CLEARWATER COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM AGREEMENT
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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 IICITYII, and HOMELESS EMERGENCY PROJECT, as
further identified in Appendix A, hereinafter referred to as the IIPSAII. 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 Ilprogram", with federal financial assistance under Title I
of the Housing and Community Development Act of 1974, as amended, hereinafter
called the IIActll, and
WHEREAS, the City of Clearwater Planning & Development Department,
hereinafter called the IIDepartmentll, 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 IIprojectll, 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 th i s 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 provision~
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
termi nated pursuant to paragraph 19 hereof. Any funds wh i ch the Department
determines were not properly expended shall be refunded to the City.
5. The PSA shall comply with the provisions of OMB Circular A-HO,
provided in Appendix G, and with the provisions of OMB Circular 122, provided
in Appendix H, or the appropriate successors documents of these documents. The
PSA shall permit the City to audit the PSA's financial operation including but
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not limited to compliance with applicable provisions of Federal law and
regulations. All PSA financial records relating to the Project are subject to
review by the City.
6. All subcontractors under this Agreement shall be approved by the City.
7. All purchases of consumable materials, capital equipment and services
shall be in conformity with the Procurement Standards set forth in OMB Circular
A-110, Attachment O. Accountability for project property and equipment shall
be in accordance with the requirements therein set forth.
8. The City agrees to make payment of budgeted costs on a reimbursement
basis. Requests for payment shall be as specified in Attachment B. No advance
payments shall be made to the PSA. All costs and invoices for requests for
payment shall be supported by properly executed payrolls, time records, invoices,
contracts, or vouchers, or other official documentation evidencing in proper
detail the nature and propriety of the charges. All checks payrolls, invoices,
contracts, vouchers, orders or other accounting documents pertaining in whole
or in part to the Agreement shall be clearly identified and readily accessible.
The final request for reimbursement hereunder shall be submitted within 30 days
after completion of all services to be performed by the PSA and the City shall
not be responsible for payment of any charges, claims or demands hereunder not
received within said thirty day period.
9. The PSA shall upon the expiration of this Agreement transfer to the
City any CDBG funds on hand and any accounts receivable attributable to the use
of CDBG funds. Program income funds are excluded from this provision as provided
below.
Program income funds shall be retained by the PSA so long as the activities
that will be undertaken with the program income are the specific activities that
meet the provisions of this Agreement. These funds shall be adjusted by the City
according to the principles described in paragraphs (b)(2)(i) and (ii) of Section
570.504 of the Housing and Community Development Act 1974, as amended of which
state that:
(1) Program income in the form of repayments to, or interest earned on
a revolving fund as defined in Section 570.500(b) shall be substantially
disbursed from the fund before additional cash withdrawals are made from the U.S.
Treasury for the same activity.
(2) Substantially all other program income shall be disbursed for el igible
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. IIPropertyll as
used in this Paragraph shall mean nonexpendable tangible property valued at $200
or more with a remaining life expectancy of one year or more. The PSA shall
retain custody of property acquired with federal funds so long as the property
is used for the purposes described in Appendix A. When no longer used for such
purpose, the City shall assume custody of the property upon written notice to
the PSA. Upon purchase and receipt of property, the PSA shall submit to the
Department a Property Receiving Report. Stolen, lost or returned property shall
be reported immediately to the Department. Thirty days prior to the end of the
grant year or immediately upon termination of this Agreement, the PSA shall
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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 rea 1 property under the PSA 's contro 1 that was acqu i red or
improved in whole or in part with CDBG funds in excess of $25,000 must:
(1) Be used to meet one of the national objectives in Section 570.901 of
the Housing and Community Development Act of 1974 as amended until five years
after expiration of this Agreement, or for such longer period of time as
determined to be appropriate by the City; or
(2) Disposed of in a manner that results in the City being reimbursed in
the amount of the current fair market value of the property less any portion of
the value attributable to expenditures of non-CDBG funds for the acquisition of,
or improvement to, the property. (Reimbursement is not required after the period
of time specified in paragraph (b)(8)(i) of Section 570.503 of the Housing and
Community Development Act of 1974, as amended.
12. Nothing in this Agreement shall be construed to permit invasion of
the privacy of individuals who are served by the project, nor shall this'
Agreement be construed to require the PSA to publish or release information to
third parties which would invade the privacy of such individuals. Information
obtained by the Department as required by this Agreement shall not be used or
disclosed in such a way as to invade individual privacy and client relationships,
unless Florida law pertaining to public records requires public inspection of
records containing said information.
13. The PSA shall obtain prior written approval by addendum to this
Agreement for any of the following changes:
a. Substantial changes in the project work plan.
b. Changes in any budget line item.
14. The PSA agrees to fully participate in the implementation and
maintenance of an evaluation system to continually monitor the project. This
shall include, but not be limited to, periodic submission of data reports which
will be used by the Department for inclusion in the Annual Grantee Performance
Report, periodic monitoring visits by the Department for conformance with this
Agreement, and continuing assessments of performance hereunder. PSA agrees to
comply with evaluation and information requirements of the Department. A final
report shall be submitted by the PSA within 30 days after the end of the contract
term. This final report shall consolidate reporting of all project participants.
15. PSA shall establish and maintain on an accrual basis an accounting
system in accordance with the Standards of Grantee Financial Management System
as set forth in OMS Circular A-lID or the appropriate successor document and in
accordance with generally accepted accounting principals and standards where
these principals and standards are not in conflict with A-lID or its successor.
PSA agrees to modify or correct said systems in accordance with the City's
requirements.
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16. PSA shall maintain such records and accounts as are deemed necessary by
the City to assure a proper accounting for all project funds. All such records shall
be available for audit, inspection or copying purposes at any time during normal
business hours and as often as the City, HUD, or representatives of the Comptroller
General of the United States, or other federal agency, may deem reasonably necessary.
Such records shall be retained for such period as required by applicable laws and
regulations and may thereafter be destroyed only with the prior written approval of
the City. Such records shall include financial records, audits, supporting
documents, statistical reports and client files. PSA will comply with such
additional requirements as to maintenance of records as the City may request in
writing. In the event the PSA cannot continue to be responsible for maintenance of
the records, then the City shall be so notified in order to take custody of the
records. The City may, at any time, on written notice to the PSA, take custody of
any and all records established under this Agreement.
17. The PSA shall hold and save the City, its officers, agents, and employees
harmless from liability of any nature or kind, including costs and expenses, for or
on account of any su its or damages of any character whatsoever resu 1 t i ng 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 income.
21. No person with responsibilities in the operation of the project will
discriminate with respect to any project participant because of race, color,
national origin, or sex. No participant shall be excluded from participation in,
be denied of, or be subjected to discrimination under any program of activity funded
in whole or in part with Community Development Funds because of race, color,
national origin or sex, as set forth in Other Program Requirements in Appendix 0,
(CFR 570.601).
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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 fund i ng beyond the term covered by th is Agreement or for a new pub 1 i c
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 demand such increase. The PSA will not use these
funds for publicity or propaganda purposes designed to support or defeat legislation
pending before federal, state or local governments.
23. The PSA shall comply with the requirements of Section 3 of the Housing and
Urban Development Act of 1968, as amended, and the HUD regulations issued pursuant
thereto, attached hereto as Appendix E.
24. The PSA will comply with Equal Employment Opportunities Executive Order
11246, as amended, attached hereto as Appendix F.
25. The PSA will comply with applicable federal law and regulations,
including but not limited to:
National Environmental Policy Act of 1969;
Flood Disaster Protection Act of 1973;
HUD Implementation of the Lead-Based Paint Poisoning Prevention Act;
Clean Air Act;
Historic Preservation Requirements of P.L. 89-656
Archeological and Historic Preservation Act of 1974;
Executive Order 11593;
Architectural Barriers Act of 1968;
Hatch Act;
Federal Water Pollution Control Act;
Federal Labor Standards provlslons 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 part i es hereto have caused th i s Agreement to be
executed as of the day and year first above written.
HOMESSlESS EMERGENCY PROJECT, INC.
By ((It;e L ~
President
ATTEST: ~
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Secretary
~. (~~
CITY OF CLEARWATER, FLORIDA
By
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Ron H. Rabun
City Manager
R ita Garvey
Mayor-Commissi
ATTEST:
.....,,0- - _ _ _. .
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Approved as to form & correctness:
..-,;~~' ~~
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Agency: Homeless Emeraencv Project
Year: 1990 - 1991
APPENDIX A
Ident;f;cat;on of Aaency and Spec;f;c Serv;ces to be Prov;ded
AGENCY
Legal classification:
Homeless Emergency Project
A non-profit corporation organized and existing under
the laws of the State of Florida.
Name:
Principal Office:
1120 North Betty Lane, Clearwater, FL 34615
Mailing Address:
Agent:
1120 North Betty Lane, Clearwater, FL 34615
Barbara Green, Director
813-442-9041
PROGRAM OF AGENCY
The Homeless Emergency Project provides Transitional shelter, food, clothing,
counseling, and inter-agency referrals to families with children in crisis
situations wherein they are without shelter, financial resources and other
support systems.
SPECIFIC SERVICES TO BE PROVIDED UNDER THIS AGREEMENT
Homeless Emergency Project
Improvements to include renovating the kitchen of Everybody's Tabernacle
(a secular building leased to Homeless Emergency Project), installing a
wheelchair ramp for the office, replacing the roof of the office and the
women's shelter, installing gravel to the driveway, installing ramps,
steps, and railing at the women's shelter, and replacing the leaking sinks
and installing fire alarms at the women shelter.
SCHEDULE
I. Homeless Emergency Project.
General Statements
A. Program shall begin operation no later than October I, 1990, or one month
after the full execution of this Agreement.
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B. Funds for this project shall be expended by April 30, 1991. Any request
for an extension will have to be approved by the Community Development
Manager.
C. Monthly activity reports shall be forwarded to the City by the Agency
on a monthly basis and shall reflect program activity from the previous
month. These reports shall be forwarded to the City no later than the
15th of the end of the previous month. Reports shall be forwarded for
the entire term of the agreement which covers October 1, 1990 through
September 30, 1991.
D. Construction activity shall begin no later than May 1, 1991.
E. Special Data requests will be responded to within 15 calendar days,
subject to the request being of reasonable limited scope.
F. Records will periodically be viewed by the City to verify reimbursement
accuracy and as part of the yearly monitoring process.
G. Payment will be in accordance with the payment schedule identified in
Appendix C.
H. At no time sha 11 payments be forwarded to the agency by the City the
agency has not satisfactorily completed the tasks identified in this
agreement.
II
Agency: Homeless Emeraency Project
Year: 1989 - 1990
APPENDIX B
Project Award
Homeless Emergency Project
Funding for renovations and improvements of up to $21,100.00 will be provided
to the Homeless Emergency Project.
BUDGET
Homeless Emergency Project
October 1, 1990 - September 30, 1991
CDBG
OTHER
Construction
Renovation of Kitchen to code
Install concrete wheelchair ramp
Replace office and women's shelter roof
Install gravel to the driveway
Install ramps and steps to women's shelter
Install railing to the women's shelter
Repair sinks and install fire alarm to
the women's shelter
TOTAL
TOTAL
$15,000 0 $15,000
520 0 520
520 0 520
710 0 710
1,900 0 1,900
2,000 0 2,000
450 0 450
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$21,100 0 $21,100
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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 i nvo ices and a copy of the check pa i d to the supp 1 i er. 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 be certified by the agency's designee
that they are accurate and within the guidelines of the agreement.
All requests for reimbursement shall be forwarded to the City of
Clearwater Planning and Development Department, P.O. Box 4748, Clearwater,
Florida 34618.
Any program income shall be submitted to the CITY through the DEPARTMENT
at least Quarterly. Fees collected, if any, shall be reported but are not
to be construed as program income.
Requests for reimbursement shall not be reduced by any program income
received.
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Subf'lar1 K-Qlher prooram
Requlremenl.
I 570,&00 GeMral
(II) Section l04(b) c.! the Acl provides
tlaal an)' grant unde!: Hection 100 of the
Act ,holl be a: .r:. nly if the grontee
certifiel '10 the slllisfaclion of the
Secrelilry, among olher thins!. lhol lhe
grant "~'ilf ~e.conducled and
administered in confonnily with Pub. L
86-352 and Pub. L go...2lW:' and. further.
thot the grantee "will comply with lhe
olhcr provision. of Ihis tille and wiLh
other applicable laws:' SectioD l04(d)(l)
of Ihe Act requirea thai the Secretary
dt:lermine wilh respect 10 granls made
pursuant 10 scction l06(b) (Entitlement
Grants) and 106(d}(2)(B) (HUO-
Administered Small Cities Cranta). at
Icasl on an aMual basis. among other
things. "wheLher the grantee haa carried
out lits) certifications in compliance
with !.he requirements and lhe primary
objective. of this Utie and wiLh olber
applicable laws' , , :. Certain other
statules are expreasly made applicabl,
10 Rctiviues assisted under the Act by
the Act ilself. while oth".r laws not
referred to in lhe Act lIIay be applicable
lo.auc.b activitiea by their own tenns.
Certain .tatute. or Executive Orders
which lIIay ue applicable to activilies
assiBled under the Act by their own
tenu; are administered or enlorced by
governmental departrDenll or agencies
other than the Secretary or the
DepartxnenL This Subpart K enumerate.
laws which tbe Secretary will treal 88
applicable to grants made under section
106 of the Act. olber th~ grants 10
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04R PROGRA.~ REQUlRENENTS
Sta tes made pursuant 10 scction l00(d)
of lhe Act. lor purpolee 01 the
delenninolions described above 10 be
made hy Ihe Secrelary under section
l04(d)(l) of the Act. including stalule.
expressly mode applicoble by the Acl
and certain other atatutes snd Executive
Order. for which the Secretary h88
enforcemenl responllibility. The absence
of mention herein of any other stalule'
lor which Ihe Secretary docs not have
direct enforcemenl respon.ibililY i. nol
intcnded 10 be token as aD indication
thol. in Ihe Secretar)"s opinion. such
sta lule or Ex.ecutive Order Is nol
spplicllole 10 aClivities ouiated under
the Act. For lows which the Secretory
willlreal as applicable \0 grants made
10 Stales under section l00(d) of the Acl
for purposes of the dete~inQtion
required 10 be tnade by the Secretary
purauant to aection l04(d}(Z) of Ihe Act,
see I 570.496.
(b) This Subpart also 8e\s Corlb certain
additional program requirementa which
the Secretary has determined to be
applicable to grantl provided under the
Act III a malter oC administrative
dIscretion.
(c) in addition to granta made
pursuant 10 .ection 106(b) and
lOG(d)(2)(B) of the Act (Subparts 0 and F
of this Part. respeclb'ely). the .
requirements oC Lhia Subpart K are
applicable 10 grants made pursuant \0
sections 107 and 119 of the Act
(Subparts E and G. respectively).
f 570.601 Pub. L 88-352 and Pub. L 90-
284; Executive Order 11063-
Section l04(b) of the Act provides lbat
any grant under 8ection 106 of the Act
shall be made only iI Lhe gTantee
ce'rtinea to \he utisIac\ion of the
Secretary that the grant "will be
conducted and admini.tered in
conIormily with Pub. L 88-352 and Pub.
L 90-284:. SimilarlY.BectioD 107
provides that no grant may be made
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under that aection (Secretary',
Diacretionary Fund) or aeclion n9
(UDAG) "'-lthoutl8lisfaclory a88\1ranCeS
10 the aame eUecl.
(a) '.P\lb. L ~5Z" refeTl 10 Tille VI
of the Civil Rights Act oC 1004 (.(2 V,S.C.
zoood' e{ ,eq.), ~'hich providea thai no
petlon In the United States shall on the
ground of race. color. or notional origin.
be excluded [rom porticipotion In. be
denied the benefit. oC. or be suujected to
diacrimination under any program or
8cth'lly receiving Federal finonclal
lIuiatance. Seclion 602 of the Ch'U
Righll Act of 1004 directs escb Federal
dcpartmenl and agcncy empowen:d to
extend Federallinancial assislance to
any progrom or octiviry by woy of STanl
10 eIIectuote the foregoing prohibition
by iuuing rulea, regulationa, or orden of
general arplicobility which shall be
consislenl wilh achicvemenl of the
. . stolute authori~i"1lthe financial
ussillance. HUU regulatton.
implementing the requirement. of Tille
VI with respect 10 HUD progrom~ are.
contained in 24 ern Pari 1. .
(b) "Pub. L 90-W4" reiers 10 TilJe VIII
of the Civil Righi. Act of 1968 [42 V.S.c.
3GOl ~I seq.). papularl)' known as the
Fair Housing Act. which provides that il
is the polic)' of the United Sla Ie. to
pro\'ide. wiLhin constitutional
limitationa. for fair housing throughout
the United Stalea and prohibils any
pel'llon frolIl discriminating in lhe sale or
rental of housing. the financing of
housing. or Lhe provision of brokerage
sero.oicea. Including in any wey making
unavailable or denying a dwelling to
any ,pe l'II on. because of race. color.
religion. aex. or national origin. Tille
VIII further requires the Secretary to
administer the programs and activities
relating to hou6ing and urban
development in a manner affirmatively
to lurther the purposes of Tille Vlll.
Pursuant 10 lhis statutory direction. the
Secretary requires that grantees
adminiater all programs and aCliyities
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related to housing nnd community
dcvelopmt!nt in a manner to
affinnlllivel)' further {~jr housing.
(c) Executive Order 11003.85
amended by Executive Order 12259.
direct. the Department to lake all :lction
necessary and appropriate 10 prevent
discriminution because of race. color.
religion (creed). selt. or national origin.
in the snle. lessing. renlal. or other
disposition of residential property and
related facililics (including land to be
devcloped for residential use). or in the
use or occupancy lhereof. if .uch
property and related facilities are.
umong other things. provided in whole
or in pari with lhe aid of lonns.
advances. granls. or contrihutions
ll~ree\i.lo be milde b}' Ihe Federal
Government. HUO regula lions
imlJlcmenling Execulivc Order 11003 are
contained in Z<l CFR Parll07.
~ 570.602 Seetlon 109 ollh. Aet.
(a) Section 109 of Ihe Act requires that
no person in the United States shell on
the ground of race. color. national origin
or sex. be excluded [rom participation
in. be denied the benefils of, or be
subjected to discrimination under. any
program or activity funded in whole or
in part with community development
[unds made a\'ailable pursuant to the
Act. For purposes of Ihis seclion
"program or activit!''' is defined as any
funclion conducted by an identifiable
administralive unit of the recipient. or
by any unit of govemment.subrecipient.
or private coniractor rcceiving .
comrnunilydcvelopmcnl funds or loans
from Ihe recipient. "Funded in whole or
in pari .....ilh community develcpmenl
funds" means that communily
development funds in an)' amounl in the
form or granls or proceeds from HUD .
guaranteed loans hsve bee!).lransfcrred
by the recipient or a subrecipicnl 10 an
idenlifioble administrath'e unit and
disbursed in a prosram .:r activity.
(b) Specific discriminatory octio/Js
prohibited and carrectil'e actions.
(1) A recipient mal' nolo under any
program or acth'ily to which the
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regulations of this Part may appl)'
directl}' or throur,h contrsctua: or olher
llfrangl'ments. on the ground of race.
colur. nalional origin. or sex:
(il Deny anr f:lcililie,. .ervice..
fini1ncial /lid or other benefits pro\.jded
under the program or activity.
(ii) Provide on)' facilities. .erviccs.
Cinanciltlaid or other bendils which are
different, ur are provided in a differenl
form from thut provided 10 othcrs under
1111: program or activity.
(iiil Subject to segrcgated or scparale
trentlTlent in anl' fucility in, or in allY
mailer of process relatgd 10 receipl of
any service or uenefil under lhe program
or activity.
(iv) Restrict in any woy access to. or
in Ihe enjoyment of any advanlage or
pri\'i1<:ge enjoyed by others in
cOMeclion with facilities. services.
financial aid or other benefits under the
progr:lm or activity.
(v) Treat an individual differenlly
from others in determining whelher the
individual satisfies any admission,
enrollment. eligibility, membership. or
other requirement or condition which
the individual must meel in order 10 be
provided any facilities. services or other
benefil pro\'ided under the program or
acti~:~ .
(vi) Den}' an opportunity to participate
in a program or activily as an employee.
(2) A recipient mal' not utilize cziteria
or methods of lIdministration which
have the effect of subjecting individuals
10 discrimination on the basis of race.
color. national origin, or sex. or have the'
effect of defeating or substantially
impairing accomplishmenl of Ihe
olJjectives of the program or activity
with respect 10 individuals of 8
particular race. color. national origin. or
sex.
13) A recipient in determining Ihe site
or location of housing or facilities
provided in whole or in part wilh funds.
under this part. may not make selections
of such sile or location which have Ihe
effect oC excluding individuals from,
denying them the benefits oc. or
subjecting them to discrimination on the
0-2
I
gruund oC ruCC. ctllor. na tional crigin. or
sex: or which have Ihe purpo~eor eff~cl
of dcfl'otin~ or substanlially impairing
lhe acr:ompli6hmcnl of the objectives of
lhe Act Rnd of this seCtion.
(<I)(i)In adminislering a program or
activity funded in whole or in part wilh
CDllG funds regardinR which lhe
recipient has prc\'iously dilcriminllled
ogainst pcrsons on the ground oC recc.
color. nUlionul origin or .ex. the
recipient must luke affinnalive action \0
overcome lhe ecrects of prior
discrimination,
Iii) E\'en in the ausence of such prior
discrimination, a recipient in
administering a progrnm or aclivity
funded in whole or in part with CODe
funds should luke affirmalive aclion 10
overcome the effects of condilions
which would otherwise resull in limiting
parlicipatiun by persons oC 8 partit:ular
race. culor. nalional origin or sex.
Where previous discriminatory praclice
or usage tends. on the ground of race.
color. national origin or sex. 10 exclude
individuals rrom parlicipa tion in, 10
deny them the benefils or. or 10 subject
thcm to discrimination under any
program or activit}' 10 which Ihis part
applies. the recipienl has an obligE:lion
10 lake reasonable aclionto remove or
overcome the consequences of Ihe prior
discriminalory prliclice or usage, and to
accomplish tite purpose of Ihe Act
(Hi) ^ recipient shall not be prohibited
by this part from taking any acUon
eligible under Subpart G to ameliorale
an imbalance in services or facilities
provided to any geographic area or
specific group of persona within its
jurisdiclion. where .the purpose of such
action in 10 overcome prior
discriminatory practice or usage.
(5) Notwithstanding anything to \he
contrary in this section. nOlhing
conlained herein shall be construed to
prohibit an)' r~cipient from mainlaining
or conslructing separate living facililies
or resl room [acililie. Cor 'the dWerent .
sexes. Furthennore. selecUvil)' on Ihe
basis of sex is not prohibiled when
institutional or custodii1l services can
'1 APPEND IX E
I SECTION 3 CLAUSE I
rilE FOLLOWING SECTION 3 CLAUSE SHALL gE INCLUDED IN ALL CONTRACTS FOR \.lORK IN
CONNECTION WIn! A SECTION 3 PROJECT:
A. The ....ork to be performed under this contract is on a project assisted
under a program providing direct Federal financial assistance from
the Department of HousinK and Urban Development and is subject to the
requirements of Section 3 of che Housing and Urban Development Act of 1968,
as amended, 12 U.S.C. l70u. Section 3 requires chat Co the greatest extent
feasible opportunic1es 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 ovned in
substantial part by persons residing in the area of the projecc.
B. The parties to chis contracc ....ill comply ....ich the provisions of said Section 3
and the regulacions iSBued pursuant thereco by che Secretary of Housing and
Urban Development set forth in 24 CFR, and all applicable rules and orders of
che Department issued thereunder prior to the execution at this cont ract. The
parties co this contract certify and agree chat 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 che said labor 0 rganization 0 f
....orkersf 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 vill include this Section 3 Clause in every subcontract for
....ork in connectiqn ~ith the project and vill, at the direction of the
applicant for or, recipient of Federal financial assistance, cake appropriate
actio'n pursuant to the subcontract upon a finding chat the subcontractor is
in violation of regulations issued by the Secretary 0 f Housing and Urban
Development, 24 CFR. The contractor ~ill not subcontract ....ith any subcontractor
uhere it has notice or knowledge 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 ....ieh the requirements of these regulations.
E. Complianc-e ..dth the pr'o'visions 0 f Section 3, the regulations set forch in 24 CFR,
and all applica~le rules and orders of the Department issued thereunder prio= to
the execution of the contract, shall be a condition of the Feder!l financial
assistance provided to the project, binding upon the applicant or recipient for
such assistance, its successors, and assigns. Failure to fulfill these
requirements shalf subject the applicant or recipient, its contractors and sub-
contractors, ics 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 CFR 135.
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APPENDIX F
NOTIC! 01 _'QUIRI:.'iEN'T fOR AI'fIR."~II:rIVE ACT!
TO ENSURE EQUAI. EMPLOYMENT OPPOR'I'UN1 IT
(EXECUTrYE ORDER 11246)
1. The Offeror's or Bidder's attention is called to the "!qual Opportunity
Clause" and the "s tanda.rd federal EquAl E:nployment Opportun.i ty Cons t.r\lC-
tion Concract Specifications" set forth herein.
2. The goals and timetables for minority and female participation, expressed
in percentage ter=s for the Contractor's aggregate workforce in each
trade on all const.."'"Uction work in the covered area, are as f0110\.'8:
A. Goals for Female Utilization, ~ll Trades:
AREA COvt:RED
Goals for Women apply nationwide.
GOALS AND 'TIMETABLES
Timetable
Goals
(percen t)
F:::-om Apr. 1, 1978 until Mar . 31, 1979. . . .
From Ap::. 1, 1979 un'dl Mar . 31, 1980....
From Apr. 1, 1980 until Ma:::-. 31, 1981. . . .
B. Goals for Minori tv Utilization:
3.1
5.1
6.9
TAMPA-ST. PETEP.s3tmG, FLA., AIU:A
Area covered: ?~llsborough, Pasco, and Pi~ellas
Counties, Fla.
Goals and Timetablesl
Trade
Goal
(percen t)
All. . . . . . . . . . . . . . . . . . . . . . . . . .
..
17.9-
IFor ~e life of the project.
These goals are applicable to all the Con:ractor's const.."'"Uctlon work
(whe~~er or noe it is Federal or federally assisted) performed in the
covered area.
The Contractor's co:pliance wi:b the EXec~~ve Order and ~~e regulations
in 41 ~R Part 60-4 shall be based on its i~?lementation of ~~e Equal
O?port~~ity Clause, specific affi:mative action obliqatior~ reauired by
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~"1e specifications let: fort.'1 in ~l erR 60-4.3 (a), al '";.S effort.s co l:'.eet
the goals est.ablished for the geographica.l a.rea '...he e :"'"le con t:act.
resulting from this solicit.acion is to be performed. The ho~s of ~~nority
and fe~1e emplo~nt and c:aining must be substant.ially ~,iform throughout
the length of the contract, and in each trade, and t."1e con~actor shall
CAke A good fait.., effort to employ ~~norities and women evenly on each of
i t.s pro j ect;.S . The transfer of lI\i.nori t:y or female employees or t:ainees
from Concractor to Contractor or from project to project for :"~e sole
purpose ~f meeting the Contractor's goals shall be a violation of the
cont:act, the Executive Order and the regulaeions in 41 CFR Part 60-4.
Compliance with t.~e goals will be measured against the tot.al work ho~s
performed.
3. The Contractor shall provide ...-:-i tten notification to the Direc't.or o~ t.~e
Office of Federal Contract Compliance Programs within 10 working days of
award of any cons~ction subcontract in excess of SlO,OOO 'at any tier
for const:.rUction work under the contract resulting frcmthis solicitat.ion.
The notification shall list :"~e name, address and telephone number of the
subcontractor; employer identification number; es~ted dollar amount of
the subcontract; estimated st.arting and completion cates of the subcontract1
and the geographical area in ~hich the contrac~ is to be perfo~ed.
4. As used in this Notice, and in t.p]e contract resulting from this solicitation,.
the "covered area" is Pinellas Coun~, ?lorida.
60-4.3 (a)
EQUAL OPPORTUNITY CLAUSE
During the performance ot this contract, the contractor agrees as follows:
1. The contractor will no~ discriminate against. any employee or applicant
for employment because of race, color, religion, sex, or national origin.
Tne contractor will take affirmat~ve a~ti~n to ensure ~~at applicants are
employed, and that employees a:e treated during emplo:~en~ ~i~'out regard
to their race, color, religion, sex, or national origin. Such action shall
include, but not be limited to the following: ~ployment, upgrading,
demotion, or transfer; recruitment or recrui~~ent advertising; layoff or
terminati~n, rates of payor other fo=ms of compensation; and selection
for training, inclUding apprenticeship. The cont:ac~or agrees to po~t
in conspicuous places, available' to employees and applicantS for employ-
ment, notices to be provided setting forth ~e provisions of this non-
discrimination clause.
2. The cont:.ractor, .....ill, in all solicitations or adve.rtiseJ:\ents for employees
placed by or on behalf of the contractor, state ~~at all quali/ied
applicants will receive considera~on for l!m?loyment without regard to '
race, color, religion, sex, or national origin.
3. The contractor will send to each labor union or representative of workers
with .....hich he has a collective bargaining agreement or other contract or
\.:ncierst:.a.ndinq, a notice to be provided advising the said l.:=.Oor union or
workers' representatives of the. contractor's co~~~~ts under this
section, and shall post copies of ~~e notice in conspicuous places avail-
ab~e to employees and applicants for employment.
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4.
\
The cont:act.or ""illJ_":~~l'li' ",'i':.h all provisions of EXI'- .ive Order 11246
of September 24, 195, a.nd of the nJ.1es, regulations and relevant orders
of the Secretary of Labor.
5. The contIactor will furnish all information a.nd reports re~red by
Executive Order 11246 of Septeuher 24, 1965, and by rules, regulations,
and orders of t.he Secretary of Labor, or pursuant t.;ere co, and ...,ill perm.i t
access to his books, records, and accoun ts by the ac.::.i.r:is tering agency
and t.he Secretary of Labor for purposes of investigation co ascert.z:.i.n
compliance with such rules, regulations, And orders.
6. In the event of the contractor's non-compliance wit.; the nondiscrimination
clauses of this contract or with any of the said rules, regulations, or
orders, this contract may be canceled, terminated, or suspended in whole
or in part and the contractor may be declared ineligible for further
Goverr~ent contracts or federally assisted constrUction contracts in
accordance with procedures authorized in Executive Order 11246 of
Septecber 24, 1965, or by rule, regulation, or order of the Secretary
of Labor, or as otherwise provided by law.
7. .."he cont=actor will include t.he portion of the sentence i...I=nedia tely
preceding paragraph (1) and the provisions of paragrap~~ (1) t.~~ough (7)
in every subcontract or purchase order unless exempted by rules, regula-
tions, or orders of the Secretary of Labor issued pursuant to section
204 of ~xecutive Order 11246 of September 24, 1965, so t.~at such provisions
will be binding upon each subcon tractor or vendor. The con t:=actor will
take such action with respect to any subcont:=act or purchase order as
~~e administering agency may direct as a means of enforcing such provisions,
incl udinq sanctions for non-compliance: Provided, however, That in t'1e
ev.en~ a contzactor becomes involved in, or is threatened with, litigation
.....ith a $ubcont.ractor or vendor as a resu.l t of such direction by the
administering agency, the contractor may request the Cnited States to enter
into such litisation to protect the interests of the united States.
SV..NDAPJ:l FEDE.1:\AL EQUAL E:/o1PLOYM-'l:'NT OPPORTUNITY CONSTRUCTION CONTRACT
SPECIFICATIONS (E)XCUTIVE ORDER 11246)
1. As used in these specifications:
a. "Covered area" means ::'"1e geog=aphical area descri:oed in t."1e solici ta-
tion fro~ which this contract resulted.
b. "Director" means Director, Ot"fice, of Federal Cont:=act Com?lia.~ce
Programs, Onited States Department of Labor, or any person to who~
the Director delegates authori~.
c. "~?loyer identification number" means the Federal Social Securi~
n~~er used on ~~e ~loyer's Quarterly Federal Tax Return, O. S.
Treasury Depar~ent Fo~ 941.
d. "l-'..i.nority" includes:
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"
(1 )
Black (all plrsons having origins in any of ~~ Slack
African racial groups not of Hispanic ariginJI;
(2 )
Hispanic (all persons of Hexic~, Puerto Rican, Ccb~,
Central or South American or other Spanish Culture or
origin, regarcless of race) I
(3) Asian and Pacific Islander (~ll persons having origins
in any of the original peoples of ~~e Far Eas~, Sou~east
Asia, the Indian Subcontinent, or the Pacific Islands); ~d
(4) American Indian or Alas~an Native (all persons having
origins in any of ~~e original peoples of Nor~ ~rica and
maintaining identifiable tribal affiliations ~~rough member-
ship and participation or communicy identification).
2. Whenever the Contrac'Cor, or any Subcont.:"ac'Cor at any tier, subcont.:'acts
a portion of the work involving any const.-uction trade, it shall
physically include in each subcontract in excess of SlD,DOO the provi-
s~ons of these specifications and the Notice which conuUns ~'1e ~p-
plicable goals for minority and female participation and which is set
forth in the solicitations from which this cont=ac'C resulted.
3. If the Contrac'Cor is participating (pursuant to 41 CFR 60~4.5) in a
Hometo~_Plan approved by ~~e O. S. Depar'Cment of Labor in the covered
area ei ther individually or through an association, i t.s affirma t.i veaction
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. Con~actors must be able to demonstrate their
participation in a.nd compliance with the provisions of any such Eometo~
Plan. Each Contractor 0:: Sul::>cont=actor pa::ticipating in an approved Plan
is individually required to comply wi t:h its obligations Uo"'lder 'the EEO
clause, and to make a good fai~~ effor~ to achieve each 90al uncer the
Plan in each trade in Io.'hich it has employees _ The ove::all good fai th
perfc~nce by o~~er Contractors or Subcon~actors ~oward a goal in an
approved Plan does no'C excuse any covered Contrac'Cor's or Subcon~ac~or"s
failure to take good fai~ efforts to achieve ~~e Plan goals and ~ime-
cable.
4. The Contrac'Cor shall implement the specific affirma~ve action standarcs
provided in paragraphs Ja through p of these specifica~ons. The goals'
set for'Chin the solici~tion from which this conc=act resulted are
expressed as perc"e..ntages of the total hours of employmen~ and ~aining
of minority and female -utilization the Con:ractor should reasonabC.y be
able to achieve in each const--",ction' trade i.n ....mich 'i ~ has employees in
~e covered area. The Con~actor is expected to make subs~tially
uniform progress toward its goals in each craft during the pe::iod
specified.
5. Neither the provisions of any collective bargaining agreement, nor tbe
failure by a. ~~ion with whom ~~e Cont:ac~or has a collective bargaining
agreement, to refer either mino::ities or wom~ shall excuse the Contrac-
tor's obligatior~ under these specifications, Executive Order 11246, or
the regulations promulgated purs~ant thereto.
F-4
.o~. ...... o~cc: ...== :";'Je ::C:.....'.:;=/~.:..;:; ':.:a.:..;~.:...; :~O'~S ~- ~rr-''';;'''---'-J --..- ---- ,--
~ be cOu.'~ed in meet~ ',t.:le goals, such appren~ices :'!r'" t.=ainees mus~.
be employed by the C:=l ..ict.cr curing the t.=aining pe:-it. and the
Cont.rac~or must. have .ade a commit.:nent to employ the, al'prentices and
trainees at the completion of their training, subject to the availabil-
ity of employment opportunities. . Trainees ~Ugt be trained pursuant to
training programs approved by the U. S. Depar~ent of Labor.
7. ~e Contractor shall take specific affirmative actions to ensure equal
employment opportunity. ~e evaluation of the Contractor's compliance
....ith these si.,ecifications. shall be based upon its effort to achieve
max.iJnum resul ts from its actions. The Contractor shall document these
efforts fully, and shall implement affirmative action steps at least as
extensive as the follo....ing:
a. Ensure and maintain a ....orking environment free of harrassment,
intimidation, and coercion at all sites, and in all facilities at
....hi ch the Con tractor' 9 employees are ass igned to ....ork. The
Contractor, ....here possible, ....ill assign two or more.....omen to edch
constrUction project. The Contractor shall specifically ensure that
all foremen, superintendents, and other on-site supervisory personnel
are awa=e of and carry out the Contractor's obligat.ion to maintain
such a working environment; with specific att.ention to minority or
female individuals ....orking at such sit.es or in such facilities.
b. Establish and maintain a current list of minori ty and female
recrui t:men t sources, provide ....ri tten notifica tion to minori ty and
female recrui tJnent sources and to communi t:y organiza tions ....hen the
Contractor or its unions have employment. opportuni ties available,
and maintain a record of ~'e organizations' response~.
c~ Maintain a current file of the names, addresses and telephone
numbers of each minority and female off-the-street applicant and
minority or female referral from a union, a recrui~ent source or
community organization and of wha~ 'action was taken ....i~' respect
to each such individual. If such individual ....as sen t. to t..'1e union
hiring hall for referral and ....as not referred back to ~'1e Contractor
by ~'1e union or, if referred, not employed by the Contractor, ~'1is
shall be documented in the file ....ith the reason therefor, along ....ith
what.ever additional actions the Contractor may have taken.
d. Provide immediate ....ritten notification to the Director ....hen the
union or unions ....i~'1 ....hich the Contractor has a collective
bargaining ag~eement has not referred to the Contractor a minority
person or woman sent by the Contractor, or when the Contractor has
ot..'1cr infor.nation that the union referral process has impeded ..the
Contractor's efforts to meet its obligat.ions.
...
e. Develop on-the-jOb training opportunities and/or participate in
training programs for the area ~hich expressly include minorities
and ....omen, including upgrading programs and apprenticeship and
trainee prcgramsrelevant to the Contractor's empl9yment needs,
especially those programs funded or approved by the Depa:tment of
Labor. The Contractor sh~ll provide notice of these programs t.o
the sources compiled under 7b above.
f. Disseminate the Contractor's EEO policy by providing notice of the
policy to unions and tIaining programs and requesting t.~ei= coopera-
tion in assisting the Contract.or in ~eeting its EEO obligations; by
including it in any policy ~~nual and collective bargaining agreement; by
F-5
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I
publicizing it in the company ne....spaper, dr~ual report., etc.; by
specific review of the policy with a.ll management personnel and
-~th dll minorit.y and female employees a.t least. once a year; And
by posting the company tEO policy on bulletin boards accessible
to All ~ployees a.t each location where const-ruction ....ork is
performed.
g. Review, at least annually, the company's EEO poliC'}' and affirmative
action obligations under these specifications wi~~ all employees
having any responsibility for hiring, assignment, layoff, ter1:.1ina-
tion or o~~er employment decisions including specitic review of
these items wi~. onsite supervisory personnel such as Superintendents,
General Foremen, etc., prior 'to t.~e initiation of construction ....ork
at any job si~. A written record shall be made and maincained
ide~tifying the time and place of these meetings, persons attending,
subject n~tt.er discussed, and disposition of t.1e subject mat.ter.
h. Disseminate the Contractor's EEO policy externally by including
it in any ~dvertising in the news media, specifically including
minori~ and female news media, and providing ....ric~en notification
to and di.scussing the Contractor's ::EO policy ....ith other Contrac-
t,qrs and Subcontractors ....ith ....hom .the Contractor does or antici-
pat.es doing business.
1. Dire~ its recrui tJDent efforts, bo th oral and wri tten, to minori ~ ,
.female and community organizations, to schools wit.h m.i,nority and
.female stucients and to minority and feD"~le recruitl:lent and training
organizations serving the Cont=actor's rec=ui~ent area and employ-
ment neecis~ Not later than one month prior to t.~e date for the
acceptance of applications for apprenticeship or other training
by any rec=uitment source, the Cont=actor shall send ....ritten
notification to organizations such as the above describing t.~e
openings, screening procedures, and tes~ to be used in the selection
process.
j. Encourage present minority and female employees to recruit other
minori~ persons and women and, where reasonable, provide atter
school, summer and vacation em~lovment. to minority and f~~le you~
both on the site'and in other ~e~s of a Cont:ac~or's ~orkfo~ce.
,.
Ok. Validate all t.ests and otber selection ~equirements ....here there
is an obligation to do so ~~der.(l C:R Par~ 60-3.
1. Conduct, at least annually, an inventory and evaluation at least of
of all minority and female personnel for promotional opportunities
and encourage these employees to seek or to prepa~e for, ~~ough
appropriate t:aining, etc., such oppor~~ities
m. E~ure that seniority practices, job classifica~ions, work assign-
,ments and ot.~e.r personnel practices, do no~ have a discri.Jci.na tory
effect by continually monitoring all personnel and employmen~
:=ela ted acti vi ti es to ensure tha t the =::::0 policy and the Con tractor 's
F-6
obliga~ions undel these specifications are being }_.;ied ou~.
n. Ensure that all facilities and company activities are non-
segrated except that separate or single-user toilet and
necessary changing facilities shall be provided to assure
privacy between the sexes.
o. Document and caintain a record of all solicitations of offers
for subcontracts from minority and female cons~-uction
contractors and suppliers, including circulation of solicitations
to minori ty and female contract:Or associations a.nd other business
associa tions .
p. Conduct a review, at least annually, of all supervisors' adherence
to and performance under the Contractor's EEO policies and
affirmat.ive act.ion obligations.
8. Contractors are encouraged to participate in voluntary associations
~hich assist. in fulfilling one or more of their affirmat.ive action
obligat.ions (7a through p). The efforts of a contractor association,
'joint. con t:actcr-union, cont.ractor-communi ty, or other similar g-=oup
of ....hich the contractor is a member and pa...:i:'ticipant, ~y be asserted
as fulfilling anyone or more of its obligations under 7a through p
of these Specificat.ions provided that. the cont:actor actively partic-
ipates }n the group, makes every effort to assure that the group has
a positive impact on the employment of minorities and ....ocen in the
indust.-]', ensures that the concrete benefi t:S of the program are
reflect.ed in the Contractor's minority and female workforce partic-
ipa tion, makes a good fai th effort to meet its individual goals and
timetables, and can provide access t.o documentation which demonstrates
the effectiveness of actions taken on behalf of the Contractor. The
obligation to comply, however, i~ the Contractor's and failure of such
a group to fulfill an obligation shall not be a defense for the
Con~actor's noncompliance.
9. A single goal for ~~norities and a separate single goal for women have
been es'tablished. The Con t:actor, however, is required to p=ovide
equal employment oppor~unity and to cake a:firmat.ive ac~on for all
minority gT'oups, both male and fer.3.1e, and all ....omen, bom cinori'=)'
and non-minority. Consequently, ~~e Cont=actor may be in violation
of the !.xecutive Order if a particular group is employed in a substan-
tially disparate manner (for example, even though the Contractor has
achieved its goals for women generally, the Contrac~or may be in
violation of the Executive Order if a specific minority group 0; ....omen
is underutilized).
10_ The Contrac'Cor shall not use the goa.ls and ti.meta.bles or affirmative
action s'Candards to discriminate against any person because of race,
color, religion, sex, or national origin.
11. The Cont:actor shall not enter into any Subcontract ~i~~ any person
or fir.:tl debarred from Government con tracts pursuant to Executive
Ord~r 11246.
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12.
The Cont.:'ac~or Shf.... carry out such sanctions and I .1 ties for '
violation of these specificatior~ and of the Equal Opportunity Clause,
-including suspension, termination and ~ancellation of existing sub-
COntIaccs as cay be i~posed or ordered pursuant to Executive Order
11246, as ~ended, and its i~plement.ing regulations, by ~~e Office
of Federal Contract Compliance Programs. Any Contractor who fails
to carry out such sanctions and penalties shall be in violation 0:
these specifications and Executive Order 11246, as amended.
13.
The Contractor, in fulfilling i t.s obliga tions under t..~ese specifica tions ,
shall implement specific affirmative action steps, at least. as exten-
sive as those standards prescribed in paragraph I of ~~ese specifica-
tions, so as to achieve maximum results from i.ts efforts to ensure
equal emplo~'1I1ent opportuni t:y. If the Contractor fails too comply ....i th
the requirements of the Executive Order, the implementing regulations,
or these specifications, the Director shall proceed in accordance ....it..~
~l CFR 60-4.8. '
14..
The Contract.or shall designate a responsible official to oonitor all
employment related activity to ensu:e that the company UO 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~~ction trade, union affiliation if any, employee
identification number when assigned, social security number, race,
sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer),
cates of changes in status, hours ~orked per week in the indica~ed
trade, rate of pay, and locations at. which the ~ork ~as performed.
Records shall be maintained in an easily ~~derst.andable and ret.=ievable
fo~; however, to the degree that' e~isting reccrds satisfy this
requirement, contrac~ors shall not be required to ~ain~ain separat.e
records.
15.
Nothing herein provided shall be const::\led as a limitation upon the
application of other la~s ~hich establish different s~andardsof
compliance or upon the application of requirements for ~~e hiring of
local or other area residents (e.g., those under ~~e PUblic Works
Employment. Act of 1977 and 'the Comm~,ity Development. 3lock Grant
Program) .
..
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...
I
I
APPENDIX G
OM!
Circ:ular A-1IO
..
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.1
Office of Management and Budget Circular A-110 (7/30/76)
OFFICE OF MANAGEMENT AND
BUDGET
(Circular No. A-II0!
GRANTS AND AGREEMENTS WITH INSTI.
TUTIONS OF HIGHER EDUCATION,
HOSPITALS, AND OTHER NONPROFIT
ORGANIZATIONS
Uniform Administrative Requirements
JULY I, 1976.
To the hea.c\s of executive departments
and establishments.
Subject: Uniform administrative re.
Quirements tor grants and oLher agree.
ments with InstlLulions of hizher edu-
ca.tion. hospitals. a.nd ot.her nonprofit
organlza.tlons
1. Purposc.-This Circular, promul.
gates sta.ndards tor obtaining consisten.
cy and unJformity among Federal agen.
cies In the administration of grants to.
and other &greements with. pUblic and
private Inst1tutions of higher educatIon.
publlc and private hospitals. and other
quasi~publlc and private nonprofit or-
ganiza.t1ons. This Circular does not apply
to grants. contracts, or other agreements
. between the Federal Government and
units of State or local governments
covered by Federal Management elr-
cular74-7.
2. Effective date.-The standards in
the attachments to this Circular will 'be
a.ppl1ed a.s soon a.s practicable but not
later than January I, 1977.
3. Supersession.-This Circular res-
cinds and .replaces parts m and IV of
the Appendix to Federal Management
Clrcula.r 73-7. Ac1mln1stration of college
and university research grants.
4. Policy intcnt.-The uniform stand.
ards and requirements included in' the
attachments to this Circular replace the
va.ning and often contl.ictlng require.
ments t.ha.t have been impOSed by Fed.
eral agencies a.s conditions of grants and
other agreements with recipien~.
5. A1'1'licabilitv and Sco1'c.-Except a.s
proVided below, the stand.s.rds promul-
gated by this Circular a.re applicable to
all FederaJ agencies. If any statue ex-
pressly prescribes policies or specific re-
quirements that differ from the stand-
ards provided herein, the prOvisions of
the sta.tute shall govern.
The provisiOns of the attachments of
this Circular shall be applied to subre-
c1plents penormin~Substantive work
under grants that a.re passed through or
awarded b~' the pnma.ry recipient if such
subreclplents are organizations de.
scribed In paragraph 1-
6. Definitions.
&.. The tenn "grant'. means mone~' or
property provided in lieu of money paid
0:' furnished by the Federal Government
to recipients under programs that pro-
vide tina.nclal a.ssistance or that provide
support or stimulation to' accomplish a
public purpose. The term "other agree-
ments.. does not include contraets which
a.re required to be entered Into and ad-
ministered under procurement laws and
regulat1ons. Grants and other agree-
ments exclude Ca.) t.echnlcal a.ssista.nce
~;o.~~~,s. "':h!ch prOvide services instead
general revenue sharing. 10:l.ns, 10Ul
gUA.rantees. nr insurance. and Ccl direct
payments of any kind to Individua.ls.
b. The term "recipient" includes the
following types of nonprofit organiZII.-
tions that are receivinG Federal funds
trom a Federal a~ency or through R
state or local government:
Public and private Institutions ot high-
er education: pUblic and private hos-
pil.nls: and other Quasi-public and pri.
val.c nonprofit organizations such as (but
not limited tol commlUlit~. lI.ction a.gen-
cles. resen.rch Institutes. educational as-
sociations. and healUl centers.
The t.erm does not include foreign or
Int.ernatlona.1 organizations (such as
agencies of the United Nations I and
GovernmenL-owned contra.ctor operated
Ca.cilities or research centers providing
continued support for mission-oriented,
large scale programs tha.t are Govern-
ment-owned or controlled. or are de-,
signed as Cederally-funded research and
development centers.
7. Requ.csts lor C%Cc~tion.t.-The omce
oC Management and Budget ma.y sra.nt
exceptions from the requirement.s of this
Circular ",'hen exceptions are not pro-
hibited under existing laws.
However, In the Interest of maxlmwn
uniformity, exceptions from the re-
quirements of the CIrcular 'l'!'W be per-
mitted only In unusual Cl\Ses. Agencies
may apply more restrictive requirements
to a class of recipients when approved by
the Office of Mana.gement and Budget.
8. Attach.ments.-The standards pro-
mulga.ted b~' this Circular a.re set forth
in the Attachments. which are:
Attachment A Cash"'depoalt,orles.
Attachment B Bonding and Insurance.
AUachment C Retention and cual.o<llal re-
quirements tor recorda.
Att.&chmcru. 0 PTCl{!T&m Income.
Attachment E: Con shATlng and m..tcblng.
Att.ac:hment"F Standarda tor financial man-
Ggement systems.
Att.&chmeM G Financial reporting requIre-
ments.
Attachment H Monlt.orlng and reporting
progr"m pertorm&nce.
AttaCnment I Payment requirements.
Attachment J ReviSion ot ftn..nclal plans.
Att.a.chmen.~ K Closeout proceaures.
Attachment L S,uspenslon and termination
procedures.
Attachment]l( Star,danl. form for applYing
for federal asslsl:&nce.
Att.acnment N ProPert1 manasement stand-
arda.
Att.acnment 0 PrOCurement at.&ndards.
9. E%c~tions /t:1f' certain reci~icnis.-
NotWithstanding the provisions of para-
graph , if an applicant/recipient has a
history of poor performance. is not 1'1.-
nanE:iall)' stable, or Its management sys-
tem does not meet the standards pre-
scribed in the Circular, Federal agencies
may Impose additional reqUirements a.s
needed provided that such applicant/
recipient is notified in Wl"it.lng a.s to:
a. Why the additional standards are
being Imposed;
b. what correctlve actIon is needed.
Copies of such notificat1ons shall be
sent to the Onice of Management. and
Budget a.nd other agencies func:ling that
reCipient at LloJe same time Lhe reCipient
,~ - - I; ~ _..:
A-110:1
10. Rcsponsibilities.-Agencies respon-
sible for administ.ering programs Ulat. in-
\'oh'e srants anct oLher agreements with
recipients shall issue Lhe appropriale
regulations necessary to implement. the
provisions of lhis Circular. All portions
of such regulations tha.t involve record-
k.eeping :md/or reporting requirements
subject to the proviSions of the Federal
Reports Act and OMB Circular A-40
must. be submltled to OMD ror clearance
before being inlroduced into use. Upon
request all regulations and instruclion:;
implemcnLing this Circular shall be
furnished to tile Office of Ma.nagement
and Budgel. Agencies shall also deslg-
nale an official to scrve as the agency
representative on maLters relating to lhe
!mplementa.tion of Lhis Circular. TIle
name and title of such representative
shall be furni.c;hcd to the Office of Man-
:l.gemcnt nnd Budget not later than Au-
sust 30. 1976.
11. /nquiries.-FurUler information
concerning this Circular mn~' be obtained
b~' contracting the Fina.ncia.l Ma.nace-
ment Bra.nch. Budget Review Division.
Office oC Management and Budget.
Washington, D.C. 20503. telephone 395-
3993.
J .un;s T. LYl'Uf.
Director.
ATTACHMI:HT A.-Cmct11.An No. A-IIO
CASU DEJ'OSlTOIUU
1. This attachment sets lorth standarda
governinG the use of banks and other In-
stitutions .... deposltorlca of lund.c; ..dval1Ced
under grll.nts and other Agreemenu.
2. Except lor sItuations described In parA-
graphs 3. .. and 5. no "Federal ~ponsorlng
agency shall:
a. Require pbyslcal seGrcgatlon or CASh de-
positories lor tunda which are prOVided to 8
reclpleDlt.
ll. Establish 8n)" eligIbility requlr,ements
lor casb deposltorleS lor tunds ,,'hlch are pro-
vided to a I"'Cclplent. ..
3. l!. sepan.l.\! bank a"count shall be reqUire
when applicable letter-of -cre<1l t agree men ts
provide tnat dr.wdo..'n., ....Ill be mede ....hen
the ~lplent'8 checks lU'e presented to the
b&nk lor p..yment.
.. Any moneys ad"Al1ced to a recIpient
,,'hlch are sub)e::'t to tht contr~1.., or r~gula-
'.Ion of the United Sl.at.es or ..ny of Its orncers.
rgents or emplOl'ecs' (publiC moneys a::a de.
~ned In Treasury Clrcula.r No. 1:76, as
amended) must be deposited In a ban'k with
Federal Oeposll. Insurance Corporation
(!"OIC) Insurance coverage and the hAlanCt
exceedIng tne rnlC cover.age must be col.
la.ter&lly secured.
5. Consistent with the national go..1 ot
expanding the opport\lnltles for minority
business enterpriSes. recipients ana l'\Ib-
reCIpients shall be encouraged .to use minor-
Ity banks (a bank whlcll Is owned a.t least SO
percent by mJnorlty rroup members).
ATTACHMI:NT B,-CmCtlI..AR No, A-II0
IONDING AND IHSU1l.ANCr
:. This attachment sets forth bonding Il.nd
Insurance requirements for Grants anel other
a!;Tccment6 901th reCipIents. No other bond-
Ing and Insurance requtremen.:,a I'hAlI be Im-
posed other than those normally required by
the reCipient.
2. Except as otherwIse required b}. I a...'. a
grant or other agreement that requires ,the
contracting (or subcontr..cung) lor con-
~lruC'tlon or laclllt~. lmpro"emenls 5h"ll pro-
,__ .~_ ._~,_ 6_' '_ 1,."",_, I'" """" _".
I
Office of Management and Budget Circular A-110 (7/30/76)
qutrement& relatIng to bId Ir\luanteell, per-
torDl&Dce bonda, e.nd payment bonda ,unl_
the conatructlon contract or subeonl.ract ex-
ceeda 1100,000, ror those ooMracta or aub-
contl"&Cta exceedIng 1100,000, tbe Federal
agency may accept the bondU1g policy and
requlrementa ot tbe vantee provIded. Lbe
)oeder&! agency haa made- a determlnatlOn
Ulat Lbe OoverlUnent'a Interest.. adequatelr
procec:ted.. It such .. determInation b.. not
been made, tbe minimum requlrementa .hall
be .. tallow.:
a. " In4 r1U4T4ntee Irom etU:h bld4.er equiv-
alent to flue pcrcent 01 the b~ prlCe,-
The "blc1 guaratlltee" shall cons..t ot a Arm
comm1tment auch u " bid bond, certUled
ebeck. or other negottable Instrument ac-
companying a bid... aaaurance tbat tbe bId-
der will. upon acceptAnce 0' hla bid, execute
suCh contractUAl documen ta ... may be re-
quired wIthIn the time apecLAed.
b. A pcrlcrmc1U:e bcmd on the part 01 the
COfttrGl:tC1l" lor 1 00 percent 01 the contrGl:t
F~e.-A "performance );)ond.' Is one executed
In connection wltb a contract to secure lul-
lUl_nt ot all the contractor', obligation.
Wlder sucb contract.
c. A. JHlvment b0n4 on th.e par' 01 the con_
trlJCtcr lor JOO percent 01 'he contrGl:t
pt'1.ce.-A "payment bond" I. one executed lu
connection with a contract to ..lure pay_
ment ..required by law ot all peraone IUp-
plymg labor and materIal In the e:ucutlon ot
the work proylded tor IJ:I the contract.
3. Wbere tbe l"ec1eral Government. guaran-
tns' or lDeuru tnl. repaymeut at money
borrowed by the recipient. the l"eOel"&l
..ency. at. Ita dlac:J'etlon, may requlMl ade.
quate bonding e.nd lDeuraoee 11 the Oond1l1g
ami luuraDce requlnmenl.4 or the recipient
an DOt deemed 84equate to protect the IJ)-
terellt ot the !"edeBI Govert:tment.
4. ne l"ecl.eral .pou.aorlng ageDcy may re.
qUIre ~equate .odellty boDd coyerage wbere
the recipient bu 110 co"orago &D4 tbe boDd ..
Deeded Ita protect the Oovernment's InterelSt..
4. Where bondaa.re ~u1red In tbe sltu.-
tlOM c1eec:rt0e4 above, tbe bonda shall be ob-
tained rrom comp&l1les balding eertU1cates at
authority aa acceptable luretles (31 Cl"B
223).
Al'TACHKXJC'T C.--Cacv1.A& No. A-110
&ETZHTrOJr A~ C't711TOOaL &EQ~KXJfT8 roa
&zeO&Zl1
1. 'I'hla at.ta.cbment eee. tortb recorc1 reten-
tion reqUirementa ror gr&l1ta and oUler ~ee-
JJleJ:ll.s "'ith reclplen l.4. Fec1eral apoJ)SOrlnS
....nciee sbaJI not Impose an,. recoM1 retcD-
tJoJl reqUil"emoDtlI upon rec1plonta otl:ler tI:lan
~ descz1bed bolo....
2. ZJ:celtl tor paragrapb 1., Ul.. att6cbment.
aI,Io appllelS t.o subreclplents .. reternd to
III pa.ragnpb Ii oC tl:le baalC CU'l:ula.r.
3. P'l.ne.nCIa1 recorda,supportlng c10cumenta
atat"tleal recorda, and &.II other rec:on1a portl~
neD1- to an "gTeemeDt sb&.ll be retained tor a
perIOd at thr" ,e&:ll, wIth Ule rol1oW\~
quall~catloM :
... If lIoDy 11 tlgatlon. ClAim or audIt Ie .t&rl.ed
berore the o"1)lI'&tlon ot the 3-,.ear ):>erlod the
ncorcl.Il &haU be ret..U1ed uDtll all l1tlgationa
elalZtl.a, or audit .onC1.lnp IJ:IvolrlJ:lg tbe.recor~
hau bee: ~1"e4.
b. RecoM1S. tor nOD expendable property &c-
~ulred, Wltb. 1"ederal tunda &hall be retained
01' S yea.n &ftu Il.a .onal c1"POSltloD
e. WbeD rN'4rc1s Lte tnL.natelTed ~ or malft
talDed by tb "'ed --
3 e. eral SJ)oneon.D& ageDcy the
b?'evto .~teDtlon requtrezneDt ~ Dot appilca.
e ...e recipient.
4. Tbe retentlOD ):>erice sl&:'t4 frolD Lbe
~te ot tbe submJaslon of the tlnaJ UJleDd.l-
~u:: r~rt or, for ~l.4 e.nd other ~_
CIa:.. tlI o~a:... Ue ~ae_ed annually, train tb.
'" _.e Aubmlsalon ot Ule LI1Dual
.l!1+:lClal .t.&CWl re'pOrt, '
-
6. ReCIpIent orBanlzatlon.s shoulc1 be au-
thorIZed by lhe l"ederal lIpon50rlng ..gency,
It they &0 Clcaln, to substltute m.lcrolllm
ooples In lieu o( orll'lnal records.
ll. The l"eOeral spon.sorLUg &fency &ball re-
quest traurer or certain recordl to Its cue-
tocly rrom recIpient organlzatloM wben It
detennln.. tl:lat lobe recorda pose_ long-
term reteDtlon "alue. Hewever, In order to
avol4 duplicate record-keepmg. s Pederal
Ilponeormg agency may malte arrangementa
Wltb recelplent organlz.atlou to re\.aJtl any
recorda !.bat are COD t1nuoualy needed for
Joint \!ae.
7. The head 0' the P'ederal sponsoring acen-
C)' and the Comptroller Oeneral at Ule Unlt.el1
S\.ates, or any of their duly auLbonzed repre-
.eDtAtlv... sl1all have acCIllIa to any pertinent
boob, documen\a. paperl. e.nd recorda or the
reCipient orgaZUzatJon '&nd their lubre-
clplenl.4 to malee AUditS, uaa:uDAtlon&, u-
cerpta lUId tr&ascrlptl,
8. Onleae other.....e required by law, no
Federal sponaorlng agency ...'1&.11 place re.
5trlctloO& on recipIent org&nJzatlone tl1at wl/l
limit pUblic a.cceae to ,!.be reooorclaof recipient
orgAD1z&tlonli that are pertinent to a gT'e.nt
or ~e.ment. uceJn wben the ageDer ean
4emoutr&te tIlat such records IDlUt DC kept
colU1ele:tla1 e.nd would have been uceptec1
tram dlaclosure punuant to.the J"reedom ot
Intormatloa. Act (Ii O.s.C. 51i2) It tbe recorcla
had Delonged to the l"ederal sponsorlng
agency.
A'n'ACHIlaI'l'T O.--CDlCVIoAa No. A-110
...oc:aAK II'I'COK:&
1. l"edel"&l spoJ)SOr1ng apnd.. &haJl apply
the standarcla act fortJ1 ID ~.. attaobment In
reqUIring reclpleDt orga.nlzatlOna to a.ccount
for JlrogT'&m Inoome related to proJeeta
llD&QCec1 1: wbole .OT IJ) put Wlt.tJ l"eeleral
fWJda. PTogn.m IDcome repT_n~ f1'OIIB Ia..
come earned by tbe recipient from the fed-
er&1ly lupported ac:t1vltlelS, Such e&l"Z1U1p u-
CIUc1e Int.erest earlled on adV&DCllS e.n4 may
laelude, but ...UI Qot be Ilm1ted to, lacome
troal aeMllee fees, sale of commo<1ltl.., ~e
or reDtaJ. t_, IUId royalties OD paten.\a &ad
COprlgbte.
2. Intereet earned on 84ye.n_ or !'"ederal
tunda &hall be "IZI1ttecl to tbe l"eder&l agency
ezeept tor Interest e&nIec1 011 adftDce& 'to
Stat-. or In.etrumaAt.alltlee oC .. State all pro-
Vided by the Izn.erl'onn2melltol Ccope!'a.tloA
~t or 1958 (Public z..e.w 90--677).
3. Pr'oceeda from tbe S&le of r-s e.nd per-
eooal property eIther provided by ,the 1"ec:I-
eraJ OoYernmeDt or PurCh..ed ID ...bole or 10
pa.rt wttb Federal fUnda. abaJl be be.neSled ID
&ccon1e.nce WIth Att.&cbmeDt N to tb.. clz-
culv pert&UllDg to property tDaAaCemeZlt.
ol. 01:1.1_ the arr_ent proYlO.. oUtef'-
.....e. rlildplenta llbau bave DO OblICatlOD t.o
the l'edvaJ Oo9V'1UDent WIth r..peet t.o
royaJtI.. TtlCeI'ed .. a reIIult at OOp1Tlgb\a or
):>a~ta ptl:lc1uced UDder the lTe.nt or Other
agreeIQeDt (ue P&l'af:rapb a, Att.&cblDeZlt NI.
Ii. All other program i!1oome -.med clUM.D&
the project pence abaU be re~e4 by the
recipIent. e.nc1, ID &cconJa:\ce WIth the lrt'nt
or Other "IT"lDea.t. shaU be:
B.' Added to funda COIZl.ln.lt.ted to the ):>roJ-
ect by the Pedera1 spon&Or1ng agency e.nd
recipIent oTi'anlz.atJoa &lid be uaec1 'to furtber
eligible program obJectives'
b, Used to .onanee the ~OD-Fec1e""l Ahare
ot U)e project When a):>pro"ed by tbe J"edera1
SPOJ)SOrlAi agency: or
c. Deducted lrom the total PI"OJeet coste
1:1 detcl'tll1Ull:1g the net COlll.4 on walch the
2"ederaJ &h&l'e at COIlts wUI be baaed.
Al'TACalCDrT %.--CDtCVt.Aa No. A-J 10
COll'r IIl1.A&.Dfc ""D WATCHDoO
1. Tb.. att.&cbmeDt ....ta lorth crlter1a acd
P~ur""l for the aIlO,",bUlt... o! C"AI.h ..,,<1
I
A.110:2
In.klnd conlrlbutlone made by reclplent.s or
subreclplents (u reterred 1.0 In pLl'agraph 5
0' llle b&6le etrcular) , or tblrd parties In ,...1.
IsfYlng COlIt aharlng U1d matching requlze.
meots 01 Peden.1 'poa.&ort..ng agenclea. Thll
.tlAChmeDt also ..tabllah.. crIteria lor the
.valuatlon at In-kind oontrlbutlou made by
Ullrc1 parties. and supplemenu !.be gUIdance
set (orth In Federal J\4anagement CIrcular
73-3 wlllh r..pect to cost Ibarlng on leder-
ally-sponsored reseucn.
2. The rollowlng c1etlnltloas applr (or the
purpose of tb~ attaChment:
&. PrOject C03la,-P7'oJect ooal.4 are all al-
lowable eOlll.4 I u set lortb In the applicable
Federal COllt ):>rlnClplel) Incurred by a reelpl.
ent and the value ot the In-lUnd COntrlllu-
lloos made by !.he recipient or thtrd putles
In sccompl"lllng the obJectlv.. ot Ibe grant
or other agreement during tbe prOject or pro-
g",m period;
b. C03t ,lL4ring an4 l'rI4tcIHng._In general.
cost shulng and maLChlng represenl that
portion or project or pTOlf",m costa not borne
by tne P'ederal Oovernmenl.
c. Cuh. contrtbuU01LI.--Cub contnbutl.oM
iepreHnt the recIpIent'. cuh outlay, IJ)clud-
Ing the outlay or money contrIbuted to the
reClpleDt by non-Peelera' t.blreS partl...
d. In-/dn4 contributw..:,.-lJ:I_ltIDd contrl.
butloM represent tbe value or 110a.caa.h oon-
trlbutlone provided by U)e recipIent a.nc1
non-l"eOeral thln1 p&rtl... Ol11y ""hen au-
lIborlzec1 by J"ecl.en.1 leg..latlOD, may property
purchuec1 ...Ith l"ederal tunc1.s be conaldcre4
AI the reclplult'. in-li:1nc1 contrlbutlona. In-
kUld contT2butlou alAr be U1 the lorm at
c:I1argelS lor real property e.neS DOD-upand-
allle penoDAl property, ADel the v~ue 01
gooda ancl IlerTlcca eSlzectlr bene.otlJ:lg aDd
lpecLACally lc1entiAable to tl:le proJe.;t. or
PT'OlTam.
3. Geaeral gulclellD" tor OOalputlng ClOSt
&baring or matchla.g are u loUowz:
a. Coet abarlJ:l.g or m.at.c.l:Uag mar cona~t,
ot: .
(1) Chal'1t_ IJ)cun"ed by tbe recipient aa
project COlI'ta. (Not au ChILT'g" nlQU1re c:aab
OUllaya by the reclpleDt dW"1tlg tlbe project
perIod; uAmpl.. &re depl'eClat.lol1 e.nc1 use
cbargee ror bUUd11:l9 e.ncl eqwpment.)
(2) P'r'o Ject COIlta .o%l&Dcec1 111 th c:aab 0012-
tl'lbutec1 or OonatAld to the reclple!1t. br other
DOD-!"edel"al pubUc agenclea e.nd In.etlt'u tlOIU.
aad pr19ate orpnlzatlona e.ncl IJ)clIVIC1Uala,
anc1
(31 ProoJeet costa repreaented by 1le"lceo
and real U1c1 pel'llOnal property, or u.. tbere-
at, CloDatec1 by other Don-Pede",,1 public
&<<enelea &I1d In.etltutlou. &Ad pTwate oT'g'a-
Du:&tJona e.nd InC1.ll14 uala. ,
b. All OODt.r1butlonA, botb caa.h U1d il1-
kIne!., ab.all be _pted aa part or Ille reclpl-
ent's COIlt sbU1Jlg and ma:tcblllg whe: 6UCb
CGntT2butlone meet all at th'e tolloWUlg
erUerla :
(l) Are verUlable trom the nldplent'.
recorda: '
(2) Are Dot Included aa contrlbuUou tor
&Dr otl:ler redera1ly-.......tAld program;
(3) Are neetlD&ry ~nd reaaoDable tor prop_
er .Dd emeleZlt accompUabment of ):>t'OJec:t
obJectI988:
(4) Are tTJ)ell ot cl:lUgft tbat would be al-
lowable under the appUcallle COllt PMDClpl...
(6) Are not paid by tbe 1"edcnl Oo"en:I:
ment unc1er another aaalrtance agreement
(unl..5 tbe &<<Teement .. aU'tborlzed by !"ed-
eral Ia "" to be Ueec1 tor cost ab.a.rU1g or match-
11Ig) ;
(e) Are provlc1ed tor 111 the approved bUc1g.
et ""ben requtre4 by Ille ~eral agene,.: e.nc1
(71 ConJorm to other prov~lolU at tbla
attachment.
t. V.lu... tor l"eC:lpl~t In-kl!1d OOl1tr1bu-
tlona -UI be elStabllsl:led. ID &ccord&ace W11ll
tbe applicable c:oet r>r1nClpl.... ,
~. S~LAc PJ'0Ce4uree ror the l"eC:lpl..ata In
~t.n.~lt..!"ll~~ th~ ~r.J,,'!'" n1' In-t"1T'\t1 .....,...~t.~1Ml'...
,)
Office of Management and Budget Circular A.110 (7/30/76)
lions from non-Federal thIrd partll's arc ~et
rorth below:
a. Vallialion01 "olllnlcrr .~('rl'ices,-\'olun.
teer servlr:es mny be furnl~hed by professional
nnd technlcnl personnel. consultants. and
other skilled nnd unskilled labor, Volllnll:l'r
ser\'lces mRY be counted nil cost ~hnrlllS or
mRLchlng If the ser\'lee Is nn' Illtr.grnl :l/ld
necessary pnrt of n.n n ppro\'ed IJro!:ram.
(t) nalr" lor 1>O/U1ltrl'r servicc..,-Ratcs for
volunter.n shollld I>e cOllslslent ,.'Ith I.ho~e
pnld for slmlln.r work In the rcclplent's
l'lrSlLnI7~'\L1on. In those Instances In ""hlch the
reqlllrl:d lIkllls are not found III the recipient
orgaIl17.nLlon. mtes ~hollld be cOllsIslenL \\'Ith
thallI" paid ror slmllllr ""ork In the Illbor mar-
ket III whlcl> the recipIent com"etcs ror the
kind or~ervlces Involved. .
(2) VO/II7ltccrs -:m71/PYCd. by oOlcr orgoni-
zatio,u.-When an employer other thnn the
reCIpient rurnlshe~ the serYlces of All em-
ployee. these services shnll ,\)e vnlued at the
employee's resulnr rllte of pn}' I exclllslve of
rrlnge benefits 7\nd overhen.d costs) provIded
these servIces nre In the same skill for which
the employee Is normally pnld.
b. VaLuation 01 donated, e:rpcndab/c pcr-
sonaL propcrly.-Donated, expendable per-
sonal property Includes such lI.ems as ex-
pendable eqUipment. office supplies. laborll-
tory. supplies or workshop and classroom
supplies. Value assessed to expendable per-
sonal property Included In the cost or match-
Ing' share should be rea.sonable Ilnd should
not exceed the market value oC the property
at the time oC the donation.
c. VaLuation. 01 don.ated, non.C%pcnd4b/e
perscma/ property, buildin.gs, end land or
U8e th.ereot.
(1) The method used tor charging cost
sharing or matChing tor donated nono-
pendable personal propert.y. bUlldlnss and
lana may aUrer according to the purpoae oC
the gran.t or ot.her I\greement as follows:
(al It the purpose of the l:rant or other
agreement ,Is to B5Slst the reCipient In the
acquisition of eqUIpment, bUildings or Innd,
the tota.l value of the donated propertr mal'
be claimed as cost sharing or matchIng.
(b) It the purpose ot the agreement Is to
support nctl\'ltles that require the use of
eoqulpment. bUildIngs or land, depreciation
or use Charges for equIpment nnd buildings
may be made. The Cull value oC equloment or
other capital assets BlId C7\lr rental charges
for land mn}' be allowed provided that the
F'ederal al:enc}' has n.pproved the charges.
(2) The vnl ue oC donated propert). will be
determined In accordance "'Ith the usual
aCCOunting policies of the recipient With the
tollowlng qualltlcatlon:s:
(a) Land an.d bui/dingS._The vGhle of
donated land and buildings mal' not. exceed
Its fGlr market value. at the \.Ime oC don7\\.Ion
to the recipient 7\S cslabllshetl b'l" an Inde-
pendent appraiser (e.g_ cer\.lfteci' real prop.
erty appraiser or GSA representatives) and
certified b)' a rll$ponslble official ot the
reCipIent.
(b) Ncmc:PCTId.al>/c personal 77f'O'pert)l.-
The value of donated nonexpenanble personnl
propcrty shall not. exceed the fair market
value of equipment and property of the same
age and condition at the tIme oC donation.
(C) Use 01 spacc,-The valtle of donated
space shllll not exceed the fair rent:\l \'alt:e
ot comparable space a.~ establl~hed br nn
Independent appraisal of companble space
Rnd facilities In a prh'ately-owned building
In the same 10Co'\lIt}<'
(d) Loaned equipmcnt,-nle \'allle or
loanea cqulpment shall not exceed Its fMr
ren\.ll.l value,
6. The fOllo,,'lngregulrcments pett..'\ln to
the recIpient's suppor\.lng records ror In-
kind contrlbllllons Iroln non-Fcd~ral third
fl!~t,l~!=: .
a, Volllnl~er s{,T\'It"r.s mllsl bl' <Incllm~llt~d
and. to the e~tent f~Mihle, lIupported by the
same methods \Ised bl" the recIpient lor H.s
cmployces.
b. The basts for determining the Yl\I\lnthm
ror personal sen'lces. malerlal. eqll\pment.
lJulldlngs Rnd Illnd must be doc\lment~d.
ATTACllMCNT P',-Clllcul.Aa No. A-IIO
STAHDARDS 1'on 1'INANCIAI, MANAGEMENT
SYSTEMS
1. nlls nttachment prescribes standards ror
finnllc:lnl management systems of recipients,
Federal lIponsorlnl; agellclC!< shall not Impose
addItional st.andartJs 011 reelpjel>t.~ Ilnlc"l> spc-
clficall)' provided ror In the applicable IIU1-
hltes (e.g.. the Joint Fundlnl; Slmpllflcntlon
^ct. P.L, 93-510) or other ntlDclllnenta to this
cIrculAr. Howe\'er. Federal sponsoring I\l:en-
cles are encouraged to ml\ke sug&:estlons Ilnd
R.'lSlst recipients In estballshlnS or Improving
nnanclal manr.gement systems whcn such aa.
slstanctl Is needed or requested.
2. l\eclplent.'1' nnnnclnl IJU10nagement srs-
terns shall prOVide tor:
7\. Accurate, current and complete dl&c:lo-
surlt of the financial results of eaCh federally
sponllorea project or pr~ram In accordance
wIth the reporting requlrcments set rorth In
Att..'\cl)ment G to this circular. When a Fed-
eral sponsoring ngency requires reportlns on
an A.ccrunl buls. the recipient shall not be
required to esta.bllsh an accrual accounUns
S\'stem but shall c1evelop such accrual datA
for Its reports on the basis oC an analysis of
the documentation on hand.
b. Records that Identify nc1equately the
source and 7\ppllcatlon oC funds for tederall}'
sponsored actJvlt.lcs. Th~ records shall con-
tain IntonnAtlon pertnlnlng to f'edera.J
awarcSs. authorIZatIons, obl/gatlons, unobJl-
gatecl balances, as:sets. outlays. and Income.
c. Errectl"e ~ontrol over and accountabIlity
tor all runds. property and other assets. Rc-
Clplents shall adequately saCe!;Uard all suc:Jl.'
nssets and shall assure that they are used
solely (or authorized purposes.
d. Comparison oC actual outlars wIth bud-
get amounts for each grant or other al:ree-
ment. Whenever appropriate or required by
tile Feaernl sponsoring agency, ftnanclal In-
formation shoula be related to performance
and unIt cost data.
e. Procedures to mlnlmlse tJ1e time elapsing
bcl."'een the transfer at tunds from the U.5.
Trel1$ury A.nd the dIsbursement by the recIp-
Ient, whenever funds are advnnced by the
l"edcruJ Government, When advances are
mnde by a lett.er.of-credlt methocl. the recIp-
Ient shall make draw downs a.'1 close ;u; pos-
sible to the time ot makIng disbursements.
f. Procedures tor determinIng the reason-
ablenen. aUowablllt). and allocabilIty ot costs
In accordance wtth the provlSlolU of the ap-
plluble Federal COllI. principles and the I.crms
at the granl. or other agreement.
g. ACl:Ountlng records that are supported
by source documentation.
h. Examinations In the form of audIts or
Internal audits. Such audits Shall be mGde
b~' qualified Individuals who are suffiClcntly
Independent at tJ10se WhO "uUl~rizc the ex-
penditure of Fedel':ll funds, to produce un-
biased opinIons. conclURlons or Judl:1'llents.
The)' shall meet the Independcnce criteria
Along the lines of Chapter 3. Part 3 of the
U.S. General Accounting ornce pUblication.
St.n.ndard'l for AudIt of Governmenl.:ll OrJ:nn-
Iz:\tions. Prol;rams. Actl\'ltlc.~ nnd Functions.
"lCS~ eXllminnt10ns are Intended to &.Scer-
lAin the elfectlyeness of the financial mnn-
:\l;emcnt s)'stems Rnd Internal procedures'
thAt !tnvc been est:\bll.'1!ted to meet the terms
and c('lndltlons or the ngreem~nL~, It Is nnt
Intended that cllch :agreement lI\\'nrded ~Cl the
reCipient be eXl\mlned. Generlllly. eXAmlnll-
tlons should be conducted on an orr,ant:>'.n-
~lnn-',\'~rt'"' ~n~!~ to 7~~~ th~ f!~(,,:'I.l Int"r'~l!.\' or
I
A.110:3
Onanrln.l t.rnnsl\ctlollS, M ....cll as cnmJ'lllance
with the tcrms and conditions of tlte F'edcnl
grant.~ And other a!:r~ements. Such te~l.S
\\'ould Inclllde lIn lIpproprlalO samplllll; or
Federal Rl!'reements. ExamllllotIClIl.~ \1,"11) be
conducted with reasonable rrequency, on n
conllnulng blL"ls or 7\t "...hedllled '/Iten'alS,
u"\lally Annllally, but not less rrequentl)' thRn
cver}' two ~'ears, The frequency of the!!e ex-
lLmlnnllollll shall dl'pcnd \11>on the nature.
~17.e and the complextty oC lhe act\'lIt).. n\e~e
examination!! do not relieve I"lxleral al;encles
of their l\udlt responsIbilities, bllt may A!Tect
the frequen~~' and scope oC such I\udlts.
L ^ s\'s~ematlc methOd to A!\Sure tlmel\" alld
approprIate resolutIon 01 RudlL Ilndln!;S nnd
recommendatlons.
3. Primary recipIents shnll requIre subre-
clplents (ILS c1efined In parl\srnph 5 or the
\)ftslc cIrcular) to ndopt the standards In
pnrllgrnph 2. above except ror the require-
ment In Subpnrl\gT7\ph 2e, rel:nrdlng the use'
Or the letter-or-credlt methocl and that part
or ,s.ubparnsrnph 211, regnrdlng reporting
forms nnd Ircquencles prescrIbed In Atll\ch-
men', G to this clrculllr.
ATTACHMENT G.-ClacuLAR No. ^-IIO
rtl'tAI'tCtAl. RJ:I'OIt~ RCQUIIU:~U:H'r'S
I. ThIs att.acllment prescrIbes uniform re-
portlns procedures for reCipients to: sum-
mllrlze expcndltures mad,e Ana Federlll funds
unexpcnded lor each Award, report the sll\tus
of F'ed era I CA.~b advanced. request ad,.,.nces
and rClmbursement when the letter-of-credIt
method Is not used: Ilnd promUlgates &tand-
I\.rt! rorms IncIdent thereto.
2. Therollowlng definitions 7\pply ror pur-
poses or thIS nttnchment:
11. Accrued c::pC7L41iLures.-Accrued e:a:-
pendltures are the charges Incurred by the
recipient during 11 l:IVCI1 perIod reqUl:'lng the
provision of funds lor: 0) gooc1s And other
IAnglble property recelve<1: (2) services per-
formed by employees, contractors, subreclpl-
ents. nnd otber l'6yees, and (3) other
amounts becoming owed unaer programs Cor
....hlCh no current &ervlces or perCormance IS
reqUired.
b. Accrued inco1!1e.-Accrued Income Is the
sum oC (1) enrnlngs durlnS a gt\"en period
trom (I) serYlces..performed by the recipi-
ent: and (II) Sooc1a 7\nCl other t&nglble
property dellvered to purcha.sers: ane (2)
amounts becoming owed to the reCipient tor
whlJ<.h no current services or performance ~
reqUired by the recipient.
c. Fed-cral lun4s authorized.-Feaeral
funds authorized ar, the IDtal amount of
Fec1eral tuncl.s obllg&l.ed b~' tbe Federa. Gov-
ernment for use by the recipient.' Th15
nmount ma}' Include any authorized carr,-
O\'cr o! unoblll;ated tunas Cram prior ftscal
)'enrs when permitted by law or &genc,
regulatlon.
d. /1l-lci1ld contributio7LS.-ln-klnd con-
tributIons &r~ deftned In Attachment E to
thl!: Circular.
e. Oo/igations.-ObUgatJons are the
amounts of orders placed. contr"cl.a and
grnnts R"":\I'ded, serVIces receIved. and simI-
lar tranSllctlons c1urlns a slven period thl\t
,,'JII requIre pnyment by the recipient durlns
the same or a luture period.
e. Out/4!1s,-Outln~'~ or expendItures repre-
sent eharges made to the ProjeCt or prOl;ram.
They ml\l' be reported on n cash or accrual
bnsls, For reports prepared on a cash bllSls.
olltla\"s arc the sum of nctu7\l Cl\Sh dlsburse-
mcnt.~ for direct charges ror l:oods and lIer,'-
Ices. the amollnt of IndIrect expense chl\rsed.
the \'~llle of In-kInd contributIonI' npplled.
:\nd thc amount or c,,-~h "c1\'anees 7\nd p7\Y-
ment.~ made to subrcclpients. For reporl.\l pre-
I'nrcd on nn 7\cerual bn~ls. oullays 7\re the
~Ilm or 7\ctUIlI cnsh dlllb\lr~ements for direct
(;h"r~e~ ror I!nod.~ :>nd ~er\'lcC:lI, the nmount
("If lnct!!"(""'i "Y!''''n~r tnr-urr"d. the \"n!uC' ('Ir In-
I
Office of Management and Budget Circular A-110 (7/30/76)
kind contributions Ilpplled. Ilnd the net In-
crease .lor c1ecreLSe) In the I\mounts owed by
the recipient for gooas Ilnd other property
reeelnd, lor servIces perlorm~ b)' emplo)'-
en, contraCl.Ors. subreclplenta Ilnd other
payees and other amounts becomIng owed
under progranu for whIch no current serv-
Ieee or performance are requIred,
g. Program income.-Program Income Is
deflDed In Attachment 0 or this circular. It
may tie reported on a cash or accrual ball la,
whichever U used ror reporting outta)'s.
h. Unobligaterf belancc.-The unobligated
balllnce Is the portion or the fun as author-
Ized by the Federl\l sponsoring agency thllt
haa not been obligated by the recipient and U
determIned by deducting the cumulative
obligations Irom tbe cumulative luncla au-
tborlzed,
I. Unliqulrfaterf ob1l9atton.!.-For reportll
prepared OD a cuh' buls, unliquIdated oblJ-
gallons represent the'amount or obllgatlona
IDcurrerf by the recIpient that haa not been
pkld. For reports prepared on an accrued ex-
penditure ballu.they represent the I\mount
or obllptlona Incurred by the recipient lor
whlcb an outll\Y hall not been recorded,
3, Only the rollowlng lornu will be au-
thorized lor obtaining !lnanclal Intormatlon
trom reel pienta.
a, F'1n4nC"ial Stat..., J/.eport (E:h.lblt 1). '
(I) Each l"ederal sponaorlng agency shall
require reelplents to use the standardized
Financial StAtuS Report to report the status
or tunds lor all nonconatructlon proJecta or
progranu, The Federal sponsoring agencies'
may, liowever. have the option 01 not re-
qUlnng the FInancial Status Report when
the Requ."t tor Advance or R.elmbW'Mment
(paragraph ..a) or Report 01 l"ederal Callb
Transactions (paragraph 3b) 11 determined
to provide adequate Intormatlon to meet
their needs, elCcept that a, /lnal FInancIal
StatUS Report sh&1I be required at the com~
pletlon, 01 the project when the Request tor
Advance or Reimbursement torm 11 W1eCl only
tor advancea.
(2) The Federal sponaorlng agency shall
prescribe whether the report shall be on a
Calll1 or accru':l i:le.sls. II the F~eral sponsor-
Ing agency requires accrual Intormatlon and
tbe reclplent's acCOUnting recortla are not
normally kept on the accrual bull, the rlt-
clplent shall not be requIred to conven lu
&ceountlng system. but shall de~elop such
accrual Information th'roUSh best estImates
based on an analysis or the cocumentatlon
on hand.
(3) The Federal sponsoring agency shall
determine the frequenc~ 01 the Fln&nclal
St.atus Report lor each '~roJl:Ct o~ program
conalderlng the size and complexlt). or the
partlcul&r project or prorram. Howe~er, the
report shall not be requlnd more Irequently
than quarterl)' or I.ess Irequentl)' than an-
nually except u provld~ln sUbp&ragraph
3a( I J abc"e. A nnal report shall be reqUIred
at the completion of the agreement.
(4/ Federal sponsorIng &gencles shall re-
quire reclplenta to submIt the Financial
Status Report (Original snd no more than
two cI)ples) no later thnn 30 dars I\!ler the
end 01 each specltled reporting perIod tor
qu&rterly and scml-..nnual reports. I\nd 90
cla)'S lor annual and nnal reporta. Extensions
to reporting due dates ma)' be granted upon
request of the recipient.
b. Rellort 01 Fedcrnl Co.&h. Tra"saclioru
(Ezh.lbil 2) .
( I ) When tunds are advanced to
recIpients through letters or credit or wIth
Trea.sury checks, the Federal sponsoring
&!Jencles shall require each recipient to "ub-
mlt a Report ot Pedcral Cash TranMClIons.
The Federlll sponsorlns I\gency shall u"e this
report to monitor cash advanced to reCIpients
I\nd to obtain dlsbursement'lnformatlon lor
ea.ch agreement lrom the recipients.
(2) Federal sponsoring agenCies may re-
quire forecasta 01 Federal cash requirements
In the "Remarks" "ectlon of the report.
(3) Wh:n prl\ctlc," and cleemed necessar)',
the Feller&1 sponsorIng sgencles may require
receipts to report In the "Rem&l'ks" ~ect\on
the I\mount at cash &dvancelI In excess of
three days' requirements In the hands 01 sub-
recipients and. to provide short Duratlve ex-
planations at actions t1Lken by the recipients
to reduce the excesl balances.
(4) Rcclplenl.s shall be required to submIt
not more than the orlgln&1 and two copIes 01
the Report 01 Federa.! Cuh TT&nsactlona 15
working cla)'s tollowlng the end at each
quuter, The Federal spon..orlng agencies
may require II monthly report trom thOse
reclplenta receiVIng l!.dvan.:es totalIng 11
n,lIl1on or more per ye&:.
(5) Federal sponsoring agencIes mar waive
the requirement tor submission or the Report
01 Federal Caah Tr&naact1oN when monthly
&dvances ~o not exceed SIO,OOO per recIpient,
provided tn..t such advances are monltoretl
through other torms contained In_-'hls l!.t-
ucbment, or sr. In the Fed.eral sponsoring
as'ency's opInIon, the reClplent's ~ceountlng
con trois ..re adequate to minimize excessl "e
Fetlerlll a.dvances.
4. Except &S noted below. only the lollow-
!ng lorms will be authorIzed tor the reclpl-
ent.J In requesting advances anll relmburlle-
menta.
a. J/.eque.st Jor Alivance or Reimbursement
(E%ltiblt J).
(1) Each l"eder&1 sponsoring agency shall
adopt the Request lor Advance or Relmbuf$e-
ment as a standa.rdlzed torm tor all noncon-
structlon progra1D3 when letters-at-credit or
predetermIned allvance methods are not used.
Federal spOnSOrln!; agenCies, however, have
the option or using this torm (or construc-
tion programs In lieu of the Outlay Report
and Re~uest lor Reimbursement lor Con-
struction Progral1Ul (subparacraph 4b).
(2) Recipients shall be ..uthorlzed to sub-
mIt requests (or advances and reimburse-
ments at lease monthly when lettera-oC-
credit are not us~. Peder..: sponsoring
~ll'encleS shall not require the submlalon ot
more than the orl~nal and two copies 01 the
RequllSt (or Advance or Reimbursement.
I
A.110:4
b, Ou.t/all report and request Jar relm-
buru"'ent lOT' construction programs (Ex-
hibit 4),
(I) Ench Federal :;ponllOrlns asency shl\lI
I\dopt the Outlay R~port snd Request for Re-
Imbursement for Construction I'ro!;nms u
the H:Lndardlzcd format to be \lsed tor re-
questing relmbunsement for construction
programs, The FederIU sponsorIng agencies
m..y. however. have the option at substltut-'
Ing the Request for Advance or Reimburse-
ment I"orm (subparagraph 4") when the
Feder:>l "!Jencles aetermlne that It prOvides
ntlequAte InformAtion to men theIr needs.
(2) Recipients shn.11 be ..uthorlzecl to sub-
mit requests :or reimbursement at leASt
monthl\' "'hen letters-aI-credit lIre not used.
Federl\l sponsorln!; agenCies shsll not reqUIre
more thl\n the original I\nd two copies 01 the
Outl..)' Report and Request lor Reimburse-
ment lor ConstructIon ?rOgTl\ou.
5. When the Federal sponsoring ~encles
need Bddltlonal Intormatlon In using these
lorms or more Irequent rc.por~, the follo....lng
shall be observed:
. a, When addltlon..1 Intormatlon Is needed
to comply ,,'Ith leglslALlve requIrements.
Pederal sponsoring BJ:encles shall Issue In-
structions to reqUIre recIpIents to submIt
such Information under the "Remarks" sec-
tion 01 the repor!..,.
b. When necesn.ry to' meet .peclnc pro-
sr.lrn neeas Federal sponsoring agencies shall
submit the proposed repor1.lng requlrementa
to Lhe FInanCial MAnngement Branch. BUdget
RevIew DivIsion, ornce 01 Management and
Bu~et tor approval prior to subml.sslon ot
the reports tor clearance under the pro.
visions 01 OMB Circular No. 10-40.
C, When a Pederal sponaarlng &genc)' has
determined that a. reclplent's accounting sys-
tem does not meet the St.a.ndards tar 1'1-
n..ncl~1 ManagemeOlt contained In Attach-
ment "f' to thiS circular. additIonal pertinent
Information to lUrther monitor grants and
other agreements may be obtained upon
....rltten notice to the reCipient until such
time llS the system IS brought up to staneard.
d. The PederAI sponsoring agenc)'. In ob-
tAining Intormatlon aa In pl\ragrl\phs a. b
and c above, mu.... comply ,,'lth report clear-
ance requll'emen~ 01 the omce or Mana.ge-
ment &lid Budget CIrcular No. A-40, LS re-
vlaed .
6. FederaJ sponsoring agenCIes have the
option ot shading out any line Item on &711
report that 15 unnecessary tor decision-mak-
Ing purposes.
7: Fedcral sponsorIng &gencle:: should ac-
cept the Identical Informa.tllDn from the re-
cipients In machine usable lormat -'r com-
puter prIntouts In lieu 01 prescrlbeocl tormAts.
8. Feder&1 sponsoring agenCICJ may p,ro-
:VIde computer outputs to recIpients when It
wlII expedite or contrll)ute to the accuracy
at reporting.
9, Federl\l sponsonnll agencies are author-
Ized to reproduce these lorms. The forms lor
reproducl.lon purposes can be obtaIned tram
the omce of Man~!;~ment and Budget.
)
Office of Management and Budget Circular A-110 (7/30/76)
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Office of Management and Budget Circular A.110 (7/30/76)
INSTRUCTIONS
Please type or prinll~ibly, Items 1.2.3.6.7,9. IOd. lOe. 109. 10;, 101, l1a. and 12 are sell.explanatory.
specific: instructions for other i.ems are as lollows:
I~ ERI",
" E..t., II'. _~, Iden,,",,,,IIon ..um_ .u1."~ by
u,. U.s. l",.mal R"",eftue Service or rIce Un"'.''''ion)
CDCIe. Jt ,",uff.d by tl\. Fees.,.1 .po"lOfln. 1.lney.
This space I, ,.....tvM' for an account num~ Of O't"'"
iCSentityinl numbers tl\a' may be A'lil"" by 11\.
recicHenC.
8 tntl' the mo~th. diY, end ye.' of thl be"!'"'"1 Ind
~ndln. of '''it orated pit"od. ror formu~. ,rln" thl'
.,~ not ....,,-' Oft . protect ...... ."ow th. pine
pef\04. '
10 The DU_ al ~rtl..1 oalum... (ol.hroul!h (Il I. ta
provide fln,nci.. 4.l. lot ..ch program, funC'tlon. end
.ctMty I.. ,h. buoret .. UP_~ by Ih. , .0e,.1 .""...
,or'" .,...ey. If '.OOIUo...' coJum... .,. ...od.." u.. ..
m...y .cIcIllIo...' 10,,". .. ....oeel ...0 Ifttllc,'a p".
..um_ I.. .""c. p_eo I.. "ppo, Ii",t: h_,. 1/1.
'ot.ls of en pforr,ml. 'uftCtio", or .ctivutl' ShOUld be
./l0Wl'I i.. column (.) or III. ftlYt p.... for '1f,...rne"lI
pert.I..,... 10 .....ral C.t.lac 01 facl.t111 Com_tic
Main.ftCe '''t'Of'lms thec do "oj recw.... a fun".,
funet'OIIII or actlY'tty danificaUon br..kdown. enter
..fttl., column. (ellhl'OU'" ,(I) I". UII. 01 th. pICrram.
For I"'nu or 011'1.' luistlnCI 1.,..menU contalnl"l
mulUPle pl'1tVlml whe,. 0". Ot mOt. prOf"'"" "Outre
. turth.' br.ekdOWft try function or '~""ty. \1.1 I
..""till' lorm fo' ..eh pIC".rn ._.., th. .tlpltc:eble
functions or activit_ In th. .eDI,a'e co'u",ftS. For
,_nts or OCher I.silt.nee Ic,eements conteinins MY-
..... functions or Ictivnies which Ire fu..d trom
~I PfOI'ath", prw.r. I 'SI"I"'. torm tOt eacl'l
.ctlvlty a' tuftC\ion .....n ,oqu,.'ecl by III. F.CI.,.;
__n, .,oney.
lOa, Ent., III. ..et outlay. TIll. .mou..t .......10 be th. ..m.
II th. amounl '.DOnee! I" LillO 10. 01 t... lIot ~..~
II III... hll _ ... .ol..alment to the ........nt sIlOWll
P..........ty. Pl.... .nae/l upl....tlclll. S_ ..ro " 1/11.
la III. Inlllll '.DOIt. '
lOb Ent., th. tot.1 l"OOa Pl'Ollram oull.yo (I... '.bot...
..1....0.. .fttl ath.' oisco....ll) 10' 1111. ",DOrt pe,iod.
I"el..oln. o....Utll.......ts al ...." ,..lloeel .a P........",
incotnt.. For reportl tl\at .... .,r.oe....:f on . CIS"
bll... outl.yo .re III. 11Im of .ctu.1 ....h olsburs..
"'.~':S for .oocIa .nef ..Nices. tIt. .mount 01 Indil'Wd
age"" ch....ed. the v.au. of ~n..ld"d contrtbutjons
loo.i.u. .nd the amount ot eash .cfvwnce. afld
Plyments mad. to l:D"t~ctDt"S ."4 subt".ntels~ For
",po", pre-oa,," on an 'CClUed eXl'e'ncUluII basts. 0Ul~
..~ Ire 'he su'" or .ctual c."h di'lbursemenb. lhl
_mount 0' Indll'ft:l eapense incurred. th4: y."'. o' In.
kitad contributions loOl.eel. and tM "... Jncrea.e (or
dKrt'N) h, ,"- .mount, ow.!d by U.. redDieft1 tor
1lOO4. .fttl othe, prooerty ,eceivod .~ 10' _eo
pel'lo""t<l by .mployees. COfttnlctora. ovbr""'-, .~
otll., po,....
1'- E~lry
J Dc [nt", thl lmouft1: of ,II DrDlr.m h.eome r.allled I"
this penocf U.., i. reQuireel t-'r ,,,. ler",~ 'nd CO"-
dlhOM of the 'ed'fI' ."reI '0 .,. d~UC1e<1 fro," \O,.t
p~f'C1 costs. f'M rlDOnS pr.".," on . C"h o..i.,
.n'.r 'he .mount of cash Incerna rt'C,"IVed d"rinr tn.
,.pottl"l rtHiod. (Ot ,.pons "rcp.r.d on .n .c.cru..
blSII. """, 1M .mount o. &ncome nrnP(t sine. Il'le
be';"'"'" 0' tn. repatt;nr ,.,lod. \lthrn Ihe Irrms or
eOndiho'" I."" ewot,.m lneome 10 be adeled 10 I'"
to'a' ..~f'd. "IN.in ." rem....... Ih. ,ource, Imount
'''d disOOSllioft Of 'h. IftCcwn..
lOt EntH .mount ".,.,."1", to tI" "on~"..cs.rlll ,hi" of
prOf'.'" outt.,. tnc'Uded '" U'. .mount .~" "ne c.
10h E..lor Iota' amount 01 unllqulo...., abli,.tlo... la' thl.
protect Of Dro,'."'. indudi", "nUQuldllled abh,ation,
to sUbrn"'''' and contractors. U"liq"iG.'ed obfill.
tions .re:
c../I lIIal-..tlol\. 1"0""'0 b... ..ot ,p.iO:
AceNeO elllM'nditur. b...w..-obIiSlhons In.:urrftl but
101 ....Ie"... OIIllay .... nOI Dean "co"''''.
Do not iftC1udl any .mounts 'hat have been Included
on line a '''''w,'' ,. On the fine. reoott. IIn~ h shoulCl
have. zero ba"rtec.
101 E...or '''' F_..' ...... 01 u"IicI..lo.,.., ablil.lIo...
shown on Une 1'1. The amoun, sl'towft on ",.is lin' should
be tlte ".".,.,... between the amounts on lines h end I.
10k Enl... tll. sv", al the amou..ls .h...... 0" li..n , .fttl I.
II the "port IS lIft.1 III. ,.port ."",,14 "01 eo..t.i.. .ny
un/lquidata4 obIlcallcllla.
lOrn Enlet th. .."obll",~ 11I1."". of feo,,,1 lu"G.. Thi.
.mount .11",,10 be t/le oln,..ne. betwe... lines k .fttl I.
lJ b Entll 1'111 I.. .neel 0..11.., tn. 'eDort'.., pe 1locI.
lle Entor .mount 01 tn. ..... 10 ....ieh tho "Ie ..... appliacl.
110 Enter tot.1 _"t al h.oirOCl cost ehllreel oUIl", tIM
,,\>Oft Def\04.
11. Enl" .mounl 01 ,,,. F~....I .h." eh."eeI ouri.., .h.
,,\>Oft pe..oa.
If ,"0... than OM rele was .O~ied durin, the "roject
period. incl&lde I MDante SChedule showinl bases
ar.iM' w'""Ch the .nChrect COI' '.'n were IQOIted~ 'he
~soectiYe Indirect rat" the month. Clay, and yea' the
indtACt ,.tn wHI: In efleet. amounts of ittd'~ ca"
_.. e,..,,14 10 'IM oroiect. ...., Ihe Facl...1 '11.'. 01
ifttll,ect _.... _"eel 10 III. project ta NI..
A-l10:6
..
,
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:7
App.......d by Office 01 M.n.R......nl ...d Bud,el. No. 8C-RO 182
FEDERAL CASH TRANSACTIONS REPORT 1. ~"rt.1 ...........;nl -,...cor ."d Of,."iution.1 .1."".... to ..t,,(h lfuI "po'"
.. .u.....n..
(See i1l$tnLctit7l\3 1'71 the bcu:k. 11 repart i., lor more than ane pl"ant 1'1"
a,uist.a7lce agreement. I1ttach campleted Stand4rd Form. t7%-A.)
2.. RECIPIENT ORGANIZATION 4. f....1 ...... .. .0. i4....ihca. S. "wipi....', Keouft' .""tNr ..
u__ io..tityi"l nulftbe,
Howt. : 6- LetW .. credit ft."'''' 7. L..t ..,.... "WCh... ""....bw
",,,...It,,,. Give ll'tal numbcr far this pcrind
aM Str.ce :
I. P'J'II'C". . Vouch." cudil04 Ie t. Y,..,ury (hec~. rt<ei...d ( 1UA,.,(Arf'
,.,., IC:CiMnt ~ "4t deJ'o'lt~d)
CUll, S14'e 10. PERIOD COVERED BY THIS REPORT
0'" ZIP Code:
3. FEDERAL EII.1PLOYER ~ F'ROt.4 ("'_''', ...... ....rl TO (...o,,(~. ..., WItA")
IDENTIFICATION NO.
a. Cash on hand beginning of reporting period $
b. Letter of credit withdrawals ,
c. Treasury cheek payments
11. STATUS OF
FEDERAL d. Total receipts (Sum 01 lines b and c)
CASH e. Total cash available (Sum of Lines 4jJ.M d)
f. Gross disbunsements
(Sell s'Pecific g. Federal share of program income
i1l.!tnLctions
on theba.ck) h. Net disbunsements (L.ine f minU4 line g)
i. Adjustments of prior periods
j. Cash on ha,nd end of period $
12. THE A\.10UNT SHOWN 13. OTHER INFORMATION
ON LINE 11J. ABOVE.
REPRESENTS CASH RE. a. Interest income $
QUIREMENTS FOR THE
ENSUING
Davs b. Advances to subgrantees or subcontracto~ $
.
14. REMARKS (A tta.ch a.ddl14ana.L sheet:! 1'1 'P14ln papcr, If more space I.S rcqulred)
15.
I certify to the best of my
knowledge and belief that
this report is true in all re-
spects and that all disbunse'
ments have been made for
the purpose and conditions 1 OFFICIAL
of the grant or agreement
THIS SPACE FOR AGENCY USE
AUTHORIZED
CERTIFYING
2.72-101
EXHIBIT 2
CERTIFICATION
SIGNATURE
TYPED OR. PRINTED NAME AND TITLE
IAr.. C..a..)
IN..........)
TELEPHONE
OATE REPORT SUBIoIITTEO
I I::'e_;.", 1
STANOARO rORW 272 17-76)
Pr.Sl:ril:u"~ bv Office of M. n"It~,,".nt "nd Rudc.t
I
.1
Office of Management and Budget Circular A-110 (7/30/76)
A-110:8
INSTRUCTIONS
P1eese type or print legibly. Items 1. 2, 8. 9, 10, lid. lle, llh, and 15 are self explanatory, specific
Instructions for other items are as follows:
1'-
E"t",
3
Enter employer iaentificalion number assigned by the
U.S. Internal RevWlue Service or the F'ICE (institution)
code.
If this ~port covers more than one gnlnt or other
agreement. leave Items 4 and 5 blank and provide the
information on Standard Form 272-". Report 01 Fed.
trill eas" TranS.llctio'"-~ontinued; otherwise;
4 Enter F'ederal grant number. agreement number, or
other Identifyinst numbers if requested by aponsoring
a~ncy.
5 This space r~rved tor In account number or other
ldentifyi1tg number that may ~ llssiined by the re-
cipient.
6 Ent4'r'the hrtter of credit numbet' that applies to this
report. 11 all advances were made by Treasury check.
enter '.NA" lor not applicable and leave Items 7 and 8
blank..
7 Ent.r the voucher number of tn. last letter.of.credit
payment voucher (Fonn TUS 540l) that was credited
to you.r account.
lla Eltter the total .moun,t of Fedenll cash on hand at the
beginning of the reporting period Including all of the
Federal NndS on deposit, Imprest funds, and undr
posited Treasury cn.cks.
llb Enter total amount of F'ederal funds received through
peyment vovchen (Form rus 540l) that were credo
Ited to)'OUr llCCO\JoI'lt during the reporting period.
lIe E/I'Mf" the tot., llmount of ell Fedentl Nnds received
during the reportinc period through Treasury cheeks,
wMtn.r or not d~ted.
11f EMertn. ~l F.o.ral c:.uh ctt.bursements, meee
ourinr tne ~ period, including cash re<:eived
M pt'OFIlm inc:.ome. Oisbu~eme"ts as used here also
. lneIude tne lmownt of advances and peyments less
r'Munds to SUbsf.."tMS or OO"~.ctors, the (!'OSs
a.moYnt O'! direet ..!an_ and ......_. includinc th.
EIlt",
It.".
emplO(lee's shere of benefits if treated as a direct cost.
intert1e-partmental chaflfes tor supplies and services,
and the amount to which the recipient is entitled for
Indirect costs.
11, Entar the Federal share 01 progiem income that was
required to be used on the project or program by the
t.rms of the grant or airee~!nt.
lli
Enter the amount cf all adjustments perteinlng to prior
periods alTecting the ending balance that have not
bnn included in any lines above. Identify uc:.h grant or
all'reement for which adjustment was made, and enter
an explanation for each adjustment under "Remarks."
Use plain sheets of paP<< If additional space is required.
llj
Enter the total amount of Federal cash on hand et the
end of the reporting period. This amount should include
all funds on deposit, imprest funds, and undeposited
funds (line e, less line h, plus or minus line I).
12
Enter the estimated number of days until the cash on
hand, shown on Ifne Ill, will be expended. It more than
three days cash reqirements are on hand, provide an
upWination under "Remarks" as to why the drawdown
_I made prematurely, or other reasons for the excess
cash. The requirement for the explanation does not
apply to pres~heduied or automatic advances.
-.
13a
Enter the amount of Interest eerned on advances of
Federal kJnds but not remitted to the Federal agllncy.
If this Includes any amount earned and not remitted to
the Federal sponsorine: aleney for oller 60 days. explain
under "Remarks:' Do not report Interest earned ('In
advances to States.
13b
Entar amount of advance to secondary recipients in-
cluded in itam 11 h. .
"
14
In addition to providing explanations as required ebove,
,iw additional expla".non deemed IMcessaT)' by the
recipient and for i~tion rllQuirecl by the Federal
sponsoring agency in compliane. with gOlleming legis-
!Mian. Use plain sh..ts 01 paper If additional space is
required.
CO'
I
J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:9
FEDERAL CASH TRANSACTIONS REPORT I
CONTINUATION
(Thi6lt>rm;" ......pl.hd..Nt at"".,h,d f. Sta...dnrd F....... t7t ""IV...II...
rr1'O'r'tl"g 't'IIWWe ,haft tntI pf'IUlt fir 4111u:tfl,J\l:t' a.grcrmcnt.)
2. RECIPIENT ORGANIZATION (Gi... ..4.... mJV.... ,iI...m i.. iltm 1, SF
Ut)
.Aop,oved by Office at M",.,em.nl .n~ !lvo,.,. No,
SO_ROll2
I. FEDERAL SI'ONSORING AGENCY "'NO ORGANIZA,
TIONAl ELEMENT TO WHICH THI& REPORT IS SUB.
MITTEO
3. PERIOD COVERt!) BY THIS R~RT (A. .11.....' ... SF
t71)
'110" f~A. ...... .....,
I TO ,N.." ..... ......
4. list informlhO" befow for ..ell grent Of oUt.., lire.,"..", covered by tnl. 'eJ)Of"t U..e Idd,'ione' forms if more ,PICt fl required
FEDE~AL GRAHT OR OTHER IOEHTIFI RtCI~(NT ACCOUNT "U".U FEDERAL SI~ARE OF ,..n DISBURSEMENTS
CA.l\OH OR cnH(R
'DENTlN'HO HUMlIlR "(T OIS8URSrN[HTS 'G-_ C:UMU,-" T'VC
(.5;'.", " ,..,bdiwj"" bv .th.r id~ti. lIIIi...._.,.... .... ,...._.. i_ NET O'S.VRSEN(NTS
Iy"', ft..'rI'\b..r" if -e'l",ared bV tA. t_._ ""R~' FO" R[PORTlNG
F .d....aJ S"""".......,, A f...qr) PIt"'OD
(nl (hI I e\ ldl
$ $
,
,
.
.
I .
...
"
S. TOTALS (SII.o..14 e...-r.If1>rm4 ""th .........nu .h#w" ." SF !11 "'1
loll.",.: e.~"..." rcl I"" ........... (.". I Iii; e.I....." (d.) tile ...... .Jlines
llil ond 1/1. of Iii.. .SF' nf 4104 ""......I..liv. di6b..r.......cwto .il...... "'"
I...t r."....I. A ltac. .:"~tio" ./ ""V d..~ er.....y.) $ $
. .
"
277..01
sr,r,No,r,RO FORM 27:<-'" (1.76)
J)f'..lI'dr.~ ~... OHi... rol _0"0('._"" ""d &,,It,..,
Office of Management and BUd9"1
'cular A-110 (7/30/76)
.1
REOUEST FOR ADVANCE
OR REIMBURSEMENT
A~ .., Ollie. 01 .......c......., .....
BudC.1. 110. ~183
... ...~ ., .... .....
o AOVAHCE 0 :~'U"SE.
.... .......... ...
OAGE
o.
"AGII
Z. IlASIS Of REQUEST
o CAIH
1.
TYK 0"
"""M[N'
"IQUUTClI
o oA"nAL 0 ACC"UAL
1.. ""IIITIA", ";IY'aii'NT""'iifOU~
HUMIU '011I THII .~OUE.r
(Set ,,,,'nu:tiOlWl Oft, N.clt)
J. IItA.. SPON IN" N AHO ORGAN' 'HAl...
WHICH THIS RUO.' II su....nm
o "HAL
fllt.L e....,. 011I MEIIt
100NTIr'ftNQ NU".P AUtGNn
I" n.ol.ltAC. AGl.NCT
H
..
L ......01' III I
HU"""
Pt:RlOO COVlRED
t--" ..... .-.t
nns liE UEST
c~..... .-r'
ICA H
ClPI[ S NT HU...c:1t a.
OR IO&N"FY'HG HU...~..
~ T "GAN'ZA I H
,. .. ....... ,..-a .... -... ')
A........
H_
H_.
H_'"
.... .."....
H_
~.I'.'"
c_~ .....
.... %Ir c.... :
e".. .s....
'... JI" 1:'"'" :
11. COlIiIP'UTA nOli Of AMOUNT OF RElIllIlURSEMEHTS/ADYAHCES REOUDTED ,.,
(a, (., (el
,
PROGIWolSlFUtlCTIOHS/ACTIY1TIU. TOTAL
I. Tae.. P........ (A. ., aul
_'11IO 10 d.'. S S S S
b. w..: Cum.llot... _..... 11IC0....
c. ::: 1i""m -.,. I lAM . .......
d. [stImolad _ c..1t outtays far a...ance
...1100
o. T....' IS.....,.' M." d: d)
I. _Fad...I_... of amount on,U....
E. F_.... .hatw 01 amount on U... a
II. F_.... p......-. _iOuO/Y_ad .
I. ='Ii~~ - _.-tad (LN ,
I. Adw_ l"Wquirld .., III rnontIt
_It, - _H'oO
.., F_ "."'... aconey
far u..; In makln. prw- 2"'_11
.-.lIad 00"."....
.Jill noontll
lZ.
ALn:,,"ATE COMP'UTA1'1ON ~ ADVAHCES ONl.Y
a. t.llnwIlad Fad.... ...It outlays IlIal willbo ....d. dun.. peIlod _ .., tIlo __
$
It. z....: Elllm.tad bol...... of F_..I co... 011 _ .. of lloirIiIl..... of __ period
~ _lit 'OCJ!-.cI (U_ ......_ U- &1
1:1.
s
CERTII'lCMION
_TUtlE or _ZIIO CEIl'T'''''__
OA n .IOUESI'
lu...mm
I c."'" 'hot 10 I"" boat 01 my _..
aM bIIli.' the data .bow .,. CDfftCt and
lila' .11 outlays -. m_ in ~._
witll .". C..1It COItOltions ... _ 01....
_lit ..... IlIot po-", Is duo and 1Ia. "'"
- ~oIy Nqu_.
1"IP'III _ __ II_E ....0 "T~E
11_
.--
.a_CWo
Ta.E_E
"..._far__
1_101 EXHIBIT J
ITMIMaD ~ J'7ID C7-lI.
......ectf..~ .,., 0IIka" II."...,..... .M ..~
ClllCUl....R MO. 1..110
Federal Grants M2In8gemenl Handbook September 1978
A-110:10
,
.
Appendix I
-r'"'~,
I
I
Office of Management and Budget Circular A-110 (7/30/76)
INSTRUCTIONS
Please type or print1elibly. Items 1.3. S. 9. 10. lIt. lie. III. Ill. IIi. 12 and 13 are self.explanatory;
specific: instruttions for other items are as follows:
/1_ &",,,,
2 Indical. whe'h.,. reQunl il prepa..d on CI.h or .e~
cru<<f eaoendiluI. HI.I... All reQue," '01' .dv.ne.,
'''IU be pr~p.r" 0" . C's" bllil.
Enler 11"1 Federal Cr.nt number. or other idenlifyinl
numOer ....;Snecl by Ihe hoe,.' ._,orinS .seney. II
the ao".nce or ,..mbursem."t il tor mote thl" on,
,,."t 0' oth., .,'Mment. jft.ilttC HIA: thelt. .h.,., 1ft.
.'Ir.,.,e amounlSa On _ "OI11t, .heel. list ..e"
,r.n' 01 .,,.........t numbel Ind the Fed....' lit". 01
oull.". mlde 1,lin.. Ifte ,rlnt or I.,eement.
6 En..' 110. ....pIoyer lcIemilic.lio.. numOer ...ifnecl by
110. U,S. 1"'.""'"_ SoMe.. Of lhe rICE (iMIKu.
\Ion) toll. II "",uest"" by 11M f_,al .._.
Thil S~C, il rnerwd tor .ft account ftUf'ftIMf Of at""
Icl_ny.nc nu_ I.... ....,. "" ...i..."" by I".
r1l'Cipi_ftt.
8 Enl.' 110. ...onlh, c1ey, .nd y..r I.... 110. IIelinn;"1 .ncI
."dine 01 Ih. .....od co..,"" in Ihil 'eQunl. II 110. ro-
Quest ;, for _It ad.lnCl or .or both "' IdyanCe Ind 'Ia
Imbu".m.nt, .10_ lhe period lhal Ihe .d".nee win
~. " th. '.-QUI'S' II lor ,.imbunem.nt. lohow 'M
P9riOd lOr ....Ieh Ill. ..imllulum.III II "",UOlloct.
Nate: Tft. Fed..... .POMOrinl a,enei.. h.ve lh. opliOft of
'eQUilinl NCilli_1 10 .......plel.II..... 11 .... 12. but _
bath. It.... 12 ._Icl ... u"'"' .hon only . minimum
amount of in..".t. is IIWCII'Cf to me. In Ict".1ICC
..... GUIt.,. i"_I..... _i_ ,,, It.m 11 CIIn ""
_oin.d ,.. . _"'" ...."..... from __ .......,L
II Th. pu",.... of tM __ ........... (.). (b). .ncI (e). it
10 fl_' ._ lot ........1. coR _'_1 _ .
I'''';IOC\ he. _ ",."..oct _ -".0 by _.......
lunction. Of OCIMiy. II ""CIIlioN' COlumns .re _.
11_ Eftl",
ule .1 me", .ddihonl' fonn, .s ftftded and illdtc.a'1'
pal_ ftVIftllet ift spac" prvvtded in upper ,'Pt: holwa
...,.. the summlry totael of .U pro,ram,. tunctio"s.
01 .C1I..ties Ihould be- lhowft in the "tota." coh,,"" on
the hAt J>>lea
11. En'er in '... of d.te.'. 'h. month, d.y. end year 0' the
.1td.It, 0' ,be .ccounlin, Plnod to whi..." this .mount
.ppl.... En'., ptOff"" ou"'Y' '0 d.,. f ,'e, of r.tun.h.
I.I>>....a and cf'lC'ou,,"). in In. eppt'Opn.'. Cofumnl,
For NQuesu pteoared on I us" b.,i... out1a,. .re t".
sum 0' ad.,.' c.." dilbUncments tor ,oocb .nd "N~
left. the lmoun' of indirt!C1 ..pensel thl",ed, '''.
y.,,,. of inaN,", C'Dftcribvh~, a"pied, .ms the .mo""l
of C111" ad.lnces Ind payment' m.de to IUbc:O"''''c'
tOf'l .nd lubrl!CiDient~, (or l'1JQu..ls pntt>>red 011 ."
acerved .....nd.t".. beai,. oull..". ne U.. ioU," of the
actual calh dllbu,...m."tl. "'Ill .mount of 'ndirect c..
penses incutr". Ind tn_ net Incr.... (or dee,.lse) 'ft
Ute amount. o-.d by the recipient for roods .nd other
P"l00f1Y __ .nd tor ..Nic.. ~,._ b1 .....
ployees.. CIDftt~. "ubf..."'ees .nd ot"., 1)1,.....
llb E"'.' lhe cumu..l.... Ulh income ,ec_ 10 d.I., If
reou.ctl .,. ""..".,.. Oft . CIIsh balis. For '",,",1
0fWP."" an .n acct\MId upend"u,. be"s. ."'er the
e""",,"';.. ifN:ome MI'IMd to dlte. Undw eKMot- ber.is.
en'.,. only the .ntOuftt aOl3ilicatHe to p"....m income
thai _ ...."....., 10 be v."" lor II.. fl'Oi8Ct or fl_
I'.. by thII 'CmI' 0' the '''II"t Of oCh... ..,"",en\a
11 d Only""on _lUne roQu..I, lor _ne. lllIym.nll.
....... tn, lOt.. .slim.fWd .mount ot cash outlays (".t
will "" mod. du,i... Ill. period COWIN<! by ItI. _.""..
13 Complete 110. certiflC.lion ........ ..,_inin, thil
reQu.st.
.
A-110:11
'\
I
J
Office of Management and Budget Circular A-110 (7/30/76)
"1>_ by Olll.. 0' Mene.em."t .1\4 ,....C[ or
OUTLAY REPORT AND REQUEST rOR REIMBURSE. Bud.rt. No. lIO-ROl81 '-.ot3
MENT fOR CONSTRUCTION PROGRAMS 1. n"t 0' RlOU[ST a.. ~""II OF .<<QUIST
(S.. i'UI'",C'timu ow ba.c.) o 'IMA" o "u"... o CA.N o ACCOUAl
S. HOE'''.'' lIilOHSO.'"Q AGO'CT ."0 ORGANlJATtOfIIAf. ILIE"t.N1 TO c. rlO(ll4l allAM' oa 0''''(_ ... ".""'" rAYM(HT 'U:'OUC,ST HO.
"'"'CM lHI' "troRt IS .uey.nu .DC..T.,..,..... HU".I" AUICNID
IV H.~ AGINCT
L ~~:.'eOI';.I" IO[Hn"CAf,OIf I P. O(C>~(..T ACCOUN' 00 0'"11I ,.... ..... " "'II ......
IDlHn"'INO ""...U
'lItO.. .M..... ~ .--. 10 till........ .... ~.
'g JtECJ~Utr GlllaNUIATION lL ,.",u I~ ..............-.. "~"""""__"
Ii_ , 11_ ,
"'_. ...,/. 11.. ....
..- , ...- ,
Cu.. CllIo.
.s&au .... s..... __
J:lt' CIIIlI_: ./r c:..:
II. ST" rvs OF F'UHDS
PlIOGRAMs-TUHCTIOH'--CTIVlTlts
CLASSIf'lCATIOH (.1 (.) (0) TOTAl.
".
a. Admil"st,.t;.. f11loe"~. $ S S . $
b. Pre"""...". u~n..
.. Land. ""'Cluru. "11I100".."
d. Archit..:tu,., .",in..n", belle t... I
.. Otn., Irchllectur.' ."11""11"1 ....
,. P....,1<d Ins_ion ,... I
I. ......cI d.....OIIm.nt I
h. R.toel Uon -.IM"S'
I. Relocation p.ym'''11 to 'n"Melv,', and
bUline"...
I. OemollU.... .net ..."'....., '"
k. Construction and Ctro;.ct Impt"OWWftent I
cost
I. Eauipment
m. Miscellaneous cost
n. Tou. cu",ullb"e to da" (au." o(lines I I
. ",", m)
o. DeductiO"I lor pror"m i"cam. I I I
O. Net cumulat.v. to 0111 (Un, It minvs I
Jine 0' '
Q. Fede,._,h.,. to da'. I
r. R.hAbilitation .,."ts (100% -I
Du,nment)
.. T 01.' F eder.1 .".r. (1_ 0' -. Q I
.net "
l- Federal IM,m...," "''-1'" .... I I
Q....,ed
u. Amount nrQuest.d for rrimbu",ement Is $ $ Is
v, P~r~."t'r' 01 P"ysical completion 01
I>I<I/e.t % % % %
12. CERTIFICATION I'CH"TUIII( 0' "IITHO..zeo a.TIn'....C lOA" otOO.T
o"'CtAt. IU....lntD
I Certll, 1".1 10 I". besl 01 m,. kn_'ed..
.nd beli.' I". billed 'osn 0' disllu,u. .. RECIPIENT 1"r~[D 0" ""'H1'tD .........1 ....D TI"Le I Tnc...ON( I A_ --.
menu Ir. in aCCOrdlnce with th" tl'm'tS ....... ~ ..-.
01 tl't~ "ro;~d .nd' fhlt the rwimoursemen(
reDi'.sents the Federal Sh." Clu. whiCh SIONATUIIlC 0' """MOAlzeo cu,,,n'HO DAT't sac."CO
ha. not been pre"iousty reQuested .nd 0" IC1M.
th.t In in,pl"Chon "_J bee" ,oerfonned b. R~OT.Se-"I"'We-
and .11 ..rt is In accordanc. with UI. ..rtily.... 10 N... T"fnD 011I ....HTE.D .....E ..uco T"l..t T[Lf:~"'OHt IA.._ f'....
term, o( the eward. Ilv. .....- ~ -.......,
27)_l - -
01
eXHIBI,
"A"D"_O ro.... n"J C7..,,!
,....'..r.... I'~ (,..... ",' u....~_.....~ 'h,,~
A-110:12
..
..
I
I
Office of Mamlgement and Budget Circular A-110 (7/30/76)
INSTRUCTlONS
PI..,. type or print l~bIy. '"",,,,3. <C. 5. 8. 9. ]0. 11&. and ] h.... MlI.explanatory; specific inslructions
lor oIh... Items _ .. lall_;
I<- .....,
IlQtl< .... __... -. " 11M ,__ .. R_. -
-.......----.--"'-
......-
z ahftw ......h.. .tneUf'b .,.. ............, ... .. ..,.,uM
........... ... .- ............. .......
, a_ .... ._, llloP""_ _......... __ br
.". U.S. 1m.""" R_... _,... rlCt (_~
_. /1....- ~_ ~_ ~).
T "'I, ..... .. ........... Iat 8" ecaaunt """,,,- .. ......,
_llfyMc ""_ _ -.. .. ....._ 1'1' """
.....-.
11 ",._'Of__lef~(C)..lID
~-"" - ... -.... - -- - .
- p...;-t .... - ~- .... ~. br -
,...... - .. -Itr. " _ _... ...
......ed. ".. .. ....ny eckfl'tkM.. twmI. .. ........ aM
Ioodlet.. _ _III __ __ in _ rtwhl:
_. 1ft. _.,. __ .f .. __ Iu_
_.'" __ ."""Id to. _In llW ~
_m.. ... 1M _ ""... All _... ___ ...
. ......u_ loa....
lw 1___~...__..._.Iep,
_. ......... of __ .nd .... _ .m'"I__
_... ....... ... ."'eunt '" ......,.. ____
-- ~, by _..... ~lon. ...,.. _
"'" .mount 'Of _ _... . -110'-"""
11~ _ _ .......... .. _ _ of _iac .nd
......."c. -..... .......,.. - -... ...1IltoC _
-. .... .. - _ _,.... ....... lD -'
....... h. ..... R
lIe _.A_d~__"""_--,"
.... 'Of ...... ~ _ _ ...... ftIlIt4f-
_.
1W ...... _ _ ... _ of _"It_..l ...........
11. EftWr _ _IlOC\urwf ........nc _. Do _
Incluo. _._ _ _ _ II.
111 l_ ~ _ _ __ of _........-._
--
111 [~ Me ......... ........., ...... ... Ir ......~4 ",
- -.... ~_of_...ntis......
~-v 11..... The ~ ~...ftC' '" ...... ......
- ...-..., -... wit" -;or __
-.. -...... - --.ory - ---
-II.
Ilk ~____..~_
~ ............ ~ ,.. arJt.s fIf ......11. I( ---..
"'c__1.00_____....
........ ~ ~ ... ."....,..
-"'__110__..._..
11i lMer__.,___~_
.....0_ ... ""__ _.. 1_ ...._ _
cam&. and ...,... ..........~
,- .....
11' !IIIw _ __ ..... _ aI _~ of 11M
~ _ _. Ie "..... pelty _noct,," CIi.
M::IIIo'....... itt "....,.....". Cl__ or ,_, of
-_ "- -........ "nd. M __" '""'" ,,,.
-- fII ....... 0' .. ~ 01 ..rvct",.. .nowlrd be
cndIiI:ed tD ..... aC.CDiWIt: tNntOy ,.ftectinl "'<<
_ ii_by"" rod..., .....y.
Ilk E-.r thole ..,....,.. euoc_ect ...." th4 ec1U81 con.
.ww:&ioft ClIf. ...~ _. 01 testor.hol\ O. . lacflity.
Neo. lftiChldll NIl ..... c.t......,. 'he amou"tl 'or rwoi..ct
.....~ ...... as .......... 11....c1. I....aec.pa"..
- IIpCInc.
lIt Em_ .__ ... .R lQ..........nt. _ ft.od .nd "",.,.
.-. _ ., _'....._ uoc<llor con.'rvcliDlt, 'or
-..... _"'Iy _"eel "_lory I.".... built.
'" _10 _ .,.._ ......IIM Cleok.. .IM,,,. and
--"-~
u... _ _ _ lor .R -.. _ .pecll\Q.1y "'.".
--..
U.. Em.- lhe _ ...m....\I.. ._'" to el.l. ""'Ie"
~ .. .... ...... 01 a,... . .......... m.
n. _ _ _ _... aI _..m __ .PClI'. 10
- ...'" .. -.- _... ...ept IIle""'o I".
- - - L ...---, _ . _rele '''.-1 01 peper
___~'Of-1_.
u~ r-_ _...-._ lot el.'e....ic/I ._1eI
loa _ _ "'- on Mno " mi..... I... .mou"1
- ......
u.~ __ __ _.. ef _ .mount __" on II... p.
111 EMw the _ of .....bllltalion' ,""I pe,....."'.
- lID _ _ _..m ~;'""tiOlo _ill..
100 ....- __ ~ the f..,_1 '..-.ey.
111 E_ _ _ _ 'Of ,_... po-," ~oIy
-.1I__._...._.,.;m.
----.
u. - - _ _ boinc....- _ __.
-. "* _ _ .. .... .ltl......,. _"
... .......... ....... ... ... . .1IlIIlI 1. It dl......"'- ...
......-.--
U. To.._.~....__......ic,..
- - .... -" vi _ II........., Th. d.'o"
.......... t. .... 8CI-..I ..... lhe ....... ia IUbmitted to t....
r_._.
1210 To loa ......... ~ _ _ "~.llve
- .. .....,.... .. .... _... 01 proj<<:l -01.1_
· ~ ..... irt _ _ of IIM,,",nt or ..-'-.nt..
A-110:13
'\
I
Office of Management and Budget Circular A-110 (7/30/76)
ATT"CHMENT H,-CIRC\1L"" No. A-I10
MONrTO"lNG .....0 "ErO"TING rl:OGllAM
rERFOII.M..HCE
I. This Iltt.achment sets forth lhe proce-
dures tor monllorlng and reporUns prosram
performance o( recIpients.
2. ReCipients shall monitor the performa:lce
under grants and other II.greements and.
,,'here appropriate. ensure that time sched-
ules are being met, projected work units by
Ume periods are being accomplished. and
other 'J)erformance goals lire belns achieved.
ThIS review lIhall be made for el\ch prosram.
funcUon. or activity of each asreementll.$ set
torth In the approved appllcaLJon or award
Qocument.
3. ReCIpIents lIhall submit a performance
report (technlcnl report) for ench II.greement
that brleny presents the tollo"'lng Intorma-
tlon tor each program. function. or "CllYity
Involved All prescribed by the ,Federal, spon-
soring agency:
a. A compnrlson of actual accomplishments
with the goals established fO,r the period. the
:\nc!lngs of the In,'estlg:al.()r. or both. It the
output of programs or projects can be readily
quantllled. such quantltll.tlve data. should
be relateQ to cost data for computation of
unit costs.
b. Reasons why established goals were not
me;.
e. Other i'ertlnent Information Including,
when _pproprlate, a.nal).sls and expla.natlon
of cost oVerruns or high unit costs.
. 4. Except a.a prOvided In a and b oelo....
and In subp..r..gra.ph 3a( 1 ). Att..chment Ci.
redpienta shaJlsubmlt the performance or
technical reports to Feder&1 sponsoring ..gen-
des, ..nd the Financial Status Reports cov-
erlng- the same period In the frequency estab-
lished by ....tt..chment <:; ot this Circular and.
where a.pprOprll\l.e. _ tlna.l technical or per-
formance report atter comi)letlon 0: the
project ,on a date speclneQ by the Federal
sponsoring agency. The Federal sponsoring
arency ,shall ,prescribe tbe frequenc}' with
....hlch the performance reports w1l1 be sub-
mitted WIth the request for advance or reim-
bursement when tha' form Is usea In lieu
0: the Financial Status Report. Except as pro-
vided for In paragraph 5 'belo.... performance
repon. shall not be required more frequently
t.'lan quarterly or less frequen'ly tha.n an-
nU&lly. Federal sponsoring- agencies may
"'"alve the requirement for recipients to sub-
~It per(orma.nee reports with the nnancl&l
reports under the followlns circumstances:
L When the recipient IS required to sub-
mit a performa.nce report with a continua-
tion or renewal appllca.tlon.
1:1. When the Federal sponsoring agency de-
termines thaton-slte lechnlCa.l Inspections
and certlned complelJo;) dab will be sum-
c:lent to evaluate cOftS.tructlon projects.
c. When the Federal sponsorlns agency re-
quests ..nnual 1\nancl&1 reports on II. nscal
year baal$ but It IS necessa.ry to get annual
pr::gress reports on a. calendar year baalS.
5. Between the I:'equlred performan':e re-
portlng da.us.'eventa may occur th:lt have
slrnlncant Impact upon the project or pro-
~am. In such Instances. the reCipient shall
Inform the Federal sponsoring agenc). as soon
as the, fol1o.....lng types of conditIons become
lenown:
a. Problems. delll.Ys. or ad\'erse conditions
t:Ja.t .-111 materially affect theal:llllt~' to "t-
t&ln program obJectives, prevent the meet-
Ing of tIme sehedufes and soals, or preclude
the attainment of project work units b~' es.
tabllshed time periods. This d!!\closure shall
be accompanied by a statement of the lIetlon
ta.ken. or contemplll.ted. and any Fedcral as-
slllt&nce Deeded to resolve the situation.
b. Favorable developments or events thllt
ena'ble time. schedules to be met sooner thlln
anllClpl\ted or more worle units to be pro-
duced than orlglnaIll" projected,
6, If an~' perforsnance re\'lew conducled
by the reCipient dL,closes the need tor change
In the budget estimates In accordance ""Ith
lhe crlterlll. established In Attachment J Co
this Circular. the recipient shall submit a re-
quest for bUdget reVision.
7. The Federll.l sponsoring agency shall
make site vISits &I frequently ll.$ praCtlcable
to:
a. ReView program accompllshments and
management conlrol s~'stems. and
b. Provide such techn1cal assistance as
mll.v be required.
8: Federal sponsorlns "gencles shall submit
proposed technica.l and performance rl'ports
to the omce of Manll.gement and BUClget for
Approval In I\Ccordance WI th the report clear-
ance requlTements of OMB Circular No. A-40
as re\'lSed.
ATT"CJ/MENT I.--Cmcu1.AII. No. A-IIO
.... \'MI:N'T III:QUIIII:MZ:Nn
1. ThIs attAchment estD.b1lshea the re-
quired methoeta of making payments to reCip-
Ients. These methods wlll mlnUnJze the time
elapSing between the disbursement b). these
recipients and the transfer 01 funds from the
United States Treasury to these recipients
whether such disbursement occurs prior to
or subsequent to the transfer 01 funds,
2. Payments can be made to recipients
through a Illtter-ol-credlt. an sdvance by
Tre&sury check. or a reimbursement b)' Tress.
sury check. The follOwing detlnltlons apply
tor the purpose of this attachment:
a. L~tter-o/-Crlld.it.-.... letter-of-credlt Is
an Instrument certlned by an authorized om-
elal or a Federal sponsorIng agency that au-
thorizes .. recipient to draw funds when
needed from the Treasury. throurh s Fed-
eral Reserve bank and the reclplent's com-
mercial bank.. In accordance with the prOVI-
sions ot Trea.aury Circular No. 1075. aa re-
vised. .
b. Adv~nce by TreA.tury ch.ecle,-An ad-
\'a.nee bv Trea.sury check. Is a payment made
by a Treasury check. to a recipient upon I~
request before outlays are made by the
recipient. or through the use ot predeter-
mined payment acnedules.
c. }tlSimbur,cmlSnt by Treuury ch.ack.-....
relmburHment by Treasury cbeck 1& a Treas-
ury cbec:k pald to a reCipient upon requeat
tor reimbursement from the reC:lplent.
3. Except for construction grants and
other construction a.greements for which op-
tional payment'method& are authorized. as
described In paragraph 5. the letter-of-credit
method shall be used by Federal sponsoring
agencies J1 all of the lollowlng conditions
exist:
a. J( there Is or wUl be a coatinulnr rela-
tionship between a recipient and a Federal
sponsoring &l;enc:y for at leut a 12-month
period and the total amount of advance pay-
m.nts expected to be received ...1thln th..t pe-
riod from the hderal sf'Onsorlng agency Is
$250.000 or more. as prescribed by Treasury
Circular No. 1075. For JOint funded proJecu
the Treasury has ..uthorl.Zed a dollar criteria
0: 5120.000. .
b. if the reCIpient has established or dem-
onstrned to the Federal sponaorlns Agency
the willingness and ablllty to ma.lntaln pro-
cedures that will minimize the time elaps-
Ing between the transfer of funds and their
disbursement by the recipient.
c. It the reclplent's llnanClal management
,,'stem meets the st.anda.rds for fund control
and accountRblllty prescribed In Attachment
F to thlsClrc:ular. '.Standards for P'lnancIAl
Mana.gement S~'stems:'
~,The method of advanCing funds by
TrelL_un' c:heek shall be used. In accordance
\l'lth the prO\'ISIOns of Treasury Clrculll.r No.
I
A-110:14
1075. ....hen lhe recipient meets all Qf the re-
quirements specified In para!:raph 3. above.
'except thofe In sUbparasraph 380.
5, Tlle reimbursement by Treasury check
method shll.lI be the preferred method If the
reelpl.nt does nol meet the requlremenU
!peclfled In subparagrll.phs 3b and 3c. II.bove.
At the option ot the Federal sponsoring
a,enc)'. this method mll.Y II.lso be used on any
construction agreement. or I( the major por-
tlon of the progl&m Is accomplished tnrough
private market financing or Federal loaN.
"nd the Federal asalSLlI.nce constltul.es a
minor portion of lhe prosram. When the re-
Imbursement method Is used. the Federal
sponsorlns at:ency shll.ll make payment
wIthIn thlrt). da~'s after receipt of the billing.
unless the billing Is Improper.
G. When the letter-ot-credlt procedure Is
used. the recipient shall be Issued one con-
,olldnted letter-of-credIt whenever possIble
to cover anticipated clI.sh needs for 11.11 grll.nts
and other agreements aWlI.rded by the SpOIl-
$Orlns a!:ency, Wkewlae. to the extent pO"51-
ble. when th'e "dvance by Treasury check
method Is used. advances shoulCl be cun-
sollllal.ed (pooled) for II.Il crants and other
agreements made by lhe sponsoring ..gency
to that recipient. . .
7. Unless otherwIse requIred by law. Fed-
eral sponsoring agencies shall not withhold
pll.ym~nts for proper charres made by reelpl-
enta at II.ny time during the project or pro-
!tram period unless (a) a recipient has flllled
to Com!)ly with the pro!:ram obJectives. awarcl'
conditions. or Fedcrnl reporting require-
ments; or (b) the recipient Is Indebted I.()
the United States. and c:ollectlon of the In-
debtedness will not Impair accomplishment
of th. objectives ofa project or program
sponsored by the United States.
Under SUCh conditions. the sponsoring
agenc)' may. upon reasonable no lice. Inform
the reelplent tha.t pa~'ments will not be made
(or obllgatlons Incurred after a specSned dau
llntll the conditions a.re corrected or the In-
debtedness to the Federal Ciovernment Is
liquidated.
A'M'''CHMI:NT J.--CmCllLAII. No. A-IIO
"Il:VlSION Of" "N..NCV.l. Pl.AHS
1. This attachment sets forth criteria and
procedures to be follo"'ed b)' Federal spon-
soring agencies In requiring recipients to re-
port 'deviations Irom tlnanclal plans and to
req uost a.pprovals for tlnanclal pl&n re~
visions.
2. The financial plan Is the nnanclal ex-
pressIon 01 the prOject or program a5 ap-
proved during the appllca.llon II.nd/or' tward
process. It may Include either the l"edera\ and.
non-Federal share. or only the Federal ~hare.
d:pendlng upon sponsoring agency require-
ments. It should be related to performance
for program evaluation purposes whenner
II.pproprlale and required by the Federal
sponsoring agency.
3. For nonconstrucllon a......reta. recipients
~hall Immedl..te)). request approv&1s from
Federal sponsorIng agencies when there Is
ru.son to belleve that within the next s:ven
dll.Ys a revision will be necessary tor the
follo....lnS reasons:
a. Changes In the scope or the obJects..e of
the project or prOl;Tam.
b. The need for additional Federal tund-
Ing.
c. The transfer of amounts budgeted fer
IndIrect CDSU to sbsorb Increat'Cs Indirect
costs or vice versa.. U approval Is requlTed
by the l"ederal sponsoring ageney.
d. The expenditures as require approval In
accordance ....Ith )'"Me 73-0. "con l'rlneSples
for Educa.tlonal Institutions." For all other
awards. appro\'al requirements for otner
Items 01 expenditures mal' be Impoled It they
nre consistent with those In l'"MC 73-0. No
other reqUirements tor, speclnc Items may be
I
Office of Management and Budget Circular A-110 (7/30/76)
Imposed un1esa .. oevlatlon b.. been ..p-
proyed by tbe Omce of ManAGement lUJd
Budget.
e. ReClplent.& plan t.o transfer tunds ..Uou.ed
for training allowaoces (direct paymeol4 t.o
tl'alnees) t.o otber categortes of expenH.
(. None 01 tbe .ubstantlye prognmmaLlc
work under a grlLnt or other ILgreement may
be subcontr..cted or tran.lclTed wUbout prior
approyal of tbe Federal sponsoring ..gency.
This provision does not apply t.o Ute purchase
of aupplles. mAteriAl, equipment. or general
support serYlces.
5. Tbe Federal spon.-.onng "4;ency may
1L11IO. at 11.& optIon, restrict ~ranslel'll of fundll
lUnong dlrC!'C1. co.~t cn.l..esorlcs tor AWlLI'dls 10
whiCh ~he Federal shAre excee<la UOO.OOO
when the cumuln.~lve &Inount oC such traM-
C el'll exceecls or Is expected t.o exceco n ve
pere.nt of !.be t.oW budget All last Approved
b)' the sponsoring Agency. The SAme crU.erla
shall apply t.o the cumula.tlve &.mount of
~raDlltel'll among progl"8G\e. functions, ..no
..ctlvl~les "..hen bUdgCl..ed scparal..ely for ..0
""'Md. elU:ept UtAt ~be Federal 9Ponsorlog
"'Gency shlLll permlt 00 trG.DSfer tbat would
caus.. any FeoerlLl ..pproprla-tlon. or pArt
thereot. t.o be used for p\UtlO&CS otber thaI!
thOllO Intended.
6. All other, changes t.o oonconstructlon
budget.s. except tor \.be cbanses descrtbed
In parasraph 8, below, do not reqUire 1.1'-
proYlL1. Thl. InclUdes \.be use of rectplent
funds In Curtherance of prosram objectives
over and aboye the recipient mlDJmum share
Included In Ule a.pproved budsct.
7. For const.:'ucuon a,..an1a. reclpleut.s
shall request prior a.pproV1l.ls promptly trom
Federal sponsoring ~eDCles tor budget re-
vISiOns wherever:
&. The revISion resvJts Crom cbanges 10
Ute scope or the objective of tbe project or
program. and
b. The r..vlSlon Il1CI'eases \.b.. budget
amount.s of Federal funda needed t.o com-
plel.4t the project.
8. When a Federa.l sponsoring ..gen::y
makes an award that provides support.tor
botb construction ..nd nonconst.:'uctlon work.
th.. Federal sponsoring agency maT require
th.. r"clplent to r..quest prior ..pproval from
the Federa.l sponsoring ~eDcy bcrore m~klng
..ny tund or buag..t tnr.nstel'll between ~e
two types of work sUllporte<l.
9. For both constructlOD anc1 nonconstrUc-
tlon s.warcls. Fec1er..1 sponsoring ":eneles
shAll requlr.. reclpl..nts to DoUfy the Fed-
era-I Sp:lnsorlng ..gcncy promptly ....hene.er
!.be amount of Fcder&l ..u\.borlzlic1 tuncls IS
expect.ed to exceed the neecls oC the recipient
by mor... than 55.000 or !lve percell I. ot the
Federal award. whichever IS greater. This
n.otltlc:a.tlon "'111 not be requ1/'eel II applica-
tiON tor ..ddltlonal tundlng o.re .ubau~te::l
Cor c:ontlnULng grants or contracts.
10. When requesttng approval Cor budget.
revISions, reClplen t.s shall use Lhe budgot
tonns tha.t were used In \.b.. ..ppllcatlon
unless a letLer req uest ,will sumce.
11. Within 30 calendar days from th.. c1a.te
ot recclpt of the request Cor budS'et re"l-
.Ion.. Federal sponsorIng Rgcncles shall re-
VI",",' th.. r..quest ..nd notlly the reCipient
whother the budget revISions have been ap-
proveQ. If the revllllon IS stili UDder con-
sideration ..L the end ot 30 c:.a.lendsr daTS
Lhe Federal sponsor1nS' ",ency shAll Lnlor~
the recipient In WTltlne- oC Ute ela.te when tI:Ie
r..dplent mRY expect Lh..oecL~IOtl.
ATTACHMl:N,T K.~tI\c'UL...a No. A-ll0
CI..OSEOUT rnocEOVllES
1. This att.a.chment, prescnbcs untform
closeout proc..dures tor Feder..1 S'Tanb aDd
other I\greemcnt.s wIth recipIents
2. The follOWing definlLlons shail apply for
th.. PUrp06e ot thlll ..ttachment:
... Clotocout.-Th.. CIOllCOut of . grant
~cment I.a Ute proceNI by whiCh .. ~er..1
spoWlOrlng lIGency aeterml.DCIS tbaL ..II ..p-
pllcable admlnlsl.l'atl.... a.cuona ..nd ..11 re-
quired work DC tbe a.greement have been
completed by tbe noClpleat and the Pederal
spoDSOrlDg agency.
b. Date of c:omplction.-The date of com-
pleLlon III tbe date OD whlcb ..11 work under
L:1'Dts and oLher ~eell'lents Ia compleLcd or
Lhe date OD 'U)e ..ward document. or any
, lIupplement or lloID..nc1ment \.berel.o. on wblch
Pederal apoDSOTShlp enda.
c. DLsallolDCd costs.-Dlsal1owcd costs ..re
those charS'"" t.o .. S'J"lUlt or oLber ~~ea":nt
that the l"l:deral spon.'IOr!ng "l:cncy or I L~
reprcscnlAU..c del..ermIDes t.o be unallow-
..ble. In accordance WlUI l.I1e applle..bl.. FcO-
eral cost principles or othcr condltlona con-
t..lncd. ID tbo &.gTeements.
3. All P'edera.l spoDSOrtnS' agenCies shall es-
tablish CIOlIlloUL procedures l.I1at IDcluae the
tollowlng requirements:
A. Upon request, l.I1e Fed..ral aponsorlns
"l:ency shall make prompt pRymeats 1.0 a
reclp.leat tor ..lIowable n:lmbu~ble COIIts
unaer the grant or otber ..greement bell'S
clOl'lClC2 out.
b. The reclplllllt shall lJnmedlaLcly retund
aoy bRlanceol uaobllgR&.ed (uneni:umbe~)
cub that tbe Federal sponsoring agency hl\4
advanced or paid ..ad tbat Ls noc. au\.borl",e<l
t.o be retaloed by the reclplcnt tor use 10
otber !;Tants or oLher agTeemcnts.
, c. The Federal sponsorln~ ..gency sball ob-
tain, trom the recipient WI\.bln 90 calenc1ar
days after the date of completion of tbe
..grccment ..11 Onanclal. perlormaacc. and
otber r..ports requ1red all l.I1e condlLlon of thc
agTeement. The ..gency may grant extensions
wbcn requesc.ed by \.be reclpleut.
d. Wben authorized by the g1"&nt or otber
agreem..nt. the Federal spouaorlnS' agency
sha.1I make .. settlemeat for any upward or
downwa.rd adjustment.s to tbe Fedcral sbare
oC COlltll aCter thes.. reports an recel.e<1.
e. Th.. r"clplent sb..U account ror any prop-
erty acqulrccl. Wltb" l"edCTal Cuncls. or re-
celvec1 from tbe Go"CTnment 10 accordance
with the pro"Lsloas ot Attachment N to this
Circular. Property Man&gement Sl.I\ndarc:l.s.
C. In \.b.. e"ent a Anal audit baa not ~n
per1ormec1 pnor t.o th.. closeout of the grant
Ol" oUlar agreemeat. Ule 1"edcraJ sponsoring
'agency shaH retala tb.. I1gbt to reco"er An
appropl1aLc lloIDouat after fully conslderlaC
the recommendations oa dllsallowcd. COllt.s re-
sult.log from tbe dnal ..ucUt.
(. Suspension &Dd Lcn:olnatlon procec:lurcs
are contained lo Attachment L to tbla C1/'-
cular.
ATTACHMENT L.~a No. A-1IO
aOSPEM$lO" AJC'Il TEJu.Ul.AnOM ptoc::z:aVJU:S
1. ThLs att.acbment prescr1bes uallorm
suspcAllIOn and termlaaUon pr:x:cdures for
l"ederai granta &Del Ot.bCT ~Dleats wl\.b
re::lplentll.
2. The followLng deOnltlons shaU apply
tcr the purpcae of this attaChment:
a. TcrminatiOfl,-The Lcrmlnatlon ot a
,",nL or other agreemcac. means \.be CAn-
cellation of Fedcral,spon.-.orshIP. 10 wnolc or
In put. under an agreemenc. at aay time
prior to UI.. date of completion.
b. Swpc:n.sion.-The suspension of a gTant
or oUler agreement IS 811 action by a P'ederal
sponsoring agency \.bat tempora.rUy su.~-
penc:l.s Federal spoas:)rsblp unaer \.be S'"'n t
or oUler "srecl"cnt. pending COITcctl"e ac-
tion by tbe recipient or pead\.ag a decision
t.o termlnaLc th.. grant or otber agTCcmcnt
by \.b.. Federal aponsortag aceacy.
;1. All Feder..1 spoDSOnog acenclcs shl\lI
provIde procec1ures to be toUowcd. when ..
~clpleut baa laUeQ t.o comply WlUI the terms
I
A-110:15
of the gr..nt or other "sreement and eondl-
tlona or "t.and..rds, When Lh"L occurs. the
Ft'der..1 sponsorllll; &.gene)" ma)". on reason-
..ble notice 1.0 the reclplenL, suspend the
grant or otoer "greement. ..nd ",'ILhhold Cur-
Lber payments, prohibit the reCipient Cram
locurrwg additional obllg..tlons of Cunds,
pending correctl.e action b)' Ule recipient, or
.. declalon to termln..Uon In B.Ccoraance ""lth
J>u..graph (, The r..derlLl sponsoring ..geney
sb..1I ILllow ..II necess..ry ..nd ,proper cosu
that the recIpient coulel not r..aeon..blv aVOid
during \.be period oC susp..nslon prOYlded th..t
Lhey meet the provisions of the ..ppllcable
J-'cOeral cost princIples.
4. F..dernl sponsoring "Sencles sh..1I pro-
viele tor \,lIe sysLcmatlc settlement or ter-
mloated grant.s or other asreemenl.& Includ-
Ing tb.. folloWing:
a. Termination jor ccwc.-The Federal
lpoosorlng asency mAY reserve the rIght to
terminate any grant or other agr...ement In
wboleor In part ..t any tIme bet ore the dat.e
ot co~leUon. wheneyer It Is oetermln..d that
the reCipIent has C..Ued to comply wIth the
conditiOns ot the agreemenL. The Federal
sponsoring agenc). shAll prompu~' notlC)' the
r..elplen~ In writing ot the determinatiOn ..nd
toe reasons for the termination. to~ether
wlUl the elTectlve date. payment.s mllde to
reclplent.s or recoveries b~' the Feaer..1 spon.
sorlns ..genclcs under granl.& or oUler &.Gree-
ments l..ermlnAtec:1 lor cause :;hAlI be In ..c-
cord..nc.. with tb.. Je~al rlght.s ..nel lI..bUltles
of the parties.
b. Tcrmi714tion lor conl1enicn.cc.-The Fed-
eral sponsoring "ieney or recipient ms.y ter-
minate grants ..nd other asreements In whole
or In part wh..n both parties ..gree that the
continuation ot the proj..ct would noC. pro-
duce beneIlclal results eommensurat.e wiLh
\.b.. furth..r exp..ndltur.. ot tunds. The two
pILrtles shall agT..e upon the termination con-
dItions. InclUding th.. etrectlve dlLteand. in
the case of partiAl terminations, the portion
t.o b.. termlnateC1. Th.. recipient shall not
lDcur new obligations for th.. termlna~ed por.
1.101' ..tLer the enectlve elate. and shall can-
cel U man" out.standlng obligations... pos-
sible. The FederlLI sponsoring a.genc)' shall
allow full credit 1.0 the reCIpient for the
Feders.1 share of the nonca.nce11able obIlSp,.
tlons. properly IncuITed by the recipient prior
to terminatIon.
ATTACHMENT M.-CnlCl11.AltNo. A-110
STAKDAAD rOltM rop, AJ'PLTINC FOR
n:I1EA41.. ASSISTANCE
1. ThIS ..ttachment4PrOmuIgates a stand-
Ul1 form (SF (2() to be used by pUblic ..nel
prt"ate InstitutioNS of hlgh..r education.
publiC ..nd private b05pll.&Is ..nd other quasl-
publiC anet private nonprolU organlzatlons ...
.. race sheet tor applications when :l.ppl~'lng
for Feaen.1 grants under programs cover~
by Part 1. Attachment A. OMll Crlcular No.
A-95. In addition. lLienclesare partlCUlarlv
encouraged t.o etxenct the use oC SF 42( to
COInD'lon progrlUfts With StRte ..na local gov-
ernments wher.. this torm Is now r..qulr..d by
FMC 14-7.
2. The SF 42( may also be \Ised. on an 013-
tlon..1 bUls. to tulnll the requlr..ments oC
OM.B CIrCUlAr A-95 for a not:tlcatlon ot :n-
l..ent. from ..ppllcant t.o clearln!hOUses. th::l.t
f'celer..1 a.sslst.ance ...111 b.. applied Cor. Loc::l.1
or Statc elearlnghouse procedures wUl govern
the use of th.. Corm tor this purpose.
3. The StAnaAra Corm will ..Iso be useel \1,.
Federal "gencl~ to report to the cleo.rlng:
houses on mAjor actIons tAken on n;:lpllca-
tlons reviewed by clearinghouses In lIcct)rd.
..nee ....Ith OMS CIrcular A-95. anel to notHy
Stal..es 01 gr..nts-In-p,td a......roeel In ILccord.
..nee ""Ith Tl'euury Clrcul..r 1082,
I
J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:16
owe ~ol Ne. ""-'lOru
FEDERAL ASSISTANCE
2- _L1.
CANT'S
....I'f'\.\.
eAT~
I. _lItll
.._IU
I'
J. STAn:
~-
nOI(
IDDf'n.
nVt
~. DA Tt
ASSICIl(l)
r.... .....a..
....
1. TYPE 0 1'Rf.U'l'lICATJOH
0'
....CTtON 0 N'I'l.JCU)()ft
(M_.po 0 NcmFlCATXlft OF IICTtJ(T (t)pt.)
~o""""
..., 0' REPORT Of rt:DEJW. ACTJOfC
4. LEGAL APPLICANT /Rr:C'P,e:NT
b. l).\'Tt
r_ _ ...
19
w...
lllG....
S. 'WtlVrL EMPLOY"" tOCI'CTtnCATI()t4 NO.
I. /IclPtiClnl 11._ :
k~ O".ni,.tiOft u"n :
c. SIrMe/P.O. !lG& :
~. ell\' : .. ......" :
l. SteM : I. ZI' tad.:
.. NUIISEH
b. 111\.(
I , 1.1 I I I
6-
pAO.
GRAM
(F._
,.....11I
0--."
~. c..yllt ,_ IN._
c .. ,....,,~ /'10.) :
i 7. TITLE AND OESCRIP'TION 0' ....PpLlCANrl PROJICT
5
I
~
l
!
i
L T"l'~ Of'
A-SIoII
1I-II.t_Ie
C-su-.u..
01"'"'
o-c....tJ
(-"If
'-S&aeal Ol~
'ir::"'-
~PLlo.c.ln' /A[Clrl ENT
~....I" ""'I.. A.-
I- Hiro., l.ual.... _Ihlli..
..., j- "'d.e. lr...
Il,..()lll. 1&PH<<vl:
s~ .,.....o"n." '-ce- 0
~ TYPt: QI' ......IST....NCE
.l.4u1o C._I 1)......,.....
~.....-*"'...to( '-OtIo.,
c-l....
6_.... .,._ r--r-i
,.n.u l.......(.J ~
10. AREA OF />fIIO.I!CT IMPACT IN._ 0{ _. ~
S...... .....)
U. EmWlTe9 IIfU1I\.
SER O'F ~H.
BIll e:FITI NG
1%. TYPE OF ....PPI..lCATlON
A-Ilow t-1l00ri..... (-"'._..u..
_._1 ~.lio..li.. n
Eft&iW .PJI""o."...;..t. ..u....
11.
p~D 'UNOIN8
1-4. CONGIUsSfONAL DISTRICTS OF:
.DO I. Al'I'UCAICf ... '1IOJrCl'
.08
c. fTATE
I. I'!D!Rl\&. S
b. Al'l'llCAIlT I
I
.00 16. ~"ViEf":~ ..."
.00 I'
.00 IL W~~:JR-r~T~JO
.DO 'ED lAM. ..-aENCY ~ 19
RECEIVE REQUU'I" IN_ C..... ,,_ UJO ~
I n. ~JECT
DURATIOH
11__
7_ -...A do"
u. TYPE or CHAHC't (F", ,.. ... ,..)
A-I._.. Dolt," ~I"" (s,....fII):
1-4__ DoIlln
C-I_.. D.m_
0-0_._ 0...11..
(~_n.li..
d. LOCAl
I. OTllU
f. TOTAl. S
:za. FEDERAL AGENCY TO
&.."" ."two- r-r-TI
""""'" "nor"J LLJ..-1
1ll. EXISTIHG 'EOERAL IDENTIFICATION NUMSER
Zl. REMARKS ....CDEO
0"" 0 No
:%.
~
.. THE
~ APPLICANT
~ CEIIIT"'.ES
:! : THAT ....
1/
i ~iRT'FY'NQ'11 I. rrrto MIl! .vKl T1lU
e ItrPlU.
.. SENT....TIVE
M. AQ~CT No\MoE
.. 10 Ill. boot ol ..., 1uI_lod,. .._ Mllol,
..ta ill thi. "...UClU..'.....'uU. IN
""', ..... CD"..t. ... douunMt .... aa...
....,' ...ho,;..", ~ .... ,_io, boeIr 01
tttt .C'Ofiuftl ...4 ttt. .DOI..... .iN .....
with .... .cu_ __ ~ 1M ......
..,.. . .0..........
b. N .~ ~ OMI Ci_l" /0-11 !WI ."",I..Ii.. _ _Inoe, pot......t .. i..
.......... "'.... .. .....,..,;... ....,.,..'...... 'I'd .11 ,......._ IN ,nacA":
N. ,...
.-.
.R--..
a&~
~. SI'''''T\l1lt
0 0
8 0
, 0
.. DATE SIQItfD
)'-~ ...~ do" .
I' 1
III
12I
(31
26- OR,"NlZATIO~ UNIT
I 17. AOIoIINIST~TIV[ O'FlCE
In. ,",pPLICA. 1'_ -- .....
TIOH
RECEIVED 19
2L rECERAL ....pPLICATION
lOENTlFICATION
!
i 29. ACOltESS
~
i
r
.
i
10. rEDEAAL OF:....NT
IOEHTI FIC" TlON
.11. ACTION TAKEN
o I. ,",WAAOED
o b. 1It/ICTiD
o c. 1b0000ltCD 1'011
AMEIlDt.tOl'T'
J2-
.. PfOElW.
~. AP"Ut.vlT
c. ST,\T(
(. LOCA~
I.O~I!
"'HDINe:
'T_ _~ .."
J.4.
IT....RT'"G
DATE 19
36-
ENDING
DATE 19
37. REMARKS
r__
...~ .."
y-~
.....
.DO D. ACTIO" DAT! ~ )9
.DO ~":. COl'CT"'l:T ,~ JIIOOITIO......L ltf'OtIIo1".
flOH (H__ o..J ....~ ..___1
s
.00
.DO
.00
.DO
AOOEO
~ 0 (. OU1!IlJlEtl
= 0.. "'TllOAAWll
I ~tRAL ACEN'OY
~5 ACTION
t.
TaTl\&.
o T.. ONo
b. '(OERA!. ACEIlCY ~'i Of"FICIAL
IN...... .... ...,w..- _.)
a. I. ..III"r .... ...... ..." ......._ ._....... ,",,,, u.""rhou.. ..,. ..-
HelICe(. II ....'" __.. II eI_ ...... ~ II ,'" I., Oil B C1rao1... A-OI.
It.... ~ "Io~ __.
--.. ..... .......... ............., ,.., ...,..'" , ,,"" ".1
I
J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:17
SECTlOM IV-REMARKS (Ple~. re/en?lU tJw prfIPCt" ,urn "11mb" /,._ Sutiorwl, IlIW Ill, il a.1'1'li.t:GlILe)
.. '\
~TANDAR[) FORM 424 PAGE 2 (1C-7~1
1
J
Office of Management and Budget Circular A-110 (7/30/76)
A-110:18
GENERAL INSTRUcnONS
This is a multi.purpose standard form. First, it will be used by applicants as a required facesheet for pre.
applications and applications submitted in accordance with Federal Management Circular 74-7. Second, it will
be used by Federal agencies to report to Clearinghouses on major actions taken on applications reviewed by
clearinghouses in accordance with OMS Circular A-95. Third. it will be used by Federal agencies to notify
States of grants-in.aid awarded in accordance with Treasury Circular 1082. Fotlrth, it may be used, on an
optional basis, as a notification of intent from applicants to clearinghouses. as an early initial notice that Federal
assistance is to be applied for (clearinghouse procedures will govern).
APPUCMIT PROCEDlinES FoR SECTlON
Applicant will complete all items in Sec:lion I. If an item is not applicable. write "NA". If additional space is needed, insert
an asterisk ...... and use the remanes section on the back of tho fonn./vI explaRlltion follows 10f' oac:h item:
Item
1. MilOt appropriate box. Pre-lIpptlcatiQn and appllca.
tion guidance is in F'MC 74-7 and Federal agency
program instructions. NotlfiooUon of intent RUid.
ance is in Circular A-95 procedures from Clear.
inghouse, I\pplicant will not use "Report of Federal
Action" box..
2&. Appllcant's own cont~ number, If dllSlred.
Zb. Oate Soction lis p",PSred.
3a. Numbel" aSlllgned by State deeringhouse. or If dele-
gated by State. by aruwido clearinghOClSlL All re-
quests to Fed ora I agencies must cont2lin this ldenti.
fier if the program is ClI:lYeM by CircuLar A-95 and
required by applicable' State/areawide deanna'
house proeedunrs. If in doubt, consult your dllllr.
in(fhouse.
3b. Dcta applicant notified of deorln8house Id~fior.
4a-4h. Legal name of appll~nt/reclplent. name of primary
orrani;cational unit ...'tlich will under1:llhe the assist-
ance activity. comp:~ address of applicant, and
name and telephone number of penson who can pn>o
vide further infonnlltion about this request..
5. Employer identification number of applicant as as.
signed by Internal Revonue Serik:e.
60. Use Catalog of Federal Domestic Assistance num-
ber assigned to prognrm under which aaistance is
requested. If mora than one prosram (e~. )oint.
funding) write "multiple.. and expLain in remar1c:s.
If unknown, cite Public Law or U.s. eocs...
6b. Pt'OtJram tlUe from Fedoral Q:talog. AbbnMate If
necessary.
7, Brief title and appropriate description of project..
For notlfi=tion of intent, continue in remenes sec.
tion if necessary to COlMl)' proper description.
S. Mostly ,,"-explanatory. "City" includes town, town.
Ship or other municipality.
9. Cheek the type(s) of assist2nce requested.. The
definitions of the tenns are:
..... Basic Grunt. /vi original request for Federal
funds. This would not include any contribution
provided under a supplemental grant.
B. Supplemental Grant. ^ request to incr=SlI a
basic grant in cer:tDin cases where the e1igibie
applicant cannot ilUPPIy the required matching
share of the !>asic Federal program (c.g.. grants
awarded by the Appalachian Regional Commis.
sion to provide the applicant a matching share).
C. Loan. Self explanatory.
13.
14&_
14b.
15.
Item
10.
O. Insunrnal. Seff expLanatory.
E. Other. Explain on ntrMnes page.
Governmental' unit where ltignlf\cant and meening.
fvI impect could be observed. List only Larrest unit
at' units alfec:ted. such as Sbrte. county. or ctty. If
enti"' unit aftec:bId. list it nrther than subunits.
Estimlltlld numbet"' of persons directty benefiting
from PfV;ea.
Use appropriate code letter. Definitions are:
..... N_. ^ submittal tor the first time tor a nIM
projGct.
B. R_I. An extension for an addftional funding/
bud8et period tor a project hllving no projected
completion data. but for which Federal support
must be","8Wed each year.
Co Revision. A modification to Protect natura or
scope which may result in fundi", change (in.
~ Of' decnsase).
O. Continuation. /vi ClXtension tor an ltc:IdltlonaJ
fundina/bucIe"It period for It pro~ the agency
initially asreed to fund tor a definite number of
yaers..
E. Ausmcntation. A nlqulrernent for additional
funds for a project previously a_rded funds in
the same funding/budget period. Project nature
and scope unchanged.
AmoUnt r"q~ed or to be contributed during ,the
first funding/budget period by each t::ontributtlr.
Valve of in-kind contributions win be 1n<:Iu.ded. II
the action is a change in dollar amount of an exist-
ing grant (a revision or augmentation). indicate
only the amount of the change. For decreases en.
close the amount in parentheses. If both basic: and
K1pp+emental amounts are included. breakout in
nmMIrXs. For multiple prceram funding. use totals
and show procnIm breakouts in remarks. Item defi.
nitions: 13a. amount requested;f'ron1 Federal Gov.
ernment: 13b. amount applicant will contribute:
13<:. amount from State, if applicant is not a State;
lSd, amount from local government, if applic:ant is
not a local government 13e, amount from any other
aoun::es. e:xptain in ",manes.
11.
12.
Seff exJ'lanBtl:lty.
The distric:t(s) ...nere most of actual work will be
accomplished. If c:lty-wide or State-wide. covering
several di~. write "city_wide" or ..State-wide."
Compkmt only for revisions (Item 12c), or sugmen-
tzrtions (item 12e).
STANOMtD FORM 424 PAGE 3 (10-75)
.
I
Office of Management and Budget Circular A-110 (7/30/76)
A-110:19
Item
16.
Approximate date project expected to befin (usually
associalt'd with estimated dale of availability of
funding).
Estimated number of months to complete project
after Fedoral lunds are available.
lIem
19.
EJclsting FederBl Identification number II this I. not
a n_ r~uestand directly relales to a prBvlous
Fedenll action. Otherwise write "NA".
17.
18.
Estimated dete preapplicatlon/appllcation will be
submitted to Federal agancy If this projoct requires
cleennshouM review. If review not required. this
date would usually be SlIme as date in Item 2b.
20.
IndiClrta Fedenll agency to which Ihls request is
addressed. Street address not required, but do use
ZIP.
21.
Check appropriate br':1I. as to whether Section IV of
form conlDins remanu and/or additional rBmarks
are attachod.
APPUCANT PROCEDURES FOR SECTION II
22b.
Ust clearlnghous81 to which submitted and Ihow
In appropriate block:! the status ot their responses.
For mOnl than three clearinghouses, continue In
remal1u sec:tlon. All writtan comment: aubmltted
by or through clearinghouses must be attached.
Name and title of authorized representative of legal
applicant.
Applicants will alwu)'$ complete Items 23a, 23b, and 2.3c. If Clearinghouse review Is required, Item Z2b must be fulll com.
plBted. An explannlion follows for each item:
Item
238.
It'trm
23b.
Self explanatory.
23c.
Solf oxplanatory.
Note:
Applicant completes only Sections I and II. Section
III is completed by Fedoral agencies.
FEDERAL AGENCY PROCEDURES FOR SECTION III
Executive department or Independent agency having
progrem admlnistnl~ion ruponslbility.
Self explanatory.
Primary o~anizatlonal unit below department level
having direct program management responsibility.
O1'lica directly monitoring the program.
Use to Identity non.award actions where Federal
grant identifi~r in item 30 Is not applicable or will
not sumce.
Complete addren ot adminlsterfng offica shown In
Itom 26.
Use to identify awa", actions Where dlnerent from
Federal application identifier In item 28.
Self explanatory. Use remartu section to amplify
Where appropriate.
Amount to be contributed durlns the first tundingi
budget period by each contributor. Value ot in. kind
contributions will be included, If the action is a
change in dollar amount of an existing grant (a revi.
sion or augmentation), indicate only the amount of
change. For decreases. enclos. the amount in pa.
rentheses. II both basic and supplemental amounts
ere included, breakcut in rBmartu. For multip~ pro.
gram funding, use totals ane show program break. '
outs in l"eITlarks. Item definitions: 32a, amount
awarded by Federal Government: 32b. amount ap-
plicant will contribute; 32c. amount from State, if
applicant is not a State; 32d, amount from local
govemme:'lt if applicant is not a Ioc:al government;
32e, amount from any other soun:ll$, explain in
remarks.
Dete detlon was taken on this roquest.
Date funds will become available.
It appllalnt.supplied information in Sections I and II needs no updating or adjustment to fit the final Federal action, the
Federel agency will complete Soction III onl)'. An explanation. for each Item follows:
Item
35.
Name and telephone no. of agency person who can
provide more infonnation regarding this assistance.
Date after which funds will no longer be available.
Check appropriate box as to wh~her Section IV of
form contains Federal remarks and/or attachment
of additional remarks.
For use with A-95 action notices only. Nama and
telephone of panion whO can assure that appropri.
ate A-95 action has been taken-If same as person
shown in Item 35, write "same". It not applicable.
write "NA".
Item
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
36.
37.
38.
Federal Agency Procedures-special considerations
,
A. Treasury Circular 1082 compliance. FHeral agency will
assure proper complBtion of Sections 1 and Ill. If SectiOtl I
is being completed by Fedenll agency, all applicable items
must be filled in. Addresses of State Information Recep.
tlon Agencies (SCIRA's) ere provided by Treuury Depart.
ment to each agency. This form replaces SF' 240, wnich
will no longer be u~,
S. OMS Circular A-95 compliance. Federal agency will as.
sure proper completion of Sections I, II, lInd III. This form
is required for notifying all reviewing clearinehouses of
major actions on all prognms reviewed under A-95.
Addresses of State and areawide clearinghouses an. pro.
vided by OMB to each lIgency. Substantive ditferences
between applicant's r~lIest and/or clearinghouse recom.
mendations, lInd the project as ',"ally awa",ed ....iII be
explained in A-95 notifications to cle::ringhouses.
C. Special note. In most. but not all Stutes. the A-95 Stat~
clearinghouse and the (TC loe:!' scrRA are the same
office. In such cases, the ~95 awnrd notice to the Sta\e
clearinghouse will fulfill the TC 1082 award notice reo
Quirement to the State SCIM. Duplicate notification
should be avoided.
STANDARD F'Of"lM 424 PAGE: 4 (10-75)
I
Office of Management and Budget Circular A.110 (7/30/76)
. ATTACHMENT N,--<:lRCU1.A1l No. A-lIO
raorERTY MANACEMENT STANnARDS
1. ThLs attachment pre:scrlbrs uniform
stl.n4uQs governlngmanasement oC prop-
erty Curnlshed by the Federal Government or
whose COIl. was chlU"ged 1.0 I. project sup-
pon.ed by a Federal grult or other Atrreement.
Federal sponsoring agencies shall require re-
Clplenl.' 1.0 observe these sl.&ndards under
gr..nts and other agreements and sllall not
Imposo additional requlremenl.5 unless ape.
clllCIlII). required by Federal law. The reCipi-
ent may Ulle 11.5 o...n property manollement
st.andards and procedures pro,vldedlt observes
the pro,'lslons ot this o.ttachment. Thill "t-
tachment also "ppllell 1.0 subreclplenl.5 as
reterred 1.0 In pamgraph 5 ot the bulc cir-
cular.
2. The Collowlng dctlnlLlons apply tor \.be
purpose at thLs attAChment:
II. Real properly..-.ti.c,,1 ,property melU1s
land, InclUding land IlnprovemcnlB, lILrUC-
tures and appurtelllU1cCS theret.o, but ex-
clUding movablo maclllnery and equipment.
b. Personal propertll.-PenlOnal propertY
or any kInd except re..1 propert)'. It may be
Langl ble-na v Ing ph )'slc..l ex LsLence. or In Lan-
glble-havlng no physical existence. such aa
paUnta, Inventions and copyrlghLs.
c. None=pcncLable pcr~ol14l prDperty.-Non-
expendable person..1 property meanll tangible
personal property ha vlng a userul lite ot
more than one ye..r and an acquisition cost
at &300 or more per unit exempt that reclp-
lellta SUbject to Cost AccounUng Sl.&ndo.rds
Boa.rd regulations may use the CASB sl.&n4-
o.rd at r.soo per unit ..nd wetul IUe at two
reo.rs. A recipient may use Ita own definition
at nonexpendable person..1 property provided
that U1e deMltlon would at least Include aU
tangible per50n.l property D.5 defined above.
d. L'=pmcLAble pC7'lIonal property.-Ezpend-
able personal property reten 1.0 all tangible
per50nal property other than nonupenclllbJe
propert).,
e. E=ellll p7'O'pertV.-Ezcess property meal1ll
property uncler U1e control ot allY Fel1eral
acency that, all l1etermlDed by tbe head
thereot, Ls no longer required tor 11.5 neeelS
or the dlscho.rge at Its rcsponslbUltles.
t. Aequi.siuon eOllt 01 purch.a.:red none.:-
peNiable psrsO'fIalpro,Hlrty.-AequLsltlon coat
ot &11. lum ot pureba.sed Donexpendable per-
SOnal property means the net Invoice ull1t
price at the property Including the coat ot
modifications, atl.a.Chmenl.5, accessories, or
aUXUlar)' appo.ratu.s necessary to mue the
property usable tor the purpose tor which It
....a.s acquired. Other cho.r~ell such as the cost
ot Installation. transportatIon. taxes. duty
or prol.eCtlve In-tranSit Insurance. shall be
lncluded.or excluded trom the unit acquJsl.
tlon cost In .ccordance with the reclplell1-'S
regular accoul!otlng practices,
g. E=empt pro,Hlrty.-E:lrempt property
means tanglblo peraonal property acquired In
whole or In 'part with Federal tuncla, alld
4tle to whleb Ls vested In the recipient with-
out, further obligation to the Federal Govern-
ment except a.s prOVided In subpo.ragraph ,6&
below. SUCh unconditional vesting ot title
wUI be pursuant to any Federal legislation
that pro"ldes the Federal sponaorlnl; ..gency
...Ith A.dequn.tea.uthorlt)..
3. .Real property.-EaCh Federal spor:50rlng
agency shall prescribe requlremenl.5 Cor re-
Cipients concernln~ the use and diSPOSition
ot real properL). acqulretl partly or wholly
under (:rnnl.s or other ngreemenu. Unless
other"'llle pro\'lded b~' .statut.c, such requlre-
:nrn:s. a.s a minimum. sllall ('O:1t:U:1 Ihe
: ~I JO"'lllb:
II, Title to real propert)' shall vest In the
reCipient aubJect to the condition thllt the
recipient sh"lIuse the real property 10r the
authorIZed purpose ot the proJect:1\s lonll aa
It Ls needed.
b. The recipient shall obtain approval by
the Federa.! ~ponlW)rln~ &j:eney tor the W'e oC
real property In other proJccl.s when tbe re-
cIpient determines that Lbe properLy Is 110
loncer needed Cor the purpose oC \.he orlllllllll
project. Use In other proJecl.5 shall be IImltcc1
to thoow: under oUler Cederally spon&Orcd proJ-
ecl.5 (I.e.. granl.ll or otller agreemenl.51 or pro-
grams that have 'purposca conalstent wltll
thOllO au thor17.ec1 for sUPl,ort by the Fecleral
sponsoring ~ency.
c. When the real property Is 110 longer
needed as provided In Il and b Ilboye, Ule
reCipient shall requCllt dlllflOlllLlon Instruc-
Lions from the Federal sponllOrlnc "r.enc)' or
Its $uecessor I"ederlll IIpon50rlnr. ",:ellC}', TIle
Jo'ederal spon!lOrlnc Agency shall observe the
Colla wing rules In the dlspoa1Uon 1n..Lruc-
Lions:
(I) The recipient may be permltl.<:d 1.0 re.
Lalll tlUe lLCt.cr It compensates the Federal
Goyernment In an amount compUl.cd by ap-
plying tbe Federal pereCllLage ot po.rtlclpa-
LIon In Ule cost or the orl~nal project 1.0 the
Calr market value ot the property.
(2) The rec1plent may be cUrectecl 1.0 ..ell
the property under guidelines proylded by
the Fecleral sponsoring "Ceney anil pay tbe
Fe:leral Government an amount computed
by a.pplylng the Jl'ecIeraJ poreCDtage ot par-
Llclpatlon In the coat or U1e orl~nal project
1.0 the procccQa trom lIaIe (..rt.cr deducting
actual and rcaaonable sclUng &Dd fix-up cx-
pen&a&. It any, from tbe aaJcs proc:ecas).
When the recipient 1lI authorl,..cd or rcqulred
t.o sell the property. proper IIaIcs proc:eclurca
m..11 be established that provide tor compeU-
Uon 1.0 tbe extent practicable &l1d result 1A
tne highest po&S1ble rctUZ'll.
(3) Tbe recipient may be d1reC1.ec1 to r.rans-
ter Utle 1.0 the property to \.be Federal 00'1'-
ernmellt provided that 10 sueb C&ICII the
recipient mall be entitled 1.0 compel1S&tlOll
c:)mpu1.Cd by applying the rcc1plcn1.'s per-
centage ot po.rtlclpatlon 111 the COIIt ot Lbe
program or project to the eurreot lair market
value ot tbe property_
4. Fed.eralv-oUJn.ecL 7LOn.czpc:Mablc pc:r1l07l4l
propcrtv.-T1tle to tedoralJ1-owned property
remains vested In lobe Fe:Ser-al Government.
Reclplellts shall a\lbmJt annually &l1 lnyell-
to"" 11lltlDg ot tederally-owne<1 property In
their custocly to the Federal spoll.8Ortng
&fency. Upon completion or Lbe o.greemCII.t
or wben the property Is no 1011ger needed.
the recipient shall report the property to
the Feder..!" sponllOrlng agellcy tor tur\.ber
aGency utilization.
It the Federal aponsorlng ageocy bas no
further need for the property, It sball be
declare:1 eltcess and reportecl 1.0 the Oeoera1
ScrvlC:es Aclm1nlstrUoll. ApproprtaLe cI LsPD"I-
tlon lnstrucUons wm be Issued 1.0 the re.
clplent att.cr compleUon 01 the Federal
agency revl~..
5. E:emJlC propcrt,.-Whell IIt&tutO"" au.
thOrlt;r eltls&6. le.c~ P.L. ~34. 42 USC.
1892) Utle 1.0 nonupendable penonal prop-
erty acqulre:l WlLb project luads. shall be
ycsLe:S In tbe reclplCII.t upon acqUisition un-
less It Is cle1.crmlned that to do 110 Is not In
furtherance ot the obJecUvcs ot the Federal
IIponllOrlng AGency. Wben tlUe Is vcste:S In
the reCipIent. the reclplCDt shall have no
other obllGalJon or accountability 1.0 the
Federal Government Cor 11.5 use or dlsposl-
Uon except RS prOVided In Ga below.
G. Other "onc:=pcndable proJlCf'tv.-When
other noneltpenclable tan~ble personal prop-
ert~' Ls ncqulred by a recIpient with project
hlnd$. title shall not be taken by the Fe:!-
rr:\1 Go..C':onmen: but IIhall ..cst In th:- ~-
elplen!. l'ubJect to the followlnl: ccmdltlons:
a. night fo trafU/er liUe.-For Items at
noncxpendnble penonal proper!.y h:lvlnc "
unit acquisitiOn cost at $1.000 or more, the
Federal sponsoring a~ency may ~erve the
right 1.0 tr"nsfer the Litle 1.0 the Federal
I
A.110:20
Government <>r 1.0 I. third party namC'd by
the jo'cderal Government ...hen ~ueh third
,.uty III oLller......e elll:tble under exllltlllg
I',",t.utes. Such reservation shall be subject to
the Collo...lnC atandarcls:
(I) The prc>pcrty shall be appropriately,
IclenUfic:.:1 In the grant or other aGreement
or otherwise made known t.o tile reCipient.
In wrltlnt;.
(2) The l"ederal spolUlOrlng "Ilenc)' ~hnll
Issue dIsposition ,Instructions within 120 eal-
eollar days arter the end or the Federal 5"1'-
port oC the project for ...hleh It wall Rcqulred.
I C the Fecler,,1 5ponllOrlng allency lalls to '55ue
dlllf>O"ltlon In:<trucLlonll ...Ithln tile 120 elll-
r.ncl"r day perlcK1. the recipient shnll IIpply
the lI....ndardl' of s\lbpllragrapl\S Gb and Gc
1\5 "pproprlal.c.
, (3) When the Federal IIponfiOrlnc allency
ellerclacs Its rlgh t 1.0 take tI tic, the perl50IIal
property ..hall be subject to !.he provisions
Cor federally-owned nonexpendable propcrty
dlllCuSlloCd In paragT..ph 4, "boye.
(4) When title Is transferred either 1.0 the
l"edcral aovenunent or 1.0 a third party ,the
provl610ns of lI\1bpU"&4:'"'pb Go (2) (b) slloull1
be followed.
11. Ux 01 othC7' tCPIvible "onapendable
property lor UJhich th.e reciplcnt ha.:r title.
(1) Tbe rcc1plent shall UN the propcrty
In Lbe project or program lor which It ...as
acquired &IS -long... needed. whether or not
the project or program continues to be sup-
ported by FC!deral runds. When no longer
needed for the orl~nal pro~t or program.
tile recipient Shall use tbe property In con-
nection with Ita other federnlly IIponsored
acUYlUes, In the follOwing order at priority:
(a) AcUvlUcs. 111 tbe tollowlng order ot
priority:
(b) Ac:tlvlUcs sponsorecl by other Federal
o.cenc1c::s.
(2) ShllTCI1 _.-Durlng tbe Ume that
nonexempt nonexpendable perftOnal proper-
ty Is held tor use on the proJcctor program
for wbleb It .... acquired, the reclplen~
sball make It avallable tor use on other proJ-
ects or programs It sueb other uae ...111 not
Int.erl'cre with the work on the projector
progratD for wblch the property wu origi-
nally aoqulred. F1nIt preterence for sucb
other- use shall be glvell tD other proJcct..s or
P"'RT"ma sponsorecl hy Ule Federal agency
!.h.' D.n&nced Lbe pro~y: llCcond prefer-
CDGe shall be glyell to proJecta or programs
ICpOnsored by other Federal "gencles. It the
property Ls owned by the Pederal Govern-'
ment. uae on oUlcr acUvltles 1101. sponsored
by the P'cderal Gogernment shall be per-
missible It authorized by tbe Federal accncy.
User charges should be col1!lldered 11 appro-
prla Le. -
eo Di:rpo.riCion 01 oCher 7LO"c=pendable
,,",perly.-When the recipient no longer
neccla the pro~y as pro91ded In 6b above.
l.hc property may be WI8C!. lor other .etl-,I-
ties In accord&l1Ge with the tollOWlllg stand-
arcls:
(1) Nonc:pcnd4ble ","opcrty wilh G unit
cu:qui.riUon cort 01 1c::r1l Ul4n JI,OOO.-The re-
cipient may use the property tor other activi-
ties wtthout relmbuncment to the Fedel'l\1
Government or sell the property and re-
t.aln the proceccls.
(2) NonCZJ)C7ld4ble pCO"lIonal 1"'O-pcrly with
G u"it acq,ui.rilion eOllt 01 .11.000 or morc.-
The recipient may retain the property for
other uses proVided that compensatiOn Is
macle to Lbe orlgt nal Federal sponsor I ng
&gency or 1l.S successor. The amount of com-
penllAUon IIhall be cnmpul.ed b~' "l'pl~'ln[:
the perecntAgc at J"co<1C'nll pl\Z'1IC'11'!\:I0n In
the COlIt of the orl~lnal proJcct or probrnm to
the current Calr market yalue ot the property,
If the recipient has no need for the proper!.y
"nd tile property hna Curther U5e value. the
recIpient sh..1I re<l\lcst dISpo..lt.on InstruC-
tions from tbe orl~nnl spoMorlng agenc)'.
I
Office of Management and Budget Circular A-nO (7/30/76)
Tbe l"ede",1 Iponsorlng llgency shall d~ter-
mine ....hether the property can be u!'ed to
meet the llE:enC)". requlremenl.S. rr no re-
quirement exIsts within that llgenC)'. the
ayaUabl11ty ot the property shall be report-
ed l.O the Oeneral ServIces AdmInistratIon
by t.he Federal agenr.y to determine ....hether ..
requIrement lor the property exists In othe.r
Federal I\gencICll. "le Federal sponsOrlnl:
agency SIUlll Issue 1n.1tr\l,Ctlolls to the recIpi-
ent no IMer than 120 days after the reclpl-
ent.'1 requC5t !lnd the lollow,ng procedures
shall govern:
(a) rr so Instructed Or 11 dlsposltlon In-
structlona are not I"!lued ....Ithln 120 calen-
al\r allv.. I\fter the reCIpient'. request. the
reclplei,t shall ..ell the propert). IInd reim-
burse the Federlll aponsorlng agency an
I\mount computed by IIppl)'ln!: 1.0 the ules
proceeds the percentage 01 hderal 'partlcl-
paLlon In the COlt ot the origInal pr9ject or
progrl\m. However, the recipient sha.1I be
permitted to deduct and reLAln Irom the !"ed-
era.1 share II 00 or ten percent 01 the pro-
ceeds, wlUchever I. greaLer. lor the reCIpient"
selltng and handling cxpenllCS.
(b) 11 the recipient IS Instructed to shIp
the property elsewhere. the recIpient shall
be reimbursed by the benentlng Federal
agency wIth an amount whIch Is computed
by applyIng the percent.age of the recIpIent's
partlclpatlon In the cost. 01 the orIgInal gmnt
project or program to t.ne current laIr market.
,,&!ue 01 the propert)., plus any rCASoDable
shippIng or lnter1m storage COll.S Incured.
(C) It the recIpient Is Instruc:tecl l.O o!.ber.
wlM dISpose ot the property. the recipient.
snail be reImbursed by the Federal sponsor-
Ing agency lor sucn costa IncurTed In Its
dL1poaltloD.
d. Property ma7lapemc7lt daMuu lor
none:'J'e7lGablc "...op~rty.-The reciplent.'a
property mllonagemen~ standarda tor nones-
penCl&ble personal propeny &1'Ial1lDcludo !.be
1011 Owing procedu.ral requlremenl.S:
(1) Propert.y recorda shall be malntalnec1
&CCUT&telY .nd shlLlllnclude:
(al A deacr1pt.IOn of the property.
(b) Manutacturer's serial number. moael
number, FeaeMLI stock number, national
stock number. or otller IClentlftcat.lon num-
ber.
(c) Source ot tlle property, InclucHng
gr.nt. or,o!.ber .greement. number.
(a) Whether tI tIe vesta In the recIpient or
the ~ederal Govvnment..
'(e) AcqUlslt.loD date (or dllte recelvec1. If
the property "'&8 lurnl&hed '0,. the Federal
Oovunltlentl anc1 cost.
(f) Percentage (&t the end of the bUdget.
,.a&r) of FeCleral p..rtlcl pa tlon In the con of
the project or progrJUn lor whlCl1 tlle prop-
erty "'... acqUIred. (Not &ppllcabl. to prop-
8f"ty turnlshea by \he Yederal Government.)
(g) Loca.tlon. use and condItion ot the
property and !.be CI&Le the InfDrm&tlon was
report..c1.
(h) UnIt. acqulllltlon coat.
(I) Ultlmat.e dl.posltlOIl date.. IncludIng
cI&Le ot dlsposlIol and SAles pric. or the methoc1
used to deLermlne current. t..lr m.rket Y.lue
....here . ,reCipient compensA.tu the Federal
sponlorlng agency tor Ita share
(2) Proper~,. o....ned by the Fecler.l 00"-
ernment ml.lSl be marked to IndIcate Ted-
e"aJ ownership.
(3) A physIcal Inventory 01 property shall
be tllken A.ne:: the resulu reconciled wIth the
propert.)' ,records &t least once every two
yellrs, An)' dl/l'erencu between quantitIes de-
termined by the phYSical Inspectton :Lnd
thQse sho",'n In the accounting records sh..1I
be Investlgat.ed l.O determine tlle CA.uses 01
the dl/l'erence, The recipIent sh&lI. In eonnec-
tlon "'Ith the I",'enl.or)', yerll)' the exIstence.
current utIliZatIon. and contInued need tor
tna propert.y.
(., A control .y..t.m shall ~ In e:Tect to
In.ure adl><lul\te IBto;;uBrds to pre~.nt l~,
O&rn&ge. or theft of the property, Any 10M,
dllmage. or theft of nont'Xpenaable proptrty
shllll be InVClltlgatea And fully documented:
It the property w&& owned by the Tederal
Oovernment, the r~rlplent .hall promptly no-
tify the Federal sp.,naorlng ",ency.
(S) Adequately mlltnt_",,"ce procedure.
shl\1l be Implemented to keep the property
In good condItion.
(6) Where the recIpIent Is A.ut.hort:r.ec1 or
reqUIred l.O sell the property, proper !lilies
procedurea shllll be establlsned whiCh ",ould
provide tor cOlnpetltlon to the extent pracu-
cllble and reslllt In the highest possIble re-
~urn.
7. I:zpendable personal propcrtV,-T1tle to
expendable person..1 property shllll ..st In
the recIpient upon acquisition. It there'll a
reslduaJ Inyentory 01 such property exceedIng
11.000 In tOLAI aggregllte 1..lr market Ylllue,
upon termlnllotlon or completIon ot the grant
or other "greemen~. and tne property Is not
needed lor any Other lederally sponsored
projector program, the recIpient .nlloll retain
the property lor l1.'te on nonlederally spon-
soreel act.lvltles. or sell It. but mUllt. In elLlter
. case. compensat.e the Federal Ooyernment
tor Ita ahare. The amount 01 compenallotlot\
shall be computed In the same manner ...
nonexpendable personl\l propert.)..
8. fntanv1ble property.
a. Invention, ancL pcUC7lts.-It any pro"ram
proc1ucea patentable Items. plltent. rlght.1.
proceases. or Inventions. In t.ne coune ot
worl!: sponaored by t.he Federal Qo...ernment,
sucb faC; shall be promptly and lull,. report-
ed to the Federal sponsorIng agency. Unl_
there Ia a prior Agreement. bet.'een the re-
CipIent. and t.he Federal lponaerlng agency
Oil dlSposlt.lon of such Itema. Lbe rederlll
sponsoring agenc)' shall c1etermlne whether
prot.ecUOD on the InvenUon or dlaCOVery sh,,1I
be eought.. The Fedeml sponsoring IIogencT
..,111 alao determIne how the rlghtA In \.he In.
ventlon or dlSconry-Includlng rightA under
any patent. lMued !.bereon_hall be IIol1oc..t.e<l
and &CImlnlat.ered In orOer to prot.ect. the pub-
lic Int..rest. COt:llllSt..nt wlt.h "Government
Pat.ent 'Policy.. (PresldeDt.'s Memorandum
for Heads 01 Execut.lve Departments and
AgeDclea. August. 23. UI71. and et.&t.ement or
Govemment. Pat.ent POlicy .. prlnt.el;l In 311
P.R. 111889).
b. COPJlrtVh.U.-Except .. oUle",," pro-
vlde<l In the t.erms and conC1It.lons ot t.be
agreemel1t. the aut.hor cw the recIpIent. oTf:an-
lutlOn Ia free to copyrlftht any booka. pub-
IIcatlona. or oLber COp~':'I,htable m..~rla.1a
deyeloped In !.be COUl'lle of or under & PeeS-
eral agreement. but U'le Pederal sponsorIng
agency shall reaeMe .. TOyaJty-lree. nonell.-
clWllye and Irreyocable right to reproduce,
publISh. or o!.berwlSe Wle, and \.0 .ul.horl..,
othe1'l t.o 'WIe. \.he worlt lor Goyernment pur-
ponll.
ATT...eHNlCKT O.--czaCVLAa No. A-UO
rtlOCVllaNWJfT lITAJfIl....OS
1. Th\ll ..tt.achment proyldes I\andarcla lor
uae by ree:plenta In eatabllehlnc proc:edurea
lor the procurement. of auppllec. equIpment.
COl'.stTuct.lon and o!.ber aerylc" wIth PederaJ
lunds. These st.and&rd. &re IW'nlahed to en-
sure that auc.l:l matena~ and servlcell ..re ob-
tained In lion eltectlve manner ..nd In com-
pltance wll.h the proylalolUS ot applicable red.
er..1 law and ell.ecuClye orden. No ..ddltlon..1
procuremenl. standards or requlrementa shall
be Imposed by the Feder..1 spOnsoring agen-
Cl" \1pon reelplenta unless speclnc..lly re-
qUired by Teder,,1 statute or Cllecutlye ordel'll,
2. ne standards con~alned In t.hls A.ttacll-
ment dO Dot relieve the reCIpient 01 t.he con-
tract.UIloI responsibilities ulslng under Ita
contrac&<!;, The recIpient 11 !.be reapon=.1ble I\U.
thorlt'!'. without reCOUMle l.O the l"eoeral spnn-
sorlnr.' lLl;ency regardIng the settlement ..nd
."Ust"cLlon of ,,11 contrILctual and admlnla-
J
A-110:21
~r.Uu lsau.. artllng out of p",'curemenl.S
entered Into, In .upport 01 II @:ra:lt or other
a!:reement, Thl. Incl_oe. disputes, clalm.,.
prot'~1A 01 award. O()'\)r... e"aIUAt10n or othtr
matters 01 a contractual nature, }.tRtters eon-
c.rnln.. Ylolntlon of Ill'" are tn be rderred to
s\lch local. State or Tederal authorIty.... may
have proper ]UrIedIc:Uon. .
3. ReclplentA mar \We Ihelr own procure-
Ment policIes and procedur"., no..'cver, all re-
elplenu ahall adhere to HI' s~nndards aet
lorth In par"f:rllphl :I and ~.
a. The rKlplenl shlloll mlllntaln a COde or
standard., of conduct that .hall I:oyern the
performance 01 IW omeera, employt'Q or
flr,ents enl:"ced In the awarding MId fldmln-
latrl\tlon of contr..ets ".ll\g redcrlll fundll,
No employee. orneer or &gent shnll pnrtlclpate
In the selection. Aw..rd or ..dmlnlstratlon of
a contract In whIch Federlll funOS Are uaed,
where, 10 hll knOWledge, he or his Immedlllte
l..mlly, partnen, or organlzl\tlOn In which he
or hIs ImmedIate lamlly or partner hAll a
nnlln~lal Inlereat or with ....hom he 1ft nego-
tlA.Ung or hl\& IIny .rrangement concerning
pr01pf'CLlYe .mpIO)'ment. The reclplenl.S' 01-
neers. employees or ..gents shall neither solic-
It nor .eee"t rra tlll tiel , lavors or anything
01 monetary VAlue tram eontrllctors or poten-
tIal cont.ractOrs. Such .l.andn.rda shall provide
tor dISCiplinary actIons to be IIpplled lor vlo-
Illtlons of I\lCh. SLAndarels by the reclplentA'
omeers, employeClS or a.gen~.
b. All procurement \ranaactlona shlLll be
conducted In . mClnn~ \0 pro"lde. to the
'maximum extent. pract.1cllol, open anc1 free
competitIon. The recipIent shOUld be 101 en
to ~nlzatlona.l CODmcta ot Int.erest or non-
oomp.tll:l..e practices among contrACtors
thllot may ~cnct or ellm.t""te compe~lt.Jon
or OllheMrl&e restra.l" wllde. In order to en-
sure objKtI..e contractor perlormance .nd
eliminate unfair eoonpecltl"e adv"nta(!e, con-
t.rncllOrll that. develop or Gralt 5peclnCAt.l0~,'
reqU1rernen~. _t.emenlll ot ..orll:. In"'lta-
UOM lor blda ancl/or requests tor propoaaJa
llhoulc1 be excludecl lrom c:.cxnl'Ctlng lor fuc-h
procW'ementa. Awa~ IIb61l be made to the
bt.dd~/oaercw ..hose blc1/olTer U rCll590natvc
to th. 'sellclt.at40n and " 1tlOSt. DC11l'a.nta<<eoua
to t.be recl;nent, )X'lce and. ot.h~ lactol"& con-
stclerec1. Sollclt&t.Iolu r.b&1I clearly set forth
aU requ1rements Ul4t ~a bldner/oaen:lr muat
luum In onter tor hie ~/oaer to be e_lu-
.ted by IIbe reclplen~. Any r.nd aJl bld.3/o/l"ers
may be r.jaoMd when It. Ia In tb.e reelptent.'s
In~r..t to do se.
c. All reclpl..ntA anali eat&bllllh proc=e-
ment prOC'eOurft t.b6t PTovk1, tor. at a tnID-
Imum. the 101l0"'1~ P'f:OCCOurwTequlrementa.
(1) Pl-opOaed pr~ent actlona shall
tollow a proe.clure to ....W'e the .YOIdllonce
of purdlulng unn-r or ltupllcatln
ltem&. Wbere &ppropne.... lion IIonal!,,1oa shan
be rn.cM of leaac and pUf'ch&.M, lIol~nath'ea
110 a..krmlne whM:b wouJd be the moat
.cononUoal. pnc\~ ~ment.
(21 6ollcll&\Ions lor !,ooOs and 5eM'lcn
.hall ~ be.ae<l upon . clcal' .nc1 accurate
a.,.c;rtptlOn of llhe \edt..tc:al requ1rem.cnLs
ler \he _1<<1.1. prochoct or Mn'1cc to be
procured, Such. d-'Pt40n shILl I not. In
cQft\98t1tlve pf'Oeur.m,",u. con\aln IM\Ures
WhiCh unduly r.\rtet. com.peUtlon. "Br.nd
..a.me or .qual" dascrl:p\I<ln.a may be u.ed
loll . me..... l.O Genne the per1orme.noo or
othel' ..1I."t ~.qulrClft'l<<nta 01 a prOCW'em.nl.
..nd wben eo \1-.4 the speclnC leatures e>: t.lle
naml'd bl"&nd ...Illc.h ",\>st De mel by bldders/
of!er:>rs .h...1 De cle&Z'IT ""caned.
(3) Poslthe .!Toru ..hall M mAde by the
reClplenl& to utilize sman bUlllneM A....d mJ-
norltv-owne<l buslneu .ources of supolle.
and ;ervlee.. Such elTortl should ILl I c>.... theM
sources the maximum 1.....lble oppol"tunlt)"
to eOPftpeloe lor contrac\a utlltJ;lng hc1erlLl
lun6&,
(4) The t;rpe 0: proeurtnF: In.atnlm.nts
u.t'd, .,~'. I\xed prIce OOn\ra.c:t:" _t rolm-
I
I
Office of Management and Budget Circular A-110 (7/30/76)
buna.ble con Lra.t",t.s. purch..se orders. In~n-
u_ eon trnct..,. sh&ll be deLernuned br Ule
rll'C1p1enL buL must be l\.p~'prlatc for the
l'-.r:t.toull\r procurOlTlent Alld for prnnlOtllIG
thee best InLCrlJlGt of th" pro(!'rl\m II1\'ol\'r.d,
n.c "cosL-plw-lL-pen::enLal;e-oI-cost" melJ1-
oel: 01 conLrl\oCLlng 5111\11 not be usea,
(,5) Q)nLro.et.... sh,,1 be mnde onl)' WIth re-
:spGmSlble conLrl\Ct.o~ who PCXlSQti6 Lhe po-
t.=~nl\1 Ablllt.y t.o perform SUCCC.vlfully
UJlIIllIer the Lema ~nd condlt.lons of A pro.
~ procuremenL, Conllldern.Llon 5111\11 be
~~ too such mALt.ers 8., cont.mct.Or Int.egTlty,
I"eOOn1 of past perfOr/TUU1Ce, nnnnCln.l And
technlcnJ rcsourc~ or ~O'l.ilblllt). t.o oU1er
M'CeSSAl'y reSOUTC".es.
('61 )Ill proposed solt' lIOurce COlltrl1CU or
v.."tlfte ollly one hId or proposl\l IS rC'Ccl\'ed
l!n .h,loII t.he lLf::~rq:nte cltJ'lcndlLure lJ ele-
r-kG In exceed ,.s.lloo shull be subject t.o
prt.m' ApprOYlLl ILL the dll'CreU<'ln of the Ped-
eral sponsorln~ "Gellcy,
(.71 Some form of price 'or coot IUllLl\"S1S
smllll\WLcI be mlLde In connection with e;er)'
l1=oc:urement n.clJOII. f'Tlct' lLnalysl& mal' be
lIlCCClJa'l.pltshed In ,'n.rloua WlL~'.\. InCludln!: OlC
c:om;l&:'lson of price qUOIAUollll submitted.
IJ'IIS1"Itct. prices lU1a similAr Incltela. to!:eU1er
"'1'tII\; cUsonunu. C<1l\t AN\.IyslS Is the re"lew
ltlKlt evnlU:ALlon ot CAC.h elemenL at c~ to
dleta:n1nc rOllSOnn.bJencm, alloca.blllt)' ana
a.IiIb-.bUI ty.
(cItt, ProcuT'ement recorc1s &nd nics for pur-
c:l!talsts In eX'C05S of ~10.000 Mall Includc U1e
tol:lcnl':lng;
(A) 8a&ls tor conl.r&ctor selecLlon;
ftl-), JU5tl.o.catlon for lack of cOmpelJtlon
~ com~t1tlve bids or olIel"ll an not.
ClllIU:.o:teC1;
(cT' BwIs tor awlll'd CClIt. or price.
0'.1' A s)'Stem tor contTact. &CUnJn1strAt.lon
UIalt be mAl n tIU n e<1 t.o eMU re con l.Tactor
c:cmIGJnnance wltl:t ternu, conditions and
8JlIedftCSt.lons 0: the coat~t. and to eMure
sOeq-tA; and t.lmely tolloW\1;l at LI! pur-
CbsK$.
c. The recLplent shall Include. In addltlon
till' provisions' t.O define a sound AnCl complete
. ag:-ecnent, the tollowlng proVUIOlll5 In all
CGn.t:'act.s. These pro,'lsloM shall Also be ap~
FIle<1 to su boon trn.ctll.
&. Contrn.ct.s In excess of 110,000 sh&ll con.
t.aUl cont.rACtual pro\"l.slOns o.r COnaltlOlu
that. wtll ~llo'" tor II4nl1nlGtnttJve, con:rac-
w'" OT legal romccIJes In lnStAncC$ In "OUlctl
concr.ctors VIolate or brel\Ch contTa.c:t tenns
and provide for such reznedlal actlOIlll .,;
mar be approprla.Le.
b. All contrnel.a In excesa at 1010,000 shl\1I
am\1lLln Sult.ll.ble pro"\Slons tor Le:-mJnr.tlon
br ~ rectplent. lneluCl.lng U1e mann~ b,'
which lermJnatlon \\'11I be etTect.cd and U1e:
ba.s1S tOT settlement. In Roddlt.lon. sue." con.
~t.s shAll describe condlt.lollll uncler "'"hlch
A-110:22
the ooni.ract mA)' be tem,lnl\ted for de'fa\llt LIClrL' (29 CFR. 1'art 5). Undn .'ecLlon 103
lU "'eU as conal lions where Ule contrhCt nmy of Lhe Act, "I\ch conLrl\ctor sh:\11 bc re-
l><: tt'rrnlnaLed been.\I~e 01 olr<:lllllSt..nc....!>e- '1'.1....11 to """'\l\lte tll" wl\!:e~ o( e,.err Ille.
rond the cvntrol ot U1e conlZac\Or. chl\llle alld II\!Juru Oil thc ba"ls ot 1\ stanctl\ra
C. In all contracU for con.'tnleUon or fA- "'''rlt d..~. of Po IIn\l'" ..nCl a "tl\lll1lLrd work
cUlty lmp1'O"emcnl A""Arded fM more UlAn wet'k of 40 hOUTS, Work In exct',Ss o( lhe
$100,000. recipients shAll oil6erYe tJle bolld- n~ndArrl lIo'orkdAl' or workwer.k I:; perlllls.~lblc
Ing requlremellts pl'ovtded In ALlA4dllnen~ lJ "Tn,'tued tha.t the "'orker Is compensMcd At 1\
to U111i circular. rAt.c of not less UllLn' I \/. tUlles Ule bASiC
d, All contrllCtR awarded by reclplellt.... Alld rMe of p"r for ..II hours ""oO;cd in cxcess
1J1I.lr oont.mcl.Ors or 5ub~nl.ecs having a III 8 hours In I\n)' CAlendar dl\)' or ~O hUUT5
VAlue of more than $10.000, Shl\ll con....." R In Lhe work "'celt." Section 107 ot the )lct IS
provision requlrulg oompllAnce "1Lh Execu- RppllclLble t.O ron.,trucllon work IUla prOvIdes
tlve Order 11246. entltle<1 "Equal F.lnJ'loy- that no Il\borer or mechanic ShlLlI bl: rCCfurred
menL Opportuillt).... 1\5 amel,ded b)' ExecuLlve t.o work III surrounalncs or under work IllS
Order 11375. lLnd lLS supplemented In Depart- "nnultlons ".lIleh !\Ie ul1:;anllAr)', ha7~"lrdOl'"
IT'''lIt of LlLbor regulatlOlls (41 crn, I'IU"t 60). nr dlLl1l:rrou5 to his henllll anCllll\/Cly I\.o; d(',
e, All cCIIltrlLcts ILIld suh~rAnts In exccs., of 1('rmlllrc1 unller constructIon salet~. I\lId
l>2.000 for conatrucLlon or repAir Awarded hy hcnlth stl\lIdard:; I'ro01ull:l\t(.'(1 b~' the Secrr-
recipients And subreclplen'l.K "hAil IlIclude R tary of LAhur. These rel1uiremrnl.:; 110 'lot
provI"lon lor cOlnplll\nCe with the CopelAnd RI'III)' t.o Llle! purChll.Ses ut surpllrs ur mI\Lt'-
"MltI-Klck aack"Act. (18 U.:i.C. 874) AS rinls tIT lIrtlr:les Ordlnnrlly lLVI.lll\ble Oil tile
supplenlent.cd In DeplLrLlnent of LAbor opell m!\lKel, or contracts tor t"ulsportlLLlon
regulatIons (29 crR, 1'Rrt 3). ThIS Act pro- or tran"ml!-"on of Int,rllll."Cnce,
"Icles that each contrlLct.or or subgrallLee h. C<>ntrAct..~ or I\[&ecment..o;, the prlllelpl\l
ShAll be prOhibited from IndUcing. by nny JlUq'o.... or, ",.lIlch 1., t.o creat.c. de"elop or In\-
means, any person employed In the const.ruc- prove I'rod\lcts. procer~<;Cl\ or llletIlO<ls: or (or
t.lon, completion. or repair of public work. l.o exploration Int.o lIelds that direct) I' concern
give up any part. of ~he compensation l.o public health. safety- or welfnre: or contrllCI.S
which he IS otherwise entlt.led. ThC,Fcctptent. In the fleld of selence or technolog)' III WhiCh
shall report 1\.11 suspected 01' reportec1., v-tot...., there hns been little ~;I:nlficDnt experIence
tlons t.o the FederAl sponsoring ogenc}". \ out.."de at work funded b)' Fed el'll I lLo;sl:;t-
r. When reqUIred b}" the FeclcrLl proframl Anee. l\hall contAin" noLlce 1.0 tile effect ,thnt
legislation, all construct.lon con t,l'actsl mntt.crs reCRrdlnc rIghts to Inventions "nd
...,..orded b). th~ recllllent.s and subrecLplents ,.mnterllLls generAled under Llle contmct or
ot more than t.2,OOO shall Include a Pfovlslon I I\greemenL Are l\ubject l.o the regulALlon" Is-
for cornpl\ance ,,'IU1 U1e DaVIS-Bacon Act (iO " l\ued by the P'edernl "ponsorlnl: "gency I\nd
U.S.C, 276a, to a-7) and as supplcmellOlAld b}",the recipient. TIlc cOIILrnctor IIhaU be Ad-
J')epArLment ot Labor rerulaUOIlll (29 cm, v.-"ed All to .the ~urce of lICdltlonal Informa-
Pnrt :i). Under this Act contractors sha~1 be Ion reglU'd.ng thesc nlAtt.crs.
required to pay. ",'a(C$,.to laborers and me- I. All ncgotlat.cd contrl1014 (except thos.e
chanlc:s aLa rate 'not leSll than the mini at $10.000 or less) I\,,'ardecl by reclplent.s
.,..ages speclned In a wage aet.crmlnauon macle "hAil InclUde A provision to toe etlect thAt
by 'the Secreta" or Labor; In &cIdlclon, COD- Lhe recipIent, the FcclcroJ spon.'\Or\ns agency.
uact01'll shall ~ required to pal' wages not the Comptroller ~neral or the United StaLes.
less than onca " wee It., The reCipient shall or ..ny of olJlelr dilly aut.horl,..cc represrmtll-
place a copy 01 the current prevailing wase LI\"'cs. shR11 hAve accC'\S to anor books. docu-
determlnatlon Issued bv the Department. at menu. papers And records Of the contrl\ct.or
!..Abor In each soliCitation And the award which lU'e dlrec:t.lr pertinent to a speclnc pro.
at a cont.ract shall be condl.tloned upon Lbe r;rnm for the purpose of making Rudlt.s.
acceptance 01 the ware determInation. The eXAmlnl\tlons. ellCl!rpts and trlLnscrlpUons.
recipient shall report Lll suspected or re- J, Contracts and sub~an'ts of amounts In
ported vlolatlollll to the Federal sponsorlag excess 0: $100.000 shall contain a pro"lSloD
agency. that requires the rec:lplent. to Agree to com-
1:. Where Applicable, all contracts awarded plr "'I.th all AppliCAble stancluc1s, orders or
br recipients In excess ot t.2.000 101' constrUe- lCItulA.lons Issued pursuAn t to the Cleor A:r
t10n cOMracts and In ncon 0: r.:!.500 for Act of :1170 (42 U.S.C. 1857 et sr.q,) "nd the
other contract.s that In\"'ol"e the emplo,'ment FederAl W",tcr Polhllton Ctlntr,..1 .'1ct (:l3
of mechanIcs Dr laborers. shall InclUde a pro- U.s.C, 1251 et seq,) ns Amended, \'Iolatlonll
VISion for compliance ,,'Ith sections 103 "nd "h..1I be repon.cc1 t.O the FederAl SP9lUortn;;
l07 of the Contract Work Hours aod Safety Beency and the RC/i:lonal 6)mcc ot the 1;:0-
Standards Act /40 U.s.C. 3::i-330) 80S sup- ,.tronment,,1 Protection Agener,
plemented by Oepartmen.t 0: Labor rerula- I F'R Ooc.76-21904 FIled 7-29-76; 8 :45 arill
I
APPENDIX H
OHB
Circular A-122
-I
..
I
Office of Management and Budget Circular A-122 (6/27/80)
OFf'lCE OF MAHAGEMENT AND
BUDGET
Circulaf" A~122. "Cost Principles for
Nonprofit Organizations"
AGEHCY:Ofnce of Managcmenland
nudget.
ACTION: Final Policy.
June :7. 1HOO
To The Heads of Executive
Departmer.ts and Establishments
Subje~l: Cost principles for nonprofit
organizations.
1. Purpose. This Circular esllluli:;hell
principlils for determining costs oC
~rants. conlrH::ts and other agrr.ementll
with nonprofit organizations. 11 aoes nol
apply 10 colleges and universities which
lire covered bv Cir~ular A-Zr. Sin Ie.
local. aud fe'd;'rnlly :'ccognlzed Indian
tl'ibal governments which are covered
by Circular 74-4: or hos;;itals. The
principles are designed to provide that
the Federal Government Lear its fair
shnre of costs exceot where restricted or
prohibited by law. The principles do not
attempt loprescribe~the extent oC cost
sharing or matching on'8rants. contracts,
or othe: agreemel~ts. However. such cost
sharing or matching shall nol be
accomplished through arbilrary
limitations on individual cost elements
by Feder:ll agencies. Provision [er profit
or other increment above cost is outsid.,
the scope oC this Circular.
2. Sl:perse$sion. This Circular
~lIpersedes cost principlilS issued by
individual agencie5 for non'profit .
organization.
3. Applicability. a. These principles
shall be used by all ,Federal aRcncies in
determining the ,costs of work periormed
by nonprofit organizations under grnnts.
cooperative al;reements. cost
reimbur::ement contracts. and other
contracts in which costs are used in
pricing. administration. or se'ttip-ment.
All of these instruments are nercafler
referred to as awards. The principles do
not apply to awards under which an
ol'ganization is not required 10 account
to the Govemment Cor actual costs
incurred.
L. All cost reimbursement subuwards
(subgronts. subcontracts. etc.) are
subi~Cl to those Federal cost principles
applicable to the particular organization
concerned. Thus; if a subaward is to a
nonprofit orgllnization. this Circular
'shall apply: if asubaward is to a
commercial organization. the cost
principles applicable to commercial
ccncernsshall apply: if a subaward is to
II college or unil'ersity. Circular A-<:1
~hal1 Rri1]\,: if 11 ~\lbilw<!rd i~ In 11 StaIr..
\oclll:or Cede"81IY'reod~i.zed Ind.lani
tribal government. Circular 7~ sb.ill
apply.
4. Definitions. a. "Nollprofit
organization" mean.s any corporation.
trust. nsociation. cooperative. or other
organization whit:h (1) i.. operated,
primarily'for scientific. educational
service. charitable. or similar purposes
in the public interest: (Z) is not
organized primarily for profit: and (3)
uses its net proceeds. to maintain.
Imp/'ove. and/or expand its operations.
For this purpose. the term "nonprofit
organization" excludes (il colleges and
universities: (ii) hospitals: (iii) Stste.
local. and Cederally recognized Indian
tribal governments: and (iv) those
nonprofit organizations which arc .
e:'Ccluued Crom coverage oC this Circular
in accordance with pllragroph 5 below.
b. "'Prior approval" means secu.-ing
the awarding 8ger.cy's permission in
advance lo-incur cost Cor those items
thai are de:!ignatcd as requiring prior
approval br the Circular. Generally this
permission will be in writing. Where un
item of cost ,,'quiring prior approval is
speciiied in the budget of an ,award.
app/'oval oC the budsct constitutes
approval of thai cost.
5. Exclusioll of some nonprofit
organizations. Some nonprofit
organizations. because of their size and
nature of operations. can be considered
to be similar to commercia} concerns Io:,
purpose of applicability of tost
principles. Such nonprofit organizations
shall operate under Federal cosl
principles applicable to commercial
concerns. A listing of these
organizations is coD.Qined.in,
Allachment C. Other organizations may
be added from time to time.
6. Responsibilities. A8encies
responsible for administeriag programs
that involve awards to nonprofit
organizations sball implement the
provision. of this Circular. Upon
request. implementing instruction shall
be fW'Diabed to the Office of
Management lI.ld BudgeL Agencies shall
designate a liaison ofCiciallo serve as
the agenc)' representative on mailers
relating to the implementation of this
Circular. The name and title of such
representative shall be Curnished to tbe
Office of Management aDd Budset
within 30 davs of the date of this
Circular. .
7. AttDchment.s. The principles and
related policy guides are set forth in Ule
[ollowing Attachments:
Allachment A---Gi!neral Principles
Attachment B-Sclected Items of Cost
Allaclunent C-NoDprofil
Organi:zstioD3 Not Subject lP This
Circular .
.1
A-122:1
8. Requests for exceptiollS, Tbe OUice
of Management aDd Budget ma}' grant
exceplions lo the requirements of this
Circular when permissible under
existing law. However. in the interest of
achieving maximum unifonl1it}..
exceptions will be pennilled only in
highl~' unusual circumstances.
9. Elfectil'e Dale. The Ilrovisionll oC
this Circular are effective immediatel\'.
Implementation shall be phased in by'
incorporating the provisions into new
a wards mode after the start of the ,
organization's next fiscal year. For
existi~ awards the new principles may
be applied if an organization and the
cognizant Federal agency agree. Earlier
imI1lemenIQlion. or a deiay in
implemeotation of individual JJ/"I7ris\allS
is also permitted by mutual agreement
between an' organization and the
cognizanl Federal agency.
10. Inquiries. FurUler information
concerning this Circular may be
obtained by conlacting the Financial
Management Branch. Budget Review
Division. Office of Management and
Budget. Washington. D.C. 20503.
telephone (ZOZ) 395-4773. -
)llmes T. Mcintyre. Jr..
Director.
[Circular No. A-1:!2j
Allllchmenl A
General Principles
Table of Contents
A. Basic Considerations
1. Composition of tolal collte
2. Facton aHecting allowabilily of costs
3. Reasonable costs
4. Allocable costs
5. Applicable credits
o. Advance understandings
B. Direcl COSIS
C. Indirect Costs. ...
D. Allocation oC Indirect Cosls and
Determinalion oC Indirecl Cosl Rales
1. Genp.ral
2. SimplWed allocalion method
3. Mulliple llllocation base metbod
4. Direct allocation method
5. Special indirect c:os\rllles
E. Negotiation and Approval oC Indirect Cost
Rates
1. Definitions
2. Negotiations and llppro\"al of rates
[Circulllr No. A--:'Z2]
Allachmeal A
Gec:eral rriDcipl~s
A. Basic ConsideratiollS.
1. Composition o[.ICltol costs, The lotal cost
of an award is the ~um DC Ihe aUowable
direcl and lIlIocable indirc:cl COsIs less any
applicable creuits.
2. Foclors o,(fcctins cllowobility of r;Clsts,
I
Office of Management and Budget Circular A-122 (6/27/80)
To be allowable under an award, costs ITtVliI
meetlhe following g~neral criteria:
a. Be relulonable Cor Ihe performance of the
award and be aUocable thereto under these
principles.
b. Conform 10 ao)'limitations or exclu.ion.
sel Corlh in theae principles or in Ihe aWlu"li
81 10 l)"pc. or amounl 01 cos1.uenu.
c. Be coilsisle{lt wj1h policics and
procedures Ihot apply uniformly 10 both
federaJl)' financed and olher activities of the
or[lo nizalion.
d. Be accorded consistelll trcalment.
e. Dc dClermined in accordance with
generally accepled accounting principles.
I. Nolbe includcd as a cosl or used 10 meet
cost sharing or matchilltl requircmonls of any
olher federally Iinanced program in either Ihe
curren I or !I. ,prior peril?d.,
&. Be adequalely documenred.
3. Reosunoble C05JS. A COlt is reasonuble
if. in ill nllture or amount. iC:does nol exceed
Ihat which would be Incurnd by 8 pn:dent
person under Ihe circumsl.."ces prl!vsiling at
the lime the decision was made 10 incur Ihe
costs. The question of Ihe l't:lsonablenen.of
specific costs musl be scrutinized with
particular care in connecticm with
organi:alions or separaie divisions thereof
which receive the prepondera:lce oIrheir
support Irom awerds made'by Fede'ral
agenCies. In delermining the re8Sonabll!ness
01 a given cost. considerlltion shall be given
10:
a. Whether Ihe cost is 'of a lype generally
!'Ilco3JIized as ordinary and necessary lor the
operation of the organization or tbe
performance of Ihe award.
b. The restraints or relJuirements imposed
by sucb laclors lIS generally accepted sound
business practices. arms Iimg:h bal1ainins.
Federal and State laws and regulations. and
tenns and conditions of the award.
c. Whelher Ihe indivldi8li,concemed aeled
....ilh prudence in the circumstances.
considering Iheir responsibilities 10 the
ol1anization. i1s members. employees. and
clients. Ihe public allarge, nnd the
Government.
d. Significarit deviations from (he
eSlablished practices of the orgJnization
which ma]' unjustifiably increase the award
costs.
4. /.llocable costs.
a. A cost is allocable 10 a particular cost
objecth'e. such as a granl. projecl. service. or
other activity. in accordance with the relative
beneCils received. A cosl is allocable to a
Governmenl award if it is treated
consistently with other cosls incurred for the
same purpose in like circumslances and if i'\;
(1) Is IncuITed specmcaJl~' for the sward.
(Z) Benefils bolh the award and other worle
a:Jd can be dis~buted in reasonable
proportion to the benefits received.
(3) Is necessary to the overaJl operation of
the organization. allhou"h a direct
relationship 10 any particular cost oujecti".
cannot be shown.
b. Any cost aJlocable 10 e particular award
or other cost objeCliye under these prinr.iples
ma~' not be shihec 10 other Federal awards 10
overcome funding deficiencies. or to avoid
restrictions imposed by law or by the terms
of :he award.
5. Applicablc cred.iL.,.
a. The lerm applicable credits refers to
Ihose receipls. or reduction of expeodilures
which operate ~o offset or reduce expanse.
items thai are allocaule ~o awards.. direCI
or indirect costs. Typic.1 eXRmples of such
transaction. are: purch.ue di.counts. rebales
or allowances. recoveries or indemnities on
losses. insurance rcfWld.. and adjustmenl. of
overpayments or erroneolU charge.. To the
e:oclentthat such credits accruing or received
b}' the organizalion relale to allowable cosl
they shan be crediled \0 Ihe Covernment
either 81 a cost reduction or callh refund os
appropriate.
b. In some inslance.. the amounts received
form the Federal Governmenl 10 finance
organizalional aclivitie. or service operations
should be trllsled lIS applicable credits.
Specifically. the concept of netting such
credit items againslrelAled expenditures
should be applicd by Ole organizaton in
determins the rntcs or amounls 10 be
orgl1niUlion in delermining the ralcs or
amaounts lobe charged to Federal award.
for services rendered whenever rhe facilities
or olher resources used in providing such
services have been nnanceu rlireclly. in
whole or in par\, by FederaJ funds.-
a( c) For rules co'\:'ering program income
(i.e.. gross income earned from federally
supported activities) see Attachment 0 of
01\113 Circular A-110.
6. Advance and understandings. Under any
given.'award .the rell60nableness and
allocability of certain items oI costs may be
difficuit 10 delennine. TIri. particularly lrue in
connec\i~!1 with o~Wlliona tha1.receive a
preponderance of Iheir support from Federul
agencies. In 'order to a\'oid .ub.equant
disallowance'or dispute based 011
unreasonableneu or nonalloeabilil\', It is
oflen desirable \0 seek a wrii\ElI1 ag~eemenl
with the cognizanl or awarding 'a5cnC}; in
advance of the incurrence 01 special or
unulal COSls. The absence of an advance
a!l"lemenl on aay element of cost will nol. in
itllelf. aEiect th. reasonableoeS8 or
alincabilil}' of that element.
B. Direct Costs
1. Direct cosls a!'ll those Ihal can be
idenlified specifically wilh a particular fi:laJ
cost nbj,-ctive: i.e.. a particular award.
project. service. or olher direct aClivit}' of an
organization. However. a eosl may not be
aasilfned 10 an award as a direct cosl if any
other cost incurred for the same purpose. i~
like circumslance. hes beAn allocaled to an
award as In indirecl cosio COil identified
speciCICIlII). with awards are direcl cost of the
a"'ards end are 10 be assigned directly
Ihereto. CoSI identified specificali)' with olher
filial cosl objeclives of the organization are
direcl cosls 01 Ihose COIl objectives and are
nollo be assigned 10 othl!r award. directly or
indireclh'.
2. /'.n): direcl cosl of a minor.amount m:l}'
be Ireated as an indirect co:;t of or reasons or
pruc:icaHly where the occollnttrealmcnt for
such cost is consislcntly orplied 10 :III finnl
cosl objecth'es.
3. The cosl of certain aeth'ilies Dre nol
allowable as chargr.s IQ Fedelal awnrds (lice.
for example. fund raisins costll in paragr:Jph
.1
A-122:2
21 of Allochmenl D). However. even thoush
Ihese cosl. are unsllowable for purposes of
computing charge. to Federal aWlIrds. they
nonethelelll musl he treated 81 direct cosl lor
purpose. of determining indirect cosl rale.
and be allocaled their .hare of the
orgllnizalion'. indirect costs if they represent
activilleswhich (1) include Ihe .alaries 01
personnel. (2) occupy spitce. and (3) benenl
from Ihe organizalion's indirect costs.
4. The cosls of activilie. performed
primllrily Sf a service 10 members. c1ir.nts. or
Ihe gr.neral puulic when RiRniCicanl nnd
necesllary to Ihe organizalion's mission must
be \reated a. direcl eoslS when or not
allowllble and be allocaled an equltahle
shore of indirect costs. Some examples 01
these type. of aClivities include:
II. Muinlenunce of membership rol\s.
suus<-.riptions. publications. ond reIn led
lunclions.
b. l'ro\'iding services and information 10
members. legilllative or adminislrative
bodies. or the public.
c. Promolion. loburing. and other forms of
public rr.laliuns.
d. Meetings and conference. exceplthose
hl:ld 10 conducllhe general administration oC
the organiza tion.
3. MlIinlenacne. protection. and inveslment
of ~pecial funds nol used in operation of the
orgunization.
r. Adminislration of sroup bene fils on
behelf 01 members of clients including life
,and hospital insurance. annuity or retirement
plllns. financial aid. elc.
C. Indirect CosL
1. Inuirect eosls are those Ihal have been
inc::rred for common or joinl objectives and
cannot ue readiiy. idenlified with a particular
finlll CDS! olljecth'e. Direct co.t oC minClr
amounts ma}' be Irealed IS indirect cosls
under tn;: ClJnditions described in paral;lraph
B.z. above. Afler dirl!et cosl. have been
detllrminlld and assigned ciirectly 10 awards
or (llher work as appropriale. indlrecl costs
11ft those rerr.::ining to lJe allocated 10
benefiting COR. objeclives. A COlli may nol he
allocatad to an award as an indirect cost if
"")" oth".r cosl incunei for the ~8me PUrpOSll.
i:1like cir~wnalances. 'has been u~ig;ed 10
an 1I"':ard as a direct coal. :
2. Because 01 the diverse charaCleristica
a.nd accounting praclices of nonprofit
crgRnizalions. it is not possible to specify the
t).pt'lS of cost which may be classified III
indirect cost in all situalion. Howe\'er. Iypiclll
e>:amples 01 indirecl cosl for many nonprofit
ol1lanintions may include depreciation or
use allowance.!' on bllildings and equipment.
the cosl8 of oper.1ting and mainlaining
facililies. and general admiDiSlration and
gr'nerl\1 expenses. sllch as the salarieR and
eApenses of executive omcers. personnel
odrr.inislratiDn. and ac:::ounling.
D. AIIllcation of Indirect Cost and
Df."lemll~"Olion of Indirect Cost Rut~s.
1. (;cneral.
a, Where a nonprofil orpanization has only
one n:ltjllr funclion. or whel'll ail ils major
lunctions benefil fru:n ils indirecl costs 10
ajlproximately the slime degrt'c. Ihe
alloer.tion of indi: ecl cosls Knd the
'I
Office of Management and Budget Circular A.122 (6/27/80)
computation DC an indirect castnte m.,- be
accomplished throullh simplified allocation
procedure. as do.c:ribed in puasraph .z
below.
b. 'v\ihere an organil:ation ha. several major:
(unction. which benefit Crom it. indirect co.t.
in varying degree.. allocation oC indirect
costs may require the accumulation of luch
costs Into separate cost groupings which then
are allocated individually to benefiting
functions bv melllU of II uase which best
measures the rlllntive degree of benefit. The
indirect costa allocaled to ench function are
than distributed to individual Awarda and
olher activities included in Ihat dunction by
means of UII indirect co.t rate(s).
e. The determination oC what conslitutes an
o'1lanizalion'. major Cunctions will depend on
i1s purpose in beinG: the Iypes oC sen.jces it
renriers to thefluulic, it. clicnlll, nnd it.
memlJcrs: and the "mOllnt of effurl 1\ t!cvOlu
10 such activllies 08 Cund ralaiJl8. puulic . ~.
inCormation and membership activities.
d. Specific methods for allocating indirect
costs and computing indirect cost rates along
wilh Ihe conditions under which each method
should be used are described in paragraphs .z
through 5 below.
e. The base period for the allocation of
indirect costs is the period in which such
costs are incurred and accumulated for
allocation wo work perlormed in that period.
The base period normall}' should coincide
with the organizalion's Ciscal year. but in any
evnl. shall be so selected u to avoid
Inequities in the alllication oC the costs.
%. Simplified aJJocation method. .
a. Where an organization's maiur functions
benent from its indirect costs to
approximatel)' the same de!!re. the lI!location
or indirect costs ma)' be acco:nplished b>. (i)
separating the organization', total CoslS Cor
the bue period as either direct or indirect.
"nd (ii) dividing tbe total allowable indirect
costs (net of appiir.able credits) b}" an
equitaule distribution base. The result of this
p~occss is an indirect cost rate ......hich is used
to distribute indirect costs to individual
awards. The rele shouid be e:ocpressed as the
percentage which the lotal amounl of
allowaule indirect costs bears to the bOlle
seJected. Tnis method should alas be used
where an organizatiCln has onl}" one m&jor
function encompaslling a number of
indjvidual JlrojecllI or 8cth'ilies. and may be
ulled where the level of Federal awards to an
organizalinn is rellftively small.
b. both the diroct costs Ilnd the indirect
cests shall exciudecapaal expenditures and
una:lowable costs. I iowever. unallowllble
costs which represent activities must Qe
included in the direct costs under the
conditions, described in paragraph B.3. above.
c. The distribution base ma)' be total direct
cosls (excluding capital expr:naitures and
olher distorting items. such liS major
subcontrlocts or s~b!;rantll). di~ect sr.laries
and wages. or other base which results in an
equitable distribution. nle dis:ribulion base
shall generally exclude pa.-ti~ip8:1! suport
costll as defined in paragraph Zll of
AlIachmenl B.
d. El(cl!~'1 where a l'!Jl!ciaJ riliels) iJl
rt'quired in accordance with paragraph 0.5
below. !he'indirect,cQllt rate __~..der
the above prinGipkll.a &RPlieaL1e j.p aU
awardl at ,lAe Ol"IIani:uWoll..u a spodal
rate(s) ~ required.appropriata modUiC.l&tion.a
shalll>e IUde iA order lD develop .tbe spacial
rate(s).
3. MuJlipJ~ aJJocoliotl bas~ method.
a. Where an ol'(lanization's indiroct costl
benent its majoduDctiona in varying degrees.
such COltl shall be accumulatad into Beparate
cost groupings. Each grouping shall then be
a\lnealed individually 10 benofiUng Cunction.a
bv mean, ol " l"ase which uesl measures lbe
r~lative benefits.
b. 111e srouflings shall be estaullshed '0 II
10 permilthe allocation of each groupins'on
the buis of benefits flrovided to the major
functions. Each sroupin& should constilute 8
pool oC expenses that are of like chanicte...in
tern" oC the Cunctlons they henefilllnd in
lerlll' o/Che ulluclllilJ/l !llIIle whluh h".t
, measurs the relutive benefits providd to each
function. The number oC separate groupings
should be held within pr8cticallimils. taking
into considerution the materiality of Ihe
amounts involved and the degree oC precision
desired.
e. Actual conditions must be taken into
account in selecting the base to be used in
allocating the expenses In !lath grouping to
benefiting Cunctiona. When an allocation can
be made by assignment of 8 costllroupin8 '
directl}' to the function beneliled. the
allocation shall be made in tbat maMer.
When the expenses in a grouping are more
8cneral in nature. the allocation should be
made through the use of a selected base
which produces reaults that are equitable to
both the Covernment and the organization. In
generaL any cost element or cosl related
factor associated with the ot1lanization's
work is potentially adaptable for use RS an
allocation base provided llJ it can readily he
el'Cpressed In terms of dollars or other
quantitative measures (total direct costs.
direct salaries and wa9~s. staff hours applied.
square Ceet used. hours of usage. nurilber of
documents processed. populBtion served. and
the like) and (ii) it is common to the
benefiting Cunctions during the base period.
d. Except where a special indirect cost
rate(s) il required in accordance with
para@1'Uph 0.5. below. the sepcu'ate groupings
of indimet COstl allocated to each major
function shall be agl'P.!,!ated and treated as 8
common pool for that function. The COStl in
the common pool shall then be distributed to
indivilual awars included In thaI function by
use of a single indirect cost rate.
e. The distribution base used in computing
the indirect cost rate Cor each function may
be total dil'P.ct costs (excluding capital
r::.:penditures and olher distorting items such
us major subcontracts and subgrants). direct
lIelaries and wages. or other ase which
results in an equitable distribution. The
distribution base shall generally exclude
participant support costs as defined in
paragraph 29. Altachment B. An indirect cost
rate should be developed lir each sr.psrale
indirect cost pool developed. The rate in each
Clllle should be stated 81 the percentage
whieh the amount oC the particular indirect
cost pool is of the distribution base identified
1
A.122:3
.nth thatl'OOi.
4. Dir<</. aJ/ocalion method.
a. Some nonprofit organizations. treat all
coslS as direct cost. expect general
administration Ind general expenses. These
olllanizations generally separate their costs
into thre balic categories: (i) Ceneral
administration and general expenses. (ii)
fund raising. and (iii) other direct Cunction8
(including projects performed under Federal
awards). Joint cosls. such ae depreciation,
rentnl costs. operation and mainlenance of
facilities. telephone expenses, and Ihe like
are prorated indivisually as direct cost to
each cateso')' and 10 each award. (lr other
activity using a baee most appropriate to the
particular cost being prorated.
b. This method is acceptable provided each
joint co.st is proraled using a base which
nCClIrnld)' men.lIre. che bcnr.fil~ I'rovirled 10
ellch nwnru or IIlher ncllvll\'. TIIIl bllHUH 1I11'HI
be established in accordance with resonable
criteria. and be supported by current data.
This method is compatible with the
Standards of Accounting and Financial
Reporting Cor Voluntary Health and Wellore
Organizations issued jointly by Ihe National
Health Council. Ine.. the National Asaemuly
of Volunlan' Health and Social WelCare
Organizations. and the United Way of
America.
c. Und~r this method. indirect costs consist
eclusivel)' oC seneral administrlllion and
general expenses. In all other respects. the
organi:ation's indirect cost ratess shal be
computed in the same manner as that
described in paragraph 0.2 above.
5: Special indi.'"ecl cosl rates. In some
inslances. a single indirect cost rale for all .
activities of an organizallon or for sac!': major
function oC lhe organization ay not be
appropriate. since it would noltake into
account those different factors which may
substantially aHectthe indirect costs .
applicable 10 a particular segment oC worr_
For this purpose. a particular segment of
work. For this purpose. a particular segment
of work may be Ihat performed under a single
award or it mav consist of work under a
~roup of awards performed in a common
environment. the faclori may inClud~ the
ph~'sicallocation oC the work. the lever of
administrative support required. the nature of
the Cacilities or order resources employed. the
scientific disciplines or technical skills
involved. the organizational arrangements
used. or any combination thereof. When a
particular segment of work is performed in an
environment which appears 10 generate a
aignificantly diCferentlevel of indirect costs,
provisions should be made for a separale
indirect cost pool applicable to such work.
The separale indirect cost pool should be
developed during the course or the regular
allocation process. and the separate indirect
cost ra Ie I'Csulting thereCrom should be used
pro\'ided it is determined thaI (i) the rate
differs significantly from that which would
have been obtained under paragraph 0.2. 3.
and 4 above. and Iii) the volume oC work to
which lhe rate would apply is material.
E. Negoliotian alld Approval of Indirect Casl
!lates.
I
Office of Management and Budget Circular A-122 (6/27/80)
1. Definitions. As used in this section, tht
following terms have rhe meanin~s set [orlh
below:
a. "Cognizant agency" means the Federal
agency responsible [or negotiating and
ifpproving indirec:t cost rales for a nonprofit
organization on behalf of all Federal
agencies.
b. "Predetennined rote" means an indirect
C1)st rate. applicable to a specified cutTent or
future period. usually th,e organization's nRcal
vear. The rate Is based on an estimate of Ihe
~asls 10 be incurred during Ihe period. A
p:-edetermined rate is not Rubject to
adjustment.
Co '.Fixed ralc" means an indirect cost rate
v.:hich has the slime characteristic" as a
j1rec.letermined rate. excepf that the dj{(erence
oC!tween the estimatC!d cosls and the actual
Cllsts of the period covered bl' the rllte is
carried forward as an adjustment 10 Ihe rale
computalion of a 8ubsequent period.
ei. '.Final rate" mean. an indirect cosl rate
!!p:plicable to a spC!ciCied past period which is
based on the actual coslsof the period. A
5nal rate i8 not subject to adjustment.
e. "Provisional rate" or billing rate means a
temporary indirect cost rale applicable to a
specified period which is used for funding.
interim reimbursement. and reporting indirect
eosts on awards pending the establishment of
a rale [or the period.
E. "Indirect cost proposal.' means the
documentation prepared by an organization
to substantia Ie its claim Cor the
reimbursement of indirect cosls. This
propr.sai provides the basis for the review
and negotiation leading 10 lhe eSlablishmenl
of an organization's indirect cost rate.
g. "Cost objective" means a Cunction.
organizational subdivision. contract. grant. or
other work unit for which cost data are
desired and for which provision is made to
accumulate and measure the cost of
I p:-ocesses. projects. jobs and capitalized
I projects.
2. Negotiation ond opprol'ol of fates.
a. Unless different arrangements are
if6reed 10 by Ihe agencies concerned. the
Federal13gp.ncy with Ihe largest dollar value
of awards with an organization will be
c:esignale:i as the cognizanl agency for the
negotiation and approval of indirect cost
rales and. where necessaT\'. other rales such
as fringe benefit and computer charge-out
~Ies. On~ an agency is assigned cognizance
lor a partIcular nonprofit organization. the
usignment will not be changed unless there
is a major long. term shill in the dollar volume
of the Federal award. to the organizalion. All
concerned Federal agencies shall be given Ihe
opporlunity to participate in the negotialion
process. bul alter a rale has been agreed
1.:pon it will be accepted by all Federal
agencies. When a Federal agency has reason
t~.bel~ev~ that special operating faclors
a.lecl1ng Its awards necessitate special
i:ldirect cost rales in accordance with
~aragraph D.S above, il will. prior to Ihe time
t:le rates are negotiated. notif)' the cognizant
agency.
b. A nonprofit organization which hns not
p:e\'iously ulablilhed an indirecI cost rale
with a F ederalagency shall after lhe
c~~anization is advised thai an award will be
made and. in no evenl. laler lhan three
months a[ler the effective dale of the award.
c. Organizations that have pre\'iously
established indirect cosl rales musl submit a
new indirecl cosl proposal 10 the cognizanl
agency within six months alter the \;Iose of
each !iscal year.
ei. A predel ermined rale may be negolialed
for use on awards where there is reasonable
assurance. bued on pas I experience and
reliable projection of the orgnnization's cosls.
thai the rala is nOllikely to exceed a rille
balled on Ihe organizalion's actual costs.
e. Fixed rnles may be negotiated where
predetermined rales are nol considered
appropriale. A fixed rale. however. shall not
be negotialed if (i) all or a subSlllnliul portion
of the organization'. awards are expecled 10
expire belore Ihe carry. forward adjustment
can be made: (ii) the mix of Government and
non-government work al the organization is
too erralic to permil an equitable carry.
forward adjustment: or (iii) the organization',
operations Ouctuale significanlly Crom year to
year.
f. Provisional and linal rales shall be
negotialed ,whl'.re neilher predeleMllined nor
fixed rates are appropriate.
g, Tlll resulls o[ !!nch negolialion shall be
formalized in a wrilten agreement belween
the cognizanl agency and the nonprofit
organization. The cognizant agency shall
distribute copies of the agreemenl to all
concerned Federal agencies.
h. II a dispute arises in a negotialion of aD
indirect cost rate belween the cOllnizant
agency and Ihe nonprofit organizalion. Ihe
dispute shall be resolved in accordance wilh
the appeals procedures of the cognizant
agency.
i. To the extent that problems are
encountered among the Federal agencies in
connection with the negotialion and approval
process. the Office of Managemenl and
Budget will lead assistance IS required to
resC/lve sllch problems in a Iimely manner.
[Circular No. A-1Z2)
Attachment B
Sulected Items of Cost
Tobie of Contents
1. Advertising COSl3
2. Bad debts
3. Bid and proposal costs (reserved)
4. Bonding COsls
S. Communicalion costs
6. Compensation fur personal services
7. Conlingenc)' provisions
II. Conlributions
S. Depreciation and use allowllnces
10. Donalions
11. Emplo)'ee morale. health and .welfare
cosls and credits
1::' Entl!rtainment cosls
13. Equipment and olher capilal expenditures
H. Fines and penalties '
15. Fringe benefil.
16. Idle facilities and idle car-ncit)'
17. Independenl research and developmenl
( reser\.ed)
15. Insurance and indemnincalion
19. Inlerest. Cund-raisins. and'investmenl
mnnageml:nt cosls
ZOo Labor re!3Iion~ Cll~ls
I
A-122:4
21. LC'S5("S on olhc~ a ward;
:::. Maintenance and rl~p"ir costs -
23. Malt:rials IVld supplice
24. Mcelin~s. conferrnces
25. Meml.erships. subu:r1f'lions. and
prGfcssional aeth'il)' custs
ZOo Organizntion CoslS '
%7. O\'r.rlime, extra.pay shift and multishil'l
premiums
ZlI. Pase charpl's in professional journala
:9. Parlil;ijlanl support cosls
:In. Palent cosls
31. Pension plllns
32. Plant sccurily costs
, :13. 1'reu,'ard cosls
34. Professionftl service cosls
36. ?ranIs and losses on dispollition of
deprecillule propert)' or other capital
assets
:lfl_ Public itHormalion sen'ice casts
3i. Publication and I'linting co~ts
:in. Rcarrangemenland Bheralion costs
39. Recon\'ersion cosls
40. Recruiting cas Is
41. Relocation costs
42. Rental COlli
43. Ro).ahies and other costs for Ufle of
palents and cnpl'rishls
44. Se~'erllnce pay
45. Specialized service facilities
4". Taxes
47. Tennir.ation Calls
40. Training and education costs
49. TM!nsportation cosls
SO. Tr3\"CI costs
[Circular No. A-1ZZ)
Allacbmenl B
Selected Items of Cost
l'arat!Taphs 1 through 50 provide principles
to be lIf'plied in establishing the sHowl/hUity
of certain ilcms of cosL These principles
ol'ply whether a cost i. trealed as direcl or
indirecl. Failure 10 men lion a particular item
of Call is not inlended to impl}' that il il
unallowable: rather detennination os to
allowabilih' in each cue should be bued OD
Ihl! trealnl~nt or principles provided for
similar or related items oi cosL
1. Advertising COSfS. . . 'I
a. Ad'''ertising costs mean the costs of .
media Sl'.rvices and associaled costs. Media
advertising includes magazines. newspapJrs.
rndio and television programs. direct maiL
exhibits. and the like.
b. The only advertising costs allowable ant
those which ~ solei)' for (i) the recrulunent
of personnel when comidered in conjunction
,with all other recruitment cosls. u set fortb
in pari STaph 40:,(ii) the procurement or goods
and sen'ic!!s: (W)the dispolal of surplus
malerials acquired in the perionnance of the
awnrd except when organiutiona are
reimbursed for disposals al a predetermined
amounl in accordance with Allllchment N of
OM13 Circular A-no: or (h') specific
.requiremenls of the award.
2. Bod dobLs. Bad-oebls. including lones
(whelher actual or estimaled) aTilling [rom
uncolleclible acconnls and olher claims.
related collection costs. and relatoo:llegaJ
COllis. are unallowable.
3. Bid and propollol cosLs. (rescrved)
4. lJvnding costs.
~
I
Office of Management and Budget Circular A.122 (6/27/BO)
&. Uoncling Co~ls arise when the
Gn-vcmmcnl requirclI,usurance a!lRinlll
lir.dnciallo!5 10 i!lIelf or others hy reason of
the acl nr d~rau1t of the ol'l~llnizalion. ~e)',
u:ist! also in inslance3 where the or!lanluhon
"-quir!!s similar allSuranoe. Included are such
bonds 85 bid. performance. paymcnL
lI,h'unc:e payment. InfringemenL and fidelity
bunds.
b. Custs or bonding required pursuanllo
thelern',s of Ihe awaro arr. allownhle.
Co COlltsO! bonding required br the
ol'g-lniziltion in Ihe !leneral conducl of ill
tlpr.ral:ons arc ollowable 10 the e>:tent thol
such uonding I. in occordance with sound
business practice and Ihe roles and premillm.
itre reilsonllble under the circumstanCes.
S. Communication OOllt&. Cost. incurred for
tellerhnne services. local and long dislance
lelcphone collll. teleg~nms. radio!\l"alm.
postage IInd Ihe like. are allowable.
6. Compensatiori farporsonal sen'iccs.
a. Defini/ion. Compensation Cor penona!
services includesllU COmpen,.lion paid
c:um:nlly or accrued by Ihe orgl\r.i:ation for
services or emplo~'ep.s nmdered during the
period oC the award. (except as otherwise
provided ,in paraSTaph g. below). 1l includes.
but is nollimited to. aalaries. Wl'gCll.
director's and executive committee member's
fees. incentive awards. fringe beneCiu.
pension plan cosU. allowances Cor oa-sile
pit).. incentive pay. location allowances.
hudship par. aDd cost oC Ih'ing c1iIierentiala.
b. AlJowability. Except as otherwiJe
s;1ccifically pravided ill this paragraph the
costs oC such compensation are allowable 10
the extent that:
(1) Total compensation to,individual
employees is reasonable foc the services
rendered and conform. to the estabiished
policy of the organiz:ation consistently
applied to both Government and DOO-
Government activities: and
(ZI Charges to awards whether \rl!oted as
direct or indirect coats are c1ete:minlld and
supported a\ required ill this paragraph.
Co Reasonableness.
(1) Wbenthe organiz:ation is predominantly
engaged in activities other than those
sponsl:lred by the GavemmenL compell&atioo
Cor employees on Govammonl-sponsored
work will be considered reasonable to the
extent that It is consistent wilh thaI paid Cor
similar work in Ihe orSllniz:ation's other
activi lies.
{Z) Whenlhe organi:ation is ,.redominantly
engaged In Governmenl.sponsored activitiu
and in cases where the kind oC employeet
required for the Govemment activities ate
npt Cound ill the OrganizatiOD'S other
aclivilies. compensation Cor emplo)'ecs on
Go\'emmenl-sponsored work will be
considered reasonable .10 the extent that il is
comparable 10 that paid for simIlar work in
lhe labor markets in which the organiz:ation
competes for the kind o( employees involved.
d. Special considerations in de/erminina
aJ/owobilitj'. Certain conditions require
special consideration and possible limitations
in determininll costs under Federal awards
where aDlounls or types o( coml'Cnsation
appear unre811onable. Among such conditions
are Ihe Collowing:
(I) CompenSlJ tion to memuers oC nonprofit
ort:aniulions, truslees. direrlon. auociAlr.s.
o{ficers. or Ihe immedio Ie CllIuilie. Ihr.reor.
Dr.Ir.nninAlion shollld he made that .uch
compensalion is relSllnnule Cor the actuol
penonal services rendered rather than II
distribution o( esmings in ellcess or casls.
IZ} Any change in I'n Ol'tlauizalion', '
compensation policy resulting in a
substantial increase in the organizalion's
lr.vel or compensation. particularly when it
was conculTCnt with an incrense in the ralio
o( Covernmcnlllward. 10 other aclivities or
the org8nizalion or any chnnge in Ihe
Irentment ur allow8oility o( specific I}'pes or
compr:nsation due 10 changes in Government
policy.
e. Unallowable costs. Coals which lire
unnllowable under other paragraphs or Ihi.
AlJachlTlent shall nol be allowable under this
parogrnph solely on the bllSis that they
conslitule penonal compensalion.
C. Fringe benefits.
(11 Fringe beneIits In the rorm of regular
compensation paid 10 emplo]'ees during
periods of authorized absences (rom the job.
such as vacation leave. sick leave. military
leave. and the like. are allowable provided
such costs are absorbed by all organiz:ation
activities in proporlion 10 Lhe relative amount
of lime or errort actually de\'oted 10 each.
(Z) Fringe beneIils in the Conn or employer
conlributions Dr expenses for social securil)'.
employee insurance. workmen's
compenaation insurance. pension plan cosls
(see paragraph g. below). and the like. are
allowable provided such benefits are granted
in accordance with establi.hed wrillen
organiz:ation policies. Such benefils whelher
treated as indirect cosU or as direct costs.
shall be distributed 10 particular awards and
olher activities ill a lOannC%' consistenl wilh
the pattern oC benefits accruing to the
individuals or group oC employees whose
salaries and wages a~a chargeable 10 such
awards and other acfivities.
(3)(a) Provisions (or a reserve u.'1der a self-
Insurance progr8m for' unempl~ymenl
compensation or workmen's compensation
are allowable to Ihe extent Ihat the
provisions represent reasonable estimates o(
the liabilities for nch compensation. and Iho
types oC coverage. extent of coverBSe. and
rates and premium. would have been
allowable had insurance been purchased to
cover the risk&. However. provisions for sclr-
in.ured liabilities wbich do 001 become
payable for more than one year aCler the
pravi.ion is made shaU not exceed the
preaenl va.1ue oC the liability.
(b) Where an orgenizalion Collows a
consialenl poley o( expensing aClual
payments 10. or~OD beba1C ot employea or
'Iomler employees for unemployment
=Compensation or workmen's compansation.
such.paymenls are allowable in lhe year of
'Payment with the prior approval of the
awarding agency provided they are allocated
to,all activities of the organization.
(4) Cosls of insurance on the lives of
lrustt'es. officers, or other employees holdins
positions or similar responsibility are
allowable only to the extent that Ihe
insurance represents additional
compensation. The costs of such insuran!=e
when the organization is named as,
J
A-122:S
beneficiary are unallowable.
/;. Pension plan costs.
(I) COSIS of the orsani:z.alion's pension plan
which are incurred in accordance with the
eSlablished policies or Ihe organization are
I'lI0wable. provided:
(a) Such pulicies meellhe test or
reasonableness:
(b) The methods o( cost allocation are not
discriminatory: ,
(c) The cost 81signed 10 each fiscal year is
determined in accordance with generally
accepted accounting principle~ ll& prescribed
in Accounting Principles Board Opinion No, 8
issued by the American Institute or Certified
Public Accountanls: and
(d) The costs IlSsigned to a given liscal yenr
ere runded ror all plan participanls within six
monthll ailer the end of Ihal year. However.
incresses 10 normal and past service pension
cosl. cl'ul8d by a delay in (unding Ihe
sctuariallillbility beyond 30 days aCler each
quarter of the year 10 which .uch costs are
assignable are unallowable,
(Z) Pension plan termination insurance
premiwns paid pursuant to Ihe Employee
Retirement Income Security Act or ]974 (Pub.
L 93-406) are allowable. Late payment
chllrses on such premiwns are unallowable.
(3) Excise taxes on accumulated funding
deliciencies and olher penalties imposed
under the Employee Retiremenl Income
Security Act are unallowable.
h. Incentive compensation. Incentive
compensation to employees based on cost
reduction. or efficient performance,
suggestion awards. sarety awards, etc" are
allowable to the exlent that the overall
compensation is detennined to be reasonable
and such costs are paid or accrued pursuant
10 an aSTeemenl enlered into in good faith
between the organizalion and the employees
before the services were rendered. or
pursuant 10 sn established plan rollowed by
Ihe organization so.consistently as to imply,
in eCrect. an agreement to make such
payment. " .
i. Overtime. extra pay shift. and multlshlft
premiums. See puagraph 27.
j. Severance po]'. See paragraph 44.
k. Training and education oasIS. See
paragraph 48. .. .....
I. Support of salaries and wages. -
(l) Charges 10 awards ror salarie~ and
wages. whether treated lIS direcl costs or
indirect costa. will be based on documented
payrolls approved by a responsible official(s)
o( the organization. The distribution of
solaries and wages to awards musl be
supported by personnel activily reports as
prescribed in subparagraph (Z) below. except
when a substitule system has been approved
in writing by Ihe the cogniz:anl agency. (See
paragraph E.2 of Attachment A)
(Z] Reporl. reflecting the distribution oC
activity or each employee must be
maintained ror all stare members
(proressionals and nonprofessionals) whose
compensation is chargee:!. in whole or in part.
directly 10 awards. In addition. in order 10
support the allocation of indirect costs. such
reports must al.o be maintained ror olher
employees whose work involves two or more
funcitons or activities iC a distribulion of their
compenllotion between such functions or
nr.livilies ill needed in the determination or
I
.1
Office of Management and Budget Circular A-122 (6/27/80)
th~ oqaAization's indirect cost rate(s) (e.g..
In emIll~oyee engaged part-time in indirect
cast activiUe.and part-time in a direct
functicm). Reports maintained by nonprofit
orgamzations to satisfy these requirements
must JDelIt the following standards:
(at ne reports must reflect an after.the-
f17ddlctermination oC the aClual aclivily of
each m,ployee. Budget estimates (i.e~
esliltli3tell determined before the services are
performed) do not Qualify as support for
cha~ to awards.
(bIt uch report musl account for the lotal
actj,vil:)l for which employees are
c~fIt1iIeD5ated and which is required in
(ultilJment oC their obligation, to the
Q~lion.
(r:J; The reportsmusl be signed by Ihe
indi~"J employee. or by a responsible
su~aory olficial having firsl hand
knowleqe of Ihe activities performed by the
empi~ft. tbatthe distribution oC activity
repl'ftefttl a reasonnble estimate oC Ihe
actua1li work perfo:med by the employee
ci~ the periods covered by the reports.
(ef)i'rlhe reports must be prepared atle86t
moa.tbJl.y and mus\. coincide with one or more
pa)!' pl:riOds_
(3)), Charges Cor the salaries and wages oC
.naapralienional employee.. in addition 10 the
s~~ documentation described in
subp8lr.aFaphs (1) and (2) above. must also
be supported by records indicating the total
nwnbu of hours worked each day
~ainlaiGed in confor:nance with Department
of La. regulations implementing the Fair
Laber Standards Act (29 CFR Part 516). For
th~ pupose. the tenn ~nonproieuional
emp'lo~ee" shall have the same meaning as
"no~pt employee," under the Fair Labor
Stam:i:aJ.ds Act.
(4;}' S6laries and wages of employees used
irLmeetillg cost sharing or ma tching
requiruaents on awards must be supported in
the sa.nw manner as salaries and wages
claimed for reimbursement from al....arding
agem:ies.
7. Contingency provisions. Contribulions to
a cm:r.lin,ency reserve or any similar
provision made for events the occurrence of
whic:h cannnt be ioretofd with certainty as to
Um~ intensit),. or with an assurance or their
ha~ening. are unallowable. The term
"con~cy reserve" excludes self.
insu.rance reserves (tee paragraph 6.f.(3) and
1G.a.(Z)td}): pension funda (see paral1raph
6.(81):, and reserves for normal severance pay
(see> pa.ragraph 44.(b)(1).
a. Contributions. Contributions and
donatinns by the organization to olhers are
ll.'Yalllil"".ble.
~,fJepreciaiion onduse allowances.
&. Compensation (or the use,of buildings,
a:ha capital improvements, and equipment
l:~ I>IUlC may be made through use
a!iuwanees or depreciation. However. except
25 prrwidcd in paragraph f. below a
c;OInW>lation of the two melhods ma\' not be
I:sed in connP.ction with a sin(!le class of
fhed aSlrets le.g.. buildings. office equipment.
computer equipmenL elc.).
b. The compl::a!ion o( use allowances or
.;'~prt'Ciali(ln sha" be based on the
":,!l!isi:ion cost of the assels involved. The
J~Ot;:si!ion cost o( an nsset cu::alcd 10 the
or!!aniution by a third party shall be lis lair
market value at the time of the donation.
c. The computation of use allowances or
depreciation will exclude.
(1) The co,' oCland:
(Z)l'rny portion o( the cost of buildings and
equipment borne by or donated [,y the
Federal Government irTespective of wbere
title was orillinall~' vested or where it
presently resides: and
(3) Any portion of the cost of buildings and
equipment cO!~lributed by or (or the
or((anizBtiun ill stJlis(aclion of II S'lIlutOfJ'
matching retirement.
d. Where the use sllowance method is
followed, Ihe use allowance for buildings snd
improvement (including land improvements
such 118 pltved :'larking sreas, fences, and
siduwlllks) will be computed at an annual
rute not exceec!ing two percent oC acquisition
cost. The use allowance ior equipment will
be computed at sn annual rate not exceeding
six and two-thirds percent oC acquisition cost.
When the use sllowance method ia used for
buildings. the enUre building must be trealed
os a single 8sset: tile building's components
(e.g. plumbing system, heating and air
conditioning. etc.) cannot be segret:lu1ed Crom
Ihe building's shell. The two percent
limitation. howev~r. need not be applied to
equipment .....hich is merely attached or
Castened to the building but not prrmanently
fixed to it and which is used 88 furnisbings or
decorations or I'or specialized p-.uposes (e,s~
dentist chairs and dental treatment units.
counters. laboratory benches bolted to tha
Ouor. dishwashers. carpeting. etc.). Such
equipment will be considered as not being
pel'manently fixed 10 Ihe building if it can be
removed without the need Cor cosll,' or
extensive alterations or repairs to the
building or the equipment. E:juipmentthat
meets these criteria wilf be subject to the six
and two-thirds percent equipment use
IIllowance limitation.
e. Where depreciation method is [ollowed,
the period of useCul service (useful life)
established in each case (or usable capital
assets mus. take into consideration such
Cactors 88 type oi construction, nature of the
equipment used. technological developments
in the particular program area. and the
renewal and replacement policies Collowed
for tbe the individual items or classes oi
assets involv~d. The method of depreciation
used to assign the cost oi an asset (or group
of assets) 10 accounting periods sbaJJ renect
the p.llem of consumption of the IIIset
during lls useiullife. In the absence oC clear
evidence indicating lhat lhe expecl"d
consumption of the asset will be significanlly
grea ter or lesser in the early portions of its
ullefuJ liie than in the later portions. the
straight-line method shall be presumed 10 be
the appropriate method. Depreciation
ITIcthods once used shall not be changed
IInless IIpproved in advance b)' the co~nizllnt
Fc:cp.ral asenCJ'. When the depreciation
method is introduced for spplication 10 assets
previously subject to a use allowance. the
combination of use aUowances and
clcprecialion applicable to such assets must
not exceed the total acquisition cost o( lhe
assets. When the oeprecilllion method is used
("r huildin!!s. a buildinl!'s snell may ue
A-122:6
lll'gregnlcd Irom each buildin!! component
(e.(!.. ph;mbin(l system, heating. snd air
conditioning system. etc.) and esch ilem
depreciated over its estima'ed useful life; or
Ihe entire building (i.e.. the shell and all
components) may be treated 88 a single 888et
and depreciated over a single useful life.
f. When the de'Jreciation melhod i. used
for R particular class of assets. no
depreciation msy be allowed on any such
asr.ets that. under parasraph e. above, would
he vie.....ed as (ully depreciated. However. R
rensonlllJle use allowance mill' be negotinted
(or such aSlets if warranted after laking into
t:unsideration the amounl o( depreciation
previously charged to the Government, the
estimated useCullife remaining III time or
negotiation, the effect o( an)' increased
mllintenaoce charges or decreased efficiency
due 10 age. and any olher (actors pertinent to
.the utilizalion oC the assel (or lhe purpose
contempla ted.
g. Charges Cor use IIl1ow8nce~ or
dcpreciationmusl be aupported by adequate
propert)' records and physical inventories
must be taken at least once every t\Yo years
fa $ta1illical sampling basis is acceptnble)to
ensure that assets existnnd are usable and
needc:d. When the depreciation method i.
fullowed. adequate de;,lrecia1ion records
indicating the amount of depreciation taken
coch period must also be maintained.
10. Donations
a. Sen'ices received.
(]) Donated or volunteer serviclls may be
furnished to an organization by proCessional
and technical personnel, consullants. and
olher skilled and unskilled labor. The value
o( lhcse'services is not reiJnbursable either as
a direct or indirect c.-osl.
(Z) The value oC donated servicesutilizcd
in the performance oC a direct cost aclivity
lihall be considered in the determination of
the organization's indirect cost raters) and.
IIccordingly, sholl be allocllted s
proportion'lt! share of applicableindirecl
COSIS when the following circumstances exisl:
(a) The agg:-egate value oi the services is
materinl:
(b J The services arll supported b~' 11
liisnific:ant Bmnlml of llie i!V1irect costs. _ .
incurred IJ~' the org:miza lion:
Ic) The dirp.ct cost activity is notlJursucd
primarily for the beneIi. of Ihe Federal
Cuvr~mment.
(:I) In those illstancc:s where therll is no
,basis for determining the fair market value of
the services rendered. the recipient and the
cognizllnt Bgency shall negotiate an
nppropria Ie aiioc~lion of indirect cost 10 the
scr,'ices.
(4) Where donated $ervices directly benefit
a j:roject supported by an a ....ard. the indirect
costs allocated to the services", m be
considered as a part of the total costs of the
projecl. Such indirect costs may be
rflimbursed under the award or used to meet
cusl sharing or ma.ching requirements.
(5) The vCllue or t~e donated services may
bl! used to mect cost sharing or matching
rflQuircments under conditions d~scribed in
.^.lIachment E. OlliE Circular No. A-110.
\.....here donated services are treElled as
innirect cests. indirect COllt rateswiIl
SI!par"l~ the value of the donnlions so thai
I
Management and Budget Circular A.122 (6/27/80)
nt will not be made.
rkltt value of donated services
puled 55 lollows:
or volunteer services. Rales Cor
all be consiltent with those
paid far similar work 'In other
th~oqlUlization. In cues where
.kil48 iuvolved are not found.in
ivilies of tbe organiution. the
aIL be consistent with those Jlaid
ork in the labor market in which
lioncampctes Cor such skills.
s riotmted by other
s. When an emplo~'er donates
or _ employee. these services
ed allAe e~plo)'ee's regular rate
sivt oHringe benefits and
sJ pmwided the services are in
'n Cor wbic;h the employee is
'd. Lf lbe .ervices are not in the
r whidl the employee is normally
rkelI valUI shall be computed in
wi>tlu1Iibparagraph (a) above.
rrri $ptIIC& .
d gadis; i.e~ expendable
perty/lNpplles. and donated use
. be' ftlnJiahed to an organiza tion.
the gOGGs and space is not
e eit:het as a 4irect or indirect
lUll oE 1M donations may be used
shaliq: or matchirig share,
s under tIIle conditions described
nt E;. OM! Circular No. A-ll0.
the dcaationashall be
10. ac:amfance with Attachment
na~5 are treated as indirect
ct cost rates will separate th,
donatiims so that reimbursement
ace..
yee ~ health. and welfare,
edits.. The cosls oC house
. hearth or flrst-aid clinics. andl
s. 1'eC:l!8lional activities.
CCl1UllHWIg services. and other
:cumrd in accordance with the
~'s utablisheci practice or custom
:o\'ement oC working conditions.
:nployee relations. employee
, employee performance are
Such costs will be equitably
l: to all activities or the
1. Income generatp.d from any of
ties wiD be credited to the cost
:51 such income has been
set. Cl'l'ft to employet' welfare '
I~. .
rzinlDftnt costs. Costs of
diversion. social activities.
,and cuts relating therelo, sucl.
dging. teD leis. transportalion. and
e unaLlowable (but see
II and 25).
I'lent and other capi/al
s.
I ill this parngraph. Ihe following
he:ml:qningJ s~!(Qrth below:
Iment~ mean, an article of
IDle tangible personal properly
:fullife of more than two vears
lisilion cost of $500 or more per
anization ma\' use ils own
'ovi~ that ii atlenst includes all
ble tansible personal propert). as
:in.
(2) '"Acqui!ition cost" means the net
invoice unil price o( an item of equipment.
including the cost oC any modifications.
allachments. accessories. or auxiliary
apparalus necessary to make it usable for the
purpose for which it is acquired. Ancillary
char[les. such 81 taxes. duty. prolective in.
transil insurance. Creight. and installation
shall be included in or excluded from
acquisition cosl in accordance with the
organization's regular wrlllen accounting
practiceR.
(3) "Special purpose equiplolent" means
equipmcnt which is usable only for research.
medical. scienliflc. or technical activities.
Examples of special purpose equipment
include microscopes. x-ra)' machines. surgical
instruments. and spectrometers.
(4) "General purpose equipment" means
equipment which is usable for other ehan
research. medical. scientific, or technical
activities. whether or not special
modifications are needed to make them
suitable for a particular purpose. Examples of
general purpose equipment include office
equipment and furnishings. air conditioning
equipment. rep,"oduclion and printing
equipment. motor vehicles. and automatic
dala processing equipment.
b. (1) Capital expenditures for general
purpose equipment are unallowable as a
direct cost except with the prior approval of
the awarding agency.
(2) Capital expenditures for special purpose
equipment are allowable as direct costs
provided that items with a unit cost or $1000
or more have the prior approval of the
ewarding agency.
c, Capital expenditulllla 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. bt:i1dings. or equipment wl1ich
materially increase their value or uselullife
are unallowable as a direct cost except with
the prior approval of the awarding agency.
e. Equipment and other capital
e:cpenditures are unallowable as indirect
costs. Howe'.er. see pararraph 9 for
allowabilit). of use allowances or
depreciation on buildings. capital
improvements. and equipmenL Also. see
paragra~h 42 for allowability of rental costs
for land. buildings. and equipmenL
14. Fines and penallies. Costs of fines and
penalties resultins from violations of. or
failure of the organization to co~ply with
Federal. State. and local laws and resulations
are unallowlible except when incurred as a
result of compliance with specific provisions
of an award or inslructions in writins from
the awarding Bseney. '
15. Fringe benefits. See paragraph 6. r.
16. Idle facilities and idle capacity.
a. As used in this paragraph the following
terms have the meanings set forth below:
(1) "Facilities" means land and buildings or
an)' pO:1ion thereof. equipment indh'idually
or collectively. or any other tangible capital
asseL wherevcr located. and whether owned
or hmscd by lhe oTionizalion.
(:!) "'die facilities" means completel"
unuscd facilities tha: are e'lcess to the
organi:z.ation's curren I necds.
13i "Idle cOi'ncily" means the unllr.ed
I
A-122:7
capacity oC parlially used facilities.ll is thll
difference betweeD that which a facility
could schieve under roo per cent operating
lime on a one-shilt basi. less opera ling
interruptions resulting Crom time lost ror
repairs. setups. unsat:sfactol1' materials. anc!
olher nonnal delays. alld the extent 10 which
thr. facility was aCloally used LD meet
demands durina the accountinll period. A
multishift buis may be used if it con be
shown that this amoW11 of usage could
normally be expected (or the type of fscUHy
involved.
(4) "Costs of idle facilities or idle capacity"
menns costa such u D1amlenance. repair.
housin!l. rent. and other relaled cosb; e.g..
propert}' taxes. insurance. and depreciiltion
or use allowances.
b. The cosb of idle fucilit.ies are
unallowable except to the extent tbat
(1) They are wmece'lIary to Illell!
nucluations in workload; or
(2) Although not necessary 10 meet
nuclualions in workload. they were
nr.cessary when acquired and are now idle
Vccause 01 changes in program requirements.
efforts to achieve more economical
operations. reorganiz:ltion. termination. or
other causes which could nol have been
re:lsonably foreseen. Under the exception
stated in tbis subparagraph. costs oI idle
facilities are allowable Cor a reasonable
f1eriod of time. ordinarily not to exc-.ed one
year. depending upon the initiative taken to
ulle. lease. or dispose of such facilities (but
see paralJl"llphs 47.b. and d.).
e. The coals of idle capacity are normal
costs of doing business and are a factor in the
norm:!1 nuctuations of usage ar indirect cost
rales (rnm period to period. Such costs are
allowHble. provided thl! capacity iB
reasonably anticipaled 10 be necessary or
was origi:\ally reasonabie and is sl:bject to
reduction or elimination by sublelting.
renting. or sale. in 8ccordltnce with sound
busines&. economics. or security praclices.
Widespread idle r.apacity throughout an
entire (acililr or among a group of assets
having subslantially the same Iunr:lion may
be idle faciIi ties. .
17. Joul..p.mdcn/ resc"{Ch OJld dcw;lopment
IReserv"dl. -
18. Insurance and indemni{;cotion. I
a. Insurance includes insurance which the
organization is required to carry. or which i.
approved. under the terms of the .:ward and
any other insurance which the organization
maintains in conneclion with the [Ieneral
conduct 01 jb operations. Thill parattraph
does not apply to insurance which N:presenlS
fringe benefits for emrloyees (eee pll:allTapn
6.f. and 6.g.i2)).
(1) Costs oi ini:lrance r~quired or
ar-proved. and maintained. pursuant to the
award are allowable.
(:!) COSIS of other ins11rance mHinlained b,'
lhe organization in connection wi:h the .
general conduct of its operations are
allowable subject 10 the followinglimita {ions.
(a) Trp~s nnd extent of coverage shall be
in accordance with BOl.nd business praclice
snd the r"lles and premiums shall be
r~asl)nRble uncer the cireumslances,
[bl C(',st~ Rllowed for busjness interruption
or Olnp.r similar insurance shall be limited 10
I
Offtce of Management and Budget Circular A.122 (6/27/80)
~t.ilJlion and in Rnticipation oC the ~ward
witt/iI' s\lt.h co~15 is necessllry to comr1y with
~he pruilo~ed dcliver~' schedule or period oC
perlorm:llIce" Such COSIs /Ire allowaule onl)'
tlil' ~hc e:o<lcnt Ihallhey would have been
ll>l"n"ablc if incurred 1I{ler the dRlr. of lhe
;:-w.arillmd only .....ilh the wrilll'n apflrovlIl rof
tl~oGwardillS agen!:)".
:1'4, Jlrn(cssional sert'ice costs.
a. Costs of prorl'l':sionnl and consultnnt
sC'fvices renclcreJ by persons who are
r:w"tllers of II pllrliculnr prore~siun or po~~cse
1I 5Tl~d.1l skill. anJ who arc not officers ur
1I'1'":;,iuyecs of the orgbllizillion. arc allowable.
s.;obi~ctlo U. c. and d. of this plirngraph when
rl!'"sollaLle'in r-.:lation -to the servicp.s
rrmGered IInd when nol conlingenl upon
r~t:lI"er" of the costs from thtl Go\'ernment.
b;.. In detr.:rming the allowabilily of r.osts in
~ pntrticuJar cClSe. no single lactor or any
spe'Ci'1I1 combination of factors is necessaril~'
determinative. However. the following
Cadms are relevant:
ttp'he nature and scope of Ihe service
_lered in relaUon 10 the service required.
CZ} The ncces,o;ily of contracling for lht
5U\'ice. cnnsidering the organization's
aphility in the parliculnr area.
PI The pasl pattern of such COSlS.
particularly in the years prior 10 Governmenl
awards.
, (4} The impacl of Government awr.rds on
rite ofganizl1lion's business (i.e.. what new
~Iems have arisen).
(5J Whether the proportion of Government
~ to the organization's total uusiness i8
-.;b as 10 influence lhe organization in favor
Clf,( incurring the cost. particularly where the
services rendered are not of a continuing
na~l.1re and have little relationship to work
under Govemment grants and contructs.
[ST Whether the service can be per{onned
more economically by direct emplo~'ment
rlither than contracting.
(7) The qualifications of the individual or
cancern rendering the service and the
cuslomlt'1' fees charged. especiall~' on non-
Government awards.
(6) Adequacy of the contractual agreement
for the service (e.g.. description of the service.
estimate of time required. rale of
compenJ;ation. and termination provisions).
c.lnaddition to the {actors in poragTlIph b
~bo\'e. relainer fees to lhe allowable must ba
Stll'I'orted by evidence of bona fide services
available or rendered.
d. COSl of legRI. accounting. and consuhing
lier\'ices. and related costs incurred in
c:onnp.ction with defense of antitrust suiti."
and the proseculinn of clai.:ns allainst the
Government. are llllllllowable. Costs of legol.
1Ic:::uunting IInd consu!:ing services. and
rel:lled casts. incurred in connection with
patent illfrins!menl Iitiga:ion. orsanizalion
and reorsn!1ization. are unallowable unless
c;lherwise pr(wided fQt in the award (bul see
parll!!raph4ie), '
35. Profits nnd lasses on di$position of
depreciable properry or other capital assets.
&. (1) Gains and 10R~E'!s on sale. retirement.
or other disposilion of cit:preciable property
sh<:1I be inclllrled in lhe }'ear in which they
oc;;ur as cred:~~ or charges 10 cost grouping(s)
in whfch the dr.preciation applicable to such
ilropert~' was included. The amounl d the
~ain or loss to be inr.luded as a credit or
chitr!:e 10 the appropriate CO$1 ~rollping(sJ
sir",. UC: Ihe diHercnce uetween the amount
n~ftlized on the property and the
unoepreciated basis o{ the properly.
(2) ClIins and losses on the disposition of
dl!f'recinble properl)' shall not be recognized
liS Ii separate credit or charge under the
Iniluwing conditions.
Iii) The lloin or 1065 is IlroceucJ through It
ucprecialiun reserve account alll.! is r(;fiCCled
ill tht: Jellrecia!ion 1I11owalJic unuer
IHlra!:raph 9.
(t.) The properly is siven in exchange as
pllrl of the purcha$e price of a similar ilem
and the gllin or loss is laken into account in
dr.\enllining the depreciation cost basis of Ihe
nllw item.
Ic) A los, rellults frum the fuilure to
maintain permissiule insurance. except lie
othl!rwise pl'\1Vided in paragraph 10..1.(3).
(ell Compensation for the use of the
properl)" was provided lhrough use
allowances in lieu of depreCiation in
occordance with paragrllph 9.
(e) Gllinsand losses arising from mass or
p.xtraordin.1rv sale,. relirements. or o"lher
disposiUons shall be considered on a casc-
b,,-eal'e basis.
'b. Gains :>rlosses of any nature arising
from the sale or exchange of properly other
than the property covered in paragrnph a.
above shllll be excluded in computing awara-
custs.
35. Public infarmaliun sen'ice costs.
a. Public informalion service costs include
the cost associated 'with pamphlets. news
releases. and other forms of information
services. Such coslS are normally incurred 10:
(l)lnfurm or Ins1ruct indh.iduals. groups. or
the general public.
(2) Interest individuals or groups in
participating in a serlice program of the
olganizalion.
(3) Disseminate the results o( sponsored
and nonsponlored activities.
b. Public info:mation service Cosls are
allowable as direct Cosls with the prior
a~proval of thP. awarding agenC)'. Such costs
ore unallowable as indirecl cosls.
37. Publication and printing costs.
a. Publication costs include the cnsts of
printing (including the prnce~~es"Of
composi:ion. plale-making. press work.
binding. and the end producls produced by
8uch ;Jrocesses). distribution. promotion.
mamns. and general handling.
b. If thelle COStl aM! not identifiable with a
particular 'COsl objective. they should be
allocaled 81 indirect costs to all benefiting
activities of the orsanization.
c. Publication and printing cosls are
unuilowable as direct costs except with the
priur approval of the awarding agency.
d. T'ne cosl of page charges in joumRls is
addressed pRragraph 28.
38. Rearrangement. ond alteration costs.
CoslS incurred for ordinary or normal
rearrangement and alteration 01 facilities lire
allowable. Special ~rrangemenl and
alteration COSlS incurred specifically for lhe
project are allowable with lhe prior approval
of the awarding IIgeney.
39. Reconversion casts. CoslS incurred in
the restoration or nlhabllltation of the
organization'lI flldlitiell to approximately the
I
A-122:9
88me condition existing immedialely prior 10
commencement of Govemments wards. lair
wear and tear excepted. llJ'e allowable.
40. Recruiting casU. The following
recruiting costs are allowable: cost of "help
wanted" advertising. operating costs of an
emplo~ment office. costs o{ olJllrlllins an
educalional testing program. travel expenses
including lood and lodging of employees
while engaged in recruiting personnel. travel'
costs of applicants for interviews lor
prospective employment. lInd rl'.IO<::ltion COSIS
incurred incidenl 10 rr.cruilmcnl of new
employees (see paragraph 41C). Where lhe
organi7.lltion uses employment agencics.
costs not in exccBS of slandord commercial
rales lor such services are allowable.
41. Relocation costs.
a. Relocation costs ore cost~ intidenlto the
permanent change of duly sssi!mment ({or an
indefinile period or (or 1/ slllled period of not
less than 12 months) of an exi~ti;'l8 employee
or uJlon recruitment of 8 new employee.
Reloc.ation costs are allowuble. subject to lhe
limitation described In paragraphs b. c. and d.
below. provided thot:
(1) The move Is lor the br.nent of the
employer.
(2) Reimbursement to the employee is in
accordance with on established .....rillen
policy consistently follow~d by lhe employer.
(3) The reimbursemenl does nol exceed !he
employee's actual (or reasonably estimated)
expenses.
b. Allowable relocation costs for currenl
employees are limited to the (ollowing:
II) The costs of transportation of the
employee. members of his immediate familr
nnd his houserold. and personal effects to the
new location.
(2) The costs of finding a new home. such
as advance trips by employees and spouses
10 locate living quarters and temporary
lodging durinS the lransition period. up 10 a
maximum period of 30 days. including
advance trip time. "
[3) Closing Cosls. such as brokerage. legal.
and appraisal fees. mcident 10 the disposllion
of the employee', [onner bome. These cosls.
togelher with loose described in (4) below.
are limiled to 8 per cent or lbe"lsales price of
lhe employee's funnqr bome. '-
(4) The c(lntin~ costs of ownership of
the vacant former home after the settlement
or lease dale of !he employee's new
permanent home. such as mainlenance of
buildings and grOW'ld8 (exclusive of fV<,ing up
expensea). utilities. laxes. and properly
insurance.
(51 Other necessary and reasonable
expenses normaliy incident to relocation.
such as the coals or cancelling an W'lexpired
lease. disconnacting and reinstalling
household appliances. and pw-ciaasing
insurance againat loss of or damagcs to
personal property. The cost of cancelling an
unexpired lean i. limiled to three times the
monlhly rental.
c. Allowable r&location COSls ror new
employees are limiled to thoBe described in
(1) and (2) of paragraph b. above. When
relocation cosla incurred incident to the
racruitment of new employee. haye been
allowed eilher B8 1/ direct or illdirecl cost and
the employee MMigns for reasons within his
.\
)
I
Office of Management and Budget Circular A-122 (6/27/80)
conlrol wilhin 12 months aIter hire. the
orranizalionshall refund or creditlhe
Governmenl for its shore of Ibe cosl.
However Ihe costs oC travel to an oversells
location ~hall be considered travel costs in
accordance with poragraphSO and nol
reiocation cosls Cor the purpose oC this
paragraph Ii dependents are not permilled al
the location for any reason and the costs do
not include costs oC transporting household
goods. ,
d- The following costs related to relocollon
are unallowable:
(I) Fees and other costs associ~ led with
&Cquiring a new home.
1%) A loss on the sale of a former home.
13} Continuing mortgllgc principal and
iAter:st payments on a home being sold.
(4} Income taxes pnid by 6n employee
related to reimbursed relocalion costs.
42. Rental costs.
&. Subjecllo the limitations described in
parag:-aphs b. through d. of Ihis paragraph.
rental cosls are allowable 10 the extent thaI
ttite rates are reasonable in light of such
radon as; rental costs of comparable
property. if any: market conditions in the
area: alternatives available: and the type. liCe
expectancy. condition. and value oC the
prop...rty leased.
b.Rental costs under sale and leaseback
urangemenlS ar!! allowable only up to tbe
am_I that would be allowed had the
a:pnWltion continued to own the property.
Co Rental costs under less.thlln-Iength
leases a~ allowable only up to the amount
tbat would be allowed had title to the
p:operty vested in the organization. For this
purpose. a less-than.anns-length lease is one
under which one party to the lease agreement
is able to control or substantially infiuence
the actions oC the other. Sucll. leases include.
but are notlimiled to thOSE! between (i)
divisions oC an organization: (ii) organizations
llnder eommon control througb common
officers. directors. or members: and (iii) an
arganization and a director. trustee. officer.
a~ k~y l!mployee of the organization or his
Unmediale Camiiy either dlrectll' or through
corpnrations. trusts. or similar arrangements
in which they hold a controlling interest.
d. Rental costs under leases which create a
malmal equity in the leased !,rop!:!rly are
cllowable only up to the amour.lthat would
be anowed had the orsanizatiun pw'r:hased
tOe property on the date the lease agreement
was executed: e.g.. depreciation or use
allowances. maintenance. taxes. insurance
but excluding inlerest expense and other
unallowable costs. For this purpose. a
material equity in the pI'opert}. exisls if the
iease in noncancelable or is cancelable only
llpon the occurrence oC some remote
cantingency,and has one of more of the
following characteristics:
(11 The organiution has the right to
purchase the property for a price which al the
beginning oC the lease appears to be
substantially less than the probable Cair
::;arket value at the time it is permilled to
purchase the property (commonlv called a
lease with a bargain purchase option);
IZ} TItle to the property pssl;es to the
CI,~anization at some lime during or aCler the
iease period:
[3) The term of the lease (inilialterm plus
periods covered b~' bargain renewal oplions.
IC any) is equal to 75 J!'CT cent or more oC the
economic liCe of the leased property: i.e.. the
period the property Is expected to be
econoaically usable by one or more users.
43 Aoyalties and other casts for use of
pal .,~ and cop}'rights.
a. J ,yallies on a patenl or copyright or
amortization oC the cost of acquiring by
purchase a copyright. palent. or rights
thereto. necessary for the proper perfotmance
of the award are allowable unless:
(1) The Government has a license or the
right to free use oC the palent or copyrigh\.
rZ) The patenl or copyright hns been
adjudicated to be invalid. or has been
administralivelv del ermined to be invalid.
(3) The palen'l or copyright is considered 10
be unenforceable.
(4) The patent or copyright is expirnd.
b. Special care should be exercised in
determining reasonableness where the
royalties may have been arrived at as a reslllt
oC lell then arm's length bargaining: e.g.:
(1) Royalties paid 10 persons. including
corporations. aCCiliated with the organizatil)n.
tZ) Royalties paid to unaffilia ted parties.
including cOl1'orations. under an agnlement
entered into in contemplation that a
Government award would be made.
(3) Royalties paid under an agreement
entered into after an award is made to an
organization.
c. In a"y case involving a patent or
copyright Connerly owned b)' the
organization. the amount oC royalty allowed
should nol e:'Cceed' the cost which would have
been allowed had the or:anization retained
title thereto.
44. Severance pay.
a. Severance pay. also commonly referred
to as dismissal wages. is a payment in
addition to regular salaries and wages. uy
organizations to worken whose employment
is being terminated. Costs oC severance pay
are allowable only to the exlentthat in each
case. it is required by (I) law. (ii) employer-
employee agreement. (iii) estoblished policy
that con:otitutcs. in erecct. an implied
agreement on the organi:ation's part. or (iv)
circumsta:lccs oC the particular employment.
b. Cests of severance p:l)'ments are divided
into two categories as Collows:
(1) Actual nonnal trunover severance
payments shall be allocated to all aclh.ities:
0:. where the organization prnvides for a
- rellerve for nonnal severanc:!s such method
will be acceptable iC the charge to current
operati.,nsis reasonable in light oC pa).ments
actua!!}' made Cor nonnal seV!!rances over ..
representative past period. and if amoun15
cll:it;l!d are alloClited to all 3ctivilies oC the
orgaTliza tion.
(%) Abnonnal or mass severance puy is of
such a conjectural naiure that measureme"l
or costs bv means of an accrual will nct
;;chieve equity to bolh parties. Thus. accruals
for Ihis purpose are not allowable. However.
the GovernmEnt recogni7..e:: ils obligation to
participate to the extent oC Hs Cair shnre. in
any specific pa)'ment. Thus. allowability will
be considered on a case-b}'.case basis in the
event of nccurrence.
45. Speciali;;ed sen'ice facilities.
ii, The costs oC services provided by hil!hiy
A-122:10
complex or specialized facilities operAted by
the organization. such as electronic
computers and wind tunnels. are allowable
provided the chal"8es Cor the services meet
the conditions of either b. or c. oC this
paragraph and. in addition. take inlo account
any items of income or Federal financing that
qualify 81 applicable credits under paragraph
A.5. oC AlIachment A.
b. The costs oC such services. when
material, must be charged directly to
applic:lble Ilwards bued on actual u.~age of
the services on lhe basis of a schedule of
rales or eSlablished methodology that {il does
not discriminate against federally supported
Bctivities of the organization. including USB!!\!
by the organizalion for internal purposes. and
(iil is designed to recover only Ihe aggregute
costs oC,lo/1e services. The Cosls of each
service shull consist normally of both Hs
direct r:osl. !Ind its allocable share of all
indirer:t COSIS. Advance agreements pursuant
10 parugraph A.5. oC Allllchment A are
partic~larly important in this situation.
c. Where the costs incurred for a service
Are not material. they may be allocated as
Indirect costs.
40. Taxes.
3. In general. taxes which the organization
:s required to pay and whi:;!l are paid or
JJccrued inaceord.nce with generally
accepted accounting principles. and
payments mnde 10 local governments in lieu
of laxes which are commensurate with the
local government ~ervices received are
allowable. except lor (i) laxes Crom which
exemptiuns are available 10 the ol"8onization
directiv or which are availuble to Ihe
o'1laniZation based on an exemption afforded
the Government and in the laller case when
Ihe awarding agenc}' makes a"ailoible the
nP.ce~sary exem,lIion certifica tes. (ii) special
asseS:lments on land which represent capital
improvements. and {iii} Federal income taxes.
b. Any reCund oC taxes. and any p:lymenl to
the ol"Jlanization oC interest thereon. which
were allowed as award costs. wl\l be
creuited either as a cosl reduction or cash
refund. as appropriate. 10 the Governmcnt.
47. Termi/ICJtion costs. Terminatidn of
awards generally give rid. 10 the incurr!:!lice
of co.ts. or the needior speciallrentment of
costs. which would not have lIrisen had the
award nnt been tenninaled. COllt principies
cl)vering these items arr. set forth below.
The)' ani \0 be uSf:d in conjunction with the
'other provisio:ls oC this Circular in
terminalion situations.
8. Cammon itp.ms. The Cl.l5t of ilems
reasonably usable on Ihe organiution's cther
work shall not be a!lowable unlr.ss the
ol'Jlnr.ization suhmits evidence that it would
not relain such items at cost without
suslaining a loss. In deciding whether such
Hems are reasonnbly usabie I)n other work of
the organizalion. the awarding agency shouid
consider the organi7.alion's plans and urders
for current and scheduled lIcliv!ly,
Contemporaneous purchases of common
ilems by the ort:anizalion shull be rr.!lilrded
as evidence that such items are reasonllbh'
\Isable on the organizalion's other work. Any
acceplance of common ilems as allocllbln to
the lerminated portion of the aware! shall be
hmiled 10 the cxlr.ntthntlhr. C1\1antilil!~ Qf
I
Office at Management and Budget Circular A-122 (6/27/80)
such Hems on hand. in transit and on order
are in excess ollhe reasonable quantitative
reql1j~menu of other work.
b. Casu CDntinuing after I8l711illatiar~ U iD
a particular caM. despite all reseonable
eCforu by the Ol"JlUliutioa. certain costs
cannot be di.continued immediately alter the
effecUve date oC termination. such cosU are
generally allowable with.in the limitatiou. set
forth i:1this Clrcular. except that any such
costs continuing aIter t~atioD due to the
negligent or willful failure oC the orsani:ation
\0 dbcontinue such costs .hall be
unallowable. .
c:. Lou of I:seful value. Lou oC useful value
oC sredal 'tooling. mac.binery and equipment
wr;!':h WBI not charged to lbeswo.rd u ;
e:i;.:.ial ,:xpendHun is generally allowable if:
i: , Such special tooling. machinery. or
eq. :;>01lnt is not reDlonably capable o[ use iD
UF. ...!.her work oC the orogani:a tion.
p The interest oC the Government is
~:'":" ~r.t/!d by tr!U1sCer oC title or I,y other
m":I:lS de~med appropriate by lhe awarding
a:;' ncy:
Ii. Rental costs. Rental costs under
u:'l:xpired leases are generally allowable
"';'\lre clearly .hown to have been
n...sonab1y necessary Cor the performance of
Ib, terminated award less the ~sidual value
0:' such leases. if (i) the amou."t a! such rental
ci:.iml!d does not exceed the reaaonable use
val;Je oithe property leased [or the period of
U:.. .w~rd and such fu:'ther period as may be
rp..;.;m:,:ble. and (ii) the ol"JllDi%ation makes
all reasonable efforu to terminate. assign.
se\tle. or otherwise reduce the cost of such
lease. There also mav be iDcluded the cO.t oC
alterations oC such le'ued property. provided.
such al:eratiotU we~ necessar; Cor the
performance ol the award. and ai reasonable
restor::ltionrequired by the provi.iona of the
lense.
e. Setuement expenstltl. Settlement
expenses including the !ollowing ano
gem'rallyallowable:
(1) Accounting. lepL clmcal. and similar
costs reasonably necilssary io~
(a) The preparation and present.alion to
awarding agency oC settlement cl.aims and
supporting data with respect to the
terminated poniOD oC the awarti. wen the
terminatioD is ior default. (See parllgraph 4.a.
oi Anaehmenl 1.. OMB C1rc:ular No. A-l1O:
and
rb) The termination aIId settlement oC
suoawards. .
(2) Rea.onable cosla for the storage.
lransportatior_ protectioa. and dispoaitiOll oC
propeny provided b). the Government or
a~quired or produced for the .ware: except
When grantees are reimbursed lor disposala
at a predetermined amou.at in accordallCl!
with AllachmeDt N oC OME Cir.:uJar A-110.
[3) lnCireclcosts related to s'llanel aIId
wages inCUt'T'ed as settlement expense'll iD
subparagraphs [l)snd (2) of !hi. paragraph.
Normally. such indinC1 COIU shall be limited
~o frin~e benenu. oc::upancy COlt. az:d
unmeata Ie supervision.
f. Claims under subawora.s. Claims under
suoawards. including the allocable portion of
claims which are common to the award. and
to other work of Ihe o!,&ani:ation a~
generally allowable. An appropriate share o[
the orranintion's indirect expense /Ilay be
allocated lo the amount oC settlemenu with
subcontractor/subgra.ot8es: provided that the
amount allocated is otherwise coDsislent
with the buic guide!iDea contained in
Attachment A. The indJrect eJq)8DSe so
allocaled shall exclude the same and similar
COlts c:JaiDIed directly or iDd1rectJy aa
settlement expeD.ea.
4&. Training and eduCDuan CD6ts.
L COIU o[ preparation and mainten:lllCll oC
a program oC instruction iDclud.ing but oot
limited lo oD-the-jOb. c:JaslTOOm. and
apprenticeship training. designed to increase
the vocationaJ effectiveDelll ot ell!pluyec,-
including training matenals. lextbook.s.
salanes or wages of trainees (excluding
overtime compensation which might anse
thereCrcml. and [i) salanes o[ the director of
trainin; and stal! wbeD the training progrnm
is conductf:d by the orglUliution: or (ii)
tuitioD and fees when lbe train.inll i. in an
in.atitution DOt operated by the organWation.
are allowable.
b. Co.ts ofpart-Ume education. at an
undergraduate or poatgraduate collep level.
including that provided at the oroganWttion'.
own facilities. are allowable only when the
COW'3e or d8ll"lle pursued i. relative lo the
field in wbich the eC1TJloyee is oow working
or may reasoDably be expected to work. and
are limiLed to:
(1) TraiDinr materia!&.
(21 Textbooka.
'(3) Fees charge~ by the Itliucathm.u
institution.
(4) TuitioD charged. by the educational
institutioa. or in lieu of tuition. instruClors'
salaries and the telated scan oC iDdirect
cosls of the educational wtitulion to the
extent that the sum lbereo{ ia not iD exce.. oC
the tuition wbich would have ben paid 10 the
participating educational institution.
(5) Salaries and related CD.ts of instructOr3
who are employee. of the organizatiL&.
(6) Straight-time compensation DC each
employee Cor time spent aneDding cla"IN
during wcrldng hours Dot in exces. oC 156
hours per year and only 10 !Jie exlent that
cin:um.stances do not permit the operation of
classe. or attendance at claise. alter regular
worldnl hours: otherwil8 such compenaatioD
is unallowable.
c. ~su oC tuition. !eea. traini:1g materials.
and textboolca (but not sub.i.tence. salary. or
any other emolumenu) in CODDecUOII with
full-time education. includinS that provided at
the ol"Jan.i:ation's own facilities.. at a
postgraduate (but not undergraduate) college
level. are allewable only wbeD the course or
degree pW'3ued is related to the field iD which
the empLoyee i. now working or may
reasonably be expected to work. and only
where the casu receive the prior spproval oC
the awarding agency. Sucil CD&U are limited
to the costs att:ibutable to . total period not
to exceed one senool year lor eacil employee
so trained. Ln unusual cases the period may
be extended.
d. COlts oC attendance oC up to 16 weeu
per employee per year at specialized
prog:ram. specifically designed 10 enhance
!.he efCectiveness of executives or ma:1agen
or to prepare empioyees for sucb positions
are allowable. Such costs include enroUment
-I
A-122:11
fees. training materials. lextbooks and
related charges. employees' .alanea.
subsisleDce. and traveL COSLS allowable
under this paragraph do not iDclude thOM Ior
courses that are part of a d~ented
cutriC'.Jwn. wbich are allowable only to the
extent set forth iD h. and c:. above.
e. Maintenance expense. and normal
depreciation or Cair reDtaL on Cacilitles
owned or leaae<! by the ol"ganiution Cor
Inining purposes are allowable 10 the extent
SPot fortb in paragraplu 9. z::. and 42-
f. C:.mtributions or donations to
educational or treining inltttuoon.. includ.1ng
t~e aonatioD oC facilities or other propPorties.
anll icholanhips or Cellowships. a~
unallownble.
g. Training and education co.u in exccs. 01
those otherwise allowable under paragraphs
...b. and c:. of tbis paregraph may be !lllowed
wilh prior approval of the awarding agency.
To be conside~d for spproval. the
organizution must demonstrate that such
costs are consistently iDCUlT'Bd pursuant la aD
eSlublished training and educa:ion program.
and that the course or degree pursued is
relative to the field i." which the employee i.
now working or may ressoncbly be expected
10 worle.
49. Transponauan costs. Transportation
custs include freight. eJq)ress. cartage. and
postaae charoglll ~Iati.ng either \0 goods
purehssed. in process. or delivered. These'
costs are allowable. WheD IUell cosu can
readily be identified wtth the itezns involved.
lhey tnay be directly charged II
transportation cosU or added to the COlt a!
such iterDI (see paragrapb 2.3). Where
identification with the O1ateriall received
C3JUl0: readlly be made. transportatioD CO.tl
may be charged \0 the appropria la iDdirect
cost ac::ounls if the organi:ation follows a
consistent. equitable procadUl'l! in !hi.
re,pe-:.:t.
SO. Travel CD6ts.
a. Travel cost. are the eXl'enses Cor
lransportation. lodging. subsi.tenca. and
related items inCUlT'Bd by employees wbo are
in travel status on official business of the
oT'Sani%ation. Travel costs are allowabla
subject lo paragraphs b. ilirc1,lgh e. below.
when they are ~ectly attributable Lo specific
w\)rk under an .ward or.are in~ in the
normal course o[ administntioD oC the
orogani:ation.
b. Such eo.l. may be chal"Jed on an actual
buis. on a per diem or mileage basis in lieu
o[ actual co.u incurred. or on a combinattoD
of Ihe tWo. pro.,;ded the method Wled results
in charges con.istent with lbose normally
allowed by the ol"JanizatiOD in iu regular
opera oon'-
c. The diIIerence in cest between first-elau
air accommodationa and less than first-ciaas
air accommodations is unallowable except
wheD less thaD first-claas air
accoD'.moaatiou. L"'e not reasonably
Ivailable to tneet necessary mission
requirements. such II where len than fint.
elan accommodations would (i) require
ci:cuitOWl routing. (ill require t:'avel during
unreeaonahle houn. (iii) greatly inereue lbe
duration' oC tha flight. (iv) resull :n additional
costs which would offset lhe transtlortation
saving', or (v) offer IIccomt:lodatio'ns whicb.
.
, .
."
~.
tflce ot Management and Budget CIrcular A-122 (6/27180)
,re not realOnably adequate {()r the medical
'~CU o( the traveler.
C: Necessary and raaaol1abie co.ts of
amily movements &Dd personnel movemel1t:1
,( a special or man l1aNl'e al'II allowable.
,utSuant to paragrapla 40 and 41. subject to
,!ioeation on the basis oC work or time period
e::dited waea appropriate. A~vance
g:eements are particularly impo:1ant.
e. Direct charges for Coreign travel co.ts al'II
'!Iowable only whea the travel bas received
rior approva.! DC the awarding agency. Each
'e?arale Coreign trip musl be approved. For
Jut;loses of this proVision. fcreign tTlIvol ia
.:eiined as any travel outside DC Canada aad
',:ll~ Uniled Slales and ils terrilories and
css8Ssiona. However. for an organization
oealed i..l1 Coreign COWl tries. lhe lerm "Coreign
,avel.' /tIeans ll'avel outside that COWlt:j..
: C!rcu.lar.No. A-1ZZI
,"-,:tachmcal C
Soaprofil Orga.a.i.zalioas aol Subject 10 thU
C:'-cular
,"-.el'Ospace Corporation. E1 Segundo.
California
..l._-;onne Universities Association. Chicago.
minois
Associaled Universities". !JJcorporaled.
Washington.D.C.
."'-'scealed Un.iver3ities for Rcse.an:h and
Astronomy. Tucson. .~na
.':"tomie Casualty Cammission. Washinston.
D.C.
5attelle Memorial Institute. Headquartered izl
Columbus. Ohio
=:oo~avel1 National Laboratory, Upton.
New York
Center for Energy and E:."I.virocmental
Research (C!ER). (University of Puerto
Rico)
c":nmonwealth of Puerto Rico. Charles Stark
I Draper Laboratory. Locorporated
: :a:::bridlie.. Mauac:nusetts. Comparative
Animal Researcl1 Laboratorj' (CARL)
rJnh'el'5ity oITeonesseej, Oakridge..
i'er.nellltle
=:::"iron:nental1.nstitute of Mic:niS&n. An."I.
Arbor. Michigan
. !-:ar:!ord Environmental Heallh Foundation.
Richland. Washington
i.'7 Rllsnrc.; l1UliNte.. Chicago. minois
l:~lItilute for Deiense ADalysi.. Arlington.
Vil'6inia '
l:utitule of Gat Technology. Chicago. IllinDi.
Midwest Research Lostitule. Headquanered
in Kansas Cil)', Missouri
}.~itre CO:'poration. BedIord. Mauaehusetta
}.:ornana Ellert)' Research and Development
Institute. me. (ME:RDI). Butte. Montana
Satienal Radiologic:al A.st:onomy
Observatorj'. Green Bank. West Virginia
Oakridge Associated Universities. Oakridge.
Tennessee
?:-:ject Management Corj:loration. Oakrid;e.
1 er.:lessee
::.a:1d Corporation. Santa Monica. California
F.eseareh Triangle L"I.stitute. Reaearc.'l.
i'riangie Pan.. North Caroline
r.iversicie Research Institule. New York. New
York
s.z,ndia, Corporation. Albuquerque. New
~.' n yo_..,
Southem Ruearc.b wt:1tutB. Bf.nz1tqham.
Alabama
Southwul Research wt1tula. San AnloaJo.
Tua.
SRI UJlemal1oua.l. MeuJo Park. Ca.UfomJa
Syracuse Reeearch Corporation. $yn.CUIe,
New York
Universitiel Research A'lociation.
Incorporated (National Acceleration Lab).
AzJonne. Ulinois
Universities Corporation for Atmolpheric
Relearch. Boulder. Colorado
Nonprofil1.nsuranee Companies such II Blue
Crou and Blue Shield Organi:ationl
Other nonprofit orga.ai%ationa II negotiated
with awarding agencies.
fFR Doc. ~m:::ou FIled '_7~ a:~ '''1
~ COO€ '111).001....
Editorial Corrections to
OMS A.122
OFFICE OF MANAGEMEIiT AND
BUDGET
Circular A-122, "Cost P'l'incipk!s lor
Nonprofit Organizations"; Correction
AOENCY: OCfice of Management and
Budge I.
ACTJON: Final policy correction.
SUMMARr. This notice corrects errors in
the printing of cost principles for
nonprofit organizations. (45 FR 460Z2.
July 8. 1980).
FOR FURTHER IHFORMATJOH COf(T'A~
Palmer Marcantonio. Financial
Management Branch. Office of
Management and Budgel. Washington.
D.C. 20503. (202) 395-4773.
o Page 46022. column 21he second
P,mlgraph 1. change Paragraph 5
"Compensation for.Personnel Services"
10 Paragraph 6.
o Paf!e 46022. column 2 the (;econd
Pi1ragriph 2. change Paragraph 6
"Contingencies" 10 Paragraph 7.
o Page 46022. column 3:
Paragraph 4. change Paragraph 31.
"Equipment and Other Capital
Expenditures" to Paragraph 13.
o Paragraph 5. change Paragraph 26
"Meetings" to Paragraph Z4.
o Paragraph 8. change Paragraph Z7.
"Organization Casts" to Paragraph'20.
o Paragraph 7. change' Paragraph 30
"Page charges in Professtional Journals"
10 Paragraph 28.
o Paragraph 8. change paragraph 37
"Public Infonnalion Service Costs" to
Paragraph 36.
o Paragraph 9. change Paragraph 43
"Rental Costs" to Paragraph 42.
o Paragraph 9a: in the fourth line. add
"up" belween the words "only.' and
"to"; in the sixth line change "they" to
"it" .
o Parllgraph 10. change Paragraph 51
"Te",,',,1 rn.,,~" In T":1r:1l'r;>nh r;n,
-- -I
A-122:12
o Page 4{J()24. column J Paragraph
4(a)(2) after "benefits reccived" add ";
or",
o !'age 46025. column 1 Paragraph D3.
change the reference, "Paragraph Z1 of
Attachment B" to "Paragraph 19 of
Attachment D."
o Pose 46026. co{umn 1 Paragraph
4a.iii. in the sixth line. change "direct
cost" to "direct costs,"
o Page 4OO2fJ. column 2 Paragraph
Elc. chan~e "c'stablishment of arale" to
"cstablishmcnt of a final ralc."
o Page 40026. column J Parllgraph
E2b. in the third line add Ihe following
after "a Federalllgcncy shall"-"submit
its initial indirect cost proposal
immcdiatelv,"
o Paite 4&.127. column 3 Paragraph
" (3)(a). chanRc "workmen's
compensation" to "workerI"
compensation."
o Page 40028. column 1 Paragraph
Of3(b). (the second line of column 1)
chunge "Workmen's compensation" to
"workers' compensation,"
. Pace 40030. .column 3. paragraph
24b" the sixth line. change "allowable"
to "allowability".
Daniel F. Maan.
Dudgct and MarJocenrenl Officer.
rF'R Doc:. ,"...on Fllc.U-I~l; &45 om)
B1WHG COOE 3111).001-11I
Circular A-122, "Cost Principles for
Nonprom Organizations"
Correction
In FR Doc. 81-20270. appearing at
page 46022 in the issue of Tuesday. July
8. 1900. the following changes should be
made:
1. On page 46024. column three. the
second sentence in paragraph 'A.5.b.
should read. "Specific8lily. the concept
of netting such credit items against~
related expenditures should be applied
by the organization in determining the
rates or amounls to be charged to ,
Federal awards Tor services rendered
whenever the facilities or other
resources uBed in providing such
services have been fmanced directly. in
whole or in part. by Federal funds,'~
2. On page 46024. column three. the
second complete sentence in paragraph
A.B. should read. "This is particularly
true in connection with organizations
that receive a preponderance of their
support from Federal agencies,"
3. On page 46025. column one.
paragraph B.l. should read. "20. Any
direct cost of a minor amount may be
trcated as an indirect cost for rea~ons of
prnclicality where the accountin8
trelltment for such cost is consistently
nnrllj"d tn nil final r.o~t nh;rr.tivc!I,"
, ~
I
Office at Management and Budget Circular A.' 22 (6/27/80)
4. On page 46025. colwnn oce.
paragraph D.H. should read. "f.
Administra tion of group benefits on
behalI of members or clients including
life and hospital insurance. annuity or
retirement plans. financial aid. etc."
5. On page 46025. column two. the fu-st
sentence in paragraph D.l.e. should
read. "The base period for the allocation
of indirect costs is the period in which
such costs are incurred and accllmulated
for nllocation to work performed in that
period,"
O. On page'4GOZG. column one. the
second sentence in paragraph D.3.d
should reod. "The costs in the common
pool shall then be distributed 10
individualnwards included in that
function by use of a single indirect cost
rate,'.
7. On page 46026. column one. the firsl
sentence in paragraph D.3.e. should
read. '"The distribution based used in
computing the indirect cost rate for each
function may be total direct costs
(excluding capital expenditures and
other distorting items such as major
subcontracts and subgrantsJ. direct
::alanes and wa~es. or other base which
results in an equitable distribution."
8. On page 46026, column oae. the first
and second sentences in paragraph
D.4.a. should read. "Some nonprofit
organizations treat all costs as direct
costs except general administration and
-general expenses. These organizations'
generally separate their costs into three
basic cate!lories:" " "...
9. On page 480213. the last sentence in
column one (extending to colwnn two).
in paragraph 0.5. should read. "The
factors may include the physical
location of the work. the level of
administrative sUPPoJ1 required. the
nature of the facilities or other resources
employed. the scientific disciplines or
technical skills involved. the
organizational arrangements used. or
an)' combination thereof:.
10. On page 46026, column three.
paragToph E.2.i. should read. "i. To the
extent that problems are encountered
among the Federal agencies in
connection with the negotiation and
approval process. the Office of
Management and Budget will lend
assistance as required to resolve such
problems in a limely manner."'
11. On page 46030. column one. the
introductory text of paragraph 16.0. and
paragraph 16.b.(1} should read. "b. The
cosls of idle facililies are unallowable
except to the extent that: (1) They are
necessary to meet Ductuations in
workloads: or".
12. On page 45030. column one. the
second sentence in pa'ragraph l6.c.
should read. "Such costs are allowable.
provided the capacity is reasonably
antidpaled to be necessary or WIfS
originally reasonallle and is not subject
10 reduction or elimination by sublelling.
renting. qr sale. in accordance with
sound busincllS. economics or security
practices."
1,3. On page 46031. second column.
paragraph 34.c. should read. "In lIddilion
to the factors in paragraph b. above.
retainer fees to be allowable musl be
supported by e\'idence of bona fide
services available or rendered."
luLUHO COOl lS05-CIl-4ll
I
A-122:13
...
..
~UMM.L.."'n) DEVELOPMEl'T 09:1551
APPENDIX.:I.. HDR RF.372
ADMINISTRAtIVE REQUIREMENTS FOR GRA~TS AND COOPERATIVE 4-25-88
AGREEMENTS TO ~ATE, LOCAL AND FEDERALLY RECOGNIZED INDIAN TR'BAL
GOVERNMENTS
(24 CFR 85)
i
~ '
~
")
PART as-ADMINISTRATIVE
REOUIREMEHTS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO
STATE. LOCAL AND FEDERALLY
RECOGNIZED INDIAN TRIBAL
GOVERNMENTS
I-
,
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s...bpart "-General
s..c.
85.1 Purpose and scope of this part.
85.2 Scope of subpan.
85.3 Definitions.
85.4 Applicability.
8505 Effect on other ill.uancel.
85.6 Addition. and Exceptions.
Subpart B--Pre-Award Requirement,
,85.10 'forms (or applying (or grants.
85.11 Slate plans.
85.12 Special grant or subgrant condiliulU
(ur "high.risk" grantees.
Subpart C-Poat-A.wara Requirementa
rIDaneial Admini,trauoa
85.20 Standards (or financial management
s~'lUems.
85.21 P~YA'lent requiremunts.
8.5.Z2 Allowable CDS IS.
8.5.23 Period of availability of runds.
85.:4 Matching or cost sharing.
85.15 Program income.
85.26 Non-federal audits.
Chaages. Property. lIDd Subawarcis
85.30 Change, under discretionary (projectl
awards.
85.31 Real property.
85.32 Equipment.
8.5.33 Supplies.
85.34 Copyrights.
85.35 Subawards to debarred and
suspended parties.
e.'i.36 Procurement.
B5.37 Subgrants.
Reports. Records Reteation. and Enforcemeat
8.5.040 Monitoring and reportinll program
performance.
85.41 financial reportinl!.
83.42 Retention and ac:c:~ss requirement, for
records.
85.43 Enforcement.
8.5.44 Termination for convenience.
Subpart D-Attei'.tI\e-Grant Requirements
as.SO Cl05eout.
85.51 Later disallowances and i1djuslml'nts.
as.s: Collection of amounts due.
Subpart E-Entltlements (Reserved]
Aulhoril)-: Section 71dJ. Department oC
!-Iousing and Urban Development Act. 42
U.S.C.3535{d). '
(53 FR 8068, 8088, Mar. 18, 1988]
'..-::
Subpart A-General
i IS.l Purpose. &Del scope oC this part.
Thi. part estabnsnes' unifarm
administrative rules tar Federal grant.!
and cooperative ~ent. and
subawal"Cl. to Slate. locai and Indian
tribal governments.
i 15.2 Scope of subpart.
This subpart contaila general rules
pertaining t.,- ftJirpart and pl"DCedure7
for control of exceptions from rid. part.
i 85.3 DerlDitioDS.
A. ulled in this pare
.. ACCNed l:'l(~it\n"e7'. m~n the
charges'itlCl:ZrT'ed by th~ grant~ ~uring a
giyen period requirinr the proVlSroft of
(unds for: (1) Coods and othe!" tangJOIe
property received: (Z)services
performed by employeel. contractors.
.ubgrantees. subcontractors. and other
payees: and (3) other ~ts becnming
owed under prograrm far which no
current services or performance is
required. such as annuities. insurance
claims. and other benefit payments.
"Accrued income" mean. the sum of:
(1) Ea~ during a 8fY'en r:reriod from
services periO'nDed. by the srant.ee aDd.
goods and other tangib~ property
deli?ered to pun:.huen. and (Z} amocnts
becoming owed to the grantee far which
no cW'J'eDl eerviccs or periamt&oce i.s
required by the grantee.
"AcquWti.oI:l ~r. Q{ a.n it~ of
purchased equipment means the net
invoice unit price of the property
including the cost o{ modifications.
attachments. ac:c.essories. or a axili ary
3pparatus neee.S'ary to make the
property usable (or the purpose for
which it was acquired. Other charge~
such as the cost ai mstallanoc..
Ir3nsportation. taxes. duty or protective
in. transit insurance, sb.aU be incladed or
excluded from the unit acquisition cost
in accordance with the grantee's r,egular
alXounting practices.
~ Administrative" requinrnttmt5 mean
tho.e ma Uers common to grants in
l!eneral. such as financral management.
kinds and frequency of repom. and
. retention of recoJ'IiL'I'bese are
distinguished from "programmatic"
requirements.. .....hich concerD matters
that can be treated onJy on a p~-
by-program or grant-by-grant basis. sw:h
a! kinds of activities that can be
supported by grants under a particular
program.
Published by Warren, Gorham & Lamont, Inc.
"Awarding agency" mean. (11 with
respect to. grant.. Uw fedeftJ 8rencY.
and (Z) with respect toa subgraut. the
party that 8warded the _ubvaaL
'.Cash contributions'. means the
grantee', cuh outlay. including the
outlay of money cantriDGleG to tbe
8r8nt~ or .ubrranu:e by ot.be2' poblic.
8geDcies aDd in.titation&. &ad private
organiutiau.nd I.ndivicNah. Wben
8UthOriZed by Fe'Cierallegia1a.tioc.
Federal Nnds rea::ived from other
assistance agreements mar be
coaside:n:d u grantee or aubgrantee
cash contribotiona.
"Contract" meaDS (ex.cept as used in
lhe de!iniliOD& lor "grant" IUId
"subgranC' in this section and except
where quaiifi.ed by "FedemI"l a.
proc:urement COI:Itract under.. grant Ol
subgrant. uwi meana a proa..~ent
subcontract \mOO . contract.
"Coal sharing or m.tc:.Iung" mean& the
value of lbe third party in-kind
contributi.ola ud the portion of the
costs of . [edera1ly a.sai8ted protect a:
program DOt bor:l.e by the Federal
Covemment..
..Cost-type contract" rnuns a contract
or wbco.nt1'acl under a grant in which
the contractor or subcontractor is paid
on the basis of the co.sl9 it incurs. with.
or without a fee.
"EquipmentA means tangible.
nonexpendable. personal property
having a usefulli!e of mOTe than one
year and an acquisition cost of s:s.ooo or
more per unit. A grantee may use its
own definition of equipment provided
that such defU1ition would at least
include an equipment ciefll:led above.
"Expendrt~ report". means: (1) Fo!"
nonconstruction grants.. the SF-Z6S
"Financial Status Report" (or other
equivalent t'e"portr. (zt fo!" comtrnction
grants. the SF-Z71 .Outlay Report and
Requm Ear ReimbarsemenC. for otlte:-
equivalent report).
"Federalry recognized Indian tribal
government" melmS' me governing' body
or a governmental agoenc:y of any Indian
tribe. band.. nation. or other organi%eO
$TOup or community (including any
Nathe YiIlage u defined in section J of
the Alaska Nlrti.,e Claims Settlement
Act. as Stat 688) certified by the
Secretary of the !nterior ItS eHgible fo!"
the special ~ama and servi~
pravided by !tim through the Bureaa or
indian Atfain.
"Government" means a State or local
. government 0:' a federally recognized
Indian tribal ~ve:'nmenl.
41
, 09:1552'
"Grant" raeana an aMII'd of fiDaac:ial
assistance. including cooperative
agreements. In the fonn or money. or
property in Ueu of money, by the Federal
Government to an eligible grantee. The
tenn does not include technical
assistanar which proridel nmce.
instead o( money. or other IImst&DQt in
the form of l'e\'eftUff sberins. loam. Ioea
guarantees. interest subsidies.
insuraace. or directappropriationa.
Also. the term doe. nol include
a-i.ttlDCe. such ... fellowship or other
lump swn award. wbicla the srantee is
not required to account for.
"Grantee" meana the govemment lG
which a grant is awarded and which is
accountable for the use of the funds
provided. The grantee ia the entire lepl
entity even if only a particular
component of the entity is designated in
the grant award document.
"Local government" mean.a a county.
municipality. ety. tawn. township. kx:&I
pubW: awhority (iDcludin; any public
and Indian housing apnc:y wvm the
United Statu HousiDa Ad. of 1937}
school district. special di&tri.l:t.. intraa&ata
district. council of aovemmelJ.t~
(whether or not iDCOrporated 8& a
nonprofit corporatiOQ UDder stale law).
any other regioGal or iDtera&atp
government entity. or any ageDcy or
instrumentality of a ~ go'VenuReDt..
"Obiiptioas" IDIIIIDI the amoUlta of
orders placed. c:ontracIS aDd su~
awarded. soode 8IId st!n'ices re:ceiYed.
and similar tp.....-tiGDIliurins a giveD
period that Will. nqaire P8J11UIIlt by the
graDtee cbIriDg the same or a future
period.
"OMS" ml!aDS the Uaited States
Office of MaaageJlleDt ad Budpt..
"Outlays" (expenditures} meaD.
charges made to the project or program.
They may be reported on a cash or
accrual basis. For reports prepared 00 a
cash basis. outlaY' are the sum of actual
cash disbursement far direct charges for
goods and semen. the amount of
indirect expense incmTed. the value of
in-kind contributions apptied. and the
amount of cash advances and payments
made to contractors' and subgrantees.
For reportS prepared on aD accrued
expenditure basis. outlays are th~ sum
of actual cash disbursements. the
amount of indirect expense iJM:wred. the
value of inkind contributions applied.
and the new iauease (or decreese} in
the amounts owed by the grantee for
goods and other property received. for
services performed by emplgyees.
contractorL subgrantees.
subcontractors. and other payees.. and
other amoWlta becomiDg owed UDder
programs for wlUch no current services
or performance are. reC\uired. such as
annuities. inaw"ance claims. and other
benefit ~yments.
.
HOUSING AND DEVELOPMENT REPORTER
of thJ authority bylbe grantee or
subgrantee. "Termination" does Dot
include: (1) Withdrawal of funds
awarded on the buls 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 il grant or IIward
additional funds. to make a competing
or noncompeting continuation. renewal.
extension. or supplemental award: or (4)
voiding of a grant upon detennination
that the award was obtained
fraudulently. or was otherwise illegal or
invalid from inception.
''Tenns of a grant or subsrant" mean
all requirements of the grant or
subgranl. whether in statute.
regulations. or the award document.
''Third party in-kind contributions"
mean property or services which benefit
a federally assisted project or program
and which are contributed by non-
Federal third parties without charge to
the grantee. or a cost-type contractor
under the grant agreement.
"Unliquidated obligations" for reports
prepared on a cash basis mean the
amount of obligations incurred by the
grantee that has not been paid. For
reports prepared on an accrued
expenditure 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.
I
'.Percentage of com,KetioD method"
refers to . .'ftelll ander which
paymenta are made for CODltnaction
woric ac:.cordi.D& to tbe percentage of
completion of the work. rather than to
the grantee'l coat Ulc:wreG.
"Prior appronl" .-u
documentatiau evidencins COMent priGr
to incarriag apecWc coaL
"Real property" means land. including
land improvements. structures and
appurtenances thereto. excluding
movable machinery and equipment.
"Share". when referring to the
a warding agency's portion of real
property. equipment 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 wuoGbargeci Only costs are to
be counted-not the value of third-party
in-kind contributions.
"Stale" means any of the several
States of the United Stales. the District
of ColumbiL the Commonwealth of
Puerto Rico. any territory or possession
of the United Slates. or any agency or
instrumentality of a Stale exclusive or
local governments. The tenn does not
include any public and Indian housing
agency under United States Housing Act
of 1937. .
"Subgrant" means an award of
financial assistance in the form of
money. or property in Ueu of money.
made under a grant by a grantee to an
eligible subgrautee. The term includes
financial aiaistance 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 defmition 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 or the funds
provided.
"Supplies" means all tangible
personal property other than
"equipment"' as defined in this part.
'.Suspension" means depending on the
contexl. either (1) temporary withdrawal
of the authority to obligate grant funds
pending corrective action by the grantee
or lJubgrantee or a decision to tenninate
the grant. or (2) an action taken by a
suspending official in accordance with
agency regulations implementing E.O.
12549 to immedialely exclude a person
from participating in grant transactions
for a period. pending completion of an
investigation and such legal or
debannent proceedings as may ensue.
''TermIDJItion'' means pennanent
witbdrawal of the authority to obligate
previously-awarded grant funds before
that authority would otherwise expire. It
also means the voluntary relinquishment
Published by Warren. Gorham & Lamont, Inc.
(a) GeneraL Subparts A-D of this part
apply to all grants and subgrants to
governments, except where inconsistent
with Federal statutes or with regulations
authorized in accordance with the excep.
tion provision of ~ 85.6, or;
(1) Grants and subgrants to State and
local institutions of higher education or
State and local hospitals.
(2) The 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: Matemallll1d Child Health
Services: Social Services: Low.Income .
Home Energy Assistance: States'
Program of Community Development
Block Grants for Small Cities: and
Elementary and Secondary Education
other than programs administered by the
Secretary of Education under Title V.
Subtitle D. Chapter 2. Section 583-the
Secretary's discretionary grant program)
and Titles I-III of the Job Training
42
COMMUNITY DEVELOPMENT
I
)
Partnership Act of 1982 and under the
Public Health Services Act (Section
1921). Alcohol and Drug Abuee
Treatment and Rehabilitation Block
Grant and Part C of Title V. Mental
Health Service Cor the Homeless Block
Grant).
(3) Entitlement grants to carry out the
following programa of the Social
Security Act:
(i) Aid to Needy Families with
Dependent Children (Title IV-A of the
Act. not including the Work Incentive
Program (WIN) authorized by section
402(a)19(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 I. 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) EntiUementgrants 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 Cor Children
(section 13 of the Act). and
(v) Child Care Food Program [section
17 of the Act).
(5) Entitlement gp.nts under the
following program of The Child
Nutrition Act of 1966:
(i) Special Milk (section 3 of the Act).
and
(H) School Breakfast (section 4 of the
Act).
(6) Entitlement grants for State
Administrative expenses under The
Food Stamp Act of 1977 (section 16 of
the Act).
(7) A grant for an experimental. pilot.
or demonstration project that is also
supported by a grant listed in paragraph
(a)(3) of this section;
(8) Grant funds awarded under
subsection 412(e) of the Immigration and
Nationality Act (8 U.8.c. 1522(e)) and
subsection 501(a) of the Refugee
Education Assistance Act of 1980 (Pub.
1.. 96-422. 94 Stat. 1809). for cesh
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 Z44 (portions of the
Impact Aid program). except for 20
U.S.c. 238(d)(2)(c) and 24O(f)
[Entitlement Increase for Handicapped
Children}; and
(10. Payaeta ..... the V eteraD~
Administratioa's State' Home Per DIBID
Pro..... (38 U.s.c. M11a1'-
(b) Entitkmellt prt1f1Gl'U. Entitlcme~1t
programs eaumera&ed above In
t 85.4(a)(3}-(8) are subject to Subpart E.
~ 85.5 Effect oa other islauces.
All other grants administration 'p~ovi-
siems of codified program regulanons,
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 ~ 85.6.
~ 85.6 AdditioDS IUlcl exceptioas.
(a) For cla.... of 8flUt" and grantees
subject to thi. put. Federal apnc:ies
may not impoee eddiIional ,
administrative requiJeIDentI except m
codified resu)atiane pablished in the
Federal Rep.ter.
(b) Exceptions Cor cla_ of granl8 or
grantees may be authorized cWy by
OMB. .
(c) Exceptions on a case-by-case basis
and for _bpatees may be autbarized
by the affected Federal agencies.
SubpIu'f It Pra-Atmrd ~...._,.b.
~ 85.10 Forms for applyiDg for graats.
(a) Scope. (1) Thi. section pnscribes
forms and i~~,,, to be aaed by
governmeDtaJ orpDizations (except
hospitals and institutions of higher .
education operated by 8 go.emment) In
applying for grants. This section is not
applicable. boweger. 10 formula graDt
programs which do not require
applicants to apply for faods on a
project basis.
(2l This sect:ioD appliu cmly to
applications to Federal agencies for .
grants. and is not required to be applied
by grantees in dealins with applicaDta
for subgranas. However. gr&IItees are
encouraged to avoid IDGre det~ed or
burdensome applicatioD reqv.irements
for subsraats.
(b) Aathorizlld fonll& and WtrucUDIlII
for 80verrunentDl DIpUIizDliDllS.ll) In.
applying fM graDtlI. ~ts sball only
use standard applic8t:icm. forms or those
prescribed by the gnmtiDg agmcy with
the appro... of Ohm UDcier the
Paperwork Reduction Act of 1980.
(2) Applicants are not required to
submit more thal'l the origina! and two
copies of preappHcalioos or
applications.
Published by Warren. Gorham & Lamont, Inc.
I
09:1553
HDR RF --372
4-25-88
(3) AppticaDta JDMIt follow all
applicabie iuanacnona that bear OMB
clearance numbers. Federal aaeacies
may apecifJ aDd describ. the programs.
functions. or activities that will be used
to plan. blldlJe\, and evaluate the wait
under a pUlL Other MlPpiemntary
instnllCticl8lmay be ia_d OIUJ' with the
approval of OMS to Ihe exleDt reqWred
wuier the Paperwork RedudioD Act of
1980. Fof. an, ataDdard form. except the
SF-ut facesbeet. feder.l a~a ma,
shade out 01 inatruc:t the IpplicaDt to
disregard any line item that is DOt
needed. '
(4) When a lI'antee applies Car
additional funding (auch .s a
contimaalion or laapp1emeDtal award) 01
amenda a previo&aaly &Ubmitted
appUcatioD. only the atIected pages
need be aubmitted. Previoualy submitted
pages with information that is still
current aeed IiOt be rembmitted.
~ 85.11 Slate plans.
(a) Scope. The statutes for some
programs require Stales to submit plans
before receiving grants. Under
regulations implementing Executive
Order 1ZS7%. '"lntergovernmental Review'
of Federal Programs." Slates are
allowed to simplify. consolidate and
substitute plans. This section contains
additional pmvisions for plans that al"t'!
subject to regulations implementing the
Executive Ordl!1".
(b} Reqvil'f!tnt!rra. A State need meet
only Federal acbninistrative Or'
programmatic requiremeatlr for a plarr
that lU"e in statut~ or codified
regulations. -'
(c) Assurances. In each plan the State
will include an assurance that the State
shall comply with all applicable Federal
statutes and regulations in effect with
respect to the periods for which it
receives grant funding. For this
assurance and other assurances
required in the plan. the State may.
(1) Cite by mrmber tbe statutory or
regulatory provisions requiring the
assurances and afflnft that it gives the
assurances required by those provisions.
rZ} Repeat the assurance language io
the statute. or regulations. or
(3) ~Iop its own language to the
extent pemtitted by law.
(d) Amendments. A Slate wiU amend
a plan whenever necessary to reflect: (1}
New or revind Federal statutes or
regulations or (2) a materia' change in
any State law. organization. policy. or
State agency operation. The State win
obtain approval for the amendment and
its effective date but need sUOmit for
approva) only the amended pomons of
the plan.
43
09:1554. I
f 85.12 Special graat or IUhgnat
eoadJtio. for "hiP-risk" grutees.
(a) A grantee or s~aDtee may be
considered "bigh risk" if aD awarding
agency determines that . grantee or
subgrusee:.
(1) Hu. hia&ory of unaalillactOly
performaDCe. or
(2) Is not finaDdaUy stable. or
(3) Hu alll8Dapment.yatem which
don not meet the' III8ISIIIlIlIDeDt
standarda ..t forth iD tbis put. or
(4) Has not canfonned to __ 8Dd
condilion. of pnviOllS _.ard.. or
(5J Is otberwi.e not responsible: andil
the awarding agency determines that an
award will be made. special conditions
and/or restrictfonlt shall .......ripond to
the high risk condition and sban be
induded in the a...rd.
(b) Special conditionS' or restrictionS'
'may include:-
(If Payment on a reimbursement
basis;
(Z) Withholding authority to proceed
to the next phase until receipt of
evidence of acceptable performance
within a given funding period:
(3} Requiring additional. mare detailed
financial reports;
(4) AdditiODal proiec:1 mcmitoriDg:
(5) Requiring tbe8J'8Dle or aubgrantee
to obtain tecimical or JDaDageme.nt
auistance: or .
(6) Establiahins additioDal prior
approvala.
(c) U' aD awarding ltIflIlcy decides to
impose -= conciitioas. the awarding
official will notify the grutee or
subpante u early as-possible. in
writing. of:
(1} The nature of the special
conditions/ restrictions:
(%) The reesonfs) for imposin~ tbe~
(3) The- corrective actions wbich mUlt
be taken before they will be removed
and the time allowed for completing the
corrective actions and
(4) The method of requesting
reconsideration of the conditionsl
restticttonsi~osedL
Subpwt c-Pos.....WIM'd Requirements
ruwlC:ial. AdPoWowmua
f 85.%0 Standards for fiDanciaI
mauagement systems.
(a) A State must expand and account
for grant Cunds in accordance with Slate
laws and procedures for expending and
accounting Cor its own Cunds. Fiscal
control and accounting procedures oC
the State. as weU as its subgrantees and
cost-type ccmtraclars. must be sufficient
t~
[1} Permit preparation of reports
required by this part aDd the sta\utes
authori:z.ing the grant. and
HOUSING AND DE1LOPME~1 REPORTER
(2) Permit the &raciD& of fuocis to a electronic tranfter of funds methods. the
level of exp8DcDbIna adequate \0 grantee must make dr.wdo~s .. close
establish that neb fuada have not been as poesible to the time oC makmg
used in violatioa of the re.strictiGZls and disbursements. Grant..:es must monitor
probibitioaa of appli.c:ab1e statutes. cash drawdowns by their subgrantees 10
assure that they conform substantially
10 the same standards 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
finandal aaaistance aa part of a
preaward review or at any time
subsequent to award.
f 85.%1 Payment.
(a) Scope. This section prescribes the
basic standard and the methods under
which a Federal agency will make
payments to grantees. and grantees win
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 regulatioDl at 31 CFR Part
Z05.
(c) Advances. Grantees and
subgrantees shall be paid in advance.
provided they maintain or demonstrate
the willingness and ability to maintain
procedure. to. minimize the time
elapsing between the transfer of the
funds and their disbursement by the
grantee or subgrantee.
(d) Reimbursement. Reimbursement.
sball be the preferred method when the
requirements in paragraph (c) of this
section are Dot met. Grantees and
subgrantees may also be paid by
reimbursement for any construction
grant. Except as otherwise specified in
regulation. P'ederal agendes shall not
use the percentage of completion
method to pay construction grants. The
grantee or sabgrantee may-use that
method to pay its construction
contractor. and if it does. the awarding
agency's payments to the grantee or
subgrantee will be based on the
grantee's or subgrantee'" actual rate of
disbursement.
(e) Working capital advances. If a
grantee cannot meet the criteria Cor
advance payments described in
paragraph (c) of this section. and the
Federal agency has detennined that
reimbursement is not feasible because .
the grantee lacks saffident working
capital. the. awarding agency may
provide cash or a working capital
advance basis. Under this procedure the
awarding agency shan advance cash to
the grantee to cover its estimated
disbursement needs for an initial period
generally geared to the grantee's
disbursing cycle. Thereafter. the
awarding agency shall reimburse the
grantee for its actual cash
(b) The fmancial management systems
of other grantees and subgrantees must
meet the following standards:
(1) Financial nlpOrtin,. Accurate.
current. and complete di8closure of the
financial results of fiDanciaUy assisted
activities must be mad. in accordance
with the financial reporting
requirements of the grant or subgrant.
(2) Accounting records. Grantees and
subgranteea must maintain records.
which adequately identify the source
and application of funds provided for
financiaUy.asaisted activities. These
recorda must _tain infonnation
pertaining to grant or 8Ubgrant awards
and authorizations. obligations.
unobligated balances. assets. liabilities.
outlays or expenditures. and income.
(3) Internal CDlltroJ. Effective conb'Ol
and accountability must be maiDtained
for all grant and .ubgrant cash. reaJ and
personal property. and other aue!L
Grantees and subgrantees IJWIt
adequately safeguard all such property
and must assure that it is used solely for
authorized purpo8es.
(4) Budget cOIJtral. Actual
expenditures or outlays must be
compared with budseted lUIlOUAta for
each grant or .ubgranL Financial
infonnation must be related to
performance or productivi~ data.
including the developmeDt of mUt. cost
infonnation whenever appropriate or
specifu:aUy required in the graDt or
subgrant agreemenL II unit cost data are
required. estimates based CD available
documentation win be accepted
whenever possible.
(5) Allowable cost. Applicable OMB
cost priDdpies. agency p1'Op1ml
regulations. and the terms of grant and
subgrant agreements will be fonowed in
determining the reasonableness.
allowability. and allocability of costs.
(5) Source documentation. Accounting
records must be supported by such
source documentation as canceDed
checks. paid bills. payroDs. time and
attendance m:ords. contract and
subgrant award documents. ete.
(1) CtJ6h mantlBtmfent. Procedures for
minimizing the time elapsing between
the transfer of fundlr from the US
Treasary and disbarsemmt by grantees
and subgnmtea must be foUowed
whenever advance p...1.......t pr~s
are used.. Gnuatees Dl'IIR establish
reasonable procedures to ensure the
receipt of reports on suh!rantees' cash
balances and cash disbursements in
sufficient time to enable them to prepare
complete and accurate cash transactions
reports to the awarding agency. When
advances are made by letter-ol-credit or
Published by Warren, Gorham & Lamont, Inc.
44
coMMUNITY DEVELOPMENT
I
\
,
disbursements. The working capital
advance method of payment shall not be
used by grantees or subgrantees if the
reason for using such method is the
unwillingness or inability of the gAUltee
to provide timely advances.JQ.Jhe
subgrantee to meet the subgrantee's
actual cash dilbursements.
(f) Effect of progrom income. refunds.
and audit recoveries on poyment. (1)
Grantees and subgrantees shall disburse
repayments to and interest eamed on .
revolving fund before requesting
additional cash payments for the same
activity.
(2) Except a. provided in paragraph
(f)(1) of this section. grantees and
subgrantees shall disburse program
income. rebates. refunds: contract
settlements. audit recoveries' 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-
(i) 'I'be grantee or subgrantee bas
f~i1ed to comply with grant award
condit~ns or
(ii) The grantee or subgrantee is
indebted to the United States.
(2) Cash withheld for failure to comply ,
with grant award condition, but without
suspension of the graat, shall be released
to the grantee upon subsequent compli.
ance. When a grant is suspended, payment
adjustments will be made in accordance
with ~ 85.43(c).
(3) A Federal agency shall not make
payment to grantees for amounts that
are withheld by grantees or subgrantees
from payment to contractors to assure
satisfactory completion of work.
PaymeDt. sball b. made by the Federal
agency when the grantees or
subgrantees actually disburse the
withheld funda to the contracton or to
escrow aCCGUDts ettablished to assure
satisfactDIY compfetion of work.
(h) Cash depositories. (1) Consistent
with the national goal of expanding \hI!
opportunities for minority business
enterprises. grantees and subgrantees
are encouraged to use minority banks (a
bank which is oWDed at least 50 percent
by minority group members). A list of
minority owned banks can be obtained
from the Minority Business Development
Agency. Department of Commerce.
Washington. DC 20230.
(2) A grantee or subgrantee shall
maintain a separate bank account only
when required by Federal-State
agreement.
(iJ Interest earned on advances.
Except for interest earned on advances
of funds exempt under the
f ':):
....;...~..
Intergovemmental Cooperation Act (31
U.S.c. 6501 et seq.) and the Indian Self-
Determination Act (23 U.S.C. 450).
grantees and subgrantees shall
promptly. but at least quarterly. remit
interest earned on advances to the
Federal agency. The grantee or
subgrantee may keep interest amounts
up to $100 per year for administrative
expenses.
~ 85.%2 ADowable casaL
(a) Limitation on use offunds. Grant
funds may be used only for:
(1) The allowable costs of the
grantees. sutijrantees and cost-type
contractors. including allowable costs in
the form of payments to fixed-price
contractors: and
(2) Reasonable fees or profit to cost-
type contractors but not any fee or profit
(or other increment above allowable
costs) to the grantee or subgrantee.
(bl 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
it)cumng the costs. The following chart
lists the kinds of organizationa and the
applicable cost principles.
For 1M costs of _
Use 1M principles in-
State. Iocat or Indi8n OMS Clreui8I A~7.
trltllII pemment.
Private nonprofit OBW CIrc:uI8r A- 122.
organization other INn
an I') IMIItuIion 01
higher education. (2)
hosPital. or (3)
organiZation named in
OMS CIrCUlar A-I22
as n01 sulljec:11O lIlat
drcuIar.
EducatIOnal institulionI.-l OM8 CireuIar A-21.
For-proil organizaIJOrI 48 CFR Part 31.
o1llel tr\an I nosp.taI Contract Cost
and an organizalJOll Principles and
named in OSM Procedures. or uniform
QrcaIar A-I22 as IlO1 cost accounong
subject 10 lhaI CirCUlar. SUInCSaRlS lIlat comply
Wl1ft cost pnnQCIles
tceepIabIe 10 me
Feaer.I agency.
~ 85.23 Period of anilabiJity of fuDds.
(a) General. Where a funding period is
specified. a grantee may charge to the
award only costs resulting from
obligations of tbe 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
Published by Warren, Gor:ham & Lamont, Inc.
I
09:1555
HDR RF-372
4-25-88
90 days after the end of the funding
period (or as specified in a program
regulation) to coincide with the
submission of the aMual Financial
Status Report (SF-269). The Federal
agency may extend this deadline at the
request of the grantee.
~ 85.24 MatchiDg or cost sharing.
(a) Basic rule: Costs and contributions
acceptable. With the qualifications and
exceptions listed inparegraph (b) of this
section. a matching .or cost sharing
requirement may be satisfied by either
or both of the following:
(1) Allowable costs incurred by the
. grantee. subgrantee or a cost-type
contractor under the assistance
agreement. This includes allowable
costs bome by non-Federal grants or by
others cash donations from non-Federal
third parties.
(2) The value of third party in-kind
contributions applicable to the period to
which the cost sharing or matching
requirements applies.
(b) Qualifications and exceptions-(l)
Costs bome by other Federal grant
agreements. Except as provided by
Federal statute. a cost sharing or
matching requirement may not be met
by costs bome by. another Federal grant.
This prohibition does not apply to
income 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
US.Co 6702 are not considered Federal
grant funds.
(3) Cost or contributions counted
towardR othor FodoraJ co&ts:-s:haring
requirements. Neither costs nor the
values of third party in-kind
contributions may count towards
satisfying a cost sharing ot' 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) Cosu fi1Ulnced by program incomL
Costs financed by program income, as
defined in ~ 85.25, shall not count towards
satisfying a cost sharing or matching
requiremetn unless they are expressly per-
mined in the terms of the assistance
agreement. (This use of general program
income is described in ~ 85.25(&).)
(5) Services or property financed by
income eamed by contractors.
Contractors under a grant may earn
income from the activities cameu 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
09:1556
income may cout tQward satisfying a
cost sharing or matching requirement
unless other provisions of the grant
agreement expressly permit this kind of
income to be used to meet the
requirement.
(6) Records. COlts and third party in.
kind contributions counting towards
satisfying a cost sbaring or matching
requirement must be verifiable from the
records of grantees and subgrllDtee or
cost.type contracton. These records
muat show bow the vaJue 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 al1ocabUityof
regular penoMel costs.
. (7~ Special ~tan,dards for third party
m-kmd contributIons. {i} Third party in-
kind contributions count towards
S8tiS~ng a cost sharing or matching
requ~ment only where. if the party
receiving the contributions were to pay
for them. the payments would be
allowable costa.
{ill Some third party in.kind
contributions are goods and services
that if the grantee. subgrantee. or
contractor receiving the contribution
bad to pay for them. the payme'1ts
would ,have been an indirect costs.
Costa sharing or matching credit for
such contributions shall be given only if
the gtantee. subgrantee. or contractor
~as. established. along with its regular
mdirect cost rate. a special rate for
allocating to individual project. or
prognuna 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
!Datching requirement only if it results
10:
(A) An increase in the services or
property provided under the contract
(without additional eost to the grantee
or subgrantee) or
(B) A cost savings to the grantee or
subgtantee.
. (i~) The values placed on third party
lO-kln~ contributions for cost sharing or
matching purposes will conform to the
rules in the succeeding sections of this
part. If a third party in-kind contribution
is a type not treated in those sections.
the value placed upon it shall be fair
and reasonable.
(c) Valuation of donated services-(l)
Volunteer services. Unpaid services
provided to a grantee or subgrantee by
individuals. will be valued at rates
c~n~istent with those ordinarily paid for
smular work in the grantee's or
subgrantee'sorganization. If the grantee
or subgrantee does not have employees
HOUSING AND DE1LOPMENT REPORTER
performing similar work. the rates wil1 and only depreciation or use allowances
be consistent with those ordinarily paid may be counted for donated equipment
by other employers for similar work in and buildings. The depreciation or use
the same labor market. In either castro a allowances for this property are not treat-
reasonable amount for fringe benefits cd as third party in-kind contnDutiOns.
may be included in the valuation. Instead, they are treated as costs incurred
(2) Employees of other organizations. by the grantee or subgrantee. They are
When an employer other than a grantee. computed ~ allocated (us~y as indi-
subgrantee. or cost.type contractor ~ ~) 1Jl. ~rdance WI~ the cost
furnisbes free of charge the services of pnnaples ~~ 1ft ~ 8S.22. In the same
an employee in the employee's normal way as dcp~ or use all~~ances for
line of work. the services will be valued purchased eqU1~t and buildings. The
at the employee's regular rate of pay amount of deprec:uwon or use lll;1o~cc:s
exclusive of the employee's fringe ~e ~!s ~w::; :
ben~fits and ,overhead cost.s. If the the time it was donated.
semces are 10 a different line of work. '
paragraph (c)(i) of this section applies. (0 Valuation of grantee or s/Jbgra~tee
(d) Valuation of third party donated donaUK! ,real property for constructlon/
supplies ~nd loaned equipment or space. acqulSltlon. If a grantee or subgrante~
(1) If a third party donates supplies. the donat~~ ~al pro~e,~ for a ,construction
contribution will be valued at the or faclhtJtts acquISition prolect. the
market value of the supplies at the time current market value of that property
of donation. may be counted as cost sharing or
(2}lf a third party donates the use of matching. If any part of the donated
equipment or space in a building but property was acquired with Federal
retains title. the contribution will be funds. only the non-federal share of the
valued at the fair rental rate of the property may be counted as cost sharing
equipment or space. or matching.
(e) Valuation of third party donated (g) Appraisal of real property. 10 80me
equipment, buildings. and land. If a third cases under paragraphs (d). (e) and (0 of
party donates equipment. buildings. or this section. it will be necessary to
land. and title passes to a grantee or establish the market value of land or a
subgrantee. the treatment of the donated building or the fair rental rate of land or
property will depend upon the purpose of space in a building. 10 these cases. the
of the grant or subgrant. as follows: Federal agency may require the market
(1) A wards for capital expenditures. If value or fair rental value be set by an
the-,purpo8e of the grant or subgrant is to independent appraiser. and that the
asSIS~ ~e grantee or subgrantee in the value or rate be certified by the grantee,
acqw81tion of property. the market value This requirement will also be imposed
of that property at the time of donation by the grantee on subgrantee~.
may be counted as cost sharing or
matching.
(2) Other awards. If assisting in the
acquisition of property is not the
purpose of the grant or subgrant.
paragraphs (e)(2) (i) and (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 the donated land may be
counted as cost sharing or matthing.In
~'le case of a llubgrant. the terms of the
grant agreemf'nl may require that the
approval be obtained from the Federal
agency as well a. 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 funda. only the non.federal
share oC the property mav be counted as
cost-sharing or m!ltching:
(ii) If approval is not obtained under
paragraph (e)(2)(i) of this section. no
amount may be counted for donated land.
I
PubliShed by Warren, Gorham & Lamont. Inc.
~ 8S.2S Prop1UIl income.
(a) General. Grantees are encouraged
to earn income to defray program costs.
Program income includes income from
fHS for services performed. from the use
or rental of real or personal property
acquired with grant funda. from the sale
of commodities or items fabricated
under a grant agreement. and from
payments of principal and interest on
loans ~ade wit,h grant funds. Except as
otherwise proVided in regulations of the
Federal agency. program income does
not include interest on grant funds.
rebates. credits. discounts. refunds. ete.
and interest earned on any of them.
(b) Def~nition of program income.
Program lOcome means gross income
n:ceived by the grantee or .ubgrantee
~t:~ly generated by a grant supported
activity. or earned only as a result of the
~ant, agreement during the grant period.
Dunng the grant period.' is the time
between the effective date oC the award
and the ending date of the awa,rd
reflected in the final financial report.
46
~UMM U NJ. J. Y U.t:, v .t:.J..ur M.t:..N J.
;
;}
,~
.......:-
(c) Cost of generating pragra~1
income. If authorized by Federal
regulations or the grant agreement. roOsts
incident to the generation of program
income may be deducted from gross
income to 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 program
income.
(e) Royalties. IDcoaie from royalties and
, license fees for copyrighted material, pat-
ents, and inventions developed by a grant-
ee or subgrantee is program income only if
the revenues are specifically identified in
the grant agreement or Federal agency
regulations as program income. (See
~ 85.34.)
r 0 Property. Proceeds from the sale of
real property or equipment will be ban.
dled m accordance with the requirements
of ~i85.31 and 85.32-
(g) Use of program income. Prograin
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 ilie altematives). In
specifying altematives. the Federal
agency may distinguis-h between income
eamed by the grantee and income
'. earned by iiubgrantees and between the
sources. kinds. or amounts oC income.
When Federal agencies authorize the
altematives in paragraphs (8) (2) and (31
of this section. program income in
excess of any Umiw stipulated shall also
be deducted fromtbutJays.
(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.
(2) Addition. When authorized.
program income may be added to the
funds committed to the grant agreement
by the Federal agency and the grantee.
The program income shall be used for
the purposes and under the conditions of
the grant agreement.
(3) Cost sharing or matching. When
authorized. program income may be
used to meet the cost sharing or
matching requirement of the grant
agreement. The amount of the Federal
grant award remains the same.
(h) income after the award period. I
There are DO Federal requirements
goveminl the dispoaition of program
income earned after the end of the
award period (i.e.. UDtil the endiD8 date
of the final financial report. see
paragraph (a) of this section). unle.. the
term. of the agreement or the Federal
agency regulations provide otherwis~:
f 85.26 NOD-Federal audit.
(a) BasicRul& Grantees and
subgrantees are reapoaaible for
obtaining auditf-.iD accordance with the
Single Audit Act of 1984 (31 U.s.e. 1501-
, 7) and Federal agency implementin.
. regulatioDL Th. audita shall be made by
an independent auditor in accordance
with generally accepted government
auditing standardJ covering financial
and compliance audita.-
(b) Subgrantees. State or local
govemments. as those terms are defined
for purposes of the Single Audit Act.
that receive Federal financial assistance
and provide 525.000 or more of it in a
facal year to a subgrantee shall:
(1) Determine whether State or local
subgrantees have met the audit
requirements of the Act and whether
subgrantees coveTed by OMB Circular
A-110. "Uniform Requirements for
Grants and Other Agreements with
Institutions of Higher Education.
Hospitals and Other Nonprofit
Organiutions" have met the audit
requirement. Commercial contractors
(private forprofit 4ll1d private and
governmental organizations) providing
goods and services to State and local
govemments are not required to have a
single audit performed. State and local
govenments should use their own
procedures to ensure that the contractor
has complied with laws and regulations
affecting the expenditure of Federal
funds:
(2) Oeterminewhether the subgrantee
spent Federal assistance funds provided
in accordance with applicable laws and
regulations. This may be accomplished
by reviewing an audit of the subgrantee
made in accordance with the Act.
Circular A-lID. 'or through other means
(e.g.. program reviews) if the subgrantee
has not had such an audit:
(3) Ensure that appropriate corrective
action is taken within six montha after
receipt of the audit report in instance of
noncompliance with Federal laws and
regulations:
(4) Consider whether subgrantee
audits necessitate adjustment of the
grantee's own records: and
(5) Require each subgrantee to permit
independent auditors to have access to
the records and financial statements.
Published by W8mII\. Gorham & Lamont, 'Inc.
lr.:1aov ,
HDRRF -37~-
4-25-88
(c) A.uditor .lectiDn. l1i arraiiging' for
audit services. ~ 85.36 shall be followed.
ChaD,... Property. and Subawarda
.
~ 85.30 aw.aes.
(a) General. Grantees and subgrantees
are permitted to rebudget within the
approved diract co.t budget to meet
unanticipated requirements and may
make limited program changes to the
approved project. However. unless
. waived by the awardiug agency. certain
types of po....award change. in budgetJ
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) contain
requirements for prior approval of certain
types of costs. Except where waived. those
requirements apply to all grants and sub-
grants even if paragraphs (c) through (0 of
this section do not.
(c) Budget changes. (1)
Nonconstroction projects. Except as
stated in other regulations or an award
document. grantees or subgrantees shall
obtain the prior approval of the
a warding agency whenever any of the
following changes is anticipated under 8
nonconstruction a ward:
(i) Any revision which would result in
the need for additional funding.
(ii) Unless waived by the awarding
agency. cumulative transfers among
direct cost categories. or. if applicable.
among separately budset.ed 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 5100.000."
(iii) Transfer of funds allotted for
training allowances (i.e~ from direct
payments to trainees to other expense
categories).
(2) Construction projects. Grant'ees
and subgrantees shall obtain prior
written approval for any budget revision
which would result in the need for
additional funds.
(3) Combined constroction and
nonconstruction projects. When a grant
or subgrant provides funding for both
constnlction and nonconstruction
activities. the grantee or subgrantee
must obtain prior written approval from
the awarding agency before making any
fund or budget transfer from
nonconstruction to construction or vice
versa.
(d) Programmatic changes. Grantees
or subgrantees must obtain the prior
approval of the awarding agency
whenever any of the following actions is
anticipated:
47
, 09:1558
(1) Any revision of the scope or
objectives 01 the project (regardless of
whether there is an associated budget
revision requiring prior approval).
(2) Need to extend the period of
availability of funds.
(3) Changes in key persons in cases
where specified in an application or a
grant award. In research projects. a
change in the project director or
principal investigator shall always
require approval unless waived by the
awarding agency.
(4) ~Dder Donconstr:uttiOD projects.
CODtractmg out, subgrantmg (if authorized
by law) or otherwise obtaining the services
of a third party to perform activities which
are. central to the ~u:poses of the award.
This approval reqwrement 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 approval
requirements. The awarding agency may
not require prior approval for any
budget revision which is not described
in paragraph (c) of tbis section.
(0 Requesting prior approval. (1) A
request for prior approval of any budget
revision will be in the same budget
formaJ the grantee used in its
, application and shall be accompanied
by a narrative justification for the
proposed revision. '.
(2) A ~quest tor a prior approval under
the applicable Federal cost principles (see
~ 85.22) may be made by letter.
(3) A request by a lJubgrantee for prior
lipproval will be addressed in writing to
the ,grantee. The grantee will promptly
review such request and shall approve
or disapprove the request in writing. A
grantee will not approve any budget or
project revision which is inconsistent
wi th the purpose or terms and
conditions of the Federal grant to the
grl.Ontee. If the revision. requested by the
$ubgrantee would result in a change to
the grantee's approved project whic:h
requires Federal prior approval. tlte
grantee will obtain thEr Federal d:;lf!ncy's
approval before approving the
subgrantee's request.
~ 85.31 Real property.
. (a) Title. Subject to the obligations
and conditions set forth in this section,
title to real property acquired under a
g:ant or subgrant will vest upon
acquisition in the grantee or subsran!ee
respectivelv.
, (h) Use. Except as otherwise provided
oy Federal statutes. real property will bp.
used for the originally authorized
purposes as long as needed for thaI
purposes, and the grantee or subgrantee
shall not dispose of or encumber its title
or other interests.
I
HOUSING AND DEVELOPMENT REPORTER
I
(c) Disp08itian. When real property is
no longer needed for the originally
authorized purpoae. the grantee or
subgrantee will request disposition
instructions from the awarding agency.
The instructiona will provide for one of
the followiq altematives:
(1) Rstsntion of title. Retain title after
compensatin8 the awarding qency. The
amount paid to the awarding agency
will be computed by applying the
awarding qency's percentage of
participation in the cost of the original
purchase to the fair market value of the
property. However, in those situaliona
where a grantee or 8ubgrantee 11
disposing of real property acquired with
grant funds and acquiring replacement
real property under the same program.
the net proceeds from the diap08ition
may be used as an offset to the cost of
the replacement property.
(2) Sale of property. Sell the property
lind compensate the awarding qency.
The amount due to the awarding apncy
will be calculated by applying the
awarding agency's percentap of
participation in the cost of the criginal
purchase to the proceeds of the sale
after deduction of any actual and
reasonable selling and fixiDs.up
expenses. U 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. lalel
procedures shall be followed that
provide for competition to the extent
practicable and result in the highest
poasible return.
(3) Transfer of title. Transfer title to
the awarding agency or to a third-party
designated I approved by the awarding
agency. The grantee or subgrantee shall
be paid an amount calculated by
applying the grantee or subgrantee'.
percentage of participation in the
purchase of the real property to the
current fair marketvawe of the
property.
~ 85.32 Equipmeat.
(a) Title. Subject to the obligations
and conditiona set forth in thia section.
title to equipment acquired under a
grant or subgrant will vest upon
acquisition in the grantee or subgrantee
respectively.
(b) States. A State will use. manap.
and dispose of equipment acquired
under a grant by the State in accordance
with State lawI and procedures. Other
grantees and lubgrantees will follow
paragraphs(c)~ugh(e)oftltil
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.
acquired as long a. needed. whether or
not the project or program continues to
be supported by Federal fundI. When no
longer needed for the original program
or project. the equipment may be used in
other activities currently or previously
supported by a Federal agency.
(2) The grantee or subgrantee shall
al80 make equipment available foru.e
on other projecta or programJ currently
or previouaJy supported by the Federal
Government. providing such use will not
interfere with the work on the projects .
or program for which it wa. originally
acquired. First preference for other use
sball be given to other programs or
projects supported by the awarding
agency. User fees should be considered
if appropriete.
(3) Notwithstanding the encouragement
in ~ 85.25(a) to earn program income, th~
grantee or subgrantce 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.
[4) When acquiring replacement
equipment. the grantee or sub grantee
may use the equipment to be replaced as
a trade-in or sell the property and use
the proceeds to offset the cost of the
replacement property. subject to the
approval of the awarding agency.
(d) Management requirements.
Procedures for managing equipment
(including replacement equipment),
whether acquired in whole or in part
with grant funds. until di.position take.
place will. as a minimum. meet the
following requirement5:
(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 holda title. the acquisition
date. and COlt 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
safeguarda to prevent 1088. damage. or
theft of the property. Any loss. damagft,
or theft shall be investiRated.
(4) Adequate maintenance procedures
must be developed to keep the property
in good condition.
(5) If the grantee or subgrantee is
authorized or required to sell the
property. proper sales procedures must
48
COMMUNITY DEVELOPMENT
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be established to ensure the higiiest
possible return.
(e) DisfJ06ition. When original or
replacement equipment acquired under
a grant or subgrant i. no longer needed
for the original project or program or fOI
other activities currently or previously
.upported by a Federal agency.
di.po.ition of the equipment will be
made a. followa:
(1) Items of equipment with a current
per-unit fair market value oC 1..1 than
55.000 may be retained. .old or
otherwise di,poled of with no further
obligation to the awarding agency.
(2) Item. of equipment with a current
per unit fair market value in excess of
55.000 may be retained or sold and the
awarding agency shall have a right to an
amount calculated by multiplying the
current market value or proceecla from
sale by the awarding agency's share of
the equipment.
(3) In cases where a grantee or
subgrantee faUs to take appropriate
disposition actions. the awarding agency
may direct the grantee or subgrantee to
take excess and disposition actions.
(0 Federal equipment. In the event a
grantee or subgrantee is provided
federally-owned equipment: .
(1) TItle will remain vested in the
F~eral 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 transfen 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
shllll follow 8S.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. ntle to supplies acquired
under a grant or subgrant will vest. upon
acquisition. in the grantee or subgrantee
respectively.
(b) Dispoaition. If there is a residual
inventory of unwNJd supplies exceeding
55.000 in total aS8relate (air market
value upon termination or completion of
the award. and if the supplies are not
needed for any other federally
sponsored prosram. or projec~ the .
grantee or aubsnmtee shall compennte
the awardins agency for its share.
~ 85.34 Copyrights.
The Federal aWllrding agency
reserves it royalty-free. nonexclusive.
and irrevocable license to reproduce.
publiah or otherwise use. and to
authorize othen to use. for Federal
Government purposes:
(a) The copyright in any work
developed under a grant. aubgrant. 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 Sub.wards .10 debarred lUld
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 ~eUgibl.
for participation in Federal assllltance
programs under Executive Order 12549.
"Debarment and Suspension. "
~ 85.36 Procurement
(al States. When procuring propertr
and services under a grant. a State will
follow the same policies and procedures
it uses for procurements from ita non-
Federal funds. The State will ensure that
, every purchase order or o~er contract
includes any clauses requU'ed by
Federal statutes and executive orden
and their implementing regulations.
Other grantees and subgrantees ~il1 .
follow paragraphs (hI through (i) m this
section.
(b) Procurement standards. (1)
Grantees and subgrantees will use their
own procurement procedures which
reflect applicable State and local laws
and regulations. prodded that tile
procurements conform to applicable
Federal law and the standards identified
in this section.
(2) Grantees and su~~tees .will
maintain a contract admInIstratIon
system which ensures th~t c~ntracton
perform in accordan~e W1~h tne te~s.
conditions. and speCIficatIons of theIr
Published by Warren, GotI'1am & Lamont, Inc.
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09:1559
HDR RF -372
4-25-88
contracts or purchaae orders.
(3) Grante.. and subgranteea will
maintain a written code of .tandards of
conduct governing the performance of
their employee. engaged in the award
and administration of contracts. No
employee. officer or agent of the grantee
or lubgrantee shall participate in
selection. or in the award or
admiDiatration of a contract supported
by Federal fund. if a conflict of interest.
real or apparent. would be involved.
Such a conilict w~uld arise when:
(i) TAe employee. officer or qeDi.
(ii) Any member of hi. immediate
famUy.
(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 ~or accept
gratuities. favors or anything of
monetary value from contract on.
potential contractors. or parties to
subagreements. Grantee and
subgrantees may set minimum roles
where the Cinancial interest is not
substantial or the gift is an unsolicited
item of nominal intrinsic value. To the
extent permitted by State or local law or
regulations. such standards or conduct
will provide for penalties. sanctions. or
other disciplinary actions for violations
of such standards by the grantee's and
subgrantee's officen. employees. or
agents. or by contracton o~ their age~ts.
Th2 awarding agency may III regulation
provide additional prohibitions relative
to real. apparent. or potential conflicts
of interest.
( 4) Grantee and sub grantee , . .
procedures will provide for a revIew of
propo8ed procurements to avoid , .
purchase of i1nDecessary or duphcative
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. gnntees 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 use is feasible and reduces project
costs.
49
09:1560
(1J Grantees and lubgnmtees are
encouraged to \l8e vahle engineering
clauses in contractl for con.u-uction
projects of sufficient lize to offer
reasonable opporhmitiel for cost
reductionl. Value engineering il a
systematic and creative anaylsis of each
contract item or ta.k to ensure that its
es.ential function i8 provided at the
overaJllower coat.
(8) Grantees and subgranteea wiU
make award80nly to rel])0ft4ibie
contractors pO'lelSinl the ability to
perfonn succ888fully ander tha terms
and conditions of a proposed
procurement. Couideralioa will be
given to IUcb matters as contractor
integrity. compliance with public policy,
record of past performance. and
financial and technical resources.
(9) Grantee. and lubgranteel will
maintain records sufficient to detail the
significant history of a procurement.
These records will indud8'. but are not
necessarily limited to the followms:
rationale for the method of procarement.
selection of contract type. contractor
selection or rejection. and the basi. for
the contract price.
(10) Grantees and subsrantees will
use time and material type contracts
only-
(i) Alter 8 determination that no other
contract is suitable. and
(ii) If the contract includes a ceiling
price that the contractor exceeds at its
own risk.
(11) Grantees and subgrantees alone
will be responsible. in accordance with
good administrative practice and sound
busines. judgment. for the settlement of
all contractual and ac:lnUnistrative 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 asencies will not
substitute their judgment for that of the
grantee or subarantee 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 procedure. to handle and
resolve disputes relating to their
procurements and shall in all instances
disclose inlonnation regarding the
protest to the awarding agency. A
protestor must exhaust all
administrative remedies with the
grantee and lubgrantee before pursuing
a protest with the Federal agency.
Reviews of protests by the Federal
agency will be limited to:
(i) Violations of Federal law or
regulations and the standards of this
section (violations of State or local law
HOUSING AND DEVELOPMENT REPORTER
I will be under the jurisdiction of State or
local authOrities) and
(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 lubgi-antee.
(c), Compmtion. (1) All procurement
transactions will be conducted in a man-
ner providing full and open competition
consistent with t)le standards ~ 8S.36.
Some of the situations considered to be
restrictive oC competition include but are
not liIIiited to:
(i) Placing unreasonable requin:ments
un firms in order for them to qualify to
do business.
(ii) Requiril18 urmecesaary experience
and excessive bonding.
(iii) Noncompetitive pricing practices
between finns or between affiliated
companies.
(iv) Noncompetitive awards to
consultants that are on retainer
contract&.
(vi Organizational conflicts of
interest.
(vi) Specifyins only a "brand name"
product instead of aHowing "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 _Pltorily or
administratively imposed in-State or
local geographical preferences in the
evaluation of bids or proposals. except
in those cases where applicable Federal
statute. I!xpressly mandate or
encourage geographic preference.
Nothing in this lection preempts State
licensing laws. When contracting for
architectural and engineering (AlE)
services. geographic location may be a
selection criteria provided its
application leave. as appropriate
number of qualified finRa. jiven the
nature and size of the pl'OjecL to
compete for the coatract.
(3) Grantees williaave 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 shaH 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. Gornam & Lamont. Ine.
pro1.ct specifICations should be
8vO'ftit:C if at all pOlsible. When it is
impractical or uneconomical to make a
clear and accurate description of the
technical requirements. a "brand name
or equal" description may be, used as a
means to define the performance or
other salient requirements of a
procurement. The specific features of the'
named brand which must be met by
offerora shall be clearly stated: and
(ii) Identify all requirements which the
offerors muat fulfill and all other factors
to be used in evaluating bids or
propoaals.
(4) Grantees and subgrantees will
ensure that all prequalified lists of
persoD8. rums. or products whi~ are
used in acquiring goods and servIces are
current and include enough qualified
sources to ensure maximum open and
free competition. Also. grantees and,
subgrantees will not preclude potentia!
bidders from qualifying during the
solicitation period.
(d) Methods of procurement to be
foJlowed. {1) Procurement by S/nQIJ
purchtJMI procedUJ"tlS. Small pW'Chase
procedutea are those relatively simple
and informal procurement methods for
securing aervices. supplies. or otiler
property that do DOt cost more than
525.000 in the aggregate. If small
purchase procW'ementB are used. price
or rate quotations will be obtained from
an adequate number of qualified
sources.
(2) Procurement by sealed bids (formal
advertising). Bids ate publicly solicited
and a firm-fIXed.price contract (lump sum
or unit price) is awarded to the responS1ble
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 construction, if the condi-
tions in ~ 85.36(d)(2)(i) apply.
(i) In order for sealed bidding to be
feasible. the' following conditions should
be present
(A) A complete. adequate. and
realistic specification or purchase
description ill available:
(B) Two or more responsible bidders
are willing and able to compete
effectively for the business; and
(Cl The procurement lends itself to a
f1111l fixed price contract and the
selection of the successful bidder can be
made principally on the basis of price.
(ii) If sealed bids are used. the
following requirements apply:
(A) The invitation for bids will be
publicly advertised and bids shall be
solicited from an adequate number of
known suppliers. providing them
sufficient time prior to the date set for
opening the bids;
(8) The in..-itation for bids. which will
include any specifications and pertinent
50
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COMMUNITY DEVELIMENT
attachments. shall define the items or
services in order for the bidder to
properly respoDd:
(e) All bids will be publicly opened at
.the time and place prescribed in the
invitation for bids;
{D) A firm fixed.price contract award
will be made in writing to the lowest
responsive ad rnponsible bidder.
Where Ipecified in bidding docwnenta,
factors aac:b al di8COUftts. transportation
cost. and life cycle costs shall be
considered in detennming which bid is
lowest. Paymat diaCCJ1mtl will only be
used to detenaine the-low bid when
prior experieDc:e indicates that such
discounts are usually taken advantage
of: and
(E) An, or aIt bids may be reiected if
there ill a 8011ftd documented reason.
131 Procurement by competiti're
proposals. The technique of competitiye
proposals is normally conducted with
more than one source submitting an
offer. and either a ftxed;Jrice or cost-
reimbursement type contract is
awarded. It is generally gsed when
conditions are not appropriate for the
use of sealed bids. II this method is,
used. the following requirements apply:
(i) Requests for proposals will be
publicized and identify all evaluation
factors and their mati... importance.
Any response to pubficized requests for
proposals shall be honored to the
maximum extent practical:
(ii) Proposais will be solicited from ..n
adequate number of qualified sources:
(Hi) Grantees and subgrantees will
have a method for conducting technical
evaluations of the pfoposais received
and for selecting awardees:
(iv) Awards will be mach! to the
responsible firm whose proposal is most
advantageous to the program. with price
and other factors considered: and
(v) Grantees and subgrantees may use
competitive proposal procedures for
qualifications-based procurement of
architectural/ engineering (A/E)
professional semces whereby
competitors' qualifications are
evaluated and the most qualified
competitor is selected. subject \0
negotiation of fail' and reasonable
compensation. The method. where priCl!
is not used as a selection factor. can
only be used in procurement or AlE
professional services. It cannot be used
to purchase other types of services
though A/E firms are a potential source
to perform the proposed effort.
(4) Procurement by noncompetitive
proposals is procurement through
solicitation of a proposal from only one
source. or after solicitation of a number
of sources. competition is determined
inadequate.
(i) Procurement by noncompetitive
)
;
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proposals may be used only when the
award of a contract is infeasible under
small purchase procedures. sealed bids
or competitl,.. proposals and one of the
following circumstances applies:
(A) The item i. available only from a
single source:
(B) The public exigency or emergency
for the requirement will not permit a
delay resultins from competitive
solicitation.
(C] The awarding agency authorizes
noncompetitive proposals: or
(D) After .olicitation oC a number of
sources. competition is determined
inadequate.
(ii) Cost analysi.! i.e~ verifying the
proposed cost data. the projection. of
the data. and the evaluation oC 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
p!'e.award review in accordance with
paragraph (s) of this section.
(e) Contracting with smaJJ and
minority firms, women's business
enterprise and labor surplus area firms.
(1) The grantee and subgrantee will take
all nece!!' ,~ 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 pennit maximum
participation by small and minority
business. and women's business
enterprises:
(iv) Establishing delivery schedules.
where the requirement permits. which
encourage participation by small and
minority business. and women's
business enterprises:
(v) Using the services and assistance
of the ,Small Business Administration.
and the Minority Business Development
Agency of the Department of Commerce:
and
(vi) Requiring the prime contractor. if
subcontracts are to be let. to take the
affirmative steps listed in paragraphs
(e)(2) (i) through (v) of this section.
(0 Contract cost and price. (1)
Grantees and subgrantees must perform
a cost or price analysis in connection
with every procurement action including
contract modifications. The method and
degree of analysis is dependent on the
facts surrounding the particular
procurement situation. but as a starting
Published by Warren. Gorham & Lamont, Inc.
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09:1561
HDR RF .372
4-25-88
point. grantees must make independent
estimates before receiving bids or
proposals. A cost analysis must be
performed when the offeror is required
to submit the elements of his estimated
cost. e.g.. under professionaL consulting.
and architectural engineering services
contracts. A co.t analysis will be
neces.ary when adequate price
competition is lacking. and for sole
source procurements. including contract
modificationa or change orders. unless
price resonableness can be established
on the basis of a catalog or market price
of a commercial product sold in
substantial quantities to the general
public or based on prices set by law or
regulation. A price analysis will be used
in all other instances to determine the
reasonableness of the proposed contract
Drice.
. (2) Grantees and subgrantees will
negotiate profit as a separate element of
the price for each contract in which
there i. no price competition and in all
case. 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
iDcurred or cost estimates included in
negotiated prices are consistent with Fed-
eral cost principles (see ~ 85.22). Grantees,
may reference their own cost principles
that comply with the applicable Federal
cost principles.
(4) The cost plus a percentage of cost
and percentage of construction cost
methods of contracting shall not be
used.
(g) Awarding agency review. (1)
Grantees and subgrantees must make
available. upon request of the awarding
agency. technical specifications on
proposed procurements where the
awarding agency believes such review
is needed to ensure that the item and/or
service specified is the one being
proposed for purchase. This review
generally will take place prior to t~
time the specification is incorporated
into a solicitation document. However. if
the grantee or subgrantee desires .to
have the review accomplished after a
solication has been developed. the
awarding agency may still review the
specifications. with such review usually
limited to the technical aspects of the
proposed purchase. .
(2) Grantees and subgrantees must on
request make available for awarding
agency pre-award review [ delete .....]
51
09-.1562
procurement documents. such as
requests for proposals or invitations for
bids. independent cost estimates. etc..
when:
(i) Agrantee's or subgrantee's
procurement procedures or operation
faUs to comply with the procurement
standards in this seciton: or
(ii) The procurement is expected to
exceed S2S.000and is to be awarded
without competition or only one bid or
off~r is received in response to a
solicitation: or
(iii) The procurement. which is
. expected to exceed $2.5.000. 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 525.000.
(3) A grantee or subgrantee will be
exempt from the pre.award review in
paragraph (8)(2) of this section if the
awarding agency determines that its
procurement systems comply with the
standards of this section.
(i) A grantee or subgrantee may
request that its procurement system be
reviewed by the awarding agency to
determine whether its system meets
these standards in order for its system
to be certified. Generally. these reviews
shan occur where there is a continuous
high.dollar funding. and third-party
contracts are awarded on a regular
basis:
(ii) A grantee or subgrantee may self.
certify its pJ:Ocurement system. Such
self-certification shall not limit the
awarding agency's right to survey the
system. Under a.sell-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.
f.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
ti'le awarding agency's interest is
adequately protected. lfsuch a
determination has not been made. the
minimum requirements shall be as
follows:
(1) A bid guarantee from each bidder
,equivoJentto five percent of the bid
price. The "bid guarantee" shall consist
of 3 firm commitment such as a bid
HOUSING AND DEVELOPMENT REPORTER\
I bond. certified check. or other (conlruction contracts awarded by \
npgotiable instrument accompanying a grantees an~ subgrantees in excess of
bid as assurance that the bidder will. Sz.ooo. and In excess of SZ.500 for other
upon acceptance of his bid. execute contracts which involve the employment
such contractual documents as may be of mechanics or laborers)
rp.quired within the lime specified. (7) Notice of awarding agency
(2) A performance bond on the part o{ requirements and regulations pertaining
the contractor for zoo percent of the 10 reporting.
cuntract price: A "perfoJ?Danc,e bond" is (8) Notice of awarding agency
one executed m connedlon With a requirements and regulations pertaining
contract t~ secu~ f~lfiUment of aU the to patent rights with respect to any
contractor s obllgallons 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
contractor for zoo percent of the contract.. .
contract price. A "payment bond" is one (9) Awarc:"ng agenc:Y .requlremen~s
executed in cOMection with a contract and regulatIons pertalnmg to copynghts
to assure payment as required by law of and rights in data.
all persOns 8upplying labor and material (10) Access by the grantee. the
in the execution of the work provided 8ubgrantee. the Federal grantor ag~ncy.
for in the contract. the Comptroller General of the United
(i) Contract pravisions. 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 changesl' remttdies. 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~isu:a~ve. contractual. or subgrantees make final payment~ and
legal remedle~ m mstances where all other pending matters are closed.
contractors V1ol~te or breach con~ct (12) C r c w'th all applicable
terms and proVIde for such sanctions omp Ian e I .
and p~naltjes as may be appropriate. ~tandards. orders: or requirements .
(Contracts other than small purchasesJ Issued under sectIon 306 of ~he Clear AIr
(2) Termination for cause and for Act (42 U.S.C. 1857(h)). section 508 of the
convenience by the grantee or Clean ~ater Act (33 U.S.C. 1368).
subgrantee including the manner by Exe~utJve Order 11738: and
which it will be effected and the basis EnV1ronmental ProtectIon Agency
Cor settlement (All contractJ in excess regulations (40 eFR Part 15). (Contracts.
of $10.000) subcontracts. and subgrants of amounts
(3J Compliance with Executive Order in excess of $100.000)
11246 of September 24. 1965 entitled (13) Mandatory standards and policies
"Equal Employment Opportunity:' a. 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 regulation. (41 with the Energy Policy and
CFR Part 60). (All construction contracts Conservation Act (Pub. 1.. 94-163).
awarded in excess of $10.000 by ~ 85.37 Subgraats.
grantee. and their contractors or iaJ Slales. States shall follow state
sublZl'Bntees) law and procedures when awarding and
(4J Compliance with the Copeland administering subgrants (whether on a
'.Anti-Kickback" Act (18 U.S.c. 874) as cost reimbursement or fixed amount
supplemented in Department of Labor basis) of financial assistance to local
regulations (29 CFR Part 3). (All and Uadian 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 statute and executIVe orders
supplemented by Department of Labor and their implementing regulations:
regulations (29 CFR Part 5). (2) Ensure that subgrantees are aware
(Construction contracts in excess of of requirements imposed upon them by
$2.000 awarded by grantees and Federal statute and regulation:
subgrantees when required by Federal (3) Ensure that a provision tor compli-
grant program legislationJ anee with Section 85.42 is placed in every
(6) Compliance with Sections 103 and cost reimbursement subJ[tlU1t: and
107 of the Contract Work Hours and (4) Conform any advances of grant
Safety Standards Act (40 U.S.c. 321-330J funds to subgrantees substantially to the
as supplemented bv Department of same standards of timing and amount
Labor regulations (29 CFR Part 5). that apply to cash advances by Federal
agencies.
Publisl'lecl by Warren. Gorham & Lamont. Inc.
57
COMMUNITY DEVELOPiNT
(b) All other grantees. All other grantees
shaH follow the provisions of this pan
which are applicable to awarding agencies
when awarding and administering sub-
grants (whether on a cost reimbursement
or fixed amount basis) of tinancial assis-
tance to local and Indian tribal govern-
ments. . Grantees shall:
(l) Ensure that every subgrant includes
a provision for compliance with this pan;
(2) Ensure that every subgrant includes
any clauses required by Federal statute
and executive orders and their imple-
menting regulations; and
(3) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statutes and regulations.
(c) Exceptions. By their own. terms,
cenain provisions of this pan do not
apply to the award and administration of
subgrants:
(1) Section 85.10;
(2) Section 85.11;
(3) The letter-of-credit procedures spec-
ified in Treasury Regulations at 31 eFR
Pan 205, cited in ~ 85.21; and
(4) Section 85.50.
.:s,
':i
-!~-
'-'"
Reports, Records, Retention, and
Enforcement
.
~ 85.40 Monitoring and reporting
program performance.
/ (a) Monitoring by grantees. Grantees
are responsible for managing the dav-to.
day operations of grant and subgrant
supponed activities. Grantees must mon-
itor grant and subgrant supponed activi-
ties to assure compliance with applicable
Federal requirements and that perfor-
mance goals are being achieved. Grantee
monitoring must cover each program,
function or activity.
(b) Nonconstruction perfor/1lllllce re-
ports. The Federal agency may, if it
decides that performance information
available from subsequent applications
contains sufficient information to meet
its programmatic needs, require the
grantee to submit a performance repon
only upon expiration or termination of
grant suppon. Unless waived by the Fed-
eral agency this repon will be due on the
same date as the tinal Financial Status
Repon. .
(1) Grantees shall submit annual per-
formance repons unless the awarding
agency requires quanerly or semiannual
repons. However, performance repons
will not be required more frequently than
quanerly. Annual repons shall be due 90
day~ after the grant year, quanerly or
semi-annual repons shaH be due 30 days
after the reponing period. The tinal per-
formance repon will be due 90 days after
the expiration or termination of grant
suppon. If a justified request is submitted
..
by a grantee, the Federal agency may
extend the due date for any performance
repon. Additionally, requirements for un-
necessary performance repons may be
waived by the Federal agency.
(2) Performance repons will contain,
for each grant, brief information on the
following:
(i) A comparison of actual accomplish-
ments to the objectives established for the
period. Where the output of the project
can be quantified, a computation of the
cost per unit of output may be required if
that information will be useful.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(iii) Additional peninent information
including, when appropriate, analysis and
explanation of cost overruns or high unit
costs.
(3) Grantees wiH not be required to
submit more than the original and two
copies of performance repons.
(4) Grantees will adhere to the stan-
dards in this section in prescribing perfor-
mance reponing requirements for sub-
grantees.
(c) Construction performance reports.
For the most pan, on-site technical in-
spections and 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 repons only when
considered necessary, and never more
frequently than quarterly.
(d) Significant developments. Events
may occur between the scheduled perfor-
mance reponing dates which have signiti-
cant impact upon the grant or subgrant
supponed activity. In such cases, the
grantee must inform the Federal agency
as soon as the following types of condi-
tions become known:
( 1) Problems, delays, or adverse condi-
tions which wiH 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.
<0 Waivers. extensions. (1) Federal
agencies may waive any performance
repon required by this pan if not needed.
(2) The grantee may waive any perfor-
mance repon from a subgrantee when not
needed. The grantee may extend the due
date for any performance repon from a
subgrantee if the grantee wiH stiH be able
Published by Warren, Gomam & Lamont, Inc.
I
09: 1563
HDR RF-417
1-15-90
to meet its performance reponing obliga-
tions to the Federal agency.
~ 85.41 Financial reporting.
(a) General. (1) Except as provided in
paragraphs (a)(2) and (5) of this section,
grantees will use only the forms specified
in paragraphs (a) through (e) of this
section; and such supplementary or other
forms as may from time to time be
authorized by OMB, for:
(i) Submitting financial repons to Fed-
eral agencies, or
(ii) Requesting advances or reimburse-
ments when letters of credit are not used.
(2) Grantees need not apply the forms
prescribed in this section in dealing with
their subgrantees. However, grantees shall
not impose more burdensome require-
ments on subgrantees.
(3) Grantees shall follow all applicable
standard and supplemental Federal agen.
cy instructions approved by OMB to the
extend required under the Paperwork
Reduction Act of 1980 for use in connec-
tion with forms specified in paragraphs'
(b) through (e) of this section. Federal
agencies may issue substantive supple-
mentary instructions only with the ap-
proval of OMB. Federal agencies may
shade out or instruct the grantee to disre-
gard any line item that the Federal agenc)'
finds unnecessary for its decisionmaking
purposes. ,
(4) Grantees will not be required to
submit more than the original and two
copies of forms required under this pan.
(5) Federal agencies may provide com.
puter outputs to grantees to expedite or '
contribute to the accuracy of reponing.
Federal agencies may accept the required
information from grantees in machine
usable format or computer printouts in-
stead of prescribed forms.
(6) Federal agencies may waive any
repon required by this section if not
needed.
(7) Federal agencies may extend the
due date of any financial repon uponsreceiving a justified request from a grant-
ee.
(b) Financial Status Report-{l) Form.
Grantees will use Standard Form 269 or
269A, Financial Status Report, to report
the status of funds for all nonconstruction
grants and rorconstruction grants when
required in accordance with
~ 85.41(e)(2)(iii) of this section.
(2) Accounting basis. Each grantee will
repon program outlays and program in-
come on a cash or accrual basis as pre-
scribed by the awarding agency. If the
Federal agency requires accrual informa-
tion and the grantee's accounting records
are not normally kept on the accrual
basis, the grantee shall not be required to
conven its accounting s)'stem but shall
15
COMMUNITY DEVELOP1NT
(b) Ail other grantees. All other grantees
shall follow the provisions of this part
which are applicable to awarding agencies
when awarding and administering sub-
grants (whether on a cost reimbursement
or fixed amount basis) of financial assis-
tance to local and Indian tribal govern.
ments. . Grantees shall:
(I) Ensure that every subgrant includes
a provision for compliance with this part;
(2) Ensure that every subgrant includes
any clauses required by Federal statute
and executive orders and their imple.
menting regulations; and
(3) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statutes and regulations.
(c) Exceptions. By their own terms,
certain provisions of this part do not
apply to the award and administration of
subgrants:
(I) Section 85.10;
(2) Section 85.11;
(3) The letter.of-credit procedures spec-
ified in Treasury Regulations at 31 CFR
Part 205, cited in ~ 85.21; and
(4) Section 85.50.
.~
"5
~-
.j;,.
'_.;"~
Reports, Records, Retention, and
Enforcement
.
~ 85.40 Monitoring and reporting
program performance.
/ (a) Monitoring by grantees. Grantees
are responsible for managing tbe ~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 tbat perfor-
mance goals are being achieved. Grantee
monitoring must cover eacb program,
function or activity.
(b) Nonconstruction performance re-
ports. The Federal agency may, if it
decides that performance information
available from subsequent applications
contains sufficient information to meet
its programmatic needs, require the
grantee to submit a performance report
only upon expiration or termination of
grant support. Unless waived by the Fed-
eral agency this report will be due on the
saine date as the final Financial Status
Report. ,
(I) Grantees shall submit annual per-
formance reportS unless the awarding
agency requires quarterly or semiannual
reports. Howe~er,performance reportS
will not be required more frequently than
quarterly. Annual reports shall be due 90
day~ after the grant year, quarterly or
semI-annual reports shall be due 30 days
after the reporting period. The final per-
formance report will be due 90 days after
the expiration or termination of grant
support. If a justified request is submitted
by a grantee, the Federal agency may
extend the due date for any performance
report. Additionally, requirements for un-
necessary performance reportS may be
waived by tbe Federal agency.
(2) Performance reports will contain,
for each grant, brief information on the
following:
(i) A comparison of actual accomplish-
ments to the objectives established for the
period. Where the output of the project
can be quantified, a computation of the
cost per unit of output may be required if
that information will be useful.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(iii) Additional peninent information
including, when appropriate, analysis and
explanation of cost overruns or high unit
costs.
(3) Grantees will not be required to
submit more than the original and two
copies of performance reports.
(4) Grantees will adhere to the stan-
dards in this section in prescribing perfor-
mance reporting requirements for sub-
grantees.
(c) ConstruClion 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 quanerly.
(d) Significant developments. Events
may occur between the scheduled perf or.
mance reporting dates which have signifi-
cant impact upon the grant or subgrant
supported activity. In such cases, the
grantee must inform the Federal agency
as soon' as the following types of condi-
tions become known:
(1) Problems, delays, or adverse condi-
tions which will materially impair the
ability to meet the objective of the award.
This disclosure must include a statement
of the action taken, or contemplated, and
any assistance needed to resolve the situa-
tion.
(2) Favorable developments which en-
able meeting time schedules and objec-
tives sooner or at less cost than antici-
pated or producing more beneficial re-
sults than originally planned.
(e) Federal agencies may malee site
visits as warranted by program needs.
(0 Waivers. extensions. (I) Federal
agencies may waive any performance
report required by this part if not needed.
(2) The grantee may waive any perfor-
mance report from a subgrantee when not
needed. The grantee may extend the due
date for any performance report from a
subgrantee if the grantee will still be able
Published by Warren, Gomam & Lamont, Inc.
I
09: 1563
HDR RF-417
1-15-90
to meet its performance reporting obliga-
tions to the Federal agency.
~ 85.41 Financial reporting.
(a) General. (I) Except as provided in
paragraphs (a)(2) and (5) of this section,
grantees will use only the forms specified
in paragraphs (a) through (e) of this
section, and such supplementary or other
forms as may from time to time be
authorized by OMB, for:
(i) Submitting financial reports to Fed-
eral agencies, or
(ii) Requesting advances or reimburse-
ments when letters of credit are not used.
(2) Grantees need not apply the forms
prescribed in this section in dealing with
their subgrantees. However, grantees shall
not impose more burdensome require-
ments on subgrantees.
(3) Grantees shall follow all applicable
standard and supplemental Federal agen.
cy instructions approved by OMB to the
extend required under the Paperwork
Reduction Act of 1980 for use in connec-
tion with forms specified in paragraphs'
(b) through (e) of this section. Federal
agencies may issue substantive supple-
mentary instructions only with the ap-
proval of OMB. Federal agencies may
shade out or instruct the grantee to disre-
gard any line item that the Federal agency
finds unnecessary for its decisionmaking
purposes. . .
(4) Grantees will not be required to
submit more than the original and two
copies of forms required under this pan.
(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-{l) Form.
Grantees will use Standard Form 269 or
269A, Financial Status Report, to report
the status of funds for all non construction
grants and for construction grants when
required in accordance with
~ 85.4I(e)(2)(iii) of this section.
(2) Accounting basis. Each grantee will
report program outlays and program in-
come on a cash or accrual basis as pre-
scribed by the awarding agency. If the
Federal agency requires accrual informa-
tion and the grantee's accounting records
are not normally kept on the accrual
basis, the grantee shall not be required to
convert its accounting system but shall
15
COMMUNITY DEVELOP,ENT
(b) All other grantees. All other grantees
shall follow the provisions of this pan
which are applicable to awarding agencies
when awarding and administering sub.
grants (whether on a cost reimbursement
or fixed amount basis) of financial assis-
tance to local- and Indian tribal govern.
ments. .Grantees shall:
(1) Ensure that every subgrant includes
a provision for compliance with this part;
(2) Ensure that every subgrant includes
any clauses required by Federal statute
and executive orders and their imple-
menting regulations; and
(3) Ensure that subgrantees are aware
of requirements imposed upon them by
Federal statutes and regulations.
(c) Exceptions. By their own terms,
cenain 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 Spet-
ified in Treasury Regulations at 31 CFR
Pan 205, cited in ~ 85.21; and
(4) Settion 85.50.
.~
:i
.,!~-
---.
Reports, Records, Retention, and
Enforcement
.
,~85.4O Monitoring and reporting
program performance..
/ (a) Monitoring by grantees. Grantees
are responsible for managing the dav-to-
day operations of grant and subgrant
Sii'Pponed activities. Grantees must mon-
itor grant and subgrant supported activi.
ties to assure compliance with applicable
Federal requirements and that perfor-
mance goals are being achieved. Grantee
monitoring must cover each program,
function or activity.
(b) Nonconstruction performance re-
ports. The Federal agency may, if it
decides that performance information
available from subsequent applications
contains sufficient information to meet
its programmatic needs, require the
grantee to submit a performance report
only upon expiration or termination of
grant support. Unless waived by the Fed-
eral agency this report wiU be due on the
same date as the final Financial Status
Report. ,
(1) Grantees shall submit annual per-
formance reports unless the awarding
agency requires quarterly or semiannual
reports. However, performance reports
will not be required more frequently than
quarterly. Annual reports shall be due 90
days after the grant year, quarterly or
semi-annual reports shall be due 30 davs
after the reporting period. The final per-
formance repon 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 rcports may be
waived by the Federal agency.
(2) Performance reports will contain,
for each grant, brief information on the
following:
(i) A comparison of actual accomplish-
ments to the Objectives established for the
period. Where the output of the project
can be quantified, a computation of the
cost per unit of output may be required if
that information will be useful.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(iii) Additional pertinent information
including, when appropriate, analysis and
explanation of cost overruns or high unit
costs.
(3) Grantees will not be required to
submit more than the original and two
copies of performance reports.
(4) Grantees will adhere to the stan.
dards in this section in prescribing perfor-
mance reporting requirements for sub.
grantees.
(c) Construction performance reports.
For the most Pan. oD-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 quanerly.
(d) Significant developments. Events
may occur between the scheduled perfor-
mance reporting dates which have signifi-
cant impact upon the grant or subgrant
supported activity. In such cases, the
grantee must inform the Federal agency
as soon as the following types of condi-
tions become known:
(1) Problems, delays, or adverse condi.
tions which will materially impair the
ability to meet the objective of the award.
This disclosure must include a statement
of the action taken, or contemplated. and
any assistance needed to resolve the situa-
tion.
(2) Favorable developments which en-
able meeting tim~ schedules and objet-
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.
(0 Waivers. extensions. (1) Federal
agencies may waive any performance
report required by this part if not needed.
(2) The grantee may waive any perfor-
mance report from a subgrantee when not
needed. The grantee may extend the due
date for any performance report from a
subgrantee if the grantee will still be able
Published by Warren. Gorham & Lamont. Inc_
I
09:1563
HDR RF -417
1-15-90
to meet its performance reponing obliga-
tions to the Federal agency.
~ 85.41 Financial reporting.
(a) General. (1) Except as provided in
paragraphs (a)(2) and (5) of this section,
grantees will use only the forms specified
in paragraphs (a) through (e) of this
section, and such supplementary or other
forms as may from time to time be
authorized by OMB. for:
(i) Submitting financial reports to Fed-
eral agencies, or
Oi) Requesting advances or reimburse-
ments when letters of credit are not used.
(2) Grantees need not apply the forms
prescribed in this section in dealing with
their subgrantees. However, grantees shall
not impose more burdensome require-
ments on subgrantees.
(3) Grantees shall follow all applicable
standard and supplemental Federal agen-
cy instructions approved by OMB to the
extend required under the Paperwork
Reduction Act of 1980 for use in connec-
tion with forms specified in paragraphs'
(b) through (e) of this section. Federal
agencies may issue substantive supple-
mentary instructions only with the ap-
proval of OMB. Federal agencies may
shade out or instruct the grantee to disre-
gard any line item that the Federal agency
finds UDnecessary for its decisionmaking
purposes.
(4) Grantees will not be required to
submit more than the original and two
copies of forms required under this pan.
(5) Federal agencies may provide com-
puter outputs to grantees to expedite or .
contribute to the accuracy of reporting.
Federal agencies may accept the required
information from grantees in machine
usable format or computer printouts in.
stead of prescribed forms.
(6) Federal agencies may waive any
report required by this section if not
needed.
(7) Federal agencies may extend the
due date of any financial report upon
receiving a justified request from a grant-
ee.
(b) Financial Status Report-(l) Form.
Grantees will use Standard Form 269 or
269A. Financial Status Report, to report
the status of funds for all nonconstruction
grants and rorconstruction grants when
required in accordance with
~ 85.4 I (e)(2)(iii) of this section.
(2) Accounting basis. Each grantee will
report program outlays and program in-
come on a cash or accrual basis as pre-
scribed by the awarding agency. If the
Federal agency requires accrual informa-
tion and the grantee's accounting records
are not normally kept on the accrual
basis, the grantee shall not be required to
convert its accounting system but shall
15
09: 1564
develop such accrual information through
and analvsis of the documentation on
hand. .
(3) Frequenc}'. The Federal agency may
prescribe the frequency of the repon for
each project or program. However, the
repon will not be required more frequent-
ly than quanerly. If the Federal agency
does not specify the frequency of the
repon, it will be submitted annual Iv. A
final repon will be required upon expira-
tion or termination of grant suppon.
(4) Due date. When repons are re-
quired on a quanerly or semiannual ba-
sis, they will be due 30 days after the
reponing period. When required on an
annual basis, they will be due 90 days
after the grant year. Final repons will be
due 90 days after the expiration or termi-
nation of grant suppon.
(c) Federal Cash Transactions Report-
(1) Form. (i) For grants paid by letter or
credit, Treasury check advances or elec-
tronic transfer of funds, the grantee will
submit the Standard Form 272, Federal
Cash Transactions Repen, and when nec-
essary, its continuation sheet, Standard
Form 27280 unless the terms CJf the award
exempt the grantee from this require-
ment.
(ii) These repons 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 repon may be
adapted as appropriate when reponing is
to be accomplished with the assistance of
automatic data processing equipment-
provided that the information to be sub-
mitted is not changed in substance.
(2) Forecasts of Federal cash require-
ments. Forecasts of Federal cash require-
ments may be required in the "Remarks"
section of the repon.
(3) Cash in hands of subgrantees. When
considered necessary and feasible, by the
Federal agency, grantees may be required
to repon the amount of cash advances in
excess of three days' needs in the hands of
their subgrantees or contractors and to
provide shon narrative explanations of
actions taken by the grantee to reduce the
excess balances.
(4) Frequency and due date. Grantees
must submit the repon no later than 15
working days following the end of each
quaner. However, where an advance ei.
ther by letter of credit or electronic
transfer of funds is authorized at an
annualized rate of one million dollars or
more, the Federal agency may require the
repon to be submitted within 15 working
days following the end of each month.
(d) Request for advance or reimburse-
ment-( I) Advance payments. Requests
for Treasury check advance payments will
be submitted on Standard' Form 270,
Request for Advance or Reimbursement.
I
HOUSING AND DEVEiOPMENT REPORTER
(This form will not be used for draw-
downs under a letter of credit, electronic
funds transfer or when Treasury check
advance payments are made to the grant-
ee automatically on a predetermined ba-
sis.)
(2) Reimbursemellts. Requests for
reimbursement under nonconstruction
grants will also be submitted on Standard
Form 270. (For reimbursement requests
under construction grants, see paragraph
(e)(1) of this section.)
(3) Th~ frequency for submitting pay-
ment requests is treated in ~ 85.4I(b)(3).
(e) Outlay report and request for reim-
bursement for construction programs-( I )
Grants that suppon construction activi-
ties paid by reimbursement method. (i)
Requesters for reimbursement under con-
struction grants will be submitted on
Standard Form 271, Outlay Repon and
Request for Reimbursement for Con-
struction Programs. Federal agencies
may, however, prescribe the Request for
Advance or Reimbursement form, speci-
fied in ~ 85.41(d), instead of this form.
(ii) The frequency for submitting reim-
bursement requests is treated. in
~ 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 repon its outlays to the Federal
agency using Standard Form 271, Outlay
Repon and Request for Reimbursement
for Construction Programs. The Federal
agency will provide any necessary special
instruction. However, frequency and due
date shall be governed by ~ 85.41(b)(3)
and (4).
(ii) When a construction grant is paid
by Treasury cbeck advances based on
periodic requests from the grantee, the
advances will be requested on the form
specified in ~ 8S.41(d).
(iii) The Federal agency may substitute
the Financial Status Repon specified in
~ 85.41(b) for the Outlay Repon and
Request for Reimbursement for Con-
struction Programs.
(3) Accounting basis. The accounting
basis for tbe Outlay Repon 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) Applicabi/it},. (I) This section ap-
plies to all financial and programmatic
records, supponing documents, statistical
records, and other records of grantees or
subgrantees which are:
Published by Warren. Gornam & Lamont. Inc.
(i) Required to be maintained by the
terms of this pan, program regulations or
the grant agreement, or
(ii) Otherwise reasonably considered as
peninent to program regulations or the
grant agreement.
(2) This section does not apply to
records maintained by contractors or su\).
contractors. For a requirement to place a
provision concerning records in cenain
kinds of contracts, see ~ 85.36(i)(1O).
(b) Length of retention period. (I) Ex-
cept as otherwise provided, records must
be retained for three vears from the
staning date specified in 'paragraph (c) of
this section.
(2) If any litigation, claim, negotiation,
audit or other action involving the rec-
ords has been staned 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 su\).
grantee.
(c) Starring date of retention period-
( 1) General. When grant suppon is con-
tinued or renewed at annual or other
intervals. the retention periOd for the
records of each funding period stans on
the day the grantee or subgrantee submits
to the awarding agency its single or last
expenditure repon for that period. How-
ever, if grant suppon is continued or
renewed quanerly, the retention periOd
for each year's records stans on the day
the grantee submits its expenditure repon
for the last quaner of the Federal fiscal
year. In all other cases, the retention
period stans on the day the grantee
submits its final expenditure report. If an
expenditure repon has been waived, the
retention period stans on the day the
repon would have been due.
(2) Real property and equipment rec.
ords. The retention period for real proper-
ty and equipment records stam from the
date of the disposition or replacement or
transfer at the direction of the awarding
agency .
(3) Records for income transactions
after grant or subgrant support. In some
cases grantees must repon income after
the period of grant suppon. Where there
is such a requirement, the retention peri-
od for the records penaining to the earn-
16
'fT
']::"
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 dispIacement occun on or
after the' appropriate, date described in
paragraph (b)(2)(ii)(A) of this sectioJ.l' 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
para~raph (b) of this section:
(i) "Comparable replacement dwelling
unit" means a, dwelling unit that:
(A) . Meets the criteria of 24 CFR
42.2(c)(1) through (4); and
(B) Is available at a monthly cost for
rent plus estimated average monthly utili-
ty costs that does not exceed 30 percent of
the household's average gross monthly
income (with such adjustments to income
as the grantee may deem appropriate)
after taking into account any rental assis-
tance the household would receive. Where
a certificate or housing voucher is provid-
ed to' a household under paragraph
(b )(2)(i)(C)( 1 )(i) of this section, the dwell-
ing unit must be available to the house-
hold at a monthly cost for rent and
estimated average monthly utility cost
that does not exceed the Fair Market Rent
or the payment standard. respectively.
eii) "Decent, safe and sanitary dwelling"
means a decent, safe and sanitary dwelling
as defined in 24 CFR.42.2(e).
(iii) "Low/moderate income dwelling
unit" means a dwelling unit with a market
rental (including utility costs) that does
not exceed the applicable Fair Market
Rent (FMR) for existing housing and
moderate rehabilitation established under
24 CFR Part 888.
(iv) "Occupiable dwelling unit" means a
dwelling unit that is in a standard condi-
1
,.~..::.~:~~-i.~": '~~~~'\~..~~,:;: .t~1~~~~~~'~';~
HOUSING AND DEV1LOPMENT REPORTER.~;~';;~~f;~: ~
-:-~:.~.-:.: ~~
~~
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 suitabie 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 i 570.306(e)(1).
(4) Effective date. For all grants except
those made under Subpart D of this part
(Entitlement Grants), the provisions of
paragraph (b) of this section are applicable
to grants made. au. or after October 1,
1988. For grants made under Subpart D,
these provisions will govern all activities
for which funds are first obligated by the
grantee on or after the date the rust grant
is made after September 30, 1988, without
regard to the source year of the funds used
for the activity.
(c) Section 104(k) relocation require-
ments. Section 1000k) of the Act requires
that reasonable relocation. assistance be
provided to persons (families. individuals,
businesses, nonprofit organizations, or
fanns) 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 ~ S70.457(b).
Under CDBG programs, persons entitled
to assistance under this paragraph must be
provided relocation assistance, including
at It' minimum:
(1) Reasonable moving expenses;
(2) Advisory services needed to help in
relocating. The grantee shall advise ten-
ants of their rights under the Fe4eral Fair
Housing Law (Title vnn and of replace-
ment housing opportunities in such a
manner that, whenever feasible, they will
have a choice between relocating within
their neighborhoods and other neighbor-
hoods consistent with the grantee's re-
sponsibility to affirmatively further fair
housing; and
(3) Fmancial assistance sufficient to
enable any person displaced from his or
Published by Warren. Gorham, & Lamont, Inc.
her dwelling to lease and occupy a suit-
able. decent, safe and sanitary replacement
dwelling where the cost of rent and utili-
ties does not exceed 30 percent of the
household's gross income.
(d) Optional relocation assistance. Under
section 105(a)(11) of the Act, the grantee
may provide relocation payments and
other relocation assistance for individuals,
families, businesses, nonprofit organiza-
tions and fanns displaced by an activity
not subject to paragraphs (a), (b) or (c) of
this section. The grantee may also provide
relocation assistance to persons covered
under paragraphs (a), (b) or (c) of this
section beyond that required, Unless such
assistance is provided pursuant to State or
local law, the grantee must provide the
assistance only upon the basis of a written
determination that the assistance is appro-
priate and must adopt a written policy
available to the public that describes the
relocation assistance that the grantee has
elected to provide and that provides for
equal relocation assistance within each
class of displacees.
(e) Appeals. If a person disagrees with
the grantee's determination concerning
the person's eligibility far, or the amount
of a relocation payment under this section,
the person may file a written appeal of
that determination with the grantee. The
appeal procedure to be followed are de-
scribed in 24 CFR 42.10. A low- or
moderate-income household that has been
displaced from a dwelling may file a
written request for review of the grantee
decision, to the HUD Field Office.
(f) Responsibility o[ grantee. (1) The
grantee is responsible for ensuring compli-
ance with the requirements of this section,
notwithstanding any third party's contrac-
tual obligation to the grantee to comply
with the provisions of this part.
(2) The cost of assistance required
under this section may be paid from local
public funds, funds provided under this
. 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
residentiallenant 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
..'
.'
.
J"
',,~~-
.'<P.
~"!:
'":OOU
.
.
.
COMMUNITY DEVELOPMENT
1
nearby building an the real property fol-
'lowing the completion of the assisted
activity at a monthly rent and estimated
average cost for utilities that does not
exceed the greater of:
(i) 30 percent of the tenant household's
average monthly gross income; or
(ii) The tenant's monthly rent and
average cost for utilities before:
(A) The date that the owner submits a
request to the grantee for financial assis-
tance that is later approved for the re-
quested activity. (This applies to dwelling
units awned by a person other than a
Federal or State agency, as defmed 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 imder ~ 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 reimb\1rsed 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.
9 570.607 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 aflir-
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 1.1) 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 401(b) of the Lead-
Based Paint Poisoning Prevention Act (42
U.S.C. 4831(b)) directs the Secretary to
prohibit the use of lead-based paint in
residential structUres constructed or reha-
bilitated with Federal assistance. Such
prohibitions are contained in 24 CFR Part
35, Subpart B, and are applicable to
residential structures constructed or reha-
bilitated with assistance provided under
this part.
(b) Notification of htZZDrds 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-
F'ublished 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 &hall be notified:
(i) That the property may contain lead-
based paint;
(ii) Of the hazards of lead-based paint;
(iii) Of the symptoms and treatment of
lead-based poisoning;
(iv) Of the precautions to be taken to
. avoid lead-based paint poisoning (includ-
ing maintenance and removal techniques
for eliminating such hazards);
(v) Of the advisability and availability of
blood lead level screening for children
under seven years of age; and
(vi) That in the event of lead-based
paint is found on the property, appropriate
abatement procedures may be undertaken.
(c) Elimination of lead-based paint haz-
ards. The purpose of this paragraph is to
implement the provisions of section 302 of
the Lead-Based Paint Poisoning Preven-
tion Act, 42 U.S.C. 4822, by establishing
procedures to eliminate as far as practica-
ble the hazards due to the presence of
paint which may contain lead and to
which children under seven 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;
(Hi) Water or sewer hook-ups;
(iv) lnstallation of security devices;
(v) Facilitation of tax exempt bond
issuances which provide funds for rehabili-
tation;
(vi) Other similar types of single-pur-
pose programs that do not include physi-
cal repairs or remodeling of applicable
surfaces (as defined in 24 CFR 35.22) of
residential structures; and
25
09:0666
(vii) Any non-single purpose rehabilita-
tion that does not involve applicable sur-
faces (as defined in 24 CFR 35.22) that
does not exceed $3,000 per unit.
(2) Defi{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 comers.
windowsills and frames, doors and frames,
and other protruding woodwork.
"Defective paint surface. Paint on appli-
cable surfaces that is cracking, scaling,
chipping, peeling or loose."
"Elevated blood lead level or EBL."
Excessive absorption of lead. that is, a
confinned concentration of lead in whole
blood of 25 ILidl (micrograms of lead per
deciliter of whole blood) or greater.
"Lead-based paint surface. .. A paint
surface, whether or not defective, identi-
fied as having a lead content greater than
or equal to I mg/cmz.
. (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 Imglcmz or higher using an XRF shall-
be considered positive for presence of lead-
based paint.
(iii) Abatement without testing. In lieu of
the procedures set forth in paragraph
(c)(3)(ii) of this section, in the case of a
residential structure constructed prior to
1978, the grantee may forgo testing and
abate all applicable surfaces in accordance
with the methods set out in 24 CFR
35.24(b)(2)(ii).
(4) Abatement Actions. (1) For inspec-
tions perfonned under ~ 570.608(c)(3)(i)
and where defective paint surfaces are
found, treatment shall be provided to
I
HOUSING AND DEVElOPMENT REPORTER -
defective areas. Treatment shall be per-
fonned before final inspection and approv-
al of the work.
(ii) For testing perfonned under
~ 570.608(c)(3)(ii) and where interior
chewable surfaces are found to contain
lead-based paint, all interior chewable
surfaces in any affected room shall be
treated. Where exterior chewable surfaces
are found to contain lead-based paint, the
entire exterior chewable surface shall be
treated. Treatment shall be perfonned
before final inspection and approval of the
work.
(iii) When weather prohibits repainting
exterior surfaces before final inspection,
the grantee may pennit the owner to abate
the defective paint or chewable lead-based
paint as required by this section and agree
to repaint by a specified date. A separate
inspection is required.
(5) Abatement methods. At a minimum,
treatment of the defective areas and chew-
able lead-based paint surfaces shall consist
of covering or removal of the painted
surfaces as described in 24 CPR
35.24(b )(2)(ii).
(6) Funding for inspection. tuting and
abatement Program requirements and lo-
cal program design will determine wheth-
er the cost of inspection, testing or abate-
ment is to be borne by the own-
er/developer and the grantee.
(7) Tenant protection. The own-
er/developer shall take appropriate action
to protect tenants from hazards associated
with abatement procedures. Where neces-
sary, these actions may include the tempo-
rary relocation of tenants during the
abatement process. The owner/developer
shall notify the grantee of all such actions
taken.
(8) Records. The grantee shall keep a
copy of each inspection and/or test report
for at least three years.
(9) Monitoring and enforcement. HUD
field office monitoring of rehabilitation
programs includes reviews for compliance
with applicable program requirements for
lead-based paint. The CPO Field Monitor-
ing Handbook which currently includes
instructions for monitoring lead-based
paint requirements will be amended as
appropriate. In cases of noncompliance,
HUD may impose conditions or sanctions
on grantees to encourage prompt compli-
ance.
(10) Compliancr with other program
requirements. FederaL State and local
laws.
(i) Other program requirements. To the
extent that assistance from any of the
programs covered by this section is used in
conjunction with other HUD program
"ublished by Warren, Gomam, & Lamont Inc,
,
j
assistance which have lead-based paint
requirements which may have more or less
stringent requirements. the more stringent
requirements will prevail.
(ii) HUD responsibility. If HUD deter-
mines that a State or local law, ordinance,
code or regulation provides for lead.based
paint testing or hazard abatement in a
manner which provides a level of protec-
tion from the hazards of lead-based paint
poisoning at least comparable to that
provided by the requirements of this sec-
tion and that adherence to the require-
ments of this subpan 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 CPR Parts 260
through 271.)
t-
~ 570.609 Use of debarred, suspended
or ineligible contractors or
subrec:ipients.
Assistance under this part shall not be
used directly or indirectly to employ,
award contracts to, or otherwise engage
the services of, or fund any contractor or
subrecipient during any period of debar-
ment. suspension, or placement in ineligi.
bility status under the provisions of 24
CFR Part 24.
~ 570.610 Uniform administrative
requirements and cost principles.
The recipient, its agencies or instrumen-
talities, and subrecipients shall comply
with the policies, guidelines, and require-
ments of 24 CFR Part 85 and OMB
Circulars A.87, A-IIC, A-Ill, and A-1282
implemented at 24 CFR Part 44), as
applicable, as they relate to the acceptance
'See footnote 1 for ~ 570.200(a)(5),
~
~
26
COMMUNITY DEVELOPMENT
I
and use of Federal funds under this part.
The applicable sections of 24 CFR Part 85
and OMB Circular A.IIO are set forth at
~ 570.502.
~ 570.611 Conflict or interest.
.,:;,..,.:)
(a) Applicability. (1) In the procurement
of supplies, equipment. construction, and
services by recipients, and by subrecipients
(including those specified at ~ 570.204(c)).
the conflict of interest provisions in 24
CFR 85.36 and OMB Circular A-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 acquisition and disposi-
tion of real property and the provision of
assistance by the recipient. by. its subreci-
pients, or to individuals, businesses or
other private entities under eligible activi-
ties which authorize such assistance (e.g.,
rehabilitation, preservation. and other im-
provements or private properties of facili-
ties pursuant to ~ 570.202, or grants, loans
and other assistance to businesses, individ-
uals and other private entities pursuant to
~ 570.203, ~ 570.204 or ~ 570.455).
(b) Conflicrs prohibited. Except for the
use of CDBG funds to pay salaries and
other related administrative or personnel
costs, the general rule is that no persons
described in paragraph (c) of this section
who exercise or have exercised any func-
tions or responsibilities with respect to
CDBG activities assisted under this part
or who are in a position to participate in a
decision making process or gain inside
information with regard to such activities.
may obtain a personal or financial interest
or benefit from a CDBG assisted activity.
or have an interest in any contract, sub-
contract or agreement with respect there-
to, or the proceeds thereunder, either for
themselves or those with whom they have
family or business ties, during their tenure
or for one year thereafter. For the UDAG
program, the above restrictions shall apply
to all activities that are a part of the
UDAG project, and shall cover any such
interest or benefit during, or at any time
after, such person's tenure.
(c) Persons covered. The conflict of
interest provisions of paragraph (b) of this
section apply to any person who is an
employee, agent, consultant, officer, or
elected official or appointed official of the
recipient, or of any designated public
agencies, or subrecipients which are re-
ceiving funds under this part.
'"
,,..
",41,:
1='"
.....
(d) Exceptions: threshold requirements.
Upon the written request of the recipient,
HUD may grant an exception to the
provisions of paragraph (b) of this section
on a case-by-case basis when it determines
that such an exception will serve to further
the purposes of the Act and the effective
and efficient administration of the recipi-
ent's program or project. An exception
may be considered only after the recipient
has, provided the following:
(1) A disclosure of the nature of the
conflict, accompanied by an assurance
that there has been public disclosure of the
conflict and a description of how the
public disclosure was made; and
(2) An opinion of the recipient's attor.
ney that the interest for which the excep-
.tion is sought would not violate State or
local law.
(e) Factors to be considered for excep-
tions. In determining whether to grant a
requested exception after the recipient has
satisfactorily met the requirements of
paragraph (d) of this section, HUD shall
consider the cumulative effect of the fol-
lowing factors. where applicable:
(1) Whether the exception would pro-
vide a significant cost benefit or an essen-
tial degree of expertise to the program or
project which would otherwise not be
available;
(2) Whether an opportunity was provid-
ed for open competitive bidding or negoti-
ation;
(3) Whether the person affected is a
member. of a group or class of low- or
moderate-income persons intended to be
the beneficiaries of the assisted activity,
and the exception will permit such person
to receive generally the same interests or
benefits as are being made available or
provided to the group or class;
(4) Whether the affected person has
withdrawn from his or her functions or
responsibilities. 'or the decisionmaking
process with respect to the specific assisted
activity in question;
(5) Whether the interest or benefit was
present before the affected person was in a
position as described in paragraph (b) of
this section;
(6) Whether undue hardship will result
either to the recipient or the person
affected when weighed against the public
interest served by avoiding the prohibited
conflict; and
(7) Any other relevant considerations.
Published by Warren, GorI'Iam, & l.amont, Inc.
I
09:0667
HDR RF.388
12-5-88
S 570.612 Executive Order 123n.
(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
9570.700 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 subpan. In
such case the applicant unit of general
local government shall be required to
pledge its current and future grants under
the Act as security for the notes or other
obligations issued by the public agency.
~ 570.701 Eligible activities.
Loan guarantee assistance under this
subpart may be used for the following
activities undertaken by the unit of general
local government or its designated public
agency provided such activities meet the
requirements of 9 570.200. However, guar-
anteed loan funds may not be used to
reimburse the program account or letter of
credit for costs incurred by the unit of
general local government or designated
public agency and paid with other CDBG
funds.
27
09:0668
(a) Acquisition of improved or unim-
proved real property in fee or by long-
tenn lease, including acquisition for ec0-
nomic development purposes.
(b) Rehabilitation of real property
owned or acquired by the unit of general .
local government or its designated public
agency.
(c) Payment of interest on obligations
guaranteed under this subpart.
(d) Relocation payments and assistance
for individuals, families, businesses, non-
profit organizations and farm operations
displaced as a result of activities financed
with loan guarantee assistance.
(e) Clearance, demolition and removal,
including movement of structures to other
sites, of buildings and improvements on
real property acquired or rehabilitated
pursuant to paragraphs (a) and (b) of this
section.
(f) Site preparation, including construc.
tion, reconstruction, or installation of
public improvements, utilities, or facilities
(other than buildings) related to the rede-
velopment or use of the real property
acquired or rehabilitated pursuant to para-
graphs (a) and (b) of this section.
(g) Payment of issuance. underwriting,
servicing, and other costs associated with
private sector financing of notes or other
obligations guaranteed under this subpart.
(h) Housing rehabilitation eligible under
~ 570.202.
(i) Activities eligible under ~ 570.203.
G) Community economic development
projects eligible under, ~ 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.
~ 570.702 Application requirements.
(a) Presubmission requirements. (I) Pri-
or to submission of an application for loan
guarantee assistance to HUD, the appli-
cant must comply with the presubmission
requirements specified in ~ 570.301 with
res)5ec;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 ~ 570.301 by
including and identifying the activities to
I
HOUSING AND DEVELOPMENT REPORTER
I
be undertaken with the guaranteed loan
funds.
(b) Submission requirements. An appli-
cation for loan guarantee assistance shall
be submitted to the appropriate HUD
field office and shall consist of the follow.
ing:
(I) A copy of the applicant's final
statement of community development ob-
jectives and projected use of guaranteed
loan funds.
(2) A description of how each of the
activities to be carried out with the guar-
anteed loan funds meets one of the criteria
in ~ 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 ~ 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 tenn
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
~ 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 repaymenL 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 debL
(d) BUD reFiew and approwzJ of applico-
tions. (1) HUD will nonnally accept the
grantee's certifications. The Secretary re-
serves the right, however, to consider
relevant infonnation which challenges the
certifications and to require additional
infonnation or assurances from the grant-
ee as warranted by such infonnation.
Published by Warren, Gorham, & Lamont. Inc,
(2) The field office shall review the
application for compliance with require-
ments specified in this subpart and for-
ward the application together with its
recommendation for approval or disap-
proval of the requested loan guarantee 10
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 detennines 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
~ 570.703(b).
(ii) The guarantee requested exceeds the
muimum loan amount specified under
~ 570.703(a).
(iii) Funds are not available in the
amount requested.
(iv) The applicant's perfonnance 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 ~ 570.701(a) through (k).
(vi) Activities to be undertaken with the
guaranteed loan funds do not meet the
criteria in ~ 570.208 for compliance with
one of the national objectives of the Act.
(4) The Secretary will notify the appli-
cant in writing that the loan guarantee
request has either been approved, reduced
or disapproved. If the request is reduced
or disapproved, the applicant shall be
infonned 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
~ 570.305. If the applicant wishes to carry
out an activity not previously described in
its final statement or to substantially
28
COMMUNIIT DEVELOPMENT
I
APPENDIX L
).
09:1601
HDR RF-42~
6-10-90
I
NON-FEDERAL GOVERNMENTAL AUDIT REQUIREMENTS
(24 CFR 44)
DEP ARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Office df the Secretary,
24 CFR PART 44
Non.Federal Government Audit
Requirements
AGENCY: Office of the Secretary, HUD.
AcrION: Final Rule
[50 FR 39086, Sept. 27, 1985]
PART 44-NON-FEDERAL
GOVERNMENTAL AUDIT
REQUIREMENTS
f .:,~~
;~
.....,;.,;;;'
Sec.
44.1 Purpose.
44.2 Definitions.
44.3 Scope of audit.
44.4 Frequency of audit.
44.5 Internal control and compliance
reviews.
44.6 Subrecipients.
44.7 Relationship to other audit require-
ments.
44.8 Cognizant agency responsibilities.
44.9 Illegal acts or irregularities.
44.10 Audit reports.
44.11 Audit resolution.
44.12 Audit workpapers and reports.
44.13 Audit costs.
44.14 Sanctions.
44.15 Auditor selection.
44.16 Small and minoritv audit firms.
44.17 Reporting. .
44.18 HUD audits.
Appendix to Pan 44-Definition of
Major Program as provided in the Single
Audit Act of 1984.
Authority: Single Audit Act of 198.: C31
U.S.C. 7501-7507); sec. 7Cd) of the De-
partment of Housing and Urban Devel-
opment Act (42 U.S.c. 3535(d)).
~ 44.1 Purpose.
(a) ,This pan implements the general
audit requirements for recipienl organiza-
tions in OMB Circular A-128 '.Audits of
State and local governments." The OMB
Circular was issued under the Sin2le
Audit Act of 1984.31 U.S.c. 7501-7507.
OMB Circular A-128 supersedes Attach-
ment p. "Audit requirements." of Circu-
lar A-I02. "Uniform requirements for
grants 10 State and local governments."
(I) This pan repeats all substantive
audil requirements in OMB Circular A-
128. If any of the substantive audit re.
quirements in OMB Circular A-128 are
revised i~ the future, HUD shall promul-
gate regulations to conform this part to
those revisions.
(2) The difference between the lan-
guage of this pan and of OMB Circular A-
128 generally reflects only the substitu-
tion of certain terms and phrases reflect-
ing the implementation of the Circular
into the codification for HUD regula.
tions. For example. in certain sections of
this pan. references to "Federal agencies"
in the Circular have been changed to
"HUD" and references to "this Circular"
are replaced with '.OMS 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 finns owned
and controlled by disadvantage individu-
als have the opponuniry to participate in
contracts for single audits.
(c) Concerning the applicability of the
audit requirements of the Single Audit
Act, the Act requires:
(I) State or local governments that
receive $100,000 or more a year in Feder-
al financial assistance shall have an audit
conducted in accordance with the Act's
requirements;
(2) State or local governments that
receive between S25.OO0 and S I 00.000 a
vear shall have an audit conducted in
accordance with the Act's requirements
(Government-, Department-, agency- or
establishmenl-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
the specific Federal assistance programs
invoived. For those programs nOl covered
by the Compliance Supplement, the fi-
nancial audit shall include an\' specific
compliance tests required by HUD.
If the Federal assistance prog.ram is nol
covered by the Compliance Supplement
PuDlished Dy Warren, Gortlam & Lamont. Inc.
and if no compliance requirements have
been established by HUD, the auditor
shall design appropriate compliance tests
in accordance with government auditing
standards. Audits shall be conducted with
the frequency described at ~ 44.4.
(3) State or local governments that
receive less than S25.000 a year shall be
exempl from compliance with the Act
and other Federal audit requirements.
These State and local governments shall
comply with audit requirements pre-
scribed by State or local law or regulation.
Cd) The Act does not exempt State or
locid governments from maintaining rec-
ords of Federal financial assistance or
from providing access to such records to
Federal agencies. as provided in Federal
law or in 24 CFR Pan 85.
(e) The Act is applicable to State and
local governments with respect to any
fiscal year that begins after December 31,
1984.
~ 44.2 Definitions.
"Cognizant agency" means the Federal
agency assigned by OMB to carry out the
responsibilities described in this 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, lean guarantees,
property, interest subsidies, insurance. or
direct appropriations, but does not in-
clude direct Federal cash assistance to
individuals. It includes awards received
directly from Federal agencies, or indi-
rectly through other units of State and
local governments.
"Federal agency" has the same mean-
ing as the term "agency" in section 551 (1)
of Title 5. United States Code.
"Generally accepted accounting princi-
ples" has the meaning specified in the
generally accepled government auditing
standards.
"Generally accepted government audit-
ing standards" means the Standards For
Audit of Government Organi:alions. Pro-
grams. AClivities. and Functions. devel-
oped by the Comptroller General, dated
February 27, 1981.
"HUD" means the Department of
Housing and Urban Development.
"Independent auditor.' means:
(1) A State or local government auditor
who meets the independence standards
specified in generally accepted govern-
ment auditing standards; or
3
'09:1602
(2) A public accountant 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 Alaslaul 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 repons.
, "Local government" means any unit of
local government within a State, includ-
ing a county, a borough, municipality,
city, town, township, parish, locaj public
authority, special district, school district,
intrastate district, council of govern-
ments, and any other instrumentality of
local government.
"Major Federal Assistance Program" is
defined in the Appendix to this pan.
"Public accountants" means those in-
dividuals who meet the qualification
standards included in generally accepted
government auditing standards for per-
sonnel performing government audits.
)
HOUSING AND DE1LOPMENT REFORTEF.
"State" means any State of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, the Vir.
gin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana
Islands, and the Trust Territory of the
Pacific IsJands, any instrumentality th~
of, and any multi-State, regional. or inter-
state entity that has governmental func-
tions and any Indian tribe.
"Subrecipient" means any person or
government department, agency, or es-
tablishment that receives Federal finan.
cial assistance through a State or local
government, but does not include an
individual that is a beneficiary of such
assistance. A subrecipient may also be a
direct recipient of Federal financial assis-
tance.
i 44.3 Scope of audit.
(a) The audit shall be made by an
independent auditor in accordance with
generally accepted government auditing
standards covering financial and compli-
ance audits.
(b) The audit shall cover the entire
operations of a State or local government
or, at the option of that government, it
may cover departments, agencies or es-
tablishments that received, expended, or
otherwise administered Federal fmancial
assistance during the year. However, if a
State or local government receives
S25,000 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 depan-
Pubtishecl by Warren. Gorl'l8m & Lamont, Inc.
ments, agencies, and establishments for
the same fiscal year may be considered a
single audit.
(c) Public hospitals and public colleges
and universities may be excluded from
State and local audits and from the
requirements of this part. However, if
such entities are excluded, audits of these
entities shall be made in accordance with
statutory requirements and the provisions
of Circular A-I 10, "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, depanment, 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.
i 44.4 Frequency of audit.
Audits shall be made annually
unless the State or local government
has adopted by January I, 1987, a
constitutional or statutory requirement
4
COMMUNITY 'DEVEL~PMENT BLOCK GRANTS
..
}
for less frequent audita. For those
governments. the cosnizant agency shall
permit biennial audits. covering both
years. if the government 80 requests. It
shall alao honor requests for biennial
audits by governments that have an
administrative policy calling for audits
less frequent than annual. but only for
fiscal years begimring before January 1.
1987.
! 44.5 Internal controt and comptlllnce
revtewL
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 abov.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) Compliance 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 newne.. 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 oC
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 requirementa.levels of effort
and earmaking limitations were met
whether Federal financial reports and
claims for advances and
reimbursements contain information
that is supported by the books and
records from which the basic fmancial
statements have been prepared: and
whether amounts claimed or use.:i for
matchiDg were determined in
accordance with OMB Circular A-a7;
"Cost principles for State and local
governments." and Attachment F of
OMB Circular A-102.
(iii) The principal compliance
requirements of the largest Federal aid
programs may be ascertained by
referring to the Compliance Supplement
for Single Audits of State and Local
Governments, issued by OMB and
avsJIable from the Government Printing
Offi.ce. For those programs not covered
in the Compliance Supplement. the
Published by Warren. Gorham & Lamont, Inc.
I
09:1603
HDR RF-306
10-28-85
auditor may ascertain compliance
requirements by researching the
statutes. regulations. and agreements
governing individual programs.
(3) Transactions related to other
Federal assistance programs that are
selected in connection with
examinations of financial statements
and evaluations of inMlrnal 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 Subnlctplents.
State and local governments that
receive Federal financial assistance and
provide $25.000 or more of it in a fiscal
year to a subrecipient shall:
(a) Determine whether State or local
subrecipients have met the audit
requirements of this part and whether
subrecipients covered by OMB Circular
A-Uo. "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
f 44.7 Relationship to oth_ audit
requi..-raenta.
(a) The Single Audit Act provides that
an audit made in accordance with OMB
Circular A-l28 shall be in lieu of any
financial or financial compliance audit
required under individual Federal
assistance programs. To the extent that
a single audit provides HUD with
information and assurances the
Department needs to carry out its
overall program responsibilities. such
information shall be used. However. any
additional audits that are necessary to .
carry out responsibilities under Federal
law and regulation shall be planned and
carried out in such a manner as to avoid
duplication.
(b) HUD audlt"requirements in this
part do not limit the authority of the
Department to conduct or contract for
audits and evaluations of Federal
financial assistance programs. nor do
these audit requirements limit the
authority of the HUD Inspector General
or other Federal audit officials.
(c) HUD audit requirements in this
part do not authorize any State or local
government or subrecipient thereof to
constrain HUD in any manner. from
carrying out additional audits.
(d) If HUD conducts or contracts for
audits in addition to the audits
conducted by recipients under this part.
the Department shall consistent with
other applicable laws and regulationa.
arrange for funding the cost of such
additional audits.
f 44.8 Cognizant agency reeponalblU.....
(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 DEVILOPMENT REPORTER
(blIf HUD is designated as a
cognizant agency, it will:
(1) Ensure that audits are made and
reports are received in a timely manner
and in accordance with audit
requirements of this part.
(2) Provide technical advice and
liaison to State and local governments
and independent auditors.
(3) Obtain or make quality control
reviews of selected audits made by non-
Federal audit organizations;and provide
the results. when appropriate. to other
interested organizations.
(4) Promptly inform other affected
Federal agencies and appropriate
Federal law enforcement officials of any
reported illegal acts or irregularities.
They should also inform State or local
law enforcement and prosecuting
authorities. if not advised by the
recipient. of any violation of law within
their jurisdiction.
(5) Advise the recipient of audits that
have been found not to have met the
requirements in this part. In such
instances. the recipient will be expected
to work with the auditor to take
corrective action. If corrective action is
not taken. HUD shall notify the recipient
and Federal awarding agencies of the
facts and make recommendations for
follow-up action. Major inadequacies or
repetitive substandard performance of
independent auditors shall be referred
to appropriate professional bodies for
disciplinary action.
(6) Coordinate. to the extent
practicable. audits made by or for
Federal agencies that are in addition to
the audits conducted under this part. so
that the additional audits build upon
such audits.
(7) Oversee the resolution of audit
findings that affect the programs of more
than one agency.
f 44.1 IIepI acta or Ir'I'egua.ttIea
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 Ine,
the illegal acts or irregularities and of
proposed and actual actions. if any.
Illegal acts and irregularities include
such matters as conflicts of interest,
falsification of records or reports. and
misappropriations of funds or other
assets.
f 44. 10 AudIt reports.
(a) Audit reports shall be prepared at
the completion of the audit. The audit
report shall state that the audit was
made in accordance with the provisions
of HUD requirements at 24 CFR Part 44.
The report shall be made up of at least:
(1) The auditor's report on financial
statements and on a schedule of Federal
assistance: the financial statements: and
a schedule of Federal assistance.
showing the total expenditures for each
. Federal assistance program as identified
in the Catalog of Federal Domestic
Assistance. Federal programs or grants
that have not been assigned a catalog
number shall be identified under the
caption "other Federal assistance."
(2) The auditor's report on the study
and evaluation of internal control
systems must identify the organization's
significant internal accounting controls.
and those controls designed to provide
reasonable assurance that Federal
programs are being managed in
compliance with laws and regulations. It
must also identify the controls that were
evaluated. the controls that were not
evaluated. and the material weaknesses
identified as a result of the evaluation.
(3) The auditor's report on compliance
containing;
(i) A statement of positive lssurance
with respect to those items tested for
compliance. including compliance with
law and regulations pertaining to
financial reports and claims for
advances and reimbursements:
(ii) Negative assurance on those items
not tested:
(iii) A summary of all instances of
noncompliance: and
(iv) An identification of total amounts
questioned. if any. for each Federal
assistance award. as a result of
noncompliance.
COMMUNITY DEVElOPMENT BLOCK GRANTS
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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 acta. including all
questioned costs found... the result of
these acta that auditon become aware
of. should normaUy be COV8l8d in a
separate written report submitted in
accordance with. parapph (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 witJ:a generally
accepted government audit standards,
reports shall be submitted by the auditor
to the organization audited and to tho,e
requiring or arransiD8 for the audiL In
addition. the recipient shall submit
copies of the reports to each Federal
. department or agency that provided
Federal assistance funds to the
recipient. Subrecipients shall submit
copies to recipients that provided them
Federal assistance funda. 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.
. (gJ Recipients of more than 1100.000 in
Federal funda shall submit one copy of
the audit report. within 30 days after
issuance, to a central clearing house.
desisnated by OMB. The clearing house
will keep completed audits on 61e and
follow up with State and local
governments that have not submitted
required audit reports.
(h) Recipients shall keep audit reports
on 61e for three years after their
issuance.
(Approved by the OfBce of l\UnJllpm-t and
Bud&et UDder OMS control JI1IIDber 253S-
00lM.) .
f 44. 11 AudIt ..............
(a) As described in 144.8, the
cognizant agency shall be responsible
for monitoring the resolution of audit
findings that affect the progrema of more
than one Federal agency. Resolution of
findings that relate to the programs of a
single Federal agency will be the
responsibility of the recipient and that
agency. Altemative arrangements may
be made on a caae.by-caae basis by
agreement among the agencies
concerned.
(b).Resolution.ahall be made within
six months after receipt of the report by.
the Federal departmen. and agencies.
CorreCtive action should proceed as
ral'idly as poasible.
f 44.12 AUdIt ~ ~ NpOrtL
WorIcpapers and reports shan be
retained for a minimum of three yeus
from the date of the audit report. unless
the auditor is notified in writing by the
cognizant agency to extend the retention
period. Audit workpapen" shall be made
available upon request to the cognizant
agency or its desigpee or the Gener8l
Accounting Office, at the completion of
the audit.
(Approved by th. Office of ~ana.....ent and
Budget under OMB control number 253S-
00lM.)
f 44.13 AudIt .....
The cost of audits made in accordance
with the audit requirements of this part
are allowable charges to Federal
usistaDce programs.
(a) The charges may be considered a
direct cost or an allocated indirect cost.
determined in accordance with the
provisions of OMS Circular A~. "Cost
principles for State and local
governments."
PuDIished by Werr8n. 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 funda expended
represent of total funda expended by the
recipient during the fiscal year. The
percentage may be exceeded. however.
if eppropriate documentation
demonstrates higher. actual cosL
t 44.14 s.nctIona.
No C08t may be charged to Federal
assistance programs for audita that are
reqUired by this part, but.are not
conducted in accordance with the audit
requirements of this part. In ca8e of a
recipient's con~u8dinability or'
unwiUingn!t~ t.o hav,a proper..-udit.
Federal asencies shall consider' other
appropriate sanctions. including:
(a) Withholding a percentage of
assistmce Payments until the aUdit i8
completed satisfactorily;
(b) Witholding or disallowing
overhead costs; and
(c) Suppendingthe Federal assi8tance
agrtl8lDejit' Until the audit is made. .
~ 44.15 Auditor selection.
In arranging for audit services, State
and local governments shall follow the
procurement standards prescribed 24
CFR Part 85.36. The standards provide
that while recipients are encouraged to
enter in~o 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 intergovernemnt:ll
agreements are required by a State statute
(e.g., audit services) the State statute will
take precedence.
f 44.18 . SIMI 8M JIdnorIty 8UCIt fInnL'
Small audit firms, and audit firms
owned and controlled by socially and
economically diaadvantaged
individuals. shall have the maximum
7
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practicable opportunity to participate in
contracts awarded to fulfill the audit
requirements of this part. (As uaed in
thia section. the term "small. audit firms"
includes the term "audit firms controlled
by socially and eConomically
diladvantage individuals".) Recipienta
of Federal a88istance shall take the
following steps' to further this goal:
(a) Assure thatsmall audit firms are
used to the fullelllt extent practicable:
(b) Make information on forthcoming
opportunities available to. andarra118e
time schedules for the audit so as to
encourage and facilitate participation
by, sman audit firms;
(c) Consider in the contract process
whether finns 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 of,small audit firms when a
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HOUSING AND DEVELOPMENT REPORTER
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contract, is too larp for an individual
small ffr1il; and
(f) Use the services and assistance. as
appropriate. of the Small Business
Adirilnistration in the solicitation and-
utiliatfon of inn.all audit ftrma.
f .....17, Reporting.
HUD shall report ft) the Director of
OMBon or before Maft:h 1. 1987. and
annually thereafter. on the effectiveness
of State and local governments in
carryins out the requirements of the
OMD Circular. The report ahall identify
each State or local government or indian
tribe that, in th, OpiniOD ofHUD. has
failed to comply with OMB Circular or
with this'part.
f .....1.. HUD auc8tL
(a) The Secretary of HUDor the
Secretary's authorized representative
shall bave aocaaa to all books, accounts.
records. reports, files and other papers
or property of a recipient organization
pertaining t~Federal aasiatance
supplied by HUD to the recipieDt
organiJation. for the purpose of-making
Published by Warren. Gorham & Lamont. Inc.
specific suveys. audits. examinations.
excerpts and tranacripta.
AppeadIx to,Part ~doD of Major
Prasram .. Provided ID the Slagle Audit Act
of 11M
"Major Federal Aasfstanca Program." for.
Slate and locallCJV8l'llD18Dta having Federal
a..iatance expenditures between 5100.000
and 5100 million doJIara. me8D8 any program
for which Federal expenditures during the
applicable year exceed the laraer of S3OO,ooo.
or 3 percent of such total expanditures.
Where total expenditures of Federal
assiatanca exceed 5100 million. the following
criteria apply:
ToliIl _lllilw. 01 F..... lIn8ncial I\ol8jcIl: F.....
....... far .. IIftlOrMIS ........
JlI'OlldIII
-- en,
Male 1IW>- But ... ___ ~ IIlat
-
$100 mIIIian _' 51 billion 53 miIIIan.
S1bi11ion 52 billion 54 milliOn.
$2 liJIian 53 billion $7 million.
53 biIIion.__ 54 biIIlon___ 510miltian.
54lliU1on.~___-':' 55 bilIIan___ $13 million.
55 billion__ 51 bWian..__. $18 million.
$I biIIIon.__ $7 billion $19 milliOn.
Over $7 billion ~___. .----.- S20 million.
8