Project Advisory 16, November 2011


The purpose of this Advisory is to summarize the MSBA’s policy on third party funding. This policy applies to all new program projects and is based, in part, on a recommendation from the State Auditor regarding sources of project income in its report dated August 23, 2004.

Third party funding includes insurance settlements, rebates, grants from other public entities or other parties, private donations, and other sources of project income. Per MSBA policy, third party funding is an ineligible cost.

Types of Third Party Funding Ineligible Eligible
Insurance settlements X  
Rebates X  
Grants from public entities or other parties X  
Private donations X  
Other X  

As a result, the MSBA and the District share in the savings that may result from third party funding. As illustrated in the example below, the third party funding reduces the MSBA’s and District’s share of the Project proportionally.

Third Party Funding Example


No Third Party Funding

Impact of Third Party Funding
Total Project Costs $1,000,000 $1,000,000
Third Party Funding   $300,000
  ___________ ___________
Eligible Project Costs*   $700,000
Grant Rate 50% 50%
MSBA Final Total Facilities Grant $500,000 $350,000
District's Share of Project** $500,000 $350,000

*There are no scope exclusions or other ineligible costs in this example.

**Note that the third party funding reduces the MSBA's and District's share of the Project proportionally.

Districts are required to disclose all third party funding in the MSBA Sources and Uses Form, which is required as part of the close-out audit.