This is the third part of a web page that
provides guidance for local educational agencies (LEAs) about consolidating
administrative funds for eligible federal grant programs 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.
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
TEA Approval to
Consolidate Administrative Funds
Your LEA must request approval from TEA to
consolidate administrative funds each school year. You do this either by
indicating the specific NCLB programs that you will consolidate on Schedule
BS6001 of your NCLB Consolidated Federal Grant Application, or by indicating
that you will consolidate administrative funds on the appropriate schedule of
other NCLB grant applications.
As part of the application, your LEA will have
to complete a form that indicates the amount of administrative funds you
plan to consolidate from each funding source, as well
as the percentage of each funding source allotment that you plan to
consolidate. Your LEA should already have
all of the information needed to populate the form if you created a table like
the one shown in the example on Part II of this web page. You must keep and maintain this form, as well as any other
tables you create, so that they may be provided to your independent auditor or
to TEA monitors if your LEA is selected for a review.
The Consolidation of NCLB Administrative Funds for 2015–2016 form
is available online. Please note that your LEA must ensure that this form is
updated as necessary throughout the school year. For example, if your allocation
of funds for a specific eligible program increases because of carryover funds,
or if you need to increase your administrative costs (staying within any
statutory or regulatory maximum percentage), your form should reflect the
During the grant negotiation process for NCLB
grants, some LEAs may be required to submit the completed form to TEA. Please
note that TEA negotiators will review the form to ensure that the amounts of
consolidated administrative funds are within the maximum percentage, as applicable,
but cannot ensure that consolidated amounts for programs without a maximum
percentage are reasonable and necessary. That determination can only be made by
your LEA’s independent auditor or by a TEA monitor.
Once TEA approves your grant application and
issues your Notice of Grant Award (NOGA), you can assume that your request to
consolidate administrative funds is also approved. TEA will not issue a
separate approval. If your request is approved, the approval is valid only for
the school year for which your application is submitted and approved.
An LEA that does not consolidate administrative
funds in one school year may request approval to do so in subsequent years.
If your LEA has already submitted its
applications for NCLB grants and received its NOGAs, you can submit amendments
to indicate to TEA that your LEA would like to consolidate administrative
funds. You must submit the Consolidation of NCLB Administrative Funds form, and
are responsible for all necessary planning, budgeting, and documentation.
If your LEA consolidates administrative funds in
an administrative cost pool, you must use that pool to pay for administrative
costs for all programs that contribute to the pool. You may not use program (nonadministrative)
funds to pay for any administrative costs for the contributing programs.
LEAs that consolidate
administrative funds in an administrative cost pool are not required to keep
separate records, by individual program, to account for costs relating to the
administration of the programs included in the consolidation. However, for
auditing and monitoring purposes, LEAs that consolidate their administrative
funds in an administrative cost pool must maintain documentation that shows:
- The amount of
administrative funds from each program for each grant year that the LEA consolidated
for administrative activities.
- That the amount
consolidated from each program does not exceed any statutory or regulatory cap
on administrative funds.
- That funds were obligated
within the period of availability.
- The activities for which
the funds were used were allowable under any of the consolidated programs or
under Title IX, Part B,
Sec. 9201(b) of ESEA.
Your LEA can fulfill the
first two requirements listed above if you maintain a table like the one in the previous example as well as your Consolidation of NCLB Administrative Funds form.
To fulfill the third and
fourth requirements, your LEA must comply with basic accounting requirements
for availability of funds and allowability of costs. Please refer to the program guidelines for each
of the consolidated programs for more information.
Consolidating administrative funds does not
change how LEAs submit reimbursement requests to TEA for indirect costs.
guidelines in Texas require LEAs to use the current account code structure
defined in Module 1 of TEA’s Financial Accountability System Resource Guide
(FASRG). The account code structure defined in the FASRG also provides TEA
monitors, auditors, and investigators, as well as independent auditors, with
the documentation necessary for them to carry out their functions. LEAs are
also required to use the account code structure and identify expenditures by certain
categories so that they can submit financial data to the Public Education
Information Management System (PEIMS).
To allow LEAs to take
advantage of the accounting flexibility offered by consolidating administrative
funds, but still comply with state accounting guidelines, TEA has developed the accounting procedures described on Parts IV and V
of this web page. Following the procedures is not required, but TEA
encourages LEA business managers to try the procedures, particularly if
accounting issues are preventing their LEAs from consolidating their
administrative funds. Using the accounting procedures has the following
managers are not required to keep two different general ledgers to account for consolidated
administrative expenditures and other expenditures.
administrative expenditures from the administrative cost pool are documented in
the general ledger, so LEAs do not need to maintain “off the books” accounting
accounting software does not have to be modified. LEAs can choose to make
software changes to automate the recommended proportionality calculations, but
this enhancement is not required.
extra steps need to be taken by the LEA to calculate carryover amounts of
unspent consolidated administrative funds at the end of the grant period. Please
note that any unspent administrative funds that are carried over to the next
grant period become program (nonadministrative) funds.
LEAs that consolidate
their administrative funds have considerable discretion in how they allocate
administrative expenditures to the individual programs that are consolidated.
TEA recommends, but does not require, that LEAs allocate expenditures in
proportion to the amount each program contributes to the administrative cost pool. For example,
if Title I, Part A contributes 60 percent of the total administrative cost
pool, then the LEA allocates 60 percent of each administrative expenditure to
Title I, Part A.
As soon as your LEA has
determined the specific NCLB programs that you will consolidate, and the amount
from each program that you will place in the administrative cost pool, you
should also create a proportionality table. A proportionality table documents
how you will allocate actual expenditures to the appropriate funding source by
showing the calculation of the proportion each funding source contributed to
the total administrative cost pool. The following is an example of a
Consolidation of Administrative Funds
2015–2016 School Year
| || NCLB Funding Source|| Amount Contributed|
|A ||Title I, Part A—|
Improving Basic Programs
|$270,000||A ÷ E||64.13%|
| B||Title I, Part C—|
|$125,000||B ÷ E||29.69%|
| C||Title II, Part A—|
|$16,000||C ÷ E||3.80%|
| D||Title III, Part A—|
|$10,000||D ÷ E||2.38%|
| E||Total||$421,000|| ||100%|
This district will allocate 64.13 percent of
each administrative expenditure to Title I, Part A, 29.69 percent of each administrative
expenditure to Title I, Part C, 3.80 percent of each administrative expenditure
to Title II, Part A, and 2.38 percent of each administrative expenditure to
Title III, Part A.
The basis for the
accounting procedures is fund code 282. This fund code was initially approved
solely to identify expenditures from a Title I, Part A schoolwide program pool of funds. However, beginning with the
2015–2016 school year, LEAs are also allowed to use fund code 282 to identify expenditures
from an administrative cost pool.
The code makes it possible
for anyone who reviews an LEA’s general ledger, including auditors and
monitors, to see immediately which expenditures are for consolidated
administration and which are not.
This code is currently
defined in the FASRG as a state-designated fund code, but TEA expects to change
the definition at the earliest opportunity to indicate that the code may only
be used at the local level to and must only be used to identify expenditures
from a Title I, Part A schoolwide program pool of funds or expenditures from an
administrative cost pool. Your LEA should distinguish between the two types of
expenditures by using program intent code (PIC) 30 for all schoolwide program
expenditures, and using the appropriate PIC and a unique local option code for
expenditures from an administrative cost pool. TEA recommends that you use “CA”
as the unique local option code.
Please note that LEAs must
not use fund code 282 to report data
For more information about
the account code structure defined in the FASRG, please contact firstname.lastname@example.org.
For more information about PEIMS reporting, please contact
for An Actual Expenditure
The accounting procedures on
Parts IV and V of this web page describe how
your LEA may account for an actual expenditure from an administrative cost pool.
The procedures are based upon the proportionality methodology and use the
figures in the example proportionality table above. Each step is based upon a
Your LEA can develop and
use another methodology but you must be able to show auditors and monitors
documentation that explains the rationale for using the methodology and
verifies that you used the methodology consistently.
Please go to the fourth part of this web page for step-by-step
guidance about how to allocate expenditures from an administrative cost pool.
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.