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Subaward Guidance

Thursday, April 20, 2023

Federal and EAC Grants Policy Related to Subgrants.   Federal grantees are responsible for ensuring that their subgrantees follow the requirements of their grants and making determinations about allowability of costs.  FAQs answer many questions we have received related to the allowability of costs that states can use to manage their HAVA subgrantees.  However, the list is not exhaustive and it is the state’s responsibility to make determinations of allowability following the purposes of HAVA and the Cost Principles in 2 CFR 400.  EAC does not have the specifics or full context of each individual situation to make appropriate determinations.  Here we describe the process of making such determinations with examples to help states make determinations of allowability.  If is also important that you follow the requirements in 2 CFR 200.400 which contain many examples of allowable and unallowable costs under federal grants.

First, make a determination by applying HAVA.  The funds must be spent to improve the administration of federal elections and should not be costs the state or local election jurisdiction normally pays for with state funds.  Such costs generally are not the routine, long-standing costs of running an election, such as printing ballots and voter registration forms or employee salaries (unless those employees are working on HAVA-eligible activities).   Then ask, is this a cost the local jurisdiction would normally cover within its existing budget?  Federal funds cannot supplant existing state or local funds.  For example, if the state or local jurisdiction budget includes costs for office space, those costs should not be shifted to HAVA funds.

Then the three criteria under the Cost Principles should be applied - is the cost necessary, reasonable and allocable to the grant?  We will use purchasing a van to deliver accessible voting equipment to voters with disabilities as an example.  Ensuring voting is accessible to people with disabilities meets the HAVA test because it is specifically allowed under HAVA and is an activity that improves the administration of federal elections.

Necessary Cost?  Why is a van needed?  The local jurisdiction demonstrated that sufficient public transportation is not available to get people with disabilities to the polls when that is their mode of transportation.  Therefore, the van is necessary to allow people with disabilities to vote.  

Reasonable Cost?   Is the cost/purchase of the van what a prudent person would pay for it?  (Are they buying a standard vehicle or a Rolls Royce?).  Is it reasonable to buy a van that is only used during the election cycle or would it be more reasonable to lease the van?  If the answer are yes, it meets the reasonable test.

Allocable cost?  Will the van be used for other activities and at other times of the year?  If the answer is yes, only the portion of the cost that benefits federal elections can be allocated to the grant.