Transcript Flexible Match 101 - MTPA

How to Fund a Transportation
Planning Program in Trying
Times
Third Party In-Kind Contributions as
Match for FHWA Planning Funds
Michigan Transportation Planning Association Conference
Flint, Michigan
July 15, 2011
Connie Morrison, MDOT
517-335-2640
[email protected]
Rachael Tupica, FHWA
517-702-1829
[email protected]
How FHWA Planning (PL) Funds are
Awarded
Federal Government
State/Grantee
MPO/Subgrantee
Local Agency/Third Party
Contractor
Definitions
Grantee – the government to which a grant is
awarded and which is accountable for the use of
the funds provided. (MDOT)
 Subgrantee – the government or other legal entity
to which a subgrant is awarded and which is
accountable to the grantee for the use of funds
provided. (MPO)

Definitions

Third Party – An entity (other than the
grantee/subgrantee/Federal government) that is
not party to a Federal-aid project agreement, but
who may have an interest in the project.
◦ As a grantee, a State cannot be considered a third party
◦ Third Parties:
 Local Government (Road Commissions, Municipalities)
 Individual/Private Entity
 Indian Tribe
 Transit Agencies
Federal Aid Match Requirements

23 USC 120 – 80% with sliding scale
◦ Michigan is 81.85% Fed and 18.15% Non-Fed

49 CFR Part 18 – Common Grant Rule
◦ Establishes uniform administrative rules for Federal
grants and cooperative agreements to State, local, and
Indian tribal governments.
◦ 49 CFR 18.24 – Matching or Cost Sharing requirements
Federal Aid Match Requirements

49 CFR 18.24(a) - A matching requirement may be
satisfied by either or both of the following:
◦ (1) Cash donations from non-Federal third parties
◦ (2) The value of third party in-kind contributions
 AKA: Contributions, Donations, Non-Monetary Match, Flexible
Match
A combination of the two can be used meet the
non-Federal match requirement
 In-kind contributions can be applied to a total
UPWP basis (recommended) or for specific line
items or projects.

Third Party In-Kind Contributions
The value of hours of donated services of a third
party that is used to cover the non-federal cost of
a project or program
 Supports the Activities and Products in the UWP
 Allows a wide variety of public and private
contributions to be counted toward the nonFederal match of Federal-aid projects

Individual/
Private
Entity
Local
Govt.
Indian
Tribe
State
Govt.
Federal
Agency
Property &
Materials
Allowed
Allowed
Allowed
Allowed
Not
Allowed
Services
Allowed
Allowed
Allowed
Not
Allowed
Not
Allowed
Eligible In-Kind Contributions
Rule of Thumb: If the MPO did the work, would it
be an eligible cost? If not, it’s probably not eligible
 Exercise: What’s eligible?

◦
◦
◦
◦
Cost of paving a road
Cost of traffic count data collection
Cost of local master plan development
Aggressive go-kart driving
Requirements
Third party must agree to allow the value of the
work to be used as the match
 Cost of the third party work must not be borne
by other Federal funds
 Third party contributions must not be used as a
match for other Federally funded grants/subgrants
 Third party work must be an eligible and necessary
activity that benefits the Federally funded work
and must be identified in the UWP

Requirements





The third party costs must be allowable under the
2 CFR 225
The third party work must be performed during
the period to which the matching requirement
applies
The third party in-kind contributions must be
verifiable from the records
Records must show how the value placed on the
third party in-kind contributions was derived
Prior approval from FHWA must be obtained
before the program year
Valuation of In-Kind Contributions

49 CFR 18.24(c) Value the donated services
◦ (1) Volunteer Services – Valued at rates consistent with
rates of pay consistent with those ordinarily paid for
similar work in the MPO’s organization or in the labor
market. A reasonable amount of fringe benefits may be
included
◦ (2) Employees of Other Organizations – If donations are
for work of an employee in their normal line of work,
the services will be valued at the employee’s regular rate
of pay exclusive of fringe benefits or overhead costs
Valuation Methodology #1
Services of Employees of Other Organizations:
◦ Historical hourly wage information x estimated number
of hours to be contributed (fringe benefits not eligible)
For Fiscal Year 2012
City X in Michigan
Engineering Department Staff
Hourly Rates based on past wage history – prior year
Employee
Hourly Rate
City Engineer
$53.00
Asst. City Engineer
$44.00
Engineering Staff 1
$33.00
Engineering Staff 2
$32.00
Summer Tech
$9.50
Valuation Methodology #1
Computation Table
Hours estimated based on comparable activities in
prior years
Planning Activities-Work
Item – Number*
City
Eng
Asst City
Eng
TSM Technical Assistance –
Nonmotorized -304
Eng
Staff 1
Eng
Staff 2
24
TSM Technical Assistance –
Intermodal - 304
44
Safety Conscious Planning –
340
84
$3,388
128
$8,548
Data Monitoring and
Reporting - 331
Transp. Improvement
Program (TIP) - 337
Summer
Tech
Total
Estimated
Value
130
330
$7,295
140
148
138
$18,486
Total Hours
268
172
138
258
330
Cost per Person
$14,204
$7,568
$4,554
$8,256
$3,135
$37,717
Valuation Methodology #2

For Volunteer Services:
◦ Value of volunteer services when performing comparable
work in professional capacity, OR
◦ Statewide wage rate, such as those provided by Bureau of
Labor statistics
For Fiscal Year _____________
City X in Michigan
Volunteer Time, Work Item: TIP Development
Volunteer
Name
Profession
Volunteer Services
Trip Whire
Graphic Designer
Brochure for public
participation
Herb Ivore
Editor
Proofread TIP
Paige Turner
Librarian
Copy TIP
• Use valuation table from Methodology #1
Volunteer
Rate
$200
$14
$12.50
Documenting In-Kind Contributions

Valuing In-Kind Contributions
◦ Documentation of the methodology for valuing
estimated in-kind contributions
 Required for the project authorization phase
◦ Documentation of actual in-kind contributions
 Required for the progress billing and audit phases

Activities and Products
MPO Process for In-Kind Contributions
Step 1: Preliminary Discussions and Request







Read MDOT Guidance
Discussion with your committees
Ensure MPO and third parties can meet
requirements
Notify MDOT of your intent to use in-kind; your
Pre-UWP meeting is a good time for this
Get MPO approval to use in-kind contributions
Have each third party fill out and sign “Statements
and Assurances”
Officially request prior-approval
MPO Process for In-Kind Contributions
Step 2: Include in UWP
Discuss use of flexible match in introductory
section of UWP or within discussion of finances
 Indicate (in work item detail) how local agency
contributions will produce specified products
within relevant program categories
 Include flexible match worksheets in UWP (pages
11 and 12 of MDOT guidance)

MPO Process for In-Kind Contributions
Step 2, continued…
Show flexible match in summary budgets or tables
of UWP
 Document MPO Committee approval
 Include copies of “Statement of Notification and
Assurances” for each third party
 Provide copy of FHWA letter approving use of
third party in-kind contributions

MPO Process for In-Kind Contributions
Step 3: Check federal regulations!
Ensure use of flexible match meets requirements
of federal regulations
 Ensure use of flexible match meets requirements
of federal regulations
 Ensure use of flexible match meets requirements
of federal regulations

MPO Process for In-Kind Contributions
Step 4: Document Methodology

Compile documentation as the flexible match is
contributed
◦ Value of donated time
◦ Time sheets
◦ Service descriptions, showing relevance to program
activity

Review eligibility
◦ Ask: if MPO did this work, would it be reimbursable?
MPO Process for In-Kind Contributions
Step 5: Identify and document flexible match
in progress billings
Value of flexible match donated throughout the
billing period is part of total cost
 Provide copies of documentation to MDOT
Program Manager
 In lieu of providing copies, a letter of agreement
may be signed by both the MPO and MDOT staff
allowing in-person inspection of documentation
 Track value of flexible match donated throughout
the program period, in order to compare to
estimates at beginning of program

MPO Process for In-Kind Contributions
Step 5 continued…
Invoices submitted by the MPO to MDOT should
show total expenditures by MPO and the third
party.
 MDOT would then reimburse the MPO for the
Federal share, not to exceed the MPO’s portion
of the expenditures.
 If the total amount of third party expenditures at
the end of the program period is not sufficient to
match the total expenditure of Federal funds by
the MPO, the MPO will need to make up any
shortfall with its own funds.

MPO Process for In-Kind Contributions
Step 6: Identify and document flexible match in
Final Acceptance Report

Reconcile value of actual donated services to
beginning estimated value
◦ If actual value less than amount needed to cover end-ofyear local share, difference must be made up in cash.
◦ If actual value is greater than the amount applied, excess
cannot be reimbursed in cash or used as flexible match
on another grant.
Thank you!