AGREEMENT FUNDED UNDER THE CLEARWATER COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (3)
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AGREEMENT FUNDED UNDER
THE CLEARWATER COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
PART I
THIS AGREEMENT is entered into as of the
~--;lday of f/!J(/EI1[;Efl,
1987, by the CITY OF CLEARWATER, FLORIDA, a political subdivision of the
State of Florida, hereinafter referred to as the "CITY", and ERVIN'S ALL
AMERICAN YOUTH CLUB, INC" hereinafter referred to as the "PSA", a non-
profit corporation organized and existing under the laws of the State of
Florida, having its principal office at 1250 Holt Avenue, Clearwater,
Florida, and includes the Appendices attached hereto.
WHEREAS, the City has agreed with the United States Department of
Housing Urban Development to conduct a Community Development Program, here-
inafter referred to as the "Program", with federal financial assistance
under Title I of the Housing and Community Development Act of 1974, as
amended, hereinafter called the "Act", and
WHEREAS, the Planning & Urban Development .Department, hereinafter
called the "Department", will act in behalf of the City in Conducting the
Program, and
WHEREAS, the PSA proposes to operate a youth club program of direct
benefit to low and moderate income residents within the City of Clearwater
and proposes to perform the work and carry out the programs described in
Appendix Ai 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 fulfill-
ment of the purposes of the Acti
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,
1987 and
terminate on September 30, 1988, unless earlier cancelled as provided here-
in. The agreement may be extended for up to one ~dditional year upon the
request of the PSA and the written authorization of the City Community
Development Coordinator.
The need and merit shall be at the determination
,of the Coordinator.
The Department may issue written or oral instructions
to clarify any details or provisions of this Agreement.
Such instructions
must be within the intent of the project and may not be of such nature to
affect cost or period of performance.
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3. The City representative with the PSA as regards conduct of
services under this contract shall be the Community Development Coordinator
and the PSA's services shall be carried out under the supervision of its
Executive Director.
4. The PSA shall use the funds to support the Project serving
residents of Neighborhood Target Areas and particularly within the PSA's
area of operation. The PSA shall not exceed its budgeted amount and shall
use the funds in accordance with the budget to be paid with Community
Development Funds included in Appendix B.
Funds shall not be obligated
when payment has been suspended or terminated pursuant to Paragraph 17
hereof,
Any funds which the Department determines were not properly
expended shall be refunded to the City.
5. The PSA shall comply with the provisions of OMB Circular A-llO,
provided in Appendix G, and with the provisions of OMB Circular 122,
provided in Appendix H.
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 Cjty.
6. All subcontractors under this agreement shall be approved by the
City.
7. All purchases of consumables, capital equipment and services shall
be in conformity with the Procurement Standards set forth in OMB Circular
A-llO, 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 reimburse-
ment 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.
Final requests for reimbursement here-
under 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
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of any charges, claims or demands hereunder not received within said thirty
day period.
9. The City shall retain custody upon termination of this agreement
of any and all prop~rty purchased with Community Development Funds.
"Property" as used in this Paragraph shall mean nonexpendable tangible
property valued at $200 or more with a 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 Re-
port.
Stolen,
lost or returned property shall be reported immediately to
Thirty days prior to the end of the grant year or
the Department,
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 use and location of the property, and, if
applicable, the continued need for the property,
No real or personal
property or custody thereof purchased with such funds shall be disposed of,
transferred, assigned, or loaned by the PSA without prior written consent
of the City.
10, 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 relationships, unless Florida law pertaining to public records re-
quires disclosure of said information.
11. 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.
12. The PSA agrees to fully participate in the implementation and
maintenance of an evaluation system to continually monitor the project.
PSA 10/1/87
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This shall include, but not be limited to, periodic submission of data re-
ports which will be used by the Department for inclusion in the Annual
Grantee Performance Report, periodic monitoring visits by the Department
for conformance with this agreement,
and continuing assessments of
performance
hereunder.
PSA agrees to comply with evaluation
and
information requirements of the Department.
A final report shall be sub-
mitted by the PSA within 30 days after the end of the contract term.
final report shall consolidate reporting of all project participants.
13. PSA shall establish and maintain on an accrual basis an accounting
This
system in accordance with the Standards of Grantee Financial Management
Systems as set forth in Appendix G (OMB Circular A-llO) and in accordance
with generally accepted accounting principals and standards, PSA agrees to
modify or correct said systems in accordance with the City's requirements.
14. 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, and/or representatives of the Comptroller General of the United
States, or other federal agency, may deem 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 re-
quest 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.
15.
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 negligent performance or
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omission of any employee, agent or representative of the PSA.
16. The PSA shall not assign any interest in this Agreement without
the prior written consent of the City.
17. The City may suspend, withhold, or terminate payment of the
project,
in whole or in part,
for cause.
Cause shall include the
following:
a. Ineffective or improper use of project funds
b. Failure to comply with any term or condition hereunder
c. Refusal to accept conditions imposed by HUD
d. Submittal of reports which are incorrect or incomplete
in any material respect
e. If carrying out this Agreement is rendered impossible or
infeasible for any reason including changes in law or the
unavailability of HUD funds necessary for continuation.
If the City suspends payment,
it shall advise the PSA and specify In
writing the actions that must be taken as a condition precedent to the
resumption of payment and specify a reasonable date for compliance.
18. 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,
19. 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. Nor shall any participant be excluded from
participation in, be denied of, or be subjected to discrimination under any
program of activity funded in whole or in part with Community Development
Funds because of race, color, national origin or sex, as set forth in Other
Program Requirements in Appendix 0, (CFR 570.601).
20. The PSA will establish safeguards to prohibit employees from using
their positions for a purpose that is or gives the appearance of being mo-
tivated 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 new public services not covered by this Agreement,
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the PSA shall attempt to secure other local, state or federal funding
and/or private funding for such project.
The PSA will not as a result of
receiving funding for the Project reduce its support for other similar
services already being provided by the PSA in the area of its operation,
and will, in fact, affirmatively seek additional assistance and support
from other sources for increasing services where needs demand such
increase,
The PSA will not use these funds for publicity or propaganda
purposes designed to support or defeat legislation pending before federal,
state or local governments.
21. The PSA shall comply with the requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, and the HUD regula-
tions issued pursuant thereto, attached hereto as Appendix E.
22. The PSA will comply with Equal Employment Opportunities Executive
Order 11246, as amended, attached hereto as Appendix F.
23. 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 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 of 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.
ERVIN'S ALL AMERICAN YOUTH CLUB, INC.
By
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Secretar'y
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CITY OF CLEARWATER, FLORIDA
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City Manager
ATTEST:
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Approved as to form & correctness:
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ERVIN'S ALL AMERICAN YOUTH CLUB, INC.
APPENDIX A
PROJECT NARRATIVE
for Community Development Block Grant Support 1987-1988
Ervin's All American Youth Club Operational Support
General financial support
expenses of Ervin's All
indicated in Attachment B.
will be provided for the
American Youth Club up to
normal operational
the dollar limit
Ervin's Youth Club provides a club for disadvantaged youth in the Upper
Pinellas County area, and especially in the North Greenwood and South
Greenwood neighborhoods, and emphasizes the development of scholastic
achievement, social skills, positive self image, responsibility, and
physical abilities. Parental involvement is encouraged.
Ervin's All American Youth Club Kitchen/Improvements
A kitchen and food service area will be installed in the
recereation building at 1250 Holt Avenue utilized by Ervin's
Restrooms will be rehabilitated and related building
accomplished. These improvements will be accomplished by City
an independent contractor as determined to be most feasible by
Clearwater Community Development Coordinator.
City owned
Youth Club.
improvements
forces or by
the City of
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ERVIN'S ALL AMERICAN YOUTH CLUB, INC.
APPENDIX B
PROJECT BUDGET
for Community Development Block Grant Support 1987-1988
I. Ervin's All American Youth Club Operational Support
General support of normal operational expenses
TOTAL
II. Ervin's All American Youth Club Kitchen/Improvements
Addition of kitchen/food service area, restroom
rehabilitation, and related improvements
TOTAL
$24,500
$24,500
$10,000
$10,000
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ERVIN'S ALL AMERICAN YOUTH CLUB, INC.
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APPENDIX C
HETIlOD OF P ^ '::fLNT
All pa)~ents shall be on a reimburse~ent ~asis only.
All re~uests for reirnburse~ent shall be su?ported by prooer i~voices,
payrolls, checks, receipts and other doc~entation as reauested.
Any program income shall be suornitteci to the CITY tilrou~n tile
DEPART:1E;rr at least quarterly. tees coll~cted, if any, shall oe re?orted
but are not to be construeci as prograo income.
Kcquests for rei~burse~ent shall not be reduced by any Dro~r2~ incoQe
received.
'"
SUbpllrt K-0thar Progrllm
Requirements
~ 570,600 General
(u) Section HH(b) Lr the Act provide8
thut un}' grant under ~ection 100 ol the
Act dlUl) be IT." . nly i/lhe gruntee
certifies 10 the 8utiduclion a/the
Secretjry.aOlong other Lhings. that Ihe
grgnt "\'o'ill Uc1conducled and
adlllinistered in con/onnity with Pub, L
M-352 and Pub, L 1lO-2fi-1," and. /urther,
thul the grantee "will comply wiuI the
olher provisions ol Ihis title Bnd with
other applicaule laws," SeclioD lO1(d)(1)
o/lhe Act requires thai the Secretary
dtlermine with respect to grants made
pUBuantlo 8ection l00(b) (Entitlemenl
Granls) and lOG(d)(2)(B) (1/00-
Administered Small Cilies Cranta). al
leusl on an Bnnual basi8, among oUler
things, "whether the grantee has carried
outlils] certification8 in compliance
with Ule requiremenls and Ule primary
objeclives a/this title and WiUI other
applicable laws' . . :' Certain other
statutes are expressly made applicable
10 IIclivities assisled under lhe Acl by
Ihe Acl ilself. while olhe.r laws not
referred 10 in lhe Act may be applicable
10 such activities by lheir own lerms.
Cerlain slalutes or Executive Order:!
which may lJe applicable to activilies
assisted under Lhe Act by their own
tenn'- are administered or enforced by
guvemmenlal departmenl.J or agencies
olher than tIle Secrelary or Ule
DepartmenL Thi8 Subpart K enWn~'rale8
law8 which the Secretary will trealas
Bpplicable 10 grants made under secLion
106 of the Acl, olher lhiin granls 10
APPENDIX D
laTHER PROGRAN REQUIRENENTS I
States made pUrBuanllo seclion lOG(d)
of lhe Act. for pUrp08CS of Ihe
detenninations descriued above to ue
made by the Secretary under ICction
HH(d)(l) of Ihe Act. including stututes
expressly modt applicable by the Act
snd certain other 6llltutes 11l1d Executive
Orders for which lhe Secrelary has
enforcement rcspon~iullity. The ab,ence
of men lion herein of any olher stotule
for which the Secretary docs nol have
direct enforcement reoponsiuility is not
intended 10 be tuken as an indica lion
Ihul, in the Secretary's opinion, such
stutute or Executive Order Is nol
applicuule 10 aClivities assisted under
Ihe Ac\. For laws which the Secrelary
will Lreal 0' opplicuule 10 granls made
10 Slale8 under seclionlOO(d) of Ule Act
for purpose8 ol Ule determination
required 10 ue mude uy the Secretary
purauunllo section 104(d)(2) of the Act,
,ee ~ 570.40G.
(b) Thi, Subpart ulao 8el8 fOrlh certain
oddilional program requirements which
Ihe SecretBry has determined 10 be
applicaule to grant8 provided under Ihe
Acl as a matter of administrlltive
dIscretion.
(c) in addition 10 grants made
pursullnlLo section l00(b) and
lOG(d)l2)(B) of the Acl (Subparls 0 and F
ol lhis Part, respecli.vely). the
requiremenls 0/lhi8 Subpart K Bre
applicable to granls mode pursuanl to
seclions 107 and 119 of Ihe Acl
(Subpurts E and C. respectively),
~ 570,601 Pub. L 8&-352 and Pub. L ~
264; EuCullvG Order 11063.
Section lO1(b) ol the Act provides Ihal
any granl under section 100 of ule Act
shall be made only il lhe granlee
te'rlifies to lhe laLi,faction of Ihe
Secrelary thallhe granl "will be
conducted and adminislered in
conformity with Pub, L 83-352 and Pub.
L. 90-284:' Similarly, aecLioo 107
provides that no granl may be made
D-l
under Lhat seclion (Secretary'.
Discretionary Fund) or ICction l1Q
(UDAG) withoutlatislnclOry OBSUrOnCe)
10' the same eHec\.
(a) "Pub. L Bi:.352" refer. \0 Title VI
of the Civil rU~11l6 Act of 1[}(H (H U,S.C.
2000<1' el ,eq,). which provides Ulal no
person In the United Stales 6hall on the
ground of race. color. or national origin,
be excluded from participalion In, be
denied UIC uenefill of. or be 6uujected 10
di6crimJnation under any program or
Bcllvlly receivIng Federal financial
a,siattlnce. Section 002 of the Civil
Rights Act 0/1\)(}4 dirocls euch Federal
department and Bgency empowered 10
exlend Federul financiolassislancc 10
Bny program or activity by way of granl
to cHecluale lhe foregoing prohiuition
by issuingrult~, regulation6. or orders of
general applicability which shall be
con,istenl wilh achievement of Ihe
, ilia lute uuthoriling the finllncial
assistance. HUU regullllloOl
implementing Lhe requirements of Title
VI wilh reepecI to lfUD progrums are
contained in 24 crn Purll.
(u) "r>Ub, L 90-W4" refers to Tille VIII
of the, Civil Righls Act ol 1%8(42 U,S,C.
JGOl el &eq,), popularly known os the
Fair Housing Act. which provides that il
is the policy ol the United Stales to
provide, wiUlin comlitutional
limitllLiona. for lair housing throughout
Ule Uniled Stall~B and prohibits any
pCfllon from discriminating in the sale or
renlal of hou8ing. the financing of
housing. or the provision of brokerage
,ervices. Including in any woy making
unavailable or denying a dwelling \0
any 'pe l'fj on. becLluse of race. color.
religion, ael(, or national origin, Tille
VIII further requires the Secrelary 10
administer the programs and activities
relllling 10 housing and urban
developmenlln 11 manner affirmatively
\0 further Ule pw-poses of Title VIII.
Pursuanlto this Blalutory direction. the
Secretary requires tha I grantee'
adminiater all programs and activitie,
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reluted 10 housing (lnd communily
developm.!nl in 6 manner 10
of[innt\lively furlher foir housing,
(cl Executive Order 11003. a,
IImcnded by Executive Order 12259.
direcls the Oeporlmenllo lake all aclion
neceBsury und oppropri;Jle 10 prevenl
discriminulion becau,e of raCe, color.
rcligion (creed). BeX. or nalional origin.
in lhe 'lI'e.leo~ing. renla\' or olher
di,posilion of re6idenliul properly und
rcloled focililieB (including land 10 ue
developed for residenliul use). or in lhe
use or occupuncy lhereo!' if 8uch
properly and reluled focililies ure.
ll(nong olher Ihings, provided in whole
orrin pari wilh Ihe Ilid of loans.
q,d\'ances. grants. or cunlrihulions
II gr'ce\!. 10 be madc by Ihe Federal
Coverri'nenl. IIUO regulalions
irnplemenling Execulive Order 110G3 are
contained in 24 CFR PIlrl107,
~ 570,602 5c~llon 109 of th. A~I.
(a) Seclion 109 .of Ihe Acl requires Ihal
no person in lhe Uniled Slales shull on
lhe ground of ruce. color, nalional origin
or sex. be excluded from participalion
in. be denied Ihe benefils of. or be
6ubjecled 10 discrimination under. any
program or uclivily funded in whole or
in purl wilh communi1y development
funds made avuiluble pursuanlto the
Ad, For purposes of this seclion
"program or uClivil{' is defined as any
funclion conducled by an idenlifiable
odminislralive unil of lhe recipient. or
uy uny unil of governmenl. ~ubrecipienl.
or private conu-actor rcceiving
COI-:1lOunily dcvelopmcnl funds or loans
from the recipicnl. "Fundcd in whole or
in pari wilh communily develcpmcnl
fundi' mean, Ihat community
developmenl funds in any 6mount in lhe
form of grant' or prO'Ceed, from HUD:
guaranteed loans hove beeD,lransfcrred
by ll:e recipienl or a subreci'picnl to an
idcnlifiuble 6dminislralive unil and
disbur~ed in u program :::r aClivily.
(b) Specific discriminatory actions
prohi/Jiled and corrective actions,
PI A recipienl may nolo under any
program or aclh'ily 10 which lhe
regulatiun, of Ihi, ParI may apply
direcll)' or through conlrucluO: or olher
urrangl'menls. on Ihe ground of ruce.
colur. national origin. or scx:
(i) Deny allY facililies. 8ervic~8,
financialuid or other benefils pro\'ided
under lhe prugram or aclivily.
(ii)l'ro\'ide uny facili1ie" 8ervlces.
financialuid or other l>ene(ils which ore
different. ur ore providcd in 0 diffcrenl
form from lhul pruvided to olhcrti under
lhc proGram or uclivity.
(iii) Subject 10 ~e8regalcd or ticpurale
Ire;Jtnlenl in ony fucilily in, or in uny
mailer of process rc\al~d 10 receipl of
any scrvice or l>enefil under lhe program
or aClivity.
liv) Re,tricl in any woy occcss 10, or
in lhe enjoymenl of ony advllnlage or
privilege enjoyed by other, in
connection wilh facililics. services.
financial aid or olher benefil8 under Ihe
prugram or activity.
Iv) Trcal on individual dif[erently
from olhers in delermining whelher Ihe
individual salisfie8 any udmission.
enrollment. eligibility, member~hip. or
other requiremenl or condition which
lhe individual musl meel in order to be
provided any facililie'. service, or othcr
bcnefit provided under Ihe program or
aClivi:y,
(vi) Deny an opporlunity 10 participate
in 6 program or aClivity as an employee.
(2l A recipienl may nol ulilize crileria
or melhods of adminislration which
have Ihe effcct of ,ubjecling individuals
10 discrill1inulion on Ihe basis of race.
color. nalionul origin. or sex. or have lhe
effecl of defcaling or ~ubstanlial\y
impairing 6ccomplishmenl of lhe
objeclives of Ihe program or activity
wilh rcspecl 10 individuals of 6
piJflicular race. color. national origin. or
8e)C
PI ^ recipient. in delerri1ining Ihe sile
or location of housing or facilitie,
provided in whole or in pari wilh fund~.
under Ihis part. may not make seleclion,
of ,uch sile or localion which have Ihe
effed of excluding individuals from.
denying lhem lhe benefits of. or
subjecling lhem 10 discriminalion on the
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gruund ul roCC. color. national origin, (\f
sex: or wldeh have Ihe purpo~e or ellecl
of delrulinl( or ,,,bBtonlially impniring
the ilcr.ulnpli6hment of lbe objeclives cl
the Aclllnd of Ihi, ticction.
(411i)In u'dOlinislering 8 program or
aclivity funded in whole or in parl wilb
conc fund, regardinH which lhe
recipient hae previously diBcriminulcd
og,dn,1 perBons on the ground of race.
color. nulionul origin or sex. lhe
recipicnl OluslluKe uffirmutive aclion 10
ovcrcome lhe effccls of prior
discrimina lion,
(ii) E\'en in Ihe o\)~cnce of 6uch prior
disuiminillion. a recipient in
adminiSlering a program or aclivity
funded in whule or in purl wilh COOC
(unds should tuke offirmntive aclion \0
ovcrc{)ll1e thc effects 01 conditions
which wo;J1d olherwise result in limiling
parlicipaliun by per,ons of a parlicular
race, clllor. national origin or ,ex,
Where previous discriminolory praclice
or usage tcnds. on Ihe ground of roce.
color. nalional origin or eex. 10 exclude
individuals from purlicipation in. to
deny them lhe benefit' of. or 10 suujecl
thcm 10 discriminalion under any
program or nctivily 10 which lhis parI
applies. the recipienl has an obligulion
to lake ren,onal>le action 10 remove or
overcome lhc consequences of the prior
discriminalory pructice or usage. and \0
accomplish the purpose of lhe Act.
(iii) A recipicnt Bhnll nol be prohibited
by Ihi, parI from tuking ony 6ction
eligible under Subparl C to ameliorate
on imbalance in servicc8 or focililies
provided to any geographic area or
specific group of persons wilhin ils
jurisdiclion. whcrethe purpose of such
6clion in 10 overcome prior
discrirninutory pruclice or usage.
(5) Nolwilhstonding 6nylhing 10 the
contrary in Ihis section. nolhing
contained herein shull be conslrued to
prohibit 6ny recipienl from mainlainin
or constructing separale living facililie
or rest room facililies for Ihe different
sexes, Furthermore. Be\eclivily on the
ba5i~ of BCX iB nol prohibited when
inslitulional or clIslodial sCrVices can
I
APPENDIX E
SECTION 3 CLAUSi:':
I
TilE fOLLO\-lING SECTION ) CLAUSE SIIAlL I1E INCLUDED IN AlL CONTRACTS fOR \-IORK IN
CONNECTION \-11111 A SECTION) PROJECT:
A. The \.Jork to be performed under this contract is on a project assisted
under a program providing direct Federal financial assistance from
the Department of HousinB and Urban Development and is subject to the
requirements of Section) of the Housing and Urban Development Act of 1968.
as amended. 12 U.S.C, 170u, Section) requires that to th~ greatest extent
feasible opportunities for training and employment be given loW'er income
residents of the project area and contracts for W'ork in connection \.Jith the
project be a\.Jarded to business conc~rn8 W'hich are located in, or oW'ned in
substantial part by persons residing in the area of the project.
B. The panies to this contract \.Jill comply W'ith the provisions of said Section 3
and the regulations issued pursuant thereto by the Secretary of 1I0using and
Urban Development set fonh in 24 CFR, and all applicable rules and orders of
the Department issued thereunder prior to the execution or this cont ract, The
parties to this contract certify and agree that they are under no contractural
~Qc other disability \.Jhich \.Jould prevent them from complying.\.Jith these
requirements, '
C, The contractor \.Jill send to each labor organization or representative of
\.Jorkerg~\.Jith \.Jhich he has a collective bargaining agreement or other contract
of understanding, if any, a notice advising the said labor organization of
\.Jorkers' representative of his counuitments under this Section) Clause and
shall post copies of the notice in conspicuous places available to employees
and applicants for employment or tr~ining,
D. The contractor \.Jill include this Section) Clause in every subcontract for
\.Jork in connection with the project and \.Jill, at the direction of the
applicant for or recipient of Federal financial assistance, take appropriate
action pursuant to the subcontract upon a finding that the subcontractor is
in violation of regulations issued by the Secretary of Housing and Urban
Development, 24 CFR. The contractor will not subcontract \.Jith any subcontractor
\.Jhere it has notice or kno\.lledge 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 \.lith a preliminary statement of ability to
comply with the requirements of these regulations,
E. Compliance \.lith the pr'o'visions of Section 3, the regulations set forth in 24 CFR,
and all applicqble rules and orders of the Department issued thereunder prior to
the execution of the contract, shall be a condition of the Federal financial
assistance provided to the project, binding upon the applicant or recipient for
such assistance, its successors, and assigns. Failure to fulfill these
requirements shall subject the applicant or recipient, its contractors and sub-
contractors, its successors, and assigns to those sanctions specified by the
grant or loan agreement or contract through which Federal assistance is provided,
and to such sanctions as are specified by 24 CFR 135.
E-l
APPENDIX F
NOTICE IF REQUIREMENT FOR AFFIRMATIVE A~ION
TO ENSURE EQUAL EMPLOYMENT OPPORTUNITY
(EXECUTIVE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "Equal Opportunity
Clause" and the "Standaxd Federal Equal Employment Opportunity Construc-
tion Contract Specifications" set forth herein.
2. The goals and timetables for minority and female participation, expressed
in percentage terms for the Contractor's aggregate workforce in each
trade on all construction work in the covered area, are as follows:
A. Goals for Female Utilization, All Trades:
AREA COVERED
Goals for Women apply nationwide.
GOALS AND 'TIMETABLES
Timetable
Goals
(percent)
F::-om Apr. 1, 1978 until Mar. 31, 1979.... 3.1
From Apr. 1, 1979 until Mar. 31, 1980,... 5,1
From Apr. 1, 1980 until Mar. 31, 1981. . . . 6.9
B. Goals for Minoritv Utilization:
TAMPA-ST. PETERSBURG, FLA., AREA
Area covered: Hillsborough, Pasco, and Pi~ellas
Counties, Fla.
Goals and Timetablesl
Trade
Goal
(percen t)
All. . . . . . . . . . . . . . . . . . . . . .. . . .
17.9
IFor the life of the project.
These goals are applicable to all the Contractor's construction work
(whether or not it is Federal or federally assisted) performed in the
covered area.
The Contractor's compliance wi~ the Execu~ve Order and the regulations
in 41 CFR Part 60-4 shall be based on its i~pleroentation of the Equal
Opportunity Clause, specific affirmative action obligations reouired by
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the specificAtions set forth in 41 CFR 60-4.3(a) ,land its efforts to meet
the goals established for the geographical area where the contract
resulting from this solicitation is to be performed, The hours of minority
And female employment and training must be substantially uniform throughout
the length of the contract, and in each trade, and the contractor shAll
cake A good faith effort to employ minorities And women evenly on each of
i t.s projects. The transfer of minori ty or female employees or trainees
from Contractor to Contractor or from project to project for the sole
purpose ~f meeting the Contractor's goals shall be A violation of the
contract, the Executive Order and the regulations in 41 CFR Part 60-4.
Compliance with the goals will be measured against the totAl work hours
performed.
3. The Contractor shall provide written notification to the Director o~ the
Office of Federal Contract Compliance Programs within 10 working days of
award of any construction subcontract in excess of SlO,OOO at any tier
for construction work under the contract resulting from this solicitation.
The notification shall list the name, address and telephone number of the
subcontractor; employer identification number; estimated dollar amount of
the subcontract; estimated starting and completion dates of the subcontract1
and the geographical area in which the contract is to be perfo~ed.
4. As used in this Notice, and in the contract resulting f~om this solicitation,
the "covered area" is Pine lIas County, Florida.
60- 4.3 (a) EQUAL OPPORTUNITY CLAUSE
During the performance of this contract, the contractor agrees as follows:
1. The contractor will not discriminate against any employee or applicant
for employment because of race, color, religion, sex, or national origin.
The contractor will take affirmative a~tion to ensure that applicants are
employed, and that employees are treated during employment wiL~out ~egard
to their race, color, religion, sex, or national origin. Such action shall
include, but not be limited to the following: Employment, upg~ading,
demotion, or transfer; recruitment or ~ecruitment advertising; layoff or
termination, rates of payor other forms of compensation; and selection
for training, including apprenticeship. The cont=actor agrees to post
in conspicuous places, available to employees and applicantS for employ-
ment, notices to be provided setting forth the provisions of this non-
discrimination clause.
2. The contractor- will, in all solicitations or advertisenents for employees
placed by or on behalf of the contractor, state that all qualified
applicants will receive consideration for employment without regard to .
race, color, religion, sex, or national origin.
3. The contractor will send to each labor union or representative of workers
with which he has a collective bargaining agreement or other contract or
~derstanding, a notice to be provided advising the said labor union or
workers' representatives of the contractor's commitments under this
section, and shall post copies of the notice in conspicuous places avail-
able to employees and applicants fo~ employment.
F-2
4.
The contractor wiJl comply with all provisions of Jxecutive Order 11246
of September 24, 1965, and of the rules, regulations, and relevant orders
of the Secretary of Labor.
5. The contractor will furnish all information and reports required by
Executive Order 11246 of September 24, 1965, and by rules, regulations,
and orders of the Secretary of Labor, or pursuant thereto, and will permit
access to his books, records, and accounts by the administering agency
and the Secretary of Labor for purposes of investigation to ascertain
compliance with such rules, regulations, and orders.
6. In the event of the contractor's non-compliance with the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or
orders, this contract may be canceled, terminated, or suspended in whole
or in part and the contractor may be declared ineligible for further
Government contracts or federally assisted constrUction contracts in
accordance with procedures authorized in Executive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
7. l~e contractor will include the portion of the sentence ~ediately
preceding paragraph (1) and the provisions of paragraphs (1) through (7)
in every subcontract or purchase order unless exempted by rules, regula-
tions, or orders of the Secretary of Labor issued pursuant to section
204 of ~xecutive Order 11246 of September 24, 1965, so that such provisions
will be binding upon each subcontractor or vendor, The contractor will
take such action with respect to any subcontract or purchase order as
the administering agency may direct as a means of enforcing such provisions,
including sanctions for non-compliance: Provided, however, That in the
even~ a contractor becomes involved in, or is threatened with, litigation
with a ~ubcontractor or veneor as a result of such direction by the
administering agency, the contractor may request the United States to enter
into such litigation to protect the interests of the United States.
STANDARD FEDERAL EQUAL E}~LOYMENT OPPORTUNITY CONSTRUCTION CONTRACT
SPEClFICATIONS (EXECUTIVE ORDER 11246)
L As used in these specifications:
a. ~Covered area~ means the geographical area described in the solicita-
tion from which this contract resulted.
b. "Director" means Director, Office, of Federal Contract Compliance
Programs, Onited States Department of Labor, or any person to whom
the Director delegates authority.
c. "EInployer identification number" means the Federal Social Security
nurr~er used on the Employer's Quarterly Federal Tax Return, o. S.
Treasury Department Form 941.,
d. "Minority" includes:
F-3
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(1) Black (all persons having origins in any of the Black
African racial groups not of Hispanic origin);
(2) Hispanic (all persons of Mexic~, Puerto Rican, Cuban,
Central or South American or other Spanish Culture or
origin, regarcless of race),
(3) Asian and Pacific Islander (~ll persons having origins
in any of the original peoples of the Far East, Southeast
Asia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alas~an Native (all persons having
origins in any of the original peoples of North America and
maintaining identifiable tribal affiliations through member-
ship and participation or community identification).
2. Whenever the Contractor, or any Subcontractor at any tier, subcontracts
a portion of the work inVOlving any construction trade, it shall
physically include in each subcontract in excess of $10,000 theprovi-
$+ons of these specifications and the Notice which contains the !,-p-
pllcable goals for minority and female participation and which is set
forth in the solicitations from which this contract resulted.
3. If the Contractor is participating (pursuant to 41 CFR 60-4.5) in a
Hometown.Plan approved by ~~e o. S. Department of Labor in the covered
area ei ther individually or through an association, its affirma ti ve action
obligations on all work in the Plan area (including goals and timetables)
shall be in accordance with 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 with its obligations under .the EEO
clause, and to make a good faithe'ffort 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 ~oward a goal in an
approved Plan does not excuse any covered Contractor's or Subcontractor's
failure to take good faith efforts to achieve the Plan goals and time-
table.
4. The Contractor shall implement the specific affirmative action standards
provided in paragraphs Ja through p of these specifications. The goals
set forth in the solicitation from which this contract resulted are
expressed as perc~tages of the total hours of employment and training
of minority and female utilization the Contractor should reasonably be
able to achieve in each construction trade in-~ich 'it has employees in
the covered area. The Contractor is expected to make substantially
uniform progress toward its goals in each craft during the period
specified.
5. Neither the provisions of any collective bargaining agreement, nor the
failure by a union with whom the Contractor has a collective bargaining
agreement, to refer either minorities or women shall excuse the Contrac-
tor's ~bligations under these specifications, Executive Order 11246, or
the regulations promulgated pursuant thereto.
F-4
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.6. In order for the nonworking t:aining hours of apprentices and trainees
to be counted in mlFting the goals, such apprentice, and trainees must
be employed by the ton tractor during the training p~iod~ and the
Contractor must have made a commitment to employ the apprentices and
trainees at the completion of their training, subject to the availabil-
ity of employment opportunities. - Trainees must be trained pursuant to
training programs approved by theU. S. Department of Labor.
7. The Contractor shall take specific affirmative actions to ensure equal
employment opportunity, ~e evaluation of the Contractor's compliance
with these specifications, shall be based upon its effort to achieve
maximum results from its actions, The Contractor shall document these
efforts fully, and shall implement affirmative action steps at least as
extensive as the following:
a. Ensure and maintain a working environment free of harrassment,
intimidation, and coercion at all sites, and in all facilities at
which the Contractor's employees are assigned to work. The
Contractor, where possible, will assign two or more"women to each
construction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are awa=e of and carry out the Contractor's obligation to maintain
such a working environment, with specific attention to minority or
female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minority and female
recruitment sources, provide written notification to minority and
female recruitment sources and to community organizations when the
Contractor or its unions have employment opportunities available,
and maintain a record of the organizations' response~.
c. Maintain a current file of the names, addresses and telephone
numbers of each minority and female off-the-street applicant and
minority or female referral from a union, a recruitment source or
community organization and of what 'action was taken with respect
to each such individual. If such individual was sent to L~e union
hiring hall for referral and was not referred back to L~e Contractor
by the union or, if referred, not employed by the Contractor, this
shall be documented in the file with the reason therefor, along with
whatever additional actions the Contractor may have taken.
d. Provide immediate written notification to the Director when the
union or unions with which the Contractor has a collective
bargaining agreement has not referred to the Contractor a minority
person or woman sent by the Contractor, or when the Contractor has
other information that the union referral process has impeded the
Contractor's efforts to meet its obligations.
,
e. DevelOp on-the-job training opportunities and/or participate in
training programs for the area ~hich expressly include minorities
and women, including upgrading programs and apprenticeship and
trainee programs relevant to the Contractor's employment needs,
especially those programs funded or approved by the Depa=tment of
Labor. The Contractor shall provide notice of these programs to
the sources compiled under 7b above.
f. Disseminate the Contractor's EEO policy by providing notice of the
policy to unions and training programs and requesting L~eir coopera-
tion in assisting the Contractor in ~eeting its EEO obligations; by
including it in any policy manual and collective bargaining agreement; by
F-S
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I
publicizing it in the company newspaper, annual report, etc.; by
specific review of the policY with all management personnel and
with all minority and female employees at least once a year; and
by posting the company EEO policy on bulletin boards accessible
to all employees at each location where constrUction work is
performed.
,g. Review, at least annually, the company's EEO policy and affirmative
action obligations under these specifications with all elI1ployees
having any responsibility for hiring, assignment, layoff, termina-
tion or other employment decisions including specific review of
these items wid. onsite supervisory personnel such as Superintendents,
General Foremen, etc., prior-to the initiation of constrUction work
at any job site. A written record shall be made and maintained
identifying the time and place of these meetings, persons attending,
subject n.atter discussed, and disposition of the subject matter.
h. Disseminate the Contractor's EEO policy externally by including
it in any .-:dvertising in the news media, specifically including
minority and female news media, and providing written notification
to and discussing the Contractor 's EEO policy with other Contrac-
tqrs and Subcontractors with whom the Contractor does or antici-
pates doing business.
i. Direct its recruitment efforts, both oral and written, to minority,
female and community organizations, to schools with minority and
female students and to minority and female recruitl::lent and training
organizations serving the Contractor's recruitment area and employ-
ment needs~ Not later than one month prior to the date for the
acceptance of applications for apprenticeship or other training
by any recruitment source, the Contractor shall send written
notification to organizations such as the above describing the
openings, screening procedures, and tests to be used in the selection
process.
j. Encourage present minority and female employees to recruit other
minority persons and women and, ~here reasonable, provide after
school, summer and vacation employment to minority and female youth
both on the site'and in other areas of a Contractor's workforce.
,'.
k. validate all tests and other selection requirements where there
is an obligation to do so under.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, through
appropriate training, etc., such opportunities
m. Ensure that seniority practices, job classifications, work assign-
ments and other personnel practices, do not have a discriminatory
effect by continually monitoring all personnel and employment
related activities to ensure that the EEO policy and the Contractor's
F-6
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obligations under these specifications are being carried out.
n, Ensure that all facilities and company activities are non-
segrated except that separate or single-user toilet and
necessary changing facilities shall be provided to assure
privacy between the sexes.
o. Document and maintain a record of all solicitations of ofIers
for subcontracts from minority and female construction
contractors and suppliers, including circulation of solicitations
to minority and female contractor associations and other business
associations.
p, Conduct a review, at least annually, of all supervisors' adherence
to and performance under the Contractor's EEO policies and
affirmative action obligations.
8, Contractors are encouraged to participate in voluntary associations
which assist in fulfilling one or more of their affirmative action
obligations (7a through pl. The efforts of a contractor association,
'joint contractor-union, contractor-community, or other similar group
of which the contractor is a member and participant, may be asserted
as fulfilling anyone or more of its obligations under 7a through p
of these Specifications provided that the contractor actively partic-
ipates jn the group, makes every effort to assure that the group has
a positive impact on the employment of minorities and WOI:len in the
industry, ensures that the concrete benefits of the program are
reflected in the Contractor's minority and female workforce partic-
ipation, makes a good faith effort to meet its individual goals and
timetables, and can provide access to documentation which demonstrates
the effectiveness of actions taken on behalf of the Contractor. The
Obligation to comply, however, is the Contracto~'s and failure of such
a group to fulfill an obligation shall not be a defense for the
Contractor's noncompliance.
9. A single goal for minorities and a separate single goal for ~omen have
been established. The Contractor, however, is required to provide
equal emp~oyment opportunity and to take affirmative action for all
minority groups, both male and female, and all women, both minority
and non-minority. Consequently, the Contractor may be in violation
of the Executive Order if a particular group is employed in a substan-
tially disparate manner (for example, even though the Contractor has
achieved its goals for women generally, the Contractor may be in
violation of the Executive Order if a specific minority group of women
is underutilized).
10_ The Contractor shall not use the goals and timetables or affirmative
action standards to discriminate against any person because of race,
color, religion, sex, or national origin.
11. The Contractor shall not enter into any Subcontract with any person
or fi~ debarred from Government contracts pursuant to Executive
Ord~l;' 11246.
F-7
12,
The contractor1shall carry out such sanctions alld penalties for
violation of these specifications and of the Equal Opportunity Clause,
including suspension, termination and ~ancellation of existing sub-
contracts as may be imposed or ordered pursuant to Executive Order
11246, as amended, and its implementing regulations, by the Office
of Federal Contract Compliance Programs, Any Contractor who fails
to carry out such sanctions and penalties shall be in violation of
these specifications and Executive Order 11246, as amended.
13.
The Contractor, in fulfilling its obligations under these specifications,
shall implement specific affirmative action steps, at least as exten-
sive as those standards prescribed in paragraph 7 of these specifica-
tions, so as to achieve maximum results from i,ts efforts to ensure
equal employment opportuni ty. If the Contractor fails to comply with
the requiremen ts of the Executive Order, the implementing regulations,
or these specifications, the Director shall proceed in accordance with
41 CFR 60-4.8.
14.
The Contractor shall designate a responsible official to monitor all
employment related activity to ensure that the company EEO policy is
being carried out, to submit reports relating to the provisions hereof
as may be required by the Government and to keep records. Records
shall at least include for each employee the name, address, telephone
numbers, construction trade, union affiliation if any, employee
identification number when assigned, social security number, race,
sex, status (e.g" mechanic, apprentice, trainee, helper, or laborer),
dates of changes in status, hours worked per week in the indicated
trade, :::-ateof pay, and locations at which the work was performed.
Records shall be maintained in an easily understandable and retrievable
fODni however, to the degree that existing records satisfy this
requirement, contractors shall not be required to rr.aintain separate
records.
15.
Nothing herein provided shall be construed as a limitation upon the
application of other laws which establish di=ferent standards of
compliance or upon the application of requirements for the hiring of
local or other area residents (e.g., those under ~~e Public Works
Employment Act of 1977 and 'the Community Development Slock Grant
Program) .
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I
ERVIN'S ALL AMERICAN YOUTH CLUB, INC.
APPENDIX G
OMB
Circular A-110
"
Office of Management rnd Budget Circular A-110 (7 'P0/76)
A-110:1
OFnCE OF MANAGEMENT AND
BUDGET
[Circular No, A-llO)
GRANTS AND AGREEMENTS WITH INSTI-
TUTIONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
JULY 1, 1976.
To the heads of executive departments
and establishments.
Subject: Uniform administrative re-
QUirements for grants and other agree-
ments with institutions of higher edu-
cation, hospitals, and other nonprofit
organizations
1. PUrpose.-Thls Circular, promul-
gates standards for obtaining consisten-
cy and uruformity among Federal agen-
cies in the administration of grants to,
and other agreements with, public and
private Institutions of higher education,
public and private hospitals, and other
Quasi-public and private nonprofit or-
ganizations. This Circular docs not apply
to grants, contracts, or other agreements
between the Federal Government and
units of State or local governments
covered by Federal Management Cir-
cular 74-7.
Z. Effective date.-The standanis In
the attachments to this Circular will be
applied as soon as practicable but not
later than January 1, 1977.
3. Supersession.-This Circular res-
cinds and replaces parts III and IV of
the Appendix to Federal Management
Circular 73-7, Administration of COllege
and university research grants.
4. Policy intent.-Thc uniform stand-
ards and requirements included In' the
attachments to this Circular replace the
varying and often conftictlng require-
ments that have been imposed by Fed-
eral agencies as conditions of grants and
other agreements with recipients.
5. Applicability and scope.-Except as
provided below, the stands.rds promul-
gated by this Circular are applicable to
all Federal agencies. If any statue ex-
pressly prescribes policies or specific re-
quirements that difIer from the stand-
ards provided herein, the provisions of
the statute shall govern.
The provisions of the attachments of
this Circular shall be applled to subre-
clplents performing substantive work
under grants that are passed through or
awarded by the primary recipient if such
sUbreciplents are organizations de-
scribed in paragraph 1.
6. Definitions.
l!.. The term "grant" means money or
property prOVided In lieu of money paid
or furnished by the Federal Government
to recipients under programs that pro-
vide financial assistance or that provide
support or stimulation to' accomplish a
public purpose. The term "other agree-
ments" does not Include contracts which
are required to be entered into and ad-
ministered under procurement laws and
regulations. Grants and, other agree-
ments exclude (a) technical assistance
programs, which provide services instead
of money, (b) assistance In the form of
general revenue sharing, loans, 102.I1
guarantees, or Insurance, and (c) direct
payments of any kind to Individuals,
b. The term "recipient" Includes the
following types of nonprofit organiza-
tions that are receiVing Federal funds
from a Federal agency or through a
state or local government:
Public and private Institutions of high-
er education: pUblic and private hos-
pitals: and other quasi-public and pri-
vate nonprofit organizations such as (but
not limited to) commlmlty ll-ction agen-
cies, research Institutes. educational as-
sociations. and health centers.
The term does not Include foreign or
International organizations (such as
agencies of the United Nations) and
Go\'ernment-owned contractor operated
facilities or research centers providing
continued support for mission-oriented,
large scale programs that are Govern-
ment-owned or controlled, or are de-,
signed as federally-funded research and
development centers,
7. Requests for excepticms.-The Ornce
of Management and Budget may grant
exceptions from the requirements of this
Circular when exceptions are not pro-
hibited under existing laws.
However, In the Interest of maximum
uniformity, exceptions from the re-
quirements of the Circular v.>W be per-
mitted only In unusual c/l.Ses. Agencies
may apply more restrictive requirements
to a class of recipients when approved by
the Office of Management and Budget,
8. Att/U;hments.-The standards pro-
mulgated by this Circular are set forth
in the Attachments, which are:
Attachment A Cash '''depoSitories,
Attachment B Bonding and Insurance,
Attachment C Retention and custodial re-
quIrements for rewrds.
Attachment D Program Income,
Attachment E Cost sharing "nd matching.
Attachment F Standards for financIal man-
agement systems,
Attachment G Financial reporting require-
ments.
Attachment H Monitoring and reporting
program performance,
Attachment I Payment requirements,
Attachment J RevisIon of financial plans,
Attachment K Closeout procedures.
Attachment L S,uspenslon Bnd termInation
procedures,
Attachment M Standard form for applying
for federal assistance.
Attachment N Property management stand-
ards.
Attachment 0 Procurement standards.
9. Exceptions fOT certain recipients.-
Notwithstanding the provisions of para-
graph 7 if an applicant/recipient has a
history of poor performance. is not fi-
nanCially stable, or Its management sys-
tem does not meet the standards pre-
scribed in the Circular, Federal agencies
may impose additional requirements as
needed provided that such appllcant/
recipient is notified in writing as to:
a. Why the additional standards are
being imposed;
b. what corrective action Is needed.
Copies of such notifications shall be
sent to the OIDce of Management and
Budget and other agencies funding that
recipient at the same time the recipient
Is notified.
.
10. Responsibilities.-Agencies respon-
sible for administering prograrns that in-
volve grants and other agreements with
recipients shall issue the appropriate
regulations necessary to Implement the
provisions of this Circular. All portions
of such regulations that involve record-
keeping and/or reporting requirements
subject to the provisions of the Federal
Reports Act and OMB Circular A-40
must be submitted to OMB for clearance
before being Introduced into use. Upon
,request all regulations and instructions
implementing this Circular shall be
furnished to tile Office of Management
and Budget. Agencies shall also desig-
nate an official to serve as the agency
representative on matters relating t() the
!mplementation of this Circular, The
name and title of such representative
shall be fumL~hed to the Office of Man-
agement and Budget not later than Au-
!Sust 30. 1976.
11. lnqllirics,-Further information
concerning this Circular may be obtained
by contracting the Financial Manage-
ment Branch. Budget Review Division,
Office of Management and Budget,
Washington, D,C. 20503, telephone 395-
3993.
JAMES T, LYNN.
Director.
ATTACHMF.NT A,--CIRCULAR No, A-IlO
CASH DEPOSITORIES
1. This attachment sets forth standards
governing the use of banks and other In-
stltutlons as depositories of funds advanced
under grants and other agreements,
2, Except for situations described In para-
graphs 3. 4. and 5. no Federal sponsoring
agency shall:
a, Req ulre physical segrega tlon of cnsh de-
positories for funds which are provided to a
recIpient,
b. Estnbllsh any ellglblllty requIrements
for cash depositories for funds which are pro-
vided to a recipient,
3, A separate bank account shall be requlre
when applicable letter-of -credit agreements
provide that drawdowns will be mr.de when
the reclplent.s checks are presented to the
bank for payment,
4. Any moneys advanced to B recipIent
which are subject to the eontr61.., or regula-
!'Ion of the United States or any of Its officers.
egents or employees' (public moneys as de-
tined In Treasury Circular No, 1,76. as
amended) must be deposited In a bank with
Federal Deposit Insurance Corporation
(FDIC) Insurance coverage and the balance
exceedIng the FDIC coverage must be col-
laterally secured,
5, Consistent with the national goal of
expanding the opport\lnltles for minority
business enterprises. recIpients and 5\1b-
recipients shall be encouraged 'to use minor-
Ity banks (a bank which Is owned at least 50
percent by minority group members).
ATTACHM!:NT B,-CIRCULAR No, A-lIO
80NOING AND INSURANCE
L This attachment sets forth bondIng and
Insurance requirements for grants and other
agreements with recipients, No other bond-
Ing and Insurance requirements shall be Im-
posed other than those normally required by
the recipient.
2. Except as otherwise required by law. a
grant or other agreement that requires the
contraetlng (or subcontracting) for eon-
struC'tlon or facility Improvements shall pro-
vide for the recipient to follow Its own re-
" Office of Management and Bu,et Circular A-110 (7/30/76)
qulrements relating to bid gu8J'antees, per-
forma.nce bonds, IUld pa)'ment bonds unlfJ8ll
tbe construction contract or subcontract ex-
ceeds Uoo,ooO. For those oollJtracts or sub-
contl"&Cts exceeding tloo,ooO, the Federal
agency may accept the bonding policy and
requirements of the grantee provided the
Federal agency has made" a determination
that the QQvernment.s Interest Is adequately
protected, It ouch tL determination has not
been m&de, the minimum requirements ohall
be &8 follows:
a. A ln4 guarantee Iram each bld4er equIv-
alent to five percent 01 the bid prn:e.-
The "bid guarantee" shall consist ot a firm
commitment ouch as a bid bond, certUl.ed
check, or other negotiable Instrument ac-
companying a bid &8 &8Surance that the bid-
der will, upon acceptance of his bid, execute
ouch contractual documents &II may be re-
quired within the time specUl.ed.
b. A performance bond on the part 01 the
contractor for 100 percent 01 the contract
prlce,-A "performance bond" 10 one executed
In connection with a contract to secure ful-
fillment of all the contractor's obligations
under such contmct,
c. A payment bond on the part 01 the con-
tractor for 100 percent 01 the contract
prn:e.-A "payment bond" 10 one executed In
connection with a contract to e.soure pay-
ment as required by law of all persons sup-
plying labor and material In the execution of
the work provided for In the contract.
3. Where the Pederal Government guaran-
tees or Insures the repayment of money
borrowed by the recipient, the Federa.l
agency, at Its disCretion, may require ade-
quate bonding and lnBura~ It the bonding
and Insurance requirements ot the recipient
are not d~med adequate to protect the in-
terest of the Federal QQvernment.
4. The Fed,eral Bponsorlng agency may re-
quire &dequate fidelity bond coverage where
the recipient has no coverage and the bond Is
n~ded to protect the QQvernment'o Interest.
5. Where bonds are required In the oltua-
tlons descrti>ed above. the bonds shall be ob-
tained from companies holding certlficat.e6 of
authority u acceptable ouretles (31 CP'R
223).
ATI'ACHMltNT C.-<::mcuLAJI No. 1.-110
arn:NTION AND CUSTODIAL IlXQUlRIMltNTS FOa
aZCOJlD8
1. This attachment sets forth record reten-
tion requlrements for grants and other agr~_
ments with recipients. Federal sponsoring
agencies shall not Impose any record reten-
tion requlrementB upon rectplents other than
those described below.
2, Excep! for paragraph I, this attachment
also applies to subreclplents as referred to
In paragraph Ll of the basic circular.
3. Flna.nclal records, supporting documents,
statistical records, and all other records perti-
nent to an agreement &ball be retatned tor a
periOd ot three yeAl1l, with the tolloWlng
qUalifications :
... It any litigation. claim or audit Is started
betore the expiration ot the 3-year periOd, the
records shall be retained until all litigations
clalms, or audit finc11ngs involVing the recor~
have b~n resolved.
b. Records tor nonexpendable property ac-
quired with Federal funds &ball be retained
tor 3 years after Its final disposition.
C, When records are transterred to or maln-
talned by the Federall!ponsortng agency, the
3-year retention requirement Is not applica-
ble to the recipient.
4. The retention periOd starta from the
dAte ot the BubmJaslon ot the final erpenc11-
ture report or, tor grants a.nd other &.gTee_
ments that are renewed an,nUally, from the
date ot the submls8lon ot the annual
linanclal BtatWl report.
5. Recipient organizations should be au-
thorized by the Federal sponsoring agency,
If they so desire, to substitute microfilm
ooples In lieu ot original records,
6. The Federal sponsoring agency shall re-
quest transter ot certain recordo to Its cus-
tody trom recipient organizations when It
determines that the records po85es& long-
term retention value. However, In order to
avoid duplicate record-keeping, a Federal
oponsorlng agency may make arrangements
With recelplent organizations to retatn any
records that are continuously needed for
Joint use.
7. The head ot the Federal sponsoring agen-
cy and the Comptroller General ot the United
States, or any ot their duly authortzed repre-
oentatlves, shall have access to lUly pertinent
books, documents, papers. and records ot the
recipient organization and their subre-
clplents to make audits, examinations, ex-
cerpts IUld transcripts.
8. Unless otherwise required by law, no
Federal Bponsorlng agency Ilhall place re-
strlctloJlll on recipient organizations that will
limit public access to the reeords of recipient
organizations that are pertinent to a grant
or agreement except when the agency can
demonstrate that such recorc18 must be kept
confidential and would have b~n excepted
trom disclosure pursuant to the Freedom ot
Information Act (5 U.S.O, 552) It the reeords
h&d belonged to the Federal sponsoring
agency.
A'ITACHMENT D.-<::mcuLAa No. A-ll0
PIlOGRAN INCOMS
1. Federal sponsoring agencies shall apply
the standards set torth In this attachment In
requiring recipient organizations to account
tor program lnoome related to projects
financed In whole or In part With Federal
tuncls. Program Income represents groee In-
come earned by the recipient trom the fed-
erally 8upported activities. Such earnings ex-
clude Interest earned on advances and may
Include, but wUl not be Ilm1ted to, Income
trom service tees, sale ot commodJtles, usage
or rental fees, and royalties on patents and
coprlghts.
2. Interest earned on advances ot Federal
tunds wall be remitted to the Federal agency
except tor Interest earned on &dva.n0e& to
State3 or Instrumen.talltles ot a SlAte aa pro-
vided by the Intergovernmental Cooperation
Act ot 1968 (Public lAw ~77).
3. Proceeds from the sale of ~ and per-
sonal property either provided by the Fed-
eral QQvernment or purch&8ed In whole or In
part with Federal tuncls, shall be handled In
accordAllce With Attachment N to this cir-
cular pertatnlng to property management,
4. Unless the agr~ment provldea other-
wise, recipients shall have no obligation to
the Federal Government W1th respect to
royalties received as a result of oopyrlghts or
patents produced under the grant or other
agreement (see paragraph B, Attachment N).
5. All other program Inoome earned dWing
the project pertOd ahall be retained by the
recipient and, In accordance with the gTant
or other agreement, shall be:
a,' Added to tunds cOmmitted to the proJ-
ect by the Federal sponsoring agency and
recipient organization and be UBed to further
eligible program obJectives;
b. Used to finance the non-Federal share
ot the project when approved by the Federal
SPOOllOrtng agency; Or
c. Deducted trom the total project C08ts
In determining the net costs on which the
Federal share ot costs wUl be based,
ATI'ACBMrNT J!:.-<::Dlct71.AJt No. A-lIO
COST SlUJUNc AND MATCHING
I. This attachment sets torth crlterta and
Procedures tor the allowabUlty of caab and
I
A-110:2
In-kind contributions m&de by recipients or
subreclplents (&8 referred to In paragraph 5
ot the basic circular) ,or third parties In sat-
isfying OOIIt sharing and matching require-
ments of Federal sponsoring agencies. This
attachment also establls.hes criteria tor the
evaluation ot In-kind oontrlbutloJlll m&de by
third parties, and supplementB the guidance
set forth In Federal Management Circular
73-3 wlt/h respect to cost sharing on feder-
ally-sponsored rl!8earch.
2. The tollowlng definitions apply for the
purpose ot this attachment:
a. Pr01ect C03ts ,-ProJect OOBts are all al-
lowable costs (as set torth In the applicable
Federal cost prlnclpleB) Incurred by a recipi-
ent and the value ot the In-kind contribu-
tions made by the recipient or third parties
In accomplishing the objectives ot the grant
or other agreement during the project or pro-
gram period,
b. C03t ilharlng and 1nIItchlng,-In general,
cost sharing and matching represent that
portion ot project or program coots not borne
by the Federal QQvernment.
c. Ca.3h contribUt/ON.-Cash contrtbutlons
represent the recipient's cash outlay, Includ-
Ing the outlay of money contributed to the
recipient by non-Pederal third parties,
d. In-kInd contr/butlon.t.-In-klnd contri-
butions represent the value ot noncaah con-
tributions prOVided by the recipient and
non-Federal third parties. Oniy when au-
thorized by Federal legislation, may property
purchaaed with Federal funda be considered
&8 the reclplent.s In-kind contributions. In-
kind contrtbutlons may be In the form of
charges tor real property and non-expand-
able personal property, and the value ot
goods and services directly benefiting and
specUl.cally IdentUl.able to the project or
program.
3. General guidelines tor computing cost
sharing or matching are lLa tollows:
a. Cost sharing or matching may consist
ot:
(I) Charges Incurred by the recipient lLa
project COIJts. (Not all charges require cash
outlays by the recipient during tlhe project
periOd; examples are depreciation and use
charges tor buUdtnga and equlpment.)
(2) Project C08ts financed 'WIth cash con-
tributed or donated to the recipient by other
non-Federal public agencies and InBtltutlOJlll,
and private organizations and IndlvldualB
~d '
(3) Project C08ts represented by services
and real and personal property, or UN there-
ot, donated by other non-Federal public
agenclea and IJllltltutlOOll, and prlRate orge.-
nlzatloJlll and Inc11v1d ua.ls. ,
b. All contributions, both cash and 1n-
kind, shall be accepted as part of the reclpl-
ent.s C08t shartng and matching when such
contrIbutions meet all of th'e tollOwing
criteria :
(1) Are verUlable trom the recipient's
records;
(2) Are not Included lLa contributions tor
any other tederallY-/I.88lsted program;
(3) AIe necessary and rea.oonable tor prop-
er and elDclent acoompUabment of project
obJectives;
(4) Are types ot charge1l that would be al-
lowable under the applicable coet principles;
(5) Are not paid by the l"ederal QQvern-
ment under another ll.S8latance &.gTeement
(unless the agreement Is authorized by Fed-
erallaw to be UBed tor cost shAring or match-
Ing):
(6) Are provided for In the approved budg-
et when required by the P'ederal agency; and
(7) Conform to other provlsloWl of this
attachment.
4. Values for recipient in-kind oontribu-
tlons wUl be eatabllsbed In accordance WIth
the applicable coet principles.
Ll. Specl11c procedures tor the recipients In
establlsblng the va.lue of In-ltlnd contrlbu-
"
pffice of Management ani Budget Circular A-110 (7/30/76)
tlons from non-Federal third parties are set
forth below:
a, Vall/ation 01 voluntecr sCTl'ices,-Volun-
teer services may be furnl,hed by professional
and technical personnel. consultants. and
oth"r skilled and unskilled labor, Volunteer
services may be coun ted as cost sharing or
matchIng If the service Is an'lntegral and
necessary part of an approved pro~ram,
(I) Ratc", for voll/ntccr scrvicc.~,-Rl\tes for
volunteer, ,hould be consistent wIth those
paid for similar work In the reclplent's
orgl\nl?,atlon, In those l(lStances In which the
requIred skills are not found In the recipient
organlzntlon. rates should be consistent with
those pnld for similar work In the labor mar-
ket In which the recipIent competes for the
kind of services Involved,
(2) Voluntccrs ~mploycd by other organi-
2ations,-When nn employer other than the
recipient furnIshes the services of an em-
ployee, these services shnll 'pc valued at the
employee's regular rnte of pay (exclusive of
fringe benefits and overhead costs) provided
these ,ervlces nre In the same skill for which
the employee Is normnlly pl\ld,
b, Vall/ation 01 donated" erpcnd,able per-
sonal property,-Donated, expendable per-
sonal property Includes sueh Items as ex-
pendable equipment, ollice supplies. labora-
tory, supplies or workshop and classroom
supplies. Value assessed to expendable per-
sOl,al property Included In the cost or match-
Ing share should be reasonable nnd should
not exceed the 'market value of the property
at the time of the donntlon,
e, Valuation 01 donated, noncxpcndable
personal property, buildings, and land or
use thereol,
(1) The method used for charging cost
sharing or matching for donated nonex-
pendable personal property. buildings and
land may dllTer according to the purpose of
the grant or other agreement o.s (ollows:
(a) If the purpose of the grant or other
agreement Is to assist the recipient In the
acqulsltlon of equipment. buildIngs or land,
the total value of the donated property may
be c]almed as cost sharing or matching.
(b) If the purpose of the agreement Is to
support activities that require the use of
equipment, buildings or land. depreciation
or use charges for equipment and buildings
may be made, The full value of equloment or
other capital assets Bnd fair rent3.1 char,ges
for land may be allowed provided that the
Federal agency has approved the charges.
(2) The value of donated property wlll be
determined In accordance with the usual
accounting policies of the recipient with the
following qualifications:
(a) La'nd and buildings,-Thevalue of
donated land and bulldlngs may not ,exceed
Its fair market value. at the time of donation
to the recipient lIS established by an Inde-
pendent appraiser (e,g.. certified real prop-
erty appraiser or GSA representatives) and
certIfied by a responsIble olliclal of the
recipient.
(b) Nonexpend.able personal pTo'perty,-
The vfllue of donated non expendable personal
property shall not exceed the fair market
value of equipment and property of the same
age and condition at the tIme of donation,
(c) Use 01 sp=e,-The value of donated
space shall not exceed the fair rental valce
of comparable space lIS established by an
Independent appraIsal of companble space
and facilIties In a privately-owned building
In the SRme locallty~'
(d) Loaned equipment,-The value of
loaned equipment shall not exceed I ts fair
rental value,
6, The following requirements pertain to
the recipient's supporting records for In-
kind contrIbutions from non-Federal third
parties,
--
a, Volunteer servIces must be documented
and, to the extent feasible. supported by the
same methods used by the recipient for Its
employees.
b, The basis for determIning the valuation
for pei-sonal services. material. equipment,
buildings and land must be documented.
ATTACHMENT F,-CmcuLAa No, A-lIO
STANDARDS FOR FINANCIAL MANAGEMENT
SYSTEMS
I, This attachment prescribes standards for
fmanclal managemcnt systems of recIpients,
Federal sponsoring ngencles shall not Impose
adetitlo'nal standards on recipients unless spe-
cifically provided for In the applicable sta-
tutes (e,g,. the Joint FundIng Shnpllficntlon
Act, P,L, !l3-510) or other nttachments to this
circular. However. Federal sponsoring agen-
cIes are encouraged to make suggestions and
as._lst recipients In estballshlng or Improving
finnncial rnanagcJnent systems when such as.
slstancll Is needed or requested,
2. Recipients' financIal management sys-
tems shall provide for:
a. Accurate. current and complete dIsclo-
sure of the financial results of ench federally
sponsored project or program In accoretance
with the reporting requirements set forth In
Attachment G to this circular, When a Fed-
eral sponsoring agency requires reporting on
an accrual basis, the recipient shall not be
required to establish an accrual accounting
system but shall develop such accrual dnta
for Its reports on the basis of an analysis of
the documentation on hand.
b. Records that Identify adequately the
source and application of funds for federally
sponsored activities, These records shall con-
tain Infonnatlon pertaining to Federal
awards, authorlzatlons. obligations. unobli-
gated balnnces, assets, outlays, and Income,
c, Effective control over and accountability
for all funds. property and other assets. Re-
cipients shall adequately safeguard all such'
assets and shall assure that they are used
solely for authorized purposes,
d, Comparison of actual outlays with bud-
get amounts for each grant or other agree-
ment. Whenever appropriate or required by
the Federal sponsoring agency. financla] In-
formation should bl! related to performance
and unit cost data.
e, Procedures to mlnlmbe the time elapsing
between the transfer of funds from the U.s,
Treasury and the disbursement by the recip-
Ient. whenever funds are advanced by the
Federal Government, When advances are
made by a letter-of-credlt method, the recip-
Ient shall make drawdowns as close as pos-
sible to the time of making dIsbursements,
f. Procedures for determining the reason-
ableness. allowablllty and allocability of costs
In accordance with the provisions of the ap-
plicable Federal cost principles and the terms
of the grant or other agreement.
g, ACl:ountlng records that are supported
by source documentation,
h, Examinations In the form of audits or
Internal audits, Such audits shall be made
by qualified Individuals who are sulliclently
Independent of those who authorize the ex-
penditure of Federal funds. to produce un-
biased opinions. conclusions or Judgments,
They shall meet the Independence criteria
along the lines of Chapter 3. Part 3 of the
U,S, General Accounting ornce publication,
Standards for Audit of Governmental Organ-
Izations, Programs. ActIvities and Functions.
These examinatIons are Intended to ascer-
tain the effectiveness of the financial man~
agement systems and Internal procedures'
that have been established to meet the terms
and conditions of the agreements, It Is not
Intended that each agreement awarded to the
recipIent be examined. Generally, examina-
tions should be conducted on an organiza-
tion-wide basis to test the fiscal Integrity of
I
A-110:3
financlnl transactions. a.. well as compliance
with the terms and condl tlons of the Federal
grants and other agreements, Such tests
would Include an appropriate sampling of
Federal agreements, ExamInatIons will be
conducted wi th reasonable frequency. on a
continuing hllsls or at seheduleet Intervals,
usually annually, but not less frequently than
every two years, The frequency of these ex-
nmhmtlons shall depend upon the nnture.
SIM and the complexity of the actvllty, These
examInations eto not relieve Federal agencies
of their audit responsibilities, but may atrect
the frequency and scope of such audits,
I. A systematic method to assure timely and
appropriate resolution of audit findings and
recornnlcndatlons.
3, Primary recipients shall require subre-
clplents (as defined In pamgraph 5 of the
basic cIrcular) to adopt the stnndnrds In
pnragraph 2. above except for the require-
ment In subparagrnph 2e, regarding the use'
of the letter-of-credlt method and that part
of ,:;ubparagraph 2a, regnrdlng reporting
fonns and frequencies prescribed In Attach-
ment, G to this circular,
ATTACHMENT G,-ClaCULAa No. A-I]O
FINANCIAL REPORTING REQUIREMENTS
1. This attachment prescribes uniform re-
porting procedures for recIpients to: sum-
marize expenditures made and Federal funds
unexpended for each nward. report the status
of Federal cash advanced. request advances
and reimbursement when the letter-of-credlt
method Is not used; and promulgates stand-
ard forms Incident thereto.
2, The following definitions apply for pur-
poses of thl. attachment:
a, Accrued cxpend,iture~.-Accrued ex-
penditures are the charges Incurred by the
recipIent during a given period requiring the
provision of funds tor: (I) goods and other
tangible property received; (2) services per-
formed by employees, contractors. subreclpl-
ents, and otber payees, and (3) other
amounts becoming owed under programs for
which no current services or performance Is
required.
b, Accrued inco'7'e,-Accrued Income Is the
sum of (1) earnlhgs during a given period
from (I) services ,performed by the recipi-
ent; and (11) goods and other tlUlglble
property dell ,'ered to purchasers; and (2)
amounts becoming owed to the recipient for
whll;h no current services or performance Is
required by the recIpient.
c, Federal lund~ authori2ed.-Federal
funds authorized are the total amount of
Federal funds obllgated by th~ Federal Gov-
ernment for use by the recipient, This
amount may Include any authorized carry-
over of unobllgated funds from prior fiscal
years when permitted by law or agency
regulation.
d, In-kind contributions,-In-klnd con-
tributions are defined In Attachment E to
this circular.
e. Obligations,-Obllgatlons are the
amounts of orders placed, contracts and
grants awarded, services received. and simi-
lar transactions during a given period that
will require payment by the recipient during
the same or a future period.
f. Outlays,-Outlays or expendItures repre-
sent charges made to the project or program,
Tney may be reported on a cash or accrual
basis, For reports prepared on a cash basis,
outlays are the sum of actual cash disburse-
ments for direct charges for goods and serv-
Ices. the amount of Indirect expense charged,
the value of In-kind contrlbuflons applled,
and the amount of cash advances and pay-
ments made to subreclpients, For reports pre-
pared on nn accrual basis. outlays are the
sum of actual cash disbursements for direct
charges for goods and services. the amount
of Indirect expense Incurred, the value of In-
" Ottic.:! of Management and Bu,et Circular A-110 (7130/76)
kind contrIbutions applied, and the net In-
crease .lor decrease) In the ..mounts owed by
the recipient for goods ..nd other property
received, for aervlcea performed by employ-
ees, contractors, subreclplents and other
payees and other amounts becoming owed
under programs for which no current serv-
Icea or performance are required,
g, Program Income,-Program Income Is
defined In Attachment D of thla circular. It
may be reported on a ca.sh or accrual ba.s Is ,
whichever Is used for reporting outlays,
h. Urwbllgated balance,-The unobligated
balance Is the portion of the funds author-
Ized by the Federal spon!lOrlng agency that
has not been obligated by the recipient and Is
determined by deducting the cumulative
obligations from the cumulative funds au-
thorized.
I. UnliquIdated obllgatlo....,-For reports
prepared on a cash' ba.sls, unliquidated obli-
gations represent the'amount of obligations
Incurred by the recipient that has not been
paid. For reports prepared on an accrued ex-
penditure ba.sls. they repreaent the amount
of obligations Incurred by the recipient for
which an outl..y has not been recorded.
3. Only the following forms wll1 be au-
thorized for, obtaining financial Information
from reclplenta.
a. Flrumcial Statu3 Report (Exhibit 1).
(I) Each Federal sponsoring agency ahall
require recipients to USe the standardized
Fln&nclal StatuS Report to report the atatus
of funds for all nonconstructlon projects or
programs, The' Federal sponsoring agencies
may, 110wever, have the option of not re-
quiring the F1n..nclal Status Report when
the Request for Advance or Reimbursement
(paragraph 4a) or Report of Federal Cash
Transactions (paragr..ph 3b) Is determined
to provide adequate Information to meet
their needs. except that a final FInancial
Status Report shall be required at the com-
pletion, of the project when the Request for
Advance or Reimbursement form Is used only
for advances.
(2) The Federal sponsorlng agency shall
prescrl be whether the report shall be on a
cash or accrual basis, If the Federal sponsor-
Ing agency requires accrual Information and
the reclplent.s accounting records are not
normally kept on the accrual ba.sls, the re-
cipient shall not be required to convert Its
accounting system, but shall develop such
accrual Information through best estimates
based on an analysis of the documentation
on hand.
(3) The Federal sponsoring agency shall
determine the frequency, of the Financial
Status Report for each project or program
considering the size and complexity of the
particular project or program, However, the
report shall not be required more frequently
than quarterly or less frequently than an-
nually except as provided In subparagraph
3a (I) above, A final report shall be required
at the completion of the agreement.
(4) Federal sponsoring agencies shall re-
quire recipients to submit the Financial
Status Report (original and no more than
two copies) 'no later than 30 days after the
end of each specified reporting period for
quarterly and semi-annual reports. and 90
days for annual and final reports, Extensions
to reporting due dates may be granted upon
request of the recipient,
b, Report 01 Federal C~3h Tran3actio....
(Exhibit 2),
(I) When funds are advanced to
recipients through letters of credit or with
Treasury checks, the Federal sponsoring
agencies shall require each recipient to sub-
mit a Report of Federal Cash Transactions.
The Federal sponsoring ..gency shall use this
report to monitor cash advanced to recipients
..nd to obtain disbursement Information for
each agreement from the recipients,
(2) Federal sponsoring agencies may re-
quire forecasts of Federal cash requirements
In the "Remarks" .ectlon of the report,
(3) Wh~n practical and deemed neces'Rry,
the Federal sponsoring agencies may require
receipts to report In the "Remarks" .ectlon
the amount of cash advances In excess of
three days' requirements In the hands of sub-
recipients and to provide short narrative ex-
pl..natlons of actions taken by the recipients
to reduce the exceS3 b..lances.
(4) Recipients shall be required to submit
not m:lre than the orlgln..l ..nd two copies of
the Report of Federal Cash Transactions IS
working days following the end of each
quarter. The Federal sponsoring agencies
may require a monthly report from those
recipients receiving ..dvances totaling 'I
mUlIon or more per year.
(5) Federal sponsoring agencies mal' waive
the requirement for subml5Slon of the Report
of Federal Cash Transactions when monthly
advances :10 not exceed SlO,OOO per recipient.
provided that such advance.! are monitored
through other forms contained In,J;hls ..t-
t:ichment, or l!, In the Federal sponsoring
ngency's opinion. the reclplent's accounting
controls ..re adequate to minimize excessive
Federnl advances,
4. Except as noted below, only the follow-
Ing forms wll1 be authorized for the reclpl-
en~3 In requesting advances and reimburse-
ments,
a, Requc3t lor Advance or Reimbursement
(Exhibit 3).
(l) Each Federal sponeorlng agency shall
adopt the Request for Advance or Reimburse-
ment as a standardized form for all non con-
~tructlon programs when letters-of-credlt or
predetermIned advance methods are not used,
Federal sponsoring agencies. however, have
the option of using this form for construc-
tion programs In !leu of the Ou tlay Report
and Re:juest for Relmburseme:lt for Con-
struction Programs (subparagraph 4b).
(2) Recipients shall be authorized to sub-
mit requests for advances and reimburse-
ments at least monthly when letters-of-
credit are not used, Federal sponsoring
ngencles shall not require the submission of
more than the original and two copies of the
Request for AdvlUlce or Reimbursement,
I
A-110:4
b, Outlay report and request for reim-
bursement lor con3truction programs (Ex-
hibit 4),
(I) Each Feder..l sponsorIng agency shall
adopt the Outlay Report and Request for Re-
Imbursement for Construction Programs as
the st:\ndardlzed format to be used for re-
questing reimbursement for construction
programs, The Federal sponsorl!:g agencies
may, however. have the option of substltut-
Ing the Request for Adv..nce or Reimburse-
ment Parm (subparagraph 4a) when the
Federnl agencies determine that It provides
adequate Inform..tlon to meet their needs.
(2) RecipIents shall be authorized to sub-
mit requests :or reimbursement at least
monthly when letters-of-credlt ..re not used.
Federal sponsoring ..gencles shall not require
more than the original and two copies of the
Outlay Report and ~uest for RelmburS<l-
ment for Constructlon Programs,
5, When the Fede",l sponsoring agencies
need nddltlon..1 Inform..tlon In using these
forms or more frequent re.ports. the following
shall be observed:
.a, When additional Information Is needed
to comply with leglslntlve requirements.
Federal sponsoring agencies shall Issue In-
structions to require recipIents to submIt
such InformatIon under the "Remarks" sec-
tion of the report.~,
b, When necessary to meet specific pro-
gnm needs Federal sponsoring agencies shall
submit the proposed reporting requirements
to the Fln..nclal Management Branch. Budget
Review Division. Office of M..nagement ..nd
Budget for approv..l prior to submLo;slon of
the reports for clearance under the pro-
visions of OMB Circular No, A--40,
c, When a Federal sponsoring agency hns
determined that a reclplent's accounting sys-
tem does not meet the Stl\J)dards for FI-
nancl9.1 Man..geme:lt contained In Att..ch-
ment F to this circular. additional pertinent
Information to further monItor grants and
other agreements may be obtained upon
written notice to the recipient until such
time as the sy"tem Is brought up to standard,
d, The Federal sponsoring agency, In ob-
taining Information as In paragraphs a. b
and c above. must comply with report clear-
ance requirements of the Office of ?>bnage-
ment and Budget Circular No. A--40. as re-
vised.
6, Federal sponsoring agencies have the
option of shadIng out any line Item on any'
report that Is unnecessary for decision-mak-
Ing purposes,
7, Federal sponsoring agencle~ should ac-
ccpt the Identical Information 1rom the re-
cipients In machine usable format .1r com-
puter printouts In !leu of prescribed formats,
8, Federal sponsoring age nclcs may P,To-
vide computer outputs to recIpients when It
wlll expedite or contribute to the accuracy
of reporting,
9. Federal spollSorlng agencies are author-
Ized to reproduce these forms, The forms for
reproduction purposes can be obtained from
the Office of Man3.gement and Budget.
,
"
Office of Management a1 Budget Circular A-110 (7/30/76) I
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.' Offic~ of Management and Budlet Circular A-110 (7/30/76)
I
INSTRUCTIONS
Please type or print legibly. Items 1,2,3,6,7.9, lOcI, lOe. 109, 10i. 101. lla, and 12 are self.explanatory,
specific instructions for other items are as follows:
1'- E"I",
4 Entar the employer Idanllncatlon number aulgned by
the U.S. Intem.1 Revenue Service or FleE (Institution)
code, If required by the federallponloOrinl agency.
5 This lpece II ruerved for an account number or other
Identltytnl numbers that m.y be assigned by the
recipient.
8 Enter the month. day, and yee, of the beginning Ind
end In, of thl, proJeoct period. for formul.!l Irants thet
.r. not aWllrneej on . project Nllis, show the g,ant
po r1od.
10 The purpose 01 vertical columns Ca) through (I) II to
provide finlllncl.1 deb for each pro. rIm, function, and
activity In the budget IS approved by the federal spon.
sorlng .,eney. 11 additional columnl are neede-d, use a.
many addition. I forms as needed end Indicate pale
number In space provkjed In upper right; however, the
totals of all programs, functions or ectivltles should be
shOW'n in column (g) ot the first page. for agreements
pertaining to several Catalog of federal Domntlc
Assistance program. thet do not require a further
functlona' or ectlvtty ele.slfieatlon breakdown, enter
under columns (a) through (I) the title of the program.
for ,",no or other aulstance agrMments contalnlns
muttlple progrems where one or mar. programs require
e further breakdown by tunctlon or actlYlty. use .
M1perate form for each prognlm showing the applicable
functions or activities In the aeperete columns. for
IdIOts or other essistlllnce agreements containing s.....
erel functions or activities which are funded from
several proRrams. prep.!lre II 'Separate fonn for each
IIctlvlty or function when requested by the Federal
aponsorinl ag.ncy.
lOa Enter the net oullay. This amount should be tha same
II' the amount reported In line 10e of the last report.
If there hal been en adjustment to the amount ,hown
pnrv~usfy. please attach expl.netlon. Show zero If this
Is tha In~I.1 r.port. '
lOb Entar the total groos prog"'m outlays (Ie.. rebat...
refunds, and other discounts) for this report period,
Including disbursements of ca.h realized as program
income. fOf' reports that ere prepared on a cash
ba.is. outlays are the sum of actual cash disburse.
ments for goods and services, the amount of Indirect
expense charged. the value of In. kind contributions
applied, and the amount of cash advances and
payments made to contractors end subsrantees. For
reports prep8~ on In accrued expenditure balls, olJt.
lays are the sum of adual cash disbursements, the
amount of Indirect expense incurred, the value of In-
kind contributions epplie<l, and the net Increase (or
decresH) In the amounts o~ by the recipient for
goods end other property received and for lervlces
perlormed by employees, contractors, lubg:rentees, and
other payees.
1'- Eftl",
JOe Enter the amount o( a" progrem Income realized In
this period that is rtl'Quirf!'d by the terms and con.
ditions of the Federal eW8rd to be deducted from total
protect costs. rer reports prepared on a cash bells,
enter the amount of cash Income received durlnl the
reporting period. ror reports prepared on IIn accrual
basis. enter the amount of Income earned since the
beginning of the reporting period. Ylhen the terms or
conditions allow program Income to be added to the
total award. IIxplain In remBri(I, the lource. emount
and disposition of the Income.
lOt Enter amount pertaining to the non.Federal share of
program outlays Included In the amount .~n line e.
IOh Enter total amount of unliQ~ldeted obligations for this
project or progrem, includlnlR unliquidated obligations
to subgf'1lntees and contractors. Unliquidated obliga.
tions are:
Ca5h basl~blllatlons Incurred but not paid;
Accrued expenditure ba.ls--obllgations Incurred but
for whlcl\.en outlay has not been recorded.
Do not include eny amounts that have been Included
on lines a through ,. On the final report, line h should
heve a zero belence.
101 Enler the Feda",1 Iha", of unliquidated oblllallonl
,hown on line h. The amount shown on this line should
be the difference between the amounts on lines hand l.
10k Enter the sum of the amounts shown on lines gllnd ,.
ff the report 15 final the report shoukl not contain eny
unliquidated oblllatlonl.
10m Enter the unobligated balBnce of Fedef'1ll funds. This
amount should be the difference between lines k and I.
11 b Enter rate In effed dunnR the reporting period.
lIe Enter amount of the base to which the f'1Ite was applied.
lld Enter total amount of Indirect cod charged during the
report period. '
lIe Enter amount of, the federal share charged during the
report period.
If more then one rate was applied during the project
period, include a separate s,chedule showing bases
against which the Indirect cost rates were applittd, the
respective Indirect retes the month. day, and year the
indirect rates were In effect. amounts of fndlrKt ex.
pen.e charged to the project, and the Federal share of
indirect expense charged to the project to date.
A-110:6
'\
Office of Management anI Budget Circular A-110 (7/30/76) I
A-110:7
Approved by Office of I,bnallcmanl and Budllel. No, BO-ROl B2
FEDERAL CASH TRANSACTIONS REPORT 1. fflCt~ral aponsonnl 1,Me)' aM orllnilltionll .lelll"l."1 'D which this ,.port
is lubmithd
(See instnLcti07l.8 on the back. If report is fOT more than one grant or
assistance agreement, attach completed Standard Form E7E-A.)
2. RECIPIENT ORGANIZATION 4. redfH"ll lrant Of' of". jd~tifiCl. 5. RKipj~r'. Kcou"t ".,mbtr ...
lion number l~tifyi"l JlU"'Mf
NtJm~ : 6.. l.tt., of uedil "Unlber 7. l..t per"''''. V'Owchar """,bet'
N.mhe-r Give total number for this period
end Stred :
8. P.yment Vouchers crodilod 10 9. TrMlury duds r.uivtd (1I.1kdhtr
)'OUr K:COUnt M' "'Of dt.P08it~d.)
CUll. SI4t. 10. PERIOD COVERED BY THIS REPORT
ond ZIP Cod.,
3. FEDERAL EMPLOYER ~ FROM (moftrl\. do... WflOr) TO (MO"tA., d4v ~t.ar)
IDENTIFICATION NO.
a. Cash on hand beginning of reporting period $
b. Letter of credit withdrawals ,
c. Treasury check payments
11. STATUS OF
FEDERAL d. Total receipts (Sum of lines b and c)
CASH e. Total cash available (Sum of lines aflnd d)
f. Gross disburs'elllents
(See 8pecifie g. Federal share of program income
ins tnLction.~
on the back) h. Net disburserrn!nts (Line f minus line u)
i. Adjustments of prior periods
j. Cash on hand end of period $
12. THE A\10UNT SHOWN 13. OTHER INFORMATION
ON LINE IlJ. ABOVE.
REPRESENTS CASH RE. a. Interest income $
QUIREMENTS FOR THE
ENSUING
Dall8 b. Advances to subgrantees or subcontractors $
.
14. REMARKS (A ttach addiwonal sheets of plain paper, if more space is required)
~
15.
CERTIFICATION
SIGNATURE DATE REPORT SUBMITTED
I certify to the best of my
knowledge and belief that AUTHORIZED
this report is true in all re- "
spects and that all disburse- CERTIFYING TYPED OR. PRINTED NAME AND TITLE
ments have been made for
the purpose and conditions OFFICIAL
of the grant or agreement lIAr... C0d4) ,IN""'borr> (ExhtWtoft)
TELEPHONE I
THIS SPACE FOR AGENCY USE
272-101
EXHIBIT 2
STANDARD fORM 272 17-76)
Pruc:ribe<1 by Offic. of Manaeement and Budeet
C1RCUL AR NO. A-I 10
"Office of Management and BUdOlt Circular A-110 (7/30/76)
I
A-110:8
INSTRUCTIONS
Pleese type or print legibly. Items I, 2, 8, 9, 10, lId, 11e, lIh, and 15 are self explanatory, specific
Instructions for other Items are as follows:
1'-
E1lt",
3
Enter employer identification number assigned by the
U.S. Internal Revenlle Service or the FICE (institution)
code.
If this report covers more than one grant or other
agreement; leave Items 4 and 5 blank and provide the
information on Standard Form 272-A, Report of Fed.
erel C.nh TranSllctio"S--<;ontiiKJed; otherwise;
4
Enter Federal grant number, agreement number, or
other Identifying numbers if requested by sponsoring
agency.
5
This space reHrved for an eccount number or other
Identifying number that may be eulgned by there-
clplent.
6
Ent<< the letter of credit number that epplles to this
report. H all advances were made by Treasury check,
enter "NA" for not applicable and leave Items 7 and 8
blank.
7
Enter the voucher number of the last letter.of.credit
payment voucher (Fonn TUS 5401) that was credited
to your account.
lla
Enter the total amount of Federal cesh on hand at the
beginning of the reporting period Including all of the
Federal funds on deposit, Imprest funds, and unde-
peeited Treasury checks.
lIb
Enter total amount of Federal funds received through
payment vouchen (Form TUS 5401) that were cred-
Ited to your account during the reporUng period.
llc
E~ the total amount of all Feder&! funds received
during the reportinc period through TrellSury checks,
whet~ or not deposited.
llf
Enter the total Fedef-al cash dt.bursements, maM
during the re-portiflc period, k1cludlng cash received
H program Income. Disbursements III used here also
include the a",mlnt of advances and payments less
refunds to subg",nt..s or contnctors, the cross
amount of direct salariH' and "MIlK, incllldin; the
E" t",
Item
emplopee's shllre of benefits If trellted IlS a direct cost,
interdepartmental charges for supplies Ilnd services,
Ilnd the amount to which the recipient is entitled for
Indirect costs.
IIi Enter the Federal shllre of progrllm tncome that was
required to be used on the project or program by the
terms of the grant or IlgrMm,~nt.
lli
Enter the Ilmount.of a" adjustments pertaining to prior
periods Ilffecting the ending balllnce that have not
been included in any lines above. Identify each grant or
agreement for which IldJustment was made, and enter
an explanation for 8ISch adjustment under "Remarks."
Use p/llln sheets of ~per If additional space Is required.
11)
Enter the total amount of Federal cllSh on hllnd et the
end of the reporting period. This emount should Include
ell funds on deposit, imprest funds, and undeposited
funds (line e, less line h, plus or minus line I).
12
Enter the estimated number of days until the cash on
hand, shown on line 11), will be expended. If more than
three days cash reqirements are on hand, provide an
explanation under "Remarks" as to why the drawdown
was made premllturely, or other reasons for the excess
cash. The requirement for the explanation does not
epply to prescheduled or eutomatic advences.
13a
Enter the Ilmount of Interest earned on advances of
Federal tunds but not remitted to the Federal agency.
If this Includes eny Ilmount earned and not remitted to
the Federal sponsorinc Ilgency for over 60 days, explllin
under "Remllrks." Do not report Intlll"est: earned on
edvances to States.
13b
Enter emount of advence to secondary recipients in-
cluded in item 11 h.
"I
14
In addition to providing explanations as required above,
live additional eXplllMltion deemed necessary by the
'eel~nt and for inforTrnltion required by the Federlll
sponsoring Ilgency in complillnce with governing legis-
lation. Use plllin sheets of paper If Ildditionlll SpllC8 il
required,
(l:
Office of
Management anl Budget Circular A-110 (7/30/76)
FEDERAL CASH TRANSACTIONS REPORT I
CONTINUATION
(This lo-rm is eompl.t,.d and att<u:h.d to Standard Form t7t ""II/1Oh.n
rrpo-rting11LOT'e than ~ g,.a..nt 01" Q.ll,l!lt.&tan.c:e aprf:tm..tnt.)
2. RECIPIENT ORGANIZATION (Giv. Mm<! onll/ CUI .hown in it.m t, SF
t7t)
I
A-110:9
FROM (~o"l1h. ..." ....,...
I TO (M".,A. "'r. ......r)
4. list information below for each grllnt or other agreement covered by this report. Use additionel forms if more space is required.
FEDERAL GRANT DR OTHER It>ENTIF I RECIPIENT ACCOUNT NUMBER FEDERAL SHARE OF NET DISBURSEMENTS
CAllON OR OTHlR
IDENTIFYING NUMBER NO OIS8URS[t.A[NTS ((;.,..... CUMULATIVE
~"ow a .ubdiwlon bl/ other idrnti- c1i..b"........t....h l... P"o."O," i.... NET DISBURSEMENTS
p:mg n""'I"... if ~.qui...d by the ('(0...... ru""l"d) FOR REPORTING
.d....a.l Sp""",,"ng,Ag.ncv) PERIOD
lal (bl Ie) Id)
$ $
,
I
.
-
I .
"
5. TOTALS (SMuld eorr.spond with anwunu .iwwn on SF !7t CUI
1011010.: eolu",n (eI the .am<! CUI Line J I h; eO/"'""1t (d) the .u", ollilte,',
Ilh ."d I Ii, of Ihis SF t7t and cumulative disbur..mrnts .hown "" $
Last ..cpo-r-t. A ttceh ..'planation 01 cnl/ di/f....nu~,) $
'\
272-201
STANDARD FORM 272-A (7-761
P.....crlb.d by OHlc. of Managem....' CFld Buds.,
CIRCUL AR NO. A.1I0
,Office of Management ani Budget Circular A-110 (7130/76)
I
INSTRUCTIONS
Please type or print legibly, Items I, 3, 5, 9, 10. lie, lie, II f. Ilg. IIi, 12 and 13 are self,explanatory;
specific instructions for other items are as follows:
It..... Enl."
2 Indicate whether request 15 prepared on Clsh or IIC'
crued expenditure basis.. All requests for advances
shall be prepered on II cash basis.
4 Enter the Federal gfent number, or other identifying
number assigned by the 'federal sponsoring agency. If
the advence or reimbursement is tor more then on.
Ins"t or other al(ee~nt. insert N/A.; then, show the
allresate amounts. On a separate .heet, list Nch
grant Of IIgreement number Ind the Federal share of
outlays made against the grant or Igre-eoment.
6 Enter the employer identification number assigned by
the U.S. Internal Revenue Service, or the flCE (institu.
tion) code if ~uested by the Federal agency.
This spece is reserve-d for an account number or other
kI.ntifyina number thet mey be enigned by the
recipient.
8 Enter the month, dey, end yeer for the beginning end
ending of the p.riod cover~ in thl~ request. If the re.
quest is for en edvence or for both en edvance end reo
Imbursement, show the period thet the advence wHt
cover. If the r'Quest Is for reimbursement, show the
period for whic,", the relm~rsement Is requested.
Note: The Federal sponsoring agencies hey. the option of
requiring re-ciplents to complete items 11 or 12, but not
both. Item 12 should be .u.ed whim only e minimum
amount of inh)rmation is needed to make an advence
.nd outlay inforrhetion contained In Item II can be
obtain.d In a timely manner from other reportl.
II Th. purpo.. of tho .....ic.' column. (.). (b). .nd (e). i.
to provide spece for sepanlte co!! breakdowns when II
project h8s been plan"~ and bvdgeted by program,
function. or activity. If additional columns ere needed,
It,."., Entf"ll
use 85 many additional forms es ne<<ted and indicate
page number in space prt)lV'ided in upper right; how.
~er, the summary totals of all programs, functions,
or activities should be shown in the "totBl" column on
the first page.
11a Enter in "es of dl!lte", the month, dllY, end year of the
ending of the accounting period to which this emount
applies. Enter program outlays to date (net of refunds,
rebates, end discounts), in the appropriate columns.
For requ~ts prepllred on a cesh basis, ouUays e~ the
sum of actual cash disbursements for goods and serv.
lees. the emount of indirect expenses cherged, the
value of in-kind contributiDf:l.$ ap~ied, end the amount
of cash advances IIInd payments mede to subcontntc.
to~ 8nd subr~ipiffitS. for requests prftPllired on an
IIICCrued expenditure bltsis, outleys are the sum of the
actual cash disbursements. the emoont of indirect ell('
penses Incurred. and the net Increa~ (or decreas.e) In
the amounts owed by the redptent for goods end othef
property received end for services performed by em.
pfoyees, contf1llcts. subgranlees and other peyeoes.
lib Enter the cumulative cesh Income received to date, tf
feQU"ts are prepered on a cash basis. for requnts
p~pared on IIn accrv.d expenditure basis, enter the
cumulative income eemed to date. Undet'" etther basis.
enter only the emount applicable to progntm income
that was required to be used for the project or pro-
grem by the tenns of the grent or oth.r agreement.
lid Only when making requests for advenc. payments,
ent.r the totel .s1imeteet amount ot cash outleys that
";11 be made during the period covered by the advenc.,
13 Complete the certification before submitting this
request.
A-110:11
,
<' Office of Management and BUdlet Circular A-110 (7/30/76)
I
Approved by Ornee of Management and PAGE OF
OUTLAY REPORT AND REQUEST FOR REIMBURSE. Budget. No, 8(}-RO I Bl rAOES
MENT FOR CONSTRUCTION PROGRAMS 1. TYPE 0... REQUEST 2. BASIS Of REQUEST
(SfIf ;1tsfnte!;07t.t Oft ba.ek) o FINAL o PARTIAL o CASH o ACC_UAL
J. FEDERAL SPONSORINQ AGENCY AND ORClANlZATlONAL El(M[NT TO 4. FEDERAL eFt""'T OR OTHER ~ "ARTlAl PAYMENT REQUEST NO.
WHICH THIS R[PORT IS sUBMlnEO ID[NTI"YINQ NUMBER ASSIGNEO
BY FEDERAL AGENCY
6. ~~~\,O[YR[R IDENTInCATION I"~ RECI'IENT ACCOUNT OR OTNER P'latOO C'OYDtD IT TNts ft"OllT
IDENTIF'YING NUMBER
,~o.. (....-'4. 'fo.. .-r) TO (...~ "-.. ...-.-)
'0 RECIpIENT ORGANIZATION 10. PAYU I"'~ __. M-w... MN U4j,I..-, C"- u.-.}
H._ , H_ ,
No. .... No. ...
...... , ...... ,
CUll. cu..
~ to.u ..d S'''..-f ....
rIP Cod. : ZIP C_.:
II. STATUS OF F\JNDS
PROGRAMS--FU NCTION !:r-ACTlVITI ES
CLASSIFICATION (4) Cb) Ce) TOTAl
.."
I, Admlnlstrat;ye expense $ $ $ , $
b, Preflmlne ry expenM
c. Land, structure.. right-of-way
d, Architectural engineering beslc 'ees
.. Other archltecturel enrlneer1ng fH5
f. Prolect Inspection ,_
g. Land development
h. RelocetJon expflnsfI
I. Relocation payments to Individuals find
businesses
J. DemoUtlon end removal .
k, Construction and project Improvement
cost
I. Equipment
m. Miscellaneous cost
n. Total cumuletive to dete (sum o(line-s
. Ihru m)
0, Deductions for program income
p, Net cumulative to .date (line n minus
line 0)
q, Federal share to date
r. Rehabilitation grants C100% r!lim.
bursement)
., Total Federal share (sum of lines Q
end r)
I, Federal payments previously no-
quested
u, Amount requested for reimbu~ement $ $ $ $
v. Percentage of physical completion of % % % %
project
12. CERTIFICATION SIGNATURE OF A\1THORIIED CERTIFYING DATE REPORT
OfFICIAL sUBMlnED
1 certify thllt to the best of my knowledge
end belief the billed costs or disburse- 8. RECIPIENT TYPED OR PRINTED NAME ....HO TITLE TELEPHONE (A.- eoc&..
ments are in accordaT)ce with the terms ",.-0_ --' 1IS'1..........
of the project and that the reimbursement
represent! the Federal share due which $IQNATUR[ OF AUTHORIZED CERTlfYlNQ DAT'[ SICNED
has not been previously requested end Of'ICIAL
that an inspl!'Ction has been perlormed b, Representative
end ell work is In accordance with the certifying to line TYPED OR PAINTED N....ME /\HO TITLE T[L[PHON[ IA,._ e.od.-
llv,
terms of the eWillrd. ...-.!l....~~~)
211-101
EXHIBIT 4
STAHOlol.AD rORN 271 (1-16)
Prew<r1bed try !>ffl~ 0' ..h"_lIPrn_nt.rtd 8ucSa-'t
CIRCULAR NO. A.110
A-110:12
,
O,ffice of Management and rUdget Circular A-110 (7130/76)
I
INSTRUCTIONS
P1e<l:M type or print letJfbly. Items 3,4, 5, 8, 9, 10. 1 b. and 11 yare ",,'f-explanatory; specific instructions
for other Items _ as follows:
It.... ....."
llhor1< .... __....t. _, II the ,equ~ .. 1Ittal, _
_ IoNINI _Id __ .... 11-' ooot of 1M
~
2 Ifltew wt1ethw ......unb .re ~ en ... ~
__..........tIi.__.
& _, "'. ~ 1.",,01_ ~um""" ........... by
tho U,S, Int.mm R_.. __(.... nel (1notItution)
_. II roqUenM ~ _ "-derel _J.
7 This ,fMft' k ~ for an account numbw << 8th...
identify.... __ the( ""'Y M _._ by 1M
f'eOl\o/.nt,
11 ",. pvtlJOH '"' _I .....m... ..~ th""'llh (e) Ie to
r-'<t. _.. 1M _..h _ ___ _ .
_"'" pl'ojoet ~.. ...... ""n~'" .M lOodpted by _
....... -.. .... -!tv. II _nel ........... ....
...-ded. UN as "'.ny .ddttionel fenn& a. ...-.ded anti
Ioodleel. _ _..., 1ft .,... ....."...,... in _ rItlht;
_. .... _....ry _.. .1 .N ''''8no-. "'_.
"AS .r adMt'e& .hould t.. ~ In .... ."totaI"
eeltf~" en th.... ,.... All ~.... ,..,...-t......
. ......u_ 1>0....
111 _ ........... _nd'" Ie, ...... -.. .. _. .'
_. ......1. of __ .nd ... _ edmlnlotnot"'"
~.... tneIuOe the am--.nt of -tntefMt ...,..
.men ._ by _no", .............. ,.. .-
the amount ~ ~ -...n- ... . ..~..... wl'teet.
I U, _ _ ,-1"ln, .. _ won of ...,..inc .nd
tlnltrnlnc. .....Id"l ounreys ..... ....po. oi~ldnl _
hol... ..... ell _ won _I,. prior' to -'
aot.... \I. ...
1)C __ ell ......._ dl.-ly __ wlth the ---...
- '"' lend, ........ olrvclu_ .ntI .....led riBht..".
_.
Uti _ _ .... "'" ........ '"' ....hlt_no' en.__
II. EnlM _ .""'llodu..1 enro-;ng _. 00 no(
tncJude ..... afMlUMs ___ _ line d.
111 1_ ~~ ..... _ .... of __ end
--
III 1- '"" -_ __ with _ _pment of
...... """'.... .... ,rtmery ,_ of the ....nt is Ie""
~-, Tho .mount ,...ulninc to Ie"" ~
...- ~ -... with ""'/or _rvction
- M __ '""" _ _..ory end ...._ on
_k.
Ilh 1nM<____"',.-._
MoMory._.nd _...... '"' ~_..
Inl ~ _), 00 "'" "'"'hod. _nto _ few
........ion adminlwtmiw ~ theM amounts
- 1>0 iMl_ In __"'own on line..
Iii Int., Ill. .""'un! '"' _..... pIIl""onb ...... ~_
n!Cipi.ent to .l,plaeed' ~n... 'anna. business con.
cerns, and nonproM orwaniLftionc.
/1- .-"
Ilj [nO< _ .......... ."" __ of omployeeo of the
~ ."" ""~ to th;rd perty contrectOB die
....aty ~ in p.rtorming demoIftion Of" rem<wel of
sl""","- ""'" ~ Iond, AH proc_ from tho
.... 01 ~ Of" .. rMTlOYII' of aructUrH ahould be
credlled to Ihie K.COUnl; thereby ...ftecti"1 _
_nts if ......._ by _ r ed...lllII.OWY.
11. E.....r th<Me amounts auocWtted wtth the actual con-
~ of, etdd;tton to, Of ~orBtio" of a facility.
N.o, inducM: in this category. the amounts 'Of proJ.n
Improwment::a .....:.. as NWeft. ..,........ ~K-aJM"fI,
- 1lPti....
III Entet amounts fer aN equtpme..t, both 'hr~ and moy.
ebk. etrek.r.tw ef eqvl(M'nent ~ for construction. 'Of
....mplo. permo_ntly ettached Iobonlory t.bl.., built,
... audto N.ueI 'l]'Sfem&.. Moveble desks, chai". and
Ieboonolory -~
II... _ _ __ lor ell _ no( .peclllcelly m.".
--.
lJft Ent.... 1M kltal' eum....tiw amo,,"1. to dete which
_Id M__oI._........... m.
lLe Iwter the tot.I amount of Pl"OIntm 'ncome applied to
the IflInt or contreot ....-...me"'" .xcept income In-
......... ... line J. identify .... . "p8rt1t. aheet of pepe.r
the aoun:es .nd types el ..... .....m..
11, ~ the Mt c::u1'ft01atiw amount hJ date which should
... the an'1OtMt ........ on Nne n minus the amount
WI line o.
1141 -- the _ _.. of _ .mount .how" on llno p.
1 iT [ntw the ameutC.. of r.h.Rbftttailon 'I'1IInt peyments
...... to IndtvWuets when p~,.m "'i.'at~ provtdes
100 --' ~ ~ 11M 'od....1 ...n<y.
lit Int.... I'" tot.I _nt '"' ,_...1 pe~b JlA"lously
~ 11_......... _1or~1 'otm.
.....--.
u. _ _ _nt now 1>01"1 roq....- "'" __rM.
I"t'tent. n. ~ tftoukf .... the ..m.n-nee ~.n
the ."...... ........" Oft atner. . .nd t. If di".,.nt. ex.
,--.----
u. To M ~ed by _ ~ ollIclot who is ,.'
~ - the operahon of .... Pl"OI'ranl. Th. date
ahouk:f "' the Ktu.l cIiM.. the tann Is subm;rted '" the
r-..., ._.
1211 To be eompIet.ed by the oft\ci.e( rep~se"tlltlve
who .. c:ertHyinc \0 the ~n( of project: completion
a pnrvoided for" in the ..".,.. of t.... .rant Of .I,....,."."t.
A-110:13
"I
"Office of Management and BUdft Circular A-110 (7/30/76)
ATTACHMENT H,-CrRcULAR No, A-IIO
MONITORING AND REPORTING PROGRAM
PERFORMANCE
L This attachment sets forth the proce-
dures for monitoring and reporting program
performance of recipients,
2, Recipients \shall monitor the performa:lce
under grants and other agreements and.
where appropriate. ensure that time sched-
ules are being met, projected work units by
time periods are being accomplished. and
other performance goals are being achieved.
This review shall bo made for each program,
function. or actl vi ty of each agreemen t as set
forth In the approved application or award
document.
3, Recipients shall submit a performance
report (technical report) for each agreement
that brletly presents the following Informa-
tion for each program, function, or activity
Involved as prescribed by the Federal. spon-
soring agency:
a, A comparison of actual accomplishments
with the goals establlshed fO,r the period. the
tlndlngs of the Investigator, or both, It the
output of programs or projects can be readlly
quantltled, such quantitative data should
be related to cost data for computation of
unit costs.
b. Reasons why established goals were not
met.
c. Other ,pertinent Information Including,
when approprIate, analysis and explanation
of cost overruns or high unit costs,
4. Except as provided In a and b ,below.
and In subparagraph 3a( I). Attachment G,
recipients shall submit the performance or
technical reports to Federal sponsoring agen-
cies and the Financial Status Reports cov-
ering the same period In the frequency estab-
lished by Attachment G of this Circular and,
where appropriate, 1l. final technical or per-
formance report after completion of the
project on a date specltled by the Federal
sponsoring agency. The Federal sponsoring
agency shall prescribe the frequency with
which the performance reports wlll be sub-
mitted WIth the request for advance or reim-
bursement when that form Is used In !leu
of the Financial Status Report, Except as pro-
vl(led for In paragraph 5 below, performance
reports shall not be required more frequently
than quarterly or less frequently than an-
nually. Federal sponsOring agencies may
waive the requirement for recipients to sub-
mit performance reports with the tlnanclal
reports under the following circumstances:
a. When the recipient Is required to sub-
mit a performance report with a continua-
tion or renewal app!lcatlon.
b, When the Federal sponsoring agency de-
termines that .on-site technical Inspections
and certltled completion de.ta wlll be suffi-
cient to evaluate construction projects.
c. When the Federal sponsoring agency re-
quests annual tlnanclal reports on a tlscal
year basis but It Is necessary to get annual
prcgress reports on a calendar year basis.
5, Between the required performanr.e re-
porting dates. 'events may occur that have
slgnltlcant Impact upon the project or pro-
gram. In such Instances, the recipient shall
Inform the Federal sponsoring agency as soon
as the following types of conditions become
known:
a, Problems, delays, or adverse condl tlons
that wlll materially affect the ability to at-
tain program objectives, prevent the meet-
Ing of time schedules and goals. or preclude
the attainment of project work units by es-
tab!lshed time periods. This disclosure shall
be accompanied by a statement of the action
taken, or contemplated. and any Federal as-
sistance needed to resolve the situation,
b, Favorable developments or events that
enable time schedules to be met sooner than
anticipated or more work units to be pro-
duced than originally projected,
6, It any performance review conducted
by the recipient discloses the need for change
In the budget estimates In accordance with
the criteria establlshed In Attachment J Co
this Circular, the recipient shall submit a re-
quest for budget revision,
7, The Federal sponsorIng agency shall
make site visits as frequently as practicable
to:
a. Review program accomplishments and
management control systems, and
b, Provide such technJcal assistance as
may be required.
8, Federal sponsoring agencies shall submit
proposed technical and performance reports
to the Office of Management and Budget for
approval In accordance with the report clear-
Rnce requlrements of OMB Circular No, A--40
as revised.
ATTACHMENT r.--CmcuLAR No, A-110
rA YMENT REQUIREMENTS
L This attllChment esta.bHshes the re-
quired methods of making payments to recip-
Ients, These methods will minimize the time
elapsing between the disbursement by these
recipients and the transfer of funds from the
United States Treasury to these recipients
whether such d'lsbursement occurs prior to
or subsequent to the transfer of funds,
2, Payments can be made to recipients
through a letter-of-credlt, an advance by
Treasury check. or a reimbursement by Treas-
sury check. The followIng detlnltlons apply
for the purpose of this attachment:
a, Letter-oj-Credit.-A letttr-of-credlt 15
an Instrument certified by an authorized offi-
cial of a Federal sponsoring agency that au-
thorizes a rcclplent to draw funds when
necded from the Treasury, through " Fcd-
eral Reserve bank and the reclplent's com-
mercial bank, In accordance wIth the provi-
sions of Treasury Circular No, 1075, as re-
vised.
b, Advance by Treasury. eheck.-An ad-
vance by Treasury check Is a payment made
by a Treasury check to a recipient upon Its
request before outlays are made by the
recipient, or through the use of predeter-
mined payment schedules.
c, Reimbursement by Treasury eheek,-A
reimbursement by Treasury check Is a Treas-
ury check paid to a recipient upon request
for reimbursement from the recipient.
3, Except for construction grants and
other construction agreements for which op-
tional payment 'methods are authorized. as
described In paragraph 5, the letter-of-credlt
method shall be used by Federal sponsoring
agencies If all of the following conditions
exist:
a. If there Is or will be a continuing rela-
tionship between a recipient and a Federal
spensorlng agency for at least a 12-month
period and the total amount of advance pay-
ments expected to be received within that pe-
riod from the Federal sponsoring agency Is
$250.000 or more. as prescribed by Treasury
Circular No, 1075, For Joint funded projects
the Treasury has authorized a dollar criteria
of $120,000.
b, If the recipient has established or dem-
onstrated to the Federal sponsoring agency
the Willingness and ab1l1ty to maintain pro-
cedures that WIll minimize the time elaps-
Ing between the transfer of funds and their
disbursement by the recipient,
c. It the reclplent.s tlnanclal management
system meets the standards for fund control
and accountability prescribed In Attachment
F to this Circular. "Standards for FInancial
Management Systems."
4, The method of advancing funds by
Treasury check shall be used. In accordance
with the provisions of Treasury Circular No,
I
. A-110:14
1075, when the recipient meets all of the re-
quirements specified In paragraph 3, above.
except tho,e In subparagraph 3a,
5, The reimbursement by Treasury check
method shall be the preferred method If the
recipient does not meet the requirements
specified In subparagraphs 3b and 3c. above.
A t the option of the Federal sponsoring
agency. this method may also be uscd on any
construction agreement. or If the major por-
tion of the program Is accompllshed through
private market financing or Federal loans,
and the Federal assistance constitutes a
minor portion of the program, When the re-
Imbursement method Is used. the Federal
sponsorl ng agcncy shall make payment
within thirty days after receipt of the billing,
unless the billing- Is Improper.
6, When the letter-of-credit procedure Is
used, the recipient shall be Issued one con-
solldl\ted lelter-of-credlt, whenever possible
to cover anticipated cash needs for all grants
and other agreements awarded by the spon-
soring agency, Likewise, to the extent possi-
ble. when the advance by Treasury check
mcthod Is used, advances should be con-
solltlated (pooled) for all grant.~ and other
agreements made by the sponsoring agency
to that recipient, ' .
7. Unles3 olherwlse required by law. Fed-
eral sponsoring agencies shall not wIthhold
paym,nts for proper charges made by recipi-
ents at any time during the project or pro-
g-rnm period unless (a) a recipient has tailed
to comply with the program objectives. award
conditions. or Federal reporting requlre-
men ts: or (b) the recipient Is Indebted to
the United States, and collection of the In-
debtedness wlll not Impair accompllshment
of the objectives of a project or program
sponsored by the United States,
Under such conditions, the sponsoring
agcncy may, upon reasonable notice. Inform
the recipient that payments will not be mr;de
fpr obllga tlons Incurred after a specltled date
dntll the conditions are corrected or the In-
debtedness to the Federal Government Is
liquidated,
ATTACHMENT J,--CmcuLAR No. A-110
REVISION OF FINANCIAL PLANS
L This attachment sets forth criteria and
procedures to be followed by Federal spon-
soring agencies In requiring recipients to re-
port 'deviations from tlnanclal plans and to
requcst approvals for financial plan re-
visions. '
2. The tlnanclal plan Is the financial ex-
pression of the project or program as ap-
proved during the application and/or' .ward
process, It may Include either the Federa' and
non-Federal share. or only the Federal share:
depending upon sponsoring agency require-
ments. It should be related to performanc'e
for program eval ua tlon purposes whenever
appropriate and required by the Federal
sponsoring agency,
3, For nonconstructlon awards. recipients
,hall Immediately request approvals from
Federal sponsoring agencies when there Is
re"son to belleve that within the next seven
days a revision wlll be necessary for the
following reasons:
a, Changes In the scope or the objective of
the project or program,
b, The need for add I tlonal Federal fund-
Ing,
c, The transfer of amounts budgeted fer
Indirect costs to absorb Increases Indirect
costs or vice versa. It approval Is required
by the Federal sponsoring agency.
d, The expenditures as require approval In
accordance with FMC 73~, "Cost Principles
for Educational Institutions," For all other
awards. appro,'al requirements for other
Items of expenditures may be Imoosed If they
are consistent with those In FMC 73~, No
other rcqulrements for specltlc Items may be
, !
Office of Management and rUdget Circular A-110 (7/30/76)
Imposed unless a deviation has been ap-
proved by the Omce of Management and
Budget.
e. Recipients plan to transfer funds allotted
for training allowances (dlrect payments to
trainees) to other categories of expense.
4, None of the substantive programmatic
work under a grant or other agreement may
be subcontracted or transferred without prior
approval of the Federal sponsoring agency.
This provision does not apply to the purchase
of supplies. l1lAterlal. equipment, or general
support services,
5. The Federal sponsor1ng agency may
also, at Its option, restrict transfers of funds
8JJlong dlrC<:t cost cl\.tegorles for awards In
which the Federal share exceeds floo.OOO
when the cumull\.tlve amount of such trllll6-
fers exceeds or Is expected to exceed five
pen;snt of the total budget as Ia.~t approved
by the sponsoring agency. The sl\.me criteria
shall e-pply to the cumula.tlve amount of
transfers among progr&lJlll, functions, and
aotlvltles when budgeted separately for an
award, except tha.t the Federal sponsoring
agency &ho.JI perm.lt no trlUlSfer that would
cause any Federal approprll\.tlon, or part
thereof, to be used for purposC6 other than
th056 Intended. '
6. All other changes to nonconstructlon
budgets. except' for tbe changes described
In paragraph 8. below, do not require ap-
proval. This Includes the use of recipient
funds In furtherance of program objectives
over and above the recipient mlnJmum share
Included In the approved budget.
7, For construction a.wards, recipients
shall request prior e-pprovnls promptly from
Federal sponsoring agencies for budget re-
visions wherever:
Ii, The revision results from changes In
the scope or the objective of the project or
program, and
b. The revision Increases the budgct
amounts of Federal funds needed to com-
plete the project.
8, When a Federo.J sponsoring agen::y
makes an aWlLl'd that provides support ,for
both construction and nonconstructlon work.
the Federal sponsoring agency may require
the recipient to request prior approval from
the Federal sponsoring agency before m3klng
any fund or budget translers between the
two types of work supported.
9. For both construction and nonconstruc-
tlon aWlLl'ds, Federal sponsoring agencies
shAll require recipients to notify the Fed-
eral sponsoring agency promptly whenever
the amount of Federal authorized funds Is
expected to exceed the needs of the recipient
by more than t>5.000 or fIve percent of the
Federal award, whichever Is greater, This
notification wUl not be requlred If applica-
tions lor additional fundlng are submJtted
for continuing grants or contracts.
10, When requesting approval for budget
revisions. recipients shall use the budget
forms that were used In the application
unless a letter request will suffice.
I L Within 30 calendar days from the date
of receipt of the request for budget revi-
sions, Federal sponsoring agencies shall re-
view the request and notlly tbe recipient
whether the budget revisions have been ap-
proved, If the revision Is stili under con-
sideration at the end of 30 calend3r days,
the Fe<leral sponsor1ng agency shall lnIorm
the recipient In writing of the date when the
recipient may expect the decision.
ArrACHMENT K,--CIRCUl:AJl No. A-110
CLOSEOUT PROCEDURES
1. This attachment, prescr1bes uniform
closeout procedures for Federal grants and
other agreements with recipients.
2. The following definitions shall apply for
the purp05C of thL~ attachment:
a. Closeout.-The clO6COut of a grant
a.greement Is the process by which a Federal
sponsoring agency determlnes that all ap-
plicable administrative actions and all re-
quired work of the a.greement have been
completed by the recipient and the F'ederal
sponsoring agency.
b. Date 01 complction.-The date of com-
pletion Is the date on which all work under
grants and other agreements Is completed or
the date on l.he award document, or any
. supplement or amendment thereto, on which
Pederal sponsorship ends.
e. Duallowed co. b.-Disallowed costs are
th05C charges to a grant or other agreement
that tbe F'ederal sponsoring agency or Its
representative determines to be \lI1allow-
able, In accordance with the applicable Fed-
eral cost principles or other conditions con-
tained In the agreements.
3, All Federal sponsoring agencle.~ shaIJ es-
tablish clO5Cout procedures that Include the
folJowlng requlremen18:
a. Upon request, the F'ederal sponsoring
agency shaIJ make prompt payments to a
recipient for aIJowable reimbursable co.~ts
under the grant or other agreement being
closed out.
b, The recipient shaIJ immediately relund
any balance of unobligated (unencumbered)
C9.Sh that the Federal sponsoring agency has
advanced or paid and that Is not authorl7.cd
to be retained by the recipient for use In
other grant.~ or other agreements.
. c. The Federal sponsoring agency shaIJ ob-
tain from the recipient within 90 calendar
days after the date of completion of the
agreement aIJ financial, performance, and
other reports requlred IlS the condition of the
agreement, The agency may grant extensions
when requested by the recipient.
d. When authorized by the grant or other
agreement. the Federal sponsoring agency
shaIJ make a settlement for any upward or
downward adjustments to the Federal share
of costs after these reports are received.
e, The recipient sh.aIJ account for any prop-
erty acquired with Federal funds. or re-
ceived from the Government In accordance
with the provisions of Attachment N to thIs
Clrcular, Property Management Standards.
f. In the event a final audit hl\S not been
performed prior to the closeout of the grant
or other agreement. the Federal sponsoring
llgency shall retain the right to recover an
appropriate amount after fuIJy considering
the recommendations on d1saHowed coots re-
sulting from the final audit.
4. Suspension and termination procedures
are contained In Attachment L to this Cir-
cular.
ArrAcHMENT L.-CDlCULAIt No. A-110
SUSPENSION AND TERMINATION PROCEDURES
L This attachment prescr1bes uniform
suspension and terminatIon procedures tor
Federal gran18 and other agreements with
re::lplents.
2. The folJowlng definitions shall apply
ler the purpcse of this attachment:
a. Termination.-The termination of a
grant or other agreement means the ('an-
ceIJatlon of Federal sponsorship. in whole or
In part. under an agreement a.t any time
pr10r to the date ot completion.
b, Suopenoion,-The suspension of a grant
or other agreement Is an action by a F'ederal
sponsoring agency that temporarUy sus-
pends Federal spOns:lrshlp under the grant
or other agreev>ent. pending corrective ac-
tion by tbe recipIent or pending a decision
to terminate the grant or other agreement
by tbe Federal sponsoring agency.
;3. All Federal sponsoring agencies shaIJ
provide procedures to be followed when a
recipient has faUed to comply wltb the terms
I
A-110:15
of the grant or other agreement and condi-
tions or standards, When that occun;. the
Federal sponsoring agency may. on reason-
able notice to the recipient, suspen,d the
grant or other agreement. and withhold fur-
ther payments. prohibit the recipient from
Incurring additional obligations of funds,
pending corrective action by the recipient, or
a decision to termination In accordance with
psragraph 4. The Federal sponsoring agency
shaIJ allow a1l necessary and proper costs
that the recipient could not reasonably avoid
during the period of suspension provided that
they meet the provisions of the applicable
Federal cost principles.
4. Federal sponsorl ng agencies shall pro-
vide for th& systematic settlement of ter-
minated gran18 or other agreements Includ-
Ing the following:
a. Termination for callse,-The Federal
sponsoring agency rriay reserve the right to
terminate any grant or other agreement In
whole or In part at any time before the date
of completion, whenever It Is determined that
the recipIent has failed to comply with the
conditions of the agreement, 111e Federal
sponsoring agency shaH promptly notify the
recipient In writing of the determination and
the rel\Sons for the termination. together
with the effective date, paymen18 made' to
recipients or recoveries by the Federal spon-
soring agencies under grants or other agree-
ments terminated for cause shall be In ac-
cordance with the legal rights and liabilities
of the parties.
b. Termination for convenience,-The Fed-
eral sponsoring agency or recipient may ter-
minate grants and other agreements In whole
or In part when both p'artles agree that the
continuation of the project would not pro-
duce beneficial results commensurate with
the further expenditure ot funds, 111e two
parties shaH agree upon the termination con-
ditions. Including the effective date and, in
the case of partial terminations, the portion
to be terminated. The recipient shall not
Incur new obligations for the terminated por-
tion after the etTectlve date, and shaH can-
cel as many outstanding obHgatlons as pos-
sible. The Federal sponsoring agency shaH
allow full credit to the recipient for the
Federal share of the noncancellable obliga-
tions, properly Incurred by the recipient prior
to termination,
ArrAcIlMENTM.-CIRCULAR No, A-I 10
STANDARD FORM FOR APPLYING FOR
FEDERAL ASSISTANCE
1. This atta.chment promulgll\tes a stand-
ard form (SF 424) to be used by public and
'private Institution,!; of higher education,
public and private hospitals and other quasi.
public and private nonprofit organizations as
a face'sheet for applications when applying
for Federal grants under programs covered
by Part I, Attachment A, OMB Crlcular No,
A-95. In addition, agencies are particularly
encouraged to etxend the use of SF 424 to
common programs with State and local gov-
ernments where this form Is now required by
FMC 74-7,
2. The SF 424 may also be used, on an op-
tional basis. to f\llfiIJ the requirements of
OMB Circular A-95 for a notification of In-
tent, from applicant to clearinghouses. that
Federal IlSslstsnce wllJ be applied for. Local
or State clearinghouse procedures wUI govern
the use of the form for this purpose,
3. The standard form will also be used by
Federal agencies to report to the clearing-
houses on major actions taken on R!,pllca-
tlons reviewed by clearinghouses In accord-
a.nce with OMB Circular A-95, and to notify
States of grants-In-aid awarded In accord-
ance wIth Treasury Circular 1082,
Office of Management and Bulget Circular A-110 (7/30/76)
FEDERAL ASSISTANCE
1. 6}PE 0 PREAPPllCATlON
ACTION 0 ""I'lICATlON
(~;;:t,::- 0 NlmFlCATION Of IKTlJCT ('()pt.)
r:) [j REPORT Of f[DERAl ACTION
4. LEGAL APPLICANT/RECIPIENT
.. Appl iean! H..... :
~, Or..niulio. U.11 :
c. SlrNl/P.O. 8aJl :
d, City :
I. Slate :
c
a
5
I
s
~
i
h. Co'Uol ~....... (No....
" .....'h..... No.) :
7. TITLE AND DESCRIP'TION OF APPLlCANrl PROJECT
10. AREA OF PROJI!CT IMPAC'- (N"..... 0{ .I+tu, ........_.
S....... .k.)
13.
P~EO ~UN-DlNg;
&. APPLI.
CANT'S
AI"PlI-
eATIOt'l
L_..
llIa..t
L Iou.1)> :
.. ZIP Code:
., IlUMBER
~, ~",T[
r__.....
19
11. ESTt~"TI:l;} IfUM.
BER 01" M1\SONS
trVIIU'ITING
.00 I. AP~UC-'Hf
,00
14. CONGRUt!oNAL DISTRICTS OF:
~ '1lO1eef
., FlIDER"!. ,
b, ArPLlCMT
c, STATE
d, LOCAl.
., OTHE~
I. TOT"!. S
20. FEDERAL AGENCV TO
00 1&. PROJECT START
, 1M 1'1: T _r -..tA My
III
,00 II. ~r~~EiJfh~~T~JO
,00 fEDERAL AGENCY ~ 19
RECEIVE REQUEST (N-. C..... II...... %/1' ~
,00
~
6
~
1
!
t
tl
22.
., T. lh. best oi my kno..lod.. ..d MlIo!,
dl" j" this ,,-Mtl~iutlon/.ppllc.UNl .r.
I'ru. ..,d corr"t, .h, doc.ument till bMR
duly .ulhoriJod br tit. .......In' bodr eI
lIl. 'Pl'liunt ..d tit. IPl'lic..t ..11/ ~
wfth tho .tueltod __ 1/ the PSlol-
In.1 .. Ipprvvld.
THE
APPLICANT
CEI'lTWIES
THAT ~
23.
CERTIFYING
REPRE.
SENTATIVE
2-4. AGENCV ~M[
., TYPED PlAME AHO Tin!
,
26. ORGANIZATIO~ UNIT
!
i 29. ADORESS
~
I 31. ACTION TAteEN
I 0 .. AWAAOEO
~ 0 ~. REJICTIiO
0 I, IlETUllnllO 1'011
AhlEIlt)t,t!HT
~ o d. DE!l!RREO
C
= o .. WITIlOAAWII
31.
FEOERAL AGENCY
"-95 ACnON
u.
J'UNDrNCl
I. ~1[)f1lAL
~, APl"lltAHf
c. SlAT[
4. LOOAl
. , Ofttftl
$
I.
lOTAl
$
I. I" "4111"1 ~ lotiOft, .., COWl""'" .......".. froM d.rin,hou.. weA ..,..
.id...... 1/ ....." _M I. .... ..or ......01_ eI hrt 1. OM8 Clr-culll .........
M .... Mu II II hIat ....
If. Ii'ftOJECT
DURATION
Y_r
M....n..
~ dov
I
A-110:16
OMB Appro..' No, ~rlS
3.IITAn:
Al"f"UOA-
nON
IDDnl-
nr:1t
.. _BU
~. OATt
ASSIQHro
rOOf' .......11. olav
III
5. fr:Or:RAl ~M1"LOYP IO€f(nf'teATION NO.
6-
PRO.
GRAM
I. NUMBER
b. TInE
I I I. I I I I
( Fro,"
1'od...al
CIMalo, I
8. TYP[ 01' -","P~ICAH1' (RECIPIENT
1.-St.1o ~..u"ty Ad,.. I\pftCJ
t~~=~1o q' t ,~~~~:r T~~,::,"II.n~ """tuti...
Olrlricl K-Otftor (Sporlfvl:
D-Counl)>
[-City ,
f- $elloo' Dltlrtd
1-3IlPO<tr',"ct ""- n
J.b BRUt' oJJ1H'.".rio,c NUn-
" TYM: QI' MllISTANCE
......,Ic C.rHt D-htttHHI..
B-Cu.,l.-.....ot '-oth.r
&-to-It
."''''G''~ m
~t. l<<tt.-r(.)
11. TYP[
1.-H....
a.....R.n.....1
Of APf't.ICA TlON
C--Rw'.1oo (........_Iotl...
D-Co"ti.....t1N1 n
E7\tn- opp-ropriot. I. taft"
15. TYPE Of CHANG'[ ('or lie... Ue)
1.-ln...... DoHI" f-{)Ihor (Spec/tv):
8-Oecr..... D.n_"
&-Ifllc,..... Du,..t!'tJlll
O-Oeu..... D.,.Uea
(..C..coll.l'..
8ft"'" flpprO. ~1
,...;.,w r.ctor (I) L.J-1--.l
Ill. EXISTING fEDERAL IDENTIFICATION NUMBER
21. REMARKS ADDED
o V.. 0 No
~, II '"'IlIlnd .., VMS Co",ul.. 1.-95 \1110 .ppllc.lioo .... ovbonlltod. pu""..l to I.,
.tnIctlOftI thtftln. to .ppropriat. .1..r1...hotI...... ."d ,II r.po""s ..... .tbdli.d:
I.)
C2I
(3)
~. IlllNAT\JRE
J7. AOMINISTItATtV[ OfFIC[
.00
.00
.00
.00
.00
.00
Nfl"'..
llX>""e
R"'~N.
..1l6e1<<od
o
o
o
o
o
o
'\
....,.v. d4v'
L DATE SIGItED
Y_r
],
25. APPLICA. r_...............v
T'ON
RECEIVED 19
, 21. 'EDERAl APPLICATION
IDENTIFICATION
10. fEDERAL GRANT
IOENTlFICATlON
r_ _u. ...."
2-4.
STARTING
DATE 19
36-
r:NDINQ
DATE 19
37. REMARKS ADDED
Y_r
........tA
-..v
U. ACTION DAn ~ 19
n. CONTACT FOIl: AOOITIO~L INfOR"'A.
TlON (H.._ G..J "'"r>A- .......b...)
r..--
......v. ....v
o Vea
~, f[OERAl AGEIlCY 1.-95 OffiCIAL
INo.... ..owIlol-or>A- "".)
ONo
BT~DARO FORM 424 PAGE 1 UD-71l!
~ .. G&A. T.e-alIoC---, Ck....r T~T
Office of Management and rUdget Circular A-110 (7/30/76)
I
A-110:17
SECTION IV-REMARKS (Plea.u referenu tM pr~r item ?lumber from SutUnut 1,11 or III, if a.ppli=bl4)
'\
STANDARD FORM 424 PAGE 2 (10-75)
Office of Management and Buctet Circular A-110 (7/30/76)
I
A-110:16
GENERAL INSTRUCTIONS
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).
APPUCANT PROCEDURES FOR SECT10N I
^pplicant will complete all items in Section I. If an Item Is not applicablil, write "NA". If additional space is needed, insert
an asterisk ".", and use the remarks section on the back of the fonn. An explanation follows for each item:
ltam
3b.
4a-4h.
5.
6b.
7.
8.
9.
1.
Mark appropriate bolt. Pnl-appllc8t1Qn and applIca-
tion guidance is in FMC 74-7 and Federal agency
program instructions. NotlficJltion of intent RUid-
ance is in Circular A-95 procedures from clear-
inghouse. Applicant will not use "Report of Federal
Action" box.
2a.
Applicant's own control number, If desired.
Dote SectIon lis p",pared.
Number Dsslgned by State clearinghoUse, or If dele-
gated by State, by areawide clearinehouse. All re-
quests to Fedel1llagencies must contain this identi-
fier if the program Is covered by Circular A-95 and
required by applicable State/areawide clearing-
house procedures. If in doubt, consult your c1eer.
inghouse.
2b.
3a.
68.
Date applicant notified at c18C1ringhouse Identifier.
Legal name of appllcant/reclplent, name of primary
organizational unit which will undertake the nslst-
ance activity, complete address of applicant, a~
name and tolephone number of person who can pro-
vida further infonnation about this request.
Employer identification number of applicant as as-
signed by Intornal R8VIlnue ServIce.
Use CatllJog of Fedel1ll Domestic Assistance num-
ber assigned to program under which assistance is
requested. If more than one program (e.g., joint.
funding) write "multiple" and explain in remarks.
If unknown, cite Public law or U.S. Code.
Program title from Fedonll Cntelog. AbbrevlDte If
necessary.
Brief title and appropriete description of project.
For notifiCJlltion of intent, continue In remarks sec-
tion if necessary to convey proper description.
Mostly self-explanatory. "City" includes town, town-
ship or other municipality.
Check the type(s) of assistance requested. The
definitions of the terms a",:
^- &slc Grant. An original request for Federal
funds. This would not include any contribution
provided under a supplemental grant.
B. Supplemental Grant. A request to increase a
basic grant in certain cases where the eligible
appl1cant cannot supply the required matching
-"are of the basic Federal program (e.g., grants
awart/ed by the f4>palachian Regional Commis-
sion to provide the applicant 8 matching share).
C. loan. Self explanatory.
148.
14b.
u.m
10.
D. lftS(Jrance_ Seff explanatory.
E. Other. Explain on remarks page.
GoYemment:aI' unit where ltignlflcant IInd meaning-
ful impact could be observed. list only largest unit
or units a1tected, such as State, county, or city. If
anti"' unit!ltfected, list It rather than subunits.
Estimated number of ptlf'SOOS directly benefiting
from proJect.
Use appropriate rode letter. Definitions ere:
^- New. A submittal for the first time for a new
project.
11.
12.
13.
B. Renewal. An extension for an additional funding/
budget period for a project having no projected
completion date, but for which Federal support
must be I1lfMlWlld each year.
C. Revision. A modification to project neture or
scope which may result in funding change (in.
crease or decrt!l8se).
D. Continuation. An mrtenslon for an additional
fundlng/budBM period for a pro~ the agency
initially agreed to fund for a definite number of
)'tlI2B.
E. Augmentation. A l1lquirement for addition!!1
funds for a project previously awart/ed funds in
the seme funding/budget period. Project nature
and scope unchanged.
Amount requested or to be coritributed during ,the
fim funding/budgllt period by each contributr>r.
Value of in-kind contributions Will be Included. II
the action is a change in dollar amount of an exist-
ing grant (a revision or augmentation), Indicate
only the amount of the change. For decreases en-
close the amount in parentheses. If both basic and
suppJemental amounts are included, breakout in
remarks. For multiple program funding, use totals
and show program breokouts in remarks. Item defi.
nitions: 1311, amount requested ,from Federal Gov.
ernment; 13b, amount applicant will contribute;
13c, amount from State, if applicant is not a State;
13d, amount from local government. if applicant is
not a local government; 13e, amount from any other
sources, explain in remarks.
15.
Setf explanatory.
The district(s} where most of actual work will be
accomplished. If city-wide or SbIte-wide, covering
several districts, write "city-wide" or "State.wide."
Complete only for revisions [Item 12c), or augmen-
tations (item 12e).
STAND.\RD FORM 424 PAGE 3 (10-75)
Office of Management and ~Udget Circular A-110 (7/30/76)
Item
16.
Approximate date project expected to begin (usually
associated with estimated date of avallabllity of
funding).
Estimated number of months to complete project
after Federal funds alll available.
Estimated date preapplication/applicatlon will be
submitted to Federal agency If this project requires
clearinghouse review. If review not required, this
date would usually be same as date in Item 2b.
I
A-110:19
Item
19.
Existing Federal Identlflcatlon number If this Is not
a new request and directly relates to a plllvlous
Federal action. Otherwise write "NA".
Indicate Federal egency to which this request Is
addressed. Street addlllss not required, but do use
ZIP.
17.
18.
20.
21.
Check appropriate box as to whether Section IV of
form contains Illmarks and/or additional Illmarks
are attached.
APPLICANT PROCEDURES FOR SECTION II
Ust clearinghouses to whIch submitted and show
In appropriate blocks the status of their Illsponses.
For molll than three clearinghouses, continue In
Illmarks section. All written comments submitted
by or through clcarlnghouses must be attached.
Name and title of authorized representative of legal
applicant.
Applicants will always complete Items 23a, 23b, and 23c. If clearinghouse review Is required, Item 22b must be fully com.
p1eted. An explanation follows for each item:
Item
23b.
Self explanatory.
23c.
Self explanatory.
Item
22b.
238.
Note:
Applicant completes only Sections I and II. Section
III is completed by Federal agencies.
FEDERAL AGENCY PROCEDURES FOR SECTION III
Executive department or Independent agency having
program admlnistlll~lon IllSponslbility.
Self explanatory.
Primary organizational unit below department level
having direct proglllm management responsibility.
Office directly monitoring the program.
Use to Identify non.award actions whelll Fed e III I
grant identifier in item 30 Is not applicabla or will
not suffice.
Complete address of administering office shown In
Item 26.
Use to identify award actions where different from
Federal application identifier In item 28.
Self explanetory. Use remarks section to amplify
where appropriete.
Amount to be contributed during the fi~t funding/
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 grant (a revi.
sion or augmentation), indicate only the amount of
change. For decreases, enclose the amount in pa.
rentheses. If both basic and supplemental amounts
are included, breakout in Illmarks. For multiple pro.
gram funding, use totals and show program break.
outs in remarks. Item definitions: 32a, amount
awarded by Federal Government; 32b, amount ap-
plicant will contribute; 32c, amount from State, if
applicant is not a State; 32d, amount from local
government' if applicant is not a local government;
32e. amount from any other sources, explain in
remarks.
Dete action was taken on this request.
Date funds will become available.
If eppUcant-supplied Information In Sections I end II needs no updating or adjustment to flt the flnal Federal action, the
Fedellll agency will complete Section III only. An explanetlolt for each Item follows:
Item
35.
Name and telephone no. of agency person who can
provide mOIll information regarding this asslstance.
Date efter which funds will no longer be available.
Check approprlete box es to whether Section IV of
form contains Federal remerks and/or attachment
of additional remarks.
For use with A-95 ection notices only. Name and
telephone of person who can assure that appropri-
ate A-95 action has been taken-If same as person
shown in Item 35, write "same". If not applicable,
write "NA".
Item
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
36.
37.
38.
Federal Agency Procedures-special considerations
.
A. Treasury Circular 1082 compliance. Federal age'hcy will
assure proper completion of Sections I and III. If Sectioh I
is being completed by Federal agency, all applicable items
must be filled in. Addresses of State Information Recep-
tion Agencies (SCIRA's) are provided by Treasury Depart-
ment to each agency. This form replaces SF 240, which
will no longer be used.
S. OMS Circular A-95 compliance. Federal agency will as.
sure proper completion of Sections I; II, and III. This form
is required for notifying all reviewing clearinghouses of
major actions on all programs reviewed under A-95.
Addresses of State and areawide clearinghouses are pro.
vided by OM B to each agency. Substantive diffelllnces
between applicant's reqllest and/or clearinghouse recom.
mendations, and the project as finally awarded will be
explained in A-95 notifications to clearinghouses.
C. Special note. In most, but not all States, the A-95 State
clearinghouse and the (TC 1082) SCIRA are the same
office. In such cases, the A-95 award notice to the StaM
clearinghouse will fulfill the TC 1082 aWllrd notice reo
quirement to the State SCIRA. Duplicate notification
should be avoided.
STANDARD FORM 424 PAGE 4 (10-75)
'0' GPO: t~75 0 ~ 210-456 (J4.11
Office of Management and BU1get Circular A-110 (7/30/76)
ArrACHMENT N,--CIRCULAa No, A-1I0
PROPERTY MANAGEMENT STANDARDS
L This attachment prescribes uniform
standards governing management of prop-
erty furnlshed by the Federal Government or
whose C06t was charged to a project sup-
ported by a Federal gra.nt or other 'agreement,
Federal sponsoring agencies shall require re-
cipients to observe these standards under
grants and other agreements and shall not
lmpose additional requirements unless spe-
cifically required by Federal law. The recipi-
ent may use Its own property manl'gement
standards and procedures provided It observes
the proVisions of this attachment, This at-
tachment also appl1es to subreclplents as
referred to In paragraph 5 of the basic cir-
cular.
2, The following definitions apply for the
purpose of this attachment:
a, Real propcrty,---meal property means
land, Including land Improvemen\.6, struc-
tures and appurtenances thereto, but ex-
cluding movable machinery and equipment,
b. Personal property,-Personal property
of any kind except real property. It may be
tangible-having physical existence, or Intan-
gible-having no physical existence, such as
patents, Inventions and copyrights.
c. Nonexpendable personal property,-Non-
expendable personal property means tangible
personal property having a useful life of
more than one year and an acquisition cost
of $300 or more per unit exempt that reclp-
len\.6 subject to Cost Accounting Standards
Board regulations mny use the CASD stand-
ard of f.500 per unit and useful life of two
yenrs, A recipient may use Its own definition
of nonexpendable personal property provided
that the definition would at least Include all
tangible personal property as defined above.
d. Expend.able personal property,-Expend-
able personal property refers to all tangible
personal property other than nonexpendable
property.
e. Excess property.-Excess property means
property under the control of any Federal
agency that, as determined by the head
thereof, Is no longer required for Its needs
or the discharge of Its responsibilities.
f. Acquisition cost of purchased. noncx-
pendable personal property.-Acqulsltlon cost
of an Item of purchased nonexpendable per-
sonal property means the net Invoice unit
price of the property Including the coot of
modifications, attachments. accessories, or
auxUlary apparatus neccssary to make the
property usable for the purpose for which It
was acquired, Other charges such as the cost
of Installation, transportation, taxes, duty
or protective In-transit Insurance, shall be
Included.or excluded from the unit acquIsi-
tIon cost In accordance with the reclplent.s
regular accounting practices,
g, Exempt propertY,-Exempt property
means tangible person'al property acquIred In
whole or In 'part with Federal funds. and
title to which is vested In the recipient with-
out further obllgatlon to the Federal Govern-
ment except as provided In subparagraph 6a
below, Such unconditIonal vesting of title
wUI be pursuant to any Federal legislation
that provides the Federal sponsorlnl; agency
wi th lU1equn.te authorIty.
3, Real property,-Each Federal spor-sorlng
agency shall prescrIbe requirements for re-
cipients concerning the use and dlspo,ltlon
of real property acquired partly or whoUy
under grants or other agreements. Unless
otherwise provided by statute, such require-
ments, as a minimum. shall c-ontain the
following:
a, Title to real property shall vest In the
recipIent subject to the condition that the
recipient shall use the real property tor the
authorized purpose of the proJect.'as long as
It Is needed,
b. The redplent shaU obtain approval by
the Federal sponsorIng agency for the use of
real property In other projects when the re-
cIpient determines that the property Is no
longer needed for the purpose of the orIginal
project, Use In other projects shall be llmlted
to th""" under other federally sponsored proJ-
ects (I.e,. grants or other agreement..~) or pro-
grams that have pllrposes consistent with
those authorl7,cd for sllpport by the Federal
sponsoring agency.
c, When the real property Is no longer
needed as provided In a and b above, the
recIpient shall request disposition Instruc-
tions from the Federal sponsoring agency or
Its ~uccessor Federal sponsoring agency. The
Fedcral spon50rlng agency 6hall observe the
following rule6 In the disposition Instruc-
tlons:
(I) The recipient may be permitted to re-
tain title after tt compensat.es the Federal
Government In an amount computed by ap-
plyIng the Federal percentage of participa-
tion In the cost of the orlbotnal project to the
faIr market value of the property.
(2) The recIpient may be directed to seU
the property under guidelines provided by
the Federal sponsoring agency and pay the
Fe:!eral Government an amount computed
by applyIng the Federal percentage of par-
ticipation In the cost of the orIgInal project
to the proceeds from 6I\le (after deducting
actual and reasonable selling and fix-up ex-
penscs, If any, from the sales proceeds).
When the recIpient Is authorh.,cd or required
to sell the property, proper sales proced ures
shall be established th..t provide for competi-
tion to the extent practicable and result In
the highest possible return.
(3) The recipient may be directed to trans-
fer ti tie to the property to the Federal Gov-
ernment provIded that In such Cl\.SC8 the
recipient shall be entitled to compensation
computed by applying the reclplent.s per-
centage of participation In the cost of the
program or project to the current fair market
value of the property.
4. Federaly-owrn:d norn:xpendablc persoTUlI
property,-Tltle to federally-owned property
remains vested In the Federal Government.
RecipIents sha.lI submIt annuaUy an tnven-
tory listing of federally-owned property In
their custody to the Federal spom.orlng
agency. Upon completion of the agreement
or when the property Is no longer needed,
the recipient shall report the property to
the Federal sponsorIng agency for further
agency utlIlzntlon.
If the Federal sponsoring agency has no
further need for the property, It shall be
declared excess and reported to the General
Services Admlnlstrtlon. Appropriate disposi-
tion Instructions wlll be Issued to the re-
cipient after completion of the Federal
agency revIew.
5, Exempt property.-When statutory au-
thority eXists, (e.g., P.L. 85-934, 42 U.s,C.
1892) title to nonexpendable personal prop-
erty acquired with project funds. shaU be
veste:! In the recipient upon acquisition un-
less It Is determined that to do so Is not In
furtherance of the objectives of the Federal
sponsoring agency. When title Is vested In
the recipient. the r..olplent shall have no
other obligation or accountablllty to the
Federal Government for Its use or dIsposi-
tIon except as provided In 6a below.
6. Other norn:xpendable property.-When
other nonexpendable tangible personal prop-
erty Is acquired by a recIpient wIth project
fllnds. title shall not be takcn by the Fe:!-
..ral Qo"..rnm..nt but shall "est In th.. re-
cipient subject to the following conditions:
a, Right to transfer title.-For Items of
noncxpendable personal property having a
unit acquIsition cost of $1.000 or more, the
Federal sponsoring agency may reserve the
rIght to transfer the title to the Federal
I
A-110:20
Government or to a third party named by
the J"eder..l Government when such third
party Is otherwIse eligible under existing
statutes, Such reservation shall be subject to
the following standards:
(I) The property shall be appropriately
Identified In the grant or other agreement
or othcrwlse made known to the recipient
In wr\ tlng.
(2) The Federal Eponsorlng agency shall
Issue dIsposition IrLstructlons within 120 cal-
endar days after the end of the Federal Sllp-
port of the project for which It Was acquired,
If the Federal sponsoring agency falls to 165l1e
dlsJlO"ltlon Instructions wIthin the 120 cal-
endar day period. the recipient shall apply
the standards of subparagraphs 6b and 6c
as appropriate.
(3) When the !,'ederal sponoorlng agency
excrclses Its rlgh t to ta.ke title, the personal
property shall be subject to the provisIons
for federally-owned nonexpendable property
dl""us';ed In paragraph 4, above.
(4) Whep title Is transferrcd either to the
Federal Oovenlment or to a third party the
provisions of subparagraph 60(2) (b) should
be followed.
b. U..e of other tangible nonexpendable
property for which the recipient ha.o title.
(I) The recipient shaH use the property
In the project or progrlUll for which It was
acquired as 'long BS needed. whether or not
the project or program eontlnuco; to be sup-
ported by J"ederal funds. When no longer
necded for the original proJect or program.
the recIpient shall use the property In con-
nection with Its other federally sponllOred
nctlvltles, In the followIng order of prIority:
(a) Activities. In the foHowlng order of
priority:
(b) Activities sponsored by othcr Federal
agencies.
(2) Shared use,-Durlng the time that
nonexempt nonexpendable personal proper-
ty Is held for use on the project or program
for which It was acquired, the recipient
shall make It avalIable for use on other proJ-
ects or programs If such other use wlll not
Interfere wIth the work on the project or
prografn for which the property W1\S origi-
nally acquired. First preference for such
other use shaH be given to other projects or
prolt"'ffiS sponsored hy .the Federal agency
that nnanced the property; second prefer-
ence shaH be given to projects or programs
sponsored by other Federal agencIes. It the
property Is owned by the Federal Govern-
ment. use on other activities not sponsored
by the Fedeml Government shall be per-
missible If authorl7.ed by the Feden,1 agency.
User charges should be consIdered 11 appro-
prIate.
c, Di.!po.rition of other nonexpend~ble
property.-When the recipient no longer
needs the property as provided In 6b above.
the property may be usod for other actl';I-
ties In accordance with the following stand-
ards:
(I) None:rpcndable property Icith a unit
acquL.ition cost of less than 11,OOO,-The re-
cipient may use the property for other actlvl-
ties without reimbursement to the Federal
Government or sell the property and re-
tain the proceeds.
(2) None:rpcndable personal propcrty with
a unit acquisition cost of 11,000 or more,-
The recipient may retain the property for
other uses provided that compcnsatlon Is
made to the original Federal sponsoring
ngcncy or Its successor. The amount of com-
pcnsatlon shall be computed by applying
the percent....ge of Federnl pMtlclp"llon In
the cost of the original project or program to
lhe currcnt fair market value of the property,
It the recipient hIlS no need for the property
and the property has further use val ue. the
recipient shall request dispositIOn Instruc-
tions from the orlgl no.l sponsorl ng agency,
< <
Office of Management and tudget Circular A-110 (7130/76)
The l"e<Ie",1 sponsoring agency shall deter-
mine whether the property can be used to
meet the agency's requirements. If no re-
quirement exists within that agency. the
availability of the property shall be report-
ed to th.. General Services Administration
by the Federalagen"y to determine whether"
requirement for the property exlst.~ In other
Federal agencies. The Ft'dt'ral sponsoring
agency shall Issue In..tructlons to the recipi-
ent no later than 120 days after the reclpl-
ent's request and the following procedures
shall govern:
(a) If so Instructed or If dlsposltlon In-
structions are not Issued within 120 c..len-
dar days arter the reclplent's request. the
recipient shall sell the property and reim-
burse the Federal "pOnSorlng agency nn
amount computed by ..pplylng to the s..les
proceeds the percentage of Federal partlcl-
patlon In the cost of the original project or
program. However, the recipient shall be
permItted to deduct and retain from the Fed-
eral share f100 or ten percent of the pro-
ceeds. whlch"ver Is greater. for the reclplent's
selling and handling expenses.
(b) If the recipient l. Instructed to ship
the property elsewhere, the recipient shall
be reimbursed by the benefitlng Federal
agency with an amount which Is computed
by applYing the percentage of the reclplent.s
partlclpatlon In the cost of the origInal gmnt
project or program to the current faIr m..rket
value of the property, plus any reasonable
shIpping or Interim stornge costs Incured.
(c) If the recipient Is Instructed to other-
wIse dlspose of the property, the recipient
shall be reimbursed by the Federal sponsor-
Ing agency for ouch costs Incurred In Its
dlsposl tlon.
d. Property management 3tandard3 for
nonexpendable property.-The teclplent.s
property man..gement standards for nonex-
pendable personal property shall Include the
following procedural requirements:
(1) Property records shall be maintained
accurately and shall Include:
(a) A description of the property.
(b) Manufacturer's serlnl number, model
number, Federal stock number, national
stock number, or other Identification num-
ber.
(c) Source of the property, Including
gr..nt or other agreement number.
(d) Whether title vests In the recipient or
the Federal Govc:.rnmen t.
'(e) Acquisition date (or d..te received, If
the property was furnIshed by the Feder..l
Government) and cost.
(f) Percentage (at the end of the budget
year) of Federal partlclpatlon In the cost of
the project or progrl\m for which the prop-
erty was ..cqulred. (Not applicable to prop-
erty furnished by 'he Federal Government.)
(g) Location, use and condItion of the
property and the dat.. the Information was
report&<!.
(h) Unit acquisition cost.
(I) Ultimate disposItion data, Including
d..te of disposal ..nd sales prlc.. or the method
u.ed to determine current fair market value
where a reclpl..nt compen.ates the Federal
sponsoring agency for Its sh..re.
(2) Property owned by the Feder..l Gov-
ernment muo't be marked to Indicate Fed-
er..l ownership.
(3) A physlc..l Inventory of property sh..ll
be taken and the results reconcll..d ..Ith the
property records ..t least once every two
years. Any dllferenc06 betw~en qu..ntltles de-
termined by the physIcal Inspection and
thqse .hown In the accounting records shall
be Investlgl\ted to determine the causes of
the dllference. The recipient shall. In connec-
tion wIth the Inventory. verity the existence,
current utilization, and continued need for
tho property.
(-l) A control system 8h,,1l be In e!Tect to
Insure ..dequILte safeguards to prevent 10Sll.
d..magc, or theft of the property. Any 10",
damage. or theft of nonexpendable property
shall be Investigated and fully documented;
If the property was owned by the Teder..1
Government, the recipient shall promptly no-
tify the Federal sponsoring agency.
(5) Adequl\tely ml\lntenance procedures
shall be Implemented to keep the property
In good condition.
(6) Where the recipient Is authorized or
requIred to sell the property, proper sales
procedures shall be established which would
provide for competition to the extent practi-
cable and resu~ In the highest possible re-
turn.
7. Expendable personal property.-Tltle to
expendable personal property shall vest In
the recipient upon acquisition. If ther.. Is a
resIdual Inventory of such property exceeding
$1.000 In tot"l aggregate fair market value.
upon termination or completion of the grant
or other agreement, and the property Is not
needed for any other federl\lly sponsored
project or program, the recipient shall retain
thc property for ""10 on non federally spon-
sored ..ctlvltles. or sell It, but must In either
case, compensate the Federal Government
for Its ahf\re. The amount of compens..tlon
shall be computed In the same manner as
nonexpendable personal property.
8. Intangible property.
a. Invention! and patent3.-It any program
produces patentable Itern.., patent rlgh'-'<,
proce""es, or Inventions, In the course oC
work sponsored by the Federal Government.
.uch fact shall be promptly and fully report-
ed to the Federal sponsoring agency. Unle""
there Is a prior I\grcement bet",'een the re-
cipient and the Federal sponsoring agency
on dlspo.ltlon or such Items. the Federal
sponsoring agency shall determine whether
protection on the Invention or dL.covery sl1l\1I
be BOught. The Federal sponsoring agency
will also determine how the rights In the In-
vention or discovery-Including rights under
..ny patent l'lSUed thereon_hall be allocated
and ..dmlnlstered In order to protect the pub-
lic Interest consIstent with "Oovernment
Patent Policy" (President's Memor..ndum
for Heada of Executive Departments and
Agencies, August 23, 1971, and statement of
Government Patent Policy 85 printed In 36
F.R. 16889).
b. Copyright!.-Except as ()therw"'e pro-
vided In the terms and conditions of the
agreement, the author or the recipIent organ-
Ization Is free to copyright ..ny books, pub-
lications, or other copyrIghtable ml\t.rhus
developed In the cours.. of Or under.. Fed-
eral agreement, but the Feder..l sponsoring
agency shall reserve .. royalty-free, nonex-
clusive and Irrevocl\ble right to reproduce,
publish, or otherwise use, and to authorl"e
others to use, the work for Government pur-
p05es.
ATTAcH.n:NT O.-CncuLA" No. 1.-110
raOCURWNJ:NT STANDARDS
1. ThIs attachment provides stand..rds for
use by recipients In establl!5hlni procedures
for the procurement of supplies, equipment,
construction and other servlCtte with Teder"l
funds. The... standards are furnished to en-
.ure that such materials and services are ob-
talnod In an effective ml\nner and In com-
pll..nce with the provIsions or ..ppllcable Fed-
er..l 1.... ..nd executive orders. No additional
procurement standards or requirements .hall
be Impo.ed by the Tederal sponsoring ..gen-
cles upon recipients unless speclncally re-
quired by Federal statute Or executive orders.
2. The standards c.ontalned In this I\ttach-
ment do not relieve the recipient of the con-
tractu..l responsibilities arising under Its
contracta. The recipient Is the responsible ..u-
thorlty, without recourse to the Federal spon-
soring agency regf\rdlng the settlement ..nd
satlsflLCtlon or all oontrlLCtual and ..dmlnls-
I
A-110:21
tratlve I..uee arhlng out of procurements
entered Into, In support of " gr..nt or other
I\greement. This Inchadu dispute.. cll\lms,
protests of. ......ard. .o'\tree oVl\luatlon or other
matters of .. contractu..l natur... Matters con-
cerning violation of law I\re to be referred to
s\lch local, State or Federal ..uthorlty /1& may
have prop..r !urllodktk>n.
3. Recipients may'.... their own procure-
ment policies and procedur.... However. all r"-
clplents shall adhere to the standards .et
forth In paragrl\phs ~ ..nd -l.
a. The recipient shall mf\lntaln a code or
standard~ or conduct that .hall govern the
performance of Ita otIlcero, emploYNls or
agents engaged In the ..warding and admln-
Istrntlon of eontr..ct.5 u.lng Federal funds.
No employee. omeer or agent shall participate
In the .electlon, I\Wl\rd or I\dmlnlstratlon of
a contract In whIch Federal funds are used,
where. to his knowledge. he or hI. Immediate
family. pl\rtnera. or orgl\nlzl\tlon In which he
or his Immedh,te ramlly or partner h.... a
nnanflal Interest or wIth whom he I.. nego-
tiating or haa f\ny Rrrangement conccrnlng
proopectlve employment. Tho recipients' of-
ncen. employ..e. or agents sh81lnelther solic-
It nor "oooflt gratultte., favors or ..nythlng
of monetl\rY value from contractors or poten-
tl..1 contractors. ~uch standl\rds shall provide
for disciplinary actions to be I\ppJled for vio-
lations or such otandards by the recipients'
omcers. employees or agents.
b. All procurement transactions shall be
conducted In .. mBnn.,. k> provide. to the
.maxlmum extent practIcal, open Bnd free
comp..tltlon. The recipient should be Blert
to orgf\nlzatlonll.l con/Ttcts oC Interest or non-
competl the prBCtlce8 among oon trnctom
that may restrict Of' ..lImlnl\te competition
or ovtlerwlM restr,"" trade. In order to en-
sure objective contra.ctor performance ..nd
ellmln..te unfl\Jr competitive advBnt.l\ge, con-
trncbors that develop or olrllJ't speclftcatJoIUl,
requirements, 9tatemenbs of work, Invlta-
tlOIll5 ror bids and/or requests for pl"OpOtRals
should be excluded from competing for such
procurement;,. AWI\rda IIhe.1.l be made to the
blddeT /orreror whose bld/orr... to respons.lve
to bhe .ollcltatAon and k mo6t a<IV&nt.l\gC0U8
to tM T<eclp'\ent, price and other fncbors con-
sldeN>d. Sollcltatlo... o.h6l1 clearly set tort'll
..U requJrements that th.. bldder/olferor must
fulnll In ordeT for h'" bkI/olfer to be e",lu-
..ted by the recipient. Any and all bld.3/orrers
ITU\Y be reJeo~ when It Is In the reolp1ent's
In !.erest to 00 80.
c. All recipient;, lIlhaU esl6bllsh procure-
ment prOC<!Oures th&t provld, for, at a mJn-
Imum. the following p1"C>CoeduraJ"requlrernents.
(I) Proposed procuNlOlen t actions shall
follo.... a proceduro to ......ure tho ..voldl\nce
of purchasing unneceeaary or duplicative
It.lllJI. Where &ppropr\6.k. ..n "nalye'" .hall
b.. mAde of Ie....... and purc.he....... ..lteTnnt1v....
to determIne wh~h wouJd be the moet
economJcal, pr..ctlce.l pr~ment,
(2) SollcltJ&tlons for g<XJo<le and services
.hall be 'be.sed upon a clear ..nd accurate
doacrlptlon of tlhe tecihnical requJrementll
lcr \he mal<tt<'lal, produ<:t or se-rvlce to be
procured. Such a dellCl'{''Pt.Ion sh...H not. In
competltlv.. pTO<lurementa. contain f......tur"
which unduly restrict com.petltlon. "Brand
na.me or equal" descrlptlon.s me.y be used
&8 a mel\ns to denne the perlormance or
other ....1I....t requlr"",..nta of a procurem..nt,
and when 80 uM<! the specIfic features of the
n..med brand ....hk.h must be met by bldd..s/
on:er~rs ..haJI be clearly spoc.lne<:l,
(31 Po.ltlve e!forts oh..1I be lTU\de by the
reclplent3 to utilize smf\lI buslneM aDd mJ-
norlty-owned buslneas sources of supolles
and services. Such efforts should ..llow the""
sources the m..xlmum fe...lble opportunity
to cOl'I\pe~ for contract. utll\.r;lng Federal
funde.
(-ll The type of pl'Qeurln.g lJUtrumenm
used. e.g., IIxed price con tra.c ts , ooet rem.-
Office of Management and B1get Circular A-110 (7/30/76)
bursa.ble contracts, purchase orders, Incen-
tive contracts, shall be determined by the
recipient but must be approprla.te for the
partloular procurement and for promoting
the best Interest of the program Involved.
The "cost-plu.;-a-percentage-of-cost" meth-
od of contracting shall not be useO.
(5) Cuntracts shnl be rruuie only with re-
sponsible contractors who p<l55C66 the po-
ten tlonal ability to perform succc.;l;fully
under the terms "nd conditions of a pro-
posed procurement. Consideration shall be
given to such matter/; as contractor IntegTlty,
reoord of pl\St performance, finnnclal and
t.echnlonl resources or 8.CCcs.>1blllty to other
neceSSArY resources.
(6) All proposcd sole source con tract.. or
where only one bid or Pl'()posal Is received
In whloh the aggregnte eltpendlture Is cx-
pected t.o excee<l f.5,OOO shnll be subJect to
prior approval nt the dlscretl'ln of the Fed-
eral sponsorlnt; '4lency.
(7) Some form of price or coot anal}"sls
should be made In conncctlon with every
procurement a.ctlon. Price annlysls may be
8.CCompllshed In various wny... Including the
compa.rl<'oOn of price quolnllons submitted,
market prices and similar Indicia, together
with d1scounts. C<J<;t analysis Is the revIew
and evaluation of each element of co".-t, to
detennJne rensonableneGS, allocability and
allowabUlty.
(8) Procurement records a.nd files for pur-
cho.s.es In excess of '10,000 &hall Include the
follov.llng:
(a) B85ls for contractor selection;
(b) Justlllca.tlon for lack of competltlon
when competitive bids or offers are not
otll.alncd;
(c) Basis for award C06t or price.
(9) A system for contract admlnlstmtlon
shall be mn.lntalned to ensure contrnctor
conformance with terms, conditions and
speclficl\tlons of the contract, and to ensure
adeqU'a.tA; and timely followup of all pur-
chases.
4. T.he recLplent shall Include, In addition
to provllSlons to define a sound .and complete
'agreement, the following prov1slol16 In all
contracts. These provisions shall also be ap:
piled to subcontracts.
a. Contracts In excess of $10,000 shall con-
tain contractual provtslons or condltlons
that wHl allow for ndnllnlstrat.lve, contra.c-
l7ual or legal romedlet5 In lnstances In which
contl'lUOtors vIolate or breach contract tenns
and provide for such remedial actions ...;
may be appropriate.
b. All contracts In excess of $10,000 shall
conllllln suitable proVisions for tennlna.tlon
by the recipient Including the manner by
which termination will be effect.ed and the
basts for settIement. In addition. suoh con-
tra.cts shall describe conditions under which
the contract may be tennlnated for default
a.; weU as conditions where the contrl\Ct may
be terminated beca.use of olT(:\Uust.ances be-
yond the control of the contractor.
c. In all contracts for construction or fa-
clUty Improvement awarded for more than
$100,000, recipients shall observe the bond-
Ing requIrements proVlded In Attac.lunent B
to t.hls circular.
d. All contre.ct.s awarded by recLplents and
th..lr contra.ctors or subgn\llt.eet5 having a
value of more than $10,000. shall cont...ln a
provision requlrlng compliance v.1th Execu-
tive Order 11246, entitled "Equal Employ-
ment Opportunity," as amend..d by Executive
Order 11375, and as supplemented In Depart-
ment of Labor regulations (-U CFR, Part 60).
e. All contrncts and suhgmnt.s In cxces.' of
$2,000 for construction or repair awarded by
reclpicnt.. and subreclplen,Ls shall Includc a
provision for complll\nce wi th the Copeland
"Anti-Kick Back" Act (18 U.S.C. 874) as
supplcmented In Department of Labor
regulations (29 CFR, Pnrt 3). ThIs Act pro-
vides that each contractor or subgrnlltee
shall be prohibited from InducIng. by any
means. any person employcd In the cOlL.truc-
tlon, completlon, or repair of public work. to
give up any part of the compensation to
which he Is otherwise entitled. The recipient
shl\ll report all suspected or reported viola-
tions to the Federal sponsoring agency.
f. When required by the Federal program
legislation, all construction contracts
awarded by the recipient.. and subreclplents
of more than $2,000 shall Include a provision
for compliance with the Davis-Bacon Act (40
U.S.C. 276a to a-7) and as supplemel1Jtcd by
nepartment or Labor regulations (29 crn,
Part 5). Under thIs Act contractors shall be
required to pay wages to Il\borers and me-
chanics at a rate not less than the minimum
wages specified In a wage determination made
by ,the Secretary of Labor. In addItion, con-
tractors shall be required to pay wages not
less than once " week.. TIle recipient shall
place a copy of the current prevailing wnge
determination Issued by the Department of
Lnbor In each solicitation and the award
or a contract shall be condItioned upon the
acceptance of the wage determination. The
reclplcnt shall report all suspected or re-
ported violations to the Federal sponsoring
agency.
g. Where applicable, all contracts awarded
by recipients In ~xccss of $2,000 for construc-
tion contract.. and In excees of $2,500 for
other contracts that Involve the employment
of mechanics or laborers, shall Include a pro-
vIsion for compliance with sectIons 103 and
107 of the Contract Work Hours and Safety
Standl\rds Act (40 U.S.C. 327-330) lLS sup-
plemented by Departmel1Jt of Labor regula-
I
A-110:22
tlon., (29 CFR, Part 5). Under sectlon 103
of the Act, each contractor shall be re-
quired to compute the wages of evcry me-
chanic and laborer on the basis of a standard
work dl\Y of 8 hou"" and 1\ standllrd work
week of 40 hours. Work In exce.ss of the
standard workdny or workweek Is permissible
pro\'lded thRt the worker Is compen~nted at a
rate of not less than I Y:z times thc basic
rate of pay for all hours worked In excess
of 8 hours In nny calendar day or 40 hours
In the workweek. Section 107 of the Act Is
nppllcable to construction work and provides
that no laborer or mechanic shl\ll be required
to work In surroundings or under working
conditlolls which fifC unsanitary, hazardous
or danl~erous to his henl th and saf"ty as de-
lcnnlncd under con~tr\lct1on ,gafetv and
henlth fitandards pnHllu1gRted by the'Secre-
tary of Labor. 'Illese requlremellts do ~lOt
apply to the purchl\scs of supplies or matc-
rinls or articles ordinarily nvnl1nble on the
open Innrkct, or contrnc;ls for trl\n~portn.tlon
or transml;;slon of Int.rlllb"Cnce.
h. Contract.s or afl'recmcnLs, t.hc prlllclpal
purpose or. which Is to create, devclop or 110-
ilfOVC product...c,;. processes or 111cl.hods; or for
exploration Int.o fields that dlrcctly concern
public health, snfety or wclfnre; or contrncts
In the field of science or technology in which
thcre has been little significant experience
oulslde of work funded by Federal 1L<;slst-
ance, shnll contl\ln a notice to the effect ,that
mntt.c"" rcgardlng right.. to Inventions and
materials generated under the contract or
ngreement are SUbJect to the regulntlons Is-
sued by the Federal spollsorlng agency and
the recipient. The contractor shall be ad-
vised as to the source of nddltlonal Informa-
tion reGardIng these Illnt.tcrs.
I. All nct;otlated contraots (except t.hose
of "0,000 or less) nwarded by recipients
shall Include a provision to the e!!ect that
the recipient, the Federal spon..ortng agency,
the Comptroller Ocncral or the United States,
or any of their dnly nut.horI7.ed representa-
tives. shall have access to any books. docu-
ments, pnpers and records of the contractor
which are directly pertinent to a specific pro-
gram for the purpose of making audits.
eXl\mlnatlollS, exCt'rpt.. and transcriptions.
J. Contracts and subR'rant.. of amounts In
excess of $100.000 shaH contain a provision
that requires the recipient to agree to com-
ply with aH applicable standards. orders or
rcgulatlons Issued pursuant to the Clear AIr
Act of 1970 (42 U.S.C. 1857 et seQ.) and the
Federal W"'ter Pollution Conlrol Act (33
U.S.C. 1251 et seq.) lLS amended. Violations
shall be reported to the Federal .5wnsorlng
n~ency and the Regional Office of the En-
\'lronment1l1 Protection Agency. -
IFR Doc.76-21904 Filed 7-29-76;8:45 am)
, ,
I
I
ERVIN'S ALL AMERICAN YOUTH CLUB, INC.
APPENDIX H
OMB
Circular A-122
Otfice of Management and IUd get Circ~lar A-122 (6/27/80)
OFf"CE OF MAHAGEMENT AND
BUDGET
Orcular A-:122, "Cost Principles for
Nonprofit Organizations"
AGENCY: Office of Management and
Budget.
ACTION: Final Policy.
June 27, 1960
To The Heads of Executive
Departmer:ts and Establishments
Subject: Cost principles for nonprofit
organizations:
1. Purpose, This Circular establi:;hes
principles for determining cosls of
grants, conlra:;ls and other agfl!ements
with nonprofit organizations, It does not
apply to colleges ap.d universities which
are covered by Circular A-2't Stnte,
local, l.\lId federally recognized Indian
tribal governments which are covered
by Circular 74--4; 01' hospitals. The
principles are designed to provide that
the Federal Government bear its fair
sh:lre of costs except where rcstrit:led or
prohibited by law, The principles do not
attempt to prescribe~the extent of cost
sharir:g or matching on'grants, contracts,
or other agreemccls. However, sllch cost
sharing or mntching shall nol be
accomplished th1'ough arbitrary
limitations on individual cost elemenls
by Feder31 agencies, Provision for profit
or other increment above cost is outside
the scope of this Circular.
2. S!:persession, This Circular
!:llpersedes cost principli:s \ssued by
indi vidual agencies for nonprofit
organization.
3, Applicability, a. These principles
shall be used by all Federal agencies in
determining the costs of work performed
by nonprofit organizations under grants,
cooperative agreements, cost
reimbursement contracts, and other
contracts in which costs are .used in
pricing, administration, or settlement.
All of these instruments are nereafter
referred to as awards, The principles do
not apply to awards under which an
organization is not required to account
to the Government for actual costs
incurred,
b. All cost reimbursement subawards
(subgrants, subcontracts, etc.) are
subject to those Federal cost principles
applicable to the particular organization
concerned, Thus, if a subaward is to a
nonprofit organization, this Circular
'shall apply; if a- suba ward is to a
commercial organization, the cost
principles applicable to commercial
concerns shall apply; if a subaward is to
a college or university, Circular A-21
/ihall apply; if a subaward is to a State.
local, 'or fede"allyreOd~i:r.Ald Ind.lJln.
tribal government, Circular 7~ shall
apply.
4. Definitions. a, "Nonprofit
organization" means any corporation.
trust, InIsociation, cooperative, or other
organization whi-ch (1) is operated
primarily for scfentific, educa tional,
service, charitable, or similar purposell
in the public interest; (2) is not
organized primarily for profit; and (3)
uses its net proceeds.to maintain.
Improve, and/ or expand its opera tions,
For this purpose, the term "nonprofit
organization" excludes (i) colleges and
universities; (ii) hospitals; (iii) State,
local, and federal!y recognized Indian
tribal governments; and [iv) those
nonprofit organizations which are .
excluded from coverage of this Circular
in accordance with paragraph 5 below.
b, "Prior approval" means secu~ing
the awarding agency's permission in
advance to incur cost for those items
that are designnted as requiring prior
. approval by the Circular. Generally this
permission will be in writing. Where an
item of cost requiring prior approval is
spedfied in the budget of an.a ward,
apPlOval of the budgel const'ilules
approval efthat cost.
5. Exclusion of some nonprofit
organizations. Some nonprofit
organizations, b<?cause of their size and
nature of operations, can be considered
to be similar to commercial concerns for
purpose of applicability of tost
principles, Such nonprofit organizations
shall operate under Federal cost
principles applicable to commercial
concerns, A listing of tbese
organizations is colltained.in
Attachment C. Other organizations may
be added from time to time,
6, Respofl:.ibifities. Asencie.s
responsible for administering programs
that involve awards to nonprofit
organizations sball implement the
provisions of this Circular. Upon
request. implementing instruction shall
be furnisbed to the Office of
Management and Budget. Agencies shall
designate a liaison official to serve as
the agency representative on matters
relating to the implementation of Ihis
Circular. The name and title of such
representative shall be furnished to the
Office of Management and Budget
within 30 days of the date of this
Circular.
7, Attachments, The principles and
relatedJ'Olicy guides are set forth in the
following Attachments:
Attachment A---G€neral Principles
Attachment B-Sclected Items of Cost
Attachment C-Nonprofit
Organizations Not Subject !p This
Circular
I
A-122:1
8. Requests for except.ions. Tbe OLfice
of Management and Budget may grant
exceptions to the requirements of this
Circular when permissible under
existing law, However, in the interest of
achieving maximum uniformity.
exceptions will be pennitted only in
highly unusual circumstances,
9, Effective Dale. The l1rovisions of
this Circular are effective immediately.
Implementation shall be phased in by
incorporating the provisions into new
awards made after the start of the
organization's next fiscal year. For
existing awordstbe new principles may
be applied if an organization and the
cognizant Federal agency agree. Earlier
implementation. or a delay in
implementation of individual provisions
is also permitted by mutual agreement
between .morganization and the
cognizant Federal agency,
10. Inquiries. Further information
concerning this Circular may be
obtained by contacting the Financial
Management Branch, Budget Review
Division, Office of Management and
Budget, Washington, D.C. 20503.
telephone (202) 385-4773,.
Jnnll~s T. Mclnlyre, Jr.,
Director,
[Circular No. A-122J
Attachment A
General Principles
Table of Contents
A. Dasic Considerations
1. Composition of total costs
2. Factors affecting allow ability of costs
3. Reasonable costs
4. Allocable costs
5. Applicable credits
6. Advance understandings
B. Dimct Costs
C. Indirect Costs
'\
D. Allocation of Indirect Costs and
Determination of Indirect Cost Rates
1. Genflral
2. Simplified allocation method
3. Mul1iple allocation base method
4. Direct allocation method
5. Speciat indirect cost rates
E. Negotiation and Approval of Indirect Cost
Rates
1. Definitions
2. Negotiations and approval of rates
[Circular No. A-122J
Attachment A
General Principles
A. Basic Considerations,
1, Composition of total casts, The total cost
of an award is the sum of the allowable
direct and allocable indirect cosls less any
applicable credits,
2, Factors affecting allvwabi/ity of costs.
. .
Off'ice of Management and BUdgetlirCUlar A-122 (6/27/80)
To be allowable under an aWllrd, costsnm$t
meet the following general criteria:
a. Be reRsonablefor the performance of the
award and be aUocable thereto under these
principles,
b, Gonform to any Iirnilations or exclusions
set forth in these principles or in the aWllrd
as to types or amo~t of cosUlem..,
c, Be co.i:Jsiste{lt wjth policies and
procedures that apply uniformly to both
federally financed and other activities of the
organization,
d, Be accorded consistent treatment.
e, Be delermined in acconlll.nce with
generally accepted account'ing principles.
f. Not be included as a cost or used to meet
cost sharing or matching nlquirements <IT any
other federally finartccd program in either the
current or !I prior period,
g. Be adequately docuriJented.
3. Reasonable cosJs. A cosl is rcasonuble
if, in its nature or amount, i(does not exceed
that which would be Incurfed by 8 prudent.
person under the circumstlPnr-es prevailing at
the time tbe decision wag made to incur the
costs, The question of the reasonableness.of
specific costs must be scrutinized with
particular care in connection with
organizations or separale divisions thereof
which receive the prepondcrancc,oftheir
support from awards made' by Federnl
agenCies. In delermining the reasonilbleness
of a given cosl, consideraticm shall be given
to:
a. Whether the cost is of a type generally
recognized as ordinary Bnd necessary for the
operation of the organization or the
performance of the award.
b, The restraints or requirements imposed
by such factors as generally accepted sound
business practices, arms l'en,gth bargaining,
Federal and State laws and regulations, and
terms and conditions of the award,
c. Whether the indivldnals-concerned acted
with prudence in Ihe circumstances,
considering their rllsponslbilities to the
organization, its members, employees, and
clients, the public at large, and the
Government.
d, Significarit deviations from the
establis.hed practices of the orgJnization
which may 'unjustifiably increase the award
costs,
4. A//ocable costs,
a. A cost is allocable to a particular cost
objective, Bu~h as a grant, project, service, or
other activity, in accordanca with the relative
benefits received. Acost is allocable to a
Government award if it is treated
consistently with other costs incurred for l1]e
same purpose in like' circumstances and if it;
(1) 15 incurred specifically for the award.
(2) Benefits both the award and other work
aud can be distributed in reasonable
proportion to the benefits received.
(3) Is necessary to the overall opera lion of
the organization, although a direct
rela tionship to any particular cost objective
cannot be shown.
b. Any cost allocable to a particular award
or olher cost objective under these prinr.iples
may not be shifted to other Federal awards to
overcome funding deficiencies. or to avoid
restrictions imposed by law or by the terms
of the award.
5. Applicable credits,
a. The term applicable credits refers to
those receipts, or reduction of expenditures
which operate to offset or reduce expon<'les
items that lire allocable to awards liS direct
or indirect costs. Typical examples of such
traneactions are: purchase discounts, rebates
or allowances, recoveries or indemnities on
losses, insurance refunds, and adjustments of
overpayments or erroneous charges. To the
extent that such credits accruing or received
by the organization relate to allowable cost
they shall be credited to the Government
either as a cost reduction or cash rclund as
appropriate.
b, In some instances, the amounts received
form the Federal Government to finance
organizational activities or service operations
should be treated as applicable credits.
Specifically, the concept of nelling such
credit items against related expenditures
should be applied by the organizaton in
delerming the rates or amounts to be
organization in determining the rates or
arnaounts to be charged to Federal aWllrds
for services rendered whenever the facilities
or other resources used in providing such
services have been financed directly, in
whole or in part, by Federal funds;
a(c) For rules covering program income
(i.e., gross income earned froll. federally
supported activities) see Allacbmenl D of
OMI3 Circular A-110.
6. Advance and understandings. Under allY
given'award the reneonablel1l!ss and
allocability of certain items of costs may be
dilTicult to determine. This particulnrly true in
connection with OrgizBtiO~ that receive B
preponde.ance of th~r support from Fedimd
agencies. Inorder to avoid subsequent
disallowance'or dispute based on
ul1reasomiblene&s or nonallqcability, It is
often desirable to seek a wriliaiJ agreement
with the cognizant or awarding 'a~ericy in
advance of the incurrence of special or
unusal costs, The absence of an advance
agreement on any element of cost will not, in
itself, affect the reasonableness or
allocability of that element.
B. Direct Costs
1. Direct costs Rre those thai CRn be
identified specifically with a particular final
cost objective: Le.. a particular award,
project, service. or other direct activity of an
orgfloization. However, a cost may not be
assi~ned to lin award as a direct cost if any
oiher cost incurred for the same purpose, in
like circumstance, has been allocated to an
award as an indirect cost. Gost identified
specif:cally with Awards are direct cost of the
a wards and are to be assigned directly
the.eto. Cost identified specifically with other
filial cost objectives of the organization are
direct costs of those cost objectives and are
not to be assigned to other awards directly or
inclirectly.
2. Any direct cost of a minor amount may
be treated as an indirect cost of or reasons flf
pfllcUcality where the nloconnt treatment for
such cosl is consistently applied to all final
cost objectives.
3. The cosl of certain aclivities are not
allowable llS charges to Federal awards (see.
for example. fund raising costs in paragraph
I
A-122:2
21 of Allachmenl B), However, even though
these costs are unallowable for purposes of
computing charges to Federal awards. they
nonetheless must be treated a8 direct cost for
purposes of determlninglndirect cost rates
and be allocated their shllre of the
organization'. indirect costs if tliey represent
activities which (1) include the salaries of
personnel, (2) occupy splree. and (3) beneOt
from the organization's indirect costs,
4. The costs of activities performed
primarily as a service to members, clients. or
the general public when significant and
necessary to the organization's mission mnst
be treated liS direct costs when or not
allowable and be allocated an equitahle
share of indirect costs. Some examples of
these Iypes of activities include:
/I, Maintenance of membership rolls,
subs'Griptions, publications, nnd related
functions.
b. Providing services and information to
members, legislative or administrative
bodies, or the public.
c. Promotion, lobbying, and other forms of
public relations,
d, Meetings and conferences except those
held to condnctthe general administration of
the organization.
3. Mninlenacne, protection, and investment
uf special funds not used in operntion of the
orgunizn tion.
f. Administra tion of group benefits on
behelf of memhers of clients including life
.and hospital insurance, annuity or retirement
plans, financial aid. etc,
C. Indirect Cost.
1. Indirect costs are those that have been
incurred for common or join I objectives and
cannot be reildily. identified with a particular
final cost objective. Direct cilsl of minor
amounts may be treated as indirect cosls
nnder the conditions described in paragraph
13..2. above. After direct cosls have been
determined and assigned directly 10 awards
or other work as appropriate, indirect costs
Rre those remaining to be allocated to
benefiting cost objectives. A cost mllY not he
allocated to an award as an indirect cost if
cmy other C06t incurred .for the ~nme purpose,
in like circumstances, has been assig;ed 10
an av.:ard as a direct cost. I
2. Because of the diverse characteristics
and accounting practices of nonprofit
crganizations, it is not possible to specify the
types of cost which may be classified U8
inciirect cost in all situation. However, typiclll
examples of indirect cost for many nonprofit
organizations may include depreciation or
Ilse allowance.!! on buildings and equipment,
the costs of oper,) ting and ma in ta ining
fadlities, and gcocral administration and
g('neral expenses, such as the salaries and
expenses of executive officers, personnel
administration, Bnd accounting.
D. Allocation of Indirect Cost and
Dc/ermina/ion of Indirect Cosl Rutes.
1. General
a. Where a nonprofit organization has only
une mnjur function. or whele all its major
functions benefit from its indirect cosls to
approximately the same degree, the
allocation of indirect costs and the
'. Otfic~ of Management and Budget clCUlar A-122 (6/27/80)
computation of an indirect IlOst1'llte IllJtf be
accomplished through simplified allocation.
procedures as do scribed in par81J1'aph 2
below,
b. Where an organization hao several major
functions which benefit from its indirect costs
in varying degrees, allocation of indirect
costs may require !he accumulation of ouch
costs into separate cost groupings which then
are allocated individually to benefiting
functions by means of a baoe which best
measures the rr.lative degree of benefit. The
indirect costs ..llocated to each function are
then distributed to individual awards and
othcr activities included in that dunction by
means of an indircct cost rate(s).
c. The determination of what constitutes an
organization's major functions will depend on
its purposc in being; the types of servicel it
renders to the public, its clients, and its
members; lInd the amollnt of effort It dl,votes
to slIch activitics as fundralsing. public
Information and membership activities,
d, Specific mcthods for alloca ting indircct
costs and computing indirect cost rates along
with the conditions under which each method
should be used are described in paragraphs 2
through 5 below,
e. The base period for the allocation of
indireo'\ costs is the period in which such
costs are incurred and accumulated for
allocation wo work performed in that period.
The base period normally should coincide
with the organization's fiscal year, but in any
evnt, shall be so selected as to avoid
Inequities in the allocation of the costs,
2. SimpfJfied aJ/ocotion method. .
a, Where an organization's major functions
benefit from its indirect coots to
approximately the same degre, the allocation
of indirect costs may be accomplished by (I)
separa ting the organization's total costs for
the base period as either direct or indirect,
<tnd Iii) dh'iding the total allowable indirect
cosls (net of applicable credits) by an
equitable distribution base. The result of this
process is an indirect cost rate which is used
to distribute indirect costs to individual
a wards, The rale should be expressed as Ihe
percentage which the total amount of
allowable indirect costs bears to the base
selected. This method should alos be used
where an organization has only one major
function encompassing a number of
indi vidual projects or activities. and may be
used where the level of Federal awards to an
organization is relatively small.
b. both the direct costs and lhe indirect
costs shall exclude capanl expenditures and
unallowable costs. However. unallowable
costs which repre~enll\ctivilies must be
included in the direct costs under the
conditions described in paragraph B.3. above.
c. The distribution base may be total direct
costs (excluding capital expenditures and
other distorting items, such iii major
subcontracts or S:Jbgran(8), directselaries
and wages, or other bnse which results in an
equitable distribution. The distribution base
shall generally exclude participant suport
costs as defined in paragraph 211 of
Allachment B.
d, Except where a sl'ecial rale[s] is
required in accordance with paragraph 0.5
bel~w, .the 'indirect.cmrt TA Ie~koped ftder
the above prinoiples oio&RPlicable.to BU
awards at.the OIllaniKiioR..II a special
rate(s) is requil'ed.appropriate modificatiol1ll
shall be made in order to develop !he opecial
rate(s).
3. Multiple aJ/oC<Jlion base method,
a. Where an organization's indirect costs
benefit its major functions in varying degrees.
such costs shall be Accumulated into separate
cost groupings. Each grouping shall then be
allocated individually to benefiting functions
by meano of A base which best measures the
relative benefils.
b. The groupings shall be established so 88
10 permit the allocation of each groupinll:On
the basis of benefits provided 10 the major
functions. Each groupi~ should constHute a
pool of expenses that are of like charactercin
terms of Ihe functions they henefit und in
terll18 of Ihe ulloclltinn hllH" whlt~1 h"Ht
measurs the relative benefits pro\'iJd to each
function. The number of separate groupings
should be held wHhin practical limits, taking
into considerotion the materiality of the
amounts involved and the degree of precision
desired.
c. Actual conditions must be taken into
accounl in selecting the base to be used in
allocating the expenses in each grouping to
benefiting functions. When an allocation can
be made by assignment of a cosl grouping
directly to the function benefited, the
allocation shall be made in that manner,
When the expenses in a grouping are more
general in nature, the allocation should be
made through the use of a selected base
which produces results that are equitable to
both Ihe Government and the organizalion. In
general. any cosl element or cost related'
factor associated with the organization's
work is potentially adaptable for use as an
allocation base provided 1i) it can readily be
expressed In terms of dollars or other
quantilative measures (tolal direct costs,
direcl salaries and wages, slaff hours applied,
square feet used, hours of u6age, number of
documents processed, population served, and
the like) and (ii) it is common to the
benefiting functions during the ba~(' period.
d. Except where a special indirect cost
rate(s) is required in accordance with
paragraph 0.5. below, the separate groupings
of indirect costs allocated to each major
function sholl be agregated and treated as a
common pool for thaI function. The costs in
the common pool shall then be distributed to
indivisual awars included In that function by
use of a single indirect cost rate,
e, The distribution base used in computing
tlie indirect cost rate for each function may
be total dirf!ct costs (excluding capital
c;penditures and other distorting items sllch
uS major subcontracls and subgrants), 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, AlIachment B. An indirect cost
rate should be developed fir each s~parate
indirect cost pool developed. The rate in each
case should be stated as the percentage
which the amount of the particular indirect
cost pool is of the distribution base identified
I
A-122:3
with that pool
4, IJ;rect allocation method.
a. Some nonprofit organizations, treat all
costs as direct cos.ts expect general
administration and general expenses. These
orgllnizations generlllly separate their costs
into thre basic categories: (i) General
administration and general expenses, (ii)
fund raising. and (Iii) other direct functions
(including projects performed under Federal
awards). Joinl costs, such as depreciation,
rental cosls, operation and maintenance of
facilities, telephone expenses, and the like
are prorated Indivisually as direct cost to
each category and to each award. or other
activity using a base most appropriate to the
particular cost being prorated.
b. This method is acceptable provided each
joint co.st is prorated using a base which
Ilccllrntely mell~nres the benefits provided to
I,"ch nWllrd or IIlher Ilcllvlty, 'I'h" IIl'H"H IlII1Ht
be established in accordance with resonable
crileria. and be supported by current data,
This method is compatible with the
Standards of Accounting and Financial
RepOJ"ting for Voluntary Health and Welfare
Organizations issued jointly by the National
Health Council, Inc., the National Assembly
of Voluntary Health and Social Welfare
Organizations. and the Uniled Way of
America.
c. Under this method, indirect costs consist
eclusively of general administration and
general expenses. In all other respects, the
organization's indirect cost ratess shal be
computed in the same manner as that
described in paragraph 0.2 aLove,
5: Special indirect cost rates. In some
instances, a single indirect cost ra Ie for all '
activities of an organization or for each major
function of the organization ay not be
appropriate, since it would not take inlo
account those different factors which may
substantially affect the indirect costs
applicable to a particular segment of work.
For this purpose. a particular segment of
work. For this purpose, a particular segment
of work may be tha t performed under a single
award or it may consist of work under a
group of awards performed in a common
environment. the factors may inc1ude the
physical location of the work, the level of
administrative support required, the nature of
the facilities or order resources employed, the
scientific disciplines or technical skills
involved. the organizational arrangements
used, or any combination thereof. When a
particular segment of work is performed in an
environment which appears to generate a
significantly different level of indirect costs,
provisions should be made for a separa te
indirect cost pool applicable to such work,
The separate indirect cost pool should be
developed during the course of the regular
allocation process. and the separa te indirect
cost rate resulting therefrom should be used
provided it is determined thaI (i) the rate
differs significantly from that which would
have been obtained under paragraph 0.2, 3,
and 4 above, and (ii) the volume of work to
which the rate would apply is material.
E. Negotiation and Approval of indirect Cost
Rates.
b'ffice of Management and Budget circl'ar A-122 (6/27/80)
1. Definitions, As used in this section, the
following tenns have the meanings se( forth
below:
a. "Cognizant agency" means the Federal
agency responsible for negotia ting and
approving indirect cost rates for a nonprofit
organization on behalf of 011 Federol
agencies,
b. "Predetennined role" means an indirect
cost rate. applicable to 0 specified current or
future period, usually the organization's fiscal
year, The rate Is based on an estimate of the
costs to be incurred during the period. A
predetermined rate is not subject to
adjustment.
c. "Fixed rote" means on indirect cost rate
which has the Slime characteristics as a
predetermined rate, exceplthat the difference
between the estimated cosls and the actual
costs of the period covered by the rale is
carried forward as an adjustment to the rale
computation of a subsequent period.
d. "Final rate" means an indirect cost rate
applicable to a specified past period which is
based on the actual costs of the period. A
final rate is not subject to adjustment.
e, "Provisional rate" or billing rate means a
temporary indirect cost rale applicable to a
specified period which is used for funding,
interim reimbursement, and reporting indirect
cbsts on awards pending the establishment of
o rate for the period,
f. "Indirect cost proposal" means the
documentation prepared by an organization
to substantiate its claim for the
reimbursement of indirect costs. This
proposal provides the basis for the review
and negotiation leading to the establishment
of an organization's indirect cost rate.
g. "Cost objective" means a function,
organizational subdivision, contract, grant, or
other work unit for which cosl data are
desired and for which provision is made to
accumulate ann measure the cost of
processes, projects, jobs and capitalized
projects,
2. Negotiation and opprol'al of rates,
a, Unless different arrangements are
agreed to by the agencies concerned, the
Federal agency wilh the largest dollar value
of awards with an organization will be
designa ted as the cognizant agency for the
negotia tion and approval of indirect cost
rates and, where necessarv, other rates such
as fringe benefit and computer charge-out
rates. Once an agency is assigned cognizance
for a particular nonpro'fit organization, the
assignment will not be changed unless there
is a major long-term shift in the dollar volu~
of the Federal awards to the organization. All
concerned Federal agencies shall be given the
opportunity to participate in the negotiafion
process, but after a rate has been agreed
upon it will be accepted by all Federal
agencies, When a Federal agency has reason
to believe that special operating factors
affecting its awards necessitate special
indirect cost rates in accordance with
paragraph 0.5 above, it will, prior 10 the time
the rates are negotiated, notify the cognizant
agency.
b. A nonprofit organization which has not
previously established an indirect cost rate
with a Federal agency shall after the
organization is advised that an award will be
made and, in no event, later than three
months after the effective date of the award.
c. Organizations that have previously
established indirect cost rates must submit B
new indirect cost proposal to the cognizant
agency within six months after Ihe close of
each fiscal year,
d. A predetermined rate may be negotiated
for use on awards where there is reasonable
assurance, based on pasl experience and
reliable projection of the organization's costs,
that the rate is not likely to exceed a rate
based on the organization's actual cosls.
e. Fixed rates may be negotiated where
predetermined rates are not considered
appropriate. A fixed rate, howe\'er, shall not
be negotiated if (i) all or a subslantial portion
of the organization's awards are expected to
expire before the carry-forward adjustment
can be made; (ii) the mix of Government and
non-government work at the organization is
too erratic to permit an equitable carry-
forward adjustment; or (iii) the organization's
operations nuctuate significantly from year to
year.
f. Provisional and final rates shall be
negotiated .where neither predetermined nor
fixed rates are appropriate.
g. The resulls of each negotiation shall be
formalized in a written agreement between
the cognizant agency and the nonprofit
organization, The cognizant agency shall
distribute copies of the agreement to all
concerned Federal agencies,
h. If a dispute arises in a negotiation of an
indirect cost rate between the cognizant
agency and the nonprofit OIganization, the
dispute shall be resolved in accordance with
the appeals procedures of the cognizant
agency.
i. To the extent that problems ure
encountered among the Federal agencies in
connection with the negotiation and approval
process, the Office of Management and
Budget will lead assistance as required to
resolve such problems in a timely manner.
[Circular No. A-122]
Attachment B
Selected Ilems of Cost
Table of Contents
1. Advertising costs
2. Bad debts
3. Bid ami proposal costs (reserved)
4. Bonding costs
5. Communication costs
6. Compensation for personal services
7. Contingency provisions
a. Contributions
II. Depreclatlon Bnd use allownnces
10. Donations
11. Employee morale, health and 'welfare
cosls and credits
12. Entertninment costs
13. Equipment and other capital expenditures
14. Fines and penalties
16. Fringe benefit.
1'i. Idle facilities and idle capacity
17. Independent resenrch and development
(resen'ed)
lB. Insurance and indemnification
19. Interest, fund-raising, and investment
managemE:nt costs
20. Labor relations costs
I
A-122:4
21. Losses on other awards
22. Maintenance and repair costs
23. Ma terials fVld supplies
24. Meetings. conferences
25. MemLerships, subscriptions, and
professional activity costs
26. Organization costs
27, O\'crtime. extra-pal' shirt, and multishil't
premiums
28. Page charges in professiunal journa18
29. Partidpant support costs
30. Patent costs
31. Pension plans
32. Plant security costs
33. Preaward costs
34. Professional service costs
36. Profits and looses on disposition of
depreciable property or othcr capitol
assets
3fl. Public it'iformalion sen'ice costs
37. Publication and printing costs
:io, Rearrangement and alteration costs
39. Recol1\'ersion costs
40. Recruiting costs
41. Relocation costs
42. Rental costs
43. Royalties and olher costs for Irl;e of
patents and copyrights
44. Severance pay
45. Specialized service facilities
46. Taxes
47. Termination costs
40. Training and education costs
49. Transportntion costs
50. Travel costs
[Circular No. A-l22]
Allachrnent B
Selected Items of Cost
Paragraphs 1 through 50 provide principles
to be applied in establishing the allowubility
of certllin items of cost. These princ:ipleo
apply whether a cost is treated as direct or
indirect. Failure to mention a particular item
of cost is not intended to imply thal it is
unallowable: rather determination as to
a!lowability in each case should be based on
the treatment or principles provided for
similar or related items of cosL
1. Advertising costs. . '\
a. Ad-{ertising costs mean the costs of. -
media services and associated costs. Media
advertising includes magazines. newspapJrs.
radio and television programs. direct maiL
exhibits, and the like.
b. The only advertising costs allowable are
those which are solely for (i) the recruitment
of personnel when considered in conjunction
.wlth all other recruitment costs, as set forth
in paragraph 40;,(ii) the procurement of goods
and services; (iii) the disposal of surplul
materials acquired in the performance of the
award except when organizations are
reimbursed for disposals at a predetennined
amount in accordance with Attachment N of
OMU Circular A-11O; or (iv) specific
requirements of the award.
2. Bad debts. Bad-debts. including losse8
(whether actual or estifnated) arising from
uncollectible acconnts nnd other clnims,
related collection costs, and retatad legal
costs. are unallowable.
3. Bid ond proposof costs. (reserved)
4. Bonding costs.
Office of Management and BUdgettircUlar A-122 (6/27/80)
a. Uonding costs arise when the
Government require8.assurance again8t
linenciall088 to i\self Of:' others by reason of
the act or default of the organization. They
urise also in instances where the organization
requires similar aS6uranoe. Included are such
bonos as bid, performance, payment.
adHtnCe payment, Infringement. and fidelity
bunds.
b. Custs of bonding required pursuant 10
the terms of the award are allowable.
c. Costs of bonding required by the
organization in the general conduct of ita
operations are allowable to the extenl that
sllch bonding Is in accordance with sound
business practice and the rates and premiums
are reasonable under the clrcum8tanccs.
5. Communication OO8t,;. Costs incurred for
tclephone services. local and long distance
telephone calls. telegrams. radiograms,
postage and the hJ.:e, are allowable.
6. Compensation for persorlOl sen'ices.
a. Definition. Compensation for personal
services includes 111\ compensation paid
currently or accrued by the orgnnizotion for
scrvlces of employecs rendered during the
period of the oward, (except os otherwise
provided in paragraph g. below). II includes,
but is not limited to, salaries, wages,
director's and executive committee member's
fees. incentive awards, fringe benefits,
pension plan costs, allowances for off-site
P<1Y, incentive pay, locotion allowances.
hcrdsbip pay, and cost of Ih'ing differentials.
b. A lIowability. Except as otherwise
specifically provided in \his paragraph the
costs ol such compensation are allowable to
the extent that:
(1) Totol compensation to. individual
employees is reasonable fOf:' the services
rendered and conforms to the eslablished
policy of the organization consistently
applied to both Government and non-
Government activities; and
(2) Charges to awards whether treated as
direct or indirect cosls are determined and
supported a\ required in this paragraph,
c. Reasonableness.
(1) When the organization is predominantly
engaged in activities other than those
sponsored by the Government. compensation
lor employees on Governmonl-sponsored
work will be considered reasonable to the
extent that it is consistent wilh that paid for
similar work in the organizatio'n's other
activities.
(2) When the organization is predominantly
engaged in Government-sponsored activities
and in cases where the kind of employees
required for the Government activities. ore
not lound in the organization's othor
activities, compensation for employees on
Government-sponsored work will be
considered reasonable .to the eldent thol it is
comparable to that paid for similar work in
the labor markets in which the organization
competes lor the kind ol employees involved,
d. Speciaf considerations in determining
o lIowabi/ity. Cerlain conditions require
special consideration and possible limitations
In determining costs under Federal awards
where amounts or types of compensotion
appear unreasonable. Among such conditions
are the following:
(1) Compensulion to members ol nonprofit
orpaniz<:tions, trustees, direclors. associates,
officers, or the immediate lamilies thereof.
Determination should be made that such
compensation is rellSnnable for the aclual
personal services rendered rather than a
distribution of esrnings in excess of costs,
(2.) Any change in an orgauization's
compcnsation policy resulting in 0
substantial increase in the organization's
level of compensation, porticularly when it
was concurrent with an increase in the ratio
of Government awards to other activities of
the organization or any change in the
treatment ol allowaoility of specific types of
compensation due 10 changes In Government
policy.
e. Unallowable costs. Costs which are
unallowable under other paragraphs of this
Allachment shall not be allowable under this
paragraph solely on the basis that they
constitute personal compensation.
f. Fringe benefits.
(1) Fringe benefits in the form of regular
compensation paid to employees during
periods ol authorized absences lrom the job.
such as vacation leave, sick lellve, military
leave, aud the like, are allowable provided
such costs are absorbed by oil organization
activities in proportion to tile relative amount
of time or effort actually de\'oted 10 each.
(2) Fringe benefils In the lorm of employer
contributions or expenses lor social security,
employee insurance, workmen's
compensation insurance, pension plan cosls
(see paragraph g. below), and the like, are
allowable provided such benefits are granted
In accordance with eslablished wrillen
organization policies. Such benefits whether
trea led 11.5 indirect costs or as direct costs,
shall be distributed to particular awards and
other activities in a monner consistent with
the pallern of benefits accruing to the
individuals or group of employees whose
salaries and wages are chargeable to such
awards and other aclivities.
(3](a) Provisions for a reserve under a self-
InSurance progmm fOf:' unenployment
compensation or workmen's compensation
are allowable to the extentlhat the
provisions represent reasonable estimates of
the liabilities for such compensation. and the
types ol coverage, exlent of coverage, and
rates and premiums would have been
allowable had insurance been purchased to
cover the risks. However, provisions for self-
insured liabilities whichdo not become
payable for more than one year after the
provision is made shall not exceed the
present value of the liability,
(b) Where an organization follows a
consistent poley of expensing actual
payments to, or.on behalf of. employees or
rormer employees for unemployment
:Compensation or workmen's compansation,
8uch,payments are allowable in the year of
'Payment with the prior approval ol the
awarding agency provided they are ollocated
toal1 activities of the organization.
(4) Costs ol insurance on the lives of
trustees, officers, or other employees holding
positions of similar responsibility are
allowable only to the extent that the
insurance represents additional
compensation. The costs of such insurance
when the organization is named as.
I
A-122:5
beneficiory are unallowable,
g.Pensian plan costs.
(1) Costs of the organization's pension plan
which are incurred in accordance with the
established policies of the organization are
ollowable, provided:
(a) Such policies meet the test of
reasonableness:
(b) The methods of cost allocation are not
discriminatory: .
(c) The cost assigned to each fiscal year is
determined in accordance with generally
accepted accounting principles as prescribed
in Accounting Principles Board Opinion No, 8
issued by the American Institute of Certified
Public Accountants: and
(d) The costs assigned to a given fiscal year
ere funded for all plan participants within six
months aiter the end of that year. However,
increases to normal and past service pension
costs caused by 0 delay in funding the
acluarialliability beyond 30 days after each
quarter of the year to which such costs are
assignable arc unallowable,
(2) Pension plan termination insurance
premiums paid pursuant to the Employee
Retirement Income Security Act of 1974 (Pub.
L 93-4(0) are allowable, Late payment
charges on such premiums are unallowable.
(3) Excise taxes on accumula ted funding
deficiencies and other penalties imposed
under the Employee Retirement Income
Security Act are unallowable.
h. Incentive compensation. Incentive
compensation to employees based on cost
reduction, or efficient performance,
suggestion awards, safety awards, etc., are
allowable to the extent that the overall
compensation is determined to be reasonable
and such costs are paid or accrued pursuant
to an agreement entered into in good faith
between the organization and the employees
before the services were rendered, or
pursuant to an established plan followed by
the organization so.consistently as to imply,
in effecl, an agreement to make such
payment.
i. Overtime, extra pay shift, and multishift
premiums. See paragraph 27.
j. Severance pay. See paragraph 44.
k. Training and education QO~ts. See
paragraph 48. .
I. Support of salaries and wages: .
(1) Charges to awards for salarie1\ and
wages, whether treated as direct costs or
indirect costs, will be based on documented
payrolls approved by 0 responsible official(s)
ol the organization. The distribution of
salaries and wages to awards must be
supported by personnel activity reports as
prescribed in subparagraph (2.) below, except
when a substitute system has been approved
in writing by the tbe cognizant agency. (See
paragraph E.2 of Allachment A)
(2) Reports reflecting the distribution of
activity of each employee must be
maintained for all staff members
(professionals and nonprofessionals) whose
compensotion is charged, in whole or in part,
directly to awards, In addition, in order to
support the allocation of indirect costs, such
reports must also be maintained for other
employees whose work involves two or more
funcitons or octivities if a distribution of their
compensation between such functions or
activities is needed in the determination of
. 'Office ~f Management and Budget cirlular A-122 (6/27/80)
theorganization's indirect cost rate(s) (e.g.,
an employee engaged part-time in indirect
cost activities and part-time in a direct
function). Reports maintained by nonprofit
organizations to satisfy these requirements
must meet the following standards:
(a) The reports must renect an after-the-
fact determination of the actual activity of
each employee. Budget estimates (i.e..
estimates determined before the services are
performed) do not qualify as support for
charges to awards,
(b) Each report must account for the total
activity for which employees are
compensated and which is required in
fulfillment of their obligations to the
organization,
(c) The reports must be signed by the
individual employee, or by a responsible
supervisory official having first hand
knowledge of the activities performed by the
employee, thaI the distribution of activity
represents a reasonable estimate of the
actual work performed by the employee
during the periods covered by the reports.
(d) The reports must be prepared at least
monthly and must coincide with one or more
pay periods.
(3) Charges for the salaries and wages of
.nonprofessional employees, in addition to the
'supporting documentation described in
subparagraphs (1) and (2) above, must also
be supported by records indicating the total
number of hours worked each day
maintaioed in conformance 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 employee," under the Fair Labor
Standards Act.
(4) Salaries and wages of employees used
in_.meeting cost sharing or matching
requirements on awards must be supported in
the same manner as salaries and wages
claimed for reimbursement from awarding
agencies.
7, Contingency provisions. Contributions to
a contingency reserve or any similar
provision made for events the occurrence of
which cannot be foretold with certainty as to
time, intensity, or with an assurance of their
happening, are unallowable, The term
"contingency reserve" excludes self-
insurance reserves (eee paragraph 6.f.(3) and
18.a.(2)(d)): pension funds (see paragraph
6.(g)); and reserves for normal severance pay
(see paragraph 44.(b)(1),
6, Contributions. Contributions and
donations by the organization to others are
unallowable.
9. Depreciaiion and use allowances.
a. Compensation for the use of buildings,
other capital improvemen(s, and equipment
or: "and may he made through use
allowanr:es or depreciation. However. excepl
as prr>vided in paragraph f. below a
~ombii\ation of the two methods may not be
used in conr:cction with a single dass of
fixed as~ets (e.g., buildings. o:fice equipmenl.
computer equipment, etc.).
b. The computation of use allowances or
dl~pr!'ciation shall be based on the
aCljuisition cost of the assets involved. The
acquisition cosl of an asset dona led to the
organization by a third party shall be lis fair
market value at the time of the donation..
c. The computation of use allowances or
deprecia tion will exclude,
(1) The cost of land;
(2J Any portion of the cost of buildings and
equipment borne by or donated by the
Federal Government irrespective of where
title was originally vested or where it
presently resides; and
(3) Any portion of the cost of buildings and
equipment contributed by or for the
organization in satisfaction of a statutory
matching retirement.
d. Where the use allowance method is
followed, the use allowance for buildings and
improvement (including land improvements
such as paved rarking areas. fences, and
sidewalks) will be computed at an annual
rate not exceeding two percent of acquisition
cost. The use allowance for equipment will
be computed at an annual rate not exceeding
six and two-thirds percent of acquisition cosl.
When the use allowance method is used for
buildings, the entire building must be treated
as a single asset; the building's components
(e.g, plumbing system, heating and air
conditioning, etc.) cannot be segregated from
the building's shell. The two percent
limitation, however, need not be applied to
equipmenl which is merely a\tached or
fastened to the huilding but not permanently
fixed to it and wllich is used as furnishings or
decorations or lor specialized purposes (e.g.,
dentist chairs and dental treatment units,
counters, laboratory benches holted to the
floor, dishwashers, carpeting. etc.). Such
equipment will be considered as nol being
permanently fixed to the building if it can be
removed without the need for costly or
extensive alterations or repairs to the
building or the equipment. Equipment that
meets these criteria will be subject to the six
and two-(hirds percent equipment use
allowance limitation.
e. Where depreciation method is followed,
the period of useful service (useful life)
established in each case for usable capital
assets must take into consideration such
factors as type of construction, nature of the
equipment used, technological developments
in the particular program area, and the
renewal and replacement policies followed
for the the individual items or classes of
assets involved. The method of depreciation
used to assign the cost of an Rseet (or group
of assets) to accounting periods shall renect
the pattern of consumption of the asset
during its useful life. In the absence of clear
evidence indicating that the expected
consumption of the asset will be significantly
greater or lesser in the early portions of its
useful life than in the later portions, the
straight-line method shall be presumed to be
the appropriate method. Depreciation
methods once used shall not be changed
\lnless approved in advance by the cognizant
Federal agency. When the depreciation
method is introduced for application to assets
previously subject to a use allowance, the
combination of use alluwances and
depreciation applicable to such assets must
not exceed the total acquisition cost of the
assets. \\'hen lhe depreciation method is used
for buildings, a buildin~(s shell may be
I
A-122:6
segregated from each huilding component
(e.g.. plumbing system. heating. and air
conditioning system, etc,) and each item
depreciated over its estima'ed useful life; or
the entire building (i.e., the shell and all
components) may be treated as a single asset
and depreciated over a single useful life.
f. When the depreciation method is used
fur a particular class of assets. no
depreciation may be allowed on any such
assets lhat. under paragraph e, above, would
be viewed as fully depreciated. However, a
reasonable use allowance may be negotiated
for such assets if warranted after taking into
consideration the aITIount of depreciation
previously charged to the Government, the
estimated useful life remaining at time of
negotia tian, the effect of any increased
maintennuce charges or decreased efficiency
due to age, and any olher factors pertinent to
.the utilization of the asset for the purpose
contemplated.
g. Charges for use allowances or
depreciation must be supported by adequate
property records Bnd physical inventories
must be taken atleBst once every two years
(a slatillical sampling basis is acceptable) to
ensure that assets exist and are usable and
needed. When the depreciation method is
followed, adequate depreciation records
indica ting the amount of deprecia tion taken
each period must also be maintained.
10. Donations
a. Services received.
(1) Donated or volunteer services may be
furnished to an organization by professional
and technical personnel, consultants, and
other skilled and unskilled labor. The value
of these services is not reimbursable either as
n direct or indirect cosl.
(2] The value of donated services utilized
in the performance of a direct cost activity
shull be considered in the determination of
Ihe organization's indireCt cost rale(s) and,
accordingly, shall be allocated a
I,roportioll'lte share of applicable indirect
costs when the following circumstances exist:
(a) The agg~egale value of Ihe services is
mnterial;
(b) The services are supported b~~
significant alllOlml of Ihe iJl(lirect costs. _ .
incurred by the organiza lion:
Ie) The direct cost activity is not pursued
primarily for Ihe benefit of the Federal
GO\'l':rnment.
(3) In those instances where there is no
basis for determining the fair market value of
the services rendered, the recipient and the
cognizant agency shall negotiate an
appropriate aiiocution of indirect cost to the
sen:ices.
(4) Where donated services directly benefit
a rroject supported by an a ward, the indirect
costs alloca led to the services VI; ill be
considered as a part of the total cosls of the
project. Such indirect costs may be
reimbursed under the award or used to meet
cost sharing or matching requirements.
(5) The value of tlJe donated services may
be used to meet cost sharing or matching
requirements under conditions described in
I',llachment E, OMB Circular No, A-ltO.
Where donated services are treated as
indirect costs, indirect cost rates will
separate the value of the donations so that
L. I
GUice of Management and Budget Circular A-122 (6/27/80)
rcimhl:rscmrnt \-'\'11l not be n:~de
(6) Fair mdrkct value of d,)naled services
shall be computed as follows:
(a) [{otes for \'('!:;nleer se.-,'ices. Rates for
volunteers shall be consiste",! with those
regular rates paid for similar work in other
activities of the or~dnizal1on.ln cases where
the kinds of 6kills involved are not found in
the other activities of the or:::anization, the
rates used shall be consiste;t with those paid
for similar work in the lab(\[ market in which
the organization competes for such skills.
(b) SCTl'ices dono/cd bye/her
orgonizatio11s. \Vhcn an emrlcyer donates
the services of nil employee, these services
sh,dl be valued at the empio)'ee's regular rate
of pay (exclushe of fringe benefits and
indirect costs) provided the services are in
the same skill for which the employee is
normally paid. If the services are not in the
same skill for which the erT.ployee is normally
paid, fair market \',due shall be computed in
accordance with subparagraph (a) above,
b. Goods and space.
(1) Donated goods; ie., expendable
personal property/supplies, and donated use
of space may he furnished to an organization.
The value of the goods and space is not
reimbursable either dS a direct or indirect
cost.
(2) The vallie of the donatiuns may be used
to meet cost sharing or matching share
requiremcnts under the conditions described
In Attachmcnt E, O~lI3 Circular 1\0. A-110.
The value of the dona tions shall be
dctermined in accordance wi th Attachment
E. Where donations are treated as indirect
costs, indircct cost ratcs will separate thi
valuc of the donations so t~at reimbursement
will not be mace.
11. Employee morale, hec::h, and welfare.
costs and credits. The cos\s of house
publications, health or first.aid clinics, and/
or infirmaries, recreational aeth'ities.
employees' counscling senices. and other
expenses incurred in accorcance with the
organization's estFloJished practice or custom
for the impro\'ement of working conditions,
employer-erni;lo:;ee rela I ions, employee
nlordle, and employee perfo;mance are
aIlO\",ble, Such costs will be equitably
apportio/l."d to all activities of t~e
organiz;llion, Income gene'atecl from any of
these activities \\'ill be crecited to the cost
thereof unless such income has been
irre\'ocdbly set o\'er to em;:.:oyee welfare
org.1niZ8Iions.
12. Entertainmed C05:S. Costs of
amu~ement, di\"crsion, scc:a; activilics,
ceremonials, nnd costs rela ti~,g thereto. sud.
as me"is. lodging, rentals, tra"'>portation, and
grallli:ics are unallowable [but see
pilrcg'aphs 11 and 25).
13. Equipment Gnd o:he,- ::cpi:c/
e.\pe:Jditun!s.
a. As used in this parag! aph, the following
term;;. ha\'c lhe.mfCClning,s ~Qt forth below:
(1) "Equipment" means 3n article of
nonexpendable tangible personal property
hn\'il'g a useful life of morro t~an two years
and an acquisition ccst of 5500 or more per
ur.it. An organiz2~ion may L:se its 0\\'0
def;~ilion provided that it atlenst includes all
no~expendClble tangible rersona! property as
defined herein,
(2) "Acquihition cost" means the net
Invoice unit price of an item of equipment,
Including the cost of any modifications,
attachments, accessories, or auxiliary
apparatus necessary to make it usable for the
purpose for which it is acquired, Ancillary
charges, such as taxes, duty, protective in-
transit insurance, freight, and installation
shall be Included in or excluded from
acquisition cost in accordance with the
organization's regular written accounting
practices.
(3) "Special purpose equiplllent" means
equipmcnt which is usable only for research,
medical, scientific, or technical activities,
Examples of special purpose equipment
Include microscopes, x-ray machines, surgical
Instruments, and spectrometers,
(4) "General purpose equipment" means
equipment which is usable for other than
research, medical. scientific, or technical
activities, whether or not special
modifications are needed to make them
suitable for a particular purpose. Examples of
general purpose equipment Include office
equipment and furnishings, air conditioning
equipment, reproduction and printing
equipment, motor vehicles, and automatic
data processing equipment.
b. (1) Capital expenditures for general
purpose equipment are unallowable as a
direct cost except with the prior approval of
the awarding agency,
(2) Capital expenditures for special purpose
equipment are allowable as direct costs
providad that items with a unit cost of $1000
or more have the prior approval of the
awarding agency,
c. Capital expenditures for land or
buildings are unallowable as a direct cost
except with the prior approval of the
awarding agency,
d. Capital expenditures for improvements
to land, bdldings, or equipment which
materially increase their value or useful life
are unallowable as a direct cost except with
the prior approval of the awarding agency,
e. Equipment and other capital '
expenditures are unallowable as indirect
costs. However, see paragraph 9 for
allowability of use allowances or
depreciation on buildings, capital
improvements. and equipment. Also, see
paragrarh 42 for allowability of rental costs
for land, buildings, and equipment.
14, Fines and penalties, Costs of fines and
penalties resulting from violations of, or
failure of the organization to comply with
Federal. State, and local laws and re~ulations
are unallowable except when incurred as a
result of compliance with specific provisions
of an award or instructions In writing from
the awarding agency. '
15. Fringe benefits. See paragraph 6. f.
16. Idle facilities and idle capacity.
a. As used in this paragraph the following
terms have the meanings set forth below:
(1) "Facilities" means land and buildings or
any portion thereof, equipment individually
or collectively, or any other fangible capital
asset, wherever located, and whether owned
or leased by the organization.
(2) "Idle facilitil!s" means completely
unllwd facilities tha: are e'l(cess 1'0 the
organi2.ation's current needs.
(3) "Idle capacity" means the unused
I
A-122:7
capacity of partially used facilities_ It Is the
difference betwecn tflat which a facility
could achieve under 100 per cent operating
time on a one-shift basis less operating
interruptions resulting from time lost for
repairs, setups. unsatisfactory materials. and
other normal delays, and the extent to which
the facility was actoally used to meet
demands during tne accounting period. A
mullishift basis may be used if it can be
shown that this amounl of usage could
normally be expected Cor the type of facility
involved,
(4) "Costs of idle Cacilities or idle capacity"
means costll such as maintenance, repair,
housing. renL and other related cosL'!; e.g.,
property taxes. insurance, and depreciation
or use allowances.
b. The costs of idle facilities are
unallowable except to the extent that:
(1) They are unnecesllary to meet
fluctuations in wurkload; or
(2) Although not necessary to meet
fluctuations in workload, they were
necessary when acquired and are now idle
because of changes in program requirements,
efforts to achieve more economical
operation8, reorganization, termination, or
other causes which could not have been
reasonably foreseen. Cnder the exception
stated in this subparagraph, costs of idle
facilities are allowable for a reaoonable
period of time, ordinarily not to exceed one
ycar, dl!pending upon the initiative taken to
\lse, lease. or dispose of such facilities (but
see par;:!graphs 47.b. and d.),
c. The costs of idle capacity are normal
costs of doing business and are a factor in the
normal fluctuations of usage or indirect cost
rates from period to periud. Such costs are
allowable, provided the capacity ill
reasonably anticipated to be necessary or
was originally reasonable and is subject to
reductkm or elimination by subletting,
renting, or sale, in accordance with sound
business, economics, or security practices.
Widespread idle capacity throughout an
entire facility or among a group of assets
having substantially the same function may
be idle facilities. .
17. hdup,mdcnt research and development
[Reservtdl. . . .
16. Insurance and indemnification. I
a. Insurance includes insurance which the
organization is required to carry, or which is
approved, under the terms of the award and
any other insurance which the organization
maintains in connection with the general
conduct of i1s operations. Thia paragraph
does not apply to insurance which represents
fringe bem.fits for employees (see paragraph
6.f. and 6.g.(2)).
(1) Costs of ino'lrance r~quired or
approved. and maintained, pursuiJnt to the
award are allowable.
(2) Costs of other insurance maintained by
the organization in connection with the
general conduct of i1s opel'a tions are
alluwable subject to the following limitations.
(a) Types and extent of coverage shall be
In accordance with sound business practice
and Ihe r13tes and premiums shall be
reasona ble under the circumstances.
(b] Costa allowed for business interruption
or other similar insurance shall be limited to
L, . I
Office of Management and Budget Circular A-122 (6/27/80)
exclude coverage of :nanagem~nt fees.
(c) Costs of insurance or of any provi~iolls
for a reserve cover:ng the risk of loss Or
d'llnage to Government propcrty are
allowable only ta !he extent that the
orl/'lnization iR )inble for such loss OJ' damage.
[el) Provisions for 8 resl?rve under a self-
insufur,,;e prcgram arp. allowable to the
extenlthattypes of coverage, extl'nt of
coveragp., rilles, and premiums would h.we
been allowed had ir.su:ance been purchased
to covcr the risks. However. provision for
known or reasonably estimated sclf-in~ured
liabilities, which do noi become payable for
more th1n one year after the provision is
made shall not excced the present value of
the liability.
(c) Costs of insurance on the lives of
trustees, officers, or other employees holding
positions of similar responsibilities arc
allowable only to the extentlhat the
insurance represents additional
compensation (see paragrAph 6). The cost of
such insurance when the organization is
idcntificd as the beneficiAry is unallow;;ble.
(3) Actuallosscs which could have been
covered by perl1lir.nible insurance (through
the purchase of insuran:;e or a self-insurance
program) are unallowable unless expressly
provided for in the awaro, except:
(a) Costs incurred ber.ause of losses nol
covered under nominal deductihle insurance
coverage provided in kPeping with sound
business practice are allowable,
(b] Minor losses not covered by insurance,
such as spoilage, breakog?, and
(Hsappearance of supplies, which occur in the
ordinary COlirse of operations, are allowahle.
b. Indemnification includes securing the
organization against liabilities to third
persons and any other loss or damag?, not
compensated by insamnce or otherwise. The
Government is obligated to indemnify the
organization only to 'he extent expressly
provided in the award.
19; Interest, fund raising, and investment
management costs.
a. Custs incurred for interest. on borrowed
capital or temporary use of encowment
funds. however represented, are unallowable.
b. Costs of organized fund raising.
including financial campaigns. endowment
drives, solicitation of gifts and bequests. and
similar expenses incurred solcly to rai~e
capital or obtain contributions are
unallowable.
c. Costs of investment r.ounsel and staff
and similar expenses incurred solely to
enhance income frum Investments are
unaJlowa ble.
d. Fund raising and investment activities
shall be allocated an appropriate share of
indirect costs under the conditions described
in paragraph B of Attachment A.
20. Labor relations costs. Costs incurred in
maintaining satisfactory relations beiween
the organization and its employees. including
costs of labor maOlagemenl r;ommittees,
employee publications. and other related
activities are allowable.
21. Losses on other awards. Any excess of
costs over income on any award is
unallowable as a cost of any olher award,
This inetudes, but is not limited to, the
organization's contributed portion by reason
of cost sharing agreements or any
underrecoveries through negotiation of lump
sums for, or ceilings on, indirect cos(s.
~2. ^,Iainlenance and repair costs. Costs
incurred for necp.ssary maintenance. rcpair,
or upkeep of buildings and equipment
(inchiljing Government property unless
o:herwise provided for) which neither add to
the pennanent value of the prop~rty nor
appreciably prolong its intended life. but
keep it in an efFcient operating cono;tion. are
allov;ahle. Costs incurred for iP1provemcnts
which adelto the permanent value of the
buildings and e'luipment or appredilbly
prolong their intended life shsll be treated as
ca;::ital expenditm-es (see parAgrAph 13).
23. Materials and sllpplie.~. The costs of
ma terials and s!;pplies necessary ta ca~ry flUt
an "ward are a!:()w!lole. Such cust. should be
charged at their actual prices afler deducting
all cash di~counts, trade discounts, rebates,
and allowances recei'/ed by thf' organizCltion.
Wilhdrawals from genel al slores or
stockrooms ~hould be charged at cost under
any recognized method of pricing
consistently applied. Incoming transportation
charges may be a proper part of ma terial
cos:. Materials and Bupplies chargerl'as a
direct cost should include only Ihe nwterials
and supplies actually used for the
performance of the contract or grant. nnd due
credit should be given for any excess
materials or supplies retained, or reluml'd to
vendors.
24. Meetings, conferences.
a. Costs associated with the conduct of
meetings. and conferences, and include the
cost of renting facilities, mt!nls, speakers'
fees, and the like. Dut see paragraph 12.
Entertainment casts, and paragraph ~9.
Participant suppcrt casts.
b. To the extent that these costs are
identifiable with a particular cost objective,
they should be charged to that objective. [See
paragraph B. of Attachment A.) These costs
are allowable provided that they meet Ihe
general tests of allowable, shown in
Attachment A to this Circular.
c. Costs of meetings and conferences held
to conduct :he general administration of the
organization are allowable.
25. Memberships, subscrIptions, and
professional activity costs.
a. Costs of the orgAnization's membership
in civic. business, technical and professional
organizations are allowable.
b. Costs of the organization's subscriptions
to civic, business, professional, and technical
periodicals are allowable.
c. Costs of attendance ilt meetings and
conferences, sponsored by olhers when the
primary purpose is the dissemination of
ter.l:nicnl information, are allowable. This
inc.lutles costs of meals, Ira'lsportatron. and
other items incidental to such attendance.
26. Organization costs. Expenditures. such
CIS incorporation fees, brokers' fees, fees to
promoters, organizers or management
consultants, attorneys, accountants. "r
inve~tment counselors, whl'lher or not
&mployees of the organization. in connection
with establishment or reorganization of an
organization. are unallowable except with
prior approval of the awarding agency,
27. Ol'ertime, extra-pay shift, and
I
A-122:8
mu/tishdt pnrlliunls. Premiums for overtim",
extra-pay shifts, and multishift work are
Ill:o",al,le onl)' with the prior appro,al of ~I;e
awarding agency c)o.l;epl:
a. \I\'hcn lll;ce~SMY to cope with
cr.lCrgencics, such ns lhose resulting from
..,..c',j.,[,~,. natural disasters, breakdowns of
(,'l'dprrcnt. or 0cc~~i()nHl operatkmal
b:)I\k"f'c~s of 1I sporadic nature.
h V\:hell cr.lpioyees lire perlOrliling indirect
funcii'lllR such HS administration,
fllainlenancc, or acclJUnting.
c. [n thc pcrfornHlilcc of tEstS. laboratory
pnl('{,dures. vI' olher similar operations which
ore c.oiiLnuotls in n(lfure and cannot
r"i1s(;n,,~i:.' be illll'rr:lptcd or othcrwis',
cOIIlJ-l:~'.!~'d.
d. When low"r ovcrull costlu the
(;o"o'er-r.;lIect will result.
20.1'ogc chlJrges in professional journals.
Page c1l11rges for professional journal
publica tions arc allowable us a necessary
parI of research cos:s, where:
a. The research papers report work
supported by the Government: and
b. The cliargeR are levied impartially on all
research rapers published by the journat
whelh'~r or nol by Government-sponsored
uulhnrs.
29. {'artir.;ipollt support cC'sts. Par:icipant
support costs arc direct cosls for items such
us stipends or subsistence allowances. travel
1I110wanr.e~. find registration fees paid to or
on behalf ()f participants or trainees (but not
cmploy'ees) in connection with meetings.
conferences, symposia, or training projects.
These cosls are allowable with the prior
approval of the awarding agency.
30, rute!!:t costs.
a. Costs of (i) preparing disc.loslll'es,
rcports, ilnd other documents required by the
a w;ird ;Hld of searching the art to the extend
ll"ccssary to make such disclosures, (ii)
preparing documents and any othcr patent
costs ir. connoction with the filing and
prosecut;ol1 of a United stat~s p"tcnt
app!icnti'ln where title or royalty-free license
is required by the Governmentlo be
conveyed io the Government, and (iii) general
wunse!i"g services rel"ting to patehl.,and
copyright matters, SUGh as lldvice on paten.!
and copyright laws. ~egulations. clauses. and
employee agreements are allowable (bllt See
ptlragraph 34).
b Cosl of preparing discloslJres, reparts,
and other documer.ts and of searching the arl
to the ~xfent nccessary to make di~closurcs,
if not reql:ired by the awurd. p.re
unallowable. Costs in connection with (i)
(ilin~ and prosecuting any foreign patent
application, or (ii) any United States plltent
application, where the award does not
rC'lllire conveying title or a royalty-free
license to the Go\'ernment. are unallowable
(also .ee paragraph 43).
31. Pension plans. See paragraph 6. g.
32. Plant security costs. Necessary
expenses incurred to comply with
Government security requirements or for
facilities protection. including wages,
unifolms. and equipment of personnel are
ullowable.
33. Preoward costs. Preaward costs are
those incurred prior to the effec(ive date of
the award directly pursllantto the
.. ...
Offi'ce of Management and BUdgettircUlar A-122 (6/27/80)
negotiation and in anticipation of the Awanl
where su(;h costs is necessary to comply with
:he proposed delivery schedule or period of
pcrforrn<lnce. Such cosls llre allowable only
to lhc extent that they would have been
llilowable if incurred ofter the datp. of the
vWilnlllnd only with the written approval of
thc~warding ngem~y.
34.l'rnfessional sen'ice cas Is.
a. Cosls of profl'~sional and consultant
services rendered by persons who are
liH'''luers of a particular profession or possess
a special skill. and who are not officers or
emjJloyees of the organization, arc a!\owable,
subject to b, c, and d, of this pliragraph when
reasonable in r'21ationto the services
rendered and when not contingent \lpon
recovery of the cosls from the Governmenl.
b. [n detcrming the allowability of wsts in
II particular case, no single factor or any
special combination of faclors is necessarily
determinative. However, the following
factors are relevant:
(1) The nature and scope of the service
rCllIlcred in relation to the service required.
(2) The necessity of contrHcling for the
sen'ice, considering the organization's
cnpahility in the particular area.
(:~) The past pailI'm of slIch costs,
pHrticularly in the years prior to Government
awards.
(4) The impact of Government aWards on
the organization's business (Le" what new
prohlems have arisen).
(5) Whether the proportion of Government
work to the organization's total business is
such as to influence the organization in favor
of incurring the cost, particularly where the
services rendered are not of 8 continuing
nature and have lillII' relationship to work
under Government grants and contructs.
(6) Whether the service can be performed
more economically by direct employment
rather than contracling.
(7) The qualifications of the individual or
concern rendering the service and the
customary fees charged, especially on non-
Government awards.
(0) Adequacy of the contractual agreement
for the service (e.g., description of the service,
estimate of time required, rail' of
compensntion. and termination provisions),
c. In addition to the factors in paragraph b
above, retainer fees to the allowable must be
supported by evidence of bona fide services
available or rendered.
d. Cost of legAl. accounting, and consulting
sen'ices, and related costs incurred in
conn~clion with defense of antitrust suits..
and the prosecution of clai-:ns against the
Government, are unallowable. Costs of legal,
act:ounling and comulling services, and
related cas 15, incurred in connection with
patent infl'ingementlitigalion, organization
and reorganization, are unallowable unless
otherwise provided fo..! in the award (but see
paragraph 471"1.
35. Profits and losses on disposition of
depreciable property or other capital assets.
a. (1) Gains and losses on sale, retirement.
or olher disposition of aepreciable property
sh;.:1l be included in the year in which they
o(;cur as credits or charges to cost grouping( s)
in which the depreciation applicable to such
property was included. The amount of the
gain or loss to be included as a credit or
chHrge to (he appropriate cost grouping(s)
shall be the dilference be(ween the amount
realized on the property and the
undepreciated basis of the property.
(2) Gains and losses on the disposition of
depreciable property shall not bl! recognized
os a separate credit or charge under the
following conditions.
Ill) The ~ain or loss is processed through II
depreciation reserve account and is reflected
in the Jepreciation allowatlle under
parogropb 9.
(1)) The property is given in exchange as
part of the purchase price of 8 similar item
and the gain or loss is taken into account in
determining the depreciation cost basis of the
new item.
(cJ A loss regulls from the failure 10
maintain permissible insurance, except os
otherwise pl'uvided in paragraph 18.a.(3).
(d) Compensation for the use of the
property was provided through use
allowanccs in lieu of depreciation in
accordance with paragrAph 9.
(e) Gains and losses arising from mass or
extraordinary sales, retirements, or other
dispositions shall be considered on a cose-
by-ca~e basis.
h, Gains or losses of any nature arising
from the sale or exchange of property other
than the property covered in paragraph a.
above sh..ll be excluded in computing award-
cosls.
36. Public informatiun sen'ice casts.
a. Public information service costs include
the cost associated'with pamphlets, news
releases, and other forms of information
services. Such costs. are normally incurred to:
(1) Inform or Instruct individuals, groups, or
the general public.
(2) Interest individuals or groups in
participating in a service program of the
olgnnization.
(3) Disseminate the results of sponsored
and nonsponsored activities.
b. Public information service costs are
allowable as direct costs with the prior
approval of thF' awarding agency. Such costs
are unallowable as indirect cosls.
37. Publico/ion and printing costs.
a. Publication COst5 include the costs of
printing (including the processes 'of
composition. plate-making, press work,
binding, and the end products produced by
such processes), distribution, promotion,
mailing, and general handling.
b. If the~e costs are not identifiable with a
particular cost objective. they should be
allocated as indirect costs to all benditing
activities of the organization,
c. Publication and printing costs are
unallowable 8S direct costs except with the
prior npproval of the awarding agency.
d. The cost of page charges in journals is
addressed paragraph 28.
38. Rearrangement. and alteration costs.
Costs incurred for ordinary or normal
rearrangement and alteration of facilities are
allowable. Special arrangement and
allera tion costs incurred specifically for the
project are allowable with the prior approval
of the awarding agency.
39. Reconversion costs, Costs incurred In
the l'tlstoration or rehabilitation of the
orFaniution's facilities to approximately the
I
A-122:9
same condition existing Immediately prior to
commencement of Government awards, fair
wear and tear excepted, are allowable.
40. Recruiting costs. The following
recruiting costs are allowable: cosl of "help
wanted" advertising, operating cosls of an
employment office, costs of operating an
educational testing program, travel expenses
including food and lodging of employees
while engaged in recruiting personnel, travel
costs of applicants for interviews for
prospective employment, and relocation COSlS
incurred incident to recruitment of new
employees (see paragraph 41c). Where the
organization uses employment agencies,
costs not in excess of standard commercial
rates for such services are allOWAble.
41. Relocation costs.
a. Relocation costs are costs incident to the
permanent change of duly assignment (for an
indefinite pcriod or for a stilted period of not
less than 12 montbs) of an existing employee
or upon recruitment of a new employee.
Relocation costs are allowuble, subject to the
limitation described In paragraphs b, c, and d,
below, provided that:
(1) The move Is for the bcnefit of the
employer,
(2) Reimburscment to the employee is in
uccordance with nn established written
policy consistenUy followed by the employer,
(3) The reimbursement does not exceed the
employee's actual (or reasonably estimated)
expenses.
b. Allowable relocation costs for current
employees are limited to the following:
(1) The costs of transportalion of the
employee, members of his immediate family
and his household, and IJersonal effects to the
new location,
(2) The costs of finding a new home, such
as advance trips by employees and spouses
to locate living quarters and temporary
lodging during the transition period, up to a
maximum period of 30 days, including
advance trip time.
(3) Closing costs, such as brokerage, legal,.
and appraisal fees, incident to the disposition
of the employee's former home. These costs,
together with those described in (4) below,
are limited to 8 per cent of the'sales price of
the employee's former home. '-
(4) The continuing costs of ownership Of
the vacant former home after the settlement
or lease dale of the employee's new
permanent home, such' as maintenance of
buildings and grounds (exclusive of fixing up
expenses), utilities, taxes, and properly
insurance.
(5) Other necessary and reasonable
expenses normally incident 10 relocation,
such as the coats of cancelling an unexpired
lease, disconnecting and reinstalling
household appliances, and purchasing
insurance against loss of or damages to
personal property, The CO&t of cancelling an
unexpired leaae is limited to threa times the
monthly rentaL
c. Allowable relocation costs for new
employees are limited to those described in
(lJ and (2) or paragraph b. above. When
relocation coats incurred incident to the
recruitment of new employees have been
allowed either as 8 direct or indirect cost and
the employee resigns for reasons within hill
, I
Office of Management and Budget Circular A-122 (6/27/80)
control within 12 months after hire, the
organiza tion shall refund or credit the
Government for its share of the cost.
However, the costs of travel to an overseas
location shall be considered travel cOsts in
accordance with paragraph 50 and not
relocation costs for the purpose of this
paragraph jf dependents are not permilled at
the location for any reason and the costs do
not include costs of transporting household
goods.
d. The following costs related to relocation
are unallowable:
(1) Fecs and other costs associf'ted with
acquiring a new home,
(2) A loss on the sale of a former home..
(3) Continuing mortgage principal and
interest payments on a home being sold,
(4) Income tAxes paid by !in employee
relAted to reimbursed relocation costs,
42. Renta/ costs,
a. Subject to the limitations described in
paragraphs b, through d, of this paragraph,
rental costs are allowable to the extent that
the rates are reasonable in light of such
factol's as: rental costs of comparable
property, if any; market conditions in the
area; alternatives availaole;and the type, life
expectancy, condition, and value of Ihe
property leased.
b. Rental costs under sale and leaseback
arrangements are allowable only up 10 the
amount that would be allowed had the
organization continued to own Ihe properly.
c. Rental cosls under less-Ihan-Ienglh
leases are allowable only up to the amount
that would be allowed had litle to the
property vesled in the organization, For this
purpose, a less-Ihan-arms-!englh lease is one
under which one party to the lease agreement
is able to control or substantially influence
the actions of the other. Such leases include,
hut are not limited 10 those between (i)
divisions of an organization; (ii) organizations
under ..ommon control through common
ofiicers. directors, or members; and (iii) an
organization and a director, trustee, officer,
or key employee of the org;>nization or his
immediate family either directly or through
corporations, trusts, or similar arrangements
in which Ihey hold a controlling interest.
d. Rental costs under leases which create a
material equity in the leased properly are
allowable only up to the amounl that WQuld
be allowed had the organization purchased
the property on the date the lease agreement
was executed; e.g., depreciation or use
allowances, maintenance, taxes, insurance
but excluding interest expense lind other
unallowable costs. For this purpose. a
material equity in the property exists if the
lease in noncancelable or is cancelable only
upon the occurrence of some remole
con tingency and has one or llJore of the
following characteristics:
(1) The organization has the right to
purchase the property for a price \,!hich al the
beginning of the lease appears to be
substantially less than the probable fair
market value at tbe time it is permitled to
purchase the property (commonly called a
lease with a bargain purchase option);
. (2) Title (0 the property pas6es to the
organization at some time during or after the
lease period;
. (3) The term of the lease (initiallerm plus
periods covered by bargain renewal options,
if any) is equal to 75 per cent or more of the
economic life of the leased property; i.e., the
period the property is expected to be
econor.lically usable by one or more users.
43 noya/ties and other costs for use of
pal ". and copyrights.
a. I ;yalties on B patent or copyright or
amortization of the cost of acquiring by
purchase a copyright, palent, or rights
thereto, necessary for the proper performance
of the award are allowable unless:
(1) The Government has a license or the
right to free use of the patent or copyright.
(2) The patent or copyright has been
adjudica ted to be invalid. or has been
administratively determined to be invalid.
(3) The patent or copyright is considered to
be unenforceable.
(4) The patent or copyright is expired.
b. Special care should be exercised in
determining reasonableness where the
royalties may have been arrived at as a result
of less then arm's length bargaining; e.g.:
(1) Royalties paid to persons, including
corporations, affiliated with the organization.
(2) Royalties paid to unaffiliated parties,
including corpora tions, under an agreement
entered into in conlemplation that B
Government award would be made,
(3) Royalties paid under an agreement
entered into after an award is made to an
organization.
c. In any case involving a patenl or
copyright formerly owned by the
organization, the amount of royalty allowed
should nol exceed' the cost which would have
been allowed had the organization retained
title thereto.
44. Severance pay,
a. Severance pay, also commonly rcferred
to as dismissal wages, is a payment in
addition to re~ular salaries and wages. by
organizations to workers whose employment
is being terminated. Costs of severance pay
are aIJowable only 10 the extent that in each
case, it is required by (i) law, (ii) employer-
employee agreement, (iii) estoblishcd policy
that con:;lilutes. in effect. an implied
agreement on the organization's part, or (iv)
circumstances of the particular employment.
b. Costs of severance payments are divided
into two categories as follows:
(1) Actual normaltrunover severanCB
payments shall be allocated to all activities;
or, where the organiza tion provides for a
reserve for normal severances such mefhod
will be acceptable if the charge to current
operatians is reasonable in light of payments
actua!!y made fur normal severances over a
representative past period, and if amounts
c11Grged are allocated to all activities of the
organization.
(2) Abnormal or mass severance pay is of
such a conjectural nature that measurement
of costs bv means of an accrual will not
achieve equity to both parties. Thus. accruals
for this purpose are not allowable. However,
the Government recognizesi!s obligation to
participate to the extent of :ts fair share, in
any specific payment. Thus, allowability will
be considered on a case-by-case basis in the
event of occurrence.
45. Specialized service facilities.
a. The costs of services provided by highly
,
A-122:10
complex or specialized facilities opera ted by
the organization, such as electronic
computers and wind tunnels, are allowable
provided the charges for the services meet
the conditions of either b. or c. of this
paragraph and. in addition, take into account
any items of income or Federal financing that
qualify as applicable credits under paragraph
A.5. of Attachment A,
b. The cosls of such services, when
material, must be charged directly to
applicable awards based on actual usage of
the services on Ihe basis of a schedule of
rates or established methodology that (i) does
not discriminate against federally supported
activilies of the organizHtion. including usage
by the organization for internal purposes, and
(ii) is designed 10 recover only the aggregate
costs ofllie services, The costs of each
service shall consist normally of both its
direct costs 'md its allocable share of all
indiret;l costs. Advan..e agreements pursuant
to parugraph A.6, of Attachment A are
particularly important in this situation.
c. Where the costs incurred for a service
Are not material. they may be allocated as
Indirect costs,
4tJ. Taxes.
3. In general, taxes which Ihe organization
's required to pay and whi~;h are paid or
Bct;rued in.accordance wilh generally
accepted accounting principles, and
payments mude to local governments in lieu
of taxes which are commensurate with the
local government services received are
allowable, except for (i) taxes from which
exemptions are ava:Jable to the organization
directly or which are available to Ihe
organization based on an exemption afforded
the Government and in the laller case when
the awarding agency mukes 8vailable the
n~ce~sary exemption certificates, (ii) special
assessmen!s on land which represent capilal
improvements. and (iii) Federal income taxes.
b. Any refund of t<1xes, and any payment 10
the organization of interest therean, which
were allowed as award costs, w"1 be
credited either as a cosl reduction or cash
refund, as appropriate. to the Govr.rnmcnl.
47. Terminution costs, Terminati~n of
awards generally give rise to the if1curj.~lice
of costs. or the need for speci.!1 treatment of
costs. which would not have arisen had the
award not been terminated, Cost principles
covering these items are set forth belew.
They are to be used in conjunction wilh the
'other provisions of this Circular in
termination situations.
a. Common items. The cost of items
reasonalJly usable on the organization's other
work shall not be allowable unless the
organization submits evidence thai it would
nol relain such i1ems at cost without
sustaining a loss. In deciding whether such
i!ems are reasonably usable on other work or
the organization, the awarui1:g agency shouid
consider the organization's plans and urders
for current and scheduled activity.
Contemporaneous purchases of common
items by the organization shall be regarded
as evidence that such items are reasonably
usable on the organization's other wurk. Any
acceptance of common items as allocable to
the terminated portion of the award shall be
limited to the extent that the quantities of
..
O!flce of Management and BUdft Circular A-l22 (6/27/80)
such items on hand. in transit. and on order
are in eXCe3S of the reasonable quantitative
requiremenu of other work.
b. Costs continw'ng after termination. U in
a panicular case, despite all reasonable
efforts by the organization. certain costs
caIUlot be discontinued immediately after the
effective date of termination. such C08U are
generally allowable within the limitations set
forth in this Cin:ular, except that any such
costs continuing after termination due to the
negligent or willful failure of the organization
to discontinue such costs shall be
unallowable, .
c.. !.Dss of useful value. Lou of useful value
of special tooling, machinery and equipment
wh>:h was not charged to the award as a
c:.a"ilal expenditure is generally allowable if:
i: ; Such special tooling, machinery, or
eq. :pment is not reesonably capable of use in
tb:. ~ther work of the orgenization.
[::) The interest of the Govemme:1t is
pre Jr.ti!d by transfer of title or I.y other
n\l':I:1S deemed appropriete by the awarding
a~' ncy:
d. Rental costs, Rental costs under
u<'f:xpired leases are generally allowable
"-:'ere clearly shown to have been
rt..,~onably necessary for the performance of
Ih: terminated award les8 the residual value
0: such led8es. if (i) the amou.,t of auch rental
cl..imp.d does not exceed the reasonable use
val:Je of the property leased for the period of
th" aWJrd and such further period as may be
re,:.;/)l:,:ble, and (ii) the organization makes
all reasonable efforts to terminate. assign.
sellle. or otherwise reduce the cost of such
lease. There also may be included the cost of
alterations of such leased propeny, provided
such alterations were necessary for the
performance of the award, and of reasonable
restor:;tion required by the provisiooa of the
lease.
e. Settlement expenset1. Settlement
expenses including the following all"
gem.rally allowable:
(1) Accounting, legaL clerical. and similar
costs reasonably neci!ssary for.
(a) The preparation and presentation to
awarding agency of s.ettlement claims and
supporting data with respect to the
terminated portion of the award. unless the
termination is for default. (See paragraph 4.8.
of Attachment 1.. OMB Cirt:ular No. A-llO;
and
(b) The termination aad settlement of
subawards.
(2) Reasonable costs [or the storage,
transportation. protection. and disposition of
property provided by the Government or
acquired or produced for the award: except
when grantees are reimbursed [or disposals
at a predetermined amount in accordance
with Attachment N of OMB Cin:ular A-110.
(3) Indirect costs related to s<llaries and
wages incurred as settlement expenses in
subparagraphs (1) and (2) of thia paragraph.
Normally, such indirect cosu shall be limited
to Cringe benefiu. occupancy cost and
immediate supervision.
f. Claims under subawards. Claims under
Bubawards. including the allocable portion of
claims which are common to the award, and
to other work of the organization are
generally allowable. AIl appropriate share of
the organization's indirect expense may be
allocated to the amount of settlements with
subcontractor/ subgrantees; provided that the
amount allocated is otherwise consistent
with the basic guidelines contained in
Attachment A. The indirect expense 50
allocated shall exclude the same and similar
costs claimed directly or indintctly as
settlement expenses.
48. Trairu'ng and education C08ts.
a. Cosu o[ preparation and maintenance of
a program of instruction including but not
limited to on-the-job. classroom. and
apprenticeship training, designed to increase
the vocational effectiveness of employees,
including training materials. textbooks,
salaries or wages of trainees (excluding
overtime compensation which might arisa
therefrom), and (i) salaries of the director of
training and staff when the training program
is conducted by the organization: or (ii)
tuition and fees when the training is in an
inatitution not opera led by the organization.
are allowable.
b. Costs of part-time education. at an
undergraduate or postgraduate colleSt! leveL
including that provided at the organization's
own facilities, are allowable only when the
course or degree pursued is relative 10 the
field in which the employee i. now working
or may reasonably be expected to work. and
are limited to:
(1) Training materials.
(2) Textbooks.
'(3) Fees charges by the education.1!
institution.
(4) Tuition charged by the educational
i.n.stitution. or in lieu of tuition. instructors'
salaries and the related share of indirect
costs of the educational institution to the
extent that the sum thereof is not in excess of
the tuition which would have ben paid to the
participating educational institution.
(5) Saiuries and related costs of instructors
who are employees of tha organizatiua.
(6) Straight.time compensation of each
employee for time speut attending c1assEle
during working hours Dot in excess of 156
hours per year and only to the extent that
circumstances do not permit the operation oC
classes or a ttendance a t classes after regular
working hours; otherwiae such compensation
is unallowable,
c. C.Jsu of tuition. fees. trainUJg materials.
and textbooks (but not subsistence. salary, or
any other emalumenu) in coIUlection with
full-time education. including that provided at
the organization's own facilities. at a
postgraduate (but not undergraduate) college
leveL are allcwable only when the course or
degree pursued is related to the field in which
the employee i8 now working or may
reasonably be expected to work. aad only
where the cosu receive the prior approval of
the ewarding agency. Such cosu are limited
to the costs attributable to a total period not
to excee:i one school year for each employee
so trained. In unusual cases the period may
be extended.
d. Costs of attendance of up to 16 week.,
per employee per year at specialized
program8 specifically designed to enhance
the effectiveness of executives or managers
or to prepare employees for such positions
are allowable. Such costa include enrollment
I
A-122:11
fees, training materials, textbooks and
related charges. employees' lalaries.
subsistence. and traveL Casu allowable
under this paragra ph do not include !bOIle for
courses that are part of a degree-<H'iented
curricwum. which are allowable only to the
extent set forth in b. and c.. above.
e. Maintenance expense, and normal
depreciation or fair renlaL on facilities
owned or leased by the organization [or
training purposes are allowable to the extent
set forth in paragraphs 9, 2Z. and 4Z,
f. Cuntributions or donations to
educational or training institutions, Including
the donation of facilities or other properties.
and scholarships or fellowships, are
unallnwBble.
g. Training and education cosu in excess oj
those otherwise allowable under paragraphs
. ,b. and c. of this paragraph may be allowed
with prior approval of the awarding agency.
To be considered [or approval, the
organization must demonstrate that such
cost, are consistently incurred pursuant to an
eslublished training and education program,
and that the course or degree pursued is
relative to the field in which the employee is
now working or may reasonably be expected
to work.
49. Transportation costs, Transportation
Cus!s include freight, express, cartage, and
postage charges relating either to goods
purchased. in process, or delivered. These'
costs are allowable. When such costs can
readily be identified with the items involved,
they may be directly charged as
lransportation cosu or added to the cost of
such items (see paragraph 23), Where
Identification with the materials received
cannot readfly be made, transportation costs
may be charged to the appropriate indirect
cost accounts if the organization follows a
consistent equitable procedure in this
respe~l.
SO. Travel costs,
a. Travel costs are the expenses for
transponation. lodging, subsistence. and
related items incurred by employees who are
in travel status on official business of the
organization. Travel cosls are allowable
subject to paragraphs b. tfu.ough e, below,
when they are directly attributable to specific
work under an award orara incurred in the
normal course of administration of the
organization.
b. Such costs may be charged on an actual
basis, on a per diem or mileage basis in lieu
of actual costa incurred. or on a combination
of the tWo, proTided the method used results
in charges consistent with those normally
allowed by the organization in its regular
opera tions.
e. The difIerence in cost between first-class
air accommodations and less than first-class
air accommodations is unallowable except
when le88 than first-class air
accommodatiolU are not reasonably
available to meet necessary mission
requirements, such as where less than first-
class accommodations would (i) require
circuitous routing, (i1) require travel during
unreasonable hours, (iil) greatly increase the
duration' of tha flight, (iv) result In additional
costs which would offset the transportation
saving', or (v) offer Rccommodations which
4
dffJce ofaManagement and Budget elrelJar A-122 (6/27/80)
are not re8wnably adequate for the medical
needs oC the traveler,
d; Nece8llary and !'9awnalml cosbi of
family movements and pel'llonnel movement.
of a special or mass nature are allowable,
pursuant to paragrapha 40 and 41. subject to
allocation on the basis oC work or time period
benefited when appropriate. A~vance
agreements are particularly important.
e. Direct charges for foreign travel costs are
sllowable only when the travel has received
prior approval of the awarding agency, Each
separate Coreign trip must be approved. For
purposes of this provision. Coreign travel is
defined as any travel outBide oC Canada and
the United Slates and its territories and
I'Ossessions. However, Cor an organization
localed in foreign countries, the term "foreign
lravel" means travel outside that country.
[Circular. No, A-IZ.2)
Attachment C
Nonprofit Organizations not Subject to this
C:rt:ular
Aerospace Corporation. El Segundo,
CaliCornia
Argonne Universities Association. Chicago.
Illinois
Associated Universities', Incorporated.
Washington. D.C.
Associated Universities Cor Research and
Astronomy, Tucson. Arizona
Atomic Casualty Commission. Washington.
D.C.
Battelle Memorial Institute, HeadquliI'tered In
Columbus, Ohio
Brookhaven National Laboratory. Upton.
New York
Center for Energy and Environmental
Research (CEER), (University oC Puerto
Rico)
Commonwealth oC Puerto Rico. Charles Stark
Draper Laboratory, Incorporated
Cambridge. Massachusetts, Comparative
Animal Research Laboratory (CARL)
[University of Tennessee), Oakridge.
Tennp.~s~e
.c:nvironmentalInstilute of Michigan. Ann
Arbor. Michigan
Har:ford Environmental Health Foundation.
Richland, Washington
lIT R~search Institute, Chicago. illinois
In,litute for Defense Analysis. Arlington.
Virginia
Institute of Gas Technology, Chicago, Illinoia
Midw~st Research Institute, Headquartered
in Kunsas City, Missouri
Mitre Corporation. Bedford. MassachtlBetts
Montana Energy Research and Development
Institute, Ine.. (MERDI), Butte, Montana
Na tional Radiological Astronomy
Observatory, Green Bank, West Virginia
Oakridge Associated Universities. Oakridge.
Tennessee
Project Management Corporation, Oakrldge,
Tennessee
Rand Corporation. Santa Monica. California
Research Triangle Institute. Research
Triangle Park, North Carolina
Riverside Research Institute, New York. Ne",
York
Sandia Corporation. Albuquerque. New
Mexico
Southern Research Institute. Birmingham,
Alabama
Southwest Research Institute, San Antonia,
Texaa
SRI International. Menlo Pilrk. Californla
Syracuse Rellearch Corporation. Syracuae.
New York
Universities Research Association.
Incorporated (National Acceleration Lab),
Argonne. Dlinois
Universilles Corporation Cor Atmospheric
Research, Boulder, Colorado
Nonprofit Insurance Companies such as Blue
Cross and Blue Shield Organizations
Other nonprofit organizations as negotiated
"Nith awarding agencies.
{FR Doc. 1lO-20271l FJI~ 1-7-30; 11:45 ami
IJ.lUJItG COOE 311H l-M
Editorial Corrections to
OMS A-122
OFFICE OF MANAGEMENT AND
BUDGET
Circular A-122, "Cost Principles for
Nonprofit Organizations"; Correction
AGENCY: Office of Management and
Budget.
ACTION: Final policy correction.
SUMMARY: This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 46022,
July 8, 1980).
FOR FURTHER INFORMATION CONTACT:
Palmer Marcantonio,Financial
Management Branch, Office of
Management and Budget, Washington,
D.C. 20503, (202) 395-4773.
. Page 46022, column 2 the second
Paragraph 1, change Paragraph 5
"Compensation Cor Personnel Scrviccs"
to Paragraph 6.
. Page 46022, column 2 the second
Paragraph 2, change Paragraph 6
"Contingencies" to Paragraph 7.
. Page 46022. column 3:
Paragraph 4, change Paragraph 31,
"Equipment and Other Capital
Expenditures" to Paragraph 13.
. ParagraphS, change Paragraph 26
"Meetings" to Paragraph 24.
. Paragraph 6. change Paragraph 27,
"Organization Costs" to Paragraph'26.
. Paragraph 7, change Paragraph 30
"Page charges in Professtional Journals"
to Paragraph 28.
. Paragraph 8, change paragraph 37
"Public Information Service Costs" to
Paragraph 36. .
. Paragraph 9, change Paragraph 43
"Rental Costs" to Paragraph 42.
· Paragraph 9a: in the fourth line, add
"up" between the words "only" and
"to"; in the sixth line change "they" to
"it".
. Paragraph 10, change Paragraph 51
"Travel Costs" to Paragraph 50.
I
A-122:12
. Page 46024, column 3 Paragraph
4(a)(2) after "benefits received" add ";
or".
. Page 46025, column 1 Paragraph B3,
change the reference"Paragraph 21 of
Attachment B" to "Paragraph 19 of
Attachment 8."
. Page 46026, column 1 Paragraph
4a.iii, in the sixth line, change "direct
cost" to "direct costs."
· Page 46026, column 2 Paragraph
Ele, change "e'stablishment of a rate" to
"establishment of a final rale,"
. Page 46026, column 3 Paragraph
E2b, in the third line add the following
after "a Federal agency shall"-"submit
its initial indirect cost proposal
immcdiately,"
. Page 4f>027, column 3 Paragraph
. (3)(a), change "workmen's
compensation" to "workerp'
compensation,"
. Page 46028, column 1 Paragraph
Of3(b), (the second line of column 1)
change "Workmen's compcnsation" to
"workers' compensation."
. Page 46030, .column 3, paragraph
24b" the sixth line, change "allowable"
to "aUowability".
DRniel F. MUDD,
Budget and Nfanagement Officer.
IFR Doc. 81-8073 filed 3-11>-81; 11:45 amI
BILLING CODE 311HI-M
Circular A-122, "Cost Principles for
Nonprofit Organizations"
Correction
In FR Doc. 81-20270, appcaring at
page 46022 in the issue of Tuesday, July
8, 1980, the following changes should be
made:
1, On page 4G024, column three, the
second sentence in paragraph "A.5.b.
should read, "Specifically, the concept
of nelting such credit items against!
related expenditures should be applied
by the organization in determining the
ratcs or amounts to be charged to
Federal awards for services rendered
whenever the facilities or other
rcsources used in providing such
scrvices have been ftnanced directly, in
whole or in part, by Federal funds,"
2. On page 46024, column three, the
second complete sentence in paragraph
A.5. 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 may be
trcated as an indirect cost for reasons of
practicality where the accounting
treatment for such cost is consistently
npplied to all final cost objectives."
.
Off!ce of Management and BUdg1 Circular A-122 (6/21/80)
4. On page 46025, column ODe,
paragraph B.4.f. should read, "f.
Administration of group benefits on
behalf of members or clients including
life and hospital insurance, annuity or
retirement plans, financial aid, etc."
5. On page 46025, column two, the first
sentence in paragraph 0.1.e. should
read. "The base period for the allocation
of indirect costs is the period in which
such costs are incurred and acc~mulated
for allocation to work performed in that
period."
6. On page 46026, column one, the
second sentence in paragraph 0.3.d
should read, "The costs in the common
pool shall then be distributed to
individual awards included in that
function by use of a single indirect cost
rate."
7. On page 46026, column one, the first
sentence in paragraph 0.3.e. should
read, "The distribution based used in
computing the indirect cost rate for each
function may be total direct costs
(excluding capital expenditures and
other distorting items such as major
subcontracts and subgrants), direct
salaries and wages, or o,ther base which
results in an equitable distribution."
8. On page 46026. column one, the first
and second sentences in paragraph
0.4.a. should read, "Soine nonprofit
organiza tions treat all costs as direct
costs except general administration and
general expenses. These organizations'
generally separa te their costs into thfl~e
basic categories:. . .."
9. On page 46026, the last sentence in
column one (extending to column two),
in paragraph 0.5. should read, "The
factors may include the physical
location of the work, the level of
administra tive suppor! required, the
na ture of the facilities or other resources
employed, the scientific disciplines or
technical skills involved, the
organizational arrangements used, or
any combination thereoL"
10. On page 46026, column three.
paragraph E.2.i. should read, "i. To the
extent that problems are encountered
among the Federal agencies in
connection with the negotiation and
approval process, the Office of
Management and Budget will lend
assistance as required to resolve such
problems in a timely manner."
11. On page 46030, column one, the
introductory text of paragraph 16.b, and
paragraph 16.b.(1) should icad, "b. The
costs of idle facilities are unallowable
except to the extent that: (1) They are
necessary to meet fluctuations in
workloads; or",
12. On page 46030, column one. the
second sentence in paragraph 16.c.
should read, "Such costs are allowable,
provided the capacity is reasonably
anticipated to be necessary or was
originally reasonable and is not subject
to reduction or elimination by subletting,
renting, or sale, in accordance with
sound business, economics or security
practices,"
13. On page 46031, second column,
paragraph 34.c, should read. "In addition
to the factors in paragraph b. above,
retainer fees to be allowable must be
supported by evidence of bona fide
services available or rendered."
~ILUNG CODE 150!Hll-N
I
A-122:13
"