Section 4: Cost Assumption Plan
Anchor: #i1008417Introduction
National Highway Traffic Safety Administration (NHTSA) traffic safety funds are to be used to reduce the number of traffic crashes, injuries, and fatalities through a data-driven application of limited federal funds. Texas Traffic Safety Program project grant agreements supported with “non-dedicated” federal funds are limited to the length of the grant period and usually do not receive extended funding beyond three years. A majority of traffic safety grants are for a period of one year, with the need established annually.
If both TxDOT and the subgrantee agree that the project has demonstrated great merit or has potential long-range benefits, the subgrantee may apply for funding assistance beyond the three year limit. To ensure that projects continue beyond the availability of federal funding, each project is required to have a cost assumption plan (CAP), describing how the cost of the project will gradually be taken over by the subgrantee. Grant managers should explain and thoroughly discuss the CAP requirement with the potential subgrantee during project negotiations (See Chapter 4 of this manual.)
Anchor: #i1008434CAP Submission Requirements
Subgrantees who anticipate that their projects are likely to exceed the three-year limit must submit a CAP with their proposals for a second or subsequent year of funding and for all multi-year proposals.
Anchor: #i1008444Content of CAP
The CAP includes as a minimum the following information:
- a multi-year budget (schedule) showing when match increases will occur
- a narrative explaining the source or sources of the matching funds (state, local, private, etc.).
Allowable Matching (Cost Sharing)
In developing a CAP, the subgrantee can consider direct cash applications as well as in-kind contributions. In-kind contributions can represent the value of other resources directly applied to the project activities, such as equipment and personnel costs. Credit for such resources is limited to those costs normally allowable for funding under current NHTSA policy. In-kind contributions necessarily become part of the detailed project budget in order to be accountable as matching resources.
Concerning allowable matching (cost sharing), the Common Rule, §18.24, “Matching or cost sharing,” states that matching (cost sharing) requirements may be satisfied by either or both of the following:
- “[a]llowable costs incurred by the subgrantee ... under the ... agreement...” (For example, the purchase of land or office furniture is not allowable; therefore, the purchase price of these items cannot be considered as a matching cost.)
- “[t]he value of third party in-kind contributions applicable to the period to which the cost sharing or matching applies.”
The same section of the Common Rule includes the following qualifications and exceptions:
- “Costs and third party in-kind contributions counting towards satisfying a cost sharing or matching requirement must be verifiable from the records... These records must show how the value placed on the ... in-kind contributions was derived.”
- “Third party in-kind contributions count towards satisfying a cost sharing or matching requirement only where, if the party receiving the contributions were to pay for them, the payments would be allowable costs.” [emphasis added]
Examples of Matching Costs. Examples of what might be considered as matching costs include:
- allowable costs that
are reimbursed by the subgrantee, such as:
- indirect costs, as supported by an approved indirect cost rate
- donated staff time
- vehicle use
- third-party in-kind contributions, such as:
- volunteer time (see note below)
- donated car safety seats
- public service space or time.
NOTE: Donated time must be estimated at the going rate for that activity or function provided, not at the salary level of the staff member or volunteer. For example, a local doctor helps stuff envelopes announcing a car safety seat check-up. That time spent would be estimated at local hourly clerical rates. However, if the same doctor donates time and medical expertise during a health fair, that time can be estimated at the doctor’s going rate.
TRF-TS distributes annually to all districts and subgrantees a listing of approved volunteer match rates that are to be used for that fiscal year’s grants. Approved volunteer match rates are included for:
- child passenger safety (CPS) instructor technicians
- CPS technicians
- all other volunteers.
Other volunteers include those assisting traffic safety programs for bike, occupant protection, safe communities, alcohol and other drugs, and other general traffic safety activities. The rates are based on the Texas rate found on the Independent Sector website.
NOTE: CPS instructor technician and technician rates are based on the National SAFE KIDS match rates.
Anchor: #i1008589Schedule
The heart of the cost assumption plan is the schedule for phasing in funding from local or other sources and the phasing out of federal funding support from TxDOT. The schedule must show the federal-non-federal funding split for each year of the program.
Anchor: #i1008599Maximum Allowable Federal Support and Required Match
In order to preserve the seed-money concept, ensure that the matching requirements of federal 402 funds is met, and ensure subgrantee investment (i.e., cost sharing) from the start of a project, the following is required for each 402-funded grant:
- A cost assumption plan must be submitted with a proposal request for funding for a second or subsequent year of funding and for all multi-year proposals.
- A minimum 10 percent match is required for the first year of a grant award.
- If a project extends beyond the third year, federal funding must not exceed 65 percent in the fourth year and 50 percent in the fifth and subsequent years.
Proposals that exceed the minimum match requirement will be appropriately credited during proposal review.
The required matching schedule for 402-funded grants is as follows:
|
Project Year |
Federal 402 Funds |
Non-Federal (Match) Funds |
|---|---|---|
|
1 |
90% |
10% |
|
2 |
90% |
10% |
|
3 |
90% |
10% |
|
4 |
65% |
35% |
|
5 |
50% |
50% |
|
Beyond 5 |
50% |
50% |
Example: Safety City wishes to request a fourth year of funding. The city can contribute a total of $18,000 toward the project. Therefore, the most the city can request in federal funds is $33,429 for a total of $51,429 as follows:
$18,000 (35%) + $33,429 (65%) = $51,429
Grants funded with monies other than federal 402 may be required to follow a schedule other than that described above, depending on NHTSA requirements.
Anchor: #i1008648Plan Approval
In addition to the matching requirement, any project being considered for extension beyond three years must:
- be based on exceptional project performance
- document a continued need for the project
- receive specific approval from TxDOT.
Form
The cost assumption plan (CAP) may be submitted on the standard form or in another format, provided it contains the necessary information. The standard CAP form is TxDOT Form 1845. Click on the form number to open an automated version of this form. The form may also be obtained from the Traffic Operations Division or by contacting any of TxDOT’s district traffic safety specialists.
Instructions for completing Form 1845 are included in the form.