04 NCAC 20B .0303          COST STANDARDS

(a)  For cost reimbursement contracts and subgrants, the subrecipient may elect to receive its costs by advance or by reimbursement, unless the Division determines to condition funding by requiring reimbursement, which shall usually be limited to interruptions in federal funding or the absence of assurance of the fiscal integrity of the subrecipient.

(b)  Subrecipients shall include in expenditure or reimbursement reports all allowable costs actually incurred during the report period. Allowable costs or expenditures and the frequency and format of financial reporting will be determined by the Division and by federal law and reporting requirements.

(c)  Cost standards may vary according to the type of contract or subgrant agreement executed between the Division and the subrecipient.

(d)  Any subgrantee or division contractor that intends to recover, by advance or reimbursement, must have an approved indirect cost rate negotiated with its cognizant agency or, if it has no federal cognizant agency, with the Division. A subgrantee or division contractor that reimburses or advances payment for indirect costs to its contractors and a contractor that reimburses or advances payments for indirect costs to its subcontractors are responsible for ascertaining the existence of, or negotiating those indirect cost rates.

(e)  Income derived from activities that have been funded by JTPA funds, with the exception of on‑the‑job training and tryout employment, is program income and is subject to division instructions on program income. Any such income shall increase the funds for that program and shall be used for program purposes (without regard, however, to cost categories) unless otherwise specifically prohibited. Program income received by state agencies, local education agencies and quasi‑public non‑profit organizations, such as private non‑profit hospitals, may be exempted from all or some of the program income instructions on a showing to the Division of good cause for the exemption.

(f)  In‑kind contributions of services and donations of property are generally allowable only to offset disallowed costs, except that in‑kind contributions and donations may be used for matching fund purposes. Offset is only permissible with the prior written approval of the Division.

(g)  The matching contribution required for some employment and training activities may, without limitation, consist of:

(1)           Charges incurred by a subrecipient as project costs including charges not requiring cash outlays during the subgrant or contract period;

(2)           Federal funds, only to the extent the authorizing legislation specifically permits their use as matching funds;

(3)           Project costs financed with cash contributed or donated to the subrecipient by non‑federal third parties;

(4)           Employer's on‑the‑job training contributions;

(5)           Full time equivalency accruals in the community college system earned by Title III participants (available for Title III only);

(6)           Unemployment benefits paid from state funds to participants (limited to 50 percent of the matching funds contribution);

(7)           Employers' expenditures on behalf of Title III participants, such as the cost associated with outplacement centers, retraining programs, resume services and the like, during the period of the subgrant or contract and to the extent that the activities conducted are allowable activities within the contract or subgrant;

(8)           Education costs, which may be based on a proportion of actual costs relative to the participation of participants in the education services, plus extraordinary costs of education services, provided to JTPA participants;

(9)           In‑kind services, to the extent approved, that provide services that are reasonable and necessary for the proper and efficient operation and accomplishment of program or project objectives;

(10)         Donated property that is necessary and reasonable for the proper and efficient operation and accomplishment of program or project objectives, which may be considered as part of the matching share on approval of the Division; and

(11)         Such other property, services, expenditures or costs as the Director may determine contributes to program or project objectives.

History Note:        Authority G.S. 143B‑430(b); 20 C.F.R. 629.31; 20 C.F.R. 629.46; 41 C.F.R. 29.70; OMB Circular A‑102, January 1981; Ex. O. 93, June 8, 1983;

Eff. February 1, 1976;

Transferred from T01: 18 Eff. September 15, 1981;

Amended Eff. October 1, 1984; August 1, 1982;

Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. April 27, 2019.