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.
Costs of the grantee's subscriptions to civic, business, professional, and technical periodicals are allowable, when related to grant activities.
Costs of attendance at meetings and conferences sponsored by others when the primary purpose is the dissemination of technical information, are allowable. This includes costs of meals, transportation, and other items incidental to such attendance. These costs must be consistent with regular practices followed for other activities of the grantee.
(32) Organization costs.
Expenditures, such as incorporation fees, brokers' fees, fees to promoters, organizers or management consultants, attorneys, accountants, or investment counselors, whether or not employees of the grantee, in connection with establishment or reorganization of a grantee, are allowable only with the prior written approval of the division, except that the costs of incorporating a PIC or consortium administrative entity for the purpose of carrying out programs under JTPA are allowable.
(33) Preaward costs.
Costs incurred prior to the effective date of the grant or contract, whether or not they would have been allowable under the grant or contract if incurred after such a date, are allowable only with prior written approval of the grantor.
(34) Professional service costs.
Costs of professional and consultant services rendered by persons who are members of a particular profession or possess a special skill, and who are not officers or employees of the grantee, are allowable.
(35) Proposal costs.
Costs incurred in preparing proposals for potential JTPA grant agreements are not allowable.
(36) Rearrangement and alteration costs.
Costs incurred for ordinary or normal rearrangement and alteration of facilities, and for special arrangement and alteration costs incurred specifically for the project, are allowable.
Subject to the limitations described in pars. (b)
, rental costs are allowable to the extent that the rates are reasonable in light of such factors as rental costs of comparable property, if any; market conditions in the area; alternatives available; and the type, life expectancy, condition, and value of the property leased.
Rental costs under sale and leaseback arrangements are allowable only up to the amount that would be allowed had the grantee continued to own the property.
Rental costs under less-than-arms-length leases are allowable only up to the amount that would be allowed had title to the property vested in the grantee. For this purpose, a less-than-arms-length lease is one under which one party to the lease agreement is able to control or substantially influence the actions of the other. Such leases include, but are not limited to those between
Organizations under common control through common officers, directors, or members; and
A grantee and a director, trustee, officer, or key employee of the grantee or immediate family either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest.
Rental costs under leases which create a material equity in the leased property, including any interest charges, are allowable only up to the amount which does not exceed rental costs of comparable assets in the same locality. For this purpose, a material equity in the property exists if the lease includes one or more of the following characteristics:
The grantee has the right to purchase the property for a price which at the beginning of the lease appears to be substantially less than the probable fair market value at the time it is permitted to purchase the property, commonly called a lease with a purchase option;
Title to the property passes to the grantee at some time during or after the lease period;
The initial term of the lease plus periods covered by any renewal options is equal to 75% or more of the economic life of the leased property. In this subparagraph, "economic life" means the period the property is expected to be economically usable by one or more users.
Similar costs for buildings owned by an agency are allowable where "rental rate" systems, or equivalent systems that adequately reflect actual costs, are employed. Such charges must be determined on the basis of actual cost, including depreciation based on the useful life of the building, interest paid or accrued, operation and maintenance, and other allowable costs. Where these costs are included in rental charges, they may not be charged elsewhere. No costs will be included for purchases or construction that were originally financed by the federal government.
(38) Severance pay.
Severance pay, also commonly referred to as dismissal wages, is a payment in addition to regular salaries and wages, by organizations to workers whose employment is being terminated. Costs of severance pay are allowable only to the extent that they are required by law, employer-employe agreement, established policy that constitutes, in effect, an implied agreement on the organization's part, or circumstances of the particular employment.
(39) Staff training and education.
The cost of training, customarily provided for employee development, which directly or indirectly benefits grant programs, is allowable.
(40) Supportive services.
Costs for services which a participant cannot otherwise afford, and which are necessary to enable a participant to take part in a Job Training Partnership Act program activity or retain employment, are allowable for a period not to exceed 6 months following termination from JTPA.