Appendix C to Part 379 - Calculating Required Matching Amount

1. The method for calculating the required matching amount may be stated by the following formula:

X = (Y ÷ .8) − Y

X = Required Match (provided in cash or through third party in-kind contributions)

Y = Amount of Federal Funds

This equation holds true regardless of the total cost of the project. The amount of Federal funds spent in a fiscal year (FY) can never be more than 80 percent (hence, the “.8” in the formula) of the total funds (Federal and non-Federal) spent by the project. Thus, the formula is not dependent on knowing the total cost of the project. One needs to know only that the Federal share can be no more than 80 percent of whatever the total costs may turn out to be. In all cases, the matching contribution is calculated by dividing the amount of the Federal grant award by 80 percent (.8) and subtracting from that result the amount of the Federal grant award.

For example: If the amount of the Federal PWI grant award is $400,000, the amount of the required match is $100,000, calculated as follows:

Required match	=	(Am't. of Fed. Funds in FY	÷	Max. Fed. % of Total)	−	(Am't. of Fed. Funds in FY)
X	=	($400,000	÷	.8)	−	400,000
X	=	$500,000-400,000
X	=	$100,000

The matching contribution is never simply 20 percent of the amount of the Federal grant award (i.e., in the above example, NOT .2 × $400,000).

2. Another consideration is what happens if a grantee carries over unspent Federal funds it received in a fiscal year. If the grantee spends or obligates less than the amount of its Federal grant award in a particular fiscal year and carries over the unspent or unobligated amount of its Federal grant award, its required matching contribution stays the same because the amount of its required matching expenditures or obligations is based on the amount of Federal dollars received in a particular fiscal year. That is, if the grantee carries over any unspent or unobligated Federal funds, the grantee must have spent or obligated the amount of non-Federal funds required for its matching contribution in the same fiscal year in which the Federal funds were received.

For example: If a PWI grantee receives a grant award of $80,000 in FY 2000, its matching requirement for these funds is $20,000. If the grantee spends and obligates only $64,000 in FY 2000, it may “carry over” $16,000 to FY 2001. However, the grantee must spend or obligate $20,000 in non-Federal funds in FY 2000 to meet its matching requirements for the $80,000 it received in FY 2000, even though it does not spend or obligate the entire $80,000 in FY 2000. If the grantee fails to spend or obligate in FY 2000 the entire $20,000 in non-Federal funds, the grantee will fail to meet the matching requirement for the $80,000 it received in FY 2000 and may not carry over the unspent or unobligated $16,000 to FY 2001.

3. The matching contribution also must comply with the requirements of 34 CFR 74.23 (for grantees that are institutions of higher education, hospitals, or other nonprofit organizations) or 34 CFR 80.24 (for grantees that are State, local, or Indian tribal governments). The term “third party in-kind contributions” is defined in either 34 CFR 74.2 or 34 CFR 80.3, as applicable to the type of grantee.