What is the purpose of this memo?

The purpose of this memo is to inform you that AmeriCorps State and National is expecting to change from two-year to one-year funding effective in Fiscal Year 2008. Since its inception, AmeriCorps State and National has operated with two-year funds, enabling some carryover of unobligated funds from one fiscal year to the next.

The move to one-year funding will align us with the practices of other federal grant programs. This change will not affect the length of your grant period—a three-year grant will be awarded with no change from present practice.

Below are brief descriptions of planned changes in our business practice, some changes you will need to make, and a first opportunity to get answers to your questions and to provide input into our planning.

What has been the source of carryover funds?

In the past, we have carried over unobligated funds from year to year. Unobligated funds include:

• Funds for grants not awarded by September 30.
• Unexpended funds from previous year award deducted from current year award.
• Unrequested State Formula, Tribes and Territories, and Commission Administrative funds.
• Unused childcare and T&TA funds.
• Unexpended funds deobligated at grant close-out and recovered through a process called recoding.

How have we used carryover funds in the past?

In the past, to the extent we have had carryover funds, we have used them for special grant competitions, for support for disaster relief, and to increase the allocation for commission Administrative funds. Beginning in FY 2008, we will need to obligate all funds in the same year Congress makes the appropriation.

How will the annual cycle change?

Moving to one-year funding will make it necessary to move our current State and National grant cycles back in the calendar year by approximately three months to ensure sufficient time to award all funds through regular and special competitions. Beginning in 2008, the deadline for state competitive and national applications will occur in November rather than in February.

What are some implications for state commissions?

The shift in timeline will necessitate changes in the annual grant competition cycles of state commissions. We know that some states have statutory requirements that govern the timeline for these competitions.

In addition, the Corporation will make reallocations of unrequested formula funds sooner than is currently the practice. Administrative grant funds may decrease for some commissions since carryover funds will not longer be an available to augment the annual Administrative appropriation.

On the other hand, moving to one-year funding will enhance AmeriCorps efforts to plan and budget with precision; contribute to our ongoing efforts to streamline the grant application, review and award processes; and simplify and clarify our budgeting processes from a programmatic and accounting standpoint. All of this should lead to more efficient grant application and management for state commissions and all AmeriCorps grantees.

Will there be an opportunity to discuss this change?

It will take some time to develop and deploy our plan for this involvement in a way that will lead to positive outcomes for the entire national service community. In the next months, we will be talking with you to understand and account for necessary adjustments, and assisting you in any way we can. Our aim is to ease the transition and reduce burden to you to the best of our abilities.

This message is the first communication regarding this transition. Discussion time on this issue is scheduled at the National Service Conference in Seattle in June. We anticipate a more formal call for public comment through a Notice in the Federal Register to follow.

We have scheduled the following conference calls on this issue:

May 15, 2006 2:00-3:00 EST State commissions
Call 888 790 3417
Passcode SEALE

This call will be recorded and available for playback one hour after the call ends, until May 22, 2006 at 866 465 1304.

May 16, 2006 11:00-12:00 EST National grantees
Call 877 709 5345
Passcode SEALE

This call will be recorded and available for playback one hour after the call ends, until May 23, 2006 at 866 359 6495.