1. Administrative Costs of Recovery Act Activities Arizona Issues D. Clark Partridge State Comptroller

2. American Recovery and Reinvestment Act (ARRA) Purposes Recovery Accountability Transparency

3. American Recovery and Reinvestment Act (ARRA) New Centralized Requirements Governors Office Oversight Section 1512 Reporting Auditing Other

4. ARRA Issues Barriers to ARRA Success Speed of Implementation Unprecedented Accountability & Transparency New State responsibilities No Administrative $ Existing OMB A-87 didnt accommodate OMB Responded with May 11, 2009 Guidance Provides.5% for Administrative Costs Allows for Estimates for Central Administrative Costs Recognized need for quick implementation

5. Current ARRA Issues Again, traditional OMB A-87 model not responsive to speed and demands--Program Specific New overarching requirements that impact/benefit ARRA programs/grants Need to apply fundamental concepts of cost principles of OMB A-87 AND Meet Requirements of ARRA

6. Potential Solution Develop model to: Appropriately Charge or Allocate Costs to ARRA Grant Programs Consistent with OMB A-87 concepts. Fairness and Equity Efficiency and Effectiveness Demonstrate Benefit to Federal Programs/ARRA Appropriately and Timely Implement ARRA

7. Potential Solution Develop Budgets for Central ARRA requirements and services Calculate Tentative Rate-Use Budgeted ARRA $ as base Charge ARRA Grants based on Tentative Rate & Deposit in Contingency Fund Demonstrate Benefit to ARRA Reconcile to Actual Costs Report Annually to DHHS-DCA and agree upon disposition of any remaining Contingency $

8. Conclusion Need to refine model Work with OMB & DHHS-DCA Potential Impact of other ARRA environmental factors and developments