AGREEMENT FUNDED UNDER THE CLEARWATER COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (3)
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AGREEMENT FUNDED UNDER
THE CLEARWATER COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
THIS AGREEMENT is entered into as of the 1st day of
October, 1990, by the CITY OF CLEARWATER, Florida, a political
subdivision of the State of Florida, hereinafter referred to as the
"CITY", and COMMUNITY PRIDE CHILD4CARE CENTER OF CLEARWATE:R, INC.
as further identified in Appendix A, hereinafter referred to as the
"PSA". This Agreement consists of this document and 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 City of Clearwater Planning & 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 identified in 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, ina 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,
1990, and terminate on September 30, 1991, unless earlier cancelled
as provided herein. The Agreement may be extended for up to one
addi tional 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 determination 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 City representative to PSA as regards conduct of
services under this contract shall be the Community Development
Manager. The PSA' s services shall be carried out under the
supervision of the Agent as identified in Appendix A.
4. The PSA shall not exceed its budgeted amount and shall use
the funds in accordance with the award to be paid with Community
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Development Funds included in Appendix B. Funds shall not be
obligated when payment has been suspended or terminated pursuant
to paragraph 19 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-110, provided in Appendix G, and with the provisions of OMB
Circular 122, provided in Appendix H, or the appropriate successors
documents of these documerts. 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 materials, capital equipment
and services shall be in conformity with the Procurement Standards
set forth in OMB Circular A-110, Attachment 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. Requests for payment shall be as specified
in Attachment B. No advance payments shall be made to the PSA.
All costs and invoices for requests for payment shall be supported
by properly executed payrolls, time records, invoices, contracts,
or vouchers, or other official documentation evidencing in proper
detail the nature and propriety of the charges. All checks
payrolls, invoices, contracts, vouchers, orders or other accounting
documents pertaining in whole or in part to the Agreement shall be
clearly identified and readily accessible. The final request for
reimbursement hereunder shall be submitted within 30 days after
completion of all services to be performed by the PSA and the City
shall not be responsible 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 as provided below.
Program income funds shall be retained by the PSA so long as
the activities that will be undertaken with the program income 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 of the Housing and Community Development Act 1974, as
amended of which state that:
(1) Program income in the form of repayments to, or interest
earned on a revolving fund as defined in Section 570.500(b) shall
be substantially disbursed from the fund before additional cash
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withdrawals are made from the U.S. Treasury for the same activity.
(2) Substantially all other program income 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 of this Agreement of any and all property purchased
with Community Development Funds. "Property" as used in 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
Communi ty 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
funds provided to the PSA under this Agreement, shall be disposed
of, transferred, assigned, or loaned by the PSA without prior
written consent of the City.
11. 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 of the Housing and Community Development Act of 1974 as
amended until five years after expiration of this Agreement, or for
such longer period of time as determined to be appropriate by the
City; or
(2) Disposed of in a manner that results in the City being
reimbursed in the amount of the current fair market value of the
property less any portion of the value attributable to expenditures
of non-CDBG funds for the acquisition of, or improvement to, the
property. (Reimbursement is not required after the period of time
specified in paragraph (b)(8)(i) of Section 570.503 of the Housing
and Community Development Act of 1974, as amended.
12. Nothing in this Agreement shall be construed to permit
invasion of the privacy 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 in such a way as to invade individual privacy and client
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relationships, unless Florida law pertaining to public records
requires public inspection of records containing 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 in 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 in 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 the
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 records shall be available for audit, inspection or
copying purposes at any time during normal business hours and as often
as the City, HUD, 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
wi th the prior written approval of the City. Such records shall
include financial records, audits, supporting 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 in part from the
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negligent performance or omission of the PSA or any employee, agent
or representative of the PSA.
18. The PSA shall not assign this Agreement or any interest of
the PSA in this Agreement without the prior written consent of the
City.
19. The City may suspend, withhold, or terminate payment of the
project, in whole or in part, for cause or convenience. Cause shall
included the following:
a. Use of funds that does not follow project guidelines.
b. Failure to comply with any term or condition hereunder.
c. Refusal to accept conditions imposed by HUD.
d. Refusal to accept conditions imposed by the City.
e. Submittal of reports which are incorrect or incomplete in
any material respect.
f. If carrying out this Agreement is rendered impossible
or infeasible for any reason including changes in law
or the unavailabili ty of HUD funds necessary for
continuation.
g. 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 reason for suspension of payment, the actions that must be
taken as a condition precedent to the resumption of payment, and 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 with priority to those residents who reside in the
Community Development target areas. The PSA shall make every effort
to assure that a minimum of two-thirds of those persons receiving
services hereunder are low and moderate income.
21. No person with responsibilities in the operation of the
project will discriminate with respect to any project participant
because of race, color, national origin, or sex. No participant shall
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 in 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 is 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 requesting any continued 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 shall not as a result of receiving funding for the
Project reduce its support for other similar services already being
provided by the PSA in the area of its operation, and will
affirmatively seek additional assistance and support from other
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sources for increasing services where needs demand such increase. The
PSA will 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
Archeological and Historic Preservation Act of 1974;
Executive Order 11593;
Architectural Barriers Act of 1968;
Hatch Act;
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
COMMUNITY PRIDE CHILD CARE CENTER OF
CLEARWATER, INC.
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ATTEST:
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Secretary
Countersigned:
Rita Garvey
Mayor-Commissi
CITY OF CLEARWATER, FLORIDA
B~r
Ron H. Rabun
~ City Manager
ATTEST:
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Approved as to form & correctness:
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M.A.
City
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Agency: Community
Pride
Year: 1990 - 1991
APPENDIX A
Identification of Aqencv and Soecific Services to be Provided
AGENCY
Name:
Community Pride Child Care Center of Clearwater, Inc.
Legal classification:
A non-profit corporation 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, FL 34615
Agent:
Martha Skelton, Executive Director
813-443-0958
PROGRAM OF AGENCY
Provides a child care program for pre-school children in the North and South
Greenwood areas. Provides day care for children of working parents who are
charged on a sliding scale based on income and family size. Most of the children
come from single parent, minority families with low incomes and many are "Title
XX" families.
SPECIFIC SERVICES AND FACILITIES TO BE PROVIDED UNDER THIS AGREEMENT
PUBLIC SERVICE:
I. Title XX Match and Operating Expenses
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 an approximate 5.7% local match. This match will be provided for
approximately 22 children for approximately 260 days, up to the maximum
funds as identified in Appendix B. Funds are also to be used for operating
expenses such as additional classroom equipment.
PUBLIC FACILITY:
II. South Facility Improvement
The Community Pride Child Care Center South Branch will be located to 211
South Missouri Avenue, the former site of the YWCA Thrift Shop. Public
facility improvements will be needed to provide child care services for 50
or more children in pre-school or pre-kindergarden programs.
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Funds provided under this agreement will be combined with other previously
allocated funds to rehabilitate the structure to meet all state and Local
Codes. Plans for the improvements are currently being finalized.
PUBLIC FACILITY:
III. North Facility Improvement
Improvements to the Community Pride North Facility shall include the
replacement of the light fixtures in the two classrooms and the replacement
of flooring in the utility room. These repairs are due to general
deterioration of the North Facility Building which is over 30 years old.
This is part of a continuing program to upgrade the existing building
located at 1235 Holt Avenue.
North Facility Equipment
Due to an automobile accident which demolished the facility's prior dome
climber, funding will be provided to purchase and install a new dome ~
under this agreement.
SCHEDULE
I. Title XX Match and Operating Expenses
This is a continuing program. SPECIFIC SERVICES will be provided for the
period from the later of the full execution of this Agreement or October
1, 1990 through September 30, 1991. If this Agreement is fully executed
after October 1, 1990, a pro-rata adjustment in the performance expected
may be made.
II. South Facility Improvement
The general property improvements shall began no later than
General Statements
A. Program shall begin operation no later than the later October 1, 1990
or one month after the full execution of this Agreement.
B. Funds for this project shall be expended by september 30, 1991. Any
request for an extension must be requested by the applicant and approved
by the Community Development Manager.
C. Monthly activity reports shall be forwarded to the City by the Agency
and reflect program activity during the previous month. These reports
shall be forwarded no later than the 15th day after the end of the
previous month. Reports shall be forwarded for the entire term of the
agreement which covers October 1, 1990 through September 30, 1991.
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D. Construction activity or purchase of capital equipment shall begin no
later than April 1, 1991.
E. Requests for additional data may from time to time be made, and should
be honored within 15 calendar days, subject to the request being of
reasonably limited scope.
F. Records will periodically be reviewed by the City to verify reimbursement
accuracy and as part of the yearly monitoring process.
G. Payment will be in accordance with the payment schedule identified in
Appendix C.
H. At no time shall payments be processed if the PSA has not satisfactorily
completed the tasks identified in this agreement.
III. North Facility Imp~ovement and Equipment
General Statements
A. Program shall begin operation no later than the later October 1, 1990
or one month after the full execution of this Agreement.
B. Funds for this project shall be expended by September 30, 1991. Any
request for an extension must be requested by the applicant and approved
by the Community Development Manager.
C. Monthly activity reports shall be forwarded to the City by the Agency
and reflect program activity during the previous month. These reports
shall be forwarded no later than the 15th day after the end of the
previous month. Reports shall be forwarded for the entire term of the
agreement which covers October 1, 1990 through september 30, 1991.
D. Construction activity or purchase of capital equipment shall begin no
later than April 1, 1991.
E. Requests for additional data may from time to time be made, and should
be honored within 15 calendar days, subject to the request being of
reasonably limited scope.
F. Records will periodically be reviewed by the City to verify reimbursement
accuracy and as part of the yearly monitoring process.
G. Payment will be in accordance with the payment schedule identified in
Appendix C.
H. At no time shall payments be processed if the PSA has not satisfactorily
completed the tasks identified in this agreement.
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Agency: Community Pride
Year: 1990 - 1991
APPENDIX B
Pro;ect Award
I. Title XX Match and Operating Expenses
Operating support of up to $4,100 will be provided for match and for
BUDGET
Community Pride Child Care Center of Clearwater
SOUTH FACILITY
Title XX Match
October 1, 1990 - September 30, 1991
CDBG
TITLE
XX/IV/A
TOTAL
Salaries $2,813.04 $45,886.00 $48,700
Benefits $ 61. 81 $ 1,008.19 $ 1,070
Pay. Tax $ 272.64 $ 4,447.36 $ 4,720
Prof. Fees $ 53.14 $ 866.86 $ 920
Supplies $ 85.49 $ 1,394.51 $ 1,460
Telephone $ 17.04 $ 277.96 $ 295
Postage $ 3.18 $ 51. 82 $ 55
Insurance $ 84.33 $ 1,375.67 $ 1,460
Mortgage $ 303.83 $ 4,956.18 $ 5,260
Utilities $ 169.25 $ 2,760.75 $ 2,930
Care/Bldg. $ 169.25 $ 2,760.75 $ 2,930
Equip. Maint. $ 6.93 $ 113.07 $ 120
Printing $ 2.19 $ 35.81 $ 38
Subs./Ref $ .98 $ 16.02 $ 17
Mileage $ 10.69 $ 174.31 $ 185
Conf. /Mtg. $ 9.24 $ 150.76 $ 160
Dues $ 2.02 $ 32.98 $ 35
Equipment $ 34.95 $ 570.05 $ 605
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TOTAL $4,100.00 $66,880.00 $70,980
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II. South Facility Relocation and Expansion
Facility improvement funding of up to $3,000.00 will be provided for the
renovations of the YWCA building located at 211 South Missouri Avenue.
BUDGET
Renovations
To be determined once facility work write-up
is completed, and approved as an amendment to
this contract
III. North Facility Improvement and Equipment
Facility improvement funding of up to $1,965.00 will be provided to
Community Pride Child Care, Inc. to purchase and install light fixtures in
two classrooms, replace the flooring in the utility room and purchase and
install a doom climber for the playground.
BUDGET
TOTAL
CDBG OTHER TOTAL
$1,150 0 $1,150
$ 315 0 $ 315
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$1,465 0 $1,465
$ 500 0 $ 500
$1,965 0 $1,965
Capital Improvements
Install light fixtures
Replace flooring
Equipment
Install dome climber
TOTAL NORTH FACILITY
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APPENDIX C
METHOD OF PAYMENT
All payments shall be on a reimbursement basis only.
All requests for reimbursement for salaries shall be supported by a copy of the
checks paid to employees and other documentation as requested. Payroll and other
support documentation must be kept by the agency in an appropriate file.
All requests for reimbursement for purchases shall be supported by a copy of the
invoices and a copy of the check paid to the supplier. Other support
documentation shall be kept by agency in an appropriate file.
All requests for reimbursement for construction projects shall be supported by
a copy of the check paid to the contractor and a copy of a progress or final
payment affidavit, whichever is appropriate. Payroll data for Davis Bacon related
projects and other source documentation shall be kept i.by the agency in an
appropriate file.
All requests for reimbursement shall be certified by the agency's designee that
they are accurate and within the guidelines of the agreement.
All requests for reimbursement shall be forwarded to the city of Clearwater
Planning and Development Department, P.O. Box 4748, Clearwater, Florida 34618.
Any program income shall be submitted to the CITY through the DEPARTMENT at 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.
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Subpart K-Qther Prooram
Requirement.
I 570.&00 Goneral
(II) Section l04(b) c.! \J1l: Act provides
that an)' grant under Mection 100 01 the
Act shall be Ii'. .G. nly illhe grantee
certifies 'to the IIIlis(action ollhe
Secrcli1"ry, among olher lhins~. lhallhe
grllnt "~'ilf lie. conducted and
administered in con(onnily wilh Pub. I..
68-352 and Pub. I.. 90-~:' and, (urlher.
that lbe grantee "will comply wilh lhe
other provisions of lhis tille and with
other applicable laws:: Seclion l04(d)(l)
o( the Act requires lhal the Secrelary
dt:termine with respect \0 grants made
pursullnt 10 section l06(b) (Entillemenl
Grants] and 106(d)(2)(B) (HUD-
Administered Small Cities Granla). at
least on an aMual basis, among other
things. "~'helher lhe grantee haa carried
out lits) certifications in compliance
wilh the requirements and the primary
objectives of this Litle and with other
applicable law. . . . ." Certain other
statule. are expressly made applicable
to Ilctivities assi.ted under the Act by
the Act itself. while other laws not
re(em!d to in the Act may be applicable
to .uch activiLies by their own lerms.
Certain statutes or Executive Orders
which may l"e applicable to activities
assisted under \.be Act by lbeir own
lenu; are administered or enlorced by
governmental departmenu or agencies
other than the Secretarv or the
DcpartInenL This Subpal1 K enwnerates
laws which the Secretary will treat aa
applicable to granls made under section
106 o( the Act. other th~ grants to
\
OJER
APPENDIX D
PROGR&~ REQUIRE~~NTS
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Slates madepunuant to section lOO(d) under that .ection (Secretary'.
o( the Act lor pUrpOleB 01 the Di.cretionary Fund) or .ection n9
delermination. described abo\'e to be (UDAG) ",ojthoutl8lisfactory auurances
made by the Secretary under .eclion to' the same efCect.
l04(d)(l) olthe Act. including statutel (a) "Pub. I.. ~52" reler. 10 Tille VI
expressly made applicable by the Act 01 the Civil Rlghts Act 011{)(l.4 (.(2 U,S.C.
and certain other .Iatutea snd Executive 2000<! e/ ,eq.), which providel that no
Ordcrs for which the Secretary h88 penon In the United Statea .hl1l1 on the
enforcement responsibility. The absence ground oC race. color. or no tional origin,
of mention herein oC any other stalute . be excluded [rom po.rticipa tion In. be
lor which Ihe Secretary does not have dcnied the benefi16 of, or be .ubjectcd to
direct enforcement responsibility is not di.crimination under any program or
intended 10 be laken as an indication acllvity receiving Federal financial
Ihlll. in the Secrelllr)'s opinion, luch assislance. Seclion 602 01 the Civil
statule or Executive Order Is not Righta Act 011004 dirocts each Federal
applicable to activities auilted under depo.rtment and agency empowered to
the Act. For 11I","s which the Secretory extend Federo.l financial assistance to
willlreat as applicable 10 grants made any program or acth'i!)' by woy or gronl
to Slales under section l00(d) oC the Act 10 effectuate the loregoing prohibition
for purposes oC the dete~ination by j"uing n1le~. regulations. or orden or
required 10 be made by the Secretary general arpllcability which shall be
purauantto .ection 104(d)(2) or the Act, consistent with achievement 01 the
see t 570.4.96. . . statute authorir.illi the financial
(b) This Subpart also lets Corth cel1ain ~ssislance: HUt) regul~l1on' .
additional program requirements which Impl~menlm8 the requirement. 01 TIlle
the Secretary has determined to be VI wl!h re~pect 10 HUD programs are.
applicable to grants provided under the contained IJ1 24 CFR Part 1. :
C dmi" (bl "Pub L- 90-ZB4" relera 10 Tille VIII
Act as ,a matter 0 a nlstrallve I h C' '1' R' ht A t 011968 (42 U.S.c.
dlscrel1on. 0 t e. IVI Ig S C
. . 3001 el seq.), popularl)' known as the
(c) In addlhon. to grants made Fair Houling AcL which provides thai it
pursuant to seellon 106(b) and. is the policy of the United Slales 10
lOG(~)(2)(B) of the .~ct (Subparll.D and F provide. within constitutional
01 ~s Parl. respec.tiJ'ely), the limitations. lor fair housing Ihroughout
requ~ementa of thIS Subpart K are the United States and prohibita an)'
apP~lcable to grants made pW'Suantto person from discriminaling in Ihe sale or
secllons 107 and 119 of \.be .Act renlal oC housing, the financing of
(Subparts E and G. respectively). housing, or the provision of brokerage
services. Including in any WilY making
unavailable or denying a dwelling .to
any.person. because of race. color.
religion, sex. or nalional origin. Title
VIII further requires the Secretar)' to
administer the programs and activities
relating to hO~1Iiing and urban
developmentln a manner alfinnalively
\0 further the purposes of Tille VIl1.
Purauanlto thi. slatutory direction. the
Secrelary requires that gran lees
administer all programs and actiyilies
f 570.601 Pub. L 118-352 and Pub. L ~
28<4; Executive Order 11063.
Section l04(b) 01 the Act provides that
any grant under lection 106 ol the Act
shall be made only if the grantee
ce'rtiIiea to \he ulislaction of the
Secretary that the grant "will be
conducted and administered in
conCormity wilb Pub. I.. 8&-35Z and Pub.
I.. ~Z84. " Similarlv. section 107
provides that no grint may be made
D-l
'.
I
rein led to housing nnd community
devclopml?nt in 8 manner \0
eCfirmlllivel)' further fllir housing.
lc) Executive Order ll00J, 85
amended by Executive Order 12259.
direclI the Department to lake all ;!ction
nece8Sory and appropriate 10 prevent
discrimination because oC race, color,
religion (creed). sex, or national origin.
in the sole. leasing. rental. or other
disposition oC residential property and
related facilities (including land 10 be
developed for residential use), or in the
use or occupancy lhereof. if such
property and rclnted facilities are.
among other things. provided in whole
or in part with Ihe lIid of loans,
ad\'ances, granls, or contrihulions
II Rrce'd.10 be made b)' the Federal
Government. !-Iun regulations
implementing Exccutive Ordcr l10GJ are
contained in 24 CFR Part 107.
~ 570.602 Section 109 of th. Act.
(il) Section 109 of the Act requires that
no person in the United States shall on
the ground of roce. color, national origin
or sex. be excluded from participation
in, be denied the benefits oc. or be
subjected to discrimination under. any
program or activity funded in whole or
in part with community development
funds made a vail able pursuant to the
At:t. For purposes oC this section
"program or activit~." is defined as any
function conducted by an identifiable
administrative unit of the recipient. or
by any unit of govemme~t. ~ubrecipient.
or private coniractor receiving
cOr.'lrnunily development funds or loans
from the recipient. "Funded in whole or
in part with community develcpment
funds" means that community
development funds in a:1Y amounl in Ihe
form of grants OJ proceeds from HUn.
guaranteed loans have bee!).transCerred
b)' the recipient or a subrecipient to an
identifiable adminislralh'e unil and
disbursed in a program or activity.
(b) Specific discriminatory actions
prohibited and correctil'! actions. .
(1) A recipienl may nolo under any
program or acth'ily to ....hich the
-~,
regula lion, of Ihi, Pari may aJlJlI)'
directl)' or throuf.h contractu8: or other
IIrran!ll'menls. on the ground of race,
colur. natio"al origin. or sex:
(i) Dcny allr [:lcilities, acr\'icus,
financial aid or other benefils pro\'ided
under the program or activity.
(ii) Pro\'ide on)' facilities, lervices.
financial aid or other benelits which are
different, ur are provided in a differenl
form from Ihut provided 10 others under
the program or Bctivity.
(iii) Subject to segregated or aeporale
treolment in an)' fucilily in. or in BIlY
mailer of process relat~d 10 receipt of
any service or benefil under the program
or activity.
(i,,) Rcstrict in any way access 10. or
in the enjoyment of any advantage or
pri\'ilege enjoyed by othcrs in
connection with facilitics, services.
financial aid or other benefils under the
progr:1m or activity.
(v) Treal an individual differently
from others in determining whether the
individual satisfies any admission,
enrollment. eligibility, membership, or
other requiremenl or condilion which
the individual must meet in order to be
provided any facilities. services or other
benefit pro\'ided under the program or
aCljvi:y.
(vi) Den)' an opportunity to participate
in a program or activily as an employee.
(2) A recipient mal' nol utilize critcria
or methods of odministration which
have the effect of subjecting individuals
to discrimination on the basis of race.
color. national origin. or sex. or have Ihe.
effect of defealing or substantially
impairing accomplishment of the
oujeclives of the program or activity
wilh respect 10 individuals of a
particular race. color. nalional origin. or
sex.
(31 A recipient. in delermining the site
or location oC housing or facilities
provided in whole or in part with funds.
under Ihis part. may not make selections
of such sile or localion which hs\'e the
effect of excluding individuals from,
denying them Ibe benefits of. or
subjecting lhem 10 discrimination on the
0-2
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ground of race, clllor, na lional origin, M
sex: or which have Ihe purpo~e or effecl
of dcfl'atin~ or substantially impairing
the lIcr.umplishmcnlof the objectives cf
thl: Act and of Ihis seCtion.
("'Hi) In administering a program or
activity funded in whole or in part wilh
CDl'G funds rcgordinR which the .
recipient has pre\'iously discriminated
agilinst persons on the ground of race.
color, nu tional origin or sex, the
recipient must luke affirmativc action to
ovcrcomc lhe effccts of prior
discrimina tion.
(ii) E,'cn in the absence of such prior
discriminalion, a recipient in
administerinR a program or activily
funded in whole or in part with CDI3G
lunds should tuke aflirmoti\'e action \0
ovcrcome the c:!fecls of conditions
which would otherwise resull in limiling
participatiun b)' pcrsons of a p:1rtit;ular
race. color. nalional origin or sex,
Where previous discriminatory practice
or usase lends. on the ground of race.
color. ns lional origin or sex, to exclude
individuals from participalion in. \0
deny them the benefits of. or to subject
Ihcm 10 discrimination under any
program or activity to which this part
applies. the recipient has an oblig&lion
to take reasonable aclion to remove or
overcome the consequences of the prior
discriminatory practice or usage. end \0
accomplish the purpose of the Act.
(iii) A recipient shall not be prohibited
by this part from taking any action
eligible under Subpart C to ameliorate
an imbalance in services or facililies
provided to any geographic area or
specific group of persons within its
jurisdiction. whare .the purpose of such
action in to overcome prior
discriminatory practice or usage.
(5) Notwithstonding anything to the
contrary in Ihis section, nothing
contained hcrein shall be conslrued to
prohibit an)' r'lcipient from maintaining
or constructins separate Ih'ing facilities
or rest room facilities for'the difi:renl .
sexes. Furthennore. selectivity on the
basis of sex is not prohibited when
institutional or custodial serVices can
'\
'I APPEND IX E
I SECTION 3 CLAUSE
I
TIlE FOLLOWING SECTION :3 CLAUSE SHALL gE INCLUDED IN ALL CONTRACTS FOR \.lORK IN
CONNCCfrON \.lInt A SECfION :3 PROJECT:
A. The \Jork to be perfomed under this contract is on a project assisted
under a program providing direct Federal financial assistance from
the Ucpartment of Housin~ 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 10\Jer income
residents of the project area and contracts for \Jork in connection \Jith the
project be a\Jarded to business concerns \Jhich are locate~ in, or o\JTIed in
substantial part by persons residing in the area of the project.
B. The parties to this contract \Jill comply \Jith the provisions of said Section 3
and che regulations issued pursuant the reto by the Secretary 0 f !lousing and
Urban Development set forth in 24 CFR, and all applicable rules and orders of
the Department issued thereunder prior to the execution of' this cont ract. The
parties to this contract certify and agree that they are under no contractural
oc other disability \Jhich \Jould prevent them from complying \Jith these
requirements.
C. The contractor yill send to each labor organization or representative of
\Jorkers.wlth yhich he has a collective bargaining agreement or other contract
of understanding, if any, a notice advising the said labor organization of
\Jorkers' 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 yill include this Section 3 Clause in every subcontract for
\Jork in connectiqn vith the project and vill, at the direction of the
applicant for or recipient of Federal financial assistance, take app ropriate
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 vill not subcontract yith any subcontractor
yhere it has notice or knoyledge that the latter has been found in violation 'of
regulations under 24 CFR, and vill not let any subcontract unless the
subcontractor has first provided it w~th a preliminary statement of ability to
comply yith the requirements of these regulations.
E. Compliance with the provisions of Section 3, the regulations set forth in 24 CFR,
and all applicable 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 applicanc or recipient for
such assistance, its successors, and assigns. Failure to fulfill these
requirements shalf 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 yhich Federal assistance is provided,
and to such sanctions as are specified by 24 CFR 135.
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"
APPENDIX F
NOTICE 01 _'QUlRE."!EI\"l' FOR kI'FIR."'V.'rIV!: ACl
TO ENSURE EQUAL EMPLOYMENT OPPOR'I'UN1 T'f
(EXECUTIVE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "Equal Oppor~unity
Clause" and the "St.a.ndaLd Federal EquAl E::nployment Oppor1:u..1.ity Const..rUc-
tion Con~act Specifications" set forth herein.
2. The goals and timetables for minority and female participation, expressed
in percentage ter--s for the Contractor's aggregate workforce in each
~ade on all const--uction work in the covered area., are as follO\.'s:
A. Goals for Female Utilization, All T=ades:
J>..RD\ COVERED
Goals for Women apply nation~ide.
GOALS AND'T!METABLES
Timetable
Goals
(percen t)
F::-om Apr. 1, 1978 until Mar . 31, 1979 . . . . 3.1
From Ap::-. 1, 1979 un1:il Mar . 31, 1980.... 5.1
From Apr. 1, 1980 until Mar. 31, 1981. . . . 6.9
B. Goals for ~~noritv Utilization:
TAMPA-ST. P:::n:P.5BURG, FIA., AA::A
Area covered: P~llsborough, Pasco, and Pi~ellas
Counties, Fla.
Goals and TiJnec.ablesl
Trade
Goal
(percen t)
..
All. . . . . . . . . . . . . . . . . . . . . . . . . .
17.9'
1ror ~e life of the project.
These goals are applicable to all the Con:ractor's const--uction work
(whe~~er or n01: it is Federal or federally assisted) performed in the
covered area.
~e Contractor's co:pliance wi~ the Exec~~ve Order and ~~e regulations
in 41 ~R Part 60-4 shall be based on i~ i~?lementation of ~~e :::qual
O?por1:~~i~ Clause, specific affi:mative action obligatior~ reauired by
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t..'1e speciticadons lec fo::-t.'1 in ~l erR 60-4.3 (al, arj '";.5 efforts to ::-.eet
the goals established for the geographical area ~he~ t..~e cont:act
::-esulting from this solicitation is to be performed. The hou=S of =~nority
and female emplo~nt and training must be substantially ~~iform throughout
the length of the contract, and in each t:ade, and the contractD::' shall
~e a good fait..'1 etfort to employ =~norities and women evenly on each of
i t.S pro j ec-=.s . The transfer of Ininori cy or female employees or t:a.inees
from Contractor to Contractor or f::,om project to project for t.'1e sole
purpose ~f meeting the Contractor's goals shall be a violation of the
contract, the Executive Order and the regulations in 41 CFR Part 60-4.
Compliance with t.'1e goals will be measured against the total work hou=s
performed.
3. The Contractor sha.ll provide ...or! tten notification to the Director 0: t..'1e
Office of Federal Contract Compliance programs within 10 working days of
award of any cons~ction subcontract in excesS of S10,000 at any tier
for constrUction work under the contract resulting from d1is solicitation.
The notification shall list t.~e name, address and telephone number of the
subcontractor; employer identification number; estimated dollar amount of
the subcontract; estimated starting and completion dates of the subcontractl
and the geographical area in which the contract is to be perfo~ed.
4. ".5 used in this Notice, and in the contract resulting from this solicitation,
the "covered area" is Pinellas Coun~, Florida.
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 affi:mat~ve a~ti~n to er.sure t..~at applican-=.s are
employed, and that employees are t:eated during employmen~ ~i~'ou~ ~egard
to their race, color, religion, sex, or national origin. Such action shall
include, cut not be limited to the following: Employment, upgrading,
demotion, or transfer; rec:uitment or recrui~~ent advertising: layoff or
terminati9n, rates of payor other forms of compensation: and selection
for t=aining, including apprenticeship. The cont=ac~or agrees to po~~
in conspicuous places, available to employees and applicantS for ~ploy-
ment, notices to be provided setting forth the provisions of this non-
disc=imination clause.
2. The contracto~ ~ill, in all solicitations or advertis~ents for employees
placed by or on behalf of the contractor, state ~~at all Qualified
- .
applicants .....ill receive consideration for eJn?loyment 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 cont=ac~ or
~derstanding, a notice to be provided advising the said labor union or
.....orkers' representatives of tne.cont=actor's co~~ents under this
section, and shall post copies of ~~e notice in conspicuous places avail-
ab.le to employees and applicants for employment.
F-2
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The cont.:'Act.or ""illl":~~P1Y ...':t.~ all provisions of EXII.. .ive Order 11246
of September 24, 19 , and of the rules, requlations'l and relevant orders
of the Secretaxy of Labor.
S. The contractor ...ill furnish all information And report.s re~red by
Executive Order 11246 of Septeuber 24, 1965, And by rules, regulat.ions,
and orders of ~~e Secretary of Labor, or pursuant ~'ereco, and ...ill pe~t
access to his Dooks, records, and accounts by ~'e a~-~nistering agency
and ~'e Secretary of Labor for purposes of investigation to ascert~in
compliance ...ith such rules, regulations, and orders.
6. In the event. of the contract.or's non-compliance ...i~, the nondiscriminAtion
clauses of this contract or ...ith any of the said rules, regulations, or
orders, this contract may be canceled, terminated, or suspended in ...hole
or in part and the contractor may be declared ineligible for further
Goverr~ent contrac~ or federally assisted constrUct.ion contrac~ in
accordance ...ith 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 la....
7. l~e contractor ...ill include ~'e portion of the sentence ~ediately
preceding paragraph (1) and the provisions of paragrapb~ (1) ~~~ough (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
...ill be binding upon each subcontractor or vendor. The contractor ...ill
take such action ...ith respect to any subcont=ac~ or purchase order as
~'e administering agency may direct as a means 0= enforcing such provisions,
including sanctions for non-compliance: Provided, however, That in t~e
eV,en~ a cont.ractor becomes involved in, or is threatened ...ith, litigation
with a $ubcontractor or vendor as a result of such direction by the
administering agency, the contractor may reques~ the united Seat.es to enter
into such litigation to protect the interests of the united Sta~es.
SV..NOARD FmE.~.L EQUAL E.HPLOYM-1:"NT OPPORTUNITY CONSTRUCTION CONTRACT
SPECIFICATIONS (E)~CUTlVE ORDER 11246)
1. 'As used in these specifications:
a. "Covered area" means the geog:'aphical area described in t.he solici ta-
tion fro~ ...hich this contract resulted.
b. "Director" means Director, Otfice, of Federal Contract Complia.~ce
Progr~~, united States Department of Laber, or any person to ...he~
the Director delegates authori~.
c. "~ployer identification n~ber" means the Federal Social Securi~
n~ber used 00 ~'e Employer's Quarterly Federal Tax Return, u. S.
Treasury Depar~ent Form 941.
d. "l".inori t:y " in c 1 udes :
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"
\
(1) Black (all p~sons having origins 1n any of tl~ Slack
African racial groups not of Hispanic origin)' I
(2) Hispanic (all persons of Mexican, Puerto Rican, Cuban,
Central or South American or other Spanish Culture or
origin, regar~less of :ace) I
(3) Asian and Pacific Islander (~ll persons having origins
in any of the original peoples of ~~e far East, Southeast
Asia, the Iridian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alas~an Native (all persons having
origins in any of ~~e original peoples of Nor~ America and
maintaining identifiable tribal affiliations ~~rough member-
ship and participation or community identification).
2. Whenever the Contrac't:or, or any Subcontractor at any tier, subcont.=acts
a portion of the work involving any const.-uction trade, it shall
physically include in each subcontract in excess of SID ,000 the provi-
$fons of .these specifications and the Notice which contains ~~e ~p-
pllcable goals for minority and female participation and which is set
forth in the solicitations from which this con~act resulted.
3. If the Contrac't:or is participating (pursuant to 41 CFR 60-4.5) in a
Hometo~_Plan approved by ~~e O. S. Department of Labor in the covered
area ei ther individually or through an association , its affirma ti veaction
obligations on all work in the Plan area (including goals and timetables)
shall be in accordance with that Plan for those t.=ades .hich have unions
par~cipa=ing in the Plan. Contrac't:ors mus't: be able to demonstrate their
par't:icipation in and compliance wi~~ the provisions of any such Horn~own
?lan. Each Contrac't:or or Subcontractor par't:icipating in an approved Plan
is individually required to comply wi t:.h its obligations u."lder .the E:EO
clause, and to make a good fai~~ e"ffor't to achieve each goal uncer the
Plan in each trade in which it has employees. The overall good faith
perfo~nce by o~~er Contractors or Subcontrac't:ors toward a goal in an
approved Plan does no't: excuse any covered Contrac't:or's or Subcontrac't:or's
failure to take good faith efforts to achieve ~~e ?lan goals and time-
cable.
4. The Contractor shall implement the specific affirmative action standarcs
provided in paragraphs Ja through p of these specifications. The goals
set for't:hin the solicitation from which this contract resul~ed are
expressed as percentages of the total hours of employment and training
of minori~ and female ~tilization the Con~actor should reasonabiy be
able to achieve in each const--uction trade in-vnich "it has employees in
~e covered area. The Con~actor is expected to make subs~~ially
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 ~~ion with whom ~'e Cont=actor has a collective bargaining
agreement, to refer either minorities or women shall excuse the Cont.=ac-
tor's obligatior~ under these specifica't:ions, Executive Order 11246, or
the regulations promulgated pursuant thereto.
F-4
6~. ....... o:cc= f== :..:-~e :--.c;.-..'C=I....:.~1 ':=a':";~':"'.l; :l;:'~S C-.. Grr....;...---~~ .-...- -----.---
t..O be cOI.1."'lt.ed in meet" .t.:le goa.ls, such aFprentices ~.,., -=-=ainees must,
be employed by the 1:=1 ~ctcr cu.rinq t."le training pe~il' and the
Contractor must have .ade a commitment to eJnploy the atF::entices and
trainees at the completion of their training, subjec't to the availabil-
ity of employment opportunities. - Trainees ~ust be trained pursuant to
training programs dpproved by the U. S. Depar~ent of Labor.
7. 'r.1e Contractor shall take specific affirmative actions to ensure equal
employment opportl.1.~ity. ~e evaluation of the Contractor's compliance
....ith these si-,ecifications. shall be based upon its effort to achieve
max..iJnum resul ts from its actions. The Contractor shall documen t these
efforts fully, and shall implement affirmative action steps at least as
extensive as the following:
a. Ensure and maintain a ....orking environment free of harrassment,
intimidation, and coercion at all sites, and in all facilities at
....hich the Contractor's employees are assigned to ....ork. The
Con tractor, .....here possible, ....ill assign cwo or more.....omen to each
constrUction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are awa=e of a.nd carry out the Contractor's obligation to maintain
such a .....orking environment, ....ith specific attention to minority or
female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minori ty and female
recrui cnent sources, provide .....ri tten notification to minority and
f~~le recruitment sources and to community organizations ....hen the
Contractor or its unions have employment opportunities available,
and maintain a record of ~"le organizations' response~.
c. Maintain a current file of the names, addresses and telephone
numbers of each minority and female off-the-street applicant and
minori~ or female referral from a union, a rec~i~ent source or
community organization and of what 'action ....as taken ....i~"l respect
to each such individual. If such individual ....as sent to t."le union
hiring hall for referral and ....as not referred back to t.,e Contractor
by t.,e union or, if referred, not employed by the Contractor, t.~s
shall be documented in the file ~ith the reason therefor, along ....ith
~hatever additional actions the Contractor may have taken.
"
d. Provide immediate ....ritten notification to the Director when the
union or unions ~it."l ~hich the Contractor has a collective
bargaining ag=eement has not referred to the Contractor a minority
person or ~oman sent by the Contractor, or ....hen the Contractor has
other information that the union referral process has i.t:lpeded ~e
Con~actor'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 em?19yment needs,
especially those programs funded or approved by the Depa=tment 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 t.~eir coopera-
tion in assisting the Contractor in ~eeting its EEO obligations: by
including it in any policy ~~nual and collective bargaining agreement; by
F-5
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I
publicizing it in the cOmpAny newspaper, ~r~u~l report, etc.; by
specific review of the policy with ~ll management personnel and
..-i th all m.inori ty and fe.maleemployees d t leas t once a yea.r; and
by posting the company EEO policy on bulletin boards accessible
tD ~ll employees at each location where const~ruction work is
performed.
g. Review, at least annually, the company's EEO policy and affi~.ative
action obligations under these specifications wi~~ all employees
having any responsibility for hiring, assignment, layoff, termina-
tion or o~~er employment decisions including specific review of
these items wid. onsite supervisory personnel such as Superintendents,
General Foremen, et~., prior~to ~~e initiation of constrUction work
at any job siee. A written record shall be made and maintained
ide~tifying the time and place of these meetings, persons attending,
subject D~tter discussed, and disposition of ~'e 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
tD and dis.:ussinq the Contractor's 0:0 policy ....i th other Contrac-
t.qrs and Subcontractors ....ith ....hom .the Contractor does or antici-
pates doing business.
i. Direct its recrui t:ment efforts, bo th oral and -.r.:i tten, to minori t:y ,
.female and coll'tlllunity organizations, to schools ....ith minority anc
~emale students and to minority and feIl'.ale recrui~ent anc training
organizations serving the Contractor's recruicment area and employ-
ment needs~ Not later than one month prior to ~~e date for the
ac=ep~ce of applicatio~~ for apprenticeship or other training
by any recruitment source, the Contractor shall send ....ritten
notification to organizations such as the above describing ~~e
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, ~here reasonable, provide after
school, summer and vacation emolovment to minority and f~~le youth
both on the si~e'and in other ~e~s of a Con~ac~or's ....orkforce.
...
'k. Valida~e all tes':S and oeber selection re~irements ....here L'l-Je..re
is an obligation to do so ~~der.41 CTR 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, ~~ough
ap?ropriate ~aining, etc., such oppor~~ities
m. E~u=e that seniority practices, job classifications, ....ork assign-
ments and o~~er personnel practices, do not have a discr~~atory
effect by continually monitoring all personnel and em?loymen~
related activities to ensure that the EZO policy Zond the Contractor's
F-6
obligations unclel these specifications are being I-.:ied 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 tD assure
privacy bet'Ween the sexes.
o. Document and maintAin a record of all solicitations of o!:ers
for subcontracts from minority and female const--Uction
contractors and suppliers, including circulation of solicitations
to minori t:y and female contracwr associa tions and other business
associa t.ions .
p. Conduct a review, at least annually, of all supervisors' adherence
to and performance under the Contracwr's EEe policies and
affirmative action Obligations.
8. Contracwrs 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 contrac-.:.cr-union, contractor-community, or other si.Jnila..= CJ='Oup
of which the <;:ontractor is a member and pa..:rticipant, ::laY be asserted
as fulfilling anyone or more of its obligations under 7a through P
of these Specifications provided that the contractor actively partic-
ipates ~n the group, makes every effort to assure that the group has
a positive impact on the employment of minorities and wocen in the
indust-J" ensures that the concrete benefits of the program are
reflected in the Contractor's minority and f~le 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 t.a.ken on behalf of the Contractor. The'
obligation to comply, however, i~ the Contrac-.:.o:c's and failure of such
a group to fulfill an obligation shall not be a defense for the
Contrac~or's noncompliance.
9. A single goal for ~~norities and a separate single goal for women have
been established. The Contractor, however, is required to provide
equal emp~oyment oppcr~unity and to take a=fi~tive action for all
minorit:y groups, both male and f~.3.le, and all ....omen, bow tninori'=i'
and non-minority. Consequently, ~~e Contractor may be in violation
of the E.xecuti ve Order if a particular group is employed in a subS'tan-
tially disparate manner (for example, even though the Con'tractor has
achieved its goals for ....omen generally, the Contrac~or ~y be in
violation of the Executive Order if a specific minority group 0; women
is underutilized).
10_ The Contrac'tor 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 Cont=actor shall not enter into any Subcontract wi~~ any person
or fir:n debarred from Goverronent cont:acts pursuant to Executive
Ord~r 11246.
F-7
12.
The Con:o:.e<or ,hi.. 'earry our ,ueh ,.nerion, and t ,1 de' for '
vio1acioc of chesespecificatior~ and of che Equa~Opportunity Clause,
-including suspension, termination and ~ancellation of existing s~-
concracCS as cay be imposed or ordered pursuant to Executive Order
11246, as amended, and its i~plementing regulations, by ~~e Office
of federal Contract compliance Programs. Any Contractor ~ho 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 ~~ese specifications,
shall implement specific affirmative action steps, at least as exten-
sive as those standards prescribed in paragraph 7 of ~~ese specifica-
tions, so as to achieve ll\AXi.Jnum results from i.ts efforts to ensure
equ~l employ'ment opportuni t:'{. If the Contractor fails to comply ~i th
the requirements of the Executive Order, the implementing regulations,
or these specifications, the Director shall proceed in accordance ~i~~
U crR 60-4.8.
14.
The Contractor shall designate a responsible official to ~nitor all
employment related activit:'{ to ensure that the company 0:0 policy is
being carried out, to submit reportS relating to t.he 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, cons ~~ction t:ade, un{on affiliation if Uly, employee
identification number when assigned, social security number, race,
sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer),
cates of changes in statuS, hours worked per ~eek in the indicated
trade, rate of pay, and locations at which the ~ork was performed.
Records shall be maintained in an easily ~~derstandable and retrievable
fo~; however, to t.he degree that existing records satisfy this
requirement, contractors shall not be required to ~aintain separate
records.
15.
Nothing herein provided shall be construed as a limitation upon the
application of other la~s which establish different standards of
compliance or upon the application of requirements for ~~e hiring of
local or other area residents (e.g., those under ~~e Public Works
Employment Act of 1977 and 'the Comm~~ity Development Slock Grant
Program) .
..
F-8
..
I
APPENDIX G
OM!
CircJ,11ar A-110
I
..
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:1
OF~CE OF MANAGEMENT AND
BUDGET
(Circular No. A-lID!
GRANTS AND AGREEMENTS WITH INSTI.
TUTlONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
JULY 1, 1976.
To the heads of cxecutive departments
and estl1blishments.
Subject: Uniform administrative re-
quirements for grants and ot.her agree-
ments with Instltut.lons of hi:her edu-
ca.tion, hospitals, and ot.her nonprofit.
organizations
1. Purposc.-This Circular' promul-
gates st.andards for obl.3.inlng conslst.cn-
cy o.nd Uniformity among Federal agen-
cies In the n.dministra.t.1on DC grants to,
a.nd other agreements with. pUblic and
priva.te Inst.1tutions of higher educat.lon.
public and priva.te hospitals. and other
quasi-public and private nonprofit or-
ganiza.tlons. This Circular does not apply
t.o gra.nts, cont.racts, or other agreements
,between the Federal Government and
units of State or local governments
covered by Federal Management Cir-
cular 74-7.
Z. EtJecti'/Je d4te.-The standards in
Uu attachments to this Circular will be
a.ppl1ed as soon a.s pra.cticable but not.
later than January 1. 1977.
3. Supersession.-This Circular res-
cinds and replaces parts m and rv oC
the APpendix to Federal Management.
Circular 73-7, Adml.n1stration oC college
and university research grants.
4. Policl/ intent.-The uniform stand-
ards and requirements included in' the
attachments to this Circular replace t.he
VlUj'ing and often conftlcting require-
ments tha.t have been imposed by Fed-
eral agencies as conditions oC grants and
other agreements with reciplen~. '.
5. Applicabilitv and scopc.-Except as
provided below. the standArds promul-
gated by this Circular are applicable to
IlJl FederaJ agencies. II any stat.ue ex-
pressb' preSCribes policies or specific re-
quirements tha.t dlfYer from the stand-
ards provided herein, the provisions oC
the statu te shall govern.
The prOvisiOns oC the at.tachments of
this Circular shall be applied to subre-
eipients performin~ substantive work
under gTan ts that are passed through or
awarded b)' the pr:tman' recipient i! such
subreciplents &re organizations de-
scribed In paragraph 1.
6. Defir.ition.s.
li.. The term "gra.nt" means mone)' or
property provided in lieu of money paid
0:' furnlshed by the Federal Government
to recipients under programs that pro-
vide financial a.ssistance or tha.t prOVide
support or stimula.tion to' accomplish a
public purpose. The term "other agree-
ments" does not include contract.s which
are required to De entered Into and ad-
ministered under procurement lav:s and
regula.tions, Grants and other agree-
ments exclude (a.) t.echnical a.ssista.nce
~;~~::ms. ~:hlch pro\'jdc services instead
general revenue sharing, 10:l.ns. low
gUR.rantees. or insurance, and (c) direct
lla~'T1lents oC any kind t.o Individuals,
D. The term "recipient." includes t.he
following types of nonprofit orltaniz.'l.-
t.ions t.hat are receiving Federal funds
from a Federal aaency or through R
St.at.c or local government:
Public and private Inst.1t.ut.ions of high-
er educat.ion: pUblic and private hos-
plt.als; and other quasi-public and pri-
vat.c nonprofit organizat.ions such as (but
not limited to) commlUlity ll.ction agen-
cies, research lnstlt.ut.cs. educat.ional as-
sociations, and healUl cent.ers.
The term does not Include foreign or
int.ernatJonal orgnnizations (such as
agenCies of the United Nat.ions) and
Go\'ernment.-owned contractor operat.ed
Cacilltles or research centers providing
continued support. for mission-oriented,
large seale programs thILt are Govern-
ment-owned or controlled. or are de-.
signed as federally-funded research and
development cent.ers.
7. Rcqu.cstslor c.%ccptionS.-The Omce
of Management. and Budget. may grant
exceptions from the requirements of t.his
Circular when exceptions are not pro-
hibited under exist.lng laws.
However, In thc interest of maximwn
uniformit.y, exceptions Crom the re-
quirements oI the Circular ~W be per-
mitted only In unusual CllSes. Agencies
may apply more restrictive requirements
to a class of recipients when apPT'O\'ed by
the Otlice oI Management. and Budget.
8. Atta.eh.menu.-The standards pro-
mulgated D)' this Circular a.re set forth
in the Attachments. which are:
Attachment ^ Cash"depos1torles.
Attachment B Bonding and Insuranee.
Attachment C R.et.entlon and custodial re-
qUlremen'l.$ for records.
At.t.a.chmeJU D PT~ Income.
Attachment E: CoS\. shMlng ILnd matcblng.
Attachment po Standards for financial m..D-
Ggement system.s.
Attachment G Financial report1ng require-
ments.
Attachment H Monitoring and report1ng
progrl'", performlLnce.
Att.ACbment I Payment requlr~ml!nts.
AttachmeDt J ReviSion or ftnanclal plans.
Atr.a.chmen.~ K Closeout procedures.
Att.lLChment L S,\lSpenaIOn and t.ermlnatlon
procedures.
At.tachment]l( Standard form for applrlng
for federal usJstance.
Attachment N Propert.y U1anq;ement stand-
ards.
Attachment 0 Procurement atandan1s.
9. E.%ception.s lor certain reciJ1ien.ts.-
Notwithstanding the provisions of para-
graph , if an applicant/recipient has a
history of poor performance. is DOt ft-
nancial13' stable, or It.s management sys-
tem does not meet the standards pre-
scribed in the Circular. Federal agencies
may impose additional requirements as
needed provided that such applicant/
recipient is notified In Wl"iting as to:
a. Why the additional st&ndards are
being imposed:
b. what corrective action is needed.
Copies of such notifications shall be
sent to the Oftlce of Management and
Budget. a.nd other agencies funding t.hat
rec:~~~~~ ~at L~c same time t.he recipient.
10, Rcsponsibilities.-^gencies rc~pon-
sible Cor administ.erlng programs Ulat in-
volve grants and othcr agrcements with
recipients shall issue t.he appropriaLe
regulat.lons necessary to Implement. the
provisions of this Circular. All portions
oC such regulnt.ions tha.t involve record-
keeping and/or reporting requirements
subject. to the proviSions 01 the Federal
Reports Act and OMB Clrculnr A-40
must. be submlt.ted to OMB for clearance
bcCore being introduced int.o use, Upon
request all regulations and instruct.ion:;
implemcnling this Circular sh:ill be
furnished t.o tIle Office oC Management
and Budget., Agencies shall o.lso desig-
naLe an official t.o serve as t.he agency
represenl.at.ive on ma.tt.ers relat.ing to the
'mplementa.tion oC this Circular. TI1C
name a.nd t.lt.le of such representative
shall b.e CUl'1lished t.o the Oroce of Man-
:l.gemcnt. and Budget not later than Au-
~ust 30. 1976.
11. Inquirics.-Il'urther informat.ion
concerning this Circular ma)' be obl.ained
Dr contract.ing the Financial ManaGe-
ment Bra.nch, Budget Review Division.
Office of Management and Budget,
Washington, D,C. 20503, telephonc 395-
3993.
Juu:s T. LYNN.
Director.
ATrACHMr.I'IT A.--CmcuLAll No. A-lID
CASII OD'OSIToau:a
1. This attachment sets forth standards
governing the use of banks and oLher In-
stlLutlons a.s depositories or fund., lLdvallced
under grants and other agreements. .
2. Except ror situations described In parA-
graphs 3, .. and 5. no Federal ~ponsorlng
&fency sh&1l:
&. Require physical sesrcgatlon or cnsh de-
positories for funds whiCh are prOvided to a
reclpleDlt.
b. Establish any eligibility rcqulr.ements
for cash dcposltorlr$ for funds ,,'hlch are pro-
vided to a recipient. '.
3. A. separa'~ bank ar.count shall be require
",'heD applicable Ictt.er-of-credlt agreements
provide that drawdo""n~ 10111\ be mc.de ,,'hen
the reelplent's checks ue present.ed to the
bank for payment.
{. Any moneys adVllllced to a recipient
....hlch are SUb)e,,' \.0 tht contr~1... or rc(l:ula-
'.Ion (If the Unltcd States or any of Its otflcers,
rgents or employecs' (publle moneys .:s de-
aned In Treasurr Clrculac No. 1:76, as
amended) mU5t be deposited In a ban.k with
Federal Deposit lnaurance Corporation
(FDIC) Insurance coverage and the halan<<
exceeding the FDIC cover.age must De eol-
lat.eraJly secured.
S. Conslatent ,,'Ith the national goal of
expanding the opport\lnltlcs for InlnorlLr
business ent.erprlses. recipients and 1'\1'0-
recipients shall be encouraged .\.0 use minor-
Ity banks (a bank ....hlch Is o....ned at least 50
pcreent 'or DUnorltr group member!').
ATrACHMJ:I'IT B.--CIllCtlLAIt No. A-lID
1I0l'l0'I'IG AI'IO 'I'ISUllAI'ICJ:
:. This attachment sel.S forth bonding Gnd
Insurance requirements for grants and other
ail'eements "'1th reclplcnl.S. No other bond-
Ing and Insuranee requlremen,\'s shall be Im-
posed other thaD those normally requlre(1 by
the reelplent.
2. E:xeept 8.lI other....lse required by la",'. a
grant or other agreement that requireI' the
contracting (or subcontraeun\:) for eon-
~truC'tlon or facility lmf'ro\'ementl< shl'n pro-
I _. . '- _ _ ~ _ ,_ - _' . - '.' ~ ~ _, I... ,',..'.. ...._
I
Office of Management and Budget Circular A-110 (7/30/76)
qukemenUl rel...tlng to bid gu...unteea, per-
l<<maDC. bOnc1.l, r.nd payment bOnc1a unl_
tbe conatructlon contr&Ct or subeon1Zact es-
c:ee4a 6100,000. Tor those conlU'act.a or eub-
CODCra.c:t.a exceeding 1100,000. Ule Federal
aceDer EIlAY accepC tn. bonding polley and
requlr.men t.a ot Cbe I"an tee provided. Cbe
FeeSen.1 ...gency hy made' a determination
Ula~ Lbe GoverlUllent'e Interest Ia adequately
proteCted. It auch a determlnatlOn hy not
been m&4e. the minimum requlremenla ehall
be ... lollowa :
..,l tri4 VUGTIIn.tee trOTn ea.cll buuur equlll-
&lent to flue "ercen.t ot tile bid priCe.-
The "bid. gUl\ral1ltee" 6h...1I conslat ot ... l1nn
commitment euch a.s a bid bond, cert.l1led
dleclt. or other negotl...ble Inet.nunent l\C-
companying & bid... aasur&nce tb...C the bId-
der will. upon ...cceptance ot hla bid. execute
euch c:ontr&ctua.1 documenla y may be re-
quired wIthin tbe tUne epecl1le4.
b. A "ertonno.n,c;e bond on Ille "lIrt ot tile
COfttra.ctor tor ~ 00 percent ot tile COfttra.ct
pric:e.-A "performance bond" Is one encuted
III ccnnectlon with... contract to secure lul-
Maaent oC All the contractor'a obllgattona
\II1der auch con trl\Ct.
c. A l"Svment bond on the pllrt at the con-
rraetOl' tor 100 7'ef'Ccnt at the COftlra.ct
F1Ce.~ "payment bond" Ie one esecuteel In
connection wit.h & contract to ...aure pay-
D\CJlot as requlreel by law ot &11 pel'llOna eup-
plying labor r.nd materlr.1 In tbe esecut.lon ot
the work provleleel tor In t.be contract.
3. Where the Federal Government guuan-
_ or IDlIurea t.n.. repr.yment ot money
bonOweel by the recipient, the J"ecleral
..eney. at IIa ellacTetlon, may require &4e-
quate boncl.lng r.nd lDaur&DoCe If the bonc11.ll.4;
aDcl lDlIurance requll'emenla ot the rec:1plent
are not deemeel &4equat.e to prot.ec:t the In-
LereBt ot the J"ecleral Government..
4. The P'eo.enl eponaortng &Ceney may re-
quire ~equate l1del1ty bonel coverage where
U1e recipient hu no coverage anel the bonella
DMCeelltO protect the Go"emment'e Interest.
A. Where bOncla ue required In the altu&-
ttona deecrtbeel abon, the bOnc1.l ah&11 be ob-
I&Uleel lrom compa.nICCl holding cenll1catee oC
authority &a acceptable aurettes (31 cn
223).
AnACJua:NT C.~mcv1.\& No. A-110
arnDrTIOJl' AN1l CUSTODIAL ~UDSJoCZJfT8 roa
U:COIUIS
1. 'Ibis lLttachment seta forth rccorc1 ret.en-
tion requ.lrementa for gra.nts &.nd other &!>Tee-
menta with rectplenla. FedeBI apolJ8OrUlg
age=ICCI .ball not Impose &ny recol"ll reun-
t10Jl requnmenta upon rectplenla other thr.n
thON desa1becl below.
2. Zsc:eltl tor paragT'&ph I. thla attachment
alao applies to subredplenUl u reterreel to
III paral"aph A oC the bulC clrculaz.
3. P'lDanclAl recorcla, support.lng documenta
statlsttca.l recorda. anelAlI other rec:orcla pertl~
nent to all ..,...emen t &bAIl be retained for a
pertod of three ye&nl, with the rolloW\11I
quall~c:atloDll :
"- It a.nylltlgatlon. claim or auellt 18 atartecl
before the e:ql1ratlon oC the 3-year perlocl the
nlCOrc18 &hAIl be re~lDeel unt.1I ...11 litigations
eJatma. or audit l1nd1np lD"OI"lng th..recor~
Da"e been l"eIIOl"ecl.
b. Rec:ol"lla for nonexpend&ble property &C-
~Ulrecl With Peden.! funds &hall be reCalneel
or:l ye...... &Her 11.0 anal dlapoeltlOn.
t&1c~~en rN'.orcla are tI"aAIfen-ed to or mAln-
3-" by the Feeler&l 8))01l801'1111; agency, the
bl' ear retention requlrernent 18 not I'oppllc:a-
e to the recipient,
~. 'Ibe retention perlocl et&."W Crom the
:--t.e ot the sublJUBalon oC the anal Ul)eDd1-
mU:: report or, for gT'IUlts aJ2d other ~-
d ta U1at are reneweel &%lnuAlly. Irom the
.. atoe or the lIubmlsalon of the a.nnuAl
.:.n~el...1 .t.atUII reopor1:.
5. Recipient organlZ&tlona should be &U-
UIorlZecl Dy the P'eeSeral sponaorlng ..gency,
IC U1ey so c1eslre, to substitute microfilm
copies In lieu or Orlf'tnal recorda.
8, The J"ecleral aponsorlAi ~ency &h&1I re-
quest tral1lller ot certain records to Ita CUll-
tocIy lrom reclpleDt. orgr.nlr.atIOI18 when It.
detenntnee that the recorc1.l po8CI_ long-
term retention .alue. Kowe"er. In order to
avoid elupllc:ate record-keeping. & Peeleral
sponsoring &Cency m&y malte urangementa
W1U1 recelplent organlZ&tlona to ret&1D &I1Y
recorda that &TC continuously neecleeS tor
JoInt use.
7. The he&d oC the f'eclerAl sponsoring &len-
e)' r.nd the ComptrOller Oener&' ot Lbe United
St.&tll8, or &ny ot their duly &uthort:r.ed repre-
eent.&ttyee. ehall have &Cc_ to &l\Y pertinent
boOks, elocumenla. papera. &J:Id rec:orcla of the
recipient org&n1Z&tlon &I1d their aubre-
Clplenl.ll to malte audlla. esamlnlLtloM, ex-
cerpts &l\d tranllCt'lpla,
8. Onicsa oUlerwlaC requlreel by I&w, DO
Federr.1 eponaorlng &gency ...':IAlI pl&ce re-
strlctlona on recipient organlZatlona U1at will
Ilmlt public see_ to .the reeorc18 of recipient
orgr.nlZ&ttona tbat are pertinent to ... gra.nt
or r.creement esce~ wben the &Cency can
demol1lltrate that such recorda must llc kept
contldentlAl a.nd would hue lleeIJ excepted
from dlaClosure pUl1lWlont to.the J"reeclom oC
Information Act Iii O.5.C. lili2) I.t the recorc18
ha.d belongeel to th e Fed err.! 8))OIJ8Ortn g
&Ceney.
ATrACHMJ:JfT D,~zaCVLU No. A-110
...OCUJoI[ IJfCOw:&
1. Feelera.l 8))01J8Or1ng. .....nCSee &hall apply
the al&D4anss aet forth In thla attachment ID
reqwrlng recipient orpn1ZatlOI1ll to account
Cor program Inoom. related to pro,ects
l1na.Dceel In wbole or In part. with Feeleral
h&Dds. Progn.m Income repr_ta gJ'ClCIII In.
come earned by the recipIent from the teel-
erally supported acuvltles. Such earnlnp eJ:-
clude Interest eameel on &4"a.nces &J:Iel may
Incluele. but wUI DOt be Ilm.Ited to. Income
trom service lees, eAle or commo4ttl... ua&lfe
or rental C_, a.nel royAltlee on pat.en.U a.nd
coprlghU.
2. lDter..t earned on a.dva.nces or ~eral
tunds &ball be remitted to the Federal &Ceney
except tor Int..erest. earuecl on &4TaDOCCI to
St&Lee or InatnuDal1.tAlltlOCl ot . State aa p~
"lcleel tly the Intet"gO"erumental C~tlol1
Act oC 1958 (P'ubllc lAw 90-677).
3. l"r'oce<<l8 from the &ale of ~ s.nd per-
eClnAl property either proVldeel by the Peel-
eral OovernmeDt or purch&aed l.U whole or In
part W1tb P'ec:1erAl lunda. ahall l)e haJ2elleel l.U
accol"ll&Dce W\th A\t.acbment ~ to thla elr-
culaz pertaLI1lng to property ~em.nt.
-L 0111_ Lbe acreement pro"ldes other-
wlac, redplClDta sball baye DO obllCatton to
the Peclera1 OonmmeDt with rCClpect to
royalt1CC1 recelyeel ... a reault oC copyrlghta or
P&t.eDta proc1uced. uneler Lbe l"&At or other
acreemeDt (see p~ph 8. AttachmeDt N).
6. All other program Income earneel dunl1l
the project penocl &ball be retlJl1eel by the
reclpleDt a.nd" ID accordL"\ce with the gTant
or other r.creement, ahAlI be:
... A4decl to Cunc1.l COmmltted to the pro,-
eet by the J"eclera.l sponsoring agency &Dd
rec.\plent O~DlZ&tlOn aIId be WIed to further
eUglble pr'Ol;Tam obJectl".:
b. O.eel to ~nance U1e nOD-Federal &baTe
oC U1e project when appronc1 by the Fecleral
8))OI18Ortl1l ageDcy: or
c. Oecluctecl from the total project casta
In determining the net COSIa on which the
~eN &bare oC _t.a wUI be baaecl.
AnACBXJ:MT. :r:.~DLcm.u. ~o. A-IIO
coaT SJU.aDfC AND WAT'CKO<O
1. 'I'bla attachmeDt acu forth erlt.erta &nd
procecluree f01' the allo.......bUl~ o~ ~.JV.h n"ct
I
A-110:2
In-kind conLrlbutlona made by reelplenl.5 or
5ubreclplenl.5 (a.s rderreel \.0 In p&r&S'Z'&ph 5
of the bulc clrculu), or tblrd p&rtles In 8&t-
I&fylng COCIt ebarlng lLDd EIlAtchlng requlre-
menu oC Federal eponsorIDg agencSe&. 'I'bll
&ttacbment also est&bllabu criteria for the
.v&luat.lon ot In-kind contrlDutlol1ll made by
tblrd parties, and aupplements the guidance
act torth In f'ederal M&D&gement Circular
73-3 wlllh rCClpect to cost Ibazlng on leeler.
&lly-eponsore4 reseucb,
2. The following del1nltlona r.pply tor t.he
purpose of tbl8 attachment:
a. Project C081,,-Pro,ect ooat.a &re &11 &l-
lo_ble COllIa I u eeL tortb In the applicable
Federal COllt prlnClplee) Incurred by .. recipi-
ent &nd tbe vr.lue oC t.he In-IUnd contrlbu-
tlol1.ll made by U1e reclplenL or l.hlrd partlee
In accompllablng the obJectlv.. ot tbe granL
or other &greement during tbe pro,ect or pro-
gram perlocl.
b. co,e ,/Lo.rlng Clnd tn41chlng.-In general.
cost ah&r1ng &nd m&1oChlng represent th&t
portion ot pro,ect or progn.m COSIa not borne
by tbe Federal Go"ernment.
c, Cull conlrlbuUon.s.~&&h cont.rtbutlcll1ll
represcnt tbe recipient's cub outlay. l.I1clud-
Ing tne outlay ot money contributed to the
recipient by Don-Feeleral thlrel pr..rtlee.
d. 1n.ktnd conlrfbutloou.-lD-klnel contrS-
butlona represcDt tb.e "...Iue ot noncaa.l1 con-
trlbutlona provldeel by U1e recipient r.nel
non-Peeleral th1rcl. pa.rtlea. Ot1.ly ....ben au-
llborlZecl by FeG~1 leglal&tlon,may property
purchueel with Fecieral CundA be COD.lllc1ereel
... the reclplent'a In.ldnd contrlbutlona. In-
kUld conU1butlclDll mal' De In the form ot
chugCCl tor real property aJ2el non-expand-
&ble personal property, &nd the "Alue or
gOOC1S and aerTlcea dlrecUy l)enel1tlng and
specl1lcally Iden tt4a.ble to the proJect or
program.
3. General guldeUnes tor computIng cost
&h&:'U\g or maccblng r..re &I 10Uo_:
&. Coat &hr..r1D( or ma1oCA1Dg may coD.lll8t.
oC: .
(1) Charges Incurrecl by the recipient u
pro,ect COlIt&. (Not all charges require ca&b
outla)'1l by the recipient dW'U1g 1lbe project
perlocl: examples azoe depreciation a.nd uae
charges Cor buUd1J1p a.nd equ.lpment.)
(2) l"r'olect COlIts 11na.Dcec1 'W'1th c:aab con-
tributed or donated to the recipient. by other
DOn-Pec:leral pubUc .....ncle8 a.nel IDaUtutlol1ll.
and prl"at& orpnlZatlol1ll aJ2el IndITIc1u&l4,
and
(3) l"r'oJect casta represcnted by .."Ices
&ncl. reaJ &Del penonal properC)', or UM there-
0(, donated by other DOD-Peeleral public
&ceneJ.. r.nd IDlItttutlol1ll. 4Lnd prllrate 01"1'&-
nlZ&tlOI1ll a.nellnd1'1"lclua1a. 'I
b. All conU1buttonr., both c:aab &nd "1n-
ltlncl &ball be accepted .. part 01 the reclpl-
ent'l cast ehartDg anel matching wben .uch
c:ontrlbutloDII meet. all 01 the ColloWUlg
crt terla :
(1) An ...l1Aable trom the reC1pl.nt'.
recorda; .
(2) An not lncludeel ... coe trlbu t1oD.ll tor
aDY other Ceelera1ly.....lated progn=:
(3) An n-=-ry and r_nable lor prop-
er &nd emclent accompU&bment oC pro,eet
ob,ectl"ea;
(4) An t",.. or cbr..rga tbat would be al-
lowable under the applicable cost pr1DClples:
(A) An not paid by the Pec1eral Go"""I1-
ment under another ...Istance JLCT"'CZDIlnt
(unless the r.creement 18 aU'thorlZecl by l"'ecl-
err.IIa'" to be UMC110r cost ahArlng or match-
Ing):
(8) An pro'l'1ele4 for Ie the &ppro"~ budg-
et wbeD reqUlrecl by the Pederal agency: &Dd
(7) Conlorm t.o other proT1810na ot thl.Cl
&tLAChment.
~. Valu_ Cor rec:lple!Jt Ul-klnd contr1bu-
tlona ...UI be ...t&bllsbecl ID accorda.nce with
tbe &ppllcable coet r,r1DClples. .
:I. S~l1lc proceclu"'" lor the rec:lplenU In
f""'Il!..t\~ll..hlru.' th.. T'r..J"~ l""lf 1T'1..t'h'H"! l"'"'("':"':t~'ht1.
'I
Office of Management and Budget Circular A-110 (7/30/76)
tlons Irom non-Federn.1 third pa.rtles llre 5et
lorth below:
a. Va/l/ation 01 PO/II n terr .'rrt'iccs.-\'olun-
teer servlres moy be lurl1l~hed by prolesslonal
and technlcnl personnel, consultants. nnd
other skilled l\nd unsktlled lobor. Volunteer
se,,'lces may be counted ns cost "hnrlll!; or
matchlns I! the sen'lce I" nl\. Integrnl nnd
neceuary pnrt or on oppro\'ed prol:rl\m.
(I) nllt('~ lor 1>olllnlCcr serviccs.-R.'\l.es lor
volunteeMl sllould be consistent with I.llo...e
pnld lor slmllor work In Ihe reclpicnt's
orSl\nlr_'\tlon. In t1lo...e Instl\nces In ,,'hICI1 the
requIred skills I\re nol. lound In lIlf' recipient
oq;nnl7.ntlon. rates "hould bc consl~lent with
thosl' pold lor similar work In the labor mor-
ket In which the recIpient competes ror the
kind. 01 "ervlces In\'olved.
(2) Volunteers <:mplnyed by ot/ler orga"l-
o:olions.-When nn employer other thnn the
recipient rurnlshes the servIces 01 an em-
ployee, these services shnll pc vl\lued at the
employee's resulnr rnte or pa)' lexcl\lsl\'e of
rrlnse benefits I\nd overhel\d costs} provided
these servIces nre In the same sktll for which
the employee Is norml\lIy pl\ld.
b. VaLuation 01 donated, c:r71cndablc pcr-
sonal propcrty.-Donated. expendl\ble per-
sonl\1 property Ineludes such Items as ex-
pendnble eqUIpment, office supplies. labora-
tory. supplies or workshop and cll\55room
supplies. Value assessed to expendable per-
sonal property Included In the cost or match-
Ins. share should be reasonable nnd should
not exceed themlU'ket vRJue or the property
at the time of t.he donation.
c. ValUAtion 01 dOTl.4ted, nonC:%pCnd4blc:
per.ranal property, buildings, and lAnd or
use th.ereol,
(1) The method used for charglllS cost
sharIng or matchIng for donated nonex-
pend able personal propert.y, bulldlnss and
land may durer according to the purpose of
the grant or other I\greement &II !ollows:
(a) It the purpose of the grant or other
agreement Is to assist the reCipIent In the
acquisition of equipment. bulldlnss or lnnd.
the totRJ value of t.he donated propertr ma}'
be cl..lmed a.s cost sharing or matching.
(b) It the purpose of the asreement Is to
support llctlvltles thnt reqUire the use of
eqUipment.. buildings or land, depreciation
or use charses lor equipment and buildings
may be made. The full value of equloment or
ot.her capital nssel.s lInd fAir rent.~1 charges
for land may be allowed prOVided t.hat t.he
Federal asenc)' has llpproved the chsrges.
(2) The vlllue 01 donllted property will be
determined In accordance ",'Ith t.he usual
accountlns policies of the recipient with the
follOWing quallftcatlons:
(a) L.llnd llnd buildings.-The value of
donated land and buildings mn!, not, exceed
Its lair marKet value. at. the time of donation
1.0 t.he recipient AS estAbllsheCl b,. I\n Inde-
pendent appl'DISer (e.g.. eertlfted' real prop-
erty appraiser or GSA repre:ent.atlvea) !Lnd
certified by a responsible official of the
recipient..
(b) None:pcnd4ble pcrsort.41 P'f'o-perly.-
The value of donated nonexpend:l.ble personal
propert). shnll not. exceed t.he lair market
value of equipment nnd property or the same
Ilse and condition I\t the time of donation.
(C) Use 01 spcce.-The value of donated
space shall not exceed Lhe fall' rent.'\l ,'all:e
of comparnble space a., cstAbll~hed by an
Independent llppralsal or componble space
and rncllltles In n prl\'ately-owned bulldlns
In the same 10Co'\lIt)':'
(d) L.oaned equipmenl.-TIle \'01 lie or
loaned equipment shall not exceed Its ralr
renl..'\l \'l\llIe.
6. The follo,,'lnl; requirements petl..'\ln to
the reclplent's supportlns reco:-ds tor In-
kind contrlbllllons trom non-Fedrrl\1 third
!'l~;t.tn~
a. "ohmlcer Sf'f\'IC'r.s mllst bf' c1nc:llmentecl
and. to the extent rCMihle. "ul'ported by I.he
sOllie methods \lsed by Lhe recipient ror Its
employees.
b. The basis lor determining the \'alllnthlll
ror personal ser\'ICeS, malerlal, equipment,
bulldlllSS and land must be documenL"d.
AT'I'ACIIMCNT F.-ClllCUl.Aa No. A-liD
STANDARDS roo rlNANClAL MANACEMENT
STSTENS
\. TIlls attochment pre5Crlbes stAndnrds lor
financial 1I\I\nngement systems nf recipients.
F'edernl ~ponSOrln!; a!;enclC!' shl\ll not Impose
additiOnal standards on reclpienL" unless spe-
ClficlllI)' pro\'lded ror In the I\ppllcable. "Ul-
tutes (e.s.. the Joint Pundln!; SlmpllflcnLlon
Act. P.t.. 93-SI0) or other nLtAchmenls t.o this
clrculRr. Howe\'er, Federal sponsorlns ol:en-
Cles arc encournsed to ml\ke suggestions nnd
Mslst recipients In eltbllllshlns or Improvlns
finl\nclal Illanr,sement systems when such as-
slS\.llnCfl Is needed or requested.
2. Reelplenl.,' tinnncllll mAnasement s)'s-
tems shall provide lor:
a. Accurate. current llnd complete dlKlo-
sur. of the ftnanc1al resull.s or Cl\ch ledcrl\lIy
spon...ored project. or progrllm In I\ccordl\nce
with t.he reportIng requlremenl.s set lorth In
Attacl)ment G 1.0 this circular. When.. Fed-
eral sponsoring oseney requires reporting on
nn accrual ba.sls. the recipient shl\lI not be
required to estAblish an nccrulll accounting
s)'stem but shall develop such accrual dl\ta
ror Its reports on t.he bnsls or all llnalyJIls 01
the documentation on hand.
b. Reeords t.hat Ident.lly ndequatcly the
source and Rppllcat.lon o! lunds lor ledemll)-
sponsored activities. These records shall con-
tain Infonnatlon pertalnlns to Federal
awards, authorization:!. obligations. unobli-
gated balllnces, assets. outlnys. and Income.
c. Ellectlve ::ontrol over and nccountablllty
for all funds. property and other assets. Re-
clplenta shall adequatel)' safel;Uanl all suc:b
I\ssel.s and shall assure that they are used
solely for authorized purposes.
d. Compar\.son of act.ual outlays wlt.h bud-
~et amounts lor each Itf'&nt or other agree-
ment. Whenever approprIate or required by
the Federal sponsoring ...seney.. ftnanclal In-
formation should b, related to performance
and unit. cost data.
e. Procedures to mlnlml:ae t.he time elnp$lng
bet.""een the trnnsfer or lunds from the u.s.
Trea.sury and t.he disbursement by t.he recip-
Ient. ,,'henever funds are advanced b)' \.he
Fedef'31 Government. When advances Arc
mode by a let.ter-or-credlt. met.hod, the recip-
Ient shall make drawdowns a., close aa pos-
sible to t.he time 01 making disbursements.
r. Procedures for detennlnlng the reason-
I\blenesl. ..Jlowablllt)' and allocability of costs
In accordance with the provISIOns of t.he ap-
plicable Federal cost. prlnClplell And the I.erms
of t.he grant. or ot.her agreement..
S. ACl:oUntlng records t.hat. are supported
b}' source documentation.
h.Examlnntlons In the form of :ludlts or
Internal audits. Such audits shall be made
b)' quallfted Indl\'lduals who nre sufficiently
Independent of those who llut.hgrlze the ex-
penditure o! Fedel'31 lunds. to produce un-
biased opinions, conclusions or judsments.
The)' shall meet the Independence crlterlll
Rlons the JInes or Chapter 3. Part 3 of t.he
U.S. General Accountlns ornce publication,
SI..'\ndard~ ror AudIt of OovernmenUI Orl;on-
I~'\tions. Prol;rllms. Actl\'ltlCS llnd Functions.
TIles'! examlnntlons I\re Intended to a...cer-
taln the eIYectl\'encss or the nnllnclal m:\n-
:ll;ement s)'stems Rnd Lnternl\l proc.edures'
thllt have beell cs~'\bIL~hed to meet. the terms
and cC'ndltlons or the ogreemenL... It Is not
Intended thnt each :\I;reemenl. ""'l\rded 1.0 the
recIpIent be examIned. Genemll)'. exnmlnl\-
lion" should be conducted C',n an orr.nnl:>.n-
~'nn-',t.'~rl" ~'H\~~o::. tn ;~"::~ thr f!~r~l lnt"'r~lt.\. ('If
I
A-110:3
flllanrlnl I.ran"l\ctlon~. n.< ",'cll as compliance
wllh Lhe Lerlll~ and condltion~ or the I"edr.nl
,rllnls and oLher ll!;reCmellts. Such le~lS
would include Iln approprlllte samplln!; 01
Fpderlll l\!1reemenls. Examlllatlon~ ,,'111 be
conducted wltll reasonllble rrequency, on II
contlnulns bkSls or I\t scheduled Inten'llls.
uS\lally I\nnually. but not le'!s rrequently thl\n
e\'ery two yel\rs. The frequency of these ex-
I\mllll\t1on~ sholl dcpend upon the nl\ture,
slr.c and the complexity 01 the I\ct\'lIty. TIle"e
exnmlnatlons do not relle\'e P'ederal nl:encles
or their audlL responsIbilities. but ml\Y I\crect
Lhe rrequency and scope 01 such nudlts.
\. A s)'stemntlc method to assure Llmely nnd
npproprlote resolution 01 audlL findlnl;s and
recommendations.
3. Primary recipients shl\ll requIre subre-
clplents (ILS denned In parl\s.rllph S or tht>
l>I\slc circular I to I\dopt the stl\ndl\rds In
parl\!;Taph 2. I\bove except lor the requIre-
ment In subpllragTl\ph 2e. regnrdlng the use'
01 Lhe letter-or-credlt meLhod I\nd Lhl\t pl\rt
01 .$1Ibpara!;rnph 21\, reSllrdlns reponing
rorma nnd Irequencles prescribed In Atl.l\Ch-
men-, G 1.0 this clrculnr.
ATTACHMENT G.-CIRCULAa No. A-IIO
rll'lAI'ICtAL I\goOl\~ REQtllal:MEI'ITS
1. This attAchment. prescribes uniform re-
portln!; procedures lor recipients to: sum-
marize expenditures mad.e Rnd Federl\l funds
unexpended lor each I\ward, report the sl.l\t.us
of Federal cL~h advanced, request ad\'llnces
and reimbursement when the letter-ot-credlt
me\.hod Is not used; tlnd promulgates sl.and-
I\rt! rorms Incident thereto.
2. The rollowlng definitions apply lor pur-
poses 01 this lltt..chment:
... Accrued c::pCn4iture~.-Accrued ex-
penditures Ilre t.he charges Incurred b)' t.he
recipient during II Slven period reqUiring \.he
provision 01 tunds tor: (1) goods I\nd ot.her
l.anslble property r~elve<l: (2) services per-
lormed by employees. contractors. subreclpl-
ents, nnd otber payees, and (3) other
Ilmounts becoming owed under programs for
which no current services or perlormance Is
requlre<l.
b. Accrued inc01!\e.-Accrued Income Is the
sum of (1) enrnlngs during a gl..-en period
lrom (I) serTlces.performe<l by the recipi-
ent: and (II) Sooc1s I\nd other tangIble
property dell vered 1.0 purchasers: and. (2)
amounts becomlns owed to the recipient lor
wh~h no current services or pertormance !S
required by t.he recipient.
c. Federal lurul.3 lluth.orized.-Federal
luncts authorized art tbe \DUll amount of
Federal Iunds obligated by tile Federl\l Gov-
ernment lor u~e by t.he recipient: This
..mount ma\' Include any authorlze<l eam-
o\'er o! unobllsnted lunds 1rom prior !\seal
~'ears ....hen permlt.ted b,. law or agency
regullltlon.
d. In-kind contribulion.s.-In-klnd con-
tributions are deOned In Atl.achment E to
till!: clrcula.r.
e. Obligation.s.-ObllgntIOns are t.he
amounts of orders placed, contrllCI.S and
grnnts a ""l\J'ded. servIces received. and slml-
Illr t.ransnctlons during a Slven period th"t
will require pnyment by the recipient during
the same or a ruture period.
r. ou"ays.-Out1:l~"5 or expenditures repre-
sent chnrgcs made to the project or progr"m.
They ml\~' be reported on l\ cash or accrul\l
bosls. For repor\.S prepa.red on a cash bllSls.
outll\Ys arc the sum of nCl.ual cnsh dlsburse-
menl... lor direct charscs lor soods I\nd ser\'-
Ices. ~lle amount or IndIrect expense chl\rse<1,
lhe \'alne or In-kind contributions npplled,
:lnd the amount 01 CASh "d\'ances Rnd pay-
menL.. ml\de l.tI subreclpienlS. For reporl.~ pre-
pnred on I\n I\ccrul\l baSIs, outlays are the
~lIm or I\ctunl cnsh disbursements ror direct
(;horJ!e~ rC'r ~n(ld.~ :>nd "er\'lce5. Lhe I\mount
("'If lnc1''!'"('''''~ f":v!,"n~r 1nr\JrTI'd. the .."nlu(" or tn-
I
Office of Management and Budget Circular A-110 (7/30/76)
kind contributIons applied. and the net In-
creue .(or decrease) In lhe ..mounu owed br
the recipIent lor i:oodll and other property
received. lor services perlormed b)' emplo)'-
ees. contractors, subreclplent.s and other
payees and other amount.s becoming owed
under programs lor ",hlch no current serv-
Ices or perlormance. Are required.
g. Program income.-Prosram Income Is
de.llned In Attachment D 01 tllls circular. It
Ina y be reported on a cuh or accrual bu\8.
whichever 15 used lor reporting outla)'S.
h. Unobligated balanee.-'Ibe unobligated
balance Is the portion ot the lundll suthor-
Iz;ed by the Feder..1 spon~rlng Agency that
ha.s not been obligated by the recipient and 15
determined by deductIng the cumulAtive
obllgAtlona trom tbe cumulative lundll aU-
tborlud.
1. Unltquldated obllgatlO7U.-Tor report.s
prepared on a cuh' b...,ls, unliquIdated obli-
gations represent the'6mount ot obligations
Incurred by the recipient thAt hu not been
paId. Tor report.s prepared on an Accrued u-
pendlture b&ll5, . they represent the amount
ot obligatiON Incurred by the recipIent tor
whlcb an outlay hu not been recorded.
3. Only the 101l0"'lng torms will be au-
thorlz;ed tor obtainIng !lnanelal Intormatlon
trom reclplent.s.
a. FI7I4neial Statu..! Report (!:::h.lblt t). .
(1) Ea.ch l"ederal spoNorlng ~ency shall
require recipients to use the standardIzed
FInAncIal St&tuS'Report to report the status
or tundll lor all nonconatructlon proJect.s or
progn.ms. 'Ibe FedenLl sponaorlng agencIes.
may, lSo",ever. have the option ot not re-
quiring the Financial Status Report when
the Request lor Advance or RelmbW'Mment
(panLCJ'&ph 4a) or Report ot Federal Cuh
TranaactloDll (panLCJ'&ph 3b) 15 determined
to provIde adequate IntormaUon to Ineet
their needs. eltcept that a tlnal Financial
Status Report shall be required at the com-
pletion. ot the project when the Request lor
Advance or Reimbursement torm Ia used only
tor advances.
(2) ne Federal sponaorlng Agency shall
prescrIbe ",hether the report shall be on a
c&lb or accrual basla. It the Federal sponsor-
Ing agency requIres accrual Inlorlnatlon and
tlle recipIent's accountIng recorda are not
normally kept on the accrual b&lla, Ule r~
clplent shall not be reqUIred to convert Its
accounting system. but shall develop such
Accrual Inlormatlon throuShbest estimates
based on an analysla at the eocumentatlon
on hand.
(3) 'Ibe Federal sponsoring agency shall
detcrmlne the trequencv ot the Fine.ncle.1
Status Report lor each 'proJect or progre.m
conalderlng the size e.nd complexlt). or the
partlcule.r project or progn.m. Howe..er, the
report shall not be required more trequently
the.n quarterly or I~ trequently than an-
nue.lly except as prO"lded In subparagn.ph
3a( I) e.bo"e. A tlnal report shall be required
at the completlon at the agreement.
(4) Federal sponsoring ~encl'" shall re-
qUIre recipients to submit the FinanCIal
..
Status Ref>Ort lorlglnal And no more than
two Cllples) no later than 30 days aaer the
end ot each speclned reporting period tor
quarterly and semi-annual reporu, and 90
days tor annual and tlnal reports. Extensions
to reporting due dates mal' be granted upon
request ot the recipient.
b. Report 01 Fedcro.l ClUh Tro.,uaetions
(EZhibit 2).
(I) When tunds are advanced to
reclplenta through let~ers or credit or with
Trea.sury checks. the Federal sponsoring
agencies shall require each recipIent to !lub.
mlt A Report ot Pederal Cash Tran~Uons.
'Ibe Pederal spclIuorlng ..gency sho.lI u.e this
report to monitor cuh advanced t.o recipients
"nd t.o obtain dIsbursement .Inlormatlon tor
e~h asreement trom the reclplenl.s.
(2) Tederal sJ'lOnsorlng agencies may re-
quire toreCULa ot Federal c....h requirements
In the "Reme.rks" .ectlon or the report.
(3) When practical and deemed necessar1',
the Tederal sporuorlng agencIes may requIre
recelpt.s to report In the "RemarKs" ~ectlon
the ..mount ot cash a.dvancCll In exceu of
three days' requirements In the handa ot sub-
recipients and to provide short ne.rre.tlve ex-
plano.'.lons 01 e.etlons taken by the reclplenU
to reduce the eltceSJ bAlances.
(4) Reclplenl.s shall be reqUired to submIt
not more than the original and twO copies ot
the Report ot Federal Cuh Transactlona 15
working da)'s following the end of each
quarter. The Federal spon.$orlng agencies
may require a monthly report. from tnose
recipients receiVIng Ad..ano:es t.otallng $1
mUlton or more per year.
(5) Tederal sponsoring agenel.., mal' wain
the requirement tor submUSlon ot the Report
ot !"ederal Cuh Transactions when monthly
e.dvances :10 not exceed $10.000 per rltclplent.
prevlded that suCh ad"ances e.re monltorltd
through other rorms contaIned In.~ls Ilt-
uChment. or It. In the Federal sponsoring
agency's opInion. the reCIpient's ~ccountlng
controls are adeque.te to minImIZe exceulve
Feder:1l ad"ances.
<l. Except &.S noted below. only the tollow-
!ng torma will be authorized ror tne reclpl-
ena In requ..,tlng advances e.nd reimburse-
ment.s.
a. Request lor Adl/ance or Reimbu,.temcnt
(!:::h.iblt J).
(1) Each l"eder~ sponSOring agency shall
adopt the Request tor Ad"ance or ReImburse-
ment as a standanllzed torm tor &11 noncon-
sl:uctlon progrr.nu when letters-ol-credlt or
predetermIned e.dvance methods are not used.
Feder&! sponsoring e.gencles. however. have
the option ot usIng this torm ror construc-
tIon prograrru In lieu ot the Outlay Report
and Re=luest tor Reimbursement lor Con-
struction Programs (subparacraph <lb).
(2) RecIpIents shall be authorized to sub-
mIt requests tor &dvanees &nd reImburse-
ments at least monthly ",hen letters-ot-
credit are not us8<1. Peden.: sponsorIng
agencIes shall not require the submlalon 01
more than the originAl and two copIes 01 the
Requ..,t [or Ad..ance or Reimbursement.
I
A-110:4
b. Outlay rcport and rcquest jar rc.m-
burufTlcnt Jar construction program.. (&:r.
/lib.t 4).
( I) Ench Federal ~ponllOrln!: ..!:ency shall
adopt the OuUar Report and RequelIt tor Re-
Imbur$ement lor Construction I"rograms as
lhe lIt:lndardlz;ed tormat to be used tor re-
que5tlng reimbursement tor con5trucUon
programs. 'Ibe Feder~ sponsoring ..gencles
may. however, have the option ot substltut-
Ing the Request tor Advance or ReImburse-
ment Form (subparagraph 4A) when the
Federal agencIes determine that It prOVldell
Mlequat.e Intorrnntlon to meet their needs.
(2) Recipients snn.1I be authorIzed to sub.
mlt requests :or reimbursement at lellSt
monUll Y ,,'hen letters-ot -credit ..re not used.
Federal sponsoring agencIes ShAll not rcqulre
m(lre than the orlgln&1 and two copies ot the
OuUar Report and Request lor Reimburse-
ment tor ConstructIon Programs.
5. v,'hen the Federal spon.wrlng lLl1encles
need addItional Inlormatlon In using these
lorms or more lrequent rc:porl.$. the lollowlng
shall be observed:
. a. When Additional Intorme.tlon l.s nceded
l.O comply with Icglaln.tlve requirements,
P'ederal sponsoring a!:encles she.1l Issue In-
sl.rUctlons to require reclplcnts to submit
suCh Intormatlon under the "Remarks" sec-
tion 01 the report..'.
b. When necessary to meet specltlc pro-
!:um needs Federal sponsoring &gencles shall
submit the proposed report.lng requlremenu
to Lhe !"Inanclal M&n;'gement Branch, BUdget
RevIew DIvIsion. ornce ot Mane.ll:ement and
Budget tor approval prior to submISsion ot
the report.s lor clearanu under the pro-
"Islons ot OMB CIrcular No. 1.-40.
c. When & Federe.1 sponsoring ~enc}' has
detemllned that IL reclplent.s accountlng sys-
tem does not meet the St.&ndards for 1'1-
nanclsl Me.nagement contained In Attach-
ment T to this cIrcular. additional pertlncnt
Inlormatlon to rurther monItor granu and
other ~reements mA~' be obtained upon
,,'rltlen notIce to the recipient until such
time :105 the sY&lem Is brought up to stande.rd.
d. The Fedcral sponsoring agency. In ob-
tAining In[ormatlon a.s In paragraphs e.. b
And c above, mus' comply "'Ith report clear-
e.nce requtrementsot the omce or Manage-
ment and Budget Circular No. A-40, as re-
vIsed.
6. Federal sponsorIng &gencles he.ve the
option 01 shading out any line Item on any
report that IS unnecessary [or decfslon-me.k-
Ing purposes.
7: reder&1 sponsorIng agencle:: should ac-
ccpt the IdentIcal In[ormat~n from the re-
el!)lenU In machIne usable torm&t ~ com-
pllter prIntouts In \leu ot prescrIbed tormats.
8. Federal sponsorIng AgenclC3 may p'ro-
"Ide computer outputs to reclplenl.s when It
will expedIte or contribute to the accuracy
ot reporting.
9. Federal sponsortng agencies are author-
Ized to reproduce these torms. The torms tor
reproductIon purposes ClLn be obtained trom
the Ornce at Me.n3.gement e.nd Budget.
STATUS REPORT I. 'IDI"Al A.IHCY AHD OfWlAHIUnOHAllUWIHf TO WHICH ItCrowr " IUIMITTtD I. rlOr....l .....NT O~ ono.. ,O(""nl". 10MB Approvod I ,Ar.( 0'
FINANCIAL ..u..... "0. IIO-ROIBO I
(F"oUow ir,,'nu:tI'Orll on ,la, bnclrJ ~.C(S
AlClnl"' OH.lHIlA,nOH . "'..... .ood __,..." .....".... ,..111I4I1", "r c~.1 to l"'r\OYI~ IDl.Hn.u:...llOH HUMU. I. ReClnl", ACCOUNT HU"'.I O...DINllnl.... HU....III L 'Ut4L IIlr"OfI1' I J. IAII1
o YU 0 NO o CAIH o ACC_UAl
,. 'ROlrCT/OIlAHT "MOO ..... .....--..'-.. ,. nJ"ao COV.IlID I., l'H1, .r:ron
'liON ,N.-,'. .... ....', _I '0 .AI.,,-". ,..,. ....... '"0''' .",...11. .... ...,. to 1-"_.'. "_I'. ..e...
STATUS or n)Has
(0' (U (e' (d) (., m TOTH
PROGRAM 5 I fUNCTIONS I ACTIVIT IES ~ ("
'hi oull'y' prevloully ,"pol1oe! S S S $ $ $ $
Tolll oull.y, Ihll '.pol1 plllocl
(.,,,: r,OI,.m Incoml credit,
11,1 oull'YII"I, ,"port po,locI
fI.i.. ~ min." lin, <I I
lIel oulllyl 10 dot. I
(Line 0 pl.. lin, d' : .
till: No".red"~.llh"!' 0' aull.y.
Toll. 'NI"II,hl" 0' aull.)',
(fA". . ",,"u. lint IJ I
I I
Tol.1 unllquldaled obliB.lIonl
L..,: Uon.rod...',h... 0' unllquld.l.d
oblla.llon, ,hown on lint h
-
rlKt"r.1 shl,. 0' unllquldlted oblll.Uon. .'
Tot.1 (ed.,,'sh.n 0' outt'YI and
unllquid,ted obli..Uons
Toll' cumul.li"l .mount 0' r.d,nl 'undl
.ulholl..d .
UnobUI.lod b.lonCl 01 rod...I lund. SIGIIA TURE Of AUTHORIZED CERTIfYING D"TE REPORT
o 'AOYIIIO"..ll 0 '~mnIA"'IIUI U. CIIt""":'- flOM SUBMITTED
.. TYPE 0' RAil o .......l o ..no I cortlly 10 Ih. ~., 01 my knowtoda' .nd boo Of F1CIAl
(rln.. "X" in oppr.p,;.,/, 6..)
DUne' I c. 1"'[ I .. tOtAL AMOUNt I" tlDlAAl 'HAIll 1I00Ih.,lhl. upol1l. coruel .nd complol. .nd
"(HIl II. RAn Ih.1 .11 oull.yo .nd unllquld.tod obU,.lIon. TY/,(D OR PRINTED NMolE AND TItlE TELEPHONE (Art" ''''''.
..,... lot th, purpo... ..t 'orth In thl ,",d nu",lur a..d nhn_IOft)
:::':..~~::..~::::.~:~. n...._'...v ~......4 "...._, .. ...,....-... ,....,.. a. ,-4--' .~_rf.' .._.. k ......"'.... -".. documlnts.
.'AHOA_O '0.... III 0-1&.
l-'O' E XlflBIT ,
j
',..c,lb'" It, o"'c. ., ",."..__.n, and I..d..'
CIACULAII 110. A. \10
0
-
~
0
(1)
0
-
~
t\)
:J
t\)
to
(1)
3
(1)
:J
.....
Dl
:J
0-
-
m
c
a.
to
(1)
.....
()
..,
0
C
Dl
..,
)>
,
.....
.....
0
.........
~
........
(,J
0
........
~
en
--'
-"
)>
I
.....
.....
o
01
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, lCd, lOe. 109. 10i, 101. Ila, and 12 are self.explanatory,
specific instructions ter other items are as tollows:
,.- l:~I,."
4 En'.' the empo,.' ldentlncaUOft numbef .......... by
I". U.S. In'.....1 R_nu. SoMC. Of rlCC (Instltll"on)
code. If required by the Fed.,.t ,pan",,"'. ...ncy~
Thll spec. II rwMf"Y.d for an Iccount number or ot:h.,
iClenhtyinl numlMrt that may be aui,"" by 1t\e
recipient.
8 Ente, the month. day. .nd ".., of the be,inn",. and
endl", of 'ftis Pf"Dtect p..nod. rOt formula ,'In', th.t
.r. not ...,.,_ on . pro,ect tMab. 'hOW U'. ,unt
periocl.
10 Th. IlUt'DOM of vertical colllm," (.1 Ih_eft (f) I' 10
provide r.naftCi.1 a.,. tor .ICft pre,ram. tunC'Uon. .nd
actMly In Ih. buo.ft II aop_ DI' I"" f eo.,.. ,110ft.
sOfln. ...ney. 1I.,0011Ion.1 coIumnl a" _eo. u.. .,
m.ny ,ddlllono! lorml II """ell Ind IndlCal. .....
num_ In ....e. p_.d In upoet n",1: _r. th.
1"'.ls 01 .u p,o...ml. IllnctiOM 0' .ctivll... .......Id bo
.hown in column (,) of Ih. n", ...... for a,'HmonIS
pertalnln, 10 sevcr.1 CaI.iOC 01 FocI...1 Dam_lie
Assist,nCI PI'OfT''''' thl' eta not ,"ul.. . fu"""
functional Of actMty daslificaUon br..kdown. enter
und.' column. (.) In.....Sn (I) lhe 11110 ollh. p.ol'.m.
For Itwm.a or otlMr auist.ne. alr..menu containt"l
mun.tol. Pntf'l",1 where OM or more protraml reQut,e
. tv"".' br..llcIown by fundlon or .ctfvtty. use .
14perata 'orm tor .ach oro...,..m ahowlnl tne apollcable
functions or .ctiYtttei. In the '.0"." columna. For
,.nts or ot"er assistance Ilreem."u contatRin, ,...
.,.1 functlOftS or activ*,iea which are funded Irom
....,.,., prorram1. pfWOIIr. . '.DI,.t. fonn lor ..en
oct....'Y 0' lunctlon _ ,""uHtetl by I"" Fed...:
__n, a..ney.
100 Ent.. Ih. net outlay. Thl. ........At ._1eI be Ih. ..m.
.. Ih. amount "DOlled In line 100 01 tn. I.st ~,.~
II Ih... n.. _ .n .dju.l_nl 10 tn. .""",At sIl_
prwwou.ly. pl.... .ttach _pl. nation. S_ z.", Illh..
I. tho Inltl.1 "DOl'\. .
lOb Enl., Ih. tol.l "".. p......m out..". (Ien ..bal..,
..Iund., .nd 01"'" di_nlS) lOf tn" Noort ....iod.
Inellldln, dl.D.........nts 01 ....h ...allz'" .. _,.",
Incom.. For ..port. lhol ... or.DeM on . .....
bal", 0\1110'" .ra III. sum 01 actual ca," dl.Durse.
m.~ for ,oeds Ind ..rvtc.l. tl'M .mount Of Indirwd
u....... c.....ed, Ih. ..111. 01 In.klnd contrtDuti_
.poli.... .nd Ihl .mounl 01 ca.h .dVlltlCe'l .nd
~yments midi to contracton and subfntntecs. For
f8ports preOlNd on an ICl:rved ..peftCllJlur. basiS. out.
laY" .re t". sum of .ctual caSh ditburseme"". Ute
amount of Indt~ lI.pense incurred. ."a v.hIe of .".
kind contributions I "ohed. Ind tM "et Inc,.... (or
d8CN.'" in t.... Imount. owed by ttMI rKtpien1 tor
'-' .nd ot"" P"'""Y 'oc:eiveO and 10' "Mee'
~rlO""..s by ....~. .-..CIOR, ou.....n._. .nd
"',.., Dey....
I.- EAI,."
J Oc [n'lIr thl lmount of IU pr'OI,.m Ineome ,.allled In
this peftOd '''I' II requlf'eod t'Y 'h. 'er"", ."d con.
d"lOftS Of'M f"er.' .__nJ to tHo ordUl:t:ed f,om 10'11
p"'t.ct COSfl. ror "00'" Drpl\lfed Oft . 'I,h bAI'S.
e"fer 'h. .mount 01 u." tl'tCt"ml 'f'c.,wed durin. th.
,.pon.nc ,."... rOl ,.port, DreDlled on In Iccrual
blSII. 1"le, the lmoun,. ot Income "f"fId since '''-
be.."n,nl of 1M repot1in! per'od. W'h,f'l t". term, or
COftclihOM ,How ptOff.'" lneome 10 br added to ,,,.
totel _.atd. I.ota", lit 'Imln.,. '''e 'ourcl. Imount
I"d d.soosUton ot tn_ '.w;oml.
lOt [nlet Imoum ""1''''''1 to the non."""", .".r. of
prof"'" ouU.,.. tnctudH In .h. amouft'.~ U", I.
IOh Cntot '010' _nt 01 unllqlllcl.led oblis.llon. to, Ihl.
protect or pra".a"" inctud'", un"Quldllled obllalhOn'
10 .11........... .nd controctOfI. UnliQulda'ed obli,..
tiOftl are:
ea.h bau-bll..Uons Incu"ed bill not paid;
ACCNed elCMnditur. ba,....-obli,lhons In~urn!'Cll but
tor which. In out..y "I. not been reco",ed.
00 not iftCtudl Iny amounts that hlVI beoen Included
Oft Jines. ''''WI'' .. 0" the final ,aport. line" shoul4
ha". . lira be"ftCl.
IOJ Entar 1110 F_'" ...... 01 unllQuld.led obll,.lIons
,"own on line h. The amount s~ on ."is lin. should
be the dlft...ence be,.,..n the amounts on linn h and I.
lOk Enter Ih. svm of Ih. amounts shown on lin.. S .nd ,.
II 1110 ..DOI'I .. final I"" ,.port snoulcl nol con..in .ny
unllQUlOaM oDl..t1on..
10m Entet Ih. unobllpled balanc. of FeIlenll lundl. Thi.
._nt .......leI be Ihe din........ botween Iin.. k .nd I.
II b Em., ..t. In elloct durtn, I". ,eportln. perlod.
11c Enter ._nt 01 th. ..... 10 ....leh I"" nil. w.s .ppli....
lid Entet 'otal .mount 01 indl,ect coli ch.'Sed dun", Ih.
..port periocl.
110 Ellie' ........nl of th. FocI....1 sh... ch."ocI Ollnn, Ih.
'.DOrt period.
If mo... then OM re'l was aoplied durlnc 'he proiect
period. indud. I seo-rate scnedule Ihowinl DIles
Illi"SI Wftlch 'he '''chreet cost rl'n were IDOfMCI. the
re.~ Indirect rltws the month. dlY. Ind yea' the
indSNCl rat.. ..,. ." eftect. amounts of irtdll1PCt .s.
_ _".0 10 lhe projoct. .nd Ih. focle..1 .h... of
indirect .....n.. chall.o '0 Ih. pIO;ecIl0 elat..
A-"i10:6
..
,
I
Office of Management and Budget Circular A-110 (7/30/76)
.1
A-110:7
AQp"",ed by Ollice of Men...ment .nd Budsot. No. 8C>-RO 182
FEDERAL CASH TRANSACTIONS REPORT 1. r.otul tGOfttorinc ',eMf lAd .fl.Aiuti.....1 .I_.-...t to ..+ltch Ih.. llport
il .UMlned
(See i7t:Jtructi~ on the ho.ck. If report i.. for mew. than o"e pra"t or
a.ui.7t4nc:e agreement. I1tLach completed Standard Form !7:-A.)
2- RECIPIENT ORGANIZATION 4. f .anl tna' ., .... ,.....Uhca. S. "ecipi...... KCOVfl' .u"n", .,
,,-- i.....tifyi... .".....,
No'lfte : ~ Lon... eI ...11 .u....... 7. Ln' ...,......t ...lIICh., ""...
H......" Give tl'tal number for Ihis perind
.Nt Str.c( :
I. P.,...... Vouch.n uodil" ,. 9. T...."". chec" '..cli".d ( 10M''''''''
J'GU' ICCOtIft t ~ ,.,.,t acpo..t~d)
CUll, Slale 10. PERIOD COVERED BY THIS REPORT
0"" ZIP Cod.:
3. FEDERAL Efl.1PLOYER ~ FROM (..._'A. "II, "...rl TO (",....-,. d. v wco..)
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 01 lines b 4nd c)
CASH e. Total cash available (Sum 0/ Lines 4.JJ.n4 d)
f. Gross disbursements
(Sec B'Peci~ g. Federal share of program income
i7t:J trucLi07l3
em the ba.c:k) h. Net disbursements (Line/ mmus Line g)
i, Adjustments of prior periods
j. Cash on hand end of period $
12. THE A\40UNT SHOWN 13. OTHER INFORMATION ..
ON LINE llJ. ABOVE,
REPRESENTS CASH RE. a. Interest income $
QUlREMENTS FOR THE .
ENSUING
D4VB b. Advances to subgrantees or subcontractors $
.
14. REMARKS (A tta.c:h a.dd11A0na.L shec:1.$ 0/ plcun paper, 1/ more space LS rcqu1red)
1S.
CERTIFICATION
SIGNATURE
I certify to the best of my
knowledge and belief that AUTHORIZED
this report is true in all reo
spects and that all disburse. CERTIFYING
ments have been made for
the purpose and conditions! OFFICIAL
of the grant or agreement
THIS SPACE FOR AGENCY USE
TYPED OR. PRINTED NAME "NO TITLE
IAr.. C....)
1 N..........)
TELEPHONE
272-101
EXHIBIT 2
DATE REPORT SUBMITTED
(E:Le_;.".)
S:TANOARO rOR'" 272 17-76)
r'r.~,it'Jttd by OHlce (")f "hru1Iteom."t ,.nd RudC.t
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:8
INSTRUCTIONS
Pteese type or print legibly. Items 1, 2, 8,9, 10, lId. lle, llh, and 15 are self explanatory, specific
Instructions for other items are as follows:
Ie-
Elltry
3
Enter employer ioontification number assigned by the
U.S. Internal Revenue Service or the FICE (institution)
code,
If this report coven more then one grant or other
allreement. leave Items 4 and 5 blank and provide the
information on Standard Form 272-"- Report of Fed.
eral Cash Tnlnsactioft-ContiMied; otherwise:
4 Enter Federal grant number, agreement number, or
other Identlfyini numtMrs if requestad by sponsoring
a~ney.
5 This space rO'Soerved tor an account number or other
Identifyif'lg number that may be ass.illned by the re-
cipient.
6 Ent.,- the letter of credit number that applies to this
report. If all advances were made by Treasury cheek,
enter "NA" for not applicable and leave Items 7 and 8
b1an k.
7 Enter the voucher number of the. IlIst letter,of.credit
payment vouCher (Form TUS 5401) that was credited
to you.r account.
11a Enter the total amount of Federal cash on hand at the
beginning of the reporting period Including all of tM
Federal funds on deposit, Imprut funds, and unde-
posited Treasury cheeks.
llb Enter total amount of Federal funds rlIC1livetf through
peyment vouehen (Form TUS 5401) that were credo
Ited to )'OUr account during the ntfl<)r'ting period.
llc ErMr the total amount of 1I11 Federal funds received
during the report.nc period through Treasury checks,
wMthoM Of" not deQOSited.
11f E'"-r the \otal Fedwal ca.1I dhbursements, maa.
dourine the ~ period, including cash received
M Pf'09f'8m income. Di~rsem.nts as used hero also
Include the amownt of advances and peyments less
Nfunds to subf..ntMs or oon"acton, the (ross
amount rr. 6i1'Kt a.alariec anc:l wee-, includinc tha
Eft try
Item
emplopee's share of benefits if treated as a dirKt cost,
interdepartmental charges lor supplies and sarvices,
and the amount to which the recipient is entitled lor
Indirect costs.
11i Enter the Federal share of program income that was
required to be used on the projKt or program by the
terms of the grant or agree~.:nt.
11i
Enter the amount of all adjustments pertaining to prior
periods anacting the ending balance that have not
bnn includ.cj in any lines above. Identify each grant or
arreement for which adjustment was made, and enter
an explanation for each adjustment under "Remarks."
Use plain sheets of paper If additional space is required.
11j
Enter the total amount of Federal cash on hand at the
end 01 the reporting period. This amount should include
all funds on deposit. imprest funds, and undeposited
funds (line e, less line h, plus or minus line I).
12
Enter the estimated number of days until the cash on
hand, shown on line 11j. will be expendad. II more than
three days cash reqinlments are on hand, provide an
explanation under "Remarks" as to why the drawdown
WlIS made prematurely, or other reasons for the eltcess
c:.ash. The requirement for the .llltplanation does not
apply to pres~eduled or automatic advances.
".
13a
Enter the amount of Interest earned on advances of
Federal ~nds but not remitted to the Federal agency.
If this lneludes any amount earned and not remitted to
the Federal spon.orinc arency 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 11 h. ..
"I
14
In addition to providing explanations as reCluired above,
liw additional explananon deemed necessary by the
rec:ipMnt and for in+otTnation required by the Federal
sj)Onsoring agency in complianc. with governing legis.
'-ticn. Use plain sh..ts 01 paper If additional spac. is
required.
~
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:9
FEDERAL CASH TRANSACTIONS REPORT I
CONTINUATION
(Tit.. l<>r..... '''''''l'l.,.d..nd allncILrd I. SIIl..Dnrd F"",, t~1 ...Iv ...h."
rrpoorli""......,.,.e tU7l 0'ft.I pr47\( C'r 4111"ttlMf a.prctl7\Cftt.)
. 2. RECIPIENT ORGANIZATION (Gi.,. "...... ...Jv .... .how" j" i..... I. SF
!71)
-A.pproved by Office of Man_,emf'nl .n( 8",.,.,. No.
BO_ROU2
1. FEDERAl SI'ONSORING AGENCY -1.ND ORGANIZ".
lIONAl ELEMENT TO WHICH THI& REPORT IS SUB.
MITTEO
3. PERIOO COVERED BY THIS RCf'ORT (A.. Ih....,,, ." SF
111)
,..OM I~". .... ....1
TO C "....... .&." .....,
4. List information below lor ..en gr,nt or otner ."eem.", covered by tn'l ,eOOft. Us.e additional forms if maR space is reQuited.
FEDERAl. GRAHT OR OTHER IOENTIF.I RECIPIENT ACCOUNT "U"8ER FEDERAL SliARE OF Ncr OISBURSEMENTS
CA110N 011 l7'IHER
IDIN"nING "u...l,. NCT DISBURSEMENTS 1(;-_ CU..UV.T'YE
('SAoVl .. ",bdiw.." bv .th.r id....l;. ................ .... P"'....... -- NET OISBURSE...ENTS
II'"'v ""...b.n iI ..q.ur.d bV rA. t____ ....f'...... FO" AtPO""HC
F .d~41 S".....-"V "v.,,<v) PERIOD
'n) I~l Ie) Idl
S $
. ,
,
.
-
I .
.. ...
..
5. TOTAlS (SIw>..14 ~oOfl"" ""tll .........nll .A.owft 0" SF' !7f ... j
lollow" ..I........ reI lAc ............ Ii". I HI; eoJ........ (d) tA. ...... .1 lines
J Ih ond II.. ./'hll .,)F' !11 ..nd cu......l..tivc d..b......m...." .h....... em I
1....1 r."....t. A. Uaeh .zJ>l4nGt..... .f .."V di! .....""...) S S
-
217-.0'
SU,NOARD FORM 27:<-" (7.761 .
P...l',I,,~ ~... OHi... rot "'e"D~.__t n"Od e..d,..,
Office of Management and BUdgl
'cular A-110 (7/30/76)
I
"AOr.
0'
.. .
A~ .., Ollle. of ""'n'l.m...' and
8udl". No. 8O-RO 183
""Gla
Z. Il.\SIS Of R(QU(ST
o CAlM
.... .. ..... ....
o ADVAHCI: 0 :':.:fuasr..
.. ... . ...
. REQUEST FOR ADVANCE
OR REIMBURSEMENT
,.
TVPC 0'
PAY"l"'
8IQUUTr.D
I.. .. MCN
o "MAl
4. Dra"L UN III 0'"[
IO(NT.I'YU'IQ NU".P AUlGMa
., I'I.DIML ACKNCT
o ,AonAl 0 ACCOUAl
~ ~... IAL ;'i'i"'''('NT "(OU~
NU".U 'Olt 'NIS RE.QUElr
"PIoO
NUMel1l:
M
'"I NT ..u...rR
0" IOUf"nIHQ NUM.Eft
P(RI C RED BY THIS RE U Sf
.. .............>> 0 (~... ......
11. COMP'lJTATlOfl Of' AMOUNT 0#' RIEI...URUMIEIfT1/ADYAHCU R[OUESTt:D ..-
(a) I') (e)
,
PROG/WllI/FUHCTlOHS/ACTMTIU ~ TOTAL
.. .T"'.. _..... (A. .f ""'"
0........ '0 dot. $ $ $ $
b. w..:C.......lotlw -I_
e. ::: ~m _.,. (Lftu. ........
d. ~... not"lIl ~ Ior_.....
potIOd
.. T_ IS......'.......! III
f. _.Fod...I_.. of .mount ...._.
R. r_ ...... of ._nt on HIM .
h. r_... D"""-' ...........". _u_... ..
\, = Ii::'~ - _od (r..;.. ,
I. ........- ~rod .., 1__
mont", - __od
..,r_,..__
lor .... In me..... _ 2nd mont"
-..lacl__
3rd .......11I
s.
N_
N_
N_'"
.... ..f'....
..-
.." .s......
c..... ,..-
... ur c...:
tit.. oJ....
.... J/f'e-.. :
lZ,
ALn:RftAn: COMruTATlClft fOIl ADVAHCD OffLY
.. UtI....,... rod.... ..Ill_Joys ,,,,, wlllllo _ dun,. potIOd _ .., tllo __
It. w.: [.,....,... 110'._ of r..rat ..... ... _ .. of IIoIiftninf 01 _ potIOd
e. ,,"-nt roc;Iu- (u... a...._ ,.... 6)
13.
CEllTIl'1CAt"IOtC
SlGNA1'\ME: Of' ~ED can,",_ MnCIAI.
I c....., '''ot to ,... lIoat of my _..
a"" IIoIMI ,... cia'. a_ ... -..- .nd
_ aW _.,. ... ....... in 0CC1Ird_ ~ __NTD ......e....D nTU
wit" tllo R..nt ..-Itions or _ ..__
_ _ ,_ po,- .. duo .nd .... not
- --...".---
--
TILE_I
TWo _lor ~_
'_'01 EXHIBIT 3
FederlJl Grants Management Handbook September 1978
.. .. ........ ,..... u... ..... ,.
$
$
0-. n "[OUaT
sue.mat
N_
.-
IT~ ,.,... no (J-'I.
............. .,. 0Mc. .. ...".......... .f14 ........
ORcuLAll NO. ...110
A-110:10
'\
..
Appendix I
l -",
I
I
,
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print legibly. lIems 1.3. 5.9,10, lie, lie, Ill, l1g, lli, 12 and 13 are sell.explanatory;
specific instructions for other items are as follows:
/I"" &..1."
2 Indicat. wh.ther reQuelt is ptepared on CIsh Ot ac.
crul'Cl ...,enchtur. ~"I', All r..ueln fOl' Idvlncn
Ihl.1 be prep.red on I C'I" bal.S.
[nt.r the reder.' Crent number. or othe, ictlntitytnl
number ...acned by tN fedetl' ,ponsorinl Ipncy. If
the HVlnee or ,...mbun-eme,,! is lor more lhln on.
m"l or other .,r..me,,\. iftSln. H/A: theft. show t"e
,&Cretrlte ImountL On I "IMr,'e I"Nt. Iisl ..e"
1'1"1 Of' II~ number IftCI the Feoer.' ,her. of
out"~ m.... 1,linlt '1M I,."t Of .,r...ment.
6 Ent., 'h. em"...".. leI....mc.liOOl """'- "";C"o<I 1>1'
,... U.S. I"'...... fI_ $efviC.. 01 ,... FICE (in,lilu.
'_I CtICIo II requ",o<I 1>1' ,he Fo<I.,.. ",eney.
n.ia spac. is rnet'V'ed lor In Iccount number or "'....r
1eI....llytnc """'_ 'ha' m.y ... 1..i",o<I by ,he
recIpient.
8 E"'.' 'h. mon'h. clay. .nd ye., 10' 'he beci""i"t .nd
...di"C 01 'ha penod ......,0<1 in Ihil ,_e.t. II 'h. ...
Quel1' is tor In ed..nee or for both an Idvance Ind r..
tmbur..m."t. ,hOW the IMriod tNit UI. .dv.net win
ccwer. II the feQUt"lt .. tor r.imbursement. s.how the
period to. which ,... "''''llurse",enl II reqves'o<I.
"ole: Tho Fo<I.... '--""1 ...Mi.. ...... I'" Olllion 01
,,",,virin. -'~s '0 com",." Iteml 11 01 I%. but IIOl
bolli, Item 12 I_lei ... vMfl _ only . ""nim"'"
emount of ifttorrnetiafl is ....... to meke In advllnce
Ind outtey in_'ion comai_ 1ft It.... II an ...
_aiMCl In . tI....1y .......... I",", ........ IeIIOf\L
II The ""_. of ,... __ _ e.l, (Ill, Ind Ie), is
'0 "",,,",0 ._ lor ..pe..to - _a_ - 0
I"l'iect .... _ ",a""o<I and ....clCMed ..,. _m.
lu_. 01 actMty. II ecldlt_' co\u...... "" -.d.
II.... Enl."
UI. .S ....ny edditiofte. 101m. ., nMded and indicate
tIII'o _ in ItIIICO ...-oded in y"pe. ri,..t: ,,-.
..er, ,.... """miry tClllaas ot III pro,r.,",. functions.
01 aehwibn should" lhow" ift the ..tDtal" cmumn on
"Ie 1.,'St pel'.
J II Ent., in .." o. date", Ihe month, day. end year 0' the
endt", of ttM: ac:counlinc penocl \0 whit''' this .mount
.ppftn. EMet Itt'Of".'" out"" to oa.r f ,... of re'uMs.
rebel". .nd discounts). i" In. 8pDf"Opn.te CG'um"s.
for rwQU"" prepered on . ClI" baSK. autt..., .re t".
&&1m oe lCtuel casn distJunemenu tor lood. and ..",.
ices. 'he amount of indirect ._penMS cha"ed. '''e
ve'd of ",.kind COftlribuh_s applied. .nd 'he .mount
of c.." Id..nces and peymetttl mlde to subcont,..c.
tOt"l and Mblecipiel'ts. For ,"unts PrecMred on In
eccrved e..,.,",.tu~ ..is. oulla,. .re the .um of 'he
Idua' ca." dt$bu....m...tl.. tft.. .mount of Indired e..
_eo incU..o<I. Ind 1M net lnero... (01' decnHl'" In
'he I_" ..- by Ih. 'ect....nIIOl rood. .nd ",1Ie1
_~ __ Ind 101 ._eo ~"ormecI by em.
IIi_ c:oontrKtS, IvllCnnlllll .nd ollie' lIIyftL
1111 Ent., lhe _Ie.ive a.h i_ ree_ '0 dale. If
reou..u .r. ~.... Oft . gSn b...... For requt"ltl
pfWpered on .n 8CI:I'\MCS uoendftu,. b...I. en'... the
eumu&alM iflCOftll ..med to detL Und... .tn..r basil.
ent... only I'" _n' ."IIiicallle to p......m income
tMt ..... ,..qy''''' to be u." tor the pra;.ct fW p~
I'.'" by the 'e"'" ot the f"ln' or oCher .,,....,...,.t.
lid Only _ melYnr ....ueltl lor _ftC. pey"'O"'".
_er tile 101" .stimeteod .moor'" of ...11 outleys '....1
_ lie ....... d""", ,he ...- co-AICl by 'he _.nee.
13 Complete ,he ...,ifoce'iOll ........ w_itiinc Ihi.
....v-.
.
A-110:11
'\
I
Office of Management and Budget Circular A-110 (7/30/76)
I
Approwecl by Offtce 01 Man..em.nt and rAGE or
OUTLAY REPORT AND REQUEST rOR REIMBURSE. Bud.~ No. BO-ROIBI 'AGt,
MENT FOR CONSTRUCTION PROGRAMS 14 n't 0' "(QUIEST 1. ......., or .IQUiST
(S... i".''''''e't....... ow back) o flHA.. o ".,.fl.1. DCA,,, o Ace.U."
I. ,[o[a..., !lP'OHsoa,,,,o AGI"CT "'"0 C)IltQAHl1A'tOfrt4I. cu:..1tHT TO 4. 'CD[IlA" clll....n oa O'"(JI L ,......n,.,. 'AYW(NT IIttQUCST "0.
WH'CH THIS .tro,.' IS IU....nto IO(NT.,..,...O HU...t. AUlGNI.D
.., , lOl:AM. AGllle,
.
L ~~::-'Or.",.(. IDlNnn<:AT'ON I" 0(1:1"('" ACe""'" o. 0'..1. ...... COlf'DD ft "'.. ......
IOItH"",..G ""....U
,~.. ......... ~ ....t TO e"......... .... .-.0'
.. .CClP'fItNT ORGANllAtlON a.. 'AYU. ~................ fl...... ""- M....f
H_ , H_ :
N.. .... He. ...
.,- , ...- ,
eM_. ClIo.
J.... .... ,..... ...
~/' C... : ~" c..:
u. STATUS 0' """OS
PROGRAMs.-TU"CTIO"~TIV1T1ES
CLASSIf'lCATlOH (0) C.) la' TOTAL
..'
.. Admi,,'strat;.. 8aoen,.. S S $ , $
b. .....lIml...",. ISllen..
C. L.nd, ,INelur... rlrt'll-<ll_,.
d. Architectural ."Iine.nn, belle ,... I
I. Otn., 8rchfteaur.' .nlt"..rt"l .... I
I. .....,oct In.......lon I_
I. Land dewlopm.nt
h, R.locoUon .._..
I. R.'ocattcm payments to IftCtivkluals .nd
bUli".....
J. Oemotlllon .nd ....._1 .
"- Construction Ind pro;ect Im~ I
cosl
I. Eoui_nt I
m. MiscenlfteOUI cost
n. T01:a' cumul'llvI to date (sum oj"lines I I
I IlIru m)
o. DfttuctiO"I tor prorram income I I
o. Net Cumulative to dlte (Un, " minus ,
line 0) .
Q. Fede,.' I"'" to CI.t. i
r. Reh.llilil.lion Ir,nts (100% reim-I I
tlursem.nl)
.. Tot.' 'ed.,.1 .11... (sum of Ii_ Q I I
.NI r)
t. 'ederal "'1"""'15 or........1y .... I I
Quested
u. Amount NQuelted tor ,.imbunem,nt 1$ 1$ S 1$
v. ::"j:;". of ollysiCal C'Omolction 01 I
12.. CERTI'ICATION
I certify Ih.1 10 Ih. besl 01 my kn_ed..
and b.lief U,. billed cosls or diSburse-
m'nU .r. in ICCOrdlftC8 wrth If'. Ie"",
of '''' "roiect ."cs "'It the ,,","burs.ment
reC)lB.ents the Fed,r.1 sh.,. due which
h., not been preYiousty reQuested and
,,,.. In in,oechon "I' been ~rtonned
Ind .U work is In IccorCSlnCI with u"
tenn, 01 the '''reI.
::11_102
EXHIBIT 4
%1 %/ %
SIGHATU"~ 01' AU'1MOIIIZtD U.,.,....tHG DATt' At:fIO'"
O""'CI4~ ."....ITTtD
.. RECIPIENT
b. Reoresentalive
ee"if'yt"1 lo Ii".
Ilv.
np'to Olil ....H'l'tD NAN" 1\"0 "T\oJ:
SION.TUIIII 0' ...tJTHQJlIZEO ctlllfll""flHQ
O'flClAL.
nP'ED Olil ,..."TED N.Ml NeD fULE
I TELCrMON[ IA_ ......
.....- ... .._I
DAn SIC" CD
I tCL[~MONt IA._ ~..
..-.- .... _____I
'1 AHO.IIID ro.... :71 (7...16~
,......~.t..... T" f....... ~. u........_..... .PIIt "..,~
%
A-110:12
.
,
~
I
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTlOfotS
PI",. type or print 'erfbty. It..... 3. <4,5,8,9,10. 11s. and 11v.... MlI.up".""lory; specilic instructions
for oth.,. Item. .... as loll~:
,... ........
"'ort< _ ___ -- " ,... .-- .. -, -
_~~___--_Gf-
---
2 ..... ......".. .~ ... .......... ... .. ........
-....------.
6 ....... .. ......., 1IWnC1~ "umbe' ....."'.d by
'n. U.S. 1",.'- R__ -1- net 1"'''__)
_. w __ ." _ ,...,- _..crl.
T ""1 .,... M ~ tat ." acaounl. ftu,"'- '" eC'ftet'
_I......... __ _ _, boo o~_ tor -
~
II no. _ _ _I _...... t--) "'f\1Ullh Ie) 1& lD
,...... ..... .... -cw..... .... w..~ ~ .
...,.. ~ .... - ,.._ ..... ~.., Dr .-
......, _ _ -~. " -- - ...
........, .... .. ......,. .odlttoft.f ..... .. ........... .-.4
lood...... _ _ lot _.. __ in _ fItrht;
_, _ -ry _.. 0# oW _ "'-
_. ... _ tltouIoI t., _ lot _ --
_..... _ "'" _ ...... I'M _ _ -'''' -
. _u_ bo_
Iw I___~...--..-....,
-, -. '" --...., .... - ---
____neGf__
--'-Dr_~--
__nt___-._...-
1110 _ _ ,-...ml _ _ _ Gf _1"1 .nd
........_ _... ......,. _ ....~ u..llInl _
_. ...., .. _ _ _i,. priat lD _
-~ ~ ~
lIe _.._dl.-,___~.
_ _ lend. ...... ..__ ..... ..... fIIItt~.
_.
IW ____...___It_l....-.
II. em.. _ __... --.or __ 00 "'"
Indude...----a.
11' I....................... __ of &a -.,"*' .....
--
Il( l_..____.r""_ .1_
__...~_Gf-..-i&_
I ~ I lit. The .........c ~"'"'r tit .... .........,..
_ ---"" _ >oft.. _;or __
------......,----
-...
II.. ~_ -_......10 ~_
......,., ...-..- ...., fIMIIt CiIlJ'StS .. ~d ._ 41( ......
looc__I.O"_____
........ ~ ~ ""- ...........
_bo__...____..
IIi EMor______-.,,-
__ to """- _'. 10"'" __
........ and fIlM"'. .,.........
1- .-.
III fIotw _ __..... _ of _~ of ,he
.......- _ ".,.-, ... '''1<1 potty ......nod..... eli.
-.,. ....... "' ...-. __ ... __, of
__ '- ~ ....... Nt """'_. ........ 'h.
.... of ....... ", __ .........,.. of ctrvc1ur.. s.itOutd be
__ lD ..... -=--: 'hefwOr ..1I<<'inl -
_ iI --.. br _ r..,...I...-,..
1111. E...., tftoN .mGlIlfftb .uoc....., wttf\ t.... ectual con-
~ of. IICIdIlttoft ... 01 "",O',.hO'" of . facility.
/ltfto. ........ Nt 1ft. ~. the amou",1 tor rwo;.et
....~-""MIb .....a. .. ......... 1t~1. lellllCJcapl"C.
- ..........
III Ene... _ .... .11 ""ulpne.... _ ft._ Ind "'....
...... ~.. ....'''''"'''' """'"' tor constrvction. ror
........... __11 _heel ..-...ory ..1>.... buill.
a. audiO ..... ,.,........ ....,.bN d...tll. eNt". and
--,~
11... _ _ __ for .. __ _ .peclllcallJ' ....n.
--
1).. ~ t.... ... eum".ttw: aflllOUn( to d.te ........ctt
.nouw lie.. ..... of ...... . ..~ m.
1.. _ _ _ _nt of p""..'" _ .ppli_ 10
.... ,nnC or CDfttf"llClt ..,.,...,...ne., ucept Income I.,.
_ _ _ ~ ld---, _ . _.... .heel o. poper
___~__I_..
u~ _ _ _...- "_ne ... d.l. whd> ._Id
.. ... ...... ...... on tine n mtnvs the amount
--..
u.~ ____of_..._nt._n_n...p.
1" E/ttW lIMo _ of .....bI....lion ...n, po"....nt.
..... .. ............. ........ l'f"lWN'" "'i".t~ pnlWicS_
100 ___ ~ ~ tile ,..,..., .....cr.
111 Ene... _ _ _ 0# F_... po~a prwwlouoly
_,,_ ___lor _I ...m.
-.
u. _ _ _ _ bol"l __ _ _no-
........ n.. ........ ~ ~ ..... ""__eftC. ~n
.... ........ ..... ... ..... . .1'1IIII t. If dltleranl. ...
"...-.---
l.a. To _ -......, ~ _ _ _ ...... ic ,..
.........,.. .., .... ~ 01 ... P"OI'"""'. Th. da'."
........ ..... .... ~ .... t... ...... 1& submifted .. the
F_._,
IZIl To bo ............ Dr'" oIlIcieI ..~.tlw
.... ia .-tMyiftc .. .... .....ftt of P"IfeC'I comol.ttOft
_ ~ tot ... ... ....... oC eM '''fit Of .C......,."l.
A-110:13
'\
i
Office of Management and Budget Circular A-110 (7/30/16)
ATT..CHMENT H.-CIRCtn...R No. A-IIO
MONITORING ..NO RErORTING rI<OGR..M
rERFORM"NCE
I. This attachment sets torth the proce-
c1ures lor monitorIng and reportlns prosram
performance of recipients.
2. Recipients \shall monitor the perlorma:lce
under srants and other Rgreements anc1.
...here approprIate, ensure that time. sChec1-
ules are being met. projected work units by
time periods are being accompllslled. and
other 'Perlormance goals are belns achieved.
This review shall be made tor ellch prosrl'm.
lunctlon. or activity 01 each asreement IU set
lorth In t.he approved application or award
document..
3. Recipients shall submit. I' performance
report. (technical report) {or each agreement
that brleny presents the tollowlng Intorma-
tlon (or each program, lunctlon. or ,.ctlvlty
Involved .... prescrl bec1 'by the Federal. spon-
soring Ilgency:
Il. A comparison o{ Rct.ual Ilccompllshments
with the goals est.l1bllshec1 lor the period. the
:lndlngs of the lnvestl@:at.or, or bot.h. II the
output of progrllms or projects can be readily
quant.ltled, such quantItative data should
be related. to cost data for comput.atlon o{
unit costs.
b. Reasons why established goalS were not
met..
C. Other pertinent In{ormatlon Including.
....hen .ppTOprlate. anal)'SIS and explanation
of cost overruns or high unit costs.
. 4. Except. a.& provll1ed In a and b bel 0"".
anel In subparagraph 3a( I I, Att.llchment 0,
reCIpients shall submit the performance or
technical reports t.o Federal sponsoring .gen-
des anel the l"lnanclal Stat.us Reports cov-
ertng the same perIod In t.he lrequency estab-
lished by At.t.achment. 0 of this Circular Ilnc1.
....here appropr\p.t.e. . l\nal technical or per-
formance report. after com.p1etlon 0: the
project on a dat.e speclfted. by the l"ederal
sponsorIng agency. The Federal sponsoring
agency shall .prescrlbe the trequenc)' with
....hlch the performo.nce reJ)orts wlJl be sub-
mined WIth the request tor advance or reim-
bursement when that {arm IS used In lieu
0: the 1"lno.nclal Status Report. Except. as pro-
..Ided (or In J)lU1Lgraph 5 'belo..... perlormance
reports shall not. be reqUired more frequently
t..'\an quart.erly or less trequently than an-
nuall)', l"edual sponsoring agencies may
....alve the requirement for recipients to sub-
::'tIt performance reports with the nnanclal
reports under the follow1ng CIrcumstances:
a. When the recIpient. Is reqUIred to sub-
mit a perlormance report ....Ith Il continua-
tIon or renewal Ilppllcat.lon.
b. When the 1"ederal sponsor Ins agency de-
termines that on-site technical InspectIons
and certlfted COlnpletlon dRtIL will be sulll-
dent to evaluate: const.ructlon projects.
c. When the l"ederal sponsorlns agency re-
quests annual ftnanclal reports on a ftscal
year baa15 but. It Is necessary to get annuo.l
prcgress reports on a ca.lendar year basis.
5. Between the required per{orman':e re-
portlng dat.es, .events may occur that have
Sl!;nlfteant Impact upon the project or pro-
~am. In such Instances. the reCIpient shall
:nlorm the Federal sponsorIng agenc)' as soon
as the (ollowlng t)'pes of condlt.lons become
known:
a. Problems. delays. or ad"erse conditions
t:tat will materially a!tect the ablllt, to Rt-
tLln program objectives. prevent the meet-
In!; o~ tlme schedules o.nd goals. or preclude
the attainment of project work units b~' es-
l.&bllshed time perIods. This dl~closure shall
be accompanIed by a sL:o.tement of the action
aken, or contemplated, and an, Federal B.S-
s:s:.ance Deeded to resolve the situation.
b. Favorable developments or events thILt
e~al)le time schedules to be met sooner than
RnUclpated or mor.e work units to be pro-
duced than orlglnall)' prOJected.
6. If an~' performance re,'lew conducted
by the reCipient dL~closes the need lor change
In the b\ldget estimates In Rccordance ....Ith
Lhe crl terlR established In A tt.achmen t J Co
this Circular. the recipient shall submit a re-
quest tor budget revision.
7. The Federal sponsoring agency shall
make site vIsits u lrequenU)' IU practicable
to:
a. Review program accomplishments and
management control s)'st.ems, and
b. Provide such technical RSSlstance as
may be reqUired.
8. Federal sponsoring Rgenc1es shall submit
proposed technical and perlormance r~ports
La Lhe Omee o{ Management Rnd Budget lor
ILpproval In accordance wi th the report clear-
ance requirements ot OMB Circular No, 10-40
as re\'lsed.
ATT..CUMI:JfT I.--cmC\ll.AR No. A-I 10
I'''TMEl'tT REQUIRCMCNTS
I. This attachment esta.bllshes the re-
quired method.s of makIng payments to recip-
Ients. These methods will minimIze the time
elapsing between the disbursement. b)' these
recIpients and the transter of lunda lrom the
United States Treasury to these recIpients
whet.her such disbursement occurs prior to
or subsequent to the transfer of funds.
2. Pa)'ments can be made to recipients
through a letter-oC -credit, an advance by
Treasury check. or a reImbursement b)' Treas-
sury check. The {ollo..'lns deftnltlons Ilpply
for the purpcse of thIS at.tachment:
a. l.cucr-OI-Cred.U.-A letter-of-credlt Is
an Instrument. certlfted by an authorized om-
clal of a 1"ederal sponsoring agency that au-
thorizes a recipient. to draw {und.s when
needed. {rom the Treasurr. through a 1"ed-
eral Reserve bank and the reclplent's com-
mercial bank. In accordance ,,'Ith the provi-
sions of Treasury Clreular No. 1075, as re-
vised.
b. Ad.\l4n.ce by TTe~ury' ch.ec/c.-An ad-
"ance bv Treaaury check Is a payment maele
by a Treasury check to a recipient. upon I~
request. before out.lays are made br t.he
recIpient. or through the use of predeter-
mlneel payment. schedules,
c. Reimbursement by Tre~ury ch.eck.-A
reimbursement. by Treasury check IS a Treu-
ury c:l:Jeck paid to a recIpient upon request
{or reimbursement {rom t.he recipient..
3. Except {or construct.lon grants and
other const.ructlon agreements {or which op-
tional payment. .methods Ilre aut.horlzed. aa
described In paragraph 5. the letter-o{-credlt
method shall be used by Federal sponsorIng
agencies If all of the {ollowlns conditIons
eltlst.:
a. If there Is or wUI be a continuing rela-
tlonshlp bet.ween a recipient anel a Federa.l
spoMorlng agency for at least a 12-month
perloel and the total amount. of advance pay-
ments expected to be received ,,'Ithln that pe-
rIod {rom the 1"ederal sl"onSOrlng agencr Is
$250.000 or more. aa prescrIbed by TreASury
CIrcular No. 1075. For Joint. funded projects
t.he Treasury haa authorized a dollar criterIa
of $120.000. . .
b. if the recIpient haa established or dem-
onstrated to the l"ederal sponsorIng agency
t.he willingness and abllltr to maintain pro-
cedures that ...111 minimize the time elaps-
In!; bet.ween the transfer o{ funds and their
dIsbursement. by the recipient.
c. It the reclplent's nnanclal management
s,'stem meets t.he standards for fund control
and accountAblllt). prescribed In Attachment.
F to this Circular. "Standards {or l"1nanclal
Management. Systems,"
~. The method of advancln" funds b}'
Trea.'uT\' check shall be used. In accordance
....Ith the pro"lslons o{ Treasury CIrcular No.
I
A-110:14
1075, ,,'hen the recipient meets all 01 the re-
quirements specified In parRgraph 3. above,
'ucept Lho!e In subparasraph 3a.
S. The reimbursement by Treasury chec.k
method shall be the preterred meLhod II the
recIpient does not meet the requirements
!peclned In subparagraphS 3b and 3c, Rbove.
At the option o{ the Federal sponsorlns
al!ency. thIS method may also be used on any
consLruCtlon agreement, or If Lhe majoT por-
tion 01 the proglam IS Iloccompllshed through
prlvllote market l\nanclng or Federllol loans.
and the Federal assistance constitutes &
minor portlon 01 the prosram. When the re-
Imbursement method Is used, the Federal
sponsoring al:enc~' shall make payment
within thlrt). days alter receipt 01 Lhe bill Ins,
unless Lhe billing 15 Improper.
G. When the letter-or-credlt procedure Is
used, Lhe recIpient ShRII be Issued one con-
solldl\ted letter-of -credit whenever possible
to cover anticipated cash needs for all gran\.S
and other agreemen1.s aWllorded by the spon-
soring al:ency. Ukewlse, to the u:tenL poesl-
ble. when th.e Ilodvanee by Treaaury check
method Is used, advances should be Clln-
sallltated (pooled I lor I'll grants Ilond other
agreements made by the sponaorlng agency
to t.hat recipient. . ,
7. Unless otherwise required by law, Fed-
eral sponsorIng agencIes shall not wIthhold
paym~nts for proper char@:es made by recipi-
ents at any time during the project or pro-
~ram period unless (a) Il recipient has lRlled
to compl)' with the pro!;rram obJectIves, award.
conditions. or Fede",1 reportln!,: require-
ments: or (b) the recipient Is Indebted to
the United States, Ilond collectIon or Lhe In-
debtednesa ...'11I not Impair accomplishment
o{ the objectIves o{ a project or program
sponsored b)' the United States.
Under such condlt.lons. the sponsoring
agenc)' may, upon reaaonable notice. In{orm
the recipient. that pa)'ments will not. be made
{DT obligations Incurred alter a speclned date
until the conelltlons are correcteel or the In-
debtedness to t.he Federal Oovernment. Is
liquidated.
ATT..CHMENT J.--cmCULAR No. A-lIO
REVISION or rt,....NC1A1. I'l.ANS
I. This attachment sets forth criterIa and
procedures to be (ollo....ed b)' Federal spon-
sorlns agenCIes In requiring recipients to re-
port. .devlatlons trom ftnancllll plans and to
request approval. {or l\nanclal plan re~
visions.
2. The nnanclal plan Is the nnanclal ex-
pressIon of the project or program as ap-
proved elurlng the applicatIon Ilondlol' tward
process. It may Include either ~e Federa\ and
non-Federal share. or only the Feeleral 5hare:
dependlns upon sponsorIng agency require-
ments. It should be related to performance
lor program evaluation purposes whene.er
appropriate and required. by the Federal
sponsoring agency.
3. For nonconstructlon awards. redplents
!:hall Immedlat.ely request. approvals trom
Federal sponaorlng agenCies when there Is
resson to believe that withIn t.he next s,ven
da ys a reviSion will be necessary for the
{ollo,,"'lnS reasons:
a. Chllnges In the scope or the objecth'e oC
the project or pro!;Tam.
b. The need {or additional Federal funel-
lng.
c. The transter o{ amounts buc1geted fer
IndIrect costs to absorb Increa!oCs Indirect.
COSl.$ or vIce versa. It approvlll Is required
by the Federal sponsorinG agency.
d. The expendl tures as require approval In
accordance wIth l"MC 73-6. "Cost l'11nclnles
for Educat.lonal Instltut.lons." For all other
awards. appro,'al requirements for other
Items o{ expendlt.ures may be Imnosed II they
Ilore consistent. with those In FMC 73-6. No
ot.her requIrements lOT speclne Items may be
I
Office of Management and Budget Circular A-110 (7/30/76)
IInposed unlesa a devlatlOD bu been ap-
proved by tbe OWce or MaDaGement LOd
Budge~.
e. ReclplenLs 1'1 aD to trarWer fUDds allot'-Cd
for training allowaDCCa (d1rect paymeDts to
tTalnees) to ower categories of espense.
t. None ot the substaDtlve prognmmatlC
work under a grant or other agreement may
be subcontracted or traDsferred wl~hout prior
approval at tbe Federal spoosorlng agency.
TI\ls provision doe.s not apply to the purchue
ot luppllea. material. equipment, or geDer&l
support servlc....
5, The Federal spoD.!lOl"lng "'Gency may
11.1110. lot Its option, relftrlct translers or funds
&.mons direct co...t cn.l.Cgorlcs lor awards ID
whiCh ~he Federal s~ exceeds "100.000
when the cumulative IUnount or IUch trana-
lers excceds or Is expected to exceed tlve
perCAJnt or !.be Lota! budget as 1.....1. approved
by the sponsoring agency. The SAme criteria
snail .pply .to the cumul.tlve amount of
~ransfers amoDg progl"Bomll, tunctloaa, and
II.ctlvltles wheD buc1geted separately tor an
..ward. ex.c:e"", thlot ~he Feder&l 9!)OnsOI"lDg
D.Gency &1'1&11 perml.t DO transter tha~ wouJc1
clouse any Fedeflll approprla.Uon. or part
thereot, to be used tor purpo8Cll o~her thaD
~h05e In"ended.
6, All other. changes to DODcoaatructlon
budgets. except for \.be chlongcs deserlbed
In paragraph a, below, do DOt require ap-
proval. This Incluc1es tbe use of redpleDt
funds In furtherance at proc;ram objectlv...
over anc1 above the reclpleDt m1n1mum share
Included In the a.pproved buc1get.
7. For constTuctlon awa.rds. recipients
shall request prior a.pproV'&iS promptly from
Federal spon$Orlng agencies lor budget re-
vl.sions wherever:
a:. The revision results from changes In
the scope or the obJectiye of \.be project or
program, and
b. TI\e revision Increases the budget
a.mounts at hc1eral func1s DlleGed to com-
plete the projeet.
a. When a Federa.l sponsoring agen:y
ma.kes an award that provides support.tor
both construction and DonconstTuctlon work.
the Federa.l sponsoring agency may require
the reCipient to request prior approva.l from
the Fec1er&l sponsoring agency before m:lklng
a.ny func1 or buc1get tlanafers between t12e
two types ot work SU;lported.
9. For bo!.b construction and nonconscruc-
tlon awards. Federal sponsoring agencies
shAll require recipients to DOtity \.be Fed-
er",1 Sp:lnsorlng agency promptly ...henever
!.be amount ot Feder&1 ..u\.borlZec1 funds IS
expec1.Cc1 to eltceed the needs of the recipient
by more than 55.000 or live percent ot the
Felleral awarc1. whichever Is greater. This
not.llic:a.tlon wUI not be requ1red It applica-
tiOns tor addlUonal tund1ng lLl'e submJtte:1
for contlnuLng grants or contTa.cts.
10. When requesting approval for budget
revisions. ree1plents shall use the buc1got
forms tha.t were used In \.be a.ppllcat.lon
unless a letter request will sumce.
11. Within 30 ca.lenc1ar eays from the eate
Of receipt of the request for buc1ge~ revi-
sions. Federal sponsoring agenCIes shall re-
vIe"" the request and noUfy tbe recipient
whol.her the bueget revisions have been ap-
proved~ If the revl~lon Is st1l1 under con-
sleeraUon a.t !.he enc1 ot 30 c:.a.Ienc1sr days.
the Federal sponsol"lng ..gcncy shall Worm
the recipient In WTltJnr of !.he daLe: wben !.be
redplent may e:r;>ect ~he decL,lon.
ATTACHMENT K.--Ctl\cuL..a No. A-IIO
CI.OSEOUT rnoccu:mES
1. This aUachment. presc:r1bes untform
closeout procedures for Federal grant:! anc1
other I\gr~menLs wll.h recipients.
2. TI\e fOllowing definitions sball apply for
~he purpose of tht, attachment:
a. Clouout.-The closeout of a grant
&greement U ~he procell8 by wblch a Federal
aponaortog agency c1ete~nes \.bat all ap-
pllcable adminIStrative e.ctJOD& aDd ~I re-
quired worll. at the ~ment have been
completed by tbe recipient. and the Federal
spoo.sorlng agency.
b. Date 01 c:omJllction.-Tbe c1ate of com-
pletion Is tbe dal.e on whlcb ~I work under
~ta and o\.ber agTec:ments 18 complel.Cd or
~he dal.e on l.be aware c1ocument. or any
, supplement or amenc1ment thereto. on wblch
Federal spoD$Orshlp ends.
C. DuallolDCd cods.-Dlsallowcd costa are
those charges to a I;TBDt or oLber ~reement
that ~he Federal spOD-wr!ng a~ency or II.'
reprcscnl.a~lve del.CrmLnes t.o be unallow-
able, In ..ccorl1Ancc wi th \.be applicable Fed-
eral cost prinCiples or o~her conc1ltlons con-
tained 1J:\ tba ag1'CemenLs.
3. AII Feder~ sponsoring agencl... ahall es-
tabllsb c1Ol1eout pr0c:e4ures Lbat IJ1clude the
fol1o_lng requirements:
a. Opon requClSt. \.be Federal sponsorlne
a(:e:ncy sball m..lte prompt paymcnts to a
reCIpient for allowable relmbur.sable costs
unc1er the grant or other agr~ment being
clOMCl out.
b. Tbe recipient 5ball tmmedlAt.ely refune
any balance ot unobligated (unencumbered)
cub tbat tbe Federal sponsorln~ ~ncy has
advanced or pale anc1 that 1s not au\.borl,..ed
to be retained by the recipient for use In
other granta or o~her agr~ments.
C. The Fec1eral sponsoring agency sball ob-
tain from the recipient wi\.bln 90 c:alenc1ar
days after the date of completion ot the
agreement all linanclal. performance. and
other reports requ1re<l IIli the condition ot the
&<<Teement. Tbe ageDCY may grant exteDSlons
_beD requested by the reCipient..
d. Wben authorized by the grant or otber
agreement. the hderal spoo.sorlng agency
5ba!1 mAke a sett.1ement for any upward or
downward adJWlt.monts to the l"ec1eral share
oC costa after \.bese reports &l'e received.
e. The recipient &baU account tor any prop-
erty a.cqulred Wlt.b' Federal funds. or re-
ceived from tbe Government In accordance
with the provlSlODS oC Att.&Chment. K to !.hIS
C1reular. Property M&D&gement Sl.anc1arcLs.
t. In the event a !lllal auc1lt bas not been
pcrtormed pl"lor to the cl_ut oC the gT&nt
or other acreement. the l"cderaJ spoo.sorlng
..gency sball retain the rtgbt to recover an
approprtate amount after tully conslc1ertng
t.hc recommendatlous on c1tsallowed costs re-
sult1J:\g from the linal audit.
t. Suspension and termluat.lon procedures
are contained 1J:\ Attachment. L to t.bls C1r-
cular.
ATTACHMENT t..-CmA:vLAa Ko. A-110
SUSPEM610N oUf1) TEJl,MUfAT10N raocz:zn7Jl:CS
1. This att.ac.bment prescr1bes unlJ'orm
sWlpenalon and I.ermlnatJon prxedures lor
Federal grants anel other acrec:ment.a wl\.b
re:::lplents.
2. Tbe following delinJtiOn.s shall apply
tcr Ute purpesc: ot this at.tachment:
a. Tc:rmifUlUon.-'The termination oC a
,",n~ OJ' other agreement means the can-
cellat.lOn ot Feder&l,spoD-~rsnIP. In whOle or
In part. under an agreement at any time
prtor to \.be c1aLe of complet.lon.
b. SIUpc:7Uio71.-The suspension of a grant
~r other agreement Is &II acUon by a l"cderal
spon.sor1J:\g agenCY tbat t.emporarUy su...-
penc1s Fec1eral spons:lrsblp under t.be grant
or o\.ber agree1J'cnt. pending correcUve ac-
tion by \.be recipient or peDc1l.Dg a decision
to l.ermlnate the grant or other agrecment
by U1e Fec1eral spon.sol"lng acency.
;I. All Fec1cral sponsortng acenclcs shall
provide proc:c<lurcs t.o be foUowed when a
recipient. bas Called. to comply w11.b the terms
.1
A-110:15
ot the grant or other agreement ..nd condi-
tiOns or ~tandards. When that occurs. the
Ft'deral sponsorln!; &genc)' m..)". on reMOIl-
able notice to the recipient. suspend the
~nnt or other agreement. and ",'I~hhold lur-
tbcr paymenta, prohibit the recipient from
IDcurrLDg a<1c1It.lonal obligations of funds,
penc1Lng corrective acUon by ~he recipient. or
a dec:Lslon 1.0 ~ermlnatlon In accordance ",'Ith
paragraph .. TI\e Federal sponsoring agency
shall ~Iow all necessary and ,proper costs
that th~ recipient could not relL6on"blv ..void
during the perloc1 ot suspension provld~d that
!.hey meet ~he provisions of the applicable
Jo'ederal co~t principles.
t. Federnl sponsoring ",encles shll.lI pro-
vide for th& s)'stemaLlc setLlement of ter-
minated grants or o~her agreements Includ-
log the follo_lng:
a. Termination jor cau.se.-TI\e Federal
sponsoring agency may reserve !.he right to
I.Crmlnate ..ny grant or other agreemenl. In
wbole or In part at. any time bef ore the date
01 cOJn;lletlon, whenever It Is determined that
!.he reCipient has fallec1 to comply with the
conditions at the agreemenl.. The Federal
sponsoring agency shl\.lI promptly notlly the
reclplen. In WTltlng of the determination and
the reasons for the termination, together
with the: effectlye date. P"vmenLs made to
recipients or recoveries b)' the Federal spon.
sarine agencies under grants or other &l;ree-
ments termlnllLed lor cause :;hllll be In ac-
cordance with the legal rights and liabilities
at the parties.
b. Tcnnin4tion jor cOftuenicn.ce.-The Fed-
eral sponsoring Biency or recipient ma)' ter-
mln,,1.e grants and other agreements In whole
or Ln part. when both parties agree that the
continuation of the ~roject would not pro-
duce beneliclal resuJLs commensura.te with
tbe further expendlt.ure of tunds. The two
parUcs shall agree upon the terminatiOn con-
ditions. Including \.be eflectlve date and. in
~he case ot partial terminations, the portion
to be termln"ted. The recIpient shall not
Incur ne.... obligations for the termlnatec1 por-
tion after the el'lectlve date. and shall can-
cel as man)' outstandlns obligations as pos-
sible. TI\o Fec1eral sponsoring agenc)' shall
allow fuJl credit to the recipient lor the
Federal share of the noncancellable obliga-
tions. properly Incurrec1 by the reCipient prior
to LermLnatloo.
ATTACHMENT M.-CtRCl7t.A1l No. A-IIO
STAKDAIlO rOIlM Toa AJ>PI.TINC rOil
TEDClAI. ASSISTANCE
1. Tbls att.a.chment41romulgates a sl.and-
I\.rd form (SF t2.) to be used by public and
.prlyate Instlt.utloM ot higher education,
public and prlvat.e hospitals and other quasi-
public and prlva.te nonproftt organizations as
a face sheet for applicatiOns ....hen a.ppl)'lng
tor Fec1eral granUl under programs cover"c1
by P&I't 1. Attachment A. OMB Crlcular No.
A-95. In addition. Biencles are partIcularly
encoura.ged to etund the use or SF nt to
common programs ",'\th Stllte and local gov.
ernments where this torm Is now required by
FMC 74-7.
2. The SF .2t may also be used. on an 01'-
uonal basiS. to fulnn the requIrements of
OMB Circular A-95 for a nOl:ncatlon of :n-
tent, from appllcant to clearlllllhouses, that
Federal assistance "''\11 be applied for. Loca.l
or State clearinghouse procec1ures wUl govern
the use of the form lor thiS purpose.
3. 'The standard lorm will also be used I),.
Feder,,1 agencies t.o report to the Clearing:'
houses on major actIons taken on :l?pllca.-
t.lOns reylewed by clearInghouses In accl)rd-
..nce with OMB Circular A-95, and ~o notll)'
States 01 gr..nts-ln-l\.ld a""arded In ..ccorll-
..nce ",'Ith Treasury C1rcular 10a2.
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:16
O"'S ....._.. H.. 79-A0fU
FEDERAL ASSISTANCE
1. -""PlI'
CAHrs
APP\.~
CAT~
.. __1I1
.. __u
19
3. STAn
o\nU_
nOH
IDVfT\.
~IVl
~. OATt
ASSIC"ED
r..... .........
....
I. ~PE 0 I'REIJ'f'llCATIOfC
ACTION 0 N'l'llOlllOlC
cM-.,... 0 NarFlCATlOft Of IKTUfT (t)pt.)
,....~
_I o. REPORT Of n:DEJlAL ACTJOtt
4. LEGAL "PPLICANT /RECIPIENT
~. DA'Tt
r___
19
Z-..
llIo..1
L PWERM. CMPLOTlfll IOt:HTt~ICATlOtC NO.
.. ""'iunt ........ :
~. O"."ilaho.- U.,t :
c. SI,Nt/P.O. !lCl& :
~. Cily : .. ......, :
I. S.... : I. liP todo:
.. MUlI8U
~. 111\.[
I I I. 1 I I
6-
PRO.
GM'"
<< r r....
rod.....
CooaoIo<P.
~. 1:0...01 P..- INo_
c .. .~,.lo...... /<fo.) :
i 7. TlTLEANO OESCRlnlON OF AppLICANr, pRonCT
5
I
~
~
!
i
e. TYI'!: or
.to- Stol.
11-I"_"
c- S 0 1IO\a"
OIIUicl
~
[-cn, .
,- ScMal OlfltfCl
'i="'-
...,.,.I.ICAH'l'/ItECIPIENT
~..o.n, Actl.. "-
.~ t I~I~-: Tr..t::-1i.... "'U1olioo
1-0111. ('s,..fttlll:
s..- ._.,...." lee_ 0
" TYpt QI MBISTANCE
.......... '_I ~..-
_....___...ot '-Ot1o..
c.-l...
.rd~ .,......... OJ
,........ ..c..- I .)
10. ARE-' OF PflO...ecT IIolPM:1' u.".- 0( -, .-
s.._ _)
11. Em"'''~ ~
BER 01' nJUQHI
BVlEFlT1"G
U. TYPE
--
..........1
OF APf>t.1C-' TION
~.loo [........._..11...
D-Go.II....II.. 0
&..&.... ep,.,..pn:.t. I.C.....
.00
111. ~JECT
OUMTIO"
M__
7_ ~ ....
U. TYPE OP GH"'i~ IT.". I" .". 1M)
10-1_" DoH'n f-Olhor (.5,.....'111:
a.-o-- DoIl.n
t-l...... ll.rwl_
0-0...... O...U.
[-GoKOlI.li..
11. p~E:D
..FmfRI\L Is
b. """pue.t.IITI
.. STATE I
d. LOC.IL
.. OT!f[R
PUNOINQ
W. CONGR~SSfONAL DIST'RICTI 01':
,00 .. APPUIlM1' Il. pllOJftf
.08
I.
TOTAl. S
FEDEML "~EHCY TO
00 150 PftOJECT START
. Dol. Tt f _ -..&A ....
It
00 1L esT.-TID OATf: 70
. I BE SU&MllItO TO
.00 I'EDERM. ...aENCY ~ 19
RECEIVE REQU[.ST lJlf_ au. 11_ u, ~
8..,..,. .ppro- rII'I
J>"'ioW ..ae....I.) U-L..J
11. EXISTlI'fG "EOEML 10ENTlFlCATION HUMSER
I=-
Zl. REIolAl!KS "ODEO
["J"'" 0 NO
Z%.
~
.. THE
~ "PPLICANT
~ CERTIf'IES
::!: THAT ~
II
!
a
..
..
I I. T. ,... liI.c .c "'" kft........ ."d MI"eI.
lhtl .. this ".......iClUOft/lpttjluU.. .If
''''" ..4 atr,..l. .. OOCll",...t .... ....
~...,. ..11I.riud ., _ _ior ....... '"
tttt .~ica..' .,,4 iii. looNca. wtN -.w
"'l~ .... .IUcMC __ 1/ ... ..aM-
........~.
~. II '"'1_ .., 0101I Ci_11f ....... _ ,","'1_ _ _In.c. ........1 .. i.. N. rl.
.tnact.... ....... .. IPPf'IOII'" .,..rt......... ..d .If ,...... I" anacA~: .,......
]/.---
ot&.cJw4
Z3 I .. TYPED /lAM! AIICl T1lU
CERTIFYINC1.
REPRE.
SENTATIVE
24. Aca!.NCY NAME
III 0 0
121 8 0
(]I . 0
~. IIDICATVllt Co OATE SIG/fED ,
)'_r ...-u. .... .
1. !
250 ORBo\"IZATIONoA.I. UNIT
I ~. ADIolIHIST""TIVt OrFIC~
zs. APPLICA. )'- - ....
TlON
RECEfVED 19
2L PEDEML APPLICATION
IDENTIFICATION
!
i Zll. AOORES&
~
~
i
..
..
I
10. ~EDEAAL OI':"NT
IOENTII'lCA TlON
31. ACTION T"KEH
31.
FUNOfNG
)' _ ...-u. .....
o .. AWAAOED
o b. REJECTED
o .. IlCT\/llIllO POll
AMEIlDVDfT'
T_ _""..._ Jo4.
nARTlfiG
.00 n. ACTIO" OATE ~ 19 OATE 19
.00 I ~':.. COftTM:T 1'011 M)OITlOI'tAL IHrQtt"'A.\ 3f. r_ ...o.tlo. .."
1101'1 (Ji._ ...J ~_~ ....-.....1 [1'1011'410
c. nAT['OO . DATE 19
(. LOOA~ 1.00 37. REM-'RKS ADDEO
.. OnteR I .00
t. lO'TAI. I s .00
I a. .. ....."r ...... HftH.. .., ......... ,........ ..... d.'i..r...... ..... -.. ~.
.....e(. II ........ _.. .. .oo ...or .....- '" I'Nt I.. ow, C1roo1... .10-41.
II ... __ or II -. _.
~. Al'Pl.IC.IItf
.. nOflW.
!
C 0 (. OEF!flllE1)
:: 0.' WlllIORA,,"
I ~EML AGEI'f":Y
"-95 ACTION
o Y.. 0"0
nOEIlAl. ACUtCY .to-Ii Of"FIClAl.
Iii ..... .... .....,.,.... -.1
..._..._.__ ............., ,.., ,..,..." , ",.. ~.l
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:17
SECTlOfi IV-REMARKS (PI.lUe r./.re,," the prO'pCr item 7ntmbrr from SutloM I, II or III, i/4111'licGhL.)
.. ,
~TAND^pn I"ORM ~24 PAGE 2 (l(,-7~1
~
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:18
GENERAl. It(STRUcnONS
This is a multi. purpose standard form. First. it will 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. Fotlrth. 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).
AFPUCMIT PROCEDl,;fiES FOR SECTION I
^ppliCllnt will complete all items in Section I. If an item ia not applicalHe, write "NA-. If additional space i$ needed, insert
an asterisk ...... and use the remarXs section on the back of tho fonn. Iv1 explaMtion follows for each item:
Item
1.
2a.
2b.
3a.
3b.
~h.
MaOt appropriate box. Pnt-eppllca~ and applica-
tion guidance is in mc 74-7 and Federal lI8ency
program instructions. Notlfioltion of intent KUid.
ance is in Circular "-95 proccclures from clear-
inghouse. Applicant will not uso "Report of Federal
Action" box.
5.
Applicant's own control number, If desll"lld..
Date Sectlon lis prtlpsrDd.
Number aSlllgned by State deeringhouse. or If d~
gated by State. by areawide clearinghouse. All ~
quests to Federal agencies must contain this ldonti-
fier if the pro(cram is COYI:lrecl by Circular .a,....95 and
required by applicable State/areawide deering-
house procedures. If in doubt, consult your d_r-
inghouso.
Dete applicant notified of cIaortnshouse k1:tntifier.
Legal name of appllc:znt/rec:lplent, name at primary
organizational unit ....tlich will undertalle the assist.
anCll activity. comp:;te eddress of applicant, and
name and telephone number of person who ClIn pr0-
vide further infonnlltion about this request.
Employer identification number of applicant as as-
signed by Intornal Revanue Servlca.
Use Cabllog of Federal Domostic Assistance num-
ber assigned to prognlm under wtIich aS3istanc:a is
requested. If mortl than one pl'OlJl'llm (e.g.. )oint-
funding) write "multiple" and explain in rtImlIncs.
If unknown, cite Public: Urw or U.s. Code.
Program title from Fed~1 ~talog. Abbnrvlate If
necessary.
Brief tttle and app~riate d=scriptlon of prvjec:t.
For notifiCZltion of intent. continue In remllncs sec.
tion if necessary to convey proper description.
Mostly self-explanatory. ..City" includes town. town.
Ship or other municipality.
Cheek the type(s) of assistance requested. TM
definitions of the tonns a~:
^- Basic Grunt. Iv1 original request for Fodenll
funds. This would not include any contribution
provided under a supplemontal gRnt.
B. Supplemental Grant. ^ request to increase a
basic ll'n1nt in certain cases when the eligfble
appliCllnt cannot supply the requireclmatching
share of the basic Fedenl progM!lm (e.g.. gRnts
awarded by the AppalaChian Regional Commis-
sion to provide the applicant a matching sha~).
C. Loan. Self explanatory.
6a.
6b.
7.
8.
9.
'tom
10.
11.
D. Insurance. Seff explllnatory.
Eo Othet. Explain on ."marks page..
Governmental' unit wtIen IMgnif\cant and meaning-
ful impec:t could be obserVed. Ust only Ia~est unit
Of' units affected. such as Sbrte. county. or city. If
antirtl unit a1hIctod. list It nrthor than subunits.
Estimllbld number of persons direct!)' benefiting
from pro;ect.
Use appropriate code 1fsottDr. Definitions ani:
A. Ncrw. ^ submittal for the fiMlt time for II nllW
PfOiect.
B. RenewIIL Iv1 extension for an additional funding/
bud8et period for a project having no pro;ectccl
compl4rtlon dIrta. but for wtIlch Federal support
must be ~ each year.
Co Revision. A modifiartion to proj<<:t nature or
- SCOJItI wtIich may result ift fundi"l change (in.
~ Of' deCnl8so).
D. Conttnu8tion. An mctension for an acIdltlonal
fvndina/bud(ret period for a pro~ the agency
initially agreod to fund for a definite number of
years.
E. Ausm-.t..tion. A nlCIuirement for additional
funds for a protect previously awarded funds in
tho seme funding/buds<< period. Project na.tunl
and scope uneha"led.
Amount rtlquested or to be coritributad during ,the
first funding/budget period by eac:h t:ontributtlr.
Valve of in.kind contributions win be Included. If
the action Is a change in dollar amount of an exist.
ing grant (a nMsion or augmenbltion), indicate
only the amount of the change. For decreases en.
close the amount in panlntheses. If both basic and
Ml~1 amounts a~ included. breakout in
remartcs. For multiple proenlm funding. use totals
and show program bre.Dkouts in remerlcs. Item defi.
nitions: 13a. amount requestecl;fT'om Fedensl Gov.
ernment: 13b. amount applic:ant will contribute:
13c. amount fn)m State. if applicant is not a State;
13c1. amount from local government. if applicant is
not a IoaII government: 13e, amount from any other
SOUrQ!S. explain in ~marks.
Set: explanetDty.
The dlstrict(s) wtIere most of actual WOOl will be
accomplished. If dty-wide or State-wide. covering
several district:s. write "city-wiele" or "State.wide."
Complete only for r1IVisions ("Item 12c), or augmen.
bItions (item 12.).
12.
13.
14a.
14b.
15.
STMMRO FORM 4.24 PAGE 3 (10-75)
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:19
Item
16.
17.
18.
Approltimate dllte project expected to bepin (usually
associatt'd with estimated date of availability of
f\lnding).
Estimated number of months to co~let. project
after Federal funds are available.
Estimated date preappliClltion/eppllcation will be
.ubmitted to Feelerel agoncy If this projoct requires
clearinghouse review. If review not requirad, this
date would usually be ~m. lIS date in ltem Zb.
Item
19.
Existing Federel Identification number" this Is not
a n_ request and directly relates to a previous
Fedenllaction. Otherwise write "NA".
Indi~e Faderel agency to which thIS request is
addressed. Street address not required, but do use
ZIP.
20.
21.
Check appropriate bIlx lIS to whether Section IV of
form conlllins remanu and/or additional remarks
are attachod.
^PPuCAtn PROCEDURES FOR SECTION II
Applicants will 1I1ways complete Items 23&. 23b. and 23c. If clearinghouse review Is required. Item 22b must be fully com.
pleted. Iv1 explanlltion follows for each item:
Item
22b.
238.
Ust cle.rinllhous~ to which submitted and .how
In appropriate blocks the status of their responses.
for more than three cleerlnghouse5. continue In
remarks section. All written comments submitted
by or through clearinghouses must be ettachad.
Name lInd title of authorized representativc of legal
applicant.
'tern
23b.
SeU explanatory,
23c.
Self oxplanetorY.
Note:
AppllCllnt completes only Sections I and II. Section
III is completed by Fadoral agencies,
FEDERAL AGENCY PROCEDURES FOR SECTION III
Item
24.
EJlecutive department or Independent agency heving
prognlm admlnistra~ion r1l5ponslbility.
Self explanatory.
Primary Ol'ianizatlonel unit below department level
having di~ progrem management responsibility.
Oftico directly monitoring the program.
Use to Identify non.award actions where Federel
grant identifier in item 30 Is ncrt epplicable or will
not suffice.
Complete edd~ of administering office shown in
Itom 26.
Use to identify award actions where dlnerent from
Federel appliClltion identifier In item 28.
Self explanatory. Use Mlmllrks section to amplify
where appropriate.
Amount to be contributed during the first fundingi
budget period by each contributor. Value of in.kind
contributions will be included. If the action is a
change in dollar amount of an uisting grent (a revi.
sion or augmentation). indicate only tI'Ie amount of
change. For decreases. enclose the emount in pa.
rentheses. If both basic and supplemental amounts
are included, breakcut in remarkS. for multiple pro.
grum funding, use totals ane show program break.
outs in rl!lTIarks. 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 appliCllnt is not a local government:
32e, amount from any othllf' sources, explain in
remarks.
Dete dctlon was taken on this roquest.
Date funds will become available.
If applicant.supplied information in Sections I and II needs no updating or adjustment to nt the final Faderal actIon, the
Federal agency will complete Section III only. An explanation. for eech Item follows:
25.
26.
27.
28.
29,
30.
31.
32.
33.
34.
Item
35.
Name and telephone no, of agency person who can
provide more information regarding thl:. ass.istance,
Date atter which funds will no longer be available.
Check appropriate bolt as to whllther Section IV of
form contains Federel remarks and/or attachment
of additional remarks.
For use with A-95 action notices only. Name and
telephone of person who CIln assure that appropri.
ate A-95 ection has been taken-If same as person
shown in Item 35. write "same", If ncrt applicable,
write "NA".
36.
37.
38.
Federal Agency Procedures-special considerations
.
A. Treasury Circular 1082 compliance. Fe4enll agency will
assure proper compllltion of Sections I and Ill. If SectiOh I
is being completed by Faderel agency, all applicable items
must be filled in. Addresses of State Information Recep.
tlon Agencies (SCIRA's) ere provided by Treasury OePlll't.
ment to each agency. This form replaces SF' 240, wl'llch
will no longer be used.
S. OMS Circular A-95 compliance. Fadenll agency will lIS'
sure proper completion of Sections t II, and III. This form
is required for notifying all reviewing clearinehouses of
major actions on all programs reviewed under A-95.
Addresses of State and areawide clearinghouses art. pro.
vided by OMB to each agency. Substantive dinerences
between applicant's reqllCst and/or clearinghouse recom.
mendations, lInd the project as '\Mally ewarded will be
explained in A-95 notifications to cle::ringhouSeS.
C. Special note. In most, but not all S.utes. the A-95 Stat"
clearinghouse end the (TC 1 ()8:!' scrRA are the same
office. In such cases, the 1.-95 ewud notice to the StaHl
clearinghouse will fulfill the TC 1082 award notice reo
Quirement to the State $CI A.A. Duplicate notlficetion
should be avoidad.
STANDARD FOJ'lM 42t. PAGE: 4 (10-75)
I
Office of Management and Budget Circular A-110 (7/30/76)
, An...CliMCNT N,-<::IRCI1LAR No. 11.-110
rRorcRTY M...N...CCMI:NT ST...No....DS
1. This Attachment presc:ribt's unUorm
sto.ndarcls so\'ernlns mnnnsement of prop-
erty hlrn1shec1 by the Federo.l Go\'ernmellt or
whose cost WAS ch....ge<1 \.0 & project sup-
porl.ea by a Fec1erAI grant or other Al!reement.
Federo.l sponsoring o.gencles shnll require re-
cipient.. 1.0 observe these sl.&nanras under
srAnts and other agreements and shall not
lmpollo o.c1c1It1onal requirements unlesa spe-
CUICAII)' required by Fec1eral law. TI\e recipi-
ent mA)' use Its own properLy manllgement
s\.llndnrds nnd procedure.~ provldec1lt observes
the prO\'lsIOlls at this o.ttllchment. Thill At-
tacl\ment Also Applies \.0 subreclplents a.s
re!erred 1.0 In pllrl\srnph 5 of the bllSlc clr-
culnr.
2. The, following dellnltlons Apply for U:le
purpose ot this attachment:
a. /lel1! propcrry,--.1~nlpropert)' mea.zu
lAnd, Incluc1lng lnnc1 Improvements, sl.ruc-
tures I1nc1 appurtenlU1ces thereto, but ex-
cluding mOVAble machinery and equipment.
b, PcrMlnlll propel'ty.-Per.;onI11 property
or any klnc1 except real propert)'. It may be
\.llnslble-havlng ph)'slcal eltlstence. or Intan-
gible-having no physical existence, such 114
patents, Inventions anc1 copyrights.
c. None%pCnc1l1ble pcr307L41 propel'ty.-Non-
expenc1able person ILl J)roperty means tAngible
persono.l property h""lng A useful lite ot
more than one year anc1 o.n o.cqulsltlon cost
ot a300 or more per unit exempt that reclp-
lent.s subject. to Cost Accounung SI.&nc1arcls
Boo.rc1 regulations may use the CASB st.a.n.cl-
uc1 ot f.sOO per unit anc1 usetul lite at two
)'ears. A recipient may use II.s own c1ednltlon
ot nonexpenc1&ble per.;onal property provlc1ed
that !.be d~ltlon woulc1 o.t least Inc:!ude &U
tangible personal property lIS aennec1l\bove.
c1. E.:"endAblc personl11 property.-Expend-
o.ble pllnlOnal property reten 1.0 &11 t.an!;lble
personal property other than noncxJ)enc1&ble
property,
e. E:elJlJ p1'Opcrtv.-El:ceSll J)roperty means
property under !.be con trol of o.ny Federal
&gency that, U aeterm1Dec1 by !.be head
thereot, IS no 10ngeT required tor l1.s needs
or the alSChar!;e at Its responslbllltles.
t. A.cqui.sitlon cost Of purchased. n.onc:z-
peMl1ble: penonlll FOJlCrty.-Acqulsltlon coat
of o.n Item of purchASed nonexpenc1able per-
sonal J)roJ)erty means the net Invoice unit
J)rlce at the J)roperty Inc:!udlng the cost o!
moc1lliclLtlons. attachmenl.s, accessorIes or
aUltUI;lr)' ftppa.rll.tus neces.sary 1.0 ma.ke' the
prope~tr usalJlo for the purpose for whlc:b It
was acqulrec1. Otbe:" ch&l'ges such I\lI the cost
ot Installation. tnnsportatlon. taxes. c1uty
or proloeCtlve In-transIt In6urance. shall be
Included.or excluded from the unit acqwsl-
tlon cost In &ccordance with the reclplent's
regular aCCOuntIng practices.
g. Ezempt propcrtv.-El:empt property
means tan!;lblo penonal J)roperty acquired In
whole or In 'pa.rt With FederlLl tunds. anc1
Utle 1.0 which Is vested In the recipient wIth-
out further obligation 1.0 the Feder&l Govern-
ment exceJ)t as J)rovlded In subpara!;raph 60.
beloVo'. Such unconditional vestln!; at tll.1e
wUI bepursuan~ 1.0 any Federal legIslation
that pro...ldes the Feder&l sponsor1n; Agency
\I,'lth l\.dequlI.te o.uthorlty.
3, Rcal propc:rty.-Each Federal spor-sorlng
a.gency shall prescribe requlremenuo for re-
Cipients concerning the use and dlspo~IUon
01 real propert). acqUIred partly or wholly
unde~ j;rants or other Agrccments. Unless
otherwU<e pro\'ldecl b~' Sl.ntul.(!. such rel'lulrC'-
:nt'nlS. &s a mInimum, shall C'Ol1wun the
:.:lllo""lllb:
a. TItle to real propert)' shAll vest In the
reCipient subject to the condition that the
recipient shall use the rcnl propert). 10~ the
AuthorIZed purpose 01 the proJcct.' ns long a.s
It Is needed.
b. The recipient &ho.lI obtAin approval b1
the i'ederal "pon50rlnlt &4:ency for the w;e of
real property In other proJCCI.s when tbe re-
cipient determines that Lbe property Is no
longer needed for the purpose of the original
project. Use In other projecl.s sllall be IlmllA!cl.
1.0 thOliC under Ol.her federally sponsored proJ-
ect.s (I.e.. grants or other agreemenu) or pro-
grams that have .J)urposcs coMlstenl. WIl.b
Lho.'OO authorl7.cd for supl.ort or the l"ecIe....1
sponsorIng "4;ency.
c. When the real J)roperty Is no lon~er
needed &S provlc1ed In " and b abOve. U)e
recipient. shnll request. dlllpnsltlon Instruc-
Uonsfrom the Federal spnnMrlnc ar.ency or
Its $UCCeSlOOr Pederl\l III>on50rlllr. agency. The
Federal llpon~rlne aeeney shall observe the
follawlng rules In the disposItion Insl.ruc-
LIons:
(I) The recIpient may be permltL<:d \.0 re-
LAin title &fter It compensale6 the Feder&!
Government In an amount. compuLct1 by &1'-
plying the Feeleral percCJIl.age 01 plU'l.lClpa-
tlon In tI\e cost or !.be orlc;lnal project \.0 the
flLlr mlU'ket value ot U:le property.
(2) The reclplent may be dlreclA!cl \.0 ...11
tile J)roperty under guidelines provided by
the Federal spoDllOrlng "Cency anil. P0.1 U:le
Fe:leral Government an amount compulA!cl
by applyIng the PederlLl perc:CDt.age or par-
tlc:!J)atlon In U\e cost or U\e ongloal project
\.0 Lbe proceeds from sale (arl.cr deducting
o.ctual and reasonable seUlng and ftx-up ex-
penacs. If any. Irom the lIAIcs proc:eccll;).
When Lbe reclJ)lent Is authorU'.ed or requln:G
1.0 sell the property. J)ropcr lI&les proccclW'Cll
shall be established that proVIde for competl-
tlon 1.0 Lbe estcnt practicable and result IJ1
tne hIghest posslble retunl.
(3) The recipient mo.y be dlrecLct1 1.0 tr&DS-
ter Utle 1.0 the property \.0 !.be Fccleral Ony-
emment provided Lbal. In sue)) c:a.scs tne
reclJ)lent sb&ll be entitled 1.0 compelllS&tlOI1
C:lmJ)utcc1 by o.pplylng the reclplent's per-
centage or partlc:!patlon In Lbe COIIt of Lbe
program or project to the current lair' market
v&lue or Lbe property.
4. Fed.crI1IIl-cl&llnC n.on.c::pcndoblc persoft4l
propcrtv.-Tltle to tedentJly-o.ned property
remains vestel1 In tbe Fe:ler&l Government.
Recipients shall submit &nnu&lly an Inyen-
tory IlstlAg of federally-oWDed propertY In
their custody to !.be J"lecler&l spolUlOnng
&gency. Upon completion or the acr_ent
or wben the J)roperty Is 110 lonpr needed.
the recipient shall report the property 1.0
the Federal' sponsoring &gency lor turU:ler
I1gency u tlllzaLlon.
It the Feeler&l sponsorlng acency bu no
Iurther need for the property, It &ball be
c1cc1are:! excess ana reporLct1 1.0 Lbe General
SerVIces Adm1nISl.rl.1on. Appropnal.c dlspel'l-
tlon Instructions will be IssUed to Lbe re-
cipient af\.er completlon of Lbe Federal
agency reyl...
5. EumJlt property.-WhCD stal.Ul.orr au-
thority eslst&. le.g~ PL. 8$-934. .u 17..s.C.
1892) tltle to nonespendable personal prop-
erty aequlre:l with project funds. sh&ll be
yate:! In the reclplCDt upon acqUiSition un-
less It Is determined that to do so IS not In
furtherance ot the obJecUycs of the Feder&!
IIpon50rlng agency. Wben tItle Is veste:1 In
the recIpient. the reciplCDt sh&ll have no
other obligation or accountablllty \.0 the
Federal Government for Its use or dlsrosl-
Uon except as prOVided In Ga belo..
G. Other nonczpcn44ble: propcrtJf.-When
other nonexpendable l.ant:tble per.;onlLl prop-
erty Is acquired b)' a reclplcnt wlU:l project
funds, title shall not be I.nken by the Fe:l-
('r:ll Go..(':-nmC'n~ but "hall ..cst In th!" /"C-
clplent "ubJect 1.0 tht' follo,,'lnl: conditiOns:
a. n.gnt to trl1nslcr lille.-For Items of
nonexpendnble penon&l proper~y h:aylnl: a
unit acquislUon cost of $1.000 or more. !.he
Federal sponsorln!; agency may 1'C$erye !.he
rlSllt \.0 unnster the tItle 1.0 the FedcrlLl
.1
A-110:20
Gaffrnmen~ ur to & third party namt'd by
the Jo'ooeral Government wilen "uch lhlrd
,.uLy Is oLherw...e elll:lble under exllltlllG
"LALli tea. Such rC6CrVaUOl1 shnll be subject La
the follawlng Sl.&ndarc1s:
( I) Tbe property 511all be appropriately
ldentlfid In the gr&ut or other as:reen\ent
or other.lse made known to Ule recIpient
In wrltln!:.
(2) The Peder&l spolUlOrln!; "genc)' "hall
11ISue diSposition .Insl.ructlons within 120 cal-
eouAI' days atl.er the end of the Federal ..up-
pnrt or Lhe project for ....1\ICh It was "cqulred.
It the Fcdernl ..ponllOrlng Al:eney falls to IlIIIue
dl5por.ltlon In,,tructlons wlLhln Lhe 120 cAI-
"ndar do.y period. the recl plen t shall Appl y
LI.e sLandardll oC "\Ibpllragraphs Gb and Gc
I\S "pproprla te.
(3) When the Federal IIponllOrlnc "gency
ellerclllCS It.s right \.0 l.&Ic.e title, the personal
property shall be subject 10 the provisions
Cor feder&!ly-ownec1 noneltpendable property
dll'Cussed In par&gl'aph 4, abon.
(4) Whcn title Is transrerred either \.0 the
Pede",1 Ooycmment or 1.0 & Lhlrd party.the
proylSlons or subp&l'&gr'Ilpb OC(2) (b) should
be followed.
b. Un of oth.er tAngiblc nonczpcn4l1blc
property lor IDhi.t:h the: recipient h.1l.! Utle:.
(1) The recIpient shall ww: tohe J)ropcrty
In the project or program for which It was
o.cqulrec1 &S'long RS needed, whether or not
the pro Jcct or prol:f'&m con tIn UCII to be sup-
porLct1 by P'oocr&l Cunds. When no longer
needed for the orl,lnal project or program,
tile recipient Sh&ll use tbe property In con-
nection wlLb Ita other redcrnlly IIponaored
l\CtlVltlc:s, In the rollo.ln, order of priority:
la) Actlyltles, 111 tbe following order or
priori t y:
Ib) Actlvlties sponsore<1 by oLber Federal
acenCles.
(2) ShOTc4 we.-Dunng tbe tlme that
nonexempt nonexpendable pcl'llOn&l proper-
ty Is held tor use on !.be J)roJect. or J)rOi"Lm
for wblcb It .... acqu1red. Lbe recipient
sball make It avaUaole for UlIC on other proJ-
ccta or pl"OgTAms It sue)) o!.ber \lae ...111 not
lat.cr1cre .Ith the work on the project or
progratn tor ....tlleh the property was orlgl-
n&lly &aqUlrec1. Plr'st preference tor sucb
other use shall be glyen 1.0 other proJcct.s or
p~ ..ponsorecl hy Lbe J"lecleral a.gency
!.hat nD&Dced the property: IleCOnd prefer-
ence shall be given to proJecta or J)ro(tl'ams
IIponsorec1 by OLher Federal agencies. It the
property Is owned by the J"lecleral GoveTn-'
ment, use on other actlvltles not sponsored
by U\e Fede....1 Government shall be per-
missIble If authorlzccl by tbe Federal &gency.
User charg= should be cODIIldered 11 appro-
priate. .
c. DiIJpo.rition of other n.onerpendoblc
property.-Wben Lbe reclplen~ no longer
nccc1s the property &S proVIded In 6b o.bove,
the property may be usecl for other actl'll-
tles In accordance wlLb Lbe tollowlng stand-
ards :
(1) NON::JlC"dAble property seith a unit
caequi..rition cent of IcIJs tlLl1n Sl.DDD.-The re-
cipient may use the property for other actIvi-
ties ""'thout relmbUl'llCment 1.0 the FederlLl
Government or sell the property anc1 re-
\..aln !.he proceeds.
(2) Non~ciGblc personal propcrty with
11 unit I1cq.ui..rition e:od of SI.DOO or morc,-
The recipient may rc\..aln thc J)ropert)' for
other uses prOYlded that compensatiOn Is
mAde 1.0 Lbe origInal Federal SJ)onsorlng
AGency or It.s successor. The amount of com-
penMtlon shall be ct>mput.ed b~' arplrln(:
tht' pcf"C'entAge of f'todC'ml plLTtlr1r": Ion In
thC' c:nst oC tile orl(:lnRI proJt'Ct or pro!;rr.rn \.(l
the cUrTcnt fair market value of the properLy,
If the recipient hu no need Cor the proper~y
and the property has rurther \llIe ...,,1 ue. the
recipient shull Tl'qUc:st c1lspo.~ltlon Instruc-
lions trom tbe orlt:tllA1 sponsorIng a.(;enc)',
I
Office of Management and Budget Circular A-110 (7/30/76)
Tbc l"eC1e",1 .ponsorlng lI~ency shaU dtter-
IIftlne whether the property can be u~ed to
mect the lI~cnc}". req\llrementa. If no rl'-
qulrement exlsl.S within that liSe/ICY. the
ayallablllty ot the property shaU be report-
ed to the Oeneral Ser...lces Administration
by the Federal agcnr.y to determine whether a
requirement tor the property exlsl.S In other
Tederal Allencles. nle Federal sponsoring
agency shaU Issue 1n.~tr\lctlon5 to the recipi-
ent no Intcr lhan 120 days alter the reclpl-
enl's requesl and the 10Uowlng procedures
shaU govcrn:
(a) If 50 Instructed Or II dl~p05ltlon In-
structions are not I""\lcd within 120 calen-
dnr uny" nIter the recipient', request. the
reclplentshaU lieU the propert)' IInd relnt-
burse the Federal Ilponsorlng agency an
&mount comp\ll.Cd by appl}'ln~ to the sales
proceeds the percentAge 01 P'edcral p"rtlcl-
pallon In the co.l 01 the original project or
proG'ram. Ho..ever, the recipient shaU be
permitted to deduct nnd retAin lrom the P'ed-
eral share II 00 or ten perccnt 01 the pro-
ceeds. whlcheyer la greater, lor the reclplent's
seUlng and handling expenses.
(b) It the recipient IS In~trucl.Cd to .hlp
tbe property elsewhere. tbe recipient shall
be reimbursed by the benentlng Federal
arency with an "mount which IS computed
by applying the percentage ot the recipient's
partlclp"llon In the coat ot the original grant
project or program to the current lair marltet
...&!u. ot the propert}., plus any reasonable
ahlpplng or InteMm storage costa Incured.
lc) It the reelplent IS Instructed to otber-
wise dispose ot the. property. the recIpient
shllll be reUnbursed by the Federal sponsor-
Ing agency tor .uch coaLS Incurred In Its
dL"posltlon.
d. Properly manapemcnl ~landarlU lor
aone:'pcnci4blc l"'O:D~rly.-'nIe reclplent'a
property management standuds lor nonex-
pendable penonal property mall Include the
tollowlns procedural requlrementa:
(I) Property recorda shall be maintained
&c:Cura.tely and shlllllnclude:
(a) A deac:r\ptlOn ot the property-.
(b) Manu1acturer'a serllll number, model
number, Federal .toc.k number, naUonal
atock number, or oth.r IdenUOcatlon num-
ber.
(c) Source ot the property, InchlcUng
grant or other agreement n\lmber.
(d) Whether title vesta In the reCipient or
the Federal Govunment.
.(.) Acqu~altlon date (or date recel...el1. It
the prope!";)" w... turnlahed by the Federal
Government) and cost.
(!) Percenl.age (at the end ot the budg.t
!"..r) ot FelIer..1 p..rtlclpatlon In the cost oC
the project or progr..m lor whlen th. prop-
.rty wu acquired. (Not applicable to prop-
erty turnlah.d by the y.der..1 Go...ernment.)
un LocAtion. woe and condition ot the
property and the daLe the Inlormatlon w&a
r.port.cl..
(h) Onlt ..cqulolltlon cost.
(1) U1Um..te dlspoaltlon elata. Including
d..Le ot disposal and sales pMce or the methoeS
used to determine current t..lr market y..hle
where .. recipient comperuates the Fed"ral
apon.orlns asency for Ita share
(2) Proper~,. owned by the P'eder..1 Go.-
ernm.nt mu.st be m..rlted to Indicate P'ed-
erlll own.rahIP.
'3) A physical Inventory of property sh..1I
be talten and the reaulta reconciled with the
propert)' records at leut once eyery twO
ye"rs. An}' dlnerencu between qu..ntltles de-
termined by the physIcal Inspection and
thc/s. sho"'n In the ..ccountlng records shllll
be Inyestlgat.d to determine the causea of
the difference. Th. recIpient shall. In connec-
tion with the In...entory, yerUr the eXistence.
current utilIZation. and continued need lor
the prope rt}' .
(~) A control Ay~t.m sh..lI be In .:hct to
In.ur. adequ,,\.e Itlle;;Ullrds :.0 "re".n~ IC'!UI.
dam..gc, or theft of the property. Any 10",
d"m..se. or theft of nonexpl'nd"ble property
5hall be Inve..tlgn.ted and lully documented;
If the property wa& owned by the rederal
Government, the r"c-Iplent shall promptly no-
tUy the Federal sp.,n.orlng "gency.
(6) Adequlltely m"lntenance procedur..
5hnll' be Implemented to keep the property
In good condlLlon.
(6) Where the recipient Ia "uthoMz.a or
required to sell the property, proper 5"les
procedure5 sh"ll be established ....hlch would
pro...lde lor competition to the extent practi-
cable and res\llt In the highest pOSSible re-
turn.
7. Ezpendablc pcnonal l"'opcrly.-T1t1. to
expendable personal property shnll ...st In
the recipient upon acq\llaltlon. If there 'I. a
resldulll Inyen\.ory ot such property exceedIng
al.ooo In totAl aggreg"te 1"lr market y"llIe,
upon termination or completion 01 the grant
or other agreement, IInd the property Is not
needed tor an)' olher lederall)' aponlOred
project or progr"m, the recipient shall retain
the property tor w.e on nonlederally spon-
sored actlYltles, or sell It. but mUllt In eltlTer
. caae. compensate the Federal Goyernm.nt
lor Ita .hare, The amount of compenaatlon
shall b. computed In the same mann.r ...
noncxp.nd"ble personal property.
8. Intanviblc proVCrlY.
a. Invenlion~ and patcnt.s.-If ..ny program
proeSucell patentable Itema, p"tent rlgh"',
procesaea, or InyentloN, In the cours. 01
worlt aponsored by the Federal Government.
sueb fact .hall be promptly and tully report-
ed to the P'ederal aponaorlng ..gency. Onl_
there III a 1'1'101' agreement bet.....een the re-
cipient and the Feder,,1 aponsorlng agency-
on disposition of .uch Items. the Federlll
apon80Mng agency ahllll determine whether
prot.eCuon on the In...entlon or dIllCO"TY shall
be BOught. The "edera.1 sponsoring "gency
..,111 also determine how the rlghta In the In-
vention or discovery-Including rlShta under
any patent t.vued thereon_hall be allocated
and a4mlnlatered In order to prot.eCt the pub-
lic IDterest cocslstent with "Oo...ernment
Patent Policy" (Presld.Dt'. Memorandum
tor Heada 01 Executlye Oeparlmentll and
Agenclea, August 23, 11171, and stal.Cment ot
Oovemmen~ Patent Policy u prlnt~ tn 36
P.R. 18889).
b. COJ'Y"iVILt.s.-Ezcept ... otherw1a. pro-
Tided tn the terma and conditions ot the
agreement. the author or the recipient ort:an-
lzatton 1a tree to copyrlr;ht any boolt.. pub-
lications. or other COP)':'lght&ble maurl~s
de...eloped In the coune ot or und.r a Ped-
eral ..greement. but the Pedera.1 .ponaorlng
agency shllll reserve a roy~ty-tree. nonex-
clusl"'e and trre...oc..ble right to reproduce,
publish. or otherwise use, and to authorl..
oth.n to 'list, the work tor Oo...ernment pur-
pons.
ATT...CHMEJfT O.~11lCVLA& No. A-110
"_aMENT 8T...JOIl....OS
1. Th~ ..ttachm.nt pro"'ldes standarcla for
use by rec!plenLS In eetabllehlnc procedures
lor the procurement of supplies, equipment.
cor.structlon and other .eMIC" with Peder&!
tUllds. Theae standard, are turnlahed to en-
sure that '\lch matertals and serYlcn ..re ob-
tained In an effective manner .nd In eom-
pll"nce with the pro...ISlons of appllc"blc Fed-
er.1 I a..' and execuT.I...e orden. No addltlon..1
procurement standards or requirements shan
be Impoaed by the reder,,1 .ponsorlnS agen-
clrs upon recipients unle.. specll\cally re-
q\llnd by l"ecIeral stAtute or ell.cutl...e orders.
2. The standuda contained In this at~ch-
ment do not rellege the recipient 01 the con-
tr..ctual responsibilities a.rlslng under Ita
contracl&. The recipient Is the r...pon~ble ..u-
thorlty. without recourse to the rederal apnn-
sorln!: "Sencr re"Afdlng the settlement "nd
.ntl.:..ctlon ot ,,1I oontrlLCtu,,1 and ..dmlnlJ,-
I
A-110:21
~r"Uu la.u.. arising out ot prllcurementa
ent..red Inlo, In lupport 01 .. graat or olher
Aj:reem..nt. This Incl.d.s dl~pute., clAIm.',
prole..l.I ol A....ard. OO\H'''' ey"lu"Uon or oU1Pr
m"UeMl ot " eontractua. n,,~ure. M"Ul'MI con-
cprnln" Ylolntlon 01 I.... ..ro \(l be referred 10
s\lch loc..l. S\ate or rederal authority... may
have propn )\Irlecl\ctlOn. .
3. Reclplenl.S may- .... Ihelr own procure-
ment pollcle. and proced\lr.... no,,'ever, all rp-
clplenl.S .h,,1I adhere to In' standarda .e~
lorth In para~r"phs 3 And ~.
II. The reclplenl .h..ll ml\lntaln a eode or
stand"rc15 01 conduct th..t shall Ilonrn the
performnnce of ". otncers, employra or
acents en\:a\:ed In the IIwardlnl;: ""d IIdmln-
lstflltlon 01 conIc-ACts \Ising I"edernl fund".
No employee. omcer Of' agent shall partiCipate
In the .electlon. IIw"rd or I\dmlnlstra~lon ot
a contr"et In ..hlch J"ederal CunCla are \uoed.,
where, \0 hi. Itnowledse, he or his Immedl"te
lamlly, partnen, or organlZl\tlon In ....hlcl1 he
or hla Immedll\te lamlly or partner has a
I\nl\ntlal Inlere.t or ",,'Ith whom he 15 nego-
tl..tlng or 11.... I\ny- ..rrangemcnt concerning
pro.l'f'Ctlu employment. The reclplenta' of-
I\cera, employ.es or agenta shall neither solic-
It nor ..oc.,.t g-ratultl.... C"vora or IInythlnt;
01 monetary v..1ue lrom contr"ctors or poten-
Ual contractors, S\lch standards .hall provide
for disciplinary actIons to be IIpplled tor 910-
I"Uons 01 such. st..ndards by the reclplenLS'
omcen, employees or llf:entll.
b. All procurement transactions sh&!1 be
conducted In . mann", to pr091de, to the
.m..xlmum extent pnctlcal, open and tree
competition. 'nIe recipient should be ..Iert
to ~nlZ&t1ona.l contncta ot In""rest or non-
oompeotltlye practices among oontrACtors
that may restrtct or ellm.1oa"" competition
or oCb.erw\M I"elItra.\Il t.rN1e. In or<1er to en-
sur. ObJecUye contJ'a.ctor pertonn"ncll and
eliminate untaJT coonpetlU.... ad9antAg., con-
trn.c:llOr3 thAt deye\o1) or dMlott speclnc"Uons,'
reqwremenu, _t.em.nlll of worlc, In~ll.a-
UOM for bids and/or requee't.a lor proposals
sh~ld be excluded tl"ODl c.oat;lCtlng for fu=
precurementa. A_raa IIIs&1J be ma.cle to the
bldd.ef /otreror whoae bll1/oll'er Is rlllSpOnal~e
to the 'eollcltatllon W)/1 III lDOSt act...a.n\oaiCOUll
to the reclJ>>ent., prtce and other lacto"' oon-
sldered. Sollcltatlo.' a.ba.11 clee.rly set tortb
aU reqwrementll thAt el. bidder 10tIfIf'Or muat
tuU\l1 In order for hie l*l/otler to be e.....lu-
ated by- Obe reclplen". Any and &!I bld3/oll'en
may be reJ.c\ecI ""hen It Is In t~e rec:lpunt's
Inur.st to cto 80.
c. All reclpl.nta ..nail ...ta.bllsh p1'OCUl'e-
anent proceOw'ft t.b61 pt'OyIQf lor, at a aun-
Imum, the followl~ J":OOCcIurao.lTequlrementa.
(I) PY-oposecI pr~.ent a.ctlozu shall
10110" a proe.ed.ure to _ure the aYoidAnc.
ot purchMlng unn_y or ctupllcaUge
It.ems. "'b.re approprt&.., an Analytlls shall
be rna.Oe or Ie... and pUI'e.hue, ,.)~natlyu
IlO det.ermlne "hldl wouJ4 be th. II'\QIt
ellOnorNo&l. pr..ctlolU pt'~ment.
(2) &ollcltl&tlona lor rooae and sel'T1Ces
.hall be 'b&aell upon a e"'l.I' and accurate
d...eTlptton of 1II\e 'lIClbn*<:s1 reqwrementa
ler \I1e ...."""1..1, prodvet or ~Icc to be
procured. Such a d_\p\4On sn.wl not. In
corn.peUtlye pl"OeW'em.nu. eon\&ln l..tur..
which unduly r..'Met com.peUtlon. "Br..nd
na.m. or eqUAl" descr\1)tlOru """1 be used
.. a me..ns to Genne the per1ormanoe or
other a.all."t reqUlrenoencs oC a procW'ement.
..nd when eo \I..c1 the .?Klnc leatures o~ ~he
n"m.a Dn.nd wllk:h must be met by blddenl
oner:lr5 shall be clee:ly apedl\ecI.
(31 poslthe efforta ~h,,1l be mMte by the
reclplenl.& to utilize .m,,1I bU81neM ar>d mJ-
norlty-owned bualn_ sources ot supolles
and ~''''I(\e'. Such effort.s ,hould ~Io"" thel'<<
sourct& the maxImum t....lble opportunity
\.0 co",p.\e lor con\rac\a utilizIng Feder&!
CunM.
(~) n... t;'l)e oC proeurlnF: ltutrumenta
u.ecI. 0.1:., lilted price oont"'-CU,. ooet re\rft-
I
Office of Management and Budget Circular A-110 (7/30/76)
burSA<ble contracts. purchR.Se oraers. ln~n-
tlve contracL.~. sll ILl 1 ~ dcl.Crml.l'lea br Ule
rf'Clplent but mll.'.t be 1I.1'l'T'<'prla.tc ror the
J""rtlO\IIn.r procurement a.nd tor pr<>mntlnr,
the best Inl.Croot ot Ulr prol.!'rl\J1l Ilwol,'ca.
The "cost_plw-n-pen:enLaj;e-<>l-(;()St" melJt-
0(\ 01 conLTl'oCt.lng shAll 1I0t be useQ.
(5) COntrl'oCL.~ shnl be mAC1e onl}' with re-
sponsible contrl\Ct.oMl who pu_ Ule po-
tentlonn.! o.blllty t.o perlorm SlIC:CC3Afully
under the t.em1.~ ~nd conditiOnS ot A pro-
posed procurcmcnt. Conllldera.t1ol1 MILII be
lllvcn t.o sucll \1\Atl.crs a.~ cont.I"nCt.or InteGTlty.
rl'OOrd ot pa.st pertornuulce, RnnllclaJ Rna
t.eellnlCl\l re.'>Ourcr:.s or a.ccCftSlblllt)' to oLller
ncce~y rcsonrC"-cs.
(G) ^II propo"ca sole $Ource conlrnets or
,..-herc only one hid or propo:;l\l Is recclvea
In ,,'hioh LIle l4:!:rC1:'1\te eltpcndll,ure IS ex-
~l.Cd V> exceed '':;,000 shlLII \,)e subject 1.0
prIor ..pprovnl n.L thc dlllCrel.lnn of lJ\e Fed-
erl\l sponsorln~ lI.{:ellcy.
(71 Some torm ot price or coot lU1lI.h"SLs
shoula be mnde In connection with e~erl'
I':'ocurement acUon. Price II.nalyslS mAY be
accomplls.hed In "o.rlous ""n~'.\, Includln!: Ute
compul50n of price quotnlJons s\lbmlttea.
mnrkct prices o.nd similar Indicia. tol.!'e!.her
wlLll d.1."\Cll'lunts. .Col\t a.N\J\'5Ls Is lJ\e review
r.na eVRI\1dl.tlon ot CAc.l1 eiemcnt. ot c:oA t.o
ael.Cr.nJne roasona.blen ess. allocaDlllt\' a.na
&1lo_b11lty, .
(8) Procurement recorda and RIllS tor pur-
cha.ses In excess ot UO,OOO &ha.n Include LIle
tcllo"'~~:
(a) BaalS tor cont.re.ct.or selection:
(b) Justl.o.ca.tlon tor Ia.ck of competltlon
"'hen cont'pelJtlye bids or olTers &:'e not.
oblA'ned.;
(c) Ba.sls for a.wlU'd calt. or price.
(9) A S)'Stllltl for con t.n.ct a.cImlnlst.mt.lon
ahall be mA1nl.a.lned t.o ensure c:tlnLTactor
conformance wltA t.erms. conditions o.na
spectftca tlona ot the con tT1LCt. o.nd to ensure
a4eq\l&~ a.nel t.1m<=ly followup 0: &II pur-
cha.ses.
~, The recLplent sha.1I InclUde. In a4elltlon
to proymlons to deftne a. sound ane c:tl~let.e
'a.b-eemen.t. t.be tollowlng pronslons In a.1I
contra.ct.s. These proVisions shs.lI also be a.p:
plied t.o subcont.rl'oCtlI.
a. Cont.nl.Ct.s In excess ot &10,000 shall con-
tain c:tlnt~:.ua.1 p~o''1:IlOns Ol' condlt.lons
:.no.t wm eno"" tor R4nUnlGt.rat.lvc. con;n.c-
l:Uo.l 0'1' leg..1 romC'clJcs In Instances In "''11lch
contrs.ctors vlols..1.c or breAch contrB.Ct tenns,
Rna provIde tor such reznedla.1 s.ctlons LI
m&y be s.ppT'Oprla.l.C.
b. All contrn.ct.s In excCS3 ot "10.000 shAll
conllll.ln sult.a.ble pm,'lslons for l.C:-mJn....Llon
by !.he rcclplent Including :.ne mann~ b,'
"'hlch termJna.tJon ~'III be elTect.ed a.nd !.he
bR.sLs tor settlement. In additIon. suc.'1 con-
t.nl.Ct.s ShAll describe condl\.lons under ~.rtlch
I
A-110:22
llon.~ (29 eFR. PAr\. 5). Undt'r "ec\.lon 103
lot Lhe Act. "I\ch COIIUnCLor shall be reo
'1"I....d 1.0 rompllLe Ule wl\!:e!\ of e\'ery Ill...
chAnle Rl\d Inl>urer 01\ Lhe blL"ls ot n "Landnrd
wurk dR~. or Po hnu~ ,uld a ~t.nndILrd wurk
week ot 40 hours. Work III exee.ss of the
st:l.lldard "'ork<la~' or workwel'k 1:1 l'er",I"'~I\')le
Jlrovlded UI..L \.he ""orker Is compel\sl\Led at a
rRLe or not less \.hlUl' 1 Y2 Umes Ule \,)Aslc
r"te ot PRY rur RII hours wurl:ea ill excess
ur 8 huurs in nn~' clLlella'" aA~' ur 40 huurs
In Lhe "'.ork....eek.. Sectloll 107 ot Lhc ACI IS
RPI,IIe:able to eons\.ruc\.lon work Mid pruvldes
LhnL no laborer or me:chRllic shf\1l bo: rC'1\11rea
t.o work III surroulldlllS!\ or IIllder wurk 111(;
ru"dILlon" ,,'hlch nrc ullllanl\.nr)'. h:\?~'1rdoll"
IIr <lalll:l'rOIl5 U. his hef\lth ""d IIlLletl' 1\" d('-
horlnUu!'d under consLrur.t.lon SR(Ct.y '\lld
h"I\I\.h "LRlld:\ra" prol1lulJ:f\ted by Lhc Seerl'-
LAry ot LAbor. The,;c requirement:; du "01.
"JlI,I}' 1.0 Lho: purchl\Ses ot 5111'1'111''' or "'''te-
rillls or "rlldes ordillf\rlly f\vhllf\ule on Llle
OpCII ""'rkeL. or conLracts ror \.rlLnspur\.o.Llon
or tr""llml~"OI\ of Inl.I'I1II."Cllce.
h. C<>nlrAe:t.~ or al(reemenl.s. Lhe Jlrlllclpal
purJloRt' of. ",'hlch I._ to cre:o.Le:. de\'clup or Im-
prove products. proccr..~c:s or ",e:1.h()(l,;: or for
eltplor..Llon Into fields \.haL alrectl~. coneern
publiC heRILh, so.feL)' or weltare:: or contTllcts
In the tleld of sclene:e or \cchnolog)' In whlett
Lhere has been little ~,,:nHicant experIence
oul..<;lde of work funded b)' Fedeml "-'<.Ill"t-
Rn~. "hall contRl1I R nOLlce LO tile ellcct .that
the oonLTACt It\A~' be I.Cmllnn.t.ed for default
a.; ,,'eU M conulLlons whe:rc lhe cOlltrl'oCt "'''Y
be tt'rrnln"\t'a bccn.l."e or oln:llln.sll\nc~ \>e-
yund the CQlltrol ot lJle oont.rAct.or.
e:. In all eont.rRcts tor con._LT\letion or fa-
c.lllLy Improvemenl A",'a.rded tor more than
"loo.OOll, rCClplenL& shAll observe !J,e bona-
Ing requlremenla pl'oV\dea 111 At.wc.lunent 1l
to LIlIS cln:ulu.
d. All c:ontrllC\li R",arded by I"eClplent..~ ana
LIlelr ount.nlCl.oTJI 0'1' subi:Tnnt.ecs hawing a
value ot more thAn SIO.OOO. ShAll conlAln ·
pro\'lslon requlrU1G c:nmpllanee "''1t.h Exccu-
live Order 11246. entlWed "Equa.l F..ml'loy-
ment Oppor\.unlt}.... as amellded b)' Executive
O~aer 11375. and as supplemenl.ea In DcpRrt-
nll'nL of Labor reGulR\.IOIlS (-II crn, Iwt GOI.
c. All contrac\a Ilna suh!:rf\nts In eltCl:$~ of
'-2.000 tor conSLructlon or re:palr aWRrdea hl'
rcclplents Ana subree:lplen-lJl "hRII Include a
provision for e:ompllllnce "'Ith Lhe Copcll\lId
"AnLl-Klck Bllck" Act (18 U.::i.C. 874) as
supplen,enLea In Oepartment of Lauor
regulllLlons (29 CFR. Pf\rt 3). ThLs Act pro-
vlaes thaL each contractor or subgrantee
sho.lI be prohlbltec1 from Inducing, by any
mea.ns. any person employed In the e:Oll."true-
tlon. compleLlon, or repa.lr of public ",ark. to
give up An)' part. ot \.he compensa.tlon to
"'hlch he Is otrterwlSe entl\.led. The..RCtfItent
ShRll re port 1\.11 susJ)Ccted 01' reported. \'kltB-
tlona to the FederAl sponsoring &.gency. \
t. When required by the: Fec1eral proll'rRml
legislation all construction cont,ia.ctai mAtLers rcgardlnc rights t.o Inve:ntlons f\nd
.warded by the- reCipients and subrectplen\.s rml1terlals genero.tea under the contrf\ct or
of more !.han ~2.000 sha.ll Include a. p,ravlslon : Il!:reem~nt \Lre "ubJect to trte regulo.tlOn!\ IS-
tor cornpllance ""ILIl the Oa.vls-Ba.con Act (40 " suea b~ the Feaernl spnnsorln!: f\l.!'ency nnd
U.s.C. 276a, to 11-7) and as supplemel>oled by the recipient. Thc con~rf\Ct.or shall bt' "d-
nepartment ot La.bor regula.UOns (211 crn. vl!:ea l\S to ,lJ\e source of f\ddltlona.1 Intorma-
Pl\rt 5). Under t.l11s Act contractors sha~1 be Ion re!:lU'd.ng these 1l1A\.l.Cns.
required to pay__ ",:a.gcs..co lAborers a.nel me- I. All ne(;otlal.Cd e:onLTlLots (except those
cha.nlCll a.t a raloe 'not less t.hAn !.he mini of $10,000 or less) ""'I\rded by ree:lplent.s
,,'ages speclfted In a "'a.ge aetermlna.Won ma.de shall lncluae " provision t.o tbe: efTecL that
by.the Sccreta.ry ot Labo" In ac1ellt.lon. con- the recipient. the Federl\l spon.'IOr\ll(; agency.
tra.ctoJ'S sh&11 be requlrec1 t.o pM' wages not the Comptroller O~!neral of the United StRI.cS.
less t.han once a weelt" The reCipient. sho.lI or "ny of If.helr auly aul.horl?.cd represl!nc.a-
pla.ce a copy ot the current prevailing ",ase LIves, srtlLll hAve acce.$ to a.n,'" books. aC)cu-
determlnatlon Issued by t.he Oepa.rt.ment. ot ments, po.pers ana recoras of the contrActor
1..a.bor In ead1 SOIlCIt.At.lon And t.he a.wo.ra which a.re alrecUr pertinent to a 6peclRc pro-
ot a contra.ct shall be condl-tloned upon the l;T'f\m for the purpose af mo.klng Rudlt.a.
acceptance of trte ....a.:e deteTmlna.tlon. The eltRmlnRtlons. cXa!rp\.s and \.ro.nscrtptlons.
reelplent. shall report aJl suspected O~!'e- J. Con,tracts Ana subjt!'an.\.s of a.mounts In
ported vlolatlolU to the Federal sponsoring excess o. $100,000 sha.ll conta.ln a pro\'lslon
agency. tha.t requires the recIpient to "!tree to com-
g. Where Appllca.ble. a.1I cont.ra.ct.s aWArded ply "'I~ all AppliCAble sta.ndlU'as. oraers or
by reclplentl In excess of %.2.000 for construe:- ~ul,,"I,~ns Issued pursuant t.o the Clear All'
\.Ion conotra.cts ana In excen ot t2.500 tor Act of .. 70 142 U.5.C. 1857 et se~.) ana the:
other e:ontrac\.s tha.t Involve the emplo)'ment Federa.l Wa.Ler Polltlt!on Contr"1 Act 133
of mee:rtanlcs or la.borers. shalllne:lude a pro- US.C. 1251 et seq.) I\S o.mended. ,vlolo.tlOns
vISIon for compllane:e ",'Ith see:tlons 103 and shRIl be ret)Ortec1 to the FederRI sP9nsorln;;
107 of t.he ContrACt. Work Houn Rnd Satety l\lleney aoa !.he Relrlonal 6lmc:e of Lrte 1;:D-
StandRras Act r~o US.C. 327-330) a.s sup- ,'lrOnment..1 ProtectIon Agency.
ple:mented by Oepa.rt.meDot. 0: Labor regula- IFR Ooc.7&-21904 l"Iled 7-29-76:8:45 a.rill
I
APPENDIX H
OM!
Circular A-122
.1-
..
I
Office of Management and Budget Circular A-122 (6/27/80)
OFRCE OF MAHAGEMENT AND
BUDGET
Clrcutar A-122, "Cost Principles for
Nonprofit Organizations"
AGENCY: Office of Management and
BudCet.
ACTION: Final Policy.
lune Z7. 1!IOO
To The Heads of Execulive
Departmer:ts and Ealnblishment8
Subject: Cost principles for nonprofit
organizations: .
1. Purpose. Tnis Circular cstabli:ihe8
p,rinciplo:lll for delermining costs of
!:ranls. contrHcls and olher agrclementll
with nonprofil organizalions. 11 docs nol
apply to colleges and univcrsities which
are covcred bv Cirr.ular A-ZT: Slale.
local. aud fe.dernlly recognized Indian
t!'ibal governm('!nts which are covered
b:t Circular 7.;....4.: or hos;:itllls. The
principles are desi~ned to provide that
the Federal Government bear its fair
share of costs excel'll where restrit:ted or
prohibited by law. The principles do not
aUempt to prescribe~the extent of cost
sbari::g or matching on'grants. cuntracts,
or other agrecmcl:ts. However, such cost
sharing or matching shall not be
accomplished through arbitrary
Iimitatior:s on individual cost elements
by Fede1'3l agencies. Provision fer profit
or other increment above cost is outside
the scope of this Circular.
Z. Sl.:persession. This Circular
l'upersedes cost principlCls issue-i by
individual agencies Cor non'profit
organization.
3. Applicability. a. These principles
shall be used by all .Federal a!lcncies in
determining the .costs of work periormed
by nonprofit orgAnizalions under gmnts,
cooperative a~reements, cost
reimbur::ement contrac:ts, and other
contracts in which costs are used in
pricing. administration. or settlement.
All oC these instruments are nereaCter
referred to as awards. The principles do
not apply to awards under which an
organization is not required to account
to the Government Cor actual costs
incurred.
L. All cost reimbursement suhawards
(su~grants, subcontracts. etc.) are
subJect to ~hose Federal cost prinCiples
applicable to the particular organization
concerned, Thus, if a subaward is to a
nonprofit organization. this Circular
.shall apply: if i suba ward is to a
commercial organization. the cost
principles applicable to commercial
concerns shall apply: Ha subaward is to
a college or uni\'ersily, Circulur A-21
~hall so)'"!l\': if a ~tlbR\\'i!rd i~ \(1 R S:illr..
local:or CedeJl81ly.reoriplized Ind.lani
tribal government. Circular 7~ shall
apply,
4. Definitions. a. "Nonprofit
organization" means any corporation,
trust. B'Ssociation. cooperative, or other
organization wlUeh (1) ia operated.
primarily' for scumtific, educa tional
service, charitable. or similar purposcs
in'the public intere!!t: (Z) is not
organized prinlarily for profit: and (3)
uses its net proceeds. to maintain.
Improve. andlor expand its operations.
For this purpose. the term "nonprofit
organization" excludes [i) colleges and
universities: [ii) hospitals: [iii) State,
local. and Cedera!!y recognized Indian
tribal governments: and liv) those
nonprofit organizations which are ,
e:-ccludcd from coverage oC this Circulllr
in accordance with paragraph 5 below.
b. "Prior approval" means seello.;ng
the awarding ager.cy's permission in
advance lo.incur cost for those items
that are de:!ignalt:d as requiring prior
approval b)' the Circular, Generally this
permission will be in writing. Whcre <In
item of cost rl'!q'Jiring prior approval is
speciiied in the budget of an .award,
approval of the budset constitutes
approval oC that cost.
5. Exclusion of some nonprofit
organizations. Some nonprofit
organizations, bec.ause of their size and
nature of operations. can be considered
to be similar to cOlTlmercial.conccrns for
purpose oC applicability of eost
principles. Such nonprofit organizations
shall operate under Federal cost
principles applicable to commercial
concerns. A listing of these
organiza lion. i. colluined.in.
Attachment C. Other organizaUonB may
be added from time to time.
6. Responsibilities. Agcllciea
responsible for administerU1g programs
that invoive awards to nonprofit
organizations sball implement the
provisions of this Circular. Upon
request. implementing instruction shall
be fW'Diabed to the Office of
Management 1I.ld BudgeL Agencies shall
designate a liaison oCficiallo serve as
the agency representative on matten
relating to the implementation of this
Circular. The name and title of such
representative shall be furnished to tbe
Office of Mana~ement aDd Budset
within 30 davs of the date of this
Circular, .
7. AttDchmenl.s. The principles and
related policy guides are set forth in the
following Attachments:
Attachment A-General Principles
Attachment B-Sclected Hems of Cost
Attachment C-Nonprofit
OrganizatioD.S Not Subject \p This
Circular .
.1
A-122:1
8. Requests for exceptioJls. The GUice
of Management Bnd Budget may grant
exceptions to the requirements of this
Circular when permissible undr.r
existing law. However, in the interest of
achieving maximum unifomlitl'.
exceptions will be permitted only in
hiShl~' unusual circumstances.
9, Effective Date. The Ilrovisions of
this Circular are effective immedialely.
ImplementAtion shall be phased in by
incorporating the provisions into new
awards made after the start oC Ihe .
organization's next fiscal year. For
existins: Bwords the new principles may
be applied if an organization and the
cognizant F.ederal agency agree. Earlier
imI1lementation. or a delay in
implementalion of individual pl'U'ris\om
ill also permitted by mutual agreement
between ;10" organization and the
cognizant Fcderal agency.
10. inquiries. Further information
concerning this Circular may be
oblained by contacting the Financial
Managemcnt Dranch, Budget Review
Division. Office of Management and
Dudget. Washinglon. D.C. 20503.
telephone [ZOZ) 395-47i3. -
James T. Mcint~'re. Jr"
Director.
(Circular No. A-1ZZ]
Attachment A
General Principles
Tobie of Contents
A. Basic Considerations
1. Composition of lotal cosll
l. Factors a{fecling allowB'bility of Cosls
3, Reasonable costs
4. Allocable costs
5, Applicable credits
O. Advance underslandings
B.Direct Costs
C. Indirecl COSIS.. 'I
D. Allocation of lndirecl CoslS ~d'
Determination of indirect Cosl Rales
1. Cen'!ral
Z. SimpIiIied allocation method
3. MlIl1iple ll11ocation base method
4. Diii!ct allocation method
s. Special indirect cost ntes
E. Negotialion and Approval of Indirect Cost
Rates
1. Definitions
Z. Negotiations and approval of rates
(Circular No. A-1Z2]
Allachmeot A
Geocrnl PriDcipl'Js
A, Dosic Considerations.
1. Composition of,t(lUlI costs. The lolal cosl
of an award is the !111m of the allowable
directnnd allocable indirect costs less aoy
applicable credils.
2. Fru;loN oLfCClin~ cJ1u...obilily of COSIS.
I
Office of Management and Budget Circular A-122 (6/27/80)
To be allowable under an award, costs ITtO$t
m~t the following general criteria:
a. Be reasonable for the performance of the
award and be aUocable thereto under these
principles,
b. Conform to aD)' Iimilations or exc1u.ion.
.et forth in lhe.e principles or in the aWllrd
a. to I)'pe. or amoWtt of cost.uenu.
c.Be co.osislc{\t wjLh policics and
procedures thot apply uniformly to bOlh
lederall}' financed and other llctivilies of the
or!lanization. .
d. De accorded consistent treatment.
e. Be determined in accordance with
generally accepted accounling principles.
f. Not ue included as a cost or used to meet
cost sharing or mal.chilltl requiremonts of any
other federally financed program in either the
current or !t. .prior period. .
C. Be adequately documenred.
3. Rp.osunoble cosis. A cosJ is rplSonuble
if. in its nnture or amount. i(does not exceed
that which would be Incurnd by .a preaent
pl!rson under the circumslMlces prevailing at
the lime the decision was made to incur the
costs. The question of the re3sonablenen,of
specific costs must be scrutinized wilh
particular care in connecticm with
organi:ations or separaie di...isiotlS thereof
which receive the prepondera.'1cc orlbeir
support from awards made' by F ede.ral
agencies. In determining the r!8Sonableness
of a given cost. consideration shall be given
10:
a. Whether the cost is of a type generally
recognized as ordinary and necessary for the
operation of the organization or the
performance of the award.
b, The reslraints or retJuiremenls impased
.b~' such faclors as generall)' accepted sound
business practices. arms length bargaining.
Federal and Slate laws and regulations. and
terms and conditions of the award.
c. Whether the indivld8:aIs'.concemed acted
....i1h prudence ir. the circumslanceS.
considering their responsibilities to the
organitation. its members, employees. aDd
clients. the public at large. and the
Government.
d. Significarit deviations from the
establishedpraclices of the org:Jnization
which may unjustifiabl}' increase the award
cos Is.
4. Allocable costs.
a. A cost is allocable to a particular cost
objecth'e. sue!: as a grant. project. eervice. or
other activity, in accordance with the relative
benefits received. A cost is allocable to a
Government award if it is treated
consistently with other costs incurred for the
same purpose in like circumslances and if i.\:
(1) Is intuITed specifically for the award.
(Z) Benefits both the award and other work
and can be distributed in reasoDable
proportioD 10 the benefits received.
(3)ls necessary 10 the overall opera lion of
the organization. although a direct
relationship 10 any particular cost oujecliv8
cannot be shown.
b. Any cost allocable to a particular award
or other cost objective under these prinr:iples
ma~' not be shifleclo other Federal awards to
overcome fundins deficiencies, or to avoid
reslrictions imposed by law or by Ihe lerms
of ihe award.
5. Applicable credil.'.
a. The lerm applicable credits relers 10
those receipls, or reduction of expeDditures
which operate \0 offset or reduce expanses
items Ihal ere allocaule \0 awards as direct
or indirect COsls. T)1lical examples of such
tran!octions are: purchase discounts. nlbaleS
or allowanr.cs. recoveries or indemnities an
losses. insurance refund., and adjustments of
overpaymenls or erroDeou ch8l1le.. To the
elttent thai such credits accruing or received
by the or!lanization relale to allowable cost
Ihey shall be credited 10 the Government
either as a cost reduction or callh refund as
appropriate,
b. In some instance.. the amounts received
form the Federal Government to finance
orgal1iUllional aClivitiee or service operations
should be tresled as applicable credits.
Specifically, the concepl (if netting such
credit items against related expenditures
should be applied by the organiUlton in
detsmins the rnte. or amounts 10 be
organiUlt:on in delermining the role. or
amaounts tobe charged to Federal awards
for services Tendered whenever the facilities
or other resources used in providing euch
. services have been financed directly. in
whole or in part, by FederaJ fundlh
a{c) For rules cO"o'ering program income
(i.e.. gross income earned from federally
supporteCl activities) see Attachment 0 of
OM13 Circular A-ll0.
6. Advallce and undenlandings. Under any
giveri'award the reasonableni!ss and
allocability of certain ilems oJ cosls may be
dimcuit 10 determine. This particularly true in
conDecti~~ with o~WltiOftl thalreceive a
preponderance of th~r support from Federul
agencies. In "Order to avoid .ubaequent
disallowance'or dispute based on
unreasonableDe$S or nonaUOcabilil..., It is
often deSirable to seek a wrilleil agreement
with the cogniUlnt or awarding .alencY in
advance of the incurrence of special or
unusal costs. The absence of an advance
a!Z"llement on any element of cost will nol. in
1I1Ielf. aUectlhe reasonableneSl or
aliocability of that element.
3, Direct Costs
1. Direct costs are those that can be
identified specifica!!y with a partie-.liar final
cost nbjcc\ive: 1.a.. a particular award.
project. service. or other direct activit}' of an
Cflanizalion. However. a cost may not be
assiqnee! to In award as a direct cost if am'
oiber cost inculTed for the same purpose. i~
like circumslance. has been allOf".ated to IIn
awerd a5 an indirect cost. Cost identified
s;leciflcall)' with awards are direct cost of the
a,,'ards end are la be assigned directly
thereto. Cest identified specificaliy with olher
filial cosl objectives of the organization are
direct costs 01 those cost objectives and are
not to be assigned 10 other awards diTectl~' or
ir.directl\'.
2. l,.ny'direct cost of a minor'amounl m:lY
be trealed as an indil".!ct co~t of or reasons nf
pruc:icaHty where the account treatment for
such cost i. co:'.sisll:nlly applied 10 :III finlll
cost object hoes.
3. The cosl of certain acth'ilies are not
allowable as charges to Fedclal awards (see.
lor cXll:":'lJlle. fund raisin[: costs in parilg~:JJlh
.1
A-122:2
21 of /\I\achment B), However. even thongh
these COlli. are unallowaule for purposcs of
computing chorgce to Fedcral awards, they
nonelhelelll musl he treated u direct cost for
purposes of delerminin!l indirect cosl ratcs
and be allocated their share of the
organization's indirect cosls if they rcpresent
acth'illeswhich (1) include the salarics of
pcrsonnel. (2) occupy spice. and (3) bcnefit
lrom Ihe organization's indirect costs,
4. 1ne costs of activities performed
primnrily as a service 10 mcmucrs, clients, or
lhe gr.ncral puulic when sillniIicant And
ncccssary to Ihc orgonization's mission muat
ue trealed a. direct costs when or nol
allowable Dnd be allocnled an cQult:Jhle
share of indirtlcl cosls. Some examples of
these types of activities include:
II. MlIinlenuncc of membership rolls,
suus<-.riptions, puulicalions. and related
lunclions.
b, Providing services and information tn
members. legilllative or adminiSlrative
bodics. or the public.
c. Promotion, lobuying. ond other lorms of
puuiic relations.
d. Meetings and confercnccs eltcept thosc
held 10 conduct the generaladministrillion of
the organiUltiol\.
3. Mainlenacne. protection. and investment
of special [unds not used in operation of the
orgunization.
f. Administration of sroup bencfits on
behelf of members of clients including life
.and hospital insurance. annuity or retirement
plans. financial aid. etc.
C. lndirect Cost.
1. Indirect costs are those that have been
inc::rrcd [or common or join I objectives and
cannot be readii)'. identified with a particular
final CDst o\.jective. Direct cost of minor
amounts ma\' be trealed as indircc\ costs
undcr the clJ~ditions described in paragraph
n.z. au!)"e. After direct costs have been
det~rmill(!d and assigned airectly 10 awards
or other work as appropriate. indirect costs
Ill'! those rerr.:oining to ue allocated 10
benefiting COl', oujectives. A COIl m:o.y not he
allocaled to an award as an indirect COllt if
,Ill}' othp.T.co&t ineu~ for the iara.e purpose.
in like circumatances. .has been aslli~ed to
an If,,,:ard as a direct cost. :
Z. Because of the diverse characterislica
Rnd accounting practices of nonprofit
c;ganizations. it is not possible to specify the
lypflS of cost which Dlay be classified III
inrii~ct cost in allsiluetion. However, typitltl
uamples of indirecl cost for many nonprofit
organizations may include depreciation or
use allowance~ on buildin!!s and equipmcnt..
the cosls of operating and maintaining
f"cililies. and general admiaistration and
g!'ne~l!.l expenses. slIch sa the salllCies and
eJtrenses of executive oIncen. personnel
adrr.inistration. ana ac:ounting,
D. All,'cation of Indirect Cost and
Drtemli."Iation of lndirect Cost Rut~s,
1. Generol.
a. 't\'here a nonprofit or!!anization hilS only
one n:lljur function. or where ail its major
functions bcnefil from its indirecl costs to
ai'prn>;imately Ihe slime dC!lrl'e. the
l!llocr.lion of indi:ecl COllis and the
. I
OffIce of Management and Budget Circular A-122 (6/27/80)
lWIIlputation or an indirect cost rate IUf be
acamplished throu!lh simplified allocation
pnteedure. as do.cribed in para8"aph Z
baow.
b. Where an orBanization ha. several major
fuaction. which beneCil rrom it. indirect co.t.
iD Yat)'ing degrees. alloca tion or indirect
casls may require the accumulation or .uch
caalllnto separate cost groupings which then
ate allocated individually to benefiting
fUnctions bv means of a base which best
mlt8sureS the r'llntive degree of benefit. The
imllrect costs &lIocaled to ench [unction are
tbaa distributed to individual awards and
adl., activities included in that dunction by
mean. of IlD indirect cost rOle(s).
c.. The determination:or whal constitutes an
aqzaninlion'. major functions will depend on
ill purpo.e in bein!;: the types or services it
renders to the public. it. clicnl5. nnd il,
memben: Dnd the ItmOllnt of errorl /I devotes
IO,mch acliviUes 08 fund raising. public . .......
iaIurmation and membership octivities.
do Specific method. for allocating indirect
casts and compuling indirect cost roles along
with tbe conditions under which each method
should be u.ed are described in paragraphs Z
t!trough 5 below.
e. The base period for tbe allocation or
indinCi costs is tbe period in which sucb
cos.t. are incurred and accumulated for
tilaealion wo work performed in that period.
Tha base period nonnall)' should coincide
with the organization's fiscal year. but in any
e'Vnt. shall be so selected If to avoid
tn.qWties in the allocation of the cosls.
%. Simplified oJ/ocolion method.
a. Where an organization'. major functions
b.enefit from its indirect costs to
89proximatel)' the same degre. the allocation
Qf indirect costs may be accomplished br (i)
eparaling the organization's total costs for
the bue period as either direct or indirecL.
-c (ii) dividinll tbe total allowable indirect
CDstS lnet of appiil'.able credils) b)' an
~uttaule distribution bue. The resull or this
process is an indirect cosl rate which is used
tll distribute indirect cosls to individual
ll....;mis, The ra te shouid be e:tpr~ssed 81 the
percentage which the total amount of
allowaule indirect costs bears to the base
seJected. Tnis method should alos be used
where an organization has onl)' one mliljor
function encornpaSllini! II number of
individual projects or acth;ties. and may be
tl$ed where the level of Federal awards to an
orraniulinn is rellltively small.
b. both lhe direct costs And the indirect
cesla shall exclude capaal expenditures and
una:lowable costs. I iowever. unallowable
costs which represent Activities must be
included in the direct costs under the
conditions. described in paragraph B.3. above.
c.. The distribution ban mar be total direct
costs (excluding capital expenditures and
other distorting items. such 'iI major
subcontrlilcts or s:Jb,rar.la). direct selaries
8l'Id wllges, or other base which results in an
equitable distribution. The distribulion base
shall generally exclude pa.tir.ipant suport
costll as derined in paragraph Zg of
Allac:hment B.
c:. Excl!~,t where a ~"I!cia! rele(,) i~
rC'quired in accordance wi:h pllrai!raph 0.5
below, tAe-indirectDJlll T.1e ~loped...d.er
the above prinGipw..~ &AJ)liCllbl.e.1D aU
award. at.the Ol'tI,"liWioa..1J a spoc:ial
rale(s) is required. appropriate modlI'acaliona
.hall be made iD ord81 1.0 develop.the special
ratc(s).
3. Mulliple ollOCOlion btue method.
a. Where an ol"llanizalion's indiroct costs
benefit it. majodunctions in varying degrees.
such costs .hall be sccumulated into .eperate
cost groupings. Each grouping .h.llthen be
allocaled individuall)' to benefiUns functiona
bv means or a bue which besl measures the
relative benefits.
b. i1le groupings shall be estauUshed so 81
10 permit the allocalion of each groupin~'on
the basis of benefils provided to the major
functiona. Each groupin& should constllute a
pool or expenses that arc or like character-in
terms of Ihe f"or-tions they benefilllnd in
terms uf Ihe ulluclllicJIl 11lI/IC whiuh 1mBt
. measura the relalive benefits providd to each
function. The number of separate groupings
should be held within practical limits. taking
into considerutkm the materiality of the
amounts involved and the degree or precision
desired.
c.. Actual conditions must be taken into
accounl in selecting lhe base to be used in
allocating the expenses in each grouping to
benefiting functions. When an allocation can
be made by assignment or . 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 alloc:ation abould be
made through the use or a selected base
which produces reault. that are equitable to
bolh the Government and the orBanization. In
general. any cosl element or cost relaled
factor associaled with the organization's
work is potentiall)' adaptable for use as an
allocation base provided Ii) it can readily ue
expressed In tenns or dollarl or other
quantitative measures (total direct costs.
direct salaries and "'esvs. starr hOUri applied.
square feet used. hours or usage. number or
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
paragrupb 0.5. below, the separate groupings
or indirect C05ts alloc:ated to each major
runction shall be .grellated and treated as a
common pool ror tbat {unction. The costs in
tbe common pool shall then be distributed to
indivisual awan included In thai runction by
use of /I single indirect cost rate.
e. The distribution base used in computing
the indirect cost rate for each runction may
be total diM!Ct costs (excluding capital
r.::pendilures and other distorting items such
ilS major subcontracls and subsrants). direct
~alaries and wages. or other ase whicb
results in an equitable distribution. The
distribution base shall generally exclude
participant support costs as defined in
paragraph 29. Allachment B. An indirect cost
rate should be developed fir each sp.parale
indirect cost pool developed. The rate in each
calle should be stated as the percentage
which the amount of the particular indirect
cost pool is of the distribution base identified
I
A-122:3
with that ~
4. Di~ allocation 71re!hod.
a. Some nonprofit organizations. treat all
costs as direct costa expect general
administration and general expenses. These
organizations generally .eparate their costs
into thre buic categories: (i) General
administration and general expenses. (ii)
fund raising, and (iii) other direct functions
(including projects performed under Federal
awards). Joint costa. such as depreciation.
renlRI costs. operation and maintenance or
facilities, telephone expenses. and the like
Bre prorated indivi8ually as direct cost 10
eDch categoT)' ond to each award. or other
aclivily using a bue most sppropriate to the
particular cost being prorated,
b. This melhod is acceptable provided each
joint cO,st is prorated using B base which
IICCllrnlcly mellllllrr.lI Ihe benr.nl~ prnvirlr.d to
ellch /Iwnru or ulher nc;lIvll\'. '1'1", hllHCH IIlllll1
be established in accordance with rcsonable
criteria. and be supported by current data.
This method is compatible with Ihe
Stnndords of Accounting and Financial
Reparting (or Voluntary Henlth and WeUare
Organizations issued jointly by the National
Henlth Council. Inc... Ihe National Assemblv
of Voluntarv Health and Social Welfare .
Organizations. and the Uniled Way of
America.
c.. Undp.r this method. indirect costs consist
eclusively or gr.neral administrlllionand
genera I expenses, In all other respects. Ihe
organi~alion's indirect cost ratess shal be
compuled in the same manner as that
described in paragraph 0,2 auove.
5: Special indil'ecl cosl rales. In some
instances, a single indirect cost ra Ie for all .
octivities or an organizaUon or for eacr. major
[unction of the organization ay not be
appropriate. since it would not take inlo
account those different factors which may
substantially affect the indirect costs
applicable to a particular segment or worrw
For this purpose. a particular segment of
""ork. For this purpose. a particular segment
or wotk may be that performed under a single
award or it may consist of work under a
group or awards performed in a common
environment. the factori may inClude the
physicallocalion or the work. the lev!![ of
a.dministrative support required. the nature of
the racilities or order resources employed. the
scientific disciplines or technical skills
lnvolved. the organizational arran~ement.
used. or any combination thereof. When a
pnrlicular segment of work is performed in an
environment which appears to generate a
significantly different level or indirect costs.
provisions should be made for a separate
indirect cost pool applicable to such work.
The separal.e indirect cost pool should be
developed during the course of the regular
allocation process. and the separate indirect
cost rale resulting therefrom should be used
pro\'ided it is determined that (i) the rate
differs sil!nificantly from that which would
have been obtained under paragraph 0.2, 3,
and 4 abo\'e. and (ii) the volume of work to
which the rate would apply is material.
E. Negoliotion alld Approval of Indirect Cost
notes.
I
ffic:e 01 Management and Budget Circular A-122 (6/27/80)
1. Dfl{ilritians. As used in this section, the
)Ilowlo& terms have Ihe meanin:;s set forth
claw:
a. "~nt agency" menns the Federal
gency responsible for negotiating and
p~ indirect cost rales lor a nonprolit
rg:anizatliGn on behalf ol all Federal
gcncin..
b. "P1raI.ctennined rote" means an indirect
!Jilt ra,te;. applicable to a specified current or
ItureJilftiod. usually the organization's fiscal
ear. TI'se rate is based on an estimale of lhe
OSI& 10 be: incurred during the period. A
~edetamiDcd rate is not 8ubject to
d i Il81IDelIt.
c.Ta.d rate" mealls an indirect cost role
,hich bas the some characteristic., as a
f~d rate, eltcepl that the dillerence
elWIlUftl the estimated cosls and the actual
!Jst~ cllb period covered by the fale is
arriedi fot"Ward as an adjustmenlto the rale
~pu.IatieR ola subsequent period.
ct "Rnahate" means an indirect cost rate
ppill:aOle to a specified post period which is
ased em I'ke actual costs ollhe period. A
nallrahti8,nol subject 10 adjustment.
L "PMNilsional rate" or billing rate means a
!rnparalI1findirecl cost rale applicable to a
peciOed:periodwhich is used for lunding.
lterim reimbursement. and reporting indirect
tllltscmawards pending the establishment oC
rata: fin:- \be period.
r. "Inditect cost proposal" means the
ocumeDtlttIon prepared by an ol'3onization
) auhstmtiate its claim for the
!imbuneaent or indirect costs. This
ropr:sai pftlvides the basis lor the review
nd nqatiation leading 10 the establishment
l an orgaaization's indirect cost rate.
g. "Cast objective" means a lunction,
rganiza1ional subdivision. contract. grant. or
:her wark unit lor which cost da ta are
esired a/ld for which provision is made to
ccumuia1e and meuure the cost ol
:'llC8SSft,. projects, jobs and capilalized
roled'S.
Z-Neptiatian and approl'al of rates,
a.Uniess diITerent arrangements are
greed tOi by the agencies concerned. the
ederai .gp.nC)' with Ihe largest dollar value
i awards with an ortzanization will be
esigna.te:i as the cognizant allency for the
egotiaticm and approval of indirect cost
5Ies and;. where neeessarv. other rates such
s lrinwe benefit and computer charge-out
lies. Oace an agency is assigned cognizance
)r Ii pcticular nonprofit oraanization, the
sailJllllleGt will not be changed unless there
; a majO!" long-term shift in the dollar volulU
f tbeFederaI awards to the organization. All
om:emad Federal agencies shall be given the
ppm:tWJity to participate in the negotiafion
racau.. but alter a rate has been agreed
;2fm it will be accepted by all Federal
gem:ies. When a Federal agency has reason
) belie'\tB that special operating factors
{fedins:its awards necessitate special
unrec1 cost rales in accordance with
aragraph D.s above. it will. prior to the time
llU'llta arB negotiated, notil)' the cognizant
gmq,
b. Ancmprofit organization which has not
:e"ojaU5l~ established an indirect cost rate
dth a Federal agency shall after lhe
~eaniZ2lion is advised that an nward will be
made and. in no e\'ent. laler than three
months alter the effective dute of the award.
c, Orllanizations lhat have pre\'iously
established indirect cost rates must submit a
new indirect cost proposal 10 the cognizant
agency within six months alter the !;Iose or
each fiscal year.
d. A predetermined rate may be negotiated
lor use on awards where there is reasonable
assurance, based on past experience and
reli:lble projection or the o~ani2.ation's costs.
that the rate is nOllikely to exceed a rute
balled on the organization's nctual costs.
e, Fixed rates may be negotiated where
predetermined rales are not considered
appropriate. A fixed rale. howe\'er, shall not
be negotiated iC (i) all or a substantial portion
of the organizalion's awards are expected to
expire before Ihe carry-forward adjustment
can be made: (ii) the mix of Government and
non-government work at the organization is
too erratic to permit an equitable carry.
lorward adjustment: or (iii) the organization's
operations nuctuate significantly from year to
year.
f. Provisional and final rates shall be
negotiated .whp.ce neither predetennined nor
fixed rates are appropriate.
g. The results ol ench negotiation shall be
formalized in a wrillen agreement between
the cognizant agency and the nonprofit
organization. Tbe cognizant agency shall
distribute copies olthe agreement to all
concerned Federal agencies.
h. if a dispute arises in a negotiation ol an
indirect cost rate between the cognizant
agency and the nonprofil oraanizalion. the
dispute shall be resolved in accordance with
the appeals procedures of the cognizant
agency.
i. To the extent that problems ure
encountered among the Federal agencies in
connection with the negotiation and approval
process. the Office ol Management and
Budget will lead assistance as required to
resolve snch problems in a timely manner.
[Circular No. A-l")
Atlachment B
Selected Items of Cost
Tobie of Contents
1. Advertising costs
Z. Bad debts
3. Bid and proposal costs (reserved)
4. Bonding costs
S. Communication costs
6. Compensation lor personal services
'I. Contingency provisions
a. Contributions
Ii. Depredallon and use allownnccs
10. Donations
11. Emplo)'ee morale. health and 'welfare
costs and credits
1:' Entertainment costs
1:3. Equipment and other capital expenditure,
H. Fines and penalties .
15. Frin!le benefita
15. Idle lacilities and idle capncit)'
17. Indepp.ndent research and development
( reser\'ed)
15. Insurance and indemnification
19. Inlerel't. Cund-raisins. and investment
mnnageml:nt costs
20. La bor re!a I ions c."sts
I
A-122:4
21. Lt'sst"s on olhe: s.....ard.
:::. Maintenance and r'~p"ir costs
23. MOl lcrials /Vld supplied
24. Meelin:;s. conCerencr:s
2;j. Memt.erships. subscriptions, and
proCessional aclh.il)' custs
Z6. OrllnnizlIlion costs
%7, O,'p,rlime. extra.pa)' shift and mullishil'l
premiums
28. Page cha'1lt's in proCessional journals
:9. Parlicipant support costs
J~. Putenl cosls
31. Pension pluns
3Z. Plunl security costs
:33. Preaward costs
34.. Professionnl service costs
36. ProCiIS and loases on disposition oC
depredable propen)' or other capital
sssels
JI}. Public ilUonnalion sen'ice costs
Ji. Publication and I'linting COllIs
:iO. Rearrangement and alteration coslS
39. Recon,'ersion costs
40. Recruiting cosls
41. Relocation costs
4Z. Renlal cosls
43. Royallies ond other costs for ute of
palents snd cop)'rights
44. Se\'er:Jnce pay
45. Specialized service fadlities
46. Taxes
47. Tennir.ation costs
46. Training and education costs
49. Transportation costs
50. Tra\.'l!l costs
[Circular No. A-IZ2]
AlIac:bmeat B
Scl~cd Ilems oC COlt
Para~aphs1 through SO provide principles
to be Olppliad in establishing the ollowubUity
ol certain items oC cosl. These prineiples
apply whether a cost is treated lIS direct or
indirect. Failure to mention a particular item
o( cost is not intended to implr that it is
unallowoble: rather determination os to
allowabilit" in each case should be based oa
the treatment or principles provided lor
similar or related items of cosl.
1. Advenising co~lS. . . ...
a. Ad'/ertising costs mean the costs of .
media '('.rYices and auociated costs. Media
advertising includes magazines. neW$pap~rs.
Mldio and television programs. direct mail.
exhibit.. and the like.
b. The only advenisin8 costs allowable are
those which are ,olel)' for (i) the recruitment
o( personnel when considered in conjunctiOll
.wllh all other recruitment COSti. a.s sct fortb
in parawaph 40;.(iij the procuremenl of goods
and ser\'ices: (iii)lhe disposal or surplus
materials acquired in the penonnanc.e of the
award except when organiz:ation.& are
reimbursed for disposals at a predelennined
amount in accordance with Attachment N oC
OMU Circular A-110; or (i\') specific
.requirements olthe award.
z. Bad dobts. Bad~ebt8. including 1000ses
(whether actual or estimated) arising from
uncollectible account. and other claims.
related collection costs. and relalo':! legal
COllis. arl! unallowable.
3. Bid and propotlai cosU. (rellerved)
4. flvnding Cf1sls.
~,
I
Office of Management and Budget Circular A-122 (6/27/80)
a. Oonding co~ts arise when Ihe
Gmrernmcnl rcquirc8.auurance a!lRil1~t
finllnciallo!5 to it.tlcll or othcrs hy re8l0n of
the act or dt:Cau\t o( the orgaoization. ThC)'
a:iSfl also in instancu where the ofl!aniulion
JI!q.uires similaral5uranoe. included are such
bnnds as bid. perfonnance. payment.. ,
.dunce pa)""cnt. Infringement. and fldehty
bcH1ds.
b. CoslS of bonding required punuant 10
Ihe terms of the awaro are allowl\hle.
Co CO.!ltll of bonding requlrod br the
o~"nizalion in the gcncral conducl of ils
upr.ral:ons are allowable 10 the Cll:lcnt that
such bonding is in accordance with sound
business practice and the rates and premiuml
life reasonable under the circumstances.
5. Commu.nication OOIIU:. Costs incurred for
lele~hone servicell. local and long dislance
tclt'phone calls. teles:-oms. radio(ll'all1lO.
postage IInd the hl.:e. are allowable.
6. Compensation far personal sef'l'ices.
a. Definition. Compensation for pel"lonal
services includes ,,11 compel'\3alion paid
currently or accrued by tbe orgnr.iution Cor
scrvice~ of emplo)'ep.s rendered during lhe
period of the sward. (except as otherwille
pnwided in paragraph g. below). It includes.
but is not limited 10. salaries. wRges,
director's and executive committee member's
Cees. incen.th'e awards. Cringe benefiu.
pension plan costa. allowances for orr-sile
p:l)'. incenUve pay. location allowances.
budship pay, aod cost of Ii\'ing difierenl'ials.
b~ AlJowability. Except 81 otherwUe
sj)CCifically provided io this paragraph the
COlts of luch compenaation are allowable to
the extent that:
(1) Total compensation tO,individual
employees is realonable for the services
rendered and conIonns III the established
policy of the organization consistently
applied to both Government and AOO-
Government aclivities: and
(Z) Charges to awards whether treated as
dirllet or indirect cosll are dete:-minlld and
eupported a. required in this paragraph.
Co Reasonableness.
(1) Wben the organiz:ation is predominantly
engaged in acti....ities other than those
sponsored by the Government. compennlion
for employees 00 Governmool-tlponsored
work will be coneidered reasonable 10 the
extent that It il consistent with that paid for
similar work in the organization's other
activities.
(Z) When the organization il "redominantly
engaged in Government-sponsored activities
and in cases where the \cjnd o( employees
required for the Government activities are
npl found io the organizatioo's other
activities. companlation for employees on
Go\-ernment-sponsored work will be
considared realonable.to the extent that it is
comparable 10 that paid for similar work in
the labor marlcets in which the organization
competes for the kind of employees involved.
d. Special considerations in determining
allowabilitj'. Certain conditions require
special consideration and possible limilations
in determininll costs !lnder Federal awards
where amounts or types of compensation
appl!or unreasonable. Among such conditions
are Ihe following:
(1) Compcnsution 10 mcmuers of nonprofit
or~aniz;:tions, trustees.diree-Ion. R8lI0cilltes.
officers. or the imml..diale fKlIlilie. thereof.
Dr.tr.nninalion shollld be made thai such
compen"ation is reasonaule (or the sctual
personal services rendered rather than a
dislribution of earnings in eltceu of cosLs.
(Zl Any change in Rn organization',
compcnsation poli~' resulting in a
substantial increase in the organiution's
level of compenlalion. particularly when it
was concurrent \,\,ith an increase in the ratio
of Government owards to other sctivitiel of
the (lrganization or an:v chonge in Ihe
treatment of allowaoilily of specific I}'pes of
compensation due 10 changes in Government
policy.
e. Unallowable COSI3. COlts which are
unallowable under other paragrnphs of this
Allachll\ent shall not be allowable under this
paragraph solei)' on the basis that they
constitute personal compensation.
f, Fringe beneflls,
(1) F:ill1le benefits in the form of re[lUlar
compensation paid to emplo)'ceJ during
periods of authorized absencel from the job,
such as vacalion leave. sick lelve. military
leave. aud the like. are allowable provided
such COlts are absorbed by all organiz:ation
activities in proporlion lo the relative amount
of time or errort actually de\'oled to each.
(Z) Fringe benefit. in tbe form of employer
contributions or expenses for social securil)'.
emplol'ee insurance. workmen's
compensation insurance. pension plan costs
(see paragraph g. below), and the like. are
allowable provided such benefits are granted
in accordance witb establiahed written
organization policies. Such benefitl whelher
trealed as indirect costs or as direct costa.
shall be distributed to particular awards and
other aCtivities io a manner consistent with
the pattern oC benefits accruing to the
indh'iduals or group of employees whose
salaries and wases ar:e chargeable to such
awards and other ac6vities.
(3)(a) Provisionl for a reserve IL'\der a self-
Insurance program for unempl~yment
compensation or workmen's compenealion
are allowable to the extent that the
provisions represent reuonable estimates of
the liabilitieG (or such compensation. and tho
t}'pes o( eoverese. extent of coverage. and
rales and premiums would have been
allowable had inaurance been purchased to
cover the risks. However. provilions for self-
insured liabilities which do not become
payable for more than one year after the
proviaion i& made &ball not exceed the
present va.lue oC the liability.
(b) Where an organization follows a
conaiatmt poley oC expenaing actual
payments to. or, on beha1C oL employees or
former employees for unemployment
i:cimpensation or workmen's compansation.
luch,payments are allowable in the year of
llayment with the prior approval of the
awarding agency provided they are allocaled
to.al1 activities of the organizalion.
(4) Costs of insurance on the lives oC
trultt'es. officers. or other employees holding
positionl of limUar relponsibilily are
allowable only to the extent thai the
insurance represents additionsl
compensalion. The costs of such insuran!=e
when the organization is named as.
.1
A-122:5
beneficisry are unallowable.
8. Pel/s/on plan costs.
(1) Cosls of the organization's pension plan
which are incurred in accordance with Ihe
established policies of the organization are
allowable. provided:
(a) Such pulicies meet the tesl of
reasonableneu:
(b) The methodl of cost allocation are not
discriminatory; .
(c) The cost auillned to each fiscal year is
determined in accordance wilh generally
accepted accounting principles as rre~(.ribecl
in Accounting Principles Board Opinion No.8
issued by the American Inslilute of Certified
Public Accounlants: and
(d) The costs assigned to a given fiscal ~'ear
ere funded for all plan participantl within six
monlhs aiter lhe end of that year. However,
increases to nonnal and past service pension
COstl cauled by a delay in funding lhe
actuar1alliability beyond 30 day' aher each
quarter of the year lo which luch costs are
assignable are unallowable.
(2) Pension plan lennination insurance
premiums paid purluantlo the Employee
Retirement Income Security Act of 19;4 (Pub.
L. 93-406) are allowable. Late pal'TTIent
ch.uges on such premiums are unallowable.
(3) Excise laxes on accumulaled Cunding
deficiencies and other penalties imposed
under the Employee Relirement Income
SecurilY Act are unallowable.
h. Incentive compensation. Incenlive
compensation to employees based on cost
reduction. or efficient perionnance.
suggestion awards. safely awards, etc" are
allowable to the extent that the overall
compensation is delennined to be reasonable
and such costs are paid or accrued pursuant
to an agreement entered into in good Caith
between the organization and the employees
before lhe services were rendered. or
pursuant to sn established plan followed by
the organization so.consistently as to impl)',
in errect. an agreement lo make sllch
payment. .' ,
i, Overtime. extra pay shift, and multJshift
premiums. See paragraph Z7.
j. Severance po}', See paragraph 44.
It. Training and education oost$. See
paragraph 48. .. '..
I. Support of salaries and wages. -
(1) Chal'1!es to awards for salarie~ and
wages. whether treated as direct costs or
indirect COStl. will be bued on documented
payrolls approved by a responsible official(s)
of the organization. The distribution of
salaries end walles to awards musl be
lupported by personnel activity reports as
prescribed in subparagreph (2) below. except
when a substitute system h81 been Bpproved
in writing by the the cognizant sgency. (See
paragraph E.2 of Attachment A)
(Z) Reportl reflecting the distribution of
Icti\'i1y of each employee must be
maintained for all starr members
(professionals and nonproCelSionals) whose
compensation is chal'1!ec, in whole or in part.
directly to awards. in addition. in order to
supportlhe allocation of indirect costs, such
reports must also be maintained for other
employees whose work involves two or more
funcitons or acliviliel if I distribution of lheir
compenllotion between such functions or
nclivities is nceded in lhe detenninalion oC
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 satisCy these requirements
mUlt me!!t the Coli owing standards:
(a) The reports must renect an after.lh~-
fOCI detennination oC the actual activity aC
each ~mployee. Dudget estimates (i.e~
estim:ltes detennined beCore the services are
perfonned) do not qualify as support for
chlulles to awards.
(b) Euch report muat account for the tolal
activity for which employees are
compensated and which is required in
fulfillment oC their obligations to the
organiza tion.
(c) The reports must be signed. by the
individual employee. or by a responsible
supervisory official having first hand
knowledge oC the activities perfonned by the
employee. that the distribution of activity
represents a re860nllble estimate of the
actual work perfomlsd 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 ind.icating the total
number of hours worked each day
maintaiDed in confornlance with Department
of Labor regulatione implementing the Fair
Labor Standards Act (29 ern Part 516). For
this purpose. t.he tenn "nonprofessional
employee" shall have the eame meaning as
"nonexempt emplol'ee," under the Fair Labor
Standards Act.
(4) Salaries and wages oj 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
asencies.
i. Contingency provisions. Contributions to
a contingency reserve or eny similar
provision made for events the occurrence of
which cannnt be ioretold with certainl\' as to
li:np., intensity. or with an assurance or their
happening. are unallowable. The tenn
"contingency reserve" excludes self.
insu:-ance reserves (ree paragraph 6.f.(3) and
16.a.(2)(d)): pension funda (see paral!TlIph
6'(SJJ: and reserves for nonnal severance pay
(see paragraph 44.(b)(l).
8. Contributions. Contributions and
donations by the organization to others are
~nallowable.
9. Depreciaiion and use allowances.
a. Compensation for the uee.of buildings.
o:her capital improvemcnts, and equipment
l::: "nnd may he made through use
a!ill......an::es or deprcciation. However. excepl
as )Jrt'lvided in paragraph f. below a
cr'lnuination of the two methods ma\' nol be
l:sed in cai'lrlp.ction with a sin[!le class of
!hed lIs~ets le.g., b:lildings. o:fice equipmenl.
computer equipmenL etc.).
b. The cOmpl::la!ion of use allowances or
,;'~prf'cialiCln shall be based on the
"':'ll!isi:ion cost of the assets involved. The
~~ot::sition Cosl of an assel cO::3led 10 lhe
or~anizolion by a third parly shall be Its fair
market value at the time of the donation.
c. The computation of use allowances or
depreciation will uclude.
(1) The coat or land:
(2) Any portion of the cost of bui:dings and
equipment bome by or donated uy the
Federal Govemment irrespective of where
titl!! was orillinally vested or where it
presently resides: end
(31 Any portion of the cost or buildings and
equipmcnt co!:tributed by or for the
or!tamzatiun in satisfaction of a stlltutOf')'
matching retirement,
d. Where the use allowance method is
followed, the use allowance for buildings and
improvement (including land improvements
such 81 Pllved rarking areas, fences. and
sidewalks) will be computed at an annual
rllte not exceeding two perecnt of acquisition
cost. The use allowance for equipment will
be computed at an arlOual rate not exceeding
six and two-thirds pereent oC acquisition cosl.
\Vhen the use allowance method ill used for
buildings. the entire building must be treated
as a single asset: the building's components
(e.g. plumbing system. hcating and air
conditioning. etc.) caMOt be segre[!lIted from
Ihe building's shell. The two percent
limitation. however. need not be applicd to
equipment which is merely attached or
fastened to the huilding but not pennanently
fixed to it and which ia uaed as furnishings or
decorations or lor specialized p-oU'poses (e.S~
dentist chairs and dental treatment units.
counters. laboratory benches holted to the
fluor. dishwashers, carpeting. etc.). Such
equipment will be considered as not being
permanently fixed to the builJing ir it can be
removed without Lite need for costh' or
extensive alterations or repail"S to the
building or the equipment. ~uipment that
meets these criteria will be subject to the six
and two-thirds percent equipmenl use
allowance limitation.
e. Where depreciation method is followed.
tbe period of useful service (useful life)
established in each case ror usable capital
usets must take into consideration such
factors as type or construction. nattlre of the
equipment used. technological developments
in the particular program area. and the
renewal and replacement policies followed
for the the individual items or claSles of
assets invol~d. Tne method of depreciation
used to assilln the cost of an IIlsct (or group
of assets) to accounting periods shall renect
the pallern of consumption of Ihe BRset
during Its useful life. In the absence of clear
evidence indicating that Ihe expected
consu:nption of the asset will be significantly
grea ter or lesser in the early portions of its
u~efullife than in the laler portions. the
straight-line method shall be presumed 10 be
the appropriate method. Depreciation
methods once used shall not be changed
IInless approved in advance b~' the cognizant
F<:cp.ralasenc~'. When the deprecialion
method is introduced for application to assets
previousl~' subjeC1 to a use allowance. the
combination of use allvwances and
dcprecialion applic.'1ble to such assets must
not exceed the total acqui5ition cost of Ihe
:lS5ets. \J\.'hen the depreciation method is useu
f,'r huildinl:5. a buildinJo:'s 5n<:1I ma,' ue
I
A-122:6
5l'grr.gnlcd from ellch building component
(e.g.. plumbing ~yslem, heating, and air
conditioning s)'slem. etc.) and each item
depreciated over its estima'ed useful life: or
the entire building (i.e.. the shell and all
components) may be trellted 88 a single asaet
and depreciated over a single useful life.
r. When the dellreciatinn method is used
for a particular class of assets, no
depreciation mill' be allowed on anr such
asr-elS that. under pllragraph e. above, would
he viewed as fully depreciated. However. a
reasonHble use allowance mllY be negotialed
for such assets if wlirranted alter laking into
cunsideration the amounl of depreciation
previously charged 10 the Covernment, the
estimated useful liCe remaining al time of
nr.[!otiulion. the effect or any increased
maintenaDce charges or decreased efficiency
due to age. and any other ractors pertinent to
.the utilinlion or the asset ror the purpose
contemplated.
g. Charges for use 1I110wance~ or
dr.preciation musl be supported by adequate
propertr records and phrsical inventories
must be taken allcast once every two years
la ~tali.tical sampling basis is acceptable) to
ensure lhat asselS exist and are usable and
needed. When the depreciation method is
fullowed, adequate de~reciation records
indicating the amount of deprecintion taken
c:lch period must also be maintained.
10. Donations
a. SCT\'ices received.
(1) Dunated or volunteer services may be
rurnished 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 direcl or indirecl t.'Ost.
(::) The value of donated services utilized
in tne perfonnance of a dir~t cost activity
shall be considered in the delennination of
the organization's indirect cost rate(s) and.
IIccordingl~', shall be allocllted a
proportion'lle share uf applicable indirect
costs ...hp.n the following circumstances exist:
(a) The ag,;:egate ~'alue oi the services is
nJ:lterial:
(b) The services are supported b~~
llignificant amnlmt of lloe i~irect costs. _ .
incurred b~' the org:miZlllion:
Ic) The dirr.ct cost activity is not pursued
primarily for the benefit of the Federal
CO\'I~mment.
(:I) In those instances where there is no
.basis for determining the fair market value of
the services rendered, the recipient and the
cn{tnizant asenc}' shall negotiate an
appropriate aiioClltion of indirect cost to thc
services.
(4) Where donaled llervices directly be:neCit
a J:'roject supported by an a ....ard. the indirect
costs allocated to the services'" HI be
considered as a part of the total costs or the
project. Such indirect costs may be
reimbursed under the award or used 10 meet
cust sharing or matching requirements.
(5) The value of t~e donated services may
be~ used to mcct cost sharing or matching
rr.quircmenls under conditions dt:scribed in
.^.It:lchment E. OMB Circular No. A-no.
\\'here donated services are trehled as
inrlirecl cests. indirect cost rales will
s(!p:Jrnl~ the value of the donaliuns so that
I
anagement and Budget Circular A-122 (6/27/80)
I will not be made.
lIet value of dona led services
uled as follows:
r volunteer services. Rates {or
aD be consislent with those
paid for similar work in olher
he ol'8aniu tion. In cllles where
ki.1la involved are not found in
Ivilles or the organization. the
an be consistenl with lhose paid
rk in the labor market in wnich
lion compeles for such skills.
aORoted by other
. Wben an 'emplo~'er donoles
of an employee. these services
d al the employee's regular rate
sive or fringe benefits and
I provided the services ore. in
I for which the employee is
. If the services are nol in the
which the employee is nonnolly
ket value shall be compuled in
.tIt subparagrapn (a) above.
space. .
d:goods: i.e~ expendable
perty/supplies. and donated use
be furnisbed to an organizalion.
lhe goods and space is not
either as a direct. or indirect
ue or the donations may be used
sharing or matching share,
under the conditions described
I Eo o~m Circular No, A-lID.
the donalions shall be
accordance with Altachment
nations are trealed 88 indirect
t cost rales will separate th,
donations 80 that reimbursement
aCe.
u morqle.health. and welfare.
dlts. The costs oChouse
health or fU'St-aid clinics. and/
recreational activities.
ounseling services, and other
rred in accordance with the
is established practice or custom
'ement or working conditions,
r-Iol'ee relations. employee
employee performance are
ch costs will be equitably
: to all activities of the
. Income lleneratp.d from an}' of
l!$ ",'iIl be credited to the cost
&: such income has been
t over to employe~ welfare .
nmen! costs. Costs of
di"'ersion. social activities.
i,and costs relating therelo. sucl.
gins. rentals, transportation, and
e. unallowable (but see
t and 25).
ent and other capital
in this paragraph. the following
,m!:'!ninm; s,St(Qrth below:
ment~ means an article of
ble tangible personal properly
CuI life of more Ihan two years
, ilion cost of $500 or more per
ization ma\' use its own
vided that j'l allenst includes all
~le tangible personal property as
In.
(2) "Acquisition cost" means the nel
in\'oice unit price of an item of equipment.
including Ihe cost of any modifications.
allachments. accessories, or suxiliary
apparatus necessary to make it usable for the
purpose for which it is acquired. Ancillary
charges, such as taxes. duty. prolactive in-
transit insurance. freight. and installation
shall be included in or excluded from
acquisition cost in accordance with the
organization's regular wrillen accounting
practices,
(3) "Special purpose equipr.lent" means
equipment which is usable only for research,
medical. scientific. or technical activities.
Examples of special purpose equipment
include microscopes, x-ra)' machines, surgical
instruments, and spectrometers,
(4) "General purpose equipment" means
equipment which i, usable for other than
research. medicaL scienlific. or technical
activities. whether or not special
modifications are needed to make them
suitable {or a particular purpose. Examples oC
general purpose equipment include office
equipment and {umishings, air conditioning
equipment, repl'oduction 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 oC
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 tbe prior approval of the
awarding agency.
c. Capital expenditures 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. bl:i1dings. or equipment which
materially increase their value or useful life
are unallowable as e direCI cost except with
the prior approval of the awarding agency.
e. Equipment and other capital
elCpenditures are unallowable as indirect
costs. Howe\'er, see paragraph 9 for
allowabilit}' of use allowances or
depreciation on buildings. capital
improvements. and equipmenl Also. see
paragra;1h 42 for allowability of rental costs
for land. buildings. and equipmenl
14. Fines and penallies, Costs oC fines and
penalties resulting (rom violations of, or
failure of the organization to comply with
Federal. State. and local laws and resulations
are unallowable excepl when incurred 88 a
result oC compliance with specific provisions
of an award or instructions in writing from
the awarding agency, '
15. Fringe benefits. See paragraph 6. f.
16. Idle focililies and idle capacity.
a. As used in this paragraph the following
lenns have the meanings set forth below:
(1) "Facilities" means land and buildings or
an)' pO:1ion thereof. equipment indh'idually
or collt'ctivel~', or any other tangible capital
assel wherever located. snd whether owned
or leased by the organizalion.
(::!) "Idle facilities" means complete)\'
ul1ll&Cd facilities Iha: aN! e'1(cess to the'
orsa01i2.ation's current needs.
(3i "Idle c!I;Jncity" me:!ns the unur.ed
I
A-122:7
c:!pacily of partially used facilities. It is tne
difference between that which a {acility
could achieve under 100 per cenl operating
time on a one-shifl basis less operating
inlerruptionl resulting from time lost for
rel.airs, selups. unsatisfactory materials. and
othr.r nonnal delays. and the extent 10 which
thr. facility was act Dally used to meet
oem:!nds durin8 the accountinll period, A
multishift basis may be used if it Clln be
shown that this amounJ. of usage could
normall~' be expected for the type of {acilily
involved.
(4) "CosIS of idle facllities or idle capacity"
menns coslll such 1UI 111aintenance. repair.
housing, renl. and other related casU!; e.g..
property laxes. insurance. and depreciOluon
or use allowanccs.
1.1. The cosu! of idle facilil.ies are
unAlIov';.ble exceptlo the exlelll tb;ll:
(1) They are unneceuary 10 mellt
nuctualions in wo~kload; or
(Z) AlthDugh nol necessary to meel
nuctuations in workload. they were
nP.cessary when acquired and are now idle
l.Iecause of choDges in program requirements.
efforls to achieve more economical
operations. reorganiz.ation. termination. or
other causes which could nol have been
reasonably foreseen. L:nder the exceptiOn
st:lled in Ibis subparagraph. cosls of idle
facilities arc allowable for a reasonable
period of time, ordinarily not 10 excp.ed one
rear, dllpending upon the initiative taken to
use. lease. or dispose of such facilities (but
see paragraphs 47.b. and d.).
c. The coslS of idle capacit}' are normal
costs of doing business and are a factor in the
norm:!1 fluctualions of usage or indirect cost
rales from period to period. Such costs are
allowltble. provided the capacity is
reasonably anticipaled to be necessary or
was Origi:lally reasonabie and is sl:bject to
reduction or elimination by subletting.
renting. or sale. in accordance with sound
business. economics. or security practices.
Widespread ic;e (".apacity throughout an
entire facility or among a group of assets
ha\'ing substantially the same fl:nction may
be idle: facilihes. '
17. "ul,,;-,mdcnt resea;ch aJld aav~Jopment
[Reserved l. -
18. l/lsurance and indemnification. 1
a. Insurance includes insurance which the
organizalion is required to ca~', or which is
approved. under the tenns of the .:ward and
any other insurance which the organizatian
maintains in connection with the (Ieneral
condl:Cl of ilS operations. Thi9 paraszraph
does not apply 10 insurance which r!prescnls
frin!1e benefits {or emr10yees (:;~e paraliraph
6J. and 6.8.(2)).
(]) Costs oi ini:lrance r~quired or
ar-proved. and mainl:!ined. pursuont to the
award are anowable.
(::!) Costs of ocher ins'Jrance mltintained by
the orgi1nization in conncclion with lhe
!l!:neral conduct of its opera lions are
ulluwable subject to the followin~ limitations.
(a) Types llnd elttcnl of coverage shall be
in accordance with ao\.nd business practice
and the T'lles and premiums shall be
reasonable unccr the circumstances.
(bl C(".~t~ allowed for business interruption
or Olnp.r similar insurance shall be li:nitcd 10
~
Office of Management and Budget Circular A.122 (6/27/80)
nCJ!otilJlion Dnd in anticipalion oC Ih~ '4ward
",nmt' s\l~h co~15 is neccSSllry 10 comrly wilh
:he prujlosed deli\"er~' schedule or period oC
pcrformance. Such cosls Me allowaule only
tu ;hc e:\lenl thatthl'Y would have been
lIiluwable iC incurrr.d nCter the dalr. oC the
~"''J:'d tmd only with the wrillt'n appro\'"l roC
the ",w"rdillS ngcn~r.
J4. I'mrc.~sionol sert'icc costs.
a. Costs of proCt'l':sional and consultant
scrvices rendereJ by persons who are
r.:''''lbers of a particular proCession or possess
il sll::d;1I skill, and who arc not officers or
l'~;liuy!:es of the orgbniz<llion. <lre allowable.
,;object to IJ, c. and d, oC this plirllgraph when
rp.1l511l1OlLle .in r-.:lation .to lhe servicp.s
renderr.d IInd wh!:!! not contingent upon
rec:over\' oC the costs Crum lh~ Government.
b. In del::rnling the allowauilily oC c:osts in
. particular case, nu single lactor or any
specilll combination oC Caclors is necess<lril~'
delerminlltive. However. lhe Collowing
(Oletnrs are relevanl:
(1) "he nalure and scope of the service
re",lered in rela lion 10 the service required.
(Z) The neces~ily oC conlracling [or lhl!
service, considering lhe organizalion's
[,~'pahilily in lhe particulnr area.
(3) The pasl pallern of such CoslS.
particularly in lhe years prior 10 Governmenl
awnrds.
. (4) The impact of Governmenl awr.rds on
tne organization's business (i.e.. what new
problems have arisen).
[5) Whether the proportion of Governmenl
\York to the organization's lotal!.lusiness is
such as to influence lhe organiz:ation in favor
or incurring the cost. particularly where the
services rendered are not of a conlinuing
nature and have liltle relationship to work
under Governmenl !Iran Is and contructs,
(6) Whether the service can be performed
more economically by direct empioymenl
ralher than contracting;
(7) The qualifications of the individual or
coocern rendering the service and the
cuStOlTllli'}' fees charged. especially on non-
Covernmenl awards.
(01 Adequacy oC the contractual agreemenl
for lhe sr.rvice (e.g.. description of the service.
eslimate of time required. rale of
compen~ation, and termination provisions).
c. In IIddilion to the factors in p6CaSTaph b
abo\'e, rr.:lliner fees to the allowable must be
supported by evidence or bona fide services
a\'ailable or rendered.
d. Cost of legltl. accounlin~ end consulting
~(!C\'ices. and related costs incurred in
conn~ction with defense of antitrust suitS';
IInd lhe pro!lecutinn of c1aj.:ns allainslthe
Guvernment, are ulIallowable. Costs of legal.
Ac::;uunliI18 IInd consulting services. and
rr.lated cosls. incurred in conneclion with
patent illfring'!mentlitigation. organizalion
ilnd reorganization. are unallowable unless
otherwise prcwided fQt in the aWRTd (bul see
parlt!!raph 47e).
35. Profits and losses on dit:posi/ion of
depreciable property or other capitol assets.
a. [1) Gains and 10R~l's on sale, retirement.
or olher dispo~ition uf oerreciable properly
shGll be inclurled in the year in ......hich they
oc;cur as cred:!~ or charges ta cost grouping(s)
in whfch the dc:preciation applicable 10 such
property was included. The amounl ;-f the
!l;lin or loss to be inc:luded lIS a credit or
ct".q:e 10 the Appropriale cost ~rollping(s)
sh..li ue Ihe diliercnce uclween the amounl
rt'iilized on the property and lhe
ul1lJeprecialed basis of the property.
(2) GlIir;s and losses on Ihe disposition of
dCf.reciable propert~' shall nol be recognized
nR II separate credit or charge under lhe
loiluwing conditions.
Iii) The gnin or Iou is processed lhrough II
depreciatiun reseC\'e account and is reflected
ill the Jeprecilllion allowauie under
para):rorh 9.
(b) The rruperly is Sivcn in exchlln{:c: as
pllrl of Ihe pllrcha~e price of a similar Hem
lind the gllin or loss is taken intu Account in
c1r.\emlining the deprcciation cosl basis of Ihe
new item.
(c) A 105. rellulls frum Ihc fuilure to
maintain permissi!.lle insurance. ellcepl nl
uthl!rwise PI'l1Vided in para!;raph 10.11.(3).
(d) Compensation (or the use of the
prt'pert~. was provided through use
allowances in lieu of depreciation in
accordance with paragrAph 9.
(e) Gl\ins and lusses arising from mass or
cxtraordinarv sales. retiremenlS. or olher
dispositions shall be considered on a CDse-
!.lv-calle basis,
'b. Gains or losses of any nalure arising
frotn the sale or exchange oC property other
than the property covered in paragroph a.
above shall be excluded in computing award-
custs.
35. Public informaliun sert'ice costs.
a. Public information service coslS include
the cost associated 'with pamphlets. news
releases. and olher forms of informalion
services. Such costl are normally incurred to:
(1) lnfurm or Ins1ruct Indi\'idual&. group.. or
the general public.
(Z)lnterest individuals or groups in
participating in a scr/ice program of the
Olgsniution.
(3) Oisseminale lhe resuhs of sponsored
and nonsponsored activities.
b. Public information service costs are
allowable as direcl costs with the prior
a;lproval of thP. awarding agenC)'. Such costs
are unallowable as indirect costs.
37. Publica/ion and printing cos~.
a. Publication CoslS include the costs of
printing (including the proce~ces 'Of
composition. plate-making, press work.
binding. and the end products produced by
slJch pro~esses), distribution. promotion.
:nailins. and general handling.
b. If thelle costs lire not idenlifiable with a
particular'Ctl,1 objective. lhey should be
allocated 81 indirect costs to all benr.fiting
activities of the organiz:ation.
c. Publication and printing cosls are
unuilowable as direct costs cxcept wilh the
prior npproval of the awarding agency,
d, The cosl of page charge. in journals is
addressed paragrllph 28.
38. Rearransement. and alteration costs.
Costs incurred for ordinarv or normal
rcarrangement and aheralion of facilities ore
alluwable. Special arrangemcnt and
aheralion cosU incurred specifically for the
project are allowable wilh lhe prior approval
o( the awerding IIgeney.
39. Reconversion costs. Cosu incurred In
the ",storation or rehabilitation of the
organization's fadllties to approximately the
:1
A-122:9
nme condition existing inunedialely prior 10
commencement of Covernment swards. [air
wear and tear excepted, lUe allowahle.
40. Recruiting cosLs. The follo.....ing
recruiting cosU are allowable: cosl of "help
wanted" advertising. operating cosls of an
employment oflice. costa of operating an
educnlionaltesting program, travel expenses
including (ood and lodging 01 employees
while engaged in recruiting personnel. Ira vel .
cosls of applicants for iolerviews lor
prospective employmenl, and relocOItion COSlS
incurred incidenlto rr.cruilment o[ new
employees (~ee paragroph 41C). Where the
organization uses employment agcncies,
costs not in excclS of standord commercial
rates lor such services are allowRble.
41. Relocation costs.
a. Relocation Cosls are Cosls incident to the
permOlnent change of duly BSsiflTlmcnt (lor an
indefinite period or Cor e stuted pcriod of not
less than 12 monlhs) of an exi~ling employr.e
or upon recruitmenl of a new employee.
Relocalion cosls are allowuble, subjecl 10 the
limitation described In paragrophs b. c. and Ii.
below. provided that:
(1) The move Is (or the br.nefil of the
employer.
(2) Reimbursement to the employee is in
accordance with on established .....rillen
policy consislently followed b~' the employer.
(3) The rcimbursement docs not exceed the
employee's actual (or reasonably estimated)
expenses.
b. Allowable relocation costs [or current
employees are limiled to the [ollowing:
(1) The cosls of transportation of the
employee, members of his immediale fl1milr
and his houseroJd. and personal erIeca to the
ncw location,
(2) The CoslS of finding a new home. such
as advance trips by employees and spouses
10 locate living quarlers and temporary
lodging during thc transition period, up to a
maximum period of 30 deys. including
advance trip lime. .
(3) ClosinS coslS, such as brokerage. legal.
and appraisal fees. incident 10 the disposition
of the employee's fonner borne. These costs,
together wilh Uiose described in (4) below.
are iimited to 8 per cent of the'sales price of
lhe employee's fllrmqr bome. ..
(4) The cClnlinWng cosls of ownership of
the vacant former bome afler the setUement
or lease dale of the employee's new
pcrmanenl home. such as maintenance of
buildings and groundl (ex.clusive of rUling up
expensea). utilities. taxes. and propel't~'
insurance.
(5) Other necessary and rcasotlable
expenscs normaliy incident to relocelion.
such as lhe COlla o( cancelling eo unexpired
lease, disconnecling and reinstalllng
household appliances. and purciluing
insurance asain.l loss of or damases to
personal property. The cost of cancelling an
unexpired lease is limiled to three times the
monthly rental
c. Allowable relocatioo cosla for new
employees are limited to those described in
(1) and (2) of paragrapn b. above. When
relocalion costs incurred iocidenlto the
recrui~enl of new employee. h....e beeo
allowed eitber lU a direct or iRdirecl COBt and
lhe employee roeigns for reasons within bis
1\
Office of Management and Budget Circular A-122 (6/27/80)
control within 12 months after hire, the
organiz.a tion shall relund or credit the
Government for its shore of tbe cost.
However. the costs oltravel to an overse~s
location shall be considered travel costs In
accordance with paragraph so and not
relocation costs {or the purpose of this
paragraph If dependents are not permilled 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:
(lJ Fees and othllr costs associpled with
acquiring a Ilew home,
[2) A 1058 on the sale of a former home.
(3) Continuing mortgagc principal and
in!erest payments on a home being sold.
(4) Income taxes pllid by 6n employee
relaled to reimbursed relocation cosls.
42. Rental costs.
a. Subject to the limitations described in
parag:aphs b. through d. of this p;uagraph,
rental casts are allowable to the extent that
the rales are reuonable in light of such
factors as: rental costs of comparable
property. if any: market conditions in the
area: alternatives availaule: .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 tbe
amount that would be allowed had the
organizotion continued 10 own the property.
c. Rental costs under less.thl:ln-Iength
leases aM 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 influence
the actions of the other. Such leases include.
but are not limited to those between (i)
divisions of an organization: (ii) organizations
under r:nmmoncontrol througb common
nfficers. directors. or members: and (iii) an
organization Rnd a director. truslee, officer,
or kay I!mployee of the organi::ation or his
immediate (amiiveither dlrectl)' or ti-JOugh
corllnra:ions, trusts, or similar arrangements
in which they hold a controlling interest.
d. Rental costs under leases which create a
:naterial equity in the leased rroptlrty are
allowable only up to the amour.: thaI WQuld
be allowed had the or:;anizaliun purr:hased
the property on the date the lease agretm:ent
was executed: e.g., depreciation or use
allowances. maintenance. taxes. insurance
out excluding interest e~pense and oilier
unallowable costs. For this purpose. a
material equity in the property exists if the
iease in noncancelable or is cancelable only
upon the occurrence of some remote .
contingency and has one or ",ore of the
ioUowing characteristics:
[1) The organization has the right to
purchase the property for a price which al the
beginning of the lease appears to be
substantially less than the probable fair
:narket value at the lime it is permitted 10
purchase the property [commonlv called a
lease with a bargain purchase option):
(ZJ Title to the propertypaslics to the
organization at some lime during or aflcr the
iease period:
(3) The term of the lease (initial term plus
periods covered by bargain renewal options,
If any) is equal 10 75 per cent or more of the
economic life of the leased prnperty: i.e.. the
period the property Is expected to be
econooically usable by one or more users.
43 noyolties and other costs for use of
pOl ,'.r and capyrights.
a. J ;yallies on a patent or copyright or
amortization o{ the cost of acquiring by
purchase a copyright. palent. orrighte
thereto. necessary for the proper performance
of the award are allowable unless:
(1) The Government has a license or the
rillhtto free use of the plltent or copyright.
(2) The patent or cop~'right has been
adjudicated to bc invalid. or has been
administrativelv determined 10 be invalid,
(3) The pateni or copyrighl is considered 10
be unenforceable,
[4) The patent or copyright is expirr.d.
b. Special care should be exercised in
determining reasonableness where the
royahies may have been arrived at as a result
of less then arm's length borgainins: e.g.:
(1) Royalties paid 10 persons. including
corporations. affiliated with tha organization.
(2) Royallies paid to unaffiliated parties.
including corpo!'ations. under an agreement
entered into in contemplation that a
Government awerd would be made.
[3} Royalties paid under an agreement
entered into after an award is made to an
organization.
c. In lIrlY case involving a patent or
copyright formerly owned b)' the
organization. the amount o{ royalty allowed
should not e.~i:eed the cost which would have
been allowed had the or:anizatioD retained
title thereto.
44. Severance pay.
a. Severance pay. also commonly referred
to as dismissal wages. is a payment in
addition to re~ular salaries and wages, 'uy
organizations to workers whose employment
is being terminated. Costs of severance pay
are allowable onlv to the extent that in each
case. it is required by (i) law. (ii) employer-
employee agreement. (iii) ealt.lblished policy
that con:;!itutes. in effect. an implied
agreement on Ihe organi:ation's part. or (iv)
circumstances of the particul:&r employment.
b. Cests of severance p:l)'ments are di\'ideu
into two categories as follows:
(1) Actual normal trunover sevel1l:lce
J:;a)'menls shall be allocated to aU aeth'ilies:
0:. where the organization pl'flvides for a
. rellerve for normal severances such method
will be acceptable if the charge to current
operations is reasonable in light of pa)'menls
actuall)' made for normal sev"!rances over"
representative J:;ast period. and if amounts
cl1liri:!d are allocated to all activilies of the
orga:liza tion.
(2) Abnormal or mass severance pay is of
such a conjectural nature that measurement
of costs bv means of an accrual will net
ochieve equily to bolh parties. Thus. accruals
fo!' this purpose are not allowable. However.
th'! GovernmEnt recognize:: its obligation to
participate to the extent of :ts fair shnre, in
an~' specific pa)'ment. Thus. allowabilily will
be considered on a case-b},.case basis in the
event of nccurrenr:e.
45. Specialized sen'ice facilities.
a. Thc costs of scrvices provided by hi~hiy
I
A-122:10
complu or $pecialized facilities operlltcd b~'
the organizalion. such as electronic
computers and wind tunnel8. 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
an)' items of income or Federal financing thaI
qualify as applicable credits unuer paragraph
A.5. o{ Allachment A.
b. The COstl of 8uch services. when
material. must be chargcd direcll)' to
8pplic:!ble uwarus based on actual u.~age of
Ihe services on the basis of a schedule of
rates or eSlablished methodology that (i) does
not discriminilte againsl federally supported
nctivilies of lhe organizl:ltion. including usa!!\!
by the organization for internal purposes, and
[ii) is designed 10 recover only lite aggregale
costs of.lhe sef\'ices. The Cosls of eoch
service shull consisl normall)' of both rts
direct costs !lnd its allocable share of all
indirect COSIS. Advanc:e agreemcnts pursuant
10 parugrnph A.5. of Alluchment A are
particularly important in this situation.
c. Where the CoslS incurred for a service
lire not material. the}' may be allocaled as
Indirect costs.
40. Taxes.
3. In general. taxes which the organization
.5 required to pay and whir;h are paid or
.accrued in ac::ordsnce with generally
accepted accounting principles, and
payments mnde to local governments in lieu
of laxes which are commensurate with the
local government $ervices received are
allowable, except for (i) laxes from whi::h
exemptiuns are avaUable to the organization
directiv or which are available to the
organiZation based on an el\emplion affr:rded
the Government and in the laller case when
the awarding Ggency makes 8\'ai!able t.he
np.cessary exemj:llion certificR tes. (ii) special
asucssments on land which represenl capilal
improvements. and (iii) Federl:ll income taxes.
b. ^n~' refund of taxes. and an)' pRyment to
the orllanization of inlcreslthcrc:on, which
were allowed as award costs. will be
creuiled either as a cost reduction or ClIsh
refund. as appropriate. to the Government.
47. Terminution co.~ts, Terminali6n of
i1wanls generally give rid, 10 the incurro::,icc
of costa. or the neerl for special trealment of
COstl. which would not huve arisen had Ihe
award not been terminated. COllI ~rincipiea
c"vering these items arl! set forth below.
They are to be usr.d in conjunction with the
.othr.r provisio:ls of this Circulnr in
termination situations.
a. Common itRms, The CUll I of items
reasonal>ly usable on the organization's other
work sholl nnl be a!lowable unlr.ss the
orRnr.iUltion submits evidence that it would
not rc:ain such items al cosl without
sustaining a loss. In deciding whether such
items are reasonnbly uS3ble on otner work of
the organization, the awardiI:g agency shouid
consider the organi7.alion's plans and urders
for current and schedulcd activit)..
Contcmporaneous purchases of common
items by the orsllnization shall be rr.llarded
as evidence Ihal such items are reasonably
usable on Ihe organization's :lther work. Any
ncceptance of common items liS allocable to
the Icnninaled portion of the i1wllrc! sholl be
hmilcd 10 Ine cxlr.ntlhnt the Ol1iJntilil!~ of
I
Office of Management and Budget Circular A-122 (6/27/80)
such items on hand. in transiL and on order
are in exce,. of the reasonable quantitative
requiremenu of other work.
b. CosL! continwng after tennioatiar:. 1! in
I particular caM. despite all reSlonable
e!loru by the ofianization. certain CO'11
cannot be di.cantinued immedialely alter the
effective dale of termination. such co.u are
pnerally allowable withil1 the Umitatiozu set
forth i:1 this Circular. except that a.ay .uch
costs contiJ1uin.g alter terminatioll due to the
negligent or willful failure oC the ofianiution
to discontinue such cosu shall be
unallowable. "
c:. Loss of wIeful value.. Loll of useful value
oC'recial tooling. machinery and equipment
w;.;!:h WBI not charged to the .wvd as ;a
c:l,.:.,al ~xpenditure is generally allowable if:
i : , Such special tooling, mac:.inery. or
eq. :pment is not reoaonably capable of Ilse in
III:. ...!her work of the organi:ation.
(::l The intere,t of the Govemme:1t i,
:::r ~r.ti!d by traJUCer of title or l.y other
nV':I:\s de~med appropriate by the awvdios
a:~' !ley:'
Ii. Rental costs. Rental cosu under
ll::l:xpirea leases are generally allowable
"':'\!re clearly shown to have been
,.,.:~onably necessary Cor the performance oC
Ib. terminated award le'l the re,idual value
0:" such leale,. iC (i) the amou.,t of such rental
ci:.imp.d doe, not exceed the reaeonable use
va:;"e or the property leased for the period oC
tI:.. 'lIwllrd and such further ~riod as may be
~.:.J~:,:ble. and (iil the organi%ation make,
all reasonable e{foru to terminate. allign.
settle. or otherwise reduce the cosl of such
lease. There also c:av be included the cOat of
ail era lions oC ,uch le'ased property, provided
such al:erations were necessar'1 Cor the
performance of the award. and of rea,onable
resto:;lion required by the provisions oC Ihe
leD.:Ie.
e. Settlement expens811_ SettJernemt
expenses induding the !ollowing an-
genf'rally allowable:
(1) Ac:ounting.lepl. dmcal. and similu
costs rea,onably neCll"&l'i' ior:
(a) The pT'eparalion and pre,ent.lion to
awarding agency of settlement claim, a.ad
supporting data wHh resped to the
terminaled portion of the award. we,. the
termination is lor delaulL (See p8J'1lgraph 4.a.
oi Attachmcnt 1.. OM:B ClrcuJu No. A-11O:
and
(bl The lennination 8J2d .ett.lement oC
suoawarcls. "
(2) Realonable coats lor the 'torage.
tran,portation. prolection. a.ad disposition of
property provided by the Government or
Icquired or produced for the Iware: except
whe13 grantees are reimbursed for disposaa
ata predetermined amoUDt in accord8J2ce
with Attacb.meut N of OMB Circular A-no.
(3) Indirect costs related to salaries 8J2d
wagel inC'lUT'ed as .ettlernent expense'll in
,ubparagraphl (1) snd (2) of thia para;raph.
NOl'TDally. such indinct coau shall be l.imited
to !ringe benenu. occupancy cosL a:;d
immediate supervision.
C. Claims under suhoworas. Claims I1:1der
luoawards. induding lhe allocable portion or
tlaims which are common to the award. and
to other work of the organi:.ation are
generally allowable. An appropriate 'nllre of
the organization'. indirect expense may be
allocated to the amO\lJ1t of settlements with
subcontractor/subgraDleel; provided that the
amount allocated is otherwisl! con,istenl
with the buic guidelioea contained in
Attachment A. The indlrect expmse '0
allocaled ,hall exdude the sams and ,imilar
COlt, tlaimed directly or indirectly as
.ettlemenl expenlea.
4& Tmining and education COIls.
L Cosu oC preparation 8J1d maUllenOUlce of
a program oC iD.1tnJction including bul Dol
limited to on-the-job. c1aasroom. and
apprentic.eship training. dssianed 10 inC"eue
the vocational effectivenesa oL employees.
induding training materiall. textbooks.
salaries or wages of traIDeel (udud.i.ag
overti..t:ae campanaatiou which mjght ariS41
therefroml. a.ad (i) salaries or the direclor oC
traU1iIlg 8J1d stail when the traiDing progrnm
I. conducllld by the Ol'/Jani:atioa: or (iil
tuition and lee, when the training i. in an
iDatitutiOIl Dot operated by the organi%.alion.
are allowable.
b. Cost, ol.part-time education. at an
undergraduate or poltSnduate con~ level.
IDcluding that provided at the organization'l
own Cacilities. are allowable oaly when th.
course or degree pursued i. relative to the
field in which the employee i. now working
or may reasonably be expected 10 work. and
are limited to:
(1) TraiAing materiaJa.
(2) Textbooka. .
'(3) Fee, c:harge~ by the llCiucatil:ln.u
institution.
(4) Tuition a:harged by the educational
iD.stitutioa. or ID Ueu oC tuition. instructors'
lalaries and the telaled ,han of IDdirect
cosls ol the ecucational institution to the
extent that the ,um thereof ia not in exceS8 oC
the tuition which would bave ben paid to the
participating educational inst1tution.
(5} Salaries and related COil' of inlIUuclo~
who are employeel of the Organi:atiUL
(6) Straight-time compensation of Ilach
employee for time spent attendJug daslM
during werking hours Dot in exceSl or 158
bours per year and oaly to tJ:ie extent thai
circumstances do not permit the operation 0/
classes or attendance at dasses after ~
working bours: olhel"W1le .uch compeDlation
i. unallowable.
c. C:lsll of tuition. !eea. lraiui:2g material..
and te.xtboolu (but DOl lub.illence. saiar)'. or
any other emolumenlll in connection with
fu!J-time educadol1. IDdudinS that provided at
the ol'/Jan.i:ation's own facilities. at a
postgraduate (but nol underpoaduate) college
level. are allcwable onlv whe13 the course or
degree pursued i, relaled to the field in which
the empLoyee is now working or may
rea.onably be expected to work. a.ad oaly
wbere the co.u receive the prior .pproval of
the awarding agency. Such coeu are limiled
10 lhe COlts attributable 10 . total period nol
to excee: one sdlaol year lor each employee
so traiued. In unusual cases the period may
be extended.
Ii Costs of attendance oC up to 16 week"
per e::ployee per year at 'pedali1ed
program. .pecifically designed to enhance
the effectiveness of ueculives or ma:1.agen
or to prepare employees lor sucl1 positions
are allowabie. Such costs indude eo.roUment
I
A-122:11
Ceel. training materials. textbook. and
related charges. employees' lalaries..
,ubsistenc.e. and traveL Cosu allowabl.
under this paragraph do nol IDclude tnOH lor
COl1n4l1 that are part oC a degree-oriented
cur:"ic;o.Jum. which are allowable only to the
elttenl set forth in b. and c:. above.
e. Mainlen8Z1ce expezue. and nonn.u
depreciation or Cair re13taL on Cacilitle,
owned or leased by the organiution Cor
lraining purpOIll' are allowable to the extent
sel lortb in peragraplu 9, .z:. and 42-
C. C:.mtributlona or donations to
educational or training in>>tttutionl. iududing
t~e aonation of lacilities or otber properties..
anu scholarship. or lellowships. are
unallowable.
g. Training and educstion COlts in excess oj
tho,e otherwise allowable under paragraphs
). and c:. of this parasnph may be allowed
with prior approval of the awarding agency.
To be conlidered Cor approval the
organizution mu.l demon,trate that such
cost, are conlislenUy inc:un-ed pursuant to an
e";lbli,hed training and educa:ion prognun.
and thai the course or degree pursued il
relative to the !ield i., which the employee is
now working or may reasonebly be expected
to work.
49. Transportation costs. Tran,portation
CUSIS include freight. elCl'rell. cartage. and
postage charges relatina either to good,
pun:nasea. in procell. or delivered. The,e.
COSIS are allowable. When such COlts can
readily be ident:i!ied with the itelnll involved.
they may be directly charged 81
tran'portation cosu or added to the COlt oC
such itemJ (.ee p8J'1!graph 23). Whel"e
identiCic:ation with the materials received
cannol readJly be made. transportat1013 costs
may be chBl1!e<i to the appropriatll IDdirect
cost ac::ountl if the orogan.i:alion follows a
con,istent. equitable procedure in thil
respec:t.
SO. Travel CO,L!.
a. Travel C08tl al"e the ~xpense' Cor
transportation. lodging. suo.iltenca. a.ad
relaled item, inc:un-ed by employees who are
in Ira vel ,tatua on official bu,IDe.. of the
organizalion. Travel c0811 are allowable
subject to paragT'8pns b. tfu.o1,lg.b e. below,
whIm they are diiectJy attributaole to specific
wIJrk Ilnder a.a Iward or~ in~ in the
normal course oC acim.ini't:"ation oC the
orga niu tion.
b. Such COlts may be chal1ed on a.a actUal
bui.. on a per' diem or mileage basis in lieu
of actual COlli incurred. or on a combination
of the tWo. pronded the method used results
in charge, consi,tent with lbose normally
allowed by the organi:ati013 in it, regular
opera lions.
e:. The ci.i!Ierence in ce,1 between fi.-st<lall
air aCl:oQ1D1odationa and less than fint<lau
air accommodations is unalloweble except
when lelll than fir3t<lau ai.-
aCl:otr.moaatiozu L"'e not reuonably
available to meet neceSlary mission
requirements. IUch 81 where leu than fi.-st-
c:lBII accommodations wowd (il require
ci:cuitow routing. (iI) require t:'avel during
unreuonable houn. (iii) greatly inere..e th.
duralion" oC the Oight. (iv) result :n additional
costs which would off,et the transoortal1on
sa~;::g', or (v) oller IIccoau:'lodatio"ns whiQ
. .
..
-1--
Nice of Management and Budget Circular A-122 (6/27/80)
~ not reaeonably adequat.e for the medical
e..c.. of the tnvelef'.
ct Neczsaary and re&aoD&bie COlts oC
u:illy lIllovementl and pel'1lonnel movemeuta
1 . !pedal or man naNn are allowabla.
ursuant to paragr1lpha 40 aDd 41. IUbjllCt to
llocatiOD on the b..il oC work or tilDe period
e::2litecl when appropriate. A~vanCll
~cs are particularly important.
e. DireCt chillies (or (oreign travel COlts are
!lowable only wben the travel ba, received
,:ior IPlJf'Oval oC the awarding agency, Each
elluat~ foreign trip mu.t be approved. For
U1i:lORS of !hi a provision. foreign travol il
'eiineC: iU any travel ouLSide o( Canada and
;,e Uniled States and ilslenitories and
a_ions. However. (or an o1'l!ani%ation
ocatd ic Coreign countries. the lenn "foreign
ravlrl- means travel outside that coW1lrj'.
CraLar.No, A-1ZZ!
",".ttvh -( C
'~ OrtanWitioaa not Subject to thia
;."CIIiaC
\eroapace Corporation. E1 Segundo.
Ca.lLfCll:'lllia
,~-;ortllt4 Universitie.s Aasociation. Chicago.
UlincU
;"ssoclated Universities'. Incorporated.
W a.shi:gton. D.C.
..:'~sociated Universities (or Research and
~traaamy, TUC30n. .l\ri%ona
Atomic: Casualty Commission. Wuhin;ton.
o.c.
5attelie Memorial Institute. Headquartered. in
Caiu:mbua. Ohio
E:aawven National Laboratory. Upton.
NewTon
Center far Energy a.ud Eltviroumental
Researt:h (c::ER), (University of Puerto
~ir;o)'
~wealth of Puerto Rico. Charles Sta.-k
Draper Laboratory, Incorporated
:.a::ttriqe. Musac:husetls. Comparative
Ar.wal Researc!l Laboratol1' (CARL)
["J:ti'\"trSity oCTennessee). Oakridge.
7er.nenee
~,::viro=entaJ Institute o{ Michigan. Ann
Arl:o~. Michigan
~al".!orc Environmental Health Foundaliou.
Ric:hlanci. Washington
1.7 Rlt5euch Institute. Chicago. minoi,
b:<tilute {or Defen,e AnlllY5il. Arlington.
vtr;iDia
bstilute of Ga& Technology. Chicago. Illinois
~{idwat Resean:n Institute. Headquanered
in Kwuas CIt}', Miuoun
};~it.-e- Cc:poraticn.. Bedford. Massachwetta
}.:~tarnl Enefij' Research and Development
I:actute.lnc.. (MERDI), Butte. Montana
~atiCt'lal Radiological As::onomy
Observatol1'. Green Bank. We,t Virginia
Cakriciill Assoeated Universit1u. Oakr.li8e.
Te=essee
~ieet Management ~I"iloration.. Oalcrid;a.
7en:essee
1\a.:1d Corporation.. Santa Monica. California
i\e,earch Triangle I..utitute. Reaearc.'1
7:iangie Parx. North Carolina
t:.iversicie Resean:h Institute. New York. New
York
Sandia Co:poration.. Albuquerque. New
\.r~....:__
Southarn Research La.at1tuta. BIrm.l.D3ham.
Alaba.ma
SouthWell Research La.at1tute, San Antonia.
Texaa
SRI IDtemat10nal MeuJo Puk. Ca.J.l[omia
SYTlIC:t18e Reeearch ~rporatiou. SyraCUM,
New YorX
Universities Research A..ociation..
Incorporated (National Acceleration r.b).
ArJonne,lliinoiJ
Universitles Corporation {or AImOlpheric
Research. Boulder. Colorado
Nonprofit Insurance Companies such II Blue
Cross and Blue Shield 01'l!ani:aUons
Other nonprofit o1'l!a.ni%ationa .. negotiated
with 8warcl.i!1g agencies.
(FR Doc. -=::7lI f111'd ,..:~ 11:41 ...1
~ COOlE ~11H1"'"
Editorial Corrections to
OMB A-122
OFFICE OF MANAGEMENT AND
BUDGET
Circular A-122., "Cost PTincipJes for
Nonprofit Organizations"; Correction
AGENCY: Omce of Management and
Budget.
ACT10H: Final policy correction.
SUMMARY: This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 460ZZ,
July 8. 1960).
FOR FURTHER INFORMAT1ON CONTACT:
Palmer Marcantonio, Financial
Management Branch, Office of
Management and Budget. Washington.
D.C. 20503. (202) 395-4773.
. Page 46022, column 2 the second
P~ragraph 1, change Paragraph 5
"Compensation for. Personnel Services"
10 Pl1ragraph 6.
. Page 46022. column 2 Ihe second
Paragraph 2. change Paragraph 6
"Contingencies" to Paragraph 7.
. Pace 46022, column 3:
Pl1ragraph 4. change Paragraph 31.
"Equipment and Other Capital
Expenditures" to Paragraph 13.
. Paragraph 5. change Paragraph 26
"Meetings" to Paragraph Z4.
. Paragraph 6. change Paragraph Z7.
"Organiution Costs" to Paragraph'20.
. Paragraph 7, change' Paragraph 30
"Page charges in Professtional Journals"
to Paragraph 28.
. Paragraph 8. change paragraph 37
"Public lnfonnation Service Costs" to
Parngraph 36.
. Pl1ragraph 9. change Paragraph 43
"Rental Costs" to Paragraph 42.
. Paragraph 9a: in the fourth line. add
"up" between the words "only" and
"10": in the sixth line change "they" to
"il" .
. Parngraph 10. change Paragraph 51
..-r.....I.:pl rnr.IC:" f,., r:1r:"lr'~~!1h ~n
-- -I --
A-122:12
. Page 46024, column J Paragraph
4(a)(2) after "benefits reccived" add ";
or",
. Page 40025, column 1 ParagrAph 33,
change the reference. "Paragraph Z1 o(
Attachment B" to "Paragraph 19 of
Allachment B,"
. Page 46026, cofumn 1 Paragraph
4a.iii. in the sixth line, change "direct
cost" to "direct costs."
. Page 4602fi. column 2 Paragraph
Elc, changc "c'stablishmentof a rate" \0
"cstablishment of a !inal rate."
. Page 46026. column J Paragraph
E2b, in thc third line add thc following
nfter "a Federal agency shall"-"submit
ils initial indirect cost proposal
immediatelv."
. Poile 4iw.'27, column J Paragraph
" (3)(a). chan~c "workmen's
compensation" 10 "workerI"
compensation."
. Page 46028. column 1 Paragraph
Gf3(b), (the second line of colwnn 1)
chunge "Workmen's compensation" 10
"workers' compensation."
. Page 46030, .column J, paragraph
24b" the sixth line. change "allowable"
to "allowability".
Daniel F. MaoD,
Dudge! ond Management Officer.
IF'R Doc. 1I\-<<r.1 F'Iled :1-1_1: II:U omJ
81WHG CO<< :ll1Hl.....
Circular A-1Z2., "Cost Principles for
Nonprofit Organizations"
Correction
In FR Doc. 81-20270, appearing at
page 46022 in the issue of Tuesday, July
O. 1980, the following changes should be
made:
1. On page 46024. colwnn three. tbe
second sentence in paragraph 'A..s.b.
should read. "Specificlllily, 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 Tor services rendered
whenever the facilities or other
resources used in providing such
services have been fmanced directly. in
wbole or in part. by Federal funds:'
2. On page 46024. colwnn three. the
second complete sentence in paragraph
A.B. should read. "This is particularly
lrue in connection with organizations
that receive a preponderance of their
support from Federal agencies:'
3, On page 46025. column one.
paragraph B.2. should read. "2. /!u1y
direcl cost of a minor amount may be
treated as an indirect cost for rea'sons of
practicality where the accounting
trentmenl for such cost is consistently
nl"lplio'd In nil finRl r.o~1 nhicr.tiv(,!I."
\ ~
I
Office at Management and Budget Circular A-' 22 (6/27/80)
4. On page 46025. column oce,
paragraph B.4.!. should read. "f.
Administration of group benefits on
behalf of members or clients including
life nnd hospital insurance, annuity or
retirement plans. financial aid. etc."
5. On page 46025, column two. the first
sentence in paragraph O,l.e. should
read, "The base period for the allocation
oC indirect costs is the period in which
such costs are incurred and acc\lmulated
Cor allocation to work performed in that
period."
6. On page 40026, column one. the
second sentence in paragraph D.3.d
should rend, "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 0.3.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
::alaries and wa,ges, or o,ther base which
results in an equitable distribution."
B. On page 40026. column one. the first
and second sentences in paragraph
0.4.a. should read, "Some nonprofit
organizations treat all costs as direct
costs except general administration and
-general expenses. These organizations'
generally separate their costs into three
basiccate!!ories;.. ....
9. On page 48026. 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 suppor~ required. the
nature of the facilities or other resources
employed. the scientific disciplines or
technical skills im'olved. the
organizational arrangements used. or
any combinalion.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
cOMection with the negotiation and
approval process. the Office of
Management and Budget will lend
assistance as required to resolve such
problems in a timely maMer."
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 Ilre
necessar)' 10 meet fluctuations in
workloads: or",
12, On plJge 46030. column one. Ihe
second senlence in paTagraph 16.c.
should read. "Such costs are allowable.
provided Ihe capacity is reasonably
anlir:ipated to be necessary or WIiS
originally reasonable and is not subject
10 reduction or elimination by sublelling,
renling, qr 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 10 be allowable musl be
supported by evidence of bonR fide
services available or rendered."
IIILUHG COOl! 1505-0 ''''
I
A-1ZZ:13
,
..
I-
....~.::
~UMMl,,;."'dn DEVELOPME."'lT 09:1551
APPENDIX .:t. HDR RF-372
ADMINISTRAtiVE REQUIREMENTS FOR GRA4TS AND COOPERA TrVE 4-25-88
AGREEMENTS TO ~ATE, LOCAL AND FEDERALLY RECOGNIZED INDIAN TRrSAL
GOVERNMENTS
(24 CFR 85)
i
~
.,
')
PART as-AOMIHISTRA nVE
REOUIREMENTS FOR GRANTS AHD
COOPERA nVE AGREEMENTS TO
STATE. LOCAL AND FEDERALLY
RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
..
i1.
":=
Subp.rt A-<Oenera/
s..c.
85.1 Purpose and scope of lhis part.
lIS.:: Scope of subpart.
lIS.3 Definitions.
lIS.. Applicability.
lIS.S Effect onolher illSUanCes.
85.6 Additions and Exceptions,
Subpart 8-Pre-Aw.,.d Requirements
lIS.10 Form. (or applying (or granls.
lIS.ll Sla Ie plans.
B5,1% Special grant or subgranl conditiuns
(ur "high.risk" grantees.
Subpart C-Post-Award Requiremenu
rUlancial Admini,trauoa
85.20 Slandards (or financial manallllmenl
s~'lItems.
85,21 Paymenl requirements.
65.22 Allowable COSls.
65.23 Period of availabilily of (unds.
65.::-4 Malching or cosl sharing.
lIS.2S Prosram income.
8S.26 . Non-Federal audils.
Chaages. Property, IUld Sub.owards
65.30 Change. under discrelionlllj' (project)
awards.
85.31 Real property.
85.32 Equipment.
85.33 Supplies.
85,34 Copyrights.
B5.3S Subawards 10 debarred and
suspended parties.
es.36 Procurement
B5.J7 Subgranls.
Reports. Record. Relention. and Enforcemenl
8.5.40 MonitOring and reportinll program
performance.
85.41 Financial reporting,
85.":2 Retention and acc~lIs requirements (or
records.
05,43 Enforcement.
85.44 Te~mination (ur convenience.
Subpart D-After.the-Grant Requiremenu
85.SO Closeout
85..51 Liller disilllowances and ildjullml'nlS.
85.5:! ~Ileclion o( amounts due.
Subpart E-Entltlemenu (Reserved)
Aul.borit~": Section 7Id), Department oC
/-lousing and Urban Development Act. ~2
U.S.c. JS3S(d).
[53 FR 8068, 8088, Mar. 18, 1988J
Subpart "-General
f 8S.1 Purpose. ucI scope of tIUa part.
This part estabnma unifarm
administrative rules tar Federal granu
and cOoperative -rreement. and
subaward. to State. local and Indian
tribal govemmenta.
f 85.2 Scope of IUbpart.
This subpart contairu general rules
pertaining tet etzirplU't and procedure
(or control of exceptions from thi. part.
f 85.3 DefiDitiollS,
As u"ed in this part:'
"Ac:crued expendihJreoJ" mNn the
charges inc:mT'ed by the srant~ during"
given period requinft! the provisioon of
funds for: (1) Good. and otheor hlf1!J'ble
property received: (2).ervicu
performed by employee., contractors,
subgrantees, .ubcontractors, and other
payees: and (3) other ~t3 becomin!
owed under progranu far which no
current services or performance is
required. such as annuities, insurance
claims, and Qt.bcr benefit payments.
"Accrued income" means the sum of:
(1) Eaminp during a gi?en period from
services P=fu....ed. by the 81'ZDtft aDd
goods and other tangib~ property
deli?ered to purchaRl'3, and (2' amoanta
becoming owed to the grarrt~ far which
no CUlftDl aerviceS or performance i.s
required bylbe grantee.
"A:cquis.itiOD CQ,Sl" cU an it~ of
purchased equipment means the Det
invoice unit price of the property
including the cost or modifications.
a Itachments. aceessories. or al1Xiliary
l1pparatus neceuary to make the
property usable Cor the purpose Cor
which it was acquired. Other charges
such as the cost af iDstallatioc.
trl1nsportation. taxes, duty Ql' protective
in-transit insurance. sb.aU be included or
excluded from the unit acquisition cost
in accordance with the grantee's r.egular
accounting practices.
.. Administrative" requiremerlts mean
those matters common to grants in
$eneral. such as financial management.
kinds and frequency of repo~. and
. retention of recc.J"dL'I'hae are
distinguished from "programmatic"
requirements. whicbconc:.enJ maner3
that can be treated only on a program_
by-program or grant-by~rant b.a.sis. such
a! kinds of activities that can be
supported by grants under a particular
program.
Publisned by Warren, Gornam. & Lamont Inc.
"Awarding agency" mean. (11 with
respect to . gnnt. the Federal .~.
and (2) with respect 10 a .ubsranl. the
party that awarcled ~ 'uOvaat.
"Casb contribution," mean, the
gran lee'. ca.h outlay. includinB' the
outlay of monlY contriOaaed to rhe
grant~ or aub"Bntee by other pablic.
ageDCies aDd in.titation&. &Dd private
organiuDana and l.ndividtW.. When
authorized by Fedena! le8i.la.t:io:.
Feden.J. lunda received from other
assistance agreements may be
considered. aa grantee or aubgnnt~
cash conttibations.
"Contract" ~.DI (ex.cept aa u.sed in
the de!WtiOQ& lor "graat~ IUld
"subgrant" in this section and except
where qualiEied by "FederaJ"l a.
prot"llrement COI1tract UDder a grant ot
subgranl... aDd meana a proc~ent
subcontract under . contract.
"Co&l sharing or marching" means. the
value Qf the third. party i:o-kind
contributions &Dd. the POrtion of tlu
cosa oI a federally a.sai.te.d project a:
program DOt bor:.e by the Federal
Government.
"Cost-type contract" m.eans a contract
or mbco.ntract under a grant in which
the contrac.tor or subcontractor is paid
on the basis of the costs it incurs. with
or without a fee.
"Equipment~ means tangible,
nonexpendable, personal property
having a u.efulli!e Gf more than one
year and an acquisition cost of s:s..ooo or
more per unit. A grantee may use its
own definition of equipment provided
that such defmition would at least
include all equipment aeflned above.
"Expenditure report'" means: (ll For
nonconstI'uctioIl grants, the SF-Z69
"Financial Status R~ort" (or other
equivalent report}; (zt for corrstractian
grants. the SF-27I ~Outiay Report and
Requ~t for Reimbarsemmt" {or otheT
equivalent report),
"Federal~ recognized Indian tribal
govemment~ mean:r the govemil1f body
or a governmental ~ of any Indian
tribe, band. nation. ar other organized
group or community (induding any
Native riIIage as defined in section 3 of
the Alaska Ncrti"e Claims Se't1lemmt
Act. 85 Stat 683) certified by the
Secretary of the mtenOf' a. eligible for
the special J:l"!'O'8t'am. and sen>icn
provided by him through the Bureaa ol
Indian Affain.
"Government" means 8 State 01' local
government Cl:' a federally recognized
Indian tribal ROVe:-nment.
41
. 09:1552'
"Grant" means 11I1 aWlU'd of fiDaDcial
assistance. including cooperative
qreements. in the form or money. or
property in Heu of money, by the FederaJ
Govemment to an eligible grantee. The
tenn does not include teclmica1
..sistm~ which provides semca
instead o( money. or other assistance in
the form of renna~ sb8rins. loaDS. Ioau
lUarantee.. interest subsidies.
inswaace. or direct appropriations.
Also. the term doe. nol include
asaisCaDce. sucb .. . fellowship or other
lump swn award. wbicla the If8DCee is
not required to account for.
"Grantee" meana the government La
which a grant i. awarded and which is
accountable for the use of the funds
providecL The grantee La the enUre 1ega1
entity even if only a particular
component of the emity is designated in
the grant award document.
"Local goven:unent" meaDS a county.
municipality. c:i.ty. tOWG. township. local
pu~ authority (iDciudina any public
and Indian bousiq agency W\dft the
UnUed States HouaiQg Act or 1931}
school district. special di&tri.&:t. in.1ra&late
district. coUDcil of IJOV~Dt~
(whether IX nol iDCOrporated .s a
nonprofit corporatiOll under slale law).
aDY other reg~ or interstatl'
government entity. or any agency or
instrumentality of a l~ 8Ovemmm:at.
"Obiiptioas" IIIaZII the lUDOIlJIta of
orde~ ptac:ed. con.tJ'aCU aud ~
awarded. pda lUId services receiYed.
and similar tr=o-cti.... durins a givea
period that Will reqIIire p8JIUJIt by the
gnmtee. cWriag the sama or a future
period.
"OMB" ml!aDS \:be Uuited Stales
Office of MaD8gellleDt ad Badget.
"Outlays" (expenditures} mean
charge. made to the project or program.
They may be reported on a cash or
accrual basis. Far reports prepared on a
cash basis. outlaYIr are the sum of actual
cash disbursement far direct charges far-
goods and services. the amount of
indirect expense incurred. the value of
in-kind contributions apptied. and the
amount of cash advan=s and payments
made to coatracto~ aud mbgrantees.
FOr'reportS prepared on aa accrued
expenditure basis. outlays are th~ sum
of actual cash disbursements. the
amount of indirect expeDM iDcwred. tbe
value of inkind contributions applied.
and the new inaease (or decrease} in
the amounts owed by the grantee for
goods and other property received. for
services performed. by employees.
contractor.. subgrantees.
subc.antrac1ors. and otber payees.. and
other amoWlta bec:amiD@ owed under
programs for which no current services
or performance are reCluired. such as
annuities. inaura.a.ce claims. and other
benefit ~yments..
..
HOUSING AND DEVELOPMENT REPORTER
of thJ authority by.the grantee or
subgrantee. '-rennination" doel Dot
include: (1) Withdrawal oC fund.
awarded on the ba.i. of the grantee's
undere.timate of the unobligated
balance in a prior period: (2)
Withdrawal of the WlobUgated balance
as of the expiration oC a grant (3)
Refusal to extend a grant or ltward
additional fWlds. to make a competing
or noncompetina continuation. renewal.
extension. or supplemental award: or (4)
voiding of a grant upon determination
that the award was obtained
fraudulently. or was otherwise illegal or
invalid from inception.
"Term. of a grant or subsrant" mean
all requirements of the grant or
subgrant, whether in statute.
regulations. or the award document.
''Third party in.kind contributions"
mean property or services which benefit
11 federally assisted project or program
and which are contributed by non-
Federal third parties without charge to
the grantee, or a cost-type contractor
under the grant agreement.
"Unliquidated obligations" for reports
prepared an a cash basi. mean the
amount of obligations incurred by the
grantee that has not been paid. For
reports prepared on an accrued
expenditlOre basis. they represent the
amount of obligations incurred by the
grantee for which an outlay has not
been recorded.
"Unobligated balance" means the
portion of the funds authorized by the
FederaJ agency that has not been
obUgated by the grantee and is
determined by deducting the cumulative
obligations from the cumulative funds
authorized.
~ 85.4 Applicability.
I
"Percentage of compleUoa method"
refers Ia . .,stem ander wbich
payments are made fDr CODltnlCtion
work ac.cordiB& to the percentap of
completion of the work. rather than to
the grantee's cost locurreG.
"Prior approval" JDellDS
documentatiaa evidencing COMent prior
to inczuring specific coaL
"Real property" means land. including
land improvements. structures and
appurtenances thereto. excluding
movable machinery and equipment.
''Share''. when referring to tbe
awarding agency's portion of real
property. equipment or .upplies. means
the same percentage as the awarding
agency', pOrtion of the acquiring party'.
total costs under the grant to which the
acquisition costs under the grant to
which the acquisition cost of the
property was.d1arged. Only costs are to
be counted-not the value of third-party
in-kind contributions.
"Slate" means any of the several
Slates of the United State.. the District
of Columbia. the Commonwealth of
Puerto Rico. any territory or possession
of the United States. or any agency or
instrumentality of a Slate exclusive of
local governments. The tenn does not
include any public and Indian housing
agency under United States Housing Act
of 1937. -
''Subgrant'' means an award of
financial assistance in the farm of
money, or property in lieu of money.
made under a grant by a grantee to an
eligible subgrantee. The term includes
fmancial aSsistance when provided by
contractual legal agreement. but does
nut include procurement purchases. nor
does it include any farm of as.istance
which is excluded from the defu1ition of
'.grant" in this part.
"Subgrantee" means the government
or ather legal entity to which a subgrant
is awarded and which is accountable to
the grantee for the use of the funds
provided.
"Supplies" means all tangible
personal property other than
"equipment" as defined in this part.
"Suspension" means depending on the
context. either (1) temporary withdrawal
of the authority to obligate grant funds
pending corrective action by the grantee
or 4ubgrantee or a decision to tenninate
the grant. or (2) an action taken by a
suspending official in accordance with
agency regulations implementing E.O.
12549 to immediately exclude a person
from participating in grant transactions
for a period. pending completion of an
investigation and such legal or
debarment proceedings as may ensue.
"TerminJltion" means permanent
withdrawal of the authority to obligate
previously-awarded grant funds before
that authority would otherwise expire. It
also means the voluntary relinquishment
Published by Warren. Gorham & Lamont. Inc.
(a) GeneraL Subparts A-D of this part
apply to all grants and subgrants to
governments, except where inconsistent
with Federal statutes or with regulations
authorized in accordance with the excep-
tion provision of ~ 85.6. or;
(1) Grants and subgrants to State and
local institutions of higher education or
Slate and local hospitals.
(2) The block grants authorized by the
Omnibus Budget Reconciliation Act of
1981 (Community Services; J;'eventive
Health and Health Services;' Alcohol.
Drug Abuse. and Mental Health
Services; Maternal and Child Health
Services; Social Services; Low-Income .
Home Energy Assistance: States'
Program of Community Development
Block Grants for Small Cities; and
Elementary and Secondary Education
other than programs administered by the
Secretary of Education under Title V.
Subtitle D, Chapter 2. Section 583-the
Secretary's discretionary grant program)
and Titles I-ill of the Job Training
42
.:~\.
.J
-
COMMUNITY DEVELOPMENT
I
.,
)
Partnership Act of 1982 and under the
Public Health Service. Act (Section
19%1). Alcohol and Drug Abue
Treatment and Rehabilitation Block
Grant and Part C ofntle V. Mental
Health Service lor the HomeJes. Block
Grant).
(3) Entitlement grants to carry out the
lollowing programa of the Social
Security Act:
(i) Aid to Needy Families with
Dependent Children (Title IV-A of the
Act. not including the Work Incentive
Program (WIN) authorized by section
402(a)19(C): HHS grants for WIN are
subject to this part}:
(ii) Child'Support Enforcement and
Establishment of Paternity (Title IV-D of
the Act):
(iii) Foster Care and Adoption
Assistance (Title IV-E of the Act):
(iv) Aid to the Aged. Blind. and
Disabled (Titles L X. XIV, and XVI-
AABD of the Act); and .
(v) Medical Assistance (Medicaid)
(Title XIX of the Act) not including the
State Medicaid Fraud Control program
authOrized by section 1903(a)(6)(B).
(4) Entitlement grants under the
following programs of The National
School Lunch Act:
(i) School Lunch (section 4 of the Act).
(ii) Commodity Assistance (section 6
of the Act),
(iii) Special Meal Assistance (section
11 of the Act).
(iv) Summer Food Service for Children
(section 13 of the Act). and
(v) Child Care Food Program (section
17 of the Act).
(5) Entitlement ~ts under the
following programS of The Child
Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act).
and
(H) School Breakfast (section 4 of the
Act).
(6) Entitlement grants for State
Administrative expenses under The
Food Stamp Act of 1977 (section 16 of
the Act).
(7) A grant for an experimental pilot.
or demonstration project that is also
supported by a grant listed in paragraph
(a)( 3) of this section:
(8) Grant funds awarded under
subsection 412(e) of the Immigration and
Nationality Act (8 U.s.c. 1522(e)) and
subsection 501(a) of the Refugee
Education Assistance Act of 1980 (Pub.
L. 96-422. 94 Stat. 1809). for cash
assistance. medical assistance. and
supplemental security income benefits
to refugees and entrants and the
administrative costs of providing the
assistance and benefits:
(9) Grants to local education agencies
under 20 U,S.C. 236 through 241-1(8),
and 242 through 244 (portions of the
Impact Aid program). except for 20
U.s.e. 238(d)(2)(c) and 24O(f)
(Entitlement Increase for Handicapped
Children): and
(lDl PI.... wider the Ve~
Administration's State' Home Per Diem
Pntp&a (3& U.s.c. M1lan,
(b) ElItilkm.", PI"DflUms. Eutit1cm~t
pJ'OSrUDS euumeratecl above m
f 8S.4(a)(3)-{8) are subject to Subpart E.
f 85.5 Effect OD otller iaaaaeeL
All other grants admiDistration ~vi-
sions of codified program regulations,
program manuals, handbooks and other
nonregu!atory materials which are incon-
sistent with this part are superseded.
except to the extent ~ are required .by
swute, or authorized m accordance With
the exception provision in f 8S.6.
f 85.6 Additioas ad exceptions.
(a) Far cl..... of sran" and grantees
subject to un. put. Federal apncies
maynotimpoee adciitionel .
adminis....tive re~t. except m
codified resu)ationa pablisbed in ft.
Federal R~
(b) Exceptions Cor claues of sranr. or
grantees may be authorized aNy by
OMB. _
(c) Exceptions on a case-by-case basis
and for sabgma.... may be autbarized
by the affected Federal &genaes.
ScdIpart e-flnt-Awn ~...._.b.
f 85.10 Forms for applyiDg for grants.
(a) Scope. (1) This section pnl8Cribes
fonna and ~.... to be ased by
govemmeutaJ orp.Dizations (except
hospitals and institutions of higher
education operated by a BOYemmentJ in
applying Cor grants. This section is not
applicable. ~er. 10 formula srant
programs which do not require
applicants 10 apply for fands on a
project basis.
(2. This sectioD applies only to
applications to Federal agencies for.
grants. aDd ia Dbl ~qui.red to be applied
by grantees in deaJins with applicaata
fof' sutJsnmta. However. gr&IIteea are
encouraged to avoid more detaUed or
burdensome appticatiGla requ.irements
for sabsraats.
(b) Authorized forms aDd WlruCtjOllB
for governmentDJ tJI'1IGIfizDtilJl1$. (1) In
applyiDg for graDts. ~ls shall only
use standard applic8tian farms or those
prescribed by the gr&lltiag agency with
the approval of OMB ader the
Paperwork Reduction Act of 1986.
(2) Applic:aota are not required to
submit more thaft the original and two
copies of preappHcatiooa or
applications.
Published by Warren. Gorham & Lamont, Inc.
I
09:1553
HDR RF-372
4-25-88
(3) App!ic:anta awst follow all
applicable ..slnN:UaDa that bear OMB
clearance numbers. Federal aaeaae.
may apecify aDd describ. the programL
functions. or activities that will b. used.
to plan. buQset. and evaluate the ~
under a paL Otber-IUPJMematllrY
instructioBa may be issued _, with the
approval of OMS to the eXleDt reqWred
Uuder !be Paperwork ReducUota Act of
198Q. For- any ataDdard fona. except the
5F424 facesbeeto Federal a&eDCies ma,
sbede out ow iutruc:t the appJicaDt to
disregard any line item lbat is DOl
needed. .
(4) When a pantee applies !or
additional fUDdinS (auch aa a
continualioD or ...pp1emutal award) 01
amenda a previou.sJy aubmitted.
a ppllcatiQll" only the afCec:ted paga
need be submittad. Previou.a1y IWlbmitted
pages with informatiaa: that is still
current Dead not be resubmitted.
~ 85.11 State plans.
(a) Scope. The statutes Cor some
programs require States to submit plans
before receiving grants. Under
regulatioru implementing Execntive
Order lZ37%. "Intergovernmental Review.
oC Federal Programs," States are
allowed to simplify, consolidate and
substitute plans. This section contains
additional provisions for plans that are
subject to regulations implementing the
Executive Order.
(b} RequilWMffts. A Slate need meet
only Federal acfmini:rtrative 01'
programmatic requiremeftt~ for a plell"
that are in stanrtelf or codified
regulations. .
(c) Assurances. In each plan the Stctte
will include an assurance that the Slate
shall comply with all applicable Federal
statutes and regulations in effed with
respect to the periods for which it
receives grant funding. For tbis
assurance and other assurances
required in the plan. the State maT-
(1) Cite by number the statutory or
regulatory provisions requiring the
assurance and affIrm that it gives the
assurances required by those provisi~.
rZ} Repeat the assurance language iD
the statutelJ or ~ation.. or
(3) Deove'op its own language 10 the
extent permitted by law.
(d) Amendments. A Slate will amend
a plan wheneYer necessary to reflect: (1)
New or revised Federal slalUtes or
regulations or (2). material change in
any State law. organization, policy. or
Slate agency operation. The State will
obtain approval for the amendment and
its ..ffecti.. date but need submit for
approval only the amended portions of
the plan.
43
09:1554. I
i 85.1% Special graat or IIIbcrut
coaditioas for "biP-risk" puteeL
(a) A grantee ors~aDteemaJ be
considered "high riak" if aD awarding
agency determines that a pnlee or
8ubgraAlee:
(1) Hu . hia&ory of unaaUalac&ory
perfOl'lDaDCL or
(2) Ia not &a.~y stable. or
(3) Hu a nuanep--t lYatem whida
doe. not meet u..JD8II8S....
standard8 set faith iD tbia put. 01'
(4) Has not canIanned to tenD& aad
conditione of pl'8Yioas ...nta. or
(SJ Is otherwise not responsible: and if
the awardins agency determines that an
award win be made. ~.i conditions
and/or re:rtrictfou shell "...u....pund to
the hish risk condition and sheD be
included in the eWllrd.
(b) Special condition. or restriction:r
"may incNde:-
(tt Payment on a reimbursement
ba.is:
[Z} Withholding authority to proceed
to the next phan until receipt of
evidence of acceptable performance
within a given funding period:
(3) Requiring additional. more detailed
financial reports:
(4) Additicma1 project mcmiloring:
(5) RequiriDg the grute or aubgrantee
to obtain tecimica1 or maDageme.nt
assiataDCe: or .
(6) Estab1i&iWa& additioDal prior
approvala.
(c) If aD awarding ....C)' deciOes to
impose SIaCb: condiuoas. the awarding
official will notify the graatee or
8ubpanteellll early a.,possible. in
writing. of:
(1) The nature of the special
conditions/ restrictions:
(2) The reasonfs) for imposinB thesrr.
(3) ~ corrective actions which moat
be taken before they will be rem~
and the time allowed for completing the
corrective actions and
(4) The method of requesting
reconsideration oftfre conditions/
restrictions imposed.
Subp8rtc-Post-AWIInf Requirements
rmancial. .AodnWtiat,mua
i 85.20 Standards for fiDaacial
IlWUlgemeut systems.
(a) A State must expand and account
for grant funds in accordance with Slate
laws and procedures for expending and
accounting for its OWD funds. rllcal
control and accounting procedures oC
the SLate. as well as its subgrantees and
cost-type c.cmtrac.tars. must be Su.fftcienl
tl)-
{1} Permit preparation of reports
required by this part aDd the statutes
auth()rizing the grant. and
HOUSING AND DE'.LOPME~! REPORTER
~
(2) Permit the waciDg of fuDds to a electronic tranefer at funds methods. the
level of expeoditurea adequale \() grantee must mak. drawdowns as close
establish that neb fwwB have not been 88 poeaible to the time of making
u.ed in violatioa of the reslricUou &AU disbursements. Grant..:es must monitor
prohibibGDa of applicable .IatuteL cash drawdowns by their 8ubgrantees to
assure that they conform 8ubstantially
to the same staDdards of timIng and
amount as apply to advances to the
grantees.
(c) An awarding agency may review
the adequacy of the financial
management system of any applicant for
financial usistllDCe as part of a
preawardreview or at any time
subsequeDt to award.
i 85.%1 Paymeat.
(a) Scope. This section prescribes the
basic standard and the methods under
which a Pederal agency will make
payments to granteeL and grantees will
make payments to subgrantees and
contractors.
(b) Basic standard. Methods and
procedures Cor payment shall minimize
the time elapsing between the transfer
oC funds and disbursement by the
grantee or subgrantee. in accordance
with Treasury regulations at 31 CFR Part
205.
(c) Advances. Grantees and
subgrantees shall be paid in advance.
provided they maintain or demonstrate
the williDgneu and ability to maintain
procedures to" minimize the time
elapsing between the transfer oC the
funds and their disbursement by the
grantee or subgrantee.
(d) Reimbursement. Reimbursement
shall be the preferred method when the
requiremeDta in paragraph (c) oC this
section are not met. Grantees and
subgranteea may also be paid by
reimbursement for any construction
grant. Except as otherwi.e specified in
regulanon. Pederal agendes shall not
U&e the percentage of completion .
method to pay construction grants. The
grantee or .ubgrantee may. use that
method to pay its construction
contractor, and if it does. the awarding
agency's payments to the grantee or
8ubgrantee will be based on the
grantee's or subgrantee', actual rate of
disbursement.
(e) Working capital advances. II a
grantee cannot meet ,the criteria Cor
advance payments described in
paragraph (c) of this section. and the
Federal agency has determined that
reimbursement is not feasible because .
the grantee lacks sufficient worki:tg
capital, the"awa..-ding agency may
provide cash or a working capital
advance basis. Under this procedure the
awarding agency shall advance cash to
the grantee to cover ita estimated
disbursement needs for an initial period
generally geered to thi! grantee's
disbursing cycle. Thereafter. the
awarding agency shall reimburse the
grantee Cor its actual cash
(b) The financial management systems
of other grantees and subgrantees must
meet the following standards:
(1) Financial reporting. Accurate.
current. and complete diaclosure of the
financial resuJta of fiII.ncialIy assisted
activities must be macht in accordance
with the financial reporting
requirement. of the grant or subsrant.
(2) Accounting records. Grantees and
subpnteee must maintain record."
which adequately identify the source
and applicatioa of funds provided for
financial1y....isted activities. These
recorda must COntain infonnation
pertaiDinB to grant or lubsrant award.
and authorizations. obligations,
unobligated balaaces. aaaeta. liabilities.
outlay. or expenditures. and iDcome.
(3) lntsmol control. Effective control
and accountability must be maintained
Cor aU grant and IUbgrant cash. real and
personal property. ud other aase!L
Grantees and subgranteee must
adequately safeguard all such property
and must aasure that it is uaed solely for
authorized purpoaes.
(4) Budget CDIIWJ. Actual
expenditures or outlays mUlt be
compared with budteted lUDOUDta for
each grant or aubgranL FInancial
infonnatiOD must be related to
performance or productivity data.
including the developJD8Dt of unit. cost
information wbeDeYer appropriate or
specifically requirecl ill the grant or
subgrant agreemeDt. II UDit cost data are
required. estimates based OD avai1abie
documentation will be accepted
whenever pouible.
(5) Allowable casL Applicable OMB
co.t priDcip1es. agency PJ'08nUD
reguJatiODs. and the terms of grant and
subsrant agreemeDts will be fonowed in
determining the reasonableness.
allowability. and allocability of costs.
(6) Source documentotion. Accounting
records must be supported by 8uch
source documentation as caDceDed
checks. paid bills. payroDa. time ud
attendance records. CODtract and
subgrant award documents. etc.
(7) Cosh managemenL Procedures for
minimizing the time elapsing between
the transfer of fund. from the US,
TreaslU'Y and disbaraemeftt by grantees
and subgnmten must be followed
whenever advance Pa,1.....ut prOCedures
are Wled. Grantees mast establish
reasonable procedures to ensure the
receipt of reports on sub@nntees' cash
balances and cash disbursements in
sufficient time to enabie them to prepare
complete and accurate cash transactions
reports to the awarding agency. When
advances are made by letter-oC-aedit or
Publistled by Warren, Gorham & Lamont, Inc.
44
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COMMUNITY DEVELOPMENT
I
\
,
disbursements. The working capital
advance method of payment shall nOl be
used by grantees or subgrantees i{ the
reason {or using such method is lhe
unwillingness or inability of the gAIltee
to provide timely advance~e
subgrantee to meet the subgrantee's
actual cash diabursements.
(0 Effect of program income. refunds.
and audit recoveries on payment (1)
Grantees and subgrantees shall disburse
repayments to and iDterest earned on a
revolving fund before requesting
additional cash payments for the same
activity.
(2) Except as provided in paragraph
(0(1) of thia section. grantees and
subgrantees shall disburse program
income. rebates. refunds. contract
settlements. audit recoverieS and
interest eamed on such funds before
requesting additional cash payments.
(g) Withholding payments. (1) Unless
otherwise required by Federal statute.
awarding agencies shall not withhold
payments for proper charges incurred by
grantees. or subgrantees unless-
(iJ The gJ'8Dtee or subpntee has
f~iJed to comply with grant award
conditians or
(ii) The grantee or subgrantee is
indebted to the United States.
(2) Cash withheld for failure to comply .
with grant award condition, but without
suspension of the gnat, shall be released
to the grantee upon subsequent compli-
ance. When a grant is suspended. payme:at
adjustments will be made in acc:ordance
with ~ 85.43(c).
(3) A Federal agency shall not make
payment to pntees {or amounts that
are withheld by grantees or subgrantees
from payment to contractors to aasure
sa tisfactory completion of work.
Payments shall be made by the Federal
agency when the grantees or
subgrantees actually disburse the
withheld fuDda to the contractors or 10
escrow acccnmta establilhed to assure
satisfactory completion of work.
(b) Cash depositories. (1) Consistent
with the rwtioDal goal of expanding ,th
opportunities for minority businesa
enterprises. grantees and subgrantees
are encouraged to use minority banks (a
bank which is owned at least 50 percent
by minority group members). A list oC
minority owned ba.nks caD be obtained
from the Minority Business Development
Agency. Department of Commerce.
Washington, DC 20230.
(2) A grantee or subgrantee shall
maintain a separate bank account onJy
when required by Federal-Slate
agreement.
(i) interest earned on advances.
Except for interest earned on advances
of funds exempt under the
Intergovemmental Cooperation Act (31
U.S,c. 6501 et seq.) and the Indian Self-
Determination Act (23 U.S.c. 450),
grantees and subgrantees shall
promptly. but at least quarterly, remit
interest earned on advances to the
Federal agency. The grantee or
subgrantee may keep interest amounts
up to $100 per year for administrative
expenses.
i 85.22 Allowable ~
(a) Limitation on use offunds. Grant
funds may be used only for:
(1) The allowable costs of the
grantees. sub'jrantees and cost-type
contractors. including allowable costs in
the form of payments to flXed.price
contractors: and
(2) Realonable fees or profit to cost-
type contractors but not any fee or profit
(or other increment above allowable
costs) to the grantee or subgrantee.
(b) Applicable cost principles. For
each kind of organization. there is a set
of Federal principles for determining
allowable costa. Allowable COlts will be
determined in accordance with the cost
principles applicable to the organization
iI)curring the costs. The following chart
lists the kinds of organizations and the
applicable cost principles.
For IJle COIItS 01 _ 'use !he principles in-
51... IOCIII or IndiM OMS Circular A-37.
b1l)eI 1I1r mill"""
Priwllte IlClIIIlRlIil OBM ClrcuI8r A-122.
organiZation 0Iher IIlan
an (11 _lIluliOft Of
higher educ:ation. (2)
tIospi1al. or I3l
organization named in
OMS Ctrcular A-l22
as not subject to Itlal
CIrCUlar.
EcSuca1Ion8I inIliIulions.-l OMS Circular 4-21.
For.profit ClrglnZa1Ion 48 CFR Part 31.
oltler tnan a IIosptal Comr8Cl CoIl
and an orgBniZation PnncipIes and
l181'1141dinOBM Proc:edlns..oruniform
~ A-122 as not cost accounung
SUllject to ll\al cirCUlar. SIanllarCls II\a1 lXImpty
Wl1n cost llrlftClOIes
acc:ep\abIe to IJle
FedlnI ~.
~ 85.%3 Period of sftilabllity of fUDds.
(a) General. Where a funding period is
specified. a grantee may charge to the
award onJy COlts resulting from
obligations of the funding period unless
carryover of unobligated balances is
permitted. in which case the carryover
balances may be charged for costs
resulting from obligations of the
subsequent funding period.
(b) Liquidation of obligations. A
grantee must liquidate all obligations
incurred under the award not later than
F>ubIished by Warren, Gcx:ham & Lamont. Inc.
I
09:1555
HDR RF-372
4-25-88
90 days after the end of the funding
period (or as specified in a program
regulation) to coincide with the
submission of the annual Financial
Status Report (SF-269). The Federal
agency may extend this deadline at the
request of the grantee.
i 85.24 MatchiDg or cost shariDg.
(a) Basic rule: Costs and contributions
acceptable. With the qualifications and
exceptions lilted in paragraph (b) of this
section. a matching or cost sharing
requirement may be satisfied by either
or both of the following:
(1) Allowable costs incurred by the
. grantee. subgrantee or a cost-type
contractor under the assistance
agreement. This includes allowable
costs bome by non-Federal grants or by
others cash donations from non-Federal
third parties.
(2) The value of third party in-kind
contributions applicable to the period to
which the cost sharing or matching
requirements applies.
(b) Qualifications and exceptions-(1)
Costs borne by other Federal grant
agreements. Except al provided by
Federal statute. a cost sharing or
matching requirement may not be met
by costs bome by. another Federal grant.
This prohibition does not apply to
income eamed by a grantee or
subgrantee from a contract awarded
under another Federal grant..
(2) General revenue sharing. For the
purpose of this section. general revenue
sharing funds distributed under 31
U.S,c. 6702 are not considered Federal
grant funds.
(3) Cost or contributions counted
toward~ other Federal c~tS:-I:horing
requirements. Neither costs nor the
values of third party in-kind
contributions may count towards
satisfying a cost sharing or matching
requirement of a grant agreement if they
have been or will be counted towards
satisfying a cost sharing or matching
requirement of another Federal grant
agreement. a Federal procurement
contract. or any other award of Federal
funds.
(4) Costs fuuznced by program income.
Costs fmanced by program income, as
defined in ~ 85.25, shall not count towards
satisfying a cost sharing or matching
requiremetn unless they are expressly per-
mitted in the terms of the assistance
agreement. (This use of general program
income is descn'bed in ~ 85.25(g).)
(5) Services or property financed by
income earned by contractors,
Contractors under a grant may earn
income from the activities carrie"d out
undel"'the contract in addition to the
amounts earned from the party
awarding the contract. No cosls of
services or property supported by this
45
09:1556
income may COlUlt tQward satisfying a
cost sharing or matching requirement
unless other provisions of the grant
agreement expressly permit this kind of
income to be used to meet the
requirement.
(6) Records, Costs and third party in-
kind contributions counting towards
satisfying a cost sharing or matching
requirement must be verifiable from the
records of grantees and subgrantee or
coat-type contractors. These recorda
must show how the value placed on
third party in-kind contrtbutioD8 .was
derived. To the extenUeasible.
volunteer services will be supported by
the same methods that the organization
uses to support the allocability of
regular persoMel costs.
(7) Special standards for third party
in-kind contributions. (i) Third party in-
kind contributioD8 count towards
satisfying a cost sharing or matching
requirement only where. if the party
receiving the contributioD8 were to pay
for them. the payments would be
allowable costs.
(ii) Some third party in-kind
contributions are goods and services
that. if the grantee. subgrantee. or
contractor receiving the contribution
bad to pay for them. the payme'1ts
would have been an indirect costs.
Costs sharing or matching credit for
such contributions shall be given only if
the gtantee. subgrantee. or contractor
bas established. along with its regular
indirect cost rate. a special rate for
allocating to individual project. or
programs the value of the contributions.
(ill) A third party in-kind contribution
to a fixed-price contract may count
towards satisfying a cost sharing or
matching requirement only if it results
in:
(A) An increase in tbe services or
property provided under the contract
(without additional cost to the grantee
or subgrantee) or
(B) A cost savings to the grantee or
subgrantee.
(iv) The values placed on third party
in-kind contributions for cost sharing or
matching purposes will conform to the
rules in the succeeding sections of this
part. If a third party in-kind contribution
is a type not treated in those sections.
the value placed upon it shall be fair
and reasonable.
(c) Valuation of donated services-(1)
Volunteer services. Unpaid services
provided to a grantee or subgrantee by
individuals. will be valued at rates
consistent with those ordinarily paid for
similar work in the grantee's or
subgrantee's organization. If the grantee
or subgrantee does not have employees
HOUSING AND DEiLOPMENT REPORTER
and only depreciation or use allowances
may be counted for donated eqUlpment
and buildings. The depreciation or use .
allowances for this property are not treat-
ed as third party in-kind contnbutions.
Instead. they are treated as costs incurred
by the grantee or subgrantee. They are
computed and allocated (usually as indi-
rect costs) in accordance with the cost
principles specified in f 85.22. in the same
way as depreciation or use all!,,,:ances for
purchased equipment and buildings. The
amount of depreciation or use ~o!,ana:s
for donated equipment and buildings IS
based on the property's market value at
the time it was donated.
. (0 Valuation of grantee or subgrantee
donated real praperty for construction/
acquisition. If a grantee or subgrantee
dona tel real property for a construction
or facilititts acquisition project, the
current market value of that property
may be counted as cost sharing or
matching. If any part of the donated
property was acquired with Federal
funds. only the non-federal share of the
property may be counted as cost sharing
or matching.
(g) Appraisal of real property. In some
cases under paragraphs (d). (e) and (0 of
this section. it will be necessary to
establish the market value of land or a
building or the fair rental rate of land or
of space in a building. In these cases. the
Federal agency may require the market
value or fair rental value be set by an
independent appraiser. and that the
value or rate be certified by the grantee.
This requirement will also be imposed
by the grantee on subgrantee~.
1-
perfonning similar work. the rates will
be consistent with those ordinarily paid
by other employers for similar work in
the same labor market. In either cas~ a
reasonable amount for fringe benefits
may be included in the valuation.
(2) Employees of other olJanizations.
When an employer other than a grantee.
subgrantee. or cost-type contractor
furnishes free of charge the services oC
an employee in the employee's normal
line of work. the services will be valued
at the employee's regular rate oC pay
exclusive' of the employee's fringe
benefits and overhead costs. If the
services are in a different line of work.
paragraph (C)(1) oC this section applies.
(d) Valuation of third porty donated
suppJi_ and loaned equipment or space.
(I) If a third party donates supplies. the
contribution will be valued at the
market value of the supplies at the time
of donation.
(2) If a third party donates the use of
equipment or space in a building but
retains title. the contribution will be
valued at the fair rental rate of the
equipment or space.
(e) Valuation of third porty donated
equipment buildings. and land. If a third
party donates equipmenL buildings. or
land. and title passes to a grantee or
subgrantee. the treatment of the donated
property will depend upon the purpose
of the grant or subgranL as follows:
(1) Awards for capitol expenditures. If
the-purpose of the grant or subgraut is to
assist the grantee or subgrantee in the
acquisition of property. the market value
of that property at the time of donation
may be counted as cost sharing or
matching,
(2) Other awards. If assisting in the
acquisition of property is not the
purpose of the grant or subgrant.
paragraphs (e)(2) (i) and (il) of this
section apply:
(i) If approval is obtained from the
awarding agency, the market value at
the time oC donation of the donated
equipment or buildings and the fair
rental rate of the donated land may be
counted as cosl sharing or matching. In
:.':1e case of a subgrant. the terms of the
grant agreemf'nl may require that the
approval be obtained from the Federal
agency as well as the grantee. In all
cases. the approval may be given only.u
a purchase of the equipment or rental Qf
the land would be approved as an
allowable direct cosL If any part of the
donated property was acquired with
Federal funds. only the non-federal
share of the property may be counted as
cost-sharing or mlltcbing.
(ii) If approval is not obtained under
paragraph (eX2)(i) of this section, no
amount may be counted for donated land.
J)ublislled by Warren, Gomam & Lamont, Inc.
f 85.%5 Program income.
(a) General. Grantees are encouraged
to earn income to defray program costs.
Program income includes income from
fees for services performed. from the use
or rental of real or personal property
acquired with grant funds, from the sale
of commodities or items fabricated
under a grant agreement. and from
payments of principal and interest on
loans made with grant funds. Except as
otherwise provided in regulations of the
Federal agency, program income does
not include interest on grant funds.
rebates, credits. discounts. refunds. ete.
and interest eamed on any of them.
(b) Definition of program income.
Program income means gross income
received by the grantee or subgrantee
direc.:t1y generated by a grant supported
activity, or earned only as a result of the
grant agreement during the grant period.
"During the grant period" is the time
between the effective date of the award
and the ending date of the awlU'd
reflected in the final financial report.
46
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l,;UMMUNJ.TY DeV.cJ.,Ut'Ml:.NT
(c) Cost algenerating protra~1 .,
income. If authorized by Federal
regulations or the grant agreement. roOsts
incident to the generation of program
income may be deducted from gross
, income to detennine program income.
(d) Governmental revenues. Taxes.
special assessments. levies. fines. and
other such revenues raised by a grantee
or subgrantee are not program income
unless the revenun are specifically
identified in the grant agreement or
Federal asency replations as progrrtm
income.
(e) ROJ1G/da. Incoaie froai royalties aad
, license fees for copyrighted material, pat-
ents, aad inventions developed by a grant-
ee or subgrantee is program income only if
the revenues are specifically identified in
the grant agreement or Federal agency
regulations as program income. . (See
~ 85.34.)
ro Property. p~ from the sale of
real property or eqwpment will be han-
dled m accordanc::c with the requirementS
of ~i 85.31 aad 85.32.
(S) Use 01 program income. Program
income .hall be deducted from outlays
which may be both Federal and non-
Federal as described below. unless the
Federal agency regulations or the grant
agreement specify another alternative
(or a combination of Lbe altemanves).In
specifying alternative.. the Federal
agency may distinguish between income
eamed by the grantee and income
earned by subgrantee. and between the
, source.. kinds. or amounts of income.
When Federalll8encies authorize the
altematives in paragraphs (g) (2) and (3)
of this section. program income in
excess of any Um~ stipulated shall also
be deducted from' outlays.
(1) Deduction. Ordinarily program
income shall be deducted from total
allowable costs to determine the net
allowable costs. Program income shall
be used for current costs unless the
Federal agency authorizn otherwise.
Program income which the grantee did
not anticipate at the time of the award
shall be used to reduce the Federal
agency.and grantee c:ontributions rather
than to increase the funds committed to
the project.
(2) Addition. When authorized.
program income may be added to the
funds committed to the grant agreement
by the Federal agency and the grantee.
The program income shall be used for
the purposes and under the conditions of
the grant agreement.
(3) Cost sharing or matching. When
authorized. program income may be
used to meet the cost sharing or
matching requirement of the grant
agreement. The amount of the Federal
grant award remains the same.
(h)lncolIHI after thtJ award period I
There are no Federal requirements
governing the dispoaition of program
income earned after the end of the
award period (i.a.. uatil the endiDg date
of the final financial rwport. see
paragraph (a) of this aection). unle.. the
terms of the agreement or the Federal
agency regulations provide otherwi~~
~ 85.26 NOll-Federal audiL
(a) Basic Rule. Grantees and
IUbgrantees are raponsible lor
obtaining audi1f.iD accordance with the
Single Audit Act of 1984 (31 U.s.e. 7501-
, 7) and Federal agency implementin.
. rquJatiODL The audits shall be made by
an independent auditor in accordance
with generally accepted government
auditilll Itandards covering financial
and complience audita..
(b) Subgrantfts. State or loc:ll
governments. aa those terms are defined
for purpoln of the Single Audit Act.
that receive Federal financial assistance
and provide SZS.OOO or more of it in a
fiscal year to a subgrantee shall:
(1) Determine whether State or local
subgrantees have met the audit
requirements of the Act and whether
subgrantees covered by OMS Circular
A-110, "Uniform Requirements for
Grants and Other Agreements with
Institutions of Higher Education.
Hospitals and Other Nonprofit
Organizations" have met the audit
requirement. Commercial contractors
(private forprofit and private and
governmental organizations) providilll
goods and services to State and local
govemments are not required to have a
single audit performed. State and local
govenments should use their own
procedures to ensure that the contractor
has complied with laws and regulations
affecting the expenditure of Federal
funds:
(2) Oeterminewhether the subgrantee
spent Federal assistance funds provided
in accordance with applicable laws and
regulations. This may be accomplished
by reviewing an audit of the subgrantee
made in accordance with tM Act.
Circular A-lID. 'or through other means
(e.g" program reviews) if the subgrantee
has not had such an audit:
(3) Ensure that appropriate corrective
action is taken within six months after
receipt of the audit report in instance of
noncompliance with Federal laws and
regulations:
(4) Consider whether subgrantee
audits necessitate adjustment of the
grantee's own records: and
(5) Require each 8ubgrantee to permit
independent auditors to have access to
the records and financial statements.
PublisI'led by Warren, Gorham & Lamont. . Inc.
tr.:t:lOO'{
HDRRF -372-
4-25-88
(c) AlIliitor .kction. hi arra'iigmi' for
audit services. ~ 85.36 shall be followed.
Chaal~ Froperty. an~ SubawuU
t 85.30 CIaaps.
(a) General, Grantees and aubgrantees
are permitted to rebudget within the
approved direct coat budget to meet
unanticipated requirements and may
make limited program changes to the
approved project. However. unless
. waived by the awardins agency. certain
types of post-award challlea in budgets
and projecta ahall require the prior
written approval of the awarding
agency,
(b) Relation to cost principJes.'. The appli-
cable cost principles (see ~ 85.22) contain
requirements for prior approval of certain
types of costs. Except where waived. those
requirements apply to all grants and sub-
grants even if paragraphs (c) through (0 of
this section do nOL
(c) Budget changes. (I)
Nonconstruction projects. Except as
stated in other regulations or an award
document. grantees or subgrantees shall
obtain the prior approval of the
awarding agency whenever any of the
following changes is anticipated under a
nonconstruction award:
(i) Any revision which would result in
the need for additional funding.
(ii) Unless waived by the awarding
agency. cumulative transfers among
direct cost categories. or. if applicable.
among separately budsllted programs,
projects. functions. or activities which
exceed or are expected to exceed ten
percent of the current total approved .
budget. whenever the awarding agency's
sbare exceeds $100.000."
(iii) Transfer of funds allotted for
training allowances (i.e" from direct
payments to trainees to other expense
categories), .
(2) Construction prajects. Grantees
and subgrantees shall obtain prior
written approval for any budget revision
which would result in the need for
additional funds.
(3) Combined construction and
nonconstruction prajects, When a grant
or subgrant provides funding for both
construction and non construction
activities. the grantee or subgrantee
must obtain prior written approval from
the awarding agency before making any
fund or budget transfer from
nonconstruction to construction or vice
versa.
(d) Programmatic chanses. Grantees
or subgrantees must obtain the prior
approval of the awarding agency
whenever any of the followilll actions is
anticipated:
47
. 09:1558
(1) Any revision of the scope or
objectives 01 the project (regardless of
whether there is an allociated budget
revision requiring prior approval).
(2) Need to extend the period of
availability of funds.
(3) Changes in key persons in cases
where specified in an application or a
grant award. In resean:h projects. a
chanse in the project director or
principal investisator shall alwaY'
require approval unless waived by the
awarding agency.
(4) UDder nonconstruction projects.
contracting out, subgranting (if authorized .
by law) or otherwise obtaining the services
of a third party to perform activities which
arc centraJ to the pu.--poses of the award.
This approval requirement is in addition
to the approval requiremcuts of fi 85.36
but docs not apply to the procurement of
equipment, supplies, and. general support
scrvJCC8.
(e) Additional prior approval
requirements. The awardinS agency may
not require prior approval for any
budget revision which is not described
in paragraph (c) of this section.
(0 Requesting prior approval. (1) A
req~~st for. prior approval of any budget
reViSion Will be in the same budget
formal the grantee used in its
. application and shall be accompanied
by a narrative justification for the
proposed revision.
(2) A ~ucst tor a prior approval un~
the applicable Federal cost principles (see
fi 85.22) may be made by letter.
(3) A request by a $ubgrantee for prior
ilpproval will be addressed in writing to
the grantee, The grantee wiJI promptly
review such request and shall approve
or disapprove the request in writing. A .
grantee will not approve any budget or
project revision which is inconsistent
with the purpose or terms and
conditions of the Federal grant to the
grlOntee. If the revision. requested by the
~ubgrantee would multin a change to
the grantee's approved project whir.h
requires Federal prior approval. t"'e
grantee will obtain the Federal d~f!ncy's
approval before approving the
subgrantee's request.
~ 85.31 Real property.
(a) Title. Subject to the obligations
and conditions set forth in this section.
title to real property acquired under a
g~ant or subgrant will vest upon
acquisition in the grantee or sub~rlln!ee
respectivelv. .
. (bj Use. Except as otherwise provided
::y Federal statutes. real propertv will be
I.lsed for the originally authorized
j:lurposes as long as needed for thuI
purposes. and the grantee or sub!!Tantee
shall not dispose of or encumber its title
or other interests.
I
HOUSING AND DEVELOPMENT REPORTER
I
(c) Disposition. When real property i.
no longer needed for the ofilinally
authorized purpoH. the grantee or
subgrant.. will request disposition
instructions from the awarding agency.
The instructiODl will provide for one of
the followins altematives:
(1) <etion of title. Retain title after
compensating the awarding agency. The
amount paid to the awarding agency
will be computed by applying the
awarding apncy'. percentage of
participatioza in the cost of the original
purchase to the fair market value of the
property. However, in those situatiODl
where a grantee or subgrantee Is
disposing of real property acquired with
grant fund. and acquiring replacement
real property under the same program.
the net proceeds from the diapOlition
may be used as an offset lo the cost of
the replacement property.
(2) Sale of property. Sell the property
/:lnd compensate the awarding agency.
The amount due to the awarding agency
will be calculated by applying the
awarding agency's percentage of
participation in the cost of the original
purchase to the proceeds of the sale.
after deduction of any actual and
reasonable selling and fixiDg-up
expenses. If the grant is still active. the
net proceeds from lale may be offset
against the original co.t of the property.
When a grantee or subgrantee is
directed losell property. sales
procedures sball be followed that
provide for competition to the extent
practicable and result in the hishest
possible return.
(3) Transfer of title. Transfer title to
the awarding agency or to a third-party
designated/approved by the awarding
agency. The grantee or subgrantee sball
be paid an amount calculated by
applying the grantee or subgrantee'.
percentage of participation in the
purchase of the real property to the
current fair market value of the
property.
~ 85.32 Equipment.
(a) Title. Subject to the obligations
and conditions set forth in this section.
title to equipment acquired under a
grant or subgrant will vest upon
acquiaition in the grantee or subgrantee
respectively.
(b) States. A State will use. manage.
and diapoee of equipment acquired
under a grant by the State in accordance
with State laws and procedures. Other
grantees and subgrantees will follow
paragraphs (c) through (e) of this
section.
(c) Use. (1) Equipment shall be used
by the grantee or subgrantee in the
program or project for which it was
PubIiSl\ed by WamIIl, GorIlam & Lamont, Inc.
acquired as long a. needed. whether or
not the project or program continues to
be supported by Federal fund.. When no
longer needed for the original program
or project. the equipment may be used in
other activities currently or previously
supported by a Federal agency.
(2) The grantee or subgrantee .hall
also make equipment available foruse
on other projects or programa currently
or previOusly supported by the Federal
GovemmenL providing such use will not
interfere with the work on the projects .
or program for which it was Originally
acquired. F'U'lIt preference for other use
shall be given to other programs or
projects supported by the awarding
agency. User fees should be considered
if appropriate.
(3) Notwithstanding the cucouragement
in fi 8S.25(a) to earn program income. the-
grantee or subgrantcc must not use equip-
ment acquired with grant funds to provide
services for a fee to compete unfairly with
private companies that provide equivalcut
services. unless specifically permined or
cootcmplated by Federal statute.
r4) When acquiring replacement
equipment. the !!Tan tee or subgrantee
may use the equipment to be replaced aa
a trade-in or sell the property and use
the proceeds to offset the cost of the
replacement property. subject to the
approval of the awardins agency.
(d) Management requirements.
Procedures for managing equipment
(including replacement equipment),
whether acquired in whole or in part
with grant funds. until disposition takes
place will. as a minimum. meet the
following requirements:
(1) Property records must be
maintained that include a description of
the property. a serial number or other
identification number, the source of
property. who holds title. the acquisition
date. and cost of the property.
percentage of Federal participation in
the cost of the property. the location. use
and condition of the property, and any
ultimate disposition data including the
date of disposal and sale price of the
property.
(2) A physical inventory of the
property must be taken and the results
reconciled with the property records at
least once every two years.
(3) A control system must be
developed to ensure adequate
safeguards to prevent 101s. damage. or
theft of the property. Any 10... damage.
or theft shall be investiRated.
(4) Adequate maintenance procedures
must be developed to keep the property
in good condition.
(5) If the grantee or subgrantee is
authorized or required to sell the
property, proper sales procedures must
48
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COMMUNITY DEVELOPMENT
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be estabUahed to ensure the highest
possible return.
(e) Disposition. When original or
replacement equipment acquired under
a grant or subgrant is no longer needed
for the original project or program or (01
other activities currently or previously
supported by a Federal asency.
disposition of the equipment will be
made as follows:
(1) Items of equipment with a current
per-unit fair market value olless than
$5.000 may be retained. sold or
otherwise disposed of with no lurther
obligation to the awarding agency.
(2) Items of equipment with a current
per unit (air market value in excess of
$5,000 may be retained or sold and the
awarding agency shall have a right to an
amount calculated by multiplying the
current market value or proceeds from
sale by the awarding agency's share of
the equipment.
(3) In cases where a grantee or
subgrantee (ails to take appropriate
disposition actions. the awarding agency
may direct the grantee or subgrantee to
take excess and disposition actions.
(0 Federal equipment. In the event a
grantee or subgrantee is provided
federally-owned equipment:
(1) TItle will remaill vested in the
F!!deral Government.
(2): Grantees or subgrantees will
manage the equipment in accordance
with Federal agency rules and
procedures. and submit an annual
inventory listing.
(3) When the equipment is no longer
needed. the gra!ltee or subgrantee will
request disposition instructions from the
Federal agency.
(g) Right to transfer title. The Federal
awarding agency may reserve the right
to transfer title to the Federal
Government or a third part named by
the awarding agency when such a third
party is otherwise eligible under existing
statutes. Such transfers shall be subject
to the following standards:
(1) The property shall be identified in
the grant or otherwise made known to
the grantee in writing.
(2) The Federal awarding agency shall
issue disposition instruction within 120
calendar days after the end of the Federal
suppon of the project for which it was
acquired. If the Federal awarding agency
fails to issue disposition instructions with-
in the 120 calendar-day period the grantee
sh.t&ll follow 8S.32(e).
(3) When title to equipment is
transfen-ed. the grantee shall be paid an
amount calculated by applying the
percentage of participation in the
purchase to thE! current fair market
value of the property.
t 15.33 Supplies.
(a) Title. TItle to suppliel acquired
under a grant or nbgrant wilJ vest. upon
acquisition. in the grantee or subgrantee
respectively.
(bJ Di8positiOn. If there is a residual
inventory of UIIIIII8d luppliel exceeding
$5.000 in total alJ8relate fair market
value upon termination or completion of
the award. and if the IUpplies are not
needed frn' any other federally
sponsored prograllll or projects. the
grantee or IUbsrantee .ball compensate
the awlU'dinl alency for its share.
~. 85.34 CopJrilbts.
The Federal awaniin8 agency
reserves 11 royalty-free. nonexclusive.
and irrevocable license to reproduce.
pubUah or otherwise use. and to
authorize others to use. for Federal
Government purposes:
(a) The copyright in any work
developed UDder a grant. subgrant. or
contract under a lrant or subgrant and
(b) Any right. of copyright to which a
grantee. sllbgrantee or a contractor
purchases ownership with grant support.
~ 85.35 Subawards .to debarred and
suspended parties.
Grantees and subgrantees must not
make any award or permit any award
(sllbgrant or contract) at any tier to any
'. party which is debarred or suspen~~d or
is otherwise excluded from or meligibleo
for participation in Federal assistance
programs under Executive Order 12549.
"Oebarment and Suspension."
t 85.36 Proc:aremeat
(a) States. When procuring prope~
and services under a grant. a State will
follow the same policiell and procedures
it uses for procurements from ita non-
Federal funds. The State wiD ensure that
every purchase order ar other t:Ontract
includes any clauses required by
Federal statutes and executive orders
and their implementing regulatio~.
Other grantees and subgrantees ~ll .
follow paragraphs (h) through (i) m thIS
section.
(b) Procurement standards. (1)
Grantees and subgrantees will use their
own procurement procedures which
reflect applicable State and local laws
and regulations. pro\ided that tile
procurements conform to applicable
Federal law and the standards identified
in this section.
(2) Grantees and su~,:,tees .wID
maintain a contract admlD1stratlon
system which ensures th~t c~ntractors
perform in accordance wt!h tne term.s.
conditions, and specificatIOns of their
Published by Warren, Gomam & Lamont, Inc.
I
09:1559
HDR RF -372
4-25-88
contracts or purcha.e ordel'L
(3) Grantees and lubgranteel wilJ
maintain a written code of standards of
conduct governing the performance of
their employeel engaged in the award
andadDUm.trationofcontta~.No
employee. officer or agent of the grantee
or subgrantee shall participate in
selection. or in the award. or
admiDiatratian ola contract supported
by Federal funda if a conflict of interest.
real or apparent. would be involved.
Such a conflict w~uld arise when:
(i) The employee. officer or agent.
(ii) Any member of hi. immediate
family,
(iii) His or her partner, or
(iv) An organization which employs.
or is about to employ. any of the above,
has a. fmancial or other interest in the
firm selected for award. The grantee's or
subgrantee's officers. employees or
agents will neither solicit !lor accept
gratuities. favors or anything of
monetary value from contractors.
potential contractors. or parties to
subagreements. Grantee and
subgrantees may set minimum roles
where the financial interest is not
substantial or the gift is an unsolicited
item of nominal intrinsic value. To the
extent pennitted by State or local law or
regulations. such standards or conduct
will provide for penalties. sanctions. or
other disciplinary actions for violations
of such standards by the grantee's and
subgrantee's officers. employees. or
agents. or by contractors o~ their age;"ts,
Tha awarding agency may m regulation
provide additional prohibitions relative
to real. apparent. or potential conflicts
of interest.
(4) Grantee and subgrantee
procedures will provide for a review of .
proposed procurements to avoid
purchase of WlDecessary or dupli.C8tive
items. Consideration should be given to
consolidating or breaking out
procurements to obtain a more
economical purchase. Where
appropriate. an analysis will be made of
lease versus purchase alternatives. and
anv other appropriate analysis to
determine the most economical
approach.
(5) To foster greater economy and
efficiency, grantees and slIbgrantees an
encouraged to enter into Slate and local
intergovernmental agreements for
procurement or use of common goods
and services.
(6) Grantees and subgrantees are
encouraged to use Federal excess and
surplus property in lieu of purchasing
new equipmenl and property whenever
such Ine is feasible and reduces project
costs.
49
09:1560
(7) Crantees and .ubgrantees are
encouraged to IIR vahle engineering
clauses in contrach for colUtnlCtion
project. of .ufficient size to offer
reasonable oppornmitiel for cost
reduction.. Value engineering i. a
systematic and creatiye anaylsis of each
contract item or ta.k to ensure that ita
eueritial function i8 provided at the
overa11lower cost.
(8) Grant.. and subgrantees will
make awarda only to re~ible
contractors po.eNina the ability to
perfonn .uccesefuUy ander the terms
and conditiOM of a propoeed
procuremeaL Couideratioa will be
given to .uch matten u contractor
integrity. compliance with public policy.
record of pa.t performance. and
fmancial and tecJmjca1 resources.
(9) Crantee. and ,ubsrantees will
maintain record. .ufficient to detail the
significant hi.tol? of a procuremenL
These recorda will include. but are not
necessarily limited to the following:
rationale for the method of proc;W'.41ent.
selection of contract type. contractor
selection or rejection. and the basi. for
the contract price.
(10) Grantees and aubsrantee. will
use time lmd. material type contracta
only-
(i) After a determination that no other
contract is suitable. and
(ii) If the contract include. a ceiling
price that the contractor exceeds at ita
own risle.
(11) Grantee. and subgranteea alone
will be responsible. in accordance with
good administrative practice and sound
business judgment. for the .ettlement of
all contractual and administrative issue.
arising out of procurements. These
issues include. but are not limited to
source evaluation. protests. disputes.
and claims. These standards do not
relieve the grantee or subgrantee of any
contractual responsibilities under its
contracts, Federal agencies will not
substitute their judgment for that of the
grantee or subgrantee unless the matter
is primarily a Federal concern.
Violations of law will be refeJTed to the
local. State, or Federal authority having
proper jurisdiction.
(12) Grantees and subgrantees will
have protest procedures to handle and
resolve disputes relating to their
procurements and shall in all instances
disclose infonnation regarding the
protest to the awardins agency. A
protestor must exhau.t all
administrative remedia with the
grantee and subgrantee before pursuing
a protest with the Federal agency.
Reviews of protests by the Federal
agency will be limited to:
(i) Violations of Federal law or
regulations and the standards of this
section (violations of State or local law
HOUSING AND DEVELOPMENT REPORTER
I will be under the jurisdiction of State or
local authOrities) and
(H) Violations of the grantee's or
subgrantee's protest procedures [or
failure to review a complaint or protesL
Protests received by the Federal agency
other than' those specified above will be
referred to the grantee or subgrantee.
(c) CompfiitiDn. (1) Ail procurement
traasacboas will be conducted in a maD-
ner providing full and opeD competition
consistCDt with ~ standards ~ 8S.36.
Some of the situations c:oasidered to be
restrictive oC competition include but are
not limited to:
(i) Placing unreasonable requirement.
un firms in order for them to qualify to
do businesl.
(ii) RequiriD8 unnecessary experience
and excessive bonding.
(iii) Noncompetitive pricing practices
between finns or between affiliated
compania.
(iv) Noncompetitive awards to
consultants that are on retainer
contract&.
(v) Organizational conflicts of
interest.
(vi) Specifying only a "brand name.'
product instead of allowing "an equal"
product to be offered and describing the
perfonnence of other relevant
requirements of the procurement. and
(vii) Any arbitrary action in the
procurement process.
(2) Grantees and subgrantees will
conduct procurementa in a manner that
prohibits the use of .aaPltorily or
administratively imposed in-State or
local seographicai preferences in the
evaluation of bids or proposa'" except
in those cases where applicable Federal
statutb ~xpresaly mandate or
encourage geographic preference.
Nothing in this section preempts Sta.te
licensing laws. When contracting for
architectural and engineering (AiEl
services. geographic location may be a
selection criteria provided ita
application leaves sa appropriate
number of qualified finRa. given the
nature and size of the project. to
compete for the coaU'act.
(3) Granteea willlaav. written
selection procedures for procurement
transactions. These procedures will
ensure that all solicitationa:
(i) Incorporate a clear and accurate
description of the technical
requirements for the material. produCL
or service to be procured. Such
description shaH not. in competitive
procurements. contain features which
undw:y restrict competition. The
description may include a statement of
the qualitative nature of the material.
product or service to be procured. and
when necessary, shall set forth those
minimum essential characteristics and
standards to which it must conform if it
is to satisfy its intended use. Detailed
Published by Warren, Gorham & Lamont. Inc.
proJct specif1C8 tions should be
8vo'J't:ci if at all poaaible. When it is
impractical or uneconomical to make a
clear and accurate description of the
technical requirements. a "brand name
or equal" description may be used as a
means to define the performance or
other salient requirements of a
procuremenL The specific features of the
named brand which must be met by
offerors shall be clearly stated: and
Iii) Identify all reqWz'ementa which the
offerors muat fulfill and all other factors
to be used in evaluating bids or
proposal~ .
(4) Grantees and subgrantees wiu
ensure that all prequalified lists of
persoas, rum&. or products which are
used in acquiring goods and services are
current and include enough qualified
sources to ensure maximum open and
free competition. Also. grantees and
subgrantees will not preclude potential
bidders from quallfying during the
solicitation period,
(d) Methods of procurement to be
followed. {1) Procurement by SInall
purchau procedures. Small purchase
procedurea are those relatively simple
and informal procurement methods Cor
securing services. supplies. or otiser
property that do DOt cost more than
$25.000 in the aggregate. If small
purchase procw-ementa are used. price
or rate quotations will be obtained from
an adequate number of qualified
sources.
(2) Procurement by sealed bids (formal
advertising). Bids ate publicly solicited
and a firm-fIXed-price contract Oump sum
or unit price) is awarded to the responsible
bidder whose bid, conforming with all the
material terms and conditioas of the invi-
tation for bids, is the lowest in price. The
sealed bid method is the preferred method
for procuring constrUCtion. if the condi-
tions in g 8S.36(d)(2Xi) apply.
(i) In order Cor sealed bidding to be
feasible. the' following conditions should
be present:
(A) A complete. adequate. and
realistic specirlC8tion Of purchase
descriptiOD i.a available:
(B) Two or more responsible bidden
are willing and able to compete
effectively for the business: ana
(C) The procurement lends itself to a
flml fixed price contract and the
aelectiOD of the successful bidder can be
made priDCipally on the basis of price.
Iii) If sealed bids are used. the
following requirements apply:
(A) The invitation for bids will be
publicly advertised and bids shall be
solicited from an adequate number of
known suppliers. providing them
sufficient time prior to the date set for
opening the bids;
[B) The in...itation for bids. which will
include any specifications and pertinent
50
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COMMUNITY DEVELolMENT
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attachments. shall define the items or
services in order for the bidder to
properly respoDd:
IC) All bids will be publicly opened at
the time and place prescribed in the
invitation for bids:
{D) A firm fixed-price contract award
will be made in writing to the lowest
responsive aad rnponsible bidder.
Where specified in bidding documents.
factors sach a. cUlC01IIlts. transportation
cost. and life cycle costs shall be
considered in de1ennining which bid i.
lowest. Paymeut diIc:oImtl will only be
used to determine the. low bid when
prior experience indicates that such
discounts are usually taken advantage
of: and
IE) Aft, or al1 bids may be rejected if
there is a IOlIftd documented reason.
{3J Procurement by comp&lit;.,e
proposals. The technique of competitiye
proposalll is normally conducted with
more than one source submittins an
offer. and either a fixed-price or oost-
reimbunement type contract is
awarded. It ill generally used when
conditions are not appropriate for the
use of sealed bids. If this method is.
used. the following requirements apply:
(i) Requests for proposals will be
publicized and identify all evaluation
factors and their reian-.e importance.
Any response to pubUcized requests for
proposals shall be honored to the
maximum extent practical:
(ii) Proposais will be soHcited from ...n
adequate number of qualified sourcer.
(ili) Grantees and subgrantees will
have a method for conducting technical
evaluations of the pfoposais m:eived
and for selecting awardees:
(iv) Awards will be ma~ to the
responsible firm whose proposal is most
advantageous to the program. with price
and other factors considered: and
(v) Grantees and subgrantees may use
competitive proposal procedures for
qualifications-based procurement of
architectural/ engineering (AlE)
professional senrices whereby
competitors' qualifications are
evaluated and the most qualified
competitor is selected. subject to
negotiation of fail' and reasonable
compensation. The method. where prict!
is not used as a selection factor. can
only be used in procurement or A/E
professional services. It cannot be used
to purchase other types of services
though AlE firms are a potential source
to perform the proposed effort.
(4) Procurement by noncompetitive
proposols is procurement through
solicitation of a proposal from only one
source. or after solicitation of a number
of sources. competition is determined
inadequate.
(i) Procurement by noncompetitive
proposals may be used only when the
award of a contract is infeasible under
small purchase procedures. sealed bids
or competitlw proposals and one of the
following circumstances appliel:
(A) The item il available only from a
single source:
(B) The public exigency or emergency
for the requirement will not permit a
delay resulting from competitive
solicita tion.
(C) The awarding agency authorizes
noncompetitive proposala: or
(D) After solicitation of a number of
sources. competition il determined
inadequate.
(ii) Cost analysis! i.e.. verifying the
proposed cost data, the projections of
the data. and the evaluation of the
specific elements of costs and profit. is
required.
(iii) Grantees and subgrantee& may be
required to submit the proposed
procurement to the awarding agency for
pre-award review in accordance with
paragraph (g) of this section.
(e) Contracting with small and
minority firms. women's business
enterprise and labor surplus area firms.
(1) The grantee and subgrantee will take
all nece,' lry affmnative steps to assure
that minority firms. women's business
enterprises. and labor surplus area firms
are used when possible. '.
(2) Affirmative steps shall include:
(i) Placing qualified small and
minority businesses and women's
business enterprises on solicitation lists:
(ii) Assuring that small and minority
businesses. and women's business
enterprises are solicited whenever they
are potential sources:
(iii) Dividing total requirements. when
economically feasible. into smaller tasks
or quantities to permit maximum
participation by small and minority
business. and women's business
enterprises:
(iv) Establishing delivery schedules.
where the requirement permits. which
encourage participation by small and
minority businesl. and women',
business enterprises:
(v) Using the services and assistance
of the.Small Business Administration.
and the Minority Businels Development
Agency of the Department of Commerce:
and
(vi) Requiring the prime contractor. if
subcontracts are to be let. to take the
affirmative steps listed in paragraphs
(e)(2) (i) through (v) of this section.
(f) Controct cost ond price. (1)
Grantees and subgrantees must perform
a cost or price analysis in connection
with every procurement action including
contract modifications. The method and
degree of analysis is dependent on the
facts surrounding the particular
procurement situation, but as a starting
~ublished by Warren. Gomam & Lamont, Inc.
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09:1561
HDR RF-372
4-25-88
point. grantees must make independent
estimates before receiving bids or
proposals. A cost analysis must be
performed when the offeror is required
to submit the elements of his estimated
cost. e.g.. under professional. consulting,
and architectural engineering services
contracts. A COlt analysil will be
neceslary when adequate price
competition il lacking. and for sole
source procurements. including contract
modifications or change orders. unless
price relonableness can be established
on the basis of a catalog or market price
of a commercial product sold in
substantial quanti tiel to the general
public or based on prices set by law or
regulation. A price analysis will be used
in all other instances to determine the
reasonableness of the proposed contract
Drice.
. (2) Grantees and subgrantees will
negotiate profit as a separate element of
the price for each contract in which
there is no price competition and in all
cases where cost analysis is performed.
To establish a fair and reasonable profit.
consideration will be given to the
complexity of the work to be performed.
the risk borne by the contractor. the
contractor's investment. the amount of
subcontracting. the quality of its record
of past performance. and industry profit
rates in the surrounding geographical
area for similar work.
(3) Costs or prices based on estimated
costs for contracts imder grants will be
allowable only to the extent that costs
incurred or cost estimates included in
negotiated prices are consistent with Fed-
eral cost principles (see ~ 85.22), Grantees,
may reference their. own cost principles
that comply with the applicable Federal
cost principles.
(4) The cost plus a percentage of cost
and percentage of construction cost
methods of contracting shall not be
used.
(8) Awarding agency review. (t)
Grantees and subgrantees must make
available. upon request of the awarding
agency. technical specifications on
proposed procurements where the
awarding agency believes such review
is needed to ensure that the item andlor
service specified is the one being
proposed for purchase. This review
generally will take place prior to tlu!
time the specification is incorporated
into a solicitation document. However. if
the grantee or subgrantee desires .to
have the review accomplished after a
solication has been developed. the
awarding agency may still review the
specifications, with such review usually
limited to the technical aspects of the
proposed purchase. .
(2) Grantees and subgrantees must on
request make available for awarding
agency pre-award review [ delete .....J
51
09:1562
procurement documents. such as
requests for proposals or invitations for
bids. independent cost estimates. etc..
when:
(i) A grantee's or subgrantee's
procurement procedures or operation
fails to comply with the procurement
standards in this seciton: or
(ii) The procurement is expected to
exceed $25.000 and is to be awarded
without competition or only one bid or
offe..r is received in response to a
solicitation: or
(iii) The procurement. which is
. expected to exceed $25.000. specifies a
"brand name" product: or
(iv) The proposed award over $25,000
is to be awarded to other than the
apparent low bidder under a sealed bid
procurement: or
(v) A proposed contract modification
changes the scope of a contract or
increases the contract amount by more
than $25.000.
(3) A grantee or subgrantee will be
exempt from the pre-award review in
paragraph (g)(2) of this section if the
awarding agency determines that its
procurement systems comply with the
standards of this section.
(i) A grantee or subgrantee may
request that its procurement system be
reviewed by the awarding agency to
determine whether its system meets
these standards in order for its svstem
to be certified. Generally. these reviews
shall occur where there is a continuous
high-dollar funding. and third-party
contracts are awarded on a regular
basis: .
(ii) A grantee or subgrantee may self.
certify its pJ:Ocurement system. Such
self-certification shall not limit the
awarding agency's right to survey the
system. Under a. self-certification
procedure, awarding agencies may wish
to rely on written assurances from the
grantee or subgrantee that it is
complying with these standards, A
grantee or subgrantee will cite specific
procedures. regulations, standards. etc..
as being in compliance with these
requirements and have its system
available for review.
(.h) Bonding requirements. For
constnJction or facility improvement
contracts or subconstracts exceeding
$100.000. the awarding agency may
accept the bonding policy and
requirements of the grantee or
subgraDtee provided the awarding
agency has made a determination that
t~e awarding agency's interest is
adequately protected. If such a
determination has not been made. the
minimum requirements shall be as
follows:
(1) A bid guarantee from each bidder
.equivalent to five percent of the bid
price. The "bid guarantee" shall consist
of 3 firm commitment such as a bid
HOUSING AND
I bond, certified check, or other
n('gotiable instrument accompanying a
bid as assurance that the bidder will.
upon acceptance of his bid. execute
such contractual documents as may be
ff!quired within the time specified.
(2) A performance bond on the part o.f
the contractor for 100 percent of the
c"ntract price. A "performance bond" is
one executed in connection with a
contract to secure fulfillment of aU the
contractor's obligations under such
contract.
(3) A payment bond on the part of the
contractor for 100 percent of the
contract price. A "payment bond" is one
executed in connection with a contract
to assure payment as required by law of
all persons supplying labor and material
in the execution of the work provided
for in the contract.
(i) Contract pravisions. A grantee's
. and subgrantee's contracts must contain
provisions in paragraph (i) of this
Section. Federal agencies are permitted
10 require changesi'remedies. changed
conditio",. accesa and recorda
retention. suspension of work. and other
clauses approved by the Office of
Procurement Policy.
(1) Administrative. contractual. or
legal remedies in instances where
contractors violate or breach contract
term!!. and provide for such sanctions
and penalties as may be appropriate.
(Contracts other than small purchases)
(2) Termination for cauae and for
convenience by the grantee or
subgrantee including the manner by
which it wiJI be effected and the basis
for settlement (All contracts in excess
of $10.000)
(3) Compliance with Executive Order
11248 of September 24. 1965 entitled
"Equal Employment Opportunity," as
amended by Executive Order 11375 of
October 13. 1967 and as supplemented in
Department of Labor regulations (41
CFR Part 60). (All conatnJction contracts
awarded in excess of $10.000 by
grantees and their contractors or
sublZJ'8ntees)
(4) Compliance with the Copeland
"Anti-Kickback" Act (18 U.S.c. 874) as
supplemented in Department of Labor
regulations (29 CFR Part 3). (All
contracts and subgrants for constnJction
or repair)
(5) Compliance with the Davis-Bacon
Act (40 U.S.C. 276a to a-7) as
supplemented by Department of Labor
regulations (29 CFR Part 5).
(ConstnJction contracts in excess of
S2.ooo awarded by grantees and
subgrantees when required by Federal
grant program legislation)
(6) Compliance with Sections 103 and
107 of the Contract Work Hours and
Safety Standards Act (40 U.S.c. 327-330)
as supplemented by Department of
Labor regulations (29 CFR Part 5).
Published by warren. Gorham & Lamont. Inc.
DEVE~OPMENTREPORTER\
(ConJruction contracts awarded by \
grantees and subgrantees in excess of
S2.000, and in excess of 52.500 for other
contracts which involve the employment
of mechanics or laborers)
(7) Notice of awarding agency .
requirements and regulations pertaining
10 reporting.
(8) Notice of awarding agency
requirements and regulations pertaining
\0 patent rights with respect to any
discovery or invention which arises or is
developed in the course of or under such
contract.
(9) Awarding agency requirements
and regulations pertaining to copyrights
and rights in data.
(10) Access by the grantee, the
subgrantee. the Federal grantor agency,
the Comptroller General of the United
States. or any of their duly authorized
representatives to any books.
documents. papers. and records of the
contractor which are directly pertinent
to that specific contract for the purpose
of making audit. examination. excerpts.
and transcriptions. '
(11) Retention of all required records
for three years after grantees or
subgrantees make final payment,. and
all other pending matters are closed.
(12) Compliance with all applicable
standards. orders. or requirements
issued under section 306 of the Clear Air
Act (42 U.S.c. 1857(h)), section 508 of the
Clean Water Act (33 U.S.c. 1368),
Executive Order 11738. and
Environmental Protection Agency
regulations (40 CFR Part 15). (Contracts.
subcontracts. and subgrants of amounts
in excess of $100,000)
(13) Mandatory standards and policies
relating to energy efficiency which are
contained in the state energy
conservation plan issued hi compliance
with the Energy Policy and
Conservation Act (Pub. 1.. 94-163).
~ 85.37 Subgrauts.
ia) States. States shall follow state
law and procedures when awarding and
administering subgrants (whether on a
cost reimbursement or fixed amount
basis) of financial assistance to local
and Iadian tribal governments. States
shall:
(1) Ensure that every subgrant
includes any clauses required by
Federal statute and executive orders
and their implementing regulations:
(2) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statute and regulation:
(3) Ensure that a provision tor compli-
ance with Section 85.42 is placed in every
cost reimbursement subjlraJ1t; and
(4) Conform any advances of grant
funds to subgrantees substantially to the
same standards of timing and amount
that apply to cash advances by Federal
agencies.
57
..1..
.'i
~~.
......
COMMUNITY DEVELOPMfNT
(b) All other grantees. All other grantees
shall follow the provisions of this pan
which are applicable to awarding agencies
when awarding and administering sub-
grants (whether on a cost reimbursement
or fixed amount basis) of financial assis-
tance to local and Indian tribal govern-
ments. . Grantees shall:
(I) Ensure that every subgrant includes
a provision for compliance with this pan;
(2) Ensure that every subgrant includes
any clauses required by Federal statute
and executive orders and their imple-
menting regulations; and
(3) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statutes and regulations.
(c) Exceptions. By their own terms,
cenain provisions of this pan do not
apply to the award and administration of
subgrants:
(1) Section 85.10;
(2) Section 85.11;
(3) The letter-of-credit procedures spec-
ified in Treasury Regulations at 31 CFR
Pan 205, cited in ~ 85.21; and
(4) Section 85.50.
c
Reports, Records, Retention, and
Enforcement
~ 85.40 Monitoring and reporting
program performance.
/ (a) Monitoring by grantees. Grantees
are responsible for managing the dav-to-
day operations of grant and subgrant
supponed activities. Grantees must mon-
itor grant and sub grant supponed activi-
ties to assure compliance with applicable
Federal requirements and that perfor-
mance goals are being achieved. Grantee
monitoring must cover each program,
function or activity.
(b) Nonconstruction performance re-
ports. The Federal agency may, if it
decides that performance information
available from subsequent applications
contains sufficient information to meet
its programmatic needs, require the
grantee to submit a performance repon
only upon expiration or termination of
grant suppon. Unless waived by the Fed-
eral agency this repon will be due on the
same date as the final Financial Status
Repon. .
(I) Grantees shall submit annual per-
formance repom unless the awarding
agency requires quanerly or semiannual
repom. However, performance repons
will not be required more frequently than
quanerly, Annual repons shall be due 90
da~ after the grant year, quanerly or
semi-annual repons shall be due 30 days
after the reponing period. The final per-
formance repon will be due 90 days after
the expiration or termination of grant
suppon. If a justified request is submitted
by a grantee, the Federal agency may
extend the due date for any performance
repon. Additionally, requirements for un-
necessary performance repom may be
waived by the Federal agency.
(2) Performance repons will contain, .
for each grant, brief information on the
following:
(i) A comparison of actual accomplish-
ments to the objectives established for the
period. Where the output of the project
can be quantified, a computation of the
cost per unit of output may be required if
that information will be useful.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(iii) Additional peninent information
including, when appropriate. analysis and
explanation of cost overruns or high unit
costs.
(3) Grantees will not be required to
submit more than the original and two
copies of performance repons.
(4) Grantees will adhere to the stan-
dards in this section in prescribing perfor-
mance reponing requirements for sub-
grantees.
(c) Construction performance reports.
For the most pan, on-site technical in-
spections and cenified percentage-of
completion data are relied on heavily by
Federal agencies to monitor progress un-
der construction grants and subgrants,
The Federal agency will require addition-
al formal performance repons only when
considered necessary, and never more
frequently than quanerly.
(d) Significanl developments. Events
may oc:cur between the scheduled perfor-
mance reporting dates which have signifi-
cant impact upon the grant or subgrant
supponed activity. In such cases, the
grantee must inform the Federal agency
as soon as the following types of condi-
tions become icnown:
(I) Problems, delays, or adverse condi-
tions which will materially impair the
ability to meet the objective of the award.
This disclosure must include a statement
of the action taken, or contemplated, and
any assistance needed to resolve the situa-
tion.
(2) Favorable developments which en-
able meeting time schedules and objec-
tives sooner or at less cost than antici-
pated or producing more beneficial re-
sults than originally planned.
(e) Federal agencies may make site
visits as warranted by program needs.
(t) Waivers. extensions. (I) Federal
agencies may waive any performance
repon required by this pan if not needed.
(2) The grantee may waive any perfor-
mance repon from a subgrantee when not
needed. The grantee may extend the due
date for any performance repon from a
subgrantee if the grantee will still be able
Published by Warren. Gorham & Lamont. Inc.
I
09:1563
HDR RF-417
1-15-90
to meet its performance reponing obliga-
tions to the Federal agency.
~ 85,41 Financial reporting.
(a) General. (I) Except as provided in
paragraphs (a)(2) and (5) of this section,
grantees will use only the forms specified
in paragraphs (a) through (e) of this
section, and such supplementary or other
forms as may from time to time be
authorized by OMB, for:
(i) Submitting financial repons to Fed-
eral agencies, or
OJ) Requesting advances or reimburse-
ments when letters of credit are not used.
(2) Grantees need not apply the forms
prescribed in this section in dealing with
their subgrantees. However, grantees shall
not impose more burdensome require-
ments on subgrantees.
(3) Grantees shall follow all applicable
standard and supplemental Federal agen-
cy instructions approved by OMB to the
extend required under the Paperwork
Reduction Act of 1980 for use in connec-
tion with forms specified in paragraphs'
(b) through (e) of this section. Federal
agencies may issue substantive supple-
mentary instructions only with the ap-
proval of OMB. Federal agencies may
shade out or instruct the grantee to disre-
gard any line item that the Federal agency
finds unnecessary for its decisionmaking
purposes, . .
(4) Grantees will not be required to
submit more than the original and two
copies of forms required under this pan.
(5) Federal agencies may provide com-
puter outputs to grantees to expedite or.
contribute to the accuracy of reponing.
Federal agencies may accept the required
information from grantees in machine
usable format or computer printouts in-
stead of prescribed forms.
(6) Federal agencies may waive any
repon required by this section if not
needed.
(7) Federal agencies may extend the
due date of any financial repon upon
receiving a justified request from a grant-
ee.
(b) Financial Status Report-(I) Form.
Grantees will use Standard Form 269 or
269A, Financial Status Repon, to repon
the status of funds for all non construction
grants and for construction grants when
required in accordance with
~ 85.41 (e)(2)(iii) of this section.
(2) Accounting basis. Each grantee will
repon prograrp. outlays and program in-
come on a cash or accrual basis as pre-
scribed by the awarding agency. If the
Federal agency requires accrual informa-
tion and the grantee's accounting records
are not normally kept on the accrual
basis, the grantee shall not be required to
conven its accounting system but shall
15
09:1564
develop such accrual information through
and analvsis of the documentation on
hand. .
(3) FrequenC}'. The Federal agency may
prescribe the frequency of the report for
each project or program. However, the
report will not be required more frequent-
ly than quarterly. If the Federal agency
does not specify the frequency of the
report, it will be submitted annuallv. A
final report will be required upon expira-
tion or termination of grant support.
(4) Due date. When reports are re-
quired on a quarterly or semiannual ba-
sis, they will be due 30 days after the
reporting period. When required on an
annual basis, they will be due 90 days
after the grant year. Final reports will be
due 90 days after the expiration or termi-
nation of grant support.
(c) Federal Cash Transactions Report-
(I) Form. (i) For grants paid by letter or
credit, Treasury check advances or elec-
tronic transfer of funds, the grantee will
submit the Standard Form 272, Federal
Cash Transactions Report, and when nec-
essary, its continuation sheet, Standard
Form 272a, unless the terms uf the award
exempt the grantee from this require-
ment.
(ii) These reports will be used by the
Federal agency to monitor cash advanced
to grantees and to obtain disbursement or
outlay information for each grant from
grantees. The format of the report may be
adapted as appropriate when reporting is
to be accomplished with the assistance of
automatic data processing equipment-
provided that the information to be sub-
mitted is not changed in substance.
(2) Forecasts of Federal cash require-
ments. Forecasts of Federal cash require-
ments may be required in the "Remarks"
section of the repon.
(3) Cash in hands of subgrantees. When
considered necessary and feasible. by the
Federal agency, grantees may be required
to report the amount of cash advances in
excess of three days' needs in the hands of
their subgrantees or contractors and to
provide short narrative explanations of
ai:tions taken by the grantee to reduce the
excess balances.
(4) Frequency and due date. Grantees
must submit the report no later than 15
working days following the end of each
quarter. However, where an advance ei-
ther by letter of credit or electronic
transfer of funds is authorized at an
annualized rate of one million dollars or
more, the Federal agency may require the
report to be submitted within IS working
days following the end of each month.
(d) Request for advance or reimburse-
ment-( I) Advance payments. Requests
for Treasury check advance payments will
be submitted on Standard. Form 270,
Request for Advance or Reimbursement.
I
HOUSING AND DEVElOPMENT REPORTER
(This form will not be used for draw-
downs under a letter of credit, electronic
funds transfer or when Treasury check
advance payments are made to the grant-
ee automatically on a predetermined ba-
sis.)
(2) Reimbursemellls. Requests for
reimbursement under nonconstruction
grants will also be submitted on Standard
Form 270. (For reimbursement requests
under construction grants, see paragraph
(e)(l) of this section.)
(3) The frequency for submitting pay-
ment requests is treated in ~ 85.41 (b )(3).
(e) Outlay report and request for reim-
bursement for construction programs-( I)
Grants that support construction activi-
ties paid by reimbursement method. (i)
Requesters for reimbursement under con-
struction grants will be submitted on
Standard Form 271, Outlay Report and
Request for Reimbursement for Con-
struction Programs. Federal agencies
may, however, prescribe tbe Request for
Advance or Reimbursement form, speci-
fied in ~ 8S.41(d), instead of this form.
(ii) The frequency for submitting reim-
bursement requests is treated. in
~ 85.4 I (b)(3),
(2) Grants that support construction
activities paid by letter of credit, electronic
funds transfer or Treasury check advance.
(i) When a construction grant is paid by
letter of credit. electronic funds transfer
01' Treasury cbeck advances, the grantee
will report its outlays to the Federal
agency using Standard Form 271, Outlay
Report and Request for Reimbursement
for Construction Programs. The Federal
agency will provide any necessary special
instruction. However, frequency and due
date shall be governed by ~ 85.41(b)(3)
and (4).
(ii) When a construction grant is paid
by Treasury check advances based on
periodic requests from tbe grantee, the
advances will be requested on the form
specified in ~ 8S.4l(d).
(iii) The Federal agency may substitute
the Financial Status Report specified in
~ 8S.41(b) for the Outlay Report and
Request for Reimbursement for Con-
struction Programs.
(3) Accounting basis. The accounting
basis for tbe Outlay Report and Request
for Reimbursement for Construction Pro-
grams shall be governed by ~ 85.4I(b)(2).
~ 85.42 Retention and access
requirements for records.
(a) Applicabilit}.. (I) This section ap-
plies to all financial and programmatic
records, supporting documents, statistical
records, and other records of grantees or
subgrantees which are:
Publistlecl by Warren, Gomam & Lamont. Inc.
(i) Required to be maintained by the
terms of this pan, program regulations or
the grant agreement, or
(ii) Otherwise reasonably considered as
pertinent to program regulations or the
grant agreement.
(2) This section does not apply to
records maintained by contractors or sub-
contractors. For a requirement to place a
provision concerning records in certain
kinds of contracts, see ~ 85.36(i)(1 0).
(b) Length of retention period. (1) Ex-
cept as otherwise provided, records must
be retained for three vears from the
starting date specified in 'paragraph (c) of
this section.
(2) If any litigation, claim, negotiation,
audit or other action involving the rec-
ords has been started before the expira-
tion of the 3-year period, the records
must be retained until completion of the
action and resolution of all issues which
arise from it, or until the end of the
regular 3-year period, whichever is later.
(3) To avoid duplicate recordkeeping,
awarding agencies may make special ar-
rangements with grantees and subgran-
tees to retain any records wbich are
continuously needed for joint use. The
awarding agency will request transfer of
records to its custody when it determines
that the records possess long-term reten-
tion value. When the records are trans-
ferred to or maintained by the Federal
agency, the 3-year retention requirement
is not applicable to the grantee or sub-
grantee.
(c) Starting date of retention period-
( I) Genera/. When grant support is con-
tinued or renewed at annual or other
intervals, the retention period for the
records of each funding period starts on
the day the grantee or subgrantee submits
to the awarding agency its single or last
expenditure report for tbat period. How-
ever, if grant support is continued or
renewed quarterly, the retention periOd
for each year's records starts on the day
the grantee submits its expenditure repon
for the last quarter of the Federal fiscal
year. In all other cases,the retention
period starts on the day the grantee
submits its final expenditure report. If an
expenditure report has been waived, the
retention period starts on the day the
report would have been due. .
(2) Real property and equipment rec-
ords. The retention period for real proper-
ty and equipment records starts from the
date of the disposition or replacement or
transfer at the direction of the awarding
agency .
(3) Records for income transactions
after grant or subgrant support. In some
cases grantees must report income after
the period of grant support. Where there
is such a requirement, the retention peri-
od for the records pertaining to the earn-
16
COMMUNITY DEVELOPMENT
I
~
,~
ing of the income stans from the end of
~he grantee's fiscal year in which the
1Ocome is earned.
(4) Indirect cost rate proposals. cost
allocations plans, etc. This paragraph ap-
plies to the following types of documents
and their supporting records: IndireCt
cost ra~e computations or proposals, cost
~Ilocatlon plans, and any similar a~unt-
!Dg computations of the rate at which a
particular group of costs is chargeable
(such as computer usage chargeback rates
or composite fringe benefit rates).
(i) If submilled for negotiation. If the
pro~sal, plan, or other computation is
reqUired to be submitted to the Federal
Government (or to the grantee) to form
the basis for negotiation of the rate, then
the ~-year retention period for its sup-
porting records stans from the date of
such submission.
(ii) If not submilled for negotiation. If
the proposal, plan, or other computation
is not required to be submitted to the
Federal <?oyernment (or to the grantee)
for negotiation purposes, then the 3-year
retention period fo~ the proposal plan; or
computation and Its supporting records
~tarts fr~m end of the fiscal year (or other
accounting period) covered by the pro-
posal, plan, or other computation.
(d) Subst!tution ~f microfilm. Copies
IJ.la~e by microfilming, photocopying, or
Similar methods mav be substituted for
the original records:
(e) Access to records-(l) Records of
grantees and subgranttes, The awarding
agency and the Comptroller General of
t~e United States, or any of their autho-
rized representatives, shall have the right
of access to any pertinent books, docu-
ments, papers, or other records of grant-
ees and subgrantees which are pertinent
to the grant, in order to make audits
examinations, excerpts, and transcripts.'
. (2) Expiration of right of access, The
rights of access in this section must not be
limited to the required retention period
but shall last as long as the records are
retained.
(t) Restrictions on public access. The
Federal Freedom of Information Act (5
U.S.C. 552) does not apply to records
Unless required by Federal, State, or local
law, . grantees and subgrantees are not
reqUired to permit public access to their
records.
~ 85.43 Enforcement.
(a) Remedies for noncompliance. If a
grantee or subgrantee materiallv fails to
comply with any term of an award,
whether stated in a Federal statute or
regulati~n. an assurance, in a State plan
or apphcation. a notice of award or
elsewhere, the awarding agency may take
one or more of the following actions, as
appropriate in the circumstances:
(1) Temporarily withhold cash pay-
ments pending correction of the deficien-
cy by the grantee or subgrantee or more
~evere enforcement action by the award-
Ing agency,
(2) Disallow (that is, deny both use of
funds and matching credit for) all or part
of the cost of the activity or action not in
compliance,
(3) Wholly or partly suspend or termi-
nate the current award for the grantee's or
subgrantee's program,
(4) Withhold further awards for the
program, or
(5) Take other remedies that may be
legally available.
(b) Hearings. appeals. In taking. an
el!forcem~nt action, the awarding agency
will prOVide the grantee or subgrantee an
opportunity for such hearing, appeal, or
other administrative proceeding to which
the grantee or subgrantee is entitled under
any statute or regulation applicable to the
action involved.
(c) Effects of suspension and termina-
tion. Costs of grantee or subgrantee re-
sulting from obligations incurred by the
grantee or subgrantee during a suspension .
or after termination of an award are not
allowable unless the awarding agency
expressly authorizes.them in the notice of
suspension or termination or subsequent-
ly. .Other gran.tee or subgrantee costs
dunng suspension or after termination
whi~h are necessary and not reasonably
aVOidable are allowable if:
(.l) The costs result from obligations
which were properlv incurred bv the
grantee or subgrantee' before the effective
date of suspension or termination, are not
in anticipation of it, and, in the case of a
termination. are noncancellable, and,
(2) The costs would be allowable if the
award were not suspended or expired
!1orm,:lly at the en~ of the funding period
1D which the termination takes effect.
(d) Relationship to debarment and sus-
pension. The enforcement remedies iden-
tified in this section, including suspen-
sion and termination, do not preclude
grantee or subgrantee from being subject
to '"Debarment and Suspension" under
E.O. 12549 (see ~ 85.35).
~ 85.44 Termination for convenience.
Except as provided in ~ 85.43 awards
may be terminated in whole or in pan
only as follows:
(a) By the awarding agency with the
cOl!sent of the grantee or subgrantee in
which case the two panies shall agree
upon the termination conditions. includ-
ing the effective date and in the case of
partial termination, the ponion to be
terminated, or
Pubtist1ed by Warren. Gortlam & Lamcint. Inc.
I
09:1565
HDR RF -417
1-15-90
~b) By t~e i"':ntee or subgrantee upon
written notification to the awarding agen-
cy, setting fonh the reasons for such
termination, the effective date, and in the
case of panial termination, the portion to
be terminated. However, if, in the case of
a panial t~rmination, the awarding agen-
cy determmes that the remaining ponion
of the award will not accompliSh the
purposes for which the award was made
the awarding agency may terminate th~
award in its entirety under either ~ 85.43
or paragraph (a) of this sect\on.
Subpart D-After- The-Grant
Requirements
~ 85.50 Closeout.
(a) General, The Federal agency will
close out the award when it determines
that all applicable administrative actions
and all required work of the grant has
been completed.
(b) Reports. Within 90 davs after the
expiration or termination of the grant, the
grantee must submit all financial, perfor-
mance, and other repons required as a
condition of the granL Upon request by
the grantee, Federal agencies mav extend
this timeframe. These may inciude but
are not limited to:
( 1) Final performance or progress re-
port.
(2) Financial Status Report (SF 269) or
Outlay Report and Request for Reimburse-
ment for Construction Programs (SF-271)
(as applicable).
. (3) F~nal request for payment (SF-270)
(if applzcable). .
(4) Invention disclosure (if applicable).
(5) Federally-owned property report: In
accordance with S 85.32(t), a grantee
must submit an inventory of all federallv
own~d pro~eny (as distinct from propeny
acqUired WIth grant funds) for which it is
accountable and request disposition in-
structions from the Federal agency of
propeny no longer needed.
(c). Cost .adjuslment. The Federal agen-
cy WIll, .wlthm 90 days after receipt of
repons 10 paragraph (b) of this section,
make upward or downward adjustments
to the allowable costs.
(d) Cash adjustments. (1) The Federal
agency will make prompt payment to the
grantee for allowable reimbursable costs.
(2) The grantee must immediately re-
fund to the Federal agenCY any balance of
unobligated (unencumbered) cash ad-
vanced that is not authorized to be re-
tained for use on other grants.
~ 85.51 Later disallowances and
adjustments.
The closeout of a grant does not affect:
17
09:1'566
(a) The Federal agency's right to disal-
low costs and recover funds on the basis
of a later audit or other review;
(b) The grantee's obligation to return
any funds due as a result of later refunds,
corrections, or other transactionsi
(c) Records retention as reqlured in
~ 85.42;
(df Property management requirements
in ~ 85.31 and 85.32; and
(e Audit requirements in ~ 85.26.
~ 85.52 Collection of amounts due.
(a) Any funds paid to a grantee in
excess of the amount to which the grantee
I
HOUSING AND DEVELDf!,1ENT ~PORTER
is finally determined to be entitled under
the terms of the award constitute a debt
to the Federal Government. If not paid
within a reasonable period after demand,
the Federal agency may Jeduce the debt
by:
(1) Making an administrative offset
against other requtsts for reimburse-
ments,
(2) Withholding advance payments
otherwise due to the grantee, or
(3) Other action permitted by law,
(b) Except where otherwise provided by
statutes or regulations, the Federal agency
Published by Warren, Gorham & Lamont. Inc.
will charge interest on an overdue debt in
accordance with the Federal Claims Col-
lection Standards (4 CFR Ch. II). The
date from which interest is computed is
not extended by litigation or the tiling of
any form of appeal.
Subpart E-Entitlement [Reserved]
Dated: February 10, 1988.
Carl D. Covitt,
Acting Secretary.
18
COMMUNITY DEVELOPM.ENT BLOCK GRANTS
, I
COST PRINCIPLES FOR STATE AND LOCAL GOVERNMENTS
OMB CIRCULAR A-87
OAACEOFMAHAGEMENTAHD
BUDGET
Coat Principfes for State and Local
Governments
(46 FR 9548. Jan. 28, 1981J
. ".i\
....
.J!
-.-;.-'
AcnON: Final policy.
SUMMARY: This notice advises that
Federal Managemenl Circular 74-4
(Revised), dated July 18. 1974, is
reissued under its ori~inal desijrnation of
Office of Management and Budget
Circular No. A-87. No substantive
changes arc made in Ll}e Circular. The
Circular is set forth below in its entirety,
EFFEcnYE DATE: The revision was
effective January 15, 1981.
FOR FURTHER INFORMATION CONTACT:
Palmer Marcantonio. Deputy Chief,
Financial Manegement Branch. Budget
Review Division. 600Z New Executive
Office Building, Wnshinglon. D,C. 20503,
202/395-4773.
TO OBTAIN SINGLE COPIES OF THE
CIRCULAR, CONTACT: Document
Distributio:1 Center, Office of
Administl'alion. G-Z.1S New Executive
Office Building. Washington, D.C. 20503.
TO OBTAIN MU't.TlPLE COPIES, CO~""ACT:
Superintendent of Documents. U,S.
Govemrnent PrintinlZ Office.
Washingtc,n. D.C. 20';C2.
Daniel F. MaDII.,
Budget a."la' .'>1unogemen/ Officer.
Januaf')' 15. 198~.
10: The Heads of Executive DepartmenlS and
Esta~iishmp,nlS.
Subject: Cost i'rinr::ples f::lr Slate and luclil
governments.
1. Purpose. This Circular eSI:lblishes
principles and standards for delermining
costs applicable to gr.lnls, (,:onlracts, and
other agreemen:s with S~ate and 10C'.o:I)
governments and f~ernlJy-recogniz:ed Ir:diaa
tribal governments.
2.. Supersession. This Circular supersedes
Federal Management Ci:'C\llar 74-1 as
revised. The Circular is reissued unuer its
original designalion of OMB Circular A-87.
3. Summary of changes. No substantive
chang'!:s are made in lbe Circular.
4. PoliC)-' intent This Circular provides
principles for determining the allownble costs
of programs Administered by State, locaL and
federally-recognized Indian trihlll
governmenlS under grants fro:n And contracts
with lhe Federal CovemmenL The\' are
designed to pro\'ide t.':e basis for a' uniform
approach to the problem of determining cosls
and 10 promote efiicien.:v and beller
relalionships between gr'nntees and the
Federal Govem:::enl. The principles lire for
determining co~s only and are nol inlended
10 identify the circumstances nor to dictate
the extenl of Federal and State or local
. participa lion in the financing of a particular
projecL They are designed to provide that
federally-assisted prolir:ims bear their fair
APPENDIX J
.bare oC CON I'tICIOpUz.ed UDder the..
principle. except where ....tricted or
prohibited by law. No pnm.ion for profit or
other inCl"llDent above coat i. intended.
So Applicability and acope.
a. The provi.ion. otthiJ Circulllr apJ."ly to
all Federal agenc:ie. re.ponaible ror
acimini.terilll program. that involve granll
and contJ'actl with State, locaL and federally-
recognind Indian tribal governments,
b. III provi.ion. do not apply to granll and
contract. wllh:
(I) Publicly-fananced educational
insUlution. .ubject 10 O:Iic;e or Mllnagemeat
and Budgel CircWar A-::l. and
(2) Publicly owned huspitals and otber
provide" ot medical care lubiect to
requirement. promulg.led by Ihe .pon.oring
Federal agencies.
Any other exceplions wiU be approved by
the Office DC Manager:ll:nt and Budget in
particular cases where adequate justifiCAtion
is preeented.
8. Attachments. The prindpJes ond relKted
poliC)' guide. are .et forth Ia the attachmenls,
wbich are:
Attachment A-Prindplel ror determining
costs applicable to llrana ond contracts
with Slate. local. and redomll!y-recogni:Led
lndilUl tribalgovernmenlll.
Altachment B-Slllndanis for &elected ilems
. of co.t..
7./nquiries. F::rtner Informalion concerning
lhts Circular may bl! obtained by contacting
Ihe Financiefi-iioDallelDp.nt '8ran:h. B,!dgel
Review Oh-ision. Office of MIl",,~ement and
Budget. W uhinglclI., D.C. 2Dsm. I.ciephnne
20:-39s-..4i73.
James T. Mcintyre, Jr.
Director.
(Circular No. A~7J
Attachment A-Principles for
Determining Costs Applicable to Grants
and Contracts With SlBle, Local. and
Federally Recognizee I::Joia:1 Tribal
Governments
TABLE OF CONTo.'TS
A. Purpase and st;()pe
1. Obj~th'es
2.. Poliey guides
3. Application
B. Definitions
1. Approval or authorization of the l:J'lIntor
Federalageney
2.. Cosl allocation pllln
3. Cosl .
4. Cost objective
5. Federal ageney
6. Fl!deral1y-recoP.1i~d Indi;m tribal
governments
7. Grant
8. Granl progMlm
9. Grantee
10. Local unil
11. Other Stale o:-loC'~d lI~ncies
12.. Sel"Vices
13. Supporting services
C. Basic guidelines
1. Factors affectir:g al1owllb!1iI~' of costs
2.. Allocable costs
3. Applicable credilS
D. CompOSition of c:ost
1. Total cost .
PubhSned by Warren. Gorham & Lamont. Inc
I
09: 1501
HDR RF -185
3 - 9- 81
:z.. Cauification of CO.tl
E. Dirw:t costs
1. General
2.. Application
F. Indirect casu
1. Gener.1
2.. Granlee departmental indirect COlt.
3. lJmltaUon on indirect costs
G. Cost incurred by agencies other than the
grantee
1. General
2.. Alternative methode or determining
indirect cost
H. Cast incurred bj' grantee department for
others
1. General
J, COII/ allocation plan
1. General
2.. Requirements
3. In.truction. for prepara tion or cost
Kllocation plen.
0(. Negotiation and a;lpro\'al of indirecl COsl
proposal. for Slates
5. Negotiation and approvKI oC indirect COsl
propolIl. ror local governments
6. Negotiation and approval or indirect COsl
proposals for federaUy-reC'Ogniz.cd lndiHn
tribal governments
7. Resolulion o! problems
A. Purpose and scope.
1. Objectives. This Attachment sels
forth principles for determining the
allowable costs of programs
adrrnnistered by State. local. and
federally-recognized Indian tribal
go\'emme:1ts under grants from a::.d
contracts with the Federal Government.
Thp. principles are for the pU:'pose of
cost determination ?nd are not intenued
to identify the circumstances or dictate
the extent 01 Federal and State 0:' local_
participation in the financing of a
particular grant. They are designed to
provide that federally-assisted programs
bear their fair share of costs recognized
under these principles. except where
restricted or prohibitf!d by law. No
provision for profit or other mcremenl
above cost is intended.
2. PoHcy gz:ides, The application or
these pril.ciples is based on the
fundamental premises that:
a. Stale, local. and federallv
recognized Indian tribal governments
are responsible for the efficient and
effective administration of grant and
conlract programs through the
application of sound management
practices.
b. The grantee or contractor assumes
lhe responsibility for seeing that
federally-ass:sted program funds have
been expended and accounted for
consistent with underlying asreements
and p:'ogram objectives.
c. Each grantee or contractor
organization, in recognition of its own
unique combination of staff facilities
and experience. will have t..~e prirnary
responsibility for employing whatever
form of organization and management
09: 1502
techniques may be necessary to assure
proper and efficient administration.
3. Application. These principles will
be applied by all Federal agencies in
determining costs incurred by State.
local. and federally recognized IndialO
tribal governments Under Federal grants
and cost reimbursement type contracts
(including subgrants and subcontracts)
e)(cept those with (a) publicly-financed
educational institutions subject to Office
of Management and Budget Circular A-
21, and (b) publicly-owned hospitals and
other providers of medicl:ll care subject
to requirements promulgated by the
sponsoring Federal agencies.
B, Definitions, .
1. Approval or authorization of the
grantor Federal agenc)' means
documentation evidencing consent prior
to incurring specific COllt.
2. Cost allocation pian means the
documentation :dentif)'jng.
accumulating. and distributing
allowable costs under wants and
contracts together with the allocation
methods used.
3. Cost, as used herein, means cost as
determined on a casR, accrual. or other
basis acceptable to the Federal grantor
agency as a discharge of the grantee's
accountabilitl' for Federal funds. .
4. Cost objective means a pool. center.
or area established for the accumulation
of cost. Such areas include
organizational units. functions. objects
or items of "expense, as well all ultimate
cost.objectives including speCific grants.
projects, contracts. and other activities,
5. Federal agency means any
department, agency, commission. or
instrumentality in the executive branch
of the Federal Government which makes
grants to or contracts with State. local.
or federally-recognized Indian tribal
governments.
6. Federally-recognized Indian tribal
~ovemments means the governing body
or a governmental agency of any Indian
tribe, band. nation. or other organized
group or community (including any
native village as defined in Section 3 of
the Alaska Native Claims Settlement
Act. 85 Stat. 688) certified by the
Secretary of the Interior as eligible for
the special programs and services
provided by him through the Bureau of
Indian Affairs.
7. Grant means an agreement between
the Federal Government and a State.
local. or federally-recognized Indian
tribal government whereby the Federal
Government provides funds or aid in
kind to carry out specified programs.
services. or activities. The principles
and policies stated in this Circular as
applicable to grants in general also
Apply to any federally-sponsored cost
reimbursement-type of agreement
I
HOUSING & DEVELOPMENT REPORTER
I
performed by a State. local. or federally.
recognized Indian tribal government.
8. Grant program means those
activities and operations of the grantee
which are necessary to carry out the
purposes of the grant, including any
portion of the program financed by the
grantee. . '
9. Grantee means the department or
agency of State. local.. or federally
recognized ~dian tribal government
which is responsible for administration
of the grant.
10. Local unit means any political
subdivision of government below the
SUite level.
11. Other Slate or local agencies
means department or agencies of the
Stale or local unit which provide goods.
facilities. and services to a grantee.
12. Sen.'ices, as used herein. means
goods and facilities. as well as services,
13. Supporting services means
auxiliar)' functions necessary to sustain
the direct effort involved in
administering a grant program or an
activity providing sen.'ice to the grant
program, These services may be
l,;cntralized in the grantee department or
in sc:ne other agency. and inlcude .
procuremant. payroll. personnel
functions. maintenance and operation of
space. data p'rocessing. accounting.
budgeting. auditing. mail and messenger
sen.' ice. and the like.
C. Sasic guidelines.
1. Factors a.ffeeting allowability of
costs. To allowaule under a grant
program. costs must meet the following
general criteria:
a. Be necessary and reasonable for
proper and efficient administration of
the grant programs. be allocable thereto
under these principles. and except as
specificalll' provided herein. not be a
general expense tequired to carry out
the overall responsibilities of State.
local or federally-recognized Indian
tribal go\'ernments.
b. Be authorized or not prohibited
under State or local laws or regulations.
c. Conform to any limitations or
exclUSIons set forth in these principles.
Federalll:iws. or other governing
limitations as to t)'Pes or amounts of
cost items.
d. Be consistent with policies.
regulations, and procedures that apply
uniformly to both federally assisted and
other activities of the unit of government
of which the grantee is a part.
e. Be accorded consistent treatment
through application of generally
accepted accounting principles
appropriate to the circumstances.
f. Not be allocable to or included as a
cost of any other federally financed
program in either the current or a prior
period.
Published by Warren. Gornam & Lamont, Inc.
g. Be net of all applicable credits.
Z. Allucable costs.
a. A cost is allocable to a particular
cost objecti\..e to the extent of benefits
received by such objective. .
b. Any cosl allocable to a particular
grant or cost objective under the .
principles pro\'ided for in this Circular
may not be shifled to other Federal
gra~t programs to overcome fund
deficiencies, a\'oid restrictions imposed
by law or grant agreements. or for other
rea~ons.
c. Where an ailocation of joint cost
will ultimately result in charges to a
grant program. an allocation plan willlJe
1'eqllired as prescribed in Section J.
3. Applicable credits.
II. App!icaule credits refer to those
receipts or reduction of expenditure-
type transactions which offset or reduce
expense items allocable to grants ilS
direct or indirect costs, Examples of
such transaclions are: purchase
discounts; I'euates or allowances.
recoveries or indeminties on losses: sille
of pubiica!ions. equipmenl, and scrap;
inc:ome fronl person&l or incidental
services: ar.d ildjustmer.ts of
overpayments or erroneous charges.
b. Applicable credits may also arise
when Federal funds are received or are
available from sources other than the
grant program involved to finance
operations or capital items of the
grantee. This includes costs arising from
the use or depreCiation of items donated
or financed by the Federal Government
to fulfill matching requirments under
another grant program. These types of
credits should likewise be used to
reduce related exoenditures in
determining the r~tes or amounts
applicable 10 a given grant.
D. Composition of Cost
1. Total cost~ The total cost of a grant
program is comprised of tbe allowable
direct cost incident to its performance.
plus its allocable portion of allowable
indirect costs, less applicable credits.
2. Classification of costs. There is no
universal rule for classifying certain
costs as either direct or indirect under
every accounting system. A cost may be
direct with respect to some specific
service or function. but indirect with
respect to the grant or other ultimate
cost objective. It is essential. therefore.
that each item of cost be treated
consistently either as a direct or an
indirect cost. Specific guides for
determining direct and indirect costs
allocable under grant programs are
provided in the sections which follow:
E. Direct Costs
1.. General. Direct costs are those that
can be identified specifically with a
COMMUNITY DEVEL01MENT BLOCK GRANTS
j
particular cost objective. These COlt.
may be charged directly to grant..
contract.. or to other program. against
which co.ts are finally lodsed. Direct
costs may also be charged to cost
objectives usedfor the accumulation oC
costs pending distribution in due course
to grants and other ultimate cost
objectives.
2. Application. Typical direct costs
chargeable to grant programs are:
a. Compensation oC employees Cor the
time and efforts devoted specifically to
the execution of grant programs.
b. Cost of materials acquired.
consumed. or expended specifically for
the purpose of the grant.
c. Equipment and other approved
capital expenditures.
d. Other items of expense incurred
specifically to carry out the grant
agreement.
e. Services furnished specifically for
the grant program by other agencies.
provided such charges are consistent
with criteria outlined in Section G of
these principles.
F. Indirect Costs
1. General. Indirect costs are those (a)
incurred for a common or joint purpose
benefiting more than one cost objective.
and (b) not readily assignable to the COt:t
objectiveS'specifically benefited.
without effort disproportionate to the
results achieved. The term "indirect
costs." as used herein. apphes to costs
of this type originating in the grantee
department. as well as those incurred by
other deparunents in supplying goocia.
services..and facilities. to the grantee
department. To facilitate equitable
distribution of indirect expenses to the
cost objectives served. it may be
necessary to establish a number oC pools
of indirect cost within a grantee
depa'rtment or in other agencies
providing services to a grantee
department. Indirect cost pools should
be distributed to benefiting cost
objectives on bases which will produce
an equitable reoult in consideration of
relative benefits derived.
2. Grantee departmental indirect
casts. AU grantee departmental indirect
costs. including the various levels of
supervision. are eligible for allocation to
grant programs provided they meet the
conditions set forth in thia Circular. In
lieu of determining the actUal amount of
grantee departmental indirec~ cost
allocable to a grant program. the
following methods may be used.
a. Predetermined fbeed rates for
indirect costs. A predetermined fIXed
rate for computing indirect costs
applicable to a grant may be negotiated
annually in situations where the cost
experience and other pertinent facts
~
....-
i
--:>-
available are deemed sufficient to
enable the contracting parties to reach
an infonned jud8Jnent (1) as to the
probable level of indirect costs in the
grantee department during the period to
be covered by the negotiated rate. and
(2) that the amount allowable under the
predetermined rate would not exceed
actual inQirect cost.
b. Negotiated lump sum for overhead.
A negotiated fIXed amount in lieu of
indirect costs may be appropriate under
circumstance. where the benefits
derived from a grantee department's
indirect services cannot be readily
determined a. in the case of small. self-
contained or isolated activity. When this
method is used. a detennination should
be made that the amount negotiated will
be approximately the same al the actual
indirect COlt that may be incurred. Such
amounts negotiated in lieu of indirect
costs will be treated aa an offset to total
indirect expenaes oC the grantee
department before allocation to
remaining activities. The base on which
such remaining expenses are allocated
should be appropriately adjusted.
3. Limitation on indirect costs.
a. Federal grants may be subject to
laws that limit the amount of indirect
costs that may be allowed. Agencies
that sponsor grants of this type will
establish procedures which will assure
that the amount actually allowed for
indirect costs under each such grant
does not exceed the maximum
allowable under the s~tutory limitation
or the amount otherwise allowable
under this Circular, whichever is the
~maller.
b. When the amount allowable under
a statutory limitation is less than the
amount otherwise allocable as indirect
costs under this Circular. the amount not
recoverable as indirect costs under a
grant not be shifted to another federally-
sponaored grant program or contract.
G. Cost Incurred by Agencies Other
Than the Grantee
1. General. The cost of service
provided by other agencies may only
include allowable direct costs of the
service plus a pro rata share of
allowable supporting costs (Section
B.12.) and supervision directly required
in performing the service. but not
supervi.sion of a general nature such as
that provided by the head of a
department and his staff auistants not
directly involved in operations.
However. supervi.ion by the head of a
department or agency whose sole
function is providing the service
furnished would be an eligible coat.-
Supporting costs include thoee furnished.
by other units of the supplying
department or by other agencies.
Published by Warren. Gornam & Lamont. Inc.
I
09: 1503
HDR RF -185
3-9-81
2. Altemative method. of delMmining
indirrlCt cosL In lieu of determiJlins
actual indirect cost related to a .
particular .ervice furnished by another
agency. either of the following
altemative methods may be u.ed
provided only one method i. ueed for a
specific service durillK the fiscal year
involved. .
a. Standard indirrlCt rate. An amount
equal to ten percent 01 direct labor COlt
in providiilg 'the serviCII performed by
another State agency (excluding
overtime. shift. or holiday premiUms and
fringe benefits) may be allowed in lieu
of actual allowable indirect cost for that
service.
b. Predetermined fixed rate. A
predetennined fiXed rate for indirect
cost of the unit or activity providing
service may be negotiated as set forth in
Section F .2.a.
H. Cost Incurred by Grantee
Deportment for Others
1. General. The principies provided in
Section G will also be used in
determining the cost of services
'Provided by the grantee department to
another agency.
f. Cost Allocation Plan
1. General. A plan for allocation of
costs will be required to support the
distribution oC any joint costs related to
the grant program. AU costa included in
the plan will be. supported by formal
accounting recorde which wt1l
substantiate the .propriety of eventual
charges.
2. Requirements. The allocation plan .,
of the grantee department should cover
all joint costs of the department as well
88 costs to be allocated under plans of
other agencies or organizational units
which are to be included in the costs of
federally-sponsored programs. The cost
altocation plana' of all the agencies
rendering services to the grantee
department. to the extent feasible.
should be presented in a single
document. The allocation plan should
contain. but not ne-cessarily be limited
to. the following.
a. The nature and extent of .terVices
provided and their relevance to the
federally. sponsored programs.
b. The items of expense to be
included.
c. The methods to be used in
distributing cost.
:i. Instructions for preparation of cost
allocation plans. The Department of
Health and Human Service.. in
consultation with the oLloter Federal
agencies co~cemed, ~ll be responsible
for developing sod issuing the
instructions for use by grantees in
preparation of cost allocatton plans.
- 0'9: 1504
Thi. responsibility applies to both
central support services at tbe State.
local. and Indian tribal level and
indirect cost propolal. of individual
grantee departments.
4. Negotiation and approval of
indirect cost proposals for States.
a. nie Department of Health and
Human Services. in collaboration with
tbe other Federal agencies concerned.
will be responsible for negotiation.
approval. and audit of cost allocation
plans. which, will be .ubmitted to it by
the States. TAese plans will cover
central support service costs of the
State.
b. At the grantee department level in a
State. a single cognizant Federal agency
will have responsibility similar to that
set fortb in a. above. for the negotiation.
approval. and audit of the indirect cost
proposal. A current list of agency
assignments i. maintained by the Office
-of Management and Budget.
c. Questions concerning the cost
allocation plans approved under a. and
b. above. should be directed to the
agency responsible for. such Ilpprovals.
s. Negotiation and approval of
indirect cost proposals for local
governments.
a. Cost allocation plans will be
retained at the local government level
for audit by a designated Federal agency
except in those cases wbere tbat agency
requests that cost ~llocation plans be
submitted to it for negotiation and
approval -
b. A list t)f cognizant Federal agencies
assi~ed responsibility for negotiation.
approval and. audit of central support
service cost allocation plans at the local
govemmentlevel ia maintained by the
the Office of Management and Budget.
c. At the grantee department level of
local governments. the Federal agency
with the pred~minant interest in the
wode of the grantee department will be
responsible for necessary negotiation.
app",val and audit of the indirect cost
proposaL
6. Negotiation and approval of
indirect co.t proposals for federally
recognized Indian tribal governments.
The Federal agency with the
predominant interest in tbe work of tbe
grantee department will be responsible
for necessary negotiation. approval and
audit of the indirect cost proposal.
'T. Resolution of problems. To the
extent that problems are encountered
among the Federal agencies in
connection with 4 and 5 above. the
Office of Management and Budget will
lend assistance... required.
I
HOUSING & DEVEtOPMENT REPORTER
(Clreulw No. A-a7]
Attachment B-Standards for Selected
Items of Costs
Table of.Coateata
A. PUrpD$e and appliCtlbiJily
1. Objective
z. Application
B. ..4.lIowabJe CD6ts
1; Accounting
2. Advertisins
3. Adviaory councils
4. Audit service
s. Bondins
6. Bud8etins
7. Buildins lease management
8. Central stores
9. CommUAicationa
10. Cumpensation Cor personal services
11. Depreciation and use allowances
12. Disbursing service
13. F.mployee rringe benefits
14. Employee morale. health i1ndwetrare
costs
15. Exhibits.
'6. Legal expenses
17. Maintenance and repair
11. Materials and supplies'
19. Membenhips. subscriptions and
proCessional activit..
20. Motor pools
n. Payroll preparation
22. Personnel administration
23. PrintiDg and reproduction
24. Procurement service
25. Taxn
Z8. TraiDing and education
27. Tranlportation
za. Travel
C. Costs aJJowable with approval of gronlDr
alency
1. Automatic data processiDg
2. Building space and related facillties
3. CapitaJ expenditurn
4. Irlllurance and iDdemnification
5. Management studies
a. Preagreement costs
1. ProCessional servicu
8. Proposal cow
D. UnallDwable ctnts
1. Bad debts
2. Conlingtmci..
3. Contributions and donations
4. Entertainment
5. Fines and penaJties
6. Governor's expenses
7.lnterest and other financial costs
6. Legislative expent..
9. Uoderrecovery of COlts under Ifant
asreements
A. Purpose and applicobility.
1. Objective. This Attachment
provides standards for determining the
allow ability of .elected items of cost.
2. Applicotion. These .tandards will
apply irrespective of wbether a
particular item of co.t is treated as
direct or indirect coat. Failure to
mention a particular item of cost in the
standards is not intended to imply that it
is either allowable or unallowable.
rather determination of allowability in
each case should be based on the
treatment of standards provided for
Published by Warren. Gorham & Lamont. Inc.
Similar or related items of co.t. The
allowability or.the .elected items of co.t
is subject to the general policies and
principles stated in Attachment A of,thi.
Circular.
B. AJlowable costs.
1. Accounting. The cost of establishing
and maintaining accounting and other
information systems required for the .
management of grant programs is
allowable. This includes costs incurred
by central service agen_cies for the!!e
purposes. The cost of maintaining
central accounting records required for
overall State or Indian tribal
government purposes. such as
appropriation and fund accounts by the
Treasurer. Comptroiler. or similar
officials. is considered to be a general
expense of government and is not
allowable.
Z. AdverUsing. Advertising media
includes newspapers. magazines. radio
and television programs. direct mail,
trade papers. and the like. The
advertising costs allowable are those
which are solely Cor:
a. Recruitment of pe}'Sonnel required
Cor the grant program.
b. solicitation or bids for the
procurement or goods and services
required.
c. disposal oC scrap or surplus
materials acquired in the performance of
the grant agreement.
d. Other purposes specifically
provided for in the grant agreement.
3. Advisory councils. Costs incurred
by State advisory councils or
committees establisbed pursuant to
Federal requirements to carry out grant programs are allowable. The cost of like
organizations is allowable when
provided for in the grant agreement.
4. Audit servies. The cost of audits
necessary for the administration and
management of Cunctions related to
grant programs is allowable.
S. Bonding. Costs of premiums on
bonds covering employees who bandle
grantee agency funds are allowable.
6. Budgeting. Costs incurred for the
development, preparation. presentation.
and execuJon oC budgets are allowable.
Costs for services of a central budget
office are generally not allowable since
these are costs of general government.
However. where employees of the
central budget office actively participate
in the grantee agency's budget process.
the cost oC identifiable services is
allowable.
7. Building lease management. The
administrative cost for lease
management which includes review of
leue proposals. maintenance of a list of
available property for lease. and related
activities is allowable.
, COMMUNITY DEVEL~PMENT BLOCK GRANTS
...
}
8. Centrol stores. The cost of
maintaining and operating a central
stonis organization for supplie..
equipment. and materials used either
directly or indirectly for grant programs
is allowable.
9. Communications. Communication
costs incurred for telephone calls or
service. teletype service. wide area
telephone .ervice (WATS). centrex.
. telpak (tie lines), postage. messenger
service and similar expenses are
allowable.
10. Compensation for personal
services.
a. Generol. Compensation for
personal services includes all
remuneration. paid currently or ~ccured.
for services rendered during the period
of perfonnance under the grant
agreement. including but not necessarily
limited to wages. salaries. and
supplementary compensation and
benefits (Section B.13.). The cost. of
such compensation are allowable to the
extent that total compensation for
individual employees: (1) is reasonable
for the services rendered: (2) follows an
appointment made in accordance with
State, local or Indian tribal government
laws and rules and which meets Federal
merit system or other requirements.
wbere applicable: and (3) is determined
and supported as provided in b. below.
Compensation for employees engaged in
federally-assisted activities will be
considered reasonable to the extent that
it is consistent with that paid for similar
work in other activitieS' of the State.
locaL or Indian tribal government. In
cases wbere the kincb of employees
required for the federally-assisted
activities are not found in the other
activities of the State. local or Indian
tribal government. compensation will be
considered reasonable to tbe extent that
it is comparable to that paid for similar
work in the labor market in which the
employing government competes for the
kind of employees involved.
Compensation surveys providing data
representative of the labor market
involved will be an acceptable basis for
evaluating reasonableness.
b. Payroll and distribution of time.
Amounts charged to grant programs for
personal services. regardless of whether
treated as direct or indirect costs. will
be based on payrolls documented and
provided in accordance with generally
accepted practice of the State. local. or
Indian tribal govemment. Payrolls must
be supported by time and attendance or
equivalent recorda for individual
employees. Salaries and wages of
employees chargeable to more than one
grant program or other cost objective
will be supported by appropriate time
distribution records. The- method used
---
sbould produce an equitable distribution
of time and effort.
11. Depreciation.and U8lI allowance..
a. Grantees may be compensated for
the use of building.. capital
improvements. and equipment thro.lgb
use allowances or depredation. Use
allowances Sri! the means of providing
compensation in lieu of depreciation or
other eq\livalent costs. However. a
combination of the two methods may
not be uaed in coMection with a .ingle
class of fixed assets.
b. The computation of depredation or
use allowance will be based on
acquisition cost. Where sctual cost
records have not been maintained. a
reasonable estimate of the original
acquisition cost may be used in the
computation. The computation will
exclude the cost or allY portion of the
cost of buildings and equipment donated
or bome directly or indirectly by the
Federal Government through charges to
Federal grant propgrams or otherwise.
irrespective of where title was originally
vested or where it presently resides. In
additioft. the computation will also
exclude the cost of land. Depreciation or
a use allowance on idle or eXcess
facilities is not allowable. except when
specifically authorized by the grantor
Federal agency.
c. Wbere the depreciation method ia
followed. adequate property records
must be maintained. and any generally-
accepted method of computing
depreciation may be used. However, the
method of computing depreciation must
be consiatently applied for any specific
asset or class of assets for all affected
federally-spOnsored programs and must
result in equitable charges considering
the extent of the use of the assets for the
benefit of such programs.
d. In lieu of depreciation. a use
allowance for buildings and
improvements may be computed at an
annual rate not exceed.ing two percent
of acquisition cost. The use allowance
for equipment (excluding items properly
capitalized as building cost) will be
computed at an annual rate not
exceeding six and two-thirds percent of
acquisition cost of usuable equipment.
e. No depreciation or use charge may
be allowed on any auets that would be
considered as fully depreciated.
provided. bowever. that reasonable use
charges may be negotiated for any such
allets if warranted after taking into
consideration the cost of the facility or
item involved. the estimated useful life
remaining at time of negotiation. the
effect of any increased maintenance
charges or decreased efficiency due to
age. and any. other factors .pertinent to
the utilizaticn"oi the t.ciJity or item for
the purpose contemplated.
Published by Warren. Gomam & Lamon\, Inc.
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09: 1505
HDR RF-185
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12. Disbursing service. The cost of
disbuning grant program funds by the
T feasurer or other designated officer il
allowable. Disbursing service. cover the
processing of checks or warrants. from
preparation to redemption. including the
necessary recorda of accountability and
reconciliation of such records with
related cash accounts.
13. Employee fringe benefit3. Costs
identified under a. and b. below are
allowable to the extent that total
compenaation for employees ia
reasonable as defmed in Section al0.
a. Employee benefit. in tbe fonn of
regular compensation paid to employee.
during periods of authorized absences
from the job. .uch as for annualleave.
sick leave, court leave. military leave.
and the like. if they are: (1) provided
prusuant to an approved leave .ystem:
and (2) the cost thereof is equitably
allocated to aU related activities.
including grant programs.
b. Employee benefits in the Conn of
employers' contribution or expenses for
social security, employees'life and
bealth insurance plans, unemployment
insurance coverage. workmen's
compensation insurance. pension plans.
severance pay. and the like. provided
such benefits are granted under
approved plans and are distributed
equitably to grant programa and to other
activities.
14. Employee morale. health and
welfare C08ts. The costs of health or
nrs.t-aid clinics and/or infirmaries.
recreational facilities. employees'
counseling services. employee
infonnation publications. and any
related expenses inCUlTed in accordance
with general State. local or Indian tribal
policy. are allowable. Income generated
from any of these activities will be
offset against expenses.
15. Exhibits. Costs of exhibits relating
specifically to the grant programs ue
allowable.
16. Legal expenses. The cost of legal
expenses required in the administration
of grant programs is allowable. Legal
services furnisbed by the chief legal
officer of a State. local or Indian tribal
government or his staff solely for the
purpose of d.ischarging his general
responsibilities as legal officer are
unallowable. Legal expenses for the
prosecution of claims against the
Federal Government are unallowable.
17. Maintenance and repair. Costs
incurred for necessary maintenance.
repair. or upkeep of property wbich
neither add to the pennanent value of
the property tlor appreciably prolong its
intended life. but keep It in an efficient
operating condition, are allowable.
18. Materials and supplies. The cost of
materials and supplies necessary to
. ,
09: 1506
carry out the grant programs i.
allowable. Purchases made specifically
for the grant program sbould be charged
thereto at their actual prices after
deducting all cash discounts. trade
discounts. rebates. and allowances
received by the grantee. Withdrawals
from general stores or stockrooms
should be charged at cost under any
recognized method of pricing
consistently applied. Incoming
transportation charges ue a proper part
oC material cost.
19. Memberships. subscriptions and
professional activities.
a. Memberships. The qast of
membership in civic. business. technical
and proCessional organizations is
aUowable provided: (1) the benefit from
the membership is related to the grant
program: (2) the expenditure is for
agency membership; (3) the cost of the
membership is reasonably related to the
value of the services or benefits
receivf:d: and (4) the expenditure is not
for membership in an organiza tion
which devotes a substantial part of its
activities to influencing legislation.
b. Reference material. The cost oC
books. and. subscriptions to civic,
business. proCessional. and tecbnical
periodicals ia allowable when related to
the grant program.
c. Meetings and conferences. Costs
are allowable wben the primary purPose
of the meeting is the dissemination of
technical information relating to the
grant program and they are consistent
with regular practices followed for other
activities of the ~antee.
ZO. Motor poolS. The costs of a service
organization which provides
automobiles to user grantee agencies at
a mileage or flXed rate and I or provides
vehicle maintenance. inspection and
repair .ervices are allowable.
21. Payroll preparation. The cost of
preparing payrolls and maintaining
necessary related wage records is
allowable.
2%. Personnel administration. Costs
for the recruitment. examination.
cenification. classification. training.
establishment of pay standards. and
related activities for grant programs. are
allowable.
23. Printing tJnd reproduction. Costs
for printing and reproduction services
necessary for grant administration.
including but not limited to forms.
reports. manuals. and informational
literature. are allowable. Publication
costs of reports or other media relating
to grant program accomplishments or
results are allowable when provided for
in the grant agreement.
24. Procurement service. The cost of
procurement service. including
'olicitation of bids. preparation and
I
HOUSING & DEVEfPMENT REPORTE~
award of contracts. and all phales of
contract administration in PfOviding
goods. facilities and services for grant'
programs. is allowable.
25. Taxes. In general. taxes or
payments in lieu of taxes which the
grantee agency i.legally ,required to pay
are allowable.
28. Training and educotion. The cost
of in-service training. customarily
provided for employee development.
which directly or indirectly benefita
grant programa is allowable. Out-of.
service training involving extended
periods of time is allowable only when
specifically authorized by the grantor
agcncy.
27. Tronsportotion. Costs incurred for
freight. cartage. express. postagc and
other transportation costs relating either
to goods purchased. delivered. or moved
from one location to another are
allowable.
2&. Travel. Travel costs are llllowable
for expenses for transportation. lodging.
subsistence. and related items incurred
by employees who are in travel status
on ofJicial business incident to a grant
program. 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. provided the method used. is
applied to an entire trip. and results in
charges consistent with those normally
allowed in like circumstances in non.
federally sponsored activities. The
difference in cost between first-class air
accommodations and less-than-first-
class air accommodations are not is
unallowable except when less-than-
fU'St-class air accommodations
reasonably available. Notwithstanding
the proviaions oC paragrapha D.6. and 8..
travel costs of omcials covered by those
paragraphs. when specifically related to
grant programs. ant allowable with the
prior approval of a grantor agency.
C. CosU Allowable With Approval of
Crontor Agency
1. Autolllotic data processing. The
cost of data processing services to grant
programs ia allowable. Thi. cost may
include rental of equipment or
depreciation on grantee-owned
equipment. The acquisition of
equipment. wbether by outrigbt
purchase. rental-purchase agreement or
other method of purchase. ia allowable
only upon specific prior approval of the
grantor Federal agency as provided
under the selected item for Capital
expenditures.
z. Building space and related
facilities. The cost of space in privately
or publicly owned buildings used for the
benefit of the grant program is allowable
subject to the conditions stated below.
Published by Warren. Gomam & Lamont. Inc.
The total cost of space. wbether in a
privately or publicly owned building.
may not exceed the rental cost of
comparable space and facilities in a
privately.owned building in the same
locality. The cost of space procured for
grant program usage may not be charged
to the program for periods of
nonoccupancy.' without authorization of
the grantor Fcderal agency.
a. Rental cost. The rental cost of
space in a privately-owned building is
allowable. Similar costs for publicly
owned buildings newly occupied on or
after October 1. 1980. are allowable
where "rental rate" systems. or
equivalent systems that adcquately
reflect actual costs. are emplo}'ed. Such
charges must be determined on the basis
of actual cost (including depreciation
bllscd on the useful life "f the building.
interest paid or accrued. operation and
maintenance. and other allowable
costs). Whcre these costs are included
in rental charges. they may not be
chargcd elsewhere~ No costs will be
included for purchases or construction
that were originally financad by tbe
Fp.deral Government.
b. Maintena/lce and operation. The
cost of utilities. ins:lrance. security.
janitorial services. elevator servi-ce.
upkeep of g:'ounds. nermal repairs and
alterations and the like: are allowable to
the extent thoy are not otherwise
included in rental or other charges for
space.
c. Rearrongemer:ts and alterations_
Costs incurred for rearrangement and
alteration of facilities required
specifically for the grant program or
those tbat materially increase tbe value
or useful life of the facilities (Section
C.3.) are allowable when specifically
approved by the grantor agency.
d. Depreciation and just allowances
on publicly-owned buildings. The costs
are allowable as provided in Section
B.11.
e. Occupancy of space under rental.
purchase or a lease with option-to-
purchase agreement. The cost of space
procured under such arrangements is
allowable when specifically approved
by the Federal grantor agency.
3. Captial expenditures. The 'cost of
facilities. equipment. other capital
assets. and repairs which materially
increastt the value or useful life of
capital assets is allowable wben such
procurement is specifically approved by
the Federal grantor agency. When assets
acquired with Federal grant funds are
(a) sold: (b) no longer available for use
in a federally-sponsored program: or (c)
used for purposes not authorized by the
grantor agency. the Federal grantor
agency's equity in the asset will be
refunded in the same proportion as
03:06€-0 .
(e) Prior notification. The recipient
shall provide the HUD field office witb
written notification of the amount of
funds to be distributed to a private finan.
cial institution before distribution under
the provisions of this section.
(0 Recordkeeping requiremenU. The
recipient shall maintain in its files a copy
of tbe written agreement and related
documents estabiisbing conformance
with this section and concerning perfor-
mance b}' a financial institution in
accordance with tbe agreement.
r Subpart K-other Program
Requirements
~ 570.600 General.
(a) Section 104(b) of the Act provides
that any grant under section 106 of the
Act shall be made only if the grantee
cenifies to the satisfaction of the Secre-
tary, among other things, that the grant
"will be conducted and administered in
conformitv with Pub. L 88-352 and Pub.
L 90-28(" and, funher, that tbe grantee
"will comply with the other provisions of
this title and with other applicable laws."
Section I 04(e)(1) of the Act requires tbat
the Secretary determine with respect to
granis made pursuant to section I 06(b)
(Entitlement Grants) and 106(d)(2)(B)
(HUD-administered Small Cities Grants),
at least on an annual basis, among other
things, "wbether tbe grantee bas carried
out [its] cenifications in compliance with
the requirements and the primary objec-
tives of this title and with other applica-
ble laws. · .... Cenain other statutes are
expressly made applicable to activities
assisted under the Act by the Act itself,
while other laws not referred to in the Act
may be applicable to such activities by
their own terms. Cenain statutes or Exec-
utive Orders which may be applicable to
activities assisted under the Act bv their
own terms are administered or enforced
by governmental depanmentS or agencies
other th;u: the Secretary or the Depan-
ment. ThIs Subpan K enumerates laws
which .the Secretary will treat as applica-
ble to grants made under section 106 of
the Act, other than grants to States made
pursuant to section 106(d) of the Act. for
purposes of the determinations described
above to be made by the Secretary under
section 1 04(e)(1) of the Act, including
statutes expressly made applicable by the
Act and cenain other statutes and Execu-
tive Orders for which the Secretary has
I
HOUSING AND DEVEfPME1'\7 REPORTER
APPENDIX K
enforcement responsibility. The absence
of mention herein of anv other statute for
which the Secretary does not bave direct
enforcement responsibility is not intend-
ed to be taken as an indication tbat, in the
Secretary's opinion, such statute or Exec-
utive Order is not applicable to activities
assisted under tbe Act. For laws wbicb the
Secretary will treat as applicable to grants
made to States under section 106(d) of
the Act for purposes of the determination
required to be made by the Secretary
pursuant to section 104(e)(2) of the Act,
see ~ 570.496.
(b) This subpan also sets fonh cenain
additional program requirements which
the Secretary has determined to be appli-
cable to grants provided under the Act as
a matter of sdministrative discretion.
(c) In addition to grants made pursuant
to section 106(b) and 106(d)(2)(B) of the
Act (Subpans D and F, respectively), the
requirements of this Subpan K are appli-
cable to grants made pursuant to sections
107 and 119 of the Act (Subpans E and
G, respectively~, and to loans guaranteed
pursuant to Subpan M.
~ 570.601 Public Law 88-352 and
Public Law 90-284; affirmatively
furthering fair housing; Executive Order
11 063.
Section 1 04(b) of the Act provides that
any grant under section 106 of the Act
shall be made only if the grantee cenifies
to the satisfaction of the Secretary that
the grant "will be conducted and adminis-
tered in conformitv with Pub. L 88-352
and Pub. L 90-284 and the grantee will
affirmatively further fair housing." Simi-
larly, section 107 provides that no grant
may be made under that section (Secre-
tary's Discretionary Fund) or section 119
(UDAG) without satisfactory assurances
that the grantee's program will be con-
ducted and administered in conformity
with Pub. L 88-352 and Pub. L 90-284.
(a) "Pub. L 88-352" refers to title VI of
the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.), which provides that no
person in the United States shall on the
ground of race, color, or national origin,
be cxciuded from panicipation in, be
denied the benefits of, or be subjected to
discrimination under any program or
activity receiving Federal financial assis-
tance. Section 602 of the Civil Rights Act
of 1964 directs each Federal depanment
and agency empowered to extend Federal
financial assistance to any program or
PubliShed by Warren, Gornam & umont. Inc.
'~'1
_.;f
activity by way of grant to effectuate the
foregoing prohibition by issuing rules,
regulations, or orders of general applica-
bility which shall be consistent with
achievement of the statute authorizing
the financial assistance. HUD regulations
implementing the requirements of Title
VI with respect to HUD programs are
contained in 24 CFR Pan 1.
(b) "Public Law 90-284" refers to The
Fair Housing Act (42 U.S.C. 3601-20),
popularly 1cnown as the Fair Housing Act,
which states that it is the policy of the
United States to provide, within the con-
stitutional limitations, for fair housing
throughout the United States and prohib-
its any person from discriminating in the
sale or rental of housing, the financing of
housing, or the provision of brokerage
services, including otherwise making un-
available or denying a dwelling to any
person, because of race, color, religion,
sex, national origin, handicap, or familial
status. The Fair Housing Act funber
requires the Secretary to administer the
programs and activities relating to hous-
ing and urban development in a manner
affirmatively to funher the policies of
the Fair Housing Act. In accordance with
this statutory direction, the Secretary
requires that grantees administer all pro-
grams and activities related to housing
and community development in a man-
ner to affirmatively fumer the polici~ of
the Fair Housing Act, furthennore, sec-
tion 104(b)(2) of the Act requires that
each grantee receiving funds under sec-
tion 106 of the Act (entitlement or small
cities grantees) cenify to the satisfaction
of the Secretary that it will affirmatively
further fair housing.
(c) Executive Order 11063, as amended
by Executive Order 12259, directs the
Depanment to take all action necessary
and appropriate to prevent discrimina-
tion because of race, color, religion
(creed), sex, or national origin, in the sale,
leasing, rental, or other disposition of
residential propeny and related facilities
(including land to be developed for resi-
dential use), or in the use or occupancy
thereof, if such propeny and related facil-
ities are, among other things, provided in
whole or in pan with tbe aid of loans,
advances, grants, or contributions agreed
to be made by the Federal Government.
HUD regulations implementing Execu-
tive Order 11063 are contained in 24
CFR Pan 107.
.
.
8
COMMUNITY DEVELOPl1ENT
i 570.601 Section 109 of tbe Act.
(a) Section 109 of the Act requires that
no person in the United States shaD 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 pur-
poses of this section "program or activity"
is defined as any function conducted by an
identifiable administrative unit of the re-
cipient, or by any unit of government,
subrecipient, or private contractor receiv-
ing community development funds or
loans from the recipient. "Funded in
whole or in part with community develop-
ment funds" means that community devel-
opment funds in any amount in the fonn
of grants or proceeds from HUD guaran-
teed loans have been transferred by the
recipient or a subrecipient to an identifi-
able administrative unit and disbursed in a
program or activity. In subsection (b) of
this section, "recipient" means recipient as
defined in 24 CFR 1.2(f).
(b) Specific discriminatory actions pro-
hibited and corrective actions.
(1) A recipient may not, under any
program or activity to which the regula-
tions of this part may apply, directly or
through conUac:tual or other arrange-
ments, on the ground of race. color.
national origin, or sex:
(i) Deny any individual any facilities,
services. financial aid or other benefits
provided under the program or activity.
(ii) Provide any facilities, services, fi-
nancial aid or other benefits which are
different, or are provided in a different
fonn, from that provided to others under
the program or activity.
(iii) Subject an individual to segregated
or separate treatment in any matter of
process related to receipt of any service or
benefit under the program or activity.
(iv) Restrict an individual in any way in
access to, or in the enjoyment of, any
advantage or p~vilege enjoyed by others
in connection with facilities, services. fi-
nancial aid or other benefits under the
program or activity.
(v) Treat an individual differently from
others in determining whether the individ-
ual satisfies any admission, enrollment,
eligibility, membership, or other require-
ment or condition which the individual
must meet in order to be provided any
facilities, services or other benefit provid-
ed under the program or activity.
I
(vi) Deny an individual an opportunity
to participate in a program or activity as
an employee.
(2) A recipient may not use criteria or
methods of administration which have the
. effect of subjecting persons to discrimina-
tion on the basis of race. color, national
origin, or sex, or have the effect of
defeating or substantially impairing ac.
complishment of the objectives of the
program or activity with respect to per-
sons of a particular race, color, national
origin, or sex.
(3) A recipient, in determining the site
or location of housing or facilities provid-
ed 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 persons from. denying them the
benefits of, or subjecting them to discrimi-
nation on the ground of race. color,
national origin, or sex; or which have the
purpose or effect of defeating or substan-
tially impairing the accomplishment of the
objectives of the Act and of this section.
(4)(1) In administering a program or
activity funded in whole or in- part with
CDBG funds regarding which the recipi-
eI1thas previously discriminated against
persons on the ground of race, color,
national origin or sex, or if there is
sufficient evidence to conclude that such
c:lisc:rimination existed. the recipient must
take remedial affirmative action to over-
come the effectS of prior discrimination.
Tbe word "previously" does not exclude
current discriminatory practices.
(ii) In the absence of discrimination. a
recipient, in administering a program or
activity funded in whole or in part with
funds made available under this part. may
take any nondiscriminatory affirmative
action necessary to ensure that the pro-
gram or activity is open to allow without
regard to race. color, national origin or
sex.
(iii) After a finding of noncompliance or
after a recipient has a fmn basis to
conclude that discrimination has oc.
curred. a recipient sba1l not be prohibited
by this section 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, wbere the
purpose of such action is to remedy prior
discriminatory practice or usage.
(5) Notwithstanding anything to the
contrary in this section, nothing contained
herein shaD be consuued to prohibit any
recipient from maintaining or constructing
separate living facilities or rest room
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09:0661
HDR RF-383
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facilities for the different sexes. Further-
more, selectivity 01\ the basis of sex is not
prohibited when institutional or custodial
services can properly be perfonned only
by a member of the same sex as the
recipients of the services.
(c) Section 109 of the Act further
provides that any prohibition against dis-
crimination on the basis of age under the
Age Discrimination Act of 1975 (42
U.S.C. 6101 et seq.) or with respect to an
otherwise qualified handicapped person as
provided in section 504 of the Rehabilita-
tion Act of 1973 (29 U.S.C. 794) shall also
apply to any program or activity funded in
whole or in part with funds made available
pursuant to the Act. HUD regulations
implementing the Age Discrimination Act
are contained in 24 CFR Part 146 and the
regulations implementing section 504 are
contained in 24 CFR Part 8.
i 570.603 Labor standards.
Section 110 of the Act requires that all
laborers and mechanics employed by con-
traCtors or subcontraCtors on construCtion
work financed in whole or in part with
assistance received under the Act shall be
paid wages at rates not less than those
prevailing on similar construction in the
locality as determined by the Secretary of
Labor in accordance with the Davis-Ba-
con Act, as amended (40 U.S.c. 267a-
276a-5). By reason of the foregoing re-
quirement, the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327 et
seq.) also applies. However, these require-
ments apply to the rehabilitation of resi-
dential property only if such propertY
contains not less than 8 units. With
respect to the labor standards specified in
this section. the Secretary of Labor has the
authority and functions set forth in Reor-
ganization Plan Number 14 of 1950 (5
U.S.c. 1332-15) and section 2 of the Act
of June 13, 1934, as amended (40 U.S.C.
276c).
i 570.604 Environmental standards.
Section 104(g) expresses the intent that
..the policies of the National Environmen-
tal Policy Act of 1969 and other provi-
sions of law wbichfurther the purposes of
such Act (as specified in regulations issued
by the Secretary) · · · [bel most effec-
tively implemented in connection with the
expenditure of funds under" the Act. Such
other provisions of law which further the
purposes of the National Environmental
Policy Act of 1969 are specified in regula-
65
09:0662
tions issued pursuant to section 1000g) of
the Act and contained in 24 CFR Part S8.
Section 104(g) also provides that, in lieu of
the environmental protection procedures
otherwise applicable, the Secretary may
under regulations provide for the release
of funds for particular projects to grantees
who assume all of the responsibilities for
environmental review, decisionmaking,
and action pursuant to the National Envi-
ronmental Policy Act of 1969. and the
other provisions of law specified by the
Secretary as described above, that would
apply. to the Secretary were he/she to
undertake such projects as Federal
projects. Grantees assume such environ-
mental review, decisionmaking, and action
responsibilities by execution of grant
agreements with the Secretary. The proce-
dures for carrying out such environmental
responsibilities are contained in 24 CFR
Part S8.
~ 570.605 National Flood Insurance
Program.
Section 202(a) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4106)
provides that no Federal officer or agency
shall approve any financial assistance' for
acquisition or construction purposes (as
defined under section 3(a) of said Act (42
U.S.C. 4OO(a)), one year after a communi-
ty has been fonnally notified of its identifi-
cation as a community containing an area
of special flood hazard, for use in any area
that has been identified by the Director of
the Federal Emergency Management
Agency as an area having special flood
hazards unless the community in which
such area is situated is then participating
in the National Flood Insurance Program.
Notwithstanding the date of HUD ap-
proval of the recipient's application (or, in
the case of grants made under Subpart 0,
the date of submission of the grantee's
final statement pursuant to ~ S70.302),
funds provided under this part shall not be
~pended for acquisition or construction
pw:poscs in an area that has been identi-
fied by the Federal Emergency Manage-
ment Agency (FEMA) as having special
flood hazards unless the community in
which the area is situated in participating
in the. National Flood Insurance Program
in accordance with 44 CFR Parts S9- 79,
or Icss..than a year has passed since FEMA
notification to the community regarding
such hazards; and flood insurance is ob-
tained in accordance with section 102(a)
of the Flood Disaster Protection Act of
1973 (42 U.S.C. 40(1).
~
HOUSING AND DEvlLOPMENT REPORTER
~ 570.606 Relocation, displacement and
acquisition.
(a) Uniform Relocation Act (1) The
Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970
(URA) (42 U.S.C. 46(1) and HUD imple.
menting regulations at 24 CFR Part 42
apply to the acquisition of real property by
a State agency for an activity assisted
under this part and to the displacement of
any family, individual, business, nonprofit
organization or farm that results from
such acquisition. The grantee's certifica.
tion of compliance with the URA is
required in the grant agreement.
(2) An acquisition and resulting dis.
placement by a State agency is "for an
assisted activity" if it occurs on or after
the date of the initiai submission of a final
statement under 24 CFR 570.302(a)(2)
(Entitlement Grants); the initial submis-
sion of an application to HUD by a unit of
general local government under
U 570.426. 570.430, or 570.435(d) that is
granted for the requested activity (BUD
administered Small Cities Program); or
the submission of an application to HUD
by a city or urban county under ~ 570.458
that is granted for the requested activity
(UDAG). However, an acquisition or
displacement that oa:urs on or after the
described date is not subject to the URA if
the grantee determines that the acquisition
or displacement was not carried out for an
assisted activity, and the HUD Field
Office concurs in that determination. An
acquisition or displacement that occurs
before the described date is subject to the
URA, if the grantee or the HUD Field
Office determines that the acquisition or
disp1accment was carried out for the
assisted activity. The grantee may, at any
time, request a HUD determination
whether an acquisition or displacement
will be considered to be for an assisted
activity and thus subject to these regula-
tions. To be eligible for relocation assis-
tance, however, a person must also meet
the eligibility criteria in 24 CPR Part 42.
(b) Residendal anddisplacement and
nlocatiorr assistance pum. Under section
1000d) of the Act, each grantee must
adopt, make public and certify that it is
following a residential antidisplacement
and relocation assistance plan providing
one-for-one replacement units (paragraph
(bXl) of this section), and relocation
assistance (paragrapb (b)(2) of this sec-
tion). The plan must also indicate the
steps that will be taken consistent with
other goals and objectives of this part to
Published by Warren, Gorham, & Lamont. Inc.
minimize the dispiacement of persons
from their homes as a result of any
activities assisted under this part.
(1) One-for-one nplacemerrt units. (i)
All occupied and vacant occupiable
low/moderate-income dwelling units that
are demolished or converted to a use other
than as low/moderate-income dwelling
units as a direct result of an activity
assisted under this part must be replaced
by governmental agencies or private devel-
opers with low/moderate.income dwelling
units. Replacement low/moderate-income
dwelling units may include public hous-
ing, or existing housing receiving Section 8
project-based assistance under the United
States Housing Act of 1937. The replace-
ment low/moderate-income dwelling units
must be provided within three years of the
commencement of the demolition or reha-
bilitation related to the conversion, and
must meet the following requirements:
(A) The units must be located within
the grantee's jurisdiction.
(B) The units must be sufficient in
number and, size to house at least the
number of occupants that could have been
housed in the units that are demolished or
converted. The number of occupants that
maybe housed in units shall be deter-
mined in accordance with lccal housing
occupancy codes.
(C) The units must be provided in
standard condition. Rcp1accment
low/moderate-income dwelling units may
include units that have been raised to
standard from substandard condition.
(D) The units must be designed to
remain low/moderate-income dwelling
units for at least 10 years from the date of
initial occupancy.
(ii) Before obligating or expending
funds provided under this part for any
activity that will directly result in the
demolition of low/moderate-income
dwelling, units or the conversion of
low/moderate-income dwelling units to
another use, the grantee must make pub-
lie, and submit the following infonnation
in writing to HUD:
(A) A description of the proposed assis-
ted activity;
(B) The general location on a map and
approximate number of dwelling units by
size (number of bedrooms) that will be
demolished or converted to a use other
than for It'w/moderate-income dwelling
units as a direct result of the assisted
activity;
(C) A time schedule for the commence-
ment and completion of the demolition or
conversion;
66
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. COMMUNITY DEVELOPMENT
I
(D) The general location on a map and
approximate number of dwelling units by
size (number of bedrooms). that will be
provided as. .repiacement dwelling units;
(E) The source of funding and a time
schedule for the provision of replacement
dwelling units;: .::: .. .
.' (F) The basis for concluding that each
replacement dwelling unit will remain s
low/moderate-income dwelling unit for at
least 10 years from the date of initial
occupancy.. _... .
; (iii)(A) The requirements of paraFPh
(b)(1) of this section do not apply if the
HUD Field Office determines, based upon
objective data, that there is an adequate
supply of vacant low/moderate-inco~e
dwelling units in standard condition avall.
able on a nondiscriminatory basis within
the grantee's jurisdiction. In making t~is
determination. the HUD Field Office wlll
consider the housing vacancy rate for the
jurisdiction, the number of vacant
low/moderate-income dwelling units in
the jurisdiction (excluding units that will
be demolished or converted) and the
number of eligible families on waiting lists
for housing assisted under the United
States Housing Act of 1937 in thejurisdic-
tion.
. (B) The HUD Field Office may consid-
er the supply of vacant low/moderate-
income dwelling units in a standard condi-
tion available on a nondiscriminatory ba-
sis in an area that is larger than the
grantee's jurisdiction. Such additional
dwelling units shall be considered if the
HUD Field Office determines that the
units would be suitable to serve the needs
of the low-and moderate income house-
holds that could be served by the
low/moderate-income dwelling units that
are to be demolished or converted to
another use. The HUD Field Office must
base this determination or geographic and
demographic factors, such as location and
acc:css to places of employment and to
other facilities.
(C) The grantee must submit a request
for a determination under paragraph
(b)(1 )(iii) of this section directly to the
HUD Field Office.
(2) Re/OCIlt;on assistance. (i) Each low-
or moderate-income household that is
displaced by demolition or by the conver-
sion of a low/moderate income dwelling
unit to another use as a direct result of an
activity assisted under this part shall be
provided with relocation assistance. The
low- or moderate-income household may
elect to receive relocation assistance de-
scribed at 24 CFR Part 42 (HUD's regula-
tions implementing the URA), or may
elect to receive the. following relocation
assistance:
(A) The relocation assistance described
at 24 CFR Part 42, Subpart C (General
Relocation Requirements) and Subpart 0
(Payment for Moving and Related Ex-
penses). Relocation notices must be issued
consistent with, and in the manner pre-
scribed under, 24 CFR 42.203. The defmi-
tion of "comparable replacement dwell.
ingot used in 24 CFR Part 42 is modified
as described in paragraph (b)(3)(i) of this
section. Displaced households provided
w)th replacement housing assistance under
paragraph (b)(2)(i)(C) of this section, in
the form of a certificate or housing vouch-
er under Section 8 of the United States
Housing Act of 1937, must be provided
referrals to comparable replacement
dwelling units whose owners are willing to
participate in the housing voucher or
certificate program. The grantee shall
advise tenants of their rights under the
Federal Fair Housing Law (Title VIII)
and of replacement housing opportunities
in such a manner that. whenever feasible,
they will have a choice between relocating
within their neighborhoods and other
neighborhoods consistent with the grant-
ee's responsibility to afTumatively further
fair housing.
(B) The reasonable and necessary cost
of any security deposit required to rent the
replacement dwelling unit. and credit
checks required to rent or purchase the
replacement dwelling unit; and
(C) Replacement housing assistance.
Households are eligible to receive one of
the following forms of replacement hous-
ing assistance:
(1) Each household must be offered
compensation designed to ensure that, for
a five-year period, the disp1aced household
will not bear, after relocation, a ratio of
shelter costs to income that exceeds 30
percent. Such compensation shall be ei-
ther:
(1) A certificate or housing voucher for
rental assistance provided through the
local Public Housing Agency under Sec.
tion . 8 of the United States Housing Act of
1937; or:
(ii) Cash rental assistance equal to 60
times the amount that is obtained by
subtracting 30 percent of the displaced
household's monthly gross income (with
such adjustments as the grantee may deem
appropriate) from the lesser of: the month-
ly cost of rent and utilities at a comparable
replacement dwelling unit or the monthly
cost of rent and utilities at the decent, safe
Published by Warren. Gorham, & Lamont, Inc.
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09:0663
HDR RF~388
12-5-88
and sanitary replacement dwelling to
which the household relocates. The grant-
ee may provide the cash payment in either
a lump sum or in installments. The grant_
ee may at its discretion offer the house-
hold a choice between the cenifi.
catelhousing voucher or cash rental assis-
tance.
(2) If the household purchases an inter-
est in a housing cooperative or mutual
housing association and occupies a decent,
safe and sanitary unit in the cooperative or
association. the household may elect to
receive a lump sum payment. This lump
sum payment shall be equal to the capital-
ized value of 60 monthly installments of
the amount that is obtained by subtracting
30 percent of the displaced household's
monthly gross income (with such adjust-
ments as the grantee may deem appropri-
ate) from the monthly cost of rent and
utilities at a comparable replacement
dwelling unit. To compute the capitalized
value, the installments shall be discounted
at the rate of interest paid on passbook
savings deposits by a federally-insured
bank or savings and loan institution con-
ducting business within the grantee's juris-
diction. To the extent necessary to mini-
mize hardship to the household, the grant-
ee shall, subject to appropriate safeguards,
issue a payment in advance of the pur-
chase of the interest in the housing cooper-
ative or mutual housing association.
(ii) Eligibility for relocation assistance.
(A) A low- or moderate-income household
that is required to move as a direct result
of demolition or conversion~ of a
low/moderate income dwelling unit to
another use, is eligible for relocation assis"
tance under paragraph (b)(2) of this sec.
tion if:
(1) The household is required to move
from the dwelling unit on or after the date
that the owner submits a request to the
grantee for financial assistance that is later
approved for the requested activity. (This
applies to dwelling units owned by a
person other than a Federal or State
agency, as defined under the URA).
(2) The household is required to move
from the dwelling unit on or after the date
of the initial submission of a final state-
ment under 24 CFR 570.302(a)(2) (Enti-
tlement Grants); the initial submission of
an application to HUD by a unit of
general local government under
~~ 570.426, 570.430, or 570.435(d) this is
granted for the requested activity (HUD
administered Small Cities Program); or
the submission of an application to HUD
by a city or urban county under ~ 570.458
23
that is granted for the requested activity
(UDAG). (This applies to dwelling units
owned by a Federal or State agency as
defined under the URA.)
(B) If the displaci:ment occun on or
after the-appropriate. date d~bed in
paragraph (b)(2)(ii)(A) of this secuo~, the
low- or moderate-income household 15 not
eligible for relocation assistance if:
(1) The household is evicted for cause;
(2) The household moved into the prop-
eny on or after the date described in
paragraph (b)(2)(ii)(A) of this section,
after receiving written notice of the ex-
pected displacement; or
(3) The grantee determines that the
displacement was not a direct result of the
assisted activity, and the HOD office
concurs in that determination.
(C) If the displacement occurs before
the appropriate date described in para-
graph (b)(2)(ii)(A) of this section. the low-
or moderate-income household is eligible
for relocation assistance if the grantee or
HUD determines that the displacement
was a direct result of an activity assisted
under this part.
(3) Definitions. For the purpose of
para~raph (b) of this section:
(i) "Comparable replacement dwelling
unit" means a dwelling unit that:
(A) Meets the criteria of 24 CFR
42.2(c)(1) through (4); and
(B) Is available at a monthly cost for
rent plus estimated average monthly utili-
ty costs that does not exceed 30 percent of
the household's average gross monthly
income (with such adjustments to income
as the grantee may deem appropriate)
after taking into account any rental assis-
tance the household would receive. Where
a certificate or housing voucher is provid-
ed to a household under paragraph
(b)(2)(i)(C)(1)(i) of this section, the dwell-
ing unit must be available to the house-
hold at a monthly cost for rent and
estimated average monthly utility cost
that does not exceed the Fair Market Rent
or the payment standard, respectively.
[li) "Decent, safe and sanitary dwelling"
means a decent, safe and sanitary dwelling
as defmed in 24 CFR.42.2(e).
(iii) "Low/moderate income dwelling
unit" means a dwelling unit with a market
rental (including utility costs) that does
not exceed the applicable Fair Market
Rent (FMR) for existing housing and
moderate rehabilitation established under
24 CFR Pan 888.
(iv) "Occupiabie dwelling unit" means a
dwelling unit that is in a standard condi-
I
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HOUSING AND DEVfOPMENT REPORTE~1~;;.~:~"
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tion, or is in a substandard condition, but
is suitable for rehabilitation.
(v) "Standard condition" and "substan-
dard condition suitable for rehabilitation."
If the grantee has a HUD-approved.Hous-
ing Assistance Plan, the definitions of
"standard condition" and "substandard
condition suitable for rehabilitation" es-
tablished in the pian will apply. If the
grantee does not have a HUD-approved
Housing Assistance Plan, the grantee
must establish and make public its defini-
tion of these terms consistent with the
requirements of ~ 570.306(e)(I).
(4) EffectiW! date. For all grants except
those made under Subpart D of this part
(Entitlement Grants), the provisions of
paragraph (b) of this section are applicable
to grants mad~ OIL. or after October I,
1988. For grants made under Subpart D,
these provisions will govern all activities
for which funds are first obligated by the
grantee on or after the date the first grant
is made after September 30, 1988, without
regard to the source year of the funds used
for the activity. .
(c) Section 104(k) reloaztion require-
ments. Section 104(k) of the Act requires
that reasonable relocation assistance be
provided to persons (families. individuals,
businesses, nonprofit organizations, or
farms) displac:cd (LE.. moved permanently
and involuntarily) as a result of the use of .
assistance received under this pan to
acquire or substantially rehabilitate prop-
eny. If such displacement is subject to
paragraph (a) or (b) of this section, above,
this paragraph does not apply. The grant-
ee must develop, adopt and provide to
persons to be displac:ed a written notice of
the relocation assistance for which they
are eligible. The minimum requirements
for such assistance under the UDAG
Program are described at ~ 570.457(b).
Under CDBG programs, persons entitled
to assistance under this paragraph must be
provided relocation assistance, including
at .. minimum:
(l) Reasonable moving expenses;
(2) Advisory services needed to help in
relocating. The grantee shall advise tcn-
ants of their rights under the Feqeral Fair
Housing Law (Title VIII) and of replac:c-
ment housing opportunities in such a
manner that, whenever feasible, they will
have a choice between relocating within
their neighborhoods and other neighbor-
hoods consistent with the grantee's reo
sponsibility to affirmatively funher fair
housing; and
(3) Fmancial assistance sufficient to
. enable any person displaced from his or
Published by Warren, Gorham, & Lamont, Inc.
her dwelling to lease and occupy a suit-
able, decent, safe and sanitary replacement
dwelling where the cost of rent and utili-
ties does not exceed 30 percent of the
household's gross income.
(d) Optional relocation assistance. Under
section 105(a)(11) of the Act, the grantee
may provide relocation payments and
other relocation assistance for individuals,
families. businesses, nonprofit organiza-
tions and fanns displaced by an activity
not subject to paragraphs (a), (b) or (c) of
this section. The grantee may also provide
relocation assistance to persons covered
under paragraphs (a), (b) or (c) of this
section beyond that required. Unless such
assistance is provided pursuant to State or
local law, the grantee must provide the
assistance only upon the basis of a written
determination that the assistance is appro-
priate and must adopt a written policy
available to the public that describes the
relocation assistance that the grantee has
elected to provide and that provides for
equal relocation assistance within each
class of displac:ces.
(e) Appeals. If a person disagrees with
the grantee's determination concerning
the person's eligibility for, or the amount
of a relocation payment under this section,
the person may file a written appeal of
that determination with the grantee. The
appeal procedure to be followed are de-
scribed in 24 CFR 42.10. A low- or
moderate-income household that has been
displaced from a dwelling may file a
written request for review of the grantee
decision, to the HUD Field Office.
(f) Responsibility o[ grantee. (1) The
grantee is responsible for ensuring compli-
ance with the requirements of this section,
notwithstanding any third party's contrac-
tual obligation to the grantee to comply
with the provisions of this part.
(2) The cost of assistance required
under this section may be paid from local
public funds, funds provided under this
pan, or funds available from other'
sources.
(3) The grantee must maintain records
in sufficient detail to demonstrate compli-
ance with the provisions of this section.
(g) Displacement. For the purposes of
this section, a "displaced person" is a .
person that is required to move perma-
nently and involuntarily and includes a
residential tenant who moves from the real
propeny if:
(1) The tenant has not been provided
with a reasonable opponunity to lease and
occupy a suitable, decent, safe and sani-
tary dwelling in the same building or in a
24
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COMMUNITY DEVELOPMENT
I
nearby building on the real propeny fol-
lowing the completion of the assisted
activity at a monthly rent and estimated
average cost for utilities that does not
exceed the greater of:
(i) 30 percent of the tenant household's
average monthly gross income; or
(ii) The tenant's monthly rent and
average cost for utilities before:
(A) The date that the owner submits a
request to the grantee for financial assis-
tance that is later approved for the re-
quested activity. (This applies to dwelling
units owned by a person other than a
Federal or State agency, as defined under
the URA); or
(B) The date of the initial submission of
a final statement under ~ 570.302(a)(2)
(Entitlement Grants); the initial submis-
sion of an application to HUD by a unit of
general local government under 9 570.426,
570.430, or 570.435(d) that is granted for
the requested activity (HUD administered
Small Cities Program); or the submission
of an application to HUD by a city or
urban county imder ~ 570.458 that is
granted for the requested activity
(UDAG). (This applies to dwelling units
owned by a Federal or State agency as
defmed under the URA); or
(2) The tenant is required to move to
another dwelling in the real property but
is not reimbursed for all actual reasonable
out-of-pocket costs incurred in connection
with the move; or
(3) The tenant is required to move to
relocate temporarily and:
(i) Is not reimbursed for all reasonable
out-of-pocket expenses incurred in con-
nection with the temporary relocation.
including moving costs and any increased
rent and utility costs; or
(ii) Other conditions of the temporary
relocation are not reasonable.
~ 570.607 Employment and contracting
opportunities.
(a) Grantees shall comply with Execu-
tive Order 11246, as amended by Execu-
tive Order 12086, and the regulations
issued pursuant thereto (41 CFR Chapter
60) which provide that no person shall be
discriminated against on the basis of race,
color, religion, sex, or national origin in all
phases of employment during the perfor-
mance of Federal or federally assisted
construction contracts. As specified in
Executive Order 11246 and the imple-
menting regulations, contractors and sub-
contractors on Federal or federally assis-
ted construction contracts shall take affir-
mative action to ensure fair treatment in
employment, upgrading, demotion or
transfer, recruitment or recruitment ad-
venising, layoff or tenoination, rates of
pay, or other fonns of compensation and
selection for training and apprenticeship.
(b) Section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.C.
1701u) requires, in connection with the
planning and canying out of any project
assisted under the Act, that to the greatest
extent feasible opponunities for training
and employment be given to low and
moderate income persons residing within
the unit of local government or the metro-
politan area (or nonmetropolitan county)
as determined by the Secretary, in which
the project is located, and that contracts
for work in connection with the project be
awarded to eligible business concerns
which are located in, or owned in substan-
tial part by persons residing in the same
metropolitan area (or nonmetropolitan
county) as the project. Grantees shall
adopt appropriate procedures and require-
ments to assure good faith efTons toward
compliance with the statutory directive.
HUD regulations at 24 CFR Pan 135 are
not applicable to activities assisted under
this part but may be refem:cl to as guid-
ance indicative of the Secretary's view of
the statutory objectiv~ in other contexts.
~ 570.608 Lead-based paint.
(a) Prohibition against the use of lead-
based painL Section 40 1 (b) of the Lead-
Based Paint Poisoning Prevention Act (42
U.S.C. 4831(b)) directs the Secretary to
prohibit the use of lead-based paint in
residential structureS constructed or reha-
bilitated with Federal assistance. Such
prohibitions are contained in 24 CFR Pan
35, Subpart B, and are applicable to
residential structures constructed or reha-
bilitated with assistance provided under
this part.
(b) Notification of htlZ/lrds of lead-based
paint poisoning. (1) The Secretary has
promulgated requirements regarding noti-
fication to purchasers and tenants of
HUD-associated housing construCted pri-
or to 1978 of the hazards of lead-based
paint poisoning at 24 CFR Pan. 35,
Subpart A. This paragraph is promulgated
pursuant to the authorization granted in
24 CFR 35.5(c) and supersedes, with
respect to all housing to which it applies,
the notification requirements prescribed
by Subpart A of 24 CFR Pan 35.
(2) For propenies constructed prior to
1978, applicants for rehabilitation assis-
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I
09:0665
HDR RF-388
12-5-88
tance provided under this pan and tenants
or purchasers of propenies owned by the
grantee or its subrecipient and acquired or
rehabilitated with assistance provided un-
der this pan !thall be notified:
(i) That the propeny may contain lead-
based paint;
(ii) or the hazards of lead-based paint;
(iii) Of the symptoms and treatment of
lead-based poisoning;
(iv) Of the precautions to be taken to
avoid lead-based paint poisoning (includ-
ing maintenance and removal techniques
for eliminating such hazards);
(v) Of the advisability and availability of
blood lead level screening for children
under seven years of age; and
(vi) That in the event of lead-based
paint is found on the propeny, appropriate
abatement procedures may be undertaken.
(c) Elimination of lead-basedpainl haz-
ards. The purpose of this paragraph is to
implement the provisions of section 302 of
the Lead-Based Paint Poisoning Preven-
tion Act, 42 U.S.C. 4822, by establishing
procedures to eliminate as far as practica-
ble the hazards due to the presence of
paint which may contain lead and to
which children under seven years of age
may be exposed in existing housing which
is rehabilitated with assistance provided
under this pan. The Secretary has promul-
gated requirements regarding the elimina-
tion of lead-based paint hazards in HUD-
associated housing at 24 CFR Pan 35,
Subpan C. This paragraph is promulgated
pursuant to the authorization granted in
24 CFR 35.24(b)(4) and supcrcedes, with
respect to all housing to which it applies,
the requirements prescribed by SubpanC
of 24 CFR Pan 35.
(1) Applicability. This paragraph applies
to the rehabilitation of applicable surfaces
in existing housing which is assisted under
this part. The following activities assisted
under the Community Development
Block Grant program are not covered by
this paragraph:
(i) Emergency repairs (not including
lead-based paint-related emergency re-
pairs);
(ii) Weatherization;
(iii) Water or sewer hook-ups;
(iv) lnstallation of security devices;
. (v) Facilitation of tax exempt bond
issuances which provide funds for rehabili-
tation;
(vi) Other similar types of single-pur-
pose programs that do not include physi-
cal repairs or remodeling of applicable
surfaces (as defined in 24 CFR 35.22) of
residential structures; and
25
09:0666
(vii) Any non-single purpose rehabilita-
tion that does not involve applicable sur-
faces (as defined in 24 CFR 35.22) that
does not exceed $3,000 per unit.
(2) Dejirritions.
"Applicable surface." All intact and
nonintact interior and exterior painted
surfaces of a residential strUcture.
"Chewable surfaces." All chewable pro-
truding painted surfaces up to five feet
from the floor or ground, which are
readily accessible to children under seven
years of age, e.g., protrUding corners,
windowsills and frames, doors and frames,
and other protruding woodwork.
"Defective paint surface. Paint on appli-
cable surfaces that is cracking, scaling,
chipping, peeling or loose."
"Elevated blood lead level or EBL."
Excessive absorption of lead, that is, a
confirmed concentration of lead in whoie
blood of 25 l1I'dl (micrograms of lead per
deciliter of whole blood) or greater.
"Lead-based paint surface. .. A paint
surface, whether or not defective, identi-
fied as having a lead content greater than
or equal to I mglcm%.
(3) Inspection and Testing-(i) Defective
paint surfaces. The grantee shall inspect
for defective paint surfaces in all units
constructed prior to 1978 which are occu-
pied by families with children under seven
years of age and which are proposed for
rehabilitation assistance. The inspection
shall occur at the same time the propertY
is. being inspected for rehabilitation. De-
fective paint conditions shall be inciuded
in the work write-up for the remainder of
the rehabilitation work.
(ii) Chewable surfaces. The grantee shall
be required to test the lead content of
chewable surfaces if the family residing in
a unit, constructed prior to 1978 and
receiving rehabilitation assistance, in-
cludes a child under seven years of age
with an identified EBL condition. Lead
. content shall be tested by using an X-ray
fluorescence analyzer (XRF) or other
method approved by HUD. Test readings
of Imglcm% or higher using an XRF shall.
be considered positive for presence oflead-
based paint.
(iii) Abatement without testing. In lieu of
the procedures set forth in paragraph
(c)(3)(ii) of this section, in the' case of a
residential structure constructed prior to
1978, the grantee may forgo testing and
abate ali applicable surfaces in accordance
with the methods set out in 24 CFR
35.24(b)(2)(ii).
(4) Abatement Actions. (1) For inspec-
tions performed under ~ 570.608(c)(3)(i)
and where defective paint surfaces are
found, treatment shall be provided to
,
HOUSING AND DEVEjOPMENT REPORTER -
defective areas. Treatment shall be per-
formed before final inspection and approv-
al of the work.
(ii) For testing performed under
~ 570.608(c)(3)(ii) and where interior
chewable surfaces are found to contain
lead-based paint, all interior chewable
surfaces in any affected room shall be
treated. Where exterior chewable surfaces
are found to contain lead-based paint, the
entire exterior chewable surface shall be
treated. Treatment shall be performed
before final inspection and approval of the
work.
(iii) When weather prohibits repainting
exterior surfaces before final inspection,
the grantee may permit the owner to abate
the defective paint or chewable lead-based
paint as required by this section and agree
to repaint by a specified date. A separate
inspection is required.
(5) Abatement methods. At a minimum,
treatment of the defective areas and chew-
able lead-based paint surfaces shall consist
of covering or removal of the painted
surfaces as described in 24 CFR
35 .24(b )(2 )(ii).
(6) Funding for inspection. testing and
abatemenL Program requirements and lo-
cal program design will determine wheth-
er the cost of inspection, testing or abate-
ment is to be borne by the own-
er/developer and the grantee.
(7) Tenant protection. The own-
er / developer shall take appropriate action
to protect tenants from hazards associated
with abatement procedures. Where neces-
sary, these actions may include the tempo-
rary relocation of tenants during the
abiuement process. The owner/developer
shall notify the grantee of all such actions
taken.
(8) Records. The grantee shall keep a
copy of each inspection and! or test report
for at least three years.
(9) Monitoring and enforcement. HUD
field office monitoring of rehabilitation
programs includes reviews for compliance
with applicable program requirements for
lead-based paint. The CPO Field Monitor-
ing Handbook which currently includes
instructions for monitoring lead-based
paint requirements will be amended as
appropriate. In cases of noncompliance,
HOO may impose conditions or sanctions
on grantees to encourage prompt compli-
ance.
(10) Compliance with other program
requirements. Federal, State and local
laws.
(i) Other program requirements. To the
extent that assistance from any of the
programs covered by this section is used in
conjunction with other HUD program
I>ublishecl by WalTen. Gorham. & Lamont. Inc.
,
J
assistance which have lead-based paint
requirements which may have more or less
stringent requirements, the more stringent
requirements will prevail.
(ii) HUD responsibility. If HUD deter-
mines that a State or local law, ordinance,
code or regulation provides for lead-based
paint testing or hazard abatement in a
manner which provides a level of protec-
tion from the hazards of lead-based paint
poisoning at least comparable to that
provided by the requirements of this sec-
tion and that adherence to the require-
ments of this subpart would be duplicative
or otherwise cause inefficiencies, HUD
may modify or waive the requirements of
this section in such manner as may be
appropriate to promote efficiency while
ensuring such comparable level of protec.
tion.
(iii) Grantee responsibility. Nothing in
this section is intended to relieve any
grantee in the programs covered by this
section of any responsibility for compli-
ance with State or local laws, ordinances,
codes or regulations governing lead-based
paint testing or hazard abatement.
(iv) Disposal of lead-based paint debris.
Lead-based paint and defective paint de-
bris shall be disposed of in accordance
with applicable Federal, State or local
requirements. (See e.g., 40 CFR Parts 260
through 271.)
(.
~ 570.609 Use of debarred, suspended
or ineligible contractors or
subrecipients.
Assistance under this part shall not be
used directly or indirectly to employ,
award contracts to, or otherwise engage
the services of, or fund any contractor or
subrecipient during any period of debar-
ment, suspension, or placement in ineligi-
bility status under the provisions of 24
CFR Part 24.
~ 570.610 Uniform administrative
requirements and cost princ?Ples.
The recipient, its agencies or instrumen-
talities, and subrecipients shall comply
with the policies, guidelines, and require-
ments of 24 CFR Part 8S and OMS
Circulars A-87, A-IIO, A-122, and A-128z
implemented at 24 CFR Part 44), as
applicable, as they relate to the acceptance
'See footnote 1 for ~ S70.200(a)(S).
~.
~
26
COMMUNITY DEVELOPMENT
I
\
;
and use of Federal funds under this part.
The applicable sections of 24 CFR Part 85
and OMB Circular A-I 10 are set forth at
~ 570.502.
~ 570.611 Conflict of interest.
",:",)
-
(a) Applicability. (1) In the procurement
of supplies. equipment, construction, and
services by recipients, and by subrecipients
(including those specified at ~ 570.204(c)),
the conflict of interest provisions in 24
CFR 85.36 and OMB Circular A-lIO,
respectively, shall apply.
(2) In all cases not governed by 24 CFR
85.36 and OMB Circular A-lIO, the pro-
visions of this section shall apply. Such
cases include the acquisition and disposi-
tion of real property and the provision of
assistance by the recipient, by- its subreci-
pients, or to individuals, businesses or
other private entities under eligible activi-
ties which authorize such assistance (e.g.,
rehabilitation, preservation, and other im-
provements or private properties of facili-
ties pursuant to ~ 570.202, or grants, loans
and other assistance to businesses, individ-
uals and other private entities pursuant to
9 570.203, ~ 570.204 or ~ 570.455).
(b) Conflicts prohibited. Except for the
use of CDBG funds to pay salaries and
other related administrative or personnel
costs, the general rule is that no persons
described in paragraph (c) of this section
who exercise or have exercised any func-
tions or responsibilities with respect to
CDBG activities assisted under this part
or who are in a position to participate in a
decision making process or gain inside
information with regard to such activities,
may obtain a personal or financial interest
or benefit from a CDBG assisted activity,
or have an interest in any contract, sub-
contract or agreement with respect there-
to, or the proceeds thereunder, either for
themselves or those with whom they have
family or business ties, during their tenure
or for one year thereafter. For the UDAG
program, the above restrictions shall apply
to all activities that are a part of the
UDAG project, and shall cover any such
interest or benefit during, or at any time
after, such person's tenure.
(c) Persons covered. The conflict of
interest provisions of paragraph (b) of this
section apply to any person who is an
employee, agent, consultant, officer, or
elected official or appointed official of the
recipient, or of any designated public
agencies, or subrecipients which are re-
ceiving funds under this part.
~
-~
-L
t-
.-;:
(d) Exceptions: threshold requirements.
Upon the written request of the recipient,
HUD may grant an exception to the
provisions of paragraph (b) of this section
on a case-by-case basis when it determines
that such an exception will serve to further
the purposes of the Act and the effective
and efficient administration of the recipi-
ent's program or project. An exception
may be considered only after the recipient
has provided the following:
(1) A disclosure of the nature of the
conflict, accompanied by an assurance
that there has been public disclosure of the
conflict and a description of how the
public disclosure was made; and
(2) An opinion of the recipient's attor-
ney that the interest for which the excep-
tion is sought would not violate State or
'Iocal law.
(e) Factors to ~ considered for excep-
tions. In determining whether to grant a
requested exception after the recipient has
satisfactorily met the requirements of
paragraph (d) of this section, HUD shall
consider the cumulative effect of the fol-
lowing factors, where applicable:
(1) Whether the exception would pro-
vide a significant cost benefit or an essen-
tial degree of expertise to the program or
project which would otherwise not be
available;
(2) Whether an opportunity was provid-
ed for open competitive bidding or negoti-
ation;
(3) Whether the person affected is a
member. of a group or class of low- or
moderate-income persons intended to be
the beneficiaries of the assisted activity,
and the exception will permit such person
to receive generally the same interests or
benefits as are being made available or
provided to the group or class;
(4) Whether the affected person has
withdrawn from his or her functions or
responsibilities, . or the decisionmaking
process with respect to the specific assisted
activity in question;
(5) Whether the interest or benefit was
present before the affected person was in a
position as described in paragraph (b) of
this section;
(6) Whether undue hardship will result
either to the recipient or the person
affected when weighed against the public
interest served by avoiding the prohibited
conflict; and
(7) Any other relevant considerations.
Published by Warren. Gorham, & Lamont. Inc.
I
09:0667
HDR RF-388
12-5-88
9 570.612 Executive Order 12372.
(a) GeneraL Executive Order 12372.
Intergovernmental Review of Federal Pro-
grams, and the Department's implement-
ing regulations at 24 CFR Part 52, allow
each State to establish its own process for
review and comment on proposed Federal
financial assistance programs.
(b) Applicability. Executive Order 12372
applies to the CDBG Entitlement pro-
gram and the UDAG program. The Exec-
utive Order applies to all activities pro-
posed to be assisted under UDAG, but it
applies to the Entitlement program only
where a grantee proposed to use funds for
the planning or construction (reconstruc-
tion or installation) of water or sewer
facilities. Such facilities include storm
sewers as well as all sanitary sewers, but
do not include water and sewer lines
connecting a structure to the lines in the
public right-of-way or easemenL It is the
responsibility of the grantee to. initiate the
Executive Order review process if it pro-
poses to use its CDBG or UDAG funds
for activities subject to review.
Subpart M-Loan Guarantees
~ 570.700 Eligibie applicants.
(a) Units of general local government
entitled to receive a grant under section
106(b) of the Act (metropolitan cities and
urban counties) may apply for loan guar-
antee assistance under this subpart.
(b) Public agencies may be designated
by eligible units of general local govern-
ment to receive a loan guarantee on notes
or other obligations issued by the public
agency in accordance with this subpart. In
such case the applicant unit of general
local government shall be required to
pledge its current and future grants under
the Act as securitv for the notes or other
obligations issued" by the public agency.
9570.701 Eligible activities.
Loan guarantee assistance under this
subpart may be used for the following
activities undertaken by the unit of general
local government or its designated public
agency provided such activities meet the
requirements of ~ 570.200. However, guar-
anteed loan funds may not be used to
reimburse the program account or letter of
credit for costs incurred by the unit of
general local government or designated
public agency and paid with other CDBG
funds.
27
09:0668
(a) Acquisition of improved or unim-
proved real propeny in fee or by long-
term lease, including acquisition for ec0-
nomic development purposes.
(b) Rehabilitation of real property
owned or acquired by the unit of general
local government or its designated public
agency.
(c) Payment of interest on obligations
guaranteed under this subpart.
(d) Relocation payments and assistance
for individuals, families, businesses, non-
profit organizations and farm operations
displaced as a result of activities financed
with loan guarantee assistance.
(e) Clearance, demolition and removal.
including movement of structul'el' to other
sites. of buildings and improvements on
real property acquired or rehabilitated
pursuant to paragraphs (a) and (b) of this
section.
(f) Site preparation. inciuding construc-
tion. reconstruction. or installation of
public improvements, utilities, or facilities
(other than buildings) related to the rede-
velopment or use of the real property
acquired or rehabilitated pursuant to para-
graphs (a) and (b) of this section.
(g) Payment of issuance. underwriting,
servicing, and other costs associated with
private sector financing of notes or other
obligations guaranteed under this subpan.
(h) Housing rehabilitation eligible under
S 570.202.
(i) Activities eligible under 9 570.203.
G) Community economic development
projects eligible under S 570.204.
(k) Acquisition, construction. recon-
struction, rehabilitation. or installation of
public facilities (except for buildings for
the general conduct of government), site
improvements, and utilities. for an ec0-
nomic development purpose.
S 570.702 Application requirements.
(a) Presubmission requirements. (1) Pri-
or to submission of an application for loan
guarantee assistance to HUD, the appli-
cant must comply with the presubmission
requirements specified in 9 570.301 with
resJSec;t to the activities proposed for loan
guarantee assistance.
(2) If an application for loan guarantee
assistance is simultaneous with the appli-
cant's submission for its entitlement grant.
the applicant may use the statement of
community development objectives and
projected use of funds prepared for its
annual grant pursuant to 9 570.301 by
including and identifying the activities to
I
HOUSING AND DEVELOPMENT REPORTER
I
be undenaken with the guaranteed loan
funds.
(b) Submission requirements. An appli-
cation for loan guarantee assistance shall
be submitted to the appropriate HUD
field office and shall consist of the follow-
ing:
(I) A copy of the applicant's final
statement of community development ob-
jectives and projected use of guaranteed
loan funds.
(2) A description of how each of the
activities to be carried out with the guar-
anteed loan funds meets one of the criteria
in 9 570.208.
(3) A schedule for repayment of the
loan which identifies the sources of repay-
ment.
(4) A certification providing assurance
that the applicant possesses legal authority
to make the pledge of grants required
under 9 570.703(b)(2).
(5) A cenification providing assurance
that the applicant has made effons to
obtain financing for activities described in
the application without the use of the loan
guarantee, the applicant will maintain
documentation of such effons for the term
of the loan guarantee. and the applicant
cannot complete such financing consistent
with the timely execution of the program
plans without such guarantee.
(6) Certifications required pursuant to
9570.303. For the purposes of this re-
quirement, the terms "grant" and
"CDBO" in such certifications shall also
mean guaranteed loan.
(c) Economic feasibility and financial
risk. The Secretary will mafe no determi-
nation with respect to the economic feasi-
bility of projects proposed to be funded
with the proceeds of guaranteed loans;
such determination is the responsibility
whether a loan guarantee constitutes an
acceptable financial risk, the Secretary will
conSider the applicant's current and future
entitiement block grants as the primary
source of loan repayment. Approval of a
loan guarantee under this subpart is not to
be construed, in any way, as indicating
that HUD has agreed to the feasibility of a
project beyond recognition that pledged
grant funds should be sufficient to retire
the debt.
(d) BUD review and approWl/ of applica-
tions. (I) HUD will normally accept the
grantee's cenifications. The Secretary reo
serves the right, however. to consider
relevant information which challenges the
cenifications and to require additional
information or assurances from the srant-
ee as warranted by such information.
Published by Warren. Gorham, & Lamont. Inc_
(2) The field office shall review the
application for compliance with require-
ments specified in this subpart and for-
ward the application together with its
recommendation for approval or disap-
proval of the requested loan guarantee to
HUD Headquaners.
(3) The Secretary may disapprove an
application. or may approve loan guaran-
tee assistance for an amount less than
requested, for any of the following rea-
sons:
(i) The Secretary determines that the
guarantee constitutes an unacceptable fi-
nancial risk. Factors that will be consid-
ered in assessing financial risk shall in-
clude, but not be limited to, the following:
(A) The length of the proposed repay-
ment period;
(B) The ratio of expected annual debt
service requirements to expected annual
grant amount;
(C) The applicant's status as a metro-
politan city or urban county during the
proposed repayment period; and
(D) The applicant's ability to furnish
adequate security pursuant to
9570.703(b).
(ii) The guarantee requested exceeds the
maximum loan amount specified under
~ 570.703(a).
(iii) Funds are not available in the
amount requested.
(iv) The applicant's performance does
not meet the standards prescribed in
Subpart O.
(v) Activities to be undertaken with the
guaranteed loan funds are not listed as
eligible under 9570.70l(a) through (k).
(vi) Activities to be undenaken with the
guaranteed loan funds do not meet the
criteria in ~ 570.208 for compliance with
one of the national objectives of the Act.
(4) The Secretary will notify the appli-
cant in writing that the loan guarantee
request has either been approved. reduced
or disapproved. If the request is reduced
or disapproved. the applicant shall be
informed of the specific reasons for reduc-
tion or disapproval. If the request is
approved, the Secretary shall issue an offer
of commitment to guarantee obligations of
the applicant or the designated public
agency subject to such conditions as the
Secretary may prescribe, including the
conditions for release of funds described in
paragraph (e) of this section.
(5) Amendments to the loan guarantee
shall comply with the requirements of
9 570.305. If the applicant wishes to carry
out an activity not previously described in
its final statement or to substantially
28
COMMUNITY DEVELOPMENT
I
APPENDIX L
).
I
NON-FEDERAL GOVERNMENTAL AUOrT REQUIREMENTS
(24 CFR 44)
DEP ARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Office df the Secretary,
24 CFR PART 44
Non~Federal Government Audit
Requirements
AGENCY: Office of the Secretary, HUD.
ACTION: Final Rule
[50 FR 39086, Sept. 27, 1985]
PART 44-NON~FEDERAL
GOVERNMENTAL AUDIT
REQUIREMENTS
/ .-~\.
;!io
j;:'
-.
Sec.
44.1 Purpose.
44.2 Definitions.
44.3 Sc()pe of audit.
44.4 Frequency of audit.
44.5 Internal control and compliance
reviews.
44.6 Subrecipients.
44.7 Relationship to other audit require~
ments.
44.8 Cognizant agency responsibilities.
44.9 Illegal acts or irregularities.
44.10 Audit repom.
44.11 Audit resolution.
44.12 Audit workpapers and repom.
44.13 Audit costs.
44.14 Sanctions.
44.15 Auditor selection.
44.16 Small and minoritv audit firms.
44.17 Reponing. .
44.18 HUD audits.
Appendix to Part 44-Detinition of
Major Program as provided in the Single
Audit Act of 1984.
Authorit).: Single Audit Act of 198~ (31
U.S.c. 7501~7507); sec. 7(d) of the De-
partment of Housing and Urban Devel~
opment Act (42 U.S.c. 3535(d)).
g 44.1 Purpose.
(a) This part implements the general
audit requirements for recipient organiza-
tions in OMB Circular A~128 "Audits of
State and local governments." The OMB
Circular was issued under the Sin21e
Audit Act of 1984. 31 U.S.C. 7501-7507.
OMB Circular A~128 supersedes Attach-
ment p. "Audit requirements:' of Circu-
lar A-I02. "Uniform requirements for
grants to State and local governments."
(I) This part repeats all substantive
audit requirements in OMB Circular A-
128. If any of the substantive audit re~
Quirements in OMB Circu1ar A-128 are
revised in the future, HUD shall promul-
gate regulations to confonn this part to
those revisions.
(2) The difference between the lan~
guage of this part and ofOMB Circular A-
128 generally reflects only the substitu-
tion of cenain tenns and phrases reflect-
ing the implementation of the Circular
into the codification for HUD regula-
tions. For example. in cenain sections of
this pan. references to "Federal agencies"
in the Circular have been changed to
"HUD" and references to "this Circular"
are replaced with "OMB Circular A-128:'
(bl The Single Audit Act requires State
or local governments that receive
SIOO,OOO or more a vear in Federal funds
to have an audit made for that year.
Section 7505 of the Act reQuires the
Director of the Office of Management
and Budget (OMB) to prescribe policies,
procedures and guidelines to implement
the Act. It specifies that OMB shall
designate "cognizant". Federal agencies,
determine criteria for making appropriate
charges to Federal programs for tbe cost
of audits, and provide procedures to
assure that small firms or finns owned
and controlled by disadvantage individu~
als have the opportunity to panicipate in
contractS for single audits.
(c) Concerning the applicability of the
audit requirements of the Single Audit
Act. the Act reQuires:
(I) State or local governments that
receive S I 00.000 or more a vear in Feder-
al financial assistance shall have an audit
conducted in accordance with the ACt'S
requirements;
(2) State or local governments that
receive between 525.000 and S I 00.000 a
year shall have an audit conducted in
accordance with the Act's requirements
(Government-, Depanment-. agency- or
establishmenr~wide audit). or a grant-spe-
cific financial audit. Such financial audits
shall be perfonned in accordance with the
Government Auditing Standards for fi~
nancial audits issued by the Comptroller
General of the United States and include
the compliance tests described in OMB's
Compliance Supplement for Single Au-
dits of State and Local Governments for
the specific Federal assistance programs
involved. For those programs not covered
by the Compliance Supplement. the fi-
nancial audit shall include any specific
compliance tests required by HUD.
If the Federal assistance program is not
covered by the Compliance Supplement
PuOhsned by Werren. Gomam & Lamont, Inc.
09:1601
HDR RF-42~
6-1&-90
and if no compliance requirements have
been estabiished by HUD, the auditor
shall design appropriate compliance tests
in accordance with government auditing
standards. Audits shall be conducted with
the frequency described at ~ 44.4.
(3) State or local governments that
receive less than S25,ooo a year shall be
exempt from compliance with the Act
and other Federal audit requirements.
These State and local governments shall
comply with audit requirements pre-
scribed by State or local law or regulation.
(d) The Act does not exempt State or
local governments from maintaining rec-
ords of Federal financial assistance or
from providing access to such records to
Federal agencies. as provided in Federal
law or in 24 CFR Part 85.
(el The Act is applicable to State and
local governments with respect to any
fiscal year that begins after December 31,
1984.
g 44.2 Definitions.
"Cognizant agency" means the Federal
agency assigned by OMB to carry out the
responsibilities described in this pan,
which incorporates OMB Circular A=128.
"Federal financial. assistance" means
assistance provided by a Federal agency
in the form of grants, contracts, coopera-
tive agreements, loans, loan guarantees,
property, interest subsidies. insurance. or
direct appropriations, but does not in~
elude direct Federal cash assistance to
individuals. It includes awards received
directh' from Federal 82encies. or indi-
rectly 'through other units of State and
local governments.
"Federal agency" has the same mean-
ing as the term "agency" in section 551(1)
of Title 5. United States Code.
"Generally accepted accounting princi-
ples" has the meaning specified in the
generally accepted government auditing
standards.
"Generally accepted government audit-
ing standards" means the Szandards For
Audit of Government Organi:azions. Pro-
grams. Aczivizies. and Functions. devel-
oped by the Comptroller General, dated
February 27. 1981.
"HUD" means the Depanment of
Housing and Urban Development.
"Independent auditor" means:
(I) A State or local 20vernment auditor
who meets the independence standards
specified in generally accepted govern-
ment auditing standards: or
3
'09:1602
(2) A public accountant who meets
such independenc:e standards.
"Indian tribe" means any Indian tribe,
band. nation. or other organized group or
community, including any AJaskan Na-
tive village or regional or village corpora-
tion (as defined in, or established under,
the Alaskan Native Claims Settlement
Act) that is recognized by the United
States as eligible for the special programs
and services provided by the United
States to Indians because of their status as
Indians.
"Internal controls" means the plan of
organization and methods and proce-
dures adopted by management to ensure
that:
(1) Resource use is consistent with
laws, regulations, and polici~
(2) Resources are safeguarded against
waste, loss. and misuse; and
(3) Reliabie data are obtained, main-
tained, and fairly disclosed in repons.
"Local government" means any unit of
local government within a State, includ-
ing a county, a borough, municipality,
city, town., township, parish, local public
authority, special district, school district,
intrastate district, council of govern-
ments, and any other instrumentality of
local government.
"Major Federal Assistance Program" is
defined in the Appendix to this part.
"Public accountants" means those in-
dividuals who meet the qualification
standards included in generally accepted
government auditing standards for per-
sonnel performing government audits.
I
HOUSING AND DEiOPMENT REFORTEF.
"State" means any State of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, the Vir-
gin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana
Islands., and the Trust Territory of the
Pacific Islands., any instrumentality there-
of, and any multi-State, regional, or inter-
state entity that has governmental func-
tions and any Indian tribe.
'"Subrecipient" means any person or
government depanment, agency, or es-
tabiishment that receives Federal finan-
cial assistanc:e through a State or local
government, but does not include an
individual that is a beneficiary of such
assistance. A subrecipient may also be a
direct recipient of Federal financial assis-
tance.
~ 44.3 Scope of audit.
(a) The audit shall be made by an
independent auditor in accordance with
generally accepted government auditing
standards covering financial and compli-
anc:e audits.
(b) The audit shall cover the entire
operations of a State or locaJ government
or, at the option of that government, it
may cover deJ)8rtments, agencies or es-
tablishments that received, expended, or
othClWise administered Federal fmancial
assistaDc:e during the year. However, if a
State or local government receives
$25,000 or more in General Revenue
Sharing Funds in a fiscal year, it shall
have an audit of its entire operations. A
series of audits of individual depart-
Published by Warren. Gomem & Lamont. Inc_
ments, agencies. and establishments for
the same fiscal year may be considered a
single audit.
(c) Public hospitals and public colleges
and universities may be excluded from
State and local audits and from the
requirements of this part. However, if
such entities are excluded, audits of these
entities shall be made in accordance with
statutory requirements and the provisions
of Circular A-IIO, "Uniform require-
ments for grants to universities, hospitals,
and other nonprofit organizations."
(d) The auditor shall determine wheth-
er.
( I) The financial statements of. the
government., department, agency or es-
tablishment present fairly its financial
position and the resuits of its financial
operations in accordance with generally
accepted accounting principles;
(2) The organization has internal ac-
counting and other control systems to
provide reasonable assurance that it is
managing Federal financial assistance
programs in compliance with applicable
laws and regulations; and
(3) The organization has complied with
laws and regulations that may have a
material effect on its financial statements
and on each major Federal assistance
program.
~ 44.4 Frequency of audit.
Audits shaH be made annually
unless the State or local government
has adopted by January 1, 1987, a
constitutional or statutory requirement
4
COMMUNITY DEVELfPMENT BLOCK GRANTS
~
l
for less frequent audits. For those
governments, the cognizant agency shall
permit biennial audits. covering both
years, if the government so requests. It
shall also honor reqU8.8ts for biennial
audits by governments that have an
administrative policy calling for audits
less frequent than annual. but only for
fiscal years beginning before J anuUy 1.
198'1,
! 44.5 Internal controt and ~
revI....
The independent auditor sball
determine and report on whether the
organization bas intemal control
systems to provide reasonable
assurance that it is managing Federal
assistance programs in compliance with
applicable laws and regulations.
(a) Internal control review. In order to
provide the above-described assurance.
the auditor shall conduct a study and
evaluation of internal control systems
used in administering Federal assiatance
programs. The study and evaluation
shall be made wbether or not the auditor
intends to place reliance on such
systems. As part of this review. the
auditor shall:
(1) Test wbether these internal control
systems are functioning in accordance
with prescribed procedures. and
(2) Examine the recipient's system for
monitoring subrecipients and obtaining
and acting on subrecipient audit reports.
(b) Compiiance review. The auditor
shall determine whether the
organization bas complied with laws
and regulations that may have a
material effect on each major Federal
assistance program.
(1) In order to determine which major
programs are to be tested for
compliance. State and local
governments shall identify in their
accounts all Federal funds received and
expended and the programs under
which they were received. This shall
include funds received directly from
Federal agencies and through other
State and local governments.
(2) The review sball include the
selection and testing of a representative
number of charges from each major
Federal assistance program. The
selection and testing of transactions
shall be based on the auditor's
professional judgment considering such
factors as the amount of expenditures
for the program and the individual
awards; the newness of the program or
changes in its conditions; prior
experience with the program.
particularly 8S revealed in audits and
other evaluations (e.g., inspections.
program reviews): the extent to which
the program is carried ou. through
subrecipients:the extent to which the
program contracts for goods or services:
the level to which the program is
already subject to program reviews or
other forms of independent oversight;
tbe adequacy of the controls for
ensuring compliance: the expectation of
adherence or lack of adherence to the
applicable laws and regulations: and the
potential impact of adverse findings.
(i) In making the test of transactions,
the auditor shall determine whether the
amounts reported as expenditures were
for allowable services or benefits. and
wbether the records show that those
wbo received services or benefits were
eligible to receive them. .
(il) In addition to transaction testing,
the auditor shall determine wbether
matching requirements. levels of effort
and earmaking limitations were met;
wbether Federal financial reports and
claims for advances and
reimbursements contain information
that is supported by the books and
records from which the basic fmancial
statements have been prepared: and
whether amounts claimed or use.i for
matc:hiDg were determined in
accordance with OMS Circular A~;
"Cost principles for State and local
governments." and Attachment F of
OMS Circular A-102.
(iii) The principal compliance
requirements of the largest Federal aid
programs may be ascertained by
referring to the Compliance Supplement
for Single Audits of Stale and Local
Governments. issued by OMS and
ava.ilable from the Government Printing
Office. For those programs not covered
in the Compliance Supplement, the
Published by Warren, Gorham & Lamont, Inc.
I
09:1603
HDR RF -306
10-28-85
auditor may ascertain compliance
requirements by researching the
statutes. regulations. and agreements
governing individual programs.
(3) Transactions related to other
Federal assiatance programs that are
selected in connection with
examinations of financial statements
and evaluations of intemal controls
sbalJ be tested for compliance with
Federal laws and regulations that apply
to such transactit)ns.
(Approved by the Office or Menagement and
Budset under OMB control number 2S35-
0094).
! 44.6 SUbreclptents.
State and local governments that
receive Federal financial assistance and
provide $25.000 or more of it in a fiscal
year to a subrecipient sbal1:
(a) Determine whether State or local
subrecipients have met the audit
requirements of this part and whether
subrecipients covered by OMS Circular
A-110, "Uniform requirements for grants
to universities, bospitals. and other
nonprofit organizations," bave met those
requirements;
(b) Determine whether the
subrecipient spent Federal assistance
funds provided in accordance with
applicable laws and regulations. This
may be accomplisbed by reviewing an
audit of the subrecipient made in
accordance with this part. Circular A-
110. or through other means (e.g..
program reviews) if the subrecipient bas
not yet bad such an audit
(c) EnIlUl"8 that appropriate corrective
action is taken within six months after
receipt of the audit report in instances of
noncompliance -With Federal laws and
regulations:
(d) Consider wbether subrecipient
audits necessitate adjustment of the
recipient's own records: and .
(e) Require each subrecipient to
permit independent auditors to have
access to the records and financial
statements as necessary to comply with
this part. .
09: 1604
f 44.7 Ret8t1oMh1t' to other 8UdIt
requirwnentL
(a) The Single Audit Act provides that
an audit made in accordance with OMS
Circular A-128 shall be in lieu of any
financial or financial compliance audit
required under individual Federal
assistance programs. To the extent that
a single audit provides HUD with
information and assurances the
Department needs to carry out its
overall program responsibilities. such
information shall be used. However. any
additional audits that are necessary to .
carry out responsibilities under Federal
law and regulation shall be planned and
carried out in such a manner as to avoid
duplication.
(b) HUD audit"tequirements in this
part do not limit the authority of the
Department to conduct or contract for
audits and evaluations of Federal
financiall;lssistance programs. nor do
these audit requirements limit the
authority of the HUD Inspector General
or other Federal audit officials.
(c) HUD audit requirements in this
part do not authorize any State or local
government or subrecipient thereof to
constrain HUD in any manner. from
carrying out additional audits.
(d) If HUD conducts or contracts for
audits iDaddition to the audits
conducted by recipients under this part.
the Department sball. consistent with
other applicable laws and regulations.
arrange for funding the cost of such
additional audits.
f 44.8 Cognizant agency r..ponalbllltlea.
(a) Tbe Single Audit Act provides for
cognizant Federal agencies to oversee
the implementation of this part. OMS
will assign cognizant agencies for States
and their subdivisions. and for larger
local governments and their
subdivisions. HUD may participate with
an assigned cognizant agenci. in order
to fulfill the cognizant responsibilities.
Smaller governments not assigned a
cognizant agency will be under the
general oversight of the Federal agency
that provides them the most funds.
whether directly or indirectly.
I
HOUSING AND DEfLOPME1'\T REPORTER
(blIf HUD is designated as a
cognizant agency. it will:
(1) Ensure that audits are made and
reports are received in a timely manner
and in accordance with audit
requirements of this part.
(2) Provide technical advice and
liaison to State and local governments
and independent auditors.
(3) Obtain or make quality control
reviews of selected audits made by non-
Federal audit organizations.-and provide
the results. when appropriate. to other
interested organizations.
(4) Promptly inform other affected
Federal agencies and appropriate
Federal law enforcement officials of any
reported illegal acts or irregularities.
They sbould also inform State or local
law enforcement and prosecuting
authorities, if not advised by the
recipient. of any violation of law within
their jurisdiction.
(5) Advise the recipient of audits that
bave been found not to bave met the
requirements in this part. In such
instances, the recipient will be expected
to work with the auditor to take
corrective action. If corrective action is
not taken. HUD shall notify the recipient
and Federal awarding agencies 0(. the
facts and make recommendations for
follow-up action. Major inadequacies or
repetitive substandard performance of
independent auditors sball be referred
to appropriate professional bodies for
disciplinary action.
(6) Coordinate. to the extent
practicable. audits made by or for
Federal agencies that are in addition to
the audits conducted under this part. so
that the additional audits build upon
such audits.
(7) Oversee the resolution of audit
findings that affect the programs of more
than one agency.
f 44.9 ....... acts or IrreguI8rttIea.
If the auditor becomes aware of illegal
acts or other irregularities. prompt
notice shall be given to recipient
management officials above the level of
involvement. The recipient. in turn. shall
promptly notify the cognizant agency of
Published by Warren, Gorham & Lamont, Inc_
the illegal acts or irregularities and of
proposed and actual actions. if any.
Illegal acts and irregularities include
such matters as conflicts of interest.
falsification of records or reports, and
misappropriations of funds or other
assets.
t 44.10 Audit reports.
(al Audit reports shall be prepared at
the completion of the audit. The audit
report shall state that the audit was
made in accordance with the provisions
of HUD requirements at 24 CFR Part 44.
The report shall be made up of at least:
(1) The auditor's report on financial
statements and on a schedule of Federal
assistance: the financial statements: and
a schedule of Federal assistance.
showing the total expenditures for each
Federal assistance program as identified
in the Catalog of Federal Domestic
Assistance. Federal programs or grants
that have not been assigned a catalog
number shall be identified under the
caption "other Federal assistance."
(2) The auditor's report on the study
and evaluation of internal control
systems must identify the organization's
significant internal accounting controls.
and those controls designed to provide
reasonable assurance that Federal
programs are being managed in
compliance with laws and regulations. It
must also identify the controls that were
evaluated. the controls that were not
evaluated. and the material weaknesses
identified as a result of the evaluation.
(3) The auditor's report on compliance
containing:
(i) A statement of positive lssurance
with respect to those items tested for
compliance. including compliance with
law and regulations pertaining to
fmancial reports and claims for
advances and reimbursements:
(il) Negative assurance on those items
not tested;
(iii) A summary of all instances of
noncompliance: and -
(iv) An identification of total amounts
questioned. if any. for each Federal
assistance award. as a result of
noncompliance.
COMMUNITY DEVElOPMENT BLOCK GRANTS
/
/
/
/
(b) The three parts of the audit report
may be bound into a single report, or
presented at the same time as separate
documents:
(c) All fraud. abuse, or iIlepl acts or
indications ohuch acts, including all
questioned costs found U. the result of
these acts that auditon become aware
of. should normaUy be covered in a
separate written report submitted in
accordance with paragraph (f).
(d) In addition to the audit report, the
recipient shall provide c.omments on the
findings and recommendations in the
report; including a plan for colTeCtive
action taken or planned and comments
on the stetus of corrective actions taken
on prior findings. If corrective action ia
not necessary, a statement describing
the reasOD it is not should accompany
the audit report.
(e) The reports shall be made
available by the State or local _
government for public inspection within
30 days after the completion of the
audit.
(f) In accordance wit,!1 generally
accepted government audit standards.
reports shall be submitted by the auditor
to the organization audited and to tho,e
requiring or ll1T8IIgiDg for the audit. In
addition. the recipient shall submit
. copies of the reports to each Federal
department or agency that provided
Federal assistance funds to the
recipient. Subrecipients shall submit
copies to recipients that provided them
Federal assistance funds. The reports
shall be sent within 30 days after the
completion of the audit,. but DO later
than one year after the end of the- audit
period. unleS8 a longer period ia agreed
to with the cognizant agency.
_ (g) Recipients of more than $100.000 in
Federal funds shall submit one copy of
the audit report, within 30 days after
issuance. to a central clearing house,
desisnated by OMS. The clearing house
will keep completed audits on file and
follow up with State and local
governments that have not submitted
required audit reports.
(h) Recipients shall keep audit reports
on file for three years after their
iasuance.
(Approved by the Of&c:e of MaDqement and
Badpt UDder OMS control D1IDlber ~
00lM.) -
f .....11 AudIt ~
(a) Aa deec:ribed in 144.8. the
copizant agency shall be responsible
for monitoring the resolution of audit
findings that affect the programs of more
than one Federal agency. Resolution of
findings that relate to the programs of a
single Federal agency will be the
responaibility of the recipient and that
agency. Alternative arrangements may
be made on a caae-by-cue basis by
agreement among the agencies
concerned.
(blRuo.lution.ahall be made within
six months after receipt of the report by,
the Federal departments and agencies.
CorreCtive action should proceed as-
raJridly as poasible.
f .....12 AUdIt WOltlp 1'" ~ ~
WorkPapers and reports shall be
retained for a minimum of three yean
from the date of the audit report, unle..
the auditor is notified in writing by the
cognizant agency to extend the retention
period. Auditworkpaperi shall be made
available upon request to the cogaizant
agency or its desigpee or the Gener8l
Accounting Office. at the completion of
the audit.
(Approved by the OfBce of Management and
Budtet UDder OMB contral number 2535-
00lM.)
f .....13 AucIt .....
The coat of audita made in accordance
with the audit requirements of this part
are allowable charsea to Federal
assistance programs.
(a) The charges may be considered a
direct cost or an allocated indirect cost.
determined in accordance with the
provisions of OMS Circular A~, "Coat
principles for State and local
governments. "
PullIistIed by Warren, Gorham & Lamont. Inc.
I
09: 1605
HDR RF-373
5-9-88
(b) Generally, the percentage of costs
charged to Federal assistance programs
for a single audit shall not exceed the
percentage that Federal funds expended
represent of total funds expended by the
recipient during the fiscal year. The
p81'ceDtage may be exceeded, however,
if appropriate documentation
demonstrates higher.actualcosL
t ..... 14 s.nctIonL
No coat may be charged to Federal
assistance programs for audits that are
reqUired by this part. but.are DOt
conducted in accordance with the audit
requirements of this part. In case of a
recipient's con~widinability or'
unwll1ingn,S!l t,o ha~a proper-4Udit.
Federal agencies shall consider' other
appropriate sanctions, .includin8:
(a) Withholding a percentage of
assiat8Jlcep.yments until the audit is
completed satisfactorily;
(b) Witholding or diaallowiDg
overhead costa; and
(c) Suppending the Federalasaiatance
agruDJeiit' Until the audit is made. .
~ 44.15 Auditor selection.
In arranging for audit services, State
and local governments shall follow the
procurement standards prescribed 24
CFR Part 85.36. The standards provide
that ~hile. recipients are encouraged to
enter IOtO IOtergovernmental agreements
for audit and other services, analysis
should be made to detennine whether it
would be more economical to purchase the
services from private firms. In instances
where use of such intergovernemntal
agreements are required by a State statute
(e.g., audit services) the State statute will
take precedence.
t .....18 SmIIlI 8IId nmortty ... fInnL'
Small audit firms. and audit firms
owned and controlled by socially and
economically disadvantaged
individuals. shall have the maximum
7
<. 09: 1606
practicable opportunity to participate in
contracts awarded to fulfill the audit
requirements of this part. (As used in
this. section. the term "smalL audit firms"
iDcludes the term "audit firms controlled
by socially and economically
diladvantage individuals".) Recipients
of Federal aaaistance ahall take the
following steps to further this '8Oa1:
(a) Assure thatamall audit firms are
used to the fullelJt extent practicable;
(b) Make information on forthcoming
opportunities available to. and arrange
time schedules for the audit so as to
encourage and facilitate participation
by. small audit firms;
(c) Consider in the contract proceas
whether firms competing for larger
audits intend to subcontract with small
audit firms;
(d) Encourage contracting with small
audit firms that have traditionally
audited government programs and. in
cases wbere this is not possible, assure
that these firms are given consideration
for audit subcontracting opportunities;
(e) Encourage contracting with
consortiums ohmall audit firms when a
i
HOUSING. AND DEVILOPMENT REPORTER
contract is too large for an individual
small ffrID; ana
(I) Use the services and assiatanC8, as
appropriate, of the Small Business
AdinlniBtration in the solicitation and-
utilblatlon of ilmall audit firms.
'....,7 RIp artIng.
HUD shall report to the Director of
OMBon or before March 1, 1987, and
annually thereafter, on the effectiveness
of State and local governments in .
carrying out the req~ments of the
OMB Circular. The report shall identify
each State or local government or Indian
tribe that. in the opinion of-HUD. baa
failed to comply with OMB Circular or
with this'part.
'....,.. HUD......
(8) The Secretary of HUD or the
Secretary's authorized representative
shall have acceaa to all books. accounts.
recorda. reports, mes and other papers
or property of a recipient organization
pertaining to Federal assistance
supplied by-HUD to the recipient
oriani~tion. for the purpose of-making
Published by W8IT8rt. Gorham & Lamont. Inc.
specific IUveys, audita, examination..
excerpts and transcripts.
AppeadIx to Put ~tion of Major
Propam as ProvidecIID the Single Audll Act
of 11M
'"Major Federel AseistaDce Program." for-
State and local perlUD8I1ts haviDg Federal
auistaDce expendltures between 510?.?oo
and S100 million doJlan. meana any program
for which Federal axpendilurel during the
applicable year exceed the lar8er of S3OO.OOO.
or 3 percent of such total expenditures.
Where total expenditures of Federal
assistance exceed $100 miillOD. the following
criteria apply:
To.- __.... III F..... tIn8rll*I
........ tar .. prugr8IIlS
~. ,......
...-.nee
PR9M'
-- Uly
PR9M' -
----
Mcft __
IluI ...__
S100 miIIan. S1 billion. 53 miI/lon.
SI biIIon__ 52 billion $06 mIlian.
52 biIlIlIn 53 bIIIian 57 miIIiIln.
53 biIIIon._._ $06 biIIlan._- $10 milIlalL
54 tlilIIan - 55 bib $13 miIIIan.
55 biIIian $I biIIian___ S1' million.
58 biIlIan 57 billion S19 million.
0.. 57 bIIIan__ __'__'__ S20 mllIon.
8