VOCATIONAL EDUCATION
Nonregulatory guidance for programs with advance appropriations in FY 2000

Q5. How long are the funds that become available on October 1 available for obligation by State and local recipients?

A5. With the exception of the Reading Excellence Act (REA) and the vocational education basic grant programs, the funds that become available on October 1, 2000 will be available for obligation by State and local recipients through September 30, 2002. Note that the funds made available on July 1, 2000 also are available for obligation until September 30, 2002. This period of availability includes the initial period authorized by the appropriations act and an additional 12 months authorized by section 421(b) of the General Education Provisions Act (the "Tydings Amendment"). Thus, funds awarded on July 1 are available for obligation for 27 months, while funds awarded on October 1 are available for obligation for 24 months.

With respect to vocational educational basic grant funds, a State may make these funds available to subgrantees for only one academic year. A subgrantee must return any unexpended funds for the State to reallocate. The returned funds will be available for the State to reallocate and for new subgrantees to obligate until September 30, 2002.

With respect to REA funds, beginning with the date of its grant, a State has a three–year period during which to award the REA funds. The State may issue subgrants until the end of that three–year period. In issuing REA local reading improvement subgrants, the State must provide sufficient funds to an LEA to cover a two–year period. In issuing REA tuition assistance subgrants, the State may provide funds for up to a two–year period to an LEA.

Q6. Must a State or subgrantee account for funds that become available on July 1 separately from funds that become available on October 1?

A6. No. However, a State must be able to show that each subgrantee received its correct share of the total FY 2000–appropriated funds consistent with any statutory within–State formula applicable to a program. Moreover, if a State does not award pre–award costs to its subgrantees, the subgrantees must be able to demonstrate that their obligations prior to October 1 do not exceed their allocation of "July 1 funds."

Q7. May a State use and permit a subgrantee to use funds it receives on or after October 1 to retroactively fund allowable pre–award costs it may have incurred prior to October 1 in operating its school year 2000–2001 program or REA program?

A7. Yes. In operating its school year 2000–2001 program or REA program, a State may use and may authorize a subgrantee to use funds it receives on or after October 1, 2000 to retroactively fund allowable pre–award costs it may have incurred between the date it was first authorized to begin obligating FY 2000 funds and October 1. (For example, for most States, the date they may begin obligating FY 2000 formula grant funds would be July 1. However, under 34 CFR 76.703, if a State plan were due and were not submitted in substantially approvable form in a timely manner, that State's authority to obligate Federal funds could be delayed.)

The obligation of pre–award costs is made at the State or local level on the first day of the supplemental grant or subgrant period––i.e., a date on or after October 1. They must be costs that would be allowable if incurred after the date of the award and must be approved, in writing, by the Department (in the case of State grants) or the State (in the case of State subgrants).

Q8. If a program has a limitation on the amount of funds that may be carried over to the following fiscal year, how is that amount calculated?

A8. Under Part A of Title I of the ESEA, a local educational agency (LEA) may not carry over to the 2001–2002 school year more than 15% of the basic and concentration grant funds it receives for FY 2000. Similarly, under the Safe and Drug–Free Schools and Communities Program, an LEA generally may not carry over more than 25% of the total amount it receives for FY 2000. These caps are calculated on the total allocation an LEA receives from its July 1 and October 1 installments.


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Last Modified: 09/21/2006