AGREEMENT-BENEFIT TO LOW AND MODERATE INCOME RESIDENTS WITHIN THE CITY OF CLEARWATER
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AGREEMENT FUNDED UNDER
THE CLEARWATER COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
THIS AGREEMENT is entered into as of the lst 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 SERVICE FOUNDATION 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, in a satisfactory and proper manner as
determined by the Department, conduct the Project outlined in
Appendix A.
2. The term of this Agreement shall commence on October 1,
1990, and terminate on September 30, 1991, unless earlier cancelled
as provided herein. The Agreement may be extended for up to one
additional year upon the request of the PSA and the written
authorization of the City Community Development Manager. The need
and merit shall be at the 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-IIO, provided in Appendix G, and with the provisions of OMB
Circular 122, provided in Appendix H, or the appropriate successors
documents of these documents. The PSA shall permit the City to
audit the PSA's financial operation including but not limited to
compliance with applicable provisions of Federal law and
regulations. All PSA financial records relating to the Project are
subject to review by the City.
6. All subcontractors under this Agreement shall be approved
by the City.
7. All purchases of consumable 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:
(I) 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
wi th 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
Community Development Funds. The report shall also contain a
verification of the existence and current used and location of the
property, and, if applicable, the continued need for the property.
No real or personal property or custody thereof, purchased with
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.
II. 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
moni toring 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.
IS. 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-IIO 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
with 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.
f.
The City may suspend, withhold, or terminate payment of the
in whole or in part, for cause or convenience. Cause shall
the following:
Use of funds that does not follow project guidelines.
Failure to comply with any term or condition hereunder.
Refusal to accept conditions imposed by HUD.
Refusal to accept conditions imposed by the City.
Submittal of reports which are incorrect or incomplete in
any material respect.
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.
Convenience shall be according to the regulations in 24 CFR
85.43 and 85.44.
project,
included
a.
b.
c.
d.
e.
g.
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. 60 I ) .
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 SERVICE FOUNDATION
By (!4J~f/lL~ /04-
President
ATTEST:
'2t
. ~_ J'V'...-l ~ ~
Secretary
CITY OF CLEARWATER, FLORIDA
By
4 /I- -dL-
Ron H. Rabun
City Manager
ATTEST:
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Approved as to form & correctness:
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-~. _'-'::.-. Crnth1a: 90udeau
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CITY OF CLEARWATER
PLANNING AND DEVELOPMENT DEPARTMENT
PINELLAS COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
AND
COMMUNITY SERVICE FOUNDATION, INC.
MEMO OF UNDERSTANDING
I n order to meet the regu 1 at ions estab 1 i shed in the Sect ion 570.503 of the
Housing and Community Development Act of 1970, as amended, which states that
"Before disbursing any CDBG funds to a recipient, the recipient shall sign a
written agreement with the subrecipientll and to create the optimum atmosphere
of cooperation and efficiency in executing the Community Development Block Grant
Program, the following memorandum of understanding is adopted.
ORGANIZATIONAL STRUCTURE
The Community Development Office of the City of Clearwater Planning and
Development Department shall provide the lead role in administering the
Community Development Block grant program. The Community Development
Office will be responsible for disbursing the Community Development Block
Grant funds to subrecipients which the City Commission has elected to
fund. Along with the distribution component, the Community Development
Office will be responsible for preparing agreements and monitoring the
subrecipient for compliance with Section 570 of the Housing and Community
Development Act of 1970. The City Community Development Office will
disburse these funds to the Pinellas County Community Development Office
on behalf of the Community Service Foundation.
The Pinellas County Community Development Office will have the overall
responsibility for implementing its portion of the Pinellas County
Community Development Block Grant. They will act as the lead Agency in the
three way partnership between the City of Clearwater, Pinellas County and
Community Service Foundation, inc.. The Pinellas County Community
Development Department will process all requests for reimbursements on
items listed in the Budget Section of Appendix B of the City of Clearwater
Community Service Foundation Inc. Agreement in accordance with Section 570
of the Housing and Community Development Act of 1974, as amended.
Once the Pinellas County Community Development Department reimburses the
Community Service Foundation, Inc. for eligible activities that relate to
the City of Clearwater portion, a request for reimbursement will be
forwarded to the City, along with a copy of the check paid to the
Community Service Foundation, Inc.
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The Community Service Foundation, Inc. shall forward all requests for
reimbursement for items identified in Appendix B of the City of Clearwater
Community Service Foundation, Inc. Agreement to the Pinellas County
Community Development Department. All requests forwarded must be within
the terms and conditions specified in the said agreement. The Pinellas
County Community Development Department will keep source documentation for
all requests for reimbursement rendered on behalf of the City of
Clearwater.
I agree with the provlslons set forth in this City of Clearwater Planning
Department/Pinellas County Community Development Department/Community Service
Foundation Memorandum of Understanding.
Agreed:
.P
Polatty, Jr
City of Clearwater
Planning and Development Director
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, Date
einlA/7/~--
Charles Mann
Executive Director
Community Service Foundation
IRe/: I IfllJ
Date
~
alada
Pine 11 a County
Planning Department Director
~%t C ( /rid
Dat~
II
Agency: Community Service Fndtn.
Year: 1990 - 1991
APPENDIX A
Identification of Agency and Specific Services to be Provided
AGENCY
Name:
Community Service Foundation
A non-profit corporation organized and existing under
the laws of the State of Florida.
Legal classification:
Principal Office:
Mailing Address:
Agent:
111 South Garden Avenue, Clearwater, Florida 34616
111 South Garden Avenue, Clearwater, FL 34616
Charles D. Mann, Executive Director
813-461-7821
PROGRAM OF AGENCY
The Community Service Foundation is a community based organization providing a
broad range of services and advocacy on issues affecting community improvement,
homelessness, and low and moderate income families and individuals.
SPECIFIC SERVICES TO BE PROVIDED UNDER THIS AGREEMENT
The Community Service Foundation will continue to provide a Central Housing
Assistance Service counsel ing and assistance program which includes the following
elements:
1. Housing Placement
2. Rental Listings
3. Emergency Rental Assistance
4. Emergency Utility Assistance
5. Pinellas County Social Service Emergency Rent Checks
6. Referrals to Human Services Agencies
7. Fair Housing Education
The Pinellas County Community Development Department is the LEAD AGENCY for all
agencies funding the Central Housing Assistance Program of the Community Service
Foundation for this Agreement. Specific program accomplishments and monitoring
are as determined in further detail by the agreement between Pinellas County and
the Community Service Foundation. Reports will be sent by the Community Service
Foundation directly to the City, in addition to any report copies which are sent
directly to Pinellas County.
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SCHEDULE
I. Community Service Foundation
General Statements
A. Program shall begin operation no later than the later of 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 approved by the Community Development
Manager.
C. Monthly activity reports shall be forwarded to the City by the Agency
on a monthly bases and shall reflect program activity from the previous
month. These reports shall be forwarded to the City no later than the
15th of 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. Special Data requests will be responded to within 15 calendar days,
subject to the request being of reasonably limited scope.
E. Records will periodically be viewed by the City to verify reimbursement
accuracy and as part of the yearly monitoring process.
F. Payment will be in accordance with the payment schedule identified in
Appendix C.
G. Payments shall not be forwarded to the agency by the City unless the
agency has satisfactorily completed the tasks identified in this
agreement.
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Agency: Community Service Fndtn.
Year: 1989 - 1990
APPENDIX B
Project Award
Funding by the City of up to $39,000.00 will be provided for operating support,
including personnel, equipment and supplies, and other operating expenses.
BUDGET
COMMUNITY SERVICE FOUNDATION
October 1, 1990 - September 30,1991
I. Personnel
Administrative Assistant
Bookkeeper
Housing Counselor (1)
Housing Counselor (2)
Computer Operator
Secretary
Rental Unit Developer
Clerk
F.I.C.A. U/C & W Comp
FICA & UC/WC Rental Unit Dev
Health/Medical Insurance
TOTAL PERSONAL & FRINGE
II. Other
Telephone
Postage
Office Supplies
Travel
TOTAL BUDGET
CITY PCNTY LARGO
CDBG CDBG CDBG
TOTAL
$ 2,010 $ 3,629 $ 630 $ 6,269
$ 4,800 $ 8,668 $ 1,510 $14,978
$ 5,550 $10,018 $ 1,750 $17,318
$ 5,550 $10,018 $ 1,750 $17,318
$ 3,550 $ 6,403 $ 1,120 $11,073
$ 3,560 $ 6,420 $ 1,130 $11,110
$ 2,570 $ 4,654 $ 810 $ 8,034
$ 3,000 $ 5,400 $ 960 $ 9,360
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$30,590 $55,210 $ 9,660 $95,460
$ 2,610 $ 4,715 $ 820 $ 8,145
$ 200 $ 355 $ 60 $ 615
$ 2,990 $ 5,400 $ 940 $ 9,330
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$ 5,800 $10,470 $ 1,820 $18,090
$36,390 $65,680 $11,480
$113,550
$ 730 $ 1,333 $ 230 $ 2,293
$ 230 $ 425 $ 70 $ 725
$ 760 $ 1,375 $ 240 $ 2,375
$ 890 $ 1,597 $ 280 $ 2,767
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$ 2,610 $ 4,730 $ 820 $ 8,160
$39,000 $70,410 $12,300
$121,710
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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 sha 11 be kept 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-Dther program
Requlrementl
I 570.r.00 Goner.'
(II) Scction l04(b) C.r Illc Act provides
lhal an)' grant under Hection lOG of the
Act shall be ro. .... nly if Ille grantee
certifiea 'to the slltisfaction of the
Secreta'ry, among olher lhings. lhatthe
granl "......i1llie.conducled and
administered in confonnily with Pub. 1-
8.6-354 and Pub. L. 90-21].;," and. further.
thai the grantee "will comply with the
olher provisions of this tille and with
other applica ble la ws:: Section l04(d)(l)
of the Act requires thaI the Secretary
dt:lermine with rcspect to grants made
pursuant to section l06(b) (Entitlement
Grants) and 106(d}(2)(B) (Hun-
Administered Small Cilies Granta). at
least on an aMual basis. among other
things. ........hether the grantee has carried
out lits) certifications in compliance
with the requirements and the primary
objectivel of this title and with olher
applicable laws' . . :. Certain olher
sta tules are expressly made applicable
to IIctivilies assisted under the Act by
the Act ilself. willie oth('.f lawl not
refel'TCd to in the Act may be applicable
to auch activities by their own lerms.
Certain statutes or E.xecutive Ordcrs
which may lie applicable to activitiel
assisled under the Act by their own
term; are administered or enforced by
governmental departmenu or agencies
other than the Secretary or the
DepartmenL This Subpart K enwnerates
laws which the Secretary will treat as
applicable to grants made under section
106 of the Act. other th~ grants 10
APPENDIX D
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OTHER PROGR&~ REQUIRE~~NTS
States made pursuant to section lOG(d)
of the Act. for purposes of the
delenninolion. dcecrilled above to be
made by the Secretary under section
l04(d)(l) of Ihe Act. including atatules
cxpreuly mode applicable by the Act
and certain other .tatutu and Executive
Orders for which the Secretary has
enforcement respon~ibilily. The absence
of mention herein of any other statule .
for which the Secretary docs not have
direct enforcement responsibility ia not
intended to be laken as aD indication
Ihat. in the Seeretary's opinion. .uch
statule or Executive Order Is not
applicable to activities assisted under
the Act. For laws which the Secretary
willlreat as applicable 10 grants made
to States under leclion lOO(d) of the Act
for purposes of the dete~inalion
required to be made by the Secretary
pursuant to lection 104{d){2) of the Act.
see I 570,(96.
(b) This Subpart also let. forth certain
addilional program requirement. which
the Secretary hu determined to be
spplicable to grants provided under the
Act as a maller of administrative
discretion.
(c) In addition to grants made
pursuant to section 106(b) and
lOG(d)(2}(B) of the .A.ct (Subparts D and F
of this Part.. respecti)'ely). the .
reauirements of this Subpart K are
applicable 10 grants made punuantto
sections 107 and 119 of the Act
(Subparts E and G. respectively).
~ 570.601 Pub. L 11&-352 and Pub. L 9<)-
284; E.xecutlve Order 11063-
Section l04(b) of the Act provides that
any grant under section 106 of the Act
shall be made only if the grantee
ce'rtifiea to Vie aalisfac\ion of the
Secretary that the granl "will be
conducted and administered in
conformity with Pub. l.. 88-352 snd Pub.
L. ~284:' Similarly. sectioD 107
provides thaI no granl may be made
D-l
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under that teetion (Secretary'.
Di.cretionsry fund) or .ection 119
(UDAG) without utisfactory aesurance,
to' the &SIne effect.
(a) "Pub. 1- ~52" refen \0 Title VI
of tbe Civil Right. Act of 1004 (,(2 U.S.C.
2000d e( .eq.). which provide. thst no
penon In the United States Ihl1l1 on the
ground of race. color. or DO tional origin.
be excluded [rom participation In. be
denied the benefila of. or be luujeeted 10
di.crimination under any program or
acllvlly receiving Federal finonclal
ossi.tanc8. Section 602 of the Civll
Rights Act of 1004 direct. each Federal
depllttment and agency empowered to
extend Federnl financial suistance to
any progt'am or activity by wa)' oC grant
10 eClectuate the foregoing prohibition
by j"uing rules. regulationa, or orden of
general arpllcability which shall be
consistent with achievement of the
. . Itatut~ suthori~i"i the financial
assislance. HUt) reguls Ilonl
implementing the requirements of Title
VI with respect to HUn programs are.
contained in 24 CFR Part 1. .
(b) "Pub. l.. 90-ZlJ.4" refers to Tille Vlll
of the Civil Righls Act of 1968 (42 V.S.c.
3001 ~( seq.). popularl)' known as the
Fair Housing Act. which provides that it
is the policy of the United Sla les to
provide. within constitutional
limilations. for fair housing throughout
theUniled States and prohibits any
person from cliscriminaling in lhe sale or
rental of houaing. the financing or
housing. or the provision of brokerage
,ervicea. Including in any way making
unavsilable or denying a dwelling to
any.person. because of race. color.
religion. aex. or nalional origin. Tille
VIII further requires the Secretary to
administer the programs and activilies
relating to hOlJaing and urban
development In a manner affirmatively
to further the purposes of Tille VIll.
pursuant to thi, slatutory direction. the
Secretary requires that grantees
adminisler all programs and actiyities
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related to housing and community
devclopml?nt in 8 manner to
affinnlllively further fllir housing.
(c) Executive Order 11003.85
amended by Executi\'e Order 12259.
directs the Oepartmentto lake all ;Iction
nece85ary and appropriate 10 prevent
discrimination because of race. color.
religion (creed). sex. or niltional origin.
in the sole. leasing. renlal. or other
disposition of I'esidentiulproperty and
related facilities (including land to be
developed for residential use). or in the
use or occupancy thereof. if such
property and rela ted facilities are.
umong other things. provided in whole
or in part with the lIid of loans.
ild\'ances. grants, or cuntrihutions
lI~ree\i.to be mnde b)' the Fedenll
Government. HUO regulations
implementing Executi\'e Order l10GJ are
contained in 24 CFR Part 107.
~ 570.602 Secllon 109 01 th. Act.
(0) Section 109 of Ihe Act requires that
no person in Ihe United State, shall on
the ground of race. 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
fund, made available pursuant to the
Act. For purposes of this section
"program or acth'i1~'" is defined as any
function conducted by an identifiable
administra tive unit of the recipienl. or
by any unit of govemmel:'l. ~ubrecipient.
or privale coni.r<1ctor receiving
comrnunily development funds or loans
from the recipient. "Funded in whole or
in pari with community dev.elcpment
fund," means that community
development funds in any aml)unl in the
form of grants or proceeds from HUD .
guaranteed loans have been transferred
by the recipient or a subrecipientto an
identifiCible administrative unil and
disbursed in a program ::1' activity.
(b) Specific discriminatory octiol}s
prohibited and correctil.e actions.
(1) A recipient mal' nolo under any
program or acti\'i1y to which the
-',
regulatiuns of this Part may appl)'
directl)' or throur,h contractual or olher
lIrrangrments. on the sround of fllce.
colllr. na tio"al origin. or sex:
(il Deny all)' lrlcililie,. acr\'icl:I.
fin<1ncial Rid or other benefil. flrO\'ided
under the flrogram or activity.
(ii) I'ro\'ide an)' facilitie,. services.
financial aid or other bendits which are
differenl. or ore provided in a different
form lrom thut provided 10 others under
the program or activity.
(iii) Subjecl to segregated or separate
treatment in on}' fllcilityin. or in allY
mailer 01 process rclotc:d to receipt of
any ser\'ice or benefit under the program
or activity.
(i\') Re,u-ict in any way acceSS to. or
in Ihe enjoyment of any advantage or
prh'ilege enjoyed b)' others in
COJUlection wilh f<1cilities. aervices.
financial aid or other benefits under Ihe
progr<1m or activity.
(v) Treat an individual differently
from others in determining whether the
individual s81isfie. any admission.
enrollment. eligibility. membership. or
other requirement or condition which
the individual must meet in order to be
provided any lacilities. .ervices or olher
benefit pro\'ided under the program or
llctivi:v. .
(vj) Den)' an opportunit}' to participate
in a program or activity as an employee.
(Z) A recipient mal' not utilize criteria
or melhods oC odminisu-ation which
have lhe efCect oC subjecting individuals
10 discrimination on the basis of race.
color. national origin. or sex. or have the'
effect of deCeating or substantially
impairing accomplishment oC Ihe
oujectives oC the program or activity
with respect to individuals of a
particular race. color. national origin. or
Ie".
(3) ^ recipient. in delermining the site
or location oC housing or facilities
provided in whole or in part with funds
under Ihis part. may nol make selection,
of such site or location which ha\'e the
effect oC excluding individuals from.
denying them the benefils oc. or
subjecting them to discrimination on the
B-2
J
ground of rIlCC. cuI or. na tional oriSin, fIT
sex: or which have the purpo~e or effl:cl
of def<,a linlt or substantially impairing
the acr.umpli6hment of the objectives cf
the Act Rno of thi, seCtion.
(4Jli)In administering a prosram or
activity funded in whole or in part wilh
COllC funds reg<1rding which the .
recipient hal pre\'iously discriminuted
ogilinst persons on the ground of race.
color. notional origin or lex. the
recipient must tuke oCCinnativeaction to
overcome Ihe eCCects of prior
discrimina tion.
(ii) E\'cn in Ihe absence of 6uch prior
discriminalion. 8 recipienl in
administering a progr<1m or aclivily
funded in whole or in part with CODC
lunds should tuke affirmative action to
ovcrcome the effects of condition,
which would otherwise result in limiling
participation by persons of a particular
race. culor. nalional origin or ,ex.
Where previous discriminatory practice
or usage tends. on the ground of race.
color. national origin or lex. to exclude
individuals from participation in. to
deny them the benefits of. or to subjecl
them 10 discrimination under any
program or activity 10 which this pari.
applies. the recipieni has an obligttion
to take reasonable action to remo\'eor
overcome lhe consequences of the prior
discriminatory prllctice or usage. and to
accomplish t.he purpose of the Act.
(iii) A recipient shall not be prohibited
by this part from takins any action
eligible under Subpart C to ameliorate
an imbalance in service I or facilities
provided to any geographic area or
specific group of persons within its
jurisdiction. where .the purpose of such
action in to overcome prior
discriminatory practice or usage.
(5) Notwithstanding anything 10 the
contrary in thil aeclion. nothing
contained herein shall be construed to
prohibit an)' rli.cipient from maintaining
or constructing separate living facilities
or resl room facilities for'the diCierent .
sexes. Furthennore. selectivity on the
basis of sex ia nol prohibited when
institutional or cllstodial services can
1
) APPENDIX E
SECTION 3 CLAUSE
I
,
T'IlE FOLLOWING SECTION 3 CLAUSE SHALL l!E INCLUDED IN ALL CONTRACTS FOR WORK IN
CONNECTION WInt A SECTION 3 PROJECT:
A. The 'oJork to be performed under this contract is on a project assisted
under a program providing direct Federal financial assistance from
the Department 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. 170u. Section 3 requires that to the greatest extent
feasible opportunities for training and employment be given 10'oJer income
residents of the project area and contracts for work in connection 'oJith the
project be a'oJarded to business concerns 'oJhich are located in, or ovned in
substantial part by persons residing in the area of the project.
B. The parties to this contract 'oJill comply with the provisions of sa~d Section 3
and the regulations issued pursuant the reto by the Secretary 0 f lIousing and
Urban Development set forth in 24 CFR, and all applicable rules and orders of
the Department issued thereunder prior to the execution ot' this contract. The
parties to this contract certify and agree that they are under no contraccural
oc other disability 'oJhich 'oJould prevent them from complying 'oJith these
requirements.
C. The contractor will send to each labor organization or representative of
'oJorkers.'oJith 'oJhich he has a collective bargaining agreement or other contract
of understanding, if any, a notice advising the said labor organization of
'oJorkers' representative of his commitments under this Section 3 Clause and
shall post copies of the notice in conspicuous places available'to employees
and applicantS for employment or .training.
D. The contractor will include this Section 3 Clause in every subcontract for
work in connectiqn with the project and will, at the direction of the
applicant for or recipient of Federal financial assistance, take app ropriate
actio'n pursuant to the subcontract upon a finding that the subcontracto r is
in violation of regulations issued by the Secretary of Housing and Urban
Development, 24 CFR. The contractor will not subcontract with any subcontractor
where it has notice or knowledge that the latter has been found in violation 'of
regulations under 24 CFR, and will not let any subcontract unless the
subcontractor has first provided it with a preliminary statement of ability to
comply with the requirements of these regulations.
E. Compliance with the provisions of Section 3, the regulations set forth in 24 CFR,
and all applicab'le rules and orders of the Department issued thereunder prior to
the execution of the contract, shall be a condition of the Feder!l financial
assistance provided to the project, binding upon the applicant or recipient for
such assis tance, its successors, 'and assigns. Failure to fulfill these
requirements shali subject the applicant or recipient, its contractors and sub-
contractors, its successors, and assigns to those sanctions specified by the
grant or loan agreement or contract through which Federal assistance is provided,
and to such sanctions as are specified by 24 CFR 135.
E-l
APPENDIX F
NOTIC:: 01 _'QUlRE."!EN'T FOR .~..:TIR'iATIV'E: ACTt
TO ENSURE EQUAL EMPLOYMENT OPPORTUNITY
(EXECUTIVE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "::qual Oppor'tunity
Clause" and the "St.a.nda.rd Federal Eq\U.l E:nploytnent Oppor'tu:uty Const..r\Jc-
tion Concract 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
trade on all const--uction work in the covered area, are as follows:
A. Goals for Female Utilization, All T~ades:
A.R.V. COVERED
Goals for Women apply nationwide.
GOALS AND' T!METABLES
Timetable
Goals
(percen t)
F~om Apr. 1, 1978 un til Mar . 31, 19 7 9 . . . .
From Ap~. 1, 1979 unt:il Mar. 31, 1980....
From Apr. I, 1980 un ti 1 Mar. 31, 1981. . . .
Goals for l-'.inori tv Utilization:
3.1
5.1
6.9
B.
TAMP}\.- ST. PETZP.sBURG, FIA., AREA
Area covered: P.;llsborough, Pasco, and Pi~ellas
Counties, Fla.
Goals and Timecablesl
Trade
Goal
(percen t)
..
All. . . . . . . . . . . . . . . . . . . . . . . . . .
17.9'
lFor ~e life of the project.
These goals are applicable to all the Con~actor's const--uction work
(whe~~er or not it is Federal or federally assisted) performed in the
covered area.
The Contractor's co=pliance wi~ the Executive Order and ~~e regulations
in 41 C:R Part 60-4 shall be based on it:s ~plementation of ~~e Equal
O?port~~it:y Clause, specific affi:mative action ob1igatior~ recruired by
F-l
t..'1e specificadons let: fort.'1 in ~l erR 60-4. J (a), al '':.5 effor~s to ::-.eet
the gOAls established for the geographical area ~he e t.~e con~ac~
resulting from this solici~ation is to be performed. The ho~S of ~~nority
and fe~le emplo~nt and t:aining must be substantially ~~iform throughou~
the length of the contrac~, and in each ~ade, and the contzactor shall
CAke a good fait.~ effort to employ ~~norities and women evenly on each of
i ~ projec':.$. The transfer of lIlinori'Cy or female e.mployees or ~ainees
from Contrac~or to Contractor or from project to project for t.~e sole
purpose ~f meeting the Con~actor's goals shall be a violation of the
contract, the Execueive Order and the regulations in 41 CFR Part 60-4.
compliance with t.~e goals ~ill be measured against the total work ho~s
performed.
3. The Contractor shall provide \0'1:'1 tten noeification to the Director 0: t..~e
Office of Federal Contract Compliance programs within 10 working days of
award of any cons~ction subcontract in excesS of $10,000 at any tier
for conscruction work under the contract resulting from d.is solici~ation.
The notification shall list t.~e name, address and telephone number of the
subcontractor; e.mployer identification number; estimated dollar amount of
the subcontract; estimated starting and completion dates of the subcontractl
and the geographical area in ~hich the contract is ~o be perfo~ed.
4. As used in this Notice, and in the contract resulting from this solicitation,
the "covered area" is Pinellas Coun~, Florida.
60-4.3 (a)
EQUAL OPPORTUNITY CLAUSE
During the performance of this contract, the contractor agrees as follows:
1. The contractor ~ll not discriminate against.any e.mployee or applicant
for employment because of race, color, religion, seX, or national origin.
Tne contractor will take affi:mat~ve a~tion to ensure t.~at applicants are
employed, and that ~ployees are treated during eQplo:~ent wi~~out regard
to their race, coler, religion, sex, or national origin. Such action shall
include, cut not be limited to the following: Employment, upgrading,
demotion, or transfer; rec=ui~ent or recrui~~ent advertising; layoff or
termnatipn, rates of payor other forms of comper-sation; and selection
for craining, including apprenticeship. The cont:ac~or agrees to po$t
in conspicuous places, available' to ~ployees and applicantS for ~ploy-
ment, no~ces to be provided setting forth the provisions of this non-
discrimination clause.
2. The contractol!" will, in all solicitations or adve.rtiserlents for e.mployees
placed by or on behalf of the contractor, state ~~at all oualified
. .
applicants will receive consideration for employment without regard to .
race, color, religion, sex, or national origin.
3. The contractor will send to each labor union or representative of workers
with which he has a collective barga.inir.g agreement or other concract or
cnderstanding, a notice to be provided advising the said labor union or
workers' representatives of tne.cont:actor's co~~ents under this
$ection, and shall post copies of ~~e notice in conspicuous places avail-
ab~e to employees and applicants for employment.
F-2
, .
'\
The cont.=act.or ....illJ_.:~~?lY ....:.~'1 all provisions of EXII.. _ive Oreer 11246
of September 24, 19 5, and of t.he rules, reg\Jlations and relevant orders
of the Secretary of Labor.
5. The contractor will furnish all information and report.s required by
Executive Order 11246 of Sept~ber 24, 1965, and by rules, regulations,
and orders of ~~e Secretary of Labor, or pursuant theretD, and will permit
access tD his books, records, and accounts by L~e a~~nistering agency
and ~~e Secret.ary of Labor for purposes of investigation tD ascert.~in
compliance with such rules, regulations, and orders.
6. In the event of the contractor's non-compliance wi~'1 the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or
orders, this contract may be canceled, terminated, or suspended in whole
or in part and the contractor may be declared ineligible for further
Goverr~ent contrac~ or federally assisted constrUction contrac~ in
accordance with procedures authorized in Executive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
7. l~e cont=actcr will include ~~eportion 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
will be bineing upon each subcontractor or vendor. The contract=r will
take such action with respect to any subcontract or purchase order as
~'1e administering agency may direct as a means of enforcing such provisions,
including sanctions for non-compliance: Provided, however, That in t~e
ev.en~ a contractor becomes involved in, or is threatened with, litigation
....i th a ~ubcont=actor or veneor as a result of such direction by the
administering agency, the contractor may request the Onited States to enter
into such litigation to protect the interests of the united States.
SV.N'DARD FE:DE.':\AL EQUAL :c::HPLOYM-'C'"NT OPPORTUNITY CONSTP.UCTION COh'TRACT
SPE:C!.!'ICATIONS CEX:ECUTIVE: ORDER 11246)
1. As used in these specificaeions:
a. ~Covered a:eaft means ~~e geog=aphical area desc=ibed in ~'1e solicita-
tion fro~ which this contract =esulted.
b. "Di.recto=ft mea.%lS Directo=, O:fice of Federal Contract Complia..~ce
P=osr~s, Onited States Department of Laber, or any person to who~
the Direc~or delegates authority.
c. ftE!::ployer identification n\:%r'.berft means the Federal Social Secu:i '=Y
n~.ber used 00 ~~e ~loyer's Quarterly Federal Tax Return, O. S.
Treasuzy Depar-::ment Fe:::n 941.
d. "l".inori tyft includes:
F-3
"
(1) Black (all plrsons having origins ~n any of db~ Black
hf=ican racial groups not of Hispanic origin)~
(2) Hispanic (all persons of Mexic~, Pueruo Rican, CubAn,
Central or South American or other Spanish Culture or
origin, regarcless of =ace) I
(3) hsian and Pacific Islander (~ll persons having origins
in any of the original peoples of ~~e far East, Southeast
Asia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alaskan Native (all persons having
origins in any of ~~e original peoples of Nortl1JUnerica and
maintaining identifiable tribal affiliations ~~rough member-
ship and parti~ipation or community identification).
2. Whenever the Contractor, or any Subcontractor at any tier, subcontracts
a portion of the work involving any const.-uction trade, it shall
physically include in each subcontract in excess of SlO,OOO the provi-
$tons of 'these specifications and the Notice which con~ns ~~e ~p-
pllcable goals for minority and female participacion and which is set
forth in the solicitations from which this cont=act resulted.
3. If the Contractor is participating (pursuant to 41 CFR 60-4.5) in a
nometo~.Plan approved by ~~e a. S. Department of Labor in the covered
area either individually or through an association, its affirmative action
obligations on all ....ork in the Plan area (including goals and ti.llletables)
shall be in accordance ....ith that Plan for those trades ~hich have unions
participating in the Plan. Contractors must be able to demonstrate their
participation in and ccmpliance wi~~ the provisions of any such Hometown
Plan. Each Contractor or Subcontractor participating in an approved Plan
is individually required to comply wi t.h its obliga tions under "the E:E:O
clause, and to make a good fai~~ effort to achieve each goal uncer the
Plan in each trade in which it has employees. The overall good faith
performance by o~~er Contractors or Subcontractors toward a goal in an
approved Plan does not excuse any covered Contractor's or Subcontractor's
failure to take good faith efforts to achieve the plan goals and ti.llle-
table.
4. The Contractor shall impleMent the specific affirmative action standarcs
provided in paragraphs Ja through p of these specifications. The goals
set forth in the solici~tion from ....hich this contract resul~ed are
expressed as perc:te..ntages of the total hours of employment and training
of minori'=Y and female .uti1iza tion the Con~actor should reasona.bi.y be
able to achieve in each const--uction trade in-vhich 'it has employees in
the covered area. The Contractor is expected to make substantially
uniform progress toward its goals in each craft during the period
specified.
s. Neither the provisions of any collective bargaining agreement, nor the
failure by a ~~ion with whom ~~e Contractor has a collective bargaining
agreement, to refer either minorities or wom~ shall ep:cuse the Contrac-
tor's obligatior~ under these specifications, Executive Order 11246, or
the regulations promulgated pursuant thereto.
F-4
.6~. ...., o:c.c: :== ~-.e :--.c:.-....c=/...~::, ':=a..:..;~~r-,; :}~.~S C'. ~~r-.~..---'9- _..- --
-=.0 be coul'1t.ed in meet" ..~le goals, such apprentices .":r'" ~ain~es must
be amployed by the c=L ~ct.cr curing the training pe~i,. and the
Contractor ~ust have de a co~mitment to employ the a prentices 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 approved by the U. S. Depar~ent of Labor.
7. The Contra.::tor shall take specific affinna ti ve actions to ensure equal
employment opportunity. ~e evaluation of the Contractor's corr:pliance
....ith these si.,ecifications. shall be based upon its effort to achieve
maximum results from its actions. The Contractor shall document these
efforts fully, and shall implement affirmative action steps at least as
extensive as the follo....ing:
a. Ensure and maintain a ....orking environment free of harrassment,
intimidation, and coercion at all sites, and in all facili~es at
....hich the Contractor's employees are assigned to ....ork. The
Con tractor, ....here possible, ....ill assign two or more.....omen to each
constrUction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are aware of and carry out the Contractor's obligation to maintain
such a ....orking environment, ....ith specific attention to minority or
female individuals ....orking at such sites or in such facilities.
b. Establish and maintain a current list of minori ty and female
recruioment sources, provide ....ritten notification to minority and
female recruitment sources and to community organizations ....hen the
Contractor or i t:.s unions have employment opportunities available,
and maintain a record of ~~e organizations' response~.
c. Maintain a current file of the n~es, addresses and telephone
numbers of each minority and female off-the-street applicant and
minority or female referral from a union, a recrui~ent source or
community organization and of ....hat 'action ....as taken ....i~~ respect
to each such individual. If such individual was 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.."lis
shall be documented in the file ....ith the reason therefor, along ....ith
whatever additional actions the Contractor may have taken.
'"
d.
Provide immediate ....ritten notification to the Director ....hen the
union or unions wi~~ which 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
ot.~cr infot1nation that the union referral process has impeded .the
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 ....omen, 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 T.b above.
f. Disseminate the Contractor's EEO policy by providing notice of the
policy to unions and training programs and requesting t..~ei= coopera-
tion in assisting the Contractor in ~eeting its EEO obligations; by
including it in any policy ~~nual and collective bargaining agreement; by
F-S
I
I
publicizing it in the company newspaper, ~r~u~l repo~/ etc.; by
specific review of the policy with ~ll management personnel and
w~th dll minority and female employees dt least once a year; dnd
by posting the company EEO policy on bulletin boards accessible
to dl1 employees dt ee.ch location where const..."'"Uct.ion work is
performed.
g. Review, at least annually, the company's EEO policy and affirmative
action obligations under these specifications wi~~ all employees
having any responsibilit:y for hiring, assignment, layoff, ter::lina-
tion or o~~er employment decisions including specific review of
these i te.ms vi. tl. onsi te supervisory personnel such as Superintendents,
General Foremen, etc., prior.to ~~e initiation of constrUction work
at any jobsiee. A written record shall be made and main~ined
identifying the time and place of these meetings, persons attending,
subject n~tter discussed, and disposition of ~'e subject matter.
h. Disseminate the Contractor's EEO policy externally by including
it in any -dvertis.ing in the newS media, specifically including
minori~ and female newS media, and providing writ~en notification
to anddis.::ussinq the Contractor's 0:0 policy with other. Cont.rac-
t..qrs and Subcontractors with whom .the Contractor does or antici-
pates doing business.
i. Direc~ its recrui t::ment efforts, bo th oral and wri tten, to minori'=Y,
,female and cOl!'mlunity organizations, to schools with mj,.nority and
~emale students and to minoriey and female recrui~ent and training
organizations serving the Con~actor's recruitment area and employ-
ment needs~ Not later than one month prior to ~~e cate for the
acceptance of applicatior~ for apprenticeship or other trai~ing
by any recruitment source, the Con~actor shall send written
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 ~emale employees to recruit other
minority persons and women and, where reasonable, provide after
school, summer and vacation emolovcent to minority and f~~le youth
both on the si~e'and in other ~e~s of a Con~act.or's workforce.
,.
'k. valida-=.e all tes':S and otber selection re~irements ...here b-Je..re
is an obligation to do so ~~der.4l CFR Part 60-3.
1. Conduct, at least annually, an inventory and evaluation at least of
of all minority and female personnel for promotional opportunities
and encourage these employees to seek or to prepare for, ~~ough
appropriate ~aining, etc., such oppor~~ities
m. E~u:e that seniority practices, job classifications, work assign-
.men':S and o~~er personnel practices, do not have a discrai~atory
effect by continually monitoring all personnel and employment
related activities to ensure t:hat the EZO policy and the Cont.rac~or's
F-6
obligations undel these s?e~ifiCadons are being t... .:-ied out.
n. Ensure thAt &11 facilities and company activities are non-
segrated except that separate or single-user toilet and
necessAry chAnging facilities shAll be provided to assure
privacy between the sexes.
o. Document and caintain a record of all solicitations of of:ers
for subcontracts from minority and female const.-uction
concractors and suppliers, including circulacion of solicitations
to minori t:y and female contracwr associa tions and other businesS
associa tions .
p. Conduct a review, at least annually, of all supervisors' adherence
to and performance under the Contractor IS EEO policies and
affirmative action obligations.
8. Contractors are encouraged to participate in voluntary associations
which assist in fulfilling one or more of their affirmative action
obligations (7a through p). The efforts of a contractor association,
joint contractcr-union, contractor-communiey, or other similiU' g=oup
of which the contractt:lr is a member and pa.rticipant, l:l.Ay 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 tt:l assure that the group has
a positive impact on the employment of minorities and wocen in the
indust-'"')', ensures that the concrete benefits of the program are
reflected in the Con tractor's m.i.nori ty and female workforce partic-
ipation, makes a good faith effort to meet its individual goals and
timetables, and can provide acceSS to documentation ....hich deJl'Onst=ates
the effectiveness of actions taken on behalf of the Contractor. The
obligation to comply, however, i~ the Contracto~'s and failure of such
a group to fulfill an obligation shall not be a defense for the
Contractor's noncompliance.
9. 1\ single goal for minorities and a separa-ce single goal for ,",omen have
been established. The Contractor, however, is =equired to provide
equal emp~oyment opportunity and to take a==irmative action fo= all
minori t:y groups, both male and f~3.1e, and all women, both mino=i '::'f
and non-minority. Consequently, ~~e Contracto= may be in violation
of the =:xecuti ve Order if a particular group is employed in a substan-
tially dispa.rate manner (for example, even though the Con~actor ha.s
achieved its goals fo~ women genera~ly, the Contrac~o= may be in
violation of the Executive Order if a specific minority group 0; ....omen
is underutilized).
10_ The Contractor shall not use the goals and timetables or affirmative
action standards to discriminate against any person because of race,
color, religion, sex, or national origin.
11. The Cont=actor shall not ente= into any Subcontract wi t.."l any pe=son
or fir:n debarred from Government contIacts pursuant tt:l Executive
Ord~r 11246.
F-7
12.
13.
'!'he Conaac~or Shf.-' 'ca.rry out. such sanct.ions and I. .1 t.ies for .
violacion of chese specificatior~ a.nd of the Equa.l opport.unity Clause,
'including suspension, termination and ~ancellation of existing sub-
concrac~ as cay be imposed or ordered pursuant to Execu~ve Order
11246, as amended, a.nd its iC'lplementing regulations, by t.."le Office
of federal Contract compliance Programs. hhy Conaactor who fails
to carry out such sanctions and penalties sha.ll be in violation of
these specifications and Executive Order 11246, as amended.
The Contract.or, in fulfilling i t.s obligations under t..'1ese specifica tions ,
shall implement specific affirmative action stepS, at least as exten-
sive as those standards prescribed in paragraph 7 of t.'1ese specifica-
tions, so as to achi eve maximum resul tS from i.t3 e f! orts to ens ure
equal employment opportuni t::'f. 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 accord~ce ....it..'1
41 CFR 60-4.8.
14.
The Contractor shall designate a responsible official to C'lOnitor all
employment related activity to ensu:e that the company ::EO policy is
being carried out, to submit reports relating to the provisions hereof
as may be required by the Government and to keep records. Records
shall at least include for each employee the name, addresS, telephone
numbers, const...-..-uction t:ade, union affiliation if any, employee
identification number ....hen assigned, social security number, race,
sex, st.atus (e.g., mechanic, apprentice, trainee, helper, or laborer),
dates of changes in statuS, hou:S ....orked per ....eek in the indicated
cade, rate of pay, and locations at:. ....hich the ....ork ....as performed.
Records shall be maintained in an easily ~~derstandab1e and ret:ievable
form.; hO\Jever, to the degree that exis ting records sa tis fy this
requirement, cont:act.ors shall not be required to ~ain~ain separate
recorcs.
15.
Nothing herein provided shall be const::-ued as a limitation upon the
application of other la~s ~hich establish di:ferent s~ancards of
compliance or upon the application of requirements for ~~e hiring of
local or other area residents (e.g., those under t..'1e Public wor}:s
Employment Act of 1977 and 'the Comm~~i~y Development Elock Gr~~
program) .
..
F-8
"
I
APPENDIX G
OM!
Circ1JlarA-110
I
...
I
.J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:1
OFFICE OF MANAGEMENT AND
BUDGET
(Circular No. A-IIO)
GRANTS AND AGREEMENTS WITH INSTI.
TUTlONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
JULY I, 1976.
To the heads of executive depa.rtments
and estllblishments.
Subject: Uniform administrntive re-
quirements for grants and other agree-
mentswlth Institutions of hi;her edu-
ca.tion, hospitals, and other nonprofiL
organizations
1. Purposc.-This Circular' promul-
gates sLandards for obtaintng consisten-
cy and unJformity among Federal agen-
cies in the administration of grants to,
and other agreements with. public a.nd
private instlt.utions of higher educat.lon,
public and priva.te hospitals, and other
quasi-public and private nonprofit or-
ganizations. This Circular does not. apply
to grants, conLracts, or ot.her agreements
. bet.ween the Federal Government and
units of State or local governments
covered by Federa.l Management Cir-
cular 74-7.
2. Effective date.-The standards in
the attachments to this Circular will be
a.pplied as soon as practicable but. not
later than J.anuary 1. 1977.
3. Super.te.s.tion.-This Circular res-
cinds and replaces parts m and rv of
the Appendix to Federal Management
Circular 73-7, Administration of college
and university research grants.
4. Policy intcnt.-The uniform stand-
ards and requirements included in.t.he
at.tachments to this Circular replace the
varying and often confiictlng require-
ments tha.t have been imposed by Fed-
eral &.gencies as conditions of grants and
other agreements wit.h recipient.::.
5. Applicability and. .tcopc.-Except as
provided below, the standards promul-
gated by this Circular are applicable to
all FederaJ agencies. II any statue ex-
pressly prescribes policies Or specific re-
quirements tha.t differ from the stand-
ards prOVided herein. the provisions of
the statute shall govern.
The provisions of the at.tachments of
this Circular shall be applied to subre-
c1pients performing substantive work
under gra.nts that are passed through or
awarded by the pnma.ry recipient if such
subreclplents are organizations de-
scribed in paragraph l.
6. De,finiLion.s.
&.. The tenn "grant" means mone~' or
property provided. in lieu of money paid
0:' furnished by the Federal Government
t.o recipients under programs that pro-
vide financial assistance or that provide
suPPOrt or stimuLo.tion t.o. accomplish a
public purpose. The term "other agree-
ments" does not Include contracts which
are required to be entered into and ad-
ministered under procurement laws and
regulations. Grants and other a.gree-
ments exclude (alt.echnical a.ssistance
~;~~:~.s. ~:hjc~ provide services instead
general revenue sharing. 10:l.ns. 10M
guarantees, or insurance. and (cl direct
payments of any kind to individuals.
b. The term "recipient" includes the
following types of nonprofit orJaniz."l-
tlons that are receiving Federal funds
from a Federal a4.tency or through R
state or local government:
Public and private Inst.lt.utions of high-
er education: pUblic and private hos-
pil.:1ls: and other quasi-public and pri-
vate nonprofit organizations such as (but
not. limited to) commlUlit)' a.ction agen-
cies. research lnstlLut.cs. educational a.s-
sociaLlons. and healUl centers.
The term does not include foreign or
inLernaLlonal org;mizations (such as
agencies of the Untted Nations) and
Go\'crnmcnt-owned contractor opera Led
faciUtics or research centers providing
continued support. for mission-oriented,
large scale programs thlLt are Govern-
ment-owned or cont.rolled. or are de-,
signed as federally-funded research and
development. centers.
7. .R.cQu.c.ttsJor c:z:cCJltionS.-The Omce
of Management and Budget. ma.y grant
exceptions from the requirements of this
Circular ",'hen exceptions are not pro-
hibited under e:dst.ing laws.
However, In the Interest oC maximwn
uniformity. exceptions from the re-
Quirements of the Circular ~W be per-
mitted only in unusual cues. Agencies
may apply more restrictive requirements
to a class of recipients when appro\'ed by
the Office of Management and Budget.
S. Attach.ment.t.-The standards pro-
mulgaLed br this Circular a.re set forth
in the Attachments. which are:
^~~achmen~ ^ Cash "'depositories.
Attachment B Bonc1lng and Insurance.
Attachment C R.eten~lon and custocUal re-
qulrement.s for records.
Att&chmelU. 0 P.r~ Income.
Att&Chment E COlt shulng &nd matcblng.
Atl.achment 'F' Standards for lInanclal maD-
agement syatems.
Att&chmen~ G Financial reporting requlre-
men ts.
Attachment H Monitoring and repoTtolng
progro.m performance.
Att.aChment I Payment requirements.
At.tachment J ReviSion of ftnanclal plans.
AtT.&chmen-~ K CIOROUt. proc:edures.
Attachment L S.uspenslon and termination
procedures.
Attachment M St&r,dan1 form for applYing
for federal asslst.anee.
Attachment. N ProPerty man",ement stand-
ards.
Attachment 0 Procurement. standards.
9. E:z:ceptiol'lJi Jar certain recipiC'7Lis.-
Notwithstanding the provisiOns of para-
graph 7 if an applicant/recipient has a
history of poor pcrfonnance. is not t\-
naneia.1I)' stable, or Its management sys-
tem does not meet the sta.ndarcis pre-
scribed in the Circular. Federal agencies
may impose additional requiremcnts as
needed provided that. such applicant/
recipient is notit\ed in Wl"it.ing as t.o:
a. Why the additional standards are
being Imposed:
b. what corrective action is needed.
Copies of such not.ificat1ons shall be
sent to the Office of Management and
Budget a.nd other agencies funding that
reCipient at L~e same time the recipient
10. Rcsponsibilities.-Agencies respon-
sible for administering programs Ulat in-
voh'e grants ancl other agreements with
reciplenl.s shall issue the appropriate
regulat.lons necessary to implement. the
prOVisions of this Circular. All port.ions
of such regulations that involve record-
keeping :l.nd/or reporLing reQuiremenl.s
subjecL to the proviSions oC the Federal
Reporl.s Act and OMB Ctrcular A-40
must. be submlLted to OMD for clearance
before lJeing introduced into use. Upon
request all regulations and instruction:;
implemcnLing this Circular shall be
furnished to tIle Office of Managcment
and Budget. Agencies shall o.iso deslg-
naLe an official to serve 3.S the agcncy
representative on matters relating to the
!mplement.ation of this Circular. TIle
name and Litle of such representative
shall b.e fUl7li.';hed to the Office of Man-
:l.gement. and Budget not later Lhan Au-
~ust 30. 1976.
11. InQuirics.-PurUlcr information
concerning this Circular ma)' be obtained
b)' cont.racLing the Financial Manage-
ment Branch. Budget Review Division.
Office of Management and Budget,
Washington, D.C. 20503, t.elephone 395-
3993.
JAMI:S T. LYNN,
Director.
ATTACHME",T A.--CmcvLAI\ No. A-IIO
CAsn DD"OSn'ORIJ:S
1. This a~t.achmel\t. sets forth s~andards
governing ~he use 01 banks and other In-
stitutions as cleposltorlcs of lund.~ advanced
under grants and other agreemenloS. .
2. Except for situations described In VarA-
graphs 3. 4. anel 5. no Feeleral 'Sponsoring
&Cency shall:
a. ReqUIre physical segregation or CMh ae-
posltorles lor funds which are provided to ..
reCI pleDlt.
I). Establish any eligibility rcqulr.ements
(or casb depositories lor funds ,,'hlch are pro-
Vided to a reclplcnt. '.
3. Jo. separal.e bank ar.count shall be requlre
when applicable letter-ol-creell ~ agree men ts
provide that drawdown.~ will I)e meae "'hen
~he reclplent's checks lU'e presented to t.he
bank for payment.
t. Any 1D0neys advanced to a reCIpient
which are subJe~1 to t.ht contrN" or r~gula-
'.Ion (II the United Statc5 or any ot Its omcers.
rgents or employecs' (publiC moneys as de-
lIned In Treasury ClrcullU' No. 1.76, as
UTIended) mU5t be deposited In a ban'k w'th
Federal Oepoal~ Insurance Corporation
(FDIC) Insurance coverage and the halan<<
exceeding the FDIC c0ger.age must. be col.
laterally secureel.
5. Consistent with the na~lonal goal of
expanding the opport\lnltles lor Inlnorltl'
business enterpriSes. reCipients and l'\Ib-
recipients shall be encouraged 'to use mInor-
Ity bankS (a bank which Is owned at least 50
percent by minority group member~).
ATTACHME",T B.--CmCtlLAR No. A-II 0
110",0''''0 ""'0 INS\71l"",CI:
:. Tbls a~tach,"ent sets lorth bonding and
Insurance requlremenloS lor grant.s and other
agTccments ..1t.b recipients. No other bond.
Ing and Insurance requlremen':..s shall be Im-
posed other t.hao those normalll' requlreel I)y
the reCipient.
2. Except as otherwIse requIred b~' 1a.... a
grant or ot.her alrreelDent that requIres the
contracting (or subcontro.ctlng) lor con-
~truC'tlon or facility Improvemenls shBII pro-
I
Office of Management and Budget Circular A-110 (7/30/76)
qUlrement& reltoUDg to bid gu&rant.eell, per-
torm&Dce bonda. and payment bonda unleee
tbe conatrucuon contract or subContract elt-
eeec1a Uoo,OOO. For those corvtrRCI.a or sub-
contracl.a eseeedlng 1100,000, the Federal
agency may accept the bondlDg polley and
requlrementa ot the grantee pro"lded the
Federal agenc)' haa made' a deLermlnatlon
tbat the oovernment's Interest t. adequately
protected. It auch a determlnaLlon baa not
been made, tbemlnlmum requlremenla shall
be aa tollowa:
a. A ""' VUGl'A~tee Irom eo.ch bldd.er equ/v-
d.lent to JIve percent of the b~ prtce.-
Tbe "bid gURrllrlltee" .6hllll const.t 01 A nrm
eommJtment such as a bid bond. certUled
cbeck. or other negotiAble Inatrument ae-
compAnying a bid &a ll&lIUrllnce that tbe bid-
der will. upon Acceptance 01 hLll bid. esecute
such contractual documenl.a Il.& may be re-
quired within tbe um;, speelried.
b. A per/orTn4n.ec bond on the pArt of the
conlro.ctor lor ~OO percent of the contro.ct
F'ic:e.-A "performance bond" la one executed
In connection wltb A contract to secure tul-
ftllment ot all the contractor'a obllgAtlona
UDder aucb contrl'Ct.
c. A pAJlment bon4 on tILe pArt 01 tILe con-
tro.ctor lor 100 perccnt of IlLe contro.ct
11f'1l:c.-A "pay-ment bond" la one executed In
connection w1tb a contrAct to asaure pey-
ment sa required by IA'\II" ot aU penlOO8 aup-
plying labor And materl..lln tbe execution of
tbe work provided tor 10 tbe contrllct.
3. Where tbe Pedenl Ooverument gu..r..n-
tees or I_urea tn\. rep..yment of money
borrowed by the recipient. the Pederal
agency, at ItlI dlaCreUon. may require ade-
quate bonc11ng &.Dd lDaurADCe If tbe bondlDg
and ul.llur..nce requll'emenl.a of tbe recipient
a.re not deemed l4eqU"t.e to protect the 10-
t.ereat ot tbe Pederal OO"eroment.
,. Tbe 1"ed.er..1 spozuorlng acency may re-
quire adequate ~dellty bond coverace wbere
Ule recipient 12.. no coverage &.Dd the bond t.
needed Ita protect the OovemIDent'a Interest..
6. Where bonda a.re required In tbe sltua-
tlona deecrtbed ..bova. the bonclll shall be ob-
talDed Iromcomp&.DICIS holding cel"tl~catee ot
authority &a acceptable suretles (31 Cl"R
223).
ATTACKJoaNT C,~J:aCULA& No, A-ll0
anBNnON ANlI cueTOOLUo u:Q~W:ZHTa J"OIl
al:COIUlS
1. Tbt. Atta..cbment aet.a 10rth recordret.en-
tlon req\11rementll 101' gr&Dta a.nd other ~ee-
menta with reclplenta. Fl'c1eral sponaor1Dj;
ag.n.eles sb&.11 not Impose Any recon:1 reun-
tlon requ1rementa upon reC1plenta other than
thoae dellCTlbed below,
2. ZX~eR! tor pa.ragn.ph 1. tht. ..tta..chment
rJeo applies to subrec.lplents loll referred to
In pa.rag2'aph 6 of tbe bulc c1n:uIAr.
3. P'lD&Dcl&.1 recorda, supportlDg documents.
atatlatlc&.1 recorda. a.nd all other recorda perti-
nent. to an a!>"ement shall be retained tor a
period ot three yeans. w1th the 10U0W1~
qu&1l~catIOO8 :
L 11 any IItlratlon. clalm or audit Ia st.a.rted
betore the e:r:;l1l'&tlon ot the 3-year period the
recorclll sh&.11 be retAlDl'c1 unUI all IItlpUona
CiAl.ma. or audit Z1nc11np IDvol'l'lDg tbe.recor~
have been resolved.
b. Recon:1a tor nonespendAble property s.c-
~Ulred WIU'I. PederlLl lunclll sh&11 be retalneG.
or 3 yea.n ..Her Ita an&.1 c1t.poeltlon.
c. When rN'4n:1a ue tnLzI.IItel'Ted to or m&1n
talned by th e....eeI I -
3 .. era spoceonnj; agency the
b?llV retention requ1ralnCnt Ia not appilea-
e to tbe recipIent.
~. Tbe Tat.entlon period at.a..'"ta lrom the
~I.e of Ule subm1aalon 01 the anaJ UpllZlC1l-
un report or, tor gn,nta &.Dd other ____
menta that ue re ~._-
date t newed. Annu&1ly, frolD th.
.. 0 the aubmLllalon 01 Ule lLADu&1
.lJ:l~clal .Utw< report.
S. ReCipient organlmtlOO8 should be au-
tborlzed by the Fede",1 sponsoring &Cencr,
It Uley eo desire, to aubsUtut.e mlcrolUID
copIes In lieu of onrln&lrecord.s.
e, Tbe Peder&1 sponaorlDi &(Iency aball re-
queat trall.lller 01 certa.ln recorda to Ita C\l8-
tocI)' trom recipient orga.nlzatloll.ll wben It
detennJnes that t.he recorclll poM_ long-
tenn retentlon v..lue. Hewe"er, In order \.0
a"old duplicate record-keeping. A Pederal
sponaorlng acency may mue arr..ngemenca
wttb recelplent orgAnlZatlOO8 to reWn any
recorda thAt are continuously needed lor
Joint u.se.
7. The head of the FederAl aponsorlng Agen-
cy and the Comptroller Oeneral ot the United
States. or any of their duly Authorized repre-
sentatIves. shall hA'" accee.a to any pertinent
boOb. documenta. paperl, &.Dd recorda 01 the
recipient org..nlZAtlon &Dd theIr subre-
clplenl.!l \.0 maXe audita, UAmlDAUOns, ex-
cerpta ,,"d trll.Dscrlpta.
8, Unleaa otherwl8e required by lAW, DO
FederAl aponaorlng agency ...'1&11 place re-
atrlct.lo08 on recipient organ1ZatloDll tb..t will
limit public DoCC_ to .Ule re<:on:1a at recipient
organ1z&Uons tbat Are pertinent to A gT&.Dt
or agreement. exce~ wben the ageDCY can
demonatrate tbat such recorda mu.at be kept
conJ1dentl&1 aDd would h.... been excepted
trom dt.cloeure punnant to.the l"reedom of
InlorlDAtlon Act {5 U.5.C. 562) It the recon:1a
ha4 belonged to the Pedera.l eponaor1ng
lI.geney.
A't'l'ACHWEJfT D,~J:acuLA& No. A-110
P'&ocaAW I~COJoU
1. Federal eponaorlDg acendoe sh&.11 apply
the stand..n:1a aet 10rth In thla anachmeDt 10
requiring recipient orplUza.tlona to _unt
tor progrllolll. Income related to pro,ecta
t1DADced In wbole or 10 p&l"t Wltb Federal
tUDcllI. ProgTam Income repr_enca groea In-
come earned by the recipient trom the fed-
eraUy suppor\ed activities, Such IIUnlDp ax-
clude Interest earned on ad"&Dces &.Dd may
Include. but wUl DOt be lI,aUted to. Income
lrom service teClS, s&1e oC COlnD'lodJtl_, u.&a<<e
or rent&! t_. and roya.ltlell on pAt.en.ta &I1d
coprlgbta.
2. Interest euned on aCV&.Dcee ot :P'edera.l
fUDcllI sh&.11 be remltt.od to the Federal Aieney
e:r:cept. tor lDt.enst earned on a4n.nces 'to
Sta_ or 1n..tr'WDeD.t&lltles at . State u p~
"lded tly the IDtergO..nunental Coopera.tlon
Ac\ at 1988 (Publlc LAw g()...67'T).
3. Proc:eeda trom tDe a&1e ot ~ ~d per-
sonal prvperty e1tber provided by the Ped-
eral. OOvenlment or purchued III wbole or In
put With Peder&1 tunc1a. sb&.11 be D&Ddlee1 III
accol"l1&11ee wtth Atta..chment I' to Ult. cir-
cular pertalDlDg to property m&DACe&:Dent
ol. OZlleu U1e "fl'_ent proVld_ other-
wt.e. recipients 8ball ba"e no obl~atlon to
the l"ederrJ Government WIth rClS~ to
royalUCIS rocel...ed.. .. l'eIIult ot copyrlght.a or
pat.eDtlI proc1ucecl under the gT&.Dt or other
acreemen t (... para.gn.pb B. A tta..cbmen t N).
5, AJI other prorram Income earned dW"1~
the project penoc1 aball be reta.1Ded by the
rec1plenL ..cc1, 10 accord..:1Ce with the gn.nt
or other ~eement. sha.lJ be:
.... Added to tunda COm.m1tted to the proJ-
ect by the Pederal sponllOrlDg aceney &Dd
rec1plent o~an1z&tlon a.nd be uaec1 to furtber
eUg1ble Pl'OCTam ObJectiVes:
b. O.ed to ananee the non-Federal abare
at Ule prvJect wtIen approved by the Federal.
epoDllOn~ aceney: or
e. Deducted lrom the total pro,ect COlIta
~determlDlng the net ooeta on wblc:b the
eral sha.re ot COlItlI wUI be baaed.
ATTACBMDrT l:.~Dlc:'ll'LAa 1'0. A-IIO
c:08T eKA&DfC AHD WAT'CHD<O
1. Tbt. att.a.ehment acU forth crlt.eMa &oDd
P~ur... for tbe allo'lnlobUltt o~ <'.JU'.h ...,<1
I
A-110:2
In-kind contributions made by reclplenta or
subreclplenl4 (&.S reCerred \.0 In p&rAgraph 5
01 the bulC clrcul&r) , or tblrd pArties In aAt-
I.s!ylng coat sharing and mat.chlng require-
menl.a ot PederAI spoDllOrlllg ageDclea. Tbls
attAchment at.o estAbll&h.. crlurla tor the
evaluation of In-kind coDtrlbutloIUI made by
tblrd paru... Iond supplementa Ule gUidAnce
act forth In Federal Man..gement Circular
73-3 ....Illh respect to cost SDArlng on leder-
ally-sponsored reeeArch.
2. The lollowlng de~nltlons apply lor the
purpose of thla Attacbment:
a. Pro/eel cost,.-Pro,ect cost.a are All al-
lowable costa I a.s set lortb In the applicable
rederal COllt prinCiples) Incurred by Po recipi-
ent And tbe "Alue ot the In-lUnc1 contrlbu-
tlol1ll made by Ule recipient or third parties
In accomplt.hlng the.ob,ectl"es ot tbe grllnt
or other agreement during tbe pro,ect or pro-
g"m period.
b. Cost ,/I.4,./n" 4nd m4tch/n".-ln ganerlll,
cost ab&rlng And matching represelH thAt
portion ot pro,ect or program cos~ not borne
by the FeCi.".1 Oovemment.
c. C/J.SIL contrlbuU01L.l.~aab contrtbutlona
represent the recipient'. cub outlar. !.Dclud-
Ing the outlay 01 money contrlbul.ed to the
recipient by non-Federal third pa.rtIClS.
d. In-kind co'Urlbutloft.s.-lD-klnd contri-
butions represent tbe VAlue ot nonca.ab oon-
trlbutlOO8 provided by Ule recIpient e.nd
non-Pederal tb1n:1 pa.rtlea. On.ir wben au-
llborlzecl Ilr 1"ed.el'&l legt.latlon. IDAY property
purchased wltb Federal tunda be conald.e1'ed
... Ule reCipient'. In-kJnd contrlbut10ns. In-
k!.Dd contrtbutlona mAr be 10 tha torm ot
Cha.rges lor re&1 property &.Dd non-upanc1-
able persOnAl property, and the value ot
good.s ADd aen'lcea dl:r'ectly benea\lDg And
apeclAcally IdentlAable to the project or
progTam.
3. General guldeUnell tor computing coat
sh......lng or mAtching a.re ... 10Uo....:
a. Cost shulDg or m&t.clUng IDAY cona1et.
01: .
(1) C21..rgea lDcul'Ted by the J'1OC1plent u
pro,ect COStlI. (Not a.lJ charges require ca&b
outla~ by the recipient dW'l.Dg 1lhe pro,ect
perIod: e%AlDpl.. .,.. depreclaUoD &.Dd UlIe
cbarges for buUd1D.p &.Dd eq\11pmeDt.)
(2 ) P'ro ,ect coeta ~na.nced "" tb c:aab con-
tTlbuted or donated to the recipient. by other
DOn-:P'ederal. pUbUCaceDC!e& and lDatltutlnD.II.
anel prl....te orpnlzatlon.a &.Dd lDdlTlduW,
..nd
(3) Project coetl represented by senlcea
and rea.1 &.Dd .penon.l properC]', or uae then-
ot, donated bf other DOn-Pedenl public
acenCi.. &.Dd lDatltutlon.a. &Dd pr1A'Ate Ol"g'a-
nlza tlOO8 ..cd Indl \'14 ua.l.l. ...
b. AJI oontrlbutlon.. both c:aab ..cd 'in-
kine. 8Aa1l be accep\ed u put at the reelpl-
ent'a cost shariDg and matcblDg when auch
contrJbutloDll meet all or tb'e folloWUlg
crtterla :
(1) An .verUl.able trom the reetplent'.
recol'C1.s;
(2) An not InclUded u COIltrlbuUona tor
any otbar lederally-uat.ted pr~=:
(3) An neceaaary and r_nable for prop-
el' and emetent a.coompUahment 01 proJeeT.
ob ,ectl"..:
{4) An types 01 cburn that ..o\11d be al-
lowable uader tba 69pllcable ooet prlDClples:
(6) An not paid by the l"ederal OOve.."D-
ment under another a.al.:..&nco Af"lllZDent
(unless tbe a.greement t. aU'thorlu:<1 by Ped-
erAI Ia.. to be uaed tor cost ah.a.rlDg or m&tch-
Ing);
(e) An provided tin' In the Approvl'c1 budg-
et ..ben reqUired by the Pederal agency: &Dc1
(7) CoDJorm to other pro"1a1008 ot tht.
atlACbment.
4.. Valu.. lor recipient lD-klDd contrlbu-
t10IUI wUl be established In .ccord&r1Cll With
the Applicable cost r,l'!Dclples. .
5. S~lAc procoduI"M lor the reelplenta In
~!.I\~ll..hlnc- th.. t"r.J,,~ nf In-t''!,.,,t'! N""'~t.~H,,,~
I
Office of Management and Budget Circular A-110 (7/30/76)
tlons trom non -Federnl third parties arc ~et
torth below:
a. Valllation 01 ,'olllntcer ..('r,';ccs.-\'olun-
teer servl('es may be turl1ll;hed by I'rotesSI0I1:11
and technlcnl personncl, consultants. and
oth"r skilled nnd \IIl1;kl1led labor. Volunteer
servIces may be counted nil cost l;hnrlnl; or
matchlne It the seT\'lce Il; nn- Integrnl and
necessary pnrt of .an nppro\'ed prt'lJ;rnm.
(I) Rate'.' lor "oluntcer serviccs.-RnLeIl tor
voluntecrs IIhould be conlllstent with t.I1t'l"C
paid tor similar work In the recipIent's
orGnnl:r."\tlon, In thOl;C Instnnces In "'hlch the
required ~kllls nre not lnund In the reciplcnt
orGnllI7.ntlOn, rntes should be couslslent with
thos.. pnld tor sllllllnr work In the lnuor mnr-
ket In which the recipIent competcs tor the
kind of l;er\'lces In"olved.
(2) Volllntcers <:,"ployed by olltcr org."'I-
~atio'u.-When nn emplo)'er other than the
recipient furnishes the services of an em-
ployee. these services shnll pc vnlued at the
employee's reeular rnte of pa}' (exclusive of
trlnee benefits and overhend costs) provIded
these lIervlces are In the same skill {or which
the employee Is normnlly pnld.
b. VaLuation 01 donated, c:rpendable per-
sonaL propcrty.-Donated. expendable per-
sonRI propert}. Includes such Items as ex-
pendable eqUipment. office supplies. laborR-
tor)' . supplies or workshop and classroom
supplies. Value assessed to expendable pcr-
sonal property Included In the cost or match-
Inc' share should be rea&onable and should
not exceed the market vRlue of the property
at the time o{ the donation.
c. VaLUAtion 01 donAted, nonc:pcnd4111c
Jlef'sonAI propcrty. buildings. and laM or
U$e thereol.
(1) The method used for charglne cost
sharing or matching for donat.ed nonex-
pendable personal propert.y. bulldlnes and
land may dUfer accordlne to the purpose of
the gran!: or other l\greement as follows:
(a) It the purpose o{ the gran!: or other
agreement Is to assISt the recipient. In the
acquisition of equipment. buildings or land.
the totRl value of the donated proper\)' mal'
be claimed as cost sharing or matching.
(b) If the purpose of the aereement Is to
support activities t.hat require the use of
equipment.. buildings or land. depreclatlon
or use charees for equipment and buildings
may be made. The full value of equloment or
other capital assets ..nd fRlr renUI chlU'ges
(or land ma}' be allowed provIded that. the
Federal. aeency has approved t.he charges.
(2) The value of donated property wlll be
determIned In accordance ,,'Ith the usual
accounl:1nepollcles of the reCipient with the
(ollowlne qualll\catlons:
(a) Land and buildin9s.-The value of
donat.ed land and buildings mny not. exceed
Its fair market value. at. the time oC donation
to the recipient RS esta.bllsheC br an Inde-
pendent appraiser I e.g.. cert.lfted real prop-
ert1' appraiser or GSA repre!entatlves) Rnd
certIfied by a responsible official of the
recipient.
(b) Nonc:rpand.ablc pcrson.al pro-perty.-
The value of donated noncxpendable personnl
property shall not exceed the (aIr market
value of equipment nnd propert.y of the same
age and condition at the time of donation.
(C) Use 01 spa.ce.-The value of donated
space shall not exceed the fair renlo"\1 ,'all:e
of compRrnble space 11.<; established by on
Independent apprnlsal of eompnnble space
and (acllltles In n prh.ntely-owned buildIng
In the same 10C."\lIt).:.
(d) Loaned cquipmcnt.-The \'nlue ot
loa.ned cqulpment shall not exceed Its (air
rent.ll.l \'alue.
6. The followlnl: requirements pctt."\ln to
the reclplent's supportlne reeor-ds (or In-
kind contrlbullons frorn non-F'cdrrnl thIrd
!1:!;t.l':'~
a. Volunlrer st'rvlt"l!1I mllst be dncum<ml...d
nnd. to tile extent f..""ihle, supported by t.he
same mcthods used by the recipient tor Its
employees.
b. The basis for determining the valuallon
tor personnl sen'lces. material. eqUipment.
bull dInes Rnd Innd must be documented.
ATTAcuMeNT F.--ClRcul.Aa No. A-IIO
STANDARDS F'OR F'tNANCIAI. MANAGEMENT
SYSTEMS
l. TIlls attachment prescribes standards tor
Onl\nelRI mnnaeement systems of recipients.
F'e<lernl ~pOl\l;Orll\g ngentle!< shall not Impose
n<ldltlonal standar<ls on recll'ienL. IInles.<; spe-
cIOcl1l1)' prOVIded for In the nppllcable sta-
tutes (e.G.. the Joint Pundlng SImplification
ACt., P.L. 93-510) or other attachments to this
cIrcular. However. Federal sponsoring "Gen-
cles are cncouraGed to make sug~est.lons and
n.'ISlst recipients In est.uallshlnG or Improving
Onanclal m"nlLeement systems when such u-
slstancl" Is needed or requested.
2. Reclplent.<;' /lnanclal manaeement s1's-
tems shall provide for:
a. Accurate. current. and complete dlS<:lo-
sure o{ the /lnanc1al results of ench tedcrally
sponllored project or prollram In Rccordance
with the reporting requirements set Corth In
Att.ll.cl)ment G to this clrcula.r. When a Fed-
eral sponsoring aeency requires reporting on
an Rccrual basis. the recipient sh,,1I not be
required to establish an accrual accountlns
s~'stem but shall develop such accrual data
for Its reports on the bllsls of an analysiS oC
the documentation on hand.
b. Records that Identlly adequately thc
source and Rppllcatlon of tunds Cor tedernll}"
sponsored activities. These records shall con-
tain Information pertaining to PederRl
awards. authorlzatlona. obligations. unobli-
gated balances, assets. outlays. and Income.
e. ElIectlve control over and ILCcount.ablllty
for 6011 funds. property a.nd other assets. Re-
clplenta shall adequatel)' safe~ard all sucllo'
RSSets and shall assure that they are used
solely (or authorized purposes.
d. CompRr15on oC actual outlays with bud-
get amounts (or each grant or other agree-
ment. Whenever appropriate or required by
tho Federal sponsoring agency, l\nanclal In-
(ormation should be related to performance
and unit. cost data.
e. Procedures to minimize the time elapsing
bct.V,'een the transfer of (unds from the US.
Trea.sury "nd the disbursement by the recip-
Ient. whenever funds are advanced by the
I"ederllol Government.. When adv60nces are
mncle by a letter-of-credit method, the recip-
Ient shall make drawdowns a.. close a.s pos-
sible to the time of making dlsbursemcnts.
f. Procedures Cor determining the reason-
ableness, allow..blllt~' and allocability ot costs
In accordance with the provISions of the Rp-
pliable Federal cost pl1nClplell and the terms
ot the grant or other agreemenL
e. Accounting records that are support.ed
b1' source documentat.lon.
h.Examlnatlons In the form of lloudlts or
Internal audits. Such audits shall be made
by quallfted Indh'lduals who are sufficlentl~.
Indel"endent ot those who authorize the cx-
pendlture of Fedel'llol funds, to produce un-
biased opinions. conclu510ns or Judgments.
The)' shnll meet the Independcnce criterIa
Rlone the lines of Chapter 3. Part 3 o( the
U.S. Gencral Accountlne omce publication.
St."\ndard<; for Audit of Government:ll Organ-
"'."\tions. Prol;rnms. AcU\'It.lcs and Punctlons.
TIles'! exnminatlons Rre Intendcd t.o a.."ICer"
taln the ctJecUveness or the financial mnn-
agemcnt sl'stems and Internnl procedures'
that hnvc been cst,"\bILo;hcd to meet the terms
and ecmdltlons or the ngreemell"'. It Il; not
Intcnded that elloch a!;rccment Il\\"nrded to the
recipIent be exnmlned. Generally, cxamlna-
tlon" should be eondUCled on :Ln orr,nnl:o.n-
~1nn-'.,,:tl,.. ~nc;!~ tn t~o::t t~". f!r:(":,\1 Intl"f"'':'''!t\' or
I
A-110:3
flllanrlnl t.ran"nctlnn". M ""cll as enmpllance
with the term" and condItIon" of the Feder,,1
grants and other a!:rectllents. Such tcsts
would include an appropriate sampling oC
Ft'deral Rl!'reements. Examlnatlonl; ,,'111 be
conducted wIth reRsonable frequency, on a
conllnulns bl\sls or at scheduled Inten'als.
u5uall)' nnnuRlly, but not le!UI treQuentl~' thnn
ever)' t\4'O years. Tile frequency of these ex-
nmlnatlon" shall drpend upon the nature.
l;1:r.e and t.he complcxlty of the nct\'Uty, TI\e"e
exnmlnntlon" do not rellc\'e P'cderal a!;encleS
of their audit responsibilitIes, but mAY R!Tect
the treQuent")' and scope of such "udlts.
\. ^ s\'stematlc mcthod to assure tlrnel\' nnd
approp~lnte resolutIon o( "udlt Ondln!;; and
recommendations.
3. Primary recipients shall requIre subre-
clplents (IL$ defined In paraGraph 5 at the
URslc circular) to l\dopt the standards In
paragraph 2, Rbove except (or the require-
ment In subparRgrRph 2e. reeardlng the us~
o( the letter-o(-credlt mcthod nnd that part
o( .s.ubpRrasraph 2a. reGardinG reportIng
forms and frequencies prescribed In Attach-
men', G to thIS circular.
An'ACHMENT G,-CIRCUI.Aa No, A-IIO
rtNANCUI. RC'OIl.TDf'C IlEQUlaEMEtfTS
1. This atlAchment prescribes uniform re-
portlne procedures (or recIpients to: sum-
marize expenditures mad.e Rnd l"ederRI funds
unexpended (or each nward, report the slAtus
of Federal ca.<;h a.dvanced. requcst ad\-ances
and reimbursement ""hen the lett.er-oC-credlt.
method IS not used; and promulgates stand-
Rrt! forms Incident thereto.
2. The follo....lng definitIons Rpply (or pur-
poses ot this a.ttAchment:
a. Accrucd c:::panditures.-Accrued ex-
penditures are the charges Incurred by the
recipient during a elven period requiring the
provISion of Cunds for: (I) goods I\nd other
tangible property received; (2) services per-
tormed by employees. contractors. subreclpl-
ents. and otner payees. and (3) other
amounts becoming owed under prog-rams for
,,'hlch no current scrvlces or performance 15
required.
b. Acerucd i=O'1\c.-Accrued Income IS the
sum ot (I) earnings durlne a elTen period
Irom (I) serTlces ..performed by the recipi-
ent: and (II) gooc1s and other ta.nglble
propeny delivered to purchasers; and (2)
amounts becomIng owed to the recipient tor
wh~h no current services or performance !S
required by the recipient.
c. Fedcral lu1>d.s authorized.-Fecleral
funds authorized ar, the tDtAl amount of
Federal tunds obllga.ted by tll~ Federal Goy-
ernment tor un by the reCipient.. Th15
amount ma~' Include an)' authorl~ed carry-
o"er o! unobligated funds trom prior l\scal
l'enTS when permitted by 11101&' or agency
regulation.
d. In-Icind contributiort.l.-In-klnd con-
tributions are defined In At.tachment E to
thl!: circular.
e. Ollli9atiOrt.l.-Obllgatlons are the
amounts of orders placed. contracta and
g-rants 1l\4'nrded. services received. and simI-
lar transactions during a elven period thl\t
will require payment. by the recipient during
the same or " future period.
C. OutlaJls.-Outln~'ll or expenditures repre-
sent charges made to the project or progrRm.
They mar be reponed on l\ cRsh or accrual
basis. For reports prepared on a cash buls.
Dut.lnrs a.re the sum of actuRl cash disburse-
ment.' (or dIrect charees (or eOOdS and sen'-
Ices. the "mount of Indirect expense chArged.
the ""Iue of in-kind contrlbuilonll applied,
and the amount of cuh ..dvances Rnd PRY-
mcnt.. mnde In subreclpients. For report.~ pre-
pared on nn RccruAI bnsls, outIR~'S are the
sum o( "ctunl cash disbursements (or dIrect
ch"rl!e~ for ~nocls :lnd ~er\'ICcs. the nmount
("If In(!l!'"(''!*~ ry!""n~(' tn~uTr"cL t~1.C '..nlut" or In-
I
Office of Management and Budget Circular A-110 (7/30/76)
kind contributions applied. and the net 10.-
cre..,e .(or decrease) In Lhe ILmounU owed by
the recipient tor goods and other property
received, lor services performed b)' empIO)'-
ees, contractors, subreclplenLa and other
payees and other amounts becoming owed
under programs for which no current serv-
Icee or pertormance are required,
g. Pro9'ram In.come.-Progra.m Income Is
delllled In Attachment D at thlll circular. It
may be repOrted on a. cuh or a.ccrual bula,
whichever Ls used tor reporting OUUIL)'S.
h. Un.obUvated balance.-The unobligated
ba.lance Is the portion at the rund3 author-
Ized by the FeelerILI sporuorlng agency that
hloS not been obligated by the recipient anel Ls
determined by deducting the eumula.tlve
obllgatlONl trom tbe cumula.tlve rund3 au-
thorized.
I. Unliquidated obUVatlo.....-l"or reporUl
prepared on a c..,h' bl\.Sls. unliquidated 0'011-
~atlONl represent the''amount at obllgatlona
Ineurred by the. recipient that ha.a not been
paid. For reporte prepared on a.n a.ccrued u-
pendlture buLs. they represent the amount
ot Obllpt.lons Incurred by the recipient. lor
whlch an out.lay hu not been recorc1ed.
3. Only th.e tollowlng torms w111 be au-
thorized tor obtaining ftna.ncla.1 Intormatlon
tram reclplenl.a.
a. Financial Statu.s Report (E=1l.lblt 1), .
(1) Ea.ch Federal sponsoring a.gency shall
require reclplenl.a to u.se the etanda.rdlzed
1"lna.nclal StatuS Report to report the status
or tund3. tor a.1I noncoNltructlon projects or
programs. The Feden.l sponsoring agencies'
may, lSowever, have the opt.lon at not re-
qulrtng the nna.nelal Status Report when
the Request tor A.dva.nce or RelmbW'Nlment
(pa.racnph4al or Report. 01 l"eden.1 Cub
Transactlona (paragraph 3b) Ls determined
to provide adequate Inlormatlon to meet
their needs. except that a tlnal nllanclal
Status Report shall be required at the com-
pletlol\ or the project when the Request tor
Advance or Reimbursement form Ia used only
lor advances.
(2) The Federal spollaorlng agencr sha.lI
prescribe wbether the report shall be on a
cub or accrua.l 'aula. It the Federal sponsor-
Ing agency requires accrual Inlormatlon and
tbe reclplent'lI a.ccountlng recon:ls a.re not.
normally kept on the a.ccrual bula, tbe re-
Cipient shall not be required to convert. Its
accountlng syst.em, but shall develop SUCh
accrua.l Intormatlon t.hrou!;h best estimates
based on a.n analysIS or the cocumentatlon
on hanel.
(3) The Federal sponsorln!; agency shall
determine the trequency. ot the nnanclal
Status Report tor each project or prorra.m
considering the size and complexlt). at the
particular project or program. Howe"er. the
report shall not be required more rrequen.tly
tha.n quarterl)' or I~ trequently than an-
nuallr except. as provided In subparagraph
3a( I) above; A nnal report shall be required
at the completion 01 the agreement.
(4) Federal eponsorlng&gencle.s shall re-
quire reClplent3 to submit the 1"lnanclal
Status Report lorlglnal and no more than
~wo ctlples) no IIL~er thnn 30 dnys ..aer ~he
end at each speclned repor~lng period for
q\iar~erly and semi-annual reporu. ..nd 90
lI..rs for annuILI and tlnal reports. Ext.enslons
to reporting due elates mar be gran~ed upon
request ot the recipient.
b. Report of Fedcrl11 CG,.fh Trl1nsactioJ\6
(Ezhibit Z).
(I) Wllen tunds are advanced to
reclplenl.a through letters at credit. or wIth
Trea.sury checks, the Federal sponsoring
allencles shall require each reclplenL to "ub-
mlt a Report 0: Federal Cash TranAA-Ctlons.
The Federal sponsoring l\sency II'l..1I u"e ~hlS
report to monitor cash advanced \.() reclplenU
,,"d \.() .obtaln disbursement .Informatlon tor
u.ch agreement rrom Lhe recipients.
(2) Federal sponsoring agencies m..y re-
quire toreca.su of Peeleral cuh requlremenLs
In the "Rema.rks" "ectlon of the report.
(3) When practical and deemed necessar)',
the Feeleral sponsoring agencIes may require
receipts to report In t.he "Remarks" ~ectlon
the l\mount of CAsh advances In excess at
three days' requlremen~s In the hands ol sub-
reclplenta and to provide short na.rratlve ex-
planations at actions taken 'or the recipients
to reduce the exceSI balances.
(4) Recipients shall be required to submit
not more than the Orl!;lJ1al and two copies at
the Report at Peder&! Cuh Transactlona 15
working da)'s loll owing the end ot each
quuter. The Pederal spon.~orlng agencies
may require :l. monthly repor". from those
reel pienta receiVIng ..dvanen totaling 11
mUllon or more per year.
(5) Federal sponsoring agencIes ma.r waive
t.he requirement tor submllslon ot the Report
or Federal Caah Transactlons when monthly
advanca do no~ exceed s10,OOO per recipient,
provided tha.t such advance.s are monitored
through other torms contained In.Jhls "t-
uchment, or It, In ttae Federal sponsoring
I1geney's opinion, the reelplent's ~ccountlng
controls "re adequate to minimIZe excessive
Feder:tol advances. .
4. Except as noted below. only the tollow-
!ng forms will be authorized tor the reclpl-
en:.J In requesting advances and reLmburae-
ments.
e. Reque.st Jor Aclvan.ce or Reimbunemc7lt
(Ezhiblt J).
(1) Each l"ederal spon:orlng agency shall
adopt the Request lor Advance or Reimburse-
ment as a stand&M1lzed torm tor all noncon-
:tructlon programs when letters-ol-credlt or
predetermined advance methods are not used.
Federa.l sponsoring agencies, however, have
the option ot using this torm for construc-
tion progranu In lieu ot the Outlay Report
and Re:;uest. tor Reimbursement ror Con-
struction Programs (subpa.re.craph 4'0).
(2) ReClplent3 shall be authorized to sub-
mit requa.La lor a.elvancell and reimburse-
ments at least mont.hly when letters-of-
credit a.re not used. Federa: sponsoring
:togencles shall not require the submlulon 01
more than the original a.nd t.wo caples ot the
Request tor Adv&nce or Reimbursement.
I
A-110:4
b. Outll1Y rcport and rcquest Jor re. m-
burumcnt far construction pro.vrl1ms (E:r-
lLibil 4).
(I) El\ch Pederal r.ponl'oOrln!: a!:ency sh..1l
ILdopt ~he Outl..y Report and Request tor Re-
Imbursement ror Con.s~ructlon I'ro!;rams as
~he sU.ndardlzed format \.() be used for re-
questing reimbursement tor cOlu~rucUon
programs. The FedernJ sponsorlr:g l\sencles
may. however, have the option of substitut-
Ing ~he Request tor Advance or Relmburse-
men~ l"'Orm (subparagraph 4..) when ~he
Pedernl agencies determine tha~ It provides
nl1equRt.e IntorlT\l\tlon \.() meu ~helr needs.
'21 ReciplenU shall be ..utl'lorlzed ~o sub-
mit requesU :or relmbursemen~ "t lelLSt
mOn~lll)' ,,'I'len letters-of-credl~ Ilre not used.
Peden I sponsorlnl; ILl;encles shall not require
mClre ~I'l..n ~he original and two copies or ~he
Ou~la)' Report and Request for ReImburse-
ment ror Const.ructlon PTOgTILms.
5. ~'hen the Federal sponsoring &l!cncles
need Bddl ~Ional Inlorm&~lon In using ~hese
forms or mQ/'e frequent repor~, the rollo,,'lng
shILIl be observed:
. a. When additional Inlormatlon 15 needed
to comply ",'Ith IcglslR~lve requlremenu,
Federa.l sponsoring al!encles shall Issue 10.-
sLruc~lons to require reclplent.s to submit
such Inrorma.tlon under the "Remarks" sec-
tlon 01 the reporto'.
b. When necenary to meet speclt'lc pro-
sum needs Federal sponsorIng agenCies shall
submit tl'le proposed reporting requlrement.s
to ~he FinanCial Ma.n..gement Branch. BUdget
Revle"" Division. Office of Manallement and
Budget ror approval prior to submISsIon of
the report.a for clea.rance under the pro-
visions of OMB Circular No. A-40.
c. When a Federal sponsoring agenc)' hIlS
det.emllned that a. reclplent.s accountlng sys-
~em does not meet the St.&ndarc1a for FI-
nanclsl Management contained In Attach-
ment F to this Circular. additional pertinent
Inrormatlon to rurther monitor granu and
other agreements may be obtained upon
""rltten notice to the recipient un~ll such
time :to5 the sY$tem Is brough~ up to standarel.
d. The Federal sponsoring agency. In Ob-
tAining Intormatlon a.s In pAragrAphs a. '0
anel.c above. mus' comply ",'Ith report clear-
ance requlremen~ of the Office or Manage-
ment and Budget. CIrcular No. A-40. a.s re-
vised .
6. Federa.l sponsoring agencies have the
option ot shading out any line Item on any
report that IS unnecessary lor dectslon-mak-
Ing pu:rposes.
7: Tederal sponsoring agencle: should ac-
cept ~he IdentIcal InformatIOn from ~he re-
CI!)lenU In machine usable format .r. com-
p\l~er prlntouU In lieu at prescribed tormILt.s.
8. Federal sponsoring agenclC3 may p.ro-
vide com!)uter outputs to reClplent3 when It
will expedite or conLrlbute to the accuracy
ot reportlng.
9. Feder..1 sponsortng agencies are author-
Ized to reproduce these forms. The lorms for
reproduction purposes can be obtained from
the Office at Man3.sement and Budget.
FINANCIAL STATUS REPORT to rlDIRAL AGINC'f AND ORGAH.unO"..... 'UWtHT 10 WH'CH lItI:roN1 I. .u.....nto s. ..or....l o....NT 0" 0Tl4(' 'DlHTlNI"O\ OM8 App..vod \',...( 0'
"U..IU No. llG-R0180 I
("0110111 i...lrudioftA Oft rh, &nc:A:) ""CIS
AIClnr:"' OftOAHllAnOH ,10/.......... ._,.,.,. ...u...... 1.,loo4i., I,r ..4.. .. (wrlOYlillIDl.HnPlCAflOH HUM". I. "ICII'IIHT ACCOUrn HU"'." OIl'DINlln.... HU...11 L FI"'4l JillrollT I J. IAIII
O.n 0"0 o C'"H o ACC_VAl
.. rROJ(CT/GRANT ""'00 ,.... ,,,,,,,,,,,-_, I. n,uOD COY,flrD If 1'l411 .fro..,
,,.OM tH.-". 4..... .....ul I '0 ,AI."tA. ~,. .....Fa 'flOM ,.......... ~.. .._... to ,...._... ~.... "_'0"
STATUS OF f\JNDS
(a) (6) (,J (dJ (.J (/J TOTAL
PROGRAM 5 I rUNCT IONS I J\CTIVIT 1[5 ~ (gJ
-
IIel OUtlAYS previously reportM S S $ $ $ S S
T alii oulllY' Ihl. ..port pI.lod
t'lI: Pro<<rem Income credlh
Ntl ...IIIY' Ihl. ..port pe.lod
- fI..in," mittllJ lin, ct I
IIel ouIIIY' 10 dll. I
(Lin, a ,,1.. lin, dJ , .
tIll: Hon.rOChl~.llhA!' of oull.y'
Tou' fHllllllh,.. 0' oull.y'
(f"i,vr . mi,,,.. lint fJ I
I ..1
Tola' unllouldlled obl;.IUon.
I....: 1I0n.Fod...1 ,hili 01 unllquld.lId
obll."Uo", .hown on IIn. h
rede,.1 Ih.,. 0' unllquld.t&d obll.IUonl .'
T otll fed...1 ,h... 0' oull.y, and
unllquldltod obli.IU.n.
To'" cumullU..,1 .mount of 'edl,.1 funds
lulhotlud .
Unobll.llod blllnel 01 r ""'orollundl or AUTtlORIZED CERTIFYING D"n REPORT
I. n,t: 0' RAU o "OY'S10""ll 0 ,.mCU"NI"lD U. Cln)'IUTIOH 5ICUIATURE SUBMITTED
o """l orollO I elrtlly 10 Ih. bI.1 01 my ~nowlod.. Ind bI. or riCtAL
(r",.. ".r" in app"."riolt '..J
OInlCI I" eA'l I .. TOTAL ""OUHT II. nO(AAL aHAfIIl UoIlhlllhll ..port I. eonoel .nd eompl"" ond
"INU Ill. "AU Ihll .11 oulll" .nd unllquld.11d obll.ollonl T'fPEO OR PRINTED NAME AND Till( T(lEPtlONE (A..n c04,.
. Ire 'or 'he purpo... set forth In 'he I.,."..,d nu",ber s"d nr,.,...-Oft}
:~:':::~:t.:::~'::.t.:~. n""_'",v ...-..4 ..4>C......W .. '.1__.... n..," ., ,-1.,.., '._"'.' ..--y" ......p1....... ....u. document..
nANGA"a '0"'" 1M 17-'"
>-10' E XIIIOlr ,
J
'n-c"tt..-d It, OMcI of ....n...~.n' .nd ....d.'.
CIRCULAR "0. A.I\O
~
I
-"
-"
o
11l
I
I
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print let;ibly. Items 1. 2.3.6.7.9. lOcI. lOe. 109. 10i. 101, Ita. and 12 are self.explanatory.
specific instructions for other items are as follows:
1r.- ';",'''
... E"'.' th. employer klentlncaUon numDef ....6'..'"' by
tn. U.S. Int.".e' A.....nue Setvh;. or freE Clnt1itution)
c.ocse. If reqult.d by the Ftlder.I'PGnlOnn. ...nq'.
Thl. space I' ,...~ for In account number or crt"'"
identityi"1 numbltn ,tult may M Illiln" by '''-e
recipient.
8 [nt" thl month. dlY. ,nd Y..' of the be,i""'". ,ftCf
emU", of 'fti, "nII,ect 1M"od. for formula "1"" thlt
.,.: not ...",_ on . pro,eel tNtll, IhOw tft. ".nt
periocl.
10Th. DUrDOM 01 """lc.1 colu"'n" (0) Ih",ul!h (I) I. 10
provide flnenCiI' dl'. lor elctl prol'lm. funcUon, ,nd
Ictlvl"" in Ih. budllt II .1111_'" bl'Ih. r..,.,.1 lllOn'
sorlnl I.eney. II -.ddiUonla COlumn, .,e ...eded, u" ..
",.ny Iclcllllonal torm. as naeded Ind Indlcall DIll.
number In spec. pn:wtded 'n UDIMf' ,il"e h.,..ver. the
totll, of aU prarrlml. tundiom 0' activltll' thOUld be
shown in colu",n (gl 01 Ih. n"t 11.'"' For ."...",onl'
pe".'nlnl to severl. C.1I10C 01 Fed.n' Dom..tlc
As.iruncI ptOr'."" t".t do not reQul... I furth.'
'unctlonal or IC1IYlty dlllmcaUon br..kdown. enter
und.' colu",n. (a. 1 "",uCh (I) tho tltI. 01 the D'Or,.m.
For ....nu or othe' .uistlnce _,,..menU contll".'"
muttlola tlntl"''''' wher. OM or more PIOINms "'Qulre
a fu""', bre.kdown by function or activity. usa .
Mperatl form for ,.ch Dram"' showlna thl .Polie.ba.
functions 0' activltift In thl ,eDI'.'. COlumn,_ For
I_ntl or othef .s.i....Me Ilreemlfus contalninl JeY8
era' functlOM 01 .chvnie. whiCh .re lunCled from
Mftral ptOl"l",1. PN.'. I 'SIO.,.tt form 10f ..eta
.ctlvl.." 0' function _.n rOll......d by Ih. F.d.'I;
__nl a..nO)'.
101 Ent.r Ih. not oullay. TIll. I"'ount .hould be Ih. '."'.
IS Ut. amount reooned 'n Lln. 10. of the lalt t"tpO"..
If tftere ha. bee" an .dlu.lme,,' to the amount s"own
_u''Y. DI.... .nadl ..pl.n.Uon, S_ ..... II Ihl.
II tll. Inltl.1 r.lI01'1. .
lOb Enler III. tol.1 ....... DrOI"'" outl.ys (I... ,.bat..,
"'tundS' .nd oth.r diocovnl.) 10' tll.. _" _iocl.
1,..lud'nl dl.ourse",.nls of c.." ,..lIced .. _nun
inco",... For ...~rtJ tt\at Ire priM"'" on . Clsh
balll. outl.ys ... III. SU'" of .ctu.l cash dl.bu....
m.r.:s tor ,GOds Ind leMcII. tM amount of Indi...ct
.apenll cII."ed. I". v.lu. 01 In.lUnd c__1oM
IIIDlied. .nd Ih. .mouM 01 ca.h "'wnnl .nd
paymet\IS mid. to contracton and sub8,..nt"~. For
repor1s preoarwCI on .n accNed ..oendttur. "ais. out.
laY'" are the sum ot actuII ca.... di'lbursemenu. U...
amouftt of '"cUrtd; eJlpense incurred. Ute YaM of .,.-
kiftd contribution, aODhecs. and the net Increase Cor
dee".M) In IIle lmounts _ by I". rod,,","l tor
roocl. 'nd ot..., prooerty 'Keived .nd 10' se_
PI"ormed by ."'IIIOyMI. contrwcton. IUlllr.nt.... .nd
ot...r poy...
1'- ,;..Irv
lOc (",., Ih. amount of .n pro,'.'" Ineom. r..llzed In
tnis prenod th" ;1 reQuireod t-y the lerm~ .nd con.
(f,ttOM of the f dere_ ....rcI to M oPduC1td f,om to'.l
p~.a COlt'. ror '.00'" p,..".,td on . cell', bAl".
ent., tne .mount 0' u.h I"c("rn. 'fleet"ed d"rin, t".
NDor""1 Ptriod. ror r.po"~ prep.,,,, on an Icerual
ba,IS. _"fer tM I mount . ot Income f'lrnf'd since the
N,,"n,nl o' the reporting Plrlod. Whtn the term' or
CONntion' ..... PtOt'em If'lC'Of"M to be added to '''.
total .watd. ..pl.in 1ft reman". Ut. lourel. amounl
and di,pos'''on of tna 'l'Koml.
lOt' Ent.., .mount pert.'''h'l to ,,,. ftOft.Feod.,al ,,,.,. of
PtOI"lm OUtll'" Inctwed In the amount .~n Una c.
lOh Enter total .mount of unUquldl'ed oblicaUons, lor thtt
Protect 0' Dro@,am. includinC u"UQuld'le<I obha_tion,
to 'ub...."'... .nd, contractors. Un'iqut4lled obli.l-
lioft. .fe:
Calli ball_bllllllon. 'ncurr.d bul noID.id:
Accnled ellpendilurl b"lto--Obligahon, Incurred but
lor wIllch..n oullay "II nol llean ..corded.
00 not inctude ''''' amounts that h,y. been Included
on Un.. . H'\tou," ,. On tl\e final repo"~ line h should
h... . zero betanee.
101 EM.r till r_",1 .11... 01 unliquld.ted obli,.lIons
,r.own on UAt h. The Imount showft on this line should
be tM dinerence be.....n the amounts on lin.so h .nd I.
10k (nt... tho lum 01 Ih. ''''OIInt. shown on linn C Ind ,.
If the ,.oan I. 1\nal the rapart should not coftt..in Iny
unllqulOalwCl oolll.lIon..
10m Enl... III. unobllg.led bal.,... 01 F"'e~1 lUnd" Thi.
.mount sttould be the dlf'lerence berwecn line. k and 1.
II b (lIt.r rat. 'n .ftlCt du"n, In. 'OllOrtinl DlrIocI,
11c EIIt.r .mount of tho ba.. 10 which tho ~t. w.. .DDlled.
11d (",.. '_1 _lit 01 lncIi,eCl co" ch.rred du"nl tho
nllOft poriocl,
111 Enl., .mounl 01 tho red...1 ,hi'. chlrled durinr Ih.
rollOft DlrIocI.
If moAi than 0'" rlt. was .oPlied durinC the pro;ect
penod.. mcJucte . noarate scneoule ShOM"_ I)ales
.piMt ....k:1\ t".. Indl'ect cost "lIS were Ippfied. the
rwsoectrve lftdirlCt r.'" the mo"t". 01,.. .nd year Ihe
inchnlCl ra'.. ...,-e In efleel. amounlS of indl...ct. U,'
po.... CII.".., 10 IIle II'1IieCt. .nd Ih. Fed.,.l Ih.,. 01
lncIlrlCt _nM c""....., to thl IlrojlCt to elal..
A-'i10:6
..
'I
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:7
"Pp""'.d by Office 01 "".n...m.nl and Budr". No. 8~RO 182
FEDERAL CASH TRANSACTIONS REPORT 1. ~"'e1'.1 .......nftC .,.cy ,Ad .".lIi.diOfl.1 .1_.-.". to "+lfch H'U. "po'"
., IUM'"ed
(S~1l in.struc:ti~ 071 thl! ba.ck. 11 r~71ort i., lor more than one pront or
(I.Slutl1nCe agreement. attach completed Standard Form. t1%-A.)
Z. RECIPIENT ORGANIZATION 4. r...... ,n.' .. ... i4....ilia. S. Ihe'IM_t', teceuft' ..,"'.., ..
u. RU"''' i....lityi". "uMber
N..".. : &. Lottot 01 ..",m .u..... 7. l..t ",M.,.t Much.. "tII"'.
H....ft.-r Give ((ltal number lor tltis perind
......t Str.et :
I. P'''''fflt Vouch_" Clodll... I. 9. T,...ury chiC.' ncei..d (W'A.t.O...r
)'OUr KICOUflt vr 1Wt dcpo.i.ttd)
CUll. SlAt. 10. PERIOD COVERED BY THIS REPORT
aNI Z1 P Code:
3. FEDERAL E"'1PLOYER ~ FRO""' C ..._IA. ...". ""~ I TO ("'0.'-'. Gal' y<<or)
IDENTIFICATION NO,
a. Cash on hand beginning of reporting period $
b. Letter of credit withdrawals ,
11. STATUS OF c. Treasury check payments
FEDERAL d. Total receipts (Sum o/lines b and c)
CASH e. Total cash available (Sum. 0/ Lines 11.JJ.n4 d)
f. Gross disbursements
(SCIl ''Pecific g. Federal share of program income
in.struct.ian.s
07t ths ba.c:k) h. Net disbursements (Lifte/ m.inus Line g)
i. Adjustments of prior per-ods
j. Cash on hand end of period $
12. THE A \10UNT SHOWN 13. OTHER INFORMATION ..
ON LINE llJ. ABOVE.
REPRESENTS CASH RE. a. Interest income $
QUIREMENTS FOR THE
ENSUING
D~V' b. Advances to subgrantees or subcontractors $
.
14. REMARKS (A tta.c:h add1tA07I4.l sheets 0/ pilUft paper, 1/ more space tS rcqlL1red)
15.
CERTI FICA TION
SICNA TURE
DATE REPORT SUB""ITTEO
I certify to the best of my
knowledge and belief that AUTHORIZED
this report is true in all reo
spects and that all disl)urse. CERTIFYING
ments have been made for
the purpose and conditions OFFICIAL
of the grant or agreement
TYPED OR. PRINTED NAME AND TITL.E
(A~_ C0d4)
(N."..~)
I L'zt._.....l
TEL.EPHONE
THtS spACE FOR AGENCY USE
272-101
EXHIBIT 2
STAHDAI'fO rORW 272 (7-76)
p,..~ribtllOd by Office ("'I' M.n"E'~m.nt Ilnd Rudc.t
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:8
INSTRUCTIONS
P1ees. type or print legibly. Items 1. 2. 8. 9. 10. 11d, 11e. 11h. and 15 are self explanatory. specific
Instructions fot other items are as follows:
1'-
E"t",
3
Enter employer ioontification number assigned by the
U.S. Internal Revenue Service or the flCE (institution)
code.
If this report coven more then one grant or other
agreement, leave Items 4 and 5 blank and provide the
information on Standard Form 272-A, Report of Fed,
eral Cash Transac:tionl--Continued; otherwise;
4 Enter Federal grant number, agreement number, or
other Identifyini numben if re<luested by sponsoring
ag.ncy.
5 This spaca reMrved for an account number or other
Identifying number that may be auillned 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
bl.ank..
7 Enter the voucher number of the last letter-of-c:redit
peyment voueher (Form TUS 5401) that was credited
to you,r account.
lla Enter the total amount of Federal cash on hand at the
beginning of the reporting period Including all of thlil
Federal funds on deposIt, Imprest funds, and und..
pc>.ited Treasury cn.eks.
llb Enter total amount of Fede~1 funds ~ive(1 through
payment vouehen (Form TUS 5401) that were credo
Ited to )'OUr account during the ~ing period.
lle E~ the total amount of all FedenH funds received
during the reportinc period through Treasury checks.
whetMe' or not d~ted.
Ilf E'"-r the total F~I ca.h dhbursements, ma"
cMtring the ~ period, including cash reeeive<!
M pI"09l'am Ineome. Oi~rsem."ts as used here Ilso
. lneIud~ tne ItnOWM of advances and payments Ies.s
re4unds to subgre"tMs 01" oon....acton. the cross
amount o! direct wlariec Ind ~ec. includinc tha
Eft t",
It'""
empl~'s share of benefits if treated lIS a dir~ cost.
interoe?8rtmental charges for supplies and services,
and the amount to which the recipient is entitled for
Indirect costs.
11 ~ Enter the Federal share of program income that was
required to be used on the prOject or program by the
terms of the grant or agree~!nt.
IIi
Enter the amount of all adjustments pertaining to prior
periods aftectina the ending balance that have not
bnn included in any lines above. Identify each grant or
agreement for which adlustment was made. and enter
an explanation for each adjustment under "Remarks."
Use plain sheets of paP<<' If additional space is required.
llj
Enter the total amount of Federal cash on hand at the
end of 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 deys until the cash on
hand. shown on line Ill. will be expended. If more than
three days cash reqirements are on hand, provide an
explanation under "Remarks" as to why the drawdown
_. made prematurely. or other reasons for the excess
cash. The requirement for the explanation does not
apply to pres~heduled or automatic advances.
13a
Enter the amount of Interest earned on advances of
Federal kinds but not remitted to the Federal agency.
If this Indudes any amount earned and not remitted to
the Federal sponsorin, areney for over 60 days, explain
under "Remarks." Do not report Interest earned l'\n
advances to States.
13b
Enter amount of advance to secondary recipients in.
cluded in itam llh. ..
'I
14
'n addition to providing explanations as required above.
,iye additional explanenon deemed necessary by the
recipient and for in-fotmation reqUired by the Federal
sponsoring ageney in compliance with governing legis-
Ilttion. Use plain sheets of paper If additional spac. is
required.
CO'
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:9
FEDERAL CASH TRANSACTIONS REPORT I
CONTINUA TlON
(Tit... /"..... .. ......pl.t.d ..nd oluulo.ld I. SlaNJn~d F....... !~! ....lv"'Io.I,"
Ff'1'O'f"t1ftl1 ""-01''' tlLG" t1'ftI pr4ft( (tr 4~.ut"""'e llcretf7Unt.)
'2.. RECIPIENT ORGANIZATION (G.". ",,_ ."uV'" ...w" i.. il,... 1, SF
HI)
.A.pproved Dy Office ot Man.,em."t .nCo 8"..,... ""0.
80.R0182
1. fEDERAL SPONSORING AGENCY ~ND ORGANIZ;i;':
TIONAl ElEMENT TO WHICH THI6 REPORT IS SUB.
MITTED
J. PERIOD COVEREU BY THIS REl'ORT IA. .h..,.. 0" SF
171)
FIIIO" C~It. ..... ......
TO tN'_'A. .&A.. .....1
4. Ljst inform.taGn below 'or .,eJ\ grlnt or other alreement covered by tn'l rel)Ol't. U.e add,tional 'orms if more space is required.
FEDERAl. GRANT OR OTHER IOENTIFI RECll'IliNT ACCOUNT NU"'ER FEDERAL SliARE OF NET DISBURSEMENTS
CAllON OR O'IHER
10ENlI,.,INCl Nu..'ER H('T O'S8UltS(U(NTS Ic._ CU...U......TIY[
(:Sh..w" ,..bdivi.s..... bv ot".~ Wi....I.. ....__"... ,... .......... 1- NET OISeUASE,WEHTS
'"m, numben if -equired bv ,it. co,.... ..f'._. FOil A(PORTlNG
F .d""," Sp............~A"'..cv) puuoo
(nl rb\ Cel Idl
S $
,
,
.
.
I .
..
.,
5. TOTALS (ShDu.14 ........."ond .....IA ............l.I .Mvt.. ... SF !71 0.01
/.11.....,,, .o~....... (.J IM......... 4.lli..e lib: ...J....... (Il) IA. ...... ../Ii"..
Ilh o"d J 'I, o/Ih.. !SF 17t ".... "".....I..li... c1.:.....~.....CftU .A....... "'I
10.0' r."...t.. A "o.h .:pl4lt4l"'" ..! ""II di! ............) S S
"
:17-201
S.1.NOI.RO FORM 272-1. (1-761
P,..~dr...-! ~.. OHi.... tol lroIaftQC'......_t .....d el.d,..,
Office
"cular A-110 (7/30/76)
-I
of Management and Budg\ I
REOUEST FOR ADVANCE
OR REIMBURSEMENT
A..-.d bI' Ollie. 01 M.n'cem"". Ind
BudC.t. Ho. IlO-RO I &3
a. ..r....." NM .....
o ADYANCE 0 :~T.unK.
.... ...,...... ...
OAGE
D.
'''01'
Z. BASIS Of REQUEST
o CASH
1.
n... 0'
"AYMINT
_IOUUTEO
o oAnT1A, 0 ACCRUA,
So. ,..,,, ...... "FiY..('NT .EOU~
MUM.tIt '011 THIS .~OU€'T
(Su t...~nldi.... -. back)
L7fOliiAL S H$ IN " Hey AND eM "I tONAL. WENT
WHICH TMIS "uo.r IS sue...nm
o nNA,
4. Dr."L GM" Olll: 0 ..
10["'''''''1"0 NU".P AU'IiNE.D
I' nDlAAL ACKNCT
L [M",OY "
NU".'R
. OIIDJ.~,'!',~C: H't,:.:~M.E. a.
Pl:RIOO COVERED BT THIS RE UUT
C-'&. ..... ...... TO C........ _. .-"1
'flCA N
CI H .. lZAt
LA ._
...... __.. ',....c.......... I.
H._
-
H_"
.... ..r""
H_
....,.r_
CIl9. .....
..J %1,. C....:
c"...s....
..OW "I'/:"_ :
u. COMPVTAnON OF AMOUNT OF REIM8URSUIEHn/ADYANCES REQUaTt:D .."
(a) (~) (e)
.
PROGAlWS/FUNCTIONS/ACTIVlTIES . TOTAL
" ToI.1 _..... (A.., "'"'"
_lOW to dat. $ $ $ $
b, w..: Cum..latlYO -..... I_
.. ::: ~m _Iayo . (Litw . ........
d. EstImoI... not ..," CNtteyo lot .dY.....
...-
.. T_I IS.....' MI.. do 11\
f. Non., lIde...' ....... of .mount Oft .It,.. .
I. F_'" ...... of ........nl on U... .
II. ,_... D.,...-' _iously _u_'" ..
I. ~Ii~.~ - -... (Law ,
J. -- _I'''' by lit montll
month, - ---...
bI' ,-... roo"''' .._
for U.. 1ft m."n, prw.. 2nd_II
__..._ Id",,_
lid monlll
1%.
ALn:RftATl COMPVTATlOff fOR ADYAltCD OflLT
.. EMl....I... ,..._...sIl_lays 1...1 win be _dun,. DOIIad _ by tile _.....
$
It. l.M.: E.lm.t... bal..... of '_rei <:asll on "- .. of ......-. 01_ ...-
.. _nt rec;lu-'" (LilY ......_1..... .)
11.
s
CEJIT~ION
_""'I OF __ CClnI",__
DATI .'OUEST
IU."lTTtD
I .......,. ,,,at 10 '100 boot of my -"'r-
.nd beli.' ,... d.l. ._ .re c:orrecl .nd
,hat .11 DUtlays __ mid. in .c:conl......
with 1.1I. ...nt COndlti_ or 01..... .......
_'" and th.1 PI\'ftMnt ia due .nd .... '""
_ prwIously _u.......
TTra) DIl. Nt""" NAMe ....0 -n,u
H_
.-
_0..
TIU_C
"". _lot __
'_101 EXHIBIT 3
n_ _ not 17-11\
,....,.... .. 0Mu ., ".11I"""'" aM .......
ORCVL"'A MO. A-ll0
Federlll Grants Management Handbook September 1978
A-110:10
'I
.
Appendix I
~.."*
1
I
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print legibly. Items 1.3.5.9. 10. 11c. 11e. 111. 11g. 1 Ii. 12 and 13 are self.explanatory;
specific instructions for other items are as tollows:
/1_ E..IPII
2 Indicata whather rllClue.t il prepared on ca.h or Ie.
CN" ..pendilure belli.. All requ.... tot .dvlnces
I"au be preoared on I eel" ba.is.
Ent.., thl rederlt erent number. or other id.ntityi",
number .ssil"'" by- the 'Feetent spon,onn. 'reney. If
the advanca 0' reimbursement '1 tOt more than on.
I...nt or other ..,..men\. in.ert "/A: then. IftOw' the
.11,e,et. .mounts. On . Moant. .heel. list ..cft
.,.nt 01' I,ree",ent numbe, and the Fedef'.1 Ih.,. ot
outla,s m.de .,ain,' the I,.nt or ..reement.
6 Ent.r Ih. emptoyfl- ldenHfic.hon number ''''ened by
the U.S. I....m.l R...lnue Servic.. or the FICE (inllltu.
lion) codl il reqUestlOby Ih. F""or" "oney.
This spac. .. .....tved tor an .ccount number or other
Icl....llyinr nu_ th.1 ....y be ...im"" by th.
recie>>iefrt..
a Enlor tho month. lI,y. ,nil YI.. tor tho ",,""in, ,nil
."dine of the peonod CO",ed an thil r.ouest. If the ,..
Quest is to' In advance or tor bath In .ca".nee and ,...
Imbu'......nt. _ lhe penoll that Ihe Idy.nc. win
CDW'r. It U.. reQu.st Is tor ,.imbunement,. snow the
period tor wllleh tile ,..mtau....m.nt 's reQuated.
Not.: Th. Fed....' ..oonSGrin. arenei.. haw the option of
,,",ui"n, recipient. 10 _1'1011 It_. 11 or IZo but not
both. It.m 12 ._ be uMd _ only . minimum
amount 0' i"~ho" il f'eed" to mek. an act""ce
.net outl.,. in_lion _inod III Il_ 11 con 1IO
OOt.ilMd in . ,t",.." fft8nner from athet' reportL
11 Thl 1lU_ of t'" __ COlumna (01. (bl. ond (cl. i.
to pnwide 'INCa tor "IMI"'. co.- ..akctowftt wfteft .
r,.,;ect ha. _ 1''''''''''' ,net _lOloll by _rom.
lul\Ction. Of' activity. It Iddlttonal columns .re ftM'ded.
II.... E..IPII
ule .. me...,. .Odittoftel 'ormt a. n..clad .nd indicate
...._ """'..., in IpH' JHO'W'ided in upper rime 1\aIlIIf.
wet. the wmm." to'lel1 of .11 pro".m,. functions.
Of .chwtltes should... Il'tOw'n in In. "\Dt.III" column on
Ihe ,,~ po,..
11. Enter in 0'., of d.t"O', I". month. d.y, end year of tne
eMI"1 of UN KCounhnc Plrtod to whit''' this amount
applies. Entet' pro"I'" outla,. to d.tp , ,.et 0' r.'uNtl.
rebet... aM chscou"ts). in .n. .PPl'Oonate columns.
For ",,,"1' preo-,ed on . ClI" b.,is. out1ays .rt' t~
IU'" at act&all Ulh disbunemenu 10f' ,004' and ..tv.
left. the lmoun' of indi,ect ..penMS ch....ed. the
"..". of in.lulld con"ibut~. applied. .nd 'h. amount
of C8,1I ldYanc.es .nd peymen" m.de to subcontr'1lc.
tOR and wbrecipients.. For l'eQu..t. PretMt'Id on .ft
aCCrued ..pendltV", ..i,. QIUIUays It. the .um of the
ad"" u." dtSbun.ementl. I"p. amount of If'ldifec1 ...
pens.. incurrM. and th. net Incr.... (eI' decre...) In
th. amount' o-.d by th. ,.cipient fo' Rood. .nd othef
_~ __ ,nil ,... ..nric... 1><'''''''''''' by .....
pI_ ......tKft. .u.....",... ,nO otnor ...,....
11 b Ent.r the cumulahve u." income recet",ed 10 date. tf
recn...ts ar. prepaNd Oft . c-ih basis. For r.,qufttl
,.,.pared Oft an accrv-ct e_p"ndftur.. be..s. ent.r the
CUtIIuYtiwre tncome ..med to date. Unci., ."h., belis.
l't'Iter onty tlM .mount aOplicatH. to pl'Vf"8m income
t1\al .... ,..qv'red to be Uled tor the project rN pre-
,r.... by the te"". of the ,,.nt or other ..reemeftt.
11 d Only"'- mokinr ',",UOltl lor _neo poym......
.n.... the lot" estimated amount 01 casJ\ ouUays ,,,.t
win be _. durin, Ih. ",noli c.....rod by thl _.nc..
13 Com1>MtI th. eo<ti(ocotion be"'" IUbmininl lhi.
roQUOSl.
..
A-110:11
'\
1
I
Office of Management and Budget Circular A-110 (7/30/76)
Appt'OYed by OMce 0' Mene,.me"t .nd "AGE or
OUTLAY REPORT AND REQUEST FOR REIMBURSE. Budlot. No. IIO-ROIII PAG(S
MENT FOR CONSTRUCTION PROGRAMS 1. n..t or "(QUit ST 1. "4$11 0' atQUI-S1
(5.. i",."'eh..... OIl back) o riMA" o I'..,.flAl DCA," o ACC~UA~
l. "CDC"'''\ IL"ONSO.,"Q AG(HCT ""0 O_GAHlZATlOfItM.. ILIWl,HT TO 01. UO(lUl G.........T 0_ 0'"(" .. ,....an"", ,..."MI,"T IUQUE.ST NO.
WH'CM ,",. .UO'" IS su....nc.o 10EN"""'''' NU..eUI AU'ONtD
I" 'lO~"'" MUNCY
... ~~r.'".Ot';.l. .OINTlnCAT.ON I"~ ~eC1"("T ACCOU"T O~ O'''l~ ".. CCIIOG ... "'" ......
IO(Nnn.NCI HU".U
'1Ia01I .M.... ~ ...... 10 ,/II....... ~ .-t
I. "c:e''''CJlIT ORG"'IIIZATlON lit. ,,"''(a........................... U 411--' .... -- "
Ii_ : N_ ,
He. ..... lie. ...
't_ : ...... ,
Cu,.. ."...
.s..... ..., ,..... .....
." C... : %1' c... :
II. STolTUS OF FUNOS
PROGRAN5-I'UNCTION-...c:TIVlTlts
CLASSIFICATION (01 C.) (e) TOTAL
..0
I. Admin...,.l;.. .Koens. $ $ $ , $
b. "",IImln.,,. 1Z0.n..
c. Lend. "Nclur... tlrtll-ol.wey
d. An:hiteclunl e"rineMinl besie ,... I
I. OI"er erellltoctur.I en"n..tlnl'..1 I
f. Prolect Inspection I_
I. ynd deYelopm.nt I
II, A..OCIUon .alM"" I
I. Relocattan paymlnts '0 attdivNluaJ, end
businesses
J. Demolition end ...m.....1 .
10.. Cons,rvdion and "ro;ecl Im""'~."t I I
cool
I. EGuiomonl
m. Miseetl.n,out cost
n. Tot.. cumul"'YI to dlte (sun! of"lin" I I
IIIIN m)
o. Deduction, tor prOlnm income I I
p. Ne, cumul."vI to d... (line " minus I
line 0) .
I
Q. Fed."'lh.,. to dll. I
r. RehlbilitlUon rran.s (100% -I I
bu''lem.nl)
I. TOI.I Fed.r.' sh.,. (Ium 0' liMa Q I I
.nd r)
L Feele,.1 lNyme"'1 pre.nous.,. .... I I
Ques..d
u. Amount reQuest.d for ,.imbunement 1$ 1$ $ 1$
v. P.~I'""I' of pnysiCollI COmo."'on 01
oro,ecl % % % %
1%. CERTIFICATION SIGNA TUite. 0' AIllMOIlI'ZE.D c.1.",...,tNG , o..e ~(""~1
O""ICIA~ .ueMlntD
I c.nlfy IIIal 10 III. besl of my ~nowleclle
and beliel III. billed cosls Dr disbune. a. RECIPIENT n~ED Olll 'IlI'NT'tD NAMe. ,,"0 TIT\.t I T[LE~"( IA_ ....
mlntl ar. in accord."ce wrth ,ft. term, ....... .... .........,
of In. projec:t and th.. the ~imbu-neme"t
"pt.lenl, the Fede'll shl" due which SIO.....TUIllE 0' AUT"ORIZtD etllnt"r.NQ DAT't SlCHtO
h.. not bien previously reQuested .nel 0" ICtAL
"at In insoec1.Oft h.. been perfonned b. Reorest'ntatnre
tiel .n work is in i1CCOrdlncl with Ute certify,nE to lin, TY~O Oil ~"TtD .....t AND Tn~t I lEU"_"t ....- .-
Irm, 0' the ....-rd. Ilv. ..-........ ----.,
%7)-IOt - ~ -
CXHlof,
'T.."O."D '0'.... ~J f7_76~
,....,..."'... I'~ ,~..... ,.' ..........-.... .,.,., "..,~
A-110:12
..
'I
I
1
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTlONS
PI..,. type or prinllRj'lbly. 1\tIm. 3. .c. 5,8.9, 10. 1 h. and l1v.... MH._pla_lory; specific instructions
lor oCh'" Item. _ as toll~:
n-
.....,.
...... - __"" __ " ,... ,__ Ie _. -
--------...-
---
z
........ .tIC"'" .......... .N ............. eft .. .......
...,........ ., ..... llht-O-......... ........
,
a___-.-A----br
tn. U.S. 1",.'- R_.. __ I'" net (lnet__l
_. w __.., _ fecl_ ~J.
T
Thll ...... .. ,."......... .., .11 ecaaunt ."If".... _ eC'ftw
......,,,.,.... _ _ ...., M ..._ "" -
...........
11
'nM __ ., _ _ leoI t"---,, fclle ID
,,--....-....----.
..... P...... .... _ ,..- _ ......01 .., _
....... - ... ~. " ...- - ...
_ed. u.. .. Men!' _1tI_1 _.. _ .M
.....""'..__..._..__m_ttwtot::
_. .... _". _Ie al .. __ Iu_
_'. ... __ .tooultl t>, .- 1ft .... --'"
...u..... ... ... _ ...... All _ .... ~- ...
. _u_ .....
lw
1_ __ ___ Nt -" _ ......... 1eeI"
_, _, ... __ .nd .... _ ad.......__
_..... ......... ... .......nt of .....,... ....--
--.-br_-~-.--
... amount" _ _... . _- ......
Uto
_ _ ~lnl" _ _... !.atlnc.nd
........nL _.... .....,.. - -DO. ....llInl -
hetft. .nd .. _ _ _I.. prior ID --
,Mo.....M ~
no
_ all _ .'.-,0 - - IIM__.,..
.... .. land, ...... ___ .nd ~ rlltlt4-
-.
lW
IoMr __ _ Nt _ '" ......_1 .....-,
11.
U- _ _It_'" -.-.-...c -. Do not
Inclucle ..... ._ _ ... _ II.
III
c_~__","'_' __
--
111
1[,.., .. ........ ............ ...... .... _. __ ~.l .,
_ _ _ ,........, _ ... 1M pwlt ic ......
I.. J t.1'he~ ~.........---....
_ --"y _ .11 -jar __
-...------....--
-...
1111 E...-____'-~_
.........." ...-..- ...a A.t e&ms eC -~. -.,.11( ......
iftc__I.O"_____
.-....tiOft ......~ .........-:: ___ ............
____Ift____..
11/ CItM,.... _nt., __ _ _..,_
_i_ to "'__ _.. 1_. ...._ _
_1M.'''' ______.
1-
''-'
UI
~_--....._...-~of'h.
~ _ .-,.-.t. IV ''''IV perty co....-on dO.
-... ....... iA ..._1 __ 0< '_1 ...
..__ '- --.,..., ....... Nt _..... tram tn.
... of ...... 01 ... ........,.. of .,NCtu'.. shOuld be
_ed ID ,.... _: '.......... ..ftectinl -
_ W ___ Ill' _ r..,........-r.
Uk
E...., ,.... ~ auociM. wft" the Ktu.' con.
.wvct.ioft aCt add~ W. or .....Ot.t"'n of . tacility.
/1tIIeo. N.dude ... Ih. caMlIIO"Y. 'h. ."'OU"tl tOl rwo;..et
....4____~ .....a. n .......... str...cs. 'e..cie.Qp"c.
- ......
III
[001.. _ .... .1 _..... _ ftoed .nd "'.....
.lI6a, _., ......__ ..- ..... .......I\Ictioft. ,or
-... -"'''' __ "_I..". '.10.... ....",.
... ..... ...... .yea..".,. ....,.bN de..s. eN'''_ and
-"-~
11...
_ _ __ '0< .1 -. _ lpooc:lllcally _n.
--
U..
[,wter' 1M ..... cum.....iW: artltOUn( to dete wtltch
...... _... ..... of ..... . ..""'ftI m.
1M
....... ,.. ..... .-.noun( of pnl8"'" ...come applied ta
.... ,..nt 01 CDntIWClt ...,...me.. pcepC. Income In.
....... ... .... I- to.....,..,. .. . -eM"". _ft'" of peper
___t)op.__I_.
11~
!flew U. ..... CUMU~ amount to d.'. which ahoutd
1M IIW ....... ....... on ..,.. n mU",. the .mount
--..
1~
____..__...._..onll....p.
111
Emw _ _ of ......bl_.. ...... peym.....
...... tit i~ when ."..,.'" .......tiofll pro.id..
100 ~ ~ It7 .... ,..,...1 ......"".
III
E_"" .- _., F_... pa~to -",uoly
--. " _ _ ic _ ..... "'-1 reO",.
-
u.
____'*nc_---.....
....... "... ..-.c ....... ~ ttM Ci"wenc. ~n
... ~ ....... _ ...... . aM t. If di......"t. ...
~_._-.
LIe To'" ~ecl It7 - _ - ...... ;. ,..
__ Iw _ _ III _ _....... Th. fl"O.
..".,... ..... II.. ~ .... ..... ..",. is submiaed to lhe
F_._.
1210 To............ br _ _ ..._m.t....
.... i& ~ .. ..... ~.... of ~ comot-hOfl
_ ~ tar ill .. '-'"- ., 1M ,..nt or .C......-."l.
A-110:13
'\
I
Office of Management and Budget Circular A-110 (7/30/76)
AnACHMENT H.-CIRCULAR No. A-II 0
MONITORING AND RErORTING rJtOGRAM
rEU'ORMANCE
1. This att.llc:hment sets forth the proce-
cluns far monitoring and reportlns prosram
~ormance of recipients.
Z-Rec1plentsshall monitor the perform&:lce
under Grllnts &nd other agreements and.
~ IlpproprlllLe, ensure thllt time sched-
wes are being met, projected work units by
tlme periods &re being accomplished. and
otJ:ter perlormance go&ls ..re belns achieved.
ThIS review shall bc mll~e for each prosram,
hmetion. or activity ol each agreement aa set
lortll In the. approved appllCMlon or award
daC.ument.
3. RecIpients shall submit a performance
~ (technical report) for each agreement
tl:Iat brlefty presents the follo\\'lng Informa-
ttOft lor each program. function, or i'etlvlty
IItVOlYed IUI prescribed by the Federal spon-
aorq -cency:
a.. A comparison ol ...ctual accomplishments
wtth the goals est.abllshed fo.r the period. the
~ngs of the Investliator, or both. rr the
outp.Ufoor programs or projec:ta can be readily
~ed, suC:h quantitative data should
be- rtlated.to cost data lOr computation oC
W'LLt casts.
b. Reasons why established goals were not
m.<<t..
c. Other :pertinent InCormatlon Including,
",ben. 1lpprOprlate, anlll)'sIS and explanation
oC ~ overruns or high unIt costa.
. 4. ExceJIt as provided In & and b below,
aDd: In subpangraph 3a( I), Att&chment 0,
r~ shllll submit the perform&nCe or
tec!HdCaL reports to Federa.! sponsoring agen-
ems &D4 the FinanCial Status Reporta cov-
ertDlt tbe sllme period In the frequency estab-
lished. by Attachment 0 of this Circular anel.
~ IlpproprlAte, a l\nal technical or per-
lGrm&DCe report after com.pletlon 0: the
pnt~ on & date specU'led by the Federlll
spcmsoc'lng Ilgency. The Fec1erlll sponsoring
~c:r sha.!1 .prescrlbe the frequency with
"'1'ltc:h the performance reports will be sub-
mitted: wtth the request for adv&nce or relm-
lNrament when that form Is used In lieu
at Ule F1nanC1al Status Report. Except as ;:Ira-
vl4eA tor In paragraph 5 below, performance
repcICU shill! not be required more frequently
tl2aI1 quarterly or less frcquentl)' than an-
mJAlly. Feelera.! spon$Orlng &gencles may
IL-a.Lve the requirement for reCipients to sub-
::u.t perCormancereporta with the l\nanclal
rI?Ol'tS IUIder the lollowlnG circumstances:
L When the recipient Is requlrec1 to sub-
m~ a. J)Crfo:"mance report \\'Ith a contlnua-
:tcn. or renewa.! application.
bc When the Fedcral sponsorlns agenc)' de-
:.ermtnes that on-sIte rechnlcal Inspections
.::d: cerUfted colnpletloil dMA will be sum-
clent to cVllluatc .constructlon projects.
Co Wben lohe Federal sponsorinG &gency re-
c;uats annual ftnanclal reporta on a l\scal
yar basts but It Is necessary to get annual
pr:veu nports on & calendar year basts.
5.. Between the required performan':e re-
!)Q~l:1Dg c1ates. .events may occur tIl:n have
S'4PUdc:a.nt Impa.ct upon the project or pra-
;:-am.. In such Instanc:es, the reclplen: shall
l:tform the Federal sponsoring agenc)' as soon
as the follOwing t).pes or conditions become
known :
L. Problems. delays. or ad\'erse conditions
::at ....11 materially attect the ablllt)' to at-
:at:n. p.rofra.m objectives, prevent the meet-
I"T or tlme.schedules a.nd goals. or preclude
:he attainment of project work unlt.s b~' es-
u.bllshed time pcrlods. Thts c!l:<closure shall
~ ac:c:ompanled b)' a natement of thc action
aken. or contempl...l.ed, and any Federal as- .
Sls:ance needed to resolve the situation.
b~ Favorable developments or events that
e~able time schedules to be met sooner thlln
antlclpaLed or more work unlta to be pro-
duced Lhan orlGlnall)' projected.
6. It an;' performance review conducted
b;' the reCipient dL~closes the need for change
In the budget estimates In ...ccardance Vo'lth
the criteria established In Attachment J Co
this Circular. the recipient shall submit a re-
quest lor budget revision.
7. The FederR.! sponsoring agency shall
make site visits u frequentl)' as practicable
to:
a. Review program accomplishments and
management control systems. &nd
b. Provide such Lechn1cal assistance as
may be required.
8. Federal sponsoring AgenCies shall submit
proposed Lechnlcal and performance reports
to the omce of Management and Buelget for
approval In accordance wi th the report clear-
ance requirements of OMB Clrculu No. A""",O
as rC\'lSed.
ATTACIIMENT I.~lRcul.Aa No. A-liD
I'ATMEJtT IlEQUrREMEHTS
1. This atta.chment esta.~lshes the re-
quired methods 01 makIng pRymenta to recip-
Ients. These methoc1s will minimize the time
elapsing betwcen the disbursement by these
reCipients and the trllnsfer ot fundS from the
United St.&tl!$ Treasury to these reclplenta
whether such disbursement occurs prior to
or subsequent to the transfer 01 lunds.
2. Pa)'menta can be mac1e to reclplenta
through a letter-ol-crec1lt, an advance by
Treasury check, or a reimbursement by Trea.s-
sury chec&. The followlns c1eftnltlons apply
for the purpose of thiS attachment:
a. l.ctter-o/-Cred.it.-A letter-of-credlt Is
an Instrument certlfted by an autllorlzed om-
clal of a Federal sponsoring agency that au-
thorizes a reCipient to c1raw funds when
neec1ed from the Treasury, through a Fed-
eral Reserve bank anc1 the reCipient's com-
mercial bank, In accorc1a.nce \\'Ith the provi-
sions of Treasury Clrcula.r No. 1075. &II re-
vISed.
b. Adu4nce by Tre~urY ch.ecJc.-An ac1-
vance bv Treasury chec~ IS a payment ma.de
by a Treuury check to a recipient upon I~
request beiore outlays are made by the
reCipient, or through the use of predeter-
mlnec1 payment sc:hec1ules.
c. Reimbur$eme71t by Treuury clLcck.-A
reimbursement by Treasury check IS a Treas-
ury c:bec:lt pa.1d to a reCipient upon request
lor reimbursement from the recipient.
3. Except for construction granta and
other construction &greement.s for which op-
tional payment 'methoc1a are &uthorlzec1. a.s
described In paragraph 5. the letter-al-credlt
method shall be used by Federal sponSOring
agencies I! all 01 the followlns conc1ltlons
exist:
&. 11 there IS or wUI be a continuing rela-
tionship between & recipient and . Federal
sponsoring agency for at least a 12-month
period and the total amount of advance pay-
ments expected to be received ..'ltllln that pe-
riod from the Federal sJ'lOn$Orlns agency Is
$250.000 or more. as prescribed by Treasury
Circular No. ]075. For Joint Cunc1ed projec:ts
the Treasury has authorlZec1 a dollar criteria
a: $120.000.
b. If the reclplent has establiShed or dem-
onstrated to the Federal sponsorlns agency
the willingness anc1 ablll:'; to malnl.&ln pro-
cedures th&t W'\II minimize the time elaps-
In!; between the transler of luncts and their
disbursement by the recipient.
c. It the reclplent's l\nanclal management
s\'nem meets the standards for lund control
Rnd accountAblllt)' prescribed In Attachment
1" to thIS Circular. "Sta.nda.rds for :!"Inancl...1
Management S~'stems:'
~. The method of advanclnl; funds by
Tren.~uT\' check shall be used. In accordAnce
Vo'lth the provisions of Treasury Circular No.
..
I
A-110:14
1075. when the recIpIent meets all ol the re-
q\llrementa specified In para!:raph 3. above.
.except LhoEe In subparasraph 3&.
5. TIle reimbursement by Treasury check
method shall be the preferred method Il Lhe
recipient does not meet the requlrementa
.peclned In subparagraph. 3b and 3c. aboye,
At the option of the Federal sponsoring
a@:enc)', thiS method may also be used on any
constructlon agreement. or II the mllJor por-
tion of Lhe progl&m Is accomplished through
private market nnanclng or Federal loaNS,
and the Federal assln...nce constitutes a
minor portion of the prosram. When the re-
Imbursement method Is used. the Federal
sponsoring a~enc;' shall make payment
wlLhln thirty da;'s after receipt of the bllllns,
unless the blllln!: Is Improper.
G. When the letter-of-credit procedure Is
used, the recipient ShAll be Issued one con-
solidAted letter-ol-credlt whenever posslDle
to cover anticipated cash needs for 1111 granta
and other agreementa &warded by the SpOIl-
sorlng af;ency. Ukewlae. to the extent po:sl-
blc. when th.i adv&nce by Treasury check
method IS used, advances shoulel be cun-
sollllated (pOOled) for all gnnts ...nd othcr
asreemcnts made by the sponsoring a.gency
to th&t reclplen t. . ,
7. Unless otherwise required by law, Fed-
eral sponsoring agenclcs shall not withhold
paym~nts for proper charies made by recipi-
ents at ...ny time during the project or pro-
Itr...m period unless (a) . recipient has hIlled
to comply with the pro!:ram obJectives. awarc1'
condl tlans. or Fedcral reporting requlre-
menta: or (b) the recIpient Is Indebl.ed to
the United States, IInd collection of the In-
debl.edness will not Impair accomplishment
ol the objectives .af a project or program
sponsored br the United Stal.e.s.
Under such conditions. the sponsorlns
...genc)' may, upon reasonable notice. Inform
the reCIpient that pa~'ments will not be msde
[Dr obl1gatlons Incurred IlCter a specified date
until the conditions are corrected or the In-
debtedness to the Federa.! Oovernment Is
liquidated.
ATTACHMI:HT J.~mCULAII No. A-110
REVISION or ""'ANetAl. rUNS
1. This attachment sets forth criteria and
procedures to be followed br Fec1eral spon-
sorlns agencIes In requiring reclplenta to re-
port .devlatlons from ftnanelal plans anc1 to
request approvals for ftnanclal plan re~
visions.
2. The nnanclal plan IS the finanCial ex-
pression ol the pro)ec:t or program &s ap-
proved during the application and/ol' .....a.rc1
process. It may Include either 4he Federal and
non-Federal shue. or only the Federa.l sha.re:
c1:pendlns upon sponsoring agency requlre-
ments, It should be rel&ted to performance
for program evaluation purposes ....hene.er
appropriate and required by the Fec1eral
sponsoring agency.
3. For nonconstructlon a"'anSs. reC1plents
Ehall Immediately request &pprovals from
Felteral sponsoring agencies wl'len there Is
rusen to belleye that within tile next s:ven
days s revision will be necessa.ry for the
lollowlns reuons:
a. Changes In the scope or the objectlTe of
the project or pro~am.
b. The need for ac1dltlonal Federal func1-
Ing.
c. The transCer of &mounts budgeted lcr
Indirect cosu to absorb Increat'es Indirect
costa or vice versa. It approv&l Isrequlred
by the Federal sponsoring agency.
d. The expendItures as require approval In
&ccorc1l\nce with FMC 1.1-8. "Cost Prlncloles
lor Educational Institutions." For all other
a"'"rds. approval requirements for other
Items of expenditures ma~' be Imoosec1 II they
Ilre conslstcnt with those In FMC 73-8. No
othcr requlrementa for specll\c Item. m&; be
I
Office of Management and Budget Circular A-110 (7/30/76)
Imposed unJeSll a. aevla.L1on haa been a.p-
provea by the OOlce at Ma.l1&Gement LOa
Buaget.
e. Recipients pla.n t.o tr..ns.ter tunas ..lIou.cd
tor tra.lnlng a.llowanccS (dLTect payments t.o
tra.lneesl t.o otlJer cal.egorlell at expense.
~. None at the substaotlve programmatic
work Wlder... gr..nt or other ..greement may
be subcontracted or transterTed wltbout prior
approval at tbe Federal lIpoDlIOrlng a.gency.
This provision does not apply t.o the purchaae
ot supplies. material. equipment. or gener&l
support services.
5. The Federal spol15Onng OoGency m..y
..150. 0.1. Its option. rC9trlct translenl or tunaa
among direct. COllI. cn.l.cgorlcs lor awards 10
which the Federal s~ exceccLs .100.000
when the cumulAtIve s.lnount ot suen tr..n6-
lerB exccccLs or Is expect.eG t.o esceed five
perCllnt ot the t.otaJ budget 8.ll 1a.o;t o.pprovc<1
b)' the sponsoring agency. Tbe same crll.crls.
shall "'Pply t.o the cumula.L1ve &mount or
tr..nsrenl ..mong progl"lWn8. tunctlol1ll, Ana
",otlvltles ",'hen budge\.ed lIeps.ra.l.cly lor lion
",wn.rd. eXA:ept. that tbe Fedoro.l 9!)onsonng
ngency &hall perm1t 00 u-o.nsler that woula
ca.~e a.ny FedelUl approprla.1.I0n. or part
thereot. to be used tor pl.JrllOScs oLber tba.n
th06e Intendc<1.
6. All other. changes t.o OODCol1llt.ruct.lon
buagets. except tor Lbe changes aeserlbc<1
In paragra.ph 8. below. do not require ap-
proval. This Incluaes tbe useot recipient
lundS In turther&nce ot program obJect.lves
over and a.bovethe recipient min1mum slll~re
Included In the a.pprovea buaget.
7. For consLructlon awan1l>. recipients
shall request. prior a.pproY1Lls promptly trom
Federal sponsoring ~el1oCle:s lor budget re-
vLslons wherever:
S:. The revLslon results trom changes In
the scope or the obJect.lve at Lbe project or
progra.m. and
b. The revLslon Increases Lbe budget
&mounts at Feaeral tunda oeedc<1 to com-
plete the proJeet.
8. When a. Federal sponsoring ..ge=y
ma.kes an &wa.ra that provlacs supportdor
bot.h construct.lon a.nd nonconsLructlon work.
the Federal sponsoring a.gency may require
the reCipient to request prior a.pprov&! tram
the Federal sponsorlnS ~ency bc!ore m:1klns
a.ny tund or buaget tnLnsters betwccn ~e
two types 01 work sU;lpol"tecl.
9. For both construct.1on a.nd nonconstruC-
tlon a.warc1s. Federa.l sponsoring a.gencles
shall require recipients to DOt.1ty Lbe Fed-
eral sponsoring a.gcncy promp.tly ...henever
the amount at FedenU autborlZed tunc1s IS
expected La exceed the ncccl.s at the recl plen I.
by more than $5,000 or five percent at tbe
Feeleral award, whichever Ls greater. This
not.lficat.lon ",'UI not. be requLTed It a.ppuca-
tloDll tor addll.1onal tunc11ng ue subm1t.le:1
tor coot.lnulng gra.nts or conU'aoCta.
10. When requestAng approval tor budget.
revLslons. reclplen1.5 shall use the bUdgo~
torms that were used 10 Lbe applleatAon
unless a. letter request. will sumce.
11. Within 30 clLlenclar days trom t.he date
01 receipt at the request tor bud!;et re~l-
slons, 1"ee1eral sponsoring agencies shall re-
vie.... the request and notll y tbe reclplen I.
whother Lhe bUdset revisions have beeD ap-
proveel~ Ir the revl~lon Ls st.1I1 under con-
sleleratlon a.t the end or 30 calendsr da~
t.he Feeleral sponsonng AGency shall lnlor~
the recipient In WT1tinl:' or the date wben \.be
reCIpient may expect Lhe aecL~loD.
ATTACHMENT K.--CIRCUL...1l No. A-110
C1.0SEOUT rnocCl'C71\ES
I. This at.ta.chment. prescnbes unttorm
closeout. procedures lor Federal gra.Dt:l a.nel
other agreements with recipients.
2. The tollowlng eleftnlt.lons sball apply tor
the purpose at thLo; attachment:
a. Clolteout.-Tbe cl O6COU I. or a grant
agTccmeDt Is the procelOa by whlen a 1"'ecleral
"po~rlng ~eney ele\.erm!DeII t.bat &II ap-
plicable a4mlnlsl.r1't.lve actions aDel &II re-
quired work at Lbe agreemellt han been
complet.eG by Lbe reclpleDt and the 1"'ecleral
sponaorlDg ageney.
b. Date 01 complctlOll.-Tbe dal.e or com-
pletion III tbe dal.e aD whlcb all work uoder
~ta and oLber agreementa III complcl.cd or
the c1a1.e OD lobe awvd document. or any
. supplement. or a.meDClment. there~. 011 wblC:l
Pederal apollllOnlhlp enela.
C. DisallolDCd cosU.-DlsallO-cc1 costa a.re
those charges t.o a gJ'lUlt or oLber ~rcement
Lhat the I"llclcral spoo.o;orlnc al:ency or ILo;
reprcscnLlltlve de\.ermlnes t.o be unnllow-
a.ble. Ln accorc1ancc with Lbe appllca.ble Foo-
eMLI cost prinCiples or oLher condlt.lons con-
talnoo UI tbo agreemen ts.
3. All Feder&l spol1llorlng ~enclCII sha.ll es-
tAbllsb closeouL proceclurc.~ Lba.t. Includc Lhe
lollo-Lng requL1ements:
a. Upon request. Lbe l"ecleral sponsorlnc
al:.ncy sball make prompt pnymen1.5 ~ a
reclplellt tor allo_able rclmbursable costs
uneler the grant or oLber agreement being
clO8CC1 out.
b. The recipient sba.1I immediately retund
any balance at unobllgat.eG (unencumbered)
clLSb tbat tbe FedeMLI sponsoring agency hll4
ad vanced or paid a.nd tba.t Is not a.u Lborl,.,cd
to be rctalDecI by the recipient. tor use III
otber gra.nta or other agrccmcn ts.
c. TIle 1"'eclc:ral sponsoring agency sball ob-
tain Irom the reCipient wtLbln 90 calenelar
days alter the date ot completlon or t.be
a.greement. all lino.nclal. pertormaDce, a.nd
otber reports required as tbe condlUOo ot the
o.crccment. Tbe agency ma.y grant. extensions
wben requested by tbe rcctplent..
d. When a.uthor1zed by the grant or otber
agreement. tbe Jl'I:cleral spoDllOrlnl; AGency
shall make a set.l.lement. tor any up_a.rcl or
dowo",ard a.dJust.ments to Lbe Federal shan:
01 costs aiter Lbese reports are recelycel.
e. The recipient shall account tor any prop-
erty a.cqulrecl wltb' Pederal runc1s. or re-
ceived trom tbe Governmeot ID a.c:cordance
wltb Lbe provlsloDS at At.tachment. N' t.o thiS
Circular. Property M&I1&gement Sl.a.ndarc1s.
t. In tbe event a 0111I.1 a.udlt ba.a not. been
performed pnor t.o tbe closeout. ot the grant
or oLber acnement. tbe I"cc1eral sponsor log
"ageoey shall rctalo tbe rlCbt to recover an
appropriate a.mount after tully conalelenDg
the recommenelat.1oos 00 dls&lIowed costs re-
sultLDC trom tbe linal audit.
~. S~peDSlon and I.ermlnat.1on procedures
a.re coot.a1oed LD At.tacbmeot. L to t.bLs Clr-
cular.
A'n'ACRMEHT I...--c-mcvLAa No. A-110
SUSPEHSlO" .unI TEJlMlI'ATJOH PIlOC'EDO'1UCll
1. This att.adlment preBC1'1bea uoltorm
sWlpenslon and termlnaUoo procedures lor
Federal graota &Del oLber acreemeots wtLb
re:1 p len ts.
2. The tollowlng deliDlt.1ons sh&11 a.pply
tcr Ute purpcse ot this at.taChmeot:
a. Tc:rminaUOtl.-The \.ermlnat.loa at a
CTJ'nL or other agreemenL means the can-
cellation or Fcclcral.spoo.wrshlp. ID ",hole or
In part. under ao agreement. at. any time
pnor t.o tbe dal.e ot completion.
b. Su.Jpcn.sioft.-TIle 6uspenslon ot a grant
or other a.grcclDent. Is an acUon by a. P'c<1cral
spoasorLDg ageDCY tbat. tempora.rUy Su.o;-
penc1s P'c<1eral spons:lrsblp under the grant.
or other agree~ent. pending corTcctlve ac-
tion by the recipient or penelLDS a deciSion
to \.ermlnaLe tbe grant or otber agreement.
by tbe Federal sponsortng aceney.
;1. All Fecleral 8pOnsonng acencles shall
provide proc:eclurcs to be tollowed _hen a
recipient bas taUed to comply wtth the terms
-I
A-110:15
of the grant oroLher a!;Teement and condl-
tlons or ~lAnela.rds. When tha.t occurs. the
F..oera.1 sponsorln!; &geney may. on reMon-
able no Lice t.o the recipient. suspend the
grant or other agreement. and ....ILhhold lur-
tber pa.ymenta. prohibit the recipient Irom
IDcW'rmg additional obllga.tlons at runels,
pendlnS corrective action bl' Lhe recIpient. or
a. decl$lon t.o Lermlna.Uon In accorda.nce Vo'lth
l'aragra.ph 4. The Federal spoNlorlng. acency
sha.1I &llow all necessary and .proper costs
that the recipient. could not reasonablv avoid
during tbe period at suspension provld~d tha.t.
they meet the provisions at the appllcahle
}-'ederal cost prinCiples.
4. Federnl sponsoring agencIes shall pro-
viele tor the sySl.ema.uc settlement or ter-
minated grants or other acreements lncluel-
Ing t.he tollowlng:
a. Termination for cau~e.-The Federal
Ipon80rlng "gency may reserve the right to
l.crmlna.te any gra.nt or other agreemenL In
wbole or In part. a.t. any time before the daLe
at completion, whenever It 15 del.ermlned that
the reCIpient has Ia.lled t.o comply .....Ith the
conditiOns at the agreement. TIle Federal
sponsoring a.genc}' shall promptly notHy the
reclplen~ In writing 01 the aetermlnatlon and
t.be rea.sons tor t.he termlnatLon. t.osether
wltb the effective da.t.e. Payments made to
recIpients or recoveries b~' the Federal spon-
50rng a.gencles under grants or other agree-
ments terminated lor cause :;hal1 be In ac-
cordlLnce with t.he legal rlshts and liabilities
at the pa.rt.les.
b. Tcrmin4tion for conuenic7lcC.-The Feel-
eral sponsorlns agency or reclplenL may ter-
mlna\.e gra.nts and other a.sreements In whole
or In plU"t. when both pa.rtles agree t.hat the
continuation at t.he project would not pro-
duce benedclal results commensurate wlLh
tbe turther expendlt.ure at tunds. The two
part.les shalllLgree upon the terminatiOn cnn-
dltlons. Including the enectlve date .and. In
the case at pa.rt.IIlI termlnat.lons, t.he portion
t.o be I.ermlnate<1. The recipient shall not
Incur new obllga.tLons tor the termInated por-
tion atter the effeCtlve date. and shall can-
cel as man}' outstanding obllgat.lons as pos-
sible. The Federal sponsoring agenc}' shall
&llow tull credit. to t.he recipient tor the
Federa.l sna.re ot the noncancellable obliga-
tions. properly Incurred by the recipient. prior
to l.erm In a.t.Lon,
ATrACHM%NT M.-CntCl1t.Aa No. A-110
STAKDMD TDaM TOR A.l'P1.TlNC Tal'
TC!'EIlA1. ASSISTANCE
1. Tbls att.achmenupromulgates a. stand-
a.n1 torm (51" 424) t.o be used by public and
'prlvate Inst.ltut.loDlS at higher education.
public and private hospitals and other qUB.SI-
publiC and private nonpront organizations as
a tace sheet. lor applications when llpplylns
tor Federal grants under prOgrams covered
by Put. I. Attachment. A. OMB CrlcuLar No.
A-9S. In addition. &iencles are partlculr.rly
eocouraged t.o et.xend the use or SF 424 to
common programs v."Ith State and local gov-
crnments where thLs torm Is now required by
1"MC 74-7.
2. TIle SF 424 mal' a.lso be used. on a.n op-
tional buls. to lulnll the requlrementa or
OMB Circular A-95 tor a not:l\catlon or In-
\.ent, tram applicant t.o clea.rlnghouses. thllt
1"'ecleral assistanCe ..."111 be applied lor. LoClll
or State clearInghouse procedures wUl govern
the use or the torm lor this purpose.
3. The stanelarc1 lorm will alllO be used I),'
Federal agencll!'! to report to the clearing:'
houses on major actions talcen on ,,?pllca-
tlons reviewed by clea.rlnghouses In :lcct)rel-
a.nce ....It.h OMB Circular A-95. and to notll}'
SLat.cs 01 (:rant.s-In-ald a",'areled In accorel-
..nce ....Ith Tre...,ur~' Clrcular 1082.
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:16
0...8 ....1>....... No. 2'9-ItOU'
FEDERAL ASSISTANCE
1. ~PE 0 I'REAPI'LlCATlOH
ACTION 0 'y1"L'CUIOfC
(M_'~ 0 NOTlFICA'MOft Of IKTUCT (tlpt,)
,....,.n.o.
_) n REPORT Of FtDEJW. ACTJOft
4. LEGAL APPLICAHT IRECIPIEHT
1. .....pLl.
eM.1's
APP\.~
CA TIOft
.. _BU
.. _IU
19
1. ITAn:
-'"\JOA-
nON
IDEPfTl.
1'"VI
~. DArt
ASSIGNED
r..,. .....,..
....
~. DAn
r___
19
w...
"",..A
s. ,mEAAL EMPLOYE" IOCCTtP1CATlOK 1'10.
.. ........1.."1 11.- :
~. O"."iloltiof' U.tt :
c. Slr..e/'.O. L\G& :
d. Cily : .. .....Iy :
I. SIM : I. 11' toot.:
.. IIUllltR
~. TIT\,[
I I \. I I I I
~. I:oOy<< ,_ IN.._
.. ,....,,"- No.) ..
7. TITLE AND DtSCRI/"'TION Of APPLICANT' I pROnCT
..
PRO.
CM'"
crr_
, .d...ol
0.-...,
c
a
5
I
~
!
!
i
I. TYP1:
10- Slab
8-Ioc_.1o
C:-S.1lI1a1o
DIMcl
!)-(Mal\'
t-Cltr .
f- ScaeDI Dlftlfd
~=""-
Of' .."."LIOAton' fRECI,., ENT
~....11J .10:1100 "-
.... Htf." Lltvca....... _u,,,ti_
..' J-l"chu TriM
.....o.a. IJ,..fttll':
.
S..wr .__,,","U IocUr 0
" TYP1: QI' MSISTAHCE
_ ,.... 0-....."'....
................11I ~.,
c-l.oo.
..c.r .,.".... IT]
,.n.u lec.....f.}
10. AREA Of PI'lOJe<:T IMPACT 1/01._ <If oKHu.__
S...... .....1
11. ESTlM"Te'9 lfVlII.
SER 01' nJUONS
BVlOlTING
12.. TYPE
"'-"_
__I
OF APf'l..1CA TION
c;..A.ri,loo t........_IoIl...
~1l....1I00 0
Ell'''' .P""D~. I.U....
11. p~EO
I. I'!I)!RH. I s
b. oIIPl'I.lCAIIT I
I
'UNOIH8
1-4. CONGRUstoHAL DISTRICTS 01':
I. API'UIlAHl" ... rllOlCCf
u. TYPE 0' CHAHCf IT... u. ... J~l
"-'_" lloIt,n ~_ (SIN-fv):
~__ DoIl.n
c:-l_.. 11__
~...... D...Uee
t~_II.li..
Co STATt
.00
.08
.00
~ -::.:t.} i I I I
It. EXISTI_ 'EDEAAL IDENTIFICATION HUM8EfI
d. LOCAl.
.. OllIU
I. TtlTAL S
2Q. FEDEML AGENCY TO
II. PROJECT START \17. ~JECT
o.\n: 7_ -"'" "- . DURATION
.00 l' AI_fly
.00 lL W':t'~R,.~~T'~ 7_ ~ do"
.00 I 'EDERM. ...aENCY ~ l'
RECEIVE REQUaT IJIf'_ C.... ._ ::11' ~
%1. REMARKS ADOED
n"'" 0 No
I. 10 ,,,. ~ott .. ,." U1_led.. lod ~I".
dlh i. thi. ,.....,.aiuUDft/....'uU. ....
tnrl ..4 CDf'''''. ta. doat....t .... ....
duly. ..'''nrired '" .... .__io, bDcIr 01
tt'l1 ,"Iiuflt u..1 the .DOiiultt .iN ......
..... "" .".~ ....,.... " Ute ..-..-
.n.. .. .O~.
~. N '"'!_ '" OMS Chalor Io-U _ .""'...,_ _ _Inoe. "'_'01 II i..
.tnact..... "'...... lID ..,..,.,.... ....ri........ ... .11 '.IID"'. IN ,nacAe4:
N. ,...
.-.
R__.
..c~
I. ",tD KAME AAO T1lU
~. IlllKAT\lIlt
0 0
8 0
. 0
.. DATE S IQ /ftD ,
Y_r ...--' do" .
l' 1
II)
CZI
/31
!
i ZlI. AOORES&
~
f
l
..
i
I S'I. AOMINIST""-Tlve OFFice
I zs. ",ppLICA. l'_ - ...
TION
RECEIVED l'
2&. FEDEML APPLICATION
IDENTIFlCATIOH
aG. 'EDERAL OFl:ANT
IOErfTIFlCA TlOH
31. ACTION TAKEN
u.
'UNOfNGl
7_
_&I. ....
y- ~ .."
o I. AWAAOEO
o ~. lltJ1CTEO
o .. IlCT\lllMO JIOIl
ANE/tDUUfT
~ 0 (. DtF1!lUl~
:: 0 I. W1lllDIV\WIC
I ::;'ERAL ACEH'CY
~5 AcnON
c. r!o!1W.. .00
~, Al"rUtNIf .00
c. nATt .00
~. LOOo\~ .00
., OTMlI .00
I. 'nl'TN. S .00
I,. II .011'''1 ..... ...~. .., .......... ......... ..... d.,iftr...... ..,. ....
.idOlN. II .....'" _.. I. _ ._Of ,....._ 01 ,"" I.. OWl C1tw1Of Jo,..O&.
II .... ..... 01 10 .-. _.
13. ACTIO" DAT~ ~ 19
~~ CONTM:T f~ AOOITlOI'tAL '"'ORillA.
1.01'1 (H.._ .... ...~ ...-.-1
M.
n ARTIf'IG
DATE l'
36-
[NDIHl:
OA TE 19
37. REMARKS
r....
...--' Moll
AODED
o Y.,
~. rtoERAL IlCE/tCY Io-1Ii OffiCIAL
......... ..owl .....,Nw-o ....1
No
--~.'_."-- --., ...., ....,.... , ",.., .,..
I
J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:17
SECnOM IV-REMARKS (PlccwlI referll,," tJw prvpcr item ft..m.bn- from Suti..m. I. II"". III, if G1'1I~I..)
.. "I
~T^ND^P[l ~ORM ~24 PAGE 2 (1C-7~)
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:18
GENERAL ItlSTRUcnONS
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. Fourth. it may be used. on an
optional basis. as a notification of intent from applicantS to clearinghouses. as an early initial notice that Federal
assistance is to be applied for (clearinghouse procedures will govern).
AFPUCMfl" PROCEDt;nES FOR SECTlON I
^pplicant will complete all items in Section I. If an Item is not applicable, write "NA". If additional space is needed. insert
an astarisk ...... and use the remarXs section on the beck of the tonn. /VI explanation follows 10f' each item:
Item
1. Mar!( appropriate box. Pnt-appllcatiQn and applica-
tion guidance is in FMC 74-7 and Fedentl aseney
progntm instructions. Notlficlotion of intent RUid.
ance is in Circular A-95 procc<1ures from clear.
inghouse. Applicant will not use "Report at Federal
Action" box.
2a. Applicant's own control number. If dllSlred.
2b. Date SoctIort lis prepared.
3a. Number asalgned by State clearinghouse. Of' If dele-
gated by State. by areawide clearinghouse. All re-
QUests to Fedentl agencies must contein this ldenti.
fierif the Dl"O(lram is cowred by Cin:ular A-95 and
required by applicable' State/areawide clearing-
house procedures. If in doubt, consult your deer.
inghouse~
3b. Ode applicant notlnad of c1eerinshouse Idontifier.
4e-4h. Legal name of applicant/recipient. name at primary
of1lani~tionel unit ",l1idt will undortBha the assist-
ance activity. comp:;te address of appliant. art<!
name and tOlephone number of per$Of1 who an pr0-
vide further infonnlltion about this request.
5. Employer identlnation number of applicant as as-
signed by Intamal RaYOnue Ser.tica.
6&. Use Cabllog of Fedentl Domestic: Assistance num-
ber assigned to p~m under which assistance is
nlqU~ed. If more than one program (e.g.. joint.,
funding) wnte "multiple" and explain in remarks.
If unknown. cite Public Law or U.s. Code.
6b. progntm ttue fn:xn Fedoral ~talos- AbbnMllte If
necessary.
7. Brief title and appropriate description of project..
For notification of intent. continue in remarXs sec.
tion if necessary to convey proper dascliption.
8. Mostly self-explanatory. ''City'' includes town town-
Ship or other municipality. .
9. Cheek the type(s) of assistance nlquasted. The
definitions of the tenns are:
"- Basic Grant. /VI original nlquest tor Fedensl
funds. this would not include any contribution
provided under a supplemental grant.
B. Supplemental Gntnt. ^ nlquest to increase II
besie gntnt in cer:tain cases whent the eligible
epplicant cannot supply the nlquired matchins
share of the basic Fedentl program (e.g.. gnmts
lI_rded by the f\ppalechian Regionel Commis-
sion to provide the applicant II matching $hera).
C. Loan. Self explanatory.
'tam
10.
11.
12.
13.
D. IMUntnca. Self explanetxlry.
Eo Other. Explain on ram:.rXs paga.
Governmental' unit whent ltignlJ\cant and meaning'
fuI impact could be observed. List only Iaf1lest unit
or units affected. such as Stllte. county. or city. If
antire unit aftec:tad. list it rather than subunits.
Estimllted number at persons direc:tly benefrtlng
h'om pm;ect.
Use apprvpriate code 1trttDr. Definitions are:
"- Haw. ^ submittal for the finlt time for a n_
project.
B. Renewal/VI extension for an additional funding/
budget period for II project having no projectc<1
complatlon dlrte. but for which Fadentl support
must be ran~ each year.
C. Revision. A modifiClltion to project nature or
- scope which me)' rasult i.. funding change (in-
cr-.e or decrease).
D. Continuation. /VI CllCtansion for an additional
fundil1l1l~ period for a prol<<;t the agency
initially asreacS txl fund for a definite num~r of
)"lOrs.
E./wgmonbrtion. A requirement for additional
funds for a protect p~ously awarded funds in
the same funding/budget period. PT'o;ect na,ture
and scope unchanged.
AmoUnt requested or tD be coribibuted during .the
first funding/budget period by each t:ontributClr.
Value of in.kind contributions win ~ included. If
the ec:t:ion Is a change In dollar amount of an exist.
inS gntnt (a ~ion or augmenartion). indicate
only the amount of the change. FOf' d~ses en.
dose the amount in parentheses. If both basic and
H~I amounts ara included. breakout in
remerks. For multiple proentm funding. use totals
and show pn)CT1Im br=kouts in remalies. Item deli.
nijjons: 13a. amount requested;~ Federal Goy.
emment; 13b. amount applicant will contribute;
13c. amount from State. if applicant is not a State;
13d. amount from local sovernment. if applicant is
not a local government: 13e. amount fn:xn any other
sources. expIein in remalies.
148.
14b.
Setf explanetDty.
The distJict(s) where most of actual work will be
acccmplished. If clty-wide or State-,...;de. covering
sevenll distric:ts. write Hcity.wide" or ..State.wide."
Complete only for revisions ("Item 12c). or augmen.
tlrtions (item 12e).
15.
STNH),o\RO FORM 424 PAGE 3 (10-75)
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:19
Item'
16.
17.
18.
Approximate date project expected to beFin (usually
auocillt~ with estimated dale of availability 01
hJnding).
Estimated number 01 months to complete project
atter Federal funds are available.
Estimated data preapplicatlon/appllcation will be
lubmittod to Federal agency If this project requires
cleerlnghouse rllView. If review not required, this
date would usually be ~me as date in Item 2b.
Item
19.
[xisting Federal Identification number If this II not
a new r~uestand directly relates to a pravlous
Federal action. Otherwise write "NA".
Indiane Federal agency to which thiS reqUlI$t is
addressed. Slreet address not required. but do use
ZIP.
Check appropriate ~ll as to whether Section IV 01
form conUlins remanu and/or additional ramarks
a re a ttach ad.
20.
21.
APPLICANT PROCEDURES FOR SECTION II
Ust clearinllhouse1; to which submitted and show
In appropriate bloc:~ the status of their ,,"ponsos.
FOf' more then three clearinghouses. continue In
remarXs section. All written comment: submitted
by or through clcaringhouses must be ettached.
Name and title 01 authorized representative 01 legal
applicant.
Applicants will always complete Items 23a, 23b, and 23c. If clearinghouse review Is required, Item 22b must be fully com.
pltlted. An explanlltion 101l0Wll lor each item:
Item
23b.
Self explanatory.
23c.
Self ClXplenatory.
Item
22b.
2311.
Nota:
APplicant completes only Sections I and II. Section
III is compleled by Federal agencies.
FEDERAL AGENCY PROCEDURES FOR SECTION III
24.
Executive department or Independent agency having
progntm admlnistra~jon responsibility.
Self explanatory.
Primary organizational unit below department level
having di~ program management responsibility.
Onic.c directly monitoring the progr1lm.
Use to Identity non.award actions where Fedenll
gr1lnt identifillr in item 30 Is not applicable or will
not suffice.
Complete addre:r:s 01 administering omce shown In
Item 26.
Use to identity awaro actions where dlfterent from
Fedenll application identifier In item 28.
Sclf explanatory. Use remarXs section to amplify
where appropriate.
Amount to be contributed during the first hJndingi
budget period by each contributor. Value of in.kind
contributions will be included. If the action is a
change in dollar amount of an existing gnsnt (a revi.
sion or augmentation). indicate only the amount of
change. For decreases, enclose the amount in pa.
rentheses. I! both basic and supplemental amounts
are included. breakcut in remarXs. For multip~ pro-
gram lunding. use totals and show progntm break.
outs in remarks. Item definitions: 32a. amount
awarded by Federal Government: 32b, amount ap.
plicant will contribute; 32c. amount from State, il
applicant is not a State; 32d. amount from local
government if applicant is not a Ioc:al govat'nment:
32c. amount from any othat' sources. explain in
remarks.
Dute dctlon was taken on this roquest.
Datc.lunds will become available.
If applicant.supplied information in Sections I and II needs no updating or adjustment to fit the final Federal action, the
Fedentl asency will COf'nplete Section III only. An explanation. for each Item tollows:
Item
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
Item
35.
Name and telephone no. 01 agency pe~n who can
provide more information regarding thllo assistance.
Date after which funds will no longer be lvailable.
Check appropriate box as to whether Section IV 01
form contains Federal remar~ and/or attachment
of additional remarks.
For use with A-95 ac:tion notices only. Nama and
telephone 01 pe~on who can anure that appropri.
ate A-95 action has been taken-I! same as pe~n
shown in Item 35, write "sama". If not applicable,
write "NA".
36.
37.
38.
Federal Agency Procedures-special considerations
,
A.. Treasury Circular 1082 compliance. FHentl agency will
assure proper completion of Sections I and Ill. I! SectiOil I
is being completed by Federal agency, all applicable items
must be filled in. Addresses of Stata Information Recep.
tlon Aiencies (SCIRA's) are provided by Treasury Depart.
ment to each agency. This form replaces Sf 240. which
will no longer be us.ed.
S. OMS Circular A-95 compliance. Federal agency will as.
sure proper completion of Sections I; II, and Ill. This form
is required for notifying all reviewing clearinehouses 01
major actions on 811 progr1lms reviewed under A-95.
Addresses of State and areawide clearinghouses art. pro.
vided by OM6 to each agency. Substantive differences
between applicant's reqvest and/or clearinghouse recom.
mendations. and the project lIS finally awarded will be
explained in A-95 notilications to cle;:ringhouses.
C. Special note. In most, but not 811 S.l:tes. the ,1.-95 Stat'.!
clearinghouse and the (TC 1082\ SCIRA are the same
office. I n such cases. the A-95 8wud notice to the Sta\e
clearinghouse will lultill tile TC 1082 aWllrd notice reo
quirement to the State SCIRA. Duplicate notification
should be avoided.
STANDARD mnM 42~ PAGE 4 (10-75)
I
Office of Management and Budget Circular A-110 (7/30/76)
. ATTACliMEI'lT N.-<:IRCI11.AIl No. A-110
J'RorERTT MANACEMCNT STANDARDS
I. This Attachment preser!brs uniform
sl.&n4ards g<H'ernlng manAGement of prop-
erty lurnlshea by the Federal Oo\'ernment or
",tlcse cost was charged to a project sup-
ported by a Feaer,,1 gra.l1 1. or other a~reement.
Feden,1 sponsoring aGencies shall require re-
etIIJ1ent.' to observe these standArds under
~ts and other al:Teements and sllaU not
Intp050 aaaltlonAI requirements unless spe-
cll1CAlI)' required ~y Feaeral law. TIle reelpl-
.mt may use 1105 own property mAnagement
st.AnoArds And procedures provided It observes
OM prO\'lslonso[ thiS o.ttachment. This ILt-
tachment Also AppllC3 to subreclplenl.s as
merred to In parnsmph 5 of the bulc cir-
cular.
2. The following deOnlLlons Apply for tbe
purpose o[ this attachment:
... neel property.-ti-Cl\1 .propert). melLl1s
IAnel,. including lana lInprovemenl4, struc-
tures and appurt.cnlUlces thereto, but ex-
clualng movable mAchinery And equipment.
~, Per$OnGl pr01'er'ly.-Personlll property
at. any kina except relLl property. It may be
tlmClble-havlng ph)'slcal exlsl.ence. or Intan-
g1lll1e-hAvlng no physical existence. such aa
patent&, Inventions o.na copyrights.
c. Nonezpent1eble pcr"0J\41 proper'ly.-Non-
a:pena8ble personal property means tAngible
pa'SOnal property having a useful Ille o[
raore than. one year o.nd an acqulslUon cost
oC $300 or more per unit exempt that reclp-
Ilm14 subject. to Cost A.ccounung StandarCb
BGard regulations may use the CASB sta..nd-
BCd: 01 r.500 per unit. ana welul IIle 01 two
:rears. A recipient may we Its own dednlLlon
at nonexpenaable personal propertyprovlac<1
that the de.dnlL1on would at least Include all
_Sible personal propert). a.s dellneaabove.
<1.1:zpend4ble personGI property.-Expend-
aI:lle perllOnal propertyrelers to all tangible
pcrsonal property other than nonexpena6ble
propeny.
e. 1:=e:r" propcrty.-Eltceu property meaDS
property under the control 01 any Federal
q:ency that, u deLermlDea by the head
thereot, Is no longer requlre<l lor 1\05 necGs
OS" the c1lscharge 01 Its responslbllltlCll.
t. Acquuitton cost of purchlUcd _u-
pcM411tc perSOftGl property.-Acqulsltlon coet
at aD. IUm of purchaaed none>:penc1a.ble per-
SIDG&l' property mearus the net InVOice unlt
price 01 the property Inclualng the cost 01
moalacaUons, attachments. accessories or
_xUlar)' appllJ'atU$ necessary to mILke' the
prope:-tY' usable [or the purpose lor "'blch It
....a.s acquired. Other char~e.s such a.s the cost
or Installation. transportation. t.a.xcs. duty
01' protective In-tr8nslt In6urance. shall be
lDcluded.or excluded from the unit acqulsl-
Uon cost In iLccordance with the reclplent's
refular accounting practices.
g. 1:umpt property.-Eltempt property
mealU Langlble personal propert)" aequlrea In
wtIole or In'part with Feaeral funCb, ana
Utle to which Is velltea In the recipient with-
out further obllgtltlon to the Fe<leral Oovern-
ment except a.s provided In subparasrapb 6a
turlow. Such unconditional vesting at title
",UI bepursuan't to any P'cderal legislation
that prO\'ldes the Federal sponsor1nt; agency
With Adequate authoritY'.
3. Real propcrty.-Each Federal spor:sorlng
agency shAll prescribe requlremenl.s lor re-
c:1plents coneerlllnl!' the use nnd dlSp031tlon
ot real propert). acqulrel.l partly or wholly
unde:- grants or other ngreements. Unle.'IS
otherwl:le pro\'lded b~' StAtute. such re~ulre-
mrlllS. &S. a minimum. sllall ronl.:U:: Ihe
:~1l0""1ZI, :
A. Tala to real propert~' shnll vest In the
recipient subject to the condition thl\t the
recipient shl\1l use the renl property 10r the
ll.uthorlZed purpose ot the project.' ns long as
It Is needed.
b. The recipient shall obtain approval by
the f'ederal 5ponllOrlng &4:ency for the WIe of
real property In oLher proJecl.s when tbe re-
cipient determines. that U.e property Is no
longer needed for the purpose of the ort~ll1al
project. Use In other projects shall be lImlte<1
to thOAe under oUler teeSerally sponsorea proj-
ects (I,e.. grlUlla or other -<<reementa) or pro-
grams that have .purJlOllCS consistent with
thOl'lO authorl7.ea for support by the 1'''ocIeral
sponsoring ",ency.
e. When the real property Is no 10111:er
ncedc<1 aa pro"ldeCI In A and b "bo"e, Ule
reCipient sJu.1I request dlllposltlOn Instruc~
Lions from the P'c<lerAI sponMrlnc IL/:enc)' or
IU $ucces!lOr Federal llpollsorll1(: "I:en,,)'. n,e
Federal spon~rtng agency shAll obscl"Yc the
followlns rules In the dlspoaltlon 1I1.'\.r\lC-
t1ons:
(I) The recipient may be permltL<:d to re-
Lain 1.1 tic all.er It compenslLt.c& the I"ederal
Oovernment In ..n amount compute<1 by ap.
plying tbe Federnl percentage 01 partiCipa-
tion In the cost of tbe orllrlnlLl project to the
lair market value 01 the property.
(2) The recipient may be dlrecte<1 to IIell
tile property unaer gulaellnes provldc<1 by
the Federal spoasorlng "I;ency anil pay tbe
Fe~eral Government an amount compute<1
by applytng the Pe<1eraJ percentage ot par-
ticipation In the cost 01 the orlgtnal project
to the proceeds from sale (alter dccluctlng
actual and reasonable selling &Dd llx-up es-
penses. It any. from tbe SAles proceedS).
When Lbe reelplent Is authorlr.ed or rcqulrc<1
to sell the property. proper wcs procc<1W'Cl1
sblLll be esLatlllsbe<1 that provlae lor compeU-
Uon to Lbe <:stent pracLlcable ana result lD
the highest possible return.
(3) Tbe reCipient may be alrecLe<1 to trans-
ler U tie to the property to the :Fc<1eral Go".
emment provided that. In sucb ~ the
recipient shall be enLlUc<1 to compeoaatlon
compu1oC11 by applying the reelplent's per-
centage of parUclpaUon In Lbe coat ot the
program or project to the current Iall' market
value ot the property.
4. Fecf.cI"Gl,,-oUlftClt nonc:pe'Rdelllc per"oNll
propertJ(.-nLle to lederally-owne<1 property
remains vesLets In Lbe Pc:!eral Go"crnment.
Recipients shall submlt annually an Innn-
tory IlsL1Dg 01 leelerally-owue<1 property In
their cust.ody to Lbe :Fc<1eral sponllOrlng
agency. Upon completion o[ Lbe agreemeut
or wben Lbe property Is no lonser nee<lc<1.
the recipient shall report the property to
the Feaeraf sponsoring agency lor lurther
agency utilization.
11 the Federal sponsoring seency hu no
further nee<1 for the property, It shall be
declare:! excess and rll'pOrLe<1 to the OeDeraI
Senlees A<1m1nlstrtlon, Appropriate dlspo:ol-
tlon Instructions will be lSIue<1 to the re-
cipient alter compleuon 01 the Federal
agency review.
5. 1:zemJlt propertv.-Wben statutory au-
thOrity exist&. (e.g~ P.L. 85-834. 42 U..s.C.
1892) title to nonexpendable peZ'llODaI prop-
erty acqulre:1 WIth project. lunds. Shall be
veste:! In the recipient upon acquisition un-
less It Is aetennlne<1 that to ao so Is not In
furtherance 01 the objecUves 01 the Federal
llponllOrlng agency. Wben tlUe Is veste~ In
the recipient, the recipient shall ha"e no
other obll(:aUon or accountability to the
Pederal Government for Ita use or alSposl-
Uon except u provldeCI In G8 below.
G. Other nonczpcnt1411le: propertJ(.-Wben
other nonexpen<1able tangible personal prop-
erty Is "cquired b)" a reCipient wlLb proJcct
fund!. tItle sh,,1I not bc tAken by the Fe:!-
C'r:ll Go..rrnmen: but shall "C'st In thC' J"l.'-
clplent lIubJect to thC' follo,,'lnl: conditIOns:
a. /ligh.t 10 tra""lcr title.-For Items of
nonexpcnd"ble person"l property h:avln~ ..
unit ncqulsltlon cost o[ :-1.000 or more. the
Federal sponsoring ngency may reserve the
right to trnns[er the title to the Fedcral
I
."
A-110:20
Government ur to a third party name-d bY'
the I-'cclcrRl Government when "uch t.hlrd
"arty Is otherwL~e eligible under exlsLIIlS
lI....LUtc4. Such reservation shall be subject LO
the follOWing Sl.an<larlls:
(I) Tbe propeny sl1all be appropriately
Identified In the grant or other l\creenlent
or otherwise made known to tile reCipient
In wrltln~.
(2) The f'cderaJ spolUOOrlnc ..~ency shall
ISll\le disposition. Instructions within 120 c"l-
euell\l' days after the en<1 ot the Federal 511p-
I'Ort of the project for whlcl1 It was ..cqlllred.
If tile Feder..1 "ponllOrlng allency f ails to IMue
dlspor.ltlon InsLrllctlon" within tile 120 CAI-
entl..r day perlud, the recipient ShAll Apply
tile s!.and..rels of ""Dp"ral:Taphs Gb and Gc
I\S Ilpproprlate.
(3) When the Federal sponROrlnc Agency
cxerclllCS 114 right to take title. the 'personal
property shall be 'subJect to Lhe provisions
lor federaJly-ownecl nonexpendable property
dlN:\Ia."lld In parASTllph 4. above.
(4) Whcl1 title Is transferred either to the
PeGe",1 Oo"enunent or to a thud parLy. the
provisions of IIubparagrapb OC(2) (b) ahould
be followe<1.
b. U"c of other tlUlgible: nonczpen44blc
propc:rIJl lor tDhich the: recipie:nt Itu Utle.
( I) Tbe recipient shall UIIC the property
In \.be project or program for whlcb It was
..cqulred AS'long as nee<lc<1, whether or not
the proJcct or program continues to be sup-
porte<1 by Federal funds. When no lonser
nee<1c<1 for the or1~lnal pro}ect or program.
Ule recipient. shall use tbe property In con-
nection with Its other [eelcrally IIponsorea
a.cUvltlcs, In the followlngOr<1er of priority:
(a) ACtivities. In Lbe lollowlng order 01
priority:
(b) AcLlvlUcs sponsored by oLber Feeleral
aeencles.
(2) Sharc4 uc.-Durlng tbe t.lme tbat
nonexempt nonexpendable perllOnal proper-
ty IS held lor WIC on the project. or program
[or wblcb It wa.s a.cqulrea, the recipient
sblLll make It available for uae on other proJ-
ects or progrAms II lIuch other use ....111 not
Interfere with the work on the project. or
program for ....l:llCh the property was origi-
nally aoqulrecl. First. prelerenee for such
other use shall be gl"en to other proJecta or
J'f'OjtI'8.ma aponsore<i 111 %.be P'cd eral agency
that. nnancecl the property; llecond prefer-
ence shall be gl"en to projects or pro~ams
RpOnsorc<1 by other Federal 8gencles. 11 the
property Is ownc<1 by the l"e<Ieral Govern-'
ment, use on other acUvltlcs not sponsored
by the P'c<lCTILI Government Shall be per-
missible II authorlZC<l by tbe Federal Agency.
UlICr cbarges should be co~l<1ere<1 11 &ppro-
prlate.
c. Di:rJ'O.rition of other nonczpeMebLe
propc:rty.-Wben Lbe recipient. no longer
noeds the property aa proVlde<1 In 6b above,
the property may be used tor other aCLl71-
ties In acc:or<1ance with Lbe follOwing stand.
ards :
(1) NCJfte:I:pCftd4ble property with tI ..nit
Ar.qui.:rition cod of leu then $l,OOO.-The re-
cipient may use the property lor other activi-
ties WIthout relmbuMlCment to the Pederal
Government or .sell Ute property and re-
\.aln the procee<1s.
(2) Nonc:zpcwclGllle pc:rsonel F07'crly with
tI ..nil eC'q...i.:rition co"t of SI,OOO or morc.-
The recipient may n:\.aln Ute property for
other uses prOVided 1.1'181. compensation Is
made to the original Federal sponsorlns
agency or Ita successor. The amount of com-
J>cnMtlon shall be cnmputcd by l\J'pl~'ln(:
thC' pt'rt'entAse of ~eml PlU'tlC'Ir',,:lon III
the cnst o[ the orl(:IIIAI project or pru!;rnlll t.(l
Lhe current fair mArket "alue of the. properLy.
It the recipient haa no need for the property
and Ule propcrty hRS furthcr use v..lue. the
recipient shull rr.<l\lcst dlsposlt,On Instruc-
tions [rom tbe orlgtlllLl spotulorl nc IlGenc)'.
1
Office of Management and Budget Circular A-110 (7/30/76)
The rede",1 sponsoring Rgency shall drter-
mine whether the property can be u~ed to
meet the R~ene)", requirements_ It no rl.'-
qulrement elllsl.S within th..t RsenC)', the
a....llablllty ot the property shall be report-
ed t.o the Oeneral Services AdminIStration
by the Feder..1 agenr.y to det.ermlne whether a
requirement tor the property exlal.S In other
Feder..1 "genclell. TIle Federal sponsorlnll
agency sh..lI. Issue 1n.,tructIOnft t.o the recipi-
ent no Il\ter than 120 d..ys after the reclpl-
ent's requClItl\nd the lollowlns procedures
shall govern:
(a) It ftO Instructed or II dl:o;poftlLlon In-
structions are not lft.Hled within 120 calen-
al\r anyft nIter the reCIpient-a request. tile
recipient sh..lI "ell the property Rnd reim-
burse the Feder..l "ponsorlng agency an
..mount comput.ed by appl)'lng 1.0 the s..les
proceeds the pereent..ge 01 I"ederal pRrtlcl-
patlon In the cost ot the original project or
program. However, the recipient shall be
permitted t.o deduct and relAln Irom the !"ed-
eral sh...re 1100 or ten percent 01 the pro-
ceeds. whichever II greater. lor the recipient's
selling and handling expenees,
(b) If the reCipient IS In~truct.ed to .hlp
tbe property elaewhere. the recipient shall
be reImbursed by the benentlng Federal
agency with an ..mount whIch IS computed
by appl)'lng the percentage 01 the recipient's
participatIon In the cost ot the original grant
project or program to the current lair marleet
,,&1ue ot the propert)", plus any reasonable
shipping or InteMm storage costs Incured.
(c) It the recIpient Is Instructed to other-
....Ise dlSpose ot the property. the recipient
shall be relmburled by the Feder..1 sponsor-
Ing ..sency tor such costa Incurred In 1l.S
dL,posltlon.
4. Property manapcmcnt ~tandarcU jor
nonC:,lendable prop~rty.-The recipient'.
properLY m...nagement st.andarc1s tor nonell-
pen4able personal propeny shall Include Lhe
t01l0wlng proceaural requirements:
(1) Property recorda ahall be maintained
accul'ILtely ..nd shltJllnclude;
(a) A dacrlptlOn ot the property.
(b) Manutacturer'a serial number. model
number. Fedel'&l stock number. naUon..l
st.ock number, or other Identlftcatlon num-
ber.
(c) Source ot the property. Including
grant or other agreement number.
(d) Whether tItle ..elts In the recipient or
the POec1er..1 Oov~ment.
'(e) AcqulaltloD date (or d..te Tecel"ed. It
the proper;y "'&I turnlshed by the Feder..1
Oovernroent) and cost.
(!) Percentage (..t the end ot the budget
,....r) of Fecieral p..rtlclpatlon In the cost 0:
the project or progr..m lor which the prop-
erty ..as acquired. (Not ..ppllcable to prop-
erty furnished by \be Feder..1 Oo..ernment.)
Ig) LocAtion. use and condition ot the
property ..nd the da~e the Inform..tlon wu
reported,
(h) Onlt aequlaltlon cost.
II) Ultlmate dlspOsltlon d&LA. Including
dat.e of disposal and SAles price or the method
used to determine current fair m..rket value
where .. reCipient compens..tea the Federal
sponsoring ..gency for Ita ah..r.
(2) Proper~y owned by the P'eder..1 00.-
ernment muat be marlced to Indlc..te P'ed-
.ra! ownership.
(3) A physlc..1 Inventory ot property shall
be t..ken anl1the raults reconcll.d with the
propert). recorda at least once every two
yean. An)' dlfferencea between qUAntlLles de-
termIned by the phYSical Inspection and
those sho,,"n- In the accountlns records sh..1I
be In..estlgated to determine the causes ot
the difference, The reCipient shall. In connec-
tion wlt.h the Inventor)'. verll)' the eXistence.
current utlll:l.atlon. Rnd .colltlnued need tor
the pro pert)' .
(~) A control 5y~tr.m sh..1l be In e:rect to
Insure adequl\.te .a!o;;unrds to pre\'ent 10000,
damage. or thelt ot the property, Any 10M.
damAge, or theft or nnnupendAble prop.rty
sh..1I be IJlve"tlgated And lully documented:
Ir the property wa& owned by the Tederal
Oovernment. the rerlplent shall promptly no-
Uty the Feder..1 sr"nsorlng ..gency.
(~) Adequ..tely m..lntenance procedurea
fth...1I be Implementec1 to keep the property
In good condItion.
(6) Where the recipient la authorIzed or
required to sell the property. proper "..Ies
prOCed\.re5 shAll be establllhed which would
pro..lde ror eornpeUtlon to the extent pracU-
CAble and result In the h1ghelt pos.~lble re-
turn.
7, I;;r:l'cndalllc personol propt"rtl/_-Tltle to
expendable personal property shall nIt In
the recipient upon acqulslLlon. II there 'Ia ..
resldua.lln..enl.Ory ot such property exceeding
$1,000 In 10tl\1 Aggreg..te I..lr market v..llle.
upon termination or completion 01 the grant
or other Agreement. and the property Is not
needed tor any other lederall)' sponlOred
project or progr"m. the recipient sh..1l retain
the property tor WI. on nonlederally spon-
sored actlvltl... or Mil It. hut mUllt In eltlTer
. case. compensate the Federal Oovernment
lor III ahare. The amount ot compens..tlon
shall be computed In the same manner ....
nonexpendable person...1 propert)..
8. lntanvible prOJlCf'lY.
a. lnvention. anli patent.s.~I! any prosrl\m
productlll patentable Items. p..tent rlght/l.
processes. or Inventions.. In Lhe course of
work sponsored by the POederal Oo.ernment.
lucb t"Ct Ihall be promptly and tully report-
ed to the !"ec1er..1 sponsoring agency. Onless
there IS .. prior agreement bet....een the re-
cipient and the Federal sponsoring agency
on dlSposltlon of such Items. tbe 1"eder..1
aponaoMng asenc,' shall determine whether
protection on the Invention or dIsCovery Ihl\1I
be sought. The Federal aponaorlng agency
will ..lao determine how Lhe rlgbta In the In-
..entlon or dlsCO"ery-lncludlng rlghta under
any patent llIsUed thueon_hall be allocat.ec1
anc1 a4Dllnlllered In order to protect the pub-
lic Interest comslStent with "Oo..ernment
Patent "Policy" (Presldent's 114emon.ndum
tor Heade ot Executl.e Departmenta and
Agenclea. August 23, 11171. and statement ot
Oo"emment. p..tent Policy u prlnt~ In 3Cl
F.Jl..ICl889).
b. COJlV"1VILt.s.-Except ... otberwlae pro-
vlc1ed In the terma ..nc1 conditions ot tbe
..greement. tbe author or the reCipient oTJan-
Iz..tlOn lS tree to copyrlr;ht ..ny boOles. pub-
lications. or other COPl":Olghtable m..c.-rlaJa
developed In the coune ot or under .. P-cI-
eral agreement. but the Pec1el'lLl sponaorlnc
agency shall renTYe a royltJty-tree. nonex-
clUllI"e and trrnoca.ble right to reproduce.
publlah. or otherwlSe un, and to authorl..,
otheTll to \lIe. the work 10r Go.ernment pur-
po.....
ATrAC:HMEIIT O.--CJllC:v~ )(0. A-110
rtl0CVtl8.C1U'" STAJfDAallS
1. Thu. r.ttachment pro.ldes s\andarc1a tor
use by rec:plenta In eetabllehlnt procedures
lor the procurement ot suppll... eqUIpment.
construction and other ae",lc.. wlLh 1"ederal
fUllds. These standard. an furnlahed to en-
sure th..t such maten..ls ..nd ser"ICetl ..re ob-
t..lned In ..n ellectlve manner ..nd In com-
pll..nce with the provisions ot applicable 1"ld-
eral la..' and executive orden. No ..ddltlon..1
procurement standarda or requlrementa shall
be Imposed b)' the Feden,l sponsoring agen-
cies upon reclplenta unless spec:lncally re-
quired by rederal statute or executive ordeMl.
2. The stand..rds con~alned In thlS ..tlAch-
ment do not relieve the recipient ot the con-
tractu&! responsibilIties &rIsing under Ita
contrac\a. The reclplen~ lS the re&pon~ble ..u-
thorlty. without recoune to ~he POederal spon-
sorln!: agency regRrdlns the settlement and
."U.::o.ctlon 01 ..11 eontr..ctual and RdmlnlJ,.
)
A-110:21
Lr..U... Inu_ ..rising out 01 pT<'curemenl.S
enlurd Into, In lupport or a grant or other
R!:reemrnt. Thl. Inelsd.. dl"pule.. cIRlm..,
prote.ta 01 Rward. OO\.r~ .....lu..Llon or oth.r
ml\tters 01 a eontractu..1 n..tun, )'1atte,. con-
cprnln, VIOI"tlon ot I.... Rn t(1 be referred to
s,"ch local. Stal.e or P'ederal ..uthorlty ... m..y
tla... proper )\trladlc'>>n. .
3. R.eclplents may.... Ihelr own procure.
ment policies ..nd procedure.. no....ever. all re-
cipients shall Rdherlt t.o tl\' standaraa set
lorth In p""'!l'r..phs 3 ..nd (.
... The recipient ah...1I malnt..ln Il code or
standard.~ 01 conduct th..t .hall go...rn the
perlorml\nce of It.e otlIcers, employ~ or
Acents enc"ged In the R....rdlng l\lId Rdmln-
ISl",Uon 01 eontf"l'Cts UllnS rederl\1 lund..
No employee. omeer Of' "Rent shnll partlclp..te
In the selecLlon. R"'''rc1 or "dmlnlstrlltlon ot
.. contr..ct In which !"eder..l runCl.s are lI"ed..
where. \0 his kno",lease, he or hll Immedl..te
lamlly, partne", or organization In which he
or his Immediate lamlly or partner hlL! ..
nnAn~11l1 Inleres' or ",'Ith whom he I" nego-
tl..Llng or hRa "ny ..rrangement concerning
pro~l'.ctl.,. emplo)'ment. The reelpleDts' 0(-
ncers, employ.e. or agenl.S shall nellher solic-
It nor ..ac.,.t Il'ratultlca. I..vors or Rnythlng
or monetary v..lue Irom contrRct.ors or poten-
tial contr..ctOl':s. Such .l.&ndarc1s shall pro..lde
lor disciplinary actions to be "pplled lor ..10-
l..tlons 01 sucn. .t..nc1arc1s hy the reclplenta'
omcers, employees or lLftenl.S.
b. All procurement ~an8acLlol\ll shlLll be
conducted In .. man".,. 10 provIde. to the
.m..xlmum extent practiCAl. open and tree
complttltlon. The reCIpient should be alert
to OTf:'I\nl:l\Llona.! conmeta of Int.erest or non-
oomp..tltl..e prACtices among contrRoCtors
that may resl1'1Ct or .lImJ.....te compe~ILlon
or ollberwIM restrala tra4e. In order to en-
sure ob1ecU.e contractor perfonnance and
eliminate untalr cOlftpetltlve ..d...nt.ace. con-
tracllOr. that de..elop or llratt spec:lncaUons.'
requlrementa. l'tAt.emen\lS ot work. In"Ita-
tlona lor blc1s ..nd/Of' req\lesta lor Pf'CPOS&la
should be excluded tl"Ol11 c.om.petltl!; tor !uc:b
procurementa. A_rc>> .--u be ma.cle to the"
bl4dCT/oC'eror whose bld/olfel" U rCl59On6lve
to tia'lOlIcltalllon &DCl Is I'OlCSt DCV&nt.ageoua
t.o the reclpMnt. pt"ICC ..nd ot.her locto" con-
1I4ef'ed. Sollcltatlo.s sh&1I clearly set forth
aU r<<qulrementa that ete bldc1er /otren:n- muat
tu.11\1l In order for ilia -o.d/oa:er to be e_lu-
..ted by llbe reclplen~. Any and &11 bld.s/olfers
maT be reJeoMd wben 1\ Ie In tb.e reCllptent's
Inc.-r..t to c10 110.
c. All reclpl<rnta .nail ...te.bllsh pt'OCUl'e-
ment proceOw'ft t.bat pro.ldf lor. at a mJ.D-
Imum. the follOwl~ ~ur~Tequlrementa.
(I) P'ro"pOHCI pr~ent &CtloJU shall
lollow a procoec1ure 1.0 _ure the ..YOtd&nce
ot purchMlng unn_y or ch1pllcaU..e
lloem&. Wbere a.ppropne.... ..n anal!". shall
be -oc 01 leue and pUf'du.se, lLI~n&t1,.....
110 deloennlne whldl "W'OWd be the znoet
economJcal, pr&C~~ JW~ment.
(2) 6ollclllatlona tor roode &ZId se",lcea
.hall be -b&aed "pon .. CHI"" and accur&t.e
ll.-:r1ptlOn ot llhe \eclhntcal req\Uremenl4
ler tho rnstoenal. prochlct 0\" ____lee to be
procured. Such a. d~~ ahlloll not. In
COl'ft4)eUtlye p~u.r.m.nu. con\&ln leoaLures
whiCh unduly r.tMct ~tltlon. "Brand
"a.me or equal" descrloptlOru mAY be unc1
aa .. me..n. to cloeftn. ~he performU\CM or
other _Ile"t requ-Ir......nta or a procu.rement.
..nd when 10 \I..c1 the speelnC le..tures n: tne
n..med 'DrUid wlt.1c:.h m'Uat be met by bldden/
olTer:lrs sha.ll be clea:ly .peOn~.
(31 PosltlYe elTorl.S :thall be rnMle by the
reclplen'" to ut.lllze .m..lI bualneM af\d rnJ-
nOrlLY-Owned busln... sources of supolles
and ;e",Ioes. Such elTol"\& should ..110.... lohe....
sources the m"xlmufl\ 1.....lble npportunlt"
to eo",pe"," lor con~rac\e utlll.elns hderal
runc\c.
(i) The t;"1)e or JW'OCurtn~ 11Yt.-\lmenta
u,,~od, t.I:., l'lxed price con\T..ct.!:,. ooet rtlnl-
I
J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:22
bur_ble con Lra.c.t.s. purchl\Se orders. Inun-
Live con trac\..... sh..lI ~ de\.Crnuned br U,e
rl"ClplenL buL mu:;t be ~ppn,prl&tC for the
parUO\IIl\r procuromenL ..nd for promt>lInr.
Lhe beSt In\.CrooL of WIt pro!,!ram In>"oll'ed.
The ..cosL.plw....p.ercenLal;e-ol-eosL.. meth-
od of conl.TI\GLlng shall 1I0t ~ useO.
(5) COnLrt\e\.... shill be lNl4e onl)' WIth re-
sponsible conLrn.cton who pc'_ Ule po.
tentlonlu abilIty to perform sUCCCSlfully
under I.he t.cmu ~lId conditions of a pro.
posed procurement. COn:>lder&tIOn l'luul be
given to such mAt\.Crs ..... cont.rn.ctor Int.eC;Tlty,
record of p80St pcrforrruu,ce, ftnl\lIclaJ lU,d
t.eehnlool resources or lLoCCC6.3lbllll)' LO other
neceSSArY reSOUjt"'..e5.
(G) All proposed sole source con Irlle\.... or
",'here onl)' one hid or proposaJ Is received
In ..'hiOh the ~l:rCl:nte expenditure 13 ex-
~t.cd I,() exceed 1-5,lIoo shllll be subject 1.0
prior approval al Ihe dl:>crel.l"n 01 the Fed-
er&! sponsorln~ l\l;ellcy.
(7) Some form of price or cooL IUlah-s1s
should be mn.de In connecUon wll.b e';eT)'
rroc:W'emenl. a.clJOIl, Price n.lUl.lyslS I1\I\Y be
IIoCcompllshedln \'~rlou& ,..n.}'.;, tneludlnl: tI,e
cOlnpo.rlson of prlcc quOtAlJons submitted.
mftrket prices o.nd slmllo.r Indicia, LOgether
with djf'COunt.s. ~t &nAl)'51s Is the review
r.nd evalua.Uon of CDGh elemcnt of co..:. to
det.cnNne rOQSOnableness, a lIocab III t\. and
a.llow&blllty. .
(8) ProcuTemen t records a.nd ftles for pur-
cho.ses In excess of ~IO.OOO &hall Include Ule
follo"".lI\6:
(0.) Baals for cont.ra.ctor selection:
(b) JusUlicatlon for lack of competition
,,'hcn competitive bids or olTel'& a.re not
ObtAllllllCl.;
(el B&sIs for aW1U"C1 COllt. or prlc.c.
(9) A s)"Sterm for contract a4mlnlstnl.t.lon
ahiUI be mAlntlLlnea to ensure Cllntrac1.Or
conformance with terms, condlLlons and
apeclftca Uons 0: the COD tnw:t, o.nd to ensure
lI4eqU1L~ anc1 loUnely !ollowup 0: aJ! pW'-
chua;.
-i. The recLplent shall Include. In a4l:lltlon
to provisions LO deftne a. sound anl1 Cllm.plete
. ab-'eemen.t. tbe follOWing pro1"\SIOns In ..II
CODtl'a.Ct.s. These prOYlslons shall also be ap:
plied to su boon tr\I.Ct.s.
A. Cont.n\.Ct.s In excess 0,"&10,000 shAll con.
taln cont.rae:ua.1 pro,"1slOns or conditlona
:.ha.t will . ilow lor ad.m.1nlGtratl"e, con:ra.c.
WILl ar legal I"OmC'c1Jes In Lnst.a.nces In ,."tIleh
contractors Ylola.!.e or brel\ch conl.Tact !.emu.
..nd provide lor such remedial actions as
may be a.pproprla.t.c.
b.AII contrnct.s In exces3 of "10.000 shlLll
conlln.ln . suitAble provisions for t.c:-mlnMlon
br the recipient Including the manner b"
,,'hlch termlna.t.lon ",'111 be etTect-ed And the
ba.sl.s tor settlernen.t. 1 n Addition, such con.
traet.s sha.11 descrIbe conditions under ,,'hlch
tlnn.~ (29 CFn. Part 5). Undt'r l\ectlon 103
01 the Act. encll cOlllrnclor sh:\1l be reo
qlllft"d lo (':(In'luJLc \.hf' wn~('~ <>( every 111f-
chRnlc alld Inourer 011 Ihe basis of n slllndnrc1
wurk d"~' of Po hn\l~ Iind a 1it.lulctll,rd \""urk.
week of 40 hours. Work III exc~~s of the
sLo.ndn.rd "'orkdll)' or workwer\': Il\ l'ermls.'lble
'lTo\'lded lll..l lhe worker IS cOl1lpensMcd lit a
rate or not less lhn.n"1 y, Limes lhe bRsle
r"le of pay lor all hours worl:ed ill excess
or 8 hours In n.11)' clllendl\r dRr or 40 hUllr5
In the work"'eek.' Section 107 ot Ule ACl IS
"l'I'IIClLble 1.0 ronsl.rllcUon work 11llQ provides
lhal no Inborer or mechanic 51\n.1I be reqUIred
to work In SlIrrOUlldll1!;s or IIl1der work Ill!;
("nlldtt.lnn~ "..hlch Are uJlsl\1I1Lnry. h:\7...~rdn\l~
lIT d""l~rroll~ IA. hi" henllh "lid 511/('l)" ...... dr.
h'rmlnl'd uncler' cOl1strueUon sl\/et~. alld
henllh sl.alldMdl\ prornlll~nled b~' tile Secrr-
lary of I..nbor. These requiremellt.:; du '\ot
1.1',,1)' 1.0 lll" purcllllScs 01 SIII'I'IIe5 or ",Me-
rillls or Ilrtlr.les ordinlLrlly n.vl,lllLble 011 Ille
OpCII mnrkel. or COl1trn.cts lor trlllll\porlntlon
or tr""5",11'o.~I0I1 of lntrllll.~nce.
h. ConlraC1..< or ntc\-eemen\.!;. the prlnC:lpnl
I'urpo..... of ",'hlch L.. 1.0 create. de\'elop or Im-
prove products. proeer~~es or methOds: or for
explOrl\llon Inl.O lIelds that dlrcctl~. concern
public he..lth, sa/etl' or welfn.rc: or con~r"c:tS
In I.he field of .sCIence or IcchnoloG~' .n which
~here hn.s been little .<,I:nlficant experlcnce
ol1\..~lde of work funded br Fcdernl lI.'<$ll\t-
the oont.rACI. mAl' ~ \.Cmlull\t.ed for dcflLult
.... \l,'eU a.s ooIIUlll0118 where the contra.ct nll'Y
be termJn"led b~MIl\e or olrclllflSl..nct'Ol be-
rond the ccntrol o/U,e ool1tractor.
C. In ail contracts for c:on.,t"Ictlon or fa-
elll~y Imllro\'ement a""arded lor more thnn
S.loo.OOO, re<lplenlAi shAll obs_e Ule bolld-
Ing requirements pcoY\ded II' At~.c!une..t D
to \.hIli circular.
d. All contrK1s awarded by reclplen\..~ alld
their ounl.n\Cl.OU or ~ubr.rnnteCS havll11: a
vn.lue of mo~ lhl\n $10.000. ShAll conlaln a
provision requlrU'S complIAnce ..1th Execu-
~Ive Order 11246, enLltled "Equal F~nrloy-
ment Opportunltr," as amellded br Executive
Order 11375. nnd n.s supplelnell~ed In Ocr..rt.
ITIc:nt of Lnbor r~I1IMlons (41 crn, l'lU't 60).
e. All cClI1trncts n.nd suh\:rn.nts In exccs.. 01
~:!,OOO for construction or repair aw..rded 0)'
recipients and subreclr1en1.N shnll Illclude a
provision for cornrllanee with the CopelRnd
"Antl.Klck Ba.ck" Act (18 U.~,C, 874) as
supplemented In Department of Labor
regulAtions (29 crn. I'n.rt 3), This Act pro-
"Ides thR~ each con~ractor or subgr..ntee
shall be prohibited trom IndUCing, by n.ny
means. any person employed In Lhe COI1...truc.
tlon. completiOn. or rel'alr of publiC work. to
Give up any part of the compensation to
which he Is otherwise entlWec1. The.- FeCtf1~t
sl11\1l report ,.11 suspec;ted 01' repoi'ted..IOkrt....
tlOns. to the Federal :>ponsorlllg asency. \
I. VI'hen requlrec1 by the Fedcra.l prorrrAm! ance. sl\..1I contain R notlc:e to Lhe etlect ,tha~
legislation all construction conti-actsl mntl.ers reGnrdlnG right.. 1.0 Invenl.lons I\nd
a,,'a.rded by the'reclplent.s and subrcclplent.s ,.muLerln.ls generated under I.be conuAct or
of more than '.2,000 shall InclUde a Pfovlslon I n.l:reement o.re subject 1.0 Lhe rcgulatlons ls-
for cornpllance ,..tth the Davis-Bacon Act (40 " 5ued b~' the Federn.1 5ponsorllll: n.genc}' I\lId
U.S.C. 276a, to 10-7) a.nd nos supplemenot.cd by .the recipient. Thc cOlltrllGtor 5hn.1I be ad-
nepartment' of La.bor reGulauons (29 crn. \'I::ed lIS to ,the source of nddl tlona.l Informa-
Pnrt S). Under this Act ccntractors ShR~1 be Ion rcSlLl'd.ng~hc:se matters.
required to pay_.",'a.ttes..-to laborers and me. I. All neGotiated conLrnots (except those
cha.nlca at a rate not less than the mini of :'10,000 or less) ......!\rded br recipients
....ages speclOed In a. wage determination made shall Include.. prOYISlon to the cllect that
by 'the Secretary of Labor, In Adc1ltlon, con. the recipient. the Feder&! spon.'<Or\nG IIgency,
trac:'-OrS shall be requlrec1 to par wages not the comptroller O1:neral of the UnIted Sta\.Cs.
less than once a week.. The recipient shall or any of othclr duly authorl7.cd repre~nta-
pla.ce a copy 01 :.he current prevailing ""'l:e tl..es. shall hRve accCM to an.y books. docu-
det.ermlna.Uon Issued bv the Department. ot ments. pnpers and records 01 the cOtltrn.ctor
LAbor In each soIlClt.a~lon and the award whIch lLl'e dlreCtlr pertinent tn a speclftc pro-
01 a contract sha.ll be condl.t1oned upon the grn.m for :.he purpose of makIng IIudlts.
acceptAnce 0: the waGe determination. The eXAminatIons, excerpts and I.ranscrlptlons.
reCipient shall report iUI suspected or re- J. Contract.s and sub~lln'ts of a.mount.s In
ported vlola.tlons to the FederiU sponsortng cxcess 0: 1100.000 sha.ll contain a pro,'lslon
o.l:ency. that requires the reClplenl. 1.0 Agree to com-
G. Where applicable, all conLra.cts awarded ply WI.th all applicable standlU'ds, orders or
b~' recipients In exCC9ll 01 :,2.000 for -construc. Tel:ula.lona Issued pursu~nt to the Clear A:r
tlon conotracU and In excen ot t2.500 lor Act of :\170 f42 U.S.C. 1857 et 5ec;.) snc1 the
other contracts that In...olve the emplo\'ment Federa.l Wa.tcr PolluUon Contr"l ."ct 1:!3
of mechanics or laborers, shall Incluc1e 'a pro- US.C. 1251 et seq.l I\S amended. ,\'lnlaLlon5
\'1510n for compliance ",'Ith sections 103 and ShAll be reported to the Feder..1 sP9n50rlng
107 of the Contrllct Work Hours "nd SAfety I\!tcncy and the neltlonal ..mcc 01 the 1;:0'
Standards Act r40 OS.C. 327-330) as sup- \'lronmental Protectlon Agency.
plcmenl.ed by Oepartmen.:. ot Labor regula- IFROoc.76-21904 F1lec17-29-76:8:45 amI
I
APPENDIX H
OM!
Circular A-l22
.)
..
,I
Office of Management and Budget Circular A-122 (6/27/80)
OFPlCE OF MANAGEMENT AND
BUDGET
~ar A-122, "Cost Principles for
Nonprofit Organizations"
AGENCY: Office of Managemenl and
DudCet.
ACTION: Final Policy.
lune z:;, l!JOO
To The Heads of Executive
Dcpartmcr.ts and Estnblishments
Subjf;ld: Cost principles for nonp~ont
organizations. .
1. Purpose. This Circular estaulbhes
principlilll for determining costs of
grants. contrn::ts and other agmements
wilh nonprofit organizations. It docs not
apply to colleges ar.d universities which
ure covered bv Cirr.ular A-Zr. Sin Ie.
local. alld fe'd~rillly :"ccol;n:zed Indian
tribal governm(!nts which are covered
by Circular 74-4: or hos;;i:.:ls. The
principles are desi~ned to provide that
the Federal Government bear its fair
share of costs exceot where restricted or
prohibited by law. The principles do not
attempt 10 prescribe'the extent of cost
sharing or matching on'grants, cuntracts,
or oth!::, agreemel:ts. However. such cost
sharing or matching shall not be
accomplished thr-ough arbitrary
limitations on individual cost elements
by Fedet3l agencie::. Provision for profit
ur other increment above cost is outside
the scope of this Circular.
z. Sl:persessian. This Circular
1'1Ipersedcs cost principl.i:s issue-:i by
individual agencies for non'profit .
organiza tion.
3. Applicability. a. These principles
shall be used by all .Federal aRencies in
determining the .costs of work periormed
by nonprofit organizations under gr:lnts,
cooperative agreements, cost
reimbu~ement contracts. and other
contracts in which costs are used in
pricing. administration. or se'lllp.ment.
All of these instruments are nereafter
referred to as awards. The principles do
not appl)' to awards under which an
organization is not required to account
tu the Government for actual costs
incurred.
L. All cosl reimbursement subawards
(subgranls. subcontracts. etc.) are
subi~CI to lhose Feceral cost principles
applicable to the particular organization
concerned. Thus. if a slibaward is to a
nonprofit orgonizotion. this Circular
'shall apply: if a-subaward is to a
commerciill organization. the cost
principles applicable to commercial
concerns shall apply: if a subaward is to
R college or unil'ersity. Circulur A-Zl
~hal1 an111v: if 11 ~ubilwnrd i~ 10 A Stillr..
local:or fcde"ally'recri~ized 1~lIni
tribal government. Circular 7~ sbaU
apply.
4. Definitians. a. '"Nanprofit
arcanizoiian" means any corporation.
trust. nsociation. cooperative. or olher
organizalion which (1) ili. operated
primarily'for scfentific. educational.
service. charitable. or similar purposes
in the public interellt: (2) is not
organized primarily for profit: and (3)
uses its net proceeds. to maintain,
improve. and/or expand its operations.
For this purpose. the term "nonprofit
organization" excludes (i) colleges and
universities: (ii) hospital..: (iii) State.
local. and federally recognized Indian
tribal governments: and (iv) those
nonprofit organizations which are .
e:'Ccluued from coverage of this Circular
in accordance with paragraph 5 below.
b. "Priar approval'" means secu:ing
the awarding agency's permission in
advance to'incur cost for those items
that are dc:!ignated os requiring prior
approval by the Circular. Generally this
permission will be in writing. Where an
item of cost ,,!quiring prior approval is
speciiied in the budget of an.award,
approval of Ihe budset constitutcs
approval cf t~at cost.
5. Exclusian af some nunprofit
organizations. Some nonprofit
organizations, because of their size and
nalure of operations. can be considered
to be similar to commercial. concerns fo~
purpose of applicabilily of eost
principles. Such nonprofit organiza lions
sholl operate under Federal cost
principles applicable to commercial
concerns. A listing of these
organiza lions is COD.QinedjR.
Attacbment C. Other organizaoons may
be added from time 10 time.
6. Responsibilities. Agcl1ciea
responsible for adminislering programs
that involve awards to nonprofit
organizations sball implement the
provisions of this Circular. Upon
requesL implementing inslruClion shall
be fumi.bed to the Office of
Management ll.ld Budget. Agencies &ball
designate a liaison omaalto serve as
the agency representative on matters
relating to tbe implemenlation of this
Circular. The name and title of such
representative shall be furnished to tbe
Office of Management aDd Budget
within 30 (fa"s of the date of this
Circular. .
7. Atwchments. The principles and
related policy guides are set forth in lhe
follo'wing Attachments:
Attachment A~neral Principles
Attachment B-Selected Items of Cost
Attaclunent C-NoDprofit
Organizatiol1S Not Subject \p Tbis
Circular . .
J
A-122:1
8. Requests far exceptions. The GUice
of Management 80d Budget ma~' grant
exception, 10 the requirements of \.his
Circular when permiSSible under
existing la...... However. in the interest of
achieving maximum unifomlit}',
exceptions will be pennitted only in
highly unusual circumstances.
9. Effecti~'e Date. The I1rovisions of
this Circular are effective immedialely.
Implementation sholl be phased in by
incorporaling the provisions inlo new
awards made after the start of the.
organization's next fisCal year. For
existi~ awards the new principles may
be applied if an organization aDd the
cognizant Federal agency agree. Earlier
imp-Iement:ltion. or a delay in
implemeol:ltion of individual prvrislons
i:: also permitted by mutual agreement
between an' organization and the
cognizanl Federal agency.
10. inquiries. Further information
concerning Ihis Circular may be
obtnined by contacting the Financial
Management Branch. Budget Review
Division, Office of Management and
Dudgel. Washington. D.C. 20503.
telephone (ZOZ) 395-47i3.-
James T. Mclnlyre. Jr..
Director.
ICircular No. A-1Z2)
Allachment A
Gcncral Principlcs
Tobie of Contents
A. Basic Considerations
1. Composition of lolal coste
Z. Faclors sHccting aHowabilily of costs
3. Rcasonable co.IS
4. Allocable cosls
5. Applicable credits
6. Advance understandings
B. Direcl COliS
C. Indirecl Cost,.. '
D. Allocalion of indirect CoslS and
Determination of Indirect Cosl Rales
1. Genp.ral
2. SimpliIied allocation method
3. MuUiple allocation base method
4. Direct allocation method
5. Special indirect cost rilles
E. Negotiation and Approval of Indirect Cost
Ralcs
1. DeCinitions
2. Ncgolialions and :Jppronl of rates
(Circular No. A-lZ2j
AlIachmeal A
Gcr:crlll Principles
A. Dosic Considerations.
1. Composition ortowl costs. The tolal cost
of an award is the ~um of the allowable
direct and allocable indirect CO&lS less soy
lIpplicab!e credits.
2. Foc.tors o.(fcctins clJulI'obiJily of costs.
I
Office of Management and Budget Circular A-122 (6/27/60)
To be allowable under an award. costs lnV$t
meet the following general criteria:
a. Be relllonable for the performance of the
award and be aUocable thereto under these
principles.
b. Conform 10 aay Iimilations or exclusion.
set forth in these principles or in the aWllrd
.. to I)'pe. or amoW1t of cosl.iiems.
Co Be coDsislO{l1 with policiilS and
procedures Ihol apply uniformly 10 bOlh
federally financed and olher Rctivllies of Ihe
Ortlanization.
d. De accorded consistent Ireatmcnt.
e. Be delermined in accordance wIth
pmerally accepted accounting principles.
f. Not be included as a cost or used tomeel
cosl sharing or malGhi~ requiremenls of any
other federally Iinanced program in either Ihe
arrent or !t. .prior period. , .
g.Beadequately documenred.
3. Reasunable cosJs. A cos! ill rnsonuble
if. in its nnture or amount. it:does not' exceed
tbat which would be Incurnd by .a pn:aent
person under the circumallfnCCS prevailing al
the lime the decision Wall made 10 incur the
c:osts_ The question of Ihe re:lsonableneS$.of
SJlecific costs must be scrutinized with
particular care in connecticm with
orpni:ations or separate di\;sions thereof
which reccive the prepond'erL"lce o(their
support from awards made' by Fede.rtll
agenaes.ln determining the r!8Sonableness
ot a given cost. considerlllion shall be given
I~
a. Whether lhe cost is of a Iype generally
recognized as ordinary and necessary for the
operation of Ihe organiulion or tbe
performanee of lhe award.
b. The restraints or requirements imposed
by such factors as generally accepted sound
buainess practiclls. arms length bargaining.
Federal and Stllte laws and regulations. and
lenus and conditions of Ihe award.
c. Whether the indivlda:ali-concerned acted
....nth prudence ir: Ihe circumslances.
considering their r&sponslbilities 10 Ihe
organization. its members, employees, and
cHenls. the public allarge. nnd the
Government.
d. Significarit deviations from the
established praclices of the orgJnizalion
which Mal' unjustifiably increase Ihe award
cos ts.
4. Allocable costs.
a. A cost is allocable 10 a particular cost
objective. such as a grant. project. service. or
other activity. in accordance with the relative
benefits received. A cost is allocable to a
Government award if il is treated
consistently with other costs incurred for the
same purpose in like circumstances and if i.\:
11] Is inculTed specifically for the sward.
(:!) Benefits both the award and other work
aOld can be distributed in reasonable
proporlion to the benefits received.
(3) Is necessary to the overall opera lion of
Ihe organi:z:ation, althou"h a direcI
relationship 10 any particular cost oujective
cannol be shown.
b. Any cosl allocable 10 a parlicular award
or other cost objective under these principles
mal' not be shifted 10 other Federal awards to
overcome Iundins deficiencies. or 10 avoid
restrictions imposed by law or by the lerms
of .he award.
S. Applicable crediL'.
a. The term epplicable credit, rerers \0
those receipts. or reduction of expenditures
which operate \0 orfset or reduce expanse.
items that are allocable \0 awards IS direct
or indirect costs. Typical examples of IUch
transaction. are: purchase discounts. rabates
or allowancas. recoveries or indemnities on
losses. ioslltllnce refllJ1d., and adju&lments or
overpayments or erroneous charges. To \he
elelenl Ihat .uch credits accruing or received
by Ihe o'llanizalion relale 10 allowable cost
they shall be credited \0 the Government
either as a cost rllduction or callh refund os
appropriale.
b. In some instances, Ibe amounts received
form the Federal Government 10 finance
orgAni:z:ational activities or service operations
should be trealed as applicable credits.
Specifically. the concept Clf netting such
credit items against related expenditures
should be a;:piied by Ille organizaton in
determing the rates or amounts to be
organization in determining the rates or
amaounts to be charged to Federal awords
for services Tendered whenever the facilities
or other resources used in providing such
services have been financeu direclly. in
whole or in part. by Federal funds.;
a(c] For rules cO"Oering program income
(i.e.. gross income earned from federally
supported activities) see Attachment D of
01'.413 Circular A-110.
6. Advance and understandings. Under any
given'award the reasonableness and
allocability of certain items oJ costs may be
dil'ficuit 10 detenuine. 11ris particularly true in
conDectill!~ wilh ol'fi%stioftl tha1.receive a
preponderance of their support from Federul
agencies. In -order to avoid subaequBnt
disallowance or dispule based on
unreasonlibleneu or nonallocabilitv, It is
oflen desirable 10 seek a wriileil ag~eement
with the cognizant or awarding 'allenC)i in
Hdvanee of the inculTence of special or
unusal Cosls. The ebsence of an advance
a!l"lement on aay elemenl of cosl will no I. in
itself. affect the reasonableness or
aliocabilit)" of that elemenL
a. Direct Costs
1. Direct costs are those that can be
identified specifical!y with s partiC'.1lar final
cost objoctive: i.e.. a particular award.
project. service. or other direct scti\;t}, of an
orgllniZAtion. However, a cosl mal' not be
assi~ned 10 an award as a direct cost if an\'
other cosl inculTed for Ihe same purpose. i~
like circumstance. has betm allOl".aled to on
award as an indirecl cost. Cosl identified
S~flCllII)" with awards are direct cost of the
a,,'ards and are 10 be assigned directly
lhe~e!o. Cest identified speciCicali)' with olher
final Cosl objeclives of the orgoni:z:alion are
direct costs of those cosl objectives and are
nolto be assigned 10 olher awards direclly or
indireclh'.
Z. Any'direcl cost or a minor-amount m:!}'
be trealed as an indir!!ct co51 of or reasons of
pruCticalil)' where the ac:eonnltrealmenl for
such cost is consislently applied to :Ill fin:!1
cosl objecli\'es.
3. The cosl of certain activities are not
allowable as charges IQ Fedelll awards (se!!.
rnr e>:n::lple, rund raisin!; costs in paragr:Jph
.1
A-122:2
Zl of Allachment Dj. However, even though
these costs are unallowable for purposes of
computing charges to Federal eWlIrds. they
nonetheless mu&1 he treated a8 direct cost for
pUfflo.es of determining indirect cost rales
and be allocated their share of the
organization's indirect cosls if \hey represent
aClh'illeswhich (1) include the salaries of
personnel. (Z) occupy spirce. and (3) benefit
[rom the organization's indirect costs.
4. The cosls o[ activities performed
primarily as a scrvice 10 members, clients. or
the general public when Rillnificont Ana
necessary to the organization's mission mUIII
be trealed as direct cosls when or not
ollowlIble and be allocaled an equllahle
share of indirect costs. Some examples of
these t)'pes of activities include:
1\. MlIintenunce o[ membership rolls.
subs'~.riptions. publications. ond related
[unctions.
b. I'roviding services and inrormalion 1('1
members. legislalive or administrative
bodies. or the public.
c. Promotion. lobb)'ing. ond other forms of
public relation,.
Ii. Meetings and conferences exceptlhose
held to conduclthe genera! administralion of
the orgnni;ation.
3. !\IlIintenacne. protection. and investmenl
of ~pecial funds not used in operation of the
orguni:z:alion.
[. Administration of group benefits on
behel! of members of clients including life
,and hospital insurance. annuity or reHrement
plans. financial aid. etc.
C. Indirect CosL
1. Inuirect cosls are those that have been
inc::rred lor common or joint objectives and
cannot be readily. identified with a pllrticular
Cinal wst objective. Direct c.:ast of minor
amounl:; may be trealed as indirect costs
under Ihe conditions described in pera~raph
D.z. above. After dirp-cl costs have been
determined and assil!ned direclly 10 awards
or other work as appropriate. indirect cosls
Rr! those rerr:::ining to ue allocated to
benefiting COF. objectives. A COllt mllY not be
allocated 10 an award 88 an indirect COlli if
011)" othp.l.cosl incurretl for the iam.e purpose.
in like circum.alances. .has been aSlligned to
an wv.:ard as a direct cosl. :
Z. Bp-cause of the diverse characleristica
R:ld accounting practices of nonprofil
crganizations. it is not possible 10 specify \he
trpflS of cosl which mar be classified III
inriirttct cost in all situation. How8\'er. lypiCllI
examples of indirect cost for many nonprofit
o:-ganizalions may include depreciation or
use allowance" on buildings and equipment.
Ihe cosls of operating and maintaining
f;'lcililies. and general admioiSlration aod
g!'neral expenses. sllch sa the salllJ'ieR and
eXf'Cnses of executive officers. personnel
adn:inistration. anci a~ounting.
D. AI/acatian of Indirect Cast and
Drtemlination of Indirect Cast Rutcs.
1. Ceneral.
1I. Where a nonprofit or~ani%Btion has only
one rl':l.jur runction. or w:,ere ail ils major
lunctions benefit frum its indirer:1 costs to
8pprnximatel~' the same dcgn'c. the
al1oenlion of indi:cct costs Knd Ihe
I
Office of Management and Budget Circular A-122 (6/27/80)
computationoC an indirect cost ra te IIUtf be
accomplished throullh simplified alloation
procedures as dOlcribed in parasrapb %
below.
b. Where an o~oniution ha. several major
functions which benefit from ill indirect COlt.
in verying degrees. alloca Lion oC indirect
costs may require the accumulation DC such
costs Into separale cost groupings which then
are allocated individually to benefiting
functions bv meRns oC a bose which best
measures the r'!lalive degree oC benefit, The
indirect costs &llocated to each function are
then distribuled to individual awards and
other activities included in that dunction by
means of OD indirect cost rale(s).
c. The determinotion oC what constitutes an
Ofllenization', mojor Cunctions will depend on
its purpose in bein!;: the types oC sel"'ice. it
renders to the puulic. it. clicnlll. and ill
member.: ond the llmount oC eHurt lllievotes
to such activilies os fund rolaing. puulic . -
informaLion and membership acLivities.
d. Specific methods Cor alloca Ling indirect
costs and computing indirect cost roles along
with the condilions under which each method
should be used are described in paragraphs Z
through 5 below,
e. The base period Cor the allocation oC
indired costs is the period in which such
Cosl. are incurred and accumulated for
allocation wo work performed in that period.
The base period normally should coincide
with the organization's fiscal year. but in any
evnl. shall be so selectee u to avoid
Inequities in the allocation of the costs.
2.. Simplified aJJocalion method.
a. Where an organization's major functions
benefit from its indirect costs to
approximatel)' the same eellre. the lI!1ocation
or indirect costs may be accomplished b~' (i)
separating the organization', total costs for
the bue period as either direct or indirect.
find (ii) di\'idinR tbe total allowable indirect
costs (net oC appiir'.able credits) b)' an
equitaule distribution base. The result of this
process is an indirect cost rate which is used
to distribute indirect costs to indi\'idual
awards. The rate shouid be expressed as the
percentUl1c which the total amount of
allowable indirect costs bears to the base
selected. Tnis method should alos be used
where an organization has onl)" one major
function encompasllin(! a number of
individual projecu or acth.ities. and may be
used where lhe level of Federal awards to an
organization is rellttively smalL
u. both the dirocl costs and the indirect
cests shall exclude capital expenditures and
una:lowable coslS. I iowever. unallowable
costs which represent activities must Ql!
included in the direct costs under lhe
conditions. described in paragraph B.3. above.
c. The distribution base ma)' be total direct
costs (excluding capital expenditures and
other distorting items. such lU major
subCOnlrltcts or s:JbsranIB). direct selaries
and wages. or other base which results in an
equitable distribution. The distribution base
shall generally exclude pa.tic:ipant suporl
cost., os defined in paragraph Zg of
Allar:hment B;
d, Elo;Cr.~.t where a ~I'llcia! retels) i,
rC'quired in accordance with pllragraph 0.5
below, Uae-indUect.calll Tale cS-s1oped...dar
the above pnnc;ipklsj, afV)lic:ab\e.to aU
award. at.the Ol"\lllniaa4iOa.,u a lpocial
ratels) t. raquired.apprapriate mociilic.ation.s
shall be raade in order lD develop !be special
rate(s).
3. Multiple allocation /xue DI.thad.
a. Where In orgenization', indiroct costs
benefit it, majodunctiona in varyinS desrees,
such coats shall be accumulated into seperate
cost groupings. Each grouping shall then be
allocaled individually to bcnofiUng functionl
by means of a uose which.uest measure, the
relative benefit..
b, 111e grouping, shall be e5tabUshed so as
to permil the allocation of each groupins'on
the baais of beneCit, provided toolhll major
functiona. Each SroufliJ\& should conslilute II
pool of exJien.sel that arc oC like character-in
temll of the func:tionll they henefi,' IInd in
terml uf the III1UC11liulI Ill",,: whll~1 hlllll
, measurs the relative benenll pro\'idd 10 each
function. The number of leparate groupings
should be held within practicallimils. taking
inlo consideration the materiality of the
amounts in\'olved and the degree of precision
desired.
c. Actual condilions must be taken into
account in selecting the base to be used in
allocating the expenses in !lach grouping to
beneCiling function.. When an allocation can
be made by assignment oC II cost grouping
directly to the function benefited. the
allocation sball be made in that manner.
When the expenses in a grouping are more
general in nlture. the allocalion should be
made through the use of a selected base
which produces results that are equitable to
both the Government iuld the o~anization.ln
generaL any cost element or cost related
factor aslocialed with the ol1ranization's
work is potentially adaptable for use as an
allocation base provided Ii} It can readily be
expressad In terms of dollars or other .
quantitative measures (total direct costs.
direct salarie, and ....ages. starr hours spplied.
square feet used. hours of usage. number of
documents processed. population served. and
the like) and (ii) il is common to the
benefiting lunctions during the base period.
d. Except ""here a special indirect cost
rate(s) is required in accordance with
paragrolph D.S. below. the separate groupings
of indirect costs allocated to each major
Cunctipn shall be agrel.lated and treated a8 a
common pool for that function. The costs in
the common pool shall then be distributed to
indivisual awan included In that function by
use of A single indirect cost rate.
e. The distribulion base used in computing
the indirect cost rate for each function mav
be total direct costs (excluding capital .
c::.;pendilures and other distorting ilems such
liS major subcontracts and subsrants). direct
~alaries and wages. or other ase which
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 snparate
indirect cost pool developed. The rate in each
case should be stated as the percentage
whic:h the amount oC the particular indirect
cost pool i, of the distribution base identified
I:
A-122:3
with that J'OOl
-t, Dir<<1 allocatian me1.hod.
s. Some nonprofil Ol1ranizations.treat all
coats 81 direct COStl expect general
administration and general expenses. These
organizations senerally lepsrate their costs
into thre basic categories: (i) General
administration and general expenses, (ii)
lund raising, and (iii) other direct lunctions
(including projects performed under Federal
awards), Joint cosls. such u depreciation.
rental costs. operation and maintenance of
facilities. telephone expenses, and the like
are prorated indivisually as direct cost to
eDch catesory and to each award. or other
aclivily usinS a bue most appropriale to the
particular cost being prorated.
b, This method is acceptable provided each
joint C0.8t is prorated us ins a base which
I/ccurnle)}' mel/sures the henr.filll prnvided to
cnch nwnl'll ur ulher IIcllvll\'. TIICI hllNcH 111,,"1
be established in accordance wilh resonable
criteria. and be supported by current data.
This method is compatible with the
Standards of Accounting and Financial
Reporting lor Voluntary Hel1lth and WeUl1re
Organizations issued jointly by lhe National
Health Council. Inc:.. the National Assembly
of Volunlal"\' Health and Social Welfare
OrganiutionS, and the Uniled Way oC
America.
c. Undp.r this method. indirect costs consist
eclusivel}' of gr.neral adminislration and
general expenses, In all other respects. the
organi:alion's indirect cost ratess shal be
computed in the same manner as that
described in paragraph D.Z auove.
5: Special indi:'ect cost rates. In some
instances. a single indirect cost ra Le for all '
activities of an organization or lor eact: major
funclion of lhe organization ay not be
appropriate. since it would not take into
account those differenl factors which may
substantiallv affect the indirect cosls
applicable t'O a particular segment of worl~
For this purpose. a particular segmenl of
work. For this purpose. a particular segment
of work may be that performed under a single
award or it may consist of work under a
group of awards performed in a common
environment. the lactori may inClud~ the
physical location of the work. the levll( of
Rdministrative support required. the nature oC
the facilities or order resources employed. the
scientific disciplines or technical skills
involved. the organizational arran~ements
used. or any combination thereoC. When a
particular segment of work is performed in an
environment which appears to generate a
significantly different level of indirect cosls.
provisions should be mede for a separate
indirect cost pool applicable 10 such work.
The separal.e indirect cost pool should be
developed during the course of the regular
ollocation process. and the separale indirect
cost rale resulting therefrom should be used
provided it is determined that Ii) the rate
differs significantly from lhat which would
have been oblained under paragraph D.Z. 3.
and 4 abo\'e. and (ii) the volume of work to
which the rate would apply is material.
E. Negotiation alld Approval of Indirect Cost
nates.
I
Office of Management and Budget Circular A-122 (6/27/80)
1. Definilion.. As used in Ihis seclion.lhll
following tenns havelhe meanin:;s set forth
below:
&_ '"Cognizant agcncy" menns the Federal
agency responsible for negotiating and
a pproving indirect cost rales for & nonprofit
organization on behalf of all Federal
agencies_
b. "Predetermined role" means an indirccl
cnst rate. applicable to a specificd current or
fulure period. usually the organization's nllcal
\'ear. The rate Is based on an cstimate of the
COSIS 10 be incurrcd during the period. A
p~edelermined rate is nol subject to
adjustmenL
Co "Fixed ratc" mealls an indirect cost rale
which has the sume choracteristics as a
predetermined rate. excepl that Ihe difference
between the estimaled cosls and the actual
cnsls oC the period covered b}' Ihe rule is
,carried forward as on adjuslmcnt 10 the rate
'computation of a subsequent period.
d. "Finel rate" means an indirect cost rate
applicable 10 a specified past period which is
bued on tbe sctual COlts or the period. A
final rate ia not subject to adjustment. ,
e. "Provisional rate" or billing rate means a
temporary indirect cosl rate applicable to a
specified period which is used for funding,
interim reimbursement. and reporting indirect
cllsta on awards pending Ihe establishment oC
I a rate Cor the period.
r. '1ndirect coal proposal" means Ihe
documentation prepared by an ol1!onization
10 lubslaDliate its claim for the
reimbursement oC indirect costs. This
propesai provides the basis for the review
and negotiation leading 10 the establishment
of an organization's indirect cost rate.
g. "COst objective" meens a function.
organizational subdivision. contract, grant. or
other work unit for which cost data are
desired and for which provision is mad a to
accumulale and mellSure the cost of
p:-oc:esses. projects. jobs a,nd capilali%ed
j)rojects.
Z. Negol.iotion ond Opprol'O! of rotes.
a. Unless diCCerent arrangements arc
agreed to by the egencies concerncd. the
Federall!genC)' with Ihe largest dollar value
oi awards with an organization will be
designaled as the cognizant agency for the
n~gotiation and approval or indirect cost
rates and. w~ere necessary, other rates such
as rringe benefit and compuler charge-out
rates. Once an agency is assigned cognizance
for a particular nonprofit orsanizalion. the
usigmnent will not be changed unless there
is a major long-term shiCt in the dollar volulll.ll
c! the Federal award. to the organization. All
concerned Federal agencies shall be given the
opportunity to participate in the negotiation
;lrocess. but after a rate has been agreed
1.:pon it will be accepted by all Federal
agencies. When a Federal agency hilS reason
to believe that special operating factors '
~!i~cling its awards necessitate special
l:lduect cost rales. in accordance wilh
~aragraph D.S above. it will. prior to the time
l:le rates are negotiated. notif)' the cognizant
agency.
b. A nonprofit orgonization which hilS not
;::eviously established an indirecl cost rale
with a Federal agency shall arlerthe
c~eaniution is advised that an oward will be
made and. in no event. laler than lhree
months after the effecti\'e dule of the award.
Co Orllanizations Ihat have pre\'iously
established indirect cost rates must submil a
new indirect cost proposal to the cognizant
agency within six months after the close oC
each fiscal year.
d. A predetermined rate may be negotiated
for use on awards where there is reasonable
assurance, based on past experience and
reli:lble projection of Ihe organization's costs.
that the rate is not likely to exceed a rale
ba~ed on the organization's Rctual cosls.
e. Fixed rales may be negotiated where
predetermined rates are not considered
appropriate. A fixed rate. howe\'er, sholl not
be negotiated iC (i) all or a subslllntial portion
or the organization's awards are expected to
expire before the carry-rorward odjustment
can be made: (ii) the mix or Government and
non.government work at the orsanization is
too erratic to permit an equitable carry.
forward adjustment: or (Hi) the organization's
operations Ouctuate significantly from year 10
year.
f. Provisional and final rates shall be
negotiated .where neilher predetennined nor
fixed rates are appropriate.
g. The results of eRch negotiation shall be
rOmllllized in a wrillen agreement between
Ihe cognizant agency and the nonprofil
orsanization. The cognizant agency shall
distribute copies or the agreement to all
concerned Federal agencies.
h. lC a diapute arises in a negotiation or an
indirect cost rate between the cognizant
agency and the nonprofit orsanizalion. the
dispule shall be resolved in accordance with
Ihe appeals procedures oC 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 oC Management and
Budgct will lead assistance as required 10
resolve sllch problems in a timely manner.
[Circular No. A-1Z2)
Allacnment B
Selected Items or Cost
Tobie of Contents
1. Advertising cosu
2. Bad debts
3. Bid and proposal costs (reserved) -
4, Bonding COsls
S. Communicalion costs
8. Compensation for personal services
"/. Contingenc)' provisions
a. Conlrlbutions
Ii. Dr.prcciatlon and use allowllnces
10. Donations
11. Emplo}'ee morale. health and welCan:
costs and credll.
1:' Ent~r.ainment costs
1:3. Equipment and other capital expenditure.
H. Fines and penalties '
15. Fringe benefits
15. Idle facililies and idle capncil}'
17. Independent research and developmenl
( reser\'ed)
18. Insurance and indemnificlItion
19. Intere~l. fund-raisins. and'investment
manageml:nt cosls
20. La hor relations cosls
I
A-122:4
Zl. L("55P5 on olhc~ a....ard.
::::. Maintenance and r'~pllir costs
Z3. M311:rials /VId supplieli
Z4. Meetin:;s. conferences
:!oj. Meml.erships. subscriptions. and
professional activit)' costs
:LB. Organization coslS
r7. O\'ertime. extra-pa)' shin. and mu\lishil'\
premiums
28. POise chargt's in proCessional journals
::9. Partic;irant support cosls
;](). Palenl costs
31. Pension plans
32. Plant securily c061s
'33. Preawardcosls
34. ProCessional service cosls
36. ProCits and lo.scs on disposition or
deprcciuble propcrty or other capilol
assels
;}I}. Public i~Cormation scn'ice costs
37. Publication and printing COllIs
:in. Rearrangement and alteration costs
39. Recon\'ersion costs
40. Recruiting COIU
41. Relocation costs
4:' Rcnl,al costs
43. Royalties and other costs ror ute or
patents and cnp)'rights
44. Severance pay
4S. Specialized service facilities
4B. Taxes
47. Termir.ation costs
4B. Training and cducation costs
49. Trensportation costs
50. Tra\'Il1 costs
[Circular No, A-1ZZI
Atlncbmcnl B
Selected Items of Cost
Para~aphs 1 through SO provide principles
to be applied in establishing the allowubilily
oC certain items or cosL These principlcs
apply whether a cost i. lreated as direct or
indirect. Failure to mention a particular item
oC coat il not intended to impl~' thatll is
unallowable: rather determination os 10
allowabilit}' in each cue Ihould be bued Oil
th~ treatment or principles provided for
similar or related items of coaL
1. Advertising costs. .. ' ...
&. Ad",ertiaing costs mean the COlts or .
media It'.rvices and associated costs. Medie
advertising includes magazines. newspep~.
radio and television programs. direct mail.
exhlbil&. and the like.
b. The only advertising costs allowabla are
those which lU'll solely for (i) the recruitment
of porsonnel when considered in conjunctioa
,""'1th all olher recruitment costs. 8ll set forth
in parasnph 40: ,Iii) the procurement oC goods
and services: (iiilthe disposal of surplus
mllterials acquired in the periormance or the
award except when organizations are
reimbursed for disposals al a predetermined
amount in accordance wilh Attachment N of
OMU Circular ^-110: or (h') specific
_requiremenls or the award.
to Bad dobts. Bad-debts. lncludinglO!lscs
(whether actual or estimaled) arising Crom
uncollectible accoanls and other claims.
related collection costs. and relallld legal
COIls. are unallowable.
3. Did ond propofloJ costs. (re.c~ed)
4. Dunding costs.
~,
I
Office of Management and Budget Circular A-122 (6/27/80)
a. Uonding co~ls arise when lhe
Gmremmenl requires.auurance a!lRinst
fimlnciallonlo il.self or others hy reason o(
the acl or deCault o( the oI'Rani:r:alion.l?ey,
b:ise also in inslance3 where t~e 0'llanIUl\10n
rP-quirlls similar all&uranoe. InCluded are such
bonds as bid. perCormance. payment.. ,
.duoce payment. InCringement. and CldelllY
bunos.
b. Costs oC bonding required pursuant 10
the tcrn\s oC the awanl ar.. allowahle.
Co Co~lsof bonding requlrod br the
~anizillion in the general conduct o( its
operations arc allowable to (he exlentthal
such bonding Is in accordance with sound
business practice and the roles and premiuma
II.Fe reilsonllble under the circumstances.
5. Communication OOtfU. Costs incurred for
tt:lerhone servicell. local and long distance
telephone calls. telegrams. radiolVal115.
poslage IInd the like. are allowable.
6. Compensation for pcn;onol scniccs.
a. Definition. Compenaalion for pel1lonal
services includes ,,11 compensation paid
c:um:nlly or accrued by the orgnni:ation (or
service:; oC employep.s rer-dered during the
period o( the award. (except 86 otherwise
provided in paragraph g. below). II includes.
but is not limited to. salaries. wages.
director's and executive conuniUee member's
Cees. incenth'e award... Cringe benefits.
penaion plan costs. allowance.. for oU-sile
par. inc:enlive pay. location allowances.
bcrdship pay, aDd cosl o( Ih'ing difiereDnala.
b.AIlowabiJjty. Except as otherwUe
QeCiCically provided iD this paragraph the
coats of auch compensation are allowable 10
the exlent Ihat:
(1) Total compensation to. individual
employees is reasonable Cor the services
rendered and conforms to the eSlablished
policy oC the organization conaistently
aJ;tplied to both Government and AOO-
Governmenlaclivilies: and
(Z) Charges to swards whelher trealed as
direct or indirect costs are delermint=d and
supported a\ required in this paragraph.
c. Reasonableness.
(1) Wben the organization is predominantly
engaged in acti....ities other than those
sponsored by the Govemment. compensatioD
for employees on Governmonl-&ponsored
work will be conaidered rcasonable 10 the
extent thalll ia consisteDt with thaI paid for
similar work In the organiution's other
activilies.
(Z) When the organization is predominantly
engaged in Covernment-sponsored activities
and in cases where the kind oC employees
required for the Govemment activiticsare
npt found in tbeorganizatioQ's other
aclivilies. campanaalion for cmplo)'ees on
Go\'emment-sponsorcd work will be
consideredreasonable.to the cxlenl thaI it is
comparable 10 that paid Cor similar work in
the labor markels in which the organization
competes for the kind oC employecsinvolved.
d. Special considerations in determining
o/Jowabilit}.. CerIa in conditions require
special consideration and possible Iimitalions
in dctermining costs under Fcderal awerds
where amounts or types oC compensolion
appear unreasonable. Among such conditions
are Ihe following:
(1) Compensution to members o( nonprofit
or~aniz;:tions, trustees,direc-Ion, RuociRtes.
officers. or Ihe imml.odiole fKI11i1ie. Ihereof.
Determinalion should he made thai such
compen~ation is reasonaule Cor Ihe aCluol
personal services rendered rRther thsn s
dislribulion oC esrnings in eJlcellS oC eDsts.
(Z) ^ny change in an olttollizslion's
compensation policy rn!lulting in a
subslantial increase in Ihe organiution'.
level oC compensation. particularly when it
WIlS concurrenl with an increDle in Ihe ratio
of Govemmcnt awarda 10 olher aclivities oC
the organization or any chonge io the
treolmenl ur allowsoility oC spe<:ific Iypes oC
compensaliun due 10 changes in Government
poliCY.
e. Unal/olVab/a costs. Costs which lire
unollowable under olher paragruphs of Ihis
AlIachmenl shall not be allowable under this
porograph solei)' on the basis that they
conslitule personal compensation.
f. Fringe benefl/s.
(1) Fringe benefits in the Corm or regular
compensalion paid to emplo)'ces during
periods oC authorized absences from the job.
such as vacation leave. sick leave. military
leave. and the like. are allowable provided
SUcll cosls are absorbed by all organization
activities in proportion 10 the relalive amount
of time or effort actually de....oted to each.
(2) Fringe benefils in the Corm of employer
contributions or expenses for social securil)',
emplo)'ee insurance. woncmen's
compensation insurance. pension plan costs
(see paragrapb g. below). and the like. are
allowable provided such benefits are granted
In accordance with established written
organization policies. Such benefits whether
trealed as indirect costs or as direct costs.
shall be distribuled to particular awards and
olher activities iD a maMer consistenl with
the paltem oC benefits accruing to the
individuals or group oC employees whose
salaries and wages az:e chargeable to such
awards and other ectivities.
(3)(a) Provisiolll for a reserve u."lder a self-
Insurance program (or unemployment
compensation or workmen's compensation
sre allowable 10 the extent that the
provisions represent reasonable estimales o(
the 1i3bilitieG for 50ch compensation. and the
I)'pes of coverage. extent of coverage. and
rates and premiums would have been
allowabla had insurance been purchased 10
cover the risks. However. provisiolll for self-
insured liabWties which do not become
payable Cor more than one year alter the
provision is made sball not exceed the
present value of the llability.
(b) Where an organization Collows a
cODsistenl poley oC expensing actual
payments 10, or.OD behalf 0(. employees or
'(Omler employees for unemploymenl
l:ompensation or workmen's compansation.
such.peyments are allowable in the year oC
'Payment with the prior approval oC Ihe
swardinl agency provided they are allocated
to.all activities of the organization.
(4) Cosll of insurance on the lives or
trusleoes. officen. or other employeea holding
positions of similar responsibility are
allowable only to the exlent thai the
insurance represents additional
compensation. The costs oC such insuran!=e
when the organization is named as.
.1
A-122:5
beneficiary are unallowable.
g, PeJlsion plan costs, .'
(1) Costs of the organization's pension plan
which are incurred in accordance with lhe
eSlablished policies oC the organization are
allowsble. provided:
(a) Such pulicies meet the lest oC
reasonableness:
(bl The melhods oC cost allocation are nol
discriminalory: .
Ie) The cosl assigned to each fiscal year is
determined in accordance wilh generally
accepted accounting principle~as rre~l.ribed
in Accounting I'rinciples Board Opinion No, 6
issued by the American Inslitule of Certified
Public Accountants: and
(d) The costs assigned to a,given fisca~ ye,ar
ere (unded for all plan particIpants wlthm SIX
monlhs aiter the end of thaI year. However.
increases 10 normal and pasl service pension
cosla caused by a delay in funding the
sCluarislliRbility beyond 30 days ailer each
qunrter of the year to which such cosls are
assignable are unallowable.
(2) Pension plan termination insurance
premiums paid pursuant to the Employee
Retirement income Securily Act of 1974 (Pub.
I- 93-400) are allowable. Lale pa)'mcnt
chllrges on such premiums are unallowable.
(3) Excise taxes on accumulated funding
deficiencies and olher penalties imposed
under the Employee Retirement income
Security Acl are unallowable.
h. Incentive compensation. Incentive
compensation to employees based on cost
reduclion. or efficient performance.
suggestion awards, safely awards, etc.. are
allowable 10 the extenllhalthe overall
compensation is determined 10 be reasonable
and such cosls are paid or accrued pursuant
to an agreement enlered into in good faith
belween the organization and the employees
before the services were rendered. or
pursuant to an eSlablished plan folluwed by
the organization so.consistently as 10 imply,
in effect. an sGreement to make such
payment. " ,
i. Overtime. extra pay shift. and mult/shift
premiums. See paragraph 27.
j. Severance pa}', See paragraph 44,
Ie.. Training and education oasis. See
paragraph 48. .. '\..
1. Support of solaries and wages. .
(1) Charges to awards for salarie~ and
wages. whether trealed lIS direct cosls or
indirect cosla. will be based on documented
payrolls approved by a responsible oencial(s)
of the organization. The distribution oC
salaries and wages to awards must be
supported by personnel activit)' reports as
prescribed in subparsgraph (2) below. except
when a substitute svslem has been approved
in writing by Ihe the cognizant agency, (See
paragraph E.2 oC Altachment A)
(2) Reporls reflecting the distribution oC
aclivity of each employee must be
mainlained for all sta(( members
lprofessionals and nonprofessionals) whose
compensalion is chargee, in whole or in part.
direclly to awards. In addition, in order 10
support the allocation of indirecI costs. such
reports must alao be maintained for. other
employees whose work involves Iwo or more
funcilona or aClivities if a dislribution of their
compensotion belween such functions or
nctivities is needed in Ihe determination o(
I
.1
Office of Management and Budget Circular A-122 (6/27/80)
the orgllnizalion's indirect cost rate(s) (e,g~
an employee engaged part-time in indirect
cost activilies and part-time in a direct
function). Reports maintained by nonprofit
olianization. to latilfythese requirements
must me!!t the following standards:
(a) The reports mu.t reflect an afler.lhe-
fact determination of the actual activity of
each employee. Dudget estimate. (i.e~
estimlltes determined beCore the services are
perCormed) do not qualify as support Cor
char~es to awards.
(b) Euch report must account Cor the total
activity for which employees are
compensated and which is required in
fulrillment DC their obliga\ions to the
orgllni%lltion.
(1:) The reports must be signed by the
individual employee. or by a responsible
supervisory official having first hand
knowledge oC the activities performed by the
employee. that the distribution oC activity
r!!presents a reasoneble estimate oC the
adual work perlo:med by the employee
ciuring the periods covered by the reports.
(d) The reports must be prepared at least
monthly and must coincide with one or more
pay periods.
13) Charges for the salaries and wages oC
,nonprofessional employees. in addition to the
'supporting documentation described in
subparagraphs (1) and (2) above. must also
be supported by records indicating the total
number oC hours worked each day
maintaiDed in conCor.nance with Department
of Labor regulations implementing the Fair
Labor Standards Act [29 CFR Part 516). For
this purpose. the term "nonprofessional
employee" shall have the same meaning as
"nonexempt emplo~'ee," under the Fair Labor
Slandards Act.
(4) Salaries and wages oj employees used
i!t..meeting cost sharing or matching
requirements on eWlIrds must be supported in
the same manner as salaries and wages
claimed for reimbursement from awarding
agencies.
7. Conlingency provisions. Conlributions to
a contingency reserve or sny similar
provision made for events the occurrence of
which cannot be feretold with certainty 85 to
Urn'!. intensity. or with an assurance oj their
hoppening. are unallowable. The term
"contingency reserve" excludes self.
insurance reserves (ree paragraph 6.f.(3) and
lG.a.(2)(dll: pension funda (see paragraph
6~(gn; and reserves for normal severance pay
[see paragraph 44.(b)(l).
6. Contributions. Contributions and
donations by the organization to others are
cnailowable.
9. Deprecioiion ond use allowonces.
a. Compensation for the use.of buildings.
other capital imprclYements, and equipment
t::O: ;':Ina may be made through use
alinwan::es or depreCiation. Ho\"ever. except
as pmvided in paragraph C. below a
cOlTlui:lalion of the two methods ma\' nol be
l;sed in connection with a sin~le cla~s of
!hcd lIs~ets (e.g.. buildings. omce equipment.
ct'mputer equipmenl. etc.).
b. The compc!a!ion of use allowances or
";~prf'ciati(ln shall be based on the
;,c'luisition cost of the assets involved. The
u:,:ct.::silion cosl of an IIsset ca:o:aled to the
or!!anizalicn by a third party shall be lis lair
markel value at the time of the dona lion.
c. The computation of use allowances or
depreciation will exclude.
(1) The cost of land:
(2) Any portion of the cost of buildings and
equipment borne by or dona led by the
Federal Government irrespective of where
tille was orillinally vested or where it
presently resides: and
(3) Any porti"n of the cost of buildings and
equipment cO!ltributed b}' or for Ihe
Ofltamzatiun in salisfllclion a! a statutol1'
matching retirement.
d. Where the use allowance method i.
followed. the u.e allownnce for buildings and
improvement (including land improvements
such 88 Pllved l'arking sreas. fences. and
sidllwlllks) will be computed at an annual
rule not exceeding two percent oC acquisition
cost. The use allowance for equipment will
be compuled at an annual rate not exceeding
six and two-thirds percent of ncquisilion cost.
When the use allowance method' ill used for
buildings. the entire building must be treated
as a single asset: tile building's conlponenta
(e.g. plumbing system. heating and air
conditioning. etc.) cannot be segrelluted from
the building's shell. The two percent
limitation. howev-.r. need not be applied to
equipment which is merely attached or
fastened to the building but not pl'rmanently
fixed to it and which i. used as furnishings or
decorations .or lor specialized purposes [e.s~
dentist chairs and dental treatment units.
counters. laboratory benches bolted to tha
fluor, dishwashers. carpeting. etc.). Such
equipment will be considered as not being
permanently fixed to the buihiing if it can be
removed without the need for costh' or
extensive alterations or repa.i:-s to the
building or the equipment. Equi~mentlhat
meets these criteria will be subject to the six
and two-thirdt percent equipmenl use
allowance limitation.
e. Where depreciation method is followed.
the period of useful service (useful life)
established in each case for usable capital
assets must take into consideration such
factors as type of construction. nattlre of the
equipment used. technological developments
in the particular program area. and the
renewal and replacement policies followed
for the the individual ilems or classes of
assets involv!!d. The method of depreciation
used to assign the cost of an asset (or group
of assets) to accounting periods shall reDect
the pattern of consumplion of the &lIset
during its useCulliCe. In the absence of clear
evidence indicating thatlhe expected
consumption of the asset will be significantly
greater or lesser in the early portions of ils
useful liCe than in the later portions. the
straight-line method shall be presumed 10 be
the appropriate method. Depreciation
methods once used shall nol be changed
unless approved in advance by the co~iUJnI
Fec.leralllllcncy, When the depreciation
method is introduced Cor application to assets
previously subject to a \Ise allowance. the
c(lmbinlltion of usc alrowances and
cicprecial.on applicable to such assets must
not exceed the total acquisition cost oC the
assets. "'.'hen the depreciation method is useu
I"f huildins::s. a buildil1l(s shell mny ue
A-122:6
sl'gregnlcd Irom esch building component
(e.!:.. ph:mbin~ system. healing, and sir
cunditioning !)'stem. etc,) and each item
dcpreciated over ill estima'ed useful life; Dr
the enlire building (i.e.. the shell and all
cumponents) may be lreated as a single asset
and depreciated over a single useful life.
f. When the depreciation method is used
for a particular class of auets, no
depreciation msy be allowed on any such
asr.ets that. under parasraph e. above, would
he viewed 85 Cully depreciated. However. n
rellsonHule use allowance may be negolinled
for such S&8ets if warranted after laking into
consideration the amount of depreciation
previously char(:ed 10 the Government, the
estimated useCullife remaining at time of
nr.!:olilllion. the effect of any incressed
mnintenaor:e charges or decreased efficiency
due 10 sge, and any other factors pertinent to
.the uliliution of the osset for the purpose
contemplated.
g. Charges for use allowances or
depreciation must be supported by adequate
property rccords and ph)'siCllI inventories
must be taken at least once every t\'\lO years
[a stalillical sampling basis is acceptable) to
ensure that assets exist and are usablc and
needeu. When the depreciation method is
followr.d. adequate delJreciation records
indicating the amount of depreciolion taken
cllch period must also be maintained.
10. Donations
a. Scn'ices received.
(1) Ounaled or volunteer serviccs may be
furnished to an organiution by proCessional
and technical personnel. consultanls. and
other skilled and unskilled labor. The value
of these'services is not rcimbursable eithllr as
a direct or indirect c.'Ost.
(;:J The value of donated services utilized
in the performance of a dir!!ct cost activily
shall be considered in the determinalion of
the organiution's indirect cost rate(s) and.
accordingly. shllH bll allocllted a
proportion'll! share uf applicable indirect
COSIS when the lollowing circumstances exist:
[II) "he ags~egate \'alue of the services is
malerilll;
[bl The services are supported b~'ll
sillnifir.ant amn\ml or Ihe irvlirect costs. _ '
incurred by the org:mizalion:
Ic) The dirl!ct cost activily is not pursued
prinlllrily for the bcnefit of the Federal
GU\'f,mmant.
[:II In those illstancl:S where there is no
,basis for determining the fair market value of
the services rendered, the rccipient lInd the
co!;!niUlnt agene)' shall negotiate an
Appropriate aiioc::tion of indirect cost to the
ser,'ices.
(4) Where donated ~ervices directly benefit
a l=roject supported br an award. the indirect
costs allocatcd to the scrvices ",HI be
considered as a part of the total cost& of the
project. Such indirect costs rna}' be
reimbursed under the award or used to meet
cust sharing or matching requirements.
[S) The vlIlue o! t!'le donated servicc:s may
bl~ uSl:d to mect cost sharing or matching
rllquirements under conditions d~scribed in
1'.II:1chment E. OMB Circular No. A-110.
\\'here dona led services are treated as
innirecl ceslS. indirect cost rates will
Sl!p:lrat~ the value of the donnliuns so that
I
Management and Budget Circular A-122 (6/27/80)
snl will not be made.
arket value of donated services
I"puteci as follows:
ror 'IttIiunteer services. Rates for
ban be consistent wilh those
t paidllor similar work in other
,tbetil.lllanizalion.ln cases where
skiBa inYOlved are not found in
livilia of the organi:.ation. the
balt be consistent witb those paid
~ork in the labor market in which
I,ioll competes for such skills.
rJS aQr.u:rtcd by other
rs. When an emplo)'er donates
I of _ employee. these services
ed at the emplo)'ee's regular rate
sive- al fringe benefits and
8} pnIIricied the services arc in
II femwRich the employee is
'd. If tb services are, not in the
w~ the employee is normally
ketvala shall be computed in
with. subparagraph la) auove.
nt/. sptIIC& .
gaacIis; i.e~ expendable
peft'ytRPplies. and donated use
_ befumisbed to an organization.
. the pods and space is not
e either as a direct or indirect
lut! aCthe donations may be used
shariD& or matching share.
s un~tbe conditions described
nt E. 0Ml8 Circular No. A-110.
tbe "'Iions shall be
In IlCCllIl"Ciance with Allachment
a.Iicns are treated as indirect
coat rates will separate th,
'OOnaNllU so that reimbursement
aelL
eetl7Q~ bealth, and welfare,
ed.'~ The costs of house
health or flI'St-aid clinics. andl
s; recreational activities.
ouaseimg services. and other
ul'l'lKf in accordance with the
's e&tabIished practice or custom
\'emm1 of working conditions,
piol'ee relations. employee
:employee performance are
ch Cl:ISls will be equitably
'.10 all activities of the
. Incmme generatp.d from an)' of
iel' will be credited to the cost
s __ income has been
set QlWG to employet' weUare '
s. .
irrmtmt costs. Costs of
..diversion. social activities.
i amt CI:l5ts relating thereto. sucl.
aging; rentals. transportation. and
unallowable (but see
11. ami %5).
ent and other capit 01
in this parngraph. the following
the.mt:~ninlU ~UQrth below:
menl" means an article of
ble tangible personal property
eful life of more than two vears
isition cosl of 5500 or more per
ninuon mn\' use its own
ided that ii at least includes all
bier tangible personal property IU
in,
(Z)'"Acqui!ition cost" means the net
invoice unit price of an item of equipment.
including lhe 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 laxes. duty. prolective in-
transit insurance. freight. and inslaUalion
shall be included in or excluded from
acquisition cost in accordance with the
organization's regular written accounting
practicell.
(3) "Special purpose equip"lenl" menns
equipmcnt which is usable only for research.
medical. scienlific. or technical activities.
Examples of speCial purpose equipment
include microscopes, x-ra}' machines, surgical
instruments. and spectrometers.
(4) "General purpose equipment" means
equipment which is usable for other lhan
research. medical. scientific. or technical
activilies. whether or not special
modifications are needed to make them
suitable for a particular purpose. Examples o(
general purpose equipment include office
equipment and furnishings, air conditioning
equipment. reproduction and printing
equipment. motor vehicles. and automalic
dala processing equipment.
b. (1) Capital expendilures for general
purpose equipment are unallowable as a
direct cost except with the prior approval of
the awarding agency.
(2) Capital expenditures for special purpose
equipment are allowable as direct costs
provided that items with a unit cost of $1000
or more have the prior approval of the
awarding agency.
c. Capital expenditures (or land or
buildings are unallowable as a direct cosl
except with the prior approval of the
awarding agen(;)'.
d. Capital expenditures for improvements
to land. bl:ildings. or equipment w.hich
materially increase their value or useful life
are unallowable as a direct cost except with
the prior approval of the awarding agency.
e. Equipment and other capital
expenditures are unallowable as indirect
costs. However. see paragraph 9 for
allowabilit}' o( use allowances or
depreciation on buildings. capital
improvements. and equipment. Also. see
paragra~h 42 for allowability of rental costs
for land. buildings. and equipment.
14. Fines and penalties. Costs of fines and
penalties resulling from violations 0(. or
(ailure of the organization to col1!ply with
Federal. State. and local laws and resulations
are unallowable except when incurred 88 a
result of compliance with specific provisions
of an award or instructions in wriling from
the awarding agency. .
15. Fringe benefits. See paragraph 6. f.
16. Idle facilities and idle capaci(v.
a. As used in this paragraph the following
terms hnve the meanings set forth below:
(1) "Facilities" means land and buildings or
any po:,tion thereof. equipment indh'idually
or collcctively, or an}' other tangible capital
asset. whcrever located. and whether owned
or Ip.ased b}' the oreanization.
(:!) "Idle facilities" means completelv
ul1l1~d facilities Iha: are e'tcess to the
orsaniz.alion's current needs.
(3; "'die c!lt'ncity" meons the ur1ur.ed
I
A-122:7
capacity of parlially used facilities. It is the
difference between that which a facility
could achieve under roo per cent operacing
time on a one-shift basis less operating
interruptions resulting from time lost for
repairs. .etups. unsatisfactory materials. and
othr.r normal delays. and the extent to which
the facility was actually used lQ meet
uem:Jnds during the accountinll period. A
mullishift basis may be used if it can be
shown that this amount. oI usage could
normall}' be expected for the t~'Pe of facility
involved.
(4) "Costs of idle IaeJliLies or idle capacity"
menns costll such B.8 DlsintenanCI!. repair.
housing. renl. and other relaled cosls; e.g..
propert)' laxes. insurance. and deprecilition
or use ollowances.
b. The costs oI idle facilil.ies are
UnAllowable exceplto lhe extent tbOll:
(1) They are unnecesllary to melll
nuctuations in workload: or
(2) Alth"ugh not necess:Jry to meet
nactuations in workload. they were
nr.cessary when acquired and arc now idle
because of changes in program requirementa.
efforts to achieve more economical
operations. reorganiZ:Jlion. termination. or
olher causes which could not have been
reasonably foreseen. Under the exception
stated in tbis subparagraph. cosls of idle
facilities arc allowable for a reasonable
period of time. ordinarily nolto exc~ed one
year. dllpending upon the initiative taken to
use. lease. or dispose of such facilities (but
see paragrllphs 47.b. and d.).
c. The costs o( idle capacity are normal
costs of doing business and ore a factor in the
normal fluctuations of usage cr. indirect cost
rates from period to period. Such costs are
allowltble. provided the capacity i.
reasonably anticipated to be necessary or
WBlI origi.'lally reasonable and is sl:bject to
reduction or elimination by subletting.
renting. or sale. in accordance with sound
business. economics. or security practices.
WidespreRd idle capacity throughout an
entire facility or among a group of assets
having substantially the same function may
be idle !acili ties. .
17. l'lrl~;,~ndcnl rescCl{Ch alld dcv~lopment
IReserv"d\. .
]8. Insurance and indemnification. }
a. Insurance includes insurance which the
organization is required to carry. 0. which is
approved. under the terms of the .:ward and
any other insurance which the organization
maintain. in connection with the (leneral
conduct of ils operations. ThiD paral!!raph
does not apply to insurance which represents
fringe benpfits for emr10yees [!:I!e pa~aliraph
6.f. and 6.8.(2)).
(1) Costs oi ini:J~ance ~~quired or
ar-proved. and maintained. purSuilntto the
award are allowable.
(:!) Costs of other inSllrance mllin:sined b"
the org.mization in connectinn with the .
{!~neral conduct of its operations are
allowable subject to the followinglimitalions.
(a) Typ'!s and exlent of coverage shall be
in accordance with SOl.nd business practice
and the Tlltes and premiums shall be
Tus"nRble uncC!T the cir::umstances.
(hI Cr.st~ RlIowed for bus,iness interruption
or other similar insurance shRll be li~jtcd 10
I
Office of Management and Budget Circular A-122 (6/27/80)
ner.ntialion Dnd in ilnticipiltinn of Ih~ "ward
whl!It' suc.h costs is neccsSllry 10 comply wilh
:he proilosed delivery schedule or period of
I,erlormancc. Such cosls Rre allowalllc only
tu :he e:o<lcnl Ihallhey would have been
lOilllwsble if incurrcd aCter Ihe dAtr. of Ihe
cWl,mllOnd only wilh Ihe writtl'n 8i'provlI1 r:f
Ihe .awilrdins ngen~y.
:14, }Jrnfcssional sen'icc costs.
a. CoslS of profl't:sionnl illld consullnnl
services renclereJ by persons who are
r.:"",lters of R pllrlicular profe~siun or po~~es8
u slInl:;;'! skill. anJ who arc not ofncers ur
l'~;liuyeesof the orgbnizolion. arc a!lowable.
s~bjecllo \.s. c. and d. of lhis pllragr3ph when
rp.tlSlllOa\.sle .in r'~llllion ,to the serviCp.5
rcndercd IInd when not conlingent upon
rel:over" of Ihe cosls from Ih~ Go\'ernmcnl.
b. tn del::rming Ihe allowil\.silily of r.osls in
II parlicular case. nu single fllclor or any
specilll combination of faclors is necessaril)'
delerminllli\'e. However. Ihe following
filclurs are relevanl:
(1) The nalure and scope of the service
reJIIlered in relation 10 !he service required.
(Zl Th~ necesllily of conlracLing for Ihl!
s~r,..ice. cnnsidering Ihe organiz:alion's
clIpahilily in Lhe parLicular area.
(:!) The past pattern of such costs.
particularly in the years prior 10 Go,..~mmclll
awnrds.
(4) The impacl of Governmenl awuds on
lill: organizalion's business (i.e.. what new
prohlems have arisen).
(51 Whether the proportion of Governmenl
work to the organization's totaluusiness is
such as 10 innuence the organization in favor
of incurring the cosI. particularly where !he
services rendered are not of a conlinuing
nature and have liltle relationship to work
under Government grants and contructs,
(6) Whether the service can be performed
more economically by direct emplo}'menl
ralher !han contracling.
(7) The qUlllificalions of the individual or
concern rendering the service and lhe
custOlrU'lry fees charged. especially on non-
Governmenl awards.
(01 Adequacy of the contraclual agreement
for the service (e.g" description of Ihe service.
estimate of lime required. rale of
compen~alion. and termination provisions).
c. In lIddilion 10 Ihe faclors in paraSf3ph b
abo\'e. retainer fees to the allowable musl be
snpported by evidence of bona fide services
available or rendered.
d. Cosl of legld. accounlin~. and consulting
~er\'ices, and relaled costs incurred in
conn"!ction wilh defense of antitrust suilS'..
and Ihe prosecution of claj.:ns BRainsllhe
Government. arc ullllllowRble. Costs of legal.
Rc:::uunting lInd consulting services. snd
rclaled cosls. inculTed in connection wilh
flalent il1frillg'!ment Iiligation. organization
and reorgnnization, are unallowable unless
otherwise prcwided f~ in Ihe award (bul see
parR~raph 47cl,
35. Profits and losses on disposition of
depreciable properry or other capital assets.
a. (1) Gains and 10R~l's on sale. retiremenl.
or olher disposition uf ci~preciable properly
shi:ll be inc111rled in the year in ......hich they
oc;cur as cred;!~ or charges to cost grouping(a)
in which Ihe depreciation applicable 10 such
property was included. The amount :f Ihe
!lldn or Ion 10 be inr.luded as s credit ur
c!li.r):e 10 the appropriale cost !!rlluflinll(S]
sll,,:l lie the diliercnce uetwcen Ihe amounl
ft'iilized on the property and Ihe
umleprecialed basis of Ihe property.
(Z) GOIins and 10Sles on Ihe disposilion of
clef.reciable propert}' shall not be recognized
nil It separate credit or charge under the
fnBuwing conditions.
I") The llnin or loss is processed through 10
ucprecialiun reserve account aud is T<:neeted
ill Ihe Jepreciation lI110wauie under
pnro):ropll 9.
(ll) The flroflerly is given in exchan!:c as
pari of Ihe purchase price of a similar ilem
and the gHin or loss is IlIken into ilccounl in
dr.\enlliniuglhe depreciation cosl basis or Ihe
new item.
(c) A 1058 rellulls from Ihe fuilure 10
mainlain permissible insurance. excepl nl
olhl!rwisc proNided in paragraph 16.a.(3).
(d) Compensation for Ihe use of the
property was pro\'ided through use
allowances in lieu of deprecialion in
accordnnce wilh paragrllph 9.
(e) Cnins and losses arising from mass or
extraordinar\' sales. relirements. or olher
dispositions shall be considered on a case-
u\,.c811e basis.
'b. GlIins or losses of any nalure arisine
from the sale or exchange of property other
than !he property covered in paragraph a.
above shall be excluded in computing award-
costs.
36. Public infarmatiun sert'ice casts.
a. Public information service costs include
!he cost associaled'with pamphlels. news
releu8$, and olher forms of informalion
services. Suc:b costs. are normally incurred to:
(1) Infurm or Inslruct individuals. groups. or
the general public.
(2) Interest individuals or groups in
parlicipating in a scr/ice program of !he
olganiution.
(3) Disseminate Ihe results of sponsored
and nonsponsored activities.
b. Public info:mation service costs are
allowable as direct costs with Ihe prior
a;)proval of !h'" awardinG al.lenC}'. Such costs
are unallowable as indirect cosls.
37. Publication and printing costs.
a. Publica lion costs include the cosu of
printing (includi:lg the prnces.es 'Of
composition. plate-making. press work.
binding. and !he end products produced by
such processes). distribulion. promolion.
maiJing. and general handling.
b. If thelle costs 1Irt'! not idanlifjable wilh a
particular"Qst objective. Ihey should be
allocated as indirect costs to all benr.filing
activilies of lhe organization.
c. Publication and printing Cosls are
unuilowable as direct costs except wilh Ihe
priur approval of the awarding agency.
d. The cosl of page charges in journals is
addressed pllragraph 28.
38. /i.earrangement. and alteration costs.
Costs incurred for ordinary or nonnal
rearrangemenl and alteration of facilities are
alluwable. Special ~lTengemenl and
alteration costs incurred specifically for the
project are allowable wilh the prior approval
of the awarding IIgeney.
39. Reconversion costs. Costs incurred in
the reatoration or n:habtlltation of the
organization's fadlltiell to approximately the
I
A-122:9
88me condition existing immedialely prior to
commencement of Government awards. flOiT
wear and lear excepted. are allo.....able.
40, Recruiting casc.s. The following
recruiting costs arc allowllblr.: cosl of "help
wanled" advertising. operating costs of an
employmenl office, coats of operating an
eduClllionalleating program. Iravel expenses
including food and lodging of employees
while ensaged in recruiting penonnel. travel'
costs of appliCllntl for iDlerviews for
flrospective employment. and reluc3tion COSIS
incurred iucident to rccruilment of new
employees (~ee parograph 41c). Where Ihe
organizalion uses employment agencies,
costs nol in exCCIS of standord commercial
rates lor such services are allownble.
41. Relocation caslll.
a, Relocation costs ore COSI! incident to the
permanent change of dUly assiWlmcnt (for an
indefinite period or for a sloled period of not
less than 12 montbs) of an exi,lIling employce
or upon recruitmenl of a new employee.
Relocation costs ore allowuble. subjecl 10 the
limitalion de:scribcd In parographs b. Co and d.
below, provided !hot:
(1) The move Is for Ihe benefit of the
employer.
(Z) Reimbursement to Ihe employee is in
occordance with on estalllished written
policy consistently followed by the employer.
(3) The reimbunement docs not exceed !he
employee's actual (or reasonably estimated)
expenses.
b. Allowable relocation cosls for currenl
employees are limiled to !he following:
(1) Thecosls of transportation of the
employee. members of his immediale familr
nnd his houserold. and personal effects to the
new location.
(Z) The CoslS of finding a new home. such
as advance trips by employees and spouses
to locate living quarters and lemporary
lod~ing during the transition period. up 10 a
maximum period of 30 days. including
advance lrip lime. ,
(3) Closing cosls. such as brokerage. legal.
and appraisal lees. incidenllo the disposition
of !he employee's former nome. These cosls.
together with toose described in (4) below.
are limil~d to 8 per cenl of the'sales price of
!he employee's IllrmqJ' bome. '.
(4) The continuing cosls of OWDership of
Ihe vacant former home after the seltlemenl
or lease dale of !he employee's Dew
permanenl home. such as maintenance of
buildings and grounda (exclusive of rlXing up
expenses). utilities. laxes. and propert}'
inaurance.
(5) Other necessary and reasonable
expenses nonnaliy incidenl to relocation.
such as the coats of cancelling an unexpired
lease. disconnecling and reinstalling
household appliances. aDd put'ci1l1Sing
insurance a8ain8t 105& of or damages to
personal property. The cost of cancelling an
unu:pired leaM il limited to threa times !he
monthl" rental.
e. Allowable relocation costs lor new
employees are limiled to those ducribed in
(1) and (Z) of paragraph b. above. When
relocalion costs incurred iDcidenl to lbe
recruiunent of new employee. have beeD
allowed eilher G.8 a direct or iRdirecl co.t aDd
!he employee roeigns for reaaons within nil
I
Office of Management and Budget Circular A-122 (6/27/80)
control within 12 months aIter hire. the
organization shall relund or credit the
Government lor its share ol tbe cost.
However, the costs ol travel to an overse,as
location shall be considered travel costs In
accordance with paragraph so and not
relocation costs for the purpose ol this
paragraph Ii dependents are not permitted at
the location for any reason Bnd the costs do
not include costs of transporting household
goods. ,
d. The following costs related 10 relocation
Bre unallowable:
(1) Fees and oilinr costs associpted with
acquiring a new home.
(2) A loss on the snle of a Cormer home.
(3) Continuing mortgAge principal and
interest payments on a home being sold.
(4) Income taxes pnid by 6n employee
relaled to reimbursed relocntion cosls.
42. Rental costs.
a. Subject to the limitations described in
parasraphs b. through d. of this paragraph.
rental casts are allowable to the extent that
Ihe rates are reasonable in light of such
Cactors as: rental costs of comparable
p:opert~'. if an~': market conditions in the
area: allernatives Rvailable: 'and the t~'pe. life
expectancy. condition, and value of the
property leased.
b. Rental costs under sale and leaseback
alTangements are allowable only up to tbe
amount that would be allowed had the
organizDtion continued 10 own the property.
Co Rental cosu under less-than-length
leases are allowable only up to the amount
that wouJd be allowed had tille to the
property vested in the organization. For this
purpose. a less-than-anns-Iength lease is one
under which one party to the lease agreement
is able to control or substantially infiuence
the actions of the other. Suc:l:Ileases include,
but are not limited to those between (i)
dh'isions of an organiza lion: (ii) orgoniza tions
under c:ommon control througb common
officers, directors. or members: and (iii) an
organization Rnd a director. truslee. officer.
or kay p.mployee of the organization or his
immediate family either dlrectly or through
corpnrations. tNSla. or similar arrangements
in which they hold a controlling interest.
d. Rental costs under leases which create a
material equity in the leased rrop~J"ly are
allowable only up 10 the amount that would
be a!lowed had the orsanizitiun pw'ch:!scd
the property on the d:!te the lease agreement
was executed: e.g., dep:-eciation or use
allowances. maintenance. taxes. insurance
but excluding interest e:ltpense and otllar
unallowable costs. For this purpose. a
material equity in the pro pert)' exists if the
iease in noncancelable or is cancelable only
upon the occulTence oC SOnle remote
contingency and has one ormore oC the
iollowing characteristics: '
(1) The organization h:!s the right to
purchase the property Cor a price which at the
beginning of the lease appears 10 be
substantially less than Ihe probable Cair
market value at the time it is permilledlo
purchase the property (commonlv called a
lease with a bargain purchase option):
(Z) Tille to the property paslles to the
organization at some lime during or afler the
iuse period:
(3) The term of the lease (initial term plus
periods covered by bargain renewal oplions.
If any) is equal to 75 per cent or more oC the
economic life of the leased propert}": i.e.. the
period the property Is expected to be
economicall)' usable by one or more users.
43 ,loyalties and other costs far use of
pal ..~ and copyrights.
a.l ,yahies on a patent or copyright or
amortization of the costoC acquiring by
purchase a copyright. palent, or rights
thereto. necessary Cor the proper performance
of the aWRrd are allowable unless:
(1) The Go\'ernment has a license or the
rillht 10 free use of the plllent or cop)'right.
(2) The patent or cop)'right hnsbeen
adjudicated to be invalid. or has been
administrativelv determined 10 be invalid.
(3) The pateni or copyright is considered 10
be unenforceable.
(4) The patent or copyright is expirnd.
b. Special cere should be exercised in
determining reasonableness where the
royalties may have been alTived at IS a result
oC less then arm's length bargainins; e.g.:
(1) Ro)'ahies paid to persons. including
corporations. affiliated with the organization.
(2) Royalties paid to unaffiliated parties.
including corporations. 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
organiu tion.
Co In allY case involving a patent or
copyright fonnerly owned bl' the
organiution. the amount oC royalty allowed
should not exceed the cost which would have
been allowed had the organization retained
title thereto.
44. Severance pay.
a. Severance pay. also commonly reCerred
to as dismissal wages. is a payment in
addition 10 re~u1ar selaries and wages. by
organi:ations to workers whose employment
is being tenninated. Costs of severance pay
are allowable onl" to the extent that in each
case. it is required by (i) law. (ii) employer.
employee agreement. (iii) est:.lblished policy
that con:o!itutes. in effect. an implied
agreement on the organi:ation's part. or [Iv)
circ-.:ms:a:lces of the particul:!r employment.
b. Casts of severance p:l}"ments are divided
into two cate80:ies as follews:
(1) Actual normal trunover seVenl:lCB
pa}-menls shall be allocated to allllcth'ities:
or. where the organiution prnvides Cor a
, reserve for nonnal severllnc:'!s such method
will be acceptable if the charge to current
operations is reasonable in lisht of pal'menls
actual!~' made for nonnal sev~rances oyer ..
representative past period. and if amountll
ch"fi~ed are allocated to all activities of the
organi:alion.
(2) Abnonnal or mass severance puy is oC
such a conjectural nature that measurement
of costs bv means of an accrual will net
;:;hieve equity to bOlh parties. Thus. accruals
Co!" this purpose are not allowable. However.
thl! Government recognize:: i:s obligation to
participate to the extent oC its fair sh:lrc. in
an~' speCific payment. Thus. allow:!bility will
bc considered on a case.b)'-case D:!sis in the
event of nccurrence.
45. Specialized service facilities.
a, The costs oC services provided by hi~hj~.
J
A-122:10
complex or specialized Cacilities operRted by
Ihe organization. such as electronic
computers and wind tunnels. are allowable
pro\'ided the charges for the services meet
the condition. of either b. or Co of this
paragraph and. in addition. take into account
an)' ilems of income or Federal financing that
qualify as applicable credits under paragraph
A.5. of AlIachment A.
b. The costs of such services. when
malerial. must be charged direcll)' to
applicable lIwardll balled on actual u.~age of
the services on the basis oC a schedule oC
rates or established methodology thaI (iJ docs
nol discriminate llgainst Cederally supported
acti\.ities oC the organi:tlltion. including usall\!
by thc organization Cor internal purposes. and
(ii) is designed 10 reco\'er only Ihc aggrcgate
costs of.lhe services. The Cosls oC eoch
service shall consist normally oC both TIs
direct costs and its allocable share oC all
indirect costs. ^dvanc:e agreements pursuant
10 parugr:!ph A.5. of AlIuchment A arc
partic-.liarly important in Ihis situation.
Co Where the costi incurred for a scrvice
Are not material. Ihey may be allocated as
Indirect costs.
40. Taxes.
3. In gener:!l. taxes which the organization
:s required to pay and whi::h are paid or
.Qcr:rued inaccordllnce with generll.lly
accepted accounting principles. and
payments made 10 local governments in lieu
oC laxes which are commensurate with the
local government services received are
allowable. except lor (i) laxes Crom which
exenlptions are available 10 Ihe organization
directi" or which are avail...ble to Ihe
organiution based on an c:\emption aHorded
the Covemment and in the laller clSe when
the awarding agency makes s\'ailable the
Mceuary exemillion certificates. (ii) special
assessments on land which represent capilal
improvements. and (iii) Federal income laxeS.
b. An~' refund of taxes. and an)' pRyment to
the ol"Jlaniution of inlerest thereon. which
were allowed as award costs. wlU be
credited either as a cost reduction or cash
refund. as appropriate. to Ihe Covernment.
47. Termi/lution co.~ts. TerminHti~n of
awards generally give ris. 10 the incurr~licc
oC cosls. or Ihe neeri Cor specidl treatment oC
cosls. which would not have urisen h:!d the
award not been terminated. COlli princi?ies
cl)vering lhese items arl! set Corth below.
Thel' are to be used in conjunction with the
'other provisio:lS of this CircullU in
temlinalion situations.
a. Common itp.ms. The CU$t of items
reasonal:lly usable on the organization's c:her
w;)rk sholl nol be a!lowablc unlr.ss the
DI"ll:miUllion suhmits evidence that il would
not re::!in such items at cost without
sustaining B loss. In deciding whcther such
Hems are reasonably usable on other work oC
the organization. the awarding agency shouid
consider the organi:tation's plans and urders
Cor current and scheduled activit)',
Cuntemporaneous purchases of common
items by the orsHnization shall be rr.!larded
as evidence Ihal such items are reasonnblv
IIsnblc on the organi:ation's :lther work. Any
acceptance of common items liS allocnble 10
the lerminaled portion of the awore! shnIl be
limited to the cxlcntlhntthl' C1tHJntili,,~ oC
I
Office of Management and Budget Circular A-1Z2 (6/27/80)
such items on hand. in transit. and on order
are in eXCe:ll of the reasonable quantitative
reqlliremenU of olher work.
b. Cost.! continuing after I8rmina,ior~ l! in
I panicular caM. despite all reasonable
dforu by the orJamution. cenain COltl
cannot be ellscontinued Immediately alter tha
effective date of termination. such CDIU ara
,enerally allowable withia the limitatioaJ let
forth i:l this Circular, except that any IUch
costs contiJ1u.in3 alter termination due to the
negligent or willful failure of the or'llani:ation
to di3continue .uch COSt3 Ihall b.
unallowable. .
c.. LoSII ofl:seful value. Lou o( useful value
of srecial tooling. mDchinery and equipment
wr:!':h was not charged to the Iward as a
c:1;.:.:al '.!xpenditure is generally allowable if:
i : , Such special tooling. macinery, or
eq. :pment is not reDaonably capable of use in
th:. ...ther work of the orJani:tation.
(::1 The interest of the Governme:'lt is
~~ ~,=ti!d by transfer of tille or I.y other
nll':I:'IS deemed appropriate by the awarding
a;:' ney:
Ii. Rental COIIU. Rental cosU under
Il~l:xpired leasel are generally allowable
~;'llre dearly .hown to have been
r"..:lonably necessary (or the performance of
I!:: tenninated award Ie" the residual value
0:' such leases. if (i) the amou.,t of IUch rental
ci:.imf!d does not exceed the relllonable uae
vabe or theproperfy leillled for the period of
(}:.. '1wllrd and such /u.-ther period as may be
rl!.:..lm:.:ble. and (ii) the orJaniution makes
all reasonable efforu to terminate. a"ign.
.ettle. or otherwise reduce the cost of such
lease. There also mav be included the cOatol
allerations oC such l....ed property, provided
such al:erations were neceS&lU'"j for the
performance. oC the award. and of reasonable
resto::ition required..Oy the provisioDl of the
leue.
e. SeuJement I1XpenSBtI. Settlemlmt
expenses mcluding the following ano
,enf'rally allowable:
(1) Ac::ounting. 181l'al. clerical. and similar
costs reasonably necllssary ior:
(a) The preparation and presentation to
awarding agency oC setllemeat claims IDd
supporting data with reaped to the
terminated portion oC the sward. w:1less the
termination is for defaulL (See parllgraph 408.
oi Attachment I.. OMB Circular No. A-no:
and
[b) The temlination IDd settlement of
subawa~. .
[2} Reasanable costs for the storage.
transportation.. protection. and disposition of
property provided b)' tbe Government or
acquired or produced for the aware: except
wheD grantees are reimb~ed lor disposa.l.s
at a predetermined amolOtlt in accordlDce
with Attaci1ment N o( OMB Cir.:ular A-no.
(3) Indirect costs related to s.daries IDd
wages in~d.. settlement expezun in
subparagraphs (1) and (2) of this paragraph.
Normally. suc:h indirect cosU shall be limited
~o frin~e beneiiu. occupancy COIL u:d
unmeclate supervision.
f. CJairnll under $ubawarris. Claims under
subawards. including the allocable portion o(
claims wbi,ch are common to the award. and
to other work oC the organization are
generally allowable. An appropriate snore oC
the organization's indirect expense may be
allocated to the amount of sett1emen~ with
subcontractorlsubgrantees: provided that the
amount allocated is otherwise consistent
with the buic guidelines contained in
Attachment A. The mdlrect expmse so
allocated shall exclude the sama and similar
co.ts claiOled directly or indirectly..
settlement expen.ea.
4& Training and education CD8Ls.
L Cos~ of preparation and mainten01l1ce oC
a program of instruction including but not
limited to on.the-job. classroom. and
apprenticeship training. designed 10 increas.e
the vocal1on.aleifectivenelll o! empl"yecs.
including training materials. taxtbook.3.
salaries or wages of trainees (excluding
overtime compensation which might arisa
therefrom). and (i) salaries of the director oC
traini.a3 and stalI when the training progrnm
is conducted by the orJamution: or (ii)
tuition and (ees when the training i. in 811
inatitution not operated by the OI'1Ja.nWition.
are allowable.
b. eosu oCpart-tlme education. at an
undergraduate or poatgraduate collegoe level.
including that provided at the OrJaniz.ation's
own facilities. are allowable only when the
co~e or degree punuecl is relative 10 the
field in which the eC1llloyee i. DOW working
or may reasonably be expected to work. and
are limited tn:
(1) Training materiala.
(21 Textbooka.
'(3) Fees c.harge:t by the ttGl1cati"n:.J
institution.
(4) Tuition charged by the educational
insti tution. or in lieu oC tuition. inslNc:tors'
salaries and the telated share of indirect
cosU of the e.:ucatioa.al institution to the
extent that the sum thereof i.s not in excess of
the tuition which would bave ben pajd to the
participating educational institution.
(5) Saillries and related coats oC instructors
wbo are employee. oC the organizati,--
(8) SlJ"aight-time compensatioa oC each
employee for time spent attendiag clasaee
during wcridag hours oot in exceSl of 156
ho~ per year and only to \!ie extent that
circumstances do not permit tha operation of
elasaes or attendance at cla..es after regular
working hours: otherwl18 .uclt compenntion
is unallowable.
~ ~su oC luition. !ee&. traini:1g materials.
and textboou (but not subaistence. salilr)' _ or
any other emolumenu) in connection with
full-time education. including that provided at
the OI'1Jani:atiOD'S own facilities. at a
postgraduate (but not W'ldergraduate) college
level. are allcwable only woeD the co~e or
degree punued is related to the field in which
the empiayee is now workinS or may
reasonably be expected to work. and only
wbere the cosU receive the prior approval or
the awarding agency. SuciJ coeu are limited.
to the cosu attributable to a total period not
to excee:! on~ school year for eaciJ employee
so trained. In unu.ual cases the period may
be extended.
d. COlts oC attendance of up to 16 weelu
per employee per year at speciwed
program. specifically de:ligned 10 enhance
the eCfectiveness ol executives or ma:1agers
or to pn:pare employees for IUcl1 positions
are allowable. Suc.h cosu include enrollment
.1
A-122:11
fees. training materiala. lextbooJe. and
related cherges. employees' selarin.
subli.lence. and traveL Casu allowable
under Uti. p81agrap.h do not include thOlM! for
coune. that ara part of a d~l!nled
cumC".Jwn. wbich are allowable only to the
elttenl set forth in b. and Co above.
e. MamtenlUlce expeWle. and nOmllll
depreciation or fair rental. on facilities
owned or leued by theorganiution (or
training pW'pOleS are alloweblll to the extent
Sllt fnrtb in paragraplu 9. z:. and 42.
r. C:mlribuDolU or donations to
educational or training inM/ttutions. including
t~e aonalion oC facilities or other propl'!r\iea.
anu ichollll"llhips or fellowships. are
unallnwable.
g. Training and education cos~ in excess oj
Ihnse othe~i.. allowable under parDgraph.
..,b. and Co o( this paragraph may be allowed
wilh prior approval o(the awarding agency.
To be considered (or approvaL the
organization mu.t demonstrate that tuch
cost, are consiltenlly incurred pursuant to an
eSlublished training and educa:ion prognun.
and thaI the course or degree pursued is
rela live to the neld in which the employee is
now working or may reasonebly be expected
10 work.
<\9. Transponatian casts. Transportation
c"sts include freight. expresa. cartage. and
postage c:harJea relating either to good.
P\Ircnased. in process. or delivered. These'
CO&15 are allowable. When such cosu can
readily be idenlified with the itetnll involved.
lhey may be directly charse.: 81
lransportalion cosU or added to the cost oC
such items (lee paragraph :::3). Where
identification with the materials received
cannot reacIJly be made. transponat1on costs
may be ch818ed. to the appropriate indirect
cost ac:ounll if the orJani:ation iollows a
consistenL equitable procedure in this
re,pe~t
SO. Travel cosu.
a. Travel costs are the expenses [or
troll\sportation. lodging. sui:nsistence. and
related items incurnd by employees who are
in tra vel sta~ on offidal business of the
organization. Travel CO.tl ara allowable
subject to paragraphs b. u1ro~gh e. below,
when they are <meetly attributaole to specific
worlc under an award or 4l"e incurr-ed in the
normal course of admWs\:"ation of the
orgllni:ation.
b. Such eOlts may be charJed on an actual
buis. on a per diem or mileage basis in lieu
oC actual cosU mcurred. or on a combination
of the tWo. pro~ded the method used resulU
in charges consistent with tbose normally
allowed by the orJani:ation m iu regular
operations.
c.. The ci.i!Ierence in cest between fint-claes
ait aceommodatiolU and less than fint-clall
air accommodations is unallowable excel'/
when leu than fint-clau air
aceozr.modatioWl L-e not reasonably
svailable to meet necessary minion
requirements. such 81 where Ius than first-
elalS accommodations would (i) require
ci:cuitoua routing. (i1) require l:'svel during
unreasonable noun. (iii) greally inc.-use the
duration' oC tha night. (iv) result :n additional
costs which would offset the transoortalion
sa"';~gs. or (v) offer IIccomJ:lodatio'nl wbidl
. .
.-
-J
)fflce of Management and Budget Circular A-122 (6i27/80)
:oe Dot re..onably adequata for the medical
eeciJ of the traveler.
It Neaua%")' aDd ",.aonabi-e COlts oC
ilJnily movemenU aDd penonnel movementl
1 a special or ma.. nature are allowable..
W'Suant to paragnpha 40 and 41. .ubject to
liocation on the bali. of work or time period
te:efited when appropriate. A~vance
g:reements are particularly important.
~ Direct charges for foreign travel COlts are
!lowable only wben the travel ba.s received
[rior IpproVaJ of the awarding agency. Each
l!;Jacate foreign trip lDwt be approved. For
:UljX)IU oC lhi. provision.. foreign tra vol il
:e1uled as any travel outside of Canada aod
;'e United Slales and its lerrilories and
Ics!le.ssions. However. for an organization
ocated in foreign countries. the lenn "foreign
,Ilvel- lUean.s travel outside that counlr)'.
c;t1:Ular, No. A-1:2!
=.:tachment C
';oapn:lfit Org&Aiz.a/iOI1ll 001 Subject 10 thia
;~~1ar
".eraspace Corporation. El Segundo.
California
~"'eonne Universities Association. Chicago,
IIIinoi.s
':"s.socialed Univel'lliliei, Incorporated.
Wa.shington. D.C.
:'.ssociated Universities for Research and
Astronomy. Tuc.son.. Ari:ona
,':"tomic Cuualty Commission. Wcuhi.aiton..
D.C.
Sattelle Memorial Institut~ HaadqulU'lered in
Coiumbw. Ohio
~:ookhaven National I.aboratory, Upton..
New York
Center ior Energy and E.11Viroc.mental
Research (Q:ER), (University of Puerto
Rico)
Co:nmooweal1.b of Puerto Rico. Charles Stark
Draper Laboratory, lncorporaled
Ca:lbrid;e. Ma.ssachusells. COr:1parative
Ar.imal Research Laborato." (CARL)
~J:'li,,"ersity oCTenne.ssee), Oakridge.
7er.ne~ne
~\.ironlnentaJ I.tIslitl1te of Michigan. An.,
Ar!:or. Michigan
~ar:!ord Environmental Heal1.b Foundation.
itichland. Washington
r:r Rl!search lJutih1le. Chicago. illinois
L~till1te ior Defense Analysis. Arlington.
ViTiinia
!:utitute of Gas Technology. Chicago. Winois
Midwest Research lnstil'ute. Headquanered
in Kansas Citro Minourl
~.~tre Corporation. Bedford. Masllach~etts
~.:Qntana Enelij' Research and Development
institute. inc... (ME:RDI), Butte. Montana
~aticnal Radiological ~t:'Onomy
Observato.,., Green Bank. West Virginia
Cakridge ^-sociated Univel'llities. Oakrid8e.
Tennessee
~ject Management Corporation. Oakrid;u.
7er~essee
:'.a:1d Corporation.. Sacta Monica. California
F.esearch Triangle L,stitute. Researe..'1
7riangie Parx. North Carolina
rUve1"5ide Research lmtitule. New York. New
York
Sandia Corporation. Albuquerque. New
\.t n ":":_....
Southern Research wtitu18. BIrm.ln3ham.
Alabama
Sou1.bwest Research wtil'uta. San Antonio..
Texa.
SRI international MeDlo Parlt. CallComJ&
SYTlIC:use Ra..arch Corporation. $yraCUM,
New York
Universitiee Research Aaeociation.
Incorporated (National Acceleration ubI.
Aryonne. nUnoi.s
UniveniUes Corporation for Atmospheric
Research. Boulder, Colontdo
Nonprofillnsurance Companies such II Blue
Cross and Blue Shield OrgOrW:atJona
Other conpn:lfit orga.ni%ation. 81 negotiated
wi1.b awlU'Cii!1g agencies.
~ Doc. ao...ZI:C'lI F1lod '_7~ a:4S ...1
~.CCOlt 3"_'~
Editorial Corrections to
OMS A.122
OFFICE OF MANAGEMENT AND
BUDGET
Circular A-122, "Cost Princip~s for
Nonprofit Organizations"; Correction
AGENCY: Office of Management and
Dudget.
ACTION: Final policy corredion.
SUMMARY: This notice corrects errors in
the printing oC cost principles Cor
nonprofit organizations. (45 FR 46022-
July 8. 1960).
FOR FURTHER INFORMA"ON 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~rllgraph 1. change Paragraph 5
"Compensation for.Personnel Services"
10 Paragraph 6.
. Pose 46022. column 2 the second
Paragraph Z. change Paragraph G
"Contingencies" 10 Paragraph 7.
. Page 46022. column 3:
Paragraph 4. change Paragraph 31,
"Equipment and Other Capital
Expenditures" to Paragraph 13.
. Paragraph 5, change Paragraph 26
"Meelings" to Paragraph 24.
. Paragraph 6. change Paragraph '1.7.
"Organiution Costs" to Paragraph'ZO.
. Paragraph 7. change' Paragraph 30
"Page chal1tes in Professtional Journals"
to Paragraph 28.
. Paragraph 6. change paragraph 37
"Public Infonnation Service Costs" to
Parngraph 36.
. Paragraph 9. change Paragraph 43
"Rental Costs" to Paragraph 42.
. Paragraph 9a: in the fourth line. add
"up" between the words "only"' and
"\0"; in lhe sixth line change "'Ihey" 10
"il".
. Parngraph 10, change Paragraph 51
"T.",.."I rnr.'~" In T':l,:ll"~nh r;()
-- --.1 -.
A-122:12
. Page 46024, column J Paragraph
4(0)(2) afler "benefits reccived" add ";
or",
. Page 4NJ2S. column 1 Paragraph D3.
changc the reference, "Paragraph Z1 of
Attachment B" to "Paragraph 19 of
Attachment D:'
· Page 46026. co~umn 1 Paragraph
4aJii. in Ihe sixth line. change "direct
cost" 10 "direct costs."
. Page 46026, column 2 Paragraph
Elc. change "c'slablishmenl of a rate" 10
"cstablishmcnl of a final ratc."
. Page 46026. column J Paragraph
Elb. in Ihc third line add Ihe following
nfler "a Fcderal agency shall"-"submit
ils inilial indirect cost proposal
immcdiatclv."
. Pag-e 4&127. column 3 Paragraph
'. (3)(a). chan~e "workmen's
compcnsation" 10 "worker,
compensation."
. Page 46028. column 1 Paragraph
Gf3(b). (the sccond line of colwnn 1)
chunge "Workmen's compensation" to
"workers' compensation:'
. Pace 46030. .column 3. paragraph
24b" Ihe sixth line. change "allowablc"
10 "allowability".
Daniel F. MaDD.,
Dudgct and Monogemenl Officer.
(F'R Doc. n~ flied :1-1_1: Il:U .ml
81WNG CODE Jl'_'~
Circular A-122, "Cost Principles for
Nonprofit Organizations"
Correction
In FR Doc. 81-20270, appearing at
poge 46022 in the issue of Tuesday, July
6. 1960. the following changes should be
made:
1. On page 46024. colwnn three. Ibe
second senlence in paragraph "A..5.b.
should read, "SpeciCicaelly. the concept
of nelling such credit items against'
relaled expenditures should be applied
by the organization in detenniniI18 the
rales or amounts to be charged to
Federal awards Tor services rendered
whene\'er the facilities or other
resources used in providing such
services have been fmanced directly. in
whole or in part. by Federal funds."
Z. On page 46024. colwnn three. the
second complele sentence in paragraph
A.6. should read. "This is particularly
true in connection with organizations
that receive a preponderance of their
support from Federal agencies:'
3. On page 46025. column one.
paragraph B.2. should read. "2. Any
direct cost of a minor amount ma\' be
Ircaled as an indirect cost for rea'sons oC
prncticality where the accounting
trcatment for such cost is consistently
nrr1i"d In nil final r.o~t nhjccliv('!I."
\ -
1
Office of Management and Budget Circular A-' Z2 (6/27/80)
4. On page 46025, colWTUl oce.
paragraph DA.f. should read. "f.
Administration of group benefits on
behalf of members or clients including
life and hospital insurance, annuity or
retirement plans. financial aid. etc:'
5. On page 46025. column two. the fll'st
senlence in paragraph D.l.e. should
read. 'The base period for the allocation
of indirect costs is the period in which
such costs are incurred and accllmulated
for allocation to work performed in that
period:'
6. On page 4G02G. column one. the
second sentence in paragraph D.J.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
Mnlence in puragraph D.3.e. should
read. "The distribution based used in
c.omputing the indirect cost rate for each
function may be total direct costs
(excluding capital expenditures and
Q.ther distorting items such as major
subcontracts and subgrants). direct
::;alarie.s and wa2es. or other base which
results in an equitable distribution:'
8. On page 40020. column oae. the first
Imd second sentences in paragraph
O.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
basic catelZories:. . ':.
9. On page 46026. the last sentence in
column one (extending to column two).
in paragraph 0.5. should read. ''The
factors may include the physical
1o.cation of the work, the level of
administrative suppor~ required. the
nature of the facilities or other resources
employed. the scientific disciplines or
technical skills in....olved, the
o'rganizational arrangements used. or
an)' combination thereof:'
10. On page 46026, column three,
liJsragraph E.2.i. should read. "i. To the
extenl that problems are encountered
among the Federal agencies in
connection with the negotiation and
appro....al process. the Office of
Management and Budget will lend
assistance as required to resolve such
problems in a limely manner."
11. On page 46030, column one. the
introductory text of paragraph 16.b. and
paragraph 16.b.(1) should read. "b. The
costs of idle facilities ore unallowable
except to the extent that: (1) They are
necessary to meet fluctuations in
workloads: or".
11. On poge 46030. column one. the
second sentence in po'ragraph 16.c.
should read. "Such costs are allowable.
provided the capacity is reasonably
antidpated to be necessary or WIiS
originally reasonable and is not subject
to reduction or elimination by subletting.
renting. 91" sale. in accordance with
sound business. economics or security
practices,"
13. On page 46031. second column.
paragraph 34.c. should read. "In addition
to the factors in paragraph b. above.
retainer fees to be allowable must be
supported by evidence of bonR fide
servicesavoilable or rendered:'
BILUNG cODE lS05-41...
.1
A-1 22:1 3
'\
..
, . .
~\JJY4.lY'" ~ _".1..1. 1 l.)J:. Y l::.LUt' -~E.'" 'T 09: 1551
APPENDIX .:I.. HDR RF-372
AOMINISTRA liVE REQUIREMENTS FOR GRA~TS AND COOPERATIVE 4-25-88
AGREEMENTS TO &'rATE, LOCAL AND FEDERALLY RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
(24 CFR 85)
I
~
-)
PART as-ADYIN'STRA TIVE
REOUIREMENTS FOR GRANTS AHD
CooPERA nVE AGREEMENTS TO
STATE. LOCAL AND FEDERALLY
RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
r-
,
':'
~
Suopert A-General
!WIc.
85.1 Purpose and scope or this paM.
1IS.2 Scope of subpart.
lIS.:! Definitions.
lIS.. Applicability.
1IS.5 Effect on other illsuances.
85.6 Additions and Exceptions.
Subpart 8-Pr...Award Requirements
1IS.10 Forms for applying (or grants.
lIS.ll State plans.
85.12 Special grant or subgrant conditiuns
(ur "high.risk" grantees.
Subpart C-Post-Award Requirementa
rutanci.1 Admlni.traUon
85.20 Standards (or financial managcment
sYlltems.
85.21 Payment requirements.
1IS.22 Allowable COSls.
85.23 Period of availability of funds.
85.24 Malching or cost sharing.
85.25 Prosram income.
85.26 Non-federal audits.
Changes, Property. aDd Subowards
85.30 Changes under discrelionllry (project)
awards.
85.31 Real property.
85.32 EqUipment.
85.33 Supplies.
85.34 Copyrights.
85.35 Subawards to debarred and
suspended parties.
es.36 Procurement.
85.37 Subgrants.
Reports. Records Retention. and Enforcement
8.5.010 Monitoring and reportin:; program
perfonnance.
85,41 Financial repoMinl!.
85A2 Retention and access requirements for
records.
1lS.43 Enforcement.
8.S.~ Termination for convcnience.
Subpart o-After-the-Grant Requirementa
IIS.SO Clolleout.
85.51 [....ter disallowances and adjustments.
as.s.:! Collection of amounLS due.
Subpart E-Entltlementa (Reserved]
Aulborit)": Section 7rd). Departmenl of
!-lousing and Urban Development Act. ~2
U.S.C.353S(d).
[53 FR 8068, 8088, Mar. 18, 1988]
.~':'
Subpart A-Genenl
f 8S.1 Purpose. &ad scope DC this part.
This part establnna unifarrn
administrative ndft far Federal gTIlnr..
and cOoperalive ~ent. and
subawani6lo State, local and Indian
tribalgovemmenls.
f 85..% Scope or subpart.
This subpart conlains geDeral rules
pertaining tet rbirpart and procedure
(or control ol exceptions from thi.. part.
f 85.3 nefmitioDS.
As ulIed in this part
"ACC"Ue'd expendituJ'eos" m~n the'
charges inarrred by tb gnnt~ during R
given period requirin! the provision of
lunds for: (1) Good. and ather tangible'
property received: (2).ervice&
performed by employees. contractors,
subgrantees, subcontractors. and other
pavees: and (3) other Ifmounts beocoming
o~ed under programs far which no
CWTentsenncesorperlonnanceis
required. such as annuities. insurance
claims. and other bendil paym.eDls.
"Accrued income" means the sum of:
(1) Eaminp during a r"'en period from
ser,/ices periomted. by the 3faDtee rmd.
goods and other langiby: prapeny
deli?ered to pun:huen. and (%} amoants
becoming owed to the grantee far which
no CUlTeDL aervices or periccnanc:e ia
required by the grantee..
"A:cquis.itiQQ ~l" ell an it~ of
purchased equipment means the Det
invoice unit price of the property
including the cost of modifications.
attachments. accessories. or' auxiliary
apparatus neocesnry to make the
property usable for the purpose (or
which it was acquired. Other cnargeS'
such as [he cost ai iDstallation..
transportation. taxes. duty or 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" req~e1Its mean
those matters common to grants in
~eneral. such as finanalfl management.
kinds and frequency of repom. and
. retention of ~ 'I'bese are
distinguished from "programmatic"
requirements" wbich canc.em matters
that can be trealed only on a p~
by-program or granl-by-grant basis. such
8! kinds of acti'vities that can be
supported by grants under a particular
program.
PUbliShed by Warren. Gorham & Lamont, Inc.
"Awarding agency" means (1) with
respect to a grant. the Federal arency,
and (2) with respect to a su.bgrant. the
party that awarded the StilivaDt.
"Cub contribution," mean. the
granlee's cui! outlay, including the
outlay of manlY contributed to the
8rant~ or sDb8'l'Bfttee by ather pabli~
ageDCiea aDd in.titationa.&Dd private
organiutioa& and individuaJ~_ Wben
authorized by FeciCf'a! legialatiaa.
FedenU Nncb rea::ived from other
assistance agreements m8)' be
considered .. graatee or &Ubgra.nt~
cash contribotiona.
"Con traCl" me&DJ (except as used i.D
the definitiooa for "gra:lt" &.ad
"subgrant" in this section and excepl
where qualiJled by "FedemJ"l a
proC'll:remenl CODtraCl UJ.\der a grant oc
subgrant.. aDd meana a P~ent
subcontract Wlder . contract.
"Coat sharing or matching" meaD& lhe
value of t.be third party in-kind
contributiou ud the porticn of tlu
costs of a i&dually a.saisted p.ro~ct a:
program DOt bome by the F ede.ral
Government..
"Cost-type contract" m.ea.u.s a contract
or subcontract unciu a grant in which
the contractor or subcolltractor is paid
on the basis of the costs it incurs. with
or without a fee.
"Equipment~ mealU tangible.
nonexpendable. personal property
having a usefuJ life at'more than one
year and an acquisition cost of s:s..ooc or
more per unit. A grantee may use its
own definition of equipment provided
that such dermition would at least
include all equipment aefl.ced aboVl!.
"Expenditure report" means: (I) For
nonconstruction grants, the SF-ZB9
"Financial Status Report" (ar other
equivalent report}; (zt for construction
gran~. the SF-Z7I "Outlay Report and
Re(fUert far Reimbanemmt- (Ol" other'
equivalent report).
"Federal'" ~cogni%ed Indian tribe}
government- mean:r the governing body
or a rovemmenta} agency of any Indran
tribe. band. nation. or other organized
group or community (including' any
Native 'ril1are as defi~d in section 3 of
the AlalJxa Natjye Claims Settlement
Act. as Sta t l588) certified by the
Secretary of the arterior al eligible for
the spedal p!'Ograms and 3ervice:!
pravided by nim through the Bureao ol
Indian Affain.
"Gov~menl" means a Stale 01" local
government 0:- it federally recognized
Indian tribal ROVe:'nment.
41
'09:1552'
"Grant" means an awud of fbwrcial
assistance. including cooperative
qreemenm, in the form or money. or
property in lieu of money, by the Federal
Government to an eligible grantee. The
term does not include technical
auiat8nc:e' which provides servicu
iDstnet of mcmey, or other assistance in
the form ofrennae sharma. 10lIDS. loan
parantees, interest 8ubsidies,
ineuraDce, or direct appropriatioru.
Abo, the term doe. nol include
asaistlmCe. such .. . fellowship or ocher
au.p swn award. wbidl the &nmtee is
DOt required to account for.
"Grantee" meana the government La
which a grant is awarded and which is
accountable for the use of the funds
providlUL The grantee i& the enUre 1epl
eatity even if only a particular
component of the emity is designated in
the grant award document.
"Local governmml" meaDS a county.
llDUIlicipa1ily,~y.lowa..lownahip. ~ocai
pu~ au.1hority (inc:ludina any public
and Indian bousinl agency under the
UDited Statu HOU8iDg Act of 1931}
school district. special di&tri.c:t. intralttale
distrid. COUDcil of IOvemmenta
(wbatbe.r or not iDCDrparated a& a
ocnprofit corporatiOQ UDder stata law),
uy other resUmai or int.eratale-
govanment entity, or any -FDCY or
mstnunentality of a.~ gonmment.
"Obqstioas" rDeaDS tb. amounta of
ordem phu:ed.. c:.ontJaas aacl sukJFm.ta
awarded. gooda ad serYiczs receSvea.
apd similar tp-diaaa durins a giveD
period tbat Will nqgire pryment by the
~ cWriDg the saJR or a fat1IR
period.
"OMS" meaas tbe Uaited Stales
Office of MaoapmeDt ad Budpt.
"Outlays" (expenditures} mean
charges made to the project or program.
They may be reported on a cash or
accrual basis. For reports prepared on a
cash basis. outlay' are the sum of actual
cash disbursement for direct charges for'
goods and services, the amotmt of
indirect expense incurred. the value of
in.kind contributions applied. and the
amount of cash advan~s and payments
made to contracton' and mbgrantees.
For' reportS prepared on aa accrued
expenditure basis. outlays are the sum
of actual cash disbursements.. the
amount of indirect expeDM iJM:urred. tne
value of inkind contributions applied.
and the new itu:rease (or decrealle) in
the amoWlt& owed by the grantee for
goods and other property received.. for
services performed by employees.
contracto'r&. subgraDtees..
subcontractors. and atber payees. and
other amounts becoming owed under
programs for wtuch no current services
or performance are reCluired. such as
annuities. inaurance claims. and other
bene!il payments.
..
HOUSING AND DEVELOPMENT REPORTER
of thJ authority by 'the grantee or
subgrantee. "Termination" does not
include: (1) Withdrawal oC funds
awarded on the basil of the grantee's
underestimate of the unobligated
balance in a prior period: (2)
Withdrawal of the unobligated balance
as of the expiration oC a grant: (3)
Refusal to extend a grant or IIward
additional funda. to make a competing
or noncompeting 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.
"Terms 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
o 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 on a cash basis mean the
amount of obligations incurred by the
grantee that has not been paid. For
reports prepared on an accroed
expenditlOl'e 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
Federal agency that has not been
obligated by the grantee and is
determined by deducting the cumulative
obligations from the cumulative funds
authorized.
~ 85.4 Applicability.
)
"Percentage of COIItpleUoD method"
refers to . sJstelll ander which
payments ant made for conatruction
work ac:cordi.Bc to the pt!I'I'CeRtase of
completion of the work. rather than to
the grantee'. cost mcwred.'
"Prior approval" meau
documentatioa evidencing consent prior
to inc:mring specific coaL
"Real property" meana land. including
land improvements. structures and
appw1enancn thereto. excluding
movable machinery and equipment.
"Share", when referring to the
awarding agency's portion of real
property, equipment or supplies. means
the same percentage as the awarding
agency's portion of the acquiring parry'.
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 contributiol1$.
"State" means any of the several
States oC the United States, the District
of Columbia. the Commonwealth of
Puerto Rico, any territory or possession
of the United States, or any agency or
instnunentality of a State exclusive of
local governments. The term 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 form of
money, or property in lieu of money,
made under a grant by a grantee to an
eligible subgrantee. The term includes
f1ftancial assistance wben provided by
contractual legal agreement. but does
nut include procurement purchases, nor
does it include any form of assistance
which is excluded from the definition of
"grant" in this parL
"Subgrantee" means the government
or other 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 !lJubgrantee or a decision to terminate
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.
"TermillJltion" means permanent
witbdrawal of the authority to obligate
previously-awarded grant funds before
that authority would otherwise expire. It
also means the voluntary relinquishment
Publislled 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
State and local hospitala.
(2) The block grants authorized by the
Omnibus Budget Reconciliation Act of
1981 (Community Services: ~v.entive
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 oC Education under Title V,
Subtitle D, Chapter Z. Section 583-the
Secretary's discretionary grant program)
and Titles I-Ill of the Job Training
42
COMMUNITY DEVELOPMENT
1
)
Partnership Act of 1982 and UDder the
Public Health Services Act (Section
1921), Alcohol and Drug Abuse
Treatment and Rehabilitation Block
Grant and Part C of Title V. Mental
Health Service for the Homeless Block
Grant).
(3) Entitlement grants to cany out the
follOwing programs of the Social
Security Act:
(i) Aid to Needy Families with
Dependent Children (Title IV-A of the
Act, not including the Work Incantive
Program (WIN) authorized by section
402(a)19(G); HHS grants for WIN are
subject to this part);
(H) Child Support Enforcement and
Establishment of Patemity (Title IV-D of
the Act);
(Hi) 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),
(H) 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 g;.ants 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 US.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(a),
-:.:&
. _J
-.
and 242 through 244 (portions of the
Impact Aid program), except for 20
U.S.C..238(d)(2)(C) and 240(0
(Entitlement Increase for Handicapped
Children): and
(10) Payaeta ___the V~
Administration's State' Home Per Daem
Propam (3& U.s.c. l61"U,
(b) EnlilWnttnl P1'Og1G1rIS. Entitleme~lt
programs enumerated above m
t 8S.4(a)(J)-{8) are subject to Subpart ~
~ 85.5 Effect DB other illuaDces.
All other grants administration p~vi-
sions of codified program regulatIons.
program manuals, handbooks and other
nonregu1atory materials which are incon-
sistent with this part are superseded.
except to the extent they are required .by
statute, or authorized in accordance With
the exception provision in ~ 8S.6.
~ 85.6 AdditiODS aud exceptions.
(a) For cla.... of 8'8n" and grantees
subject to &hi. part, Federal agencies
may not impose additional .
administrative requilew..ri.tll except m
codified replatiDne published in ttNt
Federal a........
(b) Exceptions for cla_ of Bf8.Dw or
grantees may be autltorized only by
OMB. . .
(cl Exceptions on a case-by-case.baais
and f_ sabgrmatees ma, be aatbarized.
by the affected Federal agencies.
$ubp8rt1t Pf'e.-AW8nt ReqalnanInts
~ 85.10 Forms for applying for graats.
(a) Scope. (1) This section pnscribes
fonns and instruc::tiou to be D88d by
govemmeDtal oJ'88Dizations (except
hospitals and institutions of bigher
education operated by a goyemmentl in
applying for grants. This section is not
applicable. hOWfl lIer. 10 formula graDt
programs which do not require
applicants to apply for fands on a
project basis.
(2) Tbis sectioa applies cmIy to
applications to Federal agencies for .
graats. aDd is not required to be applied
by graateea iJa dealing with applicaDts
for' 11lbpanta. However. graDteea are
encouraged to avoid IIIGI'e det~ed or
burdensome applicaDoa reqa.irements
for subpoaats.
(b) iWthoriza:J forms and instructiOll8
for govef'TUltellUJJ DI'1IfllIizDtiGllS. (1) In
applying forgraatll. ~irwtts sball only
use standard applicatian farms or tbose
prescribed by the gI'lUltmg agency with
the approval of Ohm DJIcier the
Paperwork Redaction Act of 1980.
(2) ApplicaDts are not required to
submit more thaa the original and two
copies of preapplicatioos or
applications.
Published by Warren. Gorham & Lamont. Inc.
I
09:1553
HDR RF -372
4-25-88
(3) AppHc:ants....t follow all
applicable UaslnN:tiona that bear OMB
clearance numbers. Federal8.8ftlCies
may apecify and deeaib& the programs.
functions. or activities that will 1. used
to plan. bud&e'o and evaluat. the work
under a pUlL Other aup~tary
instrudioDa lDay be iuued oNy with the
approval of OMS to the exleDt reqWred
UDder U. Paperwork Reda_ Act of
198Q. FeW...,.taDdard form. excepl the
SF-u4 facesheet. Pederal al8DCiea IDS'
shade out or inatruc:t the applicaDt to
disregard any line item that is DOt
needed. .
(4) When a grantee appliea far
additional funding (~aa a
continuatioD or I.pplemeutal award) or
amends a previowl.ly aubmittad
application. anly the afiected pagea
need be submit1e&:l Previo~y &&lbmittad
pages with infOnDatian that La still
current Deed. IiOt be relWbmitte&:l
~ 85.11 State plans.
(al Scope. The statutes Cor some
programs require States to submit plans
before receiving grants. Under
regulations implementing Executive
Order 1237%. '"Intergovernmental Review,
of Federal Programs," States are
allowed to simplify. consolidate ana
substitute plans. This section contains
additional provisions for-plans that are
subject to regulations implementiDg the
Executive Ord~.
(b} Requi1f!fllltma. A Slate need meet
only Federal adminim-ative or
programmatic reqtriremetlt~ for a plarr
that are in statut_ or codified
regulations. . ..
(c) Assurances. In each plan the State
will include an assurance that the State
shall comply with all applicable Federal
statutes and regulations in effect with
respect to the periods for which it
receives grant funding. For this
assurance and other assurances
required in the plan. the State may:
(1) Cite by number' the statutory or
regulatory provisions requiring the
assura~ ana strum that it gives the
assurances required by those provisions.
(Z) Repeat the anurance language ia
the statutes or reoguJations, or
(3) ~Jop it. own language 10 the
extent permitted by law.
(d) Amendments. A State wifJ amend
a plan whenever necessary 10 reflect: (1)
New or revised FederaJ statutes or
regulation. or (2} a materia' change in
any State law. organization. policy. or
Stale agency operation. The State wi))
obtain approval for the amendment and
its effective date but need submit for
approval only the amended portions of
the plan.
43
09:1554. I
~ 85.12 Special graat or IUbgraat
coaditiou for "bigb-risk" graateeL
(a) A .antee Ol"s~aDteemaJ be
considered "blgb risk" if aD awarding
agency determines that a gran'- or
subgrlllltee:
(1) Hu amatory oC Wlaalilladory
performance. or
(2)ls not finaDCiaDy ...ble. or
(3) Has . DUlDagellleftt .,steaa which
does not meet the DIIIIUII......
standards ... forth ill tbia ,..n. or
(4) Has not canfonned to ....1IDd
condiCioa. of pl'8ViCMlS a.ant.. or
(5} Is otherwWe not responsible: and iI
the awarding agency determines that an
award will be mede, ~., conditions
and/or restrictions shall ...,......portd to
the high risk condition and sheD be
included in the award.
(b) Special conditiOM or restriction~
'may incfude:-
(11 Payment on a reimbursemeut
basis:
(%1 Withholding authority to procef.od
to tbe next phase until receipt of
evidence of acceptable performance
within a given funding period:
(3} Requiring additional. more detailed
financial reports:
(4) Additional proiec1 mDDiloriDg:
(5) RequiriDg the fP'8Dte or aubgrantee
to obtain technical or JDaDagement
assiatance: or .
(B} EstabliahiD8 additioJtal priw
approvale.
(c) If aD awardins ageDC)' decides to
impose such conditioDs, the awarding
official will notify the graBtee or
subpanlee as early ...posaible. in
writing. of:
(t} Tbe nature -of the special
conditionsl restrictions;
(Z) The reasonfs} for imposing them:
(3) The corrective actions which must
be taken before they will be removed
and the time allowed for compJetinB the
corrective actions and
(4) The method of requesting
reconsideration of tlte conditions I
restrictions imposed.
Subp8rt c-Poet-AWIInf Requirements
Finandal. AdPWoiAU::atiaa
~ 85.20. Standards for financial
management systems.
(a} A State must expand and account
for grant funds in accordance with Stale
laws and procedures for expending and
accounting for its awn funds. racal
control and accounting procedures oC
the State. &$ well &$ its Sllbgrlintees and
cost-type c.cmtractors. must be sufficient
to--
(l} Permit preparation of reports
required by this part and the statutes
authorizing the grut. and
HOUSING AND DE1LOPME~1 REPORTER
(2) Permit the tnK:iDg of fUDds to a elec1rOnic tnlWfer of fund. methods. th.
level of expe.omhlJeS adequate \0 grantee must make drawdown. .. close
establish that SGd1 fuada have not been as po.sible to the time oC making
used in violatioa of the restrictiOll& and disbursements. Grant.Jes must monitor
prohibttioas of app&ab1e .tatutes. cash drawdowns by their subgrantees to
assure that they conform substantially
to the same standards of timing and
amount as apply to advances to the
grantees.
(c) An awarding agency.ma}' review
the adequacy of the fmanc:ial
management system of any applicant for
financial assistance as part of a
preaward review or at any time
subsequent to award.
~ 85.21 Payment.
(a) Scope. This section prescribes the
basic standard and the methods under
which a Federal agency will make
payments to grantees. 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
of funds and disbursement by the
grantee or subgrantee. in accordance
with Treasury regulations at 31 en Part
205.
(c) Advances. Grantees aDd
subgrantees shall be paid in advance.
provided they maintain or demonstrate
the willingness and ability to maintain
procedures to' minimize the time
elapsing between the transfer of the
funds and their disbursement by the
grantee or subgrantee.
(d) Reimbursement Reimbursement
sball be the preferred method when the
requirements in paragraph (c) oC this
section are Dot met. Grantees and
subgrantees may also be paid by
reimbursement fOr any construction
grant. Except as otherwise specified in
reguiafton. Pederal agencies sl1all not
use the percentage of completion
method to pay construction grants. The
grantee or subgrantee may. use that
method to pay Its construction
contractor, and if it does. the awarding
agency's paytitents to the grantee or
subgrantee will be based on the
grantee's or subgrantee'f actual rate of
disbursement
(e) Working capital advances. If a
grantee cannot meet the criteria for
advance payments described in
paragraph (c). of this section. and the
Federal agency has determined that
reimbursement is not feasible because .
the grantee lacks safficient working
capital. the' awarding agency may
provide cash or a working capital
advance basis. Under this procedure the
awarding agency shall advance cash to
the grantee to cover its estimated
disbursement needs for an initial period
generally geared to the grantee's
disbursing cycle. Thereafter, the
awarding agency shall reimburse the
grantee for its actual cash
(b) The fmaneial management systems
of other grantees and subgrantees must
meet the following standards:
(I) Financial reporting. Accurate.
current. and complete diac:Josure of the
finaneial resuJta of fiDancially assisted
activities mu.t be made in accordance
with the fmancial reporting
requirements of the grant or 8ubgrant.
(2) Accounting records. Grantees and
subgrantees must maintain records.
which adequately identify the source
and application of fwtds provided for
financiaUy-asaisted activities. These
records must COntain infonnation
pertaining to grant or subgrant awards
and authorizations. obligations,
unoblipted balances. auets.liabilities.
outlays or expenditures. and income.
(3) IntamtlJ control. Effective control
and accoWltability must be maintained
for all grant and subgrant cash. real and
personal property, and oth~ assets.
Grantees and subgrantee. must
adequately safeguard all such property
and must assure that it is used solely for
authorized purposes.
(4) Budget COlltroJ. Actual
expenditures or outlays must be
compared with budaeted &lDOUAla for
each grant or lubgrant. Financial
information must be related to
performance 01' productivity data.
including the developmeut of unit. cost
information whenev~ appropriate or
specifically required in the graDt or
subgrant agreement. II unit cost data are
required. estimates bued on available
documentation win be accepted
whenever possible.
(fi) Allowable cost. Applicable OMB
cost principles. agency program
regulations, and the terms of grant and
subgrant agreements will be followed in
determining the reasonableness,
allowability. and allocability of costs.
(6) Source documentation. Accounting
records must be supported by such
source docwnentation as canceDed
checks. paid bills, payroDs. time and
attendance records, contract and
subgrant award documents. ete.
(7) Co8h managemenL Proc:edurea for
minimizing the time elapsing between
the transfer of fanck from th., us.
Treasury and disbursement by grantees
and subgrantees must be follawed
whenever advance p...1.......t proced1a-es
are used. GraD tees mollt establish
reasonable procedures to ensure the
receipt of reports on subgrantees' cash
balances and cash disbursement! in
sufficient time to enable them to prepan!
complete and accurate cash transactions
reports to the awarding agency. When
advances are made by letter-oC-credit or
Published by Warren, Gorham & Lamont. Inc.
44
COMMUNITY DEVELOPMENT
I
\
,
disbursements. The working capital
advance method of payment shall not be
used by grantees or subgrantees if the
reason for using such method is the
unwillingness or inability oC the gHntee
to provide timely advance~e
subgrantee to meet the subgrantee's
actual cash diabW'lements.
(0 Effect of program income, refunds.
and audit recoveries on paymenL (1)
Grantees and subgrantees shall disburse
repayments to and illterest earned on a
revolving fund before requnting
additional cash payments for the same
activity.
(2) Except as provided in paragraph
(0(1) DC thi.8 section, grantees and
subgrantees shall disburse program
income, rebatn, refunds. contract
settlements. audit recoveries and
interest eamed on such funds beCore
requesting additional cash payments.
(g) Withholding payments. (1) Unless
otherwise required by Federal statute,
awarding agencies shall not withhold
payments for proper charges inCWTed by
grantees or subgrantees unless-
(i] 'The grantee or subgrantee has
f~iled to comply with grant award
conditicns 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 graat, shall be released
to the grantee upon subsequent compli-
ance. When a grant is suspended, payment
adjustments will be made in accordance
with ~ 85.43(c).
(3) A Federal agency shall not make
payment to grantees for amounts that
are withheld by grantees or subgrantees
from payment to contractors to assure
satisfactory completion of work.
Paymenta shan be made by the Federal
agency when the grantees or
subgrantees actuaYy disburse the
withheld fuDda to the contra don or to
escrow aCCOUDta established to assure
sa osfactory compietion oC work.
(h) Cash depositories. (1) Consistent
with the natioDal goal of expanding thl!
opportunities for minority businesa
enterprises. grantees and subgrantees
are encouraged to use minority banks (a
bank which is oWDed at least 50 percent
by minority group members). A list of
minority owned banks can be obtained
from the Minority Business Development
Agency.DeparUnentoCCoDUDe~
Washington. DC 20230.
(2) A grantee or subgrantee shall
maintain a separate bank account only
when required by Federal-State
agreement.
(i) Interest earned on odvances.
Except for interest earned on advances
of funds exempt under the
f. -:}
:"t
-
lntergovemmental 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.
~ 85.%2 Allowable com.
(a) Limitation on use offunds. Grant
funds may be used only for:
(1) The allowable costs of the
_grantees. sutijrantees and cost-type
contractors. including allowable costs in
the form of payments to fixed-price
contractors: and
(2) Reasonable fees or profit to cost-
type contractors but not any Cee 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 costs. Allowable costs win be
determined in accordance with the cost
principles applicable to the organization
incurring the costs. The Collowing chart
lists the kinds of organizations and the
applicable cost principles.
For lIle COlIS 01 _ I Use lIle princ:jpIes in-
Slate. Ioc:aI or Indian OMS Circular A~7.
lI'IblII goo..mment.
PriIIal. nonprolil 08M CItcuIer A-122.
organiZalion 01hlIr ltIen
lift (1) IftStJIuIiOn 01
higher education. 121
noSpRlI, or (3)
organiZation Il8mecl in
OMS Ctrl:Ular A-I22
as nol subject to that
arc:utar.
Educa1lonal instituliona-.l OMS Crl:uIar A-21.
For-prg.il orgBnIZltDOn 48 CFA Pan 31.
otnar man a hOIpaI Conlrac1 Cost
and an organiZa1lCln PnncipIes and
named in 08'" Procedures. or uniform
CircaIar A-I22 as IlOC COIl accounDng
8UIljecIto lhat eircuIar. stand8nlS tnat comply
WItIl cost llmCIClIes
acceplabIe to tne
Fed8lW agency.
~ 85.23 Period of aftilability of funds.
(a) General. Where a funding period is
specified. a grantee may charge to the
award only coats resulting from
obligations oC 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 obligalions
incurred under the award not later than
Published by Warren, Gol1lam & 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 aMual Financial
Status Report (SF-269). The Federal
agency may extend this deadline at the
request of the grantee.
~ 85.24 Matching or cost shariag.
(a) Basic rule: Costs and contributions
acceptable. With the qualifications and
exceptions listed in paragraph (b) of this
section, a matching or cost sharing
requirement may be satisfied by either
or both of the fonowing:
(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-{l)
Costs borne by other Federal grant
agreements. Except as provided by
Federal statute, a cost sharing or
matching requirement may not be met
by costs borne 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 oC this section. general revenue
sharing funds distributed under 31
U.S.c. 6702 are not considered Federal
grant funds.
(3) Cost or contributions counted
tlJward~ other FedlilraJ cos:t~-IZnaring
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 fllUlnced by program incomL
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 described in ~ 85.25(g).)
(5) Services or praperty financed by
income earned by contractors.
Contractors under a grant may earn
income from the activities carried out
under-the contract in addition to the
amounts earned Crom the party
awarding the contract. No costs of
services or property supported by this
45
09:1556
income may COlUlt tQward satisfying a
cost shariJ1g 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-
kin~ c~ntributions counting towards
satiS,fymg a cost shanns or matching
reqwrement must be verifiable from the
records of grantees and subgrantee or
cost-type contractors. These records
must show bow the value placed on
third party in-kind contributions wu
derived. To the extent feasible.
volunteer services will be supported by
the same methods that. the organization
uses to support the aHocabiJity of
regular personnel costs.
. (7~ Special ~tan,dard8 for third party
In-kind contributions. (i) Third party in-
kind contributions count towards
satis!Yins a cost sbaring or matching
requ~17ment only ~bere, if the party
recelvmg the contnbutions 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
had to pay for them. the payme'1ts
would bave been an indirect costs.
Costs sharins or matching credit for
such contributions shall be given only if
the gtantee. subgrantee, or contractor
~as. established. along with its regular
mdlrect cost rate. a special rate for
allocating to individuAl projecta or
programs the value of the contributions.
(Hi) A third party in-kind contribution
to a fixed-price contract may count
tow~s satiso/ing a cost sharing or
~tchmg requirement only if it results
10:
(A) An increase in the 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.
. (i~) The va~ues placed on third party
In-km~ contributions for cost sharing or
matchmg 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.
(cl Valuation, of donated services-{l)
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 subgranlee does not have employees
HOUSING AND DE1LOPMENT REPORTER
performins similar work. the rates will and only depreciation or use allowances
be consistent with those ordinarily paid may be counted for donated equipment
by other employers for similar work in and buildings. The depreciation or use
the same labor market. In either case; a allowances for this property are not treat-
reasonable. amount for Cringe benefits ed as third party in-kind cont~butions.
may be included in the valuation. Instead. they are treated as costs mcurred
(2) EmployHS of other ol'BClnizations. by the grantee or subgrantee. They are
When. an employer other than a grantee. computed ~d allocated (us~y as indi-
subgrantee. or cost-type contractor ~ ~ts) m. aa:o~ce W1~ the cost
furnishes free of charge the servicel of pnnClplcs spec:ifi~ m ~ 85.2,2. In the same
an empJoyee in the employee's normaJ way as dep~on or use all~v.:ances for
line of work. the servicel wUl be valued purchased eq~~t and buildings. The
at the employee's resuJar rate of pay amount of dep~tJon or use ~o~ancc:s
exclulive or the employee's fringe for donated eqwpmcIlt and buildings IS
b Ii based OD the property's market value at
ene Its and overhead costs. If the the time it was donated.
services are in a different line of work. '
paragraph (C)(l) of this section applies. (0 Valuation of grantN or subgra~tee
(d) Valuation of third party donated dona~t!,real property for constructIonl
supplies and loaned equipment or space. ocqUJSJtIon. If a grantee or lubgrantee
(1) If a third party donates supplies, the donat~~ ~al pro~e,~ for a ,construction
contribution will be valued at the or faclhtiltl acqUII.tion proJect, the
market value of the suppliel at the time current market value of that property
of donation. may be counted as cost sharing or
(2) If a third party donates the use of matching. If any part of the donated
equipment or space in a building but property was acquired with Federal
retains title, the contribution will be funds. only the non-federal share of the
valued at the fair rental rate of the property may be counted as cost sharing
equipment or space. or matching.
(e) VaJuatio'! or third party donated (g) Appraisal of real property. In some
eqUIpment, buildIngs, and land. If a third cases under paragraphs (d), (e) and (0 of
party donates equipment. buildings. or this section. it will be necessary to
land. and title passes to a grantee or establish the market value of land or a
subgrantee. the treatment of the donated building or the fair rental rate of land or
property wiJI depend upon the purpose of space in a buildins. In these cases. the
of the grant or subgrant. as follows: Federal agency may require the market
(1) Awards for capital expenditures. If value or fair rental value be set by an
the.,purpole of the grant or subgrant is to independent appraiser. and that the
assls~ ~e grantee or subgrantee in the value or rate be certified by the grantee.
acqUIsition of property, the market value This requirement will allO be imposed
of that property at the time of donation by the grantee on subgrantees.
may be counted as cost sharing or ' .
matching, ~ 8S.2S ProIflUll income.
(2), C?~er awards. If assisting in the
acqUISItion of property is not the
purpose of the grant or subgrant.
paragraphs (e)(2) (il and (ii) of this
section apply:
(i) If approval is obtained from the
awardins agency, the market value at
the time of donation of the donated
equipment or buildings and the fair
rental rale of the donated land may be
~ounted as cosl sharing or matc;hing. In
..ie case of a l'ubgrant. the terms of the
grant agreemf'nl may require that the
approval be obtained from the FederaJ
agency as well as the grantee. In all
cases. the approval may be given only.if
a purchase of the equipment or rental of
the land would be approved as an .
allowable direct COlt. If any part of the
donated property was acquired with
Federal funds. onJy the non-federal
share of the property may be counted as
cost-sharing or m!itching.
(ii) If approval is not obtained under
paragraph (e)(2)(i) of this section. no
amount may be counted for donated land,
I
Published by Warren, Gorham & Lamont, Inc,
(a) General. Grantees are encouraged
to earn income to defray program costa.
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 ~ade wit,h gra,nt funds. Except as
otherwise proVided In regulations of the
Federal agency. program income does
not include interest on grant funds,
reba,tes, credits. discounts. refunds, ete.
and mterest earned on any of them.
(b) Definition of program income.
Pro~m income means gross income
,:celved by the grantee or subgrantee
di~~ly generated by a grant supported
actIVity. or earned only as a result of the
~an~ agreement durins the grant period.
Dunng 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
;
.i;l
~
--
COMMUNITY DEVELOPMENT
)
(c) Cost of generating pragraJ
income. If authorized by Federal
regulations or the grant agreement. C:O&ts
incident to the generation of program
income may be deducted from gross
income to detennine program income.
(d) Govemmental revenues. Taxes,
special assessments, levies, fines, and
other such revenues raised by a grantee
or subgrantee are not program income
unless the revenues are specifically
identified in the grant agreement or
Federal agency regulations as program
income.
(e) Royalda. Incoaie Croai royalties aad
. license fees for copyrighted material, pat.
ents, and inventioos deYeloped by a grant-
ee or subgrantee is program income only if
the revenues are specifically identified. in
the grant agreement or Federal agency
reguJatioos as program income. (See
fi 85.34.)
ro Property. Proceeds from the sale of
real ~roperty or equipment will be han.
dled m accordance with the requirements
of fifS5.31 aad 85.32.
(g) Use of program income. Program
income shall 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 Lhe alternatives). In
specifying alternatives, the Federal
agency may distinguish between income
earned by the grantee and income
earned by iiubgrantees and between the
sources. kinds, or amounts of income.
When Federal agencies authorize the
alternatives in paragraphs (g) (2) and (31
of this section. program income in
excess of any Umita stipulated shall also
be deducted fromtbutlays.
(1) Deduction. Ordinarily program
income shall be deducted from total
allowable costs to detennine the net
allowable costs. Program income shall
be used for current costs unless the
Federal agency authorizes 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 r.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) Inct)IM after the award period I
There are no Federal requirements
governinl the cDspo.ition of program
income earned after the end of the
award period (i.e.. until the endiDg date
of the final financial report. see
paragraph (a) of this section). unle.. the
terms of the agreement or the Federal
agency regulations provide otherwis~~
f 85.26 N....Federal aucliL
(a) Hosie Rule. Grantees and
subsrantees are respcmsible for
obtaining audilJ"in accordance with the
Single Audit Act of 1984 (31 USe. 7501-
. 7) and Federal agency implementing
. regulation.. The audita shall be made by
an independent auditor in accordance
with generally accepted government
auditing standards covering financial
and compliance audita.-
(b) Subgrantees. State or loc:!l
governments. as those terms are defined
for purposes of the Single Audit Act.
that receive Federal financial assistance
and provide 525.000 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 OMB Circular
A-nO, "Uniform Requirements for
Grants and Other Agreements with
Institutions of Higher Education.
Hospitals and Other Nonprofit
Organi%ations" have met the audit
requirement Commercial contractors
(private forprofit llnd private and
governmental organizations) providing
goods and services to State and local
governments are not required to have a
single audit perfonned. 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) Oetenninewhather 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 the Act.
Circular A-I10,'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 subgrantee to pennit
independent auditors to have access to
the records and financial statements.
Published by W8mIn. Gorham & Lamont. . Inc.
W:loo7
HDR .Rr -372-
4-25-88
(c) A.uditor .lectiDn. bi amUiging' for
audit services, i 8.5.36 sball be followed.
Cbang~ Property, 8D~ SubawanU
i 85.30 0laDges.
(a) General. Grantees and subgrantees
are permitted to rebudget within the
approved direct cost budget to meet
unanticipated requirementa and may
make limited program changes to the
approved project. However, unless
. waived by the awarding agency, certain
types of post-award changes in budgetJ
and projects shall require the prior
written approval of the awarding
agency.
(b) Relation to cost principle;': The appli-
cable cost principles (see fi 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 DOt.
(c) Budget changes. (1)
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 budsated 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
share exceeds $100.000..'
(iii) Transfer of funds allotted for
training allowances (i.e.. from direct
payments to trainees to other expense
categories).
(2) Construction projects. Grantees
and subgrantees shan obtain prior
written approval for any budget revision
which would result in the need for
additional funds.
(3) Combined construction and
nonconstruction projects. When a grant
or subgrant provides funding for both
construction and nonconstrucoon
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 changes. Grantees
or subgrantees must obtain the prior
approval of the awarding agency
whenever any of the following actions is
anticipated:
47
09:1558
I
HOUSING AND DEVELOPMENT REPORTER
I
(1) Any revision of the scope or (c) Disposition. When real property is
objectives 01 the project (regardless of no longer needed for the originally
whether there is an associated budget authorized purpoee. the grantee or
revision requiring prior approval). subgrantee will request disposition
(2) Need to extend the period of instructions from the awarding agency.
availability of funds. The inatnaCtiODl will provide for one of
(3) Changes in key persons in cases the followm, alternatives:
where specified in an application or a (1) Retllntion of title. Retain title after
grant award, In research projects. a compenaalin8 the awarding agency. The
change in the project director or amount paid to the awarding agency
principal investigator shall always will be computed by applying the
require approval unless waived by the awarding apncy's percenta,e of
awarding agency. participation in the coat of the orisinal
(4) Under nonconstructiOll projects, purchase to the fair market value of the
contracting out, subgranting (if authorized property, However, in those situationa
by law) or otherwise obtaining the services where a grantee or subgrantee Is
of a third pany to perform activities which disposing of real property acquired with
are. central to the ~u.--poses of the. award. grant funda and acquiring replacement
This approval req~ent is in addition . real property under the same program,
to the approval reqwrements of ~ 85.36 the net proc:eeda &om the dispoaition
but .does not app~y to the proc:urement of may be used as an offset to the cost of
eqUIpment, supplies, and general support the replacement n""perty
Services. ,.. - .
(e) Additional prior approval (2) Sale of property. Sell !he property
requirements. The awarding agency may !tnd compensate the aw~ agency,
not require prior approval for any ~e amount due to the aw~ agency
budget revision which is not described wdl b~ calculat~ by applymg the
in paragraph (c) of tbis section. awa~, ,ag~y s percenta,. of. ,
(t1 Requesting prior approval. (1) A partlCIpatlon m the cost of the cngmal
request for prior approval of any budget purcbase to ~e proceeds of the sale
revision will be in lbe same budget after deduction, of any ac~al and
formal the grantee used in its reasonable 8ellmB an~ fixi;n8-up,
. application and shall be accompanied expenses. U the grant IS still active, the
by a nalTative justification for the net proceeda ~m sale may ,be offset
proposed revision. , agamst the ongmal cost of tne property.
(2) A request tor a prior approval untkr ~hen a grantee or subgrantee IS
the applicable Federal cost principles (see direCted to sell property, sales
~ 85.22) may be made by letter. pro~dures shall be ~ol1owed that
(3) A request by a liubgrantee [or prior pl'OVl~e for competitio~ to the ,extent
c.pproval will be addressed in writing to pra~cable and result ID the highest
the grantee. The grantee will promptly pOSSible retum. . ,
review such request and shall approve (3) Tronsfer of title. Transfe~ title to
or disapprove tbe request in writing. A the .awarding agency or to a third-p~
grantee will not approve any budget or deSignated/ approved by the awarding
project revision which is inconsistent agener. The grantee or subgrantee shall
with the purpose or term8 and be pa~d an amount calculated by
conditions of the Federal grant to the applymg the grant~~ or !ub~ntee's
grantee. If the revision. requested by the percentage of partiCIpation ID the
:>ubgrantee would result in a change to purchase ?f the real property to the
the grantee's approved project whic:h current fm market value of the
requires Federal prior approval. tl,e property.
grantee will obtain the Federal d~f!ncy's ~ 85.31 1:'~~ t.
approval before approving the ~...pmeJI
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 subsr<ln!ee
respectively.
. (b) Use, Excepl as otherwise provided
::y Federal statutes. real property will bf!
used for the originlllly authorized
;:urposes as long as needed for thnt
purposes, and the grantee or subgrantee
shall not dispose of or encumber its title
or other interests.
(a) Title. Subject to the obligations
and conditions set forth in this section.
title to equipment acquired under a
grant or 8Ubgrant will vest upon
acquisition in the grantee or subgrantee
respectively.
(b) States. A State will use. manage.
and disp088 of equipment acquired
under a grant by the State in accordance
with State laws and procedures. Other
grantees and subgrantees will follow
paragraphs (c) duough (e)ofUtis
8ection.
(c) Use. (1) Equipment shall be used
by the grantee or subgrantee in tbe
program or project for which it was
Published by Warren. Gorham & Lamont. Inc.
acquired as long as needed. whether or
not the project or program continues to
be supported by Federal funds. 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 shall
also make equipment available foruse
on other projects or progranu currently
or previously supported by the Federal
Government. providina such use will not
interfere with the work on the project. .
or program for which it was originally
acquired. F"U'lIt preference for other use
sball be given to otber programs or
projects supported by the awarding
agency. User fees should be considered
if appropriate.
(3) Notwithstanding the encouragement
in ~ 85.25(a) to earn program inco~ the-
grantee or subgrantee must not use equip-
ment acquired with grant funds to provide
services for a fee to compete unfairly with
private companies that provide equivalent
services, unless specifically permitted or
contemplated by Federal statute.
r4) Wben acquiring replacement
equipment. the grantee or subgrantee
may use the equipment to be replaced a8
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 awarding 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, wbo bokis title, the acquisition
date. and cast 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 108s, damage. or
theft of the property. Any loss, damage.
or theft shall be investiAated.
(4) Adequate maintenance procedures
must .be developed to keep the property
in good condition.
(5) U the grantee or subgrantee is
authorized or required to sell the
property, proper sales procedures must
48
COMMUNITY DEVELOPMENT
\
I
be established to ensure the Jest
possible return.
(e) Disp06ition. When on,mal or
replacement equipment acquired under
a grant orsubgrant is no longer needed
for the original project or program or for
other activiti.. currently or previously
supported by a Federal agency.
disposition of the equipment will be
made as follows:
(1) Items of equipment with a current
per-unit fair market value oC less than
55,000 may be retained. .old or
otherwise disposed of with no further
obligation to the awarding agency.
(2) Items of equipment with a current
per unit fair market value in excess of
55,000 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 .hare of
the equipment.
(3) In cases where a grantee or
subgrantee fails to take appropriate
disposition actions, the Ilwarding agency
may direct the grantee or subgrantee to
take excels and disposition actions.
(f) Federal equipment. In the event a
grantee or subgrantee is provided
federally-owned equipment:
(1) Title will remain vested in the
F!!deral Government.
(2).Grantees or subgrantees will
manage the equipment in accordance
with Federal agency nUel and
procedures. and submit an annual
inventory listing.
(3) When the equipment is no longer
needed. the grL'1tee 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 shan 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
support of the project for which it was
acquired. IT the Federal awarding agency
fails to issue disposition instructions with-
in the 120 calcndar-day period the grantee
siWl follow 8S.32(e).
(3) When title to equipment is
trsnsfetTed, 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.
:j
-
t 15.33 Supplies.
(a) Title. ntle to supplies acquired
under a grant or subgrant will vesL upon
acquisition. in the grantee or subgrantee
respectively. .
(b) Di8position. If there is a resldu~l
inventory of UDUNd .upplie. exceedins
55.000 in total asansate rair market
value upon termination or completion of
the award. and if the supplie. are not
needed for any other federally
sponsored prosram. or projecta, the
grantee or sub8J'llDtee .hall compensate
the awardins agency for its share.
i 85.34 Copyrigbts.
The Federal aWllrding agency
reseIV.. a royalty-free. nonexclusive.
and irrevocable license to reproduce,
publiah or otherwise use, and to
authorize others to use, for Federal
Government purposes:
(a) The copyright in any work
developed under a grant. subgrant. or
contract under a grant or subgrant: and
(b) Any rights of copyright to which a
grantee, subgrantee or a contractor
purchases ownership with grant support.
t 85.35 Subawards .to debarred and
suspeaded parties.
Granlees and subgrantees must not
make any award or permit any award
(subgrant or contract) at any tier to any
'. party which is debarred or suspen~~d or
is otherwise excluded from or ~eligible-
for participation in Federal asslStance
programs under Executive Order 12549.
"Debarment and Suapension. "
i 85.36 Proc:uremeat
(a)States. When procuring prope~
and services under s grant. a State will
follow the same policies and procedures
it uses for procurements from ita non.
Federal funds. The State will ensure that
every purchase order or other contract
includes any clauses required by
Federal statutes and executive orders
and their implementing regulation~.
Other grantees and subgrantees Will
Callow paragraphs (h) through (i) in this
section.
(bl Procurement standards. (1)
Grantees and subgrantees will use their
own procurement procedures which
reflect applicable Sta~e and I~ laws
and regulations, pro"ded that tile
procurements conform to applicable
Federllllaw and the standards identified
in this section.
(2) Grantees and subgrantees wHl
maintain a contract administration
system which ensures th~t c~ntractors
perform in accordance WIth tne terms.
conditions, and specifications of their
Published by Warren, Gorham & Lamont. Inc.
I
09:1ooS
HDR RF -372
4-25-88
contracts or purchase orden.
(3) Grantees and .ubgrantees will
maintain a written code of .tandarda of
conduct governing the performance of
their employee. engaged in the award
and administration of contraeta. No
employee, officer or agent of the grantee
or subgrantee shall participate in
selection. or in the award or
adminiatration of a contract supported
by Federal funda if a contlict of interest.
real or apparent. would be involved.
Such a conflict w9uld anse when:
(i) Tbe employee. officer or agent.
(ii) Any member of hia 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 Cor award. The grantee's or
subgrantee's officers. employees or
agents will neither solicit ~or accept
gratuities, favors or anything of
monetary value from contractors,
potential contractors, or parties to
subagreements. Grantee and
subgrantees may set minimum rules
where the financial interest ia not
substantial or the gift is an unsolicited
item of nominal intrinsic value. To the
extent permitted by State or local law or
regulations, such standards or c~nduct .
will provide Cor penalties, sanctions, or
other disciplinary actions for violations
of such atandards by the grantee's and
subgrantee's officers, employees, or
agents. or by contractors o~ their age~ts.
Tna awarding agency may ID regulation
provide additional prohibitions relative
to real. apparent. or potential conflicts
of interest.
(4) Grantee and sub grantee
procedures will provide for a review of .
proposed procurements to avoid
purchase of unnecessary or duplicative
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 subgrantees are
encouraaed to enter into State and local
inte!'govemmental agreements for
procurement or use of common goods
and services.
(8) Grantees and subgrantees are
encouraged to use Federal excess and
surplus property in lieu of purchasing
new equipment and property whenever
such use is feasible and reduces project
costs.
49
09:1560
(1J Grantees and .ub8J'llntees are
encouraged to de vahle engineering
claWles in contracta for corwtruction
projects of .ufficient size to offer
reasonable opportwtities for ccm
reductions. Value engineering i. a
systematic and creative anaylsis of each
contract item or ta.k to enaure that ita
easential function is provided at the
overall lower coa.
(8) Granten aDd SUbSJ'llDtees will
make awards only to re.po~ible
contractors ponelSinl the ability to
perfonn aucceseiully ander the terms
and condiUona of a prapoeed
procuremeaL Couideratioa wiD be
given to such matters as contractor
integrity, compliance with public policy,
record of past performance, and
fmancial and teclmical resources.
(9) Grantees and subsnmteea win
maintain record. .ufficient to detail the
significant hi.tol'7 of a procurement.
These recorda will indudlt. but are not
neces.arily limited to the following:
rationale for the method of procarement,
selection of contract type. contractor
selection or rejection, and the basis for
the contract price.
(10) Grantees and subgrantee. will
use time and material type contracta
only-
(i) Alter a determination that no other
contract is suitable, and
(ii) lithe contract include. a ceiling
price that the contractor exceeds at its
own risk.
(11) Grantees and subgrantees alone
will be responsible. in accordance with
good administrative practice and sound
bWliness judgment, for the settlement of
all contractual and administrative issues
arising out of procurementa. These
issues include, but are not limited to
source evaluation. protests, disputes.
and claims. nese standards do not
relieve the grantee or subgrantee of any
cClntractual 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 oflaw will be refeSTed to the
local. State, or Federal authority having
proper jurisdiction.
(12) Grantees and subgrantees will
have protest procedures to handle Bnd
resolve disputes relating to their
procurements and shall in all instances
disclose information regarding the
protest to the awarding agency. A
protestor must exhaust all
administrative remedies with the
granleeand .ubgrantee before punuing
a protest wi.th 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 Ihis
section (violations of State or local law
HOUSING AND DEVELOPMENT REPORTER
I will be under the jurisdiction of State or
local authorities) and
(ii) Violationa of the grantee's or
subgrantee's protest procedures for
failure to review a complaint or protest.
Protests received by the Federal agency
other than' those specified above will be
referred to the grantee or subgrantee.
(c) eom/Mtition. (1) All procuremc:nt
transactions will be conducted ill a man-
ner providiDg fuD and open competition
consistCftt with .. standards t 8~.36.
Some of the situations coasidered to be
restrictive oC competition include but are
not limited to:
(i) Placing unreasonable requi~ments
on firm. in order for them to qualify to
do bWlines..
(ii) Requiring unnecessary experience
and excessive bontling.
(iii) Noncompetitive pricing practices
between firms or between affiliated
companie..
(iv) Noncompetitive awards to
consultants that are on retainer
contracts.
(v) Organizational conflicts of
interest.
(vi) Spe.cifying only a "brand name"
product instead of allowing "an equal"
product to be offered and describing the
performance of other relevant
requirements of the procurement. and
(vii) Any arbitrary action in the
procurement process.
(2) Grantees and subgrantees will
conduct procurements in a manner that
prohibits the use of ..~torily or
administratively imposed in-State or
local geographical preferences in the
evaluation of bids or proposals. except
in those cases where applicable Federal
statule. t!xpresaly mandate or
encourage geographic preference.
Nothing in this section preempts State
licensing laws. When contracting for
architectural and engineering (AIEl
services. geographic hx:ation mar be a
selection criteria provided its
application leaves au 8ppl'Opriate
number of qualified finRa. given the
nature and size of the project. to
compete for the coatract.
(3) Grantees will have written
selection procedures for procurement
transactions. These procedures will
ensure that all solicitatiODs:
(i) Incorporate a clear and accurate
description of the technical
requirements for the material. product.
or service \0 be procured. Such
description shall not. in competitive
procurements. contain features which
unduly restrict competition. The
description may include a statement of
the qualitative nature of the malerial.
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.
proluct specifJCa lion~ should be. .
avolcit:c if at all po,slble. When It I'
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 mWlt be met by
offeron sball be clearly stated: and
(ii) Identify all requirements wbich tbe
offerors mWlt fulfill and all other factora
to be used in evaluatinS bids or
proposals.
(4) Grantees and subgrantees will
ensure that all prequalified lists of
penon.. fum.. or product. whi~ are
used in acquiring goods and servIces are
current and include enough qualified
sourcas to enaure maximum open and
free competition. A.lso, grantees and
subgrantees will not preclude potential
bidden from qualifying during the
solicitation period.
(d) Methods of procurement tD be
{oJ/owed. il) Procurement by small
purchaH proceDll/'e8. Small pW'Chase
procedures are those relatively simple
and informal procurement methods for
securios services. supplies, or otlier
property that do DOt coat more than
$25,000 in the aggrega te. If .mall
purchase procurements are Wled. price
or rate quotations will be obtained from
an adequate number of qualified
sources.
~)Procuremc:ntbys~l~buu(fu~
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 tenDS and conditions of the iIlvi-
tation for bids, is the lowest ill price. The
sealed bid method is the preferred method
for procuring construction, if the condi-
tions in ~ 8S.36(d)(2)(i) apply.
(i) In order for sealed bidding to be
feasible. the. following conditions should
be present:
(A) A complete. adequate. and
realistic specification or purchase
description ia available:
(B) Two or more responsible bidden
are willing and able to compete
effectively for the business; and
(e) The procurement lends itself 10 a
fmll fixed price contract and the
selection of the successful bidder can be
made principally on the basis of price.
(ii) 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 invitation for bids. which will
include any specifications and pertinent
50
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COMMUNITY DEVEL'TMENT
attachments. shall define the items or
services in order for the bidder to
properly respoocl;
(C) 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 and reaponsible bidder.
Where specified in bidding docwnenta.
factors each a8 clillClO1mts. transportation
cost, and life cycle costs shall be
consid1lred in de1enniDing whieb bid is
lowest. Paymeat diaC01mts will only be
used to detenaine the.low bid when
prior eXl)erieDce indicates that sueb
discounts are usually taken advantage
of: and
(E) Any or an bids may be rejected if
there is 8 80md documented reason.
{3J Procurement by competiti.,e
proposals. The technique of competitive
proposals is normally conducted with
more than one source submittins an
offer. and either 8 ftxed-price or cost-
reimbursement type contract is
awarded. It i8 generally used when
conditions are not appropriate for the
use of sealed bids. If this method is.
UBed. the following requirements apply:
(i) Requests for proposals will be
publicized and identify all evaluation
factors and their rebltift importance.
Any response to pubf<<:ized reqlJests fM
proposals shall be honored t~ the
maximum extent practicat:
(ii) Proposais will be solicited from <in
adequate number ~f qualified sources:
(iii) Grantees and subgrantees will
have a method for conducting technical
evaluations of the pfoposais M!eeived
and for selecting awardees:
(iv) Awards will be ma~ to the
responsible firm whose proP'lsal is most
advantageous to the program. with price
and other factors considered: and
(v) Grantees and subgrantees may use
competitive proP'lsal procedures for
qualifications-based procurement of
architectural I engineering (AlE)
professional sernces whereby
competitors' quanfications are
evaluated and the most qualified
competitor is selected. subject to
negotiation of fail' and reasonable
compensation. The method. where price
is not used as a selection faclor. can
only be used in procurement of AlE
professional services. It cannot be used
to purchase other Iypes of services
though AlE firms are a potential source
to perform the proposed effort.
(4) Procurement by noncompetitive
proposals is procurement through
solicitation of a proposal from only one
source. or after solicita lion of a number
of sources. competition is determined
inadequate.
(i) Procurement by noncompetitive
)
I
..~
'I'"
-.-; ~r'
proposals may be used only when the
award of a contract is infeasible under
small purchase procedures, sealed bids
or competitl_ proposals and one of the
following circumstances applies:
(A) The item is available only from a
single source:
(B) The public exigency or emergency
for the requirement will not permit a
delay resulting from competitive
solicitation.
(C) The awarding agency authorizes
noncompetitive proposals: or
(D) After solicitation of a number of
sources, competition is 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 subgrantees may be
required to submit the proposed
procurement to the awardins agency for
pre-award review in accordance with
paragraph (8) of this section.
(e) Contracting with smoJJ and
minority firms, women's business
enterprise and labor surplus area firms.
(1) The grantee and subgrantee will take
all necep' 1ry affarmative 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 business, and women's
business enterprises;
(v) Using the services and assistance
of the.Small Business Administration.
and the Minority Business 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 and 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
PubliSl'led by Warren. Gorham & 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. 8.g., under professional. consulting,
and architectural engineering services
contracts. A coat analysis will be
necelsary when adequate price
competition is lac1cing, and for sole
source procurements, including contract
modifications or change orders, unless
price resonableness can be established
on the basis of a catalog or market price
of a commercial product sold in
substantial quantities 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 bome 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 sUlTOunding 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.
(g) A warding agency review. (I)
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 and I or
service specified is the one being
proposed for purchase. This review
generally will take place prior to t~
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 .....]
51
09:1562
procurement documents. such as
requests for proposals or invitalions 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 secHon: 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
(Hi) 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 oc:cur 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 pcocurement 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.
01) Bonding requirements. For
construction or facility improvement
contracts or subconstracts exceeding
$100.000, the awarding agency may
accept the bonding policy and
requirements of the grantee or
subgrantee provided the awarding
agency has made a determination that
U~e awardIng agency's interest is
adequately prolected. 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 DEVELOPMENT REPORTER\
I-bond. certified check. or other (COnlruction contracts awarded by \
n('gotiable instrument accompanying a grantees and subgrantees in excess of
bid as assurance that the bidder will. 52.000. and in excess of 52.500 for other
upon acceptance of his bid. execute contracts which involve the employmenl
such contractual documents as may be of mechanics or laborers)
rp.quired within the time specified. (7) Notice of awarding agency
(2) A performance bond on the part ot requirements and regulations pertaining
the contractor for 100 percent of the 10 reporting.
contract price: A "perfoJ?Danc,e bond" is (8) Notice of awarding agency
one executed tn connection With a requirements and regulations pertaining
contract t~ secu!f! f~lfillment of all the to patent rights with respect to any
contractor s oblagations under such discovery or invention which arises or is
contract. developed in the course of or under such
(3) A payment bond on the port of the
contractor for 100 percent of the contract.. .
contract price. A "payment bond" is one (9) Awar~1Dg ageno/ .requlremen~s
executed in connection with a contract and regulatIons pertalDlDg to copynghts
10 assure payment as required by law of and rights in data.
all persons supplying labor and material (10) Access by the grantee. the
in the execution of the work provided subgrantee. the Federal grantor agency,
for in the contract. the Comptroller General orthe United
(i) Contract provisions. A grantee's States, or any of their duly authorized
and subgrantee's contracts must contain representatives to any books,
provisions in paragraph (i) of this documents. papers, and records of the
Seclion. Federal agencies are permitted contractor which are directly pertinent
10 require changes" remedies, changed to that specific contract for the purpose
conditions, access and records of making audit, examination. excerpts,
retention. suspension of work. and other and transcriptions. '
clauses approved by the Office of (11) Retention of all required records
Procurement Policy. for three years after grantees or
(1) A~su:a~ve, contractual. or subgrantees make final payments and
legal remedie~ m mstanees where all other pending matters are closed.
contractors V1ol~te or breach con~ct (12) C l' with all applicable
term~, and prov~de for such sanctions omp lance . nts
and penalties as may be appropriate. ~tandards. orders: or requlreme ,
(Contracts other than small purchases) Issued under section 306 of ~he Clear Air
(2) Termination for cause and for Act (42 U.S.C. 1857(h)), section 508 of the
convenience by the grantee or Clean ~ater Act (33 U.S.C. 1368).
subgrantee including the manner by Exe~utlve Order 11738: and
which it will be effected and the basis Environmental ProtectIon Agency
Cor settlemenL (All contracts in eXCess regulations (40 CFR Part 15). (Contracts.
of $10.000) subcontracts. and subgrants of amounts
(3) Compliance with Executive Order in excess of $100,000)
11246 of September 24. 1965 entitled (13) Mandatory standards and policies
"Equal Employment Opportunity," as relating to energy effiCiency which are
amended by Executive Order 11375 of cont3ined in Ihe state energy
October 13. 1967 and as supplemented in conservation plan issued in compliance
Department of Labor regulations (41 . with the Energy Policy and
CFR Part 50). (All construction contracts Conservation Act (Pub. 1.. 94-163).
awarded in excess of $10.000 by ~ 85.37 Subgraats.
grantees and their contractors or ia) States. States shall follow state
sublZJ'8ntees) law and procedures when awarding and
(4) Compliance with the Copeland administering subgrants (whether on a
"Anti-Kickback" Act (18 U.S.c. 874) as cost reimbursement or fixed amounl
supplemented in Department of Labor basis) of financial assistance to local
regulations (29 CFR Part 3). (All and lDdian tribalgovemments. States
contracts and subgrants for construction shall:
or repair) (1) Ensure that every subgranl
(5) Compliance with the Davis-Bacon includes any clauses required by
Act (40 U.S.C. 2768 to a-7) as Federal statute and executive orders
supplemented by Department of Labor and their implementing regulations:
regulations (29 CFR Part 5). (2) Ensure that subgrantees are aware
(Construction contracts in excess of of requirements imposed upon them by
S2.ooo awarded by grantees and Federal statute and regulation:
subgrantees when required by Federal (3) Ensure that a provision tor compli-
grant program legislation) anee with Section 85.42 is placed in every
(6) Compliance with Sections 103 and cost reimbunement subJO'aDt: and
107 of the Contract Work Hours and (4) Conform any advances of grant
Safety Standards Act (40 U.S.c. 327-330) funds to subgrantees substantially to the
as supplemented bv Department of same standards of timing and amount
Labor regulations (29 CFR Part 5). that apply to cash advances by Federal
agencies.
Published by Warren. Gorham & Lamont. Inc.
57
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COMMUNITY DEVELOPjNT
(b) All other grantees. All other grantees
shall follow the provisions of this part
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 part;
(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,
certain provisions of this part do not
apply to the award and administration of
sub grants:
(1) Section 85.10;
(2) Section 85.11;
(3) The letter-of-credit procedures spec-
ified in Treasury Regulations at 31 eFR
Part 205, cited in ~ 85.21; and
(4) Section 85.50.
Reports, Records, Retention, and
Enforcement
~ 85.40 Monitoring and reporting
program performance.
/ (a) Monitoring by grantees. Grantees
are responsible for managing the ~o-
day operations of grant and subgrant
supported activities. Grantees must mon-
itor grant and subgrant supported 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
ciecides that performance information
available from subsequent applications
contains sufficient information to meet
its programmatic needs, require the
grantee to submit a performance report
only upon expiration or termination of
grant support. Unless waived by the Fed-
eral agency this report will be due on the
same date as the final Financial Status
Report.
(1) Grantees shall submit annual per- ·
formance reports unless the awarding
agency requires quarterly or semiannual
reports. However,performance reports
will not be required more frequently than
quarterly. Annual reports shall be due 90
day~ after the grant year, quarterly or
semi-annual reports shall be due 30 davs
after the reporting period. The final per-
formance report will be due 90 days after
the expiration or termination of grant
support. If a justified request is submitted
by a grantee, the Federal agency may
extend the due date for any performance
report. Additionally, requirements for un-
necessary performance reports may be
waived by the Federal agency.
(2) Performance reports 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 pertinent 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 reports.
(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 part, on-site technical in-
spections and certified 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 reports only when
considered necessary, and never more
frequently than quarterly.
(d) Significant developments. Events
may occur between the scheduled perfor-
mance reporting dates which have signifi-
cant impact upon the grant or subgrant
supported activity. In such cases, the
grantee must inform the Federal agency
as soon as the following types of condi-
tions become known:
( 1) 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 malee site
visits as warranted by program needs.
(0 Waivers, extensions. (1) Federal
agencies may waive any performance
report required by this part if not needed.
(2) The grantee may waive any perfor-
mance report from a subgrantee when not
needed. The grantee may extend the due
date for any performance report from a
subgrantee if the grantee will still be able
PubIisI'1ed by Warren. Gomam & Lamont. loc.
I
09:1563
HDR RF-417
1-15-90
to meet its performance reporting obliga-
tions to the Federal agency.
~ 85.41 Financial reporting.
(a) General. (1) 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 reports to Fed-
eral agencies, or
(ii) 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 fonns required under this part.
(5) Federal agencies may provide com-
puter outputs to grantees to expedite or'
contribute to the accuracy of reporting.
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
report required by this section if Dot
needed.
(7) Federal agencies may extend the
due date of any financial report upon
receiving a justified request from a grant-
ee.
(b) Financial Status Report-(l) Form.
Grantees will use Standard Form 269 or
269A, Financial Status Report, to report
the status of funds for all Donconstruction
grants and for construction grants when
required in accordance with
~ 85.4 1 (e)(2)(iii) of this section.
(2) Accounting basis. Each grantee will
report program 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
convert 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 repon for
each project or program. However, the
repon 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 annual Iv. 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-
(1) 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 equipmenL
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 report.
(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
actions 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 adnnce 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 15 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 DEVEfPMENT 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) Reimbursemems. Requests for
reimbursement under nonconstruction
grants will also be submitted on Standard
Form 270. (For reimbursement requests
under construction grants, see paragraph
(e)(I) 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 constrJU:tion 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 the Request for
Advance or Reimbursement form, speci-
fied in ~ 85.41(d), instead of this form.
(ii) The frequency for submitting reim-
bursement requests is treated. in
~ 85.4l(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 check 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 the grantee, the
advances will be requested on the form
specified in ~ 85.41(d).
(iii) The Federal agency may substitute
the Financial Status Report specified in
~ 85.41(b) for the Outlay Report and
Request for Reimbursement for Con-
struction Programs.
(3) Accounting basis. The accounting
basis for the Outlay Report and Request
for Reimbursement for Construction Pro-
grams shall be governed by ~ 85.4l(b)(2).
~ 85.42 Retention and access
requirements for records.
(a) A.pplicability. (I) This section ap-
plies to all financial and programmatic
records, supporting documents, statistical
records, and other records of grantees or
subgrantees which are:
Published by Warren. Gorham & Lamont. Inc.
(i) Required to be maintained by the
terms of this part, program regulations or
the grant agreement, or
(ij) Otherwise reasonably considered as
peninent 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)(I0).
(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 which 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-
(1) General. 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 sub grantee submits
to the awarding agency its single or last
expenditure report for that 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 report
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
~
if
ing of the income starts from the end of
the grantee's fiscal vear in which the
income is earned. .
(4) Indirect cost rate proposals. cost
allocations plans, etc. This paragraph ap-
plies to ~e following types of documents,
and theIr supporting records: IndireCt
cost ra~e computations or proposals, cost
~locatlon plans, and any similar a~ount-
Ing 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 submitted for negotiation. If the
proposal, 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 ;3-year retention period for its sup-
porting. records starts from the date of
such submission.
(ii) If not submitted for negotiation. If
~he propo~, plan, or other computation
IS not required to be submitted to the
Federal <?o~emment (or to the grantee)
for negotlatlon purposes, then the 3-year
retention period for the proposal plan.. or
computation and its supporting r~rds
~tarts fr~m end of the fiscal year (or other
accountmg period) covered by the pro-
posal, plan, or other computation.
(d) Subst!tution ~f microfilm. Copies
~a~e by microfilming, photocopying, or
slmllar methods may be substituted for
the original records.
(e) Access to records-(l) Records of
grantees and subgrantees. The awarding
agency and the Comptroller General of
the United States, or any of theirautho-
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
nghts of access in this section must not ge
limited to the required retention period
but shall last as long as the records are
retained.
(0 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
regulation. an assurance, ina State plan
or application, 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
severe 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
enforcement 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-
tio1l: Costs of grantee or subgrantee re-
sultmg 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 authorizenhem in the notice of
suspension or termination or subsequent-
ly. Other grantee or subgrantee costs
during suspension or after termination
whi~h are necessary and not reasonably
aVOidable are allowable if:
(..1) The costs result from obligations
which were properly incurred by the
grantee or sub grantee 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
!1ormally at the end of the funding period
In 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 part
onlv as follows:
(a) By the awarding agency with the
co~sent of the grantee or subgrantee in
whIch case the two parties shall agree
upon the termination conditions includ-
ing the effective date and in th~ case of
partial termination, the portion to be
terminated, or
Published by Warren. Gorham & Lamcint. Inc.
I
09:1565
HDR RF -417
1-15-90
(b) By the grantee or subgrantee upon
written notification to the awarding agen-
cy, setting forth the reasons for such
termination, the effective date, and in the
case of partial termination, the portion to
be terminated. However, if, in the case of
a partial termination, the awarding agen-
cy determines that the remaining portion
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 section.
Subpart O-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 days after the
expiration or termination of the grant, the
grantee must submit all financial, perfor-
mance, and other reports required as a
condition of the granL Upon request by
the grantee, Federal agencies may extend
this timeframe. These may include but
are not limited to: .
( 1) Final performance or progress re-
port.
(2) Financial Status Report (SF 269) or
Outlay Report and Request !orReimburse-
ment for Construction Programs (SF-27 I)
(as applicable).
(3) Final request for payment (SF-270)
(if applicable). .
(4) Invention disclosure (if applicable).
(5) Federally-owned property report: In
accordance with S 85.32(0, a grantee
must submit an inventory of all federallv
own~d proJ?erty (as distinct from property
acqUired WIth grant fundS) for which it is
accountable and request disposition in-
structions from the Federal agency of
property no longer needed.
(c). Cost ,adjustment. The Federal agen-
cy WIll, wlthlD 90 days after receipt of
reports in paragraph (b) of this section,
make upward or downward adjustments
to the allowable costs.
(d) Cash adjustments. (I) The Federal
agency will make prompt payment to the
grantee for allowable reimbursable costs.
(2) The grantee must immediately re-
fund t.o the Federal agency any balance of
unobhgated (unencumbered) cash ad-
vanced that is not authorized to be re-
tained for use on other grants.
~ 85.51 Later disallo~'ances 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 transactions;
(c) Records retention as required 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 DEVELcy..1ENT ~PORTER
is finally detennined to be entitled under
the tenns of the award constitute a debt
to the Federal Government. If not paid
within a reasonable period after demand,
the Federal agency may .reduce the debt
by:
(1) Making an administrative offset
against other reqU1:Sts for reimburse-
ments,
(2) Withholding advance payments
otherwise due to the grantee, or
(3) Other action pennitted by law.
(bl 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 filing of
any fonn of appeal.
Subpart E-Entltlement [Reserved]
Dated: February 10, 1988.
Carl D. Covitz..
Acting Secretary.
18
COMMUNITY DEVELOPMENT BLOCK GRANTS
, I
I
09: 1501
HDR RF -185
3 - 9- 81
APPENDIX J
COST PRINCIPLES FOR STA TE AND LOCAL GOVERNMENTS
OMB CIRCULAR A-87
OFFICE OF MANAGEMEHT AND
BUDGET
eoat Principles for State and Local
Governments
[46 FR 9548, Jan. 28,1981)
: ',i\
.....
.J!
--:....,.
ArnON: Final policy.
SUMMARY: This notice advises that
Federal Management Circular 74-4
(Revised), dated July 18,1974. is
reissued under its original desijZtlation of
Office of Management and Budgel
Circular No. A-87. No substantive
changes arc made in Ll}e Circular. The
Circular is set forth below in its entirety.
EFFEcnvE DATE: The revision was
effective January 15. 1981.
FOR FURTHER INFORMA nON CONTACT:
Palmer Marcantonio. Deputy Chief.
Financial Manegeme:nt Branch. Budget
Review Division. 6002 New Executive
Office Building. Washington. D.C. 20503,
202/395-lo773.
TO OBTAIN SINGLE COPIES OF THE
CIRCULAR, CONTACT: Document
Distribution Center. Office of
Administ"8tion. G-Z.16 New Executive
Office Building, Washington, D.C. 20503.
TO OBTAIN MUt.TlPLE COPIES, CO~"TACT:
Superintendent of Documents. U.S.
Government Printing Office.
Wasbingtcn. D.C. Z04C2.
Daniel F. MaDI1,
Budget~~d^1unogementp(fice~
Januar}' 15, 198:'.
To: The Heads of Executive Departments and
Estabiishm,.nts.
Subject: Cost prinr::plcs for Slate and IUCAI
govemmcnts.
1. Purposp.. This Circular est;.blishes
principles and standards for determining
costs applicable to gr-.lnts. contracts. and
other agt'eemen~s with S:ate and 10("-'1'
governments and f~emlly-recogni%ed Indian
tribal governments.
2.. Supers~ssion. .Thi~ Circular super~edes
Federal Management Circ:ular 74-4 as
revised. The Circular is reissued under its
original designation of OMB Circular A-87.
3. Summa,.,,' af changes. No substantive
changes are !!lade in thp. Circular.
4.. Polic}' inter.t. This Circular provides
principles for determining the allow:.ble costs
of programs administered by State. locaL and
federally-recognized Indian trihal
governments under grants fro:n and contracts
with the Federal Government. The\' are
designed to pro\'ide the basis for a' uniform
approach to the problem of determining costs
and to promote efiicien.:v and Uf:ller
relationships between gr'nntees and the
Federal Government. The principles llre for
determining co~s only and are not intended
to identify the circumstances nor to dictate
the extent of Federal and State or local
. participation in the financing of a particular
project They are designed to provide that
federally-assisted proRr~ms bear their fair
.bare or CON recognized UDder the..
principlel except where re.tricted or
probibJted by law. No proviaion for profit or
other increment above cost i. intended.
S. Applicability and acope.
a. The provi.ion. or thia Cin:ul1It apr1y to
all Federal .gendel re.ponsible for
admini.terirll program. that involve granta
and contract. with State, local. and federally-
recognized Indian tribal governmentl.
b. Ita provilion. do not apply to granta and
contnlctl with:
11) Publicly-rIDanced educationlll
inaUtution. .ubject to Office of MllDagement
and Budget Circular A-::l, and
(Z) Publicly owned huspitals and olLer
providen or medical care lub;ect to
requirement. promulgated by the Iponloring
Federal agencies.
Any other exception. wiu be approved by
the Office or Manages:u:nt and Budget in
particular calle. where Adequate j~Il(jClllioD
is pre.ented.
6. Attachments. The prindplell und reladed
poliC)' guides are let lorth Iu the attachments.
which are:
Allaehment A-Prindples for determining
COltl applicable to lIrants und contracts
with Slate. local. and ledlmll!y-recognized
lndilllt tribal governmentp_
Attachmenl B-StllDo..rOs for &elccted Hems
. 01 CO'L.
7. Inquiries. F~her Informatiun concernin:
thts Circular !!Jay be obtained by contacting
the rIDancia! MdDallemp.nt '~ran::h. B,!clget
Review Dh-ision. Office of Mlln.i1:;ement and
Budget. Wuhinston. D.c.. 20S!X3. Ieiephllne
20:-395-4.773.
James T. MclntYl"f!, Jr.
Director.
(Circular No. A-87J
Attachment A-Principles for
Determining Costs Applicable to Granls
and Contracts With Slale. Local. and
Federally Recognize::' I:Joia:1 Tribal
GovemmeDts
TABLE OF COI'4'"rD."TS
A. Purpose and St;IJ~
1. Obi~ti\'es
2.. Policy guides
3. Application
B. Definitions
1. Appro".aJ or allt.~ori%.ation of thl! wantor
Fedentl agency
2.. Cost allocatiun plan
3. Cost '
4. Cost objective
5. Federal agency
6. Federally-recoP.1iud Indian tribal
governments
7. Grant
6. Grant progJ'llm
9. Grantee
10. Local unit
11. Other Stale 0:' 10C"&1 ag~ncics
12.. SelVices
13. Supporting services
C. Basic guidelines
1. Factors affecting allowAbilils' of costs
2.. Allocable costs
3. Applicable credits
D. Composition o{ (;Ost
1. TOlal cost
PubliShed by Warren. Gorham & Lamon\. Inc
2.. Clu.ilication o{ CO'1I
E. DiJ"fH:t costs
1. General
2.. Application
F. Indirect cosl.8
1. General
2.. Grantee departmental indirect co.t.
3. l.Imlta lion on indirect costs
G. Cost incurnd by agencies other than the
grantee
1. General
2.. Alternative methods of detennining
indirect cost
H. Cost incurred bJ'grantee department for
others
1. General
J. Cost alloca/ion plan
1. General
2.. Requirements
3. lnstruction. for preparation or cosl
allocation plans
(. Negotiation and approval or indirect Cosl
pmpo.als for States
5. Negotiation and approval of indirect COsl
propoeal. for local governments
6. Negotiation and approval of indirect cosl
proposals {or federaUy-rerogni:cd lndilln
tribal governments
7. Resolution o! problems
A. Purpose and scope.
1. Objectives. This Attachment sets
forth principles for determining the
allowable costs of programs
adnunistered by State. local. and
. federally-recognized India.'1 tribal
go\'emme:1ts under grants fro:n a::.d
contracts with the Federal Government.
Tht! principles are for the pu.-pose of
cost oetennination ?nd are not intenued
to identify the circumstances or dictate
the extent or Federal and Stete o:-local ._
participation in the financing of a
particular grant. They are designed to
provide that federally-assisted programs
be:a. their fair share of costs recognized
under these principles, except where
restricted or prohibitp.d by law. No
provision for profit or other increment
above cost is intended.
Z. PoHcy gl1ides. The application of
these principles is based on the
Fundamental premises that:
a. Stale, local and federally
recognized Indian tribal governments
are responsible for the efficient and
effective administration of grant and
contract programs through the
application of sound management
practices.
b. The grantee or contractor assumes
the responsibility for seeing that
fedcrally-ass:sted program funds have
been expended and accoullted for
consistent with underlying asreements
and program objectives.
c. Each grantee or contractor
organization. in recognition of its own
unique combination of staff facilities
and experience, will have the pri...nary
responsibility for employing whalever
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 Indian
tribal governments Under Federal grants
and cost reimbursement type contracts
(including subgrants and subcontractsJ
except 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 medical care subject
to requirements promulgated by the
sponsoring Fetleral agencies.
8. Definitions.
1. Approval or authorization of the
grantor FederaJagencJ' means
documentation evidencing consent prior
10 incurring specific cost.
2. Cost allocation plan means the
documentation identifying.
accumulating, and distributing
allowable costs under j;lrants 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 grantec's
accountability for Federal funds.
4. Cost objective means a pool. center.
or area established for the accumulation
of cosL Such areas include
organizational units, functions, objects
or items of "expense, as well as 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
1l0l/emments 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. Gront 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 granL
10. Local unit means any political
subdivision of go\'emment. below the
State level.
11. Oiher State or local agencies
means department or agencies of thc
State 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. Sapportins services means
auxilillry functions necessary to suslain
the direct effort involved in
adminislering a grant program or an
ar;tivity providing service to the granl
progrClm. These sef\'ices may be
l:entralized in the grantee department or
ill sc;ne other agency. and inlcude ,
procurement. payroll, personnel
functions. maintenance and operation of
space. data p'rocessing, accounting.
budgeting. auditing, mail and messenger
service, and the like.
C. Sasic guidelines.
1. Factors affecting aIJowability of
costs. To allowaule under a grant
program. costs must meet the following
general criteria:
a. 8e necessary and reasonable for
proper and efficient administration of
the grant programs. be allocable thereto
under these principles. and except as
specificallj' provided herein. not be a
general expense required to carry out
the overall responsibilities of State.
local or federally-recognized Indian
tribal governments.
b. Be authorized or not prohibited
under State or local laws or regulations.
Co Conform to any limitations or
exclusions set forth in these principles.
Federalliiws, or other governing
limitations as to tlopes 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. Gorham & Lamont Ine.
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 cost allocable to a particular
grant or cost objective under the .
principles pro\'ided for in this Circular
mav nol be shifted to other Federal
grant programs to overcome fund
deficiencies. a\'oid restrictions imposed
by law or grant agreements. or for other
rea:lons. -. - . .
c. Where an ailocalion of joint cost
will ultimatel.\, result in charges 10 a
grant program. an allocation plan will ue
-required as prescribed in Section J. .
3. Applicable credits.
a. App!icaLle credits refer to those
receipts or reduction of expenditure-
type transactions which offset or recucc
expense items allocable to grants as
direct or indirect costs. Examples of
such transactions are: purchalie
discounts; l'euates or allowances,
recoveries or indeminlies on losses; sl11e
of pubiicationll. equipment. and scrap;
income from person"l or incidcnt~d
services: ;J i.d adjustments of
overpayments or erroneous charges.
b. Applicable credits may also arise
when Federal funds are received or are
a....ailable from sources other than the
gr&nt 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 rela led expenditures in
determining the rates or amounts
applicable to a given grant.
D. Composition of Cost
1. Total cost. The total cost of a grant
program is comprised of the allowable
direct cost incident to its performance.
plus its allocable portion oC allowable
indirect costs. less applicable credits.
2. Classification of costs. There is no
universal rule for classifying certain
costs as eilher 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 DEVELOPfENT BLOCK GRANTS
j
particular cost objective. These coata
may be charged directly to grants,
contracts, or to other programs against
which COlts are finally lodged. Direct
costs may also be charged to cost
objectives used for 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 for the
time and eHorts devoted specifically to
the execution oC grant programs.
b. Cost oC materials acquired.
consumed. or expended specifically for
the purpose of the grant.
c. Equipment and other approved
ca=,ital expenditures.
d. Other items oC expense incurred
specifically tocaJTy 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 (al
incUlTed for a common or joint purpose
benefiting more than one cost objective,
and (b) not readily assignable to the CO&t
objectiveS" specifically benefited,
without effort disproportionate to the
results achieved. The term "indirect
costs," as used herein, appues to costs
oC this type originating in the grantee
department. as well as those incurred by
other departments in supplying goods,
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 of pools
oC indirect cost within a grantee
department 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 recult in consideration of
relative benefits derived.
2. Grantee departmental indirect
costs. All grantee departmental indirect
costs, including the varioua levels of
supervision, are eligible for allocation to
grant programs provided they meet the
conditions set forth in this 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 fixed rates for
indirect casu. 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 facta
:;...
"~
~
~~
&Vailableare deemed sufficient to
enable the contracting parties to reach
an informed judgment (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 inairect cost.
b. Negotiated lump sum for overhead.
A negotiated fIXed amount in lieu oC
indirect costs may be appropriate under
circumstances where the benefits
derived from a grantee department's
indirect services cannot be readily
determined as in the case of small. sell-
contained or isolated activity. When this
method is used. a determination should
be made that the amount negotiated will
be approximately the same as the actual
indirect cost that may be incurred. Such
amounts negotiated in lieu of indirect
costs will be treated all an offset to total
indirect expenses oC the grantee
department before allocation to
remaining activities. The base on wbich
such remaining expenses are allocated
should be appropriately adjuated.
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 st~tutory limitation
or the amount otherwise allowable
under this Circular, whichever is the
IImaller.
b. When the amount allowable under
a statutory limitation is Ie.. than the
amount otherwise allocable.. indirect
costs under this Circular, the amount not
recoverable as indirect costs under a
grant not be shifted to another federally-
sponsored 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 oC
allowable supporting costs (Section
B.l2.) and supervision directly required
in performing the service. but not
aupervi.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. supervision by the head of a
department or agency whose sole
function is providing the service
furnished would be an eligible cost..
Supporting costs include those 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. AJlllmativ. methods of deWmining
indilflCt cosL In lieu of determiDing
actual Indirect cost related to a .
particular service furnished by another
agency. either of the following
altemative method. may be uaed
provided only one method Is used for a
specific service durimr the fiscal year
involved. .
a. Standard indilflCt rote. An amount
equal to ten percent of direct labor coat
in providing 'the service 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 rats. A
predetermined faXed 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
Department far Others
1. General. The principies provided in
Section G will also be used in
determining the cost of servica
'Provided by the grantee department to
another agency.
/. Cost Allocation Plan
1. General. A plan for allocatioD of
costs Will be required to support the
distribution of any joint costs related to
the grant program. All costs included in
the plan will be supported by formal
accounting records which w'1ll
substantiate the .propriety of eventual
charges.
2. &quirements. The allocation plan'
of the grantee department should cover
all Joint costs of the department as well
.. 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
allocation plans" 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 necessarily be limited
to, the followins.
a. The nature and extent of .J8rvices
provided and their relevance to the
federally-sponsored programs.
b. The items oC o!xpense to be
included.
c. The methods to be used in
distributing cost.
3. Instructions for preparation of cost
allocation pions. The Department of
Health and Human Sen.icea in
consultation with the. other Federal
agencies co~cemed. will be responsible
for developing and issuing the
instructions for use by grantees in
preparation of cost allocatron lJlans.
.0'9: 1504
Thi. respon.ibility applies to both
central support services at the State.
local. and Indian tribal level and
indirect COlt proposals of individual
grantee departments.
4. Negotiation and approval of
indirect cost proposals for States.
a. nie Department of Health and
Hwnan Services, in collaboration with
the other Federal agencies concerned.
will be responsible Cor negotiation.
approval, and audit oC cost allocation
plans. which, will be submitted to it by
the Statel. These plans will cover
central support service costs oC the
State.
b. At the grantee department level in a
State, a lingle cognizant Federal agency
will have responsibility similar to that
set Corth in a. above, Cor the negotiation.
approval. and audit oC the indirect cost
proposal. A current list oC agency
assignments i. maintained by the Office
of Management and Budget.
Co Questions concerning the cost
alIocatioD plans approved under a. and
b. above, should be directed to the
agency responsible Cor. such o\pprovals.
S. Negotiation and approval of
indirect cast proposals far local
governments.
&. Cost allocation plans will be
retained at the local government level
Cor audit by a designated Federal agency
except in those cases where that agency
requests that cost ~location plans be
submitted to it for negotiation and
approval .
b. A list of cognizant Federal agencies
assi~ed responsibility for negotiation.
approval and audit of central support
service cost allocation plans at the local
govemmentlevel is maintained by the
the Office of Management and Budget.
c. At the grantee department level oC
local governments, the Federal agency
with the predominant interest in the
wode of the grantee department will be
responsible for necessary negotiation.
approval and. audit of the indirect cost
proposaL .
6. Negotiation and approval of
indirect cost proposals for federally
recogniz.ed Indian tribal governments.
The Federal agency with the
predominant interest in the work of the
grantee department will be responsible
Cor necessary negotiation. approval and
audit or the indirect cost proposal.
7_ Resolution of problems. To the
extent that problems are encountered
among the Federal agencies in
connection with 4 and 5 above. the
Office oC Management and Budget will
lend assi.tanceu required.
I
HOUSING & DEVErOPMENT REPORTER
[Clrcul... No. A-a7]
Attachment B-Standards Cor Selected
Items oC Costs
Table of.CoGteaa.
A. PurptJ6e and applicability
1. Objective
z. Application
B. ....llowable costs
1. Accounting
2. Advertising
3. Advisory councils
4. AudlJ service
S. Bonding
6. Budgetins
7, Building lease management
8. Centr31 slores'
9. lAmmunicalions
10. Cumpenaalion for personal services
11. Depreciation and use allowances
lZ. Disbursins service
1"3. F.mployee rringe benefits
14. Employee morale. health 3ndwelrare
cosls
15. Exhibils.
'6. Legalexpensea
17. Mainlenance and repair
18. Malerial. and supplies'
19. Memberships. subscriptions and
profeSSional activiles
ZO, Motor pools
21. Payroll preparation
22. Personnel administration
23. Printing and reproduction
24. Procul'8lDent service
25. Taxa
28. Trainiq ad education
%7. Tru.portatiOl1
28. Travel
C. Costs a/JowabJe with approval of grantor
agency
1. Automatic data processing
Z. Building space and related facilities
3. Capilal expenditures
4. Insurance and indemnification
5. Management studies
6. Preagreement costs
7. Professional services
8. Proposal coals
D. Unallowable costs
1. Bad debts
2. Contittgf!ncies
3.lAntributions and donations
4. Entertainment
5. Fines and penaJties
8. Governor's expenses
7. Interest ad other financial costs
8. Legislative expeares
9. Uodemteovery of cosa. under Ifant
agreemena.
A. Purpose and applicability.
1. Objective. This Attachment
provides standards for determining the
allowabiHty of selected items of cost.
2. Application. These standards will
apply irrespective of whether a
particular item oC cost 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 oC allow ability in
each case should be based on the
treatment oC standards provided for
Published by Warren. Gorham & Lamont, Inc.
Similar or related items of COIL The
allowabillly oC.the selected items of coat
is subject to the general policies and
principles stated in Attachment A oC thia
Circular.
B. Allowable casts.
1. Accounting. The cost of establishing
and maintaining accounting and other
information systems required for the .
management oC grant programa ia
allowable. This includes coats incurred
by central service agencies for the!!e
purposes. The cost oC maintaining
central accounting records required for
overall Slate or Indian tribal
government purposes, such as
appropriation and Cund accounts by the
Treasurer. Comptroiler, or similar
officials. is considered to be a general
expense of government and is not
allowable.
z. Advertising. 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 for:
a. Recrui.tment oC personnel required
for the grant program.
b. solicitation or bids for the
procurement of goods and services
required.
c. disposal or scrap or surplus
materials acquired in the performance of
the grant agreement.
d. Other purposes specifically
provided Cor in the grant agreement.
3. Advisory counCJ1s. Costs incurred
by State advisory councils or
committees established pursuant to
Federal requirements to carry out grant
programs are allowable. The cost oC like
organizations is allowable when
provided for in the grant agreement.
4. Audit servies. The cost or audits
necessary Cor the administration and
management of Cunctions related to
grant programs is allowable.
5. Bonding. Costs of premiums on
bonds covering employees who handle
grantee agency funds are allowable.
6. Budgeting. Costs incurred for the
development, preparation. presentation.
and execuUon of budgets are allowable.
Costs for services or a central budget
office are generally not allowable since
these are costs oC general government.
However, where employees of the
central budget office actively participate
in the grantee agency's budget process,
the cost of identifiable services is
allowable.
7. Building leD3e managemenL The
administrative cost Cor lease
management which includes review of
lease proposals, maintenance oC a 'list oC
available property for lease, and related
activities is allowable.
,. COMMUNITY DEVELfMENT BLOCK GRANTS
\.
)
8. Central stores. The cost of
maintaining and operating a central
store's organization for supplies,
equipment. and materials used either
directJy or indirectly for grant programs
is allowable.
9. Communications. Communica tion
costs incurred for telephone calls or
service, teletype service, wide area
lelephone service (WATS), centrex.
telpak (tie lines), postage. messenger
service and similar expenses are
allowable.
10. Compensation for personal
services.
a.General. Compensation for
personal services includes all
remuneration, paid currently or lIccured.
for services rendered during the period
of performance under the grant
agreement. including but not necessarily
limited to wages, salaries, and
supplementary compensation and
benefits (Section 8.13.). The costs of
such compensation are allowable to the
extent that total compensation for
individual employees: (1) is reasonable
for the services rendered: (Z) 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,
where 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 In~an tribal governmenL In
cases where the lcind,9 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 the 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 tbe labor market
involved will be an acceptable basi. for
evaluating reasonableness.
b. PayraJ/ and distribution of time.
Amounts charged to grant program. for
personal services, regardle.s of whether
treated as direct or indirect costs, will
be based on payroll. documented and
provided in accordance with generally
accepted practice of the State, local, or
Indian tribal governmenL Payrolls must.
be supported by time and attendance or
equivalent record. 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. ThEt method used
'-'
should produce an equitable distribution
of time aDd effort.
11. Depreciation.and USII allowance..
a. Grantees may be compensated for
the use of buildinga, capital
improvement., and equipment tbro.Igh
use allowances or depreciation. Use
allowances In! the mean. of providing
compensation in lieu of depredation or
other eqllivalent costs. However, a
combination of the two methoda may
not be used in connection with a single
class of fixed assets.
b. The computation of depreciation or
use allowance will be based on
acquisition cost. Where Ictual 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 any portion of the
cost of buildings and equipment donated
or borne directly or indirectly by the
Federal Government through charges to
Federal grant propgrams or otherwise.
iJTespective of where title was originally
vested or where it presently resides. In
addition. the computation will also
exclude the cost of land. Depreciation or
a use allowance on idle or excess
facilities is not allowable, except when
specin.cally authorized by the grantor
Federal agency.
e. Where the depreciation method is
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 consistently 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 exceeding two percent
of acquisition cosL 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 equipmenL
e. No depreciation or use charge may
be allowed on any assets that would be
considered as fully depreciated.
provided, however, that reasonable use
charges may be negotiated for any such
assets 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
charge. or decreased efficiency due to
age, and any. o.ther faaon.pertinent to
the utilization'o1 the tll'cility or item for
the purpose contemplated.
Published by Warren. Gornam & Lamont. Inc.
I
09: 1505
HDR RF -185
3-9-81
lZ- Disbursing service. The cost of
disbunins grant program funda by the
Tleasurer or other designated officer is
allowable. Disbursins services cover the
processing of checks or warrants, from
preparation to redemption, includins the
necessary records of accountability and
reconciliation of such records with
related casb accounts.
13. EmploYH fringe benefits. Costs
identified under a. and b. below are
allowable 10 the extent that total
compensation for employees is
reasonable as defmed in Section 8.10.
a. Employee benefits in the form of
regular compensation paid to employees
during periods of authorized absences
from tbe job, such as for annual leave,
sick leave, court leave, mililaryleave,
and the like, if they are: (1) provided
prusuant to an approved leave system:
and (2) the cost thereof is equitably
allocated to all related activities,
including grant programs.
b. Employee benefits in the form of
employers' contribution or expenses for
social security, employees' life and
health 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, heaJthand
welfare costs. The' costs of health or
flJ'S.t-aid clinics andlor infumaries,
recreational facilities, employees'
counseling services, employee
information publications. and any
related expenses incurred 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 are
allowable.
16. Legal expenseS. The cost of legal
expenses required in the administration
of grant programs is allowable. Legal
services furnished by the chief legal
officer of a State, local or Indian tribal
government or his staff solely for the
purpose of discharging his general
responsibilities as legal officer are
unallowable. Legal expenaes 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 which
neither add to the permanent 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 is
aDowable. Purchases made specifically
for the grant program should be charged
thereto at their actual prices after
deducting aU cash discounts, trade
discounts, rebates, and allowances
received by the grantee. Withdrawals
&om general stores or stockrooms
should be charged at coat under any
n:copized method of pricing
amaistently applied. Incoming
!ramspartation charges ue a proper part
of material cost.
19. Memberships. subscriptions and
pro!essionolactivities,
a. Memberships. The c;ost of
m.embership in civic. business, technical
and prolessional organizations is
anowable provided.: (1) the benefit from
the membership is related to the grant
pnsram: (2) the expenditure is for
q.ency membership; (3) the cost of the
aembership is reasonably related to the
value of the services or beneCHs
nceivfrd; and (4) the expenditure is not
faw membership in an organization
wlIIoich devotes a substantial part of its
activities to influencing legislation.
b. Reference material. The cost of
books. and subscriptions to civic,
business, professional. and technical
periOdicals is allowable when related to
the srant program.
c..Meetings and conferences, Costs
are allowable when the primary purpose
oi the meeting is the dissemination of
technical information relating to the
grant program and they are consistent
willt regular practices followed for other
activities of the ~antee. "
20. Motor pooli. The costs of a service
organization which provides
automobiles to user grantee agencies at
a mil.age or flXed rate andlor provides
vehicle maintenance, inspection and
repair services. are allowable.
21. Payroll preparation. The cost of
preparing payrolls and maintaining
Deeessary related wage records is
allowable.
22. Personnel administration. Costs
for the recruitment. examination.
ceriification. classification. training,
establishment of pay standards, and
related activities for grant programs. are
allowable.
23. Printing tlnd reproduction. Costs
for printing and reproduction services
necessary for grant administration.
iDcluding 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'
,
HOUSrnG & DEVEL,PMENT REPORTE~
award of contracts, and all phases of
contract administration in p,roviding
goods, facilities and services for grant'
programs, is allowable.
25. Taxes, In general, taxes or
payments in lieu of taxes which the
grantee agency is legally ,required to pay
are allowable.
28. Training and education. The cost
of in-service training. customarily
provided Cor employee development. .
which directly or indirectly benefita
grant programs is allowable. Out-of-
service training involving extended
periods oC time is allowable only when
specifically authorized by tbe grantor
agency.
27. Transportation. Cosls incurred for
freight. cartage. express. postage and
other transportation costa relating either
to goods purchased. delivered, or moved
from one location to another are
allowable.
28. Travel. Travel coslS are llllowable
for expenses Cor transportation. lodging.
subsistence. and related items incurred
by employees who are in travel status
on official 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
dlIference in cost between first-class air
acconunodations and less-than.first-
classliir accommodations are not is
unallowable except when less-than-
first-class air accommodations
reasonably available. Notwithstanding
the provisions of paragrapha 0.6. and 8..
travel costs of officials covered by those
paragraphs. when specifically related to
grant programs. are allowable with the
prior approval of a grantor agency.
C. Cas/$ Allowable With Approval of
Grontor Agency
1. Automatic data processing. The
cost of data processing services to grant
programs is allowable. This cost may
include rental of equipment or
depreciation on grantee-owned
equipment. The acquisition of
equipment. whether by outright
purchase, rental-purchase agreement or
other method of purchase, is allowable
only upon specific prior approval of the
grantor Federal agency as provided
under the selected item for capital
expenditures.
2. 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 cosl oC space. whether 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 mal' not be charged
to the program for periods of
nonoccupancy;without authorization of
the grantor Federal 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 adequately
reflect actual costs. are emplo}'cd. Such
charges must be determined on the basis
of actual cost (including depreciation
based on the useCullife t)f the building,
interest paid or accrued, operation and
m"inllmance, and otber allowable
costs). Where these costs are included
in rental charges, they may not be
charged elsewhere. No costs will be
included for purchases or construction
that were originally financed by the
Fp.deral Government.
b. Maintenance and operation. The
cost of utilities, ins:1l'ance, security.
janitorial services, elevator servi"ce,
upkeep of g:oounds, nc~al repairs and
alterations and the like, are allowable to
the extent they an! not otherwise
included in rental or other charges for
space.
c. Rearrangemer:ls and olterations.
Costs incurred for rearrangement and
alteration of facilities required
specifically for the grant program or
those tbat materially increase the value
or usefulUfe of the facilities (Section
C.3.) are allowable when specifically
approved by the grantor agency.
d. Depreciation and just aJJowances
on pubJicly-owned buildings. The costs
are allowable as provided in Section
B.ll.
e. Occupancy of space under rental.
purchase or a leolle with option-to-
purchase agreement. The cost of space
procured under such arrangementa 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
increas~ the value or uaefulllIe of
capital asseta is allowable when such
procurement is specifically approved by
the Federal grantor agency, When asselS
acquired with Federal grant funds are
(a) sold; (b) no longer available for use
in a federally-sponsored program: or (cl
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
m~~06e.o .
(e) Prior notification. The recipient
shall provide the HUD field office with
written notification of the amount of
funds to be distributed to a private finan-
cial institution before distribution under
the provisions of this section.
en Recordkeeping requirements. The
recipient shall maintain in its files a copy.
of the written agreement and related
documents establishing conformance
with this section and concerning perfor-
mance b)' a financial institution in
accordance with the agreement.
~ 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
certifies 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. 90-284,"" and, further, that the grantee
"will comply with the other provisions of
this title and with other applicable laws."
Section 104(e)(1) of the Act requires that
the Secretary determine with respect to
grants made pursuant to section 106(b)
(Entitlement Grants) and 106(d)(2)(B)
(HUD-administered Small Cities Grants),
at least on an annual basis, among other
things, "whether the grantee has carried
out [its] certifications in compliance with
the requirements and the primary objec-
tives of this title and with other applica-
ble laws. · .." Certain 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. Certain 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 departments or agencies
other than the Secretary or the Depart-
ment. This Subpart 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 104(e)(1) of tbe Act, including
statutes expressly made applicable by the
Act and certain other statutes and Execu-
tive Orders for which the Secretary has
I
HOUSING AND DEVEfPME1'\T"f REPORTER
APPENDIX K
enforcement responsibility. The absence
of mention herein of anv other statute for
which the Secretary doCs not have direct
enforcement responsibility is not intend-
ed to be taken as an indication that, in the
Sec::retary's opinion, such statute or Exec-
utive Order is not applicable to activities
assisted under the Act. For laws which 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 subpart also sets forth certain
additional program requirements which
the Secretary has determined to be appli-
cable to grants provided under the Act as
a matter of administrative discretion.
(c) In addition to grants made pursuant
to section 106(b) and 106(d)(2)(B) of the
Act (Subparts D and F, respectively), the
requirements of this Subpart K are appli-
cable to grants made pursuant to sections
107 and 119 of the Act (Subparts E and
G, respectivelyj, and to loans guaranteed
pursuant to Subpart M.
~ 570.601 Public Law 88-352 and
Public Law 90-284; affirmatively
funhering fair housing; Executive Order
11063.
Section I 04(b) of the Act provides that
any grant under section 106 of the Act
shall be made only if the grantee certifies
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 excluded from participation 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 & Lamont, Inc.
'~'1
..'~
activity by way of grant to effectuate the
foregoing prohibition by issuing rules,
regulations. or orders of general applica-
bility which shall be consistent witb
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 Part I.
(b) "Public Law 90-284" refers to The
Fair Housing Act (42 U.S.C. 3601-20),
popularly lcnown 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 further
requires the Secretary to administer the
programs and activities relating to hous-
ing and urban development in a manner
affirmatively to further 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 further the po1ici~ of
the Fair Housing Act, furthermore, 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) certify to the satisfaction
of the Secretary that it will affirmatively
further fair housing.
(c) Executive Order 11063, as amended
by Executive Order 12259, directs tbe
Department 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 property and related facilities
(including land to be developed for resi-
dential use), or in tbe use or occupancy
thereof, if such property and related facil-
ities are, among other things, provided in
whole or in part with the 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 Part 107.
.
~
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8
COMMUNITY DEVELOP1ENT
~ 570.601 Section 109 or the Act.
(a) Section 109 of the Act requires that
no person in the United States shall on the
ground of race, color, national origin or
sex, be excluded from participation in, be
denied the benefits of, or be subjected to
discrimination under, any program or
activity funded in whole or in part with
community. development funds made
available pursuant to the Act. For 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 form
of grants or proceeds from HUD guaran-
teed loans have been tranSferred by the
recipient or a subrecipient to an identifi-
able aclministrative unit and disbursed in a
program or activity. In subsection (b) of
this section, "recipient" means recipient as
defined in 24 CFR 1.2(t).
(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, dircc::tly or
through contractual or other arrange-
ments, on the ground of race, color,
national origin. or sex:
(i) Deny any individual any facilities,
services. fmancial aid or other benefits
provided under tbe program or activity.
(ii) Provide any facilities. services, fi-
nancial aid or other benefits which are
different, or are provided in a different
form, 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 tbe program or activity.
(iv) Restrict an individual in any way in
access to, or in the enjoyment of, any
advantage orp~vilcge 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.
(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
bencflts of, or subjecting them to discrimi-
nation on the ground of race, color,
national origin. or sex; or which bave the
purpo5C or effect of defeating or substan-
tially impairing the accomplishment of the
objectives of the Act and of this section.
(4 )(i) In administering a program or
activity funded in whole or in. part with
CDBG funds regarding which the recipi-
ent has previously discriminated against
persons on the ground of race, color.
national origin or sex, or if there is
sufficient evidence to conclude that such
discrimination existed. the recipient must
take remedial affirmative action to over-
come the effectS of prior discrimination.
The word "previously" does not exclude
current discriminatorj 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 CllSute 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-
c\ll1'Cd. 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. where 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 shall be constrUed to prohibit any
recipient from maintaining or constructing
separate living facilities or rest room
Published by Warren. Gorham. & Lamont, Inc.
I
09:0661
HDR RF-383
9-26-88
facilities for the different scxes. Further-
more, selectivity 01\ the basis of sex is not
prohibited when institutional or custodial
services can properly be performed 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 el 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.
~ 570.603 Labor stalldarcls.
Section 110 of the Act requires that all
laborers and mechanics employed by con-
tractors or subcontraCtOrs on constrUCtion
work fmanc::cd 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-
qnirement, the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327 el
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 (S
U.S.c. 1332-15) and section 2 of the Act
of June 13, 1934, as amended (40 U.S.C.
276c).
~ 570.604 Enviroamental stalldards.
Section 104(g) expresses the intent that
"the policies of the National Environmen-
tal Policy Act of 1969 and other provi-
sions of law which further the purposes of
such Act (as specified in regulations issued
by the Secretary) · · · [be] 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 58.
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 58.
~ 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. 400(a)), one year after a communi-
ty has been formally 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 D,
the date of submission of the grantee's
final statement pursuant to ~ 570.302),
funds provided under this pan shall not be
expended for acquisition or construction
p'ur.poses 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 59-79,
or less-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. 4(01).
I
HOUSING AND DEvtLOPMENT REPORTER
~ 570.606 Relocation, displacement and
acquisition.
(a) Uniform Relocation Act. (1) The
Unifonn Relocation Assistance and Real
Property Acquisition. Policies Act of 1970
(URA) (42 U.S.C. 4601) 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 fann 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 initial 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
~fi 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 under fi 570.458
that is granted for the requested activity
(UDAG). However, an acquisition or
displacement that occurs 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
displacement 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 CFR Part 42.
(b) RaUiential antidisplacement and
relocation DSSistance pltm. Under section
104(d) 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
(b)(1) of this section), and relocation
assistance (paragraph (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 displacement of persons
from their homes as a result of any
activities assisted under this pan.
(1) One-for-ont replacement units. (i)
All occupied and vacant occupiable
low/mode(ate-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 1cca1 housing
occupancy codes.
(C) The units must be provided in
standard condition. Replacement
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-
lic, and submit the following information
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 IC'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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"'."'-
~. '"if.!
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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, .replaccment 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 a
low/moderate-income dwelling unit for at
least 10 years from the date of. initial
occupancy.,..;..
: (iii)(A) The requirements of para~raph
(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-income
dwelling units in standard condition avail-
able on a nondiscriminatory basis within
the grantee's jurisdiction. In making t~is
determination, the HUD Field Office wtll
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
access to places of employment and to
other facilities.
(C) The grantee must submit a request
for a determination under paragraph
(b)(I )(iii) of this section directly to the
HUD Field Office.
(2) Relocation 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 D
(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 defini-
tion of "comparable replacement dwell-
ing" used in 24 CFR Part 42 is modified
as described in paragraph (b)(3)(i) of this
section. Displaced households provided
~ith replacement housing assistance under
paragraph (b)(2)(i)(C) of this section, in
the form of a cenificate 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
cenificate 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 affirmatively 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 displaced household
will not bear, after relocation, a ratio of
shelter costs to income that exceeds 30
percent. Such compensation shall be ei-
ther:
(I) 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:
(il) 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.
I
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 certifi-
catelbousing 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. (Tbis
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
rti
~:t"
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.)
(B) If the displac:Cment occurs on or
after the-.appropriate. date described in
paragraph (b)(2)(ii)(A) of this section, the
low- or moderate-income household is not
eligible for relocation assistance if:
(1) The household is evicted for cause;
(2) The household moved into the prop-
erty 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 HUD 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
paragraph (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.
(ii) "Decent, safe and sanitary dwelling"
means a decent, safe and sanitary dwelling
as defined 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 Part 888.
(iv) "Occupiable dwelling unit" means a
dwelling. unit that is in a standard condi-
-
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HOUSING AND DEVfOPMENT REPORTER.~;~;;~;.X:~:
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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 plan win 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) Effecti'H! 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~ au. or after October 1,
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 fust grant
is made after September 30, 1988, without
regard to the source year of the funds used
for the activity.
(c) Section J04(k) relOCJZtion require-
ments. Section 104(k) of the Act requires
that reasonable relocation assistance be
provided to persons (families, individuals,
businesses, nonprofit organizations, or
farms) displaced (LE., moved permanently
and involuntarily) as a result of the use of
assistance received under this part to
acquire or substantially rehabilitate prop-
erty. 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 displaced 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 a- minimum:
(1) Reasonable moving expenses;
(2) Advisory services needed to help in
relocating. The grantee shall advise tCIi-
ants of their rights under the Federal Fair
Housing Law (Title VIII) and of replace-
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 re-
sponsibility to affirmatively further fair
housing; and
(3) Fmancial assistance sufficient to
enable any person displaced from his or
Published by Warren, Gorham, & Lamont. Inc,
h~r 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)(ll) of the Act, the grantee
may provide relocation payments and
other relocation assistance for individuals,
families, businesses, nonprofit organiza-
tions and farms 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 displacees.
(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.
(0 Responsibility of 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
part, 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) DisplacemenL 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
property if:
(1) The tenant has not been provided
with a reasonable opportunity to lease and
occupy a suitable, decent, safe and sani-
tary dwelling in the same building or in a
24
-
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~~
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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 reo
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 ~ 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 under ~ 570.458 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); 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 termination, rates of
pay, or other forms 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 carrying out of any project
assisted under the Act, that to the greatest
extent f~ible opportunities 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 efforts toward
compliance with the statutory directive.
HUD regulations at 24 CFR Part 135 are
not applicable to activities assisted under
this part but may be referred 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 paint Section 401(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 htlZllrrU 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 Part' 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 Part 35.
(2) For properties constructed prior to
1978, applicants for rehabilitation assis-
PubliSl1ed by Warren, Gorham. & Lamont, Inc.
I
09:0665
HDR RF-388
12-5-88
tance provided under this part and tenants
or purchasers of propenies owned by the
grantee or its subrecipient and acquired or
rehabilitated with assistance provided un-
der this pan ~hall be notified:
(i) That the property may contain lead- -
based paint;
(ii) Of 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 property, appropriate
abatement procedures may be undertaken.
(c) Elimination of lead-based paint 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 yean of age
may be exposed in existing housing which
is rehabilitated with assistance provided
under this part. The Secretary has promul-
gated requirements regarding the elimina-
tion of lead-based paint hazards in HUD-
associated housing at 24 CFR Part 35,
Subpart C. This paragraph is promulgated
punuant to the authorization granted in
24 CFR 35.24(b)(4) and supercedes, with
respect to all housing to which it applies,
the requirements prescribed by SubpartC
of 24 CFR Part 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) Installation 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-
tiGn that does not involve applicable sur-
faces (as defined in 24 CFR 35.22) that
does not exceed $3,000 per unit.
~2) DefifJitions.
.. Applicable surface." All intact and
nociDtact interior and exterior painted
surfaces of a residential structure.
'"Chewable surfaces." All chewable pro-
tntding painted surfaces up to five feet
from the floor or ground, which are
re:u:iily accessible to children under seven
years, of age, e.g., protruding comers,
wlmdowsills and frames, doors and frames,
ImCi other protruding woodwork.
"'Defective paint surface. Paint on appli-
cab1e surfaces that is cracking, scaling,
chipping, peeling or loose."
'*Eevated blood lead level or EBL."
EKessive absorption of lead, that is, a
a1IIIIfinned concentration of lead in whole
bImod of 25 IJidl (micrograms of lead per
c:IIs:iliter of whole blood) or greater.
"Lead-based paint surface." A paint
suriace. whether or not defective, identi-
fiecl as having a lead content greater than
or equal to I mg/cml.
(3) Inspection and Testing-(i) Defective
paint surfaces. The grantee shall inspect
foc defective paint surfaces in all units
CCDStrUcted prior to 1978 which are occu-
pied by families with children under seven
yars of age and which are proposed for
rehabilitation assistance. The inspection
sJiIal1 occur at the same time the property
is being inspected for rehabilitation. De.
fCdive paint conditions sha!l be included
Dm 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
& wlit. constructed prior to 1978 and
receiving rehabilitation assistance, in-
c:bIdes a child under seven years of age
'lrith an identified EBL condition. Lead
. ccmtent shall be tested by using an X-ray
fluorescence analyzer (XRF) or other
method approved by HUD. Test readings
of Imglcml or higher using an XRF shall.
be considered positive for presence oflead-
bII5Cd paint.
(iii) Abatement without testing. In lieu of
tk 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 all applicable surfaces in accordance
with the methods set out in 24 CFR
3.5.24(b)(2)(ii).
(4) Abatement Actions. (1) For inspec-
tiOns performed under ~ 570.60S(c)(3)(i)
and where defective paint surfaces are
found, treatment shall be provided to
I
HOUSING AND DEVEi",OPMENT REPORTER -
defective areas. Treatment shall be per-
formed before final inspection and approv-
al of the work.
(ii) For testing performed under
~ 570.60S(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
abatement process. The owner/developer
shall notify the grantee of all such actions
taken.
(S) 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 painL 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,
HUD may impose conditions or sanctions
on grantees to encourage prompt compli-
ance.
(10) Compliance with other program
requirements. Federal. Stale 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
gublished by Warren, 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) BUD 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) Disposlll 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 principles.
The recipient, its agencies or instrumen~
talities. and subrecipients shall comply
with the policies, guidelines, and require-
ments of 24 CFR Part 85 and OMB
Circulars A-S7, A-I 10, A-I22, and A-1282
implemented at 24 CFR Part 44), as
applicable, as they relate to the acceptance
'See footnole I for ~ 570.200(a)(5).
(I
26
COMMUNITY DEVELOPMENT
,
and use of Federal funds under this part,
The applicable sections of 24 CFR Part 85
and OMB Circular A-110 are set forth at
~ 570.502.
~ 570.611 Connia of interest.
-"::'O>f)
--.
(a) Applicability. (I) 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-I 10,
respectively, shall apply.
(2) In all cases not governed by 24 CFR
85.36 and OMB Circular A-I 10, 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 digible activi-
ties which authorize such assistance (e.g.,
rehabilitation, preservation, and other im-
provements or private propenies of facili-
ties pursuant to ~ 570.202, or grants, loans
and other assistance to businesses, individ-
uals and other private entities pursuant to
~ 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 personnd
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 shaJl 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 pan.
'"
c:.e
..L
-~
-
(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 onl)' after the recipient
has provided the following:
(I) 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
'local 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:
(I) 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.
F'ublished by Warren. Gorl1am, & Lamont. Inc,
I
09:0667
HDR RF-388
12-5-88
~ 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 commen't 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 easement. 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 Eligible 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 digible 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 subpan. In
such case the applicant unit of' general
local government shall be required to
pledge its current and' future grants under
the Act as security for the notes or other
obligations issued by the public agency.
~ 570.701 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 property in fee or by long-
term lease, including acquisition for eco-
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 structures 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, including 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 subpart.
(h) Housing rehabilitation eligible under
~ 570.202-
(i) Activities eligible under 9 570.203.
(j) Community economic development
projects eligible under 9 570.204.
(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 eco-
nomic development purpose.
9' 570. 702 Appli~tion requirements.
(a) Presubmission requiremenlS. (1) Pri-
or to submission of an appli~tion for loan
guarantee assistance to HUD, the appli-
cant must comply with the presubmission
requirements specified in 9 570.301 with
resJ5ec;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 b~'
including and identifying the activities to
,
HOUSING AND DEVELOPMENT REPORTER
I
be undertaken 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:
(1) 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 certification providing assurance
that the applicant has made efforts to
obtain financing for activities described in
the application without the use of the loan
guarantee, the applicant will maintain
documentation of such efforts 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
9 570.303. 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 make 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
entitlement 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) HUD re,iew and approwzl of applica-
tions. (1) HUD will" normally accept the
grantee's cenifications. The Secretary re-
serves the right. however, to consider
relevant information which challenges the
certifications and to require additional
information or assurances from the grant-
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 Headquarters.
(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 u~der
~ 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 9570.701(a) through (k).
(vi) Activities to be undertaken with the
guaranteed loan funds do not meet the
criteria in 9 570.208 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 appli!=&nt 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
9570.305. If the applicant wishes to carry
out an activity not previously described in
its final statement or to substantially
28
COMMUNITY DEYELOPMEl'oT
I
APPENDIX L
).
09:1601
HDR RF -42~
6-10-90
I
NON-FEDERAL GOVERNMENTAL AUDIT REQUIREMENTS
(24 CFR 44)
OEP ARTMENT OF HOUSING ANO
URBAN OEVELOPMENT
Office df the Secretary,
24 CFR PART 44
Non-Federal Government Audit
Requirements
AGENCY: Office of the Secretary, !:iUD.
ACfION: Final Rule
[50 FR 39086. Sept. 27, 1985]
PART 44-NON-FEOERAL
GOVERNMENTAL AUOIT
REQUIREMENTS
f .:.~\.
;!io
........:?'
Sec.
44.1 Purpose.
44.2 Definitions.
44.3 Scope 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 reports.
44.11 Audit resolution.
44.12 Audit workpapers and repons.
44.13 Audit costs.
44.14 Sanctions.
44.15 Auditor selection.
44.16 Small and minoritv audit finns.
44.17 Reporting. .
44.18 HUD audits.
Appendix to Part 44-Definition of
Major Program as provided in the Single
Audit Act of 1984.
Authorj~': 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)).
~ 44.1 Purpose.
Ca) 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-102. "Uniform requirements for
grams 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 Circular A-128 are
revised in the future, HUD shall promul-
gate regulations to conform this part to
those revisions.
(2) The difference between the lan-
guage of this part and of OMB Circular A-
128 generally reflects only the substitu-
tion of certain terms and phrases reflect-
ing the implementation of the Circular
into the codification for HUD regula-
tions. For example. in certain sections of
this part. references to "Federal agencies"
in the Circular have been changed to
"HUD" and references to "this Circular"
are replaced with "OMB Circular A-128:'
(b) The Single Audit Act requires State
or local governments that receive
S I 00.000 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 participate in
contractS for single audits.
Cc) Concerning the applicability of the
audit requirements of tbe Single Audit
Act. the Act requires:
(I) State or local governments that
receive S I 00,000 or more a year 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 5 I 00.000 a
vear shall have an audit conducted in
accordance with the Act's requirements
(Government-, Department-, agency- or
establishment-wide audit). or a grant-spe-
cific financial audit. Such financial audits
shall be performed 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
PubbSl'led by Werren. Gomam & Lamont. Inc.
and if no compliance requirements have
been established 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.
Cd) 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.
Ce) The Act is applicable to State and
local governments with respect to any
fiscal year that begins after December 31,
1984.
~ 44.2 Definitions.
"Cognizant agency" means the Federal
agency assigned by OMB to carI1' 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 a~eements. loans, loan guarantees,
property, interest subsidies. insurance. or
direct appropriations. but does not in-
clude direct Federal cash assistance to
individuals. It includes awards received
directl\' from Federal aeencies. 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 specifted in the
generally accepted government auditing
standards.
"Generally accepted government audit-
ing standards" means the Slandards For
Audit of Government Organi;azions. Pro-
grams. Aczivilies. and Functions. devel-
oped by the Comptroller General. dated
Februarv 27, 1981.
"HUD" means the Department of
Housing and Urban Development.
"Independent auditor" means:
(1) A State or local government auditor
who meets the independence standards
specified in generally accepted govern-
ment auditing standards: or
3
. '09:1602
(2) A public accountant wbo meets
such independence standards.
"Indian tribe" means any Indian tribe,
band, nation, or other organized group or
community, including any Alaskan Na-
tive village or regional or village corpora-
tion (as defined in, or established under,
tbe Alaskan Native Oaims Settlement
Act) that is recognized by the United
States as eligible for tbe 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:
( I ) Resource use is consistent with
laws, regulations, and policies;
(2) Resources are safeguarded against
waste. loss. and misuse; and
(3) Reliable data are obtained, main-
tained, and fairly disclosed in repons.
"Local government" means any unit of
local government within a State, inclucl-
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 instromentality 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 DEiLOPMENT REFORTEF.
"State" means any State of the United
States, tbe District of Columbia, tbe
Commonwealth of Puerto Rico, the Vir-
gin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana
Islands, and tbe Trust Territory of the
Pacific Islands, any instrumentality there-
of, and any multi-State. regional. or inter-
state entity that bas governmental func-
tions and any Indian tribe.
"Subrecipient" means any person or
government depanment, agency, or es-
tablishment that receives Federal finan-
cial assistance through a State or local
government, but does not include an
individual that is a beneficiary of such
assistance. A subrecipient may also bea
direct recipient of Federal financial assis-
tance.
~ 44.3 Scope of audit.
(a) The audit shan be made by . an
independent auditor in accordance with
generally accepted government auditing
standards covering financial and compli-
ance audits.
(b) The audit shall cover the entire
operations. of a State or local government
or, at the option of that government, it
may cover departments, agencies or es-
tablisbments that received, expended, or
otherwise administered Federal financial
assistance during tbe 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-
PublishecI by Warren. Gorn8m & Lamont. Inc.
ments, agencies, and establishments for
tbe 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-I 10, "Uniform require-
ments for grants to universities, hospitals,
and other nonprofit organizations."
(d) The auditor shall determine wbeth-
er:
( I) The financial statements of the
government, department, agency or es-
tablishment present fairly its financial
position and the results 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 shall
unless the State
has adopted by
constitutional or
be made annually
or local government
January I, 1987, a
statutory requirement
4
COMMUNITY DEVELfPMENT BLOCK GRANTS
~
J
for less frequent audita. For those
governments, the cognizant agency shall
permit biennial audits. covering both
years. if the government so requests. It
shall also honor requests for biennial
audits by governments that have an
administrative policy calling for audits
less frequent than annual but only for
fiscal years beginning before Janualy 1.
1987.
! 44.5 Internal control and com~
rev.....
The independent auditor shall
determine and repo~ on whether the
organization has internal 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 assistance
programs. The study and evaluation
shall be made whether or not the auditor
intends to place reliance on such
systems. As part of this review. the
auditor shall:
(1) Test whether these internal control
systeins 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 has 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 shall 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 ovenight:
the 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
whether the records show that those
who received services or benefits were
eligible to receive them.
(ii) In addition to transaction testing.
the auditor shall determine whether
matching requirements. levels of effort
and earmaking limitations were met
whether 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
matchiDg were determined in
accordance with OMB Circular A~;
"Cost principles for State and local
governments." and Attachment F of
OMB 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 State and Local
Governments, issued by OMB and
avajlable from the Government Printing
Office. For those programs not covered
in the Compliance Supplement, the
F'ublistled by Warren. Gornam & 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 assistance programs that are
selected in connection with
examinations of financial statements
and evaluations of internal controls
shall be tested for compliance with
Federal laws and regulations that apply
to such transactions.
(Approved by the Office of Management and
Budget under OMS control number ~
(094).
! 44.6 Subreclpients.
State and local governments that
receive Federal financial assistance and
provide $25,000 or more of it in a fiscal
year to a subrecipient shall:
(a) Determine whether State or local
subrecipients have met the audit
requirements of this part and whether
subrecipients covered by OMB Circular
A-ll0, "Uniform requirements for grants
to universities, hospitals, and other
nonprofit organizations." have met those
requirements:
(b) Determine whether the
subrecipient spent Federal assistance
funds provided in accordance with
applicable laws and regulations. This
may be accomplished 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 has
not yet had such an audit;
(c) Ensure that appropriate corrective
action is taken within six months after
receipt of the audit report in instBnces of
noncompliance With Federal laws and
regulations:
(d) Consider whether 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 Relationship to other audit
requllwnenta.
(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"requirements in this
part do not limit the authority of the
Department to conduct or contract for
audits and evaluations of Federal
financial assistance 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 in addition to the audits
conducted by recipients under this part.
the Department shall. consistent with
other applicable laws and regulations.
arrange for funding the cost of such
additional audits.
f 44.8 Cognlz8nt agency reeponalblltles.
(a) The Single Audit Act provides for
cognizant Federal agencies to oversee
the implementation of this part. OMS
will assign cognizant agencies for Statos
and their subdivisions, and for larger
local governments and their
subdivisions. HUD may participate with
an assigned cognizant agency, 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 DE'fLOPME~T REPORTER
(bUf HUD is designated as a
cognizant agency, it will:
(1) Ensure that audits are made and
reports are received in a timely manDer
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 should 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
have been found not to have 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 of. the
facts and make recommendations for
follow-up action. Major inadequacies or
repetitive substandard performance of
independent auditors shall 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 t!tat affect the programs of more
than one agency.
f 44.9 Illegal 8Cts 01' lrTegul8rttles.
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.
f 44.10 AudIt reports.
(a) 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 assurance
with respect to those items tested for
compliance, including compliance with
law and regulations pertaining to
fmancial reports and claims for
advances and reimbursements:
(ii) Negative assurance on those items
not tested:
(Hi) 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 DEVEiOPMENT BLOCK GRANTS
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(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 illegal acta or
indicatioDl of such acta. iDcluding all
questiOned costs found... the l"8lI1Ilt of
these acts that auditors become aware
of. should normany be covend in. a
separate written report submitted in
accordance witJi paragraph (f),
(d) In addition to the audit report, the
recipient shall provide ~'nts on the
findings and recommendationa in the
report; including a plan for corrective
action taken or planned and comments
on the status of corrective actions taken
on prior findings. If COITective action is
not necessary, a statement describins
the reasOD it is not should accompany
the audit report.
(e) The reports shall be made
available by the State or local _
govemment for public inspection within
30 days after the completion of the
audit.
(f) In accordance witP generally
accepted government audit standards.
reports shall be submitted by the auditor
to the organization audited and to tho,e
requiring or arrangiDg 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
re~pient. Subrecipients shall submit
copies to recipients that provided them
Feder~assistancefunds.Thereports
shall be sent within 30 days after the
completion of the audit, but no later
than one year after the end of the audit
period, unless a longer period is 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,
designated by OMB. The clearing house
will keep completed audits on file and
follow up with State and local
govemmenta that have not submitted
required audit reports.
(h) Recipients shall keep audit reports
on file for three yean after their
islU8Dce.
(Approved by the Office Of MaDqement lIDd
Budaet 1UIder OMB control D1IIDber Z535-
OOM.) -
f ..... 11 AudIt .....JIIon.
ea) A. described in 144.8. the
cognizant agency shall be respoDlible
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-case basis by
agreement among the agencies
concerned.
(b)-Rnolution.ball be made within
six mOlltba after receipt of the report by.
the Federal departments and agencies. .
CorreCtive action should procaed as
raJlidly as possible.
f .....12 AUdIt ~ ~ ......
WorkPapers andreporta shan be
retained for a minimum of three yeua
from the date of the audit report, unless
the auditor is notified in writing by the
cosnizant agency to extend the retention
period. Auditworkpaperi shall be made
available upon request to tbe.~t
agency or ita desigpee or the Gener8l
Accounting Office, at the completion of
the audit.
(Approved by the Oftice ofManapment and
Budpt UDder OM! control number Z535-
OOM.)
f .....13 AudIt costL
The cost of audita made in accordance
with the audit requirementa of this part
are allowable charges to Federal
auistaDce programs.
(a) The ch4Irges may be coDlidered a
direct COlt or an allocated indil'ect cost,
determined in accordance with the
provisions of OMB Circular A-lJ1, "Cost
principles for State and local
governments."
Published by Warren. Gorham & Lamont. Inc.
I
09: 1605
HDR RF-373
5-9-88
(b) Generally, the percentage of COlts.
charged to Federal assistance programs
for a single audit shall not. exceed the
percentage that Feder~ funds expended
represent of total funds expended by the
recipient during the fiscal year. The
p8rcentage may be exceeded, however,
if eppropriate documentation
demoDltrat.s higher. actual cost.
f 44. 14 s.nctIanL
No cost may be charged to Feder~
assistance programs for audita that are
reqUired by this part, but.are not
conducted in accordance with the audit
requirements of this part. In case of a
recipient's con~u8dinability or'
unwillingn!,~ t.o hav,a proper-4Udit.
Federal asencies shall consider' other
appropriate sanctioDl, includin8:
(a) Withholding a percentage of
asaistancepaymenta until the audit is
completed satisfactorily;
(b) Witholding or disallowing
overhead costs; and
(c) Suppendingthe Federal assistance
agre.emeiif 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 Into Intergovernmental agreements
for audit and other services, analysis
should be made to determine whether it
would be more economical to purchase the
services from private finns. In instances
where use of such intergovememnt:ll
agreements are required by a State statute
(e.g., audit services) the State statute will
take precedence.
f .....1. SnIIIII 8nd mnwtty audit 1InM.'
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 "sma11audit firms"
iDcludes the term "audit firms controlled
by socially and economically
diladvantage individuals".) Recipients
of Federal assistance sba11 take the
following steps to further this goal:
(a) Assure that small audit firms are
used to the fullest 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 process
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 where this is not possible, a88Ul'8
that these firms are given consideration
for audit subcontracting opportunities:
(e) Encourage contracting with
consortiums of-small audit firms when a
I
HOUSING 0 AND DEVfLOPMENT REPORTER
contract.is too large for an individual
small finD; ana
(f) Use the services and assistance. as
appropriate. of the Small Business
AdinlniBtration in the solicitation and-
utiliJlatton of innall audit firms.
......,70 ReportIng,
HUD shan report to the Director of
OMBon or before March 1,1987, and
annually theraafter, on the effectiveness
of State and local governments in
carrying out the requirements of the
OMB Circular. The report shall identify
each State or local government or Indian
tribe that. in the opinion of-HUD. has
failed to comply with OMB Circular or
with this.part.
......,8. HUD adt&.
(a) The Secretary of HUD or the
Secretary's authorized representative
shall have accesa to all books. accounts.
records, reports. files and other papers
or property of a recipient organization
pertaining to Federa1 assistance
supplied byOHUD to the recipient
organi;ation. for the purpose of-making
Published by Warren. Gorham & Lamont. Inc.
specific suveys, audits, examinations,
excerpts and transcripts.
AppeadIx to Put ~efiDitlaD of Major'
Program .. Provided ID the SlDgIe Audit Act
of 1_
"Major Federal Assistance Prosram," forO
State and local govemmeats haYing Federal
a....tance expenditures between 8100.000
and 8100 million clollan. means any prosram
for which Federal expenditures during the
appliceble year exceed the larger of S3OO,OOO,
or 3 percent of such total expenditures.
Where total expenditures of Federal
assistance exceed 8100 milllon. the following
criteria apply:
TamI ....lIIiIIne 01 FeOINIllna/llMI
....... klt III Il"lG'8IIlS
~O FeOINI
UIlatIInc8
Pl'lIIJIM'
-- any
program ...
----
MoM uw-
But '- "'--
$100 mIIIIan._ $1 b111lan__ 53 IIiIIion.
$1 bIIIiDn 52 biIlIan M million.
52 billion 53 bIIIian S7 miIIiDn.
53 1liIIIan._._ M biIIIan._. 110 million.
M biIIIan 0 S5 lIiI8Dn 113 million.
S5 biIIIan S5 lIiIlion $18 million.
58 biIIIan S7 lliIIion $19 million.
0- 57 biIIIan _._. . S20 mIlllan.
8