(3) Audit services.
The cost of audits contracted for by a grantee are allowable. However, these audits will only be accepted as substitutes for the division's audit requirements if prior approval from the division was obtained.
(4) Bonding costs.
Costs of premiums for fidelity bonding for individuals who are directly involved with authorizing or processing JTPA financial transactions are allowable.
Costs incurred for the development, preparation, presentation, and execution of budgets are allowable. Costs for services of a central budget office are generally not allowable since these are general agency costs. However, where employees of the central budget office actively participate in the JTPA budget process, the cost of identifiable and documented services is allowable.
(6) Communication costs.
Costs incurred for telephone services, local and long distance telephone calls, telegrams, radiograms, postage and the like, are allowable. That portion of costs for installation of a new communications system which is necessitated by the addition or expansion of JTPA programs is allowable.
DWD 805.05(7)(a)(a) General.
Compensation for personal services includes all remuneration, paid currently or accrued, for services rendered during the period of performance under the grant agreement, including but not necessarily limited to wages, salaries, and supplementary compensation and benefits. The costs of such compensation are allowable to the extent that total compensation for individual employees:
Follows an appointment made in accordance with agency policy, state and local rules and laws, or other requirements, where applicable; and
Is determined and supported as provided in par. (d)
. Compensation for employees engaged in JTPA activities will be considered reasonable to the extent that it is consistent with that paid for similar work in other activities of the agency. In cases where the kinds of employees required for the JTPA activities are not found in the other activities of the agency, compensation will be considered reasonable to the extent that it is comparable to that paid for similar work in the labor market in which the employing agency competes for the kind of employees involved.
(b) Fringe benefits.
Costs identified under subds. 1.
are allowable to the extent that total compensation for employees is reasonable.
Employee benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, sick leave, court leave, military leave, and the like, if they are provided pursuant to an established leave system, and if the cost thereof is equitably allocated to all related activities, including grant programs.
Employee benefits in the form of employers' contribution or expenses for social security, employees' life and health insurance plans, unemployment insurance coverage, worker's compensation insurance, retirement plans for staff, severance pay, and the like, provided such benefits are granted under established plans and are distributed equitable to grant programs and to other activities.
No JTPA funds may be used for contributions on behalf of any JTPA program participant to retirement systems or plans.
If the leave system is fully funded, costs may be billed to the grant as funds are paid into the leave fund.
If the leave system is unfunded, costs may be billed to the grant as individuals take their paid leave. JTPA employees may not be treated differently from other employees. Agencies with unfunded systems should be aware of the unfunded liability that accumulates when staff does not take earned vacations.
Certain conditions require special consideration and possible limitations in determining costs under JTPA where amounts or types of compensation appear unreasonable. Among such conditions are the following:
Where compensation is made to members of nonprofit organizations, trustees, directors, associates, officers, or the immediate families thereof, determination should be made that such compensation is reasonable for the actual personal services rendered.
Any change in a grantee's compensation policy resulting in a substantial increase in the grantee's level of compensation will be examined carefully, particularly when it was concurrent with an increase in the ratio of JTPA grants to other activities of the grantee, or any change in the treatment of allowability of specific types of compensation due to changes in policy.
Payroll and distribution of time. Amounts charged to grants for personal services shall be based on payrolls documented and provided in accordance with generally accepted practices. Payrolls shall be supported by time and attendance or equivalent records for individual employees. Salaries and wages of employees chargeable to more than one cost objective shall be supported by appropriate cost distribution records. The method used shall produce an equitable distribution of time and effort, and:
Where time distribution reports are used, these reports shall reflect an after-the fact determination of the actual activity of each employee. Budget estimates determined before the services are performed, do not qualify as support for charges to grants.
Where time distribution reports are used, these reports shall be signed by the individual employee, or by a responsible supervisory official having first hand knowledge of the activities performed by the employee, attesting that the distribution of activity represents an accurate statement of the actual work performed by the employee during the periods covered by the reports.
Regardless of the method used, each report shall account for the total activity for which employees are compensated and which is required in fulfillment of their obligations to the organization.
Salaries and wages of employees used in meeting cost sharing or matching requirements on awards shall be supported in the same manner as salaries and wages claimed for reimbursement from granting agencies.
(8) Contingency provisions.
Contributions to a contingency reserve or any similar provision made for events the occurrence of which cannot be foretold with certainty as to time, intensity, or with an assurance of their happening are unallowable. The term "contingency reserve" excludes self-insurance reserves, pension funds and reserves for normal severance pay.
Contributions and donations of JTPA funds by the organization to other are unallowable.
Bad debts, including losses, whether actual or estimated, arising from uncollectible accounts and other claims, are unallowable.
Compensation for the use of buildings, other capital improvements, and equipment on hand may be made through use allowances or depreciation.
The computation of use allowances or depreciation shall be based on the acquisition cost of the assets involved. Where actual cost records have not been maintained, a reasonable estimate of the original acquisition cost may be used in the computation. The acquisition cost of an asset donated to the organization by a third party shall be its fair market value at the time of the donation.
The computation of use allowances or depreciation shall exclude:
The cost or any portion of the cost of buildings and equipment donated or otherwise borne directly or indirectly by the federal government irrespective of where title was originally vested or where it presently resides; and
Any portion of the cost of buildings and equipment contributed by or for the organization in satisfaction of a statutory matching requirement.
Where the use allowance method is followed, the use allowance shall be computed in accordance with current federal guidelines.
Where the depreciation method is followed, adequate property records shall be maintained and physical inventories shall be taken at least once every 2 years to ensure that assets exist and are usable. Any generally accepted method of computing depreciation may be used. However, the method of computing depreciation shall be consistently applied for any specific asset or class of assets for all affected programs and shall result in equitable charges considering the extent of the use of the assets for the benefit of such programs. Adequate depreciation records indicating the amount of depreciation taken each period shall also be maintained.
When the depreciation method is used for a particular class of assets, no depreciation may be allowed on any such assets that would be viewed as fully depreciated. However, a reasonable use allowance may be negotiated for such assets if warranted after taking into consideration the amount of depreciation previously charged, the estimated useful life remaining at time of negotiation, the effect of any increased maintenance charges or decreased efficiency due to age, and any other factors pertinent to the utilization of the asset for the purpose contemplated.
DWD 805.05(12)(a)(a) Services received.
Donated or volunteer services may be furnished to an organization by professional and technical personnel, consultants, and other skilled and unskilled labor. The value of these services is not reimbursable either as a direct or indirect cost.
(b) Goods and space.
Donated goods for example, expendable personal property or supplies, and donated use of space may be furnished to an organization. The value of the goods and space is not reimbursable either as a direct or indirect cost. However, depreciation or use allowances may be charged on donated assets in keeping with the provisions in sub. (11)
(13) Employee morale, health, and welfare costs and credits.
The costs of in-house publications, health or first aid clinics, infirmaries, recreational activities, employees' counseling services, and other expenses incurred in accordance with the grantee's established practice or custom for the improvement of working conditions, employer-employe relations, employee morale, and employee performance are allowable. Such costs shall be equitably apportioned to all activities of the grantee. Income generated from any of these activities shall be offset against expenses.
(14) Entertainment costs.
Costs of amusement, diversion, social activities, ceremonials, and costs relating thereto, such as meals, lodging, rentals, transportation, and gratuities are unallowable.
Expenditures for equipment with a unit acquisition cost of $500 or more but less than $1,000 are allowable.
Expenditures for equipment with a unit acquisition cost of $1,000 or more are only allowable with the prior written approval of the division.
All lease purchase agreements with a total unit acquisition cost of $1,000 or more require the prior written approval of the division.
Capital expenditures for land or buildings are only allowable with the prior written approval of the division.
Capital expenditures for improvements to land, buildings, or equipment which materially increase their value or useful life are only allowable with the prior written approval of the division.
See sub. (11)
for allowability of use allowances or depreciation on buildings, capital improvements, and equipment. Also, see sub. (37)
for allowability of rental costs for land, buildings, and equipment.
Costs of exhibits relating specifically to the grant programs are allowable.
(17) Fines and penalties.
Costs of fines and penalties resulting from violations of, or failure of the grantee to comply with federal, state, and local laws and regulations are unallowable.
(18) Followup supportive services.
Costs for supportive services necessary to enable a participant to retain employment for a period not to exceed 6 months following completion of training are allowable.
(19) Fringe benefits.
See compensation for personal services, sub. (7)
(20) Fund raising.
Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions, along with any indirect costs relating to those expenses, are unallowable. However, costs associated with the Private Industry Council's right to "solicit and accept contributions and grant funds (from other public and private sources)" as provided for in the JTPA section 103 (e) (2) are allowable.
(21) Governmental expenses.
The salaries and expenses, including meeting per diems, of the chief elected official of a unit of government and salaries and expenses of local governmental bodies, such as county supervisors, city councils, and school boards, are considered a cost of general local government and are unallowable. However, travel costs are allowable in accordance with the provisions in sub. (44)
. This restriction applies only to those individuals serving as representatives of governmental bodies.
(22) Idle facilities and idle capacity.
The costs of idle facilities and idle capacity are allowable only with the prior written approval of the division.
"Insurance" includes insurance which the grantee is required to carry, or which is approved under the terms of the grant and any other insurance which the grantee maintains in connection with the general conduct of its operations. This subsection does not apply to insurance which represents fringe benefits for employees.
Costs of insurance required or approved and maintained pursuant to the grant other than audit exception insurance are allowable.
Costs of other insurance maintained by the grantee in connection with the general conduct of its operations are allowable subject to the following limitations:
Types and extent of coverage shall be in accordance with grantee policy, sound business practice and the rates and premiums shall be reasonable under the circumstances.
Costs of insurance or of any provisions for a reserve covering the risk of loss or damage to government property are unallowable except to the extent that the grantee is liable for such loss or damage.
Provisions for a reserve under a self-insurance program approved by the grantor are allowable to the extent that types of coverage, extent of coverage, rates, and premiums would have been allowed had insurance been purchased to cover the risks.
Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar responsibilities are allowable only to the extent that the insurance represents additional compensation. The cost of such insurance when the grantee is identified as the beneficiary is unallowable.
Costs of insurance policies offering protection against debts established by the federal government, commonly called audit exception insurance, are unallowable.
Costs of personal liability insurance for PIC members are allowable. Personal liability insurance for chief local elected officials and their support staff is an allowable cost if the following conditions are met:
The affected chief local elected officials provide evidence that their current general liability coverage, required as a standard cost to the general unit of local government which they represent, is insufficient to provide adequate protection for liability incurred as a result of their actions as public officials under JTPA; and
The affected chief local elected officials assure and certify that JTPA funds utilized for the purpose of purchasing personal liability insurance for themselves and their support staff does not and will not supplant local funds which otherwise would have been available to purchase such liability insurance; and
JTPA funds so authorized and utilized for the purchase of personal liability insurance for chief local elected officials their support staff or both may not exceed the cost of including local officials as other insureds under a private industry council personal liability insurance policy;
Actual losses which could have been covered by permissible insurance through the purchase of insurance or a self-insurance program are unallowable unless expressly provided for in the grant, except:
Costs incurred because of losses not covered under nominal deductible insurance coverage provided in keeping with sound business practice are allowable; and
Minor losses not covered by insurance, such as spoilage, breakage, and disappearance of supplies, which occur in the ordinary course of operations, are allowable.
Costs incurred for interest, however represented, are unallowable, except that the cost of interest paid to an external party is allowable where associated with the following assets, provided the assets are used in support of sponsored agreements, and the total cost (including depreciation or use allowance, operation and maintenance costs, and interest) does not exceed the rental cost of comparable assets in the same locality:
Major reconstruction and remodeling of existing buildings completed on or after July 1, 1982.
Acquisitions or fabrication of capital equipment completed on or after July 1, 1982, costing $1,000 or more, with the prior written approval of the division.
(25) Investment management costs.
Costs of investment counsel and staff and similar expenses incurred solely to enhance income from investments are unallowable.
(26) Legal fees.
The cost of legal expenses required in the administration of grants is allowable. Legal services furnished by the chief legal officer of a unit of government, or staff, solely for the purpose of discharging general responsibilities as a legal officer are unallowable. Legal expenses for the prosecution of claims against the federal government, the division, or the state of Wisconsin are unallowable, except that costs to prosecute claims against the state or an agency of the state are allowable when the prosecution is for claims between a grantee and a state agency subrecipient.
(27) Losses on other awards.
Any excess of costs over income on any grant is unallowable as a cost of any other grant. This includes, but is not limited to, the organization's contributed portion by reason of cost sharing agreements or any underrecoveries through negotiation of lump sums for, or ceilings on, indirect costs.
(28) Maintenance and repair costs.
Costs incurred for necessary maintenance, repair, or upkeep of buildings and equipment, including government property unless otherwise provide for, which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life shall be treated as capital expenditures in accordance with sub. (15)
(29) Materials and supplies.
The costs of materials and supplies necessary to carry out a grant are allowable. Such costs should be charged at their actual prices after deducting all cash discounts, trade discounts, rebates, and allowances received by the organization. Withdrawals from general stores or stockrooms should be charged at cost under any recognized and consistently applied method of pricing. Incoming transportation charges may be a proper part of material cost. Materials and supplies charged as a direct cost should include only the materials and supplies actually used for the performance of the grant, and due credit should be given for any excess material or supplies retained, or returned to vendors.
(30) Meetings and conferences.
Costs associated with the conduct of meetings and conferences, including the cost of renting facilities, meals, speakers' fees, and the like, are allowable when the meeting or conference is related to the grant program.
(31) Memberships, subscriptions, and professional activity costs. DWD 805.05(31)(a)(a)
Costs of the grantee's membership in civic, business, technical, and professional organizations are allowable, provided that:
The cost of the membership is reasonably related to the value of the services or benefits received; and
The expenditure is not for membership in an organization which devotes a substantial part of its activities to lobbying.