DWD 805.05(17)
(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.
DWD 805.05(18)
(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.
DWD 805.05(19)
(19) Fringe benefits. See compensation for personal services,
sub. (7).
DWD 805.05(20)
(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.
DWD 805.05(21)
(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.
DWD 805.05(22)
(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.
DWD 805.05(23)(a)(a) "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.
DWD 805.05(23)(b)
(b) Costs of insurance required or approved and maintained pursuant to the grant other than audit exception insurance are allowable.
DWD 805.05(23)(c)
(c) Costs of other insurance maintained by the grantee in connection with the general conduct of its operations are allowable subject to the following limitations:
DWD 805.05(23)(c)1.
1. 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.
DWD 805.05(23)(c)2.
2. 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.
DWD 805.05(23)(c)3.
3. 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.
DWD 805.05(23)(c)4.
4. 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.
DWD 805.05(23)(d)
(d) Costs of insurance policies offering protection against debts established by the federal government, commonly called audit exception insurance, are unallowable.
DWD 805.05(23)(e)
(e) 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:
DWD 805.05(23)(e)1.
1. 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
DWD 805.05(23)(e)2.
2. 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
DWD 805.05(23)(e)3.
3. 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;
DWD 805.05(23)(f)
(f) 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:
DWD 805.05(23)(f)1.
1. Costs incurred because of losses not covered under nominal deductible insurance coverage provided in keeping with sound business practice are allowable; and
DWD 805.05(23)(f)2.
2. Minor losses not covered by insurance, such as spoilage, breakage, and disappearance of supplies, which occur in the ordinary course of operations, are allowable.
DWD 805.05(24)
(24) Interest. 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:
DWD 805.05(24)(b)
(b) Major reconstruction and remodeling of existing buildings completed on or after July 1, 1982.
DWD 805.05(24)(c)
(c) 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.
DWD 805.05(25)
(25) Investment management costs. Costs of investment counsel and staff and similar expenses incurred solely to enhance income from investments are unallowable.
DWD 805.05(26)
(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.
DWD 805.05(27)
(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.
DWD 805.05(28)
(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).
DWD 805.05(29)
(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.
DWD 805.05(30)
(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.
DWD 805.05(31)
(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:
DWD 805.05(31)(a)3.
3. The cost of the membership is reasonably related to the value of the services or benefits received; and
DWD 805.05(31)(a)4.
4. The expenditure is not for membership in an organization which devotes a substantial part of its activities to lobbying.
DWD 805.05(31)(b)
(b) Costs of the grantee's subscriptions to civic, business, professional, and technical periodicals are allowable, when related to grant activities.
DWD 805.05(31)(c)
(c) 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.
DWD 805.05(32)
(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.
DWD 805.05(33)
(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.
DWD 805.05(34)
(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.
DWD 805.05(35)
(35) Proposal costs. Costs incurred in preparing proposals for potential JTPA grant agreements are not allowable.
DWD 805.05(36)
(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.
DWD 805.05(37)(a)(a) Subject to the limitations described in
pars. (b) through
(d), 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.
DWD 805.05(37)(b)
(b) 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.
DWD 805.05(37)(c)
(c) 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
DWD 805.05(37)(c)2.
2. Organizations under common control through common officers, directors, or members; and
DWD 805.05(37)(c)3.
3. 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.
DWD 805.05(37)(d)
(d) 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:
DWD 805.05(37)(d)1.
1. 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;
DWD 805.05(37)(d)2.
2. Title to the property passes to the grantee at some time during or after the lease period;
DWD 805.05(37)(d)3.
3. 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.
DWD 805.05(37)(e)
(e) 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.
DWD 805.05(38)
(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.
DWD 805.05(39)
(39) Staff training and education. The cost of training, customarily provided for employee development, which directly or indirectly benefits grant programs, is allowable.
DWD 805.05(40)
(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.
DWD 805.05(41)
(41) Taxes. In general, taxes or payments in lieu of taxes which the organization is required to pay are allowable, except for:
DWD 805.05(41)(b)
(b) Special assessments on land which represent capital improvements,
DWD 805.05(42)
(42) Termination costs. Termination of grants generally give rise to the incurrence of costs, or the need for special treatment of costs, which would not have arisen had the grant not been terminated. Cost principles covering these items are set forth below. They are to be used in conjunction with the other provisions of this chapter in termination situations, depending on availability of funds.
DWD 805.05(42)(a)
(a) Common items. The cost of items reasonably usable in the grantee's other work are unallowable unless the grantee submits evidence that it would not retain such items at cost without sustaining a loss. In deciding whether such items are reasonably usable on other work of the grantee, the grantor should consider the grantee's plans and orders for current and scheduled activity. Contemporaneous purchases of common items by the grantee shall be regarded as evidence that such items are reasonably usable on the grantee's other work. Any acceptance of common items as allocable to the terminated portion of the grant shall be limited to the extent that the quantities of such items on hand, in transit, and on order are in excess of the reasonable quantitative requirements of other work.
DWD 805.05(42)(b)
(b) Costs continuing after termination. If in a particular case, despite all reasonable efforts by the grantee, certain costs cannot be discontinued immediately after the effective date of termination, such costs are generally allowable, but only up to the amount of the grant. However, any such costs continuing after termination due to the negligent or willful failure of the grantee to discontinue such costs shall be unallowable.
DWD 805.05(42)(c)
(c) Loss of useful value. Loss of useful value of special tooling, machinery and equipment which was not charged to the grant as a capital expenditure is generally allowable if:
DWD 805.05(42)(c)1.
1. Such special tooling, machinery, or equipment is not reasonably capable of use in the other work of the grantee.
DWD 805.05(42)(c)2.
2. The interest of the division is protected by transfer of title or by other means deemed appropriate by the grantor.
DWD 805.05(42)(d)
(d) Rental costs. Rental costs under unexpired leases are generally allowable where clearly shown to have been reasonably necessary for the performance of the terminated grant less the residual value of such leases, if
DWD 805.05(42)(d)1.
1. The amount of such rental claimed does not exceed the reasonable use value of the property leased for the period of the grant and such further period as may be reasonable, and
DWD 805.05(42)(d)2.
2. The grantee makes all reasonable efforts to terminate, assign, settle, or otherwise reduce the cost of such lease. There also may be included the cost of alterations of such leased property, provided such alterations were necessary for the performance of the grant, and of reasonable restoration required by the provisions of the lease.
DWD 805.05(42)(e)
(e) Settlement expenses. Settlement expenses including the following are generally allowable:
DWD 805.05(42)(e)1.
1. Accounting, legal, clerical, and similar costs reasonably necessary for:
DWD 805.05(42)(e)1.a.
a. The preparation and presentation to the grantor of settlement claims and supporting data with respect to the terminated portion of the grant, unless the termination is for default.
DWD 805.05(42)(e)2.
2. Reasonable costs for the storage, transportation, protection, and disposition of property provided by the division or acquired or produced for the grant; except when grantees are reimbursed for disposals at a predetermined amount.
DWD 805.05(43)
(43) Transportation costs. Transportation costs including freight, express, cartage, and postage charges relating either to goods purchased in process, or delivered are allowable.
DWD 805.05(44)(a)(a) Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the grantee. Travel costs are allowable subject to
pars. (b) through
(d) when they are directly attributable to specific work under a grant.
DWD 805.05(44)(b)
(b) Such costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the 2, provided the method used results in charges consistent with those normally allowed by the grantee in its regular operations.
DWD 805.05(44)(c)
(c) The difference in cost between first-class air accommodations and less than first-class air accommodations is unallowable except when less than first-class air accommodations are not reasonably available.
DWD 805.05(44)(d)
(d) Notwithstanding the provision of
sub. (21), travel costs of officials covered by those paragraphs when specifically related to grant programs, are allowable.
DWD 805.05 History
History: Cr.
Register, July, 1986, No. 367, eff. 8-1-86.
