[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR645.235]

[Page 395-396]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 645--PROVISIONS GOVERNING WELFARE-TO-WORK GRANTS--Table of Contents
 
       Subpart B--General Program and Administrative Requirements
 
Sec. 645.235  What types of activities are subject to the administrative cost limit on Welfare-to-Work grants?

    (a) Administrative cost limitation (section 404(b)(1)).--(1) Formula 
grants to states. Expenditures for administrative purposes under WtW 
formula grants to States are limited to fifteen percent (15%) of the 
grant award.
    (2) Competitive grants. The limitation on expenditures for 
administrative purposes under WtW competitive grants will be specified 
in the grant agreement but in no case shall the limitation be more than 
fifteen percent (15%) of the grant award.
    (3) Although administrative in nature, costs of information 
technology--computer hardware and software--needed for tracking and 
monitoring of WtW program, participant, or performance requirements, are 
excluded from the administrative cost limit calculation.
    (b) The costs of administration are that allocable portion of 
necessary and allowable costs associated with those specific functions 
identified in paragraph (c) of this section for the administration of 
the WtW program and which are not related to the direct provision of 
services to participants. These costs can be both personnel and non-
personnel and both direct and indirect.
    (c) The costs of administration are the costs associated with 
performing the following functions:
    (1) Performing overall general administrative functions and 
coordination of those functions under WtW including:
    (i) Accounting, budgeting, financial and cash management functions;
    (ii) Procurement and purchasing functions;
    (iii) Property management functions;
    (iv) Personnel management functions;
    (v) Payroll functions;
    (vi) Coordinating the resolution of findings arising from audits, 
reviews, investigations and incident reports;
    (vii) Audit functions;
    (viii) General legal services functions; and
    (ix) Developing systems and procedures, including information 
systems, required for these administrative functions;

[[Page 396]]

    (2) Performing oversight and monitoring responsibilities related to 
WtW administrative functions,
    (3) Costs of goods and services required for administrative 
functions of the program, including goods and services such as rental or 
purchase of equipment, utilities, office supplies, postage, and rental 
and maintenance of office space;
    (4) Travel costs incurred for official business in carrying out 
administrative activities or the overall management of the WtW system; 
and
    (5) Costs of information systems related to administrative functions 
(for example, personnel, procurement, purchasing, property management, 
accounting and payroll systems) including the purchase, systems 
development and operating costs of such systems.
    (d)(1) Only that portion of the costs of WtW grantees that are 
associated with the performance of the administrative functions 
described in paragraph (c) of this section and awards to subrecipients 
or vendors that are solely for the performance of these administrative 
functions are classified as administrative costs. All other costs are 
considered to be for the direct provision of WtW activities and are 
classified as program costs.
    (2) Personnel and related non-personnel costs of staff who perform 
both administrative functions specified in paragraph (c) of this section 
and programmatic services or activities are to be allocated as 
administrative or program costs to the benefitting cost objectives/
categories based on documented distributions of actual time worked or 
other equitable cost allocation methods.
    (3) Specific costs charged to an overhead or indirect cost pool that 
can be identified directly as a program cost may be charged as a program 
cost. Documentation of such charges must be maintained.
    (4) Except as provided at paragraph (d)(1) of this section, all 
costs incurred for functions and activities of subrecipients and vendors 
are program costs.
    (5) Costs of the following information systems including the 
purchase, systems development and operating (e.g., data entry) costs are 
charged to the program category.
    (i) Tracking or monitoring of participant and performance 
information;
    (ii) Employment statistics information, including job listing 
information, job skills information, and demand occupation information; 
and
    (iii) Local area performance information.