Local educational agencies (LEAs) are allowed to
consolidate federal grant funds from several federal grant programs in order to
pay for the costs associated with the administration of those programs. The only
federal grant programs eligible for this consolidation are those awarded under
the No Child Left Behind Act of 2001 (NCLB). The authorizing statute is the Elementary and Secondary Education Act
of 1965 (ESEA), Title IX, Part B, Sec. 9201 and Sec. 9203.
This web page, which is divided into five parts,
provides details about how LEAs can take advantage of the flexibility offered
by consolidating their administrative funds and administering their NCLB
programs as a whole. Providing this guidance is part of TEA’s federal flexibility initiative. The purpose of the initiative is to provide increased
flexibility to subrecipients of federal education grants.
The consolidation of
administrative funds has some similarities to consolidating funds in a Title I,
Part A schoolwide program. LEAs can take advantage of the flexibility offered
by both programs at the same time. More information about Title I, Part A schoolwide programs is available
Please note that all of
the examples on this page are provided by TEA for informational purposes only.
You should not interpret the items or amounts as anything other than sample
LEAs must receive approval from TEA to
consolidate their administrative funds each school year. The annual approval process is described in the
third part of this web page.
Flexibility Offered by Consolidating
administrative funds provides
flexibility to LEAs by allowing them to charge administrative costs to an administrative cost pool instead of assigning
specific costs to specific programs. As long as the cost is an allowable
administrative activity under any one of the programs that have been
consolidated, it may be charged to the administrative cost pool.
costs, which may include both direct and indirect administrative costs, include
- Salaries and wages of
staff involved in the administration
of any of the consolidated programs (such as federal program coordinators and federal
- Planning for the use of federal
program funds (such as costs associated with federal program budget meetings).
- Monitoring and
evaluation of federal program activities (such as salaries and wages of federal
program monitors and internal program auditors, and costs associated with
reviewing program goals, objectives, and performance).
- Indirect costs,
calculated by using the LEA’s indirect cost rate, related to processing federal
program funds (such as costs associated with accounting, human resources, and
Costs that are not administrative and are therefore not allowable include, in general, salaries and
wages of staff that are not involved in the administration of any of the
consolidated programs (such as teachers, substitute teachers, and paraprofessionals).
Advantages to Consolidating Administrative Funds
The administrative cost pool can also be used for
purposes other than administering the programs that contributed to the pool,
- Coordination of programs whose funds are consolidated with other federal
and non-federal programs.
- Establishment and operation of peer-review mechanisms under ESEA.
- Dissemination of information regarding model programs and practices for
- Technical assistance under programs whose funds may be consolidated.
- District-level activities designed to carry out Title IX of ESEA.
- Training personnel
engaged in audit and other monitoring activities.
- Implementation of the
Cooperative Audit Resolution and Oversight Initiative (CAROI) of the US
Department of Education.
In addition, the administrative
cost pool may be treated as one cost objective. This means that for employees
who work exclusively on administrative activities for the programs that
contribute to the administrative cost pool, LEAs are not required to maintain
personnel activity reports. A semi-annual certification will be sufficient. If
all of the programs that contribute to the administrative cost pool are covered
by the state’s Ed Flex administrative waiver, then a semi-annual certification
is not required.
Please note, however,
that clarification of time and effort documentation requirements in the new Education Department General Administrative
Regulations (EDGAR) is still pending. TEA recommends that LEAs maintain
semi-annual certifications, or their equivalents, for employees that work on a
single cost objective, and identify the administrative cost pool as the single cost
The NCLB programs listed in the table below may
be included in the consolidation of administrative funds. The table also shows
the maximum percentage of each LEA’s total allotment that may be used for
administrative costs. For those programs without a maximum percentage, LEAs can
use a percentage that is reasonable and necessary for the proper and efficient
administration of the program.
Eligible NCLB Programs
|NCLB Programs||Maximum Percentage|
|Title I, 1003(a)—Priority and Focus Schools||Reasonable and necessary|
|Title I, 1003(g)—School Improvement Grants (Texas Title I Priority Schools)||5%|
|Title I, Part A—Improving Basic Programs||Reasonable and necessary|
|Title I, Part C—Migrant
Education||Reasonable and necessary|
|Title I, Part D—Neglected and
Delinquent Children||Reasonable and necessary|
|Title II, Part A—Teacher Effectiveness||Reasonable and necessary|
|Title II, Part D—Enhancing
Education through Technology||3%|
(no allocations; for REAP
|Title III, Part A—Limited
|Title III, Part A—Immigrant||Reasonable and necessary|
|Title IV, Part A, Subpart 1—Safe
and Drug-Free Schools and Communities||2%|
(no allocations; for REAP
|Title IV, Part B—21st
Century Community Learning Centers||5%|
|Title V, Part A—Innovative
Programs||Reasonable and necessary|
(no allocations; for REAP
|Title VI, Part B—Rural and Low-Income School
Program||Variable (see program guidelines)|
Please note that if your LEA transfers Title VI,
Part B funds to another fund under the Rural Education Achievement Program (REAP)
option, any applicable maximum percentage remains in place. For example, if
your LEA transfers Title VI funds to Title III, Part A—LEP, the 2 percent
maximum percentage for Title III, Part A—LEP applies to the combined Title VI
and Title III, Part A—LEP funds.
State and local administrative funds may not be consolidated with federal
administrative funds. However, if LEAs use state and local funds only for
activities authorized under section Title
IX, Part B, Sec. 9201(b) of ESEA, they may combine state and local funds with federal
consolidated administrative funds. Do not consolidate any state special
allotments in an administrative cost pool. Special allotments include special
education state funds, the bilingual education allotment, the career and
technology education allotment, and the state compensatory education allotment.
If you have questions about state funds, please contact the TEA division of
Financial Compliance at firstname.lastname@example.org.
An administrative cost pool that includes state and local administrative
funds is still considered one cost objective.
TEA is required to uphold
its administrative responsibilities by ensuring that federal grant subrecipients
comply with applicable statutes and regulations, including the rules that apply
to consolidation of administrative funds. If your LEA is selected for a review
of its administration of federal grant awards, your LEA must provide TEA
monitors with adequate documentation to demonstrate that it complies with all
applicable requirements. This web page includes, whenever possible, guidance
about the documentation that is required, Please note, however, that the
guidance is not intended to limit the
documentation maintained by your LEA. As a best practice, your LEA should
maintain all documentation that it believes is necessary to demonstrate
compliance with applicable rules.
Your LEA must also
maintain the required documentation for its own independent auditor.
Please go to the second part of this web page for information about
budgeting and specific documentation required for consolidating administrative
For more information about
the consolidation of administrative funds, please contact the TEA Help Desk and enter “consolidation of
administrative funds” in the subject field.
For more information about
the federal flexibility initiative, please contact Terry Reyes in the Office
for Grants and Federal Fiscal Compliance at email@example.com.