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Key Fiscal Procedures in Title IV Campus-Based Programs

PublicationDate: 7/1/95
ChapterNumber: 3
ChapterTitle: Key Fiscal Procedures in Title IV Campus-Based Programs
SectionNumber: 3
SectionTitle: Administrative Cost Allowance
PageNumbers: 76-77


3.3 Administrative Cost Allowance

Schools are allowed to claim an annual administrative cost allowance
(ACA) from campus-based program funds from which they have
made awards to students during a given award year. The ACA is
considered part of the institution's total program expenditures, not an
additional amount of money given the school.

((Allowable uses of ACA))
Schools may claim an ACA to help them defray costs associated with
administering Title IV campus-based programs, such as salaries,
supplies, and equipment. ACA may also be used for service fees
charged by banks for maintaining campus-based program accounts,
including the Federal Perkins Loan fund, and for expenses related to
student consumer-information requirements.

((Claiming ACA from campus-based expenditures))
The amount of ACA a school may claim is determined by its
expenditures for the Title IV campus-based programs in which it
participates. In this sense, "expenditures" means:

- FSEOG award disbursements (grants made) to students, including
both the 75 percent federal and 25 percent nonfederal shares,

- FWS gross compensation (wages paid) to students, including both
the 75 percent federal and 25 percent nonfederal shares, and

- Federal Perkins Loan advances (loans made) to students.

((Calculating amount of ACA))
ACA is calculated as a percentage of a school's campus-based
program expenditures, as follows:

- 5 percent of the first $2,750,000 of expenditures, PLUS

- 4 percent of expenditures greater than $2,750,000 but less than
$5,500,000, PLUS

- 3 percent of expenditures greater than $5,500,000.

A school takes ACA out of its annual FSEOG and FWS allocations
and from available cash on hand in the Federal Perkins Loan fund.
A school may draw its ACA from any combination of campus-based
programs or it may take the total ACA from only one program,
provided there are sufficient funds in that program. However, a
school may not draw any part of its ACA from a campus-based
program UNLESS it disbursed funds to students from that program
during the award year.

Last Modified: 06/30/1995