| AwardYear: 1995-1996 EnterChapterNo: 7 EnterChapterTitle: Federal Work-Study Program SectionNumber: 5 SectionTitle: FWS Program Funds PageNumbers: 31-38 The Higher Education Act of 1965, as amended, describes the allocation process in detail; those procedures are not repeated in the regulations for the 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. 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 and for certain activities under the Job Location and Development Program (see Section Six). The funds may not be used for, or serve as collateral for, any other purpose. [[Transfer of funds to FSEOG]] [[Final Rule 11-30-94]] A school may transfer up to 25 percent of its FWS allocation (as well as 25 percent of its Federal Perkins federal capital contribution 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 (this provision is in Section 676.18 of the Final Rule published in the Federal Register on November 30, 1994). If a school returns more than 10 percent of its FWS allocation for an award year, the school's allocation for the second succeeding award year will be reduced by the dollar amount returned, unless this provision is waived by ED. As provided in Section 675.4(e) of the November 30 Final Rule, ED may waive this provision for a specific school if it 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 percent of its allocation due to circumstances that are beyond the school's 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 percent of their total FWS allocation to pay students employed in community-services activities. (A school must have a fair-share shortfall to receive these funds-refer to "Dear Colleague" letter CB-94-4, March 1994.) Schools must use the reallocated funds only to pay students in community service jobs. [[Use 5% of funds for students in community service jobs]] Beginning with the 1994-95 AWARD YEAR, a school must use at least 5 percent of its FWS initial and supplemental allocations for an award year 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 a hardship for the students at the school. (Refer to Section 675.18(h) of the November 30, 1994 Final Rule and to "Dear Colleague" letter CB-94-4, March 1994.) [[FWS funds for less-than-full-time or independent students]] If a school's 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 percent of the total need of all students at the school, the school must OFFER those students at least 5 percent of its FWS allocation (this provision is in Section 675.10 of the Final Rule and is discussed in Chapter Five, Section One). Section 675.18(a) of the Final Rule provides that 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 [[Federal share generally limited to 75%]] Section 675.26(a) of the November 30 Final Rule provides that, for the 1993-94 and subsequent award years, the federal share of FWS wages paid to students may not exceed 75 percent, with the following exceptions - the federal share of FWS wages to students employed by a PRIVATE FOR-PROFIT organization may not exceed 50 percent; and [[Exceptions]] - ED may authorize a federal share of 100 percent 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 programs. 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 percent, 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 percent to allow for additional employment. The federal share may NOT be used to provide fringe benefits such as sick leave, vacation pay, and holiday pay, or employer's 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 into 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 Job Location and Development Program may not exceed 80 percent of such costs (refer to Section Six of this chapter). NON-FEDERAL SHARE [[Non-federal share is at least 25%]] The non-federal share of FWS wages must be at least 25 percent* for 1993-94 and subsequent award years, except that- - the non-federal share of FWS wages must be at least 50 percent in the case of work for PRIVATE FOR-PROFIT organizations; the 50 percent non-federal share is not subject to waiver and - if a school is designated as an eligible institution under the Strengthening Institutions Program or the Strengthening Historically Black Colleges and Universities Program, ED may grant a waiver of the institutional-share requirement under the FWS Program if requested by the designated institution. [[Waiver of institutional share]] If ED grants the waiver, the school has the OPTION of providing an institutional-share and determining the amount of the share. However, the school 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 percent federal-share limitation) or for the administration of the Job Location and Development Program (80 percent Federal-share limitation). The institutional-share requirement for these two categories of FWS expenditures may not be waived. [[Source of school share]] A school may use any resource available to pay its share of FWS compensation except federal funds allocated under the FWS Program. The school's share may come from its own funds, from outside funds (such as from an off-campus agency), or from both. [[Noncash institutional share]] The school also has the option of paying its share of a student's 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 school's share for the award period is paid by noncash contributions, the share must be paid before the end of the student's 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 school's 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 employer's share of Social Security or Workers' Compensation; and - the school's administrative costs not already paid from its administrative cost allowance. [[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 school's 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 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 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 percent. If the school's non-cash contribution is less than the remaining 25 percent, the school must make up the difference in cash. CARRY FORWARD/CARRY BACK A school may spend up to 10 percent of its current year's FWS allocation (initial and supplemental) in the FOLLOWING award year (carry forward). If the school intends to do this, it must indicate it on the FISAP. For example, if a school intends to carry forward 10 percent of its FWS 1994-95 allocation to 1995-96, the school must report it in the October 1995 FISAP, in Part V of the Fiscal Operations Report for 1994-95. A school is also permitted to spend up to 10 percent of its current year's FWS allocation (initial and supplemental) for expenses incurred in the PREVIOUS award year. The official allocation letter for a specific award period is the school's authority to exercise this option. Note that, before a school may spend its current year's allocation, it must spend any funds carried forward from the previous year. As stated in Section Four 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 (i.e., for summer employment) from the succeeding award year's allocation. This carry-back authority is in addition to the previous authority to carry back 10 percent of the succeeding year's allocation for use at any time during the preceding award year. [[The graphic on page 7-35 is currently unavailable for viewing. Please reference your paper document 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 percent of available funds that may be used in that award year for any of the purposes listed below - transfer of FWS funds to FSEOG; - federal share of wages in private for-profit sector jobs; or - Job Location and Development Program. Therefore, for the 1995-96 award year, schools may not add to the 1995-96 total FWS allocation any FWS funds carried forward into 1995-96 from 1994-95, or carried back into 1995-96 from 1996-97 when determining the maximum percent of available funds that may be used in 1995-96 for the purposes listed above. The maximum amount usable for each of the three purposes listed above is the appropriate percentage of a school's total 1995-96 original FWS allocation plus any supplemental 1995-96 FWS allocation. TRANSFER OF FUNDS TO THE FSEOG PROGRAM [[25% maximum to FSEOG]] For 1993-94 and subsequent award years, a school may transfer up to 25 percent of its total FWS allocation (initial and supplemental) to the FSEOG Program. ED's 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 on the next page). The school must report any transfer of FWS funds to FSEOG as an expenditure on its FWS Fiscal Operations Report. However, under Section 676.18(c) of the November 30,1994 Final Rule for the FSEOG Program, 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 (refer to Section Five of this chapter). ADMINISTRATIVE COST ALLOWANCE As discussed in Chapter Five, Section Three, a school participating in the FWS program is entitled to an administrative cost allowance 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 administrative cost allowance for the campus- based programs is on page 5-20. [[The "Example" on page 7-37 is currently unavailable for viewing. Please reference your paper document for additional information.]] A school may use up to 10 percent of the administrative cost allowance attributable to the school's FWS Program expenditures to pay administrative costs of conducting its community service program (see Section 675.18(b)(5) of the Final Rule). These costs may include the costs of-- - developing mechanisms to assure the academic quality of a student's experience; - assuring 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 percent non-federal share may be paid by the private nonprofit organization, or part may be paid by the organization and part by the school. |