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Technical Assistance on Paragraph C.6. of Grant Contracts

Many agencies have had questions about how paragraph C.6.
works as recently many agencies got burned by spending money on items that were not covered while under the impression that they would be covered under the 20% rule. The two metaphors below will help explain how rule C.6. works.

Metaphor: School Supplies and Classroom Cabinets

Imagine you're a teacher in charge of a classroom with a cabinet that has 12
drawers, each labeled for different school supplies: markers, paper, glue, etc.
This cabinet represents the Summary Budget where each drawer has a specific amount of money allocated for each type of supply.

Moving Supplies Between Drawers:
Throughout the school year, you might find that you need more markers but
fewer papers. So, you can move some funds from the paper drawer to the
markers drawer to buy more markers. This is like shifting funds between
line items in the summary budget—flexible and responsive to your needs as
long as you don't exceed the total amount allocated for all supplies.

Inside each drawer, there’s a detailed list specifying the types of each
supply: for example, the marker drawer might specify 10 red markers and 10
blue markers. This list represents the Detailed Budget. Here, even if you
realize you need more red markers and fewer blue, you can't shift funds
specifically allocated for blue markers to red markers. The list specifies
exact amounts and types, mirroring the fixed nature of each line item in
the detailed budget.
Purpose and Flexibility: Just like in the budget, the drawers (summary budget) allow you some flexibility to adapt to the classroom’s changing needs throughout the year, but the specific items listed inside (detailed budget) ensure that
funds are spent exactly as intended for precise needs, without deviation.

An alternative way to consider the issue:

Metaphor: School Cafeteria Meal Plans and Ingredients

Imagine your school cafeteria offers a meal plan for students that includes
a variety of dishes across 12 different categories—like pizzas, sandwiches,
salads, etc. This menu represents the Summary Budget, where each category has a certain budget allocated for
the month.

1. Adjusting the Menu: If more students start ordering pizzas and fewer are interested in sandwiches as the month progresses, the cafeteria manager can shift some of the funds
from the sandwich budget to the pizza budget. This flexibility helps meet
the demand without exceeding the total budget for the month, similar to
reallocating funds between line items in the summary budget.
2. Fixed Ingredients:
Each dish category has a specific recipe that lists exact ingredients—like
how many tomatoes, slices of cheese, or loaves of bread are needed. This
recipe list is akin to the Detailed Budget. Here, the manager cannot decide to use the tomatoes allocated for salads in extra pizzas instead. Each ingredient's
quantity is fixed for its specific dish, reflecting how each detailed line
item in the budget is precisely allocated and cannot be shifted.
3. Balancing Flexibility and Specificity: The cafeteria's overall menu (summary budget) allows the manager to adapt to changing student preferences and manage resources efficiently. However, the specific recipes (detailed budget) ensure that each dish is prepared
according to a predetermined standard, ensuring consistency and adherence
to nutritional guidelines.

This analogy highlights the balance between adaptability in the broader
budget allocations and the strict adherence to detailed spending, mirroring how
funds can be managed within different levels of a grant budget.

Analogies courtesy of Chat GPT.


If you have any questions, please email