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The Department of Education’s mission is to promote student achievement and preparedness for global competiveness by 

fostering educational excellence and ensuring equal access.

UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

OCTOBER 29, 2019

This document is non-binding and does not create or impose new legal requirements. The 

Department is issuing it in this document on an “interim” basis to provide grantees with 

immediate information to assist them in meeting their obligations under Uniform Administrative 

Requirements, Cost Principles, and Audit Requirements for Federal Awards. We intend to 

publish this further and invite public comments. 

Dear OSERS Grantee:

To ease burden on State grantees, the Office of Special Education and Rehabilitative Services 

(OSERS), within the U.S. Department of Education (Department), is granting prior approval for 

two direct cost categories under the Department’s authority in the Office of Management and 

Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit 

Requirements for Federal Awards (Uniform Guidance), codified in 2 C.F.R. §§ 200.407(f) and 

(t), 200.439(b), and 200.456.

This prior approval applies to State formula grant programs administered by the Office of 

Special Education Programs (OSEP) and the Rehabilitation Services Administration (RSA) for 

two direct cost categories: participant support costs (PSCs) and equipment, as further described 

in the attached Frequently Asked Questions (FAQs). Please note that this document does not in 

any way diminish the responsibilities of pass-through entities, grantees, and, where applicable, 

subgrantees to monitor and ensure that the expenditure of program funds, including expenditures 

made on the basis of the prior approvals described in the FAQs, meet the requirements of 

program statutes and regulations, and the requirements set out in Subpart E of 2 C.F.R. Part 200 

with regard to expenditures being reasonable, necessary, allowable, and properly documented. 

This prior approval means that grantees no longer need to submit separate individual requests for 

prior approval for the costs described in the FAQs. This letter applies to the following programs 

administered by OSEP and RSA:

OSEP

1. Individuals with Disabilities Education Act (IDEA) Part B Section 611 Grants to States; 

2. IDEA Section 619 Preschool Grants; and

3. IDEA Part C Grants for Infants and Families.

RSA

1. State Vocational Rehabilitation (VR) Services under the Rehabilitation Act of 1973 

(Rehabilitation Act);

2. State Supported Employment (Supported Employment) Services;

3. Independent Living Services for Older Individuals Who Are Blind (OIB);
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4. Protection and Advocacy of Individual Rights (PAIR); and

5. Client Assistance Program (CAP).

OSERS recognizes that the granting of flexibilities for prior approval reduces the burden on 

grantees and subgrantees and allows the use of Department grant funds for allowable purposes in 

a timely fashion. OSERS is also implementing this approval in conjunction with the 

Department’s collaboration with OMB and to further the goals of Cross-Agency Priority Goal 8, 

Results-Oriented Accountability for Grants, of the President’s Management Agenda.

OSERS is committed to helping States improve early childhood, educational, functional, and 

employment outcomes for individuals with disabilities, and we recognize our responsibility to 

ensure programmatic and fiscal accountability. We believe that the prior approvals described in 

the FAQs appropriately balance the desire for additional State flexibility with programmatic and 

fiscal accountability.

For further technical assistance regarding the accompanying FAQs, please contact Matthew 

Schneer at Matthew.Schneer@ed.gov for OSEP’s IDEA programs and David Steele at 

David.Steele@ed.gov for RSA programs. 

Sincerely, 

/s/

Mark Schultz

Delegated the authority to perform the 

functions and duties of the Assistant Secretary for the 

Office of Special Education and Rehabilitative Services

Attachment
Attachment

Frequently Asked Questions (FAQs)

Prior Approval — 

OSEP and RSA Formula Grants 

1. What action is the Office of Special Education and Rehabilitative Services (OSERS) 

taking? 

OSERS is granting prior approval to its State formula grantees for two categories of direct costs, 

certain participant support costs (PSCs) and certain general purpose equipment expenditures, 

consistent with the Office of Management and Budget’s (OMB’s) Uniform Administrative 

Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform 

Guidance), codified at 2 C.F.R. part 200. 

OSERS recognizes the benefit of States being able to timely use Department grant funds for 

certain PSCs and general purpose equipment expenditures, particularly when used to implement 

requirements under the Individuals with Disabilities Education Act (IDEA) and the 

Rehabilitation Act of 1973 (Rehabilitation Act), and is providing additional flexibility where 

appropriate. The specifics of OSERS’ prior approval for each of these two cost categories will be 

described in more detail in subsequent FAQs. 

2. What programs are covered by this prior approval? 

The prior approval granted by OSERS will benefit State grantees implementing formula grant 

programs administered by the Office of Special Education Programs (OSEP) and the 

Rehabilitation Services Administration (RSA). Specifically, OSERS is granting prior approval 

for certain PSCs and general purpose equipment expenditures under the following OSEP and 

RSA programs: 

OSEP

• IDEA Part B Section 611 Grants to States; 

• IDEA Section 619 Preschool Grants; and 

• IDEA Part C Grants for Infants and Families.

RSA

• State Vocational Rehabilitation (VR) Services;

• State Supported Employment (Supported Employment) Services; 

• Independent Living Services for Older Individuals Who Are Blind (OIB); 

• Protection and Advocacy of Individual Rights (PAIR); and 

• Client Assistance Program (CAP).
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3. What effect does this prior approval have on previous action taken by OSERS?

This letter and accompanying FAQs replace RSA’s April 11, 2018, Technical Assistance 

Circular (18-02) and OSEP’s May 21, 2018, memos to State Educational Agencies (SEAs) and 

State Lead Agencies (LAs) under IDEA Parts B and C.

4. Why is OSERS taking this action?

Since the OMB Uniform Guidance became effective with Federal fiscal year (FFY) 2015 grants, 

OSEP and RSA have received a high volume of requests from State grantees to use grant funds 

awarded by the Department for PSCs and equipment costs.1 To respond to the increased number 

of prior approval requests, OSERS previously issued technical assistance and guidance on this 

topic through RSA’s April 11, 2018, Technical Assistance Circular (18-02) and OSEP’s May 21, 

2018, memos to SEAs and LAs. Additionally, OSEP revised its IDEA Part C FFY 2018 and 

2019 applications to include a streamlined process for prior approval of PSCs and equipment 

expenditures. Despite OSERS’ streamlining efforts to date, both OSEP and RSA continue to 

receive a high volume of questions and prior approval requests from States for these two 

particular direct cost categories. Furthermore, OSERS has determined that the OSEP and RSA 

review has added limited value with respect to prior approval requests for PSCs and equipment 

costs, when those requests have been for costs related to specific statutory requirements in IDEA 

or the Rehabilitation Act and/or for costs under $5,000.

OSERS is committed to assisting States to help them improve early childhood, educational, 

functional, and employment outcomes for individuals with disabilities, and we recognize our 

responsibility to ensure programmatic and fiscal accountability. We believe the prior approval 

approaches described herein appropriately balance the desire for additional State flexibility with 

necessary programmatic and fiscal accountability. Due to the distinct nature of the costs, we discuss 

PSCs and equipment expenditures, and their related prior approval processes, separately below.

Participant Support Costs or PSCs — As Applicable to OSEP and RSA Formula Grantees

5. What are Participant Support Costs or PSCs?

As defined by the OMB Uniform Guidance, PSCs are direct costs for items such as stipends or 

subsistence allowances, travel allowances, and registration fees paid to or on behalf of 

participants or trainees (State employees not included) in connection with conferences2 or 

training projects (2 C.F.R. § 200.75). Under the OMB Uniform Guidance, PSCs are allowable 

with prior approval of the Federal awarding agency (2 C.F.R. §§ 200.407(t) and 200.456).

1 The prior approval requirements for PSCs and equipment are set forth in the OMB Uniform Guidance, 

codified in 2 C.F.R. part 200, which consolidated requirements for Federal grant awards to reduce 

administrative burden and improve outcomes. Prior approval requirements set forth in 2 C.F.R. part 200, 

not specifically covered by this letter, still apply to OSERS’ grantees. 

2 “Conference” is defined in 2 C.F.R. § 200.432 as a meeting, retreat, seminar, symposium, workshop, or 

event whose primary purpose is disseminating technical information beyond the non-Federal entity and is 

reasonable for the successful performance of the award.
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6. What prior approval is OSERS granting for PSCs?

Consistent with the OMB Uniform Guidance, OSERS is granting prior approval for the 

following PSCs:

A. PSCs for meetings (sub and related subcommittee meetings) required by IDEA or the 

Rehabilitation Act, including IDEA Part B State Advisory Panels, under IDEA Section 

612(a)(21)(A) for SEAs, IDEA Part C State Interagency Coordinating Councils under 

IDEA Section 641 for State LAs, and State Rehabilitation Councils and independent 

commissions under Sections 101(a)(21) and 105(c) of the Rehabilitation Act;

B. PSCs incurred during the provision of services to individuals with disabilities under 

IDEA and the Rehabilitation Act; this includes PSCs incurred for the provisions of VR 

services under individualized plans for employment (IPEs) for individuals with 

disabilities eligible for VR services, as well as PSCs incurred for the provision of special 

education and related services under individualized education programs (IEPs) for 

children and youth with disabilities and early intervention services under individualized 

family service plans (IFSPs) for infants and toddlers with disabilities and their families; 

C. Any other PSCs, not described specifically above, that do not exceed a total cost of 

$5,000 per individual participant or trainee per conference training or event; and

D. All PSCs incurred by local educational agencies (LEAs) under IDEA Part B given that 

the SEA has general supervision responsibilities under IDEA and the OMB Uniform 

Guidance to review such costs, including the requirement to ensure that all costs “[b]e 

necessary and reasonable for the performance of the Federal award and be allocable 

thereto under these principles.” 3 SEAs are responsible for reviewing prior approval 

requests for their subgrantees (LEAs) for other areas, such as the use of funds for 

equipment. Given that SEAs often host or encourage LEA personnel to attend 

conferences as part of professional development, SEAs can similarly ensure that the use 

of IDEA funds by its LEAs for PSCs are for allowable purposes and conduct appropriate 

reviews. 

As discussed in FAQ 25, OSEP reserves the right to review through its monitoring or 

audit processes, as determined appropriate, PSCs and equipment costs to ensure 

compliance with applicable Federal requirements. This may include reviewing policies 

of, and monitoring by, grantees for subgrantee/subrecipient compliance with Federal 

requirements.

3 As the grantee, SEAs must monitor LEAs to ensure compliance with applicable Federal requirements. 

See, IDEA provisions in 20 U.S.C. 1412(a)(11) and 34 C.F.R. § 300.149; and OMB Uniform Guidance 

provisions in 2 C.F.R. §§ 200.328(a) and 200. 403(a). See also 2 C.F.R. § 200.331(d).
4

7. Will grantees still have to submit prior approval requests for PSCs?

OSEP and RSA formula grantees will not have to submit prior approval requests for the PSCs 

expenditures identified above. Through this letter and FAQs, OSERS is granting prior approval 

for these expenditures, thereby eliminating the need for grantees to submit requests for these 

particular expenditures from now on. 

8. What if a grantee needs to incur PSCs that fall outside the scope of OSERS’ prior 

approval?

If OSEP and RSA formula grantees need to incur PSCs that fall outside the scope of this prior 

approval, they will need to submit detailed requests for prior approval to OSEP or RSA, as 

applicable, as they have in the past.

9. Is OSERS granting prior approval for OSEP grantees who need to make budget 

revisions to transfer funds budgeted for PSCs?

Yes. In addition to the prior approval described above related to PSCs, which is applicable to 

both OSEP and RSA formula grantees, OSERS is granting prior approval under 2 C.F.R. § 

200.308(b) to OSEP grantees, meaning that these IDEA Parts B and C grantees no longer have to 

submit prior approval requests for budget revisions for the transfer of funds budgeted for PSCs if 

an OSEP grantee wishes to no longer charge PSCs to their Federal award after the initial 

approval (as required by 2 C.F.R. § 200.308(c)(v)). This prior approval is applicable only to 

OSEP’s formula grantees under IDEA Parts B and C.

Equipment — General Requirements

10. What is equipment?

“Equipment” is defined in the OMB Uniform Guidance in 2 C.F.R. § 200.33 as an article of 

tangible personal property (including information technology systems) having a useful life of 

more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the 

capitalization level established by the non-Federal entity for financial statement purposes, or 

$5,000. 

“General purpose equipment” is defined in 2 C.F.R. § 200.48 as equipment which is not limited 

to research, medical, scientific or other technical activities. Examples include information 

technology hardware and software, office equipment and furnishings, modular offices, telephone 

networks, information technology equipment and systems, air conditioning equipment, 

reproduction and printing equipment, and motor vehicles. 

“Special purpose equipment” means equipment that is used only for research, medical, scientific, 

or other technical activities. Examples of special purpose equipment include microscopes, x-ray 

machines, surgical instruments, and spectrometers. 

These OMB Uniform Guidance definitions apply to the OSEP and RSA programs referenced in 

FAQ 2. Capital expenditures for general purpose equipment are unallowable except with the 
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prior written approval of the Federal awarding agency or pass-through entity, and capital 

expenditures for special purpose equipment with a unit cost of $5,000 or more are unallowable 

except with the prior written approval of the Federal awarding agency or pass-through entity (2 

C.F.R. § 200.439(b)). 

11. Why is OSERS treating prior approval differently for OSEP and RSA formula 

grantees?

Due to the different statutory requirements of both IDEA and the Rehabilitation Act, as well as 

the varied types of equipment purchased by grantees under each of OSERS’ formula grant 

programs, OSERS has determined it necessary to address prior approval for equipment 

separately for OSEP and RSA formula grant programs. Having said this, the prior approval 

granted herein is consistent for all of OSERS’ formula grantees.

OSEP — Prior Approval for Equipment under IDEA

12. Does the IDEA define “equipment” beyond the definition in the OMB Uniform 

Guidance?

Yes. Under IDEA Parts B and C, in 20 U.S.C. 1404(a) and corresponding implementing 

regulations in 34 C.F.R. §§ 300.718(a) and 303.104(a) —

If the Secretary determines that a program authorized under this chapter will be improved 

by permitting program funds to be used to acquire appropriate equipment, or to construct 

new facilities or alter existing facilities, the Secretary is authorized to allow the use of 

those funds for those purposes.

Under IDEA in 20 U.S.C. 1401(7) and the implementing Part B regulations in 34 C.F.R. § 

300.14, the term “equipment” also is defined to include —

(a.)Machinery, utilities, and built-in equipment, and any necessary enclosures or structures to 

house such machinery, utilities, or equipment; and 

(b.)All other items necessary for the functioning of a particular facility as a facility for the 

provision of educational services, including items such as instructional equipment and 

necessary furniture; printed, published, and audio-visual instructional materials; 

telecommunications, sensory, and other technological aids and devices; and books, 

periodicals, documents, and other related materials. 

13. May SEAs continue to review the prior approval requests for LEAs under Part B of the 

IDEA?

For the IDEA Part B program, SEAs have reviewed prior approval requests from LEAs 

regarding the use of IDEA Part B funds. Under the OMB Uniform Guidance in 2 C.F.R. 

§ 200.439(b) (1)–(3), SEAs continue to have the authority, as the pass-through entity, to review 

and approve LEA requests to use IDEA Part B funds for the purchase of equipment, using the 

same criteria described in FAQ 12. 
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14. What prior approval is OSERS granting to OSEP formula grantees related to 

equipment expenditures?

Consistent with the OMB Uniform Guidance, OSERS and OSEP are granting prior approval for 

equipment (as defined above) that is to be charged to Federal IDEA Part B and C funds for the 

delivery of services to eligible children with disabilities to ensure the timely delivery of those 

services. This means that grantees no longer must submit prior approval requests to OSEP for 

equipment (defined generally as $5,000 or more per item of equipment) that is to be charged to 

IDEA funds and which is identified on, or directly related to the implementation of, either IEPs 

for children and youth with disabilities or IFSPs for infants and toddlers with disabilities and 

their families. This includes services such as assistive technology devices listed on the IEP or 

IFSP as well as equipment needed to provide IEP or IFSP services. 

15. Will OSEP grantees still need to submit prior approval requests for equipment?

No, as long as the equipment expenditures fall within the scope of this prior approval. However, 

if a grantee must purchase equipment that goes beyond the scope of this prior approval, then the 

grantee must submit a detailed prior approval request to OSEP as it has done in the past.

RSA — Tri-Level Prior Approval Process for Equipment Expenditures

16. Does the Rehabilitation Act define “equipment” beyond the definition in the OMB 

Uniform Guidance?

No. The OMB Uniform Guidance definition of equipment (including the threshold amount of 

$5,000) applies to grants administered by RSA; the IDEA definition of equipment is not 

applicable to RSA’s formula grants. 

17. Why is OSERS developing a tri-level prior approval approach for equipment 

expenditures incurred by RSA formula grantees?

Given the varied nature of equipment purchases under the RSA formula grant programs 

identified in these FAQs, OSERS has determined it necessary to establish a tri-level prior 

approval process. In so doing, OSERS believes this approach strikes the necessary balance 

between flexibility needed by the States to ensure grantees can purchase equipment that is 

necessary to satisfy requirements under the Rehabilitation Act, while also ensuring 

accountability for those equipment expenditures that pose higher risks to the Federal interest.

18. Is OSERS granting prior approval for equipment expenditures to RSA formula 

grantees?

Yes. The first level, of OSERS’ tri-level approach, grants prior approval for certain equipment 

expenditures. See FAQ 19 for more detailed information.
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19. What prior approval is OSERS granting to RSA formula grantees for equipment 

expenditures?

Consistent with the OMB Uniform Guidance, OSERS and RSA are approving equipment 

purchases under the VR program that are necessary for eligible individuals with disabilities to 

achieve employment outcomes, thereby ensuring the timely delivery of those services. This 

means that VR program grantees no longer must submit prior approval requests to RSA for 

equipment (defined generally as $5,000 or more per item of equipment) that is to be charged to 

the VR program for delivery of services to eligible individuals with disabilities provided under 

IPEs (e.g., rehabilitation technology, or home or vehicle modifications).

20. Does this mean that the above-described prior approval for equipment is limited to the 

VR program?

Yes. The reason for the OSERS prior approval, with respect to these equipment expenditures, is 

that section 103(a) of the Rehabilitation Act requires the VR agencies to provide any VR service 

identified on an eligible individual’s IPE that is necessary for him or her to achieve an 

employment outcome. These services could include the purchase of equipment. Because of this 

statutory mandate and the lack of audit and monitoring findings of non-compliance with respect 

to the allowability and allocability of these expenditures, OSERS has determined that, in this 

limited circumstance, granting prior approval is necessary to ensure the timely delivery of 

services to eligible individuals. There is no similar statutory mandate to purchase equipment 

under the other RSA-administered formula grant programs.

21. What do RSA formula grantees need to do regarding other general purpose equipment 

that is not purchased under the VR program in accordance with an eligible individual’s 

IPE?

As the second level of its tri-level process, OSERS has established a streamlined submission 

process for all prior approval requests to be used by RSA formula grantees administering the VR, 

Supported Employment, CAP, PAIR, and OIB programs when they need to purchase general 

purpose equipment (other than that just described above). Using the streamlined approach, RSA 

formula grantees may request prior approval in the aggregate4 based on reasonable budget 

4 For purposes of submitting an aggregate prior approval request for Business Enterprise Program (BEP), 

or Randolph-Sheppard program vending facility equipment, the State VR agency may include in its 

projected aggregate estimate for a FFY the net invoice price of the equipment, including the cost of any 

modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the purpose 

for which it is acquired plus delivery charges for the equipment itself. However, the aggregate request 

should not include costs related to the renovation or alteration of facilities in connection with the 

installation of BEP equipment approved as a result of the agency’s budgeted prior approval request for the 

acquisition of that equipment. Costs associated with the renovation or alteration of facility space, whether 

in connection with the installation of the vending equipment or the acquisition of the vending facility 

itself, may be allowable but must be submitted in separate prior approval requests that are based on 

contract bids or other methods that project the actual proposed costs so their allowability may be assessed 

separately.
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estimates (i.e., projections of obligations and expenditures) for an entire FFY, rather than 

submitting separate prior approval requests for each proposed expenditure. Budget estimates in 

the aggregate must be based on reliable cost estimates (e.g., recent general -purpose equipment 

purchases, prior FFY emergency equipment costs, current bids, or reasonable cost research) 

expected to be incurred in a given FFY. While an agency must submit these aggregate prior 

approval requests, as applicable, for each program, they may include different types of 

equipment purchases in the same request. 

22. Do RSA formula grantees ever have to submit detailed prior approval requests for 

equipment?

Yes. Due to the nature of the capital expenditures, namely the large dollar amounts involved and 

the potential risk to the Federal interest that the costs may not be allowable or allocable to the 

program charged, OSERS will continue to require grantees to submit itemized, project-specific 

prior approval requests to RSA that are based on contract bids or other actual cost estimates. For 

example, grantees must submit itemized, project-specific prior approval requests for equipment 

purchases for:

• the establishment, development, or improvement of a facility for a public or nonprofit 

community rehabilitation program (CRP) at 34 C.F.R. § 361.5(c)(17);

• the construction of a facility for a public or nonprofit CRP at 34 C.F.R. § 361.5(c)(10); 

• the construction or renovation/alteration of a State facility or American Job Center for 

purposes allocable to the VR program; and

• the renovation or alteration of facilities in connection with the acquisition of a BEP 

vending facility or the installation of BEP equipment in accordance with section 

103(b)(1) of the Rehabilitation Act.

23. Must RSA grantees submit prior approval requests if non-Federal funds will be used to 

pay for the equipment that is not purchased under the VR program in accordance with 

an eligible individual’s IPE?

Yes. With respect to the VR, Supported Employment, and OIB programs, which have a nonFederal share requirement, grantees must submit prior approval requests, if required by this letter 

and accompanying FAQs — whether in the aggregate or for specific projects — even if the 

grantee plans to use only non-Federal funds to pay for the costs. The OMB Uniform Guidance at 

2 C.F.R. § 200.407 refers to costs under a “Federal award,” which would include both Federal 

and non-Federal expenditures incurred under the program. 

OSEP and RSA – Other related questions

24. When OSEP or RSA approve an expenditure, does this mean the cost is allowable and 

allocable?

No. When OSEP and RSA grant prior approval, they do so based on the information provided by 

the grantee. Neither OSEP nor RSA can be responsible for knowing the underlying facts of the 

expenditure. Therefore, grantees remain responsible for ensuring that all expenditures from 
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Department-funded grants, even those for which prior approval has been granted, are allowable 

and allocable to the grant program in accordance with the OMB Uniform Guidance and program 

requirements (2 C.F.R. §§ 200.403 through 200.405) and such costs may be reviewed by State 

auditors. This means that grantees must determine that such direct costs are reasonable and 

necessary under the Federal award and must maintain appropriate documentation for such costs. 

Additionally, grantees must ensure such expenditures are in accordance with State and agency 

policies and procedures, as applicable. 

25. What overall (or general) responsibilities do SEAs or other pass-through entities have?

SEAs or other pass-through entities retain the responsibility to monitor and ensure that the 

expenditure of program funds, including expenditures made on the basis of the prior approvals 

described in these FAQs, meet the requirements of program statutes and regulations, and the 

requirements set out in Subpart E of 2 C.F.R. Part 200 with regard to expenditures being 

reasonable, necessary, allowable, and properly documented.

26. Will OSEP and RSA monitor PSCs and equipment expenditures for which prior 

approval has been granted?

Yes. OSEP and RSA may review through their monitoring or audit processes, as determined 

appropriate, State policies, procedures, and monitoring of the review of PSCs and equipment 

costs to ensure grantee compliance with applicable Federal requirements.