Purchasing & Expenditures

The VR agency must provide for identification of all Federal awards received and expended. The identification must allow for accurate, current, and complete disclosure of the financial activities, along with records that identify adequately the source and application of funds for program activities. When procuring property and services, the VR agency must follow the same requirements applied to non-Federal funds within the state. All costs under the Federal award must comply with the Cost Principles under Uniform Guidance.

Real Property Status Report

With the issuance of the Federal fiscal year (FFY) 2024 State Vocational Rehabilitation Services (VR) grant awards, the Rehabilitation Services Administration (RSA) added the following three reports, required under 2 C.F.R. § 200.330, to the Grant Award Notification (GAN) attachment titled Performance and Financial Reports (RSA-9): 
 

1. Real Property Status Report (Cover Page) (SF_429)
2. Real Property Status Report Attachment A (General Reporting) (SF-429A); and
3. Real Property Status Report Attachment C (Disposition or Encumbrance Request) (SF-429C)

The GAN attachment instructs awardees to use and submit the Real Property Status Report forms, beginning with the FFY 2024 grant awards, if VR program funds, program income, or non-Federal match funds were used to acquire, construct, or improve real property, thereby, giving the U.S. Department of Education a monetary Federal interest in that property.

For awardees that receive a carryover year, the first Real Property Status Reports will be submitted with the final FFY 2024 Vocational Rehabilitation Financial Report (RSA-17), which is due once the agency liquidates all financial obligations incurred under the Federal award, but no later than 120 calendar days after the end date of the period of performance (January 30, 2026) as specified in the terms and conditions of the Federal award.

Citation: 2 C.F.R. § 200.330 - Reporting on real property.

The Federal agency or pass-through entity must require the recipient or subrecipient to submit reports on the status of real property in which the Federal Government retains an interest. Such reports must be submitted at least annually. In instances where the Federal Government’s interest in the real property extends for 15 years or more, the Federal agency or pass-through entity may require the recipient or subrecipient to report at various multiyear frequencies. Reports submitted at multi-year frequencies may not exceed a five-year reporting period. The Federal agency must only require OMBapproved government-wide data elements on recipient real property reports.

Resources

• RSA-9 Performance and Financial Reports

Contracts

Implementing contracts is important because it ensures that all parties involved are on the same page. In more detail, contracts help outline clear goals, evaluation criteria, and additional terms and conditions for the services that will be provided.

This section addresses the requirements related to contracting for purchased services. Uniform Guidance requires that States follow the same policies and procedures it uses for procurements with non-Federal funds 2 CFR § 200.317. Contract policies are necessary to ensure that contract language results in the VR agency receiving allowable services, can appropriately assign the obligation to a grant award, can ensure expenditures align with original obligations, and receive the necessary data that it must collect and report with the frequency required by the terms and conditions of the VR award 22 CFR § 200.302(b)(7), and 234 CFR § 361.51.

In addition, VR agencies are responsible for the oversight of the Federal award. The recipient must monitor its activities under Federal awards to ensure they are compliant with all requirements and meeting performance expectations: 2 CFR § 200.329(a).

Through the use of contracts, VR agencies must relate financial data and accomplishments to performance goals and objectives of the Federal award, consistent with the reporting of data on the SF-425, RSA-17, and RSA-911 reports 22 CFR § 200.329(b).

Resources

• Contracting Guide - Coming soon

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Subgranting/Subawards

Subgranting describes the process in which the original grantee awards all or part of the grant to another individual or entity.

Subgranting/Subawards are only permissible in the Independent Living Services for Older Individuals who are Blind program because that program is specifically authorized by statute to make grants to public and nonprofit private agencies or organizations. The VR program MAY NOT subaward, consistent with the EDGAR requirements in 34 C.F.R. § 76.50(b) that indicate the authorizing statute determines the extent to which a State may make subawards. Since the Rehabilitation Act is silent on the use of subawards in the VR program, they are not permitted.

Resources

• GAN Attachment-Prohibition Against Subgranting

Rate-Settling

VR agencies are required to develop and maintain written policies governing rates of payment for all purchased services. These policies outline the process the VR agency completes to ensure the rates of payment for VR services are allowable, reasonable and allocable to the award.

Resources

• Rate Setting Methodology Guide - Coming soon
• 34 CFR § 361.50 This section covers the written policies governing the provision of services for individuals with disabilities, including rates of payment for ALL purchased VR services.
• 2 CFR § 200.303 This is Uniform Grant Guidance and addresses internal controls.
• 2CFR § 200.403 This is Uniform Grant Guidance and addresses factors affecting the allowability of costs.
• 2 CFR § 200.404 This is Uniform Grant Guidance around reasonable rates which the VR agency should consider and incorporate when finalizing written policies governing rates of payment for VR services.
• 2 CFR § 200.405 This is Uniform Grant Guidance and addresses the allocability of costs.

Establishment Projects

VR funds may be used for the establishment, development, or improvement of a public or non-profit CRP to provide VR services to applicants and eligible individuals of the VR program that promote integration into the community and competitive integrated employment, including supported employment and customized employment (Section 103(b)(2) of the Rehabilitation Act and 34 CFR § 361.49(a)(1)).

The VR agency must evaluate the needs of VR participants in the Comprehensive Statewide Needs Assessment (CSNA) 34 CFR § 361.29 to determine whether the VR agency can establish, develop, or improve a public or non-profit CRP 34 CFR § 361.5(c)(16) and (17) and 34 CFR § 361.49(a)(1). The need to establish, develop, or improve a CRP, along with goals and priorities and strategies to address the need, must be reported in the VR services portion of the Unified or Combined State Plan. Prior to implementation of establishment or construction, VR agencies must have implementing policies and procedures.

Due to the complexity of requirements for establishment and construction, such as prior approval requirements and the requirement for the building (if applicable) to be in use for the established purpose for 20 years (Section 101(a)(17)(B)), VR agencies should strongly consider contacting RSA prior to undertaking an establishment or construction project.

Resources

• Establishment Case Scenarios - Coming soon
• Establishment Authority Checklist - Coming soon

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VR Funds and Marketing Outreach

Section 111(a)(1) of the Rehabilitation Act makes clear that State Vocational Rehabilitation Services (VR) funds are allocated to each State to pay for costs incurred under the VR program. VR implementing regulations at 34 C.F.R. § 361.3 require State VR agencies to use VR program funds solely for the provision of VR services and the administration of the VR program. VR services are those provided to individuals with disabilities (Section 103(a) of the Rehabilitation Act and 34 C.F.R. § 361.48) and to groups of individuals (Section 103(b) of the Rehabilitation Act and 34 C.F.R. § 361.49). Section 103(b)(5) of the Rehabilitation Act and 34 C.F.R. § 361.49(a)(4) permit VR agencies to provide technical assistance (TA) services to businesses who are seeking to employ individuals with disabilities. Administrative costs, for purposes of the VR program, are defined at Section 7(1) of the Rehabilitation Act and 34 C.F.R. § 361.5(c)(2). Administrative costs include costs incurred when providing information about the VR program to the public or providing technical assistance and support services to other State agencies, private non-profit organizations, and businesses and industries (except for theTA to businesses described above as services to groups, which are VR services and not administrative costs) (Section 7(1)(C) and (D) of the Rehabilitation Act and 34 C.F.R. § 361.5(c)(2)(iii) and (iv)). When providing information to the public about the VR program or TA (regardless of whether the TA provided is a VR service or an administrative cost) and support services to other State agencies, private non-profit organizations, or businesses, State VR agencies may use VR grant funds, non-Federal funds for match purposes, or program income to pay for these expenditures under the VR program.

It is important to remember that when brochures and other information include or benefit multiple programs, the costs must be allocated to the programs accordingly. When issuing statements, press releases, requests for proposals, bid solicitations and other documents describing projects or programs funded in whole or in part with Federal money, U.S. Department of Education grantees shall clearly state the –

• Percentage of the total costs of the program or project which will be financed with Federal money;
• Dollar amount of Federal funds for the project or program; and
• Percentage and dollar amount of the total costs of the project or program that will be financed by non-governmental sources.

In this context, the term “other documents” means any document not covered by those specified (i.e., statements, press releases, requests for proposals, and bid solicitations) that describes programs or projects that are funded in whole or in part with Federal funds. This would include brochures disseminated by the VR agencies that describe the various services offered, brochures describing eligibility criteria for the VR program, or any other brochures, pamphlets, or documents that provide information about the VR program to VR applicants and consumers and the public, or TA to businesses. All such documents must satisfy the requirements set forth in Attachment 11 to the VR GAN regardless of whether they are disseminated in print or video format or electronically (including websites, webinars, and other electronic formats).

Generally speaking, Uniform Guidance at 2 C.F.R. § 200.467 indicates that costs of selling and marketing any products or services of the recipient are unallowable unless they are allowed under § 200.421 and are necessary to meet the requirements of the Federal award. The provision of information about the VR program, technical assistance, and support services is separate and distinct from certain advertising and public relations costs identified in Uniform Guidance and governed by 2 C.F.R. § 200.421. The provision of information about the VR program is focused on the provision of factual information about the VR program, such as the services it provides and the individuals it serves.

The provision of TA and support services involves providing consultative services – using the VR agency’s expertise in working with individuals with disabilities – to assist other entities in working with individuals with disabilities. With respect to outreach and advertising, Uniform guidance indicates allowable advertising costs include program outreach (e.g.,, recruiting project participants) and other specific purposes necessary to meet the requirements of the Federal award (2 C.F.R. § 200.421(b)(4)). Public relations, on the other hand, are those activities dedicated to maintaining relations with the community (2 C.F.R. § 200.421(c)). The Uniform Guidance at 2 C.F.R. § 200.421(e)(3) makes clear that the costs of promotional items are not allowable. Promotional items would include pens, notepads, cups, and other items with the VR agency’s logo that the agency uses to distribute to the public or businesses as a means of doing community outreach and ensuring good community relations. As such, the costs to produce these promotional items are not allowable under the VR program and, therefore, may not be paid for with VR grant funds, non-Federal funds for match purposes, or program income.

The information provided above is consistent with the Department’s interpretation of the Uniform Guidance requirements at 2 C.F.R. § 200.421(e)(3) and is applicable to all of RSA’s grant awards.

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Staff Time and Effort Reporting

For staff who work on multiple cost objectives, personnel costs must be allocated proportionally between all the different programs administered by the VR agency, and other programs staff work on within the designated State agency (DSA) even if outside the designated Staff unit (DSU) or included in the indirect cost rate or cost plan.

In the past, guidance referenced that personnel cost activities required certified personnel reports for individuals working 100% on one activity. Sometimes, agencies referred to these as PARS (personal activity reports). While PARS are not specifically required, you are required to ensure that your time and effort record-keeping meets the standards cited in regulation. However, 2 CFR 200.430 (g)(8) states that the Federal Government may require PARS if you do not meet the standards described in this section.

It is important to have a policy/procedure that outlines the agency’s practices for reporting time and effort. This policy/procedure should include internal controls to ensure the process is evaluated, and it should outline how and when training will be conducted with all employees to ensure the proper allocation of staff time.

Use of Grant Funds for Conferences and Meetings

The U.S. Department of Education has provided guidance for grantees when considering the use of Federal award funds for conferences and meetings. There are several factors to take into consideration. The following resources also address the use of Federal award funds to pay for food.

Resources

• FAQ-Using Federal Grant (Discretionary and Formula) Funds to Host a Meeting or Conference

Build America, Buy America Act (BABAA)

BABAA was enacted as part of the overall Infrastructure Investment and Jobs Act in November 2021. The purpose of the BABAA is to create demand for domestically produced goods, helping to sustain and grow domestic manufacturing and the millions of jobs it supports throughout product supply chains. Broadly, BABAA requires that Federal infrastructure programs must use materials produced in the United States. Effective October 23, 2023, the Office of Management and Budget revised the OMB Guidance for Grants and Agreements. The revisions are limited in scope to support the implementation of the BABAA provisions of the Infrastructure Investment and Jobs Act and to clarify existing provisions related to domestic preferences. These revisions provide further guidance on implementing the statutory requirements, including a new part 184 and revising 2 CFR 200.322. Changes are summarized on the Department of Education website under News.

The following specific goods, when acquired under an infrastructure program and being used for construction, major remodeling, or broadband infrastructure, are covered:

• Iron and steel used in an infrastructure project in the United States;
• All manufactured products used in an infrastructure project in the United States; and
• All construction materials used in an infrastructure project that are manufactured in the United States.

Goods that do not fit the definition of manufactured products or construction materials are not subject to the BABAA domestic sourcing requirements.

These requirements do apply to the VR program as explained in the March 19, 2024 RSA updated guidance below. The Department of Education has developed training and information that can help grantees implement these requirements.

Resources

• March 19, 2024 RSA Updated Guidance on BABAA
• BABAA Example Contract Language - Coming soon
• U.S. Department of Education BABAA Information
• FAQs about the Build America Buy America Act (PDF, 221KB)
• MIAO - Made in America Waiver Website
• GSA - Made in America Website
• The Department of Education's List of Infrastructure Programs (PDF, 54.7KB).

Training

• Build America, Buy America Act (BABAA) (30-minute course)

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