IL-NET TA

Giving credit where credit is due

Most grants — including those your center receives from Health and Human Services, are required to include that information in any press releases or other ACL supported publications and forums describing projects or programs funded in whole or in part with ACL funding. This means those carefully developed PSAs to urge people to get vaccines, or the flyers and other materials paid for through the CARES Act or Part C or the CDC Vaccine funds must have language that follows what your grant award says. (Yes, you should read that Grant Award carefully. It does require some things of you.)

Here is the sample language from a grant award from HHS.

If the HHS Grant or Cooperative Agreement is NOT funded with other non-governmental sources: “This (project/publication/program/website, etc.) (is/was) supported by the Administration for Community Living (ACL), US Department of Health and Human Services (HHS) as part of a financial assistance award totaling $XX with 100% funding by ACL/HHS. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by ACL/HHS or the U.S. Government.

If the HHS Grant or Cooperative Agreement IS partially funded with other nongovernmental sources: “This (project/publication/program/website, etc.) (is/was) supported by the Administration for Community Living (ACL), U.S. Department of Health and Human Services (HHS) as part of a financial assistance award totaling $XX with XX percentage funded by non-government sources(s). The contents are those of the author(s) and do not necessarily represent the official views of, not an endorsement, by ACL/HHS, or the U.S. Government.

Can I use grant funding to establish incentive programs? New FAQ released.

Dark-haired, bearded man in denim shirt and seated in a wheelchair, sits at the kitchen table with a bowl of food and looks at reports.

Recently our key funder, ACL, released information on using grant funds to purchase incentive items as part of the program of a center. While this FAQ answers the pressing question of incentives related to CDC and ACL funds and COVID-19, the guidance could be considered in other situations as well. You are expected to have a well-designed incentive program, so a written policy and procedure should back up your practice. Some key points:

Grantees may use federal funding to establish one or more incentive programs.
Incentives should be used in “limited circumstances” to meet program goals.
Gift cards, gift items, giveaways and prizes may be used. Cash gifts are not allowed with funding under the CARES Act and from the CDC Vaccine funding
When using gift cards you must avoid appearing to endorse, or that HHS or ACL endorses a specific company.
Your records must clearly show how each gift card is distributed, verifying that they were used for the purpose of the program and weren’t for example, recycled into petty cash or used for staff or board incentives not related to your incentive program.
Your program should address potential ethical considerations, including potential conflicts of interest by board and staff.
You must be able to show that the expense charged to your federal grant is reasonable and necessary, and if it supports goals in more than one grant, is properly allocated across your funding sources.

ACL recommends that grantees consider the following seven elements in designing an incentive program:

Proposed Incentive: i.e., what incentive will be provided?
Justification: what is the purpose for the incentive and what is the specific reason for selecting this incentive? What evidence indicates that an incentive is needed, and what evidence suggests that the selected incentive will be effective at achieving the desired result?
Anticipated gains: explain how providing such an incentive will defray societal costs or have a positive return on investment, for example by increasing overall participation. Additionally, describe potential unintended negative consequences and how those are outweighed by the benefits.
Defined amount: cost per person and total allocated funding for the recipient incentives.
Qualifications for issuance: what makes a person eligible for the incentive? Does it take into consideration issues related to equity in your community?
Method of issuance and tracking: how will the incentive be delivered? Does the proposed plan and implementation align with any relevant policies and procedures governing your organization (e.g., procurement, ethics, etc.)? How will the budget and supply be tracked? Can the grantee assure usage will only be for allowable expenses?
Method of evaluation: how will the incentive plan be evaluated for effectiveness?

One last thought. While you cannot guarantee how an individual will spend a gift card incentive, you can communicate your expectations that it will assist them in meeting the unique needs presented by the pandemic.

How can your board find a new Executive Director with a disability?

The rules for consumer control indicate that 51% of your managers must have a disability. In smaller centers where there is only one manager — the Executive Director — the board must hire a person with a disability. Even if there are two managers, 51% of two is two, and both must have a disability. As a result, most centers are seeking a person with a disability to fill the ED role.

Clear board with the words AFFIRMATIVE ACTION in black. A hand with a marker is underlining it in red.

There was a time when this was extremely awkward, because the Equal Employment Opportunity Commission (EECO) was clear that you could not ask interviewees about having a disability for fear that you might discriminate against them because of the disability. We have quite the opposite reason for asking — and now that reason is validated by guidance related to pre-employment questions about disability. This new guidance says that if you are asking about whether the person has a disability for the purposes of your affirmative action program, you may invite applicants to voluntarily self-identfy if:

The CIL is undertaking affirmative action because of a federal, state, or local law. This is the case for centers, because the Rehabilitation Act as amended requires consumer control, which is defined including having 51% of managers and 51% of other staff be people with disabilities.
Or the CIL is voluntarily using the information to benefit individuals with disabilities.
Employers may invite voluntary self-identification only if you are using the information to benefit individuals with disabilities.
You must state clearly on any written questionnaire, application or in your employment advertising, or state clearly orally, that the information requested is used solely in connection with affirmative action obligations.
You must state clearly that providing this information is voluntary, will be kept confidential as required by the ADA, and that if they refuse to answer they will not be subject to any adverse treatment. I suggest that you add that you may in some cases be choosing a person with a disability over a non-disabled applicant.

May I add a personal note? I didn’t know anything about Independent Living when I wrote a grant back in 1979. Fortunately Lex Frieden at ILRU provided all of the ten newly funded centers with training, and veterans Marca Bristo and Max Starkloff, who directed two of the other centers, knew what IL was all about. Due to their influence I looked around and told the board, “we really need a director with a visible disability”, and I am pleased that they have kept true to that goal in the hiring of the next few directors as well. (My disability isn’t always evident.) Even when a center is big enough that other managers can meet the 51% requirement, I feel that the message to the community is unmistakable when the leader has a visible disability, or has an invisible disability and is willing to talk about it and to show clear consumer control at the local level.

Is my CIL required to report to the SILC? Why? How?

Every state is required to develop and implement a State Plan for Independent Living (SPIL), developed jointly by all the Centers for Independent Living (CILs) in the state (signed by a majority of them) and the Council. Your Statewide Independent Living Council (SILC) is then responsible for monitoring and evaluating the progress your state is making regarding its state plan. This means that your SILC somehow tracks the progress being made on the specific plan goals. If the goals are related to service provision, the reporting will have to come from the CILs because the SILC is not allowed to provide direct services.

Young dark-haired man in a suit working with calculator and computer. The back of a wheelchair is visible at the edge of the photo.

As far as a center not reporting to the SILC on the SPIL goals and objectives – there isn’t a requirement that they do so on the SILC’s timeline, but they “gave their word”, so to speak, when they agreed to the SPIL. If the SPIL clearly identified those outcomes by CILs, they should be prepared to report. If you haven’t already, take the time at the next revision or development of a plan to be very clear on desired outcomes and how they will be measured, so that the centers are clear on what reporting is expected from the CILs.

Let me repeat this point, though – CILs are not required to report according to the SILC’s requirements, and there is no compliance process to force it. It is voluntary so you need to build on the agreement to the SPIL and negotiate if necessary. A lot of states find a way to have a single report with the Designated State Entity (DSE) shared by the SILC to reduce duplication.

That said, let me clarify that the SPIL applies to both Part B and Part C (Independent Living Program, ILP and CIL) funds, and reporting on the SPIL outcomes should include the full network for IL, including CIL services funded by both Part B and Part C. Both are federal funds, and reporting applies to both. Part B funds are not state funds, as some have mistakenly stated, but pass through the Designated State Entity to the CILs as directed in the SPIL. Part C funds are direct grants to CILs, but are still part of the statewide plan. In the past some SILCs have depended on the information submitted in the Program Performance Report (PPR – formerly the 704 report) which CILs are required to submit to the SILC as well as to ACL, but this year that report has been delayed by the Administration for Community Living (ACL), leaving the SILCs to request the data from a draft document since the official upload directions have not yet come out.

Let me clarify a related point. It is NOT the role of the SILC to monitor the Center itself. The DSE may monitor CILs receiving state or ILS Part B funds, as they are subgrantees of the DSE. The SILC, however, does not have compliance responsibilities with the centers. Sometimes the SILC is pressured by the DSE to monitor the Centers. I have even seen corrective action plans for a couple of SILCs where the DSE cited the SILC’s failure to monitor the CILs as a deficiency. Remember that each center is required to provide the SILC with the PPR and with progress on the SPIL. Any more can be negotiated by the IL network but is not required in federal regulations.

What can the DSE keep in administrative fees for distributing our Part B, Independent Living Services grants?

The regulations are clear on this. 45 CFR 1329.12 Role of the designated State entity states:

(a) A DSE that applies for and receives assistance must:

(1) Receive, account for, and disburse funds received by the State under Part B and Part C in a State under section 723 of the Act based on the State plan;

(2) Provide administrative support services for a program under Part B, as directed by the approved State plan, and for CILs under Part C when administered by the State under section 723 of the Act, 29 U.S.C. 796f-2;

(3) Keep such records and afford such access to such records as the Administrator finds to be necessary with respect to the programs;

(4) Submit such additional information or provide such assurances as the Administrator may require with respect to the programs; and

(5) Retain not more than 5 percent of the funds received by the State for any fiscal year under Part B, for the performance of the services outlined in paragraphs (a)(1) through (4) of this section. For purposes of these regulations, the 5 percent cap on funds for administrative expenses applies only to the Part B funds allocated to the State and to the State’s required 10 percent Part B match. It does not apply to other program income funds, including, but not limited to, payments provided to a State from the Social Security Administration for assisting Social Security beneficiaries and recipients to achieve employment outcomes, any other federal funds, or to other funds allocated by the State for IL purposes.

Answering the questions of the new CIL Executive Director

Do you remember your first day on the job? That flutter of excitement and apprehension? The navigation of new terms and new requirements that no one warned you about? We offer technical assistance to a new Executive Director in a number of ways. We have a monthly Technical Assistance call for executive directors, typically the second Monday of the month, and discuss a different topic each month, with input from ILRU and from peers in the field. If desired, Paula McElwee sets up a regular call (frequency determined by the new ED) to touch base on emerging issues and to clarify regulations and other requirements. This blog is another resource, and new EDs are encouraged to subscribe so you receive notices of new posts to your email. And now we have what I believe is the best ever resource for new EDs of Centers for Independent Living. It is called the Management 101 Tool Kit for New CIL Executive Directors.

Business woman in blue shirt and glasses shakes the hand of a man in a suit.

This tool kit is designed for the new executive director of a Center for Independent Living (CIL) and its purpose is to focus attention on the most important aspects of the job. Concrete action steps are provided in easy to use checklists, bullet points, and dos and don’ts organized to help the new ED. The 17 sections of the tool kit provide information on a range of topics including the definition of a CIL, budget and finance, engaging and supporting the board of directors, strategic planning, and many more.

As a new ED, this resource is invaluable and will help you complete things you didn’t know were required, like updating the registrations on various websites. Experienced EDs may find the resource useful, as well, for getting back to the basics and remembering the CIL’s mission and requirements.

More from the revisions to the Uniform Guidance 2 CFR 200 – Indirect Cost Rates

Effective Dates

Q-9. When are the revisions to the Uniform Guidance published on August 13, 2020 effective?The effective date of the revisions to the Uniform Guidance published in 85 FR 49506 on August 13, 2020 is November 12, 2020, except for the amendments to §§ 200.216 and 200.340, which are effective August 13, 2020.

Q-15. How does the effective date apply to negotiated indirect cost rates? Existing negotiated indirect cost rates will generally remain in place until they are due to be renegotiated. The non-Federal entity must review its current indirect cost rate proposal or previously negotiated rate to ensure that it does not include any major conflicts with the revised Uniform Guidance (e.g., costs for covered telecommunications services or equipment). If there is a conflict, the non-Federal entity should work with the cognizant agency for indirect costs to ensure compliance with the revised Uniform Guidance.

Q-61. Will this prohibition impact awards that use the de minimis indirect cost rate, as the 10 percent is based on MTDC and not specific indirect costs elements? No, the prohibition on covered telecommunications and video surveillance services or equipment does not affect a non-Federal entity’s use of the de minimis indirect cost rate; however, the non-Federal entity must review its costs used to determine its de minimis indirect cost rate to ensure that unallowable costs are not included in the calculation. The MTDC cannot include unallowable costs in its calculation of the de minimis indirect cost rate.

Q-62. When a recipient normally charges prohibited services or equipment through their indirect cost pool, can a Federal award cover the same recipient’s indirect costs? No, like other unallowable costs, covered telecommunications and video surveillance services or equipment costs must not be charged either directly or indirectly to Federal awards. The recipient must separately negotiate an indirect cost rate for their Federal awards that excludes these costs from the indirect cost pool and base amount chargeable to its Federal award(s).

Q-63. How will covered telecommunications equipment or services as a new unallowable expense be implemented for indirect cost rates? Federally approved indirect cost rate agreements generally do not need to be reopened or amended, but may need to be adjusted in accordance with 2 CFR §200.411. The non-Federal entity must review its current indirect cost rate proposal or previously negotiated rate to ensure that it does not include expenses associated with covered telecommunications equipment or services because the non-Federal entity must certify that the costs included in its proposal are allowable.

•If a non-Federal entity has not included the covered telecommunications equipment or services, then it should include a statement with each indirect cost proposal affirming that it has not included any costs described in 2 CFR §200.216.

•If a non-Federal entity finds that it has included the covered telecommunications equipment or services in an indirect cost proposal currently under review or a previously negotiated rate, then it should immediately contact the cognizant agency for indirect costs to revise the indirect cost proposal or negotiated rate

2 CFR 200.216 Prohibition on certain telecommunications and video surveillance services or equipment.

Recently the regulations around how you as a grantee or subgrantee spend money have changed. Here is a new section for your consideration. You are prohibited from using federal dollars to procure or obtain certain equipment manufactured in or sold from the People’s Republic of China. More information is found at https://www.cfo.gov/assets/files/2CRF-FrequentlyAskedQuestions_2021050321.pdf Questions 46-64. Here is the text from the regulations:

(a) Recipients and subrecipients are prohibited from obligating or expending loan or grant funds to:

(1) Procure or obtain;

(2) Extend or renew a contract to procure or obtain; or

(3) Enter into a contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. As described in Public Law 115-232, section 889, covered telecommunications equipment is telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).

(i) For the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities).

(ii) Telecommunications or video surveillance services provided by such entities or using such equipment.

(iii) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

(b) In implementing the prohibition under Public Law 115-232, section 889, subsection (f), paragraph (1), heads of executive agencies administering loan, grant, or subsidy programs shall prioritize available funding and technical support to assist affected businesses, institutions and organizations as is reasonably necessary for those affected entities to transition from covered communications equipment and services, to procure replacement equipment and services, and to ensure that communications service to users and customers is sustained.

(d) See also § 200.471.

How to initiate internal controls in your one-person SILC office

It is all about internal controls. Internal controls assure that more than one person reviews all financial transactions, and that more than one person is involved in any chain of events related to a transaction. When there is a single person office, you need to accomplish separation of responsibilities by involving board/council members in your internal controls. When there aren’t internal controls, an inappropriate temptation is put in front of the employee.

Man holding up red wooden block with the words “internal control”. With his other hand he is halting the progress of falling dominoes.
White images of dollar, person, graphs, percentage etc. appear around the red block.

The board/council sets financial policy. You may be used to depending on your SILC staff for a lot of things including policy. When it comes to your responsibilities to the organization, you have a fiduciary duty (to oversee the finances), including setting the policy and procedure for internal controls. While the staff member may say, “Hey, don’t worry about it, I’ve got this”, this is one place you really must step up. and at a minimum review and approve the policies and procedures. We have a set of sample policies, geared to CILs but many apply to your SILC as well. Here is what we said about segregation of responsibilities, modified slightly to better apply to your SILC:

The council and staff of Anystate SILC will ensure the appropriate level of segregation of duties at all times. The board and staff will accomplish that by following the policies and procedures included in this manual.

Cash Receipts: Blank checks, checks or cash held for deposit, and checks held for employees or vendors will be kept in a locked area with access limited to the executive director and the treasurer (those whose responsibilities require access).

Incoming mail will be opened by the executive director. When checks or cash are received, he or she will perform the following tasks:

Stamp the back of any checks received “For Deposit Only.”
Count any cash received.
Complete a deposit slip.
Make a photocopy, or electronic copy of any checks received and any accompanying documentation.
Make timely bank deposits not more than a week from the receipt of the check.
Obtain an office copy of the receipted bank deposit.
Provide a copy of the checks and deposit slip and receipt (or check scanning report)to the accountant/bookkeeper or the treasurer to record in the accounting system. Under no circumstance shall the accountant (bookkeeper, treasurer) perform any of the above seven tasks, so that segregation of duties can be maintained.

Paying the bills. The Executive Director is responsible for processing any invoices for payment, including:

Open mailed invoices or print electronic invoices and mark them regarding allocation if the SILC has more than one funding source.
Assure that itemized receipts are included for credit card transactions and that each is reviewed.
Initial to show approval and forward to bookkeeper/accountant/DSE to initiate check payment.

The accountant/bookkeeper will enter the payment information and print a check or, if electronic payment is used, print the payment information. The accountant/bookkeper will then present the checks to the ED and treasurer to sign.

The documentation will be presented with the check (either paper or electronic) for review and signature.
All checks will be signed by both the executive director and the treasurer/other council member assigned.
At least quarterly the council chair shall reconcile the bank account by reviewing the check register and comparing payees and amounts to the actual check images on line.
Time documentation and payroll for the SILC executive director will be reviewed at least quarterly by the council chair.
Any check made out to the ED shall not be signed by the ED, but requires signature from an authorized board member.

The person doing to review should be familiar with the organization’s operations, and ideally have a budget but at the very least have a good sense for revenue sources and timing.

If this can’t be done, financial administration should be performed by an independent organization (another nonprofit or an organization that administers associations and nonprofits) or by a contracted accounting firm.

If you have found multiple signers a problem in the past there is good news. You can use a service like https://www.bill.com/ to allow remote signatures from multiple parties as expenses are approved and checks signed electronically.

New notes on 10% de minimus rate for indirect costs and Modified Total Direct Costs

A new FAQ is out for the overall regulations for spending of federal grant funds — Uniform Guidance found in 2 CFR 200 (and mirrors the regs from our HHS funder at 45 CFR 75 which have not yet been updated). You can find the full text here, where over 140 questions are addressed, but let’s look at a few key ones over the next few posts.

Modified Total Direct Costs

Q-114. If a non-Federal entity’s last negotiated indirect cost rate was 9 percent MTDC, and the rate has since expired, can the organization elect to use the de minimis rate going forward? Yes. Please inform your cognizant agency for indirect costs that you will be switching to the de minimis rate and will not be submitting indirect cost proposals for future years. Negotiated provisional rates and fixed rates need to be resolved and the carry-forward for the last year of the fixed-rate will need to be resolved with the cognizant agency for indirect costs.

Q-115. Does a non-Federal entity using the de minimis rate need to provide documentation to substantiate its costs? No. The de minimis rate was designed to reduce burden for small non-Federal entities. The non-Federal entity must report in its SEFA whether it elected to use the de minimis rate for its Federal awards. See §§ 200.414(f) and 200.510.

Q-116. If the subaward is made up of several individual funding agreements, does each individual subaward require including up to $25,000 in the MTDC base? The allowance of $25,000 is for one time during the period of performance of each individual subaward.

Q-117. Is the MTDC applied to the first $25,000 for an award’s period of performance or is it applied to each year of a multi-year agreement? The allowance of $25,000 is for one time during the period of performance of each individual subaward.

Q-118. Can a pass-through entity that paid actual or negotiated indirect costs to a subrecipient later impose the 10 percent de minimis rate on future subawards to the same subrecipient? The 10 percent de minimis rate is for non-Federal entities that do not have a current negotiated indirect cost rate (including provisional).

•If a pass-through entity paid negotiated or actual indirect costs to a specific subrecipient in the past, they should continue to negotiate and award indirect costs to that subrecipient in accordance with their prior practice.

•If a pass-through entity does not have a current awarded or negotiated actual indirect costs with that subrecipient, then the pass-through entity can provide the 10 percent de minimis rate or negotiate a rate with that subrecipient.

Q-119. Can a Federal awarding agency or pass-through entity restrict recipients or subrecipients use of indirect costs to the de minimis rate? No. Federal awarding agencies and pass-through entities must recognize a federally approved negotiated indirect cost rate. (NOTE from McElwee: This may be useful when the DSE as the pass-through entity doesn’t want you (as the subrecipient for Part B/ILS funding, to use your approved federal rate.)

Q-120. If a non-Federal entity allows its negotiated indirect cost rate to expire, is it eligible to request the de minimis rate? Yes. Please inform your cognizant agency for indirect costs that you will be switching to the de minimis rate and will not be submitting indirect cost proposals for future years. Negotiated provisional rates and fixed rates need to be resolved and the carry-forward for the last year of the fixed-rate will need to be resolved with the cognizant agency for indirect costs.

Q-121. If an organization elects to use the de minimis rate at the beginning of an award, is it applicable to the award’s entire period of performance? The de minimis rate may not be applicable during the entire period of performance of an award. If a non-Federal entity elects to negotiate an indirect cost rate and the negotiated rate begins prior to the end of an award’s period of performance, they may apply the negotiated rate to the award. The non-Federal entity should inform their Federal awarding agency or pass-through entity of the change prior to incurring costs on the award. Federal awarding agencies and pass-through entities are not required to reissue awards issued prior to the effective date of the indirect cost negotiation agreement. In fact, Federal agencies must use the IHEs’ negotiated rates in effect at the time of the initial award throughout the life of the Federal award.2 Accordingly, the de minimis rate may be applicable to the period of performance of the award if the total award amount is known and made available to the organization at the time of award.

Q-122. Can a recipient conducting a single function, funded predominately by Federal awards, elect to charge the de minimis rate if they currently only charge direct costs to their awards? No. If all costs are charged directly to the Federal award (e.g., space costs, utility and administrative costs), the recipient must not also charge the de minimis rate. Costs must be consistently charged as either indirect or direct cost, and may not be double-charged or inconsistently charge