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Awardee Guide to National Service 

Criminal History Check (NSCHC)

Enforcement of Cost-Based 

Disallowance

Effective January 26, 2022

Title: Awardee Guide to National Service Criminal History Check (NSCHC) Enforcement

of Cost-Based Disallowance

Date posted: January 26, 2022

Unique identifier: CNCS 018

Topic: National Service Criminal History Checks

Summary: This document provides guidance on effective practices in assessing and

documenting cost-based disallowance resulting from NSCHC noncompliance.

The contents of this document do not have the force and effect of law and are not

meant to bind the public in any way. This document is intended only to provide clarity

to the public regarding existing requirements under the law or agency policies.
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Contents

Introduction ................................................................................................................. 3

Cost Categories .......................................................................................................... 3

Determining the Amount of Disallowance ............................................................... 4

 Disallowance of Match ....................................................................................................... 4

 Calculating FICA Disallowance.......................................................................................... 4

Documenting Disallowance ...................................................................................... 4

 Reporting Enforcement of NSCHC Disallowance at Subrecipient Sites.......................... 5

FAQs.............................................................................................................................. 6
3

Introduction

This document supports the implementation of the National Service Criminal History Check

(NSCHC) Manual, specifically, how to assess and document cost-based disallowance for 

findings of noncompliance. Refer to the NSCHC Manual for details on compliance

requirements for NSCHC, as well as the applicable administrative remedies and 

enforcement actions related to the nature of noncompliance. The NSCHC regulatory

requirements can be found at 45 C.F.R. § 2540.200 -.207 and the AmeriCorps NSCHC 

webpage, https://americorps.gov/grantees-sponsors/history-check.

AmeriCorps requires all prime grantees to implement this guidance for NSCHC 

disallowance.

Cost Categories

Grant recipients that have findings of noncompliance with NSCHC checks will have 

disallowance applied to the following cost categories, by AmeriCorps award type:

Grant Type Staff

Salaries

Staff

FICA

Member

Living

Allowance

Member

FICA

Volunteer

Stipend

AmeriCorps State and 

National Operational Grant * *  

Senior Companion Program 

& Foster Grandparent 

Program

  

Retired and Senior 

Volunteer Program  

Senior Demonstration 

Program Grants receiving

funding from AmeriCorps

  

VISTA Program and Support 

Grants  

Martin Luther King, Jr. Day 

of Service; September 11th 

Day of Service

 

Social Innovation Fund;

Volunteer Generation Fund  

* Staff on fixed-amount grants are not required to obtain NSCHC. Disallowance of staff salaries 

and FICA only applies to cost-reimbursement ASN operational grants.

Note: Cost-based disallowance will not include the disallowance of AmeriCorps 

member hours. In addition, meal or mileage reimbursements are not considered 

stipend payments and are not disallowable costs for NSCHC noncompliance.
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Determining the Amount of Disallowance

To identify the total amount of grant funds expended on applicable disallowed cost 

categories, grant recipients should run payroll or accounting system reports for each 

NSCHC record identified for cost-based disallowance. The time range of the reports 

should align with the period of noncompliance identified by monitoring staff. If the 

period of work or service is less than six months or the period of noncompliance is less 

than six months, the cost will be adjusted to coincide with the period of service, work, 

or period of noncompliance. When periods of noncompliance are less than a full pay 

period, disallowance calculations may be prorated. Generally, the time period of 

disallowance will not exceed 6 months; however, please refer to the NSCHC Manual

for more information.

Grantees should use the financial expenditure records to estimate the amount of 

disallowed costs. If the organization’s financial system or practices cannot support the 

separation of payments to individuals into distinct categories that separates

salary/stipends from mileage and other reimbursements that are not disallowed cost 

categories, then timesheets should be used to determine the hours worked/served on the 

grant during the period of noncompliance. These hours should be multiplied by the 

individual’s hourly pay rate (or estimated hourly pay rate, if not paid hourly). 

Disallowance of Match

Matching funds are held to the same requirements as federal funds and any disallowed 

match may not be used to support a statutory match requirement. Where costs were paid 

with matching funds, the disallowance of those matching costs may also result in 

disallowance of the related Federal funds. When AmeriCorps is made aware of 

disallowance that includes match, AmeriCorps will notify grantees of the required 

corrective action related to these instances when the disallowed match impacts the 

grantee’s ability to meet the match requirement.

Calculating FICA Disallowance

Organizations vary in their approach to charging FICA costs. Grant recipients should 

consult with their payroll and accounting administrators to determine the amount of 

FICA their organization charges individuals in NSCHC-required positions. If applicable 

to the AmeriCorps award type, obtain a report showing the total funds expended for 

FICA for each member and/or staff with noncompliant NSCHC records during the 

period applied to disallowance.

Documenting Disallowance

Cost estimates must be justified by the financial expenditure records related to each 

disallowed cost category, which should be the primary evidence source for 

disallowance calculations. This includes documentation of matching funds, where 

applicable. Financial records should reflect the dates of noncompliance specified by 

monitoring staff. In situations where calculations are being used to determine the 

disallowance amount, totals reported must be supported by calculations. 
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Reporting Enforcement of NSCHC Disallowance at Subrecipient Sites

Prime grantees must enforce NSCHC cost-based disallowance with subrecipients for 

applicable NSCHC noncompliance. Refer to the NSCHC Manual for details on NSCHC 

findings and disallowance. When noncompliance is discovered, those monitoring must 

contemporaneously document the deficiency in writing. Prime grant recipients must notify 

AmeriCorps when NSCHC noncompliance results in the implementation of cost-based

disallowance. This notification may take place after the prime grant recipient has

completed the process of corrective action and determined the disallowance amount for 

the subrecipient(s). Please note that discoveries of ineligible staff or participants require 

immediate notification to AmeriCorps, for awareness.

Prime grantees may submit findings as they are processed or at the completion of a 

monitoring cycle involving multiple subrecipient grants. When AmeriCorps receives 

multiple debt referrals from the same prime at once, the debt collection notice is typically 

consolidated into one debt letter. 

AmeriCorps has provided tools to support the submission of findings of noncompliant 

NSCHC records at a subrecipient site that result in cost-based disallowance. These tools 

are described below and are available on https://americorps.gov/granteessponsors/history-check.

To inform AmeriCorps of disallowance enforcement actions with subrecipients, prime 

grant recipients will submit the following to (GrantsDebtCollection@cns.gov), with a copy 

to the assigned Portfolio Manager and the Office of Monitoring (monitoring@cns.gov):

1. A roster indicating the noncompliant individuals, the specific reason for 

noncompliance, and the disallowance amount per individual. In many cases, this 

information is included in a prime grantee’s monitoring report. It is important to 

ensure the specific nature of NSCHC noncompliance is identified for each record. 

Refer to the NSCHC Manual for details on the potential nature of noncompliance 

related to NSCHC. Use of the following tools is optional:

• The “NSCHC Simple Log” identifies specific reasons for noncompliance and 

may be used to document the noncompliant records and disallowance 

amount for each. 

• The “Individual NSCHC Disallowance Form” may be used to document the 

details of a single noncompliant record and corresponding disallowance.

• The “NSCHC Quick Disallowance Calculator” or “Debt Establishment 

Request Form” may be used to calculate the total disallowance amount. 

2. Documentation to support the disallowance amounts or calculations for each 

individual, such as financial expenditure reports, payroll records, timesheets, etc. 

This includes documentation of matching funds, where applicable, as matching 

funds are held to the same requirements as federal funds. Any disallowed match 

may not be used to support a statutory match requirement.
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3. (Recommended) Debt Establishment Request Form. Use of this form is optional but 

recommended by AmeriCorps. It may be used to calculate the total disallowance 

amount for the package as well as record a summary of key details, such as grant 

and subrecipient information, match vs. federal amounts, and how the 

noncompliance was discovered (origin of debt).

When prime grant recipients identify disallowance on a subrecipient level, documentation 

must be maintained within the grant records that demonstrates implementation of the 

enforcement action. AmeriCorps monitoring officials will conduct reviews of how prime 

grant recipients implement enforcement action and document disallowance 

calculations. It is recommended that prime grant recipients ensure that disallowance 

implementation includes certification of a higher-level review. 

FAQs

1. Salary is identified as a disallowable cost category. Is the employee responsible for 

paying back salaries received and, if so, is this gross income or net income?

Under no circumstances are grant recipients permitted to require employees to reimburse 

the agency for any disallowed salaries. The grant recipient organization is responsible for 

paying disallowances to AmeriCorps for costs associated with staff salary, FICA, and living 

allowance/stipend payments to national service members or volunteers.

2. Are stipends paid out for holiday, vacation, or sick leave included in the disallowance? 

Yes. All stipend funds within the period of noncompliance, regardless of type or purpose, 

that have been paid to an individual in an NSCHC-required program with noncompliant 

NSCHC records are to be disallowed. Note that meal or mileage reimbursements are not 

considered stipend payments and are not disallowable costs for NSCHC noncompliance.

3. Many of our staff positions are paid for, partly or completely, out of matching funds. How 

is disallowance handled in this situation?

It is the expectation that grant recipients consistently apply the enforcement of 

disallowance to the AmeriCorps award, including matching funds that may have been 

paid for noncompliant NSCHC records for individuals working or serving in NSCHC-required 

programs. Where costs were paid with matching funds, the disallowance of those 

matching costs may also result in disallowance of the related Federal funds. Reported 

enforcement of disallowance by prime grantees to AmeriCorps should clearly identify the 

Federal and non-Federal share of expenditures within the estimated amount of 

disallowance. When AmeriCorps is made aware of disallowance that includes match, 

AmeriCorps will notify grantees of the required corrective action related to these 

instances, when the disallowed match impacts the grantee’s ability to meet the match 

requirement.