Fiscal Compliance and Reporting

The Division of School Business (Division) oversees subrecipient activities to determine compliance with certain fiscal requirements designed to ensure that federal grant funds are expended in the manner specified by the grant program. The Division is tasked with ensuring that the agency is in compliance with the following reporting requirements for recipients of federal funds.

Tab/Accordion Items

System for Award Management

In order to receive federal funds as subrecipient, an organization must have a DUNS number and active System for Award Management (SAM) registration at the time of application.

  • The DUNS number is a nine-digit identification number that uniquely identifies business entities. Obtaining a DUNS number is free and is requested at the D&B D-U-N-S Request Service for US Federal Government Contractors and Assistance Awardees website.
  • System for Award Management (SAM) - The DUNS number is used to register in the System for Award Management in order to be able to submit an application.

Recipients of federal funds must maintain an active registration in SAM. Failure to maintain a current SAM registration will result in the subrecipient's funds being frozen until registration is renewed. Funds will only be released upon verification of renewal of SAM registration for an expired subrecipient.

The US Department of Education (USDE) has given DPI authority to issue indirect cost rates for Local Education Agencies (LEAs), including the regional school, lab schools, and charter schools.

Grantees that receive their indirect cost rates from DPI use the rates to recover organization-wide administrative costs of managing federal grants, such as costs related to accounting, budgeting, purchasing, auditing, and payroll processing.

Future and Current Indirect Cost Rates for LEAs, Charter, Regional and Lab Schools




Please contact School Business at 984-236-2440 for prior-year rates.

LEAs and charter schools, must follow certain federal requirements when accepting federal funds. LEAs and charter schools must follow the federal requirements under the No Child Left Behind Act (NCLB), reauthorized as the Every Student Succeeds Act (ESSA), which include maintenance of effort (MOE), carryover, comparability of services, supplement not supplant, and transferability.

Maintenance of Effort

Maintenance of Effort (MOE) is a federal requirement that requires grant recipients and /or subrecipients to maintain a certain level of state/local fiscal effort to be eligible for full participation in federal grant funding.

MOE requirements specify that recipients of a federal grant awarded under ESSA/NCLB must spend at least 90% of state and local funds for free public education as spent in the previous fiscal year. MOE requirements must be met in order to receive full allocation for ESSA/NCLB covered programs. The Division of School Business automatically calculates MOE for LEAs and charter schools on an annual basis. Any entity failing to meet MOE will be issued a notification of noncompliance, communicating the amount of shortfall (percentage) that the next year's allotment will be reduced.

An LEA/charter school that fails to meet the MOE requirement may request a waiver from U.S. Department of Education, as described in the following section. Please note that DPI has no authority to waive the MOE requirement and has no input into the U.S. Department of Education's decision regarding LEA/charter school waiver requests.

Requesting a U.S. Department of Education Waiver to MOE Requirement:

To request an MOE waiver from the U.S. Department of Education, the LEA/charter school must write a letter outlining the reason(s) the LEA/charter school did not maintain effort and email it to The Division of School Business will forward the waiver to the U.S. Department of Education. If the waiver request is approved, the Division will notify the LEA/charter school in writing that the full allocation will be received.

Carryover Funds

No more than 15 % of the Title I, Part A funds allocated to a district for any fiscal year may be carried over into the next fiscal year. Funds in excess of 15% must be encumbered or expended by September 30 of each year. An LEA may submit a written request to NC DPI to waive the ESEA limit. For additional information and a sample template, see Carryover Limitation information on the Federal Programs Educational Flexibility webpage.

Comparability of Services

Comparability of services is a fiscal requirement for recipients for Title I, Part A funds under ESSA/NCLB. LEAs that receive Title I, Part A funds must use their state and local funds to provide comparable services at their campuses receiving Title I, Part A funds compared to campuses that are not receiving Title I, Part A funds. For more information, please see the Comparability Resources available on the Federal Programs Title I Resources webpage.

Supplement, Not Supplant

To ensure that funds made available under Title I Part A are used to provide services that are in addition to the regular services normally provided by a school district for participating children, the district must use these funds to supplement and not supplant regular non- Federal funds.


Transferability is a flexibility authority under ESSA that permits SEAs and LEAs to transfer a portion of the funding they receive by formula under selected Federal programs to their allocations under other programs in order to most effectively address their needs. North Carolina's Elementary and Secondary Education Act Flexibility Waiver allows an LEA to transfer up to 100% of the funds it receives under authorized programs into Title I, Part A. LEAs/charters are permitted to transfer funds from Title II, Part A to Title I, Part A, but never out of Title I, Part A.

Transferred funds are subject to the requirements of the program to which they are transferred. LEAs must submit a budget amendment in BAAS for approval. The Chart of Accounts (COA) includes two accounts to assist in tracking transfers "in" and "out" of federal budgets using the following codes:

3-8100-PRC*-721 Transfer In (carries a credit balance)

3-8100-PRC*-722 Transfer Out (carries a debit balance)

*PRC is Program Report Code

Transferability requires LEAs/charter schools to be responsible for drawing funds from the original grant allocation. Therefore, a 202 expenditure adjustment must be submitted for every cash request applicable to the transferability authority.

LEAs and charter schools, must follow certain federal requirements when accepting federal funds. Under the Individuals with Disabilities Education Act of 2004, Part B (IDEA-B), the federal requirements the LEAs and charter schools must follow include maintenance of effort (MOE) and excess costs.

IDEA-B Maintenance of Effort

LEAs and charter schools must not reduce the level of expenditures for the education of children with disabilities from State and/or local funds below the level of those expenditures for the preceding fiscal year without allowable justification. LEAs and charter schools must meet MOE requirements in order to be eligible to receive IDEA-B grant funds. For more information, including the IDEA MOE Calculation form, please visit the Exceptional Children Finance and Grants Fiscal Monitoring webpage.

Excess Cost

Excess costs are the costs of providing special education and related services to students with disabilities, over and above the average expenditure in a local educational agency (LEA) for an elementary or secondary student. These costs are calculated each year based on expenditures from the most recent prior school year. If your organization receives a federal grant awarded under the Individuals with Disabilities Education Act, Part B (IDEA-B), those funds must be used to pay the excess cost of providing special education and related services to students with disabilities (34 CFR §300.202(b)). Except under conditions described in 34 CFR §300.202 (b)(1)(ii), the excess cost requirement prevents the use of IDEA-B funds to pay for the entire cost of providing services to students with disabilities. Your organization meets the excess cost requirement if at least a minimum average amount is spent for the education of students with disabilities before IDEA-B funds are spent.

The Excess Cost Worksheet should be completed by the program director in conjunction with the finance officer to be retained at the LEA or charter school for audit purposes.