Transferred funds become funds of the program to which they are transferred and are subject to all the rules and requirements of the programs to which the funds are transferred (20 U.S.C. 7305b). For example, statutory provisions that establish specific set-asides governing the uses of funds apply to funds an LEA transfers under the transferability authority.
Each program covered by the LEA transferability authority is subject to equitable participation requirements. Before an LEA may transfer funds, it must engage in timely and meaningful consultation with private school officials representing the full spectrum of private schools in the district (20 U.S.C. 7305b).
What are an LEA’s responsibilities for funds that it transfers?
- Spend transferred funds in accordance with requirements of the receiving program.
- Maintain records of transfers that will permit the U.S. Department of Education and the DPI to carry out normal monitoring, evaluation, and auditing activities.
- Produce reports determined by the state to be adequate for financial and program reporting. (Guidance on the Transferability Authority, United States Department of Education, June 8, 2004).
How should LEAs code the transferred funds on their general ledger?
LEAs should record all expenditures to the Title project for which the reimbursement will be claimed (the target grant).
LEAs should record the revenue per the Aids Register, which will identify the reimbursement source and project, including transferred funds.
Should an LEA transfer funds if they need to pay for project expenses from more than one Title?
In many cases, this may not be required. If the expenses are allowable, it is appropriate to assign expenses to more than one Title.
Does transfer affect the period of fund availability?
No. Transferability does not extend the period during which an LEA may obligate funds because transferred funds retain the identity of the fiscal year for which the funds were appropriated (Guidance on the Transferability Authority, United States Department of Education, June 8, 2004).
Will transferring funds impact future funding allocations under the programs covered by the transferability authority?
No. An LEA’s transfer of funds does not affect its future grant allocations under the programs covered by the transferability authority. Transferred funds are not taken into consideration when the state allocates formula grant funds in subsequent years, and transferability has no effect on statutory hold-harmless provisions governing grant allocations (Guidance on the Transferability Authority, United States Department of Education, June 8, 2004).
Does the transferability authority affect maintenance-of-effort calculations?
Maintenance-of-effort levels are calculated on the basis of non-federal funds only. Transferring federal funds among programs will not affect the maintenance-of-effort calculation (20 U.S.C. 7901).