Supplement, Not Supplant
The Conundrum
Sarah Averill and Annie Molina
May 9, 2013
Purpose

The purpose of the federal fiscal requirement of
supplement, not supplant is to ensure that the
level of state and local support for programs
remains at least constant and is not replaced by
federal funds.
2
Basic Definition

Federal funds may not be used to provide
services required by state law, State Board of
Education rule, or local policy. Funds may not
be diverted for other purposes because of the
availability of these federal funds.
3
Bare Bones Definition

Supplement—to add to, to enhance, to expand,
to increase, to extend.

Supplant—to take the place of, to replace.
4
Ensuring S/NS

LEA assures this in the Program-Specific
provisions and assurances for the respective
grant.
5
6
Specific, Consistent Definition

No single definition in the Elementary and
Secondary Education Act (ESEA).

More than 30 S/NS provisions in all ten titles.

S/NS language will be in the actual authorizing
program statute or in an amendment to the
statute.
7
Supplement, Not Supplant
Statutory Requirements
8
Title I, Part A


A local education agency (LEA) shall use Title I,
Part A funds only to supplement the amount of
funds that would, in the absence of Title I, Part A
funds, be made available from non-federal
sources for the education of students
participating in Title I, Part A programs, and, in
no case may Title I, Part A funds be used to
supplant those non-federal funds.
[P.L. 107-110, Section 1120A(b)]
9
Title I, Part A Schoolwide vs. Targeted
Assistance S/NS Requirements


Schoolwide Programs—Title I, Part A funds must
be supplemental to the amount of funds
available from non-federal sources for the
campus including funds needed to provide
services that are required by law for children
with disabilities and children with limited English
proficiency.
Targeted Assistance Programs—Title I, Part A
funds and services must be supplemental.
10
Title I, Part C – Migrant


Title I, Part C funds first shall be used to meet
the identified needs of migratory children that
result from their migratory lifestyle, and to permit
these children to participate effectively in school.
Funds shall be used to address the needs of
migratory children that are not addressed by
services available from other federal or nonfederal programs.
[P.L. 107-110, Section 1306(b)(1&2)]
11
Title I, Part D


A Title I, Part D program that supplements the
number of hours of instruction students receive
from state and local sources shall be
considered to comply with the supplement, not
supplant requirement of section 1120A (as
applied in this part) without regard to the subject
areas in which instruction is given during those
hours.
[P.L. 107-110, Section 1415(b)]
12
Title II, Part A


An LEA shall use Title II, Part A funds only to
supplement, not supplant, non-federal funds
that would otherwise be used for activities
authorized under Title II, Part A.
[P.L. 107-110, Section 2123(b)]
13
Title III, Part A


Title III, Part A funds shall be used so as to
supplement the level of federal, state, and
local public funds that, in the absence of such
availability, would have been expended for
programs for limited English proficient children
and immigrant children and youth and in no
case to supplant such Federal, State, and local
public funds.
[P.L. 107-110, Section 3115(g)]
14
Title IV – 21st Century


Title IV, 21st CCLC funds will be used to
supplement, and not supplant, other federal,
state, and local public funds expended to
provide programs and activities authorized
under this part and other similar programs.
[P.L. 107-110, Section 4203(a)]
15
Title VI, Part A, Subpart 2—
Funding Transferability

Funds that are redirected through Funding
Transferability are subject to the supplement,
not supplant requirement as it applies to the
fund source to which the funds are redirected.
16
Title VI, Part B—Section 6211
REAP-Flex


Funds that are redirected through REAP are
subject to the supplement, not supplant
requirement as it applies to the fund source to
which the funds are redirected.
[P.L. 107-110, Section 6232]
17
Summary…
State and Local Funds
 Title I, Part A
 Title I, Part D
 Title II, Part A
 21st Century
Federal, State, and
Local Funds
 Migrant
 Title III, Part A


Any funds redirected
to one of these
programs under FT or
REAP-Flex
Any funds redirected
to one of these
programs under FT or
REAP-Flex
18
Example…
Title III,
Part A
Title I, Part A
funds for LEP
students
State and Local funds
for LEP students
LEA Services to Limited English Proficient Students
19
Enhancing, Expanding, or
Extending Required Activities
20
Enhancing, Expanding, or Extending
Required Activities

If federal funds are used to enhance or expand
a state mandate, SBOE rule, or local board
policy, then the federal supplementary activities
must be separately identified and clearly
distinguishable from those activities identified as
necessary for implementing the state mandate,
SBOE rule, or local board policy as outlined in
the implementation plan.
21
Enhancing, Expanding, or Extending
Required Activities

The LEA must be able to document a clear plan
for each – one plan for meeting the mandated
requirement, another plan for providing
supplementary activities from federal funds in
addition to the mandated requirement.
22
Documenting S/NS

Recipients of federal funds must maintain
documentation which clearly demonstrates the
supplementary nature of the funds and activities.

In most cases, it is both the funding and the
activities that must be supplemented. (other
than Title I)

Then, the auditors test S/NS.
23
Am I Supplanting?
Ask yourself, your team, your business office….

If I didn’t have federal funds available to conduct
this activity/service, would I still conduct it with
state or local (or other federal) funds anyway?
24
Penalties for Supplanting

All federal funds involved in a supplanting
situation would most likely have to be returned
to the federal government.

Since audits are usually conducted after the
grant period has ended, there is often no other
alternative corrective action available other than
the LEA returning the funds.
25
Auditing Supplement, Not
Supplant
“3 Tests + 1”
26
Three Presumptions of Supplanting

Pursuant to guidance from the U.S. Office of
Management and Budget (OMB), the U.S.
Department of Education (USDE) auditors
presume that supplanting has occurred in three
general situations.
27
Three Presumptions of Supplanting
Test 1:
Mandated
Activity
28
Test 1: Did the LEA provide services that
the LEA is required to make available under
state law, SBOE rule, Commissioner’s rule,
or local policy?
If:
 The LEA used federal funds to pay for a
required mandate or to meet local policy.
29
Test 1: Did the LEA provide services that
the LEA is required to make available under
state law, SBOE rule, Commissioner’s rule,
or local policy?
Then:
 Written documentation must be maintained
 How are other funds expended?
 Can the LEA prove it would not have
implemented the other federal, state, or local
requirements?
30
Three Presumptions of Supplanting
Test 1:
Test 2:
Mandated Prior Year
Activity
Funding
31
Test 2: Did the LEA provide services that
the LEA provided in a prior school year with
non-federal funds?
IF:
 State or local funds which previously funded
activities are diverted to another purpose
because federal funds are now available to fund
those activities…
32
Test 2: Did the LEA provide services that
the LEA provided in a prior school year with
non-federal funds?
Then:
 Written documentation must be maintained
 Documentation must show that the original
source of funding is no longer available and the
service or activity would not have been
continued in the next school year.
33
Test 2: Did the LEA provide services that
the LEA provided in a prior school year with
non-federal funds?
Furthermore:
 This situation must be documented at the time
the decisions to not continue the service or
activity is made. This situation cannot be
documented after-the-fact.
The LEA cannot plan in advance for a reduction of
funds.
34
Three Presumptions of Supplanting
Test 1:
Mandated
Activity
Test 2:
Test 3:
Prior Year Campus to
Funding
Campus
35
Test 3: Did the LEA provide services to
students participating in a federal program
that the LEA provides to non-federal (i.e.,
Title I) students or students at non-federal
(i.e., Title I) schools with non-federal funds.
Rebuttal:
 The rebuttal to this presumption is often the
“Exclusion for Title I-like programs”.
 Otherwise, not usually rebuttable.
36
“Exclusion for Title I-like Programs”


For the purposes of compliance with the
supplement, not supplant (1120A(b)) and
comparability (1120A(c))
LEA may exclude supplemental state or local
funds expended in any school attendance area
or school for programs that meet the intent and
purpose of Title I, Part A.
37
Three Presumptions of Supplanting
Test 1:
Mandated
Activity
Test 2:
Prior Year
Funding
Test 3:
Campus to
Campus
Is it Allowable?
38
The 4th audit test….Is it Allowable?

Regardless of documentation and rebuttal of the
supplant assumptions, the activity must be an
allowable expenditure under the program.

In any case, the independent auditor may
still consider the expense a supplant.
39
Maintaining supplemental in
times of diminishing LEA
budgets….
40
Diminished Budgets and S/NS

LEA may be able demonstrate that it is
supplementing where there is acceptable
documentation of a diminished budget.
Must be able to prove (in the actual budget) that
fewer state or local funds are available in the
current school year than were available in the
previous school year.
Must be carefully documented.

But, remember…


41
Test 2: Did the LEA provide services that
the LEA provided in a prior school year with
non-federal funds?

The LEA cannot plan in advance for a reduction
of funds.
42
Supplemental or A Supplant?
You Decide…
43
Scenario 1



A teacher who is 100% locally and state-funded
becomes the newly appointed program manager
for a federal grant.
The budget page in the grant application states
that 100% of this position will be devoted to the
federal grant program.
Another teacher is hired to take over the
teaching duties.
44
Scenario 1



A teacher who is 100% locally and state-funded
becomes the newly appointed program manager
for a federal grant.
The budget page in the grant application states
that 100% of this position will be devoted to the
federal grant program.
Another teacher is hired to take over the
teaching duties.
45
Scenario 2


A grant allows professional development to be
paid out of the funds.
The district wants to pay for already scheduled
and/or budgeted professional development
and/or inservice with these new grant funds.
46
Scenario 2


A grant allows professional development to be
paid out of the funds.
The district wants to pay for already scheduled
and/or budgeted professional development
and/or inservice with these new grant funds.
47
Scenario 3



A campus has a full-time assistant principal.
The district applying for a grant project wants to
have the assistant principal spend ½ day
serving as assistant principal, and ½ day
managing this new grant.
They would charge ½ the salary to state/local
funds and ½ the salary to the grant.
48
Scenario 3



A campus has a full-time assistant principal.
The district applying for a grant project wants to
have the assistant principal spend ½ day
serving as assistant principal, and ½ day
managing this new grant.
They would charge ½ the salary to state/local
funds and ½ the salary to the grant.
49
Scenario 4

A district wants to pay consultants for activities
that district personnel are already performing
under the grant.
50
Scenario 4

A district wants to pay consultants for activities
that district personnel are already performing
under the grant.
51
Scenario 5



As a course of business, the district has
consistently used local or state funds to always
pay for the substitutes.
The district has recently been awarded a federal
grant where they have requested funds to pay
for substitutes while teachers attend
professional development.
The district will now use the federal funds to pay
for substitutes while the teachers go to their
training.
52
Scenario 5



As a course of business, the district has
consistently used local or state funds to always
pay for the substitutes.
The district has recently been awarded a federal
grant where they have requested funds to pay
for substitutes while teachers attend
professional development.
The district will now use the federal funds to pay
for substitutes while the teachers go to their
training.
53
Scenario 6



A district that receives grant funding to provide
staff training to school districts charges a
registration fee for staff to participate in specific
training sessions.
Each participant receives a complete training
manual and set of materials to use in their
classroom.
The fees collected are used to offset the printing
and binding cost of the materials provided
during the training.
54
Scenario 6



A district that receives grant funding to provide
staff training to school districts charges a
registration fee for staff to participate in specific
training sessions.
Each participant receives a complete training
manual and set of materials to use in their
classroom.
The fees collected are used to offset the printing
and binding cost of the materials provided
during the training.
55
Scenario 7



A grantee uses various sources of federal
funding to provide a supplementary program for
children not meeting standards.
Some of the federal funding sources are
expiring as other new grant funding is beginning.
The program uses the new federal grant funds
to replace the expiring funding sources to
continue this program.
56
Scenario 7



A grantee uses various sources of federal
funding to provide a supplementary program for
children not meeting standards.
Some of the federal funding sources are
expiring as other new grant funding is beginning.
The program uses the new federal grant funds
to replace the expiring funding sources to
continue this program.
57
A supplement not supplant handbook was
developed by the Chief Grants Administrator in
conjunction with the Division of Federal Fiscal
Monitoring.
The handbook will be available by approximately
May 30, 2013 at the following website:
http://www.tea.state.tx.us/index2.aspx?id=214748
7920&menu_id=951
58
Division of Grants Administration
Texas Education Agency
(512) 463-8525
grants@tea.state.tx.us
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