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U.S. Department of Education

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- Where can I get general guidance and resource material about this program and the grantmaking process?
- What changes am I able to make to my project and/or budget without prior ED approval?
- When I have to request project and/or budget changes that require prior approval from ED, how should I submit those changes? How does ED decide to approve or disapprove my request?
- I have unspent and unobligated funds from a previous fiscal year. Can I carry them over into the current budget period and use them on an activity?
- What is a Legislatively Allowable Activity (LAA)?
- What are the guidelines for drawing down funds for upcoming costs?
- Must our institution conduct an audit of our project every year?
- What is the matching funds requirement for endowments? When must the matching funds be raised?
- What kinds of records do I need to keep?
- Whom do I contact if I have a problem with the G5 system?
- Where can I find the most up to date copy of the Code of Federal Regulations (CFR)?
- Where can I find the most recent edition of EDGAR?
- Where can I find form-fillable editions of standard ED Grant Application and Reporting Forms?

The questions and answers presented here are provided as a resource to our grantees, but are not intended to replace communication with your Department of Education (ED) program officer. Please continue to contact your program officer with specific questions about your grant awards.

Project directors and/or other grant personnel who are new to the grantmaking process should review the *Grantmaking at ED* publication (http://www2.ed.gov/fund/grant/about/grantmaking/index.html), which is a non-technical summary of ED's discretionary grants process (application, review, award, administration, grant closeout, and audit) and the laws and regulations that govern the process.

In addition, online grants management training and resources for project directors are available at:  http://e-grants.ed.gov/training/GMT0101000.htm.

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Grantees are allowed a certain degree of flexibility to make post-award changes and budget revisions without prior approval. Section 74 of the Education Department General Administrative Regulations (EDGAR) generally permits grantees to undertake the following administrative actions without seeking approval from their program office. Usually the program office requires the grantee to provide a notification of the change, including supporting justification:

- Obligate funds for up to 90 days before the start date of the grant's performance period (EDGAR 74.25(e)(1))
- Extend the project period one time at the end of the grant for a period of up to 12 months (EDGAR 74.25(e)(2))
- Carry funds over from one budget period to the next (EDGAR 74.25(e)(3))
- Transfer funds among budget line items (EDGAR 74.25(f))

If the change you wish to make is beyond these allowable administrative actions, you must contact ED for prior approval. Grantees are urged to review the sections in EDGAR relating to the type of change they wish to make.

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Proposed project and/or budget changes must be submitted in writing to your ED Program Officer. The proposal should include the following documents:

- Cover Letter providing overview of proposed changes and why they are necessary to the success of the project
- Revised Activity Narrative (if applicable)
- Revised Budget Summary (if applicable)
- Revised Individual Activity Budget Form (if applicable)
- Revised Activity Objectives and Anticipated Results (if applicable)
- Revised Implementation Strategy/Timetable Form (if applicable)
- Curriculum Vitae or Resume of New Project Director and/or Activity Director (if applicable)

Upon receipt of the written request, the program staff may contact grantees directly for clarification or additional information as needed.

All submitted requests for programmatic and/or budget changes are evaluated on a case-by-case basis. The decision to approve or disapprove a request is based on requirements imposed by applicable Federal statutes, including the General Education Provisions Act (GEPA), program legislation and regulations, EDGAR, and OMB circulars. All resulting costs and activities related to approved changes must be allowable. No official may authorize any administrative actions that conflict with any applicable Federal statute, program legislation or regulation, EDGAR, grant conditions; or permit changes that would alter the scope or objectives of a competitive discretionary grant.

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Section 74.25(e)(3) of EDGAR states that, "(e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, the Secretary may waive cost-related and administrative prior written approvals required by this part and OMB Circulars A-21 and A-122.  These waivers may authorize recipients to do any one or more of the following: (3) Carry forward unobligated balances to subsequent funding years." Based on this regulation, you may carry-over funds however they can only be spent on approved activities listed in your application or other legislatively allowable activities.

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The legislatively allowable activities the PBI programs are listed in the Section 318 of the Higher Education Opportunity Act (HEOA) as amended, as well as OMB Circular A-21. If you are uncertain whether proposed activity is legislatively allowable or not you should always contact your assigned Program Officer to inquire. They will issue a written response with a determination.

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You are urged to read 74.22 of EDGAR to learn more about Federal requirements related to grant payments. For any cash that you draw from your Department of Education grant account, you must:

- Draw down only as much cash as is necessary to meet the immediate needs of the grant project
- Keep to the minimum the time between drawing down the funds and paying them out for grant activities
- Return to the Government the interest earned on grant funds deposited in interest-bearing bank accounts (except for a small amount of interest earned each year that your entity is allowed to keep to reimburse itself for administrative expenses).

In order to meet these requirements, you are urged to:

- Take into account the need to coordinate the timing of drawdowns with prior internal clearances (e.g., by boards, directors, or other officials) when projecting immediate cash needs so that funds drawndown from ED do not stay in a bank account for extended periods of time while waiting for approval
- Monitor the fiscal activity (drawdowns and payments) under your grant on a continuous basis
- Plan carefully for cash flow in your grant project during the budget period and review project cash requirements before each drawdown
- Pay out grant funds for project activities as soon as it is practical to do so after receiving cash from the Department

Keep in mind that the Department monitors cash drawdown activity for all grants on a weekly basis. Department staff will contact grantees who appear to have drawn down excessive amounts of cash under one or more grants during the fiscal quarter to discuss the particular situation. Grantees that fail to follow Federal cash management requirements may be designated as high-risk, which may affect future funding.

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Grantees that spend $500,000 or more in combined Federal funds (regardless of agency) during fiscal years ending after December 31, 2003, or $300,000 or more in Federal funds during fiscal years ended on December 31, 2003 or earlier, are required to have an annual institutional audit. Generally, these audits, referred to as "A-133 audits" or "single audits," review expenditures of Federal funds across an entire organization instead of specific costs of individual grants. These audits must be conducted in accordance with "Standards for the Audit of Governmental Organizations, Programs, Activities and Functions," published by the Comptroller General of the Government Accountability Office (GAO). Independent Non-Federal auditors selected by the grantee may perform these audits. Grantees that fail to meet the A-133 audit requirement may be designated as high-risk, which may affect future funding.

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According to the Higher Education Opportunity Act (HEOA) as amended, grant funds used for endowments must be matched in equal or greater amounts with funds from non-Federal sources. In addition, no more than 20 percent of an annual grant award can be used to establish or increase an endowment fund at the institution.

If a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.

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You must keep records regarding the use of grant funds, compliance with program requirements, and the date the project used to demonstrate the effectiveness of the project in meeting the grant's objectives. Keep your copy of the approved application. The financial records must show the amount and source of all funds spent on the grant, including any matching funds that were promised in the approved application. The records must document how all federal and matching funds were used. You must also keep records that document other types of information you provided the Department in your annual or final reports, such as records of program participants and the source data used to report on performance measures.

If you purchase equipment with grant funds, you must maintain inventory records until the equipment is no longer needed to meet the project objectives, and then you should request disposition instructions from the Department. Keep copies of all correspondence with the Department regarding the project; GEPA (20 U.S.C. 31) and EDGAR regulations (34 CFR 75.730-732) provide specific requirements for record retention. You may need these records to demonstrate to program monitors or auditors that all expenditures and activities you conducted with the grant were allowable and accurately reported.

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Help with G5 is available through e-mail or by calling the G5 hotline.

> **Hours of Operation:** 8:00 a.m. to 6:00 p.m., Monday-Friday, EST**Toll Free:** 	(888) 336-8930**TTY:** (866) 697-2696**Local:** (202) 401-6238**E-mail:**edcaps.user@ed.gov

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Feel free to review the Code of Federal Regulations (CFR).

Hard copies of the CFR are often available in the reference section of major libraries. For information about purchasing the CFR, go to the GPO online bookstore at http://bookstore.gpo.gov or call the Superintendent of Documents at (202) 512-1800 or toll free at (866) 512-1800.

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A PDF version of EDGAR is available for download and printing at http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html.

The most recent regulations that comprise EDGAR can also be found in the Code of Federal Regulations. Please note that EDGAR comprises **only** Parts 74-99.

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Electronic versions of ED Grant Application and other Forms are available at http://www2.ed.gov/fund/grant/apply/appforms/appforms.html.

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