Fiscal Guidelines

Purpose of Fiscal Guidelines

  • Clarify the purpose and use of Nita M. Lowey 21st Century Community Learning Centers (21CCLC) funds
  • Provide guidance to subgrantees (DOE and non-profit organizations) in implementing fiscal processes and fiscal controls

Federal Funding Authority

The Elementary and Secondary Education Act – Title IV Part B – Catalog of Federal Domestic Assistance (CFDA) number 84.287.

HIDOE Funding Approval

Applications for 21CCLC grants are competitive in nature. Applications will be released by the Hawaii Department of Education (HIDOE) based on the availability of federal funds. Full applications and attachments will be reviewed and scored by a peer review panel selected by the HIDOE based on the criteria outlined in the Request for Proposals (RFP). Awards are announced at the conclusion of the scoring process. The Approved Application is the contract between the subgrantee and HIDOE.

Fiscal Requirements

The 21CCLC subgrantee must follow:

  • Fiscal requirements found in EDGAR and the Uniform Grant Guidance. Further Guidance can be found at: https://www2.ed.gov/policy/fund/reg/edgarReg/edgar.html;
  • Fiscal requirements issued through HIDOE; and
  • All components of the Approved Application unless deviations are approved in writing by HIDOE 21CCLC project manager.

Program ID

21CCLC subgrantees receive funds in their designated Program IDs annually. These funds will be monitored in the HIDOE Aukahi FMS system.

Responsibilities of the Lead Applicant/Authorizing Agent

The Lead Applicant/Authorizing Agent is responsible for administering the Federal funds awarded and ensuring the allowability of approved expenditures. In addition, the Project Director and Fiscal Agent are identified in the Approved Application. These three roles are considered by HIDOE 21CCLC as Key Program Leadership (see Protocols for Key Program Leadership Transition in the event of key leadership personnel changes).

Fiscal controls are best managed through a collaborative approach between the Project Director and the Fiscal Agent under the guidance of the Lead Applicant/Authorizing Agent. The following are some of the expectations, roles, and responsibilities of the Lead Applicant/Authorizing Agent:

  1. Administer the grant from Grant Award Notification to closeout in accordance with all applicable laws and regulations.
  2. Serve as the organizational representative and point of contact for all business management aspects of the award agreement.
  3. Apply appropriate management controls using management systems, checklists, and records.
    1. Internal Controls
      1. To ensure effective and efficient operations
      2. To ensure reliability of financial reporting
      3. To ensure compliance with applicable federal, state, and local laws and regulations
      4. To deter fraud, waste, and abuse
    2. Operating Controls
      1. Maintain Fiduciary Procedures Manual, Budgetary Control System
    3. Accounting Controls
      1. Implement controls to ensure the reliability of recorded financial data.
      2. Maintain appropriate level of transaction review and authorization.
      3. Develop and implement proper procurement procedures and cash management procedures that are well defined.
      4. Develop procedures that facilitate timely review and audit of financial activity.
      5. Maintain segregation of duties by separating incompatible duties and responsibilities.
    4. Compliance Controls
      1. Develop mechanisms to monitor and review compliance with grant terms
      2. Ensure that all expenditures and disbursements are consistent with the objectives of the grant award and comply with applicable Federal, state and local laws and regulations governing the program and use of funds
    5. Center/Site Monitoring
      1. Inform center/site coordinators of grant requirements.
      2. Conduct periodic reviews to ensure that centers/sites have satisfied all State and Federal grant reporting and recordkeeping requirements, including program performance; monitor internal operating and accounting control systems.
    6. Document Control System
      1. Develop written documentation of adequate internal operating and accounting controls that demonstrate evidence of controls related to grant compliance.
  4. Assemble appropriate staff resources and communicate all compliance requirements and resources of the grant.
    1. Maintain subgrantee and center/site handbooks.
  5. Keep abreast of changes in policies, procedures, or requirements and continue to advise program staff of grant requirements.
  6. Manage grant expenditures in a timely fashion to minimize account balances.
    1. Adhere to the list of eligible activities for which funds under the program may be spent, as well as allowable cost objectives and applicable cost principles.
    2. Ensure that transactions are made in a reasonable and prudent manner, are allowable, allocable, and avoid double charging and ensure that credits are applied appropriately.
  7. Prepare necessary reports.
    1. Source Documentation
      1. Appropriately support transactions entered into the fiscal reporting system.
      2. Documentation tracks each grant transaction and supports the validity of financial data
    2. The lowest level of detail the system should provide is documentation that supports all transactions (e.g., invoices, contracts, purchase orders).
    3. The overall recordkeeping system should be able to trace financial statement balances through the subgrantee’s general ledger, cash books, and other journals.
    4. Amounts claimed on financial statements and reports accurately reflect the accounting books and records from that which they were prepared.
  8. Maximize site visits by HIDOE to enhance the program, show organizational strength, and demonstrate a commitment to the project.
  9. Keep HIDOE and the public aware and informed about grant project progress.
  10. Evaluate the extent to which measurable project objectives are being met.
  11. Appropriately liquidate all obligations incurred under the award within the set deadline.
  12. Ensure and oversee the performance of final audits and resolution of findings.
  13. Ensure an adequate system for records retention following HIDOE procedures.

Allowable Expenditures

Project funds must be used for activities described in the 21CCLC Approved Application and that directly support the accomplishment of the project purpose, priorities, and expected outcomes.

Standards of Cost Allowability

The following standards of cost allowability are to be applied in determining cost allowability for a given expense:

  1. Is the expenditure necessary for the performance of the Federal award? (2 CFR Part 200.403)
  2. Is the expenditure reasonable? (2 CFR Part 200.404) Does the cost of the expenditure not exceed an amount that would be spent by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost?
  3. Is the expenditure allocable to the Federal award? (2 CFR Part 200.405) Will the expenditure benefit the Federal program in proportion to the amount paid by the program?
  4. Is the expenditure authorized or not prohibited under Federal or State laws and regulations?
  5. Is the expenditure consistent with policies, regulations, and procedures? (2 CFR Part 200.403(c)) Is the cost consistent with rules that apply uniformly to Federal and non-Federal funds?
  6. Is the expenditure adequately documented? (2 CFR Part 200.403(g))

Non-allowable Expenses Include (but are not limited to):

  • Planning expenses prior to contract start date;
  • Food or refreshments for staff meetings;
  • Purchase of vehicles or facilities;
  • Major remodeling or new construction;
  • Expenses that would supplant already existing activities and services
  • Any expenditures that do not contribute to the achievement of the goals and objectives of the program;
  • Tuition fees for Early College;
  • Daily nutritional services for participants*; and
  • Incentives of any kind.**

*With prior written approval of HIDOE, limited food items may be purchased for special program activities such as cooking classes, field trips, and special events that are reasonable and necessary to meet the goals and objectives of the grant. Applicant must make a compelling case prior to incurring the food expense that the unique circumstances they have identified would justify these costs as reasonable and necessary. Generally, there is a very high burden of proof to show that paying for food and beverages with Federal funds is necessary to meet the goals and objectives of a Federal grant.

**Incentives are defined to include, but not limited to, participation t-shirts, tickets to movies or shows, gift certificates, trophies, ribbons, medals, food items, field trips offered only to students achieving at a particular level (e.g. perfect attendance or high honors trips), or any gift intended to increase participation in the 21CCLC program. These items cannot be charged to grants because they are not necessary and reasonable for the proper administration of the grant. In addition, the State Comptroller has determined that "favors" represent gifts of public funds, which are unallowable under the State Constitution.

Budget Maintenance

The budget worksheet and narrative in the 21CCLC Approved Application is recorded as the approved budget for the duration of the 21CCLC project. Any changes to the budget must be pre-approved by HIDOE (see below for details). The 21CCLC Income and Expenditure Report must be submitted with each triannual (Summer, Fall, Spring) program report as outlined below.

Expense Categories Included in the 21CCLC Budget

  • Salaries
  • Casual/Hourly
  • Payroll Taxes & Assessments
  • Fringe Benefits
  • Airfare, Inter-Island
  • Airfare, Out-of-State
  • Audit Services
  • Contractual Services - Subcontracts
  • Insurance
  • Lease/Rental of Equipment
  • Lease/Rental of Space
  • Mileage
  • Postage, Freight & Delivery
  • Professional Development
  • Publication & Printing
  • Repair & Maintenance
  • Substance/Per Diem
  • Supplies & Materials
  • Telecommunication
  • Transportation
  • Utilities
  • Miscellaneous
  • Indirect Costs
  • Equipment

Budget Approval, Reporting, and Reconciliation Process

Prior to subgrantees receiving award notification, HIDOE 21CCLC staff review the budget worksheet and budget narrative included in the grant application to ensure all expenses are reasonable, allowable, and necessary. If necessary, the subgrantee will be responsible for making any adjustments. Once approved by HIDOE 21CCLC staff, subgrantees will receive an award notification.

Two allocations are prepared by HIDOE 21CCLC staff each year:

  • Allocation #1 is for project period July through December
  • Allocation #2 is for project period January through June

The maximum allocation reflects 50% of the annual award. Allocations take into consideration previous expenditures and funding necessary to implement the program as planned in the Approved Application.

Triannual (Summer, Fall, Spring) program reports are submitted to HIDOE 21CCLC and include an Income and Expenditure Report which is used to reconcile actual expenditures to date and project amount of funding necessary to carry out the project for the next project period.

This calculation and fiscal management procedure considers the actual expenditures to maintain fiscal controls within each grant year and minimizes carry over and unexpended funds. Unexpended 21CCLC funds must be returned to HIDOE at the end of the performance period (July 1 to June 30).

Program Amendment Requests

All budget revision requests must be submitted to HIDOE 21CCLC via 21cclc@k12.hi.us. Preferably, budget amendment requests are submitted to HIDOE by May 1st prior to the start of the July 1 grant year. However, budget revision requests may only be submitted for future expenses. The revision request must be approved by HIDOE 21CCLC staff before obligating any funding under the newly revised budget.

Amended/Modified Budget Approval Process

Budget revisions need to be approved by HIDOE 21CCLC staff when 10% or more is anticipated to be moved to or from any expense category (see expense categories above). If the amendment falls below 10% of any expense category, no budget revision is necessary. In order to submit a request to amend the existing budget, both a Program Amendment Request AND a Budget Modification Request Form must be completed and submitted for consideration to HIDOE 21CCLC.

Budget Restrictions

Equipment and/or technology purchases may not be made in the final 6 months of the subgrant’s final year (see also Close Out Procedures).

Supplement Requirement

The 21CCLC program has a supplement, not supplant requirement: ESSA Section 4203 (a) (9) contains an assurance that funds appropriated to carry out the 21CCLC program will be used to supplement, and not supplant other Federal, State, and local public funds expended to provide authorized programs and activities.

Carryover Funds

21CCLC funds may not be carried over fiscal years. Grantees are encouraged to use all of their funds in the year in which they are awarded. The fiscal year is July 1 to June 30. Triannual reports (Summer, Fall, Spring) seek to ensure funds are spent as appropriated and in a timely manner. Funds remaining at the end of the grant period (June 30) will be reconciled through the allocation process or returned to HIDOE if the project is terminated or closed out.

The only exception to this policy is IF expenses such as payroll costs incurred prior to June 30 are not drawn by June 30, the funds allocated to the previous fiscal year may be used. This exception is limited to no more than 5 percent of the annual award and limited to 30 days or July 31.

Deficit Spending

Deficit spending is prohibited. If a subgrantee incurs a deficit and no 21CCLC funds are available, the subgrantee must transfer the charges to another funding source.

Program Income

Program Income is the gross revenue generated as a direct result of the Federal award and that is in addition to the Federal funds provided by the State through its competitive application process. Program income must be deducted from total allowable costs to determine the net allowable costs.

A Subrecipient may only generate program income if approved by HIDOE in the subgrant application. HIDOE strongly discourages charging fees to low-income children and their families. Any Subrecipient approved to collect program income must report program income collection and expenditures via the biannual Income and Expenditure Report to HIDOE ensuring the following:

  1. Program income must be coded to a separate account by the fiscal agent and a clear audit trail must exist from the beginning of each program year to determine separation of 21CCLC federal funds from 21CCLC program income.
  2. Program income collected must be spent within the program year (e.g. SY 2019-20 = July 1, 2019 through June 30, 2020).
  3. Subrecipient program income account must begin and end the program year with zero funds (carryover of program income is not allowable).
  4. If program income funds are not used within the program year, the grant award will be reduced the following year or returned to HIDOE in closeout procedures.

Record Retention

HIDOE requires grant recipients to maintain all documents for 7 years after the project closes.

Audit Requirements

All 21CCLC Subgrantees that are non-profit organizations are required to receive a single audit annually.