AGREEMENT FUNDED UNDER THE CLEARWATER COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM (3)
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AGREEMENT FUNDED UNDER
THE CLEARWATER COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
THIS AGREEMENT is ent.ered into as of the lst day of
October, 1990, by the CITY OF CLEARWATER, Florida, a political
subdivision of the State of Florida, hereinafter referred to as the
"CITY", and YOUNG WOMEN'S CImISTIAN ASSOCITION OF ST. PETERSBURG
as further identified in Appendix A, hereinafter referred to as the
"PSA". This Agreement consists of this document and the Appendices
attached hereto.
WHEREAS, the City has agreed with the United States Department
of Housing and Urban Development to conduct a Community Development
program, hereinafter referred to as the "Program", with federal
financial assistance under Title I of the Housing and Community
Development Act of 1974, as amended, hereinafter called the "Act",
and
WHEREAS, the City of Clearwater Planning & Development
Department, hereinafter called the "Department", will act in behalf
of the City in conducting the Program, and
WHEREAS, the PSA provides a program as identified in Appendix
A of benefit to low and moderate income residents within the City
of Clearwater and proposes to perform the work and carry out the
specif~c services as identified in Appendix A, hereinafter referred
to as the "Project", and desires federal financial assistance
through the City to effect this proposal, and
WHEREAS, the City finds the project to be meritorious and in
fulfillment of the purposes of the Act;
THEREFORE, the parties agree as follows:
1. The PSA shall, in a satisfactory and proper manner as
determined by the Department, conduct the Project outlined in '
Appendix A.
2. The term of this Agreement shall commence on October 1,
1990, and terminate on September 30, 1991, unless earlier cancelled
as provided herein. The Agreement may be extended for up to one
addi tional year upon the request of the PSA and the written
authorization of the City Community Development Manager. The need
and merit shall be at the determination of the Manager. The
Department may issue written or oral instructions to clarify any
other details or provisions of this Agreement. Such instruction
must be within the intent of the project and not be of such nature
to affect cost or period of performance.
3. The City representative to PSA as regards conduct of
services under this contract shall be the Community Development
Manager. The PSA's services shall be carried out under the
supervision of the Agent as identified in Appendix A.
4. The PSA shall not exceed its budgeted amount and shall use
the funds in accordance with the award to be paid with Community
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Development Funds included in Appendix B. Funds shall not be
obligated when payment has been suspended or terminated pursuant
to paragraph 19 hereof. Any funds which the Department determines
were not properly expended shall be refunded to the City.
5. The PSA shall comply with the provisions of OMB Circular
A-110, provided in Appendix G, and with the provisions of OMB
Circular 122, provided in Appendix H, or the appropriate successors
documents of these documents. The PSA shall permit the City to
audit the PSA's financial operation including but not limited to
compliance with applicable provisions of Federal law and
regulations. All PSA financial records relating to the Project are
subject to review by the City.
6. All subcontractors under this Agreement shall be approved
by the City.
7. All purchases of consumable materials, capital equipment
and services shall be in conformity with the Procurement Standards
set forth in OMB Circular A-IlO, Attachment O. Accountability for
project property and equipment shall be in accordance with the
requirements therein set forth.
8. The City agrees to make payment of budgeted costs on a
reimbursement basis. Requests for payment shall be as specified
in Attachment B. No advance payments shall be made to the PSA.
All costs and invoices for requests for payment shall be supported
by properly executed payrolls, time records, invoices, contracts,
or vouchers, or other official documentation evidencing in proper
detail the nature and propriety of the charges. All checks
payrolls, invoices, contracts, vouchers, orders or other accounting
documents pertaining in whole or in part to the Agreement shall be
clearly identified and readily accessible. The final request for
reimbursement hereunder shall be submitted within 30 days after
completion of all services to be performed by the PSA and the City
shall not be responsible for payment of any charges, claims or
demands hereunder not received within said thirty day period.
9. The PSA shall upon the expiration of this Agreement
transfer to the City any CDBG funds on hand and any accounts
receivable attributable to the use of CDBG funds. Program income
funds are excluded from this provision as provided below.
Program income funds shall be retained by the PSA so long as
the activities that will be undertaken with the program income are
the specific activities that meet the provisions of this Agreement.
These funds shall be adjusted by the City according to the
principles described in paragraphs (b)(2)(i) and (ii) of Section
570.504 of the Housing and Community Development Act 1974, as
amended of which state that:
(1) Program income in the form of repayments to, or interest
earned on a revolving fund as defined in Section 570.500(b) shall
be substantially disbursed from the fund before additional cash
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withdrawals are made from the U.S. Treasury for the same activity.
(2) Substantially all other program income shall be disbursed
for eligible activities before additional cash withdrawals are made
from the U.S. Treasury. 10. The City shall retain custody upon
termination of this Agreement of any and all property purchased
with Community Development Funds. "Property" as used in this
Paragraph shall mean nonexpendable tangible property valued at $200
or more with a remaining life expectancy of one year or more. The
PSA shall retain custody of property acquired with federal funds
so long as the property is used for the purposes described in
Appendix A. When no longer used for such purpose, the City shall
assume custody of the property upon written notice to the PSA.
Upon purchase and receipt of property, the PSA shall submit to the
Department a Property Receiving Report. Stolen, lost or returned
property shall be reported immediately to the Department. Thirty
days prior to the end of the grant year or immediately upon
termination of this Agreement, the PSA shall submit in a Property
Report a physical inventory of all property purchased with
Communi ty Development Funds. The report shall also contain a
verification of the existence and current used and location of the
property, and, if applicable, the continued need for the property.
No real or personal property or custody thereof, purchased with
funds provided to the PSA under this Agreement, shall be disposed
of, transferred, assigned, or loaned by the PSA without prior
written consent of the City.
11. Any real property under the PSA's control that was
acquired or improved in whole or in part with CDBG funds in excess
of $25,000 must:
(1) Be used to meet one of the national objectives in Section
570.901 of the Housing and Community Development Act of 1974 as
amended until five years after expiration of this Agreement, or for
such longer period of time as determined to be appropriate by the
City; or
(2) Disposed of in a manner that results in the City being
reimbursed in the amount of the current fair market value of the
property less any portion of the value attributable to expenditures
of non-CDBG funds for the acquisition of, or improvement to, the
property. (Reimbursement is not required after the period of time
- specified in paragraph (b)(8)(i) of Section 570.503 of the Housing
and Community Development Act of 1974, as amended.
12. Nothing in this Agreement shall be construed to permit
invasion of the privacy of individuals who are served by the
project, nor shall this Agreement be construed to require the PSA
to publish or release information to third parties which would
invade the privacy of such individuals. Information obtained by
the Department as required by this Agreement shall not be used or
disclosed in such a way as to invade individual privacy and client
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relationships, unless Florida law pertaining to public records
requires public inspection of records containing said information.
13. The PSA shall obtain prior written approval by addendum
to this Agreement for any of the following changes:
a. Substantial changes in the project work plan.
b. Changes in any budget line item.
14. The PSA agrees to fully participate in the implementation
and maintenance of an evaluation system to continually monitor the
project. This shall include, but not be limited to, periodic
submission of data reports which will be used by the Department for
inclusion in the Annual Grantee Performance Report, periodic
moni toring visits by the Department for conformance with this
Agreement, and continuing assessments of performance hereunder.
PSA agrees to comply with evaluation and information requirements
of the Department. A final report shall be submitted by the PSA
within 30 days after the end of the contract term. This final
report shall consolidate reporting of all project participants.
15. PSA shall establish and maintain on an accrual basis an
accounting system in accordance with the Standards of Grantee
Financial Management System as set forth in OMB Circular A-lID or
the appropriate successor document and in accordance with generally
accepted accounting principals and standards where these principals
and standards are not in conflict with A-lID or its successor. PSA
agrees to modify or correct said systems in accordance with the
City's requirements.
16. PSA shall maintain such records and accounts as are deemed
necessary by the City to assure a proper accounting for all project
funds. All such records shall be available for audit, inspection or
copying purposes at any time during normal business hours and as often
as the City, HUD, or representatives of the Comptroller General of
the United States, or other federal agency, may deem reasonably
necessary. Such records shall be retained for such period as required
by applicable laws and regulations and may thereafter be destroyed only
wi th the prior written approval of the City. Such records shall
include financial records, audits, supporting documents, statistical
reports and client files. PSA will comply with such additional
requirements as to maintenance of records as the City may request in
writing. In the event the PSA cannot continue to be responsible for
maintenance of the records, then the City shall be so notified in order
to take custody of the records. The City may, at any time, on written
notice to the PSA, take custody of any and all records established
under this Agreement.
17. The PSA shall hold and save the City, its officers, agents,
and employees harmless from liability of any nature or kind, including
costs and expenses, for or on account of any suits or damages of any
character whatsoever resulting from injuries or damages sustained by
any persons or property resulting in whole or in part from the
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negligent performance or omission of the PSA or any employee, agent
or representative of the PSA.
18. The PSA shall not assign this Agreement or any interest of
the PSA in this Agreement without the prior written consent of the
City.
19. The City may suspend, withhold, or terminate payment of the
project, in whole or in part, for cause or convenience. Cause shall
included the following:
a. Use of funds that does not follow project guidelines.
b. Failure to comply with any term or condition hereunder.
c. Refusal to accept conditions imposed by HUD.
d. Refusal to accept conditions imposed by the City.
e. Submittal of reports which are incorrect or incomplete in
any material respect.
f. If carrying out this Agreement is rendered impossible
or infeasible for any reason including changes in law
or the unavailabili ty of HUD funds necessary for
continuation.
g. Convenience shall be according to the regulations in 24 CFR
85.43 and 85.44.
If the City suspends payment, it shall advise the PSA and specify in
writing the reason for suspension of payment, the actions that must be
taken as a condition precedent to the resumption of payment, and a
reasonable date for compliance.
20. Both parties will use their best efforts to ensure that
services under this Agreement are provided so as to best meet the
needs of residents with priority to those residents who reside in the
Community Development target areas. The PSA shall make every effort
to assure that a minimum of two-thirds of those persons receiving
services hereunder are low and moderate income.
21. No person with responsibilities in the operation of the
project will discriminate with respect to any project participant
because of race, color, national origin, or sex. No participant shall
be excluded from participation in, be denied of, or be subjected to
discrimination under any program of activity funded in whole or in
part with Community Development Funds because of race, color, national
origin or sex, as set forth in Other Program Requirements in Appendix
D , (CFR 57 0 . 601 ) .
22. The PSA will establish safeguards to prohibit employees from
using their positions for a purpose that is or gives the appearance of
being motivated by a desire for private gain for themselves or others,
particularly those with whom they have family, business or other
identifiable ties. Prio~ to requesting any continued project funding
beyond the term covered by this Agreement or for a new public services
not covered by this Agreement, the PSA shall attempt to secure other
local, state or federal funding and/or private funding for such
project. The PSA shall not as a result of receiving funding for the
Project reduce its support for other similar services already being
provided by the PSA in the area of its operation, and will
affirmatively seek additional assistance and support from other
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sources for increasing services where needs demand such increase. The
PSA will not use these funds for publicity or propaganda purposes
designed to support or defeat legislation pending before federal,
state or local governments.
23. The PSA shall comply with the requirements of Section 3 of
the Housing and Urban Development Act of 1968, as amended, and the HUD
regulations issued pursuant thereto, attached hereto as Appendix E.
24. The PSA will comply with Equal Employment Opportunities
Executive Order 11246, as amended, attached hereto as Appendix F.
25. The PSA will comply with applicable federal law and
regulations, including but not limited to:
National Environmental Policy Act of 1969;
Flood Disaster Protection Act of 1973;
HUD Implementation of the Lead-Based Paint Poisoning
Prevention Act;
Clean Air Act;
Historic Preservation Requirements of P.L. 89-656
Archeological and Historic Preservation Act of 1974;
Executive Order 11593;
Architectural Barriers Act of 1968;
Hatch Act;
Federal Water Pollution Control Act;
Federal Labor Standards provisions and the Davis-Bacon Act;
The Civil Rights Act of 1964;
National Flood Insurance Program;
all as amended from time to time and in effect during the term this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
YOUNG WOMEN'S CHRISTIAN ASSOCITION OF
ST. PETERSBURG
~~
By . - r1/)~
~ President
ATTEST:
~-~
Countersigned:
CITY OF CLEARWATER, FLORIDA
Rita Garvey
Mayor-Commissio
- !2 '7!-
#J
Ron H. Rabun
City Manager
By
ATTEST:
. - - - ~
.-
Approved as to form &
Cl~ C .~;'.~P. ~::
~ :: C~)l.ia GOU~89.l,l
correctness: ---::::_ City. "Clerk c:'::: ~
,.;,;,..- - .
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.. - - .. - -' '.
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Agency: YWCA of St.
Petersburo
Year: 1990 - 1991
APPENDIX A
Identification of Agency and Specific Services to be Provided
AGENCY
Name:
Young Women's Christian Association of St. Petersburg,
Florida
Legal classification:
A non-profit corporation organized and existing under
the laws of the State of Florida.
655 Second Avenue South, St. Petersburg, Florida 33701
Principal Office:
Ma il i ng Addres s :
Agent:
814 Franklin Street, Clearwater, FL 34616
Gwen Claxton, Program Director
813-461-2997
813-896-4629
PROGRAM OF AGENCY
The YWCA is a multi-purpose human service agency providing a variety of
educational, developmental, and social services for all ages, races, and
religious backgrounds. The Project H.E.L.P. (Health, Education and Life Skills
for Pregnant Adolescents) program provides coordination for delivery of health
education and social services to pregnant adolescents in Pinellas County,
especially remediation and tutorial work to pregnant and parenting adolescents
who have dropped out of school or who have been identified as potential dropouts.
It provides services to the adolescent, to the infant and to the putative father.
It provides educational activities addressing responsible sexuality and
parenting.
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SPECIFIC SERVICES TO BE PROVIDED UNDER THIS AGREEMENT
I. Y.W.C.A. of St. Petersburg - Project H.E.L.P.
Funds will be provided to the Y.W.C.A. of St. Petersburg to purchase and
install approximately 63 linear feet by 8 feet partitions. The movable walls
are being purchased and installed to meet the licensing requirements which
require a separate room for each group with floor to ceiling walls. The wall
will separate the infants from the classrooms and provide room for six infants.
SCHEDULE
I. YWCA of St. Petersburg - Project H.E.L.P.
General Statements
A. Program shall begin operation no later than October 1, 1990, or one month
after the full execution of this Agreement.
B. Funds for this project shall be expended by April 30, 1991. Any request
for an extension will have to be approved by the Community Development
Manager.
C. Monthly activity reports shall be forwarded to the City by the Agency
on a monthly basis and shall reflect program activity from the previous
month. These reports shall be forwarded to the City no later than the
15th of the end of the previous month. Reports shall be forwarded for
the entire term of the agreement which covers October 1, 1990 through
September 30, 1991.
D. Construction activity shall begin no later than May 1, 1991.
E. Special Data requests will be responded to within 15 calendar days,
subject to the request being of reasonable limited scope.
F. Records will periodically be viewed by the City to verify reimbursement
accuracy and as part of the yearly monitoring process.
G. Payment will be in accordance with the payment schedule identified in
Appendix C.
H. At no time shall payments be forwarded to the agency by the City the
agency has not satisfactorily completed the tasks identified in this
agreement.
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Agency: YWCA of St. Petersburo
Year: 1989 - 1990
APPENDIX B
Project Award
YWCA of St. Petersburg Project H.E.L.P.
Facility improvement support of up to $2,000.00 will be provided to
the YWCA of St Petersburg - Project H.E.L.P. Program. The funds shall be used
to purchase and install a movable wall at . the Clearwater Project H.E.L.P.
Center.
BUDGET
YWCA of St. Petersburg
Project H.E.L.P.
October 1, 1990 - September 30, 1991
CDSG
YWCA
TOTAL
Construction
Purchase and installation
of movable walls
$2,000
$3,104
$5,104
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APPENDIX C
METHOD OF PAYMENT
All payments shall be on a reimbursement basis only.
All requests for reimbursement for salaries shall be supported by a copy of the
checks paid to employees and other documentation as requested. Payroll and other
support documentation must be kept by the agency in an appropriate file.
All requests for reimbursement for purchases shall be supported by a copy of the
invoices and a copy of the check paid to the supplier. Other support
documentation shall be kept by agency in an appropriate file.
All requests for reimbursement for construction projects shall be supported by
a copy of the check paid to the contractor and a copy of a progress or' Iinal
payment affidavit, whichever is appropriate. Payroll data for Davis Bacon related
projects and other source documentation shall be kept ,by the agency in an
appropriate file.
All requests for reimbursement shall be certified by the agency's designee that
they are accurate and within the guidelines of the agreement.
All requests for reimbursement shall be forwarded to the City of Clearwater
Planning and Development Department, P.O. Box 4748, Clearwater, Florida 34618.
Any program income shall be submitted to the CITY through the DEPARTMENT at least
quarterly. Fees collected, if any, shall be reported but are not to be construed
as program income.
Requests for reimbursement shall not be reduced by any program income received.
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Subpart K--Qther Prooram
Requirements
I 570.&00 Gener.I
(u) Section l04(b) t! Ule Acl provides
Ihol an)' grant under Bection lOG oC the
Act 6ho.1I be r.. .... nly if U1e gronlee
ccrtifiea'to the slllisfoction of the
Secrc"lry, among other uling!. tho. I the
grant "will ~e.conducled and
administered in conformity wilh Pub. 1-
68-352 and Pub. L QO-2lH," and. furlher.
tho.l Lbe granlee "will comply with the
other provisiona oC Ihis title and wilh
other applicable laws:: Section l04(d.)(l)
oC Ihe Act requires thai the Secrelary
dt:lermine with respect 10 grants made
pursuant to section l06(b) (Entitlement
Grants) and 106(d)(2)(B) (HUD.
Administered Small Cities Grants). 0.1
leasl on an aMual basis. among olher
Ihings. "whelher the gran lee haa carried
out (itaJ certifications in compliance
wilh lhe requirements and lhe primary
objectives oC this Litle and wilh other
applicable laws' . . ." Certain other
statules ar-e expressly made applicable
10 activities assisted under the Act by
Ihe Act itself. while oLbf.'.r laws not
reCerred 10 in the Act may be applicable
to auch activities by lheir own tenns.
Certain atallltes or E.xecutive Orders
which may ve applicable to activitiea
assisled under the Act by Lbeir own
tem; are administered or enforced by
governmental departmenu or agencies
other than the Se.cret8Jj' or the
DepartmenL This Subpart K enwneratea
laws which the Secretary will treat as
applicable 10 grants made under section
106 of the Act. olher th~ grants to
.-,\ APPENDIX D
OTHlR PROGRA..loo1 REQUlRE~IENTS
Slates made pursuant to section lOG(d)
of the Act. for purpOSeI 01 the
delerminations described abon to be
made by the Secretary under section
l04(d)(l) of the Act. including slatules
expressly mode IIpplicable by the Act
and certain other statutes and Executive
Orders Cor which the Secretary hu
enfClrcement responsibility. The absence
of mention herein of IIny other statute'
for which the Secrelary docs not have
direct enforcement responsibility ia not
intended to be token as ao indication
Ihot, in the Secretary'a opinion. such
statule or Executive Order Is not
IIppliCllble to IIctivilies aasiated under
the Act. For lows which the Secretary
willlreat as IIpplico.ble to grants made
to States under section l00(d) oC the Act
for purpuses of the dete~ination
required to be Inade by the Secretary
pur8uantto section l04(d)(Z) of Ihe Act.
see I 570.495.
(b) This Subpart also seta forth certain
additional program requirements which
the Secretary has determined to be
applicable to grants provided under lhe
Act as a malter of administrative
dIscretion.
(c) In addition to granta made'
pursuant to section 106(b) and
l00(d)(Z)(B) of the .A,ct (Subpart. 0 and F
of thia Part. respecliJ'ely). the .
requirements of this Subpart K are
applicable to grants' made pursuant to
sections 107 and 119 of the Act
(Subpart. E and G. respectively).
f 570.601 Pub. L 118-352 and Pub. L 9()-
2804; Executive Order 11063-
Section l04(b) of the Act provides lhat
any grant under seclion 106 01 the Act
shall be made only iI the grantee
ce'rtifies 10 \.he satislaction of the
Secretary that the granl "will be
conducted and IIdminislered in
conlonnily wiLb Pub. 1- 88-352 and Pub.
L ~Z84. .. Similarlv. sectioD 107
provides that no grint may be made
D-l
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under thai .eclion (Secretary'.
Discretionary Fund) or .eclion 119
(UDAG) ",oithoutuliafactory usurance,
to' the same effect.
(a) "Pub. 1- ~5Z" rden \0 Tille VI
oC Ihe Civil Rlghts Act oC 1004 (0(2 U.S.C.
2ooo<f et ,eq.), which provides that no
penon In the United Slain shall on the
ground of race. color. or oational origin.
be excluded (rom participation In. be
denied the benefita of, or be subjected 10
discrimination under any program or
acllvtty rcceivlng Federlll finonclal
lIuistancs. Seclion 602 of the Civil
Rights Act of 1904 direct. ellcb Federal
depl1Ji.ment and IIgenc)' empowered to
extend Fedel"11l financilll auistance to
any progro.m or IIctivity by WII)' of granl
10 eHectuo.le the foregoing prohibilion
by issuing rules. regulations, or orden of
general orpllcllbilily which Ihall be
consilient with IIchicvemcnt of the
'. statute lIuthori:.in,; the financial
lIS.siltance. HUt) regula lions
implementing the r-equiremenls of Tille
VI with respect to HUn programs are.
contained in 24 ern Part 1. .
(b) "Pub. 1- 90-U).4" reIers to Tille VlI1
of the Civil Rights Acl of 19& (42 U.S.c.
3001 ~t seq.). popularl)' known as Ihe
Fair Housing Act. which provides thai it
is the polic)' of the United Sla tea 10
pro\'ide. within constitutional
limilaliona. for fair housing throughout
theUniled States and prohibits any
penon [rom cil.criminating in Ihe sale or
rental of hou.ing. the financing of
housing. or the provision or brokerage
services. lncluding in any WilY making
unavllilable or denying a dwelling 10
any.penon. because oC race. color.
religion. sex. or nalional origin. Tille
VIII [urlher requires the Secretar)' to
administer lhe programs and aClivities
relating to housing and urban
dcvelopmentln a manner affirmalively
to further the purposes of Tille VllI.
PutBuanlto this slatutory direction. the
Secretary requires that grantees
adminiater all program a and actiyilies
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relo led to housing ond community
devclopml!nt in a manner 10
aIfirmtllively further fllir housing.
(c) Executive Order 11003. as
amended by Executive Order 12259.
direcII the Department 10 loke all action
nece85ary and appropriate to prevent
discriminulion because of race. color.
religion (creed), sex. or niltional origin.
in the sole. leasing. rental. or other
disposition of residentiul property and
rein ted facilities (including land to be
developed for residenlial use). or in the
use or occuponcy lhereof. if such
properly ond rclated fncililies are.
omong other things. provided in whole
or in part wilh lhe lIid of loans.
advances, granls. or conlrihutions
II Rrce'd.to be mOl de b)' the Federal
Govcrnment. HUD regulations
implementing Execulivc Order l100J are
contained in 24 CFR Port 107,
~ 570.602 Socllon 109 01 Ita Act.
(a) Section 1~ of Ihe Act requires thai
nO person in lhe United Slates sholl on
the ground of race. color, nalional origin
or sex. be excluded from participation
in. be denied the benefits of. or be
subjected to discrimination under. any
program or activity funded in whole or
in part with community development
funds made available pursuant to Ihe
Al:t. For purposes of this seclion
"program or activit~'" is defined as any
function conducted by an identifiable
administralive unit of Ihe recipient. or
by any unit of government. subrecipient.
or privale conirlJctor receiving .
cornrnunily developmenl funds or 10lJns
from the recipient. "Funded in whole or
in part with community dev'elcpmenl
funds" means that community
development funds in a:1)' amount in Ihe
form Qf grants or proceeds from HUD .
guaranteed loans have been. transferred
by the recipient or s subrecipientto an
identW(jble sdminislTSth'e unit and
disbursed in a program ::r activity,
(b) Specific discriminolory oclio1Js
prohibiled and correclil'e actions.
(1) A recipienl may not. under any
program or acth'ity to which the
-~\
regulalion3 of thi3 Part may spply
direCII)' or lhroufh contractua: or other
IIrrangrments. on the ground of rllce.
colllr, national origin, or sex:
(il Deny all)' f~lciljtie3, servicl:s,
financial aid or other benefils pro\'ided
under Ihe program or activity,
(ii) I'ro\'ide on}' f:Jcililies. services.
financial aid or other bendils which are
different. or ore provided in a differenl
form from thut provided to others under
the program or activity,
(iii) Subject 10 3p.gregated or seporate
Ireatmenl in any fucilily in. or in any
mailer of process relalgd 10 receipt of
any service or benefil under lhe program
or activity.
(i\') Re:llrict in any way access 10. or
in the enjoymenl of ony advanlage or
privilege enjoyed by othen in
cOMcction with facilities, services.
finlJncial oid or other benefits under the
progrllm or activity.
(v) Treat an individual differenlly
from othen in determining whelher the
individual satisfies any admission.
enrollment. eligibility. membership. or
other requirement or condition which
the individuol must meet in order to be
provided any facilities. services or other
benefit provided under the program or
activi:v. .
(\'i) Den)' an opportunity to participate
in a program or activity as an employee.
(2) A recipient ma}' not utilize criteria
or methods of administration which
have the efCect of 3ubjecling individuals
to discriminalion on the basis of race.
color. nalional origin. or sex. or have the'
effect of defeating or subslantially
impairing accomplishment of the
objectives of the program or activity
with respect to individuals of a
particular race. color. nalional origin. or
se~
131 ^ recipient. in determining the site
or location of housing or facililie3
provided in whole or in pari with funds.
under this part. may not make selection,
of such site or 10clJtion which have the
effect of excluding individuals from.
denying them the benefits of. or .
subjecting them to discrimination on Ihe
:5-2
l
ground of race. Clllor, national oriSin. (If
sex: or which have the purpo~e or errect
of defloalinll or subslantially impairing
the acc:umplishmenl of the objectives cf
Ihl: Act and of Ihi3 scCtion,
(4)li) In administering a program or
activily funded in whole or in part wilh
CDIJG funds regardin!! ....,hich the .
rccipient has previously discriminuted
ag.1inst persons on the ground or race.
color. nutional origin or sex. the
recipient must tuke affirmative aclion to
ovcrcome the effccts of prior
discrimination.
(ii) E\'cn in the absence of 6uch prior
discriminalion. a rccipicnt in
administerin!! 8 program or oclivily
funded in whole or in part wilh CDI3G
funds should tuke offirmali\'e Bction \0
overcome the clfect, of condilions
which .....ould otherwise resull in limiling
participatiun by persons of a particular
race, clllor. nalional origin or ,ex,
Where previous discriminatory practice
or uSRge tends. on the ground of race.
color. nalional origin or sex, to exclude
individuals from participalion in. 10
deny lhem Ihe bl::nefils or. or to ,ubj.ecl
them to discrimination under any
program or activity to which Ihis pari
applies. the recipient has an obligstion
to take reasonable action to remove or
overcome the consequences of the prior
discriminatol')' prlictice or usage. and \0
accomplish the purpose of Ihe Act.
(iii) A recipient shall not be prohibited
by thi, part from taking any acUon
eligible under Subpart C 10 ameliorate
an imbalance in services or facilities
provided to any geographic area or
specific group of persons wilhin its
jurisdiction, where .the purpose of such
aclion in to overcome prior
discriminatory practice or usage.
(5) Notwilhslonding anything 10 the
contrary in this seclion. nothing
conlained herein shall be conslrued to
prohibit an)' rli.cipient from maintaining
or constructing separate living facHitie,
or rest room facilities for'the difierenl .
sexes. Furthermore. selectivil}' on the
basis of sex is not prohibiled when
instilulional or custodia) serVices can
I
'1 APPEND IX E
SECTION 3 CLAUSE
I
,
THE FOLLO'WING SECTION 3 CLAUSE SHALL "SE INCLUDED IN ALL CONTRACTS FOR \.lORK IN
CONNECfION \.lITH A SECfION 3 PROJECT:
A. The work t.o be performed under this contract. is on a project assisted
under a program providing direct Federal financial assistance from
the Department of HousinK and Urban Development and is subject to the
requirement.s of Section 3 of the Housing and Urban Development Act of 1968,
as amended, 12 U.S.C. 170u. Section 3 requires that to the greatest extent
feasible opportunities for training and employment be given lower income
residents of the project. area and contracts for work in connection wit.h the
proj ect be awarded to business concerns which are located in, or ovned in
substantial part by persons residing in the area of the project.
B. The parties to this contract will comply with the provisions of said Section 3
and the regulations issued pursuant thereto by the Secretary.of !lousing and
Urban Development set forth in 24 CFR, and all applicable rules and orders of
the Department issued thereunder prior to the execution of" this cont ract. The
parties to this contract certify and agree t.hat they are under no contractural
o~ other disability which would prevent them from complying with these
requirements.
C. The contractor will send to each labor organization or representative of
workers.with which he has a collective bargaining agreement or other contract
of understanding, if any, a notice advising the said labor organization of
workers' representative of his commitments under this Section 3 Clause and
shall post copies of the notice in conspicuous places available'to employees
and applicants for employment or .training.
D. The contractor will include this Section 3 Clause in every subcontract for
work in connectiqn with the project and will, at the direction of the
applicant for or recipient of Federal financial assistance, take appropriate
actiort pursuant to the subcontract upon a finding that the ~ubcontractor is
in violation of regulations issued by the Secretary of Housing and Urban
Development, 24CFR. The contractor will not subcontract with any subcontractor
where it has notice or knowledge that the latter has been found in violation 'of
regulations under 24 CFR, and will not let any subcontract unless the
subcontractor has first provided it with a preliminary statement of ability to
comply with the requirements of these regulations.
E. Complian~e with the provisions of Section 3, the regulations set forth in 24 eFR,
and all applicable rules and orders of the Department issued thereunder pdo:' to
the execution of the contract, shall be a condition of the Feder!l financial
assistance provided to the project, binding upon the applicanc or recipient for
such assistance, its successors, 'and assigns. Failure to fulfill these
requirements shali subject the applicant or reci~ient, 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
NOT!C~ 0:1 _~U!~~h~ rOR ArrIR~TIVE ACT}
TO ENSURE EQUAL EMPLOYMENT OPPORTUNITY
(EXECUTIVE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "~q\Jal Oppor"tunity
Clause" a.nd tl'le "5 t.a..nda..rd Federal EqU41 E:nploymen t Oppor"tu:u. ty Cons t..rUc-
tion Con~act Specifications" set forth herein.
2. The goals and timetables for minority and female participation, expressed
in percentage ter=s for tl'le Contractor's aggregate workforce in ea.ch
trade on all const.."""Uction work in the covered a.rea, are as foll0\0'8:
A. Goals for Female Utilization, All T~ades:
AREA COVERED
Goals for Women apply nation~ide.
GOALS AND 'T!METABLES
Time t.abl e
Goals
(percent)
F~om ~..pr. 1, 1978 until Mar. 31, 1979.... 3.1
From Ap~. 1, 1979 until Mar . 31, 1980... . 5.1
From Apr. 1, 1980 until Mar. 31, 1981. . . . 6.9
B. Goals for ~~noritv Utilization:
TAMPA- ST . PE:T:::P.5StJRG, FLA., AR!:A
Area covered: ?~llsboro\J;h, Pasco, and Pi~e11as
Counties, Fla..
Goals and Timetab1esl
Trade
Goal
(percen t)
..
All. . . . . . . . . . . . . . . . . . . . . . . . . .
17.9-
lFor ~e life of the project.
These goals are applicable to all the Contractor's const.."""Uction work
(wheL~er or not it is Federal or federally assisted) performed in the
covered area.
The Contractor's co:pliance wi~ the Exec~~ve Order and ~~e regulations
in 41 O'R Part 60-4 shall be based on its implementation of L~e E:qual
O?port~~ity Clause, specific affirmative action obligatior~ reauired by
F-l
t.~e specifications ~e"C fort..'"l in ~l C!'R 60-4. J (a), al ':.5 efforts co :;-,eet
the g041s established for the geographical area ~he_e ~~e contract
resulting from this solicitation is to be performed. The hoc:S of ~~nority
and female emplo~nt and c:aioiog must be substantially ~~iform throughout
the length of the contract, and in each trade, and the cont:actor shall
cake a good fait..~ effort to employ ~~norities and women evenly on each of
its projects. The transfer of llIinori t=y or female employees or trainees
from Contractor to Contractor or from project to project for t.~e sole
purpose ~f meeting the Contractor's goals shall be a violation of the
contract, the Executive Order and the regulations in 41 CFR Part 60-4.
compliance with t..~e goals ~ill be measured against the total work hours
per:f0 t'1I1ed .
3. The Contractor shall provide ...-ri tten notification to the Director 0: the
Office of Feder~ Contract Compliance Programs within 10 working days of
award of any const.rUction subcontract in excesS of $10,000 at any tier
for constrUction work under the contract resulting from d.is solicitation.
The notification shall list t..~e name, address and telephone number of the
subcontractor; employer i~entification number; estimated dollar amount of
the subcontract; estimated starting and completion dates of the subcontract1
and the geographical area in ~hich the contract is to be perfor:ned.
4. As used in this Notice, and in the contract resul 'Cing f=om this solici ta t.ion,
the "covered area" is pinellas Coun-cy,. :lorida.
60-4.3 (a)
EQUAL OPPORTUNITY CLAUSE
During the performance of this contrac'C, the contractor agrees as follows:
1. The contractor will not discrilllinate agains'C.any employee 0= applicant
for employment because of race, color, religion, sex, or national o=igin.
The contractor will take affi=mative a~tion to er.sure t..~at applicants are
employed, and that employees a=e tzeated during emplo~en~ wi~~out regard
to their race, color, religion, seX, or national origin. Such ac'Cion shall
include, cut not be limited to the following: Employment, upgrading,
demotion, or transfer; recruit::nent or recruit;nent advertising: layoff or
terminati~n, rates of payor other forms of comper.sation: and selection
for t:aining, including apprenticeship. The cont=actor agrees to po~~
in conspicuous places, available to employees and applica.n~S for ~ploy-
men'C, notices to be provided se'Cting forth the provisions of this non-
disc=imina'Cion clause.
2. The con 'CIa c toI:' will, in all solicitations or adve.rtise.rlents for employees
placed by or on behalf of the contractor, state ~~at all aualified
. .
applicants will receive consideration for em?loyment without regard to .
race, color, religion, sex, or national origin.
3. The contractor will send to each labor union or representative of workers
with which he has a collective bargainir.g agreement or other cont:act or
~derstanding, a notice to be provided advising the said labor union or
workers' representatives of the.contractor's co~~ents under this
section, and shall pos'C copies of ~~e notice in conspicuous places avail-
ab~e to employees and acolicants for em-olovment.
-- - .
F-2
c
h \
'!'he cont.=act.or ....illl.:~~t'lY Io'i~~ all provisions of EXl ~ive Order 11246
of September 24, 196 , and of the rules, regulations and relevant orders
of the Secretaxy of Labor.
S. The contractor will furnish all information and report.s required by
Executive Order 11246 of Septeu~er 24, 1965, and by rules, regulat.ions,
and orders of ~~e Secretary of Labor, or pursuant theretD, and will pe~t
access to his books, records, and accounts by L~e a~~nist.ering agency
and ~~e Secret.ary of Labor for purposes of investigation tD ascertAin
compliance with such rules, regulations, and orders.
6. In the event of the contractor's non-compliance wi~~ the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or
orders, this contract may be canceled, terminated, or suspended in whole
or in part and the contractor may be declared ineligible for further
Goverr~ent 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. i'he cont=act.or .....ill include ~~e portion of the sentence i.I::::nedia tely
preceding paragraph (1) and the provisions of paragrap~~ (1) ~~ough (7)
in every subcontract or purchase order unless exempted by rules, regula-
tions, or orders of the Secretary 'of Labor issued pursuant to section
204 of ~xecutive Order 11246 of September 24, 1965, so that such provisions
will be binc.ing upon each subcontractor or vendor. The cont=act=r will
take such action with respect to any subcontract or purchase order as
~~e administering agency may direct as a means of enforcing such provisions,
including sanctions for non-compliance: Provided, however, That in t~e
even~ a cont=actor becomes involved in, or is threatened with, litigation
.....ith a $ubcont=actor or vendor as a result of such direction by the
administering agency, the contractor may request the United Stat.es to enter
into such litigation to protect the interes~ of the United States.
S'!ANDJ..RD F!'DE.~.L EQUAL D-!PLOYM-~T OPPORTUNITY CONSTRUCTION CO~"I'RACT
S?EC~ICATIONS (EXECUTIVE ORDER 11246)
1. As used in these specifications:
a. "Covered area" means ~~e geog=aphical ~ea described in ~~e solicita-
tion fro:n which this contract resulted.
b. "Director" means Director, Otfice of Federal Cont:=act Complia..~ce
Programs, United States Depar~nt of Labor, or any person eo who~
the Director delegates authori~.
c. ":E:!l:ployer identification nu:mber" means the Federal Social Securi ~
n~~er used 00 ~~e Employer's Qua=terly Federal Tax Retu.-n, U. S.
Treasury Depar~ent Fo=:n 941.
d. "fo'..inori t:y " in c 1 udes :
F-3
"
(1) Black (all ~rsons having origins in any of I~~ 8lack
African racial groups not of Hispanic origin~;
(2) Hispanic (all persons of Hexic~, Puerto Rican, Cuban,
Central or South American or other Spanish Culture or
origin, regarcless of =ace) I
(3) Asian and Pacific Islander (~ll persons having origins
in any of the original peoples of ~~e far East, Southeast
~sia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or ~laskan Native (all persons having
origins in any of ~~e original peoples of Nor~ America and
maintaining identifiable tribal affiliations ~~rough member-
ship and participation or community identification).
2. Whenever the Contractor, or any Subcontractor at any tier, subcontracts
a portion of the work involving any const.-uction trade, it shall
physically include in each subcontract in excess pf $10,000 theprovi-
Sfons of 'these specifications and the Notice which concalns ~~e ~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
Hometo~.Plan approved by ~~e C. S. Depar~ent of Labor in the covered
area either individually or ti1rough an association, its af:innativeaction
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 Horneto~
Plan. Each Contract.or or Subcontractor participating in an approved Plan
is individually required to comply with its obligations under .the ::::;0
clause, and to make a good fai~~ effort to achieve each goal uncer the
Plan in each trade in ....hich it has employees. The overall good fai tb
performance by o~~er Contract.ors or Subcontractors toward a goal in an
approved Plan does not excuse any covered Contractor's or Subcontractor's
failure to take good faith efforts to achieve ~~e ?lan goals and time-
table.
4. The Contractor shall implement the specific affirmative action standarcs
provided in paragraphs Ja through p of these specifications. The goals
set forth in the solici~tion from which this cont:act result.ed are
expressed as perc'e.ntages of the total hours of employment and t:.rainiJ1g
of minori t:y and female outi1iza tion the Con-=ractor should reasona.bi.y be
able to achieve in each const--uction trade in-vnich 'it has employees in
~e 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 ~~ion with whom ~~e Cont:.ractor has a collective bargaining
agreement, to refer either minorities or women shall ey.cuse the Contrac-
tor's obligatior~ under these specifications, Executive Order 11246, or
the regulations promulgated purs~ant thereto.
F-4
,\,Joe ... V,.w\':. 4;;';- ~'"e ;:Ct,....'C=J~.::..::, :.=a.:.;~.:...r',; ..'1=-~S C'... ~rr""";'..---l.-~ .;.,..._ __...._..___
':.0 be cou"'l~ed in meet" .:':le goals, such apprentices :,!~" ~ainees must,
be ernployed by the <::=1 .Jct.c:- du.ring the training pe:-ij' and the
Contractor must have ".ade a. COll'.:nit.:nent to employ the. 1'p=entices 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 the U. S. Department of Labor.
7. The Contra-=tor shall take specific affirmative actions to ensure equal
employment opportunity. ~e evaluation of the Contractor's compliance
....ith thesesi.'ecifications. shall be based upon its effort t.o achieve
max.iJnum resul t.s from i t.s actions. The Contractor shall documen t these
efforts fully, and shall implement affirmative action steps at least as
extensive as the follo....ing:
a. Ensure and maintain a ....orking environment free of harrassment,
intimidation, and coercion at all sites, and in all facilities at
....hi ch the Con tractor' 5 employees are ass igned t.o ....ork. The
Con tractor, ....here possible, ....ill assign t'oo'o or more.....omen to each
construction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are awa=e of and carry out the Contractor's obligat.ion to maintain
such a ....orking environment, ....ith specific attention to minority or
female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minority and female
recruioment sources, provide writt.en notification to minority and
female recruitment sources and to community organizat.ions ....hen the
Contract.or or its unions have employment opportunities available,
and maintain a record of the organizations' :-esponses..
c. Maintain a curren'C 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 recrui~ent source or
co~unity organiza'Cion and of what 'action was taken ....i~' respec'C
to each such individual. If such individual was sent to t.,e union
hiring hall for referral and was not r~ferred back to t.,e Contractor
by t.,e union or, if referred, not employed by the Contractor, tius
shall be documented in the file ....ith the reason therefor, along with
whatever additional actions the Contractor may have 'Caken.
d. Provide immediate wri'Cten notification to the Director when the
union or unions ....i~, which the Contractor has a collective
bargaining ag=eement has not referred to the Cont=actor a minority
person or woman sent by the Contractor, or "When the Contrac'Cor has
ot.her inf.onnation that. the union referral process has impeded .the
Con~act.or's efforts to meet its obligations.
"\
e. Develop on-the-jOb training opportunities and/or participate in
training prog=ams for the area ~hich expressly include minorities
and women, including upgrading programs and apprenticeship and
trainee programs relevant to the Contractor's emp19yment 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-5
f. Disseminate the Contractor's EEO policy by providing notice of the
policy to unions and training programs and requesting t.~ei= coopera-
tion in assisting the Cont=actor in !:1eeting its EEO obligations; by
inClUding it in any policy ~~nual and collect.ive bargaining agreement; by
I
I
publicizing it in the co~y newspaper, Ar~uAl repo~, etc.; by
specific review of the policy with All management personnel and
.~th All minority and female employees At least once a year; dnd
by posting the company EEO policy on bulletin boards accessible
to All employees dt each location where const-.ruction work is
performed.
g. Review, at least annually, the company's EEO policy and affirmative
action obligations under these specifications wi~~ all employees
having any responsibility for hiring, assignment, layoff, te~ina-
tion or o~~er employment decisions including specific review of
these items wi tl. ons1 te supervisory personnel such as Superintendents,
General Foramen, etc., prior.to ~~e initiation of construction work
at any job siee. A written record shall be made and maintained
idel"! tifying the time and place of these lIlee tings, persons a t'l:ending,
subject D~tter discussed, and disposition of ~'e subject matter.
h. Disseminate the Contractor's EEO policy externally by including
it in any -dvertising in the news media, specifically including
minority and female news media, and providing written notification
to and discussing the Contractor's 0:0 policy with other Cont.rac-
tqrs and Subcontractors with whom the Contractor does or antici-
pates doing business.
1. Direc"t its recrui t:ment efforts, bo th oral and ",,=i tten, to m.inori~,
.female and community organizations, to schools wi~~ m.i.norit:y and
.female students and to minoriey and fen-.ale recrui'U:lent and training
organizations serving the Contractor's recruitment area and employ-
ment needs~ Not later than one 1Il0nth prior to ~~e cate for the
ac=ep~ce of applications for apprenticeship or other training
by any recruitment source, the Contractor shall send written
notification to organizations such as the above describing ~~e
openings, screening procedures, and tests to be used in the selection
process.
j. Encourage present minority and ~emale employees to recruit other
cinoricy persons and women and, where reasonable, provide atter
school, summer and vacation emolovcent to lIlinori~ and f~~le youth
both on the site'and in other ~e~s of a Contractor's workforce.
,.
Ok. Validate all tests and oeber selec~on re~irament..s --here bJe..re
is an obligation to do so ~~der"41 CFR Part 60-3.
1. Conduct, at least annually, an invento~ and evaluation at le~st of
of all minority and female personnel for promo~onal opportunities
and encourage these employees to seek or to prepare for, ~~ough
appropriate train~ng, etc., such o?por~~ities
F-6
m. Ensure that seniority practices, job classifications, work assign-
ments and ot.':ler personnel practices, do not have a discritina tory
effect by continually monitoring all personnel and employment
rela ted acti vi ties to ensure t.ha t the E:::O policy and the Con tractor I s
obliga~ions undel these s?eciiica~ions are being f_.:ied ou~.
n. Ensure that ~ll 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 of~ers
for subcontracts from minority and female cons~-uction
contractors and suppliers, including circulation of solicitations
to minori t:y and female contracmr associa tions and other business
associ a dons.
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
~hich assist in fulfilling one or more of their affirmative action
Obligations (7a through p). The efforts of a contractor association,
'joint contractcr-union, contractor-community, or other similar group
of which the contractDr is a member and pa.:i:ticipant, ~y 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 tD assure that the group has
a positive impact on the employment of minorities and wocen in the
indust...;., ensures that the concrete benefi ts of the program are
reflected in the Contractor I s t:1inori ty and female workforce partic-
ipation, makes a good faith effort to meet its individual goals and
timetables, and can provide access to documentation which demonstrates
the effectiveness of actions taken on behalf of the Contractor. The
obligation to comply, however, i~ the Contractor's and failure of such
a group to fulfill an obligation shall not be a defense for the
Contractor's noncompliance.
9. A single goal for Il'.inorities 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 ac~on for all
minori t:y g'I"oups, both male and fe:.3.1e, and all ....omen, both Ininori '='f
and non-minority. Consequently, ~~e 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 fo~ women genera~ly, the Contractor cay be in
violation of the Executive Order if a specific minority group o~ women
is undenltilized).
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.
F-7
11. The Contractor shall not enter into any Subcontract wi~~ any person
orfi::::n debarred from Government cont:::"acts pursuant tD Executive
Ord~~ 11246.
12.
,
The Con~act:or Sh~...... carry out such sanctions and ,- .l.ties for
violation of these specificatior~ and of the Equa~ Opportunity Clause,
'including suspension, termination and ~ancellation of existing sub-
conuacts as cay be imposed or ordered puzsuant t.o Executive Order
11246, as amended, and its i~plementing regulations, by ~~e Office
of Federal Contract Compliance Programs. Any Con~actor 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 i t.s obliga tions unde.r these specifica tions ,
shall implement specific affirmative action steps, at least as exten-
sive as those standards prescribed in paragraph 7 of ~~ese specifica-
tions, so as to achieve maximum results from i.ts efforts co ensure
equal employment opportuni ty. If the Contractor fails to comply wi th
the requiremen ts of the Executive Order, the implementing regula tions ,
or these specifications, the Director shall proceed in accord~ce wi~~
41 CFR 60-4.8.
14.
The Conuactor shall designate a responsible official to oonitor all
employment related activity to ensu:e that the company E:EO policy is
being carried out, to submit reports relating to the provisions hereof
as may be required by the Government and to keep records. Records
shall at least include for each employee the name, address, telephone
numbers, const-~ction trade, un{on affiliation if any, employee
identification number when assigned, social security number, race,
sex, st:atus (e.g., mechanic, apprentice, trainee, helper, or laborer),
dates of changes in status, hours worked per week in the indicated
trade, rate of pay, and locations at which the work ~as performed.
Records shall be maintained in an e~sily ~~derstandable and retrievable
foon.; however, to the degree that exis ting records sa tis fy this
requirement, contractors shall not be required to ~aintain separate
records.
15.
Nothing he=ein provided shall be const:-ued as a lim.i ta tion upon the
application of other laws which establish different standa=ds of
compliance or upon the application of requirements for ~~e hi=ing of
local or other a=ea residents (e. g., those under t."le Public Works
Employment Ac~ of 1977 and'~e Comm~~ity Development ~lock Grant
Program) .
..
F..;.8
..
I
I
APPENDIX G
OM!
Circ~lar A-110
..
I
J
Office of Management and Budget Circular A-110 (7/30/76)
OFFICE OF MANAGEMENT AND
BUDGET
[Clrcul&r No. A-IIOI
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 estll.bli.'ihments.
SUbject: Un1!orm administrative re-
qUirements for grants a.nd other agree-
ments with Institutions of hi~her edu-
cation. hospitals. and other nonprofit
organizations
1. Purposc.-This Circular. promul-
gates sta.ndards for obta.ining consisten-
cy a.nd Uniformity among Federal agen-
cies In the n.dministra.t.ion of grants to,
and ot.her Bi'reements wit.h. public a.nd
private inst.lt.utlons of higher education.
public and Privat.e hospitals. and other
quasi-public and privat.e nonprofit or-
ganiza.tions. This Circular does not apply
t.o grants. contracts. or other agreements
. between the Federal Government. and
units ot Slate or local governments
covered by Federal Management Cir-
cular 74-7.
2. Effective date.-The st.andards in
the attachments to this Circular will be
a.ppl1ed as soon a.s practicable but not
lat.er than January I, 1977.
3. SUPeTsession.-This Circular res-
cinds and replaces parts ill and IV of
the Appendix to Federal Management
Circular 73-7. Administration ot COllege
and unlversit.y research grant.li.
4. Policy intent,-The un1!orm sta.nd.
ard.s and reqUirements included in' the
at.tachments to this Circular replace the
V8J")'ing and often confticting require-
ments that have been impOSed by Fed-
eral agenc.les as conditions of grants and
other agreements with recipient.:. '.
5. Applicability and scopc.-Except. as
provided bel~'. the standsrds promul-
gated by this Circular are applicable to
all FederaJ agencies. II any statue ex-
pressly prescribes policies or speCific re-
quirements that. differ from the stand-
ards provided herein. the prOvisions of
the statu te .shall govern. ,
The prOvisions ot the attachments of
this Circular shall be applied to subre-
clpients performin!:' substantive work
under grants that are passed through or
a.warded b}' the J)rimar}' recipient it such
subreeiplents are organiz&tions de-
scribed In par~raph L
6. De/1niLion.s.
a. The term "gra.nt.. means monel' or
J)roperty prOvided in lieu of money paid
or furnished by the Federal Government
to recipients under programs that pro-
vide financial assistance or that pro\'ide
support or stimulation to' accomplish a
public purpose. The term "other agree-
ments.. does not tnclude contracts which
are required to be entered into and ad-
minlst.ered under procurement. laws and
regulations. Gran ts and ot.her agree-
ments exclude Ca.) t.echnlcal assistance
~;~~~m.s, lIo:hlch pro\'ide services instea.d
general revenue sharing, 10:1.ns, IoU)
gUArant.ees, or insurance. and Icl direct.
IJA~'Tllents of any kind to. individuals.
b. The t.erm "recipient" includes the
follOWing t.ypes ot nonprofit. orltaniza-
tions t.hat. are receh'ing Federal funds
from a Federal agency or through R
state or local government.:
Public and private Institutions of high-
er education: pUblic and private hos-
plt...lls: and other quasi-public and pri-
\'at.c nonprofit organizations such as Cbut
not. limited tal commlUlity ;ldion agen.
cies, reselLrch Institutes. educationnl as-
sociations. and healUl centers.
The term does not. include foreign or
international organizations (such a.s
agencies ot the United Na.tions) and
Go\'ernment-owned contractor operated
facilit.ies or research centers providing
continued support. for mission-oriented,
large scale progrult1S tha.t are Govern-
ment-owned or cont.rolled. or a.re de-,
signed as federally-funded resenrch and
development cent.ers.
7, ReQlJ.Csts lor c.:rcc~tions.-The Omce
Of Management and Budget mll.Y grant
exceptions from t.he requirements of this
Circular when exceptions are not pro-
hibited under existing laws.
However, tn the interest ot maximum
uniformit.y, exceptions trom the re-
quirements of the Circular ...W be per-
mlt.ted only in unusual cases. Agencies
may apply more restrictive requirements
to a class of recipients 1l.'hcn approved by
the Office ot Management and BUdget.
8. Atta.c:hments.-The standards pro-
mulgated b}' this Circular a.re set forth
in the Attachments, which are:
Attachment A Cuh ''depoalt.ortes.
Att.achment B Bonding &nd Insur&nc:e.
Attachment C Retention and cust.oc1l&1 re-
qulrement.s tor records.
At.t.achmcn.t. D Pr~ Income.
Att.ac:hment E Cost shATlng IU1d matcblng.
Att.&chment. 'F' St.&nd&rds tor lInanCI&1 man-
agement. syst.ems.
At.t.&chment. G 'F'ln&ncl&1 reporting requlre-
menta.
Att.achment H Monitoring &nd report.lng
p.rogum perform&nce.
At.LAChment I Payment requirements.
Att.achmeot. J Revision of ftnAncl&1 pl&ns.
At.ta.chme~ K Closeout procedures.
Attachment. L S.uapenalon &nd t.erl'l1ln&tlon
procedures.
Att.achment M Starld&rc1 tonn tor &pplylng
tor teder&1 &Uts~nce.
Attachment N ProPert.y m&n&lement stand-
ards.
At.t.&Chment. 0 Procurement stand&rds.
9. E.:rception.s Jor certain reci,rlC'Ttis.-
Not.wlthstanding th~ provisions ot para-
graph 7 it a.n a.ppllcant/reciJ)ient has a
hlst.ory of poor performance. is not ft-
nancia.lI}' stable, or It.s management sys-
tem does not. meet the standards pre-
scribed in the Circular. Federal agencies
may impose a.dditional reqUirements as
needed provided that. such applicant;
recipient is noti1led in writ.ing a.s to:
a. Why the addiUonal standards are
being Imposed:
b. what correctlve acUon is needed.
Copies ot such notifications shall be
sent to the Ornce ot Management. a.nd
BUdget and other agencies funding that
recipient at L"e sa.me time the recipient
A-110:1
10. Rcs1'onsibilities.-Agencies respon-
sible for administ.ering programs Ulat in-
\"oh'e grant.s ancl other agreements with
recipients shall issue the appropriate
regulations necessary to implement the
provisions of this Circular. All port.iollS
of such regulation15 that involve record-
keeping :lnd/or reporting requiremcnts
SUbject to the proviSions of the Federal
Reports Act and OMB Circular A-40
must. be submitted to OMD for clearance
before being introduced into use. Upon
request All regulations and instruction:;
implementing this Circular sh:l.1I be
furnished to tllC Office of Management.
and Budget.. Agencies shall also desig-
nate an official to serve as t.he agency
representative on matters relating to the
!mplementaLion of this Circular. 'TIle
name and title of such representat.ive
shall be furni.<;hed to the OIDee of Man-
:J.gement and Budget not later than Au.
~ust 30. 1976.
11. Inquirics.-PurUler information
concerning this Circular mI.)' be obtained
b)' contracting the Financia.l Ma.na!;e-
ment Branch, BUdget Review Division.
Office at Ma.nagement :l.nd BUdget,
Washington, D.C, 20503. telephone 395-
3993.
J.us:a T. LYNN.
Director,
A"M'AC:HMr:HT A.--CDlC11LA/l No. A-IIO
CASII DE:I'OS%TOIlIU
I. This &tt&chment sets torth st.andards
governln!: t.he use ot b&nks &nd ot.her In-
stitutions as. cleposlt.orlcs ot tund.. ..ch'&llced
under grants &nd olher &greementa.
2. Except tor sitUAtions described In parA.
gr&phs 3, .. &nd 5. no Fec1er&1 'Sponsoring
&gency sh&11 :
.., Require pbySIC&J seGrcgAtlon o( CASh de-
pOsitorIes tor tunds which are provided to ..
reclpleDlt.
b. Est&bllsh &ny eligibility requlr.ements
(or casb dcpOSI\.Orle.s tor tunds ":hlch &re pro-
vided \.0 & MlClplcnt. '.
3. A sep&r&t.e t>&nk &r.count. Sh&1I be require
"'hen &ppllcable letter.ot -crec1lt. &greements
provide that dra",do,.'nll wll1 be mede ""hen
t.he reclplent.s checks a.re presented to the
b&nk tor pAyment.
t. Any lDone:-s ad"'Ulced to & recipient
whlc:.h &re sub)e,!. \.0 t.ht contr~1.., or rcgula-
'.lon ot the Unl~eC St.&tes or ..ny ot Its omcers.
rgents or employees' (public money. a:a de-
~ned 10 Treasury Clrcula.r No. 1:76, as
&mended) must be depoalted In & b&n'k with
Fec1eral Deposit. Insur&nce Corpor&tlon
(FDICI Insurance coverage and the hAlan"
exceeding the FDIC cover.&ge must be col.
1&t.er&lly secured.
5. Consistent with the n&tlonal gOAl of
exp&ndlng the opportunitIes tor mlnorlt.y
business enterpriSes, reclplenta &n4 "ub.
reCipients shall be encOur&ged 'to use minor-
Ity b&nks (& b&nlt which Is owned at leut 50
percent by zntnorlty group members).
A"M'ACKMI:HT B.--CmCll1.AIl No. A-IIO
'oHDINe AND INSt7llAHCr
:. This &ttachment seta torth bonding and
Insur&nce requirements tor !:r&nta and other
&gTecment6 ",1th reclplcnts. No other bond-
Ing ..nd Insur&nce requlrcmcn,l.S shAn be 1m.
posed other th&o those norm&IlY required by
the reCipient.
2. Except &S oLher....lse required b}' 1.,.'. ..
gr&nt. or other &freement th&t requIres the
contracting (or subcontracun!:) lor con.
~LruC'tlon or taclllt~. lmpro"ement~ sh,,1J pro-
;-- ......._ _~~,_ __. ._ '."',..._. I',.
I
Office of Management and Budget Circular A-110 (7/30/76)
qulremenu; relAtlng to bid guarantees, per-
lormaDce bonda. a.Dd payment bond.6 unl_
tbe constructlon contract or subcODtract ex-
ceec1a UOO,OOO. Tor those ooMracta or sub-
contNCta exceeding aloo.ooO. tbe J"ede~t
acener mar accept the bonding polley and
requlreErlen 1.6 01 tbe gran tee provldec1 tbe
Feaer&l agenc)' haa made' a determination
tbat the GoYernment's Interest Ia adequately
protected. It aucb .. deterErllnatlon baa not
been m&4e. tbe minimum requlremenlA ahan
be all foUowa:
... .l lli4 ,",GTcu~tee Iro-m elJl:h bldd.cr equlV.
alent to Jlue percent 01 the b~ prV:e.-
lbe "blel guaraDtee" shall conslat at a firm
commitment such &s a blel bond. certLtled
cbec:k. or other negotiable Inatrument ac-
companying a blel BoO a&lIurance tbat the bid-
der win. upon acceplAnce ot hla bid. execute
such contractu..1 document6 aa may be re-
quired within the tlme speclt1e<1.
b. .l perlMmOM:C b01l4 on the "art 01 the
contrlJl:tM 1M 100 percent 01 the contrlJl:t
Jl"ice.-A "performance bond" 15 one executed
In connection wltb a contract to secure tut-
lIJ1ment 01 ltJl the con tractor'a obligations
UDder sucb contrACt.
c. A JHlyment b01l4 on the part 01 the con-
troetM lor 100 perccnt 01 the contrlJl:t
prV:e.-A "payment bond" Is one executed In
connectton with a contract to &asure pay-
DIeDot aa required by la,.. 01 all penlOns sup-
plying labor and materlatln tbe execution at
Lbe work provtde<l tor In tbe contract.
3. Where Lbe Pederal Goyernment guaran-
tea or lDllurea tne. repayment at money
borrv",ed by the recipient. U1e JI'ec1el"ltJ
a,eney. at 11.6 d1acretlon, may require a4e-
quate bonding aDd lDauraDCe 11 Lbe bond1J1g
_d lDIIurance requ1l'ement6 ot tbe recipient
are not deeme<l .cequate to prot.ec:t Lbe In-
terut ot Lbe JI'ec1eral Government.
4. 'lbe PeO,eral spoDaOrlng acency may ~_
quire ~equate ~dellty bond coverage wbere
the recipient haa no coverage &Del the bond S.
neeaec1 oto protect Lbe Government's Interest..
6. Where bonda are reqUired In tbe altua-
tlcma deecrtiled above. the bond.6 ahltJl be ob-
taolnec1 trom compa.nl.. boldlng certl~cates 01
authority u acceptable sureties (31 CP'B
223).
ATTACHWXl'C'T C.-Cm=1..\& No. A-UO
aK'nH'nOH AHtl =STODLU. aEQt7DZJG:JfTlI roa
accolUls
1. lbla att.a.cbment aet.a 10rth recoTel reten-
tion requJrementa lor gTa.nta and other agree-
lDenl.& with reclplenl.&. Feee~1 sponaor1Dg
"I'CZl.Clee sbltJl aot Imposo any recont reten-
t10A requ1l'ementll upon reclplenta other than
thClM described below.
2. ZXceJU tor pr.nsrapb 1. ths. ..ttaoc.bment
a1ao appll.. to subrec:Splent& &a referred to
IA paragTaph 6 01 tbe bulc cll'cular.
3. P'lna.nclltJ recorda. supportlAg elocument6
ataoUat1cltJ recorcl.8. and ltJl oLber recorda pertl~
nent to an ...,.ument sha.1I be ret&lned tor a
perlOd 01 three ye&l1l. wIth the tOllowtnc
qUalHlcatlOAll :
... It &ay litigation, cla1m or audit Ia at&rtec1
berore the e~ll'lLtlon ot the 3-year perlocl the
reoorc1a &bltJl be retalAed until all litigations
clatma. or audit ~nc1lnp IDvolt"lng the.recor~
have been ~Iveel.
b. Reconts for none~en.da.ble Pl'Oj)erty &c-
~U~ed Wlt.h P'eder&l funcl.a &ball be retaolned
or Ye&l1l arter I t.s ~nltJ dLePOSltlon
c. When rN"4n1s are tnul.IIlen-ed ~ or mltJn
t&1nec1 by tb "'~ -
3 e . ""eral sponaonng- agency tbe
b-I""" n=tentlon requ1l'eznent s. not appilea-
e to. the recipient.
11&'" lbe retention perlocl sta..'"W lrom the
t te ot the aubauulon ot the 111l&l U]:)endJ-
un report or, lor gn.,nta &ad other agree
:..enl.& that are renewee an.nultJly, lrom !.b;
'" te ot the "ubmlsalon o( !.be a.nnultJ
'll1~cl&1 .taottu report.
6. Recipient organiZAtions should be au-
thorlZec1 b)" the I"eaeral sponsoring agenc)",
11 U1ey 50 desire, t.o sub6Lltute m.Icro~lm
ooplea In lieu of OrlrlnAl records,
e. 'lbe JI'ec1eral sponaorlAi ",ency &ball re-
quest tralUller at ce~ln recorda t.o Ita cua-
tocIy .1rom reclplen t organlzatlona when It
dstermJnea that the recorc1a pou_ long-
term retention value. HQwever, In oreler t.o
aVOid dupllcata record -keeping. a JI'ec1eral
Iponeorlng acencr may make arrangemenIA
Wltb recelplent organlzatlona t.o reWn any
recorda that are contlnuoual)" neeeec1 tor
Joint u.se,
7. The head ot the F'ec1erltJ sponsoring agen-
C)' and the Comptroller Oeneral of Ihe United
St.a.tea. or any at their duly authorized repre-
aentatlv.. shall have a.cceu t.o an)' pertinent
boob, documents, papera, a.DeI recorc1a 01 the
reclpleDt organ!z&tlon and their aubre-
clplents to lDILIce audita. e:umJnatlollll, ex-
cerpts lUlel tr&DscrtplA.
8. Unleaa otherwLee required by law. no
Federal aponaorlng agency '....lltJl pla.ce re-
strlctlolUl on recipient orga.nJzatlons th..t will
limit public access to .the recorda o( recipient
organizations that are perUnent to a g1'a.Dt
or acreement exce~ when the agency can
elemoDlltrate that such recon1ll must be kept
co~dentlal a.Dd would have Deen excepted
trom dlaclOllure pUl'lluant to.the P'reeclom 01
In(ormatlon Act (6 U.s.C. 662) It !.be recorc1a
h&4 belongec1 to U1e FederltJ sponaonng
aceney .
ATrACHKZNT O.--Cmcvl..\& No. A-UO
I'IlOGaAK UfCOau:
1. Federal SPODaOr1Dg &pncla &ball &Ilply
the stanelarda set torth In ths. attacbmeat In
reqUiring recipient orgaalz:atlons to &CCOUDt
fOr progT&m Inoome relatec1 to projecUl
~a&Dced In whole or In pan 'IIl1t1l Peele,,1
fUDc1a, P1'ognuD Income repreaenUl groee In.
come earned by the recipient from the fed-
era.Uy ,uppor\ed a.cUvltles. Such e&l'Dlnp u-
clude Unereat earDec1 Oil a4va.nces &Dd may
InClUde. but wUI DOt be Ilm1ted to. Income
from aervlce f_, ,aJe or CODUnOCUtlee. ~e
or rental f_. &ad royltJ:lea on pateDo14 &Dd
coprlgh"ta,
2. IIlLereat eUlled on a4v&a.. 01 l"ec1erltJ
funcie &ball be remlttec1 to the Pederal aceney
ezeapt for Interest ea.rned on &4n.Aoes to
Statu or U:Ut.nunen.talltlee 01 .. State u pro-
vldec1 ~y the Intergoverumental Coopenr.tIOn
Act 01.1988 (Public l.6w llG-6'T7).
3. Proceec1a (rom tbe ea.le 01 rwJ aDc1 per-
IOnltJ propert.y either proylded bytbe JI'ec1-
el'aJ Government or purchued In whole or In
part WS~ Pec1el'aJ lunc1a. aball be ba.ndled Ia
accoraa.nce wttb Attac:Dment N to thla cir-
cular pert.&1lllng to property m&nafement.
-l. UJ1l_ Lbe arr_ent provld" other-
Wille. recsplCllt6 8.bltJI have DO obllgatlOD to
the Peeleral Ooverument wttb r..pect to
roYaJtlee recelyec1 .. a result of COpTTIg!lt6 or
p..t.eDt6 Pl"OCSuced under the gT&at or other
acr_ent (_ p&l'agr&pb 8, Attac:Dment N).
6. All other program Inoome earDed dunnc
tbe project penOd ab&.ll be ret&1Ded by the
recipient. &.Dd, In a.ccorelL""ICe wit:! the gT'aZ1t
or Other acr"ment. sb&ll be:
.... Added to (uncl.a cOmm.tttec1 to the proJ-
ect by the JI'ec1eral spon50rlng ageney &.Dd
rec:Splent organization and be uaed to 1urt.her
eUglble program obJectiVes:
b. Used to ~n&nce the non-Feeel'lL1 &.bare
ot. U1e project when approved by the PeClel"ltJ
spoDaOr1nc agency; or
c. Deducted lrom the total project COll~
In determlAlng the net COSta on which the
l"ec1en.1 abare 01 COllta -UI be baaec1.
ATTACBMlOf'T J:.-CDl.ctn..r.a No. A-110
coaT sllUo&Dfc; AND to&ATCHDfO
1. 'lbts attachment ..14 forth crlter1& Led
l>~ure.a fOT" the alIO......bUl~ o~ (".AJ'.h ,,,,<1
J
A-110:2
Ie-kind contrlbutlona m&4e by reClplenl.& or
subreclplents (&a reterred to In para!;Taph 5
at tne baalc circUlar) , or third parties In sat-
Iat)'lng coat sharing -.ad maLehlng require-
menta ot hderal sponaorlng "genclea. ThIs
attachment aLeo estaobllabea criteria tor the
evalu&tlon of In-kind contrlbutlona m&4e by
tblrd partlea. and aupplemenUl the gUidance
set forth In Fede~1 Management Circular
73-3 wlllh r...pect t.o cost sharing on leder-
aUy-sponaore<l research.
2. The tollowlng ele~nltlona apply for the
purpose 01 tbla attaochment:
a. Protect C03C3.-ProJect ooaIA are all al_
lowable COSIA (aa set tortb In the applicable
Federal COSt prinCiples) Incurrec1 b)" a. recIpi-
ent and the yalue of the In-lUnd contrlbu.
tloWl made by the recipient or third parties
In accomplLeblng the obJectlvea ot the (rrant
or other agTeement during the project or pro.
g~m perlocl.
b. Co,t ,luIr/n" and rIl4tchln".-In general.
coat sharing and matching represent that
portion ot project or pl'01fram coate not borne
by the hClera.1 Government.
c. Cuh contr1buttON.--Cuh contributions
iepreBent the reclplent'a caah ouUa)", includ-
Ing the outlay ot money contributed t.o the
recipient by non-Federal thIrd parties.
eI. In-kInd contrfbutlQAl.-lD_klnd contrl-
butlona represent tbe value ot nonca.&Q oon-
trlbutlons provided by the reclplen t lU1d
non-P'ede~1 th1rl:l. p&rtlea. Only "'hen au-
lIborlZed by l"eGer&I leglalatlon, may property
purchued with Ted.e~1 funda be COD4!dcrec1
... the recIpient's In-kind C()ntrlbutlons. In-
kind contr1butlODII may be In the 10rm o(
charges for real property aDd non-upe.nd-
able pe1l01lA1 property, &.Dd the vltJue or
gooc1a aed aervlcea directly bene~tlng and
speclt1CltJly Identl4able to the project or
program.
3. Oene~1 guldellnC!lll lor computlAg COIIt
s.b.arlng or 1DAtc.blng are a.a (oUO_:
a. Cost s.b.vlng or matc.bJng- may CODIIlllt.
of: .
(I) Ch..rgea InculTed by the recipient aa
project costa, (Not ltJI ch~ee require c:aa.b
outlaY1l by the recipIent c1ur1ng 1ll:le project
periOd: examplee ~ d.epreclaUon a.nd UN
ebargee tor buUc11.np &ad equJpment.)
(2) P1"oJect COllta ~a&Dc:ec1 ""'Lb c:aab oon-
trlbuted or donated to the recipient by other
DOn-Pec1el'aJ pubUc &pncla &ad IDaUtutlona.
and private oTg1lnSza tlona &.Dd Indlvlc1ualB,
anel
(3) PftlJect coste repreBented by aervlc.a
aDc1 ree.I and peTllOnal property. or uae U1ere-
01, dOllAted by other DOn-Pec1el'lL1 publ1c
acencl.. a.nd IDIItltutlons. 6Dd prllrate org.-
IllzatlOIUl &ad IndJT1c1uaJ.a. ..
b. All oonLnbutlona. both c:aab &.Dd in-
kin/!. aDall be accepted u part. of the recipi-
ent'. COllt sba.rtag and ma~IDg when .ueh
contr1buUoD5 meet ltJl of th'e tolloWUlg
cr1Lerla :
(1) Are ver1Aable from Lbe recipient.,
recorc1a; .
(2) Are not InCluCled aa COIItrlbuUoIUI for
anY' other fec1erally-aealllt.ec1 program;
(3) lore neceaae.ry alld re&80Dable lor prop-
er and emclel:lt acoompUa.bment ot proJ~
objectives;
(4) Are types or ebvges that would be ..1_
lowable under the applicable coat pn.uelples:
(6) Are not paid by tile Peeleral Gove."'%l-
ment under ..nother _1ft&nC8 ~ment
(unl..s tbe acreement Ia aU't.bor1&ec1 by P'e<l-
era1 la... to be WIe(1 lor c:oct al1a.rIDg or me. Leh-
Ingl:
(8) Are ProYlded for In t.be approved bUClg-
et ...beD requ1l'eel by the ~el'lL1 agency: &.Del
(7) Conlorm to other provllllona o( tALe
attachment.
... V..lues lor recipient la-kind oont:r1bu-
tloD.! ...U1 be establlsh.c Ia &CCOrCl&.Dcc W1th
tne "ppllcable coat j'>n.uclplea. .
. ~. S~~e procec1u"", lor the reclple-eta In
~tI\~ll..hlnt"' th~ 't"r..J',. ('\f In...t-'nt'!' ,...,...~t.~'h',_
I
Office of Management and Budget Circular A-110 (7/30/76)
LIons trom non-Federnl third partlt's arc 5et
torth below:
a. Va/llation of "O/lIntcrr ..("rriccs.-\'olun-
teer servlr.es rnny be turnl:o;hed b)' protesslonnl
and technlcnl personncl, cOIl:o;ultnnts. nnd
other skilled nnd ullskllled Inbor. Vohlllt~t'r
services may be coullted nil caRt :o;hnrlns or
matchln!; t! the SeT\'lc'e 1:0; nil' Intcgrnl nlld
necessary pnrt of nn npproved I,ro!:rnm.
(I I nnt("~ for '>a/mltrer scrviccs.-R...teR for
volunteenl. :o;ho\lld be cOllslslent ,.'Ith I.ho"C
pnld for Similar \York In the recipient's
or!;nrll:r...tlon.ln thoselllstallces III \Io'hlch the
required 5kllls nre not. lounct In the recipient
or!;nlll7.ntIOIl, rntes sho\lld be CO\lslstcnt \\"Ith
thol'p pnlct for similar work III the labor mnr-
ket In which the recipient coml,etes tor the
kind or :o;er\'lces In\'olved.
(2) VO/llntcers. ".:'"l'/nycd by o/hcr organi-
l:ations.-When nn emplo)'er other thnl1 the
reCipient furnishes the serVIces of all em-
ployee. these services shall pe vnlucd at the
employee's re!;ulnr rate at pn}' (exclusive of
trln!;e benefits and overhend cost.s) prOVided
these services nre In the same skill for which
the employee Is normnlly paid.
b. Valuation. of donated, e:rpendable per-
sOllal propcrty,-Donated. expendnble per-
sonal pro pert}' Includes sllch Items as ex-
pendable equipment. offiee supplies. labora-
tor}' . supplies or workshop and classroom
supplies. Value assessed to expendable per-
IlOnal property Included In the cost or match-
Ing' share should be reasonable nnd should
not exceed thema.rket vaJue of the property
at the time ot the donation.
c. Veluetion. 01 don.ated, nonczpcnd4ble
per.rtmal propcrty, buill1ing.r, and. lend or
u.se tlLereo/,
(1) The method used for charglns cost
sharing or matching for donat.ed nones-
pend able personal propert.y, bulldlnss and
land may dUrer accordlns to the purpose oC
the grant or. other agreement LS tollows:
(a) Ie the purpose oC the grant or other
agreement Is to LSslst the reCipient In the
acquisition oC equipment. bUlldln!;s or Innd,
the tota.l value of the donated propert}. ma~'
be claimed as cost sharing or matching.
(b) IC the purpose ot the a!;reement Is to
support llctl\.ltles thnt require the use ot
eqUipment. bUildings or land, depreciation
or use Char!;es tor eqUipment and buildings
may be made. The full value of equlDment or
ol.ber capital nssets "/ld fAir rentsl charges
for lAnd mn}' .be nllowed prOVided that the
Federal agency has approved the Charges.
(2) The value of donated property wlJ\ be
determined In accordance "'Ith the usual
acCOuntln!; policies ot the reCipient with the
tollowlng qUallncatlons:
(a) L.end and buildin9s.-The value of
donated lAnd and buildings may not. exceed
Its tnlr market value, at the time oC donation
to the recipient as establish ell bT' an Inde-
pendent appraiser (e.s.. certified' real prop.
erty appraiser or GSA representatives) and
cert.lfied by a responsible offiCial ot the
reC1plent.
(b) NOrtc:pcnd4ble pcrS07l41 pro-perty.-
The value of donated nonexpendllble personnl
propert}' shall not exceed the fair market
value Of equlpmcnt nnd property at the same
age and condition at the time of donation.
IC) Usc 01 spcce.-TI\e vnlue of donAted
space shnll not exceed the fnlr rent...1 \'ah:e
ot cOmpll.rnble space 1I.~ establllU\ed br an
Independent apprnlsal of compnn.ble space
and facilities In n prh'ately-o\lo'ned build In!;
In theSllme 10c:...1I t}';'
(d) L.oaned cqui"ment._TIH~ \'alue of
loaned eqUIpment shnll not exceed Its flllr
relll...1 value.
6. The follo,.'ln!; rcqulreme/lt.s pett....ln to
the reclplent's supporting recol"ds for In-
kind eon~rlblltlOlls Irolll non-Fed~ral third
:13.~t.\~!' .
a. Vol\lnl~er sE'r\'lecs mllst be ctncllmcllt.cct
nnd. to the t'xtent fpMible. supported br the
sn llIe methods used by the recl pie II t tor I t.~
employees.
b. The bnsls for determlnln!; the val\lntloll
(or personnl scn'\ees, mnlerlal, equipment,
bulldlll!;S Ilnd Innd must be documellted.
ATTACIIMCNT F.--clRcul.Aa No. A-IIO
STANDARDS F"oa F"'NANClAL MANACEMENT
S\'STEMS
J. TI,ls attnchment prescribes standRrds tor
finnnClal mnnn!;ement systems or reclpl~nts.
Federnl "poll50rllll; ngenCle<< shall not Impose
ndctltlonnl standnrds 011 reclpienL~ unless spe-
clticall)' prOvIded for In the applicable sta-
tutes (e.!;.. the Joint Funding Slmpllticntlon
Act. P.L. 93-510) or other ntUlc/unenLa to this
circular, Howe\'er. Federal sponsoring allen-
ell'S are encouraged to make sugl:Cstlons nnd
a.ulst reclplent.s In estballshln!; or Improvln!;
finnnclal IlIRn,,!;ement systems when such 0.5-
slst....ncl!l Is needed or request.ed.
2. ReClplenL.~' finnnclal management s}'s-
tems shall provide for:
a. Accurate, current and complete dlSl:lo-
sure at the financial results of each tedcrnlly
spol\llored project or prO(:ram In accorctnnce
with the reporting requirements set torth In
Attacl)ment G to this circular. When a Fed-
eral sponsoring n!;ency requires reporting on
an accruat ba.sls. the reCipient shall not be
required to estAblish an I1ccrllal accountlnc
s\'stem but shall develop such accrual data
for I t.s reports on the basis ot an anaiyslS of
the documentation on hand.
b. Records that IdentUy adequately the
source and application ot funds for federall)-
sponsored ncLlvlLles. These records shall con-
tain Infonnatlon pertaining to Federal
awards. authorlzatlonll. obligations. unobli-
gated balnnces. assets, outlays, and Income.
c. ElIectlve ~oDtrol over and accountablJlty
for all Cunds. property and other assets, Re-.
clplents shall adequatel)' saCel;Uard all such-
assets and shall assure that they are used
solely for authorized purposes.
d. ComparISon ot actuat outlays with bud-
!;etamounts tor each grant or other ,,!;ree-
ment. Whenever appropriate or required by
the Federal sponsoring Agency, nnanclal In-
formation should bit related to performance
and unit coat data.
e. Procedures to mlnlml:ae the time elapsing
bctv,'een the transfer at funds trom the U.s.
TrclL$ury and the disbursement by the recip-
Ient, v,'henever funds are aclvnnced b}' the
Fede/':l.1 Government. When advances are
mnde by a letter-of-credlt method. the recip-
Ient shall make drawdowns &II close as pos-
sible to the time ot making dlsbursement.s.
C. Procedures tor determtnlng the reaaon-
ableness. aJlowablllty and allocablJlty ot coat.s
In accordance with the provisions of the ap-
pllCllble Federal cost prlnclpln and the l.erms
ot tile grant or other agreement.
;. ^~uDtlng records that are supported
b}' source documentation.
h. Ezamlnntlons In the form of lludlt.s or
In1.ernal audits. Such audits shall be made
by qualified Indl\'lduals who are suffiClentl}'
lnde)'lendent at those who autl\orlze the ex-
penditure at FedeJl:11 funds. to produce un-
biased opinions. conclusions or JUdgments.
They shnll meet the Independence crlterln
Illon!; the lines of Chapter 3. Part 3 of the
U.S. General Accountln!; Office publication,
St....ndard.. for Audit of Ooyernmenl.lll OrJ;nn-
Iz...tions. Pro~rnms, Acth'ltlt'.'l and Functions,
Thes~ examinations arc Intended to ascer-
tain tl\e elfecLlveness of the financial mnn-
agement s}'stems and lnternnl procedures'
that have been eSt...bIL..hed to meet the I.crms
nnd cc>ndltlons or the n~eeml'ntll. It Is no1.
Intended Lhat each a~reemcnL "warded 1.0 the
recipient be exnmlned. Generall~'. cxnmlna-
tlons should be c:onduC1.ed Gn 'Ln orr.nnl:o..n-
:'In'n-w\rf(' ~n~!<:; to ;~<::~ thf" f:~r:'ll Inl,.~~!t\" nf
-I
A-110:3
nnan~lal t.rnn:O;l\ctlnn~. M 1Io'cll as r.nmpllnnce
wllh the lerm~ and conditions at the Fedr.nl
grllnt... and other af;rcetnents. Such te"ts
would include an appropriate sampling of
Federal l\(!'reements. Examination... ,,'11I be
conducted \Io'lth reasollable rrequenc}', on a
eonllnuln!; bllsls or at scheduled IlIten'als.
lIsUnll)' annually, but not less frequently than
e\'er}' two years. The trequency of these ex-
nmlnntlnnl' shall depend upon the nnture.
"I:r.c and the complexity of the aCh'lIt}'. The~e
exnmlllntlons do not relle\'e Pederal B(;eneles
ot theIr audit responsibilities, but ma~' l\ITect
the rrequency and scope at such l\\ldlts.
\. A s\'stemntlc method to IlI\.S\lre tlme1\' and
npproprlnte resolllt10n ot audit findings and
recommenaatlons.
3. Prlmnry recipients shnll require subre-
clplents ('L$ defined In parR!;raph 5 of the
bRslc circular) to adopt the sLandards In
pnrnl:l"aph 2. above except for the requlre-,
ment In sUbpnragT'Rph 2e. regnrdlng the use'
of the leLLer-ot -credit method ana that pRrt
at .:;.ubparasraph 2a. regarding reporting
forms and frequencies prescribed In Attn.ch-
men.. a to this Circular.
ATTACHMENT a.-CIRCULAR No. A-IIO
rINANCtAL RI:I'ORTtN'C RI:QtlIaEMENTS
I. This ILtlAchment prescribes uniform re-
porunc procedures tor recipients to: sum-
mnrlze expenditures mnd.e And Federal funds
unexpended tor each nward. report the status
Of Federal cash aavanced. request ad\"l1nces
and reimbursement when the letter-oC-credlt
method Is not used: I1nd promUlgates stand-
Arc!. forms Incident thereto.
2. The follo....lng dennltlons Apply for pur-
poses at thIS attachment:
n. Accrued c%pc:nd.iture.s.-Accrued ex-
penditures are the charges Incurred by I.he
recipient during a !;lvel1 period reqUl:'lng the
provision of funds for: (1) goods and other
tangible property received: (2)' services per-
formed b)' employees. contractors, subreclpl-
ent.s. and otner payees, and (3) other
amount.s becoming owed under prosrams tor
which no current services or perCormance ~
reqUired.
b, Accrued inc011\C,-ACcrued Income Is the
sum ot (1) earnings durin!; a glTen period
trom (I) senlces,pertormed by the recipi-
ent: and (II) gOOClS and other tAngible
property deUvered to purchaaers: anl1 (2)
amounts becoming owed to the recipient for
wh~h no current services or performance ~
requIred by the recipient.
c. Fedcral lu~ authorized..-Federal
funda authorized ar, the \DUll amount ot
Federal funds obligated by Ule Federal Goy-
ernment Cor uu by the recipient. ThIS
nmount may Include any authort~ed carry-
over o! unobUcated (unds Crom prior nscal
ye:us when permitted b}' lAW or ..gency
regulation.
d. In-kind eo'Uributio7LI.-In-klnd COI1-
trlbutlons are defined 111 Attachment E 1.0
thlf: circular.
e. Obligation.r.-obllgaUons are the
amount.s of orders placed, contnlct.s and
ifnnts R"'a.rded. services received. and slml-
Illr t.raDSllcUons aurin!: a Clven period that
will require payment by the recipient durin!:
the same or R future period.
/. Out/aJls.-OUtlll)'S or expenditures repre-
sent charges made to the project or program.
The}' mn)' be reported on n cash or accrual
bnsls. For reports prepared on a cash basIS.
nlltlRys are the :<um of Bctual cash disburse-
ment.!! tor direct charges for !;OOdS nnd lIen'-
Ices. Lhe amo\lnt of Indirect expense chRr!;el1.
the \'allle or In-kind contrlbuilol1~ npplled.
:l.nd the amount of CMh nd\'ances and pay-
ment..~ mnde to subreclpient.s. For report.!: pre-
pared on an accrunl bn~ls. OUtIA)"1; are the
slim ot AC1.\I&1 ClL5h dlRbufl;emenU for direct
(;ll"rJ!e~ for J!nodll :l.nd "eT\'lce5. the nmount
nf lnc!l:r"r: r~!'\"n~r lnr-urr"d. tht! \Onlu(" or In-
I
Office of Management and Budget Circular A-110 (7/30/76)
kInd contrIbution! applied, and the net In-
creue .(or decrease) In the Amounl.li owed by
the recIpient tor goocb and other property
receIved, lor aervlces pertormed b)' emplo}'-
ees, contractors, !ubreclplents and other
payees and other amounu becomlns owed
under prO!;rams tor which no current serv-
Icee or pertormance are requIred.
g, provram iN:ome.-Program Income I!
de4ned In Attachment 0 ot tbls cIrcular. It
may be reported on a cash or accruAl baal!,
whIchever Ia used tor reporting OUtlA}'S.
h. UnDblivaied balance.-The unobligated
balance Is the portion at the tunds author-
Ized by the FederAl spon~rlng agency thllt
haa not been obligated by the recipIent and Ia
determined by deducting the cumulative
obligations tram tbe cumulative tunds au-
tborlud,
l. Unliquidated obIiVatlo"",.-For reporUl
prepAred on a cuh' bMls. unllquldllted obli-
gations represent the'cLmount ot obligations
Ineurred by the recIpIent that haa not been
PAid, For reporte prepared on an accrued ex-
penditure bUla,they represent the amount
ot obllptlons Incurred by the recIpient lor
whlcb an outlay haa not been recorded.
3. Only the tollowlng torms 90'11\ biI au-
thorized tor obtaIning 4nanclal Intormatlon
lram reclplente.
a, F!714nC'ial Stalu.s Ae~rt (E:ILlbft 1). .
(1) Each reder&l sponsorIng agency shall
reqUIre reclplenu to use the etandardlzed
l"lnanclal Statui" Report to report the status
at tunds tor all nonconst.ructlon proJecu or
programs, The Federal sponsorIng agencIes'
may, 110wever, h&ve the optIon 01 not re-
quIring the nnanclal Status Report when
the Request tor Adv&nce or RelmbWMment
(paragraph 4a) or Report ot rederal Cash
TTansactlODll (paragraph 3b) I! determined
to provide adequate In/ormatlon to meet
theIr needa, except that annal P'Inanclal
Status Report shall be required at the com-
pletion, 01 the project when the Request tor
Advance or ReImbursement torm la usee only
tor advances,
(2) The l"ederal sponaorlng agency sh&lI
prescrIbe whether the report shall be on I.
cub or accrual basis, II the Federal sponaor-
Ing agency reqUIres accrual Intormatlon &nd
the recIpIent's accountIng recorda &Te not
normally kept on the accrual buls. tbe re-
cIpIent shall not be required to convert lu
accountlng system. but shall duelop such
a.ccnlal IntormAtlon throul;h best estImates
bued on Ion analysis 01 the cocumentatlon
on hand.
(3) The l"ederal sponsor Ins agency &hall
determIne the trequency. 01 the nnanclal
Status Report tor each project or prO!;ram
consIderIng the sIze and complexlt). at the
particular project or program. However, the
report shall not be requIred more Irequently
than quarterl)' or I~ trequently than an-
nually except as provIded In subpa.ragruph
3a( I) above. A nnat report ahall be requlne
at the eompletlon 01 the agreement.
(4) Feeeral sponsorIng agenCies sh&lI re-
quire reclplenu to submit the Flnancla.l
Status Report 10rtglna.I and no more tha.n
two cnples) no lAter thlln 30 dA)'S AlLer the
end at each specified reporting period ror
qu&rterly a.nd semi-annual reporl.li. and 90
da)'s tor annual and nnal reports. Extensions
to reJ'Ortln~ due dates mal' be granted upon
request ot the recIpient.
b. Report 01 Federlll CulL TransacliotU
(Ezhibit Z).
(I) When tunds are a.dvanced to
reclplenUl througn let:ers at credIt or wIth
Treasury checks, the P'edera.l sponsoring
&lIencles shall require each recipient to ~ub-
. mlt a Report 01 .Pedcral Casn Tranl'oACtlons.
The Federal sp(lnsorln~ l\~ency shall u~e this
report to monitor cash adva.nced to reclplenl.li
And to obtain dlsbursement'lnlormatlon lor
ea.ch agreement trom the recipients.
(2) Federat sponaorlng a.gencles mAY re-
quire torecul.li or Federal cash requirements
In the "Remarks" ~eetlon at the report.
(3) When practIca.l and deemed necessary,
the Federal sponsorIng agencies may require
receipts to report In the "Remuks" fectlon
the Amount at c:&Sh advances In exceu at
three days' requlrements In the handa olsub-
reClplenl.li and to provide short narrative ex-
plana'.Ioru at actIons tAken br the reclplenl.li
to reduce the exceSJ blllances.
(..) Recipients shall be requIred to submit
not more tha.nthe orl~1nal a.nd two caples ot
the Report 01 Federal Cash na.nsactlona ] 5
workIng da)'s tollowlng. the end ot each
quarter, The Federal spon.,orlng a.gencles
may require a monthly report tram those
recIpients receiving advan.::es totalIng $1
mUlIon or more per yeu,
(5) Federal aponsorlng agencIes mar waive
the requirement tor submUslon at the Report
01 Federal Cub Transactlons when monthly
advances :10 Dot e:lceod &10,000 per recIpIent,
prOvIded that such adva.ncu are monItored
through other torms contaIned In_~ls at-
Uchment, or It, In tbe Federal sponsoring
asency's opInion. the recipient's ~ccountlng
controls Are adequ&te to mInImIZe excessIve
l"eder:u advances.
., Except as noted below, only the tollow-
lng torms will be a.uthorlzed tor the reclpl-
en~J In requestIng a.dvances and relmburae-
menu,
a. Requed lor Advance or Reimbursement
(Em!b!l J),
( 1 ) EaCh Federal spon:orlns agency shall
a.dopt tbe R.equest tor Advance or Reimburse-
ment 80S a sta.nd&n1lzed torm tor all noncon.
:tructlon progra.mJ when letters-at-credIt or
predetermined a.dvance methoc1s &Te not used.
Federal sponsoring agencies, however, have
the option at UsIng this torm tor construc-
tIon prograrna In lieu 01 the Outlay Report
and Re::juest for ReImbursement tor Con-
nructlon Programs (subparacraph "b).
(2) ReCIpients shall be AuthorIzed to sub-
mit requests for aevances and reimburse-
menu at least monthly when letters-of-
credl t are Dot used. Peden,: sponsorln~
agencies shall not requIre the submlalon 01
more than the original and two caples at the
Request tor Advr.nce or ReImbursement.
I
A-110:4
b. Ou.tlaJl report and request JO' reim-
bl.lrumcnt lor ('onstru.ction program.< (E:z.
/Libil 4).
( I) Ench Federal ~pOnl'oOrln!: a!:ency ShAll
adopt the OUtlAY Repon and Request lor Re-
Imbursement for Construction I'rol;rnms u
the n1nd.ardlzcd tormAt to be used ror re-
questing relmburseml.'nt ror construction
programs. The l"ederal sponsoring agenCIes
mAl'. however. have the option at substitut-
Ing the Request for Advance or Reimburse-
ment Form (subpar&gra.ph 4a) when the
Pedernl agencies determine that It prOVIdes
I\dequAte Information to meet their needs.
(2) Re::iplenl.li shall be AuthorIzed to sub-
mit requests :or reimbursement "t lelLSt
montl}l}' ",'hen letters-ot-credlt l\re not used.
Peder,,1 sponsortn~ agenCies shall not require
more thAn the orlglna.l and t""o copies ot the
OULlA)' Report and Request lor Reimburse-
ment for ConstructIon PrO!:"AInS.
5. When the Peder&l sporuorlng lI.l!encles
need ..ddltlonAI InlormatlOIl In using these
torms or mere rrequent reporLs, the rOllo,,'lng
sh all be 0 bserved;
. a.. When addltlona.] Intorma.tlon I.s needed
to comply ""Ith leglallLtlve requlremenl.li.
Pederal .sponsoring I\l:encles shall Issue In-
s!.ructlons to require reclplenu to submIt
such Inlormatlon under the "Remarks" sec-
tion 01 the reporto,.
b. When necessary to meet speclne pro-
.um needa Federa.l sponsoring &(encles shall
submit the proposed reporting requtremenl.li
to the Flna.nclal Ma.n..gement Br&nch, BUdget
Review Division, Olllce 01 M&na.~ement a.nd
Bu~et for a.pproY&1 prIor to subml.sslon of
the reporu tor clearance under the pro-'
visIons at OMB Circular No. A-40.
c. When a l"&dera.l spOnsoring agenc)' hAS
determined ~hat A recIpient'. a.ccountlng sys-
tem does not meet the Sl&ndards tor FI-
nanCI!L1 Manageme:lt contained In Attach-
ment 1" to this clrcula.r, a.ddltlonal pertinent
Intormatlon to turther monitor gra.nl.li and
other a.greements mllY be obtaIned upon
"'rltten notice to the recIpient until such
time ~s the sY$t.em Is brought up to st.a.naard.
d. The l"ederAI sponsoring ~ener. In ob-
tAining Intormatlon as In pAragraphs a.. b
a.nd e above, mus' comply ",'Ith repor:. elear-
&nce requlrements 01 the Olllce at Manage-
ment r.nd Budget CIrcular No. 11.-40, II.S re-
vised .
6. FederaJ sponsorIng a.gencies ha.ve the
optIon at shadIng out any line Item on a.ny
report that Is unnecessar)' tor decislon-ma.k-
Int purposes.
7: Federal sponsoring a.gencle:; should &c-
cept the IdentIcal Intorma.tllDn from the reo
clplenl.li In ma.chlne usable lorma.t ~ com-
puter prlntoul.li In lieu at prescrIbed tormats.
8. Federal sponsorIng agenclCJ may pro-
vIde computer outpul.li to reCIpients when It
will expedite or contrIbute to the accuracy
ot reporting.
9. FederAl sponsoring agencies are lIuthor-
lzed to reproc1uce these lorms. The torms tor
reprodllcl.lon ~urposcs can be obta.lnea tram
the Olllce at Manll.\;ement a.nei Budget.
FINANCIAL STATUS REPORT I. HOlftAl AalHQ AHa a.....HI...nOHAl 'U"'KT TO WHICH ",ro", II IU""TrIo II. ..O....l 0....'" O~ aTlfU 1I>"""n'Ho I ~"'8 ...PP'OY041 PAC I 0'
HUN'III I
140. lJO.-ROIBO
(Follow i,u'ruclio1U On ,la, 'd~IcJ ".ClS
R[Clr'1lH' OAQANI~no" tN.......... c"",,,.,, ..u...., I.......;., "" eN.. I. IM'l.OYI:IIIDt.HnIlCAflOH HUN"" .. II(CI"IHJ ACCOUNT HUW'.1l OIllIOINn".,... HUN.(. &. nHA.l "Iron I ,. IAIII
0'" o HO o CAIH o .CCRUAl
.. rftOIICT/QAAHT ,.unOD It.. 1..,-.."-,, ,. ''''1'1100 COVrllfD I' Tl411 11(1"0'"
'flOM 'N...... ...... ....'. I '0 ,AI4I..eA. .... ....,. 'liON ,.....,,\..tl.... IJ~" to ,N_d, ..... ."411
STATUS or "'"os
(01 (., (<I (l) (.) (/J TOT...l
PROGR"'M S, rUNCT 10NS'IoCTlVIT 1(5 .. . (,J
Uel oull"ys previously repor1td S S S $ S $ S
T 0111 oulloy. lhl. ..port period
ttll: ProR'lm Incom. cntdlh
I4tl GUlloy, Ihl. ..port period
f1~i..,,. ,"in", lint cl I
IIel oulloy' 10 do.. I
ni.e 0 plu. lin. dl : .
IAu: Hon"ed"~.'lh"!1 0' oull.y.
Totll 'HI.nl,h.,. 0' oUI"y,
(lA"" , mi'..,.. Ii.., fJ I
I J
Tol.1 unllquld.t.d obli,oUon.
L...: /lon.Fodor.1 .her. 0' unllquldllod
obll,.llon. .hown on II.. h
-
rod...1 ,h... 0' unllquldolod obll"lIon. .'
T 0101 r ,do,,' .h"o 0' oulI.y. .nd
unllquld,,04 ob/i,oUonl
Toll' cumulatiYI .mouf11 0' ,..d"I' fund.
.ulhallud .
Unobllglted b,lancI 0' red.lre' 'und. or ...UTHORIUO C[RTlNING 04TE R[PORT
.0 rv,( O' "All o '.OVIIIOIIAl I 0 p.mIU."'HIO U. C.IIlI,ICATlOH Sllll.... ruRE SU8MlnEO
(rl4<1 ".T" in oppf'Opnolt &..) o flHAl o fIlIO I .Irtlly 10 Ih. ....1 0' rny .nowlod,. Ind .... or FlC I...l
olnrer I c. .AJl I .. TOTAL AMOUNT 'e. nOIAAl IHAftl 11.1 tha-Ithl. report I. conlct I...d complet. and
"(HII It. ""u Ihol III aull,yo ond unllquld,lod obU,.lIon. TYPlO OR PRINTEO N"'ME "'NO TITlE TElEPHONE (A... <....,
. Ire 'or thl purpo... .., 'orlh In thl ......rd ...."'b.r ...d nrlr".ionJ
:::':.~=:t.:::~~.~~. nr4e_'...... ......,4 ......_, .. ,..,_,.... U..,'" '1 ,-.4.-4 ...."'., ........ '" ............. .-4" document..
tJAHDA_O 'Olll" 214 C1-lIl
>-'0' E XIIIBIT ,
',uett.... " omc. of ...."..."".nl .nd ....d...
CIRCULAR HO. A.1I0
J
-
0
-
~
0
(1)
0
-
~
CI)
:l
CI)
to
(1)
3
(1)
:l
....
CI)
:l
a.
-
m
c
a.
to
(1)
....
(1
.,
0
E
CI)
.,
~
.
.....
.....
0
~
.......
W
0
.......
--.J
m
-
--
l>
.
.....
.....
!=?
U1
J
.1
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or printlesibly. Items 1. 2, J. 6. 7, 9, IOd, lOe, 109, 10i, 101. Ita. and 12 are self.uplanatory,
specific inslructions lor other iloms are as follows:
,'- 1:..1."
.t Enter the empl~, kllntlncat'on number ...tlned by
,h. U.S. Intem.' "",enut $e'rvicI or FfCe (tnsUh"ion)
code. If requir.d by the F.ct.", ,po"lannl allney',
Thll I~C' I, rne~ for In account number or mhpr
fdentifY."1 numCMn ....... may be IIlIi,n" by tf\e
rllCiptent.
8 Ent., the month. day. Ind yea' of thl be,in"'". ,nd
lrndlnl of 'fti. Dro'ect .,.r.oa. r or formu'. ,'lnll th..
It. not a.I"'_ 01'1 . pro,ed ..,.. IftOw 'ft_ "ant
ponocl.
10 Th. pu........ ot verllc.1 cilium,," (I) Ih_... (f) I. 10
provide r.nallCial da'l 'or ..cta pra,,.,,,, tuftC160n. .nd
.ctlvity in Ih. -1ft II 'P-" It,- Ih. f..,.... ./lOn.
sorln, .,.ney. 1/..ddillon.1 COIum". ar. _ed. U'" II
m.ny .tldlllonol fo"", .. _ed .nd IndlCal. po,.
numb<< In tJlreC. praYtded .n UOIMf' ,.",t: however. tJ'ttl
tertii, of an IIfor.ml. 'unctions or activ4UIs should be
.hown i" cOlum" (,) 01 Ihl nm PI,.. For .,rMm.nts
ponalnln, 10 _...1 c..1.lor of Fod...1 Com..U.
Assinanee prorram, 11\6' dO not' requ.... Ii tUft".,
funcUonal or .ctl~ d..sUieallon bt..kdOWft. enter
und.r columns (I) I"_rh (I) In. Uti. of Ih. pro,..m.
For 'fWnu or oth.r auiShnc. _.,..ments conta'ntn,
mul"pl. pnt.rems where on~ or mOre 1"01'","'1 NouA,.
. lun".r br..kd_" It,- function or .ctlYlty, u.. .
Moen'e form tor ..Ch orom'" sn~nl the loolicabl.
functions or activtti.. In the leDI,.le ccHumns. For
'l8ft1S or other .,.i.ance Icreementa cant.'ning Ie....
eral functloM or actMtiel .tate" .rt fUnd" from
...,.1 IN'Orr...... PftlNr. I 'SIOI,.,. lann tor ..ch
actIVIty or function _n requested by I". F.....;
"",,_n, .,...ey.
101 Ent., 1"" net outlay. Thl. .mount ._Id be 1"" ..m.
.. Ih. .mounf reponed In UN lOa ot I'" I.st "'PO"~
If I"'" h.. _ .n Idjullment 10 I'" ._nt .hown
P......u.Iy, Ill.... 'NeIl _I....tion. $_ Zat'O If I""
Is I". Initial ..100ft. .
lOb Enl.r In. 101.1 rroa. _ram outl.". (Ios. r.bal...
refunds. and oth., cSiJCOUntl) for ,,,.. NDOrt periOd.
Includlna dlst'lunem,nls of ca." reaUz" I" ptOfram
income. For "'1'0"1 thlt .n 1lI,.oaNCI on I calh
t..et. outlays IN the sum of actual gsn disburse,
m."~ lor ,GOds and 'eMICeS. the amount of Inclil'Wd
..orens. chl",ed. the ""u. of In-llind contrtbuhofts
.p~lied. .na the Imou"t of cesh adVIIAce. Il'Id
~ym.ntl mid. to contractors and sUOcrantees. For
l"8ports- preoared on .1'1 .CCNed expenditure tNsis. out-
lays .re tIM IV'" of actual CISh disbursements. the
amount 0' Indirect expenSI incurred. Uti v.kI. 0' In_
kind COl'ltttbutions BDDhed. .nd tM net Increl.e (or
docrea..) In Iho ,mounts _ by ",. r9Ci_ lor
.-S .nd oth.r 1lf01Oef'ly received .nd for _
per1o""e<l by .mployees. .........cton. autor..m.... Ind
oll..r poy.....
,... E~I."
lOe [nt., th. .mount 01 .11 Prof'.'" Income ,..lIleeI In
this IMnod t".1 i. reQUIPI'd toy the I,,,", Ind eon.
dlttOM of Ihe f "eral a..rd to 0. OPduC11!d from 101.1
Pmft'C't cost,. (or rlDOl'ls D,.,'.red 0" . c..." bill".
en.'" th. amount 01 CI,n Ince-me ,.c,tved du,inl ,n.
Npar\I"1' lW',iod. (or ,.pont preD.,ed on an .ccru.t
b..II. ,nil" th. .moun'. of IMome "'".0 sine. Ih.
befin",nl of tfll ,ePOrting PlIr'od. Wh.n Ihe Ie""' 0'
conditions ..... DtOf'lm Income to be added to the
total _._rd. '.0'.'1'1 In r.ma""'I. th. lOUrce, amount
.ntl di'DOI'hon of Ut. I"com..
lOt' [ntet' .mount ,.,...",,,. to the non.Fed.,.1 Sh.... of
profl.", outl.,.. InclUCSed 1ft th. amount .~n line t.
10lt ["I.. lotal _rot ot unllquld'led oblir.llon. lor Ihl.
pro;.ct or pFOf'am, includinC unllQuJd.ted obhl.ho"s
to IU............ and contractors. Un"quHSated obliga.
tionl .'e:
Cash bal~bh.aUOll' Incurred but not -paid:
Accrued ,_""dUut. ba.....-oblis.hons Incurred but
for whlct\. an oullay hI, not Deen recorded.
Do not indud, any amounts thl' have been Inciuded
on 1,1'1" . throur" r- On the fin.1 ,epot\. Une h should
have I zero balanc..
101 Enlor I'" f_...1 ,h... of unllquld.led obltr.lIons
,hown on 11_ h. The amount shown on this line should
be .". dln.,.nce between the .mount5 on lines h .nd I.
10k [nter Ih. .um of Ih. .mounts shown on II"... r .nd ,.
If tM ..DOlt Is I\nll the r.port Shoutd not contlin any
uflllqulOa.... obl.lllon..
10m Enlel' I'" unobllpled bal.nc. 01 Fede",1 lunds. Thl.
........nt sIooukl too ",. din.",..... ba........n IIn.. k and I.
II b Ent.r.... I" etlocl dutln, I". ,"POr1in, porlocl.
II. Ent.. ._nt of 1100 base 10 _ich Iha ..I. _. .pplied.
lId Enlel' lotal _nl of Indirect coil charred durin, tlOO
..oort oonocl.
11. Enler lmount 0' the Fedenl sh.r. Chll,ed durin, the
..110ft portoc\.
II more than OM: r.te was applied durin, the pro;K't
period.. mctud. . seo.;nte scftt'Gule snoM"' CI.es
aptn" WI'ItdI the Ir'ldltect C01It r.tn were IPottecl. the
rnDeCttve Indirect ra.... the month. a.y. .nd ye.wr t"e
indtNet fltes ...... In efleet. .mounts of indirect ...
....... ."."ed 10 ."" orojeCI. .nd In. Federal s".r. of
indl'eel _n.. ...."ed 10 In. projaCIlO dol..
A-i10:6
.
,
I
.I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:7
~p"",ed by Offic. of ',Ion...men. end Buor.t, No. 8~RO 182
FEDERAL CASH TRANSACTIONS REPORT 1. ~"'!'ul ~torinc "HICY .... Olll"iuliCNllII .1...". to ....teh Ihtl "PiOn
" lubm.n...
(See in.stru.ctiml$ on the bcu:k. If report i., for more than on/l prllnt or
a.s6istanc/l agreement, ntl4ch. completed Stand4rd Form. 1::"%-.4.)
2. RECIPIENT ORGANIZATION 4. ,...... .,.". . .... i.....ilia. !. "eeieN...... Kceu..t ...",o.r w
11__ io.lity.". ."lftbet
No.".. : 6. Lollar., credit .u...... 7. lll" ...,...,.t .oUCh" ",,"'...
N.....brr Give tto(1I1 "umber for Ihis perind
111'to4t Str".d :
e. P.,....., Vouchen <ledit.. I. 9. Tr...ury chec~. lac.i".d (WlJtw.tl\.f'
,.., ........ t1f" "Cft depollltd)
CU.., SlAt. 10. PERIOD COVERED BY THIS REPORT
a...t ZIP Cod.:
3. FEDERAL EMPLOYER ~ F"AOM (..._tA, 0...., ....rl TO (...a..t". d... ....r)
IDENTIFICATION NO,
a. Cash on hand beginning of reporting periOd $
b. Letter of credit withdrawals ,
c. "!reasury check payments
11. STATUS OF
FEDERAL d. Total receipts (Sum oflincs b and c)
CASH e. Total cash available (Su.m of lines Q..JJ.n4 d)
f. Gross disbursements
(Sce IIpecijic g. Federal share of program income
in.stru.ction.s
on the bll.Ck) h, Net disbursements (Line f minua Line g)
i. Adjustments of prior per-Ods
j. Cash on hand end of period $
12. THE A\10UNT SHOWN 13. OTHER INFORMATION
ON LINE IlJ, ABOVE.
REPRESENTS CASH RE. a. Interest income $
OUIREMENTS FOR THE
ENSUING
Df?oVII b. Advances to subgrantees or subcontractors $
.
14. REMARKS (A ttll.Ch a.ddlI40na.l sheets of pl4in paper, if more Ilpace is reqtlired)
15.
CERTIFICATION
SIGNATURE
DATE AEPORT SU8M.iTED
I certify to the best of my
knowledge and belief that AUTHORIZED
this report is true in all re-
spects and that all disl>urse. CERTIFYING
ments have been made for
the purpose and conditions j OFFICIAL
of the grant or agreement
THIS SPACE FOR AGENCY USE
TYPED OR. PRINTED NAME AND TITI.E
/1A.r_ C......)
TEI.EPHONE
,IN.....,....)
( L'zto_....l
I
272-101
EXHIBIT 2
STANDARO rOA'" 272 17-76)
~r.~rjh...,..j bv OffIce ("I' .""hn"lC~m.nt I'lnd Rvd..t
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:8
INSTRUCTIONS
P1e2lS8 type or print legibly. Items 1.2.8,9. 10. lId, 11e. 11h, and 15 are self explanatory, specific
Instructions for other items are as follows:
1'-
EIlh"
3
Enter employer iaontification number assigned by the
U.S, Internal RevlHlue Service or the FICE (institution)
code.
If this report coyers more then one grant or other
egreement, leave Items 4 and 5 blank end provide the
information on Standard Form 272-A, Report of Fed.
eral Cash Transaetiofl......continued: otherwise:
4 Enter Feoderal grant number, agreement number, or
other Identlfyini num~rs if requested by sponsoring
ltiltnty.
5 This spece r~rved tor an eccount number or other
Identifying number that may be auillned by the re-
cipient.
6 Ent., the letter of credit number thet epplles to this
report.tf all advances were mede by Treasury check.
enter "NA" for not epplic:able and leeve Items 7 and 8
bWlnk.
7 Enter the voucher number of the lest letter-of.credit
peyment voUCher (Form TUS 54(1) that was credited
to you,' account.
11a Enter the total amount of Federal cash on hand at the
beginning of the reporting period Including all of the
Federal funds on deposit, Impf1lst funds, and und..
po.ited Treasury checks.
lIb Enter total amount of Federal funds r.eeived through
peyment vouehen (Form TUS 54(1) that were credo
Ited to )"OUr account during the reporting period.
lIe E"",," the total emount of all Fedentl funds ~eived
during the reportinc period through Treasury checks,
wneth.ef' . or not depos.ited.
llf EMw tn. lota' F.o.nl caah dtsbursements, maee
~rin( the ~ ~, including cash received
M pt'Q9r'am Income. Disbursements as used he" also
. lneIude tn, S~M of advances and peyments Ift.s
munds to subg",ntMs or lIOn "'aciors , the (ross
amounto! dir8Ct l&U1ri_ and YlMl8-. includinC the
Eft try
llnn
emplO()ee's share of benefits if treated as a dirK'! cost.
interoepartmentlll cha~es for supplies and services,
and the amount to which the recipiant is entitled for
indirect costs,
11( Enter the Federal share of program income that was
required to be used on lhe projK'! or program by the
terms of the grant or agree":,!nt.
11i
Enter the amount of all adjustments pertaining to prior
periods anecting the ending balance that have not
tlnn includKl in any lines above. Identify uch grant or
arreernent for which adjustment was made, and enter
an explanation for each adjustment under "Remarks,"
Use plain sheets of peper if additional spece is required.
llj
Enter the total emount o( Federal cash on hand at the
end of the reporting period. This amount should include
all funds on deposit, imprest funds, and undeposited
funds (line e, less line h, plus or minus line I).
12
Enter the estimated number of days until the cash on
hand. shown on line Ill. will be expended. If more than
three days cash reqirements are on hand, provide an
explanation under "Remarks" as to why the drawdown
Wltl made prematurely, or other reasons for the excess
cash. The requirement for the explanation does not
apply to pres.;:heduled or automatic advances.
'.
13a
Enter the amount of Interest earned on advances 01
Fedel'8l kinds but not remitted to the Federal agency,
If this Inc:ludes any amount earned end not remitted to
the Federal sponsorinr a,eney (or over 60 days, explain
under "Remarks:' Do not report Interest earned on
advances to States.
13b
Enter emount of advance to secondary recipients in.
cluded in item llh. ..
'\
14
In addition to providing explanations IS required above,
,iye additional explanenon deemed _cessary by the
recipient and 10r i~tion required by the Federal
sponsoring agency in compliance with governing legis.
Iation. Use plain sheets of paper if additional space is
requir8d.
CO'
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
FEDERAL CASH TRANSACTIONS REPORT I
CONTINUATION
IT".. f......... ."""pl.,.d..Old allMh,d t. SloNlnrd FP"fl HI ...Iv ..h.r"
f"pOf"tin" """""f: tho" .,.,." "rd.'" ..,. CI'IIi.tttl7Lt:C tlprctrlU"t.)
Z. RECIPIENT ORGANIZATION (G.". "....... .....V .... .100..... ill ./.... t, SF' 3.
HI)
."pproved by O'hce of Man.gem,,"_ ane, Bud,... No.
80_R0182
1. fEDERAL SPONSORING AGENCY ~ND ORGANIZ....
TIONAl ELEMENT TO WHICH TH~ REPORT IS SUS.
MITTEO
PERIOD COVERED SY THIS RET'oRT (A., ,h..." ." SF
111)
'''0'' c~.".,,,. ...,. .....)
1 TO eN..,... ~.. ,...1
4. Ust information be")w lor .een grin' or other I,reemenl covered by UUI ,eOOft. Us.. adchlion.1 'orms if more space is required.
FEOEIlAL GIlA..T Oil OTNEIl IOENlIF.1 Il[CI~ENT ACCOUNT NU".U f"EDERAl SHAnE OF NET DISBURSEMENTS
CAollON Oil O'THEIl
IOI"T.NING HU"SlR Nn DISBURSEMENTS ,c;.._. CU"U'-' 1IV[
!"SII.... " ",bd."""",, bv .,h.r id~,i. ......_.... I... .....,...... ._ NCT DIS.URSEMENTS
,,,iTa, "umb.,..' if -~qKired bv tAl ~,,~. ..,......... FOR AEPOIITIHe
F .d....1JJ S".........,"rA. g."cv) P('''OO
Inl Ihl I.' Idl
$ $
,
I
.
-
I .
.. "'I
.,
5. TOTALS (SM,,14 .........,,""" wi'h """,,,,,,,, 'MvI" ." SF' !1t "'1
f./low" ..!"...... (eJ the ........... Un. Ilk; coJ"..." (d) til. "..... of lines
I In .nd II.. of In,. .SF 111 "1'4 .....""'j..'iv. d..b"r..",,,,,,, ,h""", ....,
I...' rCl>orl. A. tic.. "",,"'-lion ./..nv tii6............) S S
.
217-..01
STANDARD FORM 272-A (7.761
P,..~,It-~ ~... OHi,.. to# ....10...0('.-_' ""'d BUd).'
A-110:9
Office of Management and Budg\ I
'cular A-110 (7/30/76)
.1
REQUEST FOR ADVANCE
OR REIMBURSEMENT
lop"",,," by Ollieo of Mon.rom...' Ind
BUdlel, No. ~1B3
.. - r .... .. ...,. .....
o ADVANCE 0 :~TaUUE.
It... .... .......... ...
.AGU
2. BASIS Of .(QUEST
o CASH
"AOI:
o.
I.
T"r", 0"
"AVM&NT
olQUUTCp
(...f)u 'IUtf'llehou OK .&ck.
I'7f5li." SI'OHS .,,'" AG NC1' A 0 HI......... .. W
W....CH THII 110'0.' II su....nED
o nNIL
DrlllAl eM'" III OTHIIII
IOIN'''''Y.NG NUMep AU'GNU
I' fU)IItAL ACXNCT
o .lonAL 0 ICCOUAL
50. "..'1..... -nY..THi"""ilOU~
MUM.O fa" THIS "Ioue.,
4.
I.
II
.. E...... 0 I UI .,leA If
HUM.III
,OE ",IN NT HU".EO L Pl:RIOO COVEREO
OR IDUfnf"YING HU".E. lItO.. ....., "-eo ....)
THIS RE UUT
(....... ... .-. t
"
.... " .. ... ...... .,...... aM.
H._
H_.
H_'"
.... I.....
-
.." .1.....
c.... .....
.-;I %Ir c.... :
1:"..,&...
'.04 ~I"~" :
11. COM~AnON OF AMOUNT OF REI...aURSE:MEHTS/ADYArtCES REOUDTt:O ..-
(.) (T) Ie)
.
PROGMMIlFUHCT/OHS/ACTIYlTIES . TOr AL
I. ~~~':~:o (AI.Tlliak)
$ $ $ $
b. Woo: Cum"I.r1w -In_
c. :: fj-'" outlol'l ( Li... . ........
d. UtImot... not c.... ~ lor .""._
po-
.. T_I (S......I .... d: d)
f. _.'......1 _.. of .mount ...._ 0
I. '_owl ,..... of .mount Oft line .
h. '-owl 1O.rm-ft1 _ioualv__... ..
I. ='l-i:.~ - _at... (L.Goc "
J. -- /'OQlI;'''' by lit montto
-", - """_...
by'- rn_..oncy
lor u.. In moldn. _ 2n" mont"
_",... Id"._
lid montlt
12.
ALn:RftAn: COMrUfATlON I"OIt AOYArtCES ONLY
I. Utlma'''' ,......, co... outlays '''.t will be modo durI", poflocI_ by Ute _.....
$
10. lA.aa: Eltlmot... bo'.nceof '_.1 COI" Oft "-.101 botiftninlolodvulco po_
Co _nt ~_... (Liow. __ liov 6)
1:1.
s
CUTIFlCMlON
SIC""""'E or _ZED CDT,"'NO 00-_
lOAn: "IOU!:Sf
su...mu
I co",., 'loot to 1100 bell 01 my _.....
.nc/ beli.f 1100 d.l. ._ ... -..ct .nc/
''''1 ." outt.,. ..... mado in __.nee
wit" tIlo I..nt _ition. or _ ......
- ."" ,,,., po_nt Is "uo .nd "'s nat
Men ..-u.Jy_.
T'\'lO'ED Oll. __ "_-= AND ."TLE
nu:_.
. ,.... <:-
.-
,
,-
"". _lor ~_
Z_IOI EXHIBrT J
.'AN~ ~ nv (7-711
......,.... ..,. ~ ." ....".......... eM ......
OACULAII NO. 10-110
:ederlJ' Grants Management Handbook September 1978
A-110:10
,
.
Appendix I
I
-
l" ".
'.
J
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print legibly. lIems 1. 3. S, 9, 10. lIe, lIe. III. Ilg. IIi, 12 and 13 are lelf.explanatory;
specific instructions for other items ar. as follows:
/1_ E,..",
2 Indiu'. whether reQuest il prepered on ca.h or ac.
CruM ..""dilur. bel'I._ AU requestl tor .dvl"en
shan _ pr'De,ed on I e8.ft bes...
.. En'e, Ihe federal erent number. Of other identifyi"1
number ...tlned by If\, Jeden' spon,ori". .,e"ey. II
the advance or rettntN~m."t is lor more .h." on.
r...nt 01' other _"..ment. inle,. HI": the", show ..,.
a.,fet.,. amounts. Oft . MINt.,. Iheet. list ..eft
'f."t or .,reem.", number Ind ,,,. Fed..... Ih.,. of
oun.". ml"e ',li"I' .n. l'lnt or "reement.
6 En..' Ihe employer 6den'ificaUoft number 1.lifnltd by
tho U.S. '....m.. R....nu. S.Ni... or Ih. FleE (in.lllu.
\lonl ...... il "",ul'lt" by Ih. Fod.,., ..eney.
Thtl ....c. il re..rved tor In account number 01 crth.r
lO.ntl""n( ....m_ Ih.1 m.y be ...,,,,od by Ih.
ree.pte"'-
8 Enl., Ih. monlh, day, .nd y.., lor Ih. b.,innin. .nd
.ndine o' t"'e "..nod COftf'ecI in ....il request. If the ,..
Quest is tor .n Idvance or tor both an IdYlnce .nd r..
Imbursement. IftOw ,"- period that the advlnce ...n
cower. If t". reQuest .. tor r.i",bun,mlnt. show the
period 10. _Ich Ihe relm""..emenl I. "",,unlod.
Hote: The Fed..... "DOnlOrine '.cencie. hlw t.... opt_ of
'eQuirin. recil>i_. 10 c:omlll.l. II..... 11 0' 1 Z. but not
both. "I'''' 12 ''""'&1:1 be used wh_ only . minimum
.mount 01 intormetion is needed to mlk. an .dvlnce
.nd oullay In_lioio co_inod In lI.m 11 ..n be
cOtai,," In I "me.,. nunn<< trom ath.,. report...
11 The .....".,.. of lhe _a. ....u"'n. (.). (b), .nd (e). i.
to I'tOVide ItNC. tor .......t. cost ttrwlkdownl wtte" a
""';ecl has been 1I1'""od .nd ....cllle\eod by _""'.
lunction, or KlMl)'. /I OCIdlll...... coIu",n. .re n_ed,
II.... EnC",
UI' as """1 .ddilio"a' '0"'" as rtMCted and indue.
p.,. numb<< in ,plce pr"OYfded in upper lipt: """"-
.....r. the summll')' 'OCltS ot aU pror""'I. functions.
01 leh",hll Ihoujd 1>>- shown in tt'll "t.o~r' column on
the ...,t pel'.
11. [nt" in "&I of dlte". the month. day. end yel' 01 the
~ndlnl of ttM KCounlinc penod \0 whit''' this amount
.0..... E,"1ff PRtI"'''' out..~ to d.,. I,.et 0' r,'und&.
,ebel". .nd dlscoun'.). in ",. IpprvPl1ele columnl.
For NQUeStl rweoared Oft . Cllh b..". outt.YI .r" 1"_
au'" of act..., us" dllbunem"u for ,oGch an<<l WI'Ve
fen. lhe emount of .Mired ..pensel en.fled. the
v..... 01 in.Und conlribub~, .ophed. .nd t"e amount
of ca,,, .....nces .nd peym..,.. "'Ide to subcontrac.
tOl'l ..... wbfecipt......'. ro, reouests P....nd on an
acented ..penChtUN be.... oull.,. .re the s.um 0' the
actu.' ea." dlsbun.etnentl.. "\,, amount of Indirect e..
penSel incurr.. .nd the net 'ncr.... (or dec......) j"
Ih. amounls _ by lhe ,..i!li.nl 10' ._. .nd other
praoerty rec..ved .nd 'eM' ,.Me" p"I""0II'fted by em.
ptoyees. c:ontl'llC'ft. :lubl"'"'''' and oth.r pa~L
lIb Ent.r the cumullln.. Ulh income ree..... to da'e. If
reauests ar. pntCMM Oft . Clsh Mils. For r"v....s
prepared on en eccrved Cl:CMMItUA beus. ."t., 'h.
ClffllVYtift income _med to dete. Und.. ''''hft' beai'.
enter only t.... .moun' a,""icabl. to ~m incom.
that -.c ,,"uir'" to be ".. tor the Drajec:t Of Dro-
If'.m by the te""" of the '''',,' Of OCher ..,..ment.
11 d Only _en _ki... ........1. lor _ne. ".,.mant..
.nter tho lOtol ..h,...," ...-nt ot ...... OUCIeys t h.1
_ be mad. dun... lhe IIOriocI ......NCl by Ih. _ane..
13 Co",plete Ih. certifocolion belOre ou_1tiinl Ihi.
.....u.st.
.
A-110:11
'\
I
J
Office of Management and Budget Circular A-110 (7/30/76)
Apptaveca by Offte. of M.n.,.m.", .nd PAGE or
OUTLA Y REPORT AND REQUEST rOR REIMBURSE. eudlet. No. 8O-R0181 f'AGItJ
MENT rOR CONSTRUCTION PROGRAMS 1. TVlI't or .lourST L IlIASII 0' "CQUtST
(S.f i..",..".e"''''''' " bGck) o (lHAI. o ll'AJlnAl DCA... o ACCRUA"
J. HOC.A" J~HSOlttNO AceNCY A"O OIllQANIZATIONAL, I:UWlHf TO <to '[D(lUt.... OllA"' o. 0'"(. .. ,......tI~ ""'1'''(H' IttQUeST NO.
WHICH '"" lIIIUOlll1 IS IU.Wln&.D lO[H""",,,O HU".III AI&ICItID
IV 'lO~ AGENCY
... .~~~'e~';.l" IOlNnnCATION /7. RlC'''l..T IoC'COU..T OR OT"l. IllMelt CCWDD .. "'II .....
IDItNTIP"YINQ ""..eu
'110M ........ ~ .-r' TO I",................'
I. ~ECI''tl"T OItGANILUION 10. II'AYU f...... ..... ......... .. .... fI 411...... .... ... "
H_ , N_ ,
Ne. ..... N.. ...
..- , ...... ,
Cu,. 011o.
.I.... .-4 .lI..... ....
~,,. C... : z." c-.:
II. ST loTUS 0' F\JNDS
PROGAAMs--rUNc:TION~T'V1T1ts
CLASSlrlCA TlOH (0) (.) (e) TOTAL
..0
.. Admin..t....;.,. ~.oe"'.. $ S S , $
b, .....lIml...oy "Den..
c. Lind, u",ctur.., rtatll...r_IY
d. An:hited.ul1Il _"rine.,;n, belle ,... I
I. Olll.r I",IIltor:\ur.' In8ln..rtnl I... I
I. Prolor:\ InsDeCtlon ,_
I. Land d.....IODm.nl ,
II. A.toe.UOft ..0."" I
I. ReJOCIItton p.yments to IndivlOu.Ja .nd
tallsineSMa
I, Demolition .nd ..mov.1 .
k. Conltnlc:tioft and project ImPf'D",""ent ,
cosl
I. Eaui_nl
m. Misc.U.ne", cost
n. Tot., cumula''''1 to 41'1 (Iurn Of'lllIft I
"",", m)
o. Deductions for prorram lftcoml I I
D. Net cumulative to dati (Lin. n minul I
line 0) .
I
Q. Fede,.' .n.... to d.'e I
to Rehabilitation I'I"'S (100% roim- I
burnm.nl)
s. Tor.. 'ad...., sll.r. (sum 01 Ii.... Q I I
.nc:t ,)
L Feeleral Dlym...ts P',".IOUI., ... I I
Que,ted
u. Amoun, ntQuested lor ,,,imbuneme,,. 1$ 1$ $ Is
Y. P",cen'I,' of pftysicat comoletion of
P"'i.ct % % % %
12. CERTIFICATION S.CN...'....C. tn AUTHO.'ZED a''''''''HG I OATe OlOO"T
O"",QAI.. .u...'ntD
I c."'Iy ,"., 10 ,". bas' at my knowtodl.
.nd beli.' ,,,. billed costs or diSburse' .. RECIPlEHT ""~ 0" ~..."1'tD NAMe. A"D TITLt I TlL[....O..l IA_ ......
m.nts .r. in accord. lice with ft.. terms -.-.- .... ..-.
Of '''e oroied and th.. 'he """bun.ment
reDre.lnts the Fede,.. sh.r, dUI which SIGNATUlltE 0' AU1'MORIZCO CUlTtn-,..o OAT't IICHtD
has nOI been pr8'i'iousl)' reQuested 'nd O"ICIAa..
thlt, an insoedlOft .... been per10rmed b. Reoresl!'ntative
and ,II work is In ,ccordanc. with Ut. cer1ify,nl \0 line /'lU"MO"[ IA'_ ._
Ily. n"ED 0.. ..IJI:INTED "Awt NeD tl1 Ll
1m" of the 8W11n::1. ..-.... .-. ____I
- -
211 IQI
eXHIBIT ~
S'''NO.''O '0"" :71 t7_16~
,........~.~.... ,., p~.... ,. ..........-..... .l"OC! "u~
A-110:12
..
"
I
I
Office of Mamlgement and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
PIN,. type Of prinlleglbly. l\em. J. <4,5.8.9, 10, lls. and 11v 8ft self.uplaMlory; specific inslructions
lor oth.,. Item. _ as to/lows:
"-
...wy
Ill.'" .... ___ __ " ,... ,_ Ie ""-C. ....
--...----.....-.-
~
z
I...... ___ft. ......".,., .re ........., eft .. ~
-""- -- ---_.
.
....., .. .~, ~fft,utleft .umbw .....fMd by
'''. U.S. ''''.'''' 11__ _,_ net (Inn_on)
_oW __ ~_ f"'_ _J.
T
""" -..... .. ~ tar .11 aoeaunt """'.... ... .......
_Illy.... __ _ -.. .. ...._ .... ....
~.
11
-no. _ .. _I _ ~ '''''''''''' (e) Is ID
"....... ..... .... ..".n.. __ w-~ ....... .
..,.. ~ .... - ,0.- ~ -..-_ by _
,....., '-" - ~. " ...- -... ...
.-..cfed, u.. .. ......, .o.fIttOft.' ..... .. ........ ~
.......... _ -... __ __i.. _ fttri'I':
-. .... _". _.. .J .. _"'..... "'....
-..... _ ._ltI to. __ 1ft '100 __
....11..... ... .... _ ...... All _ .'" ~... -.
. aumu_ .......
11..
-- --'aolloat_ _,.. _......,
-, -. . -- ."" ..... _ admm'otnI'_
-----._ne.___
-- .- by _..... ~Ion. Nee .-
...._ne..~__._-__
Ill>.
.... - --....1.. _ _. _i... .""
......nc. -..... ......,. _ -101o ai"""1 _
-. ."" .. - -- _'''''' pr;or ID -'
.........A LA
n.
- all _ d'.-" ~ --.-__"'1.
lion .. """. ~ _ _ ........ n.tot4f-
_.
IW
.... ~ _loat_.. .,.,,11_1....-
u.
Em.. - _11_'" ...--... _ Do MIl
11OCI...,........_ _ _ .... tI.
11' [............................ __. of _-.~ .nI\..n....
--
III [,..,............................... ..r....."R_.1 .,
-........... -.,. _ .-,..,.c io.....,
ill' _I'lL lh. ~ ~ .. ..... ...........
- --, -- wit.. -;0. __.
-.. - - - -....." - --...
_k.
1110 ~____..__
........... ........... MId .-.t at'Wt3 ., ..... 4( ......
Inc-_I.Do______
_ion~__._
-"'__110____..
l1i tmer.ttoe ._ne" __ _ _ ~_
-- '" '"_ _c. 1_. ~_
c.ma. 1M 110ft,.... .....,....,..
1-
I~
II'
~ _ ...... ."" _ '" ........,.. '" Ih.
___ - .--, ... I...... pony colOl'-on ",.
..ay ___ no...-. _"'" or '_'.
-- '- -........ .."". No proo,_. '"'"' ,...
.... fII ...... or ... ~ of "NCtUI., aftOv6d t>-
_... 1D I.... _; "'"'"'" ..a_in 1 _
_ if __ br _ r......I.....,..
Ilk
E.... fhoM efnOlllftta lUOC"''' wftft the .ctu.. con"
..-..ction 011. "'fttOfll _. 01' rwwtoralion 01 . facility.
N.J. iftClucte ;" 'hila CIII~. '''e amounts 'Ot pro;..et
'm~~ IMdlI .. ~ n""'l. I."'chc"p."c.
- .......
III
EIIl_ .__ "" .R ............10(, both bad ...d "'toY.
.-. .......... eqw..........c u"" Jot conatl\lC1.ton. 'Ot
..."'"... __1Il1y _"eel "'-'tory I.COI... buill.
110 _10 ....... .,......... -_1oIe G.."., .N'''. ...d
~-~
11...
- - _ .... all _ _ ......_,.,. "'....
--.
II..
E:Ioter I'" - ...""'.._ ._11I 10 Get. wille"
........ ....... ....... of ..... . ",.,.n m.
1M
- - - _ne of _..... _ .POIiad 10
.... ....nt << CIllntf'Mll ~ ucept Income I""'
- - - ~ Id--, _ . _not. .hM 01 pe_
--.""tno-"-_.
n..
...... .... ... CI.I,,",~ lmoufIC ra d.te whCh ahou6d
De the ........ ....... Oft II,.. n mlnul th. amount
-_0.
11'1
--- -... - ._ne _.. on II... Po
111
E:Iotw 1M - of .....loIlltario.. ,...., peymelll'
-. - -.. _..'" .......Iion p_..
100 __ ~ ~ Ute ,......., ...-y.
111 E__ _ _.. F_..I po_a ~oIy
_11____ ""-. '.o",.
--
n. - - _ _....... __ _ _1M'
-. .". ---... "'-"d _ .... cu,..ltftC. ~n
... ....... ....... ... __ . a... t. I' d'....."l. ...
.....-.--
1.11. To.. -...... ~ _ .-- --. _ is ,..
-- - - _n 01 _ P.....IWn. Th. "",.to
......... ... t... IICtUeI .... .... ..",. Ie submin.ed \a t....
F_._.
12lo To... -....-... ~ _ __ ..._....11_
.... ... ~ .. .... ......... of ~ comg'.tlOft
- ...,..,...... .... ill ... ...... of '1M .,.,nt Of .c......,.nt.
A-110:13
,
1
Office of Management and Budget Circular A-110 (7/30/76)
ATTACHMENT H.-CIRCt1I.AR No. A-IIO
MONfTORINC AND R1:rORTINC rROCRAM
rJ:RF"ORMANCE
I. This attachment sets forth the proce-
dures ror monitoring &nd reportlns prosram
perlormAnce of recipients.
2. Recipients ShAll monl tor the perrorma:lce
under srants and other agreements &nd,
,,'here appropriate. ensure that time sched-
ules are being met, prOjected work units by
Ume periods are being &ccompllshed, and
other 'Perrormance goals are belns achleyed.
ThlS review shall bc made ror each proSrllm.
runctlon. or actlvlt.~' of each asreement aa set
rorth In t.he, approvec1 application or awarc1
document.
3. ReCipients shall submit a performance
report (technical report) ror each agreement
that brleny presents the fOllOWing Inrorma-
tlon ror each program, runctlon, or i'ctlvlty
Involved ... prescribed by the Fec1eral. spon-
soring agency:
a, A. comparison oC actual accomplishments
with the goals establlshec1 ror the perloc1. the
:'Indlngs of the In\'eStliator, or both. lC the
output. of programs or projects can be readily
quantlned, such quantltatlve data shoulc1
be related to cost data for computation oC
unit costs.
b, Reuons why establlshec1 goals were not
met.
C. Other pertinent Information Incluc1lng.
when approprIate. anal)'sls and explanation
of cost overruns or hIgh unit costs,
. 4. Except aa provided In a and b belo"',
and. In SUbparagraph 3a( I ), Attachment 0,
recIpients shall submit the performance or
technIcal reports to Federa.! sponaorlng agen-
cIes anc1 the FInanCial Status Reports coy-
erlng the same perIOd In the rrequency estab-
lished by Attachment G ot thIs CirCUlar and.
where 8oppropr1ll.te. a nnal technIcal or per-
formance report 8oft.er complet.lon 0: the
project on a date speclfte<l by t.he Fedual
sponsorIng agency. The Fec1eral sponsorIng
ILrency shall .prescrlbe the frequency with
...hlch the performance reports will be sub-
rnlttCii "1th the rcquest for ad\'ance or relm-
)ursement. when th80t form Is usec1 In lieu
): the FinancIal Status Report, Except as ;:Iro-
'Ided for In paragrllph 5 below, perrormance
'eports shall not be requlrec1 more frequent.ly
~an quarterly or less frequently than an-
lually. Fec1eral sponsorIng agencIes mal'
"alve the requIrement for recIpients to sub-
nIt performance report.s with the ftnancla.!
eports unc1er the follOWIng circumstances:
a. When the reCIpient Is required to sub-
nit a perrormance report with a continua-
,Ion or renewal application.
b. When the Fec1eral sponsoring a.gency de-
ermines thaton-slte teChnIcal Inspections
nc1 cert.lfted cOlnpletlon dl'.tll will be sum-
lent t.o evaluate constructIon projects.
c:. When the Federal sponsoring agency re-
uests annual nnanclaJ reports on a nscaJ
ear basu but It Is necessar~' to get. annual
regress reports on a calendar year basIS.
5. Between the reqUIred perrorman':e re-
ort.lng c1ates. 'events may occur th~t have
i~nlftcant Impact upon the project or pro-
~am. In SUCh Instances, the reCIpient shRII
lrorm the Fec1eral sponsorIng agenc}' as soon
I the follOWIng trpes ot condItions become
nown:
a. Problems. delAYS, or ac1\'erse conditions
lat wl\l materIally affect the ablllt~' to At-
_In program ObJectives. prevent the meet-
'S 0: time schedules anc1 goals, or preclude
Ie attainment of project work units b,. es-
,bUshed time periods. ThIS c:!!l'Closure shall
! accompanied b~' a statement 0: the nctlon
,ken, or con templal.ec1, and an" Fec1cral as-
,tance Z1eec1ec1 to resolve the sItuation.
b. Favorable developments or e\'ents that
,&1)le tIme schec1ules to be met sooner than
Antlclpl\ted or more work units to be pro-
c1uced than Orl!;lnAlIl' projected.
6. If an)' performance review conductec1
br the reCipient c1L,closes the need ror cha.nge
In the bUdget estimates In Accorc1ance with
the criterIa established In Att.achment J Co
this Circular. the recIpient shall submIt a re-
quest for bUc1get reVision.
7. The Federal sporulorlng agency shall
make site visits M rrequentJ)' as praCUCable
to:
&. Review program accomplishments anc1
management control systems. anc1
b. PrOvIde such teChn1cal assistance as
mal' be requlrec1,
8: FederRI sporulorlng AgenCies shall submit
proposed technical and perrormance r~ports
to the Omce or ManAgement and Buclget tor
approval In accordance with the report clear-
ance requirements or OMB CIrcular No, A-40
as re"lSed.
AnACIlMEJIl'T I.""'"-CDlCU!.AA No. A-IIO
rATMEJIl'T REQUIRJ:MENTS
1. ThIs attachment esta.b1lshes the re-
qulrec1 methocla of maklnr payments to recip-
Ients. These methoc1s wl\l mInImize t.he time
elapSlnr between t.he dIsbursement b)' these
recIpients and the transfer ot tuncla rrom the
United States Treaaury to these recipIents
whether such dISbursement. OCCUI'll prior to
or SUbsequent to the transrer at runc1s.
2, Pa)'ments can be made to reclplent.s
through a letter-ot -crec1lt, an ac1vll.nce by
Treasury check. or a reImbursement br Treu-
sury cheCk. The rollowlng c1eftnltlorul apply
lor the purpose of this attachment:
.., l.cUer-ol-CrerLit.-A letter-ot -crCiilt Is
an Instrument cert.lnec1 by an authorlZec1 om-
cl..1 0: .. Fec1eral sponsorIng agency that au-
thorizes a reCIpIent to c1raw funds when
needec1 rrom the Treasury, through OIL Fec1-
era I Reserve bank anc1 the reCipIent's com-
merCIal bank, In accordance with the prOVI-
sIons ot Treasury CIrCUlar No, 1075, aa re-
vlsec1.
b. Actva.n.ce by Treasunj ch.eck,-An ac1-
vance bv Treasury check Is a payment mac1e
by a Treaaury check to a recipIent. upon I~
request berore outlays are made by the
recIpIent., or through the use ot predeter-
mIned payment schec1ules.
c. Reimburseme71t by Treasury ch.eck.-A
reImbursement by Treasury check la a Treaa-
ury check paId to a reCIpient upon requut
for reimbursement from the recIpient.
3. Except for constructton grant.s ..nc1
other constructIon agreements ror whiCh op-
tional payment'methoc1a are authorlzCii, u
described In paragraph 5, the letter-or-crec1lt
method shall be used by Federal sponSOl'lng
agencies It all of the follOWing conc1ltlons
exist:
a. If there IS or wUI be a COt'Itlnulng rela-
tionshIp between a recIpient. and a Federal
sponsoring &fencr tor at least a 12-month
period and the total amount or advance pay_
ments expected to be recelvec1 "'Ithln that pe-
rloc1 trom the P'ederaJ sronsorlng agency Is
$250,000 or more, u preserlbCii by Treuury
CIrcular No. 1075. For JOint funded project.s
the Treasury has authorIZed.. dollar criteria
of 5120.000.
b. if the recIpient has eSt.8bllshCii or dem-
onstratec1 to the Pec1nal sponsoring agency
the willingness and abllltr to maintain pro-
cedures that. ,.,111 minimIze the time elaps-
I ng between the transrer Of funds anc1 their
dISbursement by the recipIent.
c. It the reclplent.s ftnanclal management
s\'stem meets the standarc1s ror rund con trol
and aceountllblllt)' prescribed In Attachment
F to thlS Circular. "Stanc1arc1s for FInancial
Management. S)'stems."
". The methoc1 or advanclns funds by
TreMur\' check shall be used. In accordance
"'Ith the prol'lslons or Treasury CIrCUlar No.
~
J
A-110:14
1075, when the recIpient meets all ot the re-
quirements specified In para!:raph 3, above.
'excel't tho~e In subpArasraph 3a.
5. The reimbursement by Treasury check
method shall be the preferrec1 methoc1 Ir the
recipient does not meet the requIrements
!peClnec1 In subparagraphs 3b and 3c, above.
At the optIon or the Federal sponsoring
agenc)', thla methoc1 may also be used on any
construction agreement. or If the mAjor por-
tion ot the progl&m Is accomplished through
private market nnanclng or FederAl loans,
anc1 the Federal I\S!IlstAnce constitutes a
minor portion or the program. When the re-
Imbursement method Is usec1, the FederAl
sponsoring altenc,' shall make pa~'roent
within thlrt)' da~'s arter receipt or the bllllns,
unlen the blllln!: Is Improper.
G. When the letter-ot-credlt procec1ure Is
used, the recipient shAll be Issued one con-
solldllted letter-or -credit whenever possible
to cover antlclpAtCii CAsh neec1s tor All grAnts
anc1 other agreements awarded by the SpOIl-
sorlng a!:enc}'. Ukewlse. to the extent ponl-
ble, when th'e ac1vance by Treasury check
method Ia used. advances shoulcl be cun-
solll1atec1 (pooled) ror All grants and other
agreements made by the sponsoring agency
to that recIpIent. . ,
7. Unlell! otherwise requlrec1 by law. Fed-
eral sponsoring agencies shall not withhold
paym~nts ror proper charies made by recipi-
ents rot any time durIng t.he project or pro-
!tram period unless (IL) a recipient has railed
to comoly with the pro!;!ram objectives, awarc1'
condItions. or Feder'lL1 reporting require-
ments: or (b) the recipient Is Indebted to
the Unltec1 States, anc1 collectIon ot the In-
debtedness ""11I not ImpaIr accomplishment
or the obJect.lves or a project or program
sponsored by the Unltec1 States.
Unc1er such conc1ltlons, the sponsorIng
agenc)' may, upon reasonable notice, Inrorm
the reCipient. that pa)'ment.s will not be made
for obligations Incurred after a speclftCii date
until the condItions are corrected or the In-
c1ebtec1ness to the FCiieral Government. Is
IIqulc1ated.
A"M'AClIMI.:NT J.-CDlCtJ!.A1L No. A-110
REVISION or rtNANe1A1. r!.ANS
1. ThI3 attaChment sets forth crIteria anc1
J:rocec1ures to be followed b)' Federal spon-
sorln~ agencies In requIring recipIents to re-
port 'c1evlatlons from nnanclal plana and to
request approvals for nnanclal plan re~
vIsions.
2. The ftnanclal plan Is the nnanclal ex-
pressIon of the project or program as ap-
proved c1urlng the application andlol' IIwarc1
process. It may Include either ~e Federa) and_
non-Federal share, or only the Federal share.
d:penc1lng upon sponsoring agencr require-
ments. It should be related to performance
for program e"aluat.lon purposes whene"er
Appropriate and requlrCii by the Federal
sponsoring agency.
3. For nonconstructlon awarcla, reclplenta
~hall Immediately request. appro.,als 1rom
P'ec1eral sporuorlng agencIes when there Is
reuon to believe that wIthin the next seven
dAYS a revision will be necessary tor the
followIng reasons:
a. Changes In the scope or the obJect.ITe ot
the project or pro~am.
b. The need for addlt.lonal Federal runc1-
lng.
c. The transfer of amounts budgetCii rcr
Inc1lrect costs to absorb Increat<es Indirect.
costs or vice "enll, It approval Is required
by the Federal sponsorIng agency.
c1. The expend I tures AS require appro"al In
accorc1ance with 1"MC 73-8. "Cost Prlncloles
ror Educational Institutions," For all other
awards. appro\'al requirements for other
Items of expenditures ma~' be ImDosec1 H they
are conslstcnt with those In FMC 73-8. No
othcr requirements ror speclfte Items may be
I
Office of Management and Budget Circular A-110 (7/30/76)
Imposed unless a c1evlatlon bu been ap-
proved by tbe Olllce at Man&Gement LIld
Budget.
e. ReClplenLsplan to trILn&ter tunds ILlIotl.ed
tor training allowances (direct paymenta to
tralneea) to otber caLegorlea at expense.
.. None at the subataotlve progl'&DUDaLlC
work Wlder a grILnt or other agreement may
be subcontracLed or transterred without prior
approval at tbe Federal sponsoring agency.
Thlaprovlslon docs not apply to !.he purchaae
ot supplies, maLerlal, equipment, or general
support aervlce8.
5. The Fed.eral Ilpoll5Or1ng Ilof;ency mILY
&Iso, II.t Its option, rC5trlct transfel'll ot tunc1s
&.mong c1lrec1. COo'lt cn.tegorlcs for .....n.rc1s In
whlcb the Federal shan: exceeds 1>100.000
when the cumuln.tlve II.IDount ot suc:b traM-
fel'll exceeds or Is expected to excee4 live
perC6n.t at Lhe tot&! budget AS 18.'1t II.pproved
b)' the sponaorlng agency. The SAme crlLerla
shall n.pply to the cumula.tlve &mount ot
transters among prognlDl8. tunctlons. Anc1
ILotlvl ties when bUdgeLec1 separaLely tor an
""'Md, e~ept !.hat tbe Federn.! sponsor1ng
OoGency shall perm.1L no trllollSter tbat would
cauae any Fec1eral approprla.tlon, or part
thereof, to be used tor purposes otber tban
those Intended.
6, All other. changes to nonconstructlon
buc1gets, except tor the cbanges c1cscrlbed
In paragraph 8, belo...., do not require ap-
provAl, This Incluc1cs tbe uae ot recipient
tunas In turtherance at program objectlvc.s
over and above the reclplentmln.tmum sbore
IncludlKl In the a.pproved buc1gct.
7. For construction awarc1s, recipients
shall request prior a.pproll'&!s promptly tram
Fec1eral sponsoring agencies tor budget re-
visions wherever:
&. The revision rcsul ts tram c:hanges In
the scope or tl\e objective at !.be project. or
program., a.nc1
b. The revision Increases tbe budget
..mounts at P'ec1eral (unas needed to com-
plete !.he projeet.
8, When a Fec1era.l sponsoring agen:y
makes an awuc1 that provides support,tor
bot.h construction and nonconstructlon work.
Lhe Federal sponsoring agcncy may require
the reCipient to request prior approva.l tram
the Federal sponsoring &Gency before m:lklng
any tunc1 or buc1get tJansters between tl1e
two types of work SU;:lpc1rteci,
9, For both construct1on anc1 nonconstruc-
tlon awarc1S, . Fec1eral sponsorl~ agencIes
shAJI require recipients to notUy the Fed-
era.l sl':lnsOrlns agency promptly ....henever
!.he amount ot Feder&! ILutborlZcd tunas IS
expec"loCc1 to exceed the needS at !.he recl plen t
by more than s5.0000r live percent at the
Federal awarc1. whichever Is greater. This
not.llicatlon ""UI not be requ1rea U applica-
tions tor ac1dl Llonal tunc11ng &l'e aUbmlt,te:l.
tor continuing grants or contra.c:ta.
10. When requesting approval tor buc1get
revisions, reCipients shall uae the bUc1get
torms tha.t were used In the application
unlCS$ a letter request will sumce.
11. WithIn 30 c:llenc1ar c1nys trom the c1ate
at receipt o( the requcst tor buc1get revi-
SIons. :F'ecIeral sponsorIng ILgencles shall re-
Vie'" the request and notUy tbe reC1plcnt
whel.her I.hebudgct revisions have been ap-
provlKl~ It the revll<lon Is stili under con-
sldera.t.Ion a.t the end of 30 caJenc1sr c1ars
the Fccleral sponsortng ",ency shall lnIor~
I.ha recipIent In wrltinr at !.he da.te wben t.be
reC1plent mILY expect the c1ecL'Iloll.
ATTACHIlU:HT K.-Cancua:..R No. }'-IIO
CLOSEOUT rnOCD:llmES
1. This atl.achment. prescr1bes untlorm
closeout proCeclures tor FederILI grane., and
other I\greemcnts with recipients.
2. The tollowlng definlLlons sball apply tor
the purpose o( thL'I attachmellt:
a. ClDocout.-The closeout o( a grILnt
lLGTeemellt III the proceNl by whlcb a Fl!derILI
spoWlOrl~ Ill;cnC"J' c1eLerml.nea I.bAt all ILp-
pllcable administrative a.ctiollS aDd all re-
qUIre<I worlt at tbe ~ment have been
completed by ~be ntClplellt. &.Dd the Peeleral
sponsoring agency.
b. Date of c:ompletioft.-'Ibe daLe at com-
pletion Is tbe daLe on whlcb all work under
(:T'ILDta &.Dc1 otber BCTeemenla Ia compleLed or
the c1aLe aD l.be awarc1 document, or any
'supplement or amenclDlent thereto, on wblCh
Federal sponsol'llhlp enCiAl.
c. DuallofDCd costs.-Ols&llowccl CORia are
those charges to a gr=t or o~bcr "4:reement
that the Pcderal spoD-'IOrlng al:cncy or IL'I
reprcscnLaLlvc dcLermlncs to be unallnw-
able, In AccorclanCe WI!.h Lbe applicable Flld-
eral cost principles or othcr conc1ltlons con-
tllolncd. In ~be agreementll.
3. All Federal sponaorlng agenclcs shall es-
tabllsb cJooseout proce<lures tbat Include ~he
tollowlllg requl1ementa:
a. Upon request, tbe Peeleral sponsoring
IL[:ency sball mAke prompt paymenta to ..
reclp.leDt tor allowable reimbursable costa
unaer !.he grant or otbcr agreement being
clOlMld out.
b. 'Ibe recipient shall immediately retunc1
any balance.o( unobllg&ted (unencumbCrcc1)
cub tbat tbe Feeleral sponsoring agency hAS
a4vanced or paid ana tbat Is not au\.borl?.ed
to be retalllec1 by the rectI' lent tor use In
other grant.B or other agreemcntll.
c. The P'ec1eral sponsoring agency sball ob-
tain tram !.he recipient Within 90 calenc1lLr
days atter the date o( complet1on o( tbe
agreement all ~nanclal. performance. ana
otber reporta required u the conc11tlon ot the
"4P'eement. The agency may grant extellSlons
wben requested by the recipient.
d. Wben authorIZed by the gTIlnt or otbcr
agreement, the Fec1eral sponsoring agency
shall m.&ke a settlement (or any upwara or
c10wnwara adjuatments to the Federal sbare
o( COllts a(ter these repona ue rccc:lved.
e. The recipient shaU Account tor any prop-
erty acqulrccl with- Federal tunc1s. or re-
ceived trom the Go"ernment. In accordaDce
with \.be provisions at At.t.acbment N to !.hIs
Circular. Property MaDagement SLandaras.
t. In the event a 1111&1 audit haa not been
performed prior to tbe closeout at the gran t
or other &gTeement, the PeeleraJ sponsoring
""1I.genC"J' shlLll retain !.be right to reco..er an
appropriate amount after tully conalderlng
the recommenc1atlons on c1isallowecl c:a5ts re-
sulting tram tbe Iinal auc1lt.
~. Suspensloll anc1 termination procec1urcs
are contained In Attachment L to tbls C1r-
culu.
ATTACRMI:HT L.-<:mcvLAa No. A-II0
SUSPEHSlON .utD T1:IlMUfAT20H PIlOC!:DUlU:S
1. 'Ibis attacbment prellcr1bes unUorm
suspension anc1 termination pr:lCedures lor
Fecleral granta and other acreement.ll with
re::lplents.
2. 'Ibe tollowlng deOnltlons shaD apply
tcr !.he purpc:se o( this attachment:
a. Tc:rmi_tion,-The termination at a
grant or othcr agreement means the CAn-
cellation o( Federal.spolUOOrshIP. In whale or
In pArt. under an agreement at any time
pr10r to the daLe o( completion.
b. SIUpc:7Uioft.-The SUSpension at a grant
or other agreement IS an action by a P'cderal
spollSOrlng e.geocy that temperarUy SQ.'1-
penas ~eral spODa:lrsblp under tbe grant
or other agree~ent, pending corrective I\C-
tlon by the recipient or penc1l.Dg a deciSIon
to terminate tbe grant or other agrecment
by !.be Federal sponsoring agency.
;1. All Fec1eral sponsoring agencies shl\lI
provlae procedures to be toUowed when a
reCipient has taUed to comply with the terms
I
A-110:15
o( tbe grant or other !L!;Teement "nd condi-
tiOns or fttandards. When that occurs. the
Federal sponsorlnl: &Genc)' m,,}", on reMon-
!Lble 1I0tlce to the recipient, suspena the
grallt or otber agreement, and ,,'Ithhola tur-
tber paymentll, prohibit the recipient from
IDcurrmg adc1lt1onal obligations at (unds,
penc1lng corrective ILcllon bl' the recipient. or
a decision to termination In accorc1a.nce "'Ith
paragraph 4. The l"ec1eral sponsorIng agency
shall allow all necCS$ary and proper cost.B
that the recipient coula not reaaonablv ILvola
during the period at suspension provlc1~a that
they meet the provisions o( the applicable
}-'ederILI co.~t principles.
4. Fed ern I sponsorl ng llgencles sh..1I pro-
vide tor the s)'stematlc settlement or ter-
minAted grantll or other agreements Includ-
log lobe tollowlng:
a. Termination far ealUe.-The Federl\1
.ponsorlng agenc)' nil\Y reserve !.he rIght to
terminate ILny grant or other a!;Teement In
wbole or In part at any time bet ore the date
at cOm;lletlon, whenever It Is aetermlned th"t
the reCipIent has tailed to comply with the
conaltiona at the agreement. The Federal
sponsoring a(!ency shl\1l prompUl' notlt). the
reclplen\ In WTltlng o( the determination anc1
tbe reasons (or the termination, together
with the effective c1ate. Payments made to
recipients or recoveries bl' the Fec1eral spon-
soring agencies unc1er grant.B or oU\er &Gree-
ment.B termlnnted for cause ~hl\1I be In ac-
cordance With the legal rights ana liabilitIes
at the parties.
b. Tcnni_tion far conuefticncc.-The Fed-
eral sponsoring agency or recipIent mal' ter-
minate grantll and other agreemcnts In whole
or In part. when bo!.h paT'tlcs agree that the
contInuation at the proJect would not pro-
c1uce benedclal results commensurate with
the turther expenalture at tunas. The two
partlcs shallag'l'ee upon the termination cnn-
altlons, Incluc1lng the eftectlve dR.teand. in
the case ot pR.rtlal terminations, the portion
to be terminated. The recIpient shall 110t
IDcur new obligations tor the termlnatec1 por-
tion Arter the elJectl\'e aate, !lna shall can-
cel as man)' outstanding obligatIons as pos-
sible. The Federal sponsoring agenc)' shall
allow (ult crec11t to !.he recipIent tor the
Federal share o( the noncancellable obliga-
tions, properly Incurrec1 b)' the reCipient prior
to Lerm In a.tlon ,
ATTACHMENT M.-CIIlCt1'....a No. A-II0
STANDARD roaM roa Al'PLTINC roa
J"El)EIlAI. ASSISTANCI:
1. This atta.chment~romulg..tes a st.ana-
ani torm (SF 424) 1.0 be used by public and
'prlva.te InstltutlOIllS at higher eaucatlon,
public and private hospitals ana other quasl-
public and private nonpront orglLnlzatlons as
a tace sheet tor applications "'hen ~ppll'lng
tor Federal gTllnta under programs covered
by Part I, Attachment A, OMB Crlcular No.
A-9S. In ac1dltlon, agencIes are partIcularly
encouragea 1.0 et.xend the use ot SF 424 to
conunon progr&m$ ..~th State and local iOv-
ernmenta where this torm Is now required bl'
FMC 74-7.
2. The SF 424 may also be \Ised. on an op-
tIonal basiS, to hllnll the requirements at
OM>> Circular A-95 tor a not:ncatlon at :n-
tent, trom applicant to clearllll!houses. th~t
Federal asslsua.nce "111 be appliea tor. Loc~1
or State clearinghouse procedures wUl govern
the use at the torm tor thiS purpose.
3. The st.anaard form will also be used 1)\'
FeelerAI agencies to report to the Clearing:
houses on major actions tl\ken on ll;Jpllca-
tlons revIewed by clearinghouses In acct)rd-
ILnce with OMB Circular A-95, and to noUt)'
Stal.Cs at t:TILnts-ln-a1a a""ILrded In ILccord-
ance ....I!.h Treasurl' Circular 1082.
I
J
Office of Management and Budget Circular A.110 (7/30/76)
FEDERAL ASSISTANCE
1. TYPE 0 PREAI"I'LICATlOH
0'
ACTION 0 Al'I'LICAT1ON
(M_.,... 0 NanI'tCATJOfC OF IICTDfT (t)pl)
,...,....,....
-I o. RUORT Of F!DEJW. AC110N
4. LEGAL APPLICANT/RECIPIENT
A-110:16
0"8 "'"p.......1 No. 19-ItOfl.
1. -L1.
CANT'S
A/'Pllo
eAT~
.. II\IMIU
1. nAn:
~-
nON
IOEPfn.
1'1 VI
19
.. _.u
.. DAn:
r___
.. DAft
ASSICNED
J"..... .....,,..
.....
19
z.....
llIo...
I. 'WtAAL E....LO'l'lR tOCNTt'ICATlOH NO.
.. AoIoli..nllh_ :
.. O".ftill~lioA u.u :
c, 51''''/'.0. 8Gl :
d. Cily : .. ......1\' :
I. S'"" : I, ZIP CoolIe:
-
i
!
t
i
!
I
i
b. eo..... p_ INo_
4 .....,....... /'1o.l :
7. TITLE ANO OESCRII"TION Of APPLICANT'S PROnCT
10. AREA Of PI'IOJI!CT IMPACT (No_ 0( _, __
S...... ....1
11.
P~D PUNOIN6
6-
PRO.
GRAM
( r....
'od....J
c-lo"
I , I.' I I I
.. NUWBtR
b, llTlE
e. TY~ ~ .....LICII>HT fftECIPlENT
"-SIa.. M-c-Muolly Adl... Ac-r
.....Itfth.. ~ Nir." E.dvcatio... tMtHvh...
e-SutlllUu .01 J- h'd". Tribe
Olttricl ~... (lI,..ftflll:
o-c...ntr
[-0"
I-ScaoaI 01_
-D,*,aI ...- 0
IoIrlct SoJIr ._..,....,.. "e,",
'" TYPt: QT .......STANCE
-.1. '_I 0-.....1'_
1-&._,_"'0( ~...
~.
..t.r S,."..... [IJ
,....,.. lo.......(.)
11. Em"''''Te9 ~
BER O"F t'IlUOHI
BVlEFITlNG
11. TYPE
"-Il_
...........
or Al"f't.tCATlON
c-Rowi..... [........_""...
~.li....lI... 0
,&'"t... .PJ"'OP'....h J.u....
c. I'&!RIIL ;
b. /lPI'I.ICANTI
c. STATE I
d. LOtN..
.. OTl1U
to TOTAl. J
zo. FEDERAL ACltNeY TO
~. CONCIUSm"'AI. DISTRICTS OF:
,DO .. Al'NIlAHf ... ~llQner
.08
DO 11. PROJECT. START ! 111. I"ftOJECT
. lMTt 7_ -"'" ..." OURATlON
.00 It M_fIy
.00 JL W=Ih~~T'JO 7_ ___ Mil
.00 I 'EDER"'L AGENCY ~ 19
RECEIVE REQUEST (A'_ C", 4_ Ul' ~
z%.
I
.. THE
! APPLICANT
~ CEIlTI'P"ES
~ ; THAT ~
11
It ZJ I .. rrHD /Wolf AlIO TllU
; CERTIFYING1
1: REPRE.
M SItNTATIVE
"" AQ~CY H.\M-E
c. 1. I". b. eI. "" kn_t... lid ""'01,
_It. i. "'i. ,.,..,.IicatIOft/IIlOUcaU... In
""', ..11 c:ar,..t. MI. oocum_ .... -.
du." .utho.i.. IIr .... ........i.r bodr 01
n.. lroHc.aal II'll tit. '",HU-c wiN ........
wI.h "'. ,..._ __ ~ lJte __
.n.. ~ IC'DI'O"Nd.
26. OR~NIz.ATIOtMJ.. UNIT
I
i ZSI. ADORESI
i
r
r
..
i
)1.
31. ACTION TAKEN
o .. AWAROED
o b. l!EJ1CTEO
o c. IIt'TVRMO 1'0<<
AMEKCU!lfl"
FUNDING
S
&. PIO!Ml.
.. Al'PUtAllf
c. STAft
d. LOCo\~
.. OMit
~ 0 (, OfF1!RJlEll
:: 0', W1Tl1DRAWN
I ~!:RAL AGENCY
"'-"95 ACTION
I.
TOTAl.
',. I- a.~h'l ...... aeft.., .... CDnlI......1a ,......., ..... d.,inrhou.. .... ....
"d"M. " '....'" __.. I. ... ...It "-0;_ 01 p~ 1,.01018 CII...... .A-N,
" .... .... It It MWot .....
1.5. TYPE 0' CHANCE IT... u. ... J")
A-"_" DoH"n 1'-01.... (S,.....,1'I:
1-0__ DoIl.n
1;-...,.... Du"l_
~..,.... D.......
[~_...,i..
&""..,. .ppro- r-rrI
",.;ow ...u.... (,) L..1.......l...
1'. EXISTING !'EOEML 10ENTlflCATION NUM8ER
21. AEMAIlKS AOOEO
0"" 0 No
.. 1/ ,~~ " 0... Ch",".. "-95 _ ,'''''...,_ _ _,n..:. .,;._... Ie i..
.tnactl.. u........ .. IPPfIOI"'1 .,............. 'Ad ,n ,_po_. IN anaca.cS:
N. r..
.-.
R__.
.e~
III 0 0
CD 8 0
(11 , 0
b. IIllNATURt .. DATE SIOlfED ,
Y_r ..-u. .... .
It 1
1117. AOMINIST""TIVt O"ICE
Z5. APPLIc,... )'_ _ ...
TIOff
RECEfVEO l'
2&. !'EDERAL APPLICATION
IDENTIFICATION
JIG.
I'EDEAAL OI'l:ANT
IDENTIFICATION
"1- _... ...
S4.
Sf ARTIftG
OATE 1t
)6.
!NDIN~
OATE 1t
)7. REMARKS
y- ~ ...
.00
.00
.DD
.00
,00
.00
U. ACTION DATE ~ It
~~ CONTACT 1'011 AOO'TIOftAL ".I'Ott...A.
TION (X__ .... ........- .........,
r_
..-u. &."
AOOEO
o Y.I ONo
.. rtD[RAl. ACEKCY "-" OFl'IClAl.
......... .... ...,w..- _.)
..............-- _...., ,~. ....,.... , ,,"" ~.I
"
I
]
Office of Management and Budget Circular A-110 (7/30/76)
A-110:17
SECTlOtf IV-REMARKS (PlccuarcfcnTlU the prvpcr iurn KUN" from SutUnu I. II or III. if GJ7PIicGbl.)
to "'I
~T^ND^RO I"QRM ~24 PAGE 2 (1C-7~)
I
.I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:18
GENERAL ItlSTRUcnONS
This is a multi.purpose standard form. First, it will be used by applicants as a required facesheet for pre-
applications and applications submitted in accordance with Federal Management Circular 74-7. Second. it will
be used by Federal agencies to report to Clearinghouses on major actions taken on applications reviewed by
clearinghouses in accordance with OMS Circular A-95. Third. it will be used by Federal agencies to notify
States of grants.in.aid awarded in accordance with Treasury Circular 1082. Fotlrth. it may be used. on an
optional basis, as a notification of intent from applicants to clearinghouses, as an early initial notice that Federal
assistance is to be applied for (clearinghouse procedures will govern).
APPUCM{T PROCED\,;nES FOR SEenOH
Applicant will complete all items in Section I. If an item Is Mrt appliCllble, write "NA". If additional SpaCIII is needed. insert
an asterisk ...... and usa the remarXs 5Cldion on the back of the fonn. An mcp&aNltion follows for each item:
Item
1. Marl( appropriate box. Pre-eppllcatiQn and aPl'IIC11-
tion guidance is in FMC 74-7 and Fedenll agency
prognlm instnlC:tions. Natlfiootion of intent ~id.
anCe is in Circular A-95 procedures from clear.
inghouse. Applicant will not usa "Report of Fedenll
Action" box.
2a. Applicant's own control number, If desired..
2b. Date Sec:Uon I Is prepa~.
3a. Number assigned by State cleeringhouse. or If defe-
gated by State. by areawide clearinghouSlL All re-
questS to Fedenll asencies must c:ontDin this ldenti.
fier if the pro((n1m is CiO"I'Cl"Dd by CircuLar A-95 and
required by applicable' State/areawide clearing-
house procedures.. If in doubt. consult your doer.
inShouse.
3b. Oete applicant notlned of cleoringhO\IM Id;mtifier.
4a-4h. Lesal name of appllcent/raclplent. name of primary
ol'1ranizational unit ",11id1 will undertBhe the aslst-
ance activity. comp::;'te address of app(icent. a~
name and tOlophone number of ~ who cen pr0-
vide further infonnlltion about this request.
5. Employer identlflcatlon number of applicant as as-
sllJl1ed by Intamal R8YUnue SerW:a.
6&. Use Cabllog of Fedenll Domestic Assistzlnce num-
ber assigned to prognlm under which as:sistzlnca is
requested. If mo~ than one prosram (e.g.. joint-
fund ins) write "multiple" and expLain in ramal1c:s.'
If unknown, cite Public Law or U.5. Code.
6b. Prognlm title from Fedoral ~talog. AbbnMllte If
necessary.
7. Brief title and approprillta description of project.
For notification of intent, continue in ramafils see.
tion if necessary to conwy proper description.
8. Mostly self-explanatory. "City" includes town town.
ship or ather municipality. '
9. Check the type(s) of assistanCIII requested. The
definitions ot the tenns are:
^- Basic G/'1Jnt. An original request for Fedenll
funds. This would nat include any contribution
provided under a supplemental gnInt.
B. SupplementatGnlnt. ^ request to iocrel2se a
basic gnlnt in c:e~in cases where the efi8ible
applicant CIInnat supply. the required matching
share of the basic Fedenll prognlm (c. g., grants
awarded by the Appalechian Resionel Commis-
sion to provide the app!iCllnt a matching share).
C. Loan. Self explanatory.
'tem
10.
11.
12.
13.
D. IMUrenca. Setf expLanatory.
E. Other. Explein on rem:a11c:s pagD.
Gowtmmental' unit when! Msnif\cant and moening'
ful impact could be obserYed. Ust only Lal'1rest unit
or units aftectlld. such ItS Sbrte. county, or clty. If
entire unit afhoc:ted. list It nrther than subunits.
Estimated number of persons directty benefiting
from pro;ect.
Use appropriate code ~. Definitions are:
A. "8llI'. A submittal for the first time for a new
pro;act.
B. Renewat. An extension for an adctttJonal funcllns/
bud8et period for a project having no projected
compllltjon date. but for wtlk:h Fedenll support
must be renewed aech year.
C. Revision. A modtflc:lltion to protect natunl or
- scope wtlictl mil)' result in funding chanse (in.
~ or decrease).
D. Continu8tion. An ClXtension for an additional
fundlng!budi'Dt period for. a pro~ the agency
initially agreed to fund for a definite number of
yeen.
E. Au~. A requirement for additional
funds for a pn)fec:t previously awarded funds in
tha same funding/budget period. Project natu~
and scope unchanged.
Amount requested Dr to be contributed during ,the
first funding/budget period by each ~ntribut~r.
Value of in.kind contributions will be Inctuded. If
the action Is a change in doItar amount of an exist.
ins Inlnt (a ~ion or augmentzrtion). indicate
only the amount of the change. For c1ec:ruses en.
dose the amount in pan=ntheses. If both basic and
",pptem'ental amounts are included. breakout in
renerk:s. For multiple proenlm funding. use totals
end show progr1Im bn=Dkouts in remar1cs. Item defi.
nitions: 13a. amount requeste<l; from Feder.sl Gov.
emment; 13b. amount appticant will contribute;
13c. amount from Sblte, if applicant is nat a State;
13d. amount from local lovemment.. If applicant is
not a locat government; 13e, amount from any other
source:s. explain in n=mar1cs.
14a.
14b.
Setf expLanlltDry.
The c1istrict(s) where most of actual worl( will be
ac:complished. If city-wide or Sorte-wide. covering
~I districb. write "city-wide" or ..State.wide."
Com~ only for nNislons [Item 12c), or augmen.
tIrtions (item 12e).
15.
STANDARD FORM 424 PAGE 3 (10-75)
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:19
Item
16.
17.
18.
Approximate date project expected to beFin (usually
aUOCial~ with estimated date of availability of
f\lnding),
Estimated number of months to co~lete project
atter Federal funds are available.
Estimated date preapplicatlon/appllcation will be
lubmittod to Federal aroney II this project requires
cleerlnrhouM reoview. If review not required, this
date would usually be ~me as date in Item 2b.
Item
19.
20.
21.
EJelsting Fedenll Identlllcatlon number II this I. not
. new request and directly relates to a pnlvlous
Fedenll action. Otherwise write "NA".
Indiute Fedenll ageney to which thIS request is
addreued. Street address not required, but do use
ZIP.
Check appropriete lYllr. as to whether Section IV of
form contains remafllS and/or additional nlmarks
are attachod.
^PPUCANT PROCEDURES FOR SECTION \I
Applicants will alwa~ complete Items 23a. 23b. and 23c. II clearinghouse review Is required, Item 22b must be fully com.
pleted. An explanallon follows tor aach item:
Item
22b.
23&.
Ust clel1ringhous~ to which submitted and shoW
In appropriate bloc~ the status ot their raponses.
For more than th~ clearinghouses. continue In
remarks s!lCtlon. All written comment: lubmltted
by or through cleeringhouses must be attached.
Name lInd title of authorized representative of legal
lIppliCllnt.
Itwm
23b.
23c.
Selt explanatory.
Self oxplanatory,
Note:
AppllCllnt completes only Sections I and II. Soctlon
III is completed by Fedoral agancies.
FEDERAL AGENCY PROCEDURES FOR SECTION 111
24.
Executive depertment or tndependent ageney having
program administra~ion responsibility.
Self explanatory.
Primary o~ani%ltlonal unit below depertment level
having direct prognlm management responsibility.
O11ica directly monitorinli the progT'llm.
Use to Identify non.award actions whel'1l Federal
gT'IInt identifier in item 30 Is not appliCllble or will
not suffice.
Completa addl"es':l of administering office shown In
Itom 26.
Use to identify awa", actions where dlnerent from
Federal application identifier In item 28.
Self explanatory. Use remarks soction to amplify
where appropriete.
Amount to be contributed during the fi~t f\lnding;
budget period by each contributor. Value of in.kind
contributions will be inctudocl. If the action is a
change in dollar amount of an existing Il'1lnt (a revi.
sion or augmentation), indicate only the amount of
change. For decreases, enclose the amount in pa.
rentheses. I! both basic and supplemental amounts
are included. breakcut in I'1lmarks. For multip~ pro.
gram funding, use totals anc show program break-
outs in remarks. Item definitions: 32a, amount
awarded by Federal Government; 32b, amount ap.
plicant will contribute: 32c, amQunt from State, if
applicant is. not a State: 32d, amount from local
govemment if applicant is not a Io<:al government:
32e, amount from any other 50U rces , explain in
remarks.
09te ilctlon was taken on this roquest.
Date funds will become available.
If applicant.supplied infonnation in Sections I and II needs no updating or adjustment to nt the flnel Federal action, the
Federal agency will complete Section III only. An explanation. for aach Item follows:
Item
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
Item
35.
Name and telephone no. of ageney persan who can
provide more infonnation regarding thl~ assistance.
Date after which funds will no longer be available.
Check appropriate boll: as to whether Section IV of
form contains Federal remar~ and/or attachment
of additional remarks.
For use with A-95 action notices only. Name and
telephone of pe~on who can assure that appropri-
ate A-95 action has been taken-I! same as porsan
shown in Item 35, write "same". I! not appliCllble,
write "NA",
36.
37.
38.
Federal Agency Procedures-special considerations
,
A. Treasury Circular 1082 compliance. Fe40ral agency will
assure proper completion at Sections I and 11\. I! Sectioil I
is being completed by Federal aseney, all applicable items
must be filled in. Addresses of State Information Recep.
tlon Aiencios (SCIRA's) are provided by Treasury Depart.
ment to each ageney. This form replaces SF 240, wnlch
will no longer be us.ed.
S. OMS Circular A-95 compliance. Fedenll ageney will as.
SUI'1l proper completton of Sections 10 1\, and 1\1. This form
is required for notifying all reviewing clearinenouses of
major actions on all programs reviewed under A-95.
Addresses of State and areawide clearinghousn art. pro.
vided by OMS to each ageney. Substantive differences
between applicant's req\l'est and/or clearinghouse recom.
mendations. and the project as finally awarded will be
explained in A-95 notifications to cleOlringhouses.
C, Special note. In most, but not all Stutes. the A-95 Stat'!
clearinghouse and the (TC 1~' SCIRA are the same
office. In such ClIses. the A-95 awud notice to the Sta~
clearinghouse will fulfill the TC 1082 award notice reo
Quirement to the State SCIRA. Duplicate notification
should be avoided.
STANDARD F"OflM 424 PAGE 4 (10-75)
I
Office of Management and Budget Circular A-110 (7/30/76)
. ATI'ACltMENT N.--CIRCI1t.AIl No. A-lID
rllOrERTY MANAGEMENT STA"'DAIlOS
I. ThLs Attachment preserlbrs uniform
sta.ndards Go\'ernlnG ",aIlA~ement or prop-
erty turnlshec1 by tho Federal Go\'ernmellt or
whose east WAS ch..,.ged 100 .. project sup-
por\.ed by a Fec1eral gr&nt or other R@'reemenc..
Federal sponsorlnl; aGencIes shall require re-
clplen~~ 100 observe Lhese sLa.ndnrds unc1er
crAnLs anc1 other al;TeemenLs a.nd Sl1411 not
Imp050 addlUonal requlremenLs unlesa spe-
cllICIlII)' required tly Fec1erlll law. TIll' recipi-
ent mAY use ILs o",n properLy mall)\gement
standArds And procedures provldec1lt observes
the prO\'lslons ot this AttachmenL. This AL-
tachment Also I\pplles 100 subreclplenLs lI.S
rclerred 100 In pafl\l;rAph 5 oC the basic Cir-
cular.
2. The Collowlnl;dellnltJons Apply tor l.be
purposo ot thLs attILchlllent:
II. Ilcal propc:rty,--.ti-CAlpropen)' melUls
lAnd. lncludlng lanc1 ImprovemenlA, SLruc-
tures and a.ppur\.enlUlces thereto, but ex-
cluding movablo mAChinery and equipment.
b. Pcr80n41 propcrty.-Personal property
oC ..ny kind except real property. It may be
tanglble-havlnl; ph)'SICa.1 cxlsl.c.nce. or InLan-
glble-hs.vlnl; no physlcs.1 eXistence. such ...
ps.l.cnts. Inventions ..nd cop)'rll;ht.s.
c. Nonezpcnl1able pc:rsoJl41 p7"01Jcrty.-NOD-
expendllble personal property melU1S tangible
person..1 property having a useCul liCe oC
more than ono ye..r and an acquisition cost
oC $30001' more per unit exempt that recip-
Ients subject to Coat Accounting Stanc1arc13
Boarc1 regulations may use the CASB st&nd-
uc1 oC r-SOo per un1t ..nd useCul Ille oC two
years. A recipient may use Its own dellnltloD
oC nonexpenc1able personal property provided
that tbe de~ltIon wo.ulc1 at least Include all
tanglblc personal property D.8 defined above.
<1. Ezpend4ble personal propertY.-Exllend-
able personal property reCen to all tangible
personal pro.perty other than nonexpend&ble
property.
e. E:r:z:ess p~rty,-E:l:ces5 property meaDll
property under Ule contTol ot any Federal
agency that, as determined by Ule head
thereoC. Is no longer required tor ILs neec1S
or the c1lscharge ot Its rcsponslbllltles.
t. A.cquuiuan cost 0/ purcha.scd nonc::.
peMable per8On41 prOperty.-Acqulsltlon COllt
ot aD Item of purchASec1 nonexpenc1able per-
SOnal property means the net Invoice unit
price oC the property Inc1 uc1lng the cost or
modl~C&t1ons. attachmenLs. accessories or
aUXUlllr)' Ilpparatus neces.sary 100 mue' the
propertr usal:lle tor the purpose tor which It
WILS acquired. Othe:- chRJ'l1es lIuch ILS the cost
ot Installation, transportation. taxes. duty
or proLCctlve In-transit Insurance. shall be
Included.or excluc1ed from the unit acqwsl-
tlon con In .ccordance with the reclplent's
regUlar account1ng practices.
g. Ezempt p1'Operty,-Exempt property
means tangible personal property acquired In
whole or In 'put with 1"ec1eral funds. and
UUe to whiCh Is vested In the reclpll'nL with-
out further obligation to thc l"edera.l Govcrn-
ment except as provlc1cd In subparllgraph 6a
below. Such unconditional veStlnl; oC tlUe
wUI bep\lrSuant to any Federal lel;lslatlon
that pro\'ldes Lhe rederal sponsorlnJ; lll;ency
with ru:lequn.te ..uthorlt}..
3. Rcal property.-Each Federal IIpor.sorlng
al;ency shl\ll prescribe requirements Cor re-
clplenLs concerning the use and dlsposlLlon
of rl'al propeft.)' acqulreu parUy or wholly
under ~ranLs or other allreemellts, Unless
otherwL~e pro\'lded b~' SLlUu\.e, such requlrl'-
:nr III S. a.s a minimum. shall C'On\..'1ln lhe
:"110""111' :
A. TI~le to real propert)" shall veSL In the
reclplenL Subject to the condition thllt the
reclplcnt shall Use Lhe real propeft.~. 10r Lhe
author:Zed purpOse ot Lhe proJecL.' I\S Ion!: as
It Is Ileeded.
b. The recipient &hall obtain 8ppro..al br
the F'edera.! sponfiOrlnl{. I\4lcney for the w;e of
real property In oLher proJeeta when tbe re-
cIpient determlnC$- that Lbe properly Ls 110
loncer needed tor the purpose oC the Orll:II1AI
prOJect. Use In other proJecLs Shall be IImlLCd
100 thOAe under oUler tederally spollliO!'ec1 proJ-
eeLs (I.e.. grants or oUler ,,<<reemenLSI or pro-
l:rams that have .purposes cnnalatent WIUI
LhOllC authorlZeC1 for aUPJ,ort ~y the Jo'ederal
sponsoring "4;eney.
c. When the real property Is no Ion Iter
l1eeued as provldec1 In A anc1 b above. Lhe
recipient ShAll request dl"posltlon In.'\truc-
tlons trom the Fllderlll spon.....rlnc Ar.enC)' or
Ils &ucces:oor Pederal sJool1!\Orlnr. I./:ellcy. The
Pederal Ilpon~rlnG lIl:ency shllll observe the
rOllOWIIll; rulu In the dlsposlLloD Ul.~Lruc-
tlOIlS:
(I) The recipient may be permILL<:d 100 re-
Lain tl tic &!ter It compensatc& the I"ederal.
Government In an Amount computed. by ap-
plyinG the Federal percenl.age of participa-
tion In tile cost of Ule orl.,n&1 project to the
tall' market value of l.be property.
(2) The recipient mar be dlrecLCd 100 ..ell
tile property unc1er guidelines provided by
the Fcc1eral spal180rlng "Geney anil pay tbe
l"l::1era1 Government. an amount. computed
by applying the Pecleral pen:c.otage oC par-
tlclpaLlon In Ule cost oC the original proJcct.
100 Ule proceccla trom we (aCter deducting
actual and reasonable selling anc1 fix-up ex-
penscs. It any. frol'D tbe SAles proccecloS) ,
When tbe recipient Is authorl:r.ed or required
to sell the property. proper &&les procec1ures
&ball be ellt.abllllhed that. provide for eompeU-
tlon 100 tbe. extent practicable aud. reauJt \.D
the highest poSSIble return.
(3) Tbe reCipient may be directed t.o trans-
Cer title to Ule propert.y 100 Ule Federal 00.-
emment. provided that. In such cases the
recipient sh&11 be entitled to compeDl56t1on
compu-t.cd by applying the reclplent's per-
centage ot participatiOn In Lbe cost ot t.be
progral'D or project t.o the currant CaIr market
value ot Ule property.
4. F~41J1-OtIJftC no~ablc persoft4l
propertJf.-ntle t.o Cederally-owned property
remains .cated In t.be Fe:lera.l aovernment.
l\cclplenr.s shall submit. annually au In.en-
lOry IIsUDg of Cederally-owned property In
their custody 1O Ule Federal SpoD80rlnC
a;en!lY. Upon completion ot t.be DCl'eemCDt
or wben Ule property is no longer needed.
the recipient shall report Ule property to
the 1"ec1erat" sponsoring acc.ocy Cor Curl.ber
al;ency utlllzatlon.
It the Federal sponsoring agency baa no
turther need for the property, It shall be
c1ec1are:l excess and reported to the GeDera.l
Services Ad.m1nlstrtlon. Appropriate dlsJXll'l-
tlon InstrUctions ,,"11 be \aued 100 the re-
cipient atter completion ot the Feden.l
agency revlC'w.
5. Ezempt pro".,-t.,.-Whc.o statut.or'y au-
thorlLy exist&. <<e.g_ P.L. ~834. 42 17 ..s.C.
1882) title to noncxpenc1able personal prop-
erty acqulrd wtl.b project funds. ahall be
.esLc:! In the reCipient upan acqUisition un-
less It Is detennlncc1 that to do so Is not In
furtherance oC the objectives oC the Federal
lIpon:oorlng "Geney. Wben title Is ves\.e:l In
the recipient. the recipient shall have no
other obl\gat1on or accountablllt.y 100 the
Fec1erlll Government for ILs use or c1lsJ'OllI-
tlon except BS provided In Ga below.
G. Other no:nczpcn44ble property.-When
otl1er nonexpcnc1able tAn!;lble person&1 prop-
crt)" Is AcqUired b)" a recipient wll.b project
rund5. tItle shall not be taken by the Fc:!-
t'r:ll ao...t'rnn't'n: but Shall "'l'st In th!' re-
cipient "ubJect 100 the tOUo"'lnl; conditions:
a. Righ.t to tran.'/er tiUc.-For Items oC
nonexpcndable personal property hAvlnl: A
unit acqUiSition cost oC $1.000 or more. the
Federal sponsoring n.!:ency may rcser.e the
rll;hL 100 transler the tlLle 100 the Federal
I
A-110:20
Go..ernment ur 100 8 third party n..mt'd by
the )o'cc1erlLl aovernmenL when I<uch third
I.uty Is other......'\e ell!:lble under exlstln!;
stALutes. SUCh rcservAtlOll shall be subject LO
Lhe rollo..lnl: standards:
(I) l"be property shall be appropriately
IdentlCie:l In Lhe l;rant or other I\(:reement
or otherwise macle kllown to tile reclplenL
In wrltllll;.
(2) The ~eral spolUOOrlnl; I\l:ency ShAll
ISlIue disposition .1n..tTuctlons within 120 cn.l-
eullar clays n.C\.er the end ot the Federal sup-
porL oC the proJect Cor which IL was I\cqulred.
It the FederAl I<pon!lQrlng A!:ency /AUS to IMue
dlsro!lltlon InsLruetlon.. withIn Lhe 120 CAl-
endar clay perlud. Lhe recl plen t shall I\ppl r
~he sLandarus or sub'JlarIlGTaph.s Gb ..nc1 Gc
1<5 Approprla\.e.
(:I) When the Fed crill sponfiOrlnc agency
.ellerclses ILs rll:ht to Lake LlLle. tbe personal
property ahall be subject to the provisIons
ror Ccc1eraJly-owned nonexpendable proper~y
dll'CuSIICc1 In par&4;1'aph "" above.
(4) When title Is transferred el.ther 100 the
f'le(leral Oo.emment or 100 a third parLy.the
provlalona oC ..ubparacnaPb Gc(2) (b) should
be tollowed.
b. Uae 01 atlter tangible n07lc::pen.l14ble
pro".,-t" lor uohil:h the recipient h.a.t title.
(1) Tbe reclplent shall UfoC the property
In Ule project or progra.m lor whlcb It WI\8
acquired as'IODl: IllS nccd.cc1. whether or not
the project or pJ'Oftram contlnuC5 to be sup-
ported. by Pcc1eral runc1s. When no longer
needed Cor the original proJect or prOl;Tam,
Ule recipient Shall use Ule property In con-
nection with ILs otl1er tederally I<ponsorec1
nct1V1Ues. In the tollowlng order oC priority:
(a) ACtivities. In Ule Collowlng order oC
priority:
(b) ActiVIties sponsored by otber Federal
ac;enacs.
(2) Sh",t:4 uae.-Ourlng the .tlme that
nonexempt DOnexpenc1a.ble perllOna.l proper-
ty Is hclc1 for WIC on Ule project or program
Cor wblcb It was acqULred. Ule recipient
sb&11 make It ava.Uable for use on other proJ-
ecLs or programs 11 such oUler use ...111 Dot
Inl.crfcn: with Ule work on the project or
proGTabl tor "'blch Ule property was origI-
nally acquired.. P'lnt preterence Cor such
oUler use shall be gl.en to other proJccr.s or
programa aponsontc1 hy .t.he :P'ederll1 agency
Ulat t1nanced Lbe property: llCcond preter-
cace &ball be gl.en to projects or programs
lIpOnaored by oUler Federal ~encles. It the
property Is owned by the hderal Govern-'
ment, use on oUlcr IlCtlvltlcs not sponsored
by the ~cral aovernment shall be per-
mlaslble IC autborlzed by tbe Federlll agency.
Uller charges &boulc1 be cOll5ldered Ii appro-
prlal.e. .
c. DUpo.nti07l 0/ other nonc:zpe~bLc
pro".,-t".-Wben Ule recipient no longer
n0cd.8 the property as proVIded In 6b above.
the propcrl:y may be WMK1 for other actl'1l-
tiCS In accordance wlUl t.be tollowlng stand.
arcls :
(l) NOfteZJ'C'ld4bte pro".,-ly with a unit
GCq1&L.siti07l coat o/leu than S 1.000,-The re-
cipient may use the property for other actlvl.
ties without relmbuncment to the Federal
Government or sell the property anc1 re-
Lain the proceeds.
(2) N07IC%J)l:ftd4blc personal property with.
a unit acq.uL.sition coat 0/ S 1,000 or marc.-
The recipient may retain lhe propen)' for
other uscs provldec1 that compensAtiOn Is
made 100 Ule orll;lnal Fcc1eral sp<lnsorln!;
ac;:ency or 11.& successor. The amount of com-
J>enMtlon shall be CtOmp\ll.cd b)' l\1'pl)'lnl,:
thl' pt'l'C'ent.At;e nf I"t'<Icml pllJ"lIt'lJ"":lon In
~hl' cnst oC the orl(:lnal project or pro!;rr.m to
the cUTTent fall' market value of the properLy.
If the recipient has no nc:cc1 for the proper~y
and Ule properLy hM Curt.her use value. the
recipient shan request dispositIOn Instruc-
Lluns from tbe original sponsoring a!;ency.
I
Office of Management and Budget Circular A-110 (7/30/76)
'I'be !"e<le",,1 Iponlorlng I\~ency shlLlI drter-
mIne ....hether the property can be u~ed to
meet the a!=enC)"s requlremenl.s. Ir no re-
quIrement ex IS \.. within that I\genc)'. the
avaUabll1 ty of the proper.t.y shall be report-
ed to the General Services AdmInIstration
by t.he Federal agenr.y to delAlrmlne ...bether a
requIrement Jar t.he property esls\.5 In othe.r
FederAL l\~encl"". TIle Federal spon50rlnl;
agency shl\lI Issueln...truetlonll to the reCipi-
ent no lllter tban 120 dl\Ys ACter the reclpl-
ent.'1 request I'nd tbe lollowlng procedures
shall govern:
(al 11 lIO lustructed or It dl~pOllltlon In-
structions nre not 11I,med within 120 ealen-
dl\r dl'Y5 IIlter the reclplent's request. the
reCIpient shAll ~ellthe property I\nei reln\-
burse the Federal Ilponsorlng agency I\n
amount computed by applyln!: to the SAles
proceeds t.he .percentAge 01 !"ederl\l pArtici-
patIon In the cost. 01 the orIgInal project or
pro!;rllm. However. the recipient shall be
permlued to deduct I\nd retain Irom t.he !"ed-
eral share 1\ 00 or ten percent 01 the pro-
ceeds, whlcbever Is greater, lor the recIPlent's
selllngand handling ezpenaes.
(b) 11 t.he recIpIent IS Inlltructed to sblp
tbe propert.y elsewhere. tbe recipient shall
be reImbursed by tbe benentlng Federal
ILgency with an amount whIch 15 computed
by appl)'lng the percentage of me reCipIent's
partICIpatIon In the cost of the original grant
proJect. or program to the current laIr market.
..&1ue at the propert)., plus any reasonable
shIppIng or Int.enm st.orage cOlll.s Incured.
lc) If Ule reCIpient IS Instruct.ed to other-
wise dispose at the property, me recIpient.
shall be reImbursed by t.he Federal sponsor-
Ing agency for .uCh costa Incurred In 11.S
dL~pOlllt.lon.
d. Property manope""cnt stondorlU lor
nonc:pendGlllc pro,,~rty.-'I'be reclplent.'a
property management standarc1s lor nones-
penelable personal property shall Include the
follo....lng procedural requlremenLa:
( 1) Property recorels shall be m&1ntalned
accuralAlly and shaH Include:
(a) A elescr1ptlon 01 the property.
(b) Manufact.urer's serIal number. moGel
number. 1"eaeral Itou number, nauonal
atock number, or oUler lelentUlcatlon num.
ber.
(c) Source of the property. Including
grant or ot.heragT'eement nwnber.
(d) Whether tItle vesta In t.be recIpient. or
the Feder..1 Oove-nment..
'(e) AcqUlslt.lon date (or d,,1Al recel..ed, It
the propert.)" was furnlsbed by t.he Federal
Oovernruent.) and COlt.
(f) Percentage ("t. the end of the budget
yea,r) of Felleral participatIon In the cost ot
t.he project or progrAm lor whiCh Ule prop-
erty was acquired. (Not "ppllcable to prop-
M"t.y furnished by the Federal Oovernment.)
un LocatIon, use and condltlon of the
propert.)" and the date Ule Inlormatlon was
r.port.~.
(h) Unit acqullIltlon cost.
(I) Oltlml\te dllposlt.lon d..I.&, Including
date of dIsposal And !SAles price or t.he met.hod
used to determine current. lair m"rket v..lue
....bere " reCipient compen.~ates the Feder..1
"90noOrlng agency fc>r It.$ obare.
(2) Proper~y o....ned by Ule Tederal 00..-
ernm.nt mwt be m&rked to IndlCat.e Ted-
.ral ownership.
13) A phyalca.1 Invontory of property ohall
be taken ant: the resul\.5 reconciled with the
propert.). recorela Pot JelLSt once e..ery two
yeArs. An)' dlnerences between qUAntitIes de.
termlned by the physical In.poctlon and
those sho..'n In t.he accountlng recorela shall
be Invest.lgated to determIne t.he causes of
the dlll'erence. The reclplcnt. sh"ll. In connec-
tion with the In..entor)', verl/y t.he e"lstence.
current. Ut.lIl2.atlon. ",nd contInued need for
the property,
(4) A control 8y.tr.,m IhAII be In e:hct to
In.ur. adequn.t.e oo.fo1;unrds :.0 ?r~"ent 1C'<Ul.
d.magc, or the/t of the property. Any 10M,
damRge, or thelt of nonrxpendAble prop..rt:r
ShRII be Invel<tlg.ted and fully documented:
It the property was owned by the I"ederal
Government. the rertplent. ohall promptly no.
Uly the Tedera' sr"nsorlng agency.
(S) AdeqUAtely malntenRnce procedure.
.hnll be Implemented to keep tbe property
In good condItiOn.
(6) Where tbe recIpient 15 aut.horll~ed or
required to sell the property, proper 8Ales
proced\.re. shl\lI lie established ...hlch would
prOvide ror competltlon to the estent prnctl-
el\ble and rcsutt In the highest pos..~lble re-
turn.
7. I::Z:l'cndable l'crsonol properlv.-T1Ue to
e"pendable personal property snail Test In
the recIpient upon Il.Cllulsltlon. If then 'Is a
residual Inventory of auch property exceeding
$1.000 In totnl aggregAte lair ml\rket value,
upon terminatIon or completlon 01 the grant
or other agreement. And the property Is not
needed lor ILn)' other lederally sponaored
project or program. the recipient Ihall retain
Ule propert.y lor u...e on non federally spon-
sorcc1 ACt.lvltles, or 58\1 It, but mWlt. In eltlTer
. calle. compensat.e Ule Federal Governmont
lor Ita shAre. The amount ot compensAtiOn
shAll be computed In the same manner ...
nonespendable personal propert.)..
8. Intonvible proJ.lcrty.
a. Inventions anct potents.-It ILny prosram
produces patentable Items. patent. rlgh!...
proces.ses, or Inventions. In the coura. of
worlt lponaored by Ule Federal Oo..ernment.
such tact. shl\lI be prompt.ly and lully report-
ed to t.he Federal sponsorIng agency. Unless
there III a prior AgT'eernent. bet.ween the re-
cipient. And t.he FederlLl sponsoring agency
on dlsposltlon of such Items, tbe FeelerAI
spon.wrlns agency shall determIne wheUlcr
protection on the InvenUon or discovery shall
be lOught.. The Federal sponsoring agency
will alao det.ermlne how Ule rlshta In the In-
vention or discovery-Including rlshts under
any paLent. LMued t.bereon_hall be a\located
and a4mlnlllteredln order to protect. the pub-
lic Interest coDlSllItent. with "Oovernment
Pat.ent "Policy" (President's Memorandum
for Heads of Executl..e Oepartment8 and
Ageocles. August 23, 1971. and ltatement. of
Government Patent Policy .. prln~ 11:1 311
!",R. 111889).
b. CopyriVIl.U.-Except U otherwlae pro-
vIded 10 the terms and conCIt.lons of tbe
agreemeot. the aut.hor or the recipIent o~an-
Izat.lOn Is free to copyrtr:ht any boOk.. pub,
IIcat.loM. or other COp)":"I(:htable mAurlal.
de..eloped 10 the cou.ne of or under a F~-
eral agreement.. but. the Pederal .ponaorlnc
agency shall reserve a royalty-free. nones-
clualve and 1rTe...oca.ble right. to reproduce.
publlah. OJ" otherwise use. and to authorl..
oUle" to "\Jae. the work tor Go..ernment pur-
pons.
ATTACMMEJfT O.~JIlCVLoUl No. A-IlO
"OC'V.nnnrr .TAJfDAaDII
1. Thll' r.ttachment proVides standards tor
u.e by rcC'lplenta In est&bllehln~ procedures
for the procurement. of .uppIMl. eqUIpment.
const.ruct.lon and oUler .errIC.. with Federal
IUIlc1s. Then standard, are turnlshed to en-
sure th.t .uch mat.erlals and services ..re ob-
taIned In Ion eflectlve manner ..nd In com-
plllLnce with the provIsIons ot applicable l"ed-
erAI I.... and executive orden, No addlt.lon.1
procurement. standaras or requlremenu .h.lI
be Impoaed b)' the rederal aponsorlng agen-
clt'S upon reclplenta unless opeclnc..lly re-
q\llred by Federal StILt.ute or esecut.t..e orden.
:. The standards contaIned In t.hlS Attach-
ment dO not relieve the recipIent. or the con-
tract.ulLl responsibilities Iol"lslng under lLa
contr&C\&. The recipient Is Ule re&pon!:Jble ..u-
thorlt,.. wIthout recoune to t.he P'ecleral apnn-
sorlnl: &genc)' re!:Ardlng tbe settlement. ..nd
.1It1s:l'CUon 01 ..1I contrActual And ..dmlnu..
.1
A-110:21
tr"U..e Inu.. .rlllng out or procurements
enterrd Into. In .upport or '" grant or other
8F:reem..nt. Thl. Inel.ele. dl~putes. cl..lm...
protr.l<l.S al 8wI\rd, oo..,rOl .....luAtlon or oth..r
mattera of .. contractual natuft. MAttera con-
cr.rnlng vloll\tlon of lAW Are t(l be referred to
slleh lOCAl. State or l"ederAI authorl.ty .... may
have prop.r )\IrleC1leUon. .
3. ReClplenl.S may u.e their own ptocure.
ment pollcle. and procedur.... no....ever, All re-
clplenu Ihl\lI ..dhere to tn' .tandarda set
lort.h In parl\f:r"ph. 3 And 4.
a. The reclplen\ .hall maintain a c:ode or
standArd., of conduct that .hall F:o..ern the
perfOrml\nc:e or llie otllcer.,employ~ or
"cenLa enl:"ged In the "wardln!: "lid IIdmln-
Istrl\tlon 01 etontraeta 1I.llIg I"edcrlll lund~.
No employee. omoer ()(" .gent shn.1l partlclpl\te
In the .eleCtlOn, award or Admlnlst.ratlon of
a contract In whlcb P'ederal funCls are IIsed.
....here. \0 his knowledge, be or his Immediate
family, partne", or or(:anlZl\tlon In which be
or hIS Immediate ramlly or portner hl\.'l a
nn"n~lal Interellt or ...It.h ....hom he 1ft ne!:o-
tlatlnc or hl\& Any ..rran!:ement concerning
pro'rectl... employment. The reclplen\.5' of-
ncers, emplo,...es or agenta sball neither solic-
It nor .oce,.t rratultl'''', ravors or anyt.hlng
01 monetary v"llIe Irom contmctorll or poten-
tlal contr"ctors. Such .tand.arda ah..1I provide
ror disciplinary actions to be Applied tor "10-
IAt.lons of such. st"ndarda by the reClplent8'
omcers, employees or lloften\.5,
b. All procurement \ranaactloDll shall b.
conducted In a mannft" too pro..lde. to the
.maxlmum utent. pract.lcat. opcn and free
competitIon, The recipient should be alert
to orpnl:ILtlona.1 conmcta ot In \.crest. or non-
competltl..e practice. Among oontraetors
that may restr'\ct or ellm.lJ\lLte c:ompeo;IUon
or otlherw1&e res tT4W" trlloCl e. In on:! er to en-
sure obJectl". cont.ractor perlonnance And
ellmlnal.ll unf"n coonpet.t.tlv. Ad,.antAge, con-
t.rl\oCDOrs mat develo9 CO' artlolt. speclncILUon.s,'
reqwremenu. _t.emen. of worlt. In...lta-
tlona Jar blc1s and/or requeeta for propoosa.ls
should be excluded trom c:.om.1)Ctl.ng for !uc:h
procW"emeDt8. Awaraa. IIb&U be ms.cle to the
bldd..,./oaeror whOle bl4/0tTer Is rl:l59Onal1'e
to ~e '1OIIclt.a.tIIon ADd. M ruoat. a.d..a.n~eoua
t.o the reclpMnt. price and ot.her fllCtors con-
sidered. SOllcltat1o.. ah&1l clearly set tort:Z1
all reqwrement8 tho.t the bldder/o~eror mUllt
fu-lftll In order tor blls b'd/otrer to be e_lu-
at.ec1 by Ohe rect-plent. Any and &1t blcl3/oll'ers
maT be ~JeoMc1 wh.n It II In t.~e nCp1ent.'s
IDlAr.at to Qo so.
c. All recl-pl~nt4 .nail Mt6bllsh pTOCUTe-
ment proceOurel t.b6t prov\c1, for. at a m.lo~
Imum, t.he fonowl~ ~ura.!Tequlreft\enta.
(1) P7'O-pOHd pr~ent IoCtlona shall
lollow a p~lIt'e to _ure tho avotdfLnce
of purdlMlng unn-r or chlpllC1l.Uve
It.oms. "'bere appC'OPn.M. an analytllls shall
be ma4c of Jeaae and pUf'chloM. alt.ern&UVu
DO dct.ormtne whk:b woWCl be the moet.
oconolNc&l. pr..ctkoal pr__ment.
(2) 6oIlclt&\1ona lor roocle and seT'l'1cea
.hall be ~ed upon . deal' .nd ACCUJ'at.e
d_nJ)tlOn of "'e \eotlntcsl reqwrementa
Icr \be _1.0<<1..1. product or M'."T1ce to be
procured. SuCh .. d~\6On st\...1I not. In
corn.peUt.lve pl"OOW'.m.nu, con\aln l....tures
....hlCh und'lll,. r.,net COfI\P4t.1t1on. "Bran4
n..,u or .qual" d.ICT~'lOru may be uud
&II . me"n. to Genn. the pcr1orman... 0:'
other ...1I.nt requ-tr""ents of a procW'em..nt.
and when 10 ....c1 t.be sp.elfte leAtures 0: Ule
namt<l bnnd .....alc.h m'U.t be met bi bldd.rs/
olfer:)rs sha.ll be clea:-Iy .peaned.
(31 POllt\Ve tlror\.5 Mall be mM1e by the
reclplent.& to utlllze small buslneM af'd mI-
norltv-owned busln.... sources of lupl)\le.
and ~.rvl(\e.. Such e/l'ort& should aI I 0"" theM
lOurc.. the mAximUM f.....lble oppor'\unltT
to co,"p.1oe fa:' contrac,," uUl\I;lng l"oder&1
lunM.
(4) The t:l)e ot f"'OCurtn!l: 1....t.-\1m.nts
u.C"d. ..~.. l\xed prlc. oon\.no.cu.,. _t rolm-
I
Office of Management and Budget Circular A.110 (7/30/76)
burM<ble contra.ct.s, purchR.Se orders, Inun-
Live contMlct.~, sh..1I b<: deloCr1JUJ1ed br Ule
rf'ClplenL buL musL be n.ppn'prl&.tc ror the
partlOUIl\r procuromenL Ilolld for prnmt>tlllr.
Lhe besL InloCroot ot Ulf' pro~rn.m III\lol\'r.d.
The ''cost_plu.o-a-percenLase-01-G05t'' meUl-
od of contr~Llng sllal1 not be used.
(5) ConLrl\Ct... shill be mnc1e 0111)' WIth re-
sponsible conLrl\CLanJ WilD pcx_ Lhe po-
tenLlon"J ability La perform suCCCloSllfully
under the tet"mS -lid conditions of a pro-
posed procuremenL. Collllldern.tlon 5hn.J1 be
~Iven LO such mALters a... conl.mcLOr Int.el;Tlty,
r..oor'C1 of pa.st performAnce, nnl\ucln.J Rnd
t.eehnlcnl re.o;ourccs or a.cellfS.3lbllltr LO other
neceSSATY reSOllrr-.cs,
(G) All proposcd salt' .source con lrnc~ or
",'lIere olllY olle hid or prop03n.J IS recel\'ed
In ..'hiall the ~!:rCf:nLe expend I Lure IS ex-
f'CCloCl1 VI exceed '05.1100 5hl111 ue s\lbJect t.o
prior n.pprovlll Ill. Lhe dl~retl~ll of the Fed-
ern.J sponsorln~ I\{;ellcy.
(7) Some form of price' or coot lUlllh-s1S
should be ml\de .In connecLlon with e~er)'
procurement ..cUOII. Price IlJll\lySI6 1TlA)' be
lIoCcompll.shed In \'arlOus WII.}'.\, Includlnl: U1C
compultlOn or price qUOLAl.Ions submitted.
market. prices o.nu similar IndIcia. LO[:ethc:r
wl\.h c1Jl'OC'lunts. CoRt annl)"slS Is t.he re\'lew
n.nd evalUll\.L!on of CAC.h elemcnt. at c~ to
deloCrmJne ron..sona.blencss, alloc:a.blllt\' and
allowllobUlty. . .
(8) Procurement records a.n,d n1ec tor pur-
chucs In elt'COSll of '10,000 Mall Include the
t 0110....".1 ne :
(a) Baals tor contr'8.ctorselect.lon:
(b) Justl.o.catlon tor lack of compeUtlon
\ll'hen competitive bids or alters are not
ObtA.lleQ.;
ee) B&5ls for awa.rd cost or price.
(9) A S)'St.emI tor contract adn1.Inl.st.nl.t.lon
shlLll be malnt4Jnecl to ensure contractor
conformance with t.erms, conditions n.nd
specll'lca t.lons of the con tnw:t, a.nd to ensure
&c1equ~ and tlmely tollowup 0: all pur-
cha.scs.
<t. The rec~plent shall Include. In a4111t.lon
to pro'l'l$lons LO det1ne a sound and complete
'ab-"eement, tbe rollowlng provtslona In 8.11
cont.l'"acta. These provisions shall also be ap:
pllcd. to subcont.n_c~,
a. Conl.mcts In excess of &IO,OOO.sh.ul con-
tain cont.m.c:u.&.1 pro\'1SlOns or cond:t.lons
\.hat. will ..1Io.... for R4Jn1nIm.Mlt.lve, con:rac-
WILl or ICSal romc<1Jcs In instAnces In W211c:h
contractors vlola.te Dr brel\ch contract tenn.s.
Rnd prO'l'ldlr lor such relnedlal "ct.lons u
mar be a.pPTOprlate.
b. All contro..cts In exccs.; of "10,000 shall
conlln.ln suItable pro\'lslons for loC:-m.lnf'.llon
br lJ>e rl:'Clplent Including the manne:- tn'
\lo'hlcn termJna.t.Ion \lo'\Il be e:Tecl~ and \.he
bAsIS tor settlemen.t. In addition. such con-
\J"&cts shall descrIbe condll.lons under .....hlch
J
A-110:22
tlon.~ (29 CFR. I'RrL 5). Undf'r section 103
oe the Act. each contracLor sh:a.ll be Te.
'1"1...<1 to cOnlpllLe Ule Wll!=l'~ ()f t\'l'ry lllt-
ehnnle Rlld IlllJurcr Oil the bll.~IS of I' sLandnrU
wurk df\~' of Po hn\l~ 'HId a !iLILlu1nrd wurk
weck of 40 hO\lI"S. Work In CXCl'''sS or lhe
SL:>.ndard \lo'orkdl\)' or workwet'lo; 1.'1 r>ermls.~lule
I'ro\'lded tll...L the worKer IS compen~lItcd a I. a
rALe 01 not less than' II'. tlmes tIle ul\slc
r"ll' or PRY ror All hOllrs wor~:ed ill cxcess
or 8 hours in I'll)' calcndar dl\)' or 40 IW\lr.'l
In Lhe work\lo'cek.' Section 107 01 thc Act IS
A\lpllCnble t.o ('onsLructlon work (<lid provides
thnL no Inborer Dr mechanic 5hl\II be rcqnired
\.(I work 1/1 slIrrou/I<1ln{;5 or Illldcr worklll{;
r"lIdILlon.~ Ilo'hleh nre \I n.'lall I \.I\r)', Iln?_'\rdou.'I
or dnul~r.rou5 L.u hlS hCf\lth and :;nl("ly I\,." d('-
h.rIUIrIN1 under COIl"Lrur.tJon sRfely I\nd
he"lth ~tnllu:>rdll prolnulj:nteu uy Lhc Sccrt'-
tary 01 l..nbor. Thc"e rel1niremt'n~; du 'lOt
nl'pl)' to Lhl! purchascs of snr>l'lIl!~ or ",nl.~-
rill Is or llrllclcs ordinarily nVllllable on 1I1e
open IIInrket. or cOlltrnclS for trl\n~porlllLIOIl
Dr tr""II",If,.~lOn Dr Int...IIII.'Cnce.
h. ContrRct.. or n~cemenu;. Lhe prlnClpnl
)lUrl'olll' of. ",'hlcll I.~ to crcate, dc\'elOp Dr 1m-
prnvc produclS. proce5.~c.~ or ",e1.ho(I~: or for
explor..1Ion Int.o lIelds thAt dlrectl)' concern
public heAlth. saleLj' or welfnre: or contrncl.S
In Lhe neld ot scll!nce Dr Il'chnolog~' III which
there hAS been little ';I:nllicant exr>erlence
out.~lde ot work lunded b)' Fcdcrnl 1\."I.!'llIt-
Rn~, lIhall conLRln R notlce 1.0 Llle etlect -thAt
the oont.rACt mAj' be temlIJln.Lecl for default
a.; ",'cU o.s 0011<.11 tlon5 where the "olltrloC!. mllY
be: tl'rrnlllalt'd b<'CMI"e or Oll'ClIIllSl..nc('O\ l>e-
ronG the centrol 01 tJle COlIlZActor.
c. In Ail conl.r"CU for eon"t.nlc:tlon Dr rR-
c:1l1ty Impro\'emelll a",'a.rde<1 tor more than
f,lllO.OClO. rec:l.plen1.6 shlloll olJserve Ule bOnd-
In!: requlremenloS proV\ded III AI.w.c.lunellt D
to \.hIli circular.
d. All conll'8ClS Rwarded by recl.plclIlS and
theIr oon\.nI.Ct.orll or .'Iub~ntecs havlllg a
value 01 more Lhl\n $10.000. ShILlI conl.aln a
I'rO\ll810n requlrlng cnmpllAnce ..1th Execu-
tive Order 11246, entItled "Equal F~nploy-
menl. Opportunlt)'," l\S ameuded b)' Executive
Order 11375. nnd l\S supplemenLed In Depart-
",en t ot l..ntxlr r~ ula1l0115 (41 CFR, l"Ju"t GO) .
e. All contracts Ilnd suh~ro.nloS In eXces.~ of
'-2.000 tor constructIon or rcpalr IIwarded or
reCipients Alld subreclplen't.~ !lhall IlIcluuc "
provllllon ror compliance WIth Lhe CopelRlld
"hlllI-Klck Bllck" Act (18 U.::;,C. 874) as
supplcmented In DepartmenL of Lllbor
regulaLlons (29 CI"R, Part 3). This Act. ')ro-
vldes thRt eaCh contrl\ctor or s\lbgrantee
shl\1I be prol\lbltcd from Inuuclng. by nny
means. any person employed In t.he cOIJ.~truc-
tlon, completion, or rep"lr of publiC work. to
give up Rn)' part. of the compensatlon to
whIch he Is othcrwlse ent.H.led. The.Fectp~t
shall report foil suspccted 01' reporteG....WvtB-
tlons to \.he Federal sponsoring ",encr. \
!. When required br the I"eclcral pros:raml
legislation, all const.ruct.lon cont.tactsi mRtters regnrdlne rlght..~ to Inventions .nnd
A...'arded by thr reCipients and subreclplcnts I' mnterll\ls generllted under Lbe contrac. Dr
of more than "2.000 shall Include a p-",vlslon I a[:reem~nt llre .'IubJect to the regulatlOnll Is-
for cornpllance .....Ith t.he DavIS-Bacon Act. (40 " 5ued b~ the Federal IIpnn80rllll; al;enc)" nlld
U.S.C. 276aito A-7) and lIS supplnnelloted br thc recipient. The contro..ctor shall be Rd-
1>epart.ment ot Labor regulalJons (211 crn, "I.!led ns to ,lJ>e source oll\c1dlt.lonal Inlorma-
Part. 5). Under thIs Act contractors sha~1 be Ion regnrd.ng these matl.enJ,
requlre<1 to p.J'......agu..to laborel'll and me- I. All nl'sotlat.cd contrAots (except those
chanica at. a rat.c 'not less \.hn.n the mini of $10,000 or less) a.....Rrded b)" reclplenUl
\lo'ages specified III a wage deloCrmlnatlon made shall Include a provision t.o tbe ellcct thnt
by ,the Secretarr of Labor. In addition. con- the rcclplent. the Federal spon.wr\llS agenc:;,
tractors shall be required to pa" wages not. thc comptroller General of the OnlLecl State~,
less. than once a week.. The reC'lplent shall or any ot ot.helr duly aut.horI7.cd represl!nta-
place a copy 01 the current prevalllng wase LI\'CS. shall have accCl'S to an,... boollll. docu-
determlnat.lon Issued bv t.he Department. of men IS. pl\pers llnd records of the contract.or
L.n.bor In each sOllclt.atlon "nd the award whIch are directly- pert.lnent. to a speclnC pro-
of a. eont.rlloCt shall be condl.t.!oned upon tbe !;rllm for the purpose of makIng Rudlta,
acceptance o! the .....a!;e determination, The examinAtIons. excerp\.s and transcriptions.
recipient shall reporl. all suspected or re- J. Con.l.racts Rnd sub!n'an'loS ot amollnt.s In
poned violations LO \.he Federal sponsoring excess o. &100,000 !lha.1I contain a provISion
asency. that requires the reclplen~ to Rgree to com-
g. Where applicable, all contracts awarded ply WI.th all applicable standlU"ds. orders or
by rcclJ)lent.s In excess ot !,:!.OOO for const.ruc- ~Ula.l~na Issued pursul\nt to I.he Clcar A:r
tlon COMracl.S and In excen 0: t:!,500 !or Act. ot :.70 142 0.5.C. 1857 et. SI!C;.) and the
other cont.racloS t.hat. In"olve I.he emplo}'ment. Federal W..t.cr Pollution Contr,,1 ,'Ict (:>3
of mechanIcs Dr laborers. shall Include a pro- U.5.C. 1251 et seq.) I\S amended. ,\'lnlatlOns
VisIon ror compliance .....Ith sections 103 and .'Ih...1I be reported to the Federal SP911S0rlns
107 ot t.he Contract Work Hours and Saletr nc:cncy and the Reli:lonal emce of Lhe 1';ll-
Standards Act 140 O.5.C. 3:!7-330) u sup- \'Ironment.al Protect.lon Agencr.
plemenl.ed by DeI'&rtmeDot. 0: Labor regula- IFRDoc.76-21904 F1led7-29-7S:8:45 amI
I
APPENDIX H
OM!
Circular A-l22
-I
..
I
Office of Management and Budget Circular A-122 (6/27/80)
OFRCE OF MANAGEMENT AND
BUDGET
CIrc:uIar A~122, "Cost Principles for
Nonprofit Organizations"
AGENCY: Ornce of Management and
Dudcot.
ACTION: Final Policy.
June 27. 1!lOO
To The Heads of Executive
Oepartmer.ls and Eslnblishmenls
Subicct: Cost principles for nonprofit
organiz.alions: .
1. Purpose. This Circular eslabli:;hes
principl.::s for delermining cosls of
grants. conlnol:;ls and other agfllemenls
with nonprofil organiz.ations. It docs nol
apply 10 colleges and universities which
are covered by Circular A-Zr. 5lnle.
local. aud fe'derally :-t:col;n:zed Indian
tribal governm~nts which are covered
b~' Circular 7.;.....4: or hOS?i:lll$. The
principles are designed to ;lrovide that
the Federal Government bear its fair
share of costs exceot where restricted or
prohibited by law. The principles do not
attempt 10 prescribe'the extent of cost
sharing or matching on'grants. cuntracts,
or othe:- agrecmol:ts. However. such cost
sharing or matching shall not be
accomj:llished tht'ough arbitrary
limitations on individual cost elements
by Fede;:!l agencies. Provision fer profit
or other increment above cost is outside
the scope of this Circular.
Z. St;persession. This Circular
llupersedcs cost principl<ils issup.d by
individual agencies for non'profit .
organization.
3. App!icabilit.v.a. T-h.ese principles
shall be used by all .Federal agencies in
determining the .cost! of work periormed
by nonprofit organi<:ations under gmnts.
cooperative agreements. cost
reimbur::ement contracts. and other
conlracts in which costs are used in
pricing. administration. or se'lllp.menl.
All of these instruments arenercaflcr
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 reimbursemenl sulJawarus
(subgrants. subcontracts. etc.) are
subi~CI 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 i suba ward is to a
commercial organization. the cost
principles applicable to commercial
concerns shall apply: if a 5ubaward is to
R colletle or uni versity, Circulur A-Z1
~hal1 arill\': if a ~\Ihl\\'nrd i!; 10 n Slille.
\ocal;or fede"ally'reoci~ized lndlllni
lribal government. Circular 7~ shotU
apply.
4. Definitions. a. "Nonprofit
organization" means any corporation.
trust. B'lISocia tion. coopera tive. or other
organization whit:h (1) ili, operated.
primarily'foc scfentific. educational
service. charitable. or .similar purposes
in Ihe public inlerellt: (Z) is not
organized primarily for profit: and (3)
uses ils net proceeds. to maintain.
Improve. andlor expand its operations.
For this purpose. the term "nonprofit
organization" excludes (i) colleges and
universities:.(ii) hospitals: (iii) State.
local. and federal!y recognized Indian
tribal governments: and (iv) those
nonprofit organizations which are .
e:'<cluued from coverage of this Circular
in accordance with pl\1"agraph 5 below.
b. "Prior approval" means secu:ing
the awarding Rger.cy's permission in
advance lo.incur cost for those items
that are de:!ignalcd <IS requiring prior
approval bj' the Circulnr. Generally this
permission will be in writing. Where an
item of cost rl'!quiring prior approval is
speciiied in the budget of an .award.
approval of lhe bud set constitutes
approval cf that cost.
5. Exclusion of some nonprofit
organizations. Some nonprofit
organizations. bec.ause of their size and
nature of operations. can be considered
to be similar to commercial. concerns fo:
purpose of applicability of tost
principles. Such nonprofit organizations
shall operate under Federal cost
principles applicable to commercial
concerns. A listing of these
organiza tionl is coD.uined.in.
Attachment C. Other organizaUiOna may
be added from time to time.
6. Responsibilities. AgcD.ciea
responsible for administering programs
that involve awards to nonprofit
organizations sball implement the
provisions of this Circular. Upon
requesL implementing instruction shall
be fW"DLsbed to the Office of
Managementl!.ld Bud8el. Agencies &hall
designale a liaison official to serve as
the agency representalive on matters
relaling to the implementation of this
Circular. The name and title of such
representative shall be furnished 10 tbe
Officc of Management aDd Budget
within 30 days of the date of this
Circular.
7. Attachments. The principles and
related policy guides are set forth in the
follo",o\ng Attachments:
Attachment A~l1eral Principles
Attachment B-Sclected Items of Cosl
Attachment C-Nonprofit
OrganizatioD.S Not Subject !p This
Circular .
I
A-122:1
8. Requests for exceptioJls. The GUice
of Managemeot end Budgel mar {:!rlmt
exceptions to the requiremenls of !.his
Circular when permissible undr:r
existing law. However. in the interest of
achieving maximum uniIomlit}..
exceptions wiU be permitted only in
highly unusual circumstances.
9. Effectil'e Date. The Rrovisions of
this Circular are effective immediatel\'.
Implemenlation sholl be phased in by
incorporating the provisions inlo new
awards made after the start of lhe .
organization's next fiscal year. For
existing awards the new principles may
be applied if an organization aDd the
cognizant Federal agency agree. Earlier
imi1lementotion. or a delay in
implcmcolotion of individual pnrrislons
is also permilled by mutu<ll agreement
between lln' organization and the
cognizanl Federal agency.
10. inquiries. Further information
concerning this Circular may be
oblnined by contacting the Financial
Management Branch. Budgel Review
Division. Office of Management and
Budget. Washinglon. D.C. 20503.
telephone (ZOZ) 395--47i3. -
JlImes T. Mclntyre. Jr..
Director.
(Circular No. A-122)
Allachmenl A
General Principles
Table of Contents
A. Basic Considerstions
1. Composition of total cost,
%. Factors affecting allowability of Cosls
3. Reasonable co.ts
4. Allocable costs
5. Applicable credits
O. Advance underslandings
B. Direct CO.I.
C. Indirect Costs. "
D. AllocaLion of Indirect CoslS and
Determination or indirect Cosl Rales
t. Genp.ral
2.. SimpliIied allocalion melhod
3. Mul.liple allocation base method
4. Direct allocation method
5. Special indirect cost rates
E. Negotiation and Approval or Indirect Cost
Rates
1. Definitions
2. Negotiations and :Ipproval of ratcs
[Circulllr No. A-l22]
Allachmect A
Gel:crlll Principlo::s
A. Basic Considera/iaus.
1. Composition 0[.10101 costs. The lolal cost
of an award is the f;um of the allowable
direcl and allocable indirect costs less acy
applicab!e credits.
2. Frulors o.(fCCling clJowobili/y of ..OS IS.
I
Office of Management and Budget Circular A-122 (6/27/80)
To be allowable under an award. costs mv$t
meet the following tr~neral criteria:
a. Be relUlonable for the performance of the
award and be aUocable thereto under these
principlea.
b. Conform 10 aoy limitations or exclu.ions
aet forth in these principlcs or in the aWlIrd
as to t}'pea or amount of cost.i1erru.
c. Be cobsistc~t wjth policics and
procedures thot apply uniformly to both
federall}' financed and olher Aclivlties of the
or(lo niza pon. .
d. De accorded consistent trciltmcnt.
e. Dc delermined in occordance with
generollyacccptedaccounlillgprinciples.
f. Not ue inclur.!ed as a cost or used to meet
cost sharing or mat.cbi"tl requiremonts of any
other federally financed program in either the
current or !1..prior period.,
g. Be adequately documented.
3. Reosunoble cosJs. A cas! is rl'asonubJe
if. in ita noture or amount. i(does not exceed
that which would be Incurred by 's pn:aent .
person under the circumstWnces prc.,ailinll at
the time the decision was made to incur the
costs. The queslion of the reasonablenes$.of
specific costs must be scrutinized with
particular care in conneclicm with
organi:ationa or separaie ~h'isil?n.s !,hereo!
which receive the preponderance,of their
support from awards made" by Fede'rill
agencies. In determining the reasonableness
of a given cosl. consideration shall be given
10:
L Whether the cost is of a type generally
recognized as ordinary and necessary for the
operation of the organization or the
performance of lhe award.
b. The restraints or requirements imposed
by such factors as generally accepled sound
business practices. arms length bargaining.
Federal and Stilte laws and regulations. and
terms and conditions of the award.
c. Whether the indivldaali.concerned acted
....,ith prudence ir: the circumstances.
considering their rllsponslbilities to the
organization. its members. employees. and
clients. the public atlarse. nnd the
Government.
d. Significarit deviations from the
established pracllces of the oqpnization
which may unjustifiably increase the award
costs.
4. Allocable cosLs.
a. A cost is allocable to a parlicular co,t
objective. .u~h as a grant. project. service. or
other activily. in accordance with the relative
benefil, received. A co,t is allocable 10 a
Government award if it is treated
consistently with other costs incurred for the
same purpose in like circumstances and if i'l:
(1) Is incurTed specifically for the sward.
(Z) Benefits both the award and other work
aOld can be disUibuted in reasonable
proportion to the benefits received.
(3) Is neccssary to the overall operll lion o!
Ihe organiz3tion. allhou..h a direct
relationship to any particular cosl oujectiVll
cannot be shown.
b. Any cost allocable \0 a particular award
or other cost oujective under these principles
ma~' not be shifted to other Federal awards to
overcome Iundin!; deficiencies. or to a~'oid
restrictions imposed by law or by the terms
of the award.
S. Applicable crecJjL'.
a. The term applicaule credits refers to
those receipts. or reduction of expenditures
which operate \0 off,et or reduce expaMea
items that ere allocaule 10 awards 811 direct
or indirect costs. Typical.examples of such
tranellCtions are: purchase discounts. rebatcs
or allowances. recoveries or indemnities QI1
losses. insurance refund.. and adjustments of
overpayments or erroneoua charges. To the
elttentthat such credits accruing or receiver.!
b~' lhe organizalion relale to allowable cost
they shall be credited to the GoverDment
either as a cost reduction or callh refund os
a ppropri ate.
b. In some instanccs. the amounts received
form the Federal Government to Cinance
organizational activitiea or aervice operations
should be treeled as applicable credits.
Specifically. the concept of lietting such
credit items against related expenditures
should be a;:plied by Ule organizaton in
deterruing the rlltes or amounts to be
olllilnization in determining the rates or
amaounts tobe charged to Federal awards
for service, Tendered whenever the facilities
or other resources used in providing such
. services have been financer.! clirectly. in
whole or in part. by Federal funds~
a(c) For rules covering program income
(i.e~ gross income earned from federaUy
supported activities) see Attachment D of
OMS Circular A-ll0.
6. Advancs and understandings. Under ilny
given"award the reaaonableni:'ss and
allocability of certain items oJ costs may be
difficuit 10 determine. This particularly true in
conoectio~ with oltiUtions thalreceive a
preponderance of lheir support from Fedecu\
agencies. In 'order 10 avoid .ubaequant
disallowance'or dispute based on
unreasonablene.s or nonallOeabilitv. It is
oflen deSirable 10 seek a wriiien agreement
with the cognizant or awarding 'aserici in
advance of the incurrence of special or
unusal costs. The absence of an advance
a~ement onaey element of cost will not. in
illlelf. affect the reasonableness or
aliocabilil)' of that element.
E. Direct Costs
1. Direct costs are those that can be
Identified specifically with a particular final
cost nbjc.-clive: i.e.. a particular award.
project. service. or other direct activit}' of an
orgllnlzation. However. a cost m4}' not be
assi~ned 10 an award as a direct cost if any
other cost incurred for the same purpose. in
like circumstance. has bep.n allOf".ated to an
award as in indirect cosl. Cost identified
specifically with Awards are direct cost of the
a'~'ards end are to be assigned directly
therelo. Cost identified speciCicali}' with other
final cost objectives of the organization are
direct costs of lhose cost objectives and are
not to be assigned to other award; directl}' or
indirect 1\'.
2. .ro.n}: direct cost of a minor-amount mOlY
be treated ilS an indinlct Co;;l of Dr reasons of
pructicalil}' where the accollnt trcatment fur
such cost i. consislenlly arplied to :Ill finOlI
cost oujecth'es.
3. The cosl of certain acth'Hies ore not
allowaule as charsr.s 10 Fedelal awards (se!!.
for e>:n~ple, fund raising coslS in paragl':Jph
.1
A-122:2
21 of /\llochment B), However, even though
these COllts are unallowaule for purposes of
computing chargcs to Federal awards. they
nonethelelll must be treated u direct cost for
purpose. of delerminin!l indirect cost rate.
and be allocated their share of the
organizalion'. indirect costs if they represent
activilleswhich (1) include the salaries of
personnel. (2) occupy spilce. and (3) benefit
Irom Ihe organizalion's indirect cosls.
4. The costs of activities performed
primllrily 81 a .r.rvice to members. clients. or
Ihe general public when lIi!lnificnnl Rnd
neccssary to the orgonizalion's mission mUllt
ue trealed a. direct cosls when or not
nllowuule ond be allocnted an equitahle
share of indirecl cost.. Some eXAmples of
these trpes of nctivilies include:
A. Milintcnunce Qf membership rolls.
suus'(..riplions. publica lions. ond relnted
functions.
b. Providing services and information to
members. legilllalive or administrative
uodies. or the public.
c. Promotion. louuying. and other forms of
puuiic rclatiom!.
d. Meetings and conferences except those
held 10 conduct the general administration of
lhe organization.
3. Mninlenacne. protection. and investment
of ~pecial funds nol used in operation of the
orgllnizalion.
f. Administration of group bencCits on
behelf of members of clients including life
.and hospital insurance. annuity or relirement
plans. financial aid. etc.
C. Indirect Cost.
1. Indirect costs are those that have been
incurred lor common or joint objectives and
cannot ue readiiy. idenliCied with a particulur
finltl c(>st ol:jecth'e. Direct cost of minor
amounts mar be treated as indirect costs
under thi! cIJnditions described in parat;traph
D.z. auove. After dirp.ct cost. nave been
detllrmill(!d and assigned directly to awards
or other work as appropriate. indirect costs
/IT! those remaining to ue allocated to
benefiting CO~1 C'ujectives. A cost m~ynol he
allocated to an award as an indirect COllt if
!lll}' othflT cost inCUl'Nfl for the ~ame purpose.
in like cir~um.slances. 'has been as~i~ed 10
an ..\O\:ard as a direct cosl. l
2. Bp.cause of the diverse characteristica
IInd accounting practices of nonprofit
c:rganiza1ions. il is nol possible to specify the
typflS of cost which Dler be classified aI
inriil'tlct cost in all situation. However. typicllI
examples of indirect cosl for many nonprofit
organizations may include depreciation or
use allowance~ on buildings and equipment.
the Cosls of OpCfo1eing and mainlaining
facilities. and general Administration and
g!'nerlll expenses. sllch sa the salaries and
eXJ'Cnses of executive o(ficers. personnel
ar.!ministration. ana accounling.
D. Allacotion of Indirect Cost and
Dr.lermi.'1otion of Indirect Cosl Rut~s,
1. General.
a. Where a nonprufit oT!!aniulion has only
onc mat;ur function. or w~,e..e ail ils maj'Jr
functions benefil [rom ils indirect cosls to
appro..imately Ihe some de!lTl'e. the
l!lIoer.lion of indi:ect costs Knd Ihe
I
OffICe of Management and Budget Circular A-122 (6/27/80)
~talion of an indirect cost rate IIUI1' be
accGNftplished throullh simplified allo~lion
,,","dure. as doec:ribed in para8l'apb %
below.
&. Where an organiution ha. several major
fuadicm. which benefit from it. indirect coete
iD YUYing degrees. allocation of indirect
casts may requ.ite the accumulation of such
CCIB:ts Into separale cost groupings which then
lift atiocated individually to benefiting
[undion. bv meAns of a base which best
mas.ures lhe r'!lolive degree o{ benefil. The
indirecl cosl. allocated to each (unction are
\lWJ:I, diistributed to individual award. and
otbe activities included in lhat dunction by
__ of liD indirect co.t rate(s).
c:-. The determinotion of what constitutes an
4lIl!pIlli:talion'. major (unctions will depend on
ili& purpose in beins: the types oC services it
renders to the puulic. its client5. ond il,
mcmIiJen: and the Kmount o{ errort lllic:voles
tlll, SlUcl\ activlliesDs fund rataing. public
ill'Lcmm,ation and membership activities.
di. Specific methods Cor allocating indirect
l:IDSts and compuling indirect cost roles along
with the conditions under which each method
sbou1ll1 be used are described in paragraph. z
IhtlllU3h 5 below.
e. The base period for the allocation oC
i~ cosls is the period in which such
coats are incurred and accumulated for
aJilllc:alion wo work periormed in that period.
'!be base period normall)' .hould coincide
wi. the organization's fiscal year. but in any
e'\Iftt. shell be so .elected u 10 avoid
l1I~ties in the allocation of lhe COIls.
'Z.SimpJified ailoea/ion method. ,
IL Where an organization'. major Cunclions
benefit from il. indirecl costs 10
approximalel)' lhe same degre. the ll!location
Cl%. indlrect costs may be accomplished br (i)
iiepwaling the orgonization'stolal coslS for
lire belle period as either direct or indirect.
.M (H) dividinll tbe total allowable indirect
caLs (nel of appiir.ablecredils) b)' an
equitable distribulion base. The resull oC this
process is an indirect cost rate which is used
to distribule indirect costs 10 indi\'idual
a....aras. The rate should be expressed as lhe
pe1'C:cmlag8 which the lolal amount or
iIollowaule indirect cosls bears 10 the base
uiected. Tnis method should alos be used
_here an ol'8anizalion has 01'11)' one mltjor
function encompaSllin~ a number oC
individualprojecu or aCli\'ities. and may be
und where the level of Federal awards 10 an
aqanizlIHnn is rellltively small.
u. both the diroct COSIs and the indirect
cc.s~s shall exciude capHal expenditures lInd
lUT~lowable costs. I iowever. unallowable
costs which represent activities musl l:!e
included in the direct costs under the
col'ldilions.described in paragraph B.3. above.
c. The distribution base mar be total direct
CGlSts (exciuding capilal expenditures and
oitl:1er distorting hems. such liS major
lubcontrltcts or s:Jbsrar.lll). direct lelaries
and wages. or olher base which results in an
equitable distrib\.llion. TIle distribution base
mall generally exciude partir-ipant Buport
cosL~ as defined in paragraph 211 of
Allar-hment B.
d. ~XC~~'I where a !'vecia! (ille(s) is
rcoqulred In accordance with plIragraph D,5
below. tb.e1ndi.rect~11'.1e ~loped...dar
the abnve pnnGipWla.is 8RPlic:aL\e.lD aU
awards al.the Ol'\Ianiwioll..1J a spacial
rate(s) ~ requireciappropriale mocWications
shall be made in ordulD develop ,the special
rate(s).
3. Multiple allocalion base method.
e. Where an organization's indiroct costl
benefit its majoduDctionl in varying degrees.
such co.ts shall be accumulated into leperate
cost groupings. Each grouping shall then be
allocaled individuoll)' to benofiUns runctions
bv means oC a uase which besl measures lhe
r~18tive benefils.
b. The groupinga shall be eslauUshed so ..
to permilthe allocation of aach groujlins'on
lhe balis of beneCit. provided to lhe major
Cunctions. Each llroupins.hould constitute a
pool or expenses that ore of like chanicte...in
lerms or the Cnnr-lions lhey benefit und in
lI:rllll o{ Ihe ulloc:u lion blllu: whloh Imlll
. measurs the relative benefils pro\.idd to each
Cunction. The number of eeparate groupings
should be beld within practicallimils. taking
inlo considerution the materialily of lhe
amountsim'olved and the degree of precision
desired.
c:. Actual conditions must be taken inlo
accounl in selecting the base to be used in
allocating the expenses in !lach grouping 10
benefiting function.. When an allocation can
be made by assiglUllent oC . cost grouping
directl)' to the function beneCi led. lhe
allocalion shall be made in that manner.
When the expenses in a grouping are more
general in nature. lhe allocation should be
made through the use of a selected base
which produces results thai are equitable 10
both the Covernment and the oflanization. In
general. any cosl element or cosl related
Cactor associated with the oflfanizalion's
work is potentially adaptable ro~ use RS an
allocation base provided Ii) it can readily be
expressed in lerm. of dollars or other
quantitative measures ltotal direct costs.
direcl salaries and wagt=a.starr houn applied.
square Ceet W1ed. houn of usage. number oC
documents processed. population served. and
the like) and (ii) it is common to the
benefiting functiuns during the base period.
d. Except where a special indirect cost
rltle(s) is required in accordance with
paragraph 0.5. below. the separale groupings
oC indirnct costs allocated to each major
function shall be agt'1!llated and treated 80S a
common pool Cor that function. The costs in
the common pool shalllhen be distributed to
indivisual awan included in that function by
use oC a single indirect cost rate.
e. The distribution base used in computing
tloe indirect cost rale for each function moy
be tOlal dirl!ct COslS (excluding capital
c::.;penditures and other distorting items such
i1S major subconlracls and subgranlsl. direct
~alaries and wages. or other ase which
results in an equilable distribution. The
distribution base shall generally exclude
participant support costs as deCined in
puragraph 29. Attachmenl B. An indirect cost
rote should be developed Cir eRch sr.parat.e
indirect cosl pool developed. The rale in each
case should be slaled as the percenlage
whieh the amount oC the particular indirect
cosl pool is oC Ihe dislribution base identified
I.
A-122:3
W'ith thaI ~
4. Dirr:d a/locotion n~hod.
a. Some nonprofit ol'Baniutions. treat all
cosla as direct CO.tl expect general
administration and general expenses. These
organiuliona generally leparate Iheir cosla
into thre basic categories: (i) Ceneral
administration and general expenses. (ii)
rund raising. and (iii) other direct Cunctions
(including projects performed under Federal
awards). Joinl costs. luch as depreciation.
rental cosls. operation and maintenance or
racilities. telephone expenses. and Lhe like
are prorated indivisually as direct cost 10
each categof}' and to each award. or other
activity using a base most appropriate 10 lhe
particular cosl being prorated.
b. This method is acceplable provided each
joint cQ,st is proraled using a base which
IIcellrnlely melll'lIrCS lhe hencnl~ proviclr.d to
ellc:h "wIIl"ll or ulher 1Ic:llvllv, Thn hll"U" 11"".1
be eSloblished in accordance with resonable
criteria. and be supported by currenl dota.
This melhod is compatible with lhe
Slondards or Accounting and Financial
Reparting for Voluntary Health and WelIare
Ol'Baniz:alions issued jointly by lhe National
Henllh Council. Inc.. the National Assembly
or Voluntary Heslth and Social Welrare
Organiulions. and Ihe United Way of
America.
c. Under this method. indirect cosls consist
eclusively or gr.neral adminislrlltion and
genero I expenses. In all other respects. lhe
organi:.ation's indirect cost ratess shal be
computed in lhe same manner as that
described in paragraph 0.2 auove.
5: Special indi."ect cost rates. In some
instances. a single indirer:t cost ra Ie for all .
aclivities oC an organiz:allon or ror eacr. major
runction or lhe organization ay not be
appropriale. .ince it would not lake into
accountlhose different Cactors .....hich may
subslantially affect the indirect costs
applicable to a particular segmenl oC worr_
For lhis purpose. a particular segment or
work. For this purpose. a particular segment
oC work may be lhat performed under a single
award or il mav. consist of work under a
@roup oC awards performed in a common
environment: lhe ractora may inClude the
ph)'sicallocation of the work. the levp.[ oC
Rdministrative support required. the nature or
the Cacilities or order resources employed. the
scien tific disciplines or lechnical skills
involved. the ol'8anizalional arrangements
used. or any combinalion thereof. When a
particular segmenl of work is performed in an
environment which appears to generale a
significantly diffcrentlevel oC indirect costs.
provisions should be made Cor a separate
indirect cost pool applicable to such work.
The separal.e indirect cost pool should be
developed during the course of lhe regular
nllocation process. and the separale indirect
cost rale resulting thererrom should be used
provided it is delennined lhal (i) the rale
differs sillnificantly Crom lhat which would
have been oblained under paragraph D.%. 3.
and 4 above. and (iilthe volume or work to
which the rate would apply is malerial.
E, Negotia/ion a1ld Approval of Indirect Cast
Rates,
I
Iffice of Management and Budget Circular A-122 (6/27/80)
1. Definitions. As used in this section. the
,II owing tennshave Ihe meanin:;s set forth
elow:
a. "Cognizant agency" means the Federal
gency responsible for negotiating and
pproving indirect cost rates for a nonprofit
rganization on behalr oC all Federol .
gencifls.
b. "Predetennined rote" means an indirect
ost rate. applicable to a specified current or
~ture period. usually the organil:8tion's nllcal
ear. The rate Is based on an estimate oC the
asts to be incurred during the period. A
~edetermined rate is not subject to
djuatment.
c:. "Fixed rale" means an indirect cost rate
~hich has the same characlerislic., as a
'redetermined rate. excepl thatlne difference
Ictween the estimated costs and the actual
nsts or lhe period covered by lhe rale is
arried Corward 88 an adjustmcnt to Ihe rale
omputation oC a subsequent period.
d. "Final rate" means an indirect CClst rale
:pplicable 10 a specified past period which is
IBled on the actual costs or lhe period. A
inal rate i. not subject to adjustmp.nt.
e. "Provisional rate" or billing rate means a
emporary indirect cost rale applicable to a
:pecined period which is used for funding.
nterimreimbursement. and reporting indirect
:bsts on awards pending the establishment oC
L rete for the period.
C. "Indirect cost proposal" means the
iocumentation prepared by an organization
o substantiate its claim Cor the
'eimbursement oC indirect costs. This
lropcsai provides the basis Cor the review
md negotiation ieadingto the eSlablishment
If an organization's indirect cost rate.
g. "Cost objective" means a Cunction.
lrganiutional subdivision. contract. grant. or
l(her work unit Cor which cost data are
iesired and for which provision is made to
lccumulate and meuure Ihe cost oC
ml(:esses. projects. jobs and capitalized
,rojects.
Z. Negotiation and approl'al of rates.
a. Unless diCCerent arrangements arc
19reed 10 by the agencies concerned. the
~ederall3gflnc1' with the largest dollar value
,C awards with an organiution will be
:esignate:l as the cognizant agency for the
'~gotiation and approval of indirect cost
~&tes and. where necessarv. other rates such
u frinlle benefit and computer charge-out
:ates. Once an agency is assigned cognizance
:or a particular nonprofit orsanization. the
usipment will not be changed unless there
is a major long-term shiCt in Ihe dollar volume
~f the Federal awards to the organization. All
concerned Federal agencies shall be given the
,pportunily to participate in the negotiation
~rocess. but after a rale has been agreed
upon it will be accepted by all Federal
agencies. When a Federal agency has reason
t~.bel!eve. that special operating Cactors
a.l~ctmg Its awards necessitale special
::ldlrect cost rales in accordance with
~aragraph D.S above. it will. prior to the lime
to,e rales are negotiated. notify the cognizant
agency.
b. A nonprofit organization which has not
;::eviously established an indirect cost rate
....;th a Federal agency shall afler the
c~eaniulion is advised that nn award will be
made and. in no evenl. laler than Ihree
monlhs alter the efCecti~'e dale oC the award.
c. Orllanizations that have prc~'iousl)'
established indirect cost rales must submit a
new indirect cost proposal to Ihe cognizant
agency within six months aCter the dose oC
each fiscal year.
d. A predetermined rale may be negoliated
Cor use on awards where there il reasonable
assurance. bued on put experience and
reli3ble projection of the organiz.ation's costs.
that the rate is not likely to exceed a rale
ba~ed on the organizalion's actual cosls.
e. Fixed rate! may be negotialed where
predelermined rates are not considered
appropriate. A fixed rale. however. shall not
be negotiated if (il all or a subslantial portion
oC Ihe organizalion's awards are expected 10
expire before Ihe carry.forward adjustment
can be made: (ii) the mix oC Covernmenl and
non-government work at the organization is
too erratic 10 permit an equitable carry.
Corward adjustment; or (iii) the organization'!
operations nuctuate significantly Crom year to
year.
C. Provisional and Cinal rates shall be
negotiated yo,rhere neither predetennined nor
fixed rates are appropriate.
g. The results or flach negotiation shall be
fornlalized in a written agreement belween
the cognizant agency and the nonprofit
organization. The cognizant agene}' shall
distribute copies oC the agreement to all
concerned Federal agencies.
h. U a dispule arises in a negotiation oC an
indirect cost rate between the cognizant
agency and the nonprofit organization. the
dispute shall be resolved in accordance with
the appeals procedures oC the cognizant
agency.
i. To the extent that problems ure
encountered among the Federal agencies in
connection with the negotiation and approval
process. the Office oC Management and
Budget will lead auislance as required to
resC/lve snch problems in a timely manner.
[Circular No. A-1Z2)
Allachment B
Selected I1ems oC Cost
Table of Contents
1. Advertising cosu
Z. Bad debts
3. Bid and proposal costs (reserved)
4. Bonding costs
5. Communication costs
6. Compensation Cor personal services
'J. Contingene}' provisions
&. Contributions
G. Dr.pn:c1atlon and use allowances
10. Donations ..
11. Emplo)'ee morale. health and 'welfare
costs and credits
1:' Enler-ainment costs
1:1. Equipment and other cupilal expenditures
H. Fines ond penalties .
15. Frm!le benefit.
15. ldlo 'facililies and idle capncil~'
17. Indepr.ndent research and developmenl
(reser\'ed)
lB. Insurance and indemnificlltion
19. Inlerc~t. Cunei-raisins. and'investment
mnnageml:nl cosls
ZOo Lahor relalions cm;ls
I
A-122:4
21. L"5~1'5 on othe~ sward;
:::. Maintenance and r':p"ir costs
%3. l\'I3tcrials /VId supplie&
24. Meelin:;s. conferences
ZJ. Meml.erships. subsc:riptiClns. and
proCessional activit)' custs
zoo Organization cosls
1:7. O\'p.rtimc. extra.pa}' shin. and multishit\
premiums
28. Page chargl's in professional journals
::9. Participant support costs
:!O. Palent cos Is
31. Pension pluns
32. Plunl securi Iy COlts
:13. Prcaward cosls
34. Profession,,1 service costs
36. Profits and lonos on disposition of
depreciuble propert)' or olher capitol
sssets .
31}. Public it'iCormalion ser\'ice cosls
37. Publication lInd rrinlinG COllis
~n. Rearrangement and alteralion costs
39. Recon\'ersion cosls
40. Recruiting coals
41. Relocation costs
4:' Rcnl.ol costs
43. Ro)'ahies and other costs Cor utle DC
palenls snd cop}'rights
44. Se\'erance pay
45. Specialized se1"'\'ice facilities
4ti. Taxes
47. Tennil".ation coats
40. Tr:1ining and education costs
49. Transportalion cosls
SO. Tra~"C1 costs
[Circular No. A-1ZZ)
Allochment B
Selected I1ems oC Cost
Paragraph. 1 Ihrough SO provide principles
to be applied in establishing the ellowubility
oC certain Hems oC cosL Thele princ:iples
apply whether a cost is treated as direct or
indireet. Failure to mention a particular item
DC cost is not intended to impl)' that it is
unallnwable: rather delermination os to
allowabilit" in each case should be based 00
th~ treatm~nt or principles provided for
similar or relaled items of COIL
1. Advertising cosU. .. . "I
a. Ad'..ertising costs mean the costs of .
media s<<".:vices and IIIocialed costs. Media
advertising includes maga%ines. newspapJrs.
rndio and television pro~ams. direct mail.
exhibits. and the lilte.
b. The only advertising costs allowable are
those which are lolelr for (I) the recrulunel1t
of personnel when canlidered in conjunction
.wlth all other recruiunent COltS. as set forth
in paragT'8ph 40:,(ii) the procurement of goods
and scrvicr.s: (iii) the disponl oC surplus
mi'llerials acquired in the performance oC the
award except when organiz;alions are
reimbursed for disposall at a predetermined
amoun' in accordance wilh Attachment N of
OMn Circular A-110: or (h') specific
.requirements oC the award.
2. Bod doblS. Bad-de\;Jts. including losses
(whether actual or estimated) arising from
uncollectible acconnts and othor claims.
related collection costs. and relalc>-:llegRl
COllIs. are unallowable.
3. Bid and proposal cosU. (reserved)
4. l10Jnding cesls.
"
I
Office of Management and Budget Circular A-122 (6/27/80)
a. Gonclin(l co~ls arise when the .
ClJvemment require~.auurance a!lR\I1~1
finclnciallo!& 10 il.ReU or others hy reason of
the acl or defaull of the ol-ganizalion. ~c)'.
o:ise also in inslance, where the ofllanlullon
rr.q.uires similar allluranoe. Included are such
bonds 85 bid. performance. paymenL. .
adnnce pa)'11\ent. InfringemenL and f.dellly
bunds.. .
b. CoslI of bonding required puuuant to
th~ terms of the award ar.. allownhle.
Co Co~tsof bonding requlrod bl' the
OI1l;\niZillion in the general conduct of its
opr.rat:ons arc allowable to Ihe e);lcnllhat
such bonding Is in accordance with sound
business practice and Ihe rales and premiuml
ltre reHsonable under Ihe circumstances.
5. Communication OORt&. COilS incurred for
telephone serviceR. local and long di'lance
Iclephone calls.lelelr-'ams. radiO(lJ"am.&.
postage Rnd the like. are IlIowable.
6. Compensation for pel1/Onal sen'iccs.
a. Definition. Compensation for pel'llonal
services includes /ill compensation psid
currenlly or accrued by the orgl\nil:ation for
scrvice~ of employep.s rendered during Ihe
period of the award. (excepl as otherwille
provided in paragraph g. belowl. It includes.
bu.t is nollimiled 10. aalaries. wages.
director's and executive commiUee member's
Cees. incenth'e awards. fringe benefits.
pension plan coats. allowances Cor off.site
p.'t).. incentive pay. location allowances.
buciship pa)'. aod cost oCliving differentials.
b. AIJowabl1ity. Except 8J otherwise
Qecifically provided in this paragraph the
co.ts of such compensation ue aUowable to
the exlent that:
(1) Total compensation lo.individual
employees is reasonable foc the services
rendered and conIonns to the established
policy oC the organiution consistently
applied to both Govemmen(and Aon-
Govllmment activities: and
(2) Charges 10 awards whether treated as
dirl.-et or indirect cosl, are dele:minlld and
lupported a's required in thi, paragraph.
t. R.easonableness.
(1) Wben the organiution is predominanlly
engaged in activities other than those
sponsored by the Government. compensatioo
for employees on Governmonl-sponsored
work wil\be considered reasonllble 10 the
extent thaI it il consistenl with that paid for
similar work in Ihe organiulion's other
activities.
(21 When the organization is "redominantly
engaged in Government.sponsored activities
and in cases where the \cind oI employees
required for the Government activilics.are
npl found in the organizatioo's other
activilies. compensation for emplo)'ees on
Go\'emment.sponsored work will be
considered reasonable .to the exlenl thaI it is
comparable 10 that paid lor similar work in
the labor markets in which the organi%ation .
compeles for the kind of employees involved.
d. Special considerations in delermining
aJJowabilit}.. Certain conditions require
special consideration and possible limitations
in determining costs under Federal awards
where amounls or types oC comflC11sotion
appear unre8ll0nable. Among such condilions
are Ihe following:
(1) Compenslltion 10 members of nonprofil
or!=aniz;:tions. Iruslees,direrlon. usoci"lcs.
officers, or the imml.>(\iote fKlIlilies thcreoC.
Dctcrminalion should he made thaI such
compennlion is reasnnoule lor the aCluol
personal services rendered ralher than a
distribulion oC earnings in exce~1 of costs.
(2) Any change in an ortlollization's
compensation policy rellulling in a
substantial increase in Ihe organiution',
Icvel of compensation. particularly .....hen it
WRS concurrent .....ilh an increase in Ihe raLio
of Covernmenl owards 10 other activities oC
the organization or an~ chonge ia the
treatment oC allowaoility of specific I)'pes of
compensalion due 10 changes in Governmenl
policv.
e. Unollowoble costs. Costs ",hich are
unallowable under other paragraphs of Ihis
AlIachment shall not be allowable under Ihis
paragraph solei)' on tile basis Ihat they
constitule peDonal compensation.
I. Fringe benefits.
(1) F:inge benefits in the (orm of re~lar
compensation paid 10 emplo)'\!es dunng .
periods of aulhorized absences from the lob.
such as vacation leave. sick leave. mililary
leave. and the like. are allowable provided
such costs are absorbed by all organization
activities in proportion 10 the relalive amount
of time or errort actually devoted to each.
(2) Fringe benefits in tbe form o,C emplo~er
contributions or expenses (or SOCIal secant)'.
employee insurance. workmen's
compensation insurance. pension plan costs
(see paragraph g. below). and the like. are
allowable provided such benefits are granted
in accordance witb eSlablished written
organizatioo policies. Such benefils whether
treated as indirect costs or as direct costs.
shaU be distributed to particular awards and
other activities in a manner consislenl with
the pattern oI benefits accruing to the
individuals or group oC enlployees whose
salaries and wases az:e chargeable 10 such
awards and other acflvilles.
(3J(a) Provisions for a reserve under a selI-
Insuranca program foc unempl~yment
compensation or workmen's compensation
are allowable 10 the extent Ihat the
provisions represent reasonable estimales of
the lisbilities for sach compensation. and tho
t)'pes of coverage. extent oC coverage. and
rates and premiums would have been
allowable had insurance been purchased 10
cover the risks. Howevar. provisions for self.
insured liabilities which do not become
payable for more Ihan one year after the
provision is made shall not eXQHld the
present va1ul oI the liability.
(b) Where an orglnizalion follows a
consiatent po1cr of expensing actual
pa)'ments to. or:OD behalf oL. employees or
'(olmer employees (or unemployment
l:ompensation or workmen's compansation.
such. payments are allowable in the year of
'Payment with the prior approval of the
awarding agency provided they are allocated
10 -all activities of the organization.
(4) Costs of insurance on the lives of
trustl'CS. officers. or other employees holding
positionl of similar rellponsibility are
allowable only to the extent that the
insurancl reprelents additional
compensation. The costs of such insuran~e
w!len the organizalion is named as.
.1
A-122:5
beneficiary are unallowable.
g. Pellsion plan cosls. .
(1) Cosls oC the orgallizalion's pension plan
which are incurred in accordance with the
established policies of Ihe organization are
allowable. provided:
(al Such pulicies meet the lest of
reasonableness:
(bl The methodl of cosl allocation are not
discriminatory: .
(c) The cosl assigned to each fiscal year is
determined in accordance with generally
accepted accounting principle~ 8& prescribed
in Accounling Principles Board Opinion .~o. 8
issued by the American Instilute of Cerllfled
Public Accounlants: and
(d) The cosls assigned \0 a.given fi~ca~ ye.ar
ere funded for all plan particlpanls wllhm SIX
months aiter the end of Ihal year. However.
increases to normal and past service pension
cosls cauled by a delay in funding Ihe
actuariallillbility beyond 30 days aller each
quarter DC the year 10 which such costs are
assignable are unallowable.
(2) Pension plan termination insurance
premiwns paid pursuant \0 the Employee
Retiremenllncome Security Acl of 1974 (Pub.
I.. 93-400) are allowable. Lale paymenl
ch.lTges on such premiwns are unallow~ble.
(3) Excise taxes on accwnulaled funding
deficiencies and olher penalties imposed
under the Employee Retirement Income
Security Act are unallowable.
h. Incentive compensation. Incentive
compensatior. to employees based on cost
reduction. or eCficient perfonnance.
suggestion awards. saCely awards. etc.. are
allowable 10 Ihe extent that the overall
compensation is determined to be reasonable
and such cas Is are paid or accrued pursuanl
to an agreement entered into in good faith
between the organiulion andthe employees
before the services were rendered. or
pursuant 10 an eSlablished plan followed by
Ihe organization so.consislently as 10 imply.
in errecL an asreementto make such
payment. .' ,
i. Overtime. extra pay shift. and multlshift
premiums. See paragraph 27.
j. Severance po}'. See paragraph 4-4.
k. Training and education ODSts. See
paragraph 48. 40 ' .
I. Support of salaries and wages: .
(1) Charges to awards for salarie~ and
wages. whether trealed lIS direct cosls or
indirect costs. will be based on documented
payrolls approved by a responsible official(s)
of the organiution. The distribulion of
salaries and wages 10 awards musl be
lupported by personnel activity reports as
prescribed in subparagraph (2) below. except
when a substitute syslem haa been approved
in wriling by the the cogninnl agency. (See
paragraph E.2 oI Attachment A)
(2) Reports reflecting the distribution o(
aclh'ity of each employee musl be
maintained for all staff members
(proCessionals and nonprofessionals) whose
compensalion is charged. in whole or in part,
directly 10 awards. In addition. in order to
support Ihe allocation of indirecI costs. such
reports musl al80 be mainlained for olher
employees whose work involves Iwo or more
funcilons or actlviliel If a dislrlbulion of their
compenllolion between such functions or
oClivilies is needed in Ihe delerminalion of
I
.1
Office of Management and Budget Circular A-122 (6/27/80)
the orgRnization's indirect cost rRte(s) (e,g..
In 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 mel!.tlhe following standards:
(a) The reports must reflect sn after-the-
(act detennination oC the actual activity of
each I.'mployee. Dudget estimates (i,e..
estimates detennined before the services are
perfonned) do not qualify as support for
chRl'Jles to awards.
(b) Euch report must account for the tolal
activity Cor which employees are
compensated and which is required in
fulfillment of their obligations to the
organization.
(e) The reports must be signed by the
tndividual employee. or by a responsible
supervisory official having first hand
llnowledge oC lhe activities perConned by the
employee. that the distribution of activity
represents a reasonnble eslimale of the
actual work perCo:med by the employee
during the periods covered by the reports.
(d) Tha reports must be prepared at least
monthly and must coincide with one or more
pay periods.
(3) Charges for the salaries and wages oC
nonprofessional employees. in addition to the
supporting documentation described in
subparagraphs (1) and (2) above. must also
be supported by records indicating the total
number of hours worked each day
maintainad in conCormance with Department
of Labor regulations implementing the Fair
Labor Slandards Act (29 CFR Part 516). For
this purpose. the tenn"nonprofessional
employee" shall have the same meaning as
"nonexempt emplol'ee." under the Fair Labor
Standards Act.
(4) Salaries and wages of employees used
tn_meeting cost sharing or matching
requirements on awards must be supported in
the same manner assalades and wages
claimed Cor reimbursement from swarding
agencies.
i. Contingency provisions. Contributions to
a contingency' reserve or any similar
~rovision made for events the occurrence of
...hich cannot be foretold with certaint" as to
limp.. inlensily. or with an assurance oC their
~appening. are unallowable. The term
"contin~ency reserve" excludes self-
insurance reserves (see paragraph 6.f.(3) and
16.a.(2)(d)): pension funda (see para8rllph
i.(g)): and reserves for normal severance pay
:see paragraph 44.(b)(l).
8. Contributions. Contributions and
:ionations by the organization to olhers are
~llallowable.
9. Deprecioiion and use ollowances.
a. Compensation for the use.of buildings.
,:her capital improvements. and equipment
~::: l>nnd m2;' be made Ihrough use
~!iuwan::es or depreciation. However. except
i!S prtlvidcd in paragraph f. below a
~OInui:lation of the two methods mav not be
,:sed in connl!Clion with a sin!;!le class of
~...cd 1I5~ets (e.g.. b:lildings. omce equipmenl.
:c:mpuler equipment. etc.).
b. The compc:a!ion of use allowances or
';'~pr!'ciaIiCln shall be based on the
.o!uisi:ion Cosl of the assets involved. The
1::ot::silion cost of an asset co::aled 10 the
of!/anizalion by a Il>ird party shall be ils fair
market value althe lime of the donation.
c. The computation of use allowances or
deprecia tion will exclude.
(1) The cost of land:
(Zl Any portion of Ihe cost of buildings and
equipmenl borne by or donated by the
Federal Government irTespective of where
litle was oriJ;inally vested or where it
presently resides: and
(3) Any portion of the cost of buildings and
equipment cO!1tribuled by or Cor the
orllanizaliun ill salisfaction oC a stRtulory
matching retirement.
d. Where Ihe use allowance method i.
followed. the u.e allownnce Cor buildings and
improvement (including land improvements
'such lIS Pllved ;,arkins areas. fences. and
sidewalks) will be computed at an annual
rute not exceeding two percent oC acquisition
cost. The use allowance for equipment will
be computed al an armual rate not exceeding
six and two-Ihirds percent oC Bcquisilion cosl.
\Vhen the use allowonce method' is used for
buildings. the entire building must be Ireated
os a single asset: the building.s conlponenla
(e.g. plumbing system. heating and air
conditioning. etc.) cannot be segrelluted from
the building's shall. The two percent
Iimitalion. howevp.r. need not be applied to
equipment which is merely aaached or
faslened to the building but not permanently
fixed to it and which is used as furnishings or
decorations or lor specialized purposes (e.g..
dentist chairs and dental treatment unils.
counlers.laboratory benches bolted to tha
fluor. dishwashers. carpetins. ete-I. Such
equipment will be considered as not being
permanenlly fixed 10 the building if it can be
removed without the need for costh' or
extensive alterations or repairs to the
building or the equipment. E:juipment that
meets these criteria will be subject to the six
and two-thirds percent equipment use
allowance limitation.
e. Where depreciation method is followed.
the period of useful service (useful life)
established in each case for usable capital
assets must take into consideration such
factors as type of construction. nat~re of the
equipment used. technological developments
in the particular program area. and the
renewal and replacement policies followed
for the the individual ilems or classes of
anets involv!d. Tne method of depreciation
used to assign the cost of an Illlct (or group
of assets) to accounting periods shall reDect
the pattern of consumption of the alllet
during its useful life. In the absence of clear
evidence indicating that the expectr.d
consumption of the asset will be significantly
greater or lesser in the early portions of its
useful life than in the laler portions. the
straight-line method shall be presumed to be
the appropriate melhod_ Depreciation
mcthods once used shall not be changed
unless IIpproved in advance b)' the co~niulnt
Fc:cl!ralllsenc)'. When the deprecililion
method is introduced for application 10 assets
previously subject to a use allowance. the
combination of use alrowances and
ncprecialion applicable to such assets must
nol exceed the tolal acquisition Cosl of the
assets. ,^.hen the depreciation method is used
r,'r huildinlls, a uuildinlo!'s shell n:1I~' ue
A-122:6
srgrr.gllled Crom each building componenl
(e.!;!., plumbinll system. heating. and air
conditioning syslem. elc.) and each item
deprecialed over its estima 'ed use Cui liCe: or
the entire building (i.e.. the shell and all
components) may be lreated as a single 85set
and depreciated over a single useCullife.
C. When the depreciation method is used
for R particular c1as. of assels. no
deprecialion mR)' be allowed on an)' such
ass cis lhat. under parasraph e. above. would
be viewed as Cully depreciated. However. A
reasonHule use allowance may be negotiated
Cor such assets if warrRnted after laking into
cunsideration Ihe amounl of deprecialion
previously charged 10 the Government. the
cstimaled uscfullife remaining Al time oC
nellotiulion. the errect oC any increased
mllinlenaaee charges or decreased efficiency
oue 10 age. llnd any other factors pertinent to
,Ihe utilization oC the asset for the purpose
con tempi a ted.
g. Charges Cor use allowancell or
depreciation must be supported by ndequa Ie
property records and ph)'sical invenlories
must be taken at1easl once every two years
(a stalistical sampling basis is acceptable) to
ensure that assets exist and are usable and
neeoed. When the depreciation method is
Collowed. adequale de;1reciation records
indicalins the amount oC depreciAtion laken
cllch period must also be mainlained.
10. Donations
a. SCrI'ices received.
(1) Donated or volunteer services may be
furnished to an. or~ani%8tion by professional
and technical personnel. consultants. and
other skilled and unskilled labor. The value
oC Ihese. services is not reimbursable either as
a direct or indirect (;osl.
(:C:l The value of dunaled services utilized
in lne performance oC a dirl!ct cost activity
lihall be ccmsidered in the delerminalion of
the organi:z.ation.s indirecl cost rate(s) and.
accordingl)'. shall be allocaled a
I,roportion'lte share uf applicable indirect
costs when Ihe following circumstances exist:
(a) "he a~~egale value oj the services is
n1l1terial:
(bl The services are supported b~l'
liignifiCllnt amnunl of tloe illllirecl costs. _ .
incurred by the org:miZR lion:
lc) The dirr.ct cosl activily is nol pursued
primarily for the benefit of lhe F eaeral
GO\'l~mment.
(:I) In those inslances where lhere is no
.basis for determininl: the fair market value of
the scrvices rendered. the recipient and the
cO[4T1izant agenc)' shall negotiate an
ni;propriale aiioc~lion oC indirect cost to the
sct\.ices.
(4) Where donRted services dircctly benefit
a I=Tojccl supporled by an award. the indirect
Cosls allocaled to the services ""m be
considered as a part of the total costs of the
project. Such indirect Cosls may be
rllimbursed under the award or used to rileet
cust sharing or matching requirements.
(5) The villue oll!'!e donated services may
b" used 10 mecl cost sharing or matching
rllquirements under conditions d~scribed in
I\ttnchment E. OMB Circular No. A-110.
\\'hcre donaled sen'ices are trealed as
inclirecl cests. indirect COllt rates will
Sl~pllrlll~ the "i1lue of Ihe donntiuns so that
I
~anagement and Budget Circular A-122 (6/27/80)
nt will not be made.
rket value of dona ted sarvices
)uted as follows:
)r volunteer services. Rales ror
,all be consistent with those
paid for similar work in other
he organization. In cnes where
,kills involved arc not found in
Ivities of the organization. the
all be consistent with those paid
[)rk in the labor market in which
ion competes ror such skills.
s donated by other
.. When on emplo~'er donates
)f an employee. lhese services
ed at the emploree's regular rate
sive of fringe benefi Is and
il provided the' services are in
I ror which the employee is
d. If the services are not in the
~ which tbeemployee is nonnally
rket value shall be computed in
vith subparagraph (a) above.
nd space. .
d goods: i.e.. expendable
~erty/supplies. and donated use
. be furnished.to an organization.
the goods and space is not
I either as a direct or indirect
ue of the donations .may be used
sharing or matching share.
: under the conditions described
1t E. OMB Circular No. A-ll0.
the donations shall be
D accordance with Attachment
1ations are trealed as indirect
:t cosl rates will separate th,
ionalions so that reimbursement
iace.
'ee mOl'Qie, bealth. and welfare.
pd.'ts. The costs oC house
health or lirst-aid clinics. andl
s. recreational activities.
ounseling services. and other
urrea in accordance with the
's established practice or custom
!\'ement oC working conditions.
,pioyee relations. emplo~'ee
emplo)'ee performance are
iICh costs will be equitably
to all activities of the
. Income generatp.d from an)' oC
es will be credited to the cost
is such income has been
lei over to employet' welfare .
s. .
,jnment costs. Costs oC
diversion. social activities.
lInd costs relating therelo. suet.
19ing. renlals. transportation. and
t unallowable (but see
.1 and 25). .
lent and other capital
in tbis paragraph. the following
l1e.mcqnin~ s~U9rth below:
ment" means an article oC
ble tangible personal property
ifullife of more than two years
isition cost oC S500 or more per
anization may use its own
'ovided thai ii atleost includes all
ble tllngible personalpropert)' as
lin.
(2) '"Acquisition cost" means the net
in\'oice unit price of an item of equipment.
including the cost of any modifications.
allachments. accessories. or auxiliary
apparatus necessary to make it usable for the
purpose for which It is acquired. Ancillary
charges. such as taxes. duty. prolective in-
transit insurance. freight. and installation
shall be included in or excluded rrom
acquisition cost in accordance with the
organization's regular wrillen accounling
practice..
(3) "Special purpose equiplolent" means
equipment which is usable only for research.
medical. scientific. or technical activities.
Examples o{ special purpose equipment
include microscopes. x-ra)' machines. surgical
instruments. and spectrometers.
(4) "General purpose equipmenl" means
equipment which is usable {or 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 ollice
equipment and Curnishings. air conditioning
equipment. reproduction and printing
equipment. motor vehicles. and automatic
data processing equipment.
b. (1) Capital expenditures Cor general
purpose equipment are unallowable as a
direcl cost except with the prior approval oC
the awarding agency.
(%) Capital expenditures for special purpose
equipment are allowable as direct cosls
providad that items with a unit cost o{ $1000
or more have the prior approval oC the
awarding agency.
c. Capital expenditur.es Cor land or
buildings are unallowable as a direct cost
except with the prior approval of the
awarding agenC}'.
d. Capital expenditures for improvements
to land. bl:i1dings. or equipment which
materially increase their value or useful liCe
are unallowable 81 s direct cost except with
the prior approval oC the awarding agency.
e. Equipment and olher capital
e::ocpenditures are unallowable as indirect
costs. Howe\'er. see paragraph 9 for
allowabilit)' of use allowances or
depreciation on buildings. capital
improvements. and equipmenL Also. see
paragraph 42 {or allowability of rental cosll
for land. buildings. and equipmenL
14. Fines and penalties. Costs of fines and
penalties resulting from violations oC. or
failure of the ol'llanizalion to comply with
Federal. State. and local laws and re~ulalions
are unallowllble except when incurred 88 a
result of compliance with specific provisions
oC an award or instructions in writing from
the awarding agenC}'. .
15. Fringe benefits. See paragraph 6. C.
16. Idle facilities and idle capacit:r.
a. As used in this paragraph the following
terms have the meanings set forth below:
(I) "Facilities" means land and buildings or
an)' po:,tion thereof. equipment indh'idually
or colleclively. or any other tangible capital
asseL wherever localed. and whether owned
or l'~nsed by the ortlanizalion.
(~J "Idle facilities" means complc:lel"
ullus.cd facililies Iha: arr. e'(cess to the'
organi7.ation's current needs.
(:Ji '"Idle cJi'ncity" me::ms the unlll:ed
I
A-122:7
capacity of partially used racilities. It is the
differcnce between thaI which s facilily
could achieve under 100 per cent operating
time on a one-shirt basis less operating
interruptions resulting from time lost (or
repairs. .etups. unsat:sfactol")' materials. and
other nonnal delays. and the exlent to which
the facilily was actllally used to meet
demands during the ac:countinll period. A
multishiCl basis may be used iC it clln be
shown that this amounl. oC usage could
normally be expected for the Iype of facilily
involved.
(4) "Costs of idle Cacilities or idle capacity"
means costll such IUI 1I1aintenance. repair.
housing. rcnt. and other relaled casls: e.g..
property taxes. insurance. and depreciiition
or use allowances.
b. The COSII of idle facilit.ies are
UnAllowable except to Lhe extcntLhd:
(1) They are unnecessary to rne~t
nuctualions in workJoact or
(Z) Althl)ugh nol necessary to meel
nuctuations in workload. they were
nllcessary when acquired and are now idle
because or chonges in program requirements.
errorts to achieve more economical
operatioftll. reorganiz.a tion. lermina tion. or
other causes which could not have been
reasonably foreseen. Gnder the exception
slated in tbis subparagraph. COlts of idle
racilities arc allowable for a reasonable
Jleriod of time. ordinarily nolto exco:!ed one
year. d~pending upon the initiative taken 10
use. lease. or dispose DC such facilities (but
see paragraphs 47.b. and d.).
c. The COSII of idle capacit). are nonnal
costs of doing business IInd lire a factor in the
normlll fluctuations o{ usage or indirect cost
rates from period to period. Such costs are
allowlIble. provided the capacity is
reasonably anticij)aled 10 be necessary or
wall origi:'lally reasonabie and is subject to
reduction or elimination by subletting.
renting. or sale. in accordance with sound
business. economiC!. or security practices.
Widesprelld iele l'.apacity throughout an
entire lacility or among a group of assets
having substanliaUy the same function may
be idle racilihas. .
17. l'ltl";..mdcTJt rescCl(Ch alld acv~Jopment
[Reserv"dl. -
18. Insurance and indemnification. I
a. Insurance includes insu~ance which the
orBanization is rlHluired to C81'T1'. 0:' which is
approved. under the terms of the .:ward and
any other insurance which the organization
maintains in connection with the peneral
conduct of ill operations. This para@raph
does not apply to insurance which represents
frin!!e benefits for emrloyees (ll!!e pa:-alirllpn
e.r. and 6.g.(2)).
(1) COSIS of in,mrance r~quired or
ar-proved. and maintained. purlluunt to the
award are allowable.
(::) Costs of olher inS1JranCe mllintained bv
the orgiJnizalion in connection with the .
!;!l:neral conducl or its operations are
ullowable subject to the followinlllimitations.
(a) T}'p'!s and extent of coverage shall be
in accordance with SOlond business practice
and the rolle' and premiums shall be
reasl'lnllble uncer the cir::umstances.
(hI CI"II:~ allowed for bus.incss interruption
or othp.r similar insurance shall be limited to
I
Office of Management and Budget Circular A.122 (6/27/80)
",~DtilJlion Dnd in anlicipalion of the '!ward
~"i:I~It' sut.h co~ts is neCCSSllry 10 comply with
~l1e pruilo~ed delivery schedule or period or
f.etlorm:ll1ce. Such Cosls lire allowable only
tv :he ell tent that Ihey would hlwe been
l*itcu\'able if incurred after Ihe dllle of lhe
~w.cr-d Imd "nly .....ith the wrillt'n approv,,) rof
the~w.,rdiIlS ngen~r.
J4. J'mrcs.~ionaJ serl'icc costs.
3. CoslS of profl'l':sionnl and consultonl
serviccs rendereJ by persons who are
r.:....,bers of II particulnr prore~sion or po~~ess
.11 ~Illlr.:al skill. anJ who arc not officers ur
cl"":;.iuyees of the orgbllizotion. arc allowable.
,...b}ectlo U. c. and d. of Ihis pliragraph when
~ltSUlmule'in r'.lla lion .10 the servic~s
rer:lerr.d Ilnd whlln not conlingenturon
IfKOver" of Ihe costs from Ihe Go~'ernmenl.
b.. In del::rnling Ihe allowauility of t:osls in
. particular cue. nu single foctor or any
!J:lCCial conrbina tion of faclors is neceS5aril)'
determinati\'e. However. Ihe follo.....ing
fa't;turs are relevanl:
l.t)1'he nolure and scope of Ihe service
\1!1It.l:ered in relalion 10 the service required.
rZI The ncces,;i1y of conlrllcling for thl!
~ice. cnnsidering the organization's
~hilily in the particulnr area.
(~J The past pallern of such costs.
particularly in the years prior to Government
awards.
. (41 The impact of Government aw&ords on
tile organization's business (i.c.. what new
pcohlems have arisen).
rSI Whether the proportion of Government
wan to the organization's lotal business is
SIlIll:h as to infiuence the organization in favor
Gf incurring the cost. particularly where the
services rendered are not of a continuing
Mlure and have little relalionship to work
under Government grants and contructs.
(6) Whether the ser\'ice can be performed
more economically by direct emplorment
mlher than contracting.
(7) The qualifications of the individual or
Clilncem rendering the service and the
CU.stOlTllll1' fees charged. especiall)' on non-
Government awards.
(al Adequacy of the contractual agreement
fOt' the service (e.g.. description of the service.
estimale of time required. rate of
compen~ation. and termination provisions).
e. In addition to Ihe factors in poraSTaph b
illI.XJ\'e. re:ainer fees to the allo.....able musl be
supported by evidence of bona fide services
available or rendered.
d. Cost of legld. accountins. and consulting
$crvices. and related costs incurred in
conMction with defense of antitrust suili..
and the proseculinn of claj.:ns.allainst lhe
Government. are unallowablc. Costs of lel!ol.
ltc:;uunling IInd consul ling services. and
related costs. incurred in connection with
pall:Dt infringement litigation. organization
and reorgllnizolion. are unallowable unless
otherwise prcwided fo.r. in the award (but see
patl\!!raph <liel.
35. Profits and lasses on disposition of
depreciable prapert)' or other capital assets.
a. (1) Gains and 10R~l'!S on sale. retirement.
or olher disposilion of aerreciable property
sh;;1\ be inclurled in Ihe year in .....hich they
oc::ur as cred:~, or chargcs to cost grouping!s)
in whfchlhe depreciation applicable 10 such
property was included. The amount ~.f the
flain or loss \0 be inr:1uded as a credit ur
chitr!:e 10 the appropriate cost !!rouping(s)
Shilll Ullthe dillercn.ce bel ween the amount
f('lilized on the property and the
lInucprecialed basis of the property.
(2) Gllins and losses on the disrositiun of
c11'f'reciable properl}' shall nol be recogni:r.ed
II~ a separale credit or charge under the
fnBuwing conditions.
Ill) The IIl1in or loss i! processed through II
depreciatiun resen'e account amI is re:nected
ill Ihe Jepreciation allowauie under
pll ro !:ro ria 9.
(h) TIle rroperty i! Sivlln in exchange as
purt of the purchll~e price of a similar ilcm
and the gain or loss is taken into account in
de~enl1illillg the deprecialion cosl basis of the
newilC1m.
(cj A loss rellults frum the fuilure to
maintain permissible insurance. eAcert as
othl!rwise pt'l1Vided in parallraph 18.a.(3).
(dl Compensalion for the use of the
propert)' was pro\'ided through use
allowllnces in lieu of depreciation in
accordance with paragrAph 9.
(e) Gilins and lusses arising from mass or
extraordinnrv sales. reliremenls. or olher
dispositions shall be considered on a cose-
bv.calle basis.
"b. Gllins or Insses of any nature arisinc
from the sale or exchange of property other
than the property covered in paragraph It.
above shall be excluded in computing award-'
custs.
35, Public informatiun sen'ice costs.
a. Public information service costs include
the cost associated.with pamphlels. news
releases. and other forms of information
services. Such costs are normally incurred 10:
(1) Inform or lns1ruct indh'iduals. groups. or
the general publie.
(2) Interest individuals or groups in
participaling in a ser/ice program of the
'01 ganiza tion.
(3) Disseminale the results of sponsored
and nonsponsored activities.
b. Public info:mation service costs are
allowable as direct costs with the prior
a?proval of Lhp. aW3rdins agenC)'. Such costs
ore unallowable as indirect costs.
37. Publication and printing costs.
a. Publication costs include the cnst5 of
printing (including the pr()ce~.es-of
composition. plate-making. press work.
binding. and the end products produced by
such pro~sses), distribution. promotion.
mailins. and general handling.
b. If thel'e costs lIM! not identifiable with a
parlicular-east objective. they should be
allocaled a. indirect costs to all benr.Ciling
activities of lhe organization.
e. Publication and printing costs are
unallowable as direct costs except with the
priur IIpproval of the awarding agency.
d. Tne cosl of page charges in journals is
addressed pllragraph 28.
38. Reorrangemenl.and alteration costs.
Costs incurred for ordinarv or normal
rearrangement and alteration of facililies ore
alluwable. Special ~rrangemenl and
alteration COSIS incurred speCifically for the
project are allowable with the prior approval
of the awarding agency.
39. Reconversion costs. Costs incurred In
the restoration or rehabilitation of the
organization's fodlltill'l to approximately the
I
A-122:9
88me condition existinl! immediately prior to
commencement of Government swards. fllLe
wear and tear excepted. are allowable.
40. Rect1Jiting costs. The following
recruiting costs are allowable: cost of "help
wanted" advertiling. opera ling costs of an
employment office. costs of operating an
educationaltesMg program. travel expenses
incloding food and lodging of employees
while engaged in recruihng penlonnel. !ravel'
costs of applicants for iDlerviews Ior
prospective emplo}'ment. Dnd rl'lot::ltion COSIS
incurred incident to rr.cruilmcnl of new
employees (~ee parograph 41C). Where the
organi:r.ntion uses employment agencics,
costs not in excess of stondDrd commercial
rates for such eervices are allowRble.
41. Relocation costs.
a. Relocation costs Dre costs inc.idenl to the
permanent change of dOly assi~lTIent (for an
indefinite period or for a stoled period of not
less than 12 montbs) of an exi~liTl8employ(!e
or upon recruitment of 8 new employee.
Reloc.ation costs ore allowuble. subjecl to the
limitation described In paragraphs b. Co and d.
below. provided thot:
(1) The move Is for the br.nefil of Ihe
employer.
(2) Reimbursement to Ihe employee is in
Dccordance with an established wrillen
policy consistently followed b~' the employer.
(3) The reimbunlcmenl does not exceed the
employee's actual (or reasonably eslimaled )
expenses.
b. AlIo.....able relocation costs for current
employees are limited to the following:
(1) The costs of transportation of the
emr1oyee. membeMl of his imrnediate fllmU~'
nnd his houserold. and personal effects to the
new location.
(2) The cosl5 of finding a new home. such
as advance trips by employees and spouses
10 locale 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 fonner Dome. These costs.
togcther wilh tlioae described in (4) below.
are iimiled to 8 per cent of the "sales price of
the employcc's fllnnqr Dome. '-
(4) The continuing costs of ownership of
the vacant former bome after the settlement
or lease date of the employee's new
permanent home. such as maintenance of
buildings and grounds (exclusive of fIXing up
expenses). utilities. taxes. and propert)'
insurance.
(5) Other necessary and rcasonable
expenses normaliy incident to relocation.
such as the coalS or cancellmg an unexpired
lease. disconnecting and reinstalling
household appliances. aDd purchasing
insurance againat loss of or damages to
personal property. The cost of cancelling an
unexpirad lease i. limited to three times the
monthly rental.
e. Allowable r&location coslS for new
employees are limited to thoee described in
(1) and (2) of paragraph b. ebove. When
relocation coslS incurred iDeidentto the
recruitment of new employee. have beeD
allowed eitber na a direct or iadirect coet and
the employee reeigns ror reasons within hil
..
;
I .I
Office of Management and Budget Circular A-122 (6/27/80)
control within 12 months after hire. the
organiz.ation shall relund or credit the
Government lor ita shore ol lbe cost.
However. the costs of travel 10 an overse~s
location ahall be considered travel costs In
accordance with paragraph 50 and not
reklc:ation costs (or the purpose of this
paragraph If dependents are not permitted al
the location for any reason snd the costs do
not include costs of transporting household
goods. . .
d. The following costs related to relocation
.~ unallowable:
(1) Fees snd oUlllr costs associpted with
acquiring a new home.
12) A loss on the snle of a former home.
r3} Continuing mortg"ge principal and
interest payments on a. home being sold.
(4J Income taxes p(lid by 6n employee
related to reimbursed relocntion costs.
42. Rental costs.
a. Subject to Ihe limitations described in
paral):'aphs b. through d. of this paragraph.
rental costs are allo.....able to the extelltthat
the ratlls are reasonable in light of such
factors as: rental costs of comparable
propert)', if any: market condilions in the
area: alternatives llvailable: .Rnd the type. Ii(e
expectanc)'. condition. and value of the
property leased.
b. Rental costs under sale and leaseback
arrangemants are allowable only up to tbe
amount that would be allowed had the
Drianizlllion continued 10 own the property.
c. Rental costs under le.ss-than-Iength
leases ap. allowable only up 10 the amount
lhat wouJd be allowed had title to the
property vested in the organization. For this
purpose. a less-than-anns-Iength lease is one
under which one party to the lease agreement
is able to control or substanlially infiuence
the actions oC the other. Such leases include.
cut are not limited to those between (i)
divisions oC an organization: (ii) organizations
I:nder common control through common
ofikers. directors. or members: and (iii) an
organization llnd a director. trustee. ocncer.
or kay l!mpJoyee of the organization or his
lznmediale Camily either directl)' or through
cor;Jnralions. trusts. or similar arrangcments
in which they hold a controlling intercst.
d. Rental costs under leases which create a
material equity in the leased I'ropt:=rly are
allowable only up to the amowllthHt would
be aHowed had the orl;anizatiun pw'chased
the property on the date the lease agreement
was executed: e.g.. depreciation or use
allowances. maintenance. taxes. insurance
but excluding interest expense and other
unallowable cosls. For this purpose. a
material equity in the property exists if the
iease in noncancelable or is cancelable only
upon the occurrence of some remote
contingency and has oneorrl)ore oC the
following characteristics:
(1) The organization has Ihe right to
purchase the property for a price which at lne
beginning of the lease appears 10 be
substantially less than the probable fair
:::ar~et value at the time it is pennilled to
purcnase the preperty (commonlv called a
lease with a bargain purchase option):
(ZJ Title to the property passes to the
organization at some lime during or aller the
iease period:
(3) The tenn of the lease (initial tenn plus
periods covered b)' baq;ain renewal options.
If any) is equal 10 75 per cent or more of lhe
economic life of the leased properlr: i.e.. the
period the property II expected to be
econooically usable by one or more users.
43 noyollies and other costs for use of
pal ..~ and cop}'rights.
a./ ;yalties on a patent or copyright or
amortization of the cost of acquiring by
purchase a copyright. patenl. or right.
lhereto. necessaT)' for the proper perfonnance
of the award are allowable unless:
(1) The Government has a license or the
right 10 free use of the pnlent or copyright.
(2) The patent or cop~'right hns been
adjudicated to be invalid. or ha. been
administratively detennined 10 be invalid.
(31 The palenl or copyright is considered 10
be unenforceable.
(4) The patent or copyright is expirnd;
b. Special care should be exercised in
determining reasonableness where the
ro~'allies may hllve been arrived at as a result
of less then ann's length bargainins; e.g.:
(1) Royallies paid to persons. including
corporations. afCilialed with the organization.
12J Royalties paid to unaffiliated parties.
including corporations. under an agreement
entered into in contemplation that a
Government award. would be made.
(3J Royalties paid under an agreement
entered into after an award is made to an
organiza tion.
c. In al1Y case involving a patent or
copyright fonnerly owned br the
organization. the amount of royally allowed
should not exceed the cost which would have
been allowed had the oTllanization retllined
title thereto.
44. Severance pay.
a. Severance pay. also commonly referred
to as dismissal wages. is a payment in
addilion to regular salaries and wages. lJy
organizations to workers whose employment
is being terminated. Costs of severance pay
are allowable onlv to the extent that in each
case. it is required by (i) law. (ii) employer.
employee agreement. (Hi) estoblished policy
that con~!itutes. in effect. an implied
agrecment on the organi:ation's part. or (iv)
cireums:a:Jces oC the particular employ:nent.
b. Costs of .ever:mce p:l)'ments are divided
into two catqories as foliows:
(1) Actual nonnaltrunover seVer-clnca
payments shall be allocated to all aeth'Hies:
0:. where the organization prnvides for a
. rellerve for nonnal severances such method
will be acceptable if the charge to current
operations is reasonable in light of paymenls
actual!~' made for nonnal sev"!rancea over ;l
representative past period. and if amount!!
ch;;ried are allocaled to all activilies of the
organiza lion.
(2) Abnonnal or mass se\'erance puy is of
such a conjectural naiure that measurement
or costs bv means of an accrual will nel
Dchie"'e equity 10 bolh parties. Thus. accruals
for this purpose are not allowable. However.
the GovernmEnt recognize:: ils obligation 10
participate to the e>:tent 01 :15 fair shnre. in
nny specific pa)'ment. Thus. allowlIbility will
be considered on a case.b)'-case basis in the
event of nccurrenee.
45. Specialized servica faciJJties.
a. The costs of services provided by hi~hiy
A-122:10
complex or specialized facilities operlltcd by
the organization. such as electronic
computers and wind tunnela. are allowable
provided the charges for the service. meet
the conditions of either b. or c. of this
paragraph and. in addition. take into account
on~' items of income or Federal financing thaI
qualify II applicable credits under paragraph
A.S. o( Attachment A.
b. The coats of such services. when
material. must be charged direcU)' 10
applic:Jble IIwarus bafted on actual u.~age of
the services on Ihe basis of a schedule of
rales or cstablished methodology that (iJ does
001 discriminate against lederally supporled
nctivities of the organization. including usa!!e
by the organization for internal purposes. and
(ii) is designed to reco\'cr only tile aggregute
CO!!ts of,\ohe services. The Cosls of each
service shall consist nonnally of both rlS
direct costs !Ind its allocable share of all
indirer:t COSIS, Advance agreements pursuant
\0 parugraph A.5. of Attachment A arc
particularly important in this situation.
c. Where the costs incurred for a service
lire not material. the)' may be allocaled as
Indirect costs.
40. Taxes.
3. In general. laxes which the orllanizalion
:5 required to pay and whi:;h are paid or
.accrued in accordllnce with generally
accepted accounting principles. and
payments mnde to local governments in lieu
of taxes which are commensurate with the
local government ~ervices received are
allowable. except lor (i) laxes from which
exempliuns are available 10 Ihe organization
uirectiv or which are availuble to the
organiZation based on an e:-.emption aCforded
the Government and in the laller case when
the awarding agency makes a\'ai!able the
Mceuary exem?tion certiCica tes. (ii) special
usse53ments on land which represent capital
improvements. and (iii) Feder-dl income taxes.
b. Any refund of laxes. and an)' pllymenl 10
the oTllanization 01 interest thereon. which
were allowed as award costs. w"1 be
creuitcd either as a cosl reuuclion or cash
refund. as appropriate. to Ihe Government.
47. Termillulion costs. Terminatitin of
awards generally give ris. to Ihe incurrt:=il\;c
ur cost~. or the need for specialtrenlment of
cosls. which would not have ariscn had Ihe
award not been tenninaled. COllt principies
cl)vering these items UP. set lorth below.
The)' are to be uscd in conjunction with the
'othnr provisio:ls of this Circular in
termination situations.
a. Cammon items. The CUllt of items
rensona~ly usable on the organization's other
work shall nOI be allowable unlr.ss Ihe
ol'Jlnr:izalion submits evidence that it would
not rc:ain such items at cost without
sustaining a loss. In deciding whether such
Hems are reasonnbly usabie l)n other work or
the oq;anization. the awardiJ:g agency shouid
consider the organi~ation's plans and urders
for current and scheduled activil)'.
Contemporaneous purchases 01 common
items by the o!1;anizalion shall be rr.!lilrded
as cvidence that such items sre reasonably
usable on Ihe organization's other work. Any
nccepl:mce of common items liS allocable to
the lenninaled portion of the aW:Jrc shall be
limited 10 the exlcntlhnl thl' Ollantili,,~ of
I
Office of Management and Budget Circular A-122 (6/27/80)
such item. on hand. in transit. and on order
are in exces. ot the reasonable quantitative
~uiremenU ot othf!r work.
b. Cosu CDntinuing after I8mrinatiar:. II in
. particular caM. de.pite all reasonable
clloN by the orga.oi%ation. certain CO.IS
cannot be diacontinued immedialely alter the
effective date ol termination. such coaU are
pDerally allowable withia the IimitatioDS let
forth 1.:2 this Clrcular. axeept that aDY such
co.u continuing aIter terminatioD due to the
negligent or willful failure oC the org&Di:ation
to discontinue such costs shall be
unallowable. .
Ca Lou of r.:seful value. Lou oC useCul value
of sredaJ tooling. machinery and equipment
wr;!".h WBlnot charged to the award as a
1:.:I;.:.ial 'l:xpenditure is geners.Jly allowable if:
i: , Such .pecial tooling. macinery. or
eq. :pment is not reuonsbly capable oC u.se in
the. ..!her work of the organi:ation.
[::1 The interest oC the Govemme:1t is
;r.r.:~ti!d by transCer oC title or I'y other
lItr:l:U deemed appropriate by the awartiiag
a~' ncy.
Ii. Rental costs. Reotal cosu under
t:;:r~xpired lease. are generally allowable
",,'I:re clearly shown to have been
o,donably necessary for the performaDce oC
It:.: terminated a ward less the re.idual value
0;' such ledses. if (i) the amou.,t of such !'ental
ci:.imed does nat exceed the reasonable use
vabe oi the property leased Cor the period oC
tl:,. 'lwlJrd and .uch Iu..1her ~riod as may be
rr.".;m:,:ble. and (ii) the orglLDi%ation makes
all reasonable effort:! to terminate. assign.
HtUe. or otherwise reduce the cost of such
tesse. The~ Illso mav be included the cOlt of
Iherations oC such le'ased property. provided
nctt aherations were neceS&&rj' for the
performance oC the award. and of ~asonable
restor;tion required by the provisioo.a aC the
leue.
ll.. Settlement BxpenS1l6. SertJemtmt
expenses including the following ano
pn~rally allowable:
(1) Ac::ounting. legal. clerical. and similar
costs reasonably neCi/Ssa.ry ior:
(a) The preparation and present.ltion to
awarding agency oC settlement claims aDd
supporting data with reapee:: to the
terminated portion oC the award. wesl the
termination is for deCaulL (See parllgraph 4.a.
oi Attadunentl.. OMS Clrc:ular No. A-no:
aIId
(h) The terminalion iUld .ettlement oC
suoawa:d:s. .
(ZI Realonable COlts for the storage.
transportation. protection. aDd dispositiou oC
pro~rty provided by tbe Government or
a~qui~d or produced Cor the aware!: except
When gran lees are reimoW"$ed Ior dispolw
It a predetermined amOUJ2t in accordance
with AlIaciunent N oC OMB Clr:u.Iar A-no.
[3)lndirect costa related to sOllariea and
wagea inClUt"lld II .elllement expena8"ll in
s~bparagra ph. (1)snd (Z) of this parasraph.
Nonually. such indirect cosU shall be llmiled
~o frin~e beneiiu. occupancy cosL az:d
unmealate supemsion.
I. CJoim6 undersubaworris. Claims u::1der
subawards. including the allocable portion oC
claim. wbich are common to the award. and
to other work oClhe organi:.ation are
generally allowable. ALl appropriate ,hare oC
the organization's indirect expense /Day be
allocated to the amount oC .ettlementa with
subcontractor/suogranteel; provided that the
amount allocated i. otherwise consislent
with the basic guide!i.oes contained in
Attachment A. The indirect expense so
allocated shall exclude th8 S8me and similar
co.ts claimed directly or indirectly aa
settlement expenle..
48. Training and <<iuCQI.,ion C06U-
L COlla oC p~paration aDd mailltenance oC
. program oC instruction including but Dot
Ji.mjted 10 "n.the-job. das.room. and
apprenticeship traioing. designed to increase
the vocational effectivenesa oi empluyecs.
including training /Daterials. lextbook.s.
salaries or wages oC traillee. (excluding
overtime compel1Jlation wh.ich might ansa
therefrom). and (i) salaries oC the director oC
tra.ining IU1d stai! wben the trainillg program
il conducted by the organ.i:atioa: or (ii)
tuition and fees whea the training il in aD
inatitution Dot operated by the orgll1lUalion.
are allowahle.
b. Colla oC part-time education. at an
undergraduate or pollgraduate coilei'llevel.
including that provtded at the organiz.ation'l
own facillaes. are s.Jlowable only when the
cOW"$e or degl'98 pur:sued i. relative 10 the
field in which the eC1llloY8e i. aow working
or may reasonably be expected to work. and
are Ji.mjled to:
(1) Training material&.
(Zl Textbooka.
'(:!) Fees c:harge~ by the ltCiuc:ati~ncU
institution.
(4) Tuition charged by the educational
institution. or ill lieu oC tuil1on. instruC1Dl'S'
ss.Jaries and the related .hare of indirect
cosu oC the ecucatiow institution to the
e:ottent that the sum thereof ia not in excelll oC
thl! tuition which would have ben pajd to the
participating educational institution.
(5) Salaries and related coats of instnu:tors
who are employees QC the orp,niutiua.
(6) Straight.time compensation oC each
employee for time spent aneocl1na clasl"
dwing werking hours oot in excesa of 156
boW"$ per year aDd only to tJ:ie extent that
cirl:ulDlltanc:e:s do not permit the operation of
clanes or allendance at claseea aiter regular
worlcin3 bours: otherwile IUch comp8nution
is unallowable.
~ ~Sla oC tuition. !ees. traini:1g maLerials.
iUld lexlboolc.s (but not sub.istence. aalill')'. or
any other emolum&Dlal in coanect:iou with
fuI1.time education. illcluding thal provided at
the ol'Jani:ation's own 1acilllies. at a
pOltgraduate (but not undefi"lduste) college
level. are aJlcwable only waea the coW"$e or
degree punued is related to the fieJd in wh.ich
the employee il now working. or may
1"eSloaably be expected Lo work. aDd only
wbe~ the cosU receive the prior approval oC
the awarding agency. Such cosu are li.m.ited
to the COlts attributable to a total period not
to excee: on~ school year for each employee
so trained. In unusual cases tha period /Day
be eXlended.
d. Cosu oC attendance oC up to 18 weelu
per employee per year at speciwed
program. sp8cificall)' designed to enhance
the effectiveness oC executives or ma:1.Bgers
or to IX"Cpare employee. for such position.
are allowable. Such coslA ioclude enrollment
I
A-122:1'
fees. training materials. lextbooka and
related chll'geS. employeel' lalaries..
subsisleace. and trlvaL Ca.u allowabla
under !hi. paragraph do not illclude thOM for
C0W'S81 thaL are part of adegree-oriented
cumC'.Jwn. which are allowable only \0 the
extent set forth ill b. and c:. aoove.
e. Maintenance expense. and norms.J
depreciation odair rental. on facilities
owned or Ie Sled by the organi:tation for
training purpo.es are allowebll 10 the extent
set fortb in paragraplu 9. z.:. and 42-
f. C:mtributiona or donations to
educational or training inlltttutionl. iodudlng
li:e donltion oC facilities or otber propp.rtiell,
ant.! scholarships or fellowships. are
unallowable.
g. Training and education co.la in exce.s oj
those otherwise allowable under parBgI"aphs
...b. and c:. oC this paragraph may be allowed
.....ith prior approval of the awarding agency.
To be conlidered for approval. the
organizatioa must demonstrate that sucb
costs are conlistently inCUlT'ld pur.l\lant to an
eSI<lblished training and education prcgnun.
and that the cOW"$e or degree pW"$ued is
relative to the neJd in wh.ich the employee is
now working or may reasoncoly be expected
to work.
49. Transportation costs. Transportation
custs include freight. expreu. cartage. IU1d
postage charges ~Iating either to goods
pun:nased. in proceu. or delivered. These'
coaU are allowable. When such cosls can
readily be identified with the items involved.
they alay be directly charged as
transportalion casu or added to the COlt of
such items (see paragraph Z3). Wbe~
identification with the materials received
cannot readJly be made. transportat1on COStl
may be charged to the appropriate indirect
cost ac::ounll if the orga.c.i.:alion Iollows a
consiSlenL equitable prccedure in this
re5pe-:t.
so. Travel CDSU.
a. Travel coats are the expenses for
transportation. lodging. suo-i.tence. aDd
related items inCUlT'ld by ecployees who are
in Ira vel statui on offids.J businesl 01 the
organization. Trevel co.ta are allowable
subject to paragraphs b. tfu.o~sh e. below.
wh!!" they are ~ectly attributaole to specific
wurk under aD .wani or.are incur.-ed in the
normal coW"$e ol acim.i..tWtration of the
organization.
b. Such c:o.t. may be charged on an actual
buis. on a per diem or mileage basis in lieu
oC actual cosU inC'lln'ed. or on a combination
oC Ihe tWO. prcYided the method used resulta
in charges consistent with lbose normally
allowed by the organ.i:atioa in iu regular
opera lions.
c:. The di.rIe~nce in cest between first-class
air ac::ommodationa and less than linit<!au
air accommodations is unalloweole except
when leu than lirst-clalll ai:
accoao.IUodations L,"= not reuonably
available to meet neceuary mission
requirements. such u where leu than fU"'St.
c1au accommodations would (i) require
circuitous routing. (i1) require t:'avel during
unreuonable houn. (Iii) greatly inc:.~ue the
duration' of tha nigbt. (iv) result ::1 additions.J
costs which would off.et the transt)ortal1oo
sa..;:-:!;". or (v) offer Ilcco=odatio'ns wilic:
. .
..
~
tffice of Management and Budget Circular A-122 (6/27/80)
~mJt reaeonably adequate for the medical
~ of the traveler.
ct:NeaSlary and reaaonabHt .co.ts oC
Lmily movementl and penoN1el movement!
C... ~al or ma.. nature an allowable.
lIl2UiIIIlt to paragnplu 40 and 41. subject to
ll:ocation on thebaaia oCwork or time period
e.-:tiiteci when appropriate. A~vance
~t, are particularly impo:tant.
e-.. IJirect chargea. for fOl'1ligDtravel coat, are
!Iowable only when the travel ha, received
rior approval of the awarding agency. Each
I?ante fOl'1lign trip II1wt be spproved. For
U.~HS oC thia provision. foreign trDvol i.
etiued as sny travel ou~ide of Canada and
~-e, Uniled Stale' and its temlorie, and
oHai6iona. However. for an organi%ation
Jca1ec in foreign countries. the term "foreign
ravd.~ mean, travel oulside that country.
Cltc:l1har.No. A-1ZZ!
~lIaGmea1 C
';~t OrtlUl.izalioQS not Subject to t.hia
:::::mar
~er.a;raca Corporation. El Segundo.
c:.rifomia
~_~e Univenitie, Aasociation. Chicago.
Illinoi,
:".sodaled Universities. Incorporated.
WasiW:lgton. D.C.
~."i1Cialed Univenitie, for Research and
Asuronomy. Tuc,on. .lrui%ona
:"lamie Casualty Commission. Wuhi.agton.
!l..C.
5atteUe Memorial Institute. HeadqulirtentO. in
Ciilim1bua. Ohio
::aakhavel1 National I..aboratory. Upton.
New York
::emer (or Energy a.:d E:lviranmental
Reseucb. lc:::ER). (Univenity oC Puerto
Rico)
:a=aawealth oCPueno Rico. Charles Stark
Draper Laboratory. Incorporated
-"'~bridl;e. Massachusetts. Comparative
Animal Resell.Z'Ch J..aboratol1' (CARL)
["J:trrer3ity of Tennessee). Oa.kridge.
Ter.nes&lle
~::~,iron:nentalLn5titute oC Michigan. An.'1
Areo.... Michigan
!':ar:!orci .:J1viromnental Health Foundation.
Richtand. Washington
i."1' it.search Institute. Chicago. minois
L~tilute ior Deiense An4Iy~is. Arlington.
Vir;inia
lZtihJle of Gat Technology. Chicago. Illinois
Sfidwest Research Lnstitule. Headquanered
in Kansas Cit}.. Missouri
~~~it~ CO:'poration. Bedford. Massecnwsetts
~.:an.tana Energj' Research and Developm=nt
Institute. lne.. (MERDI). Butte. Monlana
:<;..ticnal Radiological Astronomy
Observatorj', Green Bank. West VIl'iinia
o.Jcridge Asaociated Universities. 0a.lcrid8e.
lennessee
~iect Management Corporation. Oakrid;e.
Ter-.::lessee
F.a:1d Corporation. Santa Monica. California
::.aearch Triangle L'1stitute. Re8eart:.~
Triangle Parit. North Carolina
rUversicie Research Institute. New York. New
York
Sandia Corporation. Albuquerque. New
\..t'~,,:,: ........
Southeru Ra.earch wtituta. Birmingham.
Alabama
Southwe.t Research wt1tute. San Antonio.
Texa.
SRI lJ1tematioual. Menlo Puit. Call!ornia
S)'T8cwe Ra.earch CorlJoration. $)'T8CUM.
New York
Universities Research Association.
Incorporsted (National Acceleration J..abl.
Argonne. nUnoi,
Universities Corporation for Atmospheric
Re.earch. Boulder. Colorado
Nonprofit Ln,urance Companies such aa Blue
Cross and Blue Shield Organi:ationa
Other nonprofit organization. as negotiated
with awarding agencie,.
{J1\ 0-. -= nled 7-7_ 1:.. ..1
8IU.IItOO CXlOE 311 _,...
Editorial Corrections to
OMS A.122
OFFICE OF MANAGEMENT AND
BUDGET
Circular A-122, "Cost Principles 'Of'
Nonprofit Of'9anizations"; Correction
AOENCV: Office of Management and
Dudget.
ACTION: Final policy corr~tion.
SUMMARY: This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 4602Z.
July 8. 1980).
FOR FURTHER INFORMAT1OH CONTACT:
Palmcr Marcantonio. Financial
Management Branch. Office of
Management and Budget. Washington.
D.C. 20503. (202)395-4773.
o Page 46022. column 2 the second
Pltrllgraph 1. change Paragraph 5
"Compensation for.Personnel Services"
10 Paragraph 6.
o Par!e 46022. column 2 the ~econd
Paragriph Z. change Paragraph 6
"Contingencies" to Paragraph 7.
o Pace 46022. column 3:
Paragraph 4. change Paragraph 31.
"Equipment and Other Capital
Expenditures" to Paragraph 13.
o Paragraph 5. change Paragraph Z6
"Meetings" to Paragraph 24.
o Paragraph S. change Paragraph 27.
"Organi~ation Costs" to Paragraph'20.
o Paragraph 7. change' Paragraph 30
"Page charges in Professtional Journals"
to Paragraph 28.
o Paragraph 8. change paragraph 37
"Public Information Service Costs" to
Parograph 36.
o Paragraph 9. change Paragraph 43
"Rental Costs" to Paragraph 42.
o Paragraph 9a: in the fourth line. add
"up" between the words "only" and
"10": in the sixth line change "they" to
"i1" .
o Parngraph 10. change Paragraph 51
"T",...."I rnr.'<" In r;"lr;"lr'~!"lh :.n
- - -I
A-122:12
o Page 46024, column J Paragraph
4(n)(2) after "benefits reccived" add ";
or",
o Page 46025. column 1 ParagrAph 83,
changc the reference. "Paragraph Z1 of
Attachment a" 10 "Paragraph 19 of
Attachment D,"
o Page 46026. co(umn 1 Paragraph
4a.iii. in the sixth line. chonge "direct
cost" 10 "direct costs,"
o Page 46026. column 2 Paragraph
E1c. chan!.le "c'stablishment of a rale" to
"cstablishment of a linal ralc,"
. Page 46026. column J Paragraph
E2b. in the Ihird line add the following
After "a Federal agency shall"-"submil
ils inilial indirect cost proposal
immedialelv,"
o Paite 46..127, column J Paragraph
" (3)(a), chanJle "workmen's
compensation" to "workerP'
compensation,"
. Page 46028. column 1 Paragraph
6f3(b). (the second line of column 1)
chunse "Workmen's compensation" to
"workers' compensation,"
o Page 40030. .column J. paragraph
24b" Ihe sixth line. change "allowable"
10 "allowability".
Doniel F. MaDD,
Dudge! and Management Officer,
IFR Doc. n-<<JT3 flied 3-16-81: 0:45 ami
8tWHG COOE 311_'.....
Circular A-122, "Cost Principles for
Nonprofit Organizations"
Correction
In FR Doc. 81-20270. appearing at
poge 46022 in the issue of Tuesday. July
6, 1980. the following changes should be
made:
1. On page 46024. column three. toe
second senlence in paragraph 'A.S.b.
should read. "Specific~ly. the concept
of netting such credit items against~
related expenditures should be applicd
by the organization in determining the
rates or amounts to be charged to
Federal awards Tor services rendered
whcnever the facilities or other
resources used in providing such
scrvices have been financed directly. in
whole or in part. by Federal funds."
2. On page 46024. column three. the
second complete sentence in paragraph
A.S. should read. "This is particularly
true in connection with organizations
that receive a prepondcrance of their
support from Fedcral agencies,"
3. On page 46025. column one.
paragraph B.Z. should read. "z. Any
direct cost of a minor amount mav be
treated as an indirect cost for rca'sons of
prllclicalily where the accounting
lrcntment for such cost is consistently
nl'nli..d In nil final r.o~t nhi('r.tive~."
\ ~
I
Office at Management and Budget Circular A-1 22 (6127/80)
4. On page 46025. column ace.
paragraph DA.f. should read. "f.
Administrlltionof group bcnefits on
behalf of members or clients including
life and hospital insurance. annuity or
retirement plans. financial aid. elc,"
5. On page 46025. column two. the first
scntencc in paragraph D.1.e. should
read. "the base period for the allocation
of indirect costs is tho period in which
such costs are incurred and accvmulated
for allocation 10 work performed in that
period,"
6. On puge 4G02G. column one. lhe
second scntence in paragraph D.3.d
should rend. "The cosls in the common
pool shall then be distribuled to
individual awards included in that
func!!on by usc of a single indirecl cost
rale.
7. On page 46026. column one. the firsl
sentence in puragraph 0.3.e. should
read. ''The distribution based uscd in
computing the indirect cost rale for cach
function may be total direct costs
(excluding capital expemiitures and
other distorting items such as major
subcontracts and subgrants). direct
:;alllries and wa2es.. or other base which
results in an equitable distribution,"
8. On page 46020. column ODe. the first
and second sentences in paragraph
D.4.a. should read. "Some nonprofit
organizations treat all costs as direct
costs except general administration and
-general expenses. These organizations'
generally separate their costs into threc
basic catelZories:' . .."
9. On page 46020. the last sentence in
column one (extending to column two).
in paragraph D.5.should read. ''The
factors may include the physical
location of the work. the level of
administrative suppor~ required. the
nature of the facilities or other resources
employed. Ihe scientific disciplines or
technical skills involved. the
organizational arrangcments used. or
any combination tncreoc."
10. On page 46026. column three.
paragraph E.2.i. should read. "i. To the
extent that problems are encountered
among the Federal agencics in
cOMection with the negotiation and
approval process. the Office of
Managemcnl and Dudget will lend
assistance as required to resolve such
problems in a timely maMer."
11. On page 46030. column one. the
introductory text of paragraph 16.0. and
paragraph lG.b.(l) should read. "b. The
costs of idle facilities are unallowable
except to the exlent that: (1) They are
necessary to meet nuctua tions in
workloads: or".
12. On pase 46030. column one. the
second sentence in pa'ragraph 16.c.
should read. "Such costs are allowable.
provided the capacity is reasonably
antidpated 10 be necessary or WIsS
originally reasonable and is not subject
10 reduction or elimination by subletting.
renting. 9r sale. in accordance with
sound busincss. economics or sccurity
practices,"
13. On page 46031. second column.
paragraph 34.c. should rend. "In addition
to the factors in paragraph b. above.
rctainer fees to be allowable must be
supportcd by e\'idence of bonft fide
services available or rendcrcd,"
BILUHG c:OOE lSOS-OloM
I
A-' 22:13
'\
..
l..UMML,:"lTY DEYELOPME.~T 09:1551
APPENDIX.:L HDR RF-372
~ 1 4-25-88
AOMINISTRA -rVE REQUIREMENTS FOR GRA'ITS AND COOPERATIVE
AGREEMENTS TO TATE, LOCAL AND FEDERALLY RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
(24 CFR 85)
i
. .
. .
-l"
..
")
PART a5-ADMIH'S'TRA T'VE
REOUIREMENTS FOR GRAHTS AND
COOPERA nVE AGREEMENTS TO
STA TE. LOCAL AHD FEDERAL1.. Y
RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
;- .f1.
;:-
.~~
Subp.rt A-General
!Vtc.
85.1 Purpo.e and .cope o( this porI.
85.2 Scope o( subpart.
85.3 Definitions.
85.4 Applicability.
85.5 Effect on other illluanceL
85.6 Additions and Exception..
Subpart &-Pr.-Award Requirements
85.10 Fonna (or applying (or grants.
85.11 State plans.
85.12 SpeCial granl or aubgrant conditiuns
fur "high.risk" grantees.
Subpart C-Poat.Award Requirements
rUJancial Administration
85.20 Standards for financial manallemenl
sYltems.
85.21 PllYa'lent requirements.
85.22 Allowable cosls.
85.23 Period of availability of funds.
8S.2~ Marching or COSI sharing.
8S.ZS Prosram income.
85.26 Non-Federal audits.
Changes. Property. IUld SubQwarda
85.30 Changea under discretionary (project)
awards.
85.31 Real property.
85.32 Equipment.
85.33 Supplies.
85.34 Copyrights.
85.35 Subawards to debarred and
suspended parties.
es.36 PTocuremenl.
85.37 Subgrants.
Reports. Recorda Relection. and EnForcement
8.5.40 Monitoring and reportinll program
perfonnance.
85.41 Financial reportin!!.
85.<;: Retention and access requirements for
records.
05.43 Enforcement.
8.5.44 Termination (or convenience.
Subpart D-Atter.tne-<arant Requirements
85.50 CloReoul.
85.51 Lilter disallowances and lIdjustmpnts.
8s.5:! ColleClion o( amounlS due.
Subpart E-Entltiementa (Reserved]
AUlboril)": Section 7(dl. Department of
!-lousing and Urban Development Act 42
U.S.C.353S{d). '
(53 FR 8068, 8088. Mar. 18, 1988]
Subpart A-General
f as.1 Purpose' ud scope of thia part.
This part estabm-ner unifcmn
administrative rules lar Federal granu
and cooperative ltIf'e'eDIent. and
subaward. to St.te, lOClt! and Indian
tribal governments.
I 85.2 Scope of lubpart.
Tbis subpart contains geDeral rules
pertaining to- Ibirpan and procedures
lor control a{ exceptions (rom thi. part.
f 85.3 DefinitioDS.
As ulled in this part
"ACCI'U'ed expendjnn-e-s'. m~n the
charges inc'lln'ed by the grant~ during a
given period requirin~ the provisron of
funds [or: (1) Good. and other h1ngible
property received: (2)service&
performed by employeel. contractors.
subgrantees. subcontractors. and other
pavees: and r3J other lmJ01lnts becoming
o~ed under programS' far which no
cWTent services or performanc:z: is
required. such as aNlw tie.. insurance
claims. and other benefit paymeDts.
"Accrued income'. means the sum of:
(1 J Eam~ durin!, a giT'en J"Criod from
sen'ices perfcnmed. by the gnntft aDd.
goods and other tangible- property
del",~ed to pun:huers. ud (Z) amounts
becoming owed to the grantee far which
no CurreDl aerviccs Of perlaananc:e i.s
required by the grantee.
"A:c.quisitios:l coal" Q! an iL~ of
purchased equipment means the Det.
invoice unit price of the property
including tbe cost of modifications.
attachmenu. accessories. or a axili ary
apparatus neceuary to make the
property usable for the purpose for
whicb it was acquired. Other charges
such as the COSl of iIlstallation.
transportation. taxes. duty or protective
in-transit insurance. shall be included or
excluded from the unit acquisition cest
in accordance with the grantee's r.egW.a.:
accounting practices.
.. AdministTaove" requiremeflts mean
those matters common to grants in
~eneraL such as financial management.
kinds and frequency of repom. and
. retention of ~ 'I'hese are
distinguished from "programmatic"
requirements. which a:mcenI matte~
that can be treated onJy on a prog:ram-
by-program or granl-by~rant basis. su.ch
as kinds of activities that can be
supported by grants under a particular
program.
Published by Warren, Gorham & Llmont, Inc.
"Awarding agency" mean. (It with
respect to a grant. the Fede:rai arenc:y.
and (2) with respect to a su.bganl. the
party that awarded Uw subsnnl.
"Casb contributions" mean. the
grantee', cub outlay. including the
outlay of money contributed to tbe
iranr~ or ,ubrrantee by ather pablic:
ageDcies aod in.titationL &ad private
organiur:ioa& and lnctiv\Cua!l. Wbm
authorized by-Fecierallesia1a.tioa.
Fedentl funcb received from other
assistance agreements ma,' be
considered aa grantee or IUbgrante-e
cash contribatiana.
"Contract" roeaDS (except as u.sed i.a
the definitioo.a lor "grant" &lid
"subgrant" in this section and ~cepl
where quali.ii.ed by "FedenU"l a
procun:ment CODtract UDder.. grant ot
subgrant. and meana a prtK~ent
subcontract under a contract.
"Coal sharing or matchin.g" meaD&. the
value of the tbird. party in-lcind
contributiocla &lid the portion of the
COSLl of a federally uaiste.d project a:
program DoOt bor:.e by the Federal
Government.
"Cost-type contrad." m&.a.us a c.on.tract
or subco.ntract unw a grant in which
the contra.c1or or subcontractor is paid
on the basis of the. casu it incurs. with.
or without a fee.
"Equipment- meaIU tangible.
nonexpendable. personal property
having a usefulliIe Gf more than one
year and an acquisition cost of s:s..ooo or
more per unit. A grantee may use its
own definition o! equipment provided
that such defl.llition would at least
include all equipment ciefl.%1ed above.
"Expenditure report" means: (1) For
nonconstruction grants. the SF-zeg
"Financial Status Report'. (or other
equivalent report}:' (zt for CO'tt'9'trt1c:tion
grants. the SF-Z71 -Outlay Report and
Re(fU~ far Reimbarsement~ (or othe:-
equivalent report).
"Federall)' rec~ized Indian tribal
8overnment- mel!n~ the governing' body
or If governmental ltgenc:y of any Indian
tribe. band. nation. ar other organized
~up or community (including any
Natiye TiIIagoe u defined in section 3 of
the Alaska Nll'tive Claims Settlement
Act. as Stat 888) certifi~ by the
Secretary of the mtenor aa eligible for
the special P"O!T'ams and servicn
provided by him through the Bureaa ol
Indian Affairs.
"Government" means a State or local
80vemment 0: a federalty recognized
Indian tribal ,l?OVe:-nment.
41
, 09:1552'
"Grant'. meana an awW of fiDaDC:i.l
assistance. including cooperative
agreements. In the form of money. or
property in lieu of money, by the Federal
Government to an eligible grantee. The
tenn does not include technical
assist.nca which provides semce.
instead or mcrney, or other .Slristanca in
the form of rennalP sbllfinl. loam. Ioau
guarantees. interest subsidies.
insuraace. or direct appropriations.
AI.o. the term doe. nol include
asaiataace. .uch .. . fellowship or other
lump sUID_ward. wbic:Ja the l1"antee is
not required to account for.
"Grantee" meana the government La
which e grant i. awarded and which i.
accountable for the use of the funds
provided. The grantee ia the enUre Legal
entity even it only a particular
component of the entity is designated in
the grant award document.
"Loca.lgoverDllUlnt" meana a county.
municipality. city. towa.lownahip.loca.I
pubW:. alUhority (im:hNiina any public
and Indian boUliq agency \Wier the
United States H~ Act of la31}
school district. special di&&ri.c:t. in.lra5lale
district. COUDci1 of aov~
(whalher or not incorporated as a
nonprofit corpontiOA UDder slale law l.
aDY other 1"eI~ or inLeralate-
government entity. or any agency or
instrumentality of a local govemment.
"Obliptioaa" I'De8DS die amounts of
orders phu:ed. contIIICIS uci subgranta
awarded. pde lIIId sGYices received.
and similar tr=oa~cDaaa during a givaa
period tbat Will zeqaire payment by the
grantee d.uriDI Ute same or a f1:ItaM
period.
"OMS" ml!aDll tbe Uaited Slales
Office of MIID88I!meDt ad Budpt.
"Outlays" (expenditures} meaD.
charges made to the project or program.
They may be reported on a cash or
accrual basis. For reports prepared on a
cash basis. outlays are the sum of actual
cash disbursement far direct charges for'
goods md services. the amount of
indirect expense incurred. the value of
in.kind contributions apptied. and the
amount of cash advan~s and payments
made to contractonr aud subgrantees.
For' reportS prepared on aa accrued
expenditure basis. OlJtta~ are thlP sum
of actual cash disbursements. the
amount of indirect eXJMlDM inc:wred. the
value of inkind contributions appliad.
and the new iDA:rease (or decreese) in
the amounta owad by the grantee for
goods and. other property received.. Cor
services performed by employees.
contractors. subgrantees.
subcontractors. and other payees. and
other amoUDta becomq owed under
programa for which no current services
or performance are. required. such as
annuities. insurance claims. and other
benefit ~yments.
..
HOUSING AND DEVELOPMENT REPORTER
. I
"Percentage of compLetioa method" of that authority by .the grantee or
refen toa .Jstem ander wbicb subgrantee. "Termination" doe. Dot
payment. are made far construction include: (1) Withdrawal of fund.
work accordiD& to the ptIII"CeDtage of awarded on the buisof the l1"antee's
completion of the work. rather than &0 underestimate of lbe unobligated
the grantee'. co.t iDcurreci. balance in a prior period: (2)
"Prior approval" meau Withdrawal of the unobligated balance
documentatiaa evidenc:ing consent prior as of the expiration of a grant: (3)
to incmriDg specific coaL Refusal to extend a grant or IIward
"Real property" means land. including additional ~ds. to m,aJte ~ competing
land improvements. structures and or non~ompeting continuation. renewal.
appurtenancn thereto. excluding eX!e~llon. or supplemental aw~ ,or (4)
movable machinery and equipment. VOiding of a grant upon detemunatlon
"Share". when referring to the that the award wu obtaine<<;i ,
awarding agency'. portion of real ~raud,ulently. .or wa~ othetwlse illegal or
property. equipment or supplies. means Invalid from Inception. ..
the same percentage a. the awarding "Terms of a grant or subsrant mean
agency's portion of the acquiring party's all requirements of, the grant or
total costs under the grant to which the subgrant. whether In statute.
acquisition costs under the grant to regulations. or the awan;i document.
which lbe acquisition co.t of the "Third party in-kind contributions"
property wu.<:harged. Only costs are to mean property or services which benefit
be counted-not the value of third-party a federally assisted project or program
in-kind contributions. and which are contributed by non-
"State" means any of the several Federal third parties without charge to
Slates of the United States, the District the grantee. or a cost-type contractor
of Columbia. the Commonwealth of under the grant agreement.
Puerto Rico. any territory or possession "Unliquidated obligations" for reports
of the United States. or any agency or prepared on a cash basis mean the
instnlmentality of a State exclusive of amount of obligations incurred by the
local governments. The term does not grantee that has not been paid. For
include any public and Indian housing reports prepared on an accrued
agency under United States Housing Act expenditlOre basis. they represent the
of 1937. - amount of obligations incurred by the
"Subgrant" means an award of grantee for which an outlay has not
financial assistance in the form of been recorded.
money. or property in lieu of money. "Unobligated balance" means the
made under a grant by a grantee to an portion of the funds authorized by the
eligibl~ su~tee. The term ~cludes Federal agency that has not been
fmanClal assIStance when proVlded by obligatad by the grantee and i.
con~ctuallegal agreement. but does determined by deducting the cumulative
nut Include procurement purchases. nor obligations from the cumulative funds
does it include any form of assistance authorized
which is excluded from the definition of J: 85 4 A Ii'o bilioty
"grant" in this part. '/I . pp ca .
"Subgrantee" means the government
or other legal entity to which a subgrant
is awarded and which is accountable to
the grantee for the use of the funds
provided.
"Supplies" mean. all tangible
personal property other than
"equipment" a. defined in this part.
"Suspension" means depending on the
context. either (1) temporary withdrawal
of the authority to obligate grant funds
pending corrective action by the grantee
or !Jubgrantee or a decision to terminate
the grant. or (2) an action taken by a
suspending official in accordance with
agency regulations implementing E.O.
12549 to immediately exclude a penon
from participating in grant transactions
for a period. pending completion of an
investigation and such legal or
debarment proceedings as may ensue.
"Termi~tion" means pennanent
withdrawal of the authority to obligate
previously-awarded grant funds before
thai authority would otherwise expire. It
also means the voluntary relinquishment
I
Publislled by Warren, Gorham & LamonL Inc.
<a) GeneraL Subparts A-D of this part
apply to all grants and subgrants to
governments, except where inconsistent
with Federal statutes or with regulations
authorized in accordance with the excep-
tion provision of ~ 85.6, or;
(1) Grants and subgrants to State and
local institutions of higher education or
State and local hospitals.
(2) The block grants authorized by the
Omnibus Budget Reconciliation Act of
1981 (Community Services: J;'eventive
Health and Health Services:. Alcohol. '
Drug Abuse. and Mental Health
Services: Maternal and Child Health
Services: Social Services: Low-Income
Home Energy Assistance: States'
Pro~am of Community Development
Block Grants for Small Cities: and
Elementary and Secondary Education
other than programs administered by the
Secretary of Education under Title V.
Subtitle D. Chapter Z. Section 583-the
Secretary's discretionary grant program)
and Titles I-III of the Job Training
42
COMMUNITY DEVELOPMENT
I
}
Partnership Act of 1982 and under the
Public Health Services Act (Section
1921). Alcohol and Drug Abute
Treatment and Rehabilitation Block
Grant and Part C ofntle V. Mental
Health Service for the Homeless Block
Grant).
(3) Entitlement grants to carry out the
following program. of the Social
Securi ty Act:
(I) Aid to Needy Families with
Dependent Children (TItle IV-A of the
Act. not including the Work Incentive
Program (WIN) authorized by section
402(a)19(G); HHS grants for WIN are
subject to this part);
(ii) Child Support Enforcement and
Establishment of Paternity (Title IV-D of
the Act);
(Hi) Foster Care and Adoption
Assistance (Title IV-E of the Act);
(iv) Aid to the Aged. Blind. and
Disabled (Titles L X. XIV. and XVI-
AABD of the Act); and ,
(v) Medical Assistance (Medicaid)
(Title XIX of the Act) not including the
State Medicaid Fraud Control program
authorized by section 1903(a)(6)(B).
(4) Entitlement grants under the
following programs of The National
School Lunch Act:
(i) School Lunch (section 4 of the Act).
(ii) Commodity Assistance (section 6
of the Act).
(iii) Special Meal Assistance (section
11 of the Act).
(iv) Summer Food Service for Children
(section 13 of the Act), and
(v) Child Care Food Program (section
17 of the Act).
(5) Entitlement g;ants under the
following programs of The Child
Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act).
and
(H) School Breakfast (section 4 of the
Act).
(6) Entitlement grants for State
Administrative expenses under The
Food Stamp Act of 1977 (section 16 of
the Act).
(7) A grant for an experimental pilot.
or demonstration project that is also
supported by a grant listed in paragraph
(a)(3) of this section:
(8) Grant fund$ awarded under
subsection 412(e) of the Immigration and
Nationality Act (8 U.S.c. 1522(e)) and
subsection 501.(a) of the Refugee
Education Assistance Act of 1980 (Pub.
L. 96-422. 94 Stat. l809). for cash
assistance. medical assistance. and
supplemental security income benefits
to refugees and entrants and the
administrative costs of providing the
assistance and benefits:
(9)Crants to local education agencies
under 20 U.S.c. 236 through 241-1(a).
<'&
.J
-.
and 242 through 244 (portions of the
Impact Aid program), except for 20
U.s.c. 238(d)(2)(C) and 240(f)
(Entitlement Increase for Handicapped
Children); and
(lCij Pa,........ the VetenlD~
Administration's State' Home Per Diem
Pro"... (3& U.s.c. M1&.U,
(b) Entitlem."t p1'Df1'tltnS. Entit1cm~t
programs en1lDlrfttCd above m
~ 8S.4(aX3)-{8) are subject to Subpart ~
~ 85.5 Effect OR other iSlaaaces.
All other grants administration J'!Ovi.
sions of codified program regulations,
program manuals, handbooks and other
nonreguWory materials which are incon.
sistent with this part are superseded,
except to the extent they are required ,by
statute, or authorized in accordance WIth
the exception provision in ~ 85.6.
~ 85.6 Additions and exceptions.
(a) Forcla.... of 8"ln" and grantees
subject to this part. Federal agencies
may not impoee additional .
administrative requireft....tlll except m
codified regulationa JMlbUshed in tb.
Federal ........
(b) Exceptions Cor clasaes of srant. or
grantees may be aathorized orUy by
OMS. , .
(c) Exceptions on a case-by-case basis
and far sabpatees may be autbarized
by the affected Federal agencies.
~ 8 ~..._ll RS'4~WII'."b,
~ 85.10 Forms for applying for grants.
(a) Scope. (1) This section pnscribes
fonns and instnIctiona to be DSed by
govemmeDlal oJ1&llizations (except
hospitals and instituoOlllJ of higher
education operated by a so"emment) in
applying for grants. This section is not
applicable. howewr. 10 formula grant
programs which do not require
applicants to apply for hands on a
project basis.
(2) This sectioD applies cmly to
applications to Federal agencies for,
gran... aDd is not required to be applied
by grantees ill dealins with appOcaDta
for subsnmas. However. paIItee. lU"C
encouraged to avoid nuue det~ or
burdensome applicatioD requirements
for sabsran'" .
(b) AlUhorizad forms and instructiOllB
for govemmenUll OI'JGnizDtiGll$. (1) In
applyiDl for grants. ~~ts shall only
use standard appW:atiaQ farms or tboee
prescribed by the gnmtiag agency with
the approval of OMS lDIder the
Paperwork Reduction Act of 1980.
(2) Applicants are not required to
submit more thal'l the original and two
copies oE preappHcatioos ot'
applications.
P\lblished by Warren, Gorham & Lamont, Inc.
I
09:1553
HDR RF-372
4-25-88
(3) App!ic:aDta ......t follow all
applicable iaamactiona that bear OMB
clearance numben. Federal qeDCies
may specif]' aDd deecribe-the programs.
functions. or activities that will be used
to plan. bud&et. and evaluate the work
under II pant. Other mpp1emeDtllrY
instructiou may be is_d only wiab the
approval of OMS to the exlmt required
u.adeI' U. Paperwork ReOucUOIl Act of
198Q. Fo.. any .t:aDdard form. except the
SF-424 facesbeet. Peder.l a88JlGe1 108'
shade out or inatruc:l the applicaDt to
disregard any line item that is DOl
needed. . _
(4) When a grantee applies rOC'
additional fundinslaudl.a a
continuation or ...pp1emental award} or
amenda a pnwioualy aubmittad.
a ppl.ic:atioD. only the afi~~ted page& .
need be submitted. PreVlOualy &ubmllted
pages with information that is still
current need ACt be resubmitted.
~ 85.11 State plans.
(a) Scope. The statutes Cor some
programs require States to submit plans
before receiving grants. Under
regulations implementing Exectltive
Order 1237%. '"Intergovernmental Review'
of Federal Programs." States are
allowed ta simplify. consolidate and
substitute pians. This section contains
additional provisions for plans that are
subject to regulations implementing the
Executive Order.
(b) Retruj~llIt1"a. A State need meet
only Federal adminimativC' or
prosrammatic requiremeats for a plarr
that lIJ"e in statute. or codified
regulations. .'
(c) Assurances. In each plan the State
will include an assurance that the State
shall comply with aU applicable Fedet'al
statutes and regulations in effect with
respect to the periods for which it
receives grant funding. For tbis
assurance and other assurances
required in the plan. the State may:
(1) Cite by rmmber tbe statutory at'
regulatory provisions requiring ~
assuran~ lJnd atrum that it gives the
assurances required by those provisions.
(2) Repeat the assurance language io
the statutes or r'e'gUlations. or
(3} ~Jop its own lansuasl!' 10 the
extent permitted by law.
(d) Amendments. A State will amend
a plan wheneoYer n~sary to reflect: (1)
New or revised Federal statules or
regulatiorn or (2} a malerial change in
any State lew. organization. policy. or
State agency operation. The State win
obtain approval for the amendment and
its effectiYe date but need submit for
approval only the amended portiona of
the plan.
43
09:1554. I
~ 85.12 Special gnat or ......t
c:oaditiOlll for '"higb-risk" pouteeL
(alA grantee or s~Mtee alaJ be
considered "bigh risk" if aD awarding
agency determines that a grantee or
subgrantee:.
(1) Hu a hialory o.C unaatillactory
performaoc:e. 01'
(2) Is not finaoQally ..able. or
(3) Haa. aum.......t .,atem which
does not meettMlItIIDIII....t
standards ftt forth ill tbis put. 01'
(4) Haa nol canfonned to __ 8Dd
condidon. of prwvioas ...nt.. or
t5J Is otherwise not rf!'Sponsible: and if
the awarding agency determines that an
award will be made. ~.l conditions
and/or restrictions shall....uripond to
the high risk condition and sbeD be
included in the award.
(b) Special COnditiOUlf or restrictions
'may inc:tude:-
(1} Payment on a reimbursement
basis;
(Z) Withholding authority to proceed
to the next phase until receipt of
evidence of acceptable performance
within a given funding period:
(31 Requiring additional. more detailed
financial reports:
(4) Additicma1 proiect mcmitoriag:
(5) Requiring the paDta or subgrantee
to obtain tec:imical or maDagament
assiatance: or .
(6} EatahliAh.,ns additioDal prior
approvalL
(c) If aa awarding....q decides to
impose sw:b: conditioaa. the awarding
official will notify the gruteeor
subputee 811 early ..pOSlliiUe. in
writing. of:
(1J Tbe nature of the special
conditions/ restrictions:
(2) The reasonts) for imposing them:
(3) ~ con-ective actions which mUlt
be taken before they will be removed
and the time allowed for completing the
corrective actionlf and
(4) The method of reqnesting
rec:onsideration of the conditionsl
restrictions imposed.
Subp8rt c-Post-A...." Requirements
Finaadal. AdJoWoi&b:atiGa
~ 85.20 Standards for finaacia1
IIIlUI8gemeut systems.
(al A State lDust expand and account
for grant funds in. accordance with State
laws and procedures for ex.pending and
accounting for its own funds. raw
control and accounting procedures of
the State. as well as its subgrantees and
cost-type CGlltrac1ars. must be suIf1cient
to-
ll} Permit preparation of reports
required by this part and the statutes
authorizing the grant., and
HOUSING AND DE1LOPMEl'l1 REPORTER
(2) Permit \be tIac:iDg of fuads to a electronic tnn8fer of funds methods. the
level of expeomtures adequate lo grantee IDU.t make drawdOWM BIt close
establish that IKh fuDd. have not been as poI.ible to the time of making
used in violatiOll 0( the rastrictioaa aNi disbursements. Grant..:es must monitor
probibitiolla of &pplM::ab1e s.atutes. cash drawdowns by their subgrantees to
assure that they conform substantially
to the salDe stBndards o! timIng and
amount as apply to advances to the
grantees.
(c) An awarding agency may review
the adequacy of the financial
management system of any applicant for
financial aaaistance as part of a
preaward review or at any time
subsequent to award.
~ 85.21 Pa)'IDeDt.
(a) Scope. This section prescribes the
basic standard and the methods under
which a Federal agency will make
paymenta to grantees. and grantees will
make payments to subgrantees and ,
contractors.
(b) Basic standard. Methods and
procedures for payment shall minimize
the time elapsing between the transfer
of funds and disbursement by the
grantee or subgrantee. in accordance
with Treasury regulation. at 31 CFR Part
205.
(c) Advances. Grantees and
subgrantees shall be paid in advance.
provided they maintain or demonstrate
the willingness and ability to maintain
procedure. to' minimize the time
elapsing between the transfer o! the
funds and their disbursement by the
grantee or subgrantee.
(d) Rsimbursement. Reimbursement
sball be the preferred method when the
requirements in paragraph (c) oC this
section are Dot met. Grantees and
subgraatees may also be paid by
reimbursement for any construction
grant. Except as otherwise specified in
regulation. Pederal agendes shall not
use the percentage of completion
method to pay construction grants. The
grantee or sabgrantee may-use that
method to pay its construction
contractor, and if it does. the awarding
agency's payments to the grantee or
subgrantee will be based on the
grantee's or subgrantee'" actual rate of
disbursement
(e) Working capital advances. If a
grantee cannot meet the criteria for
advance payments described in
paragraph (c) of this section. and the
Federal agency has detennined that
reimbursement is not feasible because.
the grantee lacks sufficient worki:tg
capital. the' awarding agency may
provide cash or a working capital
advance basis. Under this procedure the
awarding agency shall advance cash to
the grantee to cover its estimated
disbursement needs for an initial period
generally geared to the grantee's
disbursing cycle. Tbereafter. the
awarding agency shall reimburse the
grantee for its actual cash
(b) The financial management systems
of other grantees and subgrantees must
meet the following standards:
(1) Financial t'ftporting. Accurate.
current. and complete disclosure o! the
financial results of fiDancially assisted
activities must be mad. in accordance
with the financial reporting
requirements of the grant or subgrant
(2) Accounting records. Grantees and
subgrantees MUS' maintain records.
which adequately identify the source
and applicatiOD of funds provided for
financiaUy....isted activities. These
records lDust amtain imonnation
pertaining to grant or 8ubgrant awards
and authorizations. obligations.
unobligated balances. uuts.liabilities.
outlays or expenditures. and income.
(3) internal crmtroJ. Effective control
and accountability muat be maiDtained
for all grant and subgrant cash. real and
personal property. and other aueLL
Grantees and subgrantees must
adequately safeguard all such property
and mustaaa1U'e that it is used solely for
authorized purpoaes.
(4) Budget cOIJwl. Actual
expenditures or outlays mUlt be
compared with budaeted amounta for
each grant or aubgrant FiDandal
information must be related to
performance or productivi~ data.
including the development of unit. cost
information wbenever appropriate or
specifically required in the graDt or
subgrant agreement If unit cost data are
required. estimates based on available
documentation will be accepted
whenever poaaible.
(5) Allowable cosL Applicable OMS
cost principies. agency PJ'O&l'BID
regulations, and the terms of grant and
subgrant agreements will be foDowed in
determining the reasonableness.
allowability. and allocability of costs.
(6J SOUI'Cll documentation. Accounting
records must be supported by such
source documentation as canceDed
checks. paid billa. payroDa. time and
attendance records. contract and
subgrant award ~ocuments. etc.
(7) Cash manasarenL Proc:edures for
minimizing the time elapsing between
the transfer of fandlr from th., Us.
Treasury and disbarsement by grantees
and subgraotees must be followed
whenever advance P'6.1......nt procedures
are used. Grantees must establish
reasonable procedures to ensure the
receipt of reports on sub!rantees' cash
balances and cash disbursements in
sufficient time to enable them to prepare
complete and accurate cash transactions
reports to the awarding agency. When
advance. are made by lener-o!-credit or
Published by Warren. Gorham & Lamont. tnc.
44
COMMUNITY DEVELOPMENT
I
\
,
disbursements. The working capital
advance method of payment shall not be
used by grantees or subgrantees if the
reason for using such method is the
unwillingness or inability of the gADtee
to provide timely advance~e
subgrantee to meet the subgrantee's
actual cash disbursements.
(f) Effect of program income. refunds.
and audit recoveries on paymenL (1)
Grantees and subgrantees shall disburse
repayments to and iDterest eamed on .
revolving fund before requesting
additional cash payments for the same
activity.
(2) Except a. provided in paragraph
(f)(1) of thit section. grantees and
subgrantees shall disburse program
income. rebates. refunds. contract
settlements. audit reocoveries and
interest eamed on such funds before
requesting additional cash payments.
(g) Withholding payments. (1) Unless
otherwise required by Federal statute.
awarding agencies shall not withhold
paymenta for proper charges inCWTed by
grantees or subgrantees unlesa-
(i] The SJ'8ntee or subgrantee bas
f~iled to comply with grant award
conditions or
(ii) The grantee or subgrantee is
indebted to. the United States.
(2) Cash withhc:ld for failure to comply .
witb grant award condition. but without
suspension of the graat, shall be released
to the grantee upon subsequent compli-
ance. When a grant is s~ed. payment
adjustments will be made in accordance
with ~ 85.43(c).
(3) A Federal agency shall not make
payment to grantees for amounts that
are withheld by grantees or subgrantees
from payment to contractors to assure
sa tisfactory completion of work.
Payment. shan be made by the Federal
agency when the grantees or
subgrantees actually disburse the
withheld fuuda to the contractors or to
escrow acccnmta eetabHshed to assure
sa tisfltCtOl'y completion of work.
(h) Cash depositon'es. (1) Consistent
with the natioDaJ roal of expanding thl!
opportunities for minority business
enterprises. grantees and subgrantees
are encouraged to use minority banks (a
bank which is oWD~d at least 50 percent
by minority group members). A list of
minority owned blU1ks can be obtained
from the Minority Business Development
Agency. Department of Commerce.
Washington. DC 20230.
(2) A grantee or subgrantee shall
maintain a separate bank account only
when required by Federal-State
agreement.
(i) Interest earned on advances.
Except for interest earned on advances
of funds exempt under the
f
.:~
'i:
'..
:-r1
-
Intergovemmental Cooperation Act (31
V.S.C. 6501 et seq.) and the Indian Self-
Determination Act (23 V.S.C. 450).
grantees and subgrantees shall
promptly. but at least quarterly. remit
interest earned on advances to the
Federal agency. The grantee or
subgrantee may keep interest amounts
up to $100 per year for administrative
expenses.
t 85.%2 Allowable ~
(a) Limitation on use offunds. Grant
funds may be used only for:
(1) The allowable costs of the
grantees. sul:i8rantees and cost-type
contractors. including allowable costs in
the form of payments to fIXed. price
contractors; and
(2) Reasonable fees or profit to cost-
type contractors but not any fee or profit
(or other increment above allowable
costs) to the grantee or subgrantee.
(b) Applicable cost principles. For
each kind o( organization. there is a set
of Federal principles for determining
allowable costs. Allowable costa will be
determined in accordance with the cost
pri~ciples applicable to the organization
iQcurring the costs. The following chart
lists the kinds of organizations and the
applicable cost principles.
For !he CDSIS of _ 'Use !he principles in-
Slate. Ioc8I 01 tndiM OMS Circular A~7.
.... ~<<nmvlIL
Pnvace nonprofiI OBM CIrcuI8r A-l22.
organiZallOn Oltler INn
lift I') IftatIluIicln Of
higher educallon. (2)
hospital, 01 (3)
organiZallOn named in
OM8 CIrcular A-122
as not subject to that
C1teular.
Educalional inatilutionl-.l OMS Cin:ular "-21.
For-1lI'01i1 orglllliDbon . CFR Part 31.
otner man a IlOspqI Conlr8ct Co51
and an organizallOn F>rincipIes and
named in OSM Proc:edlns. or uniIorm
CirCUlar A-l22 as I'lOf cost IICCOUIIlIng
SUOject to that c:ircuIlIr. Sland8rdS thai comply
WIlft cost I)nIlC:ICIIes
ICl:8PlabIe to Ihe
FedenII agency.
t 85.%3 Period of aftiJabillty of fuads.
(a) General. Where a funding period ia
specified. a grantee may charge to the
award only costa resulting from
obligations of the funding period unless
carryover of unobligated balances is
permitted. in which case the carryover
balances may.be charged for costs
resulting from obligations of the
subsequent funding period.
(b) Liquidation of obligations. A
grantee must liquidate all obligations
incurred under the award not later than
PubIisned by Warren, GcJr:nam & Lamont, Inc.
,
09:1555
HDR RF -372
4-25-88
90 days after the end of the funding
period (or as specified in a program
regulation) to coincide with the
submission of the aMual Financial
Status Report (SF-269). The Federal
agency may extend this deadline at the
request o( the grantee.
t 85.24 M-t..hi..g or cost sbariag.
(a) Basic rule: Costs and contributions
acceptable. With the qualifications and
exceptions listed in paragraph (b) of this
section. a matching or cost sharing
requirement may be satisfied by either
or both o( the follOwing:
(1) Allowable costs incurred by the
. grantee. subgrantee or a cost-type
contractor under the assistance
agreement. This includes allowable
costs borne by non-Federal grants or by
others cash donations from non-Federal
third parties.
(2) The value of third party in.kind
contributions applicable to the period to
which the cost sharing or matching
requirementa applies.
(b) Qualifications and exceptions-{l)
Costs borne by other Federal grant
agreements. Except as provided by
Federal statute. a cost sharing or .
matching requirement may not be met
by costs borne by' another Federal grant.
This probibition does not apply to
income eamed by a grantee or
subgrantee from a contract awarded
under another Federal grant.
(2) General revenue sharing. For the
purpose o( this section. general revenue
sharing funds distributed under 31
U.S.C. 6702 are not considered Federal
grant funds.
(3) Cost or contributions counted
toward$ other Federal cOI:t$-I:haring
requirements. Neither costs nor the
values of third party in-kind
contributions may count towards
satisfying a cost sharing or matching
requirement of a grant agreement if they
have been or will be counted towards
satisfying a cost sharing or matching
requirement of another Federal grant
agreement. a Federal procurement
contract. or any other award of Federal
funds.
(4) Costs financed by program income.
Costs fmanced by program income, as
defined in t 85.25, shall not count towards
satisfying a cost sharing or matching
requiremetn unless they are expressly per-
mitted in the terms of the assistance
agreement. (This use o( general program
income is described in ~ 85.25(g).)
(5) Services or property financed by
income earned by contractors_
Contractors under a grant may earn
income from the activities cameli out
under-the contract in addition to the
amounts earned from the party
awarding the contract. No costs of
services or property supported by this
45
09:1556
income may COU1t tQward satisfying a
cost sl1armg or matching requirement
unless other provisions of the grant
agreement expressly permit this kind of
income to be used to meet the
requirement.
(6) &cords. Costs and third party in-
kind contributions counting towards
satisfying a cost sharing or matching
requirement must be verifiable from the
records of grantees and subgrantee or
cost-type contractors. These records
must show how the value placed on
third party in-kind contributions wu
derived. To the extent feasible.
volunteer services will be supported by
the same methods that the organization
uses to support the allocability of
regular personnel costs.
(7) Special standards for third party
In-kind contributions. (I) Third party in-
kind contributions count towards
satisfying a cost sharing or matching
requirement only where. if the party
receiving the contributions were to pay
for them. the payments would be
allowable costs.
(ii) Some third party in-kind
contributions are goods and services
that. if the grantee. subgrantee. or
contractor receiving the contribution
had to pay for them. the payme'1ts
would have been an indirect costs.
Costs sharing or matching credit for
such contributions shall be given only if
the gr'antee. subgrantee. or contractor
has established. along with its regular
indirect cost rate. a special rate for
allocating to individUAl project. or
programs the value of the contributions.
(Hi) A third party in-kind contribution
to a fixed-price contract may count
towards satisfying a cost sharing or
matching requirement only if it results
in:
(A) An increase in the services or
property provided under the contract
(without additional cost to the grantee
or subgrantee) or
(B) A cost savings to the grantee or
subgrantee. . .
(iv) The values placed on third party
in-kind contributions for cost sharing or
matching purposes will conform to the
M1les in the succeeding sections of this
part. II a third party in-kind contribution
is a type not treated in those sections.
the value placed upon it shall be fair
and reasonable.
(c) Valuation of donated services-{l)
Volunteer services. Unpaid services
provided to a grantee or subgrantee by
individuals.will be valued at rates
consistent with those ordinarily paid for
similar work in the grantee's or
subgrantee's organization. II the grantee
or subgrantee does not have employees
J
HOUSING AND DEiLOPMENT REPORTER
performing similar work. the rates will
be consistent with those ordinarily paid
by other employers for similar work in
the same labor market. In either cas&'. a
reasonable amount for fringe benefits
may be included in the valuation.
(2) Employees of other olBanizations.
When an employer other than a grantee.
subgrantee. or cost-type contractor
furnishes free of charge the services of
an employee in the employee's normal
line of work. the services will be valued
at the employee's regular rate of pay
exclusive of the employee's fringe
benefits and overhead costs. II the
services are in a different line of work.
paragraph (c)(11 of this section applies.
(d) Valuation of third party donated
supplies and loaned equipment or space.
(1) If 8 third party donates supplies. the
contribution will be valued at the
market value of the supplies at the time
of donation.
(21 Ifa third party donates the use of
'equipment or space in a building but
retains title. the contribution will be
valued at the fair rental rate of the
equipment or space.
(e) Valuation of third party donated
equipment. bUl1dings. and land. If a third
party donates equipment. buildings. or
land, and title passes to a grantee or
subgrantee. the treatment of the donated
property will depend upon the purpose
of the grant or subgrant. as follows:
(1) A words for copital expenditures. II
the.purpose of the grant or subgrant is to
assist the grantee or subgrantee in the
acquisition of property. the marleet value
of that property at the time of donation
may be counted as cost sharing or
matching.
(2) Other awards. If assisting in the
acquisition of property is not the
purpose of the grant or subgrant.
paragraphs (e)(2) (1) and (il) of this
section apply:
(i) If approvaJ is obtained from the
awarding agency. the market value at
the time or donation of the donated
equipment or buildings and the fair
rental rate or the donated land may be
counted as cosl sharing or matching. In
~'le case of a llubgrant. the terms of the
grant agreem..nt may require that the
approval be obtained from the Federal
agency as well as the grantee. In all
cases. the approval may be given only.u
a purchase of the equipment or rental qf
the land would be approved as an
allowable direct cost. II any part of the
donated property was acquired with
Federal funds. only the non-federal
share of the property may be counted as
cost-sharing or IIUltcbing.
(if) If approval is not obtained under
paragraph (eX2)(i) of this section, no
amount may be counted for donated land,
Published by Warren. Gortlam'& Lamont, Inc.
and only depreciation or use allo~ances
may be counted for ~. eqwpment
and buildings. The depreciation or use
allowances for this property are not treat.
ed as third party in-kind contributions.
Instead. they are treated as costs incurred
by the grantee or subgrantee. They are
computed and allocated (usually as indi-
rect costs) in accordance with the cost
principles specified in f 85.22, in the same
way as depreciation or use all~ances for
purchased equipment and buildings. The
amount of depreciation or use ~o~Cl?I
for donated equipment and buildings IS
based on the property's market value at
the time it was donated..
(0 Valuation of grantee or subgrantee
donated /'fIal praperty for constructionl
acquisition. II a grantee or subgrantee
donates real property for a construction
or facilitilts acquisition project. the
current market value of that property
may be counted as cost sharing or
matching. If any part of the donated
property was acquired with Federal
funds. only the non.federal share of the
property may' be counted as cost sharing
or matching.
(g) Appraisal of real property. In some
cases under paragraphs (dl, (e) and (0 of
this section. it will be necessary to
establish the market value of land or a
building or the fair rental rate of land or
of space in a building, In these cases. the
Federal agency may require the market
vaJue or fair rental value be set by an
independent appraiser. and that the
value or rate be certified by the grantee.
This requirement will also be imposed
by the grantee on subgrantee!J.
f 85.25 Program income.
(a) General. Grantees are encouraged
to earn income to defray program costs.
Program income includes income from
ft'8s for services perfonned. from the use
or rentaJ of real or personal property
acquired with grant funds. from the sale
of commodities or itema fabricated
under a grant agreement. and from
payments of principal and interest on
loans made with grant funds. Except as
otherwise provided in regulations of the
Federal agency. program income does
not include interest on grant funds.
rebates. credits. discounts. refunds. ete.
and interest earned on any of them.
(bl Definition of program income.
Program income means graas income
received by the grantee or subgrantee
directly generated by a grant supported
activity. or earned only 8S a result of the
grant agreement during the grant period.
"During the grant period" is the time
between the effective date of the award
and the ending date of the aWlU'd
reflected in the final financial report.
46
l,;UMMUNITY D~VJ:U..Ut"M.C.NT
;
3-
\1;
:~
~
(c) Cost olgenerating progra~J ..
income. If authorized by Federal
regulatioM or the grant agreement. roOsts
incident to the generation of program
income may be deducted from gross
income to determine program income.
(d) Govemmentalrevenues. Taxes,
special assessments. levies. fmes, and
other such revenues raised by a grantee
or subgrantee are not program income
unless the revenues are specifically
identified in the grant agreement or
Federal agency regulationa as program
income.
(e) Royaities. Income froai royalties and
. license fees for copyrighted material, pat-
ents, and inventions developed by a grant-
ee or subgrantee is program income only if
the revenues are specifically identified in
the grant agreement or Federal agency
regulations as program income. (See
~ 85.34.)
rn Property. Proceeds from the sale of
real property or equipment will be han.
dled In accordance with the requirements
of ~~ 85.31 and 85.32.
(g) Use of pragram income. Program
income shall be deducted from outlays
which may be both Federal and non.
Federal as described below. unless the
Federal agency regulations or the grant
agreement specify another alternative
(or a combination of Ule alternatives). In
speCifying alternatives. the Federal
agency may distinguish between income
earned by the grantee and income
. earned by iiubsrantees and between the
. sources, kinds, or amounts of income.
When Federal agencies authorize the
alternatives in paragraphs (g) (2) and (3)
of this section. program income in
excess of any lim1' stipulated shall also
be deducted from'Qutlays.
(1) Deduction. Ordinarily program
income shall be deducted from total
allowable costs to determine the net
allowable costs. Program income shall
be used for current costs unless the
Federal agency authorizes otherwise.
Program income which the grantee did
not anticipate at the time of the award
shall be used to reduce the Federal
agency and grantee contributions rather
than to increase the funds committed to
the project.
(2) Addition. When authorized.
program income may be added to the
funds committed to the grant agreement
by the Federal agency and the grantee.
The program income shall be used for
the purposes and under the conditions of
the grant agreement.
(3) Cost sharing or matching. When
authorized. program income may be
used to meet the cost sharing or
matching requirement of the grant
agreement. The amount of the Federal
grant award remains the same.
(h) lncolltll after the award period. I
There are no Federal requirements
governing the disposition of program
income earned after the end of the
award period (i.e" until the ending date
of the final financial report. Sett
paragraph (a) of tlml8dion). unle.. the
terms of the agreement or the Federal
agency rvgulations provide otherwis~:
i 85.26 Noa-Federal audiL
(a) Basic Rulli. Grantees and
subgrant... are respcmaible for
obtaining auditp..iD accordance with the
Single Audit Act of 1984 (31 U.s.e. 7501-
. 7) and Federal agency implementing
. regulations. The audits shall be made by
an independent auditor in accordance
with generally accepted government
auditing standards covering financial
and compliance audita.-
(b) Subgrant8es. State or IOClI
governments. as those tenns are defined
for purposes of the Single Audit Act.
that receive Federal financial assistance
and provide $25.000 or more of it in a
fiscal year to a subgrantee shall:
(1) Determine whether State or local
subgrantees have met the audit
requirements of the Act and whether
subgrantees covered by OMB Circular
A-nO. "Uniform Requirements for
Grants and Other Agreements with
Institutions of Higher Education.
Hospitals and Other Nonprofit
Organizations" have met the audit
requirement. Commercial contractors
(private forprofit and private and
governmental organizations) providing
goods and services to State and local
governments are not required to have a
single audit performed. State and local
govenments should use their own
procedures to ensure that the contractor
has complied with laws and regulations
affecting the expenditure of Federal
funds: .
(2) Determine whether the subgrantee
spent Federal assistance funds provided
in accordance with applicable laws and
regulations. This may be accomplished
by reviewing an audit of the subgrantee
made in accordance with the Act.
Circular A-nO.'or through other means
(e.g_ program reviews) if the subgrantee
has not had such an audit
(3) Ensure that appropriate corrective
action is taken within six month. after
receipt of the audit report in instance of
noncompliance with Federal laws and
regulations:
(4) Consider whether subgrantee
audils necessitate adjustment of the
grantee's own records: and
(5) Require each 8ubgrantee to permit
independent auditors to have access to
the records and financial statements.
Published by Warren. GortIam & Lamont.. Inc.
lr.:t:.lOO"l
HDRRF-372-
4-25-88
(c) Auditor selection.. ID arraiiging. for
audit services, ~ 85.36 shall be fonowed.
Chang~ Froperty, ~ SubawlU'da
~ 85.30 Cwaps.
(a) General. Grantees and subgrantees
are permitted to rebudget within the
approved direct cost budget to meet
unanticipated requirements and may
make limited program changes to the
approved project. However. unless
. waived by the awardiDg agency. certain
types of post-award changes in budgetB
and projects shall require the prior
written approval of the awarding
agency.
(b) RehztiDn to co.st principl~' The appli-
cable cost principles (see ~ 85.22) contain
requirements for prior approval of certain
types of costs. Except where waived, those
requirements apply to all grants and sub-
grants even if paragraphs (c) through (0 of
this section do nOL
(e) Budget changes. (1)
Nonconstruction projects. Except as
stated in other regulations or an award
document. grantees or subgrantees shall
obtain the prior approval of the
awarding agency whenever any of the
following changes is anticipated under a
nonconstruction award:
(i) Any revision which would result in
the need for additional funding.
(H) Unless waived by the awarding
agency. cumulative transfers among
direct cost categories. or. if applicable.
among separately budgeted programs.
projects. functions. or activities which
exceed or are expected to exceed ten
percent of the current total approved .
budgeL whenever the awarding agency's
share exceeds $100.000..
(Hi) Transfer of funds allotted for
training allowances (i.e" from direct
payments to trainees to other expense
categories).
(2) Construction prajects. Grantees
and subgrantees shall obtain prior
written approval for any budget revision
which would result in the need for
additional funds.
(3) Combined construction and
nonconstruction prajects. When a grant
or subgrant provides funding for both
construction and non construction
activities. the grantee or subsrantee
must obtain prior written approval from
the awarding agency before making any
fund or budget transfer from
nonconstruction to construction or vice
versa.
(d) Programmatic changes. Grantees
or subgrantees must obtain the prior
approval of the awarding agency
whenever any of the following actions is
anticipated:
47
09:1558
(1) Any revision of the scope or
objectives 01 the project (regardless of
whether there is an associ a ted budget
revisian requiring prior approval).
(2) Need to extend the period of
availability of funds.
(3) Changes in key persons in cases
where specified in an application or a
grant award. In research pn)jects. a
change in the project director or
principal investigator shall always
require approval unless waived by the
awarding agency.
(4) t!nder nonconstt:=tion projects.
contractmg out, subgrantmg (if authorized
by law> or otherwise obtaining the services
of a third party to perform activities which
are central to the pu,ooposes of the award.
This approval requirement is in addition
to the approval requirements of ~ 85.36
but does not apply to the procurement of
equipment, supplies, and general support
servtces.
(e) Additional prior approval
requiremenu. The awarding agency may
not require prior approval for any
budget revision which is not described
in paragraph (c) of this section.
(f) Requesting prior approval. (1) A
req~~st for, prior approval of any budget
reVISIon Will be in the same budget
formal the grantee used in its
. application and shall be accompanied
by a narrative justification for the
proposed revision. "
(2) A :equest tor a prior approval under
the applicable Federal cost principles (see
~ 85.22) may be made by letter.
(3) A request by a $ubgrantee for prior
ilpproval will be addressed in writing to
the grantee. The grantee will promDtly
review such request and shall approve
or disapprove the request in writing. A
grantee will not approve any budget or
project revision which is inconsistent
wi tb the purpose or terms and
conditions of the Federal grant to the
grantee. If the revision. requested by the
$ubgrantee would result in a change to
the grantee's approved project whir:h
requires Federal prior approval. tl,e
grantee will obtain the Federal i1:;lency's
approval before approving the
subgrantee's request.
~ 85.31 Real property.
(a) Title. Subject to the obligations
and conditions set forth in this section.
title to real property acquired under a
g:-ant or subgrant will vest upon
acquisition in the grantee or sUb~rlln!ee
respectivelv.
. (bj Use. Except as otherwise provided
:::y Federal statutes. real j:lroperty will Dp.
used for ttte originally authorized
purposes as long as needed for thllt
purposes. and the grantee or subgrantee
shall not dispose of or encumber its title
or other interests.
I
HOUSING AND DEVELOPMENT REPORTER
. I
(c) Dis~ition. When real property il
no longer needed for the originally
authorized purpose. the grantee or
subgrantee will reque.t di.poaition
instruction. from the awarding agency.
The instructiona will provide for one of
the followiq aItematives:
(1) Retsntion of title. Retain title after
compen.ating the awarding agency. The
amount paid to the awarding agency
will be computed by applying the
awarding -seney's percentage of
participation in the cost o{ the original
purchase to the fair market value of the
property. However. in those lituationa
where a grantee or subgrantee 11
disposing of real property acquired with
grant fundi and acquiring replacement
real property under the same program.
the net proceedl from the disp08ition
may be uled as an offset to the cost of
the replacement property.
(2) Sale of property. Sell tbe property
and compensate the awarding agency.
The amount due to the awarding agency
will be calculated by applying the
awarding agenCy's percentage of
participation in the cost of the original
purchase to the proceeds of the sale
after deduction of any actual and
reasonable selling and fixing-up
expenses. If the grant is still active, the
net proceeds from sale may be offset
against the original cost of the property.
When a grantee or subgrantee is
directed to sell property. sales
procedures sball be followed that
provide for competition to the extent
practicable and result in the highest
possible return.
(3) Transfer of title. Transfer title to
the awarding agency or to a third-party
designatedl approved by the awarding
agency. The grantee or subgrantee shall
be paid an amount calculated by
applying the grantee or subgrantee's
percentage of participation in the
purchase of the real property to the
current fair market value of the
property.
~ 85.32 Equipment.
(a) Title. Subject to the obligations
and conditiona set forth in this section.
title to equipment acquired under a
grant or subgrant will vest upon
acquisition in the grantee or subgrantee
respectively.
(b) State,. A State will use. manage.
and diapoee of equipment acquired
under a grant by the State in accordance
with State laws and procedures. Other
grantees and subgrantees will follow
pa~pha(c)Uuoush(e)oft1Us
section.
(e) Use. (1) Equipment shall be used
by the grantee or subgrantee in the
program or project for which it was
Published by Warren. Gorham & Lamont. Inc.
acquired as long as needed. whether or
not the project or program continues to
be supported by Federal funds. When no
longer needed for the original program
or project. the equipment may be used in
other activities currently or previously
supported by a Federal agency.
(2) The grantee or lubgrantee shall
also make equipment available for use
on other projects or ProSfBIDI currently
or previously supported by the Federal
GovemmenL providing such use will not
interfere with the work on tbe projects .
or program for which it was originally
acquired. Firat preference for other use
shall be given to other programs or .
projects supported by the awarding
agency. User fees should be considered
if appropriate.
(3) Notwithstanding the encouragement
in ~ 85.25(a) to earn program income. the'
grantee or subgrantee must not use equip-
ment acquired with grant funds to provide
services for a fee to compete unfairly with
private companies that provide equivalent
services. unless specifically permitted or
contemplated by Federal statute.
r4) When acquiring replacement
equipment. the grantee or sub grantee
may use the equipment to be replaced as
a trade-in or sell the property and use
the proceeds to offset the cost of the
replacement property. subject to the
approval of the awarding agency.
(d) Management requirements.
Procedures for managing equipment
(including replacement equipment).
whether acquired in whole or in part
with grant fundi. until disposition takes
place will. as a minimum. meet the
following requirements:
(1) Property records must be
maintained that include a description of
the property. a serial number or other
identification number. the source of
property. who holds title. the acquisition
date. and cost of the property.
percentage of Federal participation in
the cost of the property. the location. use
and condition of the property. and any
ultimate disposition data including the
date of disposal and sale price of the
property.
(2) A physical inventory of the
property must be taken and the results
reconciled with the property records at
least once every two years.
(3) A control system must be
developed to ensure adequate
safeguards to prevent loss. damage. or
theft of the property. Any 108s. damage.
or theft shall be investi~ated.
(4) Adequate maintenance procedures
must be developed to keep the property
in good condition.
(5) [f the grantee or subgrantee is
authorized or required to sell the
property. proper sales procedures must
48
COMMUNITY DEVELOPMENT
I
\
\
!
be establiahed to ensure the highest
possible return.
(e) Disposition. When on,inal or
replacement equipment acquired under
a grant or subgrant is no longer needed
for the original project or program or fOI
other activities currently or previously
supported by a Federal agency.
disposition of the equipment will be
made as follows:
(I) Item. of equipment with a current
per-unit rair market value of lese than
$5.000 may be retained. .old or
otherwise di.po.ed of with no further
obligation to the awarding agency.
(2) Item. of equipment with a current
per unit fair market value in exceSl of
$5.000 may be retained or sold and the
awarding agency shall have a right to an
amount calculated by multiplying the
current market value or proceeds from
sale by the awarding agency's share of
the equipment.
(3) In cases where a grantee or
8ubgrantee fails to take appropriate
disposition actions. the awarding agency
may direct the grantee or subgrantee to
take exces. and disposition actions.
(f) Federal equipment. In the event a
grantee or lubgrantee is provided
federally-owned equipment:
(1) Title will remain vested in the
F!!deral Government.
(2)' Grantees or 8ubgrantees will
manage the equipment in accordance
with Federal agency nUes and
procedures. and submit an annual
inventory listing.
(3) When the equipment is no longer
needed. the grL'1tee or subgrantee will
request disposition instructions from the
Federal agency.
(g) Right to transfer title. The Federal
awarding agency may reserve the right
to transfer title to the Federal
Government or a third part named -by
the awarding agency when such a third
party is otherwise eligible under existing
statutes. Such transfers shall be subject
to the following standards:
(1) The property shall be identified in
the grant or otherwise made known to
the grantee in writing.
(2) The Federal awarding agency shall
issue disposition instruction within 120
calendar days after the end of the Federal
support of the project for which it was
acquired. If the Federal awarding agency
fails to issue disposition instructions with.
in the 120 calendar-day period the grantee
shall follow 8S.32(e).
(3) When title to equipment is
transfen-ed. the grantee shall be paid an
amount calculated by applying the
percentage of participation in the
purchase to the current fair market
value of the property.
}
-
~ 15.33 Supplies.
(a) Title. ntle to lupplie. acquired
under a grant or nbgnnt wilJ vest. upon
acquisition. in the grantee or subgrantee
respectively.
(bl Di6position. If there is a residual
inventory of unuaed .upplie. exceedins
$5.000 in total aggregate fair marieet
value upon termination or completion of
the award. and if the supplies are not
needed for any other federally
sponsored prosram. or projects, the
grantee or subsrantee shall compensate
the awardins agency for its share.
I 85.34 Cop)'rilhtL
The Federal aWllrding agency
reserves 8 royalty-free. nonexclusive.
and irrevocable license to reproduce.
publisb or otherwise use. and to
authorize others to use. for Federal
Government purpol8S:
(a) The copyright in any work
developed under a grant. subgrant. or
contract under a grant or subgrant and
(b) Any rightl of copyright to which a
grantee. subgrantee or a contractor
purchases ownership with grant support.
~ 85.35 Subawards ~ debarred and
suspenclecl parties.
Grantees and subgrantees must not
make any award or permit any award
(subgrant or contract) at any tier to any
'. party which is debarred or suspen~~d or
is otherwise excluded from or meligible-
for participation in Federal assistance
programs under Executiv~ Or:!er 12549.
"Debarment and SuspensIon.
I 85.36 Proc:arement
(a) States. When procuring propertr
and services under a grant. a State w1l1
follow the same policiell and procedures
it uses for procurements from ita non.
Federal funds. The State will ensure that
every purchase order or other contract
includes any clauses required by
Federal statutes and executive orders
and their implementing regulation~.
Other grantees and subgrantees ~lll .
follow paragraphs (b) through (i) 10 this
section.
(bl Procurement standards. (1)
Grantees and subgrantees will use their
own procurement procedures which
reflect applicable State and local laws
and regulations. pro\;ded that tile
procurements conform to applicable
FedeMlllaw and the standards identified
in this section.
(2) Grantees and su~~tees .will
maintain a contract admmlstratlon
system which ensures th~t c~ntractors
perform in accordan~e W1!h tne te~s.
conditions. and speCIfications of their
Published by Warren. Gorham & Lamont, Inc.
I
09:1559
HDR RF -372
4-25-88
contracts or purchase orders.
(3) Grantees and subgrant..s will
maintain a written code of .tandarda of
conduct governing the performance of
their employ..s engaged in the award
and administration of contrac1l. No
employee. officer or age~~ of ~ grantee
or.ubgrantee shall partlClpate 10
selection. or in the award or
admiDiatration of a contract supported
by Federal fUDda if a conflict of interest,
real or apparent. would be involved.
Such a conflict w!)uld arl.e when:
(i) Tbe employee. officer or agent.
(H) Any member of hi. immediate
family.
(ili) His or her partner. or
(iv) An organization which employs.
or is about to employ. any of the above.
has a f10ancial or other interest in the
firm selected for award. The grantee's or
subgrantee's officers. employees or
agents will neither solicit nor accept
gratuities. favors or anything of
monetary value from contractors,
potential contractors. or parties to
subagre9ments. Grantee and
subgrantees may set minimum rules
where the financial interest is not
substantial or the gift is an unsolicited
item of nominal intrinsic value. To the
extent permitted by State or local law or
regulations. such standards or conduct
will provide for penalties. sanctions. or
other disciplinary actions for violations
of such standards by the grantee's and
subgrantee's officers. employees. or
agents. or by contractors o~ their age~ts.
Tha awarding agency may 10 regulation
provide additional prohibitions relative
to real. apparent. or potential con.t1icts
of interest.
(4) Grantee and sub grantee
procedures will provide for a review of .
proposed procurements to avoid
purchase of unnecessary or duplicative
items. Consideration should be given to
consolidating or breaking out
procurements to obtain a more
economical purchase. Where
appropriate. an analysis will be made of
lease versus purchase alternatives. and
any other appropriate analysis to
determine the most economical
approach.
(5) To foster greater economy and
efficiency. grantees and subgrantees are
encouraged to enter into State and local
intergovernmental agreements for
procurement or use of common goods
and services.
(6) Grantees and subgrantees are
encouraged to use Federal excess and
surplus property in lieu of purchasing
new eQuipment and property whenever
such lne is feasible and reduces project
costs.
49
09:1560
(7) Grantees and ,ubgrantees are
encouraged to Il8e vahle engineering
clauses in contracta for colll'trUction
project. of sufficient size to offer
reasonable opportunitiel for COR
reductions. Value engineering is a
systematic and creative anaylsis of each
contract item or ta.k to ensure that its
essential function i. provided at the
overall lower coat.
(8) Grant... and subgrant... wiD
make awarda only to responl!ible
contractors po..enina the ability to
perform sua:esefully under the terms
and condition. of a proposed
procuremenL CouideratioD will be
given. to such matten as contractor
intepity, compliance with public policy.
record of past performance. and
rmancial and teclmical resources.
(9) Grantees and subgrantee. will
maintain records sufficient to detail the
significant histol'7 of a procuremenL
These records wiD inc1udlt. but are not
necessarily limited to the following:
rationale for the method of procurement.
selection of contract type. contractor
selection or rejection, and the basis for
the contract price.
(10) Grantees and substantees will
use time and material type contracts
only-
(i) Alter a determination that no other
contract is suitable, and
(ii) If the contract includes a ceiling
price that the contractor exceeds at its
own risk.
(11) Grantee. and subgrantees alone
will be responsible. in accordance with
good administrative practice and sound
business judgment. for the settlement of
aU contractual and administrative issues
arising out of procurements. These
issues include. but are not limited to
source evaluation. protests. disputes.
and claim.. These standards do not
relieve the grantee or subgrantee of any
contractual responsibilities under its
contracts. Federal agencies will not
substitute their judgment for that of the
grantee or subgrantee unless the matter
is primarily a Federal concern.
Violations of law will be referred to the
local. State. or Federal authority having
proper jurisdiction.
(12) Grantees and subgrantees will
have protest procedures to handle and
resolve disputes relating to their
procurements and shall in aU instances
disclose informa tion regarding the
protest to the awarding agency. A
protestor must exhaust all
administrative remedies with the
grantee and subgrantee before punuing
a protest with the Federal agency.
Reviews of protests by the Federal
agency will be limited to:
(i) Violations of Federal law or
regulations and the standards of this
section (Violations of State or local law
HOUSING AND DEVELOPMENT REPORTER
I will be under the jurisdiction of State or
local authorities) and
(ii) Violations of the grantee's or
subgrantee's protest procedures for
failure to review a complaint or protesL
Protests received by the Federal agency
other than' those specified above will be
referred to the grantee or subgrantee.
(c) CompetitioIL (1) All procurement
transactions will be conducted in a DWI-
ner providing full and open competition
cousistent with t)le standards ~ 8S.36.
Some of the situations coasidered to be
restrictive o( competition iDc:1ude but are
not limited to:
(i) Placin8 unreasonable requi~ments
un firms in order for t..'Jem to qualify to
do business.
(ii) ReqUiring wmecessary experience
and excessive boDding.
(iii) Noncompetitive pricing practices
between firms or between affiliated
companies.
(iv) Noncompetitive awards to
consultants that are on retainer
contracts.
(v) Organizational conflicts of
interest.
(vi) Specifying only a "brand name"
product instead of allowing "an equal"
product to be offered and deScribing the
perfonnance of other relevant
requirements of the procurement. and
(vii) Any arbitrary action in the
procurement process.
(2) Grantees and subgrantees will
conduct procurements in a manner that
prohibits the use of ..~torily or
administratively imposed in-State or
local geographical preferences in the
evaluation of bids or proposaJa. except
in those cases where applicable Federal
statuteli t!xpressiy mandate or
encourage geographic preference.
Nothing in this section preempts State
licensing laws. When contracting for
architectural and engineering (AlE]
services. geographic location may be a
selection criteria provided its
application leaves 8B appropriate
number of qualified fi.nBa. given the
nature and size of the pl'Oject. to
compete for the coattact.
(3) Grantees willl1ave written
selection procedures for procurement
transactions. These procedures will
ensure that all solicitatiooa:
(iJ Incorporate a clear and accurate
description of the technical
requirements for the material. product.
or service to be procured. Such
description shall not. in competitive
procurements. contain features which
unduly restrict competition. The
description may include a statement of
the qualitative nature of the material.
product or service to be procured. and
when necessary. shall set forth those
minimum essential characteristics and
standards to which it must conform if it
is to satisfy its intended use. Detailed
Published by Warren, Gorham & Lamont, Inc.
prolct apecifJC8tions should be
avo1t:c if at all poaaible. When it is
impractical or uneconomical to make a
clear and accurate description of the
technical requirements. a "brand name
or equal" description may be used al a
means to define the performance or
other salient requiremenu of a
procurement. The specific features of the
named brand which mu.st be met by
offerol'l shall be clearly stated: and
(ii) Identify all reqWrementa which the
ufferors nuwt fulfill and all other factora
to be used in evaluatina bids or
proposals.
(4) Grantee. and subgrantees will
ensure that all prequalified lists of
penon.. firms. or products whi~ are
used in acquiring goods and servIces are
current and include enough qualified
sources to ensure maximum open and
free competition. Also. grantees and
subsrantees will Dot preclude potential
bidders from qualifying during the
solicitation period.
(d) Methods of procurement to be
foJJowed. {1) Procurement by small
ourchose procadures. Small purchase
procedures are those relatively simple
and informal procurement methods for
securing services. supplies. or otlser
property that do DOt cost More than
$25.000 in the aggregate. If small
purchase procurements are used. price
or rate quotation. will be obtained from
aD adequate Dumber of qualified
sources.
(2) Procurement by sealed bids (formal
advertising). Bids ate publicly solicited
and a firm-flXcd-price contract Oump sum
or unit price) is awarded to the re5pODSlble
bidder whose bid, conforming with all the
material terms and conditions of the invi-
tation for bids, is the lowest in price. The
sealed bid method is the preferred method
for procuring constnJction, if the condi-
tions in ~ 8S.36(d)(2)(i) apply.
(i) In order for sealed bidding to be
feasible. the' following conditions should
be present:
(A) A complete. adequate. and
realistic specification or purchase
description i.s available:
(B) Two or more responsible bidders
are willing and able to compete
effectively for the business: and
(C) The procurement lends itself to a
fima fixed price contract and the
selection of the auccessiul bidder can be
made principally on the basis of price.
(ii) If sealed bids are used. the
following requirements apply:
(A) The invitation for bids will be
publicly advertised and bids shall be
solicited from an adequate number of
known suppliers. providing them
sufficient time prior to the date set for
opening the bids:
(B) The invitation for bids. which will
include any specifications and pertinent
50
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I
COMMUNITY DEVELOIMENT
attachments. shall define the items or
services in order for the bidder to
properly respoDd:
IC} All bids will be publicly opened at
the time and place prescribed in the
invitation for bids:
{D) A firm fixed-price contract award
will be made in writing to the lowest
responsive and re.ponsible bi1:ider.
Where Ipecified in bidding documents.
factors sach al discounts. transportation
cost. and life cycle costs shall be
considered in de1enrrining which bid il
lowest. Paymeut diaCOUZlts will onJy be
used to determine the.low bid when
prior experience indicates that such
discounts are usually taken advantage
of: and
(E) Any or an bids may be rejected if
there is a soand documented reason.
{31 Procurement by competitiYe
pl'Oposals. The technique of competitiYe
proposals is normally conducted with
more than one source submitting an
offer. and either a fixed;nioe or oost-
reimbunement type contract is
awarded. It is generally used when
conditions are not appropriati! for the
use of sealed bids. If this method is
ured. the following requirements apply:
(i) Requests for proposals will be
publicized and identify all evaluation
factors and their relati-.e importance.
Any response to pubfidzed requests for
proposals shall be honored to the
maximum extent practical:
(ii) Proposals will be solicited from ~n
adequate number of qualified sources:
(Hi) Grantees and subgrantees will
have a method for conducting technical
evaluations of the pfoposais received
and for selecting awardees:
(iv) Awards will be madt! to the
responsible firm whose proposal is most
advantageous to tbe program. with price
and other factors considered: and
(v) Grantees and subgraatees may use
competitive proposal procedures for
qualifications-based procurement of
architectural I engineering (AlE)
professional semces whereby
competitors' qualifications are
evaluated and the most qualified
competitor is selected. subject to
negotiation of fair and reasonable
compensation. The method. where price
is not used as a selection factor. can
only be used in procurement or A!E
professional services. It cannot be used
to purchase other types of services
though AlE firms are a potential source
to perform the proposed effort.
(4) Procurement by noncompetitive
proposals is procurement through
solicitation of a proposal from only one
source. or after solicitation of a number
of sources. competition is determined
inadequate.
Ii) Procurement by noncompetitive
)
,
~
1"
~~. ..
proposals may be used only when the
award of a contract is infeasible under
small purchase procedures. sealed bids
or competith18 proposals and one of the
following circumstances applies:
(A) The item is available onJy from 8
single source:
(B) The public exigency or emergency
for the requirement will not permit a
delay resulting from competitive
solicitation.
(C) The awardini agency authorizes
noncompetitive proposals: or
(D) After solicitation of a number of
sources. competition is detennined
inadequate.
(ii) Cost analysi~ i.e~ verifying the
proposed cost data. the projections of
the data. and the evaluation of the
specific elements of costs and profit. is
required.
(Hi) Grantees and subgrantees may be
required to submit the proposed
procurement to the awarding agency for
pre-award review in accordance with
paragraph (g) of this section.
(e) Contracting with small and
minority finns, women's business
enterprise and labor surplus area firms.
(1) The grantee and subgrantee will take
all nece," 1ry affmnative steps to assure
that minority firms. women's business
enterprises, and labor surplus area firms
are used when possible. '.
(2) Affirmative steps shall include:
(i) Placing qualified small and
minority businesses and women's
business enterprises on solicitation lists:
(ii) Assuring that small and minority
businesses. and women's business
enterprises are solicited whenever they
are potential sources:
(Hi) Dividing total requirements. when
economically feasible. into smaller tasks
or quantities to permit maximum
participation by small and minority
business. and women's business
enterprises:
(iv) Establishing delivery schedules.
where the requirement permits. which
encourage participation by small and
minority business. and women's
business enterprises:
(v) Using the services and assistance
of the.Small Business Administration.
and the Minority Business Development
Agency of the Department of Commerce:
and '
(vi) Requiring the prime contractor. if
subcontracts are to be let. to take the
affirmative steps listed in paragraphs
(e)(2) (i) through (v) of this section.
(f) Contract cost and price. (1)
Grantees and subgrantees must perform
a cost or price analysis in connection
with every procurement action including
contract modifications. The method and
degree of analysis is dependent on the
facts surrounding the particular
procurement situation. but as a starting
Published by Warren. Gorham & Lamon\, Inc.
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09:1561
HDR RF -372
4-25-88
point. grantees must make independent
estimates before receiving bids or
proposals. A cost analysis must be
performed when the offeror is required
to submit the elements of his estimated
cost. e.g.. under professional. consulting.
and architectural engineering services
contracts. A cost analysis will be
necessary when adequate price
competition is lacking, and for sole
source procurements. including contract
modifications or change orders. unless
price resonablenesa can be established
on the basis of a catalog or market price
of a commercial product sold in
substantial quantities to the general
public or based on prices set by law or
regulation. A price analysis will be used
in all other instances to determine the
reasonableness of the proposed contract
Drice.
. (2) Grantees and subgrantees will
negotiate profit as a separate element of
the price for each contract in which
there is no price competition and in all
cases where cost analysis is performed.
To establish a fair and reasonable profit.
consideration will be given to the
complexity of the work to be performed.
the risk borne by the contractor. the
contractor's investment. the amount of
subcontracting. the quality of its record
of past performance. and industry profit
rates in the surrounding geographical
area for similar work.
(3) Costs or prices based on estimated
costs for contracts imder grants will be
allowable only to the extent that costs
incurred or cost estimates included in
negotiated prices are consistent with Fed-
eral cost principles (see ~ 85.22). Grantees.
may reference their own cost principles
that comply with the applicable Federal
cost principles.
(4) The cost plus a percentage of cost
and percentage of construction cost
methods of contracting shall not be
used.
(g) Awarding agency review, (1)
Grantees and subgrantees must make
available. upon request of the awarding
agency. technical specifications on
proposed procurements where the
awarding agency believes such review
is needed to ensure that the item andlor
service specified is the one being
proposed for purchase. This review
generally will take place prior to tlu!
time the specification is incorporated
into a solicitation document. However. if
the grantee or subgrantee desires .to
have the review accomplished after a
soli cation has been developed. the
awarding agency may still review the
specifications. with such review usually
limited to the technical aspects of the
proposed purchase. .
(2) Grantees and subgrantees must on
request make available for awarding
agency pre-award review [ delete .....]
51
09:1562
procurement documents. such as
requests for proposals or invitations for
bids. independent cost estimates. etc..
when:
(i) A grantee's or subgrantee's
procurement procedures or operation
fails to comply with the procurement
standards in this seciton: or
(ii) The procurement is expected to
exceed 525.000 and is to be awarded
without competition or only one bid or
offe..r is received in response to a
solicitation: or
(iii) The procurement. which is
. expected to exceed 525.000. specifies a
"brand name" product: or
(iv) The proposed award over 525.000
is to be awarded to other than the
apparent low bidder under a sealed bid
procurement: or
(v) A proposed contract modification
changes the scope of a contract or
increases the contract amount by more
than 525.000.
(3) A grantee or subgrantee will be
exempt from the pre-award review in
paragraph (g}(2) of this section if the
awarding agency determines that its
procurement systems comply with the
standards of this section.
(i) A grantee or subgrantee may
.request that its procurement system be
reviewed by the awarding agency to
determine whether its system meets
these standards in order for its svstem
to be certified. Generally. these reviews
shall occur where there is a continuous
high-doUar funding. and third-party
contracts are awarded on a regular
basis: .
(ii) A grantee or subgrantee may self-
certify its ps:ocurement system. Such
self-certification shall not limit the
awarding agency's right to survey the
system. Under a. self-certification
procedure. awarding agencies may wish
to rely on written assurances from the
grantee or subgrantee that it is
complying with these standards. A
grantee or subgrantee will cite specific
procedures. regulations, standards. etc..
as being in compliance with these
requirements and have its system
available for review.
(1) Bonding requirements. For
construction or facility improvement
contracts or subconstracts exceeding
$100.000. the awarding agency may
accept the bonding policy and
requirements of the grantee or
subgrantee provided the awarding
agency has made a determination that
t~e awardIng agency's interest is
adequately protected. If such a
determination has not been made. the
minimum requirements shall be as
follows:
(1) A bid guarantee from each bidder
.equivalent La five percent of the bid
price. The "bid guarantee" shaU consist
of 3 firm commitment such as a bid
I HOUSING AND
-. bond. certified check, or other
n!'gotiable instrument accompanying a
bid as assurance that the bidder will.
upon acceptance of his bid. execute
such contractual documents as may be
rp.quired within the time specified.
(2J A performance bond on the part o{
the contractor for 100 percent of the
contract price. A "performance bond" is
one executed in connection with a
contract to secure fulfillment of aU the
contractor's obligations under such
contract.
(3) A payment bond on the part of the
contractor for 100 percent of the
conll'act price. A "payment bond" is one
executed in connection with a contract
to assure payment as required by law of
aU persons supplying labor and material
in the execution of the work provided
for in the contract.
(i) Contract pravisions. A grantee's
and subgrantee's contracts must contain
provisions in paragraph (i) of this
Section. Federal agencies are permitted
to require changes. remedies. changed
conditions. access and records
retention. suspension of work. and other
clauses approved by the Office of
Procurement Policy.
(1) Administrative. contractual. or
legal remedies in instances where
contractors violate or breach contract
term~. and provide for such sanctions
and penalties as may be appropriate.
(Contracts other than small purchases)
(2) Termination for cause and for
convenience by the grantee or
subgrantee including the manner by
which it will be effected and the basis
Cor settlemenL (All contracts in excess
of $10.000)
(3) Compliance with Executive Order
11246 of September 24. 1965 entitled
"Equal Employment Opportunity." as
amended by Executive Order 11375 of
October 13. 1967 and as supplemented in
Department of Labor regulations (41
CFR Part 60). (All construction contracts
awarded in excess of $10.000 by
grantees and their contractors or
sublitJ'llntees)
(4) Compliance with the Copeland
"Anti-Kickback" Act (18 U.S.e. 874) as
supplemented in Department of Labor
regulations (29 CFR Part 3). (All
contracts and subgrants for construction
or repair)
(5) Compliance with the Davis-Bacon
Act (40 U.S.e. 276& to a-7) as
supplemented by Department of Labor
regulations (29 CFR Part 5).
(Construction contracts in excess of
52.000 awarded by grantees and
subgrantees when required by Federal
grant program legislation)
(6) Compliance with Sections 103 and
107 of the Contract Work Hours and
Safety Standards Act (40 V.S.C. 327-330)
as supplemented by Department of
Labor regulations (29 CFR Part 5).
Published by Warren. Gorham & Lamont. Inc.
DEV~OPMENT REPORTER\
(Conlruction contracts awarded by \
grantees and 8ubgrantees in excess of
52.000. and in excess of 52.500 for other
contracts which involve the employment
of mechanics or laborers)
(7) Notice of awarding agency
requirementg and regulations pertaining
to reporting.
(8) Notice of awarding agency
requirements and regulations pertaining
to patent rights with respect to any
discovery or invention which arises or is
developed in the course of or under 8uch
contract.
(9) Awarding agency requirements
and regulations pertaining to copyrights
and rights in data.
(10) Access by the grantee. the
8ubgrantee. the Federal grantor agency,
the Comptroller General of the United
States. or any of their duly authorized
representatives to any books.
documents. papers. and records of the
contractor which are directly pertinent
to that specific contract for the purpose
of making audiL examination. excerpts.
and transcriptions. .
(11) Retention of all required records
for three years after grantees or
subgrantees make final payment~ and
all other pending matters are closed.
(12) Compliance with all applicable
standards. orders. or requirements
issued under section 306 of the Clear Air
Act (42 U.S.C. 1857(h)). section 506 of the
Clean Water Act (33 U.S.C. 1368).
Executive Order 11738. and
Environmental Protection Agency
regulations (40 CFR Part 15). (Contracts.
subcontracts. and subgrants of amounts
in excess of 5100.000)
(13) Mandatory standards and policies
relating to energy efficiency which are
contained in the state energy
conservation plan issued ill compliance
with the Energy Policy and
Conservation Act (Pub. 1.. 94-163).
~ 85.37 Subgrants.
fa) States. States shall follow state
law and procedures when awarding and
administering subgrants (whether on a
cost reimbursement or fixed amount
basis) of financial assistance to local
and lDdian tribal governments. States
shall:
(1) Ensure that every subgrant
includes any clauses required by
Federal statute and executive orders
and their implementing regulations:
(2) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statute and regulation:
(3) Ensure that a provision for compli-
ance with Section 85.42 is placed in every
cost reimbursement subJmU1t: and
(4) Conform any advances of grant
funds to subgrantees substantially to the
same standards of timing and amount
that apply to cash advances by Federal
agencies.
57
COMMUNITY DEVELOP1NT
~
"5
4~-
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(b) All other grantees. All other grantees
shall follow the provisions of this part
which are applicable to awarding agencies
when awarding and administering sub-
grants (whether on a cost reimbursement
or fixed amount basis) of financial assis-
tance to local and Indian tribal govern-
ments. .Grantees shall:
(1) Ensure that every subgrant includes
a provision for compliance with this part;
(2) Ensure that every subgrant includes
any clauses required by Federal statute
and executive orders and their imple-
menting regulations; and
(3) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statutes and regulations.
(c) Exceptions. By their own terms,
certain provisions of this part do not
apply to the award and administration of
sub grants:
(1) Section 85.10;
(2) Section 85.11;
(3.) The letter-of-credit procedures spec-
ified in Treasury Regulations at 31 CFR
Part 205, cited in ~ 85.21; and
(4) Section 85.50.
Reports, Records, Retention, and
Enforcement
~ 85.40 Monitoring and reporting
program performance.
/ (a) Monitoring by grantees. Grantees
are responsible for managing the dav-to-
day operations of grant and subgrant
~ported activities. Grantees must mon-
itor grant and subgrant supported activi-
ties to assure compliance with applicable
Federal requirements and that perfor-
mance goals are being achieved. Grantee
monitoring must cover each program,
function or activity.
(b) Nonconstruction perforr/1/lnce re-
ports. The Federal agency may, if it
decides that performance information
available from subsequent applications
contains sufficient information to meet
its programmatic needs, require the
grantee to submit a performance report
only upon expiration or termination of
grant support. Unless waived by the Fed-
eral agency this report will be due on the
same date as the final Financial Status
Report. .
(1 ) Grantees shall submit annual per-
formance reports unless the awarding
agency requires quarterly or semiannual
reports. However,performance reports
will not be required more frequently than
quarterly. Annual reports shall be due 90
day~ after the grant year, quarterly or
semi-annual reports shall be due 30 days
after the reporting period. The final per-
formance report will be due 90 days after
the expiration or termination of grant
support. If a justified request is submitted
..
by a grantee, the Federal agency may
extend the due date for any performance
report. Additionally, requirements for un-
necessary performance reports may be
waived by the Federal agency.
(2) Performance reports will contain,
for each grant, brief information on the
following:
(i) A comparison of actual accomplish-
ments to the objectives established for the
period. Where the output of the project
can be quantified, a computation of the
cost per unit of output may be required if
that information will be useful.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(iii) Additional peninent information
including. when appropriate, analysis and
explanation of cost overruns or high unit
costs.
(3) Grantees will not be required to
submit more than the original and two
copies of performance reports.
(4) Grantees will adhere to the stan-
dards in this section in prescribing perfor-
mance reporting requirements for sub-
grantees.
(c) Constrtlction performance reports.
For the most part, on-site technical in-
spections and certified percentage-of
completion data are relied on heavily by
Federal agencies to monitor progress un-
der construction grants and subgrants.
The Federal agency will require addition-
al formal performance reports only when
considered necessary, and never more
frequently than quarterly.
(d) Significant developments. Events
may occur between the scheduled perfor-
mance reponing dates which have signifi-
cant impact upon the grant or subgrant
supported activity. In such cases, the
grantee must inform the Federal agency
as soon as the following types of condi-
tions become known:
(1) Problems, delays, or adverse condi-
tions which will materially impair the
ability to meet the objective of the award.
This disclosure must include a statement
of the action taken, or contemplated, and
any assistance needed to resolve the situa-
tion.
(2) Favorable developments which en-
able meeting time schedules and objec-
tives sooner or at less cost than antici-
pated or producing more beneficial re-
sults than originally planned.
(e) Federal agencies may make site
visits as warranted by program needs.
(f) Waivers. extensions. (I) Federal
agencies may waive any performance
report required by this part if not needed.
(2) The grantee may waive any perfor-
mance report from a subgrantee when not
needed. The grantee may extend the due
date for any performance report from a
subgrantee if the grantee will still be able
Published by Warren, Gomam & Lamont. Inc.
I
09: 1563
HDR RF-417
1-15-90
to meet its performance reponing obliga-
tions to the Federal agency.
~ 85.41 Financial reporting.
(a) General. (I) Except as provided in
paragraphs (aX2) and (5) of this section,
grantees will use only the forms specified
in paragraphs (a) through (e) of this
section, and such supplementary or other
forms as may from time to time be
authorized by OMB, for:
(i) Submitting financial reports to Fed-
eral agencies. or
(ii) Requesting advances or reimburse-
ments when letters of credit are not used.
(2) Grantees need not apply the forms
prescribed in this section in dealing with
their subgrantees. However, grantees shall
not impose more burdensome require-
ments on subgrantees.
(3) Grantees shall follow an applicable
standard and supplemental Federal agen-
cy instructions approved by OMB to the
extend required under the Paperwork
Reduction Act of 1980 for use in connec-
tion with forms specified in paragraphs'
(b) through (e) of this section. Federal
agencies may issue substantive supple-
mentary instructions only with the ap-
proval of OMB. Federal agencies may
shade out or instruct the grantee to disre-
gard any line item that the Federal agency
finds unnecessary for its decisionmaking
purposes. . .
( 4) Grantees will not be required to
submit more than the original and two
copies of forms required under this pan.
(S) Federal agencies may provide com-
puter outputs to grantees to expedite or'
contribute to the accuracy of reporting.
Federal agencies may accept the required
information from grantees in machine
usable format or computer printouts in-
stead of prescribed forms.
(6) Federal agencies may waive any
report required by this section if not
needed.
(7) Federal agencies may extend the
due date of any financial report upon
receiving a justified request from a grant-
ee.
(b) Financial Status Report-(l) Form.
Grantees will use Standard Form 269 or
269A, Financial Status Report, to report
the status of funds for all nonconstrUction
grants and for construction grants when
required in accordance with
~ 85.4 I (eX2Xiii) of this section.
(2) Accounting basis. Each grantee will
report program outlays and program in-
come on a cash or accrual basis as pre-
scribed by the awarding agency. If the
Federal agency requires accrual informa-
tion and the grantee's accounting records
are not normally kept on the accrual
basis, the grantee shall not be required to
convert its accounting system but shan
15
09: 1564
develop such accrual information through
and analysis of the documentation on
hand.
(3) FrequenC}'. The Federal agency may
prescribe the frequency of the report for
each project or program. However, the
report will not be required more frequent-
ly than quarterly. If the Federal agency
does not specify the frequency of the
report, it will be submitted annuallv. A
final report will be required upon expira-
tion or termination of grant support.
(4) Due date. When reports are re-
quired on a quarterly or semiannual ba-
sis, they will be due 30 days after the
reporting period. When required on an
annual basis, they will be due 90 days
after the grant year. Final repons will be
due 90 days after the expiration or termi-
nation of grant support.
(c) Federal Cash Transactions Report-
(I) Form. (i) For grants paid by letter or
credit, Treasury check advances or elec-
tronic transfer of funds, the grantee will
submit the Standard Form 272, Federal
Cash Transactions Report, and when nec-
essary, its continuation sheet. Standard
Form 2728. unless the terms tlf the award
exempt the grantee from this require-
ment.
(ii) These reports will be used by the
Federal agency to monitor cash advanced
to grantees and to obtain disbursement or
outlay information for each grant from
grantees. The format of the report may be
adapted as appropriate when reporting is
to be accomplished with the assistance of
automatic data processing equipmenL
provided that the information to be sub-
mitted is not changed in substance.
(2) Forecasts of Federal cash require-
ments. Forecasts of Federal cash require-
ments may be required in the "Remarks"
section of the report.
(3) Cash in hands of subgrantees. When
considered necessary and feasible, by the
Federal agency, grantees may be required
to report the amount of cash advances in
excess of three days' needs in the hands of
their subgrantees or contractors and to
provide short narrative explanations of
ai:tions taken by the grantee to reduce the
excess balances.
(4) Frequency and due date. Grantees
must submit the report no later than IS
working days following the end of each
quarter. However. where an advance ei-
ther by letter of credit or electronic
transfer of funds is authorized at an
annualized rate of one million dollars or
more, the Federal agency may require the
report to be submitted within IS working
days following the end of each month.
(d) Request for advance or reimburse-
menr-( I) Advance payments. Requests
for Treasury check advance payments will
be submitted on Standard' Form 270,
Request for Advance or Reimbursement.
I.
HOUSING AND DEVElOPMENT REPORTER
(This form will not be used for draw-
downs under a letter of credit. electronic
funds transfer or when Treasury check
advance payments are made to the grant-
ee automatically on a predetermined ba-
sis.)
(2) Reimbursemellls. Requests fOT
reimbursement under nonconstruction
grants will also be submitted on Standard
Form 270. (For reimbursement requests
under construction grants, see paragraph
(e)(l) of this section.)
(3) The frequency for submitting pay-
ment requests is treated in ~ 8S.41(bX3).
(e) Ourlay report and request for reim-
bursement for construt:tion programs-( I)
Grants that support construction activi-
ties paid by reimbursement method. (i)
Requesters for reimbursement under con-
struction grants will be submitted on
Standard Form 271, Outlay Report and
Request for Reimbursement for Con-
struction Programs. Federal agencies
may, however, prescribe the Request for
Advance or Reimbursement form, speci-
fied in ~ 8S.41(d), instead of this form.
(ii) The frequency for submitting reim-
bursement requests is treated. in
~ 8S.41(b)(3).
(2) Grants that support construt:tion
activities paid by letter of credit.. electronic
funds transfer or Treasury check advance.
(i) When a construction grant is paid by
letter of credit, eJectronic funds transfer
01' Treasury checlc advances, the grantee
will report its outlays to the Federal
agency using Standard Form 271, Outlay
Report and Request for Reimbursement
for Construction Programs. The Federal
agency will provide any necessary special
instruction. However, frequency and due
date shall be governed by ~ 8S.41(bX3)
and (4).
(ii) When a construction grant is paid
by Treasury check advances based on
periodic requests from the grantee, the
advances will be requested on the fonn
specified in ~ 8S.41(d).
(iii) The Federal agency may substitute
the Financial Status Report specified in
~ 8S.41(b) for the Outlay Report and
Request for Reimbursement for Con-
struction Programs.
(3) Accounting basis. The accounting
basis for the Outlay Report and Request
for Reimbursement for Construction Pro-
grams shall be governed by ~ 8S.41(bX2).
~ 85.42 Retention and access
requirements for records.
(a) App/icabilit'J'. (1) This section ap-
plies to all financial and programmatic
records, supporting documents, statistical
records, and other records of grantees or
subgrantees which are:
Publistled by Warren. Gorham & Lamont. Inc.
(i) Required to be maintained by the
terms of this part. program regulations or
the grant agreement, or
(ii) Otherwise reasonably considered as
pertinent to program regulations or the
grant agreement.
(2) This section does not apply to
records maintained by contractors or sub-
contractors. For a requirement to place a
provision concerning records in certain
kinds of contracts, see ~ 8S.36(iXl 0).
(b) Length of retention period. (I) Ex-
cept as otherwise provided, records must
be retained for three vears from the
starting date specified in 'paragraph (c) of
this section.
(2) If any litigation, claim, negotiation.
audit or other action involving the rec-
ords has been started before the expira-
tion of the 3-year period. the records
must be retained until completion of the
action and resolution of all issues which
arise from it, or until the end of the
regular 3-year period, whichever is later.
(3) To avoid duplicate recordkeeping,
awarding agencies may make special ar-
rangements with grantees and subgran-
tees to retain any records which are
continuously needed for joint use. The
awarding agency will request transfer of
records to its custody when it determines
that the records possess long-term reten-
tion value. When the records are trans-
ferred to or maintained by the Federal
agency, the 3-year retention requirement
is not applicable to the grantee or sub-
grantee.
(c) Starting date of retention period-,-
(1) General. When grant support is con-
tinued or renewed at annual or other
intervals, the retention period for the
records of each funding period stans on
the day the grantee or subgrantee submits
to the awarding agency its single or last
expenditure report for that period. How-
ever, if grant support is continued or
renewed quarterly, the retention period
for each year's records stans on the day
the grantee submits its expenditure report
for the last quarter of the Federal fiscal
year. In all other cases, the retention
period stans on the day the grantee
submits its final expenditure repon. If an
expenditure report has been waived, the
retention period stans on the day the
report would have been due.
(2) Real property and equipment rec-
ords. The retention period for real proper-
ty and equipment records stans from the
date of the disposition or replacement or
transfer at the direction of the awarding
agency.
(3) Records for income lransactions
after grant or subgrant support. In some
cases grantees must report income after
the period of grant support. Where there
is such a requirement. the retention peri-
od for the records pertaining to the earn-
16
COMMUNITY DEVELOPMENT
I
~
ing of the income starts from the end of
the grantee's fiscal vear in which the
income is earned. .
(4) Indirect cost rate proposals. cost
al{ocations plans. ~tc. This paragraph ap-
phes to the followmg types of documents
and their supporting records: IndireCt
cost ra~e computations or proposals, cost"
~llocatlon plans, and any similar a~unt-
IDg computations of the rate at which a
particular group of costs is chargeable
(such as computer usage chargeback rates
or ~omposite. fringe benefit rates).
(I) If submitted for negotiation. If the
prop~sal, plan, or other computation is
reqUired to be submitted to the Federal
Government (or to the grantee) to form
the basis for negotiation of the rate. then
the ~-year retention period for its sup-
portmg records starts from the date of
such submission.
(ii) If not submitted for negotiation. If
~he propo~, plan, or other computation
IS not reqUired to be submitted to the
Federal <;ioyernment (or to the grantee)
for ne~otlat1~n purposes, then the 3-year
retention 'penod fo~ the proposal plan; or
computation and Its supporting records
~tarts frc;>m end of the fiscal year (or other
accounting period) covered by the pro-
posal, plan, or other computation.
(d) Subst~tution f!f microfilm. Copies
":la~e by mlcrofilmmg, photocopying, or
Similar methods may be substituted for
the original records.
(e) Access to records-(l) Records of
grantees and subgrantees. The awarding
agency and the Comptroller General of
t~e United States, or any of their autho-
nzed representatives, shall have the right
of access to any pertinent books, docu-
ments, papers, or other records of grant-
ees and subgrantees which are pertinent
to the grant, in order to make audits
examinations, excerpts. and transcripts.'
. (2) Expiration of right of access. The
r~~ts of access in this section must not be
hmned to the required retention period
but ,shall last as long as the records are
retamed.
(f) Restrictions on public access. The
Federal Freedom of Information Act (5
U.S.C. 552) does not apply to records
Unless required by Federal, State, or local
law, . grantees an? subgrantees are not
reqUired to permit public access to their
records.
,.
-'"
~ 85.43 Enforcement.
(a) Remedies for noncompliance. If a
grantee or subgrantee maLeriallv fails to
comply with any term of an award,
whethe,r stated in a Federal statute or
regulat1~n. an assurance, in a State plan
or apphcation. a notice of award or
elsewhere. the awarding agency may take
one or more of the following actions. as
appropriate in the circumstances:
(l) Temporarily withhold cash pay-
ments pending correction of the deficien-
cy by the grantee or subgrantee or more
~evere enforcement action by the award-
IDg agency.
(2) Disallow (that is, deny both use of
funds and matching credit for) all or part
of the cost of the activity or action not in
compliance.
(3) Wholly or partly suspend or termi-
nate the current award for the grantee's or
subgrantee's program.
(4) Withhold further awards for the
program, or
(5) Take other remedies that may be
legally available.
(b) Hearings. appeals. In taking an
enforcemenL action, the awarding agency
will provide the grantee or subgrantee an
opportunity for such hearing, appeal. or
other administrative proceeding to which
the grantee or subgrantee is entitled under
any statute or regulation applicable LO the
action involved.
(c) Effects of suspension and lermina-
tioll: Costs of grantee or subgrantee re-
sultmg from obligations incurred by the
grantee or subgrantee during a suspension .
or after termination of an award are not
allowable unless the awarding agency
expresSly authorizes.them in the notice of
suspension or termination or subsequent-
ly. Other grantee or subgrantee costs
during suspension or after termination
whi~ are necessary and not reasonably
aVOidable are allowable if:
<:I) The costs result from obligations
which were properlv incurred bv the
grantee or subgrantee' before the effective
date of suspension or termination are not
in anticipation of it, and, in the ~ase of a
termination, are noncancellable, and,
(2) The costs would be allowable if the
award were not suspended or expired
!lormally at the end of the funding period
ID which the termination takes effect.
(d) Relationship to debarment and sus-
pension. The enforcement remedies iden-
t~fied in this ~iC?n. including suspen-
sion and temunatlon. do not preclude
grantee or subgrantee from being subject
to "Debarment and Suspension" under
E.O. 12549 (see ~ 85.35).
~ 85.44 Termination for convenience.
Except as provided in ~ 85.43 awards
may be terminated in whole or in part
on Iv as follows:
(a) By the awarding agency with the
co~sent of the grantee or subgrantee in
which case the two panies shall agree
~pon the termination conditions. includ-
Ing the effective date and in the case of
pani~1 termination. the portion to be
term mated. or
Published by Warren. Gor1'Iam & Lamcint. Inc.
I
09: 1565
HDR RF -417
1-15-90
(b) By the grantee or subgrantee upon
written notification to Lhe awarding agen-
cy. setting forth the reasons for such
termination, the effective date. and in the
case of partial termination. the portion to
be terminated. However, if. in the case of
a partial t~ination, the awarding agen-
cy determInes that Lhe remaining portion
of the award will not accomplish the
purposes for which the award was made
the. awarding agency may terminate th~
award in its entirety under either ~ 85.43
or paragraph (a) of this section.
Subpart D-After- The-Grant
Requirements
~ 85.50 Closeout.
(a) General. The Federal agency will
close .out the award when it determines
that all applicable administrative actions
and all required work of the grant has
been completed.
(b) Reports. Within 90 days after the
expiration or termination of the grant, the
grantee must submit all financial, perfor-
mance, and other reports required as a
condition of the grant. Upon request by
th~ ~tee, Federal agencies may extend
thiS lImeframe. These mav include but
are not limited to: .
( 1) Final performance or progress re-
port.
(2) Financial Status Report (SF 269) or
Outlay Report and Request for Reimburse-
ment for Conslruction Programs (SF-27 I)
(as applicable).
(3) Final request for payment (SF-270)
(if applicable). .'
(4) Invention disclosure (if applicable).
(5) Federally-owned property reporl: In
accordance with ~ 85.32(f), a grantee
must submit an inventory of all federallv
own~d pro~erty (as distinct from property
acqUired WIth grant fundS) for which it is
accountable and request disposition in-
structions from the Federal agency of
property no longer needed.
(c).Cost.adjuslment. The Federal agen-
cy will, ,WIthin 90 days after receipt of
reports In paragraph (b) of this section,
make upward or downward adjustmentS
to the allowable costs.
(d) Cash adjustments. (l) The Federal
agency will make prompt payment to the
grantee for allowable reimbursable costS.
(2) The grantee must immediatelv re-
fund to the Federal agenCY any balance of
unobligated (unencumbered) cash ad-
vanced that is not authorized to be re-
tained for use on other grants.
~ 85.51 Later disallowances and
adjustments.
The closeout of a grant does not affect:
17
09: 1566
(a) The Federal agency's right to disal-
low costs and recover funds on the basis
of a later audit or other review;
(b) The grantee's obligation to return
any funds due as a result of later refunds,
corrections, or other transactionsi
(c) Records retention as required in
~ 85.42;
(df Property management requirements
in ~ 85.31 and 85.32; and
(e Audit requirements in ~ 85.26.
~ 85.52 Collection of aniounts due.
(a) Any funds paid to a grantee in
excess of the amount to which the grantee
I
HOUSING AND DEVEL1pl,1ENT ~PORTER
is finally determined to be entitled under
the terms of the award constitute a debt
to the Federal Government. If not paid
within a reasonable period after demand,
the Federal agency may .reduce the debt
by:
(1 ) Making an administrative offset
against other req~ts for reimburse-
ments,
(2) Withholding advance payments
otherwise due to the grantee, or
(3) Other action permitted by law.
(b) Except where otherwise provided by
statutes or regulations, the Federal agency
Published by Warren. Gorham & Lamont. Inc.
will charge interest on an overdue debt in
accordance with the Federal Claims Col-
lection Standards (4 CFR Ch. 11). The
date from which interest is computed is
not extended by litigation or the filing of
any form of appeal.
Subpart E-EntiUement [Reserved]
Dated: February 10, 1988.
Carl D. Covitt,
Acting Secretary.
18
COMMUNITY DEVELOPMENT BLOCK GRANTS
, I
APPENDIX J
I
09: 1501
HDR RF -185
3 - 9- 81
COST PRINCIPLES FOR STATE AND LOCAL GOVERNMENTS
OMB CIRCULAR A -87
OFFICE OF MANAGEMEHT AND
BUDGET
eoat Princlptes for State and Local
Governments
[46 FR 9548. Jan. 28,1981J
: "i\.
.....
~1f
-.
AcnO": Final policy.
SUMMARY: This notice adviaes that
Federal Management Circular 74-4
(Revised). dated July 18. 1974. is
reissued under its original desiJrnation or
Office of Management and Budget
Circular No. A-87. No substantive
changes arc made in L!-je Circular. The
Circular is set forth below in its entirety.
EFFEcnVE DATE.: The revision was
effective Janue.ry 15. 1981.
FOR FURTHER tNFORMA TlON CONTACT:
Palmer Marcantonio. Deputy Chief.
Financial Manegement Branch. Budget
Review Division. 6002 New Executive
Office Building. Wnshinglon. D.C. 20503.
202/395-\7:'3. .
TO OBTAIN SINGLE COPIES OF THE
CIRCULAR, CONTACT: Document
Distribution Center. Office or
Administ"ation. G-Z.16 New Executive
Office Building. Washington. D.C. 20503.
TO OBTAIN MUL.TlPLE COPIES, CO~-rACT:
Superintendent of Documents. U.S.
Government Printing Office.
Washingtc.n. D.C. 20';C2.
Daniel F. MaDI1.
Budget a..,a'Management Officer.
Janual'}. 15. 198~.
To: The Heads of Execuli."e Departments and
Esta biishml'!nts.
Subject Cost ;lrinr::plcs for Slate and luclil
governme:tts.
1. Purpose. This Ci.cular establishes
principles and standards for deternlining
costs applicable to grolnts. contracts, and
other agt'eemen~s with S:ale and 101".:1]
governments and fl!dernlly-recognized Indian
tribal govemmenls.
2.. Supersession. .This Circular supenedes
Federal Management Ci:'CUlar 7~ as
revised. The Circular is reissued under its
original designation oC OMB Circular A-87.
3. Summary of changes. No substantive
changes are !!lade in the Circular.
4. Policy inter.t. This Circular provides
principles Cor determining the allownble costs
oC programs administered by State. local and
CederaHi'.recognized Indian tribal
governments under llrants fro:n "nd contracts
with the Federal Government. The\" are
designed to pro~'ide t..'1.e basis for a unilorm
approach to the problem oC detcrmining costs
and to promote emcien.:v and uCltter
relationships between ginntees and the
Federal Govem:::cnl. The principles are for
determining co~s on Iv and are not inlended
to identify the circumstances nor to diclate
the extent of Federal and State or local
. participa tion in the finllncinll of a particular
project. They are designed 10 provide lhat
federally.assisted progr;;ms bear their Cair
.hare oC COAl recognized UDder the..
principlea except where reatricted or
prohibited by law. No provi.ion for profit or
other inc::remenl above C08t ia intended.
5. Applicability and acope.
a. The provi.ion. oC thia Circu11ll apply to
all Federal ageneie. re.pon.ible for
acimlni.tering program. that Involve granll
and contracU with State. local .nd lederally-
recognind Indian tribal government..
b. III prov~iol1l do Dot apply to grant. and
contractl with:
(1) PubUcly-rlDanced educ;ationlll
instllution. .ubiect to omc:e oC Mllnagement
and Budget Circujar A-Zl. and
(%) Publicly owned huspitals and other
providen of medical care aubiectto
requiremenu promulgated by the sponsoring
Federal agencies.
Any other exception. will be lIpproved by
the Office oC Manageocnl and Budget in
particular case. where adequate juatlfiClltion
ill presented.
6. Attachments. The prindples ond rehded
polil:)' guides are let forth III the attachments.
which are:
Attachment A-Principles Cor dcterminins
costs applicable to [tJ1ln:s and contracts
with Slate. local and Cederlll!y-recogni~ed
lndilUt tribal governments..
Attachment B-Stllncianis for aelccled ilelUl
. o( COIl..
7. Inquiries. F;:rther Informatiun concemin:
this Circular lIJay b'! obtained by contacting
the FlnanciafMonagel1ll!nt '~ran:h. B,!~et
Review Dh'ision. Office of Marn'~emenl and
Budget. Watthinglon. D.C. 205O:i. leiephnne
20::-395-4773.
James T. MclnlyrP.. Jr.
Director.
[Circular No. A-<l7J
Attachment A-Principles for
Determining Costs Applicable to Grants
and Contracts \\'ith Slate. Local. and
Federally Recognizee 1;)011::1 Tribal
Governments
TABLE OF CO/'lr'TENTS
A. Purpose and $rApe
1. Obje.c:ti\'es
z. Policy guide.
3. Applic.alion
B. Definitions
1. Approval or a:JI.'loriz.ation ollbl! mntor
Federal agency
z. Cost allocatiun plan
3. Cost .
4. Cost objective
s. Federal agency
6. Federally-reco:;niud Indio1;l tribal
governments
7. Grant
8. Grant program
9. Grantee
10. Local unit
11. Other Stale 0::-10("&1 ag'.l:1cics
lZ. Services
13. Supporting services
C. Basic guidelilles
1. Faclors a!feclir:g allowllbiJily of costs
2.. Allocable costs
3. Applicable credits
D. Compasition of ,;ost
1. Total cost .
Publlsned by Warren. Gorham & Lamont. Inc
Z. Clu.ification of co.la
E. Dir<<t coslS
1. Ceneral
2.. Application
F. Indirect cosu
1. Ceneral
2.. Grantee departmental indirect COltl
3. l.ImHaUon on Indirect costs
C. Cost incurred by agencies other than the
grantee
1. Ceneral
z. Alternative methods o( detennining
indirect COlt
H. Cost incurred bJ' grantee department for
others
1. Ceneral
J. C08t ol/oeotion pion
1. General
z. Requirements
3. Inltructions Cor preparstion oC cost
allocation plana
t. Negotiation and approval of indirect COsl
prnpoaal. for Stales
5. Negotiation and approval oC indirect COsl
propo.al. (or local governments
6. Negotiation and approval or indirect cosl
proposal. for CederaUy-ret"ogni:.cd lndilln
I::-ibalgovemments
7. Resolution of problems
A. Purpose and scope.
1. Objectives. This Attllc..~ment SPots
forth principles for deter:nining the
allowable costs of programs
admInistered by State. local. and
. federally-recognized India.'1 tribal
go\"emme:1ts under grants from a::.d
contracts with the Federal Government.
ThE! principles are for the pu.-pose of
cost determination ?nd are not intended
to identify the circumstances or dictate
the extent 01 Federal and State 0:' local.
participation in the financing or a
particular grant. They are designed to
provide that federally-assisted programs
bear their fair share of costs recognized
under these principles. except where
restricted or prohibitp.d by law. No
provision ior profit or other incremenl
above cost is intended.
2.. Poiicy guides. The application of
these principles is based on the
fundamental premises that:
a. State. locaL and federally
recognized Indian tribal governments
are responsible for the efficient and
effective administration of grant and
contract programs through the
application of sound management
practices.
b. The grantee or contractor assumes
the responsibility for seeing that
federally-ass:sted program funds have
been eXj:lended and accounted for
consistent with underlying agreements
and program objectives.
c. Each grantee or contractor
ol"'Janization, in recognition of its own
unique combination of staff facilities
and experience. will have the prL.'i1ary
responsibility for employing whatever
form of organization and management
0'9:1502
techniques may be necessary to assure
proper and efficient administration.
3. Application. These principles will
be applied by all Federal agencies in
determining costs incurred by State.
local. and federally recognized Indian
tribal governments tinder Federal gl"'dnts
and cost reimbursement type contracts
(including subgrants and subcontracts)
except those with (a) publicly-financed
educational institutions subject to Office
of Management and Budget Circular A-
n. and (b) publicly-owned hospitals and
ather providers of medical care subject
to requirements promulgated by the
sponsoring Fe-deral agencies.
B. Definitions.
1. Approval or authorization of the
grantor Federal agenCj' means
documentation evidencing consent prior
to incurring specific cost.
z. Cost aJJocation plan means the
documentation identifying.
accumulating. and distributing
aHowable costs under grants and
contracts together with the allocation
methods used.
3. Cost. as used herein, means cost as
determined on a casR. accrual. or other
basis acceptable to the Federal grantor
agency as a discharge of the grantee's
accountability for Federal funds.
4. Cost objective means a pool. center.
or area established for the accumulation
of cost. Such areas include
a~anizational units. functions, objects
or items of "expense, as well as ultimate
cost.objectives including specific grants,
projects. contracts. and other activities.
5. Federal agency means any
depanment. agency, commission. or
instrumentality in the executive branch
of the Federal Government which makes
grants to or contracts with State. local.
or federally-recognized Indian tribal
governments.
6. FederaJJy-recognized Indian tribal
governments means the governing body
or a governmental agency of any Indian
tribe. band. nation, or other organized
group or community (including any
native village as defined in Section 3 of
the Alaska Native Claims Settlement
Act. 85 Stat. 688) certified by the
Secretary of the Interior as eligible for
the special programs and services
provided by him through the Bureau of
Indian Affairs.
7. Grant means an agreement between
the Federal Government and a State.
local. or federally-recognized Indian
tribal government whereby the Federal
Government provides funds or aid in
kind to carry out specified programs.
services. or activities. The principles
and policies stated in this Circular as
applicable to grants in general also
apply to any federally-sponsored cost
reimbursement-tl-'Pe of agreement
I
HOUSING & DEVELOPMENT REPORTER
I
~
performed by a State. local. or federally-
recognized Indian tribal government.
8. Gront program means those
acti vities and operations of the grantee
which are necessary to carry out the
purposes of the grant. including any
portion of the program financed by the
grantee. . .-
9. Grantee means the department or
agency of Slate. local.. or federally
recognized ~dian tribal government
which is responsible for administration
of the grant.
10. Local unit means any political
subdivision of go\"ernment. below the
State level.
11. Other State or local agencies
means department or agencies of the
State or local unit which provide goods.
facilities. and services to a grantee.
12. Sen'ices. as used herein. means
goods and facilities. as well as services.
13. Supporting services means
auxiliary functi"ns necessary to sustain
the direct effort involved in
administering a grant program or an
activity providing service to the grant
program. These sen;ces may be
~entralized in the grantee department or
in sc:ne other agency. and inlcude .
procurcmanl. payroll, personnel
functions. maintenance and operation of
spllce. data p'rocessing. accounting.
budgeting. auditing. mail and messenger
service. and the like.
C. Sasic guidelines.
1. Factors affecting alIowability of
costs. To allowaLle under a grant
program. costs must meet the following
general criteria:
a. Be necessary and reasonable for
proper and efficient administration of
the grant progranis. be allocable thereto
under these principles. and except as
specifically provided herein. not be a
general expense required to carry out
the overaU responsibilities of State,
local or federally-recognized Indian
tribal go\'ernments.
b. Be authorized or not prohibited
under State or local laws or regulations.
c. Conform to any limitations or
exclusions set forth in these principles.
Federal laWS. or other governing
limitations as to t}'Pes or amounts of
cost items.
d. Be consistent with policies.
regulations. and procedures that apply
uniformly to both federally assisted and
other activities of the unit of government
of which the grantee is a part.
e. Be accorded consistent treatment
through application of generally
accepted accounting principles
appropriate to the circumstances.
f. Not be allocable to or included as a
cost of any other federally financed
program in either the current or a prior
period.
Published by Warren. Gorham & Lamont. Inc.
g. Be net of all applicable credits.
Z. Allocable costs.
a. A cost is allocable to a particular
cost objecti\'e to the extent of benefits
received by such objective. .
b. Any cost allocable to a particular
grant or cost objective under the .
principles pro\'ided for in this Circular
mav not he shifted to other Federal
gra~t programs to overcome fund
deficiencies. a\'oid restrictions imposed
by law or grant agreements. or for other
reallons.
c. Where an ailocation of joint cost
will ultimately result in charges to a
grant program. an allocation plan willlJe
'required as prescribed in Section J.
3. Applicable credits. .
D. App!icaule credits refer to thOSE!
receipts or reduction of expenditure-
type transactions which offset or reduce
expense items allocable 10 grants as
direct or indirect costs. Examples of
such transactions are: purchase
discounts: I'euates or allowances.
recoveries or indeminties on losses: sble
of pubiications. equipmenl, and scrap:
income from per:;on&l or incidental
services: ar.d adjustments of
overpayments or erroneous charges.
b. Applicable credits may also arise
when Federal funds arerecei\'ed or are
available from sources other than the
gr&nt program involved to finance
operations or capital items of the
grantee. This includes costs arising from
the use or depreciation of items donated
or financed by the Federal Government
to fulfill matching requirments .under
another grant program. These types of
credits should likewise be used to
reduce related exoenditures in
determining the rates or amounts
applicable to a given grant.
D. Composition of Cost
1. Total cost. The total cost of a grant
program is comprised of the allowable
direct cost incident to its performance.
plus its allocable portion of allowable
indirect costs. less applicable credits.
2. Classification of costs. There is no
universal rule for classifying certain
costs as either direct or indirect under
every accounting system. A cost may be
direct with respect to some specific
service or function. but indirect with
respect to the grant or other ultimate
cost objective. It is essential. therefore.
that each item of cost be treated
consistently either as a direct or an
indirect cost. Specific guides for
determining. direct and indirect costs
allocable under grant programs are
provided in the sections which follow:
E. Direct Costs
1.. General. Direct costs are those that
can be identified specifically with a
COMMUNITY DEVELOPfENT BLOCK GRANTS
j
particular cost objective. The.. co.t.
may be charged directly to grants.
contracts. or to other programs against
which costs are finally lodged. Direct
costs may also be charged to cost
objectives used for the accumulation oC
costs pending distribution in due course
to grants and other ultimate cost
objectives.
2. Application. Typical direct costs
chargeable to grant programs are:
a. Compensation oC employees for the
time and efforts devoted specifically to
the execution oC grant programs.
b. Cost oC materials acquired.
consumed. or expended specifically for
the purpose of the grant.
c. Equipment and other approved
cal)ital expenditures.
d. Other items of expense incurred
specifically to carry out the grant
agreement.
e. Services furnished specifically for
the grant program by other agencies,
provided such charges are consistent
with criteria outlined in Section G of
these principles.
F. Indirect Costs
1. General. Indirect costs are those (a)
incurred for a common or joint purpose
benefiting more than one cost objective,
and (b) not readily assignable to the co.:t
objective.. specifically benefited.
without effort disproportionate to the
results achieved. The term "indirect
costs," as used herein. apphes to costs
of this type originating in the grantee
department. as well as those incurred by
other departments in supplying goods.
services..and facilities. to the grantee
department. To facilitate equitable
distribution of indirect expenses to the
cost objectives served. it may be
necessary to establish a number of poola
of indirect cost within a grantee
depa'rtment or in other agencies
providing services to a grantee
department. Indirect cost pools should
be distributed to benefiting cost
objectives on bases which will produce
an equitable reoult in consideration of
relative benefits derived.
2. Grantee departmental indirect
costs. All grantee departmental indirect
costs, including the various levels of
supervision. are eligible for allocation to
grant programs provided they meet the
conditions set forth in this Circular. In
lieu of determining the actual amount 01
grantee departmental indirec~ cost
allocable to a grant program. the
following methods may be used.
a. Predetermined fixed rates for
indirect costs. A predetermined fIXed
rate for computing indirect costs
applicable to a grant may be negotiated
aMually in situations where the cost
experience and other pertinent facts
:\.
.~
~
~':
available are deemed sufficient to .
enable the contracting parties to reach
an infonned judgment (1) as to the
probable level of indirect costs In the
grantee department during the period to
be covered by the negotiated rate. and
(2) that the amount allowable under the
predetermined rate would not exceed
actual indirect COlt.
b. Negotiated Jump sum for overhead.
A negotiated rIXed amount In lieu of
indirect costs may be appropriate under
circumstances where the benefits
derived from a grantee department's
indirect services cannot be readily
determined as in the case of small. self-
contained or isolated activity. When this
method is used. a determination should
be made that the amount negotiated will
be approximately the same as the actual
indirect cost that may be incurred. Such
amounts negotiated in lieu of indirect
costs will be treated a8 an offset to total
indirect expenses of the grantee
department before allocation to
remaining activities. The base on which
such remaining expenses are allocated
should be appropriately adjusted.
3. Limitation on indirect costs.
a. Federal grants may be subject to
laws that limit the amount of indirect
costs that may be allowed. Agencies
that sponsor grants of this type will
establish procedures which will assure
that the amount actually allowed for
indirect costs under each such grant
does not exceed the maximum
allowable under the s~tutory limitation
or the amount otherwise allowable
under this Circular, whichever' is the
IJmaller.
b. When the amount allowable under
a statutory limitation is less than the
amount otherwise allocable as indirect
costs under this Circular. the amount not
recoverable as indirect costs under a
grant not be shifted to another federally-
sponsored grant program or contract.
G. Cost Incurred by Agencies Other
Than the Grantee
1. General. The coat of service
provided by other agencies may only
include allowable direct costs of the
service plus a pro rata share of
allowable suppOrting costs (Section
B.l2.) and supervialon directly required
in performing the service. but not
supervi.sion of a pneral nature such as
that provided by the head of a
department and his staff assistants not
directly involved in operations.
However. supervision by the head of a
department or agency whose sole
function is providing the service
furnished would be an eligible cost..
Supporting costs include those furnished
by other units of the supplying
department or by other agencies.
Published by Warren. Gorham & Lamont, Inc.
I
09: 1503
HDR RF -185
3-9-81
2. AJtlJmDtin methods of delMmining
indirect coaL In lieu of determiDin8
8ctuallndirect cost related to a .
particular service furnished by another
agency. either of the following
altemative methods may be used
provided only one method is used for a
specific service durillR the fiscal year
involved. _
a. Standard indirect rate. An amount
equal to ten percent of direct labor cost
in providing the service performed by
another State agency (excluding
overtime, shift, or holiday premiUms and
fringe benefits) may be allowed in lieu
of actual allowable Indirect cost for that
service.
b. Predetermined fixed rata. A
predetermined fIXed rate for indirect
cost of the unit or activity providing
service may be negotiated as set forth in
Section F.2.8.
H. Cost Incurred by Grantee
Depa11l1leirt for Others
1. General. The principies provided in
Section G will also be used in
determining the cost of services
'Provided by the grantee department to
another agency.
J. Cost Allocation Plan
1. General. A plan for allooatioD of
costs Will be required to support the
distribution of any joint costs related to
the grant program. All costs included in
the plan will be supported by formal
accounting records which w'lll
substantiate the .propriety of eventual
charges. -
2. Requirements. The allocation plan .,
of the grantee department should cover
all joint costs of the department as well
as costs to be allocated under plans of
other agencies or organizational units
which are to be included in the costs of
federally.sponsored programs. The cost
allocation plana of all the agencies
rendering services to the grantee
department,.to the extent feasible.
should be presented In a single
document. The allocation plan should
contain. but not necessarily be limited
to, the following.
a. The nature and extent of .Jervices
provided and their relevance to the
federally-sponsored programs.
b. The items of o!xpense to be
included.
c. The methods to be used in
distributing cost.
3. Instructions for preparation of cost
allocation plans. The Department of
Health and Human Services' in
consultation with the. other Federal
agencies eo~cerned. will be responsible
for developing fhld issuing the
instructions for use by grantees In
preparation of cost allocatton tllans.
. 0'9: 1504
nu. responaibility applies to both
central support services at the State.
local. and Indian tribal level and
indirect cost proposal. oC individual
grantee departments.
4. Negotiation and opproval of
indirect cast proposals lor States.
a. nie Department oC Health and
Human Services. in collaboration with
the other Federal agencies concemed.
will be responaible for negotiation.
approval. and audit oC cost allocation
plans, which_will be submitted to it by
the States. nese plans will cover
central support service costs of the
State.
b. At the grantee department level in a
State. a single cognizant Federal agency
wiD have responsibility similar to that
let Corth in a. abon. for the negotiation.
approval. and audit of the indirect cost
proposal. A current list oC agency
assignments i. maintained by the Office
of Management and BudgeL
c. Questiona concerning the cost
allocation plana approved under a. and
b. above. should be directed to the
apncy responsible for. such "lpprovals.
S. Negotiation and approval of
indirect cost proposals lor local
governments.
a. Cost allocation plans will be
retained at the local government level
for audit by a designated Federal agency
except in those cases where that agency
requests that cost~location plans be
submitted to it Cor negotiation and
approval .
b. A list oC cognizant Federal agencies
assigned responsibility for negotiation.
approval and audit oC central support
service cost allocation plana at the local
savemmentlevel is maintained by the
the Office of Management and BudgeL
Co At the grantee department level of
local governments. the Federal agency
with the predominant interest in the
wade of the grantee department will be
responsible for necessary negotiation.
asfpr;oval and audit of the indirect cost
proposaL
6. Negotiation. and approval of .
Urdirect cast proposals lor lederally
recDgnized Indian tribal governments.
The Federal agency with the
predominant interest in the work of the
paDtee department will be responsible
for necessary negotiation. approval and
audit of the indirect cost proposal.
T.Resolution of problems. To the
extent that problems are encountered
among the Federal agencies in
connection with 4 and 5 above. the
Office of Management and Budget will
lend assistance as' required.
I
HOUSING & DEVELOPMENT REPORTER
I
[Clrcu.... No. A-I7]
Attachment B-Standards for Selected
Items oCCosts
Table of.Coat....
A. PurptJ8e and applicability
1. Objective
%. Application
B. Allowable CJJ$ts
1. Accounting
%. Advertising
3. Advisory councils
4. Audilservice
S. Bonding
6. Budgeting
7. Building lease managemenl
8. Centr3lstores
9. Communications
10. Compensation Cor personal services
11. Depreciation and use allowances
12, Disbursing .ervice
11. F.mployee rringe benl!fils
14. Employee morale. health ilnd .welrare
costs
15. Exhibits.
'6. Legal expenses
17. Maintenance and repair
18. Materials and supplies'
19. Memberships. subscriptions and
proCessional activites
20. Motor pools
21. Payroll preparation
22. Personnel administration
23. Printing and reproduction
24. Procurement service
25. Tax!!s
za. Training and education
21. Transportation
za. Travel
C. Costs aJJowabJe with approval of grantor
agency
1. Automatic data processing
%. Bw1dill8 space and related facilities
3. Capital expenditura
4. InsW'llDC8 and indemnification
5. Management studies
6. Preagreement COlts
7. ProCessicmaJ aervices
8. Proposal coats
D. Unallowable CJJ$ts
1. Bad debts
%. Continsp.ncies .
3. Contributions and donations
4. Entertainment
5. Fines and penalties
8. Governor's expenses
7.lnt.....t and other financial coats
8. Legislative expenres
9. Uoderrecovery of COlts under 8f&I1t
agreemeoll
A. Purpou and applicability.
1. Objective. This Attachment
provides standards Cor determining the
allowability of selected items of cosL
2. Application. These atandards will
apply irrespective of whether a
particular item of coat is treated as
direct or indirect coaL Failure to
mention a particular item of cost in the
standards is not intended to imply that it
is ei ther allowable or unallowable,
rather determination of allowability in
each case should be based on the
treatment oC standards provided for
PUblished by Warren. Gorham & Lamont, Inc.
Similar or related itelDS of cosL The
allowability of lbe aelected item. of cost
is subject to the general poliCies and
principles stated in Attachment A of this
Circular.
B. AJJowable costs.
1. Accounting. The cost of establishing
and maintaining accounting and other
information systems required for the .
management of grant programs is
allowable. This includes costs incurred
by central service agen.cies for thelle
purposes. The cost of maintaining
central accounting records required for
overall State or Indian tribal
government purposes. such as
appropnation and fund accounts by the
Treasurer. Comptroiler. or similar
officials. is considered to be a general
expense of $ovemment and is not
allowable.
z. Advertising. Advertising media
includes newspapers. magazines. radio
and television programs. direct mail.
lrade papers. and the like. The
advertising costs allowable are those
which are solely for:
a. Recruitment of personnel required
for the grant program.
b. solicita tion oC bids for the
procurement of goods and services
required.
c. disposal of scrap or surplus
materials acquired in the performance of
the grant agreemenL
d. Other purposes specifically
provided for in the grant agreement.
3. Advisory cDuncJ1s. Costs incurred
by State advisory councils or
committees established punuant to
Federal requirements to carry out grant
programs are allowable. The cost of like
organizations is allowable when
provided Cor in the grant agreemenL
4. Audit servies. The cost of audita
necessary for the administration and
management of functions related to
grant programs is allowable.
5. Bonding. Costs of premiums on
bonds covering employees wbo handle
grantee agency funds are allowable.
s. Budgeting. Costs incurred for the
development. preparation. presentation.
and execuUon oC budgets are allowable.
Costs for service. of a central budget
office are generally not allowable since
these are costs of general governmenL
However. where employees of the
central budget office actively participate
in the grantee agency's budget process.
the cost of identifiable services is
allowable.
7. Building leQ8e management The
administrative coat for lease
management which includes review of
lease proposals. maintenance of a 'list of
available property for lease. and related
activities is allowable.
,. COMMUNITY DEVEL1PMENT BLOCK GRANTS
>..
.1
"..
8. Centrol stores. The cost of
maintaining and operating a central
stores organization for supplies.
equipment. and materials uted either
directly or indirectly for grant programs
is allowable.
9. Communications. Communication
costs incurred for telephone calls or
service. teletype service. wide area
telephone service (WATS), centrex.
telpak (tie lines), postage. messenger
service and similar expenses are
allowable.
10. Compensation for personal
services.
a. General. Compensation for
personal services includes all
remuneration. paid currently or .ccured.
for servicas rendered during the period
of penonnance under the grant
agreement. including but not necessarily
limited to wages. salaries. and
supplementary compensation and
benefits (Section 8.13.). The cost! of
such compensation are allowable to the
extent that total compensation for
individual employees: (1) i..reasonable
for the serviceli rendered: (2) follows an
appointment made in accordance with
State. local. or Indian tribal govemment
laws and rules and which meets Federal
merit system or other requirements,
where applicable: and (3) is determined
and supported as provided in b. below.
Compensation for employees engaged in
federally-assisted activities will be
considered reasonable to the extent that
it is consistent with that paid for similar
work in other activitieS' of the State.
locaL or Indian tribal government. In
cases where the kind, of employees
required for the federally-assisted
activities are not found in the other
activities of the State, local, or Indian
tribal govemment. compensation will be
considered reasonable to the extent that
it is comparable to that paid for similar
work in the labor market in which the
employing government competes for the
kind of employees involved.
Compensation surveys providing data
representative of the labor market
involved will be an acceptable basis for
evaluating reasonableness.
b. PayralJ and distribution of time.
Amounts charged to grant programs for
personal services. regardless of whether
treated as direct or indirect costs. will
be based on payrolls documented and
provided in accordanca with generally
accepted practice of the State. local, or
Indian tribal government. Payrolls must,
be supported by time and attendance or
equivalent records for individual
employees. Salaries and wages of
employees chargeable to more than one
grant program or other cost objective
will be supported by appropriate time
distribution records. The method uted
--
should produce an equitable distribution
of time aDd effort.
11. Depreciation.and use alJowance..
L Grantees may be compensated for
the oae of buiJdil'lp, capital
improvements. and equipment tbro&lgb
use allowances or depreciation. Use
allowances are the means of providing
compensation in lieu of depredation or
other eqwivalent costs. However. a
combination of the two methods may
not be used in connection with a single
class of fixed assets.
b. The computation of depredation or
use allowance will be based on
acquisition cost. Where actual cost
records have not been maintained. a
reasonable estimate of the original
acquisition cost may be used in the
computation. The computation will
exclude the cost or allY portion of the
cost of buildings and equipment donated
or borne directly or indirectly by the
Federal Go\'emment through charges to
Federal grant propgrams or otherwise.
irrespective of where title was originally
vested or where it presently resides. In
addition. the computation will also
exclude the cost of land. Depreciation or
a use allowance on idle or excess
facilities is not allowable. except when
spedfically authorized by the grantor
Federal agency.
c. Where the depredation method is
followed. adequate property records
moat be maintained. and any generally-
accepted method of computing
depredation may be oaed. However. the
method of computing depreciation must
be consistently applied for any specific
..set or class of assets for all affected
federally-sponsored programs and must
result in equitable charges considering
the extent of the oae of the assets for the
benefit of such programs.
d. In lieu of deprecia tion. a oae
allowance for buildings and
improvements may be computed at an
annual rate not exceeding two percent
of acquisition cost. The use allowance
for equipment (excluding items properly
capitalized as building cost) will be
computed at an annual rate not
exceeding six and two-thirds percent of
acquisition cost of usuable equiplUenl
e. No depredation or ute charge may
be allowed on any assets that would be
considered as fully depredated.
provided. however. that reasonable oae
charges may be negotiated for any such
assets if warranted after taking into
consideration the cost of the facility or
item involved. the estimated useful life
remaining at time of negotiation. the
effect of any increased maintenance
charges Of decreased effidency due to
age. and an~ QthB!' factors.pertinent to
the utilizatiOl"l "elthe 'flrCility or item for
the purpose contemplated.
Published by Warren. Gomam & Lamont. Inc:.
II
09: 1505
HDR RF -185
3 - 9- 81
12. Disbursing service. The cost of
disbursing grant program funds by the
T teasurer or other designated officer is
allowable. Disbursing service. cover the
processing of checks or warrants. from
preparation to redemption. including the
necessary records of accountability and
reconciliation of such records wllh
related cash accounts.
13. Employee fringe benefits. Costs
identified under a. and b. below are
allowable to the extent that total
compensation for employees is
reasonable as defined in Section B.l0.
a. Employee benefits in the fonn of
regular compensation paid to employees
during periods of authorized absences
from the job, such al for annual leave.
sick leave, court leave. military leave.
and the like. if they are: (1) provided
prusuant to an approved leave sYltem:
and (2) the cost thereof is equitably
allocated to aU related activities.
including grant programs.
b. Employee benefits in the form of
employers' contribution or expenses for
social security. employees' life and
health insurance plans, unemployment
inSW'8nce coverage. workmen's
compensation insurance. pension plans.
severance pay, and the like, provided
such benefits are granted under
approved plans and are distributed
equitably to grant programs and to other
activities.
14. Employee morale, health and
welfare costs. The" COlts of health or
fl1'8.t..aid clinics and/or infinnaries,
recreational facilities. employees'
counseling services. emploY'ee
information publications. and any
related expenses incurred in accordance
with general State, local or Indian tribal
policy, are allowable. Income generated
from any of these activities will be
offset against expenses.
15. Exhibits. Costs of exhibits relating
specifically to the grant programs are
allowable.
16. Legal expenseS. The cost of legal
expenses required in the administration
of grant programs is allowable. Legal
services furnished by the chief legal
officer of a State, local or Indian tribal
government or his staff solely for the
purpose of discharging his general
responsibilities as legal officer are
unallowable. Legal expenses for the
prosecution of claims against the
Federal Government are unallowable.
17. Maintenance and repair. Costs
incurred for necessary maintenance,
repair, or upkeep of property which
neither add to the pennanent value of
the property oor appreciably prolong its
intended life, but keep it in an efficient "
operating condition. are allowable.
18. Materials and supplies. The cost of
materials and supplies necessary to
. '
, '
09: 1506
carry out the grant program. i.
allowable. Purcha.es made specifically
for the grant program .hould be charged
thereto at their actual prices aCter
deducting aU cash discounts. trade
discount.. rebates, and allowances
received by the grantee. Withdrawals
from general .tores or stockroom.
should be charged at coat under any
recognized method of pricing
consistently applied. Incoming
transportation charges ~re a proper part
of material cost.
19. Memberships, subscriptions and
professional activities.
a. Memberships. The c;ost of
membership in civic. business. technical
and professional organizations is
allowable provided: (1) the benefit !rom
the membership i. related to the grant
program; (2) the expenditure is for
agency membership; (3) the cost of the
membership i. reasonably related to the
value of the services or benefils
received: and (4) the expenditure is not
lor membership in an organization
which devotes a substantial part of its
activities to influencing legislation.
b. Reference material, The cost of
books, and subscriptions to civic.
business, professional. and technical
periodicals is allowable when related to
the grant program.
c. Meetings and conferences. Costs
are allowable when the primary purpose
of the meeting is the dissemination of
technical Information relating to the
grant program and they are consistent
with regular practices followed for other
activities of the 8f8ntee.
20. Motor pools. The costs of a service
organization which provides
automobiles to user grantee agencies at
a mileage or fIXed rate and/or provides
vehicle maintenance. inspection and
repair services are allowable.
21. ParroJJ preparation. The cost of
preparing payrolls and maintaining
necessary related wage records is
allowable.
22. Personnel administration. Costs
for the recruitment. examination.
cert.ification. classification. training.
establishment of pay standards, and
related activities for grant programs. are
allowable.
23. Printing and reproduction. Cost.
Cor printing and reproduction services
nece.sary for grant administration.
including but not limited to forms.
reports. manuals. and inlormational
literature. are allowable. Publication
costs of reports or other media relating
to grant program accomplishments or
results are allowable when provided for
in the grant agreemenL
24. Procurement service. The cost of
procurement service. including
'olicitation of bids, preparation and
I
HOUSING & DEVElOPMENT REPORTE~
award of contracts. and aU phases of
contract administration in PfOviding
goods. facilities and services for grant'
programs. i. allowable.
25. Taxes. In general. taxes or
payment. in lieu of taxes which the
grantee agency i. legally,required to pay
are allowable.
28. Training and education. The co.t
of in-service training. customarily
provided for employee development.
which directly or Indirectly benefits
grant program. is allowable. Out-of-
service training involving extended
periods of time is allowable only when
specifically authorized by the grantor
agency.
27. Transportation. Cost:! incurred for
freight. cartage. express. postage and
other tran.portation costa relating either
to goods purchased. delivered. or moved
from one location to another are
allowable.
28. Travel. Travel costs are llllowable
for expenses for transportation. lodging.
subsistence. and related items incurred
by employees who are in travel status
on official business incident to a grant
program. Such costs may be charged on
an actual basis. on a per diem or
mileage basis in lieu of actual costs
incurred. or on a combination of the
two. provided the method used is
applied to an entire trip, and results in
charges consistent with those normally
allowed in like circumstances in non.
federally sponsored activities. The
difference in cost between first-class air
accommodatioDS and less-then-first.
class /:Iir accommodations are not is
unallowable except when lass-than.
first-class air accommodations
reasonably available. Notwithstanding
the provisions of paragrapba 0.6. and 8..
travel costa of officiala covered by tho.e
paragrapba. when specifically related to
grant programs. are allowable with the
prior approval of a grantor agency.
e. Costs Allowablll With A.pproval of
Grantor Agency
t. Automatic dam processing. The
cost of data processing services to grant
programs is allowable. This cost may
include rental of equipment or
depreciation on grantee-owned
equipment. The acquisition of
equipment. whether by outright
purchase, rental-purchase agreement or
other method of purchase. is allowable
only upon specific prior approval of the
grantor Federal agency as provided
under the selected item for Capital
expenditures.
2. Building space and related
facilities. The cost of space in privately
or publicly owned buildings used for the
benefit of the grant program is allowable
subject to the conditions stated below.
Published by WlIfI'en. Gorham & Lamont. Inc,
The total cost of space. whether in a
privately or publicly owned building.
may not exceed the rental cost of
comparable space and facilities in a
privately-owned building in the same
locality. The cost of space procured for
grant program usage maJ' not be charged
to the program for periods of
nonoccupancy.' wilhout authorization of
the grantor Federal asency.
a. Rentol cost. The rental COlt of
space in a privately-owned building is
allowable. Similar costs for publicly
owned buildings newly occupied on or
after October 1. 1980. are allowable
where "rental rate" systems. or
equivalent s~'stems that adequately
reflect actual costs, are emplo}'ed. Such
charges must be determined on the basis
of actual cost (including depreciation
based on the useful life "f the building.
interest paid or accrued. operation and
milintenance. and other allowable
costs). Where these costs are included
in rental charges. they may not be
charged elsewhere. No costs will be
included for purchases or construction
that were originally fmanced by the
Fp.deral CovemmenL
b. Maintenance and operation. The
cost of utilities. insarance. security.
janitorial services. elevator service.
upkeep of g:Dunds. nC!.'mal repairs and
alterations and the Iike:are allowable to
the extent they are not otherwise
included in rental or other charges for
space.
c. Rearrangemer:ts and ol/erations_
Costs incurred for rearrangement and
alteration of facilities required
specifically for the grant program or
those that materially increase the value
or useful life of the facilities (Section
C.3.) are allowable when specifically
approved by the grantor agency.
d. Depreciation and just aJJowances
on pubJicly-owned buJ1dings. The costs
are allowable as provided in Section
B.ll.
e. Occupancy of space under rental-
purchase or a lease with option-to.
purchase agreement. The cost of space
procured under such arrangements is
allowable when specifically approved
by the Federal grantor agency.
3. Captial expenditures. The 'Cost of
facilities. equipment. other capital
assets. and repairs which materially
increasll the value or useful life of
capital asseta is allowable when such
procurement is specifically approved by
the Federal grantor agency. When assets
acquired with Federal grant funds are
(a) sold: (b) no longer available for use
in a federally-sponsored program: or (c)
used for purposes not authorized by the
grantor agency. the Federal grantor
agency'. equity in the asset will be
refunded in the same proportion as
03:06€-0 .
(e) Prior notification. The recipient
shall provide the HUD field office with
written notification of the amount of
funds to be distributed to a private finan-
cial institution before distribution under
the provisions of this section.
(0 Recordkeeping requirements. The
recipient shall maintain in its files a copy
of the written agreement and related
documents establishing conformance
with this section and concerning perfor-
mance by a financial institution in
accordance with the agreement.
, Subpart K-Other Program
Requirements
~ 570.600 General.
(a) Section 104(b) of the Act provides
that any grant under section 106 of the
Act shall be made only if the grantee
cenifies to the satisfaction of the Secre-
tary, among other things, that the grant
"will be conducted and administered in
confonnitv with Pub. L. 88-352 and Pub.
L 90.28(" and, further, that the grantee
"will comply with the other provisions of
this title and with other applicable laws."
Section I 04(e)(1) of the Act requires that
the Secretary determine with respect to
grants made pursuant to section 106(b)
(Entitlement Grants) and 106(d)(2)(B)
(HUD-administered Small Cities Grants),
at least on an annual basis, among other
things, "whether the grantee has carried
out [its] certifications in compliance with
the requirements and the primary objec.
tives of this title and with other applica.
ble laws. · .." Certain other statutes are
expressly made applicable to activities
assisted under tbe Act by the Act itself,
while other laws not referred to in the Act
may be applicable to such activities by
their own tenns. Certain statutes or Exec-
utive Orders which may be applicable to
activities assisted under tbe Act bv their
own terms are administered or enforced
by governmental departments or agencies
other than the Secretary or the Depart.
ment. This Subpart K enumerates laws
which .the Secretary will treat as applica.
ble to grants made under section 106 of
the Act, other than grants to States made
pursuant to section 106(d) of the Act. for
purposes of the determinations described
above to be made by the Secretary under
section I 04(e)(1) of the Act, inclUding
statutes expressly made applicable by the
Act and certain other statutes and Execu-
tive Orders for which the Secretary has
I
HOUSING AND DEVEfPME1..rr REPORTER
APPENDIX K
enforcement responsibility. The absence
of mention herein of anv other statute for
which the Secretary does not have direct
enforcement responsibility is not intend-
ed to be taken as an indication that. in the
Secretary's opinion, such statute or Exec-
ulive Order is not applicable to activities
assisted under the Act. For laws which the
Secretary will treat as applicable to grants
made to Stales under section 106(d) of
the Act for PUfl)Oses of the determination
required to be made by the Secretary
pursuant to section 104(e)(2) of the Act,
see ~ 570.496.
(b) This subpart also sets forth certain
additional program requirements which
the Secretary has determined to be appli.
cable to grants provided under the Act as
a matter of administrative discretion.
(c) In addition to grants made pursuant
to section 106(b) and 106(d)(2)(B) of the
Act (Subparts D and F, respectively), the
requirements of this Subpart K are appli.
cable to grants made pursuant to sections
107 and 119 of the Act (Subparts E and
G, respectivelyJ. and to loans guaranteed
pursuant to Subpart M.
~ 570.601 Public La" 88-352 and
Public Law 90-284; affirmativeJy
furthering fair hOllSing; Executive Order
11063.
Section 104(b) of the Act provides that
any grant under section 106 of the Act
shall be made only if the grantcc certifies
to the satisfaction of the Secretary that
the grant "will be conducted and adminis-
tered in conformitv with Pub. L 88-352
and Pub. L 90-284 and the grantee will
affirmatively further fair housing." Simi-
larly, section I 07 provides that no grant
may be made under that section (Secre.
tary's Discretionary Fund) or section 119
(UDAG) without satisfactory assurances
that tbe grantee's program will be con.
ducted and administered in conformity
with Pub. L 88-352 and Pub. L 90-284.
(a) "Pub. L 88-352" refers to title VI of
the Civil Rights Act of 1964 (42 U.S.C.
2000d el seq.). which provides that no
person in the United States shall on the
ground of race, color, or national origin,
be excluded from participation in, be
denied the benefits of, or be subjected to
discrimination under any program or
activity receiving Federal financial assis-
tance. Section 602 of the Civil Rights Act
of 1964 directs each Federal department
and agency empowered to extend Federal
financial assistance to any program or
Published by Warren, Gortlam & Lamont. Inc.
activity by way of grant to effectuate the
foregoing prohibition by issuing rules.
regulations. or orders of general applica-
bility which shall be consistent with
achievement of the statute authoriz.ing
the financial assistance. HUD regulations
implementing the requirements of Titlc
VI with respect to HUD programs are
contained in 24 CFR Pan I.
(b) "Public Law 90-284" refers to The
Fair Housing Act (42 U.S.C. 3601-20),
popularly known as the Fair Housing Act,
which states that iI is the policy of the
United States to provide. within the con-
stitutional limitations. for fair housing
throughout the United States and prohib-
its any person from discriminating in the
sale or rental of housing, the financing of
housing, or the provision of brokcrage
scrvices, including otherwise making un.
available or denying a dwelling to any
person, because of race, color. religion.
sex, national origin, handicap, or familial
status. The Fair Housing Act further
requires the Secretary to administer the
programs and activities relating to hOUSe
ing and urban development in a manner
affirmativcly to further the policies of
the Fair Housing Act. In accordance with
this statutory direction. the Secretary
requires that grantees administcr all pro-
grams and activities related to housing
and community development in a man.
ner to affirmativcly further the polici=:s of
the Fair Housing Act, furthennore, sec.
tion 104(b)(2) of the Act requires that
each grantee receiving funds under sec-
tion 106 of the Act (cntitlement or small
cities grantees) certify to the satisfaction
of the Secretary that it will affinnatively
further fair housing.
(c) Executive Order 11063, as amended
by Executive Order 12259, directs the
Department to take all action necessary
and appropriate to prevent discrimina-
tion because of race, color, religion
(creed), sex, or national origin. in the sale.
leasing, rental, or other disposition of
residential property and related facilities
(including land to be developed for resi-
dential use), or in the use or occupancy
thereof, if such property and related facil-
ities arc. among other things, provided in
whole or in part with the aid of loans,
advances. grants, or contributions agreed
to be made by the Federal Government.
HUD regulations implementing Execu-
tive Order 11063 are contained in 24
CFR Part 107.
8
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..;f
.
.
COMMUNITY DEVELOP+ENT
~ 570.601 Section 109 of the Act.
(a) Section 109 of the Act requires that
no person in the United States shall on the
ground of race, color, national origin or
~ be excluded from participation in, be
denied the benefits of, or be subjected to
discrimination under, any program or
activity funded in whole or in part with
community development funds made
available pursuant to the Act. For pur-
poses of this section "program or activity"
is defined as any function conducted by an
identifiable administrative unit of the re-
cipient, or by any unit of government,
subrecipient, or private contraCtor receiv-
ing community development funds or
loans from the recipient. "Funded in
whole or in part with community develop-
ment funds" means that community devel-
opment funds in any amount in the form
of grants or proceeds from HUDguaran-
teed loans have been transferred by the
r,apient or a subrecipient to an identifi-
able administrative unit and disbursed in a
program or activity. In subsection (b) of
this section, "recipient" means recipient as
defined in 24 CFR 1.2(f).
(b) Specific discriminatory actions pro-
hibited and corrective actions.
(1) A recipient may not, under any
program or activity to which the regula-
tions of this part may apply, directly or
through contraCtual or other arrange-
ments, on the ground of race, color,
national origin, or sex:
(i) Deny any individual any facilities.
services, fmancial aid or other benefits
provided under the program or activity.
(ii) Provide any facilities, services, fi-
nancial aid or other benefits which are
different, or are provided in a different
form, from that provided to others under
the program or activity.
(iii) Subject an individual to segregated
or separate treatment in any matter of
process related to receipt of any service or
benefit under the program or activity.
(iv) Restrict an individual in any way in
access to, or in the enjoyment of, any
advantage or p~vilege enjoyed by others
in connection with facilities, services, fi-
nancial aid or other benefits under the
program or activity.
(v) Treat an individual differently from
others in determining whether the individ-
ual satisfies any admission, enrollment,
eligibility, membership, or other require-
ment or condition which the individual
must meet in order to be provided any
facilities, services or other benefit provid-
ed under the program or activity.
(vi) Deny an individual an opportunity
to participate in a program or activity as
an employee.
(2) A recipient may not use criteria or
methods of administration which have the
. effect of subjecting persons to discrimina-
tion on the basis of race, color, national
origin, or sex. or have the effect of
defeating or substantially impairing ac-
complishment of the objectives of the
program or activity with respect to per.
sons' of a particular race, color, national
origin, or sex.
(3) A recipient, in determining the site
or location of housing or facilities provid-
ed in whole or in part with funds under
this part, may not make selections of such
site or location which have the effect of
excluding persons from. denying them the
benefits of, or subjecting them to discrimi-
nation on the ground of race, color,
national origin. or sex; or which have the
purpose or effect of defeating or substan-
tially impairing the accomplishment of the
objectives of the Act and of this section.
(4)(i) In administering a program or
activity funded in whole or in. part with
COBG funds regarding which the recipi-
ent has previously discriminated against
persons on the ground of race, color,
national origin or sex. or if there is
sufficient evidence to conclude that such
discrimination existed. the recipient must
take remedial affirmative action to over-
come the effects of prior discrimination.
The word "previously" does not exclude
current discriminalory practices.
(ii) In the absence of discrimination. a'
recipient, in administering a program or
activity funded in whole or in part with
funds made available under this part, may
take any nondiscriminatory affirmative
action necessary to ensure that the pro-
gram or activity is open to allow without
regard to race. color, national origin or
sex.
(iii) After a finding of noncompliance or
after a recipient has a' fmn basis to
conclude that discrimination has oc.
curred. a recipient sbal1 not be prohibited
by this section from taking any action
eligible under Subpart C to ameliorate an
imbalance in services or facilities provided
to any geographic area (\r specific group of
persons within its jurisdiction. where the
purpose of such action is to remedy prior
discriminatory practice or usage.
(5) Notwithstanding anything to the
contrary in this section. nothing contained
herein shall be construed to prohibit any
recipient from maintaining or constructing
separate living facilities or rest room
Published by Warren. Gorham. & Lamont, Inc.
I
09:0661
HDR RF -383
9-2~
facilities for the different sexes. Further-
more, selectivity on the. basis of sex is not
prohibited when institutional or custodial
services can properly be performed only
by a member of the same sex as the
recipients of the services.
(c) Section 109 of the Act further
provides that any prohibition against dis-
crimination on the basis of age under the
Age Diserimination Act of 1975 (42
U.S.C. 6101 et seq.) or with respect to an
otherwise qualified handicapped person as
provided in section 504 of the Rehabilita-
tion Act of 1973 (29 U.S.C. 794) shall also
apply to any program or activity funded in
whole or in part with funds made available
pursuant to the Act. HUD regulations
implementing the Age Discrimination Act
are contained in 24 CFR Part 146 and the
regulations implementing section 504 are
contained in 24 CFR Part 8.
~ 570.603 Labor standards.
Section 110 of the Act requires that all
laborers and mechanics employed by con.
tractors or subcontractors on construction
work fmanced in whole or in part with
assistance received under the Act shall be
paid wages at rates not less than those
prevailing on similar construction in the
locality as determined by the Secretary of
Labor in accordance with the Davis-Ba-
con Act. as amended (40 U.S.C. 267a-
276a-5). By reason of the foregoing re-
qnirement, the Contract Work Hours and
Safety Standards Act (40 U.S.c. 327 et
seq.) also applies. However, these require-
ments apply to the rehabilitation of resi-
dential property only if such property
contains not less than 8 units. With
respect to the labor standards specified in
this section. the Secretary of Labor has the
authority and functions set forth in Reor-
ganization Plan Number 14 of 1950 (5
U.S.c. 1332.15) and section 2 of the Act
of June 13, 1934, as amended (40 U.S.C.
276c).
~ 570.604 Environmental standards.
Section 104(g) expresses the intent that
"the policies of the National Environmen-
tal Policy Act of 1969 and other provi-
sions of law which further the purposes of
such Act (as specified in regulations issued
by the Secretary) · · · [be} most effec-
tively implemented in connection with the
expenditure of funds under" the Act. Such
other provisions of law which further the
purposes of the National Environmental
Policy Act of 1969 are specified in regula-
65
09:0662
tions issued pursuant to section 1000g) of
thc Act and containcd in 24 CFR Part 58.
Section 1000g) also provides that, in licuof
thc environmcntal protection procedures
othcrwise applicable, thc Sccretary may
undcr rcgulations providc for thc rclease
of funds for particular projects to grantees
who assumc all of thc responsibilities for
cnvironmcntal review, decisionmaking,
and action pursuant to t~e National Envi-
ronmental Policy Act of 1969, and the
other provisions of law specified by the
Secretary as described above, that would
apply to the Secretary were he/she to
undertake such projects as Federal
projects. Grantees assume such environ-
mental revicw, decisionmaking, and action
responsibilities by execution of grant
agreements with the Secretary. The proce-
dures for carrying out such environmental
responsibilities are contained in 24 CFR
Part 58.
~ 570.605 National Flood Insurance
Program.
Section 202(a) of thc Flood Disaster
Protection Act of 1973 (42 U.S.C. 4106)
provides that no Federal officer or agency
shall approve any financial assistance for
acquisition or construction purposes (as
defined under section 3(a) of said Act (42
U.S.C. 4OO(a)). one year after a communi-
ty has been formally notified of its identifi-
cation as a community containing an area
of special flood hazard, for use in any area
that has been identified by the Director of
the Federal Emergency Management
Agency as an area having special flood
hazards unless the community in which
such area is situated is then participating
in the National Flood Insurance Program.
Notwithstanding the date of HUD ap-
proval of the recipient's application (or, in
the case of grants made under Subpart D,
the date of submission of the grantee's
final statement pursuant to ~ 570.302),
funds provided under this part shall not be
elCpended for acquisition or construction
purposes in an area that has been identi-
fied by the Federal Emergency Manage-
ment Agency (FEMA) as having special
flood hazards unlcss the community in
which the area is situated in participating
in the National Flood Insurance Program
in accordance with 44 CFR Parts 59-79,
or Iess.than a year has passed since FEMA
notification to thc community regarding
such hazards; and flood insurance is ob-
tained in accordance with section 102(a)
of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4001).
I
HOUSING AND DEVlLOPMENT REPORTER
~ 570.606 Relocation, displacement and
acquisition.
(a) Uniform Relocation Act (I) The
Uniform Rclocation Assistance and Real
Property Acquisition Policies Act of 1970
(URA) (42 U.S.C. 4601) and HUD imple-
menting regulations at 24 CFR Part 42
apply to the acquisition of real property by
a State agency for an activity assisted
under this part and to the displacement of
any family, individual, busincss, nonprofit
organization or farm that results from
such acquisition. The grantee's certifica-
tion of compliance with the URA is
required in the grant agreement.
(2) An acquisition and resulting dis-
placement by a State agency is "for an
assisted activity" if it occurs on or after
the date of the initial submission of a final
statement under 24 CFR 570.302(a)(2)
(Entitlement Grants); the initial submis-
sion of an application to HUD by a unit of
general local government under
H 570.426, 570.430, or 570.435(d) that is
granted for the requested activity (HUD.
administered Small Cities Program); or
the submission of an application to HUD
by a city or urban county under ~ 570.458
that is granted for the requested activity
(UDAG). However. an acquisition or
displacement that occurs on or after the
described date is not subject to the URA if
the grantee determines that the acquisition
or displacement was not carried out for an
assisted activity, and the HUD Field
Office concurs in that determination. An
acquisition or displacement that occurs
before the described date is subject to the
URA. if the grantee or the HUD Field
Office determines that the acquisition or
displacement was carried out for the
assisted activity. The grantee may, at any
time, request a HUD determination
whether an acquisition or displacement
will be considered to be for an assisted
activity and thus subject to these regula-
tions. To be eligible for relocation assis-
tance, however, a person must also meet
the eligibility criteria in 24 CFR Part 42.
(b) RGidennal anti displacement and
relocation assistance plan.. Under section
104(d) of the Act, each grantee must
adopt. make public and certify that it is
following a residential antidisplacement
and relocation assistance plan providing
one-for-one replacement units (paragraph
(b)(1) of this section), and relocation
assistance (paragraph (b)(2) of this sec-
tion). The plan must also indicate the
steps that will be taken consistent with
other goals and objectives of this part to
Published by Warren, Gorham, & Lamont, Inc.
minimize the displacement of persons
from their homes as a result of any
activities assisted under this part.
(l) One-fo,-one replQcement unil.$. (i)
All occupied and vacant occupiable
low/moderate-income dwelling units that
are demolished or converted to a use other
than as low/moderate-income dwelling
units as a direct result of an activity
assisted under this part must be replaced
by governmental agencies or private devel-
opers with low/moderate-income dwelling
units. Replacement low/moderate-income
dwelling units may include public hous-
ing, or existing housing receiving Section 8
project-based assistance under the United
States Housing Act of 1937. The replace-
ment low/moderate-income dwelling units
must be provided within three years of the
commencement of the demolition or reha-
bilitation related to the conversion. and
must meet the following requirements:
(A) The units must be located within
the grantee's jurisdiction.
(B) The units must be sufficient in
number and. size to house at least the
number of occupants that could have been
housed in the units that are demolished or
converted. The number of occupants that
maybe housed in units shall be deter-
mined in accordance with local housing
occupancy codes.
(C) The units must be provided in
standard condition. Replacement
low/moderate-income dwelling units may
include units that have been raised to
standard from substandard condition.
(D) The units must be designed to
remain low/moderate-income dwelling
units for at least 10 years from the date of
initial occupancy.
(ii) Before obligating or expending
funds provided under this part for any
activity that will directly result in the
demolition of low/moderate-income
dwelling. units or the conversion of
low/moderate-income dwelling units to
another use, the grantee must make pub-
lic, and submit the following information
in writing to HUD:
(A) A description of the proposed assis.
ted activity;
(B) The general location on a map and
approximate number of dwelling units by
size (number of bedrooms) that will be
demolished or converted to a use other
than for lew/moderate-income dwelling
units as a direct result of the assisted
activity;
(C) A time schedule for the commence-
ment and completion of the demolition or
conversion;
66
. .' C?MMUNITY DEVELOprENT
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.
(D) The generaJ location on a map and
approximate number of dwelling units by
size (number of bedrooms). that will be
provided as. .replacement dwelling units;
(E) The source of funding and a time
schedule for the provision of replacement
dwelling units;:..:::.. .
. . (F). The basis for. concluding that each
replacement dwelling unit ~ill r~ain a
low/moderate-income dwelling Unit for at
least 10 years from the date of initial
OCCupancy... _ ..' .
: (iii)(A) The requirements of para~raph
(b)(l) of this section do not apply If the
HUD Field Office determines. based upon
objective data, that there is an adequate
supply of vacant low/moderate-income
dwelling units in standard condition avail-
able ona nondiscriminatory basis within
the grantee's jurisdiction. In making t~is
determination, the HUD Field Office will
consider the housing vacancy rate for the
jurisdiction, the number of vacant
low/moderate-income dwelling units in
the jurisdiction (excluding units that will
be demolished or converted) and the
number of eligible families on waiting . lists
for housing assisted under the United
States Housing Act of 1937 in thejurisdic.
tion.
. (B) The HUD Field Office may consid-
er the supply of vacant low/moderate-
income dwelling units in a standard condi-
tion available on a nondiscriminatory ba-
sis in an area that is larger than the
grantee's jurisdiction. Such additional
dwelling units shall be considered if the
HUD Field Office determines that the
units would be suitable to serve the needs
of the low-and moderate income house-
holds that could be served by the
low/moderate-income dwelling units that
are to be demolished or converted to
another use. The HUD Field Office must
base this determination or geographic and
demographic factors, such as location and
access to places of employment and to
other facilities.
(C) The grantee must submit a request
for a determination under paragraph
(b)(1 )(iii) of this section directly to the
HUD Field Office.
(2) Relocation assistance. (i) Each low-
or moderate-income household that is
displaced by demolition or by the conver-
sion of a low/moderate income dwelling
unit to another use as a direct result of an
activity assisted under this part shall be
provided with relocation assistance. The
low- or moderate-income household may
elect to receive relocation assistance de-
scribed at 24 CFR Part 42 (HUD's regula-
.
tions implementing the URA), or may
elect to receive the. following relocation
assistance:
(A) The relocation assistance described
at 24 CPR Part 42. Subpart C (General
Relocation Requirements) and Subpan 0
(Payment for Moving and Related Ex-
penses). Relocation notices must be issued
consistent with, and in the manner pre-
scribed under, 24 CPR 42.203. The defini-
tion of "comparable replacement dwell-
ing" used in 24 CPR Part 42 is modified
as described in paragraph (b)(3)(i) of this
section. Displaced households provided
\\.jith replacement housing assistance under
paragraph (b)(2)(i)(C) of this section, in
the form of a cenificate or housing vouch-
er under Section 8 of the United States
Housing Act of 1937, must be provided
referrals to comparable replacement
dwelling units whose owners are willing to
participate in the housing voucher or
certificate program. The grantee shall
advise tenants of their rights under the
Federal Fair Housing Law (Title VIII)
and of replacement housing opportunities
in such a manner that, whenever feasible,
they will have a choice between relocating
within their neighborhoods and other
neighborhoods consistent with the grant-
ee's responsibility to atrumatively further
fair housing.
(B) The reasonable and necessary cost
of any security deposit required to rent tbe
replacement dwelling unit, and credit
checks required to rent or purchase the
rep1ac:ement dwelling unit; and
(C) Replacement housing assistance.
Households are eligible to receive one of
the following forms of replacement hous-
ing assistance:
(1) Each household must be offered
compensation designed to ensure that, for
a five-year period, the displaced household
will not bear, after relocation. a ratio of
shelter COSts to income that exceeds 30
percenL Such compensation shall be ei-
ther:
(1) A Certificate or housing voucher for
rental assistance provided through the
local Public Housing Agency under Sec-
tion 8 of the United States Housing Act of
1937; or:
(il) Cash rental assistance equal to 60
times the amount that is obtained by
subtracting 30 percent of the displaced
household's monthly gross income (with
such adjustments as the grantee may deem
appropriate) from the lesser of: the month-
ly cost of rent and utilities at a comparable
replacement dwelling unit or the monthly
cost of rent and utilities at the decent. safe
Published by Warren, Gorham. & Lamont, Inc.
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09:0663
HDR RF~388
12-5-88
and sanitary replacement dwelling to
which the household relocates. The grant-
ee may provide the cash payment in either
a lump sum or in installments. The grant-
ee may at its discretion offer the house-
hold a choice between the cenifi-
catelhousing voucher or cash rental assis-
tance.
(2) If the household purchases an inter-
est in a housing cooperative or mutual
housing association and occupies a decent,
safe and sanitary unit in the cooperative or
association, the household may elect to
receive a lump sum payment. This lump
sum payment shall be equal to the capital-
ized value of 60 monthly installments of
the amount that is obtained by subtracting
30 percent of the displaced household's
monthly gross income (with such adjUSt-
ments as the grantee may deem appropri-
ate) from the monthly cost of rent and
utilities at a comparable replacement
dwelling unit. To compute the capitalized
value, the installments shall be discounted
at the rate of interest paid on passbook
savings deposits by a federally-insured
bank or savings and loan institution con-
ducting business within the grantee's juris-
diction. To the extent necessary to mini-
mize hardship to the household, the grant-
ee shall, subject to appropriate safeguards,
issue a payment in advance of the pur-
chase of the interest in the housing cooper-
ative or mutual housing association.
(ii) Eligibility for relocation assistance.
(A) A low- or moderate-income household
that is required to move as a direct result
of demolition or conversion- of a
low/moderate income dwelling unit to
another use. is eligible for relocation assis"
tance under paragraph (b)(2) of this sec-
tion if:
(I) The household is required to move
from the dwelling unit on or after the date
that the owner submits a request to the
grantee for financial assistance that is later
approved for the requested activity. (This
applies to dwelling units owned by a
person other than a Federal or State
agency, as defined under the URA).
(2) The household is required to move
from the dwelling unit on or after the date
of the initial submission of a final state-
ment under 24 CPR 570.302(a)(2) (Enti-
tlement Grants); the initial submission of
an application to HUD by a unit of
generaJ local government under
~~ 570.426, 570.430, or 570.435(d) this is
granted for the requested activity (HUD
administered Small Cities Program); or
the submission of an application to HUD
by a city or urban county under ~ 570.458
23
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that is granted for the requested activity
(UDAG). (This applies to dwelling units
owned by a Federal or State agency as
defined under the URA.)
(B) If the displacCment occurs on or
after the'. appropriate. date described in
paragraph (b)(2)(ii)(A) of this sectio~, the
low- or moderate-income household IS not
eiigible for relocation assistance if:
(1) The household is evicted for cause;
(2) The household moved into the prop-
erty on or after the date described in
paragraph (b)(2)(ii)(A) of this section,
after receiving written notice of the ex-
pected displacement; or
(3) The grantee determines that the
displacement was not a direct result of the
assisted activity, and the HUD office
concurs in that determination.
(C) If the displacement occurs before
the appropriate date described in para-
graph (b)(2)(ii)(A) of this section, the low-
or moderate-income household is eligible
for relocation assistance if the grantee or
HUD determines that the displacement
was a direct result of an activity assisted
under this part.
(3) Definitions. For the purpose of
para~raph (b) of this section:
(i) "Comparable replacement dwelling
unit" means a dwelling unit that:
(A) Meets the criteria of 24 CFR
42.2(c)(I) through (4); and
(B) Is available at a monthly cost for
rent plus estimated average monthly utili-
ty costs that does not exceed 30 percent of
the household's average gross monthly
income (with such adjustments to income
as the grantee may deem appropriate)
after taking into account any rental assis-
tance the household would receive. Where
a certificate or housing voucher is provid-
ed to a household under paragraph
(b)(2)(i)(C)(I)(i) of this section, the dwell-
ing unit must be available to the house-
hold at a monthly cost for rent and
estimated average monthly utility cost
that does not exceed the Fair Market Rent
or the payment standard, respectively.
[Ii) "Decent. safe and sanitary dwelling"
means a decent. safe and sanitary dwelling
as defmed in 24 CFR.42.2(e).
(iii) "Low/moderate income dwelling
unit" means a dwelling unit with a market
rental (including utility costs) that does
not exceed the applicable Fair Market
Rent (FMR)for existing housing and
moderate rehabilitation established under
24 CFR Pan 888.
(iv) "Occupiable dwelling unit" means a
dwelling unit that is in a standard condi-
I
..~.:':.~~~~i~'~: '~;'Z::~'\~~i~i'7: 'l~~i~~"~: ~ . :.
HOUSING AND DEVIfOPMENT REPORTE~li~~r~:' ~
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=.. ...": r. .,.
""'-.--. ~
tion. or is in a substandard condition, but
is suitable for rehabilitation.
(v) "Standard condition" and "substan-
dard condition suitable for rehabilitation. "
If the grantee: has a HUD-approved.Hous-
ing Assistance Plan, the definitions of
"standard condition" and "substandard
condition suitable for rehabilitation" es-
tablished in the plan will apply. If the
grantee: does not have a HUD-approved
Housing Assistance Plan, the grantee:
must establish and make public its defini-
tion of these terms consistent with the
requirements of ~ 570.306(e)(I).
. (4) Effective date. For all grants except
those made under Subpan D of this part
(Entitlement Grants), the provisions of
paragraph (b) of this section are applicable
to grants made. ou. or after October 1,
1988. For grants made under Subpart D,
these provisions will govern all activities
for which funds are first obligated by the
grantee on or after the date the fust grant
is made after September 30, 1988, without
regard to the source year of the funds used
for the activity,
(c) Section J04(k) relOC/ltion require-
ments. Section 104(k) of the Act requires
that reasonable relocation assistance be
provided to persons (families. individuals,
businesses, nonprofit organizations, or
farms) displaced (LE.. moved permanently
and involuntarily) as a result of the use of
assistance received under this part to
acquire or substantially rehabilitate prop-
eny. If such displacement is subject to
paragraph (a) or (b) of this section, above,
this paragraph does not apply. The grant-
ee must develop, adopt and provide to
persons to be displaced a written notice of
the relocation assistance for which they
are eligible. The minimum requirements
for such assistance under the UDAG
Program are described at ~ 570.457(b).
Under CDBG programs. persons entitled
to assistance under this paragraph must be
provided relocation assistance, including
at a- minimum:
(1) Reasonable moving expenses;
(2) Advisory services needed to help in
relocating. The grantee shall advise tcn-
ants of their rights under the Federal Fair
Housing Law (Title VIm and of replace-
ment housing opportunities in such a
manner that. whenever feasible, they will
have a choice between relocating within
their neighborhoods and other neighbor-
hoods consistent with the grantee's re-
sponsibility to affirmatively funher fair
housing; and
(3) rmancial assistance sufficient to
enable any person displaced from his or
Published by Warren, Gorham, & Lamont Inc.
her dwelling to lease and occupy a suit-
able. decent, safe and sanitary replacement
dwelling where the cost of rent and utili-
ties does not exceed 30 percent of the
household's gross income.
(d) Optional relocation assistance. Under
section 105(a)(II) of the Act, the grantee
may provide relocation payments and
other relocation assistance for individuals,
families. businesses, nonprofit organiza-
tions and farms displaced by an activity
not subject to paragraphs (a), (b) or (c) of
this section. The grantee may also provide
relocation assistance to persons covered
under paragraphs (a), (b) or (e) of this
section beyond that required. Unless such
assistance is provided pursuant to State or
local law, the grantee must provide the
assistance only upon the basis of a written
determination that the assistance is appro-
priate and must adopt a written policy
available to the public that describes the
relocation assistance that the grantee has
elected to provide and that provides for
equal relocation assistance within each
class of displacees.
(e) Appeals. If a person disagrees with
the grantee's determination concerning
the person's eligibility for, or the amount
of a relocation payment under this section,
the person may file a written appeal of
that determination with the grantee. The
appeal procedure to be followed are de-
scribed in 24 CFR 42.10. A low- or
moderate-income household that has been
displaced from a dwelling may file a
written request for review of the grantee
decision. to the HUD Field Office.
(f) Responsibility of grantee. (1) The
grantee is responsible for ensuring compli-
ance with the requirements of this section,
notwithstanding any third party's contrac-
tual obligation to the grantee to comply
with the provisions of this part.
(2) The cost of assistance required
under this section may be paid from local
public funds, funds provided under this
pan, or funds available from other'
sources.
(3) The grantee must maintain records
in sufficient detail to demonstrate compli-
ance with the provisions of this section.
(g) Displacement. For the purposes of
this section, a "displaced person" is a
person that is required to move perma-
nently and involuntarily and includes a
residential tenant who moves from the real
property if:
(1) The tenant has not been provided
with a reasonable opponunity to lease and
occupy a suitable, decent. safe and sani-
tary dwelling in the same building or in a
24
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.
.
COMMUNITY DEVELOPMENT
I
nearby building on the real property fol-
lowing the completion of the assisted
activity at a monthly rent and estimated
average cost for utilities that does not
exceed the greater of:
(i) 30 percent of the tenant household's
average monthly gross income; or
(ii) The tenant's monthly rent and
average cost for utilities before:
(A) The date that the owner submits a
request to the grantee for financial assis-
tance that is later approved for the re-
quested activity. (This applies to dwelling
units owned by a person other than a
Federal or State agency. as defined under
the URA); or
(B) The date of the initial submission of
a. final statement under ~ 570.302(a)(2)
(Entitlement Grants); the initial submis-
sion of an application to HUD by a unit of
general local government under 9 570.426,
570.430, or 570.435(d) that is granted for
the requested activity (HUD administered
Small Cities Program); or the submission
of an application to HUD by a city or
urban county under ~ 570.458 that is
granted for the requested activity
(UDAG). (This applies to dwelling units
owned by a Federal or. State agency as
dermed under the URA); or
(2) The tenant is required to move to
another dwelling in the real property but
is not reimbuned for all actual reasonable
out-of-pocket costs incurred in connection
with the move; or
(3) The tenant is required to move to
relocate temporarily and:
(i) Is not reimbuned for all reasonable
out-of-pocket expenses incurred in con-
nection with the temporary relocation,
including moving costs and any increased
rent and utility costs; or
(ii) Other conditions of the temporary
relocation are not reasonable.
~ 570.607 Employment and contracting
opportunities.
(a) Grantees shall comply with Execu-
tive Order 11246, as amended by Execu-
tive Order 12086, and the regulations
issued punuant thereto (41 CFR Chapter
60) which provide that no person shall be
discriminated against on the basis of race,
color, religion, sex, or national origin in all
phases of employment during the perfor-
mance of Federal or federally assisted
construction contracts. As specified in
Executive Order 11246 and the imple-
menting regulations, contracton and sub-
contracton on Federal or federally assis-
ted construction contracts shall take aflir-
mative action to ensure fair treatment in
employment, upgrading. demotion or
transfer, recruitment or recruitment ad-
venising. layoff or termination. rates of
pay, or other fOnDS of compensation and
selection for training and apprenticeship.
(b) Section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.C.
1701u) requires, in connection with the
planning and carrying out of any project
assisted under the ACt, that to the greatest
extent feasible opportunities for training
and employment be given to low and
moderate income persons residing within
the unit of local government or the metro-
politan area (or nonmetropolitan county)
as determined by the Secretary. in which
the project is located, and that contracts
for work in connection with the project be
awarded to eligible business concerns
which are located in, or owned in substan-
tial part by persons residing in the same
metropolitan area (or nonmetropolitan
county) as the project. Grantees shall
adopt appropriate procedures and require-
ments to assure good faith efforts toward
compliance with the statutory directive.
HUD regulations at 24 CFR Part 135 are
not applicable to activities assisted under
this part but may be referred to as guid-
ance indicative of the Secretary's view of
the statutory objectiv~ in other contexts.
~ 570.608 Lead-based paint.
(a) Prohibition against the use of lead-
based painL Section 401(b) of the Lead-
Based Paint Poisoning Prevention Act (42
U.S.c. 4831(b)) directS the Secretary to
prohibit the use of lead-based paint in
residential structures constructed or reha-
bilitated with Federal assistance. Such
prohibitions are contained in 24 CFR Part
35, Subpart B, and are applicable to
residential structures constructed or reha-
bilitated with assistance provided under
this part.
(b) Notification of htlZ/lrds of lead-based
paint poisoning. (1) The Secretary has
promulgated requirements regarding noti-
fication to purchasers and tenants of
HUD-associated housing constructed pri-
or to 1978 of the hazards of lead-based
paint poisoning at 24 CFR Part. 35,
Subpart A. This paragraph is promulgated
punuant to the authorization granted in
24 CFR 35.5(c) and supersedes, with
respect to all housing to which it applies,
the notification requirements prescribed
by Subpart A of 24 CFR Part 35.
(2) For properties constructed prior to
1978, applicants for rehabilitation assis-
Published by Warren, Gorham, & Lamont. Inc.
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09:0665
HDR RF -388
12-5-88
tance provided under this part and tenants
or purchasen of properties owned by the
grantee or its subrecipient and acquired or
rehabilitated with assistance provided un-
der this part ~hall be notified:
(i) That the property may contain lead-
based paint;
(ii) Of the hazards of lead-based paint;
(iii) Of the symptoms and treatment of
lead-based poisoning;
(iv) Of the precautions to be taken to
avoid lead-based. paint poisoning (includ-
ing maintenance and removal techniques
for eliminating such hazards);
(v) Of the advisability and availability of
blood lead level screening for children
under seven years of age; and
(vi) That in the event of lead-based
paint is found on the property, appropriate
abatement procedures may be undertaken.
(c) Elimination of lead-based paint haze
ards. The purpose of this paragraph is to
implement the provisions of section 302 of
the Lead-Based Paint Poisoning Preven-
tion Act, 42 U.S.C. 4822, by establishing
procedures to eliminate as far as practica-
ble the hazards due to the presence of
paint which may contain lead and to
which children under seven yean of age
may be exposed in existing housing which
is rehabilitated with assistance provided
under this part. The Secretary has promul-
gated requirements regarding the elimina-
tion of lead-based paint hazards in HUD-
associated housing at 24 CFR Part 35.
Subpart C. This paragraph is promulgated
pursuant to the authorization granted in
24 CFR 35.24(b)(4) and supercedes, with
respect to all housing to which it applies,
the requirements prescribed by SubpartC
of 24 CFR Part 35.
(1) A.pplicability. This paragraph applies
to the rehabilitation of applicable surfaces
in existing housing which is assisted under
this part. The following activities assisted
under the Community Development
Block Grant program are not covered by
this paragraph:
(i) Emergency rcpain (not including
lead-based paint-related emergency re-
pain);
(ii) Weatherization;
(iii) Water or sewer hook-ups;
(iv) Installation of security devices;
(v) Facilitation of tax exempt bond
issuances which provide funds for rehabili-
tation;
(vi) Other similar types of single-pur-
pose programs that do not include physi-
cal repain or remodeling of applicable
surfaces (as defined in 24 CFR 35.22) of
residential structures; and
25
09:0666
(vii) Any non-single purpose rehabilita-
tion that does not involve applicable sur-
faces (as defined in 24 CFR 35.22) that
does not exceed $3,000 per unit.
(2) Defirritions.
"Applicable surface." All intact and
nonintact interior and exterior painted
surfaces of a residential structure.
"Chewable surfaces." All chewable pro-
truding painted surfaces up to five feet
from the floor or ground, which are
readily accessible to children under seven
years of age, e.g., protruding comers,
windowsills and frames, doors and frames,
and other protruding woodwork.
"Defective paint surface. Paint on appli-
cable surfaces that is cracking, scaling,
chipping, peeling or loose."
"Elevated blood lead level or EBL"
Excessive absorption of lead. that is. a
confirmed concentration of lead in whole
blood of 2S IV'dl (micrograms of lead per
deciliter of whole blood) or greater.
"Lead-based paint surface. " A paint
surface, whether or not defective, identi-
fied as having a lead. content greater than
or equal to I mg/cm2.
(3) Inspection and Testing-(i) Defective
paint surfaces. The grantee shall inspect
for defective paint surfaces in all units
constructed prior to 1978 which are occu-
pied by families with children under seven
years of age and which are proposed for
rehabilitation assistance. The inspection
shall occur at the same time the property
is being inspected for rehabilitation. De-
fective paint conditions shall be included
in the work write-up. for the remainder of
the rehabilitation work.
(ii) Chewable surfaces. The grantee shall
be required to test the lead content of
chewable surfaces if the family residing in
a unit, constructed prior to 1978 and
receiving rehabilitation assistance, in-
cludes a child under seven years of age
with an identified EBL condition. Lead
. content shall be tested by using an X-ray
fluorescence analyzer (XRF) or other
method approved by HUD. Test readings
of hngicm2 or higher using an XRF shall.
be considered positive for presence oflead-
based . paint.
(iii) Abatement without testing. In lieu of
the procedures set forth in paragraph
(c)(3)(ii) of this section. in the case of a
residential structure constructed prior to
1978, the grantee may forgo testing and
abate all applicable surfaces in accordance
with the methods set out in 24 CFR
35.24(b)(2)(ii).
(4) Abatement Actions. (I) For inspec-
tions performed under ~ 570.608(c)(3)(i)
and where defective paint surfaces are
found, treatment shan be provided to
1
HOUSING AND DEVEi~OPMENT REPORTER -
defective areas. Treatment shall be per-
formed before final inspection and approv-
al of the work.
(ii) For testing performed under
~ S70.608(c)(3)(ii) and where interior
chewable surfaces are found to contain
lead-based paint, all interior chewable
surfaces in any affected room shall be
treated. Where exterior chewable surfaces
are found to contain lead-based paint, the
entire exterior chewable surface shall be
treated. Treatment shall be performed
before final inspection and approval of the
work;
(iii) When weather prohibits repainting
exterior surfaces before final inspection,
the grantee may permit the owner to abate
the defective paint or chewable lead-based
paint as required by this section and agree
to repaint by a specified date. A separate
inspection is required.
(5) Abatement methods. At a minimum.
treatment of the defective areas and chew-
able lead-based paint surfaces shall consist
of covering or removal of the painted
surfaces as described in 24 CFR
35.24(b )(2)(ii).
(6) Funding for inspection. testing and
abatemenL Program requirements and lo-
cal program design will determine wheth-
er the cost of inspection, testing or abate-
ment is to be borne by the own-
er / developer and the grantee.
(7) Tenant protection. The own-
er / developer shall take appropriate action
to protect tenants from hazards associated
with abatement procedures. Where neces-
sary, these actions may include the tempo-
rary relocation of tenants during the
abatement process. The owner/developer
shall notify the grantee of all such actions
taken.
(8) Records. The grantee shall keep a
copy of each inspection and/or test report
for at least three years.
(9) Monitoring and enforcement. HUD
field office monitoring of rehabilitation
programs includes reviews for compliance
with applicable program requirements for
lead-based painL The CPD Field Monitor-
ing Handbook which currently includes
instructions for monitoring lead-based
paint requirements will be amended as
appropriate. In cases of noncompliance,
HUD may impose conditions or sanctions
on grantees to encourage prompt compli-
ance.
(10) Compliance with other program
requirementS. Federal. State and local
laws. .
(i) Other program requirementS. To the
extent that. assistance from any of the
programs covered by this section is used in
conjunction with other HUD program
gublisl'1ed by Warren. Gorham. & Lamont, Inc.
,
i
assistance which have lead-based paint
requirements which may have more or leSS
stringent requirements, the more stringent
requirements win prevail.
(ii) BUD responsibility. If HUD deter-
mines that a State or local law. ordinance.
code or regulation provides for lead.based
paint testing or hazard abatement in a
manner which provides a level of protec-
tion from the hazards of lead-based paint
poisoning at least comparable to that
provided by the requirements of this sec-
tion and that adherence to the require-
ments of this subpart would be duplicative
or otherwise cause inefficiencies, HUD
may modify or waive the requirements of
this section in such manner as may be
appropriate to promote efficiency while
ensuring such comparable level of protec-
tion.
(iii) Grantee responsibility. Nothing in
this section is intended to relieve any
grantee in the programs covered by this
section of any responsibility for compli-
ance with State or loca1laws, ordinances.
codes or regulations governing lead-based
paint testing or hazard abatement.
(iv) Disposal of lead-based paint debris.
Lead-based paint and defective paint de-
bris shall be disposed of in accordance
with applicable Federal, State or local
requirements. (See e.g.. 40 CFR Parts 260
through 271.)
€.
~
~ 570.609 Use of debarred, suspended
or ineligible contractors or
subrecipients.
Assistance under this part shall not be
used directly or indirectly to employ,
award contracts to, or otherwise engage
the services of, or fund any contractor or
subrecipient during any period of debar-
ment, suspension, or placement in ineligi-
bility status under the provisions of 24
CFR Part 24.
~ 570.610 Uniform administrative
requirements and cost principles.
The recipient, its agencies or instrumen-
talities. and subrecipients shall comply
with the policies. guidelines. and require-
ments of 24 CFR Part 85 and OMB
CircuJars A-87, A-1I0, A-Ill, and A-1282
implemented at 24 CFR Part 44), as
applicable, as they relate to the acceptance
'See footnote I for ~ 570.200(a)(5).
.
26
COMMUNITY DEVELOPMENT
I
and use of Federal funds under this pan.
The applicable sections of 24 CFR Pan 85
and OMB Circular A-110 are set fonh at
~ 570.502.
~ 570.611 Conflict of interest.
.::.,,:~
'f
.f"
--
(a) Applicability. (I) In the procurement
of supplies, equipment, construction, and
services by recipients, and by subrecipients
(including those specified at ~ 570.204(c)).
the conflict of interest provisions in 24
CFR 85.36 and OMB Circular A-I 10,
respectively, shall apply.
(2) In all cases not governed by 24 CFR
85.36 and OMB Circular A-IIO. the pro-
visions of this section shall apply. Such
cases include the acquisition and disposi-
tion of real propeny and the provision of
assistance by the recipient. by. its subreci-
pients, or to individuals, businesses or
other private entities under eligible activi-
ties which authorize such assistance (e.g.,
rehabilitation. preservation, and other im-
provements or private propenies of facili-
ties pursuant to ~ 570.202, or grants, loans
and other assistance to businesses, individ-
uals and other private entities pursuant to
~ 570.203. ~ 570.204 or ~ 570.455).
(b) Conflicts prohibited. Except for the
uSe of CDBG funds to pay salaries and
other related administrative or personnel
costs, the general rule is that no persons
described in paragraph (c) of this section
who exercise or have exercised any func-
tions or responsibilities with respect to
CDBG activities assisted under this part
or who are in a position to panicipate in a
decision making process or gain inside
information with regard to such activities,
may obtain a personal or financial interest
or benefit from a CDBG assisted activity,
or have an interest in any contract, sub-
contract or agreement with respect there-
to,. or the proceeds thereunder. either for
themselves or those with whom they have
family or business ties, during their tenure
or for one year thereafter. For the UDAG
program, the above restrictions shall apply
to all activities that are a pan of the
UDAG project, and shall cover any such
interest or benefit during. or at any time
after. such person's tenure.
(c) Persons covered.. The conflict of
interest provisions of paragraph (b) of this
section apply to any person who is an
employee. agent, consultant, officer, or
elected official or appointed official of the
recipient, or of any designated public
agencies. or subrecipients which are re-
ceiving funds under this pan.
~
.,,*,
.4<.:
-~
-
(d) Exceptions: threshold requirements.
Upon the written request of the recipient.
HUD may grant an exception to the
provisions of paragraph (b) of this section
on a case-by-ca.se basis when it determines
that such an exception will serve to funher
the purposes of the Act and the effective
and efficient administration of the recipi-
ent's program or project. An exception
may be considered only after the recipient
has provided the following:
(1) A disclosure of the nature of the
conflict, accompanied by an assurance
that there has been public disclosure of the
conflict and a description of how the
public disclosure was made; and
(2) An opinion of the recipient's attor-
ney that the interest for which the excep-
tion is sought would not violate State or
'Iocal law.
(e) Factors to be considered for excep-
tions. In determining whether to grant a
requested exception after the recipient has
satisfactorily met the requirements of
paragraph (d) of this section, HUD shall
consider the cumulative effect of the fol-
lowing factors. where applicable:
(I) Whether the exception would pro-
vide a significant cost benefit or an essen-
tial degree of expertise to the program or
project which would otherwise not be
available;
(2) Whether an opponunity was provid-
ed for open competitive bidding or negoti-
ation;
(3) Whether the person affected is a
member. of a group or class of low- or
moderate-income persons intended to be
the beneficiaries of the assisted activity,
and the exception will permit such person
to receive generally the same interests or
benefits as are being made available or
provided to the group or class;
(4) Whether the affected person has
withdrawn from his or her functions or
responsibilities, . or the decisionmaking
process with respect to the specific assisted
activity in question;
(5) Whether the interest or benefit was
present before the affected person was in a
position as described in paragraph (b) of
this section;
(6) Whether undue hardship will result
either to the recipient or the person
affected when weighed against the public
interest served by avoiding the prohibited
conflict; and
(7) Any other relevant considerations.
Published by Warren. Gorham. & Lamont. Inc.
I
09:0667
HDR RF-388
12-5-88
~ 570.612 Executive Order 12372.
(a) GeneraL Executive Order 12372.
Intergovernmental Review of Federal Pro-
grams, and the Depanment's implement-
ing regulations at 24 CFR Pan 52. allow
each State to establish its own process for
review and comment on proposed Federal
financial assistance programs.
(b) Applicability. Executive Order 12372
applies to the CDBG Entitlement pro-
gram and the UDAG program. The Exec-
utive Order applies to all activities pro-
posed to be assisted under UDAG, but it
applies to the Entitlement program only
where a grantee proposed to use funds for
the planning or construction (reconstruc-
tion or installation) of water or sewer
facilities. Such facilities include stonn
sewers as well as all sanitary sewers. but
do not include water and sewer lines
connecting a structure to the lines in the
public right-of-way or easement. It is the
responsibility of the grantee to initiate the
Executive Order review process if it pro-
poses to use its CDBG or UDAG funds
for activities subject to review.
Subpart M-Loan Guarantees
~ 570.700 Eligible applicants.
(a) Units of general local government
entitled to' receive a grant under section
106(b) of the Act (metropolitan cities and
urban counties) may apply for loan guar_
antee assistance under this subpan.
(b) Public agencies may be designated
by eligible units of general local govern-
ment to receive a loan guarantee on notes
or other Obligations issued by the public
agency in accordance with this subpan. In
such case the applicant unit of general
local government shall be required to
pledge its current and future grants under
the Act as security for the notes or other
obligations issued by the public agency.
~ 570.701 Eligible activities.
Loan guarantee assistance under this
subpart may be used for the following
activities undenaken by the unit of general
local government or its designated public
agency provided such activities meet the
requirements of ~ 570.200. However, guar_
anteed loan funds may not be used to
reimburse the program account or letter of
credit for costs incurred by the unit of
general local government or designated
public agency and paid with other CDBG
funds.
27
09:0668
(a) Acquisition of improved or unim-
proved real property in fee or by long-
term lease, including acquisition for eco-
nomic development purposes.
(b) Rehabilitation of real property
owned or acquired by the unit of general
local government or its designated public
agency.
(c) Payment of interest on obligations
guaranteed under this subpart.
(d) Relocation payments and assistance
for individuals, families. businesses. non-
profit organizations and farm operations
displaced as a result of activities financed
with loan guarantee assistance.
(e) Clearance. demolition and removal,
including movement of structures to other
sites, of buildings and improvements on
real property acquired or rehabilitated
pursuant to paragraphs (a) and (b) of this
section.
(f) Site preparation, including construc-
tion. reconstruction, or installation of
public improvements, utilities. or facilities
(other than buildings) related to the rede-
velopment or use of the real property
acquired or rehabilitated pursuant to para-
graphs (a) and (b) of this section.
(g) Payment of issuance. underwriting,
servicing. and other costs associated with
private sector financing of notes or other
obligations guaranteed under this subpart.
(h) Housing rehabilitation eligible under
S 570.202.
(i) Activities eligible under S 570.203.
(j) Community economic development
projects eligible under S 570.204.
(k) Acquisition, construction, recon-
struction. rehabilitation. or installation of
public facilities (except for buildings for
the general conduct of government). site
improvements. and utilities. for an eco-
nomic development purpose.
9 570.702 Application requiremeltts.
(a) Presubmission requirements. (1) Pri-
or to submission of an application for loan
guarantee assistance to HUD, the appli-
cant must comply with the presubmission
requirements specified in S 570.301 with
res)5ecrt to the activities proposed for loan
guarantee assistance.
(2) If an application for loan guarantee
assistance is simultaneous with the appli-
cant's submission for its entitlement grant,
the applicant may use the statement of
community development objectives and
projected use of funds prepared for its
annual grant pursuant to S 570.301 by
including and identifying the activities to
I
HOUSING AND DEVELOPMENT REPORTER
I
be undertaken with the guaranteed loan
funds.
(b) Submission requirements. An appli-
cation for loan guarantee assistance shall
be submitted to the appropriate HUD
field office and shall consist of the follow-
ing:
(1) A copy of the applicant's final
statement of community development ob-
jectives and projected use of guaranteed
loan funds.
(2) A description of how each of the
activities to be carried out with the guar-
anteed loan funds meets one of the criteria
in 9 570.208.
(3) A schedule for repayment of the
loan which identifies the sources of repay-
ment.
(4) A certification providing assurance
that the applicant possesses legal authority
to make the pledge of grants required
under S 570. 703(b )(2).
(5) A certification providing assurance
that the applicant has made efforts to
obtain financing for activities described in
the application without the use of the loan
guarantee, the applicant will maintain
documentation of such efforts for the term
of the loan guarantee, and the applicant
cannot complete such financing consistent
with the timely execution of the program
plans without such guarantee.
(6) Certifications required pursuant to
S 570.303. For the purposes of this re-
quirement, the terms "grant" and
"CDBG" in such certifications shall also
mean guaranteed loan.
(c) EcollOmic feasibility and financial
risk. The Secretary will make no determi-
nation with respect to the economic feasi-
bility of projects proposed to be funded
with the proceeds of guaranteed loans;
such determination is the responsibility
whether a loan guarantee constitutes an
acceptable financial risk, the Secretary will
consider the applicant's current and future
entitlement block grants as the primary
source of loan repayment. Approval of a
loan guarantee under this subpart is not to
be construed, in any way, as indicating
that HUD has agreed to the feasibility of a
project beyond recognition that pledged
grant funds should be sufficient to retire
the debt.
(d) BUD rrtiew and approWlI of applica-
tions. (I) HUD will normally accept the
grantee's certifications. The Secretary reo
serves the right, however, to consider
relevant information which challenges the
certifications and to require additional
information or assurances from the grant-
ee as warranted by such information.
Published by Warren, Gorham, & Lamont. Inc.
(2) The field office shall review the
application for compliance with require-
ments specified in this subpart and for-
ward the application together with its
recommendation for approval or disap-
proval of the requested loan guarantee to
HUD Headquarters.
(3) The Secretary may disapprove an
application. or may approve loan guaran-
tee assistance for an amount less than
requested. for any of the following rea-
sons:
(i) The Secretary determines that the
guarantee constitutes an unacceptable fi-
nancial risk. Factors that will be consid-
ered in assessing financial risk shall in-
clude, but not be limited to. the following:
(A) The length of the proposed repay-
ment period;
(B) The ratio of expected annual debt
service requirements to expected annual
grant amount;
(C) The applicant's status as a metro-
politan city or urban county during the
proposed repayment period; and
(D) The applicant's ability to furnish
adequate security pursuant to
S 570.703(b).
(ii) The guarantee requested exceeds the
maximum loan amount specified under
S 570.703(a).
(iii) Funds are not available in the
amount requested.
(iv) The applicant's performance does
not meet the standards prescribed in
Subpart O.
(v) Activities to be undertaken with the
guarallteed loan funds are not listed as
eligible under S 570.701(a) through (k).
(vi) Activities to be undertaken with the
guaranteed loan funds do not meet the
criteria in 9 570.208 for compliance with
one of the national objectives of the Act.
(4) The Secretary will notify the appli-
cant in writing that the loan guarantee
request has either been approved. reduced
or disapproved. If the request is reduced
or disapproved, the applicant shall be
informed of the specific reasons for reduc-
tion or disapproval. If the request is
approved, the Secretary shall issue an offer
of commitment to guarantee obligations of
the applicant or the designated public
agency subject to such conditions as the
Secretary may prescribe, including the
conditions for release of funds described in
paragraph (e) of this section.
(5) Amendments to the loan guarantee
shall comply with the requirements of
S 570.305. If the applicant wishes to carry
out an activity not previously described in
its final statement or to substantially
28
COMMU~ITY DEVELOPMENT
I
APPENDIX L
).
09:1601
HDR RF -42~
6-1b-90
I
NON-FEDERAL GOVERNMENTAL AUDfT REQUIREMENTS
(24 CFR 44)
DEP ARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Office df the Secretary I
24 CFR PART 44
Non-Federal Government Audit
Requirements
AGENCY: Office of the Secretary. HUD.
AcrION: Final Rule
[50 FR 39086. Sept. 27. 1985)
PART 44-NON-FEDERAL
GOVERNMENTAL AUDIT
REQUIREMENTS
I" .:.~\.
;~
.....,;.r.:
Sec.
44.1 Purpose.
44.1 Definitions.
44.3 Scope of audit.
44.4 Frequency of audit.
44.5 Internal control and compliance
reviews.
44.6 Subrecipients.
44.7 Relationship to other audit require-
ments.
44.8 Cognizant agency responsibilities.
44.9 Illegal acts or irregularities.
44.10 Audit repons.
44.11 Audit resolution.
44.12 Audit workpapers and repons.
44.13 Audit costs.
44.14 Sanctions.
44.15 Auditor selection.
44.16 Small and minoritv audit firms.
44.17 Reporting. .
44.18 HUD audits.
Appendix to Part 44-Definition of
Major Program as provided in the Single
Audit Act of 1984.
Authorit).: Single Audit Act of 198~ (31
U.S.C. 7501-7507); sec. 7(d) of the De-
partment of Housing and Urban Devel-
opment Act (42 U.S.C. 3535(d)).
~ 44.1 Purpose.
(a) This part implements the general
audit requirements for recipient organiza-
tions in OMB Circular A-128 "AuditS of
State and local governments." The OMB
Circular was issued under the SinlZle
Audit Act of 1984.31 U.S.C. 7501-7507. .
OMB Circular A-128 supersedes Attach-
ment p. "Audit requirements." of Circu-
lar A-I02. "Uniform requirements for
grants to State and local governments."
(]) This part repeats all substantive
audit requirements in OMB Circular A-
128. If any of the substantive audit re-
Quirements in OMB Circular A-128 are
revised in the future, HUD shall promul-
gate regulations to conform this part to
those revisions.
(2) The difference between the lan-
guage of this part and ofOMB Circular A-
128 generally reflects only the substitu-
tion of certain terms and phrases refiect-
ing the implementation of the Circular
into the codification for HUD regula-
tions. For example. in certain sections of
this part. references to "Federal agencies"
in the Circular have been changed to
"HUD" and references to "this Circular"
are replaced with "OMB Circular A-I 28,"
(b) The Single Audit ACt requires State
or local governments that receive
S I 00,000 or more a year in Federal funds
to have an audit made for that year.
Section 7505 of the Act requires the
Director of the Office of Management
and Budget COMB) to prescribe policies.
procedures and guidelines to implement
the Act. It specifies that OMB shall
designate "cognizant". Federal agencies,
determine criteria for making appropriate
charges to Federal programs for tbe COSt
of audits, and provide procedures to
assure that small firms or firms owned
and controlled by disadvantage individu-
als have the opportunity to participate in
contracts for single audits.
(c) Concerning the applicability of the
audit requirements of the Single Audit
Act, the Act requires:
(1) State or local governments that
receive S I 00,000 or more a year in Feder-
al financial assistance shall have an audit
conducted in accordance with the Act's
requirements;
(2) State or local governments that
receive between $25.000 and $ I 00.000 a
vear shall have an audit conducted in
accordance with the Act's requirements
(Government-, Department-,' agency- or
establishmenr-wide audit). or a grant-spe.
cific financial audit. Such financial audits
shall be performed in accordance with the
Government Auditing Standards for fi-
nancial audits issued by the Comptroller
General of the United States and include
the compliance tests described in OMB's
Compliance Supplement for Single Au-
dits of State and Local Governments for
the specific Federal assistance programs
invoived. For those programs not covered
by the Compliance Supplement. the fie
nancial audit shall include any specific
compliance tests required by HUD.
If the Federal assistance program is not
covered by the Compliance Supplement
Publis/'led l:ly Warren, Gornam & Lamont. Inc.
and if no compliance requirements have
been established by HUD. the auditor
shall design appropriate compliance tests
in accordance with government auditing
. standards. Audits shall be conducted with
the frequency described at ~ 44.4.
(3) State or local governments that
receive less than S25.ooo a year shall be
exempt from compliance with the Act
and other Federal audit requirements.
These State and local governments shall
comply with audit requirements pre-
scribed by State or local law or regulation.
(d) The Act does not exempt State or
local governments from maintaining rec-
ords of Federal fmancial assistance or
from providing access to such records to
Federal agencies. as provided in Federal
law or in 24 CFR Part 85.
(e) The Act is applicable to State and
local governments with respect to any
fiscal year that begins after December 31,
1984.
~ 44.2 Definitions.
"Cognizant agency" means the Federal
agency assigned by OMB to carry out the
responsibilities described in this part.
which incorporates OMB Circular A-128.
"Federal financial assistance" means
assistance provided by a Federal agency
in the form of grants. contracts, coopera-
tive agreements, loans, loan guarantees,
property. interest subsidies. insurance. or
direct appropriations, but does not in-
clude direct Federal cash assistance to
individuals. It includes awards received
direct!\' from Federal a2encies. or indi.
rectly 'through other units of State and
local governments.
"Federal agency" has the same mean-
ing as the term "agency" in section 551(1)
of Title 5. United States Code.
"Generally accepted accounting princi-
ples" has the meaning specified in the
generally accepled government auditing
standards.
"Generally accepted government audit-
ing standards" means the Standards For
Audit of Government Organi:alions. Pro-
grams. Activities. and Functions. devel-
oped by the Comptroller General. dated
February 27. 1981.
"HUD" means the Department of
Housing and Urban Development.
"Independent auditor" means:
(I) A State or local government auditor
who meets the independence standards
specified in generally accepted govern.
ment auditing standards; or
3
'09:1602
(2) A public accountant wbo meets
such independence standards.
"Indian tribe" means any Indian tribe,
band. nation. or other organized group or
community, including any Alaskan Na-
tive village or regional or village corpora-
tion (as defined in, or established under,
tbe Alaskan Native Cairns Settlement
Act) that is recognized by the United
States as eligible for the special programs
and services provided by the United
States to Indians because of their status as
Indians.
"Internal controls" means the plan of
organization and methods and proce-
dures adopted by management to ensure
that:
(l) Resource use is consistent with
laws, regulations. and policies;
(2) Resources are safeguarded against
waste. loss. and misuse; and
(3) Reliable data are obtained, main-
tained, and fairly disclosed in reports.
"Local government" means any unit of
local government within a State. includ-
ing a county, a borough, municipality,
city, town, township. parish, local public
authority, special district, school district,
intrastate district, council of govern-
ments, and any other instrumentality of
local government.
"Major Federal Assistance .Program" is
defined in the Appendix to this pan.
"Public accountants" means those in-
dividuals who meet the qualification
standards included in generally accepted
government auditing standards for per-
sonnel performing government audits.
I
HOUSING AND DEiOPMENT REFORTEF.
"State" means any State of the United
States. the District of Columbia, the
Commonwealth of' Puerto Rico. the Vir-
gin Islands. Guam. American Samoa, the
Commonwealth of the Northern Mariana
Islands. and the Trust Territory of the
Pacific Islands, any instrumentality there-
of. and any multi-State. regional, or inter-
state entity that has governmental func-
tions and any Indian tribe.
"Subrecipient" means any person or
government department, agency, or es-
tablishment that receives Federal finan-
cial assistance through a State or local
government, but does not include an
individual that is a beneficiary of such
assistance. A subrecipient may also be a
direct recipient of Federal financial assis-
tance.
~ 44.3 Scope of audit.
(a) The audit shall be made by an
independent auditor in accordance with
generally accepted government auditing
standards covering financial and compli-
ance audits.
(b) The audit shall cover the entire
operations of a State or local government
or. at the option of that government, it
may cover departments, agencies or es-
tablishments that received. expended, or
otherwise administered Federal fmancial
assistance during the year. However, if a
State or local government receives
$25,000 or more in General Revenue
Sharing Funds in a fISCal year, it shall
have an audit of its entire operations. A
series of audits of individual depart-
Published by Warren. Gomam & UJmont. Inc.
ments, agencies, and establishments for
the same fiscal year may be considered a
single audit.
(c) Public hospitals and public colleges
and universities maybe excluded from
State and local audits and from the
requirements of this part. However, if
such entities are excluded, audits of these
entities shall be made in accordance with
statutory requirements and the provisions
of Circular A-IIO, "Uniform require-
ments for grants to universities. hospitals,
and other nonprofit organizations."
(d) The auditor shall determine wheth-
er:
( I) The financial statements of the
government, department. agency or es-
tablishment present fairly its financial
position and the results of its financial
operations in accordance with generally
accepted accounting principles;
(2) The organization has internal ac-
counting and other control systems to
provide reasonable assurance that it is
managing Federal financial assistance
programs in compliance with applicable
laws and regulations; and
(3) The organization has complied with
laws and regulations that may have a
material effect on its financial statements
and on each major Federal assistance
program.
~ 44.4 Frequency of audit.
Audits shall be made annually.
unless the State or local government
has adopted by January I, 1987, a
constitutional or statutory requirement
4
COMMUNITY DEVELtPMENT BLOCK GRANTS
~
}
for less frequent audits. For those
governments, the cognizant agency shall
permit 'biennial audits, covering both
years. if the government so requests. It
shall also honor requests for biennial
audits by governments that have an
administrative policy calling for audits
less frequent than annual but only for
fiscal years beginning before January 1,
1987.
~ 44.5 Internal control and compt-.ce
review&.
The independent auditor shall
determine and report on whether the
organization has internal control
systems to provide reasonable
assurance that it is managing Federal
assistance programs in compliance with
applicable laws and regulations.
(a) Internal control review. In order to
provide the above-described assurance.
the auditor shall conduct a study and
evaluation of internal control systems
used in administering Federal assistance
programs. The study and evaluation
shall be made whether or not the auditor
intends to place reliance on such
systems. As part of this raview. the
auditor shall:
(1) Test whether these internal control
systems are functioning in accordance
with prescribed procedures. and
(2) Examine the recipient's system for
monitoring subrecipients and obtaining
and acting on subrecipient audit reports.
(b) Compiiance review. The auditor
shall determine whether the
organization has complied with laws
and regulations that may have a
material effect on each major Federal
assistance program.
(l) In order to determine which major
programs are to be tested for
compliance. State and local
governments shall identify in their
accounts all Federal funds received and
expended and the programs under
which they were received. This shall
include funds received directly from
Federal agencies and through other
State and local governments.
(2)The review shall include the
selection and testing of a representative
number of charges from each major
Federal assistance program. The
selection and testing of transactions
shall be based on the auditor's
professional judgment considering such
factors as the amount of expenditures
for the prosram and the individual
awards; the newness of the program or
changes in its conditions; prior
experience with the program.
particularly ss revealed in audits and
other evaluations (e.g.. inspections,
program reviews); the extent to which
the program is carried out through
subrecipients;the extent to which the
program contracts for goods or services;
the level to which the program is
already subject to program reviews or
other forms of independent oversight:
the adequacy of the controls for
ensuring compliance; the expectation of
adherence or lack of adherence to the
applicable laws and regulations; and the
potential impact of advarse findings.
(i) In making the test of transactions.
the auditor shall determine whether the
amounts reported as expenditures were
for allowable services or benefits. and
whether the records show that those
who received services or benefits were
eligible to receive them.
(ii) In addition to transaction testing,
the auditor shall determine whether
matching requirements. levels of effort
and earmaking limitations were met:
whether Federal financial reports and
claims for advances and
reimbursements contain information
that is supported by the books and
records from which the basic fmancial
statements have been prepared; and
whether amounts claimed or use.i for
matchiitg were determined in
accordance with OMB Circular A~;
"Cost principles for State and local
governments." and Attachment F of
OMB Circular A-l02.
(iii) The principal compliance
requirements of the largest Federal aid
programs may be ascertained by
referring to the Compliance Supplement
for Single Audits of State and Local
Governments, issued by OMB and
ava.ilable from the Government Printing
Office. For those programs not covered
in the Compliance Supplement. the
Published by Warren, Gorham & Lamont, Inc.
I
09:1603
HDR RF -306
10-28-85
auditor may ascertain compliance
requirements by researching the
statutes. regulations. and agreements
governing individual programs.
(3) Transactions related to other
. Federal assistance programs that are
selected in connection with
examinations of financial statements
and evaluations of in~rnal controls
shall be tested for compliance with
Federal laws and regulations that apply
to such transactions.
(Approved by the Office of Management and
Budget under OMS control number 2535-
lI094l.
~ 44.6 SUbntclpients.
State and local governments that
receive Federal financial assistance and
provide $25.000 or more of it in a fiscal
year to a subrecipient shall:
(a) Determine whether State or local
subrecipients have met the audit
requirements of this part and whether
subrecipients covered by OMB Circular
A-110. "Uniform requirements for grants
to universities, hospitals. and other
nonprofit organizations," have met those
requirements;
(b) Determine whether the
subrecipient spent Federal assistance
funds provided in accordance with
applicable laws and regulations. This
may be accomplished by reviewing an
audit of the subrecipient made in
accordance with this part. Circular A-
110. or through other means (e.g..
program reviews) if the subrecipient has
not yet had such an audit;
(e) Ensure that appropriate corrective
action is .taken within six months after
receipt of the audit report in instances of
noncompliance 'With Federal laws and
regulations:
(d) Consider whether subrecipient
audits necessitate adjustment of the
recipient's own records; and
(e) Require each subrecipient to -
permit independent auditors to have
access to the records and financial
statements as necessary to comply with
this part. .
09: 1604
f 44.7 Relatlonatllp to other audit
requirements.
(a) The Single Audit Act provides that
an audit made in accordance with OMB
Circular A-l28 shall be in lieu of any
financial or financial compliance audit
required under individual Federal
assistance programs. To the extent that
a single audit provides HUD with
information and assurances the
Department needs to carry out its
overall program responsibilities. such
information shall be used. However. any
additional audits that are necessary to
carry out responsjbilities under Federal
law and regulation shall be planned and
carried out in such a manner as to avoid
duplication.
(b) HUD audit requirements in this
part do not limit the authority of the
Department to conduct or contract for
audits and evaluations of Federal
financial assistance programs. nor do
these audit requirements limit the
authority of the HUD Inspector General
or other Federal audit officials.
(c) HUD audit requirements in this
part do not authorize any State or local
government or subrecipient thereof to
eonstrain HUD in any manner, from
carrying out additional audits.
(d) If HUD conducts or contracts for
audits in addition to the audits
conducted by recipients under this part,
the Department shall. consistant with
other applicable laws and regulations.
arrange for funding the cost of such
additional audits.
f 44.8 Cognizant agency responsibllltleL
(a) The Single Audit Act Drovides for
cognizant Federal agencies'to OVen8e
the implementation of this part. OMB
will assign cognizant agencies for States
and their subdivisions. and for larger
local governments and their
subdivisions. HUD may participate with
an assigned cognizant agency. in order
to fulfill the cognizant responsibilities.
Smaller governments not assigned a
cognizant agency will be under the
general oversight of the Federal agency
that provides them the most funds.
whether directly or indirectly.
I
HOUSING AND DEVtLOPME1"T REPORTER
(b 1 If HUD is designated as a
cognizant agency, it will:
(1) Ensure that audits are made and
reports are received in a timely manner
and in accordance with audit
requirements of this part.
(2) Provide technical advice and
liaison to State and local governments
and independent auditors.
(3) Obtain or make quality control
reviews of selected audits made by non-
Federal audit organizations.-and provide
the results. when appropriate. to other
interested organizations.
(4) Promptly inform other affected
Federal agencies and appropriate
Federal law enforcement officials of any
reported illegal acts or irregularities.
They should also inform State or local
law enforcement and prosecuting
authorities. if not advised by the
recipient. of any violation of law within
their jurisdiction.
(5) Advise the recipient of audits that
have been found not to have met the
requirements in this part. In such
instances. the recipient will be expected
to work with the auditor to take
corrective action. If corrective action is
not taken. HUD shall notify the recipient
and Federal awarding agencies of. the
facts and make recommendations for
follow-up action. Major inadequacies or
repetitive substandard performance of
independent auditors shall be referred
to appropriate professional bodies for
disciplinary action.
(6) Coordinate. to the extent
practicable. audits made by or for
Federal agencies that are in addition to
the audits conducted under this part. so
that the additional audits build upon
such audits.
(7) Oversee the resolution of audit
findings that affect the programs of more
than one agency.
f 44.9 11Ieg8I8CtII or ~
If the auditor becomes aware of illegal
acts or other irregularities. prompt
notice shall be given to recipient
management officials above the level of
involvement. The recipient. in turn. shall
promptly notify the cognizant agency of
Published by Warren, Gorham & Lamont. Inc.
the illegal acts or irregularities and of
proposed and actual actions. if any.
Illegal acts and irregularities include
such matters as conflicts of interest.
falsification of records or reports. and
misappropriations of funds or other
assets.
f 44.10 Audit report&.
(a) Audit reports shall be prepared at
the completion of the audit. The audit
report shall state that the audit was
made in accordance with the provisions
of HUD requirements at 24 CFR Part 44.
The report shall be made up of at least:
(1) The auditor's report on financial
statements and on a schedule of Federal
assistance: the financial statements: and
a schedule of Federal assistance.
showing the total expenditures for each
. Federal assistance program as identified
in the Catalog of Federal Domestic
Assistance. Federal programs or grants
that have not been assigned a catalog
number shall be identified under the
caption "other Federal assistance."
(2) The auditor's report on the study
and evaluation of internal control
systems must identify the organization's
significant internal accounting controls.
and those controls designed to provide
reasonable .assurance that Federal
programs are being managed in
compliance with laws and regulations. It
must also identify the controls that were
evaluated. the controls that were not
evaluated. and the material weaknesses
identified as a result of the evaluation.
(3) The auditor's report on compliance
containing;
(i) A statement of positive assurance
with respect to those items tested for
compliance. including compliance with
law and regulations pertaining to
fmancial reports and claims for
advances and reimbursements:
(ii) Negative assurance on those items
not tested:
(Hi) A summary of all instances of
noncompliance: and .
(iv) An identification of total amounts
questioned. if any. for each Federal
assistance award. as a result of
noncompliance.
COMMUNITY DEVErOPMENT BLOCK GRANTS
i
I
/
/
/
(b) The three parts of the audit report
may be bound into a single report, or
presented at the same time as separate
documentJ,
(c) All fraud. abuse. or illegal acta or
indications of such acta, including all
questiOned coats found u the result of
these acts that auditors become aware
of. should nonnaUy be covered in. a
separate written report submitted in
accordance with paragraph (f).
(d) In addition to the audit report, the
recipient shall provide c.omments on the
findings and recommendations in the
report; including a plan for corrective
action taken or planned and comments
on the status of corrective actions taken
on prior findings. If corrective action is
not necessary. a statement describing
the reasOD it is not should accompany
the audit report. .
(e) The reports shall be made
available by the State or local .
government for public inspection within
30 days after the completion of the
audit.
(f) In accordance witJt generally
accepted government audit standards.
reports shall be submitted by the auditor
to the organization audited and to tholle
requiring or arranging for the audit. In
addition. the recipient shall submit
copies of the reports to each Federal.
. department or agency that provided
Federal assistance funds to the
recipient. Subrecipienta shall submit
copies to recipients that provided them
Federal assistance funds. The reports
shall be sent within 30 days after the
completion of the audit, but no later
than one year after the end of the audit
period. unless a longer period is agreed
to with the cognizant agency.
. (g) Recipients of more than $10?.?oo in
Federal funds shall submit one copy of
the audit report, within 30 days after
issuance. to a central clearing house.
desiplated by OMB. The clearing house
will keep completed audits on me and
follow up with State and local
governments that have not submitted
required audit reports.
(h) Recipients shall keep audit reports
on me for three yem after their
issuance.
(Approved by the OfBce of MaDaaement IIDd
Budaet UDder OMB coatrolll1lJDber Z535-
0lIlM.) .
f ..... 11 AudIt ,.Ialullon.
(a) As deec:ribed in 144.8. the
cognizant agency shall be responsible
for monitoring the resolution of audit
findings that affect the progrllD1S of more
than one Federal agency. Resolution of
flndil'lgll that relate to the programs of a
single Federal agency will be the
responsibility of the recipient and that
agency. Alternative IlIT8Dg8ments may
be made on a case-by-caae basis by
agreement lIIDODg the agencies
concemed.
(b).Resolution.ahall be made within
six mOlltha after receipt of the report by.
the Federal departments and agencies.
CorreCtive action should proceed as
ral'idly as possible.
f .....12 AudIt........ ~ ~
WorkPapers and reports shall be
retained for a minimum of three yeua
from the date of the audit report, unless
the auditor is notified in writing by the
cognizant agency to extend the retention
period. Audit worlcpaperi shall be made
available upon request to the cognizant
agency or its deaigpee or the Gener81
Accounting Office. at the completion of
the audit.
(Approved by the OfBce ofMaaqement IIDd
Budpt under OMB coatrol number Z535-
OlIlM.J
f .....13 AudIt ......
Tbe cost of audits made in accordance
with the audit requirements of this part
are allowable charses to Federal
asaiataDce programe.
(a) the cha.rgea may be considered a
direct cost or an allocated indirect coat.
determined in accordance with the
provisions of OMS Circular A-4J7. "Coat
principles for State aDd local
govemments. "
Published by Warren. Gomam & Lamont. Inc.
I
09: 1605
HDR RF-373
5-9-88
(b) Generally, the percentage of coats.
charged to Federal assistance programs
for a single audit shall not. exceed the
percentage that Federal funds expended
represent of total funds expended by the
recipient during the fiscal year. The
percentage may be exceeded. however.
if appropriate documentation
demonstrates higher. actual. cost.
'.....14 s.nctIonL
No cost may be charged to Federal
assistance programs for audits that are
reqUired by this part, but.are not
conducted in accordance with the audit
requirements of this part. In case of a
recipient's con~u8dinability or'
unwlUingn!,~ t.o hav.;,a proper..audit,
Federal agencies shall consider' other
appropriatesanctioDS,~u~
(a) Withholding a percentage of
a88istancep.YDlents until the aUdit is
completed satisfactorily;
(b) Witholding or disallowing
overhead costs; and
(c) Suppendingthe Federal assistance
agrumeiif until the audit is made. .
~ 44.15 Auditor selection.
In arranging for audit services. State
and local governments shall follow the
procurement standards prescribed 24
CFR Part 85.36. The standards provide
that ~hile. recipients are encouraged to
enter Into Intergovernmental agreements
for audit and other services, analysis
should be made to determine whether it
would be more economical to purchase the
services from private firms. In instances
where use of such intergovernemntal
agreements are required by a State statute
(e.g., audit services) the State statute will
take precedence.
'.....18 Sn..u 8nd minority ... ftrm&.'
Small audit firms. and audit firms
owned and controlled. by socially and
economically disadvantaged
individuals, shall have the maximum
7
09: 1606
practicable opportunity to participate in
contracts awarded to fulfill the audit
requirements of this part. (As used in
this. section. the term. "small. audit firms"
iDc1udes the term "audit firms controlled
by socially and economically
cHladvantage individuals".) Recipients
of Federal assistance shall take the
following steps to further this goal:
(a) Assure thatsmall audit firms are
used to the fullelllt extent practicable:
(b) Make information on forthcoming
opportunities available to. and arrange
time schedules for the audit so as to
encourage and facilitate participation
by. small audit firms:
(c) Consider in the contract process
whether firms competing for larger
audits intend to subcontract with small
audit firms:
(d) Encourage contracting with small
audit firms that have traditionally
audited government programs and. in
cases where this is not possible, assure
that these firms are given consideration
for audit subcontracting opportunities:
(e) Encourage contracting with
consortiums ohmall audit firms when a
I
HOUSING. AND DEVfLOPMENT REPORTER
contract. is too large for an individual
small finD: and
(f) Use the services and assistance, as
appropriate. of the Small Business
Aditilnisti'ation in the solicitation and-
utiliaUon of iJmall audit firms.
f 44.17 Reportl..g.
HUD shall report to the Director of
OMBon or before March 1,.1987, and
annually thereafter. on the effectiveness
of State and local governments in
carryins out the requirements of the
OMS Circular. The report shall identify
each State or local government or Indian
tribe that. in the opiniOJl of-HUD. has
failed to comply with OMB Circular or
with this'part.
f 44.18' HUD audita.
(a) The Secretary of HUDor the
Secretary's authorized representative
shall have access to all books, accounts,
recorda. reports. mes and other papers
or property of a recipient organization
pertaining to Federal aaaistance
supplied by' HUD to the recipieDt
ori~tion. for the purpose of-making
Published by Warren, Gorham & Lamont Inc.
specific BUveys. audits, examinations.
excerpts and transcripts,
AppeadIx to Part ~tlcm of Major
PIopam sa Provided ill the Siqle Audit Act
oft_
"Major Federal Assistance Program." for.
State and local govemmentl havin8 Federal
a..iatance expenditures. b~tween 5100.000
and 5100 million dollan. meana any program
far which Federal expenditures during the
applicable year lIXC88d the larger of S3OO.000.
or 3 percent of such total expenditures.
Where total expenditures of Federal
assistance exceed 5100 millon. the followiDi
criteria apply:
T<<*I ....lClitIIIW Of ~ lInlIncim M8jD< FeHdI
_fllr"~ ..-..nce
~
-any
Men a.- But ... __ progNIll -
----
$100 milIIDn_, $1 bIUlan,____ S3 milIIan.
511111l1on 52 bilIIan___ Sol mIIIIan.
52 biIIIan S3 billian..__--'- S7 million.
S3 bilIlon_.___ Sol biIIiGn...__... $10 millian.
Sol 1IIIlIon__....:.. 55 billIan_____ S13mi111Dn.
55bi1lian $I biIIiGn.______ 518 million.
$I tliIlIon.___ S7 biIIion__ 519 milrlOft,
0.. 57 blIftan__. .--...---.--- S20 rnBlIOn.
8