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–Susan Lytle Gilmore, Ph.D., Director of Adult Education, Sacramento City Unified School District
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AEP Questions and Answers

This is a collection of questions that are most frequently asked of the AEP Office. They are organized by topic area and will be updated as needed.

Use of Funds

Per the Fiscal Management Guide, it states, CAEP funds cannot be co-mingled with fee-based programs. In this case, since the truck is proposed to be used as part of a fee-based service, the truck cannot be used. See except below. Unfortunately, per the Fees Policy section in the Fiscal Management Handbook on pages 15 and 16:

  1. Program Fees

... In addition, community college community education fee based programs (community education and contract education) cannot be co-mingled, leveraged or braided with CAEP funds. Title V regulations, and education code prevent community college fee based programs to be combined with any state apportioned program (like CAEP). However, these programs can work with regional consortium for student referrals to meet regional needs.

You can view the Fiscal Management Guide here:

We suggest using other funding sources because this could be considered a gift of public funds, which is against the funding rules for AEBG/CAEP.

CAEP covers only noncredit and K-12 adult education. Using CAEP funds for not-for-credit (aka community service / community education) is not allowable. Not-for-Credit has its own education code and they can charge fees, they don’t need Chancellor’s Office approval, but they have to be self-sustaining (meaning they can’t use general funds (like noncredit apportionment or CAEP funds)).

Noncredit rules do not apply. Community Ed/Services or Not-for-Credit rules or ed code will apply in this case (EC 78300)

Not-for-credit courses can charge a fee, but any fee cannot exceed the cost of maintaining the class (EC 78300).

This is not an allowable use of funds. This would be considered a gift of public funds. The best solution would be to find another funding source that is able to cover the expenses.

Some notable points to consider to determine if this is an allowable expense:

· Since CAEP is restricted funding, the CAEP office would need more specifics about the student worker position/duties to determine if its allowable.

· Would need to specify what the student worker role/duties would entail and the specific program it would work under.

· Not all noncredit programming is covered by CAEP so that would be a red flag.

· CAEP funds would have to be restricted to only CAEP programming.

This language is from the CAEP Fiscal Management Guide. The funds could be used to pay for staff who work to support CAEP and within the seven program areas. However, student worker positions in community colleges can depend on the specific factors listed above. Along with it being listed in their 3 year plan, annual plan, and the position works to support CAEP programming directly.

CAEP Fiscal Management Guide reference:

(Pg 11)

• Funds may only be expended within the seven program areas as prescribed in the CAEP education code (Section 84913).

• Each regional consortium must have an approved 3-year consortia plan that includes any amendments (submitted in Year 1 – 19/22).

• Expenditure of CAEP Funds must align with the annual plan as approved by the regional consortium for that specific year.

• All CAEP expenditures must be reasonable and justifiable. “Reasonable” means that expenditures will be made prudently and with every effort to utilize funds efficiently. “Justifiable” means that expenditures are consistent with CAEP program goals and activities related to the seven program areas as identified in the CAEP Program budget language.

(Pg 12) All allowable costs must meet three primary criteria:

• Substantiate that the cost was necessary and reasonable for proper and effective administration of the allocations.

• The cost must be allocable to the funding source activities.

• The cost must not be a general expense required to carry out the consortia member’s overall responsibilities (i.e. not supplanting).

• However, even if the costs meet the prior three criteria, the costs must be approved within the 3-year consortia plan and the annual plan template of the regional consortia as agreed upon by its membership.

Examples of Allowable Expenses by CAEP Types of Activities

(Pg 45)

Supplemental instruction and tutoring: Purchase of a web-based interactive program of supplemental instruction for CAEP. Purchase of training videos, or online training videos, or similar that supplement CAEP instruction. Direct tutoring to adult education students in CAEP areas. Supplemental instruction for CAEP students. Salary of teaching assistants assisting CAEP instructors.

Coordination: Salary of CAEP coordinator, or assistants, or project leads for hours of service provided, not to supplant a teaching salary. Cost of seminars to raise CAEP awareness among faculty. Cost of a consultant providing services to create, coordinate, and implement CAEP programs.

Example of Expenses Not Allowed or that Need Prior Approval (specific to CAEP) include, but are not limited to:

  1. Other Staff Salaries and Benefits
    Program funds cannot be used to pay for any staff that does not directly support the CAEP services described in the consortium’s approved plan.

Based on the notable points, more information is needed and input acknowledging that the Fiscal Management Language is being met.

All capital outlay requests require an informational email stating the following has/promise it will, occur:

  1. Consortium has approved the capital outlay and expense (provide date item was approved)
  2. The project aligns with the Three-Year/Annual Plan for the consortium
  3. Provide the quote for work done
  4. The member must follow all state & local policies and procedures related to capital outlay. This would include district facilities approval, following procurement processes, and notification of state agency facility departments.

Once the expense is approved and aligns with the consortium plans, the consortium lead will need to submit an informational email/request via the Support Ticket system to CAEP TAP. Please attach the quote, if one is available, and acknowledgement of item #4.

The CAEP Office will review and reach out if they have any further questions. The email is informational only, so if CAEP does not reach back out with questions, you are welcome to move forward with the planning of the project.

Yes – using the NOVA allocation amendment, you can move funding to the Adult School.

Hopefully, the cost the adult school is paying for the roof replacement covers their share of the facility – meaning the CAEP funds used are benefiting only CAEP programs. The CAEP Office cannot allow CAEP funds to benefit non-CAEP programs.

They must use their districts procurement policies and procedures.
Since you are moving carry-over or prior year funds in NOVA via the allocation amendment, the fiscal agent will have to facilitate the transfer of actual funds from one member to the adult school. NOVA tracks, records, updates, and displays – but the members have to move the money physically from one member to the other member.

Per the CAEP Fiscal Management Guide, Section 8 on Capital Outlay Guidance “Capital outlay expenditures need to be submitted by the requesting Member-district to the consortium’s governing board for review and approval. Once the consortium has reviewed, approved, and established that the expenditures are aligned with the Consortium’s three-year plan, the consortium will send an informational email to the CAEP Office to inform them of the proposed expenditures.”

Once the amendment is complete, the adult school will update their member work plan and budget to reflect the additional funds (and their use). They will handle all reporting of these funds.

CAEP does not stipulate how expenditures are classified. The only stipulation CAEP has is that expenditures for construction/remodeling/and the like is a Capital Outlay (6000 object code) expense. For expenses that may be over a certain dollar amount, please defer to the district policy for how those expenses are categorized internally. CAEP reporting lists all 6000s as one, no matter the dollar amount.

In response to your inquiry of using CAEP funds to buy food to run the ESL café and offer a related CTE contextualized course:

Current education code and existing guidelines….

CAEP funds are restricted funds and cannot be used to purchase food.
CAEP funds can be used to purchase material and supplies for courses in the seven CAEP program area (ABE/ASE, ESL/Civics, CTE (vocational, workforce prep, & pre-apprenticeship), Adults with Disabilities, and K-12 Success).
When using CAEP funds, districts must follow their procurement policies and procedures.
Fund 11, which is set up for Adult Education, typically cannot be used to account for business type transactions.
The district would need to use a revolving fund (or some other approved mechanism) to account for the ESL Café operations, which typically involves the districts policies and procedures, and perhaps their governing board, on how and where to account for these transactions.

Recommendation: The CDE Adult Education Office recommends that the Adult School be allowed to use CAEP funds for materials and supplies related to its CTE and/or contextualized courses. The ESL Café should be operated separately by the district, and would not be allowed to use CAEP funds in its operation. The district must manage this partnership and create a fiscal firewall between the CTE/contextualized course(s) and the operation of the ESL Café. Adult Education (Fund 11) cannot be used to account for business transactions. The district would need to follow its current policies and procedures to account for the ESL Café operations expenditures and income through a revolving fund (or other approved mechanism).

Should the district need accounting transactions guidance, they can contact our CDE School Fiscal Services

Upon reviewing the appropriate documents, this would not be an appropriate use of CAEP funds. Covering the costs of student fingerprinting, providing them free supply kits that leave the program – are considered a gift of public funds – and not allowable under CAEP. There is no fee waiver for such costs in the community college student fee handbook

What would be allowable is if they loan students items that could be checked and returned at the end of the semester. In this case, fingerprinting and a cosmetology supply kit, wouldn’t be something that could be loaned out (like a textbook would). Some community colleges are using CARES/HEERF grants to students to pay for health career education classes (CNA, EMT, Med Asst., etc.). In addition, some colleges have sent students to the AJCCs (America’s Job Center of CA) to obtain training funds to pay for such costs.

In summary, CAEP funds would not be an allowable use is this case.

Those activities are not allowable with CAEP funds. It would be considered a gift of public funds. The guidelines/policies can be found in the Fiscal Management Guide on the CAEP website here

Please check the California Commission on Teaching Credentialing for the requirements. You can visit their website here

While there is no specific language that states LEAs are not required to approve each individual expenditure, language is there that says all expenditures must be laid out in the Annual and 3 Year Plan, which the members approve. If the cost is not in the Annual/3 Year Plan, it is not approved and cannot be expended. If it is in the plan(s), approval was already received when they approved the plan(s) and no further approval is needed.

The Allowable Uses of Adult Education Block Grant Funds section of the Fiscal Management Guide:

All allowable costs must meet three primary criteria:
1) Substantiate that the cost was necessary and reasonable for proper and effective administration of the allocations.

The CHSPE is valid in the state and considered equivalent to a high school diploma, which allows CAEP funds to be used.

Depending on the learners goals there are some considerations when advising them on next steps:

The CHSPE is only a test offered in CA. A learner that is 18 or older should probably take the GED or HiSET based on how well known these tests are outside of CA

Some adult learners may want to take the CHSPE because there is no maximum age and only has Math and ELA sections, where the GED/HiSET include history, social studies, and science.

Regarding using CAEP funds for GED testing, depending on how the district processes the request, it could be a gift of public funds. Please check if your district has policies and procedures to assist students on paying for testing. The district would have to follow some equitable arrangement to see if the most in need receive the service. It is advised to get the district approval in writing and keep it on file.

Per the CAEP Fee's Policy, career and technical education
(CTE) programs include the following: 1) Short term CTE with high employment potential; 2)Adults, including but NOT limited to older adults, entering or re-entering the workforce; and
3) Pre- apprenticeship conducted in coordination with one or more DAS approved apprenticeship programs.

Career and technical education programs offered by K12 adult
schools are considered part of the CAEP program, but K12 adult school providers are allowed to charge fees for these programs. K12 adult CTE programs are subject to all state requirements under CAEP including course approval, credentialing, andstudent data reporting. The K12 adult CTE student fee structure must be included in the consortia annual plan.

The Fiscal Management Guide and CAEP Fees Policy can be found on the CAEP website at

This is not an allowable use of CAEP Funds. Although the Fiscal Management Guide does not list legal fees specifically, it is classified the same as Fees and Penalties, which is item# 7 on the last page of the Guide. It states:

Fines and Penalties Costs resulting from violations of, or failure of the institution to comply with, Federal, State, and local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the sponsored agreement, or instructions in writing from the authorized official of the sponsoring agency authorizing in advance such payments

Additionally, on page 12 it states: all CAEP expenditures must be reasonable and justifiable. “Reasonable” means that expenditures will be made prudently and with every effort to utilize funds efficiently. “Justifiable” means that expenditures are consistent with CAEP program goals and activities related to the seven program areas as identified in the CAEP Program budget language.

Legal fees pertaining to a former employee are not considered reasonable or justifiable, per CAEP Statute.

Per the guidance from the State, the proposed expenditure of mileage reimbursement for students appears to be a gifting of public funds, which is nonallowable under CAEP.

Please note that ultimately CAEP regional consortia members are responsible for allocation decisions. CAEP expenditures must be reasonable and justifiable. In this context, “reasonable” means that expenditures will be made prudently and with every effort to utilize funds efficiently, and “justifiable” means that expenditures are consistent with CAEP program goals and activities related to the seven program areas as identified in the CAEP Program budget language.

As outlined in the CAEP Fiscal Management Guidance, ensuring all allowable costs must meet three primary criteria (p. 12):

1) Substantiate that the cost was necessary and reasonable for proper and effective administration of the allocations.
2) The cost must be allocable to the funding source activities.
3) The cost must not be a general expense required to carry out the consortia member’s overall responsibilities (i.e. not supplanting).

Indirect is used for any costs that do not directly touch the program, such as business office staff time, possibly an overseeing administrator's time, etc. Direct program costs are the principal, teachers, materials, etc. Indirect costs are all the items behind the scenes. They should use indirect for that staff time, not pull it from the general CAEP funds.

Each member is allowed to put 5% of their allocation, or their approved indirect rate, whichever is LESS, towards indirect expenses. They will budget for that in the Budget and Workplan. Please keep in mind that the amount of indirect budgeted is pulled from their allocation. It is not additional funds given.