Financial Management Resources
Adult Education grantees and providers are required to spend funding on adult education program expenses and document those expenses for review by the Minnesota Department of Education (MDE) and other oversight entities. Grantees must use the “Uniform Financial Accounting and Reporting Standards” (or UFARS) to define funding and expense categories. Extensive, current information about UFARS can be accessed at the link below.
Grantees must also adhere to all requirements and restrictions on how funding is spent, including caps on spending for administrative expenses and indirect costs.
UFARS Basics for Adult Education programs
Uniform Financial Accounting and Reporting Standards, or UFARS, is a system of accounting codes that must be used by all grantees to track revenue and expenditures. This requirement exists to insure accurate financial reporting data and promote accountability for the use of public funds.
UFARS Finance (FIN) codes for Adult Education funds
- FIN 322: State Adult Education aid to consortia
- FIN 438: Federal Adult Education aid to consortia
- FIN 801: IELCE grants
- FIN 803: Supplemental Service grants
UFARS Object (OBJ) codes
UFARS Object (OBJ) codes refers to services or products purchased. Many OBJ codes are relevant to Adult Education, including:
- 100 series: Salaries and Wages
- 200 series: Employee Benefits
- 300 series: Purchased Services
- 400 series: Supplies and Materials
To see a detailed list and explanation of all OBJ codes, reference Chapter 5 of the UFARS manual.
To see a complete list of which OBJ codes are allowable for Adult Education FIN codes, reference Chapter 10 of the UFARS manual.
Administrative costs
Adult education grantees can spend small amounts of grant funding on administrative expenses.
For State ABE funds (FIN 322), Admin expenses are capped at 5% of the grant total. For these grants, the 5% limit is applied specifically to OBJ code 110, which is the code used for salary paid to an administrator who does not oversee the day-to-day operations of the ABE program (often a superintendent, community ed director or executive director). Note that OBJ code 120 should be used for the salary of the ABE manager or coordinator, who has the responsibility of supervising staff and overseeing daily operations. There is no cap on the percentage of the grant that may be spent on OBJ code 120.
For Federal ABE funds (FIN 438) and IELCE funds (FIN 801), there is a general cap of 5% for admin expenses, but it is allowable for a program to negotiate a higher rate if it is reasonable. In addition, for these grants, WIOA/AEFLA requirements outline which costs should be included in Admin. The document linked below can help grantees calculate admin costs for these federal grants.
Administrative Cost Calculations for AEFLA Grants
- Format:
- Excel
Indirect Cost Rates
Grantees are able to directly negotiate a restricted indirect cost rate for federal funding with the U.S. Department of Education. This restricted indirect cost rate can be used for federal adult education grants (e.g. FIN 438 and FIN 801). A restricted indirect cost rate is different than an indirect cost rate generally approved by other federal agencies. School districts typically do have documented restricted indirect cost rates negotiated with the U.S. Department of Education and documented with MDE. For grantees that are not school districts (e.g. nonprofit organizations) and do not have a restricted indirect cost rate negotiated with the U.S. Department of Education, they should default to a max rate of 8%.
Indirect cost rates are not allowed for state adult education funding (FIN 322).