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Grant Administration Requirements

Allowable and Unallowable Costs

Most costs necessary and reasonable for the proper and efficient administration of a grant project are allowable costs that may be proposed as budget items in an LSTA grant application. The following costs, however, are unallowable and may not be proposed as grant project costs:

• Administration fees
• Bad debts
• Construction
• Contingencies
• Contributions and donations
• Entertainment / Performances
• Fines and penalties
• Food
• Interest and other financial costs
• Staff salaries and benefits
• Under recovery of costs under grant agreements (excess costs for one grant application is not chargeable to another grant application)
• Gifts, models, sourvenirs

Travel and per diem expenses are allowable costs for project personnel only. A sub grantee must reimburse staff travel and per diem at the rate authorized by the State (See page 3, Budget Considerations).

DO NOT put your Federal LSTA funds into interest-bearing accounts, savings accounts or investment-type funds. If interest is earned on LSTA grant funds by the sub grantee, the amount of the interest must be refunded to the Arizona State Library, Archives and Public Records Agency, and subsequently returned to IMLS in Washington.

Sub grantees must not deviate from the approved budget and approved plan for carrying out the grant project as contained in the approved grant application unless prior approval is obtained from the LSTA Consultant, Library Development Division. Similarly, sub grantees must request prior approval of significant departures from approved project plans, including changes in the scope of the project, changes in project objectives, and changes in the project manager or other key project personnel. Both types of requests shall be made in writing to the State Grants Administrator, Laura Stone at this email.

All promotion materials, press releases, bibliographies, reports and other such publications resulting from a LSTA grant project must contain the following acknowledgment:

This project (program) was supported with funds granted by the Arizona State Library, Archives and Public Records Agency under the Library Services and Technology Act, which is administered by the Institute of Museum and Library Services.

If the grant project results in copyrightable material, the sub grantee or any subcontractor of the sub grantee is free to copyright the work. However, IMLS and the State Library reserve a royalty-free, exclusion and irrevocable license to reproduce, publish, or otherwise use and authorize others to use the work for government purposes.

Grant recipients will be required to submit a Final financial and performance report to the State Library within thirty days after the end of the project or no later than September 3, 2010 for FY 2009 competitive grants. Forms can be obtained on the State Library website at www.azlibrary.gov. Click on Library Development Division, LSTA and FY 2009 final report forms. If you do not have Internet access, you may contact the Grants Administrator at 602-926-3469 or 1-800-255-5841 and the forms will be sent to you. Failure to file the report or library statistics on time will make your library ineligible to apply for future LSTA grants.

Sub grantees must submit and maintain inventory records of all non-expendable personal property, defined as items having a useful life of more than one year and a unit acquisition cost of $5,000 or more. Reports of such property shall be made on a form supplied by the State Library and must be filed within 30 days after the end of the project year. Inventories of all such property may be conducted to verify the existence, current utilization, and continued need for the property. Disposition of such property shall be in accordance with the disposition requirements of the State Library.

All funds must be expended and/or obligated by the last day of the grant period (August 2, 2009). Should it not be possible to expend and/or obligate the funds prior to the end of the grant period, the State Library is to be notified at least 30 days in advance so arrangements can be made to return the funds to the State Library. If received by the State Library before the last month of the grant period, these funds can be reprogrammed into other Arizona projects; otherwise, reverted funds must be sent back to Washington.

Taken from OMB Circular A-110 ___.53.

(b) Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency. The only exceptions are the following.

1. If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved and final action taken.
2. Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition.
3. When records are transferred to or maintained by the Federal awarding agency, the 3-year retention requirement is not applicable to the recipient.
4. Indirect cost rate proposals, cost allocations plans, etc. as specified in paragraph___.53(g).

All libraries that have received a total of $300,000 or more from all federal grants in the federal fiscal year (October 1 – September 30), must submit an audit as required under the Single Audit Act of 1984. Audits are required as follows under OMB Circular No. A-133 Subpart B— §___ .200 audit requirements:

1. Audit required. Non-Federal entities that expend $300,000 ($500,000 for fiscal years ending after December 31, 2003) or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Guidance on determining Federal awards expended provided in §___.205.
2. Single audit. Non-Federal entities that expend $300,000 ($500,000 for fiscal years ending after December 31, 2003)or more in a year in Federal awards shall have a single audit conducted in accordance with §___ .500 except when they elect to have a program-specific audit conducted in accordance with paragraph (c) of this section.
3. Program-specific audit election. When an auditee expends Federal awards under only one Federal program (excluding R&D) and the Federal program’s laws, regulation, or grant agreements do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in accordance with §___ .235. A program-specific audit may not be elect for R&D unless all of the Federal awards expended were received from the same Federal agency, or the same Federal agency and the same pass-through entity, and that Federal agency, or pass-through entity in the case of a sub recipient, approves in advance a program-specific audit.
4. Exemption when Federal awards expended are less than $300,000 ($500,000 for fiscal years ending after December 31, 2003). Non-Federal entities that expend less than $300,000 ($500,000 for fiscal years ending after December 31, 2003) a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in § ___.215(a), but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and General Accounting Office (GAO).

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