Supporting Statement

A. Justification

1. Explain the circumstances that make the collection of information necessary. Identify any legal or 

administrative requirements that necessitate the collection. Attach a copy of the appropriate 

section of each stature and regulation mandating or authorizing the collection of information.

Public Law 98-95, the Challenge Grant Amendments of 1983, established a new Endowment Grant 

Program authorized by Title III of the Higher Education Act. In 1986, the name was changed to the 

Endowment Challenge Grant Program. In 1998, Congress amended Title III of the Higher Education 

Act by adding endowment building as an allowable activity under Title III and Title V Programs.

Under the Endowment Challenge Grant Program the Secretary was specifically authorized to make 

grants to eligible institutions of higher education for the purpose of increasing endowment funds at 

those institutions. Congress specifically identified that not more than 20% of a grantee’s total 

budget may be used for increasing and building endowments at the grantee institution.

The “endowment fund corpus” consists of the Federal grant and institutional match. The institution 

may not spend any of the endowment fund corpus for the length of the 20-year grant period. At the 

end of the grant period, the grantee may use the endowment fund corpus for any educational 

purpose.

In general, a grantee may spend up to 50% of endowment fund income earned during the 20-year 

grant period. Endowment fund income is the value of the endowment fund minus the endowment 

fund corpus. The institution may use that income to defray expenditures necessary for the 

operation of the institution, including general operating and maintenance expenses.

The statute establishing this Endowment Challenge Grant Program, and for the Title III and Title V 

endowment building activity, requires the grantee to:

a. Establish an endowment fund independent of any other endowment fund at the institution;

b. Invest the endowment fund corpus and income in low-risk securities in which a regulated insurance 

company may invest under the law of the state;

c. Exercise judgment and care in investing;

d. Spend no more than 50% of the total aggregate endowment fund income;
e. Withdraw no part of the endowment fund corpus before 20 years, both the matching funds and 

Federal funds;

f. Repay the Secretary if the institution withdraws part of the endowment fund corpus or more than 

50% of the income before 20 years; and

g. Provide to the Secretary information to audit or examine expenditures made from the endowment 

fund corpus or income.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new 

collection, indicate the actual use of the agency has made of the information received from the 

current collection.

The information submitted on this form will be analyzed by the program office to determine 

whether or not the grantee has complied with the statutory and regulatory requirements. In cases 

of non-compliance, the Department must see that the grantee takes corrective action.

3. Describe whether, and to what extent, the collection of information involves the use of 

automated, electronic, mechanical, or other technological collection techniques or forms of 

information technology, e.g. permitting electronic submission of responses, and the basis for the 

decision of adopting this means of collection. Also describe any consideration given to using 

technology to reduce burden.

The electronically accessible form will collect the same information as the previous form. A “Dear 

Colleague” letter has been sent out to grantees required to report on endowments informing them 

of the new electronically accessible form. In addition, a web link to the electronic endowment 

reporting form, a temporary pin number and detailed instructions have been provided. 

Respondents will be required to complete the electronic form and submit it online by the requested 

deadline. 

4. Describe efforts to identify duplication. Show specifically why any similar information already 

available cannot be used or modified for use for the purposes described in item 2 above.

The Department has reviewed the information required in this financial report form and has looked 

elsewhere in the Department for duplicate information. We have found there is no duplicate 

information being requested within the Department. Grantee institutions do not send information 

on these particular endowment funds to any other Federal office.

5. If the collection of information impacts small businesses or other small entities (Item 8b of IC Data 

Part 2), describe any methods used to minimize burden.

The collection of information does not involve small businesses or other small entities.
6. Describe the consequences to Federal program or policy activities if the collection is not 

conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing 

burden.

If this information was not collected or collected less frequently than annually, we would not know 

whether grantees were properly investing the endowment monies or whether they had used any 

portion of the corpus, or spent more than 50% of the income.

7. Explain any special circumstances that would cause an information collection to be conducted in a 

manner:

The only special circumstance of this collection is that program regulations (34CFR Part 628.47(b)) 

require grantees to retain each year’s records for a minimum of five years after the grant period 

ends.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal 

Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting comments on the 

information collection prior to submission to OMB. Summarize public comments received in 

response to that notice and describe actions taken by the agency in response to these comments. 

Specifically address comments received on cost and hour burden.

No consultations were conducted with persons outside the agency since there has been no funding 

for this program since FY 1995 and this program is considered to be in a close-out status. We will 

publish 60-day and 30-day Federal Register Notices to allow public comment.

9. Explain any decision to provide any payment or gift to respondents, other than remunerations of 

contractors or grantees.

No payments or gifts are provided.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance 

in statute, regulation, or agency policy.

The Department’s disclosure policies adhere to the provisions of the Privacy Act.

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior 

and attitudes, religious beliefs, and other matters that are commonly considered private. The 

justification should include the reasons why the agency considers the question necessary, the 

specific uses to be made of the information, the explanation to be given to persons from whom

the information is requested, and any steps to be taken to obtain their consent.

No sensitive personal information is solicited.
12. Provide estimates of hour burden of the collection of information.

The estimated professional burden hours are 3125 hours. 

Reporting Burden:

The estimated professional burden hours for this collection of this information are 2500 hours.

This figure is calculated base on 1.25 burden hours per respondent. Since there are 2500

respondents, 1.25 hour x 3125 respondents = 3125 estimated burden hours.

Therefore, the total estimated annual burden hours are 3125 hours. 

Recordkeeping Burden:

The Department’s regulations at 34 CFR 628.47(a) requires that grantees keep the following records:

(1) The source, kind and amount of matching funds;

(2) The type and amount of investments of the endowment fund;

(3) The amount of endowment fund income; and

(4) The amount and purpose of expenditures of endowment fund income.

The Department believes that these records are generated electronically as a matter of usual and 

customary business transactions (e.g. bank records); therefore, in accordance with 5 CFR 

1320.3(b)(2), the Department’s burden estimate does not include burden associated with 

generating the records required by 34 CFR 628.47(a). Notwithstanding, the Department recognizes 

that grantees incur a minimum clerical burden in maintaining the required records. The Department 

estimates that each grantee would spend not more than (15) minutes per year filing pertinent 

records. Therefore, the recordkeeping burden is as follows: 2500 Respondents x 15 (.25 hours) = 

3125 hours.

Total Burden Hours:

The total estimated annual burden hours are 3125 hours. This final figure is calculated using the 

estimated based on 1 professional burden hour per each respondent. Since there may be an 

estimated 2500 respondents in any given fiscal year, 1.25 hour x 2500 respondents = 3125.

Burden Hour Costs:

The figure noted here represents the resources needed and the costs associated for all the 

respondents to complete the financial report form.
Costs:

Professional 2500 Respondents x $144 = 360,000

Clerical 625 x $8 = $5,000

No other cost to respondents. 

13. Provide an estimate of the total annual cost burden to respondents or record keepers resulting 

from the collection of information. (Do not include the cost of any hour burden shown in items 12 

and 14.)

The Department notes that grantees may incur cost in complying with the audit required by 34 CFR 

628.47(e); however, since these audits are conducted as part of the Federal Government’s Single 

Audit program (OMB Circular A-133), the Department cannot determine the relative proportionate 

costs for these particular program requirements.

14. Provide estimates of annualized cost to the Federal government. Also, provide a description of 

the method used to estimate cost, which should include quantification of hours, operational 

expenses (such as equipment, overhead, printing, and support staff), and any other expense that 

would not have been incurred without this collection of information. Agencies also may 

aggregate cost estimates from Items 12, 13, and 14 in a single table.

Estimate of cost to the Federal Government – Item A) represents the amount of clerical and related 

resources required to prepare the annual mailing of information regarding the new electronic 

financial report form. Item B) represents the amount of related resources required to process the 

incoming financial report data and the day-to-day management of related technical information. 

We also estimate for preparation and review staff will spend 1 hour per package.

A. Average Hourly Clerical Rate

Clerical Staff N/A

B. Average Hourly Professional

 Staff Rate: GS 13/9 = $43.50 x 1 hour x 2500

Analysis/Review = $108,750

Duplication/Mailing = 2500 x .46 = $1,150

15. Explain the reasons for any program changes or adjustments to #16f of the IC Data Part 1 Form.

The changes or adjustments are due to the increased number of respondents. The number of

respondents has changed from the last time the form was submitted. In 1998, Congress amended
Title III of the Higher Education Act by adding endowment building as an allowable activity under 

Title III and Title V Programs. The electronic version was not available until June 2012.

16. For collections of information whose results will be published, outline plans for tabulation and 

publication. Address any complex analytical techniques that will be used. Provide the time 

schedule for the entire project, including beginning and ending dates of the collection of 

information completion of report, publication dates, and other actions.

We will use the information submitted by the grantees to determine the progress of increasing their 

endowment fund and to monitor the grantees’ compliance with regulations. The Department does 

not intend to ever publish the data contained in these reports.

17. If seeking approval to do not display the expiration date for OMB approval of the information 

collection, explain the reasons that display would be inappropriate.

We have no objection to displaying this information.

18. Explain each exception to the certification statement identified in the Certification of Paperwork 

Reduction Act.

No exceptions are requested. 

C. Collection of Information employing Statistical Methods

No statistical methods are used in the collection of this information.