AGREEMENT FUNDED UNDER THE CLEARWATER COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
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AGREEMENT FUNDED UNDER
THE CLEARWATER COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
THIS AGREEMENT is entered into as of the
1st
day of October, 1990, by
the CITY OF CLEARWATER, Florida, a political subdivision of the state of Florida,
hereinafter referred to as the "CITY", and YWCA OF TAMPA BAY,
as further
identified in Appendix A, hereinafter referred to as the "PSA". This Agreement
consists of this document and the Appendices attached hereto.
WHEREAS, the City has agreed with the united States Department of Housing
and Urban Development to conduct a Community Development program, hereinafter
referred to as the "Program", with federal financial assistance under Title I of
the Housing and Community Development Act of 1974, as amended, hereinafter called
the "Act", and
WHEREAS, the City of Clearwater Planning & Development Department,
hereinafter called the "Department", will act in behalf of the City in conducting
the Program, and
WHEREAS, the PSA provides a program as identified in Appendix A of benefit
to low and moderate income residents within the City of Clearwater and proposes
to perform the work and carry out the specific services as identified in Appendix
A, hereinafter referred to as the "Project", and desires federal financial
assistance through the City to effect this proposal, and
WHEREAS, the City finds the project to be meritorious and in fulfillment
of the purposes of the Act;
THEREFORE, the parties agree as follows:
1. The PSA shall, in a satisfactory and proper manner as determined by the
Department, conduct the Project outlined in Appendix A.
2. The term of this Agreement shall commence on October 1, 1990, and
terminate on September 30, 1991, unless earlier cancelled as provided herein.
The Agreement may be extended for up to one additional year upon the request of
the PSA and the written authorization of the City Community Development Manager.
The need and merit shall be at the determination of the Manager. The Department
may issue written or oral instructions to clarify any other details or provisions
of this Agreement.
Such instruction must be within the intent of the project
and not be of such nature to affect cost or period of performance.
3. The City representative to PSA as regards conduct of services under
this contract shall be the Community Development Manager. The PSA's services
shall be
carried out under the supervision of the Agent as identified in
Appendix A.
4. The PSA shall not exceed its budgeted amount and shall use the funds
in accordance with the award to be paid with Community 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 OMS Circular A-110,
provided in Appendix G, and with the provisions of OMS Circular 122, provided in
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RECEIVED
APR 1 0 19Cjl
4A,C
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\:,"':'-0'11 ,d-,~t[U2
PLANNING & URBAN
DEVElOPMENT DEPT.
(3)
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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-llO, Attachment O. Accountability for project property and equipment shall be
in accordance with the requirements therein set forth.
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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 sha'll 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) sh~ll be substantially disbursed
from the fund before additional cash 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 uf 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
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be reported immediately to the Department. Thirty days prior to the end of the
grant year or immediately upon termination of this Agreement, the PSA shall
submit in a Property Report a physical inventory of all property purchased with
Community Development Funds. The report shall also contain a verification of the
existence and current used and location of the property, and, if applicable, the
continued need for the property.
No real or personal property or custody
thereof, purchased with funds provided to the PSA under this Agreement, shall be
disposed of, transferred, assigned, or loaned by the PSA without prior written
consent of the City.
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 indiyiduals who are served by the project, nor shall this Agreement
be construed to require the PSA to publish or release information to third
parties which would invade the privacy of such individuals. Information obtained
by the Department as required by this.Agreement shall not be used or disclosed
in such a way as to invade individual privacy and client relationships, unless
Florida law pertaining to public records requires public inspection of records
containing said information.
13. The PSA shall obtain prior written approval by addendum to this
Agreement for any of the following changes:
a. Substantial changes in the project work plan.
b. Changes in any budget line item.
14. The PSA agrees to fully participate in the implementation and
maintenance of an evaluation system to continually monitor the project. This
shall include, but not be limited to, periodic submission of data reports which
will be used by the Department for inclusion in the Annual Grantee Performance
Report, periodic monitoring visits by the Department for conformance with this
Agreement, and continuing assessments of performance hereunder. PSA agrees to
comply with evaluation and information requirements of the Department. A final
report shall be submitted by the PSA within 30 days after the end of the contract
term. This final report shall consolidate reporting of all project participants.
15. PSA shall e~tablish 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-1l0 or the appropriate successor document and in
accordance with generally accepted accounting principals and standards where
these principals and standards are not in conflict with A-110 or its successor.
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PSA agrees to modify or correct said systems in accordance with the City's
requirements.
16. PSA shall maintain. such records and accounts as are deemed necessary by
the City to assure a proper accounting for all project funds. All such records shall
be available for audit, inspection or copying purposes at any time during normal
business hours and as often as the City, HUD, or representatives of the Comptroller
General of the United States, or other federal agency, may deem reasonably necessary.
Such records shall be retained for such period as required by applicable laws and
regulations and may thereafter be destroyed only with the prior written approval of
the City.
Such records shall include financial records, audits, supporting
documents, statistical reports and client files.
PSA will comply with such
additional requirements as to maintenance of records as the City may request in
writing. In the event the PSA cannot~ontinue 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 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
unavailability 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 i~come.
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
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or in part with Community Development Funds because of race, color, national origin
or sex, as set forth in Other Program Requirements in Appendix D, (CFR 570.601).
22. The PSA will establish safeguards to prohibit employees from using their
positions for a purpose that is or gives the appearance of being motivated by a
desire for private gain for themselves or others, particularly those with whom they
have family, business or other identifiable ties. Prior to requesting any continued
project funding beyond the term covered by this Agreement or for a new public
services not covered by this Agreement, the PSA shall attempt to secure other local,
state or federal funding and/or private funding for such project. The PSA shall not
as a result of receiving funding for the Project reduce its support for other similar
services already being provided by the PSA in the area of its operation, and will
affirmatively seek additional assistance and support from other sources for
increasing services where needs demaud 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 hav~ caused this Agreement to be
executed as of the day and year first above written.
Countersigned:
Approved as to form & correctness:
PSA Revised 3/25/91
YWCA OF TAMPA BAY
~j,
BY' ~
......... Pres dent '
ATTEST: " ", ~
~be ,/
_ Secretary
CITY OF CLEARWATER, FLORIDA
By
Manager
ATTEST:
~z:, ::~.
~--,__ 'c~nth~?"-,~Qudeau
- - - _ 9.l, t~::- Cl ~t'k
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Agency:
Year:
YWCA OF TAMPA BAY
1990 - 1991
APPENDIX A
Identification of Aqencv and Specific Services to be Provided
AGENCY
Name:
YWCA of Tampa Bay
Legal classification:
A nop-profit corporation organized and existing under
the laws of the state of Florida.
Principal Office:
655 Second Avenue South, st. Petersburg, FL 33701
Mailing Address:
655 Second ~venue South, st. Petersburg, FL 33701
Agent:
Peggy Sanchez, Executive Director
813-896-4629
PROGRAM OF AGENCY
YWCA of Tampa Bay - Kings Kids Program is a after school tutoring and homework
assistance program for homeless children ages 5 - 12. To provide these services
part time instructors will travel to various shelters to offer the services to
keep the youths interested in school and to keep their educational skills at an
acceptable level. The children served will be off-spring of residents of nearby
emergency housing thus insuring that a majority of Clearwater residents will be
served.
SPECIFIC SERVICES TO BE PROVIDED UNDER THIS AGREEMENT
Funds will be provided to YWCA of Tampa Bay Kings Kids Program to pay a portion
of the operational support for the program which will provide tutoring and
homework assistance services to about 20-25 homeless children at anyone time.
It is anticipated that about 348 different children will be served during the
year. The children served will be from the Res Spouse Abuse Shelter and the
Center Against Spouse Abuse.
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Agency: YWCA OF TAMPA BAY
Year: 1990 - 1991
APPENDIX B
proiect Award
Funds of up to $2,400 will be provided to the YWCA of Tampa Bay for a portion
of the administrative support for the operation of the Kings Kids Program which
provides after school tutoring and homework assistance to homeless children.
BUDGET
YWCA OF TAMPA BAY - KINGS KIDS
OCTOBER 1, 1990 - SEPTEMBER 30, 1991
Sal~ries
Teacher
UNITED
CDBG WAY YWCA TOTAL
$2,400 $6,960 0 $9,360
0 $8,769 $4,072 $12,868
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------- ------- ------- -------
$2,400 $15,756 $4,072 $22,228
Other Expenses
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APPENDIX C
METHOD OF PAYMENT
All payments shall be on a reimbursement basis only.
All requests for reimbursement for salaries shall be supported by a copy of the
checks paid to employees and other documentation as requested. Payroll and other
support documentation must be kept by the agency in an appropriate file.
All requests for reimbursement for purchases shall be supported by a copy of the
invoices and a copy of the check paid to the supplier. Other support
documentation shall be kept by agency in an appropriate file.
All requests for reimbursement for construction projects shall be supported by
a copy of the check paid to the contractor and a copy of a progress or final
payment affidavit, whichever is appropriate. Payroll data for Davis Bacon related
projects and other source documentation shall be kept by the agency in an
appropriate file.
All requests for reimbursement shall Qe 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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SCHEDULE
I. YWCA of Tampa Bay - Kings Kids Program
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 September 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 th~ previous month. Reportscshall be forwarded for
the entire term of the agreement which covers October 1, 1990 through
September 30, 1991.
D. Special Data requests will be responded to within 15 calendar days,
subject to the request being or reasonable limited scope.
E. Records will periodically be viewed by the City to verify reimbursement
accuracy and as part of the yearly monitoring process.
F. Payment will be in accordance with the payment schedule identified in
Appendix C.
G. 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.
I' APPENDIX D
OTHER PROGRA}1 REQUIRE~lliNTS
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Subpllrt K-0ther Progrllm
Requirement.
I 570.&00 General
(0) Seclion 104(b) l' lhe Act providcs
lbol an)' grant undcr tieclion 100 of lhe
Act ,hall be rr. .,,' nly if lhe gronlee
certifies 'to lhe slllisfoclion of the
Secretilr)', among oilIer lllinss, Iho tlhe
granl "wilt' ~e.conducled ond
adminislcred in confonnity willI rub. L
1\3-352 ond Pub. L. 00-264." and. further.
thot the granlee"will comply with the
olher provisione of this title and with
other applicable laws." SeclioD l04(d)(l)
of Ihe Acl requires thai the Secrelary
dt:lermine wilh respecl 10 Sranls made
pursuanl to section l06(b) (Entitlemenl
Granls) and 106(d)(2)(B) (HUD.
Administered Small Cities Grants). at
lcast on an annual basis. among other
thins~. "whether the granlee has carried
out Iils) certifications in compliance
with the requiremenls and the primary
objectives of this title and with other
applicable laws' . . ." Certain other
,talules ere expressly made applicable
to IIctivities assisted under the Act by
the Act itself. while other laws not
referred 10 in the Act may be applicable
10 such activities by their Dvm tenns.
Certain statutes or Executive Orders
which mey ue applic.nble to activities
assisled under the Act by their 0....'Y1
lerm; are administer~ or enforced by
governmental departroenLJ or agencies
other than the SecretarY or the
Departmenl This Subp~r1 )( enumerates
laws which the Secretary .....ill treat ae
applicable to grants made under section
105 of the Act. other th~ grants to
States made pursusnlto section lOG(d)
of the Act. for purposes 01 the
delerminalions describcd above 10 be
Olade by Ihe Secrelary under section
104(d)(1) 01 the Act. including stalules
expressly made applicable hy the Act
and certain other statutes IInd Executive
Orders for which the Secretary has
enforccme1l1 respon~ibilily. The absence
of mention herein of any other elalute .
for which the Secretary docs nol ha ve
direct enforccmenl responsibility is nol
intended 10 be loken as aD indication
Ihat. in Ihe Sccrelory's opinion, such
stal u 1 e or Execu Ii ve Order Is not
applicoble to activilies ouisted under
Ihe Act. For lows which the Secrelary
willlreal as applicable 10 gronls made
10 SlalCs under section lOO(d) of the Act
for purposes of the dctermino lion
required \0 be made by the Sccretary
pursuant to section 104(d)(2) of the Acl.
see t 570.(96.
(b) This Subpart also sels forth cer1ain
additional program rt:quirements .....hich
the Secretary has delermined 10 be
applicable 10 grana provided under the
Act as a mailer of administrative
discretion.
(c) in addition to granls made
pursuant to section 100(b) and
l00(d)(2)(B) of the :\ct (Subparts D and F
of this Pari.. respecLiJ'ely). the .
requirements of this Subpart )( are
applicable to grants made pursuant 10
sections 107 and 119 of the Acl
(Subparts E and G. respectively).
~ 570.601 Pub. L 8&-352 and Pub. L 90-
284; E.xecutlve Ordor 1106:1..
Seclion l04(b) of the Act provides that
any grant under section 100 of the Act
s.h.all be made only if the grantee
certifies to VIe satisfaction of the
Secretary thai the grant "will be
conducted and administered in
conformily .....ith Pub. L 88-35Z and Pub.
L 90-284.... Similarly. sectioe 107
provides thai no gr~ril may be made
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under that aeclion (Secretary',
Discrelionary Fund) or seclion llg
(UDAG) "'-1thout aali,fllClory assurance,
to' the same effecl.
(a) "Pub. L ~52" rden \0 Title VI
of tbe Civil R[shts Act of 1004 (42 V.S.C.
zoood' et leq.). .....hich provides that no
penon In the United States .hall on the
ground of race. color. or ootional origin.
be excluded [rom participo lion In. be
denied the benef1\s of. or be subjecled 10
discrimination under any program or
Bcll,'lI)' rt:ceivlng Federal financial
a,eistance. Section 602 of \he Civil
Righta Acl of 1004 directe each Federal
dcpartmenl and agcncy emrowert:d to
ex lend Federnl financial Desistance to
an)' program or octivit)' by wa)' of gronl
10 effectuate the forcgoing prohibition
by issuing rule~. regulotions, or ordcn of
generolar'pllcabilil)' which shall be
consislent .....ith achicvemcnt of Ihe
'. slatute aUlhoritiOj) \he financial
IIssislance. HVlJ regulal10nl
implemenling the requirements of Tille
VI with respect 10 HUD program~ are
conlained in Z4 crn Part 1. .
(b) "Pub. L 90-~" refers 10 Tille VIII
of the,Civil Rights Acl of 1968 (42 U.S.C.
3GOl et seq.), popularl)' \:.nown as the
Fair Housing Act which providc! that il
i, the polic)' of the Uniled Slale~ 10
provide. within const\lutional
limilationl. for fair housing throughout
the United Stalee and prohibits nn)'
penon [rom discriminaling in the sale or
rental of houaLns, the ftnancing of
housing, or the provision of brokerage
services. Including in any WilY making
unavailable or denying II dwelling 10
any.penon. because of race. color.
religion. sex.. or na \.iona I origin. Title
VIlI further requires the Secrelary 10
administer lhe programs and aClivities
rei a ting to hou,ing and urban
development in B manner affinnalively
10 further the purpoaes of Title Vlll.
Punuanlto this alatutory direction. the
Secretary requires thalgranlee'
adminisler all program a and actiyilies
'.
rclll1ed to housing nnd community
dcvcloplTlo!nt in s manncr 10
aflirmlllively furlhcr Illir housing.
(c) Executive Order 11003. a5
omcnded by Exccutive Ordcr 12259.
dirccts Ihe Ocpartmentto lake all ;lction
ncccssary and appropriate to prevcnt
discriminolion bccause of race. color.
religion (creed), ecx. or national origin.
In thc sole. lcssing. rental. or olhcr
disposition of rcsidcnliol propcrty and
relatcd facilitics (including land 10 be
dcveloped for residential use). or in the
usc or occupo ncy thereol. il such
properly and rclnted focilitics arc.
o mong other tbings. providcd in wbole
or in part with tbc uid 01 lonns.
ild\'anccs, grnnlS, or conlrihulions
/I~rce~ 10 be madc bl' the Fedcrul
Covernment HUO rcgulalionB
implcmcnting Excculive Ordcr nOG3 are
conlnincd in 24 CFR Pari 107.
~ 570.602 SecHon 109 olth<< Act.
(i1) Section 109 oflhe Act requircs that
no person in the United States shall on
the ground of race, color. national origin
or scx. be excluded [rom participa lion
in. be denied the benefits of. or be
subjected to discriminalion under. any
program or activity funded in whole or
in part with community dcvelopmcnt
funds made available pursuant to the
Act. For purposes of Ihis section
"program or activil{' is dcfined as any
(unction conducted by an identifiable
administrative unit of the rccipient. or
b)' on)' unit of govemme~t. ~ubrecipient.
or private conlrilctor rcceiving
cOr.'lInunHy developmcnt funds or loans
from the recipient. "Fundcd in whole or
in part with community dev'elcpmenl
(unds" mcans thai communily
development funds in a:'lY amount in the
form o( grants or proceeds from I-IUD'
guaranteed loan6 have bce~_transfcrred
by the recipient or a subrccipicnt to an
idenlifiCible administrath'e unit and
disbursed in a program or activity.
(b) Specific discriminatory oclio,!s
prohibited and correcti,'e octions.
(1) A recipienl may not. under any
program or aclh'ity 10 which thc
-1\
rcgulallons of this Part may apply
direct\)' or throufh contractual or olhcr
Ilrrangrmcnts. on Ihe ground of ruce,
color, natiOl\al origin, or scx:
(il Dcny allY f;,cilities. 6cr"ice6.
finnncialflid or othcr bcnclil8 provided
under thc progrum or activily.
(ii) I'ro\'idc an)' facililie,. ~cT\'ices.
financial oid or othcr benclits which are
different. or are provided in 8 diffcrenl
form (rom Ihut provided to othere undcr
lhe prosrum or activity.
(iii) Subjcct 10 segregaled or seporale
trcntmcnt in any fucilily in. or in allY
mailer o( process relill~d 10 rcceipt of
any 8crvice or benefil under lhe program
or oClivilY,
(iv) ReslIict in Ilny woy accesS 10, or
in Ihc enjoyment of any advanlage or
privilege enjoycd by othcrs in
connection with facilitics. 8crvices.
financial aid or olhcr benefits under Ihe
progrnm or activity.
(v) Trcat an individual diffcrently
from others in delermining whether the
individual sa tisfies any admission.
enrollment. eligibility. membership. or
other requirement or condition which
the individual must meet in order to be
provided Bny facilities. services or olher
bcnefit pro\'ided under the program or
llClivi:v. '
(vi) Den)' an opportunity to participa te
in a progrllm or activity as an employee.
(2) A recipient may not utili7.e crilcria
or methods of administration which
heve the effect of subjecting individuals
to discrimina tion on the basis o( race.
color. national origin. or sex. or have the'
effccl of defeating or substanliaJly
impairing accomplishment of the
objectives of the program or activity
with rcspect to individuals of a
particular race. color. national origin. or
se x..
131 A recipient. in delermining Ihe site
or location of housing or facililies
provided in whole or in part with funds,
under this par\. may not make seleclions
of such site or location which have the
eflec:t of excluding individuals from.
denying them the benefils of. or ,
subjecling them to discrimination on Ihe
0-2
I
I1ruund o( roC:C. color. nalional crigin, ('If
8CX: or which hAve the purpoH or errcct
01 dclrolin!1 or sllbetontia\l)' inlpairing
Ihe ilcr.uOlplishmcnl of thc objectivcs of
lhe Act find o( this scelion.
(4)lilln odOlinislerinS a program or
activily funded in whole or in pari wilh
CO~G funds regarding which the
rccipient hns prcviously diecriminolcd
ogainsl pcrsons on the ground o[ race.
color. nolionul origin or 8CX. the
recipient must toke affirmative aclion to
ovcrcome thc clfccts of prior
discriminntion.
Iii) E\'cn in lhe abscnce of 6uch prior
discriminalion. a rccipicnt in
adminislering a progrnm or oclivity
[undcd in whole or in part with CODe
lunds should lukc a(firmotive 8clion 10
ovcrcomc Ihc errects of conditions
which would olhcrwisc result in limiling
parlicipaliun by persons o[ 0 pnrlicular
race. clllor. national origin or sex.
Where previous discriminulory practice
or uSllge tends. on the ground o( race.
color. nalional origin or sex, to exclude
individuals (rom participation in. to
deny Ihem thc benefits or. or to subjecl
thcm to discrimination under any
program or activity to which Ihis pari'
applies. the rccipient has an oblig~tion
to take reasonable action to remove or
overcome the consequences or Ihe prior
discrimina tory prllctice or usage, end \0
accomplish the purpose o[ the Act.
(iii] A rccipient shall not be prohibited
by this part from taking any action
eligible under Subparl C to ameliorate
an imbalance in services or facilities
provided to any geographic area or
spccific group of persons within its
jurisdiction. whcre ,the purpose of such
action in to overcome prior
discriminatory practice or \lsage.
(5) Notwilhslanding anything to the
contrary in thi6 aection, nothing
conlained herein shall be conslrucd to
prohibit any rlicipientfrom maintaining
or conslnJctins separate living facilities
or rest room facilities for 'the difierent .
scxes. Furthermore. selectivity on the
basis of 6eX is not prohibited when
instilutional or clIstodial serVices can
"'
.-1 APPENDIX E
SECTIOH 3 CLAUSE
I
T'lIE fOLLOiHNG SECTlO;-{ ) CLAUSE SHALL SE INCLUDED IN ALL CONTRACTS fOR ,""ORK IN
CONNECTION '""ITH A SECTION ) PROJECT:
A. The ....ork to be perfonned under this contract is on a project assisted
under a program providing direct Federal financial assistance frolD
the Department of Housin~ and Urban Development and is subject to the
requirements of Section) of the Housing and Urban Development Act of 1968,
os amended, 12U.S.C. 17Qu. Section 3 requires that to the createst extent
feasible opportunities for training and employment be given lo....er income
residents of the project area and contractS for ....ork in connection ....ith the
project be a....arded to business concerns ....hich are located in, or o....-ned in
substantial part by persons residing in the area of the project.
B. The parties to this contract ....ill comply ....ith the provisions of said Section)
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 that they are under no contractural
oc other disability ....hich ....ould prevent them from complying ....ith these
requirements.
C. The contractor ....ill send to each labor organization or representative of
....orkers.....ith ....hich he has a collective bargaining agreement or other contract
of understanding, if any, a notice advising the said labor organi~ation of
....orkers' 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 ....ill include this Section) Clause in every subcontract for
vork in connectiqn ....ith the project and vill, at the direction of the
applicant for or recipient of Federal financial assistance, take appropriate
actio~ pursuant to the subcontract upon a finding that the subcontractor is
in violation of regulations issued by the Secretary of Housing and Urban
Development, 24 CFR. The contraccor ....ill not subcontract ....ith any subcontractor
~here it has notice or kno....ledge that the latter has been found in violation 'of
regulations under 24 CFR, and ....ill not let any subcontract unless the
subcontractor has first provided it ....ith a preliminary statement of ability to
comply ....ith the requirements of these regulations.
E. Complianc'e ....ith the pr'ovisions 0 f Section 3, the regulations set forth in 24 CFR,
and all applicable rules and orders of the Department issued thereunder pdo:: co
the execution of the contract, shall be a condition of the Feder!l financial
assistance provided to the project, binding upon the applicant or recipient for
such assistance, its successors, 'and assigns. Failure to fulfill these
requirements shali subject the applicant or recipient, its contractors and sub-
contractors, its successors, and assigns to those sanctions specified by the
grant or loan agreement or contract through ~hich Federal assistance is provided,
and to such sanctions as are specified by 24 eFR 135.
E-l
A?PE1\DIX F
NOTIC:: o:l_'QUIP.!:.."1Eh'1' fOR kfrIR"1A'rlVE hCTl I
TO ENSURE EQUhL EMPLOYY.!:NT OPPORT\JNI T'f
(EXECUTTVE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "Equal Opportunity
Clause" and the "St.a.nda.J:d federal Eq~l Dnployment Opportunity ConsU\JC-
tion Con~act Specifications~ set forth herein.
2. The goals and timetables for minority and female participation, expressed
in percentage ter=~ for the Contractor's aggregate workforce in each
~ade on all consL-uction work in the covered area, are as follows:
A. Goals for Female utilization, hll Trades:
AREA COVERED
Goals for Women apply nation~ide.
GOALS AHD'T!METABLES
Timetable
Goals
(percen t)
From }l.p::- . 1, 1978 until Me..::- . 31, 1979.... 3.1
F::-om Ap::-. 1, 1979 until l1ar. 31, 1980 . . . . 5.1
From Apr. 1, 1980 until 1'1.a::- . 31, 1981. . . . 6.9
B. Goals fo::- P~noritv U~liza~ion:
TAMP.b.-ST. PETI:P.5BURG, FLA., AR.::A
Area coverec: P~llsborou~h, Pasco, and Pi~ellas
Coun ties, !'la.
Goals and Timec.a.blesl
Trade
Goal
(pe::-cen t)
..
All. . . . . . . . . . . . . . . . . . . . . . . . . .
17.9'
lFor ~e life of the project.
Tnese goals are applicable to all the Con~actor's const--uc~on work
(whe~~er or not it is Federal or federally assisted) performed in the
covered area.
The Contractor's co=~liance wi~ the Exec~~ve Order and ~~e reaulations
in 41 C:? Part 60-4 ~hall be based on its i~?lementation of ~~e-Equal
O?port~~ity Clause, specific affi=mative action obligations re~ired by
F-l
t...~e specifica~ions sel' fo:-t...'i !..n ~l C!'R 60-4.3 (a), an 1:.5 effort.s t.o :r.eet.
the goals established for the geographical area ~he~e ~~e cont:act.
<e,ulting from thi' ,olicitation i, to be perfonned. The ho~' of c~nority
and fexr.ale employv\Cnt. and uaining !Dust be substantially \.:......iform thro\.lghout.
the length of the contract, and in each uade, a.nd the conUact.Or shall
~e a good fai~' effort to .employ cinoritie, and women evenly on each of
it:S projec~, 7he t.ransfer of. minorit=y or female employees or t:ainees
from contractor to Contractor or froQ project to project for t...~e sole
p~'e of meeting the cont:actor', goal' ,hall be a violation of tha
cont:act, t...~e Execucive Order and t...~e regulations in 41 crR Part 60-4.
Compliance ~ith t...~e goals ~il1 be measured against the total ~ork ho~s
performed.
3. The Con tr actor ,hall provide .-r Hun noti fica tion to the oi rc c t or a! ~'e
Office of FederaJ. Contract Compliance programs \oIi thin 10 \oIor}~ing days of
a~ard of any cons~ction subcontract in excess of S10,000 at any tier
for conS auction ~ork under the contract. resulting frolD tJ1is solici ta tion.
The nocification shall list t...~e name, addresS and telephone number of the
subcontractor; employer identification number; es~~ted dollar amo~t of
the subcontract; estimated starting and completion dates of the subcontract'
and the geographical area in ~hich the contract is to be perfo~ed.
4. '.5 us ed in this Notic e. and in ~"e contrac t <esul ting f=om th.i, '0 li ci ta ti on,
the "covered area" is Pinellas Coun~, :-lorida.
60-4.3 (a)
During the performance of this contract, the contractor agrees as follo\ols:
EQUAL OPPORTUNITY CLAUSE
1. Tne contractor ~ll not discriminate against.any employee or applicant
for emplo~ent because of race, color, religion, seX, or national origin.
Tne contractor ~ill u0~e affi=mative a~ti~n to enSure t...~at applicants are
employed, and thot employee' <=e treoted du=ing eDplo>~en< wi~;out =egard
to their race, coler, religion, seX, or national origin. Such action shall
incluce, ~ut not be li~ted to the following: Employment, upgrading,
demotion, or transfer; rec=-ui cnent 0= recrui t.,11ent advert.ising; layoff or
terminat.ipn, rates of payor other forms of comper.sation; and selection
for training, including apprenticeshiP. The cont:.rac,;:or ag=ees to post
in conspicuous places, available to employees anc applica.nt.s for e1l:ploy-
ment, notices to be provided setting forth the provisions of this non-
discr~nation clause.
2. The contractoc ~ill, in all solicitatior~ or aevertiseoents for employees
placed by or on behalf of t...~e contractor, s~te ~~at all o\.lalified
. .
applicants will receive consideration for em?loyment ~ithout regard to
race, color, religion, sex, or national origin.
3. Tne cont=actor ~ill send to each labor union or representative of workers
~ith ~hich he has a collective bargaining agreement or other contract or
~derstanding, a notice to De provided advising the said labor union or
~o=kers' representatives of the. contractor's co~~~~ts un6er this
section, and shall post copies of ~~e notice in conspicuous places avail-
ab~e to employees and applicants for employmer.t.
F-2
c
'!'he cont.=~ct.or .....ill _l~?lY .....:.~"l all provisions of Exe_l_ive Or::er 112~6
of SepteJT'ber 2~, 1965, and of the rules, regulations; and relevant orders
of the Secret~ of Labor.
5. The contractor will furnish all information and reports re~red by
Executive Order 11246 of Septerrber 24,1965, .and by rules, regulations,
and orders of ~~e Secretary of Labor, or pu=suant w"leretD, and will pe~t
access to his books, records, and accounts by L"le a~~r.istering agency
and the Secretary of Labor for purposes of investigaticn to ascert.:.in
compliance with such rules, regulations, And orders.
6. In the event of the contractor's non-compliance wiw"l the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or
orders, this contract may be canceled, tennina ted, or suspended in whole
or in part and the contractor may be declared ineligible for further
Goverr.roent contracts or federally a.ssisted constrUc,::ion contracts in
accordance with procedures authori~ed in Executive Order 11246 of
September 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
7. l~e contractor will include w~e portion of the sentence ~ediate1y
preceding paragraph (1) and the provisions of paragraphs (1) ~~Jough (7)
in every subcontract or purchase orcer unless exempted by rules, regula-
tions, or orders of the Secretary of Labor issued pursuant to section
204 ofE.xecutive Order 11246 of September 24, 1965, so that such p::ovisions
will be bincing upon each subcontractor or vendor. The contract== will
take such action with respect to any subcontract or pu=chase order a5
w~e aaministering agency may direct as a means of enforcing such provisions,
including sanctions for non-compliance: provided, hO'Wever, That in t')e
eV,ent: a contractor l:>ecomes involved in, or is d1reatened with, litigation
with a ~ubcont=actor or vendor as a result of such direction by the
ad."llnistering agency, the con::ractor mal' z-equest the United St.3."Ces to enter
into such litigation to protect the inte~ests of the United States.
S'IANDj:.'p.D F:E:m:.-:V.L EQUAL DlPLOYM-l:"NT OPPORTUNITY CONSTP,UCTION CONTRACT
SPEC!.!'IG.TIONS (EX:::CUTIVE ORDER 11246)
1. ;'.5 used in ~~ese specifications:
a. ftCovered area" means t.he geoS72phical area des cribed in w~e soliei t:.a-
tian fro~ which w~is contract resulted.
b. "Director" mea..'"lS Directo::, Office of Federal Contract Complia..4;ce
P=ogr~s, Onited States Department of Laber, or a..~y person to ~ho~
the Director delegates authori~.
c. "~?loyer identification n~ber" me~.5 the Federal Social Security
nu=ber used on ~~e ~loyer's Quarterly Federal Tax Retu~, O. S.
Treasu...ry Depar';:JDer.t. Fo:::n 9~1.,
C. "P..inori ty" includes:
F-3
(1 )
I'
Black (all persons having
hf=ican racial groupS not
origins in any of t.."J Black
of Hispanic originT;
(2) Hispanic (all persons of Mexic~, Puer~ Rican, Cuban,
Central or South Amer~can or other Spanish Culture or
origin, regar~less of race) I
(31 Asian and Pacific Islander (<:11 persons having origins
in Any of the original peoples of t..~e far East, Southeast
Asia, the Indian Subcontinent, or the Pacific Islands) U1d
(4) American Indian or Alaskan Native (all persons having
origins in any of t.he original peoples of NorU1 Junerica 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 cons~~ction trade, it shall
physically include in each subcontract in excess of SlO,OOO the provi-
$tons of these specifications and the Notice which contAins ~~e ~p-
pllcable goals for minority and female participation and which is set
forth in the solicitations from which this contract resulted.
3. If the Contractor is participating (pursuant to 41 CFR 60-4.5) in a
Hometo~.Plan approved by ~~e o. S. Department of Labor in the covered
area either individually or through an association, its affirmative action
obligations on all work in the Plan area (including goals and timetables)
shall be in accordance with that Plan for those trades ~hich have unions
participating in the Plan. Contractors must be able to demonstrate their
participation in and compliance wi~~ the provisions of any such Hometo~
plan. Each Contractor or Subcontractor participating in an approved Plan
is indiviciually required to comply with its obligations u...,der .t:'1e ::::::0
clause, and to make a good fai~~ e.ffort to achieve each goal uncer the
Plan in each trade in which it has employees. ~ne overall good faith
perfo~nce by o~~er Contractors or Subcontractors toward a goal in an
approved Plan does not eX,cuse any covered Contractor I s or Subcontract.or's
failu=e to take good faith efforts to achieve ~~e plan goals andt.ime-
table.
4. The Contractor shall i~leroent. the specific affirmative action standarcs
provided in paragraphs Ja t.h::ough P 0: ~~ese specifications. The goals
se': fo::1:h in the solicit..ation f:rom ....hich this con-.:.=act resulted a::e
exp::essed as percent.ages of the total hou=s of employment. and training
of minori=r and female ~tili2ation the Contractor should reason~y be
able to achieve in each const-~ctiori trade in -vhich 'i't has employees in
~e covered area. The Contractor is e~7ected to make substantially
unifo~ progress toward its goals in each craft during the period
specified.
5. Neither the provisions of any collective bargaining agreement, nor tbe
failure by a ll.'"lion wi U1 whom t..'1e Contractor has a collec'=.i ve bars-aining
agreement, to refer either minorities 0:: ....om~ shall ~:cuse t..~e Cont=ac-
tor's obligatio~~ under these specifications, Executive Order 11246, or
the re~~lations promulgat.ed purs~ant thereto.
F-4
o. ... o::c<.;:; :=:: :,.;,e :-,:;;:,~';;;::/~':':" :'::d_;.:":.:; :::'-'::5 <..: ""rr~'-"--"-'> -----.".'-.>
U) be cou."'l'=.ec in meet'l ~le goals, such apprentices ~!"_:..=ain~es m~st,
. be employee by the c=. ...c~c:: c~ing ~'1e t,raining pe:.-ic.. -1 and t..'r)e
Contrac'=.o:: ~ust have ffiade a co~mi~~ent to employ the app~entices and
trainees at the completion of their training, subject to the avail~il-
ity of employment opportunities. - Trainees ~ust be trained pursuant to
training programs ~pproved by the U. S. Depar~ent of Labor.
7. The Contractor shall take specific affirmative actions to ensure equal
employment oppo::t~~ity. ~e evaluation of the Contractor's co~liance
....ith these si,.ecifications. shall be based upon its effort to achieve
max..iJ:num resul ts from its actions. The Contractor shall document these
efforts fully, and shall implement affirmative action stepS at least as
extensive as the following:
a. Ensure and maintain a working environment free of harrassment,
intimidation, and coercion at all sites, and in all facilities at
....hic.h the Contractor's employees are assigned to ....ork. The
Cont.ractor, where possible, ....ill assign twO or morc....'omen to each
const-~ction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are awa=e of and carry out the Contractor's obligation to ~ain~in
such a ....orking environment, ....ith specific attention to minority or
female individuals ....orking at such sites or in such facilities.
b. Establish and maintain a current list of minority and female
recruitment sources, provide ....ritten notification to minority and
female recruitment sources and to community organizations ....hen the
Cont:actor or its unions have employment opportunities available,
and maintain a record of ~~e organizations' response~.
c. Maintain a cuirent file of the names, addresses and telephone
n~ers of each minority and female off-the-street applicant and
minority or female refer::al from a union, a rec~i~ent source or
cotn:l)unity organization and of ....ha~ 'action ....as taken ....it..'1 respect
to each such individual. Ii such individual was sent to t..'1e U.lion
hiring hall for reierral and was not r~ferred back to ~'1e Contractor
by t..'1e union or, if referred, not employed by the Contractor, t..'1is
shall be documented in the file ~ith the reason therefor, along ....ith
whatever additional actions the Contractor may have taken.
"\
d.
Provide immediate written notification to the Director ~hen the
union or ~~ior.s ~i~'1 which the Con~actor has a collective
bargaining agreement has not referred to the Con~actor a minority
person or woman sent by ~~e Cont=actor, or ....hen the Contractor has
ot..'lcr info:::-ma don that the \:.."lion =eferral process has iI:lpeded ~the
Con~actor's ~fforts to meet its obligations.
e. Develop on-the-job training opportunities and/or participate in
training programs for the area ~hich expressly include minorities
and women, including upgrading programs and apprenticeship and
trainee programs relevant to the Contractor's employment needs,
esp€cially those programs f\:..'1ded or approved by the Depa=tment of
Labor. The Contractor shall provide notice of these programs to
the sources compiled under 7b above.
f. Disseminate the Contractor' 5 EEO policy by providing notice of the
policy to unions and t=aining programs and requesting ~~eir coope::a-
don in assisting the Contractor in ~eeting its E~O obligations; by
including it in any policy ~~nual and collective bargaining agreement; by
F-5
I
I
publicizing it in the co~y newspaper, ~r~u~l repo~, etc.; by
specific re\~eW of the policy with ~ll management personnel and
~~th ~ll minority and f~le employees ~t least once a year; And
by pas ting the company EEO policy on bulle tin boards acces sible
to All e1l1ployees At eAch location where const-"'"Uction work is
performed.
,g. Review, at least annually, the company's 0:0 policy and affi::1l".ative
action obligations under these specifications wi~~ all employees
having any responsibility for hiring, assignment, layoff, te~ina-
tion or o~~er emplo}~ent decisions including specific review of
these i te.ms Io'i d. onsi te supervisory personnel such as Superintendents,
General Foremen, etc., prior 'to ~~e ini~ation of construction work
at any job site. A. ....-rittenrecord shall be made and m.aint.ained
identifying the time and place of these meetings, persons attending,
subject D~tter discussed, and disposition of ~~e subject ~~tter.
h. Dissemnate the Contractor's EEO policy externally by including
it in any -dve'rtising in the newS media, specifically including
minority and female newS media, and providing ~ritten notification
to and di.scussing the Contractor's 0:0 policy with other Contrac-
t..qrs and Subcontractors with ~hom 'the Contractor does or a.'ltici-
pates doing business.
i. Direct its recrui ';:!Dent efforts, bo th oral and w:::-i tten, to minori'=Y,
.female and cOD1lllunity organizations, to schools wi':..'1 minority and
female students and to minority and female recruitoent and t.raining
o~ganizations serving the Contractor's rec=uitment area and employ-
ment needs ~ Not later than one mon"th prior to ,d.e date for the
ac=ep~ce of applications for apprenticeship or other training
by any rec=uitment source, the Contractor shall send written
notification to organizations such as L~e above describing ~~e
openings, screening procedures, and tests to be used in the selection
process.
j. Encourage present minority and female employees to rec~t other
minority persons and women and, ~here reasonable, provide after
school, s~er and vacation em?lo!~ent to minority and f~~le youth
bo~'1 on the site"and in other a=eas of a Contrac~or's workforce.
'k. validate all tes~ and o~er selec~on requirements ~here ~~e=e
is an obliga~on to do so ~~der.~l CTR par~ 60-3.
..".
1. Conduct, at least annually, an invento~ and evaluation at least of
of all minority and female persor~el for ?::=omotional opportur.ities
and encourage ~~ese employees to seek or to prepare for, L~ou9h
appropriate training, etc., such o??Or~~ities
I:l. =::'.St:=e"d1a t seniori ty practices, job classifications, work assign'-
,ments and otber personnel practices, do no~ have a discrizi.:12. tory
effect by continually monitoring all personnel and ~T.?loyment
::=elated activities to ensure that t.he =::::0 policy and the Contractor's
F-6
1\
obli9a~ion' uncer the,e ,pecitica~ion' are being c_':,~j ou~.
n. Ensure that All facilities and company ac~vities are non-
segrated except that sepaIate or single-user toilet and
necessary changing facili~ies shall be provided ~o assure
privacy between the sexes.
o. Document and ~intain a record of all solicitations of of:ers
for subcontrActS from minority and female cons~-uction
contractors and suppliers, including circulation of solicitations
to cinority and female contractor associations ~d other business
as socia tions .
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 associatior~
~hich assist in fulfilling one or wore of their affirmative action
obligations (7a through p). The efforts of a contractor association,
'join t con t;:"actcr-union, con tractor-communi t:y, or other similar g::-oup
of which the contractor is a member and participant, ::l.Ay be assert.ed
as fulfilling anyone or more of its obligations under 7a through P
of these Specifications provided that the contractor actively partic-
ipates ~n the group, makes every effort to assure that the group has
a positive impact on the employment of minorities a~d wo~en in the
indust-J" ensu.res that the concrete benefits of the program are
reflected :in the Contractor 's ~nori ty and female I./o:d:.force partic-
ipation, makes a good faith effort to meet its individual goals and
timetables, and can provide accesS to documentation which demonstrates
the effective~ess of actions taken on behalf of the Contractor. ~ne
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 ~~norities and a separate single goal for I./omen have
been established. The Contractor, however, is required to provide
equal emp~oyment opportunity and to take affirmative action for all
minority groups, both male and fez:-.~le, and all women, both t:'~nori';;y
and non-minority. Consequently, ~~e Contractor may be in violation
of the =:xecuti ve Order if a particular group is eJ!lployed in a substan-
tially disparate m~~ne= (for example, even ~~ough the Contractor has
achieved its gocls for women generally, the Contrac~or ~~y be in
violation of the Executive Order i= a specific minority group o~ women
is underutilized).
lO_ The Contrac~or shall not use the goals and timetables or af=irmative
action s~andards to discrimina~e agains~ any person because of race,
color, religion, sex, or national origin.
ll. The Contractor shall not enter into any subcontract wi~~ any person
or fi~ debarred from Government contracts pursuant to Executive
OrdE;:!;" 11246.
F-7
12.
rhe Con <: actO r 'halearry oc ~ ,cch "nc ~ion' and , } ., d., for
violacion of chese specificatior~ and of the Equ~l Opportur.i~ Clause,
.including sus?ension, termination and ~ancellation of existing s~-
conUacU as cay be imposed or ordered pursuanc to Executive Order
11246,606 amended, and its i~plement.ing regulations, by che Office
of Federal Contract COll1pli'ance Programs. hrly Con tractor .,.,ho fails
to carry out such sanctions and penalties shall be in violation of
these specifications and Executive order 112~6, as amended.
The Contractor, in fulfilling i t.s obliga dons under t.~ese specifica dons,
shall implement specific affirmative action stepS, at least as exten-
sive as those standards prescribed in paragraph 7 of t.~ese specifica-
tions, so as to achieve maximum results from i.ts efforts to ensure
equal employment opportWii ty. If the Contractor fails to comply \Ii th
the requirements of the ExecUtive Order, the implementing regula dons,
or these specifications, the Director shall proceed in accordance .,.,it.~
41 CFR 60-4.8.
The Contractor shall designate a responsible official to ~nitor all
emploY1l\ent related activity to ensu=e that che company EEO policy is
being carried out, to submit reportS relating to the provisions hereof
as may be required by the Government and to keep records. Records
shall at least include for each employee the name, address, telephone
numbers, cons~"\lction trade, Wiion affiliation if any, el:lployee
identification number .,.,hen assigned, social secu=ity number, race,
sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer),
dates of changes in status, hours .,.,orked per .,.,eek in the indicated
trade, rate of pay, and locations at .,.,hich the .,.,ork.,.,as performed.
Records shall be maintained in an easily ~~derstandable and retrievable
fonn; ho.,.,ever, to the degree that existing records satisfy this
requirement, contractors shall not be required to ~aintain separate
records.
13.
14.
15. Nothing herein provided shall be const=ued as a limit.ation upon the
application of other la~s .,.,hich establish ci=ferent stancards of
compliance or upon the application of requirements for ~~e hi=ing of
local or other area residents (e.g., those under ~~e Public works
E~ployment Act of 1977 and 'the comm~~ity Development ~lock Grant
program) .
.
F-8
I
APPENDIX G
OMB
CircJ.,11ar A-IIO
.)
4
1
,
Office of Management and Budget Circular A-110 (7/30/76)
A-110:1
OFFICE OF MANAGEMENT AND
BUDGET
,IClrcular No. ^-IIOl
GRANTS AND AGREEMENTS WITH INSTI.
TUTIONS OF HIGHER EDUCATION,
HOSPITALS. AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
JULY 1, 1976.
To the hews of executive departments
and estnblishments.
Subject: Uniform administrativc rc-
Quirements for grants and ot.hcr agrec-
ments wit.h tnstit.uLions of hi~her edu-
catton, hospitals. and ot.her nonprofit
organizations
1. PlLrposc.-This Circular' promul-
gates st.andards for obta.ining consist.cn-
cy nnd unlformit)' among Federal agcn-
cies tn Ibe administration of grants to.
and other agreements with. public a.nd
private Institutions of higher educa.tlon.
public and private hospit.als. and other
quasi-public and private nonprofit or-
ganiza.tions. This Circular does not apply
to grants, cont.racts. or other agreements
,between the Federal Government and
units of State or loca.l governments
covered by Federal Management Cir-
cular 74-7.
2. EO ectilJe date.- The sta.ndards in
Ibe attachments to this Circular will 'be
a.pplled as soon as practicable but not
later than January I, 1977.
3. SILPerse.ssion.-This Circular res-
ctnds and replaces parts III and IV of
the APpendix to Federal Management
Ctrcula.r 73-7. Administration of college
and university resea.rch grants.
4. Policy intcnt.-The uniform stand.
ards and requirements included in' the
a.ttachments.to this Circular replace the
varying and often confiicting require-
ments thB.t have been Imposed by Fed-
eral agencies as condttions of grants and
other agreements with reciplen~.
5. APplicability and. scopc.-Except as
provided belOVo', the stands.rds promul-
gated by. !.his Circular a.re applicable to
all Federe.l agenctes. If any statue ex-
pressly prescribes policies or specific re-
'quirements !.hat dlITer from !.he stand-
ards prOVided herein. the provisions of
the statu te shall govern.
The provisions of the attachments of
this Circular shall be applied to subre-
clplents performing substantive work
under grants that a.re passed through or
awarded b)' the primary recipient if such
subreciplents are organiza.tions de-
scribed tn paragraph l.
6. De/lnitions.
a. The term "grant" means money or
property provided in lieu of money paid
or furnished by the Federe.l Government
to recipients under programs tha.t pro-
vide financial assistance or that provide
support or stimulation to' accomplish a
publiC purpose. The term "olber agree-
ments" does not tnclude contracts which
are required to be entered into and ad-
mintstered under procurcment laws and
regulattons. Grants and other agree-
ments exclude (a) t.echnical assistance
~;o.~_:ms. ~',hlch providc scr...icc~ imtead
gcncral revenue sharing. 10:J.ns. 10Ul
guarantees. or insurance. and (c) direct.
pa~711cnL~ of any kind t.o individuals.
b. The term "recipient" includcs t.he
follo".'ing t.ypcs of nonprofit or\:aniz.'1.-
Lions t.hat. are recei\'ing Federal funds
from a Fedcral 84!ency or t.hrough R
Sl.at.c or local governmcnt.:
Public and private Institutions of high-
er educat.ion: pUblic and private hos-
pit..'1.1s: a.nd ot.hcr quasi-public and pri-
vat.c nonprofit organizaLions such as (but
not. limited to) commlUlit.y ll,ction agcn-
cies. resea.rch lnstitut.cs. educllt.ional as-
socia-Lions, and hcalth centers.
The term does not include foreign or
inLcrna Lional ,organizations (such as
agencies of the Untt.ed N.'1.t.ionsl and
Govcrnment.-owned cont.ractor opcr.'1.t.ed
f acillt.ics or research cent.ers providing
continued support. for mission-oriented.
large scale programs Ibat are Govcrn-
ment-owned or controlled. or nre de-,
signed as federally-fundcd resenrch and
development cent.ers.
7. ReQlLCsts lor e.:z:ccptiOn5.-The Office
of Management and Budget. ma,y grnnt
exceptions from the requirements of t.his
Circular 'J,'hen exceptions are not pro-
hibit.ed under exisUng laws.
However. In thc tnterest of maximum
uniformity, exceptions from tile re-
Quirements of the Circular 'l':'ill be per-
mit.ted only In unusual CMes. Agencies
may apply more restrictive requirements
t.o a class of recipients ~'hen appro\'ed by
the Otfice of Mana.gemenl. and Budget.
8. Attcu::h.ments.-The standards pro-
mulgat.ed by this Circular a.re set forth
in the Attachments. which are:
Attachment ^ cuh"depoSltorles.
^ttAchment B Bonding And InsurAnce.
^tt..chment C RetentIon ..nd cust.odlAI re-
quirements for records.
^ttachmen.l. D PT~r&m Income.
^tl.Achment E Cost shr>rlng and m..tehlng.
^tt..ehment F' StAndArds lor !lnAncl..1 mAn-
..gement systenu.
^UAchmenl G Flnancl..1 reportIng require-
ments.
^ttachment H Monitoring and reporting
prognm perlorma.nce.
^tlACnment I Payment requlremf:nts.
^ttAchment J ReviSion of ftn..ncl..l plans.
^l.l.a.Chmen,~ K Closeout procedures.
Att..chmenl L SuspensIon ..nd terminatIon
procedures.
^l.l.&chment M Standard form for applrlng
lor federal a..'<Slstance.
^ttAchment N Property man1L3ement stAnd-
ards.
^ttAchment 0 PTocurement standards.
9. E.:z:ceptions lor certain recipicn.is.-
Notwithstanding the provisiOns of para-
graph 7 if an applicant/recipient has a
hlst.ory of poor performance. is not fi-
nancia.lly st.able. or 11.5 management sys-
tem does not meet the standards pre-
scribed in the Circular. Federal agencies
may Impose addit.ional requirements as
needed prClvided that such applkant/
recipient is notitled in writ.ing as to:
a. Why the additional standards are
being imposed:
b. what corrective action is needed.
Copies of such notifications shall be
sent to the otnce of Managemcnt and
Budget and other agencies funding that
recipient at L'le sa.me time t.he rcclpicnt.
10. Rcsponsibili (ies ,-Agencies rc~pon-
sible for adminLstering programs Ulat in-
volve !;rants and ot.hcr :lgrecments with
reciplent.s shall issue t.he appropriate
regulat.lons necessary to implement. t.he
provisions of t.his Circular. All port.ions
of such regulat.iollS that involve rccord-
keeping :l.Od/or reporting reQuiremcnt.s
subjcct. to the provisions of the Federa.l
R.cports Act and OMB Circular A-40
must, bc submlt.ted to OMB for clc:1.Tilnce
beforc bcing introduccd into use. Upon
,request all regulaLiollS nnd instruct.iom
implemcnt.ing this Circular shall be
furnished t.o tlle Omce of Management.
and Budgel. Agcnc:les shall also desig-
nalc an omcial t.o scrve as t.he agency
represent.at.ive on matlers relaLing to lhe
!mplemenLat.ionof t.hls Circular. 'IllC
name and title of such represent.ative
shall b.e fumL~hcd t.o tile Office of Mnn-
:l!;cment and Budget not. later than Au-
~ust 30. 1976.
11. lnqlLirics.-Purthcr inlormation
concerning Ibis Circula.r may be obt.ained
by contract.ing !.he Financial Mnna!:e-
mcnt. Branch, Budget Review Division.
Omce of Management. and Budget,
Washingt.on, D.C. 20503, t.elephonc 395-
3993.
JIoMt:S T. LYNN,
Director.
^TrACHMr.NT ^.--CI1lCVLAn No. ^-110
CASH oC'QSITOan:s
1. This attachment set.s lor-th st..ndards
governln" the use 01 banks and other In-
stItutions .... deposltorlcs 01 lunc1.~ "o"anced
under gr..nt.s and other agreemen1.S.
2. Except lor sltu..tlons described In pa.r..-
sraphs 3. ~, and 5. no Federal "SponsorIng
agency shall:
a. Require physical segreg..tlon o( c/LSh de-
positorIes lor funds which ..re provided to ..
reclpleDit.
b. Establish ..n,. ellSlblllt,' requlr,ement.s
Jor ca.sh deposltorl~.~ lor lunds ",'hlch are pro-
vided to a recIpient. '.
3.}o. separal., t>ank a"count shall be require
,,'hen .appllcable letter-ol.credll asrecments
provide that drawdo,,'ns ",'III be mede ",.hen
the reclplent's checkS are presented lo the
bank lor pl\yment.
~. ^ny IDoneys adVAnced to .. recIpient
,,'hlch are sub)e:,l to tht contr~~ or regula-
'.lon 01 the UnIted Slates or ..ny 01 Its officers.
rsents or employecs' (publlC money'; is de.
tined In Treasurr CIrcular No. l.iS, ~
amended) must be depOSIl'-d In a ban'l;, with
Federal Deposll Insurance Corporation
(FDIC) Insur..nc~ coverage ..nd tne h..lance
exceeding the FDIC coveuge must be col-
lAterally secured,
5. ConsIstent ....lth the national 1:0..1 01
expanding the opportunitIes lor mlnorlt,'
business enterprises. reCipients ..nd "\Ib-
reCipients shall be encoura!;~d .to use minor.
It). banks (a bank ",'hlch Is o,,'ned at least 50
percent by minorIty sroup member..).
^'l"I"ACHME:NT B,-CI1lCOLA" No. ^-IIO
BO,.,OJ""C AND J"SUllA."'CC
:. This attachment set.s lorth bond In, IInd
Insurance requIrements lor gr..nt.s and other
a;;Teement& ...1th reclplcnts, No other bond.
Ing and Insurance requlremen.\.S ..h..ll be Im-
poseO other than those normally required by
the reCipient.
2, Except as otherwise required br Ill..... a
srant or other agreement that requlrell the
contrl\ctlng (or subcontrl\ctlng) lor con-
~tnJC"tlon or ro.c1n~y lr:"'lpro'C"em~nl.~ shf\l1 pro-
. "- - - -.' - ~.-. . - , .,,.... -. ,. "
,
Office of Management and Budget Circular A-110 (7/30/76)
qulremeots relp.tl~ to 'old gu&rant.eU. per-
10rm&Dce bOndS. ~d paymeot bOodS uolees
tbe construcuon ccotrlloCt or subcootract ex-
c.eea. Uoo.ooo. For th06eoorlltract.& or sub-
coot..-.c1.S exceedlog '100.000. th. T.d.....1
agency IDAY aCC.pt .the bOnding poliCY aod
requlremenl.a o( tbe gran Lee provided tbe
l"eder..1 ..genc)" h'" m..de'" deLermlnaUon
tbat the Governmeot', 10L.er....t la ..dequaL.ely
proLClcted. If such ~ deL.ermlnatlon 'oIlS not
been m&de. the mlolmum requlremeola shall
be &S (ollows:
... A trl4 g1J<va~lee Irom each bl.<UUr equlll-
ale..t 10 flue percent 01 Ihe b~ priCe.-
Tbe "'old gUl\rao.tee" Shkn cooslat 01 a firm
commitment such "-s a 'old bOnd. certilled
cbeck. or oLher negoUable 10strumenL kC-
companying a 'old aB &&surance th..t the bid-
der will. upon aCcepLAnce 01 hla 'old. execut.e
such contrlloCtuAl documenLll ... mAY be re-
quired wl!.hln the Ume specified.
b. A per/orma....:c bond 0" the parI 01 the
co..lraclor lor 100 percenl of Ihe contract
prlce.-A "perloimAoce bood" Is one executed
In connectIon ....Itb a contr..ct to secure lul-
nllment o( &11 the con tractor's obligations
under such contrl\.oCt.
c. .A paVmenl bond 0" the part 01 the con-
tractor lor JOO perccnt of the CO'f\tract
;r.tce.-A "paymeot bOod" Is ooe executed 10
coooectlon wtth a cootract to aBsure pay-
ment .... required by Ia"" of all penoons sup-
plyl.ng labOr and mat..erlal In the executloo of
the work provided lor In tbe contract.
3. Where the Pederal Government lfUaran-
teea or lnaurea tn.. repaymeot of mooey
bOrro...ed by the recipient. Ule l"e<lef'll,1
agency. at Ita dlecreUon, may require ..ae-
qu..t..e bondlog a.od lnauraoce It tbe bOodU1g
..od lnauu.Oce requlremenLll of the recipient
Arc not deemc<1 &dequ..t..e to prot.eet tbe In-
t..ereat of tbe l"e<leral Governmeot.
~. Tbe 1"1od.eral spoOJ>Orlog &Geocy may re-
quire ~equate lldellty bOnd cover&Ge ....here
Lh. reclpleot b.... no cover&Ge Aod the bOnd la
o....ded ItO protect tbe Governmeot's loter....t.
6. Where bOndS are required In tbe sltua-
tlona dellCrl~d above. tbe bOndS sh..lI be 0'0-
Ulned lrom compa.ol.... boldlng cert.llleat.ee of
authority .... aceepUble auretlea (31 Cl"R
2:23).
A'M'''CHJoCI:KT C.--cmC'tlLAA No. A-110
.. rn:HT%01'< "I'll> C'tlSTOOr..u. u.Q tnILX >a:HTS l"Oa
..ICCOlUlS
l. Tl:lla ..tta..ebm.nt aeLll (ortb record reL.eo-
tlon requlremeol.a (or &fa.ota and ol.ber ~ee-
roeoLll ...Il.b reelplenta. Fede"l apoc.aorlOg
""",,o.ele:a sball DOt Impose any record reteo-
uon requlrementa upon reC1plenta oUler than
tbOM des<:!'lbed 'oelo....
2. Exceltl for pa....p-apb 1. thla atu.c.hment
al&o applle:a to aubreclplents .... re/erre<! to
In pa.ragr&;)h 6 o( tbe baBlC circular.
3. l"'lna.ocloJ recorda, aupportlng documenLll
atatlAtlcoJ recordS. Lnd oJl otber recorda pertl~
n.nt to ao a.!;TCement &hoJ1 be ret.&1oed lor a
period of threil ye&Z'll. ....Ith the 10110...1116
quoJl~ca.tlooa :
~ It a.oy lIt1ga.tlon. clAim or audit IA started
be. ore the e:t;ll....tlon 01 the 3-yea.r perIod the
recora. &ball be retained until all IItlg..tiooa
cl..lma. or a.udlt t1oc11ng-s I.ovol1"lng tbe.reeor~
bAve '0....0 resolved.
'0. Records (or o~o.xpcnd...ble pro;:>erty e.c:-
qUlred. Wlt.I'I l"'e<IeraJ tundS &'ooJl be r.talned
lor S yeo.n &fter I ~ t1n-.l <U.posltlon
c. Wheo rt'<"orda a.r. traDAlerred ~ or m-.lo-
Uloed by tbe :!"e<!era.1 <<poDlOOrlng agency the
~?ear nL.eotlon requlrem.eot IA oot ..pp'lIca-
: to tbo recipient.
c1& . The retentloo period SLa..~ (rom !.he
.~ o( tbe eubau...alon or the llnal e..rJ>endJ-
;"en report or. (or gTlUlta a.od ol.ber ~~.
ts tbat are nnewe<! a.nnuoJly (rom C1
~...... or the Aubmla.aloo ot the &.ZUlu':;
.Ulo..nclal 5ta.tWl r..port.
5. ~clplent organiZAtions should be a.U-
thorlzed b)' the ~'ede....l sponsoring ,,€ency,
It th.)' 50 deslr.. Lo subsLltuLe mlcrot11m
ClOpl... In lleu 01 Orl,lnAl records.
8. Tbe l"e<lera.! sponaorLIl6 ~enC)' shall r.-
quest tranal.r or eertaln records \.0 11.5 cw-
tod)' lrom recipient oq:Lnlr.&tlODA ....ben It
deLermlnes th..t the recorda poascsa long-
term reL.eotlon v..lue. Ho....ever. In order to
avoid duplicate record-lt~l.ng. a Fede,....1
5ponsorl.ng &Gency ma.y make a.rra.ngements
...1tb recelplent organlZAtlo04 to reLlLIO ..ny
recordS that ..ro con tlnuoUIIlr needc<1 lor
JOlot we.
7. The head '01 the Federal sponsoring ...gen-
c)' a.nd !.he CompLroller Oen.ral o( the United
Slates. or any 01 their duly authorized repr.-
seolatlVell. sha.1I ha.v. a.ccce.s to IU\)' pertinent
boOk.s. documenl.'l. papers. &od recorda o( the
reclplen t org..nlza.llOn ..nd their aubr.-
clpleol.'l to IDJl.ke I\udlts, ex..mloatlODfi, 01-
cerpl.S ..nd tr&Oacrlpts.
8, 'Onicu oth.r....lse required by I a..... 00
P'ederal sponaorlng ..geocy ...'1 oJ 1 pllloCe r.-
5Lrlctlo04 on recipient organIzatiOns tOAt will
limIt publiC IloCC~ to the recordS ot recipient
organlZAtlOna that I\re pertinent to .. gra.ot
or aGTeemeot excep~ when the ageoey can
demooatrate th..t auch recorcl.s mUllt bc kept
con.Odentla.\ &od ....ould have been ex~pted
(rom dlacloeure pUl'lluant to.the P'reedom o(
In(ormatloO Act (6 U..s.C. 662) U the reeordB
had 'oeloogc<1 to tbe Feder..1 sponaortng
~.ocr.
A<r"CHWl:HT o.--cmcuLAA No. A-liD
PllOGI\"W U'COWX
1. p'ederal apoOJ>Orln& ~ocles &ball Bopply
the atAodardB set 10rUl 10 thla ..tte.cbment In
requiring reclpleot organlzallons loO a.ccount
lor pro&f&m Income related to projects
Oo.anced 10 wbole or In p&rt w1th P'e<!eral
(unda. ProgT'&In Income repreeeol.& groM 10-
come ....rned by tbe recipIent (rom tbe lod-
era.1Iy supported a.ctlvltl..... Sucb carnln", ex-
clude Intere:at earned on a.dva.oce:a and may
loclude. but .....U1 not be limited to. locome
(rom aenlce (ees. sale or commo<11tlee. uaage
or renLal (....., a..nd royoJtles on p..L.enta a.od
coprlgbta.
2. Intereet e&rned on adva.oces or Fe<ler..l
(undS aball be remitted to the Federal &Geocy
except tor Interest earned 00 &dTUlOCll to
Statea or InAltr'\1m.Co.t.aJltlClS of .. State a.a pro-
vided. by the Iot.ergovernmental Coopen.tlOn
Act o( ) lias (Public lA... QO.-,577).
3. Proc:eeds (rom tbe aale o( ~ a.od per-
80nal property eltber pro1"ldc<1 by the !"cd-
eral Goveroment or purcbaaed In wbole or In
part w1th Peder..1 (uodS. aball be bandIed In
o.eeon1a.occ w1th Att&c:.bment I' to thla clr-
cui.., pert.a.1nlng to property zn.ana.cement.
~. 'Onlcsa tbe agreement provldee other-
wlAe. reclplenta sboJI bave no obl16..tlon to
!.he l"'ederaJ Government w1tb reepect to
royalties received ... a reault ot COpyrIght.! or
pa.t..eota producc<1 under l.be grant or other
&Greemeot (~p~ph 8. Attacbmeot N).
6. All oUler program Income ....rne<! durlt16
tbe project penod &hall be reLalned by the
recipient ..od. In accorda...,ee ....IUl tbe grant
or other aGTeilmeot. shall be:
.... Added to (una. commJtted to the proJ-
ect by tbe l"e<leral sponaorl.ng ..gency a.od
recipIent or""olZALlon and be uaed to (urtber
eligible progTam ObJectl"".:
b. Use<! to llnaocc tbe non-Feder..1 &bare
o( tbe project "'ben approved by !.he Federal
spoOJ>Orlt16 agency; or
c. Deducted (rom the toul project costa
10 determlnlog Ule Del ooe~ 00 ....hlch l.be
1"-ederal abare of costa ....Ul be baaed.
/l.TT"CBW~ :1:.--cDU;"C't.oUl 1'0. A-110
COIIT aKAAD<C AND WU''CJ:lO<O
1. Tbl<l a.ttAGbmeot 6el.a lorth erlt..er\a ..nd
pr"OCe<1uree far the allou-n.bUlt~ c~ (".AJ'.h n.:"I~
\
A-110:2
lo-klnd conLrlbutlona ma.de by reclpl.nts or
.ubreclpl.nt.s (.... r.l.rred to In pa.ra~..ph 5
01 tn. ba.slc clrcul..r) , or tblrd parties In a..t-
~Iylng coat sharl.ng a,od matcblng require-
m.ot.& or l"eder..1 spoosorlng ageocles. Tbl'
aLt.a.chment aleo est.a.bllAhee crlL.erla lor the
....lu..Llon o( In-klod oootrlbuLlooaro&de by
tblrd parLlee. and euppl.meots tbe gUld..nc.
5Ct rorth l.n F.de....1 MAoagement Clrcul..r
13-3 wll1h r....pect to cost .h&rlng on leder-
..lIy-eponsored r....e..rcb.
2. The lollowlng det10l tlooa apply (or the
purpose 01 thlA attAcbment:
a. Pr01ect cosls.-Pl'oJect costa are all al.
IOW1\ble costs ILS seL lorth In !.he appllc..ble
F.deral C06t prl.nclplee) Incurred '0)' .. reclpl.
ent and tbe value of the In.klod contrlbu-
LloOll made by the reclpleo L or third p&rtle.
10 accompl1ahl.ng the objectives 01 tb. gr..nL
or oLher a~e.ment during Lbe proJecL or pro-
gram period.
b. Cost .horln" an.d 17141cll1n".-10 general.
cost sb..rlog aod mau:hlng repre>eoL th..t
portion 01 project or pr0'6ram coeU not bOrne
by the l"ede....1 Governm.nt.
c. C....h ccmtrlbuIlOfU.--Ca.sh cootrlbutl.ooa
represeot the reclplent'a c...b outlay. IOclud-
Ing the ouUay o( money cootrlbuted to the
recipIent by non.P'ederal l.blrd p&rtl.....
d. In-kInd conlrlbutlO"".-l.O-ltlnd cootrl-
butlona repreaeot tbe v..lue 01 oooca.a.b coo-
trlbutlo04 provided by tbe reclpleo t and
non-P"e<Ieral third partl.... Only ....beo au-
llborlze<l br F&de....lleglalatlon. may propc:rty
purcbaBed wltb P'ede....1 fuodS be coOJlIcl.eTed
... tbe reclpleot'. In-klod contrlbutlona. 10-
lclOd contrlbutlons mar be l.o. l.be lorm 01
cb..rg.... lor real propertj a.od oon-expaod-
able personal property, a.od the value o!
goods and aerrlcea directly beneOtlng ..nd
speclllc..llY ldeotlAAble to the project or
program.
3. Oene"l IfUldellne:a (or computlog cost
abo.rtng or matcblog a.re LOS 10110"""':
a. Coat &b&tlng or mAtGblog may conAllBt.
01:
(1) Cbargca Incurred by tbe recipient aB
project costa. (Not ..11 e.bo.rg.... require e&ab
outla~ 'or the recipient during 1lbe project
perIod; eXAJDpl.... a.re <IepreclaUon and uae
coa.rge:a lor buUc11.np a.oel equlpmeot.)
( 2) !"rc J eo<: t cos ta llo.a.oc:e<l 'Wi th ca&l1 con-
trbuted or donated to l.be recipient '01" otber
non-!"cderal pubUc """,,nclea a.odlnatltutlooa.
aod prlv..l.Cl orpnl%:atlons a.od IndlvlduaU,
a.od
(3) F'ToJect coetJ repreaeoted by &errleee
and real a.od pel"llOn..1 property, or u.... then-
0(, donated by otber noo-l"e<Ie....1 publiC
a.eencleJ and lnatl tutlons. t.nd prt.v"te orp-
OlZatlooa a.od 10dJT1ouaU. '
b. All cootrlbutlon... bOth caa.b a.od 10-
kine!.. &ball be a.ecep\.e<1 aa part o( tbe reclpl-
lOot'. cost abar1.ng a.od matcbl.o.g wben aucb
contributions meet ..II of tb'e (ollowUlg
criterIA :
(l) Are ....rtllAble trom tbe nClp.eot'.
recor<ls: .
(2) An oot Included... cootr-lbuUooa (o~
..or otber (ed.erally-a.aalated pr~m:
(3) Ar. oeec........,. ..od re.uonable lor prop-
er Aod emcleot o.ccompllabmeot 01 proJec"t
obJectlV...;
(~) An typell or cb&tg-e. tl1At would be a.1-
lo.....ble uoder tbe a.ppllcable ooet prUlc.pl....:
(6) An not pa.ld by the Feder..1 Gove.~-
ment uoder a.nother .....latAOCCl >"'Cmeot
(unl.... tbe ",<<,"cemeot la a.\rtbor~ by l"e<I-
eral Ia.... to be Wled lor cost atu.rlng or matcb-
log):
(e) An provldc<1IOT In the ..pprovc<1 buelg'
lOt ....heo required '07 the 1"e<Ie....l &Gency: a.od
(7) ConJonn to other prov1510na o( Ull<l
attACbment.
(. V..lue:a (or recipient lO-klnd oootrlbu-
tlOD.ll ....Ul be ....Ubl1~ed 1.0 o.ecorda.ooc W"ll.b
Lhe appll....bl.. cost r.rlOclpl.....
~. 5~ctnc procedu"", tor l.be reclpl~Ola In
f"'''l:~J\~ll..~:nt'' ~h" ~rJ""" ('\1' !T'\-r~r'lt1 t""t"":"";t.~,t"\".
,
Office of Management and Budget Circular A-110 (7/30/76)
tlons Irom non-Feder:ll third parties are ~et
lorth belo"":
a. Vall/alion of '!olllntcer .<ert"iccs.-\,olun-
leer services mn)' be lurnl..hed by I'rolesslon~l
and technlc,,1 personnel, consul~:lllts. nnd
other skilled :lnd unskilled l:lbor. Volnlltcer
sen'lees may be counted M cost sh:lrln!; or
matchln!; I~ the sen'lee Is nn'lntegml :lnd
necessnry pnrt or nn nppro\'ed pro!;mm.
(I) nnte.< for "ol/mtar serviec...-R:ltes lor
volunteer" "hould be con"lslent with those
p:lld for slmllnr work In the recipient's
or!;nnlt.atlol\. In tho"e Instnnces In ""hleh the
requlrcd "kills nre not. found In Ihe reciplelH
or!;nnlt.ntlon. rMes should be conslslent with
those pnld for. slmllnr work In the l:lbor mar-
ket In which the recipient eompeles lor the
kind of services In\'ol\'ed.
(2) Voll/nleers "lnployed by olller organ i-
oations..-When an employer otl,er than the
recipient furnishes the services of I\n em-
ployee, these services shnll pc v:lluec1 at the
employee's re!;ulnr rnte of pny (exclusl\'e 01
frln!;e benefits and overhe:ld costs) provided
these "ervlces nre In the same skill lor which
the employee Is normnlly pnld.
b. Valuation. of dona/cd. e:rpendable pcr-
scmal propcr/y,-Donated. expcndnble per-
sonal property Includes sllch Items as ex-
pendnble equipment, office supplies, labori'-
torl' . supplies or workshop and clnssroom
supplies. Vnlue assessed to expendable per-
sonal property Included In the cost or match-
In!;' shar'e should be rel\.Sonable nnd should
not exceed the market v/\Jue 01 the property
at the tIme 01 the donation.
c. Valuation. of donated, nonc:rpcnd4ble
perscmal property. but/dings, and. land or
~e thereof.
(l) The method used for charglll!; cost
sharing or mntchlng for donated nonex-
pendable personal property, bulldln!;S and
land mAydlITer according to the purpose 01
the grantor other ngreement LS follows:
(a) 11 the purpose 01 the grant or other
at;reement Is to assist the recipIent In the
acquisition or equipment. bulldln~s or lnnd.
the tot"l value or the donated propert)' may
be elnlmed as eos: sharing or matching.
(b) It the purpose of the a!;reement Is to
support acth'ltles thnt require the use 01
equipment, bulldlnss or land. depreciation
or usechar!;cs lor equipment and bulldln"s
may be mnde. The full value of equlomen: or
other capltl\l assets "nd lair rent11 charges
for ll\nd mn)' be allowed provIded that the
Federal agenc)' has npproved the charges.
(2) The vnl ue of donated property will be
determined In l\ccordance ",'Ith the usual
aecountln!; policies of the recipient with the
lollowln!; qualll\catlons:
fa) Land. and blliLd.ings.-The vnlue of
donated land and buildIngs m:\\' not exceed
Its laIr m"rket vl\lue. at the tlm~ 01 d~natlon
to the reCipient as es:abllsheC b,' I\n Inde.
pendent apprnlse~ Ie.!;.. certified' real prop-
ert). apprlllser or GSA representa tlves) and
certlfled b)' a responsible official of the
recipient.
(b) Nonc:pend4/Jle pC7'sonnl property.-
The value 01 donated nonexpendnble personal
propert)' shnll not exceed the Inlr mar;.:e:
value or equipment nnd propcrt;. or the same
at;e. and condition nt the time of donntlon.
(c) Usc of spe..cc.-The vnlue 01 .donn:ed
space shall not exceed the fnlr rental ,'all:e
of compl\rnble spnce n.~ establl..lled by an
Independent af'prnlsal 01 comrnnble space
and fncllltles In n privnlely-owned bulldln!;
In the Sl\me 10C:\lItl':'
(d) Loaned cqllll'lncnt.-The \'nllle of
loaned equipment shnll not exceed Its fnlr
renl..'\l \'nl\le.
6. The 101l0u'ln~ requirements pettnln to
the reclplent's supportln!; reco:-<:ls fo~ In-
k1nd con~rlh\lUOl\s frOln non-Fedrrnl third
~.~:t \....1::
n. "ohllll eer Sl'r\'lc~s m\lsl he cloC\lment.ed
:lnd. to the rxtent leMillle. supported by I.he
S:lllle methods used l>)' the recip.ent lor It..
employees.
b. The bnsls lor determining thc valunllon
(or persOllal sen'lces. malerln!. eqUIpment,
buildings and l:lnd must be document~d.
ATTACHMeNT F.--ctRCULA" No. A-II 0
$TANOARUS TOR F'lNANC1AL MAHAGE:MCNT
SYSTEMS
1. TIlls nttachl11ent prescribes sLnndards for
finnnclal \I1:ln:l{;ement systems or rcclplcnt..'.
F'edernl sponsorln!; nsellele.; shall not Impose
:lcldltlonnl stnndnrds on reelpient.s unle"s spe-
cllicnll)' prO\'lded for In the applicable sta-
lutes (e.g., the Joint Pundln!; Slmplllicntlon
Act. P.L. 93-510) or olher 1\t1_'\cllrnents to this
clrcull\r. However. Federl\l spOllsort"s I\(ten-
cles arc eneournged to make sugsestlons nnd
n"slst recipients In estbnllsl,ln!; or Improving
finf\llclal rnanlLsc.ncnt s)"st.ems when such o.s..
slstnnc~ Is needed or requeSl.Cd.
2. Reclplent." I\nnnclnl mnna!;ement s)"S-
tems shall provIde for:
1\. Accurate. current nnd complete dlstlo-
sure of the financial results of each fedcrnlly
spon"ored project or prosrnm In I\ccordnnce
with the reporting requirements set lorth In
Att..'\cl)ment G to this circular. When n Fed.
eral sponsoring ncency requires reportln{; on
nn accrual basis. the recipIent shall nOL be
required lO estnbllsh nn nccrllnl accountln!;
S\'stem but shall develop such accrual dl\ta
f~r Its reports on the bnsls or all nnaly..ls 01
the documentation on hand.
b. Records that Iden:lIl' adequately the
source and appllCl\tlon or funds for federl\lIl'
sponsored actlvl ties. These records shall con-
taIn Inlonnatlon pertalnln!: to Pederal
nwards, authorizations. obligatIons. unobll-
gnted balnnces. n.~sets. outlnys. and Income.
c. Etlectlve ;:ontrol over and nceountablllty
for al\ lunds. propert)' and other o.sseloS. Re-.
clplents shall adequal.Cll' salesunrd all such-
assets and shnll assure thnt they are used
solely for authorlud purposes.
d. Compl\rlson or nctual outlnys with bud-
set amounts for each (tTant or other asree.
ment. Whenever approprIate or required b)'
tho Federal sponsoring a!;enc)'.' financial In-
formation should bj! related to performance
and unl~ cost data.
e. Procedures to mlnlml"e the tlme elnpsln!:
betu'een the transfer or funds from the U.S.
Treasury and the disbursement by the recip-
Ient, whenever lunds are advanced by the
F'ederal Government. When advances arc
mnde b)' a let~er-or-credlt method. the recip-
Ient sh..ll make drawdo<l'ns a.. close :u; pos-
sIble :0 the time 01 making dlsbursemcnts.
f. Pl'ocedures for de:ermlnlng the reason-
ableness. nllo"'l\blllt). and allocablll~y of costs
In I\ccClrdance ..'Ith the prO\'lSlons or the ap-
plicable Federal cost prInciples nnd the terms
of the grnnt or other a!;reement.
!;. ACCountlng records th..t ..re supported
by source documentatlon.
h. Exnmln:ltlons In the rorm or nudlts or
Intern,,1 audIts. Sllch audIts shall be made
by qualified Individuals who nre suffiCiently
Independent or those who "\Ith~r1ze the ex-
penditure or F'eder.at funds. ~o produce un-
bl:lsed opinions. conclu"lons or Jud!;T1'ents.
The)' shnll meet tile Independence crl terln
alon!; the lines 01 Chnpter 3. Part 3 of the
U.S. Gener"l Accountln!; Office pu-bllcatlon.
St..'\ndllrd. lor Audit or Government.."ll Orl;nl1-
1~.aLions. Pro~rnms. Actl\'ltles nnd F'unctlons.
Thcs'! cxnmin;\t.lons Arc Intended t.o a..'ic~r..
tAin the e/l"ectlveness of the fln"nclal mnn~
nhement systems and internnl procedures'
that hnve been cst.'\bll"hed to meet the terms
and conditions or the "sreement.,. It Is not
Intended that each "l!reement awarded Lo the
reclp'cnl be examJncd. GCl1ernlJ~.. cxnmlnn-
1.1on~ should be c:onducLcd (".n an orr:nn1:".H-
~1f'T'-'.':~rl'" ~""H\~~C tn ~,.-:': t'H' f: ":(":1. 1 'T~t,.~-!~\. nr
-\
A-110:3
flllaneinl t.rnnsncllons. M ...'ell as eompll"n.ce
wltl1 tl1~ terrn~ and conditions of tile Federal
~rP.nt.~ "nd other a,rcements. Such tests
would include an approprlaw sampll',!; of
Fedcral n!!Teements. ExnmlnaLlons will be
conducted wltl1 reasonnhle frequency. on a
conllnuln(: blLsls or l\t "cheduled Intervals,
u"unlly nnnu"lly, but not le"s frequent.l)' thnn
e\'erl' t"'.o ;oeMS. The Irequenc)' or these ex-
nO\lnn\.lons sh,,1I depend uJlon the nnture.
sltoe I\nd the complexity 01 thenct\'lIty. Thcse
eXl\mlnntlons do not relle\'e F'c-deral nhencles
or their audit responsibilities, but mny RITect
the Irequenq' and scope 01 such I\udlts.
I. A s,'stemntlc mcthod to "55ure tlmelv nnd
npproprlnte resolution 01 nudl.t Ondlngs nnd
recommend"tlons.
3. I'rimnry recipients sllnll requlrc subre-
clplenls (ILS denned In pnra!;rnph 5 of tile
l>nslc clrcularl to ndopL the stl\ndnrds In
pnrn!;Tllpl' 2. I\bove except for the require-
ment In subparaST"ph 2e. re!;"rdlnt: the use'
of the letter-of-credit method nnd that part
of .:>ubpnragrnph 2n. re!;nrdlng reponing
lorms nnd frequencies prescribed In Attnch-
menr. G to thIS clrculnr.
ATTACHMJ:N"l' G.-CIRCULAR No. A-IIO
TIN'ANCUL RC"'onTt'N"C R.CQUIR.EMCNTS
I. This atLnchment prcscrlbes unlrorm re-
partin!; procedures lor recipients to: sum-
marl1.e expenditures mad.e and Federal funds
unexpended lor each nu'ard, report the st.ntus
of Pederal cash I\dvnnced. request adl-nnces
and reimbursement "'hen the letter-aI-credIt
method Is not used: nnd promulgates stnnd-
I\rt'. lorms Incident thereto.
2. The following definitions I\pply lor pur-
poses or thIS nttnchment:
n. Accrued c:pcnd.itures.-Accrued ex-
pendItures are the chart;cs Incurred by the
recipient during n !;lveo period requiring ~he
provision of lunds lor: (1) goods nnd other
tAngible propert)' recel\'ed: (2) services per-
formed b~' employees, contractors, subreclpl-
ents. and otber payees, and (J) other
amounts becoming owed under programs for
...'hlch no current services or perlormance t.s
required.
b. Accrued inco'7'e.-Accrued Income Is the
sum or (1) enrnlngs durin!: a sll'en period
from (I) SerTlces.performed by the recipi-
ent: and (II) goods and other tlUlglble
property delivered to purchasers; and (2)
amounts beeomln!; owed :0 the recipient for
whl.l;.h no current sen'lces or perlormAnce ~
required by the recipient.
c. Fccieral funds authorized.-F'ederal
funds authorl1.ed ar\ the total amount of
Federal funds obligated b)' the Federal Gov,
ernment for u~e by the reCipient.' Th1.s
nmount ma~' Include ..ny authorize<! carry-
o\'er o! unobllga ted lunds trom prIor nscal
yenrs when permitted b)' lA.... or ..gency
regulntlon.
d. In-kind contributio"-'.-ln-Itlnd coo-
trlbutlons are del\ned In Attachment E to
thl!: circular.
e. Obli9atio,,-,.-Obllgntlons arc the
amounts of orders plnced. contracts ..nd
.mnts """arded. sen'lces recel\'ed. and simi-
lar trans:1etlons durlnt n gl\'en perIod thnt
".'ill require pn)'ment by the recipient during
the ""me or a luture period.
C. Outlays.-Ou~I"rs or expenditures repre.
sent chnrgcs made to the project or progrl\m.
TIley mf\)" be repor\.ed on a cp.sh or accrun.1
bl\sls For report... prepared on a cash bl\sls.
Olltln~'s nre the sum of nctul\! cnsh disburse-
ment.. for c1lrcct char!;cs for goods and servo
Ices. the amount or Indirect expense chnrged.
the \'allle of in-kind contrlblltlons npplled,
:lnd the I\mounl of c"sh nd\'anCes ..nd pay-
ment.. mnde Lo subreclp.ent.s. For reporl..~ pre-
pnred on nn I\cerunl bl\"ls. au tl..)'s are the
~um of I\Cl\H\.1 cash dl~b\:r:r;('ments for direct
(,;h;'\r!!e~ {('IT ~nod.5 ::\nd ~C!"\'ICC~. the f\mo\lnt
("If In(!'~!''''''~ "~'!""n.,r tr'l("'urr"c. t~)(. '..nlul:' or 1n.
I
Office of Management and Budget Circular A-110 (7/30/76)
Kind contrIbutions applied. and the net In-
crease .(or decrea.se) In lhe amount.s owed b;
the recIpient lor !:oods and other propertj
receIved. tor servlcee perlorme<:! br employ-
ees. contract.ors, subreclplent.s and other
payees and other ..mount.s becomln&, owed
under pro&,rnm.> lor ,,'hlch no current serv-
Icee or perlormance are requIred.
g. Prof/ra m tru:ome.-?ro&,ram Income Is
deOned In Att..chment 0 or thla circular. It
may be reported on a co.sh or accrual b"",La.
whichever La used lor reportIng outlay..
h. Un.obl/9ated balance.-The unobligated
balance Is the portIon or the lunds author-
Ized by the Feder"l spon""rlng agencj that
hs.s not been obllS'ated by the recipIent and La
determined bj deductlnS' the cumulative
obligations Irom the cumulatIve lunds aU-
thorlud.
l. Unllquldated obIf9attonJ.-l"or reportll
prepared on a cash'bn.sls. unlIquidated obll-
j;atlons represent the'-6mount 01 obll.atloNl
Incurred by the recipient that h..s not been
p4'ld. For repor"" prepared on ..n accrued ex-
penditure bs.sls. they represent the ..mount
01 obllg-atlons Incurred by the recipient tor
which an outl..y h.... not been .recorded.
3. Only the lollowlng lorm" ,,'Ill be nu-
thorlzed lor obt.&lnlng financial Inlormatlon
lrom reclplen"".
... Fll\4ncial StahLs Report (I:;:r.fblt 1). .
(I) E&ch l".ederILl sponsorln&, &l>encr ahnll
require recIpients t.o l.I.>e the etandardlzed
F1n..nclat Statu..{ Report to report the status
of tunds lor all nonconstructlon project.:! or
probT"m". The Fede,.,.1 sponsorIng agencies
m..y. llowever. have the option o! not reo
qUlrlng the Flnancl..l Status Report when
the Request tor Ad,'..nce or Relmbur.-ement
(paragraph 4&) or Report of l"ede,.,.1 Cash
TransactIons (par..gr..ph 3b) La determined
to provide ..dequate Inlorm..tlon to meet
their needs. except th..t annal Flnancl..1
Status Report shall be required nt the com-
pletion. 01 the project when the ReqUC$t lor
Advance or Reimbursement lorm 18 used only
tor ..dv..ncC$.
(2) The Yeder..1 sponsorln. agenc)" shall
prescrIbe whether the report shall be on a
c....h or ..ccru..1 be.sl.!. It the Federnl sponsor-
InS' agency requIres accrual Inlormntlon and
tbe recipient's &Ccountlng records ..re not
normally Kept on the accru..1 basI.!. the re-
cIpient shall not be reqUIred t.o convert It.:!
accountIng system. but shall degelop such
accrual Inlorm..tlon throu.h best estImates
b..sed on an analysIs 01 the e.ocumentatlon
on hane..
(3) The Federal sponsor In. agenc; sh..n
determine the lrequency. or the FInancial
Status Report lor e..ch project or prosram
consIderIng the sl.ze and compleXIty of the
particular project or pro!;ram. Ho""eger. the
report shall not be reqUIred more trequenth'
than quarterly or l.ess lrequently th..n ..n--
nually except as provide<! In subp..nS'rnph
3a (I) above. A nnal report shall be reqUIred
at the completion ot the agreement,
(~) Federal. ~ponsorlne; n.gencles sh..1I re-
qUIre reclplent.s to submIt the FinancIal
StAtus Report lorl~lnal and no more than
two CrJples) no later thnn 30 d:LrS "Iter the
end 01 wch specll1ed reportln!; period lor
qulltterl)' ..nd seml-..nnual reports. and 90
dlOo)'s lor annUl'I and nnal reporl3. Eltenslons
to reportln&, due dnte. ma)' be !;ranted upon
request 01 the recipient.
b. Report of Federnl CQ,sh Tran.actio...
(Ezhibit Z).
(I) W'hen lunds are advnnced Ul
reclplen"" through let:trs ot credit or with
Treasury checks. the Federal sponsoring
agencies s.hall require each recIpIent to ~ub.
mlt a Report 0: Feder..1 Cash TranAACtlons.
The l"eder3ol spon.sorlne; I\!;ency shall u~e thIs
report to monlt.or cash ..dv..nced t.o reclplent.s
I\nd Ul obtain dlsbursement'lnlormatlon lor
e~ch l'S'reement lrom the reclplent.s.
(2) Feder..l sponsoring a!;encles ma)' re.
quire torecast.s or Federal c...h requirement.
In the "Rem..rks" ~ectlon of the report.
(3). When practlc..l and deemed nece....r)',
the I"eder..l sponsoring atencle. may require
recelpt.s Ul report In the "Remarks" ~ectlon
the I\mount 01 cash Advancea In exces.:! of
three days' requirements In the hands ot sub-
recIpIents and t.o provide short n..rratlve ex-
plana'.lons ot actions taken br the recipients
to reduce the exceSJ bnl..nces.
(~) Recipients sh..1I be required to submit
not more than the orl.In..1 and two copies 01
the Report 01 FedereJ Ca.sh '!TansactlOns 15
worKing da)'s tollo""lng the end ot each
qun.rter. The Federal spon~orln!; agencIeS
may require 3 monthl)' report Irom those
reclplent.s receiVIng ..dvan.:es t.otallng $I
million or more per yeu.
(5) Federal sponsoring a.encles ma)' waive
the requirement lor subml!Slon ot the Report
ot I"ederal Ca.sh '!Tansactlons when monthly
advances ~o not exceed 510.000 per recipient.
provIded that sueh advance.3 are monlt.ored
through other lorms eont..lned In.jhls at-
t1chment. or I!. In tbe Federal sponsorLn!;
BSenC)"s opinion. the recIpIent's ~ccountlng
controls ..re adequ..te to minimize excessive
Feder301 ndvances.
4. Except as noted beloVo', onl)" the 10110""-
Ing lorms wIll be authorIzed tor the reclpl-
en;'3 In requesting advances ..nd relmbur&e'
ment.:!.
a. Request for Advance or Reimbursement
(I:zhiblt J).
(I) Each Federal sponsor In&, a.ency shall
adopt the Request tor Advance or ReImburse.
ment as a snnda.rdlzed lorm for all noncon-
structlon pro.ram. ",'hen letters-ot-credlt or
predetermined advance mdhods ..re not used.
Federal sponsoring agencies, however. have
the optIon of usln. this torm tor construc-
tion program" In lieu ot the Outlay Report
and Re::jue.t lor Relmburseme:\t lor Con-
struction ?rO!;r3omS (subpar&l>raph ~b).
(2) RecIpients shall be ..uthorlzed to sub.
mlt requests lor advances ..nd reimburse-
ments at least monthly when letters-ol-
credIt ..re not used. l"eder..: sponsorln.
3o~encles shall not requIre the submlulon ot
more than the orlF;lnl\1 and two copies ot the
Request lor Advance or Reimbursement.
,
A-110:4
b, Outlay reporr and request lor relm-
l'Jur.o;tl1lr.nt jar construction progTonu (Ez.
ILibir 4).
(1) E:Lch Federal ~pon..orln{:' ..gener shall
..dopt the Oulla)" Report Ilnd Reqllest lor Re.
Imbur.sement lor ConstructIon f'rosr:LJns as
the st1ndardlzed lorm"t t.o be ,,,ed lor re-
questing reImbursement lor construcllon
programs. The Feder:u sponsortr.g I\~encles
ma)'. howe\'er, have the option 01 substltut.
Ins the Request lor Advance or Relmbu.rse.
ment !"orm (subparagr.aph ~l') ""hen the
Feder:\1 agellcles determine that It provides
:Lrteqlll\te Intorll\l\tlon t.o meet their needs.
(2) Reeiplents shall be ..uthorlzed to sub-
mit requests :or reimbursement lOot lel\St
monthly ",'hen letlers-or-credltl\r'e not u~ed.
Feder..l sponsorlns a.encles shall not require
more th..n the origInal and t"'.o copies or the
Outla)' Report and Request tor ReImburse-
ment lor ConstructIon ?ro!'Tam.>.
5. ....'h.n the I"ederal spon.sorlng ~encle.
need I\ddltlonal Inlorm..lIoll In usIng these
lorms or more Irequent reporw:. the [ollo",'lng
shall be observed:
. a. When ..ddltlonal InformatIon ls needed
to compl)' ",'Ith lcs-Islatlve requlremcnts,
Feder;!.) sponsoring nr.encles shall Issue In.
slructlons to require recIpients to submit
.uch Inlormatlon under the "Remarks" sec-
lion of the reporl.s.
b. When necess..ry t.o meet speclllc pro-
gom needs Federal sponsorlns "Gencles shall
suomlt th~ proposed reporting requlrement.s
to lhe Fln..nclal MAnlOogement Branch. Budget
Review DivISion, Ollice of Manal!:ement and
Buc1l;et lor approva.l prIor t.o submission 01
the report.s lor de-vance under the pro-
visIons 01 OMB Circular 1'10. A-40.
C. When a Federal sponsorl ng &l>enc)' hl\s
determined that.. reclplent's accounting sys-
tem does not meet the Stand..rds lor 1"1-
n..ncl,,1 Mana.eme:\t contained In Ans.ch-
ment F t.O this circular. additIonal pertinent
Inlormatlon to turther monlt.or grant.s and
other asreements mn~' be obtaIned upon
""rltt.en notice t.o the recIpIent untll such
time :... the sy"tem Is brouSht up Ul standard.
d. The Feder..l sponsoring ~enc)'. In ob-
Wllnlng Inlormatlon s.s In paragrl\phs a. b
and c above, mu.... compl~' ",'Ith repo'-. clear.
..nce requlremer.~s or the Office of ManA!;e-
ment and Budset Clreulll.r No. A-40. s.s re-
vised.
6. Feder...l sponsorln. agencIes hs.ve the
optIon ot shading out any line Item on any
report that Is unnecessnr)' lor decislon.mak-
Ing purposes.
7, Federal sponsorln. agenelec should ac-
cept the Identical InlormatlOn 1roIT, the re-
cl!)lents In machIne usable tormat :r. com-
puter printouts In lieu of prescribe<:! lormats.
8. Federal sponsorIng agencle. may pro-
vIde com!)uter outputs to recipIents ",'hen It
will expedite or contribute to the aecur..cy
ot reportlng.
9. Federal sponsorIng a!;encles ..re aulhor.
17.ed to reproduce these lorms. The lorms lor
reproduction purposes can be obtaIned Irom
the Omce 01 Man~.cment and Budget.
~u
~
.'
.
FINANCIAL STATUS REPORT I. nO(fltAl "OIHCY AHD OItQ.AHIUnOHAL IU..,(HT to WHICH Mr'Off'f II IVIMlmO I. nO'IVl ......... O. on... 1D<KT1"'''. \ OM8 .0.00.0.0<1 \ rAta 0'
",uw'(II No. nG-RO\80 \
(Follow i.ulnut1o"" on lit., bAde) ""C($
AlCI"(H' OIit9...,.,ILAnOH 1,.:.-...... c_,..r." .:lApu.. i.......;., Jlr t.~., 4. (a.4,tOYU: IOU4n'lc.AlIOH HUalUR t. RIClnUfT A(COUrn HU"'U' 0" IDIN'TlnU'fCl HVWUII I. "HAL 11[,-0"" J. "".111
o Y!S [J "0 o C~... n "'CCIIUAl
.. 'ftOJlCT/QII.AHT ","00 1.1.. I...,,,-It...-.I ,. ""IOD COVlllla If Tl411 R[r'QlIfT
'"0''' IH.."'~.' ....... I fa IN...tA. l-,. ..... ,fIlOIo4 ,H._IA. .t... .-.) TO 1."f_I...III......'1
STATUS or nJHOS
(.) (b) (e) (4) (.) (f) TOTH
rROGRAMSI rUHCTlONS/ ACT IVIT IES ~ (g)
IIet outl"y' previously repot1,d S S S $ $ $ S
Tol.1 Dulley' Ihls report pulod
(..,...,' rrogram Incom. crtH:tlh
Iff't oull.yl Ihl. ,eport nrflod
fLirt'" minllJ lint c) I
tl,l oull.y' 10 d.IO-\
(Lint. . p1U.1 lint d) , .
: I
Ltu.' Hon.redllulshAU of outl.y'
----
T alai f NI'lfllsh." of oull.ys
(tin'. f m,''''.IIlin' IJ I
I I
lollll unllquld.ttd obliSllions
L'It: f1on.redlHll ,h.n of.unllquldated
obllcallonl sho\Otn on IIn. h
.-
fflldflral ,ha" 01 unllquld.l~ oblll.lionl
---
fatal (ede,..lsh.,t 01 outl.ys and
unllquid.led obli..llonl
TolIl cumulltjYI amount at r.d.nl 'undl
.uthortud
Unobllg.lltd bel.ncI ot red",.1 'und. AUTHORIZED CERTlFYlrlC O..T[ REPORT
-~;A'( rJllOVIIIOUAl\ 0 PJIlm[flJllUIPHD u. CUUI(lc:.AfIOH SOl.r, .0. TURE or SU8MITTEO
(r'l)u ",tOO i.. dppropn41' bo.) 0 o ".....l 0""0 I certify 10 th. bf'tl 01 my IInowhdt. .nd boe. OFFICIAL
OI"rCI \ c. .AU \ .. TOT~l ....OUHT \ .. rlOlAAl IHAI\1 nil Ih.t Ihl, uport II conect .nd cample-U Ind
"INS( tI. JIlAT( \h.1 III ouU.y. .nd unllquld.t~ abU,.lIonl N"ME ArlO TITLE HUPHOrlE (A ". CtM.,
nrED Oil PRltlHO
'In '0' Ih. purpou. set forth In Ih. .......rd nu",b.r ond nr,,,.iOftJ
:::'::'::',:::::,~:~' ~""~I"'~ ..._.. ._,,_. ~ I.I~""" ......,.. .. ,...... 'f;"_n., ...-." _r''''''' "''' dacum.nll.
tTAH[).A"O to"'" 264 t7-1"
').....101 E XII/BIT I ',.-.c,lb..t tit O"'c. of ...."..."...n' .nd 8...<1....
CIRCULAR t"O. A.' '0
.
J
-
.
0
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-
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(l)
0
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OJ
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OJ
IQ
(l)
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(l)
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OJ
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a.
OJ
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0.
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ctl
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OJ
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,
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or printlesib1y. lIems l. 2, 3, 6, 7, 9, lCd, ICe, 109, 10i, 101, Ita, and 12 are self.explanatory,
specific instructions lor other items are as follows:
,..,... L'Jltry
4 [nt.' the .,-nploy., 'dt!ntlnc.atlon number aU_lned by
'h. U.S. Intemal Re"'f't'nue Servil:e: ot 'Ice (I""il\l\ion)
cod', If requited by the fe<tanl Iponl4fl"l ".eney.
""1, 'DoeC. II ,...,..rv.d lor an .ccoun' number or aU',.,
ide:nlityinl numo.rs thAt may bot .uignPd by r~e
reclpit'nt.
[nte' Ihe month, day, end Y'" 01 the Mll'lnnlnll' and
!tRalnr of U'UI OroIK' period. rot formula ,rants that
If' not awaro.c on a prolKt tNIs11, IhO_ ,he Irant
po riod.
10 Tn. purt)O'M of vertlc.1 columns e., throulfh (I) Is to
provide (InanclII aata lor Uch prol,em, tuncHan, IInd
Ictlv,ty in the bu4rft .. IOprollt'd b')' the: 'eoerel l(lOn'
so,'n, l'lney. 1I-.ddition,1 columnl .re n..dt'd, use as
many aCidltlon.1 tarms as nH'ded and Indlc.t. pale
number In ,pee. orovtded In uoper rirnt: how..,et. the
latals of ell ororums, lunctions or acti.,IUes should be
s.hQlllll'n in eotumn (,> of tne nnt p_re. For aflrecm~nts
pertaln_nE to wvenl C.Uloc of Federal Oom..sUc
AuiS'tanc. prorrams t".t do nol requl~ I funl'ler
functlon.l or ac1lytty c.lassiflceti.on br..k6OWT\. ."ur
under eolumns C.) tnmuS'1'l (1) tn~ IUle of the pro,ram.
For r"'nu; or other .&.Sisunee .,r..menU containlnK
mul'tlol. pn)gramS whera one or mO'e proc,.ms reQuire
e further breakdown by 'unction or ICtlV'ty, use ·
Mpente form tor .acn proS'nm Inowtn; the aooheable
1unction, or activltift In t.... seoaraU columnl. for
,mnts or ot...er auistanee .,reemenU contaln,n; se'"
.r.1 function' or lehvtties whlc'" Ire lunded trom
,....,....,1 prolrams. pna"'" . 'S1.unu torm tor ..eh
actlvtTy or tunct;on when requested by the fede,.:
e.QOnsorinl a,.ney.
lOa Enter the net outt.y. This .mount ,hould be the sam.
.. the amount floonrd In L'ne 10. of the last ~oo"'"
If the'" hal been In ,dju.tment to the .mount .hO'W'n
o,.....,.ously. pI.'$1I .naeh upl.n.tlon. Show lero If thts
ls the Inttl.1 report. .
lOb Enter tne tolll rroes pmgram outl.ys (Ien rebatet.
".funds, and other di.counts) tor this report period,
Ineludln'l dllbunements of u,h reaUzed u pmrram
income. Fry reoort' tn.t .re ",ieCl.M on a cas'"
b.,,,, OUtllY' ar. the sum of .ctu.1 Clsh disbune.
ml'l''::'$ lor roodl Ind 'ervlces. th. amount of fndif'W':1
ellDenu ch'rred, th. ".'ue of In. kind contribution,
IClolied. 'nd tht amoun' of cesh 'OY8nees Ind
payments m,d, '0 contr.eton and subg~n'et'. For
repons preo.e~ on .n .ccNe<I lSxprendllur. basis. 0\1\'
1.Y' .,~ Ih. sum ot .ctuII cIsh disbuf"Sement,. the
amount 01 Indl~ eJ,penSl incurred. the value of I".
kind contribution, apolle<:. .nd 'he net Iner..u (or
OecfIUW) .n tn. .moun" owe<J by tn. r"c.pien~ 'or
rood' .nd oihlr "rODI'r'Ty rKe..,ecs .nd '01 lervlces
per10""t< by emp\oyees. cont...cton. ,ublr'"'H.. and
other p.aYles.
/....... Eocry
lOc (n,.r ,n. .mount of .11 protI',.m Income n.llrf'd In
thi, penod th.t i, r~ulft'd toy th. tt,ms .nd con.
c""ons of th~ leoe,,1 ......res to bf' a..duC'\ed tram toUI
pfTtfl"C't co,U. for ,.oor" p,pl'\,ued on . Cllh bAl.s.
en.f" the .mount 01 Gash IncC'rne 'f'Cf.",ed durin. the
"pan"'1i lW',fod. (0' ..port1 Drepu.d on an aec",.1
bas... enler I". amount 01 Income "rnrod slnc. I"e
bc"nninr of Ihe ,e()Ortlfte ,..,.,100. """"'tn the If'tmS O'
condillon' alkJ.. prOlrBm Income 10 bot added to Ihe
'aiel 1I...d. ..D....n in '11 m" r1I. I. tht sourCI:. emount
8nd dl~posilion 01 the Incom..
101 [nte' amount pertalnlnl to the non.F'e-de'll Share or
prOf'.'" outl.Y' Included In the .mount .~n IIn. c.
10h Enter toUI .mount of unliqutoated obl,;.lIons lor this
pro;ec't or pro"am, includinc unhQuleh1f'd obhlalionl.
10 subl...nt.... Ind conUactor,. Unliquidated obliga.
tions arc:
e.,h buh.-obU,ations Incurred but not paid:
Accrue<l u:ocndilure bnl..-oblili.llons IncurM bu1
tor which. In outlay has not been ~cordeod.
00 Nt includc any amounts thlt h.", b<<n Included
on linn II 'ht~ul'h I. On the final noer:.. Une I'l should
h."1 . lero b.al.nce.
101 [nllt the 'ede,..1 ,hare 01 unliQuld.IKI obliraUonl.
sno-n on Unc h. The amount ,hown 0" this Iin. should
be the dlner.nce between the .mounts on lines. h and I.
10k [nt.r thl sum of the amounts shown on linn. and ,.
It the report II (In.1 the reporl shoukS not contein any
unnquloan.d obll.atlona.
10m Enter thl unobligated ~Iancc of Federal lunds. This
emount should be the dlnerenet bet'ween linn k and I.
'11 b Enter rete In eneet durlnS thl reDorling per'od.
.
lle Enter amount of the bin 10 which the rale ....." applied.
I1d Enler lotel emount at Indirect colt charred durinl the
rlpo" period.
11. Enter .mount of the Fedei'al shire eharlle-d during Ihe
r.oort perIod.
II mo... then one rete was eDPlied during Ihe project
per~. include a seOlnle scneOult sho.....inC blses
Iralnst wMeh 'h~ Indirect co, I "t" wtfe I! ODli8'd. the
resoectlY't Indirec1 rat.., the month. C.)'. .nd y.ar tftf
inch~ rete-s We'rt In enKt. .mounlS 01 indlf"e"Ct u'
penn c,...r,ed 10 the oroiect, .nd the Federal sh.re 01
indirlrCl ...pen.e ehafled to thc project 10 C.tc.
A-i10:6
..
,
I
,
Office of Management and Budget Circular A-110 (7/30/76)
A-110:7
Approved by OffiCe of ....n._ement and Budp'ct. No. SO-ROl82
FEDERAL CASH TRANSACTIONS REPORT l. fflldtul aoon.ori"E .,1'ftC"J' ."d Ofl."iuIIOI'l.1 ,1.jIII\."t '0 ........('Irl HUI upon
it ",bmfnld
(See in..structimts on thr. 00<:1.. 1 { report i., {or more rhan one prant or
a.,sistl1nce agreement. I1tUlch completed Standard Farm t:-:-A.)
2. RECIPIENT ORGANIZATION 4. r~.nl ,nn. ., 01(11.., ide.ftlilic.a. 5. 'hcipt."l'. KC'OUnt .u'"~, 0<
U.. fIII.,lftbet' i~lityl"l ..,,"'o.r
No."u : to. L.U., .f uedil ..u"'~ 7. lut pe,,,,.,.l "'w<~., ...w...~
NtHflh.-r Give tCltal number {or tltis period
aNt Str.el :
a. P'1fI'tnl VDUchen cudilP4 I. 9. hw.ury chIc'" ,..ui...d ( w.l^-t(h,,.
)'OUt .cc.oun t ~ "-O( dt:po.il~d)
CiJ.., $IDIO 10. PERIOD COVERED BY THIS REPORT
...d ZIP Cod.,
3. FEDERAL EMPLOYER ~ FROM (,"o~t". d4", 1'1'0") TO <<'"'0"'-'.' ad., )'(o.r)
IDENTIFICATION NO.
a. Cash on hand beginning of reporting period $
b. Letter or credit withdrawals ,
c. Treasury check payments
11. STATUS OF
FEDERAL d. Total receipts (Sum of lines b and c)
CASH e. Total cash available (Sum of lines a.JJ.nd d)
f. Gross disbursements
(See Bpecific g. Federal share of program income
i7UtrucLi01l-~
on the back) h. Net disbursements (Line f minlu Line g)
i. Adjustments of prior per;ods
j. Cash on hand end or period $
12. THE A"10UNT SHOWN 13. OTHER INFORMATION
ON LINE llJ, ABOVE.
REPRESENTS CASH RE. a. Interest income $
QUIREMENTS FOR THE
ENSUING
DaVB b. Advances to subgrantees or subcontractors $
L
14. REMARKS (A ttach addit40nal sheets of plain paper. if mo-re space is required)
CERTIFICATION
15.
SIGNA TURE
OATE REPORT SUBl.lIT"TEO
, certity to the best or my
knowledge and belief that AUTHORIZED
this report is true in all reo
spects and that all dis~urse. CERTIFYING
ments have been made tor
the purpose and conditions I OFFICIAL
of the grant or agreement.
THIS SPACE FOR AGENCY USE
rYPEO OR.PRINTEO NAME ANO TITLE
IAr... C...u)
TELEPHONE I
IINM"'b.~')
(Ezh...to01l )
I
272-101
EXHIB IT 2
STANOAR'O rORIol 272 (7-76)
Pr.vrir.--:! bv O~ICll ("Of M.n"c~m.nl ""d- f\ud..t
I
. I
Office of Management and BudQet Circular A-110 (7/30/76)
A-110:8
INSTRUCTIONS
P1etl'. type or print legibly. Items 1. 2, 8, 9. 10, lld, lle, llh, and 15 are self explanatory, specific
Instructions for other items are as follows:
1'-'
E7\try
3
Enter employer ioonliftcalion number assigned by the
U.S. Internal RevHlue Service or the FICE (institution)
code.
If this report coven more then one grant or other
agreement, leave Items 4 and 5 blank and provide the
information on Standard Form 272-A, Report of Fed.
eral Cash Trans.'5ctioM.-.continued; otherwis.e:
4 Enter Fr<leral grant number, agreement numl>er, or
other Identifyinlt num~~ if requested by sponsoring
a~ncy.
5 This space rltWrved for In account number or other
Identifying number that may be auigned by the re-
cipient.
6 Ent.., the tetter of credit number that applies to this
report.t1 all advances were made by Treasury check.
enter "NA" for not applicable and leave items 7 and 8
~nk.
7 Enter the voucher number of the I4st letter-of.credit
payment voucher (Form TUS 5401) that was credited
to you.r account.
111 Enter the total amount of Federal eash on hand at the
beginning of the reporting period Including all of the
Feder/!I tvnds on deposit, Imprut funds, and und..
poeited Treasury ch.cks.'
llb Enter total amoun( of Fedensl funds ~ived through
peyment vouehen (Form TUS 5401) that were credo .
tted to yoyr aCCOunt during the reporHng period.
llc Em+r. the total amount of all Feder&/ funds received
during the reporti", period through Treasury checks,
~~ Of" not d~ted.
III EfOte(' tM ~al FeOer"al c.,sh dhbursenunts, made
during the ~ period, including cuh received
M Pf09nlm \nc.omc. o;sl:>u~ements as used here also
lnc!ude tne ..noun{ of advanc~ and peyments ~
re+Ynds to SUblfP'8ntMs or contncto~, the lross
amount O'! direct J.a~riM and ~M, includin. the
Eft try
Item
emplopee', share of benefits if treated as a direct cost,
intertlepartmenti\1 cha'1l~ lor supplies and services,
and the amount to which the recipient is entitle<! for
Indirect costs.
11 ~ Enter the Federal ,hare of program income that was
required to be used on the proJect or program by the
terms of the grant or agre<:~.:nl.
11i
Enter the amount af all adjustments pertaining to prior
periods anecting the ending balance that hllve not
be"an included in any lines above. Identify each grant or
all'reernent lor which IldJustment was made, and enter
an explanation for each adjustment under "Remarks."
Use plain sheets of ~pef Illldditional s~ce is required.
llj
Enter the total amount of Fedenll cash on hand at the
end of the reporting period. This Ilmount should include
all funds on deposit, imprest funds, and undeposited
funds (line e, le~ line h. plus or minus line I).
12
Enter the estimated number of deys until the cash on
hand. shown on line Ill, will be expended. If more than
three days cash ~irements are on hand, provide an
explanation under "Remarks" as to why the drl!wdown
wes made prematurely, or other reasons for the excesS
cash. The requirement for the explanation does not
apply to pres~heduled or automatic advances.
13a
Enter the amount of Interest earned on advances of
Federal klnds but not remitte<! to the Federal a~ncy.
If this Includes any amo\Jnt earned and not remitted to
the Federal sponsorin, al1ency for over 60 days, explain
under "Remarks." Do not report Interest earned nn
lIdvances to States.
13b
Enter amount of advance to secondary recipients in.
eluded in item 11 h. ..
,
14
In addition to providing explanations as reQuired above,
,iw additional explanetion ~emed necess.1lry by the
recipient and for inlom\4tion required by the Federal
sponsoring agency in compliance with governing legis.
I&tion. Use plain shHts of paper If additional spaCt i~
reQuired.
~
I
-I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:9
'AOr'lfOved try OHlce ot Mane~t!'mf'nt '"<: 8ud;.,. No.
80_R0167
fEDERAL SPONSORING AGENCY ~ND DRGANIZA.
TIONAl ELEMENT TO WHICH THI6 RlPORr IS SUB.
MITTED
PERIOO COVERED BY THIS RE1'oRT (A., ......." ." SF
!7t)
FEDERAL CASH TRANSACTIONS REPORT I
CONTINUATION II.
(Tnu ,...."'. u (."",;>1".. an<:' 01 Ulc.r<l 10 Slon.dArd Fr-m t~t ...Iv ",.r"
r'pC1'f"tl"," m.o1't. 11\4", t:rrLI .('rtl1l.f (If' C1..'LH/'ll'\.('t a,"rU'",~""}
2.. RECIPIENT ORGANIZATION (G,,', MYrU oniV Q.' .....'" i" i',,,, t, SF 3.
tH)
'RO" tlotOf1tJlt, ...,. .-..)
I TO 1...._I~. ~,. "....)
4. List Informataon belo..... lor .ach &;'ren\ or olner Igreement covereod by tn., report. Uie add,Iional tarms if more space IS reQuired.
FEDERAL GRAHT OR OTHER IOEHTlF.1 R(CI~I(Hf A,CCOUNT HUWS(" FEOERAL SHARE OF NET DISBURSEMENTS
CA TlOH 0" O'1t4[R
IDENTI'YING NUMBCR N('T DISBURSCMeNTS rC;.._, CUWUl..ATlY[
f'SAow" ,ubtliw",n. bV oUter itlt.'ftti. 411I......._..... I... ,....-- "0 DtS8UIUEM(HTS
Irmp n..""b'T' if -equ.ired bv ,h, c:".... ..un...... '0" ACPOAUNC
F .<I~ol Sr"""....,"g A.g,,,cv) P(RtOO
Inl (hI Cel /<1\
$ $
,
,
.
-
I .
..
"
'\
3. TOT ALS (SN:n~Ld C~tI.'Pt:I"nJi wd.h (If'7\.(lIu.nu: ,.Jwrw" 0" SF' ~7t Q.lI j
lollov"': 'o~v.m.n te) t~ 'Q.m.e a.." il1'\C 1 H:.: coJLm\." (it) th.e r1nft 01 lines
J lh o"d J 'I, t'( l"U .'SF %11 ~ftd C\lm.ulGhv~ d'ub,,~.emC'ft(.s '''O'\Vft 01'\ !
{Nt f"cpO'f"'1.. A HQell o'l%pL.a.n.a.t\oOft to.' Q.JlV t1i~.f"e'l\l:u..; I $
21:7-:'01
\.
, S
S. t.NOl."O FORM 272-1. (7.76\
P~..~"",.-! ~... OH,.._ ",' ,,",o..a('___t ..,..0:1 e"~,,,,
Office of Management and Budg\
"cular A-110 (7/30/76)
I
I
A.pproved by Offi,c. of Man".ern.."' Ind "AC( 0'
REQUEST FOR ADVANCE BudS_I. No. 8O-ROIBJ "~C11
.. -r....... ...u. ...... 2. SASIS Of REQUEST
OR REIMBURSEMENT I. o ADVANCE 0 ''{It.I.UlltS[. o "",,SN
yy,.( 0' W(HT
II'.,...(HT .. "Z" ...... .,.,.....w ...
($u i""tr'1l.dioJW 0" ba.c::k) .(QUESTEO 0 "H"1. 0 ,.A.T'''l 0 .4-eCRUA!.
J. n:O(RAI. SPO"'SOfll:lJ'\lG "C(Her AND ORCAHIL\TIONAL,&.,-tW(HT TO .. ~!DCOAL C.....N. OR OTHER 1" ...im ......[~m-
WHICH THIS "E.1'OR' IS sU..,un[,D IO(NTlf'YI"'C HUNSV' A$.SICHID Nuw8(J' '0.. THIS "(OVEU
'1' nOllU,L AGtNCT
... ~~~ll~Y"t.R IO(.NTI'Ic:AnON .1 . JtECJII'U:NTS ACCOUNT foIU""'t" a. ptRIOO COVERED BY rHIS REQUEST
0" IOfJHIF"YU\lQ HUW.EIII: 'ltOM t_C, 1M.. .-". TO I L'-~.......I
I. RI:CI"IHT O"GAHILA ION 10. ',,"Y[E I W.a..-................. _c.. ......-. u.- "- I)
H._ : H_.. :
H_'- H_'-
... ........c : ~3."_ :
C...... ,.... e~,..s....
... %Ir C.... : "..J S/I't'"".J..:
11. CONP'VTATlON OF AMOUNT Of' REIMaURSEWEHn / ADV AftCES REOUcsn:D .."
(a) (h) (e)
.
PROGRAMs/FUNCTIONS/ACTIVITIES ~ TOTAL
a. Toeal pror,.m (A. ./ ciGto)
outl.y1 to date S S S S
b. z,....: Cumwlattv. ptt)fra,m '''com.
.. ::: ~m oullaY' (Urw . _iNY
d. tA6m..-.d n-t e.ah outta", for .d~.ftC.
~ned
a. T_I (SM'" .f /Wo... d: d)
t. Non.,. ede...1 .n." of amount on .ttt'M .
.. f' ede,... 1"'" of amount on II". .
h. , e<te,... p.ytnefttl Df'n;ova"" ftlQu.ued ..
I. F ...,.., the,. rtOW .-.qu....cI (LiN ,
...0-. Ii... A I
), -...,.. r'9Quir.cl by lot month
_h, ......n ~..te<t
br ,. ..,...., ,.,..mor .,WtC}'
'or v.. In m.j1dnc II"" 2nd month
xhedwled advenC'M
3... mo"1lI
12.
AL n: Rl'IA n: COMI'VT A TlOf4 FOIl ADV AftCE:5 Of'fL Y
a. Utimoled Fed....1 ....h DUlloy. thot will bo modo dun"8 parled .......... by tno octvonce
s
D. lAAa: Estimated belanu 0' 'ederal eal" on hand.' of beI'i"n'''1 of advanc. period
c.. Amount r~u"'.c:t (U'W Go .........li.w &)
11.
s
CVl'TI~IOf'f
SlaNA 1'\1"[ CW AUTHOaIU.D CUTlP'YING O'''CIAL
lOA T[ "lOUEST
lU8wlntD
I nl'tltl' lOot Ie ,he boll 01 my _O<!..
aM beh.' thoe d.b .bow are COI'r.a and
1M' all outl.,. ...,. mad. in 'cconS.~ ,""-0 OIl ....,HTJ;O NANe AND nn.t
...th the ,,..", COf'tdittonl or other I''''''
"'.M Ind th., peyment i. due and h.. ftOt
-.. p.-..Iy _u_<<l.
(-.-
,0'--'
TQ.E""ONIE
(-~
lWI __ tw ...-r _
""-101 EXHIBIT J
IT/IJ14OiUllD roo- no n_711
~M''''''''t1 ..., Offtc.a.. ..."...._'" .ft4 ..,....
ClRCUL...R NO. ....110
Federl!1 Grants Ml!rlaoement Handbook September 1978
A-110:10
'\
..
Appendix I
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:11
INSTRUCTIONS
Please type or print legibly. Items 1. 3, 5. 9,10, lie, lIe. 111, llg, lti. 12 and 13 are self.explanatory:
specific inslruclions lor other items are as toltows:
ItrM E"trv
Indic... whether (&'Quest is prep' red on cash or IC'
crut'd uoendllure bU'I.. All requeSU lor .dvlncel
I"an be pn:p.tf'd on I eun bitt'.
(n,e, the Feder..1 l"I"t numbe', or other identity;ng
number luigned by the 'FeCl.tel span.o""1 .gency. It
the ,dvlnCe or ,elmbu"ement is lor mOt', thIn 0"'
r,..nt or other I.,"menl. innl1 N/A: U'\cn, ,now Ihe
.SI,etr.te .mounts. On , MP.,.t. Iheet. Ii", .,Ch
g,ent Of' .S'reoement numDel ,nd the Federal shere of
outlay' made .."nll 'he l'ln' or I.re-e-menl.
6 En..' thl employer Iden,iliclhon number .ni~ned by
the U.S. Inurnll Rrten"e s..rvice. or the FICE (in'lUlu-
tton) code iI reque-rted by the F ede,.1 .,eney.
This 10lU is r.urved for .n Iccount number or other
kSentity.nE' numDef thl' may be au,sned by'''.
r~ipi.nl.
8 Ent.r the month. dey. and year for the bf:ei"ninl Ind
.ndine ot the prr10d covered in thil request. If tn_ ,....
Quelt is tor In .CSvanCe or tor bott\ In adYlnce and re'
Imbv"cment. snow tl\e period It'lt the advanc. win
cO'\I"er. If the rlQuelt Is lor r.imbunemenl. "hOW the
p.rriod tor which tnc. r.''''burscmcnl is requested.
Hote: The Fed.,.1 "ponSOrinl .,encin ha" the option of
,eQuinnl recipt&onU to complete Ite",a 11 or 12. but not
both. Item 12 lhould bI UMd when only a minimum
amount 01 into".,.tion is nftOed to mall.. an ad..,ance
Ind outlay intonnation cont.linld I" Item 11 Cln be
"'lined In . tlmlly manner trom other repo"",
11 The EJurpoae of t". 'VH\tc.at COlumn. C.). (b). .l'td (e). is
to orovidl lC)8ce lor JoepeMlte cost breakdowns ......n a
rro;eC\ hi' been p'l"n..d and bwd@elf'd by Orot'nm.
function. or Ict;viry. II additional columns Ire ,,"eeoC.
1lr'Wl E"trv
use as ",any additional 10""' as ne-eoOed and indl(..lle
pa,e n"In"r in spiel P""""",ed in upper rig'ht: t'\DIoI'.
eYer. the s.ummary tolll, 01 III prOI'lml. function..
CJII activities Ihould be ,nown in tne "total" co'umn on
th~ hrlt p.le.
11. Entet in "u 01 aaU". the month. diY, end yeu of the
Indlng 01 the aceoun"n, r-eflod to .....hir" this Imounl
applicI. ["Ie' prostl", oull..y' 10 diU' i,.et of felurll:t'.
rebel.... and dlscounl,). in tne appropnate Columnl.
fOf reqUe'l1t ,",reoared on . elllh bll"'. out1ay, are the
.um 01 actual (..uh dlsoon.e"'enlJ 'Of loods and wrv'
ieC"S. the lmount of indirect flpen5es eharye<!. the
value 01 in.lund conlrtbuhOft' ap~ie<t. and the amount
01 CA"h advanct"5 and p.aymentl made \0 lubContnc.
ton 1rM'S lub,~ip.~t'" ror t'e'Questl p,epered on .n,
accrued eapendltu~ be.". outlay' are the sum o' the'
actual c,n" dlsburu:ments.. th~ .mount of indi,ect ...
penlel incurred. 8nd th. ne1 Incr.aw Cor deer.au) In
the amoun" ()W'IIlI'CI by Ih. reciptent 10' loods. and othe(
proDf'rty rec.....,ed and to' t.MC~ ~t"'ormed by .m.
plDy9C's.. contntcn. lubgnnt"' Ind 01....' OIyeoel.
l1b Enl.' the cumu'alivc c..lh income received to datt. tf
reoue4U If. JWeopared on I CoIlh b.nis. For r.-QuC"rt1
pt'I~r.cl on an .CCrv<<S caoendrtun ba,il. enter the
c.umulative incom. ..meod to, dale. Undec' .tth.' basil.
enter onty the amount aooliab'. to prognm income
t".t ....c required to be used tOt the On:t,ec't or p~
Itlm by the I.rm_ of th. ,nII,,1 or other a"eement.
11 d Only when mlllkins reQuests. tor Mt...nc. peym.nts.
."t.r th. lotal uhmated amount at c.as.h outleys ,".l
"",II be mede durin. the penod cO'W.red by the .dyanc.a.
13 Comotele the certirtCltion ~tor. MJbmit\in, thi,
reQues.l.
..
"I
I
Office of Management and Budget Circular A-110 (7/30176)
OUTLAY REPORT ANO REQUEST rOR REIMBURSE.
ME/ofT fOR CONSTRUCTION PROGRAMS
($H .,,_Inut-i,",", 0" bQc:k)
J. HO(U.l ,,-oHSOlltINQ AGrf'lCT .....to O"'GAHILATlOHA'- HUH."'" TO
WHICH tHIS 1II.[1'OA1 IS SU...lntD
.1
1. .,.,,.( or "tOur Sf
On......... 0 ~/lJt1'IA..
ApP"O..,~d by O"'C. 0' ManA,ement .nd ,....C;( 0'
Budan. No. Sl>-RO ISI
L ,."SIS 0' "(OulSt
o C...,M 0 ACCJllUA'"
"AQ(S
Co i~~~:j~I;:":~~:(~T:~IC"flD "- ,......11"1.. ,....nl(NT "tQUtSl MO.
IT H.D(Ml,. AerHer
L t....."'oyt"- IDtfolTlnCAT.OPll
"'u".'"
7. "[I:.,.,("T ACCOVIl\IIT 0" OTHI" "(1101) to'fU'O IT hit .roan
IDtHTln....a HUloClltA
'lIl;OV t....M.. ~.. ,.-..
160 ,,,Y[L....~..,,...JI...-w... -' u 4AI"~ u-. M-"
10 ,"...u... .... ..-.1
t. lI'.[CI,..,"T OIllQAlCllATIOH
,,-
,....~
.,-
Cu,.
.s.... ....
-ell' C....:
11.
CLASSIFICATION
(0)
a. Admin'stralive ....genu I $
b. Prellmlnlry upenw I
c. Land. ItNc1uru. l"tgttt-o',w,y I
d. A~hite'C'\unl engine.,;nr besle re-ers I
.. Otn., Irchltectunl ."gin""", 'e-es .1
r. Project In..pection 'H1I I
E. Land deyelopment
h. R.loc.Uon upenn
I. Reloc..tion payme"" to lndlvldual, and
business.,
J. Oemoll'tlon and AmO\ll'l1
k.. ConstruCtion and pro;e<t Imp",.,.,"e"t I
cOSI
I. E.Quipment
m. Mlscellaneoul COlt
n. Total cumul,UvI to dlle (sum o'-li"n
. tnru m)
O. Ot:duction, tor program income
p. Net cumul~hYe to date (line n minus
line: 0) .
Q. Feder.1 ,,,.,, to dllle
r. AetlabHiUltion .'I"ts (100% r.im.
bu~em.nt)
I. Totlt Federal st...,. (..urn or line, Q
and r)
t. Feder.' INyment. previously ,...
Quest ed
u. Amou"' ~Qu"ted lor ,.imbu",eme"t I s
v. P.r~."t'l't ot p"y1.ic.a1 complnion 01
pro,ect
12. CERTIFICATION
I ~.n.jfy that to the best of my '-nowled._
end belief tht billed casu or disoune.
ments Ir. in .ccoreSltlce wtth the 'erTn"
of the I)to;eC'l end 'hll the r..mbu"emenl
,ecru.nts the Fede,~1 sh.,. du. _hie,.
he' not bten previoul'Y reQueste<l end
tl'\11 In in10e<:hon hu bun performed
and .11 work il In .c:corCSanCI ....ith l"e
t.rm. of .h_ 'ward.
a. RECIPIENT
b. ReOres~"t..tive
C~l'1itylnlt to line
Ilv.
:11-101
EXHIBIT
,,-
11.. -..
jw_
CU..
.5t...... ....
Z" ,.... :
STA rus OF nJND'S
PROG R AMS--rU NCT ION s--ACTlVI TI CS
(b)
te)
s
$
J
I
I
I
I
Is
s
0'
Ie
%
'ICM"TU.t 0' AIJ'1HO.IZ(O C.1.'lrr,,,,C
O"'ICIA...
rr~(o O. ....INreO HAM' AHO 'IT,-t
I "ONHURt or A\1TNORIHO ctRTI""'NO
0" ICIAL
rr"'C:D 0. ....INTc:O ,......l AltO '11 \..(
TOTAL
$
I
1
I
I
I
Is
%1
I D"T( 11I(11'0'"
IV.MlntD
I T[lc:r",ON( IA- ....
..__ ...... ..-1
lOAn S'CNt.
I Ttl[IloMOlOf( ,....- ......
..-.._ ..... ...--1
5'''''''n.....n ,on.. :"':1 0_76'
,.....,...........',',.......".....~....._.......O"O(!''',~
%
A-110:12
.
...
I
I
Office of Management and Budget Circular .A-110 (7/30/76)
INSTRUCTIONS
Pl~8" lype ()( print legibly. Item. 3. ~, 5, 8, 9, 10, 1 h. and I1v are ..If.explll""tory; specific instructions
lor o<har nem. .... .. tol\~:
~~ .~
~.rtr. __. ........".....,," ~ " 1M IeQUe'3't .. ,....... ....
.______ .....4 ........ld ~ th. ..-. ClIMt g( a..
---
Z I~ .....c.h... .~ .,. ............... ." .. ~
~ndtw.. .,. .... ....~...t MaM.
,......, ..... .~., 1OiP,.,(1~ "um~' .....-e"'"' b..,
tr'l. U.S. Int.""'" A.......... s..-tc. I- net (W\.-ttn.mon)
.ode M ,..qu~ ~ IIW fMj..,..J ....-cy).
,",Is .,..... ... ~ tot an account f'lU"'~ et 8th...
Idoent.t+ytftC "u"""" tt.( ,....y 1M ............. W u...
,...;.,Mem..
II Th. r-'flOM .. _, ........... Io,l IIII'DUl(1\ Ie) k lD
r........o. ..,...ow ..., .......,..t. ...c. ~~ wfMft .
_~. p~ .... ~ ,.."""-' .f114 ~ed by p4"O-
,N"', ~" ., ""","V. " ..o~ ~,,",","" -,...
......-ded. u... No ....."1 aOdlt1o",el ~ .. ......cted .~
w.dlc:ll'. ,...,.........,)fIl........ ~ in....... ~
~'. "". .......flYty .,.... ., .11 fHOIn""" tv....
,........ tot .~ .hould t., ........ lft 'N -",aI-
eoIumf\ .., the ..... ...... Alt ."...."..a .,. ,..,..,..... ...
. .um,,~ ~.....
1~ In'" ...-.... _nOM.... _. -.. M _. ~I
........ r"Wf'\,a1. 0( ......de& .nd ..., .ctwf' adm.nfwt...t....
~..... ~. .... ."'....nt of ',"",~ ~
""""." .~ by ~"M ~~. Nee _how
\t'4 amou nt ., ."..,...... ......... ... . -pi..... Jh.....
II_ ....... _ -",Inl .. _ ~ 01 _'''1 .nd
........,.,,1. INlki"C ..,,,,..,. ...-4 ,.,.'" li"ktftC --
....,... .,.,j .. _ ..,.,. ....1.... priG< lD ~
...o<J""""'" ~T~.
I h _ .ft .__ dlroetly ___ - u.. ----.
_ 01 Ioond, ........, ..__ .... ....\eCl ~-oI.
_.
I W _ _ _ let _ ./ ...hlt-.nl -r---
II. u- _ _ltoCtum ....-.-;"1 _. Do net
h"ICh,o. ...... ...,....,-U ........ ... ..... d..
111 (1'Iftoef'~....n4 MIdM.'__,of'~.........n..., ..,.d
---
III [_ 0<< __ __ _" _ -....- 01
~ ~.,.. W\e ~ ~ 0( ...... .....nt it. ..nd
~...t. The .~ ,....,.....,.nc _ /land ~
~ ~ ~... ..rth ......;.- .......tuC'ltoft
~ .. -0-...... ....",., ....... _....OfT ..net ."'~ e.ft
_Ir..
II. l...- _ __ _ .- \00 ,..-. -
~ ........... .1IlIiId .-t GD.u ~ ~ft( .........
"'c ~ _I. Do _ ""'lwd. __ _...s_
~ion ..,..ini.......-.tiww ....,........; ~ efftCN""
........, be MId...... ill ...........a. _-... Oft ...... &.
Iii ~r .... ........rot _ __ ...........13 ...... ~ -
""'10....... \0 4..pl.a.... ,....,...oft.. I.~. bw$i.... con.
c-ml. .,.., nGft""'_ ....n..........
1..... ,--,
11' (rIcef'.... ....".... .Rd ..... crf .""r'oY'" of the
Ndpe..r.t .tIIIId ,..J"'""'I!""'- to ,....rd perty comntC'1.0'" ct..
..aty .......... "' JW~' o~1Of' ~ ,~t of
..~ 1.0- ~ ..f"lIICI. Nt ptOC....ol tram the
... of .......... 01 ..... f'WT'IOW"I' of wtNC'\uf.1 ~"Id be
c:rwdfted to ...- ac:count: IMNOy' ,.. ^e<tinl ft.c.
....-ouflts if ~ by """ r., e,.1 ......y.
11k E.....' t~ .,.....,fIIU .uoc...ed wnh the ectual con.
~ of. eddllt"Oft lie. 01 ,"'Of. lion of . lacility.
/tho. .nctune in 'hia CIIteopot")'. 'he ."..oontl 'Ot rtr'Oj.c1.
tm~ ....c.. ., ~. 11,.....,'. ,.lIIIld.c..pl"'&.
_ 1ICMIrc.
J)I Em- emcwms trot ... ~~e"". bott'l "..<I and mo",
.~. ...c...,....". .. eqw1r",..-.l uw:O to' conllNetion. 'Of
.....m.,.... ,.,.nn._m:ty _tUC"'ed IebOnltOl"y '.bl.... bU6fit.
... Mldio .....- .ya..-n... _OW'ebH (Ink.. cl'w!tin. and
-..--, -~
11'" 1t.-.r...........,fIlIIb 'Ot _" ......-a. no( sp.eclf\c"n" m_n.
---_.
11.. [rItet the ~ C'U",IIf~h.... .ftIIOUn( to del. whiCh
.nould ........ ........ 01 ..... . 8'\",.".." m.
1 Le .,.,.., 1*"- ~ .t'nOUnt: of prornm tftC.ome e POhe.d '0
ttM rrant Of Cll)ntntOt ~ent ucep(, Income In.
..~ ... ~ .. ld_nUfy Of' . "pili",'. .h..... ot pepei"
... -.own:- end trP- ., lhe l.......m'.
1)~ !.rt4... a-..... curnu~ .mount to d.t. which .hou~
..... ttw .........c. ~ Of'\ Knot n minuS the .mount
... Ii,.. o.
1~ ~ t.... ,....... ....~ 0( ..... .mount shown on 11M p.
111 E.ntwt tt... ~ .,( rwt'4b1Htanon ,n"' peymen"
,...... to i~" ........ P'W,.m ...i.I.'jo., ptO'W'iGn
100 ,...- ~ ~ I'" '0<1....1 ......cy.
III Em... _ -' _ .. F_nl pa,...-13 ~"'u.1y
___ " _ ....... 10 _ .... ___I r..m.
...--..
1111II ...., .. ........c now bMl"'C' .-..q~ ,.,. .-...bu"...
~ .". ~ .,....,ld .. th4 _i"_enc.. ~.n
If"<< .",........ ~ ... ~ . .ftd t. If di"...nl. ...
,..... ... . ...,...... ----
u.. To.. ~M ~ .... __ """'101 ....no ;. r..
........,.. .. ttw ~t1o" vi ... p~rwn. Th. 0.""
.nouId .... ,... .ct"" .... ."" ...,.,. I. IUbtnin...:S \0 .".
r_.........
1211 To M -'"'C'JI.... -."...... ~ rwD",~"t.U",",
WftO i& ~tty;"C .. __ ~'" of ",,",,-<1 como'. lion
... ~ed tat ift .. ...,.... ot .". I,."l CM' .I.........".n\.
A-110:13
,
I
Office of Management and Budget Circular A.110 (7/30/76)
ATTACHME;NT H.-CIRCtlLAR No. A-IIO
MONrTORIN'C AI'lO RCrORTJNC T'''OCRAM
rf:RF"OR MA Ncr
1. This I\ttachment set.s forth the proce.
dures for monitoring &nd reporting progr&m
performl\nce or reclplent.s.
2. Reclplent.s 'Shl\ll monl tor the perlOrm&:lce
under gr&nu and other I\greement.s and,
,,'here approprl&te. ensure th&t time sched.
ules &re being met. projected work units by
lime periods &re being &ccompllshed. &nd
othcr -perlorml\nce go&ls &re bel ng achieved.
ThIS review shall be m&de for ench progrllm.
function, or I\ctlvlt.)' of e&ch abreement I\S set
lorth In the &pproved appllcl\tlOI1 or award
document.
3. Recipients shl\lI submit 1\ perform&nce
report (technlcn! report) lor e&ch I\greement
th&t brleOy presents the lollowlng InlormR-
tlon lor e&ch progr&m, lunctlon. or "ctl\'Il)'
In\'olved I\S prescribed by the Federal spon-
60rlng agency:
a.. ^ compo.rlson or I\ctu&l I\ccompllshment.s
""Ith the gOo.ls established lor the pcrlod. the
:lnc!lngs of the In\'estlglltor, or both. rr the
output of progr&ms or projects c&n be rel\dlly
qu&ntlned, such qU&ntltl\tlve d&t& should
be related to cost d&t& for. computation oC
unit cost.s.
b. Re&sons why established goals were not
met.
c. Other pertinent Inform&tlon Including.
",'hen ilpprOprl&te, &nal~'sIS and expl&n&tlon
of cost overruns or hl!;h unit costs.
. 4. Except a.s provided In & &nd b belo"".
and In subparagr&ph 3&( I), Att&chment G,
reCipients shall submit the perCormance or
tC'Chnleal reports to Federa.l sponsoring ..gen-
cles &nd the Flnancl..l Status ReporU cov-
ering the same period In the frequency est..b-
llshed by Attachment G oC this Clrcul..r a.nd,
....here a.pproprl1\te. il nna.1 technical or per-
formance report aCter completion 0: the
proje<:t on a d&te speclned b)' the Federal
sponsoring agency. The Federal sponsoring
agenc}' shall .prescrlbe the frequency with
""hlch the perfOrmo.nce report.s will be sub-
mitted ...1th the request for advRnce or reim-
bursement when tha.t form Is used In lieu
oC the rlno.ncl&1 Status Report. Except &S pro-
\'Ided for In p&ragrllph 5 below, performance
reports sha.lI not be required more frequentl}'
tn&n qua.rterl)' or lessfrequentl~' than &n-
nUI\II}'. Federal sponsoring agencies mal'
",...I\'e the requirement for recipients to sub-
::1.lt perCorm&nce report.s with the nnanCla\
reports under the lollowlng circumstances:
a. When the reCIpient Is required to sub-
mit a. performllnce report ....Ith a continua.
tlon or renewal application.
b. ,",'hen the rederal sponsoring agenc)' de.
termlnes thl\t on-slle lechnlCal InspectIons
and certlned completlcHI de.to. wlll be sum-
clent to ~valuate construction proJect.s.
c. When the Federal sponsoring agency reo
quests annual tlnanclal report.s on a nscal
)'ear basiS but It IS ne<:essar)' to get annu&1
pregress reports on a calendar year basis.
5. Between the required perlorman~e re-
porting dates. events mny occur tho.t have
s!.nlncan~ Impact upon the project or pro-
;;am. In such Instances, the reCIpient shall
Inlorm the Federal sponsoring agenc)' as :<oon
as the 10110""lng t)'pes oC conditions become
knov,"n:
a. Problems, delAYS. or ad\'erse conditions
~:....t ....111 materl&ll)' allec~ the ability to I\~-
tl.ln program objectives. prevent the meet-
In. oC time schedules &nd goals. or preclude
~he attainment of project work units byes.
t..l:Illshed time periods. This cl".closure shl\ll
be accompanied b\' a stlltement oC the I\ctlon
taken. or contempll\tec!, &nd Ilny Federal &5-
51stance Deeded to resolve. the sltul\tlon.
tL FlIvorable developments or e\'enlS thn~
e~&"b:ae t,lme schedules to be met soon~:" than
I\ntlclpRted or more work units to be pro-
duced than orl~ln.lll' projected.
6. lr any performance review conducted
b\' the recipient dlsclo"es the need for chllnge
In the budget estlm&tes In I\ccordRnce ""~ll
the crlterl.. estl\bllshed In Attachment J Co
thIs Circular. the recipient shl\ll submit a re-
quest for budget revision.
7. The reder.i sponsoring agenc)' shnll
make site \'Islts a.s Irequently I\S practicable
to:
a. Review progrllm accompllshment.s and
management control systems. and
b. Provide such technlcal asslstancel\s
ml\\' be required.
8: Federl\l sponsorln!; I\gencles "hl\ll submit
proposed technical &nd performance r~ports
to the Ornce of Manl\gement I\nd Butlget for
npprovl\! In I\ccordl\nce wllh the report clear-
Rnce requlrement.s or OMB Clrcul&r No. A-40
a.s re\'1Sed.
ATTACIIME;nT L--CIRctJ1.A" No. A-IIO
rA\'MCnT RCQUIACMcnTS
I. ThIs attllehment esta.bllshes the re-
quired metho~ of m&klng pl\yments to reclp-
lent.s. These methods will minimIze the lime
elapsing bet....een the disbursement by these
reclplent.s and the transfer or funds from the
United States Trel\sury to these reClplent.s
"'hether such disbursement occurs prior to
or subsequent to the tr&nsfer 01 funds.
2. Payment.s can be made to reelplent.s
through a letter-of -credit, an advance by
Treasury check, or a reimbursement b)' Treas-
sury checl<.. The 101l0",'lng dennltlons &pply
Cor the purpose oC thiS attachment:
a. L.ctter-o/-Credit.-^ letter-oC-credlt Is
an Instrument certltled by an authorized orn-
elal or a Federal sponsoring agency that au-
thorizes a reCipIent to draw funds ....hen
needed from the Treasury, through s Fed-
eral Reserve bank I\nd the reclPlent's com-
mercial bank, In "ccord&nce ....Ith the provi-
sions of Treasury Circular No. 1075, as re-
vised.
b. Aclv'1T\Ce by Trca.sury clleck.-An ad-
vance bv Treasury check Is a payment made
by a Trel\Sury check to a recipient upon I~
request bet ore outlays &re made b)' the
reclplen t. or through the use of predeter-
mined payment schedules.
c. Reimbursement by Treasury clleck.-A
reimbursement by Trea.sur}' check IS a Trea.s-
ury check paid to .. recipient upon request
for reimbursement Crom the recipIent.
3. Except for C<)nstructlon gr..nt.s and
other construction agreements Cor which 01'-
llonal payment'methods are authorized, 8.S
described In paragraph 5. the Jetter-of-credlt
method shall be used by redenl sponsoring
agencies I! ..11 of the following conditions
exist:
a. IT there Is or wUl be a continuing rela-
llonshlp between a recipient and a Federal
spcnsorlng agenc)' Cor at leut .. 12.month
period and the total amount oC advance pay-
ments expected to be received ",'Ithln that pe-
riod from the Federal sronsorlng agencr Is
5250.000 or more. a.s pre.~crlbed b)' Treasury
Circular No. 1075. ror JOint Cunded projects
the Treasury ha.s author\2.ed a dollar crlterlll
oC 5120.000. .
b. if the recipient ha.s established or dem-
onstrated to the Federal sponsoring Agency
the willingness and ablllt:!" to maintain pro'
cedures that "'ill minimize the time elaps-
Ing bet\l'een the transfer of funds &nd theIr
dIsbursement b)' the recipient.
c. Ie the reclplent.s tln..nclal man&gement
,,'stem meets the stllndl\rds for fund control
~nd accountAblllLy prescrIbed In Attachment
F to this Circular. "SL&ndards for F'Inanclnl
Manllgement S~'stems."
~. The method or ILdvl\nclng funds by
TreMurv check shall be used. In accord"nce
,,'nh the prO\'lslons of Treasur)' Clreulllr No.
I
A-110:14
1075. ,,'hen the recipient meets 1\11 01 the re-
qulremenLs specified In parR~raph 3. above.
'..ccr t tho~e In su bpara.rl\ph 3a.
5. The reimbursement by Trel\Sury check
method sh..1I be the prelerred method lithe
Ieclplent does not meet the requlremenl.S
~neclned In 6ubpnr"srl\phs 3b and 3e, I\bove.
At the option 01 the Federal sronsorlng
lIgenc)', this method may I\lso be used on &ny
construction agreement. or II the ml\Jor por-
tion 01 the progl&m Is I\ccompllshed through
prlvl\le m1\rket fln..nclng or FederR! loans,
I\nd the Federal I\sslstl\nce constitutes a
mlllor portion or the program. When the re-
Imbursement method Is used. the Federal
sponsoring a!:ency 6hl\II make pRyroent
within thlrtl' dn)'s alter receipt 01 the bill In!;,
unless the bllllnb Is Improper.
G. When the letter-of-credlt procedure I.
used, the recipient sh..1I be Issued one con-
solldllted letter-ol.credlt whenever possible
to cover Rntlclpl\ted cl\sh needs for 1\11 grants
and other &greement.s awarded by the SpOIl-
sorlng agene)'. Uke,,".e. to the extent po..l-
ble. when th'e I\dvance b)' Trel\Sury cheCK
method Is used, advllnces should be clln-
solltl&ted (pooledlfor RII grant.s I\nd other
agreements made b)' the sponsoring &gency
to that reCIpient. .,
7. Unless otherwise required by 11\...'. Fed-
enl sponsoring agencies shl\lI not withhold
pl\ym~nt.s for proper charses made by re<:lpl-
ent.s at I\n)' time during the project or pro-
~rnm period unless (1\) a recIpient has 1l\lled
to compl)' ...'lth the probr..m objectives. aWl\rd'
conditions, or Federnl reporting require-
ments: or (b) the recipient 15 Indebted to
the United Stl\tes. I\nd collection of the In-
debtedness ....111 not Impair accomplishment
01 the objectives of a project or program
sponsored by th: United States.
Under such condItIons. the sponsorIng
I\gency may. upon reasonl\ble notice. InCorm
the reclplent that pl\)'ments will not be m5de
for obllgo.tlons Incurred I\Cter a specltled daLe
until the condItions are corrected or the In-
debLedness to the Feder..1 Government Is
IIquldo.ted.
AT'rACHME;nT J.--CIRCU1.AR No. A-IIO
ReVlSION or TINANClAl.. rLANS
1. This ..ttachment sets Corth criteria and
procedures to be followed by Feder&1 spon-
sorln~ Ilgencles In requiring recipients to re-
port'de\,llItlons from nnanclal plans and to
req uest approvals for nnanclal plan re-
visions.
2. The On&nclal plan Is the nnanclal ex-
pression of the project or program &$ &P-
proved during the application I\nd/ol" .....ard
process. It may Include either 4he Federa\ and_
non-Federal share. or only the Fede",1 .ha.re.
depending upon sponsoring agency requlre-
ment.s. It should be related to performance
lor pro:;ram evaluation purposes whene..er
I\pproprll\te ..nd required. by the Federal
sponsoring ..gency.
3. For nonconstructlon awards, recipients
~h..1I Immediately request appro..&ls from
rederal sponsoring agencies when there Is
re:>son to believe thAt within the next s:ven
dl\Ys a revision will be necessary for the
Collo",'lng reasons:
&. Changes In the scope or the obJectl\'e of
the project or pro!;Tam.
b. The need for addItional Feder&! fund-
Ing.
c. The transCer oC amount.s budgeted fcr
Ind Irect costs to absorb I ncrel\"es Indirect
costs or vice ven... U approval Is requIred
by the Federal sponsoring agency.
d. The expenditures 1\5 require appro\'I\! In
I\ccordnnce with l'"MC 73-6. "Cost PrlnclDles
lor Educ..tlonl\l Institutions." For &11 other
aWllrdS. &Ppro\...1 reoulrement.s for other
Items of expenditures may be ImDosed II they
nre consistent ,,'Ith those In I"MC 73-6. No
other requirements lor speclne Items ml\Y be
I
Office of Management and Budget Circular A-110 (7/30/76)
Imposed unles.s a devla~lon has been ap-
proved by the Dalce or Man~ement &.Od
Budge~.
e. Recipients plan to transJer lunds allou.ed
lor tr..lnlng allowances (dLfect payment..> to
trainees) to otber cal.egorlea 01 eXJ><'nse.
4.. None or the subs~..ntlve programmaUc
....ork under a gran~ or other agreement may
be subcontracl.ed or trAnslerred wl~hout prior
approv..lof the Feder..1 sponsoring ..!:ency.
This provision does not apply to the purchase
of oupplles, mAl.erl..I, equipment, or general
suppor~ aervlcea.
5. The Federal spon.-.oring "'Gency may
,,11'0. ..t 1l.5 option, r""trlct transfers 01 lunds
o.mong dlre<;t co.,t cn.l.Cgorlcs lor ..wn.rds In
....hlch the Federal sh.n.re exeeeds "00.000
....hen the cumuln.tlve a.lUoun~ or ouch ~rl\ns-
lers exceeds or Is expected to exceed five
perCQnt or U"le totR.! budget lLS I...,~ a.pproved
b)' the sponsorLng agency. Tbe sl\me crll.Crla
shall ..pply to the cumul..tlve a.moun~ or
translers among progn>D\8, lunc~lons, And
acth'ltles when bud!:el.cd aep..r..l.cly lor an
aw..rd, except Lhat the Feder..l 9Ponsorlng
"'Genc)'shaJl permit no trn.o.sler that would
c..use any FederaJ approprla.tlon. or part
thereof, to be used for p\1l1)OSC6 other tban
those Intended.
6. All other changes to nonconstructlon
budgel.5. except for the ch..nge5 described
In paragraph 8, belo"", do not require ap-
prov,,\. This Includes the use or recipient
runds In lurther&llce or prosram objectives
over ..nd above the recipient mlo!mum sbare
Included In the n.pproved budge~.
7. For construction a......rds, recipients
shall request prior a.pproV&ls promptly from
Federal sponsoring &Geo.clcs lor budget re-
visions wherever:
... The revision resuJl.5 from changes In
the scope or the objective of the project or
program, a.nd
b. The re,'lslan Increases tbe budget
amounts 01 hderal funds needed to com-
plete the project.
8. When a Federa.l sponsoring ageD:Y
ma.kes an a.wlU'd that provides support.tor
both construction and nonconstructlon ....ork.
the Federal sponsoring agency m"r require
the reCipient to request prior ..pprovn.! from
the FederaJ sponsoring &Gency belore m:1klns
any lund or budget trAnslers between t~e
two types 01 ""ork SU;lporte<l.
9. For both construction and nonconstruc-
tlon .......ards, Federal. sponsorlOG agencIes
shAll require reclplenl.5 to notUy the Fed-
era.l sp:>nsorlng agener promp~ly ....henever
the amoun~ 01 FedenU authorlzcd lunds IS
expected to exceed the nee<1s 01 the reclplen~
b)' more than $5.000 or five percent 01 tbe
Federa.l award. ...'hlchever IS gre3~er. ThIS
notlfica.tlon .....Ul no~ be required If "ppllca-
tlons lor addItional fundlng are subrnJ.tte:l
lor contlnulng granl.5 or contracl.5.
10. When request.lng ..ppro,'al lor budget
revISions. recipients shall USe ~he bUdgot
lonns thM "'ere usc<l In tbe applicatIon
unless a letter request ...111 suffice.
I J. WIthin 30 cn.lend:u dll)'S Irom the d..te
0: receipt of the request ror budl:et reTI-
slons, 1"edera.1 sponsorlns "gencles sh..lI re-
v'e.... the request and notllr the recipient
whether the budge~ revisions have been ap-
provC<:l. II the revl:<lon Is stlll under con-
slderat.lon a.~ the end or 30 calendu dars
the Feder..l sponsorinc "Gencr shall lnl0r~
the recipient In wrltlnr or ~he date when !.be
reC1plent may eXi'ec~ ~he decL,lon.
ATrACHMCNT K.--Cll.Ctll:"-" No. A-IIO
C1.0SEOUT rnocmtrn!:S
J. This attachment prescribes unrtorm
closeou~ procedures lor Federal erant:; ..nd
other "gr~menl.5 ....Ith reclplenl.5
2. The lollowlng deftnl ~IOI1S sb..il ..pply ror
~he purpose or th t. attach me n ~ :
a. Czo.eout.-Tbe clO6eOut or a grant
..greement 1.8 the proeeas by which a. ~der,,1
spQll.&OrlOG "'Gency del.ermlnes thAt all ap-
plicable admInistrative actions and oJl re-
qUired worJr. of ~be AGTeement have bc<:n
complet.e<l by ~be recipIent and the 1"ederal
sponsorlns agency.
b. Date 01 complctiO'n.-Tbe dal.e or com-
pletion 10 the dal.e on whlcb oJI worJr. under
gra.ota and o~her 8.l;Teementa la complel.ed or
~he dAte on the award document, or any
, oupplement or amenc1ment tbereto, on which
Pederal sponsorship ends.
c. Di3allowcd co.t..-Dlsallowed COGta are
those ehRrges to a grOont or otber ar,reement
thRt the FroerRI spon..orinG a~ency or IL.
represcnt..Uve del.crtnl.1\cs 1.0 be ulll.llnw-
able, In I\ccordAnce with the applicable Fed-
eral cost prInCiples or o~her conditiOns con-
talnedln ~.bo agreements.
3. All Federal sponsorlnc &Gencles shall es-
tAblish CI06eOU~ procedures that Include the
lollowlng requLfements:
A. Upon request. the l'ederlLI sr>onsorlns
a(:r.ncy sball m"ke prompt pnymenl., to a
recipIent lor allo......ble relmbursnble co.,ts
under the grant or other agreement being
clOl.'W:d out.
b. Tbe recipient sh..1l Immcdlately reCund
..nr bala.nee 01 unobligated (unencumbered)
c'-Sh that tbe Federa.l sponsoring agency hns
advanced or paid and that Is no~ Rutborl7.ed
to be retained by the recipient lor use In
o~her grants or other &.!:Teemen ts.
c. The Federa.l sponsoring R!;ency shall ob-
ta.ln Irom the recIpient within 90 calendAr
days alter the d..te 01 completlon or the
agreement all OnanclAl. perlormanee, ..nd
otber reporl.5 required as the condl~lon 01 the
~eement. Tbe Agency mar grant extensIOns
when requested by the recipient.
d. Wben authorized by the gr..nt or otber
agreement, tbe Federa.l sponsorlnc agency
sho.!1 make a settlement lor any upwRrd or
down....ard adjustment.s to the Federal sbRre
oC costs after tbese reports are received.
e. The recIpient shall Account lor ..nr prop-
erty acquired wltb- Federal funds. or re-
ceived lrom tbe Government In ..ccord..nce
....Itb the proTlSlons of Att.&Chment N to this
Circular. Property Management Sl.Rndard.s.
r. In tbe event a final ..udlt hns not been
per10rmed prior to tbe closeout of the gran t
or oLher ~eement, the !"ecIera.l sponsorinG
"'1lgency sball retain tbe rlgbt to recover an
appropriate ..mount arter fullr considering
the recommendations on dt.sallowC<:l C06l.5 re-
sultinG (rom the final audl~.
4.. Suspension ..nd termination procedures
are contained 10 Attacbment L to this CLf-
cul..r.
ATTACHM!:NT L.-C~a No. A-IIO
snSPENslON ,\1m TE,,,,U<ATtON paQCEDtl'1U:3
1. Tbls attaebment prescr1bcs unUorm
suspension and l.ermlna~lon pr:>cedurcs lor
Federal grants and o!.ber >ccments wltb
re:lplenta.
2. Tbe lollowlng definitIOns shall apply
Icr the purpcse 01 this attachment:
a. TcrminaliO'n.-The I.crmlnatloD of "
G'ran~ or other agreemen~ mea.ns t.he CAn-
cellation or Federa.l. spon...or:<hlp. tD whOle or
In part. under ..n agreement at Any time
prior to tbe dal.e or completion.
b. S....pc7Uion.-The suspensIon or a grl\nt
or other agreemen t 15 a.n action by a. !"ecI erl\l
sponsorlog &GeDCr tbat tempor..rUy suo'-
pends Federal spoDs:>rshlp under the grRnt
or otber agree,"ent, pending correctIve RC-
tlon by the recipient or pendlJ:Js a decision
to termlnal.e tbe graDt or otber agreement
by the Federal sponsoring "i:ency.
,3. All Federal sponsoring acencles shAll
provide procedures to 1><: roUowed ....hen a
recIpIent bas t",UC<:l 1.0 comply wlLh U"le terrru
I
A-110:15
01 the grant or other a.,-eement and condi-
tiOns or standards. When th8.L occurs. the
Ft'deral spollsorlns ..seney may, on reMon-
able no~lce to ~he reclplenl, suspend ~he
!:rant or o~her a!;'"eement. !lnd ....I~hhold lur-
~ber payments, prohibit the recipient Irom
lucUTrUlg addl~lonal obligations 01 runds,
pendLng corrective Action by the recipient, or
a decision to lermln..tlon In accorde.nce ,,'Ith
r>araGraph 4. The Federa.l sponsor Ins agency
shall R.!lo.... all necess..ry and .proper costa
th..t the recIpient could not re..sonablv avoid
during ~he perIod 01 suspension provld~d th..t
ther meet the provisions or the appllc..ble
}'ederal cost principles.
4.. Federnl sponsorlns "Gencles shall pro-
vIde lor the s)'sl.emo.t\c settlement or ler-
IIIlnR~ed granl.5 or other agreemenl.5 Includ-
Ins the followlns:
... Termination ler eause.-The Federnl
.ponsorlns agencr mil)' reserve the rlsht to
termln..te any gTo.nt or other agreement In
wbole or In pllrt at any time bel ore the dal.e
01 completion. ....henever I:' Is del.ermlned tha:
the reclplen~ has lalled to comply .....Ith ~he
cond ltlODS of the agree men t. TIle Fed eral
sponsoring agenc)' shRll prompt1\' notU,' the
recipient In writing of the determlnatlOl; and
the ren.sons lor the termination, together
""Itb the eflectlve date. Payments made ~o
reclplcnts or rlX:Overles by the Federal spon-
sorlns agencies under granl.5 or other &.Gree-
menl.5 termlnllted ror caUSe 1;hllll be In ac-
cordance ....Ith the legal rights a.nd Ilablll~les
or the parties.
b. Tcrmi714tiO'n ler e01luenic1\.ce.-The Fed-
Crill sponsorlns "'Gency or reclplen t m..)' ter-
minate granl.5 and other al:reemenl.5 In whole
or In pArt ....hen both parties agree that the
eontlnuRtlon 01 the project would not pro-
duce beneficIal resull.5 commensurate with
the further expenditure of funds. The two
parties shall "!;Tee upon the termination con-
ditions. Including the eflectlye dMen.nd, in
the case of pa.rtlal termlna.tlons. the portion
to be terminated. The recIpient sholl no:.
Incur ne.... obllg..tlons lor the termlnaled por.
tlon alter the efTectl"e d..te. and shall can-
cel ..s mRn)' oUl.5tandlne; obligations as pos-
sible. The Federal sponsorlns agency shall
..lIow full credit to the reCipient lor the
Federal share 01 the nonca.ncella.ble obliga-
tions, properly Incurred by the reCipient prior
to l.ermlnatlon.
ATrACHM.CNT M.-CIRC"tT'~"R No. A-IIO
ST""'DAJ\O rORM rOil Al'PL TINe rOR
rCI!:J\AL ASSIS'TANC!:
I. This atta.chment ~romulg..tes .. stand-
ILrd lorm (SF 4.24.) to be used br pul:lllc Rnd
'prlvate Instltut.lons 01 higher educatlon,
public and prlv..te hospitals ..nd other quasi.
public and prlva.te nonpront organizations as
a lAce sheet lor appllc..tlons ""hen :lpplr1ng
lor Federal grant..> under programs covered
by P..rt 1. Attachment A, DMB Crlculu No.
A-95. In addition, Oogencles are pArt'cularly
encouraged to etxend the use or SF 4.24 to
common programs ""th State !lnd local go..-
ernmenl.5 ",'here this lorm Is now required br
FMC 74-7.
2. The SF 424 may ..Iso be used. on an 00-
tlonal basis. to lulnll the reQ\llrement.s '01
OM.B Circular A-95 lor a not:Clc":'lon 01 In.
l.ent, Irom applicant to clearinghouses. th:lt
~der..l /\SslstanCe ",'11 be applied lor. Loc:lI
or State cle..rlnghouse procedures WU: govern
ehe uae 01 the lorm lor this purpose.
3. The standRrd lorm .....111 also be used by
Feder..1 agencle~ to report to the clearing-
houses on ml\Jor ..ctlons tllKen on "?pllca-
tlons re,'lewed by cleo.rlnghouses In :lccord-
I\nce wIth DMB Circular A-95, and to notHy
Stal.Cs 01 grant.s-In-ald a,,'arded In "ecord-
nnce ....lth Treasury CIrcular 1082.
I
. I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:16
OMa .....p""".1 Ne. l'J-lIlO% \I
I FEDERAL ASSISTANCE z.. .o.P'PLI. I" 1lVW8U J. STAn I. l<\tWItR
A?'nJc....
CANT'S nON
I. TYPE 0 PRL1.PPlICA TlON "'PPLIo I. DAn 10E:Pnl- I. OAT[ r_. ...... , .. ..,.
OF eAT \Of'l T_ _co. - PltR
ACTION 0 API'\. ICl.TlOH 19 ASSIC~(O 19
(>1__,.. 0 HOT1fICATlOfC OF IKHJH (tIpt) L.~.t1
,............
-I 0 R(pQRT Of f!OEJW. ACTIOfi lito.. .
4, LEGAL ",PPLICANT /RECIPIENr S. 'tOf......L r:MPLOYER IDt:tlTIPICATlON NO.
.. Jrrro9liunt ......w :
~. O",ftiutiOlll U.lt : 6- I I I- I I I I
c. Sinal/P.O. &4l : PRO. I. ~U"BtR
d. Cill' GRAM I. TIT\,(
: ... e.:,.."tr :
(FroWf.
f. !trio : d. liP tad" "04..-0.1
k. eon,..t , """" (Noww C..-..Io..1
:! '" '......,..-.~III No.) :
a 7. TITLE AND DtSCRll""TlON OF APPLICANrl PROJllCT S. TYPE Of ...,.,.LlOAN'1/RtC'P1ENT
~ J-S\ah ~,""..I'tY Ac1IOA ~
8-1"'''''1''- ..' .- Hir".' tovulfon;1 ~tH"tiOf'l
.. C-Subs\lt. J- ".dull htb4
~ Danna 11.-0I... (.!I,..rfflf):
~nll'
t-Clty .
~ 1- ko",,' Dlrvtd
~r::ol ...",... '''It,,. 0
! D lrict S."" .ppor'.~cc
... TYPt QT M-&ISTANCE
.......,1' Ci.....l 0-......"......
~ B-&..DCI"~ .,....c. ,.....0,,,.., ~"(,.. G"'~ [[]
g t-4.:.... ,...,.,-ioLc L.ct.....'Y'(.)
10. AREA OF ~.IecT IMPACT (No_... 0{ etH.a.t. ............. 11. ESTlM"'''M~ 11.. TYPE OF APPUCATION
S &o&.M. .....) BER 01'" ONS ~- C-A..,ido,," [.......,........UOft
lir1!.NU1TING a...A."......1 D--CoIl&iIl~tlN 1.',- 0
. &....I.rr _PJ""'Glpt"""l4.h
13. P~EO 'UNOINlO 1-'. CONGRtSSiONAl DISTRICTS 00": 15. TYPE OF CHANG( (T..,. JI. ... JJ..)
II ~ pltOlm .a.-l"c,.,.... Dottl" ~lhet (S"u,jfvl:
l. rm(R"'l .00 l. AI' PUDAHT I--Oea...... 0..111"
~nICA~r I C-Illc,..... Ou",11'tM
b. .09 O~IC"''''. O.,.Uoa
I a. PROJ ECT ST "'RT In. m<lJ ECT [-c.~".lio.
.. STArt ,00
1M Tt 1_. -.....lA .... OURATlON ."....... _"pro. ITIJ
d. lOCAL .00 19 M ...nu "...;ow !. tift' ( I J
l.orHH .00 ]I... tsn_n:o DAT( TO 7_ ........u. d.Gv 1'. EXISTli"Kl rEOt......L IDENTIFICATION NUMBER
.00 I BE SUB-MITTEO TO
I. TOTJJ. I FEOER}.L AGENCY ~ 19 .
20.. FEDERAL AGENCY TO RECEIVE REQUE.ST (N_. au... "_:'/1' --'oj T 21. IIEMARKS AOOED
n '1'.. No
o
zz.
~
5_ THE
APPLICANT
~ CERTWIES
E : THAT ~
11
~
~
..
..
10 1. the !ita{ .,( ""., knowlitd,. lAd .......,.
d.h i.. Lhi. ,........"Hulio.n/.HHuU.... .t,
W"1.I' ,". CD"..t, )h. OOCM,,"",' hu b.M
.utor. .uthoriud by ~. ..,.....".i"r boOr ..,
t1't. IC"Olic.ut ...4 tit. .ooliu... .ilt .......,..
"""ttl '1\. .".~ ....,..ww It t.H ........
.n.. .. 'O~.d.
t. N ...~ br OMI eilall" ......,. ~ft 100001uhf'oa ...., ......In-<. p"'n.I...t le i...
Inct..,., 0.......". .. .PCtI1lOIi." .t..rl"'........ .Ad .If ,-,00"'-. .,.. .R.acJl.c:;
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CZI
Cll
o
o
o
o
o
%3. I I. TYPtO I\AloIt MO TIn.!
CERTIFYING,
REPRE.
SENTATlVE
)04.. AClf.NCY ~E
k. IIDKAT\JRt
L DATE
)'_.
....,.tA
.s.. .
19
26. ORGANIZATlONoA.L UNiT
I 17. AOMINIST~TIV[ O"ICt
1%5.. APPLICA. :r__ -- .s.~
TION
, RECEIVED 19
2L 'EOERAL APPLICATION
10ENTIFICATlON
!
~
~
~
I
j
31. ACTION T^,'tN
Jz..
~UNO~
r~ _"" ....
I 100. 'EDEML OF."'NT
IOEMTlflCA TlON
I ).4. )'_. ...........
rr ARTtMG
OA TE 19
36-
[NOINe
OA TE 19
37. REMARKS AOOEO
.s..
29. ACORES'
o
o
o l.
I; AWAAOEO
1l0000MD POt!
,u,c EII01.IUI'T
I. r! DElW..
I. Al'P"lIr..vtr
c. n"'T(
.00 33.
IV
.00 . -
.00
.00
.00
ACTION DATE ~
19
I. I/EJ1CTEO
CONT,o,(;T FOIl ...oo.TtC>>4AL '"'()tI~A.
t.ON (x..... ~ .....~ _.._....)
r...
"'~ .....
~
C
::
t. lO(IA~
o c. OE/"~RREil
o I. l'r1TliOMl'I'1l
I ::OtRAL AGE"":V
.0.-95 ACTION
I. O~"
I. lOT AI. S .00
I,. ." a_i"c .....,. .me",. ..., ~........b. ...t..d ~.. d..,i"rhou.. ...... .,..
.iOIl.c. If .....er ...~.. ,. .... ..... ,.......... << ,.." 1. OWS Q~.... ~.
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o Y.I
~. rtDERAl. ACtHCY ....." Of1'ICIAI.
Ihoo",. ......4 a...w~ tIloO.)
No
I
. I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:17
SEC110tl IV-REMARKS (Plecuo .re/er.n<< tlw pnrlxr it..:m "..m.bff Irom S...:t.:o-n.. I,ll o-r III, il C1P1'/i.c.a.b~)
.. ,
.,i/lND^Frl ~OR~~ 424 PAGE 2 (1C-7!:\
I
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:18
GENERAL IrlSTRUCTIONS
This is a multi. purpose standard form. First, it will be used by applicants as a required facesheet for pre.
applications and applications submitted in accordance with Federal Management Circular 74-7. Second, it will
be used by Federal agencies to report to Clearinghouses on major actions taken on applications reviewed by
clearinghouses in accordance with OMS Circular A-95. Third, it will be used by Federal agencies to notify
States of grants-in.aid awarded in accordance with Treasury Circular 1082. Fourth, it may be used, on an
optional basis, as a notification of intent from applicants to clearinghouses, as an early initial notice that Federal
assistance is to be applied for (clearinghouse procedures will govern).
^ppUCJ\rrr PROCEDt;rlE5 FOR SECTION
Applicant will complete all items in Section I. If an item is not applicable, write "NA-. If ..oditional space is needed, in~rt
Iln astarisk ...... and use the nlfTlarXs section on the back of tha fonn. M explanation fol~ IOf 0lJCh itcm:
'tam
1.
2a.
2b.
3a.
Mer1\. approprlote bolt. Pre.app!lc:atiQn and appllca.
tion guidance is in FMC 74-7 Ilnd Fedensl agency
p~nsm instrudiom. Notlf\oltion of intent FClJid.
ance is in Circular A-'35 procedures from clear-
inghouse. Applicant will not use "Rcport of FedClnlI
Action" bolt.
3b.
4b-4h.
Applicant's own control numb<<, If desired.
Dote SectIon I Is p~p1lnod.
Numb<< aSCllgncd by State dearinShou:se. or If dele-
gated by Stllte. by Ilreawidc clcaringhou$e. ~I ~
quests to Fe<lenll agencies must cootDin this identi.
fier if the pl"Ognlm is CQYered by Cin:ular A-I!15 Ilnd
rC<luired by applicable St2te/areawide Clearing-
house procedur=. If in doubt, consult your dear.
inghous.e.
Dele Ilpplicant notlOed of clcorlnghoUM Id~fior.
Leglll name of appllC%nt/redplent, name of primary
organiZZltionll1 unit .,tlich will undcrtlSlul tha assist.
ance activity. comp:=ta address of Ilppliall1t.. and
name and tclephone number of penson who can ~
vide further infonnzrtion about this I'tlquest.
Employer identlOcatlon number of applicant as as-
signed by Intcmal Rcvonue Serv\ce.
Use Cat:lllog of Fedensl Domestic l\ssistzlOCII num.
ber assigned to prognsmunder which aS3istance is
requested. If more than one progl"llm (c.g., )oint-
funding) write "multiple" and eJCplain in ",marla.'
If unknown. cite Public Lzsw or U.S. Cod1:.
Prognsm title from Fe<lClnlI Cctak>g. Abbnrvi8te If
n e<:essary.
Brief title and Ilppropri8te descrlJ7tion of project.
For notlfic.ction of intent, continue in remllrXs sec.
tion if necesS4ry to convey proper description.
M~1y s.elf-elCplanatory. "City" includes town, town-
ship or othcr municiplllity.
Check the type(s) of Ilssimnce requestcd. The
definitions ot the tenns are:
A. B./Jsic Grunt. M original request for Fcdcnll
funds. This would not include any contribution
provided under a supplemenbll grant.
B. Supplemenbll Gnlnt. ^ request to inc~se a
basic gnsnt in certain cases where the eligible
applicant cannot supply the required matching
share of the basic Fe<l el"ll I pro:lram (c.g., grants
aW/l~ed by the Applllachian R~ional Commis-
sion to provide the applicant a matching share).
C. Loan. Self eJCplanlltory.
5.
68.
6b.
7.
a.
9.
Item
10.
11.
12.
O. 'nsunsoce. Setf explanatory.
E. Oth CI'. Explain on n:m:a rXs pIl ge.
(;oyemmental' unit whera .ignil'1cant Ilnd mcaning.
f\J1 impact could be observed. Li~ only largest unit
or units affected, such ItS Sbrte. county. or city. If
antire unit a1tcctcd. list it nrther than ~bunlts.
Estimated numbef' at persons directly benefiting
from pro;ect.
Use appropriate code krttDr. Definitions are:
A. Ncrw. A submittal tor the finst time tor e ncrw
pro;ect.
13.
B. Renewal. M extens>on for an addltlonal f\Jndlngl
budget period for a project having no pro;ected
completion date. but for ...nlch Fedcnsl support
must be nIOewed each year.
C. Revision. ^ modification to p~ neture or
scopoe ...nidi may result in f\Jnding change (in.
crease or dec~ase).
O. Continulftion. M ClXtension tor Iln additional
f\Jndina/budevt period for II pro;.ect the agcncy
initially agreed to f\Jnd fOf a definite number of
r-rs.
E. Augm<<rtatlon. ^. ~uirement for Ildditionlll
f\Jnds tor a prefect previously aWll~cd funds in
the seme f\Jnding/bud~ period. Pro;.ect na.ture
Ilnd scope unchanged.
Nnount requeste<l or to be contributed during ,the
first funding/budget period by each tontribu':llr.
Value of in-kind contributions will be Included. If
the ection b a change in dollar amount 01 an eJCist.
ing grant (a revision or augmentzrtion). indicate
only the amount of the change. For decreases en.
close the amount in parentheses. If both basic end
$Uppiem'enbll amoUnts lire included. b~kout in
remarla. For multiple proenlm funding. use totals
and show program breukouts in rema~. Item defi.
nitions: 13a. amount requested;from Federal Gov.
emment; 13b. amount applicant Mil contribute;
13c, amount from State, if applicant is not a Stllte;
13d, amount from local gO'llemment. if applicant is
not II local g~mment; 13e, amount from any other
sources, explain in ~marXs.
SeIt eXplanatory.
The district(s) whera most of act\Jal worl\ will be
accomplished. If clty.wide or StZlte.-wide. covering
sevensl districts, write ..city-Mde" or ..State.wide."
Compl-ete only for revisions ("rtem 12c). or augmen.
brtionS (item 12e).
14a.
14b.
15.
STN'lONtD FORM 424 PAGE 3 (1(}-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 beE'in (usually
auo<:iale<l with estimated date of availability of
funding).
Estimated number of months to complete project
after Federal funds are available.
Estimated date preapploC"..Iltion/appllcation will be
submitted to Federal agency If this project requires
clcllrinllhou"" rerview. If review not required, this
date would usually be ~me u date in ttem 2b.
Item
19.
Existing Fedenll IdentifiC..lltlon number If this Is not
a new request 'and d.r&ctly relates to a previous
Federal action. Otherwise write "NA".
20.
IndiC6te Federel agancy to which thIS request is
addressed. Street address not required, but do use
ZIP.
21.
Check appropriate IYlx as to whether Section IV of
form contains rem.n<s and/or additional remarks
are attached.
APPLlCAtn PROCEDUI1ES FOR SECTION II
Ust cleDrinllhous~ to which submitted and show
In appropriate bloclu tha st..etus of their responses.
For more then three clearinghouses, continue In
remllrks section. All written comments lubmltted
by or through clearinghoUS4a must be atulched.
NlIme and title of authorized rep~nt..etive of leglll
applicant.
Applicants will alwa~ complete Items 23a, 23b, and 23c. If clearinghouse review Is required, Item Z2b must be fully com.
ple1.ed.An explonation follows for Bach item:
'him
23b.
Self explanlltory.
23c.
Self Dxplanatory.
Item
Z2b.
23.a.
Nola:
Applicant completes only Sections 1 lInd II. SoctIon
III is completed by Federlll asencies.
FEDERAL AGENCY PROCEDURES FOR SECTION III
ttcm
24.
E.xocutive del)o'rtment or Independent lIgency hllving
progrllm administrll.tion responlOlbility.
Self 6Xplanetory.
Primary or;;anizatlonlll unit ~low del)o'rtment level
hllving direct program manllgement re5ponslbillty.
entice directly monitoring the program.
Uu to Identify non.aWllrd action5 where Federal
granl identifier in item 30 15 not Ilpplicable or will
not SUmC1l.
Complc'te add~ of administering office shown in
tram 26.
Use to identify awan:l action5 where different from
Fcderel appliclltion identifier In item 28.
Self explanatory. Use remarks section to amplify
where lIppropriate.
Amount to be contributed durlns the first fundingi
budgc't period by each contributor. Value of in. kind
contributions will be included. If the action is a
change in dollar amount of an e"isting grant (a revi-
sion or augmentation), indicate only the amoont of
change. For decreasc5, encl05e the amount in pa-
rentheses. If both basic and supplemental amount5
are included. breakC'ut in ramarks. For multip"= pro.
gram funding, use toab and show program brellk.
outs in remarks. Item definitions: 32a, amoont
awarded by Federal Government; 32b, amoont ap.
plicant will contribute: 32c. amount from State, if
applicant is not a State: 32d, amount from local
government if applicant is not a local sovernment;
32e. amount from any othei' :;ourcll$. cxpt3inin
remarks.
Ollte dctlon WIlS taken on this request.
Dote lunds will become aV1lileble.
If applicant-supplied information in Sections I and II needs no updating or adjustment to fit the finlll Federlll action, the
Fedenll agency will complete Soction III only. An explanation. for oach Itom follows:
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
Item
35.
Name and telephone no. of agency pe~n who can
provide more information regardins thi:. ass.istllnco.
Dato atter which funds will no longer be llV1lilable.
Check approprillte bolt as to wh~her Section IV of
form contains Federal remllrlu and/or attachment
of additional remarks.
For use with A-95 action notices only. Name and
telephone of person who can assure that appropri-
ate A-95 action has been taken--If same as person
shown in Item 35, write ""me". If not applicable,
write "NA".
36.
37.
38.
Federal Agency Procedures-special considerations
A. Treasury Circul.r 1082 compliance. F&4enll agency will
assure proper comple1.ion of Sections I and III. If Sectioil I
is ~ing completed by Foderal agency, all applicable items
must be filled in. Addresses of Stata Information Recep-
tion A€encie5 (SCIRA's) are provided by Tre.:lSury OllPllrt.
ment to each agency. This 10rm replaces SF 240, which
will no longer be us.ed.
S. OMS Circular A-95 compliance. Foderlll agency will as.
sure proper completion of Section5 I. II. and III. This form
is required for notifyIng all reviewing clearinehouses of
major actions on all programs reviewed under A-95.
Addresses of State and arellwide clearinghou5es art pro.
vided by OMB to each agency. Substantive differences
between applicant'5 re<:lllest and/or c1earinghou5e recQ<T'l'
mendation5. and the prOJect as f.nally awan:led will be
explained in A-95 notifications to cl'l:lnnghouses.
C. Special note. In mort, but not all S;otes, the A-95 State
clearinghouse and 1M (TC 1oe:' SCIRA are the same
office. In such cases. the A-95 "wMd notice to the State
clearinghouse will fulfill the TC 1082 aWlln:l notice reo
Quirement to the State SCIRA. Duplicate notification
should be avoided.
STANDARD ronI.'. 424 PAGE to (10-75)
I
Office of Management and Budget Circular A-110 (7/30/76)
. ATTACHMENT N.--CIRClTLAR No. A-IIO
f'ROrCRT'\" MANAGEMENT STANOARUS
1. ThIS n~tachmen~ prescribrs unlform
sta.ndl\rd.s go,'erlllng maIH\seme:H 01 prop-
en)" furnished b)" ~ho Fede.ral Go\'ernrnell~ or
whose C06~ "'AS eh"'ged t..o a. proJe<:t sup-
por\.Cd by a Feder..1 gra..l\~ or o~her..!!reemen~,
Feder..1 sponsoring agencIes shnll require re-
elplenL~ t..o observe ~hese s~a.ndards under
cr"n~s I\nd o~her ..!:teemellt.s alld shall not
Impose addlUonl\1 requlremen~s ullless spe-
clllc"Ul' required by Feder..1 l..w. The reclpl-
en~ m"l' use It.s OWIl proper~y ml\lll>!;ement
s~I>ndl\rds I\nd procedures provided I~ observes
the prO\'lslOlls 01 ~hls n.ttachmen~. This I\~-
~I\chmel\t nlso I\pplles t..o subreclplent.s I\S
referred ~o In parl\grnph 5 01 ~he bo.slc cir-
cular.
2. The followln!; deOnltlolls nppl)" for ~be
purpose of this n~~nchmen~:
.., /leal propcrly.---.li.C1\1 propert)" melUlS
l..nd, Including In.nd Improvemenl.6, sLruc-
tures Ilnd ..ppur\.ClllUlces thereto, but ex-
cludIng movable machinery nnd equipment.
b. Personal property.-Persoolll proper~y
or any kind except real propen)". It mill' be
tanglble-hl\vlng ph)"slcal exIStence. or lotan-
glble-ha.vlng no physlca.l exIstence, such I\S
pa~ent.s, InventIons and cOPl'rlght.s.
c. Noncxpcndablc pcrson41 propcrty.-Noo-
expendl\ble persooal proper~y means tangible
persona.l proper~l' hM'lng a uselul life or
more than. one yea.r and an acqulsltloo cost
of &300 or more per unit exempt th..t reclp-
leot.s subject to Cost Accounting Standards
Board regulations ml\Y use the CASB stand-
e.rd of r..')oo per unit ..nd useful We of two
)'ears. A reCIpient mal" use It.s own dellnltlon
or nanexpend..ble person..1 property provldc<l
that tbe de!l.rlltlon would at Jea.st Include all
ta.nglble personal propert)' as defined nbove.
d. E.:pcnd4blc personal property.-Expend-
able personat property reters t..o ..II tangible
personal propen)" other th..n non expendable
propert)",
e. Exccss propcrty.-Excess property means
propert)" under the control or a.D)" Federo.l
'4;eney that, &oS determlDed by the hea..d
thereof. IS no longer requlrc<l for It.s needs
or the dlscha.q;e of Its responslbllltles.
r. A.cquisitioTL cost 01 purcha.scd nonc.z-
pcn<iablc perSO"TIaJ propcrty.-Acqulsltloo cost
or ao Item of purchued nonc~pendable per-
son..1 propcrtl' means the nct Inl/olce uDlt
prIce of the propert)' IncludlDg ~he cost of
modificatIons. o.ttl\ehment.s, accessories or
a.uxUI"r)' "PPlU"o.tus ne<:essar)' t..o m..ke' the
prope~t)' usa~l" lor th" purpose lor "..hlch It
was o.equlr"d. Othe~ ehl\r~es such I\S the cost
or Insta.llatlon, trl\nspor~atlon. t..xes. duty
or prot.cctlve In-tr..nslt Insurance, shall be
Included.or excluded rrom the unit acquIsi-
tion cost In 1lccorda.nce with the re<:lpleot's
regular a.ceountlng practices.
g, Exempt propcrty.-Exempt property
means tAnglblo personal propert)' acquired In
whole or In 'put with F'ed e TIll runds. o.nd
tlUe to which l~ ,'ested In the recipient with-
out lurther obll!;o.tlon to the Fe<ler..l Govcrn-
ment exeept as provided In subpar..graph 6a
belo"'. Such uncondl~lonal vestln!: 0: title
wUl be p\lrsu..nt ~o an)' F'ederul leSlsln.~lon
thl\t pro\'ldes ~he Federl\\ sponsorln'; "genC)'
Vo.1th n::Iequnte authorlt)'.
3. Rcal properly.-Each Federlll spor-sorlng
asene)' shl\ll pre.<crlbe requlrement.s lor re-
clplen~s conCernIng ~he use nnd disposItIon
of real propert)' acqulretl par~l)' or wholly
unde~ j;'rants or other a!;reernents. Unles..~
othe~wL'e pro\'lded b~' stntu\.C. SUCh re:Julre-
:11('nt5. U Il n'JlninllJln. shllll C"'O:1t.n1:':. the
:"llo"'II1~:
... TILle to real propert)' shl\l1 vest In the
reelplenL subject ~o th" condl~lon thnt ~he
recipient shl\ll use ~he renl proper~)' 10~ ~he
l\uthorlZec purpose 0: ~he proJect.'as lun!; liS
It 15 needed.
b. The recipient sho.lI obt..lo 8pprov..1 by
the }'ederaJ "pon!<Orll1!:o 8.l:ency lor ~he u'"" or
real proper~y In oLher proJeet.s when ~he re-
cipient det.crmlncs ~hl\~ ~ue proper~y Is no
lonr,erneeded lor ~he purpose 01 the orl!:lnl\l
proJec~. Use In o~her proJeet.s Sh..1I ue I1mll.c<l
~o ~h("'e under other le<leroJly sponsored proJ-
ects (I.e.. gro.nL~ or other A.{:reement.s) or pro-
!:rnms th8~ ho.ve purposes eonsls\.Cn~ wl~h
Lhos.c nu thorl7.c:d lor s\lppor~ by ~he I"ederl\I
sponsorIng "f'ency.
e. When the real property Is no lon,:er
needed as provided In 1\ l\nd b I\bove, the
reclplen~ shnll requc.~t dl"po"llIon Ins~ruc-
tion.~ Irom ~he I"cder..1 sponsorlnc nr:enc)' or
I~s succes!'Or F'edernl sponsorlnr. "I:enc)'. The
leederl\l spon'iOrlnc acency sh..1I observe the
lollowlnc rulcs In the dlsposlllOD In.~~r\lc-
lions:
(I) The re<:lplent may be permltt.<.'d t..o re-
L..ln tl tIc a.tt.c:r I~ compensl\LcS the f'ederl\l
Governmen~ In I\n ..mount comput.cd by ..p-
plying ~be Federl\l perceDtar.e of pl\l'tlclpo.-
tlon In the cost 01 ~he Orl!;ln..1 project t..o the
Il\lr ml\rket vo.lue of the property.
(2) The recipient m..y be dlre<:ted t..o lIell
the property under guIdelines pro\'ldc<l by
the Federal sponsoring l\cency and. pay tbe
Fe~er...1 Government an amount computed
by o.pplYlng the FederiU percenl.l\ge or par-
tlclpatlon In the cost or the orll:1Dal proJe<:t
t..o tbe proecc<ls Irom SAle (nCt.c:r dcduC~lng
actual and rea.sono.blc selling aDd ftx-up ex-
penses. IT o.ny. Irom tbe wes proc=).
When the recIpient Is authorl7.ed or rcqulrc<l
t..o sell the property. proper M..Ies procedures
sball be establlshc<l that provide for compeL!-
LIon t..o the ext.c:nt pro.etlcable o.Dd result lD
Lhe hIghest possIble returD.
(3) The recipient may be dlre<:ted t..o trans-
fer tl tIe t..o the property t..o tbe Fedcral Gov.
crnmcDt pro"lded Lho.t 10 sucb cases ~he
recipIent sho.ll be entltlc<l t..o compecsn.tlon
e:lmput.c:d by appl)'lng the recipient's per-
centage ot pllrtlclpatloo ID tbe cost or the
progro.m or project to the curreDt to.lr market
...alue ot the propert)".
4. Fcd.crcly-ow~ n.on.c%pcndabu: person4l
propcrty.-T1tle to federally-owoc<l property
remains vested In the Fe:!er..1 Government.
ReclpleDts shall submlL o.nnua.lly o.D IDveD-
tory Ilstlng or federally-<>Wtled property 1n
theIr custody t..o the F'ederal aporulOrlns
o.seney. Upon completion or the ~cement
or whcn the property Is DO longer ne-edc<l,
the reCipient sho.lI report tbe property t..o
the Federn.I' sponsoring agency for furtber
agene)" uL!1I7.4t1on.
II the Federl\1 sponsorlns &geDey has no
further need lor the property. It sh..1I be
declare:! excess ..nd reported t..o the Genero.l
SerVIces ^dmlnlstrtlon. ^pproprlate dispoSI-
tIon Instructions \11111 be Issued t..o the re-
cipient art.c:r completion of the Federa.J
..genc)" review.
5. Ezcmpl property.-When statutory o.u-
thorlty eXists. (e.g.. P.L. 85-934. 42 U .s.C.
1892) title ~o nonexpenda.ble person"l prop-
crt)" acquire:! WIth project funds. shall be
...estc:! In the recipient upoo a.cqulsltlon un-
less It Is det.crmlned tha~ to do so IS no~ In
lur~herance of the objectives of the Federal
spons.orlnl: "cency. Wben tl tic Is ...est.c:! In
~he reCipient. the recipient sh,,1I h..ve no
other obll!:atlon or I\ccountablllty t..o the
FedcrAI Go..ernment lor It.s use or dl"posl-
tlon except n.~ provided In a" below.
G. Other nonezpcn<icblc propcrly.-When
oLher nonexpendllble tanr,lble personal pro'p-
erty Is I\cquire<l b)' a recipient wltb project
lunds. title shl\ll not bc LAken by the Fe:!-
"r:\1 Go<'rrn",,,n; bllt sh..1I <,"s~ In ~hr rt"-
elplent subject \.0 tht' lollo"'lnl: conditions:
a. Riphl 10 Iran,'lcr litle.-For lLems 01
nonexpendl\ble per!onl\l proper~y h"vln!: ..
unit I\cquisltlon cus~ of :<1.000 or more. the
Federl\l sponsorlns I\!;encl' m..)" reserve the
rlgh~ t..o trl\nsler ~he t1~le to ~he FederoJ
- I
A-110:20
Government ur t..o a third p..rty named by
lhe ""cdcrR.l Government. when ,;uch t.hlrd
JUl.rly ts ot.hCr'4'L."H: clil:lblt under ex l.s t.1 llb
sI.H.L\I\.CS. Such reservation shnll be subJecL LO
~he lollowlnr. stAndardS:
(I) The prnpcrt)' shllll be ..pproprlatcly
Iden~lne:! In ~he cr..nt or other I\!:reenlent
or o~herwlse m..de known to the recipient
I" wrltln!:,
(2) The PcderoJ 5pon.<oorlng I\!:enc)' shl\ll
1s..~lle dlsposlLlon .In.~~ructlons wi thin 120 cl\l-
eudlU" dl\Ys al\.er the end 01 ~he Fcder..1 S\lp-
flOr~ 01 ~he project lor ...'hleh I~ Wl\S I\cqulred.
II ~he Federnl "pon!<Orln!; "!;ellcy I..Us to I&.~ue
dtsp(mlLlOn lrua.T\lcLlon:'O wllhln Lhc J20 cnl-
r.ndar d..y period, ~he reclplen t shl\ll I\ppl)'
~he sl.lLndILrds 01 lIubp"rllgTl\pllS Gb ,,,'d ac
1..5 "pproprlllt..c.
IJ) When ~he Feder..1 spons.orlnc I\!;ency
exercises It.s rl!:ht t..o take title, the personl\l
pruperty shAll be subJec~ to ~he provisions
lor lc<lera.Jly-owned nonexpendable propcr~l'
dl><\I..""d In pl\r"l;Tl\ph 4, ..bo..e.
(4) WheD tl~le Is ~ro.n"lerred el~her t..o the
Peder,,1 Oovemment or t..o a ~hlrd p..rLy.the
[>rovl"I01\5 or liubp..rB.{;Tl\pb Gc (2) (b) should
I>e loll owed.
b. Use o{ olher tcnvible nonczpcn<iablc
properly {or which thc rccilJlcnt h.a.s tllle.
(I) The recIpient shall W\oC the propert)"
In the project or progTJUn for whlcb It WI\S
I\cqulrc<l l\S'IODg lIS ne-eded, whether or not
~hc proJe<:t or pro~r..m continue; t..o be sup-
ported by Feder..l lunds. \Vben no longer
necdc<l lor the orlglnal proJect or prosrnm,
~he rcclpleDt &h..1I use the property In eon-
necUon with It.s other ledcrl\lIy liponsored
n.c:~lvl~lcs, In the followIng order of prlorl~l':
(..) ^eU..ltlcs, In the following order of
priori t y :
(b) ActivIties sponsored by other Federa.l
D.(lenclc:s.
(2) Sh.are4 ""e.-During tbe time thllt
nooexempt nonexpendl\ble perllOnal proper-
ty 15 held for use on the project or progT"m
lor whlcb It wa.s acqulred. the reclpleDt
sbnll make It a....Uable for use on other proJ-
eet.s or prol;Tl\ms If sucb other use will not
In\.erlen: with the work on the project or
progTatn lor Vo'hleh the property W'8.S orIgi-
nally acquired. First preference lor sucb
other use shall be gl..en t..o other prOJe<:t.s or
pro!r"'ma lIr>Onsored hy .the F'ed er..1 agenc)"
tho.t nnancc<l tbe property: seeoDd prefer-
eDce sha!1 be given t..o proJeet.s or progra.ms
,;ponsorc<l by other Federal ..cencles, Hthe
propeny Is ownc<l by the f'ederal Govern-
ment. use on oLher "cI.IVIUCS DOt sponsored
by the Pede",,1 Oo"ernment 5h..1I be per-
mlllSlble If authorlz.cd by the FederAl n.gene)'.
User ehe.rgc:s should be conc;lderc<l I) ..ppro-
prla Le.
c. Dispo.rition 01 other n.one%pcn<i!,ble
properly.-Wben the re<:lplent no longer
noeds tbe property a.s provided In 6b "bove,
~he property ma.y be used lor other ll.ctl',I-
ties In accordance with tbe loll owing stand-
nrds:
(I) Non<:rpcnd4bLe property wilh. a unit
ar.qui.rilion cost o{ U:33 Ih.an Sl,OOO.-TIle re-
cipient may use the property for other activi-
ties without relmburllement t..o the Pc<lernl
Government or sell the property and re.
taln the proceecls.
(2) NonerpcndcblC personal propcrty with
o unil ccquisil10n eosl o{ 11,000 or more.-
"nle re<:lplent may re~l\ln the property lor
other uses provided th"t compensl\tlOn l~
m"de t..o tbe orlCln..1 Fedeml sponsorlns
D.{;ency or It.s "uccessor. The amoun~ 01 com-
"en""tlon "hAil be cc>mput.cd b~' nl'plyln(:
tht' percen:Age 01 f'<'dernl p-.rtl"lr,,:lon In
~he co..~~ 01 ~he orl!:ln..1 project or progr"lI1 to
lhe current lair mArlle~ vl\lue or the proper~)'.
I r ~he reClplen~ hl\S no nced lor ~he property
I\nd Lhe property hn.s lurther use ,'aluc. the
recipient sh"JI r.,.q\lcst dIspOSitiOn InSLruc-
~Inns Irom tbe orll:1nnl sponsoring al;enc)".
I
Office of Management and Budget Circular A-110 (7/30/76)
The l"ederl\l .pon.orln!; ~~'''C;' shl\lI d.lor-
mIne whClt'er th. propcrt~. can be u,ed to
meet the ,,~ency's requlrtmenu. I! nO re-
qulrem.nt exIst..' ",'Ithln lh"l ~~.ncy, the
a v~lIabllltY 01 the properl)' shall be report-
ed to the Gener~l ServIces ^dmlnUlr"tlon
by the Feder"l agen"y 10 det.crml"e ,,'hether ..
requIrement lor the property exlst.s In other
Feder~l "~encles, TIle Federal sJlonsorlnJ:
agency ohnll losue In.,tructlons to the recIpi-
ent no lllter than 1:20 dnvs aCler the recIpi-
ent's requesl and the 10'lIowln!; procedures
shall govern:
(a) II so Instrucled Or If dl.\po.ltlon In-
structions are nol I""lled ",'Ithl" 1:20 c"len-
dnr dllY' lI(ter the reclplenl" request. the
recIpient shl\lI .ell the prop.rty I\nd rolm-
burs. the Feder~l IIpon~orlng "gency nn
nmounl comput.cd b)' "pplylnl; to the o"l.s
proc..ds lhe percentl\ge oC !"ederal pMtlcl-
pallon .In lh. eo.t oC the orIgInal proj.ct or
prob'rnm, Howev.r, lhe reclplenl shall be
p.rmllled to deduClllnd relllln Crom th. !"ed-
ernl sh..r. 1100 or t.n p.rcent oC th. pro-
ceeds. whlchev.r 10 grenter. lor th. r.clplent's
selling and he.ndllng expenses.
(b) 11 the recIpient l~ In~tructed to shIp
the property elsewhere, the r.clplenl shall
b. reImbursed b)' th. ben.nting Federal
ng.nC)' with an "mount which IS computed
by applying th. perc.ntage or the reCIpIent's
partlClpl\tion Ie the cost oC the orll;lnl\l grnnt
proJ.ct or program to the current Inlr mark.t
ve.lue 01 the prop.rt)., plus Ilny r.asoeable
shippIng or lntenm storng. cost.s Incur.d.
(c) If the recipient Is Instructed to other-
wiS' dlspos. 01 th. property, the recIpIent
shall be reimbursed by the Feder..1 sponsor-
Ing agency lor luch cost.s Incurred In Its
dl.'posltlon.
d. Property monop.menl slondort13 lor
none:pendoDle prop~rly.-Th' recIpient's
prop.rty managem.nt standards lor non.x-
p.ndabl. personal property shall Include the
101l0wln!; procedural requlrem.nts:
(1) Property records shall be maintaIned
accurately and shalllnclud.:
(a) A descriptIon oC th. property.
(b) Manulactur.r'. serial numb.r, model
number, Federal stock numb.r, natlonal
alock number, or oth.r Identlncatlon num-
ber.
(c) Source 01 the prop.rty, IncludIng
gr..nt or oth.r "!:Te.ment nUmber.
(d) \Vheth.r title v.sts In the recIpIent or
the Fed.ra.1 Govl:TT\m.n t,
'(e) AcquisitIon date (or d"te r.celved. II
th. prop.r;)' was lurnlshed by the Federal
Gov.rnre.nt) and cost.
(T) Perc.etage (..t the .nd 01 th. bud~et
y.o.r) 01 F.deral p..rtlclpatlon In the cost 01
the project or progr"m COr which the prop-
eny ...'... acqulr.d. (Not applle..ble to prop.
eny lurnlshed by the redor..1 Gov.rnm.nt.)
(gl LOCAtion, u"e and condition 01 the
p<"opertr ..nd the d.. \e the InlormAllon WOos
reportod.
(h) Unltacqul.ottlon co.t.
(I) Ultlmat. dlspo.ltlon data. Including
d.. t.c 01 dlspO...1 and SAI.s price or the m.thod
used to determln. current lair markel v..lue
where a. reCip'~n1. compen~A.'Le.s the Teder..l
IopOnlOrlns ..gcncy lor Its .,h..rc
(:2) Prop.rty owned b~' the l'eder..1 Gov-
ernm.nt must be mo.rked to Indicate l'.d-
er..1 ownership.
(3) A physIcal Inventor)' 01 property shall
be t..ken and the Te"ul13 reconell.d "'lth the
prop.n~' records at I<L,t once ev.ry two
y...rs. Any dln.renclI b.t......n qu..nlltles d.-
t.rmln.d by the physlc..1 Inspecllon :!.nd
!.hose .hown In the accounllng r.cords shall
be In~estl!!l\ted to d.lermlne the c"uses 01
the dlncr.nc.. Th. r.clplenl shall. In conn.c-
lIon with the lnvenlory, verily the ,xlstence,
C"Urrent utll1:l.atlon. ..nd contInued ne.d lor
the prof'e rt)..
(4) A control .y'tem .h"ll be In e:Tect to
inaurf a.dequf\t.e .l\1.~';Jn:"d6 :..0 ?l"'e~tn~ l~.
da.magc. or theft 01 lhe propert~.. Any 10....
dl\mlll;" or thelt 01 nontxpendnbl. propHly
.hall be Inv..tlgnt.d and Cully docum.nted:
IT the property was o,.-ntd by lhe red.r..l
Governm.nt. the rer'pl.nt shl\lI promplly nO-
till' lhe Fed.r,,1 51','n.orlng ,,[:enc)'.
(~) ^dequl\tel)' ml\1 nl.nl\nce procedures
.hall b. Implement.d to k.ep the prop.rty
In good conditIon.
(6) Wh.r. the recipIent Is ILuthorl7.0d or
r.qulred to sell the prop.rty, prop.r "..I.s
proc.dure. shl\lI be .stl\bUshcd whIch would
provld. lor cornpetltlon to the extent prl\cll.
cable nnd result In the h'lghest pos.~lbl. re-
lurn.
7. Expcndable per.on,,' prOptrty.-Tllle 10
.xpendnble personal property shnll Tesl In
the recIpient upon ..cqul..ltlon. II there 'Is ..
resldul\l Inv.nlory 01 such property .xceedlng
~I.OOO In 10lnl nl;gr.gate 1"lr mnrk.t v"llle.
upon t.rmlnl\tlon or completion oC th. grant
or oLher IIgre.menl. ..nd lh. property Is nol
n.eded lor nn)' oth.r I.derally spon.orod
projecl or progr"m, the reclplenL shall rel..ln
lh. proport)' lor u... on nonCederally spon-
sored actlvltl.s. or sell It. hut must In .lltT.r
. case. comp.nsnte the F.d.ral Goverllln.nt
lor Its shar.. Th. amount 01 compensatIon
sh..lI b. eomput.d In the snm. manner IUi
noncxp.ndl\ble personal property.
a. Intanllll>le properly.
a. Invention. and palcnls.-It nny pro!;ram
produces patentabl. Items. pl\tent rlghL.,
proce""es. or Invention., In the course 01
worle sponsored by the Feder,,1 Gov.rnment.
.uch ract shall be promplly and Cully r.port-
ed to the Fed.ral sponsorIng IIgency. Unless
there Is a. prior "greem.nt bet,,'e.n th. r.-
clpl.nt and the Federal sponsorIng ag.ncy
on d!.spo.ltlon 01 such It.m.. the l"ed.r,,1
sponSOrIng agency shall deLermln. whelher
protection on the InventIon or d~covcry shl\l1
be llOught. The Federal spon.orlng ..gency
will also d.t.rmlne how the rights In the In-
vention or dlscov.ry-Includlng rl!;h1.8 under
any patent ~'lS"Ued ther.on_hllll be allocat.d
and a.dmlnlster.d In order to protect the pub-
llc Interest consistent wIth "Gov.rnm.nt
Patent 1'ollcy" (Presldeet's Memorandum
for Heads or Ex<cutlTe Departm.nts "nd
AgencIes, August :23, 1971. and st..t.m.nt or
Government paunt Policy as prlntet;! In 36
l".R.16889).
b. CoPyrillltl. .-Except 110I oth.rwlao pro-
"Ided In the t.rms 6nd conditions or tb.
agreement. the author or tho r,clpl.nt or@:lLn-
1""tlon Is Ir.e to copyrl~ht any books, pub-
lIc6tlon&, or oth.r cop~":"I~htabl. m"toorlaJs
d.veloped In the coune 01 or under a l"ed-
.ral ..gr..m.nt. but the l"ed.ral sponsorln!:
..g.ncy sh"lI re.erve a ro)'a.lty-Ir... nonex-
clusIve and lrUVocl\.ble rIght to r.produc..
publish. or otherwise us.. ..nd to authorl.e
others to u.., the work lor Governm.nt pur-
poses.
A,"ACHMJ:MT O.--Cnct11.A" 1'10. A-I10
,."ocu..Wlttf'T ITAKDAADS
t. Thl. r.ttachment provld... ItlLndards lor
us. by rec:pl.nts In establlshln. proc.dure.
lor the procur.ment 01 luppll.s. .qulpment.
construction ..nd other aervlce. with reder..l
lU/lds. Th... standard. .... lurnlshed to .n-
sure th.t &\.Ich matcria.ls and serylcr5 ..re ob.
t..lned In ..n etrectlve m"nner "nd In com-
pll"nce wIth the provisIons 01 appllc"ble red-
er,,1 la..' and executlv. ord.rs. No addltlon..1
procurom.nt st&ndards or requlrem~nu sh..lI
be Impoud br the roder..1 sponsoring 6@:en-
cl~s \Ipon reelpl.nt.s unles. speclr.clLll)' ro-
qulred by red.nl stl\tute or .xeeutlv. ord.n.
2. The standards conlalned In this "l....ch-
menl do not relieve the reclpl.nt 01 the con-
trlLctu..1 r.sponslbllltle. ..risIng under 11.&
contr..c.... Th. reCIpIent Is the rupon:o.lble "u-
t.horltr. wtthout recour~e to t.he rederal ,pnn-
sorl"!: ..gency re~/\Tdlng the selll.",ent ..nd
a"U':Jt.ct1on ot ,,11 eor.trA.ct.uf\l and "c1mlnu.-
I
A-110:21
1..IITe '''UM arising out 01 pTl'cur.menl.5
enltred Into, In .upport oC a .r.."t or olher
",;:rterntnt. Thl. Inch.d.. dl.putes. cl"lm.'.
prolt:~t.& or "..'nrd. ..o'\tTM tYl\luA\.lon Q'r othtr
mntten ot & eontractuftl nft.lure. M,R.ttt'nI con-
cernln!: vlolntlon oC Il\w "TO to be reCer.r.d to
s\leh locl\l, StBLe or rederal ..uthodty .... ml\)'
havo propH Jurl:odlc.\On. .
3. R.clpl~nt.s m..y u.e th.lr o""n procure-
ment pollclel I\nd proc.duro.. Tlo""ev.r. BIl ro-
clplent.s shall "dh... to .n. Iland/\Td. ..1
forth In parn!'r"ph. 3 "nd ~.
". Th. reelplenl oh..11 mnlntaln .. code or
stnndl\rl1.\ oC conducl th"t .hall !:oTCrn lhe
p.rCormnnce or 1\.0 omceTl. .mploy,""s or
"r.nts en."b.d In the "wl\rdlnl; Rlld ndmln-
l.trllllon.oC etlnlr~ct.s lIolng redernl Cund,.
No .mployee. ome.r ()(" agent oh,,1I pllrtlclpnLe
In th. .electHln. "w..rd 0<" IIdmlnlstr..llon or
a contr"ct In which r.derl\1 runC1s /\Te \I"ed,
",'htre. to hi. knowl.dge, he or his lmm.dll\t.
Cllmll)', par.n.n. or orl;"nlzRtlon In ,,'hlch h.
or his Immedlllte Cnmlly or pnrtn.r hI\.' s
nnllnCll\1 Inl....t or ....Ith whom h. I.. ne.o-
lll\llng or hru "nl' "rranl;emenl conc.rnln.
pro<pectlTt .mplo)'ment. The r.clplents' 01-
ncers, employ.es or lI.ent. sh,,11 nellh.r .olle-
It nor aoce",l @:rlltultl"', Cavors or "nythlng
01 monetary v"l"e Irom contrllctors or poten-
tl..l contrl\ctors. :'ouch .tlLndllrds shllll provldc
lo~ dl.clpUnllr)' actIons to b. "ppll.d lor vlo-
I..tlons oC such. stl\ndarc1s hr th. reCipients'
omc.rs. employees or ~en1.8.
b. All procuremenL \.rllnsncllons shllll b.
conducted In a mllnn.... \0 provld., to the
.ml\xlmum ext.nt practIcal. open e.nd Ir.e
comp.tltlon. Th. reclpl.nt should be alert
to orpnl"I\t1on,,1 c.oomCIs 01 Interest or non-
oomp.tl tiT' prl\CtlceS ..mon!; oon trn<:tons
thaI mAY restnGt <r. .Ilmln...t<: eo<Tlpe~lt.lon
or ottl~rW1.... re:str~ft trl\oCle. In order to en-
sure objeetlve contra.ctor perCorm..nce ..nd
ellmln..t<l unt/IJr cornp.tltlve a.dvll.nt.l\g., con-
trl\CDors thBt dev.lop or llrl\.!t spcclnC..tJo=,'
requJ~m.nt.s, .t4temenb8. or work, Invita-
tiOn<! lor bid. and/O'l' requ~ Cor pl"09OIS&la
sheuld be excluded trom =?Cll.n!; for !"ueh
procurem.nta. Awnro.. ..t.....u be ma.de to th.
bldd..T/oa.rO'l' whos. bld/orr... Is rosponalv,
to llOe '.ollclt&L~on &nd Ie rooet I>CIv...ntageous
to the recl~t. price ..nd oLhe~ lI,etoro con-
sidered.. Soollcll.&tlo'u ...'>all cl....rl)" ...t rort:b
..l! requJremcnts thnt ~. bldd.~ /otl'eror must
lu.l1lll In ord.... lor h14 o.d/oa.r to ~ 'T"8.lu-
..toed by ~he recipIent. Any ..nd e.ll bld3/orrer.
IN'T ~ re)so\cd when \I \& In tb. r..c:lp1ent's
In toor..t to 00 .0.
c. All reclpl..nta ..."all ...t<\b1l6h procure-
ment prOC'COurn t.b61 proTId, Cor. ..t a mln-
Imum. the followl"G proceduro..lTequlrem.enl.5.
(I) PJooposed proc~ent a.ctlon. .h..l!
Collow . pr~uro to .......urc !.he av~d"nco
01 purc."""lng unn.,........,.y or lhlpllcatlvo
l\.onu. ....'ber. appropne....., ..n "nalY"'''' shall
b. rnAOc 01 I...... ..nd purchL...... ,,11oeTn8.tlve.s
Do d.,loormlnl which ..."Owd b. the most
oconomlcal. pt"..c \ \oa.l pr~ment.
(2) Sollclt&\loN lor !ooOe o.nd ""rvlc,s
.n..1I be bft.Ie<l upon .. clea.r ..nd ..ccur..t.e
d....r1ptlon or llhe ,eonft....l requlrom.ents
lcr \hI m,.\A\",..l. proch..: 1 or ~lG<: to be
procured. Such .. d......rl9l4On sho..11 nolo In
corn.pet...1tl"'C' J'r"Oaurem.nu. con\&In fe-e.t.urf"S
which u"d\lly r...tnct com.pel.ltlon. "Br..nd
na.me OC' eqUAl" ducrl9'IoJU melT ~ uud
J.l5 .. mel'n& to o.nne the perlorm..no~ 0:-
ot.her -.all.nl ,..qu.trClf"l"lcnta of a procuTem~nl.
..nd wh.n 00 \1-<1 the sp.elnC I."tures <:>: the
n..mo<! 'orand wlllch !'nust 'oe mel br bidders I
on.nrs sha.ll ~ c1.....,.ly >po<.lned.
(3) PO.I tl~e .nort.s :>h,,1I be nv.de by the
r.clplent., to ullllze sm"ll buslneM a"d mI-
norltv-owned buslneY lourc.s 01 supollel
..nd ~eTYI"", Such erIo..... should a.llow th.....
s.ourCII lhe m"xlmUJ1\ 1.......lbl. oppor-tunlty
\() co,"p.\.o tor contra... utlllr.ln, 1'od.re.l
fun(\<<.
(4) nll t:pe or f'W"'O'eurtn~ \rutrument.-.
u,t"<1. o~.. I\xed prlc. oonu.......u., 0001 rel.J1\-
I
Office of Management and Budget Circular A-110 (7/30/76)
bur,.".\)le oolltraet.s. purchl\.Se orders. Incen-
tll'. con trnct.<. sh,,1I b<' del,Crnu...."d by UlC
rt'Clplent but m\lst l>e n.pproprla.tc ror the
~l\rt.lo"'I!:\r procuroment. and for pr()rn{)tlIlf~
the best In\.oeroc.t of thc pro[!rn.m In,'olvN1.
The "cost-plu...-n-percell~abe-<>!-C06t" meUI-
od or contrll.Gtlng shnll 1l0t be used.
(5) COn trllGt.< shnl be mnde olll)' wi th re-
sponsible colltrf\.CtoTS who p<'~ the po-
tentlonllJ nblllt)' to perrorm succe.;.<;hll1)'
under the tern\..< "nd condltlollS or II pro-
posed procurement. Collsldern.tlon shnJI be
riven Lo such mAtt.err. a.s conl.rnCtor Int.egTlty,
rl'OOrd or p&.St perforlTllUlce, /lnllllclnJ IIl1d
technlonl rc..;ourccs or nc<:C'>.i1bllll)" Lo other
nccc:;sl\l'}' rCSO\1rr.cs.
(G) ^II proposed sole source con trart.< or
u"h("rc only OI1~ hid or proposal is rr-cCl\'cd
In whiah the '4:!:r"1:nte expelldlture I~ ex-
f'<'Cted 1.0 exceed r-5.ooo shlLlI be sub)ecl to
prior llpprovlIl nt tile dlscretl"n or the l'"ed-
eral sponsor' nr. n.gCJlc)'.
(7) Some farm of price or cool n.llnll'sls
should be mnde In connection with e~er)'
procurement !\.GUOll. r'Tlce I\nnlysu; rnJI)' be
lLCcompIL<;.h<X1 Inl'n.rlou5 Wl\p, Includlll!: the
COnlP'"l'l50n of price quol.l\Uons submitted.
rnnrket prices I\nd slmllnr Indicia. to{:ether
",'Ith CU:;counts. C<x;t ..n.nll-.;Is Is the rel'lew
r.nd e"lIlu..tlon of CACh eiemcnt of COo7.... LO
deler:n1ne ron.son~lenes:;, a l1oc;L.bl lit" and
a.llo""lIobUlty. .
(8) Procurement records a.nd /lle<s lor pur-
e.ha.ses In excess or ~lO,OOO &hall Include tIle
r 0110"-:: 0<;:
(nl B"-sls ror contl'a.Ct.()r selection:
(b) Justlnca.llon ror lack of competl tlon
,,'hen c:ornpet.ltlve bIdS or ofTen; a.re not
Ob~H'c:1:
(c; Buls ror aw:u-d coot or price.
(9) A s)-stem ror contTact a..dmlnlstM\tlon
ahll.ll be "",lnllUned to ensure contrllct.()r
conformance with terms, condItions nnd
.peeltlca tlons a! the COD trlLCt. and to ensure
a..cIequ"t.I; and t1m~ly rollowup 0: aJ! PUT-
cha.se<s.
(. The n::eLplent shall Include. In addition
t.() provllllons tadetlne a. sound and complete
. a..e=lent. the rollowlng pro'"1SIOn& In all
contrac:.s. These prol'lslons shall nlso be ap:
pIled Lo sutx:ontrl'Cts.
a. Conl.rnCt.s In excess of "10.000 shf\J1 con-
t&ln contrACtual p.ol1.slOns or cond:tJon~
that will .110'" lor n4m.l nlGtrnt.l I'.. contrn.c-
l:U1\1 or 1~,,1 rome<!JClS In lnsl.l\.nces In "1:llch
cont~t.()rs Vlola.te or brel\ch conl.T"ct tenns
IInd provide lor such rem.edlal "ctloru .;
ITUY be a.ppl'Oprlnte.
b. ^II contrl\Ct.s In exccs.; of "10.000 shl\ll
contll\ln suitAble pro"~",lons for t.e~n".t!on
by the reclplent Including the m.o.nne:- b,'
,,'hlch termJnaWon ,,'111 be e:recled and the
bt\.su ror settlement. In l\oddltlon. sue."> con-
tl""&et.s shnll de;crlbe condltlollS under ,,"hICh
I
A-110:22
lions (29 CrR. PlITt 5). Undcr .'eetlon 103
(If the Act. ~l\ch conlll\Cl.Or ~h:l.ll be Tt-
qutr("o Lo cpnlp\Jtc lilt" I,1,'n~(":" o( .every JlH'~
chnnle R.t\d In~urcr 011 the ba.'~lS of n. standnrd
.....urk c1ny of Po h(l\I~ nnd 1\ .~tI\IH1Ilrd. work
\l,'C'rk. o! 40 hours. ''''urk In cxcc-..ss of tht
st-andnrc u'orkdny or "",or~'.\l,lcrk 1.<; rCrTlIls.sllJlc
pro\'ldcd ll1"':' the worker 1S C0f11pCI\l"r\lCct not n
rille or not less lhl\n' 1 V, limes lhe bl\~lc
r:\tl' of PRY (or f\1I hours ""'or~;cd ill CXCCS5
or A hours in nn)' cl\lcndnr dn)' Of 40 huur.'i
III the ""ork""cck: Sectloll 101 or the ^ct. IS
IIPl'lIcnble to eOIl.<tr\lcllon work lllld provides
tllnL llO Il\borer or meehl\nic shnll be reqlllred
,"0 work 1n sllrro\ln<.1lnJ;:\ or llnder \"orKlllb'
("1l1lt1ttl(ln~ \ldl1ch nrc \l11~nlllt.f\ry, ll:l7.:l.rdno.c:.
or clnngf'r(HI5 l.o hlS lH"n:llh :ll1n !il\r('ly Il.c; de-
h'rlnlllN1 uncicr COl1sl.ruc.t.1on sl\fel~' I\nd
hcnlth ~1.R."d:Hd~ prnl1\\llg-n\.("t! \Jy lhc Secrr-
ll\ry ot Ll\hor. Thc!"c rcrpllrcIIH'nl.:. nu '''Iot
I\pply t.o l.h1! f')\lrchn.scs of sllrJlII4'~~ or nlnl.("-
rials or erllc:les ordll1nrtly n\',dlt\blc on thc
open lJ1fuKcl, or contrnct..'i tor trH,n~p(lrtntlon
or lraJ1~nlls."lol\ ot tnl.r11Ib""Cl1cC.
h. Conlrnct.' or I\(n-eemcnt.'. the pr\llClpl\l
J'\lrp()~l' or, ~'l1lch Lo:; t.o creOolC, dc\~Cl0P or trn-
prove product..s. proce:"':tsc~ or n"lcl.bod.s: or for
explornllon InLO (Icld. thl\l dlrectl)' conrern
p"bllC hel\lth. sl\lCll' or wellnre: or conlrllcts
In the fleld 01 sCI"nce or lechnology III which
lhere Ims been little "'1:nlflcnnt experlcnce
oUL<lde of work funded by l'"cdernl I\.<.slst-
I\nCIf:, :;hnl1 conlf\ln f\ notice to tile etrr.ct .t.hnt
the oonl.rll<:l mAl' l:>c t.eMlllllnte<! for dC'fnnlt
;u ",,'cU f\S COlltJ1L.101l~ where the c:ontrl\oCt OW}'
be t.C'rrn!nn.lC'd b<"'CI\.\I~c o! clrcUJI\..cot.u.ncr:" u.c"
yond the c.ontrol or Ule oonl.rkCLOr.
c. In ail ('ont.rf\ct.s tor con.o:.tT\lct1on or fA-
C".llity 111\;:>ro\'cnlcnl R\\'a.rdc<1 tor rnore t.hn.n
$0100.000. recIpients shl\lI ob<;erve I.lle !.>Ond-
In!; ""lJlIlremelll.S pro,...ded III Att,,,cJunent II
to this circular.
d. All contrl\oCt.~ IIwnrded by reclpleut.< nnd
their oontrllCtor.' or s'lb[:71\n\.<!ClS hl\Vlnl: a
vl\l\le or more thn.n SoIO.Ooo. shnll conte.ln II
pro,'lslon requlrUI1; complll\ncc ",11.h Execll-
tll'e Order 11246, entitled ooEqunl r..mploy-
me.nt Opportunity." 1\1' amellded bl' ,-xecllllve
O~der 11375. nnd I\S SlIpplelnellted III Del'Ml-
nll'lIt or Ll\lx'T r"t"ll\tIOIlr. (41 CFR, l'l\rt GO).
e. All Cllnlrl\ct.s I\nd suh!!mnt.~ In cxcess of
~.~.OOO for COI1SLf\lctlon or repair Q\l..nrdcd hr
rcclpient.' And 5I1breclplen't.' SIII\II IlIcl\lde II
prOVISion lor complll\nce with the Copelnnd
"Anll.Klck Bl\ck" Act (18 U.::i.C. 814) "-<
supplemented In Depl\rtment or L"bor
rel(ull\tlollS (29 CPR. Pl\rt 3). This ^Cl pro-
,'Ides lhl\l each conlmctor or sllbgrl\lIlee
shl\lI. be prohibited lrom lnduclnr,. by I\ny
means. any person employed In the cOII.~truc-
tlon. completion, orrep"lr of public worl<. 1.0
give up IIn)' pArt of the compenSl\tlOll to
which he Is other,,'lse entItled. The Feclptent
shllll report (_II suspected or reported.l'tolll-.
tlons to the redernl sponsorlllg al;ency. \
r. When required by the Feder,,) pro(rmml
leglslnllOn, all constructlon conttllct.s; mlltl.er~ regl\rdlnr, right.' to Inl'entlons IInd
""'IHded b)' the- n::clplent.s l'nd subreclplent.s ,..mlllerlI\IS genemted under the conlTnc~ or
of more th"n 1.2,000 sh,,1I Include a pro"lslon : n{:Teement Me <lIb)"ct ta the regulntlons Is.
Cor cornpllance "'lth the Da"Is-Dacon Act (40 ,sucd by the redcml sponsorln{: I\renc)' 1\1ld
V.S.C. 216a. to h-1) and n.s suppl.emen.te<! bylhe reclplenl. The COlltrn.:Lor shill I be I\d-
nepllrtment or Labor regullltlons (2~ Cl'"R \'Ir.ed /IS LO the ~ourre of nddltlonal Inlorma-
Pl\rt 5). Under this Act contractors Sh"lI~~ Ion ""r"rdlng thcse mnttcrs.
require<! Lo pal' "'''ges. to lnborcrs and me- . I. ^II negnllllted contTl\ot.s (cxcept those
chanica at a rate not less th"n the minim or ~JO.OOO or less) n"',,rded by recipient..'
,,'ases specl/led In a wllge determination made shl\l\ InclUde II prol'lslon to lbe eflect., thl\t
by ,the Secretan or Labor. In "ddltlon, con- the recipient. the re<!eml spon.<orlns ngencr,
tractors shall ~ required t.() pl\'- wl\gcs not the Comptroller General or the United States,
less thnn once .. weel<.. The re~lplent shnl\ or I\ny a! 'their dlll~' nuthorl7.cd represrlltn-
place a copy 01 the current prevl\lIlng wl\se LII'es. shlll\ hllve ncce,... LO an.:: boo.:s. docu.
determlna.tloll Issued bl' the Department of ment.s. pl\per-s nnd records of the contmcto.
!..abor In each soltcltllt.lon IInd the a.wllrd ",'hlch ue dlrectl!' pertinent lo a specl/lc pro-
of a contra.et shl\l\ be condl.tloned upon tbe r""m lor ~he purpose or mnklng lIudlts,
acceptnnce Of the ",nce determInation. The eXlllnlnlltlons. ex.,.,rpl6 and trnllscr\ptlons.
recipient shlll\ reporl ..11 suspected o~ re- ). Con,tra.ct.s IInd subtrrllnt.s oC amount.s In
ported vlolntlons to the Federnl sponsOrlDl; excess o. '100.000 shall contnln a prol'lslon
agency. that requires the recIpient to IIrree to com-
g. Where IIppllca.ble, ..11 contracts a"'"rded ply "'I.th. all "ppllc"ble stAnduds. orders or
b," recIpients In excess oI1.:!.000 for construe- retruln.lons Issued rllrsunnt LO the Clel\r ^:r
ll'on con'traCL~ nnd In exceES a! e.:!.500 lor Act or :910 r42 lJ.S.C. 1851 et sr.".) and the
other contract.s that In.-olve the emplo,'ment rederal W..ter Pollution Contr,,1 ....ct (33
01 mech"nlc., or laborers. sllall Include 'a pro- U_'LC. 1251 et seq.) lIS nmended. ,\'Inll\tlons
\'ISlon for compliance "'Ith sections ] 03 and <h...1I be reported LO the Federlll sf)9nsorln.
101 or the Conlrl\ct Worl< Hours "Dd SMety nt:enc)' and the Rel':lonal 6>mce of the 1;:0'
Standl\rds Act 140 U.S.C. 3:!7-330) a.s sup- "Ironment"l Protection ^gency.
plemented by Departmen.t 0: Labor rel;ula- I f"R Ooc.16-21904 Flied 1-29-16: S :45 am I
I
I
APPENDIX H
OMB
Circular A-122
~
I
Office of Management and Budget Circular A-122 (6/27/80)
OFFICE OF MANAGEMENT AND
BUDGET
Ot"ouIar A-122, "Cost Principles for
Nonprofit Organizalions"
AGENCY: Office of Managcmcnt and
OudCCI.
ACTION: Final Policy.
June ::7, l!IUO
To The Hcads of Excculivc
Dcpartmcr.ts and cSlilblishments
Subjcct: Cost principles for nonprofit
organiza lions, .
1. Purpose. This Circular cslaLii:;hcs
principlllli for delcrmining costs of
grants, conlra:::ls llnd olilcr agrecmcnts
with nonprofit organizations. II docs not
apply to collcges ar.d univcrsilies which
ilre covered bv Circular A-Zr. Stilte,
local, Gild fcd~ri1l1y :-ccogn:zed Indian
tribal governm('!nts which are covered
by Circular 74-4; or hos;;i:<l!s. The
principles are desi~ncd 10 ;Jro\'jde that
thc Federal Government bear its fair
shnre of costs cxceol where restri::led or
prohibited by law. The principles do not
a llemptlo prescribe"the extent of cost
shari~g or matching on' grants, cuntracts,
or t'the:- agrecmcl:ls. However, such cost
sharing or ma :ching shall nol be
accomplished through :lrbitrary
Iimitalions on individual cost elemcnts
by Fedcral agcncies. Provision for profit
or othcr increment above cost is outsid'3
the scope of this Circular.
2. Sl:perse$sion. This Circular
supersedes cost principl<:s issup.~ by
indi vidual agcncies for non'profit .
organiza tion,
3. Applicabi/it? a. These principles
shall be used by all.Federal a!lcncies \n
determining the .costs of work periormed
b:-' nonprofit organi:a lions under gr:lnts,
coopcrative a~reements, cost
reimbur::ement contracts, and other
contracts in which costs are uscd in
prir.ing, adminislration, or sc'lllp.menl.
All of these instruments are nercaflcr
refcrree. to as awards. The principlcs do
not apply to awards under which an
o/'ganiza lion is not rcquired to accoant
to the Government for actual costs
incurred.
iJ. All cost reimbursement suuuwanls
(subgrants, subcontracts, etc.) are
subj~cl to those Fee.eral cost principlcs
applicable to thc particular organizalion
concerned. Thus, if a subaward is to a
nonprofit organiz.alion, this Circulu
'shall apply: if a"subaward is to a
commcrcial organiza lion, the cost
principles applicable to commcrcial
CC:'lcerns shall apply: if a subaward is to
A colle:;e or univcrsity. Circulur A-~l
~hall Rrr,)\,: if a ~\IhlWi1rd i~ \nll S:;IIr..
local. 'or federally recOpli.zed Indllln;
tribal govcrnment. Gi~ula.r 7~ shaU
applj',
4. Definitions. a. "Nonprofit
organization" means any corporation,
trust. a'Ssocia lion, coopcra tive, or othcr
organization whh:h (1) is. operatcd
primarily for sdentific, educational.
service, charitable, or similar purposcs
in the public intcre~t: (2) is not
organized primarily for profit; and (3)
uscs ils net proceeds.to milintain,
Improve, and/or expand its operations.
For this purpose. the term "nonprofit
organization" excludes Ii) collcges and
univcrsilies: (ii) hospilal~: (iii) Slate,
locill. and federal!y recosnizcd Indian
tribal govcrnments: and Ii v) those
nonprofit orsanizations which arc .
cxcluded from covcrage of this Circular
in accorduncc .....ith paragraph 5 below.
b. "Prior approva/" means secu:-ing
the awarding agency's permission in
advance to'incurcost for those items
that are de~ignalcd <IS requiring prior
approval by the Circul:lr. Gcnerally this
permission will be in writing, Whcre un
itcm of cost rp.q'Jirir,g prior approval is
specified in the buciget of an.award.
approval of the budget const'itulcs
approvalcft~utcoSI.
5. Exclusion of same nonprofit
organizations. Some nonprofit
o.ganiza lions, bec:uuse of thcir size and
nature of opcrations. can be considered
to be similar to commercialconccrns for
purpose ofapplicahilily of tost
principles. Such nonprofit organizations
sh<lll operate under Federal cosl
principles applicable to commercial
concerns. A lisling of these
organiza liona is COlluined.in.
Allachment C. Other organizations may
be added from time to time,
6. RespoflSibi/ities. Agencies
responsible for administering progra.ms
that involve awards lo nonprofit
organizations sbaU implement the
provisionl of this Circular. Upon
requesL implementing instruction shall
be furoi.sbed tCl the Office of
Management Iud Budget. Agencies &ball
designale a liaison official to serve as
the agency rcpresentative on matter3
relating to the implemcntation of this
Circular. The name and litle of such
representa live shall be furnished 10 tbe
Officc of Mana~ement aDd Budgct
within 30 days of the date of this
Circular. .
7. Attachments. The principles and
related policy guides are set forlll in lllc
follo,^-i:-:g Attachments:
Attachment A~neral Principlcs
AlIachmcnt B--Sclccted llems oJ Cosl
AlIach.menl C-Nonprofit
Organizalioo.s Not Subject ~ This
Circular
I
A-122:1
8. Requests for e>.ceptiolls. The OUice
of Management aDd Budget may prant
cxceptions 10 the re-quiremcnts of this
Circular when permissible undcr
existing law. However, in theintercst of
achieving maximum unifomlity,
exceplions wiu be pcnnittcd only in
highly unusual circumstanccs.
9. Effectil'e Date. The llrovisions of
this Circular are effective immediatel\'.
Implcmcntation shall be phascd in by'
incorporating the provisions inlo ncw
a wards made after the start of toe.
organization's next fiscal ycar. For
existing awards the new principles may
be applied if an organization aDd the
cosnizsnl FcderaJ agcnc}' agree. Earlicr
im~lcmcnt;]tion. or a delay in
implcmcotation of individual pnrnsiornl
is also pcrmillcd by mutual agreement
between iJn'organizalion and the
cognizant Fcdcral agency.
10. inquiries. Furlllcr information
concerning this Circular may bc
obt:lined by contacting the Financial
Managemcnt Dranch, Budget Revicw
Division, Office of Management and
Dudget, Washington. D.C. 20503.
lclephone (202) 395-47i3. "
):lmr.s T. Mcintyre, )r..
Director,
ICircul:lr No. A-IZ2]
Attachment A
General Principles
Table of Contents
A. Basic Considerations
1. Composition of total coste
2. Factors affecting allowa-bilit}' of costs
3, Reasonable cosu
4. Allocable costs
5: Applica ble credits
O. Advance understandings
B. Dirr.ct Cosu
C. lndirecl Cosu
..
..
D. Allocation of Indirect Costs ~d.
Determination of Indirect Cost Rates
1. Genp.ral
z. Simplified allocation method
3. Mulliple allocation base melhod
4. Direct allocation method
5. Special indirect C05\ ra Ie,
E. Negoliation and Approval of Indirect Cosl
Rates
1. Definition!
Z. Negotialions and appro,'al of rates
[Circul:lr No. A-~22J
AllacluncDI ^
Ger:erol Principl!ls
A. Dosic Considerations.
1. Composition a/total costs. The tolal cost
of an award i6 the ~um of the allowable
d,rect and allocable indirecl co61s less aDY
applical:!e credils.
L. Fa<.lor.< a.~(CClins c!luwabiiily of r:osts.
I
Office of Management and Budget Circular A-122 (6/27/80)
To be allowable under an award, costs !Trost
mE:1:t the following !teneral criteria:
a. De rell80nable for the performance of the
award and be aUocable thereto under these
principles.
b. Gonform to any limilations or exclusions
set forth in these principles or in the a Wllrd
as 10 Iypes or amo~nt of cosl.uem.,.
c. Be consist e{lt .....j!h policies and
procedures thot apply uniformly \0 bOlh
fcdcrally financed and other Rctivities of Ihe
or!la niza tion.
d. De accorded consistenllrcalmr.nl.
e. De determined in nccordance wIth
generally accepted accounting principles.
f. Not be included as a cost or used to meet
cost sharing or motching Tliquircmonh of any
other federally financed program in eilher the
current or !lprior period.
e. Be adequately doi:u~cnred.
3. n(!osunabJe casJs. A c051 is reasonuble
if, in its nnlure or amounl, ir:does not exceed
that whic:h would be Incurred by'a pn:dent
person under the circumsllli'1ces prevailing at
Ihe time the dtlcision wa~ made to incur the
costs. The question of the n:asonableneu,of
specific cos:s musl be scrutinized with
parlicularcllre in connectian with
organiza tiona or separa ie divisions thereof
.....hich receive the prepondcrs:lcc oCtheir
supporl from awards made' by Fede'ra)
agencies. In delermining Ihe r!!asonableness
of a given cosl, consider;Jticn shall be given
to:
a. Whether the cost is of a Iype generally
rccognized as ordinary and necessary for the
operation of the organization or the
performance olthe award.
b. The restraints or requirements imposed
by such factors as generally accepted sound
business practices, arms l'en.g:h bargaining.
Federal and State laws and regulations, and
tenns and conditions of the award.
c. Whether the indivld8ah'.concerned acled
'.~ith prudence in Ihe circumstances,
considering their rllsponslbilities to the
organization. ils members, employees, aDd
clients. the public at large, nnd the
Government.
d. Significant deviations from lhe
established practices of the orgJnization
which ma)' unjuslifiabl)' increase the award
costs.
4. Allocable costs.
a. A cost is allocable to a particular cost
objecth'e, such as a grant, project, service, or
other activity, in accordanca wilh the relalive
benefits received. A cost is allocable 10 a
Government award if it is Irealed
consistently with other cosls incurred for the
same purpose in like circumstances and if i'l:
(1) Is incurred specificallv for the sward.
(2) Benefits both the awa'rd and other work
a;Jd can be dis:ributed in reasoDable
proportioD to th!! benefits received.
(3) Is necessary 10 Ihe overall operation of
the organizalion. although a direct
relationship to an}' particular cosl objective
cannot be shown.
b. Any cosl allocable to a particular award
or other cosl objective under these prinr.iples
may not be shiflee \0 other Federal aWOlrds 10
overcome fundin!; deficiencies, or 10 avoid
restrictions imposed by law or by Ihe lerms
of ;he award.
5. Applicablc credi/...
a. The lerm applicable credils refers to
those receipts. or reduction of expenditures
which operate 10 onset or reduce expanscs
ilems that are allocaule 10 swards as dirccl
or indirecl costs. Typical eXRmples of such
Iran~actions are: purchase discounts, rebates
or allowanc.es, recoveries or indemnitics on
losses, insurance refunds, and adju6tments of
overpayments or erroneous chaeges. To the
ex lent that such credils accruing or received
by the or!!aniZillion relate to allowable cost
they shall be credited to lhe GoverDment
either as a cost reduction or caRh refund as
appropriale.
b. tn some instances, the amounts received
form the Fedcral Government to finance
orgRnizalional activitics or service operations
should be tr~aled as applicnble credits.
Specifically, the concept of r.elling such
credit items against related expenditures
should be applied by Ihe organi:r.aton in
delerrning the rotes or amounts 10 be
organizat:on in delermininllthe rales or
arnaounts tobe charged 10 Federal awords
for services rendered whenever the facilities
or olher resources used in providing such
services have be!!n financeJ (lirectl)', in
whole or in part, b)' Federal funds;
a(cl For rules covering program income
(i.e., gros~ income earned from federally
supported activities) see Alllichmenl 0 of
OMD Gircular A-ll0.
6. Advance and understandings. Under any
given"award the n:a60nablen~s and
allocability of cerlain items oJ costs may be
difficult to determine. This particularly true in
connecti~n with ol'fizaliolU thal.receive a
prp.ponderance of Iheir supporl from Federul
agencies. In 'order 10 Il\'oid subsequent
disallowanc:e'or di'pute based on
unreasonableness or nonaUOeabililv, It is
ofl!!n desirable 10 seek a wrilleiJ ag~(lement
wilh Ihe cognizant or owardinll'a~enC}; in
advance of the incurrence of special or
unusal costs. The absence ol an advance
a!",eemenl on any alement of cost will not, in
it~elf, aHect the reasonableness or
aliocability of lhat element.
B. Direct Casls
1. Direct cosls 8re those that can be
idenlified specifically with a parlicular fi:'lal
cosl nbj<:clive: i.e.. a particular award.
project, service. or olher direct acth'il)' of an
crgftniZOllion. However, a cost m:l)' not be
assiqned to lin a ward as a direct cost if an\'
oih~r cost incurred for the same purpose, i~
like circumstance, has been allor-a led to on
award as an indirect cost. Cost identified
s;:acHlcRlly with Rwards are direct cost of tne
a wards l!nd are to be assigned directly
there!o. Cosl idenlified specificaliy with other
filial cost objectives of the organization are
direct costs of those cost objectives and are
nOlto be assig;'led to olh~r Rward. direcll" or
indirectly. . .
2. Any direct cost of a minor'amount m:l}'
be Irea led as an indir~ct CO$I obr reasons IIf
pruc:ica!ily where Ihe ac:count treatment fur
such cost is co::sislently applied to 311 fin:ll
cosl objecti\'es.
3. The cost of certain acth'ities are not
allowable as chaq;es 10 Fedelal.l!wnrds (~e~.
for e>:il:':'lJ'lle. lund raisin!: coslS in parag~;Jph
. I
A-122:2
21 of I\llachment DJ. However. even though
lhese costa are unallowable for purposes of
computing charges to Federal aW<lrds. the,'
nonelhele~s must he treated a~ direct cost' for
purpose. of determinin!l indirect cosl rates
Rnd bc allocated their sharc of the
organization's indirect COsls if Ihey represent
acti\'ilieswhich (11 indudc the salllries of
personnel. (2) occupy spirce, and (3) benefit
f rom the or8a niza lion' s indirect cos ts.
4. The cosls of activities performed
prim:.rily a. a se.....ice 10 members, clients, or
the gl'neral public when significonl nnd
necess;lry to the orgoniz<llion's mission muat
be Irea led u direct costs whcn or nol
nllo";"uiJle and be allocated an equitahle
share of inuiCl:cl cosls. Some eXRmples of
Ihese typcs of acli\'ities include:
II. M:.inlenuncc of member~hip rolls,
subs'criptions. public<llion,. and rein ted
funt:tions.
b. Pro\'iding services Dnd information to
members, legislative or administrative
bodies, or the public.
c. ('romotion. lobbring. and other forms or
public rr:latiun~.
d. Meetings and conferences exceplthose
held to conduct the genera! administration of
the organization.
3. !\li\intenacne, protcction, and inveslment
of ~pecial funds not used in operation of the
orguniz<llion.
r. Administration of group benefits on
behelf of members of clienls including life
.and hospilRI insurance, annuity or relirement
plans. financial aid. etc.
e. Indirect Cas/.
1. Indirect cosls are those that have been
inc::rred [or common or joint objectives and
cannot ue reildiiy. identified with a particulor
final CC'st ol:jecli\'e. Direct c"sl of minor
arnoun:$ mar he treated as indirect costs
under the conditions described in paragraph
D.l. abo\'e. After dirp.ct costs hllve been
delt<rmillrd and assigned directly to awards
or olher work as appropriate. indlrecl costs
llr~ ~hose reffi"ining \0 be allocaled to
benefiting co~, C'bjeclives. A cost milY not he
allocated 10 an oward as an indirect cost if
Oil)' olhp.r.cosl incul'Tefl for the iam.e purpose.
in Eke circumstances. 'has been as~i!l~ed 10
an ..":ard as a direct cost. I
2. Bp.cause of the diverse characteristics
Rnd Dccounting practiccs of nonprofit
crgllnizations, it is not possible to specify the
trpf'S of cosl which mey be classified liS
inciirt<ct cost in all situalion. However, lypiclll
examples of indirecl cost for many nonprofit
o:'ganizations may include depreciation or
lOse allowance.s or. buildings and equipment.
the costs of oper,l:mg and maintaining
f.,cililies. and general Rdmicistralion and
{!!'lleral ~xpens!!s. such 81 the salaries and
exrcnses of executive ofricers. personnel
adrr.inistration. and ac::ounling.
D. AlIoca/ion of Indirect Cost ond
Drtermi,'1ali"n of Indirect Cost RUIf'S.
1. Gcneral.
a. ""'here s nonprofit of!!aniza lion has only
unc rr./t;ur lunction. or "':,e,'e ail its major
lunctlons l1enefit fru:n its indirer.t cost, to
llpprnximalely Ihe same de!lTl'e. Ihe
~Iio::r.llon of indi:l'Cl r.C'sts /tr.d the
I
OHice of Management and Budget Circular A-122 (6/27/80)
computation of an indirect cosl rote~' be
accomplished throu(lh simplified alloClition
procedures as doscribed in para!Vaph 2
below.
b. .....ihere an organir;a lion hal several major
function. which bencCil from ill indirect costs
in varying degrees, allocalion of indirect
costs may require the accumulation of luch
cosls Inlo separate cosl groupings which lhen
are allocated individually to bencfiling
functionl bv mCRns of a basc which best
mcasures the r~lnlive degree of benefit. The
indirecl costs &lloca ted 10 eRch function are
thr.n distribulcd 10 individual Awards and
olher Rctivitics included in lhal dunction by
means of UD indirect COlt rOle(s).
c. The delerminalion of what constitutes an
or(lRnizalion'l mnjor functions will depend on
its purpose in being: the types of services il
renncrs 10 the flublic, its clienls. nnd it~
memucrs; ond the IImollnt oC efforl II dcvotcs
10 such aclivllies aa fund raIsing. public
informalion and membership activilies.
d. Specific methods for allocaling indirect
cosls and computing indirect cosl roles along
with the condilions under which each method
should be used arc described in paragraphs 2
through 5 below.
e. The base pcriod for the alloca tion of
indirecJ costs is the period in which such
cosls are incurred and accumulated for
allocalion wo work perlormed in that period.
The base period normally should coincide
wilh the organization;s fiscal year, but in any
evat, shall be so selectee u to avoid
Inequities in \he allocation 01 the cosls.
2. Simplified aJ/acatian method.
a. Where an organi%Btion's major funclions
benefit from its indirect cosls 10
approximalel)' Ihe same ee!!re. thc u!localion
of indirect cosls may be accomplished by (il
separaling lhe organi:r;alion's total costs for
lhe bue period as either direct or indirect.
..nd (iil di\'idinll tbe total allowable indirecl
cnsls (net of ap'piic:able credits) by an
equitable distribution base. The result of this
p.occss is an indirecl eosl ra Ie which is used
to distribule indirect cosls to individual
a wards. The rate shouid be exprt:ssed as lhe
percentage which \he lolal a010unl of
allowable indirect costs bears to Ihe base
selected. This method should alos be used
.....here an orllanizaliCln has only one m..jor
function encompauing a number of
individual proje.::U ot lIcti\'ilies. and may be
u~ed .....here Ihe !tn'el of Federal awards to an
organization is rellltively small.
u. both the diroct costs ane the indirecl
costs shall exciude cap;lel expenditures and
una~lowaule coslS. I iowe'lcr. unallowKble
cosls .....hich represent activities mllst lie
inciuded in \he direct costs under the
conditions. described in paragraph B.3. above.
c. The distribution base ma)' be tolal direcl
costs (exclul.ling capital exptlnoilures and
olher distorting items, such IlS major
subcontrilcls or s:Jb&rar.I~). di.eel sr.laries
and ,,'ages, or other base .....hich resulls in an
cquitable distrib\Jtion. The dis:;ibulion base
shall generally exciude pa.-ti::ipant suporl
cosl, OS defined in paragraph ZIl of
A tlac:hOlent B.
e. E"C"~'I .....here a s!,r.da! rilH:(s) i.
rC'quired in accordance wi:h p<lragraph 0.5
below. the .indireclcG01ll TA~ a,...,oak>ped. ....dcr
the abr'IVe prmr,iplr.I.i. AnP1iCIIlJ\.1LD 811
a ward. at .the OC1l"oiz.alion..u a sfl'OCial
ra le( s I is raquired.8pprapria Ie modiflCII lions
shall be made in order LD develop .Ihe special
rate(s).
3. Multiple alloca/ion base method.
a. "'.'here an of'Fani:r;ation'l indiroct cosla
benefit its majorlunctions in ,'arying degrees,
such costs shall be sccumulatad into separale
cost grourrinl18. Each grouping shall then be
allocated individually 10 benenUng functions
by means of a base whidl best measures Ihe
relative benefits.
b. 111e grouflings shllll be eslnbllshed so AS
to permit Ihe allocation of aach groutlin~on
the basis of benefits provided to Ihc maior
functions. Each groufli~ should constitute a
pool of expenses thill ore of Iikc character-in
terms of the fllnctions they hencnlllnd in
IcrlllY of the ..!loclltiull t","" whl..h t",sl
. measurs Ihe relulive benefils pro\'idd to each
funclion. The numuer of scparste groupings
should be held within practicallimils. taking
into considerution \he materialily of lhe
amounts in\'olved and Ihe degree of precision
desired.
c. Actual condilions must be laken inlo
account in selecting Ihe base to be used in
allocaling the expenses in each grouping to
benefiting functions. When an allocation can
be made by assignmenl of s cost grollping
directl)' to the funclion benefiled. the
allocation shall be made in that manner.
When the expenses in a grouping are more
general in nature. lhe allocalion should be
made through the use of a selected base
which produces results \hat are equitable to
both the Government and Ihe organi:r;ation. In
general. any cosl element or cost related
faclor associated with Ihe organizalion's
work is potenlially adaptable fo~ use as an
allocation base provided IiI it can readil)' be
expressed in terms of dullars or other
quantitative measures Itolal direct costs,
direct salaries and ....agt:s, slaff hours applied,
square feet used. hours of usage. nwnber of
documents processed. populiltion served. and
the like) and (iiJ it is common to the
bcnefi ling functions during the uase pe~iod.
d, Exccpl where a special indirect cost
rilte(s) is required in accordance wilh
paragraph D,5. below. the separate groupings
of indirr.ct costs allocated to each major
funclion sholl be sgrp.ga ted and Ireated as a
common pool for Ihat function. The cosls in
the common pool shall then be distributed 10
indivisual swars inciuded In that function by
use of a sin~le indirecl cosl rate.
e. The dislribution base used in cOr:1puling
the indirect cosl rate for each function mav
'u~ total dirp.et costs (excluding capital .
c:::penditures and olher distorting items sllch
uS major subconlracls and subsrants). direct
salaries and wages, or other ase which
results in an equitable distribution. The
distributioc base shall generally exclude
participant support costs as defined in
puragraph 29. Allachmenl B. An indirect cost
rale should be developp.d fir each sr.parate
indirect cost pool developed. The rate in each
case should be staled as the percentage
which the amount of the particular indirect
cosl pool is of the distribution base identified
. I
A-122:3
-..ith tn. t pooL
4, Direct allocaLion method.
a. Some rronprofil organizations, \real all
COSIS as direcl costs expect general
administration and general expenses. These
organizations generally separate their costs
into thre basic categories: (i) General
administration and general expenses, (iil
lund raising. and (iii) other direct functions
(including projects perlormed under Federal
awards), Joint costs, such as deprecialion,
rentnl costs, operation and maintenance of
facililies. telephone cxpenscs. and the like
arc proraled indivisually as direct cosllo
each category and to each award, or olher
aclivity using a base most appropriate 10 the
particular cosl being proraled,
b, This method is acceptable provided each
joint co.st is prorated using a base which
lIccllrnlel\' meIl511rr.~ lhe benefits flrnviclcd to
cllch IIwl;",1 ur ..Ihcr lIctlvlll', Thl! hllll"" 11111/11
be established in accordan~e with resonable
criteria, and bc supported by currcnt dala.
This method is compatible wilh Ihe
Standards of Accounting and Financial
RCflarting for Voluntary Heallh and WeUare
Organizations issued jointly by the Nalional
Hr.allh Council. lnc.. the National Assemblv
of Volunlary Heallh and Social \VelCare .
Orsani:r;alio"ns, and lhe United Way of
America.
c. Und~r Ihis melhod, indirect costs consist
eclusively of sr.neral adminislra lion and
gcneral exrenscs. In all other respects, Ihe
organizalion's indirect cost raless shal be
computcd in lhe same manner as that
described in paragraph D.2 auove,
5: Special indi:-ect cost rates. In some
instances, a single indirecl cosl rale lor all .
activities of an orsani:r;atlon or for ead~ major
lunction of Ihe organizalion ay nol be
appropriale. since il would not take inlo
account lhose differenl factors .....hich may
subslantiallv affect the indirect cosls
applicable t~ a particular segment of worl~.
For this purpose. a particular segment of
','ork. For this purpose, a particular segment
of worK may be that rerformed und~r a single
a.....ard 0: it mav consist of work under a
group of awards performed in a common
~nvironmenl. Ihe factori may inClude the
physicallocalion of the work. the levp.f of
Rdministrative support required, Ihe nalure of
the facilities or order resources employed, the
scientific disciplines or technical skills
involved, the organizalional arrangements
used, or any combination thereo!. When a
particular segment of .....ork is performed in a,n
environment which appears to genera Ie a
significantly diflerentlevel of indirect costs,
provisions should be made for a separate
indirect cost pool applicable to such work,
The sepcrofe indirect cost pool should be
developed during the course of the regular
allocation process, and the separate indirect
cost ra Ie resulting therefrom should be used
provided it is determined Iha t (i) lhe ra te
differs significantly lrom Ihat which would
have been obtained under paragraph 0,2. 3,
and 4 above, and (ii) the volume of work to
which Ihe rale would apply is material.
E. Negotiation and Approval of Indirect Cost
flMCS.
I
Office of Management and Budget Circular A-122 (6/27/80)
1. Definitions. As used in this seclion, Ih~
following tenns have the meanin:;s sel forth
below:
II. "Cognizant agency" means the Federal
agency responsible for negotiating and
approving indirer.tcost rilles for II nonprofit
organizalion on behalf oC all Federal
agcncir.s.
b. "Predetennined rote" means an indirect
cnst rate. spplicabll;! to s specified current or
future period, IIsulllly the organization's !'iRCS(
\'ear. The rIIte Is based on an estimale oC the
~OSI9 to be incurred doring the period. A
~~edetermined rate is nol subject 10
adjustment.
Co "Fixed rate" means on indirect cosl rate
.....hich has the Slime characteristic, as a
predetermined rale. excepl that the diflerence
between Ihe eSlimated costs and the actu(ll
cnsls oC the period covered by the rille is
carried Corward as an adjustmenl to lhe rale
computation oC a subsequent period.
d. "Final rate" meAns an indirect cost rale
applicable 10 a specified post period which is
based on lhe actual costs oC lhe period. A
:inalrate is not subject to adjustmp.nl.
e. "Provisional rate" or billing rate mcans a
temporar)'indirect cosl r(lte applicable to a
specified period which is used for Cunding,
interim reimbursemenl, IInd reporting indirect
cOsts on awards pending the establishment of
a rate for Ihe period.
f. "Indirect cost proposal" means Ihe
documentation prepared by an organization
to substanliate its claim for Ihe
reimbursemenl of indirecl costs. This
propcsai provides the basis for the review
IInd negolialion leading to the eslablishment
of an organization's indirect cosl rale.
g. "Cosl objeclive" mesns a function,
organizational subdivision, contract, grant, or
other work unit Cor which cost da ta are
desired and for which provision is made to
accumulale IInd measure Ihe cosl oC
processes. projects, jobs and capilali7.ed
projer.ts.
Z. Negotiotion ond opprol'o! of rates,
a. Unless different arrangements arc
a;reed 10 by Ihe egencies concerned, the
Federal agr.nc)' wit.h the largesl dollar value
of awards with an organization will be
cesignate:l as the cognizanl agency Cor Ihe
n~golialion and approval of indirect cosl
r&tC$ and, where necessary, olher rates such
as fringe benefit and computer charge-oul
:ates. On~ an agenc)' is assigned cognizance
lor a partIcular nonprofit organiza lion, the
l5signment will not be changed unless there
is a major long-term shift in the dollar volu~
d the Federal awards to Ihe organization. All
concerned Federal agencies shall be given the
o;Jportunity 10 parlicipa te in the negotia lion
;lrocess, bul aher a rale has been agreed
\:;Jon it will be accepled by all Federal
&gencies. When a Federal agency h:ls reason
10 believe that special opera ling factors
affecling its awards neceuitate special
bdirect cost ra tes in accordance with
~aratuaph 0.5 above. it will, prior to the lime
l.,e rates are negoliated, noliCy the cognizant
"aency.
b. A nonprofilorgonization which has not
~:e\'iously established an indirect cost ra te
with a Federal agency shall afler the
c~~anization is advised that on nward will be
r:lade and. in no event, later than lhree
months after the effecti....e dale of lhe award.
c. Organizalions that have previously
established indirect cost rales must suumil a
new indirect cost proposal to the cogni1:ant
agcncy within six months after the close oC
each Ciscal year.
d. A predelermined rate may be negoliated
for use on awards where therr. is reasonable
assurance, bued on pas I experience and
reli:ible projection oC the orgoniz.ation's cosls.
that the rAle is nOllikely to exceed a rale
ba~ed on lhe organization's nctual costs.
e. Fixr.d rales may be negotiated where
predetermined rales are nol considered
appropriate. A fixed rale, however, shall nol
be negoliated iC (iJ all or a subslantial portion
of lhe organi1:atioll's awards are expecled 10
expire before the carry-Corward odjustmenl
can be made: (ii) the mix oC Government and
non.government work 01 the organiz.alion is
too erratic 10 permit an equilable carry.
forward adjustmenl; or (iii) Ihe organization's
operations nuctuale significanlly from year 10
year.
r. Provisional and final rales shall be
negotioted .whr.re neither predeteTlllined nor
Cixed rales are appropriale.
g: The results oC Poach negotia tion sh:lll be
formalized in a written agreement belween
the cognizant agency and the nonprofit
organizalion. The cognizanl agency shall
distribute copies of the agreement to all
concerned Federal agencies.
h. If a dispule arises in a negotia lion oC an
indirect cosl rale between the cognizanl
agency and the nonprofit organization, the
dispute shall be resolved in accordance with
lhe appeals procedures of the cognizant
agency.
i. To the extent that problems ure
encountered among Ihe Federal agencies in
connection with the negoliation and approval
process, Ihe Office oC l...tanagcmenl (lnd
Budget will lead assislance as required 10
reRCllve sllch problems in a limcly manner.
(Circular No, A-1ZZ]
Allachment B
Selecled llems oC Cost
Table of Contents
1. Advertising cosu
Z. Bad debts
3. Bid ami proposal cosls (reserved)
4. Bonding costs
5. Communicalion costs
6. Compensalion lor personal serl'iccs
7. Contingenc}' provisions
a. Contributions
G. Depn:ciallon and use allowlInces
10. Dona lions
11. Employee morale, health and 'welfare
costs and credits
1:::. Enler:ainrnent costs
13, Equipment and other capital expenditurel\
H. Fines nnd pen allies .
15. Frif1~e benefits
1'3. Idle .facilities and idle car-ncily
17. Inuependent rcsearch and developmenl
(resen'ed)
lB. Insuraoce and indcmnific:llion
19. Inlere~l. Cund-raising, and investment
managemf:nl Cosls
20. Li!bor re!alio:1s Co.,sls
. I
A-122:4
21. LC's~(>s on olhe~ nward;
::. Mainten"nc~ a:1d r'cp"ir cosls
ZJ. M~teriAls /Vld supr1ie.
24. M"elin~5. conrerrncr.s
2.,;. Mem\'er,l:ips. sobsr.riplions, "nd
prefessional activity cosls
Zll. Orllonizalion costs
27. OVPrtime, exlra.pa}' shift and mullishit'l
prerniums
Z8. Pa;;e chargrs in professional journals
29. Parti.:;ijlant supporl costs
:la. Palenl costs
31. Pcnsion plllns
32. Plant securit}' cosls
33. Preaward cosls
Jot. Proressional service costs
35. Proflls a:1d losses on disposition of
deprecialJle propert}' or olher capilal
IIssels
JO. Public inrorm/ltion ~en'ice costs
J7. Publication /Ind printing costs
:in. Re(lrransement nnd alteralion cosls
3D. Recon \'ersion cos Is
40. Recruiting cosU
41. Relocalion costs
42. Rental costs
43. Royalties and other costs for \fl;e oC
palent' snd cop)'rights
4<\. Se\'er:lnce pay
45. Specialized service facilities
41i. Taxes
47. Tennir.alion costs
4ll. Tt:lininl;: and education costs
40. Transportlllion costs
50. Travel costs
[Circular No. A-1:!.Z]
Allnchmcnt B
Sclectoollems of Cosl
Paragraphs 1 through 50 provide principles
10 be applied in establishing the allowubilily
oC cerlnin items 01 COllI. These principles
1I1'ply whelher a cost il trealed as direct or
indirect. Failure to men lion II particular item
of cost is not inlended to imp1r that it is
unallowable: ralher determination os to
nllowabilit)' in each case should be based on
th~ treatment or principles provided lor
similar or related items or cosL
1. Advertising costs. .. '\
a. Ad'/ertisinR costs mean the costs of. .
media scrvice, and associated cosU. Media
advertising includes maga:tines. newspapEirs.
radio and television pro~ams, direct maiL
exhibit,. and the like.
b. The only advertising costs allowable are
those which arc solelr lor (i) the rOCTultmeat
of porsonnel when considered in conjunction
.....ith all other rocruiunent COSll, as sel lortb
in para!;raph 40:.(ii) the procurement of goods
and services: (iii) Ihe dispoul of surplus
mnllOrials acquired in the penormAnce oC the
award except when Ol'llllniutions are
reimbur~ed lor disposals at a predelermined
amollnt in accordance with ^lIachment N of
OMU Circular A-l1O: or (i\') specific
.requirements of lhe award.
2.. Bad dobls. Bad"1:lebts, including 1~ges
I whether aclual or estimated] arising from
uncollectible accounts and other claims,
related collection Cosls, and relaled legal
costs. Are unallowable.
J. Bid ond propo..al costs. Irc811rvcd)
4. fioJnditlg costs.
I
Office of Management and Budget Circular A-122 (6/27/80)
a. (3Qnclin~ co~ts arise when lhe
Govemmenl rcquire~lu~urance B~nin~t
lir.llociallo!5 to it.~eH IX nthers l-y reason of
th~ ar.1 or d~faull of the organization. Thcr
u:isl! "Iso in instance, where t~e or~aOl%.8l1on
r"Quirl!s similar auuranoe. InCluded Bre such
bonds as bid. performance. payment. .
a~hanc:e payment, InfringemcnL and ftdehly
bo..d~.
b. Custs of uonding r~quired pursuant 10
the lertl'S of thp. award lire allowl\hle,
c. Co~tsof bonding n:qulred bj' the
org"ni7.;llion in Ihe general conduct of ilS
opr.ral:ons are ollowable 10 the el(lcnllhol
such bonding Is. in occordnnce wilh sound
business practice Bnd lhe rotes and premiums
lire reasonable under lhe circumslances.
5. Communication oo.ots. Cosls Incurred for
tcle~hone ~er.'iceR. local and long dislance
telephone coils. telegrnms. radiO\lralM.
poslage and Ihe like, are allowable.
6. Compensation for personal sen'ices.
a. Definition, Compensalion for personal
services inctudes ",11 compeOlsalion paid
currenlly or accrued by lht! orgar.i::ation for
scrvice~ of employer.s rer.dered during the
period of the 8ward(exccpt as otherwl~e
prnvided in paragraph g. below). II includes,
bul is nollimiled 10, 8a1aries. wages,
director's and executive commillee member's
fees, incenlh'e awards, fringe benefits,
pension plan casU, allowances for oIT.site
pay. incentive pay. location allo.....anccs.
hcrdship pal'. aDd cost of Ii\'ing difierennals.
b. A/lQwability. Excepl as otherwise
!;lecifica.lly provided in this paragraph Ihe
costs of such compensalion are allowable to
lhe extenllhat:
(11 Total compensation to. individual
employees is rcasonable fIX the services
rendered end conIorms to the eSlabiished
poliey of the organi:z:alion consistently
applied to both Govemmenland Don.
Governmenl activilies: and
(Z) Charges to swards whelher treoted as
dlrcct or indirect cosls are .dete.min~d and
supporled a's required in this paragraph.
c. Reasonableness.
(ll When the organiution is pn:dominantly
engaged in activities other than tho~e
sponsored by the Government. compen&alion
for employees on Governmonl-sponsored
work will be considered reasonuble to the
extent thalli is consistenl with Ihal paid for
similar work in Ihe organiutioo's other
aClivities.
(Zl When the organization i8 predominanlly
engaged in Governmenl.sponsored activilies
and in cases when: the kind of employees
required for the Governmenl aclivilies are
n.ol found in the organiz.atioo's other
aclivities, compensation for emplnyees on
Go\'ernment-sponsored work willue
considered reasonable .to the exlent thai it is
comparable to that paid for similar work in
the labor markets in which the organization
competes lor Ihe kind of employeesinvoh'ed.
d. Special considerations in dclcrminins
allowabilit}'. Certain conditions require
special consideration Rnd possible limitations
in determining casU under Federal awerds
where aOlounls or types of compensotion
appear unreasonable. Among such condilions
are the following:
(1) Compensalion 10 members of nonprofit
or~anizi:lions, \rustre~. directors. a.~or.iates.
officers, or the immedinte f!lllliliee thereof.
Delermination ~hould he made Ihnt such
compensation is reQsnnnule for the aclulll
person..1 servic:es rendered rlllher than a
distriuulion of earnings in exces, of cos~.
(2) Any change in Rn o~a\lization's
compensation polir.y re~ulling in a
substantial increase in Ihe organi7:alion's
level of compenselion, particularly when it
wns concurrent wilh on increase in the ratio
of Government ewards 10 olher aclivities of
lhe organization or any change ia the
Irentment of allowaoilit)' of specilic Iypes of
compensation due to changes in Governmenl
policy.
e. Unallowable costs. Costs ....hich are
unallowable under other paragraphs of Ihis
Attachment sh31l nol be allowable under Ihis
paragriJph solely on the basiSlhallhey
constitule personal compensolian.
f. Fringe benelils.
(1) Fringe bene fils In the form of regular
compensation paid 10 emplo)'ces during,
periods of aulho~ized absences from the JOu,
such as vacation leave, sick leave. mililary
leave, and the like, are allowable provided
such cosls are absorbed by all organization
activilies in proporlion to the relalive amounl
01 lime or errorl aClually de\'oted 10 each.
(Z) Fringe benefils in the form of employer
conlribulions or expenses for social securily.
emplol'ee insurance. workmen's
compensation insurance, pension plan cosls
(see paragraph g. belowl, and the like. are
allowable provided such benefits are granted
in accordonce witb eSlablished .....rillen
organizalioD policies. Such benelils whether
treated as indirect costs or as direcl cosls,
shall be distributed to particular awards and
olher activilies in a manner cons is lent .....ith
the pallern of benefits accruill8 10 the
individuals or group of employees .....hose
salaries and wages am chargeable 10 such
awards and olher aclivilies.
(3J(a) Pro\'isiona for a reserve uOlder a sel!.
inSurance program fIX unemploymenl
compensation or workmen's compensation
ere allowable 10 lhe extenl lhal the
provisions represent reasonable eslimales of
the \i3bililiec for luch compensation. and the
types of coverage. extenl of coverage. and
rates and premiums would have been
allowable had insurance been purchased \0
cover the risks. However. provisions for self.
insured liabilities which do Dot become
payable for more Ihan one year after the
provision is made shall not exceed the
present ~'alue of the liability.
(b) Where an organization follows a
consiatenl poley of expenain8 actual
payments to, or.on behalf at employees or
:fQrmer employees for unemploymenl .
'Compensalion or workmen's compansatlon.
such.psyments are allowable in the year of
"paymenl with the prior approval of the
awarding agency provided Ihey are allocaled
10a11 activities of the organization.
(4) Costs of insurance on the lives of
lruslt'es, officers. or other employees holding
positions of similar responsibility are
ollowable onlv 10 the extenlthal the
insurance rep~esents addilional
compensation. The costs of such insuronce
when the organizalion is named as.
I
A-122:5
beneficiary are unallowable.
8. Pension plull costs. ., .
(l) Co~IS of the orgallizalton s penslOn pion
,,'hich arc incurred in accordance wilh the
established policies of lhe organization are
allowable, provided:
{al Such policies meel the lesl of
reasonableness;
(b) The methods of cosl allocalioh are nol
discriminatory; .
(cl The cost assigned 10 each fiscal year is
determined in sccordance with generolly
accented accounting principle~ as rre~(.ribed
in A~counting Principles Board Opinion No.6
issued by the American Instilule of Cerlified
Public Accounlants; ond
(d) The cosls a~signed 10 a given Iiscsl year
ere funded for all plan porliciponts wilhin six.
months aiter Ihe end of Ihot year. However,
increases to normal and pasl service pension
cosls caused by a delay in funding the
actuarial liability beyond 30 dol'S aher each
Qunrler of the year 10 which such costs are
assignable are unallowable.
(Z) Pension plan termination insurance
premiums paid pursuanllo the Employee
Reliremenllncorne Security Act of 19i4 (Pub,
L 93-400) are allowable. Late paymenl
charges on such premiums are una.llowable.
(3) Excise laxes on accumulated lunding
deficiencies and other penalties imposed
under the Employee Reliremenllncome
Security Act arc unallowable.
h. Incentive compensation. Incentive
compensalior. 10 employees based on cost
reduction, or efficienl performance,
suggestion awards, safely swards, elc.. are
allowable 10 the exlenl thai the overall
compensalion is delermined to be reasonable
and such cosls are paid or accrued pursuanl
10 an agreement entered inlo in good faith
between the organizalion and the employees
before the services were rendered, or
pursuanl 10 an eSlablished plan followed by
Ihe organizalion so.consislently as 10 imply,
in effec\' an agreemenllo make such
payment. .' .
'1. O~'erti..nc, extra pay shIft, and multlshift
premiums. See paragraph '1.7.
j. Severance pay. See paragraph 44.
k. Training ond education oosts. See
paragraph 46. 4 ' .
\. Support of salaries and wages: -
(1) Charges 10 awards for salaries. and
wages, whelher trealed 8S direcl cosls or
indirecl costs, will be bosed on documented
payrolls approved by a responsible officiallsl
of the organizalion. The distribution of
solaries and wages 10 awards must be
supported by personnel aclivity reports as
prescribed in subparagraph (2) below. except
when a substilule svslem has been approved
in writing by the Ih~ cognizanl agency. (See
pars graph E.Z of Allachmenl A)
(Z) Reporte renecling the distribution of
aclivity of each employee must be
maintained for all Blaff members
(professionals and nonrrofessionals) whose
compensalion is chargee, in whole or in parI.
direclly 10 awards. In addition, in order 10
support the allocR lion of indirect cosls, such
reports must also be maintained for other
employees whose work involves two or more
funcitons or activities if a distribution 01 theIr
compen~alion uelween such functions or
nc:livi lies is needed in the delermina lion of
'1
" I
Office of Management and Budget Circular A.122 (6/27/80)
the orgllnization's inc.lirect cost rale(s) (e.g.,
a n employee engaged part.time in indirect
cost activilies and perl. lime in a direct
function). Reports mainlained b~' nonprofit
organizations to satisfy Ihese requirements
muat met!tthe following standards:
(a) The repor18 must reDecl an afler'lhe.
fact determination of the actual activily of
each employee. Dudget estimates (i.e..
estim31es determined before Ihe servicp.s are
performed) do not qualify as support for
ch;'\rlles to awards.
(b) Euch report must accounl for the total'
activity for which employees arc
CQmpensaled and which is required in
fulfillmenl of Iheir obliga tions to the
organiza lion.
(r.) The reports must be signed by the
individual employee. or by a responsible
sup::rviaory official having first hand
knowledge of the activilies performed by the
employee. thatlhe distribution of activity
representa a reasonllble estimate of the
actual work perfo:med by the employee
during Ihe periods covered by the reports.
(d) The reports must be prepared at least
monthly and must coincide with one or more
pay periods.
(3) Charges far Ihe salaries and wages of
nonprofessional employees, in addilion to the
'supporting documentation described in
subparagraphs (11 and (21 above, must also
be supported by records indicating Ihe lotal
number of hours worked each day
maintaioed in confor:nance with Deparlment
of Labor regulationa implementing Ihe Fair
Labor Standards Act (29 CFR Part 516). For
this purpose, l..1e term "nonprofessional
employee" shall have the same meaning as
"nonexempt employee," under the Fair Labor
Standards Act.
(4) Salaries and wages oi employees used
in_meeting cost aharing or malching
requirements on eW3rds must be supporled in
the same manner. as salaries and wages
claimed for reimbursement from awarding
asencies.
i. Canlingency provisions. Conlribulions to
a contingency reserve or any similar
provision made for events the occurrence of
which cannot be icretold with certaint\' as to
lim'!, inlensity, or wilh an assurance or Iheir
::appening, are unallowable. The lerm
"contingency reserve" excludes self.
insu~ance reserves IEee paragraph 6.f.(3) and
16.a.(2)(d)): pension funda (see paragraph
6.(g)): and reserves for normal severance pay
(see paragraph 44.(b)(11.
6. ContriblJlio!lS. Contribulions and
donations by the organization to others are
unallowable.
9. Depreciaiion and use allowances.
a. Compensation for the use.of buildings,
other capital improvemenls, and t!quipmenl
t::: "nnd me:,' be made through use
?!l(l.....'an~es or depreciation. However. excepl
u pr'widr.d in paragraph r. below a
cnll'luii1ation of the two methods mav nol be
"~ed in connp.ction with a sin!!!e c;la~s of
fj'<l~t! a~~els (e.g.. b~:ildinSs. office equipment.
ct'lllputer equipmenL etc.l.
b. The compc:a!ion of use allc""'ances or
';',prI'Cia!iCln shall be based on the
..-.,!l!isi:ion Cosl of the assets invulved. The
"~Ol::silicn cost of an asset co::aled to the
orRilnizaticn by a Irird part~' shall be lis fair
m~rkel value atlhe lime of the donillion.
c. The compolation of use allowances or
depreciation will exclude.
(1) The Cosl oC land:
(21 Any portiun of the cosl of bui:dings and
equipment borne by or donated by the
Federal Government irrespective of where
litlt! was oriJ:inally vesled or where il
prr.senlly resides: and
(3) Any portion of the cosl of buildings and
equipment co!~lributed by or for the
or;lanization in satisCllclion o! 0 slatutory
m;'\lching retirement.
d. Where the use allowance method is
followed, the use allownnce Cor buildings and
improvement (including land improvements
such as Pdved :'larking areas. fences, and
sidllwalks) will be computed alan annual
rale not exceecing two percenl of acquisition
cosl. The use allowance for equipment will
be compuled at an ormual rate not exceedir.g
six and two. thirds percent of ncquisition cost.
When the use allowance method i9 used for
buildings, the entire building must be treated
os .B single asset: tne building's components
(e.g. plumbing system, healing and air
conditioning, etc.) cannot be segrel)uled from
the building's shell. The two percent
limitation. howev'!r, need not be applied to
equipment which is merely attached or
fastened 10 Ihe building but not pcr:nanently
fixed 10 it and which is used as furnishings or
decorations or lor specializ.ed purposes le,g..
dentist chain and dental treelment units,
counters, laboralorv benches boiled to Ihe
Duor, dishwashers,'carpeting, etc.). Such
equipment will be considered as not being
permanenlly fixed 10 Ihe builJir.g iC it can be
removed withoul the need for cosily or
extensive alterations or repili~s 10 Ihe
building or the equipment. E:jui~mentthat
meets Ihese criteria will be subject to the six
and two.lhirds percent equipment use
allowance limitation.
e. Where deprecialion melhod is Collowed,
the period of useful service (usefullile)
established in each case for usable capital
essets must take into consideration such
factors as type of construction, natare of the
equipment used. technological developments
in the particular prosram area. and the
renewal and replacement policies followed
for the the individual items or classes of
auels involv!!d. The method of depreciation
used to assign the cost of an IISset (or group
of auetsl to accounling periods shall reDecl
the pallern of consumplion of the auet
during its useful life. In Ihe absence of c1eRr
evidence indicating that the expectr.d
consumplion of Ihe asset will be significanlly
greater or lesser in the early portions oC its
u~efuJ life than in the laler portions. the
straight.line method shall be presumed to be
the appropriale method. Depreciation
mel.hods once used shall not be changed .
\Inles~ IIppro\'ed in advance by Ihe cognizant
FeC:p.ral IIgenc)'. When the depreci;,lion
method is introduced Cor application 10 assets
previously subject to a use allowance. the
combinalion of use allvwances and
cicprecialion applicable 10 such assets mu~t
no! exceed Ihe tolal acqui~ition cost oC the
:ls~ets. v.':'en the ;;erreciahon m(!thoc is used
f:'r huildinl:~. a butldillll's ~hell n:il)' ue
A-122:6
~l'gregn\ed from eAch building component
(e.g.. pl-.;mbing ~yslem. healing. and air
conditioning sl'slem. elc.) and each item
depreciated over its eslima'ed useCulliCe; or
the entire building (i.e.. the shell and all
components) mal' be trealed as a sir.!.!le Bssel
and depreciated over a single useful life.
C. When the depreciation method is used
for il particular class of assets, no
dcpreciation mA)' be allowed on any such
aS5ets that, under pllrasrnph e. above, would
he viewed as fully depreciated. However, A
reasonllble use allowance mllY be negotiAled
fur such assets iC warranted afler.laking into
cunsideration Ihe alTlount oC depreciation
pre\'iously charged 10 Ihe Government, lhe
estimated uscfullife remaining Al lime oC
negotiillion. the eCCect of any increased
mllintenaor.e charges or decreased efficiency
due to age, and any olher factors perlinent 10
..the utilizalion oC the assel Cor the purpose
conlemplated.
g. Charges for use lI11owance5 or
lleprecialion must be supportcd by Adequate
properly records and physical invenlories
must be taken at least once every Iwo ycars
(iI Slillialical sampling basis is acceplablel to
ensure Ihat assets exisland are usable and
needed. When the deprecialion melhod is
Cullowed. adequale de;Jreciation records
indicating the amount of deprecin\ion laken
cach period musl also be mainlained.
10. Donations
a. SCrl'ices received.
(1) Don3ted or volunteer services may be
furn:shed 10 an organization by professional
and luchnical personnel. consultants, and
other skilled and unskilled labor. The value
of these' services is nol reimbursable either as
a dirccl or indirecI cost.
(2) The value of donated servicesulilizt!d
in the performance of a dirt!ct cosl activity
shilll be considered in the delermination of
the organiz.ation's indire"ct cost ratelsl and,
lIccordingl~', sh311 be allOCA ted a
proportion'll!! share of applicable indirect
CoslS \l\'hr.n Ihe following circumstances exist:
I:J) The ag:;~egale \'alue oi Ihe servil:es is
material:
(b) The services are ~upported b~'-{l
signifil:ant al110lml of li.e ir-.lirecl costs. . .
incurred by Ihe orgnnizlllior.:
Ic) The dirr.ct cost aClivily is not pursued
prin\3rily for the benefit of the Federal
GO\'I,mmant.
[J)ln those inslanccs where Ihere is no
basis for determining Ihe fair market value of
Ihe sr.rvices rendCTed, Ihe recipient and the
cognizant agency shall negotiale an
npprupriate lliioc..lioo of inc.lirect cost 10 the
sen':ces.
(4) \"'here donated ~ervices directly bllneCit
a j;Toject supported by an a ward. Ihe indirecl
costs allocated to Ihe services ",;11 be
considered as a parI o! Ihe total COSti of the
project. Such indirecl costs ma)' be
reimbursed under Ihe award or used to meet
cust sharing or matching requiremenls.
(5) The villue 01 111e dona led services may
lw used 10 mect cost sharing or matching
rp.quirements under conditions d..scribed in
1'. !lnr.hment E. Ol\lB Circlllar ;-':0. A-li0.
\\'here dona led services ure treilled as
indirect CoslS. indircct cosl rales will
s"p:JrnIO: Ihe vallie of lhe donnlion~ so lhal
I
Management and Budget Circular A-122 (6/27/80)
enl ....ill not be made.
arkel value: of donated services
puled as follows:
for \'olun/eer services. Ra les for
shall be cons is lent wilh lhose
s paid for similar work in olher
Ihe organization. In cases ....here
f skills involved are not found in
tivities of the organiza tion, the
shall be consistent ....ith those paid
work in the labor markel in ....hich
lion competes for such skills.
es aono/cd by other
s. When an employer donales
s of an employee, these services
lued atlhe employee's regular rale
usive of fringe benefits and
-tsJ provided the services are in
ill for which Ihe employee is
id. If Ihe services are not in lhe
or which Ibe employee is normally
arkel value shall be computed in
with subparagraph {al aoove.
and space. .
ted goods; i.e.. expendable
operty/supplies, and donated use
ay be furnished 10 an organization.
f the goods and space is nol
Ie either as a direcl or indirect
alue of the donations may be used
I sharing or matching share.
Is under the conditions described
lent Eo OMB Circular No. A-110.
of lhe donations shall be
to accordance with AlIachment
'onations are trealed as indirect
ect cost rates will separate th,
e donations so Ihal reimbursement
mace.
oyee morqle. health. and welfare,
red.'ts. The cosls of house
s. health or firsl.aid clinics, and/
'ies, recreational activities,
, counseliog services. and olher
ncurred in accordance wilh Ihe
In's established praclice or cuslom
Jro\'ement of working conditions,
amployee rdations, employee
c employee performance are
Such costs will be equitably
~d to all activities of lhe
on. Income genera lPod from any of
:ilies will be credited to the cosl
less such income has been
y set over 10 employe~ welfare'
ons. .
r!ainmen! costs. CoslS of
:1. dh'ersion, social aClivities.
!s. and cosls relating Iherelo, sucl.
!OGt1ing, renlals, transportalion, and
are unallowable (but see
s 11 and Z5).
omen/ and a/her copital
res.
ed in tbis paragraph. Ihe following
~ Lhe. mcqninm; s~.UQrth below:
Jipmenl" means an article of
da ble tangible personal properly
Jsefullife of more than two veal'S
quisition cosl of $500 or mo;:e per
rganization ma\' use its own
provided thaI i'l alleast includes all
ci~ ble langible personal propert)" ~s
~rein.
(2) "Acqui!ition cosl" means lhe net
invoice unil price of an item of equipment,
including lhe cosl of any modifications,
attachmenls. accessories. or auxiliary
apparatus necessary to make il usable for the
purpose for which it is acquired. Ancillary
charges, such as taxes, duty, proteclive in.
Iransil insurance, freighl, and inslallation
shall be included in or excluded from
acquisition cost in accordance with the
organization's regular written accounling
practice~.
(3) "Special purpose equipla,enl" means
equipmcnt which is usable only for research,
medical. scientific. or technical aClivities.
Examples of special purpose equipment
include micrMcopes. x.ray machines, surgical
instruments, and spectrometers.
(4J "General purpose equipment" meDns
equipmenl which is usable for olher Ihan
research, medical. scientific, or technical
activities, whelher or not special
modifications are needed 10 make them
suitable for a particular purpose. Examples of
general purpose equipment include office
equipment and furnishings, air conditioning
equipmenl, reproduction and prinling
equipmenl, motor vehicles, and aulomatic
data processing equipment.
b. (11 Capital'expendilures for general
purpose equipment are unallowable os a
direct cost excepl with the prior approval of
the awarding agency.
(Zl Capilal expenditures for special purpose
equipmenl are allowable as direct cosls
providad that items with a unit cost of Sl000
or more have the prior approval of the
awarding agency.
c. Capital expenditur.ee for land or
buildings are unallowable as a direct cost
except with the prior approval of the
awarding agency.
d. Capital expenditures for improvements
to land. bL:ildings, or equipment which
ma lerially increase their value or useful life
arc unallowable as a direct cost except with
the prior approval of Ihe awarding agency.
e. Equipment and olher capilal
expenditures are unallowable as indirect
costs. However, see paragraph 9 for
allowabilil}' of use aliowances or
depreciation on buildings, capital
improvements, and equipment. Also. see
paragra~h 4Z lor allowability of rental costs
for land. buildings, and equipment.
14. Fines and penalties. Cosls of fines and
penalties resulting from violalions of, or
failure of lhe organization tocompl}' with
Federal. Slate. and local laws and re~ulalions
are unallOWable except when incurred 88 a
result of compliance wilh specific provisions
of on award or instructions in writing from
the awarding agency. .
15. Fringe benefits. See paragraph 6. f.
16. Idle facilities and idle capacill'.
a. As used in this paragraph the following
lerms hnve the meanings set Iorth below:
(lJ "Facililies" means land and buildings or
any porlion Ihereof. equipment indi\'iduallv
or collectively. or any other langible capita"'
assel. wherevcr located. and whelher owned
or limsed by the or;:aniza lion.
(:) "Idle facililies" means comple:telv
UJ1lllUJd facilities Iha: arr. e"'o(cess 10 Ihe'
or!':ani2.ation's current needs.
I:J; "Idle cn;Jnci:r" me:lns the unll~ed
I
A-122:7
capHcity o( parlial!y used f<lcilities. It is the
difference bel.....ecn that which s facility
could achieve u~dcr 100 per cent opera ting
time on a one-shift basis less opera ling
interruptions resulting from time lost for
repairs, Betups. unsal:sfaclor1' malerials. and
oth~r normal delays. and the exlent to .....hich
lh~ facility was aCIDally u,ed La meet
dem:lnds durin8 the accounling period, A
mullishift basis may be used if it can be
shown lhat this amount of usage could
normally be expecled for Ihe type of facility
involved.
(4) "Cosl~ of iole facHities or idle capacity"
mcnns cost~ such as maintenance. repair.
housin!:. renL and o!.her relaled cosl:l; e.g..
properly taxes. insurance. and depreci,ilion
or use allowances.
b. The cosls of idle facililJes are
un'lllo\~able exceptio the exlenl tho:l:
(1) They arc unnece~~ary to me~l
nuctuations in worlJoad; or
(2) Although not necessary 10 meel
nuClualions in worlJoau. !.hey were
n~cessary when acquired and arc now idle
because of changes in program requiremenls,
efforts to achieve more economical
operalion~, reorganiz.alion, termination. or
olher causes which could nol have been
reasonably (oreseen. L:nder the exception
st~ Icd in this subparagraph. costs of idle
fllcililies are allowable for a reasonable
period of lime, ordinarily nolto exc~ed one
year. dt1pending upon the iniliative taken to
\lSC. lease. or dispose o( such facilities [bul
see paragrAphs 47.b. and d.l.
e. The cosls of idle capacity are normal
cosls of doing business and ore a faCIOI' in \he
nom~al nuctualions of usage ar indirect cosl
ra les from period to period. Such costs are
allowHble, provided the capacity is
reasonably anticijlB If:d to be r.ecessary or
was originally reasonabie and is sebject to
reducl:nn or elimination by sublelting.
rcnling. or sale. in accordance with sound
business. economics, or security praclices.
Widespread lcie r.apacity throughout an
enlire facilily or among a group of asseLS
having substantially the same funr:lion may
be idle facilities. .
17. hll/";,.mdcnl rescC1{Ch alld dav~Jopmen:
IReser"'"d\. -
18. Insuronce and indemnification. I
a. Insurance incledes insu~ance ....hich the
organiza tion is required 10 carry. or which is
approved. under the terms of the .:ward and
any other insurance which Ihe or:;nnization
maintains in connection with thellenera!
condecl of iu operations. Thi~ para!!raph
dces not apply 10 insurance which represenlS
fringe benefits for emr10yees (~t!e pa~a!iraph
6J. a~d 6.g.(2)).
(1) Costs oi in.::~ance ~!quired or
ar:'proved. and maintained.. pllr~uiJnl 10 the
award ar~ allowable.
(:) Costs of other ins'Jrar.ce mHint'lined b\'
the ofg.lnization in connectinn with lhe .
p!:neral conduct of ils opel'ations are
ulluwable subject to the followin!! limitalions.
[a) T)'p~s nnd exlenl of covernge shall be
in accor::Jance ",-jth so,-:\d busine~~ praclice
snd thc r~tes nnd premiums shall be
r'?asonabie uncc:r lhe cir:;umstanC!'5.
(bl Cr,~:~ allowed lor bUSiness in:err\l~tion
or otnl!r similar in5urance shAll be li:mtcd 10
I
Office of Management and Budget Circular A-122 (6/27/80)
ncrntilllion and in ~r.ticip~linn of th~ ,"ward
\\'nl'll' sULhco~ts i~ necessary 10 comply wilh
:he prupMed delivery schedule or period of
l'erform;loce. Such cosls Rre allowaule only
10 ;he e:,<tenl lhallhey would have been
llilllwable if incurrl~n olter Ihe dHle of the
,:",:,::'.1 Hnd only with the wrillen ol'prov,.1 t:C
lhe ~w..rdio;; nscn~r.
34. IJrn{cssillnal sert'icc costs.
a. Costs of prof('~sionnl and consultnnl
services rendereJ by persons wbo are
r.:''''llters of a porticul:\r profe~sion or po~~e~s
a ~1l:ld:1I skill. <lnJ who arc not officers ur
l'~;liuyecs of tll!: organization. arc al!owable.
,;;bjccllo U, c. ond d, of this p.;ragraph when
rPod stll.aL.lein r'Jo tion .to thc scrvic"s
rendered ano ,vhe!l not conlingcnt upon
rt:coverv of the costs frum the Go\'crnment.
b. In del::rming the allowauilily of r.osls in
s p~rtit.:ular Cllse, nu singlc factor or any
spccial combina lion of faclors i6 necessarill'
determinllti\'e. However, the following
fal:lnrS are relevant:
111 The noturc and scolJe of Iheservice
rellolered in rei 0 tion 10 lhe service required.
121 The neces~ily of conlracling for Ih~
ser\'ice. cnnsidering the organi:z:alion's
c:\pahililY in the pnrticulnr area,
(:J) The past pallern of such costs,
parlicularly in the )'ears prior 10 Go....ernment
awards.
. (4) The impact of Government awr.rds on
lne organi:z:ation's business (i.e., .....hat new
problems have arisen).
(51Whelher the proporlion of Government
\York to the organi:z:ation's total business is
su,;h as 10 infiuence lhe organization in favor
of incurring the cosl. parliculariy where lhe
services rendered are not of a continuing
nalure and have little relationship to work
under Governmentl!ranl6 and controclS.
(6) Whelher the service can be performed
more economically by direct employmenl
ralher than conlracting,
(7) The qualifications of Ihe individualllr
concern rendering the service and Ihe
cuslomllry fees charged, especially on non.
Government awards.
[01 Adequacy of the contractual agreement
lor Ihe service (e.g.. de6cription of the service,
eslimale of time required, rate of
compen~ation, and termination provi;ions).
c. In tlddition to Ihe laclors in porat:raph b
above, re:niner fee6 to lhe allowable musl be
supported by evidenc:e of bona fide services
a\'oilable or rendered.
d. Cosl olli!gRI. accounlin!'. and consulling
~rr\'ices, and related C06ts incurred in
conn'!ction with defense of anlitrust 6uits;
nnd the proseculinn of c1ai.:ns aRains! the
Guvernment, are llnllllownble. Cosu of legal.
Rc:;ounling tlnd consul:ing services, and
relo1ted costs, incurred in connection with
patcnt ill(ring~ment litigation. orgRnization
ilnd reorgnnization. are unallowable unless
other.....ise prcwided fQL in the eward (bul Bea
parll!!raph 47el.
35. Profits nnd losses on disposition of
depreciable property or other capital assets.
a. (1) Gains and los~t's on sale, retirement,
or other disposition uf Depreciable property
shdl be incl:Jr\ed in the year in which they
oc::;ur as crecJ:'~ or charges to cosl grouping(s)
in whicn Ihe depreciation applicable to such
property was included. The amount :f the
~"in or loss to be inr.luden as a credit or
ch<trge 10 the Rppropriate cost ~r(ltlping(s)
sil~:1 ue l!le diliefcnce uetween the amount
rl'nlized on lhe property and lhe
undcpreciRted basis of the properly.
(2) Gains and losses on Ihe dispositiun of
ch'f.recinble property shall not be recogniz.ed
o~ Il.separale credit or charge under the
Iniluwing conditions.
(iI) T!!e l:lIin or 106s is processed lhrou!:h tl
l.kprccialiun rc:ser\'e accounl and is rl:necled
ill the Jellrecia!ion 1l1l0watJie under
pilfo):ro pia 9.
(hI Thc properly is hiven in exchanf:e as
pari of the purcha~e price of a similar ilem
ann the gilin or 105s is lnkcn into Ill:count in
de~er11lilli\lS the deprecialion cost basis of llae
new item.
Ic) A loss results from the f\lilure 10
maintain permissiule insurance, e~cepl ns
otht!nvise pr.wided in pllragraph 16.a.(3).
(ell Compensalion for the use of the
pmperl)' was provided through use
allo.....ances in lieu of depreciation in
accordllnce with paragrAph 9.
(e) GlIins and lusses arising from mass or
extraordin:Jrv salt'5. reliremenls, or other
disposilions ~hall be considered on a case.
bv-ca~e basis.
'b. G,.ins or losses of any nalure arisinG
from the sale or exchonge of property olher
than Ihe property covered in paragrnph o.
above shall be excluded in computing aw:\ra-
cusls.
35. Public infarmatiun sen'ice costs.
a. Public information servicr. costs include
the cost associaled 'wilh pamphlets. news
releases, and other forms of information
services. Suc:h costs are normally incurred to:
(11 Inform or inslruct individuals, groups, or
the general public.
(2) Inleresl individuals or groups in
pl1ilicipaling in a ser':ice program of the
01 gs ni:z:a tion_
P) Disseminate Ihe results of sponsored
and nonsponsored aclivities.
b. Public info~ation service cosls are
allowable as direct cosls with the prior
approval of thp. swarding ae:cnc)'. Such cosls
Die unallowable as indirect costs.
37. Publica/ion and printing cost~,
a.Publication costs include the cn~t; of
printing (including the proce~'es'Of
composition. plale-makin&. press work,
binding. and the end products produced by
8\1ch pro:essesl. distribution. promotion,
:oa jling. and gencral ha ndling.
b. If the~r. costs are nol identifiable with a
particular t;osl objcctive. they should be
allocated as indirect costs 10 all benefiting
activities of lhe organiz.ation.
c. Publication and printing costs are
unailowable 115 direct costs excepl with the
prior approval of the aWArding agency.
d. The cost of page charges in journAls is
addressed pAragrAph 28.
36. Rearrangement. and al/eratian costs.
Costs incurred for ordinary or normal
rr.arrangement and alteralion of faciiities are
alluwable. Special a,rrangement and
alteration costs incurred speCifically for Ihe
project are lI110wable with the prior approval
01 the awarding Il.gency.
39. Reconversion costs. Cosls incurred in
the rostoration or ~habllltltion of the
orgonw.tion's fodlltiC1l to approximately the
I
A-122:9
6ame condition exisling immedialely prior to
commencement of Government swards, lair
wear and tcar excepted, lire allowoble.
40. Recruiting costs. The follo.....ing
recruiting costs are allowable: cosl of "help
.....anted" advertising, operating costs of an
employment office, costs of op-erating an
educntional te6ting program, travel expenses
including lood and lodging of employees
.....hile engaged in recruiting personnel. travel'
costs of applic.onls for ioterviews for
prospective employment, ond rc>lor.Jlion C06tS
incurred incident \0 recruilmenl of new
employees (~ee paragraph 41cl, Where Ihe
organiz:alion uaes employment agencies,
costs not in excess of standard cnmmercial
rntes lor such service~ are allnwAble.
41. neJoco/ion casU.
B. Relocation costs ore costs incident to the
permanent change of dUly assignmenl(for an
indefinite period or for a slilted period of not
less than 12 months) of an exi~li:1g employee
or upon recruitment 01 8 new employee.
Reloc.ation costs are allowuble, 6ubject to lhe
limitation described In paralirophs b, c, and d.
below, provided that:
(1) The move Is for the benefit of the
employer.
(Z) Reimbursement to the employee is in
Dccordance with an esl:iblished written
policy consislently loll owed by the employer.
(3) The reimbursement does nol exceed the
employee's octual(or reasonably estimated)
expenses.
b, Allowable relocation costs lor current
employees are Iimiled 10 the !ollowing:
[11 The cosla of transportation of the
employee, membel"9 of his immediate familr
:\nd his housel-old, and personal effects to the
new location.
12l The CoslS or finding a new home. such
as advance \rips by employees and spouses
10 locale living quarlers and lemporary
lodging during the transilion period, up to a
maximum period of 30 days, including
advance lrip lime. .
13] Closing cosls. such as brokerage, legal.
or1G appraisal fees, iDcidentlo the disposition
of the employee's former home, These costs,
together with IDose described in (4) below,
arc limited to 8 per cent of Lbe'sales price of
tne employce's formlV home. .-
(4) The continuing CoslS of owoership of
the vacant fonner home after Lbe seltlemenl
or lease date of the emplo)'ee's new
permanent home, such as maintenance of
buildings and grounds (exclusive of fixing up
expense61, utilities. taxes, and property
insura nce,
(5] Other neCel6Bry and reasonable
expenses normaliy incident to relocs tion.
such as the coalS of canc:eUlng an unexpired
lease, disconnecting and reinstalling
household appliances, and purchasing
insurance against loss of or damage6 lO
personal property. The cos.t of cancelling an
unexpired le88e i. limited 10 threa lime6 the
monthly rentaL
Co. Allowable relocation C06U for new
employees are limitad to thoae described in
(1) Bnd (2l of paragraph b. above. When
relocation cosl6 incurred iocident to the
recrui~ment of new emJJloyees haye beeo
&Ilowed eilber o.a a direct or iRdirect cost aDd
the employee roeigns for reasons within hi.
I
Office of Management and Budget Circular A-122 (6/27/80)
control within 12 months afler hire, the
organiz..alion shall refund or credit the
Government for its share of tbe cost.
However. the costs of lravelto an overseas
location shall be considered travel cosls in
accordance with paragraph so and not
relocation costs lor the purpose of this
paragraph Ii dependents are not permitled at
Ihe location for any reason and the cosls do
not include cosls of transporting household
goods. .
d. The following costs related to relocatlCm
are unallowable:
(1) Fees and othr.r costsassocipled with
acquiring a lIew home.
(2) A loss on the snle of a former home.
(3) Continuing mOrlS;,!;:: principal and
inter::st paymenls on a home being sold.
(4) Income taxes p(lid by 6n employee
related 10 reimbursed relocillion cosls,
42, Rentol CClstS.
a. Subject to the limitations describeci in
paras~aphs b, through d. of Ihis paragraph,
rental costs are allowable to the extent that
the rales are rea~onable in light of such
factors as: renlul.coSIS ofcomparuble
p~operty, if any: market conclilions in the
area: alternatives <lvailable: 'and the type, life
expectancy, condition, and value of lhe
property leased.
b. Rental costs under sale and leaseback
arrangements Rre allowahle only up to tbe
amount that would be allowed had the
organization continued 10 own \he property.
c. Rental costs und!!r less-Ihan.length
leases are allowable only up to \he amount
lhat would be allowed had title 10 the
p~operty vested in the organization. For this
purpose. a less-than-arms-!ength lease is one
under which one party 10 Ihe lease agreement
is able to control or substantially innuence
\he actions of Ihe other. Such leases include,
but are nOllimited to those between (i)
divisions of an organization: (ii) orgonizations
under c:ommon control\hrougb common
officers, directors, or members: and (iii) an
organization <lnd a direclor, \ruslee, officer,
o~ kl!Y p.mployee of the organ~ation or his
~-nmediate famiiy either directlJ' or lbough
corporations, trusts. or similar arrangements
in which they hold a controlling interest.
d. Renlal costs under leases .....hich create a
material equily in the leaseu rrop..rlv are
..Bowable only up 10 the amour.: thul would
be a!lowed had Ihe ori;anizatiun purc:hoscd
the property on the date the lease agreement
was execuled: e.g., dep~eciation or use
allowances. mainlenance. taxcs, insurance
but excluding interest e:ocpense and oilIer
unallowable costs. For this purpose. a
material equity in \heprvperly exists if the
iease in noncanceiable or is cancelable o::!v
upon the occurrenCe of some remole .
contingency and has one orlT)ore of the
iollowing characteristics:
(1) The organizalion hos lhe right to
purchase Ihe properly for a price which althe
beg'nning of \he lease appe<lrs 10 be
!ubslantially less Ihan Ihe probable fair
;:;ar~et value at the time it is permitted 10
purcnase Ihe property (commonlv called a
iease with a bargain purchase option):
tZ) Title to the properly pasoes to Ihe
~rsanization at some t:me during or after the
iease perioc!:
:3) The term of the lease (iniliallerm pius
periods covered by bargain renewal oplions,
If any) is equal to 75 per cent or more of the
economic life of Ihe leased properly; i.e., the
period the properly Is expected to be
econor.licall~' usable by one or more users.
43 noyol/ies and other cas's for use of
po' "r and copyrights.
a. J ;yalties on a patent or copyright or
amortization of Ihe cost of acquiring by
purchase a copyright, patent, or righu
thereto, necessary for the proper performance
of the aW<lrd are. allowable unless:
(1) The Governmenl hilS a license or the
right 10 free use of the p"tent or copyright.
(2) The patenl or copyright hns been
adjudicnled 10 be innlid. or has been
administralively delermined 10 be invalid.
(J) The palent or copyright is considered to
be unenforceable.
(4) The patent or copyright is expirr.d.
b. Special care should be exercised in
determining reasonableness where the
royalties may have been arrived at as a res"lt
of less then arm's length bilrgainins: e.g.:
(1) Royalties p<lid to persons. including
corporations, affilioted with tht! organizalio::>n.
(2) Royalties paid to unaffiliated parlies,
inciuding corporations, under an agrcement
entered inlo in contemplation that a
Government awerd would be made.
(3) Royalties paid under an agreement
entered into after an award is made 10 an
organization.
c. In any case involving a pa lent or
coprright formerly owned by the
organizalion, \he amount of royalty allowed
should not e:occeed \he cost which would have
been allowed had the organizalion retained
title thereto,
44. Severance pay,
a. Severance pay, also commonly referred
loas dismissal wages. is a payment in
addition 10 re~ular salaries and wages. 'uy
organizations to workers whose employment
is being lermina ted. Costs of severance pay
are allowable only to the exl!!nt thai in each
case. it is required by (i) law. (ii) employ!!r.
employee agreemenl, (iii) est::lblished policy
tha I eon:;litules. in effect. an implied
agreement on the organi::ation's part, or (iv)
circl.:Jnsta:lces of the particulor employment.
b. Costs of sever:lnce p:lyments are diviceu
into two eale80~ies as follews:
(1) AClual normallrunover seVeril:1Ce
j:oym!:nls shall be allocated to all ar.li\'ilies:
0:, where thl! orsanizil tion provides for a
. rr.~erve for normal severanc;'!s such method
will be acceplable if lhe charge 10 current
operati'Jns is rr.asonal:,le in light of payments
aClual!)' made for normal sev~rances over ~
representative past period. and if amounl~
ch~r62d arl! allocaled to all activilies of the
organiza lion.
(2) Abnormal or mass severance pay is of
such a conjectural nature Ihal me<lsurement
of costs by means of an accrual will n~t
..chieve equity to bolh parties. Thus. accruals
for tnis pu'pose are not allowable. However.
th~ Govcrnment recogni7.c~ i:s obligalion to
partir.ipale to the extenl of ils fair shnre. in
iln\' specific pa\'ment. Thus. allowilbililv will
be 'eonsidered ~n a case.by-case basis iOn lhe
event of occurrenr.e.
';S. Speciali:-.ed sen'ice facilities.
il. The costs of service~' provided by h:J'h::'
I
A-122:10
complex or ~pecializr.d facilities ojlerlllo:d by
lhe orgonizallon. such as electronic
compulers and wind lunnels, are allowable
provided the chal1les for \he services meet
the conditions of either b. or c. of Ihis
paragraph and. in addition. take into account
any ilems of inco,me or Federal financing that
qualify as applicable credits unuer p:tTagraph
A.5. of Attachment A.
b. The costs of such services, when
material. must be charged directly to
applicoble lIwurus based on aclual u.~age of
the sr.rvices on the basis of a schedule of
rates or established methodology thai (i) docs
not discriminnte against federally supporled
nctivilies of the organizalion. including usage
by the orgnnizalion for inlernal purposes, and
Iii) is designed 10 reco\'er only li,e aggregute
co~ts of.lhe services. The costs of each
service shall consist normally of bolh rls
dircct r.osls ~nd its allocable share of <III
inc!irer.1 COSIS. Advilnr.e agreements pursuant
10 parusraph A.5. of Attuchmenl A arc
parlicularly important in this situation.
e. Where lhe costs incurred for a service
Rre not material. Ihey may be allocated as
Indirect costs,
40. Taxes.
3. In general. taxes which the orgilnization
;s required to pay and whi:;ll are paid or
acr.rued in ac::ordunce with generally
accepted accounling principles, and
payments mnde 10 local governments in lieu
of taxes which are commensurate with the
local govern men I ~ervices received are
allowable, except/or (i) taxes from which
exemplions are available to lhe organization
di~ecli\' or which are availiJble 10 the
orguni~ation based on an c;>.emption affllrded
Ihe Governmenl and in Ihe latter case when
the awarding agency m..ke~ a\'ai!able the
o~ce!sary exemplion certifica les, (ii) special
aSGes~men!s on lund which rcpresent capilal
improvements, and (iii) Federal income {axes.
b. Any relund of I~.xe&, and any p<lymenl 10
the organization of interesl therc'Jn. which
wcre allowed as award costs, w"l be
r.reuilcd eilher as a cosl reduction or cush
refund, as appropriate. to Ihe Governlllen:'
47. Termillution costs. Terminllli~lII of
;'Jwarus generally give ris" 10 the incurr..ilcc:
of c031~. or the need for speci.lllrealmenl of
costs, which would not have Krisen hod the
award nol been lerminulecL Cost principles
c'lvering these items orr: set forth below.
They arc to be uSI:d in conjunclion wilh the
'othr.r provisio:1s of Ihis Circulnr in
lerminalion situalions,
II. Common items. The cu~1 of items
reilsonaLlly usable on Ihe organi:Galion's ether
work shall nol be a!lowable unlr.ss the
orJFlr,izolio!'l submits eviduncr. thai il would
nOI rc:ain such items at cost without
5U5tnining a loss. In deciding whelher such
items are reasonilbly usable on olher work of
lhe organization, Ihe awardil:g agency shouid
con~iuer the organi:Gulion's plans and orders
for current and scheduled aCliv!ly.
Conlemporaneous purchases of common
ilems by the or~llOlzation shall be rr.!<arded
uS evidence Ihal sllch items are reasonOlbly
usable on the orgunizalion's :lther work. Any
ar.cept:tnce of common ilems ItS aliocilblr. 10
the te~minaled portion of the aworcshilll be
limited to lhe r.xll~nl Ihill thl' (""Jnlili,,~ of
I
OffIce of Management and Budget Circular A-122 (6/27/80)
such items on hand. in transil. and on order
8J'l! in eXC~S 01 the reasonable quantitative
requ.iremenl3 of olher work.
b. Cosu continuing after terminalior.. U in
a particular case, despite all rusonabie
efforts by the orga.cli%.ation. certain costs
cannol be di.con tinued immediately alter the
effective dale oC lermination. such COsLS are
generally allowable within the limitations set
lorth i=1 this ClrollIlI, except that any such
costs continuing alter termination due 10 the
negligent or willful lailunt 01 the organization
to discontinue such costs shall be
unallowable. .
Co Loss of L'seful value. L.oII 01 useful value
01 5reciallooling, machinery and equipment
wi<,-h was not charged to Ibe BWllrd as a
c;l~..al expenditure is generally allowable if:
i: , Such speciallooling, rr.ac:.inery, or
eq. :;lDlenl is not reaaonably c<lpable oi use in
tb:. ..;U':er work 01 the organ1:::.ation.
(::1 The interest o{ tile Govemme:1t is
;::r ~-:I?d by trallsfer oC tille or I.y other
","'.I:1S deemed appropriate by the awarding
a:~' ney.
Ii. Rental casu. Ren:al costs under
l:~l,xpired leases are generally allowable
.... ;'~re clearly shown to have been
n...sonably necessary {or the penormance of
I!,,, terminated award less tbe residual value
or such leases. if (i) the amou:ll of such rental
cj..im~d does nol exceed the reasonable use
val:.Je of the property leil5ed Cor the period oC
tl:~ ~w:trd and such fu.-ther period as may be
rp'.:.;I)\:..ble. and (ii) the organization makes
all reasonable effort.s to lerminate. assign.
sellle, or otherwise reduce the cost of such
lease. There also cav be inc:!uded the coat of
ailerations 01 such le'ased property, provided
such alterations were necesaarj' for the
penormance o{ the award.. and of reasonable
reslor::;tion required by the provisions uf the
lease.
e. Sp.lllement eXpenSB!. Settlememt
expenses induding the lollowing al"l'
gen~rally allowable:
(1) Ac::ounting. leoaL dmcal. and similu
costs reasonably necessary ior.
(a) The pre?4Tation and'pn:sentolrion to
awardin; agency ol setllemenl claims and
~u?porting data with respee! to Ihe
lerr:lina ted portion 01 the s ward. unless the
termination is lor delaulL (See parHs:raph 4.8-
oi Attachmenl 1.. OMB C1rcular No. A-llO:
and
(0) The termination and settlemenl oC
subawaro.,.
(2) Reasonable cosU lor the storage,
lranspor'l8tiol'_ protection. and disposition of
property provided b}' lhe Government or
acquired or produced lor the Bwate: exceot
wheo grantees are reimbursed lor disposili
at a predetermined amo=t in accordance
with Attachment Nof OMB Cir::ular A-nO.
[31 Indirect costs related 10 s>llaries and
wages inc:urn:d as settlement expens~ in
5~bparagraphs (1) snd (2) 01 this paragraph.
Nqrmally. such indirecI cosl3 shall be limiled
10 fringe beneiil3, occupancy cosl. ace
immedia Ie supervision.
C. Ciaims u.;,a'er subawards. Claims u.,der
suo awards. including the allocable portion of
claims which are common 10 the award. &nd
to other work of the organi:::.ation are
generaUy BUowable. An ap?TC?riate share 01
tha organization's indirect expense may be
allocated to the amoW1t of seltlements with
5ubcontraclorlsubgraoteel: provided that the
amount allocated is otherwise consistent
with the buic guidelines contained in
Attachment A. The indirect expense 50
allocated shall exclude tha same and similar
coils daiJ:ned directly or incii.reclly as
setllemeot expenses.
48.. Training and educot.ian COIU.
&. Costs of preparation and maintenance oC
a program oC in!tI'Uction including but not
limited 10 on.th&-job. classroom. and
a pprenticeship training. designed to increase
tha vocational effectiveness of empluyec~
Including training materials. lextbooks..
salaries or wages ol trainees (excluding
overtime compensation wlticb might aris.!
then:lromJ, and (i) salaries oC the director oC
tra.ining and stal! wben the training program
is conducl!:d by the organization: or {iiJ
tuition and lees when the training is in an
inatitutiOD Dot operated by the organization.
are allowable.
b. Costs of part-time education. a t an
undeJ6Tllduate or postgraduate cotJeg-e leveL
including that provided at the organization's
own lacilities, are alloweble only when the
course or dew-ell punued is relative 10 the
field in which the ecployee il oow working
or may reasooably be expec\.e{j 10 work.. and
~ limiLed to:
(1) Traini~ materials.
(21 Textbooks.
'(3) Fees charge~ by the ttdocatiun:.l!
institution.
(41 Tuition c.barged by the educational
in3titution. or in lieu of tuition. instructOr:!'
salariea and the r:elaled share of indirect
costs of the educational in3titutian to the
e;or;tent that the sum thereof ia not in excess oC
the tuilion wlticb would have ben paid to tha
participating educational institution.
(5) Saiaries and related coal' of inslIuCtors
wba are ecployees DC the organizatioa..
(6) Straight.time compensation of each
employee lor time 'pent attending classee
during werking hours oot in excess of 156
hours per year and only 10 ilie extent tba t
circums~n= do not permit the operation oC
classes or attendance at classes after ~
workin~ hours: otherwise such compellSation
is unallowable.
Co C.Jsts of tuition. fees. trainbg materials,
and textbooks (but not sub,istenc&. s:.lIaT)'. or
any other emoluments) in connection with
full-time education. including thai provided at
the organization's own facilities. at a
postgraduate (but nol undeJ6Tllduate) college
leveL are allowable only when the course or
des:ree pursued is related 10 the field in which
the empioye.: is now working or !:lay
reuooably be expected to work. and only
wbere the cosLS receive the prior approval of
the awarding agency. Suc.i:1 costs are li=iled
10 the coilS attrihutable to a total period not
to excee::! on'! schuol year lor each employee
so trained. In unusuill cases the period IDa y
be extended.
d. COSIS of atlendance 01 up to 16 we!:k.3
per employee per year at specializl'd
program. specifically de5igned to enhance
the effectiveness oC ex/!CUoves or ma=ger3
or to pn:pare empioyees lor sucb positions
are allowabie. Such costs LOclude enrollment
)
A-122:11
fees, trBining materiala. textboolu and
related c.barges, employees' .alaries.
subsisteoce. and traveL COSLS allowable
under thi. puagraph do not include tho~ for
co~s that are part oC a de:gr-ee--<>rienled
curric:.Jurn. which an: allowable only \0 the
exlenl set forth in b. and c. aoove.
e. Maintenanca expen.se. and normal
depreciation or lair rental on {acilittes
owned or leued by theorganiz.ation {or
training purposes are allowable to the extent
s~t lortb in paras:raph. 9, z.:. and 42.
I. C:.mtributiona or dcnat10ns to
educational or training inHtttutions, includJ.n~
ti;e donation of lacilities or otber propertie~
a rill icholanhip' or lellowships, are
unaliowable.
g. Training and education cosls in excess 01
lhose otherwise allowable under parasraphs
..b. and c. of this para!;T"Bph may be allowed
with prior approval oCthe awarding agency.
To be considered {or approval. the
organi:z:alion must demonstrale that 8uch
CUS13 are consistenlly inC\llTCd pursuant to ao
eSI<lblished training and education prog:nun.
and that the course or degree pursued is
relative to the !ield ill wltich the employea is
now working or may rusonebly be expected
10 worY.
49. TroI1sportatian casu. TrODsportation
CUSIS include freighl. express, cartage. ODd
p06lage charges relating either to goods
purchased. in proces.. or delivered. These'
coalS are allowable. When 8Uc.i:1 costa can
readily be identiJjed with the items involved.
they tnay be directly cbarged as
IrOlnsportalion cosu or added to the cost of
such items (see plU"J!.gr-aph :z.:J). Where
identificalion with the materials received
canno: readily be made. tra.n3portation costs
may be chllI1led to the appropriate indirect
cost ac::ounts if the organization follows a
consistenl. equitable procedure in this
re, pe':.:L
SO. Travel cost.3.
a. Tra vel cosls are the expenses for
transportation. lodging. su~islence. and
relaled ite:ns incurred by eoployees who ~
in tra vel staro. on official business 01 the
organizlltion. Travel cosU ~ allowable
subject to paragraphs b. iliro~g.b e. below.
wh~n Ihey are ~ectly atlIibutaoie to specific
wurk under an award or.are in~ in the
normal course ol administration of the
org:Jni:z:alion.
b. Such COltS may be charged on an actual
bllsis. on a per diem or mileage basis in lieu
of aClual cosU incurred. or on I combinatloD
of the tWo. proTided the method u.sed resulu
in charge, consistent with those normally
allowed by the organization in its regular
opera lions.
Co The d.i!Ierence in c.:::st between fir-st-dau
air ac::o=oda tioru and ~SI thaD fir&t-c!all
air accommodations is unallowable except
when len than fLnt-dall ai:
accoO'JDoaa tion.s &."": not reuona blr
available to meet necessary mission
requi.--ements. such aa where leu than fint.
clus accommodations would (i) require
circuitous routing. (iI) require travel during
unreaeonaoie houn. (iii) gnatly inc:-eaae the
duralion of the night. (iv) result ::1 addHional
COSlS which would oriset the transoortation
5a\.;~g', or Iv) offer I\cco=odatio'ns whie::
.'
+-
Jtflce of Management and Budget Circular A-122 (6/27/80)
,:-e not reasonably adequ.eta for the medlcal
.,~cU oC the tr1I velC1'.
C: Necessa.ry and T8'illOnabte COlts of
a!:lily movement.. and personnel movecents
;{ a special or mus nature are allowable..
'unuantto paragrupla 4{) and 41, aubj~ to
,ilocation on tbe buis ol work or time period
Je::efited when appropriate. Advance
!e::-eemenls are particularly impo:tanL
e. Direct charges lor loreisn travel costs are
i!lowable only wben the travel bas received
~nor approval of the awarding agency, Each
'e;:Jarate loreisn trip mUBI be approved. For
:u:.,oses of thia provision. foreign Ira vol is
.:eiilled as any !ravel oUUlide of Canada and
.:1e Uniled Slales and it, territories and
:lossea&ions. However, for an organization
.oeated in foreign countries. tbe lerm "foreign
:.avel" means travel OUUlide tbat cOW1lry.
:::rcuJar, No. A-1Z1)
.;aachment C
Socprofit Organi.z.atio~ Dot Subject to lhi.I
::::.-::u1.a.r
....e.ospace Corporation. El Segundo,
Calilornia
."_-;onne Universities Association. Chicago,
Iliinois
Associated Universities', lncorporated.
Washington. D.C.
....ss oci a led Universities Cor Researcb. and
A.stronomy, Tucson. ,A..rizona
....lomic Casualty Commission. Wasb.inglor~
D.C.
:3atu:lIe Memorial Institute. Headquw1ered in
Coiwnbus. Ohio
:::ook..'18vec National L.aborator}', Upton.
New York
Center ior E:ner;)' aDd E.:"lvironmeotal
Research l~FR), (University ol Puerto
Rico)
Co:r.:noaweeltb olPuerto Rico, Charles Sta;!c
D.aper Laboratory, lncorporaled
:a=:brids;e. Ma!laci1Uselts, Comparative
,.l..r.imal Research L.aboralor}' (CARL)
~J:'Ii\'ersily or Tennessee), Oakridge.
7er.n~~6t!e
::::\'i.on.-nental loslilute or Michigan. 1\n."1
t\rbo.. Michigan
~a::!orc E.avironmental HealtbFouodation.
R.ichland, Washington
L"7 Rl!search Institute, Cb..ic:ago. D1inois
L~~lilute ior Deiense Anllly:o;is. Arlingl0n.
ViTiiinia
bstitule of Gas Technology, Chicago. lllinDis
~l:dwt!st Research lnstitute. HeadouaMered
in Kiln58s City, lvussoun '
~,~itre Co~poraticn. Bedford. Mauachusetts
~,~ontana E.ne!'l;j' Research and Development
In,titute. me.. (MERDIl, Butte. Monlana
~'alicnal Radiological A3t:'tlnomy
Observatory, Green Bank. West Virginia
Cakridge Associated Universities. Oakrid8e.
Tennessee
?:-oject Management Corporation. Oakrici;c..
T er.:Jessee
?a:ld Corporation. Saota Monica. Calilornia
?esearcb Triangle l."1stitute, Researc.'1
T:iangie Park. North Carolina
?ive:-side Research Institute, New York. New
York
S-anci.:a Corporation. Albuquerque. New
\.J'l"!'!':......
So u tb e ru Rese a.rc.l1lna tl tu re. Blrmlogh am..
Alabama
Soutbwest Research lIut1tute.. San Aotollia..
Texa.
SlU lntematlonaL Menlo ?ark CallIornia
Syracuse Rasearcb. ColJ'Oration. $)'rac:uae.
New York.
Universities Research Aasociation,
Incorporated (National Acceleration Lab),
ArgoMe, illinois
Universitles Corporation for Atmospheric
Research. Boulder. Colorado
Nonprofit losurance Companies :ruch 81 Blue
Cross and Slue Shield Organizatlons
Other nonprofit orgllIlizations as negotiated
....ith awarding agencies.
fF1l Doc. 5)-= nl..d ;-:~ a:u ''''1
~ COOE 3110-01-'1
Editorial Corrections to
OM 8 A-122
OFFICE OF MANAGEMENT AND
BUDGET
Circular A-122, "Cost Princip~s Ie>(
Nonprofit Organizations"; Correction
AGENCY: Office or Management and
Dw:igel.
ACTION: Final policy correction.
SUMMARY: This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 46022,
July 6,1960J.
FOR FURTHER INFORMATION COtCTACT:
Palmcr Marcanlonio, Financial
Management Branch, Office of
Management and Budget. Washington.
D.C. 20503, (202) 395-4773.
. Page 46022, column 2 the second
Paragraph 1, change Paragraph 5
"Compensation for. Personnel Services"
to Paragraph 6.
. PoC!e 46022. column 2 tbe !'econd
Poragr;ph 2. change Paragraph G
"Contingcncies" to Paragraph 7.
. Pace 45022, column 3:
Paragraph 4, change Paragraph 31,
"Equipment and Other Capital
Expenditures" 10 Paragraph 13.
. Paragraph 5, change Paragraph 26
"Meetings" to Paragraph Z4.
. Paragraph 6, change Paragraph 27,
"Organi~ation Costs" to Paragraph'20.
. Paragraph 7, change' Paragraph 30
"Pagc charges in Professlional Journals"
10 Par<<graph 26.
. Paragraph 6, change paragraph 37
"Public Informalion Service Costs" to
Parngraph 36.
. Paragraph 9. change Paragraph 43
"Rcntal Costs" to Paragraph 42.
. Paragraph 9a: in the fourth line. add
"up" bctween the words "only" and
"\0"; in the sixlhline change "they" to
"it".
. Parngraph 10. change Pamgraph 51
"T"',.:pl r",r:'," 'f' r:1i:1p,";"l!'1l; ~~
. - --01.-
A-122:12
. l'o8e 4(>024, collJmn 3 Paragraph
4(a)(2) afler ':bencfits received" add ";
or'.
. Pope 4r>025. column 1 Paragra ph D3,
chan~e the refercnce. "Paragraph Z1 of
Atlachmenl B" to "Paragraph 19 of
Allachment D."
. Page 45026, co~umn 1 Paragraph
4a.iii. in the sixth line, change "direct
cost" to "direct cosls."
. Page 45026, column 2 Paragraph
Elc, chanE!e "c'stablishment of a rale" lo
"establishmenl.of a final ratc."
. Pogc 46026, column 3 Paragraph
E2b. in the third line add the following
nClcr "a Federal agcncy shall"-"submit
its initial indircct cost proposal
immcdiatclv."
. Po.~e 4(-.'127, column 3 Paragraph
. (3)(a). chan~c "workmcn's
compcnsation" to "workcrF'
compensation."
. Page 46028, column 1 Paragraph
Gf3(b). (\he sccond line of colwnn 1)
chonge "Workmen's compensation" to
"workers' compensation."
. Pose 46030, <;olumn 3, paragraph
24b" the sixth line, change "allowablc"
to "allowabilily".
Daniel F. Macn,
nudgel and MGJlagcmenl Officer.
IF"R Ooc. 1Il~3 Flied 3-11h!l1: &,-4$ oml
BILLING COOE: 3110-01-401
Circular A-122, "Cost Principles for
Nonprofit Organizations"
Correction
In FR Doc. 81-20270, appearing at
page 46022 in the issue of Tuesday, )uly
0. 1900, thc following changes should be
made:
1. On page 40024. column three, tbe
second sentence in paragraph 'A.s.b.
should read, "SpccificBllly, the concepl
of netting such credit items against'
related expenditures should be applicd
by the organization in delermining the
ra tes or amounts to be chargcd 10
Federal awards Tor services rendcred
whcne\'er Ihe facilities or other
rcsources used in providing such
scrvices have been financed directly, in
whole or in pari, by Federal funds."
2. On page 46024., colwnn three, the
second complele sentence in paragraph
A.e. should read, "This is particularly
true in connection ",;th organiza tions
that rcceive a prepondcrance of their
support from Fedcral agencies."
3. On pagc 46025, column one,
parasraph B.2. should read, "2. AIly
dircct cost of a minor amounl mav be
trcatcd as an indirect cost for rea.sons or
prnclicalily where the accounting
lrcillment for such cost is consislcntly
nf'!!ll".d In nil finRI r.o~t nhi('r.tiv('~"
I
Office ot Management and Budget Circular A-122 (6/27/80)
4. On page 46025, columnoce,
paragraph B.4.L should rcad, "f.
Administration of group bcnefits on
behalf of mcmbers or clients including
liCe and hospital insurance, annuity or
retircment plans, financial aid, elc."
5. On page 46025, column two, the first
scntencc in paragraph D.l.e. should
read, "The base pcriod for Ihe allocation
of indirect costs is thc period in which
such costs are incurred and acc~mulatcd
Cor allocation to work performcd in that
pcriod,"
O. On page 4002G, column onc. thc
sccond scntcnce in paragraph D.3.d
should rend, uThc costs in thc common
pool shalllhen bc distributcd to
individual awards includcd in that
Cunc~!on by usc of a singlc indircct cost
rate.
7. On page 46020, column one, the first
scntence in puragraph D.3.e. should
read. "The distribution based used in
computing thc indirect cost rale Cor each
function may br. total direct costs
(excluding capital expenditures and
othcr dislorting items such as major
subcontracts and subgrants). direct
zalarics and wages, 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 trcat all costs as direct
costs exceptgcneral administra lion and
-general expenses. These organizations'
generally separate their cosls into thrp.c
basiccate!lories:' . ....
9. On page 46020, the last sentence in
column one (extending 10 column two).
in paragraph 0.5. should read, "Thc
factors may include the physical
loca lion of the work, the level of
administra livp. support rcquired. the
nature of the facilities or other resources
cmploycd. the scientific disciplincs or
technical skills im'olved, thc
organizational arrangcments used, or
any combination thcreoL"
10. On page 46026, column three,
paragraph E.2.i. should read, "i. To the
extent that problcms are encountered
among the Fcderal agencics in
conncction with thc negolialion and
approval process, the Office of
Management and Budget will lend
assistancc as reouired to resolve such
problems in a li~ely manner."
11. On pagc 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 thc extent that: (1) Thcy !ire
necessary to meet nuclualions in
workloads: or",
12. On pase 46030, column onc. the
second scntcncc in paragraph 16.c.
should read, "Such costs are allowable.
provided Ihe cnpacity is reasonably
antir.ipated 10 bc necessary or WkS
originally reasonable and is not subject
to reduction or elimination by sublctting,
renting. 9r sale, in accordance with
sound busincss. economics or sccurity
practices."
13. On pagc 46031, second column,
paragraph 34.c. should rcnd, "In addition
to thc factors in paragraph b. above,
rctaincr fees to be allowable must be
supported by evidcncc of bonA lidc
scrviccs available or rendered."
81LUHG COO€ lSO~l41
-I
A-122:13
,
..
v;::. ...">;).J.
APPENDIX":L HDR RF-372
1 4-25-88
ADMIN/STRA T {E REQUIREMENTS FOR GRAN S AND COOPERATIVE
AGREEMENTS TO st TE, LOCAL AND FEDERALLY ECOGNIZED INDIAN TRIBAL
GOVERNMENTS
(24 CFR 85)
')
PART 85-AOlolINISTRA TIVE
REOUIREMENTS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO
STATE. LOCAL AND FEDERAU Y
RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
r
,
"'
.d=-
SlJbpart A-Genef"al
!'w.c.
85.1 Purpose and scope of Ihis pnrt.
as.% Scope of subpart.
as.J De!initions.
as,4 Applicability,
as.S Effect on other i~.uances.
85.6 Additions and Exceptions.
SlJbpar1 8--f're-Award Requirements
as.l0 Fonns for applying for grants.
85.11 Slate plans.
85.12 Special grant or subgranl condilions
fur "high.risk" grantees.
Subpar1 C-Po:sl-Award Requirements
financial Admini,tration
85.%0 Standards for !inancial manallcmenl
syxtems.
85.21 Pilyment requirements.
as.22 Allowable cosls.
as.2J Period of availability of funds.
85.24 Malching or cost sharing.
85.2.5 Prosram income.
85.26 Non-Federal audits.
Cbanges, Property, and Subowards
65.30 Change, under discrelionllry (project)
awards.
85.31 Real property.
85.32 Equipment.
85.33 Supplies.
85.34 Copyrights.
85.35 Subawards to debarred and
suspended parties.
e.5.36 Procuremen t.
85.3i 5ubgrants.
Reports, Records Retention, and Enforcement
85.40 Monitoring and reportin;: program
perfonnance.
85.41 Financial reportin".
85.42 Relention and access requirement, for
records.
05,43 Enforcement.
85.44 Termina tion for convenience.
Subpart D-Af'ter.tl1e-Grant Requirements
65,50 Clo~eoul.
85.51 loClter dis,dlowances and ad,uslmenls.
85.52 Collection of amOunts due.
Subpart E-EnlitJements I Reserved)
AUlborit)~ Section 7(d), Department of
rlousingand Urban Developmenl Act. 42
U.S.C.3535(d).
[53 FR 8068, 8088, Mar. 18, 1988]
.~:'
Subpart A-Genen.l
~ 85.1 Purpose' lUId scope of tJW part.
This part estabhsha unifOTTll
administrative rules lar Fe1ieral grants
and COoperatrve ~ents and
subawanis to Slate. local and Indian
triual governments.
~ 85.2 Scope of subpart.
This subpart contains geoeral rules
pertaining to- !bilr part and procedure"$
for control of excC'ptions from this part.
~ 85.J Defmitions.
As u~ed in this parr.
"Accrued ex pendirure-s" mea n the
charga il1'CmT'ed by the grantee during II
given period requirinl the provisron of
funds for: (1) Goods and other tangible-
properly received: (Z)service$
performed by employees, contractors,
subgrantees, subcontractors. and other
pavees: and (3) other amounts becoming
o~ed under programs far which no
curren I services or performance i!
required. such as annuities, ill3urance
claims, and athe.r benefit paymeots.
"Accrued income" means the sum of:
(1) Earni~ during a ~n period from
services performed. by the snnltt: and
goods and other tangibk- property
delhoeTed 10 purchuers. and (Z} amoants
becoming owed to the grantee far which
no current &erVic.es or perionn..nce i:J
required by the grantee.
"AcquWlioo c:oJ;l" of an item of
purchased equipment means the net
invoice unit price of the property
including the cost of modiiicatioll3,
attachments. ac:-...e:\.SOnes. or ac.xiliary
ilpparatus necessary to make the
property usable for the purpo~ for
which it was acauired. Other charges
such as the cosl 'af in$lallation..
trilnsportation. taxes. duty or p.."O(ective
in.transit insurance, sn-ll be inclnde<i or
excluded from the unit acquisition cost
in accordance with the grantee's t.egular
accounting practices.
"Administrative" requirements mean
those mailers common to grants in
general. such as financial management
kinds and frequency of repom, and
. retention of I"eCOr'li.E. These are
dislin~uished from "programmatic"
requ.ir~ment.s... wcich conc.ero matters
that can be treated only on a p~-
by.program or grant-by-gran1 basis. suc.h
a! kinds of actrvities that can be
supported by grants under a particular
program.
Published by Warren. Gorham &. Lamont, Inc.
"A warding agency" means (11 with
respect to a gnnt. the Federal agency.
and (2) with respect to a subgr~l. the
party that 8war~ lheauhgrtnL
"Casb contributions" means the
grantee's cash outlay, including- the
out!.y of monlY contribolrd to tbe
granl~ 01' subgrBnlee by other pablic
age.ncies IIDd inJtitotkxu. 4LDd private
organizatioru and individ\uJc_ When
authorized by Federal leg:islatiotL.
Fecl.enU fund3 received from olhu
assistance agreements IDa)' he
coasiOc:red a.s grantee or wbgranl~
cash contribalimu.
"Contract" meaIlJl (except as \.I.3.ed Ln
the dc:finitiOta for "grant" IUId
"subgrant" in this section and excepl
where qual~ by "FederaJ"l a
pro C"al"'ert\.e n t COIltra c 1 uncle r a gran I 0::
subgranl. and meana a PtoCW'"ement
subcontract undu a contract.
"Coat sharing or matc:.b.in&" means. the
value of the third p.arty in-kind
contribu\i()r:u ud the portion oC the
costs of a federally lUSisted p.ro~ct 0:
program DOt. boM:1.e by the Federal
Governme.nL
"Cost-type contract" m.e.ans a contract
or suhc.o.ntract under a grant in whic..b.
the cantractor ex sUbcoc.traclar is paid
on the basis of the costs it incurs. with
or without a fee..
"Equipment~ meac.s tangib.Je.
nonexpendable, personal property
haVing a useful life of more thclr. one
year and an acquisition cost of s:s..ooo or
more per unrt. A grantee may use its
own definition o{ equipment provided
that such defLnition would at least
include all equipment aefl!led above.
"E.xpenditllI"e report" means: (1) For
nonconstructioc. g:ants, the SF-Z8g
"Financial Status RC'port" (or otheT
. equrvalent reportr. (Z~ for comtractian
grants, the SF-Z71 "Outlay R~rt and
Reque"$t for Rermborsement~ {or orhe-:-
equivalent report}.
"Federal;y recognized Indian tribal
government" means the gQveming body
or a governmental Bgency of any Indran
tribe, band, nation, or other o~nized
group or community (including any
Native Tillagoe a~ aefinedin section 3 of
the A1a~ka Native Claims Settlement
Act. as Stat 688) certifi~ by the
Secretary of the Interior as eli8ible for
the spe-cial p!"Ogr"ams and servi~
prC7Vide-d by him through the Bureao of
Indian Affair3.
"Government" means a Slate or local
government ();' a federally recognized
Indian tribal ~Ve:'nment.
41
09:1552
"Grant" means an.W8rd of fmancial
assistance. including cooperative
agreements. In the form of maney. or
property in lieu of money, by the Federal
Government to an eligible grantee. The
term does not include technical
assistance which provides rervices
instead of money. or other-amstanee' in
the form of revenue' sharing, loans. loan
guarantees. interest subsidies.
insU1"lU1.Ce. or direct appropriations.
Also. the term does nol include
a&aistaDce'. such as II fellowship ~ other
lump sum IIWard. which the grantee is
not required to account for.
"Grantee" mearu the government \0
which a grant is awarded and which is
accountable for the use of the funds
providecL The granle.e i& the entire legal
entity even if only a particular
component of the entity is designated in
the grant award document.
"Local govern.me.nt" means a county.
municipality. city. tawn. township. local
publ.i.c authority (including any public
and Indian housing agency undn the
United Slates Hoosing Act of 1S37}
school district. special ~lrict. intrastate
district. council of 80vemments
(whether or nol incorporated as a
nonprofit corporation under slate law).
any other re.giGnal or inl.e.rstatt'
government entity. or any agency or
instrumentality of a loc:aJ &ilvel'IUl\elll.
"Obki8atioa.s" me.aDS the amounts of
orders ptaced. contracts and su~l9
awarded. goods and services received.
and similar tran.sacDcma during a giVeD
period that Will req1rire payment by the
grantee duri.Ds the same or a futu~
period.
"OMB" means the United Stales
Office of Management and Budget.
"Outlays" (expenditures} mean
charges made to the project or program.
Tbey may be reported an a cash or
accrual basis. For reports prepared on a
cash basis. outlays are the sum of actual
cash distrorsement far direct charges for
goods and services. the amount of
indirect expense incurred. the value of
in-kind contributions applied. and the
amount of cash advan~s and payments
made to contractor.r and robgrantees.
For reports prepared an all accrued
expenditure basis. oottays are the sum
of actual cash disbursements, the
amount of indirect expense iJK:WTed. the
value of inkind conUibutions applied.
and the new increase (or decrease} in
the amounts owed by the grantee for
goods and other property received. for
services performed by employees..
contractor&. subgrantees..
subcontrac1ors. and other payees.. and
other amQUllts becoming owed under
programl for which no current services
or performance are required. such as
annuities, insurance claims.. and other
benefit payments...
HOUSING AND DEVELOPMENT REPORTER
l..percentage of completion method"
refers to . &Jstem lUIder which
payment. ate made for construction
work ac.cordiD& to the percentage of
completion of the work. rather than to
the grantee'. cost incurred.
"Pr!<< approval" means
documentation evidencing consent prior
to incurring &peciIic coat.
"Real property" means land. including
land improvements. structures and
appurtenances thereto. excluding
movable machinery and equipment.
"Share". when referring to the
awarding agency's portion of real
property. equipmenl or supplies. means
the same percentage as the awarding
agency's portion of the acquiring party's
total costs under the grant to which the
acquisition costs under the grant to
which the acquisition cost of the
property wasoGharged, Only costs are to
be counted-not the value of third.party
in-kind contributions.
"State" means any of the several
States of the United States. the District
of Columbia. the Commonwealth of
Puerto Rico. any territory or possession
of the United States. or any agency or
instrumentality of a State exclusive of
local governments. The term does not
include any public anclInclian housing
agency under United States Housing Act
of 1937. -
"Subgrant" means an award of
financial assistance in the form of
money. or property in lieu of money,
made under a grant by a grantee to an
eligible subgrantee. The term includes
financial assistance when provided by
contractual legal agreement. but does
nut include procurement purchases. nor
does it include any form of assistance
which is excluded from the definition of
"grant" in this part.
"Subgrantee" means the government
or other legal entity to which a subgrant
is awarded and which is accountable to
the grantee for the use of the funds
provided.
"Supplies" means all tangible
personal property other than
"equipment" as defined in this part.
"Suspension" means depending on the
context. either (1) temporary withdrawal
of the authority to obligate grant funds
pending corrective action by the grantee
or !;ubgrantee or a decision to terminate
the grant, or (2) an action taken by a
suspending official in accordance with
agency regulations implementing E.O.
12549 to immediately exclude a person
from participating in grant transactions
for a period. pending completion of an
investigation and such legal or
debarment proceedings as may ensue.
"Terminiltion" means permanent
withdrawal of the authority to obligate
previously-awarded grant funds before
that authority would otherwise expire. It
also means the voluntary relinquishment
Published by Warren. Gorham & Lamont, Inc.
of that luthority by the grantee or
subgrantee. "Termination" does not
include: (1) Withdrawal of funds
awarded on the basis of the grantee's
underestimate of the unobligated
balance in a prior period: (2)
Withdrawal of the unobligated balance
as of the expiration of a grant; (3)
Refusal to extend a grant or award
additional funds. to make a competing
or noncompeting continuation. renewal.
extension. or supplemental award: or (4)
voiding of a grant upon determination
that the award was obtained
fraudulently, or was otherwise illegal or
invalid from inception.
"Terms of a grant or subsrant" mean
all requirements of the grant or
subgrant. whether in statute,
regulations, or the award document.
"Third party in-kind contributions"
mean property or services which benefit
n federally assisted project or program
and which are contributed by non-
Federal third parties without charge to
the grantee, or a cost-lype contractor
under the grant agreement.
"Unliquidated obligations" for reports
prepared on a cash basis mean the
amount of obligations incurred by the
grantee that has not been paid. For
reports prepared on an accrued
expendit~re basis, they represent the
amount of obligations incurred by the
grantee for which an outlay has not
been recorded.
"Unobligated balance" means the
portion of the funds authorized by the
Federal agency that has not been
obligated by the grantee and is
determined by deducting the cumulative
obligations from the cumulative funds
authorized,
~ 85.4 Applicability.
(a) GeneraL Subparts A-D of this part
apply to all grants and subgrants to
governments, except where inconsistent
with Federal statutes or with regulations
authorized in accordance with the excep-
tion provision of ~ 85.6. or;
(1) Grants and subgrants to State and
local institutions of higher education or
Slate and local hospitals.
(2) Tbe block grants authorized by the
Omnibus Budget Reconciliation Act of
1981 (Community Services; ~eventive
Health and Health Services:' Alcohol.
Drug Abuse, and Mental Health
Services: Maternal and Child Health
Services: Social Services: Low-Income
Home Energy Assistance: States'
Program of Community Development
Block Grants for Small Cities: and
Elementary and Secondary Education
other than programs administered by the
Secretary of Education under Title V,
Subtitle 0, Chapter 2. Section 583-the
Secretary's discretionary grant program)
and Titles I-Ill of the Job Training
42
LU MM U N 11:r 1).t. Y .t.LU.t' M.t.N 1
"
)
)
Partnership Act of 1982 and under the
Public Health Services Act (Section
1921), Alcohol and Drug Abuse
Treatment and Rehabilitation Block
Grant and Part C of Title V. Mental
Health Service for the Homeless Block
Grant).
(3) Entitlem.ent grants to carry out the
following programs 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 1. 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 &l;ants under the
following programs of The Child
Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act).
and
(ii) School Breakfast (section 4 of the
Act).
(6) Entitlement grants for State
Administrative expenses under The
Food Stamp Act of 19n (section 16 of
the Act),
(7) A grant for an experimental. pilot,
or demonstration project that is also
supported by a grant listed in paragraph
(a)( 3) of this section;
(8) Grant funds awarded under
subsection 412(e) of the Immigration and
Nation~.lity Act (8 U.S.C. 15Z2(e)) and
subsection 501(a]"of the Refugee
Education Assistance Act of 1980 (Pub.
L 96-422. 94 Stat. 1809), for cash
assistance. medical assistance. and
supplemental security income benefits
to refugees and entrants and the
administrative costs of providing the
assistance and benefits;
(9) Grants to local education agencies
under 20 U,S.C. 236 through 241-1(a),
.~\.
.J
~
and 242 through 244 (portions of the
Impact Aid program). except for 20
U.S.C. 238(d)(2)(c) and 240(0
(Entitlement Increase for Handicapped
Children); and
(10) Payment. under the Vetenm~
Administration's State' Home Per Diem
Propam (3& Use. 641Ia)}. ,
(b) Entitlement programs.. Entltleme~lt
programs enumerated above. in
~ 85.4(aX3)-{8) are subject to Subpart E.
~ 85.5 Effect on other issuances.
All other grants administration p~ovi-
sions of codified program regulations.
program manuals, handbooks and other
nonregulatory 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 9 85.6.
9 85.6 Additions and exceptions.
(a) For claDeI of 8"anl8 and grantees
subject to thi& part. Federal agencies
may not impose additional ,
administrative' requirements e)(ce-pt m
codified regulationa published in the
Federal RegilJter.
(b) Exceptions for classes of grant. or
grantees may be authoriud only by
OMB. -
(c) Exceptions on a case-by-case basis
and ror subgrantees may be authorized
by the affected Federal agencies.
Subpart 8-Pre-Awant Requirements
9 85.10 Forms for applying for grants.
(a) Scope. (1) This section prescribes
forms and instructiona to be nsed by
governmental o,!anizations (e)(cepl
hospitals and institutions of higher .
education operated by a government) In
applying for grants. This section is not
applicable. howenr. to Cormula grant
programs which do not require
applicants '0 apply for funds on a
project basi,.
(Zl This section applies only to
applications to Federal agencies for
grants. and is no' required to be applied
by grantees in dealing with appUcanta
for subgran's. However. grantees are
encouraged to avoid !Dare deta.\ied or
burdensome application ~ements
for su bgrants.
(b) Authorized forms and instructions
for governmenUJJ OI'JGnizolians. (1) In
applying for grants. applicants shall only
use standard application forms or those
prescribed by the graDtmg ~cy with
the appronl of OMB under the
Paperwork Reduction Act of 198Q..
(2) Applicants are not required to
submit more thaft the original and two
copies of preapphcations or
applications.
Published by Warren, Gorham & Lamont, Inc.
I
09:1553
HDR RF-372
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(3) Applicanta must follow all
applica~e malnM:bonl that bear OMB
clearance numbers. Federal ageuc:ies
may .pecify and describe the programs.
functions, or activities tha t will be used
to plan. budset.. an.d evaluale the work
under a paul Other auppIeme11tary
instructiOOll may be issued only with the
approval of OMS to the exleDt required
under th& Paperwork R.educUOI1 Act of
1980. For- any .t.aDdani lorm. except the
SF-424 facesbeet. Feder.l asmciea may
shade out or inatruct the applicant to
disregard any line item that is nol
needed.. .
(4) When a grantee applies far
additional funding (such as a
continuation Ol" IIlPplemental award) or
amends a previousJy wbmitte.d
application. only the affected pages
need be submitted.. Previously submitted
pages with information that is still
current need not be resubmitted..
9 85.11 State plans.
(a) Scope. The statutes lor some
programs require States to submit plans
before receiving grants. Under
regulatiollS implementing Executive
Order 1Z37Z, "Intergovernmental Review.
of Federal Programs," States are
allowed to simplify, consolidate and
substitute plans. This section contains
additional provisions for plans that are
subject to regulations implementing the
Executive Order.
(b) Requirements. A Slate need meet
only Federal administrative or
programmatiC' l'eqtriremeflts for a plarr
that are in statute:r or codified
regulations. .'
(c) Assurances, In each plan the State
will include an assurance that the State
shall comply with all applicable Federal
statutes and regulations in effect with
respect to the periods for which it
receives grant funding. For this
assurance and other assurances
required in the plan. the State m8'Y:
(1) Cite by number tbe statutory or
regulatory provisions requiring the
assurances and affirm that it gives the
assurances required by those provisicms,
(Z) Repeat the assurance language iD
the statutes or regulations, or
(3) Develop ils own language 10 the
extent permilled by law.
(d) Amendments. A Slate will amend
a plan whenever neressary to reflect: (1)
New or revised Federal slatutes or
regulations or 12} 8 malerial change in
any State law, organization, policy, or
State ag~ncy operahon. TM? State will
obtain approval for the amendment and
itlr effective dare but need sUOmit for
approval only the amended portions of
the plan.
43
09:1554.
~ 85.12 Specia.l grant or lubgrant
conditions for "bigh-risk" grantees.
(a) A grantee or' su.bgrantee may be
considered "bigh risk" if aD awarding
agency determines that ~ granlee or
subgrant~ .
11) Hua history o.r unaatWactory
performance. or
(2) Is not financially stable. or
(3) Haa a maDagement I')'stem which
does not meet the JJUUUtsement
standards set forth in tbis part. or'
(4) Ha. not conformed to terms and
conditionlJ of previoas award.. or
(5) Is othenrise not r~ponlible: and if
the awarding agency determines that an
award will bemltde, ~al conditions
and/or restrictions shall ~pond 10
the high risk condition and shan be
included in the award.
(b) Special conditions or restrictions
'may indude;-
(ll Payment on a reimbursement
basis;
(2) Withholding authority to proceed
to the next phue until receipt of
evidence of acceptable performance
within a gi\len funding period:
(3) Requiring additional. more detailed
financial reports:
(4) Additional proiect monitoring;
(5) Requiring the graDte or &ubgrantee
to obtain lecimical or management
assistance: or _
(6) Establishing additional prior
a pprovala.
(c) U an awarding agency dec:ide:.to
impose such:conditiODS, the awardin&
official will notify the gr;mtee or
subgrantee as early as.posaiWe.. in
writing, of:
(l} Tbe nature of tbe special
comJi tionsl restrictions:
(l) The reasonfs) for imposing them:
(3) The corrective actions which must
be taken before they will be removed
and the time allowed far completing the
corrective actions and
(4) The method of requesting
recon!rideration of the conditions/
restrictions imposed.
Subpw! c-Post.....tI'lIIII"d Requ;rements
Financial AdmWstJ:atiolill
~ 85.20 Standards for financial
management systems.
(al A State must expand and account
for grant fu.cds in accordance with State
laws and procedures for ex.pending and
accounting for its own funds. fiscal
control and accounting procedures of
the State. as well as its subgrantees and
cost-type contractors. must be sufficient
te>-
(1} Permit preparabon of reports
required by this polrt and the statutes
authorizing the grant. and
) HOUSING AND DEVEtOPME~l REPORTER
(2) Permit the tracing of fuocis to a electrOnic transfer of fund. methods, the
level Gf expenditures adeqWlle \0 grantee.must make, drawdo~s a. close
establish that loch fundi have not been as pOSSIble to the time of making
used in viola lion of \he re.stricliQ:1s and disbursements. Grant..Jes must monitor
probibitiQ:1s of applicable slatutes. cash drawdowns by their subgrantees to
assure that they conform substantially
to the same stimdards of timing and
amount as apply to advances to the
grantees.
(c) An awarding agency may review
the adequacy of the financial
management system of any applicant for
financial assistance as part of a
preaward review or at any time
subsequent to award.
~ 85.21 Payment.
(a) Scope. This section prescribes the
basic standard and the methods under
which a Federal agency will make
payments to grantees. and grantees will
make payments to subgrantees and
contractors.
(b) Basic standard. Methods and
procedures for payment shall minimize
the time elapsing between the transfer
of funds and disbursement by the
grantee or subgrantee, in accordance
with Treasury regulations at 31 CFR Part
205.
(c) Advances. Grantees and
subgrantees shall be paid in advance.
provided they maintain or demonstrate
the willingness and ability to maintain
procedures to' minimize the time
elapsing between the transfer of the
funds and their disbursement by the
grantee or subgrantee,
(d) Reimbursement. Reimbursement
shall be the preferred method when the
reqtrirements in paragraph (c) of this
section are not met. Grantees and
subgrantees may also be paid by
reimbursement for any construction
grant. Except as otherwise specified in
regulation. l"ederal agencies shall not
use the percentage of completion
method to pay construction grants, The
grantee or subgrantee may. use that
method to pay its construction
contractor, and if it does. the ilwarding
agency's payments to the grantee or
subgrantee will be based on the
grantee's or subgrantee'J' actual rate of
disbursement.
(e) Working capital advances. If a
grantee cannot meet the criteria for
advance payments described in
paragraph (c) of this section. and the
Federal agency has determined that
reimbursement is not feasible because.
the grantee lacks sufficient worki:lg
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 t.hi! grantee's
disbursing cycle. Thereafter, 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 reporting. Accurate,
current. and complete disclosure of the
financial results of financially assisted
activities must be made in accordance
with the financial reporting
requirements of the grant or subgrant.
(2) Accounting records. Grantees and
subgrantees must maintain records.
which adequately identify the source
and application of funds provided for
financially-assisted activities. These
records must COntain infonnation
pertaining to grant or llubgrant Bwards
and authorizations, obligations,
unobligated balances. assets. liabilities.
outlays or expenditures. and income.
(3) internal controL Effective control
and accountability must be maintained
for all grant and aubgrant cash. real and
personal property. and other assets.
Grantees and subgrantees must
adequately safeguard all such property
and must assure that it is used solely for
authorized purposes.
(4) Budget cO/ltrol. Actual
expenditures or outlays must be
compared with budgeted amOW1ts for
each grant or lubgrant. Financial
information must be related to
performance or productivity data.
including the development of unit. cost
information wbenever appropriate or
specifically required in the grant or
subgrant agreement If unit cost data are
required. estimates based aD available
documentation will be accepted
whenever possible.
(5) Allowable cost. Applicable OMB
cost principles, agency prosram
regulations. and the terms of grant and
subgrant agreements will be fonowed in
determining the reasonableness.
allowability. and allocability of costs.
(6) Source documentation. Accounting
records must be supported by such
source documentation sa cancelled
checks. paid bills. payrons. time and
attendance records. contract and
subgrant award documents. ete.
(7) Cash management. Procedures for
minimizing the time elapsing between
the transfer of fund. from th~ U;S.
Treasury and disbara~t by grantees
and subgrantees mm be followed
whenever advance p...1",t:ht procedures
are used. Grantees must establish
reasonable procedures to ensure the
receipt of reports on suh!rantees' cash
balances and cash disbursementa in.
sufficient time to enable them to prepare
complete and accurate cash transactions
reports to the awarding agency, When
advances are made by letter-oC-aedit or
Published by Warren, Gorham & Lamont, Inc.
44
........"-'...............-... '-- - -- ---
I
\
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 ~ntee
to provide timely advance~e
subgrantee to meet the subgrantee's
actual cash disbursements.
(0 Effect of program income. refunds,
and audit recoveries on payment. (1)
Grantees and subgrantees shall disburse
repayments to and interest earned on a
revolving fund before requesting
additional cash payments for the same
activity.
(2) Except a. provided in paragraph
(0(1) of this section, grantees and
subgrantees shall disburse program
income, rebates. refunds, contract
settlements. audit ~overies and
interest earned on such funds before
requesting additional cash payments,
(g) Withholding payments. (1) Unless
otherwise required by Federal statute,
awarding agencies shall not withhold
payments for proper charges incurred by
grantees or subgrantees unless-
(0 The grantee or subgrantee has
failed to comply with grant award
conditkms or
(ii) The grantee or subgrantee is
indebted to the United States.
(2) Cash withhdd for failure to Comply .
with grant award condition, but without
suspension of the grut, shall be released
to the grantee upon subsequent compli-
ance.When a grant is suspended. payment
adjustments will be made in accordance
with 9 85.43(c).
(3) A Federal agency shall not make
payment to grantees for amounts that
are withheld by grantees or subgrantees
from payment to contractors to assure
satisfactory completion of work.
Payment. shall be made by the Federal
agency when the grantees or
subgrantees actually disburse the
with.heJd funds to the contractors or to
escrow accouot. established to assure
sa tisfltCtory completion of work.
(h) Cash depasitories. (1) Consistent
with the national goal of expanding thp.
opportunities for minority business
enterprises. grantees and subgrantees
are encouraged to use minority banks (a
bank which is owned at least so percent
byminority group members), A list of
minority owned banks 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:
-
--..&1
Intergovernmental 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.
~ 85..12 Allowable costs.
(a) Limitation on use of funds. Grant
funds may be used only for:
(1) The allowable costs of the
grantees, sUDsrantees and cosHype
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 of organization. there is a set
of Federal principles for determining
allowable costs. Allowable costs will be
determined in accordance with the cost
principles applicable to the organization
incurring the costs. The following chart
lists the kinds of organizations and the
applicable cost principles.
For the costs 01 a- I Use ltte pl'inoples in-
State. local or Indian OM8 OrCUlar A-a7.
tritIaI 9O"etnment.
Private nonprollt oeM Citeular .1.-122.
organiZalJOn other than
an 11' IftSblulJOn 01
hlgl'Ier educ:alioo, (2)
hospital. or (31
organczallon named in
OMB CIrCUlar .1.-122
as not sutlf8Cl1O ItIaI
arcular .
EducatJOnal inslilulJOns.._.J OM8 Circular .1.-21.
For.plolil orgat'lzatlOn 48 CFR Pa/1 31.
otner than a hoSPItal ContraC1 Cost
and an organlZallOn Pnnciples and
named in 081.4 Procedures, or uniform
Circular .1.-122 as not cost accounllng
sub;ec1to lhat a,CUIar. standards that comply
W11n cost pnnaples
acceptable 10 tne
Federal agency.
9 85.23 Period or availability or funds.
(a) General. Where a funding period is
specified. a grantee may charge to the
award only costs 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
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I
HDR RF-372
4-25-88
90 days after the end of the funding
period (or as specified in a program
regulation) to coincide with the
submission of the annual Financial
Status Report (SF-269). The Federal
agency may extend this deadline at the
request of the grantee.
~ 85.24 Matching or cost sharing.
(a) Basic rule: Costs and contributions
acceptable. With the qualifications and
exceptions listed in paragraph (b) of this
section. a ma tching or cost sharing
requirement may be satisfied by either
or both of the following:
(1) Allowable costs incurred by the
grantee. subgrantee or a cost-type
contractor under the assistance
agreement. This includes allowable
costs 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
requirements applies.
(b) Qualifications and exceptions-{l)
Costs borne by other Federal grant
agreements, Except as provided by
Federal statute. a cost sharing or
matching requirement may not be met
by costs borne by' another Federal grant.
This prohibition does not apply to
income earned by a grantee or
subgrantee from a contract awarded
under another Federal grant.
(2) General revenue sharing. For the
purpose of this section. general revenue
sharing funds distributed under 31
U.S.C. 6702 are not considered Federal
grant funds,
(3) Cost or contributions counted
towaro& olhQr P"OQraJ co&t&-s: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 9 85.25, shall not count towa~ds
satisfying a cost sharing or matching
requiremetn unless they are express,ly per-
mitted in the terms of the assIstance
agreement. (This use of general program
income is described in 9 85.25(g).)
(5) Services or property financed by
income earned by contractors.
Contractors under a grant may earn
income from the activities carried out
undel"'the contract in addition to the
amounts earned from the party
awarding the contract. No costs of
services or property supported by this
45
09:15515
income may COWlt tQward satisfying a
cost sharing or matching requirement
unless other provisions o{ the grant
agreement expressly permit this kind of
income to be used to meet the
requirement.
(6) Records. Costs and third party in-
kind contributions counting towards
satisfying a cost sharing or matching
requirement must be verifiable from the
records of grantees and subgrllntee or
cost-type contractors. These records
must show how the value placed on
third party in-kind contributions was
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
{or 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 (or them. the payme.,ts
would have been an indirect costs.
Costs sharing or matching credit for
such contributions shall be given only if
the grantee. subgrantee. or contractor
has established. along with its regular
indirect cost rate. a special rate for
allocating to indiviclll;ll projectll or
J.'rogrllms the value of the contributions.
(iii) 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
rules in the succeeding sections o{ this
part. If a third party in-kind contribution
is a type not treated in those sections,
the value placed upon it shall be (air
and reasonable.
(c) Valuation of donated services-(1)
Volunteer services. Unpaid services
provided to a grantee or subgrantee by
individuals. will be valued at rates
consistent with those ordinarily paid {or
similar work in the grantee's or
subgrantee's organization. If the grantee
or subgrantee does not have employees
HOUSING AND DEVELOPMENT REPORTER
Jr{Orming similar work, the rates will
be consistent with those ordinarily paid
by otber employers for similar work in
the same labor market. In either case-. a
reasonable amount {or fringe benefits
may be included in the valuation.
(2) Employees of other organizations.
When an employer other than a grantee,
subgrantee. or cost-type contractor
furnishes free of charge the services o{
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. If the
services are in a different line of work.
paragraph (clll) of this section applies.
(d) Valuation of third party donated
supplies and loaned equipment or space.
(1) If a third party donates supplies. the
contribution will be valued at the
market value o{ the supplies at the time
of donation.
(2) If a third party donates the use of
equipment or space in a building but
retains title. the contribution will be
valued at the fair rectal rate of the
equipment or space.
(e) Valuation of third party donated
equipment. buildings. 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 subgran!. as follows:
(1) A wards for capital expenditures. If
the.purpose of the grant or subgrant is to
assist the grantee or subgrantee in the
acquisition of property. the market value
of that property at the time of donation
may be counted as cost sharing or
matching,
(2) Other awards. If assisting in the
acquisition of property is not the
purpose of the grant or subgrant.
paragraphs [e)(2J (i) and (ii) of this
section apply:
(i) If approval is obtained from the
awarding agency, the market value at
the time of donation of the donated
equipment or buildings and the fair
rental rate of :he donated land may be
counted as cosl sharing or matching. In
~~e case of a subgrant. the terms of the
grant agreemt'1l1 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.if
a purchase of the equipment or rental of
the land would be approved as an
allowable direct cost. 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.
(ii) If approval is not obtained under
paragraph (e)(2)(i) of this section, no
amount may be counted for donated land.
Published by Warren. Gorham & Lamont. Inc.
and 01 depreciation or use allo~ances
may be counted for dona~. eqwpment
and buildings. The depJ'eC1atlon 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 subgrantce. They are
computed and allocated (us~y as indi-
rect costs) in accordance With the cost
principles specified in ~ 85.22. in the same
way as depreciation or use all~v.:ances for
purchased equipment and buildings, The
amount of depreciation or use ~o!"an~
for donated equipment and buildmgs IS
based on the property's market value at
the time it was donated.
lO Valuation of grantee or subgrantee
donated real praperty for construction/
acquisition. If a grantee or subgrantee
donates real property for a construction
or faciliti~s 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 80me
cases under paragraphs (d), (e) and lO of
this section, it will be necessary to
establish the market value of land or a
building or the fair rental rate of land or
of space in a building. In these cases. the
Federal agency may require the market
value or fair rental value be set by an
independent appraiser, and that the
value or rat!! be certified by the grantee.
This requirement will also be imposed
by the grantee on subgrantee~.
~ 85.25 Program income.
(a) General. Grantees are encouraged
to earn income to defray program costs.
Program income includes income from
fees for services performed. from the use
or rental of real or personal property
acquired with grant funds, from the sale
of commodities or items fabricated
under a grant agreement. and from
payments of principal and interest on
loans made with grant funds. Except as
otherwise provided in regulations of the
Federal agency, program income does
not include interest on grant funds,
rebates. credits. discounts, refunds. etc,
and interest earned on any of them.
(b) Definition of program income.
Program income means gross income
received by the grantee or 8ubgrantee
directly generated by a grant supported
activity, or earned only as a result of the
grant agreement during the grant period.
"During the grant period" is the time
between the effective date of the award
and the ending date of the awa,rd
reflected in the final financial report.
46
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(c) Cost of generating program ,.
income, If authorized by Federal
regulations or the grant agreement. C:06ts
incident to the generation of program
income may be deducted from gross
income to determine program income.
(d) Governmental revenues. Taxes.
special assessments. levies. fines. and
other such revenues raised by a grantee
or subgrantee are not program income
unless the revenues are specifically
identified in the grant agreement or
Federal agency regulations as progrllm
income.
(e) Royaliies. Inalme from royalties and
. license fees for alpyrighted material, pat-
. ents, and inventions developed by a grant-
ee or subgrantee is program inalme only if
the reven\les are specifically identified in
the grant agreement or Federal agency
regulations as program inalme. (See
~ 85.34.)
(f) Property. Proceeds from the sale of
real property or equipment will be han.
dIed in accordance with the requirements
of ~~ 85.31 and 85.32.
(g) Use of program income. Program
income shall be deducted from outlays
which may be both Federal and non.
Federal as described below, unless the
Federal agency regulations or the grant
agreement specify another alternative
(or a combination of ,he alternatives),ln
specifying alternatives. the Federal
agency may distinguish between income
earned by the grantee and income
. earned by subgrantees and between the
sources, kinds. or amounts of income.
When Federal agencies authorize the
alternatives in paragraphs (g) (Z) and (3)
of this section. program income in
excess of any limits stipulated shall also
be deducted fromi6utlays.
(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 r.ontributions rather
than to increase the funds committed to
the project.
(Z) 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) Income after the award pen'od
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. see
paragraph (a) of this section). unless the
terms of the agreement or the Federal
agency regulations provide otherwis~~
~ 85.26 NOD-Federal audit.
(a) Basic Rule. Grantees and
subgnmtees are responsible for
obtaining auditllin accordance with the
Single Audit Act of 1934 (31 U.S.C.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 audits,'
(b) Subgrantees. State or local
governments, as those terms 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-ll0. "Uniform Requirements for
Grants and Other Agreements with
Institutions of Higher Educa tion.
Hospitals and Other Nonprofit
Organizations" have met the audit
requirement. Commercial contractors
(private forprofit :md 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;
(Z) 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 subgraDtee
made in accordance with the Act,
Circular A-ll0,'or through other means
(e.g.. program reviews) if the subgrantee
has not had such an audit:
(3) Ensure that appropriate corrective
action is taken within six months aIter
receipt of the audit report in instance of
noncompliance with Federal laws and
regula tions:
(4) Consider whp.tber subgrantee
audits necessitate adjustment of the
grantee's own records: and
(5) Require each subgrantee to permit
independent auditors to have access to
the records and financial statements.
Published by Warren. Gorham & Lamont,. Inc.
....~~.. .....""- -v . _
4-25-88
I (c) Auditor selection. hi a.rnUiging' for
audit services, ~ 85.36 shall be foHowed.
Changes. Property. and Subawarda
~ 85.30 Changes.
(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 awarding agency. certain
types of post-award changes in budgeD
and projects shall require the prior
written approval of the awarding
agency.
(b) Relation to cost principl~" The appli-
cable cost principles (see ~ 85.22) alntain
requirements for prior approval of certain
types of alsts. Except where waived, those
requirements apply to all grants and sub-
grants even if paragraphs (c) through (I) of
this section do not.
(c) Budget changes. (1)
Nonconstruction projects. Except as
stated in other regulations or an award
document. grantees or subgrantees shall
obtain the prior approval of the
awarding agency whenever any of the
following changes is anticipated under 8
nonconstruction award:
(i) Any revision which would result in
the need for additional funding.
(ii) Unless waived by the awarding
agency, cumulative transfers among
direct cost categories. or, if applicable,
among separa.tely bUdgllled programs.
projects. functions. or activities which
exceed or are expected to exceed ten
percent of the current total approved .
budget, whenever the awarding agency's
share exceeds $100,000. ..,
(iii) Transfer of funds allotted for
training allowances (i.e.. from direct
payments to trainees to other expense
ca tegories),
(Z) Construction projects, 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
non construction projects. When a grant
or subgrant provides funding for both
construction and nonconstruction
activities. the grantee or subgrantee
must obtain prior written approval from
the awarding agency before making any
fund or budget transfer from
nonconslruction to construction or vice
versa.
(d) Progrommatic changes. Grantees
or subgrantees must obtain the prior
approval of the awarding agency
whenever any of the following actions is
anticipated:
47
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(l) Any revision of the scope or
ob;ectives of the project (regardless of
whether there is an associated budget
revision requiring prior approval).
(Z) Need to extend the period of
availability of funds.
(3) Changes in key persons in cases
wherespedfied in an application or a
grant award. In research projects. a
change in the project director or
principal investigator shall always
require approval unless waived by the
awarding agency,
(4) l!nder nonconst~t: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:poses 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
services.
(e) Additional prior appraval
requirements. The awarding agency may
not require prior approval for any
budget revision which is not described
in paragraph (c) of this section.
(0 Requesting prior approval. (1) A
request 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 lor a prior approval under
the apphcable Federal cost principles (see
~ 85.22) may be made by letter.
(3) A request by a :lubgrantee for prior
llpproval will be addressed in writing to
the grantee. The grantee will promotly
review such request and shall app~ove
or disapprove the request in writing. A
grantee will not approve any budget or
project revision :which is inconsistent
with the purpose or terms and
conditions of the Federal grant to the
grpntee. If the revision, requested by the
:lubgrantee would result in a change to
the grantee', approved project whir.h
requires Federal prior approval. tl)e
grantee will obtain the Federal d;:wncv'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~ri1n!ee
respectivelv.
(bj Use. Except as otherwise provided
::y Federal statutes, real property will De
L:sed for the originldly authorized
;:urposes as long as needed for thilt
purposes, and the grantee or subgrantee
shall not dispose of or encumber its title
or other interests.
HOUSING AND DEVELOPMENT REPORTER
I
acquired 88 long 88 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
lIupported by a Federal agency.
(Z) The grantee or subgrantee shall
also make equipment available for use
on other projects or programs currently
or previously supported by the Federal
Government. providing such use will not
interfere with the work on the projects
or program for which it was originally
acquired. First 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 inco~. the-
grantee or subgr:lIltee 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 subgrantee
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 funds. until disposition takes
place will, as a minimum. meet the
following requirements:
(1) Property records must be
maintained that include a description of
the property, a serial number or other
identification number, the source of
property, who holds title. the acquisition
date. and cost of the property,
percentage of Federal participation in
the cost of the property, the location. use
and condition of the property. and any
ultimate disposition data including the
date of disposal and sale price of the
property.
(2) A physical inventory of the
property must be taken and the results
reconciled with the property records at
least once every two years.
(3) A control system must be
developed to ensure adequate
safeguards to prevent loss, damage, or
theft of the property. Any loss. damag!!,
or theft shall be investi~ated.
(4) Adequate maintenance procedures
must be developed to keep the property
in good condition.
(5) If the grantee or subgrantee is
authorized or required to sell the
property. proper sales procedures must
I
(c) Disposition. When real property is
no longer needed for the originally
authorized purpose. the grantee or
subgrantee will request disposition
instructions from the awarding agency.
The instructiona will provide for one of
the following alternatives:
(1) Retention of title. Retain title after
compensating the awarding agency. The
amount paid to the awarding agency
will be computed by applying the
awarding agency's percentage of
participation in the cost of the original
purchase to the fair market value of the
property. However. in those situationa
where a grantee or subgrantee Is
disposing of real property acquired with
grant funds and acquiring replacement
real property under the same program.
the net proceeds from the disposition
may be used as an offset to the cost of
the replacement property.
(Z) Sale of property. Sell the property
!lnd compensate the awarding agency.
The amount due to the awarding agency
will be calculated by applying the
awarding agency's percentage of
participation in the cost of the eriginal
purchase to the proceeds of the sale
after deduction of any actual and
reasonable selling and flXing-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 shall 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
designated/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 conditions let forth in this section.
title to equipment acquired under atgrant or subgrant will vest upon
acquisition in the grantee or subgrantee
respectively.
(b) States. A State will use, manage.
and dispose of equipment acquired
under a grant by the State in accordance
with State laws and procedures. Other
grantees and subgrantees will follow
paragraphs (c) through (el of this
section.
(c) 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.
48
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be established to ensure the highJt
possible return.
(e) Disposition. When original or
replacement equipment acquired under
a grant or subgrant is no longer needed
for the original project or program or for
other activitiea currently or previously
supported by a Federal agency,
disposition of the equipment will be
made as follows:
(1) Items of equipment with a current
per-unit fair market value of less than
$5.000 may be retained. sold or
otherwise disposed of with no further
obligation to the awarding agency.
(2) Items of equipment with a current
per unit fair market value in excess of
$5.000 may be retained or sold and the
awarding agency shall have a right to an
amount calculated by multiplying the
current market value or proceeds from
salE'! by the awarding agency's share of
the equipment.
(3) In cases where a grantee or
subgrantee fails to take appropriate
disposition actions. the awarding agency
may direct the grantee or subgrantee to
take excess and disposition actions.
(f) Federal equipment. In the event a
grantee or subgrantee is provided
federally-owned equipment:
(1) Title will remain vested in the
F~deral Government.
(2) Grantees or subgrantees will
manage the equipment in accordance
with Federal agency roles and
procedures. and submit an annual
inventory listing.
(3) When the equipment is no longer
needed. the gra.'ltee or subgrantee will
request disposition instructions from the
Federal agency.
(g) Right to transfer title, The Federal
awarding agency may reserve the right
to transfer title to the Federal
Government or a third part named 'by
the awarding agency when such a third
party is otherwise eligible under existing
statutes. Such transfers shall be subject
to the following standards:
(1) The property shall be identified in
the grant or otherwise made known to
the grantee in writing.
(2) The Federal awarding agency shall
issue disposition instruction within 120
calendar days after the end of the Federal
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
shkll follow 85.32(e).
(3) When title to equipment is
transferred, 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.
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~ 15.33 Supplies.
(a) Title. Title to supplies acquired
under a grant or IJUbgrant will vest. upon
acquisition. in the grantee or subgrantee
respectively.
(b) Disposition. If there is a residual
inventory of unuNd supplies exceeding
$5.000 in total agSregate (air market
value upon termination or completion of
the award. and if the supplies are not
needed for any other federally
sponsored program. or projects. the
grantee or subgrantee shall compen.ate
the awarding agency for its share.
~ 85.34 Copyrights.
The Federal awarding agency
reserve. 1I royalty-free. nonexclusive.
and irrevocahle license to reproduce,
publish or otherwise use. and to
authorize others to use, for Federal
Government purposes:
(a) The copyright in any work
developed under a grant. subgrant. or
contract under a grant or subgrant: and
(b) Any rights of copyright to which a
grantee. subgrantee or a contractor
purchases ownership with grant support.
~ 85.35 Subawards .to debarred and
suspended parties.
Grantees and subgrantees must not
make any award or permit an~ award
(subgrant or contract) at any lIer to any
'0 party which is debarred or suspen~~d or
is otherwise excluded from or mehglble-
for participation in Federal assilltance
programs under Executiv~ Or.?er 12549.
"Debarment and SuspensIon.
~ 85.36 Procurement
(a) Stotes. When procuring propertr
and services under a grant. a State WIll
follow the same policiell and procedures
it uses for procurements from it! non-
t'ederal funds. The State will ensure that
every purchase order or other contract
includes any clauses required by
Federal statutes and executive orders
and their implementing regulation~.
Other grantees and subgrantees Will
follow paragraphs (b) through (i) in this
section.
(bl Procurement standards. (1)
Gra~tees and subgrantees will use their
own procurement procedures which
reflect applicable State and loc~llaws
and regula tions. pro\;ded tha t hIe
procurements conform to applicable
FederAl law and the standards identified
in this section.
(2) Grantees and rnbg~a~lee! .WtU
maintain a contract admmlstratlon
system which ensures th~t c~ntractors
perform in accordan~e wl!h tne tenn,s.
conditions, and speCIficatIons of theIr
Published by Warren. Gorham & Lamont, Inc.
HDR RF -372
4-2&-88
I contracts or purchaae orders.
(3) Grantees and lubgrantees will
maintain a written code of standards of
conduct governing the performance of
their employeel engaged in the award
and administration of contractJ. No
employee. officer or agent of the grantee
or lubgrantee shall participate in
selection. or in the award or
adminiatration of a contract supported
by Federal fundI if a conflict of interest.
real or apparent. would be involved.
Such a conflict w~uld arise when:
(i) Tbe employee. officer or agent.
(ii) Any member of his immediate
family.
(iii) His or her partner, or
(iv) An organization which employs.
or is about to employ. any of the above,
has a financial 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
subagreements. Grantee and
subgrantees may set minimum roles
where the financial interest is not
substantial or the gift is an unsolicited
item of nominal intrinsic value. To the
extent 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 thegralltee's and
subgrllDtee's officers. employees. or
agents. or by contractors o~ their age,ntB.
Th~ awarding agency may In regulatton
provide additional prohibitions relative
to real. apparent. or potential conflicts
of interest.
(4) Grantee and subgrantee. .
procedures wiil provide for a revIew of
proposed procurements to avoid, ,
purchase of unnecessary or duph.catlve
items. Consideration ahould be gIven to
consolidating or breaking out
procurements to obtain a more
economical purchase. Where
appropriate, an analysis will be made of
lease versus purchase alternatives. and
anv other appropriate analysis to
determine the most economical
approach.
(5) To foster greater economy and
efficiency, grantees and subgrantees are
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 U!8 is feasible and reduces project
costs.
49
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be established to ensure the highlst
possible return.
(e) Disposition. When original or
replacement equipment acquired under
a grant or subgrant is no longer needed
for the original project or program odor
other activities currently or previously
supported by a Federal agency,
disposition oC the equipment will be
made as Collows:
(1) Items oC equipment with a current
per-unit fair market value of less than
$5,000 may be retained. sold or
otherwise disposed of with no further
obligation to the awarding agency.
(2) Items oC equipment with a current
per unit fair market value in excess oC
$5.000 may be retained or sold and the
awarding agency shall have a right to an
amount calculated by multiplying the
current market value or proceeds from
sale by the awarding agency's share of
the equipment.
(3) In cases where a grantee or
subgrantee fails to take appropriate
disposition actions. the awarding agency
may direct the grantee or subgrantee to
take excess and disposition actions.
(f) Federal equipment. In the event a
grantee or 8ubgrantee is provided
federally-owned equipment:
(1) Title will remain vested in the
Federal Government.
(2) Grantees or subgrantees will
manage the equipment in accordance
with Federal agency rules and
procedures. and submit an annual
inventory listing.
(3) When the equipment is no longer
needed. the gra!ltee or subgrantee will
request disposition instructions from the
Federal agency.
(g) Right to transfer title. The Federal
awarding agency may reserve the right
to transfer title to the Federal
Government or a third part named 'by
the awarding agency when such a third
party is otherwise eligible under existing
statutes, Such transfers shall be subject
to the following standards:
(1) The property shall be identified in
the grant or otherwise made known to
the grantee in writing.
(2) The Federal awarding agency shall
issue disposition instruction within 120
calendar days after the end of the Federal
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
sh&ll follow 8S.32(e).
(3) When title ta equipment is
transferred. 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.
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~ 115.33 Supplies.
(a) Title. Title to supplies acquired
under a grant or lfUbgrant will vest. upon
acquisition. in the grantee or subgrantee
respectively,
(b) Disposition. If there is a residual
inventory of unuMd supplies exceeding
$5,000 in total a~gate fair market
value upon termination or completion of
the award. and if the supplies are not
needed for any other Cederally
sponsored program. or projects. the
grantee or .ubgrantee shall compen.ate
the awarding agency for its share.
~ 85.34 Copyrights.
The Federal aWllrding agency
reserve. 0 royalty-free. nonexclusive.
and irrevocable license to reproduce.
publish or otherwise use. and to
authorize others to use. for Federal
Government purposes:
(a) The copyright in any work
developed under a grant. subgrant. or
contract under a grant or subgrant and
(b) Any rights of copyright to which a
grantee. subgrantee or a contractor
purchases ownership with grant support.
~ 85.35 Subawards .to debarred and
suspended 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 mehglbleo
for participation in Federal assi5tance
programs under Executivl! Or.?er 12549.
"Debarment and Suspen:non.
~ 85.36 Procurement
(a) States. When procuring prope~
and services under a grant. a State Wlll
follow the same policiell and procedures
it uses for procurements from ill! 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 subgranlees wlll
follow paragraphs (blthrough (i) in this
section.
(bl Procurement standards, (1)
Gra~tees and subgrantees will use their
own procurement procedures which
reflect applicable State and loc~llaws
and regulations. pro\;ded that hle
procurements conform to applicable
Federllllaw and the standards identified
in this section.
(2) Grantees and su~a~tees ,wHl
maintain a contract administration
system which ensures th~1 c~ntractors
perform in accordan~e wI!h tne term.s.
conditions, and speCifications of theIr
Published by Warren, Gomam & Lamont. Inc.
I
HDR RF-372
4-25-88
contracts or purchase orders.
(3) Grantees and subgrantees will
maintain a written code of standards of
conduct governing the performance of
their employees engaged in the award
and administration of contracts, No
employee. officer or agent of the grantee
or subgrantee shall participate in
selection. or in the award or
adminiltration of a contract supported
by Federal funds if a conflict of interest.
real or apparent. would be involved.
Such a conilict wpuld arise when:
(i) The employee. officer or agent.
(ii) Any member of hi. immediate
family.
(ijj) His or her partner. or
(ivJ An organization which employs.
or is about to employ. any of the above.
has a financial 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
subagreements. Grantee and
subgrantees may set minimum rules
where the financial interest is not
substantial or the gift isan 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. sanc~ion~. or
other disciplinary actions for Vlolahons
of such standards by the gral1tee's and
subgrantee's officers. employees. or
agents. or by contractors o~ their age,nts.
Tha awarding agency may U1 reguJa~on
provide additional prohibitions relative
to real. apparent. or potential conflicts
of interest.
(4) Grantee and subgrantee _
procedures will provide for a review of
proposed procurements 10 avoid
purchase of unnecessary or dupl~cative
items. Consideration should be gIven to
consolidating or breaking out
procurements to obtain a more
economical purchase. Where
appropriate. an analysis will be made of
lease versus purchase alternatives. and
anv other appropriate analysis to
determine the most economical
approach.
(5) To foster greater economy and
efficiency, grantees and subgrantees are
encouraged to enter into Slate and local
intergovernmental agreements for
procurement or use of common goods
and services,
(6) Grantees and subgrantees are
encouraged to use Federal excess ~nd
surplus property in lieu of purchaSing
new equipmenl and property whenever
such use is feasible and reduces project
costs.
49
(7) Grantees and .ubgrantees are
encouraged to use vahle engineering
clauses in contract. for construction
projects of sufficient size to offer
reasonable opportunities for cost
reductions. Value engineering i. a
systematic and creative anaylsis of each
contract item or task to ensure that its
essential function is provided at the
overall lower COlt.
(8) Grantees and subgrantees will
make awards only to responl!ible
contractors posse.sing the ability to
perform successfully ander the terms
and condition. oia proposed
procuremenL Coll8idera tion will be
given to such matters 8S contractor
integrity. compliance with public policy.
record of past performance. and
financial and technical resources.
(9) Grantees and lubgrantees will
maintain records sufficient to detail the
significent history of a procurement.
These records will include. but are not
necessarily limited to the following:
rationale for the method of procurement.
selection of contract type, contractor
selection or rejection. and tire basis for
the contract price.
(10) Grantees and subgrantees will
use time md. material type contracts
onlv-
(i) After a determination lhat no other
contract is suitable. and
(ii) If the contract includes a ceiling
price that the contractor exceeds at its
own risk.
(11) Grantees and subgrantees alone
will be responsible. in accordance with
good administrative practice and sound
business judgment. for the .ettlement of
all contractual and administrative issues
arising out of procurements. These
issues include, but are not limited to
source evaluation. protests. disputes.
and claims. These standards do not
relieve the grantee or subgrantee of any
contractual responsibilities under its
contracts, Federal agencies will not
substitute their judgment for that of the
grantee or subgrantee unless the matter
is primarily a Federal concern,
Violations of law will be referred to the
local. State. or Federal authority having
proper jurisdiction.
(12) Grantees and subgrantees will
have protest procedures to handle Bnd
resolve disputes relating to their
procurements and shall in all instances
disclose information regarding the
protest to the awarding agency. A
protestor must exhaust all
administrative remedies with the
grantee and subgrantee before pursuing
a protest with the Federal agency.
Reviews of protests by the Federal
agency will belimiled 10:
(i) Violations of Federal law or
regulations and the slandards of lhis
section (violations of Slate or local law
- - - - --- . - ........ ,..., ..., ~ , .......,'-'.&. .L,....L"J....l. ~4U.l'\.1 L.K
IWill 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 protest.
Protests received by the Federal agency
other than. those specified above will be
referred to the grantee or subgrantee.
(c) Competition. (1) All procurement
transactions will be conducted in a man-
ner providing full and open competition
consistent with $e standards ~ 85.36.
Some of the situations considered to be
restrictive oC competition include but are
not limited to:
(i) Placing unreasonable requir:ments
on firms in order for them to qualify to
do business.
(ii) RequiriD8 unnecessary experienC1!
and excessive bonding.
(Hi) Noncompetitive pricing practices
between firms or between affiliated
companies.
(iv) Noncompetitive awards to
consultants lhat are on retainer
contracts..
(v) Organiza tional conflicts of
interest,
(vi) SpeGifying only a "brand name"
product instead of allowing "an equal"
product to be offered and describing the
performance of other relevant
requirements of the procurement. and
(vii) Any arbitrary action in the
procurement process.
(2) Grantees and subgrantees will
conduct procurements in a manner that
prohibits the use of .ata~torily or
administratively imposed in-Slate or
local geographical preferences in the
evaluation of bids or proposals. except
in those cases where applicable Federal
stalute1i ~xpressly 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 8
selection criteria provided its
application leaves aa appropriate
number of qualified firms. given the
nature and size of the project. to
compete for the COQtract.
(3) Granteel will have written
selection procedures for procurement
transactions. These procedures will
ensure that all solicitations:
(i) 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
prod~t specifications should be
evoi'-ci if at all possible. 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 81 a
means to define the performance or
other salient requirements of a
procurement. Tbe specific features of the
named brand which must be met by
offerors shall be clearly stated; and
(ii) Identify all requirements which the
offerors must fulfill and all other factors
to be used in evaluating bids or
proposals.. .'
(4) Grantees and subgrantees will
ensure that all prequaJified lists of
persons. fU'l11s, or products whic~ are
used in acquiring goods and services are
current and include enough qualified
sources to ensure maximum open and
free competition. Also, grantees and
subgrantees will not preclude potential
bidders from qualifying during the
solicitation period.
(d) Methods of procurement to be
fallowed. It) Procurement by small
purchase procedures. Small purchase
procedures are those relatively simple
and informal procurement methods for
securing services. suppli~. or otlJer
property that do not cost more than
S25.ooo in the aggregate. If small
purchase procurements are used, price
or rate quotations will be obtained from
an adequate number of qualified
sources.
(2) Procurement by sealed. bids (f~~a1
advertising). Bids ate pubhcly sohclted
and a firm-fIxed-price contract (lump sum
or unit price) is awarded to the responsible
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 consuuC?tion, if the condi-
tions in .~ 85.36(d)(2)(1) apply.
(i) In order for sealed bidding to be
feasible. the following conditions should
be present:
(Al A complete. adequate. and
realistic specification or purchase
description is available;
(B) Two or more responsible bidders
are willing and able to compete
effectively for the business; and
(C) The procuremem lends itself to a
filT1l rued price contract and the
selection of the successful bidder can be
made principally on the basis of price.
(ii) If sealed bids are used. the
following requirements apply:
(A) The invitation for bids wiiJ 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 specifica lions and pertment
50
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/
I
COMMUNITY DEVELOPMENT
J
attachments. shall define the items or
services in order for the bidder to
properly respond.:
(C) All bids will be publicly opened at
the time and place prescribed in the
invitation for bids;
{D) A firm fixed-prtce contract award
will be made in writing to the lowest
responsive and re&ponsible bidder.
Where specified in bidding documents.
factors S!I:Ic:h as discounts. transportation
cost. and life cycle costs shall be
considered in de1ermining which bid is
lowest. Payment diacOU%lts will only be
used to determine the. low bid when
prior experience indicates that such
discounts are usually taken advantage
of: and
(E) An,! or art bids may be rejected if
there is a S'Ol1nd documented reason,
13} Procurement by competitive
proposals. The technique of competitin
proposals is normally conducted with
more than one source submitting an
offer. and either a fixed-price or oost-
reimbur!'emeflt type contract is
awarded. It ill gener-ally l1sed when
conditions are not appropriate for the
use of sealed bids. If this method is
used. the following requirements apply:
(i) Requests for proposals will be
pubHci~d and identify all evaluation
factors and their relahYe importance.
Any response to pubficized requests for
proposals shall ~ honored to the
maximum extent practical:
(ii) Proposais will be solicited from an
adequate number of qualified sources:
(iii) Grantee5 and subgrantees will
have a method for conducting technical
evaluations of the p1'oposals received
and for selecting awardees:
(iv) Awards will be made to the
responslble firm whose proposal is most
advantageous to tbe program, with price
and other factors consi~red: and
(v) Grantees and subgrantces may use
competitive proposal procedures for
qualifications-based procurement of
archi tecturall engineering (AlE)
professional services whereby
r.ompetitors' qualifications are
evaluated and the most qualified
competitor is selected. subject to
negotiation of fair and reasonable
compensation. The method, where pri(;t!
is not used as a selection factor. can
only be used in procurement of A/E
professional services. It cannot be used
to purchase other types of services
though AlE firms are a potential source
to p.erform the proposed effort.
(4) Procurement by noncompetitive
proposals is procurement through
solicita tion of a proposal from only one
source. or after solicitation of a number
of sources, competition is determined
inadequate.
(i) Procurement by noncompetitive
)
if
~
.~..
1"
~~.
proposals may be used only when the
award oJ a contract is infeasible under
small purchase procedures. sealed bids
or competitlw proposals and one of the
following circumstances applies:
(A) The item is available only from a
single source:
(BIThe public exigency or emergency
for the requirement will not permit a
delay resulting from competitive
solici ta tion.
(C) The awarding agency authorizes
noncompetitive proposals: or
(D) After solicitation of a number of
sources, competition is determined
inadequate.
(ii) Cost analysis. i.e.. verifying the
proposed cost data: the projections of
the data. and the evaluation of the
specific elements of costs and profit. is
required.
(iii) Grantees and subgrantees may be
required to submit the proposed
procurement to the awarding agency for
pre-award review in accordance with
paragraph (g) of this section.
(e) Contracting with small and
minority firms. women's business
enterprise and labor surplus area firms,
(1) The grantee and subgrantee will take
all necel" 1ry affirmative steps to assure
that minority firms. women's business
enterprises. and labor surplus area firms
are used when possible.
(2) Affirmative steps shall include:
(i) Placing qualified small and
minority businesses and women's
business enterprises on solicitation lists;
(ii) Assuring that small and minority
businesses. and women's business
enterprises are solicited whenever they
are potential sources:
(iii) Dividing total requirements. when
economically feasible, into smaller tasks
or quantities to permit maximum
participation by small and minority
business. and women's business
enterprises;
(iv) Establishing delivery schedules.
where the requirement permits, which
encourage parti::ipation 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 actipn including
contract modifications. The method and
degree of analysis is dependent on the
fact:; surrounding the particular
procurement situation, but as a starting
Published by Warren, Gorham & Lamont. Inc.
1
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 resonableness can be established
on the basis of a catalog or market price
of a commercial product sold in
substantial quantities to the general
public or based on prices set by law or
regulation. A price analysis will be used
in all other instances to determine the
reasonableness of the proposed contract
orice.
- (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 under 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 g 85.22). Grantees.
may reference their own cost principles
that comply with the applicable Federal
cost principles.
(4) The cost plus a percentage of cost
and percentage of construction cost
methods of contracting shall not be
used,
(g) A warding agency review. (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 tha t the item and I or
service specified is the one being
proposed for purchase. This review
generally will take place prior to the
time the specification is incorp.orated
into a solicitation document. However. if
the grantee or subgrantee desires to
have the review accomplished after a
solication has been developed, the
awarding agency may still review the
specifications, with such review usually
limited to the technical aspects of the
proposed purchase.
(2) Grantees and subgrantees must on
request make available for awarding
agency pre-award review ( delete ..,..)
51
09:1562
procurement documents, such as
requests for proposals or 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
(H) The procurement is expected to
exceed $25.000 and is to be awarded
without competition or only one bid or
offe.r is received in response to a
solicitation; or
(Hi) The procurement, which is
. expected to exceed $25.000. specifies a
"brand name" product: or
(iv) The proposed award over $25,000
is to be awarded to other than the
apparent low bidder under a sealed bid
procurement; or
(v) A proposed contract modification
changes the scope of a contract or
increases the contract amount by more
than $25,000.
(3) A grantee or subgrantee will be
exempt from the pre-award review in
paragraph (g)(2) of this section if the
awarding agency determines that its
procurement systems comply with the
standards of this section.
(i) A grantee or subgrantee may
.requestthat its procurement system be
reviewed by the awarding agency to
detennine whether its system meets
these standards in order for its svstem
to be certified. Generally, these ;eviews
shall occur where there is a continuous
high-dollar funding. and third-party
contracts are awarded on a regular
basis: .
(ii) A grantee or subgrantee may self.
certify its pcocurement system. Such
self-certification shall not limit the
awarding agency's right to survey the
system. Under a.self-certification
procedure, awarding agencies may wish
to rely on written assurances from the
grantee or subgrantee that it is
complying with these standards. A
grantee or subgrantee will cite specific
procedures, regulations, standards. etc..
as being in compliance with these
requirements and have its system
available for review.
(,h) 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 to five percent of the bid
price. The "bid guarantee" shall consist
of 3 firm commitment such as a bid
HOUSING AND DEVELOPMENT REPORTER\
bInd. certlfied check, or other (construltion contracts awarded by \
n~~wtiilble instrument accompanying a grantees and subgrantees in excess of
bid as assurance that the bidder will, 52.000, and in excess of 52.500 for other
upon acceptance of his bid, execute contracts which involve the employment
such contractual documenls as may be of mechanics or laborers)
rp.quired within the time specified. (7) Notice of awarding agency
(2l A performance bond on the part of requirements and regulations pertaining
the contractor for 100 percent of the to reporting,
can tract price: A "perfo~manc.e bond" is (8) Notice of awarding agency
one executed In conn~cllon WIth a requirements and reguJal10ns pertaining
contractt~ secu!e f~lflllment of all the to patent rights with respect to any
contractor s obhgahons under such discovery or invention which arises or is
contract. developed in the course of or under such
(3) A payment bond on the part of the tr t
cantroctor for 100 percent of the con ac, . .
contract price. A "payment bond" is one (9) Awar~mg agen~y .requlrements
executed in connection with a contract and regulatlons pertamlng to copynghl!l
to assure payment as required by law of and rights in data.
all persons supplying labor and material (10) Access by the grantee, the
in the execution of the work provided 8ubgrantee, the Federal grantor agency
for in the contract. the Comptroller General of the United
(i) Contract provisions. A grantee's States, or any of their duly authorized
and subgrantee's contracts must contain representatives to any books,
provisions in paragraph (i) of this documents, papers, and records of the
Section. Federal agencies are permitted contractor which are directly pertinent
to require changes; remedies. changed to that specific contract for the purpose
conditions. access and records of making audit, examination. excerpts,
retention. suspension of work. and other and transcriptions.
clauses approved by the Office of (11) Retention of all required records
Procurement Policy. for three years after grantees or
(1) Admi~ist~ati.ve. contractual. or subgrantees make final payments and
legal remedle.s In Instances where all other pending matters are closed.
contractors vlol~te or breach con~ract (12) C Iianc with all applicable
terms. and prOVide for such sanctions t d domp de. ments
d . I . . b . s an ar s, or ers, or require
. an pena tle.s as may e appropnate. . d d t' 306 f th Cl ar AI'r
h h II h Issue un er sec Ion 0 e e
(Contracts .ot ~r t an sma purc ases) A (2 use 1857(h)) r n 508 of the
(2) TermlnalJon for cause and for ct 4 '" . sec 10
convenience by the grantee or Clean ~ater Act (33 U.S.C. 1368).
subgrantee including the manner by Exe~utlve Order 11738: anc
which it will be effected and the basis Environmental Protecl1on Agency
Cor settlement. (All contracts in excess regulations (40 CFR Part 15). (Contracts.
of $10.000) ~ubcontracts. and subgrants of amounts
(3) Compliance with Executive Order In excess of $100,(00)
11246 of September 24, 1965 entitled (13) Mandatory atandards and policies
"Equal Employment Opportunity," as relating to energy efficiency which are
amended by Executive Order 11375 of cont3ined in the state energy
October 13.1967 and as supplemented in conservation plan issued ill compliance
Department of Labor regulations (41 with the Energy Policy and
CFR Part 60). (All construction contracts Conservation Act [Pub. l.. 94-163).
awarded in excess of $10.000 by ~ 85.37 Subgrants.
grantees and their contractors or (a) StaLes. States shall follow stale
subllrantees) law and procedures when awarding and
(4) Compliance with the Copeland administering subgrants (whether on a
"Anti-Kickback" Act (18 U.S.C. 8741 as cost reimbursement or fixed amount
supplemented in Department of Labor basis) of financial assistance to local
regulations (29 CFR Part 3). (All and lDdian tribal governments. States
contracts and subgrants for construction shall:
or repair) (1) Ensure that every subgrant
(5) Compliance with the Davis-Bacon includes ~ny clauses requi~ed by
Act (40 U.S.C. 276a to a-7) as Federal sta tute and executive ~rders
supplemented by Department of Labor and their implementing regulalJons:
regulations (29 CFR Part 5). (2) Ensure that subgrantees are aware
[Construction contracts in excess of of requirements imposed upon them by
52.000 awarded by grantees and Federal statute and regula lion:
subgrantees when required by Federal (3) Ensure that a provision for compli-
grant program legislation) ance with Section 85.42 is placed in every
(6) Compliance with Sections 103 and cost reimbursement sub.uant: and
107 of the Contract Work Hours and (4) Conform any advances of grant
Safety Standards Act (40 U,S,C. 327-330) funds to subgrantees substantially to the
as supplemented by Department of same standards of timing and amount
Labor regulations (29 CFR Part 5). that apply to cash advances by Federal
agencIes.
Published by Warren, Gorham & Lamont. Inc.
51
COMMUNITY DEVELOPMENT
]
(b) All other grantees. All other grantees
shaH 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 shaH:
(I) Ensure that every subgrant includes
a provision for compliance with this part;
(2) Ensure that every subgrant includes
any clauses required by Federal statute
and executive orders and their imple-
menting regulations; and
(3) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statutes and regulations.
(c) Exceptions. By their own terms,
certain provisions of this part do not
apply to the award and administration of
subgrants:
(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 985.21; and
(4) Section 85.50.
:-.
";
.J~-
-
Reports, Records, Retention, ~nd
Enforcement
~ 85.40 Monitoring and reporting
program performance.
/ (a) Monitoring by grantees. Grantees
are responsible for managing the d~o-
day operations of grant and subgrant
supported activities. Grantees must mon-
itor grant and subgrant supported activi-
ties to assure compliance with applicable
Federal requirements and that perfor-
mance goals are being achieved. Grantee
monitoring must cover each program,
function or activity.
(b) Nonconstruction performance reo
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 perfonnance report
only upon expiration or tennination of
grant support. Unless waived bv the Fed-
eral agency this report will be due on the
same date as the final Financial Status
Report.
(I) Grantees shall submit annual per- '
fonnance reports unless the awarding
agency requires quarterly or semiannual
reports. However, perfonnance reports
will not be required more frequently than
quarterly. Annual reports shall be due 90
day~ after the grant year, quarterly or
semi-annual reports shall be due 30 davs
after the reporting period. The final per-
formance report will be due 90 days after
the expiration or termination of grant
support. If a justified request is submitted
by a grantee, the Federal agency may
extend the due date for any performance
report. Additionally, requirements for un-
necessary performance reports may be
waived by the Federal agency.
(2) Performance reports will contain,
for each grant, brief infonnation 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 infonnation will be useful.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(iii) Additional pertinent information
including, when appropriate, analysis and
explanation of cost overruns or high unit
costs.
(3) Grantees will not be required to
submit more than the original and two
copies of performance reports.
(4) Grantees will adhere to the stan-
dards in this section in prescribing perfor-
mance reporting requirements for sub-
grantees,
(c) Construction performance reports.
For the most part, on-site technical in-
spections and certified percentage-of
completion data are relied on heavily by
Federal agencies to monitor progress un-
der construction grants and subgrants.
The Federal agency will require addition-
al formal performance reports only when
considered necessary, and never more
frequently than quarterly.
(d) Significant developments. Events
may occur between the scheduled perfor-
mance reporting dates which have signifi-
cant impact upon the grant or subgrant
supported activity. In such cases, the
grantee must inform the Federal agency
as soon as the following types of condi-
tions become known:
( I) Problems, delays, or adverse condi-
tions which will materially impair the
ability to meet the objective of the award.
This disclosure must include a statement
of the action taken, or contemplated, and
any assistance needed to resolve the situa-
tion.
(2) Favorable developments which en-
able meeting time schedules and objec-
tives sooner or at less cost than antici-
pated or producing more beneficial re-
sults than originally planned.
(e) Federal agencies may make site
visits as warranted by program needs.
(I) Waivers, extensions. (J) 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 reporting obliga-
tions to the Federal agency.
985.41 Financial reporting.
(a) General. (I) Except as provided in
paragraphs (a)(2) and (5) of this section,
grantees will use only the forms specified
in paragraphs (a) through (e) of this
section, and such supplementary or other
forms as may from time to time be
authorized by OMB, for:
(i) Submitting financial reports to Fed-
eral agencies, or
(ii) Requesting advances or reimburse-
ments when letters of credit are not used.
(:!) Grantees need not apply the forms
prescribed in this section in dealing with
their subgrantees. However, grantees shall
not impose more burdensome require-
ments on subgrantees.
(3) Grantees shall follow all applicable
standard and supplemental Federal agen-
cy instructions approved by OMB to the
extend required under the Paperwork
Reduction Act of 1980 for use in connec-
tion with forms specified in paragraphs'
(b) through (e) of this section. Federal
agencies may issue substantive supple-
mentary instructions only with the ap-
proval of OMB. Federal agencies may
shade out or instruct the grantee to disre-
gard any line item that the Federal agency
finds unnecessary for its decisionmaking
purposes. . .
(4) Grantees will not be required to
submit more than the original and two
copies of forms required under this part.
(5) Federal agencies may provide com-
puter outputs to grantees to expedite or '
contribute to the accuracy of reporting.
Federal agencies may accept the required
information from grantees in machine
usable format or computer printouts in-
stead of prescribed forms.
. (6) Federal agencies may waive any
report required by this section if 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-(I) 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
9 85.4t(e)(2)(iii) of this section.
(2) Accounting basis. Each grantee will
report program outlays and program in-
come on a cash or accrual basis as pre-
scribed by the awarding agency. If the
Federal agency requires accrual informa-
tion and the grantee's accounting records
are not nonnally kept on the accrual
basis, the grantee shall not be required to
convert its accounting system but shall
15
09: 1564
develop such accrual information through
and analysis of the documentation on
hand.
(3) FrequencJ'. 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 freque'ncy of the
report, it will be submitted annuallv. A
final report will be required upon expira-
tion or termination of grant support.
(4) Due date. When reports are re-
quired on a quarterly or semiannual ba-
sis, they will be due 30 days after the
reporting period, When required on an
annual basis, they will be due 90 days
after the grant year. Final reports will be
due 90 days after the expiration or termi-
nation of grant support.
(c) Federal Cash Transactions Report-
(I) Form. (i) For grants paid by letter or
credit, Treasury check advances or elec-
tronic transfer of funds, the grantee will
submit the Standard Form 272, Federal
Cash Transactions Report, and when nec-
essary, its continuation sheet, Standard
Form 272a, unless the terms uf the award
exempt the grantee from this require-
ment.
(ii) These reports will be used by the
Federal agency to monitor cash advanced
to grantees and to obtain disbursement or
outlay information for each grant from
grantees. The format of the report may be
adapted as appropriate when reporting is
to be accomplished with the assistance of
automatic data processing 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
attions 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 authoriz.ed at an
annualiz.ed 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
I
(This form will not be used for draw-
downs under a letter of credit, electronic
funds transfer or when Treasury check
advance payments are made to the grant-
ee automatically on a predetermined ba-
sis.)
(2) Reimbursemellls. Requests for
reimbursement under nonconstruction
grants will also be submitted on Standard
Form 270. (For reimbursement requests
under construction grants, see paragraph
(e)(I) of this section.)
(3) The frequency for submitting pay-
ment requests is treated in ~ 8S.4I(b)(3),
(e) Outlay report and request for reim.
bursement for construction programs-( I)
Grants that support construction activi-
ties paid by reimbursement method. (i)
Requesters for reimbursement under con-
struction grants will be. submitted on
Standard Form 271, Outlay Report and
Request for Reimbursement for Con-
struction Programs. Federal agencies
may, however, prescribe the Request for
Advance or Reimbursement fonn, speci-
fied in ~ 8S.4I(d), instead of this form.
(ii) The frequency for submitting reim-
bursement requests is treated. in
. ~ 8S.41(b)(3).
(2) Grants that support construction
activities paid by letter of credit, electronic
funds transfer or Treasury check advance.
(i) When a construction grant is paid by
letter of credit, electronic funds transfer
01' Treasury check advances, the grantee
will report its outlays to the Federal
agency using Standard Form 271, Outlay
Report and Request for Reimbursement
for Construction Programs. The Federal
agency will provide any necessary special
instruction. However, frequency and due
date shall be governed by ~ 8S.4I(b)(3)
and (4).
(ii) When a construction grant is paid
by Treasury check advances based on
periodic requests from the grantee, the
advances will be requested on the form
specified in ~ 85.4I(d).
(iii) The Federal agency may substitute
the Financial Status Report specified in
~ 85.4I(b) for the Outlay Report and
Request for Reimbursement for Con-
struction Programs.
(3) Accounting basis. The accounting
basis for the Outlay Report and Request
for Reimbursement for Construction Pro-
grams shall be governed by ~ 85.41 (b )(2).
~ 85.42 Retention and access
requirements for records.
(a) Applicability. (I) This section ap-
plies to all financial and programmatic
records, supporting documents, statistical
records, and other records of grantees or
subgrantees which are:
PubliShed by Warren. Gortlam & 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 ~ 85.36(i)(l 0).
(b) Length of retention period. (1) Ex-
cept as otherwise provided, records must
be retained for three vears from the
starting date specified in 'paragraph (c) of
this section.
(2) If any litigation, claim, negotiation,
audit or other action involving the rec-
ords has been started before the expira-
tion of the 3-year period, the records
must be retained until completion of the
action and resolution of all issues which
arise from it, or until the end of the
regular 3-year period, whichever is later.
(3) To avoid duplicate recordkeeping,
awarding agencies may make special ar-
rangements with grantees and subgran-
tees to retain any records 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-
(I) General. When grant support is con-
tinued or renewed at annual or other
intervals, the retention period for the
records of each funding period starts on
the day the grantee or 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 starts on the day
the grantee submits its expenditure report
for the last quarter of the Federal fiscal
year. In all other cases, the retention
period starts on the day the grantee
submits its final expenditure report. If an
expenditure report has been waived, the
retention period starts on the day the
report would have been due.
(2) Real proper'y and equipment rec-
ords. The retention period for real proper-
ty and equipment records starts from the
dale of the disposition or replacement or
transfer at the direction of the awarding
agency.
(3) Records for income transactions
after grant or subgrant support. In some
cases grantees must report income after
the period of grant support. Where there
is such a requirement, the retention peri-
od for the records pertaining to the earn-
16
COMMU.NlTY l)EY t.LOPMt.NT
I
~.
,~
ing of the income stans from the end of
the grantee's fiscal vear in which the
income is earned. .
(4) Indirect cost rate proposals, cost
allocations plans, etc. This paragraph ap-
plies to the following types of documents
and their supporting records: Indirect
cost ra~e computations or proposals, cost
~lIocatlon pla~s, and any similar ac~ount-
Ing computatIons of the rate at which a
particular group of costs is chargeable
(such as computer usage chargeback rates
or composite fringe benefit rates).
(i) If submiaed for negotiation. If the
proposal, plan, or other computation is
required to be submitted to the Federal
Government (or to the grantee) to form
the basis for negotiation of the rate, then
the .3-year retention period for its sup-
portIng records starts from the date of
such. submission.
(ii) If not submiaed for negotiation. If
~he proposal, plan, or other computation
IS not required to be submitted to the
Federal Government (or to the grantee)
for negotiation purposes, then the 3-year
retention period fo: tlu: proposal plan, or
computatIon and ItS supporting records
~tarts fr<?m end of the fiscal year (or other
accountIng period) covered by the pro-
posal, plan, or other computation.
(d) Subst!tution ~f microfilm. Copies
ma~e by mIcrofilmIng, photocopying, or
SImIlar methods mav be substituted for
the original records:
(e) Access to records-(l) Records of
grantees and subgranzees. The awarding
agency and the Comptroller General of
t~e United States, or any of their autho-
rized representatives, shall have the right
of access to any pertinent books, docu-
ments, papers, or other records of grant-
ees and subgrantees which are pertinent
to the grant, in order to make audits
examinations, excerpts, and transcripts,'
. (2) Expiration of right of access. The
r.lg~ts of access in this section must not be
hmlted to the required retention period
but .shall last as long as the records are
retaIned.
(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 and subgrantees are not
reqUired to permit public access to their
records.
..
,
'"""
~ 85.43 Enforcement.
(a) Remedies for noncompliance. If a
grantee or subgrantee materiallv fails to
comply with any term of an award,
whether stated in a Federal statute or
regulati~n. an assurance, in a State plan
or apphcatlon, a notice of award or
elsewhere, the awarding agency mily ~ake
one or more of the following actions as
appropriate in the circumstances: '
(I) Temporarily withhold cash pav-
ments pending correction of the deficien-
cy by the grantee or subgrantee or more
~evere enforcement action by the award-
Ing agency.
(2) Disallow (that is, deny both use of
funds and matching credit for) all or part
of the cost of the activity or action not in
compliance,
(3) Wholly or partly suspend or termi-
nate the current award for the grantee's or
subgrantee's program,
(4) Withhold further awards for the
program, or
(5) Take other remedies that may be
legally available.
(b) Hearings, appeals. In taking an
e~forcem.ent action, the awarding agency
Will prOVide the grantee or subgrantee an
opportunity for such hearing, appeal or
other administrative proceeding to which
the grantee or subgrantee is entitled under
any statute or regulation applicable to the
action involved.
(c) Effects of suspension and termina-
tion. Costs of grantee or subgrantee re-
sulting from obligations incurred bv the
grantee or subgrantee during a suspension .
or after termination of an award are not
allowable unless the awarding agency
expressly authorizenhem in the notice of
suspension or termination or subsequent-
ly. Other grantee or subgrantee costs
during suspension or after termination
whi~h are necessary and not reasonably
aVOIdable are allowable if:
<-: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,
(1) The costs would be allowable if the
award were not suspended or expired
~orm~lIy at the end of the funding period
In whIch the termination takes effect.
(d) Relationship to debarment and sus-
pension. The enforcement remedies iden-
t~fied in this section, including suspen-
sIon and termination, do not preclude
grantee or subgrantee from being subject
to "Debarment and Suspension" under
E.O. 12549 (see ~ 85.35).
~ 85.44 Termination for convenience.
Except as provided in S 85.43 awards
may be terminated in whole or in part
only as follows:
(a) By the awarding agency with the
co~sent of the grantee or subgrantee in
which case the two parties shall agree
upon the termination conditions. includ-
mg the effective date and .in the case of
partial termination, the portion to be
terminated, or
Publisheo by Warren. Gorham & lamOnt. Inc.
I
U~: 1 bbo
HDR RF -41 i
1-15-90
(b) By t~e grantee or subgrantee upon
wntten nOl1fical1on to the awarding agen-
cy, settlng forth the reasons for such
termination, the effective date, and in the
case of l;'artial termination, the portion to
be termInated. However, if, in the case of
a partial termination, the awarding agen-
cy determInes that the remaining portion
of the award will not accomplish the
purposes for which the award was made
the awarding agency may terminate th~
award in its entirety under either ~ 85.43
or paragraph (a) of this section.
Subpart D-Atter- 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 tennination of the grant, the
grantee must submit all financial, perfor-
mance, and other reports required as a
condition of the grant. Upon request by
the grantee, Federal agencies mav extend
this timeframe. These mav inciude but
are not limited to: .
(I) Final performance or progress re-
porI.
(2) Financial Status Report (SF 269) or
Outlay Report and Request for Reimburse.
ment for Construction Programs (SF-27 I)
(as applicable).
(3) Final reques' for payment (SF-270)
(if applicable). .'
(4) Invention disclosure (if applicable).
(5) Federally-owned property report: In
accordance with S 85.32(1), 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 adjustmenz. 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 adjustmenzs. (I) The Federal
agency will make prompt payment to the
grantee for allowable reimbursable costs.
(2) The grantee must immediately re-
fund to the Federal agency any balance of
unobligated (unencumbered) cash ad-
vanced that is not authorized to be re-
tained for use on other grants.
~ 85.51 Later disallowances and
adjustments.
The closeout of a grant does not affect:
17
09:1566
(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 prop.erty management requirements
in ~ 85.31 and 85.32; and
(e Audit requirements in ~ 85.26.
~ 85.52 Collection of amounts due.
(a) Anv funds paid to a grantee in
excess ofihe amount to which the grantee
I
HOUSING AND DEVELOPI,1EJ\TT tzEPORTER
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:
(I) Making an administrative offset
against other requests for reimburse-
ments,
(2) Withholding advance payments
otherwise due to the grantee, or
(3) Other action permitted by law.
(b) Except where otherwise provided by
statutes or regulations, the Federal agency
Published by Warren. Gorham & Lamont. Inc.
will charge interest on an overdue debt in
accordance with the Federal Claims Col-
lection Standards (4 CFR Ch. II). The
date from which interest is computed is
not extended by litigation or the filing of
any form of appeal.
Subpart E-Entitlement [Reserved]
Dated: February 10, 1988.
Carl D. Covitt,
Acting Secretary.
18
COMMUNITY lJEVi:.:LUPM'c.:I'T BLOCK li.H.A!\T::l
U8:1:>Ul
HDR RF-185
3 - 9- 81
I APPENDIX J I
COST PRINCIPtES FOR STATE AND LOCAL ~VERNMENTS
OMB CIRCULAR A-8?
OFACE OF MANAGEMENT AND
BUDGET
eost Principles for State and Local
Governments
[46 FR 9548, Jan, 28, 1981)
: ';:\.
....
...
~.5
ACTION: Final policy.
SUMMARY: This notice advises that
Federal Management Circular 74-4
(Revised), da ted July 18, 1974, is
reissued under its original desi,lmation of
Office of Management and Budget
Circular No. A~7. No substantive
changes arc made in the Circular. The
Circular is set forth below in its entircty,
EFFECTIVE DATE: The revision was
effective January 15, 1981,
FOR FURTHER INFORMATION CONTACT:
Palmer Marcantonio, Deputy Chief.
financial Manegement Branch, Budget
Review Division, 6002 New Executive
Office Building, Washington, D.C. 20503,
202/395-4773,
TO OBTAIN SINGLE COPIES OF THE
CIRCULAR, CO/'ITACT: Docume!lt
Distributio:l Center, Ofiic:e of
Administration. G-Z.16 New Executive
Office Building, Washington, D.C. 20503.
TO OB1'AIN. MULTIPLE COPIES, COSTACT:
St:perin~endent of Documenls, U.S.
Government Prir:.~jng Office.
WashingtCtn. D.C. ~O~G2.
Danjel F. Mace..
Budget a:10' ....1unagemen' Officer.
January 15, 198:.
To: The Heads of Executil:e Departments and
Esta!>iishmr.nts.
Subject: Cost ?rinr::pl~s for Slate and Iuc'il
gove!'TUlle:lls.
1. p,.rposp.. This Ci.cular establishes
principles and standards for delermining
costs applicable 10 gr,mts, contral:ls, and
other agreemen:s with S~ate and lor.;])
governments and r~deralJy-recognizeci Ir:dian
tribal governments,
2.. Supersession. .Thi.~ Circular super~edes
Federal Management Cb:ular 74-1 as
revised. The Circular is reissued under its
original designation of m..m Circular A-87.
3. Summory of chanses. No subslitntive
changes are r:lade in thr. Circular.
4. Po lie)' inrer.t This Circular provice,
principles for delerr:lining the allow:.ble cosls
of programs Adminislered by State. locaL and
federally-recognized Indian trih:!1
governments under !trants fro:n SInd contracts
with the Federal Government. Thc\' are
designed 10 provide tl~e basis for a' uniform
approach 10 thc p.oblem of delcrmining costs
and 10 promote e:11cien.:y and bl:ller
relationships between gr'antees and the
Federal Gover.:::-:ent. The principles are for
determining cos.:.s onlv and are nol intended
to identify the circum~lances nor to dicta Ie
the extent of Federal and Slate or local
participa lion in the fjn,<ncing of a particular
p.ojecL They are designed 10 provide lhat
federally-assisted progr~ms bedr their fair
ahan ol corti recogniz.ed UDder theae
pnnciplel except where reltricted or
prohibiled by la w. No provision for profit or
other increment above coat il inlended.
5. Applicability and .cope.
a. The proviaionl of thia Circulllor apply to
all Federal agenciel reaponaible for
adminiateril\8 programa that involve granll
and contnlctl with Slale, local and federally-
recognized Indian tribal governments.
b. III proviaiona do not apply 10 grants and
contncta with:
(1) Publicly-rlllanced educationul
institutions aubjectlo O~ce ol MlIonagement
and Budget Circular A-::l, and
(2) Publicly owned hospilals and other
providen of medicllol care subject 10
requirement! promulgated by the sponsoring
Federal agencies.
Any other exceptions will be dpproved by
the Office oC Manageocnt and Dudget in
particular cases where Adequate justification
is presenled.
6. At:ochmen/s. The principles and related
polig' guides are let forth In the attachments,
which are:
Allachmenl A-Principles Cor delemlining
cosla applicable 10 {!rants and contra cis
with Slate, local. and lederNI!y.recogni:ted
indian tribal governmenlJ!.
Allachment B-Slilno.aras for lIelc:cted items
. oC cosl..
7./nquiries. F-.:.rther In:onnillion concem~
thIs Circular !lJay b~ obtained by contacting
the Financial M..nagem.ml .Eran::h, Budget
Review Dh'ision, Office of M'!.n;r~ement and
Budget. Wuhinglon. D.C. 205!):3_ Icieplllm~
20:-;l9s--.:m.
James T. Mc1nl}'rp., Jr.
Director.
[CircWl\r No. A-<l7)
Attachment A-Principles for
Determining Costs Applicable to Grants
and Contracts \\'ith Slate, Local. and
Federally Recognize:: bdi;1:l Tribal
Governments
TABLE OF COr...'"!U.1S
A. Purpose and sr;ope
1. Obje.cti\'es
2.. Policy guides
3. Application
B. Definitions
1. Appro....al or a::thoriz.ation 01 the ,qranlor
Federal agency
2.. Cost allocation pl..n
3. Cost
.(. COSI objecliv~
5. Federal agency
6. F~derally-reco:;nized !ndi":l trib..l
governmenls
7. Grant
8. Grant progr..m
9. Grantee
10. Local unit
11. Other Stale 0; local ag~ncics
I::. Servic.es
13. Supporting serviccs
C. Bosic Guidelines
1. Factors affecting allowRbHily of costs
2. Allocable costs
3. Applicable credits
D. Compos it inn of (:OoSt
1. Total cost .
Pubhsnec by Watren. Gornaf'". 0. l.amont. Inc
2.. Clauification of cosll
E. Di~cl costs
1. General
2. Application
F, Indirect cosu
1. General
2.. Grantee departmental indirect coati
3. Limitation on indirect cosu
G. Cost incurred by agencies o'her than the
grantee
1. General
::.. Alternative methods of detennini~
indirect cost
H. Cost incurred by grantee department for
oU,ers
1. General
J. Cost olloca/ion plon
1. General
2. Requirements
3. Instructions lor prepar8 lion of co~l
allocation plans
4. Negotiation and a?proval of indirecl cosl
proposals for Slales
5. Negotialion and approvlll or indirect Co~l
proposals for local governments
6. Negotialion and approval of indirect cost
proposals for fed~ralJy.recog:1i:!.ed lndi..n
t;ibal governments
7, Rt:&olution of problems
A. Purpose and scope.
1. Objectives. This Allachmcnl sels
forth principles for deter:nining the
allowable costs of programs
adm:nistered by Stale. local. and
federally-recognized Indian tribal
go\'emme:1ts under grants fro:n a::.ri
contra cis with the Federal Government.
Thp. principles are for the pu;-pos:e of
cost determination ?nd are not intenued
to identify the circumstances or dicta le
the extenl 0\ Federal and State orloca!.
participation in the finandng of a
particular grant. They are designed to
provide that federally-assisted programs
bear their fair share of costs recognized
under these principles, excc;1t where
restricted or prohibitp.d by law, No
provision for profit or other incremenl
above cost is intended.
2. Poiicy gl...'ides, The application of
these prir.ciples is based 0>1 the
fundamental premises that:
a. Slate, local. and federallv
recognized Indian tribal gove'i-nments
are responsible for the efficient and
effective administration of gran~ and
contract programs through the
application of sound management
practices.
b. The grantee or contractor aSS\l>7les
the responsibility for seei~ L~at
federally-ass:sted program fur:ds have
beer: expended and accountec for
consistent with underlying agreements
and program objectives.
c. Each grantee or contractor
organization, in recognition of its own
unique combination of staff facilities
and experience. will have the primary
responsibility for employing whalever
form of organization and management
U~:J.')U"
techniques may be necessary to assure
proper and efficient administration.
3. Application. These principles will
be applied by all Federal agencies in
determining costs incurred by State,
local. and federally recognized Indian
tribal governments under Federal grants
and cost reimbursement type contracts
(including subgrants and subcontracts)
except those with (a) publicly-financed
educational institutions subject to Office
of Management and Budget Circular A-
21, and (b) publicly-owned hospitals and
other providers of medical care subject
to requirements promulgated by the
sponsoring Federal agencies.
B. Definitions.
1. Approval or authorization of the
grantor Federal agency means
documentationevidcncing consent prior
to incurring specific cost.
2. Cost allocation pian means the
documentation identifying,
accumujating. and distributing
allowable costs unner grants and
contracts together with the allocation
mcthods used.
3. Cost. as used herein, means cost as
dctermined on a casR, accrual. or other
basis acceptable to the Fedcral grilntor
agency as a discharge of the grantec's
a::countabilitv for Federal funds.
4. Cost objective means a pool. center,
or area established for the accumulation
of cost. Such areas include
organizational units, functions, objects
or items of'expense. as well as ultimate
cost.objectives including specific grants,
projects, contracts, and other activities.
5. Federal agenc;: means any
department, agency. commission, or
instrumentality in the executive branch
of the Federal Government which makes
grants to or contracts with State. local.
or federally-recognized Indian tribal
governments.
6. Federally-recognized Indian tribal
go,,'emments means the governing body
or a governmental agency of any Indian
tribc, band. nation, or other organized
group or community (including any
r:a live 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 Fedcral
Government provides funds or aid in
kind to carry out specified programs,
services, or activities. The principles
and policies stated in this Circular as
applicable to grants in general also
Apply to any federally-sponsored cost
reimbursement-type of agreement
.0 V U ull 'OJ U c.:. J..) L V L LV r lV.l.Ll 'OJ J. n...r:.r vn J. .r:..n.
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performed by a State, local, or federally-
recognized Indian tribal government.
8. Grant program means those
activities and operations of the grantee
which are necessary to carry out the
purposes of the grant, including any
portion of the program financed by the
grantee. . .
9. Grantee means the department or
agency of State. local.. or federally
recognized ~ndian tribal government
which is responsible for administration
of the grant.
10. Local unit means any political
subdivision of go....ernment. below the
St:Jte lcvel.
11. Ocher State or local agencies
means department or agencies of the
Stale or local ur:it which provide goods.
facilities. and services to a grantee.
12. Sen'ices. as used her~in, means
goods and facilities, as well as scrvices.
13. Supporting services means
auxiliary functi'11ls necessary to sustain
thc direct eifort involved in
administcring a grant program or an
ar;tivity pnn'iding service to the grant
progrClm. These sen'ices may be
centralized in the grantee department or
ill sc:ne other agency. and inlcude .
procurement, payroll, personnel
functions, maintenance and operation of
. spClce, data p'rocessing. accounting,
budgeting, auditing. mail and messenger
service, and the like.
C. Sasic fluidelines.
1. Factors afjecting allowability of
costs. To allowauie under a grant
program. costs must meet the following
general criteria:
a. Be necessary and reasonable for
proper and efficient administration of
the grant programs. be allocable thereto
under these principles, and except.as
specifically provided herein. not be a
general expense required to carry out
the overall responsibilities of State,
local or federally-recognized Indian
tribal go\'ernments.
b. Be authorized or not prohibited
under State or local laws or regulations.
c. Conform to any limitations or
exclusions set forth in these principles,
Federal laws. or other governing
limitations as to types 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. De accorded consistent treatment
through application of generally
accepted accounting principles
appropriate to the circumstances.
r. Not be allocable to or included as a
cost of any other federally financed.
program in eithcr the current or a prior
period.
Pubhshed by Warren. Gorham & Lamont. Inc.
I
g. Be net of all applicable credits.
2. Allucable costs.
a. A cost is allocable to a particular
cost objective to the extent of benefits
received by such objective. .
b. Any cost allocable to a particular
grant or cost objective under the .
pnnciples provided for in this Circular
mav not be shifted to other Federal
gra'nt programs to overcome fund
deficienCics, <l\'oid restrictions imposed
by law or grant agreements, or for other
reasons.
c. Where an ailocation of joint cost
.....ill ultimately result in chargcs to a
grant program. an allocation plan will ue
'required as prescribed in Section J.
3. Applicable credits.
u. App!icaLlc credits referlo those
receipts or redudion of expenditure-
ly'pe transactions "'hich offset or reduce
expcnse ilems allocabie to grilnts as
dirccl or indirect costs. Examples of
sllch transactIOns are: pUTl.:ha~e
discounts; reuates or allo\...'ances,
recoveries or indcminties on losses: s,de
of pubiica !ions, equlpmcnl. and scrap:
income from person"l or incidcntal
services: ar.d adjur.:mer.ts of
overpaymen:s or erroneous charges.
b, Applicable credits may also arise
when Federai funds are recci\'ed or are
available from sources other than the
grant program involved to finance
operations or capital items of the
grantee. This includes costs arising from
lhe use or depreciation of items donated
or financed by the Federal Government
to fulfill matching requirments under
another grant program. These types of
credits should likewise be used to
reduce rela led exoendi tures in
determining the r~tes 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
direcl'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
delermining 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
C01'tlMUNITY DEVELOPMENT BLOCK GRANTS
I
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particular cost objective. These costs
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 of
costs pending distribution in due course
to grants and other ultimate cost
objectives.
z. Application. Typical direct costs
chargeable to grant programs are:
a. Compensation of employees for the
time and efforts devoted specifically to
the execution of grant programs.
b. Cost of materials acquired.
consumed. or expended specifically for
the purpose of the gt'ant.
c. Equipment and other approved
ca?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)
incUITed for a common or joint purpose
benefiting more than one cost objective.
and (b) not readily assignable to the coct
objectiveS'specifically benefited.
without effort disproportionate to the
results achieved. The tenn "indirect
costs," as used herein. applIes 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 pools
of indirect cost within a grantee
department or in other agencies
providing services to a grantee
department. Indirect cost pools should
be distributed to benefiting cost
objectives on bases which will produce
an equitable 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 of
grantee departmental indirec, cost
allocable to a grant program. the
following methods may be used.
a. Predetermined fixed rates for
indirect costs. A predetermined flXed
rate for computing indirect costs
applicable to a grant may be negotiated
annually in situations where the cost
experience and other pertinent facts
:~
i
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available are deemed sufficient to
enable the contracting parties to reach
an informed judgment (1) as to the
probable level of indirect costs in the
grantee department during the period to
be covered by the negotiated rate. and
(2) that the amount allowable under the
predetermined rate would not exceed
actual indirect cost.
b. Negotiated lump sum for overhead.
A negotiated fixed amount in lieu of
indirect costs may be appropriate under
circumstances where the benefits
derived from a grantee department'1
indirect services cannot be readily
determined as in the case of small. self-
contained or isolated activity. When this
method is used. a detennlnation should
be made that the amount negotiated will
be approximately the same as the actual
indirect cost that may be incUITed. Such
amounts negotiated in lieu of Indirect
costs will be treated all 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 statutory limitation
or the amount otherwise allowable
under this Circular. whichever is the
"maIler.
b, When the amount allowable under
a statutory limitation is less than lhe
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 cost of lervice
provided by other agencies may only
include allowable direct Costl of the
service plus a pro rata share of
allowable supporting costs (Section
B.l2.) and superviSion directly required
in performing the service. but not
lupervision of a general nature such as
that provided by the head of a
department llnd his staff auistants not
directly involved in operations.
However. supervision by the head of a
department or agency whose lole
function il 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. Gomam & Lamont. Inc.
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09: 1503
HDR RF -185
3-9-81
2. Alternative method. of cklNrnining
indirect cost. In lieu of determining
actual indirect COlt related to a
particular service furnished by another
agency. either of the following
alternative methods may be Uled
provided only one method Is Wl8d far a
specific service durinR the fiscal year
involved. .
a. Slandard indirect rale. An amount
equal to ten percent of direct labor cost
in providing the serviCll 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
lervice.
b. Predetermined fixed rote. A
predetermined fixed rate for indirect
COlt of the unit or activity providing
service may be negotiated as set forth in
Section F.Z,a.
H. Cost Incurred by Grantee
Department for Others
1. General. The principles provided in
Section G will also be used in
determining the cost of services
'Provided by the grantee department to
another agency.
f. Cost Allocation Plan
1. General. A plan for allooatioD or
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 will
substantiate the .propriety of eventual
charges, -
Z. Requirements. The allocation plan'
of the grantee department should cover
allloint costs of the department as well
as costs to be allocated under planl or
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 feallble.
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 or "ervices
provided and their relevance to the
federally-sponsored programs.
b. The items of c!xpense to be
included.
c. The methods to be used in
distributing cost.
3. Instroctions for preparation of cost
allocation plans. The Department of
Health and Humsr. Servicel'in
consultation with the other Federal
agencies co~cerned, will be responsible
for developing Ihld issuing the
instructions for use by grantees in
preparation of cost allocation planl.
09: 1 G04
This responsibility applies to both
central support services at the State.
local. and Indian tribal level and
indirect cost proposals of individual
grantee departments.
4. Negotiation and approval of
indirect cost proposals for States.
a. nie Department of Health and
Human Services. in collaboration with
the other Federal agencies concerned.
will be reaponsible for negotiation,
approval. and audit of cost allocation
plans. which, will be submitted to it by
the Slates. These plans will cover
central $upport service costs of the
State,
b. At the grantee department level in a
State. a single cognizant Federal agency
will have responsibility similar to that
set forth in a. above, for the negotiation,
approval. and audit of the indirect cost
proposal. A current list of agency
assignments is- maintained by the Office
of Management and Budget.
c. Questions concerning the cost
allocation plans approved under a, and
b. above. should be directed to the
agency responsible for such "lpprovals.
5. Negotiation and approval of
indirect cost proposals for local
governments.
a. Cost allocation plans will be
retained at the local government level
for audit by a designated Federal agency
except in those cases where that agency
requests that cost ~location plans be
submitted to it for negotiation and
approval
b. A list of cognizant Federal agencies
assi~ed responsibility for negotiation.
approval and audit of central support
service cost allocation plans at the local
governmentlevel is maintained by the
the Office of Management and Budget.
c. At the grantee department level of
local governments. the Federal agency
with the predominant interest in the
wOD< of the grantee department will be
responsible for necessary negotiation,
app~val and audit of the indirect cost
proposaL
6. Negotiation and approval of
indirect cos-t proposals for federa/ly
recognized Indian tribal governments.
The Federal agency with the
predominant Interest in the work of the
grantee department will be responsible
for necessary negotiation, approval and
audit of the indirect cost proposal.
7. Resolution of problems. To the
extent that problems are encountered
among the Federal agencies in
connection with 4 and 5 above. the
Office of Management and Budget will
lend assistance as required.
I
HOUSING & DEVELOPMENT REPORTER
I
I Circular No. .......7]
Attachment B-Standards for Selected
Items of Costs
Table of.Coateau
A. Purpose and applicabili/y
1. Objective
2. Application
B. Allowable costs
1. Accounting
2. Advertising
3. Advisory councils
4. Audit service
5. Bonding
6. Budgeting
7. Building lease management
8. Centr31 stores
9. Communicalions
10. Compensalion Cor personal services
11. Deprecialion and use allowances
12. Disbursing service
11. Employee Cringe benp.fits
H. Employee mOfale. health :Ind welfare
costs
15. Exhibits.
'6. Legal expenses
17. Maintenance and repair
18. Materials and supplies'
19. Memberships. subscriptions and
professional activites
20. Motor pools
21, Payroll preparation
22. Personnel administration
23. Printing and reproduction
24. Procurement service
25. Tax!!s
26. Training and education
27. Transportation
28. Tra vel
C. Costs allowable with approval of gran/or
agency
1. Automatic data processing
2. Building space and related facilities
3. Capital expendituRI
4. Insurance and indemnification
5. Management studies
6. Preagreement COlts
7. Professional lervices
8. Proposal cos.1s
D. Unallowable costs
1. Bad debts
2. Contingp.ncies
3. Contributions and donations
4. Enlertainment
5. Fines and penalties
8. Governor's expenses
7. Interest and other financial costs
8. Legislative expenres
9, Underrecovery of COlli under granl
agreemenll
A. Purpose and applicability.
1. Objective. This Attachment
provides standards for determining the
a1!owability of selected items of cost.
z. Application. These standards will
apply irrespective of whether a
particular item of cost is treated as
direct or indirect cost. Failure to
mention a particular Item of cost in the
standards is not intended to imply that it
is either allowable or unallowable.
rather determination of allowability in
each case should be based on the
treatment of standards provided for
Published by Warren, Gorham & Lamont. Inc.
Similar or related items of COlt The
allowability oflhe selected items of cost
is subject to the general policies and
principles stated in Attachment A of this
Circular.
B. Allowable 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 agenCies for these
purposes. The cost o[ maintaining
central accounting records required [or
overall Stale or Indian tribal
government purposes. such as
approprIation and fund accounts by the
Treasurer, Comptroiler, or similar
officials, is considered to be a general
expense of gO'Jernment and is not
allowable.
2. Advertising. Advertising media
includes newspapers. magazines, radio
and television programs. direct mail,
trade papers, and the like. The
advertising costs allowable are those
which are solely [or:
a. Recruitment of personnel required
for the grant program. .
b. solicitation of bids for the
procurement of goods and services
required.
c. disposal of scrap or surplus
materials acquired in the performance of
the grant agreement
d. Other purposes specifically
provided for in the grant agreement.
3. Advisory councils, Costs incurred
by State advisory councils or
committees established pursuant to
Federal requirements to carry out grant
programs are allowable. The cost of like
organizations is allowable when
provided for in the grant agreement.
4. Audit service. The cost of audits
necessary for the administration and
management of functions related to
grant programs is allowable.
5. Bonding. Costs of premiums on
bonds covering employees who handle
grantee agency funds are allowable.
6. Budgeting. Costs incurred for the
development. preparation, presentation,
and execuJon of budgets are allowable.
Costs for services of a central budget
office are generally not allowable since
these are costs of general government.
However. where employees of the
central budget office actively participate
in the grantee agency's budget process.
the cost of identifiable services is
allowable.
7. Building lease management. The
administrative cost for lease
management which includes review of
lease proposals. maintenance of a 'list of
available property for lease. and related
activities is allowable.
COMMUNITY DEVELOPMENT BLOCK GRANTS
I
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'10
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8. Central stores. The cost of
maintaining and operating a central
store's organization for supplies,
equipment, and materials used either
directly or indirectly for grant programs
is allowable.
9, Communications. Communication
costs incurred for telephone calls or
service. teletype service. wide area
telephone service (W A TS). 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 '8ccured.
for services rendered during the period
of performance under the grant
agreement. including but not necessarily
limited to wages. salaries. and
supplementary compensation and
benefits (Section 8.13.). The costs of
such compensation are allowable to the
extent that total compensation (or
individual employees: (1) is reasonable
for the services rendered: (2) follows an
appointment made in accordance with
State, local. or Indian tribal government
laws and roles and which meets Federal
merit aystem 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 Slate,
local. or Incl.ian tribal government. In
cases where the kin~ of employees
required for the federally-assisted
activities are not found in the other
activities of the State. local. or Indian
tribalgovernmenl, 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. Payroll and distn'bution of time,
Amounts charged to grant programs for
personal services. regardless of whether
treated as direct or indirect costs. will
be based on payrolls documented and
provided in accordance with generally
accepted practice of the State, local. or
Indian tribal 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 used
should produce an equitable distribution
of time and effort.
11, Depreciation.and use allowance$.
a. Grantees may be compenaated for
the use of buildings. capital
improvements. and equipment thl'Ollgh
use allowances or depreciation. Use
allowancl'S are the means of providing
compensation in lieu of depreciation or
other eq\livalent costs. However. a
combination of the two methods may'
not be used in connection with a single
class of fi:<ed assets.
b, The computation of depreciation or
use allowance will be based on
acquiaition 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 any portion of the
cost of buildings and equipment donated
or borne directly or indirectly by the
Federal Government through charges to
Federal grant propgrams or otherwise.
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
specifically authorized by the grantor
Federal agency.
c. Where the depreciation method is
followed. adequate property records
must be maintained. and any generally-
accepted method of computing
depreciation may be used. However. the
method of computing depreciation must
be consistently applied for any specific
asset or class of asaets for all affected
federally-sponsored programs and must
result in equitable charges considering
the extent of the use of the assets for the
benefit of such programs.
d. In lieu of depreciation. a use
allowance for buildings and
improvements may be computed at an
annual rate not exceeding two percent
of acquisition cost. The use allowance
for equipment (excluding items properly
capitalized as building cost) will be
computed at an annual rate not
exceeding six and two-thirds percent of
acquisition cost of usuable equipment.
e. No depreciation or use charge may
be allowed on any assets that would be
considered as fully depreciated.
provided. however. that reasonable use
charges may be negotiated for any such
assets if warranted after taking into
consideration the cost of the facility or
item involved. the estimated useful life
remaining at time of negotiation. the
effect of any increased maintenance
charges or decreased efficiency due to
age. and any. other factors pertinent to
the utilization'olthell!'cility or item for
the purpose contemplated.
Published by Warren, Gorham & Lamont. Inc.
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09: 1505
HDR RF -185
3- 9-81
12. Disbursing service, The cost of
disbuning grant program funds by the
r reaaurer or other designated officer is
allowable. Disbursing services cover the
processing of checks or warrants. from
preparation to redemption. including the
necessary records of accountability and
reconciliation of such records with
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 8.10.
a. Employee benefits in the form of
regular compensation paid to employees
during periods of authorized absences
from the job. such as for annual leave.
sick leave. court leave. military leave.
and the like, if they are: (1) provided
prosuant to an approved leave system:
and (Z) the cost thereof is equitably
allocated to all related activities.
including grant programs.
b. Employee benefits in the form of
employers' contribution or expenses for
social security. employees' life and
health insurance plans. unemployment
insurance coverage, workmen's
compensation insurance. pension plans.
severance pay. and the like. provided
such benefits are granted under
approved plans and are distributed
equitably to grant programs and to other
activities.
14. Employee morale. health and
welfare costs. The' costs of health or
fira.t-aid clinics and I or infmnaries.
recreational facilities. employees'
counseling services. employee
information publications. and any
related expenses incurred in accordance
with general State. local or Indian tribal
policy. are allowable. Income generated
from any of these activities will be
offset against expenses.
15. Exhibits. Costs of exhibits relating
specifically to the grant programs are
allowable.
16. Legal expenses. The cost of legal
expenses required in the administration
of grant programs is allowable. Legal
service. 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 permanent value of
the property nor appreciably prolong its
intended life. but keep it in an efficient .
operating condition. are allowable,
18. Materials and supplies. The cost of
materials and supplies necessary to
09:1506
carry out the grant programs is
allowable, Purchases made specifically
for the grant program should be charged
thereto at their actual prices after
deducting all cash discounts. trade
discounts, rebates. and allowances
received by the grantee. Withdrawals
from general stores or stockrooms
should be charged at cost under any
recognized method of pricing
consistently applied. Incoming
transportation charges ue a proper part
of material cost.
19, Memberships. subscriptions and
professional activities.
a. Memberships, The Gost of
membership in civic. business. technical
and professional organizations is
allowable provided: (1) the benefit from
the membership is related to the grant
program: (2) the expenditure is for
agency membership; (3) the cost of the
membership ia reasonably related to the
value of the services or benems
received: and (4) the expenditure is not
for membership in an organiza tion
which devotes a substantial part of its
activities to influencing legislation,
b. Reference material. The cost of
books. and subscriptions to civic.
business. pr'oIessional. 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 grantee.
ZOo Motor pools'. The costs of a service
organization which provides
automobiles to user grantee agencies at
a mileage or fixed ra te andlor provides
vehicle maintenance. inspection and
repair services are allowable.
21, Payroll preparation. The cost of
preparing payrolls and maintaining
necessary related wage records is
allowable.
22.. Personnel administration. Costs
for the recruitment. examination.
cerwfication. classification. training,
establishment of pay atandards. and
related activities for grant programs. are
allowable.
23. Printing and reproduction. Costs
for printing and reproduction services
necessary for grant administration.
including but not limited to forms.
reports. manuals. and informational
literature. are allowable. Publication
costs of reports or other media relating
to grant program accomplishments or
results are allowable when provided for
in the grant agreement.
24. Procurement service. The cost of
procurement service, including
'olicitation of bids. preparation and
I
HOUSING & DEVELOPMENT REPORTER
I
award of contracts. and all phases of
contract administration in p.roviding
goods. facilities and services for grant'
programs, is allowable.
25. Taxes. In general. taxes or
payments in lieu of taxes which the
grantee agency is legally.required to pay
are allowable.
26. Training and education. The cost
of in-service training, customarily
provided for employee development,
which directly or indirectly benefits
grant programs is allowable. Out-of-
service training involving extended
periods of time is allowable only when
specifically authorized by the grantor
agency.
27. Transportatian. Cost~ incurred for
freight, cartage. express. postagc and
other tranaportation costs relatins either
to goods purchased. delivered. or moved
from one location to another arc
allowable.
Z8. Travel. Travel costs are :Jllowable
for expenses for transpo:-tation. 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 Qf 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 a.ctivities. The
difference in cost between first-class air
acconunodations and less-than.first.
class air accommodations are not is
unallowable except when less-than.
first-class air accommodations
reasonably available. Notwithstanding
the provisions of paragraphs 0.6. and a..
travel costs of officials covered by those
paragraphs. when specifically related to
grant programs, ar~ allowable with the
prior approval of a grantor !lgency.
C. Casts Allowable With Approval of
Grantor Agency
1. Automatic data processing. The
cost of data processing services to grant
programs is allowable. This cost may
include rental of equipment or
depreciation on grantee-owned
equipment. The acquisition of
equipment, whether by outright
purchase. rental-purchase agreement or
other method of purchase, is allowable
only upon specific prior approval of the
grantor Federal agency as provided
under the selected item for capital
expenditures.
2. Building space and related
facilities. The cost of space in privately
or publicly owned buildings used for the
benefit of the grant program is allowable
subject to the conditions stated below.
Published by Warren, Gorham & Lamont. Inc.
The total cost of space, whether in a
privatcly or publicly owned building.
may not exceed the rental cost of
comparable space and facilities in a
privately-owned building in the same
locality. The cost of space procured for
grant program usage may not be charged
10 the program for periods of
nonoccupancy,' wHhout authoriza tion of
the grantor Fcderal agency.
a. Rental cost. The rental cost of
space in a privately-owned building is
allowable. Similar costs for publicly
owned buildings newly occupied on or
after October 1. 1980. are allowable
where "rental rate" systems, or
eq:livalent systems that adcquately
reflect actual costs, are employcd. Such
charges must be determined on the basis
of actual cost (including depreciation
biiscd on the useful life r)f the building.
intere~t paid or accrued. operation and
maintenance, and other allowable
COSIS). Where these costs are included
in rent::!1 charges, they may not be
cha.rged else.....here. No costs will be
included for pnrchases or construction
that were originally financp.d by the
Fp.deral Government.
b. Maintenance and oparctian. The
cost of utilities. ins~rance, security,
janitorial scrvices, elevator service,
upkeep of g:ounds. nc!mal repairs and
alterations and the like,'are allowable to
the extent they a~ not otherwise
included in rental or other charges for
space.
c. Rearrangements and oJterations.
Costs incurred for rearrangement and
altcration 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 allowances
on publicly-owned buildings. The costs
are allowable as provided in Section
8.11.
e. Occupancy of space underrental-
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, equipmenL other capital
assets. and repairs which materially
increaso:! the value or useful life of
capital assets i. 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
C3: 06CO
(e) Prior notification. The recipient
shall provide the HUD lield office with
written notilication of the amount of
funds to be distributed to a private linan-
cial institution before distribution under
the provisions of this section.
(0 Recordkeeping requirements. The
recipient shall maintain in its liIes 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.
~ SUbp8rt K-Other Progr8m
Requlrement3
~ 570.600 General.
(2) Section 104(b) of the Act provides
that any grant under section 106 of the
Act shall be made only if the grantee
cenifies to the satisfaction of the Secre-
tary, among other things, that the grant
"will be conducted and administered in
conformitv with Pub. L. 88-352 and Pub.
L. 90-284,''' and, further, that the grantee
"will comply with the other provisions of
this title and with other applicable laws."
Section 104(e)(1) of the Act requires that
the Secretary determine with respect to
grants made pursuant to section 106(b)
(Entitlement Grants) and 106(d)(2)(B)
(HUD-administered Small Cities Grants),
at least on an annual basis, among other
things, "whether the grantee has carried
out [its) certifications in compliance with
the requirements and the primary objec-
tives of this title and with other applica-
ble laws - - -..' Certain other statutes are
expressly made applicable to activities
assisted under the. Act by the Act itself,
while other laws not referred to in the Act
may be applicable to such activities by
their own terms. Certain statutes or Exec-
utive Orders which may be applicable to
activities assisted under the Act bv their
own terms are administered or enforced
by governmental departments or agencies
other than the Secretary or the Depan-
men,t. 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 I 06( d) of tbe Act, for
purposes of the. determinations described
above to be made bv the Secretarv under
section I 04(e)(1) of tbe Act, in'cluding
statutes expressly made applicable by the
Act and certain other statutes and Exe::u.
tive Orders for which the Secretary has
I
HOUSING AND DEVELOPME~l REPORTER
I
APPENDIX K
enforcement responsibility. The absence
of mention herein of anv other statute for
which the Secretary d~s 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-
utive Order is not applicable to activities
assisted under the Act, For laws which tbe
Secretary will treat as applicable to grants
made to States under section 106(d) of
the Act for purposes of the determination
required to be made by the Secretary
pursuant to section 104(e)(2) of the Act,
see ~ 570.496.
(b) This subpan also sets fonh 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.
S 570.601 Public Law 88-352 and
Public Law 90-284; affirmatively
furthering fair housing; 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 grantee certifies
to the satisfaction of the Secretary that
the grant "will be conducted and adminis-
tered in conformity with Pub. L. 88-352
and Pub. L. 90-284 and the grantee will
afflnnatively further fair housing." Simi.
larly, section 107 provides that no grant
may be made under that section (Secre-
tary's Discretionary Fund) or section 119
(UDAG) without satisfactory assurances
that the grantee's program will be con-
ducted and administered in conformity
with Pub. L. 88-352 and Pub. L. 90-284.
(a) "Pub. L. 88-352" refers to title VI of
the Civil Rights Act of 1964 (42 U.S.c.
2000d et seq.), which provides that no
person in the United States shall on the
ground of race, color, or national origin,
be excluded from participation in, be
denied the benefits of, or be subjected to
discrimination under any program or
activity receiving Federal linancial assis.
tance. Section 602 of the Civil Rights Act
of 1964 directs each Federal department
and agency empowered to extend Federal
fmancial assistance to any program or
Put>lished by Warren, Gomam & Lamont. Inc.
. --."
,~
1
. ..;r
activity by way of grant to effectuate the
foregoing prohibition by issuing rJles,
regulations, or orders of general applica.
bility which shall be consistent witb
achievement of the statute autborizing
the linancial assistance. HUD regulations
implementing the requirements of Title
VI with respect to HUD programs are
contained in 24 CFR Part I.
(b) "Public Law 90-284" refers to The
Fair Housing Act (42 U.S.C, 3601-20),
popularly Icnown as the Fair Housing Act,
which states that it is the policy of tbe
United States to provide, within tbe 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 fmancing of
housing, or the provision of brokerage
services, including otherwise making un-
available or denying a dwelling to any
person, because of race. color, religion,
sex, national origin, bandicap, or familial
status. The Fair Housing Act further
requires the Secretary to administer the
programs and activities relating to hous-
ing and urban development in a manner
affirmatively to further tbe policies of
the Fair Housing Act. In accordance with
this statutory direction, the Secretary
requires that grantees administer all pro-
grams and activities related to housing
and community development in a man-
ner to affirmatively further the policie.s of
tbe Fair Housing Act, furthermore, sec-
tion 104(b)(2) of the Act requires tbat
each grantee receiving funds under sec-
tion 106 of the Act (entitlement or small
cities grantees) certify to the satisfaction
of the Secretary tbat it will aff1rmatively
further fair housing.
(c) Ex.ecutive 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 propeny and related facil-
ities are, among other things, provided in
whole or in part with the aid of loans,
advances, grants, or contributions agreed
to be made by tbe Federal Government.
HUD regulations implementing Execu-
tive Order 11063 are contained in 24
CFR Pan 107.
.
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8
COMMUNITY DEVELOPMENT
I
~ 570.602 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
sex, be excluded from participation in, be
denied the benefits of, or be subjected to
discrimination under, any program or
activity funded in whole or in part with
community development funds made
available pursuant to the Act. For pur-
poses of this section "program or activity"
is defined as any function conducted by an
identifiable administrative unit of the re-
cipient, or by any unit of government,
subrecipient, or private contractor receiv-
ing community development funds or
loans from the recipient. "Funded in
whole or in part with community develop-
ment funds" means that community devel-
opment funds in any amount in the form
of grants or proceeds from HUD guaran-
teed loans have been transferred by the
recipient or a subrecipient to an identifi-
able 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(t). .
(b) Specific discriminatory actions pro-
hibited and cQrrective actions.
(I) 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, financial aid or other benefits
provided under the program or activity.
(ii) Provide any facilities, services, fi-
nancial aid or other benefits which are
different, or are provided in a different
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 privilege 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
CDBG funds regarding which the recipi-
ent has previously discriminated against
persons on the ground of race, color,
national origin or sex. or if there is
sufficient evidence to conclude that such
discrimination existed. the recipient must
take remedial affirmative action to over-
come the effects of prior discrimination.
The word "previously" does not exclude
current discriminatory practices.
(ii) In the absence of discrimination, a
recipient, in administering a program or
activity funded in whole or in part with
funds made available under this part, may
take any nondiscriminatory affirmative
action necessary to ensure that the pro-
gram or activity is open to allow without
regard to race, color, national origin or
sex.
(iii) After a finding of noncompliance or
after a recipient has a' firm basis to
conclude that discrimination has oc-
curred, a recipient shall not be prohibited
by this section from taking any action
eligible under Subpart C to ameliorate an
imbalance in services or facilities provided
to any geographic area or specifIC group of
persons within its jurisdiction, where the
purpose of such action is to remedy prior
discriminatory practice or usage.
(5) Notwithstanding anything to the
contrary in this section, nothing contained
herein shall be construed to prohibit any
recipient from maintaining or constructing
separate living facilities or rest room
published by Warren, Gorham, & Lamont, Inc.
I
09:0661
HDR RF -383
9-26-88
facilities for the different 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 Discrimination Act of 1975 (42
U.S.C. 6101 el seq.) or with respect to an
otherwise qualified handicapped person as
provided in section 504 of the Rehabilita-
tion Act of 1973 (29 U.S.c. 794) shall also
apply to any program or activity funded in
whole or in part with funds made available
pursuant to the Act. HUD regulations
implementing the Age Discrimination Act
are contained in 24 CFR Part 146 and the
regulations implementing section 504 are
contained in 24 CFR Part 8.
~ 570.603 Labor standards.
Section 110 of the Act requires that all
laborers and mechanics employed by con.
tractors or subcontractors on construction
work financed in whole or in part with
assistance received under the Act shall be
paid wages at rates not less than those
prevailing on similar construction in the
locality as determined by the Secretar)' of
Labor in accordance with the Davis-Ba-
con Act, as amended (40 U.S.c. 267a-
276a-5). By reason of the foregoing re-
quirement, the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327 er
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 100(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) · · · (bel most effec-
tively implemented in connection with the
expenditure of funds under" the Act. Such
other provisions of law which further the
purposes of the National Environmental
Policy Act of 1969 are specified in regula-
65
09:0662
tions issued pursuant to section 104(g) of
the Act and contained in 24 CFR Part 58.
Section 104(g) also provides that, in lieu of
the environmental protection procedures
otherwise applicable, the Secretary may
under regulations provide for the release
of funds for particular projects to grantees
who assume all of the responsibilities for
environmental review, decisionmaking,
and action pursuant to the National Envi-
ronmental Policy Act of 1969, and the
other provisions of law specified by the
Secretary as described above, that would
apply to the Secretary were he/she to
undertake such projects as Federal
projects. Grantees assume such environ.
mental review, decision making, 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.
9 570.605 National Flood Insurance
Program,
Section 202(a) of the F100d 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 9570.302),
funds provided under this part shall not be
e:cpended for acquisition or construction
pur.poses in an area that has been identi-
fied by the Federal Emergency Manage-
ment Agency (FEMA) as having special
flood hazards unless the community in
which the area is situated in participating
in the National F100d Insurance Program
in accordance with 44 CFR Parts 59-79,
or less..than a year has passed since FEMA
notification to the community regarding
such hazards; and flood insurance is ob-
tained in accordance with section 102(a)
of the F100d Disaster Protection Act of
1973 (42 U.S.c. 4(01).
I
HOUSING AND DEVEfPMENT REPORTER
9 570.606 Relocation, displacement and
acquisition.
(a) Uniform Relocation Act. (I) The
Unifonn Relocation Assistance and Real
Property Acquisition Policies Act of 1970
(URA) (42 U.S.C. 4601) and HUD imple-
menting regulations at 24 CFR Part 42
apply to the acquisition of real property by
a State agency for an activity assisted
under this part and to the displacement of
any family, individual, business, nonprofit
organization or 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
99 570.426, 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 HUn
by a city or urban county under 9 570.458
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 detennines that the acquisition or
displacement was carried out for the
assisted activity. The grantee may, at any
time, request a HUD detennination
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) R esiden rial anridisplacement and
relocarion assistance plan. Under section
1000d) of the Act, each grantee must
adopt, make public and certify that it is
following a residential antidisplacement
and relocation assistance plan providing
one-for-one replacement units (paragraph
(b)(1) of this section), and relocation
assistance (paragraph (b)(l) 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.
(1) One-for-one replacemenr units. (i)
All occupied and vacant occupiable
low/moderate-income dwelling units that
are demolished or converted to a use other
than as low/moderate-income dwelling
units as a direct result of an activit)'
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 Iccal 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 Ie'w /moderate-income dwelling
units as a direct result of the assisted
activity;
(C) A time schedule for the commence.
ment and completion of the demolition or
conversion;
66
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". -'''''~''.
r' .if'
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.
........V1V1MUNll Y DEVELOPMENT
(D) The general 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 will remain a
low/moderate-income dwelling unit for at
least 10 years from the date of initial
occupancy.."....
; (iii)(A) The requirements of para~raph
(b)(l) of this section do not apply If the
HUD Field Office detennines, based upon
objective data, that there is an adequate
supply of vacant low/moder~t.e-incon:e
dwelling units in standard conditIOn avail-
able on a nondiscriminatory basis within
the grantee's jurisdiction. In making this
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 the jurisdic-
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-
sisin an area that is larger than the
grantee's jurisdiction. Such additional
dwelling units shall be considered if the
HUD Field Office detennines 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 detennination 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-
sionof 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.
I
tions implementing the URA), or may
elect to receive the. following relocation
assistance:
(A) The relocation assistance described
at 24 CFR Part 42, Subpart C (General
Relocation Requirements) and Subpart D
(Payment for Moving and Related Ex-
penses). Relocation notices must be issued
consistent with, and in the manner pre-
scribed under, 24 CFR 42.203. The defini-
tion of "comparable replacement dwell-
ing" used in 24 CFR Part 42 is modified
as described in paragraph (b)(3)(i) of this
section. Displaced households provided
with replacement housing assistance under
paragraph (b)(2)(i)(C) of this section, in
the form of a certificate or housing vouch-
er under Section 8 of the United States
Housing Act of 1937, must be provided
referrals to comparable replacement
dwelling units whose owners are willing to
participate in the housing voucher or
certificate program. The grantee shall
advise tenants of their rights under the
Federal Fair Housing Law (Title VIII)
and of replacement housing opportunities
in such a manner that, whenever feasible,
they will have a choice between relocating
within their neighborhoods and other
neighborhoods consistent with the grant-
ee's responsibility to affirmatively further
fair housing.
(B) The reasonable and necessary cost
of any security deposit required to rent the
replacement dwelling unit, and credit
checks required to rent or purchase the
replacement dwelling unit; and
(C) Replacement housing assistance.
Households are eligible to receive one of
the following forms of replacement hous-
ing assistance:
(I) Each household must be offered
compensation designed to ensure that, for
a five-year period, the displaced household
will not bear, after relocation, a ratio of
shelter costs to income that exceeds 30
percent. Such compensation shall be ei-
ther:
(I) A certificate or housing voucher for
rental assistance provided through the
local Public Housing Agency under Sec.
tion 8 of the United States Housing Act of
1937; or:
(ii) Cash rental assistance equal to 60
times the amount that is obtained by
subtracting 30 percent of the displaced
household's monthly gross income (with
such adjustments as the grantee may deem
appropriate) from the lesser of: the month-
ly cost of rent and utilities at a comparable
replacement dwelling unit or the monthly
cost of rent and utilities at the decent, safe
Published by Warren, Gorham. & Lamont. Inc.
I
09:0663
HDR RF~388
12-5-88
and sanitary replacement dwelling to
which the household relocates. The grant-
ee may provide the cash payment in either
a lump sum or in installments. The grant-
ee may at its discretion offer the house-
hold a choice between the certifi-
cate/housing 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 CFR 570.302(a)(2) (Enti-
tlement Grants); the initial submission of
an application to HUD by a unit of
general local government under
~~ 570.426, 570.430, or 570.435(d) this is
granted for the requested activity (HUD
administered Small Cities Program); or
the submission of an application to HUD
by a city or urban county under 9 570.458
23
'~."
~
"]:.:r
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 displacement occurs. on ?r
after the' appropriate date desc~bed 10
paragraph (b)(2)(ii)(A) of this sectlot.1' the
low- or moderate-income household IS not
eligible for relocation assistance if:
(1) The household is evicted for cause;
(2) The household moved into the prop-
erty on or after the date described in
paragraph (b)(2)(ii)(A) of this section,
after receiving written notice of the ex-
pected displacement; or
(3) The grantee determines that the
displacement was not a direct result of the
assisted activity, and the HUD office
concurs in that determination.
(C) If the displacement occurs before
the appropriate date described in para-
graph (b)(2)(ii)(A) of this section, the low-
or moderate-income household is eligible
for relocation assistance if the grantee or
HUD determines that the displacement
was a direct result of an activity assisted
under this part.
(3) Definitions. For the purpose of
paragraph (b) of this section:
(i) "Comparable replacement dwelling
unit" means a dwelling unit that:
(A) Meets the criteria of 24 CFR
42.2(c)(l) 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)(l)(i) of this section, the dwell-
ing unit must be available to the house-
hold at a monthly cost for rent and
estimated average monthly utility cost
that does not exceed the Fair Market Rent
or the payment standard, respectively.
(ii) "Decent, safe and sanitary dwelling"
means a decent, safe and sanitary dwelling
as defined in 24 CFR. 42.2(e).
(iii) "Low/moderate income dwelling
unit" meansa dwelling unit with a market
rental (including utility costs) that does
not exceed the applicable Fair Market
Rent (FMR) for existing housing and
moderate rehabilitation established under
24 CFR Part 888.
(iv) "Occupiable dwelling unit" means a
dwelling unit that is in a standard condi-
,..:-~:;'/.;\-~-~~.;:~':~~ ':;~:4l~~t:fi~~~~~~~::-~'~..
. _ .. _ ~-... '...._ . ,~' .,~_.....~:;._~" ii, :.:..
HOUSING AND DEVELfPMENT REPORTE~~2'~i'
I
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 Subpart D of this part
(Entitlement Grants), the p,rovisions of
paragraph (b) of this section are applicable
to grants made. on. or after October I,
1988, For grants made under Subpart D,
these provisions will govern all activities
for which funds are first obligated by the
grantee on or after the date the first grant
is made after September 3D, 1988, without
regard to the source year of the funds used
for the activity.
(c) Section l04(k) relocation require.
ments. Section 1000k) of the Act requires
that reasonable relocation assistance be
provided to persons (families, individuals,
businesses, nonprofit organizations, or
farms) displaced (i.E.. moved permanently
and involuntarily) as a result of the use of
assistance received under this part to
acquire or substantially rehabilitate prop-
erty. If such displacement is subject to
paragraph (a) or (b) of this section, above,
this paragraph does not apply. The grant-
ee must develop, adopt and provide to
persons to be displaced a written notice of
the relocation assistance for which they
are eligible. The minimum requirements
for such assistance under the UDAG
Program are described at ~ 570.457(b).
Under CDBG programs. persons entitled
to assistance under this paragraph must be
provided relocation assistance, including
at a- minimum:
(1) Reasonable moving expenses;
(2) Advisory services needed to help in
relocating. The grantee shall advise teli-
ants of their rights under the Federal Fair
Housing Law (Title VIII) and of replace.
ment housing opportunities in such a
manner that, whenever feasible, they will
have a choice between relocating within
their neighborhoods and other neighbor-
hoods consistent with the grantee's re-
sponsibility to affirmatively further fair
housing; and
(3) Financial 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
dwelhng 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)(lI) of the Act, the grantee
may provide relocation payments and
other relocation assistance for individuals,
families, businesses, nonprofit organiza-
tions and farms displaced by an activity
not subject to paragraphs (a). (b) or (c) of
this section, The grantee may also provide
relocation assistance to persons covered
under paragraphs (a). (b) or (c) of this
section beyond that required. Unless such
assistance is provided pursuant to State or
local law, the grantee must provide the
assistance only upon the basis of a written
determination that the assistance is appro-
priate and must adopt a written policy
available to the public that describes the
relocation assistance that the grantee has
elected to provide and that provides for
equal relocation assistance within each
class of displacees.
(e) Appeals. If a person disagrees with
the grantee's determination concerning
the person's eligibility for, or the amount
of a relocation payment under this section,
the person may file a written appeal of
that determination with the grantee. The
appeal procedure to be followed are de-
scribed in 24 CFR 42.10. A low- or
moderate-income household that has been
displaced from a dwelling may file a
written request for review of the grantee
decision, to the HUD Field Office.
(f) Responsibility of granree. (1) The
grantee is responsible for ensuring compli-
ance with the requirements of this section,
notwithstanding any third party's contrac.
tual obligation to the grantee to comply
with the provisions of this part.
(2) The cost of assistance required
under this section may be paid from local
public funds, funds provided under this
part, or funds available from other'
sources.
(3) The grantee must maintain records
in sufficient detail to demonstrate compli.
ance with the provisions of this section.
(g) 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 opportunity to lease and
occupy a suitable, decent, safe and sani-
tary dwelling in the same building or in a
.
.
24
A
.
.
.
I...oV1YllV1Ur'l11 r Ut:.Vt:.LUYMt:.,,,,"l
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 o~
(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 ~ 570.426,
570.430, or 570.435(d) that is granted for
the requested activity (HUD administered
Small Cities Program); or the submission
of an application to HUD by a city or
urban county under ~ 570.458 that is
granted for the requested activity
(UDAG). (This applies to dwelling units
owned by a Federal or State agency as
defined under the URA); or
(2) The tenant is required to move to
another dwelling in the real property but
is not reimbursed for all actual reasonable
out-of. pocket costs incurred in connection
with the move; or
(3) The tenant is required to move to
relocate temporarily and:
(i) Is not reimbursed for all reasonable
out-of-pocket expenses incurred in con.
nection with the temporary relocation,
including moving costs and any increased
rent and utility costs; or
(ii) Other conditions of the temporary
relocation are not reasonable.
~ 570.607 Employment and contracting
opportunities.
(a) Grantees shall comply with Execu-
tive Order 11246, as amended by Execu-
tive Order 12086, and the regulations
issued pursuant thereto (41 CFR Chapter
60) which provide that no person shall be
discriminated against on the basis of race,
color, religion, sex, or national origin in all
phases of employment during the perfor-
mance of Federal or federally assisted
construction contracts. As specified in
Executive Order 11246 and the imple.
menting regulations, contractors and sub.
contractors on Federal or federally assis-
ted construction contracts shall take affir.
I
mative action to ensure fair treatment in
employment, upgrading, demotion or
transfer, recruitment or recruitment ad-
vertising, layoff or termination, rates of
pay, or other forms of compensation and
selection for training and apprenticeship.
(b) Section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.c.
1701 u) 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 paint Section 40 1 (b) of the Lead-
Based Paint Poisoning Prevention Act (42
U.S.C. 4831(b)) directs the Secretary to
prohibit the use of lead-based paint in
residential structures constructed or reha-
bilitated with Federal assistance. Such
prohibitions are contained in 24 CFR Part
35, Subpart B, and are applicable to
residential structures constructed or reha-
bilitated with assistance provided under
this part.
(b) Notification of hazards of lead-based
paint poisoning. (1) The Secretary has
promulgated requirements regarding noti-
fication to purchasers and tenants of
HUD-associated housing constructed pri-
or to 1978 of the hazards of lead-based
paint poisoning at 24 CFR Part' 35,
Subpart A. This paragraph is promulgated
pursuant to the authorization granted in
24 CFR 35.5(c) and supersedes, with
respect to all housing to which it applies,
the notification requirements prescribed
by Subpart A of 24 CFR Part 35.
(2) For properties constructed prior to
1978, applicants for rehabilitation assis.
Published by Warren, Gorham. & Lamont. Inc.
I
09:0665
HDR RF-388
12-5-88
tance provided under this part and tenants
or purchasers of properties owned by the
grantee or its subrecipient and acquired or
rehabilitated with assistance provided un-
der this part shall be. notified:
(i) That the property may contain lead-
based paint;
(ii) Of the hazards of lead-based paint;
(iii) Of the symptoms and treatment of
lead-based poisoning;
(iv) Of the precautions to be taken to
avoid lead-based paint poisoning (includ-
ing maintenance and removal techniques
for eliminating such hazards);
(v) Of the advisability and availability of
blood lead level screening for children
under seven years of age; and
(vi) That in the event of lead-based
paint is found on the property, appropriate
abatement procedures may be undertaken.
(c) Elimination of lead-based paint haz.
ards. The purpose of this paragraph is to
implement the provisions of section 302 of
the Lead-Based Paint Poisoning Preven-
tion Act, 42 U.S.C. 4822, by establishing
procedures to eliminate as far as practica-
ble the hazards due to the presence of
paint which may contain lead and to
which children under seven years 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 Subpart'C
of 24 CFR Part 35.
(1) Applicability. This paragraph applies
to the rehabilitation of applicable surfaces
in existing housing which is assisted under
this part. The following activities assisted
under the Community Development
Block Grant program are not covered by
this paragraph:
(i) Emergency repairs (not including
lead-based paint-related emergency re-
pairs );
(ii) Weatherization;
(iii) Water or sewer hook-ups;
(iv) Installation of security devices;
(v) Facilitation of tax exempt bond
issuances which provide funds for rehabili.
tation;
(vi) Other similar types of single-pur-
pose programs that do not include physi-
cal repairs or remodeling of applicable
surfaces (as defined in 24CFR 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 S3,CXXl per unit.
(2) Deji[litions.
"Applicable surface." All intact and
nonintact interior and exterior painted
surfaces of a residential structure.
"Chewable surfaces." All chewable pro-
truding painted surfaces up to five feet
from the floor or ground, which are
readily accessible to children under seven
years of age, e.g., protruding corners,
windowsills and frames, doors and frames,
and other protruding woodwork.
"Defective paint surface. Paint on appli-
cable surfaces that is cracking, scaling,
chipping, peeling or loose."
"Elevated blood lead level or EBL."
Excessive absorption of lead, that is, a
confmned concentration of lead in whole
blood of 25 IJ./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 1 mg/cm'.
(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 Img/cm' or higher using an XRF shall.
be considered positive for presence of lead-
based paint.
(in) 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 perfonned under S 570.608(c)(3)(i)
and where defective paint surfaces are
found, treatment shall be provided to
I
HOUSING AND DEVELOPMENT REPORTER -
I
defective areas. Treatment shall be per-
fonned before final inspection and approv-
al of the work.
(ii) For testing performed under
S 570.608(c)(3)(ii) and where interior
chewable surfaces are found to contain
lead-based paint, all interior chewable
surfaces in any affected room shall be
treated. Where exterior chewable surfaces
are found to contain lead-based paint, the
entire exterior chewable surface shall be
treated. Treatment shall be perfonned
before final inspection and approval of the
work.
(iii) When weather prohibits repainting
exterior surfaces before fmal 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) Abaremenr merhods. 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
o,batement. Program requirements and lo-
cal program design will determine wheth-
er the cost of inspection, testing or abate-
ment is to be borne bv 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 enforcemenr. HUD
field office monitoring of rehabilitation
programs includes reviews for compliance
with applicable program requirements for
lead-based paint. 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 orher 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
Published by Warren, Gorham, & Lamont, Inc.
assistance which have lead-based paint
requirements which may have more or less
stringent requirements, the more stringent
requirements will prevail.
(ii) HUD responsibility. If HUD deter-
mines that a State or local law, ordinance.
code or regulation provides for lead-based
paint testing or hazard abatement in a
manner which provides a level of protec.
tion from the hazards of lead-based paint
poisoning at least comparable to that
provided by the requirements of this sec-
tion and that adherence to the require-
ments of this subpart would be duplicative
or otherwise cause inefficiencies, HUD
may modify or waive the requirements of
this section in such manner as may be
appropriate to promote efficiency while
ensuring such comparable level of protec-
tion.
(iii) Grantee responsibility. Nothing in
this section is intended to relieve any
grantee in the programs covered by this
section of any responsibility for compli-
ance with State or local laws, ordinances,
codes or regulations governing lead-based
paint testing or hazard abatement.
(iv) Disposal of lead-based paint debris.
Lead-based paint and defective paint de-
bris shall be disposed of in accordance
with applicable Federal, State or local
requirements. (See e.g., 40 CFR Parts 260
through 271.)
6:.,
~
S 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.
S 570.610 Uniform administrative
requirements and cost principles.
The recipient, its agencies or instrumen-
talities, and subrecipients shall comply
with the policies, guidelines, and require-
ments of 24 CFR Part 85 and OMB
Circulars A-87, A-IIO, A-122, and A-128'
implemented at 24 CFR Part 44), as
applicable, as they relate to the acceptance
'See footnote 1 for ~ S70.200(aXS).
~
~
26
A"..;'~' J....-~'-/.i. ..l."J.J.-J.... J.
I
...
;
and use of Federal funds under this part.
The applicable sections of 24 CFR Part 85
and OMB Circular A-110 are set forth at
S 570.502.
S 570.611 Conflict of interest.
':::"'J
--
(a) Applicabiliry. (I) In the procurement
of supplies, equipment, construction, and
services by recipients, and by subrecipients
(including those specified at S 570.204(c)),
the conflict of interest provisions in 24
CFR 85.36 and OMB Circular A-IIO,
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 acquisilion and disposi.
tion of real property and the provision of
assistance by the recipient, by. its subreci-
pients, or to individuals, businesses or
other private entities under eligible activi.
ties which authorize such assistance (e.g.,
rehabilitation, preservation, and other im-
provements or private properties of facili-
ties pursuant to S 570.202, or grants, loans
and other assistance to businesses, individ-
uals and other private entities pursuant to
S 570.203, S 570.204 or S 570.455).
(b) Conflicts prohibited. Except for the
use of CDBG funds to pay salaries and
other related administrative or personnel
costs, the general rule is that no persons
described in paragraph (c) of this section
who exercise or have exercised any func-
tions or responsibilities with respect to
CDBG activities assisted under this part
or who are in a position to participate in a
decision making process or gain inside
information with regard to such activities,
may obtain a personal or financial interest
or benefit from a CDBG assisted activity,
or have an interest in any contract, sub-
contract or agreement with respect there-
to, or the proceeds thereunder, either for
themselves or those with whom they have
family or business ties, during their tenure
or for one year thereafter. For the UDAG
program, the above restrictions shall apply
to all activities that are a 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 part.
t
.-':
"
.~
-
(d) Exceptions: threshold requirements.
Upon the written request of the recipient,
HUD may grant an exception to the
provisions of paragraph (b) of this section
on a case.by-case basis when it determines
that such an exception will serve to further
the purposes of the Act and the efTective
and efficient administration of the recipi.
ent's program or project. An exception
may be considered only after the recipient
has provided the following:
(I) A disclosure of the nature of the
conflict, accompanied by an assurance
that there has been public disclosure of the
conflict and a description of how the
public disclosure was made; and
(2) An opinion of the recipient's attor,
ney that the interest for which the excep-
tion is sought would not violate State or
'Iocal law.
(e) Facrors 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 efTect of the fol-
lowing factors, where applicable:
(1) Whether the exception would pro-
vide a significant cost benefit or an essen-
tial degree of expertise to the program or
project which would otherwise not be
available;
(2) Whether an opportunity was provid-
ed for open competitive bidding or negoti.
ation;
(3) Whether the person affected is a
member of a group or class of low- or
moderate-income persons intended to be
the beneficiaries of the assisted activity,
and the exception will permit such person
to receive generally the same interests or
benefits as are being made available or
provided to the group or class;
(4) Whether the affected person has
withdrawn from his or her functions or
responsibilities, . or the decision making
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
S 570,612 Executive Order 12372.
(a) General. Executive Order 12372,
Intergovernmental Review of Federal Pro-
grams, and the Department's implement.
ing regulations at 24 CFR Part 52, allow
each State to establish its own process for
review and comment on proposed Federal
financial assistance programs.
(b) Applicability. Executive Order 12372
applies to the CDBG Entitlement pro-
gram and the UDAG program. The Exec.
utive Order applies to all activities pro-
posed to be assisted under UDAG, but it
applies to the Entitlement program only
where a grantee proposed to use funds for
the planning or construction (reconstruc-
tion or installation) of water or sewer
facilities. Such facilities include storm
sewers as well as all sanitary sewers, but
do not include water and sewer lines
connecting a structure to the lines in the
public right-of-way or 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
S 570.700 Eligible applicants.
(a) Units of general local government
entitled to receive a grant under section
106(b) of the Act (metropolitan cities and
urban counties) may apply for loan guar-
antee assistance under this subpart.
(b) Public agencies may be designated
by eligible units of general local govern-
ment to receive a loan guarantee on notes
or other obligations issued by the public
agency in accordance with this subpart. In
such case the applicant unit of general
local government shall be required to
pledge its current and future grants under
the Act as securitv for the notes or other
obligations issued' by the public agency.
S 570.701 Eligible activities.
Loan guarantee assistance under this
subpart may be used for the following
activities undertaken by the unit of general
local government or its designated public
agency provided such activities meet the
requirements of S 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
U~:06tit\
(a) Acquisition of improved or unim-
proved real property in fee or by long-
tenn 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.
(I) 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 9 570,203.
U) Community economic development
projects eligible under 9 570.204.
(k) Acquisition, construction, recon-
struction, rehabilitation, or installation of
public facilities (except for buildings for
the general conduct of government), site
improvements, and utilities, for an eco-
nomic development purpose.
9570.702 Application requirements.
(a) Presubmission requirements. (]) Pri-
or to submission of an application for loan
guarantee assistance to HUD, the appli-
cant must comply with the presubmission
requirements specified in 9570.301 with
res~ec;t to the activities proposed for loan
guarantee assistance.
(2) If an application for loan guarantee
assistance is simultaneous with the appli-
cant's submission for its entitlement grant,
the applicant may use the statement of
community development objectives and
projected use of funds prepared for its
annual grant pursuant to 9570.301 by
including and identifying the activities to
HOUSING AND DEVELOPMENT REPORTER
I
be undertaken with the guaranteed loan
funds.
(b) Submission requirements. An appli-
cation for loan guarantee assistance shall
be submitted to the appropriate HUD
field office and shall consist of the follow-
mg:
(]) A copy of the applicant's final
statement of community development ob.
jectives and projected use of guaranteed
loan funds.
(2) A description of how each of the
activities to be carried out with the guar-
anteed loan funds meets one of the criteria
in 9 570.208.
(3) A schedule for repayment of the
loan which identifies the sources of repay-
ment.
(4) A certification providing assurance
that the applicant possesses legal authority
to make the pledge of grants required
under 9 570.703(b)(2).
(5) A certification providing assurance
that the applicant has made efforts to
obtain financing for activities described in
the application without the use of the loan
guarantee, the applicant will maintain
documentation of such efforts for the term
of the loan guarantee, and the applicant
cannot complete such financing consistent
with the timely execution of the program
plans without such guarantee.
(6) Certifications required pursuant to
9 570.303. For the purposes of this reo
quirement, the terms "grant" and
"CDBG" in such certifications shall also
mean guaranteed loan.
(c) Economic feasibility and financial
risk. The Secretary will make no determi-
nation with respect to the economic feasi-
bility of projects proposed to be funded
with the proceeds of guaranteed loans;
such determination is the responsibility
whether a loan guarantee constitutes an
acceptable financial risk, the Secretary will
consider the applicant's current and future
entitlement block grants as the primary
source of loan repayment. Approval of a
loan guarantee under this subpart is not to
be construed, in any way, as indicating
that HUD has agreed to the feasibility of a
project beyond recognition that pledged
grant funds should be sufficient to retire
the debt.
(d) HUD review and approval of applica-
tions. (1) HUD will normally accept the
grantee's certifications. The Secretary re-
serves the right, however, to consider
relevant information which challenges the
certifications and to require addItional
information or assurances from the grant.
ee as warranted by such information.
Published by Warren. Gorham. & Lamont. Inc.
I
(2) The field office shall review the
application for compliance with require-
ments specifIed in this subpart and for.
ward the application together with its
recommendation for approval or disap-
proval of the requested loan guarantee to
HUD Headquarters.
(3) The Secretary may disapprove an
application, or may approve loan guaran-
tee assistance for an amount less than
requested, for any of the following rea-
sons:
(i) The Secretary determines that the
guarantee constitutes an unacceptable fi-
nancial risk. Factors that will be consid-
ered in assessing financial risk shall in-
clude, but not be limited to, the following:
(A) The length of the proposed repay.
ment period;
(B) The ratio of expected annual debt
service requirements to expected annual
grant amount;
(C) The applicant's status as a metro-
politan city or urban county during the
proposed repayment period; and
(D) The applicant's ability to furnish
adequate security pursuant to
9570.703(b).
(ii) The guarantee requested exceeds the
maximum loan amount specified under
9 570.703(a).
(iii) Funds are not available in the
amount requested.
(iv) The applicant's performance does
not meet the standards prescribed in
Subpart O.
(v) Activities to be undertaken with the
guaranteed loan funds are not listed as
eligible under 9570.701(a) through (k).
(vi) Activities to be undertaken with the
guaranteed loan funds do not meet the
criteria in 9 570.208 for compliance with
one of the national objectives of the Act.
(4) The Secretary will notify the appli-
cant in writing that the loan guarantee
request has either been approved, reduced
or disapproved. If the request is reduced
or disapproved, the 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
I
APPENDIX L
I
U;;7.1 UVl
HDR RF-42~
6.1E--90
NON-FEDERAL GOVERNMENTAL AUDIT REQUIREMENTS
(24 CFR 44)
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Office dt the Secretary,
24 CFR PART 44
Non-Federal Government Audit
Requirements
AGENCY: Office of the Secretary, HUD.
ACTION: Final Rule
[50 FR 39086, Sept. 27, 1985]
PART 44-NON-FEDERAL
GOVERNMENTAL AUDIT
REQUIREMENTS
: 'P7\.
;~
-.:.,i?'
Sec.
44.) Purpose.
44.2 Definitions.
44.3 Scope of audit.
44.4 Frequency of audit.
44.5 Internal control and compliance
reVIews.
44.6 Subrecipients.
44.7 Relationship to other audit require-
ments.
44.8 Cognizant agency responsibilities.
44.9 Illegal acts or irregularities.
44.10 Audit reportS.
44.) 1 Audit resolution.
44.12 Audit workpapers and repons.
44.) 3 Audit costs.
44.14 Sanctions.
4.4.) 5 Auditor selection.
44.16 Small and minoritv audit firms.
44.17 Reponing. .
44. J 8 HUD audits.
Appendix to Pan 44-Definition of
Major Program as provided in the Single
Audit Act of 1984.
Authority: Single Audit Act of 198~ (3)
U.s.e. 7501-7507); sec. 7(d) of the De-
panment of Housing and Urban Devel-
opment Act (42 U.S.e. 3535(d)).
S 44.1 Purpose.
(a) This pan implemenls 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 Simde
Audit Act of 1984. 31 U.S.e. 7501-7507.
OMB Circular A-128 supersedes Attach-
ment p, "Audit requirements." of Circu-
lar A-I02. "Uniform requirements for
grants to State and local governments."
(I) This pan 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 pan to
those revisions.
(2) The difference between the lan-
guage of this pan and ofOMB Circular A-
128 generally reflects only the substitu-
tion of cenain terms and phrases reflect-
ing the implementation of the Circular
into the codification for HUD regula-
tions. For example. in cenain sections of
this pan, references to "Federal agencies"
in the Circular have been changed 10
"HUD" and references to "this Circular"
are replaced with "OMB Circular A-128."
(b) The Single Audit Act requires State
or local governments that receive
$100,000 or more a vear in Federal funds
to have an audit made for that year.
Section 7505 of the Act requires the
Director of the Office of Management
and Budget (OMB) to prescribe policies,
procedures and guidelines to implement
the Act. It specifies that OMB shall
designate "cognizant". Federal agencies,
determine criteria for making appropriate
charges to Federal programs for the cost
of audits, and provide procedures to
assure that small firms or firms owned
and controlled by disadvantage individu-
als have the opponunity to panicipate 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) 00,000 or more a year in Feder-
al financial assistance shall have an audjt
conducted in accordance with the Act's
requirements;
(2) State or local governments that
receive between 525,000 and S I 00.000 a
year shall have an audit conducted in
accordance with the Act's requirements
(Government-, Depanment-, agenc~- or
establishment-wide audil). 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 leSts described in OMB's
Compliance Supplement for Single Au-
dits of State and Local Governments for
Ihe specific Federal assis.ance programs
inVOlved. For those programs not covered
by the Compliance Supplement. the fi-
nancial audit shall include any specific
compliance tests required by HUD.
If the Federal assistance program is not
covered by the Compliance Supplement
PuohsnE!C Oy Warren, Gomam &. Lamonl. 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 S2S,OOO a year shall be
exempt from compliance with the Act
and other Federal audit requirements.
These State and local governments shall
comply with audit requirements pre.
scribed by State or local law or regulation,
(d) The Act does not exempt State or
local governments from maintaining rec-
ords of Federal financial assistance or
from providing access to such records to
Federal agencies. as provided in Federal
law or in 24 CFRPan 85.
(e) The Act is applicable to State and
local governments with respect to any
fiscal year that begins after December 3 I,
1984.
S 44.2 Definitions.
"Cognizant agency" means the Federal
agency assigned by OMB to carry out the
responsibilities described in this pan,
which incorporates OMB Circular A-128.
"Federal financial assistance" means
assistance provided by a Federal agency
in the form of grants, contracts, coopera-
tive agreements, loans, loan guarantees,
property, interest subsidies. insurance. or
direct appropriations, but does not in-
clude direct Federal cash assistance to
individuals. It includes awards received
directh' from Federal alZencies. or indi-
rectly 'through other units of State and
local governments,
"Federal alZencv" has the same mean-
ing as the ter~ "agency" in section 551(1)
of Title 5. United StateS Code.
"Generally accepted accounting princi-
ples" has the meaning specified in the
generally accepted governmenl auditing
standards.
"Generally accepted government audit-
ing standards" means the Standards For
Audit of Government Organi:ations. Pro-
grams. Acti\'ities. and Fu.nctions, devel-
oped by the Comptroller General, dated
Februarv 27, 1981.
"HUO" means the Depanment of
HousinlZ and Urban Development.
"lnd;pendent auditor" means:
(I) A State or local governmenl auditor
who meets the independence standards
specified in generally accepted govern-
ment auditing standards: or
'"l
-'
09:1602
(2) A public accountant who 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,
the Alaskan Native Claims Settlement
Act) that is recognized by the United
States as eligible for the special programs
and services provided by the United
States to Indians because of their status as
Indians.
"Internal controls" means the plan of
organization and methods and proce-
dures adopted by management to ensure
that:
(I) Resource use is consistent with
laws, regulations, and policies;
(2) Resources are safeguarded against
waste, loss, and misuse; and
(3) Reliable data are obtained, main-
tained, and fairly disclosed in 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 part.
"Public accountants" means those in-
dividuals who meet the qualification
standards included in generally accepted
government auditing standards for per-
sonnelperforming government audits.
HOUSING AND DEVELOPMENT REFORTEF.
I
"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 Nonhern 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 beneficiarv 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 depanments, agencies or es-
tablishments that received, expended, or
otherwise administered Federal financial
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. GortIam & Lamont, Inc.
I
ments, agencies, and establishments for
the same fiscal year may be considered a
single audit.
(c) Public hospitals and public colleges
and universities may be excluded from
State and local audits and from the
requirements of this part. However, if
such entities are excluded, audits of these
entities shall be made in accordance with
statutory requirements and the provisions
of Circular A-IIO, "Uniform require-
ments for grants to universities, hospitals,
and other nonprofit organizations,"
(d) The auditor shall determine wheth-
er:
(I) The financial statements of the
government, department, agency or es-
tablishment present fairly its financial
position and the 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.
S 44.4 Frequency of audit.
Audits shall
unless the State
has adopted by
constitutional or
be made annually
or local government
January I, 1987, a
statutory requirement
4
COMMUNITY DEVELOfENT 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 begirming before January 1.
1987.
~ 44.5 Internal control and compliance
reviews.
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 review, 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.
(1) In order to determine which major
programs are to be tested for
compliance, State and local
governments shall identify in their
accounts all Federal funds received and
expended and the programs under
which they were received. This shall
include funds received directly from
Federal agencies and through other
State and local governments.
(2) The review shall include the
selection and testing of a representative
number of charges from each major
Federal assistance program. The
selection and testing of transactions
shall be based on the auditor's
professional judgment considering such
factors as the amount of expenditures
for the program and the individual
awards: the newness of the program or
changes in its conditions: prior
experience with the program.
particularly 8S revealed in audits and
other evaluations (e.g.. inspections.
program reviews): the extent to which
the program is carried 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 adverse findings.
(i) In making the test of transactions,
the auditor shall determine whether the
amounts reported as expenditures were
for allowable services or benefits, and
whether the records show that those
who received services or benefits were
eligible to receive them.
(ii) In addition to transaction testing.
the auditor shall determine whether
matching requirements. levels of effort
and earmaking limitations were met:
whether Federal financial reports and
claims for advances and
reimbursements contain information
that is supported by the books and
records from which the basic financial
statements have been prepared: and
whether amounts claimed or use.i for
matching were determined in
accordance with OMB Circular A-87.
"Cost principles for State and local
governments." and Attachment F of
OMB Circular A-102.
(Hi) 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.i1able from the Government Printing
Office. For those programs not covered
in the Compliance Supplement, the
Published by Warren, Gorham & Lamont, Inc.
1
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 OMB control number 2535-
00(4).
~ 44.6 Subreclpients.
State and local governments that
receive Federal financml 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:
(c) 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
~ 44.7 Relationship to other audit
requirements.
(a) The Single Audit Act provides that
an audit made in accordance with OMB
Circular A-128 shall be in lieu of any
financial or financial compliance audit
required under individual Federal
assistance programs. To the extent that
a single audit provides HUD with
information and assurances the
Department needs to carry out its
overall program responsibilities. such
information shall be used. However, any
additional audits that are necessary to .
carry out responsibilities under Federal
law and regulation shall be planned and
carried out in such a manner as to avoid
duplication,
(h) 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 Federa' audit officials.
(c) HUD audit requirements in this
part do not authorize any State or local
government or suhrecipient thereof to
constrain HUD in any manner. from
carrying out additional audits.
(d) If Hun conducts or contracts for
audits in addition to the audits
conducted by recipients under this part,
the Department shall, consistent with
other applicable laws and regulations,
arrange for funding the cost of such
additional audits.
~ 44.8 Cognizant agency responsibilities.
(a) The Single Audit Act provides for
cognizant Federal agencies to oversee
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 agenc~'. 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 DEV'OP\1E~T REPORTER
(b)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 irregulari ties.
They should also inform State or local
law enfOl:cement 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.
~ 44.9 Illegal acts or Irregularities.
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.
~ 44.10 Audit reports.
(a) Audit reports shall be prepared at
the completion of the audit. The audit
report shall state that the audit was
made in accordance with the provisions
of HUD requirements at 24 CFR Part 44,
The report shall be made up of at least:
(1) The auditor's report on financial
statements and on a schedule of Federal
assistance: the financial statements: and
a schedule of Federal assistance,
showing the total expenditures for each
Federal assistance program as identified
in the Catalog of Federal Domestic
Assistance. Federal programs or grants
that have not been assigned a catalog
number shall be identified under the
caption "other Federalassistance."
(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
financial reports and claims for
advances and reimbursements;
(H) 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 DEVELOPMENT BLOCK GRANTS
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(b) The three parts of the audit report
may be bound into a single report, or
presented at the same time as separate
documents.
(c) All fraud, abuse. or illegal acts or
indications of such acts. including all
questi6ned costs found as- the result of
these acts that auditors become aware
of. should normally be covered in a
aeparate 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 reason 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 witP generally
accepted government audit standards.
reports shall be submitted by the auditor
to the organization audited and to tholle
requiring or arrangiD.g for the audit. In
addition. the recipient shall submit
copies of the reports to each Federal.
. department or agency that provided
Federal assistance funds to the
recipient. Subrecipients shall aubmit
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 tban $100.000 in
Federal funds shall submit one copy of
the audit report, within 30 days after
isauance. to a central clearing bouse,
designated by OMB. The clearing bouse
will keep completed audits on file and
follow up with State and local
governments that have not submitted
required audit reports.
(h) Recipients shall keep audit reports
on file for three years after their
issuance.
(Approved by the Office of Management and
Budget under OMS control number 2535-
0094.1
f 44.11 Audit resolution.
(a) As described in t 44.8. the
cognizant agency sball be responsible
for monitoring the resolution of audit
fmdings that affect the progrlDIlS of more
than one Federal agency. Resolution of
findings that relate to the programs of a
aingle Federal agency will be the
responsibility of the recipient and that
agency. Alternative arrangements may
be made on a case-by-case basis by
agreement among the agencies
concerned.
(b).Resolution.shall be made within
six months aIter receipt of the report by.
the Federal departments and agencies.
Corrective action should procaed as
rapidly as possible.
f 44.12 AUdit wor1tpapers ~ reports.
Woricpapers and reports shall be
retained for a minimum of three yean
from the date of the audit report. unless
the auditor is notified in writing by the
cognizant agency to extend the retention
period. Audit workpapeni shall be made
available upon request to the cognizant
agency or its desigpee or the General
Accounting Office. at the completion of
the audit.
(Approved by the Office of Management and
Budget under OMS control number 2535-
0094.)
f 44.13 Audit ~ta.
The cost of audits made in accordance .
with the audit requirements of this part
are allowable charges to Federal
assistance programs.
(a) The charges may be considered a
direct cost or an allocated indirect cost.
detennined in accordance with the
provisions of OMB Circular A-87. "Cost
principles for State and local
governments,"
Published by Warren, Gorham & Lamont, Inc.
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HDR RF-373
5-9-88
(b) Generally. the percentage of costs
charged to Federal assistance programs
for a single audit shall not exceed the
percentage that Federal funds expended
represent of total funds expended by the
recipient during the fiscal year. The
percentage may be exceeded. bowever.
if appropriate documentation
demonstrate8 higher. actual,cost.
f 44.14 S8nct1ons..
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~ued inability or'
unWl1Iingn!!s~ t.o havE;.a proper.audit.
Federal agencies shall consider- other
appropriate sanctions, including:
(a) Withholding a percentage of
assistance payments until the audit is
completed satisfactorily;
(b) Witholding or disallowing
overhead costs; and
(c) Su~pendingthe Federal assistance
agreemeiit' until the audit is made. .
9 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 while 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.
~ 44.16 . SrMII and mtnorIty audit ftrmL'
Small audit firms. and audit firms
owned and controlled by socially and
economically disadvantaged
individuals. shall have the maximum
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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"
include a the term "audit firms controlled
by socially and economically
diSadvantage individuals",) Recipients
of Federal assistance shall take the
following steps to further this goal:
(a) Assure thatsmall audit flmls are
used to the fulle3t extent practicable:
(b) Make information on forthcoming
opportunities available to. and arrange
time schedules for the audit so aa 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 ofsmaU audit firms when a
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HOUSING AND DEVELOPMENT REPORTER
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contract is too large for an individual
small firm; ana
(0 Use the services and assistance. as
appropriate. of the Small Business
Adm1nistration in the solicitation and-
utili:Altion of small audit firms.
~ 44. 17 Reporting.
HUD shall report to the Director of
OMB-on or before March 1,1987, and
annually thereafter, on the effectiveness
of State and localgovernmenta in
carrying out the req~ments of the
OMB Circular. The report shall identify
each Slate or local government or Indian
tribe that, in the opinion ofHUD, has
failed to comply with OMB Circular or
with this'part.
~ 44.18' HUD audita.
(a) The Secretary of HUD or the
Secretary's authorized representative
shall have access to all books. accounts.
records. reports, files and other papers
or property of a recipient organization
pertaining to Federal assistance
supplied by'HUD to the recipient
organb:ation, for the purpose of making
Published by Warren, Gorham & Lamont. Inc.
specific suveys, audits. examinations.
excerpts and transcripts.
Appendix to Part 44-Definition of Major
Program as Provided in the Single Audit Act
of 1984
''Major Federal Asslstanca Program," for'
State and local governments having Federal
assistance expenditures between $100,000
and $100 million dollars, means aoy program
for which Federal expenditures during the
applicable year exceed the largar of $300,000.
or 3 percent of such total expenditures.
Where total expenditures of Federal
assistance exceed $100 milfioo, tha following
criteria apply:
Total expendotures of F_ financial
lISSilIlanc8 tcr an programs
Majer. Federal
assistance
program
means any
program 1ha1
ex~
"klr._
But Iesa tl\an-
$100 million ...__...... $1 billion...................... S3 million.
$1 billion........_....__ S2 binion...................... $4 million.
$2 bilIion..........._._. S3 billion.._.............;... $7 million.
S3 bil1ion...................... $4 billion...................... $10 mWlion.
$4 billion ..............._..... SS billion ...................... $13 mWIIon.
SS billion........____. 56 billion............._...... $1 S mmion.
56 billion.........._..._ $7 billion........._....._... $19 million.
Ovet $7 billion m......... ....................................... S20 million.
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