Frequently Asked Questions
(Updated 07/03/07)

 Administrative Issues

• I use Grants Finance's web site to look up the grant projects my agency has open. What other information is available from the web site?

Currently, there are several reports available on Grants Finance's web site. These reports include: Federal & State Grant Payments End of Year Report, District Summary Report, ESEA Allocation Report and IDEA Allocation Report. Agencies can also access the financial reporting forms for Federal and State grants. These forms include: FS-10, FS-10A, FS-10F, and FS-25.

Visitors to our web site will also find general information about Grants Finance and its functions, as well as a listing of unit staff. We anticipate additional reports and other related information will be made available in the near future. 

• Our business office manager signed an interim request for payment (FS-25) but it was returned with a note asking for an authorized signature. Who is authorized to sign?

The person authorized to sign the certification statement on budgets (FS-10), final expenditure reports (FS-10-F), amendments (FS-10-A) and requests for interim payments (FS-25) is the Chief Administrator of the agency or his/her properly authorized designee.

• Can we use a signature stamp?

Signatures on the Certification Statement must be original. Signature stamps, photocopies and fax copies cannot be accepted.

• Our Charter School has a management company to conduct some or all of the administrative activities for the school.  Can an employee of the management company sign as the Chief Administrator of the school?

Management companies are not eligible recipients of grants administered by SED.  Therefore, their employees should not be permitted to sign the financial documents related to grants.  Such documents should only be signed by the president of the school’s board of trustees, the school’s principal, or another employee of the charter school if such employee has been provided such authority through the vote of the board of trustees.

• I am preparing next year’s budget and would like to confirm my school district’s current year’s allocations plus any amount that is available as carryover.

Allocation data are accessible via Grants Finance's web site.  Separate reports for both last year and the current program year are maintained for the IDEA and NCLB allocation programs.  These reports provide allocation, carryover and budget information.

On the web site, click on Reports followed by District/School Reports,  select the county for your district and then your school.

• Can I prepare my budget to include my allocation plus carryover?

Generally, yes. However, individual Department program managers may require you to follow a different process.

• Our Final Expenditure Report (the FS-10-F/FS-10-F Short Form) was submitted for less than the approved budget and we received our final payment over 90 days ago. I now realized I could have charged other expense items to this grant. Can I amend the final and claim the additional expenses?

Grantees have 90 days once a project is audited and closed to reopen a project for further review. Only in extreme or unusual circumstances will the State Education Department (SED) waive this rule.

• I am preparing the Final Expenditure Report (FS-10-F/FS-10-F Short Form) for a grant, which ended about a week ago. I now realize that the expenses related to the grant do not closely match the approved budget. Can I submit an amendment with the final report so that we can get reimbursed for all the expenses we incurred?

No. Amendments are required to be submitted and approved prior to the end of the grant. An approved budget is an expenditure plan to carryout the purposes of a grant and an amendment is the authority to incur obligations under a revised expenditure plan. To assure expenditures are made according to an approved plan, amendments must be approved prior to the end of the grant.

• Our agency is applying for a grant to conduct a series of district workshops. The description of the workshops and other details of the grant which are rather lengthy will not fit on the budget form (FS-10). How much detail should I provide?

Often detailed descriptions cannot be accommodated on the FS forms. It is appropriate to indicate in the budget "see attached" and provide an attachment which briefly and clearly describes the item(s) and other pertinent details of the proposed expenditure.

• Our school's administrative offices have moved. How can we get our school's address information updated so that checks are mailed to the proper address?

In order to report any changes to the payee information including a change of address, the agency must complete a Payee Information (PI)  form.   A copy of this form may be obtained by contacting the Grants Finance Office.

• I have had costs disallowed on a final expenditure report (FS-10-F/FS-10-F Short Form) because the costs were not encumbered during the project period. When exactly is an encumbrance incurred on a grant? Are the rules different for State versus Federal grants?

All project encumbrances, whether on a State or Federal grant, must be made within the approved funding period of the grant. Costs encumbered outside the project dates cannot be reimbursed on the final. However, the type of cost affects when the encumbrance is made. For example, if the cost involves the performance of work other than personal service, the encumbrance is made on the date on which the grantee makes a binding written commitment to obtain the work. A contract would be a type of binding written agreement. An encumbrance for travel, on the other hand, is treated differently. In this case, the encumbrance is made when the travel is actually taken. For more specific examples, please refer to the General Criteria under the Audit Section of our Guidelines for Federal and State Aided Grants.

• We recently received a  Notification of Overpayment (Form FS-80) indicating that SED transferred the amount we were overpaid on one grant project to another open project.  Can we send a refund check instead of offsetting the amount owed to another grant project?

It is SED's policy to transfer overpayments whenever possible.  As Final Expenditure Reports (FS-10-F/FS-10-F Short Form) are processed, if the audit results in an overpayment a Notice of Overpayment (Form FS-80) is sent to the local agency identifying the project that was overpaid; and the project charged for the overpayment.  If there are no eligible open grants or grant contracts, the notice will instruct the local agency to send a refund check.

• Space for retaining previous year's records is at a premium.  Can you tell me how long I need to maintain the financial records for the grants our agency received?

General supporting documentation must be retained for the current year plus six prior years unless otherwise specified by program requirements.  Additionally, audit or litigation will "freeze the clock" for records retention purposes until the issue is resolved.

For more specific information, the State Archives publishes Records Retention and Disposition Schedules, which can be accessed at the following web site:  http://www.archives.nysed.gov/a/nysaservices/ns_mgr_pub41.shtml 

FS-10 and FS-20 Budget Forms

• Which budget form is required for this project?  Should the FS-10 or FS-20 be used?

The RFP/Application will specify what budget form should be submitted.   If you have reviewed the RFP/Application and still have questions about this, contact the SED Program Office listed in the RFP/Application materials.

FS-10-F Short Form

• Now that we are using the FS-10-F Short Form, does that mean we don't have to keep detailed records?

Although only summary information is reported on the FS-10-F Short Form, there are no changes to the level or type of information agencies are required to maintain.  Supporting or source documents are required for all grant related transactions entered into the local agency's recordkeeping system.  The level of documentation must adequately support all grant expenditures.

• We recently received the notice indicating that we should use the new Final Expenditure Report, FS-10-F Short Form, for grants ending 8/31/05 or later.  Some of our reports have already been submitted.  Will we be required to do them over using the new form?

No.  If your agency has already prepared the final expenditure report using the FS-10-F rather than the FS-10-F Short Form, it will be processed and money owed will be paid.

• We were notified that additional financial information must be submitted to the NYSED program office along with the final program report.  Since we submitted the FS-10-F Short Form, can we disregard this notice?

No, because some grant programs require specific information to be colleted and reported to the granting authority (e.g. United States Department of Education).  If the new short form does not capture this information, SED program offices may require additional information be reported as part of their final program reports.

• The FS-10-F Short Form - What does it mean for our Special Legislative Project?

The FS-10-F Short Form should be used to report your final expenditures, in accordance of the terms of your approved FS-10.  Your disbursement records supporting your final expenditures must continue to be maintained by your agency and be reported to this Department ONLY WHEN you are requested to do so.

PLEASE NOTE:  Your final program narrative, which is your written description of how the funds were spent, is a continued requirement for Special Legislative Projects.  Your final program narrative MUST accompany your FS-10-F Short Form.

Purchased Services

·       We are preparing a budget for the new year and are having difficulty breaking out the planned expenditures according to specific categories of expenses.  Since our agency will be providing the services, can we report all or some of the costs in Purchased Services (Code 40)?

Purchased services costs generally include only those costs purchased from another entity.  Grant recipients cannot contract or purchase services from themselves.  However, agencies that have a Cost Allocation Plan that complies with Federal cost principles may charge the appropriate Central Services Costs in Purchased Services (Code 40).  For more information on Cost Allocation Plans, refer to Grants Finance Policy #01-01.

• We will be using some of our grant money to pay for mailing and courier service. What code should be used for these costs?

Courier service costs and any metered postage costs should be included in code 40, Purchased Services. Generally stamps are purchased out of a petty cash fund and should be included as Supplies and Materials, code 45.

• We have been placing association memberships, shipping charges, faxing and telephone (including teleconferencing) expenses in code 45, Supplies and Materials. Is this correct?

Memberships, shipping charges, costs of faxing and telephones should be reported in code 40, Purchased Services.

Equipment

·       We recently received the new policy advisory that defines equipment as items costing $5,000 or more and having a useful life of more than one year.  Since our agency has a policy to capitalize all equipment items costing $1,000 or more, can we still include those items in the equipment category, Code 20?

 

No.  Beginning with the 2005-06 budgets for grants and grant contracts awarded by NYSED, only those items with a unit cost of $5,000 or more can be reported in Code 20, “Equipment”.   Other items with a unit cost less than $5,000 must be reported in Code 45, “Supplies and Materials”.

 

For budgets for grants and grant contracts awarded in 2004-05 or earlier, items with a unit cost of $1,000 or more must continue to be reported in Code 20, “Equipment”.

 

·       Our agency’s policy is to capitalize all equipment items costing $1,000 or more and having a useful life of one year or more.  Are we now required to change our policy to $5,000 or more because NYSED raised the threshold for equipment for grants and grant contracts?

 

No.  The responsibility and authority to establish the appropriate dollar threshold for capitalizing equipment for financial statement purposes resides with the local agency.  However, for grants and grant contracts administered by NYSED, items with a unit cost of $5,000 or more must be reported in Code 20 (Equipment) and items with a unit cost of less than $5,000, must be reported in Code 45 (Supplies and Materials), on the Budget (FS-10), Budget Amendment (FS-10-A), and Final Expenditure Report (FS-10-F).

 

·       Our agency requires all equipment items costing $500 or more must be included in the assets inventory.   Since NYSED has defined equipment to be items costing $5,000 or more and having a useful life of more than one year, should we change our policy on assets inventory to include only those equipment items costing $5,000 or more?

 

No.  The Fiscal Guidelines for State and Federally Funded Grants require organizations to maintain an inventory list for any equipment items with a unit cost of $5,000 or more purchased using grant funds.  However, organizations should have a policy that establishes the dollar minimums for including equipment or groups of equipment in their inventory of capital assets.  The local governing board should determine what represents a significant value and set the minimum accordingly.  It is expected that the dollar minimum would be established to adequately safeguard the local agency’s assets.  NYSED’s reporting requirements for equipment purchases for grant projects should not be a determining factor when the dollar minimums are established.  Most often the dollar minimum for equipment inventory and the dollar threshold for reporting equipment items for grant purposes will differ.

 

·       Where do we report items such as computer components that were purchased as part of a system?  The individual components have a unit cost of less than $5,000 but the cost of the complete system is more than $5,000.

 

If the components of the computer system make it useable for the purpose for which it was acquired, the total cost of the system must be used in determining whether it is reported as “Equipment”, Code 20 or “Supplies and Materials”, Code 45.

 

·       Our organization has a multi-year grant contract that began with the 2003-04 year.  We are preparing the budget (FS-10) for 2005-06 and plan to report items in the equipment category that cost $5,000 or more.  Are we correct doing this?

 

Yes.  Beginning with the 2005-06 budgets for grants and grant contracts awarded by NYSED, only those items of equipment costing more than $5,000 can be reported in Code 20, “Equipment”.  In some grant programs NYSED may require additional information be included in a Budget Narrative section of the grant application.  Please refer to the instructions for completing application for any additional information that may be required.

Indirect Costs

• Can you explain what indirect costs are?

Indirect costs are costs of activities that benefit more than one program or objective and, therefore, cannot be readily assigned to only one specific program or objective. Indirect costs are generally classified under functional categories such as general maintenance and operation expenses, general office and administration expenses, general overhead expenses, and other allowable general expenses.

• I am preparing a budget for the upcoming school year. How can I find out what the indirect cost rate is for my agency?

A notification letter will be sent to each school district and BOCES each year when the rates are calculated. You may call Grants Finance at (518) 474-4815 if you are unsure of your rate.

• How was our indirect rate calculated?

SED calculates the indirect cost rate for public schools and BOCES using data reported on the ST-3 or SA-111 forms respectively using a methodology approved by the US Department of Education. The rate for Colleges and Universities is set by Federal guidelines. The indirect cost rate for all other agencies is set based on an average developed from data reported by school districts.

• The indirect cost rate for my agency is very low. Is it possible to receive a higher rate?

Those other agencies that are not a public school, BOCES, or included in the category of Colleges and Universities can request a higher rate by completing and submitting an application to appeal form (FS-87-R). Presently, the maximum rate is 8%.

• Can you explain the difference between the unrestricted indirect cost rate and a restricted indirect cost rate?

Restricted rates are established for use on programs that prohibit supplanting, where funding is intended to "supplement and not supplant" other State or local funding. The restricted rate filters out costs that would be incurred by the agency whether or not any particular grant program was in operation. The restricted rate is currently used for all State and Federal grant programs flowing through the Department.

Unrestricted indirect cost rates are used with school food service programs and may also be used by local agencies on certain direct funded Federal programs.

• Can I budget indirect costs for all my grants?

Although for most grants indirect costs are an appropriate cost of a grant, there are some that prohibit indirect costs from being charged or limit the amount that may be charged. If you are unsure of the applicability of indirect costs for a specific grant, you should inquire with the program contact for that grant.

Central Service Costs

• Can you explain what Central Service Costs are?

Central services costs are the costs of those common services that are provided to two or more units of an organization that benefit from the service. Often central services include, but are not limited to such services as printing, mailing, computer and technical support, and purchasing.

• Our agency allocates costs of some central services such as printing and computer support to the programs that benefit from the services. Can we include them in Purchased Services, code 40?

Central service costs can be included in code 40, Purchased Services, if the agency has a Cost Allocation Plan that meets the conditions listed in Policy Advisory #01-01 Allocating and Billing Central Service Costs to Grants. 

·       Can you explain the difference between Central Service Costs and Indirect Costs?

Generally central service costs benefit a certain group of programs or units whereas indirect costs benefit the organization as a whole. Often particular services are common to both categories, and some part of the total costs may be included in the central services costs and the remainder included in the indirect costs. The costs cannot be duplicated and the allocation of indirect costs or central service costs must not result in an over recovery of cost.

• Our 10 month employees are paid stipends for participating in grant activities during the summer. Our business office policy states that only staff receiving fringe benefits may be placed in codes 15, Professional Salaries, or code 16, Support Staff Salaries. Can we report these payments in code 40, Purchased Services?

Compensation for services paid to an employee must be reported as salary in code 15, Professional Salaries, or code 16, Support Salaries, depending on the services provided. An agency cannot pay its employees in code 40, Purchased Services. However, Purchased Services is the appropriate code for employee tuition or tuition related costs.

• Our agency has part-time and temporary substitutes. Can we report the costs of the substitutes in code 40, Purchased Services?

Substitutes are generally employees of an agency. Employees can be permanent or temporary, part-time or full-time, paid per diem or per hour. Payments to the substitutes must be reported as salary in code 15, Professional Salaries, or code 16, Support Staff Salaries. If the substitute is a not an employee, the payments should be reported in code 40, Purchased Services.

• Occasionally student participation on field trips is part of our grant program. We contract with a bus company for transportation, and we pay admission costs and meal expenses for the students. Is code 40, Purchased Services, the proper code for these expenses?

Code 46, Travel Expenses, specifically includes pupil transportation expenses and conference costs. It also includes other costs relating to student participation in educationally related field trips.

• Occasionally outside consultants are used to conduct workshops and we pay their travel expenses and we provide workshop materials. How should these expenses be reported?

Generally, Consultant fees are reported in code 40, Purchased Services. If the consultant's travel costs are paid separately, they should be reported in code 46, Travel Expenses. Workshop materials provided by your agency may be included in code 45, Supplies and Materials.

These items should not be charged to grants because they are not necessary and reasonable for the proper administration of the grant. In addition, the State Comptroller has determined that "favors" represent gifts of public funds which are unallowable under the State Constitution.