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Fiscal Management

Fiscal Assurances

As part of its State Plan, the grantee provides an assurance that the funds received through the grant are expended in accordance with section 4 of the AT Act; an assurance of adopting such fiscal control and accounting procedures as may be necessary to ensure proper disbursement of and accounting for the funds received through the grant; and funds will be used to supplement and not supplant funds available from other sources to provide assistive technology activities.  The new State Plan for AT effective in 2018 will also require reporting of actual expenditures for closed out fiscal years by state level and state leadership categories. 

AT Act Requirements for Expenditure Tracking

Section 4(e)(3)(A) of the AT Act requires States to use not more than 40% of an annual award to carry out state leadership activities if the state does not use flexibility.  If a state does claim flexibility in their approved State Plan, Section 4(e)(6)(B)(ii) of the AT Act requires the State to use not more than 30% of an annual award to carry out state leadership activities.  (See next paragraph for definition of flexibility).  In both cases, Section 4(e)(3)(A) of the AT Act requires all States to use at least 5% of the state leadership funds for transition training or technical assistance activities. 

Section 4(e)(6) of the AT Act allows a state to carry out any two or more of the required state-level activities, meaning a state can choose not to conduct up to two activities.  If your state has claimed flexibility for a state level activity in a given fiscal year, you do not report data for that activity during that fiscal year and the grant award for that fiscal year would be subject to a maximum 30% of total expenditures for state leadership activities. 

Categorizing Expenditures

The AT Act requires states have a mechanism in place to accurately track all AT Act expenditures by grant award fiscal year and by the categories of state level and state leadership activities.  Most direct expenditures like salaries and benefits, contractual expenses, and direct service expenses will be readily attributable to a state level or state leadership or transition activity.  For example, expenditures for purchasing equipment for a device loan program will be state level expenses while staff salaries and travel expenses to deliver training will be state leadership. 

One helpful mechanism for determining if an expense should be categorized as state level, state leadership or transition is to identify where the data associated with that expense is reported.  Since most all State AT Program activities should have associated data reported, where such data is reported (state level or state leadership activities) provides a good indication of how the expenditures should be categorized.  Most staff salaries and benefits can be assigned in total or in pro-rated percentages to state level or state leadership depending on staff job responsibilities and any time and effort logs required for federal record keeping purposes. 
For very generic administrative and operational expenditures, like paper, general office supplies, and similar expenditures, an arbitrary ratio allocation can be used such as a 50/50 split.  A more accurate pro-ration split can be used in areas where there is sufficient justification to do so.  For example, if the personnel split between State Level and State Leadership is 55% State Level and 45% State Leadership, then it would be logical to apply that ratio to office space utility expenses if the space correlates closely with staff positions.

If an indirect cost rate is used, the arbitrary ratio allocation (e.g. 50/50) can be applied to that amount for purposes of reporting by state level and state leadership categories.  Please note that any general administrative expenditures should be limited to a small portion of the federal AT Act grant award as the vast majority of AT Act award dollars should be allocated for direct program service costs rather than administrative and overhead costs.  It is very difficult to justify claiming the 10% indirect rate allowed by the AT Act along with pro-rated additional administrative costs as direct expenses (usually done as a pro-rated cost allocation plan). 

Section 4 AT Act grantees are strongly encouraged to use either the 10% indirect provision to support administrative and overhead costs OR a cost allocation plan where administrative and overhead costs are pro-rated as direct cost expenditures, but not both.  Using both mechanisms to pay for administrative costs creates a significant risk for duplicative expenses for same/similar cost items and potential audit findings.  Claiming both a 10% indirect rate and direct administrative expenses will also divert a significant amount of available federal funding from support of AT services.

Advisory Council expenses can be pro-rated based on the typical work of the Council.  If the agenda topics are routinely balanced between state level and state leadership activities then a 50/50 split might be appropriate.  If the Advisory Council focuses more energy on administrative oversight or policy issues, then a more appropriate split might be 25% state level and 75% state leadership.  If the Advisory Council serves any purpose other than that outlined in the AT Act, expenses should be based on less than a 100% total charging to the AT Act grant only the portion of time dedicated to AT Act activities.

Similarly, professional development expenses can be pro-rated based on the typical work responsibilities of those attending (e.g. how they will apply the knowledge gained via the professional development in their job) or it may be more appropriate to allocate such expenses based on the content of the professional development especially if the training activity is narrowly focused on state level or state leadership activities.  Very general professional development (e.g. all staff diversity training) can be allocated using arbitrary splits if that is most efficient.  For example, professional development expenses for a staff person who oversees the device loan and demonstration program to attend ATIA and CSUN each year to remain current on AT products could be categorized as 100% state level corresponding to the person’s FTE classification.  A person whose job responsibilities are split between state level and leadership (60%/40%) attending the same conferences could have those travel expenses allocated using the same percentages aligned with the FTE categorization. 

The expenditure tracking system used by grantees should be able to consistently categorize expenditures as state level, state leadership or transition based on a clear rationale for each categorization or prorated split. 

State Plan Expenditure Reporting

The first expenditure data table in the State Plan is for the closed-out carryover fiscal year AT grant award that was fully liquidated the previous December 31.  (Please note, this data is for a specific year AT Act grant award amount, NOT any specific 12 month period of time as funds from a grant award can be obligated over a 24 month period.)  For a State Plan submitted in the spring of 2018, the most recent closed-out carryover year grant award will be the FY16 grant award that began 10/1/2015 with the first year ending on 9/30/2016 and the second carryover year ending on 9/30/2017 with 3 month liquidation period ending 12/31/2017. 

The actual expenditures for this fiscal year award will be reported by:

  • All State Level Activities (State Financing, Reuse, Device Loan, Device Demonstration).
  • All State Leadership Activities (All other activities including Training, Technical Assistance, Public Awareness, Information and Assistance, etc.)
  • Transition Training and Technical Assistance which will be a duplicate number that is included in the All State Leadership Activities total.

The State Level Activities calculated percentage must be at least 60% of the total award unless the state claimed flexibility in which the percentage must be at least 70%. 

The State Leadership Activities calculated percentage must be no more than 40% of the total award unless the state claimed flexibility in which the percentage must be no more than 30%. 

The Transition Training and Technical Assistance calculated percentage must be at least 5% of the expenditure amount reported for State Leadership Activities. 

The total of all expenditure data must equal the total amount of funds drawn down in the ACL Payment Management System.  If you have not liquidated all the funds available in the fiscal year award, your state will have lapsed funding. 

The second expenditure data table in the State Plan is for year-to-date (YTD) obligated and liquidated expenditure data for the immediate preceding fiscal year AT grant award along with planned budget allocations for any unobligated remainder of that award.  Please note, this data is for a specific year AT Act grant award amount, NOT any specific 12 month period of time as funds from a grant award can be obligated over a 24 month period.  For a State Plan submitted in the spring of 2018, the immediate preceding fiscal year award will be the FY17 grant award that began 10/1/2016 with the first year ending 9/30/2017 and the second carryover year ending 9/30/18. 

The actual year-to-date (YTD) liquidated expenditures for this fiscal year award will be reported in the same categories of All State Level Activities, All State Leadership Activities, and Transition Training and Technical Assistance as is reported in the first table.  In addition, YTD obligated but not yet liquidated expenditures will be reported in those same categories along with planned or budgeted expenditures that are not yet obligated.  All three of these summed will equal the total grant award amount. 

Obligations are binding commitments for goods or services.  Obligations include the amounts of orders placed, contracts and sub-grants awarded, goods and services received, and similar transactions during a given budget period that require payment by the grantee that has not yet been made.  Liquidations are payments for obligations.

Budgeting Cycle

The budgeting cycle for a Section 4 AT Act grantee should identify a specific target date for obligation and liquidation the entire fiscal year grant award long before the final deadline for each.  This is especially true when grant funds are used for external contracts for which there is no guarantee of funding being liquidated by the final deadline date.  The obligation deadline for all grants is September 30 of the carryover year – 24 months from the award date.  The liquidation deadline is December 31 of the carryover year – 27 months from the award date.  A recommended budget cycle sets April 1 in the carryover year as the target date for liquidation of all funds in the prior fiscal year award.  This target date provides ample time to address contractors not submitting invoices on time or other unexpected situations resulting in liquidations not occurring as expected. 

Applied to a single fiscal year award, an appropriate budgeting cycle is as follows:

  • Award start date of October 1
  • Obligate and liquidate that award in the next 18 months
  • Target liquidation date of April 1
  • April through September is available to de-obligate and re-obligate if necessary
  • October through December is available to liquidate if necessary

Using this kind of budgeting cycle will help ensure that all grant funds are liquidated in a timely manner. 

Frequently Asked Questions

What does supplement and not supplant mean?

States must provide an assurance that the funds received through the grant will be used to supplement, and not supplant, funds available from other sources for technology related assistance, including the provision of assistive technology devices and assistive technology services.

By all means, provide services for free to individuals and their families and circles of support whenever you are able, but make the case for, market, and sell your services to agencies and organizations as value added to the services they are already providing.

For example, your program could provide devices through the device lending program to VR clients under contract with VR- the benefits to VR clients include ensuring a better fit of the technology for their clients, lower discontinuance rates, and cost savings for VR (as a “try before you buy” option, every device loaned that does not work for the client would have been a device VR would have purchased in the past to try in the hopes it would work).

What is the allowable indirect rate?

Not more than 10% of funds made available through an AT Act state grant may be used for indirect costs.

What are indirect costs?

Normally, indirect costs are the costs that accrue from the general operation of an organization and cannot be specifically identified with a particular project. These costs are sometimes referred to as facilities and administrative (F&A) costs or overhead. An indirect cost is NOT directly identified with a single final cost objective, but is identified with two or more final cost objectives, such as accounting, personnel, or depreciation on equipment. Indirect costs charged to various grants/contracts should be based on the benefit received. If the grant/contract did not benefit materially, it should not share the indirect cost.

What are direct costs?

A direct grant/contract cost is any cost that can be identified specifically with a final cost objective (e.g., a particular direct activity). Costs must be allowable, allocable and reasonable.

If a program charges an indirect rate can it also charge a direct cost or allocated/prorated amount for incurred costs included in the indirect?

Costs must not be charged to a grant/contract as direct costs or cost allocation amounts if other costs incurred for the same purpose in like circumstances have been charged as indirect costs to that grant/contract or any other grant/contract. It is always better to either use an indirect rate or a cost allocation plan where overhead costs are prorated according to relative use across different programs but not both. 

Are there any unique fiscal requirements for AT Act programs?

Yes. Statewide AT Programs work with their Advisory Councils to plan and implement the required four core state level activities and all of the state leadership activities (State Plan identified). States are given leeway to determine how best to address the needs in their states. Two of the mechanisms that the AT Act allows states to use are comparability and flexibility. AT Act programs have a unique requirement for budgeting for activities. A state program is required to dedicate at least 60% of its AT Act funding to state level activities and no more than 40% to state leadership activities.  However, if a state chooses to conduct less than four of the state level activities (claims flexibility and does not conduct an activity) then the state is required to dedicate at least 70% of its grant funds to state level activities and no more than 30% for state leadership activities.  A state is allowed to spend 100% of the federal grant on state level activities; however, it is still required to carry out the state leadership activities. States must also spend a minimum of 5% of its actual state leadership expenditures on the two required transition activities.

What is comparability for state level activities?

Generally states are required to conduct all of the activities in Section 4 of the AT Act. However, Sec. 4(e)(1)(B) of the act allows states not to fund a state-level activity if that activity is supported comparably with nonfederal funds. There are two conditions:

  1. Financial support is provided from state or other non-federal resources or entities for that category of activities; and
  2. The amount of the financial support is comparable to, or greater than, the amount of the portion of the funds made available through the grant that the State would have to expend to conduct that category of activities.

When deciding to claim Comparability for an activity, programs should consider the following:

  1. Is the State Level Activity being conducted/provided by other than the AT Act Program comprehensive across age, disability, and geographic areas of the state?
  2. Is the amount of funding for the activity comparable to or greater than the portion from the AT Act funds that would have been allocated for that activity?
  3. Will you have sufficient data absent this activity in either access or acquisition to meet performance measure requirements?

The decision to use comparability is usually dependent upon the scope of other activities already included in your State Plan and ARP.  For example, claiming comparability for device demonstration when a grantee has limited device loan activities could negatively impact the access performance measure and might not be desirable. 

What is flexibility for state level activities?

States do not have to conduct all of the state level activities.  However the decision to limit the number of state level activities then carries budget limitations on state leadership activities that the state conducts.  Sec. 4(e) (6) of the act provides states with the “Flexibility” to carry out only two or three of the state-level activities. States that carry out all four state-level activities may use up to 40 percent of their federal funds for state leadership activities. However, states that carry out only two or three of the state-level activities are only allowed to use up to 30 percent of their funds for state leadership activities. When deciding upon flexibility programs should consider the following:

  1. If you flex out of providing one State Level Activity will you still be able to meet the required performance measures?
  2. If you elect to flex out of two activities under the same category, either “Access" or "Acquisition,” you will assuredly NOT meet the required performance measures.
  3. Your annual progress report to HHS/ACL is compiled into an Annual Report to Congress. You want to ensure your report does not show your performance measures as “Not Met”.

What are the required transition activities and how is the 5% determined?

Section 4(e)(3)(B)(i)(III) of the Act includes a requirement that statewide AT programs provide training/technical assistance to assist students with disabilities who receive transition services under IDEA and adults with disabilities maintaining or transitioning to community living.  Section 4(e)(3)(A) also requires that at least 5% of the expenditures on State Leadership activities be used for the transition training and/or transition technical assistance activities. Since you will not know the exact amount of actual expenditures on State Leadership activities until the end of the fiscal year, to budget for transition activities you can utilize one of the following options:

  1. Budget for the full 5% of the maximum that could be spent on state leadership (40% if you do all state level activities or 30% if flexibility was claimed), or
  2. Budget for 5% of your actual expenditures on state leadership activities from the prior year or use an average from prior year actual expenditures to project a reasonably accurate expenditure level. 

For example using the first option:  Total award is $400,000, 60% allocated on State Level Activities = $240,000, 40% allocated for State Leadership = $160,000 – 5% of the 40% budgeted for transition Activities = $8,000. 

Another example using the second option:  Total award is $400,000 and actual expenditures on State Level Activities the prior year = $320,000 and 20% on State Leadership Activities = $80,000 and 5% budgeted for transition is $4,000. 

Is there a recommended accounting strategy to track state level and state leadership expenditures?

All direct and indirect costs paid by Section 4 AT Act dollars must be allocated to state level or state leadership activities or prorated between the two.  The accounting system must have a mechanism to track all AT Act expenditures by the state level and state leadership categories.  Salaries and benefits paid with AT Act dollars must be allocated to state level or state leadership accounting codes based on the programmatic responsibilities of each employee.  Contracts are typically readily attributable to state level or state leadership activities depending upon the contract work scope.  General administrative costs and indirect costs are more challenging to allocate accurately and are usually prorated between state level and state leadership according to some cost allocation plan. 

Can we buy and disseminate items with our program information on them as a public awareness and/or an outreach activity?

No. Per the HHS Policy on the Use of Appropriated Funds for Promotional Items federal program funds cannot be used for purchasing promotional items.

Can we purchase assistive technology for an individual?

No. The AT Act prohibits the purchase of assistive technology for individuals.

How does a program handle the disposition of equipment?

There are many rules and regulations governing the disposition of equipment purchased with federal grant funds.  HHS grantees must follow the Code of Federal Regulations Title 45 Sec. 75.320 Property Standards for disposition of equipment. Programs must also follow any state and/or organizational requirements for the disposition of equipment.

How are activities funded with non-AT Act dollars reported in the APR?

All activities conducted as part of the State Plan for AT can be reported in the appropriate section of the APR. If additional funding beyond the AT Act grant is used to support activities that are reported in the APR, that additional leveraged funding should be reported in Section A of Leveraged Funding. If the additional leveraged funding is used to support activities not reported in other sections of the APR, those funds can be reported in Section B of Leveraged Funding.

Fiscal Management Resources

2017 Expenditure Tracking and Reporting
2017 Flexibility and Comparability
Managing and Leveraging Resources
Equipment Disposition and Record Retention