Texas Even Start Administrative Manual

June 2004, (Revised January 2008, September 2008)

Even Start Guidance

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Local Administration (cont'd)

Local Application

In order to be eligible to receive a subgrant, an applicant must submit an application to the SEA in the form and containing the information required by the SEA. (See the Eligible Entity section of this guidance for further information on what constitutes an eligible applicant.) At a minimum, each application must demonstrate that the applicant has the qualified personnel needed to develop, administer, and implement a high-quality Even Start program and provide access to the special training necessary to prepare staff for program implementation. (Section 1237(b)) Each application must also include a plan of operation and continuous improvement for the program. (Section 1237(c)(1)) The plan must include the following information, as well as any other information required by the SEA:

• (A) a description of the program objectives, strategies to meet those objectives, and how the objectives are consistent with the State's indicators of program quality;
• (B) a description of the activities and services to be provided by the program, including a description of how the program will incorporate all of the program elements required by section 1235 (See the Local Administration – Program Elements section.);
• (C) a description of the population to be served and an estimate of the number of participants to be served;
• (D) as appropriate, a description of the applicant's collaborative efforts with institutions of higher education, community-based organizations, the SEA, private elementary schools, or other eligible organizations, in carrying out the program;
• (E) a statement of the methods that the project will use to: ensure that it will serve families most in need of Even Start activities and services, provide Even Start services to individuals with special needs such as individuals with limited English proficiency and individuals with disabilities, and encourage participants to remain in the program for a time sufficient to meet the program's purpose;
• (F) a description of how the plan is integrated with other ESEA programs or other programs, as appropriate; and
• (G) a description of how the plan provides for rigorous and objective evaluation of progress toward the program objectives described in (A) and for continuing use of evaluation data for program improvement.

Each plan submitted as part of an application is effective for the duration of the subgrantee’s participation in Even Start and may be periodically reviewed and revised as needed. The plan may be submitted as part of a consolidated local application. (Section 1237(d))

Fiscal Issues

An Even Start project must use Federal Even Start funds to support the cost of providing family literacy services that involve parents and children, primarily from birth through age seven, in a cooperative effort to help parents become full partners in the education of their children and to assist children in reaching their full potential as learners. (Section 1234(a)) The remaining cost of the program may be provided in cash or in kind from any source, including any Federal funds other than Even Start. (See the Federal and Local Share and Indirect Costs sections of this guidance for further information.)

Title I, Part A Collaboration

If a project collaborates with a program under Title I, Part A, and Title I, Part A contributes to paying the cost of providing programs under this part to children 8 years of age or older, the Even Start project can allow the participation of families with children 8 years of age or older. (See the Continuing Family Eligibility section of this guidance.) However, the focus of the local program must continue to remain on families with young children. (Section 1236(b)(5)) The intent of this provision is not to divert substantial Even Start funds to families with older children, but to encourage greater contribution from the Title I, Part A program.

Allowable Costs

Projects may use Federal Even Start grant funds and matching resources only for the allowable costs of those projects. (EDGAR, section 80.22) For each type of organization, there is a separate set of Federal principles for determining allowable costs. State-administered grants that have LEAs as the fiscal agent, and Indian tribes and tribal organizations, must use the cost principles in OMB Circular A-87. Grantees that have institutions of higher education (IHEs) as the fiscal agent must use the cost principles in OMB Circular A-21, and non-profit organizations that are fiscal agents must use OMB Circular A-122. (http://www.whitehouse.gov/omb/circulars/index.html)

The cost principles provide general rules for allowability, and in addition, list alphabetically certain specific items of cost (such as “materials cost”), indicating whether those specific cost items are allowable, unallowable, or allowable only with the prior approval of the awarding agency. In general, unless prohibited by the statute, regulations, or cost principles, local projects may use Even Start funds and matching resources for costs that are necessary and reasonable to meet the objectives of their projects and provide each of the 15 required program elements, including the four core family literacy service instructional components.

Following are some examples of allowable costs. Other allowable costs are found in EDGAR and the applicable cost principles.

• Materials and supplies. Generally, a project may use Federal Even Start funds and matching resources to purchase materials and supplies related to the Even Start project. (See the applicable cost principles under “material costs” or “materials and supplies.”)
• Equipment. Generally, capital expenditures for equipment are allowable as a direct cost when approved by the awarding agency. The cost principles define “equipment” as an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals the lesser of (a) the capitalization level established by the governmental unit for financial statement purposes, or (b) $5,000. Items of equipment with an acquisition cost of less than $5,000 are considered to be supplies under Circular A-87 and are allowable under all of the cost circulars as direct costs of Federal awards without requiring specific awarding agency approval. (See the applicable cost principles under the paragraph of selected cost items concerning “Equipment and other capital expenditures”: Circular A-87, Attachment B, paragraph 19; Circular A-21, Section J, paragraph 16; Circular A-122, Attachment B, paragraph 15.)
• Food and meals for project participants. A project may use Federal Even Start funds to purchase food and meals for project participants to the extent those expenditures are reasonable and necessary as a support service under section 1235(3), when unavailable from other sources and when necessary for a person’s participation in the Even Start program. For example, providing food may be reasonable and necessary when academic instruction is provided in the evening and participants do not have time to eat at home before coming to the program, at recruitment functions, or when individuals otherwise would not participate in the program. However, entertainment costs, including meals when provided for the purpose of being a social activity or amusement, are unallowable under all of the cost principles.
• Minor remodeling. Even Start projects may use funds for the reasonable and necessary costs of minor remodeling, as that term is defined in EDGAR, section 77.1. Under that definition, “minor remodeling” means, in general, minor alterations to a previously completed building. The specific term does not include building maintenance and repairs, but both are allowable expenditures to the extent they are necessary and reasonable. The term excludes building construction or structural alterations to buildings, which are unallowable expenditures.
• Rental costs of buildings and equipment. Generally, reasonable rental costs are allowable under all of the OMB cost circulars, subject to specific requirements in each applicable OMB cost circular that should be reviewed before a project enters into a rental agreement. The rental or lease costs of buildings and equipment, which are owned by a partner to an Even Start grant (or to another entity with a less-than-arms-length relationship with any of the partners), generally are valued on a different basis than are buildings and equipment rented or leased from a third-party. (Refer to the applicable OMB cost circulars for more detail about valuation.)
• Transportation. Projects may spend Even Start funds on transportation for participants as a support service under section 1235(3), when unavailable from other sources and when necessary for a person’s participation in the Even Start program. Transportation costs must be reasonable and necessary. If a project wishes to provide this transportation through the lease or purchase of a vehicle, such a lease or purchase would be considered a capital expenditure and the applicable OMB cost circular rules for equipment and capital expenditures apply, including the requirement to obtain the approval of the awarding agency.

Unallowable Costs

Following are some examples of unallowable costs. Other unallowable costs are found in EDGAR and the applicable cost principles.

• Indirect costs. Local Even Start projects may not use project funds (including Even Start funds and matching funds) for any indirect costs of a project. (Section 1234(b)(3)) The differences between direct and indirect costs are explained in the applicable cost principles described above. In general, indirect costs are those costs that are incurred for common or joint purposes among multiple cost objectives (for example, the Even Start program and the school district’s program) and cannot be readily and specifically identified with a particular final cost objective without effort disproportionate to the results achieved (for example, the cost of heating and lights for a building in which multiple programs are located). States may use the Even Start funds that they reserve for State-level activities for indirect costs at the State level.

• Constructing, renovating, or acquiring real property. An Even Start project may not use Federal Even Start funds or matching resources to acquire real property, or for construction or renovation. (See EDGAR, section 75.533 for direct grantees of the Department, and section 76.533 for State-administered subgrants.) Construction includes structural alterations to buildings, but does not include minor remodeling (see above).
• Organized fundraising. Under OMB Cost Circular A-87, the costs of organized fundraising, including financial campaigns, solicitation of gifts and bequests, and similar expenses incurred to raise capital or obtain contributions are unallowable. However, expenditures of funds to obtain the statutorily required cost or matching share for Even Start grants are not considered to be unallowable fundraising.

Maintenance of Effort

Beginning with FY 2002, Even Start programs are subject to a maintenance-of-effort requirement (section 9521), which is the same as the requirement that has applied to Title I, Part A for a number of years (section 1120(A)(a)). As applied to Even Start, the maintenance-of-effort requirement means that an Even Start project may receive funds only if the SEA determines that the project’s LEA partner’s combined fiscal effort per student or the aggregate expenditures of the LEA and the State with respect to the provision of free public education by the LEA for the preceding fiscal year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding fiscal year. However, i n cases where a school district has failed to maintain effort in education expenditures, ED may waive that requirement if such a waiver would be equitable due to-- (1) exceptional or uncontrollable circumstances such as a natural disaster; or (2) a precipitous decline in the financial resources of the local educational agency. For additional information on the maintenance-of-effort requirement, you may want to talk with your Title I State or LEA director.

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