Date Published: February 2015
Employee compensation (including fringe benefits such as holiday, vacation, sick leave) and other overhead costs directly related to carrying out activities eligible under an ESG component are eligible costs under that component (see 24 CFR § 576.100(d)). Determining how these staff costs should be allocated will depend on the type of assistance being provided to the program participant.
To allocate these costs, first determine the program component under which these costs fall; then allocate the costs to an activity within the component. For example, staff time expended on processing checks for utility payments for program participants could be eligible under the rapid re-housing component or the homelessness prevention component; the activity would be housing relocation and stabilization services.
For the salaries and related costs of staff that are not fully dedicated to a particular component, costs should be reimbursed in proportion to the actual hours worked on each ESG component. A staff position that is not fully dedicated to ESG cannot be paid solely through ESG funds.
For example, if an accountant spends 100 percent of his/her time tracking rental assistance or security deposits for homelessness prevention activities, then paying for this time is allowable under the homelessness prevention component because the accountant's time is only spent working on a single component. Alternatively, the cost for an accountant to process checks for both the homelessness prevention and rapid re-housing components must be pro-rated by each component. Also, the accountant's time preparing an invoice to obtain ESG funds from the recipient (or, for a recipient, a staff member's time drawing funds in IDIS) would be an administrative cost. Therefore, recipients or subrecipients must break out the accountant's time based on the activities performed.
Other overhead costs, such as rent for office space, photocopier costs, and lighting and utilities for an office, could be eligible either as a direct cost charged to one or more components, depending on the activities delivered by that office, or could be charged as an indirect cost if part of an indirect cost allocation plan.
Additionally, please be aware of the following:
In terms of how to track staff time, the exact methodology for tracking the time that staff worked on federal grants, and on components and activities within a federal grant, is at the discretion of the recipient. However, recipients and subrecipients must be able to sufficiently document the actual time charged to federal grants and the methodology used, which must be reasonable and justifiable. The OMB guidance does not require that recipients track actual time by ESG component and activity, but there must be a methodology in place to estimate time allocated to components because of the statutory caps in place on street outreach and emergency shelter, and administration. Additionally, because of the CAPER reporting requirements, there must be a methodology in place to estimate time allocated to activities within a component. While actual time is preferred, any estimates must be a realistic reflection of actual time spent across ESG components and activities.
Timesheets that capture actual time spent on specific programs are the most straightforward way to meet time reporting requirements. However, other approaches may be acceptable as long as they meet the guidelines established in Circular A-87 Appendix B(8)(H) for States or units of local government or Circular A-122 Appendix B(8)(m) for nonprofit organizations, or the OMB OmniCircular, at 2 CFR part 200, as applicable.