3. How long can funds carryover for those grants that have a 27-month spending term?

Only federal grants have a 27-month spending term, which starts the first fiscal year the grant/project is approved and then extends 27months out from that date. If a federal grant/project has a 27-month spending term the funds MUST be expended and/or amended by the end of that term or the funds expire. Once funds have expired all monies MUST be returned to the Arizona Department of Education.

E.g., a LEA was approved for a federal grant/project that has a 27-month spending term. The project was approved for FY02 with the begin date of July 1, 2001. The second year (FY03) the LEA did not apply and therefore did not receive any FY03 funds. Then, in the third year (FY04) the LEA did apply and was approved to receive funding. Even though the LEA did not receive funding the second fiscal year, any allowable carryover from the FY02 project would expire September 30, 2003 (FY04) because it is the end of the 27-month spending term. All funds should have been amended and approved prior, if not then remaining funds MUST be returned to the Arizona Department of Education.