AGREEMENT FUNDED UNDER THE CLEARWATER COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
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AGREEMENT FUNDED UNDER
THE CLEARWATER COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
THIS AGREEMENT 1S entered into as of the 1st day of October, 1988, by the
CITY OF CLEARWATER, Florida, a political subdivision of the State of Florida,
hereinafter referred to as the "CITY", and COMMUNITY PRIDE CHILD CARE CENTER
OF CLEARWATER, INC., as further identified in Appendix A, hereinafter referred
to as the "PSA", and included the Appendices attached hereto.
WHEREAS, the City has agreed with the United States Department of Housing
and Urban Development to conduct a Community Development Program, hereinafter
referred to as the "Program", with federal financial assistance under Title I
of the Housing and Community Development Act of 1974, as amended, hereinafter
called the "Act", and
WHEREAS, the Planning & Urban Development Department, hereinafter called
the "Department", will act in behalf of the City in conducting the Program,
and
WHEREAS, the PSA provides a program as ident ified 1n Appendix A of
benefit to low and moderate income residents within the City of Clearwater and
proposes to perform the work and carry out the specific services as identified
in Appendix A; hereinafter referred to as the "Project", and desires federal
financial assistance through the City to effect this proposal, and
WHEREAS, the City finds the project to be meritorious and in fulfillment
of the purposes of the Act;
THEREFORE, the parties agree as follows:
1. The PSA shall, 1n a satisfactory and proper manner as determined by
the Department, conduct the Project outlined in Appendix A.
2. The term of this agreement shall commence on October 1,1988, and
terminate on September 30, 1989, unless earlier cancelled as provided herein.
The agreement may be extended for up to one additional year upon the request
of the PSA and the written authorization of the City Community Development
Manager.
The need and merit shall be at the determinat ion of the Manager.
The Department may issue written or oral instructions to clarify any other
details or provisions of this Agreement.
Such instruction must be within the
intent of the project and not be of such nature to affect cost or period of
performance.
3. The Ci ty representative with the PSA as regards conduct of services
under this contract shall be the Community Development Manager and the PSA's
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serv1ces shall be carried out under the supervision of the Agent as identified
1n Appendix A.
4. The PSA shall not exceed its budgeted amount and shall use the funds
1n accordance with the award to be paid with Community Development Funds
included in Appendix B.
Funds shall not be obligated when payment has been
suspended or terminated pursuant to paragraph 17 hereof.
Any funds which the
Department determines were not properly expended shall be refunded to the
City.
5. The PSA shall comply with the provisions of OMB Circular A-llO,
provided 1n Appendix G, and with the provisions of OMB Circular 122, provided
in Appendix H, or the appropriate successor documents of these documents.
The PSA shall permit the City to audit the PSA's financial operation including
but not limited to compliance with applicable provisions of Federal law and
regulations. All PSA financial records relating to the Project are subject to
review by the City.
6. All subcontractors under this agreement shall be approved by the
City.
7. All purchases of consumable, capital equipment and services shall be
in conformity with the Procurement Standards set forth in OMB Circular A-I10,
At tachment O.
Accountability for project property and equipment shall be in
accordance with the requirements therein set forth.
8. The City agrees to make payment of budgeted costs on a reimbursement
basis.
Reques ts for payment shall be as spec ified 1n Attachment B.
No
advance payments shall be made to the PSA. All costs and invoices for request
for payment shall be supported by properly executed payrolls, time records,
1nvo1ces, contrac ts, or vouchers, or other official documentat ion evidencing
in proper detail the nature and propriety of the charges.
All checks
payro lls, 1nV01ces, contrac ts, vouchers, orders or other account ing documents
pertaining in whole or in part to the agreement shall by clearly identified
and readily accessible.
Final request for reimbursement hereunder shall be
submitted within 30 days after completion of all services to be performed by
the PSA and the Ci ty shall not be respons ib le for payment of any charges,
claims or demands hereunder not received within said thirty day period.
9. The PSA shall upon the expiration of this agreement transfer to the
city any CDBG funds on hand and any accounts receivable attributable to the
use of CDBG funds.
Program income funds are excluded from this provision or
as provided below.
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Program 1ncome funds shall be retained by the PSA so long as the
act ivities that wi II be undertaken with the program 1ncome are the specific
activities that meet the provisions of this agreement.
These funds shall be
adjusted by the City according to the principles described in paragraphs
(b)(2)(i) and (ii) of Section 570.504 which states that:
(1) Program income in the form of repayments to, or interest earned on a
revolving fund as defined 1n Section 570.500(b) shall be substantially
disbursed from the fund before additional cash withdrawals are made from the
U.S. Treasury for the same activity.
(This rule does not prevent a lump sum
disbursement to finance the rehabilitation of privately owned properties as
provided for 1n Section 570.513.)
(2) Substantially all other program 1ncome shall be disbursed for
eligible activities before additional cash withdrawals are made from the U.S.
Treasury.
10. The City shall retain custody upon termination this agreement of any
and all property purchased with Community Development Funds.
"Property" as
used 1n this Paragraph shall mean nonexpendable tangible property valued at
$200 or more with a remaining life expectancy of one year or more.
The PSA
shall retain custody of property acquired with federal funds so long as the
property is used for the purposes described in Appendix A.
When no longer
used for such purpose, the City shall assume custody of the property upon
written notice to the PSA.
Upon purchase and receipt of property, the PSA
shall submit to the Department a Property Receiving Report.
Stolen, lost or
returned property shall be reported immediately to the Department.
Thirty
days prior to the end of the grant year or immediately upon termination of
this agreement, the PSA shall submit in a Property Report a physical inventory
of all property purchased with Community Development Funds.
The report shall
also contain a verification of the existence and current used and location of
the property, and, if applicable, the continued need for the property. No
real or personal property or custody thereof purchased with such funds shall
be disposed of, transferred, assigned, or loaned by the PSA without pr10r
written consent of the City.
11. For any real property under the PSA's control that was acquired or
improved in whole or in part with CDBG funds in excess of $25,000 must;
(1) Be used to meet one of the national objectives in Section 570.901
until five years after expiration of the agreement, or for such longer period
of time as determined to be appropriate by the recipient; or
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(2)
Disposed of in a manner that results 1n the recipient' s being
reimbursed in the amount of the current fair market value of the property less
any portion of the valued attributable to expenditures of non-CDBG funds for
acquisition of, or improvement to, the property.
(Reimbursement 1S not
required after the period of time specified in paragraph (b)(8)(i) of Section
570.503.10.
12. Nothing in this agreement shall be construed to permit invasion of
the pr1vacy of individuals who are served by the project, nor shall this
agreement be construed to require the PSA to publish or release information to
third parties which would invade the privacy of such individuals. Information
obtained by the Department as required by this agreement shall not be used or
disclosed 1n such a way as to invade individual privacy and client
relationships, unless Florida law pertaining to public records requ1res
disclosure of said information.
13. The PSA shall obtain prior written approval by addendum to this
agreement for any of the following changes:
a. Substantial changes in the project work plan.
b. Changes in any budget line item.
14. The PSA agrees to fully participate 1n the implementation and
maintenance of an evaluation system to continually monitor the project. This
shall include, but not be limited to, periodic submission of data reports
which will be used by the Department for inclusion in the Annual Grantee
Performance Report,
periodic monitoring visits by the Department for
conformance with this agreement, and continuing assessments of performance
hereunder. PSA agrees to comply with evaluation and information requirements
of the Department.
A final report shall be submitted by the PSA within 30
days after the end of the contract term. This final report shall consolidate
reporting of all project participants.
15. PSA shall establish and maintain on an accrual basis an accounting
system in accordance with the Standards of Grantee Financial Management System
as set forth in OMB Circular A-110 or the appropriate successor document and
1n accordance with generally accepted accounting principals and standards
where these principals and standards are not in conflict with A-110 or its
successor. PSA agrees to modify or correct said systems in accordance with he
City's requirements.
16. PSA shall maintain such records and accounts as are deemed necessary
by the city to assure a proper accounting for all project funds.
All such
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records shall be available for audit, inspection or copying purposes at any
time during normal business hours and as often as the City, HUD, and/or
representatives of the Comptroller General of the United States, or other
federal agency, may deem reasonably necessary. Such records shall be retained
for such period as required by applicable laws and regulations and may
thereafter be destroyed only with the prior written approval of the City.
Such records shall inc lude financial records, aud its, support ing documents,
statistical reports and client files.
PSA will comply with such additional
requirements as to maintenance of records as the City may request in writing.
In the event the PSA cannot continue to be responsible for maintenance of the
records, then the City shall be so notified in order to take custody of the
records. The city may, at any time, on written notice to the PSA take custody
of any and all records established under this Agreement.
17. The PSA shall hold and save the City, its officers, agents, and
employees harmless from liability of any nature or kind, including costs and
expenses, for or on account of any suits or damages of any character
whatsoever resulting from injuries or damages sustained by any persons or
property resulting in whole or 1n part from the negligent performance or
omission of any employee, agent or representative of the PSA.
18. The PSA shall not assign any interest in this Agreement without the
prior written consent of the City.
19. The city may suspend, withhold, or terminate payment of the project,
1n whole or in part, for cause or conven1ence.
Cause shall included the
following:
a. Ineffective or improper use of project funds.
b. Failure to comply with any term or condition hereunder.
c. Refusal to accept conditions imposed by HUD,
d. Submittal of reports which are incorrect or incomplete 1n any
material respect.
e. If carrying out this Agreement is rendered impossible or
infeasible for any reason including changes in law or the
unavailability of HUD funds necessary for continuation.
f. Convenience shall be according to the regulations in 24 CFR
85.43 and 85.44.
If the City suspends payment, it shall advise the PSA and specify in writing
the actions that must be taken as a condition precedent to the resumption of
payment and specify a reasonable date for compliance.
20. Both parties will use their best efforts to ensure that services
under this Agreement are provided so as to best meet the needs of residents
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with priority to those residents who reside 1n the Community Development
target areas.
The PSA shall make every effort to assure that a m1n1mum of
two-thirds of those persons receiving services hereunder are low and moderate
1ncome.
21. No person with responsibilities 1n the operation of the project will
discriminate with respect to any project participant because of race, color,
national origin, or sex.
Nor shall any participant be excluded from
participation in, be denied of, or be subjected to discrimination under any
program of activity funded in whole or in part with Community Development
Funds because of race, color, national origin or sex, as set forth 1n Other
Program Requirements in Appendix D, (CFR 570.601).
22. The PSA will establish safeguards to prohibit employees from using
their positions for a purpose that 1S or gives the appearance of being
motivated by a desire for private gain for themselves or others, particularly
those with whom they have family, business or other identifiable ties. Prior
to request ing any cont inued project funding beyond the term covered by this
Agreement or for a new public services not covered by this Agreement, the PSA
shall attempt to secure other local, state or federal funding and/or private
funding for such project. The PSA will not as a result of receiving funding
for the Project reduce its support for other similar services already being
provided by the PSA 1n the area of its operation, and will, in fact,
affirmatively seek additional assistance and support from other sources for
increasing services where needs demand such increase.
The PSA wi II not use
these funds for publicity or propaganda purposes designed to support or defeat
legislation pending before federal, state or local governments.
23. The PSA shall comply with the requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, and the HUD regulations
issued pursuant thereto, attached hereto as Appendix E.
24. The PSA will comply with Equal Employment Opportunities Executive
Order 11246, as amended, attached hereto as Appendix F.
25. The PSA will comply with applicable federal law and regulations,
including but not limited to:
National Environmental Policy Act of 1969;
Flood Disaster Protection Act of 1973;
HUD Implementation of the Lead-Based Paint poisoning Prevention Act;
Clean Air Act;
Historic Preservation Requirements of P.L. 89-656
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Architectural Barriers Act of 1968;
Ha t c h Ac t ;
Federal Water Pollution Control Act,
Federal Labor Standards provisions and the Davis-Bacon Act;
The Civil Rights Act of 1964;
National Flood Insurance Program;
all as amended from time to time and in effect during the term this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the day and year first above written.
COMMUNI TY PRIDE CHILD CARE CENTER OF
CLEARWATER, INC.
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Secretary
CITY OF CLEARWATER, FLORIDA
Countersigned:
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C1ty Manager
By
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Approved as to form & correctness:
ATTEST: _:;..------
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City A orney
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Agency: Community Pride
Year 1988 - 1989
ADnendix A
Identification of A2encv and SDecific Services to be Provided
A2encv
Name: Community Pride Child Care Center of Clearwater, Inc.
Legal Classification: A non-profit agency organized and existing under the
laws of the State of Florida.
Principal Office
1235 Holt Avenue in the City of Clearwater, Florida
34615
Mailing Address:
1235 Holt Avenue
Clearwater, Florida 34615
Agent:
Martha Skelton, Executive Director
813-443-0958
Pro2ram of A2encv
Provides a child care program for pre-school children in the Clearwater area.
SDecific services to be Drovided under this A2reement
I. Title XX Match
Child care will be provided to children of families receiving support
under Title XX of the Social Security Act and funds under this Agreement
will be used to provide 12.5% local match. This match will be provided
for approximately 24 children for approximately 261 days, up to the
maximum funds as identified in Appendix B.
II. Classroom Equipment and Supplies
Equipment and supplies will be purchased as follows:
1. Listening Center for the South Center, 1436 S. Madison Avenue,
Clearwater, Florida 34616.
2. Color Television
3. VCR (video player and recorder)
4. Primary Development Box
5. Kitchen Combo Center
6. Approximately $200 of Manipulative Toys
7. Approximately $200 of Books and Records
8. Or such combination of equipment and supplies as shall be determined
equivalent by the City Community Development Manager.
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Agency: Community Pride
Year: 1988 - 1989
Aooendix B
proiect Award
Funds up to $7,600.00 will be provided under this Agreement for match and for
equipment and supplies. It is anticipated that $6,032.23 of this total will
be for match and the balance for equipment and supplies. If less than
$5,500.00 is projected to be used for match, the agreement of the City
Community Development Office is required.
TOTAL
$7,600.00
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APPENDIX C
METHOD OF PAYMENT
All payments shall be on a reimbursement basis only.
All requests for reimbursement shall be supported by proper invoices,
payrolls, checks, receipts and other documentation as required.
Any program income shall be submitted to the CITY through the DEPARTMENT ~
least QuarterlY. Fees collected, if any, shall be reported but are not to be
construed as program income.
Requests for reimbursement shall not be reduced by any program income
received.
APPENDIX D
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OTHER PROGR&~ REQUIRE}lliNTS
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subpart K-Other program
Requirements
~ 570.&00 General
(oj Section l04(b) eJ the Acl provides
Ibatany granl under seclion 106 of Ihe
Act shall be u. ,c' nly if the granlee
certifies 10 the slllisfaction of the
Secrela'ry, among other thing5. thalthe
grllnl "will b'e.conducled and
adminislered in conformity with Pub, L
B8--352 and Pub. L, 00-264," and, further,
Ihallbe granlee "will comply with the
other provisions of Ihis tille and with
olher applicable laws:: Section l04(d)(l)
of Ihe Acl requires thaI the Secrelary
dt:lermine wilh respeclto granls made
pursuanlto seclion l06(b) (Entitlement
Grants) and l06(d)(Z)(B) (HUD-
Adminislered Small Cities Grants), at
leasl on an annual basis. among olher
Ihings. "whether the granlee has carried
oul\ils) certifications in compliance
with the requiremenls and the primary
objectives of this title and with other
applicable laws' . . ." Certain Olher
slalules are expressly made applicable
to activities assisled under the Act by
Ihe Act ilself. while other laws not
referred 10 in the Act may be applicable
10 such activities by their own lerms.
Certain slatules or Executive Orders
which may Le applicable 10 activities
assisled under the Acl by their own
terms are adminislered or enforced by
governmenlal departrnenlJ or agencies
other than the Secrelary or the
DepartrnenL This Subpart K enumerates
laws which the Secrelary will treat as
applicable to grants made under section
106 of the Act. other than granls 10
Stales made pursuant to scction l06(d)
of Ihe Acl. for purposes of the
determinalions descriLed above 10 be
made by the Secretary under section
l04(d){l) of the Act. including slatules
expressly made applicable by the Act
and certain other slatules and Executive
Ordcrs for which the Secrelary has
enforcement responsibility, The absence
of mention herein of any other sla lule .
for which Ihe Secretary docs not have
direct enforcement responsibililY is not
inlended 10 be laken 8S an indication
Ihal. in Ihe Secrelary's opinion. such
stalute or Execulive Order Is not
applicable to activities assisled under
Ihe Act. For lows which the Secrelary
will treat as applicable to grants made
10 Stales under section 100(d) of the Act
for purposes of the determination
required 10 be made by the Secretary
pursunntto section 104(d)(2) of the Act,
see' 570.4.96,
(b) This Subpart also sets forlh certain
additional program requirements which
the Secrelary has determined to be
applicable to grants provided under the
Act as a mailer of administrative
dlscrelion.
(c) In addition to grants made
pursuant to section 100(b) and
l06(d)(Z)(B) of the Act (Subparts D and F
of this Part, respecti,}'ely). the .
requirements of this Subpart K are
applicable to granls made pursuant to
sections 107 and 119 of the Act
(Subparts E and G, respectively),
~ 570.601 Pub. L 88-352 and Pub. L 90-
284; Executive Order 11063-
Seclion l04(b) of the Act provides that
any grant under section 106 of the Acl
shall be made only if the grantee
c'ertifies to the satisfaction of the
Secretary thai the grant "will be
conducted and adminiatered in
conformity with Pub, L 88-35Z and Pub,
L. 9O-Z84," Similarly, section 107
provides thai no grant may be made
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under thalaeclion (Secretary'.
Discretionary Fund) or section 11 9
(UDAG) without satisfactory assurances
to' the same effect.
(a) "Pub, L. ~52" refm \0 Title VI
of the Civil Rlghls Act of 1004 (42 U,S.C.
zoood et leq.), which provides thai no
person in the United Slates shnll on the
ground of race, color. or national origin,
be excluded from participation In. be
denied the benefils of. or be subjected to
discrimination under any program or
activity receiving Federal financial
assistance. Section 602 of the Civil
Rights Act of 1004 directs each Federal
depo.rtment and agency empowered to
extend Federal financialassislance to
any progrnm or activity by way of grant
10 effectuale Ihe foregoing prohibition
by issuing rules, regula lions, or orders of
general appHcnbility which shall be
consislent with achievemenl of Ihe
. stalule authoriting the financial
assistance. HUlJ rcgulallons
implementing the requirements of Title
VI with respect to HUD programs are
conlained in Z4 CfR Pari I.
(b) "Pub, L 90-2&4" refers 10 Tille VllI
of the, Civil Rights Act of 1968[4.2 U.S.C.
3001 et seq.), popularly known as the
Fair Housing Act. which provides that it
is the policy of the Uniled Stales to
provide, within conslitutional
limitations, for fair housing throughout
the United Slates and prohibits any
person from discriminaling in the sale or
rental of housing. the financing of
housing, or the provision of brokerage
services. Including in any way making
unavailable or denying a dwelling to
any.person. because of race. color.
religion, sex. or national origin. Title
VllI further requires the Secretary to
administer the programs and activities
relating to ho~sing and urban
development In a manner affirmalively
to further the purposes of Tille VIIl.
Pursuant to this slatutory direction. the
Secretary requires that grantees
administer all programs and acliyilies
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related 10 housing and communily
developmllnl in a manner 10
affinnntively further fllir housing,
(c) Executive Order 11003, as
amended by Executive Order 12259.
directs the Department to lake all action
necessary and appropriate to prevent
discrimination because of race. color.
religion (creed). sex. or national origin.
in the sole. leasing. rental. or other
disposition of residential property and
related facilities (including land to be
developed for residential use). or in the
use or occupancy thereof, if such
properly and related facilities are.
uplong other things, provided in whole
or in part with the aid of loans.
advances. grants. or contributions
ogree\i.to be made by the Federal
Government. I-IUD regulations
implementing Executive Order 11003 are
contained in 24 CFR Part 107.
~ 570.602 Section 109 of Ihe Act.
(n) Section 109 of the Act requires that
no person in the United States shall on
the ground of race, color. national origin
or sex, be excluded from participation
in. be denied the benefits of. or be
subjected to discrimination under. any
program or activity funded in whole or
in part with community development
funds made available pursuant to the
Act. For purposes of this section
"program or activit{' is defined as any
function conducted by an identifiable
administrative unit of the recipient. or
by any unit of governme':lt. ~ubrecipient.
or private conLrnctor receiving
community development funds or loans
from the recipient. "Funded in whole or
in part with community development
funds" means that community
development funds in any amount in the
form of grants or proceeds from BUD -
guaranleed loans have beet\.transferred
by the recipient or a subrecipientto an
identifiable administrative unit and
disbursed in a program or activity,
(b) Specific discrimin%ry actions
prohibited and corrective actions,
(1) A recipient may not. under any
program or aclivity to which the
regulations of this Part may apply
directly or through contractual or other
IIrrangC'ments. on the ground of race.
color. ns tiOllal origin, or sex:
(i) Deny allY facili lies. services.
financialllid or other bcnefits provided
under the program or activity,
(ii) Provide any facilities. services.
financial aid or other benefits which are
different, or are provided in a different
form from thut provided to others under
the program or activity.
(iii) Subject to segreg<lted or separa Ie
treutment in any fucility in. or in any
ma tier of process rei a t<<d to receipt of
any service or benefit under the program
or uctivity.
(iv) Restrict in any way access to. or
in the enjoyment of any advantage or
privilege enjoyed by others in
connection with facilities. services,
financial aid or other benefits under the
program or activity,
(v) Treat an individual differently
from others in determining whether the
individual satisfies any admission.
enrollment. eligibility. membership, or
other requirement or condition which
the individual must meet in order to be
provided any facilities. services or other
benefit provided under the program or
activity.
(vi) Deny an opportunity to participate
in a program or activity as an employee.
(2) A recipient may not utilize criteria
or methods of administration which
have the effect of subjecting individuals
to discrimination on the basis of race.
color. national origin. or sex. or have the
effect of defeating or substantially
impairing accomplishment of the
objectives of the program or activity
with respect to individuals of a
p<lrticular race, color. national origin, or
sex.
(3) A recipient. in determining the site
or location of housing or facilities
provided in whole or in part with funds.
under this part. may not make selections
of such site or location which have the
effect of excluding individuals from.
denying them the benefits of, or
subjecting them to discrimina tion on the
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ground of rocc. color. national origin, or
sex: or which have the purpose or effect
of defeating or substantially impairing
the accumplishment of the objectives of
the Aclllnd of this seCtion,
(4)(iJ In administering.s program or
activity funded in whole or in pari with
CDne funds regarding which the .
recipient has previously discriminated
again~t persons on the ground of race.
color. national origin or sex. the
recipient musttuke affinnative action to
ovcrcome the effects of prior
discrimination.
(ii) E\'en in the abscnce of such prior
discrimination. a recipient in
administering a program or activity
fllnded in whole or in part with CO Be
funds should tuke affirma tive action to
overcome the effects of conditions
which would otherwise resull in limiting
participation by persons of a particular
race. color. national origin or sex.
Where previous discriminatory practice
or usage tends. on the ground of race.
color. national origin or sex. to exclude
individuals from participation in. to
deny them the benefits of, or to subject
them to discrimination under any
program or activity to which this pari
applies. the recipient has an obligotion
to take reasonable action to remove or
overcome the consequences of the prior
discriminatory practice or usage. and to
accomplish the purpose of the Act.
(iii) A recipient ahall not be prohibited
by this part from taking any action
eligible under Subpart C to ameliorate
an imbalance in services or facilities
provided to any geographic area or
specific group of persons within its
jurisdiction. where the purpose of such
action in to overcome prior
discriminatory practice or usage,
(5) Notwithstanding anything to the
contrary in this section. nothing
contained herein shall be construed to
prohibit any recipient from maintaining
or constructing separate living facilitie~
or rest room facilities for the different
sexes, Furthermore. selectivity on the
basis of sex is not prohibited when
institutional or custodial services can
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APPENDIX E
SECTION 3 CLAUSE
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THE FULLOWlNG SECTION 3 CLAUSE SHALL gE INCLUDED IN ALL CONTRACTS FUR WORK IN
CONNEcrlON WITH A SEcrION 3 PROJECT:
A. The work to be performed under this contract is on a project assisted
under a program providing direct Federal financial assistance from
the Department of Housing and Urban Development and is subject to the
requirements of Section 3 of the Housing and Urban Development Act of 1968,
as amended, 12 U.S.C. l70u. Section 3 requires that to the greatest extent
feasible opportunities for training and employment be given lower income
residents of the project area and contracts for work in connection with the
project be awarded to business concerns which are located in, or owned in
substantial part by persons residing in the area of the project.
B. The parties to this contract will comply with the provisions of said Section 3
and the regulations issued pursuant thereto by the Secretary of Housing and
Urban Development set forth in 24 CFR, and all applicable rules and orders of
the Department issued thereunder prior to the execution ot this contract. The
parties to this contract certify and agree that they are under no contractural
oc other disability which would prevent them from complying with these
requirements.
C. The contractor will send to each labor organization or representative of
workers.with which he has a collective bargaining agreement or other contract
of understanding, if any, a notice advising the said labor organization of
workers' representative of his commitments under this Section 3 Clause and
shall post copies of the notice in conspicuous places available to employees
and applicants for employment or training.
D. The contractor will include this Section 3 Clause in every subcontract for
work in connection with the project and will, at the direction of the
applicant for or recipient of Federal financial assistance, take appropriate
action pursuant to the subcontract upon a finding that the subcontractor is
in violation of regulations issued by the Secretary of Housing and Urban
Development, 24 CFR. The contractor will not subcontract with any subcontractor
where it has notice or knowledge that the latter has been found in violation 'of
regulations under 24 CFR, and will not let any subcontract unless the
subcontractor has first provided it with a preliminary statement of ability to
comply with the requirements of these regulations.
E. Compliance with the provisions of Section 3, the regulations set forth in 24 CFR,
and all applicahle rules and orders of the Department issued thereunder prior to
the execution of the contract, shall be a condition of the Federal financial
assistance provided to the project, binding upon the applicant or recipient for
such assistance, its successors, and assigns. Failure to fulfill these
requirements shall subject the applicant or recipient, its contractors and sub-
contractors, its successors, and assigns to those sanctions specified by the
grant or loan agreement or contract through which Federal assistance is provided,
and to such sanctions as are specified by 24 CFR 135.
E-l
\
APPENDIX F
NOTICE ~ REQUIREMENT FOR AfFI~~TIVE ACtION
TO ENSURE EQUAL EMPLOYMENT OPPORTUNITY
(EXECUTIVE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "Equal Opportunity
Clause" and the "Standard Federal Equal Employment OpportwU. ty Construc-
tion Contract Specifications" set forth herein.
2. The goals and timetables for minority and female participation, expressed
in percentage terms for the Contractor's aggregate workforce in each
trade on all construction work in the covered area, are as follows:
A. Goals for Female Utilization, All Trades:
AREA COVERED
Goals for Women apply nationwide.
GOALS AND'TIMETABLES
Timetable
Goals
(percent)
F:l:'om Apr. 1, 1978 until Mar. 31, 1979... . 3.1
From Apr. 1, 1979 until Mar. 31, 1980.... 5.1
From Apr. 1, 1980 until Z.1ar. 31, 1981. . . . 6.9
B. Goals for Minority Utilization:
TAMPA-ST. PETERSBURG, FLA., AREA
Area covered: Hillsborough, Pasco, and Pi~ellas
Collo ties, Fla.
Goals and Timetables1
Trade
Goal
(percen t)
All. . . . . . . . . . . . . . . . . . . . . .. . . .
17.9
IFor the life of the project.
These goals are applicable to all the Contractor's construction work
(whether or not it is Federal or federally assisted) performed in the
covered area.
The Contractor's compliance with the Execu~ve Order and the regulations
in 41 CFR Part 60-4 shall be based on its implementation of the Equal
Opportunity Clause, specific affirmative action obligations reauired by
F-l
the specificationJ set forth in 41 CFR 60-4.3(a), Ind its efforts to meet
the goals established for the geographical area where the contract
resulting from this solicitation is to be performed. The hou=s of minority
and female employment and training must be substantially uniform throughout
the length of the contract, and in each trade, and the contractor shall
make a good faith effort to employ minorities and women evenly on each of
its projects. The transfer of minori t.y or female employees or trainees
from Contractor to Contractor or from project to project for the sole
purpose 0f meeting L~e Contractor's goals shall be a violation of the
contract, the Executive Order and the regulations in 41 CFR Part 60-4.
Compliance with the goals will be measured against the total work hours
performed.
3. The Contractor shall provide wri tten notification to the Director 0:: the
Office of Federal Contract Compliance Programs within 10 working days of
award of any construction subcontract in exceSS of $10,000 at any tier
for constrUction work under the contract resulting from this solicitation.
The notification shall list the name, address and telephone number of the
subcontractor; employer identification number; estimated dollar amount of
the subcontract; estDmated starting and completion dates of the subcontract I
and the geographical area in which the contract is to be performed.
4. As used in this Notice, and in the contract resulting f~om this solicitation,
the "covered area" is Pinellas County, =lorida.
60-4.3 (a) EQUAL OPPORTUNITY CLAUSE
During the performance of this contract, the contractor agrees as follows:
1. The contractor will not discriminate against any employee or applicant
for employment because of race, color, religion, sex, or national origin.
The contractor will take affirmat~ve a~tion to ensure that applicants are
employed, and that employees are treated during employment wiL,out ~egard
to their race, color, religion, sex, or national origin. Such action shall
include, but not be limited to the following: Employment, upg~ading,
demotion, or transfer; recruitment or recruitment advertising; layoff or
termination, rates of payor other forms of compensation; and selection
for training, including apprenticeship. The cont=actor agrees to post
in conspicuous places, available to employees and applicantS for employ-
ment, notices to be provided setting forth the provisions of this non-
discrimination clause.
2. The contractor will, in all solicitations or advertisel:\ents for employees
placed by or on behalf of the contractor, state that all qualified
applicants will receive consideration for employment without regard to .
race, color, religion, sex, or national origin.
3. The contractor will send to each labor union or representative of workers
with which he has a collective bargaining agreement or other contract or
~derstanding, a notice to be provided advising the said labor union or
workers' representatives of the.contractor's commitments under this
section, and shall post copies of the notice in conspicuous places avail-
able to employees and applicants fo~ employment.
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"\
4.
The contractor willlcomply with all provisions of Exlcutive Order 11246
of September 24, 1965, and of the rules, regulations, and relevant orders
of the Secretary of Labor.
S. The contractor will furnish all information and reports required by
Executive Order 11246 of September 24, 1965, and by rules, regulations,
and orders of the Secretary of Labor, or pursuant thereto, and will permit
access to his books, records, and accounts by the administering agency
and the 'Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
6. In the event of the contractor's non-compliance with the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or
orders, this contract may be canceled, terminated, or suspended in whole
or in part and the contractor may be declared ineligible for further
Government contracts or federally assisted construction contracts in
accordance with procedures authorized in Executive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
7. ~e contractor will include the portion of the sentence ~ediately
preceding paragraph (1) and the provisions of paragraphs (1) through (7)
in every subcontract or purchase order unless exempted by rules, regula-
tions, or orders of the Secretary of Labor issued pursuant to section
204 of ~xecutive Order 11246 of September 24, 1965, so that such provisions
will be binding upon each subcontractor or vendor. The contractor will
take such action with respect to any subcontract or purchase order as
the administering agency may direct as a means of enforcing such provisions,
including sanctions for non-compliance: Provided, however, That in the
even~ a contractor becomes involved in, or is threatened with, litigation
with a ~ubcontractor or veneor as a result of such direction by the
administering agency, the contractor may request the United States to enter
into such litigation to protect the interests of the United States.
STANDARD FEDERAL EQUAL E}~LOYMENT OPPORTUNITY CONSTRUCTION CONTRACT
SPECIFICATIONS (EXECUTIVE ORDER 11246)
1. As used in these specifications:
a. "Covered area" means the geographical area described in the solicita-
tion from which this contract resulted.
b. "Director" means Director, Office, of Federal Contract Compliance
Programs, United States Department of Labor, or any person to whom
the Director delegates authority.
c. "Employer identification number" means the Federal Social Security
number used on the Employer's Quarterly Federal Tax Return, U. S.
Treasury Department Form 941..
d. "Minori ty" inc 1 udes :
F-3
,
,
(1)
Black (all1persons having origins in any of~e
African racial groups not of Hispanic origin);
Black
(2) Hispanic (all persons of Mexic~, Puerto Rican, Cuban,
Central or South American or other Spanish Culture or
origin, regarcless of race) 1
()) Asian and Pacific Islander (~ll persons having origins
in any of the original peoples of the Far East, Southeast
Asia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alaskan Native (all persons having
origins in any of the original peoples of North America and
maintaining identifiable tribal affiliations through member-
ship and participation or community identification).
2. Whenever the Contractor, or any Subcontractor at any tier, subcontracts
a portion of the work involving any construction trade, it shall
physically include in each subcontract in excess of $10,000 theprovi-
,stons of these specifications and the Notice which contains the ?-p-
pllcable goals for minority and female participation and which is set
forth in the solicitations from which this contract resulted.
3. If the Contractor is participating (pursuant to 41 CFR 60-4.5) in a
Hometowo,Plan approved by ~~e o. S. Department of Labor in the covered
area either individually or through an association, its affirmative action
obligations on all work in the Plan area (including goals and timetables)
shall be in accordance with that Plan for those trades which have unions
participating in the Plan. Contractors must be able to demonstrate their
participation in and ccmpliance wi~~ the provisions of any such Hometown
Plan. Each Contractor or Subcontractor participating in an approved Plan
is individually required to comply with its obligations under 'the EEO
clause, and to make a good faith effort to achieve each goal under the
Plan in each trade in which it has employees. The overall good faith
performance by OL~er Contractors or Subcontractors ~oward a goal in an
approved Plan does not excuse any covered Contractor's or Subcontractor's
failure to take good faith efforts to achieve the Plan goals and time-
table.
4. The Contractor shall implement the specific affirmative action standards
provided in paragraphs }a through p of these specifications. The goals
set forth in the solicitation from which this contract resulted are
expressed as percentages of the total hours of employment and training
of minority and female utilization the Contractor should reasonably be
able to achieve in each construction trade in-~ich 'it has employees in
the covered area. The Contractor is expected to make substantially
uniform progress toward its goals in each craft during the period
specified.
5. Neither the provisions of any collective bargaining agreement, nor the
failure by a union with whom the Contractor has a collective bargaining
agreement, to refer either minorities or wom€n shall excuse the Contrac-
tor's obligations under these specifications, Executive Order 11246, or
the regulations promulgated pursuant thereto.
F-4
.6.
In order for the nonworking t::aining hours of appren tlces dnd trainees
to be counted in meifing the goals, such apprentices and trainees must
be employed by the L1totractor during the training per'od~ and the
Contractor must have made a commitment to employ the pprentices and
trainees at the completion of their training, subject to the availabil-
ity of employment opportunities. Trainees must be trained pursuant to
training programs approved by theU. S. Department of Labor.
'i
7.
The Contractor shall take specific affirmative actions to ensure equal
employment opportuni ty. ~e evaluation of the Contractor's compliance
wi th these specifications, shall be based upon its effort to achieve
maximum results from its actions. The Contractor shall document these
efforts fully, and shall implement affirmative action steps at least as
extensive as the following:
a. Ensure and maintain a working environment free of harrassment,
intimidation, and coercion at all sites, and in all facilities at
which the Contractor's employees are assigned to work. The
Contractor, where possible, will assign two or more,'women to each
construction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are awa=e of and carry out the Contractor's obligation to maintain
such a working environment, with specific attention po minority or
female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minority and female
recrui tmen t sources, provide wri tten notification to minority and
female recruitment sources and to community organizations when the
Contractor or its unions have employment opportunities available,
and maintain a record of the organizations' response~.
c. Maintain a current file of the names, addresses and telephone
numbers of each minority and female off-the-street applicant and
minority or female referral from a union, a recruitment source or
community organization and of what "action was taken with respect
to each such individual. If such individual was sent to ~~e union
hiring hall for referral and was not referred back to ~~e Contractor
by the union or, if referred, not employed by the Contractor, this
shall be documented in the file with the reason therefor, along with
whatever additional actions the Contractor may have taken.
"I
d. Provide immediate written notification to the Director when the
union or unions with which the Contractor has a collective
bargaining agreement has not referred to the Contractor a minority
person or woman sent by the Contractor, or when the Contractor has
other information that the union referral process has impeded the
Contractor's efforts to meet its obligations.
e. Develop on-the-job training opportunities and/or participate in
training programs for the area ~hich expressly include minorities
and women, including upgrading programs and apprenticeship and
trainee programs relevant to the Contractor's employment needs,
especially those programs funded or approved by the Depaztment of
Labor. The Contractor shall provide notice of these programs to
the sources compiled under 7b above.
f. Disseminate the Contractor's EEO policy by providing notice of the
policy to unions and training programs and requesting ~~eir coopera-
tion in assisting the Contractor in I;1eeting its EEO obligations; by
including it in any policy manual and collective bargaining agreement; by
F-S
,
,
I
I
publicizing it in the company newspaper, annual report, etc.; by
specific review of the policy with all management personnel and
with all minority and female employees at least once a year; and
by posting the company EEO policy on bulletin boards accessible
to all employees at each location where construction work is
performed.
g. Review, at least annually, the company's EEO policy and affirmative
action obligations under these specifications with all employees
having any responsibility for hiring, assignment, layoff, termina-
tion or other employment decisions including specific review of
these items wid. onsite supervisory personnel such as Superintendents,
General Foremen, etc., prior'to the initiation of construction work
at any job site. A written record shall be made and maintained
identifying the time and place of these meetings, persons attending,
subject n~tter discussed, and disposition of the subject matter.
h. Disseminate the contractor's EEO policy externally by including
it in any .~dvertising in the news media, specifically including
minority and female newS media, and providing written notification
to and discussing the Contractor IS EEO policy with other Contrac-
tqrs and Subcontractors with whom the Contractor does or antici-
pates doing business.
1. Direct its recruitment efforts, both oral and written, to minority,
female and community organizations, to schools with minority and
female students and to minority and female recruitment and training
organizations serving the Contractor's recruitment area and employ-
ment needs~ Not later than one month prior to the date for the
ac=eptance of applications for apprenticeship or other training
by any recruitment source, the Contractor shall send written
notification to organizations such as the above describing the
openings, screening procedures, and tests to be used in the selection
process.
j. Encourage present minority and female employees to recruit other
minority persons and women and, where reasonable, provide after
school, summer and vacation employment to minority and female youth
both on the site-and in other areas of a Contractor's workforce.
~.'.
k. Validate all tests and other selection requirements where there
is an obligation to do so under. 41 CFR Part 60-3.
1. Conduct, at least annually, an inventory and evaluation at least of
of all minority and female personnel for promotional opportunities
and encourage these employees to seek or to prepare for, through
appropriate training, etc., such opportunities
m. Ensure that seniority practices, job classifications, work assign-
ments and other personnel practices, do not have a discriminatory
effect by continually monitoring all personnel and employment
rela ted acti vi ties to ensure that the EEO policy and the Con tractor 's
F-6
obligations undlr these specifications are beinglcarried out.
n. Ensure that all facilities and company activities are non-
segrated except that separate or single-user toilet and
necessary changing facilities shall be provided to assure
privacy between the sexeS.
o. Document and maintain a record of all solicitations of ofIers
for subcontracts from minority and female construction
contractors and suppliers, including circulation of solicitations
to minority and female contractor associations and other business
associations.
p. Conduct a review, at least annually, of all supervisors' adherence
to and performance under the Contractor 's EEO policies and
affirmative action obligations.
8, Contractors are encouraged to participate in voluntary associations
which assist in fulfilling one or more of their affirmative action
obligations (7a through p). The efforts of a contractor association,
'joint contractor-union, contractor-colIllIluni ty, or other si.Jnilar group
of which the contractor is a member and participant, may be asserted
as fulfilling anyone or more of its obligations under 7a through p
of these Specifications provided that the contractor actively partic-
ipates jn the group, makes every effort to assure that the group has
a positive impact on the employment of minorities and wocen in the
industry, ensures that the concrete benefits of the program are
reflected in the Contractor's minority and female workforce partic-
ipation, makes a good faith effort to meet its individual goals and
timetables, and can provide access to documentation which demonstrates
the effectiveness of actions taken on behalf of the Contractor. The
obligation to comply, however, i~ the Contractor's and failure of such
a group to fulfill an obligation s'hall not be a defense for the
Contractor's noncompliance.
9. A single goal for minorities and a separate single goal for women have
'been established. The Contractor, however, is required to provide
equal emp~oyment opportunity and to take affirmative action for all
minority groups, both male and female, and all women, both minority
and non-minority. Consequently, the Contractor may be in violation
of the Executive Order if a particular group is employed in a substan-
tially disparate manner (for example, even though the Contractor has
achieved its goals for women generally, the Contractor may be in
violation of the Executive Order if a specific minority group of women
is underutilized).
10_ The Contractor shall not use the goals and timetables or affirmative
action standards to discriminate against any person because of race,
color, religion, sex, or national origin.
11. The Contractor shall not enter into any Subcontract with any person
or firm debarred from Government contracts pursuant to Executive
Ord~r 11246.
F-7
..
12. The Contractor stall carry out such sanctions ani penalties for
violation of these specifications and of the Equal Opportunity Clause,
including suspension, termination and ~ancellation of existing sub-
contracts as may be imposed or ordered pursuant to Executive Order
11246, as amended, and its implementing regulations, by the Office
of Federal Contract Compliance Programs. Any Contractor who fails
to carry out such sanctions and penalties shall be in violation of
these specifications and Executive Order 11246, as amended.
13. The Contractor, in fulfilling its obligations under these specifications,
shall implement specific affirmative action steps, at least as exten-
sive as those standards prescribed in paragraph 7 of these specifica-
tions, so as to achieve maximum results from i.ts efforts to ensure
equal employment opportuni ty. If the Contractor fails to comply with
the requirements of the Executive Order, the implementing regulations,
or these specifications, the Director shall proceed in accordance with
41 CFR 60-4.8.
14. The Contractor shall designate a responsible official to monitor all
employmen t related activity to ensure that the company EEO policy is
being carried out, to submit reports relating to the provisions hereof
as may be required by the Government and to keep records. Records
shall at least include for each employee the name, address, telephone
numbers, construction trade, union affiliation if any, employee
identification number when assigned, social security number, race,
sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer),
dates of changes in status, hours worked per week in the indicated
trade, rate of pay, and locations at which the work was perEormed.
Records shall be maintained in an easily understandable and retrievable
for.mi however, to the degree that existing records satisfy this
requirement, contractors shall not be required to maintain separate
records.
IS. Nothing herein provided shall be construed as a limitation upon the
application of other laws which establish di~ferent standards of
compliance or upon the application of requirements for the hiring of
local or other area residents (e.g., those under ~~e Public Works
Employment Act of 1977 and'the Community Development Block Grant
Program) .
F-8
>
'.
; 1
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I
APPENDIX G
OMB
Circular A-110
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:1
OFFICE OF MANAGEMENT AND
BUDGET
[Circular No, A-IlO]
GRANTS AND AGREEMENTS WITH INSTI-
TUTIONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
JULY 1, 1976.
To the heads of executive departments
and establishments.
Subject: Uniform administrative re-
Quirements for grants and other agree-
ments with institutions of higher edu-
cation, hospitals, and other nonprofit
organizations
1. Purpose.-This Circular' promul-
gates standards for obtaining consisten-
cy and unJformlty among Federal agen-
cies in the administration of grants to,
and other agreements with, public and
private institutions of higher education,
public and private hospitals, and other
Quasi-public and private nonprofit or-
ganizations, This Circular does not apply
to grants, contracts, or other agreements
between the Federal Government and
units of State or local governments
covered by Federal Management Cir-
cular 74-7,
2. Effective date,-The standards in
the attachments to this Circular will be
applied as soon as practicable but not
later than January 1, 1977,
3, Superse.ssion.-This Circular res-
cinds and replaces parts III and IV of
the Appendix to Federal Management
Circular 73-7, Administration of college
and university research grants,
4. Policy intent.-Thc uniform stand-
ards and requirements included in' the
attachments to this Circular replace the
varying and often confiicting require-
ments that have been imposed by Fed-
eral agencles as conditions of grants and
other agreements with recipients. '
5. Applicability and scope.-Except as
provided below, the standards promul-
gated by this Circular are applicable to
all Federal agencies. If any statue ex-
pressly prescribes policies or specific re-
quirements that differ from the stand-
ards provided herein, the provisions of
the statute shall govern,
The provisions of the attachments of
this Circular shall be applied to subre-
clpients performing substantive work
under grants that are passed through or
awarded by the primary recipient if such
subreciplents are organizations de-
scribed in paragraph 1.
6, Definitions.
a. The term "grant" means money or
property provided in lieu of money paid
or furnished by the Federal Government
to recipients under programs that pro-
vide financial assistance or that provide
support or stimulation to' accomplish a
public purpose, The term "other agree-
ments" does not include contracts which
are required to be entered into and ad-
ministered under procurement laws and
regulations, Grants and, other agree-
ments exclude (a) technical assistance
programs, which provide services Instead
of money, (b) assistance in the form of
general revenue sharing, loans, loe.n
guarantees, or Insurance" and (c) direct
payments of any kind to individuals.
b, The term "recipient" includcs the
following types of nonprofit organiza-
tions that are receiving Fedcral funds
from a Federal agency or through a
Slate or local government:
Public and private Institutions of high-
er education; public and private hos-
pitals; and othcr quasi-public and pri-
vate nonprofit organizations such as (but
not limited to) community ll,ction agen-
cies, research institutes, educational as-
sociations. and health ccnters,
The term does not include foreign or
International organizations (such as
agencies of the United Nations) and
Government-owned contractor operated
facilities or research centers providing
continued support for mission-oriented,
large scale progmms that are Govern-
ment-owned or controlled, or are de~,
signed as federally-funded research and
development centers.
7. Requests lor exceptions,-The Office
of Management and Budget may grant,
exceptions from the reQuiremlmts of this
Circular when exceptions are not pro-
hibited under existing laws.
However, In the interest of maximum
uniformity, exceptions from the re-
quirements of the Circular v.rill be per-
mitted only in unusual cases, Agencies
may apply more restrictive requirements
to a class of recipients when approved by
the Office of Management and Budget.
8. Attachments,-The standards pro-
mulgated by this Circular are set forth
In the Attachments, which are:
Attachment A Cash '"depositories.
Attachment B Bonding and Insurance,
Attachment C Retention and custodial re-
quirements for records.
Attachmen.t 0 Program Income.
Attachment E Cost sharing lUld matching.
Attachment F Standards for financial man-
agement systems,
Attachment G Financial reporting require-
ments.
Attachment H Monitoring and reporting
program performlUlce.
Attachment I Payment requirements.
Attachment J Revision of financial plans.
Attachment K Closeout procedures.
Attachment L S.uspenslon and termination
procedures.
Attachment M Standard form for applying
for federal ILSSlstance.
Attachment N Property management stand-
ards.
Attachment 0 Procurement standards.
9. Exceptions far certain recipients,-
Notwithstanding the provisions of para-
graph 7 if an applicant/recipient has a
history of poor pcrformance, is not fi-
nancially stable, or Its management sys-
tem does not meet the standards pre-
scribed In the Circular, Federal agencies
may impose additional requirements a.s
needed provided that such applicant/
recipient is notified in writing as to:
a. Why the additional standards are
being imposed;
b. what corrective action is needed.
Copies of such notifications shall be
sent to the Office of Management and
Budget and other agencies funding that
recipient at the same time the recipient
is notified.
10. Responsibilities.-Agencies respon-
sible for administering programs that in-
volve grants and other agreements with
recipients shall issue the appropriate
regulations necessary to implement the
provisions of this Circular. All portions
of such regulations that involve record-
keeping and/or reporting requirements
subject to the provisions of the Federal
Reports Act and OMB Circular A-40
must, be submitted to OMB for clearance
before being introduced into use. Upon
,request all regulations and instructions
implementing this Circular shall be
furnished to tile Office of Management
and Budget. Agencies shall also desig-
nate an official to serve as the agency
representative on matters relating to the
!mplementation of this Circular. The
name and title of such representative
shall be furnished to the Office of Man-
agement and BUdget not later than Au-
gust 30. 1976.
11. lnquiries.-Further informatiOll
concerning this Circular may be obtained
by contracting the Financial Manage-
ment Branch, Budget Review Division,
Office of Management and Budget,
Washington, D.C. 20503, telephonc 395-
3993,
JAMES T. LYNN.
Director.
ATTACHMENT A.-CmcuLAR No, A-lID
CASH DEPOSITORIES
1. This attachment sets fOl'th standards
governing the use of banks and other In-
stitutions as deposltorlcs of funds advanced
under grants and other agreements,
2, Except for situations described In para-
graphs 3. 4, and 5, no Federal sponsoring
agency shall :
a, Require physical segrcgatlon of cash de-
positories for funds which are provided to a
recipient.
b, Establish any eligibility requirements
for cash depositories for funds which are pro-
Vided to a recipient. '.
3, A separate bank account shall be require
when applicable letter-of-credit agreements
provide that drawdowns will be mc.de when
the re<:lplent's checks s.re presented to the
bank for payment.
4. Any moneys adv"nced to a recipient
which are subject to the contr6~ or regula-
tion of the United States or any of Its omcers.
zgents or employecs' (public moneys is de-
fined In TrelLSury Clrculs.r No. 1,76. os
amended) must be deposited In a ban'k with
Federal Deposit Insurance Corporation
(FDIC) Insurance coverage and the balance
exceeding the FDIC coverage must be col-
laterally secured,
5, Consistent with the national goal of
expanding the opportunities for minority
business enterprises, recipients and sub-
recipients shall be encouraged oto use minor-
Ity banks (a bank which Is owned at least 50
percent by minority group members).
ATTACHMENT B,-CmCULAR No. A-IIO
BONDING AND INSURANCE
1. This attachment sets forth bonding and
Insurance requirements for grants and other
agreements with recipients. No other bond-
Ing and Insurance requlremen<ts shall be Im-
posed other than those normally required by
the recipient,
2. Except as otherwise required by law. a
grant or other agreement that requires the
contracting (or aubcontractlng) for con-
strue-tlon or facility Improvements shall pro-
vletp fnr t...,p TP('lnt"'nt. t.n fnllnul It.~ 0n'" .,.p-
I
Office of Management and Budget Circular A-110 (7/30/76)
qulrements relating to bId gue.rantees, per-
formance bonds, e.nd payment bonds unle6ll
the construction contract or subcontract ex-
ceeds UOO,OOO. ,For those coDJtracts or sub-
contre.cts exceedIng $100,000, the Federal
agency may accept the bonding polley and
requlrementll of the grantee provIded the
Federal agency hllo8 made' a determinatIon
that the Government's Interest Is adequately
protected. If such a determInation hlloB not
been made, the mInimum requIrements shall
be lIoB follows:
a. A l1td guarantee Irem each. bidder equtv-
alent to ftve percent 01 th.e bid price.-
The "bId guararutee" shall consist of a firm
commitment such lIoB a bId bond, certl1l.ed
check, or other negotiable Instrument ac-
companyIng a bid 1108 assurance that the bid-
der will, upon acceptance of his bid, execute
such contractual documents as may be re-
quIred withIn the time specl1l.ed.
b, A per/ormance bond on th.e part 01 th.e
contractor lor 100 percent 01 th.e contract
prjce.-A "performance bond" Is one executed
In connection wIth a contract to secure ful-
fillment of all the contractor's obligatIons
under such contract,
c. A pal/ment bond on th.e part 01 th.e con-
tractor lor 100 percent 01 th.e contract
price,-A "payment bond" Is one executed In
connection with a contract to assure pay-
ment as requIred by law of all persons sup-
plying labor and materIal In the executIon of
the work provIded for in the contract.
3. Where the Federal Government guaran-
tees or Insures the repayment of money
borrowed by the recIpIent, the Federal
agency, at Its dtacretlon, may requIre ade-
quate bondIng e.nd tnaurance l! the bonding
and Insurance requirements of the recIpIent
are not deemed adequate to protect the in-
terest of the Federal Government,
4, The Fecl,eral sponsorIng agency may re-
quire adequate fidelity bond coverage where
the recIpIent has no coverage and the bond Is
needed to protect the Government's Interest.
6, Where bonds e.re required In the sItua-
tions descrii>ed above, the bonds shall be ob-
tained from compe.nles holdIng certltlcates of
authorIty as acceptable suretIes (31 CP'R
223),
ATt'ACHIO'NT C,-<:ncuLAll No. A-110
I<rn:NTJON AND C'OSTODIAL IlEQUDtZIO'NTS roB
I<J:COItDS
1. Thts attachment sets forth record reten-
tion requirements for grlUlts a.nd other &gree-
ments wIth recIpIents, Federal sponsoring
agencies shall not Impo8e any record reten-
tion requirements upon recipIents other tha.n
those descrIbed below.
2. Excep1 for paragraph I, thts attachment
also applies to subreclplents ILS referred to
In paragraph II of the blLSlc clrcule.r.
3. F1ne.nclal records, supporting documents,
statistIcal records, a.nd all other records pertI-
nent to an agreement shall be retatned for a
period of three yes.m, wIth the following
qualltlcatlons :
... If lUly litigation. clalm or audit Is started
before the expiration of the 3-year perIod. the
records shall be retained until all litIgations
claims, or audit findings involving the recor~
have been resolved
b, Records for n~nexpendable property ac-
qUired with Federal funds shall be retained
for 3 yean &!ter Its tlnal dlspoeltlon.
c. When records e.re tra.n8terred to or maln-
talned by the Federal sponsoring agency. the
3-year retention requirement Is not applica-
ble to the recIpient.
4, The retention period starts from the
date of the subm1slllon of the final expendi-
t~ report or, tor grants IUld other agree-
ments that e.re renewed an,nually, from the
date of the submlsalon ot the annuAl
ftnlUlclal statw! report.
5. Recipient organizations should be au-
thorIzed b)' the Federal sponsoring agency,
If they 80 desIre. to substitute microtllm
copies In lieu of origInAl records.
6. The Federal sponsoring agency shall re-
quest transfer of certain records to Its CW!-
tody from recipIent orga.n1zatlOns when It
determines that the records possess long-
term retention value. However. In order to
avoid duplicate record-keeping, a Federal
sponsoring agency may malte arrangements
with recelplent organizatiOns to retaln any
records that are continuously needed tor
Joint use.
7. The head or the Federal sponsoring agen-
cy and the Comptro\1er General of the UnIted
States, or any or theIr duly authorized repre-
sentatives. shall have access to a.ny pertinent
books, documents. papers. and records of the
recIpIent organlzatlon and theIr subre-
ciplents to make audIts, examlnatloDII. ex-
cerpts and transcrIpts.
8. Unle&6 otherwise requIred by law, no
Federal sponsoring agency shall place re-
strIctIons on recIpIent organizatIons that will
limIt public access to the records of recIpIent
organizations that are pertInent to a gra.nt
or agreement except when the agency can
demonstrate that such records must bc kept
con!ldentlal e.nd would have been excepted
from disclosure pUrlluant to the Freedom ot
InformatIon Act (6 UB.C. 552) It the records
had belonged to the Federal sponsoring
agency,
A'n'ACHMENT D,-<:mcvLAB No. A-ll0
PIlOGBAM INCOMX
1. Federal sponaorlng ~nc\es shall apply
the standards set forth in thts atte.ohment In
requIrIng recIpIent organlzatlons to account
for program Income related to projects
tlnanced in whole or In part with Federal
funds. Program Income represents gl'Ollll In-
come earned by the recipIent from the fed-
erally supported actlvltles. Such earnings ex-
clude Interest earned on advances e.nd may
include, but wUl not be Ilm1ted to, Income
from servIce fees. sale or commoditles, usage
or rental fees, IUld royaltles on patents and
coprlghts,
2. Interest ee.rned on adVlUlces of Federal
funds sha\1 be remitted to the Federal agency
exeept tor Interest earned on advances to
8tatea or instrumen.talitles of e. State as pro-
vided by the Intergovernmental Cooperation
Act ot 1968 (Public Law 90-377).
3, Proceeds from the sale of real and per-
sonal property eIther provIded by the Fed-
eral Government or purchased In whole or in
part with Federal funds, shall be ha.ndled In
accordlUlu with Attachment N to thts cir-
cular pertatnlng to property management.
4. Unless the agreement provIdes other-
wise, recIpIents shall have no obligatIon to
the Federal Government with respect to
royaltles receIved as a result of copyrIghts or
patents proc\uced under the grlUlt or other
agreement (see paragraph B, Attachment N),
6. All other program Income earned during
the project period shall be retained by the
recIpient and. In accorda.nce with the grant
or other &greement. shall be:
a,' Added to funds committed to the proJ-
ect by the Federal sponsoring agency IUld
recIpIent organization a.nd be u.sed to further
eligIble program obJectives;
b. Used to tlnancethe non-Federal she.re
ot the project when approved by the Federal
sponsoring agency; or
c, Deducted from the total project costs
In determining the net costs on which the
Federal share of costs wUl be based.
ATTACBMJnfT E.-<:mCUL.Ul No. A-110
COST 8HUDfC AND MATCHING
1. Thts attachment sets forth crIteria and
procedures for the a\1owabUlty of cash and
,
A-110:2
In-kInd contrIbutIons made by recIpIents or
subreclplents (ILS referred to In pe.ragraph 5
of the bulc circular) ,-or thIrd parties In sat-
isfyIng cost sharing e.nd matchIng require-
ments of Federal sponsoring agencies. ThIs
attachment also establtshes crIterIa for the
evaluation of In-kind contrIbutions made by
third parties, and supplements the guIdance
set forth In Federal Management CIrcular
73-3 wltlh respect to cost she.rlng on feder-
ally -sponsored research.
2. The fo\1owlng definItions apply for the
purpose of this attachment:
a. Profect costa,-ProJect costs are all al-
lowable costs (as set forth In the applicable
Federal cost princIples) Incurred by a reclpl-
, ent and the value of the In-kind contrIbu-
tions made by the recIpIent or third pe.rtles
In accomplishing the objectIves of the grant
or other agreement durIng the project or pro-
gram perIod.
b. Cost 3h.artng and match.tng.-In general,
cost she.rlng and matchIng represent that
portion of project or program costs not borne
by the Federal Government.
c. Cash. contribuU01U.-Cuh contributions
represent the recIpIent's cash outlay, includ-
Ing the outlay of money contrIbuted to the
recIpIent by non-Federal thIrd pe.rtles,
d, In-ktnd contrll>utkms.-In-klnd contrI-
butions represent the value or noncash con-
trIbutIons provIded by the recIpIent and
non-Federal third partIes. Only when au-
thorized by Federal legislation, may property
purchased wIth Federal funds be considered
1108 the recIpIent's In-kind contrlbutlona, In-
kind contributions may be in the form ot
che.rges for real property and non-expand-
able personal property. and the value of
goods and servIces directly benefiting and
specl1l.cally identl1l.able to the project or
program.
3, General guIdelines for computing cost
sharing or matchIng e.re as tollows:
a. Cost she.rlng or matching may consist,
of:
(1) Charges incurred by the recIpIent as
project costs, (Not all chargllll require cash
outlays by the recIpIent during 1Ihe project
perIod; examples are depredation and use
charges for buUd1ng8 and equipment.)
(2) l'roJect costs financed 'With cash con-
tributed or donated to the recIpient by other
non-Federal publlc agenclea IUld institutIons,
and private organizatIons and Indlvldual&,
and
(3) Project costs represented by servIces
and reallUld per80nal property, or use there-
of, donated by other non-Federal public
agencIes and institutions, and prINate orga-
nizations and indivldual&. '
b. All contributions, both cash and 1n-
kind. shall be accepted &II part of the recipl-
ent.s coet sharing and matching when such
contrIbutions meet all of th'e fo\1owtng
crIteria :
(I) A:re ver111able from the recipIent's
records;
(2) Me not Included ILS contrIbutions for
any other federa\1Y-lLBlItsted program;
(3) Me nec8ll8&ry and reaaonable for prop-
er and emclent acoompllahment of project
obJectives;
(4) Me types of charges that would be al-
lowable under the applicable coet princIples;
(II) A:re not paId by the Federal Govern-
ment under another LIIlIIstance agreement
(unless the &greement Is authorized by Fed-
erallaw to be used for COlIt sharing or match-
Ing);
(6) Are provIded for In the approved budg-
et when required by the Federal agency; and
(7) Contorm to other provisIons of this
attachment.
4. Values for recIpient in-kind contribu-
tIons wUl be Illltabllahed In accordance with
the applicable cost prindples.
II. specl11c procedures for the reclpl~ntsln
establishIng the valu~ of In-kind contrlbu-
I
Office of Management and Budget Circular A-110 (7/30/76)
tlons from non-Federal third parties are set
forth below:
a, Valuation of voluntecr scrvices,-Volun-
teer services may be furnished by professional
and technical personnel, consultants, and
other skllled and unskllled labor, Volunteer
services may be counted as cost sharing or
matching If the service Is an'lntegral and
necessary part of an approved program,
(1) Ratcs for volnntecr scrvices,-Rates for
volunteers should be conslstcnt with those
paid for similar work In the recipient's
organization. In those Instances In which the
required skills are not found In the recipient
organization, rates should be consistent with
those paid for similar work In the labor mar-
ket In which the recipient competes for the
kind of services Involved.
(2) Volunteers employed by othcr organi-
zatiolls,-When an employer other than the
recipient furnishes the services of an em-
ployee, these services shall pc valued at the
employee's regular rate of pay (exclusive of
fringe benefits and overhead costs) provided
these services are In the same skill for which
the employee .Is normally paid,
b, Valuation of donated, expendable per-
sonal property.-Donated, expendable per-
sonal property Inclt\des such Items as ex-
pendable equipment, office supplies, labora-
tory, supplies or workshop and classroom
supplies. Value assessed to expendable per-
sOl~al property Included In the cost or match-
Ing share should be reasonable and should
not exceed the market value of the property
at the time of the donation.
c. Valuation of donated, nonexpencUIble
personal property, buildings, and. land or
use thereof.
(1) The method used for charging cost
sharing or matching for donated nonex-
pendable personal property, buildings and
land may differ according to the purpose of
the grant or other agreement as follows:
(a) It the purpose of the grant or other
agreement Is to assist the recipient In the
acquisition of equipment, buildings or land,
the total value of the donated property may
be claimed as cost sharing or matching.
(b) It the purpose of the agreement Is to
support activities that require the use of
equipment, buildings or land, depreciation
or use charges for equipment and buildings
may be made, The full value of equloment or
other capital assets and fair rental charges
for land may be allowed provided that the
Federal agency has approved the charges.
(2) The value of donated property will be
determined In accordance with the usual
accounting pollcles of the recipient with the
following qualifications:
(a) Land and buildings,-The value of
donated land and buildings may not.,exceed
Its fair market value, at the time of donation
to the recipient as established by an Inde-
pendent appraiser (e,g" certified real prop-
erty appraiser or GSA representatives) and
certified by a responsible official of the
recipient.
(b) NoncxpcncUIble personal pro-perty,-
The Value of donated nonexpendable personal
property shall not exceed the fair market
value of equipment and property of the same
age and condition at the time of donation.
(c) Use of space,-The value of donated
space shall not exceed the fair rental value
of comparable space as establlshed by an
Independent appraisal of companble space
and facilities In a privately-owned building
In the same locality:'
(d) Loancd equipment,-The value of
loaned equipment shall not exceed Its fair
rental value,
6, The following requirements pertain to
the recipient's supporting records for In-
kind contributions from non-Federal third
parties,
a, Volunteer services must be documented
and, to the extent feasible, supported by the
same methods used by the recipient for Its
employees,
b, The basis for determining the valuation
for personal services, material, equipment,
buildings and land must be documented,
ATTACHMENT F,--CmCULAR No, A-110
STANDARDS Fon FINANCIAL MANAGEMENT
SYSTEMS
1, This attachment prescribes standards for
financial management systems of recipients.
Federal sponsorl ng agenclCfi shall not Impose
additlo'nal standards on recipients unless spe-
cifically provided for In the applicable sta-
tutes (e,g" the Joint Funding Simplification
Act, P,L. 93-510) or other attachments to this
circular. However, Federal sponsoring agen-
cies are encouraged to make suggestions and
assist recipients In estballshlng or Improving
financial management systems when such as-
sistance Is needed or requested.
2. Recipients' financial management sys-
tems shall provide for:
a. Accurate, current and complete disclo-
sure of the financial results of each fedcrally
sponsored project or program In accordance
with the reporting requirements set forth In
Attachment G to this circular. When a Fed-
eral sponsoring agency requires reporting on
an accrual basis, the recIpient shall not be
required to esto.bllsh an accrual accounting
system but shall develop such accrual data
for Its reports on the basis of an analysis of
the documentation on hand.
b. Records that Identify adequately the
source and applicatIon of funds for federally
sponsored activities. These records shall con-
tain Information pertaining to Federal
awards, authorizations, obligations, unobli-
gated balances. assets, outlays, and Income.
c. Effective control over and accountability
for all funds, property and other assets. Re-
cipients shall adequately safeguard all such'
assets and shall assure that they are used
solely for authorized purposes.
d, Comparison of actual outlays with bud-
get amounts for each grant or other agree-
ment. Whenever appropriate or required by
the Federal sponsoring agency, financial In-
formation should bl! related to performance
and unit cost data.
e. Procedures to minimize the time elapsing
between the transfer of funds from the U,S.
Treasury and the disbursement by the recip-
Ient, whenever funds are advanced by the
Federal Government. When advances are
made by a letter-of-credlt method, the recip-
Ient shall make drawdowns as close as pos-
sible to the time of making disbursements.
1. Procedures for determlnlng the reason-
ableness, allowablllty and allocability of costs
In accordance with the provisions of the ap-
plicable Federal cost principles and the terms
of the grant or other agreement.
g, "(!counting records that are supported
by source documentation,
h, Examinations In the form of audits or
Internal audits. Such audits shall be made
by qualified Individuals who are sufficiently
Independent of those who authorize the ex-
penditure of Fede~al funds, to produce un-
biased opinions, conclusions or Judgments.
They shall meet the Independence criteria
along the lines of Chapter 3, Part 3 of the
U,S, General Accounting OffIce publication,
Standards for Audit of Governmental Organ-
Izations, Programs, Activities and Functions,
These examinations are Intended to ascer-
tain the effectiveness of the financial man~
agement systems and Internal procedures'
that have been est:,bllshed to meet the terms
and conditions of the agreements, It Is not
Intended that each agreement awarded to the
recipient be examIned, Generally, examina-
tions should be conducted on "n organiza-
tion-wide basis to test the fiscal Integrity of
I
A-110:3
financial transactions, as well as compliance
with the terms and conditions of the Federal
grants and other agreements, Such tests
would Include an appropriate sampling of
Federal agreements, Examinations will be
conducted with reasonable frequency, on a
continuing basis or at scheduled Inlervals,
usually annually, but not less frequently than
every two years, The frequency of these ex-
aminations shall depend upon the nature,
S17'c and the complexity of the actvllty. These
examinations do not relieve Federal agencies
of their audit responsibilities, but may Rlfect
the frequency and scope of such audits,
L A systematic-method to assure timely and
appropriate resolution of audit findings and
recommendations.
3. Primary recipients shall require subre-
clplents (as defined In paragraph 5 of the
basic circular) to adopt the standards In
paragraph 2. above except for the require-
ment In,subparagraph 2e, regarding the use'
of the letter-of-credlt method and that part
of ,subparagraph 2a, regarding reporting
fonns and frequencies prescribed In Attach-
ment, G to this circular.
ATTACHMENT G.-CIRCULAR No. A-lIO
FINANCIAL REPORTIN'G REQUIREMENTS
1. This attachment prescribes uniform re-
porting procedures for recipients to: sum-
marize expenditures made and Federal funds
unexpended for each award, report the status
of Federal cash advanced, request advances
and reimbursement when the letter-of-credlt
method Is not used; and promulgates stand-
ard, forms ,Incident thereto.
2. The following definitions apply for pur-
poses of this attachment:
a. Accrued expenditure!.-Accrued ex-
penditures are the charges Incurred by the
recipient during a given period requiring the
provision of funds for: (1) goods and other
tangible property received; (2) services per-
formed by employees, contractors, subreclpl-
ents, and other payees, and (3) other
amounts becoming owed under programs for
which no current services or performance Is
required,
b. Accrued incO'1le,-Accrued Income Is the
sum of (1) earnlhgs during a given period
from (I) servlces.performed by the recipi-
ent; and (II) goods and other tlUlglble
property delivered to purchasers; and (2)
amounts becoming owed to the recipient for
whlJ<.h no current services or performance Is
required by the recipient.
c. Federal fund! authorized.-Federal
funds authorized are the totnl amount of
Federal funds obligated by th~ Federal Gov-
ernment for use by the recipient. This
amount may Include any authorized carry-
over of unobligated funds from prior fiscal
years when permitted by law or agency
regulation.
d, In-kind contribution.!,-In-klnd con-
tributions are defined In Attachment E to
this circular.
e, Obligati07l3.-0bllgatlons are the
amounts of orders placed, contracts and
grants awarded, services received, and simi-
lar transactions during a given period that
wlll require payment by the recipient during
the same or a future perIod.
f. Outlays,-Outlays or expenditures repre-
sent charges made to the project or program.
They may be reported on a cash or accrual
bnsls, For reports prepared on a cash basis,
outlays are the sum of actual cash disburse-
ments for direct charges for goods and serv-
Ices, the amount of Indirect expense charged,
the value of In-kind contributions applied,
and the amount of cash advances and pay-
ments made to subreclpients, For reports pre-
pared on an accrual basis, outlays are the
sum of actual cash disbursements for direct
charges for goods and services. the amount
of Indirect expense Incurred, the value of In-
I
Office of Management and Budget Circular A-110 (7/30/76)
kind contributions applied, and the net In-
crease Jor decrease) In the amounts owed by
the recipient for goods and other property
received, for services performed by employ-
ees, contractors, subreclplents and other
payees and other amounts becoming owed
under programs for which no current serv-
Icee or performance are required.
g. Program income.-Program Income Is
deftned In Attachment D of this circular, It
may be reported on a cash or accrual basis,
whichever Is used for reporting outlays.
h. unobligated balance.-The unobligated
balance Is the portion of the funds author-
Ized by the Federal sponsoring agency that
has not been obligated by the recipient and Is
determined by deducting the cumulative
obllgatlons from the cumulative funds au-
thorized.
I. Unltquidated obllgatlo1t3.-For reports
prepared on a cash' basis, unliquidated obll-
gatlons represent the'amount of obligations
Incurred by the recipient that has not been
paid. For reports prepared on an accrued ex-
penditure basis, they represent the amount
of obligations Incurred by the recipient for
which an outlay has not been recorded.
3. Only the following forms will be au-
thorized for obtaining tlnanclal Information
from recipients.
a, Firnmcial Statw Report (Exhibit 1),
(I) Each Feders.1 sponsoring agency shs.1I
require recipients to \13e the stands.rdlzed
Flns.ncls.1 Sts.tuS Report to report the status
of funds for all nonconstructlon projects or
programs. The Federal sponsoring s.gencles'
may, However, hs.ve the option of not re-
quiring the Flns.nclal Status Report when
the Request for Advance or Reimbursement
(pars.graph 4a) or Report of Federal Cash
Transactions (paragrs.ph 3b) Is determined
to provide adequate Information to meet
their needs, except that a final l"Ins.ncls.1
Status Report shall be required at the com-
pletion, of the project when the Request for
Advance or Reimbursement form Is used only
for advances.
(2) The Federal sponsoring agency shs.1I
prescribe whether the report shall be on a
cash or accrus.l basis, If the Federal sponsor-
Ing agency requires accrual Information and
the recipient's accounting records are not
normally kept on the accrual basis, the re-
cipient shall not be required to convert Its
accounting system, but shall develop such
accrual Information through best estimates
based on an analysis of the documentatlon
on hand.
(3) The Federal sponsoring agency shall
determine the frequency, of the Financial
Status Report for each project or program
considering the size and complexity of the
partlcular project or program, However, the
report shall not be required more frequently
than quarterly or less frequently than an-
nually except as provided In subparagraph
3a (I) above, A final report shall be required
at the completlon of the agreement.
(4) Federal sponsoring agencies shall re-
quire recipients to submit the Financial
Status Report (original s.nd no more ths.n
two copies) no later than 30 days after the
end of each specified reporting period for
quarterly and semi-annual reports, and 90
days for annual and final reports. Extensions
to reporting due dates may be grs.nted upon
request of the recipient,
b, Report 01 Federal Ca..h Transactions
(Exhibit 2).
(I) When funds are advanced to
recipients through letters of credit or with
Treasury checks, the Feders.1 sponsoring
agencies shall require each recipient to sub-
mit s. Report of Federal Cash Trs.nsa.ctlons.
The Federal sponsoring agency shs.ll use this
report to monitor cash advs.nced to recipients
I\nd to obtain dlsbursement'lnformatlon for
each agreement from the recipIents,
(2) Federal sponsoring agencies may re-
quire forecasts of Federal cash requirements
In the "Remarks" sectlon of the report.
(3) When practlcs.1 s.nd deemed necessary,
the Federal sponsoring agencies may require
receipts to report In the "Remarks" ~ectlon
the s.mount of cash advances In excess of
three days' requirements In the hands of sub-
recipients and to provide short narrs.tlve ex-
plans.tlons of actlons ts.ken by the recipients
to reduce the excess bs.lances.
(4) Recipients shs.1I be required to submit
not more than the orlglns.1 and two copies of
the Report ot Federal Cash Transactions 15
working days following the end ot each
quarter. The Federal sponsoring agencies
may require a monthly report from those
recipients receiving advances tots.lIng $1
million or more per yea.r.
(5) Federal sponsoring agencIes may waive
the requirement for submLsslon of the Report
of Federal Cash Transactlons when monthly
advances 10 not exceed $10,000 per recipient,
provided that such advs.nce3 are monitored
through other forms contained In_J.hls at-
t:!.chment, or If, In the Feders.1 sponsoring
agency's opinion, the recipient's accountlng
controls I\re adequate to minimize excessive
Federal advances. .
4. Except as noted below, only the follow-
Ing forms will be authorized for the reclpl-
en~s In requesting advances and reimburse-
ments,
a. Request lor Advance or Reimbursement
(Exhibit 3).
(I) Each Federal sponsoring agency shall
adopt the Request for Advance or Reimburse-
ment as a sts.ndardlzed form for all noncon-
structlon programs when letters-ot-credlt or
predetermLned advance methods are not used.
Federal sponsoring agencies, however, have
the optlon of using thLs form for construc-
tion programs In lieu of the Outlay Report
and Request for Relmburseme:\t for Con-
structlon Programs (subparagraph 4b).
(2) Recipients shall be authorized to sub-
mit requests for advances and reimburse-
ments at least monthly when letters-of-
credit are not used. Federal sponsoring
agenclcs shall not require the submission of
more than the original and two copLes of the
Request for Advance or Reimbursement.
,
A-110:4
b. Outlay report and request lor reim-
bursement lor construction programs (Ex-
hibit 4),
(I) Each Federal sponsoring agency shall
adopt the Outlay Report and Request for Re-
Imbur,sement tor Construction Programs as
the st:!.ndardlzed format to be used for re-
questing reimbursement for construction
programs, The Federal sponsorlr.g agencies
ml\Y, however, have the option of substitut-
Ing the Request for Advance or ReImburse-
ment Form (subparagraph 4a) when the
Federal agencies determIne that It provides
adequate Information to meet their needs.
(2) Recipients shall be authorized to sub-
mIt requests ror reimbursement at least
,monthly when letters-of -credIt I\re not used.
Federal sponsoring agencIes shall not require
more than the original and two copIes of the
Outlay Report and Request for ReImburse-
ment tor Constructlon Programs.
5. When the Federal sponsoring agencIes
need addltlonal Lnformatlon In using these
forms or mOTe frequent reports, the followIng
sh all be observed:
,a, When additional Informatlon Is needed
to comply wIth leglsls.tlve requIrements,
Federal sponsoring agencies shall Issue In-
structlons to requIre recIpients to submit
such Information under the "Remarks" sec-
tion of the report.~.
b. When necesss.ry to meet specific pro-
gr;>m needs Federal sponsoring agencies shall
submit the proposed reporting requirements
to the Financial MAnagement Branch, Budget
Review Division, Office of Management and
Budget for approval prior to submission of
the reports for clearance under the pro-
visIons of OMB Circular No. A-40,
c. When a Federal sponsorIng agency has
determined that a recipient's accounting sys-
tem does not meet the Standards for FI-
nancial Manageme:\t contained In Attach-
ment F to this cIrcular, additional pertinent
InformatIon to further monItor grants and
other agreements may be obtained upon
written notice to the recIpient until such
time a.s the system 15 brought up to standard.
d. The Federal sponsoring agency, In ob-
tainIng Information as In paragraphs a, b
and c above, must comply with report clear-
ance requirements of the Office of Manage-
ment and Budget CIrcular No, A-40, as re-
vised.
6, Federal sponsoring agencies have the
option of shadIng out any line Item on any
report that Is unnecessary for decision-mak-
Ing purposes.
7, Federal sponsoring agenclee should ac-
cept the Identlcs.l Information from the re-
cipients In machine uss.ble format dr com- puter printouts In !leu of prescribed formats,
8. Federal sponsorIng agencies may pro-
vide computer outputs to recipIents whert It
wlll expedite or contribute to the accuracy
of reportlng.
9. Federal sponsoring agencies are author-
Ized to reproduce these forms. The forms for
reproductlon purposes can be obtained from
the Office of Man3.gement and Budget,
FINANCIAL STATUS REPORT 1. nD[JtAL AGINCY AND OftQAHIZAnOftAL EUMINT TO WHICH MPG'" .1 IU."I'T'nD 2. flD'''''L """NT DfI cm<,. Il>I:NT1n'H" 10MB ApproYed I PAGE OF
HUM.'. No, aO-ROISO I
(Pollow i.utructiO"-' on tlu! back) F'A.GES
J. A[CI~['H ORGANIZATION .(NoM.. IIN e_pl_h odd,..... ,,,ehu'i,,,, ZIP e~1 4. f..nOYI;t 1Df;HT111CATlOH HUMn:Jt s. MCI"tNT AeeGUNT HU...11t OR ID!NTlnING NUM.11lI 6. nNAL Jt[P'ORT 7. IASII
DYES o NO o CASH 0, ACCRUAL
.. PROJECT !GRANT "RlOD (S..l.wtna.e~) ,. ""100 CaVIR[O IY nlll R[PORT
FROM (NOtot". do",. yes,.) I TO IAlO"tA, 114,. ~,.) FROM (Mo"r". Mil'. Il'_rl TO ,M_tA. do". .,.01')
10, STATUS OF FUNDS
(0) (b) (c) (d) (0) (f) TOTAL
PROGRAMS/ FUNCTIONS/ ACTIVITIES ~ (g)
I, Net outlays previously reported $ $ $ $ $ $ $
), Tot., outI.ys this report P<lrlod
.. Lell: Program Income credits
l. Net outlays this report period
(Lin," minuJ lint c) I
I, Net outl.ys to d.te T
(Lin, 0 plu. lin, d) , .
i T
Leu: Non.Federal share of outlays
I, Tot.1 Federal sh.re of autl.ys
(Lino . minu. Cin. /J I
I, Tot., UnllqUldet~d Ob~.tions
L...: Non.Feder.' share of unllquld.ted
oblllltlonl shown on line h
Feder.1 sh.re of unllquld.ted obllgetlon. "
lotel Federel shere of outlays and
unllquld.ted obllg.tlons
Total cumulative amount of Federal fundi
euthort..d
,
", Unobllg.ted b.l.nce of Feder.1 fund.
I. TYPE OF RATE o PROYISlONAL I 0 PRmrr'RMINED 13. aRTl"CATION SIGNATURE OF AUTHORIZED CERTIFYING DATE REPORT
1. (PIM:. "XU in """,.priate bo-z) o "NAL o fiXED I certify to tho best of my knowledge end be- OFFICIAL SUBMITTED
iDu.!eT I c. BASE I d. TOTAL AMOUNT I" FEDERAL .HAR! lief th.t this report I. correct .nd complete .nd
X",HII! b. RATE
th.t .11 outl.ys .nd unllquld.ted obligation. TYPt:D OR PRINTED NAME AND TITLE TELEPHONE (A.." code,
'... Cor the pUrJ>O'" .at forth In the ....rd number and nt,nnOft)
z. REMARKS: Acr..uA .".. n~w- lU"",ct -.-r O'r i"fCPnR4tiot!. r'~u" f)r T___ ~"" ~..wy ,,, eJOtRpUa"lHI wU.\ documents.
"0""''''''17 l,gWtoc,-.
'9-10\ EXHIBIT 1
J
ITMDAIIO FO.... 289 (7-16)
Pr..crtbed by o"'c. of M_n_..m.nt _nd Bud..t
CIRCULAR NO, A.l10
0
-
~
0
Cl)
0
-
~
I>>
::l
I>>
CO
Cl)
3
Cl)
::l
....
I>>
::l
a. -
OJ
r::
a.
CO
Cl)
....
(")
..,
0
r::
I>>
..,
}>
.
....
.....
0
-
"""
.....
Cto)
0
.....
"""
0')
-
-
}>
I
....
.....
!=?
<J1
I
I
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print legibly. Items 1, 2, 3, 6, 7, 9, lOd, lOe, 109, 10i, 101, l1a, and 12 are self.explanatory,
specific instructions for other items are as follows:
Iu... Ell'",
4 Enter the employe, Identlncatlon number assigned by
Ih. U,S. Inl.m.1 Revenue S.rvlc. or FICE (Institution)
cod,. If required by the Federal sponsoring sleney.
5 This spac. II reserved for en account number or other
Idenllfylng numbon Ih.1 m.y bo ...Igned by Ihe
recipient.
8 Enter the month. day. and Y'.' of the beginning and
endl", of this project period. for formula grants thet
are not awarded on I project basis, show the grant
period .
10 Th. purpose 01 vertlc.1 column. (.) Ihrough (I) I. 10
provide financial data for each program. 'unction, and
.ctlvity In Ihe budget .. approved by Ih. Fed.rallpon.
sorlng .gency. It additional calumnIate needed. UM I'
m.ny addlllona' lorm. as needed and Indlcat. p.g.
number In space provtded In upper right; however, the
totals of all programs. functions or activities should be
Ihown in column (g) 01 Ih. IIrsl pag.. For agreemenl.
pert.lnlng 10 sever.1 Catalog 01 Fed.ral OomllSllc
Assistance programs thet do not require I further
lunctlona' or .ctlvl\y cl...lllcalloll breakdown, .nter
und.r column. (a) through (I) Ihe 1IIIe ollhe progr.m.
For grents or other .aslstanee agreements containing
multiple progrllms where one or more programs require
a lurther breakdown by function or .ctlvl\y, us. .
separal. lorm lor each program .howlng Ihe .pplicabl.
functions or activities In the separate columns. For
grl!lnts or other assistancI agreements containing sev.
eral functions or activities which are funded from
several progrems, prepare I ,'parate form for each
.ctlvity or function when requ..led by Ihe Fed.ral
aponsorlng .g.ncy.
lOa Enter Ih. not oullay. Thl. .mount .hould be Ih. .am.
.. Ih. amount r.ported In lIn. 10. 01 tho last report.
11 there has been 8n adjustment to the amount shown
pnrvlousty, pl.... attach .xpl.'nallon. Show z.ro IIlhls
Is Ih. Initial r.port. '
lOb Enl.r Ih. tola' 1fTO'I' program outl.ys (I... rebat..,
",Iund., .nd olh.r discount.) lor Ihl. report period,
Including disbursements of cash realized IS procram
Income. for reports that ar. prepared on I eesh
balis. outlays are the sum of actual cash disburse-
ments for goods and services. the amount of Indirect
expense charged. the value of In.kind contributions
.pplied, .nd Ihe .mounl 01 ca.h .dvance. and
payments made to contractors and subg:rantees. For
reports prepared on an eccrued expenditure basis, out.
lays are the sum of actual cash disbursements. the
amount of Indirect expense incurred. the value 'of In.
kind contributions .pplied, and the net Increa.e (or
decrease) In the .mounts owed by the recipient for
goods and other property received and for lervtees
performed by .mployee., conlracton, lubtlr.ntee., .nd
oth.r pey.es.
Ir- Ell'",
lOe Enter the amount of en program Income realized In
this period that is required by the terms and con.
dittons Of the Federal award to be deducted from total
project costs. for reports prepared on a cash basis.
enter the Imount of cash Income r.ceived during the
reporting period. ror reports prepared on an Iccrua'
basis. enter the amount, of Income earned since the
beginning of the reporting period. When the te"", or
conditions allow program Income to be added to the
total award. explain In remarks, the source, amount
and disposition of the Income.
lot Enter amount pertaining to the non.federal share of
proeram outlays Includad In the amount .~...n line e.
10h Enler lolal amounl 01 unllquld.led obligation. lor thl.
project or program, including unliquidated obligations
to sublrantees and contractors. Unliqu'dated obliga.
tions are:
Ca.h basls-obllg.llon. Incurr.d but notp.id:
Accrued expenditure ba.I....-obllgations Incurred but
for which-an outlay has not been recorded.
00 not include IOY amounts that have been Included
on lines a through .. On the flnal report, line h should
have. zero belance.
101 Ent.r Ihe Foderal share 01 unllquld.ted oblig.tlon.
shown on line h. The amount 5hown on this line should
be the dffterence between the amounts on lines h and I.
10k Enl.r Ih. .um 01 Ih. .mounts .hown on IIn.. g and j.
IIlh. ",port I. IIn.1 Ih. r.port .hould not cont.ln .ny
unllquld.ted obligations.
10m Enler Ih. unobllg.led balance 01 Federal lund., Thl.
amount should be the difference between lines k and l.
lib Ent.r rat. In elfect during Ih. r.portlng period.
t1c Enter Imount of the base to which the nlte was applied.
lid Enler 101.1 .mounl 01 Indlroct cost ch.rged during Ih.
",port period.
11e Enter amount of the federal shue charged during the
report period.
If mo'" than one rate was applied during the project
period, include a separate schedule showinR bases
against which the Indirect cost rates were applied, the
respective Indirect rates the month, day, and year the
Indirect rates were In effect. amounts of Indirect ex.
pense charBed to the project. and the Federal share of
indirect .xpense ch.I1led to Ihe project to dale,
A-110:6
...
I
Office of Management and Budget Circular A-110 (7/30/76)
I
A-110:7
TRANSACTIONS REPORT Approved by Office 01 MonOllemen! ond BudllO!, No, 80-R0182
FEDERAL CASH 1. ~edtral ~sonnl IIeM)' Ind orunilltionlt .1.",.,,1 to which this report
Is submitted
(See instructitm8 on the back, If report is for more than one grant or
assistance agreement, attach completed Standard Form !7!-A.)
2. RECIPIENT ORGANIZATION 4. fed....1 ,rant Of "'h. idenlilice, 5. Recipient's KCOU"t ..umber or
UOft number ldentifyi., .umbor
NGme : 6. Lotter.f uedil .umber 7. last pey"'ertt youch.r "",.,ber
N.....her Give total number for this period
and S'T.et :
8, Po,m..t Vouchen credited I. 9. TrMsury ched. rKeind (wluth er
~r occount .". "", depooited)
Cit". Sl4U 10, PERIOD COVERED BY THIS REPORT
and ZIP Code:
3. FEDERAL EMPLOYER ~ FROM (mo,,'''. doll, ,,""T) TO ("'0"'''. dOli lIeaT)
IDENTIFICATION NO,
a, Cash on hand beginning of reporting period $
b. Letter of credit withdrawals ,
c. Treasury check payments
11. STATUS OF
FEDERAL d. Total receipts (Sum of lines b and c)
CASH e. Total cash available (Sum of lines Q.JLnd d)
f. Gross disbursements
(See specific g. Federal share of program income
instructions
on the back) h. Net disburse~nts (Line f minus line g)
i. Adjustments of prior periods
J. Cash on hand end of period $
12. THE AVlOUNT SHOWN 13. OTHER INFORMATION
ON LINE IlJ. ABOVE,
REPRESENTS CASH RE. a. Interest income $
QUIREMENTS FOR THE
ENSUING
Days b. Advances to subgrantees or subcontractors $
.
14. REMARKS (A ttach additional sheets of plain paper, if more space is required)
15.
SIGNATURE
I certify to the best of my
knowledge and belief that
this report is true in all re-
spects and that all disburse.
ments have been made for
the purpose and conditions
of the grant or agreement
AUTHORIZED
CERTIFYING
OFFICIAL
TYPEO OR. PRINTED NAME AND TITLE
(ATeeI Code)
(N.....ber)
TELEPHONE
THIS SPACE FOR AGENCY USE
272-101
EXHIBIT 2
CERTIFICATION
OATE REPORT SUBMITTEO
(E:c'....i<no)
STANDARO fORM 272 (7-76)
P.-.scribe<l by Offico 01 Monallemen! and Budcet
,..,",.., ,. "" ",.., ~ ,,""
,
,
I
,
Office of Management and Budget Circular A-110 (7130/76)
A-110:8
INSTRUCTIONS
Pleese type or print legibly. Items I, 2, 8, 9, 10, lId, lIe, lIh, and 15 are self explanatory, specific
Instructions for other Items are as follows:
1'-
E1Itry
3
Enter employer identification number anlgned by the
U,S. Internal Revenue Service or the FICE (institution)
code.
If this report covers more than one grant or other
agreement, leave Items 4 and 5 blank and provide the
Information on Standard Form 272-A., Report of Fed.
erel Cash Trensactiofl.--contiMIed; otherwise;
4 Enter Federal grant number, agreement number. or
other Identifying numbers if requested by sponsoring
agency.
5 This space reserved for an account number or other
Identifying number that may be assigned by the re-
cipient.
6 Enter the letter of credit number that applies to this
report. If all advances were made by Treasury check.
enter "NA" for not applicable and leave Items 7 and 8
blank.
7 Enter the voucher number of the Ie,t letter-of.credit
pllyment voucher (Form TUS 54(1) that was credited
to your account.
11a Enter the total amount of Federal cash on hand at the
beginning of the reporting period Including all of the
Federal funds on deposit, Imp,..st funds, and undlt'
posited Treasury ch~.
llb Enter total amount of Federal funds received through
payment voockers (Form TUS 54(1) that were credo
Ited to your account during the reporting period.
Hc EMer the total amount of ell Fedentl funds received
during the reportinc period through rreasury checks,
wtleth<< or not depo5ited.
11f Eftte( the total F~I cash d1sbursements, made
cklrin<< the report4fIc period. Includtng cash received
N protII'am Income. Oi5bursements as used her. also
Include the alnOUM of advances and payments less
refunds to subg.."t..s or oontfactors. the gross
amount of direct MlanN' and wee-. Including the
Efftry
1t~
emplopee's share of benefits If treated as a direct cost,
interdepartmental charges for supplies and services,
and the amount to which the recipient is entitled for
indirect costs.
11g Enter the Federal share of program income that was
required to be used on the project or program by the
terms of the grant or agree":!,!nt.
111
Enter the amount of all adjustments pertaining to prior
periods affecting the ending balance that have not
belln included in any lines above, Identify each grant or
a,reement for which adjustment was made, and enter
an explanation for each adjustment under "Remarks,"
Use plain sheets of paper If additional space is required.
H)
Enter the total amount of Federel cash on hand at the
end of the reporting period, This amount should Include
all funds on deposit, imprest funds. and undepos.ited
funds (line e, less line h. plus or minus line I).
12
Enter the estimated number of deys until the cash on
hand. shown on line HI. will be expended. If more than
three days cash reqirements are on hand, provide an
explanation under "Remarks" as to why the drawdown
wa. made prematurely, or other reasons for the excess
cash. The requirement for the explanation does not
apply to pres~heduled or automatic advances.
13a
Enter the amount of Interest eerned on edvances of
Federal hinds but not remitted to the Federal agency.
If this Includes eny emount earned and not remitted to
the Fecleral sponsorinlagency for over 60 days, explain
under "Remarks." Do not report Interest earned on
advances to States.
13b
Enter amount of advance to secondary recipients In-
cluded in item Hh.
,
14
In addition to providing explanations as required above,
live additional explenation deemed necessary by the
recipient and for infonrnltion required by the Federal
sponsoring agency in compliance with governing legis-
lation, Use plain sheets of paper If additional space il
required.
fl:
"
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:9
FEDERAL CASH TRANSACTIONS REPORT
CONTINUATION
(This /lWm is ctnnplel,.d and atf<uhed to St<tndard Form 171 onlll when
repo-rting m.or6 than MU! gra.nt or Cls8utrtn.ce agreeP7Unt.)
. 2. RECIPIENT ORGANIZATION' (Giv. n'17"" onIlI a.o .hown in item I, SF
171)
'Approved by Olfiee 01 Management one Budo.., No,
80_R0182
1, FEDERAL SPONSORING AGENCY of..NO ORGANIZA,
TIONAL ELEMENT TO WHICH TH~ REPORT IS SUB,
MITTED
3, PERIOD COVERED BY THIS Rff>oRT (A. .hown on SF
171)
FROM I~Onlb. ..... w....)
TO (McttttJl. d4,. wear)
4. List information below tor each grant or other agreement covered by this report. Use additional forms if more space is required.
FEDERAL GRANT DR OTHER I\:)ENTIF I RECIPIENT ACCOUNT NUMBER FEDERAL SHARE OF NET DISBURSEMENTS
eA liON OR aTHER
IDENTIFYING NUMBER NET OlS9URSEMENTS (Cfl-N' CUMULATIVE
fShow " .tibdivi.sion bll other wenti- di'bv:r.....f'''lI .... P"o.""'" i~ NET DISBURSEMENTS
~ing n"mbe.. if ~equired bll tho eo..." ,.,t''''.''') FOR REPORTING
ed..-Bl SpOMonng ,Ag.ncv) PERIOD
1,,1 (bl lel Id\
$ $
-
I
.
-
I .
'\
!i. TOTALS (ShDuld corr..pO?Ui with ,.."",unu .hown on SF 171 CIO
/ollowo: co!u"", (cl the ..."", CIO line Ilh; colwm.n (d) the .""" 0/li"CS1
Ilh a"d I Ii. of this -SF 171 ..n.d cumu!..tiv. disburaemenu .hown on $
'CIOt ..eptwt. Attach .:rplanatio1t o/..nll dig....n"'..) $
272-201
STANDARD FORM 272-A (7-76)
!,~!~~~!h~ by_Offlc._,!,f ManOQemWlt a"td BudD.'
,
Office of Management and BUdgtt Circular A-110 (7/30/76)
I
, -'p~ by Office of MO"Olement ond PAGE Of
REQUEST FOR ADVANCE Budget, No. ~ROl83 PAGEl
.0 .. r' ..... _ ..tA H_. 2, 80\515 Of REQUEST
OR REIMBURSEMENT 1. o ADVANCE o REIMOURSE, o CASH
TYPE OF h(ENT
PAYMENT b. ..~" ... .pptM:.b&. lo.
(Set ift.ltnuhov OR bock) REQUESTED 0 flHAL 0 PARTIAL 0 ACCRUAL
.s. FEDERAL SPONSORING AGENCY AND ORGANIZA tONAL [LEMENT TO .. fEDERAL GRAHT OR OTHER ,s. p;;iffi'AL PAYMENT REQUm-
WHICH THIS REPORT IS SUBMlrrED IDENTIfYING NUMBER ASSIGN EO NUMBER fOR THIS REQUEST
flY nOERAl AGENCY
&. EMPLOYER IDENTIFICATION 1" REClf'1EHrs ACCOUNT HUMOER 8. PERIOD COVERED BY THIS REOUEST
NUMBEIlI OR IDENTIfYING HUMBER FROM (__I).. .... .-r) TO c_1A. M.. .--)
I. RECIPIENT ORGANIZATION 10. PAYEE (W...,...... .. Ie H ....C .. a' ""_. 1"-' ,.... ')
N._ , Ne.A ,
N_Hr N_Hr
..... .,.... , .....:J..._ ,
c.... _ tit.. "''''a
.... ZIP C.... : -... 21fT1:"ed. :
11. CONPUT-.nON OF AMOUNT OF REIMBURSEMEHTS/-'DV,\HCES REOU E'STt:D
(..) (b) (c)
,
PROGRMl5/FUHCTfONS / ACTIVITI ES .. TOTAl
I. Total p...,..m (A. 01 dell.)
_11)'0 to dote $ $ $ $
b. L...: Cumwlltlve l>n>ll..m Income
c. :: r;o-m outleys (Utu . "'......
d, EstImated nat cash outIeys for advanca
period
a. T""" (S......, "".. ..J: d)
f. Hon.fedenl""'", of amount on Hne.
I. Fede,., stMre of amount on line .
h. rode..1 payments previously requested -.
I. red"",1 sha.. now requaatad (LO.... g
.........li....lI)
J. Mvences requirad by lit month
month, """'" requaatad
~ rode.., ...ntor agency
for UN .n ma kina pre.. 2nd month
scheduled advances
3rd month
12.
AlTERNATt COMPUTATlOH F'llft ADVNtCES ONLY
a. Uti....ted Fad..., cash outlays thlt will be mada during period c:ovared by the oclv1lnce
$
b. Lu,: Estimated belanee of Fed.ral cash on hand as of beginning of advance period
c. Amount requeeled (LO.... ......__/iN b)
13.
$
CERTIFlCM'IOfl
SIGNATURE Of' AlITHORlIEO eDiT_niNO OfnCIAL
DATE REQUEST
SUBMITTED
I cattWy that 10 tho be.. of my _edge
and belief the data .boYe are correct and
that all outlays were made in accordance
with the I'rant conditionl or other a......
nMM and that payment il due and ha. not
-.. prwtously requeated,
lYl'€D OR. HINTED NAME AND nTLE
A_ Co4o
N_Hr
...-.-....
TD..E""ONE
'""- __ for ...-r -
210-101 EXHIBIT J
IToUIDARD P'OMI no (7-76)
""'Kr'bed by Offta elf M.",,_Pn*nt .nd au'-
ORCULAR NO. A,1I0
Federal Grants Management Handbook September 1978
A-110:10
"I
Appendix I
i
,
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print legibly, Items 1,3,5,9,10, 11c, lle, 111, llg, 11i, 12 and 13 are self,explanatory;
specific instructions for other items are as follows:
11..... Enl."
2 Indicate whether request Is prepared on cllsh or ac.
crued expenditure basis... All requests for advances
shall be prepared on I cash basis.
4 Enter the federal grent number, or _ other identifying
number ....igned by the 'Feder.1 sponsoring .gency. II
the advence or reimbursement is for more than one
grant or other agreement. Insert N/A; then, show the
aggregate amounts. On II separate sheet. list each
grant or agreement number and the Federal share of
outlays made against the grant or agreement.
6 Enter the emptoyer identification number assigned by
the U,S. Internel Revenue Service, or the FICE (ins\ilu.
tion) code II requested by the Federal .gency,
Thi. space is r.served for an account number or other
Identilyine number th.t may be .ssigned by tha
recipient.
8 Enter the month, d.y, and year lor the beginning and
ending of the pttriod covered in this request. If the ....
Quest is for an advance or for both an advance and reo
Imbursement, show the period that the advance will
cover. If the request Is for relmbul'$ement. show the
period far which the reImbursement is requested.
Note: The Federal sponsoring agencies have the option of
requiring recipients to complete Items 11 or 12, but not
both. Item 12 should be used when only e minimum
amount of informetion is needed to make en advance
and outlay InforTflatlon contained In Item 11 can be
obtained In a timely manner from other reports.
11 The purpose 01 tha venic.1 columns (.), (b), .nd (el, is
to provide spece for seperate cost breakdowns when.
project has been pl.nned ond bvdgeted by program,
function, or activity. If additional columns are n"tied.
It..... Enl."
use as many additional forms .s needed and indicate
page number in space pF'QiVided in upper right; how-
ever, the summary totals of all programs, functions.
or activities should be "hown in the "tota'" column on
the first page.
11a Enter in "as ~f date", the month. day. and year of the
ending of the accounting period to which this amount
applies. Enter program outlays to date (net of refunds,
rebatK. and discounts). in the apprt>priate columns.
For requests prepared on a cash basis. outlays are the
sum of adual cash disbursements for lood~ and serv.
Ices. the amount of indirect expenses cherged, the
value of in.kind contributiO('lJ, epplied. and the amount
of cash edvances and payments made to subcontrac.
tors and subr~ipirmts. For requests prepared on an
accrued expenditure basis. outlays are the sum of the
actual cash disbursements. the amount of Indired ex.
penses Incurred. and the net Increase (or deerease) In
the amounts owed by the recipient for goods and othef'
property raceived end '0( .ervices perfonned by em.
p1oyee', contl1Icts, subgrant..s .nd othar payees,
11 b Ent.r the cumulative cash Income received to date. tf
requests are prepared on a cash basis. For requests
prepareod on an accrued expendtlur. basis. enter the
cumulaUve income earned to date. Under eft her basis.
enter only the amount applicabla to program Income
that WK required to be used 10( the project 0( pro-
,ram by the tenns of the gnllnt or other agreement.
lId Only when making requests for edVllnce peyments,
enter the total estimated amount of cash outlays that
w;1I be made during the period covered by the edvance.
13 Complete the certification before submitting this
request.
A-110:11
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Office of Management and Budget Circular A-110 (7/30/76)
Approved by Office of Management end PAGE or
OUTLAY REPORT AND REQUEST FOR REIMBURSE. Budget, No, So-ROlSl ""OES
MENT FOR CONSTRUCTION PROGRAMS 1. TYPE 0' REQUEST 2. BASIS Of REQUEST
(Set ,nstruetiom 071 back) o FlHAL o PAI!:T1Al o CA'H o ACCRUAL
J. FEDERAL SPONSORING AGENCY AHO ORGANIZATIONAL [UMUfT TO 4. FEDERAL GRAHT OR OTHER s.. PARTIAL PAYMENT REQUEST NO.
WHICH THIS REPORT IS SUBMITTED IDENTlNINQ HUMBEA ASSIGNED
BY fEDERAL AGENCY
L ~~~'aOEYRER IOENnFlCATION /7, RECIPIEHT ACCOUHT OR OTHER Pl..... COI'DI[D I'T nut IlPOlT
IDENTIFYINQ NUMBER
'RO" CM-a. If-'I. .--) TO(II~"'........)
I. RECIPlIENT OROANIZATlON -- 10. ..AYU C"""'" MM" M-w h ...., 1/ ~_.... fA- ..... .)
11.- .- 11_ :
No. ... No. ...
St_ : ...... :
CUI'. au..
Stew aM StY'." ....
~/P Cod.: ZIP C..u:
II. STATUS OF FUNDS
PROGRAMS--FUNCTIONs---ACTIVITIES
C~SSIFlCATION (II) (b) (a) TOTAl
..'
a. Admlnlstrattve expense $ $ $ , $
b. Preliminary expense
c, Land, .tNcture., right.of.way
d. Archltectunll enginearing basic feet
I, Other archltectura' engineering fee.
f. Project In.pectlon f...
g. Land development
h. RelocatJon expense
I, Relocation payments to Indivtduals end
businesses
). Demolttlon and removal .
k. Construction and project Improvement
cost
I. Equipment
-
m. Miscellaneous eost
n. Total cumulative to dete (Ium of linn
athN m)
o. Deductions for program income
p. Net cumulative to ~ate (Linen minus
line 0)
q. Federal share to date
r. Rehabilitation grants (100% reim-
bursement)
., Total Federal share (sum of lines Q
and r)
t, Federal payments previousty ..
quested
u, Amount requested for reimbursement $ $ $ $
v. Percentage of physical completion of % %
project % %
12. CERTIFICATION SICNATURE OF AUTHORIZED CERTIfYING DATE REPORT
OFfiCIAL SUBttUnED
, certify that to the bast of my knowledge
and belief the billed costs or disbu~e- e, RECIPIENT TYPED OR PRINTED NAME AND TITLE TELEPHONE (A.... '*"'-.
ments are In accordaf}ce with the teml$ ...Rb... -.i _1-'-')
0.' the project and that the reimbursement
represents the Federal share due which SIQNATURE Of AUTHORIZED CERTIFYINQ DATE SIGNED
has not been previously requested end OFfICIAL
that an Inspection has been performed b. Representative
I!Ind all work is In accordance with the certifying to line TYPED OR PRINTED NAME AHD TITLE TELEPHONE (Ar_ ~
erms of the award. llv. ",.-.b..- ....., _~)
271-101
EXHIBIT 4
STAHOI.RD fOAM 211 (7-76l
!:'.~~,~ !!Y. f!.rnc;- .0.'... M_"_..m.nt .nd Budplt
A-110:12
"I
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I
Office of Management and
Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type 0( print legtbly. Items 3. 4. 5. S, 9. 10. lis, and 11 v are self-explanatory; specific instructions
tor other Items _ as follows:
#&.we ....."
~rtt tho _"""PI_ looK. " the request Ie line!, ....
a_ ........ _Id ..........,t .... Ii_I coot 01 ....
pooaje&
2 Shew wt\ethw ......unts .... .....".... 8n ... ItCOI"UM
__ er...... <fl'-'IOt_.
, -. .... eMplooyer ldent_ ..um..... ~ by
tho U.S. Int.rnal R_H. s-tco fer f1CE (lnAItubon)
""'. If rwqu_ 1Iv"" Fed.... _J,
7 Tllls .pa... Is __ ..... an aceount number or ett>er
identify.... numMr _ "- ... ...... .... ....
,......nt.
II The _ _ _I _m... ~ tI.."..... (c) Is ""
p_de __ fer _rate _ __ _ a
....~h.._,...n__~by_
........ _ or -Ilr. If _nal alum... are
needed, u.. eo ...any additional ........ os IOMded -
Ioldlcal, _ _r In _ ~ in _ rItrhl;
_. .... -....IY _Ie of .11 ..""""...... fu....
_, or __ .hould t.. __ In lhe """tal"
.....m.. an .... lint .....' All _ are ~ ...
. ......u~ be....
1~ _ _.... -""" fer _ -.. as nwI. lop'
_, ..mal, 01 __ 'M a.. _ edmlnl_
__. .......... tha .m...nt 01_ _
_ a_ by _..... ~Ion, ,... ._
a.. amount of _ __ Oft a _...--.
II" _ _ ,.-mIni eo _ _ 01 _i.. and
ftslcnInc. ....ki.. survwys _ _.... si..kinl -
hol... ancl ell _ _ _I.... prior "" _
....... UIUIA.
]1. _.11 a_lib d~ __ wlth ""'~.
_ of land. "'sli"I 1It__ ... _ rI8ht-of.
-,
]W _...... _ fer _ of OIIIh-.el...,--.
] la Enter elher _Itectum enp.eering _, Do not
Include _ a_ _... line d,
III 1_ ",-,">.. ... _ '"' 01 .._ _
- .....-.
III 1_'" _ __ ....h _ ""-'-" of
_ wh.... th. ,.-.y .....- of _ ...nt i& _
""P--. The _ ......lni..... _ ~
_ IOO<melIy __ with _jor _
_ ... __ ........ ... _.....,. _ .nt_ ...
_k.
11h -.. _ _ _ _ eo...-._
~ .......... and Mt c:osts ef"""r I: men(......
... fleet _). Do not _ _ _ for
.......ion edmint.tretiw .......-; ...... .rnou,..
_ be IMI..- in __"'own on _ a.
Jli Ent.r lh. _nt '" _Ion _ts .... IIv _
~ipient to IUspgoed ~"S. '.rms. busi.... con-
cerns, end ROn."._ ~n~.
,..... W......
III [Mw _ .Ie... ..... __ of ....ploy_ 01 tho
NCIpIent ..... pe~ to third petty contracto", <Ii,
I'OCtIy ~ in performinB demoIIl;.,.. 0( romoYOl 01
slructuros """' developed ....... Aft proc_ from tho
.Ie 01 -'- 0< .... __I 01 sltuCtur.. should be
..-ed "" Ihi& eca>Unt; thereby rellect; nB net
amounts if _Ired I>)' _ Fedo"'IlllOOWY.
Ilk E_ thooo ...-_ auocie\<ld wlth lhe actual con,
*vdion of. addition h>. or restoration of a facility.
Also, Include in Ihis arteso<Y. Iho amounts lor project
Imp_ ouch as ---. streets, I.IOdOCJlpin"
-1IPtl...
III Enter a..-nts ..... .M equlpmelOt. both bed .nd moy,
able, ....,_ of _Ipment ~ lor con.Iruction. For
.....mplo. __ntly attached lebontlory lobi.., built.
In _io ...... systems. Movable desks, ehei"" ond
~ -iPrtMM.
11... !!Mer _ _lib for aft ...... not .pecil\cally m.n.
-_.
11.. Enter the _' cum..latl.. amount 10 d.l. which
_1<1 ...__ot....... throuvh m.
Ua _ _ .- _nt of _ram Incomo applied to
.... _nt or contred ..-n.nt ..eept incom. In'
_ ... _ j. identify .... . ..pe..t. .heel 01 pep&<
_ _ and typM of_ _..
] 1.. _ the not cumulatiw ...-nt to d.lo which .hould
... the amcMtftt ........ on line n minus the amount
... - a.
l1li1 ...... the -... _re 01_ amount shown on II... p.
)1, Enter the _ of rohebll/lation ...nt peymont.
_ "" I.-...Is _n _..m loCi.lallon provides
100 ~ ~ IIv the foderal .....cy.
lit Enter the _ _ of F_..I pe~ts prwlously
--. " _ ...... . _ ..... ""-1 ro4m,
---.
u. ...... _ _ now being roq_ \Dr _roo'
....... ~ en.-nt ahGuId Ita the "i""~nce between
the ........ ...... ... linN . end t. If ditf....nt. ex.
,-..a__--
I" To tie Mmpleted IIy _ rac:IpIent oIIIcIoI who Is ro'
__ \Dr the _n 01 .... P_""", Tho d.I.
-.... ... the _ _. the ...... I. submitted 10 Ih.
f__,
121> To'" oempl_ Ilr _ oIIlclaI ..p....nt.tl..
_ i& ~Ify;ng 10 .... pwcont 01 project compl.Iion
as prwwkfod for in .... ....... of the .",nl Of' alreem.nl,
A-110:13
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Office of Management and Budget Circular A-110 (7/30/76)
ATTACHMENT H.-CIRCULAR No. A-lIO
MONITORING AND REPORTING PROGRAM
PERFORMANCE
1. This attachment sets forth the proce-
dures for monitoring and reporting program
performance of recipients.
2. Recipients 'shall monitor the performa:lce
under grants and other agreements and,
where appropriate, ensure that time sched-
ules are being met, projected work units by
time periods are being accompllshed, and
other performance goals are being achieved.
This review shall bc made for each program,
function, or activity of each agreement as set
forth In the approved appllcatlon or award
document.
3, Recipients shall submit a performance
report (technical report) for each agreement
that brlefiy presents the following Informa-
tion for each program, function, or activity
Involved as prescribed by the Federa\. spon-
soring agency:
a. A comparison of actual accompllshments
with the goals established fO,r the period, the
findings of the Investigator, or both. H the
output of programs or projects can be readily
quantified, such quantitative data should
be related to cost data for computation of
unl t costs.
b. Reasons why established goals were not
met.
c. Other pertinent Information Including,
when appropriate, analysis and explanation
of cost overruns or high unit costs.
, 4. Except as provided In a and b ,below,
and In subparagraph 3a{ 1), Attachment G,
recipients shall submit the performance or
technical reports to Federal sponsoring agen-
cies and the Financial Status Reports cov-
ering the same period In the frequency estab-
lished by Attachment G of this Circular and,
where appropriate, a final technical or per-
formance report after completion of the
project on a date specified by the Federal
sponsoring agency. The Federal sponsoring
agency shall prescribe the frequency with
which the performance reports will be sub-
mitted with the request for advance or reim-
bursement when that form Is used In lieu
of the Financial Status Report. Except as pro-
vided for In paragraph 5 below, performance
reports shall not be required more frequently
than quarterly or less frequently than an-
nually. Federal sponsOring agencies may
waive the requirement for recipients to sub-
mit performance reports with the financial
reports under the following circumstances:
a. When the recipient Is required to sub-
mit a performance report with a continua-
tion or renewal appllcatlon.
b, When the Federal sponsoring agency de-
termines that on-site technical Inspections
and certified completion d~.to. wll1 be suffi-
cient to evaluate construction projects.
c, When the Federal sponsoring agency re-
quests annual financial reports on a fiscal
year basis but It Is necessary to get annual
prcgress reports on a calendar year basis.
5. Between the required performanr.e re-
porting dates, 'events may occur that have
significant Impact upon the project or pro-
gram. In such Instances, the recipient shall
Inform the Federal sponsoring agency as soon
as the following types of conditions become
known:
a, Problems. delays. or adverse conditions
that will materially affect the ablllty to at-
tain program objectives, prevent the meet-
Ing of time schedules and goals, or preclude
the attainment of project work units by es-
tabllshed time periods, This disclosure shall
be accompanied by a statement of the action
taken, or contemplated, and any Fedcral as-
sistance needed to resolve the situation.
b. Favorable developments or events that
enable time schedules to be met sooner than
anticipated or more work units to be pro-
duced than originally projected.
6. If any performance review conducted
by the recipient discloses the need for change
In the budget estimates In accordance with
the criteria establlshed In Attachment J Co
this Circular, the recipient shall submit a re-
quest for budget revision.
7. The Federal sponsoring agency shall
make site visits as frequently as practicable
to: '
a. Review program accompllshments and
management control systems, and
b. Provide such technical assistance as
may be required.
8, Federal sponsoring agencies shall submit
proposed technical and performance reports
to the Office of Management and Budget for
approval In accordance with the report clear-
ance requlrements of OMB Circular No. A-40
as revised.
ATTACHMENT r.--GmcuLAR No. A-lIO
PAYMENT REQUIREMENTS
1. This attachmen t esta.b1lshes the re-
quired methods of makIng payments to recip-
Ients. These methods will minimize the time
elapsing between the disbursement by these
recipients and the transfer of funds from the
United States Treasury to these recipients
whether such d'lsbursement occurs prior to
or subsequent to the transfer of funds.
2. Payments can be made to recipients
through a letter-of-credlt, an advance by
Treasury check, or a reimbursement by Treas-
sury check. The following definitions apply
for the purpose of this attachment:
a. Letter-ol-Credit,-A letU!r-of-credlt 15
an Instrument certified by an authorized offi-
cial of a Federal sponsoring agency that au-
thorizes a recipient to draw funds when
needed from the Treasury, through B Fed-
eral Reserve bank and the recipient's com-
mercial bank, In accordance with the provi-
sions of Treasury Circular No. 1075, as re-
vised.
,b. Advaru:e by Treasury check.-An ad-
vance by Treasury check 15 a payment made
by a Treasury check to a recipient upon Its
request before outlays are made by the
recipient, or through the use of predeter-
mined payment schedules.
c. Reimbursement by Treasury check.-A
reimbursement by Treasury check Is a Treas-
ury check paid to a recipient upon request
for reimbursement from the recipient.
3. Except for construction grants and
other construction agreements for which op-
tional payment 'methods are authorized. as
described In paragraph 5, the letter-of-credlt
method shall be used by Federal sponsoflng
agencies It all of the following conditions
exist:
a. If there Is or w111 be a continuing rela-
tionship between a recipient and a Federal
sponsoring agency for at least a 12-month
period and the total amount of advance pay-
ments expected to be received within that pe-
riod from the Federal sponsoring agency Is
$250,000 or more, as prescribed by Treasury
Circular No. 1075. For joint funded projects
the Treasury has authorized a dollar criteria
of $120,000.
b. if the recipient has est'abllshed or'dem-
onstrated to the Federal sponsoring agency
the wllllngness and ability to maintain pro-
cedures that will minimize the time elaps-
Ing between the transfer of funds and their
disbursement by the recipient.
c. If the recipient's financial management
system meets the standards for fund con trol
and accountablllty prescribed In Attachment
F to this Circular, "Standards for Financial
Management Systems."
4. The method of advancing funds by
Treasury check shall be used, In accordance
with the provisions of Treasury Circular No,
I
A-110:14
1075, when the recipient meets all of the re-
quirements speCified In paragraph 3, above,
exccpt those In subparagraph 31',
5. The reimbursement by Treasury check
mcthod shall be the preferred method If the
recipient does not meet the requirements
specified In subparagraphs 3b and 3c, above.
At the option of the Federal sponsoring
agency, this method may also be used on any
construction agree men t, or If the major por-
tion of the program 15 accomplished through
private market financing or Federal loans,
and the Federal assistance constitutes a
minor portion of the program. When the re-
Imbursement method 15 used, the Federal
sponsoring agency shall make payment
within thirty days after receipt of the bll1lng,
unless the bllllng Is Improper.
6, When the letter-of-credlt procedure Is
uscd, the recipient shall be Issued one con-
solidated letter-of-credlt, whenever possible
to cover anticipated cash needs for all grants
and other agreements awarded by the SpOll-
sorlng agency. Likewise, to the extent possi-
ble, when tl'le advance by Treasury check
method 15 used, advances should be cun-
solltlated (pooled) for all grants and other
agreements made by the sponsoring agency
to that recipient, ' ,
7. Unles3 otherwise required by law, Fed-
eral sponsoring agencies shall not withhold
paym~nts for proper charges made by recipi-
ents at any time during the project or pro-
gram period unless (a) a recipient has failed
to comply with the program objectives. award
conditions, or Federal reporting require-
ments; or (b) the recipient Is Indebted to
the United States, and collection of the In-
debtedness will not Impair accomplishment
of the objectives of a project or program
sponsored by the United States.
Under such conditions, the sponsoring
agency may, upon reasonable notice, Inform
the recipient that payments will not be m&de
for obligations Incurred after a specified date
un tll the conditions are corrected or the In-
debtedness to the Federal Government Is
liquidated.
ATTACHMENT J.--GmCULAR No. A-1I0
REVISION OF FINANCIAL PLANS
1. This attachment sets forth criteria and
procedures to be followed by Federal spon-
soring agencies In requiring recipients to re-
port "deviations from financial plana and to
request approvals for financial plan re~
visions.
2. The financial plan Is the financial ex-
pression of the project or program as ap-
proved during the application and/oJ" .ward
process, It may Include either the Federa' and
non-Federal share, or only the Federal share;
depending upon sponsoring agency requlre,-
ments. It should be related to performance
for program evaluation purposes whenever
appropriate and required by the Federal
sponsoring agency,
3. For nonconstructlon awards, recipients
shall Immediately request approvals from
Federal sponsoring agencies when there Is
re"son to believe that within the next seven
days a revision will be necessary for the
following reasons:
a. Changes In the scope or the objective of
the project or program.
b. The need for additional Federal fund-
Ing,
c. The transfer of amounts budgeted fcr
Indirect costs to absorb Increases Indirect
costs or vice versa, If approval Is required
by the Federal sponsoring agency.
d, The expenditures as require approval In
accordance with FMC 73-a. "Cost Principles
ror Educational Institutions." For all other
awards, approval requirements for other
Items of expenditures may be Imoosed If they
are consistent with those In FMC 73-a, No
other requirements for specific Items may be
~, ~
J
Office of Management and Budget Circular A-110 (7/30/76)
Imposed unless a deviation has been ap-
proved by the OIDce of Management and
Budget.
e. Recipients plan to transfer funds allotted
for training allowances (direct payments to
trainees) to other categories of expense.
4, None of the substantive programmatic
work under a grant or other agreement may
be subcontracted or transferred without prior
approval of the Federal sponsoring agency.
This provision does not &l'ply to the purchase
of supplles, material, equipment, or general
support services,
5. The Federal sponsoring agency may
also, at Its option, restrict transfers of funds
e.mong direct cost categories for award6 In
which the Federal share exceeds $100,000
when the cumulative amount of such traru;-
fers exceeds or Is expected to exceed five
perqsIlt of the total budget as last approved
by the sponsoring agency, The same criteria
shall apply to the cumulative amount of
transfers among prognwDfl, functions, and
aotlvltles when budgeted separately for an
award, except that the Federal sponsoring
agency shall pennlt no transfer that would
cause any Federal approprla.tlon, or part
thereof, to be used for purpolle6 other than
th06e Intended. '
6. All other changes to nonconstructlon
budgets, except for the changes described
In paragraph 8, below, do not require ap-
proval. This Includes the use of recipient
funds In furtherance of progra.m objectives
over and a.bove the recipient mlnlmum share
Included In the approved budget.
7. For construction awards, recipients
shall request prior approvals promptly from
Federal sponsoring agencies for budget re-
visions wherever:
a. The revision results from changes In
the scope or the objective of the project or
program, and
b. The revision Increases the budget
amounts of Federal funds needed to com-
plete the project.
8. When a Federal sponsoring agency
makes an award that provides support,for
both construction and nonconstructlon work,
the Federal sponsoring agency may require
the recipient to request prior approval from
the Federal sponsoring agency before m~klng
any fund or budget tr-ansfers between the
two types of work supported.
9. For both construction and nonconstruc-
tlon awards, Federal sponsoring agencies
shall require recipients to notify the Fed-
eral sponsoring agency promptly whenever
the amount of Federal authorized funds Is
expected to exceed the needs of the recipient
by more than $5,000 or t1vepercent of the
Federal award, whichever Is greater. This
notification wUl not be required U applica-
tions for additional funding are submitted
for continuing grants or contracts.
10. When requesting approval for budget
revisions. recipients shall use the budget
fonns that were used In tbe appllcatlon
unless a letter request will suIDce,
II. Within 30 calendar days from the date
of receipt of the request for budget revi-
sions, Federal sponsoring agencies shall re-
view the request and notify the recipient
whether the budget revisions have been ap-
proved, rr the revision Is stili under con-
sideration at the end of 30 calend~r days,
the Federal sponsoring agency shall lnIorm
the recipient In writing of the date when the
recipient may expect the decision,
ATTACHMENT K.--CIRCUW No, A-IIO
CLOSEOUT PROCEDURES
1. This attachment, prescribes uniform
closeout procedures for Federal grants and
other agreements with recipients.
2. The following definitions shall apply for
the purp06e of this attachment:
a. Closeout.-The closeout of a grant
agreement 18 the process by which a Federal
sponsoring agency determines that all ap-
pllcable admlnlstratlve actions and all re-
quired work of the agreement have been
completed by the recipient and the Federal
sponsoring agency.
b, Date 01 compIeUon.-The date of com-
pletion Is the date on which all work under
grants and other agreements Is completed or
the date on lhe award document, or any
, supplement or amendment thereto, on which
Pederal sponsorship end6.
c, Duallowed co3b.-Dlsallowed lXX'lt& are
tbose charges to a grant or other agreement
that the Federal sponsorIng agency or Its
representative determines to be unallow-
able, In accordance with the applicable Ped-
'eral lXX'lt principles or other conditions con-
tained In the agreements,
3. All Federal sponsoring agencies shall es-
tablish closeout procedures that Include the
following requirements:
a. Upon request, the Federal sponsoring
agency shall make prompt payments to a
recipient for allowable reimbursable costs
under the grant or other agreement being
closed out.
b. The recipient shall immediately refund
any balance of unobllgated (unencumbered)
c!lSh that the Pederal sponsoring agency has
advanced or paid and that Is not authorl7.ed
to be retained by the recipient for use In
other grants or other agreements,
c. The Federal sponsoring agency shall ob-
tain from the recipient within 90 calendar
days after tbe date of completion of tbe
agreement all flnanclal, performance, and
other reports required as the condition of the
agreement. The agency may grant extensions
when requested by the recipient,
d. When authorized by the grant or other
agreement, the Federal sponsoring agency
sball make a settlement for any upward or
downward adjustments to the Federal share
oC costs after these reports are received.
e, The recipient s~all account for any prop-
erty acquired with Federal funds. or re-
ceived from the Government In accordance
with the provisions oC Attachment N to this
Circular, Property Management Standards.
f, In tbe event a final audit has not been
performed prior to the closeout of the grant
or other agreement, the Federal sponsoring
"geney shall retain the right to recover an
appropriate amount after Cully considering
tbe recommendations on disallowed costs re-
sulting from the final audit,
4, Suspension and termination procedures
are contained In Attachment L to this Cir-
cular.
ATTACHMENT L,-CDlCULAR No, A-1I0
SUSPENSION AND TERMINATION PROCEDUlI.I:S
1. This attachment prescribes uniform
suspension and termination pr:.cedures for
Federal grants and other agreements with
recipients.
2. The following deflnltlons sball apply
Cer the purpcse oC tbls attachment:
a. Termination,-The termination oC a
grant or other agreement means the can-
cellation of Federal,sponsorshlp, in whole or
In part. under an agreement at any time
prior to the date of completion.
b, SU3pension,-The suspension of a grant
or other agreement Is an action by a Federal
sponsoring agency that temporarUy sus-
pends Federal spons:.rshlp under the grant
or other agree~ent, pending corrective ac-
tion by tbe recipient or pending a decision
to terminate the grant or other agreement
by the Federal sponsoring agency,
iJ. All Federal sponsoring agencies shall
provide procedures to be followed when a
recipient has faUed to comply with the terms
I
A-110:15
of the grant or other agreement and condi-
tions or standards. When that occurs, the
Federal sponsoring agency may, on reason-
able notice to the recipient, suspen,d the
grant or other agreement, and withhold fur-
ther payments, prohibit the recipient from
Incurring additional obllgatlons of funds,
pending correctlve action by the recipient, or
a decision to termination In accordance with
paragraph 4. The Federal sponsoring agency
sball allow all necessary and proper costs
that the recipient could not reasonably avoid
during the period oC suspension provided that
they meet the provisions of the applicable
Pederal cost principles.
4. Federal sponsoring agencies shall pro-
vide for th& systematlc settlement oC ter-
minated grants or other agreements Includ-
Ing the following:
a. Termination lor cause.-The Federal
sponsoring agency may reserve the right to
terminate any grant or other agreement In
whole or In part at any time before the date
of completion, whenever It Is determined that
the recipient has failed to comply with the
conditions of the agreement, The Federal
sponsoring agency shall promptly notify the
recipient In writing oC the determination and
the reasons for the termination, together
witb tbe effective date. Payments made to
recipients or recoveries by the Federal spon-
soring agencies under grants or other agree-
ments terminated for cause shal1 be In ac-
cordance with the legal rights and lIabllltles
oC the partles.
b. Termination lor convenience.-The Fed-
eral sponsoring agency or recipient may ter-
minate grants and other agreements In whole
or In part when both parties agree that the
continuation of the project would not pro-
duce beneflclal results commensurate with
the further expenditure of funds. The two
parties shal1 agree upon the termination con-
ditions, Including the effective date and, in
the case of partial terminations, the portion
to be terminated. The recipient shall not
Incur new obligations tor the terminated por-
tion after the effective date, and shall can-
cel as many outstanding obligations as pos-
sible. The Federal sponsoring agency shall
allow full credit to the recipient for the
Federal share of the noncancel1able obliga-
tions, properly Incurred by the recipient prior
to termination.
ATTACHMENT M.-CIRCULAR No. A-110
STANDARD FoaM FOR APPLYING FOR
FEDERAL ASSISTANCE
1. This attachment promulgl\tes a stand-
ard Corm (SF 424) to be used by publlc and
'private InstltutloIllS of higher educatlon,
public and private hospitals and othtr quasl-
publ1c and private nonprofit organizations as
a face sheet for applications when applying
for Federal grants under programs covered
by Part I, Attachment A, OMB Crlcular No,
A-95, In addition, agencies are particularly
encouraged to etxend the use of SF 424 to
common programs with State and local gov-
ernments where this form Is now required by
FMC 74--7,
2. The SF 424 may also be used, on an 01'-
tlonal basis, to fulfill the requirements of
OMB Circular A-95 for a notification of In-
tent, from applicant to clearinghouses, that
Federal assistance wl11 be appl1ed for. Local
or State clearinghouse procedures wUl govern
the use of the form for this purpose,
3, The standard form wl11 also be used hy
Federal agencies to report to the clearing-
houses on major actions taken on applica-
tions reviewed by clearinghouses In accord-
ance with OMB Circular A-95, and to notify
States of grants-In-aid awarded In accord-
ance with Treasury Circular 1082.
I
Office of Management and Budget Circular A-110 (7/30/76)
I
A-110:16
OMB App,.,..AI No. Z9-ft0UI
FEDERAL ASSISTANCE z. M>PlI. A. 1IVM8ER 3, STATI .. 1tUtIlER
APf'UClJ..
eANT"S nON
1. TYPE ,0 PREAPPlICATlON A"PU. b, !tAl( IDENn- b, OA n: r..... _II< ....w
01' eATIOtt T_ - ... "VI
ACTION o APPlJOA11ON 19 ASSIGNED IV
(1lI__s>- o NOTIFICATION OF IN1lJCT ('()pt.) L......
Cr-u Ei REPORT Of f[OERAL ACTION lllo..1l
4. LEGAL APPLICANT/RECIPIENT 5. 'ItOEAAl EM-PLOyltt IOEtCTtl'tCATlON NO,
., Applicant N..... :
., O,..niLlllo. U.lt : 6. I I I. I I I I
.. St,HI/P .0. Box ; PRO. .. NUIIBER
d. City L ....1)' GRAM b, Tln.E
: :
(Fr"",
I. S\Me : ., ZIP Code: Fed...al
h. Conlaot plt'IOft lNo_ C..ealo,1
c .. ....,."..... No.) :
...
i1 7. TITLE AND OESCRII"TION Of AppLICANrl PROJIlCT 8. TYPt: ,01' ....,.P..IOAN'f/RECIPIENT
~ I.-State ~..u.lt)' Adl.. "'-
8-1_10 '," t ,~~~~:' T~d=-lIon~ hMlltution
I C- Subltalo
Dlotricl K-Qtftw (S".ri/lfl:
O-(ounl)'
E-CIl)' ,
f- $ellool Dlftrtd
~ 1-3J:'~ ""- S..14f" .,.,....,.,;0.. Jolin- D
.. TYPt: Ol' ASllISTANCI
-"-II ;....t 0-........_.
i 8-..""'....... ...ot ~h" ."t..r G~ rn
C4.0a. ".wll I.114f"(1)
10. AREA 01' PftOJBCT IMPAC,. (N....... of _. 1__. ll'uF 12. TYPI Of' APf'UeATlON
SIG"". ...,) BER NI _... C-RwI.IoA (~I_IaIl..
Bltfl TIN .....n....1 D--Co.t1.uatlon ERe..,. .pproprioh I'.U~ 0
U. PI'lOfflS'EO PUN-DINS 14. CONGR[SIfoNAL DISTRICTS OF: 15. TYPE Of CHANG!: (F... 1" ... U.)
S ., AP!'UDANl' ~ '1lO118t I.-In.r.... DeH,," ~lher (S,..elfw):
I. Fell'ER"l ." I-{l__ DoI'.n
&-1....... Du.-.lllAl
b. APPLICANT ,08 9-0-.... O...U..
111. ~JECT START n. ItftQJECT (~....II.tl..
I. STATE ,00
1M Ii: r.... -u. do. DURATION ."e.n- appro- o=r=J
d. lOCAl .00 1V M...n.. priou ..ltor!.)
.. OTHER .00 11. UTlMATttO DATi: TO -'-- -u. dow IV. EXISTING I'EDERAL IDENTIFICATION NlIMBER
BE SUB-MItrED TO
I. TOTAl. $ .00 fEDERAL MINCY ~ 19
20. I'EDERAL AGENCY TO RECEIVE REQUEST (^'-, CfItl, 8_ 111I1' ~ 21. REMARKS ADDED
o Vas 0 No
! 22, I. To It.. best 01 trr1 knowl"'.. ..d MlloI. .. .':".'r iii':.?':" ",Ci~.1 ,'t:'I::e~...::;'".:i':':.';'~..PU.':":~'d.;;; N. r.- R..,........
data illl thi. _p1iutlon/.ppllcall... ... .J><>ft41 al'-"M/1
i THE true I"d corrHt, Ill. doc4l..Oftt h.. _
APPLICANT duly nthori.... .., Ill. 100000i., bodr 01 0 0
~ CEI'lT"'IES tho applicant .nd Ill. Appli..", wiN -.lr (I)
THAT ~ willi Ill. .tteeltM __ It tile ___ lit 0 0
1 an.. .. Ipprvyed. (3) 0 0
.
Pi 23. a. TYPED HAM! AIIO TIM ~ IIINATlJRE .. DATE SIGftED
CERTIFYING Y..r ......u. cIOw'
i REpRE. )9
SENTATlVE 1
14. MlItNCY KAME: :n. APpLICA. l'_ __ -..W
TlON
RECEIVED 19
26. ORGANIZATIONlAL. UNIT 11. AOMINIST~TIV[ OI'I'IC[ 21. I'EDERAL APPLICATION
I IDENTIfiCATION
29. ADORESS MI. I'EDERAL GRANT
i IOENTlFICATlON
I 31. ACTION TAK[N U. 'UHDINCI r_ ~ H" 14. Y.... -- ..."
I a. PII)fAAL $ .00 U. ACTION DATE ~ .,. ARTING
o a. AWAAOEO )9 DATE 19
~ o b, REJICT&O .. Al'l'ltCAltT .00 I" ~TM:T I'Oft AODlTtoHAL ,"'ortIllA. 36. r.- m 0fttA ""
ION IN_- 0004 ....~ ...........) [NDING
o c. Jl[lUMID POll .. SlATE .00 DATE 19
AM EHDt.tlHT d. low. .00 37. REMARKS ADDED
! o 11, DEfIlRRI!ll .. ()f1tIlt .00
G o A, WITKDIlAWll o V.a nNo
rc I. TOTAl $ .00
38. A, ,. Ialdnl ..... AoIIOII. 'o, _...... -'wd ..... d.'ln,__ WWI -- b. ftllERAl IlGEHCY A-9l OffiCiAl
tld"ed. II 'r:'Lw..-" II tIooI .... ~ 01 hit 1.,0 8 Cln:ool., A-8i, INo.... .owI ....~ "".)
I'EOE:RAL AGENCY It .... .... .. .. -.Ie.
.0.-95 ACnON
BTAHDARD fORM 424 PAGE: ) (l0-71M
~ .
1
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:17
SECTION IV-REMARKS (PleCllle nferenu tlu proper item "umber from SutioM I, II Of' III, if a.pplicabl.)
'\
STANDARD FORM 424 PAGE 2 (10-75)
]
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:18
GENERAL INSTRUCTIONS
This is a multi-purpose standard form. First, it w:'1 be used by applicants as a required facesheet for pre-
applications and applications submitted in accordance with Federal Management Circular 74-7. Second, it will
be used by Federal agencies to report to Clearinghouses on major actions taken on applications reviewed by
clearinghouses in accordance with OMS Circular A-95. Third, it will be used by Federal agencies to notify
States of grants-in.aid awarded in accordance with Treasury Circular 1082. Fourth. it may be used. on an
optional basis, as a notification of intent from applicants to clearinghouses, as an early initial notice that Federal
assistance is to be applied for (clearinghouse procedures will govern).
APPUCANT PROCEDURES FOR SECT10N I
Applicant will complete all items in Section I. If an ,Item is not applicable, write '"NA". If additional space Is needed. insert
an asterisk ...... and use the remarks section on the back of the fonn. An explen8tion follows for each item:
Item
1. Mark appropriate box. Pre-appllcatlqn and applica-
tion guidance is in FMC 74-7 and Federal qency
program instructions. Notlflottion of intent flUid-
ance is in Circular A-95 procedures from clear-
inghouse. Applicant will not use '"Report of Federal
Action" box.
2a. Appllcant's own control number, If desired.
2b. Date SectIon I is prepared.
3a. Number assigned by State clearinghouse, or If dele-
gated by State, by areawide clearinghouse. All re-
quests to Federal agencies must contain this identi-
fier If the program is covered by Circular 1.-95 and
required by applicable State/areawide clearing-
house procedures. If in doubt. consult your deer.
inghouse.
3b. Date applicant notified of cle(lrlnghouse Identifier.
4a-4h. legal name of applicant/recipient. name of primary
organizational unit which will undertake the assist.
ance activity, complete eddress of applicant. a~
name and tolephone number of person who can pr0-
vide further information about this request.
5. Employer identification number of applicant as as.
signed by Internal RlMlnlle ServIc:e.
68. Use Catalog of Federal Domestic Assistance num-
ber assigned to program under which assistance is
requested. If more than one program (e.g., joint-
funding) write '"multiple'" and explain in remarks.
If unknown, cite Public law or U.S. Code.
6b. Program title from Federal Catalog. Abbreviate If
necessary.
7. Brief title and appropriate description of project.
For notification of intent. continue In remarks sec.
tion if necessary to convey proper description.
8, Mostly self-explanatory. '"City" includes town, town-
ship or other municipality.
g, Check the type(s) of assistance requested. The
definitions of the terms are:
A.. Basic Grant. An original request for Federal
funds. This would not include any contribution
provided under a supplemental grant.
B, Supplemental Grant. A request to Increase a
besic grant in cer:tain cases where the eligible
applicant cannot supply the required matching
share of the besic Federal program (e.g., grants
awarded by the IIppalachian Regional Commis.
sion to provide the applicant a matching share).
C. loan. Self explanatory.
Item
10.
O. ".surance. Self explanatory.
E. Other. Explain on rer1l8r1ls page.
Governmental' unit where llignlflcant and meaning'
ful impact could be observed. list only largest unit
or units affected, such as State, county, or city. If
entire unit affected, list it rather than subunits.
Estimeted number of persons directly benefiting
from project.
Use appropriate code letter. Definitions are:
A.. N_. A submittal for the first time for a n_
profect.
B. Renewal. An extension for an additional funding/
budget period for a project having no projected
completion date. but for which Federal support
must be renewed each year.
C. Revision. A modification to project nature or
scope which may result in funding change (in-
crease or decrease).
O. Continuation. An extension for an additional
fundll18/budget period for a pro~ the agency
initially agreed to fund for a definite number of
years.
E. Augm",..tation. A requirement tor additional
funds for a project previously awarded funds in
the same funding/budget: period. Project natura
and scope unchanged.
Amount requested or to be coritrlbuted during. the
first funding/budget period by each contributrlr.
Value of in-kind contributions Will be Included. If
the action is a change In dollar amount of an exist.
ing grant (a revision or augmentation), indicate
only the amount of the change. For decreases en.
close the amount in parentheses. If both basic and
supplernental amounts are included, breakout in
remar1ls. For multiple program funding, use totals
and show program breakouts in remarks. Item deti.
nitions: 138. amount requested:from Federal Gov.
ernment; 13b. amount applicant will contribute;
13c, amount from State, If applicant is not a State;
13<1, amount from local government, if applicant is
not a local government; 13e, amount from any other
sources. explain in remarks.
11.
12.
13.
14a.
14b.
Self explanatory.
The district(s) where most of actual work will be
accomplished_ If clty-wide or State-wide, covering
several districts., write "city-wide" or '"State-wide."
Complete only for revisions [Item 12c), or augmen.
tations (item 12e).
15.
STANDARD FORM 424 PAGE 3 (10-75)
1
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:19
Item
16.
17.
18.
Approximate date project expected to begin (usually
associated with estimated date of availability of
funding),
Estimated number of months to complete project
after Federal funds are available,
Estimated date preappllcatlon/appllcatlon will be
submitted to Federal agency If this project requires
clearinghouse review. If review not required, this
date would usually bo same as date in Item 2b.
Item
19.
Existing Federal Identification number If this Is not
a new request and directly relates to a previous
Federal action, Otherwise write "NA".
Indicate Federal agency to which this request Is
eddressed, Street addrass not required, but do use
ZIP.
20.
21.
Check appropriate box as to whether Section IV of
fonn contains ramarks and/or additional remarks
are attached.
APPLICANT PROCEDURES FOR SECTION II
Applicants will always complete Items 23a, 23b, and 23c, If clearinghouse review Is required, Item 22b must be fully com-
pleted. An explanation follows for each item:
Item
22b.
238.
Ust clearinghouses to which submitted and .how
In appropriate blocks the status of their responses.
For more than throe clearinghouses, continue In
remarks section. All written comments submitted
by or through clearinghouses must bo attached,
Name and title of authorized representative of legal
applicant.
Item
23b,
Self explanatory.
23c.
Self explanatory,
Note:
Applicant completes only Sections I and II. Section
III is completed by Federal agencies.
FEDERAL AGENCY PROCEDURES FOR SECTION 111
25.
26,
Executive department or Independent agency having
program admlnistra~ion responsibility.
Self explanatory.
Primary organizational unit below department level
having direct program management responsibility.
OfTice directly monitoring the program.
Use to Identify non-award actions where Federal
grant Identifier In item 30 Is not applicable or will
not suffice.
Complete address of administering office shown in
item 26.
Use to Identify award actions where different from
Federal application identifier In item 28.
Self explanatory. Use remarks section to emplify
where appropriate,
Amount to bo contributed during the first funding/
budget period by each contributor. Value of in-kind
contributions will bo Included, If the action is a
change in dollar amount of an existing grant (a revi.
sion or augmentation), indicate only the amount of
change. For decreases, enclose the amount in pa-
rentheses. It both basic and supplemental amounts
are included, breakout in remarks, For multiple pro-
gram funding, use totals and show program break-
outs in remarks. Item definitions: 32a, amount
awarded by Federal Government; 32b, amount ap.
plicant will contribute; 32c, amount from State, if
applicant is not a State; 32d, amount from local
government' if applicant is not a local government;
32e, amount from any other sources, explain in
remarks.
Dete ilctlon was taken on this request.
Date funds will become available.
If appllcant-supplied infonnation In Sections I and II needs no updating or adjustment to fit the flnal Federal action, the
Federal agency will complete Section III only. An explanation. for each item follows:
Item
24.
27.
28,
29,
30.
31.
32.
33.
34.
Item
35.
Name and telephone no. of egency person who can
provide more Infonnatlon regarding this asslstance.
Date after which funds will no longer bo available,
Check appropriate box as to whether Section IV of
form contains Federal remarks and/or attachment
of additional remarks.
For use with A-95 action notices only. Name and
telephone of person who can assure that appropri.
ate A-95 action h3S been taken--If same as person
shown in Item 35, write "same". If not applicable,
write "NA".
36.
37,
38.
Federal Agency Procedures-special considerations
.
A. Treasury Circular 1082 compliance, Federal agency will
assure proper completion of Sections I and III. If Sectioh I
is boing completed by Federal agency, all applicable items
must be filled in. Addresses of State Information Recep.
tlon Agencies (SCIRA's) are provided by Treasury Depart.
ment to each agency. This fonn replaces SF 240, which
will no longer be used.
B, OMB Circular A-95 compliance. Fedenll agency will as.
sure proper completion of Sections I, II, and III. This fonn
is required for notifying all reviewing clearinghouses of
major actions on all programs reviewed under A-95.
Addresses of State and areawide clearinghouses are pro.
vided by OMS to each agency. Substantive differences
between applicant's reqll8st and/or clearinghouse recom'
mendations, and the project as finally awarded will be
explained in A-95 notifications to clearinghouses.
C. Special note, In most, but not all States. the A-95 State
clearinghouse and the (TC 1082) SCIRA are the same
office. In such cases, the A-95 award notice to the Stale
clearinghouse will fulfill the TC 1082 award notice re'
quirement to the State SCIRA, Duplicate notification
shoulC: bo avoided.
STANDARD FORM 424 PAGE 4 (10-75)
I
Office of Management and Budget Circular A-110 (7/30/76)
ATTACHMENT N.--CmcULAR No. A-110
PROPERTY MANAGEMENT STANDARDS
1. This attachment prescribes unlform
standards governing management of prop-
erty furnished by the Federal Government or
whose C05t was charged to a proJeet sup-
ported by a Federal gra,nt or other 'I1@'reement.
Federal sponsoring agencies sha1l require re-
cipients to observe these standards under
grants and other agreements and shall not
Impose additional requirements unless spe-
cifically required by Federal law, The recipi-
ent may use Its own property manl'gement
standards and procedures provided It observes
the provisions of this attachment, This at-
tachment also applies to subreclplents as
referred to In paragraph 5 of the basic cir-
cular,
2, The f01l0wlng definitions apply for the
purpose of this attachment:
a, Real propcrty,-Real property means
land, Including land Improvements, struc-
tures and appurtenances thereto, but ex-
cluding movable maChinery and equipment,
b. Personal property.-Personal property
of any kind except real property, It may be
tangible-having physical existence, or Intan-
gLble-havlng no physical existence, such as
patents, Inventions and copyrights,
c. Nonexpendable personal property.-Non-
expendable personal property means tangible
personal property having a useful life of
more than one year and an acquisition cost
of $300 or more per unit exempt that recip-
Ients subject to Cost Accounting Standards
Board regulations may use the CASB stand-
ard of $500 per unit and useful 1Ife of two
years. A recipient may use Its own definition
of nonexpendable personal property provided
that the definition would at least Include all
tangible personal property as defined above.
d. Expendable personal property.-Expend-
able personal property refers to all tangible
personal property other than nonexpendable
property,
e, Excess property.-Excess property means
property under the control of any Federal
agency that, as determined by the head
thereof, Is no longer required for Its needs
or the discharge of Its responsibilities.
f. Acquisit/on cost of purchased nonu-
pendable personal property.-Acqulsltlon cost
of an Item of purchased nonexpendable per-
sonal property means the net Invoice unit
price of the property Including the cost of
modifications, attachments, accessories, or
auxUlary apparatus neeessary to make the
property usable for the purpose for which It
was acquired. Other charges such as the cost
of Insta1latlon, transportation, taxes, duty
or protective In-transit Insurance, shall be
Included. or excluded from the unit acquisi-
tion cost In accordance with the recipient's
regular accounting practices.
g. Exempt property.-Exempt property
means tangible personal property acquired In
whole or In 'part with Federal funds, and
title to which Is vested In the recipient with-
out further obllgatlon to the Federal Govern-
ment except as provided In subparagraph 6a
below. Such unconditional vesting of title
wUl be pursuant to any Federal legislation
that provides the Federal sponsoring agency
with n.dequate authority.
3. Real property,-Each Federal sponsorIng
agency shall prescribe requirements for re-
cipients concerning the use and dispositIon
of real property acquired partly or wholly
under gran ts or other agreemen ts. Unless
otherwise provided by statute, such require-
ments, as a minimum, shall contain the
followIng:
a. Title to real property shall vest In the
recipient subject to the condition that the
recipient sha1l use the real property tor the
authorized purpose of the proJect'-as long as
it Is needed.
b. The reelplent sha1l obtain approval by
the Federal sponsoring agency for the use of
real property In other projects when the re-
cipient determines that the property Is no
longer needed for the purpose of the original
project. Use In other projects shall be limited
to those under other federally sponsored proJ-
ects (Le" grants or other agreements) or pro-
grams that have purposes consistent with
those authorized for support by the Federal
sponsoring l1@'ency.
c, When the real property Is no longer
needed as provided In a and b above, the
recipient shall request disposition Instruc-
tions from the Federal sponsoring agency or
Its '\uecessor Federal sponsorIng agency. The
Federal sponsoring agency shall observe the
following rulcs In the disposItion Instruc-
tlons:
(I) The recipient may be permitted to re-
tain tI tle after It compensates the Federal
Government In an amount computed by ap-
plying the Federal percentage of partlclpa-
tlon In the cost o( the original project to the
(air market value of the property.
(2) The recipient may be directed to sell
the property under guidelines provided by
the Federal sponsoring agency and pay the
Fe:1eral Government an amount computed
by applying the Federal percentage of par-
ticipation In the cost of the original project
to the proceeds from sale (after deducting
actual and reasonable sel1lng and fix-up eX-
penses, If any, from the sales proceeds).
When the recipient Is authorl7.ed or required
to sell the property, proper sales procedures
shall be established that provide for competi-
tion to the extent practlcable and result In
the highest possible return.
(3) The recipient may be dIrected to trans-
fer title to the property to the Federal Gov-
ernment provided that In such cases the
recipient shall be entitled to compensation
computed by applying the recipient's per-
centage of participation In the cost of the
program or proJeet to the current fair market
value o( the property,
4. Federa/y-owned nonexpendable penonal
property,-Tltle to federally-owned property
remains vested In the Federal Government.
Recipients shall submit annually an Inven-
tory listing of federally-owned property In
their custody to the Federal sponsoring
agency. Upon eompletlon of the agreement
or when the property Is no longer needed,
the recipient shall report the property to
the Federal sponsoring agency for further
agency utilization.
If the Federal sponsoring agency has no
further need for the property, It shall be
declared excess and reported to the General
Services Admlnlstrtlon, Appropriate disposi-
tion Instructions will be Issued to the re-
cipient after completion of the Federal
agency review.
5, Exempt property.-When statutory au-
thority eXists, (e,g., P.L. 8:>-934, 42 U's,C.
1892) title to nonexpendable personal prop-
erty acquired with project funds, shall be
vested In the recipient upon acquisition un-
less It Is determined that to do so Is not In
fllrtherance of the objectives of the Federal
sponsoring agency. When title IS vested In
the recipIent, the recipient shall have no
other obligation or accountablllty to the
Federal Government for Its use or disposi-
tion except as provided In 6a below.
6. Other nonexpendable property.-When
other nonexpendable tangible personal prop-
erty Is acquired by a recipient with project
fllnds. title shall not be taken by the Fe:1-
eral Go\'ernment but shall \'est In the re-
cipient subject to the follo",'lng conditions:
a. Right to transfer tit/C.-For Items of
nonexpendable personal property having a
unIt acquisition cost of $1,000 or more, the
Federal sponsoring agency may reserve the
right to transfer the title to the Federal
I
A-110:20
Government or to a third party named by
the Federal Government when such third
party Is otherwise eligible under existing
statutes. Such reservation shall be subject to
the following standards:
(I) The property shall be appropriately
Identified In the grant or other agreement
or otherwise made known to the recipient
in writing.
(2) The Federal sponsoring agency shall
Isslle disposition Instructions within 120 cal-
endar dnys after the end of the Federal sup-
port o( the project for which It was acqlllred,
If the Federal sponsoring agency falls to Issue
dIsposition Instructions within the 120 cal-
endar day period, the recipient shall apply
the standards of subparagraphs 6b and 6c
as appropriate,
(3) When the Federal sponsoring agency
exercises Its right to take title, the personal
property shall be subject to the provisions
for federally-owned nonexpendable property
dlscus.o;ed In paragraph 4, above.
(4) Whe.Jl title Is transferred either to the
Federal Government or to a third party the
provisions of subparagraph 6c(2) (b) should
be followed.
b. U..e of other tangible nonexpendable
property for which the recipient ha.! title,
(I) The reelplent shall use the property
In the proJeet or program for ,which It was
aequlred as'long as needed, whether or not
the proJeet or program continues to be sup-
ported by Federal funds. When no longer
needed for the original pro}ect or program,
the recipient shall use the property In con-
nection with Its other federally sponsored
activities, In the following order of priority:
(a) Activities, In the following order of
priority:
(b) Activities sponsored by other Federal
agencies.
(2) Shared use,-Durlng the time that
nonexempt nonexpendable personal proper-
ty Is held for use on the project or program
for which It was acquired, the recipient
shall make It available for use on other proJ-
ects or programs If such other use wlll not
Interfere with the work on the project or
prografn for which the property was origi-
nally aoqulred. First preference for such
other use shall be given to other projects or
programs sponsored by ,the Federal agency
that financed the property; second prefer-
ence shall be given to projects or programs
sponsored by other Federal agencies. If the
property Is owned by the Federal Govern-
ment, use on other activities not sponsored
by the Federal Government shall be per-
missible If authorized by the Federal agency.
User charges should be considered 11 appro-
priate,
c, Dupo.rition of other noncxpendable
property.-When the reelplent no longer
needs the property as provided In 6b above,
the property may be used for other activi-
ties In accordance with the following stand-
ards :
(I) None:rpendable property with a unit
acquisition cost o/less than $l,OOO.-The re-
cipient may use the property for othcr activi-
ties without reimbursement to the Federal
Government or sell the property and re-
tain the proceeds.
(2) None:rpcndable personal propcrty with
a unit acquisition cost 0/ $1,000 or more.-
The recipient may retain the property for
other uses provided that compensation Is
made to the original Federal sponsoring
agency or Its successor. The amount of com-
penAAtlon shall be computed by applying
the percentage of Ft'dernl ps.rtlctp!\tlon in
the cost of the original proJeet or program to
the current (air market value of the property.
If the recipient has no need for the property
and the property has further use value, the
recipient shnll request disposition Instruc-
tions from the original sponsoring agency.
I
Office of Management and Budget Circular A-110 (7/30/76)
Tbe !"ede....1 sponsoring agency shall deter-
mine whether the property can be used to
meet the agency's requirements. If no re-
quirement exists within that agency, the
avallablllty ot the property shall be report-
ed to the General Services Administration
by the Federal agen"y to determine whether a
requirement tor the property exists In other
Federal l\gencles. TI1e Federal sponsoring
agency shall Issue Instructions to the recipi-
ent no later than 120 dl\Ys arter the recipi-
ent's request and the tollowlng procedures
shall govern:
(a) H so Instructed or It disposition In-
structions are not Issued within 120 calen-
dar davs arter the recipient's request, the
reclplei,t shl\1I sell the property l\nd reim-
burse the Federal llponsorlng agency an
amount computed by applying to the sales
proceeds the percentl\ge ot Federal pl\rtlcl-
patlon In the cost or the original project or
program. However, the recipient shall be
permitted to deduct and retl\ln rrom the Fed-
eral. share tlOO or ten percent ot the pro-
ceeds, whichever Is greater, ror the reclplent.s
selling and handling expenses.
(b) If the recipient ts Instructed to ship
the property elsewhere, the recipient shall
be reimbursed by the benefiting Federal
agency with an amount which Is computed
by applying the percentage or the recipient's
participation In the cost or the original grant
project or program to the current ralr market
vMue ot the property, plus any reasonable
shipping or Interim storage costs Incured.
(c) If the recipient Is Instructed to other-
wise dispose ot the property, the recipient
shall be reimbursed by the Federal sponsor-
Ing agency tor such costs Incurred In Its
dl..sposltlon.
d. Property management 3tandard3 lor
none:rpendable property,-TI1e recipient's
property management standards tor nonex-
pend able personal property shall Include the
tollowlng procedural requirements:
(I) Property records shall be maintained
accurately and shall Include:
(a) A description ot the property.
(b) Manutacturer's serial number, model
number, Federal stock number, national
stock number, or other Identification num-
ber.
(c) Source ot the property, Including
grant or other agreement number,
(d) Whether title vests In the recipient or
the Federal Government.
'(e) Acquisition date (or date received. It
the property WIl8 turnlshed by the Federal
Government) and cost,
(t) Percentage (at the end or the budget
y....r) or Federal partlclpatlon In the cost ot
the project or program tor which the prop-
erty was acquired. (Not ..ppllcable to prop-
erty furnished by the Federal Government.)
(g) Location, use e.nd condition ot the
property ..nd the d..te the Intormatlon w..s
reported.
(h) Unit Ilcqulaltlon cost.
(I) Ultimate disposition data, Including
d..te ot disposal and ....Ies price or the m..thod
used to determine current te.lr market value
where a recipient compense.tes the Federal
aponsorlng agency tor Its share
(2) Property owned by the Fedcr..1 Gov-
ernm.nt mait be marked to Indicate Fed-
...al ownership.
(3) A physlc..1 Inventory ot property shall
be tl\ken and the results reconciled with the
property records ..t least once every two
yel\rs, Any dll'lerencu between quantltl..s de-
termined by the physical Inspection and
those shown In the accounting records shall
be Investigated to determine the causes ot
the dll'lerence, TI1e recipient shall, In connec-
tion with the Inventory, verity the existence,
current utilization, and continued need for
the property.
(4) A control system shall be In elTect to
Inaure ad~uate aareguards to prevent losa.
damage, or theft of the property, Any 101M,
damage, or theft ot nonexpendl\ble property
shall be Investigated and tully documented;
It the property was owned by the Federal
Government, the recIpient shall promptly nO-
tlty the Federal sponsoring agency,
(5) Adequl\tely m..lntenl\nce procedures
shall be Implemented to keep the property
In good condition.
(6) Where the recipient Is authorized or
required to sell the property, proper sales
procedures shall be established which would
provide tor competition to the extent practl-
cl\ble and result In the highest possible re-
turn.
7. Expendable personal property,-Tltle to
expendable personal property shall 'l'est In
the recipient upon acquisition, It there 'Is a
reslduM Inventory ot such property exceeding
$1,000 In total aggregate t..lr market value,
upon termination or completion ot the grant
or other agreement, and the property Is not
needed tor any other tederally sponsored
project or program, the recipient sh..1I retain
the property tor use on nontederally spon-
sored activities, or sell It, but must In either
case, compensate the Federal Governm..nt
tor Its share. The amount ot compensation
shall be computed In the same manner as
nonexpendable personal property.
8. Intangible property,
a. Inventions and patent3.-I! any program
produces patentable Items, patent rights,
processes, or Inventions, In the course ot
work sponsoredhy the Federal Government,
such tact shall be promptly and tully report-
ed to the Federal sponsoring agency. UnleSll
there Is a prior agreement between the re-
cipient and the Federal sponsoring agency
on disposition of such Items, the Federal
sponsoring agency shall determine whether
protection on the Invention or discovery shall
be sought. TI1e Federal sponsoring agency
will also determine how the rights In the In-
vention or discovery-Including rights under
any patent t'lllUed thereon--f\hall be allocated
and administered In order to protect the pub-
llc Interest consistent with "Government
Patent Policy" (President's Memorandum
for Heads ot Executl'l'e Departments and
Agencies, August 23, 1971, and statement ot
Government Patent Policy Il8 printed In 36
F.R. 16889).
b. Copyrigh.t3,-Except as ()therwlse pro-
vided In the tenUs and conditions ot the
agre<!ment, the author or the recipient organ-
Ization Is tree to copyright any books, pub-
lications, or other eopyrlghtable mlLwrll>.la
developed In the course ot or under a Fed-
eral agreement, but the Peden.1 sponaorlng
agency shall reserve a roy..lty-tree, nonex-
clusive and Irrevocable right to reproduce,
publish, or otherwise use, and to authorlae
others to use, the work tor Government pur-
poses.
ATTACHMENT O.-CJ1lCULAIL No. A-II0
raOCOR.N:ENT STANDARDS
1. This attachment provides a\andards tor
use by recipients In establlehlni procedures
tor the procurement ot IUppUSS. equipment,
construction and other urvlc.. with Federal
tunds, TI1ese standArd. ..re turnlshed to en-
sure thlLt such m&terllLls and services are ob-
tained In an effective manner and In com-
pliance with the provisions ot appllc..ble Fed-
eral I&w ..nd executive orders. No additional
procurement standarc1s or requirements shall
be ImpoSlld by the Federal sponsoring ..gen-
cles upon recipients \Inless specifically re-
q\llred by Federal statute Or executive orders.
2, The st&ndards cont&lned In this attach-
ment do not relieve the recipient ot the con-
tractue.1 responslbllltles arising under Its
contrac\s, The recipient Is the responsible ILU-
thorlty, without recourse to the Federal spon-
soring &gency reg..rdlng the settlement and
aatlstll.CUon ot all eontractual and admlnls-
I
A-110:21
tratlve ISSUM arising out of procurements
entered Into, In support ot ... grant or other
..greement, This Inchaetas disputes, claim.,
protests of ..ward. .ouree evaluation or other
matters of a contractu,,1 nat\lre, Matters con-
cerning violation ot law ..re to be reterred to
s\lch local, State or Feder... authority a& may
have proper j'urllldlei1on.
3. Recipients may u.ee their own procure-
ment pollclea &nd procedurel, However. all re-
cipients shall a.dhere to the st&ndards set
torth In p&ragr..phl ;, fond 4,
a. The recipient shall maintain & code or
stl\ndards ot conduct th..t shall govern the
perrormance or Its otIIcers, employees or
agents engaged In the ..warding and admin-
Istration ot cont.-acts using Federal tunds.
No employee, omcer or agent shall participate
In the selection, &ward or administration ot
a contr..ct In which FedeTl\1 tunds ..re used,
where, to hla knowledge, he or his Immediate
tamlly, partners, or organization In which he
or his Immediate tamlly or partner has a
flnartflal Inte.-est or with whom he Is nego-
tiating or hY any arrangement concerning
pro.pectlve employment, TI1e rcclplent.~' ot-
flcers, employees or agents sh..1I neither ..ollc-
It nor &OOeflt gTl\tulUes, tavors or anything
ot monetllTY v&lue from contractors or poten-
tI&1 contractors. Such ltandards shall provide
tor disciplinary actions to be &pplled tor vIo-
lations or such standards by the recipients'
omcers, employees or &gents,
b. All procurement \r&nsactlons shMI be
conducted In a mann..- ~ provide, to the
'maximum extent practlc&I, open and tree
competition. TI1e recipIent should be alert
to organizational conlnets of Interest or non-
oompetlthe opractlees an1<>ng contractors
that ma.y restrl<:t or ellmtnl\te competition
or ovtlerwl6e ~treJl\ va.de, In O'rder to en-
sure objectl'l'e contro.ctor pertormance and
ellmln..te untaJr eotnpetltlve &dvll.ntage, con-
tractlOrs that develop oc draft specifications.
requl,re-ments, statementB ot work, Invlta-
tlorus for bids and/or requests tor p<'OPOl5&ls
should be excluded trom competing tor suc>h
procurements. Award8 8b&l1 be made to the
bldd~/olferO'r whose bid/olTer ts respons.lve
to tt>e 8OlIcltatAon and K moat adva.ntagCOUll
to tM reel~t, pr-lce and other factlOrs con-
sidered, Sollcltatlo.. sh611 clearly set forth
&11 requlrements that the bidder /olferor must
fu1tHI In order for hili bkI/olfer to be emlu-
&ted by the recipient. Any ..nd MI bld3/ofl'ers
maT be rejeo~ when It la In the rec4p1ent's
InlAre.t to do 80.
c. All reclpl~nts ahall Mtal>lIsh procure-
tnent proe<!dures tb&t provkl? tor, at a m1n-
Imurn, the following po'OC8durllolTequlrements,
(I) Proposed procurement actl0J18 shall
tollow a prooedur. to lUlSure the a'l'oIdanc.
or pUrchMlng unnecee!BTY or c:h1pllcatlve
llAma, Where a.pproprl6\9, &n analy>llt5 sh611
be ma.dc of Ie""" ..nd purchase, alte<rn6tJv...
to ~wrmlne whloch would be the moet
economical, pr..et\c&1 proe-uN>ment.
(2) Sollclt>e.tlons tor gO<:>da and services
shall be 'b&sed upon a clear and accur..te
deecriptlon ot the te<:t1nlc"l r~ulrernents
tcr \he mi'toe<'lal, product or ".....,Ice to be
procured. Such .. deeorlpt4.on aha.il not, In
com.petltlve p~urements, contain t_tures
which unduly r...trlct com.petltlon. "Brand
na.me or aqual" descrlptlorul JT16Y be uled
.... a mee.n. to deftne \-he pertorm&nce or
other aallent requirement. ot a procurement,
and when eo \188<1 the specific te..tures ot the
n...med brand which must be met by blddenf
olTer~rs shaJ.1 be cles.rly apec.lned.
(3) Posl tin e!Torts :>h..1I be 11UIde by the
recipients to utlllze small buslneM &Tld mi-
nority-owned busIness sources ot supolles
..nd .ervlees, Such elTor\s Ihould allow these
sources the m&xlmum t.......lble opportunity
to COMpete for contracts utilizing l"adera.l
tunde.
(4) TI1e type ot procuring lnstrumenbl
used, ',g., flxed price contract>!. ooet rel.m-
I
Office of Management and Budget Circular A-110 (7130/76)
bur5l>ble contracts, purchl\$C orders, Incen-
tive contracts, shall be determlned by Ule
recIpient but must be approprla.te for the
particular procurement and for promoting
the best Interest of the program Involved,
The "cost-plu.';-a-percentage-of-C05t" meLh-
od of contracting shall not be used.
(5) Contracts shal be made only with re-
sponsible contro.ctors who po55C66 the po-
ten tlonnJ ablll ty to perform succc35fully
under the terms cnd conditions of a pro-
posed procurement, Consideration shall be
given to such lllJl.tters as contrn.ctor Integrity,
rcoord of past performance, financial and
tech n 10l\1 re.<;ourccs or e.ccC63lblllty to other
necessary resources.
(6) All proposed sole sourcc con tracts or
where only one bid or proposnJ 15 received
In whlah Lhe n.ggrcgnte ex.pendlture Is ex-
pected to exceed f,.5,000 shall be subJcct to
prior approval at the dlscretl<ln of Lhe Fed-
ernJ sponsoring n.gency.
(7) Some form of price or coot lUlal}'S1s
should be made In connection with every
procurement action. Price analysis lllJl.y be
accomplished In various ways, IncludIng the
comparison of price quotations submitted,
market prices and sImilar IndicIa, together
wlUl d.Isoounts, C<1<;t ann.lysls Is the review
and evaluation of each elCJIlent of cost to
determlne reasonableness, alloca.blllty and
allowabUlty,
(8) Procurement records &nd files for pur-
che,.<;es In excess of $10,000 shall Include the
follow1lng :
(a) Basis for contrn.ctor selection;
(b) Justification for lack of competition
when competitive bids or olIers are not
obtained;
(c) Basis for award cost or price,
(9) A system for contract adm.lnlstro.tlon
8hall be lllJl.lntnJned to ensure contractor
conformance wIth terms, conditions and
speclflca tlons of the con tract, and to ensure
adequat<; and timely followup of a.11 pur-
chases.
4. The recLplent shall Include, In addItion
to provisions to define a sound and complete
. agreement, the followIng provlslol16 In all
contracts. These provIsIons shall also be ap:
plied to subcontracts.
a. Contracts In excess of $10,000 shall con-
tain contmctual provisions or condlt.lons
that wHl allow for adm1nlstratlve, contrac-
tual or legal remedies In Instances In w1:1lctl
contractors violate or breach contro.ct tenns
and provide for such remedial actions ...;
may be appropriate.
b. All contracts In excC'S3 of $10,000 shall
conbaln suitable provisions for termination
by the recIpient Including the manner by
which termination will be elIected and the
basts for ","ttlement. In addition, suah con-
tracts shall describe conditions under which
the oont.ract may be tennlnated for def8.ult
as well as oondltlons where the contract may
be terminated because of oITC\UTlstll.nces be-
yond the control of Ule contractor.
c. In ail contracts for construction or fa-
clllty Improvement awarded for more than
$100,000, recIpients shall oooClTVe the bond-
Ing requirements proVlded In Attac.1unent D
to this circular.
d, All contracts awarded by recIpients and
their oontractors or subgruntecs having a
value of more than $10,000, shall conto.ln a
provision requiring complLance with Execu-
tive Order 11246, entitled "Equal Employ-
ment Opportunity," as amended by Executive
Order 11375, and as supplemented In Depart-
ment of Labor regulations (4-1 CFR, Part 60),
e, All contracts and subgrants In excess of ,
$2,000 for construction or repair awarded by
recipients and subreclplents shall Include a
provision for compliance with the Copeland
"Anti-Kick Back" Act (18 U.S,C, 874) as
supplemented In Department of Labor
regulations (29 CFR, Part 3). This Act pro-
vides that each contractor or subgrantee
shall be prohibited from Inducing, by any
means, any person employed In the construc-
tion, completion, or repair of public work, to
give up any part of the compensation to
which he Is otherwise entitled, The recipient
shall report all suspected or reported viola-
tions to the Federal sponsoring agency.
f, When required by the Federal program
legislation, all construction contracts
awarded by the recipients and subreclplents
of more than $2,000 shall Include a provision
for compliance with the Davis-Bacon Act (40
U,S.C. 276a to a-7) and as supplemeruted by
T'>epartment of Labor regulations (29 CFR,
Part 5). Under this Act contractors shall be
required to pay wages to laborcrs and me-
chanics at a rate not less than the minimum
wages specified In a wage determination made
by ,the Secretary of Labor. In addition, con-
tractors shall be required to pay wages not
less than once a week., The recipient shall
place a copy of the current prevailing wage
determination Issued by the Department of
Labor In each solicitation and the award
of a contract shall be conditioned upon the
acceptance of the wage determination, The
recipient shall report all suspected or re-
ported violations to the Federal sponsorlng
agency.
g. Where applicable, all con tracts a wllrded
by recipients In 2XCess of $2,000 for construc-
tion con'tracts and In excees of $2,500 for
other contracts that Involve the employment
of mechanics or laborers, shall Include a pro-
vision for compliance with sections 103 and
107 of the Contract Work Hours and Safety
Standllrds Act (40 U,S,C, 327-330) as sup-
plemented by Departmerut of Labor regula-
I
A-110:22
tlons (29 CFR, Part 5), Under section 103
of the Act, each con tractor shall be re-
qured ~o compute tile wages of every me-
chanic and laborer on the basis of a standnrd
work day of B hours and a standard work
weck of 40 hours, Work In excess of the
standard workday or workweek Is permissible
provided that the worker Is compensated at a
rate of not less than I y, times the basic
rate of pay for all hours worked in excess
of B hours in any calendar day or 40 hours
In the workweek. Section 107 of the Act Is
applicable to construction work "nd provides
that no laborer or mechanic shall be required
to work In surroundings or under working
conditions which are unsanitary, hazardous
or dan[~erous to his henlth and safety 1\., de-
tcnnlncd under consLructlon safety nnd
health standnrds promulgated by the'Secre-
tary of Labor, Thcse rcqulrements do 'lOt
npply to th" purchascs of supplies or mate-
rials or articles ordinarily available on the
open market, or contracts for transportation
or trnnsml;;slon of IntrlllL:<'nce,
h, C<Jntracts or aftreementB. the principal
purpose of. which l, to create. develop or Im-
prove products. processes or methods; or for
exploration Into fields that directly concern
publlc health, safety or welrare; or contracts
In Ihe field of science or technology in which
there has been little significant experience
ouL~lde of work funded by Federal asslst-
ancc, shall contain a notice to the effect ,that
matters regarding rights to Inventions and
materials generated under the contract or
agreement arc subject to the re{;ulatlons Is-
sued by the Federal sponsoring agency and
the recipient. The contractor shall be ad-
vised as to the source of add! tlonal Informa-
tion regarding these matters,
L All negotiated contraots (except those
of $10,000 or less) awarded by recipients
shall Include a provision to the elIect that
tbe recipient, the Federal sponsoring agency,
the Comptroller General of the United States
or any of 'their duly authorized representa~
tlves, shall have access to any books, docu-
ments, papers and records of the contractor
which are directly pertinent to a specific pro-
gram for the purpose of making audits,
examinations, excerpts and transcriptions,
J, Contracts and subgran,ts or amounts In
excess of $100,000 sball contain a provision
that requires the recipient to agree to com-
ply with all applicable standards, orders or
regulations Issued pursuant to the Clear Air
Act of 1970 (42 U,S.C, 1857 et scq,) and the
Federal W...ter Pollution Control Act (33
U,S,C, 1251 et seq,) as amended, Violations
shall be reported to the Federal sNnsorlng
agency and the Regional Olflee of the En-
vironmental Protection Agency, -
(FR Ooc,76--2 1904 Filed 7-29-76;8:45 amI
, .
1
APPENDIX H
OMB
Circular A-Ill
I
1
Office of Management and Budget Circular A-122 (6/27/80)
OfRCE OF MANAGEMENT AND
BUDGET
C6roolar A-122, ''Cost Principles for
Nonprofit Organizations"
AGENCY: Office of Management and
Budget.
ACTION: Final Policy,
June 27. 1960
To The Heads of Executive
Departments and Establishments
Subjl;lct: Cost principles for nonprofit
organiza tions:
1. Purpose. This Circular establi:;hes
principles for determining costs of
grants, contracts and other agreements
\....ith nonprofit organizations, It ooes not
apply to colleges ap.d universities which
are covered by Circular A-2~ State.
local. and fe'c!ernlly recognized Indian
tribal governments which are covered
by Circular 74-4; or hospitals. The
principles are designed to provide that
the Federal Government bear its fair
share of costs except where restrit:ted Of
prohibited by law. The principles do nol
attempt to prescribe~the extent of cost
sharing or matching on'grants. contracts,
or other agreemmits, However. such cost
sharing or matching shall not be
accomplished tmough arbitrary
limitations on individual cost elements
by Federal agencies, Provision for profit
or other increment above cost is outsidl:l
the scope of this Circular,
2. Supersession, This Circular
!':Llpersedes cost principlds issued by
individual agencies for non'proflt
organization.
3. Applicability. a. These principles
shall be used by all Federal agencies in
determining the ,cost!! of work performed
by nonprofit organizations under grants.
cooperative agreements, cost
reimbur:>ement contracts. and other
contracts in which costs are used in
pricing, administration, or se'ttlement.
All of these instruments are hereafter
referred to as awards. The principles do
not apply to awards under which an
organization is not required to account
to the Government for actual costs
incurred.
b. All cost reimbursement subawards
(subgrants. subcontracts, etc.) are
subject to lhose Federal cost principles
applicable to the particular organization
concerned. Thus, if a sub award is to II
nonprofit organization. this Circular
'shall apply; if a. subaward is to a
commercial organization. the cost
principles applicable to commercial
concerns shall apply; if a subaward is to
a coIlege or university. Circular A-21
Rhall apply; if a subaward is to a State.
local. '01' fedeJl8Hyre1id~Wld lmiUlnl
tribal government. Circular 74-'-4 sh<i11
apply.
4. Definitions. a. "Nonprofit
organization" means any corporation.
trust. lnIsociation. cooperative, or other
organization whkh (1) is operated
primarily for sclentific. educational.
service. charitable. or similar purposes
in the public interest: (2) is not
organized primarily for profit: and (3)
uses its net proceeds.to maintain.
Improve. and/or expand its operations.
For this purpose. the term "nonprofit
organization" excludes (i) coIleges and
universities: (ii) hospitals: (iii) State.
local, and federally recognized Indian
tribal governments: and (iv) those
nonprofit organizations which are "
excl\llled from coverage of this Circular
in accordance with paragraph 5 below.
b. "Prior approval" means secu:-ing
the awarding agency's permission in
advance to incur cost for those items
that are designated as requiring prior
approval by the Circular, Generally this
permission will be in writing. Where an
item of cost requiring prior approval is
specified in the budget of an.award.
approval of the budget consiitutes
approval cf that cosl.
5_ Exclusion of some nonprofit
organizations. Some nonprofit
organizations. because of their size and
nature of operations, can be considered
to be similar to commercial concerns for
purpose of applicability of tost
principles. Such nonprofit organizations
shaH operate under Federal cost
principles applicable to commercial
concerns. A listing of these
organiza \ions is colltained,in,
Attachment C. Other organizations may
be added f",m time to time.
6. Responsibilities. Agellcies
responsible for administering programs
that involve awards to nonprofit
organizations shall implement the
provisions of this Circular. Upon
request. implementing instruction shall
be furnished to the Office of
Management and Budge\. Agencies shall
designate a liaison official to serve 8S
the agency representative on matters
relating to the implementation of this
Circular, The name and title of such
representative shaH be furnished to the
Office of Management and Budget
within 30 days of the date of this
Circular.
7. Attachments. The principles and
related policy guides are set forth in the
following Attachments:
Attachment A--General Principles
Attachment B-Selected Items of Cost
Attachment C-Nonprofit
Organizations Not Subject !Jl This
Circular
I
A-122:1
8. Requests forexcepliolls, The Office
of Management find Budget may grant
exceptions to the requirements of this
Circular when permissible under
existing law. However, in the interest of
achieving maximum uniformity.
exceptions will be permitted only in
highly unusual circumstances.
9. Effective Date. The Rrovisions of
this Circular are effective immediately,
Implementation shall be phased in by
incorporating the provisions into new
awards made after the start of the
organization's next fisCal year. For
existing awards the new principles may
be applied if an organization and the
cognizant Federal agency agree, Earlier
implementation. or a delay in
implementation oiindividual provisions
is also permitted by mutual agreement
between an' organizatiQn and the
cognizant Federal agency.
10. Inquiries. Further information
concerning this Circular may be
obtained by contacting the Financial
Management Branch. Budget Review
Division, Office of Management and
Budget, Washington, D.C. 20503,
telephone (ZOZ) 39H773. -
Jamns T, Mcintyre, Jr..
Director.
(Circular No, A-122]
Attachment A
General Principles
Table of Contents
A. Basic Considerations
1. Composition of total coste
2. Factors affecting allow ability of costs
3. Reasonable costs
4. Allocable costs
5. Applicable credits
6. Advance understandings
B. Direct Costs
C. Indirect Costs
"I
D. Allocation of Indirect Costs ~d'
Determination of Indirect Cost Rate8
1. General
2. Simplified allocation method
3. Mulliple allocation base method
4. Direct allocation method
5. Special indirect cost rates
E. Negotiation and Approval of Indirect Cost
Rates
1. Definitions
2. Negotiations and approval of rates
[Circular No, A-122]
Allachmellt A
General Principles
A. Basic Considerations.
1. Composition of total costs. The lotal cost
of an award is the sum of the allowable
direct and allocable indirect costs less any
applicable credits.
2. Factors affecting allowability of costs,
< .
I
Office of Management and Budget Circular A-122 (6/27/80)
To be allowable lIDder an award. costsnro~t
meet the following general criteria:
a. Be ressonablefor the performance of the
award and be aUocable thereto under these
principles.
b. Conform to any limitations or exclusions
set forth in these principles or in the aWllrd
as to types or amolint of cosUlelllll.
c, Be coi1siste1Jt w.ith poJici'es and
procedures that apply uniformly to both
federally financed and other activities of the
orga niza tion,
d. Be accorded consistent treatment.
e. Be determined in acco,dance wIth
generally accepted accouniing principles,
f. Not be included as a cost or used to meet
cost sharing or matching requirements ,of any
other federally Iinartced program in either the
current or f1 prior period,
g. Be adequately documenred.
3. Reasonable costs. A cosl is reasonllble
if. in its nahire or amount. iC:does not exceed
that which would be Incurfed by 8 prudent
person under the circumst'"'ccs pr!!vailing at
the time the decision was made to incur the
costs, The question of the reasonableness.of
specific costs must be scrutinized with
particular care in connectioo with
organizations or separale divisions thereof
which receive the prepollderance,o(thei'r
support from awards made' by Fede'ral
agen'cies. In delermining the reasonableness
of a given cosl, consideration shall be given
to:
a. Whether Ihe cost is of a type generally
recognized as ordinary and necessaI}' for the
operation of the organization or the
performance of the award.
b. The reslraints or requirements imposed
by such factors as generally accepted sound
business practices. arms length bargaining.
Federal and State laws and regulations. and
terms and conditions of the award.
c. Whether the indivldoalsconcerned acted
with prudence in the circumstances.
considering their responsibilities to the
organization. its members. employees. and
clienls, the public at large. and the
Government.
d. Significant deviations from the
established practices of the org:mization
which may 'unjustifiably increase the award
costs.
4. Allocable costs.
a. A cost is allocable to a particular cost
objective. sUj:h as a grant, project, service, or
other activity, in accordance with the relalive
benefits received, Acos! is allocable to a
Government award if it is trealed
consistently with olher costs incurred for tl}e
same purpose in like circumstances and if it:
(1) 15 incuITed specifically for the award,
(2) Benefils both Ihe award and olher work
a;Jd can be distributed in reasonable
proportion to the benefits received.
(3) Is necessary to the overall operation of
the organization. allhough a direct
relationship to any particular cost objective
cannot be shown.
b, Any cost allocable to a particular award
or other cost objective under these prinr.iples
may nol be shifted to other Federal awards to
overcome funding deficiencies. or to avoid
restrictions imposed by law or by the terms
of the award.
5. Applicable credits,
a. The term applicable credits Iefers to
Ihose receipts. or reduction of expenditures
which operate to offset or reduce expanses
items tha t ate allocable to awards as direct
or indirect cost.. Typical examples of such
traneactions are: purchase discounts. rebates
or allowances, recoveries or indemnities on
losses. insurance refund.. and adjustments of
overpayments or erioneous charges. To the
extent thai such credits accruing or received
by the organization relale to allowable cost
they shall be credited to the Government
eilher as a cost reduction or cash rdund as
appropriate.
b. In some instances. the amounts received
form the Federal Government to finance
organiza lional activitie. or service opera tions
should be treated as applicable credits.
Specifically, the concept of celling such
credit items against related expenditures
should be applied by the organizaton in
determing the rates or amounts to be
organization in determining the rates or
amaounts tobe charged to Federal awards
for services rendered whenever the facilities
or other resources used in providing such
'services have been financed directly. in
whole or in part. by Federal funds;
arc) For rules covering progr\ll1l income
(Le,. gross income earned from federally
supported activities) see Attachment D of
OMB Circular A-ll0,
6, Advance and understandings. Under any
giveri'award the reasonableniiss and
allocability of certain items of costs may be
difficuit to determine, This particularly true in
connection with orgizatioOB that receive a
preponderance of their support from Fedarlll
agencies. In order to avoid .ubsequant
disallowance'or disPllle based on
ul1reasonablene~s Or nonallqcability. It is
often desirable to seek a wrillail agreement
with the cognizant or awarding 'agency in
advance of the incurrence of speCial or
unusal costs. The absence of an advance
agreement on any element of cost will not. in
itself. affect the reasonableness or
allocability of that element.
E. Direct Costs
1. Direct costs are Ihose Ihal can be
identified specifically wHh a particular final
cost objective: Le.. a particular award.
project. service, or other direct activity of an
organization, However, a cost may nol be
assigned to an award as a direct cost if any
other cost incurred for the same purpose. in
like circumstance. has been allocated to nn
award as an indirect cost. Cost idenlified
specifically with awards are direct cost of the
awards and are to be assigned directly
thereto. Cost identified specifically with other
filial cost objectives of the organization are
direct costs of those cost objecllves and are
not to be assigned to olher awards directly or
indirectly.
2. Any direct cost of a minor'amount may
be trealed as an indirecl cost of or reasons nf
practicality where the ar.collntlreatment for
such cost is consistenlly applied to all final
cost objectives,
3. The cost of certain activities are not
allowable as charges to Federal awards (see.
for example, fund raising costs in paragraph
I
A-122:2
21 of AlIachment B). However, even though
these cost. are unallowable for purposes of
computing charges to Federal Bwards. they
nonelheless must be treated as direct cosl for
purpose. of determining lndired Gost ra tes
and be alloca ted their shllre of the
organization's indirect costs if they represent
octivitleswhich (1) include the salaries of
personnel. (2) occupy sp~ce. and (3) benefit
from the organization's indirect costs.
4, The costs of activitiell performed
primarily as a service to members, clients. or
the general public when significant and
necessary to the organization's mission must
be treated as direct costs when or not
allowable and be allocaled an equitable
share of indirect cosls. Some examples of
these Iypes of activities include:
a, Maintenllnce Qf membership rolls.
5ubs'criptions, publications. and relatcd
functions.
b. Providing services and information to
mcmbers. legislative or administrativ,e
bodics, or the public,
c. Promotion. lobbying, and other forms of
public relations.
d, Meetings Bnd conferences except those
held to conduct the generlll administration of
the organization,
3. Mainlenacne, protection. and investment
of special funds not used in operation of the
orguniza tion.
f. Administration of group benefits on
behelf of members of clients including life
,and hospital insurance. annuity or retirement
plans. financial aid. elc.
C, Indirect Cost,
1, Indirect cosls are those that have been
incurred for common or joint objectives and
cannot Le readily, identified with a particular
final Cl>St objective, Direcl cast of minor
amounts may be treated as indirect cosls
under the conditions described in paragraph
8.2, above. After direct cosls have been
determined and assigned direclly to awards
or other work as appropriale. indirecl costs
(He those remaining to be allocated to
benefiting cost objectives, A cosl m<lY nol be
allocated to an award BS an indirect cost if
allY othp.r cost incurred for the ~ama purpose.
in like circumstances. ,has been as~ig;ed to
an ll\\:ard as a direct cosl. 1
2. Bl,cause of the diverse characteristics
and accounling praclices of nonprofit
crganiza tions. it is not possible to specify the
types of cost which may be classified as
indirect cost in all situalion. However. typiclll
examples of indirect cost for many nonprofit
organizations may include depreciation or
use allowance.!! on buildings and equipment.
the costs of operating Bnd maintaining
facilities, aod general adminislration and
gPHeral expenses, such as the salaries and
expenses of executive officers, personnel
administration, and accounting,
D. AIIocation of Indirect Cost and
Determinotion of Indirect Cost Rates.
1. General.
a. Where a nonprofit organization has only
one mlljor function. or where all its major
functions benefil from its indirect cosls 10
approximalely the same degree, the
allocalion of indirecl costs Bnd the
< ,
)
Office of Management and Budget Circular A-122 (6/27/80)
computation of anindlrecl GOst -ra te 'may be
accomplished throu!!h simplified alloClltion
procedures as described in parafJI'apb Z
below.
b, Where an organization has several major
functions which benefit from its indirect costs
in varying degrees, allocation of indirect
costs may require the accumulation of such
costs Into separate cost groupings which then
are allocated individually to benefiting
functions by means of a base which best
measures the rlllative degree of benefit. The
indirect costs allocated to each function are
then distributed to imiividual awards and
other activities included in that dunction by
means of an indirect call rate(s).
c, The determination of what constitutes an
organization's major functions will depend on
its purpose in being; the types of seNices it
renders to the public, its clients, ond its
members: ond the amount of errortll devoles
to such activities as fund raising, public
Infonnation and membership activities.
d, Specific methods for allocating indirect
costs and computing indirect cost rates along
wjlh the conditions under which each method
should be used are described in paragraphs 2
through 5 below,
e, The base period for the allocation of
indirec.t costs is the period in which such
costs are incurred and accumulated for
allocation wo work performed in that period,
The base period normally should coincide
with the organization's fiscal year, but in any
evnt, shall be so selected as to avoid
inequities in the allocation of the costs,
2. Simplified allocation method. .
a, Where an organization's major functions
benefit from its indirect costs to
approximately the same degre. the allocation
of indirect costs may be accomplished by (i)
separating the organization's total costs for
the base period as either direct or indirect,
and (ii) dividing the total allowable indirect
costs (net of applicable credits) by an
equitable distribution base. The result of this
process is an indirect cost ra te which is used
to distribute indirect costs to individual
awards. The rate should be expressed as the
percentage which the total amount of
allowable indirect costs bears to the base
selected. This method shbuld alas be used
where an organization has only one major
function encompassing a number of
individual projects or activities. and may be
used where the level of Federal awards to an
organization is relatively small.
b. both the direct costs and the inditect
ccsts shall exclude capilsl expenditures and
unallowable costs. However, unallowable
costs which represent Rctivities must be
included in the direct costs under the
conditions described in paragraph B-3. above.
c. The distribution base may be total direct
costs (excluding capital expenditures and
other distorting items. such liS major
subcontracts or subgrants), direct sclaries
and wages, or other base which results in an
equitable distribution. The distribution base
shall generally exclude participant suport
costs as defined in paragraph 2g of
Attachment B,
d, Except where a 51'ecial rate(s) is
required in accordance with paragraph 0.5
belDw. ,the indirect-alBt rate&maloped. Wader
the above principles.iaaRPlicab1e.to aU
awards at,lheoraanizatioD,-1I a special
rate(s) is f8quired.appropriate modifications
shall be made in order \0 develop ,the special
rate(s).
3. Multiple allocalion base method.
s, Where an organization's indirect cosls
benefit its major-fuDctions in varying degrees.
such costs shall be accumulated into seperate
cost groupings. Each grouping shall then be
allocated individually to benefiting functions
by means of a base which best measures the
relative benefits,
b. The groupings shall be established so 88
to pennitthe allocation of each groupi~on
the basis of benefits provided to the major
functions. Each groupint! should constitute a
pool of expenses that are of like character-in
terms of (he functions they benefit and in
terms of Ihe ollocution buse whloh bllst
measurs the rellltive benefits providd to each
function. The number of separate groupings
should be held within practical limits. taking
into consideration the materiality of the
amounts involved and the degree of precision
desired.
c. Actual conditions must be taken into
account in selecting the base to be used in
allocating the expenses in each grouping to
benefiting functions. When an allocation can
be made by assignment of a cost grouping
directly to the function benefited. the
allocation shall be made in that manner.
When the expenses in a grouping are more
general in nature, the allocation should be
made through the use of a selected base
which produces results that are equitable to
both the Government And the organization. In
general. any cost element or cost related'
factor associated with the organization's
work is potentially adaptable for use as an
allocation base provided 1i) it can readily be
expressed in terms of dollars or other
quantitative measures (total direct costs.
direct salaries and wages. staff hours applied,
square feet used, hours of usage. number of
documents processed. population served, and
the like) and (ii) it is common to the
benefiting functions during the base period.
d, Except where a special indirect cost
rate(s) is required in accordance with
paragraph 0:5. below. the separate groupings
of indirect costs allocated to each major
function shall be egregated and treated as a
common pool for that function. The costs in
the common pool shall then be distributed to
indivisual awars included In that function by
use of a single indirect cost ra te.
e. The distribution base used in computing
the indirect cost ra te for each function may
be total direct costs (excluding capital
c-.:penditures and other distorting items such
as major subcontracts and subgrants), direct
salaries and wages. or other ase which
results in en equitable distribution. The
distribution base shall generally exclude
participant support costs as defined in
paragraph 29, Attachment B. An indirect cost
ra te should be developed fir each s~para te
indirect cost pool developed. The rate in each
case should be stated as the percentage
which the amount of the particular indirect
cost pool is of the distribution base identified
,
A-122:3
witbthatpool
4, o;reci allocation method,
a. Some nonprofit organizations, treat all
costs as direct cos,ts expect general
administration end general expenses, These
orgllnizations generally separate their costs
into thre basic categories: (i) General
administration and general expenses, (ii)
fund raising, and (iii) other direct functions
(including projects performed under Federal
awards), Joint costs. such as depreciation.
rental costs, operation and maintenance of
facilities, telephone expenses, and the like
are prorated indivisually as direct cost to
each category and to each award, or other
activity using a base most appropriate to the
particular cost being prorated.
b, This method is acceptable provided each
joint cO,st is prorated using a base which
lIccnrotely meosures the benefits provided to
ellch owurd or other llcllvlly, Thn bUHUH I1I11Ht
be established in accordance with resonable
criteria. and be supported by current data.
This method is compatible with the
Standards of Accounting and Financial
Reporting for Voluntary Health and WeUare
Organizations issued jointly by the National
Health Council, Inc., the National Assembly
of Voluntary Health and Social Welfare
Organizations, and the United Way of
America.
c. Under this method, indirect costs consist
eclusively of general administrlltion and
general expenses, In all other respects, the
organization's indirect cost ratess shal be
computed in the same manner as that
described in paragraph 0.2 above,
5: Special indirect cast rates, In some
instances, a single indirect cost rate for all .
activities of an organization or for each major
function of the organization ay not be
appropriate, since it would not take into
account those different factors which may
substantially affect the indirect costs
applicable to a particular segment of work,
For this purpose, a particular segment of
work. For this purpose, a particular segment
of work may be that performed under a single
award or it may consist of work under a
group of awards performed in a common
environment. the factors may include the
physical location of the work, the lever of
administrative support required, the nature of
the facilities ororder resources employed. the
scientific disciplines or technical skills
involved. the organizational arrangements
used. or any combination thereof. When a
particular segment of work is performed in an
environment which appears to generate a
significantly different level of indirect costs.
provisions should be made for a separate
indirect cost pool applicable to such work,
The separate indirect cost pool should be
developed during the course of the regular
ollocation process, and the separate indirect
cost rate resulting therefrom should be used
provided it is detennined that (i) the rate
differs significantly from that which would
have been obtained under paragraph 0.2, 3,
and 4 above. and (ii) the volume of work to
which the rate would apply is material.
E. Negotiation and Approval of Indirect Cost
Rates.
, .
I
Office of Management and Budget Circular A-122 (6/27/80)
1. Definitions. As used in this section, the
following terms have the meanings set forth
below:
a. "Cognizant agency" means the Federal
agency responsible for negotia ting and
approving indirect cost rates for a nonprofit
organization on behalf of all Federal
agencies,
b, "Predetermined rote" means an indirect
cost rate, applicable to a specified current or
future period, usually the organization's fiscal
year, The rate Is based on an estimate of the
costs to be incurred during the period. A
predetermined rate is not subject to
adjustment.
c, "Fixed rate" means an indirect cost rale
which has the SBme characteristic" as a
predetermined rate, except that the difference
between the estimated costs and the actual
costs of the period covered by the rate is
carried forward as an adjustment to the rate
computation of a subsequent period.
d. "Final rate" means an indirect cost rale
applicable to a specified past period which is
based on the actual costs of the period. A
final rate is not subject to adjustment.
e. "Provisional rate" or billing rale means a
temporary indirect cost rate applicable to a
specified period which is used for funding,
interim reimbursement, and reporting indirect
cbsts on awards pending the establishment of
a rate for the period.
f. "Indirect cost proposal" means the
documentation prepared by an organization
to substantiate its claim for the
reimbursement of indirect costs. This
propesal provides the basis for the review
and negotiation leading to the establishment
of an organization's indirect cost rate.
g, "Cost objective" means a function,
organizational subdivision, contract, grant, or
other work unit for which cost data are
desired and for which provision is made to
accumulate and measure the cost of
processes, projects, jobs and capitalized
projects,
2, Negotiation and appro 1'01 of rotes.
a, Unless different arrangements are
agreed to by the agencies concerned, the
Federal agency with lhe largest dollar value
of awards with an organization will be
designated as the cognizant agency for the
negotiation and approval of indirect cost
rates and, where necessary, olher rates such
as fringe benefit and computer charge-out
rates, Once an agency is assigned cognizance
for a particular nonprofit organiza tion, the
assignment will not be changed unless there
is a major long-term shift in the dollar volu~
of the Federal awards to the organization, All
concerned Federal agencies shall be given the
opportunity to participate in the negotiaTIon
process, but after a rate has been agreed
upon it will be accepted by all Federal
agencies. When a Federal agency has reason
to believe that special operating factors
affecting its awards necessitate special
indirecl cost rates in accordance with
paragraph 0.5 above, it will, prior to the time
the ra tes are negotia ted, notify the cognizant
agency.
b, A nonprofit organization which has not
previously established an indirect cost rate
with a Federal agency shall after the
organization is advised that an award will be
made and, in no event, later than three
months after the effective date of the award,
c. Organizations that have previously
established indirect cost rates must submit a
new indirect cost proposal to the cognizant
agency within six months after the close of
each fiscal year.
d. A predetermined rate may be negotiated
for use on awards where there is reasonable
assurance, based on past experience and
reliable projection of the organization's costs.
tha t the ra te is not likely to exceed a ra te
based on the organization's actual cosls.
e. Fixed rates may be negotiated where
predetermined rates are not considered
appropriate, A fixed rate, however, shall not
be negotiated if (i) all or a substantial portion
of the organization's awards are expected to
expire before the carry-forward adjustment
can be made; (ii) the mix of Government and
non-government work at the organization is
too erra tic to permit an equitable carry-
forward adjustment; or (Hi) !he organization's
operations fluctuate significantly from year to
year,
f. Provisional and final rates shall be
negotiated ~here neither predetermined nor
fixed rates are appropriate.
g. The results of each negotiation shall be
formalized in a written agreement between
the cognizant agency and the nonprofit
organization. The cognizant agency shall
distribute copies of the agreement to all
concerned Federal agencies,
h, If a dispute arises in a negotiation of an
indirect cost rate between the cognizant
agency and the nonprofit organization, the
dispute shall be resolved in accordance with
the appeals procedures of the cognizant
agency,
i. To the extent that problems are
encountered among the Federal agencies in
connection with the negotiation and approval
process, the Office of Management and
Budget will lead assistance as required to
resolve such problems in a timely manner.
[Circular No, A-122]
Attachment B
Selected Hems of Cost
Table of Contents
1, Advertising cost!
2. Bad debts
3, Bid and proposal costs (reserved)
4. Bonding costs
5, Communication costs
6. Compensation for personal services
7. Contingency provisions
a. Contributions
9. Depreciation and use allowances
10. Donations
11, Employee morale, health and welfare
cos ts and credits
12. Entertainment costs
13. Equipment and other capital expenditures
14. Fines and penalties '
15. Fringe benefitl
16, Idle facilities and idle capacity
17. Independent research and development
(reserved)
18. Insurance and indemnification
19, Interest, fund-raising, and investment
manageml<nt costs
20. Labor relations costs
I
A-122:4
21. Losses on other awards
22, Maintenance and repair costs
23. Materials ll/ld supplies
24. Meetings, conferences
2.'), MemLerships, subscriptions, and
prGfessional activity costs
26. Organization costs
27, Overtime, extra-pay shift, and multishil't
premiums
26, Page charges in professional journals
29. Participant support costs
30, Patent costs
31. Pension plans
32. Plant security costs
33, Preaward costs
34, Professional service costs
35, Profits and losses on disposition of
depreciable property or other capital
Ilssets
36. Public it'iformation service costs
37. Publication and printing costs
:l6. Rearrangement and alteration costs
39. Reconversion costs
40, Recruiting costs
41. Relocation costs
42. Rental costs
43. Royalties and other costs for me of
patents and copyrights
44. Severance pay
45, Specialized service facilities
46, Taxes
47. Termination costs
46, Training and education costs
49, Transportation costs
50. Travel costs
[Circular No, A-l22]
AlIaclunent B
Selected Items of Cost
Paragraphs 1 through 50 provide principles
to be applied in establishing the allowability
of certain items of cost. These principles
apply whether a cost is treated as direct or
indirect. Failure to mention a particular item
of cost is not intended to imply that it Is
unallowable; rather determination os to
allowability in each case should be based on
the treatment or principles provided for
similar or rela ted items of cost,
1, Advertising casts, , "I
a. Ad-~ertising costs mean !he costs of, .
media services and associated costs. Media
advertising includes magazines, ne\\--spapJrs,
radio and television programs, direct maiL
exhibits, and the like,
b. The only advertising costs allowable are
those which are solely for (i) the recruitment
of personnel when considered in conjunction
,with all other recruitment costs, 89 set forth
in paragraph 40;.(il) the procurement of goods
and services; (Hi) the disposal of surplus
materials acquired in the performance of !he
award except when organizations are
reimbursed for disposals at II predetennined
amount in accordance with AttachmentN of
OMll Circular A-llO; or (Iv) specific
,requirements of the award,
2. Bad debts. Bad-debts. including losses
(whether actual or estlfnated) arising from
uncollectible acconnts Ilnd other claims,
related collection costs, and related legal
costs. are unallowable.
3, Bid and proposal CQsts. (reserved)
4. Banding costs,
r-
I
Office of Management and Budget Circular A-122 (6/27/80)
a. Bonding costs arise when the
Government requires,8Ssurance against
financial loss to itself or others by reason of
the act or default of the organization. They
uriS!! a Iso in instances where the organi:r:a tion
rp.quires similar assuranoe, Included are such
bonds as bid, performance, payment,
athance pa}'lI\ent, infringement. and fidelity
bunds.
b. Custs of bonding required pursuant 10
the terms of the award arE' aHowtlhle.
c. C05ts of bonding required by the
organization in the general conduct of its
uperations are allowable to the extent that
such bonding is in accordance with sound
business practice and the rates and premiums
are reasonable under the drcumatances,
5. Communication cost1;, Costs incurred for
telephone services. local and long distance
telephone calls. telegrnms. radiograJIl5,
postagellnd the like, are aUowabJe.
6. Compensation for personal services.
a. Definition. Compensation for personal
services includes sl1 compensation paid
currently or accrued by the organization for
services of employees rendered during the
period of the award, (except as otherwise
provided in paragraph g. belowJ, II includes.
but is not limited to, salaries. wages,
director's and executive committee member's
fees, incentive awards, fringe benefits,
pension plan costs. allowances for off-site
pay, incentive pay. location allowances,
herdship pay, and cost of living differentials.
b, A/lowability. Except as otherwise
specifically provided in this paragraph the
costs of such compensation are allowable to
the extent that:
{1J Total compensation tO,individual
employees is reasonable for the services
rendered and conforms to the established
policy of the organization consistently
applied to both Government and non-
Government activities: and
(2J Charges to awards whether treated as
difllct or indirect costs are determined and
supported as required in this paragraph.
c. Reasonableness.
{1J When the organization is predominantly
engaged in activities other than those
sponsored by the Government. compensation
for employees on Government-epon90red
work will be considered reasonable to the
extent that it is consistent with that paid for
similar work in the organization's other
activities,
(2J When the organization is predominantly
engaged in Government-sponsored activities
and in cases where the kind of employees
required for the Government activities,are
not found in the organization's other
activities, compansation for employees on
Government-sponsored work will be
considered re8sonable.lo the extent that it is
comparable to that paid for similar work in
the labor markets in which the organization
competes for the kind of employees involved.
d, Special considerations in determining
ollowability. Certain conditions require
special consideration and possible limitations
in determining costs under Federal awards
where amounts or types of compensation
appear unreasonable, Among such conditions
are the following:
(l) Compensation to members of nonprofit
organiz;:tions, trustees, directors, associates.
officers, or the immediate families thereof.
Determination should be made that such
compensation is rellsonable for the actual
personal services rendered rather than a
distribution of earnings in excess of costs.
(2) Any change in an organization's
compensation polioy resulting in a
substantial increase in the organization's
level of compensation. particularly when it
was concurrent with an increase in the ratio
of Government awards to other activities of
the organization or any change in the
trentment of allowaoility of specific types of
compensation due to changes in Government
policy.
e. Unallowable costs. Costs which are
unallowable under other paragraphs of this
Attachment shall not be allowable under this
paragraph solely on the basis that they
constitute personal compensation.
f, Fringe benefits,
{1J Fringe benefits in the fonn of regular
compensation paid to employees during
periods of authorized absences from the job,
such as vacation leave, sick leave. military
leave, and the like, are allowable provided
such costs are absorbed by all organization
activities in proportion to the relative amount
of time or effort actually devoted to each,
{2J Fringe benefits In the form of employer
contributions or expenses for social security,
employee insurance, workmen's
compensation insurance, pension plan costs
{see paragraph g, belowJ, and the like. are
allowable provided such benefits are granted
In accordance with established written
organization policies. Such benefits whether
treated as indirect cosls or as direct costs,
shall be distributed to particular awards and
other activities in a manner consistent with
the pattern of benefits accruing to the
individuals or group of employees whose
salaries and wages a~a chargeable to such
awards and other activities.
(3]{a) Provisions for a reserve under a self-
insurance program for unemployment
compensation or workmen's compensation
are allowable to tha extent that the
provisions represent reasonable estimates of
the liabilities for such compensation. and tha
types of coverage. extent of coverage. and
rates and premiums would have been
allowabla had insurance been purchased to
cover the risks. Howevar. provisions for self-
insured liabilities which do not become
payable for more than one year after the
provision is made shaUnot exceed the
present value of the liability,
(bJ Where an organization follows a
consistent polcy of expensing actual
payments to, or,on behaU ot employees or
fanner employees for unemployment
t:ompensation or workmen's compansation,
such.payments are allowable in the year of
-payment with the prior approval of the
awarding agency provided they are allocated
tQal1 activities of the organiza tion.
{4J Costs of insurance on the lives of
trustees, officers, or other employees holding
positions of similar responsibility are
allowable only to the extent that the
insurance represents additional
compensiltion, The costs of such insurance
when the organization is named as.
I
A-122:5
beneficiary are unallowable.
g. Pension plan costs,
{1J Costs of the organizlition's pension plan
which are incurred in accordance with the
established policies of the organization are
allowable, provided:
{aJ Such policies meet the test of
reasonableness:
(b) The methods of cost allocation are not
discriminatory: ,
{cJ The cost assigned to each fiscal year is
determined in accordance with generally
accepted accounting principles as prescribed
in Accounting Principles Board Opinion No.8
issued by the American Institute of Certified
Public Accountants: and
{dJ The costs assigned to a given fiscal year
ere funded for all plan participants within six
months aiter the end of that year, However,
incre,ases to normal and past service pension
costs caused by a delay in funding the
actuarial liability beyond 30 days after each
quarter of the year to which such costs are
assignable ,are unallowable.
(2J Pension plan termination insurance
premiums paid pursuant to the Employee
Retirement Income Security Act of 1974 (Pub,
L. 93-406J are allowable, Late payment
charges on such premiums are unallowable.
{3J Excise taxes on accumulated funding
deficiencies and other penalties imposed
under the Employee Retirement Income
Security Act are unallowable.
h. Incentive compensation. Incentive
compensation to employees based on cost
reduction, or efficient performance,
suggestion awards, safety awards, etc., are
allowable to the extent that the overall
compensation is determined to be reasonable
and such costs are paid or accrued pursuant
to an agreement entered into in good faith
between the organization and the employees
before the services were rendered, or
pursuant to an established plan followed by
the organization so.consistently as to imply,
in effect, an agreement to make such
payment.
i. Overtime, extra pay shift, and multishift
premiums. See paragraph 27.
j, Severance pay. See paragraph 44,
k, Training and education oasts, See
paragraph 48. "I , '
\. Support of salaries and wages. -
{1J Charges to awards for salarie!\ and
wages, whether treated a9 direct costs or
indirect costs, will be based on documented
payrolls approved by a responsible official{sJ
of the organization. The distribution of
salaries and wages to awards must be
supported by personnel activity reports as
prescribed in subparagraph (2J below, except
when a substitute system has been approved
in writing by the the cognizant agency. {See
paragraph E.2 of Attachment AJ
{2J Reports reflecting the distribution of
activity of each employee must be
maintained for all staff members
(professionals and nonprofessionalsJ whose
compensation is charged, in whole or in part.
directly to awards. In addition, in order to
support the allocation of indirect costs, such
reports must also be maintained for other
employees whose work involves two or more
runcitons or activities If a distribution of their
compensation between such functions or
activities is- needed in the determination of
I
I
Office of Management and Budget Circular A-122 (6/27/80)
the organization's indirect cost rate(s) (e.g,.
an employee engaged part-time in indirect
cost activities and part-time in a direct
function), Reports maintained by nonprofit
organizations to satisfy these requirements
must meet the following standards:
(a) The reports must reflect an after-the-
fact determination of the actual activity of
each employee, Budget estimates (i.e,.
estimates determined before the services are
performed) do not qualify as support for
charges to awards,
(b) Each report must account for the total
activity for which employees are
compensated and which is required in
fulfillment of their obligations to the
organization,
(c) The reports must be signed by the
individual employee, or by a responsible
supervisory official having first hand
knowledge of the activities performed by the
employee. that the distribution of activity
represents a reasonable estimate of the
actual work performed by the employee
during the periods covered by the ,reports.
(d) The reports must be prepared at least
monthly and must coincide with one or more
pay periods,
(3) Charges for the salaries and wages of
,nonprofessional employees, in addition to the
'supporting documentation described in
subparagraphs (1) and (2) above. must also
be supported by records indicating the total
number of hours worked each day
maintained in conformance with Deportment
of Labor regulations implementing the Fair
Labor Standards Act (29 CFR Part 516). For
this purpose. the term "nonprofessional
employee" shall have the same meaning as
"nonexempt employee," under the Fair Labor
Standards Act.
(4) Salaries and wages of employees used
in_meeting cost sharing or matching
requirements on awards must be supported in
the same manner as salaries and wages
claimed for reimbursement from awarding
agencies.
7. Contingency provisions, Contributions to
a contingency reserve or any similar
provision made for events the occurrence of
which cannot be foretold with certainty as to
time, intensity, or with an assurance of their
happening, are unallowable, The term
"contingency reserve" excludes self-
insurance reserves (see paragraph 6.f.(3) and
18.a.(2)(d)); pension funds (see paragraph
8.(g)); and reserves for normal severance pay
(see paragraph 44.(b)(1).
8. Contributions. Contributions and
donations by the organization to others are
unallowable.
9, Depreciation and use allowances.
a, Compensation for the use of buildings.
other capital improvements. and equipment
on nand may be made through use
allowanr;es or depreciation. However, excepl
as provided in paragraph f. below a'
f:omuination of the two methods may not be
IIsed in cormection with a single class of
fixed assets le,g" bllildings, office equipment.
computer equipment, etc,).
b. The computation of use allowances or
d'~prl'ciation shall be based on the
acqoisition cost of the assets involved. The
acquisition cost of an asset donated to the
organization by a third party shall be Its fair
market value at the time of the donation.
c. The computation of use allowances or
deprecia tion will exclude.
(1) The cost of land;
(2) Any portion of the cost of buildings and
equipment borne by or donated by the
Federal Government irrespective of where
title was originally vested or where it
presently resides; and
(3) Any portion of the cost of buildings and
equipment contributed by or for the
organization in satisfaction of a statutory
matching retirement.
d. Where the use allowance method is
followed, the use allowance for buildings and
improvement (including land improvements
such as paved parking areas, fences, and
sidewalks) will be computed at an annual
rate not exceeding two percent of acquisition
cost. The use allowance for equipment will
be computed at an annual rate not exceeding
six and two-thirds percent of acguisition cost.
When the use allowance method'ls used for
buildings. the entire building must be treated
os a single asset: the building's components
(e,g, plumbing system. heating and air
conditioning, etc.) cannot be segregated from
the building's shell. The two percent
limitation. however, need not be applied to
equipment which is merely attached or
fastened to the building but not permanently
fixed to it and which is used as furnishings or
decorations or for specialized purposes (e.g,.
dentist chairs and dental treatment units.
counters. laboratory benches bolted to the
floor, dishwashers, carpeting. etc,), Such
equipment will be considered as not being
permanently fixed to the building if it can be
removed without the need for costly or
extensive altera tions or repairs to the
building or the equipment. Equipment that
meets these criteria will be subject to the six
and two-thirds percent equipment use
allowance limitation.
e. Where depreciation method is followed.
the period of useful service (useful life)
established in each case for usable capital
assets must take into consideration such
factors as type of construction, nature of the
equipment used. technological developments
in the particular program area, and the
renewal and replacement policies followed
for the the individual items or classes of
aasets involved. The method of depreciation
used to assign the cost of an asset (or group
of assets) to accounting periods shall renect
the pattern of consumption of the asset
during its useful life, In the absence of clear
evidence indicating that the expected
consumption of the asset will be significantly
grea ter or lesser in the eady portions of its
useful life than in the later portions, the
straight-line method shall be presumed to be
the appropriate method. Depreciation
methods once used shall not be changed
unless approved in advance by the cognizant
Fetleral agency. When the depreciation
method is introduced for application to assets
previously subject to a use allowance, the
combination of use a!l-owances and
depreciation applicable to such assets must
not exceed the total acquisition cost of the
assets. When the depreciation method is used
for buildings, a buildinl('s shell may be
A-122:6
segregated from each building component
(e.g., plumbing system, heating, and air
conditioning system, etc,) and each item
depreciated over its estima'ed useful life; or
the entire building (i.e., the shell and all
components) may be treated as a single asset
and depreciated over a single useful life.
f. When the depreciation method is used
for a particular class of assets, no
depreciation may be allowed on any such
assets that, under paragraph e. above, would
be viewed as fully depreciated. However, a
reasonable use allowance may be negotiated
for such assets if warranted after taking into
consideration the amount of depreciation
previously charged to the Government, the
estimated useful life remaining at time of
np-gotiation. the effect of any increased
maintenance charges or decreased efficiency
due to age, and any other factors pertinent to
" the utilization of the asset for the purpose
contemplated,
g. Charges for use allowances or
depreciation must be supported by adequate
properly records and physical inventories
must be taken at least once every two years
(a stati.tical sampling basis is acceptable) to
ensure that assets exist and are usable and
needed. When the depreciation method is
followed, adequate depreciation records
indicating the amount of depreciation taken
each period must also be maintained,
10. Donations
a, Services received.
(1) Donated or volunteer services may be
furnished to an organization by professional
and technical personnel, consultants, and
olher skilled and unskilled labor. The value
of these services is not reimbursable either as
a direct or indirect cosl.
(2) The value of donated services utilized
in the performance of a direct cost activity
shall be considered in the determination of
tbe organization's indirect cost rate(s) and.
accordingly, shall be allocated a
proportion'ite share of applicable indirect
costs when the following circumstances exist;
la) The aggregate value of the services is
material;
(b) The services are supported b~-lI
significant amount of the indirect costs. . '
incurred by the organiza \ion:
Ie) The direct cost activity is not pursued
primarily for the benefit of the Federal
Govcmlmenl.
(3) In those instances where there is no
basis for determining the fair market value of
the services rendered, the recipient and the
cognizant agency shall negotiate an
appropriate allocation of indirect cost to the
services.
(4) Where donated services directly benefit
a j:wject supported by an award, the indirect
costs allocated to the services VvHl be
considered as a part of the total costs of the
project. Such indirect costs may be
reimbursed under the award or used to meet
cost sharing or matching requirements.
(5) The value of the donated services may
be used to meet cost sharing or matching
requirements under conditions described in
Attachment E. OMB Circular No, A-ll0,
Where donated services are treated as
indirect costs. indirect cost rates will
separate the value of the donations so that
I
Office of Management and Budget Circular A-122 (6/27/80)
reimbursement will not be made,
(6) Fair market value of donated services
shall be computed as follows:
(a) Rates for volunteer services, Rates for
volunteers shall be consistent with those
regular rates paid for similar work In other
activities of the, organization, In cases where
the kinds of skills involved are not found in
the other activities of the organization, the
rates used shall be consistent with those paid
for similar work in the labor market in which
the organization competes for such skills,
(b) Services donated by other
organizations, When an employer donates
the services of an employee. these services
shall be valued at the employee's regular rate
of pay (exclusive of fringe benefits and
indirect costs) provided the services are in
the same skill for which the employee is
normally paid. If the services are not in the
same skill for which the employee is normally
paid. fair market value shall be computed in
accordance with subparagraph (a) above.
b. Goods and space,
(1) Dpnated goods; i.e,. expendable
personal property/supplies. and donated use
of space may be furnished to an organization.
The value of the goods and space is not
reimbursable either as a direct or indirect
cost.
(2) The value of the donations may be used
to meet cost sharing or matching share,
requirements under the conditions described
In Attachment E. OMB Circular No. A-11Q,
The value of the donations shall be
determined 10 accordance with Attachment
E. Where donations are treated as indirect
costs. indirect cost rates will separate th,
value of the donations so that reimbursement
will not be made.
11, Employee margie, health. and welfare,
costs and credits. The costs of house
publications, health or first-aid clinics. and!
or infirmaries, recreational activities.
employees' counseling services, and other
expenses incurred in accordance with the
organization's established practice or custom
for the improvement of working conditions.
employer-employee relations. employee
morale, and employee performance are
allowable, Such costs will be equitably
apportioned to all activities of the
organization. Income generated from any of
these activities will be credited to the cost
, thereoF unless such income has been
irrevocably set over to employee welfare
organizations.
12, Entertainment costs. Costs of
amusement. diversion, social activities,
ceremonials, and costs relating thereto, such
as meals, lodging, rentals, transportation. and
gratuities are unallowable (but see
paragraphs 11 and 25).
13. Equipment and other capital
e,>.penditures.
a, As used in this paragraph. the following
lermJi.have1he,m~<!ninR!ll!!).tfQrth below:
(1) "Equipment" means an article of
nonexpcndable tangible personal property
having a useful life of more than two years
and an acquisition cost of $500 or more per
unit, An organization may use its own
definition provided that it at least includes all
non expendable tangible personal property ils
deFined herein,
(2) "Acquitition cost" means the net
invoice unit price of an item of equipment.
including the cost of any modifications.
attachments. accessories, or auxiliary
apparatus necessary to make it usable for the
purpose for which it is acquired. Ancillary
charges. such as taxes, duty. protective in-
transit insurance, freight. and installation
shall be included in or excluded from
acquisition cost in accordance with the
organization's regular written accounting
practices,
(3) "Special purpose equiphlent" means
equipment which is usable only for research.
medica\' scientific, or technical activities,
Examples of special purpose equipment
include microscopes, x-ray machines, surgical
Instruments. and spectrometers,
(4) "General purpose equipment" means
equipment which is usable for other than
rese(.rch, medica\' scientific. or technical
activities. whether or not special
modifications are needed to make them
suitable for a particular purpose. Examples of
general purpose equipment include office
equipment and furnishings. air conditioning
equipment, reproduction and printing
equipment, motor vehicles. and automatic
data processing equipment.
b. (1) Capital expenditures for general
purpose equipment are unallowable as a
direct cost except with the prior approval of
the awarding agency.
(2) Capital expenditures for special purpose
equipment are allowable as direct costs
provided that items with a unit cost of $1000
or more have the prior approval of the
awarding agency.
c, Capital expenditur-es for land or
buildings are unallowable as a direct cost
except with the prior approval of the
awarding agency.
d. Capital expenditures for improvements
to land. buildings, or equipment w.hich
materially increase their value or useful life
are unallowable as a direct cost except with
the prior approval of the awarding agency.
e. Equipment and other capital
expenditures are unallowable as indirect
costs. However, see paragraph 9 for
allowability of use allowances or
deprecia tion on buildings, capital
improvements. and equipment. Also, see
paragraph 42 for allowability of rental costs
for land. buildings, and equipment.
14, Fines and penalties, Costs of fines and
penalties resulting from violations of, or
failure of the organization to comply with
Federa\' State, and local laws and re~lations
are unallowable except when incurred as a
result of compliance with specific provisions
of an award or instructions in writing from
the awarding agency, '
15. Fringe benefits. See paragraph 6. f.
16, Idle facilities and idle capacity.
a. As used in this paragraph the fo\1owing
terms have the meanings set forth below:
(1) "Facilities" means land and buildings or
any portion thereof. equipment individually
or collectively. or any other tangible capital
asset, wherever located, and whether owned
or leased by the organization,
(2) "Idle Facilities" means completely
unused facilities that are excess to the
organi7.ation's current needs.
(3) "Idle capacity" means the unused
i
A-122:7
capacity of partia\1y used facilities_It i!J tbe
difference between tnat which a facility
could achieve under roo per cent operating
time on a one-shift basis less operating
interruptions resulting from time lost for
repairs. setups. unsatisfactory materials. and
other normal delays, and the extent to which
the facility was actoally u~ed to meet
demands during the accounting period. A
multishift basis may be used if it can be
shown that this amount of usage could
normally be expected for the type of facility
involved,
(4) "Costs of idle facilities or idle capacity"
means cosl1l such as maintenance, repair,
housing. renl. and other related cos19: e.g"
property taxes, insurance. and depreciation
or use allowances.
b. The costs of idle facilities are
unallowable except to the extent that:
(1) They are unnecessary to meet
fluctuations in workload: or
(2) Although not necessary to meet
fluctuations in workload. they were
necessary when acquired and are now idle
because of changes in program requirements.
efforts to achieve more economical
operations, reorganization, termination, or
other causes which could not have been
reasonably foreseen. (:nder the exception
staled in this subparagraph, cosls of idle
facilities are a\1owable for a reasonable
period of time, ordinarily not to exceed one
year, depending upon the initiative taken to
use, lease, or dispose of such facili ties (but
see paragraphs 47.b. and d.),
c, The costs of idle capacity are normal
costs of doing business and are a factor in the
normal fluctuations of usage or indirect cost
rates from period to period. Such costs are
a\1owable, provided the capacity is
reasonably anticipated to be necessary or
was originally reasonable and is subject to
reduction or elimination by subletting,
renting, or sale, in accordance with sound
business, economics, or security practices.
Widespread idle capacity throughout an
entire facility or among a group of assets
having substantially the same function may
be idk facilities. .
17. J'lfl"p~ndent research and development
[Reserv"d], ' .
18. Illsurance and indemnification. )
a. Insurance includes insurance which the
organization is required to carry, or which is
approved, under the terms of the award and
any other insurance which the organization
maintains in connection with the general
conduct of its operations. This paragraph
does not apply to insurance which represents
fringe benefits for emrloyees (see paragraph
6.f, and 6,g.(2)).
(1) Costs of in;;~1fance r~quired or
approved, and maintained, pursuant to the
award are allowable.
(2) Costs of other insurance maintained by
lhe organization in connection with the
general conduct of its opel'a lions are
allowable subject to the following limitations.
(a) Types and extent of coverage shall be
in accordance with sound business practice
and the rates and premiums shall be
reasonable under the circumstances,
(bl Costs allowed for business interruption
or other similar insurance shall be limited to
-! '
I
Office of Management and Budget Circular A-122 (6/27/80)
exclude coverage of managemf'nt fees,
(c) Costs of insurance or of any provi~ions
for a reserve covering the risk of loss or
eli-IIl1age to Government property are
allowable only 10 !he extent thai the
orJ.!'wization iR liable for such loss or damage,
(J) Provisions for 8, reserve under a self-
insuraltce program arl! allowablp. to tne
exlenlthattypes of coverage. cxtp.nt of
coverage, ra!es. and premiums would have
been allowed had insu:ance been purchased
to cover the risks, However, provision for
known or reasonably esli.mH!ed sP.lf-in~ured
liHbilities, which do noi become payable for
more than one year after the provision is
made shall root exceed the present value of
the liability.
(e) Costs of insurance on the lives of
trustees. officers, or other e:nployep.s holding
positions of similar responsibilities arc
allowable only to the extent thatlhe
insurance represents additional
compensation (see paragrRph 6), The cost of
such insurance when the o~anization is
identified as the beneficiary is unallow:-.ble,
(3) ActuallosscR which could have been
covercd by permir.9ible insurance [through
the purchase of insuran::e or a self-insurance
program) are unallowable unless expressly
provided for in the awarrl, except:
(a) Costs incurred ber-ause of losses not
covered under nominal deductible insurance
coverage provided in kpeping with sound
business practice are allowable,
(b) Minor losses not covered by insurance,
such as spoilage, breakago., and
disappearance of supplies. which occur in the
ordinary course of operations. are allowable.
b. Indemnifica lion includes securing the
organiza tion against lia bili ties to third
persons and any other loss or daniago., not
compensated by insurance or otherwise. The
Government is obligated to indemnify the
organization only to the extent expressly
provided in the award.
19; Interest. fund raising, and investmellt
management costs.
a. Costs incurred for interest, on borrowed
capital or temporary use of encowment
funds, however represented, are unallowable.
b. Costs of organized fund raising.
including financial campaigns, endowment
drives, solicitation of gifts and bequests, and
similar expenses incurred solely to rai~e
capital or obtain contributions are
unallowable.
c. Costs of investment counsel and staff
and similar expenses incurred solely to
enhance income from Investlnenls are
unallowable.
d. Fund raising and investment activities
shall be allocated an appropriate share of
indirect costs under the conditions described
in paragraph B of Attachment A.
20. Lobar relations costs. Costs incurred in
maintaining satisfactery retations bet.....een
the organization and it~ employees,induding
cosls of labor ma"agement c;ommittees,
employee publications, and other related
activities are allowable,
21, Losses on other awards. Any excess of
costs over Income on any award is
unallowable 08 8 cost of any other award.
This indudes, but is not limited to, the
organization's contributed portion by reason
of cosl sharing agreements or any
underrecoveries through negotiation of Jump
surn~ for, or ceilings on, indirect costs.
Z2, /YIain!enance and repair costs, Costs
incurred for necessary maintenance, repair.
or upkeep ef buildings and eqnipment
(inchaiing Government property unless
o:herwise provided for) which neither add to
the permanent value of tJlt' property nor
appreciably prolong its intended life, but
keep it in an eff'cient operating condition, are
allowahle, Cosls incurred for iJ:lpro\'ements
which add to the permanent value of the
buildings and equipment or appreciavly
prolong their intended life shall ve treated as
capital expenditures (see par<lgraph 13),
23. MateriaJ.~ and supplie,9. The costs of
materials and supplies necessaIl' to cHrry out
an award are allowable, Such cost~ should be
charged at their actual prices after deducting
all cash diecounts. trade discounts. rebates.
and allowances receiv'ed by the organization,
Withdrawals from general stores or
stockrooms should be charged at cost under
any recognized method of pricing
consistently applied, Incoming transportation
charges may ve a proper part of matp.rial
cost. Matllrials and supplies charged' as a
direct cost should include only the materials
and supplies actually used for the
performance of the contract or grant. and due
credit should be given for any excess
materials or supplies retained, or returned to
vendors.
24, Meetings. conferences.
a. Costs associa ted with the conduct of
meetings, and conferences, and include the
cost of renting facilities, m~als, speakers'
fees, and the like, But see paragraph 12,
Entertainment costs. and paragraph 29.
Participant suppcrt costs,
b. To the extent that these costs are
identifiable with a parllcular cost objective,
they should be charged to that objective, (See
paragraph B, of Attachment A.) These costs
are allowable provided that they meet the
general tests of allowable, shown in
Attachment A to this Circular,
c. Cost~ of meetings and conferences held
to conduct the general administration of the
organization are allowable,
25. Memberships. subscrIptions. and
professional activity costs.
a. Costs of the organization's membership
in civic, business, technical and professional
organizations are allowable.
b. Costs of the organization's subscriptions
to civic, business, professional. and technical
periodicals are allowable,
c. Cosls of attendance at meetings and
conferences, sponsored by others when the
primary purpose is the dissemination of
ted:nical information, are allowable. This
induJes costs of meals, tral1sportatron, and
'other items incidental to such attendance,
25. Organization costs. Expenditures. such
ClS incorporation fees, brokers' fees, fees to
promoters, organizers or management
consultants, attorneys. accountants, c>r
Inve&tment counselors, whether or not
&mlJloyees of the organization, in connection
with est"blishment or reorganization of an
organizHtion, are unallowable except with
prior approval of the awarding agency.
27. Ol'ertime. extra-pay shift. and
,
A-122:8
mul!ishi/'t pnmiums, Premiums for overlinw.
t'xtra-pay shifts, ami mu!lishift work are
1I1;o\\'uL.le only with the prior appro.'ul of ,l;e
awarding agency e)o,(;ept:
a. When ncceSSi:ry to cope wi!h
cr.lergenc:ics, such as lhose resulting frum
",__";,i.:I.~,, naluralllisaslers, breakdowns of
eqldprr,<:nl. or oc;c'Isi'mal operati,loal
k)l\k!1(,c~s of u sporadic nature,
h Vlo'hell cr:1pio,\'el'ls are performing indin:cl
fuocliollR such as administration.
nwinlenancr., or accounting,
c. (n the performuilce of lesls, laboratory
pron:Jures. CJr other simii..r operations which
ore Gnrd;nuolls in nature and cannot
rellsnfl?l:>i:; ve interrupled or olhcrwisl!
COIH~I:~'.I:'u.
d, \i\'hcn lower overull cosl to the
(;o',('rr.;neul will result.
20. Page charges in professional journals,
Page charges for professional journal
publica I ions are allowable as a necessary
part of research cos:s, where:
a. The research papers report work
supported l..y the Government; and
b, The cliurges are levied imparlilllly on all
research F"pers published by the journat,
wheth'!r or nol by Government-sponsored
authors.
29. {'artic;ipaJlt support costs, ParticipHnt
support costs arc direct costs for items such
as stipends or subsislence allowances. travel
nllowanc:es. And registration fees paid to or
on behalf of participants or trainees (bul not
employees) in connection with meetings.
conferences, symposia, or training projects.
These costs are allowable with the prior
approval of the awarding agency.
30, Patent costs,
a. Ccsls of (i) preparing disclosures,
reports, and other documents required by the
aw..rd and of searching the art to the extend
necessary to make such disclosures. (ii)
preparing documenls and any other patenl
costs in Gonnection with the filing and
prosecution of a United statps palent
applicati"n where title or royalty-free license
is required vy the Governmf'nlto be
conveyed io the Government. and (iii) general
c;ounsclil;g services rel!lting to pateh,and
copyright matters. suc;h as IIdvice on patenJ
and copyright laws, regula lions. clauses, and
employee agreements are allowable (but see
pllragr!lph 34).
b Cosl of preparing disclos1lres. reports,
and other documents and of searching the art
10 the exlent necessary 10 make di~closurcs.
if not required by Ihe award. p.re
unnllowable. Costs in connection with (i)
filing and prosecuting any foreign patent
npplicalion, or (ii) any United States pAtent
application, wI, ere the award docs not
require conveying title or a royalty-free
license to the Government, are unallowable
(also ice paragraph 43).
31. Pension plans. See paragraph 6, g.
32, Plant security costs. Necessary
expenses incurred to comply with
Government security requirements or for
facilities protection. including wages,
uniforms. and equipment of personnel are
ullowuble,
33. Preaward costs. Preaward costs are
those incurred prior to the effective date of
the award directly pursuant to the
.
, ~,
.'
I
Office of Management and Budget Circular A-122 (6/27/80)
negotiation Bnd in anticipation of the Award
whHll' such costs is necessary to comply with
~he proposed delivery schedule or period of
pcrform<lnce. Such costs are allowable only
lu the extent that they would have been
ailowable if incurred after the dalp. of the
(lw<lrd and only with the written approval of
the -8....arding ngeney.
34, Professional service costs,
a. Costs of profe~sional and consultant
services rendered by persons who are
r.H''11UerS of a particular profession or possess
a special skill, and who are not officers or
empiuyees of the organization, are allowable,
Gubject 10 b, c, and d, of this paragraph when
rcasOlwble in r'Jlation,to the services
rendered and when not contingent upon
rm:overy of the costG from the Government,
b. [n determing the allowability of r.osts in
a particular case, no Gingle factor or any
special combination of factors is necessarily
determinative, However, the following
factors are relevant:
[1) The nalure and scope of the service
rellllered in relation to the service required.
(Z1 The necessity of contracting for the
service. considering the organization's
capahility in the parlicular area.
(3) The past pattern of such costs,
parlicularly in the years prior to Government
awards.
(4) The impact of Government awards on
the organization's business (Le.. what new
problems have arisen).
(5) Whether the proportion of Government
work to the organization's total business is
such as to influence the organization in favor
of incurring the cost, particul!Hly where the
services rendered are not of a continuing
nature and have little relationship to work
under Government granls and contracts.
(6) Whether the service can be performed
more economically by direct employment
rather than contracting.
(7) The qualifications of the individual or
concern rendering the service and the
customary fees charged, especially on non-
Government awards,
(01 Adequacy of the contractual agreement
for the service (e.g.. description of the service.
estimate of time required, rate of
compensation, and termination provi5ions),
c. In addition to the factors in paragraph b
above, retainer fees to the allowable must be
snpported by evidence of bona fide services
available or rendered.
d. Cosl of legRI. accounting, and consulting
seT\'ices. and related costs incurred in
conn~ction with defense of antitrust suits,-
and the prosecution of clai-:T1s against the
Government, are unallowable. Costs of legal.
Recounting and con9ulting services, and
related cost9, incurred in connection with
palenl infringement litigation. organization
and reorgAnization, are unallowable unless
otherwise provided fo.!. in the award (but see
parngraph 47e).
35, Profits and losses on disposition of
depreciable property or other capital assets,
a. [1) Gains and losses on sale. retirement,
or other disposition of depreciable property
shdl be incluned in the year in which they
occur as credlts or charges to cost grouping(s)
in whfch the depreciation applicable to such
property was included. The amount of the
gnin or loss to be included as a credit or
charge to the appropriate cost grouping(s)
shan ue lhe dilIercnce uetween the amount
realized on the property and the
undepreciated basis of the property.
(Z) Gains and losses on lhe disposition of
der.reciable property shall not be recognized
[IS a separate credit or charge under the
foHowing conditions.
la) The gain or loss is processed through H
depreciation reserve account and is refiecled
ill the depreciation allowaule under
paragraph 9.
(L) The property is given in exchange as
pari of the purchase price of a similar item
and the gain or loss is taken into account iri
determining the depreciation cost basis of the
new item.
(c) A loss resulls from the failure to
maintain permissible insurance, except as
otherwise prl1Vided in paragraph 10.a.(3).
(d) Compensation for the use of the
properly was provided through use
allowances in lieu of depreciation in
accordance with paragraph 9,
(e) Gains and losses arising from mass or
extraordinary sales, retirements. or other
dispositions shall be considered on a case-
by.ca~e basis.
b. Gains or losses of any nature arising
from the sale or exchange of property other
than the property covered in paragraph a,
above shall be excluded in computing awarcr
costs,
36. Public infarmatiun sen'ice costs.
a. Public information service costs include
the costassociated'with pamphlets, news
releases, and other forms of information
services. Such costs. are normally incurred to:
(1) Inform or Instruct individuals, groups, or
the general public.
(2) Interest individuals or groups in
participating in a service program of the
Olganization,
(3) Disseminate the results of sponsored
and nonsponsored activities,
b, Public information service costs are
allowable as direct costs with the prior
approval of the awarding agency, Such costs
are unallowable' as indirect costs.
37. Publication and printing costs.
a. Publication COst5 include the cost5 of
printing (including the processes 'of
composition. plate-making, press work.
binding, and the end products produced by
such processes), distribution, promotion,
mailing, and general handling.
b, If these costs are not identifiable with a
particular cos I objective. they should be
allocated as indirect costs to all benefiting
activities of the organization.
c. Publication and printing costs are
unallowable as direct costs except with the
prior approval of the awarding agency,
d. The cost of page charges in journals is
addressed paragraph 28,
38. Rearrangement, and alteration costs.
Costs incurred for ordinary or normal
rearrangement and alteration of facilities are
allowable. Special 9;rrangement and
alteration costs incurred specifically for the
project are allowable with the prior approval
of the awarding agency.
39. Reconversion costs. Costs incurred In
the restoration or rehabilitation of the
organization'. facilities tei approximately the
I
A~122:9
same condition existing immediately prior to
commencement of Government awards, fair
wear and tear excepted, are allowable,
40, Recruiting costs, The following
recruiting costs are allowable: cost of "help
wanted" advertising, operating costs of an
employment office, costs of operating an
educational testing program. tra,vel expenses
including food and lodging of employees
while engaged in recruiting personnel. travel
costs of applicants for interviews for
prospective employment, and relocation COSIS
incurred incident to recruilment of new
employees (see paragraph 41c). Where the
organization uses employment agencies.
costs not in excess of standard commercial
rates for such services are allowable,
41, Relocation costs.
a. Relocation costs are cosls incident to the
permanent change of duty assignment (for an
indefinite period or for a stoted period of not
less than 12 months) of an existing employee
or upon recruitment of a new employee,
Relocation costs are allowable, subject to the
limitAtion described In paragraphs b, c, and d,
below, provided that:
(1) The move [s for the benefit of the
employer.
(Z) Reimbursement to the employee is in
accordance with an established written
policy consistently followed by the employer.
(3) The reimbursement does not exceed the
employee's actual (or reasonably estimated)
expenses,
b. Allowable relocation costs for current
employees are limited to the following:
(1) The costs of transportation of the
employee. members of his immediate family
and his household, and personal effects to the
new location,
(Z) The costs of finding a new home, such
as advance trips by employees and spouses
to locate living quarters and temporary
lodging during the transition period, up to a
maximum period of 30 days, including
advance trip time,
(3) Closing costs, such as brokerage, legal.,
and appraisal fees, incident to the disposition
of the employee's former home. These costs,
together with those described in (4) below,
are limited to 8 per cent of the'sales price of
the employee's former home, '-
(4) The continuing costs of ownership of
the vacant former home after the settlement
or lease date of the employee's new
permanent home, such as maintenance of
buildings and grounds (exclusive of fixing up
expenses), utilities, taxes, and property
insurance.
(5) Other necessary and reasonable
expenses normally incident to relocstion,
such as tho costs of cancelling an unexpired
lease, disconnecting and reinstalling
household appliances, and purchasing
insurance egainst loss of or damages to
personal property. The co~t of cancelling an
unexpired lease is limited to thres times the
monthly rentaL
c. Allowable relocation costs for new
employees are limitad to those described in
(1) and (2) of paragraph b, above, When
relocation coats incurred incident to the
recruitment of new employees have bean
allowed either as 8 direct or iRwrect cost and
the employee l1lIIigns for reasons within b,is
t -l
.
"'---
I
Office of Management and Budget Circular A-122 (6/27/80)
control within 12 months after hire, the
organization shall refund or credit the
Government for its share of the cost.
However, the costs of travel to an overseas
location shalI be considered travel costs in
accordance with paragraph 50 and not
relocation costs for the purpose of this
paragraph Ii dependents are not permitted at
the location for any reason and the costs do
not include costs of transporting household
goods.
d. The following costs related to relocation
are unallowable:
(1) Fees and other costs associeted with
acquiring a new home.
(2) A loss on the sale of a former home.
(3) Continuing mortgage principal and
interest payments on a home being sold.
(4) Income taxes paid by 6n employee
related to reimbursed relocation costs.
42, Rental costs.
a. Subject to the limitations described in
paragraphs b. through d, of this paragraph,
rental costs are allowable to the extent that
the rates are reasonable in light of such
factors as: rental costs of comparable
property, if any; market conditions in the
area; alternatives avallable;and the type, life
expectancy, condition, and value of the
property leased.
b. Rental costs under sale and leaseback
arrangements are allowable only up to the
amount that would be allowed had the
organization continued to own the property.
c, Rental costs under less-than-length
leases are allowable only up to the amount
that would be allowed had title to the
property vested in the organization, For this
purpose, a less-than-arms-Iength lease is one
under which one party to the lease agreement
is able to control or substantially innuence
the actions of the other. Such leases include,
but are not limited to those between (i)
divisions of an organization; (ii) organizations
under r.ommon control through common
officers, directors, or members; and (iii) an
organization and a director, trustee, officer,
or key employee of the organization or his
immediate family either directl~' or through
corporations, trusts. or similar arrangements
in which they hold a controlling interest.
d. Rental costs under leases which create a
material equity in the leased properly are
allowable only up to the amounl that would
be allowed had the organization purchased
the property on the date the lease agreement
was executed; e.g., depreciation or use
allowances. maintenance, taxes, insurance
but excluding interest expense and other
unallowable costs. For this purpose, a
material equity in the property exists if the
lease in noncancelable or is cancelable only
upon the occurrence of some remote
contingency and has one or 1I)0re of the
following characteristics:
(1) The organization has the right to
purchase the property for a price which at the
beg;nning of the lease appears to be
substantially less than the probable fair
market value at the time it is permitted to
purchase the property (commonly called a
lease with a bargain purchase option);
, (2) Title to the property passes to the
organization at some time during or after the
lease period;
, (3) The term of the lease (initial term plus
periods covered by bargain renewal options,
If any) is equal to 75 per cent or more of the
economic life of the leased property; i.e., the
period the property Is expected to be
econoJ:lically usable by one or more users.
43 Lloyalties and other casts for use of
pal "r and copyrights,
a.' ,yalties on a patent or copyright or
amortization of the cost of acquiring by
purchase a copyright. patent. or right8
thereto, necessary for the proper performance
of the award are allowable unless:
(1) The Government has a license or the
right to free use of the patent or copyright.
(2) The patent or copyright has been
adjudicated to be invalid, or has been
administratively determined to be invalid.
(3) The patent or copyright is considered to
be unenforceable.
(4) The patent or copyright is expired,
b. Special care should be exercised in
determining reasonableness where the
royalties may have been arrived at as a res\llt
of less then arm's length bargaining; e.g.:
(1) Royalties paid to persons, including
corporations, affiliated with the organization.
(2) Royalties paid to unaffiliated parties,
including corporations, under an agreement
entered into in contempla!ion that a
Government award would be made.
(3) Royalties paid under an agreement
entered into after an award is made to an
organization.
c. In any case involving a patent or
copyright formerly owned by the
organization, the amount of royalty allowed
should not exceed' the cost which would have
been allowed had the ol'8anization retained
title thereto.
44. Severance pay.
a. Severance pay, also commonly referred
to as dismissal wages, is a payment in
addition to regular salaries and wages. by
organizations to workers whose employment
is being terminated, Costs of severance pay
are allowable only to the extent that in each
case, it is required by (i) law. (ii) employer-
employee agreement, (iii) established policy
that con.titutes, in effect, an implied
agreement on the organization's part, or [iv)
circumstances of the particular employment.
b. Costs of severance payments are divided
into two catego~ies as follows:
(1) Actual normal trunover severance
payments shall be allocated 10 all activities;
o~. where the organization provides for a
reserve for normal severances such method
will be acceptable if the charge to current
operations is reasonable in light of paymenls
actually made for normal severances over a
representative past period, and if amounts
ch;;rgcd are allocated to all activities of the
organization.
(2) Abnormal or mass severance pay Is of
such a conjectural nature that measurement
of costs bv means of an accrual will not
achieve equity to both parties. Thus, accruals
for this purpose are not allowable. However,
the GovernmEnt recognizes its obligation to
participate to the extent of its fair share, in
any specific payment, Thus, allowability will
be considered on a case-by-case basis in the
event of occurrence.
45. Specialized service facilities.
a. The costs of services provided by highly
I
A-122:10
complex or specialized facilities operated by
the organization, such as electronic
computers and wind tunnels, are allowable
provided the charges for the services meet
the conditions of either b, or c. of this
paragraph and, in addition, take into account
any items of income or Federal financing that
qualify as applicable credits under paragraph
A.5. of Attachment A.
b. The costs of such services. when
material. must be charged directly to
applicable awards based on actual usage of
the services on the basis of a schedule of
rates or established methodology that (i) does
not discriminate against federally supported
activities of the organization, including usage
by the organization for internal purposes, and
(ii) is designed to recover only the aggregate
costs of,t-he services, The costs of each
service shall consist normally of both its
direct costs find its allocable share of all
indirect costs. Advance agreements pursuant
to paragraph A.6. of Attachment A are
particularly important in this situation.
c. Where the cosls incurred for a service
Are nol malerial. they may be allocated as
Indirect costs,
46. Taxes.
a, In general. taxes which the organization
.s required to pay and whi~;h are paid or
accrued in, accordance with generally
accepted accounting principles, and
paymenls made to local governments in lieu
of taxes which are commensurate with the
local government services received are
allowable, except for (i) taxes from which
exemptions are available to the organization
directly or which are available to the
organization based on an exemption afforded
the Government and in the laller case when
the awarding agency makes 8vailable the
necessary exemption certificates, (ii) special
assessments on land which represent capital
improvements. and (iii) Federal income taxes.
b. Any refund of taxes, and any payment 10
the organization of interest thereon, which
were allowed as award costs. wftl be
credited either as a cost reduction or cash
refund. as appropriate, to Ihe Government.
47, Termination costs, Terminati6n of
nwards generally give rise to the iflcurreiice
of costs, or the need for special treatment of
cosls. which would not have arisen had the
award not been terminaled. Cost principles
covering these items are set forth below.
They are to be used in conjunction with the
'other provisions of this Circular in
termination situations.
a. Common items, The cost of items
reasonably usable on the organization's other
work shall not be allowable unless the
organization submits evidence that it would
not re!ain such items at cost without
sustnining a loss, In deciding whether such
Hems are reasonably usable on other work of
the organization, the awarding agency should
consider the organization's plans and orders
for current and scheduled activity.
Contemporaneous purchases of common
items by the organization shall be regarded
as evidence that such items are reasonably
usable on the organization's other work. Any
acceptance of common items as allocable to
the terminated portion of the award shall be
limited to the extentlhat the quantities of
, ,J
..
-
I
Office of Management and Budget Circular A-122 (6/27/80)
such items on hand. in transit. and on order
are in eXCe1lS of the reasonable quantitative
requirements of olher work.
b. Costs continuing after tlJrminatian. U i:i1
a particular case. despite all reasonable
efforts by the organization. certain costs
cannot be discontinued immediately after the
effective date of termination. such costs are
generally allowable within the limitations set
forth in this Circular. except that any such
costs continuing after termination due to the
negligent or willful failunt of the organization
to discontinue such costs shall be
unallowable. '
c. Loss of useful value. Loss oC useful value
of special tooling. machinery and equipment
wh>:h was nol charged to the award as a
C:l;:iial expenditure is generally allowable if:
I: ; Such speciallooling. machinery. or
eq, :pment is not reasonably capable of use in
lb:. Lither work of the organization.
(::l The interest oC the Government is
pre Jr:ti!d by transCer of title or I,y other
nlC':I:lS deemed appropriate by the awarding
a~' ncy:
d. Rental costs. Rental costs under
uO'r,xpired leases are generally allowable
\\<~~cre clearly shown to have been
r('.,~onably necessary for the performance oC
lb tenninated award less the residual value
0:' such leases. if (i) the amount of such rental
cl..imed does not exceed the reasonable use
vabe of the property leased for the period oC
lh.; aW:iJrd and such further period as may be
rp..:.1I)\:,;ble. and (ii) the organization makes
all reasonable efforts to terminate. assign.
settle, or otherwise reduce the cost of such
lease. There also may be included the cost oC
alterations oC such leased property. provided
such aHerations were necessary for the
performance oC the award. and of reasonable
restor..tion required by the provisions of the
lense.
e. Settlement eXpenSBtl. Settlement
expenses including the {ollowing aNI
generally allowable:
(1) Accounting. legaL clmcal. and similar
costs reasonably neCi!Ssary Cor.
(a) The preparation and presentation to
awarding agency of settlement claims and
supporting data with respect to the
terminated portion of the award. unless the
termination is {or default. (See paragraph 4.a
of Attachment L. OMB Circular No. A-llO;
and
(b) The termination and settlement of
subawards.
(2) Reasonable costs for the storage.
transportation. protection. and disposition oC
property provided by the Government or
acquired or produced Cor the award: except
when grantees are reimbursed for disposal.
at a predetermined amount in accordance
with Attachment N of OMB Circular A-llO.
(3) Indirect costs related to salaries and
wages incurred as settlement expens81l i:i1
subparagraphs (1) and (2) of this paragraplL
Normally. such indirect costs shall be limited
to fringe beneIits. occupancy cosL and
immediate supervision.
f. Claims under subawards. Claims under
subawards. including the allocable portion oC
claims which are common to the award. and
to other work oC the organization are
generally allowable. An. appropriate share of
the organization's indirect expense may be
allocated to the amount oC settlements with
subcontractor/subgranteel: provided that the
amount allocated is otherwise consistent
with the basic guidelines contained in
Attachment A. The indirect expense so
allocated shall exclude the same and similar
COlts claimed directly or indirectly all
settlement expenses.
43. Training and education costs.
&. Costs oC preparation and maintenance ol
a program oC instruction including but not
limited to on-tha-job. classroom. and
apprenticeship training. designed to i:i1crease
the vocational effectiveness of employees.
including training materials. textboob,
salaries or wages of trainees (excluding
overtime compensation which might arise
therefrom). and (i) salaries of the director oC
training and staff when the training program
is conducted by the organization: or (il)
tuition and Cees when the training is in an
institution not operated by the organization.
are allowable.
b. Costs of part-time education, at an
undergraduate or postgraduate college leveL
including that provided at the organization's
own facilities. are allowable only when the
course or degree pursued ill relative to the
field in which the employee i. now working
or may reasonably be expected to work. and
are limited to:
(1) Training materials.
(2) Textbooks.
'(3) Fees charge:. by the educational
institution.
(4) Tuition charged by the educational
institution. or in lieu of tuition. instnlctof3'
salaries and the related share oC indirect
costs of the education.a1 institution to the
extent that the sum thereof is not in excess oC
the tuition which would have ben paid to the
participating educational institution.
(5) Salaries and related costs of instructors
who are employees oC the organizalioa.
(6) Straight-time compensation of each
employee for time spent attending classetl
during working hours not in excess oC 156
hours per year and only to the extent thet
circumstances do not permit the operation of
classes or a ttendance a t classes after regular
working hours: otherwise such compensation
is unallowable.
c. C,Jsts of tuition. [ees. training materials.
and textbooks (but not subsistence. salary. or
any other emoluments) in connection with
full-time education. including that provided at
the organization's own facilities. at a
postgraduate (but not undergraduate) college
level. are alIcwable only when the course or
degree pursued is related to the field in which
the employee is now working or may
reasonably be expected to work. and only
where the costs receive the prior approval of
the awarding agency. Such costa are limited
to the costs attributable to a total period not
to excee:i one school year for each employee
so trained. In unusual cases the period may
be extended.
d. Costs oC attendance of up to 16 weeks
per employee per year at specialized
programs specifically designed to enhance
the effectiveness of executives or managef3
or to prepare employees for such positions
are allowable. Such costA i:i1clude enrollment
I
A-122:11
Cees. training materials. textbooks and
related charges. employees' salaries.
subsistence. and travel. Costs allowable
under this paragraph do not include those for
COI1Ill6S that are part of a degree-or:iented
curricuJwo. which are allowable only to the
extent set forth i:i1 b. and c. above.
e. Maintenance expense. and normal
depreciation or Cair rental on facilities
oWTJed or leased by the organization for
training purposes are allowable to the extent
set Corth in paragraphs 9, 22. and 4Z,
f. Cuntributions or donations to
educational or training institutions. Including
the donation of facilities or other properties.
ano scholarships or fellowships. are
unallowable.
g. Training and education costs in excess 01
those otherwise allowable under paragraphs
..p. and c, oC this paragraph may be allowed
with prior approval of the awarding agency,
To be considered for approval. the
organization must demonstrate that such
cost, are consistently incurred pursuant to an
established training and education program.
and that the course or degree pursued is
relative to the field in which the employee is
now working or may reasonably be expected
to work.
49. Transportation costs. Transportation
custs include freight. express. cartage. and
postage charges relating either to goods
purchased. in process. or delivered. These'
costs are allowable. When such costA can
readily be identified with the items involved.
they may be directly charged 88
transportation costs or added to the cost of
such items (see paragraph 23). Where
Identification with the materials received
cannot readJly be made. transportation costa
may be charged to the appropriate indirect
cost accounts iC the organization follows a
consistenL equitable procedure in this
respect.
50. Travel costs.
a. Travel costs are the expenses Cor
transportation. lodging. subtiistence. and
related items incurred by employees who are
in tea vel statua on official business oC the
organization. Travel cosls are allowable
subject to paragraphs b, tHrot!-gh e. below.
when they are directly attributable to specific
work under an award or.are incurred in the
nonnal course o[ administration of the
organization.
b. Such costs may be charged on an actual
basis. on a per diem or mileage basis in lieu
of actual costs incurred. or on a combination
of the tWo, proYided the method used resultA
in charges consistent with those normally
allowed by the organization in its regular
opera tions.
c. The difference in cost between first-cla81
air accommodations and less than finlt-class
air accommodations is unallowable except
when less than first-class air
accommodations are not re880nably
available to meet necessary mission
requirements. such 88 where le88 than first.
class accommodations would (i) require
circuitous routing. (i1) require travel during
unreesonable hours. (iiI) greatly increase the
duration' of the flight, (ivJ result in additional
costs which would offset the transportation
savings. or (v) offer accommodations which
. . ~ ,
t, I
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Office of Management and Budget Circular A-122 (6/27/80)
are not reallOnably adequate for the medical
needB of the traveler.
d; Necessary and r&llllOnabie cosu of
family movements and personnel movements
of a special or man nature are allowable.
pursuant to paragrapha 40 and 41. subject to
allocation on the basis of work or time period
benefited when appropriate. Advance
agreements are particularly important.'
e. Direct charges for foreign travel costs are
allowable only when the travel has received
prior approval of the awarding agency. Each
separate foreign trip must be approved. For
purposes of this provision. foreign travel is
defined as any travel outside of Canada and
the United States and its territories and
possessions. However. Cor an organization
located in foreign countries. the term "foreign
travel" means travel outside that country.
[Circular,No. A-1Z2)
Attachment C
Nonprofit Organizations not Subject to this
C:rcular
Aerospace Corporation. El Segundo.
CaliCornia
Argonne Universities Association. Chicago,
Illinois
Associated Universities. Incorporated.
Washington. D.C.
Associated Universities for Research and
Astronomy. Tucson. Arizona
Atomic Casualty Commission. Washington.
D,C.
Baitelle Memorial Institute. Headquartered in
Columbus. Ohio
Brookhaven National Laboratory. Upton.
New York
Center for Energy and Environmental
Research lCEER). (University of Puerto
Rico)
Commonwealth oC Puerto Rico. Charles Stark
Draper Laboratory, Incorporated
Cambridge. Massachusetts. Comparative
Animal Research Laboratory (CARL)
(University of Tennessee). Oskridge.
Tenne~see
r:nvirorunental Institute of Michigan. Ann
Arbor, Michigan
Har.Cord Environmental Health Foundation.
Richland, Washington
IIT Research lrultitute. Chicago. illinois
Imtitute for Defense Analysis. Arlington.
Virginia
Institute of Gas Technology, Chicago. Illinois
Midwest Research Institute. Headquartered
in Kansas City. Missouri
Mitre Corporation. Bedford. Massachusetts
Monlana Energy Research and Development
Institute, Inc.. (MERDI). Butte. Montana
Na lional Radiological Astronomy
Observatory. Green Bank. West Virginia
Oakridge Associated Universities. Oakrldge.
Tennessee
Project Management Corporation. Oakrldge.
Tennessee
Rand Corporation. Santa Monica. California
Research Triangle Institute. Research
Triangle Park. North Carolina
Riverside Research Institute. New York. New
York
Sandia Corporation. Albuquerque. New
Mexico
Southern Research Institute, Birmingham.
Alabama
Southwest Reeearch Inatitute. San Antonio.
Texaa
SRI International Menlo Parle. CallIornia
Syracuse Research Corporation. Syracuse.
New York
Universities Research Association.
Incorporated (National Acceleration Lab).
Argonne. nlinois
Universities Corporation for Atmospheric
Research. Boulder. Colorado
Nonprofillnsurance Companies such as Blue
Cross and Blue Shield Organizations
Other nonprofit organ.izations 8S negotiated
with awarding agencies.
(FR Doc. llG-2ll211l FIled 7-7-<<1: 8:45 oml
8IlLJJ't,3 CODE 311~1-M
Editorial Corrections to
OMS A-122
OFFICE OF MANAGEMENT AND
BUDGET
Circular A-122, "Cost Principles for
Nonprofit Organizations"; Correction
AGENCY: Office of Management and
Budget.
ACTION: Final policy correction.
SUMMARY: This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 46022.
July 8, 1960).
FOR FURTHER INFORMATION CONTACT:
Palmer Marcantonio, Financial
Managemenl Branch. Office of
Management and Budget. Washington,
, D,C, 20503, (202) 395-4773,
o Page 46022, column 2 the second
Paragraph 1. change Paragraph 5
"Compensation for Personnel Services"
to Paragraph 6.
o Page 46022, column 2 the second
Paragraph 2. change Paragraph 6
"Contingencies" to Paragraph 7.
o Poge 46022. column 3:
Paragraph 4. change Paragraph 31,
"Equipment and Other Capital
Expenditures" to Paragraph 13.
o Paragraph 5, change Paragraph 26
"Meetings" to Paragraph 24.
o Paragraph 6, change Paragraph 27.
"Organization Costs" to Paragraph'26.
o Paragraph 7. change' Paragraph 30
"Page charges in Professtional Journals"
to Paragraph 28. .
o Paragraph 8, change paragraph 37
"Public Information Service Costs" to
Paragraph 36. .
o Paragraph 9. change Paragraph 43
"Rental Cosls" to Paragraph 42.
o Paragraph 9a: in the fourth line. add
"up" between the words "only" and
"to"; in the sixth line change "they" to
..it" .
o Paragraph 10, change Paragraph 51
"Travel Costs" to Para~raph 50.
A-122:12
o Page 46024. column 3 Paragraph
4(a)(2) after "benefits received" add ";
or".
o Page 46025. column 1 Paragraph B3,
change the reference,"Paragraph Z1 of
Attachment B" to "Paragraph 19 of
Attachment B."
o Page 46026, column 1 Paragraph
4a.iii, in the sixth line, change "direct
cost" to "direct costs."
· Page 46026. column 2 Paragraph
Ele, change "e'stablishmenl of a rate" to
"establishment of a final rate."
· Page 46026. column 3 Paragraph
E2b, in the third line add the following
after "a Federal agency shall"-"submit
its initial indirect cost proposal
immediately."
o Page 46027, column 3 Paragraph
, (3)(a), change "workmen's
compensation" to "workerp'
compensa tion,"
o Page 46028. column 1 Paragraph
6f3(b), (the second line of column 1)
change "Workmen's compensation" to
"workers' compensation,"
o Page 46030. ~olumn 3, paragraph
24b.. the sixth line, change "allowable"
to "allowability".
Daniel F, Mann.
Budget and Management Officer.
[FR Doc, 81-3073 FUed 3-1tH11: 8:45 oml
BILlING COOE 311lHll-M
Circular A-122, "Cost PrinCiples for
Nonprofit Organizations"
Correction
In FR Doc. 81-20270. appearing at
page 46022 in the issue of Tuesday, July
8, 1960, the following changes should be
made:
1. On page 46024, column three, the
second sentence in paragraph 'A,,5.b.
should read, "Specifically. the concept
of netting such credit items against)
related expenditures should be applied
by the organization in determining the
rates or amounts to be charged to
Federal awards for services rendered
whenever the facilities or other
resources used in providing such
services have been financed directly, in
whole or in part, by Federal funds."
2, On page 46024, column three. the
second complete sentence in paragraph
A.B. should read. "This is particularly
true in connection with organizations
that receive a preponderance of their
support from Federal agencies."
3, On page 46025. column one,
paragraph D.2. should read. "Z. Any
direct cost of a minor amount may be
treated as an indirect cost for reasons of
practicality where the accounting
treatment for such cost is consistently
npplied to all final cost objectives."
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I
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Office of Management and Budget Circular A-122 (6/27/80)
4, On page 46025, column one.
paragraph B.4.f. should read, "f.
Administration of group benefits on
behalf of members or clients including
life and hospital insurance, annuity or
retirement plans, financial aid, etc."
5. On page 46025. column two, the fir!!t
sentence in paragraph D.l.e. should
read. "The base period for the allocation
of indirect costs is the period in which
such costs are incurred and acc1,!mulated
for allocation to work performed in that
period. "
6. On page 46026, column one, the
second sentence in paragraph D.3.d
should read, "The costs in the common
pool shall then be distributed to
individual awards included in that
function by use of a single indirect cost
rate."
7. On page 46026, column one. the first
sentence in paragraph D.3.e, should
read, "The distribution based used in
computing the indirect cost rate for each
function may be total direct costs
(excluding capital expenditures and
other distorting items such as major
subcontracts and subgrants), direct
!lalaries and wages. or o.ther base which
results in an equitable distribution."
8. On page 46026, column one. the first
and second sentences in paragraph
D.4.a. should read. "Some nonprofit
organizations treat all costs as direct
costs except general administration and
general expenses, These organiza tions'
generally separate their costs into three
basic ca tegories:. . .."
9. On page 46026, the last sentence in
column one (extending to column two),
in paragraph 0.5, should read, "The
factors may include the physical
location of the work. the level of
administrative support required, the
nature of the facilities or other resources
employed. the scientific disciplines or
technical skills involved, the
organizational arrangements used, or
any combination thereof."
10. On page 46026, column three.
paragraph E,2,i. should read. "i. To the
extent that problems are encountered
among the Federal agencies in
connection with the negotiation and
approval process. the Office of
Management and Budget will lend
assistance as required to resolve such
problems in a timely manner."
11, On page 46030, column one, the
introductory text of paragraph 16,b. and
paragraph 16.b.(1) should read. "b. The
costs of idle facilities are unallowable
except to the extent that: (1) They are
necessary to meet fluctuations in
workloads: or",
12. On page 46030, column one, the
second sentence in paragraph 16.c.
A-122:13
should read, "Such costs are allowable.
provided the capacity is reasonably
anticipated to be necessary or was
originally reasonable and is not subject
to reduction or elimination by subletting.
renting, or sale, in accordance with
sound business. economics or security
practices."
13, On page 46031. second column,
paragraph 34,c. should read, "In addition
to the factors in paragraph b. above.
retainer fees to be allowable must be
supported by evidence of bona fide
services available or rendered,"
",LUNG CODE lSOS-Ol-M
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