1. PROGRAM INCOME / IN-KIND ASSISTANCE / IN-KIND CONTRIBUTION

2. PROGRAM INCOME REFERENCES
NGR 5-1/ANGI Chapter 7.
32 CFR, SECTION
DoDGAR R, SECTION
CFR = Code of Federal Regulations

3. FUNDS THAT ARE NOT PROGRAM INCOME
Rental of State owned and Federally supported armories.
Reimbursements made to the USPFO by another Federal agency for the use of a NGB supported facility.
Billeting Fund.
FIRST WE TO NEED TO DISCUSS THOSE ITEMS THAT ARE NOT CONSIDERED AS PROGRAM INCOME. THEY ARE AS FOLLOWS:

4. RENTAL OF STATE OWNED, FEDERALLY SUPPORTED ARMORIES
TITLE 10 U.S.C. 1823(C) Permits the States to rent out Armories if the State uses the income to maintain the Armories.
THERE ARE TWO WAYS IN WHICH ARMORY RENTAL FUNDS ARE HANDLED. ONE WAY IS TO ALLOW THE UNIT TO MANAGE THE FUNDS AT THE LOCAL LEVEL. THE STATE PROVIDES GUIDANCE ON HOW THE FUNDS ARE TO BE USED. THE STATE WOULD ALSO AUDIT THESE FUNDS. ANOTHER IS FOR THE UNIT TO FORWARD TO THE STATE ANY FUNDS THEY GENERATE. THE UNIT CAN APPLY TO THE STATE FOR APPROVAL OF LOCAL PROJECTS.

5. REIMBURSEMENT BY ANOTHER FEDERAL AGENCY
Funds submitted to the USPFO.
USPFO processes a reimbursement for actual costs incurred.
Cooperative Agreement modified to increase Federal contribution.
YOU MAY WANT TO ENTER INTO A MOA. THE MOA WOULD SPECIFY THE PROCEDURES THAT WOULD BE USED TO DO THE REIMBURSEMENT. MIPR, DIRECT FUND SITE ETC.

6. BILLETING FUND
NGR

10. GRANTEES (NGB) ARE ENCOURAGED TO EARN PROGRAM INCOME
WE ENCOURAGE PROGRAM INCOME TO HELP DEFRAY PROGRAM COSTS.

11. PROGRAM INCOME DEFINED
Program income is defined in NGR 5-1/ANGI , Chapter 7 as the gross income, received by a recipient from fees for services performed and from the use, rental, or sale of real or personal property, the operation and maintenance of which is supported under an NGB CA.
Program Income is sent thru the state.
TAG may waive C charges for those users who incur less than $1000 per annum {chapt.7-4(B)(2)}
Any State entity supported by federal funding under a CA shall be considered a federal user.

12. PROGRAM INCOME CONCERNS
*Equipment acquired with NGB CA funds shall NOT be used to provide services for a fee to compete unfairly with private companies that provide equivalent services.
*Likewise we should not rent facilities that
would compete unfairly against the private sector.
ANYTIME THAT YOU ARE GENERATING PROGRAM INCOME YOU NEED TO BE SENSITIVE TO THE ISSUE OF COMPETING WITH LOCAL BUSINESSES.

13. USER’S FEE NATIONAL GUARD USERS: Recover Cost for Additional Services
FEDERAL AGENCIES: Recover Identifiable Incremental Costs
NON-FEDERAL USERS: Recover an Amount Equal to its Overhead Cost
ICC ARE THOSE COSTS A BASE OR INSTALLATION INCURS THAT ARE DIRECTLY RELATED TO USAGE BY THE UNIT BEING SUPPORTED THE BASE WOULD NOT OTHERWISE INCUR. EXAMPLES INCLUDE RENTAL, PLACEMENT AND PICKUP OF DUMPSTERS AND PORTABLE LATRINES, ADDITIONAL REFUSE PICKUPS, GRASS MOWING, AND INSECT SPRAYING, UTILITIES FOR METERD BUILDINGS, COST OF CONSUMABLES, TRAINING AREA CLEAN-UP AND DAMAGE REPAIR, OVERTIME.
RECOVER OVERHEAD COSTS WHICH IS THE TOTAL BUDGETED COSTS TO RUN A TRAINING CENTER, INCLUDING ALL DIRECT, INDIRECT AND GENERAL AND ADMINISTRATIVE COSE, FAIRLY ALLOCATED AMONG IT USERS.
AGAIN BE CONCERNED ABOUT UNFAIRLY COMPETING AGAINST PRIVATE BUSINESSES WHEN RENTING TO THE PRIVATE SECTOR.

14. ACCOUNTING FOR PROGRAM INCOME
Program income is accounted for and used as an addition to the State’s contribution to a CA.
If program income is received on a cost-shared CA, the amount of program income added to the funds committed to the CA is a percentage of gross program income equal to the percentage of the Federal contribution stated in the CA.
Back to the porta potty example, if we are now renting the range to the Local Sheriff’s office (they are not a federal user), they would pay for the additional two porta potties. Program Income must be at least IIC incurred. We can also charge the non-federal users an overhead cost.
The fee is collected by the state, the federal program manager submits a request for modification and the fee collected by the sheriff’s office is an addition to the state contribution.
Reasonable incidental cost may be deducted from gross income to determine Program Income, such as set-up fees and clean-up costs. The USPFO will approve the reasonableness' of such costs.
Ohio: IIC costs are developed in CFMO shop, reviewed by the GOR and IR and approved annually by the USPFO
Program income is directly related to the propotional share. For 100% federal support, 100% is program income back to the appendix, for 75/25, then only 75% is program income back to the appendix. Examples to follow.

15. ACCOUNTING FOR PROGRAM INCOME (Continued)
The State must expend program income funds following the rules applicable to the type of funds from which the program income was generated.
Program income is used to offset future requests for reimbursement.
Funds must be expended on the appendix from which it is earned. For example, if the FP appendix generates program income, you cannot move it and expend it on the environmental appendix.
Be careful as program income may affect more than one appendix.
Ohio: When Program Income is earned at Camp Perry, it will typically affect both the RTLP and FP appendix.
Program income should be reflected on the next request for reimbursement as soon as it is earned and any unliquidated amounts should be carried forward to the next request for reimbursement.
Since it is considered additional state contribution, it is not subject to federal fiscal rules.

16. ACCOUNTING FOR PROGRAM INCOME (Continued)
Cooperative Agreement modified to increase estimated cost.
Program income is reported in DAADS as part of the State contribution.
I have my state federal program managers report their program income on a request for modification.
Once I get the request, I modify the appendix and report the program income, as state contribution in DAADS quarterly.
If a non-federal user is not charged, and the State incurs increased costs to provide support, those costs are not allowable under the MCA, and must be reported by the state as unallowable state costs.

17. FUNDING – PROGRAM INCOME
FUNDING “CASH” Quarterly Authority Annual Budget Authority Allotment Annual Funding Program Maximum Funding Limitation Estimated Cost Federal Share (100%) $_______________________ $_____100,000__________________ Federal Share (75%) $_______________________ $_______________________ Federal Share (50%) $_______________________ $_______________________ Federal Total $_______________________ $______________________ State Share (50%) $________________________ $______50,000_________________ State Share (25%) $________________________ $_______________________
Program Income $_______________________ State Total $________________________ $_______________________ Grand Total $________________________ $_______________________ In-Kind Assistance.
1,000.00

18. PROGRAM INCOME
EXAMPLES

19. EXAMPLE #1
The State Resource Manager received $1,000 in program income from the State Human Resources Division for using the Training Site auditorium. (100% Federal)
 State Resource Manager:
 1. Receives the check from the Training Site Administrator.
 2. Reports the $1,000 program income to the Grants Officer.
 3. On the next request for reimbursement, reduces the amount requested by the amount of program income.

20. EXAMPLE #1 (Continued) The Grants Officer:
 1. Completes a modification to the cooperative agreement.
 2. Reports program income in DAADS as an increase to the State contribution.
 If the original contribution by the State was $0, add the $1,000 program income contribution for a total State contribution of $1,000.

21. EXAMPLE #2
The State Resource Manager received $5,000 in program income from the state highway patrol for using an agreement supported pistol range. (75% Federal/25% State)
 State Resource Manager:
 1. Reports the $3,750 program income to the Grants Officer. (5,000 X 75% Federal share)
 2.   On the next request for reimbursement, reduces the amount requested by the amount of program income.
3. The State Resource Manager at their discretion will use the $1,250 that is not reported as program income. 

22. EXAMPLE #2 (Continued) The Grants Officer:
1. Completes a modification to the cooperative agreement.
2. Reports program income in DAADS as an increase to the State contribution.
If the original contribution by the State was $100,000 add the $3,750 program income contribution for a total State contribution of $103,750.

23. MANAGEMENT CONTROLS
Determine which programs in your state may create Program Income.
Validate whether program income is being generated
Is program income submitted to State Comptroller?
Has the State Comptroller correctly applied program income (proper share & proper appendix) by reducing requests for reimbursements?
Validate that CA has been modified to increase the State Share by the applied Program Income and reported in DAADs.
WHEN DOING YOUR RISK ASSESEMENT FOR YOUR ANNUAL AUDIT PROGRAM INCLUDE PROGRAM INCOME.

24. IN-KIND ASSISTANCE REFERENCE
NGR 5-1/ANGI Chapter 6

25. GOVERNMENT FURNISHED EQUIPMENT
Government furnished equipment is NOT In-Kind assistance.
Reference NGR 5-1/ANGI Chapter 6-2c
Normally, in-kind assistance results in no change to the value of the CA appendix, however, equipment, as defined in Chapter 8, is considered GFE, not in-kind assistance. And will reduce the appendix.
For example, a request comes thru for a $15,000 PA system at a range. If approved by the USPFO to be procured thru federal channels, and since this falls under the definition of equipment, the appendix would be reduced by $15000, in-kind assistance would remain $0.
The PA system would remain on federal property books.

26. The transfer of property or services (valued at the time of contribution at fair market value), in lieu of funds by NGB, to satisfy (in whole or in part) its obligation of assistance support to the State.
In-kind assistance is subject to the rules of the FAR, DFAR, AFAR, and NGFAR

27. IN-KIND ASSISTANCE AUTHORIZED
Supplies.
Services (exception is Federal contracts for the performance of fire fighting or security guard functions).
Maintenance or repair.
Make sure you read each appendix, as in-kind assistance which may be authorized on one appendix, may not be authorized on another.
Types of In-Kind assistance include:
Supplies: which are purchased for the performance of the MCA
Services: maintenance, repair, rehab, salvage modification of supplies or equipment. Real property maintenance, repair and construction.
Remember, construction on real property owned or leased by the state must be in accordance with 10 USC

28. TYPES OF IN-KIND ASSISTANCE
Contracting through the USPFO.
Contracting through other Federal channels.
Contracting thru the federal purchasing and contracting office,
Thru milstrip, DOD interservice offloading or Economy Act offloading.

29. IN-KIND ASSISTANCE
In-Kind Assistance is on a case-by-case basis and considered the exception, not the rule.
The value of the In-Kind Assistance must be accounted for in the Cooperative Agreement.
The total monetary value of the In Kind Assistance is the amount used to determine a State’s share when a Cooperative Agreement is cost shared.
Should not use in-kind assistance just because you do not like state procedures or because you do not have a state credit card.
In-kind assistance does not relieve the state of their portion when there is a cost share. If the USPFO approves the purchase of supplies on a 75/25 appendix, the state is still responsible for their portion.
Examples to follow.

30. PROCESSING IN-KIND ASSISTANCE
USPFO Approves/Disapproves
Modify Cooperative Agreement (if approved)
Federal Procurement
Ohio: Federal program manager submits a request for modification to the appendix and will submit a list item by item and $$ amount for in-kind assistance.
*The NGR 5-1 has been changed and no longer states that the request should come from the state.
Routed thru state finance, so they are aware of the total amount of the appendix, how much will be set aside and procured thru federal channels. Sign
Then to state QM who may line out any item or approve in entirely, they sign
Then to USPFO who will approve. My USPFO can and has lined out specific items.

31. FUNDING – IN KIND ASSISTANCE
“CASH” Quarterly Authority Annual Budget Authority Allotment Annual Funding Program Maximum Funding Limitation Estimated Cost Federal Share (100%) $______100,000___________ $_______________________ Federal Share (75%) $_______________________ $_______________________ Federal Share (50%) $_______________________ $_______________________ Federal Total $_______________________ $______________________ State Share (50%) $________________________ $_______________________ State Share (25%) $________________________ $_______________________
Program Income $_______________________ State Total $________________________ $_______________________ Grand Total $________________________ $_______________________ In-Kind Assistance $____________________
“within the federal share indicated above, in-kind assistance thru federal procurement procedures of $1,000 is being withheld and designated specifically.”
Total AFP and allotment remain the same, in-kind assistance is increased.
1,000.00

32. PROCESSING IN-KIND ASSISTANCE (Continued)
Accountability of cost shared CA.
The USPFO notifies the State of the State’s cost share
State credits the amount against the costs claimed for reimbursement under that agreement on the next voucher submitted.
Ohio: We lease the Docu-tech printers from a GSA schedule (which is much cheaper than the state could get), it is on a Information Services appendix which is 93/7, and 96/4 (color printer) appendix.
Once the docu-techs are leased, we inform the state what their portion of the cost is and the states share of the cost is reflected on their next request for reimbursement.

33. MANAGEMENT CONTROLS (Continued)
Is In-Kind Assistance approved by the USPFO as an exception?
Has the CA been modified converting cash contribution to IKA with no change in total value? Validate that any State Share is applied on future reimbursement.

34. CASE STUDY
WE HAVE ONE CASE STUDY THAT I WOULD LIKE TO GO OVER.

35. CASE STUDY MODULE # 7
The 133rd ARW (NG) Base Civil Engineer has notified NGB ANG/CE that a requirement exists to purchase contract training for maintenance state employees (FOMA) on a new fire suppression system installed at the wing. The message further stated that the training would be purchased using an Air Force contract in the approximate amount of $4, The Wing is to use existing funds contained within the FOMA (75-25), with the understanding that they will be reimbursed at mid-year.
What steps are required to make this happen?
Are there any concerns that should be addressed relative to this action?

36. IN KIND CONTRIBUTION BY STATE

37. COST SHARE DEFINITION Cost share occurs when the Federal
Government is not funding 100% of the
activity
Cost share is also known as
> Matching share
> Match
> Matching funds

38. COST SHARES Cost share is set by NGB or legislation Appendices
NGR 5-1/ANGI
Read each appendix to see what the cost share will be.
For ARNG - FMO sets FISP code for each bldg & parcel of land and based on this code is what the share will be.
For ANG - the share is based upon unit missions.

39. OTHER COST SHARE REFERENCES:
GAO Principles of Federal Appropriations Law-Vol II
Department of Defense Grants & Agreements Regulation (DoDGARS) R
NGB Cooperative Agreement and Support Agreement Handbook (CASA)
GAO - Vol II, Chapter 10: Fed Assistance: Grts & Coop Agmts,
mentions Hard & Soft Matches. A hard match is dollars for dollars, a soft match is other than dollars, usually supplies or services provided by the State or third party.

40. RECIPIENT’S COST SHARE CAN BE:
HARD MATCH
SOFT MATCH
GAO - Vol II, Chapter 10: Fed Assistance: Grts & Coop Agmts,
mentions Hard & Soft Matches. A hard match is dollars for dollars, a soft match is other than dollars, usually supplies or services provided by the State or third party.

41. HARD MATCH Hard Match is strictly cash contribution.
The only hard match required in CA is MILCON for Armories per 10 USC The land has to be State owned and its value cannot be part of the match.
GAO - Vol II, Chapter 10: Fed Assistance: Grts & Coop Agmts,
mentions Hard & Soft Matches.
A hard match is dollars for dollars, a soft match is other than dollars, usually supplies or services.
Armories are usually built at 75/25 split.

42. SOFT MATCH
All other CA’s, unless specified by legislation, are soft match and the State can contribute other than cash in the form of supplies or services (allowable costs only).
For Hard or Soft match, the State cannot use funds received from another Federal grant to meet their matching requirements under the CA program nor can they use our Fed funds to match in other programs.
Soft match is also called In-Kind CONTRIBUTION. They may be provided by the State or other Third Party for services, real or personal property, or equipment.
All contributions must be valued as “fair and reasonable” and valued per DoDGARs
Program Income cannot be substituted for the State share.
Youth Challenge (4002), Sect states that the SMD Quartermaster or Compt shall certify the dollar value of supplies/services being provided as In-Kind Contribution ILO of cash. The USPFO reviews those certifications to ensure they meet or exceed the State’s minimum share.
NOTE: Read each appendix to see how this is addressed.

43. VALUE OF STATE IN-KIND CONTRIBUTION:
Value assessed per DoDGARS 33.24
Assessed value of contribution must be valued at a “Fair & Reasonable” amount that can be be verified by State’s records.
For Hard or Soft match, the State cannot use funds received from another Federal grant to meet their matching requirements under the CA program nor can they use our Fed funds to match in other programs.
Soft match is also called In-Kind CONTRIBUTION. They may be provided by the State or other Third Party for services, real or personal property, or equipment.
All contributions must be valued as “fair and reasonable” and valued per DoDGARs
Program Income cannot be substituted for the State share.
Youth Challenge (4002), Sect states that the SMD Quartermaster or Compt shall certify the dollar value of supplies/services being provided as In-Kind Contribution ILO of cash. The USPFO reviews those certifications to ensure they meet or exceed the State’s minimum share.
NOTE: Read each appendix to see how this is addressed.

44. EVALUATING STATE IN-KIND CONTRIBUTION PER DODGARS 33.24:
For donated services:
(1) Volunteer Services-valued at rates consistent with those ordinarily paid for similar work in State’s organization or similar to labor market if State doesn’t have this type of employee.
(2) Other Organization’s Employees-valued the employee’s regular rate of pay (for same type of work) exclusive of Fringe Benefits and Overhead Costs.
For Hard or Soft match, the State cannot use funds received from another Federal grant to meet their matching requirements under the CA program nor can they use our Fed funds to match in other programs.
Soft match is also called In-Kind CONTRIBUTION. They may be provided by the State or other Third Party for services, real or personal property, or equipment.
All contributions must be valued as “fair and reasonable” and valued per DoDGARs
Program Income cannot be substituted for the State share.
Youth Challenge (4002), Sect states that the SMD Quartermaster or Compt shall certify the dollar value of supplies/services being provided as In-Kind Contribution ILO of cash. The USPFO reviews those certifications to ensure they meet or exceed the State’s minimum share.
NOTE: Read each appendix to see how this is addressed.

45. EVALUATING THIRD PARTY IN-KIND CONTRIBUTION PER DODGARS 33.24:
For donated supplies & loaned equipment or space where title does not pass to grantee or subgrantee:
(1) Value of supplies will be market value at time of donation
(2) Value of equipment or building space will be at fair rental rate of that equipment or space.
For donated equipment, buildings, and land:
If a 3d party passes title to grantee or subgrantee,
the treatment of the donated property depends on the purpose of the grant. (See DoDGARS 33.24)
For donated real property for construction/acquisition-see
DoDGARS
For Hard or Soft match, the State cannot use funds received from another Federal grant to meet their matching requirements under the CA program nor can they use our Fed funds to match in other programs.
Soft match is also called In-Kind CONTRIBUTION. They may be provided by the State or other Third Party for services, real or personal property, or equipment.
All contributions must be valued as “fair and reasonable” and valued per DoDGARs
Program Income cannot be substituted for the State share.
Youth Challenge (4002), Sect states that the SMD Quartermaster or Compt shall certify the dollar value of supplies/services being provided as In-Kind Contribution ILO of cash. The USPFO reviews those certifications to ensure they meet or exceed the State’s minimum share.
NOTE: Read each appendix to see how this is addressed.

46. MODULE TEACHING POINTS
HARD/SOFT MATCH
Is Soft Match valued per
DODGARS R?

47. QUESTIONS ___________________________________________________
____________________________________________________