Guidance for Smith-Lever Funding
A significant portion of our budget at the Division of Extension consists of Smith-Lever funding, which is a federal grant awarded to Land Grant institutions. All Smith-Lever funding at UW-Madison is designated as Fund 143, FD0143 in WorkDay.
When spending Smith-Lever (143) funds, it is important to remember that all Smith-Lever (143) projects are federally sponsored. The following guidelines apply to expenses on all federally sponsored projects:
- Expenses must be allowable.
- Expenses must be necessary for and provide direct benefit to the project.
- Expenses must be directly allocable.
- Expenses must be reasonable.
- Expenses must be non-personal in nature.
In response to our most recent audit conducted by USDA-NIFA, we are providing the following guidance to reinforce requirements specific to the utilization of Smith-Lever funds:
1) Extension events supported with Smith-Lever funding should only include meal and/or break expenses that are necessary to conduct Extension business. These expenses should not include group breakfast or dinner charges.
NIFA’s Federal Assistance Policy Guide, effective April 21, 2021, provides the following guidance:
When considering the allowability of meals or food as part of a meeting or conference, it is important to use the basic consideration in the cost principles. Questions to ask include:
- Is food necessary for continuity to achieve goals? In general, NIFA does not consider breakfast, dinner, or receptions as allowable as they are not typically necessary for continuity of the meeting. However, there are exceptions depending on the meeting agenda and whether it supports the continuity justification.
- Is the food/meal a reasonable cost?
- Is it 100 percent allocable to the award? The meeting or conference agenda can be used to demonstrate allocability.
Costs must be consistent with institution policies and procedures and supported with documentation to demonstrate the above considerations.
2) All expenses charged to Smith-Lever funds must be directly allocable.
A cost is allocable to a project if goods and/or services involved are chargeable and assignable in accordance with the relative benefit to each project. This means that any cost charged to 143 funding needs to benefit Extension programming and Extension’s Plan of Work. Specifically, if a cost is split between Smith-Lever funding and other funding, a reasonable calculation must be documented and used to allocate the cost across the different funding sources based on the relative benefit to each funding source.
3) Any expense charged to Smith-Lever funds must provide a direct benefit to Extension programming. The benefit/business purpose of any expense for Extension programming should be clearly described in every payment mechanism.
This includes expense reports (travel reimbursements), P-Card expenses, expenses processed through ShopUW+ (orders, requisitions, direct payments, payments to individuals), direct payments to supplies/vendors, and payments to individuals. Examples of acceptable explanations/justifications are included below:
- Office Supplies for Jane Smith, Extension Ag Educator, to be used in support of Extension Agriculture Outreach Programs.
- Mileage for Steve Wilson, Extension Community Development Educator, to attend Economic Development Conference as professional development to benefit Extension Community Development programming.
4) Unallowable Costs - Below are examples of expenses that are unallowable on Smith-Lever funding:
- Indirect costs and tuition (including tuition remission)
- Facilities maintenance, structures, or improvements. Smith-Lever funds may not be used to renovate or refurbish research, education, or extension space. The funds cannot be used to purchase or install fixed equipment in such space or plan, repair, rehabilitate, acquire, or construct buildings or facilities.
- Equipment with a per unit value of over $5,000 is unallowable unless prior federal approval is obtained. Contact Office of Financial Services (OFS) with any questions.
- Since these funds are intended to support Wisconsin and multi-state Extension programs, foreign travel is generally unallowable on Smith-Lever funds.
- Promotional items and clothing