PRESENTED BY: BELINDA RINKER, JD SENIOR ADVISOR, OFFICE OF HEAD START Non-Federal Share...

PRESENTED BY:BELINDA RINKER, JD

SENIOR ADVISOR, OFFICE OF HEAD START

Non-FederalShare

belinda.rinker@acf.hhs.gov

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Definition of Non-Federal Share

Non-Federal Share: That portion of the total costs of the program provided by the grantee agency in the form of in-kind donations or cash match received from third parties or contributed by the agency. In-kind contributions must be provided and cash expended during the project period along with Federal funds to satisfy the matching requirements.

Criteria for Acceptable Non-Federal Share

To be accepted, all cost sharing or matching contributions, including cash and third party in-kind, shall meet all of the following criteria: Are verifiable from the recipient's records; Are not included as contributions for any other federally-assisted

project or program; Are necessary and reasonable for proper and efficient

accomplishment of project or program objectives; Are allowable under the applicable cost principles; Are not paid by the Federal Government under another award,

except where authorized by Federal statute to be used for cost sharing or matching;

Are provided for in the approved budget; and Conform to other provisions of this part, as applicable.45 CFR §74.23 and 45 CFR §92.24

Sources of Non-Federal Share

In-Kind: Property or services that benefit a grant supported project or program and are contributed by non-Federal third parties without charge to the grantee. In-kind contributions may consist of the value of real property and equipment and the value of goods and services directly benefiting the grant program and specifically identifiable to it. In-kind match is counted for the period when the services are provided or when the donated goods are received and used.

Cash Contributions: The grantee's cash outlay, which is generated by the grantee or donated by a third party, and is expended to fund allowable program costs. Cash match counts toward the non-Federal share requirement when expended, not when donated to or generated by the grantee.

Fiscal and Non-Federal Share Citations

45 CFR Part 74.23 Institutions of Higher Education, Hospitals, Other Non-Profit

Organizations, and Commercial Organizations45 CFR Part 92.24

States, Local Governments and Indian Tribal GovernmentsPerformance Standards

All Grantees Mostly 45 CFR 1301

Improving Head Start for School Readiness Act of 2007 All Grantees Much in Sec. 642

Allowable Cost Requirement

Allowable Cost: Third party in-kind contributions shall count toward satisfying a cost-sharing or matching requirement only where, if the party receiving the contribution were to pay for them, they would be an allowable cost. Allowable costs are determined by the tests of reasonableness, necessity and allocability as defined in Title 2 of the Code of Federal Regulations (2 CFR 220, 2 CFR 225, and 2 CFR 230), commonly called the cost principles.

Cost Principle Citations

2 CFR Part 220 Cost Principles for Educational Institutions

2 CFR Part 225 Cost Principles for State, Local, and Indian Tribal

Governments2 CFR Part 230

Cost Principles for Non-Profit (Commercial) Organizations48 CFR Subpart 31.2

Cost Principles for For-Profit Organizations

45 CFR §1301.20(b): The non-Federal share will not be required to exceed 20 percent of the total costs of the program.

Head Start Act

Sec. 640(b) Financial assistance extended under this subchapter for a Head Start program shall not exceed 80 percent of the approved costs of the assisted program or activities, except that the Secretary may approve assistance in excess of such percentage if the Secretary determines that such action is required in furtherance of the purposes of this subchapter.

Method 1: (80/20)

Method 2: General

Federal Funds x .25 = Non-Federal Share

$2,000,000 (Federal Funds) x .25 =

$500,000 (Non-Federal Share)

Total Grant =$2,500,000

Federal Funds ÷ Federal Share = Total Grant – Federal Funds = Non-Federal Share

$2,000,000 ÷ .80 = $2,500,000 - $2,000,000 =

$500,000 $2,000,000 ÷ .85 = $2,352,941 - $2,000,000 = $352,941

Use with a waiver or Non-Federal share over 20%

Calculating Non-Federal Share

Allowable Non-Federal Share Costs

Allowable Cost: Third party in-kind contributions shall count toward satisfying a cost-sharing or matching requirement only where, if the party receiving the contribution were to pay for them, they would be an allowable cost.

Cash Contributions: The grantee's cash outlay, which is generated by the grantee or donated by a third party, and is expended to fund allowable program costs. Cash match counts toward the non-Federal share requirement when expended, not when donated to or generated by the grantee.

Elements of an Allowable Cost

Reasonable for the performance of the award.Allocable to the award.Conform to any applicable limitations or exclusions. For

example: Use of Head Start funds to assist, promote or deter union organizing. Head

Start Act, Sec. 644(e). Alcoholic beverages. 2 CFR Part 230, Appendix B(3).

Consistent with policies and procedures that apply to both Federally funded and other activities.

Accorded consistent treatment.Meet generally accepted accounting principles (GAAP).Not included as a cost or cost sharing for any other Federally

funded program.Adequately documented.

2 CFR Part 230, Appendix A(2)

Reasonableness of Costs

A cost is reasonable if, in its nature or amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the costs. Generally recognized as ordinary and necessary. Exemplifies sound business practices, arms length bargaining,

complies with laws, rules, regulations and grant awards. Whether the individuals involved acted in meeting their

responsibilities with prudence under the circumstances. Significant deviation from established practices of the

organization. 2 CFR Part 230, Appendix A(3)

Allocable Costs

A cost is allocable to a particular cost objective, such as a grant, contract, project, service, or other activity, in accordance with the relative benefits received. A cost is allocable to a Federal award if it is treated consistently with other costs incurred for the same purpose in like circumstances and: Is incurred specifically for the award. Benefits both the award and other work and can be

distributed in reasonable proportion to the benefits received, or

Is necessary to the overall operation of the organization, although a direct relationship to any particular cost objective cannot be shown. 2 CFR Part 230, Appendix A(4)

A prudent person is attentive, vigilant, cautious, perceptive, and generally governed by common sense. ND State Government Website.

Prudent

–adjective 1. wise or judicious in practical affairs; sagacious; discreet or circumspect; sober.

2. careful in providing for the future; provident: a prudent decision.

Dictionary.com

Primary Benefit Analysis

OHS – PC – A – 077

Is the value of parent involvement in a Head Start program an allowable cost for in-kind match?

To determine if a parent involvement activity is allowable as an in-kind match a Head Start program should ask these questions:1. Does the parent involvement activity primarily benefit the parent or

child? If the answer is yes, then the activity is not allowable as an in-kind match.

2. Does the parent involvement activity provide a good or service to benefit the program? If the answer is yes, then the activity is allowable as an in-kind match.

Other Policy Clarifications

Allowability of parent activities PC – A – 022 (valuation and record keeping) PC – A – 033 (walking to and from Center) PC – A – 040 (home-based curriculum activities) PC – A – 049 & 058 (parent transportation of home

based children to socialization activities) PC – A – 060 (having lunch with child) PC – A – 076 (babysitting for a parent volunteer) PC – A – 078 (volunteering for governing body or policy

council)

DocumentCarefully and Completely

Budget EffectivelyMonitor Monthly

Managing Non-Federal Share

Disallowance of Non-Federal Share

Funded Federal Share: $ 800,000 Non-Federal Share: 200,000 Total Grant Award: $1,000,000

Actual Federal Share Spent: $ 800,000 Allowed Non-Federal Share: 180,000 Actual Grant Amount: $ 980,000

Maximum Federal Share $980,000 x .80 = $784,000

If waiver in place, multiplier changes to reflect actual federal share.

Disallowance $800,000 - $784,000 = $16,000

See PI-HS-12-02: Non-Federal Share Issues

Waivers of Non-Federal Share

Grantees must actively seek to generate Non-Federal Share through in-kind donations and cash match.

Grantees facing challenges in generating necessary Non-Federal Share can submit a written request for waiver (reduction) of Non-Federal Share. Can be submitted with the proposed annual budget. May also be submitted during the program fiscal year. Waiver only applies to one budget period.

Waiver requests can be re-submitted for subsequent budget periods.

Waiver Criteria

The lack of resources available in the community that may prevent the Head Start agency from providing all or a portion of the Non-Federal contribution that may be required.

The impact of the cost the Head Start agency may incur in initial

years it carries out such program.

The impact of an unanticipated increase in the cost the Head Start agency may incur to carry out such program.

Whether the Head Start agency is located in a community adversely affected by a major disaster.

The impact on the community that would result if the Head Start agency ceased to carry out such program.Head Start Act, Sec. 640(b)(1)-(5)

Questions and Comments