- Question: What is the definition of supplement not supplant?
Answer: Workforce Investment Act (WIA), Title II: Adult Education and Family Literacy Act (AEFLA) states that the AEFLA funds must supplement and not supplant other state or local public funds expended for adult education and literacy activities. (AEFLA Section 241[a])
- Question: What is the purpose of the supplement not supplant provision under the AEFLA?
Answer: The purpose of the AEFLA supplement not supplant provision is to ensure that state and local funds for the AEFLA programs are not replaced by AEFLA funds. An AEFLA provider must use AEFLA funds only to supplement state and local funds available from non-federal sources for the education of students participating in AEFLA programs.
- Question: What situations would suggest supplanting has taken place within my AEFLA program?
Answer: A supplanting violation is presumed when an AEFLA provider uses AEFLA funds to provide services that are required to be made available under state or local laws. The Office of Management and Budget (OMB) Circular A-133 Compliance Supplement presumes supplanting in the following situations:AEFLA funds used to provide services that the AEFLA provider is required to make available under other state or local lawsAEFLA funds used to provide services that the AEFLA provided with state or local funds in the prior year.
- Question: How can an AEFLA provider determine if a supplanting violation has occurred?
Answer: To determine whether a supplanting violation has occurred, the AEFLA provider must ask these two questions:
Is the program or activity that the district wants to fund required under state or local law?
Were state or local funds used in the past to pay for this program or activity?
If you answered yes to any of these questions, your agency is at risk of supplanting.
- Question: What tests do auditors use to determine if unlawful supplanting has occurred?
Answer: There are two tests that auditors use to determine the appropriate use of AEFLA funding:
Comparison of Prior Year adult literacy funding activity—Test one examines fiscal records to determine if AEFLA funds were used to fund an adult literacy activity that was previously funded by state or local funds. In other words state or local funds which previously funded adult literacy activities may not be diverted to another purpose simply because of the AEFLA funds are now available. An AEFLA provider that receives AEFLA funds must verify that all costs paid for with these funds are an addition to what the agency already provides with state and local funds.
Review of state and local law—Test two looks to see if the AEFLA funds were used to pay for an activity required under state or local law. An auditor will look at all costs paid for with AEFLA funds and review state statutes and local ordinances and other requirements to determine if any of the activities in question were required under state or local law.
- Question: How do AEFLA providers rebut the presumption of supplanting?
Answer: An AEFLA provider may rebut the presumption of supplanting by providing the following documentation:
Reduction—The AEFLA provider must demonstrate through documentation that there was a reduction in the amount of state and local funds available to pay for the activity. The documents that can be used for this purpose are budget, accounting ledgers, payroll records (including sources of salary funds), legislation and statutes showing reduced funding allocations from year to year.
Elimination—The AEFLA provider must demonstrate through documentation that the decision to eliminate the adult literacy activity without taking into consideration the availability of AEFLA funds. These documents must be in the form of minutes from board meetings, internal memoranda, board resolutions, and proposals, as well as other documentation indicating the AEFLA provider made cuts across the board in activities or positions supported with state and local funds.
Allowable—The AEFLA provider must demonstrate through documentation that activity that is now paid for with the AEFLA funds is allowable under the AEFLA, and consistent with all the AEFLA fiscal and programmatic requirements. Such documentation would consist of program statutes detailing allowable uses of funds, descriptions of employee responsibilities, time distribution records, contracts, purchase orders and invoices, and other documentation detailing the procurement process.
- Question: How long must agencies retain the documentation?
Answer: Agencies receiving AEFLA funds must maintain auditable records on file for a specified time as outlined in Education Department General Administrative Regulations (34 Code of Federal Regulations Section 80.42[b]). This section applies to all financial and programmatic records. The length of the retention period for records shall be for a minimum of three years after the submission of the last expenditure report for that period.
- Question: Are there different rules for local educational agencies, postsecondary institutions, and nonprofits in the application of the AEFLA supplement not supplant provision?
Answer: No. The AEFLA makes it very clear that all providers, including postsecondary institutions and nonprofits are subject to the same rules and must not supplant state or local funds.
- Question: What if two years ago, a salary was paid with AEFLA funds, and the funding source last year was shifted to non-federal funds; can I lawfully shift it back to AEFLA funds?
Answer: No. That would create the presumption of unlawful supplanting because compliance with the law examines the present year to last year.