Head Start Non-Federal Share (“In-Kind”) FAQ

OZARK OPPORTUNITIES, INC. 701 E. PROSPECT P.O. BOX 1400 HARRISON, ARKANSAS 72602 (870) 741-9406 FAX: (870) 741-0924

Based on notes from WipFli Head Start Finance Training; Nov. 2012

Why do we need In-Kind?
  • It is required by the H.S. Act– Signed into law in 1964
  • Shows local Community Participation in the HS Program
One important question when counting something as In-Kind:

How does this directly benefit the program?

o Timing also matters – “Needs to benefit the program during the project period”

Costs that are reasonable and necessary to a HS program from a non-Federal source:
  • Would your agency pay out of Federal funds for those items that you are claiming as Non-Federal share?
  • Would you pay the amount in cash that you are claiming as non-Federal share?
Criteria for Acceptable Non-Federal In-Kind:
  • Are verifiable from the recipient’s records
  • Are not included as a cost or match to any other Federally-funded program
  • Are necessary and reasonable for accomplishment of program objectives
  • Are allowable under applicable cost principles
  • Are not financed by any other Federal program
  • Are provided for in the approved component plan/budget
  • Benefits the program during the project period
In-Kind match is 20% of Total Funding or 25% of Federal Funding:

It is great if Non-Federal share is greater than what you need – Just report what you are required to report; but you need to track the in-kind within your agency and know what you have and know if you are over.

Reasons for accounting for all Non-Federal In-Kind:
  • To be able to match additional funding (expansion, one-time, etc.)
  • To replace in-kind that is later questioned or disallowed
Consequences of Not Meeting In-Kind Requirements:
  • Repayment of Federal funds expended, that were not properly matched
  • Reduction in future Head Start funding, if unable to provide sufficient non-Federal share
  • Inability to qualify for expansion or one-time fundin
Three Main Types of In-Kind:
  • Repayment of Federal funds expended, that were not properly matched
  • Reduction in future Head Start funding, if unable to provide sufficient non-Federal share
  • Inability to qualify for expansion or one-time funding
Use of Space as In-Kind:
  • Fair market value
  • Appraisal – Required by regulations (Have to have a certified appraisal) Not a real estate agent
  • Update appraisals every 3 to 5 years
  • Include everything being donated (Utilities, maintenance, playground, lunchroom, etc..)
Use of Space – You Own the Building:
  • Cannot be purchased with Federal Funds
  • Calculate a “depreciation and use allowance”
  • Calculation should be adjusted for square footage occupied by the Head Start Program
Volunteer Requirements:
  • Services provided
  • Qualifications
  • Rate comparable to paid employees
  • Fringe benefits
  • Documentation

NOTE: Responsibility should be on classroom staff to get the In-Kind, not on the fiscal department.


Head Start programs must use volunteers to the fullest extent possible. Head Start grantees must develop and implement a system to actively recruit, train, and utilize volunteers in the program.

Special efforts must be made to have volunteer participation, especially parents, in the classroom and during group socialization activities.

How one agency turned their program around- They called it Parent Engagement rather than Volunteers and they had more people turn out.

“Volunteer means an unpaid person who is trained to assist in implementing ongoing program activities on a regular basis under the supervision of a staff person in areas such as health, education, transportation, nutrition, and management.”

Volunteers Documentation
  • Donated Time
  • Volunteer’s name
  • The dates, including year, the volunteer provided services
  • The duration of time of services the volunteer provided to the program (Show Time In/Time Out is a better record than just the total hours worked)
  • The volunteer’s supervisor’s signature
  • The volunteer’s signature
  • The volunteer activity
  • The rate applied to this activity
  • Total valuation for the time period
Volunteer Rate Calculation

“Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is a necessary part of any approved project or program. Rates for volunteer services shall be consistent with those paid for similar work in the recipient’s organization. If those instances in which the required skills are not found in the recipient’s organization, rates shall be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved.”

A volunteer’s rate should be determined based on the nature of the work being done and the experience and education brought to the job by the volunteer. A program may include, in this valuation, a fringe benefit rate for the volunteer that is comparable to the grantee’s average fringe benefit rate.

Volunteers Parent Time:

“Allowability of parent volunteer time is based upon whether the parent is giving a service to the grantee or receiving a service from the grantee. For example, time spent by parents in special programs such as literacy is unallowable because the parent is not providing a service to the program. Time spent by a parent working in the classroom is allowable because a service is being provided to the program.”

Volunteers Reduced Rates:

“Consultants and other individuals may provide their services to a program at a reduced rate. The difference between this reduced rate and the amount normally charged by the individual may be used as in-kind. The grantee should have a written agreement with the individual, which will document the reduction, and documentation should be maintained of the services provided. This may be in the form of an invoice or other grantee developed form.”

Is the value of parent involvement in a HS program an allowable cost for In-Kind match?

Two types of Parent Involvement:

A) Primarily benefit the parent and their child– Not Allowable

B) Provide a good or service to benefit the program– Allowable

Examples of providing a good or service to benefit the program which are allowable:
  • Participation in a Health Services Advisory Committee or other Advisory Committee
  • Participating in outreach effort for recruitment
  • Participating in community partnership with other parent or community members
  • Supporting a “lending library”, health fair or other program activity
  • Providing assistance in a classroom or on a field trip
  • Reviewing (meal) menus for the program
  • Participating in an employment interview
What types of activities between an enrolled Head Start child and that child’s parent(s) or guardian(s) can be conducted in the child’s home and counted, by the Head Start program, as non-Federal share?

If a Head Start child’s teacher (or home visitor) provides the child’s parents with written plans or guidance as to the types of activities that need to be done with the child at home in order to support the child’s Head Start experience these activities may, when fairly valued, be counted as Non-Federal share. The “countability” of the parent’s efforts hinge on doing things with the enrolled child that support the child’s Head Start experience, that are articulated by the teacher (or home visitor) and that support the curriculum used by the program. General parenting duties do not constitute activities that can be counted as non-Federal share, unless these activities meet the requirements noted above. The valuation of the parent’s time should, unless a program can demonstrate otherwise, be valued at the rate of a teacher’s assistant.

May HS agencies claim Non-Federal match for the value of the volunteer services of governing body and policy council members? (YES), Head Start agencies may claim non-federal match for the value of the volunteer services of governing body and policy council members. (NOTE; according to Region 6 Finance Symposium, we can only count the time of the Policy Council, and NOT the Governing Board- RTA)

Policy Clarifications Relating to In-Kind:
  • Can staff give in-kind?- Yes; but calculation for time gets tricky.
  • Grantee owned facility as in-kind? Use depreciation or use allowance.
  • In-kind activities in the home? Written plan or part of curriculum.
  • Valuing parent volunteer time (D-006)? Equal to cost of employee.
  • Grantee owned land as in-kind (H-002)- Amortized.
  • Describing volunteer activities (D-013, G-006, J-007).
  • Donating clothing– sent home= No; Used in classroom= Yes.
  • Walking children to school as in-kind (D-019, L-014)- No.
  • Combining HS/EHS for admin. limit and in-kind- Include all if on same award.
  • Blended state funding as in-kind? Yes; but not tied to fed. funds.
  • Home based in-kind activities between visits? (D-021)- Curriculum.
  • Total costs and administrative cost limit- Includes all.
  • Recording excess in-kind?- Yes.
  • Receipts for purchases donated? Reasonably documented.
  • Vendor discounts as in-kind- No.
  • Including fringe benefits in valuing volunteer in-kind- Yes.
  • Transportation to group socialization as in-kind- Yes.
  • Wage comparability differences as in-kind- No.
  • Transportation costs of children as in-kind- No.
  • State scholarships as in-kind- No; it benefits the individual.
  • Foster Grandparent volunteers as in-kind- Subtract stipend.
  • Transporting home-based children to socialization activities as in-kind- Yes.
  • Books given to children at year end as in-kind- Yes.
  • Parents having lunch with children as in-kind- No.
  • Time spent by Policy Council members in training or conferences as in-kind- Yes.
  • Special Education services provided by local school system- Yes.
  • Babysitting while Head Start mother is volunteering- Yes.
  • Parent involvement in Head Start program- Depends on who gets benefit.
  • Governing Body and Policy Council time- Yes for P.C.; (No for Governing Body- RTA)
  • Parent transportation as in-kind- No.
  • Transportation by school district as in-kind?- Yes, if meet transportation regulations.

The time spent by parents on fundraising activities is unallowable as match because fundraising is specifically unallowable under the OMB Cost Principles

o However, expenditure of the proceeds is allowable when expended for allowable program costs.

Cash Contributions:

In-kind when spent on an allowable cost that is part of an approved Head Start activity.

What About E-Rate?

Generally NO; If a Head Start program is receiving a discount that the vendor is making available to other similar organizations this would not be considered a contribution to Head Start and could not, therefore, be counted as non-federal share. If, on the other hand, the vendor is selling a product to Head Start at a reduced cost because the vendor wants to support the Head Start program and if that discount is not generally available to other organizations and the vendor is willing to provide the Head Start program a letter stating the lower price is because the vendor wishes to support the program, the discount can be counted as non-federal share.

  •  Insufficient NonFederal Share “In-Kind” amount
  • Lack of documentation
  • Overvaluation of volunteer time
  • Lack of appraisals for donated use of third party space
  • Unallowable costs (fund-raising, parenting, etc.)
  • Improper valuation of space owned by the grantee (actual costs vs. fair market value)
  • Sources of in-kind not included in application and approved grant award
  • In-kind from previous grant years