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Workforce Connections General Policies Cost Classification

FIS-020-02 I Supersedes policy 2.1 dated 10-07-2003

ved By: WC Executive Director c Ado ted on: Se tember 201

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Purpose: \ To establish Workforce Connections' (WC) policy guidelin\ s related to Cost Classification.

Background: [PL 105-220 Sec. 184 (a) (2) (A)] In General - Each State (including the Governor of the State), local area (including the chief elected official for the area), and provider receiving funds under this title shall comply with the applicable uniform cost principles included in the appropriate circulars of the Office of Management and Budget ( OMB) for the type of entity receiving the funds. [PL 105-220 Sec. 184 (a) (3) (A)] In General - Each State (including the Governor of the State), local area (including the chief elected official for the area), and provider receiving funds under this title shall comply with the appropriate uniform administrative requirements for grants and agreements applicable for the type of entity receiving the funds, as promulgated in circulars or rules of the Office of Management and Budget.

Policy: Recipients and sub-recipients receiving WIA Title IB funds, must establish a sound financial management system of controls that comply with the applicable uniform cost principles and the appropriate uniform administrative requirements. Recipients and sub-recipients are responsible for the efficient and effective administration of awards through the application of sound management practices, and in a manner consistent with Generally Accepted Accounting Principles (GAAP).

Reference: Workforce Investment Act (WIA) [PL 105-220 Sec. 184][20 CFR §667.210][20 CFR §667.220] [29 CFRpart 95][29 CFRpart 97][WIASCP 3.7][WIASCP 3.6] [OMB Circular A-87 (2 CFR Part 225)][0MB Circular A-122 (2 CFR Part 230)] [OMB Circular A-21(2 CFR Part 220)][48 CFR part 31]

There are only two cost categories for the WIA Title IB grants. These categories are: [] Program Costs [] Administration Costs

While there are only two cost categories, the number of reporting categories may be larger. Thus, the number of necessary cost objectives increases. The reporting formats for WIA Title I programs indicate that an organization must also report program income, both earned and expended, as well as the non-Federal costs of each program. Grantees should carefully review their systems for charging costs to ensure that all the cost activities may be adequately accounted for and that the costs reported on the applicable quarterly Federal expenditure reports (e.g., Quarterly Financial Status Report (QFSR)) are traceable to both the accounting system and source documentation.

WC Fiscal Policies Workforce Connections is an equal opportunity employer/program.

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Addendum-1

I. Cost Classification

The OMB Circulars describe cost classification as the process used to assign allowable costs to the benefiting cost objectives in the grantee's general ledger or official books of account. Every cost expended for allowable DOL/ETA grant activity must be traceable through the accounting system to the source documentation that supports all expenditures and to the data provided on required WC financial reports.

A. Cost Category - Administrative: [20 CFR §667.220] The costs of administration are the allocable portion of necessary and reasonable allowable costs that are associated to specific functions, and which are not related to the direct provision of workforce investment services, including services to participants and employers. These costs can be both personnel and non-personnel and both direct and indirect.

General allowable costs include, but are not limited to the following:

1. General administrative functions such as accounting; 2. Financial and cash management; 3. Procurement, contracting, negotiating activities; 4. Property management duties; 5. Personnel management, and payroll; 6. Audit functions and those duties associated with coordinating the resolution of

findings originating from audits, monitoring, incident reports, or other investigations;

7. General legal services; 8. Performing oversight and monitoring related to WIA of administrative functions; 9. Costs of goods and services required for administrative functions of the program,

including goods and services such as rental or purchase of equipment, utilities, office supplies, postage, and rental and maintenance of office space;

10. The cost of awards made to sub-recipient or vendor organizations for administrative services of the awarding agency (e.g., a payroll service for staff or participants);

11. Travel costs incurred for official business in carrying out administrative activities or the overall management of the WIA system;

12. Costs of information systems related to administrative functions, (e.g., personnel, procurement, purchasing, property management, accounting and payroll systems) including the purchase, systems development and operating costs of such systems.

13. Awards to sub-recipients or vendors that are solely for the performance of administrative functions are classified as administrative costs.

14. Personnel and related non-personnel costs of staff who perform both administrative functions specified above, item a) trough J), and programmatic services or activities must be allocated as administrative or program costs to the benefitting cost objectives/categories based on documented distributions of actual time worked or other equitable cost allocation methods.

Workforce Connections Policy FIS-020-02 WC Fiscal Policies Workforce Connections is an equal oppo1tunity employer/program.

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B. Cost Category - Program:

Addendum-1 Continuation

Costs directly related to the provision of workforce investment activities, and do not relate to the overall management and administration of the workforce investment system.

Allowable costs by function include, but are not limited to, the following:

1. Personnel and related non-personnel costs for individuals directly engaged in providing direct training and employment services.

2. Other personnel and related non-personnel costs of program managers, supervisors and/ or coordinators, whose time has been properly allocated among benefitting cost categories.

3. Miscellaneous allowable costs including payment to vendors for goods or services procured for the benefit of program participants in the receipt of direct training services.

4. Payment related to on-the-job training programs, customized training, and work experience.

5. Participant payments: Allowable costs include supportive services required for participation but which the participant cannot afford and services needed to assist participants to secure and retain employment.

6. Tracking or monitoring of participants and performance information; 7. Employment statistics information, including job listing information, job skills

information, and demand occupation; 8. Performance and program cost information on eligible providers of training services,

youth activities, and appropriate education activities; 9. Local area performance information; and 10. Other costs: General allowable costs incurred by the Local Workforce Investment

Board (LWIB) or the grant recipient for preparing program projects, programs and projects, agreements, and supervision of program staff.

C. Only the following Title IB entities will incur costs that are to be reported as administrative costs:

[] The State (as the grant recipient) [] The State Workforce Investment Board [] The Local Workforce Investment Board (LWIB) [] The local direct grant recipient [] The local direct grant sub-recipient and/or fiscal agent whose sole purpose is to assist

in the administration of grant funds [] The local One-Stop operator [20 CFR 667.220 (a)]

D. Administrative Costs and Limitation WIA Title IB formula grants: Administrative costs are limited in the WIA Title IB program to a maximum of 10 percent of the total program year allocation at the local level for carrying out workforce investment activities [PL 150-220 Sec. 128 (b) (4) (A).

Workforce Connections Policy FIS-020-02 11 WC Fiscal Policies Workforce Connections is an equal oppo1tunity employer/program.

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Addendum-1 Continuation

E. The cost classification structure must provide the capability to track costs for each of the two categories, Admb1i~t.:r.ati.v~ and fr.Q&:r.~m., and provide supporting documentation in support of how each cost is charged. Source documentation is basically the proof that costs reported to WC are, in fact, allowable and allocable to the grant. Such items as cancelled checks, invoices, purchase orders, paid bills, payrolls, time and attendance records, contract and sub-award documents, are just some examples of acceptable source documentation. When supporting documentation cannot be provided for every dollar expended under the grant, a questioned cost will be flagged, which may very well result in a disallowed cost.

F. Cost Classification Matrix The matrix of costs included is presented only as a guide for the classification ofWIA costs. Careful consideration must be given to the activity with which a cost is associated and the category that benefits from the related activity. Also consider the provision of 20 CFR 667.22o(c)(4) that provides for the classification of all allowable costs associated with contracts/subcontracts/ sub-grants awarded for the primary purpose of delivering programmatic services as program costs. This includes costs that ordinarily would be classified as administrative costs.

Matrix of Suecific Cost and Cate~ory Classification Grantee Costs Admin Program

Staff: Accounting x Administrative Overhead x Advertising x x Audit Services x Audit Staff x Automatic Data Processing x x Budgeting x Case Management x Clerical Asst. to a Supervisor x x Clerical Asst. to Training Personnel x Coordination of Participant Services x Counseling x Data Processing Staff x x Development of OJT /WE Training Plans x Eligibility Determination x Executive Staff x x Fiscal Staff x Follow-Up Analysis x Initial Assessment x Intake x Job Coach x

Workforce Connections Policy FIS-020-02 11 WC Fiscal Policies Workforce Connections is an equal oppoitunity employer/program.

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Matrix of Specific Cost and Cate~ory Classification Grantee Costs Admin

Job Develooer Job Search Assistance Labor Market Analysis Legal Staff x Maintenance Staff x Monitoring x Obiective Assessment (Employability /Testin2:) Outreach to Employers to Obtain Job Listings Participant Follow-Up Personnel Staff x Placement Staff Program Analyst Program Design/Curriculum Supervisors x Training Personnel (includes remedial education, basic skills, institutional training) Other: Capital Expenditures x Communication x Equipment Exoenditures x Indirect Costs x Insurance and Indemnification x Interest x Maintenance and Repair x Management Studies x Materials and Supplies x Memberships x Motor Pools x Premises x Professional Services x Profits x Publication and Printing x Rental Costs x Staff Training and Education x Subscriptions x Taxes x Transportation x Travel x Utilities x

Addendum-1 Continuation

Protn"am x x x

x x x x x

x x x x x

x x x x x x x x x x x x x x x x x x x x x x

Workforce Connections Policy FIS-020-02 WC Fiscal Policies Workforce Connections is an equal oppo1tunity employer/program.

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Matrix of Specific Cost and Category Classification Grantee Costs Admin

Participant Costs: 100% of Participant Payments for Work Experience Program 100% of Participant Payments for Vocational Exploration 100% of Participant Payments for Limited Internships Allowances Incentive/Bonus Payments OJT/Occupational Skills Training Tuition: Entrance Fees for Participants (Lab fees, parking fees, application fees, accounting fees, graduation fees) Supportive Services and Financial Assistance Tuition for Participants Support Services: Child Care Employment Related Tools and/or Supplies Work Related Cards( e.g., Health, Sheriff) Housing Utilities Transportation (e.g., public transportation, gas voucher)

Addendum-1 Continuation

Pro,2ram

x

x x x x x

x x x

x x x x x x

Workforce Connections Policy FIS-020-02 WC Fiscal Policies Workforce Connections is an equal oppo1tunity employer/program.

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