[Federal Register Volume 75, Number 53 (Friday, March 19, 2010)]
[Notices]
[Pages 13265-13268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6006]
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ELECTION ASSISTANCE COMMISSION
Request for Public Comment on Maintenance of Expenditure (MOE)
Proposed Policy as Amended on 2-19-10
AGENCY: United States Election Assistance Commission.
ACTION: Notice: Request for Public Comment.
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SUMMARY: The EAC seeks public comment on a Maintenance of Expenditure
(MOE) Proposed Policy as Amended on 2-19-10. This advisory would
supersede Advisories 07-003 and 07-003A and fulfill the Election
Assistance Commission's (EAC) ongoing responsibility to provide
information on the management of Federal funds provided under the Help
America Vote Act (HAVA). EAC issues this notice according to a policy
adopted on September 18, 2008 that requires EAC to provide notice and
an opportunity for public comment on, among other things, advisories
being considered for adoption by the U.S. Election Assistance
Commission.
DATES: Comments must be received by 5 p.m. EST on April 19, 2010.
ADDRESSES: Comments may be submitted: Via e-mail at
[email protected], and
Via mail addressed to the U.S. Election Assistance Commission, 1201
New York Ave, NW., Suite 300,
[[Page 13266]]
Washington, DC 20005, or by fax at 202/566-3127.
Commenters are encouraged to submit comments electronically and
include ``MOE'' in the subject line, to ensure timely receipt and
consideration. All comments must be received by the EAC by the date
specified above.
SUPPLEMENTARY INFORMATION: The following is the complete text of the
Maintenance of Expenditure (MOE) Proposed Policy as Amended on 2-19-10.
Notice: Request for Public Comment on Maintenance of Expenditure (MOE)
Proposed Policy as Amended on 2-19-10
Policy Overview Statement
The Help America Vote Act of 2002 (HAVA) requires States to meet an
annual Maintenance of Expenditure (MOE) (also known as Maintenance of
Effort) based on State expenditures for activities allowable under
Title III of HAVA in the fiscal year prior to November 2000. HAVA
requires that States establish a baseline spending level and then meet
that spending level each year HAVA section 251 funds are spent by the
State. The following questions and answers provide details on what is
required to meet HAVA's MOE requirement and how the U.S. Election
Assistance Commission (EAC) will work with States to ensure they have a
realistic, auditable plan for managing MOE requirements.
1. What Is the Purpose of the Maintenance of Expenditures (MOE)
Requirement Mandated by HAVA?
The purpose of MOE is to ensure that recipients of Section 251
funds (requirements payments) use the payments to meet the added
requirements placed on States by HAVA, while maintaining the level of
non-Federal funding that was available for those activities during the
fiscal year ending prior to November 2000.
2. Where in HAVA Is the MOE Requirement?
Section 254 of HAVA details what must be in the State plan. An MOE
description is one of the pre-conditions for receipt of a requirements
payment disbursement. Section 254(a)(7) requires States to identify in
their plans:
``[H]ow the State, in using the requirements payment, will maintain
the expenditures of the State for activities funded by the payment at a
level that is not less than the level of such expenditures maintained
by the State for the fiscal year ending prior to November 2000.'' 42
U.S.C. 15404(a)(7) (emphasis added).
3. What Does This MOE Policy Do?
The purpose of this policy is to facilitate State compliance with
the maintenance of effort (MOE) requirement in HAVA.
This policy supersedes EAC Advisory drafts 07-003 and 07-003A. This
policy provides guidelines and assistance for States to develop
detailed, voluntary plans for identifying a baseline MOE level and
maintaining that level in subsequent years.
4. Who Is Covered by This Policy?
This policy applies directly to the 50 States, four U.S.
Territories and the District of Columbia (referred to as States) that
are eligible to receive Requirements Payments. This policy may also
impact ``lower tier'' recipients indirectly (see below). However,
States are ultimately responsible for demonstrating compliance with
MOE.
5. What Does the EAC Mean by the Term ``Lower Tier'' Recipients?
A lower tier recipient is political subdivision of a State.
Depending on the State, lower tier recipients may include, but are not
limited to, counties, cities, townships, and other jurisdictions.
6. Do States Need To Account for Lower Tier (Local) Spending During the
Base Year in Calculating MOE?
MOE tracks State expenditures on a prescribed set of Federal
election activities (see question 7), which includes any funds
appropriated by the State to lower tier entities to support those
activities. Under this MOE policy, States may exclude lower tier
spending from MOE when the funds used by the lower tier entities are
not derived from a State appropriation or expenditure.
7. What Types of Expenditures Must Be Used To Calculate the MOE
Baseline Amount and Are Eligible To Count Towards Our Annual MOE
Contribution?
States must use all election expenditures that are allowable under
Section 251 of HAVA, and that were funded directly by the State, or
through a State appropriation to a lower tier entity in the base year,
to calculate the baseline MOE. All allowable uses under Section 251 of
HAVA, including: (1) Purchase of voting equipment; (2) development and
operation of a statewide voter registration list; (3) development and
implementation of provisional voting for Federal elections; (4)
provision of information to voters at the polling place on election
day; (5) verification of information provided by persons seeking to
register to vote; and, (6) improvement of the administration of
elections for Federal office should be included in the baseline MOE.
For example, State X appropriates $10 million for election
activities eligible for funding under section 251 of HAVA. $2 million
of the $10 million was appropriated to county Y to provide Federal
provisional ballots on Election Day. The State's MOE is $10 million
because it includes all funds appropriated to counties for that year as
part of its aggregate MOE.
8. When Would the EAC Like To Receive the Voluntary State MOE Plans and
What Is the Process for Submission?
EAC would like to receive MOE plans that can be submitted outside
of the State plan by December 1, 2010. Once your plan is received,
EAC's grants department will work with your State to develop your MOE
plan. EAC's hope is to have MOE plans developed by each State that
chooses to participate in the process in place by January 31, 2011. EAC
will provide technical assistance, including easy to use templates and
checklists for developing State MOE plans, by early summer 2010.
9. Does This Policy Include a Set of Uniform Requirements That States
Must Comply With To Establish a Baseline MOE and Meet Annual MOE
Requirements?
While this policy does call for a plan with specific elements for
establishing, maintaining and reporting on MOE, EAC recognizes that the
financing and administration of elections includes a particularly
diverse set of practices that vary from State to State. As such, this
policy calls for development of State-derived, flexible plans designed
to meet each individual State's circumstances.
10. Our State Plan Already Acknowledges That We Will Meet the MOE
Requirements. Do We Still Need To Submit the MOE Plan Discussed in This
Policy?
All States have acknowledged in their State plans that they intend
to meet their MOE requirements. However, these statements do not
contain information sufficient enough to guide an audit of how the
State is meeting its MOE requirement. States adoption of detailed MOE
plans will help ensure that States capture an accurate, defensible
baseline MOE and are meeting annual MOE requirements. The plans will
set the basis for auditing MOE and will help ensure that EAC resolution
of any State-specific audit finding associated with MOE will be
[[Page 13267]]
consistent with how that State has proposed to meet its MOE
requirement. Submission of the MOE plan described in this document is,
however, voluntary and may not be the only means of satisfying section
254a(7) HAVA.
11. What Should a State Include in Its MOE Plan?
A State's MOE plan should:
1. Provide the date parameters for the `fiscal year ending prior to
November 2000' as described in HAVA. This base year will be used to set
the baseline MOE for the State.
2. Provide the specific cost factors that make up the baseline MOE,
or proposed alternative method(s) for determining the baseline MOE.
3. Establish an MOE baseline dollar level that is an aggregation of
MOE from all eligible jurisdictions.
4. Require collection of annual MOE levels from all eligible
jurisdictions and outline a plan and timeline for collecting this
information.
5. Describe the back-up documentation that States and eligible
lower tier jurisdictions must maintain and make available for
inspection by EAC upon request in order to substantiate the State's MOE
claim. Documentation must include a tracking sheet that shows MOE
baseline and annual MOE levels at the State and eligible lower tier
recipient levels.
6. Clearly state the roles and responsibilities of both State and
eligible lower tier fund recipients for reporting MOE and keeping
appropriate documentation to substantiate or validate yearly MOE
levels. Note that both States and eligible lower tier recipients should
do an annual certification of their MOE contribution.
12. What Is a Baseline MOE?
The baseline MOE is a dollar amount that captures the level of
State spending for a particular program or activity in the base year.
In the case of HAVA, the baseline is the State spending level for a set
of election's activities (see question 11 below) that was in place in
the fiscal year ending prior to November 2000.
13. What Dates Should a State Use To Calculate MOE?
HAVA requires that States use the fiscal year ending prior to
November 2000 to determine the MOE baseline. States may choose the
Federal fiscal year, which runs from October 1, 1999 through September
30, 2000; or the State fiscal year, if it is different from the Federal
fiscal year.
14. How Do We Know If Our State or Lower Tier Recipient Have an MOE
Requirement in a Given Year?
Each State has an MOE obligation in every fiscal year that it
spends HAVA Requirements Payments funds. Eligible lower tier recipients
may need to meet MOE in any fiscal year in which they receive
Requirements Payments through the State, dependent upon how the State
decides it wants to meet it's annual MOE contribution.
15. What Are the Reporting Requirements Associated With MOE Once a
State Has an MOE Plan on File With the EAC?
Pursuant to section 254(a)(12) and section 258(3) of HAVA, each
State is required to submit as part of its annual report a description
and analysis of how it has met or exceeded its baseline MOE for the
preceding fiscal year. Appropriate back-up documentation, as described
in the State's MOE plan, must be kept on file and made available to EAC
staff during site visits or to auditors or other officials during an
audit or investigation.
16. Should Our State Provide a Single, Aggregate Baseline Amount for
MOE, or a Series of MOE Baseline Amounts for Each Eligible Local
Jurisdiction?
EAC's requirement is that States provide a single baseline and
report an annual aggregate MOE amount. However, because States will
have to substantiate MOE levels, tracking MOE for all eligible lower
tier entities that are required by the State to contribute to the MOE
is will probably be necessary.
17. Do States Have Any Flexibility in How Much Is Spent Annually in
Each of the Cost Categories Identified by the Plan, or Do They Have To
Maintain Expenditures in Each of the Categories?
A State's MOE plan should track expenditures by category to
identify the MOE baseline and annual contributions. However, this
policy does not require States and eligible lower tier fund recipients
to maintain specific expenditures within the identified cost
categories. This policy clarifies that only the aggregate State MOE
level needs to be met on an annual basis.
In meeting the MOE baseline of spending, it is left to the State to
determine how that baseline is met, as an aggregate. For example, a
State spent HAVA 251 funds in 2008. In that fiscal year, that State may
have chosen to expend more of its State funds on its voter registration
database and less of its State funds on providing information to voters
at the polls than it did in the fiscal year ending prior to November
2000. As long as the total baseline MOE is met by adding up all the
categories, as an aggregate, individual spending for a single category
does not have to equal the exact amount spent on that category in the
fiscal year ending prior to November 2000.
18. What Happens If Our State Fails To Meet Its MOE?
Any audit findings related to a State not meeting its MOE
requirements will be dealt with through EAC's Audit Resolution Process.
All current and future audits and compliance site visits that review
MOE will be guided by the State's MOE plan, from the point plan is
accepted by the EAC forward.
19. How Can States Establish the Baseline MOE for Lower Tier Recipients
Where Those Jurisdictions Lack the Records or Detailed Accounting
Needed To Determine the Level of Spending on Elections in the Base
Year?
States may propose an alternative measure for estimating spending
in the base year, but only after demonstrating that accurate records
are not attainable. Some alternative measures might include budgeted or
appropriated amounts, contract amounts, or similar means compiled from
available records from the base year. States might also estimate
spending based on average increases over time, but must provide
adequate justification and documentation to support the estimate.
20. Do These States Have To Collect MOE Information Every Year From
Eligible Lower Tier Recipients?
Each State has the ability to determine how it wants to meet its
MOE obligation. Once the baseline is established by the State, by
identifying all expenditures with State funds in the base year that
would have been allowable costs under HAVA, the State will need to
determine how it would like to meet that MOE obligation on an annual
basis. If lower tier entities are enlisted by the State to help meet
MOE (similar to how some counties contribute to State match obligations
for Requirement Payments) those enlisted entities will have to keep
appropriate documentation to substantiate their MOE contributions. EAC
will provide templates that allow for quick recording and roll-up of
this information to the State level.
[[Page 13268]]
21. How Should States Address Capital Expenditures in the Base Year?
For Example, Several Counties Purchased Equipment in the Base Year,
Which Appears To Establish an Unreasonable MOE Baseline for Those
Jurisdictions
For purposes of establishing the baseline MOE, HAVA does not make a
distinction between capital expenditures and recurring costs associated
with election administration that were incurred in the base year.
However, when calculating MOE baselines, capital expenditures may be
expensed in a manner consistent with IRS depreciation tables, over the
expected life of the equipment purchased.
22. How Do States Establish a Baseline MOE When the Year Before FY 2000
Was Not an Election Year and the Election Administration Costs in That
Year Were Lower Than in an Election Year?
HAVA is clear that the timeframe for setting the baseline MOE is
the year before November 2000.
23. Does the EAC Have Any Suggestions for How To Enforce MOE
Requirements With Eligible Lower Tier Fund Recipients?
States should have several mechanisms available to ensure
compliance with MOE requirements. Sub-grant agreements should be
modified to contain MOE requirements and instructions. Any agreements
to buy and transfer equipment or services to lower tier jurisdictions
should also contain such a requirement. Finally, States, as the legal
recipient of HAVA funds, have authority to enforce MOE requirements
through administrative action which could include withholding future
requirement payments.
24. Can You Provide an Example of Another Federal Agency That Requires
Tracking of MOE at This Detailed Level?
State and local education agencies are required to go through a
similar process to meet their MOE requirements for Federal funding from
the U.S. Department of Education.
25. What Type of Assistance and Training Can the States Expect From the
EAC To Help Implement This Policy?
EAC grants staff will be available to provide guidance to States on
their MOE plans. In addition, EAC plans to provide technical assistance
to develop tools and templates to help capture and track MOE. EAC will
also publish sample MOE plans from States willing to share their work
with others as a best practices guideline.
26. What Authority in HAVA Allows EAC To Implement This Proposed
Policy?
Section 254(a)(7) of HAVA requires States to include in their State
plan an explanation of how they will meet their MOE obligations.
Submitting a State plan and all of its required sections is a
precondition for receiving a requirement payment. Section 258(3)
requires States to submit a yearly report that includes an analysis and
description of the activities funded with Section 251 funds, as well as
how activities conform to the State Plan under Section 254. This policy
defines MOE and provides States with a voluntary set of guidelines and
practices for developing a baseline MOE and tracking yearly progress
towards meeting that obligation. Section 202(4) of HAVA requires that
EAC provide information and training on the management of payments and
grants provided through HAVA.
Thomas R. Wilkey,
Executive Director, U.S. Election Assistance Commission.
[FR Doc. 2010-6006 Filed 3-18-10; 8:45 am]
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