Fiscal and Administrative FAQ Main Page

Administrative Costs

The SGA states that there is a 5% limit on administrative costs.  What are considered administrative costs?

The definition of administrative costs for WIA-funded programs can be found in the WIA regulations at 20 CFR 667.220.  The definition is function-based; therefore, only the costs associated with performing the activities or functions listed in the regulations and ones that are not related to the direct provision of workforce investment services are considered to be administrative costs.  Some guidance:

• Accounting, financial, cash management, budget activities, procurement, personnel, payroll, property management, audit, and general legal services functions are administrative in nature, as are coordinating the resolution of findings arising from audits, reviews, investigations, and incident reports and developing systems and procedures, including information systems, required for these administrative functions.   
• Oversight and monitoring activities are classified depending on whether the activity being monitored is administrative or programmatic in nature.
• The costs of supplies and equipment used for administrative functions or activities and the cost ofstaff that perform and/or supervise administrative functions or activities are considered administrative costs.
• This definition of administrative costs is different from facilities and administration costs referred to in OMB Circular A-21.

If the cost of a function or activity in question is not listed as an administrative cost in 20 CFR 667.220, then such cost can be considered a program cost and is not counted against the 5 percent limit.  Please note that the administrative cost limit is applied against the direct grantee; sub-grantees under the CBJTGs will not be required to report administrative costs.

What is the relationship between the community college's indirect costs and the 5% limit on administrative costs?

While indirect costs are often the overhead costs of an organization, the classification of indirect costs as administrative or program costs depends wholly on the function of the cost.  Specific costs charged to an overhead or indirect cost pool that can be identified directly as a program cost are to be charged as a program cost, and documentation of such charges must be maintained.  ETA suggests looking at the composition of the indirect cost pool to determine the type of costs included and the extent to which those costs are either administrative or programmatic costs under the definition of administrative cost found in the WIA regulations at 20 CFR 667.220.

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Is the cost of program management/the project director considered administrative or programmatic?

The personnel costs associated with project director and/or program manager positions must be allocated between administrative and programmatic costs based on the activities performed by the individual(s).  The cost of the project director/program manager’s time spent performing activities or supervising functions other than those listed in the WIA definition of administrative costs (e.g., accounting, payroll, procurement, etc.) would be considered program costs even though the individuals performing these activities are part of the organization’s program management.

Allowable Costs

Can grant funds be used to pay employee wages during the time they are in training?

No, paid release time for incumbent workers is not an allowable cost under CBJTGs.  

Does the grant allow construction of a structure to meet the proposal objectives?

No.  Workforce Investment Act regulations generally prohibit the use of WIA funds to build or purchase buildings for training activities. 

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Are renovation costs or lease costs allowable?

Rental costs, e.g. the cost of renting space to run a training program or to expand your institution’s available space for a training program, would be an allowable cost, to the extent that such rates are reasonable in light of such factors as: rental costs of comparable property, if any; market conditions in the area; alternatives available; and the type, life expectancy, value, and condition of the type of property leased.  Capital expenditures for improvements to land, buildings, or equipment which materially increase their value or useful life (e.g. putting in an elevator, HVAC or new roof) are unallowable. 

The reasonable and necessary costs of altering or renovating space to make it usable for the project can be an allowable activity with the approval of the Grant Officer. However, if renovation is done to leased facilities, we would recommend that the building owner make the required renovations and that the cost of such activities be recouped through rental costs. Grantees need to ask for approval from the Grant Officer to renovate and/or alter space to meet the requirements of the CBJTGs. 

Can grant funds be used to pay for staff, faculty, or other personnel?

Grant funds may be used to support the reasonable and necessary costs of appropriate personnel needed to carry out the grant activities described in the technical proposal.

Are the costs associated with obtaining licensing and certification, e.g. examination costs, an allowable cost under CBJTGs?

Yes.  Costs associated with obtaining credentials are allowable costs under CBJTGs.

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Are stipends an allowable cost?

The provision of stipends to training enrollees for the purposes of wage replacement is not an allowable cost under this Solicitation for Grant Applications.

Are funds spent on supportive services an allowable cost?

Use of grant funds for supportive services, such as transportation and childcare, is not an allowable cost under this Solicitation for Grant Applications, including funds provided through stipends for such purposes.  Grant applicants are encouraged to work collaboratively with the public workforce investment system and other local service providers to secure these services for those who need them.