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CSLFRFHow can a municipality use grants or federal funding to support professional development opportunities?
While there are no known federal grants which specifically fund professional development opportunities for municipal employees, some federal funding sources may allow professional development expenses as either a direct or indirect cost. For example, recipients of Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) could potentially use these funds as a direct cost to “support public sector employment” by offering “worker retention incentives.”[1] Additionally, municipal staff professional development can be an eligible expense under Expenditure Category 6: Revenue Replacement as this may qualify as a government service provision.[2]
Professional development opportunities may also potentially be supported by allocating these expenses as indirect costs of a new or existing grants. However, municipalities should understand the Federal Uniform Guidance standards related to indirect costs.
All costs are subject to, among other things, 2 CFR Part 200 Subpart E which, among other pertinent guidance, addresses fundamental cost considerations to determine whether the indirect cost meets tests for:
- Allowability (§200.403),
- Reasonableness (§200.404), and
- Allocability (§200.405).[3]
Awardees such as a municipality should evaluate contemplated costs to determine if it meets the definitions under each applicable section. Regarding the classification of indirect costs, Section 200.412 of the Uniform Guidance states:
There is no universal rule for classifying certain costs as either direct or indirect (F&A) under every accounting system. A cost may be direct with respect to some specific service or function, but indirect with respect to the Federal award or other final cost objective. Therefore, it is essential that each item of cost incurred for the same purpose be treated consistently in like circumstances either as a direct or an indirect (F&A) cost in order to avoid possible double charging of Federal awards. Guidelines for determining direct and indirect (F&A) costs charged to Federal awards are provided in this subpart.[4]
Section 200.412 of the Uniform Guidance does not provide explicit criteria for determining direct or indirect costs. Rather, it emphasizes that municipalities must be consistent in their classification of indirect or direct for incurred costs of the same purpose.[5]
Last Updated: March 16, 2023
[1] Department of Treasury, “Coronavirus State and Local Fiscal Recovery Funds, Frequently Asked Questions” (as of July 27, 2022) – FAQ #2.15, at 13, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-FAQ.pdf.
[2] Treas. Reg. 31 CFR 35 at 233, available at: SLFRF-Final-Rule.pdf (treasury.gov).
[3] 2 CFR Part 200 Subpart E – Cost Principles, available at: https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E
[4] 2 CFR 200.412, Application, available at: ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRd93f2a98b1f6455/section-200.412.
[5] Id.