Adult Education Administrator's Manual

January 2011
(Published August 2005; revised June, August 2007, October 2008, August 2008, January 2011)

Policy

Cost Principles (cont'd)

**Cost Principles**
Items of Cost	OMB Circular A-87 State and Local Governments (i.e., school districts, ESCs, and open enrollment charter schools operated by a governmental entity)	OMB Circular A-122 Non-Profit Organizations (i.e., includes open enrollment charter schools operated by a non-profit organization)	OMB Circular A-21 Educational Institutions (i.e., institutions of higher education) (i.e., includes open enrollment charter schools operated by a college/university)
Fringe benefits (employees)	Allowable.	Allowable.	Allowable.
Fundraising, including financial campaigns and solicitation of gifts, donations, contributions, etc.	Unallowable.	Unallowable.	Unallowable.
Gains and Losses on Disposition of Assets	Allowable as stipulated in OMB A-87.	Allowable as stipulated in OMB A-122.	Allowable as stipulated in OMB A-21.
General Government Expenses	Unallowable.	Not addressed.	Not addressed.
Gifts or items that appear to be gifts	Unallowable.	Unallowable.	Unallowable.
Goods and Services for Personal Use	Unallowable.	Unallowable.	Unallowable.
Hospitality Rooms	Unallowable.	Unallowable.	Unallowable.
Housing and Personal Living Expenses.	Unallowable.	Allowable for organization's officers when necessary for performance of grant award with specific approval by TEA.	Unallowable.
Idle Facilities and Capacity	Unallowable except to meet fluctuations in workload or because of changes in program requirements. Allowable only when a normal part of doing business and for a reasonable period of time as specified in OMB A-87.	Unallowable except to meet fluctuations in workload or because of changes in program requirements. Allowable only when a normal part of doing business and for a reasonable period of time as specified in OMB A-87.	Not addressed.
Insurance and Indemnity (cont'd)	Indemnification (compensation for loss or damage -- includes securing the LEA against liabilities to third persons and other losses not compensated by insurance or otherwise) is allowable only with specific approval by TEA. NOTE: Ed-Flex programs do not require prior approval from TEA. For all other grant programs, these costs must be specifically budgeted and approved by TEA in the applicable application prior to the expenditure of funds. Actual losses which could have been covered by insurance are unallowable except as provided for in OMB A-87. Cost of insurance to a reserve for self-insurance programs are allowable as specified in OMB A-87.
Interest	Interest paid (or incurred) to an external party during the grant period for building purchase, construction, or remodeling completed on or after October 1, 1980 (as specifically outlined in OMB A-87) is allowable. Interest paid or incurred during the grant period for equipment (as specifically outlined in OMB A-87) is allowable.	Interest on debt paid (or incurred) to an external party to acquire or replace capital assets, including renovations, alterations, and equipment, is allowable as specifically outlined in OMB A-122.	Interest paid to an external party for building purchase, construction, remodeling, or equipment is allowable as specifically outlined in OMB A-21.
Investment Management Costs	Allowable if for pensions and self-insurance funds. Unallowable if solely to enhance income.	Allowable if for pensions and self-insurance funds. Unallowable if solely to enhance income.	Unallowable if solely to enhance income. Costs related to custody and control of monies and securities are allowable.
Labor Relations	Not addressed.	Allowable as specified in OMB A-122.	Allowable as specified in OMB A-21.
Legal Expenses	Allowable when required for the administration of a grant program. Legal expenses for claims against the federal or state government are Unallowable.	Allowable when required for the administration of a grant program. Legal expenses for claims against the federal or state government are unallowable.	Allowable when required for the administration of a grant program. Legal expenses for claims against the federal or state government are unallowable.
Legislative Expenses and Expenses for Similar Governmental Bodies (such as school boards)	Unallowable.	Unallowable.	Unallowable.
Lobbying	Unallowable.	Unallowable.	Unallowable.
Losses on other Awards	Unallowable (see section 41 of OMB A-87, Under recovery of costs under Federal Agreements)	Unallowable.	Unallowable.
Maintenance, Operations, and Repair	Maintenance and operation of building space used for grant activities is allowable as specified in OMB A-87. Costs which add to the permanent value of property or prolong its life shall be treated as capital expenditures. Maintenance and repair of property and equipment is allowable with specific approval by TEA when it materially increases the value or useful life of the property or equipment. These costs must be specifically budgeted and approved by TEA in the applicable grant application prior to expenditures.	Maintenance and operation of building space used for grant activities is allowable as specified in OMB A-122. Costs which add to the permanent value of property or prolong its life shall be treated as capital expenditures. Maintenance and repair of property and equipment is allowable with specific approval by TEA when it materially increases the value or useful life of the property or equipment. These costs must be specifically budgeted and approved by TEA in the applicable grant application prior to expenditures.	Maintenance and operation of building space used for grant activities is allowable as specified in OMB A-21. Costs which add to the permanent value of property or prolong its life shall be treated as capital expenditures. Maintenance and repair of property and equipment is allowable with specific approval by TEA when it materially increases the value or useful life of the property or equipment. These costs must be specifically budgeted and approved by TEA in the applicable grant application prior to expenditures.
Materials and Supplies (includes shipping costs)	Allowable.	Allowable.	Allowable.
Meetings/Conferences (includes rental of meeting space and equipment; supplies/materials; consultant fees, etc.) Grant funds may not be used to pay for souvenirs, memorabilia, promotional items, or gifts.	Allowable for dissemination of information related to the grant program. Refreshments for meetings/ conferences are not allowable. Group meals (i.e., banquets, luncheons, etc.) for meetings/ conferences are not allowable except as described in the section on "Food Costs".	Allowable for dissemination of information related to the grant program. Refreshments for meetings/ conferences are not allowable. Group meals (i.e., banquets, luncheons, etc.) for meetings/ conferences are not allowable except as described in the section on "Food Costs".	Allowable for dissemination of information related to the grant program. Refreshments for meetings/ conferences are not allowable. Group meals (i.e., banquets, luncheons, etc.) for meetings/ conferences are not allowable except as described in the section on "Food Costs".
Memberships	Allowable for membership with business, professional and technical organizations related to the grant program. Membership must be in the name of the grantee organization and not in the name of an individual. Memberships in civic, community, or social organizations are allowable only with prior specific approval from TEA. NOTE: Ed-Flex programs do not require prior approval from TEA. For all other grant programs, these costs must be specifically budgeted and approved by TEA in the applicable application prior to the expenditure of funds. Memberships in organizations substantially engaged in lobbying are Unallowable.	Allowable for membership with business, professional and technical organizations related to the grant program. Membership must be in the name of the grantee organization and not in the name of an individual. Memberships in civic or community organizations are allowable only with prior specific approval from TEA. NOTE: Ed-Flex programs do not require prior approval from TEA. For all other grant programs, these costs must be specifically budgeted and approved by TEA in the applicable application prior to the expenditure of funds. Memberships in social clubs are Unallowable.	Allowable for membership with business, professional and technical organizations related to the grant program. Membership must be in the name of the grantee organization and not in the name of an individual. Memberships in civic or community organizations or social clubs are Unallowable.
Memorabilia	Unallowable.	Unallowable.	Unallowable.
Motor Pools	Allowable for grant purposes.	Not addressed.	Not addressed.

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