Almost all federal grants require some level of match or cost sharing. The regulations at 2 CFR §200.306 indicate that any cost sharing or match to a federal award, including cash and third-party in-kind contributions must be accepted as part of the state’s cost sharing and must meet specific criteria stipulated in section 200.306. Allowable match follows the same requirements as allowable costs for use of federal funds under the grant as addressed in Subpart E-CostPrinciples, 2 CFR 200.400. Federal funds and match expended must be reasonable and necessary for the performance of the grant and verifiable from the grantee’s or subgrantee’s records. There are two other stipulations for match: The expenditures cannot be included as contributions in other federal awards and they cannot be paid for by the federal government under another federal award.
EAC does not require states to seek separate funds authority from the state to meet the matching requirement for CARES Act funds authorized under Section 101 of HAVA. A state may require separate authority, but it is not a federal requirement. States can meet the matching requirements with allowable costs within the agency’s existing budget authority. There may also be other state funds allocated to the agency related to the emergency that could be used as match. However, matching contributions must be tracked, recorded and verifiable from a grantee’s records. For example, if the salaries and benefits of staff working on the grant are being paid out of state funds, the state must be able to document the time spent working on the grant, following guidelines in 2 CFR.430 Compensation-personal services.
Any cost allowable under the grant that is paid for with federal funds could also be paid with state funds or with a combination of state and federal funds. Costs the state and local jurisdictions have already incurred in response to the pandemic, such as printing higher numbers of ballots, buying face masks and disinfectants, or leasing addition polling places are all eligible as a federal or state matching cost. Many states and local jurisdictions will have incurred costs prior to the actual receipt of the CARES Act funds. Those costs are eligible as federal expenses or match on the grant if they were incurred after March 28, 2020. States are also approved to claim costs as match they incurred as a result of the pandemic any time after January 20 when the Public Health Emergency Period began.
Some additional examples of allowable matching funds under CARES Act grants are:
Indirect Costs: Most states are not claiming indirect costs as part of their HAVA federal share through a state allocation plan or negotiated indirect cost rate. They can be claimed as a state match. Any election office that has never had a federal negotiated indirect cost rate can claim a de minimum 10% of modified total direct costs MTDC) as match. EAC will provide additional information on claiming indirect costs in an upcoming webinar.
The definition of modified total direct cost is contained in 2 CFR §200.68. They are defined as all the direct costs claimed under a grant with a few exceptions. They include direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and subawards and subcontracts up to the first $25,000 of each subaward or subcontract. MTDC excludes equipment, capital expenditures, and other charges that don’t usually apply to HAVA grants such as patient care, rental costs, tuition remission, scholarships and fellowships, participant support.
Staff Salaries: The portion of the salary and benefits the state is paying for staff who have been re-directed to work on pandemic issues is a legitimate match. States will need to have records that document the amount of time each staff person spent on pandemic activities, e.g. timesheets that allocate a staff person’s time to specific activities. Elements that should be part of appropriate documentation are found in 2 CFR § 200.430 paragraph (i)Standards for Documentation of Personnel Expenses.
In-kind Contributions: The state or local jurisdictions may get donations and contributions related to the pandemic. These are in-kind contributions donated by a third-party for eligible activities under the grant, e.g. plexiglass shields a company would normally sell are donated for poll workers that are necessary to protect poll workers from exposure to the virus.
Individuals may also donate their time or 3rd party organizations can donate paid staff to do election work. The amount claimed as match should be valued at rates they normally charge, or are paid, for similar services or at fair market rates that would normally be paid for similar services.
States may document these kinds of contributions by getting some kind of statement from the donor about the value of the donation and amounts they would normally charge for the product or service or determine appropriate fair market amounts or rates. The state must also determine if the value is appropriate before claiming it as match.
Subgrantee Match: States that subgrant HAVA funds to local jurisdictions and require the local jurisdictions to cost share can count that cost share as match on the grant.
Reimbursement to Local Jurisdictions: Some states reimburse local jurisdictions for costs they incur to buy additional supplies and equipment because of the pandemic. If the state does not reimburse the local jurisdiction for 100% of the cost, the unreimbursed amount can be counted towards the state match.