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IMLS training: what state library agencies can and cannot fund with LSTA money
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Summary
IMLS program officers used scenarios to clarify allowable and unallowable LSTA expenses: construction and general advertising are unallowable, some equipment and working lunches are allowable if documented and tied to five-year goals, and monitoring/adequate documentation are essential to avoid recovery of funds.
At a Grants to States training in Milwaukee, IMLS program officers walked state library administrative agency staff through common allowability questions using case scenarios and a "trustee" justification framework.
Presenters stressed a basic rule: LSTA-funded activities must connect to a grantee's five-year plan and be programmatic in nature. "If you can't connect it to your five year plan, it is unallowable," one presenter said while explaining that construction (tearing down walls, installing permanent structures, laying fiber or pouring concrete) is generally unallowable.
The session ran multiple scenarios. Hiring a band for an end-of-summer reading program was judged unallowable as entertainment, while storytime programming was allowable but snacks must serve a documented programmatic purpose. Workshop lunches were described as allowable when they are working lunches with relevant activities during the meal and documentation (for instance, rural travel limitations) to support the cost.
Presenters cautioned that general advertising (for example, billboards) is not allowable under LSTA/2 CFR, but promotion of an LSTA-funded service (such as a state-sponsored catalog) may be funded and should be reported in the state program report. If a promotional item mixes LSTA-funded content and other programs (the session used a bookmark example featuring both a state catalog and a non-LSTA program), the presenters recommended clear prorating and documentation so an auditor can trace which funds paid for which content.
Other practical points covered:
- Equipment and materials must be ordered and delivered during the grant period; content credits must be used within the same grant period.
- Some facility costs (electricity for a climate-controlled scanner) may be indirect and, if paid by the subawardee, can count as match; SLAA administrative site visits may be charged to federal funds within the 4% administrative cap.
- Program income (modest fees for supplies in a makerspace) can be allowable if earned funds are returned to the project and preapproved by the program officer.
- Documentation and monitoring matter: if a state allows an unallowable cost to go unflagged in final reports, that lack of monitoring could trigger a request to return funds.
Presenters repeatedly urged SLAAs to consult program officers early and often and to document decisions in anticipation of audits. IMLS said it will provide handouts, links, and follow-up sessions (including a monitoring session the next day) to help states apply the guidance.
The session closed with practical reminders about certifications, allowable indirect cost practices (including the 4% administrative cap for SLAAs), and the need to keep justifications audit-ready.
