginia by locality and eventually by program. Website g y y y y p gaddress is: http://www.stimulus.virginia.gov The website is updated at least weekly and includes information on
Competitive Grants available under the ARRA.Regular meetings with the VACo and Virginia Municipal LeagueARRA I l t ti T b ki t ti ARRA Implementation Team members are making presentations
on stimulus to a variety of groups. Regular meetings with local governments businesses legislators and citizens
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governments, businesses, legislators, and citizens.
Source: www.stimulus.virginia.govSource: www.stimulus.virginia.gov
CBH Government Service Blog
http://blogs.cbh.com/govserv/
f Provides ARRA information concerning:• Administrative regulations Administrative regulations
and guidance• Activities of Professional
organizationsorganizations• Stimulus related news
articles
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