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Understanding Non-Federal Match for the NAE Program

Most DOT discretionary and formula grant programs involve sharing project costs between a non-Federal entity or recipient and the Federal government. Non-Federal “matching” or “cost sharing” (both terms may be used interchangeably) means that a portion of the project’s total cost is not paid for by the Federal award and / or Federal funds and the recipient of those Federal funds provides a non-Federal match. Matching funds are typically stated as a percentage of the project’s total cost. Please consult the DOT Navigator to learn the basics of “Understanding Federal Match Requirements.” Match requirements vary program to program.

The Neighborhood Access and Equity (NAE) discretionary grant program requirements do not allow the program to cover more than 80% of project costs unless the project is in a disadvantaged or underserved community. For such projects, no non-Federal match is required. For any other project, the applicant is required to provide non-Federal match to supplement the Federal grant, if awarded, of at least 20% of the project costs. The applicant should describe the anticipated funding plan in the application budget narrative. Please note - ALL expenses counted as non-Federal match must be otherwise eligible for NAE funding.

General parameters regarding non-federal match as it relates to the NAE program:

  • The first question is whether an expense (including intended non-Federal match) is eligible under the grant. An “eligible expense” is an expense incurred by the NAE grant recipient that directly facilitates the execution of a grant agreement and its activities and must be “reasonable,” “necessary,” and “allocable” (2 CFR Part 200.403[a], 404, and 405). Eligible expenses comprise the total project cost for the grant including that funding through RCP and non-Federal match. Matching Eligible expenses must be documented appropriately to be counted towards a match.
  • Match may include both funds from the applicant or other non-Federal entity, or third-party in-kind contributions from other non-Federal sources. Examples include State funds originating from programs funded by State revenue, funds originating from State or local revenue-funded programs, or private funds.
  • The value of personnel, goods, services, space, and utilities provided by the grant recipient and partners that directly facilitates the grant may be categorized as direct or indirect costs (2 CFR Part 200.412, 413, and 415). Those costs, like all eligible costs, can count toward non-Federal match or be reimbursed with NAE funds, if they are billed to the NAE grant.
    • Indirect costs may be billed at the federally negotiated indirect cost rate or a 10% de minimis rate, if the former has not been negotiated.
  • Third-party in-kind contributions are typically in the form of the value of personnel, goods, services, space, property, and utilities contributed by a non-Federal third party, such as a private business or nonprofit, specifically for the program. In-kind contributions may also include materials, pro bono work provided to the project by third parties, and donations from private sponsors.
  • Non-Federal match funds may be counted only once and may not be counted as match for multiple Federal awards.
  • A non-Federal match that is an eligible expense for one grant may not be eligible in all instances across all grants.

NAE grant eligible funding sources for non-federal match

  •  State funds originating from programs funded by State revenue, 
  • Local funds originating from State or local revenue-funded programs,
  • Philanthropic funds, or
  • Private funds

NAE grant eligible expenses and non-federal match example

Eligible NAE expenses may support eligible public engagement activities, eligible planning studies and activities, and eligible construction activities. See Page 12 of the NOFO.

Eligible expenses for the NAE Grant, non-Federal matching funds, and in-kind contributions will fall under the following categories and examples.

Eligible Costs and Match Examples
  • Staff member hired to execute the grant full-time.
  • Staff hours spent in the direct execution of the grant agreement.
  • Staff time managing contractors and partners who are executing the Planning, Capital Construction, or Regional Partnership Challenge projects.
  • Staff hours associated with the financial and administrative management of the grant that are not being directly billed to the grant but are supporting the project with portions of their time and not included as part of an indirect rate.
  • The total staff and volunteer time spent as part of the committee or task force that is directly engaged in the oversight of the Planning, Capital Construction, and Regional Partnership Challenge project development, implementation, and monitoring. The rate billed as match for volunteer time may be associated with those volunteers’ typical hourly wage or a local approved volunteer rate.
  • Purchased or donated goods such as office supplies, IT equipment, flyers, and banners that support the implementation of the project.
  • Purchase of materials to execute the project.
  • Purchased or donated services of third-party organizations for the implementation of the NAE project (if donated, valued at the employee’s regular rate of pay and may include fringe and indirect costs). Examples of services may include contracts for services that directly support the implementation of the NAE project.
  • The time that members of the public spend participating in any engagement or collaboration activity such as a public meeting that is reasonable, necessary, and allocable for the project.
  • If counting the direct cost of space, such as office rental (charged relative to the scale of the award). For example, if the NAE grant award amounts to 5% of an organization’s budget for the year, then 5% of space costs may be counted toward non-Federal match if it is not part of an indirect rate.
  • Fair market cost of space that is specifically associated with developing the NAE project, but is not charged to the grant, such as the cost to rent a meeting room to meet with stakeholders.
  • If counting the direct cost of utilities, such as phone and internet service, if it is charged relative to the scale of the award. For example, if the NAE award amounts to 15% of an organization’s budget for the year, then 15% of utility costs may be used as match.

Examples of costs likely to be ineligible expenses for NAE grants and non-federal match

  • The following are examples of costs that are typically not eligible for the NAE grant nor for non-Federal match:
  • The time that members of the public spend to learn more about activities associated with the execution of the grant.
  • Expenses not directly necessary for the facilitation of the grant agreement, including providing food, beverages.
  • Promotional materials (e.g., t-shirts, mugs, hats) to give out at public outreach events or to staff and/or volunteers working on the grant.
  • Workforce activities not directly associated with the transportation project to remove, retrofit, or mitigate.
  • Public art not directly associated with the transportation project.
  • Lobbying, including costs to influence policy decisions or elections. (See 2 CFR 200.450 for further information on lobbying.)
  • General costs of government outside the scope of implementing the grant (e.g., salaries and expenses for City Council, Mayor, Tribal executive). (See 2 CFR 200.444 for further information on general costs of government.)
  • Entertainment (e.g., band, DJ, performers) to entice participation in events.
  • Time and costs associated with developing grant application and other pre-award costs.
  • Fundraising costs for organization (e.g., financial campaigns, endowment drives, solicitation of gifts) associated with grant recipient or partnership organizations to obtain contributions for general operations.
  • Fines, penalties, and fees resulting from violations or failure to comply with Federal, State, or local laws and regulations.
  • Funds may not be used to support or oppose union organizing.

Examples of federal funding programs that may be counted toward the 20% non-federal match requirement

There are limited instances when Federal funds may be used to satisfy the NAE’s non-Federal match requirement.

For Planning Grants, funding programs that may be used to satisfy non-Federal match include, but may not be limited to:

  • DOT’s Tribal Transportation Program Funds if the project will provide access to Tribal land.
  • DOT’s Federal Lands Transportation Funds if the project will provide access to Federal land.
  • DOT’s Recreational Trails Program Funds, if the project is eligible under that program.
  • HUD’s Community Development Block Grants (CDBG), if the CDBG-funded portion of the project is undertaken as part of CDBG-eligible activities.

For Planning Grants and Capital Construction Grants, funding programs that may be used to satisfy non-Federal match include, but may not be limited to:

  • Transportation Development Credits / Toll Credits.

For more information

  • See page 6 of the RCN NOFO for Budget
  • See page 10 of the RCN NOFO for Cost Sharing and Matching
  • See page 11 of the RCN NOFO for Eligible Facilities, Activities, and Costs