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GRANT MANAGEMENT

    Awards Beginning 7/1/01 or Later

    Download the text portion of this document in Microsoft Word format

    Download the Appendices/forms in PDF Adobe Acrobat

    1. Interim Equipment Inventory Report
    2. Interim Non-Employee Compensation Report
    3. Interim Personnel Report
    4. Interim Subcontract Report
    5. Interim Consultant Report
    6. Final Equipment Inventory Report
    7. Final Non-Employee Compensation Report
    8. Contract Modification Request Check-Off Sheet
    9. Contract Modification DOE Approval Checklist
    10. Budget Modification Request Worksheet

    New Jersey Department of Education
    Contractor’s Manual for Discretionary Grants
    (Managing a Third-party Contract)

    Table of Contents

    Introduction

    STATE BOARD OF EDUCATION

    Part One: Success!
    General Information All Contractors Should Know

    What Is All This Paper?
    Do I Need To Know It All?
    What Do I Keep In A Grant File?
    What Regulations Apply To My Contract?
    Which Federal Circulars Apply To My Grant Project?
    Who Or What Is EDGAR?
    Are There Other Requirements I Should Know About?
    How Do I Communicate With The Department Of Education?

    Part Two: Spending Grant Funds

    What Are My Responsibilities?
    What Are My Time Lines For Spending Grant Funds?
    How Will I Get Reimbursed For Expenditures?
    How Do I Know What Expenditures Are Allowable?
    How Do I Know What Program Activities Are Allowable?

    Part Three: Subcontracts (Subcontractors, Consortia, Partners, Subgrants, Subrecipients)

    What Are Subcontractors?
    Are Subcontractors Subject To Regulations?
    Are Consultants Or Vendors Subcontractors?
    Do I Need A Formal Contract With Subcontractors?
    Can I Approve Changes To My Subcontracts?

    Part Four: Grant-Funded Equipment

    How Do I Purchase Grant Equipment?
    Who Owns the Grant-Funded Equipment?
    Who Maintains Inventory Of Equipment?
    Who Is Responsible For Equipment Security?
    Must I Use Equipment Only For Grant Activities?
    What About Use Of Equipment After The Contract Is Over?
    How Do I Dispose of Obsolete Equipment?

    Part Five: Matching Funds

    What Are Matching Funds?
    How Are Matching Funds Treated?
    What Qualifies As A Match?

    Part Six: Program Income

    Can My Agency Generate Income Through My Grant?
    Can I Spend Program Income?
    What About Program Income Generated After The Grant Is Over?
    Do I Need To Keep Records For Program Income?
    Can I Copyright Material?

    Part Seven: Contract Monitoring and Reporting

    Will My Program Be Monitored On-Site?
    What Occurs During Contract Monitoring?
    What If I Am Not Monitored On-Site?
    What Reports Are Required?
    How Do I Complete Reports?
    Where Do I Send Reports?
    What Happens If I Miss A Report Due Date?
    What Does The DOE Do With Reports?

    Part Eight: Budget Flexibility and Contract Modifications

    How Much Flexibility Do I Have Within My Approved Budget?
    When Must I Write To Get Approval To Change My Grant?
    Can You Explain The Restricted Line Items (Equipment, Subcontracts and Indirect Costs Changes)?
    What Should Be Included In A Contract Modification Request?
    Do You Have Examples of Good Contract Modification Requests?
    What Are Some Common Problems With Contract Modification Requests?
    Where Do I Send My Contract Modification Request?
    What Happens To My Request Once It Has Been Submitted?

    Part Nine: Contract Closeout

    How Do I Close Out My Contract?
    Can Costs Be Disallowed By The DOE?
    When Do I Get The Final Payment?
    Do I Send A Check If There Are Unspent Grant Funds?
    How Long Do I Keep Grant Records?

    Part Ten: Audit

    Will I Be Audited?
    How Can I Safeguard My Grant Against Audit Findings?

    Part Eleven:

    Appendices (PDF )

    1. Interim Equipment Inventory Report
    2. Interim Non-Employee Compensation Report
    3. Interim Personnel Report
    4. Interim Subcontract Report
    5. Interim Consultant Report
    6. Final Equipment Inventory Report
    7. Final Non-Employee Compensation Report
    8. Contract Modification Request Check-Off Sheet
    9. Contract Modification DOE Approval Checklist
    10. Budget Modification Request Worksheet
    Glossary

    Adobe Acrobat

    Introduction

    As project director of a discretionary grant program awarded by the New Jersey Department of Education (DOE), you are responsible for managing and implementing the educational program and budget described in your final approved grant application. You must also ensure that your agency meets its responsibilities to the DOE under the third-party contract. Where possible, the individual designated by the applicant agency to serve as the project director should continue to serve in that capacity for the entire length of the grant program. This will help to ensure consistency in program administration, full understanding of overall program goals and objectives, and steady progress toward fulfilling the program plan.

    The DOE is required to assure to its awarding agency that funds are awarded and expended in accordance with program and administrative regulations. To address this requirement, the DOE is committed to assisting the grant recipient agency (you) with the implementation of successful grant programs that will avoid audit findings.

    This Contractor’s Manual for Discretionary Grants is intended to provide information and general guidance to project directors in managing discretionary grant programs under third-party contracts issued by the DOE. Nothing presented in this manual is intended to supersede, or be construed as superseding, applicable state or federal legislation, regulations, or any other requirements that govern the use of discretionary grant funds. The project director is advised to refer to specific regulatory documentation when researching specific questions.

    The DOE Office of Grants Management and Development (OGMD) has developed this manual and welcomes comments and questions. Please provide any comments and/or questions to the Application Control Center (ACC), New Jersey Department of Education, 100 River View Executive Plaza, P.O. Box 500, Trenton, NJ 08625-0500.

    STATE BOARD OF EDUCATION

    It is a policy of the New Jersey State Board of Education and the State Department of Education that no person, on the basis of race, color, creed, national origin, age, sex, handicap or marital status, shall be subjected to discrimination in employment or be excluded from or denied benefits of any activity, program or service for which the department has responsibility. The department will comply with all state and federal laws and regulations concerning nondiscrimination.


    Part One: Success!
    General Information All Contractors Should Know

    What Is All This Paper?

    Congratulations! Your agency was successful in completing the application and pre-contract revision process and has received an award for a discretionary grant program. The packet your Chief School Administrator (CSA) or Chief Executive Officer (CEO) has received from the DOE consists of the following:

    Award Letter

    Third-party Contract: This document is a five-page agreement to be signed by the contractor (grant recipient agency) and the DOE.

    • Page One - This page includes the contract number, RFP name, RFP number, name of contractor, contractor’s chief financial officer, name and telephone number of the DOE program officer who oversees the grant program, federal Catalog of Federal Domestic Assistance (CFDA) number of the program (if applicable), the start and end dates of the contract, regulations pertaining to this contract which are incorporated by reference, and signature lines for the contractor’s CSA/CEO, and the appropriate DOE official. The RFP name and contract number as they appear on page one of the contract, are important identifiers when communicating with the DOE at any and all times throughout the duration of the contract period.
    • Page Two - This page identifies the method of payment and the due dates of progress and final program and fiscal reports. The DOE requires timely submission of reports in accordance with these due dates (see Part Seven).
    • Page Three - This page contains the contract-specific terms and conditions (listed on Attachment C). This page may simply refer to an attachment or may contain specific information about your contract.
    • Page Four - This page indicates the approved contract budget listed by Generally Accepted Accounting Principles (GAAP) category. This is your "official" budget. It is supported by the final approved grant application. Your requested budget may have changed as a result of pre-contract revisions so you will want to become familiar with the final approved budget as it appears on page four of the contract.
    • Page Five - This is the Expenditure Report Form that your chief fiscal officer (CFO) or Business Administrator (BA) is required to use in completing and submitting the fiscal reports referenced on page two of the contract. Photocopy this page for use with each (usually four (4) total) required fiscal report for the contract (see Part Seven).

    Attachment A, Contract Terms and Conditions: This document contains the administrative terms and conditions with which a contractor must comply with under this contract. It is important to read this document carefully. It refers to many other regulatory sources that apply to your agency and to any subcontracted agencies. This document is incorporated into the contract by reference, and is legally a part of the contract. Attachment A is available on the NJDOE web site: http://www.state.nj.us/education/.

    Attachment B: This document contains requirements with which a contractor must comply concerning the acknowledgment of the amount and percentage of federal and non-federal funding when making any public announcement relating to the contract. Contract audit requirements and copyright information are also included.

    Attachment C: This attachment is included only where applicable and contains special program-specific terms and conditions with which a contractor must comply and/or special terms and conditions imposed on "high risk" contractors.

    Approved Grant Application: Your proposed goals, objectives, activity plan, evaluation plan, budget, etc.., may have been changed as a result of the pre-contract revision process. This final approved grant application incorporates all of the DOE-approved pre-contract revisions. It supersedes all other versions of the application and is made a part of the contract. It provides the framework for the program. Use only the final approved grant application to manage your program.

    Do I Need To Know It All?

    You should review all documents very carefully, especially the third-party contract terms and conditions and the final approved grant application, so you understand all requirements and responsibilities.

    The DOE strongly encourages project directors to share copies of all materials relating to the contract with their CFO/BA and to work closely with the business office to ensure that the administrative requirements of the contract are met. Often project directors initiate orders, provide an activity code, and sign grant-related purchase requisitions to help assure proper budgeting and accounting of expenses. From experience, the DOE believes that good communication between the project director and the business office is essential to the successful achievement of programmatic goals, objectives, and activities, as well as to meeting the administrative requirements of the contract.

    What Do I Keep In A Grant File?

    The DOE recommends that the project director maintain an administrative file for ready reference, which should contain at a minimum, the following materials:

    • Copy of the Request for Proposal/Continuation/Application (RFP/C/A) document
    • Copy of the fully executed third-party contract
    • Copy of Attachments A, B and C
    • Copy of the final approved grant application
    • Copy of all submitted reports
    • Copy of grant-related correspondence
    • Activity related documentation as outlined in the Program Activity Plan
    • Grant related purchasing documentation (i.e., requisitions, purchase orders, shipping invoices)

    What Regulations Apply To My Contract?

    All third-party contract language makes reference to, and incorporates into the contract, many federal and state regulations. Specifically, these are the requirements contained in Federal Office of Management and Budget (OMB) Circulars and the Code of Federal Regulations (CFR 34). These documents provide guidance for the administration of grants, cost principles, and audit requirements. The grant funds for which the DOE has oversight come from both federal sources and state appropriations. Some grant programs are completely federally funded, some are completely state funded, while other grant programs are a combination of the two. Federal regulations require that the DOE treat federal and non-federal sources of funds in a consistent manner and in accordance with state law. To meet this requirement, the DOE applies the provisions of the federal OMB circulars uniformly to all contractors.

    Which Federal Circulars Apply To My Grant Project?

    The following chart provides information about federal OMB Circulars that apply to different types of agencies.

    Uniform Administrative Requirements
    (Common rule contract management standards for contractors)


    If the contractor is a/an - Applicable OMB Circular
    Entity of state/local government
    (includes Local Education Agencies (LEAs))
    OMB Circular A-102

    Institution of higher education (college or university), hospital, or a non-profit organization
    (May be applied to for-profit organizations)

    OMB Circular A-110

    Cost Principles
    (Common rule which defines allowable and unallowable costs)

    If the contractor is a/an - Applicable OMB Circular/Regulation
    Entity of state/local government (includes LEAs) OMB Circular A-87

    Institution of higher education (college or university)

    OMB Circular A-21
    Non-profit organization OMB Circular A-122
    Hospital
    For-profit organization
    45 CFR, part 74, Appendix E
    FAR, 48 CFR part 31

    Audit Requirements

    If the contractor is a/an - Applicable OMB Circular

    Entity of state/ local government, Institution of higher education (college, university), hospital, or a non-profit organization

    OMB Circular A-133

    For contractors with Internet access, all of the OMB circulars listed above are available on the World Wide Web http://www.whitehouse.gov/WH/EOP/OMB/Grants/ or by calling the OMB publications office in Washington, D.C. at (202) 395-7332.

    Who Or What Is EDGAR?

    The U.S. Department of Education (USDOE) funds many of the discretionary grant programs administered by the NJDOE. The regulations affecting these programs are found in Title 34 of the Code of Federal Regulations. Education Department General Administrative Regulations (EDGAR) is a book issued by the USDOE that reprints the portions of Title 34 containing the administrative requirements for grant recipients (parts 74, 75, 76, 77, 79, 80, 81, 82, and 86). These regulations are incorporated into the DOE third-party contract by reference. For contractors with Internet access, the text of the most current printed version of EDGAR may be found on the World Wide Web in compressed format at: http://gcs.ed.gov/grntinfo/edgar.htm

    Are There Other Requirements I Should Know About?

    All programs administered by the DOE are also subject to program-specific requirements (program regulations, enabling legislation), as well as state law. Program-specific requirements (programmatic and administrative) will be referenced in the RFP/C/A document. Some federal and State regulations and public laws may be found on the World Wide Web. (The USDOE home page can be found at http://www.ed.gov/index.html). In the near future, the DOE will have a regulatory section on the grants page of the DOE home page - http://www.state.nj.us/education/

    How Do I Communicate With The Department Of Education?

    There are two basic circumstances under which you may need to communicate with the Department of Education during the grant period for your local project:

    • When you have a question about the implementation of your project, and
    • When you need to transmit official documents to the department to comply with the requirements of the grant program.

    When you have questions about the implementation of your local project, your primary point of contact will be the program officer assigned to your particular grant program. The name and telephone number of the assigned program officer appears on the award letter and on Page One of your third-party contract document.

    The program officer is the DOE staff person who will work most closely with you throughout the duration of the grant period, and who will become most familiar with your local project. This person is responsible for providing technical assistance, monitoring local project performance, reviewing and approving interim fiscal and program reports, and following up with contractors on requests to modify the contract.

    You are encouraged to contact your program officer on matters relating to:

    • Program concepts and implementation
    • Administrative regulations and program requirements
    • Special circumstances relating to your local project

    The program officer and program office director will be the DOE staff with whom you will have most of your contact during the grant period. You should feel free to contact your program officer by phone for technical assistance with your project as often as necessary in order to help carry out the activities approved in your final approved grant application (see table below for program office numbers).

    DOE Program Office Information

    Office of: Phone: 609- FAX: 609-
    Assessment 292-5180 984-6032
    Bilingual Education & Equity Issues 292-8777 292-1211
    Community Services 633-9627 777-2939
    Educational Support Services & Interagency Initiatives 292-5935 633-9655
    Educational Technology 292-3518 292-1645
    Fiscal Standards & Efficiency 777-4484 292-6794
    Goals 2000 633-9625 292-1645
    Innovative Programs & Practices 292-5850 633-9825
    Licensing & Credentials 292-2070 292-3768
    Program Review & Improvement 292-6874 292-6483
    School-to-Career & College Initiatives 292-6341 984-5347
    Special Education Programs 633-6833 984-8422
    Specialized Populations 633-9715 633-6874
    Standards and Professional Development 984-1805 292-7276

    When you need to transmit official documents to the department to comply with the requirements of the grant program, your contact will be with the department’s Application Control Center (ACC). The ACC is responsible for providing the department’s centralized control function for grant administration. All documents and correspondence related to the four areas below must be sent to the attention of the ACC, which tracks and oversees all of the requirements contained in Attachment A & B: Terms and Conditions of the third-party contract for your discretionary grant award. The key documents that must be sent to the attention of the ACC include:

    • Interim and final program and fiscal reports
    • Contract modification requests
    • Request permission to submit a late report
    • Other official contract business

    You should be aware that reports, contract modification requests, other special requests and correspondence submitted through the ACC are the only reports, requests and correspondence that will be officially recognized and recorded by the department. The original and one copy must be included in the mailing (the ACC does not have the resources to make additional copies for you). Upon receipt, the ACC will quickly log in these documents and correspondence, and then transmit the copies directly to the appropriate program officer for action. Please note that the staff of the ACC maintain very close working relationships with the program officers of the individual grant programs; therefore, turnaround time for processing submissions to the ACC is minimal. If your correspondence does not relate to Attachments A & B: Terms and Conditions (the four areas above), it will be forwarded immediately to the program officer (see Parts Seven & Eight).

    In general, when writing to the DOE for any reason, it is important that we are able to identify you, your program and the reason you are writing. Including the following information will ensure the quick identification of your project:

    Send the Original and One Copy to: Include the Following Information:

    Application Control Center (ACC)
    New Jersey State Department of Education
    100 River View Executive Plaza
    P.O. Box 500
    Trenton, New Jersey 08625-0500

    RFP/C/A # and Title
    Contractor Name and County/LEA Code
    Contract # and Submission Date
    Project Director’s Name and Phone # Fax or Relevant Contact Info.
    Program Report # and Report Period
    Fiscal Report # and Report Period
    Contract Modification Details

    To summarize, when you have general questions about the implementation of your local project, call your assigned program officer. When you need to correspond with the department in order to comply with the regulations and requirements of the grant program (e.g., submitting reports, requesting a contract modification), submit your correspondence directly to the attention of the ACC.


    Part Two: Spending Grant Funds

    What Are My Responsibilities?

    All contractors are expected to:

    • Accomplish the goals, objectives and activities in the final approved grant application;
    • Evaluate progress toward accomplishing approved project outcomes;
    • Consult with DOE staff as necessary to ensure that the goals and objectives of the program are met;
    • Expend grant funds in accordance with the applicable regulations and the approved budget;
    • Maintain separate accounts and records for each source of funds used to support the program;
    • Maintain separate records for matching (if local matching funds are required by the RFP/C/A) and Program Income funds ;
    • Maintain internal control procedures adequate to safeguard grant funds and resources (including equipment);
    • Maintain equipment inventory and disposition records for equipment purchased with grant funds;
    • Cooperate with DOE staff during on-site monitoring visits;
    • Submit program and fiscal reports in accordance with the schedule on Page Two of the contract; and
    • Maintain program and fiscal records pertaining to the contract for a period of three years after the end of the contract.

    What Are My Time Lines For Spending Grant Funds?

    The contract period (contract start date to contract end date) is the spending authorization period. It is important to review the start and end dates of the contract, which are found on Page One of the contract. Within this time frame, the contractor is authorized to incur costs in accordance with the approved program activity plan and budget, and to perform the program work. You may begin to obligate grant funds (spend, process purchase orders, etc..), and begin program activities, as of the start date of the contract. All grant costs must be incurred prior to the end date of the contract and all program work must be performed within the time frame of the contract.

    How Will I Get Reimbursed For Expenditures?

    All third-party contracts are issued on a cost-reimbursement basis. This means that for each third-party contract, the amount of grant funds paid by the DOE during the contract period cannot exceed the amount of eligible program expenditures incurred by the contractor for the contract period. If a contractor incurs costs in excess of the contract amount or outside the approved GAAP line item categories, (see Part Eight) the DOE will reimburse the contractor for eligible expenditures only up to the dollar amount of the contract. Costs incurred in excess of the contract amount are the sole responsibility of the contractor.

    The standard payment schedule for third-party contracts is as follows:

    If equipment is approved, 100% of the approved equipment amount (function/object codes 400-731 & 400-732) is issued in the first payment. This allows you to place purchase orders early in the project period to ensure timely receipt and use of equipment. Five percent (5%) of the balance is deducted and held by the DOE. (The 5% is released upon receipt and approval of the contractor’s final program and fiscal reports). The remaining amount is divided into equal monthly payments. Generally, payments are issued near the middle to end of each month. (Note: Most payments to school districts are made through electronic transfer. Agencies that are not school districts will receive checks.)

    If there is a delay in receipt of federal funds and/or if the establishment of accounts results in a delay of the payments, your first payment will include payment all previous months payments will be included in your first payment.

    How Do I Know What Expenditures Are Allowable?

    Contractors must ensure that all expenditures of grant funds are made in accordance with the approved budget or DOE approved contract modification (see Part Eight). All expenditures must be allowable in accordance with the RFP/C/A guidelines and the OMB Cost Principle Circular applicable to the type of contractor (see Part One).

    During the pre-contract revision process, DOE staff reviewed your proposed budget and program plan with reference to the OMB circulars and RFP/C/A parameters. Generally speaking, all costs that were approved in your budget are considered allowable in accordance with the following criteria established in the OMB Cost Principle Circulars:

    All costs must:

    • reflect resources necessary and directly allocable to the program plan (goals, objectives and activities);
    • have a cost basis to support the identification of the amount (i.e., quantity x unit cost = total request);
    • be administratively efficient;
    • be reasonable for the performance of the project;
    • conform to any limitations or exclusions as set forth in the RFP/C/A, program regulations, and/or cost principles most appropriate to the contractor type;
    • be treated in a consistent manner by the contractor as an item of cost, regardless of the source of funds involved;
    • be categorized in accordance with Generally Accepted Accounting Principles (GAAP); and
    • not be included as an item of cost in any other federally funded program (no double funding!);

    How Do I Know What Program Activities Are Allowable?

    All grant activities have been approved by the DOE during the precontract revision process and appear in your final approved grant application. Changes to these activities may require DOE approval. Contact your program officer for assistance in determining whether DOE approval is required (see Part Eight).


    Part Three: Subcontracts (Subcontractors, Consortia, Partners, Subgrants, Subrecipients)

    What Are Subcontractors?

    A subcontractor is an entity (person or agency) that has a formal financial arrangement with the contractor to provide an integral part of the grant program. A subcontractor has responsibility for programmatic decisions, adherence to applicable compliance requirements, and uses grant funds to "carry-out" program activities. The subcontractor is accountable to you, the contractor, in the use of grant funds, subject to applicable federal and state regulations (all applicable regulations "flow-down" to the subcontractor), and is accountable for the delivery of subcontracted program activities (see Part One). Individuals authorized to enter into contracts by their respective agencies should execute a subcontract agreement. A contractor may not enter into a subcontract with a subcontractor that is debarred, proposed for debarment, suspended, or voluntarily excluded from receiving federal funds.

    Your final approved grant application may have included requests for subcontracts. Subcontractors may also be called consortium members, partners, subgrants or subrecipients. Subcontractors do not include procurement purchases with vendors or fee-for-service arrangements such as consultants. Unless otherwise stated in the RFP/C/A document, all subcontractors, their budgets and program activities were approved as part of your final approved grant application. The DOE must approve all subcontract arrangements in advance as well as any changes to approved subcontract budgets (see Part Eight).

    Are Subcontractors Subject To Regulations?

    The subcontractor is subject to the same terms and conditions (see Part One) as the contractor, and is responsible to you for the agreed upon scope of work (approved goals, objectives and activities), and the expenditure of subcontract funds. In turn, you are responsible for ensuring to us, the DOE, that the subcontractor is and remains in compliance. The subcontractor reports to you and you report to us. You are also responsible for the collection of applicable subcontractor audit reports as required by OMB Circular A-133 (see Part Ten and Attachment A: Contract Terms and Conditions of the third-party contract).

    Are Consultants Or Vendors Subcontractors?

    Consultants (or vendors) are not employed, either full-time or part-time, by the grant-recipient agency (they are non-employees) and are considered a "purchased service." They are unlike subcontractors in that they are hired to provide a specific service or product (product purchase or fee-for-service) within their normal business operations. Consultants/vendors are not subject to compliance requirements; they operate in a competitive environment and provide services or goods to many different purchasers. Any payments for non-employee compensation must be made through a formal contract with the individual or entity providing the product or service and receiving payment. The contractor is responsible for retaining a copy of the non-employee contract for audit and monitoring purposes. The DOE requires the submission of an interim and final Non-Employee Compensation Report (see Part Seven).

    Do I Need A Formal Contract With Subcontractors?

    To meet audit requirements, it is necessary to have a well-constructed subcontract agreement. The DOE suggests that you consider the following general guidance when developing the subcontract agreement terms and conditions:

    • The subcontractor must have been included in the final approved grant application submitted to the DOE, unless the RFP/C/A document specifically includes other instructions.
    • The subcontractor must not be debarred, suspended, or voluntarily excluded from receiving federal funds (see Federal Executive Orders 12549 and 12689).
    • The budget for the subcontractor must be for the same amount, and for the same line item amounts, as included in your DOE final approved grant application. The subcontractor has the same degree of line item flexibility as you (see Part Eight).
    • The start and end dates of the subcontract must not fall outside the start and end dates of the contract between you and the DOE.

    Example: A contractor has received a contract from the DOE for the period 10/1/99 -- 9/30/00, which contains a budgeted subcontract. The subcontractor’s period of performance may not start before 10/1/99, nor may it end after 9/30/00. No subcontract can be issued beyond the end date of the contract between the DOE and the contractor.

    • There must be a clear and well-defined scope of work consistent with the final approved grant application including goals, objectives, activities, and timelines.

    The DOE recommends that the following specific information be considered when developing a subcontract agreement:

    • A prohibition against subcontracting any portion of the scope of work by the subcontractor to another entity without prior approval of the DOE,
    • A conflict of interest clause to prevent a real or perceived situation is identified and addressed,
    • Cost principles appropriate to the subcontractor’s organizational type (OMB Circulars A-87, A-21, or A-122),
    • The payment terms (generally not less than monthly) and format of the proposed subcontract (which must be cost-reimbursement basis),
    • A subcontractor reporting schedule, program and fiscal. Note: it is important for the contractor to receive and review subcontractor reports prior to the submission of your program and fiscal reports to the DOE. (Again, Page two of the third-party contract identifies your reporting due dates),
    • Termination clauses for both convenience and cause (including default),
    • Record retention clauses consistent with the contract between the DOE and the contractor (generally three years from the closeout of the contract),
    • Provisions for an audit for all subcontracts of $25,000 or more in accordance with OMB Circular A-133,
    • A property management clause consistent with OMB Circular A-102 or A-110, as appropriate to the subcontractor,
    • A records access and retention clause which permits access to the books and records of the subcontractor by DOE personnel or their authorized designees. (In the event that federal funds are used, this right of access is extended to the Director of the federal funding agency providing the funds, the Comptroller General of the United States, and/or their authorized designees),
    • An equal employment opportunity clause, which requires subcontractor compliance with E.O. 11246, as amended by E.O. 11375 and as supplemented by regulations at 41 CFR part 60,
    • An anti-lobbying clause, which requires subcontractor compliance with the Byrd Anti-Lobbying Modification at 31 U.S.C. 1352. (The subcontractor must certify that no federal funds have been or will be used for lobbying purposes relating to this subcontract),
    • A clause incorporating the provisions of the New Jersey Public Schools Contracts Law (NJSA 18A: 18A),
    • A resolution of disputes clause,
    • An assignment clause which prohibits the subcontractor from assigning or transferring the subcontract to another entity,
    • A governing law clause which states that the subcontract is governed by, and shall be interpreted under, the laws of the State of New Jersey,
    • A copyright clause, in which the subcontractor agrees to provide an irrevocable, non-exclusive, royalty free license to the DOE, for governmental purposes, to use, reproduce, distribute, or to authorize others to do so, materials developed by the subcontractor which were supported by subcontract funds. (If federal funds are used in the subcontract, this license must be granted to the federal funding agency as well), and
    • The administrative terms and conditions that the contractor is bound by in its contract with the DOE. (These terms and conditions must be included in all subcontract agreements). It is advisable to include a clause in the subcontract which incorporates the terms and conditions of the entire contract, as well as the final approved grant application and the RFP/C/A, between the contractor and the DOE into the subcontract by reference.

    Can I Approve Changes To My Subcontracts?

    Any changes (program or fiscal) requested by a subcontractor must be reviewed by you and, if you support the changes, forwarded to the DOE for review if they are consistent with contract modification requirements (see Part Eight). As the contractor, you do not have the authority to approve for subcontractors, any changes in their program activities, any budget variances or any other changes that require prior approval by the DOE (see Part Eight).


    Part Four: Grant-Funded Equipment

    How Do I Purchase Grant Equipment?

    The DOE defines equipment as any instrument, machine, apparatus, or set of articles that meets all the following criteria:

    • It retains its original shape, appearance and character with use;
    • It does not lose its identity through fabrication or incorporation into a different or more complex unit or substance;
    • It is nonexpendable; that is, if the item is damaged or some of its parts are lost or worn out, it is more feasible to repair the item than to replace it with an entirely new unit;
    • It can be expected to serve its purpose for at least one year; and
    • The item costs more than $500.

    Federal guidelines require contractors to be prudent in the purchase of equipment. You, along with your chief fiscal officer/business administrator, have the responsibility for conducting a prior review of each proposed (and budgeted) equipment purchase, to ensure that the equipment is needed and that the need cannot be met with equipment already in your possession. If prior approval is required for the purchase (equipment addition or substitution from the equipment list in the final approved grant application), the contractor must ensure that appropriate written approval is obtained from the DOE in advance of the purchase (see Part Eight).

    Who Owns the Grant-Funded Equipment?

    Unless otherwise stated in the RFP/C/A or the contract, title to approved equipment purchased by the contractor using grant funds vests with the contractor immediately upon acquisition. Subcontractors who purchase approved equipment retain title to grant-funded equipment and must comply with applicable requirements.

    Who Maintains Inventory Of Equipment?

    All contractors are required to maintain a property management system that meets the requirements of the appropriate federal OMB Uniform Administrative Requirements Circular applicable to the contractor. According to EDGAR, you must maintain the following minimum information for each piece of equipment:

    • Description of the property
    • Serial number or other identification number
    • Funding source for the equipment purchase
    • Title holder to the equipment
    • Acquisition date
    • Acquisition cost
    • Percentage of grant funds (by source if split-funded) used in the purchase of the equipment
    • Location, use, and condition of the equipment
    • Any equipment disposition information

    The DOE suggests that an inventory tag be placed on each piece of equipment that would link the equipment to an inventory record containing the above information. Your agency probably has established fixed assets inventory procedures that meet these requirements.

    EDGAR also requires that you make a physical inventory of all grant-funded equipment at least once every two years and reconcile the results with the property records. However, the DOE requires the completion of an equipment inventory form with each contract mid-contract and final reports (see Part Seven).

    Who Is Responsible For Equipment Security?

    Contractors are also required to develop, implement, and maintain a control system to ensure adequate safeguards to prevent loss, damage, or theft of grant-funded equipment. Any loss, damage, or theft must be investigated, and the DOE promptly notified in writing. The notice to the DOE must include a copy of the police report of the incident. In addition, contract funds cannot be used to replace equipment that was lost, damaged or stolen, without prior written approval of the DOE.

    Must I Use Equipment Only For Grant Activities?

    During the contract period, any equipment acquired with contract funds must be used primarily for purposes consistent with the scope of work approved in the final approved grant application. The contractor may make this equipment available for use on other contracts or programs if the other use will not interfere with the program under which the equipment was purchased.

    What About Use Of Equipment After The Contract Is Over?

    Contractors who have used federal or state grant funds to purchase equipment can use the equipment in the program for which it was acquired, for as long as needed. When the program for which it was purchased no longer needs the equipment, you can use the equipment in connection with other programs currently funded by the same grantor agency (usually the USDOE) that provided the funding for the equipment. If the contractor does not have any programs that are currently funded by the grantor agency that financed the purchase of the equipment, priority use of the equipment must be given to programs received by the contractor that were previously funded by the grantor agency. If no eligible programs exist, the agency may use the equipment as needed or dispose of the equipment.

    How Do I Dispose of Obsolete Equipment?

    Due to the variety of federal and state sources of funding (and program specific regulations) incorporated into the DOE’s discretionary grant programs, there is no one standard treatment of contract-funded equipment disposition. Requests to dispose of equipment must be submitted to your program officer in writing. The request must contain, at a minimum, the following information for each piece of equipment to be disposed:

    • The agency identification information (see Part One);
    • Contract number of the contract under which the equipment was purchased;
    • Detailed description of each piece of equipment, including the make, model number, and serial number;
    • Description of the current condition of the equipment;
    • Original purchase price of each piece of equipment; and
    • Current value of each piece of equipment after depreciation.

    DOE personnel will review the request, and you will be advised in writing as to how to proceed.


    Part Five: Matching Funds

    What Are Matching Funds?

    Some RFP/C/As contain a matching funds requirement. That is, the contractor must match a certain percentage of the DOE contract amount from local resources. These matching funds, in order to satisfy a matching requirement, must be expended during the contract period, and be for costs directly supporting the overall program. These matching funds, in almost all instances, must come from non-federal sources, (Check the RFP/C/A to be sure.) Therefore, funds that are federal in origin, such as federal entitlement funds, are usually not allowed as matching funds. In certain instances, program income funds may be used to satisfy a matching requirement. However, the DOE must approve all uses of program income funds (see Part Six).

    All costs claimed by the contractor as matching costs must meet the standards for allowable costs in accordance with the OMB Cost Principle Circulars described earlier (e.g., unallowable costs

    cannot be counted as matching costs). In addition, costs claimed as matching costs on one grant program cannot be claimed as matching costs on another grant program, regardless of whether the costs are from cash matching funds or in-kind contributions. If there are any questions as to whether a contract has a matching requirement, please consult the RFP/C/A document for the grant program or contact your assigned program officer.

    How Are Matching Funds Treated?

    Matching funds must be expended at approximately the same rate as the grant funds being matched, otherwise the contractor runs the risk of not having enough matching expenditures incurred before the end date of the contract. Insufficient matching expenditures may result in some or all of the contractor’s grant-funded expenditures being disallowed by the DOE.

    What Qualifies As A Match?

    Matching requirements may be satisfied through the following:

    • Cash match,
    • In-kind contributions, or
    • Some combination of the above.

    Funds allocated for matching purposes, but unspent at the end of the contract period does not qualify as matching expenditures.

    In-kind contributions must be valued in accordance with the provisions of the OMB Uniform Administrative Requirement Circular applicable to the contractor. In addition, the contractor must retain records of matching expenditures for a period of three years after the submission of the final program and fiscal reports to the DOE.


    Part Six: Program Income

    Can My Agency Generate Income Through My Grant?

    Program income is defined as gross income earned by the contractor that is directly generated by a grant-supported activity or earned as a result of the grant. It includes, but is not limited to: income from fees for services performed, the use or rental of real or personal property acquired under the grant, the sale of commodities or items developed or fabricated under the grant. Certain types of programs will contain provisions for program income. Generally speaking, program income should not be generated as a result of receiving a grant. You should check the RFP/C/A for specific program income information. See "What About Copyrights?" in this section if program income is being derived from materials developed or fabricated under the grant.

    Can I Spend Program Income?

    According to federal regulation, program income may be handled in accordance with one of the three following methods. The DOE will determine which methodology applies to a particular RFP/C/A or contract.

    1. Deduction method. The amount of program income funds generated are to be used to offset the level of financial assistance provided by the DOE under the third-party contract, and used for allowable costs under the program.
    2. This is the "default method" of handling program income and, unless otherwise stated in the third-party contract or RFP/C/A, this is the method to be used.

      Example: If the contract amount is $100,000 and the contractor generates $5,000 in program income, although a formal contract modification is not needed, the total available contract amount is understood to be reduced by $5,000 and now becomes $95,000).

    3. Additional costs method. The amount of program income funds generated is to be used for allowable costs in addition to the contract amount. The DOE will approve this method for certain grant programs.

      Example: If the contract amount is $100,000 and the contractor generates $5,000 in program income, the contractor can use the program income funds for allowable costs in excess of the contract amount. The contract amount remains unchanged).

    4. Cost-sharing or matching. The amount of program income may be used to satisfy a matching or cost-sharing requirement. The contract amount remains unchanged.

    Be sure to check the RFP/C/A and/or the third-party contract.

    What About Program Income Generated After The Grant Is Over?

    There are no general requirements governing the use of program income generated after the contract period. If grant programs are designed to become self-supporting, program income generated after grant period may be used to sustain the program (check the RFP/C/A for additional information).

    Do I Need To Keep Records For Program Income?

    Contractors who earn program income must maintain separate records for the expenditure of these funds. If a contractor has more than one contract that generates program income, separate records for each contract’s revenue stream of program income must be maintained. These funds may not be co-mingled with contract funds, nor co-mingled with other program income funds. Contractors are required to retain expenditure records of these funds for three years after the end of the fiscal year in which the grant support terminates. The DOE will provide directions for reporting program income during the grant period.

    Example: A contractor is awarded a contract for the period September 1, 1999 to August 31, 2000, and generates program income, as a result of the contract, during that period. The contractor’s fiscal year runs from July 1 to June 30. The contract ends in the fiscal year ending June 30, 2001. Therefore, the contractor must retain program income records for this contract until June 30, 2004.

    Can I Copyright Material?

    Contractors who develop materials during the course of a grant-supported program may exercise their right to ownership by copyrighting the materials. However, the contractor (and all subcontractors, if the subcontractor develops materials) must grant to the DOE and the federal agency providing the funds (if federal funds are used), for governmental purposes, a royalty-free, non-exclusive and irrevocable license to reproduce, publish, or otherwise use these materials and to authorize others to do so.

    This license to the DOE covers any and all materials developed under the contract (deliverables) but does not preclude the contractor from exercising its right of ownership of the materials, or prevent the contractor from selling or licensing the materials. If the materials are to be licensed, or sold by the contractor, then the net proceeds constitute program income as defined, and the funds must be treated accordingly.

  • IMPORTANT NOTE: At least one copy of all materials developed by the contractor during the period of contract must be forwarded to the DOE at time of contract closeout.


    Part Seven: Contract Monitoring and Reporting

    Will My Program Be Monitored On-Site?

    During the period of the contract, the DOE program office staff may visit your agency. Since the program office must certify whether a contractor is eligible to continue into the next year of funding, monitoring is required for all multi-year programs. In addition, the program officer will select single-year programs for on-site monitoring visits.

    What Occurs During Contract Monitoring?

    The program officer will observe the contractor’s program in action, meet with staff and review program and fiscal records. The program officer may conduct an on-site monitoring visit of any subcontractor(s) as well.

    The DOE assures to its grantor agency that subgrant recipient agencies comply with applicable state and federal requirements and that performance goals are being achieved. The DOE conducts on-site monitoring to determine the extent to which you, the contractor, are complying with the provisions of the contract, and to determine the progress you are making towards accomplishing the goals, objectives and activities in the final approved grant application.

    The program officer prepares a written report that is shared with you, the project director and your Chief Executive Officer. This report details any concerns that the program officer may have with the status of the program. The contractor may be asked to address any deficiencies noted by the program officer in a corrective action plan.

    What If I Am Not Monitored On-Site?

    All contracts, whether or not they are subject to an on-site monitoring visit, are subject to desk monitoring. Desk monitoring is accomplished through the submission and review of interim and final program and fiscal reports. In most cases, interim reports are due quarterly and final reports are due to the DOE within sixty (60) days after the end date of the contract. Page Two of your third-party contract contains the report due dates (see Part One and Part Seven).

    What Reports Are Required?

    Page Two of your third-party contract contains the due dates for interim and final program and fiscal reports. The RFP/C/A and this section of the manual contain information about the required content of those reports.

    In general, the following reports are required:

    DUE PROGRAM REPORT FISCAL REPORT
    FIRST QUARTER PROGRAM ACTIVITY PLAN REPORT* EXPENDITURE REPORT
    (page 5 of the third-party contract )
    SECOND QUARTER PROGRAM ACTIVITY PLAN REPORT* EXPENDITURE REPORT
    INTERIM EQUIPMENT INVENTORY REPORT
    INTERIM NON-EMPLOYEE COMPENSATION REPORT
    Multi-year programs add:
    Mid-contract Fiscal PERFORMANCE Review -
    • INTERIM PERSONNEL REPORT
    • INTERIM SUBCONTRACT REPORT
    • INTERIM CONSULTANT REPORT
    THIRD QUARTER PROGRAM ACTIVITY PLAN REPORT* EXPENDITURE REPORT
    FINAL REPORT FINAL PROGRAM ACTIVITY PLAN REPORT* FINAL EXPENDITURE REPORT
    FINAL EQUIPMENT INVENTORY FORM
    FINAL NON-EMPLOYEE COMPENSATION FORM

    *Additional program specific reports may be required in the RFP/C/A and/or by the program officer.

    How Do I Complete Reports?

    Use the following instructions to complete the required reports. (Copies of all reports are found in the appendices)

    Program Reports

    Program Activity Plan Reports

    For the first report: Photocopy the approved Program Activity Plan from the final approved grant application. (There should be "open" triangles in the Report Period column in the quarter(s) relevant to the completion of the activity.)

    1. For each activity completed, fill in the appropriate triangle for the quarter.

    2. For each activity not completed by the quarter indicated on the activity plan:
      • Draw an arrow to the quarter in which the activity will be completed.
      • Include a narrative to explain: (1) the reason(s) the activity could not be completed as originally planned, (2) how the activity will be completed as revised, and (3) how the change will impact the program overall.
    3. Include any program specific data/information as required in the RFP/C/A and/or by the DOE.
    4. Sign (Project Director) and date of the report.

    For subsequent reports: Quarterly reports must be cumulative in nature. Photocopy the previous report, and follow the instructions under 1 through 4 above.

    Final Program Activity Plan Report

    Photocopy the last quarter report. Fill in the triangles as appropriate. Using the final approved grant application Evaluation Plan, prepare and submit a narrative report detailing:

    • A comparison of actual accomplishments to the approved goals and objectives. Where the outcomes of contract programs can be readily quantified, such quantitative data must be provided.
    • Reasons why established goals and objectives were not met (if applicable).
    • Any program specific data/information as required in the RFP/C/A and/or by the DOE.
    • Signature (Project Director) and date of the report.

  • IMPORTANT NOTE: At least one copy of all materials developed by the contractor during the period of contract must be forwarded to the DOE at time of contract closeout.

    Fiscal Reports

    Expenditure Reports

    Photocopy page 5 (Expenditure Report) of the DOE third-party contract.

    • Enter the Reporting Period in block #29.
    • Indicate the Basis of Report in block #30.
    • Record expenditures to date in the Cumulative Expenditures column. (Report expenditures in the appropriate approved budget column(s), i.e., State, federal, Other)
    • The Chief Fiscal Officer must sign and date the report.
    • Include any additional reports as required by the DOE (i.e., program income, matching, etc.)

    Interim Equipment Inventory Report (Submitted with the mid-contract reports)

    For each item of equipment purchased to date, provide the following information on the Interim Equipment Report form:

    • Check the box if there are no expenditures to report. (complete and send)
    • Make necessary copies of the form. (Indicate page __ of ___)
    • Complete the as of __/__/__date of the report.
    • Fill in Header Items 1 - 4.
    • Make/model/description (including purpose for use, i.e., instructional or non-instructional)
    • Inventory tag number
    • Purchase date
    • Amount budgeted
    • Purchase cost
    • Location

    Interim Non-Employee Compensation Report (Submitted with the mid-contract reports)

    Non-employee compensation includes fees or other forms of compensation for services rendered by an individual or entity that are not employed by the contractor (i.e., consultants, subcontractors, workshop presenters, etc.).

    On the Interim Non-Employee Compensation Report:

    • Check the box if there are no expenditures to report. (complete and send)
    • Make necessary copies of the form. (Indicate page __ of ___)
    • Complete the as of __/__/__date of the report.
    • Fill in Header Items 1 - 4.
    • Complete all information. (Enter N/A if not applicable)
    • Obtain business administrator and project director’s signatures.

  • IMPORTANT NOTE: Any payments for non-employee compensation must be made through a formal contract with the individual or entity receiving payment. The contractor is responsible for retaining a copy of the contract for audit and monitoring purposes.

    Mid-Contract Fiscal Performance Review (for multi-year (Request for Continuation) programs only)

    Submit all three forms with your mid-contract EXPENDITURE report.

    Through the Mid-Contract Fiscal Performance Review, the DOE will collect specific information regarding expenditures made in four key areas: consultant services, equipment, staff (salaries and fringe benefits) and subcontracts.

    For each of these four areas, contractors are required to provide the following information on the forms included in this review package. A narrative report must be provided explaining any substantial deviation from anticipated and/or approved expenditures up to the midpoint of the grant program.

    Each form must be signed and dated by the business administrator and project director. Copy forms as needed for additional space.
    Interim Personnel (Salaries and Fringe Benefits) Report (Submitted with the mid-contract reports)

    For each grant-funded staff position, provide the following information on the Interim Personnel Report form:

    • Check the box if there are no expenditures to report. (complete and send)
    • Make necessary copies of the form. (Indicate page __ of ___)
    • Complete the as of __/__/__ date of the report.
    • Fill in Header Items 1 - 4.
    • Name of person
    • Position title
    • Status (full-time or part-time)
    • Total Salary budgeted
    • Total Salary expended to date
    • Total Fringe budgeted
    • Total Fringe expended to date

    If one individual is serving in two grant-funded positions (e.g., teacher and counselor), enter each position separately on the Interim Personnel Report form. Complete all columns for each

    Interim Subcontract Report (Submitted with the mid-contract reports)

    For each subcontractor who has incurred expenses as of the report date, provide the following information on the Interim Subcontract Report form:

    • Check the box if there are no expenditures to report. (complete and send)
    • Make necessary copies of the form. (Indicate page __ of ___)
    • Complete the as of __/__/__ date of the report.
    • Fill in Header Items 1 - 4.
    • Subcontractor name
    • Total budgeted
    • Total expended by budget category (e.g., equipment, instructional supplies)

    Interim Consultants Report (Submitted with the mid-contract reports)

    For each consultant engaged as of the report date, provide the following information on the Interim Consultant Report form:

    • Check the box if there are no expenditures to report. (complete and send)
    • Make necessary copies of the form. (Indicate page __ of ___)
    • Complete the as of __/__/__ date of the report.
    • Fill in Header Items 1 - 4.
    • Name
    • Description of services provided (e.g., staff training, program evaluation)
    • Date(s) of service
    • Amount budgeted
    • Amount expended

    Final Expenditure Report

    Photocopy page 5 (Expenditure Report) of the DOE third-party contract.

    • Check the "Final" box and enter the Reporting Period (entire contract timeframe) in block #29.
    • Indicate the Basis of Report in block #30.
    • Record expenditures in the Cumulative Expenditures column. (Report expenditures in the corresponding approved budget column(s), i.e., State, federal, Other)
    • The Chief Fiscal Officer must sign and date the report.

    Final Equipment Inventory Report (submitted with the Final Expenditure Report)

    • Check the box if there are no expenditures to report (complete and send).
    • Make necessary copies of the form. (Indicate page __ of ___).
    • Complete the as of __/__/__ date of the report.
    • Fill in Header Items 1 - 4.
    • Complete all information. (Enter N/A if not applicable).
    • Obtain the Business Administrator and Project Director’s signatures.

    Final Non-Employee Compensation Reports (submitted with the Final Expenditure Report)

    • Check the box if there are no expenditures to report (complete and send).
    • Make necessary copies of the form (Indicate page __ of ___).
    • Complete the as of __/__/__ date of the report.
    • Fill in Header Items 1 - 4.
    • Complete all information (Enter N/A if not applicable).
    • Obtain Business Administrator and Project Director’s signatures.

    Where Do I Send Reports?

    Send the Original and One Copy to:

    Application Control Center
    New Jersey State Department of Education
    100 River View Executive Plaza
    P.O. Box 500
    Trenton, New Jersey 08625-0500

    IMPORTANT NOTE: If the original and one copy of the reports are not mailed directly to the Application Control Center (ACC), the report will not be recorded as having been received by the DOE and will not count toward compliance with the requirements of the grant program.

    What Happens If I Miss A Report Due Date?

    The DOE will notify you one time of delinquent reports. Since reports are considered part of desk monitoring, the DOE reserves the right to withhold payments, suspend contract activities or terminate this contract if reports are not submitted as required.

    For multi-year programs, Mid-contract Fiscal Performance Reports will be used as documentation for on-site monitoring by your program officer. On-site monitoring and approved reports are also necessary for certification by the DOE to continue to be eligible to apply for continuation funding.

    If you anticipate a delay in submission of your report(s), contact your assigned program officer.

    What Does The DOE Do With Reports?

    Program reports are reviewed to determine the extent to which the contractor is making progress in meeting the stated goals and objectives in the approved activity plan. Fiscal reports are reviewed to determine the extent to which the contractor has adhered to the approved budget.

    If discrepancies are noted in either the program or fiscal reports (or through on-site monitoring), the program officer will contact you to obtain a written response addressing the DOE concerns.


    Part Eight: Budget Flexibility and Contract Modifications

    How Much Flexibility Do I Have Within My Approved Budget?

    Section XIV of Attachment A: Contract Terms and Conditions contains guidelines for budget modifications. Generally speaking, contractors may move funds budgeted in one GAAP category to another GAAP category without DOE approval when:

    • the transfer of funds does not result in a change in the scope of work (scope of work means program changes representing a significant departure from the originally approved project under the contract);
    • the funds are not transferred to or from a restricted line item such as equipment, subcontracts or indirect costs;
    • IMPORTANT NOTE: The subcontractor is subject to the same terms and conditions (see Part One) as the contractor, and is responsible to you for the agreed upon scope of work (approved goals, objectives and activities), and the expenditure of subcontract funds. Any changes (program or fiscal) requested by a subcontractor must be reviewed by the contractor and, if you support the changes, forwarded to the DOE for review if they are consistent with contract modification requirements. As the contractor, you do not have the authority to approve for subcontractors any changes in their program activities, any budget variances or any other changes that require prior approval by the DOE.

    • the funds are transferred to a previously budgeted line item. (Contractors may not move funds to an unbudgeted line item without written DOE approval);
    • the transferred funds will not be used for expenditures that are specifically disallowed by the language in the RFP/C/A document, the applicable OMB Cost Principle Circular and the contract. Expenditure for costs disallowed by the RFP/C/A, the contract and/or the applicable OMB Cost Principle Circular by the DOE will be subject to monitoring and/or audit findings; and
    • the cumulative amount of all transfers will be below ten (10) percent of the total contract amount, or $10,000 whichever is less.

    When Must I Write To Get Approval To Change My Grant?

    You may find it necessary to request changes to what you had originally proposed in your final approved grant application. When this occurs, you need to obtain written approval from the DOE. This formal DOE approval process is called a Contract Modification.

  • IMPORTANT NOTE: All requests for a contract modification must be received by the Application Control Center a minimum of 90 days prior to the end date of the contract.

    Example: If your contract ends 8/31/00, any contract modification request must be received by the ACC no later than 6/1/00.

    Attachment A: Section XIV identifies the following conditions that require prior written DOE approval:

    • Changes to the approved scope of work (see above);
    • Transfer of expenditures to or from an unbudgeted line item;
    • Transfer of expenditures to or from the indirect costs line;
    • Costs requiring prior approval pursuant to the Federal Cost principles (see Part Two);
    • Budget category expenditure variances, the cumulative total of which equals or exceeds ten (10) percent of the total contract amount, or $10,000, whichever is less (called the contract threshold);
    • Any additions, deletions or substitutions to the approved equipment purchases;
    • Increases or decreases in the total contract amount;
    • Extension or contraction of contract time frame; and
    • changes to approved subcontracts.

    To assist in determining when DOE approval is required, a Contract Modification DOE Approval Checklist is contained in the Appendices.

    Can You Explain The Restricted Line Items (Equipment, Subcontracts and Indirect Costs Changes)?

    Equipment: Contractors are limited to the specific equipment items listed in the final approved grant application budget. Unbudgeted equipment purchases, regardless of dollar amount, require prior approval.

    Example: A contractor budgets $6,000 for three computers at $2,000 each. The contractor later finds that it can purchase four computers at $1,500 each. The contractor cannot purchase the fourth computer without prior DOE approval, even though funds are available.

    Example: A contractor budgets $4,000 for two automobile diagnostic computers at $2,000 each. The contractor later finds that the total purchase price of the two computers will be $5,000, or $2,500 each. The contractor may purchase the two APPROVED computers without prior DOE approval. The additional funds would need to be identified as local, in-kind or transferred from an underexpended line. The "over-expenditure" in the equipment line (and all other budget variances) must stay within the contract threshold limit (10% or $10,000, whichever is lower). If this purchase will result in a cumulative budget transfer in excess of the contract threshold limit, then the contractor must request

    prior approval. (Please note that there has not been a change to the specific approved equipment.)

    Example: A contractor does not budget for the purchase of equipment, and wishes to purchase equipment. If the equipment costs are allowable under the RFP/C/A, the contractor must obtain prior DOE approval for the purchase, regardless of whether the costs involved are under the threshold limit for the grant.

    Subcontracts: All subcontractors are included in the approved budget. Contractors may not substitute or add subcontractors without prior written approval from the DOE, regardless of whether the subcontracting costs would remain within the threshold limits. The subcontractor is subject to the same terms and conditions (see Part One) as the contractor, and is responsible to you for the agreed upon scope of work (approved goals, objectives and activities), and the expenditure of subcontract funds. Any changes (program or fiscal) requested by a subcontractor must be reviewed by the contractor and, if you support the changes, forwarded to the DOE for review if they are consistent with contract modification requirements. As the contractor, you do not have the authority to approve for subcontractors any changes in their program activities, any budget variances or any other changes that require prior approval by the DOE.

    Transfers between direct and indirect costs: Indirect costs are those costs that are incurred as a result of agency activities, and provide a benefit to the contract, but cannot be allocated directly to a contract. Examples of such indirect costs include facilities, utilities, accounting and bookkeeping services, legal services, contract administration systems, procurement systems, general operating expenses, etc. As these costs cannot be directly allocated to a particular contract or contracts, an indirect cost rate is used instead. Contractors may not cover cost over-runs of direct costs from cost under-runs of indirect costs, or vice versa. Direct costs are approved for a specific purpose just as indirect costs are approved to cover general operating expenditures. The agency cannot transfer costs between these two types of costs without requesting and obtaining DOE approval.

    What Should Be Included In A Contract Modification Request?

    The contract modification process requires substantial programmatic and fiscal review by the DOE. If a contract modification request is not submitted directly to the ACC, under the signature of the CSA/CEO, or does not contain the necessary information to complete the review, it will be returned and may not be considered.

    The basic components of a well-constructed contract modification request include the following:

    The reason for the change: A compelling programmatic justification and rationale for the need for the requested change which must be in keeping with the intent, goals, and objectives of the RFP/C/A, the project application and contract. As the agent of the governing board, the CSA/CEO signature provides assurance both that the modification is necessary and that it will directly benefit the grant. An authorizing board resolution will also be required if there will be formal changes to the contract (DOE will notify you when this is required).

    The impact on the program: The impact, if any, on the program’s goals and objectives due to the proposed changes must be identified. The DOE may also require a modified activity plan form. If so, affected final approved grant application pages must be submitted, marked with the changes and dated.

    What is changing: If budget changes are necessary, the request must include revised budget detail forms with revisions clearly marked, including program activity links using goal and objective numbers. Again, you must justify all decreases as well as increases to budget line items. The Chief Fiscal Officer must certify budget revisions through his/her signature. (Forms are available in the Appendix and must be used when submitting a contract modification request).

  • IMPORTANT NOTE: The contractor cannot implement contract modifications until official written notification of approval by DOE is received. Any changes enacted prior to notification of approval may be disallowed or may become the object of an audit finding, and are done so at the contractor’s own risk. Receipt and review of a contract modification request by the DOE does not imply or indicate pending approval. Approval of a contract modification is dependent upon a justifiable programmatic and/or fiscal need that will be of direct benefit to the program and that is permissible under the established RFP/C/A parameters.

    Do You Have Examples of Good Contract Modification Requests?

    The following are examples of requests with acceptable level of detail:

    Example #1

    Item Original Amount Revised Amount Amount of Change
    200-580 $2,825 $5,750 + $2,925
    200-600 $2,925 $0 -$2,925

    The reason for the requested revision(s) is:

    Although registration fees for the annual Parents as Teachers summer conference were included in the original grant budget, transportation, hotel, and meal costs were inadvertently omitted. Supplies originally budgeted to the grant for the office is being paid for by the agency, making a total of $2,925 available.

    RT Airfare, Philadelphia to St. Louis - $360 X 2 persons $720
    Hotel costs - $85 X 4 nights 340
    Meals - $40/day X 4 days X 2 persons 320

    TOTAL

    $1,380

    Two staff members are in need of Parents as Teachers training for the 0-3 years age group. In the past, this training has been offered in Newark, Delaware, keeping transportation costs at a minimum. This year, the training is not being offered within a reasonable distance and will mean that airfare, hotel and meal costs must be added to the original budgeted amounts. These are as follows:

    RT Airfare, Philadelphia to St. Louis - $360 X 2 persons $720
    Hotel costs - $85 X 5 nights (double occupancy) 425
    Meals - $40/day X 5 days X 2 persons 400

    TOTAL

    $1,545

    The requested revision will result in the following change(s) (if any) of the approved activity plan.

    No change

    ___________________________________________________________________________________________

    Example #2

    Item Original Amount Revised Amount Amount of Change
    200-590 $1,045 $2,435 + $1,390
    200-580 $4,000 $2,610 - $1,390

    The reason for the requested change(s)

    $1,390 in funds budgeted for staff travel will not be needed since these positions were filled late. The budget was originally prepared using a calculation figure of 25 families as a target maximum enrollment. When the grant request was approved, the program was asked to instead target 35 families for participation. This number has been achieved, resulting in greater than expected numbers of participants in professional development training.

    Fee for 10 additional participants @ $113.10 each

    TOTAL

    $1,131

    Another unforeseen expense has been the payment of GED fees to the State for participants who are ready to take the exam. Six enrollees have taken the exam already this year, and it is anticipated that four more may take it prior to the end of the year.

    10 adult GED fees @ $25.85

    $258

    The requested revision will result in the following change(s) of the approved activity plan:

    The program will pay the GED test fees for any participant who has been pre-tested by adult education staff and determined to be ready for the examination (GOAL: To provide literacy training for parents). The program will also add an additional 10 participants to the professional development activity.

    ____________________________________________________________________________________________

    Example #3

    Item Original Amount Revised Amount Amount of Change
    100-610 $2,185 $4,341 + $2,150
    400-731 $10,500 $8,344 - $2,150

    The reason(s) for the requested revision is:

    Due to a price reduction for computers, there is a surplus of funds in 400-731 in the amount of $2,156. Because the scheduling of additional staff to be trained during the summer, money for materials and supplies are needed.

    Training materials (inc. books, paper etc.)10 @ 215 each $2,150
    TOTAL $2,150

    The requested revision(s) will result in the following change(s) of the approved activity plan:

    No Change


    Example #4

    Item Original Amount Revised Amount Amount of Change
    100-101 22,500 25,000 +$2,500
    200-200 $7,700 $7,943 +$243
    200-320 $15,000 $13,000 -$2,000
    200-600 $1,000 $257 -$743

    The reason(s) for the requested revision is:

    Due to increasing enrollment for our summer program, it has become necessary to increase the number of teachers to provide the instructional content of the program.

    1 teacher X $25/hour X 100 hours = $2,500

    Accordingly, the fringe benefit request will need to be adjusted.

    $2,500 X 7.65% FICA = $191 + 2.09% TPAF = $52. TOTAL = $243.

    Workshop presenters $2,000 and workshop supplies $743 will be assumed by the agency as agency-funded costs.

    The requested revision(s) will result in the following change(s) of the approved activity plan:

    No change

    What Are Some Common Problems With Contract Modification Requests?

    • Lack of detail as to the need for, and nature and substance of the request. A common problem with contractor modification requests is the lack of detail (programmatic, budgetary, etc.) sufficient to enable DOE staff to evaluate the merits of the request. Requests that do not have a compelling programmatic rationale and justification, are not well thought out, or lack adequate detail are very time-consuming to review and process, as the program officer may be required to contact the contractor several times to obtain the needed information.

    As a general rule of thumb, the degree of cost detail that a contractor needs to provide in a modification request is the same level of detail that is required on the budget detail forms in the final approved grant application. The use approved Budget Detail forms to show requested revisions will facilitate the review of your request.

  • IMPORTANT NOTE: Do not submit a request for a contract modification merely to spend unexpended balances. This reason is not considered adequate or justified and will be automatically denied by the DOE.

    • Modifications submitted towards the end of the grant program. Per Attachment A: Contract Terms and Conditions, no request for modifications will be reviewed if it is submitted to the DOE within 90 days of the contract end date. As a general rule, any requests for contract modification(s) should be submitted to the DOE as soon as the need for a modification becomes known. The sooner the request is submitted the sooner it can be evaluated and, if approved, the sooner the program will benefit.
    • Lack of response from contractors to requests for information. A major source of concern is that some contractors have not been responsive to requests from the program officer for additional information. While some problems may arise, (e.g., key people may not be readily available especially during the summer months), we recommend strongly that the contractor designate someone to act as a contact person for all contract modification requests (usually the project director). This person should be able to respond to any requests for information from the program officer during the time that the request is pending.
    • If a contractor should decide not to pursue a previously submitted request before a decision has been made, the contractor should send a letter (to the same address to which the original request was sent) withdrawing the request so that the request can be removed from consideration.

    • Contractor revising modification requests during administrative review. Additional information required to review the modification request will be solicited by the program officer. Contractors should respond with only the information that the program officer has requested. Unsolicited information unrelated to the information requested will not be considered.
    • Example: A contractor submits a request to move $2,000 from travel to instructional supplies, but provides no cost detail in the original request. The program officer requests cost detail on the instructional supplies to be purchased. The contractor provides cost detail on $2,000 of instructional supplies. Furthermore, the contractor indicates that it also wants to reallocate $1,500 from purchased services into staff salaries. The request to move funds from purchased services into staff salaries will automatically be denied by the DOE, as it was a change not solicited by the program officer.

    • Mathematical errors. Mathematical errors will compromise your request. Please always check your math, as accuracy is essential. Your numbers must add up. Also, remember to round all figures down to the nearest dollar.
    • Circumventing RFP/C/A guidelines. The restrictions on allowable and non-allowable uses of funds in the RFP/C/A document are firm. Contractors are strongly advised to review their proposed modification request against the RFP/C/A guidelines, and not to submit any modification requests that are in clear violation of the RFP/C/A guidelines. If a modification request is found to be in violation of the RFP/C/A guidelines, the DOE will automatically deny the request.
    • Wrong budget. Sending a contract modification request based on a budget that is not the final approved budget will delay your review. If you have had previous budget modifications approved by the DOE, be sure you are working with the most up-to-date DOE approved budget.

    Where Do I Send My Contract Modification Request?

    Requests for contract modifications are to be sent to:

    New Jersey State Department of Education
    Application Control Center
    100 River View Executive Plaza
    P.O. Box 500
    Trenton, New Jersey 08625-0500

  • IMPORTANT NOTE: All requests for contract modifications must contain the contractor identification information (see Part One).

    What Happens To My Request Once It Has Been Submitted?

    Once the Application Control Center has received the request, staff review it for completeness in accordance with the guidelines contained in the contract modification packet (see Appendix). If it is incomplete, it will be returned to you. If it contains the necessary information, copies are immediately forwarded to the program officer for review.

    The program officer will make a recommendation either to proceed with the modification request or deny the request. If multiple actions are requested, an item by item recommendation is made. If the recommendation is to proceed, the request and recommendation are forwarded for final review. The Application Control Center notifies the contractor in writing of the DOE’s decision and requests an authorizing resolution from the agency.


    Part Nine: Contract Closeout

    How Do I Close Out My Contract?

    In order to close out a contract, you need to prepare and submit the final program and final expenditure reports, along with any deliverables specified in the RFP/C/A or the contract, to the DOE within sixty (60) days after the end date of the contract (see Part Seven).

    In order for a contractor to submit a final expenditure report, it must liquidate (pay) all outstanding obligations, such as open purchase orders, within this period, so that the final expenditure report can be prepared and submitted.

    Can Costs Be Disallowed By The DOE?

    The final program and expenditure reports are reviewed by DOE staff to determine the extent to which the contractor has achieved the approved goals and objectives of the program and to what extent the contractor has complied with the approved budget. Any costs claimed by the contractor that are disallowed by DOE are noted and the final approved expenditure amount is adjusted accordingly.

  • IMPORTANT NOTE: Any reported expenditure that violates the terms and conditions of the contract (i.e., over threshold changes, changes to approved equipment, expenditures in unapproved line items, disallowed program activities, etc.) will be automatically disallowed by the DOE and a refund will be requested.

    When Do I Get The Final Payment?

    Once the final program and expenditure reports are received and approved by the DOE, the final payment of five percent of the contract amount (less any adjustments for prior overpayments, disallowed costs, etc..) is made to the contractor. No final payments will be made in the absence of required reports.

    Do I Send A Check If There Are Unspent Grant Funds?

    In the event that you received payments in excess of the total eligible program expenditures (minus any adjustments), the DOE will send you a refund request for the difference. Do not send a refund check with your final report. Unspent contract funds may not be retained by the contractor for any reason and must be returned to the DOE.

  • IMPORTANT NOTE: Please be advised that delinquency in the remittance of a refund will affect the agency’s eligibility for future grant awards.

    How Long Do I Keep Grant Records?

    Generally speaking, financial records, program records, all supporting documentation and other records pertinent to a grant must be retained by your agency for a period of three years from the submission and approval of the final program and fiscal reports by the DOE. Program income records, and all supporting documentation must be retained for a period of three years after the end of the contractor’s fiscal year in which the contract ended (see Part Six).

    Any and all records, financial and programmatic, that relate to audits, appeals, litigation, or the settlement of claims which may arise out of the performance of the project must be retained until the audits, appeals, litigation, or claims are resolved.

    The DOE, or any of its duly authorized representatives retain access rights to any pertinent books, documents, papers and records of the agency to make audits, examinations, excerpts and transcripts. If federal funds are used in the awarding of the contracts, the term "authorized representatives" includes, but is not limited to, the director of the federal funding agency providing the funds, the Comptroller General of the United States, or any of their duly authorized representatives. This access also extends to the records of any and all subcontractors (including participating organizations in collaborative efforts).


    Part Ten: Audit

    Will I Be Audited?

    Again, Attachment A, Contract Terms and Conditions, Section XIII provides guidance regarding audits. Recipients of federal and/or state grant funds are required to have an annual audit performed in accordance with the Single Audit Act, Federal OMB Circular A-133 and State Circular 98-07. (For contractors with Internet access, a copy of the New Jersey State Grant Compliance Supplement may be found on the World Wide Web at http://www.state.nj.us/treasury/omb/educ.pdf.) The state policy regarding grant recipients is as follows:

    1. Recipients that expend $300,000 or more in federal and/or state funds within their fiscal year must have an annual organization-wide audit performed in accordance with the revised Single Audit Act, OMB Circular No. A-133.

    2. Recipients that expend less than $300,000 but $100,000 or more in federal and/or state funds within their fiscal year must have either an annual financial audit performed in accordance with Government Auditing Standards or an annual program specific audit performed in accordance with the revised Single Audit Act, OMB Circular No. A-133 Revised, Section 235.

    3. Audit reports for recipients requiring an annual organization-wide audit as indicated in No. 1 above, must include the auditor’s comments on internal controls over state grants and state aid, and compliance with material terms and conditions of state grant agreements, state aid programs, and applicable laws and regulations.

    4. Single audit reports must also include a supplementary schedule of the recipient’s state grant and state aid financial assistance programs. This schedule, entitled Schedule of State Financial Assistance, must show the following information for each grant program:

      State Grantor Department
      Program Title
      State Account Number
      Program Amount (Funds received)
      Program/Grant Contract period
      Total Disbursements

  • IMPORTANT NOTE: Failure to comply with these audit requirements could jeopardize your eligibility for future grant funding. You should consult your business administrator and independent accountant regarding these requirements.

    How Can I Safeguard My Grant Against Audit Findings?

    You have already taken the first step in safeguarding your grant by reading this manual and reviewing all grant documents!

    The DOE has an Office of Compliance that, among other things, oversees the use of state and federal funds by the DOE and its grant recipient agencies. There is a chance that your agency could be selected for a contract audit by this office. Again, paying careful attention to the terms, conditions and guidance presented here, will help safeguard your grant against audit findings.

    For your convenience, the DOE Office of Grants Management and Development has compiled the following list of "Common Audit Findings." Keep these as a reference when managing your discretionary grant program.

    1. Grant funds used for expenses not included in the budget. For example, travel expenses incurred and reported, but not budgeted; or type of equipment purchased was not approved in the budget.

    2. Costs incurred prior to or subsequent to the contract time frame, as shown on page One of the contract.

    3. Costs reported on final expenditure report were more than the costs recorded in the accounting records.

    4. Costs reported, per budget category, exceed the $10,000/10% threshold rule and require but did not receive DOE approval.

    5. Costs reported/recorded in an incorrect expense category, which results in costs exceeding the $10,000/10% rule.

    6. Reported costs include amounts encumbered at the end of the grant period, but never paid for goods or services received after the end of the grant period (never liquidated expenditures).

    7. Costs were incurred at the end of the grant period and were of a type that did not provide a direct benefit to the grant period (All grant expenditures must directly benefit the grant program).
    8. Time records were inadequate to support employee salary charges to the grant, especially for employees who only spent part of their time working on the grant.

    9. Time and attendance records were not approved by supervisors and not signed by employees.

    10. No record of board approval for salary, hourly pay rate for part-time employees or hourly pay rate for employees working outside the normal work day.

    11. Improper classification/reporting of employee and consultant expenses.

    12. Reporting fringe benefit costs using the budgeted percentage when actual fringe benefit costs incurred were lower.

    13. Reporting the school district’s share of FICA (Social Security) and pension costs as a grant expense for those employees who are members of TPAF (Teacher’s Pension) and whose FICA and pension are already paid for by the state.

    14. Mathematical or clerical errors made when calculating a charge to the grant.

    15. Charges to the grant for supplies, equipment, etc., which are not supported by vendor invoices.

    16. Costs for entertainment where such costs do not represent a valid grant expense are not allowable according to OMB Cost Principles.

    17. Charges to the grant for supplies requisitioned from stock and reimbursed with grant funds that are not supported with adequate documentation.

    18. Methods used to determine charges to the grant for a portion of expenses such as telephone, postage, rent, duplicating, etc.., which do not have a reasonable basis of allocation. Charging the budgeted amount without reasonable justification is not acceptable.

    19. Reporting of costs that are not reasonably related to the purpose of the grant.
    20. Grantee’s accounting records do not provide for an audit trail. As a result, the auditors cannot reconcile the final expenditure report submitted to the DOE with the grantee’s accounting records.
    21. Documentation is not maintained to substantiate the dates, numbers of hours and type of services provided by consultants.

    For contractors with Internet access, the following sites provide additional information about grant management and audit requirements: http://www.ed.gov/legislation/ESEA/compliance/

    http://www.whitehouse.gov/WH/EOP/OMB/Grants/ .


    GLOSSARY

    Application Control Center

    The Application Control Center (ACC) is the center responsible for providing the NJDOE’s centralized control function for grant administration. Among the various functions of the ACC are the receipt of proposals, applications and contractor reports, and the administration of the proposal evaluation and application review processes, and of the contract modification review and approval process.

    Approved Application

    The goals, objectives, activity plan, evaluation plan, budget, etc., proposed by an applicant may have been changed as a result of the pre-contract revision process. The "approved application" incorporates all of the NJDOE-approved pre-contract revisions. It supersedes all other versions of the application and is made a part of the contract by reference. It provides the framework for the program and is used by the contractor in the implementation of the local project.

    Approved Grant Application

    See "Approved Application."

    Articulation Agreement

    See "Subcontract Agreement."

    Attachment A, Contract Terms and Conditions

    The administrative terms and conditions that a contractor must comply with under its contract with the NJDOE. The document is incorporated into the contract by reference, and is legally a part of the contract.

    Attachment B

    Requirements with which a contractor must comply concerning the acknowledgement of the amount and percentage of federal and non-federal funding when many any public announcement relating to the contract. Contract audit requirements and copyright information are also included.

    Attachment C

    Special program-specific terms and conditions with which a contractor must comply and/or special terms and conditions placed on "high risk" contractors. It is included as part of the third party contract only where applicable.

    Audit

    The examination of records and documents and the securing of other evidence by a qualified accountant for one or more of the following purposes: (a) determining the propriety of proposed or completed transactions, (b) ascertaining whether all transactions have been recorded, (c) determining whether transactions are accurately recorded in the accounts and in the statements drawn from the accounts.

    Audit Findings

    A deficiency or deficiencies in a local project, found during the audit process, in one or more of several key areas, e.g., internal control, compliance, questioned costs, or fraud. Common audit findings include, but are not limited to: grant funds used for expenses not included in the budget; costs incurred outside of the contract time frame; inadequate time records to support employee salary charges; mathematical or clerical errors when calculating a charge to the grant, etc.

    Catalogue Of Federal Domestic Assistance (CFDA)

    A government-wide compilation of federal programs, projects, services, and activities that provide assistance or benefits to the American public. The primary purpose of the CFDA is to assist users in identifying programs that meet specific objectives of a potential applicant, and to obtain general information on federal assistance programs; the catalogue is published one yearly, usually in June; an update occurs around December. The CFDA contains a brief description of each program, eligible applicants, the type of assistance provided, the estimated amount of money available, the typical award size, and the name and telephone number of the agency contact for the program. In accordance with the audit requirements of OMB Circular A-133, contractors are required to track expenditures by CFDA number.

    Chief Fiscal Officer

    For contractors that are local education agencies (LEAs), the chief fiscal officer (CFO) is considered to be the LEA’s business administrator. For contractors other than LEAs, e.g., community-based organizations, colleges and universities, etc., the chief fiscal officer is the person charged with responsibility for fiscal oversight of the agency’s financial activities.

    Code of Federal Regulations (Title 34, Education)

    A codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government.

    Co-Mingled Funds

    Co-mingling of funds occurs when a contractor fails to maintain separate records for each revenue stream (program income and/or grant funds by funding source), which may result in the improper use of funds designated for a specific purpose and subject to specific restrictions.

    Consortium Member

    See "Subcontractor."

    Consultants

    Independent contractors engaged under a grant to provide a specific service or product (product purchase or fee-for-service). They are not employees of the contractor and no employer-employee relationship exists between the consultant and the contractor.

    Contract Addenda Committee (CAC)

    The body within the NJDOE charged with responsibility for reviewing and approving contract modification requests. Only those requests that require NJDOE approval and that have been recommended for approval by staff of the sponsoring program office and by staff of the Office of Grants Management and Development are considered by the CAC.

    Contract Audit

    See "Audit."

    Contract Close-Out

    The process by which the NJDOE determines that all applicable administrative actions and all required work of the contract have been completed by the contractor. As a condition to close-out, contractors must submit a final program report and a final fiscal report. Upon approval of the final reports, the contractor will receive its final payment or will be required to refund grant funds to the NJDOE. See also "Standard Payment Schedule."

    Contract Period

    The timeframe during which funds provided by the NJDOE may be used for the purposes of the specific grant program. The start and end dates of the contract period are specified on Page One of the third party contract document.

    Contract Threshold

    The amount of funds that contractors may transfer between/among previously budgeted line items where the cumulative amount of all of those transfers will be below ten (10) percent of the total contract amount, or $10,000, whichever is less. The ten (10) percent or $10,000 figure represents the contract threshold amount. Note: There are other restrictions placed on the transfer of funds that apply below this threshold amount. Contractors are encouraged to refer to Part Eight of this Contractor’s Manual for a full discussion of these restrictions.

    Contractor

    The government or non-government entity to which a grant is awarded and which is accountable to the NJDOE for the use of the funds provided. The contractor is the entire legal entity even if only a particular component of the entity is designated in the grant award document.

    Cost-Reimbursement

    The basis on which all third party contracts are issued. This means that for each third party contract, the amount of grant funds paid by the NJDOE during the contract period cannot exceed the amount of eligible program expenditures incurred by the contractor for the contract period. The NJDOE will reimburse the contractor for eligible expenditures only up to the dollar amount of the contract.

    Cost Sharing

    The portion of a project or program cost not borne by the NJDOE. See also "Matching Funds" and "Matching Funds Requirement."

    Desk Monitoring

    The review by the NJDOE of contractor interim and final program and fiscal reports to ascertain the extent to which a contractor is complying with the provisions of the contract, and to determine the progress being made towards accomplishment of the goals, objectives, and activities in the approved grant application. In most cases, interim reports are due quarterly and final reports are due to the NJDOE within sixty (60) days after the end date of the contract.

    Direct Costs

    Costs that are approved for a specific purpose and that can be identified with a particular grant program or instructional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Typical direct costs are: compensation of employees for the time devoted and identified specifically to the performance of the grant award; cost of materials acquired, consumed, or expended specifically for the grant award; equipment and other approved capital expenditures; and travel expenses incurred specifically to carry out the award.

    Disallowed Costs

    Any charges to the contract that the NJDOE has determined to be beyond the scope of the purpose of a contract, excessive or otherwise unallowable.

    Discretionary Grant

    A grant made in support of an individual project in accordance with legislation that permits the NJDOE to exercise judgment in selecting the project, the contractors, and the amount of the award. Applicants may or may not compete for these funds.

    Discretionary Grant Program

    Discretionary grant programs are designated to address essential education and related initiatives. Discretionary grant funds are most often awarded through a competitive or limited competitive process that requires eligible applicants to submit proposals in response to an NJDOE-initiated request for proposals (RFP).

    Education Department General Administrative Regulations (EDGAR)

    A book issued by the USDOE that reprints portions of Title 34 of the Code of Federal Regulations (parts 74, 75, 76, 77, 79, 80, 81, 82, 85, 86) containing the administrative requirements for contractors. The regulations affecting discretionary grant programs funded by the USDOE and funded by the NJDOE are found in Title 34.

    Equipment

    An item of tangible personal property that meets all of the following criteria: (1) it retains its original shape, appearance and character with use; (2) it does not lost its identify through fabrication or incorporation into a different or more complex unit or substance; (3) it is non-expendable; that is, if the item is damaged or some of its parts are lost or worn out, it is more feasible to repair the item than to replace it; (4) under normal conditions of use, including reasonable care and maintenance, it can be expected to serve its principle purpose for at least one year; and (5) the item costs more than $500.

    Equipment Inventory Form

    A form requesting the following information on each piece of equipment purchased with grant funds: make/model/description of the equipment; inventory tag number; purchase date; amount budgeted; purchase cost; and location of the equipment. An equipment inventory form is completed by each contractor at the mid-contract and final reporting periods for a grant program. See also "Property Management System."

    Equipment Inventory Tag

    A tag placed on each piece of equipment linking that equipment to an inventory record containing the following information: description of the property; serial number or other identification number; funding source for the equipment purchase; title holder to the equipment; acquisition date; acquisition cost; percentage of grant funds (by funding source if split-funded) used in the purchase of the equipment; location, use, and condition of the equipment; and any equipment disposition information. See also "Property Management System."

    Expenditure Report Form

    The Expenditure Report Form is page five of the Third Party Contract. The contractor’s chief fiscal officer is required to use this form in completing and submitting the fiscal reports referenced on page two of the Third Party Contract.

    Generally Accepted Accounting Principles (Gaap)

    A technical term in accounting which encompasses the conventions, rules and procedures necessary to define accepted accounting practice at a particular time. The standard of "generally accepted accounting principles" includes not only broad guidelines of general application, but also detailed rules and procedures.

    Grant Recipient Agency

    See "Contractor."

    Grantee

    See "Contractor."

    Indirect Costs

    Any costs that are incurred as a result of contract activities, and provide a benefit to the contract, but cannot be allocated directly to a contract. Examples of indirect costs are: facilities, utilities, accounting and bookkeeping services, legal services, contract administration systems, procurement systems, general operating expenses, etc. As these costs cannot allocated directly to a particular contract or contracts, an indirect cost rate is used instead.

    In-Kind Contributions

    The value of non-cash contributions provided by the contractor and/or subcontractor(s) under a grant program. In-kind contributions may be in the form of charges for real property and non-expendable personal property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.

    Inventory Tag

    See "Equipment Inventory Tag."

    Matching Funds

    Local financial resources applied in support of a discretionary grant program. Matching funds may be in the form of cash and/or in-kind contributions. See also "Matching Funds Requirement."

    Matching Funds Requirement

    A requirement in an RFP, RFC, or RFA that obligates a contractor to match a certain percentage of the NJDOE contract amount from local resources. In order to satisfy a matching funds requirement, the matching funds must be expended during the contract period, and be for costs directly supporting the overall program. See also "Matching Funds."

    Mid-Contract Fiscal Performance Review

    For multi-year programs, the Mid-Contract Fiscal Performance Review is used as documentation for on-site monitoring by NJDOE program staff. Through this Review, the NJDOE collects specific information regarding expenditures made in four key areas: consultant services, equipment, staff (salaries and fringe benefits), and subcontracts. A separate form exists for each of these four areas to be completed by the contractor as part of mid-contract reporting.

    Monitoring

    A method which the NJDOE utilizes to ascertain the extent to which a contractor is complying with the provisions of the contract, and to determine the progress being made towards accomplishment of the goals, objectives, and activities in the approved grant application.

    Multi-Year Grant Programs

    A grant program designated in the initiating RFP to extend for more than a single contract period, usually 12 months in duration. The initial selection of contractors usually occurs on a competitive basis, with subsequent years of funding provided on a non-competitive basis to those contractors selected in year one and certified by the program office to be performing successfully at the midpoint of the current contract period.

    Non-Employee Compensation

    Fees or other forms of compensation for services rendered by an individual or entity that is not an employee of the contractor (e.g., consultants, workshop presenters, etc.). Any payments for non-employee compensation must be made through a formal contract with the individual or entity receiving payment.

    Non-Public Schools

    An elementary or secondary school within the State, other than a public school, offering education for grades kindergarten through 12, or any combination of them, wherein any child may legally fulfill compulsory school attendance requirements and which complies with the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352). A list of non-public schools by LEA district, can be found in the New Jersey Department of Education School Directory or by calling your County Office of Education.

    Office Of Management and Budget Circulars (Federal)

    Federal guidance for the administration of grants, cost principles, and audit requirements. Federal regulations require that state departments of education treat federal and non-federal sources of funds in a consistent manner and in accordance with state law. To meet this requirement, the NJDOE applies the provisions of the Federal OMB Circulars uniformly to all contractors, regardless of the source of funds.

    OMB Circulars

    See "Office of Management and Budget Circulars (Federal)."

    On-Site Monitoring

    On-site monitoring is a method which the NJDOE utilizes to ascertain the extent to which the contractor is complying with the provisions of the contract and to determine the progress being made towards accomplishment of the goals, objectives, and activities in the approved grant application. During an on-site monitoring visit, NJDOE program office staff observe the contractor’s program in action, meet with staff, and review program and fiscal records. For multi-year programs, on-site monitoring and approved reports are also necessary in order to be certified by the NJDOE to be eligible to apply for continuation funding.

    Partner

    See "Subcontractor."

    Program Income

    The gross income earned by the contractor that is generated directly by a grant-supported activity or earned as a result of the grant. It includes, but is not limited to: income from fees for services performed, the use or rental of real or personal property acquired under the grant, the sale of commodities or items developed or fabricated under the grant.

    Project Costs

    All allowable costs incurred by the contractor and subcontractor(s), where applicable, and the value of the in-kind contributions made by the contractor and/or subcontractor(s) in accomplishing the objectives of the grant or other agreement during the contract period.

    Project Director

    A designated employee of the contractor who is responsible for managing and implementing the educational program and budget described in the approved application. The project director ensures that the contractor meets its responsibilities to the NJDOE under the grant program in a timely manner.

    Project Period

    See "Contract Period."

    Property Management System

    A system to track the following information for each piece of equipment purchased contractors and/or subcontractors with grant funds: description of the property; serial number or other identification number; funding source for the equipment purchase; title holder to the equipment; acquisition date; acquisition cost; percentage of grant funds (by source if split-funded) used in the purchase of the equipment; location, use, and condition of the equipment; and any equipment disposition information. Additionally, the NJDOE requires that an equipment inventory be completed and the results reported on at the mid-contract and final reporting periods of the grant program. All contractors and subcontractors are required to maintain a property management system that meets the requirements of the appropriate Federal OMB Uniform Administrative Requirements Circulars (A-110, A-102) applicable to the contractor or subcontractor. See also "Equipment Inventory Form" and "Equipment Inventory Tag."

    Reimbursement

    See "Cost Reimbursement."

    Restricted Line Items

    Restricted line items of a budget include equipment, subcontracts, and indirect costs. Changes proposed to any budget which would have an impact upon a restricted line item require NJDOE approval.

    Scope of Work

    The goals, objectives, activities, and time lines of the approved grant application.

    Split-Funded

    Grant programs that are supported by both state and federal funds. In such cases, a certain percentage of the total grant amount available is designated as state funds and a certain percentage is designated as federal funds. Furthermore, in some instances, a grant program may be supported my multiple state and/or federal sources. These programs are also referred to as split-funded.

    Standard Payment Schedule

    The standard payment schedule for third party contracts is as follows: If equipment is approved, 100% of the approved equipment amount (function/object codes 400-731 and 400-732) is issued with the first payment. Five percent (5%) of the balance is deducted and held by the NJDOE. (The 5% is released upon receipt and approval by the NJDOE of the contractor’s final reports.) The remaining amount is divided into equal monthly payments issued, generally, near the middle to the end of each month.

    Subcontract Agreement

    A formal financial agreement between a third-party contractor and another entity (a "fourth party") to provide an integral part of the grant program. Provisions of subcontract agreements should include information such as a clear, well-defined scope of work and the start and end dates of the subcontract. A subcontract agreement may also include such provisions as: payment terms; reporting schedule; termination clauses; records access and retention clauses; property management clause; etc. Note: Contractors are encouraged to refer to Part Three of this Contractor’s Manual for more detailed information on subcontract agreements.

    Subcontractor

    An entity (person or agency) that has a formal financial arrangement with the contractor to provide an integral part of the grant program. A subcontractor has responsibility for programmatic decisions, adherence to applicable compliance requirements and uses grant funds to "carry out" program activities. The subcontractor is accountable to the contractor in the use of grant funds, subject to applicable federal and state regulations, and is accountable for the delivery of the subcontracted program activities. A subcontractor may also be called a consortium member, a partner, a subgrantee, or a subrecipient.

    Subgrantee

    See "Subcontractor."

    Subrecipient

    See "Subcontractor."

    Suspension

    An action by the NJDOE that temporarily suspends assistance under the grant pending corrective action by the grantee, or pending a decision by the NJDOE to terminate the grant.

    Termination

    The cancellation of sponsorship of a grant project, in whole or in part, by the NJDOE under an agreement at any time prior to the date of completion.

    Third Party Contract

    A standardized legally binding agreement for the issuance of discretionary funds based upon specific priorities, needs, performance criteria, and budgetary constraints. The third party contract used by the NJDOE for its discretionary grant program consists of five pages and contains the following information: grant program identification and identification of key contact persons (at the contractor and at the NJDOE); contract time period; applicable regulations; payment information and due dates of progress and final program and fiscal reports; contract-specific terms and conditions; approved contract budget; and the Expenditure Report Form.

    Unbudgeted Line Item

    A budget line in the final approved grant application budget in which no funds had been requested by the contractor. Funds may not be transferred into unbudgeted lines by the contractor without prior approval by the Department of Education.

    Vendors

    Individuals or firms hired to provide a specific service or product (product purchase or fee-for-service) within their normal business operations. Vendors are not employed, either full-time or part-time, by the contractor and are considered a "purchased service." Vendors are not subject to compliance requirements; they operate in a competitive environment and provide services or goods to many different purchasers.