BE A FI$CAL $.T.A.R.
Allowable Costs
Management/Oversight
Conferences, Meetings and Travel Expenditures
Presenters:
Ron Petracca, Senior
Counsel, Office of General
Counsel (OGC)
Sean Barrett, Financial
Management Analyst,
SMPID Fiscal Unit
AGENDA
Background and legal basis
 Strategies for implementation
 Examples
 Conclusion
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BACKGROUND AND LEGAL BASIS
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Audit of expenses at DOJ law conferences (September,
2011)
OMB Memo on “Eliminating Excess Conference Spending
and Promoting Efficiency in Government” (September, 2011)
Audit of GSA conference (April, 2012)
OMB Memo on “Promoting Efficient Spending to Support
Agency Operations” (May, 2012)
Congressional Oversight Requests
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Deputy Secretary’s memo (June, 2011)
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General/Common Principles
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Answer/ask the question: Is a meeting/conference or travel the best
way to meet your objectives?
Use the “reasonable and necessary” standard – Is this necessary?
Can I prove this?
Are there alternative, more cost-effective ways to accomplish your
objectives without sacrificing quality (e.g., location, webinars, video
conferencing)?
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“Optics” – How would Joe Public react?
Having previously provided food/water does not affect future
allowability.
The name or type of group does not mandate allowability of costs.
Department Guidance
Meeting/Conferences Expenses

Overview
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The use of appropriated funds for travel,
transportation and/or subsistence expenses
are allowable only in limited circumstances.
An appropriate justification must be available
anytime the use of appropriated funds is
provided for travel, transportation or
subsistence expenses.
Justifying the allowability of these expenses
is the responsibility of the grantee.
Food at ED-Sponsored Meetings/Conferences
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As a general rule, with limited exceptions,
appropriated funds may not be used for personal
expenses (i.e., food). “Food” includes, but is not
limited to, coffee, snacks, light refreshments,
hors d'oeuvres, breakfast, lunch, dinner, etc.
In developing the agenda for a meeting/
conference, every effort should be made to set
the agenda in a manner that allows
attendees sufficient time to procure
snacks and meals at their own expense.
State Per Diem and Expenses to the
Federal Award
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Know your state per diem rules, the details and when they
apply - these will apply to whether an expense is allowable
with federal funds.
If per diem will cover a good or service, the grantee should
not be providing the same good or service to participants.
If the good or service is provided, per diem reimbursement
should be reduced.
In the above example the grantee should not pay for food
or travel expense with the assumption that a participant
will be refunding the money to the agency at a later time.
Source of Funds for Food
If a determination is made that it is reasonable and
necessary to use appropriated funds for food (i.e., working
lunch):
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Program funds may be used if there is specific statutory language
indicating that such appropriations “shall be available for the expenses
of attendance at meetings.”
Salaries and Expenses (S & E) may be used if a determination has been
made that the food serves the purpose of the meeting/conference and
is a legitimate conference expense (i.e., criteria set forth in Four-Part
Test) and the other criteria stated in Section 505 apply.
Four-Part Test
If specific statutory authority exists to use appropriated funds
for expenses of attendance at meetings, food may be
considered as a reasonable and necessary expense, if it
meets the following criteria (Four-part test):
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Formal meeting/conference (i.e.,
topical matters of interest to, and
participation of, multiple agencies
and/or nongovernmental
participants; registration; published
and substantive agenda;
scheduled speakers; discussion
panels, etc.);
Meals and refreshments are
incidental to the overall purpose of
the formal conference;
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Attendance at the meal and/or
when refreshments are served is
necessary to ensure attendee’s full
participation in essential
discussions, lectures, or speeches
concerning the purpose of the
meeting/conference;
Meeting/conference includes
substantial functions that occur
separately from when meals and
refreshments are served.
STRATEGIES FOR IMPLEMENTATION
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Communicate requirements to groups early and often,
especially if food/drink were previously provided.
Is there a way to structure the location or agenda to make
acquiring food and drink easier?
Are there more cost-effective or efficient alternatives (i.e.,
different location, webinars, video conferencing) to provide
the information?
Is the meeting and/or food consistent with the grantee’s
funding agreement (contract, grant, etc.)?”
What are the state per diem rules?
Strategies for Implementation (cont.)
How would the participant acquire food/drink if the activity
were not occurring?
Follow statutory and regulatory requirements in determining
whether costs are reasonable and necessary
EDGAR
Cost principles
When asked, could the grantee provide documentation
necessary to justify the expenditure- including exploration of
alternatives?
Attendees and Working Lunches
A working lunch is an example of a
cost for food that might be
allowable under a federal grant if
attendance at the lunch is needed
to ensure the full participation by
attendees in essential discussions
and speeches concerning the
purpose of the meeting/conference
and achieving the goals and
objectives of the project.
Do not assume that allowability in one
state automatically means allowability
in another. State laws and regulations
often differ; unknown details also may
differ and result in a different
interpretation. In making decisions in
your agency about the appropriateness
of providing food, be sure you have
employed all the relevant tests –
reasonableness, necessity for full
participation, achieving the goals and
objectives of the project.
Items that are Never Allowable
Federal grant funds may not be used, and run the
significant risk of being disallowed if they were used, to pay
for:
 Alcoholic beverages;
 Entertainment, including the costs of
amusement, diversion, and social
activities;
 Expenses that are already covered by per
diem; or
 The grantee cannot document how the
expense is necessary and reasonable.
EXAMPLES
Example Situation
Our SRC routinely meets in settings where
participants can easily access food/water during
planned breaks. As part of our outreach plan we are
looking to have our next meeting in a very rural part
of the state where it might not be possible to find a
meeting location with good access to outside
food/water. In this instance can we provide
food/water with federal funds?
 What are the relevant facts?
 Is this allowable? If yes, why?
 If no, why not and what could be done
differently to make it allowable?
Working the Example
Relevant Facts:
 The SRC is a legally mandated group.
 Community meetings are a reasonable activity
pursued in exercising legally mandated duties.
 Occasionally having meetings in rural areas is
reasonable.
 Ruralness of the location may make it unreasonable
to access food/water in a timely manner.
 The SRC is actively seeking out food/water options
and providing justification for using federal funds to
purchase these items.
Is this Allowable?
The purchase of food/water with federal funds
would be allowable in this situation, if in fact
the barriers associated with the rural location
proved to be unavoidable (at this time they are
potential, not actual barriers).
Example Situation
Our commission holds community forums to garner
input which we use when creating State Plans. These
typically occur over dinner, and we are afraid that
without providing dinner, the community won’t attend,
which will diminish our ability to write an effective
plan. To avoid this we provide full buffet style dinners
to all who attend.
 What are the relevant facts?
 Is this allowable? If yes, why?
 If no, why not and what could be done differently
to make it allowable?
Working the Example
Relevant Facts:
 This appears to be a legally constituted group
pursuing a mandated function.
 Having some- not all – community meetings at night
is reasonable.
 This appears to be the evening equivalent of a
working lunch.
Is this Allowable?
No. Although all the aspects listed above would
indicate this as an allowable activity, the “full
buffet style dinner” appears to be an
unreasonable method to complete the activity.
Dramatically scaling back the food could make this
activity allowable
Example Situation
Our SILC provides coffee in the morning and cookies
in the afternoon. We have done so for 15 years and
our members have come to expect this. Can we
continue?
 What are the relevant facts?
 Is this allowable? If yes, why?
 If no, why not and what could be done
differently to make it allowable?
Working the Example
Relevant Facts:
 This appears to be a legally constituted group
pursuing a mandated function.
 Coffee and cookies have been provided for 15 years
and members have come to expect this.
Is this Allowable?
No. No facts were presented to indicate that
providing these amenities for member is necessary
to achieve the mandate functions. Furthermore,
these amenities may be covered in per diem costs,
which are already paid to the member. We
recommend assuring agendas or other plans are
structured to allow members time to acquire
food/drinks on their own.
Example Situation
Our annual VR staff meeting typically awards a trip
to Hawaii to high performers. We strongly believe
this benefits morale and rewards high performers.
 What are the relevant facts?
 Is this allowable? If yes, why?
 If no, why not and what could be done
differently to make it allowable?
Working the Example
Relevant Facts:
 VR staff meetings are directly related to
mandated duties.
 Awards can be provided to improve
Is this Allowable?
No. A trip to Hawaii would be an unreasonably
expensive method to achieve the goal of improving
morale.
CONCLUSION
Don’t hesitate to ask questions or raise concerns/issues.
Grantees are expected to take proactive steps to justify
allowability of expenses.
RSA staff is available to provide support and advice.
Recipients of federal funds are responsible for proactively
justifying expenses.
We all must be responsible stewards of taxpayer dollars.
For More Information:
MEMORANDUM TO ED GRANTEES
REGARDING THE USE OF GRANT
FUNDS FOR CONFERENCES AND
MEETINGS
http://connected.ed.gov/doc_img/enclose7-gan.pdf
QUESTIONS
QUESTIONS?