| AwardYear: 1996-1997 EnterChapterNo: 7 EnterChapterTitle: Federal Work-Study Program SectionNumber: 5 SectionTitle: FWS Program Funds PageNumbers: 31-37 The Higher Education Act of 1965, as amended, describes the allocation process in detail; the procedures are not repeated in the regulations for the Federal Work-Study (FWS) Program. Funds are allocated directly to schools according to the statutory formulas. Schools receive their disbursements in periodic installments, either in advance or as reimbursements. The U.S. Department of Education (ED) REALLOCATES funds to a school in a manner that best carries out the purposes of the FWS Program. All federal funds a school receives as part of its FWS allocation must be held in trust for the students who are the intended beneficiaries under the FWS Program with the exception of funds the school receives for the administrative cost allowance (ACA) and for certain activities under the Job Location and Development (JLD) Program. (See Section 6.) The funds may not be used for, or serve as collateral for, any other purpose. [[Transfer of funds to FSEOG--34CFR 676.18]] A school may transfer up to 25% of its FWS allocation, as well as 25% of its Federal Perkins Loan federal capital contribution (FCC) allocation, TO the FSEOG Program. The FSEOG regulations prohibit the transfer of funds FROM the FSEOG Program to any other program. However, a school that transfers funds from the FWS Program TO the FSEOG Program during an award year must transfer any unexpended FWS funds BACK to the FWS Program at the end of the award year. [[Reduction of allocation due to returned funds--34CFR 675.4(e)]] If a school returns more than 10% of its FWS allocation for an award year, the schools allocation for the second succeeding award year will be reduced by the dollar amount returned, unless ED waives this provision. ED may do so for a specific school if ED finds that enforcement would be contrary to the interests of the program. ED considers enforcement to be contrary to the interest of the program only if the school returned more than 10% of its allocation due to circumstances that are beyond the schools control and are not expected to recur. Under the provisions of the Higher Education Amendments of 1992, unexpended funds returned to ED will be reallocated to eligible schools that used at least 10% of their total FWS allocation to pay students employed in community service activities. (A school must have a fair-share shortfall to receive these funds. (Refer to "Dear Colleague" letter CB-94-4, dated March 1994.) A school must use the reallocated funds only to pay students in community service jobs. [[Use 5% of funds for students in community service jobs-- 34CFR 675.18(h)]] A school must use at least 5% of its FWS initial and supplemental allocations for an award year or 100% of its supplemental allocation, whichever is greater, to pay the federal share of wages to students employed in community service jobs unless ED approves a waiver. The school may request in writing a waiver of this requirement. However, ED will approve a waiver only if it determines that the school has demonstrated that enforcing the requirement would cause hardship for the students at the school. [[FWS funds for less-than-half-time or independent students-- 34CFR 675.10]] If a schools FWS allocation is based in part on the financial need of less-than-full-time or independent students and if the need of all of these students exceeds 5% of the total need of all students at the school, the school must OFFER those students at least 5% of its FWS allocation. (This provision is in discussed in Chapter 5, Section 1.) An approved school may use part of its FWS allocation for the purpose of meeting the costs of the new Work-Colleges Program discussed in the introduction to this chapter. FEDERAL SHARE LIMITATION [[Exceptions to the 75% limitation--34CFR 675.26(a)]] The federal share of FWS wages paid to students may not exceed 75%, with the following exceptions: - The federal share of FWS wages to students employed by a PRIVATE FOR-PROFIT organization may not exceed 50%. - ED may authorize a federal share of 100% of FWS wages at schools designated as eligible schools under the Strengthening Institutions Program, the Strengthening Historically Black Colleges and Universities Program, or the Strengthening Historically Black Graduate Institutions Program. The school must request the increased federal share for an award year on the FISAP for that year, and the work performed by the student must be for the school itself, for a federal state or local public agency, or for a private nonprofit organization. [[School may contribute more than minimum share]] The federal share may be lower than 75% if the school chooses to contribute more than the minimum required non-federal share. For example, if a school has a large demand for FWS jobs from its various departments, it may contribute more than the usual 25% to allow for additional employment. The federal share may NOT be used to provide fringe benefits such as sick leave, vacation pay, or holiday pay or employers contributions to Social Security, Workers Compensation, retirement, or any other welfare or insurance program. The federal share limitation does not affect federal agencies that want to enter an off-campus FWS job agreement. They may provide the required share of student compensation normally paid by off- campus agencies plus any other employer costs that they agree to pay. The federal share of allowable costs in carrying out the JLD Program may not exceed 80% of such costs. (See Section 6 of this chapter.) NON-FEDERAL SHARE [[Exceptions to 25% minimum]] The non-federal share of FWS wages must be at least 25%*1* for 1993-94 and subsequent award years, with the following exceptions: - The non-federal share of FWS wages must be at least 50% in the case of work for PRIVATE FOR-PROFIT organizations; the 50% non-federal share is not subject to waiver. - ED may grant a waiver of the FWS institutional-share requirement to a school that is designated as an eligible institution under the Strengthening Institutions Program or the Strengthening Historically Black Colleges and Universities Program if the designated institution requests a waiver. [[Waiver of institutional share]] If ED grants a waiver, the school to which the waiver is granted has the OPTION of providing an institutional share and determining the amount of the share. The school, however, must provide the proper federal and institutional shares for any portion of its FWS allocation that it expends under the provisions governing student employment provided by a private for-profit organization (50% federal-share limitation) or for the administration of the JLD Program (80% federal-share limitation). The institutional-share requirement for these two categories of FWS expenditures may not be waived. [[Paying the institutional share]] A school may use any resource available to pay its share of FWS compensation except federal funds allocated under the FWS Program. The schools share may come from its own funds, from outside funds (such as from an off-campus agency), or from both. [[Using a noncash contribution to pay institutional share]] The school also has the option of paying its share of a students FWS wages in the form of a noncash contribution of services or equipment--for example, tuition and fees, room and board, and books and supplies. If the schools share for the award period is paid by noncash contributions, the share must be paid before the end of the students final payroll period. The school must document all amounts claimed as noncash contributions. If a school has assessed a charge against a student who is employed under FWS (such as a parking fine or library fine), the school may not include forgiveness of such a charge as part of the schools noncash contribution for the student. [[Costs off-campus agency pays]] Any FWS employment agreement a school may have with an off- campus agency should specify what share of student compensation and what other costs the agency will pay. The agreement between the school and a for-profit organization MUST require the employer to pay the non-federal share of student earnings. The agreement between the school and an employing agency or nonprofit organization MAY require the employer to pay - the non-federal share of student earnings; - required employer costs, such as the employers share of Social Security or Workers Compensation; and - the schools administrative costs not already paid from its ACA. [[Excess funds from off-campus agency]] If a school receives more money under an employment agreement with an off-campus agency than the sum of (1) required employer costs, (2) the schools non-federal share, and (3) any share of administrative costs the employer agreed to pay, the school must handle the excess in one of three ways: - use it to reduce the federal share on a dollar-for-dollar basis; - hold it in trust for off-campus employment during the next award year; or - refund it to the off-campus employer. Funds from programs sponsored by federal agencies (such as the National Science Foundation or the National Institutes of Health) may be used to pay the non-federal share, as long as the programs have the authority to pay student wages. Schools should contact the federal agency in question to see if it does have this authority. As discussed at the beginning of this section, with two exceptions, the federal share of FWS wages cannot exceed 75%. If the schools noncash contribution is less than the remaining 25%, the school must make up the difference in cash. CARRY FORWARD/CARRY BACK [[Reporting carried forward funds]] A school may spend up to 10% of its current years FWS allocation (initial and supplemental) in the FOLLOWING award year (carry forward). If the school intends to do so, it must indicate its intention on the FISAP. For example, if a school intends to carry forward 10% of its FWS 1995-96 allocation to 1996-97, the school must report this intention on the October 1996 FISAP, in Part V of the Fiscal Operations Report for 1995-96. [[Spending current year funds on previous years costs]] A school is also permitted to spend up to 10% of its current years FWS allocation (initial and supplemental) for expenses incurred in the PREVIOUS award year. The official allocation letter for a specific award period is the schools authority to exercise this option. Before a school may spend its current years allocation, it must spend any funds carried forward from the previous year. As stated in Section 4 of this chapter, a school is authorized to make payments to students for services performed after the academic year but prior to the beginning of the succeeding award year (that is, for summer employment) from the succeeding award years allocation. This "carry-back" authority is in addition to the previous authority to carry back 10% of the current years allocation for use at any time during the previous award year. [[The illustration showing FWS carry back/carry forward on page 7-35 is currently unavailable for viewing. Please reference your paper handbook for additional information.]] LIMITATIONS ON USE OF FUNDS CARRIED FORWARD OR BACK Schools are not permitted to add funds that are carried forward or back to the total FWS allocation for an award year when determining the maximum percentage of available funds that may be used in that award year for any of the purposes listed below: - the transferring of FWS funds to FSEOG, - providing the federal share of wages in private for-profit sector jobs, or - the JLD Program. For example, for the 1996-97 award year, schools may not add to the 1996-97 total FWS allocation any FWS funds carried forward into 1996-97 from 1995-96 or carried back into 1996-97 from 1997-98 when determining the maximum percentage of available funds that may be used in 1996-97 for the purposes listed above. The maximum amount usable for each of the three purposes listed in the previous paragraph is the appropriate percentage of a schools total 1996-97 original FWS allocation plus any supplemental 1996-97 FWS allocation. TRANSFER OF FUNDS TO THE FSEOG PROGRAM [[25% maximum to FSEOG--34CFR 676.18(c)]] For 1993-94 and subsequent award years, a school may transfer up to 25% of its total FWS allocation (initial and supplemental) to the FSEOG Program. EDs permission is not required. Note that this total FWS allocation for an award year does not include FWS funds carried forward or carried back into the award year from other award years (see the example that follows). The school must report any transfer of FWS funds to FSEOG as an expenditure on its FWS Fiscal Operations Report. However, a school that transfers funds to the FSEOG Program from the FWS Program during an award year must transfer any unexpended FWS funds back to the FWS Program at the end of the award year. (See Section 5 of this chapter.) [[The example on page 7-36 is not currently available for viewing. Please reference your paper handbook for additional information.]] ADMINISTRATIVE COST ALLOWANCE (ACA) As discussed in Chapter 5, Section 3, a school participating in the FWS Program is entitled to an ACA if it provides FWS employment to its student in that award year. The allowance may be used to help offset administrative costs such as salaries, furniture, travel, supplies, and equipment. The formula a school uses to calculate its total ACA for the campus-based programs is on page 5-20. [[Paying administrative costs of conducting a community service program--34CFR 675.18(b)(5)]] A school may use up to 10% of the ACA attributable to the schools FWS Program expenditures to pay administrative costs of conducting its community service program. These costs may include the costs of - developing mechanisms to ensure the academic quality of a students experience; - ensuring student access to educational resources, expertise, and supervision necessary to achieve community service objectives; and - collaborating with public and private nonprofit agencies and programs assisted under the National and Community Service Act of 1990, in the planning, development, and administration of these programs. *1* If a student works in a community service job for a PRIVATE NONPROFIT organization, the 25% non-federal share may be paid by the private nonprofit organization, or part may be paid by the organization and part by the school. |