Making compost is like making a good casserole - variety in your ingredients make the best dish. When making a compost pile you need to make sure to have both "brown" or carbon-rich, primarily dry ingredients and "green" nitrogen-rich, fresh ingredients. Hay is considered a 'brown' ingredient in compost. You should typically add eight-parts brown material for every one-part green material in your compost pile.
Build a simple compost bin. Bend chicken wire into a circle and crimp the ends together to form a cage. Insert drill bit into drill. Drill evenly spaced holes throughout the sides of the PVC pipe. Place the PVC pipe into the center of the chicken wire cage.
Fill your compost bin. Layer a foot thick base of hay at the bottom of your chicken wire cage. Place a 2-inch layer of grass clippings and vegetable scraps on this bed of hay. Pour another foot of hay on top of the grass clippings and vegetable scraps. Cover with a 2 inch layer of peat moss.
Repeat layers until the compost pile reaches the top of the cage.
Cook your compost. Soak the compost with a garden hose until it is the consistency of a wrung-out sponge (damp, but not wet). Stir your compost every two weeks.
Place your compost on the top of your garden soil when all of the compost is the consistency of rich, black soil.